Transcripts For CNBC Closing Bell 20240713

Slowing economy. Joining us for the hour, stephanie link great to have you. What do you make of this market right now . I have fatigue over trade i really do. Its impossible every day it changes. So im trying to ignore it and focus on fundamentals. Today i thought we got some good data on the economy. The philly fed better than expected vince were better than expected meaning he they went own maybe were bottoming. Lets see the flash pmis tomorrow existing home sales up 5 yearoveryear good consumer, lets talk retail earnings have been very good Minus Department stores and some one office. I think that bodes very well for the consumer fatigue over trade but excitement over m and a. Very much so. Im still excited by trade. Im more excited about bristolmyers closed earlier than expected. Thats a great story for 2020. So theres a lot underneath the surface to this market of whats going on and thats what im trying to focus on versus trade. Lets get straight to that big story, the potential combination of two major online brokers, Charles Schwab and td america. We have a closer look at the landscape in light of this deal. Mike santoli is looking at the personalities behind it. And victor jones is also here. Lets bring with kate in san francisco. Reporter so this potential deal could add some new pressure for start ups like robin hood and stash. Thats not the industry norms. They need new ways to bring in new customers. Thats happening more through banking products some analysts see start ups as what they call a gateway drug. Traders graduate to schwab as their assets grow. M and a, expect more deals in private markets as these Brokerage Firms grow to what extent to the likes of Charles Schwab have resonance of brand name with some young people reporter the ceo said they were killing it with millennials and bringing people on but the they are actually already able to get that higher net worth. Younger person, they are looking to look more down market and this is clearly a strategy to get scale here and that comes with technology. It can increase either apps Like Technology capabilities, and also assets. They are absolutely going after that demographic all right thank you very much. Lets send it over to mike santoli for todays market dashboard which is looking at the personalities behind the brokerages Charles Schwab and Td Ameritrade seem like established legacy brands and companies. They are but still within the span of the first generation look at the stock charts before we get to the actualpersonal personalities of the founders. Charles schwab is up 13,000 versus 865 against the intexas. Schwab became public weeks before the crash of 1987 obviously, rode a tremendous wave look at ameritrade, 1997 was its ipo. A decade later was an early kind of online centric broker 2800 of upside versus basically 10 fold with the s p has done since 90. They were right place right time look at the founders 1974 and 1975. Chuck schwab and joe rickketts founded these two firms. They were disrupters, the cuttingedge of discount brokerage and then electronic brokerage. Charles schwab started the mutual fund marketplace. They have for almost, for more than 40 years essentially been trying to drive this equation of cheaper, easier, more accessible Financial Investment services to the Retail Investor. Is to them its not that strange they would have this other wave of advisers and zero fee apps that are promising free trading out there to contend with right now. Its a little bit of a synchronicity right now. If were talking about the ownership of the two company, one thing i think is worth mentioning is Td Ameritrade is 40 owned by td bank this is something about having scale and having the Balance Sheet as it were to be able to endure a long price war, Td Ameritrade kind of had that already. Now td bank isnt directly giving economy of scale like Charles Schwab is. But could you have argued with 40 ownership in td bank it could have weathered the storm in the short term. No doubt about it they had the financial wherewithal to where it its the platform, the number of customer accounts you can leverage the wide variety of different distribution platforms you have these Investment Advisors retail advisors. I dont think it was a sheer dollars and cents, its much more about the efficiencies you can get by putting these two companies together and eliminating a tremendous amount of operating expense for now lets bring in victor jones, ceo of the Online Brokerage Firm of dough. Thanks so much for joining us. Good afternoon, victor thank you for having me first, whats your take on this deal . Well, look, a lot has been said about the overall size and scope. You have 3. 1 trillion in asettles on the Charles Schwab side of the aisle and on the dt ameritrade side of the aisle you hafnerly 1. 5 million you get well north of 5 million which would launch them to number two behind blackrock. 100 agree what is being said up to this point. 19,000 employees from one company and 9,000 for another. The play i was there for 13 years and play number one in the scenario like this is to try to let your customers know that its going to be business as usual. There isnt any change so to speak. The reality is when you have a deal this size and scope there are a lot of questions not only from people inside the company themselves but the customers and Td Ameritrade has had a great focus on the active trading customer and that wasnt Charles Schwab business model. They were providing guidance and long term deeper relationships and the question for customers is what if this goes through whats the dedication to the selfdirected Retail Investor . Victor, youre the ceo or founder of a start up thats been looking to take on these brokerages what do you think this does the landscape more broadly a lot has been said about the potentially limited choice theres 3700 register terrified bro brokerages in the United States. The disruption recently is with people much less of 50 pun people the way you build a brokerage today is different than how you did 40 or 50 years ago for us its business as usual. We build Great Technology and just yesterday we rolled out a stock Referral Program anyone that opens an account with us will get free stock. Were dedicated to a new generation of traders who want to eliminate friction and get a better understanding of risk and large integrations like this while they are attention and headline grabbing the question syou know, it tends to take a lot of focus to make this happen and takes a lot of focus from delivery to your end customer. Stephanie, to what extent does this end the peak of competition between these players that allows you to get back in or is this just the beginning its the beginning. You do want size and scale you have four biggest players with over 50 of the share thats important to me the most surprising action from a stock point of view today is e trade. Theres no doubt in my mind this Company Gets Bought and the fact its down so much, i know it was crowded with the hedge funds i wouldnt be surprised to see morgan stanley, city at the group some people thought td could buy it its a short term phenomenon. Thats your opportunity. They have to be a partner with someone. They cant stand by themselves they have a good Corporate Service stock plan, 25 of their revenues thats very attractive im looking at it from a performance point of view and very surprised at the action in general. I want your thoughts, high earning, not rich yet clientele. This idea of churn i wanted to make sure i had it right. But this idea of churn and this idea of people coming into the industry through start ups like say yours and then maybe moving up to a schwab down the road is that a trend youve seen and how do you make sure that doesnt happen given the fact we do have this consolidation and gotten that much more competitive . First, i would say thats exactly what we set out to do at dough. We all came from large institutions and the focus there was on people nearing retirement with over 250,000 with investible assets. With advancement in the technology and efficiency we felt when he a major opportunity to create an experience for those younger in age but with less assets but with opportunity over time to grow those assets so were familiar with the acronym. To what i would also add to an earlier point that was made is the this is not what weve heard from Major Technology firms. Remember in technology, 11 of their overall revenue is coming from Financial Service whether its facebook looking at crypt o currency or facebook pay or google jumping into checking accounts or even if you want to count tesla essentially underwriting their own insurance theres a trend here with Large Technology companies as well as disruptive start ups like us making things more efficient for every day investors and while scale is effective for that really in order to compete its about capabilities in the long term victor, put this merger aside, to what extent has the price wars that ensued when Charles Schwab began it amongst the big investigation damaged your business . Well, look we knew we said all along that paying commission to trade stock was going to be about as common as paying for a land line telephone. We knew it wasnt going be the case none of us thought it would happen three weeks into our launch it doesnt change anything what we were doing. We knew we would build a brand that wasnt predicated on zero dollars. Once that novelty wears off you have to go back to message on what your real Value Proposition is for you customer. Were building a great brand were giving customers free stock regardless if they deposit with us because we want them to understand the concept of risk they can participate in the upside without down side risk. Is there long term impact . Short term blip lasted about a couple of weeks and were now seeing those prelevels we saw before the announcements victor, to be clear, although you dont charge an arbitrary commission you do make money every time they trade. Yeah, thats exactly right. There is an order rebate that we as well as many as these large brokers take advantage of. As the transaction costs, obviously, goes away, thats why assets and spread based assets become so important. Thats why scale becomes so important. Obviously, thats one of the key drivers behind, im sure, the discussions between Charles Schwab and Td Ameritrade thank for joining us today. Its been a wild week for Retail Stocks and that trend continuing today with a big intraday move the for macys reporter macys shares have recovered some losses. Expectations were low. The stock has lot of half of its value. The stock fell more than expected that led macys to slash its outlook. Macys said warm weather hampered its sales, made it harder to sell cold merchandise. International merchandise fell weaker than anticipated performance in those lower tier malls. Plus brief issue with the website because they made changes ahead of the Holiday Season which caused disruption Digital Sales grew but the quarter marked an end of 40 straight quarters of double digit growth thank you so much for that well talk retail later. We got 45 minutes left to trade. Essentially flat now on the s p. Coming up, president ial hopeful andrew yang talking tech last night. Were in the process of potentially losing the ai arms race to china right now because they have more access to more data than we do and their government is putting billions of dollars to work, subsidizing the development of ai in a way we are not after the break well tell you how one American Company is trying the to use ai data the to solve big problems facing the drug industry. Plus a number of Retail Stocks seeing huge moves this week on earnings well see if that trend continues with nordstrom, gap, ross stores and williams and sonoma report after the bell as we head to the break, heres a track on our data tracker. Existing home steals rose 9 , 1. It was in line with expectation. Closing bell will be right back 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. 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The my account app makes todays Xfinity Customer Service simple, easy, awesome. Not my thing. Machine learning in medicine, pharma executives are meeting in massachusetts today to discuss using Artificial Intelligence to improve drug development. Reporter were starting to see Artificial Intelligence and Machine Learning being used in some areas of medicine like pathology. In Drug Discovery its hard because Drug Discovery is just hard we spoke with the ceo of a Company Working on ai. She told us there are things that computers can do that humans just cant in this area it turns out that computers are much better at seeing these signals themselves than people are and also a lot less biassed. They dont come in with a preconception of what makes for a good or bad intervention or what makes for a healthier life. Reporter her company has a partnership with gilead. She says theyve already made some interesti ining discoverie. Its not just small new companies. Big pharma is adapting this as well so this is really gaining steam and people hope it cuts down the time it takes to develop a new drug as well as cut down the costs of new medicine sway huge political debate as well so fascinating. After the break, the ruffalo effect a new film could have a big impact on stocks later, what do zillow and netflix have in common well hear from zillows ceo who is a board member of net the flicks five . Its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry clive actually, really angry. Thank you. But what if your business could understand what your customers are feeling. And then do something about it. Turn problems into opportunities. Thanks drone. Customers into fanatics change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. To take care of yourself. But natures bounty has innovative ways to help you maintain balance and help keep you active and wellrested. Because hey, tomorrows coming up fast. Natures bounty. Because youre better off healthy. 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. [maniacal laughter] gold. Gold right, uh. Thank you, for that, bob. But i think its time we go with gbtc. Its bitcoin exposure through a traditional investment account. Nice rock. Its time to drop gold. Go digital. Go grayscale. Welcome back to the closing bell. Time to get word on the street. Raymond james giving a bullish outfit in the retail tv industry the firm citing Excellent Partnership with sony and lg price competitiveness and a large in store tv display compared to costco and target. Essentially more things arent as bad as they could have been stock is down 2 Credit Suisse is outperforming the firm says the Company Holds a near term monopoly in commercial Space Tourism bullish comments on space investing yesterday. I think what youll see are businesses, ours and others who decide to get into this business huge Gross Margins long term profitability. Competitive dynamic. Its the quintessential high value asset you want to own for many years the stock is down another 5 today. Meantime two wall street firms say this movie featuring mark ruffalo could have a big impact on dupont and 3m Better Living through chemistry. Its in our dna. Knowingly poisoning residents for the last 74 years. They have all the money, fierl power. They will use it i know, i was one of them. The release of dark waters will remove an overhang on the stock. Any potential negative share reaction will be reflected by early next week. Bank of america saying 3m could face increased risks of legislative action because of release of the firm. This certainly has been in focus for both of these names. Whether its dupont or 3m, is there a name here that you like . Dupont, stock is down 14 and its down 9 just from when this movie was going to get released so in my opinion a lot of bad news is already out there on this name and i own it because i think the ceo and the company, they are going to spin off a lot of different pieces. They will do acquisitions at m and a and change the profile of this company yes not happy that i own it. But i just feel like bad news, a lot of it is in there already. Morris has more liability than dupont what i wouldnt be buying is 3m. They have more exposure and fundamentally that company has a lot more challenges ahead for them already been some lawsuits swirling around with some of the ground water contamination and the things that happened with this issue as well ill probably go to see the movie. Now im into it. Thats where the two worlds collide. That movie and frozen 2. Ill let you know how it is. 33 minutes left of trade. The dow is down 26 points. Coming up your last chance trade. Later we told you about the new upgrade of Virgin Atlantic theres a number of other ways to invest in the cosmos. Founder of Space Tech Company Maxar Technologies joins us. As we head to break a check on bonds. Treasury yields ticking higher but still lower for the week 10 year yielding around 1. 77 . Well be right back. Is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. 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Its a viable effective way to support your other investments long into the future, and another way aag is working to make your retireme. Better. Dont wait. Get your info kit now . Welcome back just half an hour left of the session here key the things driving the action a murky out look on china trade negotiations another weak retail report macys falling cutting its forecast and weak labor manufacturing data adding to the case for a potentially slowing committee moment the dow down 25 points. Now its the fifth day of impeachment hearings in washington lets get the latest reporter were nearing the end of this hearing today. Both republicans and democrats trying to get their closing arguments in here. Its not clear that any hearts or minds have been changed over the past two weeks but one of the witnesses, fiona hill said testifying was both a legal and moral responsibility what we heard, what we saw and what we did and to be of some help to all of you in really making a very momentous decision here. We are not the people who make a decision the reporter now, of course, republicans say the outcome of this process has already been decided. Everyone knows what they are going to do next they are going to impeach the president and send it on to the Senate Reporter now, i think after all these hearings everyone here on capitol hill is looking forward the upcoming recess. Back over to you yeah. Been a long couple of days thank you. Time now fore herrera. House Speaker Nancy Pelosi says the evidence is clear that President Trump has used his office for personal gain she r violations by President Trump revealed by these impeachment hearings the evidence is clear that the president , the president has used his office for his own personal gain and in doing so underminded the National Security of the United States. Israeli president Benjamin Netanyahu has rejected his indictment on an array of corruption charges saying the country is witnessing an attempted coup against him he said the indictment stem from false accusations and systematically tinted investigation. The man who brought snowboarding to the masses has died of cancer Jake Burton Carpenter passed away peace fully in vermont. He was able to turn snowboarding in to a huge sport and an olympic show piece and a billion dollar business. He was 65 years old. So were up to date. Sue, we hope of course he rests in piece snowboarding was invented what only 40 years ago . He was the pioneer. He founded his company up in vermont. And basically built it from the ground up. And then he went to nbc at that point and when it started to catch on and said, you know what this is your next big sport. And at first nobody believed him. But, obviously, it has become that it certainly has. Sue, as always thanks very much. Well see you next hour. Weve got 26 minutes left of trade. Lets go mike for the second installment of todays dashboard. Little bit of a stutter step were seeing in the stock market if you look at just a couple year chart of the s p 500 puts it all in a big picture way. So this is the recent high and weve kind of curled over a little bit really not getting much down side at all. Market bottomed s p just below the 3100 mark a couple of times. Have to wonder if it looks like this at this point we said the market goes sideways, doesnt want to pull back then you have a quick sell off and a slingshot up to a new high what you should keep in mind as long as the market stays above there no one is concerned about a pull back below that zone. Look at stocks versus bonds over the last six months. You see a little bit of a change in this relationship to some degree in the white is the s p 500. Again curled under bond got big yields going lower Risk Appetite has bled away to some degree but trends remain intact on both scores. Do you expect to see this chart dont play out the way it is you need trade resolution somehow, some way. Then you need the Economic Data to start to stabilize and get that we talked about the global pmis and sm well find out more data tomorrow and as you get those data points in the next couple of weeks, if its good i think that will propel the market higher google is the latest tech giant to rethink its policy on political ads. Reporter google announcing it will stop giving advertisers the ability to microtarget political ads. That means that candidates will be able to target potential voters based on age, gender and postal code but not using any data about political affiliations or public voting records. Google clarifying its policy on misleading advertising, saying it bands any false claims and prohibits things like deep face. It will take action on a number of ads to be limited facebook does not fact check political ads saying in response to googles announcement we provided unprecedented transparency into u. S. , federal and state campaigns. As we said were looking at different ways we might refine our approach to political ads. Twitter is banning all political advertising. And snap allows political ads but fact checks them and all of this comes amid growing regulatory concern from legislators about tech giants power and comes amid the revelation that Mark Zuckerberg had dinner at the white house with the president last month and joined by facebooks board member peter teal. Any signs that facebook is rethinking its policy . Reporter its acknowledged its thinking about its policy this micro targeting question is really interesting one because you have twitter on one extreme saying they arent going to do any political ads. Snap taking responsibility for fact checking. They have an internal team seems it would take a certain kind of new investment from facebook what google is doing is interesting and thats in particular what facebook is considering right now, the idea you allow political ads. You dont fact check them too much google may fact check them more than facebook. But limiting that micro targeting would make a difference what it comes down to political ads are not a huge money maker for these companies considering how big their Revenue Streams are. Its really about what they can do now to be able to be open and have free speech but also not draw too much regulatory scrutiny certainly shaping up to be a fascinating case study when each of these Companies Take their own specific strategy and putting it in place around this topic. Thank you. We have a market flash on coty so a new reuters report out here says that coty is now going to kickoff an auction for its professional beauty business in december this is citing sources a month ago cotty said it was exploring the possibility of a sale of its hair and nail brands to help whittle down the portfolio and cut its debt so this report now says that it will be happening in december, and some of the potential bidders that may be interested in this professional portfolio that includes brands like clairol and others include unilever and Colgate Palmolive and others shares popped 4 on coty on this news but now pulled back at this point and remember we just heard this week that coty has taken a 51 stake in Kylie Cosmetics worth 600 million weve got 21 minutes left to trade and at the moment were down 42 points on the dow, just little bit of slippage having recovered most of the days losses little slippage in the last 10, 15 minutes up next your last chance trade plus tiffany take over why lvmh could be one step closer to a deal Danafarber Cancer Institute discovered the pdl1 pathway. 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We got 18 minutes left to go major averages are lower stephanie, whats your last chance trade im a big hmo fan cigna has really lagged yeartodate only up 5 up 30 from its lows but 5 dwreer date. A lot of it is because the political rhetoric is Getting Better or less bad thats one thing this company will grow earnings double digit they have margin upside. Pricing power. And synergy from express scripts. I think this will play a catch up trade to the rest of the group. The whole Group Rallies until the end of the year. Im biggest on United Airlines but i like the valuation discount because warren stepped back from medigap we have a long way to go but these stocks got so depressed and under owned it wont take that much for them to play catch up stock trades at 11 times earnings and 20 discount to s p 500. 17 minutes left of the session at the moment were down 37 points on the dow when we come uninterrupted coverage of the final minutes of trade. Well preview the big retail earnings coming up after the sohen al wwe take you inside the market zone next i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Most people think of verizon as a reliable phone company. 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. 13 minutes left to go, major averages are freezing marktionally lower were in the closing bell market zone. Commercial free coverageof all the action mike santoli is here to break down these crucial moments today stephanie link is here as well lets get things off with reports Charles Schwab could buy Td Ameritrade. Mike, whats the key thing youre watching . The key takeaway, the stocks are both up. Theres financial logic behind this the big picture trends are fascinating. If you look at the long term path of brokerage commissions of Charles Schwab, first one to go zero going back a bit over 20 years when they went down below 30 it was considered a big deal for online only trades theyve been riding this curve for a long time. Despite their size they remain at the front edge of giving cheep, accessible access also, these stocks in this area of Financial Services, schwab, blackrock, cme group are more data platforms and processors at more than they are lenders or direct active Asset Managers they are on the right side of history using technology on the down side are those active Mutual Fund Companies that over a ten year period have lost value in aggregate. You see some of them right there. Its worth pointing out the theme is has been one of consolidation. Online brokers are not playing catch up but now turning to that stage of consolidation blackrock has been expanding and making the most of it. 40 synergy is expected maybe more 20 to schwabs earnings right now, right off the bat i could name a lot of firms that are within that nobody ever remembers. There was waterhouse they all have been rolled up over the years but a lull for a few years. Why e trade is down 9 i would think that name is even more in play now could it have been. But before it was seen as a schwab or Ameritrade Ameritrade was the more likely buyer. Even if theres no acquisition of e trade he in are that much small relative to the rest of the industry and schwab has proven with td, e trade is cheaper just emailing with the wells fargo analyst during the show he sent me a note he wrote in 2016. Morgan stanley is another potential buy. Schwab used to be a rumor in tea 90s. Everybody did the invest banker math and said it made sense. Big opportunity, huge, in fact it could happen. Sticking with m and a i have another point. Well come back to this Luxury Retail engineer lvmh raising its bid for rival tiffany. Reporter tiffany agreeing to start talks with lvmh after it raised its offer lvmh is offer 130 a share up from 120. The offer would mark a 44 premium from tiffany share price before this offer was made and would value tiffany at just under 16 billion. These talks could fail, lvmh could walk away after looking at tiffanys financials tiffany might want a deal announced before their next earnings on december 5th and those earnings were revised lower. Stephanie has been holding out thinking tiffany could get a bit more this might be as good as it gets i dont know. Tiffany has really struggled in the last couple of years the turn around has taken such a long time. So they may sell out in fact, lvmh has the best local brands the combination makes sense. Lvmh knows that and would pay a higher price because of that we got just over eight minutes left of the session at the moment were down 78 point, a little bit of selling in the last five or ten minutes but were still off the loss of the session. After the close well get more retail reads when we hear from nordstrom, gap and ross stores and Courtney Regan has a preview of what to expect. Reporter after disappointment by kohls and macys some pretty low expectations for northward skroskro nordstrom. Comps are expected to decline by 1. 6 gap preannounced its results, including comps down 4 and cut its forecast when it said the ceo was stepping down earlier this month investors really do need know if that old navy spin out is still happening. Thats the big question Everyone Wants answered and has anything changed from a couple of weeks ago when gap pointed to slower traffic as main pressures ross stores. Comps expected 2. 7 up watch out for margins. Ross has a quote best in class model, capable of taking share from competitors and we know the off price base has remained pretty hot in retail in general. Back to you. Steph, what do you like right now i thought tj was a stand out. Im disappointed the way the stock reacted. It does trade at a discount to burlington and ross stores seeing a lot of momentum in both of their businesses. Thats the one in the off pricers that i like and own. Is there any other sector where the stocks specifics matter more . But whats fascinating about it a sector where it has not paid to be contrarian and to go counter trend and say oh, you know what walmart looks expensive let me buy gap or Something Like that. Because it seems as if the secular winds are blowing so strong in the direction for both walmart and target and t. J. Home depot and lowes have been spending so much and finally seeing the fruits of their labor show up. Department stores were way behind in closing the stores and being super aggressive i think thats why they are being left behind. They have a lot more to do House Judiciary Committee voted to remove marijuana from the list of controlled substances reporter the bill would legalize marijuana at the federal level and likely pass the full house, approval in the Republican Controlled Senate will be no easy feat still with the opportunity to compromise and perhaps liberalize the national toss, hj is up 8 biggest daily gain since october of last year and fairly close to what we see two years ago. Pot stocks have gotten smoked. Aurora down 50 . All getting a bit of a buzz off of a smoke of legislative hope make santoli, lyft getting a little high . I can understand why you have this bounce. I dont think it answers the bigger question, though, in terms of these companies in particular, its not as if its capacity is strained if its legal, it doesnt matter if you have the brand and you that have acreage that people like so, i guess the whole group would get a little bit of a lift but doesnt seem to me longer term to solve the puzzle given how hard many of these names have fallen is there value to be had . Not in the near term. Not as long as they are in investment mode and uncertainty on the political side. We got just four minutes left to trade shares of zillow are higher today. I sat down with decide low group rich barton who sits on the board also of netflix. Zillow is now aiming to do the same as netflix. Very few companies when faced with Serious Technology disruption, the socalled chasm, very few companies that are incumbent leaders make it across that chasm i like the transition the Market Expansion that decide low is going through right now where we have this huge profitable business with this trusted brand. Theres a Technology Disruption happening and weve got to be the ones to build the bridge across the chasm and get to the other side more of that interview coming up with rich barton next hour. You dont want to my that. Mike, clearly netflix and decide low ve zillow very different businesses they got a pretty interesting lead in that space theres no doubt about it in fact, its interesting because the question with netflix whats the value of that lead is mass adoption going to look in that area whats the cost out of pocket, the capital to produce i mean its very similar in terms of the big picture economically i look forward to the rest of that interview mike, you have more on the internals. A little bit split. The index is not doing much. Up and down volume on the New York Stock Exchange is positive even though number of stocks exceed those going up. Thats a little bit of a shift even though we have weakness in the indexes. Again look at the nasdaq new highs and lows new lows stubbornly high some culling of the flock is happening on the nasdaq side of things in particular sector wise a little bit of a turn about look at utilities against Energy Energy across a huge laggard but over the last ten days or so, the last month to date, as a matter of fact, you have a pretty good spread there of almost 6 out performance. Thats the inflation versus deflation. The dow is quarter of 1 . Lets sends it over to Rick Santelli for a check on bonds. Reporter good afternoon. Parallel shift all maturities up about 2 . If you look at third week in october of the yield curve spread tens minus two we however at 16 flattest of the month. Finally the distance between our yields and european yields is narrowest since february of 2013 looks like well avoid our first close of under 8,500 since last thursday reporter part of the reason is chips are one pressure today. Ubs cutting the chip equipment sector to a sell also Applied Materials and lam Research Netflix is the best perform week today. Up for six Straight Days it signed a deal with a korean studio and then nuance trading at a four year high 1. 4 billion to sell, bertha going into the close thats why were drooping here look at l brands soso earnings report, infuriate quarter, a tad better than execute, up 10 on that. Low Expectations Oil two month high nice move up in Energy Stocks today. Theres the close bell down 50 point in the Dow Jones Industrials average just off the lows, s p down four. Good afternoon welcome into the close bell. Im wilfred frost. Im morgan brennan. Lets check on where the markets closed down about. 2 of 1 dow 55 point it was down earlier 155. Split the difference s p slightly better down 0. 16 real estate the worst sector down 1. 4 . Energy up the best up 1. 6 bucking a recent trend of selling. One trading day left to the week were on pace for losses for all of the major averages as well. Joining us us to talk about the market day stephanie link along with chief Market Strategist mike santoli ill start with you. The magnitude of the news is not that significant is this stealth below the surface pull back enough to school the market off. Get the market higher more hopeful news on trade. Or is it just tiring and well have a deeper pull back. I dont think theres a good way to decide one way or the other but the market is hanging in there despite a lot especially with semis down oliver, whats the set up like for 2020 when we see these record highs does it make it hard to be attractive to equities no. Were constructive on equities for the next year in large part because comparisons for earnings will get much easier this was a tough year for earnings based on how well earns did in 2018. The exact opposite holds true for next year. Also were going dont see lower Interest Rates the consumer is in all likelihood continue to help the u. S. Economy and if we get a 2 growth economy that means youll get a 6 , 7 Earnings Growth number and thats just fine. Stephanie, at least until the end of the year, the final weeks we do have for twi2019 and the decade what will drive the market now trade and data. Economic data needs to get better and slowly but surely were getting less bad but i think at some point you have to get good. I dont expect to see good until the First Quarter some time but you know the market will anticipate that ahead of time. We have these daily rotations between cyclical and defensives. Health care has held in and is out performingvery nicely. Thats the sector at the end of the year you want to be overweight in. On liver whats your top overweight as we look ahead. U. S. Equities are top overweight i think on a sector basis we continue to Like Companies and areas that have less global macro exposure so we like Growth Companies over value companies. We Like Companies that are expanding their multiple, their margins, are taking market share away from competitors and have really, really strong Balance Sheets so we have visibility as stephanie just pointed out the Economic Data has been weak. Yes, theres a couple of bright spots out there but we dont know how long this trade thing will go on and it could last well into 2020 Balance Sheet strength and visibility is important. Lets turn the focus to apple. David faber sat down with liberty chairman today and discussed the overall media landscape and what he believes is apples strategy. I think they want to be a bundler and a platform, right . And video could be important component of that. And this gives them a relatively inexpensive look at whether or not adding a video component adds value to the bundle that they can offer and glue and Pricing Power and if it does, then they can step on the accelerator. Its funny, guys, if hes right, do they want to be a bundler and a platform it only goes to highlight and expose the unbelievable error they made with their original apple tv box and platform a decade ago and never developing it because a decade or so ago whenever that first came out it was the best ott way to get streaming content if thats how you wanted to watch stuff and then they just didnt touch it for a decade and that would have been the roku today or better had they kept developing it. Its true but he means they want to be a bundler on their other devices not just a dedicated tv proprovider. But they squandered that chance. Before there was enough demand for multiple streaming services. Oliver, when i hear those comment from mr. Malone i cant help think this goes back to that services narrative. Absolutely. So look we all know that Live Streaming and streaming is the future of television thats where everybody is going. Its a very crowded space. Apple needs to be in it. Yes they bundled it and apple tv has been unimpressive in the last decade. Thats okay. Everybody will get something wrong. If thats what they got wrong we continue to like apple and own it in our portfolios by the way, full disclosure so it is about streaming and thats the future of video and tv we got an earning alert on ross stores and well get to Courtney Regan for that. Reporter so it is a beat for ross stores on Third Quarter for top and bottom line. Ross stores putting up 1. 03 in earnings share consensus estimate was 99 cents. Comp store sales up 5 street was expecting it higher but just by 2. 7 theres an interesting comment here when it comes to guidance they are reiterating it but say we expect another fiercely competitive retail landscape as such while we hope to do better we continue to project Fourth Quarter comparable sales gains. Shares of ross stores are higher you can see that spike they pulled back down on this stronger than expected report. Back over to you thank you very much oliver, where are you positioned in the retail space . Were not really big fans of retail, particularly brickandmortar to us its very difficult to discern who will win and who will lose. Its about store lay out, about product but consumer desires and trends are changing so fast that we dont think that its, you know, its not in our interest to try to figure that out and theres more attractive areas to invest in. When i see comments like this about strong Comparable Store sales i wonder if thats getting taken into account when you see numbers we have from these retailers is some of the softer numbers are because weve seen such strength. There are winners and losers. We talked about the heavy investment cycle that Many Companies have undertaken. I think off pricers like youre series, t. J. , now ross putting up good comps. Ross actually just grew 8 by the way that 5 comp is versus a nice 3 comp last year. They are doing a very good job the momentum is not with the Department Stores. To mikes earlier point you dont want to chase these beaten down stocks that just havent had an investment cycle yet. The stock is up 50 in two years or Something Like that been this real operate steady climb so seems slightly conservative guidance on comps but in the context of everybody giving ross a lot of credit. We will leave it there, guys. Thanks so much for joining s still to come, would you trade in your house like you trade a car . The ceo of zillow says it could soon become a reality. An exclusive interview with rich barton next on closing bell. 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. 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. Weve got more earnings this time from nordstrom. Courtney regan has those numbers as well. Reporter so for the nordstrom quarter really big beat on the bottom line putting up 81 cents per share. The street was looking for that to come in at 61 cents revenues in line we dont have comps in this release but we can tell the breakdown of the nest sales. Full price business, the Department Store business, those sales were down 4. 1 the net sales for the off price business of up 1. 2 . Online sales grew 7 thats a relatively small number compared to other retailers because their Online Business is already 34 of their total sales. When you look at their Earnings Guidance they give a small increase in the full year Earnings Guidance but its interesting because we had this big beat this time on the bottom line they did 85,000 visits on the first weekend. Gross margin 34. 3 shares of nordstrom are higher by 6 after hours. Thanks so much for that. Mike, nice beat. It looks like definitely a relief trade which does make, i think some sense its become, you know, one of those cheaper stocks that people view and wonder if its a value stock or not given reasonably good comments about the Holiday Quarter it should hold together shares of zillow group are higher by 25 . I sat down with the companys ceo, rich barton who is a netflix board member i began by asking him the state of the housing market. In pretty good shape. Mortgage rates are at historic lows theyve been that way for a little while so thats fueling demand for the market house values, the average estimate is up about 5 yearoveryear which is healthy and at normal levels interesting strange thing theres not a tocn of inventory inventory is down from a year ago. It maybe hard to sell your home. Lets talk about zillow and its the home buying platform youre now in 21 markets how is it going . Let me start out by saying Zillow Offers a brandnew thing. Most people know zillow because of our zestimate we get 200 people a month who use our apps and see our zestimate and see whats for sale thats defined the company for the first generation customers are demanding more they are demanding ecommerce transform the transaction. Zillow 2. 0 is about revolutionizing that transaction and Zillow Offers the product, actually buying and selling homes in 21 markets. Its going really well its grown from basically a standing start to a 1. 5 billion revenue basis in about a year, which is maybe not unprecedented by extraordinary so 1. 5 billion run rate. Last quarter it was 1,200 homes you transacted on. That sounds about right whats your forecast as we go forward . Well, weve transacted about 2,500 homes overall. Our guidance is strong we were up total revenues for the company was 117 , up yearoveryear were in the thousands of homes area right now which is actually not that many units, but the revenues are big the big thing were shearing is that sellers are frustrated in their homes. They really its painful to sale home. Its painful where you are get to london we have no plans to go to london right now its so painful to sell your home, and ive rarely seen a stronger consumer reaction to a new product that im seeing with zillow people want to get rid of that time uncertainty and that price uncertainty and all the hassles with people going through your closets and using your bathroom while youre not in your house Zillow Offers this magic thing that just short circuits that. Lets go back to the core business the advertising business which remains very strong and essentially used to fund the new business. Does that concern you at all its made you more cyclical, more to the economy and with big inventory potentially that could be on your books in the face of a downturn the big shift really is this off line to online traditional way of doing things to the new way of doing things and its growing so quickly that i think the macro ups and downs, were not feeling yet. Im sure we will at some point feel that and that will be good news because well be a lot bigger i read a quote, youre on the board of nest flicks as well as it relates to zillow you said i see a lot of parallels as we take zillow group into the next phase with what we saw in netflix when we moved from dvds by mail to streaming and that kind of change i get the structural growth argument but theres a big difference to having a 10, 15 subscription versus make big one off lumpy transactions more linked to the economy. Do you accept its a big aspect . When i said that, very few companies when faced with Serious Technology disruption, socalled chasm, very few companies that are incumbent leaders make it across that chasm. Okay i happen to have a front row seat at netflix where ive been a director to close 20 years i had a front row seat of watching Reed Hastings and the Leadership Team at netflix crossing the chasm from dvds to streaming and do so in a way that surprised people. A second jump they made into creation of original content i basically liken transition that Market Expansion that zillow is going through right now where we have this hogue profitable business with this trusted brand and saying all right theres a Technology Disruption happening and we got be the ones to build the bridge across the chasm and get to the other side thats why were going so hard and so aggressively but in a prudent way at the new opportunity and its going extremely well do you think even further a step forward about other avenues you could go into with mortgages, other aspect . Turns out the house transaction is the hub of a series of really big, important and potentially profitable transactions getting a mortgage the title. The escrow moving telecommunications services. All this happens and changes and is key to the house transaction. Were making investments in most of these business, specifically mortgages and title and escrow and creating an integrated digital platform so that one day the dream is that we dream one day of you having almost a trade in experience with your house where youre standing in a house, a zillow offered house, you have been in there 15 times. We know who you are, where you live we have a mortgage ready to go an offer for your house and you with one click can decide to move back to netflix a lot of over the top streaming launchings, highprofile ones as of late. Do you feel that marks the peak in terms of competition for netflix and moving forward things should ease a little bit from here . I mean its hard to say netflix was so far out in front of the streaming thing always with an attitude that the real competition is regular tv and how people are spending their time in other ways and that more over the top, more streaming television begets more streaming television and i think the numbers, what were seeing right now supports that. The more streaming, more great streaming there is available more people move from the traditional way of viewing to the streaming way of viewing and i think that plays out globally for a number of years. The final question just broadly on Venture Capital investing which youre ver experienced at as well are prices inflated . I think were coming to the close of a period of irrationality may be too strong of a year but late stage money with big valuations. Remains to be seen but it does feel to me like the winds have changed. And that investors now are looking for real profitable models, and not just not just growth at all costs, at any cost and market share grabs and from my perspective thats a fantastic development to bring more rational competitive mindset to the industry. Rich barton there as we discussed before, theres huge potential to disrupt what is pretty archaic business in terms how those transactions happen at the same time youre robbing a successful cash cow to give it way more cyclical exposure you hope it doesnt extend to building house but it is a Good Business to be a market maker which is potentially what they are. As long as the turnover is brisk enough you dont sit there with inventory you cant move i remember when they said they would get into the actual hard asset, own the he real estate itself, this stock just sold off and the previous ceo leave earlier this year. Stock is up 36 over the past 12 months and up 26 now yeartodate weve seen quite the rebound investors are getting on board it was up a couple of percent today. Meantime gap earning are out Courtney Regan back again. Reporter were not done yet. Here are gaps official numbers. They did preannounce a couple of weeks ago when the ceo was stepping down. Gap is reporting an adjusted earnings per share of 53 cents thats two cents better than the preannouncement revenue slightly better as well 4 billion estimates were for 3. 96 billion comps remain unchanged down 4 as does the full year Earnings Guidance in the range of 1. 70 to 1. 75 remember this he company, obviously, is undergoing a number of changes and the big question is are they going to dont spin out old navy . Theres a quote in the release from the interim ceo Robert Fisher who says we continue to make progress against our separation plans which will provide guidance they are going ahead with that old navy spin out. Shares of gap are higher by 4. 5 thanks so much. Up 5 or so after hours. Up next a prototype spacex rocket exploding during a test on wednesday coming up well discuss the risks of investing in space. Plus disney is about to start cashing in on the break out star we got thoseetls dai coming up after this break electronic signature. You have to print, walk, sign, scan, recycle, walk, email yourself. Really . More walking, try again, waiting, recycle, walk, email yourself, then get back to your day. Or not. This isnt working. Introducing samsung paperless workflow solutions. With the galaxy tab s6, you can sign Digital Documents onscreen, with a finger or your s pen. Samsung business solutions. Welcome back to closing bell. Lets sends it over to mike santoli for his third dashboard of the day are we seeing cresting confidence among investors theres a brightening mood this is the differs between bulls and bears. The Investment Advisory sentiment. Getting up to this upper range a 40 gap between bulls and bears and we see that prominent high we see early 2018 probably wont get there were at a level where the market tends to slow down, maybe pull back. Although, again, 2017 we managed to stay up here for a while. I think its fair to say this pause in the rally has a lot to do with sentiment getting slightly ahead of itself it doesnt always coincide with a top. More or less confirmed with other surveys. The individual investor poll did show a backing off on bullishness. High neutral to slightly extreme in terms of optimism i dont know. Confidence with this chart thing iteration. I dont know such a quickie. You dont have to bring too much more attention to it thank you very much meantime Williams Sonoma is out with its earnings. Reporter so Third Quarter for Williams Sonoma, pretty Strong Quarter it was in line with expectations revenues came in slight beat there. 1. 44 billion versus 1. 42 billion that analysts expected comps for the retailer which owns brands like pottery barn, slight beat too, total comps coming in at 5. 5 . Estimate was 5 . For those brands most comps were up one area not quite as strong as analysts were expecting is w wes elm. The ceo pointing to their Digital First model as a key component of their success that said you can see shares are down after hours almost 6 morgan, back to you. Up next well discuss the risks and rewards of invests in space stocks and speak to the ceo of publicly ad satellite maker sfx [phone ringing] you still have service . Call the Insurance Company its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool Technology Stay wit orlando isnt just the theme park capital of the world, it also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. Its time now for cnbc news update with sue herera hello, everyone heres whats happening. The senate has voted 7420 to approve a government funding bill just hours before the deadline that bill will fund the government through december 20th it buys lawmakers time while they negotiate the full appropriations bill to fund the government through next year the bill now goes to President Trump for his signature. Former Baltimore Mayor entering a guilty plea to federal charges today. She was accused of using sales of her selfpublished childrens books to help raise money for her campaign and her home. If convicted she faces up to 35 years in prison. More cases of vaping related lung injuries have been reported the cdc says there are 2290 cases in 49 states thats an increase of 118 from the previous week. There have been at least 47 deaths in 25 states. And nfl has upheld the indefinite suspension of Cleveland Browns defensive end miles garrett. Hes seen arriving at Cleveland Airport last night after middle east with League Officials nfl did reduce the suspension of steeler center from three games to two for punching and kicking garrett. You are up to date thats the news update at this hour wolf, back to you. Now it was another day of testimony during the house impeachment inquiry hearing and we have more reporter that hearing wrapped up just a few minutes ago and it marks the end of the first phase of the public impeachment investigation. There have been nine witnesses delivering roughly 25 hours of testimony over the past two weeks. But it doesnt seem to have moved the needle here on capitol hill just take a listen to this assessment from republican will herd hes a moderate who has been critical of President Trump in the past Impeachable Offense should be compelling, overwhelmingly clear and unambiguousous and not something rushed or to be taken lightly. Ive not heard evidence the president committed bribery or extortion. Reporter herd is not running for reelection but not swayed by the arguments eheard. That just shows you how deeply partisan this process has become back over to you thank you Virgin Galactic is the first publicly trade Space Tourism company. But there are already ways to participate in this new era. You havelock heed martin and boeing Northrup Grummann does civil and defense work for Many Companies space is only part of the portfolio. Satellite communications is broad based and includes a lot things like satellite broadband. Incumbent. And Iridium Communications an area to watch as spacex and even amazon become operators themselves, there are etfs those very small procure space ticker ufo and final frontiers. One name not taking on investors any time soon, Jeff Bezos Blue Origin bob smith told me, they need funding. Thats not something blue origin really needs to do especially because it is almost completely funded by jeff bezos who has disclosed that he sells off about a billion dollars worth of amazon stock every year for that space company. Another publicly traded space name, Satellite Company Maxar Technologies lets bring in walter scott, the founder of digital globe which merged with three other Satellite Companies to form maxar back in 2017 thanks for being with us today given the fact maxar is four Space Companies in one where have the greatest Growth Opportunities been and where are they moving forward . Well, a couple of great Growth Opportunities are in what we see the earth intelligence space, which is combination of the satellite imagery and the Data Analytics that we apply to that satellite imagery the world is a big place and one of the things that slight imagery does is it allows to you see whats happening at a global scale and doing it very cost effectively i think another area that were seeing some interesting opportunities is in the civil space area maxar is supporting nasa Going Forward to the moon with the power and propulsion element for the lunar gateway. Yeah. Walter, there have been a number of contract awards, including ones from nasa in recent months. Its interesting, maxar last year about year ago the stock was trading in the 30s it sold off aggressively down as much as 4 a share now its trading around 11 or 12 a share. Ate turn around story. How far into this turn around is this company and given some of the trials and tribulations of the year, how is the Company Getting its arms around all of that youre seeing that recently we did a bond offering we have been building towards our backlog. Youve heard us talk about some of the recent awards weve won were building our world view legion satellite constellation which is our next satellite constellation slated to launch in 2021 which will produce a flip essentially from an era where we are spending capital to an era where we are back to generating significantly more cash from our earth intelligence business walter, the question from me whether were talking private or public area of space, is the u. S. Way ahead of other countries in terms of its level of innovation and development in the space sector or other countries china or otherwise close or even ahead. One of the things we saw in the last 20 years was a move from where the United States i wouldnt say had a monopoly on space but far and away in many areas ahead in space to where youre seeing new entrants on one hand youre seeing more entrants into space say round the world. Youre seeing that in the Remote Sensing area, seeing that in the launch area. At the same time i would say that the the u. S. Still retains technological edge in space. Its been investing in space for many, many decades and i expect that as long as that investment continues, that leadership will persist. The thanks so much for joining us good to see you. Speak of space, baby yoda is the talk of the universe right now. Disney is about to cash in on sensation. Reporter i like that transition speaking of space, baby yoda thats right the break out star will be featured in a range of merchandise. The character that fans have been call baby yoda was not included in the first wave of show merchandise to prevent spoilers baby yoda toys, appearel and accessories will roll out to other retailers on friday and to Disney Stores and theme parks ahead of the holidays. Baby yoda who has been featured. It helped to catapult disney plus for more on this story, check it out over on cnbc. Com back over to you thank you storage getting slammed after hours. Reporter down almost 24 pure storage, revenue was a miss came in at 428 million versus 440 million that the street was expecting. Ceo pointed to continued pricing declines when talking about the revenue. Interestingly they also announceed a new cfo, no word on what happens to the existing cfo. But, again, you can see that stock getting hammered almost down 24 . Back to you. Coming up next here on closing bell tesla hoping to shake up the pickup truck market when it unveils its cyber truck tonight. Can atth be a game changer for the industry thats coming up on close bell 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. 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. 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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After three decades in a hedge funds industry, bacon returning capital to outside investors hes not completely shutting down his Capital Hedge Fund but only manage money for bacon and his principals the decision comes from disappointing results in his flagship funds and spoke about intense competition for talent and trading conditions he noted a converse to a Family Office per se it follows similar moves by the likes of lee cooperman, Jonathan Jacobson up next the war of words rages on fedex ceo fred smith pending an oped in the wall street journal blasting the New York Times reporting on the company. We have a full run down ahead. 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. [maniacal laughter] gold. Gold right, uh. Thank you, for that, bob. But i think its time we go with gbtc. Its bitcoin exposure through a traditional investment account. Nice rock. Its time to drop gold. Go digital. Go grayscale. 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. Fedex founder fed smith is pushing back the charge that fedex paid zero in income tax in 2018. New york times published an investigation using the company as a study how they decreased tax bill to nothing. Smith challenged the New York Times to a debate he wrote in that article, over the past five years weve paid more than 10 million in u. S. Taxes after the temporary effect of capital expenses wears off. I expect fedex will pay blins more recent slow down in Capital Expenditures is due to trade disputes and attendant global slow down. Yeah. Go for it i remember fedex released their earnings in 2017 in december. It was the same day that tax bill was moving through congress they laid it out i mean they put the whole thing out there. The money they were going to give employees the Capital Expenditures comments on the tax bill and all the plans they had in place. Full expensing is such a big part of what is being debated here you have this five year window with this full expensing and very much jumped on that you have seen them pull back this year on some of their investments, and they have said over and over again it has to do with the frayed floss. Air freight data has been terrible this year that affects their business significantly so difficult to argue about that and why they would have spent less on cap x harder to argue that we would have ordered fewer boeing planes doesnt mention buy backs. Again, definitely confuses the the story a little bit i also this struck me a little bit if his justification is correct they spent more on cap x and since then its gone down because of the trade war he says when i met with mr. Trump on a couple of occasions i never discussed tax reform with him but we talked about other policy matters. Thats irrelevant. Thats an odd comment for him to say that hes trying to address the implicit charge that he lobbied hard for the tax law and didnt have to pay. Whether he lobbied hard or not, he always called for it and always outlined why it would be better and he had access to the president. I dont think its relevant. Not part of the argument for him to offset. His argument should be which he makes we spent more on cap x similar situation for u. P. S. They pushed tax reform die severe gerns between both of these stocks u. P. S. Is the outperformer, fedex an under performer if they did this, they took advantage of these provisions, its a front loading of things they would have spent on over years and it didnt necessarily give the overall economy a massive boost in 2018. That another argument. Also said theres been challenge of a debate and that hasnt happened facetoface yet. Clearly we have times reporter on for a long interview earlier in the week. We invited mr. Smith on a couple of times now there we go. Discussing both sides. Up next were counting down cyber truck. Elon musk tweeting this teasing photo months ago what to expect when the racks come off thats when closing bell returns. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. May your holidays glow bright and all your dreams take flight. Lease the c 300 sedan for just 399 a month at the mercedesbenz winter event. Hurry in today. Former fed chair janet yellen expressing concern about the economy. Speaking at the World Business forum, yellen said she doubts a recession will happen in the coming year. But she says odds of recession are higher than normal and at a level im not comfortable with quote unquote. Lets send it to mike for the final dash board of the day looking closer at the economy. A lot of the indicators are not completely comfortable though not sending pennsylvania clear signal of rapid worsening. Two numbers worth watching leading Economic Indicators Conference Board compiles this you have the shaded area for recession back to the late 80s this is the Third Straight month of decline there is a rolling over type appearance in the chart. Look at whats happened before previous recessions. Obviously a steeper decline that you typically saw. Right now, still in the safe zone but not moving in the correct direction. Then unemployment claims, another weekly number here the fourweek moving average of the number has curled up right, so again going from very low levels up to the 220 220,000 level per week roughly speaking there might be the affect from the California Power outages, the gm strike. We dont know. But in theory that could develop into an important low on the chart which as you see here weve seen well in advance of prior recessions not in the immediate leadup. Obviously we have to monitor it all. Mike, great stuff thank you very much. Up next tesla big unveiling, the auto maker set to take the wraps off the ghhily anticipated cyber truck. The details when we 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. Weve in a whirlwind of retail earnings after the be the big movers nordstrom sharply higher after a profit beat. Tesla unveils the widely anticipated cyber truck pickup electric truck tonight its avehicle that ceo elon musk has been hyping up for years. Promising superior performance to a porsche better ewe tielt nan a ford f150. Claiming inspiration from blade manner the the executive director at we had bush securities here with us how big of a game changer can it be for tesla. Its going after a new market, ford and gm in terms of the shot across the bow. Big focus, what prices looks like if you look at 69,000, i think a 55,000 price point would be a sweet spot but it comes down to the respects theyve kept it under wraps. This is a big move into the new market. Mary barra said were debuts our electric pickup as well. In the same time frame for tesla expected in the fall of 2020 i believe. Its a ripple effect. If you look at what musk has done to every other category there is a fear factor and going after ford and gm. This is one in fremont theyve been extra keeping the wraps on becauses in viewed as a next gen pickup the question is does it go after the 3 million pickups sold in the u. S. Who is the key market . Who are they going after and will it ultimately disappoint or be exciting. When you say the specs, range, price, range with a load all that stuff in terms of whether its a practical replacement for hard working pickup truck. Because load is key in terms of a pickup, especially on the commercial side. How does that in terms of pounds is it north of 11,000 pounds i think well have the specs in terms of that as well as the ev side and key in . Enough to drum roll into the whole new market i think there is definitely going to the market. But for musk its an important initiative. Dan, bring it wak to the stock price here we have a chart of some of your recent calls what do you feel you may have missed over the course of 2019 being a little late to cut and behind in the bounce. If you look at it right now i mean it was really do nef to raise capital any raised ultimately if you saw the stock in the nearterm they had a massive rebound. That was something that i think maybe us and some others sort of miscalculated. I think right now the question is profitability is this sustainable Going Forward . If it is, the stock could be a 450, 500 stock if not, we sit back in more White Knuckle period thats why its a fork in the road situation they need to be sustainable. But ones like ourselvesis miscalking the demand. Thanks for watching out of time on the closing bell. Fast money begins right now. Live from the Nasdaq Market site over looking new york citys times square, this is fast money. Im melissa lee. Traders on the desk tim seymour. Karen finerman, dan nathan guy adami. And mr. Fix it the man whos career expanse decades he joins us exclusively. Trucking along why tonight could be an electric night for tesla investors. We will explain. And later Stealth Software stock needs to be on your radar into next week well bring you the name but beginning with the brokered bombshell, a source telling cnbc that Charles Schwab is i