Transcripts For CNBC Closing Bell 20240713

Highest level in two years trade headlines have us on record high watch for the s p, a closer call for the dow and nasdaq and would be the 27th record close of the year for the s p. Joining us for the other, stephanie link, good to have you here this afternoon. What does it mean . The computers take each headline as if its fresh what a difference a year makes is all i have to say last year we had tight fed policy, no idea what would happen with trade. This year we have much more accommodating fed and seems were getting some pieces of certainty on trade may not be what we want but making progress. Now i would argue a lot of this is priced into the market given weve had Market Expansion on the multiple but, you do not fight the fed and at the same time the ism and pmis are stabilizing and the data this week has been pretty good on other data points on the economic front we might have risk to the upside in growth for 2020 and thats why the cyclicals are rallying ive been biassed, its been painful all year so a good couple of weeks. But you stay that course were going to focus in on the big stories were watching and its all about trade Kayla Tausche has the details on these breaking china headlines at least what we know. Bob pisani is tracking the market reacshown and mike santoli is looking at apple and where wall street stands on the name well kick it off with Kayla Tausche. Get us up to speed what we know. We know this is a moving target. Reporter three sources close to talks are confirming theres a deal in principle between u. S. And chinese negotiators that the u. S. Officials are expected to bring to President Trump this afternoon during a meeting between all of these principals and discuss next steps one much these sources tells me President Trump has been focused on the agricultural purchase number and wanted china to make a bigger commitment. That commitment had been around 40 billion in u. S. Products and he wanted it closer to 50 billion. Highest ever total that china had purchased in a given year was 26 billion. Certainly thats a number to watch in terms of any announcement that we get from here another thing thats important about whats happening now is that whatever gets agreed between the u. S. And china at this stage is expected to be signed its not just expected to be a negotiated in perpetuity after this im told by one of the sources that the Chinese Ambassador is expected to sign this agreement if President Trump does give his blessing to do so at this point. Any decision by the president would need to be made in short order in order to put the official notice in the federal register to stop those tariffs on sunday from going into effect of course, were awaiting any news coming out of the oval office what the president decides and whether hell take the deal that his negotiators are bringing him well be talking again very soon Kayla Tausche in washington today. Lets bring in bob pisani and take a look at the names moving on the back of those trade headlines. Reporter record highs. A broadening rally, more than 200 stocks at new highs. Thats what you want to see. Usually trade related names like microsoft and apple hitting new highs. Illinois tool works. Nike also hitting 52 week highs. Semiconductors, naturally major part of the trade issues many hitting new highs today including broadcom yield curve is steepening. Heaven for banks new highs right across the board. Global banks and big regional banks. Trade questions three big issues down here. Are they going to cancel the december tariffs, will they cut the existing ones, and is there an assumption they will reimpose the original tariffs if china fails to go through. The most important thing cutting existing tariffs, guys, because that is removal of sort of a tax on the market at this point. That will dramatically help improve the earnings outlook for 2020 and thats what the market is concerned about now thats why were getting these moves intraday on these trade headline stories guys, back to you. Apple another key bellwether. Credit suisse said iphone shipments to china fell 35 in november lets get to mike santoli for a closer look. Did get to a new high. A it did. That Credit Suisse is a little bit of a stress test for what might be baked in to april approximately. Is there still room on the apple cart in terms of both. This is where the street sentiment analyst breaks down. You can see really still a reserve of skepticism. You have 57 of all analysts have a buy rating. Thats in the yellow thats up a bit from 12 months ago from january when they had that big warning on china look at the price targets. The green is the actual stock price. It passed the agree get consent price target thats unusual when you talk about a big index name where everybody is involved and Everybody Loves the technical picture. It shows that the street is definitely a little bit hesitant to really chase it at these levels all else being equal thats positive heres the valuation set up and an explanation for why the street is a little bit not so ready to jump right in right now. This is the valuation of apple pushing 22, an eight year high this is a super earnings phase of apple after a few generations of iphone. Then the pe relative to the market at a premium after so many years of discount i guess you have to wait and see if investors and analysts ratify this move for. To be a premium stock. Mike, apple is just one of two names on the dow lower albeit marginally slow we hatch this very closely for any updates as its connected to the trade war. There was a note out putting a 150 increase on the iphone if we get these tariffs because the stock is at such a strong move to this point, courtney, it seems almost as if there isnt a lot of trade worry embedded in it which is why i guess its not rallying even more on this idea we might have some kind of a move. This is just one name. Thank you very much, mike well come back to you often throughout the show. For more on the Market Impact lets bring in Global Market strategist with jpmorgan Asset Management what do you make of the moments here on the market certainly not the highs of the session, so some disbelief this is actually going to be put to paper as Kayla Tausche was saying weve been waiting for this for two months, since september 11th we aldo. Weve been waiting for this for a while. There was already a consensus that the december 15th tariffs would indeed get pushed back we got the market a little bit excited in the middle of the day was the possibility for upside surprise the removal of existing tariffs. So lets see well have to wait and see that would be a significant upside surprise. Stephanie have you been surprised how well weve dealt with the tariffs in place. For most part Many Companies found mitigation strategies to work their way through it. The consumers have held in quite well the consumer is quite Strong Manufacturing they had a hard time of it in the last year. However, that said last year and beginning of this year was their time to take pain, to restructure, to increase pricing, and so now in 2020 heading to 2020 you have easier comparison, price increases to offset the tariffs and maybe we are on to something with this pmi stabilization. So those sectors are doing better because theyve been hit so hard and pretty cheap is this stabilization ism, global ism, pmis for real and how much do you attribute the overall rally to that. We attribute part of the rally to that. Its not just the trade deal expectation. Initial sign much stabilization in that hard hit Manufacturing Sector globally. Especially certain parts of the pmi survey has been pointing to stabilization Global Growth in the First Quarter of next year if you look at new orders rising, inventories much more stabilized i do think its for real just really important for the data to confirm that well be looking at the december flash pmis next week that could push the market higher look at the german Business Confidence numbers starting to improve. We need china to stabilize for europe to stabilize and germany to continue its upward momentum even stability after two years of deceleration, if stability is all we get in 2020 thats a win thats a victory were getting more optimistic about global stocks as well. I want stems the recession worries are pushed so far away from where we had been earlier this year. But Global Growth and domestic growth has slowed. Are we just more in a down shift than a recession period . I do think data has confirmed its more of a down shift than a stall. Whether its the u. S. , europe, whether its china, but by no means i dont think well see recession fears pop up again in 2020 or 2021 were still late cycle trade deal or no trade deal. For us its about having exposure to risk, growth factors but maintaining that insurance just in case because were later cycle. All right good to he see you thanks for the time. When we come back this Afternoon Chamber of Commerce Executive is with us he has been critical of the president s use of tariffs in the trade war but also incredibly plugged into the negotiations well give us some insight as to where we are on this deal. What do advisors look for in an etf . Dont just track an index, help me meet a clients need. Is the fund built to sell or built to last . Etfs are only part of a portfolio. So make it easy to explain. Give me a quality fund that helps me get clients closer to their goals. 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. Servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. Were going back to Kayla Tausche at the white house she has more details about this phase one trade deal what have you learned . Reporter we expected that meeting with the trade principals to be taking place at 2 30 p. M. But we learned what meeting actually transpired at that time was between the leadership of the Business Roundtable including ceo josh bolton as well as ceos of Major Multinational Companies this is a group that had been critical of the tariffs but supportive of the overall objectives of the administration in china trade its unclear whether this overlapped with the meeting with principals and whether these ceos were privy to the details of the terms of what was being discussed. But certainly interesting that as the president is considering this deal in principle with china on phase one, that hes also hearing from some of these ceos who are really in the line of fire in this dispute at the current moment kayla, thanks for that set up for more list bring in myron fr brilliant. Thanks for the time. Help our viewers understand how this may be different than what we heard on october 11th i think its fundamentally different. I think the president told people the deal was essentially done several cabinet members were doing outreach as well the bottom line is the two sides had gotten pretty close over the last few days on the basic elements of the deal, which was what are we going to do on terms of tariffs and ag purchase the other issues around ip and currency manipulation have been addressed. It was about getting these things confirmed and tightened up and i think they move quickly. They saw the opportunity, and i think were all excited that a phase one deal is going to be done imminently. More work to be done certainly in their relationship. There are issues that wont be addressed in this agreement, but its a good starting point brings far greater certainty to the most important commercial relationship and i think its going to help the u. S. Economy heading into the Holiday Season. Were welcoming it for sure. Myron, you mentioned there was some discussion about tariffs. What do you know will happen there . Is there a delay no tariffs . What is it what ive heard from Administration Sources is that it will go beyond just suspending december 15th tariffs that in fact there will be traf cuts i think well hear about that in more detail tomorrow but certainly the chinese side from discussions that i had with vice premier and others in the government in the last 24 hours the expectation was to go beyond that and what i heard from the administration was confirmation, in fact, that were going to have deeper cuts and suspension of december 15th thats good news to the american consumers, to farmers, to manufacturers. And, of course, it has to be that we get something in return for the tariff cuts which mean much stronger ip protection. Weve been pushing for language along trade secrets. Some of that will be dealt with hopefully and see the details soon, i expect in the process was one thing that tripped us up in the fall, myron. Do we have to go through the whole where is this going to be signed who will sign it can it to be done at the minute terri ministerial level . The ambassador has the authority to sign. There are four people in china who can sign this agreement. The president , the premier, the minister of foreign affairs, and actually the ambassador. Can get done with a signing ceremony by the ambassador we dont need a trip to china. Could it happen that way we could see a sign ceremony in washington what happens with the next phases were looking at phase two and three. Whats left over i think its been pretty clear in my conversations with the key u. S. Negotiators that theres more work to be done significant tariff reduction in phase one would be helpful but west to see improvement in the Business Environment in china. Well see some efforts in phase one to deal with Financial Services and agricultural access and purchases and well see hopefully some language on ip protection we got more work to do to improve the overall relationship on china we got to deal with some issues that will not be addressed to the full extent, issues like subsidies, industrial policies, some regulatory issues and, of course, issues around data and cross data border floss. Theres plenty of work ahead that has to be addressed these are issues core to hines economic model it will take more time to get done but if we improve our relationship further well have to get to those issues in phase two or phase two and three negotiation. Do you see that phase happening before the election . Well, you know, thats the big question mark. I hope so. I hope they build off the momentum this has been a great week we got the usmca agreement moving in the right direction. Were hoping that will take up in the house for a vote. We see now phase one agreement which has been discussed and now finally we think it will get done so lets build on this momentum and get more work done lets not wait until the elections because thats a long time from now. And you just dont know whats going to go on you know this is a complex relationship there are other factors in the relationship that have added some intensity to it over the last six months. So we hope that they will move forward quickly. We certainly communicating that in china ill be there early january to meet with the leadership in china. Im certainly hoping well keep that momentum going. And not wait another year. That would be a mistake. Myron brilliant, thank you so much for calling in. Please keep us updated we are all over this major trade news coming out of Washington Well continue to bring you all the latest headlines as the s p looks to close at a new record after the break shares of ge up more than 50 this year if you missed out on the rally one firm says theres more lexaimeo co wel pln that next. Memory suppo. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. When i see obstacles, i create opportunities. soft music when i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Apps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. Music boeing shares are down on these new production concerns. For the that well turn to phil lebeau for some details. Three big pieces for boeing two within the last hour lets start first off with boeing ceo meeting with the head of the faa, Steve Dickson in washington this afternoon at the end of the meeting, boeing put out a statement saying its taking back its guidance in terms of when it might have a return for service for the 737 merry christmas. Falling in line with the faa saying any timeline is going to be set by the faa and remember Steve Dickson told us yesterday this plane will not be recertified in 2019. That impacts the second piece of news boeing is slowing down planned production rate increases for the 737 max. Originally the company said look well go up to 47 per month. At the beginning of 2020 then by the end of 2020 we get up to 57 per month they are currently at 42 thats changed now they will go up to 47 per month likely in march and up to 52 in september. Forget about 57 per month happening next year. Thats not going to happen until likely spring of 2021. Another reflection of boeing saying were slowing things down a bit. The news that came out this morning boeing and southwest reached a settlement in terms of what boeing will pay southwest because southwest has had its 737 max fleet grounded for nine months this year that settlement, the total sum is undisclosed however, about 125 million from that settlement will be dispersed to southwest employees as part of a Profit Sharing payment. That will happen next year and the recertification again not going to happen this year. Southwest pilots, they are not part of the settlement and southwest pilots are saying their suit continues and also not expecting the 737 max to come back into service until april. Currently the official guidance from southwest is early march. A lot of news. There it is for you on boeing this afternoon guys, back to you. Youve been very busy. Thanks for keeping track of those moving parts shares are going down more than a percent. Stephanie you dont love the airlines if memory serves me i dont i own boeing its actually been pretty resilient. The fact it ended up green yesterday was impressive in my opinion and anything we learned today wasnt that material if it gets certified in january, february and march, its still the same story the cash flow story improves in 2020 so i think the stock probably is sideways here for a little bit but i still light because once they do get this thing in the air and certified, very safe plane and the momentum will start to build i own a lot of it. Ive been buying it on these down days. Now time to get the word on the street. Ubs upgrading General Electric to buy ubs expecting the stock narrative to change from significant cash drag to successful transformation. Shares of ge higher by more than 5 jpmorgan up starbucks to overweight they took the price target to 94 and says they have a high degree of confidence. They go on and say china 1 to 3 of expectation. U. S. Comps is up five and had a great call this summer where they took it to neutral. Its about new products and innovation and technology. And this ceo knows technology, right . So hes really implemented that. The problem i have with this stock it trades almost 30 times, you got to pick your spots with these High Quality Companies im going with costco. I think that this is a fabulous company and if it ever pulls back, if you gate 10 pull back you want to own it you own ge i do own ge and i got beaten up a little bit. Theres more to go this resturucturing is in the second inning. I think youre going to see margins improve and revenue organic growth in this division. I think youll see improvement over the next three to five years. I do buy into this report. Its had a nice run. So you dont want to chase it here but its still very underowned by portfolio managers. Some of the projections on industrial cash flow or pretty aggressive well see where we get to next year on this call. I agree i think expectations are solo and people dont own it and i want doesnt take much lets get a news update with sue herera hello, everyone. Heres whats happening. The fbi will now oversee the investigation of this weeks deadly attack on a jersey Kosher Grocery store. The new jersey attorney general calling it an act of domestic terrorism. The evidence points towards acts of hate i can confirm that were investigating this matter as potential acts of domestic terrorism. Fueled both by antisemitism and antilaw enforcement believes. Russian Officials Say a fire on its only Aircraft Carrier has been brought under control it was undergoing Maintenance Work when that fire broke out. Two people were killed on board while ten others were taken to the hospital here at home the fcc voting today to make it easier for people to reach the National Suicide prevention lifeline. The current hotline is a ten digit number but the agency voted to change it to a three digit, 988 it is the first step in a month long process youre up to date. Thats the news update at this hour back to you. We have a little bit more than 30 minutes left to go here before that closing bell sound. Here are the three things driving the action today trade. The big driver again with news just crossing that the u. S. China trade deal has been agreed to in principle jobless claims rise to their highest levels in the two years. Potential worrying sign for the economy. Those trade headlines have us on record high watch for the dow, the s p and the nasdaq here with 30 minutes left to go. Lets get over to mike santoli for the second installment of the market dashboard. Quality is still in style i want to take a broader look at the s p 500, a five year glimpse as a matter of fact which really does put this move in its recent break out to a new high in some kind of perspective. A lot of people comparing this break out to a prior one from 2016 heres what happened 2016, even though these moves dont look particularly dramatic, that was a pretty decent double correction about 15 in both instance since early 2016 here we have brexit and the election and then lift off after that other folks are saying look this is a similar box weve been in even though a higher to lower amplitude and now we broke out of it and very difficult to say that really were too far ahead of ourselves except on the short term because youve been kicking around for a long time simplistically without over thinking it fine the trend is higher at least for the moment until the chase happens. How will we get to higher prices what types of sectors. This is etf. This is the quality index. More defensive long term growth kind stocks. Thats a leader. One year basis its still maintaining a lead over the aggressive cyclical names. Catching up now. This is up 2. 5 today. Quality which is again more kind of traditional Growth Stocks is up but much less than the markets. Maybe this will close up these are both, by the way, pointing in the right direction. Doesnt seem to be an either or zero sum game. On a day where volume is pretty good for an update. Thanks we do get a market flash now on lyft. Reporter lyft announcing a Car Rental Service that will be starting here in the San Francisco bay area as well as l. A. Start as low as 35 a day with no mileage limit take a look at hertz and avis dropped on news. Lyft still lower because it raises questions about that path to profitability at such a low price. The company will also be offering 40 in credits to renters to get to and from pickup spots this is a story well continue to look into we reached out the hertz and avis and reach out to you if we hear back. Were looking for clarity on whats been agreed to. Senator warrens wealth tax plan could come up short to the tune of more than a trillion dollars. Well discuss with one of the architects of her plan as we head to break heres a check on bonds treasury yields getting a boost. Benchmark ten year note yielding just under 1. 9 , sitting at 1. 897 ri closing bell back after the this the s p 500 on pace to close at a record high on news of a phase one deal in principle with china. Were off session highs. Higher by 35 points at one point in this session. For more on the Market Impact of a potential trade deal lets bring in jason trennert. He joins us now on phone jason, forgive me if im a little skeptical feels like weve been here before why is the market higher believing this time this is real im not quite sure. I think we want to see the paint drier here before we make too many assumptions by the same token the president and administration have been signalling for a good couple of weeks here that something is getting closer and i think people are more of the belief its more likely to happen because its mainly in both countrys best interest. Last weeks employment numbers too may have prompted china to think a little bit harder on coming to table. If we remove these tariffs and thats the main crux of this phase one does it get us to a point of forward. Are we rolling back the pain we endured for the last year or so probably the latter the Economic Data becomes that much more important. Thats why for the last couple of weeks as weve seen Global Growth stabilize and get less bad thats why ive been highlighting that and watching that very closely because thats whats going to drive earnings ultimately well get past this trade stuff but we need to get past this jason, that point has been well made. Weve been living off these trade optimism headlines every morning and every afternoon. Whats the chance we see revisions to the upside at least for q1 my own opinion is whats not priced is in a roll back of some of the tariffs that have already been that already have been put in, and in a strange way, and you can say the president is either smart or lucky but hes in a position now where he can give himself shadow rate cuts in 2020 during an Election Year hes gotten the fed to do what it needs to do in terms of easing while i think a phase one trade deal is largely priced in, some sort of roll back of tariffs that already have been established is not priced in and thats part of the reason why i think there could be change in leadership mike santoli before was talking about how its been a quality rally at least recently. My own opinion is that the cyclicals have a good chance of picking up the slack and continuing to do better since they have in september jason, a question on the manufacturing stocks because they are the ones that are leading. They are the ones that took the price increases. If we see a roll back they have been rallying hard do you think theres more upside to this sector i do. Three months ago as a firm we were kind of we were hedging by having both growth and value, overweighted industrials and technology and reits and staples as a type of slow growth Asset Allocation right now weve gotten significantly more towards the cyclical stocks. We took out reits and Consumer Staples and increased financial. Were betting on a bottom on Global Economic growth since 40 of s p 500 profits come from outside the United States, some sort of agreement between the u. S. And china in some ways might accrue most positively to europe and companies that have exposure outside the United States. Well see how europe responds to all of this in the morning. Good to talk to you. Jason trennert when we come back we got your last chance trade. Shares of costco up nearly 50 yeartodate it will report results along with oracle, adobe and broadcom when closing bell returns. Dont get mad. Get e trade, dawg. 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. 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. Learn how homeowners are strategically using a reverse Mortgage Loan to cover expenses, pay for healthcare, preserve your portfolio and so much more. A reverse Mortgage Loan isnt some kind of trick to take your home. Its a loan, like any other. Big difference is how you pay it back. 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I like the 2020 set up i know its had a nice run theres more to go i think you have gaming which is 56 of their total revenues. They have new technology that gaming cycle as a result more likes to it and will be stronger than previous cycles. Data center is rebounding. Had a nice rebound last quarter. That is going Gain Momentum because ai is gaining more momentum they got the mellanox deal youll see buy backs when they close that deal. I think theres still more to go i was going to say do you wish you had the fall back i do. But i own broadcom i own land research. I own a lot of some names here and xpi has been a champ too i own a lot that i bought in the downturn and nvidia was never cheap enough but i was encouraged by their quarter and the product momentum they have in 2020 coming xpi was your last chance trade in september up 13 since then more to go there. Coming up next unin uninter interrupted trade. You should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. 12 minutes left in the trading day. Were now in the closing bell market zone. Commercial free coverage of all the action going into the close. Mike santoli is here to break down crucial moments of the trading day and today we have stephanie link here as well. Stocks are soaring today with all the major indexes hitting intraday record highs after the u. S. And china agree to the terms of the phase one trade deal at least in principle we hear, mike, were off the highs of the indices what does that the tell you . I think it tells you that the market is moving in the right direction. Maybe a psychological impediment it tells you how far the market has come in early october when we got news, the dow was at 26,000. A lot more room to celebrate right now the dow over 28,000, already an assumption we would get some progress. If theres a phase one deal and goes beyond principle is this a binary outcome . I dont know if its a binary outcome but the thing impressive to me, while the market has pulled back the cyclicals have held their gains i want tells the positioning still remains off side they own defensives. They are hesitant about owning cyclicals. For those groups, thats a binary for them for sure moving in the other direction is facebook. The federal government is reportedly weighing an injunction againstthe company. Stock is down almost 3 . Julie boorstin has the details reporter carl, the ftc is considering seeking an injunction against facebook as soon as next month as it looks to seek it to block how facebook integrates its apps. This according to a report in the wall street journal. Facebook shares moving lower on this news. Take a look at that dip. The stock now trading down nearly 3 . The report saying that an injunction could look to bar facebook from its plan to integrate these apps which would make it harder to split up the company in an antitrust case now as part of this antitrust inquiry into facebook the ftc has been examining facebooks acquisitions which include instagram and whats app got a no comment from the ftc and facebook on this report. Mike, does this really change sort of the Business Model for facebook besides changing how hard or easy it may be to break up the company i wouldnt say it changes it. But seems more real than the kind of hazy overhang of okay maybe there will be some scrutiny, maybe regulators will take a harder line if there was that much detail how they would change business practices. A lot of folks have this notion if you split up the company it would be worth more in pieces. The current investor of facebook doesnt want to make that leap of faith obviously a long way off if it ever happens ftc is actually one of the few agencies that deliver on what it talks. The margins are strong. They are expanding controlling their cost they have operating leverage thats why its trading at over 20 times because of this overhang i own it still like it. Not my favorite but theres an opportunity when it pulls back to buy it. Down 2. 7 on this news. Eight minutes left to go after the bell well get earning results from broadcom. Reporter Semiconductor Stocks broadcom is one of the more diversified names their results will be seen as a good gauge for at that broader chip industry. Now back in june broadcom lowered its forecast blaming the ongoing difficulties with huawei which was a Major Customer for the chip maker before the u. S. Banned exports to the Chinese Telecom player due to National Security concerns. Investors want to know where they see this relationship going with huawei in 2020. Shares of broadcom at a new 52 week high on these new u. S. China trade headlines your enthusiasm for nvidia translate to broadcom . I own it because its really cheap. Only up 30 yeartodate it yields 13 . When i was buying it it was almost yielding 5 great management team. People dont like this deal. I get it this was better than expected. So i just think everyone kind of poopooed the deal i thought it was an opportunity and still like it. Well see what happens after the close. Whats most important for you to look for in those earnings. Sure. I think semiconductors is their biggest piece. 70 of their revenues. There will be gradual improvement. But data center should be okay and improving in 2020. Well see what they say. We got to get clarity. I think its 10 well have to see. Well have our eyes peeled on costco a report after the bell. Erratic . Reporter costco reports a few minutes from now theres less surprise. Costco gives monthly up dates. Same store sales is up 4. 3 . Up 5 when you take out gas and Foreign Exchange this wont include black friday or cyber monday. The quarter earned one thing to watch are profit margin numbers back to you. Thank you very much this is an interesting one as eric points out. We still hear from them monthly so we have a sneak peek into what they will report. Not a surprise margins are important. We won get much more about the holidays shouldnt be a surprise which is why it sells off on the quarter. Always does. It is expensive. I do worry about that. I really do. As i said many times every time i jump i regret. Membership fee income is key well see what that number is today. Lets see what retention rates are for those memberships. So those are two key items if its me, it will recover because its a Great Company this has had a big run up over 50 it always seems to kind of be running away from you as a stock. It has benefitted from this preference for quality, management team, domestic. Its even kind of this sort of Small Business play. Not really just sort of hey do they have the stuff thats going to be a hit this season for retailer i mean you dont buy it because of valuation you buy it for consistency. Obviously a staple but could be discretionary because they do sell other items that fall into those categories and building the Online Presence and growing just in general their operation for the stores and the dotcom business thats one of the reasons i bought it. I didnt think you had enough growth from staple stocks but got better growth from this one. It was trading very similar to he some of the conservative staple stocks. The nasdaq, mike has more on the market internals generally positive. I wouldnt say overwhelmingly. New york stock exchange. Up versus down stocks. Not even 2 to 1. Index type move all the index being pushed higher, people grabbing for exposure. New highs versus new loss definitely improving consider where we were 52 weeks ago. Definitely a tail wind there you see 9 to 1 or 8 to 1 as a ratio just take a look at another Risk Appetite banks against utilities over the so far in december and you see here you go banks finally getting some lift today. Utilities have hung in there yields have not moved too much but now its the higher yield beneficiaries versus the low yield. The conventional wisdom has been if we get a deal is sell on the news given the volume and breadth is that narrative busted . I dont know. Be interesting to see. It goes back to which sectors will be the leaders. Thats whats happened all year long sector rotation led us higher. Sometimes defensive, sometimes high quote, sometimes cyclicals. Be interesting to see which stocks participate i think it will be the cyclicals. Well see. Had a nice run off of those. Got to get through tomorrow as for fixed income and bonds what a day two minutes to go. Lets go to rick santelli. Reporter hi, carl. No matter where you looked on the curve and no matter what countrys curve you looked at zoom, zoom, intraday of two. To go third year bond which i gave a a plus. Price fell investors ran to buy them. Up eight basis point ten year is up ten basis points. And if you look at the bund you can see whether it was europe anywhere overseas and markets that are open and markets that will open will reflect this. Dollar versus yuan is a big down per that, nothing but green as far as the eye can see reporter tech the driver chips once again at all time highs. Apple at an all time high. The trade headlines, will that help also concerns from Credit Suisse that perhaps once again well see some weak china iphone sales. Weve seen all time highs on the nasdaq which today are shrugging off the passage of that nancy pelosi drug bill that would allow the government to negotiate drug prices not seen going anywhere beyond government lululemon sitting out. A bit of a sell off postreporting today over to bob. Reporter record highs for the s p 500, per that, almost 200 new highs here at the new york stock exchange. Nice expansion of new highs. Thats capital you want to see the key here is whether or not there will be cuts to the existing tariffs why . That will improve the earnings outlook for 2020 thats what really motivates the market were just off of the highs. A lot of new highs today particularly the banks eight, nine basis points move up in bond yields yield curve steepening jpmorgan new highs Illinois Tool Works another big global industrials at 52 week highs. We are closing the day just off of the hires but its a record, 3168 alltime record for the s p 500. Welcome to the closing bell. Im quintanilla in for wilfred frost. Im Courtney Regan along with mike santoli take a look at how we finished the day a wild dayton wall street. The dow will finish higher well see if we get that record close. S p and nasdaq for sure with 29th record close of the year. Russell 2000 as well as we look for some clarity on trade headlines. We are still waiting earnings from broadcom, oracle, costco and adobe. Well bring you those numbers and instant analysis as soon as they cross we do have some breaking news on boeing and for that well turn once again to phil lebeau reporter carl, earlier today boeing met with the faa and the ceo of boeing was told by the faa, you know, lets slow down on the timeline for the max returns. American Airlines Announces it will push off its plan to put max back in service until april 7th. It was previously expecting to return to service in early march. So now as you look at the three u. S. Carriers that have the 737 max southwest and united planning to bring it back in by early march but now you have american saying nope off the schedule until april 7th one last thing, guys this means that for american it will be without the max for more than a year. How much of a toll has that taken on the schedule . By michael can you allocation, back of the envelope math almost 50,000 flights cancelled in the last year that american was planning to use the 737 max for. Guys, back to you. Wow, what a big stat. Thank you very much. Just another thing for you to follow here today. Joining us to talk about the rest of the market day, stephanie link along with michael zinn were going to turn, mike to you give you the first comment we got record closes for two of the major averages the lead after was significant. The market had been trading firm and doing these short brief pullbacks for a couple of weeks. Today incremental good news on trade was good enough as an excuse for a lot of people who were hesitant or fighting against it or hedge against a bad outcome. Whether this is a culmination of the rally or not i dont know. I long thought the best time for a trade deal is some day out there in front of us because it was always a carrot in front of the markets. Right now the action seems its favorable. People want more exposure. Michael, what do you think . Is this an incremental move or is this something bigger than that could be bigger i think the pain trade could be higher because you have so many people on the sidelines. So many people say well wrap up the year and not get more involved now you have an incremental surprise days like this when you get surging stock prices and surging bond yields at the same time you look at november 2016, 2012 that can be a good bullish sign so you may have more to go oracle is crossing. Josh lipton with a look at these numbers. Reporter so oracle reporting 90 cents a beat on the bottom line the street was at 88 cents revenue just missing 9. 62 billion street was looking for 9. 65 billion Cloud Service and license support thats their biggest segment. Cloud revenue but also does include maintenance fees for Traditional Software 6. 8 billion in the quarter and license 1. 3 billion. This Company Offers guidance on the call that kicks off at 5 00 p. M. Eastern and well be on it guys, back to you. Mike, coming up crm a couple of weeks ago a few concerns about the enterprise are hard to stamp out. They are. Oracle has got very, very broad exposure not the Fastest Growing segment because they have a lot of offsets. The stock is well off itshighs that will change that story. Stephanie weve seen oracle come in. They had a lot of buy backs. How much can we read into . Probably buy backs. Cloud was a little light ate little bit surprising. Enterprise has been soft thats definitely the theme for this entire software kind of theme this quarter its not that surprising stock is cheap i feel like its always cheap. Like its been in training camp. It cant break out people are spencle about its strategy because it isnt leading to superior growth versus their peers its a name i have owned in the past got burned not again. Everyone stick with us. Well get back to Kayla Tausche because she has more for us on trade. Reporter we are still awaiting the outcome of the president s trade meetings in the last two hours he met with the principals who have been negotiating on behalf of the white house he met with a handful of ceos who have a particular interest in the outcome of this dispute with china including the ceo of the Business Roundtable and the chair of the business round tables trade committee who is the ceo of cummings a company that pays about 150 billion in tariffs on an annual basis the expectation going into this meeting the u. S. And chinese negotiators reached a deal in principle. That awaits the president s sign off which remains the wild card in these situations. One source close to talks said President Trump had been pushing for a higher number commitment from china on agricultureal purposes approaching that 50 billion mark which china had previously been reluctant to commit to. Well see what news we get before the close of Business Today and whether it, in fact, confirms that the president as his tweets and public remarks in the last 24 hours have indicated if he is, in fact, ready to make a deal guys kayla, thank you very much. Well let you get back to it you know, michael, weve been talking a lot about Technology Stocks individually as they report here but in general tech as a sector has been so strong going into 2020 trade deal or not where will tech fall you cant rule it out i think they will share the stage more this year they were in a class sort of by themselves. Yet again were seeing days like today more cyclical participation. If we continue to see sort of the fed beyond hold i think that you can get broader participation. I wouldnt rule it out i think what were seeing from reports is you need to see top line growth continue for those kind of leadership names to really continue. On trade do you think snap backs, penalties if they continue to follow through, will that help the market in quarters to come . I think certainly the market has learned to take these trade announcements with a grain of salt, maybe even a big grain of salt i think the most underlying thing of the week the fed still being super supportive thats the Baseline Foundation of the broad market strength we typically bought on the trade bad news and tried to fade the good news a little bit just because theres so many puts and takes so were not hanging our hat completely on that today is encouraging what about when it comes to the rest of the world as we think about Economic Growth and if this trade deal happens does that get rid of a overhang for many interconnected global countries. It depends on how the rest of the world performs yesterday we saw the dollar weaken a lot you could have a real interest in overseas investing. You have to establish that and thats based on sort of continuing to see european pmis and, you know, asian pmis beginning to curl upward and stay there i think its early personally for that to be the conviction but obviously an interest in that happening we have some more news out of washington this time on a potential budget deal. Reporter republicans and democrats say that they have reached a tentative deal that would fully fund the government through the end of the fiscal year treasury secretary Steven Mnuchkin was on capitol hill earlier today to meet with the top appropriateors in the house and senate and work through the major issues such as the border wall he said he would be updating President Trump this afternoon unclear if he has done that yet and if the president will eventually sign off on this agreement, but lawmakers here on capitol hill are telling reporters they are down to brass tacks on this. They hope to hammer out the final details by the end of this week and put it on the floor for a full vote before both chambers next week way before the government runs out of money on december 20th. So many tentative deals or at least deals in principle. Adobe is out were looking at the top line numbers. Jon fortt has that reporter adobe has a beat for fiscal q4 on the top and bottom lines slight beat on the top 2. 99 billion in revenue versus 2. 97 expected earnings per share came in at 2. 09 versus 2. 26 expected. On the guide for fiscal q1, revenue could be seen as a bit light but pretty much line 3. 04 billion. The street was looking for 3. 09 billion and the gap earnings per share projection that adobe is giving for the Current Quarter right in line at 2. 23 looking at the quarter and where they outperformed, their Digital Media overall annualized recurring revenue came in dlarts 8. 4 billion versus 8. 33 expected well listen to hear more on the call adobe did give a pretty rosy and bullish analyst presentation back at the end of october, which made people feel better about where the company is headed in 2020 the stock has rallied since then after this report its up a couple of percent, guys. Thank you very much tonight on mad money jim cramer will talk to adobe ceo about these results. Thats coming up at 6 00 p. M. Eastern time mike, this stock has had a pretty nice run up 35 this year we still dont know as much about the acquisitions and what that means dont know that the reason the stock trades the way it does is because of predictability almost like this broad subscription to the internet pretty close to its highs already. On a day where microsoft hit an all time high and we talk about monopoly power but some battles are going on especially in design and software absolutely. It did lag the overall markets it goes back to, do you want to pay 25, 30 times for decent growth and adobe has 25 recurring. Are investors into that investment at this point i dont necessarily think they are. Your seeing rotation into cyclical names, cheaper names. Great companies, absolutely quality compounders and a place in your portfolio for a lot of them but i under the reaction today that adobe is very muted and thats why microsoft does lag. Been great stocks. Maybe not at this moment thank you Stephanie Michael youre sticking with us. When we come back steven roach is with us and break down these trade headlines were getting. Awaiting earnings from badrocom and costco closing bell is back in 90 seconds. Re 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. Santoli is back with his third dashboard of the day investors move, gets marked to market. We get the Weekly Survey of Investor Sentiment this shows the bulls versus bears. Bulls basically means you expect the market to be up in the next six months its picked up still below 40 . Bears down opinion as you would expect markets trend up towards the highs. Obviously before todays move. Look at the level. Pretty much par for the course, nothing extraordinary. Not at extremes. This is the one that stands out january of 2018. Were no anywhere close to that. This would suggest people are feeling better about the market but not something you say oh, oh, theres a yellow flashing light. Would you pay more attention to things like this, or all the headlines were getting about flows especially for the yeartodate flows is kind of the background story where theres just this persistent trend towards an undertow of outflows. However in the last couple of week outflows have picked up and theres the prospect people say i got to get in and maybe well have another rush in january. Thats what you would look for. Steven roach weighs in on trade headlines and whether they will park a year end rally economist behind Elizabeth Warrens wealth tax will respond to this new study it will raise a trillion dollars less than expected closing bell will be right back everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. And save even more when you say bring my own phone into your voice remote. Thats simple, easy, awesome. Click, call or visit a store today. Welcome back to closing bell. Broadcom earnings are out. Reporter courtney take a look at shares of broadcom moving higher by as much as 2 in extended trade thanks to a four cent beat on its bottom line revenue came in higher than the street anticipated, revenue up 6 from the prior year period. The company saying despite a Challenging Market backdrop for our Semiconductor Solution segment, record profitability in fiscal 2019. Raising their dividend shares have come off the high fractionally back to you. Lets bring in Senior Analyst over as susquehanna international. Where are expectations and whats working sure. We think there might be a little bit of confusion here on the result just because some analysts have included samantha their most recent acquisition and some havent if you include the semantic for the full year its light maybe lighter than expectations. But besides that dividend and that dividend raise is actually perhaps a little bit better than expected, so maybe that has some long term investors. Integration friction . Its a little unclear right now very limited information. This often happens when they integrate companies. You see a little bit of friction to your point. Well have to wait for more on the call here. But usually things start to settle out, you know, oneor tw quarters in on most of these broadcom acquisitions. How about the ca deal some say its working out better than expected. Ca is working out better than expected the new pe company, publicly traded pe company is actually working out pretty well as they move from semis into software. How you really should view and categorize this company. Should you expect them to continue to roll up these mature tech businesses and kind of diversify away from the core i would expect more acquisitions hawk is somebody who understands scale. So i expect him to do more software acquisitions, and then if you look at semantic and r and d in the 20 of revenue, the average for broadcom is 3. 5 , sga, for example, they just can get rid of a ton of costs. They got all this scale game got rid of cost and thats the game plan. Are we done with chip makers fighting where we are in the supply chain cycle were never done. This past couple of quarters hat been mindboggling, the disparity of opinion absolutely. Were of the opinion, we track lead times, we track a bunch of data that we are coming out of this it is slower than expected but we think a bottom is in. Were starting to see that today with trade, for example, you know, if they put a real deal on the table thats a huge accelerator for coming off the bottom when you look at this group you have a buy on broadcom and have since 2017. How does it fair with some of the other names in the Semiconductor Group . This game plan is actually working. This scale game. Go in there, cutout all the costs, buy these defensible businesses that are number one or at least number two in their position and its working money is so cheap right now to borrow you can buy almost anything. Cut the costs out of it and ultimately make money and hawk has been doing it now for ten years. Well, chris, thank you for being here broadcom shares are higher by 1. 2 4 yield. Costco, working our way through that reporter stock is up a little bit here after hours. Pretty inline performance earnings per share one penny beat 1. 73 street was looking for 1. 72 on the revenue side a little bit of a miss. Remember we had the information month by month already so what we didnt know was those membership fees. We already knew the net sales. Now were getting the membership fees as it gets us to total sales a point from the company that half a percent is the hit that they are taking because thanksgiving is a week later so youre not seeing those numbers here and ecommerce sales up. The stock was down but now up just a second ago. Back to you. Thanksgiving, mike, has been such a strange wild card in retail comps as you well know. It really has obviously, you know, analysts should know every single spring easter shift becomes the story too. I think this is making a little bit more noise doesnt change the overall picture of costco being roughly in line, and its a pretty muted, you know, wall street sentiment towards costco the valuation feels rich to everybody and they keep plugging away you see a slight sell off were down for costco. Steven roach tells us whether he thinks investors can believe in these latest trade deal headlines thats next after this quick break. So what are you working on . Im searching for info on options trading, and look, it feels like im just wasting time. Wasted time is wasted opportunity. Exactly. Thats why Td Ameritrade designed a firstofitskind, personalized education center. See, you just oh, this is easy. Yeah, and thats oh, just what i need. Courses on options trading, webcasts, tutorials. Yeah. Their awardwinning content is tailored to fit your investing goals and interests. And it learns with you, so as you become smarter, so do its recommendations. So its like my streaming service. Well exactly. Well except now, youre binge learning. Oh, i like that. Thank you, i just came up with that. Youre funny. Learn fast with the Td Ameritrade education center. Call 8662967451 or visit tdameritrade. Com learn. Get started today, and for a limited time, get up to 800 when you open and fund an account. Thats 8662967451, or tdameritrade. Com learn. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. He borrowed billions donald trump failed as ang ibusinessman. E tokyo. And left a trail of bankruptcy and broken promises. He hasnt changed. I started a tiny investment business, and over 27 years, grew it successfully to 36 billion dollars. Im tom steyer and i approve this message. Im running for president because unlike other candidates, i can go head to head with donald trump on the economy, and expose him fo what he is a fraud and a failure. Lets take a look how we finish the day on the closing bell big board. Major averages closing higher u. S. Reaching phase one trade deal with china. Below that you can see the best performing sectors financials, energier and materials the leaders. Utilities and Consumer Staples finishing as the worst performing sectors of the day in an up market time for cnbc news update with sue herera. Thanks so much. Heres whats happening at this hour the number of vaping related illnesses across the country increased again. The cdc says there were 2409 lung injury cases and thats a rise of 118 from last week there have been 52 deaths in 26 states and the district of columbia the Justice Department says ten former nfl players have been charged with defrauding the leagues Health Care Benefit program. They include five former players on the Washington Redskins including Clinton Portis and carlos rogers. Numerous individuals including the nfl players involved submitted claims for Durable Medical Equipment including items for more than 50,000 on a single claim. But no equipment was provided. Scientists have discovered a huge new species of dinosaur that lived some 70 million years ago. The bones are on display at th National Signs museum in buenos aires. It is being called one of the last giants that lived on earth. That is so cool and so exciting. That is the news update at this hour carl, back to you. Sue thank you very much were awaiting some clarity on these trade headlines coming from the white house cnbc reports the administration has agreed to a phase one trade deal with china in principle pending the president s approval lets bring in Stephen Roach he joins us on the phone stephen, always good to talk to you. Good afternoon hi, carl, how are you youre so good helping us understand the calculus from the chinese side what are they thinking today look both sides want a deal for their own political reasons. The president is obviously under some political pressure in this country and, you know, xi jinping has waged a long and protracted trade war with the u. S. With obvious consequences for the chinese economy. So they would like to bring an end to this. And, you know, its not clear this is the end unless its taking the announcement at face value which is always risky, even with the imminent conclusion right now i mean its definitely good news to cut existing tariffs and defer the ones for december the 15th but i think you got to look beyond that, the good news, and recognize that the main feature of this socalled phase one trade deal is that it focus on narrowing the bilateral deficit between the u. S. And china in a time when we have multilateral deficits with over 100 countries. You cant fix a multilateral problem with a bilateral solution the chinese know this. Most economists know this. But politicians really dont seem to fathom this disconnect how much room do you think that the chinese have to give when it comes to things like ip theft . Are they going to budge here at all in a way thats substantial for the United States and some of our companies i think what theyve announced thus far, courtney, on ip, establishing new ip courts, modifying their Foreign Investment law to deal with their version of the Technology Transfer issue is pretty much all youre going to get. So i think this phase one deal will not really include major new breakthroughs on the key structural issues like ip Technology Transfer or innovation policy. There may be, i think, a large provision on a new currency accord but thats a relatively meaningless accomplishment its politically convenient but really doesnt give us something we dont have already. Why dont we have ag. Weve been hearing about these problems, they wouldnt commit to a purchase on paper, they thought it ran afoul wto rules they thought it was more than their companies needed do we have any idea how they would have worked around that . No. I think at this point that remains to be seen, carl you know, they committed 40 to 50 billion dollars of purchases. Not all of them will be ag theres clearly a new need for chinese to deal with their short first of all hogs given the outbreak in the domestic swine market in china, so that could add a little bit more. And energy, liquid natural gas could be part of it. Its going to be really difficult to move up, i think their maximum purchases of Agricultural Products prior to this dispute is somewhere in 25 to 30 billion range so to really move it up significantly beyond that is going to be problematic. Well see looking for hard numbers although the tape has some reports suggesting the president has signed off were waiting for confirmation on that. Stephen, thanks. Good to talk to you. We have a news alert on airbnb reporter airbnb announcing it will close out this clear collecting 2 billion in occupancy taxes and the majority of its Outstanding Litigation in u. S. Cities. Regulation, not profit may be one of airbnb Biggest Challenges as it gets ready for 2020 listing and complying with new rules. Listing in some place could dent investor appetite as growing cities look to policing house sharing. Back to you. Thank you very much. Coming up, fuzzy math. A new stewy finds Elizabeth Warren wealth tax will raise 1 trillion well get reaction from the economist behind her plan later on the closing bell. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. What a day for the industrials. Dow closes up 220 and change almost every component green with the exception of boeing and 3m well sends it over to mike santoli for his final dashboard. This one takes a bit of an explanation. Veblen good. Reverse of normal economics. Usually considered to be better or higher quality, higher status the more the price goes up this is average share price of an s p 500 component over time back in the 90s around 30 long term average was a3r0u7bd now its up above 135 now. Stock puts have gone out of style. Its the vogue for Big Companies not split their stock, four digit stock prices are not unusual. Now part of that is because you dont have to split the stock to allow smaller investors to own 100 shares now flat fee free trading. Passive investing as a role as index funds passive is the way people engage with the markets 45 is now in passive right now. Hasnt changed overall Share Trading volumes if you measure volumes in dollars people look at the number of shares traded on a given day thats been in general decline this is is the dollar volume as a percentage of market cap and basically been fairly consistent over the course of this bull market when the market gets dramatic like in 09 it goes up kind of interesting. News today robin hood, allowing fractional shares of stocks. Makes you wonder if maybe we do get that number of households that have shares of stock in this country starts to go up maybe a little if you have that kind of tool it could happen. Right now very much people just buying exposure to index funds is the automatic thanks, mike. Getting a market flash reporter we are watching shares of centene move lower its largely below estimates ceo calling next year a transformational year as they focus on acquisition of well care cutting its 2020 guidance does not exclude does exclude the pending well care acquisition. Of course were keeping a close eye on these health care players ahead of the 2020 election watching centene shares trade down by 2. 6 back to you. Thank you coming up next behind warrens wealth tax a new study showing the democratics plan could come up short coming up on fast money top strategist will break down these trade headlines and what they could mean for the market dont go away. [narrator] at Southern New Hampshire university, were committed to making college more affordable. Thats why were keeping our tuition the same through the year 2021. [woman] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. [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. A new report out today questions the numbers behind Elizabeth Warrens wealth tax. The model projects it would only raise 2. 7 trillion often years. A trillion less. Earlier today on the exchange the author of the new study explains why he thinks so few countries use a wealth tax the other countries had some problems trying to raise money because there are ways of trying to avoid the wealth tax. What other countries have found and the administration has been very challenging its much harder to tax a stock of wealth than it is too tax the income that comes from that wealth. Joining us is now is berkeley economics professor that helped develop Elizabeth Warrens tax plan you are also the coauthor of the injustice of wealth. Im sure you have read this new study out. What is your biggest criticism of why they are not right . What do you think why do you think, i should say your original plan is still accurate . There is a lot of wealth at the top. Top 0. 1 americans own about 24 of total u. S. Wealth the 400 richest families according to Forbes Magazine alone own 3 trillion in wealth. What the study does is essentially they assume that its almost impossible to tax billionaires if you tax billionaires, according to that study, more than half of their wealth would vanish, tax evasion. I dont think that assumption is correct because the wealth of billionaires is very visible we know what the wealth is of Mark Zuckerberg or jeff bezos or Warren Buffett i dont see how they can hide more than 50 of their wealth. Thats the key problem with that study. Maybe they wont hide it but they can do legal things to move it out of the United States. It hasnt worked in a number of European Countries yes, but see the difference between the u. S. And European Countries is that in the u. S. If you move abroad, taxes follow you, because your tax base and citizenship. Whereas in europe if you move to a low tax country then you can avoid the wealth tax because the taxes in europe are not based on citizenship, they are based on residency. Only way for rich american person to avoid the wealth tax would be to renounce u. S. Citizenship which is an extreme move and theres a steep exit tax upon citizenship renunciation critics of the plan point to the irs and their inability to even collect on taxes that are owed today and not much less taxes that would have to be reexecuted year after year after year. What gives you the irs can do that and execute this plan even if it were adopted look tax avoidance, tax evasion is not laws of nature. These are policy choice. We can have policies that encourage tax avoidance. Theres been a big decline in rates, decline in the irs budget now if the political will to enforce taxes on the very wealthy increased, that would come with more resources for the irs with higher audit rates and that would allow to reduce tax avoidance and takes evasion to much lower levels than the current levels there are effects to these plans and this new study says that the impact on the economy could be actually pulling back on growth by somewhere between 0. 9 and 2. 1 by the year 2050. Whats your response to that i think it all depends on how the tax revenues would be used if the revenues are used to fund things like child care, prek education, that would actually perhaps boost growth because it would make it easier for young women, for young parents to work and to be part of the labor force. So thats what matters how the money is used. I think the most likely outcome of such a wealth tax, if it was used for education, used for health care would be to slightly increase the growth rate of the economy rather than reduce the growth rate of the economy i know youre not a political operative but i wonder if you think the plan as its been proposed has had anything to do with what some say is her collapse in the polls . When you look at opinion polls on the wealth tax, when you see that an overwhelming majority of americans the actually support the idea of wealth taxation. When you ask voters for instance do you support a wealth tax of 2 above 50 million, 70 of americans respond yes, including not only a vast majority of democrats but also majority of republican voters. So this is a hugely popular policy idea. This is going to be very interesting to watch unfold. Now we have another billionaire running against Elizabeth Warren with mike bloomberg. Thank you for being with us. It has been a busy afternoon for earnings were digging in on some of the biggest movers when we come back your wall street look ahead the key things that every investor needs to watch as we head into a new trading day tomorrow when closing bell tomeach day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Cme group servicenow put our this changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. One of the businessest after hour sessions of the we can. Broad come and adobe higher after beating wall street earning expectations a and costco under pressure after lower than expected fees. A pivotal day in the uk election day wrapping up across the up and down. We take you there live with a rundown of everything u edyone to to know the results revealed when closing bell comes back. Welcome back to the closing bell. The dow finished higher by 220 points off sessions highs and it not make a record. We did see record closes for the s p appear nasdaq. Wynn the lead stock higher by 9. 5 on the s p 500. Sysco leading the dow higher retail sales number due out tomorrow court noy has a preview. First the uk wrapping up election day, the exit poll set to be released any moment. Vil an marks joins from us london with more hey, vil am. After a fiveweek Long Campaign boris minister hoping for five years in office if his party win a majority he called the election trying to unlock the Parliament Deadlock in the building. He was unable he thought to get the brexit deal passed echted that done by the end of october. Didnt happen. He pushes for it to happen at the end of january thats what markets will be watching closely whether he gets the majority that allows that. If he doesnt, we could see more uncertainty if labor come up with a surprise, the Opposition Party in the uk and end one a majority they have said they would seek a second referendum on brexit. Villan thanks for that interesting to watch in the few moments. Retail sales out foam in the u. S. War we looking for court. Of course, remember the late thifgt we are not seeing a ton of holiday action in the numbers. But still expected to be a decent report. Jeffreys expects strong auto sales. And the beginning of what looks like to be a strong Holiday Shopping season. The first couple days at least skens sus for november retail sales to improve about 0. 5 from october. Remember this is month over month. Stripts out auto sales number. When you strip those up up 0. 4 both stronger than for the tolling. Not all economists are convinced its a superstrong report. High frequency economics thinks the labor market will prop up the consumer but expects spending to low in the Fourth Quarter in total from the third. So were watching that closely this is a very important Holiday Season as the consumer remains the lynch pin of the economy all right and the rolling threemonth ample slowed from the first part of the year, right. It really has there is noise in some of the numbers of course. But well see what happens. Its been hard to make the case there is a lot of pent up demand its like okay incomes are up and steady state but not necessarily a surge. All right so on deck wilfred frost once again of an exclusive with Morgan Stanley james gorman. Happening at 3 00 p. M. On the closing bell as we see financials, mike a nice segue and how they are beginning to play in the market. Theyve hung in there very much in an uptrend. Broke into the lead to some degree even though they are a popular schois and basically, you know, less cheap than everybody was saying they are so cheap it fits in tune with everything. Right now the overall market had the full day to kind of reprice according to a high probability of a lifting of the tariffs. If we dont get it tomorrow, i just sort of wonder if we are just idling and you know maybe even get a little anxious. I was going to ask what happens tomorrow its also friday, the last trading day until the september 15th deadline. There is the undercurrent before we are not sure the volatility index under 14 now. But with the market at alltime highs, no pullbacks, the way it traded it should be under 12 there is still the margin of yeah not willing to say its all clear for now. Youre not saying the year is over yet, are you. I dont think so. Just based on market rhythm and the fact we havent had a lot of intraday jumpiness or day to day jumpiness. You would have expected it to bleed lower if not for the known catalyst. 20 days left in 2019. That does it for closing bell. Thank you for joining us here today. Fast money begins right now. Thats right live from the Nasdaq Market site overlook new yorks famous times square, this is fast money. I Brian Sullivan in for melissa lee and your traders on the desk tonight are tim seymour, chris ver own dan nathan guy adami and joined by mike wilson Morgan Stanley chief equity strategist we call it six men in ties tonight on fast money stocks surgeon of trade break in china. S p and nasdaq hitting alltime highs but why not more positive reaction to something weve been waiting for a linc time . Plus the chips are up. Semis steaming, the new records, but is there any value l