Transcripts For CNBC Closing Bell 20170530

Fueled a huge rally in financials much earlier, but sectors been underperforming since being in office. Do you doubt the banks Going Forward . Its been a rough week for oil prices, and goldman cults the outlook for crude. Where do go from here and which names you buy and sell in the energy space. Closing Bell Exchange on a tuesday, shall we . Joining us here to kick it off, greg from hightower, managing director there, keith from post nine, and Rick Santelli at the cme for us as well. I want to start with choppy action in the markets today after significant close to the s p 500. Is it are we just digesting that move . Well, we are digesting that move, and, frankly, i dont see anything thats a real catalyst to break the market out to the upside or really bring it down in any kind of correction mode at this point in time where what weve been seeing the last several sessions is the market flat lined, moved sideways, and the russell has been between 137080 since february, since the middle of member. Thats troubling in that we know what that the technical indicators, fundamental aspects of the market that we get, macro data, strength in europe, Monetary Policy progressing along. Theres a cross current of information coming in from allowing the market from moving one way or the other. Whats more troubling inside the market about being able to break out is the fact that most of the move in the major indexes this year is really incured from facebook, amazon, apple, alphabet, and microsoft. When you consider that, we need to keep the rally to keep moving, and if not, we have a temperamental market and subject to wild moves if the five stocks are hit. All right. Before we go to greg and rick, we want to talk about the five stocks, amazon, bertha is watching that up at the nasdaq. Crossed the 1,000 mark earlier. It did, mike. Topping 1,000 this morning. Less than two months after just passing 900 a share. Its really just one more of that faang movement we are seeing, and theres another number too, alphabet within 3 for an alltime high. Microsoft, though, not seeing the high this afternoon. Its all about big cap tech. Nvidia, a soft bank could raise the stake in the stock along with the new research and other big names pushing the Semiconductor Index to a 17 hea17year high, and its making this the best gainer in the market. Active Fund Managers have been riding the gains to outperformances later, and they find that active Fund Managers are now 24 overweight in large megacap tech. Thats the most theyve been since 2008. As far as the nasdaq this month, the big three contributors have really been apple, amazon, and nvidia, and the nasdaq 100 today, guys, at a fresh record high, a sevenmonth winning streak, longest in 18 years. Kelly . Thank you. Lets get back to the panel. Greg, you know, i was going to ask you about cash reform, but responding to the idea that tech is the love, the darling, the leader of this market, and whether people should, you know, need that to continue. Its a great question, kelly, and i think investors need to be proactive here because such dominance in one sector probably is not a healthy trend. I think stocks like amazon, alphabet, all the tech names represent tremendous dipping stocks right now, whether its deductions on fair market value, use the cash you give away to diversify somewhere else or loved ones you support, embedded stocks to them, lower tax bracket, they likely have a much less Capital Gains tax liability. Greg, i wonder in terms where you look to rediversify. The tech is stealing the attention and certainly has the greatest gains, i think five of the 11 s p sectors outperform this year. Just been a split market, so i wonder if you are looking for the laggards, and if so, which ones . I say where wed be looking a really abroad. You know, look at what the International Market has done this year, outpacing the s p 500. Emerging markets trade valuations, still below the 25 year level, and those entities did little over the last five years. We believe thats outperforming with the international stocks, really in the early stages. All right. Speaking of overseas, rick, some conflicting signs from the ecb, i guess, over the last couple days. Over the weekend, you had mario draghi talking about the need to ease to support europes recovery, but there was a story earlier there needs to be tightening maybe next week, so its pushing the currency around, hasnt it . Well, yes, and i think that mario draghi stretched the definition of what would be considered a good economy, you know. The fact that he needs so much stimulus and calls it a recovery, most of the analysts on cnbc are recommending europe as the dominant investment choice for 2017. Of course, as a matter of fact, you hit on something that i think is very important. I think one thing that actually can damage the equity market is the perception by the markets that weakness globally, and i think thats, of course, coming in the form of lower rates. Well, look up at the board, 221. 10. Its not that much different than fridays close, four basis points, but an important four basis points. This is in the 18th of april, we had 217 close, this was the low of the year. The bunds closed 29, the lowest close since the 21st of april. We have these april comps contrasting with all the sideways to upward activity, specifically nasdaq and upside of equities. I continue to think theres an intersection thats going to be in front of the market at some point, age i think we continue to watch Interest Rates, which, by the way, were not the first to go in this direction. The dollar index really led the way. For sure, rick, and, actually, just to follow on that, in terms of the u. S. Data today, pretty much personal income and spending ads expected, but, again, that inflation measure, the pce, not able to sustain anything like it, 2 number, so maybe the bond markets looking at that . Well, could be looking at that, youre right. Could be spending reaching four tenths, not bad numbers, and look at the personal consumption expenditu expenditure, 1. 5 area, thats right. Whats not right is the fact that the fed is so sour on 2 . Thats an arbitrary number. To me, when the history is written, the global Central Banks are doing a boat load of financial damage to reach a level of inflation thats arbitrary relative to growth. And, keith, anything youd add to that in terms of, you know, investors watch for clues about fed policy and ecb policy . Rick makes an excellent point as he does with rates and bonds. Look at the tenyear yield, market signals we dont believe the growth story everybodys trying to espouse out there, the ecb, the european, and getting here in the home country, relating to the equity market, thats going to at the very best, make this market continue to go sideways and at the worst could make it hinge on data points that are coming out after the fed makes an announcement on 214, likely another 25 basis points, where the rubber meets the road, and the economy has to perform. The market is unsure it will actually do that. Quickly, too, greg, i wanted to ask briefly about tax reform that the president pushed again for this morning. Is that going to be the gotten goose for the market . It could or couldnt be, kelly, because thats been such a supportive element of this market gain over the last six months, and if we dont get it this year, that could be a real void of confidence to the market, and, also, investors have to look carefully at the last it ration of tax reform as the personal level. Move to income taxes in deduction is significant because that takes stimulus out of the economy because theres not a significant benefit to high income wage earners when the rates are reduced, but you remove the significant tax deduction. Its almost a neutral in terms of this perspective. All right. Everybody, thank you for joining us to kick it off this hour, greg, keith, and rick. 50 minutes to go, dow down 30 points, transports are positive. Look at the russell, though, down eight points, laggard on the session. Has been for a while, absolutely. Antigovernment protests in venezuela turn ugly, Goldman Sachs is under fire for buying stocks at a huge discounts and whether they are putting profit before ethics next. Uncertainty about the president s trade policy is not helping u. S. Businesses. The merits of the hot button argument coming up. Youre watching cnbc, first in business word wide. Look at shares, telecom leading the way, at t and verizon higher, 2 in that case, upgraded from neutral to sell. The firm says everyone one of at ts Major Business segments is contracting and continues to prefer them over verizon and other metrics. It cut verizons price target to 50 today from 56. Trading there about 46. Goldman saks is down more than 2 today after the new investment in venezuela bonds bought out critics in force. 2. 8 billion dollars in bonds, and the economys economy continues to unravel with demonstrations in the capital dai daily demanding the ousting of the president. Why is investing in venezuela, and more important, should it be . To answer the questions, our senior fellow at demos, author of several books, and steve, senior fellow at cato and former adviser to a former venezuelan president. Thank you for being here. If you can start us here, look, somebodys going to own the bonds. Theyve been issued, out there in the market, and why is it a problem if Goldman Sachs came in to pay the market price for them . Well, its arguable they did not pay the market price, that they negotiated better prices or bought on the secondary market. The reason its a problem is because they have the responsibility as the institution it is to also move politics, move dthe conversatio, stack the way in which the economics are reported as well as to get a very good deal in situation, which venezuelan people are are getting killed, are starving, and theres been tremendous social and civil and political unrest. It is an on tunis tick bet. Can they do it . Yes. Should they be doing it at this particular time . No. Steve, this is an investment they are not alope in making, but they make better headlines. Theres fidelity, blackrock, pimco, and are you telling is the message that no u. S. Investor should own any of this debt . Well, i think any investor should be free to invest in whatever they want to invest in, and they should face the consequences both financial and in terms of their reputation capital that are associated with those trades. Thats it. And in this case, goldman is suffering. They did not manage their reputation risk in a prudent way. They did not think it through. It was the stupid trade from that point of view. Yeah. One second, lets get the facts about this out there according to the story. The government was under duress to raise cash because reserves were dwindling, so whoever the investors are were able to pick up the bonds fcents on the dollar, and some improves, and what they are going for, and so thats been played in a number of political outcomes from a change of regimes, so its not ruling out. Why is it taking the time they are supporting this little regime . Well, its not exactly clear the details of the transaction. I mean, they did not actually buy these bonds from the central bank per se and fork over the cash directly to the venezuelan government. They bought the bonds on the secondary market, and, by the way, they did get a good deal. They paid 31 cents on the dollar, and moodys did a study in 2010 of all of sovereigns that had defaulted between 1994 and 2010, and they averaged a rate of 31 cents on the dollar for defaulted bonds, so in a sense they bought these bonds that the average default rate already. They bought them, really it was a fire sale. Its as if the bonds had already been defaulted on when they bought them. So what would be preferable about the potential outcomes if Goldman Sachs and other institutions essentially said, no, were not willing to put up our capital to buy these bonds . Do you think it would hasten the demise of the regime there or somehow reprioritize their spending and not service the debt and maybe essentially feed the people of venezuela . I think its im sorry yeah. I think, first of all, its not entirely correct to say that they are supporting the regime in particular. They are supporting the bet that whatever happens, and i believe they are supporting the bet that the regime falls apart, which is no what they were not necessarily talking about that story, but if something occurs, the regime currently attacking Goldman Sachs is the current regime, but the regime that w t wants to come in, so the other side, the Opposition Party the one is attacking, i believe this bet is about the Opposition Party actually coming in. Its not similar to bets goldman made in brazil when the regime came out last year, and the new regime came in, that did not necessarily help the people of brazil anymore than the prior regime there. The bet is simply that, things will change. If they change because of political regime change, which i believe is what gold man ismanning on, if you leek at the photos and where oil prices are, it is not improving today, but there could be a bump in the value of the bonds if there is a more funtmental opposition coming in, which, i believe is what they are betting on. Thats where it becomes more of a cynical and more of a you know, more of a wrong form of bet right now because they are effectively pushing geopolitics at the expense of people, not just providing cash into the set of Central Banks right now, is at an alltime low. Steve, your thoughts . Well, i think whether they bought them or didnt buy them is essentially irrelevant. They are on the secondary market. Somebodys going to own them, and whether goldman owns them or anyone else, doesnt make any difference. I just dont buy the massive geopolitical story. In fact, it looks like theyve goldman, that is, is so annoyed, the opposition, that the opposition claims now that they are going to default on these bonds if the opposition gets in power, but now, that, again, is the stupid thing on the part of the opposition. It shows how incompetent they are, and they dont understand how the world works and how Financial Markets work. You just dont decide arbitrarily you default on one bond. It sets off a cascade of problems for venezuela and any new government that would becoming into power, so theres a lot of noise around this more than anything else. All right. Guys, thank you. Goldman shares down 2 today. Appreciate it. Thank you. About 40 minutes before the bell. Dow and S P Still Holding to the relati relatively small gains, another day, narrow day trading to the s p 500, down less of one tenth of 1 . Nasdaq down the same now. Russells small caps sitting out. They are. By the way, its not just goldman lower today. The rest of the Financial Sector is down with it. You can see some of the most held names this. Stick around for the bullbear debate on whether investors should buy the dips in this once red hot industry coming up. Tech glitches confront a major restaurant chain and international airline. What you need to know about that coming up. Cnbc sector sort is sponsored by hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley going into the last half hour of trading, slight losses on the major indexes, and big cap index is slightly green, but you see indexes sitting on a small decline. Checking out the Market Movers today. Lower, Pacific Press downgrading the chip makers, sector weight from overweight to underweight and the largest company, cji, may use a reeves video proce process processor. Shares down 7 . Goldman sachs downgraded from neutral, and goldman says hess has less attractive profile now compared to ease, shares down less than 3 . 35 minutes before the bell, you see the dow and the s p dow down 40 points, still, telecom is up, and banks and energy down. Feels to me the most defensive three stocks, first of all, and we got upgrades on two of the biggest. True. I think thats what see there. True. Considering eliminating the telecom sector. You said that. Its a narrow one, but coming up, sigh of relief or pain in the neck . The latest on the u. S. Government decision about whether laptoping should be banned from cabins on flights between the u. S. And europe. A a former ceo calls uncertainty resulting from the president s trade policyings and whether u. S. Companies are left in limbo. Stay with us. Say carl, we have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh. And i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. I count on my dell small for tech advice. With one phone call, i get products that suit my needs and i get back to business. 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Heres another mover for you today, perrigo down 3 after rbc capital said its highly exposed to new approvals and downward pricing pressures. They are saying it could result from the new fdas commissioner to crackdown on high drug prices. They have a sector perform rating on the stock, down 3 , mike. Kelly, thank you very much. Half hour to go in trading day, steve grasso, and broker, you know, in your notes, steve, you said something about institutional climates all day, nobody can come up with an idea whether markets should be down significantly. Thats why we sit here . I think it is. Youve been in the business as long as i have been in the business, and reporting on it, and its usually the story that no one can think of that sends the market off the cliff, but we know the last couple weeks when you heard President Trump negative headlines, russia, impeachment, that seems to be the only thing that the market didnt shrug off for 24 hours. But then if you think about it, he left the country. Sure. So i think it got off the headlines, off the front page, lets people start to analyze and see what impeachment really means, and maybe cool our heads and prevail. It seems to me that we have eight years of a certain market. People still catching up. Maybe just the lack of new regulation is enough to give corporations a little more vb visibility how to invest. The s p is no mans land here. How do you trade off the technicals when never been here before . Exactly. Seems money is not looking for urgent reasons to leave the market, but just sliding around the sectors rorotating. Theres other pockets working to it, hotel stocks, utilitieutili cetera. Sure. Look at the ewe till tilutiu. Its hyperactive on m a. Sure. A caveat looking in the space of the reit not so great, but facilities could pass on higher rates to the people who use their products. I dont know that the rotation is in financials and energy. Its going to happen any time soon. Yeah. I think youre better off playing winners, trialing as they go off, thats the responsible tiehing to do. Appreciate it. Thank you, guys, time for a news update with sue. Sue . Hi, kelly, hi issue everybody. This is whats happening at this hour. Senator sanders delivering the commencement speech at Brooklyn College urging students to fight back if they dont like the state of current events. You do not have the moral right to turn your back on saving this planet and saving future generations. Stand up and fight back, reclaim american democracy, and create a government that works for all of us, not just the 1 . Chipotle providing information about a Security Card breach there in april. Malware stole payment data from restaurants over a threeweek period. They still dont know how many cards or customers were affected. Trout, American League mvp is out of action for six to eight weeks recovering from surgery to repair his left thumb. You see him there, tearing a ligament sunday night in miami sliding into second base. have the surgery tomorrow. We wish him the best of luck. Thats the news update this hour. Back to you. I had a hand injury of my own last night. I thought of you. Uhoh. Cut myself cooking with garlic. Oh, ouch. Are you okay . Yours was bad, though, right . Youre okay . It stopped after awhile. Dont opt for surgery and take six weeks off. I know, exactly. Feel better, kelly. Like i said, this is nothing compared to you as well. That looks bad. Yeah. Yeah. I mean, now the mvp race is more wide open. Three times in the last couple years. Crazy. See you sue, in an hour. Conference in portugal yesterday, a former ceo voiced concern about u. S. Companies confusion over trade policies. Right now in america we dont know what the rules of the game are. They are changing constantly. How can Companies Navigate the landscape . Guys, welcome to you both. Michael, first, listen, companies have to deal with uncertainty. Do you think because trumps policies are different from president obama that all the sudden Companies Feel less thought about what the rules of the game are, and as he put it, who are our friends, allies, who are we doing business with . Sure. The big problem is in balances, trade and balances right now. Trump is looking to correct them, but they have not been any rule changes now to create uncertainty, and Companies Like hasbro, have offshore virtually all employment to other countries like china, are not companies we should be listening to to rebuild american production and good paying jobs in the u. S. Wait, so your point is because hasbros dont take what he says to heart . Right. The trade policies passed under obama, clinton, and bush put the thumb on the scale towards the imimportanters, and those that offshore, so we got results in the massive trade deficit. We have to reverse policies. They have not been changed yet, but we have to be listening to companies that want to build more production in the u. S. , and to employ American Workers so we can produce more of what we consume. Thats how we rebalance and grow america. Daniel, i guess, even it was that something a given ceo was interested in doing, we are waiting on potential changes, not just on trade agreements, but on rules for capital invesmeninves me investments, and is that the open issues that has companies wondering what to do next . The hasbro executive is correct. The trade policies of the Trump Administration hang like a dark cloud over the u. S. Economy and u. S. Businesses. This administration has threatened to rip up trade agreements, walk away from the trade organization. These are rules the United States designed to protect u. S. Companies as exporters and investors. If we get involved in trade wars with our main trading partners, u. S. Companies are going to lose as exporters because other companies are going to retaliate if we retaliate from the lose and lose as producers. You know, more than half of what we import to the United States are not consumer goods. They are stuff imported by u. S. Businesses, raw materials, intermediate components, capital machinery, embedded in Global Supply chains. This disrupts train, u. S. Companies will be less deducted, more difficult to raise our productivity, and meet the president s goals of increases our Overall Economic growth. So, daniel, is the way daniel put it, michael, as though hes saying, you know, u. S. Companies are upset that trump is, you know, that the policy team is designed to be against globalization, but that sounds like something you actually would support, is that right . This idea yeah that you want to put u. S. Companies and u. S. Workers first, and if thats the case, does that just need to be made more clear so that businesses can adjust . Because it sounds like they are sort of lost here trying to figure out exactly what to prioritize. Sure. I dont think none of my members are lost. We have the issue is the global imbalances. We have a persistence surplus companies with undervalued currencies as well as they have a strategic agenda that they overproduce, underconsume and rely on the u. S. Consumer to grow. Thats china, japan, south korea, germany, taiwan, and a few others. So the imbalance and the we overconsume and under produce, as a result, they under consume, and the balance is the issue, and trade balance has been a long standing banker in the international rules, the treaty and european union, we lost sight of that, and to pivot back to the initial balance, its not a trade or no trade issue. Thats a canard. Its not a Global Supply chains issue. Its a matter of making it more than just producing more in america, whether its components, consumer goods, or something else. Thats what the new Trump Administrations looking to do. So my members are happy about it. So, daniel, finally, if thats the case, then, you know, is that the whole story for u. S. Businesses, who have been used to maybe a more globalized world, but if this is the desire out of washington, should they accommodate that . Well, if were worried about the trade deficit, the problem is right here at home. We dont save enough as a society, starting with the federal government, which this administration wants to increase deficit spenting, which is actually going to contribute to the trade deficit, but i think we should look at the flip side of the trade deficit, a capital inflow. The president criticized jem ed germany. Germanys a huge investor in the United States, 700,000 americans work for germanowned affiliates in the United States like bmw, m mercedes, volkswagen, the bmw plant in South Carolina is the number one automotive exporter in the United States. If we somehow could reduce the u. S. Trade deficit, that means fewer funds flowing into the United States to invest in u. S. Companies, which creates some of the best paying jobs here in the United States. Okay. Yeah, that would be a good thing two sides to every point. We have to go, but that sums up the tension that companies are feeling, the tugofwar, if you would. Thank you for joining us. Thank you. Thank you. Thanks for the time. 20 minutes left before the bell. You see the dow still down about 40 points. Goldman sachs heavy weight on the dow, s p 500 under the flat line, down less tan two points. Airline troubles are not limited to the usa. British airway with the mother of all computer glitches over the Holiday Weekend. What it means for your flight, bags, and airline stocks. Count l business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. I count on my dell small for tech advice. With one phone call, i get products that suit my needs and i get back to business. To ban or not to ban is the question surrounding laptops in air travel today amidst conflicting reports, phil lebeau has more. Sort out cop fusion for us. Right. Theres a report from washington that the department of Homeland Security had decided that it will not be implementing a ban on Laptop Computers on flights over to europe or International Flight overall. Well, a short time later when we reached out to the department of Homeland Security, a producer did in washington, they said, oh, no, no, no, no, thats not the story. The story is that we have not decided to implement it for now. It is still very much an option. They are still discussing it. Especially as they get back the latest intelligence from various agencies around the world. The bottom line is this, guys, you heard the commentary from the secretary of Homeland Security yesterday on the sunday morning talk shows. They are seeing an increased threat to commercial aviation worldwide. Its a matter of how do they respond to it. I would not be surprised if we see some type of laptop ban at some point in the future. When remains to be seen. Another blow to british airways, i would imagine, phil. By the way, a disruption saturday morning, saying it was a power failure, but feels as they struggle to clean it up, theres conspiracy theories on what happened in the first place. Dont listen to the theories. This is whats going on in the Airline Industry. What happened according to you, phil . A lot more fun to listen to those, i know, i know, but the bottom line is this, whenever the airlines encounter an i. T. Issue, when it happens in most other companies, they can say, okay, whats going on here. If theres part of the business that goes down, a lot of the public doesnt realize it. They dont have that luxury in the Airline Industry. They immediately default to the safest option which is were not taking off with a potential problem that could lead to being that our system was hacked, or that other issues that could contribute to an unsafe situation, so they kind of back down as quickly as possible, and in this case, it was a series of power sunrges hitting a series f systems for british airways. People say thats suspicious. Shortly after the terrorist attack in manchester, how do we know they were not hacked . To our knowledge, based on reporting coming out of europe and also when you talk to people in the Airline Industry, theres no indication that they had been hacked. Having said that, guys, i understand the frustration of travelers. Ive been involved in some of these where youre about to take off, and, boom, they said the network is down. Its one of the problems that the Airline Industry is going to have to overcome. Yeah. I mean, it seems obvious, phil, the infrastructure across the board, technical, aircraft, everything, is just being used almost to the limit. Also, others are doing fine. Michael leary today on squawk box talking about how they are continuing to grow and that they believe they are making the right investment. The one thing i caution by everybody in the industry, you rarely hear somebody twirling about another airline having the problems because its one of those, okay, maybe im going to be next. I seriously believe that most of the Airline Industry looks around and say, we think we have our systems in place that were ready to handle a bad situation, but then something comes up. I can understand. Phil, thank you very much. You bet. Clearing things up for us. Phil lebeau. Less than 15 minutes to go here, dow looking at a decline of 38 points. S p down a point and a half, but still trading at 2814, and nasdaq down three, russells down nine. 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What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance welcome back. Arthur walked by here to say it was 350 on the close, not helping the negative pressure seen all day. But still milestones throughout the pullback. True. Financials led early this year, but the rally faded with the banks now the worst performing sectors. Is there room to buy . Large Cap Financial Fund and howard mason, guys, thank you for being here. Howard, start with you. You know, there was a multitude of reasons that people decide they like the banks six to eight months ago whether it was Interest Rates set to rise, deregulation, potentially they were cheap and under owned group to return more capital. How many are still in tact, have they geone away . Whats the sector assessing the stocks at . Thank you for having me on. Following the election, there was a feeling wed have more accommodating policy and regulation environment. To some extent what i see as i talk to investors, the reviews are being revised. One tell for that is the yield on the tenyear treasury, above 260 now. Issues are broader than that. If you think about how banks make money, revenues and net income, youre see slow down in loan growth, and short rates rise, banks give some of the benefits to customers, and, of course, credit is a big issue. Yeah. Weve seen early indicators of credit policy beginning to deteriorate a little bit. So youre cautious on the banks, but, david, youre bullish, especially on the biggest money Central Banks. Why . Well, i think as said, you went from all the good news, and now you currently have all the bad news, and the stocks, you know, reflected the good news three months ago, and reflect a lot of the bad news, so the truth is somewhere in the middle. Most of the big banks earn tons of money, plenty of opportunity to recon figure their business, cost costs, and and go on to electronic platforms, so if you look out, you know, the next, two, three, five years, theres better earnings, better Balance Sheets, and the ccard comes out to give us a measure on dividends and buybacks, so i think youre seeing the reverse of what you saw after the election, and, again, the truth is somewhere in the middle, and thats the opportunity. Howard, i mean, if you look at the very largest banks, they dont necessarily seem to be pricing in a wonderful future, right . Bank of america, trading similar in the vicinity of book value, right . What do you think now the market is discounting in terms of longer term potentials how businesses can earn a decent return . Well, its interesting, mike. Theres quite a valuation between the valuation of the large banks. I use the ratio of the market caps to tangible book value. In the case of bank america, its 1. 2. You know, jpmorgan close to 1. 5. And so you have to try to make a decision about what you think the long run returns on these banks can generate, and so for me, i look at jpmorgan, 13 return on equity, they want it higher at 15 , but i dont know 13 commands more than 1. 5 times price ratio. David, last word to respond to that. I think howards right about what we see today. The question is, what can they turn into the next five, ten years, and i think weve got, again, these piles of assets, piles of liabilities, all needs to be restructured under this new structure we have Central Banks controlling a lot of the systems, and so the question is, i think theyll get there, and between that and higher dividends, the stocks will be reasonably good places to be over the next three, five years. All right. Well, we see them under pressure today. See how it goes. David and howard, thank you very much. Thank you. When we come back, the closing countdown. After the bell, nearly 23 , thats how much an increase those who use obamacare in North Carolina could be facing next year. Well talk to the ceo of North Carolina bluecrossblueshield how this is happening and if it can be avoided. Youre watching cnbc, first in business worldwide. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. Com three minutes on the dow, 47 points downright now, a narrowly traded day, major index, dropped the entire day, pressured by bank stocks in particular. The tenyear yield has compressed the yield curve down again to well under 1 , and banks are suffering. Goldman sachs and dow taking it on the chin. On the other hand, teches continue to outperform the nasdaq 100, a subset of the composite, green for parts of the day, and amazon, above 1,000 for a short time this morning. Its a cosmetic round number, but big faang stocks have the attention. Volatility, perfect after a threeday weekend, but suggests a calm and trendless market now. D dom . We talked about the idea that the s p 500, the spyder, most actively traded etf in the world, trades about 77 million shares. With moments before closing bell, were at 28 million shares. Giving you an idea how slow it is down here, so, yes exactly. So for the rest of the week, expect less staffing involved, maybe people are going to be trading less in terms of overall volume. You mentioned faang leads higher, we dont talk about it in faang context because its a key. Tesla hit a record high in trading today. A stock thats in there, but not an s p 500 stock is its not in the faang context. One of the biggest not in the s p 500. 15 billion market cap, and netflix is 70 bill, the smallest of the faang stocks. You spoke about the idea its a stock picker market, rotationwise markets. Tesla is a stock not traded in the exchange, but one thats indicative. Shows, look, if you have doubts about whether, in fact, Global Economy is in a little of a slowdown, perhaps, or just not going to take off from here, teslas prospects have nothing to do with that. Right. So money finds ways to the idea not dependent on the macro. Looking at the stocks for places to park the money because its the reliability generator return. Eventually, those things work out of favor, so the big question now becomes whether or not there is a catalyst that comes even in the next few weeks or months that really derails that tech. We have month end tomorrow, and on balance, its negative, for whatever reason, last day of the month, well see if it holds true. Dom, thank you very much. Ringing the bell, Enterprise Financial services, dow down 47 points, and here at the big board is the cocacola company. Celebrating its sponsorship at the cocacola 600. Second hour of the closing bell is all kelly. Thank you, michael, welcome to closing bell, everybody, and by the way, richard is up there ringing the bell, he won that charlot Charlotte Nascar race over the weekend. Racing royalty in the house here. Finishing up on wall street, right to that, dow jumping 51 points, moving to the lows, not session lows, but moving to the lows, closing at 21028. S p 500 gave up three points to 2412. Nasdaq similar amount, 6203 and ru russell, a woef fuful prempl ef. Same true for the dow. Not recaptured the march 1 level of 21115. Hard to believe were halfway through the year, and a rough year for crude down 7. 5 . Is this a buying opportunity . We have a bullbear debate on that coming up, but first joining me now is cnbcs commentator, hello, again. Nancy, chief investment at heartland financial, and Senior Vice President of Wealth Management at ubs. Welcome, everybody. Mike, we closed lower today, amazon touched a bounce in the trade, and the idea this is somehow a version of the dotcom bubble, its starting to take hold. It is. I mean, i think if you approach Something Like that, were not near the end of it. Now, im not saying thats why we are going. We are still talking about valuing these big dominant Tech Companies on this years earnings, which was not the case 17 years ago, and, ncht, we are down 25, 28 times, and can argue it, but cant say they are up at the timered from reality. That said, theres a the lo of other stuff going on. Tech outperforming, but every day, theres another group of stocks that are participating. Like telecom. I talked about this. The federal rotation going on, i dont know how long it lasts, its a delicate dance, but so far, retaining most of those gains today, just above that former alltime high. What were they valuing . Valuing things on clicks. Eyeballs and clicks. Not earnings at all. Nancy, same question to you here. Do you look at markets and say, wow, resilience, shook off the oil crash, shaking off the retail collapse, and, you know, or do you does it make it harder for you to find good enough in it . It does a little bit, kelly. Thank you for having me. Weve been selling or trimming, not selling. Holds on apple. Odd place for value managers to be in the first place, but valuations were compelling, and now were finding just stocks specific opportunity like home depot, visa, stocks raising their dividends faster than they deappreciated, and so weve been able to pick away at those holdings, but were out of telecom and electric utilities much to my disappointment in the last few days, but the valuations are too rich for us at these levels. Home depot, nancy, one example. I mean, theres also showing you do have some of the big tech names, facebook and others in the portfolios. How do you make the decision about hanging on to them for the long run versus taking the gains youre sitting on . A lot is simple port folio management decisions where apple got to be 6 holing in the portfolio, on air talking about it last may, and that was a great time to buy the stock, up 75 . We have to take some of those gains off, but microsoft, facebook, even google are attractive on our valuation metric. Apple is getting pricey, and to we make that decision based on our discipline. If you dont stick to your discipline in times like these, you get buried. Weve been selling some of the financials a few weeks back. Michael, what about you guys . How do you where do you look at the markets with the year were having . I mean, id say Global Growth generally strong, steady, volatility down, indexes generally strong and tech has been in its own special class of returns, id say this year, and what i think is a little different from the 90s, we see this mania for the stocks, and its amazing how well theyve done that youre not necessarily funny to me that i dont hear you sort of hear it from the retail community, but i feel its the institutions coming on every day and amazon, facebook, apple i think this is a fascinating distinction, actually, because in the retail side, what were seeing this year is a huge amount of index, right . Exactly. Active management overweight, but the average indexer is not necessarily thinking about these proportions. They are just sort of buying wherever the proportions are. Right. I think theres a possibility thats extremely overbought, shockingly overbought some of the big names in tech are. They match undervalued because its very hard to find double digit organic sales growth that you can reasonably think youre going to achieve in five to seven years and virtually any other sector. Right. We talk about amazon and others, mike, but its the traditional tech names and semiconducts today traded high, names like micron and Western Digital paving the way. Making the argument for years that semiconductors are the new industrials essentially for the economy, but, look, everything at a price, right . You can say wonderful things about the organic Growth Potential of alphabet, amson, all of these, you are paying 30 more than five months ago. At a price, they stop i dont know what that price is. Whats also a factor is that youre starting to see the markets treat companies as if they are huge stable, evergreen type businesses like those that go in the low volatility indexes, so if you look at the s p splv, theres a 12 tech waiting. A year ago, it was 0. Mic microsoft and alphabet is in there. How many times its happened that the least volatile stocks were the most owned, most watched, best performing stocks . I mean, its it is a little go back to times in the 60 and 50s when it was okay. Nancy, quickly, one more question for you. Art and others have been emphasizing importance of oil in the market, and, again, looking at crude, you know, barely hanging on to 49. Is that a reason for you, why we see some of the weakness today just in general possibly . Well, yeah. I think some of the feds excelle comments were conflicting, so inflation target versus wage pressure and lack of productivity growth. All of that weighs in, but this is not really a selloff to be sure. Yeah. We have brief pullbacks, and he said they had 56 panic attacks since the bull market began, and they could be great opportunities. Great point. Find a way. Speaking of the fed, dallas fed president told our Steve Leisman he expects two more rate hikes this year. Among other topics, hes here with the highlights. Kelly, the dallas fed president said that the fed hikes twice more this year but cut the Balance Sheet. Thats growth of 2 and inflation heading the other way. That is softening and heading the feds 2 goal. Even though the recent numbers have been weak, some of it is a little idiosyncratic, but i think if youre getting to a tighter and tighter labor market, my own yujudgment is wi the lag effect, inflation pressures are billing. Government reported core inflation is 1. 5 year on year, failing to reach the target, and thats got the attention of the fed president who spoke this afternoon. Today, theres little indication of a breakout of an inflation. Rather the weight of data on inflation are lower than expected, and if anything, the puzzle today is why inflation is slowing at a time when most forecasters put the economy at or here full employment. Said if soft inflation data persists, she could rethink her forecast for future rate hikes, but not yet ready to make that call, kelly. Steve, stay with us. Is that the point you made, inflation must remember, up 1. 5 on the year, but the wage data has been better. Do you think thats confusing people . Definitely, i think, you know, i heard her this morning, like, okay, the message is clear. The fed has discipline, then i heard brainard and submitted comments to you with that reflection, and, of course, you know, two years ago, we were at 0 on the cpi, so now its 2. 2 from 2. 7. I dont see that as a crisis or reason to pull back from the cushion well get from raising rates, so i didnt understand that well. Another thing that complicates the issue that they talked about is the uncertainty surrounding the digital side, right . Right. A couple months ago, we were sure what the fed was going to do, and had certainty inflation would rise. Well, we knew the fiscal side would come along with a tax cut, infrastructure spending, and now i think nobody knows how thats going to go. Thats right, steve. What would you add to that . Well, oil is now basically off the table. Right. Inflation datas noisier. Two factors to think about beyond june, what they do with the Balance Sheet and rates in september, november, and december. I think well have increasing confusion over what they do actually for a second rate hike. Theres going to be increasing uncertainty about that because the inflation data is a little bit anemic, and its not exactly clear without Oil Prices Rising that youre actually going to see the increase. Thats the question in the second half of the year. Since we are talking about this, you know, before this, i was thinking about the playoffs again this year. Okay. The cavs and warriors. Who are you rooting for, by the way . Im not sure i want to get home safely. Okay, all right. Point is, you talked of threepeat faceoff between two incredible franchises, michael, can i make a googleamazon analogy . You know what im talking about there . They are incredible franchises, you know, weve got that its a race to a thousand. Can i make that analogy . Does that work . Make it, although i like to extend it more because golden state, silicon valley, cleveland might be the cyclicals that are still the underdog despite the fact of winning last year. All right. How about that . Join together on this. I think so. I have to think more about it. Mike . I would just chime in that you could, you know, i like the warriors, but like tech, you can argue its an invasive species, invading the other teams and stealing talent. Thats an issue for tech Going Forward, the degree in which they enter other industries to compete away a lot. Excellent point. Kelly, in addition to the nba playoffs, you know whats more exciting . Watching the inflation data. I just want to point that out. Thats true. Cpi and pce. There you go. You know your acronyms. Yes. Steve, thank you very much. Sure. As always, steve and nancy and michael, thank you, everybody. Thank you. Oil prices as we mentioned, crude falling nearly 4 over the past week. Up next, look at whats going on there, and if there are any opportunities to cash in on crude right now. Later, the ceo of bluecross and blueshield joins us to talk about cost sharing subsidies impacts premium hikes. Find out more from him coming up on closing bell, first in business worldwide. Think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Last weeks opec meeting, cutting outlook for prices too, jackie has more. Cruise closing lower, but apart from the drop thursday after the initial opec decision, this has not been a blood bath by any means. Prices hovering at 50, which, by the way, exactly what opecmented. Session high today, and technicals are telling. We tested the downside and got a break, but broke upside over 50 suggesting theres bias there. Consensus at the moment seems to be were going to bounce around 50, plus or minus five, and if thats the case, opec is not losing control. Quite the opposite. They are crafty. Why . Because crude inventory is 3 billion now, 300 million over the fiveyear average. Nine more months of almost 2 Million Barrels a day, bringing the market closer to the fiveyear average, considered very constructive. Final point here, Goldman Sachs out with the update on the energy space today, bullish on short term, 55, but saying prices need to stay 4550 or theres downside prices next year. 4550, as soon as shale producer are at bay, it keeps opec adh e adhering to the cuts. Its working, for now, but it is a very delicate balance. For sure. We talked about delicate dances in the market, but crude oil maybe not a coincidence. Probably not. Everything seems like in a delicate equilibrium. I like it. Carl is with us, consultant for oil, outlooks, and opinions, and senior vp for raymond james. Welcome, both. You know, carl, oil seems like its put in the highs, theres a new normal. Reaction that opec meeting said it all, right . Yeah, pretty much. We have to were in a wait and see mode. Like the fed. Hear a lot of things. See a lot of things. Theres a lot of talk. Until we see the proof in the paper theres nothing there. Were all waiting on a lot of things here. And, you know, theres still plenty of people, yourself included, bullish on crude, but how do you see it moving higher . Well, you mentioned just a few minutes ago that inventories are, you know, higher than their fiveyear average. Yes, thats true, but keep in mind, Global Demand has grown 7 over the fiveyear period, so inventory needs to be rising just to keep pace with demand so the metrics looked at, which is supply, is actually going to be getting below its historical average within the next approximately 100 days. Thats exceptionally bullish and something the market is missing right now. Heres the question to you. What would have to happen for opec output to become influence on the principle, in other words, for the marginals, you know, barrel of crude out of opec to be the driving influence on oil prices. What would it take to get us back to that point, do you think . Well, its one influence, and, you know, we have to remember six months ago when opec had the original agreement, that was enough to take oil up to 50 bucks a barrel and hovered there since. You know, one of the issues is that particularly the u. S. Inventory data from the deal has not been as bullish as the Global Supplydemand would suggest. We think that the u. S. Numbers will be becoming more bullish and consistently bullish throughout the summer. That is shaping up to be a catalyst to get oil in the 60s, if not higher. So, carl, how much do you disagree . Where do you see oil going . Well, you know, u. S. Oil, you get President Trumps budget proposal, if we get the release in the next few months or next year, that keeps a lid on things, at least in the 55, and so we talk about a stronger currency, a rate hike, maybe two this year, more next year, you know, its going to be tough. I think goldmans got it, definitely range bound for oil the rest of the year, if not next year too. Mike, again, theres the implications of this are everything from how the overall market trades to what the inflation nauumbers are as we talked about a second ago. Its interesting. We get numb to the fact that oil has been range bound for a while, and before that, in a different lower range, and yet the absolute price is half of what it is. Right. From a few years ago. We are underestimating the degree of the prospect to swing beyond ranges. I dont know what it takes to get us there, but its something to keep in mind, and, you know, also, the secondary question of what the oil stocks are discounting. Actually, to that point, you like names like marathon, is that right . Yeah. The oiler, the better. The companies that have more operating leverage to continue the oil recovery. This is not the time to be defensive, not the time to be hiding out in Something Like exxon. You know, marathon oil or cosmos on the small cap side is a great idea. The average oil stock right now is counting in the mid50s. It was higher three, four months ago when the stocks were trading better. We think oil has a good chance of getting, again, into the 60s, if not higher, before the year is up. All right. Well, i just like the line, the oilier, the better. Leaving it right there. Thank you, both, talking crude. Meantime, more trouble for tiger woods. Golf ledge arrested for a dui after being found asleep at the wheel at the side of the road. What fallout that is for him coming up. Burger king launching in belg m belgium, but theres a beef with the fast food giant over a new ad campaign. Details next. You think traffic, the futures going to be a nightmare does nobody like the future . Cmon, the future. He obviously doesnt know intel is helping power Autonomous Cars and the 5g network they connect to. With this, wont happen in the future. Thanks, jim. Theres some napkins in the glovebox. Okay, but why would i need a napkin . You could have just told me a bump was coming. We know the future. Because were building it. Welcome back. Time for fast take today. First up, u. S. Credit scores have hit ready record high of average 700 per borrower and is this normalization or not . Its normalization from a very abnormal set of conditions, right . You basically have a huge wave of personal bankruptcy and foreclosures rolling off the Credit Scores after lot of people, and credit has been restricted. The system has not allowed a lot of people to get credit and more trouble. You have an upward does it keep going, though, thats the thing . Feels like were there. Weve done it. 700. The question to me is whether what that means is more credit availability. Scores higher, you draw down. On that point, next up, people use that to pull cash from the homes, half of home refinancing are cashout, highest since 2008. Granted the share was higher in the bubble, 70 then, but, still, one in two now . The home atm is back. On some level, its rational behavior. This was discussed for at least four years before the peak of the market and before the peak of the credit bubble, and so, again, its one of the things, if you hear since 2008, it probably means, yeah, its up, but certainly not near where it was at the prior year. Good sign. Exactly. Going back there, like weve been waiting for this to happen. I want to know if people are spending on next. Android new phone meant to declutter and simplify our lives, and its called fittingly. Would you buy it . Its 699. I doubt it. I doubt im enough of a stickler for the latest features and design, although it seems as if its interesting that you have an independent trying to set a certain standard. It seems like kind of a boutique niche product thats meant to kind of be maybe best in class. I know the cofounder, but do you think the margin is bad for apple . I imagine thats going to siphon off some of the higher end buyer . At the margin, but just this far, you know, in from the margin just because its not going to be that much of a marketing push behind it, and now that apple really is selling phones kind of on lease in a sense, its a little of a different buying decision. Well see. Finally, bk in hot water in belgium, burger king launches next month, and they asked burger king to explain itself, mike, and they were not happy with the use of the kings image for commercial purposes. I can see being unhappy with the use of his image, but i think its almost a gift to burger king to have a sovereign country ask a company to explain itself. Totally. Also, just im going to stretch a little bit for a touch of irony here. Inbev, you know, corporate Head Quarters in belgium, and they are the king of beers. Nobodys not telling them they cant. Not only are we talking about belgium, but i was taken for the mac and cheetos last week. They were not worth singing about. Got your attention. Anyway, the white house continues to pay obamacare subsidies is creating chaos with insurers. Up next, the ceo of Blue Cross Blue Shield of North Carolina explains why he wants to raise premiums by nearly 23 because hes unsure whether subsidies continue to be paid. Stay with us. This is a story about mail and packages. And its also a story about people. People who rely on us every day to deliver their dreams theyre handing us more than mail theyre handing us their business and while we make more ecommerce deliveries to homes than anyone else in the country, we never forget. That your business is our business the United States postal service. Priority you at crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Welcome back. Heres a look at how we finish today, the climb across the borpd here, 50 point drop for the dow there, and the s p only off about three points from the high set last week, and nasdaq up by seven, and russell dropping 11 points today. Time now for the cnbc news update with sue. Hi, sue. Hello, kelly. This is whats happening this hour, everybody. Defense Officials Say the u. S. Military has begun to provide equipment and weapons to the syria kurds commonly called the ypg. They did not give specifics, only to say that the operation began in the last 24 hours. A video released by the Iraqi Government appears to show the moment a suicide car bomb exploded outside a Popular Ice Cream shop in baghdad killing 13 and wounding 40 more. Isis claiming responsibility for that blast. Keeping healthy arteries throughout old age is possible. Boston University Researchers studied more than 3,000 adults over the age of 50 and found that about a third of the people in their 50s had the arteries of a 20yearold, but only 1 over the age of 70 had healthy arteries. They say diet and lifestyle, not your age, are the reasons why. 14 more billionaires committed to donating most fortunes to philanthropic causes joining gates and buffett in the giving pledge. They include the wife of Audio Systems founder ray dolby. Thats the news update. Back to you. Thank you. Residents of North Carolina, the cost of health care could be going up. About 23 up next year, the Trump Administration fails for a new cost sharing subsidies, and its higher than 8. 8 increase, they would have requested subsidies funded for 2018, and for more on this and uncertainty in washington impacting their business, we are joined by the North Carolina ceo, brad wilson with our bertha, the expert on the industry, start us off. Thank you very much, kelly. Brad, thank you for joining us. You did an interesting thing. You actually outlined for your clients just how much of your increase relates to Different Things next year, including the Health Insurance tax and those cost sharing subsidies to reduce out of pocket costs for the low income members. Talk to us about why you did that and how you came up with that. Well, what we have just done is consistent with our philosophy of trying to be as transparent as we possibly can, which, of course, helps educate our customers and consumers about what is part and parcel of any rate increase. We felt it was important as we go into the rate approval process for 2018, that our customers understand what the importance of the csr funding, hence the reason for the disclosure of the information. You know, every time we hear about large increases, rate increase requirements, we hear about insurers going out of the exchanges, and republicans say, its a death spiral, dying of its own accord. Why did you want to go out, and what are you telling people in washington where you are today about what needs to happen in order to prevent these big increases next year . Well, as the only insurer in North Carolina that is serving all is 100 counties in our states, we feel its important that we work very hard to try to continue the stability that is that were actually seeing in the North Carolina marketplace. So another reason that we wanted to be as transparent as we could, and what were doing is saying the same thing to the elected officials in washington, that were saying to our customers, were explaining what is making up a rate. Yes, its the csr money. Its also the everincreasing volume and pricing of our medical Underlying Health care expepns expense, and part of the rate reflection of the Health Insurance tax that comes back in 2018. Mr. Wilson, if we assume that you do get approved for that 23 increase, can you change that figure at all if the facts change coming out of washington about subsidies that are or arent funded, taxes repealed or that are not . Once the rate is approved by the department of insurance, we can only make a request to the department about any change in the rate. I feel confident in the collaborative way we work with our department of insurance that if circumstances change that required us to bring the rate down, we would make such filing, and were confident they would be receptive to that. One more question, how competitive is the market place in North Carolina for the obamacare plan . If youre raising rates 23 this year, do you expect to stay in the exchanges long term . Realm, theres other factors that influence our decision on whether or not to stay in the exchange, but, of course, a fair and competitive rate is critical to that. In North Carolina, we have one other competitor, but they are only offering products in five of our 100 counties, so for all practical purposes, were the largest and effectively the only aca alternative for most of North Carolina. Brad, of course, the senate right now, looking at the American Health care act passed by the house, that would allow states to opt out of things like a Central Health benefit, and also set up a more risk adjusted market for people with preexisting conditions. Would you be able to operate under those conditions, and do you think if we pass something fully, like the ahca, you actually could bring rates down . Well, that would certainly be the aspiration. I encourage leaders not only in the senatings but in congress to focus on two elements that we constantly discuss, and thats affordability and stability. Whatever the senate decides to grasp as an alternative to the house bill, it needs to be done quickly. It needs to provide provisions that will bring stability and affordability to the market place, and if we have enough time, i think the industry has shown that we can adjust to about anything that makes sense if we have enough time to do so. So its this is an urgent situation, and we simply need to know what the rules of the game are going to be for 2018 in order to get affordability as well as stability. Thank you very much, brad willson, and, kelly, of course, june 21st is when insurers have to get the final rate requests in, but they dont have to commit to the markets until the end of the september, so as long as uncertainty goes on, it gets closer to open enrollment. Thanks to brad wilson, bertha, you as well for bringing that to us. Uber fired the head of the car unit. Deidre . Kelly, thats right. Anthony is out, the former Google Engineer at the center of ubers lawsuit over selfdriving car technology. They said the company has been prepping levandowski to comply and consist with the internal investigation for months. He did not meet a deadline, and will not wait for the issue to make its way through court. Accusing uber of trading trade secrets. He was a Google Engineer that started his own startup, auto, that uber acquired, making him head of the driving unite, and he was ordered by a federal judge to hand over evidence and testimony. He asserted his fifth amendment rights. His lawyers say to avoid potential criminal charges. Guys, its unclear what this means for the lawsuit, and we reached out for their take, but the worst Case Scenario is prosecutors would now push him to implication other executives at uber. This is the latest in a very rough year. Its now lost another high profile engineer, and source close to the matter tells us tomorrow ubers board subcommittee receives the report on workplace issues and Sexual Harassment that eric holder, former ag, has been overseeing. Yeah. Just tragic news about losing his mother, father seriously injured in a boating accident this weekend. Thank you. Our thoughts such a tough year, mike, and its just yeah. Only mentioning it because it is a difficult thing that i cant imagine what hes dealing with with Everything Else going on, but this latest news about whats happening with anthony is not terribly surprising because the company distanced themselves from him as the trial proceeded, but it seems uber is trying to distance itself from, you know, the worst possible outcome the trial. Exactly. So if, in fact, the uber positions of this firing is, in fact, the way it went, it is going further in the effort of uber to characterize the situation as, look, we were on the up and up, acquired this guys company, assuming he came by the technology in an honest fashion and so it does isolate him more than imp kate the company, but, of course, you dont know if thats the tactic. You will see how it plays out. Absolutely. A lot of technology at stake. Summer may be shaping up to be a bust in the movie business, maybe. I dont know how indicative this memorial day, pirates, bay watch was, but well have all the Box Office Details coming up, and tiger woods arrested for driving under the influence over the weekend. Impact on his sponsorships and what that means for his wallet is still ahead. You totanobodys hurt, new car. But there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do . Drive threequarters of a car . Now if you had Liberty Mutual new car replacement™, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. With Liberty Mutual new car replacement™, well replace the full value of your car. Liberty stands with you™. Liberty mutual insurance. 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 to holiday inn whether for big meetings or little getaways, there are always smiles ahead at holiday inn. The power of 100 of the worlds top companies. The power of a proven 15year track record. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Welcome back. Big news over the weekend involving tiger woods arrested in his hometown of jupiter, florida for a dui. Police say alcohol was actually not involved. Tigers statement said it was a bad reaction to prescription medicine. The latest of the troubles could impact endorsements, losing backers like buick and at t after marital troubles in 2009ment could his deals with nike, rolex, and bridgestone be at risk . The founder of Sports Marketing for sports corp. , you know, what are your initial thoughts on this one in. Well, this is part of the incredible downward spiral weve seen happen to tiger in the last eight years. We it what happened to tiger personally, professionally, and financially has been nothing short of falling off the cliff. Right, and, i mean, i will say in a way its become so tragic its almost sympathetic at this point. I mean, there are fans who, and much of the public would love to see the tiger woods of 20032005 of his peak, you know, 2008, and, you know, back out there and yet will be thinking about whats best for him after this news, so where does that leave the sponsors . Kelly, absolutely right. Hes not won a major since 2008. That is nine years ago, not winning a tournament since 2013. What happened with the sponsorships, he used to make about 100 million every year. Hes now at half of that with much of that coming from a preexisting deal with nike that pays him 20 million a year, and nike earlier this year said they are disbanding their golf unite. Question is how long that goes on for. Mike, is it because golf is perhaps less important to nike they had to make a tough decision . In the case of nike, yes. I think its actually fascinating were talking about having otherwise would be tremendous opportunity for endorsement by tiger woods, now jeopardized when he has not been near the front of his performance terms for a decade. Yeah. It shows you about the girth of golf stars with nobody to lean on. Thats right in a market thats clearly a point, going back into that idea that there are some people who just are rooting for him to be, you know, to have some of the former glory. Without a doubt, its a measure how dominant a personality and athlete he was at the peak. He was synonymous with the raise of mainstream of golf in the industry, and so thats why i think its remarkable how far. Mark, do you think this is indifferent that hed have fewer sponsors if there were other horses for the sponsors to bet on . You know, yes, would have fewer sponsors, he would be less important in the golf world a decade after since winning the last major championship. We have great golfers out there, but they dont have the personality tiger had. He transcends, a pop icon, a great athlete, he was multicultural at a time when we were really becoming at the forefront of multiculturism in the nation. There was so much about tiger in the right time, place, and right person, but as happens, as weve seen with other superstars out there and celebrities in the sports world, the fall can be really, really dramatic, and thats what we are seeing with tiger. Golf really needs him. Especially when he goes over 50 and goes to the senior tour, and he would be on their every week, and were not really going to see him there or pay much attention to him. Mark, i wonder if the public continues, look, he had four back surgeries in recent years, Something Like that, a lot for anybody to go through, i cant imagine the pain and painkillers involved to get him through that. To the point where the public, and own fans, prefer to see him walk away from the game, can sponsored help him find another niche in golf if thats what he wants . Kelly, youre too young to remember this, but there was a great baseball player, william ace, who wowed everyone, but he stayed too long and was an old man playing a game, and theres images that people remember of him as a pathetic figure, frankly, rather thans incredible athlete he was. This mug shot of tiger woods is going to be with him forever. Yeah. Thats an image thats going to be indelveble. We have to go, mark, but i would say when you say willie mayes, i think of baseball greats, so i dont know. Maybe thats all people will think of tiger woods as and this is just a sad quota to live through and for him as well. Well see. Mark, thank you for joining us. My pleasure. Founder of sports corp. We have a news alert on our countrys Missile Defense system. Morgan, what are you learning . Kelly, thats right. The Mission Success is headline here. Missile Defense Agency saying moments ago that it successfully int intercepted a Ballistic Missile target during a test of its land base Missile Defense system. You can see that taking place here. This is the first of its kind, live fire test event for the system, and while under planning for a long time, this is in the heals of the missile test for north korea since yesterday. The intercepter, the video seen right there, was launched from the air force base in california. Were told it destroyed its target in a direct collision which was planned to take place over the Pacific Ocean near hawaii. This is the first intercept test of the socalled ground base core defense since 2014, a system built by boeing, and suppliers include many more. Back over to you. Morgan, thank you. Exactly what i was going to ask, mike, who are the companies behind this, boeing, northrop, raytheon, and orbital. Extremely strong groups. Glad it worked and was successfulful you know, important, obviously, for the companies, for the country. Not even captain jack sparrow or wonder woman could save the box office. Whats behind the numbers next. Coming up, she told you to buy the brexit tip and trump dip, and hes on fast money to say what you need to buy right now. More closing bell after this. Their experience is coveted. Their leadership is instinctive. Theyre experts in things you havent heard of. Researchers of technologies that one day you will. 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As it opened on wednesday him disneys fifth pirates of the caribbean name won the weekend but has the lowest u. S. Opening the first in the franchise 77 million. That was balanced out, though, by a massive 208 million opening overseas bolstered by china. Disneys topping the box office this year with nearly onequarter market share. Homes are high for Warner Brothers wonder woman to the u juststart the season friday, studio and theater owners are concerned consumers could opt out of transformers and the sixth spiderman the u. S. Box office is still up 2 yeartodate t. Films released in may were on course to under perform estimates by about 280 million. Kelly, back over to you. All right, julia, thank you. Mike, this is interesting. Insiders close to both films have told the trade publications this weekend they blame rotten tomatos they gave pirates 18th and bay watch 19 . Maybe they think we dont screen these. They blame the supposed experts for 100 years. Right. But i go es the ability in one glimpse to get consensus, correct, al opinion, maybe its more palpable. I think it tells you, if that has an influence is people are rationing how many times they go to the movies. Its not about as good or bad,ly go to three or four smr its expensive. Maybe there arent that many open questions from the fourth france formers movie. Ill wait for baywatch 2. Well tell you which companies are sounding cool with buzz words, how that could impact their bottom line after this. The whisperer . Why do they call him the whisperer . He talks to planes. He talks to planes. Watch this. Hey watson, whats avionics telling you . Maintenance records and performance data suggest replacing capacitor c4. Not bad. Whats with the coffee maker . Sorry. We are not on speaking terms. Whats with the coffee maker . With e trade you see things your way. You have access to the right information at the right moment. 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This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Welcome back. David einhorn had a word of warning for companies trying to look cool at this mornings conference. Reporter earlier this morning David Einhorn Hedge Fund Manager presented for core labs. One factor that he used is how each year core describes a new corporate focus, always jumping on the hottest business trends. So, for example, on cores chew on earnings this year the ceo mentioned big data, neural networks, machine learning, Artificial Intelligence and Data Analytics all in one sentence. That got us thinking how many other firms are using these tech buzz words. It turns about contractor out about 60 have used buzzing tech phrases in the last ten years. Before t four hot phrases this year are Artificial Intelligence, machine learning, Data Analytics and auto mnomous vehicles. Some have flattened out in the last 12 quarters, the cloud and internet of things and Virtual Reality peaked a year ago and has been rapidly declining. Ai is a health phrase. For health care its Data Analytics. In data energy big energy has been the word. Would mike construct a short basket to drop these in . You can overuse it. Its interesting Virtual Reality has ebbed, a bit. Theyre kind of over. Whereas with the cloud, it became so much a part of the fabric that that word, itself, may be is less important smr the cloud spiked. Now its just kind of there. Its descriptive instead of being aspirational. I can remember in the late 90s, whats your online strategy . In the mid2000s, whats your china strategy. Its interesting, though, a couple things have shifted. Bitcoin was a few years ago. Now its basically zeroed out. Lockchain has taken over. So that swapped and then it used to be called selfdriving cars. They stopped saying self driving cars, now theyre saying autonomous vehicles. Its another way of naming the same thing, soundsing buzzier. You can physical out whether somebody is pecking one thing to focus on, as heres where were investing as opposed to mentioning five of them in one sentence. How many combinations seem to be focused . How many have overlapped among those five . Its the same thing. How many reporters are trying to call themselves big data operators . I dont know, too many. You have a machine to learn. Ai recording out there. Too. Thank you. Michael, real quickly, some interesting monthtodate numbers i wanted to mention the biotech spyder is down retail 5 and the. Mel b conductor that you mentioned earlier is up 8 . Its a tremendously bino tech market. They seemed uninvestible. That biotech is fascinating. Usually that goes along with tech. They go the opposite direction. Retail is a secular, biotech has more pricing. More tomorrow. Thank you very much. That does it for closing bell. Fast money begins right now. Fast money starts right now. Live from the nasdaq markets overlooking new york citys times square, im mellissa lee t. Traders are pete najerian, tim seymour, dan nathan and guy adami. Tonight on fast something they havent done since the dark days of the financial crisis a. Top technician says look out below. Hell explain why hes so bearish. Plus get this, shake shacks are usually the best burger. Now wall streets most hated stock. Could that signal a buying