Well take you live as impeachment proceedings, of course, continue in the house. And a china trade deal hangs in the balance. Welcome to closing bell, everyone, on this big day. Im wilfred frost. And im Morgan Brennan in for sara eisen phase one trade deal may not be completed this year. Retail is recovering with target and lows shooting higher on strong earnings and fed minutes just out officials seeing little need for further rate cuts. Joining us for the hour, josh brown, ceo for Wealth Management. Whats happening . The president stepping off the plane. Yeah. Look at this. Dow is down 142 points, s p is lower, too. Trade, is trade once again dictating the action again today . At the margins. I dont think the majority of Market Participants are making big changes in what theyre buying and elling. Even if theres resolution on, quote, unquote, phase one, will be with us for the duration. If you are somebody who was going to make a radical change to portfolio based on trade, youve had two years to do that. I really dont think that we see the market, dow down 100 poins,s s p off slightly, that anyone is saying theres a huge shift in thinking its important to keep in mind, we have had quite a run. We havent had a down 1 day in the s p 500 since october 10th thats a very long time ago to not have seen any real serious intraday volatility meantime, equity hit a record for 2019 youve got like this backdrop of not a lot of people bearish. You get one Monkey Wrench thrown in everybody says okay, ill take a little more off. Dont make anything more of it than that. The president leaving air force one, visiting a plant in austin, texas, with tim cook, ceo, where apple products are made its not an appleowned factory. Nonetheless we are sure to hear comments from the two of them on trade and no doubt the president will be pressed on impeachment proceedings as well. Lets begin, though, to summarize todays headlines with trade. The headline that sent the market lower kayla tausche. Hello, kayla. Reporter throwing cold water on that phase one deal to happen this year. I spoke to three sources who are close to talks who said that the deal is in trouble, that u. S. Officials believe china is asking for a disproportionate amount it was supposed to deal with a limited amount of things and the amount of tariffs china is asking to roll back has simply difficult for the u. S. Side to swallow. What does that mean for this deal going ahead its difficult to know what the president views as his position right now. He said yesterday he could make tariffs even higher if he wanted to although white house officials have been trying for the last several months to reach a point in negotiations where they could avert any additional tariffs or tariff hikes but it seems that may be difficult if there continues to be an impasse of this size, as we believe it to be the biggest question is whether those december 15th tariffs will go into place. Thats something that you can believe tim cook, the ceo of apple, will be discussing behind closed doors with President Trump, as he has done half a dozen times before. Meantime when you have lawmakers in the Senate Passing bills centered on hong kong as well, is that adding to the tensions and trade talks reporter well, its certainly a shot across the bow and doesnt make discussions any easier weve seen manitierations of this scenario where theres been a complicating factor, adding entities to a business black list as these talks are about to take place weve seen this play out many times before the position of the white house has always been that democratically elected lawmakers are able to do essentially whatever they feel the need to do on human and political rights, as they are in this case white house is keeping trade talks on a separate talk of course, thats not how they do things in beijing. Kayla tausche, thank you. Full Team Coverage of President Trumps visit to austin, texas ayman is in texas, mike santoli is looking at stocks amid the trade war. Eamon, to you, first, in texas. Im in texas, the president has landed in texas, making his way to that thirdparty contractor where apple manufacturers a lot of those mac pro computers, highend, 6,000 plus desktop units theyre making here in austin, texas apple is investing heavily in this area, and this area is important to the company its also going to be important to the president today you can imagine that tim cook will want to get some clarity from the president on exactly where all this trade negotiation is going i asked the president a couple of weeks ago whether or not we were definitely going to get a phase one deal this year he said well see. The president has been very noncommittal about the idea of getting to a phase one deal this year specifically. The president is going to see some protesters along the way. Were told there are pro and antitrump protesters lined up along the road outside the apple facility and also alex jones, the conspiracy theorist, is there, making his points very publicly as well the question is what were going to see inside the room we dont know the answer to that yet, guys. Will they make remarks what will we hear from tim cook, from the president all that have is still to be determined stay tuned. As you said, some protesters and supporters there as it relates to the president what about as it relates to tim cook and apple because of this meeting with the president well, we dont have any reports yet of pro and antiapple protesters necessarily. Alex jones, the conspiracy theorist, is criticizing apple on site there and suggest suthing apple ought not to bend its knee to the Chinese Government that is supportive, relatively, to the president s decision. Tim cook comes from liberal Silicon Valley, has hosted a fundraiser for hillary clinton, not known to be a prominent republican, although he has given some money to republicans in the past. But threading this political needle while getting what he wants from this president , which is excluding from these tariffs, will be a very big challenge for tim cook in texas today. Eamon, thank you for that josh lipton has a closer look at apples supply chain where most of the products are made and assembled. Josh apple will assemble the next generation of its mac pro there in austin. The mac pro is about 1 of the companys revenue over the next 12 months. Its not a big mover for the company but monster says it is a strategic win, he tells me, in that it creates goodwill with this white house, given uncertainty around trade tensions and tariffs over the next quarters ahead. Apple designs and engineers all its products here in the u. S. In cities like cupertino and there in austin. Its not surprising apple is building this new 1 billion campus in austin most of its components are assembled in china, putting together parts of iphones and ipads. Its hard to see that basic Assembly Line work coming back here to the u. S. The value in certain advanced manufacturing jobs apple has invested in Companies Like corn iing. Back to you. Josh lipton, thank you. I think its a village, like 1 of apples revenue were going to have manufactured in the u. S. , just to please a certain type of politician who is selling that nostalgic story to their base. The big picture is apple is 600 billion in revenue the last five years or so. 250 billion in profits just from the iphone alone and that would not happen if that phone were being made here. You wouldnt be able to afford it so i get why tim cook is doing that its great hes doing that for apple shareholders, keeping the company out of the crosshairs of the politicians, but i dont think its an investor story if they make more or less here or there. I think truthfully, this is really going to focus on services and the profitability iphone fortunately both of those things are going in the right direction right now. Shares of apple are down 1 right now. Mike santoli has todays dashboard. Ill pick it up there unfazed, ultimately, by the trade war. Apple investors have won ill take a look at how that was along the way, though. Risk on switched off at least temporarily. Well look at that from a few different angles bulls, when there are too many, get cowed in the market and a dog named sparky, couple of different retail mascots well talk about twoyear chart of apple shares it encompasses the entirety of the intense part of the trade war here now these arrows right here, those are times when there wasnt a general escalation of the trade war. Thats often coincided with periods, for example, this past may and august when apple shares took a dive along with the entire market. There also has been times when, for example, the president tweeted he just met with tim cook and it was scene as conciliatory, the stock was able to rebound there over time, the president has mentioned price may go up because of targets you better get out of china, make your stuff here that was a threatening tone. Theres another look at this, which essentially fills it all in what you come away with, though, is this idea that there has been drama. Early january, apple did blame poor sales in china on, in part, the trade war. That was the climatic blow of this phase four. We get phase one announcement october 11th, latest upleg in apple shares above the former highs as all happened there. A lot going on with apple besides trade stuff. A crowding at these Big Companies and all the rest of it if nothing else, apple has side stepped what could have been, i guess, a worse situation when they were in the crosshairs of the trade war. Mike santoli, thank you to that point and certainly looking at that chart, josh, i realize apple has been moving to fresh record highs on a pretty regular basis in recent weeks. The fact that were seeing stock under pressure today, is it trade uncertainty here, or do you think its Something Else . I think sometimes stocks just go down. Like we look at a recent headline and tie the two together it doesnt mean its true. And i think like it will be interesting in ten years, well run a portfolio, like a scan if we have another trade war. What were the best performing types of stocks in the last trade war . Apple will come up on that screen and well conclude hey its great to own Hardware Companies in tech during trade war. Arguably the most important stock in the world happened to have threaded the needle, as it was put by, i think, mike perfectly. So, the story here is this company has added hundreds of billions of dollars to its market cap since the trade war started. Sometimes these things are completely unrelated and i think thats the case right now. S p down 0. 4 weve got about 47 minutes left of trade. Coming up next, lyft cofounder john zimmer will weigh in on the companys stock plunge. The stock sundayvalued and weve had three quarters of beating expectations and over time people will see us put up more numbers and it will solve itself. An exclusive interview, including his thoughts on competing with uber, coming up after the break. Cant wait for that. Plus, target surging to record highs on the back of earnings and on pace for its best year since the 1970s. All the big movers and another wild day for retail. 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. brakes screeching okay. So, today youre going to leave your phone with a guy named flip. ding but its more than your phone, its your business, your customer data, your sales figures. And who can forget, those happy hour selfies . Not flip. honking, gasping this isnt working. Introducing samsung Business Security solutions, with knox software. With the galaxy note10, you can remotely wipe data or lock phones, so your business is secure even when your phone isnt. Samsung business solutions. Even when your phone isnt. It also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. S. Target hitting an alltime high, raising its fullyear guidance best pace since 1975 you can see right there, shares are 14. 5 . Shares of lyft under pressure today theyre down at the moment ill give you that in a moment the stock, though, down about 40 since it went public, down 0. 3 today earlier today, i sat down with lyft cofounder john zimmer, at the Telecom Conference here in new york we discussed Ride Sharing Companies and the competition that lyft has faces during that rise. When we came into the market, it was a new category of transportation we started peertopeer transportation we initiated kind of that new category since then theres been a lot of competition in the early days, some rational, some irrational were heading into a period of profit focused on profitable growth and rationalization i think it makes sense that theres some consolidation. Uber is your main competitor here in the u. S. Is it harder to steal a passenger from them or a driver from them . The way i think about it is on the customer side, we are competing. I would say more than we are on the driver side. For drivers to be able to have access to both platforms for us in a newer market, thats advantageous that they can put some hours on one, some hours on the other. On the customer side, its all about how can we provide the best product experience and thats, i would say, where the competition is more heavy. Since becoming public, have you felt more pressure to hit profitability as opposed to just hit Revenue Growth in the past yeah. I think thats definitely the case theres been, you know, outside of just our industry, theres been a market shift that i would say is healthy and has also been fast, focused on profitability it makes sense again, its increasing rationality, which is positive for both players. Clearly a big future possibility for your area of business what makes you confident that when that shift happens, whenever that might be, that youll be able to capture a large portion of the economics versus what you do today if, say, wemo, for argument sake, is the leading tech why wont they claim more of the economics than you will . We have 25 million active riders on our platform today the way this will roll out will be gradually think about 3g on phone networks went from 3g to 4g, i think something similar will happen. It wasnt that 4g was everywhere all at once. Autonomous wont be everywhere all at once. When will it be in an urban core 35 miles an hour with no bridges, tunnels and in good weather, thats sooner than everywhere willt will do 10 of rides, 20 of rides, 30 of rides but the customer wants 100 of their rides fulfilled. They will come to us because they can get Autonomous Vehicle for 10 of their trips and a driver for 90 of their trips. Therefore, we are positioned as the network to best capitalize on that future. Do you accept, though, that as things stand, at least, youre going to have to rely on an external Software Provider more so than uber might and, therefore, in that holy grail age of all Autonomous Vehicles your margin might be lower because of that . No, i dont accept that we have better partnerships and, i would say, a better team executing on our own selfdriving system. Fair enough we were just talking about how none of my friends back home have even heard of lyft. Do you fear, because of your focus for strategy, that if and when you do expand geographically, youve lost a little bit of the runway, if you will, because you dont have the Brand Recognition . Uber launched before us they launched with the black car product. Seven years ago when we were launching, everyone asked that question of us weve had a track record of going over 30 marketshare when people said youre never going to survive this this market. Thats how weve goen up and something we can exercise on. How much of if is it versus a when it is a if. Market by market, weve launched canada we have u. S. And canada. By launching canada, it gives us the product platform that we can do currencies and other languages. I think about it more like a call option. We are focused on north america right now and well make that decision in the future. Want to talk about the law in california 91 of your drivers in california drive less than 20 hours a week, 76 less than ten hours a week is that new law bad for those drivers . Yeah, thats what weve heard from those drivers we also have only 1 of drivers drive over 40 hours a week i think what were dealing with is that the way labor law has been written historically in the United States is that you have certain protections that are good for workers that only apply to the employment category like discrimination protection, wage protection, things like that, that dont apply for independent contractors. They should. And so similar to how we created new category of transportation, my belief is that well be able to create new protections while maintaining flexibility for drivers. If you were to force all drivers into kind of the employment category, those drivers that are using this for supplemental income would likely not be able to use the platform because we would have to move more toward a shift model. So i believe there is a balanced approach that were talking to legislators about that eventually will come to fruition. So is that law, meantime, short sighted . I dont think its beneficial for me to comment specifically on that law. I think a better solution is possible. Uber story today has considered rolling out audio recordings of their drives, the routes is that something you would consider as well absolutely. Well look at all different safety measures. We were the first. In the early days we instituted a criminal background check, driving record check, we do continuous background checks were always looking to innovate around safety. I noticed recently that food delivery apps like grub hub are clearly struggling, stock prices have collapsed lately. Very intensive competition how low would the price have to be for a company like that for you to consider buying it . Not interested. We are focused on consumer transportation that may have an interesting market food may have an interesting market at some point in the future to us, it is extremely different. If it is part of someones transportation wallet, we are interested in it if it is within the consumer transportation use case, we are interested in it outside of that, we are going to stay very focused and we think thats paying off. My final question, john, was related to share prices. Given all the stresses weve seen with the particular example of wework, do you feel guilty in any way, the way you sold the company and the stock price now down from some of those investors that bought on day one . Look, i care deeply about every investor over our course of history, weve made a lot of our investors a lot of money i care about our employees that have jobs from us and equity from us. I feel a deep responsibility three quarters of beating expectations and, yeah, over time people will see us put up more numbers and it will solve itsel itself. Guys, to that point, since they listed they have done what they expect possible beat expectations and clearly their focus is just ride sharing in the u. S it sounds quite sensible when you hear it explained in those ways still Unanswered Questions long term regardless, the share price is down part of that, i guess, is the broadway that the regardless of whether theyve done what they said they would or not. First of all, its super impressive that this man in his 30s has managed to build what he has built, provide all these jobs for people. And john zimmer as well. Yes and people well done, sir and people who have invested in ground series, a series, b, they all earned money its not this guys fault that he brought the Company Public at the valuation that it had been bid up to at private market rounds are you going to do a down round because you think its more responsible . Of course not. Its not the way the game works. Its also not his fault that the whole world has changed. Since he became public this spring, the way we think about these companies, were not talking about tam, total adjustable market. Were not calling a taxi and limo company a tech company. Its a taxi and limo company, a 10 billion one, but thats what it is, not tech stock. The whole world has changed the way it thinks about. Part of that is not its fault. Its uber, wework, other companies that had been more badly behaved. Hes caught up in that very little we could do. This stock remains under pressure because of tax law selling. Nobody has a gain in it. And its not going in his direction. State of new jersey last week just decided these people are employees, not contractors and hundreds and millions in back taxes are owed investors dont like to see that. I think its fascinating, the fact that lyft would be steering clear on food deliveries. Terrible business. The fact that uber has doubled down that will draw a line in the sand. I delivered food already, believe me i delivered chinese food in the 90s nobody gave me a 10x valuation on my sales. After the break, baby yoda has quickly become a viral standout from disneys new series lten, the streaming wars have wel ll you the name they say could out last the competition, when we return so servicenow put your workflows in the cloud, huh . Mmhm. Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. 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. 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 ive been dying to sing this line. Do it. Now its time to get word on the street i actually cant do it after all these years, youre still the one. Thats what fitzgerald is saying on Johnson Johnson my singing version was only for josh and morgan, thank god expansion as well as upwards earnings revisions, the stock is up 1 today. K keybanc capitol markets on at t. It doesnt expect hbo max to have the appeal of a Brand New Service and that its 14. 99 a month price makes it uncompetitive with cheaper rivals down 2. 41 today. And begun, the streaming wars have thats according to cowens latest note. Firm says the growing battle in linear could be, quote, another 30 years war due to younger demographics leading to a shift in consumer practice cowen expects netflix to maintain leadership due to its depth of content compared to emerging competitors we talk about the streaming wars every day, josh. How do you see it . Whoever has baby yoda is going to win this thing, so shania twain. Its funny were going to unbundle and subscribe to nine of these streaming services and somebody will find a way to smoosh them all back together and well pay that so it will look like cable but it wont quite be cable cable stocks have been on fire all year because, of course, whats going on is people want the pike, the wifi theyre paying up for that 5g is coming and so there are many ways to win a lot of people thought the cutting cord thing would be a death sentence but look at charter communications, one of the best stocks ive ever seen in my life and, of course, comcast Parent Company of this network. Many, many, many winners here. On the content side maybe there will be five big winners i dont think theres going to be 20. I mean, its tough viacom, i dont understand where theyre going to be in the overthetop streaming app who will want nickelodeon and mtv . Who will pay for that . Maybe noe nobody. Hoim ads theres been and subscribers to disney plus hbo subscribers fell thats a clearly different argument 14. 99 versus 6. 99 its a different headwind versus the others. And people are going to pay less thats one of the points made in the note yes, its great, all this adoption, but its at a lower rate than what all these properties are accustomed to getting. Michael santoli made that point last week on the show. A really salient point the companies in the business of creating and distributing content have to do better than they ever have top line revenue will not be as strong as it would have been for making that big of an investment in years past, given the way that were getting these apps for 6. 99, 9. 99 tougher business with Higher Expectations and that means there wont be ten winners. Netflix board member and founder and ceo of zillow coming up later on in the show. Weve got 20 minutes left of trade. Key things driving the action, stocks have dropped. Phase one trade deal may not be completed this year. Retailers from yesterday, and fed minutes out this afternoon officials saying little need for further rate cuts. Third round of public impeachment hearings are under way in washington. Lets get over to ylan mui ylan reporter the hearing, at times, has turned volatile not just between democrats and republicans but between lawmakers and ambassador sondlan sondland. When the meeting happen again . Never did. You dont know who was in the meeting . Which meeting are you referring to the meeting that never happened, who was in it . They get the call. They get the meeting they get the money its not two plus two. Its 0 for 3. Reporter meanwhile, democrats have been frustrated by sondlands overall lack of recall remember, he already had to amend his official deposition once after his memory was refreshed. Weve got a doozy of a statement from you this morning. Theres a whole bunch of stuff you dont recall whoow all due respect, we appreciate your candor, but lets be clear of what it took to get it out of you. Reporter that hearing meeting is finally wrapping up after more than six hours. Dont worry, a second hearing is scheduled to begin at around 5 30 mi over to you. Thank you for keeping us up on the proceedings lets get over to sue herera now for a cnbc update. Hello, sue. Hello, wilf hello, everyone. Pompeo Holding Meetings in brussels commented on the ongoing impeachment hearings in the house. Im not going to recuse myself from this i know exactly what United States policy was with respect to ukraine i was worpging on it im incredibly proud of what we accomplished we delivered incredible outcomes for the ukrainian people and hope we are able to continue to do so. Reporter all israeli settlement activity is illegal and erods the viability of the twostate solution and prospects for lasting peace uk Ambassador Says she was speaking in new york on behalf of the european members of the u. N. Security council. Our position on israeli settlement policy in the occupy Ed Palestinian territory including jerusalem is clear and remains unchanged. All settlement activity is illegal under International Law and erods viability of the twostate solution and the prospects for a lasting peace. Very busy news day. Youre uptodate. Thats the update, guys. Ill send it back downtown to you. Wilf see you next hour. Weve got your last chance trade and later some big guests for todays installment of our watch this space series. Chairman of Virgin Galactic will join us with his direct listing of Virgin Galactic as that went public. As we go to break, Treasury Bonds pulling back on the report of pessimistic headlines tenyear, 1. 74 . Closing bell will be right back 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. Let me tell you something, i wouldnt be here if i thought reverse mortgages took advantage of any american senior, or worse, that it was some way to take your home. 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S p 500 over overseas equity gauges all stock markets outside the United States besides the United States and eem is emerging markets. Off the lows in october. Global stocks had led the way. Just in the last couple of weeks or so, that has tapered off as the u. S. Market has clicked on to new highs doesnt mean it undercuts the nature or strength or voracity of the rally weve had but it shows you it wasnt all full global cyclical trade within the u. S. Market, some different sector and style bellwethers right now. Transports, banks, software and biotech. Theyve just gone vertical in the last week or so. Youve seen a little bit of a rolling over or flattening out of the banks again cyclical trade did get revived. What its implying about the market isnt clear there are lots of different ways to get to higher stocks, but everybody decided cyclicals in value are the way to go. The market did a stutter step. That possibility about Global Growth improving or not getting worse, thats started to be consensus to point people to that japanese export data down 9. 2 year over year, the worst reading for three years. I guess there are still question marks. As global yields, also, come in off their recent highs. Exactly. Yeah. Well see you again a little bit later. 17 minutes left of trade down 132 points on the dow around about 0. 5 for both the dow and s p, nasdaq. Last chance trade up nt. Ex is your daily commute. D bes you should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. vo thewith every attempt, strto free itself,piders web. It only becomes more entangled. Unaware that an exhilarating escape is just within reach. Defy the laws of human nature. At the season of audi sales event. Im a regular in my neighborhood. Im a regular at my local coffee shop and my local barber shop. When you shop small you help support your community from after School Programs to the arts so become a regular, more regularly. Because for every dollar you spend at a Small Business, an average of 67 cents stays in the community. Join me and American Express on Small Business saturday, november 30th, and see how shopping small adds up. Welcome back weve got 14 minutes left to go. Josh, whats your last chance trade . Im going to throw amazon at you. Look, this is the type of stock you hear over and over again from people. They say if it ever pulls back, im going to buy that thing. I cant believe i missed it. Ive been listening to that, i dont know, for 18 or 20 years from people. This is what i would tell you. It is 15 off its high does not look great right now. However, its sitting just above historical support this is where i would take a shot put a stop loss in just below that support level, 1660, 1670, risking 3 to 5 on the trade youre going to know if youre wrong very quickly youre going to be taken out of this trade with a very miner loss if youre right and this thing heads back up to the highs and it follows with alphabet, apple, microsoft, this is a Good Opportunity to buy it. Theres a lot of skepticism right now about whether or not amazon is doing as well against its competitors as it once was fun fact, this is probably the first year in a long time amazon has a sub s p 500 yeartodate return look at the yeartodate return in target, costco, walmart these were leftfordead names a year ago long side for a stock you may have missed for a while. Shares of amazon down half a percent right now. This is the last commercial break were going to take before the close. Well bring you uninterrupted coverage for the final minutes of trading when we take you inside the market zone thats next. Zillow ceo rich barton, netflix board member, his take on how both coanmpies are handling disruption, ahead when you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. 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. Welcome back weve got 8 1 2 minutes left in the session. Commercialfree coverage of all the action as we go into the close. Mike santoli is here to break down those crucial moments of the trading day. Today weve got josh brown here as well. Lets start with target, though, leading the s p 500 after beating estimate this is morning, raising its fullyear guidance todays performance is in stark contrast from some of the retailers that recorded yesterday like kohls and home depot. Ceo telling becky quick this morning that business looks healthy. Traffic being up over 3 is one of the most important indicators for me. When i look at the health of our business, when we have traffic growing, i know were winning footsteps, were getting more footsteps in our stores and more clicks to our site and thats really the indicator of a Healthy Business for us. Mike santoli, were having this conversation about the stay of the consumer, health of the consumer yesterday. Yeah. You look at these numbers today versus what we saw yesterday, is this really more or less just a sign of the fact that there are very clear winners and losers in the sector i do. Both days confirm that essentially. Even home depot, to say it wasnt about the Consumer Conditions themselves, the target thing is kind of amazing, though if you look at that chart this year, each of the last three quarters its had this tremendous vertical move in response to numbers and then its held those gains until the next one. It shows you theres a reservoir of doubt they can continue to pull it off and have these great numbers quarter after quarter. Its getting revalued. If youre macys, you should be studying the target playbook. Theyre more apparel, whatever, but this is an 80 billion company again acres meaningful American Company macys has to do whatever theyve been doing there. I was going to ask, can they do that or is it still late now . Are target the walmart the last two that can fight back against amazon i dont know but macys has built a Fulfillment Center for people to walk in and pick up online memos theyve gotten the memo. Can they have a meaningful app experience, bring the whole thing together target recognized this early enough so did a few other retailers, but not most. Six minutes left. Down half of a percent shares of lowes are higher after reporting. Courtney reagan has the details for us hey, court. After both reporting results, the results themselves werent that drastically different both missed consensus for revenue revenues competing teams app has more than 20 million active users. Saying the selloff was an overreaction instead, quote, its far too early, given the market consists of hundreds of millions of users. Slack and Microsoft Teams have room to do well in a few moments we will be joined by slack investor. Another slack investor, we should point out. Another slack investor. Im collecting quite a capital loss in this stock listen, what microsoft is doing is validating the category microsoft wants in on this so badly. Ask yourself why why . We have 11 million users, now 12 million users. They want to be in this space. That should tell you what you need to know about how important collaborative, corporate and team tools are going to be, going forward. I think its very early. I think there is room for more than one player. By the way, a funny thing going around on social media top searches related to Microsoft Teams on google are like how do i block teams from opening, how do i stop teams from integrating its not a great product, no offense. Shout out to microsoft but people dont like it people that start using slack havehigher engagement based on every metric and that will continue. Youre a big longtime believer are you topping out . Should people wait i added in the high 20s dont listen to me anymore on the stock itself, but i think ill be right on the company and long term will make a lot of money. Dumpster fire emoji. Oh, well. Mike, have you more on the internals . Tenday chart of the s p 500 puts todays action in a little bit of an interesting context. What you see over there last friday we had a gap opening, that sort of jumped when we got pretty decent trade news, whatever it was, from about 3097, up above 3100. All we did with this pullback was closeup that gap, technically speaking it happens on charts. We went back to that level you kind of bounced off a little bit. Didnt do much to disturb the overall picture of a market hovering close to its highs. Kind of weak today giveback, up versus down stocks on the New York Stock Exchange is to the negative side. New lows, stubbornly high, almost every day more than 1 lows today i think that shows you theres an underselling. 2 00 left of trade. Lets get over to Rick Santelli for a check on bond. Thanks, wilf. October 22nd start to bonds, long end of the treasury curve, you see that lull on the left side, that was made right after the feds last meeting zoom, zoom, zoom it back a month, how precaresly we are sitting here, one basis point away from that right after the fed meeting. What about the fed december, the last fed fund futures contract of the year boy, look at this chart. How flat and strange is that when you zoom it out a bit, what youll notice is expectations for any fed activity flatlined after the last meeting bertha, we lost profits on the week with the nasdaq. We are seeing those expectations for trade progress continuing to flatline as well apple is the biggest drag here, not getting any kind of lift from President Trump, touring apple manufacturing facilities in texas with tim cook meantime, take a look at biotec today. One of its rare genetic drug treatments approved by the fda, stock surging on that news net will be somewhere around 440,000. Pot stocks are higher as well, one day after the Senate Committee voted to decriminalize pot. A crowd standing right behind me here, its taken about a year but bristolmyers has finally received clearance from ftc for the acquisition. Bristolmyers will be buying seljean. They got 7 million shares a day. Theyll do over 100 million. Thats how much volume is created when you get these kinds of acquisitions. Theres the closing bell well off the highs s p closing down 13, dow jones average down 120 welcome to closing bell, everyone im wilfred frost. Im Morgan Brennan in for sara eisen along with mike santoli, senior commentator. Down 0. 4 for the dow, s p, nasdaq down a little more, 0. 5 , russell down 0. 4 . Utilities outperforming and closed meaningfully high Communication Services and materials all towards the bottom. Josh brown, ceo of Wealth Management is still with us, liz young, director of Market Strategy of bny melon. Mike santoli, lets start with you. Off the lows of the session. Got a little bit of a test, right . The headlines about maybe were not going to get this phase one trade deal by the end of the year and the market leaning into that, as everybody has been observing, looked a little bit stressed, sentiment was complacent the top started to spin a little slowly after a few days, just kind of sitting there. It was knocked over. Didnt change much by the end of the day. Market kind of held in there bought this little dip, at least on the initial move. It doesnt change the overall picture. Although a slightly more defensive tone creeping in parts of the market. If we didnt get a phase one deal this side of christmas, do you think that would damage the market no, i dont think it would damage the market too much after so many days of record high after record high after record high, to be honest, i was nervous about that i dont mind a little bit of a pullback here. The market is still pricing in a trade truce and any delay on a phase one deal will give it some trepidation. We didnt end down that badly. Nothing to be that excited about today. What happens if we do end up getting these tariffs again in the middle of december the market wont like it. The selling will be mechanical it will be human it will be everything in between. But i think liz has it right, where what you dont want to see is everyone to say oh, were going to rally and we have this thing figured out. I think liz nails it, like you dont want that level of complacency where people just wake up, stock market up a quarter of one percent, next day repeat, next day repeat. That may be over i think its healthy for them to be excited about if its trade i would rather that than nuclear war. Would you like to see a couple of days of bigger pullbacks to feel like weve kind of got over the i get what youre asking. I guess i would just answer what i want doesnt matter. Right but to your point in your notes earlier, we havent had a 1 down day for. 29 sessions. Now 30. 30, thats right. I wouldnt say its abnormal but stock market historically makes a new high on 8 of all days so should we have 20 Straight Days of new highs . Probably not were not quite there. Stocks are holding up, though. If you look at the new high list, michael referenced that. Theres still companies producing new record highs, including some of the biggest, most important names in the averages. Its not clear to me that people got so aggressive and essentially so optimistic and so positioned wrong that we really need a brutal shakeout to undo some of that you never know to scale it, if you went down 3 or 4 from the highs, still didnt do much to do anything for the trend in august. We closed well off the lows we did get a big intraday pullback around lunchtime on the report that one part of the trade deal with china may not get signed this side of christmas. Kayla tausche has the latest for us hey, kayla. Hey, wilfred. Reuters report, meantime ive been able to talk to four people who are close to talks, who suggest that the deal is in trouble because there is not an agreement between the u. S. And china, even at this stage, on which tariffs would go and which tariffs would stay, that there had been a proposal by china that any sort of tit for tat would need to be proportional. The u. S. Wants china to remove more tariffs than the u. S. Is willing to remove on chinese goods and therein lies the problem. One of these people close to talks suggests that tariffs scheduled for december 15th are on track still to be shelved that those should be averted at all costs. Of course, the hardest part in this process has been selling the president on that argument wilf kayla tausche, thank you. Liz, going back to the conversation we were having, whatspriced into the market here, complacency or lack thereof, how should investors be positioned is it time to take profit in semi conductors that are tied to trade . I dont think its time to take profits right now going into the end of the year, the biggest negative surprises for the market would be that the december 15th tariffs go on as scheduled. The biggest positive surprises would be that they dont go on as scheduled and we get some kind of rollback in the tariffs that are already on the table. I still think through 2020, the market could continue to go up i keep saying grind higher its probably going to feel worse than it ends up being. I still feel that theres upside across the board and certainly some sectors will get hit harder than others on negative news but we still have upside in the u. S. Market. We are still waiting for the president , tim cook, at an apple plant in texas no doubt the topic of trade will come up in conversation. Mike, looking at some of the other factors today, whether its the bond market or the vicks, whats your take there . Yields have pulled back down. No real reaction to speak of from the fed minutes that came out. Although i do think that essentially on hold was already the message. Probably Equity Investors would like to see yields hold in here and maybe start to pick up a little bit and get higher. Down below 1. 75 is where theyve exited the panic zone from august and september beyond that, i dont see it as a decisive move either way i dont think theres a lot of edge. Turning back to equities, lets check in on the days biggest movers bob pisani has more on this. Bob . Ugly day for apparel, Urban Outfitters was down big. News around retailers have drug a lot of people down urban, l brands, abercrombie, chicos, all the apparel makers weak we saw 3m down, united technology, caterpillar down again not that badly overall if you take a look at some of these names. Really, banks have been dropping on yields for two weeks now and yet down today with jp morgan and goldman sachs. Modest declines, considering the fact that we really do not have any visibility on the outcome of trade talks at all everybody seems to be moving toward phase one, i call it, where the hope is at least no more tariffs december 15th maybe the market will be happy about that. Bob, thanks so much for that. Liz, whats your overall takeaway from retailers . We got mixed earnings numbers, obviously all the positivity that continues to go on still relies on the consumer. I think it will be more of a challenging holiday season, not only because its shorter but because if we dont get a trade deal the consumer will be a bit nervous on the sentiment side. Retail numbers, they can literally change on a dime i think its good we got some green shoots in there. Im not that concerned with retail. Josh, in terms of what has been continued to under dperfor, weve been very focused on the russell 2000 and the idea when is that going to kick into this rally but the transports have continued to get hammered. Whats the read through there, be it on the economy or whether you need to see that group kick in to weve had big s p rallies and big s p rallies where the transports have concurrently fallen the only thing i point out, this is an extraordinarily volatile transport index. This is not your grandfathers dow transports we could be at new highs in this index in five minutes. Like its really not a big stretch to say that this looks almost more like an oscillator than it does an average. Dont get i guess dont get too cute about are we getting confirmation and industrials, transports that stuff hasnt really been helpful in modern times. Dont worry about it too much. You dont want to see this average crash. Somewhere in the middle is okay for everyone. All right thank you for joining us today josh brown, liz young. Up next, our watch this space week continues with venture capitalist chamath President Trump landing in austin, texas, a short while ago. As we wait for him to meet with tim cook and tour the nucting plant the new mac book pro will be built at. At Southern New Hampshire university, we believe in education built for all people. [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Chamath palihapitiya, joins us now. You think the performance would have been different had it gone the route of an ipo versus a direct listing not really. In fact, i think the story of virgin is just so new, it hasnt even been written yet. The reality is that well start commercial operations in the middle of next year. So the fullfledged Business Value will become apparent a lot more quickly at that point everything that happens between now and then, quite honestly, a lot of people hedging, some people speculating the there there will begin in six to nine months. The performance does invite some speculation as to whether this direct listing model does really work. In fact, we went public to a reverse merger, slightly different from a direct listing. Youre bringing up a good point. Weve had one traditional model to go public, a traditional ipo. We know that one doesnt work. There are a handful of us, myself, bill gurley and others who are advocating for different approaches a direct listing is one. Reverse merges are others. And what youll see over the fullness of time, the next three to five years, is how well these things will perform. What youll see is a lot less volatility, a lot more value to employees, a lot more value to Retail Investors and just a more methodical way of company building, which i think is better. Taking a step back and looking at a broader market, you run a 2. 5 billion fund. Theres a new report that phase one of the u. S. china trade deal may not be completed this year what do you think is worse for the market, trade deal doesnt happen or Elizabeth Warren presidency, which liam cooperman said would lead to a 25 drop in the market. Leon has built an incredible life for himself but i think hes wrong i believe a war in presideren p buttigieg presidency, theyll all be fine just as historically speaking a Trump Presidency has been fine. The alarm is somewhat unwarranted. The much bigger problem would be lack of u. S. china trade deal. That kind of indecision is unnecessary volatility at a time when we have so much political churn. We have an impeachment process that, frankly, is turbulent and scary as a citizen and so watching that, i would like to minimize as much other noise as possible while this pl plays itself out. Back to the 2020 election, Silicon Valley tends to lean left these more progressive policies like the wealth tax from Elizabeth Warren seems to be gaining traction whats your view on it i love it. Is it good or bad i love it. You love the wealth tax why . We had nothing to comprehend, that great financial crisis. It was created by a small group of people that benefited a small group of people. The Global Community at large had to come to the rescue. And the only toolbox that we had was to take rates to zero or negative, which then gave rich people the ability to take a lot more money and put it into things on the hope that it would trickle down to everybody else that trade, that grand bargain, has turned out to be not productive rich people have bought art, unproductive assets. Individuals that should be making more are not. And so theres a very small sliver of people who will be deeply and completely affected by a wealth tax, which is not rich people but specifically rich people who own unproductive assets or rich people who have concentrated stock positions we should make sure that thats clear. Everybody else, all youre faced with is a decision if you have to pay 4 or 6 a year, can you compound at 4 or 6 a year to tread water sure. And i can so im not afraid. So youre not afraid of it . And im not trying to protect something that, frankly, may be something that represents a more substantial part of what i actually need or deserve in order to thrive. Youre not worried about the effect it could have on the economy . This is the grand fallacy as well if you look at marginal tax rates, top tax rates as a function over time and the impact on gdp, there is virtually no correlation people are starting companies when the top tax rate was 90 . People were starting companies when the tax rate was 70 . They started companies at 50 . They Start Companies today at 30 or 35 , because these are young, industrious people who want an alternative other than working for, quote, unquote, the man and that is independent of tax policy and so i think the idea that all of a sudden the united state stops on a dime because we go back to a large tax basis for the rich is kind of not true its not supported by facts at least. Interesting perspective morgan has a question back in studio. I do. I have a few questions for you, chamath. I want to go back to space for a minute lets start with Virgin Galactic service is expected to start next year. Youre not necessarily that phased by the selloff weve seen in the stock right now. When service does start, youve emphasized in conversation with me the profitability, growth margins. What will investors want to see given that Space Tourism is largely unproven i think youre right that its unproven but the demand has existed for decades. The supply hasnt been there to meet the demand. When america pioneered travel to the moon in 1969, the two years after that happened, there were more than 93,000 people that called at the time Panam Airlines trying to book a flight to the moon. P panam took those reservations we have 600 odd reservations, already, an order book thats been closed for five years i think the thing is that historically, over time, this is a thing that has captured the curiosity and imagination of many tens of thousands, hundreds of thousands and probably millions of people around the world. And starting the middle of next year, we will start to service that demand. For many years, it will be supply constrained so i think what you will see is businesses, ours and others who decide to get into this business, huge gross margins, longterm profitability, Competitive Dynamics that give us 10, 15, 20 years of durability its the quintessential highvalue asset you would want to own for many, many years. Yeah. And Virgin Galactic is certainly getting all the attention right now because it did recently go public youre invested in a number of other Space Companies too. Why are you putting money to work in the sector more broadly right now, what and do you look for in terms of investments . Broadly speaking, i have two other meaningful investments the first has to do with helping advance the rate of communications and bringing Highspeed Communications all around the world, just to use somewhat of a sad example. When that Malaysia Airlines flight disappeared off the face of the planet, you know, im sure that there were some people, me of one, thinking how is it possible in this technological age that something as large as a plane with so many people can just disappear off the face of the planet and the reason is because our Telecommunications Infrastructure is relatively brittle. Its very costly, and it only covers an enormously small part of the world and so i set out with some people that i was able to meet on trying to solve that problem. And so this is a group of people that are building ultra lowcost satellites that cost a few thousand dollars at a time they can create ultra Fast Communications very cheaply, and it will allow us, with thousands of satellites, to blanket the earth so that things like that never happen, so that cargo all over the world can be tracked. And so thats an investment. The second major investment is one that acknowledges the fact that we want more companies to get us off the planet by being able to take rockets, build machines and get to planets or orbits or what have you. In order to do that, one amazing thing that you can do is actually take all the advantages of 3d printing and apply it to rocketry thats what weve been doing, an enormous warehouse in los angeles, weve been printing rocket fuselages and these make that endeavor a fraction of the cost that anything thats come before it. And for tens of millions versus hundreds of millions or even billions in the case of nasa, you can get many hundreds if not thousands of rockets. I wanted to quickly go back to Elizabeth Warren, if i may. I thought absolutely fascinating, what you were just saying there, in defense as it were of the idea of a wealth tax. I wonder if you would go any further than that, to say you actually support senator warren specifically, would you lend her your support verbally or financially . So when all of this started you can see the s. E. C. Filings i donate to Elizabeth Warren in june i was very clear when i did that, i said i dont necessarily support all of her policies but there was one thing she did which at the time no other candidate had done, which was actually write things down and sometimes, especially as an investor when youre trying to think many years and decades out into the future, its frankly very helpful when you can take things from the state of being unknown to the state of being known. And even if i disagree with things that she says some of them i do disagree with, some of them i agree with. But knowing where she stands is much more useful and helpful than having someone who can, you know, be somewhat volatile, unpredictable and change their mind constantly. Because that sort of indecision is not helpful for the process of capitalism and democracy to really flourish. You tend to want to know where you stand. And so i supported her in june now, whats interesting is since that, you see two specific people really emerge, one in pete buttigieg, who i cant say i really understand his policies as well, but thats my fault not his. And the second is mike blomburg, who ive been a huge fan for a very long time who has come out and said hes actively considering a run. I dont know how i would underwrite my decision of june to be honest mike is an exceptional leader and thoughtful and purposeful. And i think pete seems to have captured the imagination of the young and people who want somebody with a complete fresh face and who is also moderate. But Elizabeth Warrens proposals, some i think are a little farfetched sbun likely, like medicare for all, but i think its representative of a growingly modern and centralist point of view, which is that the ultra rich have probably captured too much of the wealth without putting it into productive enough assets to help others. Chamath, thank you. Seema mody, thanks to you as well for bringing that to us weve got a news update now on l brands. Hello, wilf mixed quarter for l brands, victorias secret and Bath Bodyworks two cents in line with estimates. Revenue, slight miss estimate had been 2. 69 billion, down 2. 3 from a year ago. Comps, samestore sales fell 2 . Looking closer at those retailers, bath body works, a strong suit for the company, thats up 9 estimate had been up 4. 3 . Victoria secret, however, down 7 estimate had been down 4. 2 . You can see the stock moving up nicely after hours on this news up right now, 2. 5 morgan, back to you. Thank you still ahead, we are waiting on President Trumps arrival at the apple facility in austin, texas, where the new mac pro is being built. Well bring you that live, once we get it. Thats coming up 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. 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Of course, its in austin, texas. This is the plant that will assemble the mac book pro. Its not, in fact, owned by apple but it will be the plant where its assembled weve been waiting for this for quite some time. Its been delayed partly because of a delayed departure from the white house. But also he has been at the facility for 40, 45 minutes. Clearly, having some private conversations with tim cook, the apple ceo. You can see the treasury secretary there as well as the president s daughter, ivanka trump. Facilities owned by flex as well another publicly traded company. They do some of the assembly and manufacturing for apple. Thats whats taking place here in austin, texas well continue to keep an eye on it and see what kind of comments get made by President Trump and tim cook, as they stand here and look at some hardware. Of course, were waiting, in particular, to hear any comments on trade we can expect some trade comments to come out of this, given the news flow of the day of course, the talking point that these two share significantly, theyve talked about trade many times before. No doubt they will again later also im sure questions will be posed to President Trump about todays proceedings on capitol hill of ambassador sondland. Eamon javers is on the ground in austin, texas, for us emon you can see the president with tim cook, looking at one of these mac book pros. The audio is not so good here. The pool is simply standing by theyre going to their best with those boom mics to try to pick up what the president and tim cook are saying. You can see the president getting a demonstration there. This is an opportunity for apple to present a platform for the president , to make his case for the company that his tariffs are working. In exchange, this is apples chance to make their case they dont want to be hurt by any more tariffs those parts made in china could all be affected by the tariffs in december 15th were less than a month away from a decision by the president that could affect apples bottom line phase one, the domestic politics, international politics, economic outlook, and tim cook is going to, you would imagine, do his best to persuade the president not to hurt apple in the crossfire of any of that. Its a dramatic and highstakes moment, even though it looks like a seventh grade science fair, as they go around touring these various stations one by one, explain iing all of this to the president. Theres quite a bit at stake in this factory right now, guys. Eamon, thanks for that. Lets bring in josh lipton, somebody who would be able to interpret what tim cook may have been saying to the president , had we had a microphone. Clearly, josh, it looked like he was showing him some Circuit Boards and other inputs to the mac book how significant is that mac book pro product for apple . The product itself, wilf, obviously apple is not going to break out that product for you according to some analysts, by their rough math, they think the mac pro generates 1 of revenue the next several months. You compare that to say that the iphone would be about 60 . I did check in with gene muster. His point was, despite that, it was still significant. He thinks it was a strategic win. Cook really stays in the good graces of this president and i think thats sort of an important point here this is apples chance to kind of emphasize, listen, were an American Company, an american brand. Weve got a big footprint. Cook does employ about 137,000 people hes building that new billion dollar campus in austin, 7,000 folks there. Thats growing about 50 in the next five years. Those are values that are important to this president and this administration. Still there, josh go ahead. Eamon was right those are values important to this president and this administration theyre going to decide whether companies do or do not get those exclusions for those new levies potentially coming next month. Josh, as we were showing the video there of President Trump meeting with some of the folks that are working on the production line there in that flex facility, it really kind of speaks to, i think, just how automated and high tech many of these types of manufacturing facilities like the one we just saw are as well when youre talking about electronics and products being made for apple. Yeah. So, its interesting you know, a lot of this work, app apple, remember, in terms of supply chain, if they do design and engineer their products here, the mac pro is different, though its being built here, too they are designed and manufactured here, assembled in china. That work is probably not coming back to the United States. The cost not just for apple but any executive would surge and therefore you either eat that and take a hit in your bottom line or raise prices and risk demand American Tech Companies do see value in more manufacturing jobs, at least more advanced manufacturing jobs apple has that big Manufacturing Fund where theyve been investing in suppliers like that, including corning. The impact of the topic of trade and how negotiations with china are going on apples share price. Fair to say it had a bigger impact in 2018 than it has in 2019 i do think that the market was clenching up in advance of any actual disruption. The other thing we sort of learned along the way is that apple is such an important customer producer in china that theres also tremendous imports for the chinese to continue to have them make phones and not impact the demand. I think theyre in a very good position to have their strategy more or less kept intact. Eamon, the live picture is up and running again. Im not sure what happened quite in the moments in between there. The president arrived how long ago . He is even meeting privately with tim cook until we saw him moments ago . Can we expect a press conference of some form to come or not . The president arrived about 40 minutes before this live, televised portion of this event began. We did not see him on camera during that time presumably, he had time to sit down with tim cook for a facetoface privately before we saw this public televised piece of this. We dont know that for sure. The president could also have been making a phone call or Something Else with president ial movement, you dont always know exactly whats going on, minute to minute the camera crews that are in the press pool literally chasing the president throughout this facility as hes moving from station to station, and theyre being readjusted on the fly. Youre getting pictures of reporters running down the hallway. Theres a scramble for reporters on the ground. For the president , though, this is about showing his message in a very visual way. You see him standing there, next to some of the workers at this flex facility. This is, again, a Third Party Contractor that works for apple, that produces these mac pro units. Those workers are here in austin the company says its got about 7,000 workers in the austin region now, and theyre investing heavily in another facility nearby, which is an apple facility that the company says its going to invest about a billion dollars in when all is said and done. So, this is a big footprint for apple here relatively as well. You see tim cook walking with the president , walking with ivanka trump as well, and secretary mnuchin, the treasury secretary. The opportunity for tim cook is to show the president that he can deliver, both on the pr side, in terms of this opportunity to be photographed in this facility that is making products in the United States, and also on the economic side, which is this is a company that is delivering for the u. S. Economy. Thats what the president wants to hear. Thats good for the president s message politically in 2020. And what youre seeing here is the physical manifestation of all of that. And its fascinating, wilfred. Eamon, is the expectation that President Trump and mr. Cook are going to meet with reporters afterwards and make some comments, after this tour is done . We dont know for sure. The president has done that in the past the president likes to shoot from the hip he has, in the past, when touring facilities, he has gone right over to the press pool and spoken to them directly. In other cases, he has not were not told to expect formal remarks here but anything is possible and i think the president is going to dictate that, depending on how he feels about how the event is going, the events of the day, anything else he wants to say remember, impeachment hearings are going on in washington, d. C. , and theres been some bombshell testimony today in the course of that the president extremely frustrated about all of that as he got on the plane got on the helicopter to leave the white house, venting some of that frustration, saying he simply did nothing wrong the traditional political advice here would be to the president , dont muddy your message speak to the economic message and deliver the political message somewhere else sometimes the president doesnt go by the traditional political advice, though, guys. Josh, we know that tim cook and the president have been speaking and, i guess, sort of developing this relationship since he was elected to office, going back a couple of years now. Just walk us through how this has evolved. You know, morgan, ive been interviewing tim cook every quarter to get his take on earnings its something weve been doing for years. Cook is a very easygoing guy in a lot of ways. Hes easy to talk to when youre talking with him, you can sometimes sort of forget youre talking to the executive of a trillion dollar giant so im not really surprised that he has been able to establish these relationships. He has clearly won over President Trump. He talked about cook, in his words, a great executive, because he said cook actually picks up the phone and calls him. In other words, works at that relationship cook has also made clear, he may work that relationship, he has put clear lines in the sand, though i thought it was really interesting yesterday. I listened to cook and Mark Benihoff speak cook was hammering home his own values, at times at odds with this administration, on a range of issues from immigration to the environment. But he has established that relationship with the Trump Administration at the same time, though, clearly still having a relationship with china as well. He travels to china. He puts the work in that country, too he has recently been named chairman of this Advisory Board of a chinese university. So really impressing people, i think. Not just an as executive, supply chain guru but clearly as a diplomat, too, guys. Were watching a recording from moments ago, given that the crew are just now following them into a different room, having to reset the camera well have a live shot for you back in a moment im sorry, eamon, pick up there. Im sorry, go ahead. I was going to pick up on joshs point about tim cooks personality and how easy going he is when josh is interviewing him. Folks at the white house tell me the same thing, that tim cook is a guy who comes over there, has dinner with the first family on a regular basis. He is somebody who has developed a Good Relationship with melania trump, a Good Relationship with ivanka trump, the president s daughter, and also jokes around in the hallways with white house employees. They talk about college football, technology they talk about all the regular joe things that josh is talking about, to give you the sense that you may not realize the import of the ceo that youre joking in the hallway with everyone ive talked to at the Trump White House describe tim cook as a very genial guy, who is very friendly and working the halls inside the west wing and inside the white house residence. Were just getting word that apparently President Trump has told the press pool that he will be coming back to speak with them i think once this tour is complete josh, to go back to your point that you just made about the comments from tim cook regarding things like immigration yesterday, weve been so focused on what kind of commentary, what kind of discussion could happen between these two leaders on the trade front, but how key could the immigration conversation be . Its such a big issue, not just for the Tech Community in california but for texas as well. It is an issue that is clearly personal for tim cook, an issue he feels very passionate about he talks about immigration a lot. Again, he mentioned again in that conversation with mr. Benihoff yesterday, he talked about daca, dreamers, how there are 450 dreamers at apple. It is a value to him, clear ly, and his company. And i think he threads that line, though, pretty carefully he makes sure that these are values that he stands for, his Company Stands for he also talks about the importance of the environment, sustainability issues. There are places where he clearly and publicly disagrees with this administration at the same time, he has been able to make his companys case. I remember President Trump came out, it was in that same conversation, where he talked about how cook was a great executive. Trump did also say, listen, he thought cook had made a pretty persuasive, compelling case about how these levees could disadvantage cook in his fight with samsung it will be interesting to see how that plays out, those levies we expect in december. Mac pro assembled in usa, interesting point, josh. I dont know if that will go on every single mac pro or oneoff one that the president was able to hold the outer casing on. If they start putting that on the mac pro, i guess it would become more clear that they dont put it on the iphone. The mac pro is interesting, because listen most of the components in that device do come from the u. S. There are some, though, that obviously dont. Thats why were having this conversation, because they did earn these exemptions, so they didnt have to pay those tariffs. But interesting to your point, wilf, that product is unique in a lot of different ways. Well see how far that extends. Eamon, what should we make of the team the president go ahead, eamon. You heard the president indicating to reporters, reporters shouting a few questions at him, indicating he would answer a few questions in a couple of minutes. Clearly the president wants to get through this tour first, but then it looks like he has something he wants to say and may take some questions from the pool of reporters traveling with him. Maybe on the intricacies of Circuit Boards which he has been told a lot about in the past couple of minutes or moments there. In terms of this pro, the mac pro, josh, that weve been seeing going around, it is a reminder, the size of it these massive screens, massive desktops anymore its a small product in terms of total sales for them. Thats true listen, the mac is not the focus, wilf, for investors, that obviously it once was. In that last quarter they reported their q4 result mac, as a category, made up about revenue of 7 billion, about 10 of the total they dont break out mac pro separately analysts dont think it will have some big material effect over thenext several months. Maybe it wont have a big Financial Impact but the very fact that apple can have this event, can have the president there, maybe signals that this is a company that continues, unlike a lot of tech rivals, to remain in the good graces of this administration as trade tensions and tariffs remain front and center in the quarters ahead that could be very important, obviously, for cooks company. Eamon, what do we make of the team that actually travelled to austin with President Trump . Treasury secretary Steve Mnuchin and his daughter and adviser ivanka trump and not, for example, commerce secretary or some of the other leaders . Reporter sure. This is the core of the Economic Team plus President Trumps ceo whisperer, i think you can call her, ivanka trump, who does a lot of event with ceos in terms of her workforce initiative. She is a regular face to the business community, the ceo community. She is somebody who has can connected directly with tim cook im told by the white house, they have a very good working relationship tim cook shows up for her Workforce Development events when he can. He has been to the white house for at least one of those in recent months. And so this is the vector in for tim cook is through the trump family not surprising to see the trump family there and Steven Mnuchin is somebody who is politically very close, obviously, with the president and associated with the president s economic agenda. It makes a lot of sense that he would be there as well but does it give you a sense of who is in or who is out . Who is in favor and who is out of favor inside washington we like to play those parlor games all the time in this case, i dont think we can fully say this tells us that somebody is in favor and somebody else is out of favor. Josh and eamon, stay close. Thank you for your input so far. Well continue to monitor this well bring you the latest, including comments from the president. First, we have a marketflash on tiffanys. Up sharply after hours after reuters report that lymh has apparently gotten their hands on tiffanys books and raised their offer. You might remember that earlier reporting had indicated that lvmh was interested in tiffanys but tiffanys was reluctant because they thought the offer was too low. Back then it was 120 per share. Theres no certainty that a deal with will, in fact, happen investors apparently like this news tiffanys is up 3. 6 on the news that lvmh has gotten access to its books and has since raised its offer. Morgan, back to you. Thank you mike, what do you make of this Courtney Reagan has report ed o this as weve gotten the news in recent days and the was maybe inevitable just a matter of price. It seems as if the market is warming to the idea. The stock went up on the news of the offer of the hostile the bear hug approach, whatever you want to call it. But the stock remains below where it traded in july. Clearly the market takes tiffanys reluctance to sitcom degree on face value its not both sides the motoring for a deal but if the offer is good enough it appears. Up next and later teslas big unveil, the auto maker set to take the wraps off the new pickup truck plus we continue to monitor the situation with tim cook and President Trump in austin, texas, at the apple facility well bring you the latest after e eak. I am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Robinwithout the commission fees. So, you can start investing today wherever you are even hanging with your dog. So, what are you waiting for . Download now and get your first stock on us. Robinhood. 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. In the human brain, billions of nefor people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. Texas. And tim has a couple of things to say, not only about the incredible product that is made right here, very, very unique product, but also about the expansion from this point forward. Only up to here but from this point forward and the nice part is he doesnt worry about tariffs. When you build in the United States you dont have to worry about tariffs. Helps people make a decision to come in. But he is a very special person as far as this country is concerned because of the great job potential and the great job that he has done apple the first trillion dollar company. And that was a year ago. Now its about a trillionthree, i think you said but apple is doing fantastically well were honored youre doing what you are doing. Horped to be here with you and its a special oh occasion and well be back. Thank you, tim. Id like to thank everybody for coming and joining us particularly like to thank President Trump, secretary mnuchin and ivanka and members of the administration. Im grateful for the support taking this day and et us this far. It wouldnt be possible without what you see hear the mack pro, 15,000 times more powerful than the original mac and can perform 56 trillion tasks per second 56 trillion tasks per second we couldnt be more proud of the product. Its an example of American Design and American Manufacturing and american ingenuity. We we want to thank everybody for coming and oh oh one other thing. This morning we also announced a 1. 0 billion investment, Ground Breaking for threemillion square foot site in austin about ten minutes away from here so view austin as a very key place for the future of our company. Its the second largest site in the world for us next to our home base in cupertino. So im hoping for obviously more investments to come. Thank you very much. So what tim was saying a while ago, he is starting the Massive Development also in texas, austin. But he is also said something to me about the american economy. Because he said you know all over the word and there is nobody more over the world than apple what would you say about the economy. I think we have the strongest economy. Strongest in the world. Congresswoman, please come over, our great congressman. And uts great to have you. I didnt see you in the audience here. Thank you, mr. President. So if anyone has any questions. What did you make make much ambassador sondlands testimony this morning. I think it was fantastic. I think they have to end it now. Just losing the shot momentarily. It has frozen we very much i wrote down exactly what he said. I called and he said, he asked me, where what should he do i said, i want nothing and i repeated it. I want nothing i want no quid pro quo tell the president as you know of ukraine, to do the right thing. And then he finished off he said this is the final word from the president of the United States so what did the president want i want nothing i want nothing ill tell you its a hoax. Its a disgrace. Its an embarrassment to our country. Nancy pelosi has done a terrible job as speaker theres never been a speaker thats done so little and she is totally incompetent. And shifty schiff stands up and tells lies all day long. Even with that, no due process we cant have anything and yet none of the wins today its over and some of the fair press of which there isnt much said this is over. So the president of the United States told in guy he is no i mean the question i asked and its the same question that a number of of the congressman have asked, why didnt he put this statement into his into his opening remarks . Its the most important statement there is for this country for our country to be playing this, were opening up massive apple plants. We have the greatest economy in the world, the greatest economy that weve ever had in the history of our country, the best unemployment numbers that weve ever had but we have a fake press and phoney press we dont have freedom of the press in this country. We have a phoney press theyre dishonest most of them process. We have final people final journalists reporters and companies but most are fake and phoney cnn, nbc, abc. Cbs. The washington post, new yor times. These are fake papers. Theyre fake press and they should be ashamed of themselves appear they hurt our country. And to be honest with you i think its a great tribute to all of those people in swing states and all of those people in this country we had an Electoral College as you know, congressman, we had a landslide, 306 to 223 we had a landslide and theyre trying to take it away because they cant do it fairly but these are bad people nancy pelosi is incompetent. She has gotten nothing done in congress and now with the big star witness, this was going to be the star witness just so you know i dont know him very well he is a guy that got put there. He wasnt on my side came to me, i didnt even know that came over to me after i defeated other people i defeated them all. But, you know, what, what really we have to learn from this whole thing is the press they ought to i was going to see. Pence, what. Weve airport lost the shot itsfrozen there. They shall be ashamed of