Transcripts For CNBC Closing Bell 20170714

Unexpected rant about gridlock in washington. Boy, was he well hear what he said. Well let you listen to it. And wells fargo shares are under pressure after the banks disappointing revenue numbers. The companys cfo will join us. And after the bell, paypals chief executive officer will join us in a cnbc exclusive. That stock hitting an alltime high earlier in the wake of its new apple partnership. Well get more details in the next hour. Lets start though with this news that broke in the last hour regarding sprint dow jones reporting that the Telecom Giants chairman engaged with Warren Buffett and cable mogul john malone about a cable investment those talks reportedly happened in sun valley, idaho, at the ellen and Conference Company conference where Julia Boorstin has been packing up and getting ready to go and hang around, julia. There may be more news breaking here so we all know that they were there but you havent been able to confirm whether the conversations we were talking about there happened in sun valley, right . Reporter yes we know all the players are here and we mow that john malone has been taking meetings hes been having them behind closed doors and we saw them arrive what we expected going into this week in sun valley is the telecos, the at t, verizon and sprint are the ones those are the ones that have the most pressure on them to make moves now that at t is buying time warner that deal, of course, pending, there are a lot of questions about what verizon is going to do to try to differentiate its pipes. Discovery ceo david zazlov talked to us earlier in the week about how thereby pressure for the telecos to bundle everything together, to make sure if youre selling cable and Internet Service youll be selling wireless which is why weve seen comcast and charter have these talks that they are having right now with sprint. The reason why sprint would be interested in bringing in money from Warren Buffett is so it can better compete with at t and verizon. A huge infusion of cash from Warren Buffett would make a big difference and really allowing them to add customers without having to worry about the pressure on their bottom line. Julia, i guess theres several questions here i mean, first of all the idea that sprint is approaching them suggests that its coming from a place of weakness, not strength. This is not Warren Buffett swooping in with a deal for a company who he thinks is attractive and undervalued also sounds like the talks were separately held according to the journal with buffet and not malone and not sure what form this would take and its a question of whether theres an injection of capital as a way to say theres a number of suitors, wink, wink, nod, nod to tmobile this is the first guy to show up at trump tower this is a guy who knows how to work it for his company. Reporter yeah. Look, sprint is definitely in a position where its under pressure right now facing competition from its two biggest rivals, at t and verizon, and both those companies have diversified and made big investments. Verizon, you know, in the form of acquisitions of both yahoo as well as aol and then also with at t you have this time warner deal you no i think we have to remember that as you mentioned sprint and tmobile were having those merger talks, but those talks were tabled just while sprint had talks with both charter which, of course, john malone is a big investor in as well as comcast cnbcs Parent Company so charter and comcast are trying to figure out how to bundle Wireless Service into the package of what they sell to consumers so theres a lot of different Major Companies involved here, but sprint has definitely put itself in the middle of a lot of these conversations as it tries to figure out how its going to compete in this very crowded landscape so its really one of the smaller players now. We have to remember that we did have the tmobile talks. Those are put on hold and they are already in talks with charter and comcast and apparently the term in which they can negotiate with charter and comcast is just a couple weeks longer, so they are probably setting the stage here for whats going to happen next. We were talking earlier about whether this was to to try and impress tmobile that they have got other options out there. This is a heck of a bluff, very elaborate if in fact thats what they are trying to do, hu . Well, look, i think something thats really interesting about sun valley is everyone is here its the telecoowners, media giants and investors this is probably a great place for sprint to be talking not only to its rivals but also to all these potential investors just to see what these options are because sprint has been the center of so many different talks over the past six months or a year that it seems like its all kind of converging here now as they try to figure out what the next plan is going to be or if they want to resolve the current talks they are having with charter and comcast in offering Sprint Mobile service to charter and comcast subscribers. One of the worst performing sectors in the market this year so far, telecom, and they try to figure things out. Julia, thank you Julia Boorstin with an unscheduled appearance from sun vale. And while the bank stocks are lower, the bank healedine is actually this rant by Jpmorgan Ceo Jamie Dimon during his firms Conference Call earlier today. Will fred frost was on that call and hes got details for us right now. Thats right, bill. Heres the main part of the aforementioned rant. Dimon referring to the excessive gridlock in washington. You have one. Most bureaucratic, confusing, will i tijous societies on the planet its almost an embarrassment being an american citizen traveling around the world and listening to the stupid [ no audio we have to deal with in the country. Dimon is always colorful but the level of phraseology is far, far elevated than what we would expect on an Earnings Call why is he so annoyed because on recent trips to china and france hes seen what can be achieved. Every single one of those countries understands that practical policies that promote business and growth is good for the average citizens of those countries, for jobs and wages, and somehow this Great American Free Enterprise system we no longer get it. Its important to note his criticism of washington was referring to the last decade broadly, not specifically the new administration, and his main point was actual lay it growth is resilient r since the great recession, okay, which is now eight years old, weve been growing at 1. 5 to 2 in spite of stupidity and political gridlock because the American Business sector is powerful, and its going to grow regardless what im saying it would be much stronger growth had we made Intelligent Decisions. Bank stocks, bill, as you said down though because of earnings, not the dimon comments we just listened to. Guys is it also because of Interest Rates we saw, you know, the tenyear yield move down after the inflation and retail Sales Numbers exactly right, kelly. That accentuated the moves but fair to say as the numbers came out before the numbers that we saw the stocks react in the premarket for jpmorgan the negative was less impressive knelt Interest Income than people expect. They lowered the guidance from 4. 5 billion to 4 billion for wells fargo it was less good loan growth than expected, and for citi there was nothing really specific. I think just among all of the banks they ran up quite well into the earnings and didnt quite perform as expected and the Interest Rate point us a rightly say, kelly theres jpmorgan and wells down about 1 . An eventful day for you, unexpectedly so. Thank you, see you later jamie was clearly not in a very good mood because he was also taking the Financial Press to task. And a half. They were asking about the minutia of their bondtrading business who carries about that you should be worried about the gridlock in washington. They are on the own, Conference Call. I agree not the treasury secretary could have been but is not. Theres been indications lately that wall street is starting to bet on wall street again. Michael, do tell. Its a little bit selfreverential just look at today, kell you have the dow at record highs, in a sense feasting on those weak numbers for main street, so wall street over main street has been a familiar trade for a while now and even within that its parts of the market that are benefiting the most thats the wall street part, the investment banks, brokerage houses, securities exchanges and Asset Management firms that have really been quiet leaders, and its really the markets way of saying this is where we think you have to kind of hide here as main street economy struggles a bit. I put this chart back of blackrock against discover financial. Two stocks going two Different Directions discover basically a consumer lender that thrives on lending money to average people out there, and you can see basically wall streets verdict is good for one, not for the other, and in a broader sense this is the way the market is reacting to this disappointment on the growth front, the idea that the fed is going to go slower, so heres what wall street likes. Slower growth. Low Interest Rates, voracious appetite for credit junk bonds doing very well. High corporate Profit Margins. Thats what weve had now. Thought there would be an intermittent story and the economy would run higher main street wants the faster growth and wants to see wage growth pick up a little bit, perhaps meaning higher Interest Rates and maybe not good things for wall street. While its not a zero sum game have you to ask the question how much further can you stretch this right now and i will say, guys, youre seeing inklings that people on the street are saying maybe the retail stocks, for example, have gotten just a little bit too depress the maybe weve been too dim on the prospects for main street. Upgrades of walmart and gap stores and had the news from target as well. If the pendulum swings in both directions. Any wonder that janet yellen is as dovish as she is. Exactly. Clearly shes looking at that second part, the main street part right now, dont you think . Exactly, and weve been kind of stuck on this treadmill for a while where you say the fed wants to do more and wants to get into a mode of more normal Interest Rates and wall street fears that for a while main street data doesnt support in a and then wall street kind of celebrates it so, you know, until further notice i think thats where we are. Im just wondering about some we talk so much about the banks, you know, the big ones, regionals, more on that in a moment, but there are these other pockets of the Financial Sector especially as the whole thing is undergoing change. I think the asset manager is very interesting all the technical analysts are saying look at this group that really wants to go harder. Hard to get bearish in the overall market when thats actually a leadership group. Kind of like a leverage play of the market itself. Thanks, mike see you next hour. Mike santoli. Lets get to our Closing Bell Exchange the dow up 86 points putting us in record territory. Joe durand is with us today, New York Stock Exchange Trader Peter Costa from empire executions is out there on the floor somewhere and Rick Santelli is in chicago at the cme peter, it do we still lay this at the feet of janet yellen, do you think, this rally that began after the testimony came out on wednesday before the House Financial Services committee and we havent really looked back since. And it pains knee say it, but, yeah, i think we have to lay it at the feet of janet yellen and a lot of what has happened in the market over the last two years the fed has been guiding it and continue to guide it thats not really a bad thing. I think they have done a fairly good job i know people will disagree with me, but i think they have done a fairly good job of trying to manage this and Going Forward i think there will be some issues coming into september because, you know, some people will be calling for another rate hike. Im not. I dont think the economy wants it, but i dont see in those hallowed walls in washington, d. C. And i dont make that decision, but, you know, i think thats what people are looking at and her getting more dovish and, you know, for the financials might be the greatest thing but i think the financialses are in a totally different footing right now. By the way, joe, its pushed the dollar weaker. The u. S. Dollar index is down around 95 now and look at whats happening with oil today and gold and silver and the gold miners, so what do you make of of it . Is this a oneday move we were up at is. 03 on the dollar index its the unwind of the trump trade that occurred from october, november all the way to january and everything has basically reversed out we were hoping to reach a 2. 5 to 3 growth rate and were hoping to make two were seeing that reflecked in Interest Rates and on the dollar were seeing it in the performance of stocks. Small caps way behind the International Large caps and the Growth Companies so everything we thought was going to be true at the beginning of the year, invest in small caps and invest locally has turned out to be the polar opposite because of the gridlock and the mess thats happening with the Trump Administration dialogs that are occurring and their ability to get anything done to actually increase growth so i think what youre seeing is a reflection of a continued unwind i think will continue to year end. I do not think were going to get another rate hike because what were seeing is a very flooding u. S. Economy. Ever . All the on the smimp there and the behavior in the market and the growth in gdp is not following through. Well never have another rate hike or just this year its just the International Markets are really setting the pace, and youre seeing that with the performance of Large Companies and how they will we are doing and the relative underperformance of small caps so until small caps start to catch up i think its really hard to put another rate hike through unless we start passing quality changes that will increase growth, reduce regulation and put the infrastructure bill in and none of that appears to be on the horizon. And, rick, then we add the very tame Consumer Price data this morning, inflation data yield came down. I saw one forecast that said maybe the tenyear could go back to 210 at some point i feel like weve seen the lows for years in terms yields but what do you make of whats going on right now well, obviously, you know, anything is possible, and you always have to be openmined any trader that makes up his mind and doesnt change what the times, the fundamentals and the economics and all the flows, you know, youre never going to make money. Ill still virtually stick with that comment though. I think peter actually has it right out of everybody take it up with management hes talking about he thinks they are managing things well. Well, heres the deal, and can you say whether its good or its bad but its trying to have three, maybe four monster Central Banks, not all on the same page, owning so much and managing so much, so janet yellen was on a clear path draghi kind of hints he wants to join that path rates go up. You know, we were down at this range before that two weeks ago. Draghi tries to walk it become a little bit janet yellen is dealing with the data, the weak retail sales, you know, all of this making it very difficult, and i dont think its going to get any easier listen, peter is right they are doing a pretty good job of managing, but the problem is they never manage to accomplish the policy mission which is to get better growth productivity and higher prices. Weve had the same growth weve had for many, many quarters and the problem is weve got all the collateral to go along with it big Balance Sheets and rates artificially low and europe will skyrocket and the currencies also do well the way we did during the heart quantitative easing, but at some point doesnt somebody have to look at the negative rates and the fact that none of them can make money which is holding them which is mostly Central Banks in Southern Europe guaranteed by the ecb i dont know now will end, but one thing i feel pretty confident of, its not going to end any time soon so the market seems pretty happy as evidenced by the equity markets. I would add one thing, rick what the inflation picture is doing is allowing the fed to concentrate on deleveraging its Balance Sheet rather than rates. Thats where they will concentrate, getting rid of some of the liabilities that they have built up, the trillions of dollars they have built up over the last few years. Joe, i think thats a great idea totally great idea it will be less disruptive so i dont have a problem with it, but issue i have and janet says we dont have pricings or growth to productivity, i dont see how any of the policy, after all these years is going to still address that nothing is going to address that we need to try something different. All right weve got to go at this point. Love to continue the conversations. Good one but time marches on later than its ever been. Thank you, guys have a good weekend. A little more to go to the close. Dow is up 990 points now s p up 12 and nasdaq 40 and russell up six another record close for the dow and probably the s p and maybe for the others as well well check on that. Falling Mortgage Income is falling on quarterly revenues. We found that out this morning up next, the companys cfo joins us to talk about whats behind the drop and react to senator Elizabeth Warren for fed chair janet yellen to remove banks board members. Speaking of the banks, very a bet on whether banks should be betting on regionals or the big banks coming up, and we want to hear from you as always. Reach out to the show. Do you this quite often. You can do it on twitter, on facebook and send us an email youre watching cnbc, first in business worldwide hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. What do you think . Youre in the match app. Now tap on the new missed connections feature. It says ive crossed paths with kate six times this week. That is a lot of times. Shes cute too yea how did i miss her . You didnt. Match picked it up for you. Check out new missed connections on match. Start for free today if only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome back shares of wells fargo down nearly 1 after the nations Third Largest Bank Reported Second Quarter results it the did beat expectations on the earnings on the bottom line but revenue fell shy. Joining us now in a first on cnbc interview we welcome back wells fargos chief Financial Officer john sclusbury who is also a member of cnbcs global cfo council. John, always good to see you thank you, and welcome back. Thanks for having me here lets go to the nuts and bolts of the quarter you didnt hit wall streets expigses a how did you in terms of revenue. How did you assess the quarter sure. So, well, we beat it fenkfully on the bottom line it was a good quarter. We had real balance. We had record high Interest Income and had 19 quarters in a row above 5 billion of net income which nobody else can say. We had record card revenue, earning asset growth in the Single Digits, deposit growth year over year in the Single Digits so there was a lot to like about it. You mentioned mortgage during the break. Mortgage banking was a little bit weaker in the Second Quarter because of the mix from from refi to purchase activity. Theres more purchase activity going on. Right. And that mix causes us to earn a little bit less revenue per dollar of mortgages we originate but overall it was really quite solid and 1. 07 was six cents ahead of where analysts estimated we come into the quarter. John, i guess the other side of the story is at least at first blush with some of the analysts following the company said, look, you were helped by a tax benefit and had a much lower credit provision which freed up earnings you guys intentionally pulled back, but your end of the period loans were flat. Your expenses were up and it is a quote, unquote weak across the board. I understand that the truth is reflects both of those and its probably somewhere in the middle, but to those points specifically on the quarter, where is the growth going to come from for you guys to show a better return on investment, return on equity Going Forward sure, especially if rates are still low. Sure. So rates are low. Weve got record Interest Income now which is good. We have the best return on equity in the business aand were right through the cycle and were at 12 of a real calculated return on equity so that is doing really well. Expenses were lower quarter over quarter so people wished they were a little bit lower. We ended up in dollar terms right on top of where analysts expected expenses. A lot of investment going on at wells fargo. Weve announced some big programs to take them out at time and were improving a better bank which is a story that youve been hearing from us and for the last nine months or so and while all that is happening weve produced 5. 8 billion which i think is our second highest net income number of all time and the 19th quarter in a row above 5 billion so analysts can always find something that they wish was done a little bit differently, but the results are extraordinary, and they speak for themselves weve got 270,000 people working to produce those results and 70 million customers that were doing business with. Real quickly. Why is it the credit provision did fall by about a third so, you know, help me out to make sure im interpreting this right. Usual lit credit provision falls whether when theres a dramatic improvement in the Economic Outlook or underlying fundamental. Do i have that right what happened there . So you have thats a great question theres a few things that go into it. One is were now coverage over the over the energy cycle so we built reserves meaningfully going into a weaker period in energy a year to two years ago thats run its course and and losses were not as big as what we had reserved for, stow it was on a comparable base tis takes our our total credit provision down also as you mentioned weve backed off weve tapped the brakes a little bit on auto business on lower credit quality so our portfolio is performing better and has highest credit quality metrix so its deserving of a slightly lower reserve than it otherwise would, and as you mentioned loan growth was a little bit slower so the Loan Portfolio isnt better than it was previously and higher credit quality. One of the things that was featured prominently on our call today is our net chargeoffs right now are 27 basis points of average loans. Wow. Never been lower than that of anybody who works at wells fargo. The credit quality is really, really hoy thanks for asking that question. Yes lets see if you thank me for asking this question Elizabeth Warren. Yeah. Of massachusetts, who has been a severe critic of the Banking Industry and of you guys in particular pushed janet yellen during her testimony to the Banking Committee about why the fed has not removed wells fargos board of directors following the companys accounts scandal . Here was their discussion yesterday. Listen can you explain to me how the wells board can possibly have satisfied its obligations under the feds Risk Management regulations . So, im not prepared to discuss in detail what is confidential supervisory matter. I will say that the behavior that we saw was egregious and unacceptable, and it is our job to understand what the root cautions were of those failures. Time after time, big banks cheat their customers and no actual human beings are held accountable, and instleds a fine which ultimately is paid for by shareholders, not by executives and certainly not by directors of the board, and nothing is going to change at these big banks if that doesnt change and bearing in mind that mr. Stumpf left and the head of Community Banking has left, nobody at the high level has what do you say to Elizabeth Warren you know, what i would point to is the long list of items that weve engaged in to improve wells fargo since since entering into the consent orders last september which was the beginning of this story, and theres a long list in terms of inviting customers in and fix what might have gone wrong to the extent that they had an account, for example, that they didnt want or need. Theres work on culture with employees. Theres a lot of executive accountability that had been taken into account the board conducted a thorough investigation to get to the bottom of root causes, why things happen the way they did and what should be done about it, and theres still work under way including as you might have heard this week weve entered into a preliminary agreement in a class action suit that helps to address any customer grievance related to this over a 15year period of time, just to be very inclusive about it, so theres a lot of work going on she didnt refer to any of that which is which is fine, but were talking about it with our customers, with our other stakeholders, including our investors, et cetera, and things are things are working. But her point is yes, the work goes on, but by its the same people who were there when account scandal occurs the board of directors who is supposed to be overseeing the company and making sure this didnt happen. You can understand from an optics point view why the public would need to see those kinds of changes made nord to instill the confidence that you are trying to bring back to the bank here. Sure. I think you should expect the board to take steps that they think will address the messages they have gotten from regulators and from shareholders. Its not for the cfo in particular to to address how the board is going to govern itself during this period of time, but just back on the subject of janet yellen. We have a very close relationship with the federal, both at the national and local less lots of supervision gets done and lots of conversations have happened and its done while weve been getting things done to make wells fargo a better bank. John, thanks for joining us this afternoon. Thanks, john. Thanks for having me. John shrewsbury of wells fargo. Time for a cnbc news update and sue herera. Heres whats happening at this hour. Two german female tourists were killed and four more Foreign Tourists injured in a stabbing attack in egypts red sea resort the attacker stabbed the tourists at a hotel after swimming up from another beach, and the assailant was then soon arrested illinoiss governor bruce roner touring the flood damage in lake county two days after the county declared a state of emergency as rising rivers continue to threaten suburban communities. He says theres still a lot of cleanup work to be done. I want folks to know we may be calling for an evacuation in certain neighborhoods and certain communities as the floodwaters continue to rise we had record rains in southern wisconsin and southern wisconsin waters are flowing down here. The telescopes at national,as Solar Dynamics inventory have captured a sun spot that was seen between july 5th and 11th and according to nassa the core of that is larger than the earth amazing stuff. Thats the news update this hour bill, back downtown to you. Oh, i love that kind of stuff. I do, too favorite story of the day. See you later. 29 minutes left in the trading session here, and we continue to set new highs for the day which pushes us further into record territory for the dow and s p right now. Up 106 on the dow. The russell, too, i believe. And the russell, yes. Those are the small caps that joe duran was talking about. Coming up, paypals chief executive officer is ready to tell us why his companys new partnership with apple could impact the bottom line thats coming up. Plus, the next time youre chatting online with a Customer Service rep, you mayctll auay be texting a chat bott and may not even know it it. Thats next on closing bell. Welcome back im on the floor with kenny polcari. Talk about some of the dynamics playing out in the market today. You can see the banks, right. That was a buy the rumor and sell is the news kind of trade for them, but every other sector really is strong and considering the cpi data was weak and retail sales were weak, that just plays into is the fed going to hold off . Does this go right to janet yellen owes comment about the lack of inflation and what it really means and so i think youve seen the market rally on the back of maybe this is going to cause them to pause on both front, on shrinking the Balance Sheet as well as raising rates. One of the weird days in market because you have on one hand kind of disappointing news, depending on how you want to interpret it the. Low inflation is a good thing and we should be off to the races, fine. Should be off to the races on a mixed bag. Not a lot of volume today which speaks volumes about what investors are kind of thinking, right . Its a little bit confusing because our getting that mixed data had you blowout numbers on the banks and yet they are taking money out of the bank and makes sense for the trader type and longterm investors are taking advantage and there owes the buy the rumor and sell the trade we see what happens in the next ten minutes. Were near the highs of the session with the dow up 108. Well let you get back to it, kenny. Thank. Bill . Kelly, thank you. We keep hearing about the fear robot taking over human jobs especially in places like factories, but humans have seemed to have an advantage when interaction is needed. That is until now. A San Francisco startup has created bot created bots to work sales and the eat mails and Text Messages that the bots send seem so real that people think that they are human an that leads to some surprising responses, to say the least. Heres that part of the story for you. You sound cute, got a picture . Nicole, youre beautiful. Are you single i love you, jen. These may sound like messages on a dating app, but they are actually real emails people have sent to sales reps at places like Car Dealerships and Insurance Companies and education firms. The problem . The sales rep is not human they are actually Artificial Intelligence bots afford by an ai company conversica. She has a name, a number. Reporter alex terry is the ceo. And what we tend to find is female names outperform male names in general. Reporter the most popular names for the bots jenny, ashley and jessica. Jeff Heads Business Development in curry toyota in watertown, connecticut where they use the technology for a bot named holey. She will respond right after an opportunity comes in, within four minutes no vacations, no days off. Shes going reporter that helpfulness means customers sometimes want to meet holly. Every once in a while youll have someone come in and say i just spoke with her, you know, and you cant tell me she sees not here, i got off the phone with her nine times out of ten this is jeff, hollys supervisor and thats fine from there. Reporter the bots start at 3,000 per month and earn double digit returns about w about 1,000 companies so far using the service. I love that poem are trying to chat up holly. Maybe they should make a movie. Oh, they already have made a movie. This is crazy. Come on, eric. Is this more about does it say more about the reality of these of these bots that they are creating or about how lonely some people are out there . I think its both a lot of jobs that are salesrelated job, theres a certain set of responses that you can get. Lets get on the phone, let me give you a price and set up a time to meet so theres not that much creativity that goes on even though we associate that with humans. Thats why they have been able to use bots that are successful and they will keep emailing you and if youre lonely and you get search emails from what you think is a real person, a normal human would never email you that many followups. Thats true more persistent than any rational person would be you mentioned on the screen doubledigit return on investment in terms of the cost leading to actual car sales, what do they tell you about that . The idea is this going to put sales people out of business but the idea is the opposite because they get so many more leads that are real leads that will come in and buy cars they get to hire more sales people who focus on the people that come in the door rather than wasting a lot of time sending emails to people come in to buy a car so thats the idea on in a. Jennifer. I think kelly would be a great bot name but i dont think bill would be a great bot name. I was thinking that how come its never a guy . I dont need to answer that myself my guess is like bill wouldnt be great but if its like kelly with two es at the end. I trust someone named bill more. I want more data, as these get adopted. Eric, thank you. Thank you, eric. Good stuff. Have a good weekend. 20 minutes left in the trading session here look at this weve just continued to power higher, up 121 points, the high for the session, record territory for the dow, the s p and the russell right now. Airline complaints have been soaring after a series of highprofile events in may when we come back, well tell you which carriers are making the grade, wchre nhi aot and how the Airline Stocks have been reacting coming up what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at td ameritrade. A used car, my name is jamir dixon and im a locafor pg e. Rk fieldman most people in the community recognize the blue trucks as pg e. My truck is something new. Its an 811 truck. When you call 811, i come out to your house and i mark out our gas lines and our electric lines to make sure that you dont hit them when youre digging. 811 is a free service. Im passionate about it because every time i go on the street i think about my own kids. Theyre the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then ill drive it every day of the week. Together, were building a better california. The department of transportation has released its report card for the airlines for the month of bay phil lebeau joins us with the results. Phil reporter bill, a bumpy spring you had more complaints. You had fewer planes arriving on time and thats why when you look at the numbers for may you look at it and you say oh, they have had better months overall the best airlines in terms of airline ontime arrival percentage here are the leaders, hawaiian, delta, alaska. Skywest and united has been improving its on time performance. Expressjet, frontier, spirit, jetblue, a month to forget 58 on time and real el poor performance in the month of may. I mentioned complaints were up 56 increase in the number of complaints to the d. O. T. In the month of may compared to may in 2016 not surprising given the highprofile incidents we saw and even one with delta in early may, and that probably churned the mark, if you will, had people more willing to voice a complaint with the d. O. T remember, were just beginning the 2q united Earnings Report and next up will be unit the airlines afford after the bell on tuesday had delta last week and american at the end of the month and generally speaking the expectation is that well see solid profits for the airlines in the Second Quarter and most importantly that they swing to positive, passenger revenue. Guys, back to you. Phil, by the way, i think this united thing, talked about this yesterday where they are going to talk your seat off of you earlier in the week and this is a smart move. Very smart. Oh, i think youll see other airlines do this, and we eve seen airlines, do pilot programs like this or experiment with this afternoon the world the key is how easy this platform can be. Once its implemented and by the way, while that story was put a there and a lot of people were saying when can i do this, they havent actually instituted this and they have to give it a little bit time and i already have people asking me where can i find out if the law firm needs something for my seat. I said relax, they will roll it out at some point. People are clamoring for that. I want to lose my seats. Inconvenience me, please. Thanks, phil. See you later. You bet. 15 minutes left in the trading session here the dow is up 117 points weve got records all pretty much across the board, except for the nasdaq when we come back the market acronym of the week. And still ahead, theres an old saying no sleepingin the job. Thats especially true now if you work at csx. Pleene troads new boss says its emoys edo wake up to some new rules we have that story ahead across the country, we walk. Carrying flowers that signify why we want to end alzheimers disease. But what if, one day, there was a white flower for alzheimers first survivor . What if there were millions of them . Join us for the Alzheimers Association walk to end alzheimers. Register today at alz. Org walk. baby crying fly me to the moon elegant music and let me play bell rings its a biggie. Art cashin says weve got a market on order to the buy side. 900 million is the imball on the buy side and hearing a similar number the dow up 117 points in, record territory as we head towards the close. Joining us on the floor of the New York Stock Exchange our friend david dahr. Happy bastille day. 25th record if it closes above yesterday, 25th record this year on the dow. As we sit here at record highs, should the market be worried about madam dufarge as she knits off in the corner . Let them eat cake the word of the week would be gains because the Growth Outlook is real one of our keys for earnings and there you have the Second Quarter earnings. Expected to be up 8 as of now 7. 9 versus 15 gain in the First Quarter so you do see some moderation there if you take out energy which is helping it because of the low prices last year, it goes down from 15 to about it goes down from 8 to 4, and the First Quarter would go down from 15 to 11 the a is the aerial valuations we have very lofty valuations right now. Price to book, price to sales, price to gdp, thats buffets favorite, and its way up at the high end of the range. Its in the 99th percentile. The i is the Interest Rates and inflation. And there we had chair janet yellen talking about the softness in inflation. You saw the Consumer Price number today, 0. 0 month over month and 1. 6 year over year so its not near the feds target so that the market likes that they are going to keep adding fuel to the fire here in terms of not raising Interest Rates too rapidly had. I talked with some folks at Morgan Stanley this morning, they are expecting four Interest Rate increases next year. Wow. One more this year but four next year. Still one more this year. One more this year and four next year. Thats five between now hand next christmas. This is after the inflation report. This is after the inflation report, kelly. Good sgles ness. N request is the new records being set all over time. The ftse sed a new record index yesterday. The s p is within a hairs breath of a record and 24 dow jones records. Whats interesting to me is the number of new 5 itweek highs subtracting the number of 452week lows is also at a high soit means market breadth is the there. Were all worried about it all being concentrated in the tech stocks but it is a broad thing which means it can go higher, and the s is the senate vote on health care next week, and if just three people defect, that means seven years of promise to repeal and replace go down the drain, and that will affect, bill, tax policy. Not only that, but the tax reform thats what really wall street is looking towards right now. Totally. If they can get health care out of the way successfully that gives some promise to the tax reform. Can they get this done, and, therefore, can they get taxes done paul ryan said that taxes will be more difficult than health care, but thats paul ryan speaking oh, boy. Next week we have a lot of insight on the housing markets, and we have insight on the you have further information on the inflation numbers. Right. And the state of the the negatives right now, construction spending, Industrial Production and factory orders and and durable goods orders all of those also to the weak side the positives, and retail sales which came in weak this year, the positives are all the consumer credit, consumer confidence, the ism manufacturing, the ism nonmanufacturing, fed, empire state, chicago, purchasing managing index all of the softer things, but, still, people are not spending i just got back from a week in shanghai and hong kong, and things are picking up out there. Thats one thing thats helped the emerging markets and given a little bit of lift Global Markets overall. I think we heard that from jamie dimon. Youre getting ready for triathlon this sunday. Good luck. Got your bracelet ready to go. Just going to jump in the water and try not to get run over by 4,000 people behind me. Youll do very well. Hes running a triathlon and i cant even get to the 10,000 steps with my fitbit thats a pathetic thing there. The first mile in the hudson river. Swimming. One thing i do on cnbc which is keep my mouth closes. Which were forever grateful for. Thanks so much. Have a good week this board is frozen, so ive been trying to keep an eye on that one. Were up about 96 points on the dow as we head towards the close. Closing countdown coming up in just a moment here. Then afterwards, we have on the heels of todays big bank earnings, well debate whether thats where you should be putting your money or if youre better off elsewhere stay with us think again. Know new . 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 upbeat dance music bell ringing [car tires screech] [bell rings] just inside three minutes with the dow up 90 minutes, record territory and we often talk what is it that motivates this market right . A couple of things seem to be doing that price of oil and fed policy statements are back again. The dow, for the week, some volatility earlier in the week email thing, and then on wednesday that testimony from janet yellen, that is really what lit spark that got the fire going, and we have not looked back here with the dow in record territory. So is the s p and so is the russell. The tenyear with janet yellen talking about moderating in increases because of low inflation. That was reinforced this morning with that Consumer Price index report, and i saw as i mentioned to Rick Santelli earlier a forecast that said that maybe the tenyear could go back to 2. 10 before too long, but were still in the 2. 32 range right now. Wti creeping higher here, and a couple of competing forecasts for oil this week. One house said that they could see it go to 60 a barrel by the end of the year. The other said 40 were not quite exactly in the middle, but were getting there. Were at 46. 60 as we go out for the week at the high for the week whats not at the high for the week by any means is the vix, the volatility index back below 10, and were setting near lows for the year here. The low was back in early june at 9. 37. Were at 9. 38, bob pisani, as the volatility goes lower and sprint is out as well with their report that they did approach the apparently Warren Buffett and john malone about possible investments in the company, and that stock popped on those reports, up 4. 75 right now. And he drives a tough bargain. Both of them do which one are you talking about . Ill go with buffet on that one. So ill take the under on that 60 oil. We know what happens every time it starts moving up there, they increase the production the production is already still high at 44, 45 a couple things important, tech is continuing to lead, microsoft, paypal, a bunch of smaller tech names and facebook as well and the Aerospace Stocks every single day, rockwell, boeing, all on the upside, Lockheed Martin moving today the bank stocks a little bit weaker i think the important thing trading profits a little less than expected because the volatility is low. The poor cpi number means yields are lower. Thats a little pressure on them in the future and finally, remember, they tend to sell off Bank Stocks Going into the jpmorgan earnings, a seasonal thing going on. Shall we go out with records on wall street and we get ready for another very busy week of earnings and maybe something on the Health Care Bill coming up next week. Get you set up for that on the send hour of closing bell with kelly evans and company. Have a good weekend, kell. Thank you, bill and welcome to closing bell, everybody im kelly evans wrapping up a busy day on wall street with record high levels achieved as well with. The Dow Jones Industrial average adding 87 points on the bell to close above 21,600 for the first time 21,640 to be exact its about a 0. 4 gain overall the s p 500 also closing at a new record of no, im sorry the s p is six points below no, that is a new record im flipping everything around the s p is at a new record of 2459 with half a percent gain. How about the nasdaq thats the one thats shy by nine points, but russell 2000 also with a record here of 1428 so the dow and the s p and russell all hitting record closes the nasdaq is just nine points below its prior high and a strong acrosstheboard gain look at the dollar and the weakness were seeing in Interest Rates today much more on this in just a bit. Reaching a deal with apple to accept it as a Payment Method in the app store and itunes coming up well speak with bill ready, paypals choefrs and thats a cnbc exclusive about that partnership joining me, a very full house. Senior markets commentator mike santoli a long with contributor evan newmark and jim caan is with us as well, chief executive officer and cnbc contributor larry kudlow joins us on this friday as well michael, if you could, you know, we started with the bank, this morning and yet they were the only sector down at last check. Yeah. We had some of the macro numbers. What do you think is going on with the record closes the market is sort of comfortable enough with this story that the economy is kind of back in the 2 zone you have high liquidity and rates that are going to stay low and the fed thats probably been slowed down versus what it wants to do, and what does that mean it means you buy Growth Stocks and guy Global Industrial stocks which are doing well a lot of stocks related to Financial Assets themselves, and the rest of of it sort of takes care of itself i think a lot of investors are probably like me im looking for behavior of of this market to find something to assail and find weak points and evidence that its about to falter youre not really seeing it based on the market action. And you can add something to a sale always. Janet yellen basically gave the green light to the stock market, and thats what the stock market has done. Shes basically said you can keep on buying stocks number theres a disaster i dont know when the disaster is going to happen show you might as well keep buying stocks. She could have come out more strongly and were going to leave again soon it basically comes down to valuation, valuation, valuation. You can see netflix is worth as much us a want you can say amazon is worth as much as you want. Arent those the exceptions and not the rule look at google and microsoft. They are still trading with relatively high double digit multiples. Thats not crazy. Its not crazy. When you have a stock like microsoft with a 600 billion valuation, a 10 runup in that company is 60 billion you dont just create 60 billion overnight. Its not like earnings are growing exponentially. That reminds me of the Elizabeth Taylor line that it took me ten years to become a success and ten years for a cloud Subscription Company to be trading at 73. We talked earlier about adobe and lots of tech stocks are trading in very, very high multiples and they will continue to until rates go up and at which point rates will go up. No question that they are trading at relatively high multiples and i look at margin debt and margin debt is creeping back up. Dont do the margin debt. No, no. Along with investor sentiment. Margin sentiment and margin debt creep up together margin equals mischief. Hes on to something . Heres why i dont like margin debt. If you worry like basically like one of the people that tweet me and call me names actually booing the guy. What a nice guy here. Im going to try to butcher my way through it. I dont like margin debt because its a purely coincident indicator. Like saying the s p is an indicator because its higher. Im going to pull out my stats. Yes, theres auto correlation, right. You can take the numbers in a sec and the bottom line is people are feeling better which means they are buying more stocks on margin thats always been an indication that markets are starting to get stretched and when you see that with forward pes you start to get worried. Heres the issue. If the level of margin debt is going up and the level of the market is going up then im not interested but if you say the level of margin debt is going up, you know, more than just to account for the increase in price, then, okay. Historically margin debt is going to turn down and top before the equity index does so you never actually hit the very peak of margin debt. Actually if its still going up, its a bullish sign. More just telling you. I think sentiment is getting a little bit more comfortable, lets say, but thats not a divergence when you have an alltime high. Did a great job of confusing everybody out there so i advise you do you think im completely do not talk about it the rest of the day. Do not discuss it. Profit margins are also slipping Profit Margins the difference between cost and prices, watch that, and can we talk just a moment about the lousy economic numbers were seeing this is the whole point this is kind of what evan was saying earlier. I think evan is right. Yellen comes out and the Data Confirms her cautious stance. Look, im glad Consumer Prices are low im fine with that they had a good thing. Im not fine with monthly declines in retail sales now, some of that may be misreported because storebased sales are too heavily weighted and amazon is not, but, still, youre looking at 2. 4 whatever, thats not great year on year. How about investor production . Nobody talks about investor production. That was okay today. The Capacity Utilization number was a little soft. Manufacturing over the last 12 months, i smooth things, 1. 2 thats terrible. Were coming off a string of declines and never had Industrial Production falling while the economy wasnt in recession before and we worked through it. Business equipment, business equipment, that gives you a picture into whether these firms are investing or not business equipment, 0. 7 last 12 months i have a thought on this number one, i agree with evan, the fed cant do anything on this, nothing, nothing, nothing, but the other point i want to make is all these businesses, large and small, they have a lot of cash but they are not going to pull the trigger to make the investment to expand, they are not, until they see the tax cuts coming out washington. Thats the one piece of this market that we havent been through yet. They are all waiting, the rates, the rules. Do you think its finally showing some life now that they have this revised bill out there and so far two people have said no and maybe something happens next week . The Health Care Bill . Yeah, i kind of thing it will go through i think thats a really wussy bill myself. A lot of spending, a lot of topdown Government Spending to win over three liberal reap caption. I cant bleach they left the Capital Gains intact. That wasnt the point. I cant stand that. Its my point. But, look, if were talking about a decade long effort to do something about obamacare f. They had gotten hung up on the taxes. What saves the bill is ted cruz insurance choice that reagan used to say give me half a loaf now, ill take the other half later well, im not even sure they have half a loaf in this bill, but the senator cruz amendment which gives you insurance choice is pretty darn good. That kind of breaks the back of the original obamacare mandate. On the point of d. C. Dysfunction, just remind everybody that Jpmorgan Ceo Jamie Dimon kind of unexpectedly went on a ranlt about the gridlock and that was on the jpmorgan cam, listen. Since the great recession, okay, which is now 8 years old, weve been growing at 1. 5 to 2 despite the stupidity and political gridlock because the American Business sector is powerful and strong, and its going to grow regardless of whether people want to wake up in the morning an buy a car, and it would be much stronger growth had we made Intelligent Decisions and weve become one of the most bureaucratic, confusing, litigious societies on planet. Almost an embarrassment being a american citizen traveling around the country. I think this is being a little bit overplayed, but it was kind of still surprising so hes running, is that what were going to take away from it thats a question honestly, theres a level of exasperation, the fact that weve been talking about the same kinds of things for so long, and from his point of view, you know, hes got this bank that really is just kind of a play on the on the performance and the success of the country. I mean, he has a huge window and Consumer Spending. No loans. The fed is paying them no to the loan, how stupid is that. Were not talking about what he said but that the quarter is light. Thats a knot on the bottom line. Entrepreneurs are strong. Hes saying the business and entrepreneurs are strong, but hes right and go back to my point. What hes also saying if we dont get resolution on the tax cuts and let me add the regulatory burdens, nobody is going to pull the trigger and thats plaguing the economy which fundamentally is going and you dont know whats cooking, youre not going to jump in. Corporate tax cuts is not going to increase corporate profits. Were going to disagree how can you possibly say that a 15 slash in Corporate Tax rates, that immediate expensing of business equipment and 3 trillion coming back from overseas will not promote growth or investment . Are you serious about that theres already enough cheap thats available for them if they want to worry money more cheaply through the bond markets, the problem is theres no question. There the problem is theres not enough investment. I look at the production side of the economy. Thats what has been miss mc and why the numbers are so low actually, Consumer Spending has held up rather well in this tepid economic economy the problem has been lack of business investment, lack of productivity and basically no increase in wage and the business tax cuts directly address that, directly. Larry, larry, we know where you stand on Corporate Tax cuts. Yes. Youve made yourself extremely clear, but isnt it possible im with you 90 of the tame but isnt there with the rise of manufacturing and cheaper goes and you dont think theres any mobile, the role right of return. What these folks want to know is what they are going to pay uncle sam. Thats what they want to know. Its real simple. The same as last year, they know. And instead of borrowing bonds just leverages the economy even more that may be your take, but thats not a healthy thing. What they want to know is can we bring the cash thats overseas back they would rather do that, but they dont within the to be double taxed. You have to the am point given the majorly changes. Have you to consider its maybe more than fracking, well, guess is basically the strongest part of the economy, basically, you take that ought and the many. I want you to read and commit to memory after my book, the jfk and reagan revolution. Managed to somehow get a book promo in here. Ive read it, already read it. Scales of Creative Destruction where the new replaces the old and the economy is healthier and stronger with even more employment read that. And im sure that has a lot to do with tax cuts. By the way just to illustrate, tech is having its best week of the year despite. Aerospace this is a u. S. Stray. Yes. So my questions i dont know starving for National Investment who it help to have a tweak down in tax rates youll sure it would. I dont think were in like suspended an sglags would it help a lot, just those two words . I hear a lot of ceos saying they are not investing because they are unsure of the Regulatory Environment i dont hear a lot of ceos saying they are not investing because they want an additional 15 misreturn and 1 5 tax cut with the Corporate Tax rate. You and i have talked to different ceos i think you got the story right on regulations, but i dont think you have the story right on its. If it takes you 35 years prit off and at 15 Corporate Tax win. Im just saying we could grow this economy at 2 , 5 . Not without bringing in all the immigrants. Kennedy did it, reagan did it, even bill clinton did it is. Just need another baby boom 20 years ago, thats what we need. Some population for us. Maybe we need to open the floodgates of immigration. You should tubing trump about that one. I have. I have. Jim, any parting thought you want to add here i would just say as much as were talking about europe, the pmi is really positive Consumer Sentiment is higher in germany. Stocks trading at a 50s discount and the u. S. Trading on a price sales basis and 40 pricetobook and there is opportunity looking abroad and while the u. S. Is focused on this. Ill take the u. S. Any time. That was those eu, specialists, not bite, man. They are going to change brands thanks you guys thanks for transpercent. That was great. Big banks are taking a dip on the heels of the numbers released this morning. Well see which are best for investment next. And paypals stock down about a percent after a big pop two days ago on its app store deal with apple. Well speak with the c. O. O. Bill read bein a deal and tell us about the show via facebook or twitter or sd enus an email youre watching cnbc, first in business worldwide you always pay your insurance on time. Tap one little bumper, and up go your rates. 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. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. North carolina repealed its controversial bathroom bill so businesses that boycotted the state have begun to return texas is still adding jobs at among the fastest rates in the nation minnesotas best category, education. Georgia finishes near the top for workforce and infrastructure and the winner is washington state. State. Thanks for this did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats up to 16 times faster than slow internet from the phone company. Say hello to faster downloads with internet speeds up to 250 megabits per second. Get fast internet and add phone and tv now for only 34. 90 more per month. Call today. Comcast business. Built for business. Welcome back four u. S. Banks kicked off earnings season today. Regional bank pnc had more promising numbers than jpmorgan and citigroup so regionals, could they be poised for a compaq well ask Jason Goldberg, analyst at barclays. Pushing on the largecap names and our other guest is taking the side of the regional bakes in this discussion steven, let me start with you. How much underperformance have the regionals seen relative to the big banks . In the last month alone the regional banks have underperformed almost 5 , and since ccar its been another 2 . Theres a lot of regional for them to make that number up. And is it your argument that the regionals are a catalyst to that i think many so of the super regionals and the regional banks below them do have an opportunity to actually demonstrate some loan growth, and, you know, actually see the needle moved on things like regulatory relief, more so than these larger banks. Jason, what would you say to that you know, construct it on both the largecap and super regionals though the bias is towards the bigger bank. In part while the stocks have outperformed as of late. Two or three multiple points cheaper than them and while they are not competing first on the regulatory rollback theres a lot more for them to pick up they were the most adversary impacted, but they will be the much bigger beneficiaries as i think the new Federal Reserve administration goes through this treasury white paper and implements a lot of the recommendations. Jason, evan num ha r. What are you expecting from the trading results of the quote, unquote big banks next week and would i call it the low volume low volatility impacting all or is it just a secular trend in. While jpmorgan is down over a yearoveryear basis actually slightly better than expect. Got it down to 15 during the quarter plus and you saw some to have the results come in better than anticipated. Looking first half trading revenue year over year they should be flat to higher. So its its, you know, a big business and it will kind of move around as markets move around but i think over time, you know, they should grow and the u. S. Banks are taking market share. Steve, one thing missing from this whole cycle on the regionals has been obviously a lot of m a and that used to be kind of a staple of the sector might we see that be another area that regulators take a lighter touch, and if so what sort of size institutions do you think could potentially be involved and stay under these perceived caps yeah, yeah, i mean, thats a great point and today the 30 billion to 50 billion kind of an asset bank could do a dole and they want to go through this threshold at 50 billion. Youll see ramping m a and the super regionals, they are going to need some sort of guidance from regulators to say, yes, give them the green light and then you might see the 30 billion to 50 billion asset banks getting picked off because theres a lot of them waiting to be rolled up, the bank uniteds of the world would really like to sell, but theres no buyer today. Who are your best who are your picks in this sector . Pinnacle and bank of the ozarks which has been contentious really and who else . Banks, those are two great xamples. Banks in 20 billion in issate range with a lot of room to grow they are delivering 10 to 15 toss 20 loan growth and regulatory relief will move the needle for those guys. Jason i think mentioned that the larger banks traded at a lower multiple but end of the day they are drastically less profitable, too, so when you have a bank like pinnacle putting up a 140 roa, theres a reason they should get a better multiple so i think youll see those stocks outperform significantly in the next six to 12 months. Jason, well give you the last word before we go i would like to hear what your topics are jpmorgan and citigroup among money stand darts are in terms of the profitability metrics. Just about his return on assets, what would you say about that. Theres really good profit ability metrix and think about jpmorgan this quarter at wells fargo, 14 , 15 rote a lot of room to go higher, particularly if they get regulatory reform. Jerks thank you good discussion. Thanks Jason Goldberg from barclays and steven scouten. Now is a deal on the horizon for paypal given some moves by digital rivals and big banks someanalysts think an acquisition is likely. Well speak with the c. O. O. Bill ready and shutting down corporate shut eye and why the boss is welcome back it is time now for fast take, and the first one up today is the news that sprints masasone reached out to Warren Buffett and john malone for a deal sprint shares at more than 4 on the close, and also sprint launched new cheaper phone Leasing Options to spur customers to upgrade more often, and they are the only carrier even offering phone leases guys, what do you make of all of this swirling around super cut ter business . There are three or four in a four, you know, company set, and they need capital. I mean, its been known they need capital and need some sort of sponsorship for the network down the road. Id be surprised if it was anything transformative that came out of this besides some sort of preferred Stock Investment for buffet or Something Like that. If i two people i would not want on the other side of the table from me, john malone and Warren Buffett. They are always going to get only getting a deal if they think its a nobrainer for them. I think youre right. Hunter harrisons transformation at csx continues as hes cracking down on letting train engineers and conductors take short naps while the train is stopped he wants to give employees more predictable schedules so they can plan sleep at home better and this has been a Standard Railroad attractive. Railroads are a trove of archaic practices. Not just naps for people on staff. They also do many things. All his personal brand of whipping railroads into shape. He did it previously, evan, and his whole point if were doing precision railroading, youre going to get this more scheduled, and just like if youre a pilot. As a business matter if hes the ceo, if he thinks its right. Fine as a personal matter, ive been a huge napper and anybody antinapping i have a huge principled problem against this. Its a genetic thing my daughter is a huge napper i think it runs in the blood. If youre not in the next block well no why. Im very pro napper next, todays overheard item in the journal. Turns out drugs known as pd1 inhibitors had the side effect of darkening patients gray hairs. If this holds up this would be huge and by the way the people whose hair was darkiened are also had Better Overall Health outcome. For the actual purpose of the treatment. Yeah. If they can isolate what about this drug is helping that happen, you know, theres a long history of drugs that were kind of tested and intended for one purpose and they ended up being prescribed for the side effect. Mmhmm. There may be a future. Im looking around sgleer there around here. Theres a little gray. A little salt and pepper. Im worried they may recall subject grecian formula to approval. Did it have something tox nick it . It was just a joke about the fact, you know, they would subject use the shoe polish thats still okay. Shoe polish, that stuff adds up. I guess that joke didnt land with you. Its okay you need a nap. Its a generational problem. Just like the just for men for the beard. Its an old product. Hand more pain for snap as rule instagram owned by facebook, of course, is sponsoring offering sponsoring filters for free to advertisers. This is exactly what Morgan Stanley was warning about in its big downgrade of snap earlier this week, guys. How can they possibly compete . I dont think directly head to head you can. Its still trying to steal eyeball hours away from facebook, and, of course, facebook is going to press its advantage in the fact it doesnt need to make that much advantage. They are pressing it hard. I want to go back to the discussion around the snap ipo. Dont tell me i said snap. You said whats the matter if millenials buy the stock at least they get experience. Its a learning experience. They are learning the hard way. The stock is down. Down huge. Lost half their money. If they bought at no. Most bought in the 23, 24 range. If invest were thats, everybody would be a billionaire, okay . Its not bad at least you get interested. Why wasnt that a good investment, maybe the imitators are a better investment than the innovators theres a lot to the my bet is snap goes the which of zynga or farmville or whatever it is remember farmville grecian hair or whatever. Time now for a cnbc news update with sue herera sue . Hi, guys. Heres whats happening. The lawyer for betty shelby, a white Police Officer who was recently acquitteded an unarmed black man has submitted her resignation. She had been working in an administrative role since returningto work. Jimmy carter was discharged from a canadian hospital this morning after being admitted on thursday for dehydration the 92yearold former president was working on a hab tad for humanity project in winnipeg one person was killed when a singleengine plane crashed this morning at the San Gabriel Valley airport in al month, california Officials Say the pilot was the only person on board the plane the faa is investigating. And in the mens semifinals at wimbledon, marin cilic defeated american sam querrey in four sits 76, 46, 76, 75 cilic never lost to querrey in five matches later the 35yearold Roger Federer defeated Thomas Berdych in straight sets and is seeking his eighth wimbledon championship. Federer is 35 and Venus Williams is 37. I know. And rolling into the finals i love it. I cant wait it im going to be up early. Do you think do you think she can do it at 40, why not why not. Three years from now. Been in fantastic shape for her whole life. Either her or serena. Thats right, yeah, and she has the advantage of experience. Shes played on that court so many times, and shes facing a lot of younger players where this is, you know, a newer experience for them. Well see. So true. It will be exciting tennis, no matter what. Im pulling for all the old people. Wasnt it like late 20s was over the hill. Exactly. By the way, a pitcher could never hold up. Till 40, really plenty of them do. Guys who threw a knuckleball. There you go. Bartolo colon. That a good weekend, you guys. Next year paypal will turn 20 years old. Up next well talk to the companys c. O. O. About their recent deal with apple and how they are using epayments with all the moves. Either youre a cat person like mr. Santoli or youre not like, for example, joe kernin and melissa lee. How did i get tagged as a cat person you love your cat. Cats do loive in my home. Well check out a home that only Michael Santoli would want to buy hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Welcome back we set some records on the wall street for the dow, s p and russell. Nasdaq still about nine points shy of its record close will go level. It was a gain of 85 for the dow today. It was buoyed in large part by some of the weaker inflation data this morning. By the way, the banks had better well, they beat on results but the financials were downtoday. The inflation number sent the tenyear yield lower and sent the dollar significantly lower and you saw the flip side of that as well with trades higher in oil and gold, silver and some of the gold miners, too, so theres your gains for the major averages meantime, paypal announcing this week that iphone and ipad users will be able to use the payment platform to use purchases in the itunes store joining us now is more chief operating officers bill ready in a cnbc exclusive welcome, sir. Good afternoon. I use paypal and venmo which we should talk about but when i buy things in the itunes store thats all automated already, i thought. How is this going to work . Whats the User Experience well, what this really does is uses itunes the istore and apple music to use paypal to make purchases and our great onetime buying experiences to make it really seamless for users to make a firsttime purchase or tore add their, you know, favorite way to pay. Those things will be prevalent and available inside of Itunes App Store and apple music. This is a little off the subject, but i was curious what the paypal corporate view is on crypto currencies and bitcoin and digital currency, and how you see that as a threat to your business and maybe helping your business its something we stay very close to obviously you know, we think that really, you know, theres some foundational things that can happen there, but a lot of those will take many, many years to play out the thing thats really happening right now, and where paypal is playing a very central role is the move to mobile commerce and, you know, on the move no mobile commerce youre seeing a lot of the partnerships that weve done, whether its major tech players like facebook, google, apple or visa and master card or other banks, things like that, is really because were playing a central role in mobile commerce and the consumer has overwhelmingly moved to mobile as their primary Computing Device, and you have a whole ecosystem really trying to figure that out and over 100 billion in mobile volume last year alone, we have a pretty central role in that and thats one of the things were very focused and were working with the ecosystem broadly and enable ecocommerce for our 200 millionplus users. Were showing a chart of your stock up 40 and the entire area of sort of payments has been one of the strongest groups in the market i wonder if you can just describe what you think is happening there, what the market is telling us about the growth is it just about the electronicification of money and the fact that you and the Payment Networks are just going to have a Central Place here, or i guess its hard to sometimes decipher the different layers of people where they occupy in this whole space youre right. It is a very its very broad space, you know. I think Digital Commerce is one of the most rapidly growing areas within the world of payments, and with that paypal is one of the largest players and we operate in 200plus markets around the world we have 15 million plus merchants that we work with, and so in that area, one of the things that i mentioned mobile had become the primary Computing Device for consumers have you a whole ecosystem trying to rewire and figure out how to serve of customers there so thats creating a lot of growth and opportunity and paypal is really unique and we either only player that operates on both the consumer and merchant side of the payments landscape and importantly can control the experience end to end for the consumer and the merchant and do that globally in 200plus markets around the world. Thats a really unique thing and why you see us working with many of the largest players in the ecosystem to light up great experiences around the world. So, bill, there are some analysts who think you should acquire square and that it will help push venmo into more physical locations wouldnt that be a good thing for paypal i cant comment on any one particular opportunity or things like that. The thing that weve demonstrated that weve really reignited paypals organic innovation over the last few years and you can see that with things like paypal one touch that has 50 million plus consumers on it, deployed across more than half the Internet Retailer 500, and 200 markets around the world as well you see the great growth with venmo and the things were doing there like pay with venmo and bring paypal merchants into the venmo networks so we have a lot of fantastic innovation thats happening and we certainly keep our eye on whats happening in the land skwap and the great thing as the leader in the space is that we can take a look at things and really move when we feel like its a right thing because were leading on so many fronts, that you know, we dont feel like were in a position to have to do anything. Look, venmo is a brilliant acquisition and thats grown organically and by the way will come under huge pressure as zell launches when you have the entire marketing apparatus of the u. S. Banking industry behind one app how can venmo actually compete and win . Its interesting. Sort of everything old is ne again. When we were Getting Started with venmo back in 2011 and 2012 everybody said to me, banks, banks have had potops since the late 19990s, this isnt anything new and why are you doing this it was a different experience that Consumers Wanted, particularly millenials around the social aspect of the experience and theres a lot of volume that happens on it and consumers really choose venmo for a different kind of experience its as much about the mobile ease of use as the social experience because thats where all their friends r. If you go on a college examines, many surveys are out there, if you could have three apps on your phone, venmo is pretty consistently in that list so its really a part of the millenial experience and we think thats something very different than what else is offered out there. But im just looking at we talked about this last block, instagram and Snapchat Snapchat came and took millenials by storm and zell has the same features, copies what youve done so well and by the way if my parents are on it and they are the ones transferring me money maybe it does shift the network in that direction, right . Well, i think the social aspect of venmo is something you dont see others doing and i dont know if others have license to do that i think thats something that users think before, venmo as a unique place where they can talk about these kinds of commerce activities, and so i think its a very different scenario there, so i think its something when users love the app that much, we think theres a great opportunity for us to not, you know, enhance that and expand it and the interesting thing for us is that just as we say with paypal, paypal started out as ptop only and as great at p to p was it was better when you expand it had broader into payments and what were doing with venmo, were lighting it up with merchants without having to do work to get it which expands the way venmo consumers can use it and gets to what the paypal story was. P to p is a great early use case and so much more Consumers Want from a digital wallet and we think we can continue expanding that for our venmo users. Bill, thanks for joining us thank you so much for having me. Thats bill red re, the c. O. O. Of paypal what will do amazon and crate barrel and fedex have in common all three are building warehouses in tracy, california. Well head there for the Economic Activity next, and later its a house furnishedch felines. Jane wells reports from the ultimate cat connedo and tonight on stonfa mey is back with another bold call. Theres more closing bell after this bell ringing [car tires screech] [bell rings] all three are building after this you always pay your insurance on time. Tap one little bumper, and up go your rates. 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. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back they are the new boom towns and were not talking about oil or shale. Were talking about Fulfillment Centers. They are creating jobs across the country and transforming the economies of nearby cities aditi roy joins us with this crazy story. Aditi . Reporter it is a crazy story. Hi there, kelly. Were in tracy, california, about 70 miles from San Francisco, and this has been a magnet for Fulfillment Centers this one, crate barrel Fulfillment Center and behind it is an Amazon Distribution Center and its one of two in town and its onequarter of one intersection here in town. Lets take a look at many so of the other hot spots, central jersey, lehigh, pennsylvania just to make a few the common denominator among all of them is they are all in mid sized cities on the periphery of major metropolitan areas so your operating costs and land are pretty cheap, and labor is ample. We wanted to take a look for ourselves, so we took a driving tour of tracy and found big brand names of fedex and safeway just to name a couple, and all of them are bringing jobs to the area this is an area mostly known for agriculture and a little while ago food manufacturing, and also it was a railroad hub back in the day. All of this, one expert is telling us its actually brought in 10,000 new jobs in the last five years in the county alone, and thats even prompted the city to come up with some drone video to try to attract new businesses to come here and take a look at the available land here some critics do argue though that Fulfillment Center jobs arent that highpaying and not enough to sustain a family, but mayor arent enough the sustain a family, but the mayor says they add a lot of economic value. The people who come here, throughout the region and what that does is it brings the people in tracy, it increases our daytime population, which in turn helps us attract more businesses like restaurants and retail and commercial. He says that in the last quarter alone, their Sales Revenues went up 35 and thats helping build parts and do things like improve infrastructure, kelly. Im curious to your point about whether you know, is this goingto be weve seen these developments and theyre very industrial and theres not a lot of amenities nearby. Do you get the sense that could change they start to have more of a city feel to them . Does that need to happen yeah. You know k like even going downtown here for instance, there are restaurants and shops and they seem busy here on a friday afternoon theyre trying to attract a lot of companies interestingly, the centers are only like the third most fassest growing segment here in tracy. They say the first two, other two is retail and first is manufacturing. Specifically, theyve attracted a number of companies that provide the sheet metal for semiconductor xaeps that are not far away in silicon valley, so they are reaping the rewards of being close to San Francisco that could be the game changer for them crazy i love it. Could turn all the disused, occupied shopping malls into these centers. Theyre near the highway, easy to get to lots of space. I understand why the mayor wants to do it, but its a hallowing process. Its a shifting whats the difference if you were going to be b a retail job and now, you have a warehouse one. There are fewer warehouse jobs than retail maybe id rather have a warehouse job than not thats good for the economy, but they dont require that. We didnt d show nearly as many on that map those are just major Fulfillment Centers. There are so many of them. They are constantly hiring weve had the same discussion when the walmart came to the engineer of town and they needed fewer people per square foot and became the biggest employer for better and worse coming up, jane wells is from the herfect home for cat lovers. Maybe. In anthony you know, ive been to a lot of house, done a lot of stories, this is the first time im speechless up next, the most unusual home in america is the cats meow. You are loved if you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia. Cat lovers, if youre on the house hunt, rejoice. Jane wells has found the purrfect place for you im in the master suite of is the most unusual house for sale in america 240,000 catopia. Covered wall to wall, ceiling to floor, with cats its b even on the furniture the woman is shy, but when her husband became terminally ill, she turn ed this house into really a work of art a way for her to have an outlet, but the cats now out of the bag. The listing has gone viral we are the first news crew which realtor liz keller brought here in person. So, this is it. Its cats floor to ceiling. She has multilevels this is by far the most unusual thing ive ever seen or heard about. She worked on this process over years. Its been a ten plus year project. If you note the ceiling is all cat puzzles. I would like to see it become a cat sanctuary. A rescue i see this as a totally wrennture. I think youll never find another house like this. It has been shown a few times. No offers yet. It doesnt smell im really allergic to cats and i havent had any problems here. The realtor say ifs you dont like cats, its still a good house, just bring a sandblaster. So, theres om two cats this woman had and did all this its such a sad story in a way because it was an outlet for her. I hope they turn it into a cat shelter or you know, roadside stop, i dont know whos going to buy it . 230,000. I just wonder. A great cat b and b exactly youre on the road and you have your pet you know, you bring the cats on the road all the time, dont you, mike . Only when absolutely necessary. For two hours in the car you want to put them somewhere to say theres tu lip and beauty. You could have a house just like that one. Ill drop jane a note a heartwarming story. We have to do thank you for bringing it to us. Bringing us the cat house. We have a news alert on David Einhorns green light capital. Thats right. I have a letter september to investors today from green light showing the returns for the Second Quarter at negative 4 . Bringing their year to date returns to negative 2. 8 he calls the quarter a bit of a quote head scratcher saying that their five biggest earnings that met or exceeded earnings while their shorts announced earnings that mostly disappointed highlighting, air cap buyer. Console, gm and mi len is another one they highlighted in the report among the shorts he discussed, amazon, athena health, tesla which we discussed a lot on air yesterday. Digging through this letter, a bit more, well let you know what we find out thank you its been a tough period for him. Hes dropped a couple of billion in assets. Had enough for, not enough for greenlight over a three month period. Irall about value weigh. In a market like weve had, it kills him. This market, if youre a Value Investor is a bad market for you. It shows its a tough market to short. That was it its interesting because you have had a lot more variation in terms of stocks and sectors. If you were short the retailers, you did fine you probably didnt if all you cared about was looking for real expensive stocks i think netflix was a bigger short. Itsfied valuation the way amazon has they have really struggleded ever since hasnt been above high water marks. He may not have any assets left by the time hes right. The timing is everything. Thank you so much have a great weekend that does it for closeclosing. Fast money begins now. Fast money starts right now. Energy stocks having their best week f the year and the chart master who correctly called the decline says something has change ed and hes really to ma a gold call. Plus, steve ballme rerks with surprising comments about twitter. Well tell you what he said thats got investors so excited and later, seaburg is rounding out her pitch week with one high flying tech stock he thinks is about to take off toew