Indices drop sharply earlier, as the number the coronavirus cases continue to say rise and despite solid labor market and manufacturing data, yields are falling today. Some oracle employees are planning to walk off the job any minute now in protest of the fundraiser oracle founder Larry Ellison is holding to raise money for the reelection of at the President Trump. Well bring you any updates when we see them. Thousands of employees have already signed live pictures nothing to report there, but well bring you any when we get there. Joining us is stephanie link good to see you, as always were down about half a percent, so well off the lows. What did you make at that gut check this morning, and are you in fact encouraged by the way the market has steadily improvement that that ises that theres confidence with the ceos, and that jibes with a data here in the united states. Earnings are running about 3. 5 . I understand we have to deal with why the dollar is so strong, why is gold so strong, the yield curve, but i do think the confidence for ceos is very, very telling and encouraging to me. Were going to deal with all of that this hour. Lets start with the big market drop earlier, lets get to bob pisani for what is driving these swings bob . We had a notable sell Program Comes in a little after 11 00, mostly the big momentum growth names. Take a look at whats been going on in the market we have the market very stretched, overbought. Earnings have been trending lower on coronavirusn what is going on its been sideways for a few days. Virgin galactic moving all over the place. Coronavirus fear s not going away weve seen very heavy volume today. This is where you play the coronavirus, in and out heavy volume is my emphasis there. Finally Retail Stocks are tough to figure out. Theyve become high beta names today a lot of these names like j. C. Penney inexplicably up. Back to you guys earlier today i caught up with james gorman, who revealed he first started looking at etrade back in 2002 but the conversations this time got real in december. Heres what he had to say. When i get that done, you have to be very opportunistic. We pull in a bit for your company. If we messed around with that and tried to do this on your cheap, when you and thats what we did. Heres what he had to say about the rationale for the deal we bring in technologists. Premium clients now at a level we havent been able to do theyve got to make like we do we have a lot of young clients, a lot of clients who dont have a lot of money, but most of our business is in the 1 to 10 millionplus households. Their demographic is different its certainly an option play on that but they also have a heavy trading demographic, which we respect and will support, and nothing will change for those folks, and then finally, you know, this can be a platform to take internationally ive been very interested in having a digital platform outside the u. S. Rather than trying to rebuild massive financial the stock is down about 4 , though the deal is diluted to the tune of about 12 , it could have been down a lot more than that, Goldman Sachs, by the way, is down a couple percent, likely due to the opportunity costs from not having down this deal. A lot of talks since they i did speak to a Senior Source at Goldman Sachs, who said, of course, they considered it, but didnt want to geld with the deal organically on their own without paying 13 brill on. Its an amazing strategic bit for Morgan Stanley it is quite expensive. Its a good for Goldman Sachs, but not quite as good, but the currency with a morgan share price was weaker so you can understand i will also day neither of them will have wanted to say this deal and in that sense its a big of a win here for james gorman here weve got more guests to discuss this with us, victor, from the online broker, and former director of trading at td ameritrade, and rudie adolph good afternoon to you both im going to come to you first, 4 down, stephanie i like the risk, about 3. 1 trillion in assets 5 million new customers, to bring in about 60 of your business and less reliant on the institutional side that helps on the fee business side and then you get the millennial, a Younger Generation i like the strategies, but i did like your comments about the technology innovation, and thats what all these companies are spending a ton of money on is in technology youve got to integrate it. Victor, i wonder what you make of this deal, a company like your own, that youve been in one of the companies, also like robin hood, that challenge the traditional brokers, and have led to the price war. Do you feel threatened with a go lie like Morgan Stanley moves into this space . Certainly not in terms of the etrade transaction, that was a question not necessarily of if, but when and who . Even the last time i was on this program following the acquisition, somebody made a great point that etrade could be a potential holding for the m a potential. Youre seeing that realized here today. This does have some potential implications for the industry. One, i think New York Times said it best this is a combination of wall street coming together with main street you know, stephanie mentioneds theres 8 million total accounts, but the way you get there is very, very different. You have 5 million accounts, but 260 billion in total assets on the Morgan Stanley side, you have 3 million, but, for some cases it could be complementary, but you have many different companies. Weve been successful with those. How does it affect your business well, you know s. Its a very attractive steroid, but its a tale of two cities on the one hand you have the traditional Brokerage Firms and banks losing market share. So in many ways, its a consolidation move all Innovative Technology plays, because quite frankly, theyre not usually doing well, but no questions, they are losing market share we should winning, and quite frankly they have not many choices, but consolidation and cost savings. Is there something you would have preferred Morgan Stanley to do theres a reason traditional players are losing market share. Its been a huge area of success. Every year, it takes last year, to assets that were leaving through brokers and through clients. Theyre coming to our segment. What could they have done . What should they have done ultimately change from selling products ultimately to gives best possible advice, which is what they maybe to Morgan Stanley who almost every quarter increased the cease management. We were known as a serial acquirer, and it does take a significant effort how deeply will they integrate these services james gorman mentioned hes excited about the directtoconsumer integration on the banking side as well as an interesting grailed and International Platform he did mention respect and hope to keep things business as usual for the trading business, which i think is fine, but i think in this climbed, where you have fin techs like us, continually innovating, new, rich experiences as well as new capabilities, i think any time spend integrating is time spent were going to get the opportunity to deliver new service services. I think thats going to show you the speed with which these firming can innovate thank you both very much fo. Are we still going to be super bowl ads from etrade . Good question hopefully but i think it speaks for the big difference for the culture etrade goes for the mainstream investor. And they wear jeans and tshirts in the office, not suits and ties. We have a big interview with Interactive Brokers chairman that stock is on the move today, up 2 after the deal was announced. One of few remaining independent ones hell join us tomorrow on closing bell. Redwood city shores area, its a log out more on that in a second employees not policed with a fundraiser Larry Ellison held for President Trump yesterday in california tickets billed as a golf outing and reception went for 100 to 2350,000. Oracles connection to this administration is flog new the cfo joined the president s Transition Team in late 2016 oracle has 136,000 employees, nearly two thirds of them outside the u. S. , so thats important in assessing 9 relative impact of this protest. We wont even see this protest from the outside theyre not walking out, but logging off at noon, no less, at lunchtime, when a lot of people probably walk out, and more of what is a quiet, individual protest. Guys weve seen a number of these movements, i remember the google one. Have they been effective for raising awareness for management they raised heat on google. I think a lot of that was on the implication of what google is now doing ran against what it had in the past. I dont know if were going to get that here with oracle. This protest to me seems designed not to be seen. You with take your guesses into why that is, but as i mentioned people knew that elements of Oracle Management were close to the trump add mrgts already, and i imagine they wouldnt smile on a massive protest at headquarters jon, thanks so much well check in with you later if we see a meaningful walkout. Boston beer shares getting hid heart. Coming up is jim cook, and he will late out he strategy for competing in the increasingly popular hard seltzer business. Plus is wealth a litmus test for democrats, after Michael Bloomberg was attacked last night. Servicenow the smarter way to workflow. vo in every trip, theres room for more than just the business you came for. Lets make the most of what weve been given whether thats getting a taste of where you are. Lets get to living. Or bringing some of that flavor back home. Thats room for possibility. Lets get to living 42 minutes left to trade we have a news alert on hoyt how the coronavirus is affecting airlines phil increasingly china has essential become an island when it comes to International Air service, with so Many Airlines not flying there we are now getting our first estimates from the International Air transport association, think of this as the International Trade association for all airlines around the world. It estimates that global traffic this year will drop 4. 7 because of the coronavirus that means we would see first overall decline in demand on an annual basis, first time e 2008 and 2009 in terms of lost revenue worldwide, looking at something close to 29. 3 billion. Thats the estimate from the association. Thats where theyre at right now. Were not sure when airlines will start resuming flights to china. Thank you, phil. Stephanie, i wonder if this is priced in. Airlines are only down 3 over three months this is a big deal. And traded singledigit multipl multiples. Im wonder if that 4. 7 drop, and in the second half are think estimating maybe back up airlines are hard. They tend to be very volatile, tradingoriented stock you pick one, ride it through or trade it and join us at 7 00 p. M. For a special report on the outbreak Michael Bloomberg maybe his debut debate tonight his health became an issue. We have a grotesque and immoral distribution of wealth and income Michael Bloomberg earned are man 25 million americans. What a wonderful the bestknown socialist in the country happens to be a millionaire with three houses. All i know is ive been very lucky, giving it all away to make and a good chunk goes to the Democratic Party lets bring in grover frank. That particular selection came across better than maybe some other appearances last night, but robert, i guess the key question is he does have policies to address this does he successfully get them across i think he did himself a disservice on two fronts number one, he didnt deflect the wealth question by saying i may be wealthy, but im a traitor to my class, and more than three times what Hillary Clinton was proposes in 2016 thats number one. He didnt put forth the policies that are antiwealth instead the focus was about the billions he has. Number two, he didnt talk about his sort of upbringing from nothing. This is a guy who grew up . Suburban boston, got laid off from wall street, started his company on his hone, became successful, now giving it to charity. So it all became a debate where everyone was pointing to him saying hes rich, so therefore hes discredited who is the toughest . By far Bernie Sanders you look at his policies, hes looking to raise Something Like 20 trillion but this is a party, remember, used to criticize policies that favored the wealthy. Now theyre criticizing the wealthy just for being wealthy last night shifb a referendum on the president , instead it was a refer wrenn dumb on bloombergs wealth i think he could have done a better job directing it back towards his policies. Mayor pete was saying im the only one up here not a millionaire. The only person wi house. I think that scored him some points it really was an important theme throughout the other point, to go back to your first point, mayor bloomberg tried to make a joke about why he did not release his taxes. That wentz down as a ton of bricks youre just leading a different life from any american and youre out of touch. I think that whole question of his tax returns are thousands of pages, turbotax doesnt work, i think that was poor, but you contrast it with what the white house is saying is that we have a blue collar boom, and its thanks to us, versus the democrats who are saying americans, your problem is that bloomberg has too much money i think most americans would relate to the issue of lets build a stronger floor for america rather than some kind of ceiling for those at the top thats why i think the two contrasting messages, one from the white house saying we are helping the blue collar folks get better opportunities versus the democrats saying all your problems are due to rich people. I think thats going to be an issue in the election. Robert, thank you very much i do think the big takeaway from last night is Bernie Sanders lead hasnt been reined in theres a lot of checks and balances in the political system, thats so far as he goes are you surprised given the Bernie Sanders is the winner from tonight, and we didnt see a bigger Market Reaction i am. In particular like health care, financials, its warren and sanders that are focusing on the as it makes sense. If bernie is the nominee, trump will win thats what wall street is trading at maybe its going to be closer if it is bernie. We just dont know its still too early you have to give bloomberg another shot Elizabeth Warren was on fire. She was up next, it is the word on the street features one skyhigh stock that could be ready to come back to earth theres your clue. Former fed vice chair done combs talking with us. Back in a cup 8 minutes. When yowhat do you see . Itical issues facing our world, we see a billion more people breathing free. We see access to fresh food being the global norm, not the exception. We see homes staying cooler, without the planet getting warmer. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Time to get word on the streets. Open haimer raising its goal the firm views the recent slide in Interest Rates as an incremental catalyst for Home Improvement retail the stock is up today. Maintaining an overweight rating there, but saying the mobile game company has strong underlying engine of live services, such as words with friends. Piper says that znyga has three launches in the pipeline, providing visibility into new revenue opportunities. Even spaceships must return to earth, says Morgan Stanley. A modest correction is overdue, and advocating for a Capital Raise as logical these two stocks, tesla and Virgin Galactic, its hard for analysts to cover. I want to say, though, clearly, hes been overweight the stock and it soared, but given what he rights weve got and hes still got it as a buy. Its impossibility as an analyst. It can change in an hour. Theyre so volatile. It could have a pullback, but why i mean its an impossible position theyre in. The price target is 22 its 36. Hes not doing anything with the numbers. And because hes bullish on the story, but i guess. But bearish in the short term say times 20, 30 sales i mean, like this is crazy the valuation is nuts. But the volatility of both those stocks, it can change in a heartbeat. Its possible its for analysts. 30 minutes left of trade stocks lower down 144. Indices dropped even sharply lower. They were down 1 at the lows, as the number of coyne vire cases continues to rise. Were told that the u. S. Economy is strong, but its too soon to judge the impact, and despite solid labor markets, manufacturing data yields are falling today. Thats been the pattern lately. Time for a cnbc news update. Tyler . Thank you so much last nights democratic debate set a new ratings record, across nbc and msnbc, both are Sister Networks of cnbc the ratings driven in part with Michael Bloombergs appearance it has so the more than 464 million. Hes not been on the ballot and tested yet. Sanctioning for in iran to influence tomorrows election. The iranians people know tomorrows election is political theater. Its a republic in name only when the government disqualifies half of the candidates running for office. Finally, Roger Federer announcing he will miss the french open and three other tournaments after undergoing knee surgery he says hes kept to a full recovery and looking forward to wimbledon later this year. That is the cnbc news update this hour. Back to you. Tyler, thank you. I love the fed, when i mean the fed, i mean the tennis players. Hes the most stylish player i have ever seen really good. I love it when he comes out in the allwhite what a gent. We have your last change trade coming up. Plus find out whether the surging could derail the bond rally. Yields lower, of u. S. Government debt. Were now at yet52 oth 1n e tenyear well be right back. Whats important to you. Ts w saving for avas college. Being able to retire on our terms. Taking care of dad. Why Ameriprise Financial . My advisor cares about my personal goals. He gives us comprehensive advice. I feel prepared for whats expected in life and even whats not. She helps us feel confident. We know our financial future is secure. With the right financial advice, life can be brilliant. Ameriprise financial. But inside every etf. There are untold hours of careful construction. Infinite what ifs . And contingency plans. Creating funds that help target gaps in client portfolios. Tap untapped potential. And strengthen confidence in you. Flexshares. Powered by over a century of investment expertise before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Guy 25 minutes left of the trade. Check this out rbc looks at houses tied china, japan, germany and uk it turns out not so much one to one would mean our economy is in lockstep so when Global Growth is slows, as europe and japan looking ugly the u. S. Can bankrupt it off what does it mean for stocks usually when the dollar strengthens, it slices into earnings and sales that are earned abroad. A strengthening dolan doesnt necessarily mean a strength anyone market. Sometimes they do move in opposite directions. But there are plenty of examples when the two can march higher and lower together thats whats happening noun stocks of up, the dollar is up we have better growth, higher Interest Rates, and we know that money so whether its our dollar, our stocks or our bounds, theyre all in demand. So watch those names. Whether its Goldman Sachs, stocks down, which revise the forecast, blackrock, i tried to put together as many banks as i could with forecast dollar weaknesses no far. So far theyve been dead wrong. That means that earnings are probably dead wrong. Unless theyre hedged. Some of these hedge, some dont. Only the dollar, the yen has lost that because of the terrible gdp growth. Its also a growth play, as i was trying to point out. And for all those reasons when a mark goes down one day it will be interesting when the coyne vire gets contains i would expect you may see a mean reversion blackrock global allocation portfolio manager, russ, how much will it hurt earnings the dollars rise has been very soon, but i dont think its gotten to the point i can give you a two reasons, the first of which is a quick rise, but its been contained. The dollar is up about 4 since recent lows. Compare that to what happened in late 16. You we saw it again this week, with the housing data, it may point out while the dollar rising, most other measures. Rates, volume tilts are going the other way. If this is the extent of it, i think the market can survive. Is it plausible that the banks around the world of the 2k0e68d markets, at least, will ease most significantly is the u. S. Plausibly in a global slowdown environment, cut a couple times. I think you would need more evidence that the virus is affecting Economic Activity i think the central bank that helps support is the pboc obviously the bank has taken a number of measures thats another reason why i think the world can survive a moderately stronger dollar do you think theyre underestimating the risks . This is the 64,000 question. None of us are epidemiologists the things were tracking would suggest that at least from the metrics we are looking at, the number of new cases, this is not accelerating now, the question is how quickly does manufacturing come back how quickly do Migrant Workers in china go back to the factories . At least its a hit to the first quarter, and whats become apparent is the rebound may be slower than investors thought in the beginning. That may be one reason that bond yields have remained low theyre reflecting that hit to growth russ, thanks so much for joining us. Thank you. Good to see you. Still to come one of the lastchance trades catalyst rich. I know, it was confusing there. That was my phrasing. Victorias secret is going private why l brands is selling its stake and how much its getting for it well be right back. Two nights, free night. Book now at bestwestern. Com. Doprevagen is the number oneild mempharmacistrecommendeding . Free night. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Stephanie, whats your last chance trade technologies. Cath catalyst rich the number two area roe space company. Theyre going to assume the h vac and elevator debt has been a real problem, so theyre going do pay down tech so its really company specific. Whats the variation like its not cheap at all, but i think as you spin out these pieces you have better cost controls, better market share and better management teams that are kind of running in much more to go. Finishes usually do work, they really help stocks down a bit today, but weve been 14 minutes left at the moment were down 140 points next well preview the key metrics with dropbox earnings. As a reminder, you can always watch or listen to us live or on the go closing bell is coming right back with the market zone, uninterrupted coverage of the final minutes of the trade can we go get some ice cream . Alright, we gotta stop here first. From smarter atms, to after hours video tellers comcast business is connecting thousands of banks to technology that turns everyday transactions into extraordinary experiences. Hi there. How are you . Do you have any lollipops in there . laughing no, sorry. Were helping all kinds of businesses go beyond customer expectations. How can we help you . Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Car vending machines and buying a car 100 online. Vented now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. 11 minutes left in the trading day. We are now in the closing bell market zone, commercialfree coverage of all action going into the close we have stephanie link and paul hickey from bespoke to break down the action. Were still down 156 points, or about 0. 5 on the dow. Our own Steve Liesman is sitting down with a fed chair, talking about Market Pricing on rate cuts is a little tricky theres the market expectation for rates, also terminal liquidity, so what i prefer to do is also look at surveys that many folks do of Market Participants theres obviously a probability of outcomes, but i dont think theyre pricing in that rate cut, even though Market Pricing might suggest that. Does it worry you that maybe the fed and market are on different pages . Yes, absolutely it does, but were getting different commentary from all of them. Im looking at the Economic Data we have seen in the last couple weeko why the Market Pricing in a cut in the summer. I think its all about corona. I like what jim cramer said i would rather hear from dr. Fauci, because nobody knows the trajectory of the virus, how long its going to last and how deep of an economic hit, so the fed cant make its calls until we start to see that, either, but we always do love to hear from rich. We want to hear from both. Paul, quickly whats your take on the overall market valuations in rates stay where they are are they supported i think so. You can justify the level of the stock prices here. To the point of do we need another rate cull philly said today, the third stronge twomonth increase in the history of the surray, so were seeing rebounding data housing data is on fire. Jobless claims are near cycle lows at one point the markets were pricing in up to two cuts. So, you know, i think thats overstated here, and i dont necessarily feel the need that we need to see further hikes, but we do have 9 uncertainly of the coronavirus, and if the dollar gets stronger, youll see the president out there saying the rates are too high dominos jumping after earnings indicate rogers has thdetails. Its a big quarter for dominos, across the samestore sales in the u. S. , thats a beat for the first time in over a year, up continues to Third Quarter the ceo referring to the aggregators as a circular firing squad that we have to keep continuing to discount, because they dont really have a choice. He also added that dominos may get hit by a few stray bullets in the process, but its not quite clear how though evaluate that back over to you. What did you make of this, stephanie . The oneyear chart is crazy its nowhere, nowhere, nowhere, and then its up everybody was nervous about competition and heavy investment for this name all last year. Business model probably broken these are the things i read about. Wouldnt touch it because the valuation also wasnt compelling you can see why the stock didnt do much all of last year, and all of a sudden, wait a minute, theyre actually working the last ceo got so much credit, and ever since alison has come in, its been dicey. But the competition has heated up, too and obviously were starting to see results. Coming up later, by the way, dominos ceo will be on mad money. Dont miss that exclusive interview. Viacom cbs reporting a big miss this morning. Julia boorstin has more. Trading down 17 after reporting revenue earnings and guidance that fell short of wall street expectations, but the ceo called this a transitional quarter, and focused his comments on his new strategy in contrast to rivals, including disney and netflix which are ramping up viacom says it wants to increase the return on the current content investment he also laid out the plans to combine Digital Access into a multitiered verse with a free tier, and paid tier and more premium option. Julia, thank you. Paul, pretty you wiuglyloog chart today. What do you make of the move yeah, even before the merger, both these stocks werent doing too well so its a continue ways of the weakness here. I think theres too many options on the streaming front the cbs product just isnt as compelling like you see from disney or netflix. You know, outside of the live sports, you know, the traditional broadcasting model isnt really working out all that well. So this is a name we dont really have very much interest in or pay too much attention to. Stephanie, five times if you believe e. I dont know if i do you think its going to keep going down yeah, i think theyre not the leader in this space at this point, and even the leaders are is it because of their brands its content. I pulled out of the disney i thought its too crowded thats one of the best ones, right . Because they do have the library, they do have the content. Just wait until they come off some of the netflix shows, so i think thats the one i would own, but i dont want to own the space right now. Victorias secret franchise officially going private l brands confirming that private equity firm will be acquiring a majority stake in victorias secret, a deal that values the brand at 1. 1 billion. The ceo will step down as chairman and ceo victorias secret has faced criticism for failing to keep up with changing consumer tastes and trends competitors third love, a private company, we reached out and go the a statement on the move they called it a positive step for our industry, which has historically been dominated by unrealistic ideals and images of what february anyonity and sexy should sycamore higher demands to be president last year, my advice would be hire a woman and have her run this brand so they can keep up with what women actually want. They had a woman in the brand who got rid of the bathing suits which was helping them that was the beginning of the demise good point whats it worth the according to analyst notes 14 to 16. Its huge this is a 100 stock. I guess the reaction, its going down, because theyre not getting that much cash here. We also thought they would get three times ebitda the stock is up 30 this year, so i think its a giveback. Weve steadily recovered, and now only down 0. 3 on the dow. Lets get over to rick if you look at intraday of tens, the low was around 1. 505 look at the year to date chart that is currently our low yield. Thats how close we came bunts, not so lucky. They closed at 94. 5, which makes it a new fresh low, and the dollar index continues to surge up 12 out of 14 days despite strong ppi charts, the curve rates donnell seem to be able to go you. Bertha, yesterdays low was and the minute we traded until it at 11 00 eastern, everything fell apart. Basically were seeing tech down here two of the last three days, rolling over a bit, negative for the week. Apple off the lows, but still one of the biggest drags mid caps and small caps are the standout all better than expected on earnings, also with doubledigit Short Interest different story, this is a Parent Company of south beach diet, silver sneakers, and they bought newtry system last year, which they just wrote down thats not a pretty part, bob, unless youre a short seller. Yikes bertha, even in a world where investors are crazy for Growth Stocks, Virgin Galactic really takes the case took 31 a half hour later, a 25 move in half an hour look at this volume. Were going to probably hit 150 million shares traded. 195 million shares outstanding you see the move here coming back, though, late in the day, along with the rest of the market Dow Jones Industrial average was down 388 its going to end down 131 points \s if youre just joining us, welcome to closing bell. Lets look at how we foreigned today on wall street lower, but certainly off the worst levels of the session. There were a lot of wild wings s p does settle down about 0. 4 of 1 . Technology and Communications Services were the worst performers theres your chart of the dow, down 130 in the close chblgts s misthose growthier stocks, after a tremendous run, down 0. 7 the index up small caps. S on down days, its plays catchup yields remaining relatively low on the tenyear. Coming up, well get results from dropbox as soon as they cross. And jim cook will discuss todays earnings results, and the big push into the hard seltzer market, whether they can keep it on the shelves joining us to talk about the market today is paul hickey from Bespoke Investment group is still with us, and so is stephanie link i think theres still a bit of uncertainty about the macro, uncertainty about the election the yield curve is flattening is never really a good sign as you talked about the dollar strengths, there are some indicators that are just flashing yellow signs. I can turn this around and say earnings are really good how about the data this week and all the manufacturing data as of late has been good, so i mean theres a push pull. The problem is youre at alltime highs, and now earnings are kind of dissipating. This is the part in the program where mike santoli said, yes, stocks fell back against, but 6 away from highs has the recovery been too much of a vshape . No, i dont think so. My longterm proprietary model turned bullish in 08. The intermediate model flips more on which. The shortterm trading turned negative in mid january. And that looked like a good call for two weeks, and then looked like a balance dahl. Looks like a good call again today. The markets are squirrely here i think stephanie nailed it. Theres a bunch of divergencdivs paul, what stands out in terms of sectors that look attractive valuationwise. Paul, go for it. I think on a valuation basis, when you look across the spectrum of sectors, most are trading at the highest valuations the two sectors that stand out are financials, which are only in about the 50th percentile so those are two energies quite obviously out of favors here technology is trading at the higher in ten years, but it has traded historically at much higher valuations. So i think, you know, we talk about we hear a lot about right now, especially with the Growth Stocks moving so much were looking like 2000. When you look theres similarities, but very loose similarities when you dig down deeper into them, theres big differences. For instance, the valuation of Growth Stocks right now is about a 50 premiumtovalue stock in 2000, it was 2 1 2 times, so that defies the highest market cap stocks to double today, and still have a lower average feed than the five largest stocks in 2000 were nowhere near those levels. That doesnt mean were cheap. It just means those comparisons dont mean anything. Youre looking for value, maybe go into the financials here. The valuationses are higher than the market, but not grossly overvalued relative to the market i just wanted to ask you what you make of the divergence with the russell 2000 on a down day like today, it went up. What does that tell you . Theres been rotation into the mid caps and small caps, out of the some of the largercap stock, but its a secular bull markets. So i think its got five, six, seven years in it, and youre seeing a rising tide lifts all boats. Well, one boat that is rising at the moment is dropbox the numbers just hit deer deidra has the numbers for you they beat on the top and bottom lines. On adjusted earnings, its a beat lets look at paid users theyre looking that dropbox can transfer it into paying enterprise customers so the company now that is 14. 3 million paid users thats a net add of about 300,000, which is nearly double expectation. Thats also coming in better than forecast. Now, we dont have this information yesterday, so it could determine where the stock continues to go, but we do not get that until the Earnings Call we also wonder if the ceo will take questions on a report published earlier through capital that says perhaps hes taken his eye off the ball, but right now investors are pleased with these results well be listens closely for the guidance. The short position has increased. Its not a huge le substantial one. Shares have actually risk, so it remains to be seen whether the Larger Community agrees. It was a good quarter so far, but we do not have guidance. That would be critical, and could change all these gains. Thank you so much for the story. We lost the linkup for a month there. Youve got a Short Interest there. That will show the shares jump a bit. Not huge, but for this company, and this market cap, yes. I think thats validates the model. Clearly it seems like things are going their way. Remember they had a sales reorganization that might also be starting to work, so not a supercheap stock, but i can see why the stock is up. Theyre making progress. Lets move on to the big m a news of the day. Morgan stanley, which boasts about 4. 5 today off etrade i spoke with james gorman about what he thought. I totally expected it to be down at the open i dont know where it will finish today we own etrade. This is not a bad it was created within earnings. Im comfortable with where the numbers are. S the dow down 4. 5 . They quite like this deal. I do think the share surprise has been since theyve seen late october, which is where the price wars kicked off. Thats crucial to them they saw 40 appreciate since the october low. That is their currency for this deal when you consider the other potential buyers, they had a nice run as well, but not to the same extent. Morgan stanley has just about the currency to do the deal. From a capital point of deal, they want to increase the dividend so youre getting an oldschool company tries to get into the new generation, and this is such a positive short term, the stock gyrations, i think you have to take advantage, because of the diversification of what theyre becoming, what theyre good at doing, theyll only get better. Everybody has been sort of glowing on this deal, and certainly we saw the marke reaction, but i wonder, wilfred, exactly what kind of business is he buying . Low margin, theyre having this price war when it comes to fees and competition, arent there questions as to what kind of Growth Business hes getting into here . But its exposure from a different client base. Theyve been more focused on ultrahigh net worth most importantly though, i think two other things. It gives them a corporate stock program, which they have build a great biggs in, but this gives them more scale in that area the other thing we havent mentioned as much, like theyre more wholesale funded, by getting deposited lows, and then the final point, which we havent discussed as well, on the capital side, this would probably improve their rating, the stress test rating and possibly lure the amount of capital they have to hold purely baas it diversifies their earnings its likely the fed will say yes, this is an improvement, you dont have to hold as much capital, but i think most analysts, most of the analysts are saying we like this, we think theyre conservative, provided they deliver right now for a couple years. I want to get you in here on financial evaluations. I know cant comment specifically on Morgan Stanley, but how do they look as was said earlier, the financials are cheap and energy is cheap, and the fact that Morgan Stanley is buying out e trade, i think is a quick final thought, paul. What do we see in terms of volatility i think were still seeing the underlying breadth measures hold up well were not seeing a major divergence despite the scares out of the asia. Im just looking in the window here, dropbox, which was up a lot more than a few minutes ago, is coming in a bit you have to watch the guidance the company has beaten earnings and revenues every time, but the stock has gone down five out of seven times, so its going to be keep what the guidance is coming up later on. Um next, chairman and jim cook were going to talk about whether the move into hard seltzer could be catalyst. Keep it here we were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. Shipstation. The 1but shouldnt somebody ofthis is be listening . Pression. So. Lets talk. Were built for hearing whats important to you, one to one. Edward jones. Its time for investing to feel individual. Boston Empire Company closing down s. The Company Behind brands such as sam adams, and truly, it would scale up to immediate the demand for har seltzer. Thank you for joining mess for a beer. Sadly we dont have one, but cheers to you. Lets kick off with the explanation for why the etf disappointed i guess your take is that its a positive because youre investing in something thats grown so quickly thats absolutely right. Clearly maybe people didnt react as well to, you know, the number i started sam adams in my kitchen 36 years ago so theres been upanddowns, and to be totally honest, were not that focused on, you know daytoday stock price movement, and quarterly earnings, and the largest shareholder. So what i care about is, are we building value where will we be in a year where will we be in five years lets not get distracted by what happened today or tomorrow, lets make sure were building for the future clearly the future play that the street is excited about has been truly the hard seltzer. I saw the tripledigit ground, but what about the biggest players. Everybody now has a solution i know youre not a stranger to competition, but does that pressure how do you deal with that. The beer business is very competitive. Its been that way for a long, long time. We were very pleased with what happened to the entrance to, you know, bud light seltzer. Thats the biggest beer brand, so this was the elephant, and bud light seltzer has been introduced, were the only hard seltzer that actually gained market share so weve gobeen so far affectedb bug light coming in. I think the truly hard seltzer has a different image. Were probably not appealing to the bud light drinker. Were appealing to drinkers that want higher quality, higher flavor, better flavor, and as a result weve actually gained share as bud light came in and took share from other people who is drinking it . Is it invest a demographic breakdown . And why are they drinking it is it because of taste health in a feeling that youre not real Drinking Alcohol . You know, we created the hard seltzer category four years ago. To be honest we thought it would be kind of white collar, mostly women, and we turned out to be terribly wrong its a much bigger category than we thought its appealing across all age groups, democrat stenographics quite frankly the biggest thing thats come into the beer business since light beer. We dont know how far is up. So hard seltzer giving you 5 alcohol, only one gram of sugar. Its very refreshes, a variety of taste we think its a beautiful fruit taste, so it presses all buttons, great taste, not much compromise, health and wellness cues we think that the category can double again in 2020 it seals to be apeople first to drinkers outside of beer. Were getting white wine drinkers, vodka and soda drinkers into the category we dont make products appealing to your standard mass domestic light drinkers. Good luck its about to be 5 00 your time is coming. Well, exactly 38 minutes cheers. Thank you, tim cook. Still ahead, tesla has done well on wall street. One of its cars is a top pick for main street. Should the fed cut rates again . Well talk tfoero rm vice fed chair don kohn and you can always listen to us on our app closing bell will be right 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. [ fastpaced drumming ] weve been a news alert on the nfl. Eric has the story. So just coming out of the owners meeting, putting out a statement saying they have come to an agreement on a new collective Bargaining Agreement with the Players Association this is just the owners side, the owners passing this vote they got at least a third voting they started their meeting at 2 00 today so that is positive news for the week they still have to wait for the Players Union to pass their side of it, and then it could be a 17game season stove expanded playoffs, seven teams were conference, with increased revenue shares, more benefits to retires, higher minimum wages. So this is a games for money trade that the owners are making here were looking for the players to vote on this in the next one two two days this year kicks off on march 13th so to continue the League Without a work stoppages. What was the big Sticking Point . A mix of things the owners wanted seven teams per conference and a 17game regular season the players didnt want that, but the owners said well cut away some of the preseason responsibilities, so they were able to find a middle ground when the owners got tv partners, they can expand it, give them more content, 57d the players benefit, because they get higher salaries. Eric, thanks so much. You got it. Up next, don kohn tells us how much ammunition banks have left to fight a global recession. More to come usaa insurance is made just the way martins family needs it with hasslefree claims, he got paid before his neighbor even got started. Because doing right by our members, thats whats right. Usaa. What youre made of, were made for. Usaa 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. We tend to see they guys near the top of the list. The news with tesla is interesting. They are in and out making the model. Remember just a year ago they pulled the recommended tag off the this vehicle, saying they were just too many problems there. Well, when you talk to Consumer Reports now especially the last year and as a result, not only did they put it as a top tick they say its the most to jumping jumpings. What about. It depends on who youre talking about . Edge certainly in the top half, theyre not in the bottom half jeep was, what, second or third to the bon, and thats not a good place to be cadillac was in the bottom five as well. Its obviously good for bragging rights, but does it move the needle on sales how big of a dragger is it you could make an argument that it doesnt move the needle. Land rover is like third to last, but they had record sales last year. Look at somebody like subaru this is built a reputation on quality and safety they are consistently at the top of these reports it does help with ha reputation, which i think ultimately helps with sales land rover third to last, last british automaker phil, thanks. Time to get a cnbc news update with tyler mathisen. Thank you very much senator Elizabeth Warren continues her attacks on fellow democratic candidate Michael Bloomberg from last night as she continues to campaign. Last night it was my job to make sure america got a closer look at mayor bloomberg, and come to understand that of all the people on the stage, he is the riskiest for the democrats he is the most vulnerable in a general election. From the department of irony, russian president Vladimir Putin thanking the fbi for helping thwart a terror attack planned for new years eve in petersburg. He said he appreciated the helping and would return the favor. They say you cant buy friends, but if you want to watch the 90s sitcom friends, thats what you have to do. The show has been taken on the floor netflix. Ugy tripled since netflix announced it was losing the show friends will return to the streaming world when the hbo mac Service Launching in may thats the update at this hour back to you. I reckon i once had all of them i dont have them stiff. It would annoy me to have to go buy them. I was amazed i got send a lot of the movies during the awards season, and so many dont have dvds tyler, thank you. Former fed vice chair will give us his take next 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. She is on her way to our house. What . I got it. Alexa, start roomba. The lexus es. Eagerly prepared for the unexpected. Lease the 2020 es 350 for 389 a month for 36 months. Experience amazing at your lexus dealer. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Federal reserve vice chair warning this morning that the coronavirus does present a risk to the u. S. Economy. Supply chains are very important, so to the extent that supply chains are disrupted by the current virus, that could show up as input to the u. S. Economy. You have the overall impact, so were looking at multiple indicators right now. Morgan stanley telling wilfred earlier, he sees signs of bouncing back theyll provide stimulus, theyll bounce back out of this. The chinese economy is much bigger and more coordinated form there will be hits in the short term, but theyll bounce back. Welcome back to you. How do you think about whether chinas lost Economic Activities will bounce right back i think thats probably the most likely outcome, but theres certainly a risk that it does. Its a terrible human tragedy, and is having a major effect on china, and rippling from there across the Global Economy through, as rich said, through supply chain disruptions, through reduction in exports, through tourism being cut down, particularly around asia i think the most likely outcome is they get their arms around things, it gradually dies out. The chinese economy recovers in the second quarter, certainly in the second half of the year, and it leaves a very small imprint on global gdp, but there is a Downside Risk here that it becomes a pandemic, so it affects more does it feedback to the u. S. . Certainly a little bit. From richs perspective as a Monetary Policymaker, i think jay powell had it right. Theyll need to judge whether the shock to the u. S. Economy, the effects are persistent and material so i think right now it doesnt look like theyre material it might be a small effect, but that could get larger. The persistent part is also very important for Monetary Policy. If things recover in china and china begins importing more and tourism recovers, and things are reestablished in the second half of the year, then easing Monetary Policy to counter a temporary shock like this would not be appropriate it wouldnt do anything to the shock, and the easeeaseing of monetary, it would just come in as everything was recovering i think the best guess is its not really something that Monetary Policy is appropriate to react to. Yet here we are again where the market is pricing in a fed rate cut this summer if you were still on the fed, how likely would that be, from your point every view . I agree with the other part of richs interview this morning with steve, that its not my best guess is Interest Rates would remain pretty consist tan over the year. I think the underlying economy is growing well, about in line, maybe a little faster than our potentially, and inflation is lagging the feds target, but i think theres its reasonable to expect that it will come up towards the target and to the target as the fomc does at current Interest Rates i would emphasize theres a huge amount of uncertainty around a prediction like that, and i think we need to recognize all kinds of things could throw that off, but that would be my best guest. What the market has priced in, and appropriately so if there is a change in policy, its more likely to be down than up, and i would guess thats what theyre pricing in that probability rather than a certainty of a policy ease. With the election in mind, how stroung do you expect the economy to be throughout the rest of the year without the election in mind, wilfred, i think it will be fine i think people are predicting 2 growth, similar to what they had last year. Thats right in line with potential. Incomes will continue to increase and certainly their debt servicing is very low Savings Rates are still pretty high. Consumers will continue to spend. The big question mark is Business Capital spending. It will be interesting to see whether that begins to pick up let say trade tensions were a bit lower. That could push the economy to a bit stronger but right now we dont have any indications that Capital Spending is picking up thank you for joining us. Youre welcome, good to be here. Up next seema mody has an upclose look on how dupont is helping to com bad the coronavirus. Reporter medical workers i facing a short an of protective gear what dupont is doing to get more suits overseas, when closing bell returns. Ll know, so much more. Peloton is truly a category of one and were just getting started. Now, lets do this. Together, we are going further than we ever thought possible. And ill tell you some important things to know about medicare. First, it doesnt pay for everything. 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Dupont set this white tieback suit that rangeses from 5 to 15 to help Health Care Workers are all these suits, the manufacturing process starts right here in richmond, virginia behind me you see the polyethylene fabric being adorned with heat and pressure, its steamrolled, and then it goes to a number of manufacturing facilities from mexico to vietnam, where the final product made dupont has seen production increase weve been speaking to a number of workers here, and theyre working 24 7 tots as much product out to china. I was going to ask if they feel confident there that they can meet riding demand i imagine theres a lot of precautions being taken. Reporter one of the learning lesson from the 2015 Ebola Outbreak was for depont to invest in a supply chain, in increasing and extending a number of facilities it has around the world that way when there is a disruption, it can be agile and put more assets to work. Seema, thank you. Seema mody in rich monday. Up next your earnings rundown. Well off their highstell you wh. Dominos stock is soaring. Th the ceo, a preview of that interview, when we return. What a time to be alive. The world is customized to you. Built for you. So why isnt it all about you, when it comes to your money . So. Whats on your mind . We are edward jones, a 97yearold firm built for right now. With one Financial Advisor per office, were all about knowing whats important to you the one who matters. Edward jones. Its time for investing to feel individual. [ fastpaced drumming ] try to win by attacking, now, we know the trump strategy distorting, dividing. Mr. President it. Wont. Work. Newspapers report bloomberg is the democrat trump fears most. As president , universal healthcare that lets people keep their coverage if they like it. A record on job creation. A doable plan to combat climate change. I led a complex, diverse city through 911 and i have common sense plans to move america away from chaos to progress im Mike Bloomberg and i approve this message. Along with 360 billion in assets, and of course this comes on the heels of the merger last year for more on the reshapes of the industry, lets bring in devin wright thank you for joining us thanks for havingme. Youre well placed for this is it rich or well priced . I think james gorman talked about it being a full and fair price. Its a good price, so i would be happy for any shareholders, youll own Morgan Stanley going forward, so i think that has to be contemplated. Morgan stanley stock was down a bit, and you come up with immediate accretion but i think its i think it will be an important asset for them. The digital story here in the space, so much is happening today, and i think with schwab acquiring ameritrade and a lot of the startups coming up, with, you know, brokerages going after banking customers, trying to go after a broader wallet share, its not about whats happening over the next year or two, i think its a bigger strategic pictu picture. What happens to the independent brokers that are left i think it depends. Really the game has been acquiring customers, trying to figure out how to monetize those customers. So theres some firms that i think have scaled enough where theyre in an okay spot. Really the theme here is you need to add capabilities, so you are able to service the customer not just on one product capability so many are becoming commodityized. Its where is there opportunity to provide advice or something thats valueadded where you can help the customer. Where were seeing things evolve, how do they find products that are going to provide better yield on cash provide lower fees on investment you give away trading, give away certain parts of management, and you have to have the ability to check all of those lists on both the asset side and liability side i think technology is enables firming to do this. Will Goldman Sachs be annoyed . Not so much that they didnt do the deal, but that Morgan Stanley did . I dont think so. I think Goldman Sachs possibly look at this i know you guys have been talking about the corporate stock plan business. So it really is a natural fit for these two firming. They talked about how they willed to convert stock plan so thats unique to this deal. I like where Goldman Sachs is going, their digital strategy, finding different ways to check the boxes on the asset side and liability side of a customers balance sheet. Whats the rating we have a neutral on Morgan Stanley, we have been bullish. Like i said, i like this deal, i think the market will like it more anytime they spend on it. Goldman just upgraded. I think its probably the biggest transformation of at the financial services, and i think theyre holding back i think theres more. Thank you for joining us coming up on the show tomorrow, could Interactive Brokers by the next takeover challenge. Thomas peter dffy will be with us tomorrow jim cramer just had a chat with the ceo well have early bites from that interview. Whats important to you . Saving for avas college. Financial security. Being able to retire. On our terms. No matter what your goals are, our trusted advisors can help you reach them. Ameriprise financial. Our trusted advisors can help you reach them. vo in every trip. 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. crowd cheering thats room for possibility. Shares of dominos surging today. Jim cramer just sat down with its ceo to talk about the strong quarter. In the fourth quarter, it certainty didnt get any easier from a competitive standpoint did you bond get incrementally difficult. We had an opportunity to tap the Capital Markets and take another debt and we deployed that to set the business up for 2020 dont miss the rest of that interview on mad money. A minute left, wilfred still hovering right near their highs. , and then a very steady improvement. I found that an improved fit both having big pivots on their strategying, and the market yeartodate i wonder if its a catchup thing. Of course its interesting that the focus has been on the struggles. It does affect the policy. Thats for watching fast money begins right now. Live from the nasdaq marketsite, this is fast money. Im Brian Sullivan in again. Welcome back misweft talked about a few weeks ago, if not called the deal thats shaking up the financial industry