Transcripts For CNBC Closing Bell 20240714

Markets where startups and Venture Capital wont even go because dominant players are so big. Now, the committee is saying that it is getting pushback from Internet Companies who allege that they actuallyvation and not well bring you all the latest back to you. Thank you well be back with you joining us to break down the are market action, megan, good afternoon to you lets check the markets. Dow is flat. S p down 0. 03 , and of course any positive close for those three would be a record alltime closing high megan, relative softness today compared to of late. What do you think is driving that part of it is trade we heard words from President Trump around the risk of higher tariffs and that is something that weve been particularly cautious about we did get a trade truce if you will at the g20 but nothing really changed there. And so i think that what we saw is a little bit of weakness from the market on the back of the reality that we could get higher tariffs down the road. But that is countered by very strong consumer data that we got this morning so retail sales were very good and give us further assurance that the manufacturing showdown is not yet oozing into the services or consumer sector. So supporter discretionary is holding up and even some of the industrials which is perhaps surprising given the trade rhetoric and lets drill down into other big stories. Julia, the hearing on libra. And kayla has the President Trumps comments on trade. Meg ter ril has a break down of Johnson Johnson results. And phil lebeau on tesla lets begin with julia on Facebooks Libra coming under fire member of the Senate Banking committee attacking the head of the cryptocurrency division. Sherrod brown saying that facebook does not deserve trust 37. Like a toddler who has gotten his hands on a book of matches, facebook has burned down the house over and over. Facebook could monetize users data saying that they are committed to gaining all necessary Regulatory Approvals getting this right means addressing these concerns in full and ensuring that there is proper regulatory oversites for this project and marcus saying that the swiss Data Information commissioner would be the regulator and that until today they had not been contacted by facebook or libra. Facebook said that they have not yet contacted them but look forward to meeting with them and working together back to you. And jamie dimon on the Earnings Call for jpmorgan didnt seem particularly threatened by the sense of libra. Do you feel like that the Company Might live to regret announcing this because of the extra pressure it has focused on from regular late tors this is certainly a time when facebook is under so much scrutiny. Late tors this is certainly a time when facebook is under so much scrutiny we heard concerns about data and privacy, how they will be regulated in terms of data and privacy. And that falls in to other conversations and regulatory scrutiny of the need for more privacy regulations. And also the sense that facebook is just so big, several senators referenced that facebook is too big and this would give them even more power. So the timing is tough and then also the question of whether facebook came out with this idea too early. They havent even reached out to the regulator, swiss regulator, who would be overseeing the issue. Was it smart to get out early or are should they have waited a bit. Julia, thank you. Megan, even so with facebook under fire, stock unfractionally it is exciting i think from what they are announcing in terms of the cryptocurrency. And a lot of the skepticism i think comes from the combination that it is facebook and we know that they haved a privacy challenges before and also the skepticism about bitcoin and often when we talk about libra, we are hearing it in the same send send as bitcoin, but it is actually very different, at least their plan. And we heard that from david marcus they are trying to not treat did as an investment that is one of the functions of money is a store of value and i think bitcoin has a very volatile store of value and that is why people use it for that investment potential libra is a transactional type of thing. And i happen to think what facebook is doing is very smart in getting out ahead of all of this they basically just outlined a plan, a white paper if you will, and they are looking for the rec late tors to take the lead on this and give them guidance so they can move forward. Facebook up 0. 2 and there are trade headlines from comments from President Trump which weighed on sentiment. And Kayla Tausche has that they are familiar in what they said. The president saying chinas economy is weak, that there may or may not be a deal, if there is not, no problem, no tariffs and china may end until buying some Agricultural Products they are supposed to be buying farm products, lets see whether or not they do o ag, great farmers. But out of the tariffs, i took 16 billion to make up for the shortfall. The white house has authorized 28 billion to offset the retaliation on the farm community. The New York Times obtained data showing 21 billion in proceeds for the u. S. From tariffs so far but those are largely paid by u. S. Importers earnings season kicking into high gear as three more big banks report results and wilfred has the big takeaways from wells fargo, Goldman Sachsjpmorgan. So key theme is weaker net income than expected jpmorgan had to cut full year net year income guidance by 0 500 million stocks down biless th lesby les. Wells fargo net income guidance also disappointed. Million. Stocks down by less than 1 . Wells fargo net income guidance also disappointed. May not fall next year having previously guided to 50 to 51 billion. Goldman sachs trading higher because it is more tilted to fee income than Net Interest Income. That is spread across multiple divisions. And they are investing and lending business bottom line exposure to u. S. Rates is weighing on guidance this quarter but exposure to markets has been less bad than feared and looking at the two day chart, Goldman Sachs is the best performer. Wells fargo the worst. Theme therefore bodes better for Morgan Stanley for thursday than it does for bank of america tomorrow megan, what is your takeaway i think that there are three main drivers for the banks one is the fed and we know that that is going to be a head wind on Net Interest Income. But also the shape of the yield curve. Weve seen that steepen over the past few days. So that is a little bit encouragi encouraging. For us the most important thing we see is credit quality and that has been good and reassuring we know fed policy occurs with a lag. So the fact we are not seeing that weigh on the credit quality so far is a good thing were still neutral financials within that, we prefer the larger banks over your regionals. Because you do get are more of the diversified revenue stream although in this kraur if may be a headwind, but longer term we think that that is the safer place to be. But a lot of the we think that they are fully valued so maybe less down side risk from valuation and things like that but admittedly few up side catalysts at this point. Sticking with the theechl of earning, Johnson Johnson also out with results meg ter ril has the irrell has. And they raised full years sales forecast, but investors dont appear to care their ceo told us that the company will continue to defend itself but the legal uncertainty means some investors dont see j and j as the defensive stock it had been back to you. And switching gears to tesla, the company said that it was cutting the starting price on its mass market car the model 3. Phil lebeau has more in chicago. Cutting the price but raising the price actually on two other models the s and x. They are doing away with the Standard Range model so result the lowest price you will now be able to get the two vehicles jumped up by a couple thousands. With regard to the model 3, that is dropping down under 39,000 a decline of 510. Still not the 35,000 which is what elon musks goal is, but now down under 39,000 as a base price. And as you take a look at shares, this is a company that reports financials next week, and you can bet that there will be a lot of questions especially about elon musk saying today starting on august 16 the price of the full selfdriving option goes up by 1,000. Back to you. Well see you later in the show for United Airlines after the break well take a deep dive in to wells far go results with their ceo and were a waiting two big earnings reports, csx and United Airlines well preview the most porntsd thi important things to watch. And as we head to break, a check on our closing bell data tracker. Retail sales up 0. 4 and july nahb home builder confidence forecast also beating estimates. We have 45 minutes left of trade. Any close higher would be a record right now a mixed picture. Mike santelli has the market dashboard. And here is what we have coming up. First value capitulation and then sluggish transportation trader adulation and most favored nation i know that ultimate be able to come up with the theme here. I got a rhyming dictionary your asian creation there you go. So well get to value versus growth, freight volume, Trader Sentiment, refuggional stock market but first something from the survey this is the net percentage of respond geentss saying value stocks, so essentially after a very long period of most managers saying that it is time for value to start working better than growth, growth has outperformed too much, it seem like they have kind of given up. Of course it cango below zero. But right now it seems that is a bit of a give up trade this is a russell 1,000 value index. And it has been on a steady k decline. Value was compelling and only 1 of fund americmanags seeing an up side to global inflation. Inflation would benefit cheaper stocks so whether there is a key inflection point, i dont know but definitely getting toward some kind of an extreme. Mike, thank you megan, any surprise to see a chart like that given the fact you do have all this easy money kicking around in the world right now . We get a lot of questions from our clients about value versus growth and is there any point in being in value at this point. And it is for good reason. Some of the biggest leaders in the market are growth type tech related stocks i would say our expectation is for usgdp growth in the 1. 5 to 2 range which is slow growth. And in that tine of viype of ent you will see demand for those stocks that produce their own growth which support the trend weve seen i dont think that we will see a sharp reversal in value versus growth, but we say maintain some exposure to value. But it will probably be more even from here we did see the yield curve steepen. That is helpful for value. I think that inflation doesnt necessarily have strong upward risk, but it has been stable we dont necessarily get that because of what were hearing from the fed but going forward, i think that it is still a growth market. But you dont want to be totally out of value and lets move on and talk about wells fargo. Lower today despite beating earnings estimates bank citing a low Interest Rate environment. Stock down 3 . Joining us for more is the wells fargo cfo. John, thanks very much for joining us good afternoon. Thanks for having me lets kick off with the key factor of all the banks earnings and Interest Rate environment and the relatively soft Net Interest Income guidance what are you using as your base case for rate cuts in the year ahead and to what extent is there room to offset lower rates with lower deposit rates given that they werent hiked that much during the rate hike cycle . That is a good point. As it relates to Interest Rate forecasting and what it means for Net Interest Income, we have we run scenarios with these days between one and three moves by the fed and whether it is a 50 basis point and 25 or three 25s. Some version of that fits in to our current guidance halfway through the year that feels about right. Bigger picture though is the deposits and what we pay for them and what were earning on the asset side as well in the Second Quarter, setting ourselves up for the rest of the year, we had a 6. 2 billion worth of net income, we generated more assets, more loans and more deposits than we had a year prior a lot of business fundamentals are feeling really strong, so another part of this story is if these rate cuts do actually extend the recovery that were in, one of the benefits for banks and for Bank Earnings as a result of having softer credit, having a stronger consumer, having a Consumer Spending for a longer period of time and keeping borrowing costs low which encourages people to spend and invest at the margin, all of those things factor in you asked when deposit rates and youre right, they have not moved up they have not fully reflected where you might have expected them to go after a few years of fed rate increases means that there is less room for them to go down on the other side. And that is what is leading to this expectation of margin compression and i think all of the banks are signals thing that there will be some element of that and the other reason i think share price is down today was from the Earnings Calling the fact that you guys lowered the amount of cost savings that you might be able to deliver in the next 18 months what is happening there, the government making you spend a fortune on compliance . No, two things. We have efficiency 3r578s thafen place. And whether taking advantage of our scale or the change in business that is leading to more selfserve and automation and other things that make us more efficient, that on the one hand, but there is a need to build both in our risk function as well as in all of our businesses more complete and robust risk and control capabilities all of which are have a component of technology that supports them and those have been expensive and as we have gotten further into it, as we have added more leadership, they have continued to be more expensive so we are operating in the low 50 , we should be in the high 50 in the mid to high and it will take us a bit longer to get there but what were spending money on is making us a Better Company and better controlled and gives us a path to being as efficient as we can beyond the other side. But youre right, that was disappointing to our investors on the call your interim ceo addressed the point that he is still the interim ceo. Lets take a quick listen. When the board asked me to take on the interim role, i assured them that i would do the best i could for as long as they need z ed me and that is what im focused on, trying to move the Company Forward to the best of my ability but from the beginning they said that she wou they would be seeking someone from the outside there has been a number of reports that the job has been offered to people on the outside. Do you have any idea why they havent taken the role im sort of taking it from our board chair in particular who is making the point that the committee is working hard, this time frame that were under frankly from my perspective having recruited senior people, not ceos, but into our organization, it takes a bit of time and they will get the right person and i think allen is doing a great job in the interim, he is doing the exact job that they asked him to do. And it has been clear from the beginning that they are looking for somebody from the outside. And they describe bed the reasons at the time. So i think that it is a great job, certainly a Great Company and a big opportunity for somebody i want to the comments about investing in technology. What is the wells fargo vision for Consumer Banking in the future especially as we talk about digital tokens, as we pay more and more attention to startups that are Venture Capital backs taking out banking charters what does the sector look like and what would somebody like me as a consumer, what would that experience be in the coming years . Sure. So whether legacy banks like ours or many of the people in the ecosystem of finteches competing with banks for Customer Business and changes the experience, it is all about convenience for the customer it is about access to your information, access to your assets doing things in one place. Sometimes it is a la carte but you probably want it all on your phone i think increasingly the demands for personalization so that it is clear what your bank knows about you is brought to bear in how they respond to issues that you have, how they describe and promote value for you, that you never have to tell them something that they should already know and that they can anticipate where you are in your earning, in your spending, your saving for retirement, et cetera all of that is it part of the ganging experience and those are the areas that were focused on. As it relates to the fintech charters, i will be interested to see how some of these companies who brate in a lightly regul operate in a lightry regulated environment manage through privacy as it becomes bigger issues on top of the consumer experience, on top of law enforcement, on top of many laundering, all sorts of things that come to bear as part of being a Financial Services provider and all of that has to work in a seamless experience for the customer john shrewsbury, thanks for joining us of it area the break, Morgan Stanley says there is a potential 100 billion opportunity for amazon and it has nothing to do with prime day. For now at least well explain next and later carnival ceo arno arnold done na Arnold Donald will join us to discuss the restrictions on his bottom line. We run right into these crises, and we do not leave until normalcy is restored. Wed been working for days on a site in a storm devastated area. A family pulled up. It was a mom and her kids. Everything they had had been washed away. The only thing that brought any kind of solace was the ability to hand her a device so she could call her family and let them know that she was okay. vo there for you when it matters most. Join us and get up to 650 when you switch. Thats verizon. Welcome back time for word on the street. Goldman sachs with a sell rating on Fiat Chrysler the firm citing limit the opportunity in north america and struggles in the European Market over 90 comes from north america. Morgan stanley saying amazon kuiper represents a 100 billion opportunity. They aim to have over 3,000 satellites in orbit to provide acce access Morgan Stanley estimating the space economy will grow more than a trillion dollars within the next 20 years. No details on when we could see the constellation built and launched though. And while tech ipo activity and the frothy market is far from bubble levels, investors should be more cautious and selective lly tactical exposure going forward. I have questions about both of those. But lets tart with your assessment of the ipo activity that weve seen so far and whether even floating the word bubble makes sense we dont think that it is an ipo bubble i mean, i think that you have seen some really exciting Innovative Companies and weve talked before about when companies are coming to market and i think that has a lot to codo with especially the price activity that weve seen i know if you look at number of ipos, it does rival what we saw in 2006 which gives concern to maybe is this the end of the cycle, but i dont think that it is terribly surprising that at the end of the bull run Companies Want to get in on the action and become public and a question on the space note and Morgan Stanley note is more on space than amazon specifically it has more to come with blue origin but one of their points is there is a tiny point with amazon in which you can get exposure to space. So will investors flock toward the space play when pure plays become listed . Be a small part of the business at least for now, but amazon already has things like aws ground stations which is basically connecting satellites and data that they are able to collect in space to the cloud. So it is already something that is starting to fold itself in there. Well see. Injury injury gain virgin gal be the First Company and so well have to see how it plays out. A cool notealyzing the different type of rockets. Within the automat space, it depends which companies that you are looking at it but in general we think that this is auto manufacturing, auto production data more generally come out better in the Industrial Production data. So i think that if we can get if this is a mini cycle, autos can do okay. 37 minutes left to go here. There are three things driving the action were on record close watch for the major averages any close higher for the dow, nasdsdaq and nancy pelosi woul e be s p would be another record were a waiting two big transport earnings time for a cnbc news update. The president s Reelection Campaign is swept ointent on recruiting women President Trumps daughterinlaw launching women for trump this morning outside philadelphia yall will have to help me out. Im a little confused. I didnt think women supported donald trump do where he feel differently in this room about that narrative [ crowd reacts ] monsoon flooding has killed at least 78 in nepal, 32 more are missing. 40,000 soldiers and Police Officers rushed food, tents, and medicine to thousands displaced. More concerns over the health of angela merkel. For a second time she stayed seated through the National Anthem at a military honors ceremony she has advisably trembled and suffered shaking recently and she insists she is fine. She turned 65 tomorrow back to you. We wish her a very happy birthday and good health as well. Thank you. Still to come, we have your last chance trade megan is watching one part of the health r ow wl ustry positionedel fogrth lets send it eefr to Mike Santelli for miss second dashboard. And looking at sluggish transportation with the fresh numbers. Kass freig cass freight index has plunged down to pretty negative year over year declines close to 6 that the last reading. A couple things to note. One is look at what was happening a year ago we were going up double digits on a year over year basis. So obviously were going up against tough coms not terrible in terms of the longer term trend. But maybe the fmarket has any od it out jp hunt actually had solid numbers, stock was beaten down on the trucking side of things so yous here maybe this and this with the transportation stocks kind of pricing in some of that weakness were seeing in overall shipping volumes, trade is a big part of the story and right now still below the high, but starting to firmg up so i think the jury is out as to whether you want to extrapolate some of the weakness. Up so i think the jury is out as to whether you want to extrapolate some of the weakness the line that jumped out, warning of a potential slowdown to signaling an economic contraction. Exactly and i think that is why it got a lot of attention basically saying if historical patterns are correct, this is really showing a lot of pressure on domestic activity here we have 41 minutes before the bell here is where we stand a mixed picture. Pretty tight trading range the do dow up almost 12 s p down 7, nasdaq also down about a third of a percent small caps and transports are outperforming. Up next, belt way versus big tech your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. Healthier brain. Better life. In big ways and in small, bank of america is here to help you get things done. What would you like the power to do . ® done welcome back executives from facebook, apple, goi google and amazon are currently testifying as the tech giants face probes. Lets bring in dan ives and also david gregory. Good morning to you both damag dan, ill start but. Real risk or politics . I think it is more noise at least in the near term but the drum roll is getting louder for big tech and i think it speaks to some of the antitrust worries. If i you viewed most at risk, probably amazon, baba, facebook. Least would be apple why amazon . Because two distinct businesses and i think that is really where i think investors went from background noise a little more of a focus to see what comes out of hearings. And what is your take, david, so which is most at risk i think the companies most at risk, facebook clearly in the crosshairs of regulatoregulator obviously if you look at amazon and their ability to control the access of thousands of businesses to their customers across the aws platform, i would see amazon as being more at risk perhaps than facebook. Facebook already has enough issues of their own to begin with and as we look at government interest in the tech sector, and these companies specifically, we also have to look over towards europe and see what france is proposed around the Digital Services tax so from that standpoint, looking at government oversight and regulation of tech, it is not just the u. S. , but progrperhapse global and do you feel like it is priced into the stocks this Political Risk i think that the worst Case Scenario is probably not priced into these stocks. I agree this is probably a lot of political began stgrand stang you might see more regulation, but i think the worst case is probably not going to pan out. When we talk about the big faang names, what is your favorite i think it continues to be apple followed by amazon you look at how they are positioned going into earnings the next 6 to 9 months apple is a glass half empty view many yelling fire in a crowded theater. And you look at breakups a lot of faang name, if you broke them up, valuations would be 30 to 50 higher all right have to leave it there thank yyou. Up next, your last chance trade. Stay tuned you should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Wiswitch wireless carriersn bring in your own phone, and save hundreds of dollars. Its pretty much the easiest way to save since sliced bread. Sure is. Because savings is as savings does. And sometimes youve just got to stop and smell the savings. Im sorry, i think you mean roses. Oh right. You need to stop and smell the roses of savings. Bring in your own phone, switch to Xfinity Mobile and save hundreds of dollars a year. Now thats simple, easy, awesome. Get 100 back when you bring in an eligible phone. Click, call, or visit a store today. Lets get a check on individual Market Movers burberry having its ambassador day pointing to strong do demand for its monogram and stock rallied for the updeet months ahead. Those designs are doing well to burberry. And 11 minutes left of trade your last chance trade is Health Care Equipment so were new tral on the health care sector. But if you will look for spots to ride out political headwinds, as well as slower growth, we think that there is a lot of innovation happening in Health Care Equipment, medical devices and spaces like that value and i g valueations are a little crowded, but there will be a lot noise into the 2020 election there will be higher volatility there. But there will be a lot n into the 2020 election there will be higher volatility there. All right were just minutes away from the earnings frank, lets start with you. Csx profits expected to increase more than 9 as it leads the trend of railroading making operating rak i dont a really key number. Setting an alltime record and the company gets 61 of its automotive and food products. Right now the stock is up over 1 and now a review of united. Well get the numbers in 20 minutes. We expect Strong Revenue 34r5ur7ly because the domestic demand as been so strong here in the United States. And also when you look at what is going on with global demand, that is the other thing people will be focused on and finally the question of what kind of an impact from the 737 max. They havent had it since march. But when you look at you night the versus the rest of the airline stocks, trying to catch up there and that has been progress that they have made and tomorrow morning well be talking with the ceo of united before they have their analyst call tomorrow morning. Numbers in about 15, 20 minutes. Phil, thank you very much the dow setting a fresh intra day high well off that level at the moment though still 3 points higher which would be enough for a record close once again. After the break well cover all angles of the market you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Five minutes left. Time for the closing countdown lets trade. Sean, what are you watching into the close right now . So ill be looking at csx irn i earnings and also watch from union pacific. I think that it will be a matter of outlook we actually had a reaffirm guidance from management after the last quarterly earnings. But traffic down about 2. 9 . So they were originally guiding for low single digit increases so if they dont get delivery in the front or they dont expect that to recover, i think that they will have to lower guide answer pricing in about 2. 60 move in either direction, so interesting to see if they lower guidance. Does the fact that lot of freight data that weve been getting as really rolled over and gotten much waeeaker, does that bother you . That is why i think that they have to lower guidance right on the down side, 76 looks like it is a pretty key price level. So ill be interested to see if they do have to come out lower guidance if the stock is and i believe ontohold the 76. So i think guidance is key one thing investors might be willing to give a pass on is if they can deliver on the brief six schedule railroading metric that lot of investors are tracking for csx, sub 60, they wanted to be there for 2019. So any improvement on that metric might be able to offset any softness outlook from them thank for his joining us. Now the third installment of the market dashboard Trader Sentiment are you bullish on a particular item it reached 90 bulls just yesterday. So what you are seeing is pretty similar to what we have back in april. Didnt mean that the rally was over you can see sentiment can stay elevated for a while if you have a strongly trending market, but you did get above 90 in september of last year and also in april when you did get about a 6 pullback eventually in may in the stock market. So no real Science Behind this sgepts expect to say overall market may be in for a pause if not a pull back oilg. Longer term Retail Sentiment is a good deal more cautious. So just one input. Oilg longer term Retail Sentiment is a good deal more cautious. So just one input. Longer term Retail Sentiment is a good deal more cautious. So just one input. Lets hear what Rick Santelli has to say it was all about getting the mojo back with retail sales. Look at intra day of ten, it popped and now hovering to the best levels since the uchlts turn from a yeefld 195 but [today was up about the dollar index it would be an one week high. Lets send it over to bertha and the russell 2000 has been moving less than 1 in some cases less than half a percent for about ten sessions straight. It is stuck at the correction level. A little bit of profit taking when it comes to solve the weftd tech in term of the leadership, those earnings winners like jb hunt and good news from united after the close. Over to bob and we are getting profit warnings Semiconductor Stocks are trading down they talked about deteriorating economic conditions. Weve heard this a lot and yet the semi conduct toor o 5 and Bank Earnings, jpmorgan, wells fargo, goldman all earnings beats, but not big moves in the overall bank indei. New highs today about the same as yesterday american express, cocacola, mcdonalds and proctor and gamble there is the closing bell. The s p 500 down 10 points, that will break a five day win streak thanks for joining us. Welcome to the closing bell. Were taking a look at where we finished the day on wall street stocks settle here dow down 24 points just plea tbelow the flat line. S p also lower 3303. Nasdaq do you knowwn 0. 4 . And we didnt see a little ralgralg ralgly in toto the close, but o the session lows industrials and materials are at the top, energy and technology at the bottom. Dollar move up half a percent particularly against the british pound. And joining us to talk about the market day, Barbara Duran and david ellison. Mike, yesterday alltime closing highs. Yeah, market kind of idling near the highs i think the Dollar Strength was a bit of an undertow and that was from the beginning and then also just bits of something if you were looking to mod wrat yoerate your bullishnet china would take a hard line there. And i think dragon energy. So all that stuff together, down. 3 . Short term Trader Sentiment maybe slightly overheated. What are expectations for earning earnings this week and could we actually see an earnings recession, does it really matter that is the real question, does it matter the market is broadly expecting negative earnings and it didnt seem to matter valuations are rich, but you have two things. The fed likely to ease in july and the fall and you also i think it is interesting when you look at not Many Companies have reported yet, but over 80 have expect tapeses in earnings and over 75 in Sales Volumes that speaks to real demand so i think that as mike said, we could be in for a pause, but then again the market is asktsing very well and so i think that we could be in for a surprise and the market may not reacts to some of the negative earnings reports. So were the positive earnings reports from the huabanks . They are telling us that the consumer is still in good shape. Not so good news is that the yield curve is impacting the spreads and i think the last thing is that the lending growth that we have is probably somewhere around gdp growth or below. So i think that there is a lot of expectation pullback before the earnings which is why the stocks have not sold off that much but the earnings i think are reflecting the fact that our Interest Rate structure is hurting them and i think that there needs to be more talk about that the Industry Needs to really think long term about what they will do if our rates turn into europe or japan. More discussion to come but lets interrupt with csx earnings is out. Frank. Shares down about 3. 83 right now after reporting a miss on ips 3 cents below estimate and miss on revenues the dough said it saw growth in merchandise. But that was offset by declines in the intermodal business soer sha shares down 3. 17 aftee bell back to you. Barbara, unii dont know if saw the index showing another decline month over month and also year over year in general a lot of the freight data seems to be getting weaker and weaker. You look at the csx numbers. Is there a bigger reason to be had on the broader u. S. Economy . I think there are warning signs here i think in csxs case, their problem is that they had two years of a magnificent turnaround where they were really trying to compensate for the loss of half their business. But now investors are saying where is the revenues. I think that there is a slowdown in transportation across the country. We so seen it with fedex and a number of companies. But the consumer is alive and well so hopefully that continues to on that sffset the weakness hard to see that improving as long as we have the trade issues csx had held up pretty well considering. The low for the stock back in late may around 74, a little bit under. So at this point kind of giving back the last several weeks worth of up side so well see how it settles out. But it is very touchy. A lot of cyclical stocks got beaten up a lot. This one i think that you probably had to have better numbers to build on. Want to bring you back to the banks. Goldman sachs, p mojpmorgans m slightly flat. Yet all beaten on top and bottom lines. But that does really show how difficult the setup is this earnings season. And when we thought that expectations had come down certainly thought sgeskt t s expectations were done for the quarter. But it has been a whip saw in terms of thesis on banks shouldnt necessarily be the determining factor of what the companies are worth, but it shows you that cheap stocks are not works just because they are xheep. It has to be kind of cheap with a catalyst, cheap with the transformation and so far not getting traction. Yields have been subotubborn. Dave is what is your top pick i still think jpmorgan and goldman is the best. They can invest in the businesses that they need to be competitive in so i think the issue is really an industry in transition from always lending money to trying to become fee based and i think they have the number and the vision, you just need to stay with it and work through the fact that they will have lending margin issue, maybe credit issue, maybe not but end of the day, i think the industry is in a major transition in only making money on loans to making money a lot of different things. Wells f s fas fargo down 3 p. Is that attractive no. They have so many issues. pshs. Is that attractive no. They have so many issues. Pshs. Is that attractive no. They have so many issues. Is that attractive no. They have so many issues it starts with the fraud and fake accounts and Everything Else that happened and right now there is not a ceo so without a ceo you dont have a plan so they appear to be rudderless. What is tplan so, no, i would not be buying it and i think it is embraced by the street, but 3 in 10 analysts recommending it. I feel like people have kind of given up and it is not yet it is a little bit cheaper than jpmorgan now and normally that is when you want to sniff around, but i think that this is a much longer turnaround barbara, david, thanks for joining us lets turn now to the fed. Chicago fed president Charlie Evans makes new comments to steve liesman. Steve has the headlines. He said that he needs to cut rates back to 50 waives poibasis and wants to make it more economic economical he said that is he worried about potential Global Growth and trade tensions he says the central bank should not be in the bit of providing excess stimulus to improve growth powell and evans talked today, and 100 of rate cut in july, 76 of another rate cut come september and 56 in december. So three rate cuts pretty much built into the fed funds future market at this point well bring in art laffer thanks for joining us. Want to get your reaction on these comments from evans and also how likely it is that we see as many as three cut this is year well, i think steve is right when Charles Evans said that we have a cut 50 basis points, maybe more, you see a lot of softness in the rest of the world 1k3e79 for the u. Except f the u. S. Could well afford to have lower rates i think it is time for it. It is natural that the fed would follow the market and 50 basis points seems about right to me when you see stronger retail sales data for example, does that worry you that we plight not see the rate cut im trying to mind read what the fed has in mind. I think the issue of inflation is really behind us. And we have an Interest Rate problem visavis the rest of the world. And i think that is where we lower those rates. I dont know hugh the fed thinks on these issues, but id be surprised if they dont lower by 50 basis points or maybe more. Dollar is a lot stronger today. Usu euro significant mover to the down side. Do you agree that the European Central bank purposely weakens its currency would you want the situation that the ec bchlb faces . It is highly likely that they did purposely lower the Exchange Rate to encourage exports and reduce imports i dont know what their logic is but the Dollar Strength is not a problem from my standpoint ive never seen a strong any that doesnt have a strong kushls city kournsz ci currency as well so strong sicurrencies have a. Stronger value and we need to keep the prosperity going. And i want your thoughts on this opedstronger value and we keep the prosperity going. And i want your thoughts on this oped go ahead, steve. We just talked to Charlie Evans about that and he basically pointed out that the Research Shows that you cant do much that will cause a currency to move in a prediskprehim t able way maybe the Research Shows four years out. The fed could cut rates and then who knows what the ecb does or china does and i think that you are i want to commend you for saying that the dollar should not be the focus of fed policy here and ill say the u. S. Economy is so die naynamidynamic, you haver strength winners and losers. And it is unclear what is the best yououtcome. Steve, when ragan was president , we cut tax rates and got all the economic growth. The dollar was strong for a long period of time i think it appreciated Something Like 80 over a 6,6, 7 year period and with our policies, id expect to see the Dollar Strengthening because were so much better than they are in economic policies and our performance shows it gentlemen, thank you for the discussion still ahead, United Airlines out with earnings any moment well break down the numbers and see whether the 737 max controversy weighs on those results. And well speak with the Arnold Donaldonald, carnival mvp a beat on the top of the bottom line and raise of guard answer from united earnings coming in at 421 a share. Well above 409 a share we should point out for the Second Quarter in a row united will not break out the exact impact of not flying the 737 max. That is the Second Quarter in a row that has happened. Its full year guide answer, they are raising earnings expectations for 2019, bottom end was it used to be 10 to 12, now in the change r range of 10. 50ed 10. 50 to 12. Capacity growth up 3 to 4 . Ran2 Capacity Growth up 3 to 4 . They will be buying back 3 billion in stocks. Dont miss our interview tomorrow morning with oscar munoz, we will talk to him about raising guidance and once again the questions continue to swirl about not being able to fly the 737 max and they are not outlining how much this is impacting the bottom line. Well talk to him tomorrow on squawk box. And if anyone can get the answer out of him tomorrow, it will be you. Well tune in. Mike boyd is joining us. What is your take on the Airline Industry at the moment dell that delta as performed well and united popping out this is the First Time Since ive been in the business that we have a totally solid Airline Industry united is at the top of its game maybe they can go higher, i dont know but they have their capacity settled down and this is an airline that is in all respects representing america very well around the worlgd and it is representing walling street very well as well mike, how would you i guess how would you measure the kirm against coupler against the supply arlts are controlling their capacity so for the consumer, yeah, we can talk about fares being level of level or going down, that is not important. What is important the consumerer wants to travel and carriers can carry them we dont have any squirrels in the industry so i think that well see in the future more of what we happened today. And united rapid catchup move, it has gone almost vertical in tease lathese last s viewed with capital discipline and all the rest of it, but also just as a consume are play anything that the consumer is opposed to trade of gods is touchingis trade of goods is working. They have debt out there so long term looking ahead to how the cycle will evolve . But it shows that you they feel pretty confident mike, thanks for joining us the new terminal at laguardia is nifty too is it havent been there it needed improvement. And lets dive into the market moves bob pisani and better sha Bertha Coombs and there are concerns. Cs k36789 c schl csx cut their guidance and stock trades down 5. 5 watch taiwan and honeywell, both exposed to the global economy. Numbers were below expectations. Honeywell concerns about Global Supply chains your all and uptown to Bertha Coombs for a look up there. Weakness in chips and Software Names faang names were fair any floot. An interesting mix considering that you had both facebook and google getting grilled on the Hill Investors didnt seem to notice that apple took a tech lower when the president talked about chinese tariffs. But we still had a number of stocks at all time highs and a number of different types of sectors. Roku alltime high casella waste also back to you. Still to come, the most valuable gold coin right in front of this building well head outside for a look at this gold coin and u. S. Stocks taking a bigger slice of the pie. What that means for investors. 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. Lets send it over santoli. And we want to get the most favored nation consider the United States the most favored nation. Look at this percentage of world market capitalization accounted for by the United States equity market up to 56 . This an alltime high. Steady climb throughout the last, what, eight or nine years. An old story, we know that investment dollars have come here United States has better growth in the developed markets higher financial quality all the rest of it bit but you have to ask how long can it persist trades at a tremendous premium a lot of effects for this. Other world are markets have less technology. Less kind of stable growth weve heard it all and it didnt tell the actual story because for example chinas gdp percentage is much higher than it is weighting and that is a msci decision. Nonetheless, if you snapshot from 2011 to now, what it correctly points out is the outperformance of the equity markets because the weightings havent changed. It is not really the index that has changed it is really just the fact that the u. S. Has yououtperformed so the shape of the chart tells the story. And also interesting one bull case some people say for the very long term of the emerging markets is just look at the size of their weighting in msci world and in due course that will go up so play the indices based on that mike, thank you. Time for an update with contessa a federal judge has ordered r. Kelly held without bail pr prosecutors said they would be a richblg i risk if released new york raised its smoking age from 18 to 21 to discourage teen use it will take effect in 120 days. It applies to traditional cigarettes and as well as ecigarettes and vaporizes. No charges to be filed against the officer good tin thh of eric garner mr. Garners death was a tragedy. For anyone to die under these circumstances is a tremendous loss but the facts are separate and distinct from mr. Whether a fedem has been committed the Garner Family is demanding the officer be fired back to you. Lets check on some earnings movers csx shares are lower after missing on the top and bottom lines. The company says it sees full year revenue down 1 to 2 versus estimates of 1 p. 8 increase stilt t still to come, new travel restrictions are being put into effect and well talk about hugh it is impacting the bottom line. And netflix reports earnings tomorrow well give you a preview wt veo tch. Ha welcome back cruise stocks continue to feel the pressure after travel was banned to Cuba Carnival down almost 30 after slashing its full year earnings forecast partly due to the cuba travel ban joining us now is the carnival ceo Arnold Donald. Thanks for joining us. Good afternoon to you to what extent is the underperformance based the would you cuba event clearly were disappointed with not being able to go to cuba it costs us 4 to 6 share in our guid guidance but the abruptness of the implementation because you had hundreds of thousands of americans who were disappointed because they were planning on visiting the island, and so we had to rebook all those people and come up with alternative itineraries. The implementation of this ban do you expect to stretch on . How easily would it be reversed if there is another administration well, even this administration, if they dealt with whatever the circumstances were that led them to that decision, if things changed. And whenever this administration or a future administration chooses to allow travel back to cuba with the cubans approval, well be ready, willing and able to go. And there are a lot of americans who want to visit the island is Tropical Storm barry likely to affect you also . So yeah, we had one ship that was delayed and it delayed departure for the next itinerary. But every year there are cyclone, typhoon, hurricanes that can affect to some degree but were very adept at making sure our guests have a great vacation, making certain that they get home in due time and keep them safe and mainly that they have a great cruise experience these mysterious deaths weve seen in the Dominican Republic, has it had an impact actually we have not been able to measure any impact from the concerns that some people have in the Dominican Republic it is a wonderful place to go. Our ships are where we house our guests of course and the excursions continue to be very popular. So, no, we have not seen a major impact or any impact really on the desire of those cruising the Dominican Republic to go there and we were talking about united and some airlines, it seems like busy on that front and filtering in to your guidance what it says about both consumer appetite for cruises and general condition of Household Spending as we said inquarterly earning, we did feed the bears a bit because we did lower guidance around cuba we had to take a ship out of service for some repairs that was unscheduled. And we had some softness in the european sector that compounded everything so normally we plan for things not to go perfectly. But it did cause us to lower guidance so we fed the bears a bit who are very much convinced that this is a cyclical business and waiting for the downturn but overall, as we said on the call, we are looking forward to delivering double digit irnin g bangladesh Earnings Growth and double digit kapts and well positioned to deliver. All right arnold, thanks for joining us. D positioned to deliver. All right arnold, thanks for joining us. Big tech is on capitol hill and up next the latest on the house antitrust hearing. And this is the worlds lar largest and most valuable gold whits ghsiin y iout de the Stock Exchange 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. Y united slightly is higher. Phil lebeau is digging into it and nothing like seeing one little notation but an important one from united. The company has entered into an agreement to buy 19 boeing 737700 used airplanes now, the company has not disclosed who they are buying them from or the price but this is significant because they expect dleliveries to begin sometime in the december time range. Remember, they dont have the max at least until november 3rd. And there is many who believe that you wont have it maybe until the end of the year if not early next year. And then when deliveries start up, they may not come right away so this is a sign that united wants to make sure that it does have the seats in place beginning next year to meet its Capacity Growth plans. Phil, could they cancel the 737 max orders if they want even if boeing comes through and gets all the certifications and approvals . They could, but takes very difficult process. Not just for united, but for all airlines once you have signed an agreement, it is really tough to change it. And believe me, they will tract concessions out of boeing as they move through this process all airlines are doing that, not just united. So this is a clear sign that united has decided that we have plans to grow capacity and were not going to wait around and hope that the max is back. They are hoping and they believe that it will be back by the end of the year, but they have to make plans yeah. Phil lebeau, thank you tech executives are on capitol hill for a hearing on continue and i trust hears. Reporter and this is part of a antitrust hearing and trying to make the argument that even though they are dominant in their space, they are not keeping other players out. They face intense competition on all of their products here at home and around the world. But one congressman of colorado dramatically pointed out that facebook own four of the Largest Global social media platforms. You can understand skepticism because when a company owns four of the largest six entities measured by active users in the world, in that industry, we have a word for it that and that is monopoly or at least monday on p monopoly pourwered. Lawmakers say that there is no alternative so that forces consume toers agree to terms of service that they might not have otherwise. Well keep monitoring. Thank you very much for that. Feel like a lot of pressure. Well see if it material ligz into action. Another earnings alert and there is strong guidance for fiscal 2020 thanks to the uniform rental business. Shares up over 6 trading at all time highs over 40 for the greer back to you. And up next, this is the Worlds Largest most valuable gold coin. And it is outside the Stock Exchange well tell you how much it is worth and interview the ceo of the etf that it elements to. And coming up on fast money, one media mogul will reveal what you should be watching vo the ant mindlessly marches on. Carrying up to 50 times its body weight. It never questions the tasks at hand. But this year, theres a more thrilling path to follow. father kids. Change of plans vo defy the laws of human nature. At the summer of audi sales event get exceptional offers now lets take a look at how we finished the day on wall street 37 s p finished at 3004. But the russell 2000 was about flat finished slightly in the green lets go outside the Stock Exchange and on this balmy summer tuesday here on broad street, the closing bell to celebrate its physical gold etf as part of the celebration, it brought along the Worlds Largest gold coin displayed in front of the nyse weighs about 2200 pundounds. Lets talk about this coin and why you decided to bring it. Where is it kept normally we brought it all the way from australia almost 12 thousand miles it weighs one ton. So 1,000 kilos about 2200 pounds. Made of some of the purest gold on the planet today. And it is worth as you said about 44 million. So you guess you never need any security to protect it well, it would be quite difficult to do that when we made it, we got six of our strongest guys to try to lift it and they couldnt. But of course a lot of security surroundsing it that you wouldnt see so 45 million for just this coin what is the aum of the overall etf at the mooment about 132 million. And the gold price as done well since early june, but employer to that, 18 months or so, it really lagged for quite some time. It did range between 1150 and 1350 and then it had a breakout i think the breakout was caused by a number of geopolitical factors. The trade war obviously between the United States and china. And some of the tension between tehran and washington. Plus also falling yields bond yields. And the spectra for the Interest Rate cuts. If you go about six or eight months, nobody was really cutting about interest cuts and now everybody is talking about it and now maybe one or two possibly this year a number of gold etfs in the market how is your different . Our fund has a different of you unique selling points. Fir firstly as in our network of vaults away from london and new york which is where most of the others itself that backs the etf is guaranteed by the State Government of western australia, which has the highest shortterm a1 plus rating that anybody could get. Thirdly, Foreign Investors who at some point would like to take physical gold in exchange for their shares, they can actually do that. It is a simple process and they can exchange their shares for physical gold, which we will deliver to them anywhere in the world. Do you guys see crypto as an alternative to gold . Is it a rival for investors attention . The problem with cryptos is theres not a lot actually backing most cryptos it is an arithmetic formula if you bought bitcoin and there was a run on bitcoin, the liquidity of it would be some make it very, very difficult for you to actually get your money back out of it i think thats a differentiator. Gold etf has a physical commodity that underlines it. On the topic of physical, richard, i want to come back to this specific coin behind us is there a market for Something Like that . It is the biggest in the world, as you said. It has her majesty on one side, a kangaroo on the other. Could you sell it outright to a very wealthy individual for more than the 44 million you say it is worth because it is so unique yes, i think it would attract quite a significant premium if it were to be sold on the market it is not we didnt make it to sell it we made it really as for two reasons. Firstly, to demonstrate the prowess of the craftsmanship we have in perth and also the great Marketing Tool you know, to bring Something Like this to the greatest city in the world, you know, the big coin to the big apple if you will, you know, it really is something that nobody else has the ability to do at the moment. I was going to say it is amazing how much it weighs i mean you see all of these gold heist movies and they make it look so easy. Well, they do. And then 2,200 pounds. But, morgan, we could roll it away. We could roll it. All right. I will slip off my high heels. Rich, as your point of a Marketing Tool, we have fallen for it today thanks for the interview. Thank you very much for the opportunity. Coming up next on closing bell, your wall street look ahead. Dont go anywhere. Who us 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. Expedia. Creating the perfect night. Just takes a little creativity. The light beer youve been waiting for has arrived. Lower carbs. Lower calories. Higher expectations. Corona premier. Here i go again on my own goin down the only road ive ever known like a drifter i was born to walk alone youre a drifter . I thought you were kevins dad. Little bit of both. If you ride, you get it. Geico motorcycle. 15 minutes could save you 15 or more. Welcome back lets have a look at how we finished the day on wall street. Slightly lower, so no record closes obviously the dow down 0. 1 , s p and nasdaq down a little more, 0. 3 and 0. 4 respectively. We had a little bit of a telloff into the close. Industrial was the best performing sector. The dollar was a lot higher by about half a per sers today. It is time for our wall street look ahead we have big earnings coming your way tomorrow julia is looking at netflix. Josh at ibm. Julia, lets start with you. Well, will, the big number to watch in netflixs earning report tomorrow is 5 million thats the number of new subscribers the company is expected to add, of course the vast majority overseas netflix revenues is expected to grow by 26 while earnings per share is expected to decline by nearly 34 over a years quarter. Speaking of content, ceo reed hayesin hastings will be asked to give us a sense of where netflix is going, whether it will continue to ramp up the content investment, whether it will pay off, how much it will suffer from losing key license shows to some of its rivals planning to launch new services in the next year back to you. Mike, whats the key thing that investors look for in this . Subscriber growth sale and guidance, which the stock trades off. Theres an actually unusual level of suspense for how the stock has traded for six months it has been side ways still below the old highs, so i think all of that stuff will matter a lot typically it is a big mover after number. S julia, will we get explicit comments on the likes of friends and the office . Reed hastings never shies from controversy i think we will hear from him on friends and the office, if only because they tweeted about it and said they were sorry to see the shows go i believe they will be assuring to investors and stressing the amount of viewership with the originals. I think theres debate in the industry whether those shows are very valuable to bring viewers in whether people stick around and spend a lot of time watching that library of shows such as friends and the office, which are some of the most popular content on netflix right now. Stranger things is bringing me in. I was going to say as sensitive as the company has been about how much people watch the third party shows, in a way losing them validates netflixs strategy all along, spending billions on their own stuff. They still had the day coming potentially. Yes julia, thank you josh has a preview of ibm. Josh. Morgan, heading into this print, ibm stock is up more than 25 so far this year i checked in with evercore one said they Gross Margins where they see improvement year owe year and, two, the Global Technologies services business, their consulting business, that stabilized circle this date august 2nd, thats when ibm provides updated guidance reflecting red hats contribution back to you. Thanks for that shares of dominos under pressure sales became in below forecast ceo sat down with mad moneys jim cramer to discuss the quarter. It is a tougher operating environment than it has been in years past we do have new competition in the marketplace we are fighting against everyday and there are labor pressures in the marketplace. You know, certainly the tight employment environment and some of the rising minimum wages across the country are putting some pressure on, but we are really in a position of strength as we enter into this more turbulent period be sure to check out that full exclusive interview tonight 6 00 p. M. Eastern on mad money i was going to mention bank of america coming up tomorrow morning. It is down 1. 5 so far this week as the others started to reporting. In the short term the setup not too tough but it is more exposed and geared towards u. S. Rates that have been the challenge. Exactly it is often a bit of a rethink or in terms of people overshooting the initial reaction to some of the banks and maybe you take it back when you get the final big bank report here. I guess the trading line, really people arent that fixated on in general across the bank. Goldman as well equities rose year over year, so not as bad as people thought they would be. But we are out of time that does it for closing bell. Fast money begins right now. It certainly does. Fast money begins right now, live as always from the Nasdaq Market site overlooking the beautiful cool breeze of times square im Brian Sullivan in for melissa lee. Traders on the desk are pete najarian, karen finerman, brian kelly and pleased to welcome jeff mills from pnc. Thank you for coming in, jeff. Thank you. Here is your setup. The dow squeaking out a record high today, and for all of you bulls out there, there is one chart that could, maybe, signal more gains ahead we will show it to you because were tv plus, netflix on deck. Their result