Transcripts For CNBC Closing Bell 20160822

Takeover targets coming up. Donald trump has bigname investors advising the campaign and now details if think oar putting their money where their mouth is. We have got the lawyer behind a controversial lawsuit accusing Morgan Stanley of mismanaging the employees 401 k plans and rippling through the industry. Hes going to join us after the bell. Be sure to stay tuned for that. Adding to the bearish sentiment is last weeks rig count showing u. S. Oil producers added rigs. Right. Ra raising concerns of supply online. Lets bring in ed war morris and halima kroft. You know, a lot of talk about how the latest move, whether its the 20 decline, the 20 bounce, 9 up in wti crude last week, has been mostly about investor positioning, is that the case or are we seeing real fundamental supply demand factors here . We have a position of basically a record high in short positions and expected a rally on the back of that and started the see i think the discussion of the opec freeze coming back into play and moved sentiment. I think were watching what happens in september. Seeing prices move another leg lower, i expect opec to continue to talk about action in september. It is an interesting question, ed. Do you expect anything from opec other than to just keep pumping at this point . No, not really. Theres nothing to change dynamics since last april. Ministers of meeting to do Something Else and had to meet as opec and obviously those with a vested interest of talking up the price are doing it very well. Thats no reason to expect anything changed within opec. Well, if thats the case, ed, what are we looking at in terms of clues for what might be responsible for the next leg of the market . Talk about continued heavy exports of distilled products. Its something to be concerned about but i think the big drivers of the market today were expect a new supply of nigeria. Iraq production. Actually returning to the market as production that was shut in february, a dispute of getting price and right revenue and the bad or krg. Thats resolved. We have another 150,000 barrels a day. And then talk that led to a strengthening of the dollar certainly played itself out. I think this is just a way that a market in tight balance responds to news about increments of supply that are just a little bit bearish and took the froth out of the market. Helima, when we were testing 47 on crude this morning, thats what had the market worried and kind of near that market again. What do you think happens as we go through all of these supply wriggles . Is there significantly more downward pressure on the oil price . For example, the nigeria situation, people started to think, oh my gosh, its turned. We have seen multiple ceasefire announcements and then we see more production adages. I dont think the fundamental drives of the conflict ended. I expect to see more trouble in the producer state and the market today is anticipating that new supply comes on there. Iraq, we have new supply coming on and how much more can they do beyond 100,000 more in the pipeline in the north. You know, it reminds me because theres been some discussion in the u. S. About new techniques that the Big Companies are using for fracking and this chicken foot type fracking, ed, an different approaches. Is the technological innovation continuing in a way that could bring even more supply online here . Yeah. The real big unknown in the market is u. S. Is a swing producer. Kind of two elements to it. One is the inventory of drill but uncompleted wells and saw producers able to edge it above 50 for 20. 17 way back in march with the 3month lag they started completing wells and production stopped declining at the rate that it was doing and now we have drilling activities up for eight weeks in a row and then kick in with more production and the u. S. Is really the place to watch the rest of it is more oiz. The u. S. Sees a growth from the completion of uncompleted wells of 400,000 to 600,000 barrels a day and then more into 2017. Nobody else, not saudi arabia, not iraq, not iran, no other group of countries actually can add a Million Barrels a day to the market the way the u. S. Could so thats the area to watch into 2017. Just to wrap this together, we have mostly talked about potential for incremental supply coming on. Maybe nobody really expecting anything in the way of cuts from opec. And yet the crude price, for example, gone back to where it was in the middle of the day last thursday so i mean, is there sort of a buying momentum to this market . Are we going to be testing the 50 market just because of how resilient the market is . We think the market will be choppy. We think it could be between 45 and a 55. We expect it in the mid50s ending year but you can have days with the bearish stories of the dollar weighing on prices and then you have to watch other producers like venezuela down 230,000 barrels year on year. They could have protests there and the market will go back an forth and choppy until the end of the year. All right. Thank you both. Trying to illuminate whats happening with the swings in crude oil today. Lets get to contributor michael farr with holly list and keith bliss. Welcome to everybody. Michael, what are you telling investors to do in this environment . You have stock prices near alltime highs, fixed income prices near amazing highs here. Weve talked about the swings in commodities. What is your advice . Make sure you know what you own and also remember that weve been in really expensive markets before. A lot of this feels like 1998 or 1999 when stuff was kind of stupidly expensive. But it kept getting more expensive. So this can last for a while. But its really important to understand what you own, why you own it and the fundamentals and Balance Sheets are strong because its the weaker names with weaker Balance Sheets that tend to tank more when markets reverse. Holly, i think a lot of people like to be getting back to Balance Sheets and individual corporate drivers and this is a few days to talk about what we might hear out of janet yellen at jackson hole and the fed chatter kicked up again. What do you think we i guess the markets want to hear out of janet yellen. Seems like largely a judgment call. You are marshal the evidence in either direction of a rate hike september or not at all. What do you think the market priced in here . Right now, mike, the market has not priced in any fed hikes for september, this year or primarily even 2017. So i think Janet Yellens really going to set the stage for how the market moves Going Forward clearly. She is going to come out on the hawkish side like the regional fed president s have been recently an start referencing inflation that its picking up, might be behind the 8 ball in that and just look at the inflation type of numbers since they hiked rates back in december of last year. Clearly, theyre all higher than they were then so you can make the case that theyre gong to raise rates soon. However, if you lock at some more of the fed governors which come out more on the dovish side, then youre going to look at potential labor slack and the productivity numbers endown three consecutive months in a row and taking a wait and see type of attitude. She is really going to set the stage for Going Forward next few months and the markets not priced for any hikes let alone even one coming up in september. On that point, keith about productivity, the vice chair Stanley Fischer spoke over the weekend saying, look, you have to look to fiscal and regulatory to fix this. You have to take it for his word and setting the stage with the other fed president s like williams and lock hart and bullard with their statements. Theyre really very good at jawboning the market and floating out the trial balloons to see how the market will react and we have seen we have not reacting. The Equities Trading in a tight range. Fixed income is lofty. The 10year yield barely budged at all. I think they take the cue and say its okay to raise it 25 basis points and that impactful to the u. S. Economy and then ill say if they raise in a world of reduced Interest Rates around the globe in the major markets, loose Monetary Policy, it is bullish for u. S. Equities. Searching for yield, were in a world right now where you have 40 of the s p 500 companies now give you a higher yield than the 30year bond here in the u. S. And 60 higher yield than the 10year note and continue to see this type of reaction. Indeed, here today, the early imbalances that we have on the buy side at a high number and we should see a pop of the market going into the end. You say go ahead. Its paramount you say to know what you own. What would you prefer to own and own in this world as keith says of scarce yield and growth . Right. I was to make a point on holly saying about janet yelling setting the tone. Market for several years and certainly this year still moving on whatever the fed does so its the whole story behind the market and our opinion is Monetary Policy. I like to take a look at where things havent been moving and the controversy about the banks, i think at one times book and close to one times tangible book these things look pretty cheap. The fed stress test said theyre sound. Balance sheets in very good order and dividends are solid. As rates do go back up, whenever they go back up, banks are positioned the show value here. Some of the volatile names i probably wouldnt own. Some of the utilities, reits, others that have done so well so far in the first half of 2016. Probably a good place to look for some profits and find those companies that pepsi colas of the world to get you through in a more solid wi. Well have to see about kobe bryants investment ideas. Concentrating on the private things and great things of nikes ceo as you might expect. Holly, how big of an influence is the dollar . Sounds like people trying to make sense 0 of whens going the make it strong or week at this point. Well, its which comes first the chicken or the egg . The dollar pulled back early but seeing a strong dollar keeps us from importing inflation into the u. S. And so that is allowing the fed to not raise ratings as quickly or as strong as they may want to given a weak dollar and the strong dollar proceeds the fed from doing anything in here. Now, should we see the dollar weaken and give the fed the excuse theyre looking for to start raising rates but as long as were not really seeing that and plus look at the british pound, that is weakening in general since the brexit vote and could continue and if you have that as a countparty to the u. S. That keeps our dollar strong visavis the pound and could keep the fed at bay and 10year rates and really the entire curve just sort of stagnating here and doesnt give the fed impetus to raise rates either, kelly. If anything you want to be more invested in the short curve than the long end or more of the long curve of the u. S. Relative to germany, japan, switzerland all seeing negative rates. A little interesting people doing the opposite. Thats the fed starting to say that, too. Ears pricked for how yellen talks about inflation. Thank you, everybody. Thank you. Appreciate it. Kicking off the discussion this hour. 45 minutes still to go. Stocks down on the dow about 12. S p down just a point. Maybe it could turn positive here into the bell. They mentioned the buy orders in terms of the imbalance. Crossed the flat line a few times already. True. Meantime, we have a merger mover. Medivation moving and valaent on a neumann on the csuite. Also ahead, hedge fund titans, a closer look at donations of Hillary Clinton and Donald Trumps coffers. Youre watching cnbc. Narrator the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. What is that they contour tempurto your body. Ses. You just have to lay back in my tempurpedic, and it just kind of forms to my body. It comes up to you, like hey, there you are. Hey, there you are. Im going to put you to sleep now. It keeps us comfortable and asleep at night. Can i take a nap now . Change your sleep, change your life. Change to tempurpedic. Now thru september 11th, upgrade and save on select tempurpedic mattresses and adjustable bases during our labor day event. A bit over 40 minutes left in the trading day. The dow, looks like the winners on the day include visa. We have actually apple conspicuous loader on the down side. Dow in general down just 18 points. Been bouncing around that flat line most of the day. Evenly split for the blue chips. Marathon oil among the biggest losers of tn s p today. Exploration and Production Company says the chief Financial Officer resigned for personal reasons. Pat wagner has been named interim cfo. Giant syngenta is rising. The shares up 10. 5 on the news. The company says it expects to close the deal by the end of the year. Shares of bio tech firm medivation surging on news pfizers buying the company for 14 billion. Meg tirrell has a look at the deal. Hi, meg. Hi, mike. The buyer wasnt known until today. Pfizer spending 81 a share to buy medivation beating out rivals in what was known to be a competitive process. It took getting it up to 81. 50 to get the deal done. Thats 14 billion in cash. Pfizer says it adds to the earnings about 5 cents for the first year after closing the deal. Now, what does it get for 14 billion . Well, medivations approved drug is approved for Prostate Cancer bringing in more than 2 billion in the last year and medivation i splits the proceeds. It also comes with two drugs in the pipeline. One for Breast Cancer and one for immuno oncology. Investors like the deal. Some questioning the price and pfizer shares not knocked too much here and they say they expect to do pfizer do more, guys. Potentially of pfizer doing more, seems to have excited some action in related stocks to medivation. What else are people saying in terms of potential addition altar gets out here in the space . Its rampant. Seeing the etf going up today maybe on pace for a record in the last month. Some of the next tar gets of people talking about, incyte up with approved cancer drugs and more in the pipeline. Bio marin of a potential target and focused on rare diseases. Also up almost 7 . Vertex pharmaceuticals is talked about as a potential takeover and then the cancer space, two that are more similar to medivation in one of the drugs, also working this class of parp inhibitors. Speaking of health care, you know, acquisitions, meg, valaent with a neumann in the c suite and that news over the weekend or late last evening. They have continued to kind of bring in new people, right . What do you think is going on here . This is a continuation of the shuffle at the top of valaent. Joe papa, the ceo coming in this year, he uses this phrase a lot. The new valaent. You can see here the old leadership thats left and transitioned really on the top into what theyre calling the new valaent. So mike pearson, the former ceo. He left earlier this year. We have a shuffle now, of course, in the cfo joe. Howard shiller was cfo. Left, stayed on the board and then kind of ran into unpleasantness when valaent seemed like they were blaming him for an aggressive tone at the top of the company. Robert rosiello took over and leaving today and staying with valaent. You can joe papa and bringing in cfo paul herende en. Papa talking about the operational strategies, should play into what theyre trying to do with valaent and people encouraged of changes at the top. Guys . New cfo, people mentioned the coincidence, if you will, that bill aikman on the board of valaent also a big shareholder of zoetas for a while. That jumped out to me, as well. Wall street journal i believe broke the story today and said today that there was no connection with aikman there and i did wonder the same thing. That said, meg, last week we had a couple of upgrades to the stock. It really obviously down 90 one point off the peak but its been a little bit choppy since. I guess this is just the latest in kind of internally what the managements trying to do, change things around here and a larger question of what its Growth Prospects are Going Forward. Thats right. Made investors happy last week is team renegotiating the debt kof nance, a black cloud of worry over valaent. More than 30 billion of debt they have and will they generate cash or potentially sell assets to manage that debt and still the questions but papa talking a lot about stabilizing the company and returning to growth and people hope thats what hes going to do now. Meg, thank you for joining us. Thank you. A big day in health care space. Sure is. Meanwhile, with under 40 minutes to go in the trading day, the dow is down 15. I was trying to find it there. S p 500 is kicking around that flat line all day. Its just about flat down 1. 6 points. Nasdaq managing to stay in the green ever so slowly. Thanks to those bio techs. Coming up, pandora is moving after comments here on cnbc a short time ago. Well get you details. A special report on which president ial candidate is winning the race for Financial Support of hedge fund titans. When it comes to medicare, everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. Consider an aarp Medicare Supplement Insurance Plan insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement Insurance Plans, it could really save you in outofpocket medical costs. So, call now and request this free decision guide. 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We think the right answer today is to sell the company to one of a number of buyers we think want to pay a premium to the share price and a Great Company and great aqcquirers of assets and a Great Potential acquirer for pandora. Well, thinkd be getting perhaps some value and pandora shares down 20 over the last year. Interesting move. I mean, liberty also been involved with siri. Kate kelly on to other things, Hedge Fund Giants vocal of the candidate theyre supporting and not necessarily following through. Heres kate kelly looking at the race for those hedge fund dollars. Hi, kate. Reporter hay there, mike. Hillary clinton hauling in dollars of Hedge Fund Managers. 25 million to Donald Trumps 2,000. Appearances were supposed to change that and so far this summer that change is not terribly meaning of. Just out over the past weekend show that trump took in just over 2 million for the month so far. The vast majority of it from technologies cochief Robert Mercer and a roughly 75,000 donation of Robert Bishop but some of the big names that are acting as trumps economic advisers of icahn and paul sen absent for the month of july. At least so far according to the filings. Icahn floated as a possible treasury secretary given just 50,000 it would appear and paul son about 250,000. Reportedly. Both of those contributions in june, guys. In any case, they didnt move the needle far towards clintons tens of millions. She is really taken in a lot from that industry. So, interested, kate, to talk about the donald trump donations or lack thereof for a second. You know, theres a couple of things that could be going on there. One is that people dont want to support him. You know, dont want to throw their weight behind him or afraid of people knowing that they are. I mean, do you think that sense of him being a more controversial candidate than the republicans lately could be holding them back . I think thats probably part of it, kelly. Ill go a step further. I talked to somebody last week with an interesting take on the media and social media impacted the race. There are a number of managers out there who although they might be holding their nose doing it, they dont agree wholesale with the policies, support Hillary Clinton than trump and think hes a wild man. Jim simons said, he is a Hedge Fund Guy of renaissance and dont want to be publicly shamed and dont want donald trump northwesting nasty tweets about them and a met the situation. I think for sure trumps been controversial. Barons talking about the trade pacts that hes opposed to and Hillary Clinton raised issues and with how good economists cant agree with that. I think thats a divisive issue in hedge fund land and im sure theres many others. Whats the intent behind the dollars from hedge funds toward the clinton at this point . Obviously, shes had pretty close ties with finance. But is there a policy objective it seems to be behind or backing the winner . You know, thats hard to say, mike. I think everybody has their own agenda. You think, for example, about the former executive who has his own pac and very much dedicated to Environmental Issues and is a big hillary supporter. I think in his case theres a case of the environment and probably has a large part in driving his contributions. I think other priorities, range, george soros is a huge hillary supporter and given at least 25 million according to someone familiar are the matter in various ways and he obviously is a guy whos very active in global affairs, most recently outspoken of brexit and strong economic views, hes got strong human rights views and theres a pan plea of issues for Something Like him and then jim simons, renaissance founder i mentioned, donald sussman, founder and manager, so its hard to say. I dont think theres a general prototype here but i think theres a combination of feeling that of the two, clinton is better overall choice and feeling on certain policy issues she also in alignment. Donald trumps emailing 6 4 giving you recall from the barack obama, the initial election in which he became president , small doe magss were huge and the ability to harness them through online means also huge. Thats not a small accomplishment for the trump cam pin. No. Same for bernie sanders. Thank you so much, kate. Kate rekelly on a busy day for her. And breaking news on mylan health care. Senator grassley sending a letter about the pricing of the epipen for emergency use for allergies, citing a story of nbc news last week showing that since mylans acquisition of 2007, the cost risen over 400 . Grassley requesting a lot of information about whens gone into the pricing saying please explain the changes made to epipen that caused it to increase the price and reflects the value the prouduct provides. Mylan saying its justified plowing it back into research into the product and attention paid to the price of epipen, not just over a few weeks but the last year since the drug pricing focus really started to get turned up going as far as martin sclerly. Exactly. He said these guys are really vultures. What drives their moral come pass and pretty rich coming from him. But if this chorus is growing in the wake of the news last week, this explains why now its suddenly, you know, Chuck Grassley looking into it. Certainly. Bernie sanders also tweeted about it last week and there are some questions over patient assistance programs. Thats something companies try to do to help cover the cost of drugs for patients and Chuck Grassley here asking about the patient assistance programs. Elizabeth warren did the same thing in a hearing for valaent. This is something to continue heating up. Yeah. Fascinating. All right. Meg, thank you. Again, appreciate it. Time now for a news update. Lets get to sue. Thank you very much. More air strikes in syria today. The syrian observe tori for human rights reporting 16 people including several children were killed. Theres video posted on social media of those attacks. The latest government figures show 2,800 people in shelters in south louisiana just a week after flooding killed at least 13 people and damaged 60,000 homes. President obama planning to visit that area tomorrow. Congresswoman Debbie Wasserman schultz and the miami beach mayor urging the government to provide for resources for zika virus. Theyre holding a press conference on the virus detected in two miamidade neighborhoods. Ralph lauren announcing it will not renew ryan lochtes endorsement deal. The Second Company today to cut ties with the u. S. Swimmer who admitted to fabricating details of being robbed in rio. Speedo saying that they will not endorse lochte. Back to you, mike. Not wasting the time the companies, were they . With 26 minutes left to go in the market day, we have narrowly mixed markets. The dow down 11. The s p 500 is virtually flat at this hour. A leading trader tells us what hes watching into the close. Later, watch out uber ear lyft. Massachusetts wants to tax the ride hailing apps and give the money to traditional taxis. Well discuss the potential impact when we come back. Em for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at Td Ameritrade. Month after month. Year after year. 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Well, you know, you can say were waiting on what president yellen or, you know, grand marshal yellen says on friday. I dont know that necessarily tells you anything more than she said last week. Earning seasons done with for the season pretty much. You have to wait until after labor day. Sorry. We will be here and we had fireworks in crude oil. Energy stocks kind of following that around. Whats the link these days between that and equities . I think that there was supposed to be a disengagement between the oil and equity market and obviously its not happened yet. And, you know, i think we continue to see which to me is not a bad thing because i do think that oils going to have a narrow trading range. Right now we are in a narrow trading range and pretty much holding to form. I think some point before the election id like to say that i think theres a disengagement and the oil market is, you know, not going much higher than 50, 55 a barrel short term anyway and the u. S. Equity market will. We have Third Quarter earnings to come out and theres a lot of important data coming out and see the market pop from that. A lot riding on the next couple of months. Thank you. Thank you. Thank you, guys. 20 minutes to go. Seeing if the markets close in positive territory. The nasdaqs up today, boosted by bio techs on the big pfizermedivation deal. Dows down about 15. And the wake of the departure, the future of viacom is the talk of the town. A top investor tells us what he wants to see next. Ride sharing Services Uber and lyft seen roadblocks of expanding services and new barrier might be in the horizon in massachusetts. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Now, based on facts it said he sells just about month here and this would, in fact, be the ninth straight month selling. He does own some 270,000 shares. Guys, back to you. Thank you, josh. Is this significant . We have a number of highprofile purchases of stocks. This sounds like a methodical program and selling small amounts increditmemenincrementa dauman out as ceo of viacom replaced by chief operating officer tom dooley. Viacom down 4 on the news. Joining us now to talk about why maybe the. So, brian, maybe ill start with you, and what did you see in terms of viacoms performance and maybe the potential outcome and turnaround efforts of this settlement and new ceo that led to that downgrade. Sure. The downgrade related to commentary that came after the most recent Earnings Call where, i mean, the deterioration certa certainly is a problem and seeing that again with this weekends box office results. But on top of that, just the outlook for the core businesses, frankly, worse than expected and operating basis. Whens really difficult to tell, though, how much of this is truly just because of all the distractions internally, the managerial issues it brings up and the way in which its limited the ability to negotiate with partners and run the business versus sandbagging for conditions under which growth emerges a year from now or just structurally problematic issues. The current management news is not really surprising. Frankly, it is not a major change. Dooley very competition and capable isnt a meaning difference. Sal, is all that kind of cautionary stuff priced in to the stock right now. You own it. A lot of folks tell you among the big media stocks it looks to be the cheapest. How are you thinking about the valuation and the prospects for the company right now . We we think viacom is a bargain. We believe in the franchise value of the businesses. Although investment weakness, theyve been buffeted by changes in distribution and new entrance and over the top providers. You know, we see that theyve been adapting and in a way theyre like the early theyre a demographic of the early adapters of a lot of the new ways of viewing programming so viacom had to adapt first and from my perspective they are adapting. In terms of management changes, we have nothing against philippe. I think me might be a little distant. Tom dooley is much more hands on guy. Id will have to see him get the permanent position. See what he can do with it, honestly. Okay. You know, theres about 400 million shares outstanding. Stock is the bstock around 41. 70, i think. So youre paying about 17 billion of market value. Youre paying about 28 billion for the business so we think theres a lot of upside. I was going to ask you, brian, what about paramount and the benhur flop of the weekend . Its perplexing and speaks to the bigger issue of viacom and cbs. Nobody cares about governance until its a problem and the performance making people focus on this. With paramount, theres something going wrong at the studio. Is it because the company isnt allocating call there . Trying to be cost efficient and this is the outcome . They dont have many titles coming out. I dont know that its management necessarily. And further, when you add to this i think one of the few people that Sumner Redstone reportedly visiting not speaking to dauman is brad gray. Makes you wonder will National Amusements have something to say about whether or not you make changes even if you think that was the right choice. Its an unfortunate situation for the near term. People talking about the possibility of deals down the road. We have the see if that comes to pass with the sale of a stake or merger. Thank you. Appreciate it. Theres a studio and everybodys hand. You know . Thats the bear case. Exactly. Made on the iphone. Right . Over facebook. Well, with 12 minutes to go before the bell, we see the dow is down 16 points. Its been really kicking around that range for a while. Nasdaq is outperformer thanks to getting the lift. Central bank action over the weekend ahead of the big jackson hole speech on thursday of this week. Well tell you what to watch coming up. Youre here to buy a car. Welcome back. Art cashin just mentioned about 450 million to buy on the bell. Thank you. When bills not here anyway, we saw that kind of feed into the markets a few moments ago but now it looks like the dows still down about 18 points. S p a point and a half. The nasdaq in positive territory. We are here on the floor with anthony chan and when is janet yelling speaking . Friday morning. Everybodys talking about how hawkish the Federal Reserve is. I think its more like a reality check. Everything that was said is true. 1. 6 on the core pce. All these things are happening but remember that there are a lot of boxes they have to check and the reality is that Economic Growth is here is not in a recession. I know youre beating me up in the early part of the year because i didnt think a recession was coming and growing less than 2 . Trending negative. Guess what, thats why the fed is overpredicting Economic Growth and theres a lot of things before pursuing an aggressive stance. Yes, theyll raise rates. Not aggressively. The title of the address on friday is about the tool that is the Federal Reserve has long term. Leading a lot of people to wonder if she talks about con conventional methods or might be able to do longer term and the expectations are out of the economy. I think the economy is gradually improving and the fed will raise rates and the market too complacent. They will raise rates once this year and then next year and nothing like what they were talking about last year, four rate hikes this year or four next year. But they will be raising rates. By the way, thiss a good thing because the economys getting better. That is not a bad thing. I think that earlier people so concerned about the prospect of a recession. A sense of is something fundamentally wrong . You know, we keep falling short of these growth hopes. Fed officials talking about rate hikes but, you know, momentum isnt there and yet we continue to chug along here. Its a vexing problem in a way. I guess it is just they have to deal with the reality as they come to it which means what . One rate hike a year for now . One this year for sure. The Federal Reserve was underestimating Economic Growth. Productivity above trend. 2 trend with nothing like that. Were in negative territory. As long as productivity is weak, Capital Equipment expenditure is weak, theyll be disan i pointed with Economic Growth and investors. Will the Federal Reserve say, hey, its the governments chance to take fiscal responsibility . What fischer was doing over the weekend. Remember, mike, when you see Monetary Policy using most of its bullets, you get a bigger bang for your opportunity if you have fiscal policy. Next year, both candidates are talking about spending more money on infrastructure. Theres the fiscal policy there. People banking on that. Thank you very much. Appreciate that. Coming back with the closing countdown after this. After the bell, Morgan Stanley hit a lawsuit claiming the Investment Bank mismanaged the employees 401 k s. Welcome back. We want to head out to josh lipton for us. Hello, josh. Well, mike, we had just told you that google sold about 4,000 shares, about 3 million worth of stock. Worth knowing that alphabet refiled some paper work noting that the transaction was pursuant as i think you pointed out, mike, to a trading plan. So its not as though pichai is pulling the trigger on this. Ninth straight month to sell about 4,000 shares. Back the you. Thank you. Appreciate that. Here right before the close, bob pisani here. No net movement and bouncing around a lot. This is a great day to take a look at the chart saying what happened today. So there were five separate periods where the s p suddenly hit air pockets and dropped ten points or turned around and rose ten points and on absolutelying in. Almost half a point. A significant move. This is days where the volume is light. Norm alibi and sell programs through the market. There you are. A few of them in. See the arrows . All of a sudden at the open and then an hour later up and then an hour after that on the downside. All of this you might say is there a fundamental reason . There isnt. Has to do with the trading patterns and not a lot of people on the other side of these days. A piece of news to keep an eye on. Karoda is speaking overnight, head of the bank of japan, and could not rule out going further into negative Interest Rate territory. The yen as you know, the trend generally the yen weakening for the last several months and keeping an eye on that. See the trend since the july 1st generally moving down here means the yen is weakening. The dollar is yen is strengthening. Yeah. We have a stronger yen to almost everybodys consternation. Oil, though, a little bit of a big story today. Sector moves, energy is the weak mover today and Energy Overall is a Market Leader so today was a little bit of a reversal. Thanks, bob. Ringing todays closing bell, the u. S. Secretary of the interior sally jewel and edge therapeutics at the nasdaq. Kelly, over to you. Thank you, mike. See you in a moment. Welcome to the closing bell, everybody. Im kelly evans. On wall street, couldnt quite do it for the dow and s p. Dow dropping 22 points. S p down about a 1 there. The nasdaq by the way managed to stay in positive territory a. Big deal in the bio tech space. Well get to more on why some of those stocks were moving sharply higher today helping that index post a gain of about 6 points. Coming up, new concerns of zika spreading due in part to the flooding in louisiana. U. S. Health officials warning it could extend across to both louisiana and texas. Anthony fauci head of the National Institution of Infectious Diseases will join us later. Joining us today, mike santoli with Dennis Berman and tim seymour joins us. You get the show back after the olympics. Excited to get fast money. The fans have been clamoringing. Im sure you have a ton waiting to burst out and looking for it here. So, mike, you know, it was a merger monday and in many ways oil price swings, those seem to be the dominant themes. Sector action to point to. The market itself, the s p 500, about here a month ago. 2180 or thereabouts. It seems like its absorbing and digesting that move it had postbrexit. I think a lot of people are kind of getting suspense, feeling of suspension about a pullback. It is not giving it to you except in isolated areas. Cyclical turn, things like the transport, leadership and energy before today. So, you know, a lot of people want to join a little bit of a tentative economic message out of that. How much is an effective Prostate Cancer drug worth . Up parwards of 14. 81. 50 a share today getting 2 billion a year in sales and could still double they think. Big move of fiz sbeer the kapfi cancer arena. And august, too. As we know, kelly, the opportunities for the Big Pharma Companies is limited and movement in the smaller to bigger bio techs, too. They paid a rich price for that and i think the shares were trading 20, maybe 20 within the last year so wow. Huge numbers. They have no other choice. Theyre going to have to overpay and probably means theyre cutting the costs on the other side of the existing business. But they feel like its worth doing, right . Pfizer had to make strategic moves, wanted to combine and blocked. Huge deals that were on the shelf have been pulled now. Enough to move the needle for them . Probably not. If they cant do a huge deal, they have to keep trying to do small deals. I remember the ceo of pfizer telling me unabashedly to do whatever they can, they wanted to do an inverted deal with allegen and didnt work out. With all that being said, about 7 of pfizers market cap and the market seemed to be with that. Down just. 4 on the stock. When you theoretically overpaying or the winner in a competitive bidder, not that terrible. I dont know what the dividend yield on pfizer 10. 4 . Thats what investors want and ceos rewarded for. More than ever, id love to mikes views, stocks are regarded as stocks. Tim, thats a theme playing out time and again this whole summer. Wont change any time soon. Obviously, the Federal Reserve injected fair amount of uncertainty and todays action is what they will do. I think the pfizer deal is actually makes a lot of business sense. Strengthens the position in oncology. Whens the price you have to pay . Overpay for that. I think, you know, thats whats going on with the mega caps and will continue to be the sources of capital. Dennis, we were used to reporting about deals blocked lately and one cleared was the chem china deal. How much is in the u. S. And why they got involved. A swiss company. A swiss regulator has more satan the u. S. Regulator. Theres a big move in shares and suggests wasnt exactly expected. No, it was not. I must say, though, this is a bit of a diversion, donald trump does have a point raising the question what are we getting out of the trade relationship of china. If the u. S. Company wanted to buy a similar company, there, would a u. S. Company be allowed . The answer is absolutely not. So i think its a fair question for us to reevaluate what the u. S. Companies get with market access. You say that china is changing the game not willing to be competitive in terms of the globalized market, why should we . I think thats a very fair point. Their currency is obviously falling. You know . Steadily going down and buy things while they can. Theyre buying world class asets, too. Thats a world class company. In germany, theres concern there, talking about them buying a key robotics company, the best of the engineering and almost in a vulture way identify and pick off the prized assets offered worldwide, a big deal for a power deal in australia blocked. Where does this leave us in terms is china a place of companies to cash out or are they doing so, you know, and potentially undermining National Security . Certain number of companies willing to cash out in that way. Dennis is absolutely right. Our regulators dont look at it the same way with a National Front and say this is a strategic asset. Except which we did coming to an oil company years ago. Unical. It happens here and there and looking at american Big Companies, theyre more die vesting their chinese businesses than buying more. I wonder, tim, if thats a sign theyre fed up with the sense they cannot km pete in china. Simply about the Chinese Companies first and almost exclusively. I think it depends on the company. Obviously, theres been this lets beat you down and wear you down and then come back for more. I would argue thats what apples going through right now. Lets not kid ourselves. U. S. Is very protective of companies. The u. S. Is figuring out ways. Unical in 2005 was a very, very obvious case of Energy Important to this country. Behive the curve. No way letting the chinese into the deal and i think do that every single time. I do not think this is a one way street of china. The u. S. Will be the same way. Tim, we let them buy the waldorfs a tore yeah. Sold to you. Starwood hotels, not a series of business sensitive wifi hot spots around the country and around the world . No, it is true. Getting into conspiracy theories now i think. I wouldnt say its strategic at all. All right. But anyway. Lets set that. Side for just a moment. Talk about apple. Quarterly Hedge Fund Tracker for the money flows in the top ten and the Second Quarter a big sell for hedge funds, especially apple. Funds shed 5. 3 billion of the company. Thats 84 of the net selloffs in the tech sector. A guest is here to discuss. Well, we saw the underperformance of apple shares and seems they lost patience. Dropped significantly end of last year and then they have done quite well in the last few months. I suspect that these Hedge Fund Managers, two 20 consistently coming into question. Might have had to lock in the gains because i think when you look at the analyst and you talk to them, they think ap sl a pretty solid kind of company and i think everybody kind of agrees with that. Information technology, biggest selloff. 6. 3 billion. And thats where theyre kind of selling out. I find it interesting, mike. Tech is becoming more appealing and growth and dividends and not priced like 1999. Why do you think its out of favor . I doubt that hedge funds, individually or as a group said, you know what we have to do today . Sell big mega cap tech but case by case, if you want to have an edge on that company, probably think its a limited window. Rallies. Not as if i know what will happen with alphabet six months before the rest of the market does. So to me, thats my read on it. Not so much that anything happened across the board in the sector. But just that theres a Price Sensitivity perhaps in some tactical hedge funds. Happened last quarter. Doing really well. They sold out. Its too opaque to know what theyre doing and definitely doing is moving out of sectors and top ten activist hedges we look at and moving out of there and we dont know where. Maybe in cash or gold but a muted sentiment toward the stock markets. Not so confident about it. We have heard bear itchness of big investors of the market overall. Where if anywhere were they buying . Where did you see it pick up . Consumer discretionary. 1. 5 billion worth of net buys and then energy. Energy actually done quite well in the sort of six months. Charter communications, that was a top buy for these hedge funds. Third point, went in there quite strongly. But when you look at the magnitude, theyre not there. We saw 2014, 2015, top five buys for the hedge funds, all billion plus, 4 billion, 5 billion. You look at the sell side, theyre a couple of billion each and still not going back into the markets like they were in 2014 and beginning of 2015. Tim . I think Hedge Fund Managers consider themselves mildly contrarian. The apple move is one where the stock down 93. Traded up to 110 in the Second Quarter and then you want to get out. This is a mega cap name where if youre able to get anywhere half or three quarters of that move you sell an enlooking for the next one so i think this is really just about rotation and obviously people have been concerned about the crowded trades and the hedge fund space and should be because i think theres a lot of guys traded according to the sand pat and only so much capacity in the big trade and doesnt do much for us to look back ward. What are the trades to be picking up steam . I think the financials is a place thats starting to see that. Were happy for them to tell us should they choose to. But no. Facebook bucked the trend again. An area in terms of tech we saw people who were doing more buying. Absolutely. Third point 400 million. They really like facebook and always bucking the trend. 6. 3 billion worth of net sales for the Information Technology and not facebook. And the latest data of barrens, 20 potentially to go up next year and looks promising for facebook to appropriate all of the millions of users that they have with the advertising. Thank you for joining us tim. Appreciate it. Were looking forward to the show. The rest of the crew coming up at 5 00 p. M. With one of wall streets biggest bulls, fund strats tom lee buying stocks of high yield and laying out the top three picks in the market right now. Many americans are unhappy with the companys Retirement Plans. That extends to wall street. Participant in Morgan Stanleys plan is suing the bank over Investment Options opinion high fees and poor performance. And data shows tax Free Shopping holidays do more harm than good. Those details are later. Youre watching cnbc, first in business worldwide. Announcer theyll test you. Try to break your will. But however loud the loudness gets. However many cheese puffs may fly. Youre the driver. The one in control. Stand firm. Just wait. [click] and move only when you hear the click that says theyre buckled in for the drive. Never give up till they buckle up. Welcome back. Morgan stanley is accused of mismanaging the employees 401 k plans. A participant in the plan filed a lawsuit alleging it offers options with high fees and poor track records. We reached out for a comment and they declined a statement. It is the latest in a number of recent similar lawsuits. Franklin templetons plan hit with a similar suit. Mit, New York University and yale among the others. Joining us now is charles field who represents the plaintiff for the Morgan Stanley case. Its great to have you with us. You have really shaken things up, sir. And explain what you think is at stake here. I mean, is this object Morgan Stanley particularly or does it represent a much larger move here . Kelly, this is an important area in Society Today because millions of American Workers depend on these type of retirement accounts. They deposit their hardearned savings in these accounts every paycheck and hope they have a plan that has good investigationments, reasonable costs and that theyre monitoring the investments in these plans so that the people can retire and enjoy their Retirement Savings. So, it goes beyond Morgan Stanley. It goes to all of the plans that are being managed in the United States. Mr. Field, is it wrong for a fund or a set of funds to perform poorly . Is that unto itself a violation of the law or is it really more about the cost of those funds . Its really both. There is a federal law that is designed to protect the Retirement Savings of American Workers. It is arisa and imposes basic duties on employers who set up these plans. The basic interest is they have to operate in the best interest of their employees. Which means they have to select prudent investments for the plan, they have to manage the costs and then they have to monitor those investments and cost to ensure that the plan is still operating in the best interest of the employee. So poor performance by itself is not necessarily a bad thing. But if you leave an investment on a plan for too long, and youve not monitored the investment and removed that, when you should have, that is a violation of your fiduciary duty. Would it be a violation, mr. Field, not to offer exclusively indexed funds . It would not be a violation not to exclusively. You can make you can select or construct a portfolio of passive and actively managed funds. And then from that, the participants can decide but that doesnt mean that you should just construct the portfolio and then leave it alone, ignore it. Once its constructed, once you select the investment portfolio, then you have to monitor it to make sure that what youve put on the plan is still a sound investment for employees. Mr. Field, presumably the funds that were in this plan were also used in other Retirement Plans. Is that correct . I mean, is it something that is specific to the operation of this plan or would these funds be unsuitable in your view for any other corporate plan . Well, Morgan Stanley constructed this plan, our complaint alleges, with poor to mediocre performers many of which were Morgan Stanleys own mutual funds a. Few of these proprietary funds were abysmal performers. And our complaint alleges that these were the reason that Morgan Stanley employees lost significant money in the plan. We also noticed that when we looked at the Morgan Stanley proprietary funds, many of these funds that were in the plan were charging administrative and Investment Advisory fees that were higher than what Morgan Stanley charged its outside clients for a similar Investment Strategy and like assets. Let me just ask you before we have to let you go, you can hold directors, these directors of the plans responsible or liable . Is that correct . Are you going after people individually here . We have named the directors. N this case because they were proper defendants. We examined Morgan Stanleys Retirement Plan document that they had filed with the securities and exchange commission. And that document identified the board of director i think we just lost the shot there. With charles field, are you still there . No. We have lost him. Glad the point was made. They have identified the director on the plan in the lawsuit and its just one of many as we noted. Charles field. Students heading back to school and parents are taking advantage of State Government tax holidays on many items. May seem like a good deal but data says its costing states millions of dollars. Next, coming up, is massachusetts robbing peter to pay paul . The state set to charge a 5cent tax on Ride Hailing Services and that money may or may not surprise where its going. Welcome back. We have a news alert on another sponsor severing ties with ryan lochte. Whens left . Air weave mattress ending the endorsement of ryan lochte. The company saying in a tweet after careful we ended the partnership. Were committed to supporting team usa and athletes which means lochte now lost all of his sponsors, already we have heard from speedo, ralph lauren, gentle hair removal and now airweave mattress. Gentle theres an arbitrage here. Someones going to step in, i predict a liquor company. I have never heard of one gentle hair anyway. But so on friday we were discussing this with a guest and all confidently saying, no, sponsors wont leave him. Only makes him more attractive. He is the bad boy. Boy, i mean, i couldnt have been more wrong and over the weekend everybody left him an i wonder if it does create an opening for somebody to come in or just on a different plan fret the rest of the world. We will be talking about it. The collective judgment of the world, swift, mooefsletally. It moves for a general brand, how much value . For the next year, there would be. So if im some upstart tequila brand, why not get the bad boy, you know, likes a good, fun night out . I think theres something to it. But like i said, i got this one wrong before. A taxFree Shopping holidays sounds great for shoppers. Courtney reagan has a look at the fuller impact. Courtney . Reporter hi there, kelly. So it is tax free week here in connecticut for those back to School Clothing sales under 100. Sounds like a good deal for consumers and potentially retailers but its actually a controversial political issue that many believe could be doing more harm than its doing good. So various data points say that what the real issue is, is that it shifts the timing of when back to school purchases happen. It doesnt necessarily mean consumers are using those tax savings to buy more from retailers. And also, of course, retailers will do their best to try to entice that traffic to flow around these times even though that fluctuates and local laws but it doesnt necessarily work. A report from the institute on taxation and Economic Policy also suggests that it disproportionately helps higher income earners opposed to shoppers living paycheck to paycheck. Higher income earners choose when they make the purchases, waiting until the taxfree holidays and more likely to spend more and reaping a bigger benefit. If youre not paying sales tax, the state is not collecting sales tax. Massachusetts actually decided to do away with its taxfree back to School Shopping saying it cost the state nearly 26 million last year. And the institute for taxation Economic Policy estimates that it costs all of the 17 states together around 300 million in tax revenue. So it may not help consumers that much. It may not do that much for retail earls. But it does actually seem to potentially be hurting some of the municipalities. Kelly . Unfortunately, courtney, like the latest in many ways the states or municipalities shooting themselves in the foot with the rivalry of sports stadiuming or companies and giving people tax breaks they cant afford. Is the tide turning here . I think municipalities are overstored, too. What do they have except for the opportunity for shortterm traffic and people shopping anyway for back to school seems like a misfire opposed to dead of july. Youre forgetting about the benefit. It is politicians in each state or municipality and they like to have people have a good feeling about the tax benefits they have provided. So theyre taking away reporter exactly right. Taking away from the coffers to help themselves. Are you suggesting politicians courtney, are you hearing anything there in terms of how likely i want to talk about the Stamford Shopping Center where i went to the l. A. Fitness and the cafe isnt bad. Thats beside the point. Reporter yeah. I mean, a lot shoppers we spoke to not a lot of them were aware of the tax free holiday. I was inside the marshals here and there was a woman in front of me in line and she said, the lines are long because its a taxfree week but none of the shoppers we spoke to seemed to know that. To the point about the politicians, i think its a very hard thing to pull away like massachusetts has done once youve given it to shoppers because even though its hard to quantify, there is something feelgood about feeling like, yes, i got away with not paying tax on the item. Those taxes are so high. Thats another story. Thank you so much. Good to see stamford in the mix there, too. Time now for a news update. Back to sue herera. Heres whats happening at this hour. Authorities trying to figure out who was besind a suicide bombing in turkey killing 54 people. 22 of them were children. The explosion ripping through a kurdish wedding celebration saturday night. Turkeys president initially blamed isis but the Prime Minister today says its too early to verify who was behind the blast. The new York State Gaming Commission legalizing Fantasy Sports betting, the commission issuing today temporary per fits to draft king, yahoo and draft for operations. New yorks governor signed a bill permitting it this month. Penn states former assistant football coach in court today for the second day of the appeal hearing. Jerry sandusky is fighting multiple child sex abuse convictions. He said theres errors. He is serving 30 to 60 years in prison. Theres a new study saying the southeast may see summer smog well into the fall. Researchers at the Georgia Institute of technology blaming it on Climate Change they say bringing drier, autumn weather into the region. Back to you. Thank you so much. Baton rouge residents returning to homes after floods ravaged the region. Early estimates of the damage running in the hundreds of millions of dollars. The Financial Impact of the flood is next. And its not just rain thats threatening louisiana. Public Health Officials are now warning about the spread of zika to the other gulf states and thats standing floodwater makes louisiana a prime location for mosquitos. Anthony fauci joins us with his take coming up. Well be right back. Hey, its been crazy with school being back so were constantly going over our data limit. Oh, well, now all of our new plans come with no data overages. Wow, no more overages . So that means. Go on. Say it. Well finally be in control. And were back. Introducing new at t plans with no data overage charges. Welcome back. We start here with a market flash on that blow software. Viz shl Analytics Firm appointed Adam Selipsky effective september 16. He built amazon web services, the cloud product. Christian chablot will be the chairman of tableau. Kelly . Yeah. Cant hurt to take someone from amazon web services. Interesting development there. Thank you. The shares spiking on the news. President obama set to visit baton rouge, louisiana, tomorrow to survey the flood damage. With more than 100,000 people registering for assistance with fema so far. Morgan brennan has the potential economics of this flood. Morgan . Hey, kelly. Is been just over a week since entire neighborhoods were submerged in the baton rouge and lafayette areas. Historic flooding labeled the worst since 2012 Superstorm Sandy. Tens of thousands are displaced. Some areas still underwater and it will take weeks to fully assess the impact. Roughly 60,700 homes sustained damage. 106,000 people filed for federal assistance and more than 25,000 have filed for Flood Insurance claims. Many properties were not in highrisk zones and therefore Flood Insurance wasnt required and fema underwriting 95 of the Flood Insurance market, less than 15 residents in the areas actually had that kind of coverage. So fema announcing today its extending the grace period to renew insurance policies in the 20 parishes that experienced this flooding, even so, there will be many folks with no coverage, still. The cap for a fema grant is 33,000. The average payout, however, we have seen it with other natural disasters, likely much lower than that. Payouts of Superstorm Sandy 8,000. For hurricane katrina, much less than that. Right now, 55 million is authorized for fema assistance and if you figure 106,000 people filed claims, thiss less than 1,000 per person based on that number as of today. That wont go terribly far. Thank you so much. Another new risk to l la could be the spread of zika. Lets bring in dr. Anthony fauci. Doctor, thank you for joining us. How disturbed are you by the potential of zika to spread in the flood areas . Well, thats always a possibility of that happening. The gulf coast states, all of them, are vulnerable because of a variety of reasons, mostly the semitropical conditions, weather conditions, that you have there and the difficulty in controlling the mosquito populations. Its not during the flood that the mosquitos flourish. You get rid of them during the flood and when the flood recedes and you have standing water that you have a lot of activity because thats where they lay their eggs and get the larva and then adults. So there has to be particular attention paid to that entire area of the gulf coast and already seeing the situation in florida with individual cases of local transmission and even some clusters. We hope we dont see that in any other gulf coast states but they indeed are vuler in wbl the location and the weather. What would your advice be to people in louisiana just to start with that area . Whether its the people in these communities or the administrators involved, what should they be doing . Well, right now the most important thing is to help the people who are suffering from the flood. I think the flood and its aftermath is really the most important issue. And thats the reason why were seeing a lot of activity, the president going down there. Fema getting involved and all the other things going on to help these people. After that, obviously, youre going to have to be concerned about what some of the aftereffects would be. One is Mosquito Control issue and dealing with places on the gulf coast not necessarily hit by floods, Mosquito Control is the most important thing you can do to prevent outbreaks of zika. Dr. Fauci, there was an idea that the zika disease was contained almost to individual neighborhoods in miami. Should we have any confidence that that will continue to be the case . Ie, is there any reason not to expect the mosquitos to spread basically throughout the u. S. At large at this point . Well, again, be careful with saying mosquito spreads. They dont travel very far. There are mosquitos throughout the country. There theyre more densely seen in the southern areas particularly the gulf coast. The reason were seeing the situation in florida is related to what we call travel related cases. We have about 2,000 people in the United States, about 500 of them are in florida who got infected elsewhere and then came back or came to the United States for the first time. And then since you have the mosquitos here that are already here diffusely spread in many areas of the country, a mosquito can bite someone with a travel related case and then bite someone who never left the continental United States and thats when you get what we have been referring to as locally transmitted cases. We now have 36 local transmitted cases in florida, two areas in the wynwood area and miami beach area. There have been what we call clusters of cases. The Florida Health authority togethers with the cdc collaborators with them trying very hard to have an aggressive Mosquito Control situation so that they can put a damper on that and prevent it from getting further or getting worse. I know that authorities, yourselves and others trying not to alarm people and along the way we heard its wynwood and this area and that but isnt the risk that alarm will grow if people feel like its spreading in a way i wasnt warned about and seems important to take the pulse of this saying, actually, how likely is it that it continues to transmit including in states like texas . Well, it is i wouldnt be surprised at all. You cant give a statistical value of how likely it is. I would not be surprised at all if we saw individual cases and perhaps even some clusters arise in other areas of florida as well as in other of the gulf coast states including texas as you mentioned. Certain sli that possibility and that would not surprise us because the conditions are there for that to happen. And thats the reason why the important immediate issue this needs to be done is good Mosquito Control. All right. Dr. Anthony fauci, thank you for joining us. Good to be with you. We have talked about the restaurant recession. We may have the car collector recession on the hands, too. Numbers are in and appears buyers put the brakes on at the big ticket california car auctions. D tails just ahead. Disrupters may be on the verge of being disrupted. Two Ride Sharing Services may find each other supporting the big yellow taxis. Well explain next. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. [indistinct conversations] man looking for these . You drive buzzed, it could be one very expensive ride. First you got to make bail. Then pay me to get your car back. Your insurance premiums will go through the roof. And my legal fees just keep adding up. All told, it could end up costing you 10,000. [siren in distance] announcer buzzed, busted, and broke. Because buzzed driving is drunk driving. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back. No one could accuse of uber or lyft of helping the taxi cab industry but that might change in massachusetts. Aditi roy has the story. Massachusetts is ready to implement a law of charging a 20cent fee every time they pick up a passenger and part of that money will go towards the taxi industry. Its part of a new law the state passed regulating the industry and heres how it breaks down. Five cents to taxi cabs. Ten cents for cities and towns and the last nickel will be in a state transportation fund. Together the two largest Ride Share Companies pick up 2. 5 million passengers a month in massachusetts. In a statement to cnbc, a lyft spokesperson says while the new law is not perfect, we were pleased that state officials came to an agreement that sets high standards while keeping modern Transportation Options like lyft available across the bay state. Uber released a similarly positive statement after the bill was signed by the governor saying the law creates, quote, a frame work that embraces an innovative industry. The surcharge will go away at the end of 2026. Under the law the Ride Share Companies cannot pass along the fee to the riders. Thank you. A lot to unpack and feels like a more obvious representation of a lot of industries anyway. They start up, eventually they get taxed, taxes subsidize the existing players. Correct . It is definitely correct and doesnt seem like its at a scale of tax thats going to really restrict the growth of the new category very much. So, therefore, just create more revenue and maybe going to arguably a less efficient industry. Nobody draws it up this way from an economics point of view but its cost of gaining scale and a threat. You could argue if you said to uber and lyft, they have had issues in the past, people saying you cant pick up disabled passengers, theres difficulty in neighborhoods, the tax to support the work of the taxi fleet that does do the activities and so well let you all participate without requiring you to fall under regulations, thiss a way they might say, you know, this is worth it. I think theyre looking at the price. 500,000 a month right now based on the 2. 5 million riders. Thats a price worth paying. Legitimizes the stay in the state, makes them more attractive option for the politicians to keep them in business with a tax and i bet you that tax is not going away in 2026. In fact, ill butt you it is going up and municipalities and states around the country and the world are thinking similar thoughts. Looking at them, thinking great idea. I have relatives saying they said they would stop charging a toll on the triborough bridge. I guess riders see the charge and not supposed to get it passed on to them. A beautiful sort of slight of hand there. Of course its theyre going to pay for it one form or the other. Its all fungible. Everyone can claim victory. A sbln interesting way to coe it with china. Didi was in the taxi fleet and the u. S. , here in new york, you can use arrow which you can punch in a little code if you get the app and kind of pay and not have to do it all at the end but if uber or lyft extend the services to the taxi fleet, is that totally unheard of . If you think about how inefficient the taxi fleet is . People standing on the corner waiting for a cab to show up. Makes total sense. I would say within three years, every taxi is quote unquote uber or lyft car. I have had to chase uber around more than a taxi half the time. You hear about how the map is not telling you where it is. The map is so bad on uber. The guy, he takes the gps. Im here and running and i was in the pouring rain last week. Theres a crazy thing of the yellow cab and the lights on. Ill take it. I know. Never happens when you want it to. Anyway, investing is not always a slam dunk but kobe bryant trying to change that. Just two months after his retirement, the nba superstars making a big move in the Venture Capital world. This story is ahead. An auction with the super bowl apparently of highend collectible cars saw a potential buy earls put on the brakes over the weekend. Well explain what happened in pebble beach next. Before taking his team to state for the first time. Gilman go get it, marcus. Go get it. Coach gilman used his cash rewards credit card from bank of america to earn 1 cash back everywhere, every time. At places like the batting cages. [ crowd cheers ] 2 back at Grocery Stores and now at wholesale clubs. And 3 back on gas. Which helped him give his players something extra. The cash rewards credit card from bank of america. More cash back for the things you buy most. Last friday as you may recall, robert frank previewed one of the best known car auctions in the world, but the event was not exactly a blow skro out. Hes here onset. Great to have you in the building. What did you learn from this august . The car market is coasting downhill. It hasnt screeched to a halt, but were not seeing the incredible growth that we had in 2014. This is a good barometer. 719 cars sold for a total of 345 million. That is down from last year hes 396. This is a key figure. Only 56 of the cars up for auctionhes 396. This is a key figure. Only 56 of the cars up for auctiones 396. This is a key figure. Only 56 of the cars up for auctions 396. This is a key figure. Only 56 of the cars up for auction actually sold. Bo bottom and middle is weakest. Top quality masterpieces remain strong with seven cars selling for 10 million or more. Most expensive was this 1955 jaguar d type roadster for 21. 8 million. That was also the most expensive british car. Close behind was this 1939 alpha romeo for 18. 5 million. This car just became the most expensive american car ever sold, the cobra. That sold for 13. 5 million. Now, sales of younger cars, the 1990s and later, those were especially weak but the red ferrari sold for 3. 6 million and black one which we will show in a second sold for 5. 2 million. More than three times the original retail price of just two years ago. Wow. I mean, i dont get the whole car buying thing, period. But it is clearly a proxy for the way in which the wealthy are spending their money or not right now. And were really in a mild spending recession at the top if you look at high end real estate, cars, art. You look at swiss watches. Especially, and this is rare, but especially in all these markets, the very top of the top. The higher you go, the weaker the markets. And i just think its nervousness, anxiety, its not lack of money that the wealthy arent spending right now. Just confidence. Ill put you on the spot. If you had to buy a car today, 2016 car today, wrap it in plastic and put it away for 20 years, what would you get . It would probably be the most expensive Rare Limited Edition ferrari. Unfortunately. The more you spend, the more it will be worth later. Last week you were previewing the possibility that these very recent model cars might actually fetch a high price. Was it that just excess enthusiasm . It ended up being excess capacity. There were great runups in prices and as a result a lot of people dumped their cars on the market. So i love those cars from the 90s because when i grew up, those were the cars i worship worshipeded in tworshiped in the movies. It has such a high carrying cost. You have to have a good mechanic friend. Exactly. Fascinating. Robert, thank you so much. So much for retirement. Just two months after hanging his sneakers up for good, kobe bryant is going back to work in a different uniform. Find out what the nba legend is up to next. And the new series adVenture Capitalists premieres tonight at 10 00 p. M. Dont miss it. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade when a moment spontaneously turns romantic, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. Women welcome back. Company bring bryant stopped by to ring the opening bell in celebration of his new Venture Capital firm. Hes ready for the next chapter. Ness to what he had to say when Carl Quintanilla asked what he wanted to be known for 20 years from now. Investing. Playing basketball, the focus is always on winning. Winning championships, winning championships, winning championships. Championships come and go. There will be another player that wins another mvp award. But if you really want to create something that lasts generations, you have to help inspire the next generation. And they create something great and then that generation will inspire the one behind them. Thats when you create something forever and thats what is most beautiful. Dennis, you spoke with him and his partner who apparently are seeding the whole 100 million fund themselves . They are. They dont want to take outside money. They said we have to earn it first before we even do that. I think that is a sensible thing. They have to sort of prove themselves in the world. Which is hard. I know that its an exciting thing to be involved in a lot of these startups, but its incredibly difficult to identify companies that are actually going to give you a return high enough to justify the investment. This is not an unexplored territory obviously. I guess if youre applying your own personal network, if youre kobe bryant, you can theoretically pull in promising prospects out there. But i did joke earlier that they are in one area that seems like its against the crowd which is most vcs are Golden State Warriors fans. So they have the lakers backers locked up. I did speak to a few vcs and asked the same question, are they legit, can they be taken seriously by prurentrepreneurs the response was, yes, more than you think. Because theyre respected for their dedication, hard work. What about his partner . Jeff has been involved in a number of entrepreneurial adventures. One became a unit of dunn bradstreet. Hes done a lot of things around web. Com if you remember those properties. So he has some experience. Hes quite legit. Whether celebrity and he sort of make a mark in vc, i dont know. But i love the fact that they both the super injured their feet, they bonded over that. And of course jeff is about a foot shorter. That was apparent at the opening bhel, but ell, but he h own in the interview. And maybe they will get a first look at some kind of products, but its a tough business. For kobe, you just want do something because youre an endorser . Thats not fun. I think its fantastic. It would be great to see them do well. Kobe bryant launching a 100 million Venture Capitalist firm. Dennis, mike, thank you so much for joining us. That does it for us. Fast money is back and it begins right now. Oh, yeah, we are back. It has been two weeks since fast money was on the air due to olympics coverage and weve missed you. To celebrate, we have a big show lined up for you. So lets get right to it. Fast money starts right now. Im melissa lee. We have your traders on the desk. Tonight on fast, oil getting its worst day since august first. The perfect storm may be brewing. And plus a developing story were following this it hour. Senator Chuck Grassley on mylan epi pen cost increase sending that stock sliding. Were al over the or