Transcripts For CNBC Closing Bell 20160428

Announcing on cnbc he is out of apple shares. The dow component turning lower on his comments. Its down 2. 25 . Find out why he says this stock is no longer a nobrainer. Plus Health Insurer aetna delivered strong earnings. Mark bertolini is back to talk about the impact obamacare is having on his business and the structural changes he would like to see in obamacare to get them more involved in the process. Even as United Health is pulling back. Also its not just doughnuts, its a burrito like one of these, and this is a heavy burrito. That is heavy. Its still warm. It helped the Dunkin Donuts profit last quarter. It is the grande with two double ds. Well talk to nigel travis about how new menu items are helping the numbers. Ill pay you if you eat some. I cant. I just had chocolate. Takeover thursday is what we ended up with here. David faber has been covering all of it. Thats why hes still around today. Hes got the rundown on everything that happened. And youre right, it is. Its official. Its a real takeover thursday. We try to actually come up with these things sometimes when its really not warranted, but it was today. Lets start with the biggest deal first and well work through some of the others. The largest deal is the 25 billion acquisition of st. Jude by abbott, and its a deal in which cash and stock is being exchanged, of course, by abbott to take control of st. Jude. They hope to close the deal by the Fourth Quarter of 2016, and importantly, they see it accretive to earnings over the short term. Almost immediately post close, as much as 21 cents of accretion in 2017 and 29 cents in 2018. It is, of course, similar to many of the deals we saw last year in that record grer for m a in that it does include a significant cash component. Abbott will borrow. Borrow is extraordinarily xhep a cheap, and when you do that youre almost always getting accretion. Investors though not reacting the way they did to so many deals in 2015. Theyre sending abbott shares down. Its been roughly about 7 . Perhaps questioning some of the growth rate at st. Jude. Also dont forget, and something we hadnt mentioned earlier, abbott is selling another 3 billion in equity. So while it is giving you the accretion numbers on an eps basis, i dont believe theyre based on an additional 3 billion in equity being out there. So you have to adjust for that and that may be pressuring the stock a bit. But a huge deal, of course, very important deal when it comes to highgrowth cardiovascular markets, including atrial fibrillation. Just like to say it. Now on to the next deal which is a sanofsanofis bid for medivat. It was only a few weeks ago that sanofi called medi vations ceo to say were interested. There are other drugs they have in the pipeline, including a Breast Cancer drug in late stage trials and a blood cancer drug as well. All of this seemingly appealing to sanofi which is no stranger to doing hostile deals, even though they are very difficult to paull off. They did it with genzyme a number of years ago. There were few takeover defenses at that company. Similarly here, very few takeover defenses. You can act by written consent to throw out the board. At any point if you get enough people who say shareholders who say yes, you can toss the board. Thats a powerful weapon sanofi has in its favor. Medivation for its part saying as todays Public Disclosure of this proposal does not differ materially from the private correspondence they received less than two weeks ago, the board expecting to complete a review of the proposal at a scheduled meeting today and will let everybody know what they think about it. So well see what happens there. Many view this as a negotiation at this point. The question is will another bidder emerge for medivation to get a significant auction going. Finally our Parent Company paying a number that few thought it was going to pay for dreamworks. The deal is done. Jeffrey katzenberg, the man who founded and ran this company, is going to be essentially departing, but departing with a big paycheck. 41 pucbucks is share got everyos attention, all cash. Yesterday the news was out this was a potential deal. The stock of dreamworks traded up but it added another 24plus percent today in part because of these incredible multiples that our Parent Company is willing to pay. 24 times 2017 consensus ebitda of 172 million but theres a lot of opportunities here, guys, for synergy and efficiency. Theres a large sg a component at dreamworks. T theyve spent a lot of money. Why do they need shrek . They can fwl tbuild the david f roller coaster ride. We see franchise potential. They dont need to add to the stable already. Inl fully behind that if they wanted to do that ride. They can have an atrial fib brill lation machine there. Im glad you said it. There are clear synergies not just for the theme parks with the shreks and kung fu pandas but this deal with netflix. Tv and family television. Tv is important. Consumer products becomes even more important, and china, bill, also very important component of this as well where universal is trying to get bigger, and they have a significant presence at dreamworks. And so theyre hoping, and to justify that kind of a multiple, theyll come back, that is our Management Team at comcast, and say, well, when you adjust for all the synergies and the efficiencies, were not paying nearly as high a multiple to ebitda. But its been helpful to the likes of lionsgate. A term you used bear hug. What does it mean . It means coming public with an offer that had been private to put pressure on the company to deal with you and to put pressure on the shareholders. Its not a hostile offer in the sense of tipically a tender offer out there. But make no mistake, this is nasty, in part especially because of the threat theyre going to try to replace the entire board of directors. That always gets their attention. Thanks, david, very much. Its almost time for the bell to ring, folks. Well move on now. Billionaire investor carl aca icahn telling scott wapner an hour ago he has sold his stake in apple. We no longer have a position in apple. In apple today as opposed to maybe even six months or a year ago, well, in this one theres no need for activism assuming you could even do it because i think they have a great Management Team, but in this one you worry a little bit, maybe more than a little, about altitude in what youve been seeing. Scott wapner joins us now. Scotty, but he still thinks its a great company. You asked him if theyre still an innovative company. He finessed that by calling it a great company. So why did he sell here . I think he looked at a couple things. Frontally first and foremost, they made a huge profit of what to my calculation was about 2 billion. The cost basis they got into the stock, 68. They exited, he said, around these current prices. So they made some 2 billion, did carl icahn and company, and then the china factor. Not necessarily so much whats happening within the chinese economy but how the Chinese Government has reacted to Certain Companies and the way they operate over there, and he was increasingly concerned that the environment could become perhaps more prohibitive for apple through its Services Business and maybe elsewhere and just decided that at this point in time it was not worth the risk. Looked at the profit, looked at china, and i guess you should also add that i dont think he feels that great about the u. S. Stock market judging by what he said, and if you put a plus b plus c together, you end up where he got to, and that was, you know what . Lets just take the profit, cash in, and look for another great opportunity out there. And i mean, he touched on a number of other things, you know, as well. Different aspects of energy and that kind of thing, but we still think back to he was the one who really pushed for apple to return more capital to shareholders. Thats exactly what theyre doing now. I thought it was really interesting, kelly, where he said in talking about activism in general, that he doesnt think that every company should be out there returning cash to shareholders, increasing their buybacks, increasing their dividends, and using their cash that way. But he makes a distinction when it comes to apple by virtue of the amount of money that that company is sitting on on the balance shea Balance Sheet and the way it operates. He raised the issue of company that is have been taking advantage of incredibly low Interest Rates to raise debt and to use that money to buy back shares. I think its somewhat counterintuitive that people sort of look at carl icahn and maybe other activists and think that, you know, the playbook is what it is. Every company should be returning cash to shareholders through a buyback or a dividend. In fact, he said, no, i dont think thats the case, but in apples case, it makes perfect sense because of the kind of Balance Sheet and the kind of cash that it has. Either that or make an acquisition of some kind. Thanks, scott. Good stuff. As always, scott wapner there for us. Lets get to our the closing bell exchange. The dow is down 149 points. The lows of the session. Joining us is heather hughes, from sun america funds. Jonathan corpina on the floor of the new york stock exchange, and Rick Santelli from chicago. Rick, im going to start with you. We havent mentioned how the bank of japan surprisingly sat on its hands overnight when everybody expected them to really be active in the market and buy up a lot more securities there. And i dont think that our friend Peter Boockvar will mind me quoting him. He thought the japanese markets acted like spoiled children when they didnt get the stimulus that they were expecting. What did you think of the market response . Well, first of all, we all love reading what peter writes. Hes one of the best at it. I agree. Ill tell what you, here is my feeling and while were talking lets look at a nikkei chart. Keep in mind on this yeartodate chart, they basically went to negative Interest Rates at the end of january, and the response was a much lower low actually than we had today. See, i think the danger is, and i think peter is right, the problem is if they would have done what investors, quote, unquote, would have liked, which would have been more negative, even though i question that its stimulative, i dont know if the outcome would have been better. This is where i think it gets very dicey. If they would have done more, maybe the nikkei would have been down 5 . Maybe the yen stiinstead of dabbling with 108, close to the october 14 low close and favor the yen, not the dollar, maybe it would have moved more. The issue here, i think, is to rise above what the investors purportedly want and just think about the strategy in general, how much talk and how Much Research and how much comment, how many comments have come from investors and very large Money Managers globally. I think its a dumb strategy. I dont think it has any place in central banking, and i think in 20 years when we look back, its going to be like the leap strategy was to medicine many moons ago. Ultimately, i dont know what conclusions we can draw from the market but im not sure the bank of japan is done with negative Interest Rates and maybe therein lice the problems. Meanwhile, apple is not helping things. The sell off after the remarks we told you about from eye carnoustie made it the worst performer on the dow. Will this continue to be a head wind . I was talking to a client and we were talking about what sectors are out there that investors are looking at. Our conversation was how the Health Care Sector has been underowned. With the m a activity, investors are going to pull out of that sector. You might see that transition there. Heather, you feel like the financials are undervalued but a lot of people are rushing to energy right now. Where do you see the best opportunity here . Youre right, jonathan mentioned health care. I think if the Health Care Sector is under valued, then you have to look at the financials. Theyre taking some time to adjust to all of the new regulations and restrictions imposed on them. Dodd frank, the department of labor, but if were in a low Interest Rate environment and were perhaps getting a rate hike in june given the bank of japan didnt do anything last night, the financials if we can hold up globally and have strong markets, near alltime highs still, then i wouldnt be surprised to see the financials fare well also. And i agree with heather on that point too. Coming into earnings season, i think the Financial Sector was the one everyone wasnt going to Pay Attention to and already had the fre conceived notion that was going to perform poorly. The surprises we got in the Financial Sector is clearly going to bring more light there. And i just would like to say everybody is always bashing wall street. You couple the banks and financials in with wall street, but its important to note that someone takes a stand and all the positive benefits banks provide. If you need a loan, its take your kids to work day. If you need a loan for your kids college education, you look to a bank. If you need a loan for a ford f150, you go to a boorank and y dont work for free. You need to charge a fee, a small fee, for interest. A lot of the people with their conclusions about the boj today and Peter Boockvar was among them, everybody says go gold right now and gold is up again today. Very quickly, whats your thought on that . I think gold is the truest form of money in a time where Interest Rates are even on the table. I would think that, you know, read gildaers book on gold. And if Interest Rates get more pa pervasive, i think gold skyrockets. Thank you, folks. Appreciate it. Look at this, the market keeps sinking. The dow is down 180 points. Its been a sharp selloff really in just the last hour. We mentioned apple didnt help things, but pressure across the board at the s p broadly down 15 and the nasdaq down 41. Coincidence or not, this is the busiest day of the earns season with a lot of Companies Reporting including dunkin brands. Their companys ceo will be with us. Plus we have aetnas ceo with uss to give us his take on obamacare and drug pricing. Another flood of earnings is due out after the bell. Amazon, linkedin, gilead, and amgen are on deck. Well bring you those numbers as soon as they hit the tape and well break them down with our analyst. Youre watching cnbc, first in business worldwide. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of the at t network, a network that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. We built our factories here because of a huge natural resource. Not the land. The water. 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We heard from carl icahn how he was getting out of those shares. They were under pressure already this week. The fact hes exited just is adding to the selling momentum which were also seeing across the other big tech names in the index today. Dunkin brands this morning reporting better than expected revenues making a strong case for its new drinks and breakfast sandwiches. The grande burrito, we have two here, that is the sausage burrito. Its what one analyst called one of the most successful promotions in dunkins recent history, but the results not enough to give the stock a boost. Joining us, we welcome back nigel travis, the chairman and ceo of dunkin brands. Mr. Chairman and ceo, welcome back. Good to be back. The question for me, i want to jump to the second question, is why are you ending this burrito . Its supposeding to off the menu by the end of the month. Its been so successful, why not just keep it going . Well, the news, bill, is that we have another great lto next week. We tend to have a Promotional Period of one month and then we give it a month to sell down. This promotion has done exactly what we planned. When you have a limited time offer, you always balance things with demand. You dont want to be left with all the product and occasionally and i think you struggle to find that today from what i hear, yeah, i actually heard kelly was out looking for it. We had people scouring bergen county, new jersey. We found one but i heard you couldnt even find one. Theyre in your area. I think thats true. So thats good news. But, you know, we want to have new news all the time. We have such frequency from our customers, they like new news, and we found that having a strong month of promotion and then a wind down month is the perfect formula, so it will be back, i can assure you of that. And kelly, well send you one specially. Thank you. Its clear that mcdonalds allday breakfast has been a huge driver of their sales, nigel. This is a breakfast item also available all day. You know, other chains when theyve tried things i think like burger kings chicken fries, if it does work, they add it to the menu permanently. Again, how important is it for you to be driving competition in this sat gour as people are looking for breakfast type items all day. Clearly breakfast is the battleground and we think we battle it out very well. You only have to go around the stores here in boston early in the morning and see how many people are in the drivethrough. So we do extremely well in the morning, and one of the great things with the quarter is we did very well on coffee. We had the macchiato, caramel macchiato that did very well. Weve done well with the drinks that appeal to a younger demographic and had very good attachment. So it is tough out there. The Convenience Stores are joining in with it. The Burger Stores are in a value war. We have a great focus on franchise economics, and were balancing that out nicely, but i can assure you were aggressive in our own way, and were going to keep building and being more aggressive all day and bringing back products like the burrito. Let me point out as youre watching the charts, the dow is down 200 points. The s p down 17. Nigel, before we let you go, these Loyalty Programs, the loyalty app, the payment apps, i mean, you talk about how breakfast is a driver for sales. How important is it to keep your customers sticky . I mean, starbucks reintroduced its Loyalty Program and has gotten knocked for the way its come out. How important is it for you at dunkin brants . . Its very important. We think we have the best Loyalty Program out there, its called dunkin perks. It costs you about 40 bucks to get a free beverage any size and on the Starbucks Program its about 50 more, about 60 bucks. So a lot of people are coming to us looking for value. The Loyalty Program is also very important because next week we take or on the go ordering to new york city. Weve got 1,600 stores there, the number one retailer in new york, and you have to be a perks member to be able to do on the go ordering. So its a very important program, and we think were one of the leaders in the field. All right. I suspect its not the last weve seen of these burritos, but nigel, thank you for joining us. Nigel travis i still pine for the days dairy queen used to have a blizzard of the month. The girl scout thin mint cookie blizzard. If they could just bring those back. Free association, i love how the burrito took her to the blizzards. These onetime offers can drive traffic. Absolutely. Got to keep them on the menu though at some point. We are keeping an eye on the market with 35 minutes left in the trading session. Continues to move lower. Last i heard 2075, 76 was a support level on the s p. Were right there, down 18 points. The dow down more than 200. Coming up, aetnas ceo mark bertly ni speaks with us about the insurance giants results and the effect obamacare is having on profits. Stay tuned. Its been smashed and driven. Its perceptive enough to detect other vehicles on the road. Its been shaken and pummeled. Its innovative enough to brake by itself, park itself and help you steer. Its been in the rain. And dragged through the mud. The 2016 gle. Its where brains meet brawn. Lease the gle350 for 599 a month at your local mercedesbenz dealer. Support level on the s p. Welcome back. The selloff deepening here on wall street. The dow down more than 200 points now, about 215. Its a 1 plus decline and we havent seen one of those in some time. Remember, weve had an extremely sharp rally off the feb 11 lows, but lately a series of contributions to that. Weve had earnings misses, apple under pressure from carl icahn again today. The bank of japan not delivering the stimulus many people globally were looking for. We had a weak setup to this market. We started to come back. We were positive on the session earlier today but now were just selling off. Ten rows of stocks that make up the s p 500, not even two rows are positive. More than 80 of the stocks are trading lower. We have a news alert on that strike at verizon. Dom chu has details. Now in its 16th day for that verizon strike with the workers represented by the Communications Workers of america and the International Brotherhood of electrical workers. Verizon has said in a press release that they have now made what they call their last, best, and final offer to these employees that have walked out. The company said it will make concessions with regard to wages, layoff protection, retirement, and health care cost. The headline is a wage increase of 7. 5 over the term of this latest contract offer. The company is also offering continued access to High Quality Health Care and affordable costs and generous Retirement Benefits in its words. They say, quote, the ball is in the unions court to do what is right for the employees. Verizon has made this offer. We have no at least statement yet from both of these unions who represent the striking workers but well see when they come up with a statement, well be sure to bring the details to you. For right now verizon has made what they call, again, their la last, best, and final offer in an attempt to end the strike. And this morning on the radio here in the new york area, i heard a commercial that verizon put out there where they talked about their side of the story. So it appear that is the strike has been having an impact on the company and theyre trying to make something out of that. And well be sure to bring you both sides of that story as soon as we get some kind of statement from the unions. Well be sure to bring that to you guys as well. Thank you, dom. 30 minutes to go in the session. The dow is down 220 points. Lets get to a cnbc news update is sue herera. Hi, kelly and bill. Here is whats happening at this hour. Here is your cnbc news update. A u. S. State Department Spokesperson saying Coalition Forces were not involved in the syrian Pediatric Hospital attack. The u. S. Believes the air strike was conducted solely by the syrian regime. The attack killed at least 27 people last night. It is still under investigation. Vice President Joe Biden meeting iraqs Prime Minister today in baghdad. Biden delivering an inperson plea for an end to the countrys political crisis which the u. S. Fears is a distraction from the fight against isis. Well, remember this one . It was a storm for the record books. The blizzard which socked the big apple in late january is now the biggest in the citys history. The National Oceanic and Atmospheric Administration today restating its central park snow amounts, increasing them to 27. 5 inches from 26. 8. And as you have been hearing, the gloves are off. President ial hopeful ted cruz accusing former House Speaker john boehner of letting his, quote, inner trump come out. Boehner had called cruz lucifer in the flesh yesterday at a Stanford University event. Its the story that just keeps on giving from a journalistic standpoint. Its just amazing. I just love now that they can tell us that the blizzard was, in fact, a record after all. Id already forgotten about it. Its like economics. We dont know that the recession ended until months after it actually happened. Exactly. The snow measurements are more precise. Thank you, sue. See you later. This is an orderly were down 214 points. We were down 220 a moment ago but it is a rather orderly selloff. Its not happening all at once. Were just kind of rolling south here. The dow down 1. 2 and it is the biggest decliner percentagewise. We have a leading trader coming up to tell us what hes watching into the close today. Also ahead, after the bell amazon and linkedin will lead the storm of todays earnings. Well look at what the street is looking for and analyze the results as soon as they hit the tape. Stay with us. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click, then simply select the best candidates from one easytoreview list. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 we no longer have a position in apple. To start, i think tim cook did a great job. I have a great relation with him. I called him this morning to tell him that, and he was a little sorry, obviously, but i told him i think its a great company. That was carl icahn on power lunch just about an hour ago. Apple dropping after he made that announcement that hes out of the shares. Its down more than 3 and that move is dragging on the dow which is now down about 209 points, bill. All right. Thanks, kelly. Im here with allen valdez from silver bird capital on the floor of the new york stock exchange. And art cashin just walked by and said he thinks that selloff is in part what he called the icahn flush. When icahn was making comments about not just apple but the whole stock market that maybe thats what precipitated some of the selling. You did see it capitulate it more. We were down 80 points when he was talking and now down over 200. 75 is what traders are keeping an eye on. After that the shorts come in. You have been skeptical of the rise. Is this the selloff youre looking for . Were looking for 2075. Youre not ready to get back in yet. Not yet. We want to hit that 2075 point. Oil acting much better today. Up nicely. Not enough to move the market because of the icahn flush. What about earn sntion. We knew they were going to be dismal. Sales are down 13 . Iphone sales down 10 million from a year ago. Overall the whole picture you saw the gdp this morning. Dismal up half a percent. It was horrible. And every sector in the economy except housing was weaker. So the data have lived down to the expectations. For once it has. Well see what happens. Thanks very much. Thanks, bill. Thank you, guys. We should mention the other names weighing on the dow now include microsoft and cisco. So really the tech names taking the brunt of this selloff again today. Apple the hardest hit on the dow which is broadly down 1. 2 . The s p 500 is down 20 points or nearly 1 , and the nasdaq is down a little bit more than 1 giving up 54 points. A pretty broad based selloff. The head of aetna speaks with us exclusively next. Well discuss whether his Company Plans to follow United Health cares lead on most obamacare exchanges. Also, well set you up for Earnings Reports and well break those done as soon as they hit the street the top of next hour. Stay tuned. The small stuff. But when youre building a mercedesbenz, there really is no small stuff. Every decision. Every component. 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Facebook beat their expectations big time last night. That stock is up 7. 5 today, and look at some of the others. Yandex, weibo and angies list all with smart gains even as the rest of the market goes south. Shares of aetna also higher as the Company Reported quarterly ruesult that beat expectations. The company said it remains on track to close its deal with humana. Joining us, we welcome back the chairman and ceo mark bertolini. Hi, bill, hi, kelly. First broad question, how was the quarter for you then well get more specific for you. Very solid quarter, strong earnings, membership was where we expected it to be. We had strong growth in the public exchanges, and we raised guidance for the year. So i think it was all in all a very solid quarter. You know, thinking about the obamacare exchanges, thats just the broad public headline. What does it mean with guys like united exiting. What is the future of this business and your participation in it . Everybody has their own economics, and id like to sort of talk about this from the standpoint of capital deployment. If we were to go open 15 new markets, it would cost us between 40 million and 50 million a market or 600 to 750 million to get into this business. If we were to go acquire a company that had 1. 2 million members in it, it would cost us more than 1. 5 billion to do that acquisition. Weve lost mere fractions of that in the first two years, less than a couple hundred million dollars. So i think when i look at the capital deployment, its still a good bet. One of our reporters listening in on our Conference Call today heard you say that you would want to see some structural changes in obamacare before you would be willing to further deploy in this market. What are those changes you want to see . Well, we need a broader population to join, so we need younger people to join. We need more of the uninsured to join. We need a different set of products, more rating flexibility, a broader range ever rates for people to buy from, and more markets that we have strong lower cost control in so that we can offer those products on an affordable basis. Have you expressed this to the administration . Are they listening . Is there still tweaking going on enough to suit you . Well, i think for now all that hhs and the secretary can do to work with regulation, and shes doing as much as she can there. Shes been a great partner in this. I think the kind of changes were looking for, quite frankly, are legislative changes and those arent going to happen under the current administration. I want to ask the perspective from your seat on drug pricing. The issue, the specifics with valeant and some other companies but broadly how this is affecting your company. This is a part of the Senate Hearing on the topic last night. Valeant was too aggressive and i as its leader was also too aggressive. In increasing the prices in some of our drugs in our large portfolio. Can you find me one drug valeant didnt raise the price on. I dont have the price mr. Pearson, one drug. That you didnt raise the price on after you aqu50icquired it. Not in the United States. Well, that, again, is the issue. You know, the question is pertinent to their business model, but again how is this rippling through the industry . How much of an issue is it for you guys . Well, i think the Insurance Industry six years ago was brought through the crucible of change as a result of our prices as they faced the marketplace and the fact that a lot of people couldnt afford it. That resulted in plan designs where people had to pay out of pocket in order to reduce the prices. Those plan designs have people paying for their drugs, and thousand theyre seeing the very tight connection between the cost of drugs and the cost of premiums, and this has been a problem weve been dealing with for a long time and now its coming to the light of day. Yeah. Let me go back to obamacare. You said something intriguing to me and this is going to sound like a loaded question and maybe it is, but thats not how its intended. You said this administration is not likely to make the kind of changes you would want. So were going to have a new president next year. Do you want it to be a democrat or a republican presuming that the republicans are going to want to make major changes to obama care if not try to repeal the whole thing. Well, i wont comment on what party but what we need is a president that will work with the congress and a congress that will work with president. And both candidates will have to make promises about changing to obamacare. Well, i tried. All right. We got to go at this point, mark. Always good to see you. Thank you for joining us. Good to see you both. Mark bertolini, chairman and ceo of aetna. We heard this morning now that we have the deal making cross space, more maybe on the medical device side, but as jim was saying, if we can get health care, a sector that is performing well again, thats a big deal for these markets, but right now theres a lot of uncertainty and were not finding a lot of areas are support today. The dow is down nearly 200 points. The s p is down 17. The nasdaq with 15 minutes left in the session is down almost 50. And that 2075ish level is what traders are watching right now on the s p. Were going to preview amazon and linkedin earnings. Theyre expected after the bell tonight. Plus, wall street veteran david darst will be here with a bit of Investment Advice for the month of may. Coming up. Im in vests and as a vested investor in vests, i invest with e trade, where investors can investigate and invest in vests. Or not in vests. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. About ten minutes left in the trading session here with the dow down 217 points. Art cashin telling me just a moment ago that the market on closed orders show an imbalance of 200 million to the buy side. But he was pointing out to us that about 30, 45 minutes ago it was showing huge to the sell side and it started to pare off. It will be interesting to see what happens. We have big earnings after the bell. Amazon and linkedin are leading the way. Josh lipton has an eye on amazon. Julia boorstin on linkedin. Josh, start with amazon. We know its been a generally disappointing tech earnings season, so can amazon buck the trend here . The street looking for eps of 58 cents on sales of 27. 98 billion. Also, mizuho is looking for an adjusted operating margin of 3. 8 . Thats important because it speaks to the real profitable of this business and how much bezos has to spend on other projects. Finally, a lot of attention on aws, its Cloud Computing unit. Revenues are expected to jump f of to 2. 5 bl 2. 5 billion. Julia, what about linkedin in . Big volatility the last time they reported. Certainly. Well, this time around investors are hoping that linkedin will raise its Earnings Guidance after last quarters disappointing outlook for the year sent shares plum netting 44 in one day erasing three years of stock market gains. This quarter the Business Network is projected to grow revenue 38 to 828 million and to grow earnings per share 5 to 60 cents. Well be back with the numbers and after facebooks big beat and twitters big miss, linkedin results are sure to send the stock swinging one direction or the other. Last time it last almost half its market value. Yes, it was big. 44 . Well get to those numbers after the bell ringing. After that david darst, independent investment consultant, joins us on a day after the bank of japan did nothing. Our gdp came out, half a percent, and earnings have been really mixed maybe to the downside here. I think this is a phenomenal reaction because its a very rational reaction. Its like the child brought home a report card to the parents with a couple of cs and ds, and the bank of japan could really not do anything, bill and kelly. Youve got this may 2627th g7 summit in japan. They cant go depreciating the currency in advance of that. The market should have known that. Plus, the consensus was only from 19 out of 41 expected them to do something. So the child brought home a poor report card on the gdp, on earnings, on the largest market cap u. S. Stock has disappointed, and im very thrilled the market has acted rationally. You want to Pay Attention right now to may. Were about to enter may. May is Monetary Policy and currencies. If they can be stabilized, good. Secondly is asia, and thats china. The news flow has been pretty good recently. And weve talked about the baltic dry shipping index. That thing is up 67 this month alone. 50 for the year. Its climbed back out of negative territory. And, finally is the year, the y in may is the yearly profit growth. Were coming up to some very bad comparisons last year. So the child thats bringing the report card home is going to have a good report card, expected to be up 16 this year, 15 next year. So its like, i hate to say this, one of my relatives brought home a record card from harvard once. My wife said that looks very good. You got an a, but then she looked carefully. It was the second time he had taken the course. Second time is a charm. Yes. Some of us didnt do so well in accounting the first time around, all right . Thank you, david. Thank you, guys. Good to see you. Thank you. Happy early may. With the dow down 235 points were coming back with the closing count dodowcountdown. Next, a venture capitalist weighs in on the tough earnings picture from the space. Youre watching cnbc, first in business worldwide. You pay your Car Insurance premium like clockwork. Month after month. Year after year. Then one night, you hydroplane into a ditch. Yeah. Surprise. Your Insurance Company tells you to pay up again. Why pay for insurance if you have to pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. Theres no limit to how much you can earn and this savings applies to every vehicle on your policy. Call to learn more. Switch to Liberty Mutual and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Ahhh. Just inside three minutes to the closing bell. Time for the countdown. Bob pisani joining me here. I want so show you the s p now. Not the dow. This, of course, weve established is what the traders all watch, and some critical support levels have been taken out today. As one trader pointed out to me, once we got below 2087, thats when the selling started to intensify. Now theres a little disagreement what the support level is. Some have been telling me 2075 and then Somebody Just came by and said hes watching 2071 very carefully. So who knows, but were on those levels right now. You have to draw a giant marker line right there, bob, to watch this very carefully. Two stocks that we very much watched today, apple continued lower after the disappointing earnings and especially after carl icahn revealed to our scott wapner on the air today that he is out of apple now. He sold his position there. That stock is down 3plus percent. Facebook went the other direction, finally turning the tide of a string of disappointing Earnings Report from technology companies, especially in social media, that stock up 7 . Now we get more earnings tonight. That includes the likes of an amazon, weve got linkedin in coming out, gilead sciences, and amgen. So what happened . Lets put up the s p again. Things started falling apart after 2 00. Carl eye koorn wicahn was on th talking about apple and the markets in general. He wasnt terribly excited about the markets. No, he was not. That may have played a part in the decline we saw in the middle of the day. There wasnt a lot else out. I dont know if we can put up the nikkei futures. Overnight the japan session looked rather poor, down more than 3 . Nikkei futures, this is actively traded here at the in the United States here, down about 7 . So theyre anticipating this is obviously trying to guess what might be happening overnight. Theyre also anticipating further weakness over in japan. So i think weve got some knockon effects a little bit from japan but we were fine until just a little after 2 00 and i have to think maybe mr. Icahn had a little bit of influence here. Transports though are weak right across the board, general weakness in the last hour. Even as oil continued a little higher. Thanks, bob. See you later. So we are going out just off the lows of the session. The dow down 221 points. The s p right now at 2075. Well see if that can assuage some of the traders who have been worried about that. Stay tuned for all the earnings coming your way with the second hour of the closing bell with kelly evans and company. Ill see you tomorrow, kelly. Thank you, bill. And welcome to the closing bell, everybody. Im kelly evans and we have more big earns on tap but a big down day in these markets. The dow down 204 points on the bell, 208 actually. Well watch how things settle out. Its a better than 1 drop. And the worst performer is apple. Carl icahn saying hes exited the position. Apple, microsoft, cisco, the worst performers on the industrial average. The s p 500 closing down 19 points at 2076. The nasdaq the weak link down 57. 4805 is the level there. As mentioned, get ready for another barrage of after hours earnings, especially amazon. Josh lipton will be watching that one for us. Julia boorstin is lood for linkedin, meg terrell with reports from gilead and amgen, dom chu covering expedia. Joining todays panel we have stephanie link from tiaa Global Asset Management along with our own jon fortt. And for more, christine short and fast money trader tim seymour. It is a full house, stephanie, but the market kind of a house of cards today. What happened . Well, it really was a house of cards today. It started off weak in the morning. We woke up and saw the futures down because of japan. It was encouraging we rallied from that. A lot of that was because the dollar stayed very weak and that reflation trade continued to work and then you have m a, a lot of m a. Not only was that positive for health care and oracle made a deal and comcast made a deal but also positive for the banks. Activity starting to pick up. You had a lot of Different Things and that was the recipe for the higher market to start. Then, of course, you had all day long the big bellwether Technology Stocks really be very weak. Other than facebook you had google, apple, microsoft. These are big holdings for Portfolio Managers and they have really been very, very weak. They havent been able to catch a bid and i think that has put underlying pressure on the markets. We already know twitter had been weak. Facebook comes out, its just dominating, and what does that say . Its almost a traditional narrative, almost not a tech one the way theyre growing advertising. I hear what youre saying and im looking at the amazon numbers, josh lipton will bring them to us, but it looks like a big beat for amazon and it doesnt just have to do with the cloud, so i will let the proflti professional take that over. Josh lipton, take it away. Yeah. Beat is right, jon. Lets get you the numbers. Amazon reporting 1. 07. The street was looking for 58 cents. 21. 1 billion. Analyst forecast 27. 98 billion. Operating income 1. 1 billion. Guidance, sales of 28 to 30. 5 billion. Operating income guidance 375 million to 975 million. Quickly looking through the segments, it looks like north america sales, about 17 billion. International sales about 9. 6 billion. Aws, its Cloud Computing unit, net sales clock in at 2. 6 billion with operating income it looks like there looking through 604 million it looks like. Kelly, im going to keep looking through the notes, bring you more headlines as they come. Thank you. Again, those shares trading up 11 on the news. Christine, what do you think . I almost thought that number was a typo when i saw it come across the screen. This is not a name we see beat all that frequently. One, they always have investments they dont really guide well on and they end up missing on the bottom line. Theyve only surpassed our estimates on both the top and bottom line about 40 of reporting quarters. I like to look at Free Cash Flow with this name just because that one is a little less easily manipulated. I know their trailing 12 homont was 4. 7 billion. They said it was 3. 5 if you ex out lease principal payments. From all of what we heard, the numbers look pretty good. Well want to hear how prime has been doing. It sounds like sales in north america has been strong and aws owns about 30 of the cloud market right now. Would like to hear more about how they may be impeding. Amazon is always famous for its releases, whether its for quarterly or after the holiday season. Its highlights are record this, top of here is a couple more for you. The fire tv stick, 39. First product on the site from any manufacturer ever to pass 100,000 customer reviews. Many five star reviews, et cetera. And theres much, much, much, much more here theyre extolling in terms of what drove the quarter. Those are the soft metrics but what had my jaw hit the floor was the numbers outside of cloud. Everybody pointed to the cloud, thats the future, and that came in a little bit better. Street was looking for 2. 5 billion. It came in a hair above that. The operating income showed up about where expected, maybe a little stronger, so the margins in line, but its the other part of the business. Youre in a market where pcs arent doing well, smartphones arent doing well. How does amazon manage to outperform in electronics and general merchandise . Thats exactly what they did, and their guidance on operating income, which is an area where they tend to give huge ranges, sometimes in the negative, they guided 375 million to 975 million. The street wanted around 861 million. The low end of the revenue guidance is around where the street wanted them to be at 28. 3 billion. Theyre guiding 28. 3 billion they said they can always ratchet up the earns. The interesting question is have they pushed off the investment cycle for does it account for s it . Remember, it probably bottomed in the Third Quarter of 2014. You will see this company continue to invest not only into the cloud but obviously in the content. We know theyre spending money on developing the entire media space to support obviously the core business. So, look, hard to say anything different. Its very interesting, day after day or the last couple days facebook is in the same place. These guys are so far ahead in terms of critical mass, in terms of the investments they have made though, they clearly show theyre paying off. Investors d sudden suddenly t company gets a pass in higher cap ex and op ex because they showed you when they want to turn on margins they can, but actually investments and logistics and procurement are very, very Good Investments and theyre paying off for the company now. Exactly. The shares up better than 10 on this release. Well have more in a moment. Lets get to earnings from two big biotech companies. Gilead and amgen results are out. Meg terrell has them. Lets start with gilead and its not good news for the First Quarter. A miss both on earnings and revenue and on their big hepatitis c number. Eps coming in at 3. 03 a share versus estimates of 3. 15. Revenue coming in at 7. 79 billion versus analyst estimates of 8. 12 billion. And, of course, that combined worldwide hepatitis c drug revenue number coming in at 4. 29 billion for the First Quarter versus analysts estimates of 4. 6 billion. Gilead reiterating 2016 guidance. The stock down almost 4. 5 on that miss in the First Quarter. Switching over to amamgen, its different story. A beat and a raise. Eps at 2. 90 a share versus estimates of 2. 60. Revenue at 5. 53 billion versus 5. 32 billion estimate. The company also raising its 2016 guidance to revenue of 22. 2 billion to 22. 6 billion and adjusted earnings per share of 10. 85 to 11. 20. So you can see amgen trading up there. Quite a different story for gal yad. That call starts at 4 30 and we will bring you any headlines. Meg, thank you. Our meg terrell. Linkedin shares are surging. We have an earnings alert from julia. Linkedin earnings and revenue both beating expectations. The company reporting adjusted aerntion per share of 74 cents versus expectations of 60 cents. Revenue also higher at 861 million. Analysts had been expected 828 million in revenue, but i think the real reason that the stock is surging right now, kelly, is because the companys earnings outlook forq2 and the full year is much better than expected. Revenue guidance for q2 pretty much in line but its that earnings outlook for the coming quarter as well as the rest of the year coming in better than expected. Of course, this is in harsh contrast to last quarter when a lober outlook for linkedin sent this stock down 44 in one day. A far rosier outlook. Jeff weiner saying they have seen significant improvements in the ability to increase roi across the businesses. All right, julia. Thank you so much. The linkedin shares up nearly 15 , buzz their 52week high was up at 2. 62, so still about 50 down from those levels. Expedia out with its results. Dominic chu has that one for us. Here is what we got. A stock thats up 10 right now on 180,000 shares worth of after house volume. Expedia stock moving to the upside sharply after earnings come in at 9 cents a share on an adjusted basis. That handily beats the average estimate of a loss for 6 cents per share. Revenues coming in better, 1. 9 billion. The average expectation was 1. 84 billion. Theyre also saying they added more than 13,000 properties to their global lodging portfolio. Their total property count is over 282,000 available on expedia and its related websites. They said room nights growth was better than expected. Room nights stay increased 37 yearoveryear. Domestic and international grew 32 and 34 on a year over year basis respectively. As we talk about a stock thats up about 10 on nearly 200,000 shares of volume, this stock was already set up perhaps for a bit of a pop. It was down 14 yeartodate entering this number. Back over to you guys. Dom, thank you so much. Rich peterson joins the 300 billion Market Cap Club in after hours trading. Lets take a check on those shares. Bill miller, weve mentioned this, bute told us he thinks it could be a uble and were already talking about a richly valued name, one that few people in the market really can wrap their heads around, but it does continue to keep growing and now maybe answering to some of those critics, especially with these results. Yes, and i think we have to recalibrate yet again the tech gro growth story in light of amazon and linkedin. With linkedin you have to wonder if they were sandbagging a little bit with what happened last quarter. They were around 190 per share last quarter and it tanked down to 108. Got down to 100. Now its trading around 140. Its been on a huge ride, and the results here that they turned in across all divisions pretty strong. Talent solutions, their main group, expected to come in at 540 million, came in at 558 million. You know, ebitda is at 222, expected to be at 190. Overall their raising their fullyear guidance. Higher for the next quarter. It feels like they were being cautious but overall they knew that they were going to continue to grow. Amazon, too, strong. This was an era built for social and mobile taking off. The smartphone might have taken off but those who built on the smartphone are what sort of platform is this for the market tomorrow. We came into the session and we had facebook. Now you have expedia popping, linkedin up, amazon up. Its encouraging and maybe some of the Growth Stocks catch a bid because they have been underperforming yeartodate. In terms of like amazon, great, great numbers and i will be interested to see if microsoft can rally on the cloud theme back into the fold, but amazon was down quite a bit this year. It started the year at 690. Got to under 500 and so its a nice rally and its a great report but its not even a round trip yet. Right. Lets see what the company has to say. Curb the enthusiasm. A little bit. I dont want to be a Debbie Downer but i feel like lets hear what they have to say. Id agree with jon. Clearly linkedin was very conservatived coming into the quarter. We saw estimates drop around 4 since they gave that abysmal guidance but you have to remember it often gets looped in with all of these other social Media Companies but it really doesnt act the same way as facebook or twitter does. Its this hybrid of both customer facing and enterprise and they have a different revenue model. What id be interested to hear is i dont know what their active members were for the quarter but theyve been stagnant at 100 million for the last few quarters although engagement has gone up. Thats the one number that really hasnt moved too much. Another thing that ive sort of been worried about and wasnt sure how the stock is going to react or how the company is going to go forward is if facebook at work comes out. They have 1. 6 billion members already versus the 100 million active members on linkedin. So it will be interesting to see but this is actually ten cents higher than we were expecting, so clearly they were sandbagging. Here is a couple of numbers from jeff weiners prepared remarks in the statement for what its worth. Looks like linkedin, were talking about 106 million members, unique visiting members in a month. Up 9 . That was an average number. 433 million the cumulative number for the quarter. He said page views per unique visitor member hitting an alltime high. So a little content. An increase in activity and engagement, so, yeah, thats much better. I think whats important with linkedin is theyre heavily investing this year so that was depressing margins and they started this investment period a year ago. Were now starting to see a little bit of the benefits of that. Puck get through this year in terms of investment spend and still see growth at the same time, the operating leverage is pretty substantial. Tim seymour, what were you going to say . I think both in linkedin and amazon, you cant tell me these stocks arent priced for perfection though. Even on the pull back for linkedin, its still one of the most expensive stocks relative to the social engagement they have. Okay, maybe you cant put them in the same class in terms of their social core business model, but, again, the User Engagement for them is a fraction of what you get for facebook. So amazon at 120 times next years earnings, fantastic, great numbers, blew it out. But, i mean, if qulyoure chasi the stock at 700 bucks at the high end, youve basically decided im going to buy a lot of future growth. I know they inherently have operating leverage and ability to grow margins but to tell me i have to buy the stock after this number in this marketplace, im not sure i want to. And where does that leave you, i wonder, tim . Because youve got to be realistic now about apple based on what were seeing. Their growth has gone away on the iphone. Tim cook says it will be back but you can decide whether you believe him or not on that. Google still growing strong but not at the level of expectations, and then you have outperformance from at least this one name, linkedin that got tossed in the bin by a few people last quarter and by amazon in a surprising fashion probably riding on the way theyve optimized for the smartphone in ways few have. Do you sort of wait for a further pullback beyond the pessimism that we saw coming into this quarter or do you just go into a different sector altogether. My market hat and my allocators hat says i think this is a Challenging Market right here and now. Some of the dynamics we started at the top of the show, between the boj, lets not forget the fed yesterday. I think it was a more hawkish statement. As we head into june and may, i think markets look very dicey here. When i talk about linkedin, the reason the stock popped is because it was sold off for a reason. Its an expensive company. Only 9 growth. Thats not giving me what i need. Apple, google, to me ultimately i think those get back to stories that get into the value story. Weve had this conversation on fast money. Are some of these monies getting to be more commoditized players. Should you be buying them for the dividend yield . I dont think you should have to rush in to do anything. I would be looking to buy a company with a good valuation with a strong Balance Sheet whose business i can see through the next couple years. That may not be any of the people we saw. Pandora shares also look like theyre higher on their earnings release. Lets get back to meg for more on gilead. Another piece of news. The company is increasing its dividend by 9. 3 to 47 cents a share. They Just Announced their first dividend last year. It was 43 cents a share. Now theyre increasing it. They said in the First Quarter, they had 23. 1 billion in cash as of the end of the First Quarter. Folks are wondering how theyre going to deploy it. By increasing the dividend but people are hoping to hear more about potential m a. Meg, thank you. Pretty nice dividend hike but not too much for the shares. Gilead has been dead money for 18 months. This has been a valuation thats actually pretty interesting but the acv price something a big deal. The competitive threat in that space ex u. S. I dont know what turned around gilead when that sector has a lot of pressure on it and they havent been able to outperform even when the sun was shining. I think what turns it around is a big m a, not a tuck in. They have over 10 billion in cash to do an m a transaction, a transactional one. And with valuations where they are, they should be out there aggressively looking and im sure they are but nobody wants a dividend increase. They want to see how theyre going to expand the pipeline beyond hepatitis and hca. Theres a lot of things here at the company, while its cheap, theyve got to prove that they can grow beyond where they are right now. Thats certainly going to be one to watch. We mentioned pandora. Lets look at those shares. Julia boorstin has the results. He wipandora shares 5 , 6 h. The company reporting revenues of 297 million. Thats 11 million higher than expected, and the companys loss of 20 cents per share, thats less than the 31 cent per share loss that was expected. But the real factor driving the shares 6 higher is the fact that the Company Raised full year 2016 revenue and Earnings Guidance. So some positive movement there for pandoras outlook. The companys listener hours grew just 4 and active listeners pretty much flat at 79. 4 million but the outlook for making money from those listeners is looking better. Back over to you, kelly. Thank you, julia. Its a competitive space. Weve talked a lot about the challenges that pandora has had and well see how Tim Westergren handles it Going Forward. I was going to say its interesting they switched ceos in a quarter where they actually sort of outperformed and if you believe in pandora at this point, not the product, which i think is great. I use it almost every day, but the stock. You have to believe theyre going to be successful at integrating artio. They want to move not just in the radio thing but also in subscriptions, more offline listening. So at some point we will see a completely revamped product from them that gives listeners even more ways to pay for music. Mare they are stock at around that 79 million number but if they can get more money from those people and perhaps that will work too. Christine . This guidance is in contrast to what we saw at the end of last quarter. They said they were going to lose about 60 billion, 80 billion on the bottom line. So theyre trying to take on a whole lot at once. Although sequentially the active listeners did tick down, this is a very loyal listener. There are still a lot of people who prefer their radio option versus say spotify and theyre still not far behind spotify. I think spotify has 100 million active listeners every month. Its an aggressive plan Going Forward but they think they can have 30 million subscribers in the next year or two. Id like to see how they cobble these acquisitions together. If nothing else we have some positive movers after hours breaking the recent streak. Pandora, expedia, amazon, linkedin all moving to the upside. Thank you for joining us here to help sift through everything and theres more coming up with tim seymour and the fast money crew next hour. The man who called the rally in gold and crude will lay out his next prediction for stocks. The global head of deremember ti derivatives will join the stray traders. Most investors believe inflation will stay low for years. And alerts you. 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So you can get back to whatever it is you civilians do when youre not thinking about Car Insurance. Compare. Com welcome back. Amazon earnings out moments ago. The company beating estimates on both the top and bottom lines. Shares up more than 11 . Lets get more. I dont know where to begin here. Aaron, why dont you tell us. Whats most important about this beat and is it also the kind of beat that still points to a Company Investing enough to continue to put out this kind of performance . The key thing was operation. That was the concern after q4. This quarter they exceeded their operating income high end in our estimate by 400 million. So i think that should aleve some of the concerns we had last time. Additionally Revenue Growth very strong across the board, exceeding the high end of the range, and thats been more in the midend. So strong growth as well as better margins which is the key after hours. Walter . Well, im also encouraged by the performance of aws. It came in above expectations and profitability continued to be good in a period when people were very concerned about pricing competition from google and google had their google event during the First Quarter. So its good to see aws continuing to do really well. I wonder again, is that a story of them kind of maintaining or growing market share or is the cloud itself regardless of what happened with microsoft last week just growing at a healthier clip than we thought . I think the cloud is growing at a healthier clip than people thought. Microsoft grew over 100 , and now youve got over 60 at amazon. So i think corporations are moving to the cloud at a rapid rate. Aaron, i was particularly surprised to see the International Sales up above 9. 5 billion. A lot of people were looking to closer to 9 billion. This is in the face of still dollar relatively strong. What does that say . Just that segment. Apart from the cloud which, of course, is impressive. Came in a little better than people had expected. But the fact that amazon is able to outperform in international at a time like this, whats the take away. Go ahead, aaron. International has been one of the weaker spots over the last couple years in terms of the growth relative to the u. S. Its much smaller than the u. S. Its nice to see international kind of resurging in the growth rate. I think its partly europe but also some of the newer markets whether its china, india, some of the emerging markets could be big for amazon longer term. Well have to listen to the call which regions drove the growth but nice to see that acceleration. Amazon has traded a million and a half shares since the close. Thats absolutely incredible. I have a question about prime. That clearly is one of the key drivers to the quarter and to the story overall. I mean, do you think this continues to be the key piece of the story in addition to the aws piece . Aaron . Yes, i would say in terms of prime we think it continues to be a longterm driver. Once yusers are on prime they by four time as much products. Based on our surveys, 35 to 40 of u. S. Households have prime today. Guys, thank you. Incredible stuff after hours. Aaron kessler, walter price. Amazon not the only big name reporting results. Up next a check on other stocks making earnings related moves. Plus what are facebook and amazon doing right to set them apart from the rest of the f. A. N. G. Stocks. Well hear from a top venture capitalist coming up on the closing bell. Welcome back. Time now for a cnbc news update. Here is whats happening this hour. Were following two developing stories. First in the south pacific, a 7. 3 magnitude earthquake striking off the coast of van va tu. Despite its size, the Pacific Tsunami Warning Center sas there is no threat of a pacificwide tsunami. Here in the u. S. Police shooting a man wearing a full animal suit who claimed to have a bomb. He was in the lobby of baltimores fox affiliate television station. A Police Spokesperson saying the suspect is still alive and in custody. All employees have been accounted for. A u. S. Attorney reporting three people connected to the San Bernardino shooter syed farook have been arrested on marriage fraud conspiracy charges and one of them is farooks brother. Last decembers attack killed 14 people and wounded 22. A new poll suggests more than half of the countrys millennials are rejecting capitalism. The survey which polled those between 18 and 29 years old finding just 42 support the free market. Thats the cnbc news update this hour. Kelly, that doesnt bode well for the economy. For the world. For the world, for the economy. Listen, its a fair point and you cant just youd hate if it was 100 of people think its the best thing of all time too. True. There has to be some skepticism but you wonder if the push or pull has gone too far. And especially if they dont believe in investing in the stock market and, you know, they feel disenfranchised from the financial system. Thats a danger. I know plenty of people who tell me theyre playing daily fantasy. It seems like the same thing and its more fun. We can make this fun too. Our sue herera. Most investors dont think well see inflation for a while, but our next guest says theres new evidence those bets are wrong and it could be profitable to contrarian investors. Carl icahn telling cnbc he sold out of apple. Find out the impact it dramatically had on markets later on the closing bell. My mom loves giving me advice. She even gives me advice. About my toothpaste and mouthwash. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again welcome back. Here is a look again at how we finished today on wall street. The dow sold off more than 200 points and the worst performer was apple. The s p was down 1 or down 19 points and the nasdaq down 58. Now a check on some of the big names after hours where its a little bit of a different story. The big one, amazon, up 12. 5 now after an earnings beat. Linkedin, those gains have moderated. Now up 4 . Gilead sciences still down 6. 5 despite a dividend hike, and expedia is up 12 . Lets get a check on two more names moving on earnings with dominic chu. Lets start with one of them on the move. Skyworks solutions off by 2. 5 on 206,000 shares worth of after hours volume. This after the Semiconductor Company came out with earnings per share with a slight beat, 1. 25 per share. 1. 24 was the average estimate. Revenues came in slightly below expectations. 775 million. The street was looking for 776 million. In addition to that, the company sees its Current Quarter earnings per share guidance at 1. 21 falling short of the 1. 32 estimate. Revenues forecast to be around 750 million. That falls short of some wall street analysts with regard to Current Quarter revenues so shares are sinking right now. Heading into this number its important to note the shares were at least showing some signs of life, although still down 6. 5 on a yeartodate basis. Down 24 over the past 12 months. The other one i will bring to your attention are shares of outer wall. Shares of outer wall were slated to reopen at 4 35. We havent seen any significant now we do have a resumption here. The shares are up 7 on albeit very light volume, around 5,000 shares have tran acted so far this after the company that formerly was known as coin star, owns the red box dvd kioskiosks. 536 million worth of revenue versus 508 mlgds worth of estimate. They raised their full year Earnings Guidance above estimates. They see . 5. 35 to 6. 55 adjusted. Those shares moving, again though on very low volume, kelly. Back over to you guys. Dom, thank you so much. Dominic chu. Also moving, maybe inflation. Maybe some signs its picking up. The core price index was up 2. 1 for the First Quarter. Thatas the biggest First Quarter gain since 2012 and our next guest says this pickup could be just getting started. Joining us to explain is ken brown from the wall street journal. Youre going out on a limb here. Oh, come on. Let at the put it differently. For years people have been saying its going to pick up. That hasnt taken place. But why do you sense theres a paradigm shift now . First of all, im not saying were going to get big booming inflation. Im saying this is something investors are missing. This is not priced into the market. A lot of things are priced into the market. Earnings are decent and the markets are up, bonds, all that stuff is doing well. Inflation is not priced in. Theres all this evidence. The reason why inflation was so low the last year or so, the dollar was stronger, commodities were weakening. Now what youre seeing is those are over and the labor markets are very tight. All im saying is the next 12 months youre probably going to see wage increases thats probably going to feed through to inflation more than the market expects. Its plucked from the headlines. We see verizon offering the union a 7. 5 wage increase which to a lot of americans probably sounds pretty good but at the union is unimpressed because of other conditions verizon wants to throw in there about being able to reassign people, move people around, et cetera. At the same time weve got uber reducing fare rates which is putting less money in those drivers pockets. The labor market is complicated, but the fact that theres a strike the fed used to actually count days of workers on strike as an inflation indicator. They dont do that anymore. 70s im guessing. 70s, 80s. You talk to some of the oldtimers. But workers now are quitting their jobs at a high rate and this is the same as striking. Im taking a risk im going to get something new but i can get higher pay. The number of workers earning the minimum wage is down a lot in the last few years. It had gone up and then it came down. Its back to where it was in 2008. Theres tightness in the market. Eventually that pushing through to wages. Also the heard on the street column, steph, pointing out the Federal Reserve could raise rates in june. Maybe if you read between the lines and between the lines again, you know, this he dont want the market to prays it in perfect it happens. What happens if they raise in june and some of the pressures come to bear. Well, if they raise in june, a lot of things are going to happen i think. I think youre going to have that back rotation from growth back into value if we get this growth trade at all. I think that it will tame the gold market to stoome degree. I think the gold market is pricing a little bit of inflation. Thats what i think that move is and not a lot of people are saying that. But at the end of the day, look, if theyre going to raise, that means the data is Getting Better and i would feel better if theyre raising because the data is Getting Better and theyre going to try to dampen the inflation expectations. Exactly. And the fed would be very happy to see a little bit of inflation. Theyve worked so hard to get there. They say 2 is the target. The market is pricing in a lot less. And thats why well have to see if theres any violent mispricing in our future but for now, ken, thank you. Ken brown from the wall street journal. All of the f. A. N. G. Stocks have reported their earnings. Amazon did beat earlier this hour. Tech earnings this quarter have been a mixed bag. Here is a look actually company by company at the earnings, the revenue, and the guidance one by one. You can see there results from google, microsoft, and apple were weaker but facebook trounced estimates. And then we have facebook. When carl icahn speaks, the market listens. When he told cnbc he was dumping his apple shares, the stock sold off and so did it the market. Find out why he made the move coming up. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Welcome back. Tech companies putting in a lackluster showing this earnings season but take a look at amazon, linkedin and expedia this hour rallying nicely. Facebook also the exception, of course, to what had been the weak start, but Silicon Valley isnt really focused on what wall street is watching. So what are venture capitalists thinking about things these days. Cheryl chang is joining us. Thank you for joining us. Maybe you can help us make sense of the environment and we were earlier talking about a tech wreck in the last week or so. We know the prices of a lot of these private companies have come down, but yet there are still some pockets of real strength, so how would you describe things now . Hi. Its great to be back on the show. So i think in Silicon Valley its such a diverse place, right . And i think a lot of tech wreck as you talked about earlier this week was more focused on latestage companies that we saw raise a lot of money in the last 12 to 18 months. At blue run were really focused on the early stage, so for us the shortterm implications of valuation that you might be seeing in the Public Markets or in late stage dont affect the opportunities we see. Were really focused on new companies that are starting out building, you know, fresh ideas and looking at new technology opportunities. And in that area we still think its very healthy. This is sort of the best time to be exploring new opportunities. But at the same time what happens in the Public Market does have an effect on the overall environment in Silicon Valley, right, from commercial real estate to the valuations entrepreneurs think they can demand even at the somewhat early stages. So given what we are seeing this afternoon from amazon and from linkedin, what we saw yesterday from facebook, how do you expect that to affect the mood on the street out there . So, again, in the very short term, i dont think its going to affect things at all. Unfortunately, i wish it would affect real estate faster than it will out here because its still very expensive. But in general i think everybody is going back to a few key principles, and when they look at the large companies, they realize that at the very core you absolutely need to innovate and also stick to business fundamentals. So in the short term, some of the companies we see that are doing very interesting things and will kind of rise up above all of this noise are companies that have very strong unit and business economics as they build their companies and their technology. So, for example go ahead. So what i was going to say is, for example, when you look at Companies Like a coopa software or Companies Going after Cost Management and spend management across all kinds of industries and particularly in coopas case going after small businesses, you see them deliver value through technology toed business fundamentals for their customers. As a result they build a slow and steady revenue ramp that wall street as well as their customers will deeply understand. Yeah. So im just curious given the kind of uncertain macro environment over the last year, the ups and downs of the economy and whatnot, is it harder today to find value or is it easier than it was 12 months ago . What do you mean by value . Well, if you look at various Different Companies and you see, you know, their metrics, do you see them as attractive investments for the long term . Well, again, i think it depends on what you mean and what you think your investment horizon is going to be. For us as a venture capitalist, especially in the early stage, our investment horizon is very long. So value for us is much more of a longterm game. So, for example, one of the largest vcbacked exits last year was a Company Called began ji whi ga ganji which is a company in china. It was one of the largest exited as an early stage investor. A lot of that was a much longer Time Investment horizon. If youre thinking about the shortterm, where do we see value, definitely theres a much heavier scrutiny today on business economics than there was, you know, 12 or 18 months ago when there was much more exuberance about investing in private companies. So there is definitely more of a flight towards quality and focus on the business and how the business is developing than you saw probably 12 to 18 months ago, which is a healthy thing for all of us. Oh, sure. I feel more relaxed already. Cheryl, your voice, the scenery, the water, the longterm discussion. Thank you so much for joining us. Great to get your perspective. Sure. On whats happening. Cheryl cheng. Carl icahn dumping his shares of apple send the stock lower by more than 3 . Should you pick up what he put down . Thats right after this. Uh oh. Whats up . Does nobody use a turn signal anymore . Welcome back. Here is what carl icahn had to say earlier. The activist investor out of apple that sent the stock down more than 3 . You can see the sell off. The dow component dragged down the Broader Market but he still doesnt think apple is expensive. I think the stock is very cheap still on a multiple basis. In fact, one of the cheapest. I also think eventually that 2. 6 trillion aboard so on a fundamental basis, you know, with ten, say points its cheap in my opinion that way. The other way is china obviously could be a shadow for it. In many ways, the china comments seem more relevant than the cheapness because thats long been the case no matter how much it traded up or down. Sales prospects in china, i understand why people are jittery. Sure, china is certainly an uncertainty. Thats why stock is trading on slows for the year and its trading at eight times ex cash and returning that cash to shareholders and going to continue to do that. So if this kind of market wants a strong Balance Sheet and a dividend yield kind of story with a product cycle coming, we dont know if its going to be that successful or not but i dont think anything is expected at this point. Very, very low. People arent expecting the iphone 7, whatever its going to be to be a blockbuster by any means. It will be a blockbuster but apple always comes out with blockbusters. How much of a blockbuster will it be . As i was listening to icon talk about china and concerns, et cetera, et cetera, i cant help but think you stayed in net flex for so long. Uhhuh. This you also thought this would be over a 200 stock last year so this is a dramatic change of heart. Right. Who knows why the best investors of all time, some of them make the trades they do when they do but something tells me with the investments that apple made in china, unique up above 35 Retail Locations in china now so big employer on top of a big seller that lends them extra leverage that they wouldnt otherwise have. They will be okay in china. The overall question for me is with this new iphone se out and trends of the smart phone market, now that they have to sell three ses to make up the sales revenuewise of two premium iphones, do revenues necessary go up . And Profit Margins are pointed lower and thats even before the full numbers have come in. I would argue a lot is in the stock, right . I like having that product cycle story and yes, john is right, i think it will be a blockbuster but no one is giving then credit whatsoever. So yeah, this stock is probably going to sit here for quite sometime. Maybe it finds the bottom in the low 90s. Thats where i was buying it and i would go back and buy more down at that level in the meantime get the dividend. On apple. Amazon and linked in, those Conference Calls are minutes away. Well tell you what to look for. Tune into closing bell tomorrow. Christy turlington will join us. Nothing unleashes power. Quite like the human foot. Introducing the 241 horsepower lexus is 200 turbo. With almost twenty percent more base horsepower. Once driven, theres no going back. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Shares of amazon up. What are you guys going to be listening for . The reason why retail outperformed for amazon. How much of it had to do with mobile. How much of it had to do with the way it optimized the app specifically. Spending. I want to know how much they will be spending and will they buy any more airplanes . There is talk about the investment cycle and yet seems to be a different one pleasing investors. Well pivot tomorrow and talk to earnings and talking about exxon and chevron. Exxon is amazingly strong. Chevron, strong, strong Balance Sheets could dividend yields. They have been able to weather the storm and get a premium e valuation. Weve been talking on the show whether people are moving out of the technology or Health Care Space into energy but that aside, john, what do you think the message is now that people of tech are earning . The message is things arent as bad as they seemed a couple days ago. We talk about google missing but dont give guidance and revenues up better than 20 year over year. You can call that a miss if you want to or you could group it in with the strong growth out of facebook that were seeing out of linked in and amazon and say well, maybe stuff is still growing despite this tough economic environment and hey, maybe it will grow when things turn around. See if we can get a Broader Market turn around. The dow down and guys, thank you so much for joining us for another rowdy earnings. That does it for closing bell. Fast money begins now. Fast money starts now and overlooking times square. Im in for melissa lee. Traders on the desk, steve, Karen Finerman and dan nathan. Tonight on fast. Amazon surging called just getting underway right now. There is our team because we have Team Coverage and the big story, linked in soaring. Were bringing you breaking headlines. The second longest bull market ever. Nk