Transcripts For CNBC Closing Bell 20240714

You, Procter Gamble Ceo David Taylor will be here to weigh in on what was the best quarterly organic Revenue Growth in years. Joining us now for the hour, though, charlie baa brinskoy from aerial investments. Industrials are an interesting standout today given lowered expectations for u. S. china trade hopes. What is that about low expectations. We had some people report and they were better than peoples fears. We had big companies, the big maker of drilling rigs people were worried about that, they beat, and the stock was up almost 15 Zebra Technologies makes scanners, and that business was better than expected, the stock up 15 . Low expectations, you think, which are easy to beat on earnings, but not on the fed you think maybe only able to cut in the shortterm . Yeah, that is the consensus prediction i happen to agree with it, which is one cut, 25 basis points. I dont think theyll pull a baitandswitch. I think they would not want to mislead the market i think that will happen, but it is fully baked in. Charlies with us for the full hour. Lots to discuss with him lets drill in on the big stories were watching josh lipton has a preview of apples earnings sarah has more on under armours big plunge josh, lets start with you so the question here is can apple sustain the momentum the stock is up more than 30 this year. Its up more than 40 since low and early january. After the bell were looking for eps of 2. 10 on revenue. Thats basically flat on the top line investors are going to make a beeline for this Company September guidance remember, apple typically does ship new iphones in late september. Of course the expectations for that new iphone are kind of muted certainly when it comes to units and sales. Many already looking ahead to that 2020 lineup and whether we see 5g enabled iphones at that point. Guys, back to you. Josh, thank you we look forward to those numbers. It will be the big thing in the second hour of the show. Under armour plunging to the head of the back of earnings, sara, what are the key take aways . A rough day for under armour. A turn around is taking longer than wall street hoped for its main market north america showed sales down 3 under armour lowered its outlook from around flat to a slight decline. Despite the fact it did report overall improvement in costs, margin, inventories and International Growth so whats going on here in north america . Market share story for under armour, the apparel, which is its biggest business in the u. S. Shrank from 6. 4 to 5. 6 through june of this year. Thats according to mpd. Nike and aididas are just grabbing share a Company Executive told me today theyre relying less on sales and promotions, and so it takes a while to train the consumer to pay full price, especially seeing that in their direct to consumer business. I did ask executives when that will turn. They say theyre looking for better numbers starting in q4. Comps get easier then, and they are seeing with better shelf space and better relationships with wholesale partners. But wall street is losing parin patience the stock had a nice run of more than 50 into earnings, so taking some of that off the table. Most of the analysts that like this stock and like the improvement say its still on track. Just going to take a little longer to see the topline growth would you buy on this dip . No, this is a name thats traditionally had a pe of over 30 i think it was very close to 30 going into this report, so slightly down is bad for a pe of 30 do you get concerned when you see the disappointment in north american sales about the u. S. Consumer particularly when Consumer Confidence is so strong, and the u. S. Consumer is so strong, and the buyers of these products, which tend to be younger people, frankly, good employment situation, earnings are up, this should be a time when their buyer does well, and its a little discouraging. I would say it doesnt really reflect anything about the consumer athleisure as a category has been super strong, if you look at earnings from nike. If you look at the lululemon numbers that have been put out there. Vans, very, very strong. Under armour is going through a little maturity stage. It is in the middle of the fiveyear transformation clearly its got a lot of work to do. Over the prior 18 months was up 52 , so todays pullback in that context lets send it over to mike santoli for todays market dashboard. Real quick go through what were going to look at, up from the depths this is kind of a maybe imminent turn around story, and then the tide is high that is one very big, very successful stock were going to look at. Back and fill, this is another big stock in the news thats bp tryi been trying to make do without too much wind and full sail, that is about the consumer, which is feeling pretty good up from the depths a lot of ways to slice how this market is behaving in terms of style right now. This chart is from Goldman Sachs and it shows the relative performance of stocks with strong Balance Sheets and weak Balance Sheets so when weak Balance Sheet stocks are outperforming, this line is heading up coming off that low in late 2015 when high yield and risky stocks got really pounded its really been all about strong Balance Sheet stocks and then you see this little bit of a comeback right here the question is with the fed cutting rates maybe giving some confidence that the expansion is going to continue. The credit markets remain okay, will this continue its similar to the growth versus value story this is one of those dynamics you want to watch. Youve had a one way for a while and then maybe a tentative balance, you could look at the banks too relative performance, and the question is is it going to continue in that direction, guys. Just a small tick back up, mike interesting given some of the other discussions of quality versus momentum. Mike santoli, we look forward to the next installment coming up. President trump taking aim at the fed again as it kicks off its twoday policy meeting the fed is expected to cut rates for the First Time Since 2008. Heres what President Trump said when our eamon javers asked whether a Court Appointed basis cut by the fed is enough. And also higher Interest Rates simultaneously, i think was a big mistake. I also think that had they not done it, as good as weve done, weve set a record as you will tell as you will say in the stock market, we have the all time high of the history of the stock market i think i would have been 10,000 points higher, and i think we would have been in the fours with gdp. For more lets bring in chief u. S. Economist at jpmorgan mike, whats your take for tomorrow, 25 basis point cut yeah, i think 25 basis points has been pretty well signaled by the fed. Whats more interesting is what powell says in the press conference afterwards and whether, you know, he confirms the markets expectations that theres a lot more to come or whether he kind of says theyre going to be a little more data dependent. Our expectation is that powell signals that from here on out. Theyre going to be watching the data prac data perhaps a little more than they did in june and july when they were pretty much on autopilot in terms of their rhetoric and in terms of how they were signaling for tomorrow thats our baseline expectation. As i said, the more Interesting Development i believe will probably be the press conference so are you saying that the market may be set up for a disappointment here expecting more rate cuts throughout the year yeah, so were looking for another cut in september, though i must say the data over the past few weeks does, you know, dial down the odds perhaps a little bit that we get or maybe i should say ups the odds a little bit that it could be one and done were sticking with another cut for september, and that would be it if thats the case, i think the market would be a little bit disappointed, not perhaps hugely disappointed you know, the market has already taken back expectations over the past few weeks of strongly expecting 50 basis points tomorrow to now being content with around 25 basis points, and that happened without too much, you know, disruption in terms of risky assets selling off or anything like that i think you could have a further readjustment here of market expectations, provided that happens in the backdrop of data. It looks like it did over the past month, which has, you know, generally been pretty encouraging data in terms of the momentum of the u. S. Economy here. Is inflation going to stay low in the u. S. And allow further cuts i am glad you asked that. You asked me whats the risk that the market is not properly thinking about longer term it is inflation. If you look out three years from now and you then try to look back and you say we had trillion dollars deficits we had record low unemployment, we had countries around the world competing with each other to cut their value of their own currency, i think weve got a lot of things pushing inflation higher. People have been saying that for years. I know they have, but we havent had all those factors the way we have right now. Youre right, it has been a prediction people have said for a while, but weve got it all lined up right now. I guess you could say a strong currency offsets some of that pressure to inflation look at a snapshot, even if we get a rate cut tomorrow, german inflation was disappointing versus strong Consumer Confidence, strong housing data. Youre not going to get a very weak currency off the back of this. Im glad you said that, the definition of inflation is a weak currency. It means the value of your currency is going down absolutely the reason weve had no inflation is because the dollar has been so strong. The market has shrugged off 22 trillion of national debt, but we are adding debt at a rate of over a trillion dollars a year that has not worked well historically who isnt though . Sorry who isnt though . And theres no inflation. Well, we are at a trillion dollars a year, we are bigger than anybody else. There is actually no other country in the world that is adding the kind of debt that we are. There is no point in history that weve added debt at this rate compared to our gdp these are all records uncharted territory. If you go to france and england back in the 18th century, a lot of the problems they suffered was from excess debt that they couldnt fund. So Michael Ferrell lee, maybe you can weave in your inflation forecast into a bigger question i have about what the economy is actually doing i think the reason this cut is so controversial is theres a lot of disagreement on the street about how much weakening were actually seeing as a result of slowing Global Growth and lower inflation and lower capex and that sort of thing so whats actually happening with the outlook well, i think the economy is doing better than expected, at least as of a month or two ago when the trade tensions really started to increase. I think a lot of us expected that that would show up in the data, and you know, we have had continued weakness in manufacturing. The global side of the story still looks, you know, plodding along, but all in all, were not seeing things slow in an abrupt manner, so we do feel like second half, you know, growth will be okay maybe we have it just a little bit shy of 2 , but you know, i would emphasize that the number we saw in terms of the gdp report last friday was Pretty Healthy in terms of underlying domestic demand. And i would say on the inflation side of thing, you know, in two weeks were going to have an upper revision of labor costs. I wouldnt look for an inflation problem in the next few months, maybe not even quarters. If you look out a few years and we continue on this path where we globally continue to run very growth friendly policies, that should put upward pressure on inflation, but i wouldnt look for that right around the corner. Mike, just quickly on this point about international versus u. S. Growth that of course janet yellen commented on over the weekend, where do you stand on that if we do see, say, a full session in the euro zone, would the u. S. Potentially be able to shrug that off not easily. Generally u. S. Its pretty rare that u. S. Recessions are caused by foreign growth however, i do think that would affected the path of Interest Rates, and the fed would have to be quite a bit more accommodative than it would otherwise. And i think the very low, you know, normal skbrInterest Rates were seeing in the u. S. , i think a lot of that has to do with the fact that Global Growth looks to be a lot slower than u. S. Growth, and so i would expect that the u. S. Economy would continue to grow with a european recession, but wed probably do that with a much more accommodative monetary and perhaps fiscal stance. Okay. Mike, thanks so much for joining us mike feroli from jpmorgan. Still ahead, one of the biggest moments from earnings season as apple gives up their results. Well bring you all the headlines as soon as they hit. After the break, well speak exclusively with david taylor on the back of his companys earnings beat. As we head to break, heres a quick check on our data tracker. Personal income, Consumer Spending and poor pce coming in as expected with small gains in june also Consumer Confidence in july topping expectations by nearly 12 points. Do7. Ws down 22 points closing bell will be right back soft music when i see obstacles, i create opportunities. When i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Heres how its gyoure my sidekick. Aint nobodys sidekick. Hey boys. The fate of the world is in your hands and you cant even get along. Pretty disappointed right now. You want a sidekick . Im gonna find you one. See that guy over there . Hes too big. Look at you two. Bickering like a couple of old ladies. Woo the big earnings mover today, Procter Gamble posting a beat on the top line, 7 organic Revenue Growth the stock hitting an alltime high, and joining us now by phone in a cnbc exclusive is chairman and Ceo David Taylor. Good day for cincinnati, thanks for phoning in. Happy to be here. So this was a huge top line beat it was broad in category it was broad in geography. Whats driving the resurgence here in growth at p and g . To me the headline is the strategies are beginning to deliver sustainable balance, growth and Value Creation. While we still have work to do, im very excited to see the strategy of superiority across product, package, go to market capability, communication, and value, both customer and consumer really working funded by productivity and brought to life by 90plus thousand engaged, agile and accountable people thats whats driving it is it a statement about the state of the global consumer, david, or is this p g specific i think theres certainly strength in the global consumer, and thats important and good because it means the categories are constructive and the ability to create value for many stakeholders is there. I think we are leading in innovation in many of our categories, and thats consistent with our strategy, but we want to find ways to grow the category thats good for retailers, certainly good for us, and it improves the Value Creation opportunities and the categories in which we compete so the guidance everyone was looking for, fiscal year 2020, 3 to 4 organic Revenue Growth was certainly cheered by wall street it was better than expected, but it is a bit slower than the kind of numbers you reported today. So just talk us through what goes into your outlook there certainly, the guidance reflects the fact that we will be anniversary four quarters that are 4 , 4 , 5 , and 7 , so the twoyear growth is very strong it also recognizes theres still a lot of uncertainty we expect and frankly respect our competitors and expect them to come back in ways that were going to have to respond to, and were dealing with a micro environment that is still somewhat volatile. What we wanted to do is be prudent about the guidance but very committed to accelerate growth everywhere we see an opportunity to do it in a value creating way have you talked to investors and analysts right now, david, i mean, the exciting story is the innovation thats happening in p g right now. Can you give us some examples of whats working beauty was such a strong growth area, baby had some nice improvement. Whats driving those kind of gains in market share and in volume gains well, its driven by the strategy, but ill give you one we havent talked. Weve taunlked beauty in the pa, fabric care many times, i can go to almost ten categories and give you examples. Our global home care business, thats including our hard surface cleaners, swiffer, swiffer,febreeze, each one of those, if we take hard surface cleaners, innovation called clean freak is growing magic eraser youve probably heard of grew 25 . Swiffer we launched heavy duty which better serves consumers that have more challenging jobs in cracks and crevices in their floor, febreeze, fabric refresh r was up 5 . Dish, both auto and hand dish are growing behind the premium platinum launch. All of those illustrate that when p g innovates and delights the consumer we can accelerate market share. Home care grew share across the area and has hit a record share driven by the innovation, and funded by outstanding work on productivity china looks like another doubledigit quarter are you seeing any evidence there of an economic slowdown, and are you feeling any of the pressure from the trade tensions twe between the u. S. And china id say if you look at just the consumer data, chinas still very strong. Theres a modest slowdown in category growth rates, but its from very healthy levels so from maybe high singledigits to left high singledigits in most of our categories, and that may be nine to eight to seven and some categories may be a little softer, but still what i consider robust growth the Chinese Consumer is especially interested in Premium Products that provide superior benefits weve seen continued premiumization in china, and as weve accelerated our innovation, it has helped drive a lot of the growth that youve seen throughout the year and certainly very strong in the Fourth Quarter what about tariffs and maybe if you could throw that in with commodities and Foreign Exchange and all those things that are out of your control and just how you would describe the environment for those types of issues right now i would assume you feel all of them to some extent. No, youre absolutely right, sara, this last year that ended june 30th, weve characterized it almost as a tsunami of collection of macro events that caused about 1. 3 billion of hurt about 900 million of that was Foreign Exchange, but also significant commodity impacts, transportation and warehouse, warehouse costs that went up, and weve seen an impact on tariffs. Whats helped us still deliver the plus 7 was the Productivity Program was very strong, and that allowed us to maintain investment in our product and packaged superiority as well as all elements of superiority and offset it. But yes, the macro environment is challenging, and i cant predict and wont try to predict what Foreign Exchange will be Going Forward, but what i can work on in our team of 90,000plus people are working on is generating productivity on every cost bucket, cost pool to make sure that weve got the contingency plans to continue to support the business. And really quickly, and were under 24 hours away from what looks to be a Federal Reserve rate cut, the first in ten years. How would you describe the u. S. Consumer, the u. S. Economy, and whether we need that the u. S. Consumer in our ten categories remains pretty strong the growth rate in the u. S. Of the categories has been 3 and in some cases, some categories, 3. 5 to 4 . So very robust, and were doing everything we can with the innovation that we bring to continue to accelerate growth in the categories we expect maybe weve seen a modest decline in some categories, but overall the u. S. Is healthy, and the consumer is respondent to innovation that delights him or her. David taylor, thanks again for making the time. Thank you ceo and chairman of Procter Gamble guys, the stock up 50 over the last 12 months, so this kind of improvement in sales has been building and building and building, but 7 organic growth. Thats like the old days of Procter Gamble the question i was going to ask, sara, who do we give credit to, taylor or pelz. Its a combination. Theyve worked really well together i think the company would say to the employees, but clearly the plan to eliminate that Matrix Organization and get much more accountability and responsibility and innovation on the ground, just cutting out the layers and layers of Corporate Management was something that nelson pelz campaigned for to join the board that process sped up i was in cincinnati a few months ago when they announced it, and growth has really sped up since then the seeds were in place for this kind of transformation going into this fight. Taylor deserves credit as well, and the stock has just really worked now i wonder how much room there is to go. Yeah, id give the company and management credit for the sales. I give pelz the credit for the he did get them to focus on inefficiencies. This sales story is really impressive. P g up 4 still to come, wall street analysts are weighing in on pfizers big deal with mylan well get the word on the street thats coming up next. Every day, visionaries are creating the future. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. Welcome back, lets get a quick check on the british pound sliding yet again against the dollar amid concerns of a no deal brexit. Its now down about 2. 5 against the dollar since Boris Johnson took over as Prime Minister. Its down 4. 2 in the month of july, which of course for a currency is a huge move. Weve blown past quite a few support levels in that slide over the last month including today, 121, 6 was the shortterm level. Speaking to traders today, 119. 88 is the next key level theyre looking at thats essentially the effective low of 2017 if you put aside a very brief flash crash and below that there really isnt much support going low. Thats the kind of shortterm level to watch as for how much of a nodeal were pricing in, a lot of traders tend to use the range 140 if all of this went away, 110 if we did actually get a no deal, so were sort of 66 of the way to pricing that in at the moment but 4 slide in the course of just a month. Because Boris Johnson is so much tougher on the talk of no deal. So much tougher with his rhetoric, and its hard to see in the month of august how that gets better because parliaments in recess, so theres no check on his rhetoric at the moment, and thats whats really affected markets over the last few weeks. Maybe this is his whole negotiating ploy just to be tough with the e. U. Could be and august of course not a great month to see volatility fall, and then in september you get the prospect of seeing did they get lower prices yet at Liberty London . I doubt theyve lowered prices but for you in dollars youre looking good either way i guess raised to offset the pound is what i mean. I think i think id do well. I probably would either way time to get word on the street, oppenheimer initiating 10 cent music. The firm citing monetization potential and enhanced content as well saying its a better music play than spotify. Morgan stanley and bank of america downgrading pfizer to neutral, after pfizers planned deal to merge its off patent drug business with mylan both of them cutting their price target from sort of the high 40s to the low 40s, similar sort of price cuts for both, and thats kind of why were trading at the moment whats your take on this one this is another one very sensitive to regulation. There arent a whole lot of things that democrats and republicans agree on, but drug prices they do and i think this a Second Trump Administration or a Warren Administration or a Sanders Administration there would be real pressure on drug prices i think the longterm outlook for these stocks is going to be interesting. So are you out of them . We do not own any i own j j, which is well distributed in the med tech, but the core bio tech and Pharma Companies i think theres longterm risk. Thats how you feel about social media stocks, stay away, too much regulation. Technology, the two industries i think they could come at hard are social media and drug companies. Time to get a cnbc news update with sue herrera. Hi sue. Hello everyone. On capitol hill the acting commissioner of u. S. Customs and Border Protection mark morgan defending his agencys treatment of migrants on the southern border. The men and women of the cbp are not running concentration camps making those in our custody drink from toilets nor denying them access to toothbrushes that is simply not true. This is the kind of irresponsible rhetoric that they have to endure from both the media and even some of our own congressional leaders. Protesters clashed with police again in hong kong after reports that some of would be charged with rioting 44 people were arrested on those charges stemming from a sunday night demonstration. In india, lawmakers approved a bill to end the muslim practice of instant divorce. Two years after the Supreme Court ruled that it violated the Constitutional Rights of muslim women. Muslim men could divorce their wives by saying the arabic word for divorce three times at any time you are up to date that is the news update this hour guys, i will send it back downtown to you. Dont want to get that word wrong with repeating it. No, you dont thats why i stumbled it get it wrong. Sue, thank you. You got it. We have got just under 30 minutes left of trade. We are about 52 points or so on the dow. The three things driving the action, the market treading water ahead of tomorrows key Interest Rate decision on the fed. On the data front, strong u. S. Consumer confidence and housing numbers and p g is leading the dow after strong earnings as we discussed earlier. 28 minutes to go in the session. Lets send it back to mike santoli. The tide is high, david taylor went through all the reasons the company is really clicking right now what this chart shows is that wall street really appreciates this story this is the forward price to earnings multiple on Procter Gamble going all the way back to the end of 1995. What you see of course here it has just gone vertical its well up near 25 times next 12 months expected earnings. It also happened in a similar way i would say around 1996 into 97, and this period had some resemblance to our period right now, which is the market all it really loved was big tech stocks and huge multinational blue chips. They both got pretty over valued you see where it went there. I do think you have to keep in mind its building a pretty big premium to the overall market. Here is p and gs evaluation against the s p 500. You can see its broken higher out of a range its been in for a long time, all of which is to say things going well at Procter Gamble, but no longer a secret to investors the question is will they continue to build in a premium. Thank you very much after the break, we will speak with the ceo of horizon bancorp. Plus, charlie doubling down on a previous media pick for todays last chance trade. Were going to reveal the call stay with us, closing bell will be right back, under 30 minutes to go, dow down 50 minutes to go, dow down 50 points abouten. And put back together. This is also hals heart. And this is hals relief, knowing hes covered. Ths heart. And its beating better than ever. This is what medicare from Blue Cross Blue Shield does for hal. And with easy access to quality healthcare, imagine what we can do for you. This is the benefit of blue. In the human brain, billions of nefor people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. Welcome back capital ones plunging after announcing a Security Breach affecting more than 100 million customers. Gained access to Customer Data including Social Security numbers and account numbers. This breach comes despite Financial Institutions investing billions of dollars into Cyber Security each year joining us now, craig white ceo of horizon bancorp. Craig, thanks very much for joining us. Were going to get on to your earnings, which were very strong in just a moment, but we could start if you dont mind with that capital one hack. Whats your take on it, and how confident can any bank be that they are safe from these sorts of threats well, something we all are stay up late at night worrying about is Cyber Breaches et cetera. Last night i signed up for the equifax Data Security and their breach that happened a couple of years ago. And unfortunately another one occurred today we do need, i think, Government Support to help defend against these actions going throughout the world, and its unfortunate to hear about capital ones breach today how confident are you that you are protected as we sit here right now . As confident as probably capital one was. I think we all think were doing the best job we can. Im a small bank, 5 billion of total assets headquartered in indiana, michigan, we had a Great Technology team. We have all kiepds of cyber walls and Cyber Security, but does anyone know how well theyre protected when you have state sponsored Cyber Attacks taking place, even though this happened internally within the United States, theres a lot of attacks taking place every single day craig, lets move on and talk about your earnings, strong loan growth, Strong Deposit growth yearoveryear, it doesnt paint the picture of a u. S. Economy that requires a rate cut tomorrow, does it . No, it does not a lot of the Community Banks were following also reported strong earnings for the Second Quarter. We reported record earnings for the Second Quarter what was supporting our Earnings Growth was the consumer side of the Balance Sheet and consumer loans. Commercial loans actually fell down during the Second Quarter, but consumer and mortgages have had a strong rebound, primarily the lower Interest Rates as well as the low unemployment rates for the consumer theyre still spending their money. I was just going to ask about your outlook for m a i mean, it always feels like a ripe place for deal making, the Regional Banking space is that something that you expect that youre going to be active in . Yes, consolidations going to continue to take place in the banking industry, about 5 of the banks are sold every single year, and for indiana, michigan, and ohio banks we expect about 22 looks every single year weve completed 14 acquisitions over the last 17 years and seven over the last four years we are very active in the mergers and acquisition game that would be an important part of our growth Going Forward. We like to see it about 50 mergers and acquisitions, and 50 of our growth organically. Craig, youve got quite a high exposure to agriculture, given where youre based do you feel like farmers are feeling the pressure of the trade war . Actually, we dont have a high exposure to ag. Were about 100 million out of our 5 billion in total assets are in ag. We have an outstanding ag group. The farmers had a decent year last year in indiana and michigan whats hurting this year was the wet crops and the rainfall from the spring sometitime delayed tr ability to plant if they have Crop Insurance farmers are going to do quite well and report a profit because they didnt have the input cost due to the wet season. We actually think the ag industry in the midwest is not that bad the production will be down, though, so next year prices should go up do you see any areas of caution coming down the pike in terms of the economy, consumer, business, appetite for spending and taking out loans anything to be concerned about this year, the end of this year . Consumer lending is really quite strong both in automotive, home equity, and home repair the challenge i think right now is were seeing some softness in the c i industry there has been some announced layoffs in the eastern part of michigan and the automotive industry, and consumers, as long as theyre continue working will continue to spend. With the low Interest Rates we should see a bigger uptick in mortgage volume this year. Craig dwight, thanks for joining us thanks for having me on your show ceo of horizon bank after the bell well get earnings from apple, amgen, well get reaction from mad moneys jim cramer whos got a special show from outside the stock exchange. He must be melting. Its really hot out there and i think raindrops started falling as well. Thats all coming up on closing bell, gearing up for a big afternoon enis thheofarngwi t dow down 53 points, under 20 dow down 53 points, under 20 minutes until the close. Theyll. Voya. Helping you to and through retirement. Welcome back, lets check in on one individual, beyond meat, wider than expected loss yesterday after the bell a second week Stock Offering three months after its ipo the stock trading low by 12 relative to an 800 gain of course with this second republic, offering 12 , only a small decline. Im going to guess that you are not touching this with a tenfoot pole. Very good guess. I covered avm as an investment banker and they always talked about the meatless hamburger they were going to have nobodys ever got this test right, but the latest products seem to be getting closer and closer. I know youre not touching it but relative to 800 off three months after an ipo you could be much more spooked than that. Especially because of the secondary offering there is going to be a lot of stock for sale i guarantee the people who invested in this as venture capitalists are looking to get out of this. Whats your problem, valuation sm. No earnings ive seen a lot of other companies talk about their meatless hamburgers. You said that especially because of the offering, id say only because of the offering. Exactly eps is a miss, it doesnt matter at this point the revenue is better than expected. Down a percent off earnings and then it spilled another 10 plus. Theres going to be a lot more stock for sale. Beyond meat down 12 today. We have got just 13 minutes left of trade, we are lower by only by about 47 points on the dow. You can frame this as outperformance relative to a 2 decline in europe. Small caps up a nice 1 up next, your last chance trade. Closing bell will be right closing bell will be right back dont get mad. Get e trade, dawg. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Ten minutes until the close, charlie your last chance trade this is a very con trarn idea everybody hates cbs and viacom together we think theyre going to merge we think theres 750 million of synergies. These companies are already trading cheap, but eight times earnings combined, theyre going to be extremely cheap and earnings are going to grow because next year is a political year. Theyre going to merge by next wednesday we think they could merge they were planning to announce earnings we think theyre going to be having merger talks this week. You say august 7th. We both know exactly that day, its our birthday. Twins. This is actually a little freaky august 7th is my birthday. This is a little freaky seriously august 7th. That is crazy also the great bill griffeths birthday as well. Mines a little before yours. Thats so funny. Is it cheap relative to a comcast or relative to a netflix . Its relative cheap to a comcast, to both people, again, think that cbs is losing negotiating power because of cord cutting, and that is absolutely true but on a combined basis theyre going to have more negotiating power. There we go last chance trade, i cant believe all of our birthdays. This is a whole new bonding experience. 365 to the third power. A big hour of earnings, lets get a preview of Electronic Arts with julia boorstin. Well, wolf with Electronic Arts facing a stiff competition from its games for fortnite the big question is whether the multidigital player game can deliver upside its first season launched in february and its Second Season earlier this month in the first fiscal quarter revenue is expected to decline 4 to 719 million while earnings per share are projected to decline nearly 95 to just 0. 01 per share. It is apex thats considered a wild card for just how well this company can perform. Sara, back over to you. All right, thank you. Weve got eight minutes left of trade, up next, were covering all the angles of the market in our closing countdown. Dow down 34 points stay with us 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. Just about five minutes left to go, time for the closing countdown. Lets trade the close, kevin hanks joins us kevin, in the next, i dont know, 24 hours well get the Apple Earnings, amd earnings, clear bellwether for the semis and of course the fed decision talk about the Market Positioning ahead of all of these key event risks and what you expect. Ive got some interesting tidb tidbits for you guys, first and foremost out of 21 Earnings Reports, right, weve got the average expected move for apple and amd. First apple, about 4. 7 , and thats exactly where it said at midday today, but this late in the day rally and apple has taken that expected move down from 9. 50 down to 8. 50, so the expected move based on implied volatility has dropped a full dollar from midday today until the end of the close so thats pretty significant the other name, amd, 21 Earnings Reports, average move about 12. 2 . This move that were expecting today only about 8. 4 so both apple and amd a little lower expected move than average going into this Earnings Report. Kevin, what do you think the markets looking for tomorrow from the fed i think this market is setting itself up to be disappointed some of the people want to have basis point rate cut i dont think theyre going to get it i think the wagy Jerome Powell states his mandate Going Forward, i think hes going to cut a quarter point. His wording, that press conference at 2 30 eastern time is going to be vital to how this market consumes and digests what the fed does tomorrow. Kevin hincks thanks so much for joining us hey, mike. Back and fill, thats what a boat does when it doesnt have the wind in its favor, it has to ride the tide. Thats what apple has been doing. We talked about that expected move after the close on earnings look at the setup in that stock going back two years here. Whats significant is where it stopped this latest rally, right below the may highs. Obviously a 4 move to the upside would actually take it above that, and of course you have this bigger high from late last year up about 232 so it seems as if theres still a struggle to figure out if apples really resuming an up trend. Look at it on a oneyear basis, some other sectors of tech it has been underperforming a lot of these different areas its been underperforming the overall tech sector, the software sector, that is semiconductors you see the white there, apple has struggled to keep up look at this same relationship over ten years, and you see that apple has basically built up a tremendous lead. Its only backed off a little bit, and look at these sections here when it flattened out for long periods of time, but then eventually went higher thats the setup, guys 22 hours until the fed decision. Lets get out to rick santelli. Thanks, mike, you know, if you look at a micro view of tenyear notes over a threeday chart, you can see how compressed these ranges are getting. This is going to be the tenth day weve closed between 202 and 208. If you take a big view, if we drop ten basis points, that would take us back to november of 2016, so keep that in mind when you look at the next macro chart. This is a may 2,017 index hovering right there, right ready to pop out with history. Rates low, and thats really going to be a bothersome effect to the fed now bertha, we couldnt stay in positive territory in the nasdaq. Depends on what youre looking at there, rick weve got bio tech positive that led by earnings gainers, and small caps like mesa labs. That is helping to boost the small caps overall chips are mixed. Thats whats keeping tech pretty much tamped down. We did get good numbers out of nxpi although the guidance was a little bit less than some folks had liked. We will be watching for amd earnings after the bell. Amd expected to post earnings of 0. 08 a share on revenues of about 1. 52 billion. Over to the nyc right now. Thank you, bertha we did get some help from proct Procter Gamble, great numbers, historic high there. Pfizer down another 6 today after being weak yesterday a caterpillar, some of the industrials still slightly trending downward here, even visa, new highs recently didnt have a lot of help today we had some weakness in some of the retailers, some of the car people, carmax, group one, automotive were on the weak side and away saw weakness in some of the hospitals, hco holdings had disappointing earnings down 9 capital one weighing on the financials with that data breach, ryder had a warning there. Theres the Dow Jones Industrial average closing down 27 points on the day the s p 500 couldnt make it into positive territory either the fed tomorrow welcome to the closing bell everyone. Lets take a look at how we finished up the day on wall street lower across the board except for the russell 2000 index of small caps jumping 1 today. The dow kind of flattish closing down 22 points you had very strong numbers from p g offsetting weakness from pfizer, intel, and verizon within the dow you want to see in a lower market if not for groups like energy, oil had a 2 hop today, those stocks did well, real estate, materials, industrial, and Consumer Staples all closing higher Consumer Discretionary and utilities the worst performers. Well off the lows, which came at the open, which is no surprise given that europe was still open we got a big snapshot whetheri was market moves, macro data or company earnings, the difference in sentiment around the rest of the world and the u. S. The u. S. Definitely the outperformer in that sense, europe was down 2 , the dow only down 1 stands out talk about the u. S. Versus the world, that Consumer Confidence soaring today, even pending home sales looking pretty decent. And apple, by the way, intraday all over the place, as low as 207, as high as 210, closing around 208, and we are counting down to apple results theyre due out later this hour. First, well have results from a slew of other companies. Our team of reporters are standing by. Well bring you all of the numbers as soon as we get them. Joining us to talk about the market today, liz young director of Market Strategy at bny melon investment management, and Charlie Bobrinskoy still here, head of aerial investments mike, what are the chances of that well, charlie told you its 365 cubed. And my birthday is not august 7th and im not sure about liz. July 3rd. All right, not too far. Happy birthday. So what stood out it feels like were in this waiting game. The market likes to pull itself into a neutral position ahead of a big thing like the fed meeting. You saw laggards get picked up you mentioned energy, small caps up 1 . Some of the hot stuff cooled off Like Software and mobile payments i think its really getting itself in that position, consolidating around the recent highs just to wait for confirmation of what i think is universally expected. Is it going to be hard for the market to outperform following the fed meeting tomorrow i dont think its going to be hard. As mike points out, were expecting a cut. The market is fully expecting a cut. Its really a matter of whether its going to be 25 or 50 basis points i would expect it to be closer to 25 basis points i think if they did 50, it would just be an indication of how active the fed would be in this. The chance of there not being a cut at this point obviously pretty low, and i think really what the fed would watch is that if they didnt cut, it would tighten financial conditions probably further than really is warranted, even with some of this good economic data. Lets just game this out. While its not the most likely scenario, if they do surprise with a 50 basis point cut, charlie, does the market celebrate that i think its a mixed signal i think it would mean that theyre seeing more softness than the rest of us are seeing, and so i think the better scenario is 25 basis points tomorrow with an indication of another 25 down the road that would probably be okay. 50 basis points tomorrow would make me nervous about the state of the economy but would it make you buy u. S. Equities in the shortterm . Im seeing a lot of strength in the economy and i keep having this fight with the fed and with a lot of other people about whether theres a recession coming the bond markets was saying theres one coming i dont see it i see good results so far. Until i see Something Different im going to stick with a strong economy. I think today that oped from bill dudly former new york fed president saying 25 basis points and then done or at least a message that says were on hold, i think that kind of moves the expectations a little bit. I dont think thats what were going to get the fact that thats one of the voices out there lessens the 50 basis point camp. The problem with that approach as i see it for powell would be it risks a big market selloff and tighter financial conditions which is what the fed is trying to get against. It also does not necessarily get the yield curve in the shape you want it in just 25 basis points and not cutting anymore at the short end, youre still probably very flat yield curve to me thats been the beacon for why the feds moving now anyway. Does the yield curve matter or does it purely link to what it means for Market Sentiment and therefore financial conditions i think the yield curve is still manipulated at this point, and i dont think that were going to get an inversion at the twos, tens which is what you really want to watch what were going to see tomorrow, the difference between 25 and 50 basis points is a matter of 25 being kind of that insurance cut like weve been talking about. 50 might even be more of an indication that were starting a rate cutting cycle so if the fed sees things that everybody else isnt seeing or if theres more weakness than we believe, they might be indicating that theyre starting a rate cutting cycle, which i think is risky because woe dont have that many tools we can only cut so many times before we get to zero. If were not not in a recession situation, i dont want them to use up all their tools. Weve got our first earnings alert, its gilead and amgen lets start with gilead its a beat in the Second Quarter for the company. Earnings per share coming in on an adjusted basis of 1. 82 topping by 0. 10 revenue 5. 69 billion versus estimates of 5. 53 billion on average. Its all about their hepatitis c drug and hiv drug franchise. Hiv drugs came in at 4 billion, just shy of the 4. 07 billion that the street may have been looking for. Vcv looks like a beat, versus 737 million for gilead. Lets switch over to amgen, another beat eps for amgen 397 versus analyst estimates of 3. 59 revenue 5. 871 billion versus expectations of 5. 677 billion, company also raising the lower end of its revenue and Earnings Guidance for the year. Most of that beat guys driven by its big drug enbrel. Back to you. Meg, thank you. I can hit the mondelez numbers which are just crossing the tape right now. The snack maker with a beat and a raise here lets go through the headlines earnings per share 0. 57, that was a match on 57 expected revenues coming in higher, 6. 06 billion versus 6. 03 estimated. Its organic revenues that matter most and that was the strong beat here, up 4. 6 . The street was looking for 2. 8 . And some nice guidance increases here for mondelez. They raised their organic net Revenue Growth guidance to over 3 before that, for the year they were at 2 to 3 thats on the high end they also raised their adjusted earnings per share guidance to about 5 from 3 to 5 and raised their dividend 10 , 0. 285 per share, guys. Crackers and cookies are working right now, and also i would say so is the Global Economy this is a company that owns oreos and ritz and all these power brands, which is where you want to be in the food space right now. You dont want to be in canned soup you dont want to be in boxed mac and cheese you want to be in cookies and crackers theyre the most internationally ebs posed. Theyve only got about 20 revenue in the u. S were all worried about a global slowdown and yes theyre kind of defensive and you always have to buy food, but stronger growth in these countries shows that its not all bad, especially in the emerging markets people have been worried about the youre right they have good products people have been worried about branding Consumer Products this is a nice number showing the strength of the American Consumer and the global consumer, and they have the oreo which is the greatest product ever invented. Really that does help drive results. Theyve also got this new ceo, hes put in place a very localized strategy in other words if youre going to be in russia, make cookies that russians like if youre going to be in the u. S. , thats continued to be a Strong Revenue driver, really good chocolate chip cookies. And it seems like pricing across the board, if you look at these companies reporting, its being tolerated. Consumer is willing to go for it. And mondelez having a nice mix of higher prices, which youve seen but also some volume growth there as well mike, what about the valuations for this sort of company . In the environment weve had theyve run up well, but mondelez, its not a stretch as some of these no, i think thats just where they trade the bigger, more stable Quality Companies that have these predictable earning streams with a little bit of a growth extra and a decent yield, theyre getting priced against the Corporate Bond market. Thats why you have a full valuation. It would be odd if they werent priced as expensively. Obviously a rotation away from safe into cyclical is not going to help them thats kind of where it makes sense. Where are you in this space sm. We like smuckers, which is the one name in this space which isnt trading at 20 times earnings, its more like 14. People dont like the Coffee Business and we think thats exaggerated. Youre right, the safety trade, people looking to be defensive has helped these stocks. Its foldgers, pet food, quite a mix. If we were to get a 50 cut. You want to be cyclically bullish. Financials look nice, theyre going to have to take part on some of that you want to bet on the consumer, i. T. , Consumer Discretionary. Thank you for joining us. Happy birthday in advance. Thank you for having me great to have you both with us up next, find out how a fed rate cut could impact the Financial Sector when we speak to the ceo of kbw were minutes away from Apple Earnings well have analysts and shareholder reactions as soon as that is out. Plus, youll also hear from mad moneys jim cramer mad because when itser decision time. You need decision tech. Only from fidelity. You need decision tech. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Keeping the night interesting, is all about setting the right tone. Lower carbs. Lower calories. Higher expectations. The light beer youve been waiting for has arrived. Corona premier. Has arrived. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. The Federal Reserve is expected to cut Interest Rates tomorrow for the First Time Since the financial crisis lower Interest Rates could pose another headwind for Regional Bank stocks which have already been underperforming the Broader Market this year joining us to discuss from the 20th annual kbw Investor Conference is thomas michaud, thanks so much for joining us, tom. Good afternoon. Firstly, i just wanted to ask about the Interest Rate environment. If we do see a rate cut tomorrow, how quickly do you think well see deposit rates react across the Regional Banking space . I do think that banks are going to try to be as quick as they can in terms of reflecting any changes in market rates. I dont think it will be 100 because there still was a little bit of an adjustment going from some of the prior rate increases because this is a slowmoving item in terms of how quickly a banks Balance Sheet readjusts but at this conference right here, weve been hearing from Bank Management teams that they will be reactive to what market rates are and what government policy is. If theres a rate cut, they will look to make adjustments as much as they can as well. Thomas, the Regional Banks have significantly underperformed the nations biggest banks of late. Is that something that makes sense to you, or are they due a catch up ill tell you whats really been remarkable is by how much all banks have underperformed since the first half of last year, and i was listening to much of the conversation that you are having earlier, which is that we think that the forecast thats in bank stocks right now really adopts the more bearish view, and to the extent that the more bearish Economic Outlook doesnt play out, you could really see a better bid for all bank stocks that look like theyre about 20 undervalued relative to the market with regards to your question, on friday we upgraded the nations biggest banks to outperform our preference is more for the biggest banks because they rely a little bit less on the yield curve for Earnings Growth and Revenue Growth, so while we think that all banks are undervalued, if you had to pick one spot, we would actually right now focus object biggest banks in the nation. Tom, what are you hearing in terms of pockets of loan growth, where has been the strongest for consumers and for businesses, and what parts are the weakest its been really interesting. I wouldsay, sara, there have been two areas that have been the biggest areas for questions. Investors keep asking management teams about how theyre dealing with whats been a slowdown in the economy and with a flatter and lower yield curve, and theyre talking about loan growth in all the different categories i think, like in many cases, the consumer has been in a little bit better shape than commercial customers, and then whats also been interesting is that management teams have been asking investors why do they think that their stocks created such a significant discount to historical levels. Those have been the two areas, one is your loan growth question and the second is why are these stocks so cheap right now i think has been a big talk of this conference. Thomas michaud, thanks for joining us. Thank you. Kbw. Weve got an earnings alert on Electronic Arts, julia boar stin. Revenues Beat Estimates net bookings, thats the revenue number we watch coming in at 743 million. Thats better than the 719 estimated. The company reporting earnings of 4. 57 per share, thats not exactly comparable with estimates because of an income tax benefit calculated into those earnings the companys saying we delivered operating results significantly above our expectations, driven by the broad strength across our core franchises, and they mentioned apex legends, which is a new game thats competitive with fortnite as one of those farkts driving success. Guidance coming in line with expectations, you see shares trading 3 higher in the after hours. Guys, back to you. Julia, thank you very much. Mike, this clearly in a very hot space but hasnt really taken part in the last 12 months or so. The stock itself has been kind of in the penalty box because of the fortnite thing, the releases werent that great. Stock was back here three weeks ago at 92. So its obviously just picking up from relatively low levels. Up 4 coming up, Apple Earnings just minutes away. We will get the Apple Earnings trade from mad oneys jim cramer as soon as those results hit. Thats all coming up on closing thats all coming up on closing bell. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Apple earnings are just moments away, but weve already gotten results from mondelez which beat revenue estimates gilead beating on the top and bottom lines and Electronic Arts reporting stronger than expected three winners after hours as you can see led by ea. Time to get a cnbc update with sue herera. Hello, sara, hello everyone heres whats happening at this hour, californias governor Gavin Newsome signing legislation requiring candidates for president to disclose their income tax returns in order to appear on that states primary ballot the bill aimed primarily at President Trump is likely to face legal challenges. Air force general john hyte President Trumps nominee to become the voice chairman denying Sexual Assault allegations against him. His accuser responded afterwards. I would also like to know as a victim, i felt like i got sandbagged in there. You want to know how an investigation was done, it blamed the victim. It did not investigate the subject thoroughly. British Prime Minister Boris Johnson visiting a chicken farm in wales, part of his National Tour to reassure voters that his push for brexit wont hurt the economy and rip apart the u. K. The farm owner said the prospect of a Nodeal Brexit was a massive concern for his industry you are up to date, thats the news update this hour. Guys, i will send it back down to you. That concern weighing into the pound today and over the last couple of weeks as we discussed earlier. Sue, thank you Apple Earnings, of course, on deck. Less than ten minutes away up next, mad moneys jim cramer will react to the numbers with us, plus weve got an analyst and a shareholder to react also seven and a half minutes or so until apple were back in a couple minutes lets do it. [ sniffing ] also seven and a half minutes or so until apple were back in a couple minutes summer event today sz for exceptional offers. Lease the glc 300 suv for just 419 a month at the mercedesbenz summer event. Going on now. Apple earnings just minutes away weve got an alert now on fire eye, ra held solomon with the details. Plummeting in after hours, more than 14 after a surprise quarterly lost of 0. 01 in the Second Quarter analysts had expected a 0. 01 beat with revenue they did come in above estimates but sales in the key product category missed projections. Reduced outlook in the second half of 2019 citing greater than expected increase in expenses residented to cloud and commissions on new businesses saying that negative live impacted their growth and operating margins, plummeting more than 15 , almost 16 . Send it now to mike santoli for the final dashboard of the day. Mike. The consumer is really riding this economy pretty much with a lot of confidence. Lets look at the Consumer Confidence indicator over a very longterm period of time big bounce today as you guys mentioned earlier, back towards the cycle highs, and actually, not very far off the alltime highs right there from the year 2,000. A lot of folks said how can the fed be cutting rates with Consumer Confidence in this level. Ill point back as we keep pointing back to the mid90s right here, this little congestion there, that was right before the fed cut rates in mid1995 it was a near miss on a recession, a global slowdown, and then things picked up from there. Its not unprecedented i would also point to 1998 was another time when we had a little bit of a switch back in confidence and the fed was cutting rates. Where Consumer Confidence is not inconsistent with thefed easin at least slightly and at least for a short period of time. The bears would say hey, consumers lagging indicator of the economy. All the more reason to cut then. Mike, thank you very much for that weve got another Earnings Report out, and its a and d which is sliding after hours. It is sliding the current quarter, Second Quarter results were more or less in line 0. 08 on the bottom line in terms of earnings per share. On the top line it was a little better than expected, at 1. 53 billion. Among the areas that were strong, it was their enterprise segme segment, revenue there 590 million. The street had been looking for about 570 million. Little bit soft when it came to their computing and graphics segment, that revenue 940 million. The street had been looking more for 960 million. Their Gross Margins were right in line at about 41 the problem here is on the outlook for revenues for the Third Quarter. The company is now projecting 1. 8 billion in revenues, plus or minus 50 million the street had been looking for closer to about 1. 95 billion in revenue, dont really have a number on the bottom line, but they do actually anticipate better margins for the Third Quarter than the estimate of about 43 . For fullyear they are maintaining their outlook. They are launching a new chip on august 7th, your mutual birthdays. They do expect that to drive results in the Third Quarter well come back to you if we see any more the conference will be taking place this afternoon. Such a good day. Bonus points. Maybe well be given a new chip for our birthdays. Thats going to be a crazy show mike, a and d, i should point out it did slide down 7 or 8 in the Immediate Reaction its down 2 or so percent at the moment and its sharply higher. Yeartodate more than 80 . Best technology performer. I think its just moderating little bit of the excess confidence or optimism semiconductors in general had this huge run. It may be time to just pause a bit. Apple of course the big focus. Its due out any moment now. Lets bring in ed snider, analyst, nancy tangler from tangler wealth management, and ed lee, cnbc contributor from the New York Times who are here to react to the numbers due any moment ed snider, whats the key thing youre looking for were primarily looking for revenue for iphones. Since last year when things faded they stopped you want to see what theyre making off the iphone this year and try to extrapolate how the progress is going thats where apple turns on all future earnings is to make sure their iphone business remains strong. Whats the key item youre looking at ed . The same thing we want to get a better sense of well have to back out uni sales, thats the thing Going Forward for us specifically in the china region, i want to get a sense of that we know they didnt get the tariff thing they were asking for from trump, and you know, the quarters not necessarily going to reflect that. We want to get a better sense of the challenges they face in that region thats a huge part of what we want to be thinking about. The shares today were a little bit all over the place within the session, 207 to 210 the range. We are expecting the numbers any moment its up 2 the Immediate Reaction, josh liptons got the numbers josh apple reporting earnings per share here of 2. 18 versus expectations of 2. 10. Revenue 53. 8 billion the street was at 53. 4 billion Gross Margins coming in at 37. 6 . Turning to the guidance, q4 guidance, apple is giving guidance of 61 to 64 billion analysts had modeled 61 billion and for margins of 37. 5 to 38. 5 . Turning to the segments, iphone revenue 26 billion its basically in line with expectations thats down about 12 . Remember in q2 revenue was down about 17 . Ipad revenue 5 billion, services revenue, 11. 5 billion. Thats up 13 , though apple will emphasize that a year ago they did have that onetime litigation settlement. If you normalize for that, its up 15 from the comparable figure a year ago. Services margins this quarter, 64. 1 . Wearables, home and accessories 5 b 5. 5 billion. Mac revenue 5. 82 billion and finally turning to china, Greater China revenue 9 ppt. 2 billion in the quarter thats down about 4 yearoveryear in q2 Greater China revenue was down quarteroverquarter. Josh, thank you lets get back to our panel of experts for some Immediate Reaction mike santoli lets go straight to you nice pop after hours, looks like all the below the revenue items were pretty much in line. Pretty much in line i think the guidance is a little bit better than the forecast for top line, so thats probably where youre getting that margin about performance for the stock right in the after hours i do think, i think you can back away and say this is now half an iphone company, half of revenues, slightly less than that were iphone i think thats the kind of mix that you want to look at going ahead. Guidance clearly the standout as you say, mike, if you are looking for to pick holes in this, the beat for this quarter was slightly on the max, slightly on the wearables, the wearables in particular a strong yearoveryear growth rate of 50 . Longterm, services is the narrative they want us to go with i think the China Business was interesting. They moderated from the previous quarter, where its down 4 versus much bigger last quarter. That gives us a sign of, you know, that the challenges theyve been facing in china, theyve been able to handle it theyve been able to deal with it im with mike here, half an iphone company we need to look at these other businesses again, services id like to know more, get more color on what exactly makes up the components of services. We know its advertising and some media stuff and some oneoff sales. And some other really fat profit margin, 64. 1 on margins for services up 13 . Ed snyder, your reaction i agree its slightly better than expected but with the services is a higher mix and the gross margin continue to decline kind of suggest whats going on with iphone is fading bit. There is speculation theyre going to enter more of a mid tier market the beginning of next year. Ultimately theyve got to expand their reach of iphone beyond the high end and try to move into the mid tier to sustain the Consumer Base for the Services Businesses if theyre able to do that, things will work out if theyre not, things will start to ebb well see how the fall launch goes, which is a lot of eyes towards how successful the new phones are. Apple shares up more than 3 after hours. Lets go back to josh lipton for more josh. I did have a chance to check in with apples ceo tim cook about a few issues i want to bring you his comments one, iphone revenue of 26 billion down 12 that is a sequential improvement, and cook has talked about how he has these levers to pull when it comes to the iphone for example, we know one issue with the iphone franchise is that replacement cycle is getting longer people are holding onto their phones for longer, so tradein programs hes mentioned as a lever. I asked him whether tradein programs did have an impact. Cook telling me it was a key part of the improvement sequentially also the tradein and Financing Program were key to our results in china it was an important part of what we did, in addition to what i mentioned last call, that we were going to ignore the fx changes and essentially lower the price. And so that combined with the tradeins and the Financing Programs, as long as the government which included a vat reduction, all of these things mixed together explain the negative 20 going to negative 4 in china. Hes talking about the difference in Greater China revenue. I did also ask him about these potential tariff threats and whether he has made any changes to his supply chain in response to those potential tariffs coming cook telling me weve made no significant changes. Keep in mind for us, our products are made everywhere you look underneath the hood youve got a significant amount of the cig csill come coming frh u. S. The aggregate looks very different when you portion it out by country back to you. Thanks very much for that, josh the stock is up 3. 3 lets get to nancy tangler for her reaction youre a shareholder whats your take on the numbers . Listen, i think it was a great quarter in this regard i think mikes point is the right one. Very quickly the company has grown their way away from the iphone being super dominant in terms of total revenues. I thought the Services Numbers were just a tad weak china was very encouraging in terms of aslowdown in the sequential decline, and i think wearables is a bright spot for the ecosystem, so in general, i think the little bits of bad news were offset by some powerful news in other segments, and then you cant argue with the margins. Its impressive. So just in terms of what tim cook told josh lipton and what drove the improvement, even though iphone revenue down down 12 , the tradein programs, tradein and financing in china, whats the significance of that . Clearly theyre speaking to the Chinese Consumer theyre also looking for value thats going to be a huge part of it. Its a program theyve been implementing here in the u. S. As well it also tells you the competition, thats a huge thing for them to deal with. Theres huawei out there, a bunch of other competitors that are gaining steam, and also these phones that might be cheaper are just as good in their eyes in terms of the functionality. Chinese phones also on the mobile system. We chat is the man operating system for how these things work consumers just want to know what theyre paying is the key thing for the iphone in terms of revenue and including pricing going to be when 5g becomes a reality . No, no, i dont think 5g is going to help any phone company much at all. Its a separate topic, but if you get into the details on that, its going to be a little bit of a disappointment. The journal had a great video on this a week or so ago by a young lady who tested it, and her findings mirrored exactly what we were. I think apples being smart here theyve enjoyed a phenomenal run in hand sets with greatmargins but theyve captured about all the value there is to be captured on the high end, and theyre going to have to move to the mid tier thats going to impact margins theyre doing a tradein program, offering better value youre necessarily going to see it hit their margin profile, but as long as uni continue to remain strong and they can eke out gains in that area, their Services Business will thrive. If it doesnt, youve got the opposite problem like so Many Companies that went before them. For now investors are embracing this thank you all. Up next, much more on apples results, shares trading higher, reacting to better revenue guidance and better results. Just moments ago well get jim cramers first take on the numbers when we come right back defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Well get jim cramers first welcome back, its an bn another wild after Hours Earnings session apple leading the way with an earnings beat, up 3 mondelez also beat, Electronic Arts gilead reporting better than expected profit and revenue, if we can look at the shares, apple the key mover, mike, ahead of tomorrow, of course its going to have a big impact on various indices. Can it have a read across further stocks as well, individual stocks . It could. I think apple kind of goes its own way based on its own dynamics even though its a modest move to the upside, its above where it topped in may, so 214 or so, under 212 in may, its going to give some people reassurance that it didnt run into a wall at that level as it tries to kind of get back to last years. It was coming into the report with a 33 gain for the year. Yes, but remember it was july 3rd that the stock just took a huge dive after the overall market bottomed, so i think the yeartodate numbers are deceptive because you had such a tumble into very close to your end. Indeed as we said, extraordinary runup coming into this, just coming off the ball a bit. It looks like a little bit of either cautious or down scale guidance is probably going to weigh on that slightly, but you know, i think its kind of been an outperformer within semis which has been an outperformer i think it probably earns the benefit of the doubt. It really feels like with both names guidance is the key here with that, lets talk apple. Weve got a very special guest to help break down the report, tell you what to do. Jim cramer joining us from outside the New York Stock Exchange where hes getting ready for tonights special edition of mad money. Hes got quite a setup out there. Jim, thanks for joining us looks like wall street is embracing the numbers, especially guidance. I think these people down here are chanting apple, apple, apple, and i think what people like frankly is that you have to back out, back out that, but really you get down to is that you would argue on a Constant Currency basis its even higher than the range Katie Huberty was, the top person. Youre talking about wearables and services amounting to being a fortune 50 company, the Smallest Company in fortune 50 is a 62 billion Company Still not enough to please those who say its only a cell phone company, but i think a lot to think about going down the pike, particularly with the credit card right on the horizon. Yeah, jim, its going to be really interesting to listen to hear what theyve got to say about credit card on the Earnings Call. To your point on the wearables, still small but growing at 50 , services perhaps fractionally disappointing compared to guidance, compared to expectations well, you did have a onetime gain last year that youre lapping, and you also did have a big currency, lets say a big currency swing i mean, i could understand if you just used currency you could probably get about 15 increase, but im using i say you could its a little fungible, i know, but the idea that it was going to be at 12 where tony kind of the most tepid bull in history thought it might be, that didnt happen so i think the analysts are going to back out and do some of the calculations that i mentioned and try to hit be able to guide 16 to 18, which, again, is very good considering the size of it youre right about wearables its all low base, but everything that starts is an awful low base when it begins, and thats how i view this quarter. Jim, i want to ask about the show coming up youre outside, of course, for it, partly because youre grilling some burgers. What time exactly is that . Because i might try and swing by when youre cooking up some burgers. Well, i tell you, lets see, im not just doing burgers i might be doing the beyond meat lasagna. I had some beyond meat short rib tacos the other day. Theres a lot to explore here, will of. Were going to take up the con te text of a stock that was supposed it crater david taylor, what a fabulous interviews thank you so much for getting him. That was the kind of fired up story people should be in that these people behind me are caring about beyond meat should have been down much more if it was a phony. Its not, maybe 6 15 if you want to stick around. I dont have my usual g and t for you. I might be able to find one kicking around well see. He needs a good meatless meat, he hasnt really embraced the concept. Jim, p and g, thanks for mentioning it. I think what that shows you, theres still a lot of growth despite the tough macro environment. Look at apple, look at pand g, its like tariffs and commodities and currencies, everything is being thrown at these companies and yet were continuing to see growth mondelez just put up 4 organic Revenue Growth. You were the one who first turned me on to mondelez you were the one who explained to me that it could be in growth mode these are stealth growth stocks, i mean, not supposed to be happening. I mean mondelez grows like a drug company i mean, it really is incredible how theyve stepped up, up the proctor lines, really reminiscent of a junior growth company, starbucks, so there is a lot of growth. Its just its kind of obscured by commons engine and obscured by autos and theres always something dow chemical i can come up with a million things that are not working, and then a couple million that are, but lets not forget that if we have another 300 tariffs on 320 billion a lot of what you and i like is going to go away yeah. Jim, i just want to come back to apple, would that guidance beat 61 to 64 billion, analysts were expecting 61 billion, what do you now need to hear object Earnings Call to start liking this stock again what else do you need from the Earnings Call to start liking it again . I would like to know more about when 5g is so people dont feel like they can hop off and get back on. Josh lipton asked some Great Questions to tim about china, Mainland China surprisingly Mainland China was very good. Again, here we are the president s poking fun at president xi thats not the way to do business if youre trying to get something done, but i think more questions about how Mainland China is doing well, certainly more questions about when services inflect to the point where were thinking about the lifetime value of a customer i know theyre not doing that yet, and i certainly want to hear more about the credit card because a credit card is a fabulous, fabulous, fabulous business, and i know that cramericans behind me want to hear about that 2020, 2021 goodness that is going to drive apple higher. Thats a good crowd of cramerica, jim final question, does apple have anything to worry about on the antitrust front . It gets lumped in there with big tech investigations. Im glad you asked that, boy, josh has somereally some pointed questions to management about that i know that tim cook feels passionately that theres competition on every single vertical i believe thats true. I do also believe that big is now bad. I dont know when it flipped like that. We used to have cheers for capitalism and success, but when youre big now, there are people who are taking shots at you, even if what youre doing is making great things. I mean, look, what would you do what would you do without the app store . I mean how many apps do you guys i have like 100 apps, and every day i find a new app im working on an app myself i think its a fantastic marketplace. Somehow people are thinking its a restraint of trade somehow i mean, guys, give me a break. If you really want to pick on somebody, why dont you pick on like the big polluting companies, somebody doing something wrong for heavens sake. I like that tease there, mad money app to come, maybe we should launch a closing app. Jim cramer, thank you very much. Love your show. Have fun. Love your show. Get some bedazzled jeans. I see you got chip berg on hes the best 18 bucks its a good price jims handling that heat well hes got a huge show coming up, including chip as we just said and that Awesome Group of fans live to react throughout the show with jim. Mad money, 6 00 p. M. Eastern time. Up next, the earnings roll on qualcomm set to report its results tomorrow well bring you all the key things to watch. Speaking of earningsge, ne munster will break down apple munster will break down apple results next on mad money. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. The earnings are still coming now we have an alert on yum china. Rahel solomon with the results. Reporter hi, sara. After hours after a mixed quarters, starting with revenue, coming in at 2. 1, versus the estimate the treat was expecting of 2. 16 billion. Eps was at a 46 per share versus the estimate of 39 per share 4 , which was roughly in line of expectations of 4. 1 kfc slightly above estimates of samestore sales pizza hut roughly in line, 1 . Again, the stock is slightly higher in off hours after a mixed Quarter Forum china, the largest fast food operator in china. Wofrl, back to you. Thank you very much up next on closing bell, your wall street look ahead the key things every investor needs to know when we returnial. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. As your life grows, so do your needs. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . You mighyour joints. Nge for your heart. . Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally discovered in jellyfish, prevagen has been shown in Clinical Trials to improve shortterm memory. Prevagen. Healthier brain. Better life. Apple shares continue to climb after reporting earnings just a little over 25 minutes ago here, up 4. 1 now. After apple returned to Revenue Growth, up 1 from a year ago quarter. First time we have seen it in a few quarters, beat on the bottom line and surprised wall street with the upside of its guidance in terms of the revenue forecast theres a quote here, guys, on the sandy feed. Com story saying, Great Services quarter unbelievable wearables quarter significant progress on iphone and offthecharts significant progress on china compared to the previous quarter looks like wall street is on board with that. Wall street is happy to say at this point, navigating the transition pretty well i mean theres been a real flattening of net earnings and revenues for years now, and the stock has done well. Theyre buying back a ton of stock. They have 200 billion in cash. That part of the story remains intact as they manage the lull in iphones. The eps coming in strong because of the buy backs for the wall street look ahead for tomorrow democratic debate tonight, and qualcomm going up tomorrow lets start with what to watch in tonights debate. Kayla has it for us. Reporter hey, the debate starts in about three hours. The ten candidates on stage have been touring the podium. Audience members are lined up around the block and you see supporters filling in with posters behind me. Here is what is going down tonight or what we are expecting. Watch for progressive allies Elizabeth Warren and Bernie Sanders to not only share the spotlight but share some flack as the rest of the field takes aim at what they see as far left policies that are socialist by comparison to what the rest of the field sees as a more capitalistic and centrist approach they will try to focus on performance over policy, despite the fact that many of these candidates have put out policy proposals on everything from housing to trade to health care in recent days but theres one reason why theyre focused on performance, and that is because so many of the candidates need breakout moments in order to command the dollars and the pull to qualify for the next debate in september. About half of the candidates that will be on stage here in detroit tonight and tomorrow will not be on stage again wil and sara. I hope they get off about trade. I mean it is in detroit, which is obviously an important environment for that i just wonder how much distance theres going to be between the democratic postures on trade Elizabeth Warren coming out with her plan this week, pretty restrictive in terms of the terms she wants to set to doing trade deals with the u. S reporter and clearly it is something that senator warren wants to talk about or else she wouldnt have timed the proposal release the way she did ahead of this debate. One thing that weve seen unifying this democratic field as wide as it is is trade, and there seems to be categorical agreement that the way that donald trump is going about it is wrong but we havent really heard much Details Behind exactly what is wrong about it or how these candidates would do it differently. We know senator warren wants to negotiate these trade deals differently, but we dont know exactly what her desired outcome would be we know that voters here in michigan feel that the tariffs at least are not working kayla, thank you. Meantime, qualcomm set to report results tomorrow. We have a preview. Qualcomm is expected to report fiscal q3 revenues just over 5 billion, 0. 75 eps. More than the numbers, this stock is still swung around buy out side pressure. They lost the latest round of ftc antitrust case the question is whether they will be able to delay penalties while they seek to appeal. Theres apple last week announcing its intent to buy intel smartphone modem business and take that business of theirs from qualcomm. I will have qualcomm ceo as usual on the phone but before the numbers come out to see how he plans to unit couldcounter t apple ahead tomorrow, 4 , it will have a helpful impact on the future. We have this little thing called the fed meeting. Thats right. So World Class Companies that are executing pretty well, i think was the afterhours message today but the market has figured out theyve done okay with the flat earnings stretch weve been in for the overall market and now, yes, the fed. I think the key question is what he says in the News Conference, right . It is. The rate indicate is built in. How much they want to say, look, this is it, were going on hold for a while i think the consensus is coalescing around the idea there will be and of course that News Conference will start on power lunch and finish here on closing bell tomorrow. We dont want to miss that were out of time. Thanks for watching. Fast money begins right now. Live from the Nasdaq Market site overlooking new york citys times square, this is fast money im melissa lee. Traders on the desk are tim seymour, chris verrone, and guy adami. We kick things off with an earnings alert on apple. Moving in a big wear after hours, the companys Conference Call is getting under way. Fullteam coverage, fast money friend gene munster is manning the call and josh lipton has the takeaway from the big quarter. A few things we want to get into as th