Purchases. They remain over odds on that. Apple and nike are leading the dow higher joining us for the hour to talk about all of that stephanie link, a tiaa company relatively quiet day but that doesnt mean that theres nothing going on we had Economic Data and now this headline with u. S. And china still at odds. Here we go again. I thought the data today, the Economic Data was the driver pretty good. Initial claims, the trade data in general thats going to help Fourth Quarter gdp i thought this week ism services was pretty good. Were seeing okay. Overseas were seeing some pretty good data especially the pmis in china, europe, europe gdp today no worse than expected all of this seems to be setting up for better growth for 2020. We just need trade resolution one way or the other german factory orders and retail sales softer than expected i get the trend is less bad in general in the last month. Factory orders actually was revised last month higher. Lets see. Less bad, but i think theres room for optimism into 2020. Again, if we get some sort of closure or just some even if its detente on trade. Chinese getting message on fiscal stimulus which is relevant well drill down on not stories and more including on oil, the key stories, of course, surrounding energy today brian resusullivan is in vienna, mike santoli is tracking wall streets sentiment on peck brian. Reporter i wish i had a deal to bring you its 9 00 here p. M. And still no deal this is supposed to be a quick easy meeting to extend the 1. 2 barrel a day production cuts for several months theyve been fighting for a couple of hours arguing about how deep the cuts are going to be and how long they will be as we reported earlier, number one, continuation of the same situation. Thats very bearish for oil. If we get a continue jats of 1. 2 million but for all year thats neutral to slightly bearish and if we get a deeper cut maybe 1. 5 to 1. 7 barrels a day for all of next year that would be likely the only bullish scenario, guys, where oil could see a pop on that news and were waiting to hear from opec and whether or not well have some kind of a deal tomorrow russia comes in as of 9 00 p. M. , guys, no deal yet. The u. S. Oil industry is very much watching closely what happens behind us here because they would love to see slightly higher prices to get a little bit of extra cash to help them pay off their debts and Capital Expenditures thank you, brian. The markets energy and otherwise overweighting for more details aramco announced the final pricing for its ipo which ovals the company as high as 1. 7 trillion thats a huge number 1. 7 trillion yes with a t. Trillion while opec is debating their deal, saudi aramco announced their deal pricing behind the range, allowing the Worlds Largest oil producer to raise 25. 6 billion. That makes aramco the biggest ipo ever surpassing alibaba 25 billion listing in the u. S. As well as the Agricultural Bank of china, softbanks mobile unit last year. While this deal is poised to break records its drastically down sized from original estimates. Now aramco was met with muted demand outside of the middle east, floated just 1. 5 of the company in the deal. Road shows in the u. S. And europe were cancelled after investors balked over social governance and geopolitical and exposure to oil prices but orders from retail Institutional Investors especially those in saudi arabia were still over subscribed meaning there were multiples of times, more demands for amaam could stock. Shares will begin trading next week well discuss that again a little bit later lets get to mike for todays market dashboard that aramco deal is not coming into a market thats all that excited the equal waited version of the s p compared to the Energy Sector with all those Energy Stocks counted equally as well this is just 0 a one year basis. Its almost this sort of alligator jaws type action if you subsequent you can see energy trying to stabilize still not really doing a whole lot. That leaves a lot of people to say hey the sector must be very neglected and hated and Analysts Anticipate professionals investors must have abandoned it its hard to see that in the data if you look at the breakdown of analysts ratings towards Energy Stocks as a whiole win the sector, its the sector with the greatest percentage of buy ratedings. 66 . As i say the other ten sectors have a smaller percentage. It seems investors, analysts have seen the stock prices go down and have had no real reason to revise down if you look at the difference between average price target of Energy Stocks and current price you see thats also the largest gap. Essentially analysts are saying its the greatest upside for energy it doesnt suggest the sell side has capitulated. It is just expectation where crude is going not sure if we need to see that sentiment to wash out but it hasnt happened yet. Lets have a broader chat brian is still with us in vienna brian, i get that we havent had any firm confirmation of any deal at the moment but with crude sitting up over 6 for the week as a whole the market is certainly expecting that reporter the market is and thats why i said if we dont get those longer deeper cuts, then well see the bottom fallout of oil it will reverse that 6 . Have to be talking to traders the last couple of days, not my opinion, but thats what will happen oil, if you go back 30 years, and you adjust for inflation, the average price of a barrel of crude is about 47 to 50 bucks. This is pretty much where oil wants to live. People ask why are there so Many Oil Companies the that have so much debt . You know why these midlevel ones that are struggling were founded between 2007 and 2012 when the price of oil was 110, 120, 100 bucks a barrel they had to pay a lot for their land bore rod a lot to do it. Thats why these companies that mike and i and everybody else is talk about they struggled so much they launch when things were expensive their cost of land and production is about 55 bucks a barrel for southeast newer entrants they are not making any positive cash flow and to be honest with you investors are sick of it they lost about a decade of returns. They are not making any money in these companies. They are getting frustrated. Heres the big question, and ill ask you wall street. What are the odds that jpmorgan and other big banks will allow these companies to refinance their debt or extend the maturities not much they are sick and tired of not making money or losing money and if the banks close up all of a sudden the oil story is a giant debt and banking story ill pass it back to you with that i can give you a short answer the bottom line is a lot of refinancing has been going on because rates have been low and as long as oil prices arent collapsing the cash flow isnt too bad to meet it stephanie ill pivot to you. Where do you stand on the energy space at the moment . Great dividend yields particularly in europe they underperformed even more than the giants here most dont have the to invest in energy because its less than 5 weighted in the s p 500 im doing a little bit of a barbell, the quality chevron where their dividend is safe at 4 they are doing a fairly good job. So they will have a better growth rate versus exxon diamond back energy, emp play company. More beta. Its a Great Management Team so i do think these are quality names, i dont think necessarily have to go down spectrum and buy those high beta games. Going back to aramco, 40 typically would be bankers and Listing Companies would love the nuance here that they just a saudi listing with predominantly saudi clients buying it makes it a unique case you could argue hasnt fully listed yet and as the liquidity internationally picks up what the real price is. What aramco was going for when they decided to listing saudi arabia youre right in terms if you have an ipo with a limited diversification its a risk. However i think with this one, with the different dynamics with the saudi government and a lot of that money is coming from saudi retail investors, saudi billion injuri billionaires it will be interesting to watch thank you very much still to comeon close bell united Ceo Oscar Munoz is ready for departure. Well discuss the impact on shareholders with former continental shareholder next nearly three months since repo madness first hit wall street are regulators understanding what caused lending rates to spike. Well get an update. Heres a check on our data tracker. Weekly job less claims falling to a seven month low americas trade deficit narrowed 7. Imports fell coming in at 42 billion. Close bell will be right back. Stick with us. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. United airlines announcing today Ceo Oscar Munoz will step down in may after which current president scot kirby will take the reins. For more lets bring in former Continental Airlines ceo first whats your take on mr. Kirby taking over the job . Is he the right one for this absolutely. One of the best teams put together in the business they rival the delta team with the two best management teams in the business is this a big loss for American Airlines . At one point he understand he could have replaced mr. Parker as ceo after a while you make a bad chess move scott kirby is a star. Hes shown what he can do. Hes the turned the juice on oscar was a smart guy for snag him when he could. Gordon, will mr. Kirby be annoyed oscar munoz is sticking around as executive chairman its still sort of like checking in on your junior to make sure hes doing the right thing if hes getting the job why not give him the job in full i think its a compromise i know scott pretty well hes not hrchafing at the bit oscar has earned the respect both of those guys are mature and get it you nighted Airlines Stock has been relatively flat in the last three month, down 2 . What do you think is the lowest hanging fruit that mr. Kirby could sort of attack to add value to the shares . Well, hes been adding value as you see like even hubs like in houston are really strong, staff with professionals their on time performance, quality of their product, and quite frankly the amount of revenue they get has climbed under scotts stewardship. That will continue and continue to compete heavily with delta for being the top talent steph, do you want to get into the airlines . I dont i feel they are trading stock. They are cheap, right . This one is extremely cheap like at nine times forward estimate, only up 4 for the year. You think theres some real value. You can pick away. But you have to be very tactical if Oil Prices Continue to rise that will be a concern too many headwinds in this space. Gordon, what do you think is the single best thing munoz did over his tenure. The employees needed to back up with morale. He bought the precision and executing the plan and making sure the plan optimized the revenue. Hes a real pro. I cant think of anything he failed at. Probably didnt ask for enough money when he came what a perspective there of a fellow former chairman and ceo of an airline. Thank you. Always glad to help thats three months since the spike in overnight lending rates caused a case of repo madness on wall street. Reporter all of this excitement about whats going on in the repo parmarket what on earth is going on in repo markets as the new york fed now says they will have a repurchase operation in order to help maintain the federal funds rate when the inner plumbing seizes up is when you worry. You see this big spike. Up 10 10 for overnight secured money. There was a technical clog in the system wholesale funding market liquidities really something that did rear its head during the financial crisis we need to look at deeper question, why is this system suddenly turned out not to be resilient . I love it. Only here on cnbc will you get an epic montage on repo rates. Steve liesman joins us with an up date. Reporter we now know the Financial StabilityOversight Council is investigating this worrisome blowout in overnight rates in september that you just saw. Today treasury secretary Steve Mnuchkin said one area of inquiry is over possible regulation were working with Bank Regulators on what could have been regulatory that created the spike. In one of the most harrowing moments of the financial system, since the financial crisis overnight repo rates spiked to 7, some said 10 compared with a normal rate of 2 . At the time the fed thought banks had plenty of cash and remains a mystery why they didnt lend. One suspect whether government rules require banks to hold too much cash in reserve and if they loosen those regulations could they avoid another round of repo madness. If you had to blame one person more than the other would it be the treasury, the new york fed or it would be the fed itself reporter you know, i think the fed did a good fake effort to estimate the amount of reserves required into the system i think nobody has ever been here before with a big 4 trillion Balance Sheet they tried to winnow down if i blame anybody its the Federal Reserve system for not listening. The banks that were talking to the fed and saying we have a problem here and i think it took the fed a little bit of time to hear industry talking about that problem and i think they may have finally opened up their ears and minds to the problem here all those i agree with you. You could also forgive the fed for not thinking oh, were going take the profit making banks at their word on this at the first instance and maybe that could have been somewhere halfway in between. One of these days well have discussion in depth about this i put the blame on a survey that the fed does in which they relied upon to set policy and i think that survey was flawed the amount of reserves they thought the system was needed was incorrect and they found out it was plus or minus half a trillion dollars in the wrong way. When we have that discussion it will go into the next epic montage. Who sexes up repo like closing bell nobody nobody. Thank you, steve. Coming up, etsy is down. Well get the word on the street on that call Elizabeth Warren has a new plan to ban mega mergers well talk to a top m and a nk, jpmorgan about the flury of deals they are on top of. Whats coming in 2020 . And that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. We believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Welcome back to close bell time to get word on street Goldman Sachs adding nike to their conviction buy list. Firm please nike is on the cusp of acceleration and china is a cree driver of that growth meantime stifel is up on alphabet Morgan Stanley downgrading etsy the business model, and anticipates slowing growth Morgan Stanley notes the holiday calendar poses another risk for the Fourth Quarter because a lot of those items on etsy are handmade and take longer to ship out. Youre going to miss the delivery deadline. The nike and google ones are interesting. Pulling out a couple of numbers. Nike three year eps growth, 19 per annum. 21 next year. Google 15 , 25 next year. Which one is more reasonable ive owned nike for so many year just sold it last month because its trading at 31 times earnings near term and you might agree north america sales. Thats going to be the key for the stock. If they can grow more than 4 which this Analyst Thinks they will the stock will continue to work if they dont, i think it struggles here and they are going up against a very difficult comparison yearoveryear in north america growth that gives me pause. Fabulous company fit pulls backthats one i would think about. I own underarmour and thats down quite a bit i also own google. Thats focusing on the yearoveryear north american sales. This focuses on eps growth which they say is delivered by cline and by direct to consumer. Margin could improve 25 if they can do it this is a longer term thought, note, if you will versus the near term. I think if the near term misses you get the opportunity in a buy into what shes saying then i think it certainly could be an opportunity if you get it. Nike is up a couple of percent. Weve got 33 minutes left of trade at the moment. We have 36 point on the dow. Here are the key things driving the action u. S. Trade deficit dropped as i mentioned earlier a new report that the u. S. And china remain at odds on the size of farm purchases nike and apple leading the dow after a pair of bullish analyst notes. Time now for cnbc news update with sue herera. Heres whats happening. House minority leader Kevin Mccarthy says House Speaker nancy pelosi is more concerned about tearing the president down than building the country up this after she announced the house would draft articles of impeachment against the president. Today w