Transcripts For CNBC Closing Bell 20240713

Outlook. Congress is on track to pass two massive spending bills averts a Government Shutdown and new data shows Home Building increased more than expected in november and permits for future Home Construction surged to a 12 1 2 year high. Joining us for the hour, is keith bliss from i hue capital llc. The Housing Starts number comes in, just one more optimistic data point on the data front and i think despite trading on the alltime highs, this market is still poised to go higher thats my belief what drives that . Theres lots of factors, which i know well talk about during the hour. But the continued strong Economic Data that were getting out of here, a very compliant and easy money fed that we have, theyre expanding their balance sheet. Low inflation around the world the need for capital to go where it gets rewarded and seek yield. All of these things, you throw them into the mixing bowl. Once again, all three of the major averages higher. Only slightly higher, but anything positive is a record. Lets focus in on the big stories were watching today boeing planning to halt production of its 737 max plans. Phil lebeau has the latest on that story for us. Steve liesman has a look at how production delays. And mike santoli is tracking walmarts sentiment on the stock overall. Phil, lets start with you as we told you yesterday, boeing would stop production of the 737 max in january and the question becomes, how longwill the production line be down. Most analysts think it will be likely a couple of months, which sets up, what can you expect if youre a boeing investor for the First Quarter and the second quarter. Ramping up of production, likely it will return in the second quarter. Thats just the estimate at this point. No layoffs are planned as of right now, but if this is extended, that might change. Theres a gradual delivery rampup once the plane is approved again by the faa. Meanwhile, Airlines Continue to slide back their dates for returning the max to service southwest is the latest. Today, it pushed back bringing the max back until april 14th. By the way, southwest max cancellations, if you go back from when it was first grounded, theyll top more than 50,000 take a look at shares of boeing. Analysts are down in terms of what theyre expecting for the remainder of this year in terms of Free Cash Flow, but guys, if you look at all of these analyst notes, all of them say the same thing. Eventually when these planes are delivered, they expect that Free Cash Flow to come back, whether its later in 2020 or moved out until 2021 lets get to Steve Liesman and take a look at how boeings production halts could affect gdp. Steve . It may be hard to imagine, contessa, but economists forecast this decision to halt production of the 737 max is likely to have a measurable effect on u. S. Economic growth in the french quarter. And the negative effects could be larger than the Government Shutdown last year forecasts say the production could shave as much as a half point off First Quarter growth Morgan Stanley looks for a 0. 8 percentage point hit the problem is that the First Quarter was already looking weak now it could come closer to 1 instead of the forecast 1. 6. Growth will rebound when production returns, but when is an open question Morgan Stanley writing in its commentary, assuming production ramps back up in q2 20, we would expect to see more than a 100 basis points boost. For now, they wont lay off, but if the stoppage grinds on, suppliers can find it tough to hold the line and eventually boeing could as well, contessa theres a lot of expectations and forecasts here is there any ndication, steve, what the impact has been of slowing production so far . Yeah, its kind of interesting. Theyve gone from 52 to 42 planes and the estimates are that thats taken a tenth off of gdp. The reason why its so little, boeings not shipping stuff, but when they make a plane that goes into inventory, so no add to shipment, but an add to inventory. When they stop production, that blue line thats going up, that goes away and all you get is the production decline and thats why theres going to be a bigger measurable impact, because the add to inventory from the planes being produced and not shipped will no longer occur, contessa thanks, steve lets get over to mike santoli now for a look at what wall street has been saying about boeing of late mike wilf, obviously, the groundings have forced analysts to play a little bit of a slower ground game when it comes to expectations for boeing. If you look at the breakdown of analyst ratings, its been a grudging moderation of enthusiasm over the course of this year. One thing i want to highlight first of all is how beloved the stock was back in january. That was before the second crash and the groundings 83 of all analysts say buy the stock. Now, we did have this ramp into march. So the stock really did confirm that bullish take. And youve seen it just slowly, the yellow is basically hold ratings, so right now, its somewhere around 50 50 still, though, the gap between this green line, the price target, consensus price target and the current price, its about an 18 upside from here. Clearly, theres still a sense out there that the market could come back to boeing. This was also coming off of multiyear extremes at the very beginning of this year thats at the most expensive the stock has been in longterm a couple of decades. And there we go, at the beginning of this year, it was well over in the mid20s in terms of a forward price earnings multiple, its premium to the s p 500, also at a record and look at how that has bled away right now, its actually trading at a cheaper, nominal valuation than the s p 3 however, one has to expect that perhaps 2020 earnings estimates are going to come down. So perhaps that p\e is not quite as low as it might seem cosmetically right now, folks. Mike, thanks very much. Stick around just want to go back to phil because on these discussions about what the analysts are saying, phil, about boeing, at the moment, is it fair to say that theyre all still just saying this is a question of delaying clothes and profits coming back online as opposed to any longterm shift in market share that boeing might have in commercial aircraft. Correct in terms of market share, nobody is predicting that, look, this is going to hurt boeing. Youre going to see customers canceling big orders sure, there might be an order here or there that is converted from a max into a 787. And weve already seen that in the last nine months but we have not seen mass cancellations. The backlog, wilf, it remains at around 4,400 planes. Keith, lets talk about this. Are you surprised that there is no analyst that has a sell rating on boeing im not surprised, because it still remains despite the problems with the max jet, it still remains one of the bestrun companies in the world when you take a look at it certainly, management has made some mistakes. They got the timing wrong. They were not completely transparent when the first accidents occurred you talk to some attorneys who sue boeing for a living. They know that theyve had problems with this plane for over a year and theyve never came out of it as far as boeing aerospace, the company writ large across its entire product mix and what does, its still a very strong company. Having said that, the longer this goes on, the worse it becomes for boeing, obviously, as phil was pointing out, theres an earnings picture that we need to be worried about. Theres reputational risks that will continue to erode away. For right now, theyre taking a waitandsee ttitude mike, was boeing one of the industrial stocks that did trade on china news, if we go back a year or so before all of the 737 max issues, such that if and when it gets through the current issues, does it have a little bit of a trump trade deal bounce to enjoy, that it hasnt had yet . You know, wilf, not in a pronounced way it was not really one of those big global industrials that was at the center of the idea that the tariffs was a big impediment, simply because the global due o duopoly was prmett in place i dont know if you have that pentup relief can you explain a little bit more about this support for suppliers . You mean, in terms of why the stocks have not been hammered more or what boeing will be doing with it . Yeah, and boeing says that theyre going to support these suppliers during the halt in production what does that mean . What does it look like how long might that last well, more than anything, boeing wants to make sure it has a stable supply chain. It depends how critical they are to the 737 max take a look at company like Spirit Aerosystems boeing worked with them when they initially brought down their production, when boeing brought its production from 52 a month down to 42 a month, it worked with spirit to say, look, can we keep you building fuselages at 52 per month, which has been the case for Spirit Aerosystems. Boeing will once again say, okay, what do we need to do to mitigate how disruptive a drop in production would be for a company like that . Or for other companies that have fairly large exposure to the 737 max. Thats the biggest concern for boeing, that they have a supply chain that when they ramp up production again, the supply chain will not be able to meet that rampup, as well. Whats your sense that theyre just weighing this out on sheer numbers and saying, its going to cost us more if we allow these suppliers to stop their own production lines and have to pay to start them back up again versus keeping them in business . Its not just a matter of cost, its a matter of how much flow they can have through that supply chain and we use the term disruptive, when you look at the aviation industry, you do not want it to be lumpy stops and starts. Thats when youve got a lot of problems thats when you increase your costs. And for boeing, one of the things that they have been experts at for years is managing that supply chain. And thats why this is a crucial part of the stoppage in production of the 737 max. This will be the test for them can they keep that supply chain as smooth as possible . And phil, just one further point. I mean, i know steve broke down the impact, which is significant, of course, on usgdp, but its not as simple to say its all europeanbased. Theres a lot of european supplies suffering as well, like safran, that makes the engine for the 737 max in france. Its a huge global issue but for all of the aerospace suppliers, not just for boeing, but also for airbus and worldwide, the benefit right now of this stoppage in production happening when its happening is that the Global Demand for commercial aircraft is at a record high. And you already have airbus with production at record levels. Thats not stopping. So these suppliers, theyre not just supplying boeing or just airbus maybe some of the really small ones are, but generally speaking, theyre going to see how much they can offset any slowdown at boeing with other work, whether its for airbus or whether other Aviation Companies as well. Phil, thanks so much for that mike, thank you, also, to steve and should mention as well, even if the analysts dont think theres any longterm shift, airbus is up 52 to boeings 2 . Certainly some investors thinking theres a longterm shift going on meanwhile, the house passing a spending bill to avoid a Government Shutdown and ylan mui is in washington with all the details for us reporter well, here are the three big numbers that you need to know about the spending package. 1. 4 trillion. That is the cost to fully fund the government through the end of the fiscal year 370 billion that is the price tag for permanently repealing the obamacare taxes, the cadillac tax, and medical fee on Health Insurers and 21, that is the age you will soon have to be in order t purchase Tobacco Products across the country. Yes, that is part of this deal as well. Guys, this package of bills now heads to the senate and then over to President Trump for his signature before the end of the woke back over to you so can we just talk about the deficit, too, and what this deal does for the deficit, ylan 1. 4 trillion was the first number that i mentioned and we are looking at deficits of potentially 1 trillion next year adding another 1. 4 trillion in Government Spending isnt doing anything to serve solve the longterm debt crisis that the nation is facing that is why you see conservative members of the house like the Freedom Caucus coming out against this President Trump had said he did not want to sign another massive spending deal, but here he is, signing it once more ylan, thank you so much after the break, were just days away from turning the page on this decade and it looks like the market will go out near alltime highs coming up, well debut our new series, the next ten with a look at the key trends that will define investing over the next ten years. Plus, fedex trading lower today as the shipping wars with amazon heat up well get a fresh read on the companys fundamentals when the earnings hit after the bell. As we head to break, heres a check on our data tracker. Housing starts getting a bump in november, up 3. 2 versus the estimate of a rise of 2 building permits, up 1. 4 , hitting a 12 1 2year high closing bell back right after this break at Southern New Hampshire university, we believe in education built for all people. [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Whai tell clients, etfs can follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Welcome back weve got just 43 minutes left of trade were on a record close watch once again for the dow, s p, and nasdaq anything positive for those three indices would be enough. Just positive on the s p and nasdaq is up 0. 2 . Lets check in with individual market movers. News of bed, bath, and beyond skbrumping on news its replacing six senior executives. The stock up a healthy 10 and shares of unilever are sliding after warning it will miss its sales product this year the Consumer Products maker cites slow growth in asia and rural india. The stock is down 9 of the news despite another record day sister stocks, 79 of investors anticipate more volatility in the year ahead and the majority of those surveyed want to invest for the longterm. Ubs is calling the next ten years a decade of transformation here to share some of the key investable trends is the deputy americas chief Investment Officer at ubs Global Wealth management this is a series were calling the next ten you call this the decade of transformation, but what does that mean for how people should think about investing . Thank you for having me here. Its great to be here. Look, were coming out of a decade of extraordinary terms for Financial Assets we think the next decade is not going to be as great its going to be more challenging for investors. There are a number of trends that are likely going to be picking up steam and theyre going to play a big role in shaping markets and economies. Were staying, brace for some disruption, less volatility and lower returns. Are you expecting Central Bank Rates to go up . If so, what is the best way for investors to position themselves accordingly with the decade ahead . In the near term, were not expecting them to go up all that much and over the next decade predicting a decade, predicting a year is hard as it is, so a decade is harder but i do think that theres going to be tensions between certain trends thats going to be a drag on growth and keep rates lower. Demographics is at the top of that list. Working age population in developed markets, as well as in china is about to peak and will be shrinking over the next decade thats a huge, huge headwind for those economies. And we also have demographics picking up momentum. And thats also together, those are going to put a drag on economy. But then theres Technological Advancements that i think is going to halt gains and will probably help rates go a little higher specifically on technology, youre looking at the digitalization of the Global Economy, 5g. What else do you think drives that part we think enabeling technologies like 5g, a i, you know, cloud computing, those combined with the growth in data is going to fuel innovation. Now, we dont know all the application that are going to come out of it at this point, but certainly, the fact that can transmit driving remote surgery. To the point about demographics, can the next decade be the decade for some of those emerging markets that we all talk of with great hope. Theyre going to have to. Therell be no way to transfer the wealth from the developed world, so they can live in retirement so somebody like me who hopes to be retiring, you know, in the next 10 to 15 years, i have assets now, i could eat a stock certificate, but i dont think it would taste very well or be very nutritious, so ill have to sell my assets somebody is going to have to buy those. And where youll see that wealth transfer come is places like africa theres lots of moving parts, as you may agree as it relates to fiscal policy and other demographic trends that will have to happen for that. Demographics is hard for developed nations, but its actually going to be fueling growth in emerging markets you also say deglobalization is a trend here. How does that fit into demographic growth in other parts of the world so, we think what has started as a u. S. china tariff war is actually going to grow into a u. S. china rivalry and we might find ourselves in a bifurcated world, where there are two spheres of influence and certain countries that have enjoyed relatively free trade will have to choose sides. We think that, for example, you know, in certain countries are already benefiting from the adjustments of someplace chains, Companies Moving their factories from china into other developing asia and that is helping their economies and boosting their markets. Can we just talk about water briefly. You also think this is one of the big investable ideas for the next ten years as we identified, actually, a couple of areas where were going to see secular growth cycle continue and water scarcity is one of them. Were already seeing a huge discrepancy between supply and demand of water. And the fact that populations are getting bigger in emerging markets, i think its going to widen that gap a lot we think those companies that are going to eliminate water scarcity are going to be good investments. One more for me, if i may in the survey of your clients, your wealthy clients at ubs, what were some of the investing trends that they were citing was it more arent esg sustainability is huge. A lot of our clients want to continue to increase their allocation and i will say, we also found out that more than half of our clients really want to invest in health tech, they identify as one of the biggest areas, especially genetic therapy, which is something that im really excited about it could be a paradigm shift in medicine, especially if it can cure common diseases at a manageable cost, thats going to have a huge impact on biopharma and our clients want to be there to benefit from that thank you so much for coming in thank you all right. Here we have just 37 minutes to go before the bell the dow right now is in the positive and the s p is following suit were in record close territory once again today after the break, jpmorgan out with its best ideas in the internet space for 2020. And some of the recent ipo names that made the cut may surprise you. Well break down that, next. And mike santoli puts the market rally into context with a look at how the rest of the world is trading as the s p hits new highs. Were back in a couple apple card. Is a new kind of credit card, created by apple, so its simple and transparent with a new level of privacy and security. It lives here and here on your iphone, and it will save you 6 on Holiday Gifts at apple; like iphone, apple watch, airpods pro and so much more. Apply in as little as a minute, right in the wallet app. [maniacal laughter] apply in as little as a minute, 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. So wim 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. 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Time now to get to the word on the street Argus Research downgraded yum brands to hold the firm says kfcs results likely will be hurt by competition from chickfila and popeyes and as the chicken wars heat up, popeyes is taking a dig at chickfila, running classified areas in various newspapers, seeking chicken sandwich professionals who are available to work on sundays, which is, of course, one day that chickfila is closed. Next up, jpmorgan puts out its 2020 best ideas for u. S. Internet stocks with facebook, peloton, and snap all making the list the firm cites strong user metrics and instagram growth for facebook and aws concerns for amazon are overdone and cites Strong Revenue growth for lyft and improved profitability for peloton and the highly engaged and attractive user base for s. N. A. P. And finally, Goldman Sachs downgrading group onto sell. The firm citing execution risks in the north American Business model and a negative inflection in International Consumer trends for the downgrade. Keith, that stock is down 9 off the back of that going into the jpmorgan internet 2020 outlook, without being rude to the team, theres some good stuff in here, but nothing new in here. All the stock picks and all the themes are stuff weve discussed for a long time and its a case of wondering if theres another year to squeeze out tech market gains from that. Valuation relative to the peers and to each other and are they executing on the Business Model . One of the favorites in there is facebook its relatively cheap to google. Theyre going to start executing and monetizing even more on instagram. And theyve already started to do things in message and whatsapp yet im a whatsapp user, communicate with people all over the world on that. Theres millions, maybe a billion people using that and they havent even started to monetize that. If they can roll those through, we have a little bit of a different story to your point, wilf, than weve been seeing over the end these are the 800pound gorillas in our social media space. Theyre not going away despite the threat of regulation despite them getting hauled up on the hill and questioned every six months i dont see them going away. Do you put any stock in a potential threat of breakup, depending on a democratic candidate and the upcoming election theres always that threat, but i think thats more sound bites for political candidates to win votes than it is for anything else. Its very hard to prove a sherman antitrust case. It was very easy against at any time back in the mid80s but when youre talking about social media platforms, unless they just have 7 billion people on their platform crowding out everybody, being able to set rates without any competition, its going to be very hard for the doj to prove that case i dont see a breakup anytime soon facebook and amazon higher today, lyft a little bit lower exactly 30 minutes left of the session. Were higher by 62 point s on te dow. Divergent corporate expectations for 2020 jeff blue and ely lili forecasting a stronger year. Congress is on track to pass two massive spending bills averting a Government Shutdown and Home Building increased more than expected and permits for Home Construction surged to a 12 1 2 year high. Lets send it down to Bill Griffeth hi, bill hello, contessa heres whats happening in this hour President Trump in a fiery sixpage letter to House Speaker nancy pelosi is angrily objecting to the houses two articles of impeachment. He accused democrats of what he called perversion of justice and abuse of power the house is expected to vote on those two articles tomorrow. Elsewhere, a judge has allowed lev parnas, the associate of President Trumps lawyer Rudy Giuliani to remain free on bail there he was arriving in federal court in new york today. The government had argued that have parnas should be put back behind bars because he posed a significant flight risk. The judge disagreed. Air strikes and artillery shellings caused damage and killed 11 civilians. The increased strikes seem to indicate president assads forces are preparing for a ground offensive and ukrainian riot police clas clashed with members of nationalist organizations. A few hundred people had gathered to protest a draftland reform bill. 17 Police Officers were injured, 26 protesters were detained. Thats the news update this hour greetings to my dear friend, keith bliss. Im impressed that a person of your age is on whatsapp. I dont know what you do with that ill be looking you up as soon as i get off the air here you wont find him. Send him an invite. Its the only way to communicate. Weve got 28 minutes left of the session. We are on track for record alltime closing highs once again. The slight gains on the books for today so far coming up, weve got your last chance trade keith is picking a real estate play that he told me about on whatsapp earlier later, nfl commissioner gary bettman joins us here at post 9 to talk streaming, sports betti betting and the big business of hockey as we head to break, heres a quick check bonds. Closing bell will be right back apps are used everywhere. Except work. 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 welcome back 25 minutes left of the session heres the heat map. The financials lead the charge followed by Consumer Discretionary and energy at the bottom as you can see, muted gains overall. About a tenth of a percent for the s p 500, but that would be enough for a record closing high lets send it over to mike santoli for the second check of the market dashboard we have multiple equity markets running to daylight. Hitting fresh highs or at least 52week highs. Ive been pointing out how its been a global rally. This is a fourmonth chart of s p 500. Broad European Equity index. And the ishares emerging market etf. You see the nonu. S. Markets are outperforming. Why did i choose four months if you go back to midaugust, its the height of the recession fears. The idea that this global slowdown is having markets within its grips pretty much all the markets around the world take a look at a very longterm chart of the euro stock 600 index. It is not only making a new high on a 20year basis, this goes back to a peak in the year 2000. Now weve nosed above it right here clearly, the rest of the world is responding to this idea, we have central bank easing and cyclical indicators doing better the question is this is the culmination of a move to the upper end of the range or whether things can keep going in this direct. That chart is brilliant to highlight how much europe has struggled relative to the u. S. In the last 20 years i guess, s p 500 was the early part of this decade. Yeah, 2013, the s p started making record highs. Its crazy, the underperformance over that time. Mike, thank you. All right keith, are you thinking about shifting money into europe at this moment for the decade ahead . Not at this point remember, im pretty shortterm in my viewpoint of what goes on in the markets i still think that the u. S. Market will continue to run into 2020 i dont see any disruption, despite the political she nan getti begans that might continue when you look at seasonal patterns, im a big believer that we always rally into the end of the year. Got that wrong last year. We did. We did but the one year off ten, i think. But also seasonal patterns the third and fourth year of a president ial cycle are pretty strong but i just think this market is too set up to think about rotating money over to europe or to another emerging market right now. Okay. Still to come, we will have your last chance trade. 21 minutes left in the session plus, fedex gearing up to report earnings after the bell well preview the key metrics to watch and as we head to break, heres a check on jabil circuit. Closing bell back of this break. Wl you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Theres room for more than just the business you came for. Whether thats keeping up with what you always do. Or training for something youve never done before. Thats room for possibility. 18 minutes left to go and heres a check on the closing bell big board. At the top, the major averages moving higher with all three on pace for record closing highs. Below todays biggest dow leaders, Goldman Sachs, home depot, and Johnson Johnson with walgreens and mcdonalds coming in as the biggest dow laggards we have u. S. Just 18 minutest in the session i have long iyr of all the indicators that i just mentioned im shortterm in nature, its very oversold in an upward trending market relative to whats going on the three Largest Holdings it has inside of it, prologic, american tower, and Crown Castle International have all been hit pretty hard. Its a little bit of a misnomer. But crown castle and american tower, for example, what they manage are thousands of communication real estate spots, prologic has Actual Office space, but i think that sector is due for a rebound not only in the shortterm and if you believe the longterm economic play, those are companies that will continue to expand and continue to provide yield for investors. If youre going for shortterm s p 500 momentum, you wouldnt necessarily expect this sector to be one of the outperformers. Not necessarily but if you look at some of the data that we look at, you get oversold and if i was going to, at the highs, try to park some money before the end of the year, i would look at iyr. Thank you for that. Just 16 1 2 minutes left of the session. We are on record close watch once again this is the last commercial well take before we go into the close. When we come back, well be in the market zone. 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. Is that pgim, we see alpha emerging in the trendsete . Driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Welcome back just 13 minutes left in the trading day. Were now in the closing bell market zone. Commercialfree coverage of all of the action going into the close. Cnbcs senior markets commentator mike santoli is here to break down crucial moments of the trading day. And today we have keith bliss from iq capital usa joining us as well. Lets kick things off with fedex, that is set to report earnings after the close eric chemi is back at hq with the compekey metrics to watch ot well keep an eye out for any impacts from the trade war that said, this quarters results will not include numbers from black friday and cyber monday, because the quarter had already ended. The street will be looking for revenues just under 9. 2 billion from the Fedex Express segment nearly 2 billion from freight and around 5. 4 billion from ground the stock is nearly flat on the year and is significantly underperformed rival u. P. S. , which is up more than 23 . Back to you guys eric, thank you for that. Hey, listen, mike, when youre talking about a big headline from amazon saying, until they improve their performance, we dont even want to allow our Third Party Sellers to send things through fedex is that a branding issue for them is that likely to discourage other customers . I wonder if assiits a brand issue. I do think it reflects the fact that people dont expect very much of fedex in terms of its actual Business Performance or, you know, these trends with these numbers today. So it obviously doesnt help and i do think it also highlights the fact that it was becoming apparent in the last couple of years, the delivery piece of ecommerce is the choke point. And its where a lot of the profit gets dissipated, because of all of the difficulties keith, to what extent have they got the potential to enjoy an improving Global Growth picture and easing trade concerns next year or is this all just structural, battling with amazon zl i thi i think a lot of it is structural, in battling with amazon if you look at any neighborhood in jersey, i see far fewer fedex trucks coming through, many more blue amazon trucks, u. P. S. Still has a lot coming through but i think theyve got some issues in terms of pricing, customer service, other issues of that neighborhood that they need to get through. Should u. P. S. Watch out definitely. If amazon is able to show the model of what an large eretailer is able to do by completing that supply chain all the way the last 100 feet has always been the choke point. What happens when amazon starts delivering most of their packages with drones what happens when amazon starts delivering dinner from whole foods with drones and other things of that nature . Its a big problem for the carriers a reminder the fedex earnings are due out after the close. We have an analyst to go through those results with us as well when it happens. We have just ten minutes left of the session, on record close watch again. All three of the major averages set hr record highs. Two streaming stocks moving in opposite directions today. Julia boorstin has the details on rokus slide and a jump for netflix. Thats right, roku shares down over 2 on news that chief phenomenal officer Steve Loudoun is leaving that role the stock is still up over 340 yeartodate meanwhile, netflix shares are up nearly 4 . After that company broke out its International Subscriber numbers and revenue into fourregions, revealing that the Asia Pacific Region is netflixs Fastest Growing segment. Its revenue and users both grew by more than 250 from the Third Quarter of 2017 to the Third Quarter of 2019. Netflix is focusing on International Growth going forward. Joulia, thank you so much fo that its funny seeing the analysis on this. Some people were saying, why are they breaking out these numbers, because theyre worried about people focusing on the slowing domestic numbers but clearly, the market is impressed overall. Whether you focus on the absolute size of subscribers in europe or the growth in asia a bit of a reminder that its much underpenetrated in terms of overseas markets and another excuse to kind of buy. And i also think theyre getting a pretty good halo effect from some of the heavy new content releases and things like that. It seems like theyve regained share of mind after the disney plus launch. Rokus performance, too, has been really outstanding and phenomenal do you see any movement there in the coming year . I think as long as they keep executing on the plan. The market and the street hate when the cfo leaves for any reason i think this will bounce back. Its still got a very strong Business Model and well continue into 2020 as more and more people continue to eat their content for streaming services and roku stock moving 2 just means the market was open. It almost never moves less than 1 in a day. 322 up in a year kind of shows that for you private Equity Firm Carlyle Group is buying a stake in American Expresss Corporate Travel business. Kate rooney has that story kate hey, contessa, thats right, carlyle and some other big name investors values the travel company at 5 billion, including debt singapores Sovereign Wealth Fund Kaiser Permanente and the Qatar Investment authority are also new investors the business offers airfare and hotel room bookings to Bigger Companies and amex sold off a 50 stake in that business five years ago. Amexs ownership stake remains the same after this deal and shares of that stock are up about 1 today guys kate, thanks so much for that mike, any take on this one its not like the traditional bread and butter of amexs business, but its been a longstanding business, but definitely not core and in fact, so 5 billion is worth, including debt. Amex is a 100 billion company its not a real big piece of the pie. I would have thought when they initially sold the 50 stake, it was a prelude to them spinning it off or finding a private equity buyer for the whole thing. Maybe a step in that direction, but not clear thats the case. Do you like these Payment Companies more broadly i do, i do. I think payments and the Payment Trends are where youll see money moving around the globe in the next ten years however, if im amex, its a bit of a cautionary tale, because there are lots and lots of new technology, new pavement ways using block chain, off chain, those types of things that would enable Money Movement around the world much cheaper, much faster, much easier. That said, so many of them so far have been based on the existing infrastructure and thats why some of those stocks its all about rails. Now shares of boeing falling earlier today after announcing it will suspend production of the 737 max jet beginning next month. In a new note, jpmorgan says despite halting production, boeing will still burn more than 1 billion a month on the max due to remaining labor costs and plans to support its suppliers and on the heels of boeings announcement, southwest saying it will now extend its 737 Flight Cancellations until april 14th southwests move comes less than a week after American Airlines extended its cancellations through april 7. We discussed this a bit earlier, mike clearly, its been suffering in the shortterm over the last couple of days as well as yeartodate remarkable sort of resilience in analysts kind of sentiment on it, that this is just a delay, not a longterm shift in the companys market share the longterm order book and the sort of Free Cash Flow model when they are in full production mode has still a lot of analysts, you know, in their camp i guess the stock here, its really trying to make a stand. It was in a precarious spot. The very low end of the range for the year and it didnt come back during the day. I dont know if thats consequential or Wishful Thinking Steve Liesman did a great job of laying out the forecasted impact on gdp because of the shutdown on the production line. Does that put political pressure on the epa to work with boeing and push this forward . Personally, i think the faa is licking its wound on this they never had complete signoff on that. I dont think well see any of that play into it despite the fact it may mean 1 to gdp mike, to what extent does a further delay, if we got one, start to change peoples sentiment on this . That this is more than just temporary delays its been incremental over you know, i was saying a while back if this was just a lost year for this model, the market is fine with it. But if it starts to look more like a lost generation for production, i dont think we can say thats the case yet. But i do think that patience has worn thin over the course of the last eight months or so, so i dont think theres a lot of benefit of the doubt left. I want to bring up an s p 500 intraday chart at the moment, because were slipping a little bit as we approach the close and mike, you know, still on track at the moment for a record close. And we were never hugely higher today, but weve slipped right down to four, five basis points higher on the s p. Its obviously been kind of a pretty good run. Im looking mostly at how positioning seems to have gotten pretty aggressive. People kind of bought what they needed for the end of the year and see if they can levitate their way higher there wasnt a lot of organic demand although i will say small caps are outperforming the ruffles up another 0. 4 you like the ruffssell . I do. The one index ive always looked at where that had to catch up its almost gotten there not back to the august 2018 highs, but its been pushing forward and really had a nice run in december. Its probably likely that there are a lot of investors that are feeling some relief that were not seeing a repeat of the runup to christmas that we saw last year all right. There we go. Still a week to go, contessa. There is. The exact opposite, actually, of this whole setup exactly here we go we have two and a half minutes left mike, with more on the market internals. Which are somewhat mixed, actually, if you look at up versus down volume on the new york stock exchange, obviously, youre skewed a little bit to the upside, but thats not a dominating performance by the bulge bulls. New highs versus new lows. And this is benefiting from the fact that we have anniversary, the weakness in december of last year thats very, very healthy. Close to 200 new highs on the new york stock exchange. And in terms of the underlying tone of the market, the s p high beta versus s p low volatility this is essentially aggressive stocks versus defensive stocks this is over the last ten days the high beta names, semis, things like that, including financials have well outperformed with just under two minutes left, lets get to rick for a check in on bonds. R rickster good afternoon, wilf. Intraday of tens, a couple basis points higher. Thats been the word lately. Were creeping up a little bit, curve steepening almost the steepest its been since july we keep chipping away and stopping right around the same point in the high180s not quiet closing above 190. Finally the dollar index, hooray, up a fifth of a cent today. But as you can see on this chart, that was a small bounce from fresh lows going back to july bertha, today is like a mirror image, pretty much the same range. Pretty much and youre seeing apple continuing to be that major force. Look at the impact of apple this year and it is responsible for nearly 40 of the nasdaq 100s gains, the best gains in ten years. And that is more than the next two stocks combined, which are microsoft and facebook chips have also been the major driver theyre on pace for their best year since 2003. Those are among the alltime high and an alltime high in health care, as Congress Passed that funding bill which will wipe out obamacare taxes on medical device makers, insurers, and the cadillac tax over to bob. Almost 200 new highs you heard from mike at the new york stock exchange, other than semiconductor stocks, its the banks breakouts Goldman Sachs,sy group, bank of america, Morgan Stanley, pnc all at 52week highs those boeing suppliers weak again. Theres the closing bell. The Dow Jones Industrial average barely eking out positive territory, fighting it out to see whether we can end the day positive on the s p 500. Welcome to the closing bell, everyone. Im wilfred frost. And im Contessa Brewer in for sara eisen theres a lot of burerewers aro here today along with mike santoli, senior cnbc market commentator. There are a lot of beers over there which well be discussing with anheuserbusch a little bit later on the show. Record alltime highs once again for all three of the of the averages the russell led the charge intraday, up half of 1 . Not a record itself, but the other three big cap stocks and indices all at records following slight intraday gains were moments away from earnings for fedex well bring you those numbers and analysis joining once keith bliss, ceo of iq capital usa, still with us, along with patrick holfrye hy mike, it looks like theres a lot of unrestrained optimism going into the new year. A good deal of optimism or at least a lot of comfort with the way the situation looks going into year end. And very much the seasonal forces were driving things today. A reluctance to sell for any particular reason, with any urgency. Would rather wait for january if you want to take some profits. With that, thats one of the reasons we get this kind of levation in the index. I think the thing to look out for, to your point, is if people get too overtime confident, hey, nothing can go wrong here, were good with whatever might come along into the new year. Patrick, whats your take as to how optimistic we should be going into the new year . I dont think investors are looking at what can go wrong Industrial Production continues to look very strong. The housing data also looks firmer both of those are allowing investors to take a more positive tone for the market and thats going to be the catalyst for what we expect to be another great year in 2020 we were talking earlier a little bit about the federal deficit and debt i know that youre keeping a close eye on bonds and this search for higher yield. How do you factor that into the shortterm that youre looking at early in 2020 well, its interesting for me if you take a look at what the trade has been in december, you see a rotation out of, you know, what i would call the safe haven bonds, both the u. S. Treasuries as well as Investment Grade corporates into high yield and that is also very supportive for equities so people are actually willing to accept more risks there have been a few things that have cleared out. Weve got the first phase of the china deal people are looking forward to the end of the year, were up 20 . I dont have the markets overbought at all. Somewhere up to 270. The dow above 29,000 when you factor all of that stuff together, again in my melting pot, i think that despite federal deficits, despite whats happening with bond prices and interest rates, i think were still very supportive for running here further into 2020. The fedex trading down 3 , numbers just out, were digging into them. Well have the details you need to know. Youve been looking at Commodity Prices whats that telling you . Aim sort of story people are getting comfortable with the Global Economy. Copper is overbought, oil prices are surging as well. And when you look at, its not necessarily commodity, semiconductors, not only have they been on fire for the year, but in december, they have taken off. A lot of that has to do with the china trade negotiations but thats also a harbinger for what people really think about the Global Economy semiconductors, microchips are in everything we use around the world, especially in Retail Products if we think were going to sell mo more, that bodes well for all risk assets including equities lets move on and talk about apple that hit an alltime high. Two wall street firms out with dueling notes on the stocks. Josh lipton has all the details from both of those notes hi, josh so there arent many Analysts Covering apple that rated a sell, but the team at rosenblatt does the team saying that iphone sales in china fell about 30 inform november year over year, citing their own channel checks there. On the other hand, a more upbeat note from the team at keown. They say apple remains one of their favorite ideas in part thanks to a new 5g iphone ant way and continued strength in wearables. Yes, thats a risk, be that could be partially offset they argue by share gains in india. Their price target goes to 325. Guys, back to you. Is apple just pricing it right, do you think, mike . Yes, its pricing it right if it wants to create a little bit of a perceived and actual shortage also preserving plenty of profit for itself so i think you can probably spin that either way. Whether they got caught a little bit short or not whats interesting, the stock itself, look how ridiculously orderly that increase in the stock has been since august. Its basically like people want to own stocks and apples our favorite flavor of stock thats really the way its traded its not entirely about the absolute fundamental outlook for the corporate business to the rosenblatt note, a little miss on chinese iphone sales, is that enough to drail the story for everyone else. Its not like its the fundamental issue. Not in this environment its too much else that people are going right. Lets get to fedex numbers. Eric chemis got them for us you can see the stock down about 5 here. This is a miss on both the revenue number and the profit number fedex also issuing a guidance that is lower than the street was expected and the cfo in the report, you know, making a note here, a revised guidance reflects lower than proposed revenue and higher than expected expenses driven by the continued mix shift to residential delivery services. Theyre restricting hiring and trying tom find ways to optimize their network. This is a bad Earnings Report on the face of it and well dig in more and have more details as they dig through more. Thanks to you guys. Thanks so much, eric. Down 4 in afterhours trade, following a couple of days of bad trade already. The setup wasnt particularly tough. Both lines missing and weak guidance on top of that. In the last two or three quarters, it has seemed as if expectations were very low going into fedexs results and the results and the guidance were actually worse than people were positioned for so that seems to be the case right here obviously, the stock is up off the lows, which is in the low 140s from septembertooctober it built in a little of a cushion there. But obviously, saying its going to continue to be very challenging in the current fiscal year is not necessarily welcome news Fund Managers are still pouring money into the tech sector, according to bank of Americas Global Fund manager survey, which found the most crowded trade in both november and december is long u. S. Tech and Growth Stocks, coming in as the second most crowded trade is long u. S. Treasuries patrick, what do you make of this crowded space is there more room for newcomers . I think right now, what were seeing is growth has been the area where investors have been looking and that survey is just a reflection of the fact that investors really wanted to find that growth and they were gravitating towards the stocks that appear to have that that happened to be technology and Growth Stocks. I think going forward, the story more 2020 is the rotation were seeing to value stocks right now Industrial Production value is coming in United States strong were in the process of seeing a bottom in the economy. Value will be the theme that leads in 2020. And investors need to rotate towards that keith, what do you think . I get cognitive dissidence, with the way you led in there, people are putting a lot of money into growth tech stocks and a lot of money into u. S. Treasuries they seem counterintuitive to me, people caught in a couple of minds. But youve heard me all hour i would be putting money into technology and Growth Stocks i think its the way in developed markets certainly over the next two years, the way we continue to squeeze productivity out, especially as the population continues to age and were searching for workers. I think you pick the right stocks, apple is one for me. Every time i bet against that stock, i get beaten up and the others that are providing payments processors, good quality tech that will run our lives. I would say that the way to unify those things is a scarcity of Long Duration cash flows or perceived scarcity people are willing to pay up for them this is what survey respondents say the most crowded trade are in a way, its the stuff thats done the best that i didnt own enough of. Can other people might own too much of. Very, very low yields, lower than what younl think, inflates the valuations of Growth Stocks. Well lee ave it there still ahead, more on this big move lower for fedex and mike will head to the telestrator to break down the s p and if the market is becoming too top heavy closing bell back in 90. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back fedex earnings missed estimates just moments ago both top and bottom line and soft guidance down 5 after, of course, already having a bit of softness coming into these results today. Lets bring in managing partner at brothen capital for his reaction first take well, its very disappointing. The initial number of 213 is a huge miss. If you give them credit for the 251 adjusted, its a huge miss theres a 51 cent a share tax benefit. Thats not repeatable. Thats not ongoing cash flows. But its symptomatic of what weve been seeing in International Air freight and to a lesser degree domestic the bottom line is that the global air freight economy is feeling ill, at est. But if this is that factor alone, which i know its not alone, but if its predominantly that factor, then trade war easing, a bit of a global gdp pickup could help this a lot next year. It could, but weve been hearing about the trade war easing, about them having a deal for how long now two years. At some point, im tired of hearing the boy cry wolf i want to see a wolf or im not going to believe the boy anymore. And we continue to see were now seeing in asia and europe, negative on top of negative volumes. And bottom line is they have reengineered this company, rebuilt the i. T. , the infrastructure, its the most efficient its ever been but they cant show that off when they dont have any volume to move through the system so whats that going to take . Do they need more aggressive sales . Is there a management problem . Whats the factor here thats keeping them from really exploiting where theyve become super efficient . No Management Team in the world the best salesman on the planet cant fix the decline in air freight from germany to china, to korea to china, because of the tariffs killing the demand and youre seeing it in multiple secondary and tertiary ways. Thats the bottom line you can put the anointed, christ himself in the ceo chair, and anybody you pick as the salesman and it wont change the fact that the macro global is sick and getting sicker don, are there anymore levers they can pull in the year ahead to lower their costs and offset some of these pressures that theyre seeing im sure, yeah, theyre retiring some additional planes, some of the oldest of the fleet. And and you know, lets give them some credit where credit is due. Theyre making an extraordinarily tough strategic decision to kick amazon to the curb, because they werent making any money there was zero im convinced there were zero margins, they werent making any operating profit strategically, because thats the best thing for this company longterm, look at heir doing their partnerships with walmart, walgreens, those are a result of companies that wanted to do business with fedex. Walmart and walgreens see amazon as a real threat and will partner with fedex to take on amazon this this petty announcement that amazon is making, i dont know if i would do that. You are its petty and its its an exercise in rearranging deck chairs. The history is long. You dont want to mess with fred smith and fedex. They are not a competitor you want to annoy. That might be the case, don, although i wonder if the fact that you say the amazon business was basically zero profit for fedex and all of these ecommerce players are bundling fastest cost of the delivery in with the product themselves is that suppressing the willingness of customers to pay up for delivery more broadly no, youve got two factors going on first of all, ecommerce is paying are subsidizing express delivery, because they have to and because they can they have to, because thats how you close the distance between what is immediacy of going to a brick and mortar store and be able to eat it, consume it, use it, et cetera. So they can spend some of that money back against expedited delivery i know for a that couldnt jeff bezos went to his distribution team, his Transportation Team and he said, look, guys, this is this is my edict this is my challenge to you. 80 of the u. S. Population lives within 20 minutes of a walmart, which means you can get in your car, drive to walmart, walk into the store, pick out what you need, and be walking back out in your car and drive back home within 20 minutes. Thats within an hour. If 80 of the population is within 20 minutes of a walmart, we need to be able to make our delivery happen. When he issued that edict, he basically declared war on walmart. But he also puts it in Crystal Clear relief whats going on here one, two , fedex is doing this strategically. The highest cost provider per package delivered in the market is the post office the second highest cost provider of the service is u. P. S. The lowest cost provider with the best service is fedex. So the more and more amazon lets say the critics are right. Amazon becomes a big player in this industry. The bigger they become, the more they crush the post office the more they hurt u. P. S long before they get to fedex. So fedex is saying to themselves, look, lets align ourselves with partners we can cothings with and make money with, one. And if zplamazon wants to come after us, theyll kill the post office and seriously damage u. P. S. Long before they get to us because were the lowest cost provider of the service with the highest speed quality. Don, well leave it there thank you so much for joining us fedex down 6 and u. P. S. Also down a couple of percent in afterhours trade in light of the fedex numbers. Straight ahead, we will break down the charts to find out whether the s p 500 is too concentrated in the larger stocks and later, we discuss the n nhls embrace of Sports Betting and the push to diversify the league when we talk to gary bettman in a first on cnbc interview. All right. Mike santoli has a third dashboard of the day mike contessa, ask me right now if the market is stacking the line . Basically putting a few of the biggest guys upfront to try to make some progress here. Look at this chart pretty longterm of the percentage of the s p 500 accounted for by just the biggest ten holdings so the Ten Largest Companies in the s p, what percentage of the Overall Index did they represent . Right now, its about 24 . Pretty much at its peak since about 1999 and 2000 when you did have this megacap leadership, the very Largest Companies in tech, especially were much larger than the rest of the market during the height of f. A. A. N. G. Mania in 2015, 16, 17, people would say, its only four or five stocks. That really wasnt the case. And i was sort of very skeptical of this idea that the market was getting too concentrated the real reason to worry about this is if other stocks below the surface are not participating at all thats not necessarily the case. This chart looks at the equalweighted version of the s p against the regular one. You can see that the regular s p has certainly outperformed over two years, but these are both going in the right direction, almost along the same path so, yes, the biggest guys are getting bigger, proportionately, but its not as if the rest are being left in the dust i dont think thats why its something to be outright too nervous about right away, but you have to watch this trend coming into the 2000s, did that not happen . Oh, yes, in 1999 and 2000, the average little stock was really far underperforming and you did have this hyperconcentration by the end of it that also happened in the early 70s, socalled nifty fiftiy stock there was an instability in the market that was not reflected. Thanks. An Impeachment Vote in the house may be looming over President Trump, but our next guest thinks the china trade deal and other white house wins could give the market and fthe president a boost in 2020. Plus, an exclusive look at how amazons blue vans are the key to its free nextday shipping strategy. Were back in a couple of minutes. And that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu as a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Heres a check on the closing bell big board at the top, the major averages all closing at record highs. Below, todays bestperforming sectors, Consumer Discretionary, financials, utilities. The biggest dow gainers, Goldman Sachs, Johnson Johnson, and American Express i wonder why theyre in blue. Why are they not in green . Because then theyll just go along with the major indices and the sectors. More than 1 . Is that the reason . A new nuance that none of the three of us know the answer to but were so good at guessing no one has been able to confirm this i think that nobody knows the answer, even in the control room but anyway, we should move on. Maybe Bill Griffeth has the answer he certainlyhas the cnbc news update for us. You never question the graphics people. They know exactly what theyre doing, wilf. Heres whats happening at this hour right now, everybody. The senate has passed that massive defense funding bill with the landmark provisions for paid parental leave and the creation of a space force. The 378 billion bail sailed through. And it also gives them a pay raise, their largest in a decade and a senate panel andthe ncaa convened this morning, the first of many collaborative conversations surrounding the issue of College Student athlete compensation i would like to see us work with the ncaa and work with student athletes to try to come up with a federal solution that not only addresses the issue of having access through name and image likeness, but also speaks to issues of broader compensation finally, pope francis has abolished the socalled pontifical secret rule that has been used in various clergy sexual abuse cases after mounting criticism that the confidentiality measure has been used to protect pedophiles a vatican spokesperson says it is a step on the path towards transparency that is the cnbc news update this hour. Back to you guys bill, thank you very much my pleasure its time to get a news alert now on Palo Alto Networks. Josh has it for us hi, josh so, wilf, this news coming from the s. E. C. Just now, announcing Insider Trading charges against five friends who traded on confidential earnings information about the s. E. C. Says a Silicon Valley cloud commuting company. They reaped millions of dollars in trading profits according to the government, a former i. T. Administrator then at Palo Alto Networks was at the center of this trading ring. They say he used his credentials and work contact to obtain highly confidential information about his employers earnings and Financial Performance until he was terminated earlier this year apparently, he tried to purchase a oneway ticket to india for himself and his family and was then arrested at the airport we have reached out to Palo Alto Networks for comment well let you know if and when we get it. Guys, back to you. Congress on track to pass massive spending bills today and send them to the president to sign, which would avert a Government Shutdown. That is not the only Washington News we have the Impeachment Vote tomorrow and usmca waiting in the wings. Here to break it all down, ed mills, washington policy analyst with Raymond James of these, which has the most likelihood of having an impact on investments or our bottom line i think everything coming out of impeachment is a macro positive coming up washington with the usmca you have an issue where Business Confidence and because spending has been the biggest drag on the economy. If you can get that passed and get some Business Confidence out there, you probably put that as number one but by not having a Government Shutdown, extending a whole bunch of tax provisions, doing a lot of the cats and dogs that were left over, thats adding a ton of fiscal stimulus to the market and when you have the fed largely on the sidelines being more accommodative, you add these all up together and this is a really nice macro backdrop that d. C. Is giving us for christmas. I read that you think it has the possibility to really boost Capital Spending can you explainhow and why the story all this year has been about uncertainty weve had china trade kind of going back and forth as soon as folks started to move things back to north america, especially to mexico, the president threatened a whole bunch of tariffs on anything that came in from mexico so now where were going to have signed into law a new trade agreement between the United States, mexico, and canada, that gives businesses much more certainty here, at least in north america, allowing them to invest into the future, and this is something theyve really been hoping and waiting for, removing that big overhang that nafta could be pulled at any moment. And those positives far outweigh the potential negative impacts of the impeachment request. I think what most of us here in d. C. Have been thinking is that the base case is playing out as of right now. So the house is going to vote for articles of impeachment, everything and points to that the senate is not going to vote to convict so once weve kind of moved from that story, we look at the rest of the backdrop and the rest of the backdrop is largely positive from a macro perspective, at least up until the caucuses and the primaries start for whos the next nominee for the Democratic Party that is probably the point where d. C. Once again adds to the conversation and adds to the volatility and on that note, youve been monitoring a bit of a pickup for Bernie Sanders, which is a potential market risk if his momentum continues in your eyes. Yeah, you know, so what weve been discussing is weve been trading whos the frontrunner in the democratic primary process for a while. The one person who really hasnt gotten that frontrunner status just yet is Bernie Sanders but consistently, hes been at that 20, 25 level, number one or number two in iowa, new hampshire, and nationally, especially number two spot nationally for a while and so if other candidates who have kind of surged into that frontrunner status, if they fizzle, the one person that seems to have the highest floor of support nationally has been senator sanders. So, you know, were expecting that some time between now and february, were going to have much more conversations about what his candidacy could do and if he really could make a run. Were not calling for him to be the democratic knnominee, but h hasnt had the conversation that others in similar polling situations have had to date. How much of a risk do you see the skyrocketing federal deficit . Contessa, what they tell you on capitol hill is supposedly it doesnt matter anymore so one of the things that we talk about in d. C. Is that we only respond when there is a crisis or a deadline what we have seen for years now, and it seems to have accelerated since the election of President Trump, is that, you know, through spending bills and through tax bills, this congress, this president are fine to add to the debt and the deficit. And we have a fairly accommodative fed. So in the near term, d. C. From a fiscal and monetary stimulus perspective is a positive backdrop to the market there is going to be a time that we have to deal with that, brown, its nowhere in sight very quickly, for mayor bloomberg, when does he need to have made gains to double digits or to be third or fourth in the race, when does he need to have got to that status for it not to be worrying for him . Wilf, i think we have all the way until march for him. He is not going to be competing in the first four contests he is going to be only start competing on super tuesday and so what will be interesting to me is that im looking to see if theres going to be a different winner in iowa versus new hampshire, South Carolina in in nevada. If thats the case, if he can come in and make a splash on super tuesday, thats where the conversations about the potentially brokered Convention Really increase. If we come out of super tuesday and split up those 1,500 delegates, a third, a third, a third, its going to be mathematically very difficult for any one candidate to emerge as the frontrunner, get that 50 of the democratic delegates. And i think thats one of the things that mayor bloomberg is playing for. That and also trying to be the heir apparent, if biden falters in any of these early contests ed, thanks so much for joining us wilf, with thank you. Still ahead, amazon is trying to win the Holiday Shipping wars with free next day shipping up next, an exclusive look at the branded vans behind that strategy plus, nba commissioner adam silver says the pay tv system is broken find out if nhl commissioner gary bettman agrees when he joins us in a first on cnbc interview. We have some news on wynn resorts. The contract for ceo matt maddox has been extended through to 2022 significant because, of course, this year has seen the resolution of some big outstanding issues the regulatory hurdles that they had to cross in the wake of the scandal involving founder and former ceo, stooech nguyeeve wy settlements of the shareholder lawsuits just happened within the last couple of weeks this clears the way for them to really focus on ramping up the new property in boston and 2022 is significant because thats when the recession is due for renewal in macau in china. Having him in this leadership role is important for this company in continuity. Wynn stock up some 35 yeartodate we just got some fedex numbers that disappointed. The stock now negative for the year as competition with amazon continues to weigh on the stock. And it is peak shipping season were a week away from christmas and amazons free next day shipping has officially kicked into high gear Frank Collins joins us now with an exclusive first look at that process. Hey, frank hey, there, wilf. Amazon has been working on its ground game. The companys global fleet of those bluebranded delivery vans has increased by 158 since june of 2018. Those advance deliver the majority of oneday shipping items that tom to your house the tech giant is expected to see the announcement it delivers by about 50 in an exclusive interview with top adviser to ceo jeff bezos, we found out those vans are a key part of the companys strategy after moving to oneday this year, weve had some acceleration and new growth. And as our volume grew, we felt an opportunity for more people to come and offer a great experience to our customers. Delivery Service Providers or dsps are that important link in the chain. Reporter and amazon handles about 50 of its own deliveries now. Thats expected to increase to about 70 next year, so youll likely see a lot more of those vans wilf and contessa, back over to you. Thank you so much, frank. Up next, a slap shot in the dark the nhl is betting big on international expansion, but could the trade war derail its plans. Nhl commissioner gary ttn inusheadbema apps are used everywhere. Except work. 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 the National Hockey league noi announcing a new Multiyear Partnership with anheuserbusch today, naming bud light the official beer in the u. S joining us, nhl commissioner gary bettman in october in las vegas, you talked to me at length about partnerships for Sports Betting and why thats important why is this kind of partnership with a Beverage Company important in your overall strategy its all about activation, bud lite, ab, great at activating with their customers, most of whom are nhl fans. They have already relationships with our clubs and theyre going to activate around our big events, whether its Outdoor Games, the playoffs or the finals. Does this mean that bud lite is the only beers no, the arenas have their own concession arrangements, but you have to be an official sponsor to activate using our ip and having a presence at our events. The wall street journal had an article this week about your diversity problems and how important that is for growing it in october, we had talked about the importance of china in your plans to grow hockey internationally. But when you look at the numbers here, 59 nonwhite players in the league in this past season, averaging out to two per team. And that number had grown 14 . Whats the challenge and how do you overcome it . We pride ourselves on our diversity, our International Diversity is unlike any of the north american sports. And weve been working hard, because you have to remember the history of the game was four franchises basically in the northeast with two in canada and weve been working very hard at making our league more diverse and making it inclusive, particularly through grassroots programs and make sure anybody who wants to associate with hockey at any level finds us to be a welcoming sport what does that mean, that you do it at Grassroots Level . Well, we have programs, i believe, well over 20 throughout cities in north america where young people who wouldnt otherwise have an opportunity to be exposed to the game, we give equipment, we give instruction, we give ice team to introduce more and more people to the game but most importantly, we want to make sure the atmosphere and the environment is inclusive and welcoming. Commissioner, recently, your peer, adam silver, nba commissioner, criticized traditional cable pay tv platforms for not allowing the sport toget enough access, whether thats to young people or to less well off people do you agree with that criticism . Not to agree or disagree with adam, from our standpoint, we think our partner nbc and our relationship with Disney Streaming services, which has our digital platforms, this is all in the United States, they do a great job promoting us. Our demos, we have a younger audience than the nba and i believe the other sports we have a very avid fan base and i believe our partners are doing all the right things having said that, we understand that the universe is changing and we have to be forward thinking and adaptable, which is one of the reasons weve invested in player tracking to create a better visual experience and to create more data, which is not only good for connectivity, but also for Sports Betting it keeps gamblers more engaged and gives them more opportunities for ingame play everything were doing is intended to give our fans more connection to our game, whether its technology, whether its media partners, or whether its big events like Outdoor Games like were going to have on january 1st, in dallas, a quote, nontraditional market where we sold 84,000 tickets for the cotton bowl in less than two weeks for hockey in tx youre seeing that kind of fashion in las vegas, too. Commissioner, just want to ask about your view on china and youve mentioned in the past and, where do you stand on the right for members of your sport to speak up when they have issues with chinas human rights abuses or antidemocratic processes. We heard from an arsenal player the fact is, were going to adhere to our values and were going to do business wherever it makes sense and if its not comfortable for certain places to host us, well just have to deal with that one final thought here. Theres a lot of concern about the condition of former nba commissioner, david stern right now. Do you have any update on how hes doing i dont have an update. The nba put out a statement earlier this afternoon obviously, his condition is serious. Hes getting great treatment hes got the love and support of his family and his friends, of which i consider myself one. Hes been a great friend and mentor for a long time and oim hoping and praying for a speedy recovery commissioner betman, thank you for joining us today appreciate that. Appreciate it still ahead, risky business. A checkin in on junk bonds. And later, betting on fake meat, pea farmers feeling the heat, but its banking on Companies Like beyond meat to bail them out. Well explain when closing bell comes back [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. Dash board today, mike. A spread offense, the way the Bond Investors is play offense is by bidding up the bond prices, base cheh accepting lower yields to take on risk look at the double b rated corporate thats junk bonds, right, the highest most creditworthy level of speculative grade highyield debt afb obviously treasury yields are down a lot too s in compressed right here about 3. 7 double b rated can be borrow 3. 7 on average. Thats the selloff last december when the equity market sold off. 2015, 16, the energy crash really accommodative environment for risk assets valuations is it getting too skeezed or too over optistic for the year end creditors or is it a year end push into the year end risk assets but for now accommodative. A couple weeks ago we talked about lower levels of credit quality than that. Yes. That had a temporary spike. As a matter of fact far lower levels by triple c rated bonds, you would see the opposite, the yields have gone up. There is a bit of discernment going on, a surprising between junk bonds and lower level junk bonds, which are driven by a handful of issuers and sectors. By size of the market. Very small, yeah. Up next growing peas in the u. S. Losing money but banking a part on the food market to turn it around. Jane wells is live on a pea farm, hi, jane. Hey, contessa peas are good for the body, the soil, but not a good Business Model as plant based meat is hyped because its sustainable is the hype also sustainable that, we closing bell comes back do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. And when you open a new brokerage account, your cash is automatically invested at a great rate. Thats why fidelity leads the industry in value while our competition continues to talk. Talk, talk while our competition continues to talk. 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. American pea farmers lusing money. And banking on the plantbased Meat Industry to save them jane wells live from a pea farm in montana with more on that story. And it looks cold out there, jane. It is cold ob contessa, very cold thats why the peas are long gone harvested a while ago a while before they plant new ones production up 40 from a year ago. A lot from montana but half of the paes crossthe country are in storage we are at low prices we havent seen in a linc time because most peas are exported and the two largest customers china appear india have tariffs as high as 50 which crushed the pea prices farmers like paul. Hope surge in domestic demand makes up some of that but the plantebased meat is new to them. There is not a lot of talk about growing peas for cliff bars ob ripple milk on beyond meat ifs in sustained i want the opportunity to get in on the ground floor. He has bought a new seed this season frb purest foods which supplies highprotein pea pree tone to beyond meat and caringle made a 100 Million Investment in purest. Blue peas theyre blue because they are blue thats a prefertilizers to give it a shot. Its nongmo as all are. But the particular seeds will not be organic because of the coating to help fight off disease. Okay, but what about the fact that we are starting to see a breakthrough that china is going to buy more Agricultural Products does this give the farmers hope to go back to the original customers . They really really hope so. China, who knows they dont want to believe they dont want to get up hopes. The Bigger Customer is indy. India has the tariffs because its trying to support its own pea farmers. Eventually india will have a bad year as the u. S. Farm ertz say here the u. S. Spigot back on and they will buy at least domestic demand provides some stability if the hype is real. And so, jane, in terms of overall pea prices are they getting even lower than they are in the store i would say for the surprise li price certainly wsh, theyre one of best vegetables out there i think i have to stock up theyre so cheap. And, yes, they are at 20year lows so cheap which is why farmers like them as a rotation crop this will continue unless some farmers decide not to grow peas because they cant make money until the trade war gets better. Then you piet see prizes come back. Jane wells real commitment thank you. She needs a hot cup of pea and ham soup. Or peas porridge hot didnt that come from the uk . Probably. Love peas you dont get them as much in america. Peas with almost everything back home we grow them our sold. Peas porridge cold. Crushed pea on toast rather than avocado we are out of time alas. But we continue this discussion ourselves. Fast money begins right now. Yes, it does three peas in pod at the nysep thank you. And here at the Nasdaq Market site a little further uptown im Brian Sullivan on this rainy tuesday outside the trainers vent yurg the weather to come in tim speerm. Karen finerman, dan nathan and guy adam y with markets set another slough of record. From the bullish man on wall street he tells us why he is so optimistic and what the biggest richlk to the market rally may be plus bogey you