Transcripts For CNBC Closing Bell 20240714

Trade talks in october and some disappointing data here at home. Home price growth loses momentum Consumer Confidence numbers fall sharply. We are covering all angles of the market and developments out of washington with bob pisani, eamon javers, and ylan mui, also standing by. First, lets bring in steve grasso from Stuart Frankel hes joining us for the entire final hour of trade. What do you make of the price action around these headlines around impeachment i think its what you said, it was the u. N. Presentation and then it led to a little harder stance on china and it went from there to the impeachment hearings or the impeachment process. And then when President Trump said hes going to release the transcripts, the market rallied. Because how incriminating could it be if they were going to release it, right right, they thought there was a smoking gun issue that was going to arise, so if he was going to release it, maybe that wasnt the case, and were back to the impeachment process again. So a roller coaster day. Still lower on the day and it was a tremendous slide from where we started. No fears on the economy, following the Consumer Confidence data . That a factor or not really . We are for the open. You know, its funny. The economy has been the focal point and we are so close to alltime highs, the economy has been great and been performing well, that everyone is more focused on trade and the fmoc. So if you have the fed and you have trade and things work out there, the unfortunately, the economy is taking a backseat, but it has been performing lots to discuss with steve over the next hour, but first of all, stocks seeing a wild swing today on a number of headlines out of washington. Bob pisani has a look at whats been moving things intraday. Bob . Its been a real roller coaster day, wilf. Four separate events really moved the markets. We started positive on the day, but we began weakening just after the open that was the weaker Consumer Confidence numbers than expected then, and remember, the u. S. Consumer is helping prop up the whole world economy. That is important. And then President Trump emphasized the negatives on the china trade at his u. N. Speech, saying china had not adopted promised reforms and that it consistently stole intellectual property then around 12 30 eastern time, impeachment talk got louder. Speaker pelosi said an announcement will be made later today regarding impeachment. And then, as you heard, markets came off the lows a little after 2 00 p. M. Eastern time when the president tweeted that he would be releasing a transcript of his conversation with the ukraine president. That would be tomorrow here. Now, remember something here, you take a look at some of the sectors that moved here. Predictably, the sectors more sensitive to cyclical sectors, bank stocks, for example, industrial stocks, some of the Energy Stocks all were a little bit weaker, caterpillar and 3m weaker they really havent rallied much at all the more defensive names, Consumer Staples and some of the utilities all did a little bit better, we have noted. Procter gamble at an historic high along with walmart, historic high. One of the few groups, few two stocks hitting 52week highs on the s p 500. Sara, back to you. A good market and a bad market, those two, make new highs. Bob, thanks. President trump says he has authorized the release of that transcript from his call with the president of the ukraine a phone call which has sparked controversy and calls for impeachment. Eamon javers with the latest details for us what do we know right now, eamon . Heres this tweet from the president in the past little while this afternoon, making some news of his own, saying, im currently at the United Nations representing our country, but have authorized the release, he says, tomorrow of the complete declassified and unredacted phone conversation of my conversation with president zelensky of ukraine. Youll see it was a very friendly and totally appropriate call no pressure and unlike joe biden and his son, no quid pro quo this is nothing more than a continuation of the greatest and most destructive witch hunt of all time a couple things to note here one is that the president is saying hell release this tomorrow we do know that nancy pelosi, the speaker of the house is planning to make an announcement of her own at 5 00 today so this will give that transcript to the public after that has taken place this afternoon. And the other thing is that the president has a meeting here with the president of ukraine, also tomorrow, meeting with president zelensky so President Trump here has got a couple of highstakes moments coming up throughout the next 24 to 48 hours on this issue of impeachment. The president bristling here, though, and saying he didnt do anything wrong, sara eamon, the gap, i guess, between the two sides is what the whistleblower may have said and might be on top of the transcript of that phone call. Yeah, absolutely. And thats not what the president is promising to release at this point. There is a whistleblower complaint. We know that much. We dont know exactly whats in it or who this mysterious whistleblower is its been reported this is someone from the Intelligence Community who worked at the white house and saw something that they considered to be out of line or dangerous the ig of the Intelligence Community appears to have agreed with that assessment but the ig is now being blocked from transmitting that report to capitol hill thats what democrats want to see, and its not what President Trump is now promising to release. Wilf eamon, thank you. A quick question, steve, on the market reaction. Is this just about the idea that impeachment for any president is uncertain . Or is this a trump trade the markets still up. The dow is up, what, 45 or so since the election this is a market that has liked mostly trump policies. Maybe except for trade right you know, and i think the they do like the trade aspect of it, because thats been a bipartisan issue they dont like the unknowns around the trade issue so when that is done and completed, the market is going to rip higher from here. So its hard to tell how much of this is a trump process or is a president ial process so i think were better off right, impeachment proceedings back with clinton and the ken starr investigations, that led to i think a 20 downturn at the time its always that unknown. Its never a good process. But with the senate where it is firmly now, i think this is more of a political statement versus something thats actually going to happen or transpire so the markets should probably try to digest that before they start to shoot first and ask questions. Lets get more on this. House speaker nancy pelosi, of course, expected to make an announcement this afternoon. Ylan mui has been following this for us from d. C. Ylan, whats the latest . Reporter well, wilfred, nbc news has now confirmed that Speaker Pelosi is planning to announce a formal impeachment inquiry. That is according to two democratic sources and she talked about sort of around this earlier today at the atlantic festival when she said that the president s conduct has entered a serious new stage. We have to have the facts thats why ive said, as soon as we have the facts, were ready now we have the facts. Were ready. For later today. Reporter now, pelosi is headed back to the capitol where she is spoeupposed to be meetin with the chairman of the oversight committees in the house. At 4 00 p. M. Today, she will be having a meeting with her entire caucus its members only. And after that is when she is scheduled to make that big announcement at 5 00 p. M now, the last count that we have seen is that at least 167 House Democrats support some form of impeachment action and that is a number that could be tipping her over the edge, particularly as we see a number of purple district democrats, swing state democrats, who are now in favor of some type of action, guys ylan, thank you lets bring in ed mill, senior washington policy analyst at raymond james. At first, what do you expect from Speaker Pelosi this afternoon . Ed you with us . Maybe he cant hear us i mean, so this is likely to happen after the close yeah, i think this is more about the process and the procedural stuff that has to happen, so that they can start pushing that heavy lift down the road a bit but i dont think that the markets, a couple of days from now, if there is no smoking gun aspect to this whole debate, then, at a certain point, were going to have to move on and i think this would probably be the lastditch effort for the democrats, if this process doesnt have any grip to it, i think the democrats are going to be forced to actually move on, because it looks a little ignorant if they continue down this path. And steve, in terms of the Market Action weve seen today, also seeing yields slip, is that relating to the politics or just a little bit of market i think its all relating to the politics and i think, if you look at the trend as of where the yields were going, while the president was speaking at the u. N. , you started to get that, twos, tens were dipping back into that inversion sort of territory, heading back that way. So i think its just a process of where the trend had been, where yields were high, they went dramatically lower and then they spiked again and now theyre dropping off just a little bit i think weve got ed mills back online, policy analyst at raymond james. You do. Great good to have you so probably you have been fielding a lot of calls from your clients what are you telling them as far as what to expect from pelosi this afternoon and how that could move this story forward, possibly towards impeachment proceedings . We expect an announcement that a formal impeachment inquiry will Start Talking to folks on capitol hill today and what theyve told me is that theres been a tectonic shift among kind of most democrats, feeling that there is a need to at least start something here from a market perspective, i think the Biggest Issue is that legislating is dead. You know, there is not going to be a deal on anything thats being announced out there, be it drug pricing, infrastructure bill, immigration, the usmca, ki kind of a budget deal coming down the pike. The bigger question is, if legislation is dead, what does trump do with china trade . Does he try to double down, win over his base like we saw at the u. N. Today, or does he seek the mini deal . I think thats the debate in the next couple of days. Ed, is this a dangerous ploy for the democrats . If they bring it up, fail, does it embolden the president a year away from an election . It could, and i think thats been Nancy Pelosis hesitancy he here but what you heard from democrats is they went from thinking the Mueller Report was overly partisan or a debate around this to a gavelizatilvan to defend the constitution as was reported, we might get the transcript of the phone call, but are we going to get the igs report . Is that Inspector General going to be able to give congress what they want to give to congress . And what we also saw was some of this reporting is that this phone call supposedly is not the only issue that this whistleblower has brought up so are there other things besides this phone call . Thats what democrats are going to want to know. Thats what keeps this a story for longer so for investors that are worried about prolonged uncertainty around the impeachment, weve been here before with the Mueller Report and stocks brushed it off, how seriously would you tell investors to take this one today . I think thats the debate here its one of the things that we see with the Trump Presidency is something that seems like a huge deal today in that everyone here in washington, d. C. Is freaking out about, we move on from tomorrow and the market especially moves on theres a number of different cross currents here, so i think what we see is we need to see a concern about the economy and the Political Risk in d. C. Then as the impact on the market, when the economy seems to be doing well, people will discount d. C. When the economy is not doing well, people exacerbate whats going on here in d. C its the macro and then d. C. Comes into play. Ed mills, thanks very much. Thank you up next, the crisis at wework kicking into high gear today as embattled ceo adam newman steps down. Well discuss what it means for the future of the company, after the break. Later, we will get another read on the consumer nike reports after the bell. Well tell you the key things to watch from that report, straight ahead. As we head to break, a check on our data tracker today, we have a bunch of it. Consumer confidence coming in weaker than expected for september. A reading of 125. 1 versus 133. Home prices raising 3. 2 in july over the same period last year according to the latest caseshiller reading and richmond fed coming in below tites. Dow is down 142, 47 minutes until the close. 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. 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. 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And a lot of them have not been very strong, like lyft and uber, at all beyond meat certainly has, but its coming off 5 so even the strong ones getting hit. The only groups that are higher in todays market are utilities and staples. So its a lowyield sell kind of day. Yeah, s p 500 down three quarters of 1 now to a potential ipo that many on wall street are watching major developments today in the wework saga as cofounder adam neumann steps down as ceo. David faber joins us with the latest david, what can you tell us . It is quite a saga, isnt it . I think you can also not really sit around waiting for that popipo more quite a while its not coming anytime soon, my guess, at least based on the conversations ive had, youre not going to see wework even try to hit the Public Markets until some time next year. But the story today, of course, is, as weve been reporting, is a real possibility over the last couple of days, mr. Neumann has stepped down as ceo. Perhaps not a surprise given what weve been reporting in terms of benchmark and softbank and perhaps some other board members, also. And significant holders unhappy with his leadership, at least in terms of some of the things that hes done and were reported by the wall street journal in a story last week. Whats perhaps more surprising is that he is also effectively ceded voting control of the company. Thats certainly what i would be focused on in part he had shares that gave him ten votes, hes now reducing that to three votes, according to people familiar with the situation. It still will make him the largest single vote holder he has also got, obviously, his economics which remain the same. But he has essentially removed his ability to actually control the company fully. Is it negative control, perhaps. Meaning he doesnt have more than 50 , but hes got the ability still to weigh in on things as nonexecutive chairman, the question will also be, what is his daytoday role going to be. We have two new coceos of this company. Artie minson and Sebastian Gunningham are taking over as the coceos whats going to be their focus daytoday what im hearing, its going to be on the core business. So some of those other initiatives that had been undertaken by wework will perhaps be scaled back if not cut entirely will there be layoffs . That is a question mark. Are they going to slow the Global Expansion of the company as they try to get to profitability sooner what happens that is something, as well. Even so, its very hard to imagine that this is a company that will be ready to hit the Public Markets anytime soon, wilf and sara, given everything that has happened there in terms of the tumult and well, the questions about valuation, which is where this all really started, isnt it . You know, there have been any number of companies that were loved by investor because of their Growth Prospects and those same investors were willing to overlook questions about governance in this case, mr. Neumanns behavior, to some extent, his sale of so much stock, and other key governance issues got in the way because there were so many questions about the overall ability of this company to earn money longterm and grow at the rates that they said it would, and whether it was deserving of a multiple that sort of started the process, which ends at least today, with him stepping down as ceo and the hopes that they can reorganize and move ahead from here david, as you said, the delusion of his Voting Rights somewhat surprising to the market i know we dont expect an ipo anytime soon, but presumably, he would have only done that in return or in the hope of a return of something, maybe a promise from the likes of softbank that they would invest a certain valuation, some further capital, if he did cede those Voting Rights. Its a good question, wilf. And i think there are going to be any number of people, including myself, that are going to try to understand what took place over the last 24 hours what were those conversations like it might not have been what you were saying. It might not have been a carrot, it might have been more of a stick. Listen, adam, if you are to stay a ceo, youre cut off. Were not giving you anymore money, and his financiers. Could you imagine jamie dimon whos been very involved in this process throughout saying to him, were done with you, as well that conceivably, wilf, have been an influence of him saying, well, if im going to have any hopes here of seeing this Company Going into the future and grow in value, ill no longer have access to the capital markets. And this is a company that still needs to consume enormous amounts of capital before it will reach the possibility i was also reading that theyre going to lay off as many as 4,000 to 5,000 employees. Quite a turn from a growth company, one of the hottest startups ever heading for an ipo. If you want to get to profitability sooner, it may be. And remember, there are some other efforts that are not about the core business, sara. Theres a school, a number of other efforts that have been undertaken that i think there are a decent amount of employees who are allotted towards that may not see that much time left in terms of at least the focus for these two new ceos david, if it is a stick rather than a carrot from massa san or jamie dimon, isnt that unbelievably duplicitous, because they all endorsed the s1 in the first place so if this is a punishment, its pretty hypocritical if they backed the s1 in the first place. I think youre right. I think youre right, wilf in some ways, they did not have a proper measure of the market, did they they didnt understand listen, there was pushback there was a hope even in the spring when the company was thinking about it that things would get cleaned up prior to the filing of that original s1, when people read it, they rolled their eyes at some of the things that were in there but youre correct, they misread the market, it would seem, the underwriters, perhaps some of the largest investors, as well, in terms of the willingness of investors to step up for this, at least as it was currently constructed and given the governance issues that we are all now much more well aware of, wilf things change, i guess is what we have to say, and you have to change along with them a david, as always, thanks very much in the meantime, facebook is buying brain computing startup control labs thats right, wilf. Ktrl labs allows humans to control computers by wearing a wristband which relays their thoughts to a device facebook did not dloes tisclose cost of this deal, but it was less than 715 million this startup will be folded into facebooks division that focuses on hardware. Its one of several new divisions that facebook has been investing in to reduce its reliance on its traditional advertising business, which has seen its growth slow over time now, the timing of this deal, though, is notable, because the ftc is currently looking into facebooks antitrust issues, specifically into whether facebook made acquisitions that were intended to squash competition. Definitely an area to watch. Guys, back over to you all right julia, thank you lets go over to mike santoli for todays market dashboards mike, what have you got today . Sara, what we have is extreme doubts thats relating to netflix were going to take an alternative look at how to value that company after its big slot in a tailspin spinoff stocks have been an unremarked weak point in this market financial frenemies, sometimes they Work Together and sometimes at odds. And Consumer Confidence sliced up so first of all, netflix, look at it over two years, compared to the nasdaq 100. So other very large cap nasdaq growth stocks. It has given back almost all of this massive outperformance it had built up, right here this is about 180 outperformance at one point, i believe, although thats showing it to be a little bit lower than that here we go, were basically even with the nasdaq 100 over the past two years not terrible, but really, obviously, showing a rethinking of exactly how much of a premium, how much of a head statter you want to give netflix credit for in the streaming business heres another way to look at it the decline in the stock has really brought its market value per subscriber well down now, this is the peak from last year at the peak valuation and this right here assumes that the 2019 estimates for subscribers gets to 173 million. Thats whats expected right now. Arguably, not really paying more than you have in the past per subscriber the question is, guys, is that subscriber still worth as much as investors thought it was in the past mike, awesome chart interesting pullback that weve seen recently. And in perspective, where do you stand on this netflix pullback its been pretty significant, but still clearly a stretch valuation. The problem is, there couldnt be a worse environment for a growth stock like netflix. Ive loved the stock, ive loved the actual product of it, but when you get into that value versus growth, theres no way a stock like netflix is going to weather that storm and i believe that wework, to the points that you were making before with david, has a large component to the way weve seen this growth versus value as of late conduct itself in the marketplace. Only really affects netflix with the f. A. A. N. G. Names . It affects amazon as well, but theres a host of other reasons. Jeff bezos has told us, this was going to be an investment cycle for amazon, which means that that spigot of earnings is probably not going to flow through. Wherever he gives you the warning, thats an investment cycle, you should probably sell the stock. And thats what i would do with that stock right now up next, the nasdaq getting hit hard today in the selloff today, but a number of wall street analysts are out with some new bullish calls on big tech well have details after the break. Plus, financials are among the bestperforming sectors in the s p 500 so far this month. Well discuss the state of the industry with the ceo of Citizens Financial Group and as we head to break, heres a quick check on Commodities Oil falling today, down more than 2 , still lower as well well be right back. [upbeat action music] pilot were going to be on the tarmac for another 45 minutes or so. Sometimes, they just drop in. Obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Welcome back to closing bell. Time for word on the street. Jeffries out with a new analyst note on apple, saying that the street underestimates apples position for the 5g cycle. The firm estimating 208 million iphone units will be shipped in 2021, while street expectations are for 190 million units. Guggenheim upgrading snap to buy. The firm seeing underappreciated core fundamental momentum there and strong usage trends. And Rbc Capital Markets is raising its price target for alphabet from 1,500 to 1425 per share, reiterating its outperform rating on that stock. The firm says google maps remains one of its greatest underutilized platforms, estimating that maps could generate up to 1. 6 billion in revenue by 2021. Says its not a thesis changer, but actually, it is the basis for this upgrade, and says it will help google maintain that 20 Revenue Growth that theyve seen for nine years on a big scale. Google maps seems kind of quaint its kind of weird, but we all use it, right . So it is something that if they can monetize that, then, obviously, its going to be a tailwind but google has been at the bullseye for the eu, for the u. S. , for a lot of regulatory measures and i think the stock price reflects that and the performance reflects that theres some sort of a headwind that still is ongoing. Which is not really an area that this note in particular covers in depth, because this is more kind of the incremental note on the maps but theyve put maps alongside whatsapp as the two parts of the sort of big cap tech stocks. Its true, we all use waze or maps and they own both its interesting how apple is skating through. Its up yeartodate, its under the radar, not getting hit by any tariff concerns, anymore, at least. That Services Business is a 39 billion revenue generator. And now you have 5g. And that note thats coming on top of that, im still long the stock, i remain long lets move forward and look at whats driving the action its the white house and momentum for impeachment, which has been a big factor. President trump also promising to release new details of his call with ukraine, while Speaker Pelosi will have a formal announcement out this afternoon. The president also taking a hawkish tone on china and his speech at the u. N. And some disappointing data in the u. S. As Consumer Confidence numbers have plunged we are down 191 points on the dow. Time now to get a cnbc news update with sue herrera. Hi, sue. Hello, everyone heres whats happening at this hour the Defense Department announcing it will stop selling ecigarettes in army and air force exchanges effective september 30th at least nine deaths have been linked to vaping products and today the cdc said several hundred more cases have been confirmed this past week Tropical Storm karen is pounding the northeastern caribbean with heavy rains, which could cause flooding and landslides in puerto rico and nearby islands the storm is hitting hours after Puerto Ricans were shaken from their beds overnight by a 6. 0 magnitude quake followed by three aftershocks. Overseas, french labor unions demonstrated nationwide against president macrons proposed overhaul of the Pension System more than a thousand people marched in the rain in paris, behind a banner reading no to social regression. And free agent nfl wide receiver Antonio Brown was in a miami courtroom today for a civil suit, claiming that he trashed a multimilliondollar condo last year. The owner of the mansions at aqualina sued brown claiming that he caused 35,000 worth of damage you are up to date thats the news update this hour sara, ill send it back downtown to you sue, thank you. Weve got a news alert right now on democratic president ial candidate joe biden. Kayla tausche with the details well, sara, the former Vice President and his family were the subject of that call that President Trump had with the ukrainian leader that is now the subject of a whistleblower complaint. And stopping to make some remarks on the campaign trail just moments ago, biden said that any political attacks tha s he is sufferi ining as part of he expected and is temporary, but anything that President Trump is doing by suggesting hes above the law could cause permanent damage to the office of the president obstructing efforts to investigate actions is not the conduct of an american president. Its an abuse of power it undermines our National Security and itviolates his oath of office, and it strikes at the heart of sworn responsibility of the president , a president has to put National Interests before personal interests. Now, biden stopped short of calling for impeachment of President Trump. He did call on the white house and intelligence agencies to provide all necessary documents for congress to carry out this investigation, including the formal whistleblower complaint, which so far has been withheld worth noting in that picture you saw of biden right there, he has been campaigning in short sleeve shirts, in polo shirts and button downs, but clearly trying to look the part of a u. S. President in making those remarks about President Trump and what he sees as the next steps here sa sara, wilf kayla, thank you very much. Up next here on closing bell, despite todays selloff, tom lee tells us why he thinks the bear case for the market is wrong and why hes calling for a rally into year end. When it comes to your customers expectations, theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Cool. In the human brain, billions of nefor people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. Filmgate is growing really staffing a small bquickly and. Is challenging. I needed to fill a production coordinator role. I was looking for someone with specific skills. So i posted a job on linkedin. Maribel had all the skills i was looking for. And looking at her profile. I saw shared connections. That was a plus. But the most important thing. Is the ability to connect to people and she had it. And i knew. She was the one. Post a job today at linkedin. Com grow weve got about 2 minutes left of trade. Lets send it over to mike santoli for his second dashboard. Mike sara, talking about being in a tailspin, a whole category of stocks that historically perform very well, which is the shares of spunoff companies these are Smaller Companies that have been distributed out by a larger conglomerate, really lagging, lately. Look at this chart csd is an exchangetraded fund that tracks spunoff companies, spinoff stocks, down 8 over the last couple of years massive nderperformer, also against ipos, which until recently it outperformed the market, but it had given some back so whats this about part of it is the mix of companies. A lot of basic materials and other type of industrial valuetype stocks. But also, it seems like theres a lack of sponsorship for these sort of orphaned companies theyre not in indexes therefore, index funds generally dont own them and they sometimes are cheap and hedge funds that used to do a lot of this special situationtype investing have less assets coming in. And therefore dont have as much firepower. Its interesting to look at, because a lot are relatively well known or the products of wellknown companies that have essentially been neglected by the market, guys i wonder what the p\e differential is of those two pools of stocks . Its pretty vast, i dont have offhand the p\e of the spinoff companies, but by far, very devalued. H sprks is in there, dow chemical is in there and a lot of Smaller Companies so i would imagine its really an outgrowth of the value underperformance, too. Mike, great stuff thanks very much stocks are trading lower, down 10 points on the dow weve got 20 minutes left to trade. Lets bring in tom lee, cofounder of managing partner at fund track Global Advisers tom, good to see you, as always. Great to see you guys the market rallied up a bit, pulled back again. This kind of plateauing is actually a great buying opportunity . Yes i think the market has been stuck. You know, volatility has been shrinking and i think theres a general belief that because were late cycle, and there are a lot of scary things out there, that this is going to lead to a break on the downside. And what we found is that if you look at the last 70 years, wherever the market has been flat for 20 months and 12 months, but really hovering near alltime highs, three times it resulted in an upside breakout for equities whats the why this time . Well, i think that its going to have to start with the belief that were not late cycle. So i think that cyclical data has to start improving so i think in our case, the u. S. Pmis really will start to bottom in the fall. And thats because of not only destocking, but oils kind of a little bit of a tailwind for the pmis and i think the second factor is that this inventory sort of destocking that took place because of trade wars, at some point, businesses have to start expanding again. So i think thats going to be the cyclical lift. But now that theres so much cash on the sidelines, and you know, a lot of doomsayers. A lot of our clients are cautiously positioned. And u. S. Pmis can start to improve, even if trade and eurozone data doesnt improve . Yeah. Not yet richmond was negative today. But what you have to keep in mind is that the pmis are mean averting, because youre really asking, same, better, or worse so eventually, things drift back to 50. But interestingly, if you had to say, whats the best leading indicator for the pmis, and it probably had a 50year track record of almost perfectly calling the turns, its the tenyear minus 30year yield curve, ninemonth change we started at the start of this year, we pointed out, at the start of this year, that pmi the yield curve was telling us that pmis would be below 50 in the fall thats also telling us well start to see a turn late this year you put out this theory that some of the tumults weve seen in the repo market, this shortterm funding squeeze might have something to do with the delayed wework ipo and you got a lot of grief on twitter. Explain what you mean. One, im not trying to do a pileon to say wework is going to destroy like the planet but one thing that i think is important to keep in mind is that the turmoil in the repo market is can be caused by concerns about collateral. Now, the single biggest piece of collateral in the repo market overnight is treasuries and no ones really worried about taking treasury collateral, but the second largest piece, which is almost 30 of the repo market is mbs and cmos, which are held by reits whos the largest tenant for the reits . Wework we have 24 million of lease space. The largest tenant in london but more importantly, 20 of the funding for reits is typically overnight repo if you had to say last week was a week where people started to think about the solvency of wework, because they have 12 to 18 months of runway left, it could possibly be a concern for taking some collateral and that could cause repo prices to move. So is that a sign that we should be more concerned about the spike in the repo rates . Or less concerned, because theres something specific that shows theres no other liquidity fears in the marketplace i think if its concern about the quality of corrallateral, thats where fed intervention works quite well because the fed can step into the market and say, how much liquidity does this market need . And you have to remember, wework has 24 billion, i think of operating leases, its a significant number, but not so bad that you cant fix it with the fed. I dont know, grasso, what do you think about that wouldnt we have seen some sort of turmoil in the reits, which we really havent . When you look at the corporate real estate market, its a huge market so youre talking about a number that is just exponentially more than what wework owns in that marketplace. I dont disagree with tom that maybe theres an issue or an underlying kneejerk reaction that could have spooked narcotics. A and if thats the case, there wont be a longstanding i actually do know that wework isnt enough to actually spook and ripple those markets so if it was just a kneejerk reaction, okay and i dont think it should be looked into further, but im not sure thats it really quickly, whats going on with bitcoin . Theres a bit of a crash against all of the coins right now one, since july, weve been telling our clients that we need the bitcoin misery index to get into lower levels. Weve been waiting for bitcoin to drift lower but this week has been the disappointment around the backlaunch you know, it went live on sunday night. And its a very important project. Its really going to be a highquality way for institutions to do oneday settlement with bitcoin. But, you know, should that have had a blowout first day launch, that may have been some expectations and i think thats a disappointment but i think its kind of improper to judge the success on just one day of backs launch. Below 9,000, now down 16 . Tom lee, thank you up next, weve got your last chance trade steve pkiisicng a sector thats sitting near alltime highs. Well reveal the call, straight ahead. You should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Classical Music playing throughout 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 breaking news on juul. Seema mody has the details for us juul is preparing restructuring of its staff as it braces for slower sales and impending u. S. Crackdown this is according to dow jones, quoting sources the ecigarette Company Worth noting has about 3,900 employees and has been adding hundreds of staffers in recent months, but according to this report, juul is now going to slow hiring and review job postings and eliminate some staff as it braces for a u. S. Crackdown. Guys, back to you. Yeah, seema, thank. Tesla shares are sinking today. Phil lebeau has more on whats driving the move phil a couple of stories that are out there, theyre not huge headlines, but they are those that make people say, hmm, could we see some problems for tesla in the future . Lets start first with the fact that theres a shareholder lawsuit going on in southern california, regarding the acquisition of solar city. As part of that, some of the documents that were released yesterday include solar citys solvency being questioned by auditors also, neyo, the electrical Automobile Company based in china, its q2 earnings far below expectations, which has people saying, could we see a slowdown in demand when it comes to electric vehicles in china remember, tesla will be reporting its Third Quarter deliveries likely towards the end of next week and tesla also is looking to open that plant in china by the end of the french quarteourth q. So those questions about the ev market in china, those are likely to linger around for a while. Phil, thanks, as always steve, some question marks, as well, because of wework and one of those stocks that doesnt really have a proper fee evaluation yet so with tesla, theres so many questions there and i dont even know if the value versus growth really applies there. Theres so many other issues with competency at the helm as far as direction but when you look at the debt levels and where theyre trying to get to and the competition, the stock has been under pressure and rightfully so nine minutes left what are you going for ill look at whats green look at utilities up 23 , against s p up 18 all of those safety bets, utilities, staples, reits, theyve all been the place to hide and i think youre going to get more of the same going forward, kprk xlu is my last chance trade. Nike earnings are on deck 75 of analysts say isth stock a buy. Well break down the numbers you should be watching, coming up. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. So servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. You should be mad 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. Nike will report earnings after the bell and sara has a preview for us sara well, the street has been largely optimistic about nike lately, given its on a hot innovation streak, strong sales, and its ability to weather global risks heres what to watch china, china, china. Can doubledigit growth continue there as tariffs fly and slow down its been the biggest growth driver digital has also been a key driver for this stock and the result results between the sneakers apps and partnerships with ecommerce companies, they grew in 2015. Analysts expect that momentum to continue however, theyre dealing with a strong dollar. Foreign exchange could weigh big. It does ding nikes sales, profits, and margins nike has been dealing with it relatively well, but this is a company that gets most of its sales from overseas. So it does hurt. Nike says that the strong dollar effect should start abating after this quarter, but the dollar has kept strengthening, so it really could cut into margin, sales, and profits, creep into guidance, and could threaten that target by 2022 that they promised, 50 billion in sales but overall, if you look at the fundamentals of this business, nike has been a winner for back to school, air force ones are coming back. And theyve been taking share from rivals adidas and under armour slipping a little bit ahead of those numbers, but strong for the year those numbers typically come out around 410, 415. Time for the closing countdown lets get to sean cruz very quickly. What are you focused on today . I was really focused on the Consumer Confidence numbers. And weve been talking about the expectations component that would be very important, wolf. And that had a pretty significant dropoff between 106 and just below 96. That doesnt bode well for the psyche of the u. S. Consumer. And if you looked at Market Action right around that point, Consumer Discretionary sold off, and you saw consumer staple, a little bit more of a defensive, no matter what, consumers will be out there purchasing those goods, Consumer Staples actually rallied and are one of the two sectors still in the green today. Watch the consumer, as always sean, thanks lets send it now back to mike santoli. Third dashboard. Sara, financial frenemies, stocks and bonds, they have a complex relationship, but lately, its been pretty consistent when bond prices have gone down, that means yields going up stock price have gone up this is the relationship between the s p 500. You see it be pretty jagged here what i want to point out, this is that big recovery, that riskon trade, that rotation into more cyclical areas of the market we saw a few weeks ago. We backslid off of that right now. Yields have been coming down the stock market stalled and today you get the first day of heavy pressure i think you would have to say that thats still a downtrend in this relationship, which means we no longer can say that we have decisively turned off that bottom of course, you did that back in december, as well. Its a relationship to watch its obviously not been decisive just yet, but you have to monitor exactly the tone underlying things. And speaking of bonds, lets get out to Rick Santelli in chicago. You know, if you look at a oneweek chart, mike, twoyear note yields have been cascading lower really the entire curve. But it sped up today, a bit, as stocks moved lower based on some of the political issues of the day. If you look at tenyear note yields, since august 1st, were hovering at twoweek closing low yields and finally, theres the dollar ind index. Certainly, its down almost a third of a cent today, but look at that chart going back to highs on the 12th of september steady eddy and only twothirds from fresh 28month highs. Now well go to bertha, where a splash of political waters certainly doused the nasdaq. Yeah, we are basically seeing a selloff here, both in large caps, small caps really across the board. Biotechs are the worst off this afternoon. Mylan labs was one of the big decliners early on evercorps talking about its price cuts on its lipitor drug in china analysts also seeing a big role in netflixs decline today, which is weighing on tech and on communications netflix hitting a low for 2019, down for the fifth straight day, as it sees its price target cut today by 32 over the bob at the nyc bertha, first 1 move in the s p 500 in the first three weeks. The president lifted the market a little bit when he said he would be lifting the transcript of his discussion with the ukraine president tomorrow but it didnt matter goldman, banks, essentially ending at the lows today i want to point out, momentum stocks weak today. Momentum stocks are weak, and those recent ipos that weve seen, pagerduty, datadog, most of them software related, except for smiledirect, all notably weaker today theres the closing bell, and we are closing essentially just off of the lows today. Dow jones industrial average down 147 points. S p 500, down 25 points, essentially a 1 move today on the s p. Good afternoon welcome to the closing bell. Im wilfred frost. And im sara eisen here with mike santoli cnbc senior markets commentator. Take a look at how the markets finished up the day, lower across the board we saw the s p go out with a decline of about a tenth of 1 , half a percent for the dow, 1. 5 for the nasdaq composite so you saw which got hit hard. The same with the russell 2000 index of small caps. Technology, really all the sectors actually were lower in the s p, except for the safe haven utilities in staples which tend to rise when yields fall. Energy, also, was a big loser in the session, so were financials and consumer stocks. Weak Consumer Confidence, hawkish tone on china, and then some impeachment drama heating up in d. C. The impeachment drama certainly led to the biggest intraday leg lower we tried to recover from that in the afternoon, but did end near the lows of the days i just picked out oil prices energy, the worstperforming sector was down 1. 6 and amazing how quickly weve come back down again from that geopolitical tension spike between iran and saudi arabia earlier this month theres the monthtodate chart. We slipped 2. 7 , sorry, today, back down to 57 on wti i picked up the social media stocks and micron. Why . Because they all were referenced in President Trumps big speech to the u. N. General assembly today. And all pretty much had a negative reaction to the news. He talked about social media, went after them for threatening sort of democracy and having too much power and censorship. And micron, he used them as an example of how the chinese are stealing are intellectual property and treating American Companies unfairly anyway, all of them got hit after that speech. Joining us to talk about the market today, Carrie Firestone is back, chairman and ceo of res Asset Management and also a cnbc contributor. Also, neil audrey mckorgi for merrill and bank of america, merrill lynch, welcome to both of you first to you, mike, on the selloff that we saw today a number of factors cited. How much damage was really done . I dont think a lot of lasting damage was done to the trend. I was pointing out, even at the lows of today, the s p held above its lowest of two weeks earlier. Its been up in this range, hovering just below the highs. That kind of took it out of where it was stuck all of august i think thats a net positive. But obviously, its been a bit more of a riskoff feel to things some reminders that we have not yet gotten kind of liberated from this idea that were in a global slowdown and we dont know how much of it and what it means. And bond yields have been signaling some more caution. I think that fits into the mix the response of the politics has a lot more to do with the fact that the market was already a little bit more heavy and took that as an additional reason to back away. Carrie, whats your take on the selling today . Well, the interesting thing about today is that the markets started flat, up slightly, it bounced around and it really took a nosedive when the president started to talk at the u. N. And his tone was very negative, related to china thats been the biggest weight on the market. Whats going to happen with this trade war . Will there be a resolution how long will it take . So number one, it hits the market hard when the president sounds as if nothing is imminent but in addition, as we move into earnings season, were going to start hearing about how companies have felt the effect of this trade war, tariff people postponing orders, people stalling hiring. And whether thats going to bleed into the Fourth Quarter. And if that happens, we could be flat or down in the Fourth Quarter for the s p earnings and thats going to make people start to talk about a recession, which wont, obviously, be good for the market so that began to really weigh in the afternoon, which took the market down. So, with all the buzz today about impeachment and were waiting to hear from Speaker Pelosi, i thought it was a good time to dust off the charts from history of president ial scandals in this country. President clinton and impeachment, president nixon in the 70s, and what you see if you look at the market charts from both of those periods, theres the clinton impeachment, is, es, it created some volatility in the initial investigations, but then the market just charged forward. It was a boom time it was a bull market, it was a good economy and then if you go back to the 70s and look at the nixon era, a lot more market turmoil, but it was also coinciding with an oil shock. Right which eventually led to a recession. So hard to glean much,mike, ou of history, except for the fact that it can lead to some uncertainty, i guess, in the overall economy. But both of them had other factors. Those impeachments both happened in the second term, right . There were no implications for that president s reelection and so i think thats one thing you have to keep in mind the way the market is viewing this is not, is President Trump going to be removed from office . Because presumably thats not really on the table at this point. Its more about how does it affect 2020 and does it kind of create a lot more, you know, kind of turmoil in intergovernment relations until that point what do you think well, i think today is just the old adage has to be dusted off, which is, markets dont like uncertainty it doesnt like political uncertainty, economic uncertainty, and traderelated uncertainty. And unfortunately, youve got all three of them today. But ill just step back and say that the fundamentals look really good for stocks and thats where were still overweight u. S. Equities when we think about the u. S. Economy, its still fine the u. S. Consumer is fine. The u. S. , when we look at the forwardlooking indicators for the labor market, the initial claims are still at a low level. We are creating jobs at the rate of 150,000 jobs a month. Wages are rising, importantly, across the board for every american worker. So this is a solid fundamental story for the u. S. Economy and i dont think this portends that the Business Cycle is going to end but on the big topic of what we might expect out of d. C. Later this evening, lets get to elan mo ylan moui for an update reporter the speaker has been meeting with democratic leadership and members have already begun arriving for a Party Meeting thats taking place right now. Cnbc has then confirmed that she will snouannounce the start of formal impeachment inquiry into President Trump. Now, already, pelosi has announced that the house will vote tomorrow on a resolution disapproving of the Trump Administration blocking the release of that whistleblowers complaint. Guys, the chairman of the House Intel Committee said today that the whistleblower wants to speak to his committee hes hoping that that will happen this week and democrats are betting that launching a formal inquiry will strengthen their hand and allow them to get that complaint into their hands. Back to you. Ylan, thank you kari, how focused are you on this as an investor . Weve seen impeachment discussion since President Trump was elected. And hes found a way, each time, to somehow finesse around it the fact that he was able this afternoon to find a means of releasing the transcript about those phone calls, its interesting that and emails. Its interesting that he must have been counseled, legally, to the extent that they dont feel that theres enough information in the transcripts that could be extremely damaging at the time of the inquiry about obstruction of justice related to fbi director comey, that looked to be a situation where it would be very damaging to the president. He found a way through that. And so, as an investor, i cant say that im going to start to think through what i would do if hes impeached or when i just think that there are so many other factors, such as getting this trade war settled and what the earnings are going to look like beginning next week, and what happens with the fed. Im not going to worry too much about impeachment. Niladri, back to the broader markets. Within your portfolio of u. S. Equities, how riskon are you . How high were high quality across the board, all across asset classes. We like dividend strategies, for example. Theres still 15 trillion off negative yielding debt outside the u. S. , so the negative, thats always leading to equities as a source of income for investors. And so we like two kinds of dividend strategies. We like the companies that increase sustainably their dividends over the longterm and also like those companies yield at a reasonable price. If a company pays above average yield at a belowaverage valuations, we like those part of the markets and within cyclicals, we still favor financial financia financials and within the Consumer Discretionary side of things, we like that, as well. Niladri and kari, thank you both for joining us. Thank you a news alert again on tesla. Phil lebeau with the details phil sara, with about 20 minutes ago, we were talking about tesla and the importance of china as it prepares to open a plant in china potentially by the end of this year. Elon musk out with a couple of tweets after the website teslarati put up a post saying, look, there are a whole bunch of jobs that have been listed for tesla in china and after that post went up, elon musk tweeted up, tesla is building a major Engineering Team in china, including heavy focus on software, firmware, for factory and car. This includes original engineering of new factory processes and cars, great engineers will only join if original engineering is supported, not just localization and again, tesla is hoping to open that plant in shanghai by the end of the year. Guys, back to you. Phil, thank you still ahead, investors are getting set for nike earnings. We will have instant analysis of the results as soon as theyre leedn st a few closing bell will be right back i get it all the time. Have you lost weight . Of course i have ever since i started renting from national. Because national lets me lose the wait at the counter. And choose any car in the aisle. And i dont wait when i return, thanks to drop go. At national, i can lose the wait. And keep it off. Looking good, patrick. I know. vo go national. Go like a pro. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Turned out to be a wild day today on wall street, with the dow swinging 374 points. Bob pisani looking at the movers at the nyc Bertha Coombs does the same at the nasdaq bob, over to you it was a difficult day. Let me show it to you graphically. We started off with Consumer Sentiment around 10 00 that was a little disappointing. The president s speech emphasizing the negatives on china, saying it had not adopted promised reforms, consistently stole intellectual property, is that second circle there and and we had Speaker Pelosi making an announcement on impeachment later in the day and we turned around that the president tweeted he would be releasing a transcript of his conversation with the ukraine president tomorrow, but we still ended near the lows for the day. The usual suspects were down we saw banks down, saw Goldman Sachs and industrials down like cart pillar. A big down day many of the Energy Stocks with oil down. Procter gamble and walmart, as weve been noting, one of the few sectors on the upside. Consumer names, those are historic highs for both of them. Guys, back to you. Bob, thank you very much for that the nasdaq jumpunderperforming other major averages bertha has the detail details. We saw declines across the board. Phil lebeau talking about them concerns from investors as tesla hits its worst day since last july and netflix today also a big loser, as well that helped bring down the communications sector, while netflix hits a low for 2019, fox shares today hit an alltime low. And it was a pretty bad day for the ipos recent ipos with all of that overhanging coming from the negative head lanes on weworks postponed debut and its ceo stepping down. Lyft, Livongo Health and smile direct all hitting new lows today. Which ones are most linked to those issues with wework netflix, perhaps netflix might be, but in terms of the issues, you mean, renting out space . In terms of wework have its ipo pulled and the fact that its valuation was in question, clearly that hurt some of the recent ipo stocks . But any of the bigcap tech stocks, as well . I dont know that it really affects them in terms of, they dont seem to have the same kind of issues with regard to management, but for netflix, right now, the issue is the fact that you have all of these companies coming into their turf and one of the things that netflix doesnt have that some of the others have, whether its apple or amazon, they dont really have a platform where they, themselves can make revenue off of other Peoples Services so, thats one of the things that you have in terms of nbc universal, our parent company, or apple or amazon or even roku, which hosts all of these services netflix, at this point, really just has to compete only on the content. Bertha, thanks very much. Lets get over to mike for the final installment of the dashboard. Drilling into the Consumer Confidence numbers today, calling it a confidence youth quake. But first, look at the difference between consumers estimate of the current conditions, their present situation and their expectations this has been in steep decline things right now seem fine in terms of my own personal finances, but the outlook doesnt look so strong the pattern here, these are the shaded areas for recession is that as the cycle goes on, this has a very steep downtrend, right . Which makes sense. As the cycle goes on,employmen gets better, people feel like they have you know, their household situation has improved but maybe they cant expect it to stay as good. This is getting pretty stretched, though, and down toward levels where we saw, lets say, ahead of other recessions, this is a dynamic you have to keep an eye on but again, this is a function of a very long expansion, as we saw in the 90s, because this doesnt seem to really pull out of this. It just seems like a normal day. And finally, look at Consumer Confidence by age category really big split right now now, theres been a divergence in general, but the blue is the youngest under 35 years old. This actually has been right up near the highs, it remained pretty close to the highs. This is over 55, that green line thats had a big divergence. So you had a lot of bummed out baby boomers right now that are dragging down the overall confidence figures i think if you wanted to search for a silver lining, this might be one of them, simply because younger people spend more of what they have they make more bigticket purchases. Older people pretty much dont have a lot of change in what they decide to consume perhaps thats a good thing, but it really does show you kind of a dark mood among older folks. Looking at the history, though, it does suggest that that divergence cant last for long it shouldnt last for very long, right. You did see Something Like this over here back in 2015 and 16 thats a pretty big split, as well so in general, thats the typical tone, but when you see a big split like that in a given month, its kind of interesting. Mike, great stuff thanks very much meantime, nike numbers just hit. Big beat on the bottom line from nike. 86 cents a share, 28 higher than the quarter before. Analysts were only looking for earnings per share of 70 cents as far as the revenue number, coming in better than expected 10. 7 billion for nike the expectation was around 10. 4 billion. This marks growth in sales of 7 digging through the geographies, the two places you go to first are north america and china. Lets talk north America First coming in a little bit light, with north america, but really pretty much on target. Went 4. 3 billion in sales in north america. The expectation was around 4. 4 thats 4 growth china continues to be a standout, showing double digit Revenue Growth in this region. The Greater China revenues, guys, 1. 68 billion. Better than the 1. 5 expected. And that marks another quarter of 22 growth in Greater China 6 growth in europe, middle easily and africa, we dont see a lot of growth out of that region, especially now with the economic slowdown. That was better than expected. And you know, currency continues to be a headwind those numbers would all look better if not for currencies, but im reading you the numbers that have been factored in already with the strong dollar and ill just show you one other bright spot here, which is gross margins. 45. 7 , also coming in better than expected. So, what this tells us is that despite the global headwinds, the slowdown fears, the strong dollar, which nike feels, they are continuing to grow in every region of the world. And theyre continuing to innovate and get consumers to pay up for their products, which is reflected in the margins, their directtoconsumer strategy liz dunn is here, pro forma founder, ceo also joining us by phone is sam poser, analyst at susquehanna. Liz, your First Impressions on nikes results the numbers look really strong obviously, they continue to outperform expectations. And i think theres an expectation that numbers get better from here they are heading into an olympic year, 2020, and theyre lapping some heavy investment spending and so i think that going forward, you know, theres an opportunity and these numbers might be enough for nike to break out here sam, whats your take on these numbers . They look really good the most impressive i mean, china was really impressive, as was all of the international markets, significantly better than what we anticipated, and they let and while the they let their expenses flow through. So they really, it looks like they got the most out of this earnings report, despite the anticipated currency headwinds we are seeing nike shares hitting alltime highs in the afterhours session here, surging more than 4 the Conference Call does kick off at 5 00 p. M. Eastern, liz. And we get a lot more from the nike call, including guidance. Last time they painted a very bullish picture. Well get more of a breakdown in terms of detail sales, which has beena key growth driver, directtoconsumer sales but it feels like that strategy is really whats driving these earnings yeah, the consumerdirect strategy is very important its very important for a brand like nike to make that transition now and theyve done it pretty flawlessly so its impressive, hopefully we can hear more about that on the Conference Call. I think well also hear about tariff issues. And what the outlook is for growth how much exposure do they have in chinese manufacturing right now . I believe its about 25 is manufactured in china. So, you know, not nothing, but i think they are very nimble in terms of manufacturing foot wae footwear is a more difficult category to move but i think the outlook is whats really going to drive stock from here. And it seems like they have a lot of opportunity going forward. Sam, are nike unique in shrugging off the impact of the trade war, whether its sales in china or still north american sales growing, despite some of the issues the trade war could have been imposed on it . You have to think how much of their businesses outside the u. S. So, you know, they do produce a good deal of product in china, but theyre able to price globally, so you can really manage that exceptionally well plus, when you have a ton of innovation, that gives you a lot of Pricing Power at the same time so, we really think that nike is in very good shape, in regards to these tariffs you know, people that have a large majority of their business in the u. S. , thats a whole different story. But, you know, a small percentage of their business product made in china, large percentage of their business outside, and a very you know, a very strong and growing directtoconsumer business, all are exceptionally strong offsets for that sam mentioned the stock trading at alltime highs afterhours. 91. 52 now. How do you rate this company, given the innovation streak its on and the results that its showing and the consistency of the results in this kind of retail and global macro environment . Well, i mean, look, i think that theyre doing you know, this is one of the best companies out there, at a point where everything appears to be clicking and not only did they beat on the gross margin, but i think they beat on the sgna as well, and thats the first time weve seen that. And if theyre willing to give, you know if theyre able to hit these great numbers on the top line, and more efficiently market, you know, it bodes exceptionally well for how everythings going here. Sg a up 9 i think the question for sam was how does the stock rerate from here. It was at the high end of its trading range, i think it breaks through that you dont see many largecap consumer names like this growing at this level consistently and with this kind of dominance. I think the brand gets a premium and it continues to move higher. What were you going to say . Even though i dont thinks were low, for five months, its been going sideways. Now this clicks to a new alltime high. It along with starbucks, estee lauder and mcdonalds are these globalbranded companies that can trade at 30 times earnings but the market has rerated them i dont know if its up from here liz, sam, thanks both very much now, back in january, wework ceo adam neumann talked about what takit takes to run a unico company. It is possible to set a vision, stick to it. But you have to block out the noise, not worry about what people say and now just eight months later, neumann is stepping down as ceo what it means for the companys future and its plans to go public do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Still ahead, adam neumann is out as weworks ceo, but is it too late to save the companys ipo . Thats next. After my dvt blood clot, i wondered. Could another come around the corner. Or could it play out differently . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fdaapproved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. If you had a spinal injection while on eliquis call your doctor right away if you have tingling numbness or muscle weakness. While taking eliquis, you may bruise more easily. And it may take longer than usual for bleeding to stop. Seek immediate medical care for sudden signs of bleeding like unusual bruising. Eliquis may increase your bleeding risk if you take certain medicines. Tell your doctor about all planed medical or dental procedures. Whats around the corner could be your moment. Ask your doctor about eliquis. [upbeat action music] pilot were going to be on the tarmac for another 45 minutes or so. Were back time for a cnbc news update with sue herrera. Hi, sue. Hello, wilf hello, everyone. Heres whats happening at this hour president ial accompanied joe biden calling on President Trump to fully comply with congressional investigations with trumps phone call with the ukrainian president , in which trump allegedly pressured the leader to investigate bidens son. The president does not comply with such a request from the congress, if he continues to obstruct congress and flaunt the law, donald trump will leave congress, in my view, no choice but to initiate impeachment. That would be a tragedy. Reporter massachusetts imposing a fourmonth ban on sales of all vaping products the move goes further than new york and michigan, which earlier this month banned the sale of only flavored vaping products. And in chicago, two trains collided along a commuter line this morning Authorities Say at least 14 people were transported to area hospitals, although luckily no one was seriously injured. First responders were on ladders investigating the crash, but the line remains shut down you are up to date thats the news update this hour sara, ill send it back to you sue, thank you. Wework ceo adam neumann announcing he is stepping down, although he will retain his chairman title adam neumann decided that the scrutiny directed toward him had become too much of a distraction, so artie minson and Sebastian Gunningham, they take over as coceos, and well, guys, they have their work cut out for them wework still needs more money, but is no closer to an ipo and a big part of wework was neumanns success. It was built on his charisma at the start of the year, he told me that it took just 28 minutes for massa san to make the decision to invest the first thing ill say about the relationship is i think partnership gets measured when times are i dont want to say difficult, because nothing about this is difficult, but when things change but something beautiful about massa and mines relationship is how we communicate now, it didnt take very long for that relationship to turn troubled as wework became a liability for massa and softbank, guys, now that neumann is gone, does that change the picture . I think there are still a lot of questions that need to be answered back to you. Deirdre, thanks so much for that lets bring in jeff sonfeld with yale school of management to get his take hi, jeff, how are you doing . Main question how are you main question is how surprised you are and how significant you think it is that he also diluted his voting power . Well, you know, people are supposed to say, i hate to be an i told you so, but i love to be an i told you so. Ive been saying this for over two years and on air here quite frequently that this house of cards was coming down. This was a failure in misunderstanding what the marketplace is for this 20something business based on beanbags, distressed furniture and espresso machines. Theres no technology here and the governance model is to badly flawed and the strategy itself there are people in this business and weve talked about these players before that have a significant comfortable businesses this is not a new business serve corp. Created this exact business 40 years ago, very profitable in 38 cities. And of course, weve talked about iwg, the old regis model, which is in 70 more countries than Adam Neumanns perhaps ever visited. And way more than in size and scale than weworks in terms of their sprawl and yet, somehow, this guy has been treated as some guru genius because hes such an effective selfpromoter. So, jeffrey, you know every single ceo on the planet, who should take this job i love that question. You know, i know we probably only have a few minutes, but i would love to take the next half hour until we hear from nancy pelosi and whats happening on the next topic of the day. Well give you three minutes. Okay actually, theyve got two very good people in there as coceos. These twoceo models generally fail there are a couple of examples at oracle and bridgewater, a few places where, in fact, it does work in this case, theyre there strictly as an interim model neither one of these guys has been a ceo before. Theyve been stabilizer for charismatic types. Who is out there someone very close to the softbank people, trusted, loved by them whos all dressed up and ready to go pretty soon is john legere you heard it here first. I think theres some rumors out there that are starting to spread that hes the perfect guy for the job. He actually people forget, after he left dell, where he was really successful in asia and all the parts of the developing world, he went in and turned around the legacy, the caucus of global crossing, after a much worse scandal than this, the implosion there. All the underwater cables and things, very puffed up john did an amazing job. And hes been very good, actually, at revivals and resuscitations before he went off over to build. Tmobile, he came in there it was a disaster after the at t deal had collapsed john came in and he built up value. That was enormous there, that people thought, well, theres an effort for sprint to buy them. That they wanted to do that back in 2013 or so. And tmobile was so much smaller. Tmobile dwarfs them now theyve been growing at 40 a year glassdoor tops out would he take it, though, jeffrey . You know, i think he should, but i think he would i would have thought he should wait for elon musks job, because at least theres a there there. Theres real technology. But john would know how to shape something out of this. And as youve been seeing and reading out to us, were looking at perhaps up to a third of the workforce being dismissed pretty soon theyve got 12,000 people and were already talking about possibly 4,000 pink slips coming out. John knows how to come into a demoralized culture and build energy hes been a leader on the diversity front. It would be crazy for him to not take john into taking this job whatever it takes. Make him another billionaire maybe he already is one. But make him another multibillionaire. John would know how to do this hes energized and just as inspiring, but hes honest and smart. And outspoken and likes to go after critics. Theres a good wall street journal profile of him from a few weeks ago on the success hes had and his unique management style absolutely. Just a quick question, jeffrey, where do you stand on how much blame false at the feet of the head of the investment banks that were backing the original version of the s1 . You know, theres an old beatles song, i think it was the flip side of hard days night that i should have known better. That was probably 1963, 64. Is, thats what they should be singing. These investment banks should have been know better. Weve seen people fall victims to these charismatic types before, whether or not it was lulu lemon or American Apparel or theranos, very sophisticated people, the ones who get snookered in these art frauds all the time and dont want to admit it, but theyre just as susceptible flesh and bones as the rest of us and they make mistakes and these investment banks should have asked them questions. P. T. Barnum is supposed to have said, theres a sucker Born Every Minute thats whats going on here. And wall street, i hate to admit it, wilf, they were suckered too, along with softbank buying in whered they get this 47 billion for 1 billi2 billion o. You look at their s1, they have 47 billion of longterm lease commitments and 3. 5 or 4 billion of the shortterm leases to rye to cover it the 47 billion was a number out of the sky to try to meet where their commitments are. And for wall street to not even realize that, when it goes into the s1 that theyre printing, thats just crazy. Jeff, thanks very much for joining us great to see you, as always. Thank you up next, we will discuss the outlook for banking mergers and how Financial Companies might be impacted by lower interest rates, when we speak to the ceo of Citizens Bank and as we head to break, take a look at nike shares hitting record highs after beating wall streets earnings estimates. The call kicks off in 22 minutes, but solid report allaround bottom line, top line, inpecially 22 Revenue Growth in cha. 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. 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. 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. Regional banks closing down more than 1 today and underperforming the broader markets this year as potential headwinds from lower rates have weighed on the sector. Joining us now from a cnbc exclusive, citizens financial chairman and ceo also, congratulations, five years since your ipo yeah, its great. Its been a great journey for five years, going by like the blink of an eye. I want to start on the u. S. Consumer, if we can. Some Consumer Confidence data out this morning, which was a negative surprise to some. Are you seeing similar, softer data there no, were not so i think those readings bounce around, but fundamentally, the consumer is in great shape you know, you have record low unemployment, youve got real wage growth. So i think the consumer still feels confident and is borrowing money and using low rates to refinance some of their highcost debt what about the broader economy . Are there pockets of weakness youre concerned about look, the economy still overall feels pretty good. I would say the middle market businesses, the business man is stepping back a little bit, being a little more circumspect, waiting to see how the trade tension plays out. Maybe a little less Capital Expenditure and investment, but overall, again, same phenomenon there, as well youve got some of the pricesensitive pools of money like lbo firms and commercial Real Estate Developers taking advantage of the lower rates and putting money into the market. How are those lower rates affecting you . Yeah, well, i think most banks are fundamentally asset sensitive, so they benefit when rates rise they have more challenges when rates go down. What weve tried to do is really focus on the cost of our deposits and starting to move those down reasonably aggressively, because all of our commercial loan book, which is tied to libor, is repricing right away so i think well have a few head winds last quarter, theyll continue into this quarter as the fed is in a reduction cycle. Fortunately, we have diversity indication in our revenue our Mortgage Business is on fire so, were generating significant fee revenues around the refi wave in mortgage so you kind of have to look at the puts and takes on the overall pnl. But i think our revenue picture overall will be fine bruce, thanks so much for joining us congrats again on five years since the ipo. Still ahead, upping the ante thats what Bernie Sanders just did with his wealth tax proposal rrsnd compares to elizabeth waen a what that could mean for your wallet, next nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty for farmers here, this is our lifes work. 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. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. 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. Of the value youll find at fidelity. Liberty mutual customizes your car insurance, hmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty shares of nike hitting an alltime high this hour after revenues and earnings topped estimates. Our Julia Boorstin just spoke with tennis legend Serena Williams about her relationship with nike and her own fashion line listen the main thing i learned is dont get in nikes space, because they do it well. Theyre such nike is such an amazing leader at what they do, but we do something a little different. Were more on the fashion, off the court type, nonathletic wear so im actually wearing my dress today, incidentally. But its really just about, you know, just being who you are and loving who you are, loving our product, and just having fun in it and its a directtoconsumer brand, so we kind of wanted to cut out the middle man and bring really great fashion that last point is very relevant to the earnings picture today, directtoconsumer, that is something you are going to hear on this Earnings Call from nike they call it to a direct some of it consumer ochbls strategy. What it means is, theyre investing behind their website, their sneakers app, theyre not relying on traditional partners like a footlocker or department stores, which are all hurting right now, and going straight to the consumer and that has really ramped the business, 4 growth in north america, 22 growth in china, and the other results that are investors are plotting right now. And all the data you get from that, too. Of course, thats always mentioned, as well and also not to take them on at their own game, partly because she continues to work with them on that front, but very much a fashion label shes saying there than necessarily an athleisure brand shes been a great ambassador for them i think she worker nike sneakers to the met gala. Shes really nailed it and super fashionable. So thats been a Winning Partnership on both sides. Not much controversy, like weve seen with other athletes a real legend always a treat to hear from her. And thanks to Julia Boorstin for bringing us that up next, president ial accompanied Bernie Sanders announcing a wealth tax that would hit many more households than a similar plan by rival Elizabeth Warren the details, coming up sfx [phone ringing] you still have service . Call the Insurance Company its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. Welcome become Bernie Sanders unveiling his new wealth tax plan. Robert franke has more on that. Its billionaires feeling the burn the bern sanders tax with could you tell their earns in half over the next years. There should be no billionaires we are going to invest np working people tax those earning 32 million rising to for over 10 million. Jeff bezos, would pay about 9 billion in wealth taxes this year thats also along with his income taxes and property taxes, Capital Gains whatever else he pays gill gates would pay 8. 5 billion. The top ten would pay 60well in wealth taxes this years. Sanders expects the tax would raise 4. 5 trillion in revenue over ten years that is about twice what Elizabeth Warrens plan clearly a hail mary saying illtake your wealth tax and double it. Questions whether it taxes backs down to the center as we see who the nominee is. Up next, a pulse check on the food industry. Hearing from kind with his take on the shifting consumer and how his company adapts closing bell will be right closing bell will be right back 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. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Announcer how some tech turbulence is stirring up wall street kind healthy snacks announcing today its pulling fruit bites line from stores after sales failed to compete up with competitors that laufrmd two years ago. One of the only fruit snack brands made without synthetic dyes however they say theyll be Available Online joining us more with daniel lubts ski, the founder and executive kmarm. Why dont you give me the fruit bites the ones you pulled. Those are the fruit packages. Whats actually in the dsh zbloosh the fruit bitesy just whole fruit and kids were used to the gummy bearish glowing in the dark product they werent selling enough. Were elk them then only online. But when we found out 90 of fruit snacks lead with sugar with artificial ingredients and dyes we started looking into it about 42 of products kids eat contain synthetic dyes including 95 of fruit snacks but also pickles, fruit cups, popcorn the fd pachlt allows the synthetic dies into products but what we havent stuart start you have enough is them being so prevalent in the food system and trying to raise awareness of the issue. I thought the Consumer Companies found religion on this issue. All you heard from them in the last five years were removing artificial flares and going to real ingredients and dyes that sort of thing. Are you saying its disinjennous. Extraordinarily prevalent close to half the products kids eat have synthetic dyes. Because kids have been trained to expect shine yao things thats why we wanted to raise awareness. That maybe food in nature isnt as glimmering and shiny but thats what nature gives. Part of the mission is to deliver healthiness not consumer and also help the environment. Where do you stand on the beyond meets and burgers and the balance between the two, some suggested they are great for the environment not the consumer. I like the companies and products and think they play a role the valuations are a little coup coup we want stuff to look like what it is and be what it is a whole nut bar would be a nut bar. If we made the veggie burger we would celebrate the veggies not trying to get them to pose as something they are not but there is there is an opportunity for substituting meet meat for acting like meat opinion a role. We havent talked to you in a while. Tell tell us how business has been doing be. Its been a weak spot in some of the Big Companies like kellogg whether that fiskts. Were happy with fortunate. Wear li were growing double digits in our krrpgt its one of the companies thats agreeing. Harder than when we were frohhing triple digits but still healthy growth. The valuations of beyond meat are stretched. Are you tempted by the ipo you command that valuation. What i dont want to come out get have a grandmother bite at the price and it kbloids and i got rich but people end up with nothing. Im scared of the shall about shall did dsh what was it that greenspan used to say, the irrational exub rans of the market id rather play the longterm game stay private that works better for us. Good to hear the Mission Statement statement not all recently potential ipaever have been the same. Thanks for joining us thanks for having me. Final thoughts near the session lows by the close today. 807 of the volume was to the downside, the first day i think of determined selling. We have only backed up 2 from highs. I wonder if the bond yields are now in the lower settled zone, not gichg a clear path to a a real kind of risk on trade. A few seconds to pelosi that should be interesting. That does it for closing bell. Fast money begins right now. And we start process this hour with breaking news. You have pennsylvania live look at capitol hill where House Speaker Nancy Pelosis is expected to announce a formal impeachment inquire for a President Trump at any moment pl well bring it to you live. The. The team of reporters standing buy ammon javers traveling with the president live outside the u. N. But kim off with kickoff with ylan muy. A moment of truth that is how the speaker has been describing her decision to democratic lawmaker and speaking right now. Last tuesday we observed the anniversary of the adoptio