Transcripts For CNBC Closing Bell 20240714

Painting a rosier picture of economic fundamentals. Joining us is david zervos, looking sharp with the new haircut. David, what do you make of the fact that we have bounced back pretty nicely . Yesterdays reversal and some followthrough today what does that tell you . I think the trade tensions are definitely a story summer liquidity is the story. It was a pretty aggressive 200point plus move in the s p and the interesting thing from the price action for me is the rate market. The rate market had an incredibly large move. One of the largest weve seen in a while and it really hasnt come back off that much. So while stocks have rallied back, you would have expected maybe rates would have sold off a little more, risen a little more and they havent. So this is maybe telling you more that people are getting comfortable with a fed view that is cuts are coming and probably more cuts are coming than people had been nervous about with the meeting. You know the important thing in that answer, david has still got it theres been no sampson effect haircut. Hes still got the answer, still got the knowledge and well have much more of it. Lets focus in on the big stories were watching that. Bob pisani is covering all the action, Rick Santelli and steve losman bob, lets start with you. Wilf, quite a rally the s p 2932 where we closed on friday weve come all the way back, 2932 were essentially flat since the friday close thats about a 5 swing. That is an impressive rally. The movers today, its all the cyclicals. Chevron, exxon they were down 8 the last few weeks. Modest bounce in the banks jpmorgan was down 8 in the last week or so its bouncing a little bit, not a lot. Nike was also down 8 in the last two weeks thats come back a little more in the last several days of the caterpillar, some of the industrials barely bouncing. Caterpillar down 10 the last week and a half, a little bit on the upside today finally Everybody Loves utilities and rates. Im tired of hearing about it. The problem is, theyre small, 3 of the s p on utilities, 3 on reets, cant move the index with those back to you. Lets bring Rick Santelli at the cme group with a look at whats moving in bond world today. Bonds ticking higher today what do you make of it they held all their gains from yesterday but gave everything back today. Look at an intraday of 10s 84 billion in supply ended at 1 00 eastern were at 1. 78 plus were now at 1. 71. The rest of the curve is lower yields than we settled at yesterday. You can see one week of 10s there. You can call it stabilization, but still many are a little worried. You can see that in a yeartodate chart of the ty vix. Still hovering very close to 18month highs back to you. Lets bring in tobias, chief u. S. Equity strategist at citi tobias, have you been cutting guidance the second half of the year we did cut earnings estimates. We think its less about china, more about lending standards got very tight late last year, early this year. Theres a ninemonth lag in terms of the impact of the economy. It suggests that weve been safe for a month, weve got to cut these numbers and finally did. Its kind of interesting youre going to see in our opinion some weakness in the Economic Data which may support what were seeing in the bond market, may support the fed needing to go again in september. And then once we reset, we probably have a better opportunity for upside in the markets. Thats it in a nutshell really. Do market moves change your expectation for earnings no, not a whole lot if the market fell 20 , yes. One of the things we noted back in the Fourth Quarter of last year was that if you looked at the data on what percentage of the stock market was down more than 20 , not is the index itself down, but what number of constituencies, it was about 75 of s p 500 constituents were down over 20 . 45 were down 30 or more in their 52week highs. Thats where the fed has to get spooked and say whats the feedback loop. What do managements look at their stocks and say, oops, there must be something ominous around the next quarter. I think that was one of the triggers for the fed to do the pivot back late last year. We dont have that kind of pain in the market for, again Action Companies to change their views of the world or consumers to change their views of the world. So what does Earnings Growth look like in the second half of the year flat third quarter, up 3 kind of in the Fourth Quarter. Nothing horrific remember, people started the year with a much better view of the world than we are today on earnings earnings are far more important on the fed than in terms of where the trajectory is. If you look at fed rate cuts, if you look historically, fed rate cuts begin and the market goes down its only after several fed rate cuts do you start seeing stabilization in the equity market. David, whats your take as to whether these fed rate cuts can actually help with the problems the economy and the market is facing i think every time you get a fed rate cut, theres two parts to it. Theres the expectation of whats coming more and the actual transmission of the rate of the one thing we know is transmission has long and variable lag were still feeling i think many of the rate hikes from 2017 and 2018 today what theyre trying to do is get ahead of what might be on the horizon, and thats what this rate, this pivot and then rate cut are all about. So i dont think youre going to see an immediate effect from the rate cut unless you get guidance to the point where youre really pushing the market to believe theres a big sequence coming. Clearly jay did not want to do that at the last press conference. Were going to continue the conversation in just a moment. Meantime billionaire investor carl icahn was on Halftime Report today expressing concerns about the market. I am not telling you im bullish on the market at all i think that we do have a lot of problems with this market. You really have a situation where the markets are buoyed for reasons that dont relate to value. Its an interesting time i think theres certainly some very interesting opportunities but you have to worry about a fullscale recession Steve Liesman has been taking a look at the Economic Data for signs of just that, a recession. Steve, what have you found theres several global and u. S. Transfer indicators were looking at that are flashing yellow, raising concerns about a deeper concern in the u. S. Take the cash freight index. It turned negative in december and has been negative every month since a 5. 3 decline in june the shipments index has gone from warning of a slowdown to signalling an economic contraction. Similar to 201516 slowdown. And not as bad as the 2008 recession. Add to that the port of long beach container throughput oxford writing although we still think that a global recession is far from inevitable, we now expect 2019 to be the weakest year for global gdp growth since the Global Financial crisis. You can see the effects of the slowdown on u. S. Exports they subtracted a large amount from growth in two of the past four quarters, two of the biggest declines in export contribution to gdp since weve seen since the financial crisis. So undeniable there is an industrial slowdown in the u. S. And globally whether its a recession in the u. S. Depends ultimately on the consumer, whether they can remain strong, sara. All right, steve, thank you very much. The wall street Journal Editorial Board with a cautionary note writing mr. Trumps willienilly trade offensive could be a mistake that turns a slowdown into the navarro recession, pinning it on the president s trade advisor, peter navarro. Is that fair i dont think so. I think thats a little aggressive i think trump can pull it back if he needs to and has the fed as a backstop. So the game is being played. As ive written to a number of our clients the last few months, i think that as the fed pivots more hawkishly, you see trump escalate the trade rhetoric. He uses it as a way to nudge the fed back towards dovishness. It wasnt a surprise to me that immediately after the fed move we saw an increase in bellicose trade rhetoric both from china and the u. S. Do you think that will hold until we get another 25 or 50 basis points of cuts and then perhaps changes rhetoric back into 2020. Very much could be the case and it could also be how the market reacts to the guidance. What jay does on this september 89 meeting is important hes got to guide us for the rest of the year and that is its not going to be about 25 or what he does, its how he guides us into the end of the year his guidance last time really caused some jitters. I think it then caused the president to be a little more aggressive with the trade side. Its always hard to have this conversation about recession risks when i mean the base case for most economists is that were not heading into a recession any time soon. Jpmorgan put out a bunch of charts showing indications that were rising, steve said flashing yellow like freight. But less than 50 chance you dont want to talk yourself into a recession by talking about recession risks rising all the time, tobias we spend a lot of time on this people are very frightened of things like yield curve inversion, right the yield curve inversion usually leads a recession by 12 to 15 months, maybe even 24 months in the future getting crazed about it immediately is wrong what you can see about sending a sign of imminent recession would be a rapid resteepening of the curve after that inversion so if you were to see the curve invert and then immediately steepen, not immediately but a month or two steepen about 100 basis points, if you look at history, thats a signal recession is about to hit you. It could have gotten worse, but it is the sharp very rapid resteepening, almost as if the fed is saying, oh, crap, something is really hitting the fan, lets back pedal like mad and try to not necessarily stop it but mitigate the downturn. What about the international picture. The trade data out of china today was pretty strong, but Industrial Production out of germany yesterday was very weak. If we saw even eurozone specific downturn recession going into the end of the year, is that enough to hurt your outlook for the u. S. Or not . Not that much this is one of the great misunderstandings i think. Weve gone through every Single Company in the s p about 72 of s p 500 revenues are north american derived if you look at the component that goes to asia, particularly semis and semi conductors, its 69 but most of that is coming back in the form of a smartphone or cable box or Something Like that, server, all that kind of stuff, to north america and to europe for the most part so probably 75 of revenues of the s p are north american derived. Another 10 globally is from noncyclical businesses, food, beverage, tobacco, drugs, things like that. Now youre really getting down to 5 european real cyclical exposure thats not going to pull you it will hurt you at the very, very margin. Youve given us some things to worry about and some things to be okay with. Whats the upshot about what youre telling your clients to do our s p 500 target for 12 months out is about 3000, which is not that exciting another 2 dividend yield. So youre looking at 6 , maybe 7 total returning it isnt exciting but its better than a poke in the eye. That it is. Not by a huge distance, though tobias, thanks very much for joining us. Weve got 47 minutes left to trade. Were up 1. 6 on the s p almost positive for the week, which the nasdaq is now up fractionally amazing given the declines we had earlier. Still ahead well dive deeper into the bond market with terry duffy. Plus uber gets a pop today on the back of lyfts strong earnings now its gearing up for its own report after the bell. Well preview the key things to watch from uber. Heres a check on our data tracker. Weekly jobless claims fell by 8,000. And in china, wilfred mentioned exports grew at their strongest pace sincear mch, up 3. 3 versus last year. Dow is up 280. Driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. [student] my degree from snhu has helped me tremendously. lively music the flexible class schedules allow me to run my catering business and be a mom and parent. Breakthrough at snhu. Edu. [what about him . Lets do it. [ sniffing ] come on. This summer, add a new member to the family. Hurry into the mercedesbenz summer event today for exceptional offers. Lease the glc 300 suv for just 419 a month at the mercedesbenz summer event. Going on now. [ because im me byfrom the 5am wakers, this is us. To the 6am sleepers. And the hope this trip never enders everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a different kind of Wireless Network by auto connecting to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile. Its wireless reimagined. Simple. Easy. Awesome. 43 minutes left of trade the s p up 1. 5 . Russell is back up 2 . The s p and nasdaq having their best days in two months. Lets send it over to mike santoli for the market dashboard. Thanks. Here is what we have ahead for you. First, low conviction rate that is not conviction among investors heading into today bailed out by bond that would not be james bond, thats bond like treasury. Nearing a verdict. This market has come to an interesting point, maybe going to tip one way or another and small claims case. Thats a macro look at where we were in the cycle. We often look at sentiment on a thursday in part because theres a weekly poll. Sometimes its just noise and sometimes its steady. Today it was an extreme. There were 25 more bears than bulls. Its not a scientific poll but when it gets to the extremes its pretty significant. You can look at these other areas where it was and its more often than not closer to a low than a high in the market, so its not just going to be the beacon that tells you where the market is going. All else being equal, when people get panicky, especially on a 6 or so decline on the s p from a high, its an indication people are cautious. One other glimpse is the activity by Retail Investors in their 401 k s. This represents monday and it was a very, very high activity day. Thanks to Sharon Epperson for bringing this to our attention most of the activity was going out of stocks into fixed income. I dont think thats enough for this market to carry on to big new highs but it shows you that the market was spooked and part of what were seeing today is a reversal of that mini panic. David, whats your take on how much of a shakeout you think weve seen i think we saw a pretty big shakeout. Over 200 points in the s p very fast a lot felt very reminiscent of august 2015 when china let the currency go. They werent happy with the strength of the dollar the fed was about to lift off rates so there was a tighter fed than they wanted i feel like you brought all those china bears out so the twitter feeds of all the folks that love to talk about how china is going to blow up tomorrow started to blast off and currency wars. I think it does scare people china is this one entity we always have so much trouble understanding. It doesnt operate by the same market principles. When we see that currency move and its big, people see an eject button and they go and now it does seem that theyre kind of holding it together an it does seem like the trade rhetoric has died back down if we get a fed thats accommodative and jay does a good job on the 8th and 9th, maybe this is a catalyst for us to head up to the 3000 level but the idea that were going to have some big breakout to the upside seems like a pretty hard sell to me. This is under the radar but there was data out overnight from china on the reserves the reserves barely moved lower in july. They still have lower than 3 trillion of them so people that say theyre out of ammo or dollars is wrong and people who say theyre manipulating, thats wrong too because it shows theyre not using all that up. I think youve got the hong kong protests also all that together just is like, okay, i dont understand this, boom that could be a pressure point. Steve eisman was talking about that. The thing id say about that is if you actually see a loss of life of a protester, which we thankfully havent seen yet. As violent and as crazy as it looks to watch, typically you look back at history thats the type of thing that can change the tune that or the military coming in from china changes the tone immensely. After the break, shares of roku are up 300 this year, jumping 20 just in todays session. Well hear what the ceo said about whether tariffs could eat into reports. And big earnings after the close, including uber, activision and more. Dont go anywhere, were back in a couple in your family is different. There are so many of us doing so many Different Things. vo thats why verizon lets everyone mix and match different unlimited plans. Sebastians the gamer. Sebastian. This is my office. vo and now with more plans, everyone gets what they need without paying for things they dont. New plans start at just 35. The plan is so reasonable, they could stay on for the rest of their lives. Aww, did you get that on camera . Thanks, dad vo the network more people rely on gives you more. I felt completely helpless. Trashed online. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Welcome back to closing bell. Time for word on the street. Goldman sachs upgrading Dollar General to buy from neutral and raising the price target to 152 per share. The firm says in its coverage universe, Dollar General is one of the least exposed companies to tariffs on imports from china. Barclays initiating apple with equal weight rating and a 192 price target. The firm sees no recovery in the iphone business and expects growth to slow in services. And stephens upgrading roku to equal weight from overweight and raising the price target to 120 heres what rokus ceo said this morning about concerns of tariffs from china we and our partners are taking steps to mitigate the shortterm impact of tariffs, including relocating manufacturing. But for us the big picture and our tv partners build not just in china, they build around the world of the but for us the big picture really is that anything that happens doesnt impact the longterm potential of our business which is huge as the world shifts to streaming. Stocks surging again today up a further 20 . We had earnings of course last night. Its one of those ones that you kind of cant believe the bigger player has let it get to this size in the same way of netflix seven or eight years ago and looks hard to rein back. And we were just talking about whether you need it versus, i dont know, having a smart tv on an apple tv or a chrome cast. Again apparently people do. Every time theres a streaming service out, they buy new roku products. Its getting more advertising revenue as well. It isnt as defensible as someone that creates content but at the same time that makes it sort of easier, lower cost way to gain exposure to overthetop services and one of the reasons its done so well. Up 300 . In the Dollar General, they cite if Consumer Confidence deteriorates or something happens with the strong consumer, theres greater upside. Thats whats interesting coming from both directions too. Youve got that. If theres a slowdown you have some protection. But also what are we bringing back into the market at this stage with new jobs . Were bringing in more of the people that have had the most difficulty finding jobs in the last ten years i think as jay said in a couple of press conferences, were bringing in some of the weaker parts of the economy finally coming off the sidelines thats going to bring more people in the Dollar General space into the shopping arena. So i think you get it coming from a continued growth in payrolls of the type of person thats coming in as well as if theres a swish down, youre going to push people back into that space as well. Do you know the fed chair personally youre very jay this, jay that i like it. Working at the fed the couple of times i did, both in the early 90s and during the crisis in 09, we actually did refer to each other by our first names. I worked for don cohn many years. I called don, don. Ben i called ben there was always a camaraderie that was there theyre just people, like us. Another guy trying to figure it out. Like you. You were fed chair yesterday. In my dreams. On my cake it was the best cake ever. I like it jay, if youre watching, come join us. Still to come, we have a lastchance trade and david is looking at a way to play the low rate environment up next, terry duffy joins us to discuss the wild action in the bond market this week and r s sissitmes olatily an fohibune going on. Ve done all ofc read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. Welcome back weve got just under 30 minutes left to trade. Were higher about 280 points on the dow. Here are the key things driving todays rally. Treasury, oil yields are rising. China steps back as there is a deescalation of the recent tensions and new data in the u. S. And china painting a rosier picture of economic fundamentals that weve seen recently. Time for a cnbc news update with sue herera. Hello, everyone heres whats happening at this hour the democratic mayor of dayton is joining forces with the republican governor of ohio to push forward legislation to hopefully cut the chances of another mass shooting from happening again. Im very excited about the way that the community has come together in a nonpartisan, post partisan way and, you know, the best example is the legislation that governor dewine, 17 points governor dewine announced on wednesday. I think were going to set a good example for other states. Were going to do some things that actually matter and that will save lives. Im looking forward to that discussion over the next few months as we work our way to get this worked through the state legislature. A new york city judge rejected actor cuba gooding jr. s request to have his groping case thrown out. The judge said in a written ruling the conflicting accounts of the accusation against gooding should be resolved at a trial starting on september 3rd. You are up to date thats the news update at this hour sara, ill send it back downtown to you. Sue, thanks under 30 minutes to go before the close. Lets go back to mike santoli for the second dashboard. Weve been talking a lot about how the stock market seems to have been reacting to this very violent decline in treasury yields and essentially saying that the bond market was scaring the stock market because yields were getting too low however, the backdrop of low yields is it flatters the valuation of equity. If you compare the valuations of stocks versus bonds, stocks start to look better on a relative basis as long as the yields are not collapsing at a rapid rate lots of ways to calculate this but this is the inverse of the price earnings multiple compared to the 10year treasury yield. What you see is obviously we are in the upper part of this range right here as yields have gone down and the p. E. Of the stock market has moderated that, Everything Else being equal, seems to make stocks a relative bargain theres two ways this can be rectified. If yields going up, that premium will go down on its own. Also theres no correct level because for the entirety of the late 90s, stocks didnt necessarily look great compared to bonds but they performed very well i think you have to look at it in a certain range of this bull market and were getting up to that higher equity risk premium so, therefore, its a little more of a relative valuation under equities right now. Bond yields rebounding after a volatile week. Joining us now to talk more about the bond market, terry duffy, chairman and ceo of the cme group. Terry, good afternoon to you thank you for joining us. Good morning, wilf. Thanks for having me and happy belated birthday to you and sara. Thank you very much we appreciate it lets talk about this bond market volatility. You must be loving it. Well, theres volatility thats good and volatility thats bad theres a lot going on in the world right now thats having a major impact not only on bond prices but on agricultural prices, Precious Metals and Everything Else. But, yes, the activity at cme in the month of august traditionally a very slow month with europe basically being on holiday, but weve been very active were sitting on 142 million open positions and that represents close to 20 trillion of risk on the books at cme group. So yes, you look at the 2years versus the 10years week over week, trade is up 13 on the 2years and up to 30 higher on the 10years so theres a lot of people trying to understand where the bond market should be. Also when you look at the european debt being at negative rates, people are converting euros into dollars an buying more of our debt so its something that continues to go on here and were helping manage that risk. Terry, youve been through so many cycles and seen rushes of bond buying before how does this one feel to you, this sort of wave of money thats going into bonds just when we thought, i dont know, a few months ago that the great bond bull market was over this time for real . Yeah, for sure. No, youre right, sara, thats a great point. When you see three Central Banks around the world between new zealand, thailand and one another cut their rates all at the same day, people get concerned. Theres always a flight to quality and the u. S. Has been a flight to quality for our debt were seeing participants come in here kind of like ive never seen before, especially this time of year so its a pretty interesting phenomenon that were seeing going on i think its reflective in our numbers that people are managing that risk. So whether the great bull market in bonds is gone or not, im not quite sure, but it certainly is active. Terry, you mentioned the slew of negative rates around other parts of the developed world is it plausible in your eyes that the u. S. Could go negative too at some point in the next year wow wow, thats a question thats been bantered around, wilf, as you know for quite some time i think it would take a lot more than just the German Economy or the japanese to be negative for the u. S. To get there. Theres still a lot of other countries that are not negative yet, so im not i wouldnt see that in the cards in the near term. But you never know i didnt think rates would be here sara brought up a good point a minute ago we thought the great bull market was over and here it comes roaring back again in bonds. Its hard to make a prediction like that. Im curious whatyouve seen in the agriculture pits, terry, with china making the move to suspend ag purchases from the u. S. How active its been and what kind of price action youve seen a lot of different fluctuations, sara, youre right. And i think when you look at the u. S. Exports to china in 2017 for farm products, there was about 20 billion of exports out of the u. S. To china last year was about 9 billion and now with these recent announcements, i think people are very, very concerned in the Farm Community about their future clients i mean theres nothing worse than uncertainty or the rules of the road as you know, especially for the Farm Community so this is a very, very large issue. I dont know if these interim bailouts by the government to offset some of these risks is good or bad. I think the farmers dont want the payouts from the government, they want to have certainty on trade. So were seeing a lot of people manage that risk in our agricultural markets in corn and soybeans now, soybeans, strangely enough, was down week over week where corn was up in trade so its a bit of a phenomenon going on right now, sara, but yes, people need to manage this risk in the Farm Community, after the weather that weve had in may and june, theyre finally getting some crops in. You had the announcement coming up by the chinese theyre going to halt off imports of u. S. Ag products thats just not good for the american producer. Terry, i want to ask you about consolidation within your broad industry lse just closing a deal for ref refinative do you expect more consolidation . Its a great question but weve been very fortunate here at cme we did major transaction in 07 and 08 and then we obviously just closed our transaction with the Nex Corporation out of london were integrating that right now. Were laser focused on that integration. So were going to keep focusing on that and our core business for now. When you look at whats happening with lse and the announced deal the markets seemed to like it a lot. Well have to see how the authorities take a look at that transaction to see if theres any overlap. Otherwise it looks like a fairly compelling transaction from lses standpoint. Finally, terry, do you feel like people lost interest in bitcoin as the price fell but now its back on everybodys radar. It sort of zoomed up. It sure is. From the recent volatility for whatever reason. What are you seeing in futures and what have you got planned there . So were looking at a couple Different Things there, sara youre absolutely right, we have seen the price back up over 11,000 in bitcoin. What i think is interesting, if you look at the precious markets, like gold especially, youve seen the rally coincide with the cryptocurrency, especially bitcoin go together so that is very interesting to me but on the crypto space itself, one of the things that we are looking at is potentially putting options on our bitcoin futures. We think that that could be a very positive offering to bolster the overall Crypto Market so thats one of the things were looking at you know, this is one of those Asset Classes or historic commodity that we want to take a walk before we run approach. So were being cautious. But at the same time its not going away like some of the naysayers said it would as little as two, three, four, five years ago. Terry duffy, thanks for joining us cant wait for those bitcoin options to roll out, right thats going to be fantastic. The 100,000 calls. 20 minutes to go and heres where we stand in the market were up more than 300 points. The comeback continues and its looking stronger s p 500 up 1. 7 . Nasdaq surging 2 on the back of yesterdays tremendous rebound in stocks. Shares of kraft heinz, though, not so much. They have fallen 37 this year well look at why the stock dropped again to new alltime lows today. Plus were counting down to ubers earnings after the close. The stock down 5 since going public up strongly today. Much more on that to come. Dont go anywhere. Welcome back we are 16 minutes away from the close, at session highs as well. The dow getting a little leg up in the last ten minutes, up thr350 opponents now or 1. 35 the s p is up 1. 8 and the nasdaq up 2. 2 both the s p and nasdaq now in positive territory for the week as a whole now the dow only down half a percent for the week lets check in on some individual Market Movers zillow on case for its worst day of the year. The stock under pressure due to a drop in guidance from the companys premiere agent business its trading down 16 . Kraft heinz falling to new lows on the heels of earnings this morning the Company Reported a earnings beat but revenue miss. That stock trading at new lows that doesnt even tell the half of it. They cant release results yet pause theyre dealing with accounting issues. Its a company that has really struggled to turn it around, unlike a lot of other food and Beverage Companies you can go kraft heinz versus consumer staples, versus mondeles they have gone in opposite directions i think its a real black eye for 3g. And warren buffett. And warren buffett, who still owns a big chunk of the company. Also, last time around one thought maybe they were trying to kitchen sink it here so they can come out of it. Every quarter is a kitchen sink. To have this so soon afterwards, its astonishing. Its really hard to turn it around some point to the portfolio of products, the mac and cheeses, the kraft dressings, the jellos. They need the impossible burger. They need fake meat a lot of these companies have spun off underperforming brands like campbells soup and to invest behind innovation and behind new kind of bolton acquisitions and they have not at all. The accounting investigations mean the share price reaction is always going to be more pronounced lets get to a market flash. Serepta is just reopening after being halted its a bit of an odd story a safety issue had been detected in this fda database around its gene therapy still being tested in Clinical Trials it was flagged by an analyst the stock drop was halted and we were to sort out what was going on they have just put out a statement saying it had been erroneously submitted to this fda database, which deals with drugs already on the market. So it was a bit weird this was reported on an experimental drug essentially said that the episode resolved quickly and their data safety monitoring board recommended that the trial continue without stopping. So sarepta is recovering a lot of what it lost but its still down about 7. 5 . We will bring you any more but they are saying this was not a big safety issue it happened in a trial, but the trial is continuing. Wilf, back to you. Thanks very much. Theyre still down 7. 4 but off the lows of the day. 13 minutes left of trade we sit near those session highs or at them, 350 points or so higher on the dow. The nasdaq and russell up more than 2 . Up nex yr sthae ade. T,oulacnc ers. [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. 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Com for a prospectus containing this information. Read it carefully. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. There are about ten minutes left of trade. David, what have you got for lastchance trade . I like the reets. They symbolize a risk on trade with a rate view combination its a risk parity allinone trade. I like the lower rate refi story. I like the structure, i like the dividends they pay out, the Tax Advantages they have someone earlier in the show said im sick of hearing about utilities and reets. Bob pisani. Utilities are much more like a bond i dont think you get the same risk on. Its much more like an equitylike product. Utilities are just basically glorified bonds. In terms of the other options linked to yields, is it just the typical sectors or are you pick individual stocks out purely because of a dividend yield . I think youve got to like the higher dividendpaying reits. Theyre sifting through a lot of opportunities. This Real Estate Market is not a crisp market theres a lot of pockets of serious weakness new york, california, places with the tax law changes. Retail . Yeah, retail obviously in the commercial but its got enough so that smart managers have a lot to play with. So i think you can bet on some smart managers in that space its not all a commodityized world. Uber will be reporting after the bell lets get to deirdre bosa. Reporter last night lyft raised the stakes for uber improvement across a number of key metrics. Even though uber is far larger and more diversified, investors will wanting to know its at least on track to profitability too. Losses will be eye popping the street expects 3. 4 billion in net income loss that is, but remember that includes iporelated costs. Still total losses for the year expected to come at at more than 7 billion they are expecting a loss per share of 3. 12 that would represent growth of about 20 . Back to you. Thank you weve got eight minutes to go before the close up next, were covering all the gl othmaetn r closing countdown. The dow is up 380, well be right back you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Four and a half minutes to go of the session. Time for the closing countdown mike lewis, good to see you. What do you make of the bounceback that we have the s p and nasdaq higher for the week as a whole i guess its not surprising we saw the systematic deleveraging that really caused most of the weakness it was a ton of supply estimates are between 50, 60, 70 billion. But the traditional investor classes that we said like we noted, because protection was so much higher, really werent very active so when you get down to those levels and then you have positive news from china that theyre not looking to engage in a currency war, you get Short Covering corporate buybacks are coming at a blackout they were hesitant at market highs to really be buying back a lot of stock, but that stuff has accelerated recently too so a combination of corporate buybacks, out of bonds into equities some gamma positioning from etf and options land and a lack of supply we saw, its not totally surprising. So given thats what youre seeing in terms of the buying action, what does that tell you about the sustainability of it or the vulnerability of it to go back into spirals like we saw on monday, which were pretty scary . Thats a good question. Ultimately the system has delevered significantly, so the risk that that happens again is now lower. In fact some of the trend following system guys could actually be buyers if we move up a little higher. The corporates are not going chasing but will be happy to buy dips the action that were seeing on our desk is traditional investors selling into this rally. I know its been popular to call up moves an down moves my guess is we consolidate a little bit positioning is lighter and headline stuff is more even. So whereas people were very things were priced to perfection before, now you realize there are some issues in the system. I think ultimately well trending sideways for a little bit. Mike lewis, thank you very much lets go back to mike santoli for the third dashboard. I wanted to put todays rally, which is definitely impressive but not maybe decisive just yet into some broader perspective. Look at a twoyear chart of the s p 500. You see where weve come up to significantly were basically right below where we topped out in may so youve recovered the kind of worst of that whoosh down from monday but were right back to fridays closing level also back to the 50day moving average. Heres a closer look at the last ten days weve seen here obviously we were steady, steady, steady at the highs, that big drop and now back to the friday level it does seem as if the market has a very teasing way of getting right back in a big bite to a fulcrum point thats going to determine whether in fact well recoup all the losses or not. Maybe thats tomorrow business or we will have to see lets get to Rick Santelli in chicago. Thanks, mike. Today we completed 84 billion in supply with 19 billion 30year bonds. The minute the auction ended, the intraday of 2 dropped four basis points the rest of the cousurve is low on the day 10s dropped 6 basis points 12 years, the lastest 10s to 2s, its now at 10 basis points. Hasnt been there since mid2007 bertha, big day on the stock indexes. Big day the nasdaq positive for the week amd surging on the issuance of its new server chip. Some of the others include microsoft and a couple of names today that are higher on better earnings me mercadolibre over to bob. Bertha, stocks were oversold. Bonds were overbought, finally reversed, about time better china trade data helped alleviate Global Growth concerns quite a rally since the monday bottom in fact we have closed the gap with the friday close. Bond yields have risen off their lows and chinas currency has stabilized chevron finally bounced. Oil rose on reports saudi arabia was considering all options. Bank stocks also saw modest yields reversed. And theres the closing bell Dow Jones Industrial average closing up 363 points, s p 500, 2938 good afternoon welcome to the closing bell. Im wilfred frost. Im sara eisen along with mike santoli best day for the s p and nasdaq in two months as the recovery continues, wiping out the sharp declines for the week that we saw earlier for all the major averages s p closing up almost 2 , the nasdaq gaining 2. 5 the dow up 1 spok. 4 it was led for a change by energy. Also all higher by more an a percent, a lot of them higher by more than 2 also seeing the vix drop quite significantly, now below 17. 25, yields picking up. And oil as well dow chemical, best performer on the dow. Were watching uber and a slew of other Companies Set to report in a minute well bring you those results as soon as we get them. First up, lets talk about the market today and this comeback ian weiner joins us, david zervos is still with us. Mike, it was a pretty broadbased gain the question is how safe is it yeah. Just how trustworthy the move is this market does have a habit of once it gets a little tension release from the bond market or all clear, you do get it back in a big chunk at once. I do think the market has, as i was just mentioning, got itself back to this Decision Point where there was a little overshoot to the downside. You absolutely had a pretty sharp swing in sentiment to the negative side. A lot of hedging and downside positioning which i think has gotten unwound a little bit. I do think for a little while well probably trade along with bond yields and currencies an see if the macro story gives equities permission to build on this or not. Ian, do you buy this rally . Not really. I think youve got to be selling into this rally actually my sense is given what ive seen on tv and talking to investors, its actually gotten a little lay sai fair about china so in that case id rather be selling into rallies and taking some exposure off the table to prepare for the fact that the chinese, if they decide to peg their currency a certain way, can swing our futures hundreds of points. So that makes me feel like ive got to take a little risk off the table here. It brings up, david, the fundamental reason why we were here, why the 700point plunge chinas currency,s tod s kescal tensions has anything changed that gives you confidence to buy into this rally . They sort of stopped. They didnt go aggressively. It felt like there was a chance they could but i would also point to one other thing that rick mentioned in the bond report, which is the 210 yield curve is at its lowest level since 2007. I think just under 11 was the previous low and now were at 10 youve got to watch, its not negative, but the bond market is not telling you everything is great. We talked about it earlier in the show for the amount equities have come back toward the highs, the bond market selloff has been really minimal this bond story is low an staying low. Thats not to be a little bit that can prop up valuations. That can mean so many things. It can mean more fed cuts, the ecb easing. But the fact that its inverting more, if it was doing with a steepener, id be happier. But the fact that its doing it with an inversion gives me a little pause its great for valuations, its great for the equity risk premium story, but i dont like that inversion continuing. The steepener is a hugely popular trade. Its a terrible side for anybody with a pension its a terrible sign for financials so this march towards negative rates, which i do think happens in mid2020 is a real issue. Its not as simple as well just inflate assets because look at the europeans. That went the other direction. They actually kept money in the bank because they thought things must be really bad if theyre doing negative rates so i think we need to really focus on the negatives as opposed to thinking its just a big asset bubble that continues. It might get there, but i do think its significant were seeing a lot of this extrapolation to zero, just assuming were headed there. It happened in 2016 too, the last time we all had this kind of shock effect from negative european bond yields and things like that. So theres no saying that the bond market is on a smooth path to zero at this point in terms of yield. Lets throw another view into the mix carl icahn was on the Halftime Report and gave his take on the fed and cutting Interest Rates i i think the fed has got a lot of different pressures on it i honestly think including ones from the president. Yeah. And look, im not going to get into politics or anything like that, but i think that lowering the rates is just like, you know you know, you have a bad headache and you take the aspirin and the headache doesnt go away. In other words, i dont think lowering rates is the answer i guess to the point, david, weve been discussing for a while, is rates the fix for some concerns on the economy that are largely trade driven i think ive seen carl say that, you know, maybe 100 or 200 times or various points of the last ten years and i love him to death, but hes not a big fan of using Monetary Policy to get a kind of accelerator effect look, im a believer in Monetary Policy i think it is very effective. David, excuse me. Im going to interrupt we have uber numbers deirdre bosa has got them for us. Reporter uber shares getting slammed in the after hours, down nearly 10 because it came up short on revenue an gross bookings losses were also worse than expected at 4. 72 a share. However, adjusted ebitda was 646 million loss versus 970 million loss expected. Revenue grew just 14 year over year short of the streets expectation and far short of that 72 Revenue Growth that we saw from lyft yesterday. Uber reporting 3. 17 billion versus 3. 16 billion estimated. Gross bookings looking a little light here 15. 67 billion versus 15. 82 billion expected the ceo echoing what lyft said yesterday, though, talking about an improving competitive environment in ridesharing. But remember uber eats makes up a large part of that core platform and he noted that food delivery, that environment remains tough. Also, regarding profitability, key for markets, youre seeing the stock get hit. Heres what he told us he said, im going to quote him here he said we think that 2019 will be our peak investment year and we think that 2020, 2021, youll see losses come down i think our breakeven is something that we can push the company to break even if we really wanted to frankly he also said no doubt in my mind that the business will eventually be a breakeven and profitable business. So eventual profitability is what hes saying certainly not as clear or certain as what we heard from lyfts executives yesterday who told investors that last year was peak losses. Well see if hes a bit more clear on the call but certainly investors will want to hear more. Yeah, thats a shortfall and thats a huge move uber down 11 look at that sharp drop, mike. This is a company that has not built up really a lot of good will or really gotten the benefit of the dow or earned it from the street so obviously its got to reprice lower. See if theres another crop of longterm true believers in the big picture story that can buy it up here but it doesnt do anything to counter that impression that in fact maybe they waited too long to come public. Lift yft is down a couple of percent so interesting to see lyft give up its gains despite the fact that they have outperformed this quarter. This looks like a uberspecific problem. You dont know if its going to be a lasting reaction, but clearly just the idea that this was a very long runway growth story for both companies is being challenged. Well come back and discuss uber in the show in just a moment first lets get to cvs numbers. Julia boorstin has them for us. Cbs beating on the top and bottom line reporting earnings per share of 1. 16 revenues also coming in better than expected at 3. 81 billion, thats 100 million more than analysts projections. The ceo does not give us any new specific numbers about those streaming services, but he does say that cbs all access and showtime continue to perform strongly, helping fuel a 13 increase in affiliate an subscription fee revenue also saying theyre on track to reach 25 million subscribers by 2022 also reporting that advertising grew 7 and they have continued mow mea momentum cbs shares unchanged in afterhours trading. Back to you. Weve got another earnings alert on drop box. Deirdre bosa has those results for us as well hey, guys, this is a beat on the top and bottom line. Weve got 402 million on 10 Cents Per Share adjusted, so that is coming in above expectations you saw a little pop from the stock but now trading around flat this is another quarter of decelerating Revenue Growth, paying users 13. 6 million compared with 13. 2 million last quarter. Heres a bit of a disappointment rpu 120. 04 cents. It went public at 21 and its trading at 21. 35. Back to you. Weve got another one now on activision blizzard. Josh lipton with that. Activision reporting eps of 38 cents versus expectations of 26 cents revenue of 1. 21 billion versus expectations of 1. 19 billion so beats on the bottom and the top. The q3 guideness lighter than what analysts were looking for the street was at 40 cents on 1. 36 billion. For the year they do slightly race their eps forecast. Theyre calling for 2. 15 on revenue of 6. 3 billion. The ceo in a statement to cnbc telling us the early response to call of duty modern warfare has been the strongest weve seen in years and we have a number of exciting announcements to come, including the largest postlaunch content pipeline in franchise history. Were also bringing call of duty to mobile as well as the professional esports landscape with the upcoming call of duty Esports League in 2020. In terms of engagement, theyre saying total hours played in call of duty rose double digits year over year ac activision 327 million active users. The Conference Call kicks off at 4 30 eastern back to you. All right, josh, thank you. A mixed bag there. Take your pick, mike. There is a mixed bag. Just to pickup on activision, it could just be from what josh said a reiteration of guidance for the full year after having beat this quarter quite a bit. So by extension maybe its a little bit of a moderate view going ahead in terms of what the rest of the year might be looking like the stock is kind of in the penalty box here obviously they have had trouble following the fortnite emergence. I also think its just not cheap. Its still 20 something times earnings so thats maybe why its not catching fire. Ian, whats your take on the uber numbers, given lyfts success last night i have yet to find one person to explain to me how this company will ever make money either theyll have to raise prices on people or pay their drivers less, or both. But to me it just seems like a business that is just going to be in secular decline from here probably over the next three to five years so i dont really understand what the bull case is. I wouldnt be buying it. Y wouldnt buy lyft either the only reason these companies have survived is because rates are as low as they are and these companies can continue to get access to capital. But the numbers and the money theyre losing is just staggering staggering to me. A lot of people said that about amazon back in the day as well, ian. Yeah, but amazon actually has products that everybody in the world uses so does uber. I take like two ubers a day these days. You live in new york city. I cant walk that much. Nobody was reading two books a day in the 90s when amazon came out, right . No, they werent reading two books a day but amazon actually sells products all over the world at this point. Uber is not going to have that kind of reach and theres not the same barrier to entry as there is to amazon thats a fair point, though, mike, youre seeing lyft perhaps this is more of a benefit to lyft in terms of they have taken a bit of share. Uber has missed on the gross bookings theres a currency impact there too. Uber is much more international than lyft. But either way, if they are rationalizing competition, this is a small positive. Its a small positive we have to keep in mind, though, the bull case on this, or the bestcase scenario is over many, many years i dont know that were necessarily going trade in a lasting way off of basis points of market share in a given quarter. Well debate uber later david, generally, whats in the drivers seat . It feels like its much more bonds than earnings right now. But overall earnings have been pretty decent. I would say, especially relative to expectations i think that mixed bag was actually an okay mixed bag it feels like if its a miss, its kind of very micromisses, meaning its a specific story, its not a macro story or something about the environment thats causing it, its an individual Company Issue yeah, we really didnt get a lot of that this earnings season except maybe the industrials and energy still. But i think the story is that earnings probably came out better in general than everyone had thought. Now were taking discount rates to those earnings that are 30 to 40 basis points lower than they were because the bond market just rallied so it makes sense that stocks have popped back but is it a fundamental change or is it a reaction to the bond market and i think the real story here is that stocks are rallying not because theres some big growth story thats coming, but were just looking at them relative to a different pricing in the bond market thats a big difference about how sustainable it is. Before you go, we have to ask you about the biggest story of the day, which is trump tweeting again on the dollar, bashing the Federal Reserve again. I say its a big deal because he blatantly said it in a tweet today. You would think as the american president i want a strong dollar i dont. No. But hes been very clear about that all the way back to his election campaign. Hes not a strong dollar guy apparently it was true. So can he do anything about it he could intervene. He could intervene larry said i think on this show or one of the shows that im not going to do that, which makes it even more likely that hes going to do that because he loves to do things that peoplesay hes never going to do. I think it fits him to a tee its throwing billions of dollars at something that he actually can do through the Exchange Stabilization fund. Will it matter probably not but you have a 100 billion fund with a lot of dollars in it. If you want to mess around with it, you can. And you can also figure out ways to lever it. What would that do . Would that get stock investors and everybody else nervous i think actually even though it might initially bow a weaker dollar, youd see stocks go down, thats my guess. I dont think hell use it with the china battlebecause youre not going to buy rmb but if it comes to a battle with the europeans, we can definitely buy europe and make the euro stronger as a way to kind of sort of send a signal to the germans. Maybe make it stronger. It would be fun to watch. Id love to see it fantastic for markets. Thank you for joining us. Thanks for having me. Still to come, uber plunging after reporting a much longerer than expected quarterly loss finding out if theres more trouble ahead for that stock welcome back weve graduate bre got breaki news broadcom here making it official, announcing its going to acquire the Enterprise Security business of semantech for 10. 7 billion in cash. They expect it to close in broadcoms First Quarter of fiscal 2020. They also reaffirm fiscal 2019 revenue guidance the ceo saying in a statement here that m a has played a central role in broadcoms Growth Strategy and this transaction represents the next logical step in our strategy he buys companies, expands his portfolio. Bought brocade, ceo technologies i did talk to stacy who covers broadcom and he thought this made strategic sense he said the enterprise unit of semantech does face a whole lot of competition from crowdstrike, from proofpoint among others but broadcom is making the play here buying that enterprise biz, 10. 7 billion in cash. Back to you. Semantech resumes at 4 45 were told josh lipton, thank you. Its been a busy afterHours Earnings session uber reporting a much longerer than expected loss, getting hit pretty hard after hours. Cbs, activision and dropbox all beating wall streets estimates. Lets get back to deirdre bosa for more on uber. We have some more comments from ubers ceo on the back of those earnings asked about that shortfall in revenue and gross bookings, he said, quote, the developing markets develop and the law of large numbers at some point catch up with you. He also said the most fundamental measure that he looks at is actually unit growth by that measure he says companies at our size would kill for it now, in terms of broader business efficiency, weve been talking about this price wars easing he did say that the ridesharing business is becoming more rational, but that in the eats, their food delivery business, theres a lot of capital chasing a lot of growth. He says that he doesnt expect that business to be profitable in the next year or the year after frankly. Guys thanks very much for that companies of his size you could say should also be profitable would be the pushback. Lets bring in dan nyes and tom white. Good afternoon to you both dan, to you first. How bad is this given that lyft looked strong yesterday . This is definitely a gut punch for the bulls. When you look at lyft, it was expected this was going to be a beat on bookings and revenue i think it just shows pressure on international as well as on the eats business. Fundamentally right now the big question is can they continue to gain share with whats happened with lyft. Youre seeing that in the market. Is there a path to profitability as these losses widen . I think for the next few years this continues to be really an unprofitable model thats the issue that many investors have with it underlying it comes down to can they penetrate today its called a 2 to 3 penetration rate the 100 million users is a positive but this is a company, Second Quarter coming out of the box for this to happen, this is a jawdropper. You look at lyft yesterday, makes it look that much worse in light of what you saw from lyft last night. Tom, do you agree, jawdroppingly bad were neutral on the stock, but i would say peeling through the press release, its not all bad. If you look at some of the fx neutral trends, it looks like Growth Trends are a little more resilient than immediately obvious on the press release for us what it highlights is this company is fighting so many battles on so many fronts in so many very competitive categories, its not only hard for investors to forecast what financials look like but its pretty tough for the Management Team to actually give reasonable guidance to the street they have said that if some of their competitors and some of these emerging markets are going to act very aggressively promotionally, theyre going to respond. That just creates a situation where i dont want to say its uninvestable as a stock but its probably best for longer term believe believers. Dan, where to from here is there anything they can do to modulate the Revenue Growth rate you talk about fighting all these battles. Im also wondering what the embedded implied value of the eats business is when you see that industry is also in tough shape and door dash buys caviar from square at a valuation thats not that great. Lets call that a 18, 20 billion business for them, tom talked about it, theyre juggling a lot of balls right now. They need to get on the Conference Call and give stwe investors comfort. You have comfort in the second half going into next year. Right now management really lost credibility and thats really going to be the key to how they handle this call and hand holding because right now the bulls are going to be real frustrated. And its not just the startup founder thats never been tested, he has a very strong track record at speexpedia. This was an exciting ceo selection so your point on credibility is interesting. Especially with whats happened with the chief marketing officer and others leaving. Its all going to be on his shoulders. So you win when the stock goes up, you lose when it goes down thats why right now more and more pressure on him to prove that he can take this. They call themselves amazon transportation to that next level. How much cash are they going to get through this year have we still got a good couple of years to sort this out . They have got plenty of cash. This company is not going to go away any time soon they have plenty of cash to continue to invest and grow. Can they modulate on pricing or revenues the north American Market is probably the only market they can do that. Thats the market where they have another mature and public competitor whos also trying to sort of demonstrate to investors that there is a path to profitability here a lot of these other international markets, particularly in the eats business, are competing with private companies who are flooding the market with private capital and so there i think theyre going to be a little more reactive. Whereas in north america maybe they have some levers they can pull to maybe try and get that market to profitability sooner. Tom white, dan ives, thank you both very much. Up next, well break down the charts to find out what treasury yields are saying about the risk of recession. Plus were just minutes away from cbs and activisions earnings calls well bring you the highlights on closing bell. Lets send it back over to mike santoli for the final dashboard of the day a day where we saw the best performance in the s p in two months baker mike, what have you got . Let me cook something up for you here small claims case im calling this now, this rush lower in bond yields obviously started people wondering if it was implying heightened risk of recession and all of rest of it. Heres one thing mechanically it has shown which is that the federal funds rate is so far above the rest of the entire Treasury Curve right now, and its unusual historically for that to be the case. This shows the percentage of all treasury maturities that are below the fed fund rate. When else was it like this well, 2007, not so great when the market is saying, hey, the fed has to cut and pretty quickly. And of course back here in 2000 as well. So its one of the prerecessionary conditions where the market is saying the fed is a little bit too tight based on where rest of the yield curve is now, heres that mid90s example or late 90s example that did not precede a recession. Lets look at todays data from the weekly jobless claims. It really doesnt show any indication of picking up the way it typically does ahead of recession. If you cant see the shaded areas, it has typically had a little bit of a pickup and were not seeing it. Maybe theres something going on demographically thats not going to show up in claims, but right now this gives you comfort that the domestic economy is not saying the same exact things athe yield curve is, guys. Mike, thank you very much weve got to mark down mikes birthday and bake him a cake. He did such an amazing job, i dont know that we could follow that. We could try. An his decorating skills are very good as well. It was delicious, by the way mine was a strawberry short cake its really good. It is time for a cnbc news update sue herera has it for us. Hello, everyone, heres whats happening at this hour. During a special Emergency Council meeting in el paso, police chief greg allen told members that the suspected gunman, 21yearold patrick crusius, will be prosecuted by both state and federal authorities. It will be a dual prosecution, u. S. Attorney is going to take a secondary role to the state of texas. Texas will prosecute first and then the federal government will do a secondary prosecution of the individual former fbi director Deputy Director Andrew Mccabe has sued the fbi and the Justice Department over his firing he was let go after a Justice Department Inspector General report found that he had misstated his involvement in a news media disclosure regarding an fbi probe he has denied any wrongdoing and on a lighter note, take a look at that that is thousands of rubber ducks which made a splash in the Chicago River for a very special cause. More than 60,000 were dumped into the river of the 14th annual chicago ducky derby designed to benefit the Illinois Special olympics supporters purchased the ducks for 5 each. Youve got to love chicago you just do. I love it when they turn that river green on sant. Paddys da even when they dont dump anything in its beautiful. Sue, thank you. You got it. Up next, vanity fairs bill cohan will tell us why he thinks cbs and viacom may not be done with deals once their widely expected merger is announced. Also ahead i asked the ceo of adidas about the fallout from the trade war with china. Theres going to be no winners if this were to continue, neither in china or the u. S. Or for that sake in europe the quicker that everybody understands this is going to pull everybody down, the better it is. Coming up, find out how much the trade war could impact his companys bottom line. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back weve got some news on j. C. Penney seema mody has the story for us. J. C. Penney has received notification from the New York Stock Exchange that it is not in compliant with the listing standards as its stock price is currently at 69 cents a share, which is below the 1. Keep in mind it is required that listed companies have to maintain an average closing share price of at least 1 over a consecutive 30 tradingday period j. C. Penney does have six months to respond thats the story, guys back to you. Seema, thanks very much mike, could be forced to delist potentially. It could. Although i do believe the company can do a reverse split, get the share price higher because the company is still in compliance with the other listing standards. So it isnt necessarily a necessary precondition of a delisting but it does show you this company is in very long decline. Its only got a 200 million market value, almost 400 billion million in debt. Can they ward off chapter 11 . I mean its a choice at this point it appears in terms of where the maturities fall on the debt but i think that has to be in the spectrum of probabilities right now as a lot of retailers with too many stores, too many real estate are in that position. Its been a busy afterhours session. Uber shares plunged after a much larger than expected loss and weak revenue activision, cbs and dropbox all Beat Estimates contribution investbs invest the longawaited merger with viacom lets bring in bill cohen who has written about what they could do and acquire as a combined company in the larger media environment. Bill, nice to have you with us here obviously the results dont really move the needle people are waiting for an announcement of the deal news. What do you know at this point about where they are in those talks . Sara, its all about the Exchange Ratio right now if you look at sort of my guide, the Exchange Ratio that they got to last time about 18 months ago at 0. 6135, if you look at this was the negotiations that were back then before it got nixed by les moonves if you look at where the two stocks are trading, theyre trading at about that Exchange Ratio, so it wouldnt really surprise me, frankly, given how this has been the longest running drama on broadway for the last few years that that is the Exchange Ratio that they basically ending up at because thats what the market is telegraphing right now so i think weve got to see what happens, obviously no announcement today. It had been rumored that it might be theyre obviously still working it out bill, if this broke down, these discussions broke down again, would this merger survive this time . Wilfred, i dont see this bogging down this time theres no impediments this time this is a company that is controlled by sherri redstone. Shes been wanting to do this for a long time. Its frankly just a matter, i think, of getting the legal niceties correct because technically sherri agreed last september to wait two years before National Amusements initiated any merger between these two companies. Obviously theyre saying now that these were not initiated by National Amusements but certain members of the board of cbs and viacom so its frankly a matter of getting the Exchange Ratio, getting it papered up, getting the opinions out of the Investment Banking firms and then announcing deal and so i think maybe theyre being deliberate maybe theyre making it look like the independent directors are running this process as opposed to anybody affiliated with shari at this point i think theyre all trying to make sure there arent any legal challenges to this deal once it gets announced. We should say its sort of technical, its how many shares each company gets in exchange when they actually do the deal, bill so whats the longer term strategic question youre asking and answering about what does a cbs viacom combo means for the industry and where it plays . So even after this deal, lets assume it gets announced and does happen, cbs viacom is still subpar in the land of the giants, right . In the land of the disneys and amazons and apples and comcasts. Cbs viacom is still subscale so, therefore, i think its absolutely Shari Redstones intention to continue her acquisition trail. I reported earlier this week that vice had been making overtures to cbs viacom and to Shari Redstone probably not the greatest time to do that but the deal would make a lot of sense. Its a private company and would bring a lot of millenial eye balls to cbs and viacom which excuse old on the cbs side and young on the viacom side so thats something that could be in their crosshairs despite bob backish saying hes not interested i think thats sharis call in the end. I also think Discovery Communications is a natural fit with this combination once it gets down the road its all about shari trying to get out. She needs to get out, so she needs somebody whos attracted by the bulk and the power and the range of a newly designed cbs viacom well, lets see if we get a deal first youre ten steps ahead of them bill, thank you for joining us and happy birthday day after birthday to both you guys. Oh, thank you thats so nice i guess we publicized it very well bill, thanks still ahead, the trade factors. I sat down with the ceo of adidas and got his take on the how the u. S. china tariff battle is impacting his business. Well share what he said straight ahead 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. They give us excellent customer otservice, every time. E. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. Semantech shares trading again after having been halted lets get back to josh lipton who has more on that deal. Wilf, broadcom making it official that they are going to acquire the Enterprise Security business for 10. 7 billion in cash they expect that to close in broadcoms First Quarter of fiscal year 2020 the broadcom ceo bought brocade, cea technologies and tried to make the play for qualcomm, but President Trump blocked that, citing National Security concerns semantech also reporting results, 43 cents versus an estimate of 33 cents 1. 25 billion in revenue versus a forecast of 1. 2 billion so beats there on the bottom and the top. For q2 semantech is looking for between 40 and 44 cents on the bottom line and revenue of 1. 16 to 1. 2 billion. Back to you guys. Josh, thank you another afterhours mover, drug maker amerron. They are down in the after hours saying that it expects a delay in the approval of an expanded label on its Heart Disease drug essentially it expected that new data from last year which had driven the stock up quite a bit at the end of last year would be incorporated into the label probably by september and the new data shows that the drug helps reduce the risk of heart attack and other cardiovascular events now the fda wants to hold an Advisory Committee meeting in november and it expects approval of that expanded label to be pushed back potentially until december thats why youre seeing amarin down 26 in the after hours. Back to you. Ouch. One company that is affected by the currency and trade wars, adidas, out with earnings today. Sort of disappointed the street. Europe was flat, china and the u. S. Were both Growth Drivers as was digital, reaffirming its outlook. The stock has been on a massive run, its up more than 40 so far this year. I sat down with the ceo of adidas and asked him today about the impact from u. S. Tariffs the biggest worry we have are not tariffs. It is a trade war or currency war between america and china. We do 25 of our business in china so devaluation of the chinese currency would have a Significant Impact for us. Its been more or less stable the last three months but thats one we believe nobody can win. Theres not a lot of mitigation we can do so we hope a certain amount of nor mality will come in and it will remain stable for the month and quarters to come. Are you supportive of u. S. Efforts to step in, call china out a currency manipulator, stop the yuan from weakening as a company that does lose competitiveness when that happens . We dont comment on policy but we dont think having a trade war, you know, a customs war or a currency war is good for anybody. So i would say differently theres going to be no winners if this were to continue, neither in china or the u. S. Or for that sake in europe. So i think that the quicker that everybody understands this is going pull everybody down, the better it is i havent heard anybody say this is a good thing thats happening right now. I wanted to switch and talk about europe for a moment, your home market, sluggish. Is it an economic environment . How sharply has Consumer Spending there slowed . So the Consumer Spending has been flattish in europe in the last two or three years. There is no doubt that brexit is very, very bad for the european economy. Ive said that many times when you and i have spoken. Right now youre seeing a further devaluation of the british pound towards the euro so we are not seeing great pickup of the european economy and we dont expect that either. What we are seeing is returning back to growth in europe as a brand and will continue to grow. Well start to grow again by the end of this year and grow next year but i dont have a lot of confidence in the european economy to pick up with the current climate that we have in europe. Finally, is kanye still the most valuable celebrity that you have putting out shoes hes probably the one with the greatest reach, i would say. Weve been extremely happy weve had with kanye in the last four or five years. Continues to evolve well we have a very, very exciting set of products coming out this year and next year so we continue to expand our business with great products for the consumer i he has added a number of celebrities recently beyonce is coming out later thi year Pharrell Williams is going to celebrate the 70th anniversary in germany kylie jenner has a new pair of adidas sneakers. What was most interesting was the fear of the currency war, not as much over the tariffs i asked are americans going to pay more as a result of the new tariffs that President Trump announced at 10 he said no, because none of what is sold here in america is produced in china. He said it is produced in vietnam, bangladesh, cambodia, other places thats on the adidas side. Obviously the industry has bigger problems because there are still plenty of shoes and apparel made in china. I was interested to hear what he said about brexit, the opening statement, as if it is broadly brexit hurts the sales he moved it to say brexit is not good because the fall in the pound means our sales are suffering and adidas shoes are becoming slightly more expensive in the uk in a relative sense, which i thought was an interesting different take we dont always hear on that front. Also i mean he has been highly critical of brexit throughout and just the pressure it is putting on the european economy. He doesnt have confidence that the european economy is going to pick up any time soon. It gives you a taste of a company dealing with the macro headwinds and dealing pretty well. I was going to say the fact that the focus is on macro as opposed to some competitive threat or the brand is having fatigue or something. Theyre doing well, gaining shares especially in the u. S. , it is nike and adood yidas, ande confirmed this, it is a twohorse race. The other thing coming into this very strong, over 40 up relative to the dax, it is incredibly strong. We think of it relative to the nike or the s p 500 but compare to the german index it has blown past the single digit gains for the german index. It comes down to nike and adidas, are they putting out innovations consumers are willing to pay for, despite what is happening with the rest of the noise in the world, and both companies stepped up their game and are doing that kanye is just a part of it, but a big part of it he confirmed he has the biggest reach. They also designed a great new arsenal soccer jersey. Somehow it slipped my mind to ask about. You have asked about arsenal in the past, so i appreciate it. Okay. Next time. Again, next time. It will be worth the price even if it goes up in price, if the pound goes down . Exactly up next, this afternoons biggest movers it was another big day of earnings we will bring you the after Market Movers when we come back. Up next, uber cut its after hours losses by more than half after a larger than expected loss we will round up all othf e action when we come back so you can save big. Get a nofee personal loan up to 100k. 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. 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. Lets take a look at how we finished the day on wall street. Strong day for the bulls, best day in two months, continuing the recovery we saw in markets yesterday, the s p jumping almost 2 , every sector ending in the green by at least 1 . Is that what you said . Energy in the lead on oils bounce, the dow closing up 371 points even the underperforming russell 2000, index of small caps got a nice 2 boost today. Lets check in on the after Hours Earnings report as we countdown to ubers allimportant Conference Call because shares of the Ridesharing Service lower after reporting a larger than expected quarterly loss and a revenue miss theyre down well, they pared some of the losses down. 4. 5 , had been down at much as 10 , 11 although activision issued weak guidance shares of fashion retailer farfetch plunging after lowering its outlook for a key growth metric, down 40 after hours in terms of the market rally today, we are actually at the high of the day as well for the dow and the s p. Yes. Which is encouraging an continues a theme over the last couple of sessions, even if theres been softness in the session we have kind of continued to strengthen throughout the afternoon. Yes, the last couple of days in particular it has shown resilience there the market sort of refused a couple of excuses to go down below tuesdays mornings lows in the past couple of days, so i think it was positive. It has brought the market back to this point. We arestill down 3 from the highs of july 26th, and we have to see if theres anything more than a technical reflex rally. Thats the thing. It came out today saying technical buying, you know, things got oversold. A lot of sort of price action instead of fundamental drivers. Yes. Behind the surge. It is true. And beware, we could go down again. It is true, and you have to be aware of that the problem is every real rally starts that way. It starts with Short Covering and people feeling like, okay, fine, overshot to the down side, i have to try to play for some reversion to the mean. And then comes where the real buyers step in and say, you know, theres fundamental value or theres relative value or the bond market is going to ease enough to let equities recover further. We have to see. We are out of time. Thank you for watching that does it for closing bell. Have a great evening. Fast money begins right now. Live from the Nasdaq Market site overlooking new york citys times square this is fast money im melissa lee. Your traders on the desk are pete najarian, tim seymour and guy adami. We begin with an earnings alert on uber, that stock hitting the skids after reporting its biggest loss ever, but uber is reclaiming some of the losses, down just under 5 now the companys Conference Call is kicking off at this moment we have fullteam coverage listening to the call. Fast money friend gene munster is manning the red