Transcripts For CNBC Closing Bell 20240713

Balloons increasing 26 to just a little less than 1 trillion. Joining us for the hour is chris verona, Strategas Research partners here we are, we can see it, we can taste it, a new record high and everyone is really calm around hiere. The lack of euphoria is telling. Theres this great divide between perception and reality what are the headlines impeachment, recession, china, pmi under 50 but the reality is, signs of cylicality are starting to show up in every corner of the globe. You see it with semis and with trucking stocks, german dax is at a 52week high, the banks are acting better. I think the tone of the market is so different than what the tone of the front page of the paper says every day and i think thats bullish great to have chris with us for the whole first hour of the show, particularly given that we might have that record alltime closing high for the s p 500 the key level to keep an eye on, by the way, 3025. 9. We are at 3022 at the moment lets focus in on the big stories were watching today Kayla Tausche has the latest on trade. Bob pisani is covering the surge in stocks after that move. Josh lipton, mike santoli, and David Garrity are digging into amazons earnings for us principle s in u. S. china trade talks spoke by phone this morning. The call madehe headway on specific issues and the two sides are close to finalizing some sections of the agreement President Trump and president xi are expected to sign that deal in a few weeks in chile, but one person is not happy with where things stand and thats white house trade Hawk Peter Navarro im told by three sources that navarro has been agitating to try to get President Trump to make china commit to stronger language on intellectual property and technology enforcement. So far, im told that effort has been unsuccessful. Reached for comment, navarro called this fake news, but certainly worth noting that there is some agitation behind the scenes guys kayla, i guess the key person, if he also was not happy in terms of the president s team, would be ambassador lighthizer reporter yes, but ambassador lighthizer has also acknowledged that tariffs above a certain level are not sustainable for the u. S. Economy while he was an early advocate of tariffs, im told he was not an advocate of the tariffs that were put on in september and the tariffs that were set to come in december so perhaps sympatico on floont lets get to bob pisani driving the market to new highs. Bob . And kaylas commentary is a very important reason why we moved up today lets look at why were having the rally today. That trade talk optimism, the primary reason were moving up u. S. Consumer, number one reason the market is holding up around the world. Visa, capital one had very good comments about the u. S. Consumer and we had good guidance from intel. Semiconductors are bellwethers for the global economy, for the consumer economy, intels comment also very good and their guidance was good. There you see lamb research, a Semiconductor Capital equipment companies. Lamb research had good comments other day. Apple is at a 52week high as well a lot of industrials despite the Global Concerns hitting new highs. Sherwin williams, also 52week highs. Weve got new highs, but where is the volume. Boy, am i getting complaint from wall street. The volume is really disappointing weak for equities, etfs and equity volumes. I think theres a lack of conviction about where the trade talks are going. The market is expensive. Everyone wants the market to break out zdecisively or break down all the big names, 50 normal volume half the normal volume this week guys, back to you. Bob, thank you very much for that see you later in the hour. Shares of amazon are under pressure, although well off their lows of the session after an earnings miss, only down around 2 . We were down as much as 8 earlier. Josh lipton has details for us hi, josh so, wilf, amazon delivered guidance that spooked investors. Its forecast for q4 operating income well below what amazon expected that as amazon is in spending mode to make good on its goal to offer prime members oneday delivery the stock in the red, but as you mentioned, wilf, well off lows rbcs mark mahaney was on cnbc earlier today, saying, he would have bought the dip. Its the kind of investment, mahaney is arguing the company should make as it deepens the mote around its businesses guys, back to you. Thank you for that, josh lets send it over to mark santoli for todays market dashboard. Here is what we have. We happy few a few giant retail names that have dominated that sector and a couple of pictures on that stand on tiptoes thats what the market is doing. Both the breath measures and the indexes themselves, touching those alltime highs and a gentle condition this is a look at the credit market a pretty strong underpinning of the stock market this year zpooi and finally, the greater share take a look at how good investors have had it over the last decade. So we first take a look at two different etfs tracking the retail sector. Xrt is one we look at a lot. Its equal waited. Every stock counts the same in that one the rth is market cap weighted that one has vastly outperformed biggest holding, amazon, 19. 5 in the rth but also, home depot, walmart, costco, target they are the ones that are working and outperformed and it shows you essentially it has been a winnertakemost market amazon down 1. 5 today, but yeartodate, its been a big, big driver of this one and also since amazon is both retailer and f. A. A. N. G. Tech stock, fdn is an etf that essentially acts like f. A. A. N. G. The traditional f. A. A. N. G. Names are about 40 of it. That is actually language thats in white right here, language a little bit, whereas the traditional tech etf driven by apple, semiconductors, software has outperformed. So two different ways to see how amazon is shading a couple of these different an indexes, guy. Mark, im not sure about next couple of themes, but is the first one some shakespeare, some henry the 5th. You might be on to something. I didnt pick up the latter ones, but i love first one we are a band of brothers. Im looking forward to the rest of the dashboard brothers and sisters. We are. Im just referencing shakespeare. Right, right. Shakespeare was not so good at throwing back in the day we need to fix that, citizisl im saying for more, lets bring in mark garrity. When were talking about amazon, where were expecting tidings of great joy for the retail season, amazon is delivering some rather scroogi scroogish outlooks whats behind how theyre seeing retail for the rest of the quarter. Historically, theyve usually been very cautious and sandbagged going into a forward quarter. And for a name like amazon, the Fourth Quarter is quite significant. In the broader sense, it looks as if the u. S. Consumer is in fairly good shape with respect to the Fourth Quarter with, i think, overall holiday sales thought to be up about . Now, amazon, given what theyve done to strengthen their position in terms of oneday shipping and also hiring 75,000 new workers in the quarter certainly seems to be gearing up to capture the lions share of that gain. What concerns you about the quarter . I would say, a tech, you know, a tech for this market from that standpoint, as we look at what the profit driver is for amazon, amazon web services, some people were picking the nits, that yao een decelerating growth there i would make the argument, even though growth decelerated, top line to 9 billion in the quarter, that still is very strong and it certainly confirms what we stau from intel, in terms of intel seeing strength in Data Center Chips chris, from the chart side of things, when you see an intraday recovery like this like a massive stock, is that encouraging . Its impressive the price action from amazon today, you have to give if hat tip to it. Reminiscent of caterpillar earlier in the week, but what i think is notable, this is the second or third time this earnings season where a big bellwether has missed and it hasnt taken the whole sector down with it we saw it with boeing, cat, texas instruments. Didnt hit the semis i like the fact they have been able to celebrate the miss and the stock. I think its a very strong sign. When you look at the challenges for amazon to get these Big Investments in cloud and in shipping and in warehousing. I think its a matter of seeing the execution and seeing at the same time that others like a walmart doesnt necessarily try to step up and work from the same playbook or do so as well as amazon does fringe that standpoint amazon has the mantle and will continue to hold it i think bob pisani touched on a point. Stepping back from amazon itself, are you getting concerned about the political threat i would argue amongst tech, its a social media issue. Its the fact that these companies dont accept the responsibilities that news organizations such as this does in terms of providing factually correct information. Obviously, were not going to see what Mark Zuckerbergs results are until after the close next wednesday, but clearly, zuckerberg would do his company, facebook, a real service if he were to say, we will step back from doing political advertising entirely for the 2020 election cycle, and perhaps as a result of that, you know, serve to diminish some of the interest from a regulatory standpoint and david, upstairs, you were talking to me just a little bit about the access to easy, cheap money right now. Weve got a fed meeting coming up next week how are you seeing the inflows into the bond market certainly, if you were look to look at spreads, theyre not widened out to a point where you would say, this is a recession ariel indicat recessionary indicator ratings agencies seem to be lightening up and making it easier for subpar credits to get access so is there off risk at the margin i would say anytime that indications come up that the gatekeepers are not necessarily doing their job, people need to be concerned thank you very much for joining us were on the record close watch. And here we have the Dow Jones Industrials about up 160 points, half a percent or so you can find out where you can still get opportunities with stocks near this unchartered territory. Up next, the outlook for bank stocks and how financial is fueling financial growth, when were joined by wells fargos mike mayo. As we head to break, heres a check on our data tracker. Consumer sentiment this month coming in slightly lower than expectations on concerns about e adwawith china were back in a couple of minutes. 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. Is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Welcome back citigroup promoting jane fraser to president and head of Global Consumer the stock is up about a percent and a half today, along with all of the banks trading higher. Joining us to talk about the banking sector, the managing director and head of u. S. Large cap research at wells fargo. Citi is mikes top pick. Thanks for joining us. Thanks for having me. Lets talk about this change and theres been another highprofile recent change in leadership below mike at citi. Is that a sign theyre doing things well or not well, citi is doing some things well and some things not. So, look, this quarter was a very difficult quarter for citigroup and the industry you had a rate cut and a familiarity yield curve and they still grew revenues faster than expenses thats fantastic and thats fantastic for citigroup and the other large Banks Like Bank of america and jpmorgan but what they havent done well is they still have worst in class efficiency, returns, and stock market valuation but thats not an opportunity. We think citi is rowing in the right direction, but maybe they need to get a speedboat to where they want to get to a little bit faster a fresh set of eyes with james fraser as head of consumer has the potential to help. Whats the significance we have a change of cfo, a change with the head of the Investment Bank leaving, and a change at the head of consumer is that a vote of confidence at the board or is that position under threat, as well. If you have worst in class returns, even if you have qualified individuals, you dont have the right team on the field. I think its a matter to have getting a fresh set of eyes in a few different areas. And i think citigroup made a mistake. In 2017, citigroup said, quote, our restructuring is over. Your restructuring is not over when you have worst in class returns. Youre now a new head of wholesale, a fresh set of eyes that should only be good to maybe reengineer city group more aggressively their information sharing agreement expires in ten weeks they can be friends, they can be foes, as long as city moves in the right direction, gets the higher returns we expect, gets the improved efficiency that we expect, we think the stock can increase by double over the next three to four years, but plan b could be that value act exerts more pressure to possibly make changes at the top. Mike corbitts not free here the indication is hell be around for the next three to five years and jane fraser could be the first woman as ceo of a major bank bir but everybody has to prove their job every day. You said that citigroup may need a speedboat to effect some of those changes forwards efficiency could value act be that speedboat . Well, the way value act operate, and weve written about this, they work behind the scenes theyre the quiet activists. Theyre not going to be coming on cnbc. But when you look at what they did with microsoft, its slow and steady they are, the way i view them, as an adviser that also owns a lot of stock, but if push comes to shove, they have held a proxy contest in the past. But there could be some influence influence behind the scenes i want to switch influence and talk about another stock thats cheap trading at or below book value thats Goldman Sachs last week i caught up with chairman and ceo David Solomon and i asked him whether he was frustrated that the valuation was so low and not rewarding him for investments hes been making im not annoyed i just expect and understand that in the context of a Large Public Company like this, its going to be a proven i think the team has executed incredibly well. Were building for the longterm. I feel good about the progress that were making. Would i be pleased if world recognized it sooner sure but i dont expect that. I know that we have to deliver and the onus is on us to deliver over time for our shareholders and im confident we will do that mike, where do you stand on this on the earnings call, he said, three to five years is the time it takes to see the real return do you think it will come sooner than that . Goldman sachs has the lowest noncrisis stock market valuation in its history so david solman, youre right, the stock market is saying, prove it so what we need, we need guideposts along the way the good news is David Solomon is leading a push for more transparency and we would like to see some metrics that we can track. Having said that, as you said, the stock trades around tangible book value for a company thats grown book value twice as fast as the s p over the last few decades. So it is very cheap. And you have a buy on that as well yes mike from Wells Fargo Securities we have got just under 40 minutes left to trade. We are higher on all the major indices. The s p is standing at 3022. The record alltime closing high, 3029 we were above it briefly during todays session, but below it just as we stand with 49 minutes left to trade. Softbank getting downgraded by one bank, which is calling its bailout of wework, quote, throwing good money after bad. The details of that, coming up and later, we discuss how you should adjust your stock strategy if Elizabeth Warren becomes the president. A few specific ideas from a new report after the bell. 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. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to closing bell. Guggenheim initiating uber at a buy with a 40 price target. The firm says it sees uber benefiting from deescalating competition in the u. S. And rising prices driving a strong second half of 2019 for the company. Wall street keeping its bullish outlook on zpon, despite a weak forecast. Heres a partial list of all the sellside analysts cutting their price targets, but keeping a biooutperform on the stock barclays, mizzou, you get the picture. Sun trust, the only firm to raise its price target from 2,200 to 2350, particularly given the stocks intraday recovery makes it even more funny that all those other companies jumped in on the bandwagon and cut their targets. And jeffries downgrades softbank to hold and lowering its price target to 20. 90 from 26 the firm says troubles with its wework investments sets up an desirable pregnant for the company, unless its strategy is clarified, theres no anchor to valuation. Fascinating on this in terms of softbank itself. Talk that theyre going to downgrade their value from 100 billion to 5 billion or 6 billion. Its a slippery slope to where you end up and one feels like its way more than 5 billion they need to write it down. Its a remarkable story its almost the antispeculation story. If this was 20 years ago, fall of 999, people would have com, bought it, there would have been confetti on the floor of the exchange its tough for us to get too bearish when theres no that euphoria up there. You bring up uber. Right now. There are 26 analyst buys on uber jpmorgan only has 12 buys on it. Whats a better stock here one is making a 52week high, one is not mike is right on with these banks. All of these banks are Getting Better and the analysts dont like them. And the journal is out with an amazing playby play of weworks unraveling heres one quote mr. Neumann was surfing in the maldives when executives in new york called to go over his ipo document that, of course, to reporting by the wall street journal. Another extraordinary highlight of this story, if true, im raising the question of these Corporate Governance missteps. Before all of this will unraveled, there was a lot of talk about what an amazing what an amazing spokesperson adam neumann was, that he could go out there and he could present and sell it. And this was the price that came along with that kind of salesmanship and creativity and vision, then so be it. And stits only been since it unraveled that its been called into question as being a problem rather than a solution i think Corporate Governance aspects like that recalls a problem. But to your point, i totally agree, to some extent, the most recent settlement that adam neumann somehow got of 155 million consulting fee, fair play if he managed to get that out of softbank. But you look at softbank, which is a listed company in japan its a Credible Company that should have Corporate Governance standards, what are they doing by going along with it if this was a listed company, wework, theres no way they could get away with some of these reported practices because it was a private company, it kind of did. But someones got to feel the pain from this softbank deserves to be in the eye of the storm its another example of where the board was complicit in all of this. Much like we saw in theranos i would note that the wework bonds sniffed this out weeks ago, when they were trading at 13 . So, watch the bonds in some of these things they can be an early tell if the equity is in trouble the wall street journal article well worth the read, posted today 32 minutes left to trade and we are higher by 166 points on the dow. The s p is still two points or so, two and a half points from a record alltime closing high been steady there for the last hour it crossed above that record level, but early this morning, hasnt been back up there for a while. Still to come, weve got your lastchance trade as stocks try to close at new highs. And boeing shares continue to slide up next, what is behind the latest 737 max fallout as we head to break, heres a check on bonds and where the yields are across the board. And were looking higher from the twoyear to the 30year. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Im happy to give you the tour, i lohey jay. It. Jay . Charlotte oh hi. He helped me set up my watch lists. Oh, hes terrific. 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So why not use that appreciation for anything you need maybe its some home repairs, or updates to make it more comfortable so you can stay in the place you love. Its a viable effective way to support your other investments long into the future, and another way aag is working to make your retireme. Better. Dont wait. Get your info kit now welcome back 28 minutes left of trade were higher for all the major indices. Here are the key things driving the action the Trump Administration says it is close to finalizing its phase i trade deal with china. Intel jumping 7 on strong results, helping to lift semis to a new record high and the federal deficit balloons, increasing 26 to just under 1 trillion year over fiscal year. Time now for a cnbc news update with sue herrera. Hi, sue. Hello, contessa hello, everybody heres whats happening at this hour the Trump Organization is exploring a sale of the rights to the companys washington hotel. A move it says is motivated partly by criticism that the trumps are flouting ethics laws. They have hired the Real Estate Firm jll to market the hotel the company is hoping to fetch more than 500 million for the leasing rights governments across the world have pledged nearly 10 billion to help poor nations tackle Climate Change this at a conference the United States did not take part in. 27 countries have announced a contribution 75 of this, 27 pledges an increase and out of and 27 actually are doubling of the contribution and more details now on that deficit story that wilf showed you. The treasury says the federal deficit for fiscal 2019 was 984 billion, a 26 increase from 2018, but still short of the 1 trillion mark. The government said Corporate Tax revenues totaled 230 billion, up 12 , while individual tax revenues rose 2 to 1. 7 trillion you are up to date thats the news update wilf, uill send it back downton to you i love that vooideo soft mon. Its kind of captivating i want to visit that plant. I dont know where it is sue, thank you lets get over to mike for the second installment of his dashboard. The market, at least the s p 500 continues to stand on tiptoes to try to get above that previous alltime high from july look at a twoyear chart of the s p 500, just to give you a sense of the kind of broadly sideways, but with an upward tilt here is the january of 2018 alltime high, roughly right about there. You had a couple of alltime highs sneak in above this. This is about the fifth one. And each one of those at some point kind of dipped back below, right . We definitely did not stay there, although this was very brief. It seems as though right now, we still do have this upper trilt, especially when you look at that trend right there. And one of the things that might be encouraging this time around the breadth of the market this is the running daily tally, how many stocks are up, how many are down the net number goes in here, and this is up until about yesterday, it has reached an alltime high. So that basically tells you, as opposed to some other times like last september of 2018, when you essentially had the s p at an alltime high, the breadth was kind of eroding under the surface. Thats not really the case right now. So on an allin basis, i think thats probably to the positive. A plus. Ten out of ten i think he nailed it i think the big key is here, when you look at the prior highs over the last 18 months. Breath was eroding and deteriorating under the surface. Its a different story here. You have more stocks in an uptrend at any point over the last three years under the surface participation, it is broadening up. Youre up 52week high japan, 52week high. Things are Getting Better. Ten out of ten. 100 maybe nine thank you very much you always want to leave room for exactly a new report on the lion air 737 max crash is weighing on shares of boeing today phil lebeau has those details for us phil, what are you learning . Tuesday, the oneyear anniversary from a lionair 737 max crashing in the java sea and today the transportation department, if you will be were if indonesia released a report on that accident they say nine factors led to the crash. Were not going to go through all of them. Mcas was clearly a factor, as was the miscalibration and filts and how they responded to the events in those chaotic few minutes before the plane crashed into the scene in terms of what this means for boeing theyve already announced a number of changes, both within the board of directors, the safety committee, the head of Boeing Commercial Airplanes has been replaced. So all of those factors have been those situations have been playing out but dennis muilenburg, he will be on capitol hill tuesday and wednesday, testifying with regards to the 737 max not only the accident, but how the company has gone about developing this aircraft their interaction with the faa, a whole slew of questions will come up, and you can bet, its going to be a rough couple of days for him on capitol hill shares of boeing, as you mentioned, are under pressure after getting a bit of a bounce back yesterday and guys, really, its going to be interesting to see what happens next week. And again, he testifies on tuesday, wilf. That is the oneyear anniversary of the lionair 737 max crash phil, i agree, that indonesian report not as damning of boeing as it could have been. So many other factors at play, although the mcas system was certainly one of them. I want to switch focus and talk about tesla. Shares on a tear today, jumping some 10 or so, after that unexpected profit in q3. Earlier today, chairwoman robin denhome was on squawk box and was touting the companys growth the company is very focused on growth and Cost Reduction at the same time and its very unusual to find a company thats focused on both at the same time and tesla is focused on that and so, in terms of the chairing of the Audit Committee, i have been the chair of the Audit Committee since i joined the board in 14 and i am very happy with the way that the company handles all of its fiduciary responsibilities and canning. What was your take on the interview this morning and what it implies about how the company is managed and whether they have put behind them some of those Corporate Governance questions that were hanging over the company a few years ago . You know, wilf, i watched that interview and what struck me is robin denhome, when she was asked pointblank. That was in response to Andrew Ross Sorkin saying, how can you swing to a profit when in fact your revenue has dropped is this not accounting shenanigans, but basically accounting that helped you guys swing to after profit . She never really answered the question yeah, they did much better on the cost side of the equation last quarter and that was a huge factor with them swinging to a profit. But in terms of when she was asked, for example, by becky quick, what do you think about him not texting as much, she basically said, well, elon musk, we think hes an excellent individual, hes got a unique style, very dynamic, et cetera, but it is what i expected from robin denhome. Im not saying that she cant answer those questions, but i have yesterday to see an interview where she comes out and says something that you go, wow, ive never heard that before this is still elons company to run. Phil, thanks so much, as always you bet all right. Here we have about 20 minutes before the bell and heres where we stand weve got the dow up 172 points right now or a little more than half a percent the s p is up almost half a percent. And very close to its alltime high the nasdaq, up half a percent, as well. Up next, weve got your lastchance trade, which focuses on one of todays biggest gainers on wall street er] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. And now for their service to the community, we present limu emu doug with this key to the city. [ applause ] its an honor to tell you that Liberty Mutual customizes your Car Insurance so you only pay for what you need. And now we need to get back to work. [ applause and band playing ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back we have 17 minutes left of trade. We are trading higher by 168 points on the dow. Last chance trade. I like banks more three reasons. I think rates have bottomed. The curve is steepening. Sentiment is still pretty washed out. A big reduction in shares outstanding. And thirdly, leadership. These things are starting to outperform bond proxies. Look at banks versus reits, theres a turn, its both domestic and its global the european banks have been the worst of the worst theyre improving. The japanese banks have been weak theyre starting to get a little better as rates have bottomed there. I think this is a hard group to fight here if you dive into the big six bank stocks, which of those charts stand out the most Important Bank stock in the world is breaking out of a threeyear range, jpmorgan also, the laggard of the whole group, wells fargo is also turning. So whether its the best one or perceived worst one, theyre both Getting Better. We could make the same argument about europe the strong and the weak ones, both turning i would also just note, when you talk about the banks as a group, theyve traded like an asset class here so when one works, they tend to all work one bank i just mentioned as well, contessa, has had a great day, barclays. Good reports they had this morning. Also had a great performance of late because of improving brexit sentiments strong run for some of the uk banks as well. Coming up next, were going inside the market zone to bring you uninterrupted coverage of the final minutes of trade as the s p 500 tries to close at that record alltime high. 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Dont get mad, get e trade and start trading today. Just under 12 minutes left of the trading day we are now in the closing bell market zone. Commercialfree coverage of all the action going into the close. Were also on record high watch for equities well be doing something a little different today and make sure that the s p 500 is always on the righthand side of your screen so you dont miss a move. The key numbers to look out for, 3,025. 9 would be a record alltime closing high, as you can see. 3,022. Just a couple of points off that moment all it takes is a big bet and somebodys going to drive it over the edge. Mike santoli is here to break down crucial moments for us of the trading day and we have chris verone from Strategas Research partners here as well lets start with the big stock story of the day amazon and jon fortt is here to break that down for us we have this stock down 9 last night after earnings its now climbed back to be only 1. 5 from flat thats right, contessa. Yeah, theres some tough news in here if you were expecting profits and Profit Growth from Amazon Amazon switched back to its old self its time for some investments when amazon invests, they tend to go all in the company talked about adding 118,000 fulltime and parttime employees during the most recent quarter, going up to 750,000 total. Thats like a 19 add in one quarter. And then you look at the investment in oneday shipping for the Holiday Quarter at about 1. 5 billion, just incremental, those are staggering numbers at the same time, though, you take a look at cloud, which is an area that you look to for growth with amazon, and yes, while the number might have fallen short of where some people expected the backlog, the commitments that customers have made to go into aws, those are really high. Up 54 year over year to 27 billion, as high as theyve been so people are continue to do business with amazon, even though this quarter might not have the numbers that some investors were looking for then you see it climbing up during the day yeah, jon, the question i was going to ask has maybe been answered by that stunning intraday climb well, you know, wiffle, amazon tends to have big moves every once in a while on earnings and then, you know, the investors reassess i dont know if its the al gos that are moving it first or if people are covering short positions. People remember, hey, this is amazon heres what they do. They find an area, they have tons of data, they test it out and then they decide to invest in it big. Low skbrisics gistics is one of right now. Amazon tends to have a game plan and they dont manage, necessarily, quarter to quarter. You can get caught unawares if youre not careful, just trying to trade the day jon, while we have you, i want to ask about intel, as well i think we framed it last night as a surprise and a pop for intel earnings what can you tell us about them . I talked about to bob swann after i talked about to you, and he was surprised in the quarter too that demand came on really strong he said about 200 million worth of sales probably got pulled in from q4, but q4 still looks better than a lot of analysts had expected heres what bob swann said about the quarter. Everything was stronger than we expected this quarter so, if you think about where we were simply 90 days ago, we had a few that the quarter would be roughly 18 billion. But we closed, as you indicated, 19. 2 billion. 1. 2 billion higher than we expected and we saw strength across the board. It was the best quarter in the companys 51year history. The datacentric collection of businesses, which you know is a very important part of our growth story that beat, that huge beat that the street got so excited about, contessa, about the size of the incremental increase in spending that amazon is going to do on oneday shipping in q4 jon, thanks so much for that. Mike, quick question on intel. Was this very positive for the broader corporate sector well, the semis bounced a little bit and i think that essentially it gave a little bit of reassurance after we did have the miss on texas instruments. I think in general, it was positive although with intel itself, it brings it right up to an area where its kind of stalled out a couple of times. So see if it can get through shares of vfcorp. Are sinking on an earnings miss. Hey, there, contessa. Vfcorp. s earnings and revenue did come in short of expectations as the parent company. It also left its fullyear forecast unchanged and that disappointed investors shares are down 7. 5 sales from vans, the popular streetwear shoe and apparel brand looks to be slowing. Those sales were up 14 . Sounds good, but not so good when you compare it to growth of 26 last year. Sales of dickeys and timberland brand, that whole segment fell about 4 the company then cut its fullyear profit forecast for that work segment. Currently, vfcorp. Says about 7 of its u. S. Sold merchandise is made in china and the company does plan for that level to fall, around 4 next year, lowering that exposure as we continue to talk about the impact of the trade war. Contessa all right, courtney, thank you very much for that beer giant ab inbev stock is taking a big hit today frank collin has that story. Ab inbev shares on pace for their worst day of the year, falling more than 10 . The beer maker giving a weak forecast, pressuring its margins. Lower volumes in key markets due to price increases and, quote, softer consumer demand in light of difficult Macro Economic conditions the global brewer of corona is also exploring brewing that beer outside of mexico. Hard to believe. And it also plans to launch a bud lithe hard seltser in 2020 grows of hard settler have grown 200 this year according to citi there was so much in this miss from commodity costs rising, some issues in brazil and china. We saw market share loss for those traditional brands, bud, bud lithe accelerate again, when some had thought that it had started to at least slow down or plateau, in terms of that longer term shift to some of those newer, crafttype beers. It seems like the Beer Industry in general, the pressure from craft bureaus have diminished a pit but a major bureau like ab inbev, theyre trying to push that premium product to consumers, so they can make more money per hectoliter are you suggesting that english people are clalcoholicso that its a measure . Or that you know your beer. I think all, sadly. Perfect person to talk to that about. More importantly, with five lins left to trade, where the spap 500 is we are not at the moment going to close at a record alltime high the record alltime high, 30. If we do hit a record alltime closing high, does that give the market impetus to go higher . Lets just put this in context. Seasonality is an asset right here leadership is finally becoming more of an asset as well it just strikes me, for how much attention the transports and small caps got when they werent working, it doesnt seem like were giving them proper due now that theyre starting to work. These were missing groups all year and theyre now back in the fold i think thats bullish we have a fed meeting coming up next week are we setting up for a pullback here i think whats remarkable is you have about 95 odds of a cut in october, yet bond yields have stopped going down watch the twoyear yields here the twoyear yield has started to turn. I think thats very important for the growth having slipped two points in the last fife minutes, weve added a point higher we were just talking about the trend in market breadth. It looks like its just a marginal beat for the bulls. Still obviously, another day where the cumulative breadth will hit an lltime high tenyear note yield has maintained its recent lift a month to date is at 1. 8. 1. 9 is the postaugust high. Thats also supportive at this idea that things might be Getting Better and a little bit better in the way of risk appetites. And the volatility index, the vix, were clicking down below 13 for the first time in a while. It shows you the market is on more steady footing. If it gets too low, that can be a sign that were not expecting any shocks and were complacent. But not there yet. The sector today is pretty encouraging. Tech materials, energy at the top. At the bottom, more defensive sectors like utilities and real estate 3025 3025. 9 would be a record alltime closing high. Lets switch to the nasdaq where we are seeing a record close and record intraday high, for the nasdaq 100 and its really been fueled by earnings great numpbers our intel and then, theres apple that is setting up for apples earnings next week. And its responsible for about 25 of the gains in the nasdaq 100 this week. Vertex today, also one of those stocks at an alltime high the company having unveiled a new results on a Cystic Fibrosis drug, just off of the highs now. And we had an ipo today, progeny, thats a birth benefits Birth Control benefi benefits fertility, rather, ipoing today, well below the range on the close here. Bob, over to you bertha, two lousy points. Thats all we need to get a new historic high. Maybe we can get it. Who knows it were up about 1. 2 this week. Third straight week of gains for the s p 500, fourth for the nasdaq but the volume has been terrible all week wall street is complaining, equities, options, etfs, it doesnt matter these big etfs like the spyder, biggest in the world, half the normal volume that we would see. You have 65 million shares, 36 million shares russell 2000, same thing these are the big etfs used by tactical traders to go in and out of the market. About half of the normal volume we would see s p 500. Next week, i want to hear from mastercard were obsessed with the American Consumer visa has strong things to say, good things to say capital one did as well. Well see what mastercard says on tuesday when they report. Theres the closing bell 3023 looks like were going to be shy of an historic high for the s p 500. Good afternoon welcome to the closing bell. Im wilfred frost. And im Contessa Brewer in for sara eisen just three points off maybe a record on the s p and here at the dow jones on the floor of the stock exchange, some real characters as six flags rings the closing bell with fright fest along with us today is mike santoli, cnbc senior markets commentator. We are in the market zone. You can see the days Market Action on the righthand side of your screen, with the stories that are still coming up on the tabs at the bottom of your screen lets check in on how we closed as bob and contessa said, not quite that record alltime high for the s p 500 just three points away decent gains rounding off a decent week of gains up 1. 2 for the week as a whole. Nasdaq led the charge and today tech has been a strong performer. The dow lagging for the week up only 0. 7 a couple of big names like boeing weighing on that performance. But a constructive day and a constructive week for markets as a whole. Joining us to talk about the market day, chris verone so mike, first of all, so close to breaking a record high on the s p 500. Whats fueling the push higher its interesting. Its not really news driven. Its almost the gradual lifting of bad news or threats thats happened in the last several weeks. I obviously think that earnings being better than these very beatendown forecast and the overall market not suffering, thats been part of the story. Incremental progress reported on trade. I think it reinforces the idea that were kind of rebuilding risk appetites after that recession scare in august. Geopolitical risks weve been talking about for months now, whether the trade deal gets done with china, whether brexit is accomplished, have not been entirely removed, but theyve eased somewhat, too. Will we see those reappear in the months to come i dont think the market shares i think capital moves on and capital has moved on in this instance you see it in the leadership the stocks at the center of this china storm, whether its apple or samsung or taiwan semi, are all the leaders. Clearly the market is focused on something that we may not be john stavridis, whats your take i think with earnings were getting what we expected, but its not as bad as feared. On all the cyclical industrials that have exposure to a slowing global economy, and that were basically heading into or near an industrial recession, well, those stocks are getting hit hard look at the likes of caterpillar and the earnings on 3m and others but then you look at, you know, its not spilling into all the other sectors. The banks have done really well. By and large, the chips have done well. So we knew that there was a slowing economy. We knew that was going to bank account industrials. The fear was, will it spill into other sectors . By and large, youre not seeing that yet whats your take on next weeks fed meeting its all going to be lets see what the job numbers are going to be next friday. I think all eyes, again, should always be on the wage data the last month, it dipped below 3 , which takes a lot of pressure off the fed to not raise rates. Give the fed ammunition to raise rates and continue to be putting the gas on quantitative easing, because inflation really isnt transparent, its not happening throughout the economy so it gives the fed a lot of breathing room to force more stimulus into the market john, your credit team is noting that highyield bonds have rallied for 11 Straight Days the longest winning streak since april. What do you make of the move on these bond yields . Yeah, so, the good and the bad. The good is that, you know, the credit markets remain open and companies have access to capital and thats a tremendous sign, because if we were heading into recession or in recession, credit markets tighten, Companies Get shut off to credit, the Capital Markets and bad things happen. But on the bad side, that investors have to be careful of, theyre stretching for yield theyre going down the credit quality. So, you know, if high yield is rallying, that means the lower quality portion of companies that are in a recession could be in trouble and investors are picking up those yields, and theyre taking on more risk to pick up yield, and thats where you have to be careful in a downturn mike, i want to pivot and go back to amazon a stunning intraday recovery were talking 9 not the couple of percent we saw in the middle of the week. This is huge often you do get a shake out on earnings from amazon and gradually it rebuilds. The peak in the stock is 250. So in other words, the stock didnt come into this report built up on a lot of aggressive expectations with people essentially betting that it was a momentum play. So i do think you had a time and space to sort through the fact that this was not necessarily a completely out of line report. Then you have to filter in the idea, its a relatively firm tape i think that amazon is known for lowballing the Fourth Quarter revenue estimates. All of that stuff fits together. And it shows you that the market itself is kind of imperturbable. In the long run, they pay off and amazon has the track record to show that the interesting thing is that amazon has had to send that message and get it across for 22 years. And they repeatedly have to do that, because after a while, it looks like theyre in harvesting mode they have a little bit of a panic when its an investment phase and have to kind of come back and warm up to the story again. Going back to the broader markets, youve been constructive in your tone over the course of the last hour. How constructive are you what level of upside do you see . I think this is a secular bull market. I dont know why over the next 12 months, you cant see a market trade to 22. 50 or 3300 you had a miss in helicopter you had a miss in amazon it acts straight last week, you had a miss in Goldman Sachs, they had that thing down 7 and couldnt keep it there theyve had these names on the ropes and cant deliver that final punch. John petrides, youve been looking at some of the kretd market moves is that making you constructive or concerned definitely constructive if you look at the spread between the twoyear and the tenyear, weve been positively sloped, although no longer inverted not flat, positively sloped. Since then, the stock market has rallied and that happened really in midseptember, early september. So an inverted yield curve usually portends to a recession. So we continue to keep an eye on whats happening between the two and the tenyear and that relates to the positive movement for the stock market. And youre paying a lot of attention about where the markets are in advance of the fed meeting coming up and what that might portend i think theres a little bit of interesting sink rownicity here the last five fed meetings, the market came in at or near a record high. Around time of the fed meeting, you did have the market at least pull back a little bit, roll over, a couple percent, 6 , the two steepest pullbacks were in may and july, which were also Earnings Seasons and do you think the fact that were at or near record highs sets you up for that pull back i think it has in the past. Heres what i think might be different this time, which is, the market is not rallying, and you look at whats working in the market, not rallying on the basis of an easy fed the market isnt lobbying for an easier fed right now and the market has seemingly bought into this idea that this was a midcycle adjustment not really on a fullblown easing cycle back to zero to fight a recession. A few months ago, that idea was not sitting well with investors, because they wanted the fed to be more aggressive i think maybe it would be okay if we get another cut and wait and see. John petrides, thank you so much for joining us. Chris verone, thank you for joining us as well lots more still to come here on closing bell. Well be weighing up warrens wall street impact well discuss what a potential Elizabeth Warren presidency could mean for the mkearts in the broader economy. Were back in 90 seconds dont go anywhere. 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. I sure as heck would be willing to pay more tax if i could buy a happier and less polarized society, for sure. Would that help it would help it would help the mood of the country and i think it would get some focus on real initiatives that we should be doing and grappling with real problems and real opportunities instead of everybody hacking at each other all the time that was former gulf coaoldms chairman and Ceo Lloyd Blankfein speaking here in new york, making comments on president ial candidate warren, capitalism, and what he would pay for higher taxes. For more on what warrens presidency potentially could mean for investors, lets bring in sarah bianci, head of political strategy at evercorps isi. Thanks so much for joining us. Good afternoon hello thanks for having me so what do you make of those comments, that tone there from lloyd blankfein. Of course, highprofile, successful, and wealthy wall street executive, whos at least partially would be welcoming of higher taxes well, i do think that there are many on wall street and in the Business Community who are concerned about some of the inequality that were seeing in this country you saw the Business Roundtable recently make a statement that corporations need to be thinking broader than just their shareholders and thinking more about communities. So i think there is some certainly some sentiment on parts of wall street and among Business Leaders that theres something going on out there, that their consumers are feeling, their workers demanding, and so some of that, it doesnt surprise me on the other hand, of course, we are hearing a lot of concern from wall street, in particular, around warrens positions on financial wasservices, on big t, and some of the other areas that she has outlined plans for but look, there were two big things that the Trump Administration did for business that theyve been pushing for and agitating for for a long time one is rolling back legislation. Two is this Corporate Tax cut. And its very hard to raise taxes in this country. To get the two houses of congress to agree on raising taxes. Is a Corporate Tax rate safe, even if Elizabeth Warren is elected as the president i think raising the corporate rate is very, very difficult for the reasons that you state our view is that under the most likely scenario that warren would take office with a split congress and including a republican senate, and senator mcconnell is basically telling folks in fundraisers that keeping the senate in republican hands is the key to a lower corporate rate so our view is that a higher corporate rate is going to be very, very challenging perhaps a point or two, but not much beyond. What we do and then go ahead. And then on regulation, if this is something that the eskt branch can control and weve seen that happen under president obama and now President Trump, as well, what regulations could she change that would truly affect businesses nationwide i think that is where youll see real dramatic change some of it is more industry specific big tech is something that warren has her sights on financial industry shes very concerned about the raise of nonbank financials and in particular, youll also see across the board more kind of corporate accountability. Her view is that the s. E. C. And the doj have not been aggressive enough in particularly going after ceos and holding them accountable. She believes that business will only really change when they see executives do some jail time i think there will be a posture that will affect the market across the board thats her view, i do believe thats really where well see her be aggressive. To that point, sarah, on executive authority, if the Senate Remains in republican hands, which sector stands out as one where regulation can change direction and shape pretty quickly, based purely on executive order and executive direction . Certainly, the Consumer Financial protection bureau, which warren was really her idea can do a lot, whether its on Student Lending or Financial Services dodd frank has a lot of authority that you can put into place fairly quickly she has talked some about fracking and i think probably would have to moderate some. She says she wants to ban all fracking, but you certainly can do a lot very quickly with epa and others to deal with federal lands. And certainly, her antitrust, although that would take a little bit longer, shes signaled exactly where she wants to go in antitrust, starting with big tech, but really going beyond to many industries. Weve got oil up right now. We had a guest earlier this week that suggested that oil could be hit hard by new regulations under an Elizabeth Warren presidency, but strategas is out with report this week, suggesting that she might actually be great for chevron and exxon, because gas prices would go up. Well, i think that remains to be seen. Our view on Climate Change is that this is not an area where warren is sort of a longstanding expert, as she is in other areas like financials and like other regulations so we believe that this is somewhere where shes going to have to motderate shes taken governor ensleys platform, which has some very aggressive targets, and we think she will hear from organized labor on that as well and probably have to moderate some there. But for sure, the energy sector, will be very impacted by really any democratic administration, but in particular, senator warren sarah bianci. Thank you so much for joining us today. Appreciate that. We have a news alert on the uaw. What are you learning . We have laerpd from sources that the united auto workers, the 46,000, approximately 46,000 members who were voted on the tentative agreement with gm, they have ratified that agreement. That becomes a fouryear contract, so for general motors, after 39 days, where the plants have been shut down, all of them here in the u. S. And many in canada and in mexico, theyre going to fire back up this weekend. The uaw rank and file have approved a fourcareer contract with general motors. Thats one piece of breaking news, guys i want to transition you over to boeing, because boeing has Just Announced that it is adding a new member of board of directors. He is retired general john m. Retired admiral, excuse me, john m. Richardson, the former chief of naval operations. He served in the navy for 37 years. He is joining the boeing board of directors and more importantly, he is also going to be on the safety committee, which has been formed by those directors as a response to whats been happening with the 737 max. A move made by boeing ahead of dennis muilenburg, going before senators and representatives next tuesday and wednesday in washington guys, back to you. All right, phil, thank you for that still ahead, cracks in the credit market . Mike santoli heads to the telestrator with more. Plus, were counting down to the fed, a twoday meeting followed by a big Rate Decision set for next week. What tt ulmeorhacod an f you and your money later on closing bell. Driverless cars, or trips to mars. No commission. Delivery drones, or the latest phones. No commission. No matter what you trade, at fidelity youll pay no commission for online u. S. Equity trades. At fidelity youll pay no commission but she wanted someone who loves with the cats. Ng. So, we got griswalda. Dinners almost ready. But one thing we could both agree on was getting geico to help with our renters insurance. Yeah, switching and saving was really easy drink it all up. Good could have used a little salt. Visit geico. Com and see how easy saving on renters insurance can be. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. On this october 25th or st. Crispins day, lets send it to mike santoli for his third dashboard of the day these are all from the henry the 5th speech on st. Crispin day. I didnt figure out that all of them were, which was bad of me that was me trying to cut and paste a little bit but a gentle condition is what pervades in the credit markets thats usually a pretty supportive state of affairs. Theres two different segments of the credit markets. The hyg is the high yield. Its been holding at a record high thats not the most sophisticated way of saying hoye credit markets are behaving, but its certainly confirming the fact that equities are strong. Senior loan etf. This is bank loans, corporate loans, usually skewed towards leverage loans so with riskier borrowers. Some people have been concerned about this little downtrend here, especially this jag lower right here theres been a lot of supply weve had some reports that some riskier loans have been held on some of the banks books they havent been able to syndicate them out and sell them maybe theres a little bit of stress in this one little area, although i wouldnt say you would have to get too nervous about it, especially in a market where this week, netflix raised 2 billion in junk debt at under 5 in this country so clearly, theres appetite out there for more speculative paper. And the point, mike, we were discussing earlier in the week, where there have been pockets of rates spiking up, its very small in dollar terms compared to the rest of the month its pretty targeted. The market seems to be trying to sift towards that truly vulnerable borrowers and those that are okay. Coming up next, the fed in focus. A decision on Interest Rates due out next week. Well tell you all the things to be watching out for. First, wildfires threatening parts of california and jane wells is in Santa Clarita, california, with the very latest hi, jane reporter hi. Yeah, this is one of the six known homes destroyed. It could be higher the winds are kicking up again weve got a ring camera on the ground fires are unpredictable. Look, the plants are fine, the grass is fine. But here in the tech capital of the world, are wecoming up wit technolo tgyo make them more predictable. That when closing bell comes back obvious. Sometimes, they just drop in. 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. They give us excellent customer otservice, every time. E. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. [phone ringing] how are we doing . Fabulous. I wonder how the firms doing without its fearless leader. You sure you want to leave that all behind . Yeah. Stay restless, with the icon that does the same. The new rx crafted by lexus. Lease the 2020 rx 350 all wheel drive for 439 month for 36 months. Experience amazing at your lexus dealer. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back time for a cnbc news update with sue herrera. Hi, sue. Hello, wilf hi, everyone heres whats happening at this hour a u. S. Judge ruling the Justice Department must release the material redacted from former special counsel Robert Muellers report he gave the Justice Department a deadline of october 30th to hand over the materials to the house judiciary committee. Fiat chrysler says it is recalling 108,000 ram 1500 dieselpowered pickup trucks in the u. S. This for coolant leaks tied to reports of some fires and four minor injuries the recall covers trucks from the model years 2014 to 2019 the funeral for maryland representative Elijah Cummings was held in baltimore today. His remains turning to the church where he worshiped for nearly 40 years, draped by an american flag. Former president barack obama, one of the many dignitaries paying homage to him theres nothing weak about kindness and compassion. Theres nothing weak about looking out for others theres nothing theres nothing weak about being honorable. You are up to date. Thats the news update ill send it back downtown to you, contessa. Sue, thank you for that wildfires and blackouts are spreading across california and jane wells is in Santa Clarita jane, what are you seeing out there. Contessa, i actually grew up not far from here. This is some of the damage from one of the two large fires in california right now very little containment on both. I want to show you something down here. The governor has clairdeclared a state of emergency in l. A. And sonoma counties and has set aside 75 million to mitigate the cost of these power shutoffs were going through. I dont know if you can see those pink roofs in the distance thats where the phoschek, the fire retardant has been dropped to try to protect those homes. Again, as i said, hundreds of thousands of people are without power. That is expected to go up over the weekend. But here we are in the center of the tech capital of the world. What technology are we using to better predict how these fires go well, theres one new Pilot Project out of uc san diego this year ive got some video of it. Its called why fire theyre spending about 200,000 on it and theyre using a network with cameras and all kinds of predictive algorithms and darryl osby told me, its working. Listen when theres a fire start, they can look at the topography, the wind, the fuel moisture, the humidity, and send us projections in relation to fire growth thats really been very useful for this type of incident. But the big thing is when and where to turn off the power. The Power Companies are saying they have prevented fires, they believe, at the same time, the kincaid fire up north may have been started by a pg e transmission line. The governor is furious particularly with pg e it could be costing the state billions of dollars to have the power shut off the power shut off in this neighborhood, even though all the utility lines are underground. Thats because theyre connected to aboveground lines somewhere else its a delicate balance and people in california in the shortterm will have to learn to live with it and when the power is intentionally shut off, you have businesses or homes going out, buying generators, which also potentially could be a fire risk, as well. They run on fuel and things like that let me ask you, when youre looking at this new technology that can be predictive of fires, one of the best things that homeowners can do is create Defensible Space youve got two homes behind you that are destroyed and a whole neighborhood thats not. Are you seeing California Homeowners taking this Defensible Space seriously oh, yeah. I mean, i live right up against open space we have a hundredyard fire break. But you know, you think, maybe we need to change the landscaping. Look at the landscaping, contessa the landscaping is fine. The grass didnt burn. The way these fires move, they move overhead, so Defensible Space around doesnt always work they have a new roof thats not shake up there. So some of these things, you really cant get a handle on as a homeowner. Yeah, the Insurance Companies are getting a handle on all of those claims and payouts, too, and its showing up in their bottom line reports this earnings season. Jane, thank you for that, appreciate it. Jane wells for us there switching gears, the s p 500 just two points shy of an alltime high ahead of a widely anticipated rate cut from the fed. Here to discuss is peter book ma how are you doing . Hey, wilf whats the Market Pricing for next week at the moment . Pretty much a given based on the fed funds future market, about a 90 chance but while we may get that cut, i think the fed is going douch it in, well, were going to be stopping for now because if the fed is on this, im taking an insurancetype mentality to rate cuts, then two to three is usually qualifies based on historical patterns back in the mid90s. Do you think that the fed is going to be open to more cuts after this decision . I dont first of all, i dont think they should be cutting, but lets assume they dont want to fight the market and go with what the market has said i think they dont want this to be seen as the beginning of a ratecutting cycle, which would be responding to dramatic slowdown and growth. They keep having this vision of, were going to create a soft landing. And i think now with the possibility of a light trade deal and a possible resolution to brexit, theres even more reason for them to pause after the cut next week. Mike, we were talking about this yesterday i get the point that the market has very much priced in a rate cut. That said, in terms of the issues that are most important to investors, equity Market Investors at the moment, the last couple of meetings, the fed had a little bit more focus on it, a little bit more import to it yes i agree. I think right now, it the data have come in the direction of what the base line fed expectations were. It doesnt seem a very acute the one thing i would say, if they are attentive to how treasury yields are trading in the yield curve, getting one more cut would likely get the twoyear note yield back down to where you would want it relative to fed funds and all the rest of it maybe it still feels like an adjustment but i think this one is not necessarily a unanimous call and probably will not be peter, can you weigh in on some of the funding issues in the repo market . I think its your classic supply and demand. You have massive trashry supply. You saw the deficit hitting just shy of 1 trillion and the dealer community, the bank dealer community, at least in the Fourth Quarter, doesnt want to take on too much inventory, so we can say that they have already loaded up. The nonbank dealers are rushin to get financing to help cover some of those holes and you have this major imbalance where the fed is now stepping in to be that buyer, to soak up that excess supply, which is essentially monetizing shortterm tbills they want to call it a new modernday openmarket operations but its really slowly creeping into the monetization realm. Well see whether in the im sorry, in the first quarter, whether banks then step up, because theyre lessworried about yearend funding issues, and maybe some of this pressure could ease but its certainly the first time in a long time that massive supply of treasuries is beginning to cause some major reverberations when the demand side is not there to meet it peter, i want to switch focus. I know youre very against negative rates so, all in all, with this final meeting behind him now, how do you summarize the legacy of mario draghi i guess you can say the positive is that he saved the euro in this whatever it takes approach but on the other hand, hes killed the european bond market. Hes damaged dramatically the profitability of the banks hes killed the savers and hes poisoned the overall Financial System in europe so i think his reputation in the years to come will be tarnished when we see the reverse of this, when rates at some point go back to positive and these incredibly microscopic and dangerously low Interest Rates reverse themselves peter, to put a different side to that, i think the whatever it takes created an incredible window for europes governments to act to get their economies back on track that they didnt take that action and after that, mario draghi didnt have too many other options other than to continue to suggest that he would do whatever it takes to support the currency i find it odd that everyone now says, Christine Lagarde will come in and encourage all of these governments to expand fiscal policy. And that would help save the economies. Mario draghi saidthat in every single press Conference Since 2012 that fiscal spending policy would help but he didnt see any support from governments i think its underappreciated that the damage that he did to the european Banking System prevented healthier and quicker growth you need a healthy Banking System to create the foundation for faster growth and mario draghi damaged it. Fiscal stimulus, fiscal spending by the government is only a shortterm fix so i dont think that would have brought european economies to any sustainable rate of growth that a healthier Banking System would have peter boockvar, thank you for joining us thanks, contessa. Up next, weighing trade worries, p. U. M. A. s stock up more than 50 yeartodate, but its facing so bmeig problems amid the trade war we have those details, ahead most people think of verizon as a reliable phone company. woman but to businesses, were a reliable partner. 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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. Puma says china is its most important market and now its caught in the crosshairs of the trade war. Frank holland has more an that for us good afternoon, contessa. Puma, we entered the u. S. Basketball market last year by offering this line of shoes, a prestige brand in footwear hoping to boost its sales, and now its caught in the global trade war, facing 50 tariffs on products it else here in the u. S. That are sourced in china right now, thats 20 of sneakers and other apparel, down from 50 , but we also spoke to p. U. M. A. s global head of branding he says its a balancing act the company gets about a quarter of its revenues from asia, china, a key driver for the 26 growth in the region in order to boost those sales, puma uses a lot of influencers, including jayz, the rap mogul and also local chinese social media stars to drive sales were working to understand the mindset of the consumer there. To understand whats interesting to that consumer and provide relevant story telling around our products that they want to buy into our brand. The effects of the tariffs, were working hard to mitigate those. You cant control that as a brand. Thats geopolitics and puma says its all about millennials in the u. S. And in china. In order to try to reach out to them, they signed a deal with esports brand cloud 9. According to morgan stanley, there are 194 million esports fans around the world and 45 of them are 35 years old or older, a key desk grmographic for thei sportswear brand one of the other things is soccer basketball is a hard segment to get into. Nike and adidas has a stranglehold on it Everybody Knows air jordan and lebron james soccer, not as popular in the yes, but they say theyre going to make a bigger push in running shoes, a category where it can be a lot more competitive and it plans to have sponsored athletes in the Boston Marathon probably in 2021. Yeah, for sure. And theyre famously, of course, usain bolts brand and hes stock loyal to puma throughout his whole career frank, thank you also. Thank you, wilf. Usain bolt, who graced the closing bell set that was a great moment. Still ahead, the big earnings to watch next week. First, we will have a look at the gaming industry and some of the problems that are lying underneath ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. But in my mind im still 25. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. Welcome back lets send it over to mike santoli for the final installment of the dashboard mike wilf, the greater share, which you remember, is a very cheery part of that henry the v speech who says, when most of us die, the greater share of the honor goes to those who are remaining. But take a look at the trailing tenyear returns of the s p 500. So essentially, a this is saying, at every point on this chart, this was the annualized return for the s p 500 for the prior ten years. So as you can see, over time, its topped out right here in the best long bull markets, youve gotten up toward 20 as a trailing annualized tenyear return right here, we got up to 15, which is certainly in the upper part of the range. Now down around 13 it suggests somewhat later in the cycle, you would argue that maybe you cant expect very high returns in years Going Forward for the next decade. However, because what happened ten years ago was 2009, the market went up rapidly beginning there. Therefore, just by math, this is probably going to come down a little bit, because youll be comparing to it a higher starting point in 2010 and so on i think its time to basically say, were not early in the game, but it doesnt seem like its at a climactic moment where verylong bull markets have tended to end in the past. Thank you very much great theme, as well up next, gaming the game the video Game Industry booming, but theres one big issue eanguing developers. Chti the full story when closing bell comes back t you want to follow your passions rather than worry about how to pay for longterm care. Brighthouse smartcare℠ is a hybrid Life Insurance and longterm care product. It protects your family while providing longterm care coverage, should you need it. So you can explore all the Amazing Things ahead. Talk to your advisor about brighthouse smartcare. Brighthouse financial. Build for whats ahead℠ about being a scientist at 3m. I wanted them to know that innovation is not just about that one aha moment. Science is a process. It takes time, dedication. Its a journey. Were constantly asking ourselves, how can we do things better and better . what we make has to work. We strive to protect you. At 3m, were in pursuit of solutions that make peoples lives better. Takin it off road station ted goiwagon, eh . Ip, huh . You know its an suv your family is duckin and rollin. While we stowin and goin but thats cool, i know for a fact your suv does not suck. And why is that . It aint got that vacuum in the back, whoo sucking stuff up what else are we gonna find . We got to go. Vacuum in the back, hallelujah get 0 financing for 60 months plus 2,250 total bonus cash on the 2019 chrysler pacifica. The video Game Industry is on a tear with global revenue projected to hit 174 billion, but theres an issue a lot of Developers Just dont really want to talk about cheating josh lipton took a deeper dive eliminate the terrorist reporter take a close look this is the exact same video game, but in the version on the right, the player has special software or cheats that makes it easier to win. This is a bot behind this wall right here, well see him in a second. In this modified game, you can see the enemy through walls, a distinct advantage bill copa is an 18yearold recent high school graduate. But dont let his age fool you hes an expert in hacking video games to create cheats, something he knows could ruin the game i dont think im either a good guy or necessarily a bad guy. But i think that a lot of what i do can be interpreted as being the bad guy. To find cheats, hackers find vulnerabilities in the games code its an advantage people are willing to pay for for the month usually 100. Egame insiders and cybersecurity experts tell cnbc that cheats are a huge threat to the grow video Game Industry. Why would you want to play game you cant win its not fun anymore. Alex hammer stone works for trumpeted sec helping game makers keep the game secure. Up here you buy cheats or adden forts game. He showed cnbc where the players can buy and sell cheats. This is like a performance enhancing drugs. From the hal ho tournament on the 99th floor in willis china to a 16yearold winning 3 million at the fortnite cup in new york the video Game Industry is on fire and expected to bring in 174 billion in global revenue. But in order for games to succeed, players Say Developers must stop schoot zbleerts hackners fortnite there were people across the entire mamoa map instance instantly killing me pretty crazy. But gamers say its uncommon to find cheaters at tournaments with money on the line. If someone were hacking a tournament theyd gone disqualified id home so. At most tournaments the organizers control the computers and consoles and keep a trikt watch. But playing at home its an ongoing challenge for game makers. Youre sort of fighting a battle youve already lost because when i have my computer in front of me i have physical access its difficult for them to actually prevent me from cheating. The best they can do is make the bar high enough to where its not worth my time. Making video games was a presentation topic at this years defcon, a Hacking Convention in las vegas with an estimated 30,000 attendees thats where we met bill d the emirkoppa and jack baker because there is so much money on the line now there is more focus on how i can make money off of it. Lets say youre a game Developer Publisher what can do you to perceptive the cheats. Watch for patternings and signatures watch behind the scenes to see if people are using these things but its reliant on users reporting. Microsoft 343 industries is the maker of First Person Shooter game halo. Halo has never had a huge issue with hacking thankfully. For us as developers competitive integrity and the experience of players online is crucial. Epic games, the maker of fortnite declined interview saying in part in a statement we will pursue all available options, including revoking access to fortnite to make sure our games are fun, fair and competitive. Demirkoppa says he hasnt sold cheats since last year today he has no regrets. Im trying to transition more into the Information Security field. Game hacking has been an extremely valuable wlerng opportunity. Now, demirokoppa the maker of the game telling cnbc in part rainbow 6 siege does not tolerate cheats and exploits used in game players found using cheats are penalized and or banned accordingly. We should know the demo was against bots or computers. Back to you. Josh, i have a sort of random question which was most of the package which was awesome focused on shooting games. What about sports Computer Games . Is it harder to have a cheat there because its too obvious in game of soccer or basketball if something kind of freaky happened as opposed to you get shot and didnt go down . I dont know if it depends on the style which will of as much as, listen, the difficulty of creating a can cheat really depends more on the game and how its coded i think there will be some that are more difficult others are actually fairly simple to the create really not so much about the style. The one that is get targeted are the ones that are most popular and that makes sense if you kret a cheat and you want to sell it and make money you target the popular titles. No surprise when the guy is a trusted sec or letting me look at websites where the cheats bought and sold. You would see cheats at fortnite which would pop up. Where the mack hackers make more money right now its legal to bet on e ports but if that happened in the future it would make it more lucrative for the hackers to go in and find a back door in there. Josh thank you, cigarette story. Well done. Up next the key things every investor needs to watch heading into the fshre trading week, when we come back. Servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Some of the highlights monday here from spotify, alphabet and beyond me tuesday, gm mondle ease. Wednesday, apple, facebook, starbucks and lyft out thursday, kraft heinz. Duncan and pinterest on friday alibaba and chevron report. Also next week important week for media. We get the unveiling of hbo max. Launch of apple tv plus. And disney plus the following woke all week long on closing bell were coulding special coverage in a series we have dubbed beyond the bundle. The Company Strategies and personalities remaking the media landscape with guests like facebook cofounder and andrew mccull up who has a streaming disrupting company and famed hollywood producer brian grazer all of which is to come in a crucial week for media mike, back to the broader markets this week. Didnt quite get that record high but close to it. Yeah. And a decent set of Weekly Performance around the world about 1. 5 of gains. Its been low drama the market plodding to a high. We also didnt mention we have a fed meeting on the decision coming wednesday. The closing bell be on the bundle. Its a positive thing which means we are not fixated on the macroand doesnt seem like the biggest make or break moments for the markets. The other things with all the earnings, the reception to earnings has been good, market steady even on misses. Does that flip in the second woke sometimes what happens is people reset expect iks aches saying ahha stocks g to up afterwards opinion up into reports when you have the second phase. Overall i think the market has earned become the benefit of the doubt by being resilient through the phase. Mike, in terms of ear factors of the earnings, apple stands out if it had for a single name apple, going in with the stock at alltime high. Its only been nine or ten months since we thought they were in big trouble in china and stocks up tremendous hi since then. We are out of time. Thanks so much for watching. Wishing everyone a great weekend. That does it for closing bell. And fast money begins right now. Live from from the Nasdaq Market site overlooking new york city time limits square. Im melissa lee. Tim seymour. Mike khouw dan nathan guy adami on the show beyond me down more than 50 no the three months heading up to the lock up expiration next we can we debate the alternative ending will Home Builders rip s p closing fiefd just shy of a record high. The largest gain in sixweeks could next woke, the biggest for earnings season finally push us over the line, guy. It appears that