Transcripts For CNBC Closing Bell 20240714

Accommodative policy and more from that interview with Christine Lagarde stepping down from the imf taking the top job of the ecb president in november take a listen to her view of the u. S. Economy right now its the longest period of growth in our country. The unemployment numbers are at rock bottom. Its in a very good place. Her thoughts on trade, china, and the likelihood of a global recession all coming up. First, mark tepper, ceo of Strategic Wealth partners, welcome back youve been surprised, impressed at the resilience of the market during september, which is not seasonally a very strong month september a usually a very sleepy month historically. Its down somewhere between half a percent and a percent, but so far this month, were up about 2 , so thats pretty good. I feel like were in a tina situation, where theres really no better laplace to invest your monday yields have come down on bonds its really not interesting to invest in the euro zone. Tina, there isno alternative. There is no alternative u. S. Stocks are where its at. I wouldnt say its an allclear signal right now, because we still need to get a trade deal and more stimulus overseas, but i do think that the market will trade sideways with an upward bias until we actually deal with those two big headwinds. Dont want to invest in europe unless Christine Lagarde can turn things around outstanding job, by the way. Oh, thank you i like your post of pictures through the years. Youve done a lot of interviews with her its been a long road eight years, carbon with her from japan to jackson hole to chicago. Anyway, her thoughts on europe which showed some surprisingly weak numbers very weak numbers great interview thats already aired, lots more still to come ive read the transcript you dont want to iz mamiss it. David faber is covering new pressure on weworks adam newman and sarah has the highlights from James Bullard bob, lets start with you. Wilf, so we have mixed Performance Today for u. S. Stocks just take a look here. Health care, merck, pfizer down. Industrials like cat, up again cats having a great month, up over 10 f. A. A. N. G. Stocks, netflix is weak for the third day its down about 10 in three days remember that big drop on friday Reed Hastings talking about the tough competition in streaming from apple and disney, amazon, and nbcs own peacock. Thats launching next year and a lot of choices there for consumers. But elsewhere, its not mixed in europe the Economic Data was awful overnight, flash manufacturing pmi, lowest level in more than ten years. Germany may already be close to a recession, predictably, the yields in europe dropped, large banks like ubs, all down, as you can see there. As were the bigcap european names. Siemens, daimler, all week sara, back to you. I just want to pick up on that data, sarah the u. S. Market improved, but its not just manufacturing and not just germany that was the standout weakness of the data, but German Services pmi was below 50 as well the french numbers showed both declining, just above 50 i think this is a broadening out of the problems weve seen in the euro zone after a couple of weeks when people had started to say, okay, the International Picture has plateaued, its not getting worse again the question is, the new stimulus from the ecb, will it work can it turn the tide based on last weeks takeup fo it was very tepid, showing just make liquidity available doesnt solve the problem of lack of demand so i know you asked lagarde, is this the hardest job youve had yet, and definitely is she said she likes daunting tasks. Meantime, wework ceo kaum nadama is facing pressure david faber joining us now with the latest so what do we know about mr. Newman at this point well, we know were not going to learn about his fate today, sarah, at least. Thats what ive been able to unearth so far but its going to be in the next 24 to 48 hours that we find out what will happen in terms of his continued stewardship of the company that he founded and he controls as little as five weeks ago, this company was expected to be on the road right now, talking to investors about its upcoming ipos, with the expectation it would value the company at least over 20 billion those numbers quickly got ratcheted back, as weve reported over the last few weeks, investors were quite concerned about how much money mr. Newman had taken out of the company. They were concerned about governance within it, his ability to control so much of what went on at wework and they resisted they resisted so much that, in fact, the company, as you said, this time last week or about six days ago said, all right, were not going to plan to hit the road, at least not now, and were going to postpone. And since then, well, a damaging wall street journal story came out. I think we had the reporter on last hour, that seemed to have changed some mind, in particular over at softbank, the largest single investor in wework. They had problems with some of the behaviors that were described there, beyond, of course, what we all new from reading the s1 and they and along with bench majb mark sources are now in opposition to mr. Neumann remaining the companys ceo. Mr. Neumann can choose to start over again that might not be particularly wise whos going to give him money in the future would be a key question for a company that consumes massive amounts of capital. At the same time, do you really want to get rid of the ceo whos the visionary behind this, who loads the organization in many so many ways is there a way to fashion him as a chairman, bring in somebody as ceo and move on, hopefully, to a Better Future . Thats the conversations that are going on right now, sarah and wilf its unclear where some of the other Board Members stand in terms of mr. Neumanns future, and frankly its unclear bade on a lot of conversation ived a where his head is at if they do ask him the step down as ceo all of that said, we should know more very soon i was particularly interested in a comment you made earlier today on squawk on the street that the Investment Bankers are also now pushing for this change, which is somewhat surprising given that they backed the shape of the ipo, they would have taken the 47 billion private market offering. And is there a sense that everyones just trying to turn and pin the blame on mr. Newman now . He may have well been in the wrong, but a lot of other people kind of put their rubber stamp of approval for most of the last couple of years on his actions as you know, wilf, there are about 31 underwriters. And i cant speak for nearly all of them. I think there has been some pressure from a couple to at least make some changes that would make it more amenable to the Public Markets hes been very closely aligned to a certain extent and dawid by jpmorgan and Goldman Sachs who are the key counderwriters. Jpmorgan have lent him 100 million personally, also made significant loans to the company itself that were backed up by stock. Unclear where they all stand at this point really, this is the decision of the board of directors and we still have to wait and see what the final vote, when they do hold a meeting, as is expected, lets call it in the next day or two, wilf, will end up in terms of what they would like to see. But again, you could go down a road here where he says, no, and gets rid of all of them. Thats his right as the controlling shareholder. What about the relationship between mashiyoshi son and adam neumann. Why has that changed why is he turning against him . Do you have any sort of insight into what happened i wish i had more, sarah. As i said earlier, i think that wall street journal story of a few days ago detailing, you know, using the plane and leaving marijuana on it from a trip from israel to the United States and tequila parties there was a lot of Different Things in there it did seem to have an impact on a number of conversations i had. Was that enough to fully turn them its unclear at this point mr. Neumann didnt show at a big pasadena conference that mr. Massa held last week, but thats unclear that had any true impact here they have had a very close relationship and mr. Neumann sparked mr. Masas imagination, his enthusiasm so it does surprise that masa would be willing to say, lets go in a different direction. But when you have over 10 billion invested and seemingly of values that would have come in below what youve already put in, that can affect your Decision Making as well, sarah david, thanks very much, as always, dade fabvid faber there. Weve got a market flash on American Express American Express shares seeing a pop today theyre up about 1 on the session. This comes on news that the board has authorized Share Repurchase of up to 120 million shares and also noupsing a 10 dividend increase. Remember, amex is up more than 20 yeartodate but still underperforming the straight payment plays like visa and mastercard back to you. Dee, thanks very much for that lets pivot back to the fed and some new comments from st. Louis fed president James Bullard today and sarahs been digging into the highlights. James bullard was one of the three fed officials to disseptember from last weeks fed rate cut decision, but he disagreed bauds he thought the fed should do more today he spoke at a chairman of commerce meeting in illinois and gave more clarity about his view of the state of the u. S. Economy and hes worried bullard saying a sharper than expected slow keown may make it more difficult for the fmoc to achieve its 2 inflation target and adding that insurance cuts may help recenter inflation. U. S. And manufacturing and slowing u. S. Business investment hes also mentioned tin vot ed e yield curve. Because hes worried about the economy and some of the signals, which gives investors kind of a confusing message, about whats going to happen at the next meeting with so many people on so many different sides of the argumented arguments. Consumer has been the workhorse of this economic expansion. Consumption is 70 of our economic growth. A lot of the customer based data seems to be pretty strong. Consumer confidence is pretty good, housing looks good but then you look at the manufacturing pmi, which is now in contraction mode. Probably most of that is related to trade i believe that the fed needs to do more, as well i would definitely expect at least another 25 basis point cut before the end of the year, because we really need that just to get the yield curve straightened out in the meantime, markets are at session highs, up 70 points on the dow and weve got just under 50 minutes left of trade sylvia is joining us here on set, as well, sylvia, are encouraged to see this, at the session highs in light of that very Poor International data we saw this morning and very poor returns for european and asian markets. There is a reason to be optimistic with this market. And there are definitely holes and places in the market that investors can find alpha and some of those places are technology and semiconductors that continue to soar, regardless of the trade tariffs. Theres a pullback in those sectors, but theyre still sort of happeninging on and i think that a lot of the data around the world could soften out we heard news about germany and france essentially infusing capital into the markets we had it happening in china, we saw india with the 20 billion infusion of capital. The u. S. Is support i have with the fed lowering rates and essentially inserting liquidity into the market. I think theres a lot of bad news and volatility, but there are still some bright spots and it looks like the bull market is continuing to hang on. Its interesting that you mentioned semiconductors they are doing quite well today and they tend to do well when the trade tensions thaw. Theyre up 40 from the lows you still think theres room to run there . I do. Micron is up close to 60 . We got a shortterm semiconductor etf thats up 100 yeartodate you have gaming and data centers growing. They have essentially been able to reduce some of their inventory for pc memory. They have the nand memory for the smartphones which will be a huge growth space if the growth in 5g continues and particularly if we get a resolution with the trade war. Youll have 5g in america and it will be 20 times faster, so you need more memory throw china and an agreement in there, and all of a sudden you have the ability for some Global Growth to hit that stock and some other names like broadcom and qualcomm, i think those are a little more trade war dependent. Theyre the biggest chip suppliers to china where do you stand on those names . Broadcom, we own. I like broadcom. Its kind of like my antisemi semi, because they have some Good Software exposure its a more defensive player us. Nvidia is our growth semi, it gives us access to those highgrowth things we would want to play. Sylvia, what do you want to do in the shortterm with energy exposure, which has had a bit of a pop because of geopolitical concer concerns time to take profits or do you think that can continue . I think that can continue, but the key word is shortterm the oil supply fell from 9. 8 to 5. 7. We keep hearing news that the saudis will essentially restore the oil supply, but it hasnt happened yet in the shortterm, we have seen some great performance out of energyrelated, gas and oil related etfs and i think my outlook for that is the next week or so because that probably will resolve itself i guess the Common Thread here, theyve all got secular growth stories, but if we do see a turn in the cycle, arent those vulnerable areas where money has flown into i think they are vulnerable areas because they are growth and momentum stocks, but software a bright spot you have to pick your names. Microsoft, 40, repurchase Apple Streaming Services some of these names are bright lights and they continue to grow and i also just love the story of robotics, ai, and the millennial trade i think well continue to see ai and robotics grow in health care and factories and manufacturing, globally in japan and china. You know, gaming is supposed to increase about 150 billion in the next four to five years globally so i do think that there is a chance that those names keep going. But investors overall should diversify their portfolios, make sure theyre allocating to some of the latecycle performers as well to temper volatility in the markets. Sylvia, thanks for joining us still ahead here on closing bell, much more on the saga unfolding at wework and the future of ceo adam neumann well speak with the analysts whos written about the troubles facing the company, coming up. And former imf managing director christine la dpard wei weighs in on the biggest threat she sees right now facing the Global Economy trade instead of being that big windows of opportunity for those companies that want to compete with each other, it weighs like a big dark cloud on the Global Economy much more from that interview, including her thoughts right now on china, coming up in just a bit. Closing bell back after a quick break. Dow isp u72 points. 43 minutes left of trade we trust usaa more than any other company out there. They give us excellent customer service, every time. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. Should always be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. 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. Welcome back just 40 minutes left to trade. As you can see, were higher at session highs, in fact, up about a quarter of 1 . Lets send it over to mike for todays market dashboard hey, wilf thanks very much heres what we have ahead. First, turn of the season. Well see what smo ome of the calendar patterns say. And withered and fallen. Maybe still some value there well have to take a look. A delicate balance thats what this market has been in for a while now, just kind of hovering and Second Spring. Some of the overall u. S. Macro data looking like there might be some revival there so first of all, a look at seasonal patterns. Now, theres all kinds of seasonal tendencies people look at the standard monthtomonth annual pattern there is the election cycle. The president ial election cycle, which has some relevance over the years, which year you are in the cycle seems to dictate something about a tendency of stocks and then the tenyear cycle, which basically says the longest single calendar decade, there have also been some tendencies those three cycles boiled into one typical chart. Thats the orange line right here if the market this year followed the typical path prescribed by the third year of an election cycle and a year ending in 9, this is what it would look like. Its tracking pretty well, but the magnitudes are way off the average for a full year in this part of the cycle is 8 they say the direction tis more important than the magnitude and nobody should be surprised if we get a little bit of a chop lower into september, october, but thats what all the patterns say. I tend to interpret this as, if we dont get seasonal weakness in the next few weeks, thats also telling you something when the market does not seem to respond to seasonal appearancpa thats probably a negative wait, were really looking at market patterns with year ending in the number 9 . Is that a thing. Believe it or not, im not saying theres a statistical significance, but there have been certain years youve had more of a problem. Years ending in 8, youve often had a pretty bad selloff. That actually followed last year, 2008 1998 i dont think its necessarily science, but people do watch it. Up next, Consumer Staples giant clorox catching its second bearish note in the past week. Why one firm just downgraded the stock, next. And the parent of the New York Stock Exchange Just Launched its new Bitcoin Futures contact. Up next, wlle expect a new era in trading with heath taubert. 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. 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. Welcome back weve got a news alert on the fed. In this case, the San Francisco Bank President mary daly speaking at the Salem Community leaders luncheon in salem, oregon. Those comments being delivered she says that trade uncertainty is one of the many uncertainties and one of the reasons why she supported the reserve cutting Interest Rates this past meeting. She also says that lowering Interest Rates is part of why you see the u. S. Economy continue to grow above trend, addi ining also, the u. S. Econoi in a good place and that the u. S. Economic growth picture is being propelled by consumers, echoing a lot of sentiments out there, but still, sarah and wilfried, a sitting fed Bank President saying that she did support rate cuts and those are the reasons why, making those comments to Community Leaders in salem, oregon, guys. All right, dom, thank time now to get word on the street barclays raises its price target to 152 from 144 a share. Meantime, the Firm Downgrades competitor clorox to underweight with a 141 Price Target Barclays expecting improved Revenue Growth and favorable cost environment for kimberlycla kimberlyclark Piper Jaffrey issuing lululemon an overweight 227 price target. The firm sees the brand as a share gainer with accelerating opportunities in its mens and International Categories better late than ever. And Morgan Stanley out with a note on best buy saying their commercial Health Initiative could unlock an 11 billion amount to have 46 billion amount in terms of revenue olympic the longterm. The Firm Maintains its inline rating of a 70 which hasnt changed. The bear case, its down to 38 the spread to the downside actually fractional lly bigger than to the upside between the bear and bull case its not actually as bullish as it sounds on the headline. A lot of consumer pics in there. Which one do you like the best of the ones you just mentioned, i would probably lean toward kimberlyclark. Theyre all very rich as far as valuation goes, theyre not growing very fast. They are growing for a change they are a little bit kimberlyclark, i think where we have an advantage over a company like clorox in the ecommerce space. People will buy diapers and toilet paper and paper towels and tissues, theyll buy that stuff in bulk through ecommerce. You cant say the same thing about bleach what about lulu too late 227 . I love it i wish i bought it an hundred bucks ago. But its always just a little bit out of reach if i could get it to drop back to 170 or right around the 200day moving average on an expectations miss, i would definitely lulu. And they do the teen retail survey, so they have a really good sense of what the Younger Generation is buying, and lulu continues to rank highly, really high for women, second performance brand after nike and climbing the ranks for men or boys. Teens boys or men . Mens, digital, international, those are all growing at 30 plus percent theyre just absolutely crushing it there Great Company and they got an unbelievable and very, very Loyal Customer base. We have got just over 30 minutes left to trade. Were up near session highs, up about a quarter of 1 . Here are the key things driving the action weak industrial data out of german and the euro zone has and James Bullard warning about the possibility of a sharper than expected economic slowdown time now to get a cnbc news update with sue herrera. Hello, everyone heres what happening at this hour President Trump responding monday to the criticisms hes received in the media about his conversations in a july phone call with ukraines president. Saying he is still considering releasing the transcript of that call, though he does have some reservations i can do it very easily, but i would rather not do it from the standpoint of all of the other conversations i have i may do it, because it was a very innocent call, on both his part and mine. We had a very nice call. French president Emmanuel Macron reminded his colleagues at the Climate Action summit monday that they need to include Climate Change in their trade and finance policies he added that countries should not import good that increase carbon lupollution. Sherrod brown stopped to meet with uae workers. You are up to date thats the news update, guys see you next hour. Back downtown to you, wilf you will, indeed. Lets send it over to mike for his Second Market dashboard. Take a look at the performance of something called the deep value etf, dvp. This essentially selects stocks that looking look extremely cheap relative to the market and their own history. Its really suffered here. What i think is interesting, this etf rep balanced just as of friday look at the new Top Five Holdings in this etf and what youre really going to observe is if you really want cheap, cheap stocks, youll have to buy things that the market has decided are disrupted businesses largest holding, franklin resources. Thats the biggest actively handled. Cardinal health. Viacom, we know whats going on with all cable media is this dxc merged with hp and macys essentially, look at how cheap they are relative to the market. You have to make a ebbet that te economy will be good enough and the market has gotten it wrong beating down the values this far, guys. What do you think has changed, mike . Whats the largest factor thats leading to this resurgence yields went up and bank stocks got better. Thats the main thing that happened and i think day got too cheap. Its been a moan reversion trade. And youre not going to find many bags, because the methodology is looking for sustainable longterm earnings trends and cash flows and stuff like that and the analysis doesnt fit that well with traditional banks. Viacom, six times, you can get your seinfeld there. But not streaming cable. I just discovered, i did double down on that, you can on their devices on demand, as well netflix has the streaming rights which is a slight separation for the way that netflix advertises the exclusive streamers of that. But theres nuances in it. Still ahead, weve got your last chance trade. Mark is picking a health care name thats in the red so far this year. Well reveal his call, coming up and later, speaking of netflix, its hitting a bit of a rough patch here the streaming giant lower for 2019, down nearly 20 in just the past tleep three months. But why competition could be a good thing for netflix in the long run, when we come back. So. How are you feeling . On a scale of one to five . One to five . Its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry clive actually, really angry. Thank you. But what if your business could understand what your customers are feeling. And then do something about it. Turn problems into opportunities. Thanks drone. Customers into fanatics change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. The future of weworks cofounder adam neumann hanging in the balance would that help clear the way for this companys ipo lets bring in barry oxford whos been critical of wework and published a no last week when the company was supposed to go on the road pretty critical note how much of your thesis had to do with leadership in adam neumann . First off, you know, adam did build something, so lets not lose sight of that and there is demand for the wework space and once theyre kind of up and running and after about 18 to 24 months, they are profitable as a standalone unit now, that being said, where the critics really come in and where i stand and i stand with the critics on is that 11 document and the Corporate Governance slanted so much in his favor yes, i realize he can file as an inside corporation, because you could still choose to have an independent board and an independent compensation structure, which is desperately needed they already made some suggested changes to the s1 if they changed, would you change your view i think thats a step in the right direction. We have to bring valuation in on top of nthat i think if we brought in a seasoned ceo, i think that that would help a lot of us wall street analysts saying, okay, we got somebody at the helm who has and is able troun a corporation. On the topic of valuation, with things like uber and lyft, a lot of the discussion point was, no one liked this as public with rework, you think thats slight lip different that ree gigis is out there and highlights a drastic divide in terms of valuation correct when you look at the multiple, i did a kind of net operating income, not a net income, because youre dealing with negative numbers when it comes to wework, i looked at the net operating incomes of regis and Boston Properties and if i give these guys a multiple in between the two. Lets go ahead and give wework a little benefit of the doubt, because they have a much higher growth rate than regis thats fine, but i dont think they deserve a Boston Properties type of multiple, either so you put them in between and i get to somewhere between 8 to 10 billion. What would it take for mark to buy this ipo . Im not buying it, no way ive got an issue with the Business Model in general, right . So youve got a company thats signing all of these longterm leases and then theyre subleasing to little, you know, small businesses, maybe one employee kind of companies, on very shortterm leases so since 2010, i think its worked, because the economy has been growing, should the economy start to take a turn down, those are going to be the kind of businesses that arent going to be able to make their financial commitments and pay their leases they have had 47 billion of lease obligations and only commitments of 4 billion coming in thats my big issue with this kind of company. And weve heard that numerous times from other investors what would happen to this company in a slowdown . Well, i mean, if we look at what happened to regis back in 08, they wept, i think from about 140 million in profits all the way down top 20 million. So they really got socked. You are correct. This if the wind comes into their face with a recession and the amount of money that theyre burning right now, i mean, i dont want to say anything so drastic, but this company is going to start to teeter on that point, barry, youve looked at the curb burn and the current cash balance, how long have they got left if theres no other source of funding that comes through . Likely there would be, but if there wasnt if theres not, i dont even think they could complete what they have in progress, never mind sign another lease and start with the improvements that are needed and you think any fundraising they do secure should be in the 8 billion to 10 billion range . I think theyll need the ipo money and the 6 billion line of credit you think ultimately theyll pull it off if he exits an ipo i think its got a much better chance, if we change the Corporate Governance and we get a new ceo in at the head who has ceo experience, and to marks point, weve got to keep the debt level low if the wind comes into their face, at the bare bones minimum need to keep to the lease obligations. Not have debt obligations on top of that. Barry oxford, thank you for joining us great, thank you. Still to come, incoming ecb president Christine Lagarde gets candid about trade does china treat . You know, nobody cheats skperand everybody cheats lets face it. Well have more from that interview coming up. And shares of netflix are down more than 20 over the last six months well look at whats next for the company and if its losing its edge were back in a couple of minutes. Dont get mad. Get e trade, dawg. 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. 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. Classical Music playing throughout plants capture co2. What if other kinds of plants captured it too . If these industrial plants had technology that captured carbon like trees we could help lower emissions. Carbon capture is Important Technology and experts agree. Thats why were working on ways to improve it. So plants. Can be a little more. Like plants. Welcome back 15 minutes until the close lets check in on some individual Market Movers acadia is trading higher that stock up 2. 4 shares of the real real also higher on a positive report from behrens over the weekend behrens calling it one of the years more under the radar ipos, saying it is actually seeing a High Percentage of repeat buyers and trades at a discount to other online marketplace firms. That stock up 2. 75 . We have just under 15 minutes left to go of trade. Shares of netflix lower today, as competition in the streaming war heats up and the stock has now turned negative for the year as a whole. Lets bring in analyst at rosenblatt securities. Before i come to you, bernie, your view, that point, down 30 since july, down yeartodate, is that justified in your eyes i think the valuation has come down because of all of this new competition, right youve got disney plus, but at the end of the day, we dont think that its that streaming is a onecompanytakeall kind of market we think you can have several winners exist. A lot of people are going to sign up for disney plus and netflix. And i really think it all boils down to the quality of the content. Netflix has some engaging content, right yes, streaming is a trend thats going to continue to play out, but binge watching, in my opinion, is the most important trend. Thats the addictive trend, and thats what netflix brings to the table, is that addictive content that people want to sit in front of their tvs and watch it over and over and over again. And they got the breaking bad movie, lets face it thats going to be a winner. Why has the tide turned for netflixs stock . How much has to do with the competition . Its really on Revenue Growth expectations this is a company where it was trading at seven times revenue, but all of a sudden off 40 miss on the quarter, and people are looking at instead of 30 growth on the top line, you could be looking at high teens. This is a stock thats traded at four times revenue not that long ago. That would put the stock at 200. I think thats a reasonable bear case to go from here you still have a 330 price target how much of that is contingent on them being able to rise increase prices in the future at some point we think theyre definitely going to take a pause nearterm in any massive price increase. The price increase they substitute e instituted this year is the greatest theyve ever had. But with Global Subscriber growth slowing, pricing will matter more and more you should see the midsingle digit price increases, instead of the 20 rate increase they took last year we had the emmys last night, how much of the recognition that netflix gets or does not get and loses to someone like an hbo actually matter for subscriber growth look, shows matter. And thats what you saw this past quarter Stranger Things was july 4th i would expect if the company had to redo the quarter again, they would have done Stranger Things that last week of june and maybe we would be thinking about netflix different than we are now. Content matters. Disney has contents with star wars and they should be able to transition nicely to the star wars model. Just on the netflix point, you mentioned subscriber growth. Subscribers fell in the u. S. , which was one of the big factors for the share price decline since july if that happened again this quarter, how much would you be cutting your price target or how much do you think the shares would drop q2 is seasonally weak for the company, so we wouldnt expect a domestic to go negative, but we have million subscribers globally for the company and 3q, 8 million globally, and 4q, thats 15 below consensus. And if we think consensus you would be looking at highteens growth sooner rather than later, thats when you can see the revenue multiple come in even more the problem with netflix is theyre spending 15 billion on content, thats negative 3. 5 billion of cash flow thats why the revenue matters so much. But just to my question, if u. S. Subs did fall again, three quarters in a row, how much would that spook the market . I think stocks are down 30 since earnings i think it would have another similar impact that would be even worse than what happened in q2 . Especially with that content slate, too theres a much stronger content slate this quarter, right . Yes, Stranger Things . Orange is the new black. Bernie, great discussion. Thanks so much for joining us. Still to come, we have your last chance trade. Plus, our exclusive interview with the head of the ctfc. Hell join us to weigh in on regulations of cryptocurrencies and a lot more from the bank regulator. 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. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back seven minutes left of trade. Mark, last chance trade. What are you going for im going with a defensive health care play, cvs. With their acquisition of aetna, theyve really become this fully integrated health care platform. A lot of these Health Care Stocks have underperformed this year, because of fears about medicare for all possibly becoming a reality we they think thats overblown cvs trading right at about 63 bucks. We think fair value is in the 75 to 90 rake basically, what youre going with cvs is youre getting the same Business Model that United Health has, which is like the Gold Standard at a 40 valuation discount cvs has been breaking out in absolute terms since june or july and now its outperforming United Health as well. We think theres great opportunity with this one. And larry murlow joined us on closing bell to talk about the strategy and i just wonder if investors are getting it more. Because first, i think there was confusion. They were in everything. They were in the pbms, in retail, consumer, in the Health Insurers and all of those were sort of fraught with risks it feels like things have changed in terms of perception i agree, United Health, like i said, is the Gold Standard and everyone seems to want to copy that Business Model. And cvs just has some great plans in store right now theyre looking to convert 15 of their stores to these health hub units where you can get xrays done and stuff like that. Its a really cool Business Model. All right, cvs health six minutes to go to the close lets do the closing countdown and trade this close with mike lewis with barclays. Another strong session were off the highs, still higher with the dow up 27. Mike, what are you watching here into the close and what are the dynamics at play today well, today, the volumes are really light and it seems like the path of at least resistance, at least for the nearterm, given that were kind of in between data points and waiting on earnings to start is probably higher so its very likely were grinding higher, but in my opinion, youre likely to be selling this higher, maybe into 3,000 most of this support is coming from the systemic community, but when you look at, we had a Major Transportation Company last week, released earnings and cut guidance the last time they did that, it was not good news for the market the data we got out of germany this morning, south korea. So on the one hand, on the fundamental sigh, a real slowdown in Global Growth. And then i just think when earnings come out, youre really going to see the ramifications of the trade war take place. And i think you should be selling this and are probably due for a pullback what about the rotation underneath the theme underneath the headline is that rotation that we saw recently ceased . Yeah, that was a couple of weeks ago we had a big, big move kind of out of the momentum names into value and kind of under the their own cyclical type names that was more tactical and while we have been seeing this, thats something that will continue over the course of the next three to six quarters so the next year to year and a half so breadth is very narrow and positioning is very crowded. But the peak of that kind of capitulation, which we saw, probably more tactical in nature im not looking for anything like that in the nearterm okay, mike, thanks for joining us great to see you in the meantime, lets get over for the third installment of the dashboard with mike santoli. Kind of a delicate balance here this market continues to hover right below those highs that we saw back in july take a look at the breadth for today. This actually started off pretty decidedly negative this morning and it has improved and ground its way higher this shows you, theres still that kind of quiet underlying bid to the market. Its been a theme for the last six or seven sessions at least, even though theres not been a lot of progress on the headline indexes. Take a look at the ap for the last year, puts it in a little bit of context here we are, side wooinding for the last couple of weeks and perhaps trading water, you get tired of treading water sometimes. I would point to a couple of instances of that where it did happen not to say you have a big pullback, but thats the danger to the downside, youre using up energy to stay in place. I would say as long as weapon dont break those highs of the prior august range, probably if decent shape and it would be a routine pullback if we get them. Lets get out to chicago with rick santelli. The long end is leading the rest of the curve to higher yields if you look at intradays of 10s, were hovering at 171, some of the best levels of our time zone this is volatility for tenyear sector of the curve. You can see, weve really come off the spikes theres a lot less tension than there was during some of this volatile activity over the last several weeks. Finally, the dollar index, since the beginning of september, we touched the 28month high and its been a saw tooth pattern. Bertha, were losing our bid in the nasdaq in some ways, we are seeing some of the same pattern we have seen for much of the month, rick chips today are the strongest performers in terms of tech and they have pretty much led this month. But not with much conviction not much volume there in terms of the chip trade. As far as communications, they have been the laggards and today, they continue to lack, as you see netflix give up all of its years gains. It was up 46 at one point and amazon to the getting much of a bounce after that big win for fleabag. But some of those names like ulta are down Something Like 32 percent for the month and retail is really strong we are fading into the close, but amex had an interesting announcement in the middle of the day. Look at that pop there from amex 120 million Share Buyback thats almost 150 of the shares outstanding, assuming they dont dilute it with more options out there. Amex is one of these big buyback monsters, they bought back maybe 30 of their shares since 2011 microsoft did within last week, a big buyback. Target did a big buyback as well gold was up. Gold stocks were up, but so were the more cyclical groups like elms and retail. Metals and mining, oil service stocks, all cyclicals to the upside we were up nicely on the day, but essentially flat dow is up 24 s p 500, up less than a point. Lost some steam there in the close. Im sara eisen and im wilfred frost alongside mike santoli the dow, s p, nasdaq, lets check in they all closed in negatory. Actually, the dow did not, just up six basis points. S p and nasdaq, just lower saw about a quarter percent of gains slip but for that final 15 to 20 minutes of trade, but we were still well off the lows of the session, which was down 104 points on the dow. Those lows coming in the morning alongside selling around the rest of the world. And keep in mind, were 1. 1 off of a record high for the s p 500. What stood out to me is there was strength in the companies that have been doing really well this year. And especially in the consumer space and retail alltime highs for names like procter and kbsk gamble, dolla, walmart. Whether its a story of where the companies are trading continues to be a bid and staples were pretty strong today in general ive got the tenyear over in germany over the last ten days, because i think the key story today was that softer data out of europe. And even though wed seen yields start to rise, that trend has turned around the last two or three sessions and i think that set the day off with a more bearish turns. But once europe closed, we did see improving sentiment in u. S. Markets. Joining us to talk about what happened today, mark tepper still here, ceo of Strategic Wealth partners and Alicia Levine joins the conversation. Shes strategist at bny mellen investment management. But first, mike, on whether u. S. Stocks will continue to brush off these Global Growth concerns today emanating from europe. The quiet really remains the story. And its no accident that the market firmed up as europe closed and also, bond yields in the u. S. Ticked slightly up from that moment, too can it continue like that . As long as the u. S. Data holds up, it probably can for a while right now. I think the fact that the market has been willing to look through this period where there are about that many identifiable catalysts. The market has been willing to say we may get more help from the fed if we need it. That seems okay for now. But were using up a lot of energy to stand still in terms of the broad index we have to see if that breaks one way or the other before we get an excuse to have some better news. That is such a mike santoliism its true were using up a lot of energy to stand still. What does that mean it means that youre soaking up a lot of the demand for stocks and not really making progress in the Overall Indexes. You can look at it two ways. You can basically say, fine, thats fine. Were resting and gathering up a little bit of energy to move higher, but it does take energy. Also very applicable to when i go on the treadmill. I feel like very tiring unbelievably disappointing results. Thats like me right now, it takes a lot of energy to stay still. Its apt back to the eurozone data, where do you stand on if thats a factor for u. S. Equities if i can add another metaphor, this market is like boiling the frog slowly. Another hit to fundamentals and yet the market is 1 off the highs. This is what were expecting were expecting to see germany in a recession and probably expecting some fiscal impetus coming out of the european countries. And i would say thats baked into the market. Interestingly, france is up 21 this year. The european markets are up just like the s p, about 20 this year, which is telling you that pretty much the bad news is baked in here in the u. S. , the citi economics is ticking upwards and thats why you see housing ticking up as well last week you looked to the market breadth it hit an alltime high last week, wednesday or thursday. Today, breadth was positive again. It sort of flattened out that means the Overall Index remains reasonably well supported. Very often like last september, 2018, breadth gave way i think thats one of the things the bulls are pinning their hopes on in terms of sector importance, Consumer Staples and Consumer Discretionary did have a good day is this still going to be largely defined by what bond yields do based on where we see the sector strength and weakness i think thats definitely irrelevant for Consumer Staples. Consumer discretionary on the other hand, its really just because the entire world is relying on the consumer to keep this thing going and you mentioned walmart, dollar tree. We own walmart and dollar general, t. J. Maxx so buying preferences have changed t chang changed. The consumer is more price conscious. Thats why the dollar trees and t. J. Maxxes is all working yields did pick up and coming down does that mean you cant buy the banks . I think you do buy the banks. We expect another 25basis point point this year and if that happens, youll increase the long end eventually. What if that doesnt happen for the Broader Market does the market get spooked or is trade a bigger factor in terms of the binary influences on equities . If the fed doesnt, it could spook the Market Global Monetary Policy supported all of these markets when the fundamental data has been pretty lousy. On the other hand, the lower rates have increased whats going on in the housing markets. Youve seen more confidence in the consumers. Its definitely working here in the u. S. And we are, in fact, supporting the rest of the world in terms of growth. So we hear that a lot the fed has the markets back, dont fight the fed, the fed is in play. Does that mean with 20 gains so far this year in the s p 500, the downside is limited, still it seems like that equation works for now, it does and youre seeing people deemphasize the Earnings Growth story. I dont think expectations are particularly high for Earnings Growth going into next year. Right now the published estimates for the Third Quarter are for a decline. Thats the way it looked for the last two quarters. So all of a sudden youve gone through this ninemonth period where youve nursed your way through an earnings plateau or so fed trumps earnings. Well, earnings is okay as long as the fed is doing what its doing and you have bond yields more than a percent below where they were a year ago but trade is a wild card. And the fed story is very bound up with trade. Some would argue that you probably need a bad surprise on trade to make sure the fed cuts again. Mark, unarea we had seen stocks catch up and thats now paused is small caps where do you stand on that we would pumuch rather prefer long caps. In long secular bull markets, small caps tend to underperform toward the end of the cycle. All of the bestperforming small caps have graduated to midcap. All the bestperforming midcaps have graduated to large cap. Youre left with these companies in small cap space, i think 36 of them arent even generating any positive earnings. So we would much rather be in large caps right now alicia, before we go, we want to get your thoughts on health care worstperforming group, unh. Has unh become the 2020 election stock . Yes you cannot separate the General Health care sector from whats going on both for the republicans and the democrats. The tool sector is fine and the discovery sector is fine but pharmaceuticals, biotech, and services are really under effect from both sides and insurance, too. And the administration and pelosi are going to cut a deal soon on drug prices and its not good also, it feels like every time Elizabeth Warren kbans in the polls, those Insurance Companies sell off is that the right move to the extent that Elizabeth Warren is the nominee and to the extent that the conversation stays the same, youre going to see trouble in the market in 2020 now, if she tucks to the center, youre okay. But the conversation could be very difficult for a bunch of sectors here, including tech guys, well leave it there. Mark and alicia, huathank you bh very much. Coming up, incoming ecb president Christine Laguard tells us whether europe has the political will to make changes necessary to turn that economy around its often the case with europe that you despair of europe and you think, oh, when are they going to get their act together things happen a different pace in europe. Because you simply have for the eurozone only, 19 governments that have to come together well also get her thoughts on whether a trade deal between the u. S. And china can be reached. Closing bell back in 90 seconds. Orlando isnt just the theme park capital of the world, 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. Man can i find an Investment Firm that has a truly longterm view . It begins by being privately owned. With more than 85 years of experience over multiple market cycles. With Portfolio Managers who are encouraged to do whats right over whats popular. Focused on helping me achieve my investors unique goals. Can i find an Investment Firm that gets long term the way i do . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Welcome back the dow snapping a twoday losing streak. Bob pisani is having a look at the big movers here at the stock exchange, and Bertha Coombs will do the same at the nasdaq. Bob, lets start with you. We are just near new highs at the s p 500. Not a lot of new highs in terms of new stocks. We had Procter Gamble and walmart hit alltime highs today. Consumer names have been doing well generally transports were weak today the shippers and the Logistics Companies have not had a good time of it, ever since fedex did their earnings announcement. That was a big disappointment a few days ago buyback story continues. Remember, microsoft last week, big buyback, target, big buyback. Towards the close toth, American Express, 125 million buyback. Remember, amex has been a huge buyback monster for the last five or six years. Guys, back to you. Bob, thanks nasdaq closing lower for a second day in a row. Bertha coombs has the details. Its for the third day in four, just edging lower. Part of the reason were not getting that big oomph from the tech sectors today you had apple and alphabet providing the upside, but they were waited down and offset by facebook and amazon. For the quarter, apple and alphabet have really been the outperformers, both with doubledigit gains and when you take a look at the sectors, were seeing the strength in chips, in hardware, software, the communications are lagging. Software after having been so strong is now just flat. Among the biggest losers are the chinese internet names, as we continue to see signs of slowing economy in china those names are dragging today and for the quarter, down double digits in many cases back over to you bertha, thanks so much for that now pressure mounting on wework the company postponing its highly anticipated ipo and new reports today that ceo Adam Neumanns role at wework is in flux. He previously worked with startups including kpcompass. Also with us, jonathan kiden, founder of torch capital, whose portfolio includes Companies Like sweet greens and acorns good afternoon to you both jonathan what was the headline error here in this ipo process management structures or deeper than that . I think it was deeper than that it was a mix of management structures and governance was clearly failing. But also, too much leeway given to a visionary, but let minimum go that past that point. Were still finding out where all the pieces lie but as the company grew, there would be an echo chamber that really enabled no sort of proper structure, governance and controls to be adhered to, which enabled them to get to where they are now which sort of raises a question, david, about whether the bar is high enough for private investors. Is there a big gap between what private investors are willing to put their money on and what public investors are so typically, in a situation like this, the last round before an ipo process is in some ways a consensus that includes investors that are spending a lot of time in the markets, fidelities, wellington, et cetera many of those firms investored in earlier rounds of wework, liking the growth story and potential, but were not part of the shift from a 20 billion company to 47 billion, which was really driven by softbank. It so meant that there was ant consensus on that valuation and a bit of a challenge now of trying to figure out where the Public Market ought to value it. The same bankers are involved in the private round as trying to get the public round off. Where do they stand in terms of the level of blame for letting this go so far down a sort of disappointing path you would think the bankers are the experts and theyre the ones who are spoe s who are sue leading this process how they let an s1 get out with these clearly massive issues that investors were going to take and still let the process run forward. You wonder just on the process side, it seems to be a big failure, because it shouldnt have come out at the time of the s1, this should have come out well before. If you think of uber where they had their issues they spent two years cleaning up theybrought in a new ceo, took action, and spent two years making sure the Public Markets were very clear, where all the issues were, spotlighting the corners and doing this in realtime in seven days is clearly a recipe for disaster. And you think of the two most experienced banks in the business would have had a chance to foresee that. Does this experience ripple out throw other companies . Theres been this tendency to see these deals as a one by one. If the Business Model of wework really had a lot of confidence among public investors and the governance was fine or vice versa, if one or the other worked, it might be a different story. So is there a Chilling Effect or is it a oneoff . I dont think weve seen that data dog went out last week, incredibly successful ipo, overscribed, huge pop. I think were seeing a wide dispersion in the outcomes of the ipos in the past month so hard to predict for investors before whats going to happen, but there definitely is a number of very positive stories in addition to some that are perhaps scarier. Does it change the perception of softbank which is trying to raise its Second Vision Fund i think thats to be determined, in the same way this is a story of one very key stakeholder and what theyre going to do, that one, there are specific lps that are really important to the composition of softbank, so i think its a handful of people not a broad market consensus as to what softbank vision 2 looks like up next, incoming ecb president Christine Lagarde tells wushat she sees as the biggest threat right now facing the Global Economy im announcing my candidacy. Im not leaving office as ministry of finance for france it is now for the membership to decide and ill leave it to their wisdom, their judgment the International Monetary fund has today selected Christine Lagarde. Madame managing director. Thank you very much bonjour. Good morning to all. Its very, very nice to be back in washington. And its great to have you here, madame lagarde, and good to see you again lovely to be with you that was a few hairstyles ago. Christine lagarde back in 2011 when she was named managing director of the imf and one of my early interviews with her shes now heading to frankfort to be the president of the European Central bank, one of the most powerful Central Banks in the world at a pivotal time in europe history, facing recession, brexit, and ongoing trade uncertainty. I did sit down with Christine Lagarde on friday, asked about trade, china, and its impact on growth right now you know what concerns me at the moment that trade instead of being that big window of opportunities for those economies that want to compete with each other, it weighs hike a big dark cloud on the Global Economy. And based on the latest calculation of the imf, if the tariffs that are either here already or threatened to be applied were applied, were talking about reducing Global Growth by 0. 8 thats a massive number. You know, growth forecast for next year is 3. 5 , you take out 0. 8, that hurts. Its few jobs, its less business going on, its less investment, its more uncertainty. Could it take us into a global recession recession is not always in the imf baseline, but the longer this lingers, the more uncertainty sinks in and if youre an investor, if youre an enterprise, whether small medium size or big, youre not going to invest, youre going to wait youre going to sit and wonder where the supply chains are going to be organized. Where the big markets or opportunities will be and how much the tariffs will apply. So youve been at a lot of these meetings, the g20, there have been breakthroughs, there have been setbacks, there have been tariffs whats your expectation at this point of whether well see a deal between the u. S. And china by the election next year . Well, first of all, youre comparing a unilateral dialogue at g20 level and a bilateral discussion that is taking place between two largest economies in the world. I very, very much hope that there is a deal, whether its partial or complete or in process, between the United States and china, because it would not necessarily yet remove entirely the cloud, but give hope to all operators that the cloud is being addressed and that hopefully it will be removed. Do you feel that trade is the biggest hurdle right now for the Global Economy the biggest risk i think trade thread against trade at the moment is the biggest hurdle for the Global Economy, yes, indeed. You know, President Trump has also threatened europe and has accused europe of protectionist measures if he moves on from china and goes to europe and starts a fight with tariffs to try to get better terms, would the european economy be able to handle that you know whats comforting is that ever since last july, there has been this ongoing dialogue between the United States and europe in order to address some of the issues that they have in terms of access, in terms of protectionism, in terms of whatever each party sees as preventing it from accessing the market and i hope that that continues and that that its a fruitful and productivity dialogue. Europe and the United States have been friends for decades and centuries. Have often, you know, been on the same side of the battlefield and have rescued each other on many occasions and im very grateful to the United States for that its not a relationship that should turn into any kind of trade war at all thats another thing that youve dope is actually youve managed to keep the imf off of President Trumps radar and off of his twitter feed, where hes often gone after multilateral organizations like it. How have you done that i think that authorities in general and President Trump is included, see value in what we do, and, you know, we dont brag about the fact that we are a multilateral constitutiinstituti like to brag about the fact that were helpful to the membership, that we have addressed special circumstances, that we stand ready to help countries like jordan, ukraine, or egypt, or any country that is a member of the imf and needs help so ive covered you obviously over the years i think our first interview is when i accompanied you to sendai, japan, near fukushima. Yes we actually talked about europe, but what i was going to say is i think one of the contributions and the common themes of your leadership has been bringing asia in closer to the imf, especially china, sdr as one example how do you think about whether that was productive . And did you set out to do that you know, when i joined the imf, i was convinced that the institution had to be for the entire membership. And clearly one of the large Rising Economic powers in the world was china and ive always also taken the view that youre better off including then excluding. So i reached out to china, that is true. To bring them to the table to make sure that they were participants in the Decision Making processes that they would be willing to play by the rules. That they would gradually open up their capital account were not there yet, but its something thats making progress that the currency would be part of that basket of internationally traded currencies that are regarded as, you know, international currencies, really by Central Banks. Does china cheat . You know, nobody cheats and everybody cheats, lets face it. Because while everybody plays the global tune and well talk about international trade, every country is also in that game for themselves because at the end of the day, people will look after their constituents its not a question of cheating or not cheating. Its a question of adopting sets of rules that everybody can play with and that will not be damaging for its domestic base is china manipulating its currency this is something that the imf looks at very carefully. The latest article that we did about china concludes that its generally aligned with the fundamentals of the chinese economy. Christine lagarde there, incoming ecb chief sort of being diplomatic, i would say, when it comes to the u. S. china trade relationship. She did work very hard to bring china to the imf, which is why i wanted to ask her, you know, whether there was validity to some of the claims, certainly you hear from u. S. , in both parties right now, that theyre an economiced ed adversary, she wouldnt go there, but she says, everybody cheats that was quite a revolution and goes on to say, its about the rules that would reign it in and as far as europe, you know, earlier on squawk on the street, we heard from her a lot. I asked whether a sovereign debt crisis could happen again in europe and got a window into how shes thinking says, theres motion towards a banking union, common Capital Markets and offers by markets to stimulate their economies. Everything that wall street says europe needs to do, but i think it gives you a peek into how shes going to look at her role of the ecb president , way more political and consensus building and way more toward a common gold, which could help the economy in a way, maybe more than negative Interest Rates or qe im glad you brought that up. I that was the standout point in terms of how tough a role she has coming on. And i think theres a consensus that is moving towards fiscal stimulus, the third of those three things that she said was needed to avoid a bank crisis. Thats the macron vision for the future and it once was the merkel vision too, but i dont think shes got the power and the authority to deliver it at the moment so lagarde has a huge political role if shes going to make that the common consensus view that is needed so the rest of the economies and governments can get behind it. But theres a long way to go, with i think, before that gets enacted. Just a hint of a turn on the fiscal side i think would propel markets in a direction theyre not prepared for in a positive way. I think it propels markets, but does it solve the shortterm economic problems and the longterm financial and monetary problems it was telling, she answered it in almost three different ways one when i said, do central bankers have the tools she said, a lot has to be on the fiscal authorities perhaps that might have more heft coming from her, as someone with good relationships. And when i asked her what her biggest challenge is going, as incoming ecb president , she said, building consensus and working together she said, im known for that and thats what i have to do so that gives you a sense of some of the measures hell have to convince all of the governments, what, almost 20 of them to figure out that was an interesting slip of the tongue, she said the 19 members of the eu, and then she said, the eurozone thats her purview right now. It was a fair slip of the tongue but ecb, different thing great interview, though. Thank you good to hear from her. Up next, we will break down the cans to see if new concerns about the economy are being overblown. Dont go anywhere. Ll street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade 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. Imagine a world where nothing gets in the way of doing great work. Where an American Icon uses the latest hr tools to stay true to the family recipe. Where a music studio spends less time on hr and payroll, and more time crafting that perfect sound. Where the nations Biggest Party store can staff up quickly as soon as its time for fun. This is the world of adp. Hr, talent, time, benefits and payroll. Designed for people. Classical Music playing throughout 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 time for a cnbc news update with sue herrera. Hi, sue. Hi, wilf. Hello, everyone. Heres whats happening at this hour american actor and environmentalist Harrison Ford joined World Leaders at the United Nations monday to discuss rain Forest Protection and conservation we need to protect what we have we need to restore what we have lost and we need to defund the mechanisms, the perverse tax subsidies, the lending policies, and the Institutional Investments that fuel deforestuation with flu season here, medical experts are worried about the effects vaping could have on the lungs. Some now say ecigarette usage could make people more susceptible to contracting influenza, adding that using ecigarettes may lead to a weaker immune system and Holiday Shoppers are expected to spend about 5 more this season than last year thats according to a new Online Survey from the harris poll. But that may not mean bigger crowds at the mall, because the survey found that 53 of all Holiday Shopping is expected to be done online cant believe were almost there. Thats the news update this hour sarah, ill send it back downtown to you. Yeah, does feel early sue, thanks. Lets send it over to mike santoli for a final dashboard of the day. Thanks for making the theme nice and easy for us today. Sometimes the calendar gives you a little bit of a hint Second Spring is what you sometimes call fall. Take a look at one of these broad gauges of the u. S. Macro economy. Chicago Feds National activity index that got updated this morning, this is 85 different measures of economic activity. Its very comprehensive. Its weighted to show the general trend in growth. What you see here is a recent little downturn and a little bounce in activity, back toward the zero line. The zero line is where its supposed to be kind of the normal growth rate, not zero growth, but Something Like a neutral level of growth, somewhere around 2 . So what im also looking at here is whats happened before previous recessions. Obviously, thats the worst recession in generations but if you look at even the mor garden variety sessions here in the early 90s and early 2000s, you have a much deeper drop and this is starting to look more like the mid90s and even these other pullbacks. So, this fits in with this idea that the macro is kind of bouncing off of relatively subdued levels not yet saying what the bond market has hinted at, which is the clockdown clock to a recession is starting. Second spring or autumn are the terms for fall but theyre all usable mike, thank you. We have a news alert on Lockheed Martin rahel solomon has the details. Nasa just announcing that it is partnering with Lockheed Martin for its orion Spacecraft Missions the contract for coloradobased Lockheed Martin is worth 4. 6 billion. It will start with three spacecraft initially, three in 2020, and up to six additionally by the end of the contract 2030. Nasa saying this is all part of building a sustainable presence on the moon. Pretty cool. Sarah, back to you absolutely. Rahel, thanks. Up next, cftc chairman discusses the outlook for regularzing cryptocurrencies and other instruments coming up. Limu emu doug hour 36 in the stakeout. As soon as the homeowners arrive, well inform them that Liberty Mutual customizes home insurance, so theyll only pay for what they need. Your turn to keep watch, limu. Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. The New York Stock Exchange officially betting on bitcoin. I. C. E. Launching its longawaited future bitcoin last night after months of regulatory delays joining us now, heath tarbert. Thank you very much for having me. Lots of debate as to whether this should be something thats fully authorized and regular utilitied or whether its more of a sort of dark asset. Where do you stand on that and the posimportance of having pro rules and regulations . Very much want proper rules and regulations. What i believe the Block Chain Technology behind bitcoin and other Digital Assets has a lot of promise and i would hate to see a country such as china or another strategic competitor advance farther along than us because we dont have the proper regulatory framework. So bitcoin itself a commodity, a currency, or Something Different altogether to some extent, its a legal question and under our statute, a currency is very broadly defined. In most cases, most Digital Assets are commodity, but defined as a commodity under our statute. Hence, we have regulation over the futures contracts. How much demand is there for Bitcoin Futures and different products and coydo you only see that dem when the price goes up its a great question its definitely that the demand is far below what we see for other commodity classes. Its still small at this point, but i think we see it growing. Youve partnered recently with the doj in terms of some investigations into some potential accusations of spoofing and market manipulation by commodities traders, the allegations of the traders are not at the banks necessarily i listened to the call from the doj recently on that and they talked up a lot about big data and ai as being something that was used to track the accused wrongdoing in these cases how important is that to a tool to you guys and does it mean that in the future it would be very, very hard for traders to break the rules on the increase in data that you have . Yes, absolutely its very important and i think what youre going to see is a new area in cftc enforcement relying on big data and relying also on partnerships with the fbi, department of justice, as well as other regulators thats something were going to be continuing to do in the future since i came about 60 days ago, weve already brought or settled 21 enforcement cases what are the ideas in the rou rounds of regulations is that a lot of activity would be migrated over to enisted futures market as well as over the counter. Has that happened . Has it been a constructive development. Do you feel like you have a good window on all thats out there in terms of, you know, risks thats being taken in the system we feel that we do have a good window and a lot has in fact moved from the uncleared space to the cleared space that said, we still have very large otc markets and were continuing to improve the reporting in those areas clearing of derivatives has been a big area of focus around brexit and whether things would continue to go smoothly. Some temporary regulations have been passed, so that it can continue whats your take on that do you think the banks are ready or could there become some major sort of outages in volatility around brexit . In the cleared space, its very important that the eu recognize the eu clearing houses, because if they dont, 90 days before that, themember of those clearinghouses will have to leave. Weve worked constructively with the europeans and the british to make sure that happens President Trump really campaigned on deregulation and making it easier for banks and sort of loosening regulations postcrisis. Do you feel thats part of your mandate . And if so, have you moved in that direction one of the things were seeking to do is recalibrate regulations. The volcker rule is a great example. I put in my statement it was one of the most well intentioned with but worstly implemented regulations in the history of American Finance and one of the problems is that for main street institutions, our local banks and regional banks, they had to comply with a bunch of stuff that really shouldnt have been addressed to them and we fixed that heath tarbert, thank you for checking in. The chairman of the ctfc up next, economics of tariffs. 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Rnch welcome back the latest round of tariffs hitting a number of products from clothing to electronics but a higher tariff doesnt always mean youll pay a higher price Courtney Reagan explains if you want to find out how retail is handling tariffs, you have to brush up on your economics 101. Typically, raising prices is going to be the last option, but if thats the case, it doesnt necessarily mean that the tariffed goods are the ones that end up with higher prices than stores why not . Its largely determined by price elasticity thats the economic theory that connects price and quantity with demand so im going to play my professor here and im going to draw the demand curve. If you have an item thats particularly price elastic at a higher price, a consumer is going to buy fewer number of those goods. Lets call it one right here so thats going to be harder for a retailer to raise prices on those items. However, there are items that are less price elastic so when the price goes up, the quantity stays about the same or perhaps similar. Thats where theyre going to want to take price increase. There is such a thing, of course, as perfectly inelastic, but thats going to be a good like insulin or milk youre going to pay whatever price it is and youre not going to change your quantity based on that price so what retailers are going through this well, home depot is actually using this theory to deal with tariff costs they call it the portfolio approach, but they actually have used the word elasticity in how they explain it. Its merchants are determine chg products consumers are willing to spend more for, and thats where theyre going to take the price increase even if that product isnt actually subject to a tariff Williams Sonoma ceo said at a Goldman Sachs conference earlier this month, it increased prices on select items and customers handled it well, leading the company to determine it actually had more Pricing Power than it even realized in certain areas macys now actually had a different experience though in recent months. Ceo Jeff Gennette said it tried price increases on some housewares, luggage, and customer but its customer had very little appetite for those price increases, suggesting that the items it picked were actually more price elastic than macys realized. Might have given them some flexibility. Courtney reagan, thank you up next, what could a potential rrwaen presidency look like for the economy and the market well discuss when closing bell comes right back w i didnt know geico helps with renters insurance. Yeah, and we could save a bunch too. Antonio fetch computer antonio . Ill get it. Get to know geico and see how much you could save on renters insurance. At ctheyre on the jobr it stwentyfour sevensy. So they sleep when they can. [ snoring ] cdw services can help. Our experts will design, orchestrate and manage the most complex technology. So your it people have more time to innovate. And get some shut eye. That sounds great. Uh, i got a malware on my shirt. Should we wake him . Probably should but lets wait till the updates complete. To free up your it staff you need managed services by cdw. People who get it. Tune in an up next, what could an Elizabeth Warren presidency mean well discuss after this short break. Othing. Mercedesbenz suvs were engineered with only one mission in mind. To be the best. In the category, in the industry. In the world. Lease the gla 250 suv for just 329 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Should always be working harder. Oney thats why your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than e trades, Td Ameritrades, even 9 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Markets. The business of trading goods and services. Nasdaq operates among the largest markets in the world. And our Technology Powers markets from indonesia to chile. Great markets are built on a foundation of trust and integrity, forged through leading Edge Technology and a smart regulatory framework. As technology advances, regulation must keep pace to allow the markets to evolve. Today we see an opportunity to modernize regulation, to make markets more accessible to investors and entrepreneurs of all sizes. From the graduate buying her first stock, to an institution investing in thousands. The markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. Thats the tomorrow that we envision and to get there, well have to rewrite it today. The president s u. N. Address geopolitical risks, market impact, insight on the trump agenda and how investors should play it now. Squawk on the street at 10 00 a. M. A new poll shows Elizabeth Warren is the top choice for the democratic president ial nomination in iowa the Des Moines Register cnn poll shows 22 of likely Democratic Caucus caucusesgoers support her. Joe scarborough stays second. This follows comments from omega advisers, leon cooperman to our scott wapner saying a warren presidency would be bad for the market right now the market assuming donald trump is reelected, if it looks like Elizabeth Warren is a credible or Bernie Sanders is credible, the market will be lower, not higher. I think she would be a bad market and bad markets generally go on for a year and go down 25 . Could be that severe . I would say i would say basically her policies are counterproductive. Theyre negative for capitalism. For more lets bring in Libby Cantrell head of Public Policy at pimco its early we know. But how much concern like that from cooperman are you getting from your clients . I actually was in a client meeting and it was the number one question, what was your outlook for 2020 its early days. To put context in it, in the 2008 cycle around this time fred thompson, Rudy Giuliani were polling ahead. In 2012, wick perry was pulling ahead at this time so it is very early days and importantly we shouldnt extrapolate so much in terms of polling in iowa remember, senator ted cruz won the Iowa Caucuses in 2016. Mike huckabee won in 2008. Rick santorum won in 2012. Its notable we should certainly take it as new information but its super early and too early to extrapolate policy or market implication. News to hit from the u. N. General assembly President Trump was just asked sort of related topic about the chinese delegations canceled trip to u. S. Farms an deferred to secretary mnuchin listen to this that was actually at our request they did delayed that. We didnt want there to be confusion. They started buying agriculture. Theyre going to reschedule that in a different time. But that was truly at our request. Why is it at our request . We didnt want confusion. I want them to buy farm product. There was no confusion. We want them to buy agriculture. They committed to buy agriculture. Exchange there between secretary mnuchin and President Trump. Is that something for the market to worry about. Secretary mnuchins account is what we understand as well. This was ustr and treasury request as well. The optics of the chinese going to u. S. Farms and maybe perceived as tinkering with domestic politics. With that said, you know, from what we understand, the deputy negotiations on thursday and friday, while, you know, collegial, did not necessarily address the big structural issues that led to the breakdown in talks in may. So, you know, you worry once again is the market kind of getting over their skis and overestimating this sort of truce or extrapolating that into settlement when, you know, these big issues, these sort of big underlying issues remain. Fascinating insight into the relationship between the president and his cabinet members. Baaing to the question of potential democratic president ial candidate warren, do you expect that she would tax center once shes won the nomination in a traditional mold of party or look, i think she has to, right, because if you look at the polling right now, on many of her problems the majority of americans, the vast majority of americans dont approve of them. Medicare for all, taking away private insurance option, you know, health care for illegal immigrants, what have you, so i think invariably she would have to tack to the center. Its just a question has she gone so left and can she actually do that credibly . And will that necessarily win over independents is a big question very early days to even talk about Elizabeth Warren as a president ial nominee. Libby, great discussion even if its early. Well have you back before the election. Perfect probably and 14 months away, guys. Weve got 30 seconds left mike, slippage for the last 15 minutes of trade but flat and much better than obviously flat has been the rule for since the beginning of last week and think the market is kind of holding in here bond yields not giving much clearance for renewed rally but seems like right now the overseas data has controlled the narrative. Well get more to chew on tomorrow especially as it relates to earnings season nike reports after the bell. That is always going to be a good look at many how the economy can hold up and that sort of thick. Thanks for watching closing bell. Fast money byes now. Live from the nasdaq marketsite overlooking times square, im melissa lee. Traders are tim, brian, steve and guy. There is new trouble brewing in ipo land one of weworks biggest investors say we wont work as things stand right now we have all the details, plus, copying the tape the one retail stock stretching higher thanks to an upgrade. A battle in the Wizarding World of silicon valley. The wands are out between