The final hour and we did get some strong earnings from industrial names like Rockwell Automation and speaking of the president s speech, we will have the first reaction from the white house right here on closing bell. A live interview with top economic adviser larry kudlow in just a few minutes from now. And we will ask him for some clarity on china and the status to have the trade negotiations joining us now for the hour is steve grasso from stuart frankel. Kind of a quiet market day here, but perhaps a little bit of upward bias for a while until just the last several minutes. I think its about everything that you just touched on i think its the majority was President Trump, the expectations coming out of that speak that speech at the Economic Club. Was he going to unveil anything that the market didnt already know so once you get through it and there was nothing new that the market could bite into, the market sells off sort of an anticlimactic feel to the whole day. So we had some anticipation, but really no payoff if youre not going to get any follow up on trade, any meaty substance, maybe he was going to announce something on phase i, you didnt get that thats what the market was looking for. Its still healthy gains in the last couple of days. Well see if we can get some more from mr. Kudlow coming up steves with us for most of the first hour of the show but first, lets get to the big stories were watching today Bertha Coombs is covering a new record for the nasdaq, though weve slipped since that was hit. Julia boorstin is watching two media stocks, disneys streaming launch and earnings from cbs, but bertha, lets kick things off with you its the 13th record from the nasdaq this year tech and semiis modestly higher, theyve sold off higher here but its enough for a new record for tech, with alltime highs for apple, microsoft qand midcap players. Ahead of its earnings this afternoon, sky works is among the chip maks at new 52week highs, but in terms of point of impact, its all about facebook. Social networking giant launching facebook pay across all of its apps, although that news weighing on paypal and perhaps a bit on alphabet, parent of google pay and the biggest gainer today, amarin, up after the fda released briefing notes for an expanded labelingof its heart drug, vecipa that meeting scheduled for thursday and investors found the details fairly encouraging, clearly. Back to you. Thank you very much, bertha sno disneys new streaming Service Officially launching today with a few technical hiccoups Julia Boorstin has the details in los angeles reporter when disney plus launched at 6 00 a. M. Eastern, about 7,000 people reported streaming errors on down detector disney telling us, quote, the consumer demand for disney has exceeded our highest expectations while we are pleased by this incredible response, we are also aware of current user issues and are working to swiftly resolve them that was this morning. No update from disney on those glitches since then. But this is a 7 month service, its launching with a vast library of tv and movies plus a couple new originals, plus the star wars prequel series, that show getting a 90 positive critics rating on Rotten Tomatoes so it will be interesting to see how consumers react. Julia, while we have you, we want to also get your take on cbs. Trading lower on the back of earnings what were the takeaways there on that report . Reporter those shares moving lower today. This all comes ahead of the close of cbs merger with viacom that is expected to happen in a few weeks. And cbs reporting mixed results. The top line revenue fell a hair short of expectations, growing just 1 to 3. 3 billion. But earnings of 95 Cents Per Share Beat Estimates by 3 Cents Per Share. Now, earnings did decline from the year ago quarter on growing investment in content, as well as cbs streaming businesses cbs also showed that those bets are starting to pay off, announcing that directtoconsumer revenue from cbs allaccess and showtime ott, thats the streaming app, are up 39 from the year ago quarter. Back over to you julia, thank you so much for that cbs down some 3 were going to move on the president just wrapping up comments at the Economic Club of new york, saying the u. S. And china are close to a deal. Were the ones that are deciding whether or not we want to make a deal were close. A significant phase i trade deal with china could happen. It could happen soon but we will only accept a deal if its good for the United States and our workers and our great companies. Lets bring in President Trumps economic adviser, larry kudl kudlow, director of the National Economic council of the white house. Very good afternoon to you, larry. Good to see you. Thank you, wilf appreciate it very much. What does close mean . Days, weeks, months . I wouldnt put a timetable on it close means close. And i think in fairness, the two sides are still thinking about what ill call apec time that is the chilean apec conference that got canceled so i think that would have been this coming weekend, but dont hold me to it. It could be a little bit later, it could be a little bit earlier. I dont want to put words in the president s mouth. I think the key point he made was that its got to be a good deal, first of all, for the United States. Hes said that many, many times. He truly believes that china needs a deal more than we do, because our economy is in much better shape than the chinese economy is we are taking in pretty good tariff revenues from china but on the other hand, as you noted, he said, we are close to reaching a phase i deal. Im reading from his speech. It could happen soon but it must be a good deal so i would say, thats a constructive and somewhat optimistic point of view but, again, nothing has been settled or fully agreed upon but if both sides are still working on apec time, as you said, were talking days, not week weeks. Well, thats perhaps right. Again, i cant hang a hat on anything ill just call it apec time. And well all figure out what apec time really means, because were not going to apec, unfortunately, in santiago, chile. Larry, what is a good deal . What are the details youre still trying to work out well, look, i cant go into the negotiating dietails on this but i think its fair to say, as ambassador lighthizer has suggested and secretary mnuchin has suggested, weve made a lot of progress on ip theft. Weve made a lot of progress on Financial Services and 100 ownership of American Companies that might open up investment firms in china thats a big plus. Weve made progress on currency stability. Weve also made a lot of progress on commodities and agriculture. As far as i know, the chinese have publicly accepted 40 to 50 billion purchase of american ag commodities also, on the point to agriculture, its not just the purchase, but they have been willing to open up their markets, nontariff barriers might be brought down. I have to say might be, because again, none of this has been in put in cement and none of its been fully agreed upon and the president is going to make the final deal himself. There may be matters that slip into the socalled phase ii, which would be following phase i. But again, the president in his new york Economic Club talked today, he was very constructive. He was very kmioptimistic but as he always said, there has been no agreements, there has been no final deal, and its got to be a good deal for the United States lets not forget, weve had a very unfair relationship with china down through the years ip theft, forced transfer of technology, cyberspace, tariffs, nontariff barriers and so forth and so on, i could go down a long laundry list of structural and nonstructural issues and its got to be to our satisfaction and i reckon, its got to be to their satisfaction, too. So im going to play this from the optimistic side, because thats what i heard the president say today. Larry, where are you in the debate as to whether tariffs could or should be relaxed at all before the ink is on the paper for phase i. Are you against that no, look, i youre not going to youre not going to have one side or the other agree to any tariff adjustments until the entire deal is put together, okay let me make that as clear as possible and the president has said again, since theres no formal agreement, we cant say whether therell be any tariff adjustments at all it may be part of the package if there is a package, i want to underscore if, because the president hasnt signed off on it yet, but it is possible that a tariff adjustment would be part of this deal. It is possible larry, you really think that we are close here . I just asked this because i feel like weve been here before. We were so close i thought we were only at the point of just trying to get the translation right for the deal i know weve worked on these phases and now were putting it to paper but really, is this really actually happening in a substantial way . You know the markets are waiting for this well, courtney, you and i have been here before, talked about many things, down through the past i try to give you my best guest. I guess my answer is well, was the question the question was, is this for real . Is that what youre asking me . Close we keep hearing this word close, but we heard close months ago back in may, write thought we were only just down to the poichnt of making sure t translation was appropriate for both sides of the deal and then we kind of went back to the drawing board all over again. Can you give us anymore than close . Im not sure i can give you more than close. I can say i can say what the president told the new York Economics Club he said, quote, we are close to reaching a phase i deal. And then he ad libbed and added to that, it could happen soon, but then his ad lib was, again, it must be a good deal for america. And again, i just want to make this generic point you know, you and i and wilfred and others have talked about this the president has to defend the American Economy he has to defend the american workforce, whether its farmers, manufacturers, automakers, technology, finance. So he has to defend the American Economy. There have been a lot of unfair trading practices by china down through the years. There has been no reciprocity down through the years the president is trying to transform and change this relationship and generate more balance that will benefit, first and foremost, the American Economy and Americas National security, okay thats the thats the most important thing. He has said from time to time it would be good if it would help both countries, but his number one priority, as he said in todays Economic Club speech is looking after america. Larry, there was some criticism of the fed in the speech, as weve come to expect. There was also some discussion of the negative rates that we see in europe. After mentioning negative rates, the president said, quote, give me some of that. What do you make of that do you think the president wants to see negative rates from the fed . Look, the president has made his views known on the fed for quite some time. You are a ware of it i dont know whether he wants negative rates, exactly. Hes making a point. Do you want negative rates . Do i personally want i dont think the United States needs negative rates, because i think our economy, as the president said today, our economy is in very good shape. And in fact, faced with severe monetary tightening last year, its almost a miracle that were doing as well as were doing this year. I noticed tenyear paper is sliding back up towards, what, 190, 195 the yield curve, which everybody was talking about as a recession a couple of months ago, i disagreed with that then and i disagree with it now the yield curve is normalizing thats a good thing. Short rates are below long rates. That helps create bank loans and i think were seeing a comeback after a couple of soft quarters my own view is, were going to see a much stronger Fourth Quarter heading into 2020. As you probably have reported, the nfibs Small Business optimism index was very strong today. We had very strong job numbers and after revisions and adjustments, those job numbers were absolutely a blowout, close to 300,000. We have good wages and i might add one other thing on the wage front, very happy to see that wages are rising over 3 but heres the thing, and he mentioned that in his speech today, the wage increases for the production workers is actually growing faster than the wage increases for their manager. And i think thats very very rare and i think that a test to the success of the president s program, as he mentioned today to the new York Economics Club low taxes, rollback of regulations, opening up the energy sector, and bringing down trade barriers have been a Great Success in just, what, two and a half years and i kind of like this phrase, wilfred. I kind of like this phrase i think we are in a worker boom. Thats what the numbers show the president took care today to walk through some of these numbers. 5,000 increase on an aftertax basis for incomes, for the average middle class family of four i think its about 66,000. The Prior Administration had a decline in that measure of average family incomes they had a significant decline and thats something that we very rarely see. And for those critics of mr. Trumps program, they should look twice at the numbers before they say that the middle and lower middle class is actually the bottom, i believe, the bottom 10 has had the single biggest wage gain of any single quintile in the formulation. So we are in very good shape and Monetary Policy at least has moved back to neutral. Larry and well let the rest of it take its course. Larry, on this point, when youre talking about where we sit with incomes and the ability to spend here in the United States, there is a story just out here from the washington post, saying that youre exploring a tax proposal, lowering the middle class rate to 15 for income taxes. Is that true well, look, theaxuts 2. 0. My pleasure. I think our tax code could always use plenty of progrowth reforms. I dont want to to be specific on anything, court its way too soon for that im consulting with the leading tax people in the senate and the house. I might add, the leading tax people on both sides of the aisle. As well as my colleagues in the administration and the treasury, as well as people on the outside. Were very preliminary stages right now. This thing will not be completed for many months, as i say. It will be released as a strategic progrowth document for the campaign we want to see middle income taxpayers get the low eest possible rates and i guess at a speech i gave before the National Taxpayers union, they had a big 50th Anniversary Gala or some such thing, theyre good folks. I just happen to remember the last time i did this, which was quite a few years ago, several decades ago. One of my bosses, my former boss, ronald reagan, left the tax code, the individual code at 15 and 28. Now, im not saying those proposals will come out of our tax cuts 2. 0 im just reminding people that thats where it was, 15 and 28 President Trumps phenomenal business tax cuts have made america the most competitive country in the world and thats why our economy is booming right now and thats why middle income wages are going up, but we have a lot of work to do and whether we get to 15 on a middle class tax rate, i dont know, sounds like a pretty good idea to me, but ive got to consult with a lot of people and ive got to get the president s signoff before anything comes out. And i will just say that those conclusions will come not for many months, not for many months but you know me. Im working on it. Not for many months on that, larry, but a hint that the trade deal could be days away. You dont have to respond again. Larry, thank you so much great to see you, as always. My pleasure thanks to both of you. Larry kudlow. Thanks, larry still ahead, two stocks that have fallen on hard times are set to report after the bell well bring you the numbers from tilray and smile dirt clecub and well speak with the ceo of tilray as soon as those numbers hit. Stick with the closing bell. Does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. There are zero reasons to invest anywhere else. Val, vern. Im off to college and im not gonna be around. Im worried about my parents retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, invest and protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall imagine the closet space . Yes oh hey, son. Yeah, i think theyll be fine. Voya. 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And crisp or stale that could also be called chips versus chips to get an idea of whether the market is playing offense or defense at the moment. Long shelf life, a certain look and a longterm trend in the broad market suggests that this breakout in the markets to the upside could last for a little while. And from sour to sweet, this is a look at maybe the emerging trends in the european economy so first of all, lets look at this chart of the total bond market exchangetraded fund. Thats the agg its a twoyear chart. What i want to highlight is where weve come to right here, is just at that cusp ofgoing back below this is the price of the bonds the yield goes in the other direction, of where we were in july if we were to break below this and price in yields go up a little bit more, it would kind of isolate this area, put a real punctuation mark on this and maybe say that the trend is higher but higher for yields but were not quite there yet. I think its at a fairly interesting juncture take a look at stocks versus bonds. This is the same bond market etf over the past six months or so along with the s p 500 and you can see, very decisive break higher by stocks versus bonds. Thats obviously positive. It shows you better risk appetites. But this hasnt always lost. Keep in mind, it looked really good there in late july as well when we did break away with stocks and you had a switch back this is the interplay were watching right now as the market hovers near its high thank you, mike ach tfter the break, one fim just upgraded live nation to outperform calling the concert market recession resilient plus, the launch of disney plus has been a Long Time Coming heres ceo bob iger giving the first details about the service way back in august of 2017 here on closing bell. We will have a significant amount of Disney Library product from the disney studios over time and Television Library product, but were going to make a significant investment in yaninal disnebrded television and Motion Pictures for just this platform it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Im part of a community of problem solvers. We make ideas grow. From an everyday solution. To one that can take on a bigger challenge. We are solving problems that improve lives. To one that can take on a bigg challenge. Time now to get the word on the street oppenheimer upgrading live nation to outperform with a 73 price target the firm saying concert going is a recessionresilient business model. Morgan stanley out with a note about Online Food Delivery, saying theres a long runway for the 350 billion Addressable Market the firm picks uber and grubhub as the bestpositioned companies in the space and oppenheimer raising its price target on nvidia to 250 a share from 190 a share. This comes after ubs and Deutsche Bank raised their price target on the stock yesterday. Nvidia set to report earnings on thursday the one that jumps out to me is Morgan Stanley on Online Food Delivery im not sure i can agree what theyve talked about as the Addressable Market theyre saying 6 at the moment penetration, lumping together all restaurant visits, which is never going to transfer to all food delivery. So i dont think its 6 to its much youre hitting on something that i think is the bear case, where the total Addressable Market has always been overestimated for the bulls. So i agree with you. And that is one of the major headwinds. Plus as a commoditized business, too much competition, too high valuation sets up for a lot of bearish headwinds going forward. Total Addressable Market is kind of funny with food. Everyone eats. So its everyone but who wpays it . When you spend 8 on a burrito and you want 5 burrito, it doesnt make sense who pays for it . Do you get a cutback from the Delivery Company and an uber driver makes more money drive people around versus taco bell. Bburritos both of those stocks are down today. Grubhub and uber have has a big slide as of late anyway. Time nor a cnbc news update. Sue herreras got it heres whats happening at this hour. Germany has arrested three suspected isis members on suspicion of planning an attack. The three young men were picked up on the outskirts of frankfort. One is a germany, originally from macedonia the other are turkish citizens they are suspected of planning an attack using explosives the widow of baltimore congressman Elijah Cummings says she is running for his seat in the special election scheduled for april of 2020. Maya cummings make the announcement in baltimore, telling the crowd that she and her late husband talked about her continuing his political fight. I would vote for impeachment. I think that whats coming out of washington is incredibly concerning and disturbing. And it basically goes to the heart of the future of our democracy. Congressman cummings was laser focused on uncovering the corruption thats happening in the highest office of the land the countrys largest milk producer is filing for bankruptcy protection. Dean foods says it plans to use the chapter 11 proceedings to keep running its business as it seeks to sell the company. It also said its in advanced discussions with Dairy Farmers of america about selling the assets you are up to date thats the news update this hour court, ill send it back downtown to you. Thank you very much, sue. Well, lets send it over to mike santoli for his second dashboard of the day calling this one crisp or stale . Take a look at a couple contrasting price trends right here chips versus chips this is the Semiconductors Index as well as pepsico, which of course the majority of the business is frito lay. Thats chips right there i think its a good proxy for whether the market wants to be offensive or defensive and that would be pepsico and the like here you have this really clear breakaway to the upside, by semiconductors pepsi had been hanging in there pretty well. Nothing fundamentally much has changed about the business its just money draining out of that defensive trade the big question, honestly, right here is whether this is getting a little bit overheated. Thats a pretty steep trajectory, hitting new highs, great as a bellwether, but maybe has to calm down a little bit as the overall market perhaps is getting to a point where the rally needs to take a breather, guys mike, thanks so much for that but the Broader Market today has improved during the course of the show, back in record territory, just two points shy on the s p, at least the chamber of commerce just out with a report, detailing the impact of a proposed deal with Elizabeth Warren about reforming the private equity industry. Leslie picker has the details. All right. Leslie, what do we know here hey, court, the chamber of commerce coming out swinging in defense of private equity. A new report looking to quantify the impact of a plan to reform the private equity industry, put forth by a group of lawmakers, led by senator Elizabeth Warren. The study purports that enacting the scheduled stop wall street looting act would cause some and potentially all the firms in the p\e industry to close. It goes on to say that the legislation would result in the loss of as much as 26 million jobs, up to half a trillion in annual tax revenue and cause billions of dollars a year in investor losses. The stop wall stctet would among other things make p\e firms responsible for the debt and pension obligations of the companies they buy, eliminate firms ability to extract dividends and change the way carried interest is taxed. Weve reached out to senator Warrens Office for comment on the findings and are waiting to hear back. Guys leslie, thank you very much for that more. Still to come here on closing bell, weve got your last chance trade, 27 minutes left of the session. Steves doubling down on a call he made back in september. As we head to break, lets check in on bonds. Treasury yields dipping a bit today, but the tenyear yield remains above 1. 9 the curve has risen and steepened significantly in the course of the last month or so at the moment, the s p is higher, not quite in record territory. The dow is flat. Were back in a couple of minutes. vo the flock blindly falls into formation. Flying south for the winter. They never stray from their predetermined path. But this season, a more thrilling journey is calling. Defy the laws of human nature. At the season of audi sales event. 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. 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But will that matter appletv plus guyed with similarly negative commentary, leaving many to wonder how reliant these streaming services will be. The journal out with a report that Richard Plepler is in advanced talks to sign an exclusive production deal with apple. For more, lets bring in jessica reef ehrlich, senior media and entertainment analyst at bank of America Merrill lynch. Jessica, good afternoon to you thanks so much for joining us. What do you make of things like technical glitches on day one and indeed reviews of the new original content for a company like disney plus that has such an enormous library. Is it the library that matters more or some of those day one factors . Okay. So thank you for having me and lets take those one at a time as far as the technical glitches, to us, it appears that there is huge demand on day one. The Marketing Campaign is fabulous they have tons of partners, you know, the verizon offer for unlimited plans, 5g, and fios subs, but theyre also trying to upsell existing fios and verizon customers who are not on the unlimited plan theres just tons of offers out there. And disney will get a wholesale price for that i dont think theyre giving any of it away for free. As far as the content, of course the beginning, the library already critical the library is very deep and its really wide but over the longterm, original content will be critical they have to keep refreshing to keep customers on the service, of course. Jessica, how are you weighing through the risk benefit analysis here for disney plus . What are the metrics that disney needs to see to know that this investment was worth it . Earlier in the show, we played a sound bite from bob iger talking about this in august of 2017 its been an awful Long Time Coming yes its been talked about for a really long time today is the day but its it will be viewed or valued in the early years, certainly, on subscriber numbers. Its not expected to break even for five years so today, we changed our forecast disney had provided guidance, which is unusual for them, of the 60 to 90 million subscribers in five years. And we think thats incredibly conservative if you just think about what netflix has done in the last five years, they added over 110 million subscribers worldwide at a price point that was close to 10 on average over this time period and disney, of course, has wide appeal it has a brand that everyone around the globe recognizes, from day one and the price point, of course, is much lower. Its below 7. And if you commit to one year or three years, its even lower so there are certain advantages our new base case is 90 million subs, but we think it can go much higher. And thats the key metric they will be valued on for the time being. Steven, despite that optimism about the new overthetop service, a lot of their earnings is still kind of old media, as it were, do you think the valuable multiple is a bit stretched . The key is, i think the valuation multiple has to be stretched even further to make this a viable event for disney for everything you just said, it is Old School Entertainment Media Company thats valued as an Old School Entertainment Media Company. It needs to capture a higher multiple for the stock to move higher than it is now. Technically, the stock has to hold the 130 mark. But going forward, when its never going to get a netflix multiple so apple and disney have to expand their multiple in order for the stock price to move higher do you expect that to happen . I do. Because this is only additive to it they dont havtflix. They have to be in the same arena as netflix and they seem to play it better than anybody else. Theyve always been the king of content, always had deep pockets and they have a lot more levers to pull when streaming becomes a headwind for them. Parks, media, everything they have a lot more buckets to ul reven pull revenue from. Disney higher by about 1 jessica, thanks for joining us coming up next, weve got your last chance trade with mr. Grasso we will be right back. At leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. 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 Commission free today. 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This is tech that helps you be there. The nissan altima. Now offering the most techadvanced engine in its class. We have just under 17 minutes left to go steve, what is your lastchance trade for us today its a repeat its west rock its a containers and packaging company. Cyclical name, not very sexy, and thats why it hasnt been performing 5 dividend yield, 23 Free Cash Flow yield and tremendous upside ahead of it so this is cyclical this is cyclical. And this is something where its training at a trough valuation its been thrown out by a lot of the growth players coming back into vogue now a lot of the headwinds, economic headwinds have subsided. This is one that if i told you where i think its going, you would probably kick me off the stage. But its going a hell of a lot higher than just up 11 . But i will tell you were kicking you off the stage anywhere after this segment. So give us your number. Either way, i have to go trade. But the truth of the matter is, when you look at a stock like this, look at the technicals its been rejected at the 40 price range before wait until it closes above 40 bucks. Its almost under that now. You gave this before, september 10th, and its up 10 since then but long way to go a couple of months and i think youre able to triple or quadruple quadruple quadruple take your cardboard with you. Steve, thanks so much thank you steve you again next time we have got 15 minutes left of trade after the bell we will be entering into the closing bell market zone any positive close to the dow will be a record, by the way after the bell, Quarterly Earnings results from smile direct club and tilray and tilray ceo Brendan Kennedy will join uasooasheumrs hit. N t nbe dont go anywhere. m off to collt gonna be around. Im worried about my parents retirement. Oh, dont worry. Voya helps them to and through retirement. Dealing with todays expenses. Like college. While helping plan, investand protect for the future. So theyll be okay. Without me . Um. And when we knock out this wall. Imagine the closet space. Yes oh hey, son. Yeah, i think theyll be fine. Voya. Helping you to and through retirement. High protein. Low sugar. Tastes great high protein. Low sugar. So good high protein. Low sugar. Mmmm, birthday cake pure protein bars. Try lemon cake. Pure rotein bars. Dont get mad. Get e trade, dawg. Welcome back we have got just under 12 minutes left in the trading day. We are now in the closing bell market zone. Thats commercialfree coverage of all of the action as we head into the close cnbcs senior markets commentator, mark santoli, he is here to break down the crucial moments of the trading day joining us today, we have Barbara Duran from bd8 partners. Chipotle is now extending its car carne asada offering through 2020 chipotle moving higher today by around 2 on that news. The Company First introduced carne asada as a limitedtime offer, but is looking at making it a permanent menu fixture. The Company Sources from firms and uses responsibly sourced beef our supply chain team and our chefs worked with our beef suppliers to identify additional premium cuts that were both delicious and meet all of our food with integrity principles. They leveraged their digital platform to launch carne asada back in september. So its only its beef that is made this way . Thats their food with integrity principles they source responsibly. Thats really a big part of the chipotle story no added hormones or antibiotics in the meat. Everythings fresh youll see in their stores, they really display all of that there when you walk in, so you know its fresh and looking good. But to me, like i said, guys, the big interesting part of this is leveraging it digitally thats what they did with an earlier offering this year with their lifestyle bowls. They pushed that out that way. Their Digital Sales were up 88 in this last quarter really huge move there kate, thank you so much for that the Broader Markets and nasdaq is on pace for a record alltime close. The s p just below it. The dow also just below it but by a fraction of a couple of points so we will see if we could have a triple record close. At the moment, weve got one out of three in that territory dr horton touching alltime high levels today dating back to its high in 1992 diana olick has for us dr horton reported better than q4 earnings and strong sales orders and is predicting to build even more homes next year its benefiting from huge market share and a broad geographic footprint. Shares of dr horton jumped to a record high before falling back. Shares of the texasbased builder are up more than 50 yeartodate after falling last year all the big builders have gotten a boost from lower Mortgage Rates and the very lean supply of existing homes for sale back to you guys the pickup weve seen in yields hasnt yet kind of hit some of those home builders. It has not. In fact, its interesting, though, because from mid0octobe and a week ago, dr horton and others did back off, and now with this bounce, theyre right back up there. I think the market is flinching in advance of the possibility of rates might have an impact, but so far, no evidence. Barbara, thats a good point. D. R. Horton seems to have outperform some of its peers do you think the run is overdone or is catchup happening with some of the other groups its not overdone, but i dont think theres a lot left on the table here. Were seeing Worldwide Growth starting to pick up again. All this central bank easing its just going to be a matter of time before yields do start to back up so, you know, with dr horton, if you own it, you might get a little more upside, but i would not be initiating a position here and there could be catchup, but the fact is, they have 10 of the market, and i think they do deserve to be making a new high. Higher today. Kate rooney has more on facebook hey, Courtney Facebook is putting its Payment Methods under one roof theyll let you send money to friends and buy things online through facebookowned apps like instagram and whatsapp this continues a huge push into payments we saw with libra tech giant partnering with 22 billion fin Tech Companies stripe theyre also working with paypal on the back end and will still support credit cards and paypal checkout this does seem to be putting pressure on the big payment competitors, though. Check out shares of jack dorseys square. It was down as much as 4 today. Guys kate, thank you very much for that thisstands out to being a massive threat to the likes of venmo and paypal, because its another entrant into that space thats going to make it even harder to monetize what it already lost making apps, even if theyre very widely adopted it certainly could be and i think the question is the value, if any of venmos sort of head start and its the fact that its a verb already, you know, things like that probably doesnt hurt i also wonder if just payments in general is almost like messaging, where people are kind of indifferent as to how you get ahold of people. And so its about habit. So can facebook build a habit . Its about habit, but also, as youre implying as well, not something people are really willing to pay for and it makes it very hard to monetize unless they can transition to having Bank Accounts and that comes with all sorts of other issues facebook up healthily on that news today, a couple of percent. We have got just six minutes or so left of trade at the moment were down seven points on the dow. Not quite in record territory on that indices Tesla Ceo Elon musk announcing plans to build a plant in germany and phil lebeau has the details. You talk about fresh news, this is fresh news coming within the last hour, this is elon musk in germany at an awards show, just within the last hour, talking about the next gig factory i actually have an announcement that i think will be hopefully well received that weve decided to put the tesla giga factory europe in the berlin area. We knew that they were going to announce a plant in europe, a final Assembly Plant in europe not a surprise that its in the berlin area. An exact location has not been identified yet as you take a look at shares of tesla, remember, they not only have the plant in fremont, california, they have the shanghai giga factory. That final Assembly Plant, thats expected to begin production likely by the end of this year. And guys, within the next couple of years, well have tesla europe outside of berlin back to you. Phil, thank you very much barbara, what do you make of this announcement . Is this a key place for tesla to build a new plant in germany phil said not a huge surprise outside of berlin. I think its a great place to build it particularly given germany and their emphasis on autos. And i think its very interesting, too, on the broader tesla story, because i was one of those people thats been a skeptic all the way up if i had been short, which i wasnt, i would have had my head handed to me but i have to say, it looks like with the recent earnings and all of the positive information were getting, this looks like another positive story them standard in the tesla story. The dow just turned positive moments ago. Its now fractionally negative again, any positive close for the dow is a record alltime closing high the s p is about a point and a half away itself we have about less than five minutes to go until that bell sounds well see if we can do it. Sun trust is out with a new note on biogen and amgen. Meg terrell has those details. Wellknown biotech analyst initiated coverage on biotech at sun trust today. And amgen and biogen are among her buy ratings. She says she thinks amgen can grow again without nearterm m a as the contribution from its biosimilars business is underappreciated biosimilars are the generic analogy for biologic drugs she expects pushback on her biogen buy rating, but she expects it to provide Downside Protection theres little in the stock for biotechs alzheimers protection and more controversial, she thinks its alzheimers drugs will work. When could we know about more about how well those drugs work . The alzheimers ones that next catalyst is coming up pretty fast, court. Were expecting some more data on that alzheimers drug at a big alzheimers conference in san diego. Well of course be covering that very closely, too. Meg, thank you very much. Weve got three minutes 20 seconds left p we are at the moment just a couple of points on the dow away from record alltime closing high the nasdaq remains in record territory. Mike has been diving into the market internals today what have you been seeing . A bit mixed even when the indexes were a bit higher when the volume was not particularly strong, i think you are seeing a little bit of an undertoe, some selling below the surface. Its about 40 up to 60 to the downside and if you want to look at just the sub components, we had this huge decline in momentum stocks in favor of value a couple months back, but theres actually been a bit of a reversal here. You see the momentum etf over the past week has actually outperformed value it could just be perhaps a little bit of reversion to the mean or it could mean that in fact, the value trade is carried far enough right now that people are still looking for those old winners going into year end. Mike, if you look at the sector sort of performance today, there is a bit of a defensive tilt as well there is. Yields have kind of been stuck today, so that hasnt given you much lead, and i think the rally in general has gone a good distance in a short time. We saw energy move higher last week, but back down to the bottom today, down by 0. 7 of for the savings account performance. We have about two minutes left to go well send it over to Rick Santelli who has a check on the bond market back open today. Today the preoccupation seems to be in the corporate debt market, as abbvie coming with that huge 27 billion multitranche. Look at the market since october 1st. Twoyear notes are hovering within a basis point or two of sevenweek highs but if you go down the curve to a 30year bond, much firmer, much more aggressive upside. But its stalling just a bit, late in session. Maybe, if you look at tens compared to the s ps, stock markets kind of side wie ways et the highs, not giving a big push to Interest Rates. But bertha, another record day the 13th for the nasdaq composite. We are off of the highs with no real new news coming out of the president s economic address at the Economic Club here in new york we did see a little bit of a fade here into the close nonetheless, we have the nasdaq 100 set to close at alltime highs. Microsoft one of the reasons why its at an alltime high and well close there today as well. Meantime, on the other side, smile direct set to report its Third Quarter earnings, its first Earnings Report since going public this year so you can see, it is down significantly here and fading into the close ahead of that report well have that after the closing bell when it crosses over to bob. Bertha, new highs earlier in the day, but nothing new in the president s speech and it doesnt look like were going to hit a new high on the s p, were a point or so shy of that for the close it was another ugly day for shale companies. I want to point out whats going on with some of these. Weve had low oil and gas prices really hurting these companies another bad day for chesapeake, down another look here, 17 . They filed a going concern disclosure last week that means they may breach debt covenants. Theyve been cutting expenditures as a problem for this whole shale group Oil Service Providers like tidewater were also down on wider than expected loss riggers like rigs, transocean, diamond offshore, also all week. Well keep an eye on that. Theres the closing bell we are 3092 on the s p the old high, 3093 welcome to the closing bell, everyone. Im wilfred frost. And im Morgan Brennan in for sara eisen the dow just in positive territory if you go to three decimal places and that means another record alltime high for that index the nasdaq also closing at a fresh record high. The s p about a point away, itself 3091 3091. 9 it needed to be 3093 to be a record close but two out of three aint bad at all health care and communications are the leading sectors today. Coming up, smiledirectclub will report its first Quarterly Results since going public and well hear from tilray and get exclusive comments from the companys ceo after those numbers cross. Joining us to talk about the market day, Barbara Duran, senior Portfolio Manager at bd8 capital partners, still with us. Along with jeremy siegel, professor of finance at the university of finance Wharton School so just within a whisper, we did it for the close but kind of a bias we lost steam near the close hovering near the highs is just fine. And how we got here is a positive cyclical stocks participating. All the backdrop seems relatively positive. I think what you might be seeing is a little bit of wear and tear below the surface. More stocks down than up and i think its going to take incrementally better news to continue higher from these levels if youre up 8 or 9 in a little over a month and right now the idea that you need a tangible trade news to get past this at this point shows you weve built in some good news already. Professor, clearly we did get a record close, but we lost steam during the session some attribute that to lack of fresh positive news from the president s speech what did you make of that speech i agree with mike i mean, i think trade is the most Important News for the market i think the fed has been sort of taken out of the equation. I know that trump is still complaining he wants the rates to be still lower, but i think theyve gotten to where theyre going to be. Fears of recession have gone down so the traders are lookinged fa trade deal and they were hoping trump was going to Say Something he didnt. Thats why you got the buying up to the speech and then a mild selloff afterward but theres still no doubt the market expects progress on this. And its just a matter of time they dont get it, it will be a big disappointment barbara, do you agree that sentiment . Think were in a Holding Pattern until we get further, but if we dont get news, watch out below . Totally i agree with the professor i think were incorporating our assumption on trade is that the worst is over. And im not so sure thats the case, given what weve seen. Maybe it is. Im acting like it is. But also another important part here is sentiment has been so negative it was just a few months ago that everybody thought we were going into recession you saw the big money poll, where it was the lowest number of bulls in a couple of years, the highest number of bears since the mid90s. Thats a good thing. Theres a lot of cash in the sideline thats what mike was talking about. I think thats been the positive, although todays Merrill Lynch fund manager survey showed you that that has come back a little bit so there has been a chase. One of the biggest jumps in bullish acceptabilisentiment in onemonth period in a long time. Its not overbullish. Its not that people have made very aggressive bets for a huge rally here, but i do think that youre starting to see the market itself drag peoples opinionp opinion in a positive direction. Professor, clearly the president is talking about wanting more rate cuts, albeit, it looks less likely than it did at the start of the year to see those. If we dont get anymore cuts from here, do you think the valuations of the s p 500 start to come under pressure a little bit . Well, i dont think the market is expecting anymore cuts, at this particular point i think, you know, everyone at the fed now says, you know, its at a good place. And i think the market, if you take a look, we got a positively sloped term structure, theres more normalization weve also smoothed out that repo market. Theyve gotten fed funds right down to the reoi limit, so i think theyre relaxing on that side nonetheless, were selling in 19 times this years s p operating earnings it isnt cheap now, its not expensive for the Interest Rate level that were at, but it doesnt give a lot of room for some big announcements. Certainly not an consolidation of any trade tensions i think would really bring a selloff. So if we get some sort of settlement, i think we get a 10 pop, at least, in the s p. Otherwise, were just going to be muddling along, i think, because valuations are pretty full at this particular juncture, until we get some push on earnings, you know, we got Third Quarter over, its going to be another three months until Fourth Quarter comes in. Need to issue an correction, because i did mention that the dow hit a fresh record alltime closing high earlier, but in fact, closing bang on flat, meaning that it just matched yesterdays alltime i dont think weve ever seen that before, exactly flat. Didnt that happen to the s p 500 so long ago. I dont think ive ever seen it on the dow i think it has happened in the history of the index it hasnt happened in my tenure on the show perhaps not in a very long time there we go exactly flat. I was wonder, what color do we go blue. So not a record not a new record alltime high for the dow. We did get one for the nasdaq. Barbara, when we look at these records, which sectors do you think still have room to push higher well, you know, its interesting, to look back, and it was cnbc did some interesting work on this in the 90s, the last time we had three Interest Rate cuts, you know, what happened well, it was very positive for the market it was up over 20 but the sarcastic sectored that outperformed were cyclicals. Were seeing people rushing to industrials to see how if its going to annihilatreflate. Industrials and cyclicals can be a good place and also in Information Technology thats the microsoft, ibms, even mastercards of the world very interesting whats going on and its interesting, utilities were up to date, but defensives have pretty much run their course weve got our first Earnings Report out its tilray, kate rogers has got the numbers. Thats right. Tilray looking at a loss of 36 cents for the Third Quarter. Its uncertain if thats a comparable number. Revenue is coming in at 51. 1 million. That is a slight beat for the company. The total amount of kilograms sold increased six fold in the quarter, while prices fell by half and one more bit o from Brendan Kennedy, the ceo, who i know youre going to speak with shortly, saying the Company Expects Significant Growth in q4 and 2020 the stock was originally higher by nearly 5 now it looks like its turned negative back over to you guys. Okay, kate. Thanks so much for that. Dow about 2 in afterhours trade. Coming up, we will speak to tilrays ceo about those results. So stick with us for that part of the discussion. Mike, coming back to the market, the yield play again highlighting its importance. No major fluctuation here. Were above 190 still on the tenyear, but the days the yield doesnt continue to rise sees the market pause the market doesnt quite know what to make of it and obviously, yields were right at this market when the market peaked, stock market in late july, the tenyear yield was still above 2 so youve gotten stocks higher than they were at that point, yields lower the relationship has loosened up just slightly, but on a daytoday basis, bonds tend to either give the green light for stocks or deny that green light. We have our second Earnings Report out after the close smile direct club out with its first report since going public. Bertha coombs has those numbers. We are reporting an adjusted loss for smile direct of 89 Cents Per Share. That is below the estimate of 98 cents a share. Meantime, revenue also topping expectations, coming in at 180. 2 million compared to an estimate of 165. 4 million thats up 50 from the comparable quarter a year ago when they were not public. Aligner shipments, 106,000 that is up 45 from the comparable period. And the price on those aligners at 1788, on average, is up from the first half of the year, when they were selling at an average of 1764 the company is also raising its outlook, now sees revenue of 750 to 755 million, the estimate on the previous guidance had been for about 747 million. Cfo says as well, kyle wales, that postipo, our team is laser focused on execution the fact that they lost less than expected certainly impressing the street, although they lost a bit of ground here that Conference Call will get underway at 4 30 back to you. Bertha, thank you very much for that professor siegel, i wanted to pivot back to the Broader Markets. What do you make of the slight improvement in data out of europe and the valuation difference that still applies there . I was going to mention it i think some of the best news that i see is the better data out of europe. And even some of the emerging markets, which have stabilized and we have to remember, s p 500 gets over 40 of its profits from foreign sales if europe is sick, if the rest of the world is sick, youre not going to have a healthy Earnings Report and i think their pickup, the World Markets are beginning to look really good. The risk markets and the equity markets, what they would really like a double shot, if trump can deliver on a trade deal, i think youll have a globalbarbara, beu go, i think youll own some smile direct on your first blush of those numbers, whats your reaction . I bought it this morning. This looked like another broken ipo, one should stay away from theyve got this litigation risk, which when you look at it, is actually quite manageable thats why im interested to hear what the ceo has to say but their revenues are explosive and they seem to have a model that is really superior to the traditional orr donathodontists dentists year over year, i think their revenues was up 1190 this is a nice surprise. I didnt expect them to be better on their earnings this stock is selling at half the valuation of its peer group. Im very intrigued well see what they have to say on that Earnings Call, the first one since being a public company. Thank you, Barbara Duran for joining us the last time we saw that beautiful blue on the side of the screen, the last time the dow was perfectly flat was april 2014 our thanks to robert hamm for that a decent period of time. Its been a while since weve seen that 0. 00 coming up next, tilrays ceo will join us in a first on cnbc interview rcto e toea tth companys results that we just got moments ago. Stick with the closing bell. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. Shares of tilray trading higher after reporting earnings. Just moments ago, joining us for more on the numbers, tilrays ceo, Brendan Kennedy thank you for joining us, mr. Kennedy. So whats your take on the quarter, if you could sum it up for us were pleased with our revenue of 51. 1 million its a 5x growth compared to the same quarter last year and i think an important part to note in there is that our International Revenue grew to 5. 7 million. Again, a fivefold increase from the same quarter last year what are the projections, brendan, as you say, some very impressive top line growth there. What are the projections for when you expect to be profitable on the bottom line so currently, were expecting to be ebitda positive in q4 of next year. If you think about the revenue growth, 500 this quarter compared to the same quarter last year, thats because of investments we made in 2017 and 2018 we have one project left in portugal that were wrapping up and that investment will increase not only our revenue going forward, but our profitability throughout 2020 and 2021 how are you actually going to get there . To be profitable when you see prices falling and more competitors entering the market . So, when we look at our average price per gram, you know, none of the pricing on our existing products fell it was purely product mix, based on what the provincial quarter and it changes from quarter to quarter. In q4, we will see new products, new form factors, as part of the next phase of legalization and those products generally have a higher profit margin. Brendan, i wondered if you look at the way, and the timing with which you listed the company and wonder whether cuddle do it differently or do it at a different period in time, if you were to have the chance again because clearly, as you said, just there again, 500 top line growth year over year, yet your stock has been tanking of late albeit, after a very strong rise it was as if you just became the way the market could blindly play this theme, as opposed to being on the fundamentals. Do you regret the massive rise and then fall youve had i dont hindsight is always 2020 and certainly, the last year has been highly volatile, but theres a lot of pressure on the entire industry. What im excited about is that its still day one in this industry if you think about 41 countries that have legalized for medical, i think that will increase to 80 and currently, theres only two countries in the world, uruguay and canada that have legalized theres an awful lot of attention on whats going on with these vapingrelated illnesses. And we dont exactly know whats happening. There has been some connection to some thc and some of these patients how does that potentially impact your company, as a Public Health issue, frankly so its something we pay very close attention to all the medical products that we export around the world are gmp certified. And we distribute those products through a pharmaceutical supply chain into pharmacies. When we look at some of the reports that came out of the cdc last friday, i believe 37 of the cases were tied to vitamin e as a carrier and those products were primarily, the majority of those products were sold in the illicit market so one could argue that this vaping crisis could lead to more legalization, because all of the products we produce in canada and distributed around the world are well tested by not only Health Canada but also regulators in other countries. Brendan, take us through the next steps in the partnership with abi sure. So we nound the name of that joint venture, its called fluent and the ceo in this quarter and we have a portfolio of products we havent announced the brands and what the actual products will be, but we are were producing them at this moment to launch those beverage products in september well, brendan, come back and talk to us about them when they launch thanks so much for joining us today. Thank you Brendan Kennedy there tilray ceo the stock moving higher, having initially traded lower as the numbers hit. Still ahead, Niall Ferguson discusses how the escalating protests in hong kong could potentially impact the Global Economy and ongoing trade talks with the u. S possible breakdown the charts to explain why history says the market could be heading much higher from here icwi t closing bell. Well be back in a few 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. Lets send it over to mike santoli for his third market dashboard of the day wilf, weve got a pretty clear breakout in the s p 500 to a new record its been a little tentative will this rally potentially have a longer shelf life . This is ae longterm tenyear chart of the s p 500 prompted by a note from the Technical Strategist over at bank of america and Merrill Lynch who pointed out two prior periods before this recent one, where you basically had a very long sideways range, with a slight upside bias and then a breakout to the upside. That previous one broke higher in 2012. And then, of course, you had this other one here that was sort of surrounding that big selloff in 2015 16 and when you broke here, it went up higher. Whats that mean if it broke higher it would meet around 38something for the s p 1830 thereabouts, up more than 25 from here. Thats just basically saying, what this kind of ample attitude of a rise would mean if you believe this is a secular bull market and this is now just unleashing it to the upside. Obviously, many, many things can go the other direction on this but it shows you that the technicians are warming to this trend, as basically the market has kind of paid some penance for this long side waist period and maybe its now indicating that it wants to go higher which i guess, mike, is already implied in what you said, is how often you do get a third breakout higher after the third plateau a decade in. I mean, in the 90s, you certainly had at least three of those runs that was an extraordinary period obviously, not all of them do. And the mid2000s didnt get you anywhere near that its certainly nothing deterministic about this but these are the kind of things people are pointing out, here and here, nobody thought you were in for a massive ramp to the upside, either third time might be the charm. President trump criticizing the fed again today and renewing his call for negative Interest Rates in the u. S we are actively competing with nations who openly cut Interest Rates so that now many are actually getting paid when they pay off their loan. Known as negative Interest Rate. Whoever heard of such a thing . Give me some of that up next, well get reaction from Niall Ferguson and ask him whether he thinks negative rates could be good for the u. S. Economy. 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. Ladies and gentlemen mini is a different kind of car. For a different kind of drive. Ladies and gentlemen for the drive to create a new kind of family car, that became a new kind of race car. For the drive to rebel, zag. For the drive thats inside you. And inside us. Thats the drive under the hood of every mini. Because every mini is. For the drive. Welcome back to closing bell. Its now time for a cnbc news update with sue herrera. Good afternoon, sue. Good afternoon, courtney. Good afternoon, everyone heres whats happening at this hour President Trump claiming credit for the countrys strong economy. He spoke at a luncheon at the Economic Club of new york, highlighting his administrations economic achievements during the last three years. But he also issued this caveat the American Market is the most valuable and coveted market anywhere in the world. Those who want access must play by the rules and they have to respect our game and our laws and have to treat our workers and businesses fairly mark sanford has ended his shortlived campaign for the republican president ial nomination the former South Carolina governor made the announcement to reporters gathered in front of new hampshires statehouse. Michael bloomberg taking another step towards running for president. He filed his paperwork at the arkansas capital to be included on that states democratic primary ballot afterwards, he had an oncamera lunch with little rocks mayor while greeting some of the diners there youre up to date. Thats the news update this hour guys, wilf, ill send it back downtown to you. Sue, i know hes not formally running yet, but im not sure how many people have registered never state and then not run well, i think thats a very valid point. Hes moving in that direction. He is definitely moving in that direction his spokesman said that basically, if he does decide to run, its going to be a 50state campaign and hes started by visiting states that his spokesman said traditionally Democratic Candidates dont pay enough attention to. So there you have it there you have it sue, as always, thank you. Now an update on the controversy over the apple card. Yesterday on closing bell, tech entrepreneur david handmeyer hanson blasted apple and Goldman Sachs for alleged gender bias when determining apple card credit limits apple is simply being cowardly by handing this over to Goldman Sachs. It is the apple card its not the Goldman Sachs card. No one cares that Goldman Sachs is actually the Credit Institution behind this. Goldman sachs yesterday denied allegations of gender bias today, adding to that saying, it will reevaluate credit lines for users who receive lower limits than expected goldmans retail bank ceo says the company does not know your gender or marital status during the application process. The new response begins, quote, we hear you, and continues, quote, we are committed to ensuring our credit decision is fair together with a third party, we reviewed our credit decision process to guard against unintended biases and outcomes and, quote, we want to hear from you. I think theyve gone kind of half of the way here theyve basically acknowledging now when they are then informed that two people are, indeed, a couple, and theyre able then to weigh those things together, that they will do that but you might have to notify them because at the moment, the whole process of applying on your phone versus filling out forms doesnt notify that. And thats why they changed the decision for mr. Heinmeinor and his wife, that once they were informed its obviously a tradeoff. If you want to have quick approval and youre still learning, i think, the whole market and exactly trying to filter in. I guess perhaps theres this idea that theres some precision on every single, you know, credit balance approval, as opposed to it being like, you know, triangulating around what we know and then see how the loans perform. It isnt clear we have totally figured out, we are reviewing, we want to hear from you and they want the customer to take some action, if they feel that theyve been wrongly identified yeah. With their credit limits. I think theres another point here, which is, there are some imperfections from all credit app decisions, not just this one. I think this one gained a lot of attention and attention it deserved to get. But i dont think that this is a Perfect Practice across the whole industry it will be interesting, as well, to see what the result of the new york regulators investigation is and i guess they will be able to look at all the finer details that Goldman Sachs and apple cant reveal to us about the individuals consent here and elsewhere. But im sure well get definitive answers in due course still to come, Niall Ferguson tells us whether he agrees with Donald Trumps latest call for negative rates and whether he thinks a trade deal with china will be reached this year. Plus, well head live to huntsville, alabama, for an up foemt mbok at how elite law enrcenmeers get trained on specialized explosives. That will be fun coming up on the closing bell. 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. Hong kong entering its sixth month of protests. Tensions rise as escalate can go violence has paralyzed key districts of the city. Joining us now, Niall Ferguson, senior fellow at the Hoover Institute at Stanford University a very good afternoon to you, niall. Thanks for joining us. My pleasure, wilfred. I want to talk first of all about hong kong and the way its escalated of late. And my main question is this do you think this will remain hong kong specific, or could it really damage beijing, as well well, i think many people after the beijing government decided not to send in external forces, rather took their eye off th something that was not so much a Million People in the history as hundreds of people fighting pitched battles with the police what happened at the Chinese University of hong kong, an institution at which ive taught, this evening, was nothing short of a fullscale battle and so, it is a problem for beijing, as well as obviously being a problem for the hong kong government. And i think the most important thing, wilfred, is actually the implications for someone else, namely taiwan. Because taiwan is watching this closely an election approaching in january and it is radically changing sentiment towards the mainland in taiwan. My view is that the real historical significance of the hong kong protests will be felt next year in taiwan, where beijing has a major problem. It is losing any kind of prospect of bringing taiwan back into the fold, which is, of course, xi jinpings ultimate goal as the president of the peoples republic of china but niall, if we did see china respond by trying to send in troops or seize control in any way against the democratic will of the people, would we not see america and its allies act in a way that it hasnt done against hong kong . Well, youve got to remember a couple of things the first is that the hong kong protesters have explicitly signaled their support for and sympathy for the United States by waving the stars and stripes in the streets of hong kong, which is a tremendous provocation to beijing of course, the United States was never very likely to take action in hong kong, other than of the form of speech making. And weve had some of that but taiwan is slightly different, because under the 1979 legislation, the u. S. Government is committed to, although its not exactly clear how, resist any attempt to change the status quo in taiwan. Now, one cant be certain, if there was a crisis in taiwan, what President Trump would do, because one cant be certain about almost anything President Trump would do my concern and it is a concern of the taiwanese government, is that china is likely to ratchet up the pressure of taiwan likely around the time of the election in january and if the result is one that beijing doesnt like, who knows . One problem that i have with remembrance day, veterans day, you have to remember, International Agreements can lie dormant, almost forgotten, and then be triggered by a crisis. Britain went to war in 1914 over a treaty signed in 1839 about the neutrality of belgium, which almost everybody in the general public had forgotten about, if theyd ever known. I think the u. S. Commitment to taiwan is a little like that its ambiguous people in congress, certainly, care about it, but the wider public has no clue and i suspect President Trump himself doesnt feel very strongly and thats the kind of uncertainty in International Relations that can have huge implications my advice is keep an eye on taiwan as that election approaches, i think we are going to shift our attention away from hong kong to the much bigger question of taiwans future. And speaking of shifting attention, yesterday on the program we had someoneon from academy securities, a former veteran or she is a veteran, rather, and she says that watch out for turkey, whats going on there. Thats the flashpoint that shes most concerned about as it pertains to Global Business relationships. Are you similarly concerned . Well, i think in the United States of many conservatives President Trumps decisions around turkey recently and particularly his effective abandonment of the kurds in syria was one of his most regrettable blunders there is, of course, a great ambiguity about turkeys status, because its formally a nato ally, yet in practice, its pursuing a policy towards syria that is really at odds with u. S. Policy so i agree that there is a big question mark there. I would also add that theres another potential flashpoint, as you look ahead to 2020 and that is actually in europe president macron, the french president , in an interview with the economist, last week cast doubt over the nato treaty and particularly article 5 that any attack is a member on all attacks of nato. The fact that he could express that doubt focuses minds in moscow on a very fundamental question is President Trump would take action if russia were to try the kind of tactics they used in ukraine in, say, lithuania so there are at least, lets say, three potential flashpoint for geopolitical conflict in the coming year. And they get remarkably little attention, i think niall, i enjoyed your piece in the uk sunday times, marking the 30year fall of berlin wall a couple of weeks back and nit, you were asking the question whether we should have celebrated on that day, the fall of communism, given the enormous rise of china and chinas communist model since. I was interested in one thing you implied in the article, in which you suggest that you do ultimately think that chinas current model will collapse. And perhaps sooner than some think. Well, i look back to 1989 and i can assure you, very, very few people foresaw how quickly the soviet empire in Eastern Europe and the soviet union itself would unravel in the space of a couple of years run lesson in history is that very, very big things can happen with very little forewarning and very often, we only retrospectively predict them 1989 looks inevitable now, but during the 1980s, most people regarded the cold war as something that would go on indefinitely like the division of germany today, the conventional wisdom is theres nothing that can stop the rise of china, and inexorably, were heading towards a kind of asian or chinese century. I think that is to overlook some very serious weaknesses in chinas system of course, its not the same as the soviet system, because china has this huge and dynamic private sector around its statecontrolled enterprises, which the soviet union never did. And of course, chinas economy is much larger relative to the United States than the soviet economy ever was but fundamentally, its still a oneparty state. Its relied heavily on surveillance of its population, with High Technology the old soviet system used surveillance without such High Technology, and that didnt save it and i think there are two major points to look at. Number one, as population grow as the population of china declines, so too will growth and thats going to be really quite a steep decline. The growth rate wi, i think, is going to half or maybe more than half over the next 10 to 20 years. And there are huge financial problems that are building up in chinas statecontrolled system. And we do not know quite how those will be resolved, because the level of leverage is now at an extraordinary height. So i think one shouldnt bet on china winning what i increasingly think of as cold war ii, because in many ways, it has major headwinds coming to say nothing of the environmental problems that china is causing to itself, as well as to the world with its rampant co2 emissions. Thank you very much, Niall Ferguson, for joining us we covered a lot of ground all around the world here today. Well, coming up next, were headed to rocket city, usa Morgan Brennan is there with a look at how the citys top Law Enforcement gets schooled on explosives be careful hi, morgan reporter hey, court. Oa oh, we were very careful for this listen, its not just the Defense Department and nasa. A number of Government Agencies are operating in huntsville, including the atf and the fbi, which is currently undergoing a major expansion. Coming up, were going to bring you all the details, including it inside look into some of the ele training happening here at red stone arsenal. Stay tuned woman but to businesses, were a reliable partner. We Keep Companies ready for whats next. man we weave security into their business. Virtualize their operations. woman and build ai customer experiences. We also keep them ready for the next big opportunity. Like 5g. Almost all the fortune 500 partner with us. woman when it comes to digital transformation. Verizon keeps business ready. Were honored to have you on campus for taflac icial visit. Coach saban, how is aflacs Program Different from Health Insurance . Well aflac gives you money directly, for things Health Insurance doesnt cover. Aflac we put together a little highlight reel for you. Heres aflac helping you with your deductible. Copays. Out of pocket costs. You look good paying bills. Get to know us at aflac. Com 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. Welcome back the dow closing bang on flat today for the First Time Since april of 2014. It was the third unchanged day for the index since the year 2000 meantime, the nasdaq closed at a record its 15th of the year and check out shares of smile direct club, taking a leg lower in the past few minutes as the Earnings Call has gotten underway. Shares have rebounded off the lows, but theyre still down about 3 or so in afterhours trade. Well, welcome back. Here we are in huntsville, alabama, now, also known as rocket city, usa thats capitalizing on commercial space in a big way, thanks to resurgence in defense dollars and the dawn of a new space era. Morgan brennan is live there shes going to give us a look at how the citys top Law Enforcement officers are getting trained in explosives. Hi, morgan reporter hey, court. Thats right aerospace and defense has a big footprint here and has for many decades. It isnt just the Defense Department and nasa. Other Government Agencies also operate in the huntsville area, as well. Take the fbi it has had a presence here since the early 170s, but its currently undergoing a billion dollar expansion, that will add an additional 1,500 to the workforce here associate deputy director, the Top Executive at the fbi overseeing this expansion tells me the bureau is thinkingof this as an hq2, basically to explosive devices to ballistics, but also on the digital threats of the future. Our Cyber Division views huntsville as a current and really future Training Ground for the tactics, skills, expertise that we need in the cyber realm to work across all the threats we face. Reporter so this site is expected to be up and running in 2021 just for way of background, the fbis longest standing presence here at the arsenal is the Hazardous Devices School its a program that is required by every bomb tech in the nation, regardless of affiliation, agency, et cetera, for initial basic certification. For more advanced training, though, agents also go through the sister bureaus sister program, which is also held here on red stone and that is programs offered by the bureau of alcohol, tobacco, firearms and explosives. 4,000 students a year come through the atfs National Center of explosives training and Research Special agent michael minachino is the programs director. Whos getting this training . The students are Law Enforcement bomb technicians, atf special agents three, two, one reporter john underwood, the special agent in charge of the center says collaboration with the fbi, military and others influences whats taught to students we get a lot of information from our other federal partners of terrorist devices from overseas we immediately substitute those training scenarios into our curriculum, so we can make everybody safer. The atf offers 12 training courses covering everything from homemade explosives to fire investigations plus some Specialized Program for agencies like the postal service. On three ranges across red testosteron stone. I think if youre up to it, well have you initiate a shot yes, please fire in the hole so why are we talking about this because all of this, i should say, because it all ties back to science, which is such a major focus of this area, particularly the field of energetics, which serves as the basis not only for ballistics and explosive devices, but also for some of that fundamental technology that goes into things like missiles and rockets. Guys so morgan, my first question was, i wonder whether those up t because it looks cold out there. Its a little chilly. The question i was going to ask was how much investment is going into huntsville in the sort of fbi training type area, versus more directly into space arent healthrelated investment you have the billiondollar expansion under way here at the fbi. In terms of the aerospace and defense, i would say its right now its billions of dollars youre also seeing other companies, other manufacturers come to the area as well so in general youre talking about billions in cap exfor the area make no bones about it, huntsville is very much a government town. But the expansion into some of the Different Industries and different commercial opportunities is definitely adding to Economic Growth of the area as well morgan thank you very much. They all fit together awesome stuff, there morgan particularly the fire in the hole stuff up next signs of life overseas perhaps. Mike santoli heading to the telestrator with a look at key european mechanic indicators when we return when you prepare for retirement with pacific life, you can create a lifelong income. So you have the freedom to keep doing whatever is most meaningful to you. A reliable income that lets you retire, without retiring from life. Thats the power of pacific. Ask your financial professional about pacific life today. Whether your beauty routine is 3or 57,. Make natures bounty hair skin and nails step one. Its the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. Natures bounty, because youre better off healthy. Im not really a, i thought wall street guy. Ns. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade welcome back lets send it to mike for the final installment of the dash board which i believe is in part about how strong the uk is. This one is, absolutely from sour to sweet possibly yes, data this morning before the u. S. Open about business sentiment, the Economic Outlook in europe. Look at the euro zone outlook now. In orange is the growth expect aches in the survey. Of course in blue is the current situation. Whats interesting is the outlook kind of surged ahead toward about the flat line but sort of surpassed current expectations folks pointed to two previous etched epds. We go back to the cycles, 2011 lead of the outlook better and it took a while for the outlook to improve less dramaically, the outlook turned higher crossed above the Current Conditions and things were the better. I guess the question is, which will of how much have markets gotten to this point and priced in the fact that we have this inflection with yields going up across the continent as well the euro zone excludes the uk. Of course. Which is for the best. Although a similar story in the uk. Its made a bit of a difference and the ftse hasnt caught up the way the german dax because of the upcoming election. Coming up next, the look ahead, the first open hearing in the inquiry to impeach President Trump is set for tomorrow. How this might impact the markets. Well tell you when closing llcos right back for all their hard work and sacrifice. We all sleep easier knowing youre out there keeping us safe. And on a personal note. Sfx jet engines. I just needed to get that off my chest. Thank you. Geico proudly supporting the military for over 75 years. Whai tell clients, etfs can follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. 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. Welcome back look looking ahead to tomorrow jay powell set to testify at 11 00 a. M. Eastern time. Also earnings from tencent and cisco systems. But one key things to watch is the impeachment hearing. And ylan mui here what the look out. Wilfred, the impeachment investigation goes public tomorrow, the george kent and bill taylor will testify before the house intelligence committee. Now, today chairman adam schiff sent out this memo, laying out the ground rules for the hearing. Schiff and the ranking republican will each get 45 minutes of extended questioning. Schiff said he plans to let staff lawyers take the lead as democrats frame this as a fact finding mission. Schiff said this will be a sober and rigorous process but guys clearly republicans have other ideas back to you. Ylan, thank you very much final thoughts on the market we lost steam but enough to get a record. Enough to get a railroaded. The question is have you had a bit of loss of energy now past earnings season and dont necessarily have an identifiable catalyst. That does it for closing bell today. Fast money begins right now. Live from the Nasdaq Market site over looking new york city times square this is fast money. Your traders are dan nathan Karen Finerman and guy adami and also joined by lori kalvasin, from Capital Markets markets grasping for green with only the nasdaq able to eek out a record now all eyes to walmart with earnings on thursday we break down what the Options Market predicts. Plus the returns for short sellers and giving tesla a break. We start off
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