you've got the utilities, real estate and staples energy the big decliner. >> qualcomm is the big stock story getting crushed after a judge ruled the company violated antitrust law. we'll discuss whether the drop say buying opportunity >> and the pile-on for tesla continues with another negative note out today while the bulls get behind beyond meat once again we'll give you the word on the street moving those two stocks >> joining us for the hour is josh brown, ceo of rittholt wealth management. we're lower, off the lows of the session. fed minutes didn't do much to turn the market around >> the word is paralysis every time you get a new reason to sell, maybe we back off a little bit but markets are neither gaining ground nor losing ground we've had a couple of 1% days this spring but really it's been fairly calm. i joke around and tell people, tell clients if you were to give me these headlines and tell me, fill in the blanks, how far is the s&p from an all-time high? i would be totally off the mark. i never would have been able to guess based on -- >> we'd be more negative >> i think we have more headline volatility >> would bond yields be more negative >> yes, i think yields would be lower. and i think that you'd probably have a much more depressed stock market than what we have we still have stocks making new highs. there aren't that many, we we have sectors within 1% of highs, and we've got some fairly big companies that look absolutely fine technically, fundamentally doesn't seem to be an issue. >> a bearish sell from josh. we'll be diving into that throughout the next hour let's get to what's moving the markets. jon fortt, nadine turner and scott from wolf research, steve liesman with details on the fed minutes, and let's dive into qualcomm first with jon. >> you can see qualcomm off more than 10% today as we head to the close. on this news that the ftc at a near total victory with judge lucy ko with the judge finding qualcomm did indeed abuse monopoly power over the smartphone market in a way that it uses its licensing business and its chip business together now qualcomm says that it will appeal it takes issue with the judge's findings on a number of points argues there are some findings of fact. they think that the judge got wrong. but, really, what this does is throw qualcomm stock back into a state of uncertainty remember it was just five weeks ago that qualcomm and apple announced they resolved, they had really made up in their longstanding dispute over exactly these issues a settlement that would see apple pay qualcomm more than $4 billion and also take a direct licensing relationship with qualcomm now subject to appeal, this throws qualcomm's business model of both making chips and charging a royalty into question but, for now, the 5g chips that are now the talk of the smartphone industry, qualcomm is the main supplier of those and all the companies seem to be moving forward with those plans. >> jon fortt, thank you. how do you play qualcomm right now? >> so i think the chips in general have been a tough group this year because so much of what they do comes from overseas and so you've got that as a backdrop this is a stock that is selling exactly where it sold in 2014. this is at a five-year standstill and a lot of it was about apple. and then a new high on the apple settlement turned out to have been a sucker's rally i actually would have more of a predilection to buy something like this. a pro-business administration. and already you are seeing that the justice department might not be looking at this the same way, for example, the ftc is. so you actually could have a scenario where they appeal, but maybe there is an appeal even coming above the court from on high and this is a good test to see whether or not we have a pro-business environment becaus% this is a classic example of a company that innovated in the '80s, '90s the patent model was not how it started. but let's see if they can find a way out of this. down 10% on a ruling like this, i think if you are bullish on the name, maybe it changes your earnings expectations. i don't think it throws the whole business model into doubt. >> especially where they're going after chinese telecom and technology giants. >> arguably that would be supportive of qualcomm finding a resolution they like if you think 5g is important to the white house. they are actually looking for 6g >> let's talk retail also under pressure today that was a joke, right >> no, me? >> following earnings from the likes of nordstrom and lowe's, these and other retailers citing one common thread -- tariffs >> tariffs, we reflect on the impact it could have and will have on american families that are going to be paying higher prices >> either relates to the proposed 25% that is possible to hit in june. we did and have been working on strategies to reduce our overall exposure into the china market >> we're obviously disappointed to see the increase in tariffs from 10% to 25%. >> if the potential fourth tranche of tariffs is placed on all chinese imports, that will have an impact on our brands >> let's bring in nadine and scott for more nadine, all the company executives are being asked about tariffs. it's obviously an overhang on the sector who is best and worst positioned to handle the higher tariff rates and potential higher tariffs coming on chinese imports? >> i think it's a stock picker's market as you've seen through the earnings cycle as you've heard during the earnings call, some are talking about planning for it. early on you had a retail panel. how are consumers going to respond? where will they mind where will they not mind it's to say who say low cost producer because in a time when there's tariff wars going on, if the economy softens at all, you want to have that low cost producer we have a company that we like out of canada that out of -- i think it's 25,000 manufacturers, they are the low-cost producer and so you can probably find those who benefited from it but then also those who haven't planned who have called it a wall of worry in terms of the earnings coming up that are going to get hurt. >> you were short target coming into today what did you miss there with the results better than expectations the stock is up. >> we didn't say when we got in. all i said is as of today we're short. but what i liked about the earnings today in terms of looking forward and having a negative view on the company is that, number one, while they had solid revenue growth, it didn't really translate the same to ebitda margins, as well as profit and so that's one of the themes we're seeing not just from 2018 when there was a lot of brick and mortar sales which are higher margin, but looking ahead. 40%-plus growth in the online, the digital growth rate of target and then you were looking at the cut sg&a that's how they made the bottom line looking ahead, huge comps. the cfo would only bless the first quarter, not the rest of the earnings which he said was the ceo's numbers. and so we like the setup going forward. >> scott, this earnings season has really been a tale of winners and losers for retailers. feels like department stores are losers and some of the others, target, walmart, tjx, are winners. is it that simple? >> i think that's part of the story. if you look at our own consumer surveys, the department stores, the grocery stores don't survey all that well. broadliners survey well. the consumer still likes that format so it's not a big shock to us looking at our own data that the likes of walmart and target are seeing good sales growth to the comments about flow through of good sales to the bottom line, that's the challenge. that's the challenge we're seeing throughout retail and that's the amazon impact everybody needs omni channel omni channel is extremely expensive. and can you keep up with the death star and the death star really is aiming its firepower right now at the consumables industry and that's why we really don't like a lot of the companies that are in that industry like a kroger and even a walmart we have concerns about >> josh, is the u.s. consumer weaker than people expected? >> i think the consumer is doing well i echo one of the points about broadline versus department store. one of the things i'd be curious to hear the panelists' thoughts on target grew faster than gdp last quarter. a lot of retailers did not have things anywhere near that. kohl's being a good example. so the question becomes, maybe it's that they are executing and investors don't care as much about whether or not they had to use sg&a they like to see proof of concept in omni channel. they saw it a year with jet.com and walmart. target is showing them we can have somebody buy $50 worth of merchandise on the site. come to pick up their stuff and spend another $50 on site. if that's the case, i don't know if they can do 40% again they did 30% last quarter. if they're doing anything double digit, investors will give them the benefit of the doubt that the profits will come. i don't think they need to come this quarter or next quarter what are your thoughts on that >> what you have is a 6% margin business that has not been investing in the next day delivery you called it the death star you have amazon, walmart, two biggies with cash able to have already invested for several years into where the puck is going. and then you have somebody who spent capital but then pulled back in order to make profits, right? you saw last year growth was up but you actually had margins down in terms of the flow through to the bottom line so if you are trying to expect to have 6% growth, sorry, 6% ebitda margins but not be able to spend for next day delivery, at some point you'll have to spend that capital and again you have to push the puck forward and say, well, how long is the next ramp of cap ex and investment before my investors are happy again so that i'm just keeping up with the competition. >> very quickly, nadine, what is your best long idea? you gave us target as a short. >> you know, we really like gildan it's a canadian mid cap company. hopefully some of your viewers can go there what they do is they are a low cost manufacturer. they produce for amazon essentials walmart. a lot of the companies you're mentioning and regardless of tariff wars, they produce in honduras, also now opening up a big facility in bangladesh they already spent the money versus target who needs to spend the money. you'll get this huge incremental margin flow through, not just of margins but then to cash flow. we like that setup we have a macro view, gdp growth is going to decelerate you have to have organic growers, profit growers and cash flow growers in that scenario to make money on the stock. >> nadine and scott, thank you both for joining us. let's move on and talk about the fed. the minutes came out just over an hour ago. steve liesman has the latest for us >> thanks. the minutes of the fed's april/may meeting show the central bank ready to be patient with its policy of patience when it comes to figuring out what to do next about interest rates the minutes say members of the fed open market committee believe a patient approach is appropriate for some time. and it's the first time they've really put a time period around that patience language committee members believe the most likely outcome is continued economic expansion, strong labor markets and inflation coming back toward the 2% target. it's been running below that target questions are whether it will do that the answer in the minutes, not yet, but maybe soon. the down side risk to inflation have increased and several said they're worried if inflation doesn't head back up and come in quarters, they're worried average americans will start to doubt the fed really means it when it wants 2% inflation if inflation doesn't rise towards 2% in the coming quarters, the fed could be thinking about a rate cut perhaps around the end of the year, guys maybe would have to drop that transitory language that appeared two times in the minutes. we'll have much more on the fed minutes with sarah bloom raskin what she thinks the central bank's next move will be and who should fill the fed's vacant seats a number of protests taking place outside amazon's annual meeting where shareholders voted on one controversial issue we'll tell you what that is. 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. let's send it to mark santoli for the market dashboard. >> thank you very much for the next few hours, we'll look at a few different features of this market utilities and transport. we're also going to break down retail look at the new 52-week high list and the quality trade in the next hour. utilities and transport. a month to date chart of the etfs that track utilities and transport sectors. it shows this ongoing defensive cast of the market today the transports are one of the worst performing groups off more than 1.5% all day the market is feeding off those low yields it's booed b biding it's time t the economic picture can firm up because of trade or other things for now, hiding in the areas less attached to the cycle also seeing energy down with oil. so this remains a feature of this market right now. so far not a lot of damage at the overall index wide level but it does tell you something about what you can infer from what the market is rewarding and punishing during this period, guys >> pretty defensive. mike, see you in a bit which do you prefer? utilities or transport >> you probably are going to own both but i think what's interesting about that dichotomy is it really does -- if you want to play one or the other, it really does seem like it offers you a bet on, do you want to bet that bond yields stay low and stocks go nowhere or do you want to bet that we'll have 3.8, 4% gdp growth and it's going to take off >> buy the transports? >> utilities are the top performing of the s&p -- 11 s&p sectors over the last 12 months and that's been that way for now probably four or five months so utilities i don't think spiked over the last year because of an economic bet as much as seeing bond yields come down those stocks come back into favor. that dynamic, though, is kind of gripping people's attention. >> it's frustrating because they were a very small wait in the avera average. >> overall the top of the show you're saying there's a bit of room for a pullback but also the u.s. consumer is strong. where are you on the risk/reward? >> making the statement the u.s. consumer is strong, you could have made that same statement going into thanksgiving and within two weeks we were in a 21% draw down in the s&p both things can be true. when i talk to investors, i try to remind them the stock market can do whatever it wants and one doesn't have to invalidate the other so in this day and age, it's okay to expect a draw down just don't be shocked when it doesn't get to delivered to you in time. you have a nasty headline about trade and then the s&p can rip 20 handles in your face. doesn't have to be a rhyme or reason on a day-to-day basis >> amazon is holding its annual shareholder meeting in seattle our adeiti roy is there >> things are quiet after an eventful shareholder meeting among the most closely watched proposals were a company that involved the use of facial recognition technology both of those proposals were rejected one would prohibit the company from selling facial recognition technology to government agencies another would have led to an independent study of the program. we talked to shareholders about their thoughts >> we certainly support the folks who are pushing forward the two proposals on the recognition system it's a huge concern. i'm a company that has so much reach and so much data being able to surveil in that way. >> i need to know more about it but i'm not adamantly opposed or in favor that's one issue for me to explore. >> amazon for its part says facial recognition tools are powerful for governments, businesses and law enforcement back to you guys we've got just under 40 minutes left of trade. we're not too far from the highs of the session that still means red for the three major indices down just 0.1% for the s&p a little more for the nasdaq >> up next from "calof dy"l ut concerns to the fake meat frenzy, the biggest analyst calls on wall street welcome back to "closing bell." time to get the word on the street looking at companies getting wall street's attention today. stevens downgrading activision saying there's trouble in the call of duty pipeline. tesla stock trading sharply lower, 6%, as the bears keep piling on. citigroup cutting it to $191 but the analyst says the 40% chance the stock goes all the way down to 36 bucks this comes after morgan stanley caused a stir yesterday saying the worst case scenario for tesla is $10 per share we're just noting dropping hard today. 191. when was the last time we saw that price >> when somebody writes there's a 40% chance the stock can do down 70% -- does everyone laugh after they hit publish 40%? science. >> better than yesterday where we only saw a downgrade at worst case scenario but no adjustment to the bullish or base case. this is a downgrade across the board. >> this guy means business so my take -- my take on tesla is, i never had a strong opinion long or short. i understand both arguments. it's important to remember this stock now is down 20% since they were able to pull off the last equity raise, i should say capital raise. a lot of people looked at it that day when they raised money and said he pulled it off again. spoke too soon this time there seemed to be more concerns about the company's spending or concerns about, even if they raise money now, they'll have to do it again. when you see the stock drop, that other concern, which is elon is the largest shareholder and has had to borrow money across the street. cross collateralization. and i think that that's probably what spooks you when you see this, aside from the fact you've lost some money. now you have to think about margin call. think about things that have nothing to do with the fundamentals of the auto manufacturing. >> and big-name analysts now citi as well >> and the one silver lining is you already have 32% of the flow short. not that that would save the company but could save the stock from just being in this permanent down turn. before the bears get overconfident we've seen face-ripping rallies a third of the float already betting against it, slow your roll you've made a lot of money to the down side. i don't know that this goes to 10 or 47 or whatever these worst case scenarios are final word on the street call, beyond meat is up today. barclays, bullish on meat substitutes saying they have the potential to grab 10% of the $1.4 trillion meat market over the next decade. one of the analysts making that call is jeffrey bernstein from barclays he joins us now. thanks for joining us. so the meat market, you say $1.4 trillion how do you get to 10% of that? >> sure. that was the key part of the thesis right now it's sub-1% alternative meat out of that $1.4 trillion. what we did is looked at other categories that we thought were similar. whether it be plant-based dairy or craft beer or craft spirits, they've all moved from low single digit to 10% plus this is a similar disru disruptive-type category >> you see this as an alternative to meat, not an alternative to vegetables? >> right seems like thus far it's been consumers who either don't eat meat or consumers who say i'd rather have something that's perceived a little healthier and we're seeing a variety of our restaurants and a variety of retailers and package food companies all pursuing this category >> so my question is, why can't they pursue it on their own, or can they do they have to -- if you are a restaurant, do you have to sign on impossible or beyond meat why can't you produce your own plant-based burger >> i'm sure you could. i'm guessing some of the bigger players are considering it the biggest restaurant we have, mcdonald's, they are still closely watching and haven't committed to anything. but i think for others who aren't sure how big this is going to be, but they want a brand name to go along with it, and impossible and beyond have been very popular in the early days i guess that way if it doesn't work, you can always wind down the launch rather than having invested all that capital yourself >> so it's josh brown. sounds like you're making a total addressable market argument which is being borrowed from the tech world. how big can this thing get i guess my question is, is there enough brand value to sara's point, where you'll see this beyond meat on a menu somewhere, like you'd see niemann ranch pork or -- like do they have that cache and is that enough for them to hold off all the competitors that surely are going to smell money and not let beyond get, for example, 10% by themselves of $1.4 trillion consumption? >> sure. we're not necessarily saying beyond or impossible achieve that 10%, but the accumulation of all the alternative meats could reach that 10% you'll see a lot of package food players offer some of these products they're going to be pushing their products more significantly. the fact we've seen somebody like a burger king, you know, somebody like a tim horton's, they're pushing -- both those brands are owned by restaurant brands international and one of them partnered with each impossible and beyond launching those products you'll see a lot of brand recognition on television commercials and on menus across the u.s. in pretty short order >> for the traditional burger chains, is this a threat or an opportunity because it gets -- it gives them a chance to attract more nonmeat eaters? >> it's a great question nothing is a threat to the existing burger trends they have the distribution you can almost put anything into a cardboard box and market it. if it's the right moment, the right product. i don't think they look at this as a threat. we'll see what burger king does. i think they're partnered with impossible burger? even if your wildest dreams come true for the category, and even if bynd becomes one of the bigger names or maintains, this is still 59 times net sales. the multiple doesn't make sense. if the burger cured the common cold, it doesn't make sense. so i don't know that that changes no matter how much growth there is. i'd love to hear jeffrey's take. >> so we weren't involved in beyond specifically, and clearly in the restaurant sector we've had names that have come out of the gate with a whole lot of excitement you see where it ultimately settles in beyond has been getting a lot of orders from a lot of restaurants, as has impossible so there's clearly excitement there. again, it's very early stages. it's hard to know how they'll be valued i think some of the wall street firms will be initiating coverage at some point soon and we'll get to see more of the specifics. >> if you value this the way they value publicly traded meat producers, this is like a $5 stock. >> it's true tyson is trading at less than one times. >> jeffrey, thank you. i like veggie burgers. i don't know about the fake meat stuff. i think there's a big distinction there. >> just eating a veggie burger with -- >> or a regular burger one meal and salad the next meal. >> why not both? why do we have to choose >> exactly time for a cnbc news update with sue herera. >> hello, everyone attorney michael avenatti has been charged with ripping off stormy daniels the allegations were revealed in charges filed today in new york. federal prosecutors say avenatti took money daniels was supposed to get from a book deal. lawmakers grilling treasury secretarysteve mnuchin about president trump's tax returns. he repeated his position before the house financial services committee that he will not release those returns. responding that he is not in direct violation of the law. >> absolutely not. i've been advised i am not violating the law. i never would have done anything that violated the law, and quite the contrary i've been advised that had i turned them over, i would be violating the -- >> all right let me move on, sir. a man known as the american taliban is set to be released from federal prison tomorrow john walker lindh pleaded guilty to fighting for the taliban in 2001 he was arrested in afghanistan and was later sentenced to 20 years in prison. he has served more than 17 years of that sentence in an indiana jail you're up to date. this is the news update. back downtown to you >> sue, thank you. after the break, shorts are going out of fashion on wall street why the percentage of short positions are on the decline later, president trump speaking out following his meeting with democratic leaders on infrastructure. >> i'd be really good at that. that's what i do but you know what? you can't do it under these circumstances. >> coming up, we'll discuss the names that could be impacted by an infrastructure impasse. ♪ cfa charterholders have proven themselves by passing one of the most rigorous exams in the world. demand the best. demand a cfa charterholder. cfa institute. let's measure up. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. monitor their blood glucose every day. which means they have to stop. and stick their fingers. repeatedly. today, life-changing technology from abbott makes it possible to track glucose levels. without drawing a drop of blood, again and again. the most personal technology, is technology with the power to change your life. life. to the fullest. 25 minutes until the close back to mike santoli for market dashboard. this is on retail. >> also about the winners and losers and increasing separation between some of the big-scale winners and the rest of the industry look at these two retail etfs. they have a lot of the same stocks in them the rth compared to the xrt. you see clear separation outperformance by this rth why is that? the rth is weighted by market cap, amazon, home depot, walmart. together about 40% of this target is about a 4% weighting the xrt, it's essentially even bets spread across all chain retail as well as some online retail and it just shows you that it's, obviously, amazon but also the very big players have been able to withstand this hypercompetitive environment so to look at the xrt as we often do as a shorthand for how retail is doing is restrictive it's more specifically kind of old retail or retail in aggregate as opposed to where most of the market value bets are. >> what about staples versus discretionary. has that been trading in line with utilities versus transport discussion we had earlier? >> roughly speaking. not quite as stark but stables for sure have been outperforming. the thing about discretion aerks it's got amazon in there and it does have a little broader take on exactly what people spend money on though no longer media now that's in communications >> mike, thanks very much. turns out wall street could have fewer short positions this summer than in past years. let's get to leslie picker looking to explain that. >> shorting individual names is becoming less and less common these days only about 1.7% of the s&p 500 market cap is held short according to data by goldman sachs. that's the lowest level in 13 years since the precrisis era of 2006 so where have all the shorts gone in the bull market, investors are increasingly abandoning bearish bets this environment has put many short biased funds out of business for those managers who historically shorted individual names to hedge, many are turning increasingly to etfs to accomplish the same thing with arguably less risk now one area with plenty of interest in short interest, recent ipos. lyft has the highest with 70% of its float on loan to be shorted. beyond meat around 40% uber and zoom in the teens pinterest just 9% of its shares on loan to be shorted. the average these days or the total relative to the s&p 500 market cap is less than 2% a lot higher than that >> leslie, thank you up next, what josh brown says is the buzz on wall street today. >> and -- >> oh, boy >> all the pressure. >> and we've only got 22 minutes left of trade. we'll break down all the best last chance trades coming up on ""closing bell." i don't know what's going on. i've done all sorts of research, read earnings reports, 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. ♪ 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. welcome back to "closing bell." let's check in on the activity in the bond market rick santelli at the cme in chicago. yields lower today more of a pre-fed minutes move than post-fed minutes move >> mostly pre-fed minutes move the dynamic today, the nasdaq, the s&p and dow didn't spend one second in positive territory rates were spongy coming off one-week highs a two day of 2s. we moved down the curve to 10s and 30 pps they didn't as you see on the two-day chart dollar index talk about sideways. but sideways is near 24-month highs. and the pound versus the dollar. all questions with theresa may and brexit that's a one-month chart heck of a month going. they're at the lowest levels against the greenback since early in january sara, back to you. >> rick, thank you let's get to the buzz on wall street today. josh you say it's the fallout from the infrastructure meeting between president trump and democratic leaders here's what they had to say following that brief meeting earlier today. >> i want to do infrastructure i want to do it more than you want to do it. i would be really good at that that's what i do but you know what, you can't do it under these circumstances so get these phony investigations over with >> for some reason, maybe it was lack of confidence on his part that he really couldn't come -- match the greatness of the challenge that we have he just took a pass. >> we were interested. we are interested in doing infrastructure it's clear the president isn't >> everybody wants to do infrastructure, and yet they can't do infrastructure. why is this so buzzy for you >> it's just been like one of the worst weeks for news flow for the industrial sector. deere had an earnings blowup now this and you have one of the s&p sectors, the xli is the etf for the industrials. one of the sectors that did not make a new high in september is still below the high from, believe it or not, early 2018. so this has really been a long time, investors in the various subsectors and transportation is one of them. we've seen no forward momentum and earnings are not that bad. this is a news flow story. and then you have the idiosyncratic things like boeing and deere. when you look at the talks break down today, you say to yourself, we know the investigations aren't going to stop unless this is a bluff, there's no reason for anyone to be baking any kind of infrastructure benefit into any of their earnings expectations >> have they been doing that before anyway? it was one of the possible things that could have gotten done >> it was one of the things that allowed people to say the impact on tariffs might be offset if we embark on something. sore at least the expectations of us embarking on something so anyone that's left that had that expectation is now walking away from it and you see that not that it's a huge sell-off in the sector but you see that in individual names that were counting on something happening. nothing is happening, folks. 14 1/2 minutes left to go in today's session. we are lower by 72 points on the dow. we've got your last chance trade coming up next plus, a top trader at canter fitzgerald joins us. ♪ e*trade core portfolios is an easy, automated way to get invested. we'll save you time by building, monitoring and managing a portfolio for you and provide all hands-on deck support when you need it- helping you become top dog. ♪ it's snowtime baby. 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[ ding ] oh, my pizza rolls. welcome back to the "closing bell." we've got about 15 minutes left of trade a couple individual movers pure storage which sells flash storage to data centers. that's down some 24% below its ipo price of 17 bucks. both revenue and eps missed. toll brothers beat on the top and bottom line. got that last night on the "closing bell" for the high end home builder guidance in the tone of the call underwhelmed housing demand, increased incentives and profit margins. that's down 4% the s&p down 0.2%. 11 minutes left to trade >> 11 minutes and 30 seconds, wilfred until the close. what's your last chance trade? >> i just want to mention the slack s1 it will be public here on the new york stock exchange relatively soon now that they filed. >> your last chance trade is a trade you can't make yet >> cut me a little slack, unintended this has the makings of something like a salesforce where it kind of comes around. people kind of know what it is they're able to do a direct listing because they've already raised money and don't need the brand awareness that comes with doing a hot ipo. but, to me, this is one of the most exciting companies. i can't wait for it to list here i think i'll be a buyer of it on the deal and when you look at 600,000 organizations using 88,000 of which are paying, the big companies that are using it are paying even more that premium model actually working and revenues quadrupling. $100 million to $400 million in the last two years that's ridiculous growth gross profits are grown as well. not a company that's losing more as they make more like a lyft. that's my final, whatever we call this segment. >> last chance trade >> last chance read the ipo prospective. >> read the s1 this is a very interesting company. >> 0.7% of customers generate 40% of the revenue is that not -- >> opportunity to grow into other big customers like that? >> i don't because the payers are adding more users. they have a lot of employees and i think organizations that use it long enough and grow, they have to become enterprise so the model can work. and i like this idea, similar to spotify. direct listing raise $1.4 billion already don't need the money let's -- that attitude, i like that whole vibe. and stewart butbutterfield is t ceo. we're a user, if you can't tell. >> you send emojis to your colleagues all day >> no, this has cut my emails down i think in half. like i think i'm doing 50% less emailing because within the organization, there are no more cc, bcc, 80 email chains and so when you think about salesforce, people are like, what's the big deal? it's just customer management. what's the big deal now? this is one of those companies that has a transformational impact on the workplace. next one, read that s1 if you don't want to listen to josh l brands reporting after the bell >> one thing investors are watching is the full-year guidance the company, victoria's secret is well documented is it working? shares of l brand are down 36% on the year. investors are looking for a change even been calls for victoria's secret to split from the group we'll keep you up to date. >> we look forward to those numbers. we have just over vesen minutes left of trade. up next, we're trading the close and breaking down the action ♪ 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 left anything can happen in the final minutes. the dow down 80 points canter fitzgerald is here to close the trade. mike santoli with the market dashboard. bertha coombs at the nasdaq. seema mody on the floor of the nyse >> first let's trade the close with peter what's your take you were bearish last time any less so today? >> no, no less so today. i'm a bit surprised at the resilience of the market i believe the news on the trade war continues to evolve as we'd expect it to now that company specific actions are being taken by the trump administration. i would imagine that a similar tit-for-tat response will evolve from the chinese that hasn't really seemed to affect the market today. a bunch of pmi data coming out from japan and australia a lot more later this week that's been rolling over the global growth story is weak. earnings lackluster, flat at best and the tariff situation trade war between the u.s. and china continues to devolve yet markets seem to be fairly complacent relative to all those risks. >> peter, thanks for that. good to see you. let's send it over to mike santoli for his next market dashboard stocks >> often on a day when the overall market is down beat or to the sell side as today's was, it's good to look at the stocks making the 52-week highs or even all-time highs within the s&p 500, this tells you where investors' enthusiasm is what this market is willing to take a bet on here this is not really a new picture. american express, mastercard, paycheck, verisk annualytics. these very, very big platform type companies that are very resilient. they have high margins they're not exporting stuff. playing secular trends also add ihs market. another information systems company. this is something that's been going on for years happened in september when hitting new highs. it does tell you enduring growth companies, the secular growth stories remain in effect and now let's get up to bertha at the nasdaq. >> the macro here is basically continuing concerns about big tech and china qualcomm down today, obviously, on the ruling from the federal judge. apple is down as well. the chip sector down as well and we're watching netapp data ahead of earnings. net app talked about china being a negative factor in the last quarter. we'll see what they say in the current quarter. meantime, folks are going back, though, to some of the standbyes. the faang names are bucking the trend and why the nasdaq is resilient. and also back into health care the s&p up 1.5% this week. here on the nasdaq, biotech is doing that let's head back to wall street and seema. >> barring any major developments on trade and what many are calling an uneventful meeting minutes from the fed, stocks trading in a narrow range. the s&p 500 down at the lows currently lower by seven check out the interest rate sensitive sectors. they did trade higher on the day starting with utilities at session highs. financials, though, trading lower as the ten-year yield ticks lower. the worst performer on the day, energy, after a surprising build in inventory sent oil prices lower. the other big story has been infrastructure the longstanding question for the mark set whether a federal infrastructure program would get the green light. those comments today from president trump suggesting otherwise, newport down about 1.5% vulcan materials taking a hit as well the other sectors that traded lower was retail despite strong numbers from target that stock up 7% the others trading lower now time for the second hour of the "closing bell. [ closing bell ] a little dip there at the close. welcome, everyone, to "closing bell." i'm sara eisen >> i'm wilfred frost thanks for joining us, along with mike santoli. here's how we're finishing the day on wall street a little bit of a dip, down 0.3% on the s&p, the dow and nasdaq both down about 0.4% the russell underperforming those names down 0.9%. a defensive tilt utilities, staples, real estate off. energy a big decliner as oil slides >> consumer staples are trading near 52-week highs these are food companies, companies like smucker and hershey where you don't see a lot of growth and where you see people turn to if they see low growth economic environment, low are bond yields because a lot of them pay fat dividends and just a defensive place to be. always need your toothpaste, your food. those stocks are really starting to shine it's interesting given the fact that they're not the earnings winners in this market >> and the ten-year dipped again ending at 2.38 pointing out also qualcomm suffering, apple suffering, tesla suffering. some big tech companies there. >> back to talk about the market, josh brown, and fred lane from lane generational of raymond james and patrick schaeffer from jpmorgan private bank mike santoli, the defensive tilt that's kept this market afloat >> it has. basically feeding off very low bond yields and all the associated equity sectors that benefit from that. you can look at the market and say it seems a little stuck. stuck between stories. definitely still a little gun shy about trade headlines. >> josh brown used the word paralyzed. >> basically caught in between you could just as well describe the behavior of the market in the last several weeks as resilient as you can say it's a little sluggish and maybe even ominous because of that defensive tilt and that's basically the kind of rorschach test you have looking at what the market might do. from here it's still in this zone of staying above the sort of critical levels the up trend was over but not showing a lot of buying interest and not a lot of cyclical enthusiasm >> the bond market move. is that bearish or -- >> i would say it's in a range it's not as if the yields are making new lows but it is telling you that the premise that the fed is going to be patient was ratified today and maybe even more patient than they earlier wished to be because there's not a hike in sight by their likes and the bond market is saying it's a disinflationary type environment. a low growth environment we've been here before here in 2016 stock market held up okay. but it also got a little bit of a spark later that year that we're unlikely to get. >> trade seems to be the dominant them still. didn't get a ton of news on that front but if you watch some of the headlines around the world, it's not like there's any progress being made. what do investors do with that at this point? >> i think they're careful about the stock selection. i think it was interesting the -- mike's list of stocks that have performed well and hit all-time highs today yes, they are transaction processing powerhouses they're all about digital commerce and digital trade on the one hand. on the other hand, quite defensive. and so they are like a great place to go. and they keep hitting new highs and new highs and new highs. i think the consumer staples area, to me, reflects the fear index is actually pretty high right now. we've gone from having a high greed factor to having a high fear index factor over the last three or four months it's a carryover from what happened in the fall and then we have, on top of this, the trade. so i think you have to be selective. i've always been a u.s. secular growth and i think that continues to be the place to invest i see very few arguments for any place else name another region of the world and i have strong negative feelings as i frequently do. >> let's focus on china. the trade war making china rethink its economic ties with the u.s. the south china morning post saying while china is open to continue trade talks, the government advisers are highlighting the risk of sourcing critical supplies from an increasingly hostile u.s. and are exploring ways for the country to cut its exposure to the u.s. the rhetoric has been upped in recent weeks and josh, now is the question of, you don't want demand exposure to china. it's not just about the supply chain. is that best >> so that seems a little too easy because i think a lot of that negative expectation is starting to get priced into a lot of the affected companies and the affected sectors if you think about what could cause a market that's so despised or what could cause a sector that's so despised. you don't have to come up with that reason in advance the value investor would tell you, stick around. that's a good asset. we'll find a reason to rally and we saw that, brazil impeached its president. the stock market went up 75% no reason. nothing to get positive about in the headlines but that kind of thing happens all the time so with companies that are affected by trade directly, it's tough right now but if everyone expects that, might be good enough i also agree with your point, there are winners no matter what and we talk about retailers earlier, for example, they'll be under pressure and tariffs and what is that going to do with the supply chain someone tell lululemon it's a retailer tell them it's in a beaten down sector they don't care. someone tell foot locker you're a retailer. start acting like one. >> attracting the most traffic there are a lot of losers in retail >> what's working right now? staples, utilities if i need to be in a group that to working right this minute, fine do that. but then look at the investor daily business stocks. look that the companies making new highs, growing earnings, growing cash flow with insider buying in some cases you can do both. be defensive and try to be in defensive areas and then have these outlier winners. we talked about service companies. another area where you can find 52-week highs almost every day they don't care what's going on with china >> patrick, it reflects something that we've been talking about, which is the resilience of the market the mark set 3%, 3.5% off its highs at a time wilfred was going over some of the headlines in china i saw an op-ed about the u.s. eu.s.' jealousy and buying huawei phones over apple phones the u.s. market feels awfully resilient. y why is that? >> primarily because earnings and fundamentals are so strong we're seeing first quarter earnings came in better than the market anticipated coming into the first quarter, the market anticipated about negative 4% or 5% earnings growth we got earnings growth flat with about 5%, 6% revenue growth and continued strength in margins. i think they remain really good secular themes out there as fred and josh noted in areas such as 5g, software, data, security, et cetera it's also really important to pair that with defensive tilt whether that's in some of the consumer staple names you mentioned earlier or high dividend growth or high dividend growth stock late cycle, we get a higher percentage of returns in equity markets from dividends i'd have that in portfolios today. >> we've got some breaking news on president trump's financial records. eamon javers has it. >> this news coming from a courthouse in manhattan where a judge has just ruled in a lawsuit that deutsche bank and capital one may go ahead now and comply with a subpoena from congressional democrats to turn over financial records relating to president trump the trump organization and the trump family you remember that the trump family had sued in court to block that subpoena. they said this subpoena was simply overly broad. just a fishing expedition by members of congress. the judge disagree with that argument here as a separate judge already did earlier in the week in a related case involving the trump organization accounting firm. so now it would appear that both the accounting firm and the two financial entities will be giving these documents over to democrats on capitol hill. that's pending any appeal that might happen in this process but deutsche bank and capital one told by a judge they can turn those records over to democrats on capitol hill, guys. >> eamon, thank you. market cap of $15 billion. only a record lower close today. so pressure no doubt on their board. back to the markets very quickly. final thoughts fred, you've been looking at international credit market. what does that tell you? >> well, my big theme here is the central banks have been systematically debasing money for at least 10 or 12 years. and what we're seeing, one of the reasons that i think our interest rates stay low and will persist is relatively speaking, we're not in a quantitative easing mode but the -- much of the rest of the world is that would be, in my view, that's going to continue to drive support for equities because you really can't get long-term returns. look at what's happening in the public pension funds they're allocating more and more money to private equity. and less and less to hedge funds. private equity has become the new vehicle for generating superior returns over time to satisfy pension liability. because the debt markets don't do it anymore. and so that is leading to a lot of potential long tail risk. we know that private equity returns are going to decline they have been declining and yet, relative to most markets, they're superior. so i think it's -- it creates a lot of unintended consequences and i think we're increasingly letting the fed and central banks generally run our economies. and the ultimate free market should be the cost of money, and that's no longer a free market that creates a potential problem down the road. >> we are out of time with our megamarkets panel. thanks to josh brown, fred lane and pat rake schaeffer up next whether the antitrust rungli against qualcomm and l brands reports earnings any minute from now we'll break down those numbers ♪ you guys be good i'll see you later. [ barking ] it's snowtime baby. woo hoo! i'm doing super hero stuff. [ screaming ] snowball i'm back. be the first to discover the secrets. at the fandango early access showing may 25th. we've got an earn,s alert on netapp >> the data management company netapp posting a loss on the top and bottom line. estimates coming in at 126 but reporting 122 adjusted revenue coming in at $159 billion versus $164 billion the street had been expecting. a look at after-hours trading down almost 5% looking forward, guidance also weak one perhaps good news is that they are raising dividend 20 cents to 48 cents. back to you. >> shares of qualcomm having their worst day since january 20 202 2017 the company unlawfully hindered competition in the market. they'll seek an immediate stay and appeal guys, good afternoon to you both chris, you're positive on the stock. how big an impact is this to your price target? >> we took $15 off our price target this adds a bunch of risk and uncertainty in the name. so we thought that was appropriate. >> are you still positive, though, because you think their appeal will be successful or because either way, even with this ruling, they can continue and make plenty of profit? >> we've been talking to lawyers and patent experts all day this is a very, very complicated case and we haven't yet come to an absolute conclusion. i think there's a very large spectacles rum spectrum of outcomes qualcomm will continue with their business and they have an excellent position in 5g that's why we have such a positive rating of the stock >> what's the worst case scenario out of this >> there were a bunch of things that the judge ruled here. number one, there would be a monitor in all negotiations going forward here that really puts qualcomm in a difficult position and then ultimately, this opens the door for renegotiations with perhaps all handsetmakers out there. and if you look at this, if, in fact, loyalties have to be determined on a chip level instead of an end device or handset level, that's a meaningful delta >> is it too optimistic about how this plays out at a price target of $85? >> absolutely. >> why >> we started covering qualcomm in 1997, and we've been involved with every one of these battles since. every single -- just about every major customer or competitor of qualcomm has sued them over licensing agreements and it's been our opinion and the empirical data from the company that they won. and the reason is qualcomm's licensing agreement is unsustainable. the problem is that they are well over 100 licensees, most of which don't have the wherewithal to sue qualcomm over this licensing agreement. so when they lose these battles like nokia in 2006, like apple, like samsung and ti and a whole host of others they craft the settlements so they exclude just about everybody else when the chinese government forced a new licensing agreement on them in 2015, they couldn't get out of that one. so they crafted it so it excluded apple and 18 months later, apple sued them so, no, qualcomm's licensing arrangements, as they posted 1997 when they first started this, were never going to be sustained. you can see that in the results. their royalty rates have gone from 6% to just under 2% it's probably headed low are than that. and the devastation of this ruling is that it opens up a renegotiation to all those smaller companies that could not fight qualcomm because they couldn't afford it it's not going to be -- it's going to be ugly >> a week and a half ago, qualcomm's ceo got a $3.5 million bonus for settle with apple. so did a lot of the rank and file maybe that was premature ahead of this decision >> yeah, opportunistic premature. hard to know whether they saw this particular ruling coming that was going to mute the benefits of having the agreement. >> did they see it coming? >> they probably did not see it coming, truthfully and in terms of the apple settlement, one of the big debatable points right now is whether apple will be able to go back to the table after this ruling and renegotiate and it's unclear it's unclear at this point >> one thing, and this whole discussion, plus the bonuses tell you what kind of company -- what the investment proposition is with qualcomm it's trying to defend licenses on very old intellectual property they feel carries forward forever. it's not about as much the next generation what are they integrating. what's their next killer chip product? it's an interesting situation in that sense for an $85 billion -- >> such a roller coaster between the apple news and huawei news ed snider, you're like on the show every single day. >> sorry yeah -- >> it's great but also a reflection of what's going on there. go ahead >> qualcomm's license agreement has been glued together to try to get as much out of each company as possible. it's been broken apart in china. it will be broken apart here.nee this is probably the end game for the licensing agreement. it will probably gravitate towards something more reasonable but it's going to take a hit out of their earnings. >> ed snider and chris rollins, thanks one wall street firm advising clients to buy stock of quality companies. why that could be a bullish sign plus the new fight over infrastructure spending could have a big impact on wall street let's go back to mike santoli for the final dashboard of the day about the quality trade. >> yes, quality stocks we've been talking about the leadership of defensive stocks somewhat less cyclical quality is not quite the same thing but it's related essentially this is based on financial stability of a company. earnings consistency the strength of the balance sheet. s&p 500. the s&p has a quality rankings on their stock rankings system as they do for credit. so the higher ranked quality stocks actually right now, this is from bank of america merrill lynch are a larger portion of the s&p. this goes back to the 1980s. and the point here is the russell 3000 is basecally the entire investable universe of stocks in the united states. and the blue is the quality. how -- what percentage of them are basically of the highest quality. and that's been receding so the overall universe has fewer quality companies available. however, the s&p 500 has a high er it's close to 50% merit this quality -- the high quality ranking. and i think what the folks at merrill were saying is this explains part of the large cap preference for the market right now. at this point, the economic cycle, you'd prefer companies that are sturdier. it also shows you the kinds of companies increasingly in the s&p. more technology oriented havehigher margins don't have as much debt relative to their cash flow so it's interesting. it should reinforce if this is where we are in the cycle this idea that large cap should outperform small >> the low quality percentage of the russell, though, not falling off a cliff. >> no. this is all stocks so it's just been eroding in recent years and part of it is some unprofitable companies coming public and all the rest of that. >> mike, thanks, as always time for a cnbc news update. >> a democratic lawmaker blaming the trump administration's border policies for the deaths of migrant children, forcing the acting head of homeland security to lash out at the accusation. >> congress has been more than willing to provide the resources and work with you to address the security and humanitarian concerns but at this point with five kids that have died, 5,000 separated from their families, i feel like and the evidence is really clear that this is intentional. >> that's an appalling accusation and our men and women fight hard to protect people in our custody every single day we've asked for the resources three weeks ago. it hasn't been responded to by congress we've asked for changes in authorities for the last three years that would have prevented this from happening. treasury secretary mnuchin will postpone a plan to put harriet tubman on the $20 bill the treasury department announcing 2016 that tubman would replace andrew jackson the new $20 bill will not come out until 2028 you're up to date. that's the news update this hour, guys back downtown to you >> sue, thanks up next, former fed governor sarah raskin and goat ceo eddy lu tells owhe tariff fight will impact the sneaker industry. he runs a big sneaker resale shop through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. two big stories out of washington today investors are paying attention to president trump walking out of a meeting with nancy pelosi and senator chuck schumer. and also the treasury secretary steve mnuchin testifying on capitol hill this morning. eamon javers and ylon mui on top of these >> the president walking out of the meeting with democrats earlier today. the meeting was supposed to be about infrastructure but the president was incensed by nancy pelosi who said earlier in the day he was engaging in a cover-up in refusing to turn over documents that got the president's ire here's how he described the meeting in a hastily called rose garden session just after the meeting took place at the white house. >> i walked into the room, and i told senator schumer, speaker pelosi, i want to do infrastructure i want to do it more than you want to do it. i'd be really good at that that's what i do but you know what? you can't do it under these circumstances. so get these phony investigations over with >> the president said you can't legislate while you investigate. he said that in the rose garden. he also said it in a tweet giving the impression that he was walking away from all legislative efforts with democrats on capitol hill while they are engaging in the investigation. but a senior white house official texted me earlier today to say, no, in fact, the president is not walking away from all the negotiations. the government spending negotiations and the debt ce ceilicei ceiling negotiations are must-pass negotiations and will continue despite the president saying you can't investigate and legislate at the same time the president is walking away from the infrastructure negotiations right now and the drug pricing legislation something he discussed as something he's walking away from as well. so we'll see where allof this goes in the coming yourself. clearly a breakdown here at the white house today. guys >> eamon, thanks for that. we discussed this with josh brown earlier. to what degree was the market really expecting something significant? >> i think very little expectation baked into the market on infrastructure one of those things that really only applies from an investors' mind-set to a small subset of industrial stocks and construction stocks. i don't think it was a heavy bet but as a general matter, look, at some point we'll have to have a budget and a debt ceiling taken care those will be bigger issues and if the standoff continues, that could be a concern >> let's get more on treasure secretary mnuchin's comments on capitol hill ylon mui has that. >> he was testifying before the house financial services committee and told lawmakers he's been in direct contact with retailers about the impact tariffs on chinese goods have been having on their businesses, on consumers and on prices he said the administration has been weighing whether to remove certain products such as baby items from those lists of goods that could get hit >> i can tell you, i am monitoring the situation very carefully. i was on the phone with the cfo of walmart which is obviously one of the biggest sellers of the items that you've described specifically i understand from walmart what things they can source from other areas and what items they can't. we haven't made any decisions yet but we'll be especially sensitive to the consumer items. >> after the hearing was over, i tried to get mnuchin to say what other companies he has spoken with specifically. no dice on that one. but i did speak to a source in the retail industry who said the message from businesses has been clear. that they have not had time to prepare for the latest round of tariffs and so any price increases will be passed on to the consumer this person told me it's unavoidable. back over to you >> given all the talk about the consumer and talking to walmart executives, did you get the sense the administration is closer to going through with more tariffs on the remaining $300 billion worth of chinese imports? >> that's really hard to say, sara i think that the impression that i got out of this hearing was that they are aware there could be concerns with specific items. and so this idea that certain products could get removed is one that we may see come to fruition at the end of this process. when they put tariffs on the previous round of goods, they did remove certain products such as bicycle helmets, i believe, some baby products from that list because they were aware there could be a safety concern or a price sensitivity amongst consumers. we may see that negotiation take place now ahead of the final round of tariffs being decided >> ylon, thank you switching gears. a new name has been floated as a potential nomination to the federal reserve board. former trump economic adviser judy shelton she did appear on "squawk on the street" and gave her take on monetary policy. >> you don't want the central bank or federal reserve giving you an artificial interest rate. i have more faith in free market mechanisms, more organically determined rate. i think something fundamental has changed from the earlier days prior to the trump administration what we now have is a genuine pro-growth economic agenda and we're seeing results we're seeing productive growth we're seeing higher numbers in terms of the gdp number strikingly high growth we're seeing increases in wages. and yet inflation has not been an issue so the last thing you want to do is starve a high growth productive economic trend by not providing the financial resources. >> joining us now to discuss is sarah bloom raskin, former federal reserve governor you have been pretty vocal about some of these picks or potential picks for the federal reserve board. how do you feel about judy shelton and what she just said and some of her background >> so judy is obviously out there auditioning, which is -- seems to be the way prospective fed governors now go out and talk, which is a departure really from what used to be the case but that said, it will be for the president to decide whether or not she actually becomes a nominee and hen, of course, fo the senate to determine whether or not she is confirmed. judy shelton is somebody who has some unorthodox views. she's known as a gold bug, for example. i don't view any of that as disqualifying. i think that the real test is whether some of these can be what we are now seeing in the economy. i think judy shelton is correct that inflation has been persistently low and that needs to be looked at. and the extent to which she's interested actually in talking about how these concepts connect in to parts of our country where the economy has really been overlooked hasn't been doing as well as other parts. so looking forward to hear what she has to say about those things >> switching focus and talking about the minutes today, there wasn't much reaction from the market what was your interpretation, and what does it mean for rates? >> yeah, i agree there wasn't much market reaction and the market generally saw the minutes as a reiteration of a lot of the things chair powell highlighted in his press conference low inflation was seen as transitory and is expected to pick up a little bit later in the year but also i think the market probably didn't react to the minutes because they were seen as slightly stale. these minutes were really reflective of some of the good growth that we had just a short while ago but ahead of the increase in trade tensions which has been the market focus of late given they don't reflect how the fed is thinking about the increase in those tensions, i think there's less guidance for the market to go off of and think about how to set or price interest rates or risk in this type of environment. >> sarah, thanks to our produce ethey used the word patient eight times in the minutes what are they trying to signal to wall street about the next move it's very unclear? >> i agree it is unclear. and the use of the word patience, actually, the definition of what patience means, was something that the minutes show was debated extensively. but what patience essentially means is that we don't know yet whether the fomc is more inclined to raise rates or whether it's more inclined to drop rates or whether, in fact, this is going to be the rate so there were no signals leaning in either way. again, what you're seeing here is -- if we go back to what april was all about, the april fomc meeting had two big takeaways. one was chairman powell's statement that inflation was due to transitory factors. and then the other had to do with the interest on excess reserves you'll remember that that was dropped at the last fomc meeting. so what we're seeing in the minutes today is an elaboration, really, of those two ideas >> sarah bloom raskin and mark, thanks for joining us. an earnings alert on l brands >> some really good news for l brands the stock in after hours responding positively to it. 13.5% up in after hours. so a beat on the top line. eps at 14 cents versus the break even that had been expected. revenue also a beat. posting revenue of $2.63 billion versus $2.56 billion that had been expected. overall, comps were flat versus a negative 1.3% that had been expected but bath & body works the standout here posting comps up 13% versus the 5.2% that had been expected. again, l brands up 13.5% back to you. >> thanks. is this the case of low expectations in a low bar? we're looking at flattish comps. very negative for victoria's secret, flat for their main l brands >> no doubt about it the stack has been really just straight down for a long time. pricing in virtually no growth but the fact they can lift guidance for the full year is probably encouraging as well, which they did and interestingly, you know, victoria's secret struggled so much that bath & body works is now -- it's still only about one-third of the revenue, but it's big enough to start moving the top line >> up 13%. >> yeah. >> versus the expectation. >> why don't they just pull a gap and split up >> there's been a lot of talk of that it's one of the many things under consideration right here because right now bath & body works has -- and by the way, the legacy company of l brands, those founded by leslie wexner goes back to the limited they spun off abercrombie and fitch. all of those telescoped out. limited and all the rest of it out of an express and all the rest so they've been known to do this >> wonder if there's a short squeeze. >> they're in a tough position >> it's been down about 40% over the last few months. coming up, speaking of fashion, the footwear industry speaking out this week against trump's tariffs. we'll speak to the ceo of goat about the impact and why his company is looking to gain a foothold in china. thanks for the ride-along, captain! i've never been in one of these before, even though geico has been- ohhh. ooh ohh here we go, here we go. you got cut off there, what were you saying? oooo. oh no no. maybe that geico has been proudly serving the military for over 75 years? is that what you wanted to say? mhmmm. i have to say, you seemed a lot chattier on tv. geico. proudly serving the military for over 75 years. you ok back there, buddy? you mighyour joints...ng for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. brands like adidas -- can't believe i just said it your way. nike and under armour urging him to remove footwear from the tariffs saying it could be catastrophic for consumers >> what does it mean for the sneaker retail business. we're joined from the yes swit private innovative company if sneaker prices go up, does that mean sneaker retail prices will go up, too, if those tariff goes through >> i think tariffs aren't great for any consumer, but what i know about our consumers and the chinese consumer is that people want authentic products. while prices are going to raise for everyone, the thing about the chinese product is they want high quality and high fashion products so they'll still buy. china is going to be the largest market for luxury products in the world soon, and we're going to help feel that. >> bullish on china. do you see the american brands or european brands and the fact you're an american company giving you a tougher route to that growth in china than perhaps previously because of some nationalistic feeling in china? >> there's 400 million millennials in china that's bigger than the u.s. population alone and i don't know if you've seen the show rap of china but it's "american idol" meets "hip hop." it's a testament to how big the sneaker market is and how much appetite there is for sneakers in china so our numbers speak for itself where we focus for the past four years on trust and safety. and being best in class at authentication our numbers have grown over 450% in terms of sales. and it's going to just keep growing there. so i think there's just a lot of demand in china. not enough supply. we'll help bring supply to the market >> i guess i was wondering about the u.s. market and if those -- the next round of tariffs do go through, that do include footwear and sneakers, whether you're bracing for a hit to your business or preparing to raise prices on consumers and whether you've had that conversation even >> well, for us, it is -- i mean, with tariffs, it's a pass-through to consumers. so most consumers will feel it but for uwe've seen that the industry is expanding so much. when we started goat in 2015, the market was expected to be a billion dollars. two years later, $6 billion. now we're hearing $10 billion for the whole sneaker resale market they care more and more about fashion. i just think the appetite for fashion is going to go up regardless of if prices creep up a little bit >> what do you make of the ipo market, eddy a lot of high-profile companies have lifted with mixed results >> yeah, i mean, for us, we're excited to root for our start-up and tech companions as they grow and for me, i'm just a fan on the outside. and i'm pretty sure we aspire to get there one day. but i'm just rooting them on >> so who has the crown right now in the resale market who is on top? >> nike has really done a great job and has definitely resurged. a little above adidas. what we're seeing in terms of trends is the luxury market is going full steam limited editions nikes are at prices that's like the same as retail prices for luxury brouans and they're partnering with goetze -- goat. we announced our partnership with khloe we're really seeing luxury go up last time we were talking about virgil, cdg, ralph simmons all these designers have collaborations with the sneakers it's a really exciting to see luxury come up and challenge nike and adidas. >> eddy, thanks for joining us >> thanks, everyone. up next -- details about a nearly $2 billion deal in the cosmetics industry my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through. >> we've got a news alert on cosmetics company avon ralph has the details. >> shares of avon moving sharply higher right now at one point almost 15% and it's looking like 17%, almost 18% this after brazilian cosmetics maker nator is buying the all-stock deal and it values avon at $1.6 million and that's based on today's current price shareholders will own 76% of the combined revenue and expects revenue north of $10 billion avon closed up 7% on reports that the two parties were close to a deal bringing avon's rise on this deal to 160% guys, we'll send it back to you. >> my quick comment on the sale price of avon. >> on a short-term basis, it's a win. it salvages some value and it was the $700 million market value late last year, but it does show you the decline long term of this business. it was a $20 billion company so clearly, their sales methods were not in favor. >> all right latin america always is the strongest area. >> right >> beauty is big there >> coming up, your wall street look ahead, the key things that you need to watch wase head into a new trading day wi wilfred gets to be in a box. closing bell just ahead. i'm working to keep the fire going for another 150 years. ♪ for beauty that begins with nature. ♪ to make connections of a different kind. at adp we're designing a better way to work, so you can achieve what you're working for. kevin, meet yourkeviner. kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. welcome back let's get a check on the headlines making news after hours. l brands soaring after beating on the top and bottom lines thanks to strong same-store sales at bath and body works that's up 14%. the cloud data services company missed first quarter guidance and that's down 6% and avon products spiking after agreeing to be purchased by brazil's natura in an all-stock deal up 16%. >> time now for your wall street look ahead and wilfred has everything you need to look ahead on the elections and the boeing 737 max and phil lebeau is watching that for us and kate rogers has a preview of mcdonald's annual shareholder meeting. wilfred, though, especially the uk it could get crazy. >> absolutely right. they're kicking off tomorrow the pa parliamentary elections and the latest polls there suggest nigel farage's brexit party is likely to win with over 30% of the vote sterling has slipped in the last two week as his position in the polls have risen most of his party's gain coming at the expense of theresa may's conservatives who has dropped to single digits in one poll. worth noting that in 2014 the top body dropped 24% and in 2009, 29% and the turnout typically very low in european elections around 35, 36% in the last two elections could be a huge, huge swing factor and the implication of this, theresa may under huge pressure and leakly likely the netherlands with the success of anti-eu parties will also be very much in focus albeit the less immediate implications as in the uk. >> mark your reactions, too. >> let's get to phil lebeau ahead of the 737 max update. phil >> here's what's going to be happening tomorrow at the faa office in fort worth when executives from the faa will be bringing their counterparts from aviation agencies around the world. there will be regulators from 57 different agencies representing 33 countries who will be here at this meeting there will be an update on where things stand in terms of a recertification of the 737 max the goal of the faa, that this meeting, along with the discussions that they've been having on a regular basis with these regulators around the world will get everybody on the same page and that there will be a lifting of the grounding of the 737 max when it happens around the world as you take a look at shares of boeing, keep in mind that we heard from china southern, china eastern and a number of other airlines that they are formally asking boeing for compensation because they do not have 737 max to fly or their deliveries are being delayed. guys, you can bet almost every single airline that has either flown the max or flown the max and we'll be talking to boeing about compensation guys, back to you. >> thank you very much now to kate rogers for more on mcdonald's annual shareholder meeting and the meeting kicks off at 10:00 a.m. eastern in dallas and voters will vote on items like compensation and 11 directors. other things will be in focus and executives will likely have questions on plant-based meat and sexual harassment. mcdonald's and its franchisers were hit with 23 new complaints. also on the radar, strikes planned across the country during breakfast and lunch rush by the fiver 15 movement and corey booker and bernie sanders will join protesters at those, and we'll have them back over to you. >> okay, kate, thanks very much for that mike, the takeaway from today will be the absolute size of the decline is not too severe. >> pretty much contained still within the back and forth range that we've been in we're saying yes, the market has been resilient and 3% all-time highs and only 16% from br we were the highs are right about where we are right now so it was a recent new high. it was pretty marginal and didn't last very long, so i think you can play that a lot of different ways and we also had a near and a half of sideways nothing markets from, you know, 2015 to 2016 and it's not unusual to have these time outs and the question is what does it give way to. >> the question is what do you do if you're an investor and how do you know when the next move is going to be and how the trade headlines are going to go down >> you don't really know which way the move will be and you can maybe anchor yourself that we're not seeing signs of an imminent u.s. restriction and it usually means not a huge downside move in a devastating or lasting way and beyond that, the market just seems to be favoring different groups from this environment and not making overall, big, dramatic moves >> it's the one known catalyst without a doubt and i think you can get an economic lull or acceleration from the numbers that will be even without trade news >> thank you very much we're out of time. that does it for "closing bell qwest bell." fast money be gones right now. i'm melissa lee. your traders on the desk are tim seymour, brian kelly and jim grasso >> the tesla sinking 6% to a fresh, multi-year low and karen says there's more trouble under the hood and she'll give us the fine print mark yusko of morgan creek capital is back and he says stocks are in for a double-digit decline this year and he won't believe what he says to buy instead. we start off with the markets lower today as we are in the thick of retail earnings and there's been one key theme amid thes

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