Transcripts For CNBC Closing Bell 20240714

Slumping and Global Growth concerns back in the headlines, as chinas Economic Data comes in weaker. Joining us for the entire hour, final hour of trade is keith bliss, managing partner and ceo of iq capital usa. Keith, welcome thank you very much you and i were just chatting about the fact that you were noting that youre kind of surprised that the stock market isnt down even worse. I think its really resilient and speaks to the trend weve been seeing throughout the last 30 days for sure and ive been a big believer that well continue to trend higher throughout the rest of the year but think of Something Like this that happened 45 years ago, when we did have real supply concerns and the kingdom of saudi arabia was the big player in the market now its much more dispersed we were not a big player. At all. For a variety of reasons i am grateful and pleased at the resilience of the equity market on news like this today. Even some energyimporting nations like china, for example, you didnt see a big selloff. You didnt. Remember, china and japan had holidays today, so their markets were blunted a little bit. Key factor. But even still, i think what youre seeing, though, wilf, is that the mere fact that you do have other places to go buy your oil than just the mideast will staunch us now whats really interesting is the politics under this event. Well talk about a little bit more on that later on. Lets focus in on todays big move in oil and Energy Stocks. Seema mody is following the stocks moving the most following the strikes over the weekend in saudi arabia, which knocked half the countrys output eamon javers has details from the white house. And joining us is seema mody wilf, oil closed up by over 14 on the day, but at one point was up as much as 19 , the highest daily spike in history, following Saudi Oil Facility attacks, which knocked out 5. 7 Million Barrels of output. Roughly 5 of Global Supply. Energy is the lone outperformer today, thanks to higher oil pri prices you have devon energy up 13 and some of the major producers like chevron and exxonmobil also higher on the day. Key questions that traders are now trying to answer, how long will it take saudi to return to full capacity . Meantime, how will opec respond to limit Oil Disruptions and will key importers in asia look to alternative suppliers for oil like ugrussia and the us sarah . All good questions. Seema, thank you the Trump Administration weighing in early and pledging to support saudi arabia. Eamon javers has more from the white house. Eamon . Reporter sara, thats right. The Trump Administration is weighing in. Were hearing from some cabinet skrars he secretaries here, they are willing to go so far to place the blame for these attacks directly on iran the president has not been willing to do that take a look at the president s tweet from earlier today, where he raised the issue that iran was possibly involved here, but then he says, now they say they had nothing to do with the attack on saudi arabia, well see, question mark so the president not willing to go as far as some of his cabinet members for attributing the blame from some of those tax the president is participating in an event in the oval office here shortly we do expect supporters will be in the room and theyll have a chance to ask him about this we may hear more directly on camera from the president here in a couple of minutes and well bring that to you if we get it, sara and this all sets up us for a pretty interesting meeting in june this is a president who has wanted to bring the iranians to the table, who has suggested in the past that he would meet with iran without any prep conditions he bristled on twitter about that today saying he never said he would meet with iran without any prep conditions. But clearly, this is a president who relishes that big set piece negotiating style where he can sit down one on one with some of these leaders around the world weve seen that with kim jongun repeatedly if he can bring the iranians to the table, you get the sense the president might be in a dealmaking mood that may be why we see him holding off on attributing blame to the iranians, because he wants them to come to the table. That meeting next week will be a key one in new york and well bring you that as well eamon, bring us those headlines if the president does speech lets bring in helima croft. Lets start with you 14 spike in oil precis. Does that feel about right what are the key factors youre looking at from here as to whether that holds, drops forward, goes back i think the key question is, whats the timeline for the return of the saudi barrels . We had heard that potentially one third of production would be coming back today or tomorrow. Theres really question marks about that theres a question about the extent of the damage was it more serious than initially reported are we looking at an extended outage of 3 million plus barrels from saudi arabia. And the question is really, who fills that gap yes, the u. S. Is a big producer, but theyre not a swing producer the question is how much is saudi willing to draw down their inventories and which other countries that can surge production, how much can they surge to meet supplies into asia asia is now being supplied by saudi by drawing down inventories. The question is, how long can they do that i think the other question, helima is how will king salman respond. I think the question really is will crowned prince mohammad bin salman respond hes the hawkish crowned prince. The question is, if youre saudi arabia, youve had an escalating series of attacks on your infrastructure, the shiba field was attacked last month. Are you going fob willing to just sit back and continue to let these attacks happen and if youre President Trump, if your officials are saying the attacks came from iran and not from yemen, ways the u. S. Going to do about this iham, what is your take on the president S Administration the broader members of the administrations response, why they continue to point to iran and why the president hasnt done so himself . I think theres a clear rift here i think many members of the administration see iran as behind this and the president knows how to redraw lines. I dont think he wants to get complicated in a war scenario or any military operation that leads to serious casualties. If we do get an escalation with iran, its a potential for additional strikes on oil assets so youre talking oil north of 90 and im not sure thats what hes looking for in an Election Year or in 2020 ahead of elections. So i think hes very careful and redrawing lines. Does it tell us anything about vulnerability. The fact with drone strikes you can wipe out or temporarily suspend so much of saudi arabias production and whats the warning for other Oil Facilities around the world . Absolutely. The attack weve seen here, if its iran or iranian proxies, its a secondary issue that theres asymmetrical warfare here thats going to be copied by everyone. Drones are effective, not that expensive, and billions of dollars of weaponry is not able to tackle this issue its a structural issue. Critical infrastructure is at risk and we dont have an effect eve answer yet definitely the saudis are still susceptible to attacks i dont think that well likely see a big attack like this one i think the iranians are likely to be much, much more careful this time around they probably miscalculated and this will draw the europeans closer to the u. S. In terms of sanctioning iran heres the issue. That was considered a very secure facility. In 2006, two caal qaeda trucks tried to get in and detonate and they spent billions of dollars on security after that foiled attack this was incredibly sophisticate ed equipment i do wonder if this is all were going to see the houthi are out today saying there will be more attacks we have seen pipelines hit in may, tankers struck, oil fields attacked i question why this is going to be the end if theres no forceful response from the iranians would more attacks spook broader u. S. Equity markets . I think so if we continue to see these attacks and they escalated up more. Just look at the messaging youre starting to get out of mbs saying its because of yemen aggression and also because, were seeing a remarkably reserve ed President Trump on twitter about this he clearly doesnt want to engage in some sort of military conflict with iran and i think that tells us theres a lot of backchannelling going on right now and theyll try to keep it at a minimum very quickly, the muchunloved Energy Sector is up almost 4 today, obviously on higher prices. Do you see that as a sustained move i really dont this i think once this calms down and the diplomacy takes over and the saudis get the oil field back online, were still going to pump wing we see oil come back we caught it over, but quantitatively over this morning when it spiked weve got to wrap it there. Thank you both for more on the geopolitical fallout from this weekends attack, lets bring in admiral james stavridis, former allied commander at nato who joins us by phone your boiography was too long to list what is President Trumps next move here . Im not sure the saudis will give me another visa given my timing, but i would say that President Trump is going to kind of hit pause here. Its interesting to consider that the most hawkish adviser he had was john bolton, who i think would have been pushing hard for an aggressive response here, so the time is interesting, if no propitious that he departed when he did right now, pizza boxes are flowing to the pentagon where theyre generating options for the president. And those will kind of run the spectrum from relatively lowlevel increased surveillance, gather up the allies, condemning the u. N. Security council, deploy the evidence, but pretty soon hell see options like use military force. Probably covertly initially. Using special forces, using stealth, using Cyber Attacks and there will be some pretty aggressive options that are put in front of him. I agree with the general tenor of the conversation so far, that the president will be a bit of a speed break on doing anything precipitous here, but certainly, there will be a day or two of quiet. Well get a Damage Assessment from the saudis. Thats when the next set of moves will really start to unfold admiral, clearly weve been relatively close to military action in recent months, anyway. What percentage chance would you say that even though stealth attacks would take place in the coming weeks i would say at this stage, theres a 10 to 20 chance there would be covert action of some ki kind clearly there will be those around the president saying, cuff got to respond. If you look at this drumbeat of escalation from iran, at some point there has to be an International Response from an attack on the International Energy system. But i would still call that in the 10 range, maybe 20 i think the odds are still quite high that cooler heads will prevail here the key, however, is iran is not going to stop this behavior until theres some kind of a renegotiation of an agreement, because the sanctions are really hurting them and the fact that iran has taken as dramatic a step as this attack, will, indeed, push the europeans more towards the u. S. Position i dont think this is good tactics for perhaps even more strategy by the iranians so youre in riyadh so tell us a little bit about the reaction there this is a strike at the heart of saudi arabias oil industry. And how you expect leadership to respond. Everybody i encounter here, and ive been having a series of pretty senior meetings, is very resolu resolute theyre very measured. They are still continuing to try and build the case i think theres little doubt here that the iranians are behind this. And i think you will see a response, but the saudis will want to do that very much in concert, not only with their own Alliance Structure here in the gulf, but with the United States and i think that that is why were going to take a couple of days to really put those options together, examine the evidence we really want to have a tightly suitcased presentation to make if were going to take dramatic action admiral, to what extent has this attack exposed saudi weakness at key sites where the military or oilrelated. And do you think theres going to be more attacks that they cant defend i think it exposes a very significant weakness in Global Energy i mean, i would say, really, this could happen to any nation that has enemies and frankly, its not going to be big, Ballistic Missiles that are attributable its going to be a new kind of strategic triad of Cyber Attacks, drone attacks and possibly special forces. Those three things, i dont think any nation is particularly well prepared to defend itself against. And i think youll see a lot of capitals scrambling to look at this and think about better defensive systems against those three things the saudis are very well defended against conventional attack, very well defended against Ballistic Missiles but not so much against this and theyre in the same boat in that regard as almost any other nation admiral thanks for joining us. What a pleasure lets hope we have a better topic next time. Absolutely. Keep us posted from riyadh. Admiral stavridis, thanks for joining us still to come, well have much more on todays oil moves and the impact on the oil sector when we talk with harold hamm. And Purdue Pharma filing for bankruptcy, filing thousands of lawsuits against the company well tell you what purdues chairman said about the move and how the sector is reacting next. And numbers out of china over the weekend. Industrial output growth slowing to its lowest level in 18 years. And in the u. S. , the Empire State Manufacturing index missing estimates by a point, coming in at 2. 0 in september. Dow is down 114 points, 45 minutes until the close. Well be right bac [upbeat action music] pilot were going to be on the tarmac for another 45 minutes or so. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Opioid maker Purdue Pharma filing for bankruptcy protection over the weekend as it faces thousands of lawsuits relating to the Opioid Crisis cnns david faber spoke earlier with purdue chairman, Steve Miller Steve miller is a longtime hand when it comes to restructuring, having also helmed aig, for example, more than ten years ago after it restructured itself during the financial crisis hes been at purdue about a year the Company Files for bankruptcy and equally important or perhaps even more so, they offer a proposed or at least what they call a principle agreement on the landmark opioid Litigation Settlement theyve got 24 states that have signed on. Now, two previously have also settled with purdue, but there are 24 state ags or 24 states that either oppose this current s settlement or havent been heard from one way or the other. And the key question is whether this settlement will actually stick. Involved in it is about 10 million of value they say will go towards addressing the Opioid Crisis through the bankruptcy, the restructuring of purdue, and then the reestablishment of the company which will exist essentially to help fund things to treat people who have opioid addiction. For example, doses of tens of millions of doses of opioid Addiction Treatment at low or no cost one provision of the deal. But having heard from a number of ags today, there seems to be a focus on the sackler founder, the founders of purdue, while contributing at least 3 billion to this settlement, seemingly, its not enough for many ags out there who say, they want more. I did ask mr. Miller, what about the sacklers and did you negotiate hard to try to get them to give as much as they possibly could over the last year, have been completely transparent with the plif plaintiffs and have shown them every penny that went from the company to the family. Period, full stop. What the family then did with the money is, you know, not our business, as the purdue company, its what the family does. And the family is scattered all over the world so its not surprising that there may have been transcripts. But thats not our issue hes talking there about recent reports of perhaps as much as 1 billion worth of wire transfers from the sacklers outside of the country that was something unearthed by the new york ag, Leticia James so this will continue. But from mr. Millers point of view, sara and wilf, he says its a fork in the road. You can either keep litigating with us, at which point well continue to go through resources that otherwise will be applied immediately towards the crisis at hand. I was just wondering, david, what the bankruptcy filing means for this next chapter . For a company thats facing, what, 2,600 government and other entity lawsuits against it whether the bankruptcy filing is any sort of line in the sand or this is just going to completely haunt them for years and years its more that the plaintiffs and litigants are going to join in the settlement, understanding at least from mr. Millers point of view that fighting will only diminish the potential returns that actually could be used by the states that are hardest hit by the Opioid Crisis so thats the root theyre going. But it sounds like yeah . It sounds like the ags arent exactly signing on with this t settlement thats the key question i did ask him, as well how many do you need in order to get approval by the Bankruptcy Court . He said, we need a majority. 24 is not quite enough, perhaps, but he wasnt clear on what number constitutes and its complicated, what number would constitute enough for a bankruptcy judge to say, i sign off on this and youre all good. David, thank you very much. Sure thing. Weve got a news alert on another state cracking down on vaping sue herrera has the details for us hi, sue. Hello, wilf indeed, i do californias governor gavin newsom just signed an executive order, directing the California Department of Public Health to launch a 20 million statewide digital and social Media Public Awareness Campaign to educate the youth, young adults, and adults about the perceived problems with vaping he also announced that he just signed a bill, sb39, that would tighten the requirements placed on retailers in terms of stricter age verification. Very similar to what happens when you go to buy liquor or wipe in california they want to see your i. D. But apparently, its a little loser in california and now thats going to change because the governor just signed sb39, which tightens the age requirements on vaping and of course, it follows new yorks decision yesterday. So, back to you guys all right sue, thank you and dont miss cnbcs documentary, vaporized americas ecigarette diction on this topic tonight at 7 00 p. M. Eastern weve got about 36 minutes left of trade. Lets send it over to mike santoli for the market dashboards hello again crude oil is up again, but really just returned to a recent level. Well take a look at some of the relationships with oils and stocks here. And good times roll, they continue to roll in the highyield credit market thats probably a good thing for stocks well take a look at that, too and shaking it up. Were seeing a little more evidence of that really aggressive rotation that we were tracking all last week and finally, chancy rendezvous is the dollar getting to a critical point on the charts well take a look at all of that so, hello again. This is the ratio of the Dow Jones Industrial average to the price of a barrel of crude oil theres no realworld dynamic going on here. You cant buy oil with dow points, but it does show you weve basically been in a trading range for years with this relationship. This is when oil was crashing and the market came back but really, this is the latest move with Oil Prices Going up and the dow really absorbing it relatively well. If you go back into the early 80s, this was under 30. So Financial Assets were really trailing what was going on in terms of commodities i think this is really part of the reason why the market is pretty even keeled about whats going on with the oil market the Oil Intensity of the economy not what it used to be this basically says, nothing yet out of the range that we saw in oil prices or oil relative to the market mike santoli, thank you thats sort of the chart of the day. Were now an Energy Producer it doesnt hurt us as much, right . For our economy, if oil prices are spike in this cway, when we were purely consumer the Energy Complex is not a big a deal in our markets as they were 10 or 15 years and youre absolutely right in pointing it out. We are producing a lot of oil so we can take this shot. We couldnt in 1973 when they did the embargo and all of a sudden we were out of oil and had long gas lines i remember my dad sitting in line but today, yeah, its a much different picture. What were talking about at the top, the resiliency of the market with a shock like this. At 62 bucks for wti, as well, is the consumer still able to be as strong and resilient as its been yeah, something we were talking about before, i see the increase of this event and perhaps the increase in the price of oil as a deflationary investment, or deflationary effect when people start making decisions about where to put the dollars that they have all right okay, thank you. Well talk more with you after the break, uber and lyft upgraded today at hbcc well get word on the street calls on those, next and later, peloton hitting a speed bump as it heads toward an ipo. Well speak with the ceo of the National Music publishers Music Association about why their ai ains tion just doubled it clmsgast the fitness startup were back in a minute dont go anywhere. But when a recall happens, perfectly good food goes to waste. Now, weve got away around that. Looks good. Were on target. Blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. Its used by some of the biggest retailers everywhere. A nice wedge. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. Welcome back to closing bell. Half hour to the close time now for word on the street. Hsbc upgrading uber and lyft both to buy, but the firm did lower price targets on both stocks to 45 from 49 a share for uber 62 from 67 for lyft. The weak upgrade. Lowering the price target, at the same point i knew you were going to complain about that. The firm says the zoom phone is a new frontier and sees upside potential and stifel downgrading aurora can miss to sell citing nearterm outlook as negative as well as Investment Sentiment for the sector on the uber and lyft one, theyve pulled back significantly. Interesting time to get an upgrade as were getting the peak fears around reworks ipo do you think theyve been linked, the two. The share prices come down in lieu of that potential ipo something is going on with the unicorns of that era now everyone is very much gun shy, watching what happens on those. If you read the note closely from hsbc on both uber and lyft, what he talks about in there is the free optional that he gets with things like uber eat and uber freight and things like that in their view, the investors are really looking at it as a Ride Hailing Company and ignoring all of these other businesses. The Public Markets will take that for so long we saw that with amazon 20 years ago, where jeff bezos kept saying, im more than just a book seller. Just watch and he paid off, and theyre willing to deal with the losses for years and years. The question will be, will the uber lyft investors continue to support it i really wanted to ask you about the aurora downgrade you have liked cannabis growth as a last chance trade sentiment on the Group Overall right now seems to be not as hot. How do you distinguish i think what happened with cannabis is 2017 when all of these companies came to the market, everybody saw this as the next gold rush and suddenly everybody was going to be making hemp rope and hemp paper and we were going to have medicinal and recreational products all over the world. That just hasnt come to the fore like any company, it has to grow and mature but the big difference is Constellation Brands Constellation Brands has put a but under the cannabis stock by derisking the needs of these companies. So what theyre saying is that these companies are sucking a lot of capital right now and unless they have a bigtime consumer partner, its going to be very difficult for them to access the Capital Markets we have got just 28 minutes, 27 minutes left to go of trade were down 150 points on the dow. Here are the key things driving the action oil prices in Energy Stocks spiking on concerns of supply disruptions following a spike on Oil Facilities over the weekend. Those geopolitical tensions have the rest of the market on riskoff mode. Gold higher and yield slumping and Global Growth concerns on the back of the headlines on the back of weak Economic Data from china. Time to get a cnbc news update with sue herrera. Hello, sara heres whats happening at this hour another move against vaping. Officials in illinois are now moving towards a proposal to ban flavored ecigarettes in chicago. Mayor Lori Lightfoot joining senator dick durbin to highlight the problem of vaping products being aimed at children. Weve got to convince students first that its a bad idea to vape weve got to convince their parents that its not a harmless cloud of smoke around their head and weve got to take into consideration today that 5 Million High School students across the United States are using vaping products. One firefighter is dead and seven others injured after a gas explosion levelled a building in a small town in maine. Firefighters responded to a report of a gas smell this morning and while they were investigating the scene, the building exploded. Multiple homes in the area were also damaged new orleans quarterback drew brees is expected to be out for six weeks after injuring his thumb sunday in los angeles. He tore a ligament in his right thumb as his throwing hand hit the hand of the rams defender, aaron donald the saints went on to lose the game, 279 a lot of injuries for this early in the season. You are up to date thats the neuews update this hour guys, ill send it back downtown to you sue, thank you. Coming up, on a day like today, who do you want to hear from well, weve got the chevron ceo, michael worth, to weigh in on the spike in oil, the impacts of this weekends attacks on the energy industry. One of the Largest Oil Companies in the world, also the leader right now in the dow dow is down 145. Well be right back. Limu emu doug and now for their service to the community, we present limu emu doug with this key to the city. [ applause ] its an honor to tell you that Liberty Mutual customizes your Car Insurance so you only pay for what you need. And now we need to get back to work. [ applause and band playing ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Tv aas many safety features powas the rx, the new. The lexus rx has met its match. If theyre talking about you. You must be doing something right. Experience the style, craftsmanship, and technology that have made the rx the leading luxury suv of all time. Lease the 2019 rx 350 for 399 a month for 36 months. Experience amazing at your lexus dealer. Welcome back 22 minutes left of trade lets get over to mike for todays second installment of the dashboard. Mike wilf, the good times continue to roll among Credit Investors the high yield market has remained very firm, kind of underwriting the equity market strength and really ratifying this rally weve seen lately i like to look at the relationship between the highyield bond etf and this 7 to 10year treasury etf. This is a proxy for Risk Appetite and credit markets and basically the junk bond spread, even though its not exactly the spread the orange is the treasury etf yields went down a lot in august that is now reversed to some degree and high yield has remained very, very firm in the face of this yield push higher by the way, the Oil Price Spike today is also a benefit in some ways to the highyield, because you have a lot of variant debt and Energy Companies that basically the high prices is a windfall and it makes them kind of have better liquidity and better credit profile. So this right now, more or less, says that the stock market rally is probably on decent footing, unless this changes, guys. Mike, thank you three jpmorgan metals traders have been charged with market manipulation. Wilfed, youve been digging into this two former and one current jpmorgan Precious Metals traders have been charged with alleged spoofing, market manipulation, and fraud between 2018 and 2016. Spoofing involves placing orders with the intention to cancel them before they can be executed in order to benefit over existing trades. Michael novak is a managing director and heads the global Precious Metals Trading Division while greg smith is an executive director both were put on leave by the firm christopher jordan is is a former executive director. Novaks attorney said today, its truly greatable that the doj decided to go forward with the prosecution of mike nowak who has done nothing wrong we look forward to representing him at trial and expect him to be fully exonerated. The Justice Department is conducting multiple criminal investigations into big banks with the corporate of traders that have pleaded guilty to spoofingrelated crimes. In june, bank of america, Merrill Lynch settled with the doj and the ftc for a combined 36 million. As part of the terms, the firm admitted it was at fault for two former traders who allegedly manipulated the Precious Metals market jpmorgan has not settled nor pleaded guilty, nor made any specific comment, but there have also been no charges made against the bank itself. The share price not really reacting unsurprisingly in relation to this, sara as we watch for further developments i was just going to say, in the context of scandals and issues, how big of a deal is this the banks not been charged specifically, though there are more traders involved for them than have been for bank of america, who ultimately then pleaded guilty thats the swing factor were attributing the moment but as we stated, these are only allegations to individuals at this stage and the bank itself hasnt been charged. So we need to see how it plays out from here, but one to watch. No spoofing still spoofing. Exactly. With just 1 minutes left to trade, were down 152 points on the dow. Energy stocks getting a boost, though, following a spike in oil prices on the back of that attack on saudi facilities well dive into the moves with chevron ceo michael worth. Thats coming up you dont want to miss it. 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. 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. I mean, if you havent thought abfrankly, youre missing out. Uh. The mobile app makes it easy to manage your policy, even way out here. Your marshmallows. Get digital id cards, emergency roadside service, even file a. Whoa. Whoa. Whoa. Whoa. Whoa. Whoa oops, that cheeky little thing got away from me. My bad. Geico. Its easy to manage your policy whenever, wherever. Can i trouble you for another marshmallow . General motors sinking today amid a massive strike. 50,000 autoworkers against the company. Phil lebeau has thelatest to u against detroit. A couple of headlines coming out of the white house the president says that he would like to see the strike resolved rather quickly and has a strong relationship with the autoworkers. Interesting comment, given the fact that while weve talked with autoworkers here, most of them have said, not going to comment on the president , but i do not get a sense at all that there is a lot of love between the uaw workers they talked with and President Trump. In terms of the negotiations, which did resume today between General Motors and the united auto workers, a lot of discussion about what type of job offers gm has made the company came out and said we are offering at least 5,400 jobs theyre not saying its official, but they might put an electric pickup truck in this plant here this is the plant in detroit h they may agree to have the uaw run an electric battery plant. It would be jobs for the uaw in that area. Guys, as you take a look at shares of General Motors, keep in mind that the stock, while it dropped as much as 4 today, most analysts believe youre looking at a stock that is likely to feel an impact only after a couple of weeks. Like, you would have to be extended well beyond a couple of weeks. Then you might see an extended impact in terms of what happens with the stocks. It will be a little bit of a hit, but not much. Guys got it. Phil, thank you. Energy stocks are soaring right now after a coordinated attack on two of the Worlds Largest crude processing facilities in saudi arabia that knocked out almost 6 of Global Oil Production just moments ago, President Trump saying it looks like iran was responsible for those attacks and secretary of state mike pompeo will be going to the region soon. This has been the administrations line. Joining us now to discuss the fallout is paul sankey, oil analyst at mizuho. How do you begin to think about the impact for u. S. Oil producers, many of which are soaring double digits today . Well, you know, not wanting to be dancing on someones grave, but its obviously a positive for the u. S. Producers. We have the lowest cost of capital in the permian, Tremendous Oil reserves. Now the biggest producing oil field in the world and we always thought that being a major producer in texas would be probably a pretty good thing to be. We were absolutely shocked by whats happened in saudi arabia. I cant tell you and now were thinking, okay, who are they going to attack right, thats the situation were in why so shocked . Because you thought theyd be able to defend themselves, or you never thought that the iranians, if indeed, it was them, would take things to this level . Both, both. Weve thought that the facilities were triple redundant, in the middle of nowhere. Giant in scale, very, very difficult to shut down but theyve been shut down so, you know, thats point one and as far as, you know, what happens next, weve obviously got an ongoing situation with the houthis, but everybody is clearly saying this came from iran so so what are you going to do about it so if you do see a saudi response against iran, what would that mean for the price of oil . It will be horrific i mean, its potentially a fullscale war situation in the middle east, obviously we always used this rhetoric that the u. S. Is not a swing producer i mean, who can make up the shortfall, if it persists from the middle east and saudi in particular from an extended period of time weve been big proponents of not raising capex for higher prices were trying to get these companies to actual generate some returns at the moment, what youre going to see a u. S. Government response in all likelihood we really dont know how long were going to be out here with this loss from saudi but obviously, were looking at the iea. We dont want usmps. You like many on wall street have not been fans of the emp companies. Its the worstperforming sector yeartodate is this a total game changer for you . Yeah, we upgraded past the energy this morning, because we wanted to get along the permian immediately. Some people think, is this going to be a transgent effect and as a result, youve structurally raised the value of permian. So we upgraded alongside our other names like eog and the other top permian names we love. Thanks for joining us, great to see you President Trump speaking moments ago with crowned prince of bahrain. Lets listen in. Were always going to be with them and i know theyre always going to be with us. We have a tremendous relationship militarily, but we have also a tremendous economic relationship, trade, and were going to be discussing all of those things well certainly be discussing what took place over the last two days in saudi arabia absolutely. And well be discussing the middle east. But our relationship has never been stronger than it is right now. And i think that is largely based on the relationship that we have. So i look forward to having our discussion thank you, mr. President. Its a great pleasure to be here would you like to Say Something . I would like to say and thank the president for receiving me and my delegation here today im here to convey the greetings of his majesty and the people of bahrain to strengthen the relationship, which is based on shared values, where they overlap. And i deals. We are primarily going to focus on discussions related to Security Enhancement and trade enhancement. We signed today an agreement to purchase additional or purchase our first Patriot Missile battery systems. And it couldnt have come at a better time. Good timing absolutely. And we seek to strengthen americas ability to trade with the world. And we have some concrete ideas on how we can do that. Well, thank you very much i look forward to the day and spending time with you and thank you all very much. Ill be doing a News Conference outside in a little while. Just part of the trip. Were going to new mexico and to other places for two and a half days and many of you will be with us and i look forward to that but in particular, i look forward to our meeting thank you thank you very much have you seen evidence, proof that iran is behind the attack well, its looking that way were having some very strong studies done but its certainly looking that way at this moment and well let you know as soon as we find out definitively, well let you know but it does look that way. Do you want war with iran do i want war i dont want war with anybody. Im somebody that would like not to have war. We have the Strongest Military in the world weve spent more than 1. 5 trillion in the last short period of time on our military nobodys even come close we have the best equipment in the world. We have the best missiles. And as you say, you just bought the patriot system, theres nothing even close we did. But, no, i dont want war with anybody but were prepared more than anybody. Two and a half years ago, i will tell you, it was not the same thing. And with what weve done, weve totally rebuilt our military in so many different ways, but weve rebuilt it and theres nobody that has the f35 we have the best fighter jets, the best rockets, the best missiles, the best equipment but with all of that being said, we would certainly like to avoid it what are the options if not a military well, we have a lot of options, but im not looking at options right now. We want to find definitively who did this were dealing with saudi arabia, were dealing with the crowned prince and so many other of your neighbors and were all talking about it together. Well see what happens is it the responsibility of saudi arabia say it . [ inaudible question ] i have no meeting scheduled i know they want to meet i know theyre not doing well as a country. Iran has got a lot of problems right now that two and a half years ago, and even a little bit more than that, when i came in, its hard to believe, its almost three years, but two and a half to three years ago, they were causing a lot of trouble and well see what happens but well let you know definitively as you know, there are ways to see definitively where they came from and we have all of those ways. And thats being checked out right now. Are you scheduled to meet with the iranians without preconditions . Well, you know, there were always conditions, because the conditions, if you look at it, the sanctions are not going to be taken sanctions are massive. Theres never been sanctions put on a country like that and i think they have a tremendous future, but not the way theyre behaving well see what happens in terms of this attack secretary pompeo and others will be going over to saudi arabia at some point to discuss what they feel theyre going to make a statement fairly soon. But they also know something that most people dont know, where it came from, who did it and well be able to find that out, figure that out very quickly. We pretty much already know. Mr. President say it . You said the United States is prepared for war the United States is more prepared than any country in the history of if any history, if we have to go that way as to whether or not we go that way, well see well have to find out definitively who did it. Well have to speak to saudi arabia they have to have a lot of they have to have a lot in the game also, and you know theyre willing to do that and i think Everybody Knows theyre willing to do that so well be meeting with saudi arabia well be talking to saudi arabia well be talking to uae and many of the neighbors out there that were very Close Friends with were also talking to europe a lot of the countries were dealing with, whether its france, germany, et cetera, talking to a lot of different folks and were figuring out what they think. But ill tell you, that was a very large attack and it could be met with an attack many, many times larger, very easily, by our country. But were going to find out who definitively did it for us can you clarify, mr. President. You said that you think that iran responsible for the attack. I didnt say that why do you say that . I said, i think we know who it was. But i didnt say anybody you said certainly, it would look like to most that it was iran, but i did not say the way you said it. Do you think it was launched from iran . Youll find out in great detail in the very near future we have the exact locations of just about everything. Youre going to find out at the right time, but its too early to tell you that now the oil prices that are rising now they havent risen very much and we have the Strategic Oil reserves which are massive, and we can release a little bit of that and other countries, including bahrain, but other countries can be a little bit more generous with the oil and youll bring it right down no, thats not a problem it went up 5 and that is not a problem. And you have to remember, were in and out the largest producer of oil and gas in the world. So a lot of people in the old days and this happened over the last very short period of time, were number one in the world by far yes, you are. By far. So i never want to be benefited that way, but the fact is, there are those that say we benefit. I dont view that as a benefit but we are certainly we take in more money than anybody else from energy, not even close. Mr. President , do you still think its the responsibility of the saudis to defend themselves . I think it is certainly the responsibility of them to do a big a big deal of their defense, certainly i also think its the responsibility of the saudis to, if somebody like us, which are the ones are going to help them i know that theyll monetarily be very much involved in paying for that this is something thats much different than other president s would mention, john, but the fact is that the saudis are going to have a lot of involvement in this if we decide to do something, theyll be very much involved and that includes payment. And they understand that fully but theyre going to be look, theyre very upset and angry they know pretty much what we know they know pretty much where they came from. And were looking for the final checkpoints and i think you wont be surprised to see who did it mr. President. [ inaudible question ] well be discussing it, yeah. [ inaudible question ] well, were going to see. The elections on tuesday. So its tomorrow so you have an election tomorrow so i would think it would be afterwards, okay but we you do have an election big election tomorrow in israel and that will be a very interesting outcome. Its going to be close its going to be a close election north korea i dont want to comment on that the relationship is very good, was i dont want to comment. Would you be willing to go to north korea . Probably not. I dont think its ready i dont think were ready for that i would do it some time, at some time, at a later future, and depending on what happens, im sure hell love coming to the United States, also. But, no, i dont think its ready for that pb i think we have a ways to go yet. Do you stand with the autoworkers in the strike against gm. Well, i have great re vipotes from the autoworkers i dont want General Motors to be building plants outside of this country as you know, they built many plants in china and mexico and i dont like that at all my relationship has been very powerful with the autoworkers. Not necessarily the top person or two, but the people that work, doing automobiles. Nobody has ever brought more companies into the United States you know, i have japan and germany and many people have been bringing Car Companies in and building plants and expanding plants and many things are happening in ohio, including lordstown, many positive things are happening. We have many plants that are being expanded or built new here in the United States, many more than weve had for decades and decades. So nobodys been better to the autoworkers than me. I would like to see it work out, but i dont want General Motors building plants in china and this was before my watch i dont think theyll be doing that i had meetings with mary barra, the head of gm, and i dont want them leaving our country, i dont want them building in china, i dont want to build them in other countries. I dont want these big massive plants built in other countries and i dont think theyll be doing that anymore you know, General Motors makes most of its money in the United States and and too bad they spent billions and billions of dollars outside of the United States before i got here unof the things thats very important in the usmca, for the farmers, and for the manufacturers, everybody everybody wants usmca. Its very important. More so now than it was two weeks ago. But people really want it. Im sad to see the strike. Hopefully its going to be a quick one. Has diplomacy been exhausted . Its never exhausted. In fact, the crowned prince can tell you, especially in your part of the world, its never exhausted until the final 12 seconds, is that right that is correct you never know whats going to happen. No, its not exhausted nothings exhausted. Well see what happens i think they would like to make a deal i know they would like to make a deal they would like to do it on certain terms and conditions and we wont do that but at some point, it will work out in my opinion. The problem was the deal that was signed by the previouS Administration was a disaster, which by the way would be expiring in a very short period of time, also. So you really dont have a deal. That deal was a very shortterm deal so that would be expiring very soon are you encourage israel an the saudis to Work Together on this issue always. I encourage everybody to Work Together the middle east is an interesting place. Israel is starting to Work Together with a lot of places you wouldnt have thought possible have you promised the saudis that the u. S. Will protect them . No, i havent i havent. I havent promised the saudis that we have to sit down with the saudis and work something out. And the saudis want very much for us to protect them, but we have to work that was an attack on saudi arabia, that wasnt an attack on us, but we would certainly help them. Theyve been a great ally. They spent 400 billion in our country over the last number of years. 400 billion thats 1. 5 million jobs. And theyre not ones that unlike some countries, where they want terms. They want terms and conditions they want to say, can we borrow the money at 0 for the next 400 years . No, saudi arabia pays cash theyve helped us out from the standpoint of jobs and all of the other things. And theyve actually helped us i would call and i would say, listen, our oil prices, our gasoline is too high youve got to let more go. You know that. I would call the crowned prince and i would say, youve got to help us out. Youve got to get some more. And all of a sudden, the oil starts flowing and the gasoline prices are down. No other president can do that no other president was able to do that or maybe they didnt try. But ive done it so now theyre under attack and we will work something out with them but they also know that, you know, im not looking to get into new conflict, but sometimes you have to. Whats your message to iran right now . Excuse me whats your message to iran right now. I think ill have a stronger message or maybe no message at all when we get the final results of what were looking at but right now, its too soon to say. Theres plenty of time you know, theres no rush. Well all be here a long time. Theres no rush. Ill have a strong message or maybe no message at all depending on the final results are you concerned about the risk of allout war in the middle east . Im not concerned at all. You dont think were a step closer to personally, im not concerned at all we have military power the likes of which the world has never seen im not concerned at all i would like to avoid. It you know, when i came here three years ago almost, general mattis told me, sir, were very low on ammunition. I said, thats a horrible thing to say im not blaming him, im not blaming anybody, but thats what he told me because we were at a position where with a certain country i wont say which one we may have had conflict. And he said to me, sir, if you could, delay it, because were very low on ammunition and i said, you know what, general, i never want to hear that again from another general. No president should ever, ever hear that statement. Were low on ammunition. And we now have more ammunition, more missiles, more rockets, more tanks we have more of everything that weve ever had before, more jet fighters. When i came here, 50 of our jet fighters didnt fly. You know that. And they were in bad shape and now we have the best fighters in the world. Everybody wants to buy them. You buying our jet fighters . We are, sir which one the f16. Thats great. You have good taste. Thats a great one so we are very high on ammunition now thats a story ive never told before breaking news. But we were very low i could even say it stronger i dont want to say no ammunition, but that gets a lot closer i said, i never want to hear that again and i never want another president of the United States to hear that again. Could you imagine, as president , when they say, were very low on ammunition by the way, stronger than that, but im not going to go there. That was what i was told and i said, i never want to be in a position like that again. And he said, could you delay, if we do something, could you delay it, as we fill up . And that is what i inherited from the past administration and in all fairness to president obama, two administrations before president obama thats what i got stuck with and we fixed it. And we fixed it good the crowned prince understands, 700 billion the next year, 718 billion. And the next year, which is right now, we just got approved, 738 billion and thats a lot of money, even for bahrain. Thats a lot. And bahrain has a lot of money. Mr. President with the election coming up tomorrow, how does that affect the timing of your middle east peace plan well have to see what happens. I can make a prediction, i sort of have a feeling, but well have to see what happens thats a big election. Thats one were all going to be watching you think netanyahu will pull it out certainly, he has a good chance, but its a 50 50 election a lot of people, if you look at the polls and everything else, its going to be very close. So well see what happens. Polls are often wrong. Annexing all settlements in the west bank, is that something your government yeah, i dont want to talk about that but thats something we were told about that they would like to do, but i dont want to talk about that its too soon. Can you elaborate a little bit on why the decision was taken yesterday to release the Strategic Reserves well, just in case we ran a little bit low on oil, we have so much with the Strategic Reserves, plus being the number one producer, we can fill them up very quickly, very, very quickly, and one of the things im doing also is im aproving the pipelines in texas we have a tremendous Pipeline System thats being held up by various agencies for very good reason for going through the normal process and were going to have to avoid the normal process, because if we do that, texas is a massive distributor, a massive producer of oil. Far bigger than anybody would have even thought five years ago. So what im going to do is expedite the pipeline approvals that will get us another 25 Energy Additional energy. I know this is exactly the opposite of the democrats. They want to have wind, solar, and i guess make believe would be the third alternative, right . No, this is something we have to do we have the greatest wealth in the world and we want to be able to capitalize on it, especially when it comes to safety. Okay thank you all very much. You talked about an urban agenda when you ran for president for the first time [ inaudible ] i think what ive done for the inner cities is more than any president has done we did that with tim scott it was his initiative and he came to see me theyre having a tremendous impact on the inner cities oakland, california, is an example. Were having tremendous success in the inner cities because of the opportunity zones. Criminal Justice Reform. I was the one that got it. Nobody else. I mean, we had people that helped, but a group of extremely liberal democrats came to the office and they said, we cannot get it president obama was unable to get it, as you know. President trump. They were all unable to get it and i got it and i got it with some very conservative senators and people that wanted it to happen and nobody else could have done it and its sort of interesting because they dont like mentioning my name, although i guess now people are understanding. But we got it. We got it done we formed a coalition with some very conservative people, as you know, and some people that are very far left. And we did a thing called criminal Justice Reform, something that nobody thought the crowned prince has seen this, nobody thought could possibly happen. Im very proud of criminal Justice Reform we did that. Our job numbers for africanamericans are the best in history you saw the new ones come out. Hispanic, the best fl history. Asian, the best in history overall, theyre phenomenal, the best in 51 years and i think will soon be historic on that one, too the economy is doing great and thats the best thing i can do did you look at baltimore when you no, when i drove through, i looked at it we flew over, but you also know that you have some sections that need a lot of help and what people dont know, i had a great meeting with Elijah Cummings in this office very early in my tenure and it was a meeting on drug prices and i saw him get emotional talking about drug prices. Seriously emotional and i was really impressed he cared about it and i would certainly be willing to meet with elijah and other people if theyd like. But i saw elijah and the feeling he had for reducing drug prices. Weve worked hard and had the first year in 54 years where prices went down but we can get them down much further if we had help from congress i think well do much lower drug prices over the next year. And i think that if Elijah Cummings would want help, i am here but i did see him at a moment that i thought was actually a very beautiful moment. I talked about it often, because i see the political rhetoric every once in a while, and i said, thats not the same guy i had in my office it was a very caring man that wanted to see drug prices lower and he wanted that for the community, for his community so i look forward to working with elijah, but i look forward to working with a lot of people, but i think opportunity zones have been tremendous for the inner cities and criminal Justice Reform is something were very proud of. Thank you all very much. Thank you very much. I dont think i have to do outside now, do i . Do i have to do outside . Can i go directly to the helicopter now ill stop by ill stop by thank you. President trump there joking with reporters, sitting alongside the crowned prince of bahrain, one of our key allies in the middle east, talking a lot about what we saw over the weekend, those drone strikes at the heart of saudi arabias oil industry, wiping out 5 of the global production. President trump saying it is looking like iran was responsible for the attacks on saudi. Not giving much, though, in the way of what he or what saudi arabia is going to do about it absolutely. I think we were wondering just conference, but also saying that diplomacy is never exhausted and the key takeaway, Oil Prices Still sharply higher on the day, 13, 14 . But off the peak, which was up about 18 to 19 . Lets send it over to eamon javers for more reaction th he is at the white house for us, as always. Reporter i thought what was interesting about that comment from the president , hes inching a lot closer to attributing this attack to iran saying that people wont be surprised when they get the definitive results, but not saying that it was iran. He doesnt want to formally attribute this to iran yet he says hes waiting on Additional Information he says his team is gathering based on evidence that they have in the region presumably, hes talking about intelligence assets. And the president not willing to go all the way to a formal attribution here in fact, bristling when a reporter said, you did just say it was iran, the president saying, no, no, no i didnt say that an important bit of nuance from the president. Not willing to go quite as far as his secretary of energy and secretary of state have gone today. And guys, on a separate font we heard the president there talking about Ceo Mary Barra of gm who hes met with we now know that a number of ceos will be taking part in a meeting at camp david tomorrow with the Vice President mike pence and ivanka trump this is going to be a meeting of the American Workforce policy Advisory Board its the third meeting of that group. Theyre going to be having a dinner at camp david tomorrow and a tour of the facility by mike pence thats a rare thing. We went back to look to see if we have found anytime. It will be an unusual setting for the ceos to hash out some of their issues about the economy and talk with ivanka trump and mike pence tomorrow ahead of the third formal meeting of the board on wednesday quickly eamon, can i just ask you about this comment and this little question that trump started answering about the fact that we were low on ammunition what was he talking about . Reporter well, you know, i dont know specifically. He says general mattis told him that they were having issues with ammunition in the u. S. Military and were going to have to find out what specifically hes talking about. He said in that meeting that hes never told this story before so were going to have to hear from the pentagon on that and what exactlyma mattis said and wlfs an ammunition short animal. A lot of times you have individual units with ammunition depletion. But military wide, thats the first time ive heard that, although the president has talked a lot about the military in general, he says, had been depleted when he came into office and his military budgets had enhanced that thank you, eamon. And mike pence, the Vice President will be sitting down with our joe kernen. Its coming up this thursday, september 19th in new york so clearly, hell bae asking about that camp david meeting with ceos. Fantastic timing and a great lineup throughout deliverying alpha. Check that out turning back to the markets, of course, they have closed now lets check in where they closed lower, but relative to the extraordinarily large move in oil prices, you would say, not that low the dow down half a percent, down 0. 3 as was the nasdaq, russell, slightly higher energy, the bestperforming sector up 3 real estate materials, Consumer Discretionary. And we did see some safe haven trading like the dollar higher and the yen higher, and some buying of bonds, but some very small moves in all of those riskoff trades relative to the huge jump in oil prices. I was watching the Consumer Discretionary space, it did get hit. The whole story lately has been the strength of the u. S. Consumer thats whats holding the economy up so lets see if the u. S. Consumer can deal with a sort of Oil Supply Shock in previous points in history, thats been painful and its caused recession thats going to be one of the questions. Joining us to talk about the market today, mike santoli, keith bliss, alicia lavigne, and paul chang, managing director and senior Equity Analyst at skosha howard wild, we have a lot to get up to but the market was only down given this much given such a big spike in oil the overall market absorbed it without much trouble more stocks up than down today the equalweighted s p was flat today. It really was a matter of what worked and what didnt as opposed to the overall market taking a hit on the news obviously, the Energy Sector getting a huge lift. But within Consumer Discretionary, i would note, dollar store is down 3 . So that was really very acute, because amazon also down almost 2 in a wall street journal story. And it has gm down. And the cars dont help either but to your point, it was more about where we took i wouldnt have been surprised if we were down a third a percent in the s p today with nothing having happened over the weekend. Thats how much we were down in the end. You cant call anything over and if oil keeps surging in a hurry and its just because of supply disruption, thats not bullish, but at this point, it didnt really disturb the overall picture. Alicia, what was your take on this lack of more selling . So the first thing is that if this had happened 40 years ago, this would have been shocking and oil would have been up 25 to 30 in one day and the market would have probably come down much further than half a percent. You know, the thing is is that weve got excess reserves globally that can actually make up for the 5 the 5 million barrel a day shortfall for the next three months. So theres enough excess reserve out there, particularly coming from the u. S so in the worstcase scenario if saudi cant get supply pack on in the next two or three weeks, we can supply to Keep Oil Prices relatively stable. The other thing about the s p, the Energy Sector now only makes up 5 on a market cap weighted basis of the s p thats why the s p wasnt really up at all with Energy Running the way it did today still, it raises the question, keith, about how long this will take what the next steps will be from saudi arabia, potentially from the United States. Where iran stands. These arent questions that are going to get answered overnight. Would you be buying oil stocks on this . I think i would will staying away from oil stocks, because weve got the commodity overbought from todays trade. I honestly think this will wash over a little bit, well get some more facts coming out there will be a response from saudi arabia, maybe the United States this will not turn into an allout shooting war you see that people want to own stocks in this because if you look at todays action, a, what were talking about and digesting, there was not this massive selloff. But the russell 2000 was the only index that was green today and it has been outperforming for the last 30 days you would think people would make the calculus, if Small Businesses have to pay more narrfor their energy spend, that will be a big hit to their pnl people want to stay in stocks. Theyre looking for pockets of where they can stay. Paul, whats your take on what else to focus on in equities in the week ahead first of all, thank you for having me. I think its important to note that this attack is unprecedented. We believe that the important point to note is not only that the scale of the impact on the market, talking about more than 5 million barrel per day of oil, but also that for the first time in modern history, we can no longer be certain the structure as saudi arabia is going to be saved and is always going to be there. And that means that Going Forward, the risk is going to be higher we should see the valuation for the u. S. And canadian are going to be higher we will see Oil Prices Pull back and some of the is helped by the soft squeeze, especially in the midcap emp names. So we may see a number of days from now, theyre going to see pullback but we think on the overall, youre doing to see a higher valuation over the next one two to three years and we think as the market settle down, youre going the see the large cap and the major Oil Companies like chevron going to start outperforming the midcap emp name we also think today the refiner is not doing well. We think that that is going to play catchup. We will leave it there, guys. We are out of time thank you very much to keith, alicia, and paul thank you the other factor i just pointed out today is that bonds rallied and yields went down thats an interesting setup for a fed meeting thats supposed to happen later this week but only a fraction of a rise up next, mark mobius tells us what he finds attractive and we will discuss the geopolitical risk facing the oil industry we will speak exclusively with e chevron ceo, Michael Wirth dont go anywhere. [upbeat action music] pilot were going to be on the tarmac for another 45 minutes or so. Chinas economy continues to cool with august industrial output growth slowing to its weakest level in more than 17 years and retail sales also coming in short of expectations. Joining us now to discuss is mobius capital partners, founding partner, author of invest for good, mark mobius so if you take the weakening china data and add it to the Global Growth story along with this huge surge in oil prices that we have seen today, what does that do for the trajectory of growth . Its really interesting to look at the emerging markets index. And emerging Market Countries generally. In the last month, the last three months, theres been outperformance of emerging markets versus the u. S. Market which is quite remarkable, because you know, emerging markets have been really underperforming. But therell be winners and losers, obviously. So if you look at Oil Prices Going up like that, a country like brazil will benefit, because theyre an oil producer. A country like turkey may not be doing so well because their costs are go up. But nevertheless, what were doing is looking very carefully at individual opportunities in polices like turkey, like brazil, mexico, south korea, taiwan, indonesia, of course, india and china are the big ones and we have more in those two countries. Mark, coming back specifically to that china data this morning, was that a sign that domestic monetary stimulus is not the perfect tool for the pressures sthair feeling in their economy, which of course are very heavily linked to the trade war with the u. S. . No question its going to be very difficult for them to boost the economy under these circumstances. Because you have an outflow, particularly in the small and Medium Enterprises countries are going to be picking up a lot of that manufacturing from china so there therefore theres a hiccoup in the entire economic structure nevertheless, its a big economy, a lot going on, and we are finding some opportunities, particularly in consumeroriented stocks, where the consumer is actually pretty wealthy now in china, particularly along the coastal cities and theres some good opportunities. If you look at whos most reliant on saudi crude, mark, its china, japan, and india did this weekends event and 13 spike in Oil Prices Today change anything in terms of your investing outskplolook and which countries you want to be in and out of of course those countries that are heavily dependent on imported oil, were going to have to watch very, very carefully but the interesting aspect of this is you might find a deal between the u. S. And china and thats a very interesting angle when you look at whats happening in saudi arabia and the fact that they wont be able to ship as much to china mark, want to quickly ask your view on gold prices you had a positive view last time you came. Where do you stand now had a great run yeartodate pull back a little after that run . Im still positive, because theres so much going on in the world thatscreating so much uncertainty. Thats one aspect. And with Interest Rates headed down, theres no yield in keeping money in the bank. Of course, there are going to be opportunities in yielding stocks, which i think are a very Good Opportunity but people at the end of the day are going to say, with a money supply going through the roof, and Interest Rates going down, why not put some money into gold, particularly given the Global Economic situation and political situation that we see. Despite the fact that stock markets continue to do fairly well mark mobius good to check in with you. Thanks for the time. Thank you up next, the interview of the day, chevron ceo Michael Wirth weighs in on tay oodsil spike and whether geopolitical tensions will keep driving Prices Higher. So servicenow put your workflows in the cloud, huh . Mmhm. 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. Oil surging today following this weekends attack on saudi arabias Oil Facilities. Its expected to knock off 5. 7 Million Barrels per day in production or about 5 in Global Oil Output joining us now on the phone in an exclusive interview, Michael Wirth, the ceo of chevron. Michael, good afternoon. Thanks for joining us. Youre welcome, wilfried. Good to talk to you. Its good to have you with us on a day like this i wanted to start by asking you, during the course of your career, gauge for us the scale and level of precise of this attack relative to other geopolitical shocks that there have been. Well, its a retirement that risks are always present in our business and its been some time since weve seen a major event in the middle east like this. You have to go back to the gulf war, the invasion of kuwait. So its been quite some time, but we prepare for these things. This is a feature of our business and so while you can never predict when an event like this might occur, you always need to be prepared. So we plan for these things and i would say when they happen, were surprised like everybody at one level, but at another level, weve actually thought about it how do you think, michael, its going to affect u. S. Oil production well, i think in the shortterm, theres not a lot of impact youll see on u. S. Oil production, because theres a lead time, and even in shale, which has been the driving growth in the u. S. , you cant just flip a switch and see more oil coming to the market so theres months of lead time in standing up new rigs and actually bringing on additional production so in the very shortterm, theres not a lot that can happen in the medium term, there can be a fair amount. In the shortterm, things like the Strategic Petroleum reserve were actually built for circumstances like that and can serve as a way to buffer through uncertain market times i guess what im wondering is, would you plan to raise your capex on an event like this. Do you think were going to see that across u. S. Oil producers and therefore get a lot more oil flowing out of this country . I think its way too early to draw a conclusion like that this is an evolving event and i will tell you, said aramco is a very capable company. I have enormous respect for aramco and if theres a company that can rebound quickly from Something Like this, its saudi aramco so i think there are still Damage Assessments being done. Theres signs that they may bring some of their production back online fairly soon, and thats the real question for how long will this supply be off the market and there are other areas where supply can come in perhaps for quickly than further rampup in the United States. Michael, how easily would it be to attach chevrons assets around the world in a similar manner and whos responsibility is the to protect those assets, yours or the states from which you operate . For you, whos responsibility is it we work with local security agencies and forces in every country where we operate the safety of our people and the security of our operations is paramount. So the proximity of an asset to a threat and what are the specific threats, that varies all around the world and it can very over time. And so frankly, thats of the highest priority for us, is to always maintain safe operations for our people and the communities around us. So its a joint responsibility and we have measure miss place that were constantly evaluating and upgrading. Michael, todays move in the price did not bring it to a level thats particularly extreme, but there has been a lot of talk about it being a reminder of the vurlnerability f the supply infrastructure out there. Do you think theres any reason to alter your longer term projections or assumptions about the commodity price . Or is this just working up against a world thats still going to be wellsupplied for a while . Well, you know, 5 of Global Supply coming off unexpectedly certainly has an impact on the fundamentals that determine prices and the question is, how long is the supply off what does this event suggest about a risk premium that perhaps has not been as evident in the market . And so, you know, the backdrop, the fundamental global, Macro Economic backdrop hasnt changed. I think a lot of the supply fundamentals havent changed in the longterm. Its early to its early to assess, i think, the longer term ramifications of this, other than to say, i do think our you know, the sector, the Energy Sector has been somewhat out of favor. And part of that, i think is perhaps that the market had grown a little bit comfortable with risks that we never became comfortable with and i think these events demonstrate that those risks are real you obviously have exposure to this part of the world. You have petrochemicals, i believe, in saudi arabia, a field on the border of saudi arabia and kuwait. What are your sources in saudi telling you. How do you think theyre going to respond i think everybody in saudi is focused, number one, thankfully on the fact that nobody was hurt in this event. Number two, theres a lot of work underway at ab cake to assess the damage and what needs to be done to bring things back into operations safely and reliably and i think a third order question is are there other facilities that are Vulnerable People are working all of those things simultaneously right now. And we dont discuss publicly te the specific measures that may be taken around specific assets, but its reasonable to assume that all of the operators not only in the kingdom but within the region are reseassessing thi current Security Posture michael, the 5 of Global Supply, 12 jump in wti today, how long do you think the market is suggesting that supply would be offline if it came out it was going to be offline for multiple jumps, do you think there would be more of a jump in the oil price its a bit of a hypothetical, because the circumstances around that and the market response to it is a function of many other things, not the least of which, when i come back to the Strategic Petroleum reserve, its too soon to know if releases will be needed, but the president is doing exactly the right thing in making the spr available. Thats the kind of leadership we need at a time like this thats what the spr was built for. And in a scenario like that, i think you would see actions from the u. S. And other countries that would mitigate, you know, some of the market reaction. Who else can make up for the shortfall right now in the world . Well, theres certainly other countries that have been curtailing production within opec you mentioned a field that we operate in the kingdom of saudi arabia thats actually been out of production for several years, due to a dispute between saudi arabia and kuwait. It could be restarted relatively quickly. And so there are you know, there are a number of assets around the world where you have things, where strategic storage, fields that are offline and fields that have been curtailed as part of opec agreements that could be activated and its a combination of all of the above that would fill a supply gap michael, how much pressure do you think this is going to put on the aramco ipo plans . Yeah, i cant speculate on that i think thats a question obviously for aramco to answer sounds like President Trump is agreeing now, latest headline, with his secretary of state, mike pompeo, that iran does bear responsibility for the saudi attacks, if we did see more of a fullscale war between saudi and iran, michael, what would that do to price of oil . Well, a fullscale war in the middle east would very likely move Prices Higher i think everybody hopes to avoid Something Like that and im not privy to anything of that thinking i think that, you know, at this point, as i said, making spr barrels available and calming markets is the right thing for the president to do. And obviously, the assessment of responsibility in any response to this is a mart for governments to determine, not us michael, how quickly in that circumstance or if the oil price climbs significantly for other reasons could the u. S. Be fully Energy Independent for the shortterm and the longterm reporter well, the u. S. In round numbers uses around 20 Million Barrels of oil a day we produce about 13. Thats up from 5 a decade or so ago. And so to go from 5 to 13 haze taken a lot of work, a lot of investment, and a lot of time. So to truly become Energy Independent is not realistic in shortterm we have become much more Energy Secure i think our exports are valued around the world were the u. S. Not in a position to be exporting oil and producing at the level that it is today, the Market Impact would be much more severe. And so i think we should be thankful that weve got a healthy industry in this country. That we do have access to exports and exporting have been growing and that helps to stabilize markets. And in a prolonged higher price environment, i think you would see Investment Decisions that would accelerate that versus the base case. Michael wirth, thank you so much for phoning into the show today. Your welcome, sara. Important day to have you Michael Wirth, the ceo of chevron on one of the biggest jumps in oils history up next twb ceo of National Music Publishers Association llushyes doubling down on a music licensing fight against peloton ahead of that companys ipo. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Val, vern. Im off to college and im not gonna be around. Im worried about my parents retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. By the way, shes the it wasnext mozart. G day. 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. And now for their service to the community, we present limu emu doug with this key to the city. [ applause ] its an honor to tell you that Liberty Mutual customizes your Car Insurance so you only pay for what you need. And now we need to get back to work. [ applause and band playing ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Classical Music playing throughout an historic day in the energy industry. Oil prices jumping double digits, up 13 , at one point up 19 . Energy stocks, the best performers in the market after drone strikes did hit saudi arabias biggest oil fields over the weekend, cutting 5 of global production. We just heard from the ceo of chevron, mike wirth phoned into the show biggest takeaway for me, wilfri wilfriwiffl wilfred, he was encouraged that President Trump opened the oil reserve. He also said, too soon to see any production changes out of the u. S. I think one question that a lot of the Energy Analysts that weve been talking today had were, now were seeing higher prices, were going to see more u. S. Production. You cant just turn on that spigot, he said, overnight and we had faith in aramco and the saudis that they can get this back online, but made it clear, sara, as youre applying that if tensions escalate, if there were more attacks that oil prices could jump significantly. And that is when it could lead to greater investment and capex in the u. S. To increase production in the longterm. But overall, was pretty cautious no speculation on who did it or what would come next switching focus, Music Publishers filing an amended complaint against peloton, doubling their demand for damages from peloton to 300 million and adding more than a thousand more songs to their lawsuit. This follows Music Publishers suing against peloton in march for Copyright Infringement in a statement, peloton says, this platform could only have been developed with the close collaboration of our trusted music partners, which include all of the major labels, major Music Publishers and Performance Rights organizations, among many others as a result, we have the largest audiovisual connected fitness music catalog in the world we will continue to defend ourselves against claims made in this matter and look forward to pursuing our counterclaims we should note that comcast, cnbcs parent company, does have a stake in peloton joining us now, david israelite. Why you doubling down right now . When we filed this lawsuit back in march, i said on this program, i thought it might just be the tip of the iceberg and we discovered that we were right. We discovered 144,000 songs that werent licensed from these 14 pl plaintiffs peloton was forced to turn over a more complete list of the music they had been using and we discovered another 1,324 songs we also discovered that we think theres a large segment of the Music Industry that are not currently plaintiffs that also have music thats being used by peloton without a license and where theyre paying the songwriters absolutely nothing so this amended complaint is really just a continuation of the one that was filed in march now that we have better information. Was your timing motivated by when they filed their ipo at all . No, the timing was motivated by when we got access to the full list of the music thats why the amended complaint was filed now. Talk us through how we got to this point because peloton clearly does have agreements with some Music Publishers it doesnt with some of your plaintiffs is it possible that an agreement could be reached before this goes fully to a Court Hearing . I would love for it to be resolved prior to going to court, but at the same time, were very confident i mean, if you listen to their response to these allegations, its just comical. Its like someone that walks into a Department Store and buys a pair of pants, but is caught shoplifting a bunch of other items of clothing and their defense is, well, i paid for the pants. They are using lots of music for which they do not have permission and for which theyre not paying the songwriters and despite the fact that they have some licenses, theyre the ones that make their own programming. They control what music is used. And they are infringing a wide, wide number of songs that they didnt have to do. It really is quite inexplicable. What type of agreement would you require from them in order to put this settlement behind you . Well, that wouldnt be up to me that would be up to the Music Companies and the to the musi e companies and songwriters. I think it probably starts with some recognition that what they have done is wrong and proper compensation for what they have done you mentioned that suit now asks for 300 million the actual number is about 370 million, a little more than that and giveagain, that is just froe 14 plaintiffs. And we believe there are many others whose music is being used produce the a proper license so i dont know where it ends. I was trying to get at some kind of an annual impact to peloton, the costs that they have not been shouldering. And so what would it be per year based on the song writers that you represent that have not been paid this has been going on for a long time and the way that the process will work is that if they are infringers of copyrights, there is a formula for statutory damages that looks backwards and obviously they would not be able to use the music Going Forward unless they had a proper license so hard to quantities guy how much of the company was built on back of the songwriter whose music was used without permission but it is a story that weve seen many times before im here in nashville and they are tired of tech he companies build businesses on their backs without permission, without payment. It is an unfortunate situation and when you look at the competitors, they dont seem to have the same problem. So this idea that it is hard to license music just doesnt ring true david israel, thank you very much for joining us. How big of a risk factor is it for the peloton ipo . It will obviously compute into what people think that the business mo Model Looks Like so it doesnt knock it out of box. That is why i wanted to get to 370 is multiple years including damages. And if you think about this rationally, what portion of the music is important to the consumer, not a huge portion but they have opened themselves up to this because they made agreements with the other publishers and now it is quite easy to kind of hold them to cansoransom forg semg settlement and 300 would be a huge chuck ever that. Still ahead, a panel reportedly set to criticize the fda for the certification of boeing max jets. Details coming up. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. It also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. The faa may be facing new heat for ging ivboeing too much control over safety certifications new details next servicenow put our workflows in the cloud. 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. Whai tell clients, etfs can follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. We think you would really shine in the aflac program. Aflac coach saban we have Health Insurance. Did Health Insurance pay for everything . No, we still have bills. Aflac gives you money directly to help with those. Aflac and your deductibles, knee brace, whatever you choose. Aflac sounds like a winner. Umhum. Umhum. We try. Get help with expenses Health Insurance doesnt cover. Get to know us at. Duck aflac dot com faa. Phil lebeau has it for us. This report from dow jones says that the joint authorities technical review board have been reviewing the certification process for the 737 max. They are close to finishing that report and will be criticizing the faa for having a too cozy relationship with boeing earlier today we had the interview with the new faa administrator and he said that was before, he will look at this report when it is issued and he says that they will make sure that there is quis yachadequate in place so there is not a cozy relationship was this broadly expected it is a damning indictment of the past relationship, but has the market already got there i think the market was already there. There are far too many stories about the relationship between the faa and boeing in terms of the certification process for the max. No surprises in this report. Phil, thank you what a day wti finishes up 15 , one of the largest rallies ever question is how long are we going to feel the reverberations if it was a one day repricing, the market says that is okay. Similar to bonds yields up a lot, but from very low levels same thing with the economic expectati expectations so right now were in a zone where we can handle this kind of move and s p only down 0. 3 . Were out of time. That does it for closing bell. Fast money begins right now with kelly evans and live from the Nasdaq Market site overlooking New York Times square, this is fast money. Im in for melissa lee our traders are pete najarian, karen finer man, dan nathan and by guy adami. Time to play offense and easy on the clutch, uber and lyft finally getting in gear traders play the role of back seat drivers will debate but first Energy Stocks logged biggest day since january. The sector