"closing bell" starts right now. >> bringing back our love triangle graphic from yesterday with warren buffett above it >> welcome to clbltd clblt great to see you just less than one hour of trade. well off the session lows as we stand. there's the intraday chart for the dow. just higher by 20 points the s&p's just in negative territory. as you can see, the nasdaq sinking more meaningfully. the sectors that are gaining are defensive today. we've got the likes of staples, utilities at the top, communication services at the bottom and google notable declining >> certainly not helping coming up the ceo of rio tinto joins us on a "closing bell" exclusive to discuss a global economy and the company's new climate change initiative. let's get straight to the story of the hour. apple one of the most important reports of earnings season josh lipton at am hq with a preview of what we can expect. josh >> sara, here is what we expect when apple reports results after the close. earnings per share of $2.36. that will be on revenue of 57.4 billion with gross margins of 37.7%. remember apple no longer breaks out iphone units but we will get iphone revenue the expectations, $31 billion for the quarter. that would be down 18% from a year ago some key questions from investors when it comes to the iphone franchise certainly we'll want to know what trends in china look like remember execs during the q1 earnings did say it seemed like to them trends improved in january. at least versus december those positive trends t.j. also execs say there are levers they can pull, they talk about pricing plans and trade-in programs how well are those working now, besides the iphone, investors are going to make a beeline for services revenue the expectation there is $11.4 billion in the quarter obviously investors focused on that faster-growing, higher margin segment. finally this is the quarter apple typically does update its capital return program some analysts say you could see apple come out today and raise that buyback authorization by $100 billion, increase its dividend they say between 10% and 20%. we'll see after the close. guys, back to you. >> all right see you then, josh thank you. so we're now more than halfway or just about halfway through earnings season. 261 s&p 500 companies already reporting. so far numbers have been largely ahead of estimates 77% in fact of those companies have beat on earnings per share. just 18% missing and 5% matching overall earnings per share growth tracking for a .7% rise versus an expected 2% decline going in so much for an earnings recession. revenue growth is pacing for a 5% gain. let's go to some of the names driving the earnings story today. kate rogers, meg tirrell having the details on pfizer and merck and bob pisani is watching ge. kate, let's start with you on mcdonald's >> mcdonald's turning in a very strong first quarter with beats on the tops and bottom lines this morning the big numbers, though, were on same-store sales 5.4% increase globally 4 1/2% in the u.s. both surpassing expectations as the experience of the future renovations and investment begin to really pay off for the brands, particularly in america. mcdonald's has now updated 8,000 locations across the u.s. with enhancements like kiosks and digital menu boards with another 2,000 updates slated for later this year. another boost this quarter, menu changes including the company's bacon event, two for $5 deals and of course donut sticks back over to you >> kate, thank you very much for that pharmaceutical stocks moving down the back of earnings from pfizer and merck meg tirrell has the highlights from those reports hi, meg. >> you might need some pharmaceuticals after the bacon and donut sticks we saw some beats for both merck and pfizer in the first quarter. and beyond performance of specific drugs for these companies there were some shared themes across both of the company's quarters growth in china. large-scale m&a and commentary on drug pricing. pfizer ceo albert bourla who just took the helm january 1st told me today he expects the chinese market to grow significantly. hundreds of millions of people are gaining coverage and access to medicines there for merck it was the same the drug giant reported a 58% boost in sales from china. now, where these companies don't see growth is from doing mega mergers. merck's ceo ken frazier has long eschewed that strategy and said he sees valuations declining after last year. both stocks shrugging off any nervousness around drug prices even as two hearings are being held today on the topic on capitol hill pfizer's bourla declared net prices declined 3% in the first quarter and he expected the company will grow based on volume not price increases in years to come. guys >> that would be politically iffy to say that anyway. meg, thank you ge getting a big boost in early trading before coming down off those highs. bob pisani's been digging through the earnings and joins us with the details. bob. >> hello, sara i'm at the ge post a lot to like. take a look starting with the fact it's over $10 first quarter earnings topped expectations reaffirmed 2019 forecasts. industrial free cash flow. that's a big metric for them loss of 1.2 billion. that was better than expected. they posted a modest profit. aviation a little bit of an issue. the good news is it's been a bright spot in general but the company did say the grounding of boeing's 737 max airliner could hurt the timing of its cash flow remember there's a joint venture there, makes engines for the boeing plane for general electric overall, though, there's clearly some belief by investors that larry culp, the ceo's plan is making some progress guys, back to you. >> bob, thanks very much let's discuss all of this in our "closing bell" exchange today. david bailin, cio at citi private bank and our own rick santelli at the cme. david, thanks very much for joining us what's your take on earnings season does it spur the market to another leg higher or do you think it signals a moment to take some profit >> well, right now i think you've seen a particularly good first quarter relative to expectations we had a very messy first quarter in terms of what was going on with the government shutdown we had a lot of data issues and a lot of anomalies due to what happened in december in terms of the market now we're seeing a return to a much better environment in the second quarter and potentially beyond when we expect that revenues will continue to rise and earnings will actually beat expectations so between now and the end of the year we can imagine markets are going to be up another 5-plus percent and earnings and revenues will follow you mentioned earlier that the consumer was feeling positively in the u.s we think the same is true. until we see a particularly good environment if not particularly exciting in terms of growth for the economy, for the remainder of the year. so we're remaining fully invested and pretty bullish in that environment >> within that bullish outlook, david, where do you think the leadership will come from? we're wrapping up april here financials are actually the standout performers. for the year it's still technology and consumer discretionary. where do you want to be? >> yeah, i mean, i think you've seen a pretty good run on the financials so far because the interest rate curve has changed and their ability to make net interest income has gone up. and technology of course is on an extraordinary tear. there are other areas in the market where you can see that growth health care, as you just mentioned, being one of those. we think that's very fairly valued gives you good defensive protection and we want clients to rotate into more high-quality names and away from some of the riskier markets which in 2020 could be more affected if things slow down so that's really what our strategy is. safeguard assets and basically go with growth you don't think value's going to turn around anytime soon the market really favors those companies that continue to grow in a low interest rate environment with a reasonable amount of consumer spending. >> rick, welcome back. we missed you yesterday. to dachd's point, on the topic of yields it's been a volatile couple of days the ten-year's been all over the place. what's been happening there? >> i think the interesting aspect to walk away with watching the fixed income treasury curve in particular is that you know, three-months to 10s, 2s to 10s they've steepened. and it's not like they've steepened a lot but it's important that we've seen a reversal of the inversion process to some extent and i think that's very critical as for how nervous everyone seems to get when interest rates seem to kind of buck the major trend of the equity markets, i can totally relate to that but there are so many turnstiles that are keeping rates down. yes, even today. when you looked at consumer confidence versus chicago pmi there's lots of data that isn't necessarily at the optimum levels that they once were, whether in 2017 or in 2018 but i think the most important aspect to walk away with on interest rates is that we don't have heated up action going on with regard to pricing and inflation. we have plenty of growth even though we could debate it's not the best growth in the last 24 months i don't see anything impeding what we see in the marketplace, and i even think the dollar isn't going to fall much farther. just remember this, wilf how many analysts told you three weeks ago the first quarter would be 3.2 i can answer that for you. zero there's something to be learned by that. lots of smart people can take lots of data input but they don't necessarily give you the right output sometimes we have to leave that to the market participants >> rick, you don't know which analysts i've been talking to. but i do take your point and i don't ultimately disagree with it david, in terms of what to do with your conviction, you mentioned financials, what else do you like in terms of sectors in the u.s.? >> all of the payment systems, companies like visa that do transaction volumes, areas where you see those efficiency drivers and the ability to see volumes increase, anything transactional, as i mentioned. so that we also are going to expect to see a lot of logistics improvement. we think energy and continued improvement in earnings as a result of oil prices moving higher and staying there and that goes all along the entire from production all the way back to exploration. we see a lot of opportunities in the market there but what i want to emphasize is that there is no area of the market that is essentially cheap. if you want to do something that's going to reduce risk you're going to have to diversify your portfolio and do that by moving into foreign equities, which have greater growth, which are going to now be the late cycle grower and you have to believe in order to do that that it's going to be good for the next 12 to 18 months we're asking our clients to diversify out of the u.s. and to pick these specific markets that are more defensive and higher quality in the u.s >> finally, just on the energy point, look, oil prices are higher today you've got this bidding war going on for anadarko, and energy is flat as a sector in terms of the stock performance what's it going to take to get people really excited about these energy stocks? >> well, the number one thing is the belief that energy prices are going to stay higher for longer and that clearly depends upon the supply-demand relationships that are being established around the world and the ability to hold opec production and other production constant. that is clearly an unknown and one of the reasons why people are very tentative about that. the stocks obviously are fairly valued on a historical basis but in the event you get some momentum the consistency of prices, that could be a particularly good place to be. as for the better quality oil companies their investment-grade debt is also attractive relative to treasuries as well. and a good place to have assets. so we think there's two ways to play that. >> david and rick, thank you both very much great to chat as always. still to come on "the closing bell," we'll be counting you down to one of the most important moments of earnings season as wall street turns its attention to cupertino, california we'll bring you apple results as soon as we get them. plus expert analysis on those numbers. >> we don't use the countdown clock for just anything. >> no. >> mother of all earnings reports. >> christmas day and apple >> after the break mining giant rio tinto is up more than 25% this year and it's teaming up on a new climate change initiative. the company's ceo joins us exclusively to explain right after the break. let's build a better world for investing. let's create jobs, build bridges, insure prosperity. as investment management professionals, let's measure up. cfa institute. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. thwho hold themselveshe to a higher standard. they are called "cfa charterholders." demand the best. demand a cfa charterholder. cfa institute. here'sshow me making it. like. oh! i got one. the best of amy poehler. amy, maybe we could use the voice remote to search for something that you're not in. show me parks and rec. from netflix to prime video to live tv, xfinity lets you find your favorites with the emmy award-winning x1 voice remote. show me the best of amy poehler, again. this time around... now that's simple, easy, awesome. experience the entertainment you love on x1. access netflix, prime video, youtube and more, all with the sound of your voice. click, call or visit a store today. welcome back to "the closing bell." shares of alphabet dropping today after reporting a miss on revenue. it also reported a slowdown in google advertising revenue the stock is on pace for its worst day, sara, since 2012. trading down 8%. >> all the analysts couldn't figure it out. they didn't get the explanation they wanted. >> the lack of explanation >> the visibility was what was troubling them and we sort of hinted at this yesterday when josh brought us the excuses, from foreign exchange to -- >> the two other sides, it was up 6% in the two weeks um coming into this. but the positive is it hasn't really derailed some of its comparable stocks today, which could have happened. and the market -- >> seen as a google problem. >> and the market kind of off its lows, flat at the moment the s&p encouraging when you've got a stock like google down so much >> switching gears, mining company rio tinto pledging $1 million in support of the world bank's climate smart mining initiative which brings together the private sector, governments and research institutions to promote sustainable mining practices in resource-rich developing countries here to discuss in a cnbc exclusive rio tinto ceo j.s. jacques. nice to see you. tell us why you're in the u.s. >> well, for multiple reasons. first of all, the u.s. is a very important market for us. it's the second largest market from a general standpoint. because we sell 1/3 of all the aluminum consumed in the u.s we supply lots of copper as well, between 12% and 15% a year but it's the second largest market in terms of equity for us we're talking about $25 billion held by u.s. investors who are coming here pretty often. there's a big summit organized by the world bank tomorrow in relation to climate change we want to be part of the solution we have plenty of things to offer. >> is this movement, j.s., an admission on rio tinto's part that you haven't done enough -- >> as rio tinto and a few other companies, we believe in the science around it and we have a lot to offer let me be -- let's stand back and give you the -- let's set the scene properly here. if everybody agrees we're going to need more wind turn booin, for example, and if you think about wind turbines, it will require four tons of copper, three tons of aluminum, and hundreds of tons of steel going forward. so as and when the world tackle climate change issues it's going to require more and more minerals and therefore we believe as rio tinto that we can be part of the solution through our product offering in terms of copper, in terms avenue lum nyum and a few other materials. it's all about looking forward hire >> j-s, you touch so many different industries around the globe from mining metals that go into everything, from cars to batteries. give us your sense right now of how the global economy is doing as we go to the second half of the year >> from a mining standpoint there are two key drivers for us one is gdp growth and the other is trade those are the two main drivers for us as far as gdp growth is concerned, the economy is slowing down especially in china. but as scheduled, as forecasted. so i'm not really concerned about this one the u.s. is doing fine i was watching your program this morning. could be be some good pieces of news coming from the white house in terms of further investment, in terms of nfrastructure, which would be a great piece of news so from a gdp standpoint slowing down but still at a very high level. and then on the strayed which is the other element which is very important for us i'm the optimist in the room pi believe there would be a deal secured between china and the u.s. over time i was watching your program earlier today. seeing from today if i look at it at a macro level am i overly concerned by the second half of this year? no the second part of the answer as you said, i'm selling bauxite, i'm selling aluminum, copper and other minerals if i look at my other books today they are absolutely full so today i don't have any problem, no material concern for the rest of this year. >> in terms of china's pickup do you feel it's sustainable or is it short-term stimulus led >> absolutely clear that china will continue to slow down but you know, 6% of the economy the size of china is a massive number at the end of the day the second aspect is absolutely that china is introducing some more stimulus package as we speak, that being able to do it for a few years now they are seeing lots of cash. am i overly concerned? no, i'm not concerned today. >> j-s, i just want to ask a quick question on brexit you're a french-born, now british citizen leading an australian-british miner that's headquartered in london. what is your view on brexit based around how brexit plays out? >> i think we're on public record as brexit has no direct impact on rio tinto in any fashion. bedon we don't have any assets in europe anymore so as far as we're concerned, brexit is not a concern whatsoever >> j-s jacques, thank you for joining us >> thank you >> ceo of rio tinto. still ahead apple already up nearly 30% this year getting close to retaking that $1 trillion mark we'll see whether today's earnings report can take the stock to the next level. plus making the case at cnbc about why he's fit to serve on the fed. >> you want the biggest selling point for me, it's i helped put the economic agenda together we've got the best economy in 20 years. we've got the best job market in 50 years i mean, that's a pretty good qualification. >> coming up, we'll ask former fed vice chair don kohn if moore is the right person for the job. we're back in a couple minutes ♪ can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys. life well planned. see what a raymond james financial advisor can do for you. welcome back to "the closing bell." couple individual market movers for us now mgm resorts is down 6.4% as you can see here at post 5 at the stock exchange the key thing for them is they are more tilted to vegas and less tilted to macau than some of their rivals. revenue's fine but eps missed. vegas ebidta 405 million expectation was 430. macau ebidta 191 million expectation was 180. that overall balance of less macau more vegas therefore hurting it compared to some of the rivals as i said perhaps, though, a little overlooked the fact that they reiterated their full year ebidta guidance and they have more capacity coming on during the year in macau. so maybe during later quarters of the year they can play catch-up a little. down 6% or so which is near the lows of the day but still up for the month of april by about 4% or 5%. another factor to take into consideration. sara, over to you. >> i'm at the same post where shopify trades that stock beat on earnings per share, beat on revenue, beat its guidance for both the second quarter and the year they recorded better gross merchandise volumes. if you have not looked at shopify's chart lately check it out it's been an absolute moon shot this is a company that manages e-commerce sites, really online shopping for so many big brands. small brands, medium brands and big brands like tesla. they've also got kylie cosmetics. they've been growing like crazy, really ever since their 2015 ipo. when we come back here on "closing bell," donald kohn, former number two at the central bank, with a new tweet calling for action from president trump. we'll be right back. welcome back to "the closing bell." 30 minutes left to trade as you can see there, the s&p is flat just negative. defensive tilt to the sector performance today. utilities, consumer staples, and real estate top the list communication services comfortably the laggard all because of google, which is down some 7% or 8%. also of course highs on apple, which is weighing on the technology sector down about 2%. their numbers later this evening. cnbc update with sue herera. hello, sue >> hello, wilf hello, everyone. here's what's happening at this hour congressional democrats say they have reached an agreement with president trump on a $2 trillion infrastructure deal. house speaker nancy pelosi called it a big and bold plan. there will be another meeting to discuss how it will be paid for. >> we agreed on a number, which was very, very good. $2 trillion for infrastructure originally, we had started a little lower even the president was eager to push it up to $2 trillion. new zealand police arresting a 33-year-old man after they found ammunition and a package containing a suspected explosive device at a vacant property in christchurch police said a bomb squad rendered that package safe former trump adviser roger stone back in federal court for a status hearing on his trial. earlier this year stone pleaded not guilty to seven counts of witness tampering and lying to congress you are up to date that's the news update this hour sara, wilf, i'll send it back downtown to you. >> all right, sue, thank you president trump weighing in on the fed again just as it wraps up day one of its two-day meeting. trump feeting out, "china's adding great stimulus to its economy. while at the same time keeping interest rates low our federal reserve has lifted interest rates even though inflation is very low and instituted a very big dose of quantitative tightening. we have the potential to go up like a rocket if we did some lowering of rates like one point and some quantitative easing yes we are doing very well at 3.2% gdp but with our wonderfully low inflation we could be setting major records and at the same time make our national debt start to look small. joining us to discuss is donald kohn, former vice president of the federal reserve and now senior economic studies fellow at the brookings institution welcome, don so the fed is actually in a meeting today to decide on interest rates do you think that the president's tweet gets discussed? >> it might be discussed but it wouldn't be really taken into account for policy so those guys are going to sit in there and figure out what they need to do to hit their legislative mandates of maximum employment and stable prices and the president's tweet will have no influence on the outcome. >> he's really upped his calls here, calling for a full point cut and some quantitative easing is there any economic merit to that suggestion given the fact that inflation is below target >> no. i don't think so not at this point. the economy is growing very well we saw good growth in the first quarter, solid growth. i know there were some special factor but i think underneath it all things are doing well. some of the global concerns that we have in europe and china and other places, those economies seem to have stabilized, maybe even ticked up a little bit in europe so i think the threats to the economic expansion have diminished considerably over the last couple months in part because the fed backed away from the expectation of further tightening so financial market conditions are very supportive of growth. i think we've got very good growth yes, inflation is low and lower than the fed wants it to be. so i think they'll have to watch that kicarefully. and in particular watching inflation expectations carefully. but i think as long as the economy is growing at this good solid pace really faster than potential then i think they can afford -- they're in a good place right now. interest rates are pretty low, in real terms they're barely positive, and they're in a wait and see mode, see how this works out. and i think that's exactly where they belong. >> don, in general, though, do you give the president any credit for his commentary on the fed's direction over the last, say, six months? i don't think he really wants to see qe, i don't think he really wants a full percentage point cut, it's all part of his sort of negotiation, if you will, or exaggeration, if you will. but going back six months was he sort of right that perhaps they tightened a little too quickly and now they've pulled back and inflation does remain pretty soft as you've said yourself >> well, i think inflation hasn't been as strong as i expected and the fomc expected so that gives them a little space to wait and see what's going to happen. i don't think he's right in calling for an interest rate decrease at this point or back a little bit so i think the fed is where they need to be they've gotten to the right place. and that's a good place for them to be. so i think the president perh s perhaps -- the president was speaking more about i think his desire for strong growth going -- it came to his re-election than it was speaking out of a real economic framework that could translate >> stephen moore was on cnbc this morning making his case to be a fed governor. how do you think he would do >> well, i think his job would be to convince other people on the fomc that his way of looking at the economy and running monetary policy was better than their way of look at the economy and running monetary policy. i think in order to do that it requires hard analysis, empirical evidence, facts, research mr. moore seems to put more emphasis on commodity prices so he needs to show the other members of the committee that paying attention to commodity prices, making that a focus of policy will be a better policy, will do better at achieving their legislative mandate than they've been doing so far. and i don't -- i really haven't seen the hard analysis from him that shows that pursuing that policy consistently over time would actually make the economy better you can't just pick one or two occasions and say if we'd done it here, done it there we'd be better you've got to show that it would be a consistent policy i also worry that mr. moore himself hasn't been consistent in, say, following commodity prices and has had a different view in the obama administration than he's had in the trump administration so i think there's a concern that he would bring -- try to bring -- or he would bring politics into the fomc room, and that's not the way the fomc works. the onus is on him to figure out how to persuade his colleagues that his way of looking at things is better than their way of looking at things and we really haven't seen the material to back that up yet >> but don, overall we had former secretary jack lu on recently and he said look, elections have consequences. have you been surprised by the level of debate on some of these potential fed picks? there is a process in place. it's the president's pick. and for the senate to confirm. is that not really the process that should play out >> absolutely it's the process that should play out and i agree with jack. the president has every right, in fact an obligation almost, to appoint people who are broadly in agreement with his way of looking at things, his way of looking at the economy many presidents -- that's part of the democratic accountability of this independent technocratic institution. many presidents in the past have appointed people from their administrations. a recent example would be ben bernanke, who was george bush's chair of the council of economic advisers there's nothing wrong with that. but i think what's gotten a little bit confused here is the potential political dimensions of the appointees. and you're right they need to go through a process. he the senate -- if mr. moore makes it to the senate banking committee, they need to quiz him closely on why his way of looking at monetary policy is better than the others they need to make him spell out his analytic framework how it would be applied. and they need to ask him about why he was so wrong in the past. >> how about does it matter how he views the world and i ask this because a lot of his writings have come to light recently including many that strike a pretty misogynistic tone i just pulled one quote out of a 2002 essay that he wrote about sports and he proposes a rule "i propose no more women refs, no women announcers, no women beer vendors, no women anything." >> i think it's very troubling i think to have somebody who has such a view, sort of a contempt for half of the human race and for people who live in ohio. among others >> yes >> so i think -- >> he called it the armpit -- >> whether it's disqualifying or not, i don't know. that's up to the senators to decide it certainly bothers me. >> me top. thank you, don kohn. good to see you. >> all right >> still to come, berkshire hathaway's warren buffett pledging $10 billion to occidental petroleum to help the oil producer knits bid for anadarko plus facebook making a push into privacy >> i know that we don't exactly have the strongest reputation on privacy right now to put it lightly. but i'm committed to doing this we well and to starting a new chapter. s ade'll take to facebook'he of messenger about the company's plans coming up in a first on cnbc interview don't go anywhere. i like to make my life easy. ( ♪ ) romo mode. (beep) (bang) good luck with that one. yes! that's why i wear skechers slip-ons. they're effortless. just slip them right on and off. skechers slip-ons, with air-cooled memory foam. yesterday we told but the energy love triangle between chevron, oxy and anadarko. warren buffett playing cupid committing to invest $10 million in anadarko if it successfully beats out chevron to take over the company. could buffett's arrow help seal the deal for occidental? joining us to discuss is tim razan from oppenheimer thanks for joining us. is extra funding crucial to who's going to win out >> we believe it is. it's a really interesting lever to gives a lot of flexibility to oxy because right now they can use that money in lieu of the 19 billion of debt they need to raise or there's the option that that could add to the cash component of the offer and lower the shares issued. and if they can lower shares issued below roughly 150 million they won't need to seek a shareholder vote >> is that part of this as well? why are they doing this if their shareholders are potentially going to be against it >> it's possible they're doing this because the anadarko board may want that security because shareholder vote risk is out there right now. and i think if nothing else the stamp of approval from warren buffett plus $10 billion gives you a lot more flexibility >> does it make it less risky for shareholders from occidental who were worried about the stretch on the balance sheet from doing the other thing >> that 10 billion that's an 8% annual dividend. so they call it preferred equity but it's really dividend by another name although slightly different part of the capital structure. >> to that point it's a type of deal that warren buffett's done before you go back to the financial crisis one feels like if the company's in total distress. occidental's not so much in distress it's trying to make a sort of forward-looking transaction and it comes at a very high price, does it not? is this a sensible move? what do you think about the ceo's decision to go forward with it? >> i think vicky holiday essentially pushed all her chips forward. this is her bet, and i think her legacy as ceo of occidental may ride on the outcome of this. in poker terms they're pot committed and they're going all in right now and they're trying to win this deal and i think when you think about getting to shareholder approval what this could do with buffett finding berkshire funding on top of -- how you think about the path of investors, the etfs that own oxy shares and how they could possibly influence those votes, that's going to be an important part of this because of the passive investing community. >> what does chevron do next >> i don't know. they're really in a bind now because the common thinking was at a similar bid chevron would provide more security because oxy needed to do this. but now that's really not the case you have buyer's remorse if you outbid chevron can walk away with a billion dollars. >> everyone seems to really, really want anadarko is there anybody else out there that could be another option to be taken over? >> certainly -- i mean, as we've written in our research, pioneer natural resources is a clear sizable takeout candidate. one of the largest permian basin operators. they're a needle mover with over 300,000 barrels a day of production and if you go to the snaul cap emp space you see less influential deals. >> tim, thanks for joining us. tim rezvan of oppenheimer funds. we have 13 minutes left of trade at the moment. the dow down by three points s&p just slightly negative we are of course again on record all-time high close watch. a positive close for the nasdaq and the s&p would warrant that >> doesn't look like the nasdaq's going to get there today. google, apple also not helping we'll see what happens after the bell coming up former facebook exec. chamath palihapitiya on the need to regulate big he can it. >> not because the regulators themselves need to do because that's a coin flip at best but it creates ground rules that create transparency and fairness >> we will speak with facebook's head of messenger about regulation and the big changes coming to the platform coming up on "closing bell." we've done it! hah! great work old chap. we'll be rich and famous. well i'll be rich, you'll be famous... at least amongst your digging friends. here's a thought, ever consider investing? e*trade has easy to use tools that help you get started. you like playing with tools don't you? 'course you do. ♪ don't get mad. start investing with e*trade. here'sshow me making it. like. oh! i got one. the best of amy poehler. amy, maybe we could use the voice remote to search for something that you're not in. show me parks and rec. from netflix to prime video to live tv, xfinity lets you find your favorites with the emmy award-winning x1 voice remote. show me the best of amy poehler, again. this time around... now that's simple, easy, awesome. experience the entertainment you love on x1. access netflix, prime video, youtube and more, all with the sound of your voice. click, call or visit a store today. welcome back we are counting you down to apple earnings after the close earnings beat could push the stock above a trillion dollars in market cap. a key level to watch on the stock's price, $212.08 per share. currently, though, down 2% ahead of those numbers 38 minutes away. >> up 30%, almost 40% from that december low bank performance has lagged behind tech this year. but in recent weeks the stock has been catching up mike santoli over at the telestrator with more. bank leadership. >> yes at least short-term leadership, sara they made another attempt at coming back. this is the qqq etf. obviously the tech-driven nasdaq 100 against the s&p banks etf. when this is going down it means banks are underperforming tech and that has been the trend for a year here, though, is a low about late march, march 25th, i believe. this is when you see this little up trend start to take over. what's significant about march 25th that is when the treasury yield curve went from being inverted or totally flat to starting to widen out again. we've all talked about how this is not necessarily thernlt to now banks make money all the time it's very central to how the stocks make -- this is obviously an early read on a potential shift in tone in this relationship because you can see a couple of other false starts here very sharp period of relative outperformance by banks against tech, against the nasdaq 100, that did not turn the overall trend. we are seeing a little bit of a tilt today, though, toward the lack lagging groups, twartd some value or cyclical names. we'll see if this takes hold fully think that yield curve shift at the start of march the biggest factor the other factor of course is earnings season. where most companies have been beating rather than missing and banks started the season which has given them that emphasis >> no bad surprises out of earnings and if the the fed is going to engineer a soft landing it pushes out the moment when you have to worry about credit really turning sour for the banks. it makes sense they would have a catch-up trade >> we'll see you at the top of the hour thanks, mike up next we're coming back with the closing countdown. >> am earnings set to hit right at 4:30. we'll bring you the numbers along with earnings from amgen, mg and mond looez soon as they cross. back after this. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. under five minutes of trade. let's check out what's moving at the nasdaq franc holland is there tonight, frank. >> looks like the nasdaq will break two consecutive days of record closes. the index down just fractionally right now but it was a really good day for software and for chips. microsoft the best performer in the nasdaq 100 adobe also with a good day chips seeing a turnaround. the etf finished in the negative yesterday. today during much better nxp the best performer after it had a beat in earnings both classes of alphabet the worst performers in the nasdaq 100. after that disappointing reporting as far as ad sales growth, the markets still reacting to that back over to you >> frank, i'll pick it up on the floor of the stock exchange with a little over three minutes left of trade we have got the dow slightly higher the s&p just higher, which means it is on track for another record all-time closing high the nasdaq somewhere off that level today as you can see sliding about 0.7% as frank just told us. the dow by the way the number to watch, -- the s&p off the lows up about 3 points at the moment, or 0.1%. but steady improvement throughout the day the afternoon looking much better, albeit not resound iing. defensive tone in terms of top staples, real estate utility leading the way higher utilities in particular. 1.6% communication services down 2 1/2%, which of course does carry google within it goog the parent alphabet which is down. last week big cap tech reporting in general the likes of facebook and microsoft in particular. yesterday alphabet worried some but it didn't hit the rest of the market apple, though, coming into its earnings down 1.8% of course we're looking at that, down 2% now as we approach the close. they report at 4:30. just going to show you the 10-year as well because it's been a volatile start to the week yields rose yesterday, slipped again today. 2.50% the yields on the 10-year. bob, what are you looking at >> when we heard a number on the infrastructure my years picked up today $2 trillion. we had never heard that before that was a bit of nose when pelosi came out and she and senator schumer came out and my ears pirkd up and we immediately went to infrastructure stocks. aecom, martin mar yeta, vulcan, these are the normal names you would expect fairly modest moves. this is a long way down the road and a lot could happen in between. but $2 trillion was a significant number on the earnings front i think generally the numbers are continuing to beat we have turned positive for earnings expectations for the first quarter. we're halfway through as we've been saying. the numbers have been going in the right direction. and yet it's hard to move the market forward in the region it's expensive right now if we look at forward earnings multiples, we're at 17, 17 1/2 almost, depending what number you choose looks very pricey. historically it's usually 15 to 16 times even if you use 2020 numbers we're at 15 times. valuation matters. a lot has to go right for the market to stay up here the risk is to the down side any kind of problems over in china, any kind of problems with trade, any kind of slippage in the u.s. data it's going to create serious headwinds for the market at these kinds of valuations >> the euro zoen and u.s. data we didn't see u.s. consumer confidence china's manufacturing fractionally off >> 1.9%. 30 minutes away. but right now the bell going to the s&p for another all-time closing high up 0.1%, or four points. the nasdaq is lower at the close than the record close. the dow just higher but still -- sara, back to you. >> the records just keep coming. welcome back to "the closing bell." i'm sara idesen. wilfred frost rejoining me in a moment along amike santoli senior markets commentator the s&p 500 did end up, which marks a new record close 2945.30. after spending most of the day actually in the red. what took us there you did see sort of the bond proxy defensive groups like utilities and staples in the lead in the last few minutes of trading or so groups like financials did turn positive on the day. the nasdaq composite down .6%. that was a story of google parent alphabet getting beat up. apple also weaker ahead of the earnings this hour russ 2000 down about half a percent. apple the biggest loser on the day. investors anxiously awaiting that report. the mother of all earnings report apple set to report this hour. slew of other big earnings set to hit the tape. meg tirrell watching amgen erick chemmi is monitoring amd joining us to talk about the market kevin o'leary is here, chairman of o'shares etf joining us from the milken conference in los angeles. kevin, welcome back. nice to see you. first mike over to you the close took us all the way to record highs >> you'd say resilience really is the theme we've been above this 2930 level for five or six days there's an old trader setting that the market doesn't give you that many chances to sell the high the fact it's hanging around is probably okay even if some of the sentiment stuff is looking a little bit toppy we talked 23 1/2 hours ago about would google bleed into other big tech stocks, growth stongz didn't really happen google's weakness remains pretty much firewalled and that's a positive for how this market keeps rotating away from some o the danger zones >> we'll get back to the broader market in just a moment but amgen's numbers are up >> looks like a beat on the bottom line for amgen in the first quarter. earnings per share on an adjusted basis coming in at $3.56. that compares with analysts' average estimate of $3.48. revenue basically in line. $5.56 billion versus a $5.54 billion estimate the company also raising the lower end of its guidance range. beat earnings per share and revenue. the quarter really driven by some beats on some of their o older medicines like nulasta and embril a miss on repathia also seeing newest numbers on their new migraine drug called emavig you're seeing amgen down about 1.7% back over to you guys. >> we're going to get a take on that from kevin in a moment who's a owner of the stock >> it's been a very heavy stock. it's been very sideways. it takes investors wanting safety if you're going for biotech you usual will i don't look for low p/e, high dividend yield, kind of sluggish growth stories which i think is unfortunately what you have with amgen. the stock can work in certain environments but i don't know that it was a catalyst to get tees numbers >> before you were talking about the broader market interesting to say that google was in isolation, it didn't bring other names down with it what about apple what effect does apple have on the overall market >> to be honest i think apple is kind of its own animal if apple is racing to all-time highs, everybody owns it, everybody feels they need to own it if it has got some momentum behind it. that creates a self-fulfilling effect but i don't think the results are a bellwether really for any other business except for the supply chain >> it's just large >> it's just large everyone knows it, thinks they know what apple should be doing as a company so it's a big talker but the business of apple doesn't change that much the sentiment around am swings around wildly. >> kevin, we've got you back i want to ask about amgen results in a second. but first your take on the broader markets. and what we were just discussing there. record all-time s&p 500 closing high despite some pretty big tech decliners in apple and google today that could have spooked other stocks >> i don't think so. i think the momentum remains because the big surprise if you look at where we're at in earnings season is we do not have a recession in earnings and we printed that 3.2% gdp which is also an upside surprise and the tone on policy here at the milken conference practically every government department is here talking about their vision of the next 18 months and the assumption, and i may be wrong about, this but i'm not that worried about policy changing in the next next cycle. we've got a fantastic economy and we've got amazing unemployment numbers and generally presidents don't lose when they have those two things given, that i think we're not in the eighth inning. i think we're more like in the sixth. and these are new highs. but they're just a number. i think earnings are going to continue to be very good and i think this market continues to go north both small and large cap domestic and if we get that chinese trade deal in the next couple of months that's another engine booster rocket on the large cap s&p stocks >> i'm sort of interested, kevin, that you said sixth inning, not eighth inning, because so many strategy ifrts we talk to on cnbc say late cycle, late cycle, last leg of the recovery what are you seeing that's different? >> well, what's different is here we have an incredible growth story at 3.2 with virtually no inflation i don't think the fed understands this cycle the way other cycles in the past have worked you would have started to see some creeping inflation, significantly higher than where we are now so all of these calls for lowering the fed rate are going to go unanswered because i don't think the fed understands what's happening. most of those who watch the fed don't know what's happening. and yet we're getting it we're getting great earnings, low unemployment, no inflation what a marvelous environment to be an equity owner in. this is incredible you've got to change some before you tell me to sell a stock right now not just because it's hit a new high i don't care about that. i care about cash flow and earnings and they're both fantastic >> let me give you another earnings number to digest then just getting numbers from mondelez, the snack giant. i'll bring them to you earnings per share 65 cents. that's better than 9 estimate of 61 cents revenue's in line. 6.5 billion. 6.55 was the shade oirng revenue number, that's very important and has been a really real highlight of some of these consumer names this quarter. also very strong for mondelez. 3.7% analysts were looking for 2.3% three themes that jump out at me looking at this report, number one, very strong international growth remember, mondelez is different than the other u.s. food companies because it gets about 3/4 of its revenues overseas very strong growth overseas. powered by oreos this is the big power brand from mondelez they've made changes and invaigs as round that. double-digit growth in oreos overseas high single digits in the ulths. that brand continues to resonate they've got good marketing behind it. and the other theme i would bring up is the strong dollar which continues to cut into american sales abroad. net revenues declining 3.4%. but if you take out the impact of currency and look at organic it's up 3.7% so it just shows you how much that's hurting companies the stock is being rewarded. it's up 1 1/4% we've got a first on cnbc interview with mondelez's ceo dirk van de put tomorrow 10:00 a.m. eastern with me on "squawk on the street. example of a strong number and a strong number based on overseas. zblts been a strong stock in the group but so have unilever and nestle as opposed to the u.s.-centric food companies that haven't participated in this run. >> it's not rated for instance as highly as a procter & gamble, a coca-cola, pepsi, which also showed -- >> specifically food, yeah >> specifically food it's a standout in terms of growth compared to a kellogg, general mills or campbell's soup snacks growing faster than some of those cereals and yogurts and international where it's playing out right now. >> i wanted to switch focus, telephone, to an earnings report that wasn't so positive of a stock you do sxoen thatown and s alphabet what was your take last night and were you concerned >> this is a good case study for why if you're going to own the internet space you need a very broad portfolio because it looks isolated to alphabet really what i would have wanted at the end of the day is more granularity to where this revenue slowdown is occurring. is it a youtube problem? is it a search problem what is it and the fact you get this transparency you punish the dock more as a result of that i would have preferred a comment saying look, these silos are intact and the growth is still there. we failed in this silo or that silo tell me why as opposed to having me second-guess what's going on there. because i can tell you right now i'm getting much more plorms out of my international internet giants than i am my domestic you just don't want to own fang. there's companies growing much faster than google now in the alibaba and the 10 cents 69 world and the other companies around the world it's time to diversify your own st portfolio and the case study is exactly what happened. >> it didn't seem to dralt the broader market if apple disappointed would that derail all the fang names tomorrow and what do you expect to see this evening at 4:30 p.m. >> well, the problem is apple now and the stock's been fantastic but the risk you have as a shareholder is they're not giving you unit sales on iphones as if that doesn't matter. well, it doesn't matter because if you're not -- i'm assuming we're going to have double digits decline in iphone sales but i don't know you just do your channel checks and walk into their stores and watch the activity, it's going to be declining. but have they been able to translate their story into a subscription story maybe and maybe that will be the theme of what they do on the call. if they have a bad call, if they have a miss, that will be bad because people are trying to call apple consumer electronics now. it's got so many hats to push forward. but the core if you're not selling more units everywhere i just wonder how much more you can push the subscription model story and the enhancement of margins on selling basically digital data you really want to have more trojan horses. and maybe that's going to be the challenge apple has. we'll see in a few hours >> just to be clear, do you own the stock, kevin >> no, i don't not here >> didn't sound like it. >> kevin, we'll leave it there thanks for joining us. enjoy the rest of milken conference over there in los angeles. >> the countdown is on we are just minutes away from apple's earnings we will have the numbers the second they cross the wires and discuss whether you should be buying the stock with an all-star panel following the results. but first, facebook's head of messenger explains how the social media giant will be able to profit from ceo mark zuckerberg's new privacy vision. that interview coming up in a minute alright boys, time for bed. listen to your mom, knuckleheads. hand em over. hand what over? video games, whatever you got. let's go. you can watch videos of people playing video games in the morning. is that everything? i can see who's online. i'm gonna sweep the sofa fort. well, look what i found. take control of your wifi with xfinity xfi. let's roll! now that's simple, easy, awesome. xfinity xfi gives you the speed, coverage and control you need. manage your wifi network from anywhere when you download the xfi app today. facebook hosting its f.a. developer conference in san jose this week. ceo mark zuckerberg gave his keynote this afternoon emphasizing their commitment to privacy. listen >> i get that a lot of people aren't sure that we're serious about this i know that we don't exactly have the strongest reputation on privacy right now, to put it lightly. but i'm committed to seei ed tt well and to starting a new chapter for our products and it's going to take time. >> our julia boorstin joins us now from the conference with stan chudnovsky, the head of facebook messenger julia, over to you >> well, thanks so much. and stan, thanks for joining us here today >> hi. >> so you run messenger and messenger is really the centerpiece of zuckerberg's new focus on private communication across the apps pf of all of the announcements today what is the most important that consumers will see as a change to their messenger experience and the most important thing that advertisers will see >> so we announced today we're going to roll out over the rest of the year a couple of things one is we're going to let people be able to watch videos with other people while they are in their video chats, in group video chats or just in messenger group video chats. we feel like that's going to open up a new opportunity for new levels of engagement and time spent on the app because now all of a sudden you can watch a clip or you can watch a video and this is something like i like to think about distributed living room. it used to be that you need to get into one room together to watch something. now you can do it from multiple places at once >> and what about for advertisers? what are the tools you're offering that could end up driving ad revenue >> so for a while we've been focusing quite a bit on what we call click to messaging ads. and those are adds advertisers can buy. and click to action is message once you tap on that if you are a person if you're looking for your news feed, tap on that message button you open up the threat between you and the business and business can do a bunch of things with you. business can help you. business can sell you things business can allow you to book an appointment with that business so what we did today is introduce a bunch of templates like appointment booking template or lead generation template to -- >> new ways for businesses also to generate different kinds of ad revenue for facebook. but one thing i thought was notable is that messenger isn't just about messaging anymore now you're bringing in updates from facebook, bringing in stories from instagram so it sounds like it's going to be pretty crowded and look a lot like facebook or even snapchat how do you avoid messenger getting so crowded that it's just like so many of these other services >> that's a great question it's the way we are thinking about it is that we are on our general path to simplification, whatever we do on messenger from the user's perspective our design, the big redesign we did last year, announced at f-8 actually last year and we rolled it out as the rest of the year, we went from nine types of messenger to three so what we're announcing today is one of those three tabs which is a separate place which you don't have to go to if you don't want to, if you just want to stay where messagers are in your inbox you're welcome to do that. but if you choose to go to that other place, this is a place for friends. this is a place for people who are close to you, for your family this is a place where you get updates, where you get status from them. whatever they want to share with you in graphical visual format through stories, through statuses, all of that's going to live there can and we think that's going lead to more opportunity for people to stay closer to each other and get connected. >> wilf, if you want to jump in here >> yes thanks, julia. stan, i want to ask about how you're thinking now about whatsapp and the level of encryption it currently carries, if that's likely to be the case forever and it being a stand-alone messaging service. and if it is whether that makes it much harder to monetize >> one of the things we talked about today is interoperability. the way we are thinking about it going forward is that messenger and whatsapp need to be interoperable and people should be able to send messages from one to another if they want to when it comes down to encryption, then i will say that right now we are not using content of the messages even on messenger for any types of advertising. all of that is just there and it's already private except that it's not end to end encrypted. so going forward we definitely are going to double down on end to end encrypted and we're going to be more encrypted whatsapp style and we will need to do that in order to allow interoperability but we don't see that as an impediment to monetization >> fascinating well, stan, thanks so much for joining us we look forward to seeing these changes as they roll out coming up thank you so much. >> thank you for having me >> stan chudnovsky, head of messenger for facebook guys, back over to you >> julia, thank you very much. our thanks to stan also still to come, apple earnings of course we're culting down about ten minutes away the tech giant one of the best-performing dow stocks this year find out if its results will send shares to new highs plus find out how apple's earnings will help fang stocks and the rest of the tech sector. and as we head to break here a's look at the top performing s&p 500 stocks for the month of april. global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise wthe pace of tomorrow. you set it. nasdaq. rewrite tomorrow. we're finally back out in our yard, but so are they. the triple threat of dandelions, lurking crabgrass and weak, thin grass! scotts turf builder triple action. this single-step breakthrough changes everything. it kills weeds, prevents crabgrass for up to 4 months, and feeds so grass can thrive, all guaranteed. only from scotts. our backyard is back. this is a scotts yard. the s&p up just 0.1% the nasdaq which of course has been at those levels declined by 2/3 of 1%. and the dow higher today but remains a couple of hundred points or so away from its own record all-time closing high russell is lower defensive tilt today communication services very much at the bottom because of google. real estate utilities and staples toward the top just moments away from apple's earnings but it's already been a busy after hours session mondelez reporting better than expected earnings. amgen beat wall street's estimates on both the top and he bottom lines six minutes until apple. time for a cnbc update with sue herera >> hello, wilf hello, everyone. here's what's happening at this hour the department of homeland security is running out of money. that comes from acting secretary kevin mcaleenan. >> while our 2020 budget will help address this crisis we will need additional funding even sooner given the scale of what we're facing we will exhaust our resources before the end of this fiscal year, which is why this week the administration will be sending a supplemental funding request to the congress. the mother of the so-called affluenza teen is back in jail a judge revoked the bond of 52-year-old tonya couch after she failed a urine test. her $75,000 bond was contingent upon her abstinence from alcohol and drugs. and the 145th run for the roses gets under way at churchill downs on saturday. omaha beach and roadster are the early favorites. the post position draw was held today. omaha beach will start from the 12th gate. roadster will come out of the 17th post time is 6:50 p.m. eastern time and of course you can see it right here on nbc. that's the news update this hour i'll send it back to you guys. i love the hats. i love the mint juleps i love the whole thing >> yes who doesn't? sue, thank you >> you got it. >> amd out with results. eric chemi following that for us >> you can see the stock popping about 5% the numbers look like just an in-line revenue beat by $10 million. so 1.27 billion. the eps 6 cents adjusted that's a one penny beat looking for five cents there gross margins a lot of people were looking for that number it was 41% that was exactly in line with the estimates and the guidance at 41% you see the stock up more than 6% a lot of people were concerned the intel results, how that might affect amd, would they suffer as a result work they get some shares. i think it looks like the in-line report but a lot of people breathing a sigh of relief that it wasn't actually worse than what we see right here we're going to dig into this and get back to you if we get more details. >> thanks for that amd, lisa su will discuss those results with "mad money's" jim cramer that's tomorrow at 6:00 p.m. eastern time up next, apple earnings due any minute in now. we will have full team coverage of the results ene mehetode t sck wh wco right back. measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org welcome back to "the closing bell." minutes away just less than a minute or so until the apple earnings hit mike of course coming into this strong performance year to date. soft performance today expectations where do they stand? >> strong performance year to date but still 15% below its highs. still kind of convalescing from the beatdown it had into early january. i think yesterday's experience with google having gone into the report on a high maybe got people spooked and that's why apple backed off on the day it was going to report. options market reporting something less than a 5% move, which would be roughly in line with historical averages the iphone revenue number very important because the first time we're getting it in this form. >> i think the iphone revenue is important. it is expected to fall the question is how dramatically the margins are important because we do know they cut prices in places likes china average selling prices, asps been a big driver of some of the beats not necessarily the growth in shipments so those numbers are going to be key as well as services. >> revenue of course the headline number we're looking for 57.3 down % year over year is the expectation. of course if it was worse than that it would be a blow. >> and it's zraging down by the way all the s&ping agr aggregate numbers. >> here they are josh has them. hi, josh >> wilf, apple reporting earnings per share here of $2.46. the street was at $2.36. revenue of 58 billion and also projected 57.37 billion. gross margins coming at 37.6%. iphone revenue 34.05 billion that is basically in line with expectations services revenue up 16% to 11.45 billion. and also looking there for 11.37 billion. services, margins in the quarter, 63.8% turning to the other product categories, ipad 4.87 billion. mac 5.5 billion. wearables, home and access risz. that jumps 30% to $5.1 billion turning quickly to the guide apple's guide for revenue between 52.5 and 54395 billion versus an expectation of 51.94 billion. and expecting gross margins between 37% and 38%. also capital the board has authorized an additional 75 billion for share repurchases. also raising their quarterly dividend, declaring a cash dividend of 77 cents per share, an increase of 5%. guys, back to you. >> josh, thank you for nap the shares trading higher by 5.6%. 212.40 the level 212.08 enough to take it above $1 trillion. in market cap. 6% jump after hours. let's get reaction to those numbers. russ gerber from gerber kawasaki and colin gillis from chapman road partners. mike let's start with you. >> the guide looks like it's got people excited here. obviously apple with a reputation of being relatively conservative about guidance. it was above the range for revenues capital return of 75 billion i think is in the zone of what a lot of people were looking for and i think the idea there was no revenue shortfall in any particular line item, so therefore the fact they're stopping iphone unit sales was not necessarily a greater signal that there was some ongoing iphone sales >> services was a beat psychologically that's important. at 11.45 16% growth >> i agree i think the services number is nice for them certainly. but at the same time what we really want to see is a better breakdown of what that really encompasses. they're sort of in line or with expectations but in terms of how much of it's advertising, how much of it's am music, the new apple news for that matter, the stuff that's owned and operated and then the third party, the tax, the 30% tax they take on the other apps, if this is the key area they want us to focus on we need a little bit more detail i think all around it looks nice with the revenue numbers and everything but if you're looking at even the iphone revenue we don't know the units. so a.s.p.s, these kinds of things, these are harder things to estimate going forward. we need visibility in these other areas. >> we've got some visibility now with our josh lipton back in cupertino and headlines from his interview with apple ceo tim cook josh >> sara, yeah, i did have the chance to speak with apple ceo tim cook let me bring you some of those headlines too. greater china revenue, sara, 10.22 billion in the quarter that was down about 22%. obviously that is a key focus for apple investors. they want to know what the trends are i did speak to tim cook and he says those trends as he sees it are improving. and let me give you his details there. specifically cook telling us march was better than the average for the quarter. i asked him why and he said we adjusted price as we got into the quarter, we adjusted the takeback in the weakness and the currency next we rolled out our trade program. that had gotten some success in the united states. and he says i believe that the trade relationship, i don't mean the tariff, i mean the tone, is much better today than it was in the november, december time frame. that affects, cook telling us, consumer confidence in a positive way also talked to cook about services, what you guys were just talking about there up about 16% in the quarter. that was a slight deceleration remember q1 it was up 19%. i asked cook to explain sort of what the trends he's seeing there. cook talking about currency in there. he says currency is a headwind in both our product businesses and the services business. foreign currency was responsible for a year over year decline in revenue of 200 basis points and embedded in our guidance for this quarter is a 300 basis point headwind from a year over year point of view clearly part of that and finally i did want to touch on qualcomm. obviously these two companies involved in a long nasty lawsuit. they then did make a deal during opening arguments at that courthouse in san diego. i asked cook what changed to make that deal cook telling cnbc, "we came to an arrangement on three really key things one was a multiyear supply arrangement. the second was a royalty rate and a direct license, which was very important to both parties and the third thing was to get raid of the bloody litigation. so those three things lined up and we found the intersection of all those things that would be different for both companies and it is good to have that behind us." guys, back to you. >> very valuable to get those comments as soon as the numbers are released apple shares popping almost 5% after market let's go back to our panel now kevin, iphone sales down 17% that was pretty much what the street was expecting how do you think as an investor about that number? colin, excuse me >> so in terms of the iphone sal sales, we really would love to see the a.s.p. missing that number, not having that unit sale number is a big question mark for investors. but seeing the iphones declining and hoping you're going to pick it up with services revenue while services is decelerating, that's still going to be a point of concern there's a little bit of relief here in these numbers. especially given what happened in the quarter that they hit the top of their guidance range. but this is a company whose revenue is still shrinking they shrunk by about 5% compared to the prior year. >> walter, the revenue from services, 11.5, from iphones 31. so still a long way behind the iphone revenue but is this morphing into a services company and what does that mean? >> that's really the big picture question as apple moves from being a product company to a services company or at least shifts some of its center of gravity. and that's important because am has always had a business model that very much protected consumer privacy, did not aggregate eyeballs to sell them to advertisers in that way so we have to see when it moves more and more to a services business whether it can do so with consumer revenue, which it's trying to do and i think would be great for the content-producing industry, or whether it's going to have to focus more on advertising revenue and thus have to do things that sort of change a bit the model of apple, of always valuing privacy. i mean, i'm one of those people who doesn't like the fact that google and facebook are sucking up my data but you know, the 120 kids i teach at tulane, they don't want to pay for things and they don't really care about privacy that much so the question is whether apple will move more to a model that doesn't guard our privacy quite as much as i hope it would, and move to a model -- a model of having consumer revenue for content. >> you've been diving into the report what else have you picked out? >> i think the services revenue, we're going to stick on that theme for a bit. i do agree with josh he makes the right point about it's slowing down a little bit if it's fx headwinds i think that's interesting we need to get a better sense of what the actual subscriber numbers are for the owned and operated part of apple services. apple news, apple music, the forthcoming apple tv we know am music is in the 50 million range. apple news they signed up 200,000 subscribers in the first 48 hours we know that much. i did some reporting on that a few weeks ago. but this is a one-month free trial thing. that's also going to be a churn element to that. but to walter's point if it's going to become more of a services business privacy is going to be an issue subscription dollars is sort of the easy way into that because you're not aggregating as much data to sell to advertising. you're just taking credit card data which you already have and charging them month to month you still need to fill it with more content whether it's news or tv or whatnot but you don't know exactly where these customers are, how they're charn churning out month to month. >> want to get a shareholder reaction you own about 90,000 shares. what stands out to you and would you pick up more apple stock? >> i'm so impressed with the way tim cook manages to beat earnings 100% of the time by lowering his expectations to such a low level that he has to beat it. and with numbers going down across the board from sales and this lack of transparency that everybody's complaining about, you know, i don't like that. so as much as i am a shareholder of apple, we are not adding to our position the innovation curve is dead there. they haven't come up with anything i was thinking like what was tim cook's greatest invention at his time at apple? i'm curious to what the panel said about this because i couldn't think of anything but i love the business. i love apple -- >> shareholder value >> yeah. he's a financial engineering guy for sure but all those kids in tulane are using iphones and i don't think that's going to change and i don't think they should lighten up on privacy. i think privacy's the most important thing that apple protects for its users so the question is as they sell these services are they going to be successful and so far they haven't proven that. i kind of think there needs to be a more services type of leader at apple, somebody who has experience in content. tim cook picking tv shows is a bad thing i think. >> i totally agree with ross if we saw their big presentation a few weeks back with their forthcoming apple tv with very little information about what's going to be in there, how it's going to be priced, you contrast that with disney's presentation, which everyone really loved. investigators really aide ate it up because there were a lost great specific details and it was a compelling pitch apple hasn't really shown it can do services in the way a traditional company like disney can. and i think that's going to be a tough spot >> and even -- >> it feels odd talking about tim cook's future on a day the stock's up 4% after earnings there's not many people that agree that tim cook should be out, are there >> no, no, no. but i do think it's important to say let's look at what disney is able to do billions of dollars and bob iger's wonderful fingertip feel as they produced a very clear services business of content and they said what they were going to price that, which was rather low. i think this is not a great business to get into or to r. lie upon in the future if you're going to go against netflix, go against apple, go against amazon all these people throwing billions at hollywood. it does not seem like a field in which you're going to have a lot of running room and especially i think when disney has just hit it out of the park in aggregating a company that will be good at doing that. >> colin, we've seen this stock coming in just a little bit off the reflex mop i wonder if people are kind of working through the implications of the guidance. it was a higher revenue guidance but when you look at the expenses and the margin assumptions i wonder what it means for the coming quarter's earnings i don't know if that's exactly what's going on in terms of the market absorbing of these numbers. and i want to touch on ross's point too. tim cook lacks founder flame he's going to be known as the buyback king >> totally >> his number one accomplishment has been returning the $300 billion to shareholders, and fine that's quite an accomplishment but it also means you had no ideas. you had no ideas to better deploy that cash and i think in ten years from now we may look at the cycle and the cash flow that's been generated from the iphone and the lack of invasion, to be able to deploy that cash and be regretful that apple wasn't able to come up with new revenue streams. >> they could have bought part of disney a year ago knowing what disney was doing. and iger's on the board. and they kicked iger out of the meetings and apple has no streaming app. they're going to give it away. and they're going to sell disney's app and it's sad that tim, even though he can send the money back to me but he couldn't come up with anything the best thing he did i think was buy beats years ago and that was -- >> i'm not sure that's fair, ross what about the services business, which they've grown -- >> what is the services business it's a tax it's just a tax. they have a monopoly on our devices. and they sell other people's content. i get it but it's not a services business they're not doing anything they're just taxing us i think it's a nice tax. i like collecting the tax. that's why i own -- >> the new iterations of the iphone yes, he didn't invent the iphone but you know, the x was such a blockbuster product. now there's some excitement around making a deal with qualcomm and -- >> they fought qualcomm and lost they lost to qualcomm. they were behind on 5g they needed to do a deal because they had to because if not they weren't going to get a 5g phone. so apple kind of blew that but there are so many people not upgrading their iphone right now. that's apple's biggest problem, is my wife is still using her 7 and she's perfectly happy. and i'm like do you want a new phone? she's like i'm fine. you know, that's a huge problem because yeah, they made steve jobs's phone really well is that tim cook's legacy? >> what about you? did you upgrade or is -- >> i upgrade all the time because i have to own the newest products >> ross always gives home examples >> i do a lot of research at home >> there you go. guys, we're going to leave it there but we will of course continue to discuss apple throughout the rest of the show. up next, we will be discussing the broader fangs and all of the tech companies that have poed a h y c trertndowouanrade those when we come back. apple is trading higher, up almost 5% after hours on earnings let's bring back our heated panel discuss. ed lee from the "new york times," walter isaacson, author and cnbc contributor ross gerber from gerber kawasaki, colin gillis from chatham road partners. so-g guys, we didn't want you to leave. let's get a final thought on what we will be listening for. what's going to be key on the call with this big pop here after hours? >> again, we want more information on services. i think -- i suspect that their owned and operated stuff, apple music, apple news, the forthcoming apple tv that's the thing they want to focus on where it's not a tax thing necessarily it's more the stuff they own or at least they're facilitating and if they can grow that side of it that that's something they can control the destiny of and if they can give us more information on that, talk more about that, that bodes well. but we'll have to see what they say. >> colin, how are you thinking about the valuation? >> tim cook is trying to change the narrative around apple to becoming a services company and rotate away from the iphone. they're giving us more data about services, talking about gross margins. that's all fantastic they're giving us less data on iphones. that's not fantastic you have to remember that the iphone segment is still four times what services is we need to see what color he can give us about channel, about china, and demand for iphones. it's still the iphone company. >> i mean, it is for now the iphone company i guess but ross, if you kind of lower the temperature on this idea that you have to have a hit every other year with a brand new revolutionary iphone and it's more like a steady state constant upgradebusiness as things come due, it's not the worst thing in the world for a stocks multiple. >> no, it's not. and with sales down, what, 16% that's my concern-s, is the number should be stable. if they're going to sell 200 million phones a year that's what they're going to sell and you work on a.s.p. and improving val krewe. what we're seeing is less sales and where's the bottom there but what i really want to see on the call, i want more color around services. we know iphone has the issues it has. so i'm okay with services being their future but how many people have signed up for the magazines i don't think it's many. more color on whether these products will actually make money. >> walter, what about you? what do you want to hear >> well, you talk about a steady state, upgrade in the phones and you have a company in which the cycle for upgrade is moving from about every three years to about every four years so that's a problem. when you look at the services business, to me, one of the complex things like, let's take apple news and i was in the news business, of course. if you're going to sell our content meaning a magazine or a snu newspaper. if you're trying to get "the new york times" or others in, you not only have to give them the money, you have to give them the data and every user. those companies producing the content they want to have a direct connection to users and that goes against apple's dna. i'd love to hear if they're going to create new ways to do a business model based on having consumes are pay and doing a careful sharing of data. >> ed, walter, ross and colin, thank you all very much for joining us today to discuss those apple earnings. >> i think we should just pause, mike, and talk about a 5% move higher for a trillion dollar company. >> not quite a trillion. it's just below that level again. >> they keep buying that stock they keep eating themselves and preventing them from going above $1 trillion. >> do you think it's the guidance >> i think it's the guidance and the fact that it was pretty much steady as she goes on the operating numbers. i think it's a good enough number to sustain the stock where it is right now. it's no longer really cheap, but also it doesn't seem like the stakes are very high for the coming quarter so they're going to buy back more than 5% of the company again this year based on this authorization. >> coming up, we'll talk about what this all anmes for the broader tech space and other fang names looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ ♪ ♪ in big ways and in small, bank of america is here to help you get things done. what would you like the power to do?® ♪ done >> still ahead, apple jumping on earnings microsoft closing above $1 trillion in market cap and alphabet turning in its worst sie 2012 we'll break down the tech moves with a top portfolio manager next to avoid disruptions! here in sales. even here! i'm talking about ai we can build to work... here, predicting trends. and here, wherever our data lives! and here, working with all our other ai! i think we're done here. expect more from ai. ibm watson. ♪ here i go again on my own ♪ goin' down the only road i've ever known ♪ ♪ like a drifter i was-- ♪ born to walk alone! keep goin' man! you got it! if you ride, you get it. ♪ here i go again geico motorcycle. 15 minutes could save you 15% or more. whai tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. welcome back apple's stock soaring after just reporting earnings moments ago it's up 5% capping up an earnings season and facebook and alphabet seeing major moves the day after reporting earnings joining us now, jeremy brian, portfolio manager at gradient investors. he shares intel, apple and alphabet are you regretting that? >> a little bit after, but i mean, the thesis is still right for us it's up 30% year to date it's back to about a five-year high if valuation so we think it was just prudent to take some off the table. the report looks good. we think the numbers look good we still own a portion of it, but i still think it was prudent to take some off >> some of your other positions here, intel had a somewhat weak quarter. facebook had a great quarter and google had a pretty steep drop and worse than 2012 today and what are you doing for those stocks if. >> great question. intel is a sell on strength for us and frankly we owned it into the quarter and we were surprised of how negative it was and what gives us pause about intel going forward and next quarter it didn't sound like it was going to get a whole heck of a lot better and if we start to see a pop we're more sellers on strength than we are buyers of there. >> we like the story long-term there and we think it was an expectations miss and 17% on the revenue side wasn't the 20 that they'd been getting before and the clarity, they need a little work on the clarity, obviously, and we still think overall it's still a valuable business and if there was any prolonged weakness we'd probably be buying there. >> in terms of facebook, you're pretty pleased with that >> absolutely. facebook just did -- it's interesting how you're talking about the security concerns and data privacy have you seen consumer behavior change i don't think we have as of yet. the numbers for facebook still look very good and people are still using it and people are still clicking ads on it, obviously. so the revenues are coming in and the expenses are starting to decelerate, as well. >> jeremy brian, thanks for joining us. >> thanks for having me. >> mike, the big drag was google's report last night and tomorrow won't be the case for apple. if thisstrength continues in apple and whether it spread good feeling on the first day of a new month across tech and just looking right now for no particular reason, amazon is bid up slightly because the nasdaq 100 and the etf will go with apple. >> fang moves all together, it's usually hot or not >> has been over time, yes >> is this the time when they move in opposite directions to some degree and i don't think you necessarily are going to be able to extrapolate from what apple does tomorrow and a net positive. >> that does it for the show today. thanks for watching. >> have a good evening, "fast money money" with carl quintanilla starts right now. >> fast money starts now from times square our traders on the desk, tim seymour, karen finerman and guy adami and we will start with the big after-hours story, it's apple surging on the top and bottom line and the conference call kicking off, and up 5.5%. full team coverage, josh lipton in duper tino and s

Related Keywords

United States , New Zealand , Netherlands , China , Hollywood , California , San Diego , Togo , Ohio , France , London , City Of , United Kingdom , Chicago , Illinois , Macau , Holland , French , Chinese , Amy Poehler , Anadarko Warren Buffett , Warren Buffett , Jeremy Brian , Julia Stan , Walter Isaacson , Donald Kohn , Kate Rogers , George Bush , Russ Gerber , Julia Boorstin , Colin Gillis , Tim Cook , Bob Pisani , Lisa Su , America Mcdonald , Angeles Kevin , Don Kohn , Josh Lipton , Martin Mar , Ken Frazier ,