Transcripts For CNBC Closing Bell 20240714

We got a new stimulus plan and a rate cut from the ecb ahead of the feds meeting next week. Joining us in the next hour, were 130 points on the dow. The high of the session was up 170. Continuing a good week sector wise below that certainly different than the start of the week we had a big value rotation on monday and tuesday. A little bit yesterday giving it up a little bit today. Thats, i think, because he got that ecb news on the Monetary Policy which basically was in line but very accommodating for a long time. Welcome back the fbi reportedly opening an rates rallied because the u. S. Data investigation into myth real a the core cpi is the highest in capital. This session cofounded by peter thiel, thats pretty important. And i think that also the alleging financial misconduct. In a statement to cnbc. Initial claim story remains very strong as well i mean i think you have a the company sayings in a foiled rotation today but i think next plot by a selfserving week if we get less exemployee there is no allegations from any Government Agency or limited accommodating less dovish fed partners then well rally back into nevertheless our attorneys are in contact with government value. When you say less authorities to protect Portfolio Companies and partners to accommodating, less dovish fed against extorgs it behavior. Does that mean rate cut is not joining sus the reporter coming breaking the story, teddy sh i think 25 basis point. The commentary is that the data life from ricoh is not that bad and we have 30 i guess to recap. Thank you. The story itself, how we got here. Central bankers around the world sure, so u. S. Officials have that will be accommodate been talking with some people we have a lot to discuss. Close to the firm if recent lets focus first on the big months looking at what is going stories were watching on at myth real capital a the story mere at rick owe a lot of the ails are around financial misconduct u. S. Officials investigators, including the fbi are rooking into this firm, you know, this kayla ta is an early stage of the reporter for the white house investigation obviously we should say says theres absolutely no that lots of investigations interim deal with china and to be sure theres no deal at this dont actually end with indictment but right now they moment but sources who are close to the are looking into it. Sfo theyve been charged with talks tell me that theres a anything no, no charges filed so far detent happening so and what exactly does the behindthescenes. Theres a desire for misconduct relate to in your deescalation for u. S. And china. Article you sort of imply, for china they want licenses for huawei to do more business to suggesting takes fees when they u. S. And get access to the u. S. Shouldnt have been. Is that what you imply in the pork market with chinese hogs article. I dont want to go beyond what we report in the story. Inflicted with a breakout of the but there have been some african swine fever. Frustrated limited partners in they need u. S. Pork and could be the firm and some of the firm as making those purchases in the funds for a while who sort of coming weeks wondered how exactly the money on the u. S. Side they want to is being spent theyre asking questions avoid selfinflicted wound into the American Economy basically how this works for im told ambassador robert viewers is essentially, a lighthizer, the treasury secretary and kudlow also feel Venture Capital firm raises money and its meant to be spent keeping tariffs on 250 billion on investments but ultimately they can a in chinese goods is a general partner, investor can sustainable status quo going put the money where he or she into the election even as these thinks fit negotiations drag out on the tougher more structural issues and essentially the companys that are at the heart of why this trade war started in the second fund has had a slow pace first place but that getting back to that 250 billion level, of deployment by normal silicon so rolling back some tariffs valley standards that were put in place a couple meanwhile it takes in management of weeks ago and avoiding those fees. That could be the valuations are high a and dont want to prechristmas tariffs is key for waste it on bad investments. Those officials. Whether the midlevel talks to be fair there are some limited partners and other happening in a couple of weeks sources ive spoken with who say time or principle talks in they are thankful the firm has october can get there remains to be seen. A lot of new cycles to get been so parsimonious with through. A lot of things need to happen investments. Its certainly a rational but theres that desire and argument to defend some people feel one way, others thats whats moving the market today. Yeah. That tone definitely key to the another way. To that point, teddy, theres market today sound like youll be staying very busy for the foreseeable been a number of depart yurs future from mithril in the past couple thank you. The dow is on track for its months its a single selfserving seventh straight day of highs. Exemployee is their statement. Bob pisani has more. Is that your sense or are there reporter we are up but a different market today than a last few days. Whats back is the old momentum multiple contributors to. Im not commenting on the names. Source of the story. Paypal and mastercard and visa there were depart yurs youre are moving correct. Some tech names like the firm has a couple of leaders left including obviously mr. Semiconductors are back. Old consumer staple stocks they royan with his sister who is the were momentum. Chief Financial Officer we mention another person in the kimberlyclark is big. Story as well. Whats not moving is energy and tu but there have been a number of depart urts yurs and retail and industrial stocks ultimately in Silicon Valley you banks are kind of flat as well need people to spend the money they had a great run overall but and people in the chairs, right . But there have been there still the rotation still moving very well. Just want to highlight 3027 is have been i think at least six or seven depart yurs in recent the old intraday high for the years which is troubling to some s p 500. People who want to be people in were ten point away from that the chairs out there work working the circuit and making deals. Just to confirm what is the that was also at the end of big accusation they havent july we got an intraday s p chart. Invested sthir known fast enough. Thats what some limited what happened this morning partners believe we were all over the place they believe they are not vechg the money quickly enough, yes. Reporter were going up and down based on bond yields. Teddy, thank you for joining thats what move things. Us. Sure thing. Up next, your wall street last week we bottomed on bone look ahead, the key things every yields wednesday morning as yields started to lift the markets investor needs to watch heading lifted this morning we went up and down into a new tdirang day and the depending on economic numbers and some of the discussions final of the week when closing bell comes back going back and forth on trade. [upbeat action music] thats really the marginal mover in the market. Bob, thank you very much. Those bonds are also moving because of Central Bank Action and the ecb announced its latest moves. Steve liesman joins with us the breakdown. Reporter the European Central bank cutting rates and launching a new round of bondbuying which meant a tweet from the president blafgt the Federal Reserve. Saying visk risk is to the downe mario draghi said to cut rates by 10 basis point to minus 0. 5 . The president tweeted european pilot were going to be on the tarmac central bank acting quickly cuts for another 45 minutes or so. Rates ten basis points they are trying and succeeding depreciating the euro against a strong u. S. Dollar the u. S. Fed sits and sits tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch mario draghi was asked about the president s tweets tell him we need this merger. The answer very simple. in dutch we have a mandate. We pursue price stability and we dont target Exchange Rates. Its happening. just ok is not ok. Especially when it comes to your network. Period reporter not mentioned by at t is americas best Wireless Network the president u. S. Growth is according to americas biggest test. Stronger here than in europe which is thought to be weaker now with 5g evolution. And inflation rising here the first step to 5g. Falling in europe which rates more for your thing. Thats our thing. Suggest rates should be higher in the u. S whai tell clients, etfs can follow an index, the fed has authority over dollar policy. If the president want as weaker but which ones target your goals . Its not about quantity. Dollar he can order his treasury its about quality. Secretary the to intervene no trendy stuff. Steve, the president does i want etfs backed by research. Have a point to some extent is it built for the longterm . About the euro my reputation depends on it. Does he not . Flexshares etfs reporter yes are designed and managed around investor objectives. To the extent that mario draghi so you can advise with confidence. Wants to help the european before investing, consider the Funds Investment objectives, risks, charges and expenses. Economy by helping the export go to flexshares. Com for a prospectus containing this information. Sector and improving the terms read it carefully. Of trade, that would be something that would perhaps and now for their service to the community, help the europeans at our we present limu emu doug with this key to the city. Expense. The trouble is what else should [ applause ] draghi be doing if he has a problem with inflation its an honor to tell you that it suggests that his policy rate Liberty Mutual customizes your Car Insurance is too low, whereas if you look so you only pay for what you need. And now we need to get back to work. Today at our inflation rate as well a last weeks wage gains, [ applause and band playing ] it does not necessarily suggest the policy rate thats too, low only pay for what you need. Especially given the low Unemployment Rate in the united liberty. Liberty. Liberty. Liberty. States steve, there was one other part of that press conference which i just thought was extraordinary where mario draghi essentially said he needs to see fiscal stimulus to really see any kind of turn around in the economic numbers, but short of that theres no other option, sort of desperate ploy to try to for the politicians to give fiscal stimulus. He kind of admitted on its own well back lets get a check wont do enough. On smile direct club which went reporter i thought that was public today at the nasdaq after extraordinary. Draghi has been calling for pricing at 23 a share above the fiscal stimulus for a long time. Expect the range last night it reminded me of the days when finished its first trading day as a Public Company at 16. 67 bernanke and yellen said the central bank cant do it on its down 27. 5 making it the worst former on the first day of trading for a own. Socalled unicorn, a Company Fiscal policy has been type. By the way, hes not the trying valued at more than 1. 0 billion to go back to his 2 in the private market for the year. He said getting near 2 is the big day on tap tomorrow august retail sales and import goal youre right its an extraordinary message prices set to hit at 8 30 a. M. From the central bank they need fiscal help to make it happen. Keep an eye on clour fare as thank you very much very much stephanie your take whether wee first trade as a Public Company opinion tonight investors see a turnaround in the eurozone watching the 23rd democratic any time soon and if thats need for some kind of change in the president ial debate. 8 00 p. M. Eastern time on all momentum for the u. S. Economy. You need chain turn the big players on staj. Youre seeing china stabilize. Interesting to see how it plays that would be positive for the out back to the Broader Markets. United states Global Growth and we saw the sell off toward the even europe but i absolutely close. Agree, you need fiscal stimulus but weak or strong. Drifted lower into the close. And one of the reasons why rates just getting a bit tired with bottomed last week was there was the rally at this point. Rumors that germany was going to just having been up like i said announce some sort of stimulus on the fiscal side 6 since the middle of august. Whether or not they have to be tomorrows numbers could be kind of interesting in a rescission for two quarters i think there is a leaning in the direction of how retail in a row or not i dont know but sales have downside richk. Thats what got people excited that thats what you need. Merle lynch economists have a from the political side in model saying its a soft number. Europe is germany has the room we get Michigan Consumer to stimulate, the likes of italy sentiment last month that was the number among the household dont without breaking very long that took a plunge standing fiscal rules. I think well see if it was a germany is more important fleeting little flutter of worry in august or if it persisted. Anyway germany is more important what did you think of the ipo but its not transformational. Performances today we mentioned smile direct club lets move on to industrials but also 10 x again omices finished up 35 . Sign of a the take away. Discerning public market. We have a pause as the navy here the take away for that is its a choosey ipo market. Are on the floor and well theyre not embracing every new idea smile direct it goes down as one deserved applause. They will be here towards the of the poorest showing are for a close. Well keep an eye on them debut. Raised more than 1. 0 billion i throughout think. Now lets move that does not look good. But i think its a positive that morgan at the highlights of investors are basically being that industrials pretty selective about what they morgan on morgan. Buy and dont. You talked about europe the dow closed higher by 45 that was a theme emerging out of day one of this conference points that does for closing bell. Fast money begins right we had promised a number of now. Live fl from the nasdaq multinationals industrials market site overlook times today. Lets start with general square this is fast money im melissa low. Traders are tim seymour brian electric shares sold nearly 3 billion. Kelly and guy adami. Also chris ver own head of Technical Analysis at strategy i that happened yesterday. Suppose research partners. At the conference ge ceo larry tom lee on why the markets needs bitcoin to go up not down. Culp said ge is talk about he explains. Bringing it down to 3 walmart goes big to go to your china is a watch point for the company operationally home all you can order grocery deliver goes national. Particularly in health care. The desk chous down on that. Culp is keeping an eye on return bu plus blackstone up another 4 service of the 737 max and ge today. But makes the engine for that plane. The Aviation Unit could boost margins there. Stock down fractionally today. Another name in focus, honeywell which is also lower. We saw that stock move down 1 after the cfo warned about more softness in europe in particular germany but backing honeywells projections noting strength in aerospace. Two more, defense contractor raytheon and United Technologies those two companies saying that integration planning are under way for their merger equals and they are expecting to close in the first half of 2020, also saying, guys, that midoctober, october 11th is when they will have their shareholder votes on that merger which is getting a lot of attention from a variety of different folks and people in the industry including most recently president ial candidate and senator Elizabeth Warren there was an article about that earlier today. For the markets staying near session highs up 116 point on the dow. Joining us to discuss, erin brown. Markets markedly higher today despite we had a Major Central Bank cutting rates deep near to negative territory whats driving this continued spike in yields today . I think theres a couple of reasons. First its optimism that maybe were moving closer and closer to some type of trade agreement or at least a detent with china with respect to trade tensions secondarily whats driving this move if you unpack it is the move weve seen in break even inflation particularly today you havent seen a move dramatically higher but theres higher inflation and part of that is being driven by the cpi number that came out earlier today. Also by the accommodative policies through Central Banks where the market is expecting its going to have some impact to rising inflation one thing, you know, i would note and other speakers this morning have noeftd as well is that i think its a fools errand well get close to 2 inflation level but getting a little bit higher in terms of what the market is pricing in right now is what, i think, the market is getting a little bit excited about which is why youre seeing nominal yields rise going back to industrials for a moment between some of the comments we got today from Morgan Stanley conference, what weve heard from some of these companies in general more recently, do you still like names in the space . Are you still bullish on them . I guess what would be a warning sign to you yes i do still like industrials. A lot of it is valuation a lot of it is they lagged substantiately in the last two quarters i think expectations are already set in the stocks prices that earnings are coming down whether they are coming down 5 , 10 , some people think its more than that. The valuations are expecting more of that if you have good exposure in aerospace and defers i like that sector very much i like house i like construction even though its come down you still have a lot of these indicators, sentiment indicators like the dodge index above 50 and thats expansionary its down from 57. To 50. But these companies can put up some good numbers and they are very good on the margin side and i think they will continue a lot have already restructured and taken operation. I like some selfhelp stories. United technologies because of the spin and raytheon acquisition. Black and decker i still like ge because its a turn around story over the next two or three years the rotation weve seen in the start of the week has paused today but you still like value still like dividend stock, is that right i like dividend stocks not value. I continue to like growth relative to value at this point in the cycle our view is that growth is going to continue to decline in the u. S. And that, you know, despite the positive stimulus that you may see from the fed and despite certainly some temporary piece or, you know, temporary sort of agreement on a trade deal, we dont think its going to be a meaningful trade deal thats really going to start to reignite stimulus in the u. S. Economy. So as a result of that we think fed growth will continue to move lower. At that point in the market, when growth is slowing and still quite low you want to own growth you want to own the secular companies that can do well in absence of a high gdp environment. So i like the tech sector still and i would be birriuying servis i would look at dividend stocks like utilities reits offer value and i like the u. S. Housing market as an end market as well i would be barbelling the portfolio staying away from value buying secular growth and buying dividends thanks for joining us great to see you thank you still ahead well drill down on ecbs decision and how it impacts the feds next move with former federal governor. As we head to break heres a check on our data tracker. A gain of one tenth of a percent in august and weekly jobless claims the pole a five month low of just over 200,000 stick around, closing bell will be right back ed thats where i feel normal. Having an annuity tells me my retirement is protected. Learn more at retire your risk dot org. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Welcome back to the closing bell. Walmart volcano out a Subscription Service for unlimited same day grocery delivery it will be offered in 1400 stores and charge an annual membership of 98. One dollar cheaper than shipt or inis a cas ins instacard. I like walmart. Valuation is still pretty attractive this is their strategy heavily very invest in the consumer i think they will gain share. I think they will be able to spend, about a billion dollars in sga that they are talking about but still its still well within their guidance and youll still see operating leverage which is my reason for owning it anyway, spending coming down. You just touched on it. Thats the key question. Whats the cost. Delivering infrastructure is very expensive thats one of the reasons why the stock didnt do anything for the past several years they were heavily in spending. No top line growth organic growth earnings were missing like every other quarter. Now actually they are controlling their investment spend and i think they are doing it very wisely and i think they can reap the rewards and the consumer will be very happy. Something that they got a first move advantage on over amazon whole foods done have its footprint yet and perhaps that can the stop amazons march in one area we have just under 40 minutes left of trade, were high by 130 points on the dow by half a percent send to it mike for todays market watch reporter vital signs stable based on the bond markets Blood Pressure right now then plenty of fluids. Thats how you get better. Thats what the corporate debt market is delivering we got the big exhale. Been some relief thats pervaded investor mood lately and well take a closer look at that then fees for service an alternative look at price trends in the economy in the next hour. Vital signs. First of all the this chart is looking at a bull market cycle stocks against the ten year treasury yield i want to point out a couple of things this is back in 20112012 the blue is the s p. Thats when stocks body. Between this period stocks were holding up and yields kept going down same here stocks bottom here in 2016 but then yields picked up these rallies that continued on were led by the more cyclical sector a lot what were seeing going on now. Who knows if this will prove to be a consequential low in treasuries but fit a pattern of a stock bottom happening beforehand and, of course, eventually led by the more typical cyclicals cant project ahead and say well go to wonderful new heights. You did chop around and not do very much after yields bottomed for a little while in 2016 thank you after the break health care, sticking with that theme among the worst sectors. Deutsche bank out with a new note picking winners in the space. Well get the word on the street. Later well speak with elon musks sister tosca musk about her company passionflix and how she plans on taking on the streaming giants thats next. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Liberty mutual customizes your Car Insurance, hmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty bell. Time to get word on the Bank Deutsche Bank initiating coverage on Health Care Stocks firm saying diversified names with compelling valuations is a way to be defensive in the 2020 election nomura upgrading activision. The firm citing franchise interest in mobile opportunities. That stock is up almost 1 wells fargo downgrading caterpill caterpillar. The firm citing lackluster Third Quarter and equipment demand is at or near a peak. Both cat and deere trading down 1 apiece. Stephanie what do you think of those names cat and deere right now . Caterpillar in particular a story that tends to get overlooked thats the fact they are connecting all of their machines, right . Its the whole industrial internet of things and they are looking to use that to basically leverage those sales to make these machines more cost efficient for customers. When these Industrial Companies can hold on to their margins this is one of the reasons. Ai is a very big part of this story. Reason analysts downgraded it, hes taking his money off table. Construction in the u. S. Is softening. We just talked about it. Mining cycle is only three years in 11 times earnings is a lot of bad news priced in cat down 1 Broader Market up higher coming up we have your last chance trade and stephanie is looking at the semiconductor space. Up next Energy Stocks seeing a big reversal among the top ldiusmers wel scs whether that rally wel scs whether that rally can last liberty, liberty, liberty, liberty should always be working harder. Oney thats why your cash. Automatically goes into a Money Market Fund when you open a new account. And igher than e trades, td ameritrades, even 9 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Liberty mutual customizes your Car Insurance, so you only pay for what you need. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back shares of oracle following after ceo mike hurd will take Health Related leave of absence theres reports hes been grappling with the illness for more than a year oracle raised earnings seeing revenue coming in slightly below estimates. Stock down 4. 3 . We got 29 minutes left to go until the closing bell here. The dow is up 115 points here are the three things driving the action today trade optimism both the u. S. And china have extended an olive branch in terms of tariff delays but a whipsaw session today as conflicting headlines from the white house inject volatility into stocks pap new stimulus plan and a rate cut from the ebc ahead testify feds turn next week time now for cnbc news update with sue herera. Hello heres whats happening. The u. S. Budget deficit widened to more than 1 trillion in the first 11 months of the fiscal year for the first time in seven years. Higher spending on the military, rising interest expenses on government debt, and weak revenues combined to push the deficit up 19 from october through august the suspect in the mass shooting at a walmart in el paso has been indicted for capital murder a grand jury charge the 21yearold in the august shooting which killed 22 people. Prosecutors are seeking the death penalty. Former fbi Deputy Director Andrew Mccabe facing the prospect of an indictment after his attorneys were unable to persuade Justice Department officials not to pursue charges. Its still isnt immediately clear when or whether the u. S. Attorneys office in washington might announce those charges and heres a feel good story. A florida fourth grader who was bullied over his home made university of tennessee tshirt has now been offered a four year scholarship to the school. Officials say the scholarship would cover tuition and fees beginning in the fall of 2028 if he chooses to attend and meets tad Mission Requirements guys, theres been an outpouring of support for that young man, and the tennessee book store has been reprinting his tshirts, selling it and then donating all the proceeds to the organization stomp out bullying so thats your feel good story for the day. It is a feel good story i saw the first line of your story saying the word bullying and it was a nice turnaround i know. It has a happy ending. It does indeed. Sue, thank you lets send it over to Rick Santelli talk about plenty of fluids a lot of liquidity in the bond market this chart of financial conditions and the trend in financial conditions shows them loosening up pretty significant. This is from Morgan Stanley. This is the overall change in financial conditions thats blue line you see dramatically from december highs when this line is high, financial conditions are tight. When its going down friendlier, less tight they point out its almost all because of the decline in treasury yields. If you take out the treasury effect its really not that much different from where it was back in the spring. Still not at a bad level but shows you how much has been hinging on the fact treasury yields have collapsed. Oil, stocks, dollar other things here corporate debt spread. This is the spread between highest level of junk bonds and lowest level ofinvestment grade. This is pretty steady. Its not telling you theres all that much to worry about risk tolerance in the bond market were holding at a range but not at the best level from 2013 and 14. Such an important analysis. It applies even more so i think to europe which is that financial conditions have actually eased already this year and yet were talking about further cuts since the ecb ended on buying, yields have fallen significantly. Now thats the tool to reinvigorate the economy that immediately prompts the response, the reason that financial conditions have eased is because expectation of Central Bank Action. Its hard to unschool whats gone into this decline in yields whether its assuming Central Banks will be there doing more stimulus or would it happen on its own. Its hard to think the fact of central bank easing will loosen. Thank you well see you later in the hour. Energy is the worst performing sector but the best performing sector this month september rally rages on Raymond James analyst is here to discuss this and collin senior analyst. Good afternoon to you both the fact Energy Stocks are up Something Like 2. 5 , up for the month, even as brent and wti have weakened, why the divergence now well, lets zoom out a little bit, as you said energy is worst performer yeartodate its actually underperformed in eight of the last nine years and, in fact, energy is waiting within the s p 500 is at the same level it was in 1999 when oil was less than ten bucks barrel of course oil is about six times that today so, the fact is, Energy Stocks and the commodity have been diverging and they diverged in the first half of this year when oil went up but the stocks didnt do much were seeing a little bit of a linkage kind of reviving which very healthy and we need a lot more of that but its just a start. David, you dont see the recent rally in some of these Energy Stocks as particularly justified . I say to the point its happening when you have an index that has miniscule weighting theres doubt well exceed 50 a barrel next year you have new projects coming online outside of the u. S. Demand is trending close to a Million Barrels per day. Were seeing capacity expanding in the back half of this year. So i think you look at Global Supply demand balances, doesnt necessarily make the bullish picture in 20 for stocks particularly youre transitioning from a growth sector to into an income sector. That transition takes a bit of time and fundamentally speaking i dont think theres a tochb reason to see this rally following through for meaningfully for several months. What is your target for oil in the coming months where do you think the price goes short answer is we think it will go higher obviously, the trade war situation has been a head wind no question. Lets remember uranium supply is down dramatically versus a year ago. Venezuela continues to fall off a cliff. And also in 2020 the imo low sulphur regulations come in which will further put a dent in Global Supply. So we think that oil should be setting cyclical highs in 2020 considerably north of where we are, probably north of where we peaked this past spring, you know, kind of 75 a barrel. So there is room for price to the upside but would help if the demand side of things became clarified once theres a trade deal with china. Stephanie you like oil service or integrated. I do the barbell there too. Chevron and i also own diamond back energy. I like schlumberger. You saw what stocks did just this week. If you believe like i do the value factor rotation will get legs again maybe starting next week, this group is under owned and it wont take much if you have 55 oil or 65 oil thats good for Services David the fact weve seen a spread between brent and wti narrow in the last couple of month, does that make some of those infrastructure names, those pipeline names look attractive right now i think the Pipeline Companies might be attractive but i still think were in a situation where unless the u. S. Sustains the growth that its seen in the last several years we could be overbuild their infrastructure we have a ton more barrels its sustainable until next year i dont think theres very much call on future infrastructure at this point i look for that market to tighten up a bit more before looking to rotate out of other areas like the upstream companies. Lastly, anything in terms of the opec or saudi or iran news that weve been getting this week that, i guess, contributes to your thesis or youre keeping a close eye on in terms of food prices moving forward sure. Were watching the saudi around ipo. Not only is that an epic scale deal once that happens, but saudi arabia needs to Keep Oil Prices high for that deal to be successful right . Who wants to buy the ipo of saudiramco if prices are plaunging. So saudi has an incentive to support the oil market in every way it can thats bullish for prices. All right gentlemen, thanks for joining us today. Weve got 19 minutes before the bell the dow is up 93 points right now. The s p is at 3014 we could see a record close on the s p so were watching that closely. Still to come at ts warner media striking a deal with j. J. Abrams but they are warning about a key metric on the heels of ecb new stimulus plan well talk to Daniel Tarullo what low rates mean for banks and what we might see from the fed next week you should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Classical Music playing throughout over 15 minutes much trade left. Shares of hertz as carl icahn increased his stake. Its up 4 groupon looking to make an acquisition and sources say yelp may be the target. Groupon has been under pressure from activists investors urging the company to make changes. Yelp up 6 speaking of companies under activist pressure shares of at t dipping on expectation of subscriber losses. Julie boorstin has more. Reporter at t shares trading down 1 . They were down as much as 2 earlier today this after at t cfo warned about more declines in the companys Video Division projecting they will lose 1. 3 million video subscribers in the Third Quarter. 300,000 more subscribers lost than in the Second Quarter he warned warners media will decline. Today warner media just nungsed an exclusive deal with j. J. Abrams to produce new tv projects for all of its platforms including hbo max. Now abrams will finish existing projects for paramount he has an upcoming star wars movie. But this is an exclusive deal. Now this of course is just the latest in the land grab for top content creators you said the latest in what has been a big land grab these numbers being thrown around are extraordinary only hit those numbers based on delivering quite a large slate of shows look, j. J. Abrams is a hit maker. And i think the fact that he does have a show and apple tv plus and also is producing and directing his upcoming star wars movie just speaks the to how successful he is and how reliable he is in drawing major audiences. He has a huge track record both in tv and in movies. So what weve seen is with netflix, netflix is spending hundreds of millions of dollars to secure deals. They want to make sure they can lock up that talent because now netflix, hbo max, disney, plus all of these services will be really competing with each other and it comes down how good the content is thank you very much new data shows active investing is gaining ground on passive investing. Reporter according to morningstar 48 of active u. S. Stock funds beat passive indexes in the year through june thats up 37 yearoveryear but passive vehicles are still becoming increasingly dominant passive is now taking over almost half of the stock market according to bank of america and thats caused hedge funds to build up the credit side of their business cio of sculptor said thats why they are growing droid be more than half of their 30 billion in asset management. On the credit side thats hard to replicate. Within the world of opportunistic credit theres not an etf that can work a company through liquidation of assets. With credit we focus on what we do, hopefully well be able to have an edge in for a long time. Reporter sculptor is up 10 and seen inflows in to credit and outflow from their multistrategy fund. How does this relate in terms of performance we started to see good enough performance to justify the flows . On the credit side of the business, absolutely and on the real estate business absolutely multistrategy just has been a tough strategy overall its kind of feast or famine multistrategy oftentimes invest in different strategies. For sculptors case they have about 8 billion in equity investing that they of course are wrapped up in that whole difficulty surrounding equity investing in a Hedge Fund World right now. So credit, especially since you dont really benchmark that against the s p has been drawing more inflows and has been a stand out among their credit peers at sculptor. Thank you shares of sculptor up 8 stephanie your thoughts on this especially the last couple of weeks on volatility. I think you definitely need to see sustainable performance, out performance of active versus passive and thats just starting to happen. If that continue and it can Gain Momentum you need correlations to come down because you can have every sector go up every single day. You dont have to be a stock picker thats happening but a slow process over time and you need less competition from private equity cnbc is delivering alpha summit back next week september 19th some of the worlds influential Money Managers will be there speakers include steve schwartzman, nelson pelts, Vice President mike pence and many, many more. Go to delivering alpha. Com to register ten minute left of trade and we could see a record close on the s p. Not looking likely at the moment where some 15 points or so away but nonetheless a strong week and decent Performance Today volatile morning up next well have your last chance trade later, can walmart afford to undercut amazon primes pricing . Well ask former walmart u. S. Ceo bill simon about the companys new Subscription Service. Thats coming up every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Talk to your advisor or consultant so servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. 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. Welcome back six minutes to go. Nxp Semiconductor Im not saying were seeing a recovery were seeing stability. If we start to see growth this company will benefit almost all semiconductors will its a play on recovery in auto. Auto the star in north america has been at 17 million for the last five years consecutively. Theres still momentum in auto and selfhelp in terms of margin buy back and dividend. Valuation is at 13 times the question on autos is it last hoorah. Its steady everybody has been calling for a crash in auto and we havent seen it. The numbers actually beat expectations inventory days are down to 61 versus 68. Seeing very little incentives. Its not booming but all you need is stability in auto for this stock and this is a big end market for them for the stock to work. Were getting another Semiconductor Earnings what weve seen is this group has been trading in line with trade headlines. How much does not just stabilization bath recovery in the semi stocks. You need a truce. 60 of their totally revenues are from asiapacific. For sure thats one of the reasons why the stock has fallen so much it has had a nice bounce theres more to go i think the earnings power is there should we see these things develop. All right weve got four minutes left to go in todays session. Time now for the close countdown. Lets trade close with equity strategist at td ameritrade. What are you watching . You know, this has been such an amazing day, morgan but definitely after the bell well watch two things well watch the earnings on broadcomm. They are looking for a move based on options on implied volatility of course the third data point of the week in terms of our top six which is retail sales tomorrow morning, 8 30 eastern time, 7 30 chicago time and they are looking for a. 2 on the headline numbers so well be looking at that for sure coming off a day where all the Macro Economic, we got some big ranges well see if theres more to come tomorrow for sure but coming up to the bell retail sales tomorrow morning are you focusing on the ecb this morning or do they care more about domestic stuff. It was interesting. You asked me when we spoke on tuesday if that was important, i believe that it was. For a minute it was. The announcement got a nice move in bonds then the cpi came in and then when mario draghi started his press conference bonds moved again. But when the dust settled, remember it was february 2018 when we got a hot cpi number that caused rates to spike i thought todays number was similar in terms of a hot number,. 3 and. 24 yearoveryear was enough to rule out everything mario draghi said, focus on the u. S. And now we got a ten year looks like it wants to go to 1. 8 . Thanks so much for joining us great to see you lets sends it over to mike. Rally is looking winded here after a 6 off the loss but not because investors got too bullish. Big exhale could be a tail wind. What i mean investors got way too kind of negative and defensive over the course of august this is an equity exposure gauge of active investment managers. Its a monthly gauge it curled up to the neutral range. We got pretty bearish. Thats moving in the direction of greater equity exposure take a look at hedge funds some of the lowest exposure to equities that theyve had this entire cycle if we dont have it thats fine. Hedge funds are very defensive back to 2008 thats either a bad omen or means they have a lot of room to chase any rallies we get from here. Lets get up to bertha one thing im watching is new highs in the recovery back to those july highs for communication and for chips. Kmgs today we got some all time highs for comcast and charter. They had to provide the pipes for those streaming service. Chips dropped 12 from july highs. Meantime smile direct club and 10xgenomics. Investors frowning on Smiledirect Club were fading as we go into close. United health, merck, apple is not helping, fading fast we didnt have a lot of help from those cyclical sectors. Transports, Energy Stocks, retail stocks, all on the weak side that didnt help the old momentum stocks mastercard, paypal, visa all were doing well. One thing thats continued to be on fire, emerging market etfs have been hot. Turkey up. South korea up look at these. Some have been up 5 , 6 in the last four or days. Theres the closing bell we didnt make to it a new high. S p 500 got within six or seven points of a closing high, intraday Dow Jones Industrials average closing up 48 points welcome to the closing bell. Im Morgan Brennan ill wilfred frost. Lets check in on how the markets closed which was just losing momentum in that final ten or 15 minutes. Such that we were only higher by. 2 . Nasdaq and dow up 3 the russell had led the charge this week. Similarly the sectors that outperformed at the start of the week didnt really outportland today. Certainly holding on to the gains of whats so far been a decent week. Materials, consumer discretionary, tech stocks were the leaders, leading sectors within the s p 500 seven Straight Days of gains for the dow industrials. Longest win streak since may of 2018 even though we closed off of those highs of the session. Also i want to point out smile direct club which is one of two ipos that happens today. One of the biggest unicorns to go it priced last night after the close at 23 which was above the range. It closed today at 16. 67 so down just over 27 . I think it was the worst performance of a socalled unicorn so far this year jim was very rude about english peoples teeth your teeth are lovely thank you i thought i would show them. Are you a product of orthodontia . I am. Thats top of the list i used to have the worst teeth ever maybe jim is right fundamentally we have the worst teeth but thankfully some people get them corrected. Joining us now to talk about the market day stephanie is still with us. And Sean Matthews founder and chief Investment Officer of Capital Management good afternoon to you both s mike santoli lets talk about the swings we saw. It was a mild follow through rally even after the highs of the day. Its a little bit winded, a little bit fatigue after a 6 run of the s p 500 right up to the cusp of a new high you lost a little bit of that initial oomph of oh, no yields are higher i wouldnt take too much away from todays action in terms of saying that this rally is over, but got a lot in a short amount of time. Sean, what did you make to the fairly volatile reaction to this mornings macro data and Central Bank Action it was Pretty Amazing if you look at copper which is a barometer of Global Growth expectations we went from 259 to 267. Thats a 3 plus range so thats a really big range for what peoples thought process whats going on in the global perspective. So ecb came out. They unestimated what the market really wanted. We had a huge rally. We turned around and went the other way because we had dissenter. Countries came out they didnt want qe. Draghi came out and said this will last for an extended per of time with no cap and the market is saying no i dont think that will happen. It will be interesting over the next six months what really happens at the ecb stephanie we had some data today in the u. S. That was perhaps better than expected cpi reading was hotter than expected how does that set us up. You have the ecb here, you have the u. S. Data here its hard 2. 4 corresponds core cpi annualized last three months if you annualize it core cpi 3. 4 so you cant say that inflation isnt around its definitely here thats why the bond yields actually reverse they were down and then reverse higher i think also the fact that the financials held in there was impressive as well i thought it would be a complete risk off day it wasnt. A very mixed day some Growth Stocks made a come back value stocks, cyclical stocks did quite well which is encouraging. Broadening out the market as a whole. Next week as i said earlier i think the fed is going to have dovish language but not as much so because you have a lot of data points here in the states that have been better. 25 they go and a little bit of dovish but not as dovish as people want. Have you got conviction as to where you should be positioned in the bond market whether here or abroad . I think if you look at some of the opportunities that are out there, you look at five year flows as far as the u. S. , Inflation Expectations are still going down and really at their lows if you look at the uk right now, you have Inflation Expectations are actually rising. 3. 4 Inflation Expectation next year, so if you look at guilds they are trading at 60 odd basis points now its about relative value in the marketplace. But there is inflation working its way through the system the we is youre going to have to have expectations change as far as future inflation. And then youll start to see the market back up aggressively. Right now were talking about 25 basis points in either direction which is relative benign, but, remember, 2016 when the market changes after a significant rally, it can move back very quickly and i think thats potentially out there over the next six months or so sean does that mean that you are you would be investing in Precious Metals or other safehav safehaven areas yes on an inflation adjusted basis silver very cheap. Its caught up to gold but lagging a little bit i think you want to look at copper and i think copper is a key indicator of what will happen as far as what people perceive as Global Growth. I think theres a fundamental underlying bid for equities at this point in time and people want to get in them in any sort of positive news thats out there. So thats a trend that i think is in place. However we get back the to a 2 ten year i think people will talk about oh, no equities will be in trouble. So its still a tenuous rally at best i was going to say that point were in a little bit, somewhat of a sweet spot in multiple dimensions which is 1. 77 on the ten year is not too high done really undercut valueations but also not solo its screaming the at the market that theres a recession on the way if you look across the board sentiment is pretty much like that too i also dont think we have a trade deal priced in unlike early this year when you had a little bit of a mini market top where you had an assumption it was fully priced in. Looks like the trade deal is coming well have to leave it there. Thank you both for joining us. Up next former Federal Reserve governor Daniel Tarullo tells us whether he thinks Central Banks will cut rates further following ecb easing today. Were back in a couple to managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Welcome back the dow closing for a seventh straighte tried tw highs. We didnt quite make it. We didnt have a lot of help at the very end we drooped when we go to close united health, pfizer, merck, ended up positive on the day all three drooped going into the close. No help from cyclical groups energy and retail, industrials and banks really didnt do that much that energy we saw earlier in the group, in the week from those cyclical sectors didnt materialize at all today finally s p intra todday. The closing high were all looking for 3025 that was the end of july. Not there yet but pretty close back to you. Continue to be on record watch i guess you could say, bob. Thank you. Nasdaq out performing the other major averages today reporter a big switch where you saw large cap overtake where small cap has been the driver over the last couple of days even in the strength of chips we did see that fading in to the close. Came within a fraction of hitting the all time high. Big cap names like paypal were among the leaders today. We did have two ipos once again were starting to see some of these household names unicorns are not performing as well as expected but they did raise more than anticipated. 10 10x genomics did well. And names that arent big unicorn names did better the European Central bank cut rates by 10 basis points and set to restart asset purchases in november this as we await a critical decision from the Federal Reserve. Does it put pressure on Jerome Powell Daniel Tarullo joins us now in an exclusive interview thanks very much for joining us, dan. Great to see you do you think that the president had a point today when he suggested the ecbs actions were at least in part motivated by wanting to weaken the euro well, i doubt, actually obviously Central Banks look and project the impact on Exchange Rates of Monetary Policy moves but ecbs strategy has been a Long Term Strategy of trying to have very accommodative Monetary Policy, more accommodating than we have. I dont think there was any intentionality to affect exchange rapts but we should be clear they do anticipate some Exchange Rate move they were slightly frustrated, i think, because the market seems to have read the package of actions and some of the noise around the actions as perhaps delivering less than was promised dan, on one hand, we were just talking about this a few minutes ago. On one hand you have slowing Global Growth, ecb decision today. Here in the u. S. You have some data thats not as bad as expected do you have some inflation readings, albeit not necessarily thy that was hotter than expected how does this set us up for the meeting next week and for how policy will be shaped for the months beyond that well, i suspect that everyone at the fed today, morgan, is pretty happy with the text that j. Powell delivered at jackson hole last month because as you recall although he leaned a bit dovish he was careful not to give too much indication of too much easing, and i suspect that this is the debate they will have next week will be one in which the factors that you just mentioned are pushed back and forth across the table those who have been opposed to lowering rates have been making the case that inflation is firm some, that in their view at least unemployment is near its Sustainable Low level, or obviously below in their view, so theres not the case for doing more right now the other side has been making the argument as kind of a p measure because of business uncertainty. I think with the readings that came in today coupled with the employment report last friday which, again, was not earte who want to be quite cautious going forward. I would expect a rate decrease, and slightly dovish language but i would be a bit surprised if it leaned heavily in that direction. The other strand of i guess resistance to further easing weve heard is that idea that to continue to lower rates would risk some financial instability or raise the risks of related to Financial Market exhe ises and things like that is that something you see out there, because i have to say after each fed meeting including the last rate reduction the markets did not exactly, you know, take off and run to the upside with that no. I think its not a short term issue of whether there are excesses in Financial Markets, too much in the way of asset bubbles. Its more of a concern over the medium to longer run i would be more concerned with the relaxation of regulation on large Financial Institutions than with the posture of Interest Rates generally one other thing to say here both with respect to the economy and to the banks is while Monetary Policy is a very powerful instrument it doesnt cure all ills and it can only do so much and i think thats part of the dilemma thats facing the fed right now. When they are scraping against the zero lower bond, their decisions become more difficult, and i dont think that the trade issues that are confronting them right now are susceptible to Monetary Policy response as your classic dip in Consumer Spending because ofhigh rates dan we heard from jamie dimon earlier this week. He said he was very relaxed about credit quality as it concerns his own Balance Sheet but leverage lending was an area of potential concern to keep an eye on but that is not really something that will affect the banks and even if it did blow up it wouldnt be systemic in the way that Mortgage Backed securities was last time around. Do you agree with all of that . I do. I do with perhaps a bit of a qualification. I think because of some of the steps that were taken both regulatory and supervisory the large u. S. Institutions are not overly exposed in this area. Thats the good news not so good news is there is still an awful lot of leverage lending out there and if we get a dip in the economy even a modest dip a number of those companies which have taken on that debt are probably going to have difficulty remaining solvent and that could amplify a recession. I think jamie dimon is right youre not going to see a knock on effect because the banks are fairly insulated from it but zoil be a Macro Economic effect not just as much of a financial systemic effect. Ill para phrase another part of his comment the voelker rule is relaxed, it would only be a fractional reduction in banks cost and big increase in liquidity. Wouldnt affect trading at all do you agree with that or is that encouraging the relaxation of voelker rule in which they go back a little bit on i think its hard to say. You know the voelker rule, as you know, is one whose effect is hard to see from the outside because it does have so much to do with the way traders comport themselves and i obviously no longer have access to that kind of information for the rest of us well just have to wait and see what the impact of the agency move is to relax. Daniel tarullo we appreciate your insights. Thank you for joining us we have an earnings alert on broadcomm. Morgan, broadcomm reporting of 5. 16 street is at 5. 13 revenue coming in at 5. 25 billion. Street was looking at 5. 45 billion. Think reiterate their full year forecast of 22. 5 on the sentiment semiconductor solutions, thats their biggest 4. 35 billion thats a bit better than expected. And Infrastructure Software at 1. 14 billion and also looking for 1. 7 billion. This call starts at 5 00 p. M. Eastern and well be on it broadcom in line with s p 500 but below. Exactly really has not been a leader within the semis which has been on a bit of a hot streak if anything it looks like they are get a little bit stretched slower one it seems like it exposure to huawei although thats shaken out now in term of expectations more insight to come to call down 0. 9 in after hours trading. Snowboard interesting to hear what they have to say. Speaking of possible acquisitions, still ahead, we will break down the charts to find out whether investors should be worried about the latest reading on inflation. Filmmaker tosca musk discusses the future of streaming and atwh it was like to grow up with her brother elon musk ok, ready sweetie . Nice, you ready to go again . Are you ready, dad . Im ready. Imagine if your Life Insurance could help you live for today and safeguard tomorrow, so youre ready for anything. Life insurance designed to protect generations of families. Thats the power of pacific. Ask a financial professional about pacific life. Fees for service and Services Prices have held up better than others this is an alternative obvious inflation. We got the Consumer Price index this morning on target but the core rate was higher than expected at a multiyear high atlanta fed seeps slicing the cpi which is the sticky cpi and the flexible cpi the sticky cpi is a category of goods and service that tend to be sticky in their prices. They dont swing around very much in the short term flexible is things that reprice much more frequently obviously what you see here sticky cpi is make agnew high for this cycle up 2. 7 . Whats in there is more service but not exclusively service. And in the short t, Hotels Things competitively repriced the suggestion here is theres a core of Pricing Power in the economy that has to be looked at the cleveland fed has the median cpi coming with a similar story where essentially theres sort of a bubbling up of inflationary prices certainly not a be problem nothing the fed would get too excited about but not necessarily showing a short fall inflation could affect the orange line. To some degree. Without a doubt. The implication of seeing a move like this in sticky cpi, could you does it suggest youll see higher prices for longer you know, it definition the the things that dont reprice that often the things is its not the majority of what you pay for although rent is in there. So housing cost is definitely something that has the potential of long term mike, thank you as always. Coming up next walmart undercutting amazon on price with its new grocery delivery. Former walmart ceo will tell us whether the retail giant can afford to do that. Find out how soon we could see fully automated ware hows. Stay with us thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. Classical Music playing throughout time for cnbc news update with sue herera. Hello heres whats happening. The Trump Administration is removing an obama era regulation that shieldled many wetlands and streams from pollution but it was posed by developers and farmers who said it hurt Economic Development environmentalists say the move will be millions of americans with less safe drinking water. The National Transportation safety board says all six crew members were asleep when a fire broke out in a scuba diving boat off the coast of california killing 34 people. The report comes a day after divers recovered the remains of the last missing victim. In its annual study of the cost of car ownership aaa says the average american is spending about 5 more than last year driven mostly by a 24 spike in financing costs. The study finds on average people are spending 773 per month on new vehicles. And Hillary Clinton visiting an art exhibit in venice, italy that featured copies of 40,000 of her controversial emails. She warned western democracies the russians are targeting them. She spent an hour within the venue. You are up to date thats the news update at this hour back to you. Sue, thank you very much. Oh, boy exactly dhl just opening its First Innovation Center in the United States frank collin is there and has a look at dhls push into automation reporter dhl is developing robotics like this that my knick the human hand and can pack shipments. They are developing robots like this one that actually follow workers while fulfilling your online workers to make them more efficient. This is about addressing the labor shortage in logistics. New logistic workers will be needed thats 26 new workers than five year industry average. Dhl says it expects ecommerce to grow by 25 in the next five years and in toward address that fast growth it will put robotics in 80 of its u. S. Warehouse us. Back over to you frank, i think about a company like honeywell thats working on connected automation. What are Companies Like dhl working on this and whats the expectation in terms of this technology for the future. Something like pick and pack has always been a human led endeavor and seen as the holy grail reporter youre exactly right. I spoke to the ceo of ecommerce for dhl. He said in the future they are going to have to have robots that can pick and pack overnight. Lets say you want a pair of sneakers or suit so when a human worker shows up they can put it right in the truck and deliver to it your door. The company is putting some of their Fulfillment Centers in urban areas. Their focus is getting their Fulfillment Centers closer to people and using robotics to speed up that pick and pack process. Frank collins, thank you. Walmart announcing the expansion of its unlimited Grocery Delivery Service 98 a yn order of 3 or more can get free delivery to their home is this enough lets bring in bill simon former president and ceo of walmart u. S. And Jerry Sheldon good afternoon to you both bill ill start with you will this be enough for walmart to win the delivery wars walmart needed to do this their market share in Online Grocery is substantially higher than anybody els its their competitive advantage. They needed to do this i think it will be enough to keep them on top you know they have the largest footprint in grocery footprint in the country and their ability to deliver to almost every zip code with efficiency will be enhanced by their store present. I think its a good move for them bill, how plausible if they get this right they can prevent their rivals from moving into the space because of costing involved in trying to roll out delivery of fresh goods . You know i think thats a great point. Thats exactly what happened in the physical, you know, retail world when walmart moved into grocery. They went from being a strictly, you know, hard goods retailer that they were when they had their die couldnt stores to having the traffic thats driven by the food business and that, i think, is what will happen in the Online Grocery world in the online world as well with walmarts advantage in grocery and their ability to, to get the traffic that comes with the frequency of a grocery purchase that amazon cant get because they dont have access to the fresh product nationally like walmart does i think its a good move its going strategic advantage for them jerry is this a trend in which all of the Major Grocery retailers will have to fine some sort of way to deliver to consumers and if so what is the role that technology will play in enabling that i think you absolutely if youre a grocer you have to be in the Home Delivery business. You look at very large retailers they are either doing it on their own again such as walmart or they are acquiring assets to be able to provide that service to consumers if you get, start looking at lower revenue retailers, lower revenue grows ers grow groce. I see kroger and target a bit behind for kroger they do spend quite bait on innovation and on i. T. And they do a lot of development internally i view target as a little bit behind where some of their larger competitors are at. Obviously, they did make a very big investment in purchasing shipt a couple of years ago. Every retailer is take different avenue some are developing those assets internally and others are looking for outside companies to outsource those efforts to or to learn from outside sources and develop those assets and capabilities internally. Bill, this move by walmart specifically today, do you anticipate it will bring in a different or broader demographic to walmart, maybe a higher end consumer than weve seen in the past it has the potential. Thats the key to this whole bill. Go ahead, bill okay. I think thats the key to this whole, to this whole play. Thats the key if walmart is able to bring in new customers, and we see that in the top line growth that comes from either new customers or more frequency from their existing customers it would be a big, big win for them particularly if they can bring in a different demographic if they are just shifting their store business to online channel it will cost them money. As we watch this over the next six to 12 months thats one of the leading indicators for me. We certainly will be watching it thank you both for joining us today. Up next, filmmaker tosca musk discuss the increasing competitive streaming business and give us some insight into the management style of her brother elon heres a look at some of the Top Performing consumer stocks were back in two minutes. In the human brain, billions of neurons play in harmony. For 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 to the closing bell. The battle to gain sub describers dont be fierce between streaming companies. With at ts warner media announcing it has partnered with j. J. Abrams bad robot pictures but forecasting a large drop in subscribers, meantime First Look Media which cofinanced the film spotlight is planning to launch a new streaming service and is announcing right here on closing bell right now it will partner with passionflix a streaming Video Service specializing in romance content. Joining us now for more is passionflix cofounder tosca musk a very good afternoon to you both thanks for joining us. Drew what exactly is topix thanks for having us on look we recognize that the Media Industry has turned upside down and everybody is trying to get in the streaming game p. M. Thats disney or amazon or apple or one of the large a mass broad players. We think the Winning Strategy is having this portfolio of niche channels that we can super serve audiences and then draw them in to have more sticky subscribers who dont turn out, less price incentive and also have lie levels of engagement we think thats a Winning Strategy for our company, and in doing some we now have the launch this year which were excited about. It will launch with 400 hours of programming. Centers around the human center of programming which is socially conscious kind of stuff. Best way to describe it is kind of like spotlight, the way people responded to that our Second Channel which were here to announce today is investment we made in passionflix. Tosca, to that point, tell us a little bit about passionflix how its different than other streaming sites. Passionflix is a streaming one that takes best selling books and turns them into series were focused on female gaze and female content that makes us different. Where is the opportunity there . Clearly theres lots of romantic movies and tv shows out there and they are available on netflix, they are available on disney, they are available on hbo already. Well we dont actually take that many licensed films we actually make a lot of our films. We take best selling romance novels and turn them into movies and series were a distributor and a Production Company most of our content is original. How did you come up with the 4. 99 price point . How did you weigh that up . We think that in the market we want to price it so consumers can be drawn to it the 4. 99 pricing is based on annualized subscription. Well test other pricing but for us we think thats right trigger for a niche channel in the market compared to the other offerings. Ill say the niche communities of people drawn to these channels are less price sensitive. Youre super serving their needs. How large of an audience you can expect if its really niche if people really want this highly concentrated genre niche means distinct not small. We think theres opportunity for millions of subscribers on our platforms even though its niche. Tosca, i want to ask about your brother, if i may how hes doing this year after what was clearly a very challenging and stressful year last year. Is he notably changed in terms of i had sentiment i think that my brother is doing just fine. Thanks thats good to hear what your take on his management style . What have you observed down the years . You know, at the end of the day im very fortunate to have two amazing brothers who have been incredibly supportive of everything that i have done. And, you know, the best advice that they have given me is to be laser focused and to be determined, and diligent, and to not be fearful of failure because at the end of the day you could fail, but you need to pick yourself back up and keep going. Tosca, in terms of, i guess, the dynamic between you and your brothers are you and investor in any of their companies and have they invested in yours so, again, my family and i are incredibly supportive of each other in so many different ways and im very fortunate to have some involvement in theirs and they are very generous as to be some involvement in mine but not significant. I just have to ask because im the space correspondent here at cnbc. Would you go to mars oh, good question Somebody Just asked me that. And i think if my kids wanted to go i would go with them. Interesting okay just lastly, drew, looking back at topic and the streaming service a lot in focus especially from the news we got from apple how would you sum up the competitive landscape. We think definitely more consolidation in the market at the larger players we think there will consistently be space for channels that are distinct and serving niche audiences. We think that will always be the case i dont think they are competitive they are additive. On average the u. S. Consortiume buying four to six channels. Thank you both for joining us good luck with topic as well up next a potential fbi probe and new rico reports as federal investigators are looking into a fund cofunded by thiel. Coming up on fast money, one top technician says 3 downg uld incohit key levels well tell you which ones they are and which one you should buy now. Liantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. 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. Up next, peter thiel under pressure the fbi is gag it a Venture Capital fund he started. The reporter who broke that story joins us next. Tomorrow morning on squawk alley dont miss our interview with rohit chopra. More close bell after the break. It was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo