Transcripts For CNBC Closing Bell 20171009

Blade runners disappointing response this weekend. Look at amc down 7 , and regal down 4. 5 . Only did 31 million over the weekend, they were expecting double, more than that well talk about that. And a massive unity rally being held in sfan this weekend. Were going to look at what this all means for the countrys relationship with catalonia and its place in the European Union. Former head of the European Central bank, jeanclaude trichet, himself, will join us is a cnbc exclusive coming up looking forward to that very mump. First, Goldman Sachs out with a new note saying tax enthusiasm will outweigh an earnings slowdown this quarter a feud between President Trump and a key republican senator could put tax reform in jeopardy cnbcs editor at large john harwood has the details. Let me put it in a bigger picture. The feud with bob corker is one of many challenges facing this tax bill first of all, it doesnt help to antagonize the Committee Chairman as the president did over the weekend and when you only have 52 members of the senate, you got to hold all of them. Think about the raw feelings that theyre dealing with right now. Theres the corker feud. There is the populist challenging that Steve Bannons talking about to incumbent republican senators. Theres the tension between the white house and Republican Leaders in the house and senate. None of that helps also doesnt help to have so many dubious arguments being made the white house has made the claim that this tax reform is going to expand the economy so much that it wont cost the government anything. That same Goldman Sachs note that you talked about said thats not going to happen said slight bump to growth, only 20 of the cost will be covered by that growth you also have the questions about is there going to be a tax cut for the wealthy . The Administration Says no, but the numbers say yes. And theyre going to have to deal with that finally, theres a list of open questions. Things they have not resolved about their tax plan which loopholes exactly are going to be closed what, if any, is that new top rate going to be beyond 35 . And how large is the child credit ultimately going to be . Those questions will all help sort out what is the balance between tax cuts for the wealthy, tax cuts for the middle class and the working class. All of those add to the pile of homework that the administration and republicans have to achieve before they can pass this bill and the bob corker feud doesnt help any the on the tax reform package paying for itself, you know, that was the same argument they used during the reagan years. I know im preaching to the choir here, but we ended up with some pretty big deficits by the end of the 80s as a result of all that even though the tax reform, itself, was pretty successful. Bill, Goldman Sachs says that the tax reform, this is in line with economic estimates, will pay for itself about 20 steve mnuchin, the treasury secretary, recently said not only will it pay for itself, it will help pay down the debt. Very few serious economists believe that kevin hasset, chair of the council of economic advisers, has a very optimistic take on the growth effects much more optimistic, for example, than Goldman Sachs. Yeah. There is the precedent all right, john, thanks very much john harwood joining us from washington lets get to the Closing Bell Exchange the bond market is closed as you mentioned because of columbus day. So we dont have bond trading. But we do have stock trading sort of. The dow down just 22 points right now. Steve grasso with us, director of Institutional Sales at stewart frankel, joining us from post 9 here. Jack, cofounder of universal compute exchange is in chicago, theyre still trading stock index futures. Michael block, chief strategist is also with us for the Closing Bell Exchange today steve, this is one of those days we take with a grain of salt because volume is awfully light as well, huh we have a number of reasons even on a low liquidity day, bill, to point to a selloff. We havent really gotten a selloff. I think the tax reform or hopes of that carrot on a stick of tax reform is the main reason why we ratcheted up the last leg in the s p. Im not really sure somethings going to get done but its mu enough to keep the market going and ball moving higher in the s p. Mike bchael block, semicondur are doing well today youre in the long growth camp you like tech, biotech would you add semis to that this is what you want to own into weakness. I dont think the final climactic buying has begun yet i think thats going to happen then we can get a selloff. The way im playing this, like being long nasdaq type stocks and actually short the russell 2000 stocks. Had a nice runup, perceived as the stocks that get the best benefit from the tax plan. I think taxes get done this year i think its going to be a lot of bumps along the way in the proseceeding segment m neutral overall those are my big bets. Michael, the way youre playing it is the way the market largely has been which is is to say we dont really want to price in anything. Were just going to stick with the secular growth stories in a way youre conceding the point it may not happen. I dont think im conceding the point it wont happen. I think taxes will happen. In the very short term, im speak bing tactically here, i think its going to be bump rs in the road on the tax bill. Whether its with corker, conservative republicans, more liberal republicans and were going to have this 237 by the end of the year i think this gets done and its bullish. I prefer to skip some of the hiccups. This is how i want to play it. Jack, i want to ask you, currencies are trading, were going to be talking as you probably heard to jeanclaude trichet earlier this hour about the Independence Movement in spain, brexit negotiations that are kind of stalled this point what impact do you see as the dollar continues to trade lower here do you see the dollar moving much lower from here are we putting in a bottom what do you guys think well, you know, it feels as if were coming into a bit of a bottom especially if the feds going to start to act over the course of the next few months. Lets keep this in mind, bill, this weaker certain urrency, we dollar over the course of the first seven, eight months of the year, a real tailwind in the sale of stocks as we see the dollar start to move higher, all of a sudden are we going to start to have problems already starting to see downward revisions with earnings for this period the real question goes back to what you were talking about earlier with tax reform. Steve grasso was absolutely right. We priced in near perfection if we dont get something this year, this market is very susceptible to a selloff the real question aside from if were going to get it is how much were going to get. Are we going to get a corporate rate down to 25 , are we going to get a 15 thats the difference between, say, adding is15 or 20 to the s p earnings over the course of the next year oar two. These are Big Questions that need to be resolved. The real question, do we have enough time between now and the end of the year . Bill, this is an administration, a president who wants a lower dollar, on record saying that since before he was elected. He wants lower rates before we get ahead of ourselves thinking the fed is going to move in december, we better r lower expectations for the dollar, tenyear rates and maybe Higher Expectations for the equity market because its not a headwind. You better tell that to kevin warsh, too, by the way. I was going to add the strength of the Global Economy has been one of the main reasons w behind this sort of comfort with the rally, too michael, real quickly, the China Services number last night was not to good. Any concerns there about Global Growth slowing at all . I definitely have concerns. I think emerging markets in general over their skis. China is a special case. Identi ive said this before, ill say it again china has more ability to affect things through stimulus more quickly than any other jurisdiction on earth. Lets not underestimate that ill say this, we have the big communist Party Congress coming up next and ahead of that, i real will i dont see how you can be short china look at how susceptible these emerging markets are to hiccups, look whats going on with turkey today, think brazil was way too popular and pricing in too much perfection and reform and gradual growth back there. Im actually in a strong dollar camp as well and actually think the dollar can rally here. For me, i want to look at shorting u. S. Industrial exporters and also another way im playing this, thats going to take some time, though, of course kelly, just real quick to button it up, reserve requirement, ratio, china, cut them and now granted its a 2018 story first quarter, look at what the fxi did the last time they cut it, february 2016 up aggressively. So i wouldnt get against emerging markets. Did you say the fxi, steve . If you look at the fxi whats the fxi . If you look at the china large cap stocks. Thank you. China large cap stocks, anything china related look at alibaba, im personally i thought that was a chinese streaming service. Pep boys, steve, michael and jack, thank you for joining us today. Appreciate it. See you later. Ge is the worst performing stock in the dow today after a number of executive changes. Morgan brennan stepping in to give us details on that story. Morgan reporter hey, bill, thats right. Ge shares are down more than 3. 5 right now after leadership changes under new ceo john flanery including the retirement of cfo jeff bornstein. Down about 4 . Were at session lows. A number of analysts say that comes as a surprise given the fact flanery initiallyexpresse support for bornstein. Since he was elected vice chair in june. They fear this development may signal the upcoming numbers may be worse than expected remember, ge reports earnings next friday but then perhaps more importantly, flannery meets investors to lay out his strategy andup da update the lor Term Financial Targets in november thats down 25 so far this year now. The change overshadowing a very notable one, trian funds ed garden is taking a seent the board. That was announced this northern trian owned 1 of the stock since 2015 and the move could according to experts who tracked his work on other boards including thrill ones be a positive right now the stock is trading lower. Back over to you. Im not going to say this is whats going to happen but theres a precedent for new ceos coming in to throw the kitchen sink and everything on their first earnings report. If i knew that report was going to be terrible, id wait until it got out for the public to everybody get upset then id throw them under the bus id keep that ammo. Its not just bornstein other familiar names in ge are leaving the company. Well, you got to bring your own people in. One of the most reporter exactly women in that whole sector reporter yes, exactly. Major changes in play. Thank you. Reporter thanks. Morgan brennan, thank you for joining us. We got about 45, 50 minute to go in the session with the dow down 27 points right now its moved a little bit lower with the s p, nasdaq, the russell nasdaq and s p down. 25 . Td ameritrade clients cut back on their stock exposure last month next, j. J. Kinahan. Later, were going to talk about the outlook for real estate and President Trumps tax reform plan with vector group ceo Howard Lorber, also happens to be a friend of the fpresiden. Hes ringing the closing bell today. We want to hear from you, reach out to the show on twitter, facebook, or nd uses an email to nbcuni. Com youre watching cnbc, first in business worldwide ry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. bell ringing so, i was at mom and dads and found this. Cds, baseball cards. Your old magic set . sigh and this wrestling ticket. Which you still owe me for. Seriously . 25 . I didnt even want to go. Ahh, your diary mom says it is totally natural. 25 is nothing. alert beep abracadabra, bro. Settle up with your friends on october 17th with the bank of america mobile banking app. Welcome back have a look at shares of tesla today. They can go down theyre down 3. 5 or so after the electric automaker delayed the unveiling of its semitruck so it can focus on fixing production bottlenecks on its new model 3 vehicle. Amid many reports about building them by hand and further production delays. Meanwhile, Td Ameritrade clients were net buyers in september but did day down thran their exposure to the equity markets overall. Joining us, our friend jj kinahan. I want to hit you with the report out that showed there was a decline in trading with Exchange Traded funds. Right. Over that period as well many i know one period does not a trend make what are you making of that . Starting to see fatigue in the hot sector of the market i think thats it people have set their positions going to the Fourth Quarter a little bit, they have their overall market from a retail point of view, we see a lot of people who use etfs for overall market, spyders, qqqs, ibm with that, i feel like they have it, not necessarily rotating it out because were at alltime highs. Theyre a little nervous where to go. As we talk about in this report every month, some of the individual stocks now become more popular or a place to go place things in a more individual basis where you think they might be underperforming or which brings to mind a stock like tesla is that popping one way or the other for you guys lately . For this month it hasnt. Weve seen it in our report as a buy a lot over the last year one thing about this report, again, it measures people who make at least one trade a month, and their exposure, as bill said, to the market is down a little bit this month tesla was not one as weve seen over time, it has been this is actually our first downward and weve had five months in a row of people taking many for exposure. So maybe thats a little bit of warning sign people are still as bill said buying stocks. What theyre doing is buying protection with it or buying lower volatility stocks. I mean, they were net buyers but they reduced their exposure to equities. What were they buying . So, you know, one thing that stood out to me, a little bit of a change, they bought apple as youd expect they bought home depot end of the hurricane one of the interesting things is they exposed themselves to china. Look at that, see alibaba, tencent, jd. These are high flyers, theyve done so well over the last year. They have i think what it shows, kelly, you know, sometimes i think people forget what a Global Economy we have, they have done well theyre continuing to perform. Im not saying we should absolutely go out and put all their portfolio there. Getting back to bills point about etfs, they have their overall Market Structure in place. Mapped out. Now theyre going for some of the other things they think may perform. And as i said, i hope its not a full part of their portfolio but its okay to do a small part. Do you guy s have a point of view on cryptocurrency, embrace, integrate them into the platform or keep them at arms length theyre not listed on any exchange once theyre not listed on any exchange, we dont have them on there because all our products are Exchange Traded. It helps when people regulation, et cetera. One thing i would say about it, theyre very interesting of course, were looking at them just as, you know, everybody is in the space because theres been some volatility there and god knows there hasnt been much anywhere else. Right. But with that, i dont think the average person can go and have something that moves that much you cant go in and say im going to buy a car for 35,000 on saturday and on monday its 42,000 because your underlying currency move. Most people arent ready for that volatility is great but within reason. Great when things are moving up. Somebody yeah some some exchanges have filed for products around it. What are they doing with bonds . Especially as the fed, we keep guessing, is going to start raising rates again in december. People arent increasing their exposure theyre keeping it flat. One thing thats interesting to me when i look at dividendpaying stocks, quyou he energyrelated also and the exxons and chevrons. At t as we talked about when ive been on here before, very popular again. One of the things people forget as were setting these records, the yield on the s p 500 actually falls so yields down just under 2 . You look at a 5. 25 yield from at t, it becomes a very attractive play. Yes, it does. Thanks, jj. Always a pleasure, guys thanks for having manye. Jj kinahan, it Td Ameritrade. Were headed to the close. This columbus day. The dow down 24 points. Coming up, forme eer ecp president jeanclaude trichet. What kind of ripple effects catalonia could have. The new blade runner tlim was supposed to turn around a box office slump after a disappointing debut, the hope is a new sequel could help awaken ticket sales. We have those details when we come back. Ere, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. 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After citigroup downgraded the stock to sell from neutral cut its price target to 24 fro 33 on concerns Charter Communications could signific t significantsignifican significantly curtail or drop viacoms content following carriage talks that stock is down 6 to 25. 46. Kelly . And Goldman Sachs weighing on the dow today after Credit Suisse downgraded the bank from neutral to outer perform citing value cases. The Company Shares are still up more than 11 in just the past month. Now, Movie Theater stocks are under a whole lot of pressure today after experiencing solid gains last week thats because investors were counting on the new blade runner movie to revive a struggling box office. The sequel to the cult classic 1982 film brought in over 31. 5 million this weekend, about 20 million below expectations despite strong reviews from audiences and critics. Now hollywood is hoping that star wars can save the end of the box office season. Tickets from s for the last file last jedi go an sale following the release of a new trailer, during the game tonight between the vikings and bears. You get the trailer tonight then you can buy the tickets. Remind me, are you a star wars guy . Not really . Star trek more of a star trek guy. Are you a trekkie not even that lets talk about why blade runner didnt do that well. Look at the tremendous success of cit, the stephen king story we know comic books are very hot right now. I think blade runner, you said it in the story there, it is a cult classic i dont think that there are that many fans of the blade runner original movie out there to make this a Wide Box Office success. Certainly some of the evidence said it was most popular in wealthy urban markets like los angeles it actually did pretty well overseas including in the uk, surprisingly it could still make some dough, but not enough necessarily to justify a whole bunch of sequels. In fact, the original blade runner started very slow as well. Right. It was a Big Box Office disappointment when it came out. Continue to have the sequel in the year yes. The last one was set. When 2049 rolls around, maybe theyll come up with a third one at that point. Disappointment for those Harrison Ford will still be around. For those theater stocks today, thats the biggest story, how violently negatively they reacted. Lot of expectations for this movie. Helping to revive star wars better save the day. Amc. Thats an existential kind of move i think its a pretty safe bet on that one. Famous last words. 34 minutes to go until the close today. Dow down 22 points s p down five. Russell down six nasdaq down 11. Up next former ecb president jeanclaude trichet will weigh inton on the impact of catalo a catalonia. Among things we have to talk with him about. Also talking tax reform with vector group ceo and friend of the president , Howard Lorber, ringing the closing bell today as a matter of fact. Youre watching cnbc, first in business worldwide heading toward the last half hour of this monday, columbus day, with the dow down 17 points with me on the floor of the New York Stock Exchange is gordon of rosenblatt securities. You know, it seems the market is waiting for something. And there might be those who would say its the next earnings season but theres a report out that says tax reform may take precedent over earnings in this next cycle what do you think . I think theres something to that, bill i mean, first off, today is columbus day so its quiet bond market is closed. One of only two days during the year the other being armistice day. You remember that. Yes, i do. The other thing id like to say, happy thanksgiving to our friends and viewers in canada. And with that, you know, if you think about the difference between the canadian government and the United States government, and the idea of tax reform, lower taxes, opposed to some of the things that are going on up there now, you can see like a dever jens vever jaa t the policies are going may explain the strength in our market people are convinced we can get tax reform through even though we had trouble with health care and some other things. I think there will be universal agreement in that. That will continue to bolster the market. Could you see the market continuing higher even if we have a disappointing earnings season then . Well, you know, the we could. I mean, obviously, earnings to me is where the rubber meets the road. Right. Well also see, you know, we have Inflation Numbers coming up later this week, too so, you know, we will have to be mindful of these things. The earnings dispintmeappointme these levels could see this thing reverse and start to move quickly. I think tax reform is the one that people are most optimistic about. Thats why the market continues to stay up here. Look, lot of people are getting into a lot of the same names where vix is up a bit but like seagulls going after the same french fry, bill. My thoughts exactly. I tried to paraphrase that for you. Thank you so much. A pleasure. Kelly thank you, guys. Time now for a cnbc news update lets get over to sue herera sue . Hello, kelly. Heres whats happening at this hour, everyone youtube has banned and removed some tutorials that show users how to modify guns including ones that provide instructions for making semiautomatic rifles fire nearly as quickly as fully automatic one. That tactic was used in the deadly mass shooting in las vegas last week. Former Vice President al gore says washington leaders are ignoring President Trump and going their own way. He told a reporter in zurich that hes not saddened or depressed about setbacks on Environmental Issues we have to win. We have to the future depends on it so we dont have time to to get caught up in grief or feel depressed because theres so much work to do. The opening of the first ikea in indiana is scheduled for wednesday and the lines are already forming. Why . Well, the first 45 people in line when the doors open will get a free sofa. Worth about 500 the next 100 people will get a free chair and we just received this news in from espn. Espn has suspended anchor jamille hill for two weeks for a second violation of espns social media guidelines. Well keep you posted on that. Its a still developing story. Kelly, bill, ill send it back to you guys. All right thank you, sue see you later. Thank you. Passions running high in catalonia where some have declared i am spanish and unity protests this weekend, urging the province to remain part of spain. The separatist leader Still Deciding whether to declare independence, perhaps as soon as tomorrow joining us now in an exclusive interview from paris, were pleased to welcome jeanclaude trichet, of course, former president of the European Central bank and because of the distance here, we are going to have a tremendous audio delay so everybody is going to have to be patient here as we go through the interview. Mr. Trichet, its a pleasure to you. Thank you for joining us tonight, sir great pleasure, indeed. Great pleasure to be with you. Lets begin with the situation in spain youre of the opinion that the Independence Movement will fail, but im wondering what you think will be left behind. What shape does this leave the Spanish Government and its economy, given the turmoil that theyve been going through in their richest province i think that, of course, we are in a very difficult situation. Spain is a very difficult situation. The european, you know, are backing the unity of spain i dont see any country or any major sensitivity in europe which would not support the unity of spain i agree with you that it is certainly a very difficult challenge. Still, it is so clearly in the interest of the catalonian economy as well as the economy of spain for the two province to remain united with the spain that i i guess that it will appear that it is absolutely necessary to preserve unity and im sure that they will find out a way to reach that goal its not the only separatist movement i mean, do you think the british people will go back on brexit and how long do you think theresa may will be able to remain in her spot as Prime Minister well, first of all, it is really so sad that the uk has decided to leave you know, the uk, for the other european 27 was a sanctuary of market economy, the sanctuary of Civil Liberties and sanctuary of the representative democracy, the investor of parliament so we are very, very sad im not at all optimistic on the capacity to retain to get back, even if some of my british friends are really thinking that it might be possible so we will see the situation is very difficult and the expectations in the uk, as far as i see the public opinion, are not in line with the difficulty of that negotiation. So i expect still a lot of difficulty i mean, the feeling is that the eu wants to make an example of the uk. They dont want to make this easy for them to exit because there might be other countries portugal may be one that would think about exiting. You got the Independence Movement in spain. I mean, things are really kind of very tough throughout the eu right now. What do you think is the future of the European Union . Are is that being called into question eventually . No. As you know, im very, very convinced that the resilience of the european project is much, much stronger than is very often analyzed or forecasted, but in the case of the uk, you know, the remain camp explained very clearly that it would be catastrophic for the uk to engage in this direction so nobody can say that they didnt know in advance that it would be a very, very difficult case and that was said by the remain camp, so its not a question for the other european to punish britain. I dont think that there is any, i would say, will to punish britain, but its only taking the consequence of the fact that the uk, which entered in europe in order to be part of the Single Market has decided to get out of the market. Thats as simple as that of course, koconsequences are vr bad. I wont ask you if california is going to secede, but i was going to ask you about the Federal Reserve before we go the vacancy that may be open at the beginning of next year who do you think is the right candidate for that to be head of the fed, chair of the fed . Well, first of all, there is one candidate which would be very good, namely janet yellen she did a good job, it seem to me and i understand shes on the list of the possibility that the president has. And im sure that he has a number of other excellent candidates so the problem is really entirely in the hand of the executive branch the central bank is independent. The moment which is very important, of course, is the moment of the decision the decision, if im not misled, is in h the hands of the president of the United States and of the senate because that appointment will have to be confirmed by the senate. So the democracys functioning we will see what happens i have only to say that janet did a good job right well, before you go, let me just ask it this way. I mean, we all know that, you know, other Central Banks are at a very delicate stage right now in their own treatment of their economies. So what kind of candidate do you think that the head of the ecb and the boj and some of the other major Central Banks out there, what kind of a candidate do you think they want to see . Somebody more hawkish or more dovish to lead the fed Going Forward . Well, i would say first that the decision taken by the open Market Committee and the open Market Committee is a collage and takes decision on the bassi collegial wiwisdom. Shes a part of the whole. And is very visible. But the decision, again, are taken by a college and i think that it gives a lot of, you know, good assessment to the decision that are taken. I would say i would not in terms of hawkish or dovish what the u. S. Needs is a wide central bank taking the decision that will accompany the Sustainable Growth that we are all aspiring to with price stability. It seems to me all decision taken by the fed until now are going in this direction and i would say probably the other Central Banks would hope that there would be continuity in the central bank of the United States of america. Mr. Trichet, thank you for staying late tonight, sir, we appreciate your time thank you. It was a pleasure great pleasure jeanclaude trichet joining us tonight from paris. I like how it was a pleasure. Hes still like a central banker, still takes it right down the middle as they all do. If i could ever sound that sophisticated. 20 minutes left in the trading session here im not saying im disagreeing with you by moving on, but we have to move on. The dow is down 24 points right now. Coming up next, walmart is aiming to reduce one of the most frustrating parts of the Shopping Experience down to a mere 30 seconds. Well tell you all about the retail retailers latest play to win customers in 30 seconds. Plus well talk all things tax reform with trump friend and vector group ceo Howard Lorber he will join us before he rings the closing bell, coming up. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. 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Walmart taking steps to help alleviate one of the most frustrating parts of the Shopping Experience by attempting to make it possible to return items in just 30 seconds. Courtney reagan has more on that story. And to illustrate just how fast walmart is aiming to make its service, were putting 30 seconds on the clock you ready . Reporter im ready. Tell us the story take it away. Reporter okay. Here we go starting next month walmart is launching mobile express returns for shoppers returning walmart shipped Online Purchases to its stores using the wall parking lot app and your online account, find the item you want to return, follow the prompts to get your qr code. Once you get to the store, find that mobile express return line at the Customer Service counter, scan your code and hand the item to the associate the goal is to shorten the average return time from five minutes to about 30 seconds. I did it you did it in 25 seconds. You did it in 25 seconds so pplause, applause, applause reporter thank you. You know, this just tells you how fierce the competition is because once upon a time, retailers wanted to make it difficult to return an item. Reporter yeah. So you didnt think about that the milk in the back of the store thing. Reporter yeah. Whatever. You know i mean, but the fact that roughly, what is it now, 30 of all online sales are returned reporter yes. Thats a big deal. Reporter yeah b it is a big deal and depends on the category that gets higher and lower thats considerably higher somewhere between three and six times the amount of returns you see from an item that was bought in a store so if youre a retailer like walmart that has both, a store and a website, you want to give shoppers the option to use both and make it as easy as possible. And there was this u. P. S. Study that actually says that 70 , so seven in ten shoppers that return an online item to a store walks out with something else. Thats a pretty, pretty powerful stat if youre a retailer. Free money. Reporter yeah, macys ceo was actually explaining to me in august that they used to have their online pickup counter in the back of the store just like you were saying, bill, the idea to get the shopper to walk through the store. However, they decided to move it to the front so basically just right inside the door. And they actually found that theyre getting higher sales now. Maybe its because shoppers are saving more time because they can just return very quickly and then they have that extra time to shop but its become pretty powerful. Something that amazon doesnt have, at least in the number that walmart has now theyre starting to take some returns back to whole foods, and at kohls at 82 stores this month. Like i said, competitions a great thing. Yeah. Reporter helps customers courtney, good job. We owe you five seconds. Reporter thats right. Five seconds im going to save them for later. Bye. Okay. You got it you can return them, i guess lets get back to sue herera for more details on that espn anchor suspension. Sue . Thank you, guys espn putting out this statement saying jemele hill has been suspended for two weeks for a seconds violation of our social media guidelines she previously acknowledged letting her colleagues and company down with an impulsive tweet. In the aftermath, all employees were reminded of how individual tweets may reflect negatively on espn and that such actions would have consequences hence this decision. The first tweet was on september 11th, september 11th of 2017, where she tweeted, donald trump is a white supremacist who has largely surrounded himself with other white supremacists. That obviously was a violation of company policy. We do not know at this point what the second violation is weve reached out to disney and espn Julia Boorstin has done that as soon as we get a statement, or a clarification from espn, we will bring it you. As of now, we dont know what officially the second violation is guys, ill send it back to you. Okay. Sue, thank you for now, sue herera. Up next, Real Estate Investor and donald trump friend Howard Lorber will be here were going to talk about tax reform, how that could impact his industry a lot to discuss with Howard Lorber right after this. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Fly e to the moon and let me play amon ding bell mnemonic so you miss the big city . I dont miss much. Definitely not the traffic. Excuse me, doctor. The genomic data came in. Thank you. You can do that kind of analysis . Yeah, watson. I can quickly analyze millions of clinical and scientific reports to help you tailor Treatment Options for the patients genomic profile. You can do that . Even way out here . Yes. Even way out here. Listen to this, mr. Cashin said the market on close orders show an imbalance to the sell side of 1 billion said if its not pared off, we could be down 50 to 60 points on the dow on the close in fact, were coming back a little bit right now. Down 18. Our next guest is about to ring the closing bell. Celebrating his companys 30th anniversary. Before he does that, hes here for an exclusive interview. Yeah, with us at post 9, vector group ceo Howard Lorber, also a friend of President Trump. Is that on your Business Card as well no, not my Business Card but ive known him for 35 years. Yeah. First of all, lets talk about that and how you think hes doing with the agenda that wall street was so high on at the beginning of this year well, i believe wall street Still Believes its going to happen, the agenda, otherwise the market wouldnt be up the way its been over 23 , 24 , since his inauguration or since his election right so i and i think hes had issues dealing with the Senate Congress congress is sort of easy, senate is difficult and with the twovote majority, its not very good but i think you have to look to the midterm. I think youll get some of these things going i think republicans are going to pick up some seats in the midterm. And theyll be able to get most of his agenda passed. Are you surprised the way he has come out against so many of traditional republican politicians who youd think he might want to make sure hes, you know, kind of look, hes a very cozying up to to get all this legislation passed . When you look at who hes come up against, theyre very rightwing republicans generally speaking. John mccain john mccains been a personal, whatever the problem is with them, you know, who knows. Bob corker. I was a big i was a big john mccain supporter when he ran and when he picked sarah palin, i thought something was wrong with him so, who knows. But hes to me, it seems more like the kind of blue blood mainstream republicans. Its mccain, its bob corker you know, if anything, he seems to be aligning himself with more kind of the upstart freewheeling, you know, kind of Tea Party Wing of the gop. Which you would say there isnt as broad support for but there seems to be a pretty clear divi divide. I dont agree with that assessment i dont feel hes aligning himself with the tea party hes not a tea partyer on a lot of social issues, he could be construed a democrat, be much closer to being a democrat than a republican like many of us are. Im a republican when it comes to the security of the country and Financial Issues web it co when it come to social issues, im a democrat. You dont think it it jeopardizes the tax Reform Movement here . I think tax reform has to happen look, they say the way to get things going is low Interest Rates. Theyve been saying this for 15 years. Weve had low Interest Rates and nothing has happened okay we havent had any growth in that period of time. So i think at the end of the day, theres nothing else thats going to move us forward to bigger g p growth than tax reform i think we have to have it im hoping congress and the senate is smart enough to realize this is what the vote is and their constituents want. Where you surprised hes bag as brash in office as he has been on the campaign trail i dont think he has been quite as brash in office as he was on the campaign trail. He can be brash when he feels its necessary the fed is expected to start raising rates here next month. Whats that going to do to your business what do you think . You have you enjoyed these low rates all this time . Yes and no. Okay real estate traditionally does better in inflationary periods its hard assets. Right. I can make the case that Interest Rates go up, ultimately theres inflation and ultimately leads to higher real estate prices i dont think its going to be, look, rates are so low that you could have eight increases, ten increases and its going to be back where it was 15, 20 years ago. Its never, in my lifetime, going back to have to worry about, you know, the 70 az en80s when you had 15 , 18 rate a im not worried about that. You dont think theres a push in the gop . Im thinking about eric prince, steve bannon with breitbart pushing some of these people to run against incumbent republican politicians. Is the president going to be left with kind of the more fringe wing if you want to call it sththat and democrats tryingo knit a coalition together to get his agenda done . I think at the oeend of the y people will end up in the middle, whatever party theyre in they end up in the middle. I think the democrats have proved how being extreme doesnt work it just doesnt work the country is not full of extremists and the middle of the country is much more moderate than that good to see you my pleasure anxious to get you upstairs to ring the closing bell today. Thank you. You bet Howard Lorber of the vector group ringing the bell at the big board to celebrate their 30th anniversary of listing. And well come back with a closing countdown for this columbus day right after this. Y . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading companies see it and see it throughwith digital. Its time for your business of the week. Jenny of jennys splendid ice cream is credited with starting the artisanal Ice Cream Movement when list teeria was found in a pint of their ice cream the company went into Crisis Management rebuilding their Food Safety Program and reputation. For more, watch your business weekend mornings at 7 30 on cnbc when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Im living that yacht life, life, life top speed fifty knots life on the caribbean seas its a champagne and models potpourri on my yacht made of cuban mahogany, gany, gany, gany watch this dont get mad bell mnemonic get e trade and get invested about 90 seconds left in the trading session with the dow down 20 points on the close. Bob pisani with me this is columbus day no bond trading. Oh, boy. You dont have that balance between equities and treasuries, but the dow, itself, down about 18 points here on the close. You see that slow drip. I want to note, were 50 below normal volume. Very difficult to make no surprise there. Conclusions about whats going on here. Refrain from, you know, everyone making broad conclusions. Best performer today in the dow, walmart last i saw, it had about a 2 gain almost and ge, look at that now, down 4 as john flanery starts to clean house there. Well, that was painful for all of us who owned ge stock when we were employees way back in the 90s. I want to point out in contrast to walmart, whats going on with walmart, look at the retailers that are all down rather noticeably right now. Thats a big thing for them. Were seeing some of them like abercrombie down 3 , 4 , even 5 right now. Thats a very important move were seeing look at that thats a tough one to call why exactly thats been happening. All big retailers outside walmart are on the downside. Last thing, oil a little higher on the day with opec talking about maybe extending production cuts. The wti is still below 50 a barrel thank you, bob wish we had time for your enthusiastic review of blade runner. Well get to that some other time. I loved it. Thought it was a great move. I two thumbs up from bob pisani down 11 on the dow on the close. Stay tuned for the second hour of the closing bell with kelly evans and company. See you tomorrow, kell thank you, bill. Welcome to the closing bell, everybody, im kelly evans after four straight weeks of gains for the dow and s p 500, were taking a break today the dow dropping 13 points on the bell that leaves it at 22,760 the s p 500 down about five points to 2,544 for the broad market the techheavy nasdaq composite down today to 6,579. The small caps, a high flier of late, dropping nearly half a percent today to close around 1,503. We had intraday highs earlier many the session but have given that back. Well talk about this in a moment facebook and google under increased scrutiny for russiafunded ads during the 2016 election. A new 60 minutes interview with Trumps Campaign digital director is revealing some facebook staffers were working in Campaign Headquarters did Facebook Cross a political line or just providing Customer Service . We will explore that coming up joining me now, though, to talk about all of this today, joe duran from united capital. Dennis berman here at post 9 from the wall street journal. Welcome to you both. Lets kick it off with todays Market Action. Dow and nasdaq closing lower despite hitting intraday highs earlier in the session nasdaq snapping its win streak the bond market was closed today for columbus day look at some of the financials biggest laggard today in terms of sectors, bank of america down nearly 1. 5 . As we look ahead to earnings this week, from jpm, citi, b of a, and wells fargo. I cant believe thats nearly upon us. It was just last quarter, wasnt it . I mean, to me the most interesting thing today, ill get right to it, kelly. Sure. Was General Electric. Down 4 . Activist is invited, finally comes onto the board, perhaps reluctantly but finally comes onto the board something doesnt add up here. Im trying to figure out whats going on. I agree well circle back to that in a moment joe, as we look at financial movers today as well, we didnt have Interest Rates, cant say, well, Interest Rates moved lower, took everybody out. What do you think broadly speaking was going on to push things lower today well, you have a lot of noise on a day like today. Volumes light so i wouldnt read too much into anything especially with the bond market closed i do think were in a kind of a weird spot here because weve had a very good rally in the last three, four weeks its taken everyone up a lot of the laggards have caught up. Small caps have been really good and i think were now seeing it we havent seen the vix, volatility as low, since 1993. Were pricing out a lot of volty tillty from this market. People are very, very optimistic and i just a little bit concerned that it might not be a financially related thing that causes the markets to get a little bit squishy somewhere in here again, so much good news in the markets without any real fundamental shifts to drive it im a little concerned about that. With earnings season coming, earnings numbers, i dont know if the economy looks solid enough the individual movers today, biggest leaders in the s p 500, micron, nvidia, mentioned earlier the chip stocks doing well today also h r block up there 2 the laggards, davita, viviacom express scripts may be the reelection of the story cnbc has about amazon potentially moving into the pharmacy space walmart up nearly 2 , dow, dupont and ibm in the green. Dragging things down were Goldman Sachs, nike and, yes, ge, dennis lets zero in on that for a minute down nearly 4 today. This after the Company Announcing changes to its executive Team Including departures of the cfo, marketing chief and international executive, plus trian managements ed garden has been elected to ges board of directors. What do can you think is going on here, dennis . My sense is the new ceo has come in and said, wow, this is not the company i thought it was, lets shake it up, bring in his guy. Lets see what can happen. Down 25 General Electric trading at 23 on the close today. The old joke about immelt, he came in at 30 and left at 30. Suddenly his tenure is looking pretty good. Right you know, kelly go ahead, joe. Kelly, i sold my company to ge, my prior one, in 2001 and the stock was under 30 bucks its Pretty Amazing over that long of period that nothing has happened i will say that one thing you typically see when a new ceo comes in is that they really like to do one big adjustment up front. And reset the crash the stock. I think what youre seeing is a lot of adjustments for what will be a pretty disappointing quarter. Setting up for good news Going Forward. The interesting thing to me here is from the outside, the whole, you know, criticism about ge in the past was, okay, theyre not responsive enough, you know, the management has been in place forever. Its stale closet financial. Bad timing. Clo close t financial you have somebody in charge, axing part of the new corporate lawyers, getting rid of the jet fleet, getting rid of the corporate cars, completely shaking up the c suite why is it reacting to this negatively instead of being excited about these potential changes . Joe . I think the number one thing that i she is that theres no clear vision theyve made the slight pivot to digital, but there isnt any evidence that its stuck yet so they were initially a Financial Services firm for the last 30 years and done very, very well shifting from earning the capital to lending the capital. Theyre now its not clear what they really are theyve sold a lot of their core businesses and its not immediately apparent to me what theyre becoming in the future so yeah. I dont think theres yet a clear sense of where theyre going. If in 20128 were 8 were ex all regions of the earths economy is to be moving positively, that should be good for General Electric which sells around the world word is leaking out perhaps for the upcoming quarter maybe happy to set it really low so he can be the savior on the way back up. General electric down 4 , down 10 in the last three months walmart is on the flip side, up 2 today saying the stock could see a 15 up side. The wall street journal founding walmart competitor, german grocer leidl not making headway. Leidel did a good job of getting people in when they opened not a good job of getting repeat customers. Sure, not so yet. On a secular basis, what has more determination for walmart, of course, is amazon and its competitors as opposed to leidl. Perhaps a shortterm bullet dodge. When you look at what theyre trying to do with jet and all the companies theyre buying there, that to me is the biggest game here than leidl on the retail side. Joe, do can you have one of these talking home speakers yet . I dont, but i completely agree with what was just said by your guest i do think walmart in their last year has successfully positioned themselves as an alternative to amazon they actually sell lower cost product and deliver it in a similar way to amazon. Notice boxes arriving at peoples houses. While my house is still filled with amazon boxes, i will not be surprised to start seeing walmart boxes because, again, they actually have lower cost products for many instances. So i think that weve seen a fundamental shift in their story that is quite interesting. Yeah, and so on the one end, you have walmart shoppers, this is where i was going with this, getting a 25 discount on google voice devices if they link their walmart account to google express. Thats on the one hand, kind of technology, the jet. Com, that sort of techforward piece of it, dennis other piece of it goes back to the leidl story, this was supposed to come in and undercut walmart on price. Sure. Walmart is also investing to make pretty well sure that doesnt happen of course but you know, i think weve been saying on this show for quite some time, kelly, if youre selling someone elses products, you are in trouble walmart is a distinct case simply because of its size they have to fig yeure out what makes Walmart Walmart . If its only price, theres a somewhat dangerous place to be in these days. All these coming in today. Look at the big move which courtney is all over you can go and return anything you buy on walmart. Com in 30 seconds in the store, take things right out curbside. Thats a differentiator. I want to see her test that because i do not believe you got to send a camera out. I want to see you test it. Im in. Were going to send you ill bring a camera. Well send her. You guys can race. See who can return an item more quickly. 30 seconds, no way. Lets move on to health care, the biggest sector laggard today. Lower across the board after the president is expected to sign Health Care Executive orders later this week. These would allow insurers to offer less comprehensive plan options. Community health down nearly 7 . Tenet down nearly 5 today aetna, humana down about 2 . Joe, the Health Sector doesnt like anything that is going to take dollars away from it. No, except i think youre seeing some stability in the biotechs, the last little while, which is interesting but i think the uncertainty up front when you have the valuations and the increase in prices weve seen, i think its probably a good place to avoid as you priced in a lot of good things happening and im just not sure where this plays out. The biotechs are more interesting. Yeah, health care as we just showed has been such a stalwart, dennis, its up 20 this year. Any effort that the president has made to take dollars in a big way out of the system has failed. As we recall after the Health Care Bill failed, those stocks did quite well so if they come off a little bit, i suppose its within the realm of reason. But the pbms as you talked about, express scripts those to me are the next real battleground for cost containment. Just sort of pushing them oust out of the more later on this bill in california that would limit basically the amount you can hike prices by just for a second on the executive orders from the president later this week, if he comes out with initiative that undermine the whole is that what might happen . They undermine the whole functioning of the individual exchanges or are these just tinkering around the edges im not going to profess to know what the president perhaps he does not even know. People particularly in these stocks, they want stability they want stability about where the payments are coming from and if theres any tinkering, the stocks are already reflecting that this makes common sense to any at this point. Joe, a final word on this, i know you like the biotechs what may be coming down the pike, is more pressure on limiting those price hikes are you worried about that at all whether its in california or other places . I think regulationsi coming down across the board, thats good for buy yoo teibiotechs tinkering on executive orders, do enough that it forces congress to act. Thats what i suspect this really is. Its deal making hes trying to make, do things that make things unpalatable enough that something has to happen i think, again, while many of us have moved on and are concentrating on taxes, im not sure the fight is done on health care yet. All right we will see. Lets turn our attention to the turkish lira falling against the dollar bigtime overnight, rising tensions between the u. S. And turkey u. S. Embassy in ankara suspended Visa Services over the weekend that was quickly matched by the Turkish Mission to the u. S. Doing the same thing joining us to talk more about this is fred kemp from the Atlantic Council fred, how serious theres been a lot of simmering tensions between the u. S. And turkey going back to the failed coup, gho gulen and what is this latest spat this is unprecedented, we never cut off consular Visa Services at a nato ally. There were 113,000, more than 110,000 visas issued in 2016 thats a big economic hit, too but this is really something thats culminate theres been eroding trust between these two big nato allies thats been ongoing, you talked about gulen. Turks saying its the equivalent of pkk, u. S. Wanting them as an ally to fight isis of course, their security guards have been charged in washington for taking on protesters so this has really gotten nasty. What i hear is that u. S. Officials got fed up when a consul consular officer was arrested a day or two ago and said, look, at this point we cant take it any longer more than a dozen u. S. Citizens who have been arrested most of them dual citizens and they just laid down the law and said were now going to act against this and were going to see whether erdogan, president erdogan wants an off ramp. Fred, is the larger issue whether a u. S. Ally is in danger of becoming a u. S. Enemy for lack of a better the same concern that iran is showing about the creation of a kurdish state is the concern that turkey feels. What is the larger picture here where this is going . I think turkey has too much to lose to leave nato, we have too much to lose because of turkeys geopolitical position the problem is if you get president erdogan in a situation where he feels he has to save face, he can do 180 uturns. Hes done it before. What the u. S. Is saying, what theyve seen, when russian leader Vladimir Putin put pressure on turkey, he pulled back tourism, he put on economic sanctions, he turned propaganda screws on him. Turkey backed off with Vladimir Putin. Turned 180 degrees and has established much better relationship and they see this as a little bit of a test of whether theyre tougher with the turks, whether the turks might give some ground on these postcoup arrests joe duran, just in a word, are you worried about the turkish turkey potentially having a currency crisis oh, weve lost joe all right. Fred, thank you for joining us. Thank you for joining us. Fred kempe speaking there about the issues well watch the currency dennis, see you in a couple minutes. Sure. For fast take. Appreciate you joining us at this hour. We have news to get to on a fastmoving brush fire thats burning in Southern California right now. Sue herera does have the latest. Sue . Yes, kelly, right now as you know, this is fire season in anaheim, california, lets take this live shot if we could before we lose it. Basically, there are at least six homes in Anaheim Hills, california, near the banner hill area, for those of you who are familiar with anaheim, california its a winddriven fire that has just gone from house to house to house. It started earlier this afternoon. It has really progressed quite rapidly. They are expecting more homes to go up. We keep losing and gaining that live shot because of some of the conditions its dangerous to have the chopper up because its so windy. So this shot may go in or out. This fire is actually big enough so you can see the smoke and the glow of it from disneyland were going to show you those pictures at the 4 30 news update this is a live shot of anaheim, california its a Newer Development those homes are built very closely to each other. So when you do get winddriven fire, the sparks basically go from roof to roof. And they have lost at least six it may be higher at this point, and it is expected to continue to progress through that neighborhood because the wind is going to stay high and it is hot. It is santa ana season in anaheim, california. And in the los angeles area. And thats whats fueling this fire kelly, ill bring you more at 4 30 back to you. Holy cow. All right. Sue, thank you very much ill see you in a few minutes with more. You got it. Sue herera. Take a short break when we come back, facebook paying a key part in Donald Trumps successful 2016 run for the white house. Goes deeper than many originally thought. Those details on whether facebook should be held to the same standards as other Media Companies are next. The Commerce Department slapping new duties on canadian plane maker. Weighs in on increasing u. S. Protectionism, what it means for that companys bottom line. We want to hear from you, contact the show via twitter, facebook or send us an email. Closingbell nbcuni. Com youre watching cnbc, first in business worldwide 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. Witness katy perry. Witness katy perry become a legal witness. Witness katy perry and left shark. Or a card shark. Grandma . Witness katy perry work. Witness katy perry firework. Witness katy perry swish. Witness katy perry. Aaaaaaw look at that dog katy perry with music videos and behind the scenes footage, xfinity lets you witness all things me. Welcome back President Trumps Campaign Digital director revealing a key part of the candidates social media strategy during the 2016 election in an interview with 60 minutes. Julia boorstin joins us with those details. Julia . Reporter facebook is how donald trump won the election. Thats what the president s Digital Campaign director said on 60 minutes last fight he described how he used facebook ads to target pockets of voters with tailored messages and says he hand picked facebook employees who supported trump. We had their staff embedded inside our offices. What . Facebook employees would show up to work every day in our offices. Whoa, wait a minute, facebook employees showed up at the trump headquarters google employees and twitter employees. Reporter facebook refuting parscales comments saying it offered identical support and tools to both the trump and Clinton Campaigns saying, the campaigns did not get to hand pick the people who worked with them from facebook and no one from facebook was assigned full time to the Trump Campaign or full time to the Clinton Campaign both campaigns approached things differently and used different amounts of support. This comes as the Washington Post reports that google has uncovered evidence that russian agents spent tens of thousands of dollars on ads to spread disinformation across googles many products including youtube, Google Search and gmail now with all these revelations, Senators Amy Klobuchar and mark warner plan to introduce legislation later this month requiring greater disclosure about political ads. Kelly, back over to you. All right keep an eye out for that julia, thank you. Broader question, is facebook positioning itself as a business or as a fullfledged Media Company . And should it be held to certain standards . Joining us now, alan murray, editor from fortune, and joe, ceo of agency within, an inhouse Digital Marketing agency guys, thank you both for being here alan, i feel like you can represent the oldworld newspapers, magazines wait, watch the oldworld stuff, quekelly. Media i feel like i do, too, in a weird way. Anyway, if when i hear these stories about facebook, i keep thinking to myself, is it a Media Company or is it a business and to me its a huge distincti distinction. What do you think . I dont think its a serious question look, i was running the Pew Research Center four years ago when we put out the report showing more than half of the people in the country get news off of facebook. That was four years ago. If youre the source of news for more than half of a country, how can you possibly say youre not a Media Company . Now, i know why they say that. They want to say theyre a platform, dont hold us responsible for the way people use us i mean, can you imagine the New York Times or the Washington Post saying that . Were just a platform, dont hold us responsible right. For the stuff thats in our pages. They have to take and theyre starting to make some moves in that direction they have to take responsibility for the fact that they are a primary way that people get their news today. So, joe, the reason why this is so interesting . You think of facebook, to me, the reaction to the story suggests most people do, if you think of facebook as an impartial Media Company, then youre horrified at the idea they would have people in these campaigns. If you think of them as a business that wants advertising, its much less surprising, right . Yeah, totally i mean, you know, when you think about platfofacebook as a platf think about how people consume the content. Alan is explaining about these different traditional news broadcasters, they all have digital platforms where people are buying ads all day long that are not subject to fcc guidelines through ad exchanges that populate on their websites. All the same kind of targeting capabilities that are vinyl fav on facebook are available to die across the web on almost every publisher domain you see including those of time inc and many others. Right. To ask for things that should be regulated on facebook as it relates to serve bing ads, how people conserve content, really needs to be thought of more holistically as it relates to the entire internet. Alan . Yeah, i dont disagree. I actually dont think the fact that peop that facebook had people in the Trump Campaign helping put out messages was that big a deal, as long as the messages were clearly marked and included Accurate Information the russian information is a completely different thing the accuracy of the information going out across their platforms is their responsibility. They cant escape that. Alan, for you guys would you ever embed somebody in a democratic or Republican Campaign to help show them, look, heres how you can use our resources . Well, remember, this is this was advertising services. They were saying they said well do it for democrats, well do it for republicans. Theyd do it for us, frankly they come in and put people at Time Facebook does. Yeah, to help us im saying other Media Companies. No, of course not thats would other Media Companies do that . No why, why not . Because it would compromise your independence. You wouldnt work that closely with a Political Campaign ever. Lets talk about this word, embed. I think this word, embed, is taken a little too far in terms of whats actually happening here i mean, we have people from google, facebook, twitter, pinterest, many others who will come to our agencys office, well go to theirs, our clients will come with us or theyll come to our clients. The end of the day, were doing in order to better utilize the platforms, better utilize the technology to do better narcoticing for our clients. Thats really whats i all about. If youre a politicalpublisher, alans or many others, ask them for advice on how to better utilize platforms to serve better ads or get better targeting or better performance out of it, im sure theyd be more than willing to give a helping hand whether thats in person or not, i dont think is really relevant here. I think, kelly, this is going to irritate a lot of democrats, understandably i dont think this is the real problem facebook faces the real problem facebook faces is the russian information its one thing to do this for a political candidate in the United States, its another thing for your platform to be used to spread disinformation by foreign agents yeah, and i think let me ask one last thing we got to go alan, let me ask you, what if facebook is the news stand, has legitimate papers, has trashy glossy foreign magazines and carry magazines with a different view than american ones . I think its a little different than that. Theyre not just the newsstand theyre determining what gets to you. Their algorithms are determining your news feed they are the front page. Theyre determining what goes on your front page. I think that true. Requires a higher level of responsibility on their part all right guys, great conversation thank you both for joining us. Thank you. Alan murray, and joe yakwel. We have a news alert to goat get to on aig. Reporter add aig to the growing list of insurers putting out preliminary estimates of Third Quarter catastrophe losses aig saying for the Third Quarter, this is net of reinsurance, that the losses estimated right now will be 2. 9 billion to 3. 1 billion, pretax. That amount includes estimated losses of 1. 1 billion to 1. 2 billion for Hurricane Harvey 1 billion to 1. 1 billion for Hurricane Irma 600 million to 700 million from Hurricane Maria police an approximately 150 million in additional cat losses including those earthquakes in mexico now the company also saying that these preliminary estimate involves the, quote, exercise of considerable judgment that these numbers could change given the complexity of the situation. So aig coming out with their cat loss estimates back over to you morgan, thank you those hits taking a bite out of earnings for the quarter, too. For the whole s p 500. Anyhow, china and south korea already taking a hard line against initial coin offerings now a Major Hedge Fund managing is taking eir de athsind has a word of warning for investors. Were going to have that right after this give up, skeletor youre finished curse you, heman, you interfering imbecile give us one good reason we shouldnt vanquish you to another dimension ok, guys, hear me out. Switching to geico could save you. Hundreds on Car Insurance. Huh, he does make a point. I do like to save money. Catch you on the flip, suckas geico. Because saving fifteen percent or more on Car Insurance is always a great answer. Welcome back it is time now for our fast take today. Joining me is special guest dennis berman. Im ready. Also one of those oldfashioned newspaper digital platform. Of the future naeshlgs, speaking of digital platforms of the future, we begin with cryptomania today the texas hedge funder is warning a whole bunch of people, quote, are going to lose a lot of money, end quote, on initial coin offerings he basically called fraud plus ken rogof in a new column says bitcoin will eventually collapse we learned people are hacking Companies Amazon servers not for their servers, but to mine bitco bitcoin. Of course, there are going to be people who get hurt and people who try to do terrible things but the idea is here to stay blockchain, cryptocurrencies, the bitcoin. All of it lets start with icos, kelly people will lose money will absolutely be failures. Youre not staunchly against them. No, in that they sort of disalodge the Venture Capital t capitalists from the whole equation and dislodge the ipo process, itself. They may will be banned but in the meantime, id be willing to bet some of these things actually turn out no. Maybe not all. No. More than zero. I will not more than five. Not more than five. Ill take the over. Okay. Next, its a perfect opportunity for a tech giant to show how its helping humanity. Remember those wifi balloons from Google Parent Company alphabet they would seem to be a perfect way to restore connectivity to stormravaged puerto rico. And yet the company says those balloons cant do it alone and need a Telecom Partner Cellular Network to work now at t and tmobile apparently, dennis, are not up to the task without a Software Update i dont know why this isnt moving forward it seems like such a shame right now. Seems like a pretty smart idea we all have our issues with google right now, but if this can work, this should be a standard procedure for basically the whole Emergency Apparatus in this country. Yes, and its already worked. Peru. Right when the storm comes and can get those balloons up, that, to me, seems like progress of humanity. If any of those names Telecom Companies or another one can step up to the plate right now and turn on whatever needs to be turned on for this to work, it would make a huge difference and set a standard. Soon well have all those updates on our phones so when the time comes, perhaps connect directly. Woo well see. Finally, a chicken tender button and primethrough, like a drivethrough for prime members those are a couple of the joking not joking from carls jr. And a new Marketing Campaign aimed at amazon. Now, i actually think theres some merit to these, dennis. But will these cheeky ideas actually help sales at carls jr. . Well, were talking about them now, so i guess i dont know what the overlap is between cnbc and carls jr. Fairly good. Id say generally not i would say that as well. Its what i love about it is as a Marketing Campaign, its brilliant, actually throwing ideas out that there maybe amazon they like to do quirky things, too. Take them up on, brilliant, a way to sell more burgers and chicken tenders. If im thinking about lunch, i dont care about amazon and carls jr. And corporate synergies. Give me a mcrib, whatever they have. Wait until they get a chicken tender button on your floor at the journal, youre going to be eating carls jr. Every day. Im ready im ready. Thank you very much its been a pleasure time for a cnbc news update, lets get over to sue herera. Were going to start this hour with Southern California and Northern California wildfires. A winddriven wildfire sweeping a i long the outskirts of a Southern California subdivision. The blaszze erupted late this morning in the Anaheim Hills and moved rapidly through the hills and canyons in Orange County it now stands at 2,000 acres at least six homes are burning in anaheim an Evacuation Center is being set up in the Downtown Community center and schools are closed meantime, residents in Northern California are beginning to see firsthand the devastation left behind by multiple wildfires there officials estimating more than 1,500 structures have been destroyed in at least eight communities. Were just learning at least one person has died. Two others suffered serious injuries some to 20,000 people have been evacuated. The parents of aurora, colorado,theater shooter james holmes sharing what theyve learned about mental health. At a symposium in pennsylvania which focused on the warning signs of mental illness. The question i get the most from people who want to talk to me is, how do i know if its just not being a teenager . And the onesentence answer that i could give you is, it doesnt go away. That is the news update kelly, back downtown to you. That is so tough. Thank you, sue you got it. Sue herera back at headquarters all right. Back to business demand for private jets has been slowing and prices have fallen for three straight years due to oversupply up next, the ceo of brazilian aircraft maker embraer aviation sisshita othh s ken e bune jet industry right bune jet industry right after this not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. The National Holiday known as golden week in china is wrapping up and people are back at work. Its typically seven days. This year people got an extra day off because the holiday overlapped with the midautumn festival estimates more than 700 million chinese traveled over the holiday and spent the equivalent of 89 billion u. S. Dollars. Golden week is looked at by investors as an opportunity for bumper earnings, especially this time around because of the extra day. The nta in china says the number of tourists staying in hotels dropped this year. New home sales in china also dropped. Revenue from slightly higher versus last year some of the macau stocks are lower as a result. Galaxy and sans china down 2. 5 to 3. 5 . To business travel, a forecast out from honeywell says it will be at least next year before we see an uptick in business jet deliveries. The convention about to start in las vegas. Thats where we find phil lebeau first on cnbc interview, michael, president and ceo of embraer executive jets wow. Look at that chess board phil kelly, not very often you get to be in a 55 million plane im here with michael, embraer aviation ceo tell me about this jet. The lineage, ultra large aircraft, 55 million. Its considered the home away from home. It allows for our customers to have a bespoke interior experience just like they would at their house five cabin zones does all the missions that an executive or official or corporate would ask for. Reporter does it in style. It sure does. Reporter kelly brought up a point in the beginning, honeywell out with its forecast for business jet deliveries this can year bit of a plateau, if you will. Everybody is saying were almost ten years since the recession. When do questiwe see business j, Corporate Jet sales really kick into high gear what you have to realize is were already seeing signs of strengthening marketplace. Our forecast calls for 7,500 units over the next 10 years worth 215 billion when you look back at the last 15 years, last 15 years have shown 755 Business Jets delivered. When you look at the forecast that weve put out, were optimistic and starting to see signs. What are those signs starts with preowned deliveries. The deliveries are up five times that of new aircraft when you see preowned activities up, that strengthens the price points when you start to strengthen the price points, the residual values for the shareholders, for the buyers starts to improve as well thats very good signs for us. So when you see preowned inventories declining and price points starting to stabilize, thats a Bright Future for us. Mr. Amalfitano, its kelly back here in new york. Hi, kelly. Im wondering because ge made a big deal hi ge made a big deal of getting rid of its Corporate Jet fleet because it said it wasnt the kind of perk that the company needed right now. Isnt that skoort of a highprofile example of why demand is still weak no, whats interesting about circumstances around the marketplace right now is you have to make decisions that are right for each organization and have to buy an asset that allows for you to deliver for your shareholders so our aircraft have the highest benefit of utilization in the marketplace. At a low operating cost. So were solutions for flight departments. Lower net present values, lower operating cost, higher dispatch reliabilities allows flight departments to be able to operate efficiently. Reporter michael, let me ask you about air taxis. Earlier this year embraer said it would partner with uber in terms of developing air taxis in the tuch future people are talking about how quickly will we see thisin cities like dallas, dubai, new york, any of these cities . Give us an accurate portrayal of ne terms of how far out in the future until we actually see these air taxis . Thats a great question were so excited to be part of it we brought the embraer Innovations Center to melbourne, florida, thats the essence of where were going to start doing the innovation for technologies such as this innovation is where its at when it come to embraer, you can start to develop the ecosystem thats necessary to look at those kinds of new models. But were excited about the new phenom 300e that were delivering here. The reason why it sepeaks to social demographics that are necessary for those ecosystems like uber elevate. Reporter smaller groups we have an aircraft that serves the profile of that demographic very nicely. Right price point, economical, high utilization because youre going to need something that flies lots of hours. So the phenom 300e, bestselling jet with the 300 we now introduced its enhanced version here at the show hope you can come by static display and take a look at it. Thats whats going to motivate the benefits, motivate the ecosystem with the right asset and hoping that has opportunity for us in the future. Reporter Michael Amalfitano, ceo of embraer aviation on the lineage, id get on the phenom but wed be a little tighter quarters, if you would, than where we are right now. Its interesting. Like i said, lots more space here but even our phenom 300, we added three more inches in aisle space, another inch in head room very exciting. Spacious to the light jet first of its class, best in kind. Reporter thank you, michael. Fantastic, phil. Reporter kelly, back to you. Have a great day. Phil fits comfortably, 67 i think we decided you were, phil. Anyway, thank you both very much Michael Amalfitano and phil lebeau. Pharma companies thinking about raising drug prices but may be thinking twice after a new bill signed in california today. Well have those details next. Were hours away from the Procter Gamble Shareholder Meeting. 16 million has already been spent in the battle over a lst droom seat for activis neon peltz what the outcome could mean for investo investors, coming up i think its terrific. Your kids go to college and you start trading. Yeah, 5 years already. 5 years, hmm. You ever call your broker for help . Once, when volatility spiked. And . By the time they got me an answer, it was too late. Td ameritrades elite service team can handle your toughest questions right away with volatility, its all about your risk distribution. Good to know. Thanks, mike. We got your back kate. Does he do that all the time . Oh yeah, sometimes he pops out of the couch. Help from real traders. Only with 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 Brown signing a bill earlier today that doesnt sit very well with pharmaceutical companies and could have a big impact on Health Care Policy meg tirrell has details for us. Reporter hey, kelly, californias new drug pricing law doesnt go so far as to control the price of drugs it requires Drug Companies to provide notification of planned price hikes 60 days in advance signing the bill earlier today, governor jerry brown noted an increasing economic divide between the haves and the have nots. Californians have a right to know why their medical costs are out of control especially when the pharmaceutical profits are soaring. Reporter the requirement applies to drug price hikes of more than 16 over a twoyear period the law requires justification of the hikes and mandates Health Insurers provide information about drug spending. Price increases of the magnitude are not uncommon at all. I was speaking with a professor at the university of pittsburgh. He pointed out we saw a price increase on one of celgenes drugs that brings its total to 30 in the past 2 year and in line with what we saw. The hope is a law like this will dissuade lawmakers have taking such large price increases but said it could backfire and that Companies May just set the initial prices higher. The drug industry said it was dis appoiappointed governor bron signs the bill pointing out it only applies to list prices and doesnt shed light on the rebates and discounts paid to Insurance Companies and pharmacy benefits managers. Kind of that same back and forth were using to seeing here, kelly. Id appreciate if you could shed more transparency on that whole part of the market from the list price to the final price but i suppose hes focused on the headline number meg, thank you very much krrp thank you. Our meg tirrell. Key vote tomorrow for one of Retail Investors most widely held stocks in the market. Details on whats becoming one of the most expensive shareholder prices ever next. Coming up on fast money money,errinmoney, earnings season is habit to kick off. One strategist will tell us what to expect this time around and theres more closing bell right after this with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. The long awaited Procter Gamble Shareholder Meeting is tomorrow, and so is the vote to give active vigs nelson peltz a seat on the board. Its shaping up to be one of the most expensive shareholder wars ever leslie picker is here. Thats right. 60 million. Thats how much nelson pelts and Procter Gamble are spendsing on this fight. 60 million over one board seat. The company is estimating it will spend 35 million and nelson peltzs firm said it would spend 25 million. This is likely to be the most costly proxy fight ever. And one reason why its added you up so quickly on both sides is that p g has a lot of individual shareholders. Retail investors make up 40 of p gs Shareholder Base thats about four times the proportion of an average company which has about 10 retail this is important because outreach to dentists and day traders is expensive, inefficient, oldfashioned both sides have paid people to work the phones, send letter which costs money to print and mail peltz has waged a large Advertising Campaign in cincinnati with ads in local paper, local tv to appeal to the Retail Investors in p gs hometown peltz learned about this the hard way he learned about the importance not to Discount Retail dupont became the first and only fight hes ever lost 1 3 of due pobts Shareholder Base was retail which sided with the company. When the index funds voted in favor of management dupont won that fight the question now, will we see a repeat of 2015 or will the vote go the other way well find out tomorrow, kelly. The other thing is, people have said, you know, proctor and gamble is taking a lot of these steps on their own the journal today says the Company Hopes its redemption lies in a koala shaped maxy pad. This is really, really important. One of the big set backs that people point to with p g is what it did with diapers in china several years ago. Lost a bunch of share, right . Lost a bunch of share, right. They put out a lower cost product thinking that the middle class chinese would go for the cheaper diapers. The chinese saw diapers as a licks yuri the same here with the maxi pad. Theyre trying this strategy it seems to be working already in china. I cant believe were actually there it is. This is the koala shaped maxi pad from Procter Gamble, whisper brand. Aimed at teenagers in china. This is what happens when mike is gone i wish he was here. That would be great for him to be part of this uncomfortable conversation regardless of where it goes, well see what direction it takes. Coming up, a new segment we are calling the closing word todays closing word is irrational and ill explain why after the break. whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. welcome back this is so exciting. Were unveiling a brandnew segment called the closing word. Closing bell, its the closing word we did skranl tiles. Were taking a single word and how it relates to the day. Todays closing word is irrational the Royal Swedish Academy of sciences has awarded this morning the 2017 nobel prize in Economic Sciences to richard thaler, professor of economics at chicagos booth school of business his work deals with behavioral economics. It mixes psychology with econ to determine how people really make decisions and how those decisions affect markets thaler departs from traditional theory to show people are irrational heres how he described his work in an interview on cnbc in 2015. Economics is based on the assumption that everybody is super rational, has no selfcontrol problems, never has a hangover, saves exactly the right amount for retirement and then invests it perfectly. The rest of the world is nothing like that. Were more like Homer Simpson than we are liare like spok fror trek. Weve built up an edifice that applies to fictional creatures we dont have a theory that applies to people. If you dont have a dispute on the latest developments in the Economic Sciences and theory, you may recognize thaler from his cameo in the 2015 movie the big short. If you missed it, heres a look. How could i lose, right this is a classic error in basketball its called the hot hand fallacy people are sure theyre going to make the next one. People think whatevers happening now is going to continue to happen into the future and apart from being a professor and a onetime actor, he said, hey, the Nobel Committee didnt recognize my acting work but hes also a principle at fuller and thaler Asset Management their equity fund tries to capitalize on behavioral patterns its up 30 . When asked how he would spend his nobel prize money thaler said, quote, i will try to spend it as irrationally as possible huge congratulations to a man who has had Significant Impact on economics but also on personal finance you may notice the lingo that you get from words like numbering nudge to confirmation so much comes from the word he and his co h author who got the prize 15 years ago have done now its taken for granted thats the closing word for today, irrational. Well go try to be irrational ourselves. That does it for closing bell, everybody. Fast money begins right now. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast something is happening this week that could send oil soaring the Commodities Team will be here to tell us why it could be the biggest event of the year. Plus, amazon is at it again. First it was retail and now its taking down a new group of stocks as it veers up to disrupt another industry we will tell you what that means. Later, a top strategist says this could be the most important earnings season ever first, we start off with the oldest and worst performing dow stock