Transcripts For CNBC Closing Bell 20170530 : comparemela.com

fueled a huge rally in financials much earlier, but sector's been underperforming since being in office. do you doubt the banks going forward? it's been a rough week for oil prices, and goldman cults the outlook for crude. where do go from here and which names you buy and sell in the energy space. closing bell exchange on a tuesday, shall we? joining us here to kick it off, greg from hightower, managing director there, keith from post nine, and rick santelli at the cme for us as well. i want to start with choppy action in the markets today after significant close to the s&p 500. is it -- are we just digesting that move? >> well, we are digesting that move, and, frankly, i don't see anything that's a real catalyst to break the market out to the upside or really bring it down in any kind of correction mode at this point in time where what we've been seeing the last several sessions is the market flat lined, moved sideways, and the russell has been between 1370-80 since february, since the middle of member. that's troubling in that we know what that the technical indicators, fundamental aspects of the market that we get, macro data, strength in europe, monetary policy progressing along. there's a cross current of information coming in from allowing the market from moving one way or the other. what's more troubling inside the market about being able to break out is the fact that most of the move in the major indexes this year is really incured from facebook, amazon, apple, alphabet, and microsoft. when you consider that, we need to keep the rally to keep moving, and if not, we have a temperamental market and subject to wild moves if the five stocks are hit. >> all right. before we go to greg and rick, we want to talk about the five stocks, amazon, bertha is watching that up at the nasdaq. crossed the $1,000 mark earlier. >> it did, mike. topping $1,000 this morning. less than two months after just passing $900 a share. it's really just one more of that faang movement we are seeing, and there's another number too, alphabet within $3 for an all-time high. microsoft, though, not seeing the high this afternoon. it's all about big cap tech. nvidia, a soft bank could raise the stake in the stock along with the new research and other big names pushing the semiconductor index to a 17 hea17-year high, and it's making this the best gainer in the market. active fund managers have been riding the gains to outperformances later, and they find that active fund managers are now 24% overweight in large megacap tech. that's the most they've been since 2008. as far as the nasdaq this month, the big three contributors have really been apple, amazon, and nvidia, and the nasdaq 100 today, guys, at a fresh record high, a seven-month winning streak, longest in 18 years. kelly? >> thank you. let's get back to the panel. greg, you know, i was going to ask you about cash reform, but responding to the idea that tech is the love, the darling, the leader of this market, and whether people should, you know, need that to continue. >> it's a great question, kelly, and i think investors need to be proactive here because such dominance in one sector probably is not a healthy trend. i think stocks like amazon, alphabet, all the tech names represent tremendous dipping stocks right now, whether it's deductions on fair market value, use the cash you give away to diversify somewhere else or loved ones you support, embedded stocks to them, lower tax bracket, they likely have a much less capital gains tax liability. >> greg, i wonder in terms where you look to rediversify. the tech is stealing the attention and certainly has the greatest gains, i think five of the 11 s&p sectors outperform this year. just been a split market, so i wonder if you are looking for the laggards, and if so, which ones? >> i say where we'd be looking a really abroad. you know, look at what the international market has done this year, outpacing the s&p 500. emerging markets trade valuations, still below the 25 year level, and those entities did little over the last five years. we believe that's outperforming with the international stocks, really in the early stages. >> all right. speaking of overseas, rick, some conflicting signs from the ecb, i guess, over the last couple days. over the weekend, you had mario draghi talking about the need to ease to support europe's recovery, but there was a story earlier there needs to be tightening maybe next week, so it's pushing the currency around, hasn't it? >> well, yes, and i think that mario draghi stretched the definition of what would be considered a good economy, you know. the fact that he needs so much stimulus and calls it a recovery, most of the analysts on cnbc are recommending europe as the dominant investment choice for 2017. of course, as a matter of fact, you hit on something that i think is very important. i think one thing that actually can damage the equity market is the perception by the markets that weakness globally, and i think that's, of course, coming in the form of lower rates. well, look up at the board, 221.10. it's not that much different than friday's close, four basis points, but an important four basis points. this is in the 18th of april, we had 217 close, this was the low of the year. the bunds closed 29, the lowest close since the 21st of april. we have these april comps contrasting with all the sideways to upward activity, specifically nasdaq and upside of equities. i continue to think there's an intersection that's going to be in front of the market at some point, age i think we continue to watch interest rates, which, by the way, were not the first to go in this direction. the dollar index really led the way. >> for sure, rick, and, actually, just to follow on that, in terms of the u.s. data today, pretty much personal income and spending ads expected, but, again, that inflation measure, the pce, not able to sustain anything like it, 2% number, so maybe the bond market's looking at that? >> well, could be looking at that, you're right. could be spending reaching four tenths, not bad numbers, and look at the personal consumption expenditu expenditure, 1.5% area, that's right. what's not right is the fact that the fed is so sour on 2%. that's an arbitrary number. to me, when the history is written, the global central banks are doing a boat load of financial damage to reach a level of inflation that's arbitrary relative to growth. >> and, keith, anything you'd add to that in terms of, you know, investors watch for clues about fed policy and ecb policy? >> rick makes an excellent point as he does with rates and bonds. look at the ten-year yield, market signals we don't believe the growth story everybody's trying to espouse out there, the ecb, the european, and getting here in the home country, relating to the equity market, that's going to -- at the very best, make this market continue to go sideways and at the worst could make it hinge on data points that are coming out after the fed makes an announcement on 214, likely another 25 basis points, where the rubber meets the road, and the economy has to perform. the market is unsure it will actually do that. >> quickly, too, greg, i wanted to ask briefly about tax reform that the president pushed again for this morning. is that going to be the gotten goose for the market? >> it could or couldn't be, kelly, because that's been such a supportive element of this market gain over the last six months, and if we don't get it this year, that could be a real void of confidence to the market, and, also, investors have to look carefully at the last it ration of tax reform as the personal level. move to income taxes in deduction is significant because that takes stimulus out of the economy because there's not a significant benefit to high income wage earners when the rates are reduced, but you remove the significant tax deduction. it's almost a neutral in terms of this perspective. >> all right. everybody, thank you for joining us to kick it off this hour, greg, keith, and rick. 50 minutes to go, dow down 30 points, transports are positive. look at the russell, though, down eight points, laggard on the session. >> has been for a while, absolutely. >> antigovernment protests in venezuela turn ugly, goldman sachs is under fire for buying stocks at a huge discounts and whether they are putting profit before ethics next. uncertainty about the president's trade policy is not helping u.s. businesses. the merits of the hot button argument coming up. you're watching cnbc, first in business word wide. look at shares, telecom leading the way, at&t and verizon higher, 2% in that case, upgraded from neutral to sell. the firm says everyone one of at&t's major business segments is contracting and continues to prefer them over verizon and other metrics. it cut verizon's price target to $50 today from $56. trading there about 46. goldman saks is down more than 2% today after the new investment in venezuela bonds bought out critics in force. 2.8 billion dollars in bonds, and the economy's economy continues to unravel with demonstrations in the capital dai daily demanding the ousting of the president. why is investing in venezuela, and more important, should it be? >> to answer the questions, our senior fellow at demos, author of several books, and steve, senior fellow at cato and former adviser to a former venezuelan president. thank you for being here. if you can start us here, look, somebody's going to own the bonds. they've been issued, out there in the market, and why is it a problem if goldman sachs came in to pay the market price for them? >> well, it's arguable they did not pay the market price, that they negotiated better prices or bought on the secondary market. the reason it's a problem is because they have the responsibility as the institution it is to also move politics, move dthe conversatio, stack the way in which the economics are reported as well as to get a very good deal in situation, which venezuelan people are -- are getting killed, are starving, and there's been tremendous social and civil and political unrest. it is an on tunis tick bet. can they do it? yes. should they be doing it at this particular time? no. >> steve, this is an investment they are not alope in making, but they make better headlines. there's fidelity, blackrock, pimco, and are you telling -- is the message that no u.s. investor should own any of this debt? >> well, i think any investor should be free to invest in whatever they want to invest in, and they should face the consequences both financial and in terms of their reputation capital that are associated with those trades. that's it. and in this case, goldman is suffering. they did not manage their reputation risk in a prudent way. they did not think it through. it was the stupid trade from that point of view. >> yeah. one second, let's get the facts about this out there according to the story. the government was under duress to raise cash because reserves were dwindling, so whoever the investors are were able to pick up the bonds fcents on the dollar, and some improves, and what they are going for, and so that's been played in a number of political outcomes from a change of regimes, so it's not ruling out. why is it taking the time they are supporting this little regime? >> well, it's not exactly clear the details of the transaction. i mean, they did not actually buy these bonds from the central bank per se and fork over the cash directly to the venezuelan government. they bought the bonds on the secondary market, and, by the way, they did get a good deal. they paid 31 cents on the dollar, and moody's did a study in 2010 of all of sovereigns that had defaulted between 1994 and 2010, and they averaged a rate of 31 cents on the dollar for defaulted bonds, so in a sense they bought these bonds that the average default rate already. they bought them, really it was a fire sale. it's as if the bonds had already been defaulted on when they bought them. so -- >> what would be preferable about the potential outcomes if goldman sachs and other institutions essentially said, no, we're not willing to put up our capital to buy these bonds? do you think it would hasten the demise of the regime there or somehow reprioritize their spending and not service the debt and maybe essentially feed the people of venezuela? >> i think it's -- >> i'm sorry -- >> yeah. >> i think, first of all, it's not entirely correct to say that they are supporting the regime in particular. they are supporting the bet that whatever happens, and i believe they are supporting the bet that the regime falls apart, which is no what they were not necessarily talking about that story, but if something occurs, the regime currently attacking goldman sachs is the current regime, but the regime that w t wants to come in, so the other side, the opposition party the one is attacking, i believe this bet is about the opposition party actually coming in. it's not similar to bets goldman made in brazil when the regime came out last year, and the new regime came in, that did not necessarily help the people of brazil anymore than the prior regime there. the bet is simply that, things will change. if they change because of political regime change, which i believe is what gold man ismanning on, if you leek at the photos and where oil prices are, it is not improving today, but there could be a bump in the value of the bonds if there is a more funtmental opposition coming in, which, i believe is what they are betting on. that's where it becomes more of a cynical and more of a -- you know, more of a wrong form of bet right now because they are effectively pushing geopolitics at the expense of people, not just providing cash into the set of central banks right now, is at an all-time low. >> steve, your thoughts? >> well, i think whether they bought them or didn't buy them is essentially irrelevant. they are on the secondary market. somebody's going to own them, and whether goldman owns them or anyone else, doesn't make any difference. i just don't buy the massive geopolitical story. in fact, it looks like they've -- goldman, that is, is so annoyed, the opposition, that the opposition claims now that they are going to default on these bonds if the opposition gets in power, but now, that, again, is the stupid thing on the part of the opposition. it shows how incompetent they are, and they don't understand how the world works and how financial markets work. you just don't decide arbitrarily you default on one bond. it sets off a cascade of problems for venezuela and any new government that would becoming into power, so there's a lot of noise around this more than anything else. >> all right. guys, thank you. goldman shares down 2% today. appreciate it. >> thank you. about 40 minutes before the bell. dow and s&p still holding to the relati relatively small gains, another day, narrow day trading to the s&p 500, down less of one tenth of 1%. nasdaq down the same now. >> russells -- >> small caps sitting out. >> they are. by the way, it's not just goldman lower today. the rest of the financial sector is down with it. you can see some of the most held names this. stick around for the bull-bear debate on whether investors should buy the dips in this once red hot industry coming up. tech glitches confront a major restaurant chain and international airline. what you need to know about that coming up. cnbc sector sort is sponsored by -- hey gary, what are you doing? 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(cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley going into the last half hour of trading, slight losses on the major indexes, and big cap index is slightly green, but you see indexes sitting on a small decline. >> checking out the market movers today. lower, pacific press downgrading the chip makers, sector weight from overweight to underweight and the largest company, cji, may use a reeve's video proce process processor. shares down 7%. goldman sachs downgraded from neutral, and goldman says hess has less attractive profile now compared to ease, shares down less than 3%. >> 35 minutes before the bell, you see the dow and the s&p -- dow down 40 points, still, telecom is up, and banks and energy down. >> feels to me the most defensive -- >> three stocks, first of all, and we got upgrades on two of the biggest. >> true. >> i think that's what see there. >> true. >> considering eliminating the telecom sector. >> you said that. >> it's a narrow one, but coming up, sigh of relief or pain in the neck? the latest on the u.s. government decision about whether laptoping should be banned from cabins on flights between the u.s. and europe. a a former ceo calls uncertainty resulting from the president's trade policyings and whether u.s. companies are left in limbo. stay with us. say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. i count on my dell small for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪ ♪ welcome to holiday inn! ♪ ♪ whether for big meetings or little getaways, there are always smiles ahead at holiday inn. we, the device loving people want more than just unlimited data. we want unlimited entertainment. so we can stream unlimited action. watch unlimited robots. watch unlimited romance. if you are into that. but we also want more like... unlimited hbo. can i stop dying now mark? no can't do mi amigo. it's unlimited. besides you are really good at it james. don't settle for any unlimited data plan. only the at&t unlimited plus plan comes with hbo included at no extra charge. 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[ sniffing ] [ seagulls squawking ] welcome back. here's another mover for you today, perrigo down 3% after rbc capital said it's highly exposed to new approvals and downward pricing pressures. they are saying it could result from the new fda's commissioner to crackdown on high drug prices. they have a sector perform rating on the stock, down 3%, mike. >> kelly, thank you very much. half hour to go in trading day, steve grasso, and broker, you know, in your notes, steve, you said something about institutional climates all day, nobody can come up with an idea whether markets should be down significantly. that's why we sit here? >> i think it is. you've been in the business as long as i have been in the business, and reporting on it, and it's usually the story that no one can think of that sends the market off the cliff, but we know the last couple weeks when you heard president trump negative headlines, russia, impeachment, that seems to be the only thing that the market didn't shrug off for 24 hours. but then if you think about it, he left the country. >> sure. >> so i think it got off the headlines, off the front page, lets people start to analyze and see what impeachment really means, and maybe cool our heads and prevail. it seems to me that we have eight years of a certain market. people still catching up. maybe just the lack of new regulation is enough to give corporations a little more vb visibility how to invest. the s&p is no man's land here. how do you trade off the technicals when never been here before? >> exactly. seems money is not looking for urgent reasons to leave the market, but just sliding around the sectors rorotating. there's other pockets working to it, hotel stocks, utilitieutili cetera. >> sure. >> look at the ewe till tilutiu. >> it's hyperactive on m&a. >> sure. >> a caveat looking in the space of the reit not so great, but facilities could pass on higher rates to the people who use their products. i don't know that the rotation is in financials and energy. it's going to happen any time soon. >> yeah. >> i think you're better off playing winners, trialing as they go off, that's the responsible tiehing to do. >> appreciate it. >> thank you, guys, time for a news update with sue. sue? >> hi, kelly, hi issue everybody. this is what's happening at this hour. senator sanders delivering the commencement speech at brooklyn college urging students to fight back if they don't like the state of current events. >> you do not have the moral right to turn your back on saving this planet and saving future generations. stand up and fight back, reclaim american democracy, and create a government that works for all of us, not just the 1%. >> chipotle providing information about a security card breach there in april. malware stole payment data from restaurants over a three-week period. they still don't know how many cards or customers were affected. trout, american league mvp is out of action for six to eight weeks recovering from surgery to repair his left thumb. you see him there, tearing a ligament sunday night in miami sliding into second base. 'have the surgery tomorrow. we wish him the best of luck. >> that's the news update this hour. back to you. >> i had a hand injury of my own last night. i thought of you. >> uh-oh. >> cut myself cooking with garlic. >> oh, ouch. are you okay? >> yours was bad, though, right? >> you're okay? >> it stopped after awhile. >> don't opt for surgery and take six weeks off. >> i know, exactly. feel better, kelly. >> like i said, this is nothing compared to you as well. that looks bad. >> yeah. yeah. i mean, now the mvp race is more wide open. >> three times in the last couple years. >> crazy. see you sue, in an hour. conference in portugal yesterday, a former ceo voiced concern about u.s. companies confusion over trade policies." right now in america we don't know what the rules of the game are. they are changing constantly." how can companies navigate the landscape? guys, welcome to you both. michael, first, listen, companies have to deal with uncertainty. do you think because trump's policies are different from president obama that all the sudden companies feel less thought about what the rules of the game are, and as he put it, who are our friends, allies, who are we doing business with? >> sure. the big problem is in balances, trade and balances right now. trump is looking to correct them, but they have not been any rule changes now to create uncertainty, and companies like hasbro, have offshore virtually all employment to other countries like china, are not companies we should be listening to to rebuild american production and good paying jobs in the u.s. >> wait, so your point is because hasbro's -- don't take what he says to heart? >> right. the trade policies passed under obama, clinton, and bush put the thumb on the scale towards the imimportanters, and those that offshore, so we got results in the massive trade deficit. we have to reverse policies. they have not been changed yet, but we have to be listening to companies that want to build more production in the u.s., and to employ american workers so we can produce more of what we consume. that's how we rebalance and grow america. >> daniel, i guess, even it was that something a given ceo was interested in doing, we are waiting on potential changes, not just on trade agreements, but on rules for capital invesmeninves me investments, and is that the open issues that has companies wondering what to do next? >> the hasbro executive is correct. the trade policies of the trump administration hang like a dark cloud over the u.s. economy and u.s. businesses. this administration has threatened to rip up trade agreements, walk away from the trade organization. these are rules the united states designed to protect u.s. companies as exporters and investors. if we get involved in trade wars with our main trading partners, u.s. companies are going to lose as exporters because other companies are going to retaliate if we retaliate from the lose and lose as producers. you know, more than half of what we import to the united states are not consumer goods. they are stuff imported by u.s. businesses, raw materials, intermediate components, capital machinery, embedded in global supply chains. this disrupts train, u.s. companies will be less deducted, more difficult to raise our productivity, and meet the president's goals of increases our overall economic growth. >> so, daniel, is the way -- daniel put it, michael, as though he's saying, you know, u.s. companies are upset that trump is, you know, that the policy team is designed to be against globalization, but that sounds like something you actually would support, is that right? this idea -- >> yeah -- >> that you want to put u.s. companies and u.s. workers first, and if that's the case, does that just need to be made more clear so that businesses can adjust? because it sounds like they are sort of lost here trying to figure out exactly what to prioritize. >> sure. i don't think -- none of my members are lost. we have -- the issue is the global imbalances. we have a persistence surplus companies with undervalued currencies as well as they have a strategic agenda that they overproduce, underconsume and rely on the u.s. consumer to grow. that's china, japan, south korea, germany, taiwan, and a few others. so the imbalance and the -- we overconsume and under produce, as a result, they under consume, and the balance is the issue, and trade balance has been a long standing banker in the international rules, the treaty and european union, we lost sight of that, and to pivot back to the initial balance, it's not a trade or no trade issue. that's a canard. it's not a global supply chains issue. it's a matter of making it more than just producing more in america, whether it's components, consumer goods, or something else. that's what the new trump administration's looking to do. >> so -- >> my members are happy about it. >> so, daniel, finally, if that's the case, then, you know, is that the whole story for u.s. businesses, who have been used to maybe a more globalized world, but if this is the desire out of washington, should they accommodate that? >> well, if we're worried about the trade deficit, the problem is right here at home. we don't save enough as a society, starting with the federal government, which this administration wants to increase deficit spenting, which is actually going to contribute to the trade deficit, but i think we should look at the flip side of the trade deficit, a capital inflow. the president criticized jem ed germany. germany's a huge investor in the united states, 700,000 americans work for german-owned affiliates in the united states like bmw, m mercedes, volkswagen, the bmw plant in south carolina is the number one automotive exporter in the united states. if we somehow could reduce the u.s. trade deficit, that means fewer funds flowing into the united states to invest in u.s. companies, which creates some of the best paying jobs here in the united states. >> okay. >> yeah, that would be a good thing -- >> two sides to every point. we have to go, but that sums up the tension that companies are feeling, the tug-of-war, if you would. thank you for joining us. >> thank you. >> thank you. >> thanks for the time. 20 minutes left before the bell. you see the dow still down about 40 points. goldman sachs heavy weight on the dow, s&p 500 under the flat line, down less tan two points. >> airline troubles are not limited to the usa. british airway with the mother of all computer glitches over the holiday weekend. what it means for your flight, bags, and airline stocks. count l business advisor for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪ ♪ i count on my dell small for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪ ♪ to ban or not to ban is the question surrounding laptops in air travel today amidst conflicting reports, phil lebeau has more. sort out cop fusion for us. >> right. there's a report from washington that the department of homeland security had decided that it will not be implementing a ban on laptop computers on flights over to europe or international flight overall. well, a short time later when we reached out to the department of homeland security, a producer did in washington, they said, oh, no, no, no, no, that's not the story. the story is that we have not decided to implement it for now. it is still very much an option. they are still discussing it. especially as they get back the latest intelligence from various agencies around the world. the bottom line is this, guys, you heard the commentary from the secretary of homeland security yesterday on the sunday morning talk shows. they are seeing an increased threat to commercial aviation worldwide. it's a matter of how do they respond to it. i would not be surprised if we see some type of laptop ban at some point in the future. when remains to be seen. >> another blow to british airways, i would imagine, phil. by the way, a disruption saturday morning, saying it was a power failure, but feels as they struggle to clean it up, there's conspiracy theories on what happened in the first place. >> don't listen to the theories. this is what's going on in the airline industry. >> what happened according to you, phil? >> a lot more fun to listen to those, i know, i know, but the bottom line is this, whenever the airlines encounter an i.t. issue, when it happens in -- most other companies, they can say, okay, what's going on here. if there's part of the business that goes down, a lot of the public doesn't realize it. they don't have that luxury in the airline industry. they immediately default to the safest option which is we're not taking off with a potential problem that could lead to being that our system was hacked, or that other issues that could contribute to an unsafe situation, so they kind of back down as quickly as possible, and in this case, it was a series of power sunrges hitting a series f systems for british airways. people say that's suspicious. shortly after the terrorist attack in manchester, how do we know they were not hacked? to our knowledge, based on reporting coming out of europe and also when you talk to people in the airline industry, there's no indication that they had been hacked. having said that, guys, i understand the frustration of travelers. i've been involved in some of these where you're about to take off, and, boom, they said the network is down. it's one of the problems that the airline industry is going to have to overcome. >> yeah. >> i mean, it seems obvious, phil, the infrastructure across the board, technical, aircraft, everything, is just being used almost to the limit. >> also, others are doing fine. >> michael leary today on "squawk box" talking about how they are continuing to grow and that they believe they are making the right investment. the one thing i caution by everybody in the industry, you rarely hear somebody twirling about another airline having the problems because it's one of those, okay, maybe i'm going to be next. i seriously believe that most of the airline industry looks around and say, we think we have our systems in place that we're ready to handle a bad situation, but then something comes up. >> i can understand. phil, thank you very much. >> you bet. >> clearing things up for us. phil lebeau. less than 15 minutes to go here, dow looking at a decline of 38 points. s&p down a point and a half, but still trading at 2814, and nasdaq down three, russell's down nine. >> bank stocks shot up, and possible dismantling of dodd-frank, but is it now time for investors to reconsider that? 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large cap financial fund and howard mason, guys, thank you for being here. howard, start with you. you know, there was a multitude of reasons that people decide they like the banks six to eight months ago whether it was interest rates set to rise, deregulation, potentially they were cheap and under owned group to return more capital. how many are still in tact, have they geone away? what's the sector assessing the stocks at? >> thank you for having me on. following the election, there was a feeling we'd have more accommodating policy and regulation environment. to some extent what i see as i talk to investors, the reviews are being revised. one tell for that is the yield on the ten-year treasury, above 260 now. issues are broader than that. if you think about how banks make money, revenues and net income, you're see slow down in loan growth, and short rates rise, banks give some of the benefits to customers, and, of course, credit is a big issue. >> yeah. >> we've seen early indicators of credit policy beginning to deteriorate a little bit. >> so you're cautious on the banks, but, david, you're bullish, especially on the biggest money central banks. why? >> well, i think as said, you went from all the good news, and now you currently have all the bad news, and the stocks, you know, reflected the good news three months ago, and reflect a lot of the bad news, so the truth is somewhere in the middle. most of the big banks earn tons of money, plenty of opportunity to recon figure their business, cost costs, and and go on to electronic platforms, so if you look out, you know, the next, two, three, five years, there's better earnings, better balance sheets, and the c-card comes out to give us a measure on dividends and buybacks, so i think you're seeing the reverse of what you saw after the election, and, again, the truth is somewhere in the middle, and that's the opportunity. >> howard, i mean, if you look at the very largest banks, they don't necessarily seem to be pricing in a wonderful future, right? bank of america, trading similar in the vicinity of book value, right? what do you think now the market is discounting in terms of longer term potentials how businesses can earn a decent return? >> well, it's interesting, mike. there's quite a valuation between the valuation of the large banks. i use the ratio of the market caps to tangible book value. in the case of bank america, it's 1.2. you know, jpmorgan close to 1.5. and so you have to try to make a decision about what you think the long run returns on these banks can generate, and so for me, i look at jpmorgan, 13% return on equity, they want it higher at 15%, but i don't know 13% commands more than 1.5 times price ratio. >> david, last word to respond to that. >> i think howard's right about what we see today. the question is, what can they turn into the next five, ten years, and i think we've got, again, these piles of assets, piles of liabilities, all needs to be restructured under this new structure we have central banks controlling a lot of the systems, and so the question is, i think they'll get there, and between that and higher dividends, the stocks will be reasonably good places to be over the next three, five years. >> all right. well, we see them under pressure today. see how it goes. david and howard, thank you very much. >> thank you. when we come back, the closing countdown. >> after the bell, nearly 23%, that's how much an increase those who use obamacare in north carolina could be facing next year. we'll talk to the ceo of north carolina bluecrossblueshield how this is happening and if it can be avoided. you're watching cnbc, first in business worldwide. with e*trade you see things your way. ♪ ♪ you have access to the right information at the right moment. ♪ ♪ and when you filter out the noise, it's easy to turn your vision into action. ♪ ♪ it's your trade. e*trade. start trading today at etrade.com three minutes on the dow, 47 points downright now, a narrowly traded day, major index, dropped the entire day, pressured by bank stocks in particular. the ten-year yield has compressed the yield curve down again to well under 1%, and banks are suffering. goldman sachs and dow taking it on the chin. on the other hand, teches continue to outperform the nasdaq 100, a subset of the composite, green for parts of the day, and amazon, above 1,000 for a short time this morning. it's a cosmetic round number, but big faang stocks have the attention. volatility, perfect after a three-day weekend, but suggests a calm and trendless market now. d dom? >> we talked about the idea that the s&p 500, the spyder, most actively traded etf in the world, trades about 77 million shares. with moments before closing bell, we're at 28 million shares. giving you an idea how slow it is down here, so, yes -- >> exactly. >> so for the rest of the week, expect less staffing involved, maybe people are going to be trading less in terms of overall volume. you mentioned faang leads higher, we don't talk about it in faang context because it's a key. tesla hit a record high in trading today. a stock that's in there, but not an s&p 500 stock is it's not in the faang context. >> one of the biggest not in the s&p 500. >> 15 billion market cap, and netflix is 70 bill, the smallest of the faang stocks. you spoke about the idea it's a stock picker market, rotation-wise markets. tesla is a stock not traded in the exchange, but one that's indicative. >> shows, look, if you have doubts about whether, in fact, global economy is in a little of a slowdown, perhaps, or just not going to take off from here, tesla's prospects have nothing to do with that. >> right. >> so money finds ways to the idea not dependent on the macro. >> looking at the stocks for places to park the money because it's the reliability generator return. eventually, those things work out of favor, so the big question now becomes whether or not there is a catalyst that comes even in the next few weeks or months that really derails that tech. >> we have month end tomorrow, and on balance, it's negative, for whatever reason, last day of the month, we'll see if it holds true. dom, thank you very much. ringing the bell, enterprise financial services, dow down 47 points, and here at the big board is the coca-cola company. celebrating its sponsorship at the coca-cola 600. second hour of the closing bell is all kelly. thank you, michael, welcome to closing bell, everybody, and by the way, richard is up there ringing the bell, he won that charlot charlotte nascar race over the weekend. racing royalty in the house here. finishing up on wall street, right to that, dow jumping 51 points, moving to the lows, not session lows, but moving to the lows, closing at 21028. s&p 500 gave up three points to 2412. nasdaq similar amount, 6203 and ru russell, a woef fuful prempl ef. same true for the dow. not recaptured the march 1 level of 21115. hard to believe we're halfway through the year, and a rough year for crude down 7.5%. is this a buying opportunity? we have a bull-bear debate on that coming up, but first joining me now is cnbc's commentator, hello, again. nancy, chief investment at heartland financial, and senior vice president of wealth management at ubs. welcome, everybody. mike, we closed lower today, amazon touched a bounce in the trade, and the idea this is somehow a version of the dot-com bubble, it's starting to take hold. >> it is. i mean, i think if you approach something like that, we're not near the end of it. now, i'm not saying that's why we are going. we are still talking about valuing these big dominant tech companies on this year's earnings, which was not the case 17 years ago, and, ncht, we are down 25, 28 times, and can argue it, but can't say they are up at the timered from reality. that said, there's a the lo of other stuff going on. tech outperforming, but every day, there's another group of stocks that are participating. >> like telecom. >> i talked about this. the federal rotation going on, i don't know how long it lasts, it's a delicate dance, but so far, retaining most of those gains today, just above that former all-time high. >> what were they valuing? >> valuing things on clicks. eyeballs and clicks. >> not earnings at all. nancy, same question to you here. do you look at markets and say, wow, resilience, shook off the oil crash, shaking off the retail collapse, and, you know, or do you -- does it make it harder for you to find good enough in it? >> it does a little bit, kelly. thank you for having me. we've been selling or trimming, not selling. holds on apple. odd place for value managers to be in the first place, but valuations were compelling, and now we're finding just stocks specific opportunity like home depot, visa, stocks raising their dividends faster than they deappreciated, and so we've been able to pick away at those holdings, but we're out of telecom and electric utilities much to my disappointment in the last few days, but the valuations are too rich for us at these levels. >> home depot, nancy, one example. i mean, there's also showing you do have some of the big tech names, facebook and others in the portfolios. how do you make the decision about hanging on to them for the long run versus taking the gains you're sitting on? >> a lot is simple port folio management decisions where apple got to be 6% holing in the portfolio, on air talking about it last may, and that was a great time to buy the stock, up 75%. we have to take some of those gains off, but microsoft, facebook, even google are attractive on our valuation metric. apple is getting pricey, and to we make that decision based on our discipline. if you don't stick to your discipline in times like these, you get buried. we've been selling some of the financials a few weeks back. >> michael, what about you guys? how do you -- where do you look at the markets with the year we're having? >> i mean, i'd say global growth generally strong, steady, volatility down, indexes generally strong and tech has been in its own special class of returns, i'd say this year, and what i think is a little different from the' 90s, we see this mania for the stocks, and it's amazing how well they've done that you're not necessarily -- >> funny to me that i don't hear -- you sort of hear it from the retail community, but i feel it's the institutions coming on every day and amazon, facebook, apple -- >> i think this is a fascinating distinction, actually, because in the retail side, what we're seeing this year is a huge amount of index, right? >> exactly. >> active management overweight, but the average indexer is not necessarily thinking about these proportions. they are just sort of buying wherever the proportions are. >> right. >> i think there's a possibility that's extremely overbought, shockingly overbought some of the big names in tech are. they match undervalued because it's very hard to find double digit organic sales growth that you can reasonably think you're going to achieve in five to seven years and virtually any other sector. >> right. we talk about amazon and others, mike, but it's the traditional tech names and semiconducts today traded high, names like micron and western digital paving the way. >> making the argument for years that semiconductors are the new industrials essentially for the economy, but, look, everything at a price, right? you can say wonderful things about the organic growth potential of alphabet, amson, all of these, you are paying 30% more than five months ago. at a price, they stop -- i don't know what that price is. what's also a factor is that you're starting to see the markets treat companies as if they are huge stable, evergreen type businesses like those that go in the low volatility indexes, so if you look at the s&p splv, there's a 12% tech waiting. a year ago, it was 0. mic microsoft and alphabet is in there. >> how many times it's happened that the least volatile stocks were the most owned, most watched, best performing stocks? i mean, it's -- >> it is a little -- go back to times in the '60 and '50s when it was okay. >> nancy, quickly, one more question for you. art and others have been emphasizing importance of oil in the market, and, again, looking at crude, you know, barely hanging on to $49. is that a reason for you, why we see some of the weakness today just in general possibly? >> well, yeah. i think some of the feds' excelle comments were conflicting, so inflation target versus wage pressure and lack of productivity growth. all of that weighs in, but this is not really a selloff to be sure. >> yeah. >> we have brief pullbacks, and he said they had 56 panic attacks since the bull market began, and they could be great opportunities. >> great point. >> find a way. >> speaking of the fed, dallas fed president told our steve leisman he expects two more rate hikes this year. among other topics, he's here with the highlights. >> kelly, the dallas fed president said that the fed hikes twice more this year but cut the balance sheet. that's growth of 2% and inflation heading the other way. that is softening and heading the fed's 2% goal. >> even though the recent numbers have been weak, some of it is a little idiosyncratic, but i think if you're getting to a tighter and tighter labor market, my own yujudgment is wi the lag effect, inflation pressures are billing. >> government reported core inflation is 1.5% year on year, failing to reach the target, and that's got the attention of the fed president who spoke this afternoon. >> today, there's little indication of a breakout of an inflation. rather the weight of data on inflation are lower than expected, and if anything, the puzzle today is why inflation is slowing at a time when most forecasters put the economy at or here full employment. >> said if soft inflation data persists, she could rethink her forecast for future rate hikes, but not yet ready to make that call, kelly. >> steve, stay with us. is that the point you made, inflation must remember, up 1.5% on the year, but the wage data has been better. do you think that's confusing people? >> definitely, i think, you know, i heard her this morning, like, okay, the message is clear. the fed has discipline, then i heard brainard and submitted comments to you with that reflection, and, of course, you know, two years ago, we were at 0 on the cpi, so now it's 2.2 from 2.7. i don't see that as a crisis or reason to pull back from the cushion we'll get from raising rates, so i didn't understand that well. >> another thing that complicates the issue that they talked about is the uncertainty surrounding the digital side, right? >> right. >> a couple months ago, we were sure what the fed was going to do, and had certainty inflation would rise. well, we knew the fiscal side would come along with a tax cut, infrastructure spending, and now i think nobody knows how that's going to go. >> that's right, steve. >> what would you add to that? >> well, oil is now basically off the table. >> right. >> inflation data's noisier. two factors to think about beyond june, what they do with the balance sheet and rates in september, november, and december. i think we'll have increasing confusion over what they do actually for a second rate hike. there's going to be increasing uncertainty about that because the inflation data is a little bit anemic, and it's not exactly clear without oil prices rising that you're actually going to see the increase. that's the question in the second half of the year. >> since we are talking about this, you know, before this, i was thinking about the playoffs again this year. okay. the cavs and warriors. who are you rooting for, by the way? >> i'm not sure -- i want to get home safely. >> okay, all right. point is, you talked of three-peat faceoff between two incredible franchises, michael, can i make a google-amazon analogy? you know what i'm talking about there? they are incredible franchises, you know, we've got that -- it's a race to a thousand. can i make that analogy? does that work? >> make it, although i like to extend it more because golden state, silicon valley, cleveland might be the cyclicals that are still the underdog despite the fact of winning last year. >> all right. >> how about that? join together on this. >> i think so. i have to think more about it. mike? >> i would just chime in that you could, you know, i like the warriors, but like tech, you can argue it's an invasive species, invading the other teams and stealing talent. that's an issue for tech going forward, the degree in which they enter other industries to compete away a lot. >> excellent point. >> kelly, in addition to the nba playoffs, you know what's more exciting? watching the inflation data. i just want to point that out. >> that's true. >> cpi and pce. >> there you go. you know your acronyms. >> yes. steve, thank you very much. >> sure. >> as always, steve and nancy and michael, thank you, everybody. >> thank you. oil prices as we mentioned, crude falling nearly 4% over the past week. up next, look at what's going on there, and if there are any opportunities to cash in on crude right now. later, the ceo of bluecross and blueshield joins us to talk about cost sharing subsidies impacts premium hikes. find out more from him coming up on closing bell, first in business worldwide. think again. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. last week's opec meeting, cutting outlook for prices too, jackie has more. cruise closing lower, but apart from the drop thursday after the initial opec decision, this has not been a blood bath by any means. prices hovering at $50, which, by the way, exactly what opecmented. session high today, and technicals are telling. we tested the downside and got a break, but broke upside over 50 suggesting there's bias there. consensus at the moment seems to be we're going to bounce around 50, plus or minus five, and if that's the case, opec is not losing control. quite the opposite. they are crafty. why? because crude inventory is 3 billion now, 300 million over the five-year average. nine more months of almost 2 million barrels a day, bringing the market closer to the five-year average, considered very constructive. final point here, goldman sachs out with the update on the energy space today, bullish on short term, $55, but saying prices need to stay 45-50 or there's downside prices next year. 45-50, as soon as shale producer are at bay, it keeps opec adh e adhering to the cuts. it's working, for now, but it is a very delicate balance. >> for sure. we talked about delicate dances in the market, but crude oil maybe not a coincidence. >> probably not. everything seems like in a delicate equilibrium. >> i like it. carl is with us, consultant for oil, outlooks, and opinions, and senior vp for raymond james. welcome, both. you know, carl, oil seems like it's put in the highs, there's a new normal. reaction that opec meeting said it all, right? >> yeah, pretty much. we have to -- we're in a wait and see mode. like the fed. hear a lot of things. see a lot of things. there's a lot of talk. until we see the proof in the paper there's nothing there. we're all waiting on a lot of things here. >> and, you know, there's still plenty of people, yourself included, bullish on crude, but how do you see it moving higher? >> well, you mentioned just a few minutes ago that inventories are, you know, higher than their five-year average. yes, that's true, but keep in mind, global demand has grown 7% over the five-year period, so inventory needs to be rising just to keep pace with demand so the metrics looked at, which is supply, is actually going to be getting below its historical average within the next approximately 100 days. that's exceptionally bullish and something the market is missing right now. >> here's the question to you. what would have to happen for opec output to become influence on the principle, in other words, for the marginals, you know, barrel of crude out of opec to be the driving influence on oil prices. what would it take to get us back to that point, do you think? >> well, it's one influence, and, you know, we have to remember six months ago when opec had the original agreement, that was enough to take oil up to 50 bucks a barrel and hovered there since. you know, one of the issues is that particularly the u.s. inventory data from the deal has not been as bullish as the global supply-demand would suggest. we think that the u.s. numbers will be becoming more bullish and consistently bullish throughout the summer. that is shaping up to be a catalyst to get oil in the 60s, if not higher. >> so, carl, how much do you disagree? where do you see oil going? >> well, you know, u.s. oil, you get president trump's budget proposal, if we get the release in the next few months or next year, that keeps a lid on things, at least in the 55, and so we talk about a stronger currency, a rate hike, maybe two this year, more next year, you know, it's going to be tough. i think goldman's got it, definitely range bound for oil the rest of the year, if not next year too. >> mike, again, there's the implications of this are everything from how the overall market trades to what the inflation nauumbers are as we talked about a second ago. >> it's interesting. we get numb to the fact that oil has been range bound for a while, and before that, in a different lower range, and yet the absolute price is half of what it is. >> right. >> from a few years ago. we are underestimating the degree of the prospect to swing beyond ranges. i don't know what it takes to get us there, but it's something to keep in mind, and, you know, also, the secondary question of what the oil stocks are discounting. >> actually, to that point, you like names like marathon, is that right? >> yeah. the oiler, the better. the companies that have more operating leverage to continue the oil recovery. this is not the time to be defensive, not the time to be hiding out in something like exxon. you know, marathon oil or cosmos on the small cap side is a great idea. the average oil stock right now is counting in the mid-50s. it was higher three, four months ago when the stocks were trading better. we think oil has a good chance of getting, again, into the 60s, if not higher, before the year is up. >> all right. well, i just like the line, the oilier, the better. leaving it right there. thank you, both, talking crude. meantime, more trouble for tiger woods. golf ledge arrested for a dui after being found asleep at the wheel at the side of the road. what fallout that is for him coming up. burger king launching in belg m belgium, but there's a beef with the fast food giant over a new ad campaign. details next. you think traffic, the future's going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it. welcome back. time for fast take today. first up, u.s. credit scores have hit -- ready -- record high of average 700 per borrower and is this normalization or not? >> it's normalization from a very abnormal set of conditions, right? you basically have a huge wave of personal bankruptcy and foreclosures rolling off the credit scores after lot of people, and credit has been restricted. the system has not allowed a lot of people to get credit and more trouble. you have an upward -- >> does it keep going, though, that's the thing? feels like we're there. we've done it. 700. >> the question to me is whether -- what that means is more credit availability. scores higher, you draw down. >> on that point, next up, people use that to pull cash from the homes, half of home refinancing are cashout, highest since 2008. granted the share was higher in the bubble, 70% then, but, still, one in two now? the home atm is back. >> on some level, it's rational behavior. this was discussed for at least four years before the peak of the market and before the peak of the credit bubble, and so, again, it's one of the things, if you hear since 2008, it probably means, yeah, it's up, but certainly not near where it was at the prior year. >> good sign. >> exactly. >> going back there, like -- >> we've been waiting for this to happen. >> i want to know if people are spending on next. android new phone meant to declutter and simplify our lives, and it's called fittingly. would you buy it? it's $699. >> i doubt it. i doubt i'm enough of a stickler for the latest features and design, although it seems as if -- it's interesting that you have an independent trying to set a certain standard. it seems like kind of a boutique niche product that's meant to kind of be maybe best in class. >> i know the cofounder, but do you think the margin is bad for apple? i imagine that's going to siphon off some of the higher end buyer? >> at the margin, but just this far, you know, in from the margin just because it's not going to be that much of a marketing push behind it, and now that apple really is selling phones kind of on lease in a sense, it's a little of a different buying decision. >> we'll see. finally, bk in hot water in belgium, burger king launches next month, and they asked burger king to explain itself, mike, and they were not happy with the use of the king's image for commercial purposes. >> i can see being unhappy with the use of his image, but i think it's almost a gift to burger king to have a sovereign country ask a company to explain itself. >> totally. >> also, just -- i'm going to stretch a little bit for a touch of irony here. inbev, you know, corporate head quarters in belgium, and they are the king of beers. nobody's not telling them they can't. >> not only are we talking about belgium, but i was taken for the mac and cheetos last week. they were not worth singing about. >> got your attention. >> anyway, the white house continues to pay obamacare subsidies is creating chaos with insurers. up next, the ceo of blue cross blue shield of north carolina explains why he wants to raise premiums by nearly 23% because he's unsure whether subsidies continue to be paid. stay with us. this is a story about mail and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. welcome back. here's a look at how we finish today, the climb across the borpd here, 50 point drop for the dow there, and the s&p only off about three points from the high set last week, and nasdaq up by seven, and russell dropping 11 points today. time now for the cnbc news update with sue. hi, sue. >> hello, kelly. this is what's happening this hour, everybody. defense officials say the u.s. military has begun to provide equipment and weapons to the syria kurds commonly called the ypg. they did not give specifics, only to say that the operation began in the last 24 hours. a video released by the iraqi government appears to show the moment a suicide car bomb exploded outside a popular ice cream shop in baghdad killing 13 and wounding 40 more. isis claiming responsibility for that blast. keeping healthy arteries throughout old age is possible. boston university researchers studied more than 3,000 adults over the age of 50 and found that about a third of the people in their 50s had the arteries of a 20-year-old, but only 1% over the age of 70 had healthy arteries. they say diet and lifestyle, not your age, are the reasons why. 14 more billionaires committed to donating most fortunes to philanthropic causes joining gates and buffett in the giving pledge. they include the wife of audio systems founder ray dolby. that's the news update. back to you. >> thank you. residents of north carolina, the cost of health care could be going up. about 23% up next year, the trump administration fails for a new cost sharing subsidies, and it's higher than 8.8% increase, they would have requested subsidies funded for 2018, and for more on this and uncertainty in washington impacting their business, we are joined by the north carolina ceo, brad wilson with our bertha, the expert on the industry, start us off. >> thank you very much, kelly. brad, thank you for joining us. you did an interesting thing. you actually outlined for your clients just how much of your increase relates to different things next year, including the health insurance tax and those cost sharing subsidies to reduce out of pocket costs for the low income members. talk to us about why you did that and how you came up with that. >> well, what we have just done is consistent with our philosophy of trying to be as transparent as we possibly can, which, of course, helps educate our customers and consumers about what is part and parcel of any rate increase. we felt it was important as we go into the rate approval process for 2018, that our customers understand what the importance of the csr funding, hence the reason for the disclosure of the information. >> you know, every time we hear about large increases, rate increase requirements, we hear about insurers going out of the exchanges, and republicans say, it's a death spiral, dying of its own accord. why did you want to go out, and what are you telling people in washington where you are today about what needs to happen in order to prevent these big increases next year? >> well, as the only insurer in north carolina that is serving all is 100 counties in our states, we feel it's important that we work very hard to try to continue the stability that is -- that we're actually seeing in the north carolina marketplace. so another reason that we wanted to be as transparent as we could, and what we're doing is saying the same thing to the elected officials in washington, that we're saying to our customers, we're explaining what is making up a rate. yes, it's the csr money. it's also the ever-increasing volume and pricing of our medical underlying health care expepns expense, and part of the rate reflection of the health insurance tax that comes back in 2018. >> mr. wilson, if we assume that you do get approved for that 23% increase, can you change that figure at all if the facts change coming out of washington about subsidies that are or aren't funded, taxes repealed or that are not? >> once the rate is approved by the department of insurance, we can only make a request to the department about any change in the rate. i feel confident in the collaborative way we work with our department of insurance that if circumstances change that required us to bring the rate down, we would make such filing, and we're confident they would be receptive to that. >> one more question, how competitive is the market place in north carolina for the obamacare plan? if you're raising rates 23% this year, do you expect to stay in the exchanges long term? >> realm, there's other factors that influence our decision on whether or not to stay in the exchange, but, of course, a fair and competitive rate is critical to that. in north carolina, we have one other competitor, but they are only offering products in five of our 100 counties, so for all practical purposes, we're the largest and effectively the only aca alternative for most of north carolina. >> brad, of course, the senate right now, looking at the american health care act passed by the house, that would allow states to opt out of things like a central health benefit, and also set up a more risk adjusted market for people with preexisting conditions. would you be able to operate under those conditions, and do you think if we pass something fully, like the ahca, you actually could bring rates down? >> well, that would certainly be the aspiration. i encourage leaders not only in the senatings but in congress to focus on two elements that we constantly discuss, and that's affordability and stability. whatever the senate decides to grasp as an alternative to the house bill, it needs to be done quickly. it needs to provide provisions that will bring stability and affordability to the market place, and if we have enough time, i think the industry has shown that we can adjust to about anything that makes sense if we have enough time to do so. so it's -- this is an urgent situation, and we simply need to know what the rules of the game are going to be for 2018 in order to get affordability as well as stability. >> thank you very much, brad willson, and, kelly, of course, june 21st is when insurers have to get the final rate requests in, but they don't have to commit to the markets until the end of the september, so as long as uncertainty goes on, it gets closer to open enrollment. >> thanks to brad wilson, bertha, you as well for bringing that to us. uber fired the head of the car unit. deidre? >> kelly, that's right. anthony is out, the former google engineer at the center of uber's lawsuit over self-driving car technology. they said the company has been prepping levandowski to comply and consist with the internal investigation for months. he did not meet a deadline, and will not wait for the issue to make its way through court. accusing uber of trading trade secrets. he was a google engineer that started his own startup, auto, that uber acquired, making him head of the driving unite, and he was ordered by a federal judge to hand over evidence and testimony. he asserted his fifth amendment rights. his lawyers say to avoid potential criminal charges. guys, it's unclear what this means for the lawsuit, and we reached out for their take, but the worst case scenario is prosecutors would now push him to implication other executives at uber. this is the latest in a very rough year. it's now lost another high profile engineer, and source close to the matter tells us tomorrow uber's board subcommittee receives the report on workplace issues and sexual harassment that eric holder, former ag, has been overseeing. >> yeah. just tragic news about losing his mother, father seriously injured in a boating accident this weekend. thank you. our thoughts -- such a tough year, mike, and it's just -- >> yeah. >> only mentioning it because it is a difficult thing that i can't imagine what he's dealing with with everything else going on, but this latest news about what's happening with anthony is not terribly surprising because the company distanced themselves from him as the trial proceeded, but it seems uber is trying to distance itself from, you know, the worst possible outcome the trial. >> exactly. so if, in fact, the uber positions of this firing is, in fact, the way it went, it is going further in the effort of uber to characterize the situation as, look, we were on the up and up, acquired this guy's company, assuming he came by the technology in an honest fashion and so it does isolate him more than imp kate the company, but, of course, you don't know if that's the tactic. you will see how it plays out. >> absolutely. a lot of technology at stake. summer may be shaping up to be a bust in the movie business, maybe. i don't know how indicative this memorial day, pirates, bay watch was, but we'll have all the box office details coming up, and tiger woods arrested for driving under the influence over the weekend. impact on his sponsorships and what that means for his wallet is still ahead. you totanobody's hurt, new car. but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do? 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the founder of sports marketing for sports corp., you know, what are your initial thoughts on this one in. >> well, this is part of the incredible downward spiral we've seen happen to tiger in the last eight years. we -- it -- what happened to tiger personally, professionally, and financially has been nothing short of falling off the cliff. >> right, and, i mean, i will say in a way it's become so tragic it's almost sympathetic at this point. i mean, there are fans who, and much of the public would love to see the tiger woods of 2003-2005 of his peak, you know, 2008, and, you know, back out there and yet will be thinking about what's best for him after this news, so where does that leave the sponsors? >> kelly, absolutely right. he's not won a major since 2008. that is nine years ago, not winning a tournament since 2013. what happened with the sponsorships, he used to make about $100 million every year. he's now at half of that with much of that coming from a preexisting deal with nike that pays him $20 million a year, and nike earlier this year said they are disbanding their golf unite. question is how long that goes on for. >> mike, is it because golf is perhaps less important to nike they had to make a tough decision? >> in the case of nike, yes. i think it's actually fascinating we're talking about having otherwise would be tremendous opportunity for endorsement by tiger woods, now jeopardized when he has not been near the front of his performance terms for a decade. >> yeah. >> it shows you about the girth of golf stars with nobody to lean on. >> that's right in a market that's clearly a point, going back into that idea that there are some people who just are rooting for him to be, you know, to have some of the former glory. >> without a doubt, it's a measure how dominant a personality and athlete he was at the peak. he was synonymous with the raise of mainstream of golf in the industry, and so that's why i think it's remarkable how far. >> mark, do you think this is indifferent that he'd have fewer sponsors if there were other horses for the sponsors to bet on? >> you know, yes, would have fewer sponsors, he would be less important in the golf world a decade after since winning the last major championship. we have great golfers out there, but they don't have the personality tiger had. he transcends, a pop icon, a great athlete, he was multicultural at a time when we were really becoming at the forefront of multiculturism in the nation. there was so much about tiger in the right time, place, and right person, but as happens, as we've seen with other superstars out there and celebrities in the sports world, the fall can be really, really dramatic, and that's what we are seeing with tiger. golf really needs him. especially when he goes over 50 and goes to the senior tour, and he would be on their every week, and we're not really going to see him there or pay much attention to him. >> mark, i wonder if the public continues, look, he had four back surgeries in recent years, something like that, a lot for anybody to go through, i can't imagine the pain and painkillers involved to get him through that. to the point where the public, and own fans, prefer to see him walk away from the game, can sponsored help him find another niche in golf if that's what he wants? >> kelly, you're too young to remember this, but there was a great baseball player, william ace, who wowed everyone, but he stayed too long and was an old man playing a game, and there's images that people remember of him as a pathetic figure, frankly, rather thans incredible athlete he was. this mug shot of tiger woods is going to be with him forever. >> yeah. >> that's an image that's going to be indelveble. >> we have to go, mark, but i would say when you say willie mayes, i think of baseball greats, so i don't know. maybe that's all people will think of tiger woods as and this is just a sad quota to live through and for him as well. we'll see. mark, thank you for joining us. >> my pleasure. >> founder of sports corp. we have a news alert on our country's missile defense system. morgan, what are you learning? >> kelly, that's right. the mission success is headline here. missile defense agency saying moments ago that it successfully int intercepted a ballistic missile target during a test of its land base missile defense system. you can see that taking place here. this is the first of its kind, live fire test event for the system, and while under planning for a long time, this is in the heals of the missile test for north korea since yesterday. the intercepter, the video seen right there, was launched from the air force base in california. we're told it destroyed its target in a direct collision which was planned to take place over the pacific ocean near hawaii. this is the first intercept test of the so-called ground base core defense since 2014, a system built by boeing, and suppliers include many more. back over to you. >> morgan, thank you. exactly what i was going to ask, mike, who are the companies behind this, boeing, northrop, raytheon, and orbital. >> extremely strong groups. >> glad it worked and was successfulful you know, important, obviously, for the companies, for the country. not even captain jack sparrow or wonder woman could save the box office. what's behind the numbers next. coming up, she told you to buy the brexit tip and trump dip, and he's on "fast money" to say what you need to buy right now. more closing bell after this. their experience is coveted. their leadership is instinctive. they're experts in things you haven't heard of. researchers of technologies that one day you will. some call them the best of the best. some call them veterans. we call them our team. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. and if you do have an accident, our claims centers are available to assist you 24/7. call for a free quote today. liberty stands with you™ liberty mutual insurance >> welcome back. the summer box office is off to a great start. julia boorstin is what's on deck to save the rest of the season. >> reporter: thanks, kelly. this was the worst memorial day at the u.s. box office in 18th years. the summer box office is off to a terrible start. fuming fears about fatigue with movies that recycle old ideas. paramount's "baywatch" dragged the holiday weekend down on bad reviews, 27 million in the u.s. as it opened on wednesday him disney's fifth "pirates of the caribbean" name won the weekend but has the lowest u.s. opening the first in the franchise $77 million. that was balanced out, though, by a massive $208 million opening overseas bolstered by china. disney's topping the box office this year with nearly one-quarter market share. homes are high for warner brother's "wonder woman" to the u just-start the season friday, studio and theater owners are concerned consumers could opt out of transformers and the sixth spiderman the u.s. box office is still up 2% year-to-date t. films released in may were on course to under perform estimates by about $280 million. kelly, back over to you. >> all right, julia, thank you. mike, this is interesting. insiders close to both films have told the trade publications this weekend they blame "rotten tomatos" they gave pirates 18th% and bay watch 19%. maybe they think we don't screen these. >> they blame the supposed experts for 100 years. >> right. >> but i go es the ability in one glimpse to get consensus, correct, al opinion, maybe it's more palpable. i think it tells you, if that has an influence is people are rationing how many times they go to the movies. it's not about as good or bad,ly go to three or four smr it's expensive. >> maybe there aren't that many open questions from the fourth "france former's" movie. >> i'll wait for "baywatch 2". we'll tell you which companies are sounding cool with buzz words, how that could impact their bottom line after this. the whisperer? 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>> you can overuse it. it's interesting virtual reality has ebbed, a bit. >> they're kind of over. whereas with the cloud, it became so much a part of the fabric that that word, itself, may be is less important smr the cloud spiked. now it's just kind of there. >> it's descriptive instead of being aspirational. i can remember in the late '90s, what's your online strategy? in the mid-2000s, what's your china strategy. >> it's interesting, though, a couple things have shifted. bitcoin was a few years ago. now it's basically zeroed out. lockchain has taken over. so that swapped and then it used to be called self-driving cars. they stopped saying self driving cars, now they're saying autonomous vehicles. it's another way of naming the same thing, soundsing buzzier. >> you can physical out whether somebody is pecking one thing to focus on, as here's where we're investing as opposed to mentioning five of them in one sentence. how many combinations seem to be focused? >> how many have overlapped among those five? >> it's the same thing. how many reporters are trying to call themselves big data operators? >> i don't know, too many. >> you have a machine to learn. >> ai recording out there. too. >> thank you. michael, real quickly, some interesting month-to-date numbers i wanted to mention the biotech spyder is down retail 5% and the. >> mel b: conductor that you mentioned earlier is up 8%. >> it's a tremendously bino tech market. they seemed uninvestible. >> that biotech is fascinating. usually that goes along with tech. they go the opposite direction. >> retail is a secular, biotech has more pricing. >> more tomorrow. thank you very much. >> that does it for "closing bell." "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq markets overlooking new york city's time's square, i'm mellissa lee t. traders are pete najerian, tim seymour, dan nathan and guy adami. tonight on "fast" something they haven't done since the dark days of the financial crisis a. top technician says look out below. he'll explain why he's so bearish. plus get this, shake shacks are usually the best burger. now wall street's most hated stock. could that signal a buying

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