Transcripts For CNBC Closing Bell 20170720

And not simplecism i think it would have been the same result and thats why i believe its a legally correct conclusion. Final question, darren. How important if at all was the testimony there of one of the victims of the robbery victim testimony at parole hearings can be very impactful far more impactful frankly than family members of the defendant who are fairly predictable in their support, but when a victim indicates they have been made whole, can carry a lot of waist to the trial this was a rogues gallery so that can factor into it as well when the board is deciding what weight to give it, but in general victim testimony, very powerful. Darren, thank you very much darren kavinoky, criminal defense attorney and lets bring in bill and kelly to talk more about this ruling in the o. J. Simpson case. Truly a a throwback thursday, hu oh, man, is it. Taking us all back to the 80s here. I dont know about you guys, but it seemed to me listening to each of the parole commissioners that while they voted in favor of parole they looked a little reluctant as they cast that vote did you see that i sort of did certainly the first individual who spoke talked about the fact simpson had organized the crime, that they robbed at gunpoint, you deserved to be in prison and at that point i thought maybe hes not going to vote for parole, but when he said you have complied with the rules of the prison, you have no prior convictions. You have a solid release plan awaiting you, that is the moment that i went, well, looks like its going to happen. Did you guys catch whether hes able to start making money right away now, o. J. , if he starts to do appearances or get, you know, income for showing up at various events . Its been explained to us by jane wells and robert frank that most of that would go to the family of mr. Goldman. However, his pension will be protected and thats 4 million to 5 million so thats fine so Everything Else hes already does is cordoned off, even though he was acquitted of the crime. There was a civil trial in which you dont use the word convictions but they found a judgment against him. And we could learn more momentarily as you point out when the conditions for parole those conditions of parole which were awaiting in maybe the next half hour may spell out what he can make money from and what he cannot. Is it still in his interest they be to make as much as he can, even if it goes to the family seems like a man, kelly, who enjoyce t enjoys the public spotlight and thought about maybe having a webcast or something along those lines. Its interesting to see what he does afterwards. Well pick it up from here and well continue that story as news warrants. Have a good show. And thank you, and we welcome to you closing bell. Im Bill Griffeth along with kelly evans here at the New York Stock Exchange two breaking stories for you this hour. Were waiting on remarks from both House Speaker paul ryan and President Trump. Ylan mui is in massachusetts with the speaker as they tour a new Balance Factory and Kayla Tausche is in washington. Reporter bill, the president is just about to host a roundtable with the ceos of corning, of merck and of pfizer. Were told by the white house that its going to be a pharmaceutical initiative that the white house says will be creating jobs in this country and will be a significant backer of the administrations made in america program. Were told the president has just begun speaking. When we learn more details about what exactly this initiative is, we will bring it to you, but it is day four of the white houses made in america week, and at least for another afternoon they are trying to get back on message to talk about manufacturing and production in this country guys all right kayla, thank you our Kayla Tausche and ylan mui showing off some google glass. Reporter safety glasses. Safety first paul ryan is conducting that tour here inside the new balance sneaker factory in lawrence, massachusetts. Right now were waiting on him to make some remarks on tax reform in just a few minutes, and the president bush our is on for him to deliver on what hes called the crown jewel of the republican agenda, but just today it was reported that jop leadership is considering a 25 Corporate Tax rate thats higher than the 20 rate that ryan has pushed for, and thats because they can no longer count on that 1 trillion in obama taxes being repealed and the border adjustment tax does appear to be dead however, the Politics Around all of these issues are shifting very quickly there was a demonstration outside the factory earlier today with protesters talking about some of the key priorities that republicans have been pushing for, suchings a the Health Care Bill as well as the end of sanctuary cities. Meanwhile, new balance itself has taken some heat over the past year. The companys founder was a major donor to the trump campaign, and in addition the company broke ranks with the rest of the retail and apparel industry by oppose the Transpacific Partnership now we rex pecting to hear from the company ceo in a little bit as well. Hes not weighed in publicly on tax reform previously, but well see what he has to say today guys reporter im struck that paul ryan is doing this. And not only just that but in massachusetts not his own home state. I mean, obviously hes trying to lay the groundworks but i wonder, its interesting that its fallen to him to do this kind of groundwork for the tax reform legislation reporter thats exactly right. One of the reasons they have chosen this fact i is its one of the places where sneakers are still being manufactured in america. You see the workers here wearing tshirts that say made in america so thats part of the message they are trying to send her that lowering the corporate rate can help create american jobs and grow american businesses well see how that plays out. Ylan, thank you the s p and nasdaq hitting record highs again today the session with the s p tech index coming off that recordsetting index yesterday passing the high set 17 years ago during the dotcom bubble. We sound so smart to be able to point out that narrow indeshit an alltime high yesterday. Lets get to todays action. We include brian singer, Macro Allocation Fund sitting here at post nine, yann art ra barton, and pete costa and Rick Santelli at the cme pete costa, is this market just in Cruise Control . All these things keep happening and the mark keeps marching higher theres people no longer in control of their investments i think that people are putting ive said this so many times and have to be blue in the face. Theres money starting to chase potential price points on stocks that might be too rich and it might be in Cruise Control i think at some point there will have to be an allocation and people have to rethink about what they have just done because im not 100 believer that, you know, the market is always six months ahead im not sure that six months sts going to look as good as we look now. Not just u. S. Markets for the first time in nearly at least three decades the s p 500 have not had a 5 pullback, any of them, this year now theres still a ways to go, but this is a synchronous real, isnt it this is the first time that the markets really had the opportunity to rally when theres not a growth scare people arent looking at it and saying valuations are out of control. I wouldnt say its on Cruise Control. Its almost like its on autopilot. There are all these etfs and all these rulesbased strategy and money is flowing into those and its pushing that systematic exposure and thats global not just the u. S. Suddenly i have images of a driverless car. Thats the same place to go. I remind everybody were in the middle of earnings season and for the most part numbers have looked good and the market has responded, accordingly maybe thats contributing as well, right . Absolutely, and i i guess i would have to take the opposing view and thats the leadership in the market today has been driven by growth areas of the market meaning they are supported by fundamentals of Earnings Growth i respective of what were hearing from washington weve had 50 of the s p 5 reported to date and the numbers are coming in solid. More importantly 2017 for the rest of the year were expecting 9 boston Earnings Growth and expecting reacceleration of the Earnings Growth into 2018 more importantly its a broad leadership within the tech space and health consumer, its everywhere, and we now think it a its a stock pickers market so were excited about the opportunities that were seek. Any specifics where you would want to pick up some of those names . Absolutely. We have so many, and our focus Growth Opportunities fund has hover 30 of these positions, but i will mention maybe three the first two are within the consumer space which i think is very timely with another announcement of amazon winning the war within retail. We have two that we think are sort of under the radar names like newall as one as well as delphi for anyone with kids ill just mention the elmers glue thats responsible for all the slime in your house the other space is health care when we think about the names like vertex, we were reminded earlier this week why its innovation its not regulation thats really driving the pipeline there, hand right now were really intrigued by ce lg ene which remains at a discount to its 20 plus growth trading below market and below its own growth rate. Rick, i wasnt up for the boj meeting overnight, but i was up for the ecb meeting and mario draghi came out smiling. Thats really all the market needed to see. I mean, he talked about growth again and seems to please the market here, hu . Yeah, no, he was covering his hands because his fingernails were bitten pretty far down, but, yeah, for the most part i i think youre exactly right. You know, i think yanna has it pretty much right. If somebody goes to the bank and shows they have a good job, good income, a nice portfolio of assets and and if they want a loan the bank will give it to them, but if they forget to tell the bank that they have a lot of gambling debt thats kind of off Balance Sheet that changes the dynamics i think europe, for the most part, looked really golden yanna is right i think theres good fundamentals the economies like spain and italy and france are doing better, but yet off to the side theres still these issues that need to be addressed by mario draghi at some point, but i think that this wave is a long way from washington up on the show and even though peter ultimately may be right, its all about timing i dont see a lot changing, and i guess the best way to kind of perry mason this is the main evidence is the Euro Currency. The Euro Currency is screening best levels against the dollar since january of 15, and its that whole period from january 15 to like 40 hours its basically a twoyear bottom. Europe will find lots of investors to find many things like their stocks, but the euro is kind of the barometer to Pay Attention to. And the dollar index, peter, to that point. 94. 5, its fallen precipitously and the flip side might be the equity markets the nasdaq is in positive territory right now. If it goes longer than ten we havent seen that since 2009 you know, these are these are not just your everyday rally were talking about. Its not if you look back to 2009 youre coming off probably one of the worst periods in stock market history. I mean, everybody and anybody was sticking money back into the market because you had reached a bottom, and you started seeing that rally the economy was starting to turn around i think the economy, you know, Going Forward, the earnings, you know what . I disagree a little bit. I dont think the earnings are all that great im not expecting a 16 increase in s p earnings, but i dont think youre going to see 8 this quarter, and i think that thats where people are expecting a little bit too much. Very quickly, what would you be buying, eric . Actually as we look at it, the u. S. Doesnt look great from a valuation perspective. We prefer to be outside the u. S. , italy, spain, uk. Youre loving the strong euro im loving the things that everybody else seems to hate we love to trade are you a bond trader now i used to be but not now. Okay. Some habits diehard. Thank you all. Appreciate your thoughts on todays market action. Thank you. We have a news alert on exxon. Jackie deangelis, whats going on reporter good afternoon, bill exxon is challenging a fine imposed by treasury earlier today of 2 million over russiasanctioned breechesch the company has come out with its own statement explaining why its challenging them. Exxon violated supposedly, according to treasury, u. S. Sanctions on russia in may of 2014 when it signed eight documents relating to oil and gas projects wiand the 2 millin fine is key here and the key is Rex Tillerson was presiding as ceo of the company when the sanctions were allegedly violated the state department declined to comment on this referring all questions to exxon and, of course, exxon is challenging it. You can look at exxon stock right now, not really reacting particularly to this news but maybe something to keep an eye on back to you. All right, jackie thank you very much. Now, we also have breaking news on that announcement from the white house this hour. President trump announcing a new pharmaceutical Glass Packaging product from corning, merck and pfizer he says that the initiative will bring in 4 billion and 4,000 new jobs as it happens well be speaking with the ceo of corning about this initiative in a firstoncnbc interview in just a few minutes. Wow. A lot of questions about that its very specific. Yes, it is. Look forward to speaking with him. 45 minutes to go until the close and despite the dow being down a couple of points, the s p is higher by two the nasdaq is going for ten straight and for the latter three, these would be records again, any positive close. Put them in first place in the eastern division, thats for sure, if they can get ten in a row. President trump is promising changes again to the dodd frank banking rules. Up next, well get reaction from kelly king, the ceo of bb t bank. And Sears Kenmore brand was a symbol of quality appliances when we come back, how an etail competitor is giving that sears brand and the stock new life. And as always we want to hear from you. You can contact the program here hon closing bell, on twitter, facebook or send us an email. Youre watching cnbc, first in business worldwide when this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Bb t earnings posting the best returns in three years. Some analysts are citing weak mortgage concern is a point of concern. Joining us to talk about all of this is bb t ceo kelly king in a firstoncnbc interview thanks for being with us. Thank you. We keep hearing mixed signals and the auto portfolio was cut in half. How did you guys do in the lending category this last quarter . Well, we did really well. Our total growth loans were up 3 which was good in the industry and we have what is called a Core Portfolio that were trying to grow and our optimizing portfolio we, have you know, a number of loans that are Mortgage Loans and auto loans that were currently allowing to run off in order to improve profitability, and then we have the core loans like consumer loans and commercial and industrial loans that were trying to grow so core operating loans and including 7. 5 which is very strong the optimizing ones so the net was three so we have really loan growth i think in this quarter i wanted kelly to play what we spoke to is the Mortgage Market and getting more of the availability for some of the younger people take a quick listen. Our goal going back to Regulatory Reform is should you move it from down 20 to 10 wouldnt remove the risk so you like a mortgage to get done and if you look at the statistics, the difference between 80 and 90 ltv, loan to value, isnt much different as it is between 95 and 90 thats when you start to see real differences in performance statistics so we dont want to wish people that borrow money to have trouble paying and i think we can remove some of the rules. Kelly, you think those rules need to be moved as well yes, i do i totally agree with brian theres two facets to this issue, what he talked about. Weve clearly made it too hard for young people to get into houses with reasonable down payments into the loan thats a big thing that brian was referring to the other thing that he did not mention, kelly, is weve really made a mess of the Mortgage Market and its really bad for the economy. Its really bad for the consumer you know the Mortgage Market is a real, really big driver of the Housing Market the Housing Market is a really big driver of our gdp and yet weve made it so difficult for the banks to make loans these day. You may not know this. I want to put you on the spot and ask you to guess you know, when i started making loans a long, long time ago i could have made you a Mortgage Loan with eight or ten pages and you would have understood what was going on the average Mortgage Loan today is 615 pages, and nobody understands whats going on, so weve made a mess and this comes out of the cfpb, made a mess at a Mortgage Market its hurting young borrow, and everybody in terms of whats going off. Its making it more difficult for the banks to make loans and, therefore, its a big negative downdraft on the economy so we need to fix the down payment rule that brian was referring to, but even more importantly we need to remove a lot of the minutia out of the process so the banks can get out and help people get houses, you know, and allow them to provide the kind of homes that families need and that will provide construction jobs and it will be good for the economy. Which sort of leads me to my question which youve sort of answers here the president told the New York Times he wants to modify dodd frank for just that reason. He used the example of someone trying to get had a loan for the pizza parlor hand they cant get the money from the bank they have been doing with for a long time and what literally has to happen what kind of regulations do you want to see go away and modified in order for this bottle next thats occurring not allowing people to get loans . Yeah. So, bill, two aspects of that. With regard to the mortgage thats specific to the cfpb. We need a law to change the governance on cfpb so that they have a governing body so that they have to be accountable for their budget they need a director that understands how, you know, business works, banking works, Mortgage Works and get the mortgage activity flowing again. That will help housing that will help young families, thats good. The Pizza Company operator that the president was referring to is exactly another really good case in point. So so the entire process of lending today is so much more complex than it was even just ten years ago. Because the regulators have taken the the basic tenements of dodd frank and have added a lot to that so that its much, much hard thundershower make had a loan to a Small Business today. Its much harder to work with a Small Business loan. Again, when i first started making loans, we didnt have to have near as much, you know, minutia detail if we knew the client we got basic financial information. Look, this is important. If the pizza operator who is just Getting Started and one quarter didnt work out exactly the way he thought, we could work with him. We could renew the loan and lower the rate and we could work with him which is what we want to try to do its really hard for the banks to do that today. Yeah. So we need to stop micromanaging the banks so that the banks can get out and support the community and make loans which is what we do best which helps grow the economy. Kelly king, we always enjoy talking to you thank you for your thoughts. Thank you have a great day. Kelly king of bb t. We are headed to the close with 35 minutes left in the trading session. The dow has just turned positive again. The s p is in record territory and so is the nasdaq and the russell, as a matter of fact. Yeah. They are all looking at the dow. Meanwhile, have you seen sears today . It was up as much as 20 for a to im. Now its up 11. 75 after word that an unlikely rival is going to carry the kenmore appliance brand for sears. We have details on that coming up. And microsoft is slated to report fourthquarter earnings after the market close well speak to one investor who owns the stock but hates it. Stay with us 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 but we should be seeing more range of motion. K good, im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading Companies Lead with digital. Welcome back we talked about the dow just turning positive or at least trying to stay up there now and nic sip 2 today on the heels of an upgrade by Morgan Stanley from overweight to equal weight. They believe nikes sales growth will improve due to new products such as the nike air vapor max sneaker which was launched in march. Morgan raising its price target to 68 from 56 and nike is trading around 59. Is that the label on the shoe i didnt know about that. I dont know much about this, but they think its going to be a 1 billion sneaker and all this stuff. Talk about strange bell flows. Were definitely the not in the 20th century sears is higher on news that it will selling its kenmore appliances on amazon the retailer announced what they called kenmore smart appliances will be integrated with users of alexa so zell be able to have it via voice commands that pushed sears stocks higher but its pushing other retailers like whirlpool, home depot and lowes they are down 4 , 5 has. The idea is if you thought that selling appliances was immune from the pressures of amazon, you know, today you have to rethink that with the declines of 5 for home depot and lowes, but, look, theres a ton of products that already have alexa functionality which is one aspect of this, the smart home thing and how they will get the product to people is another one. Will pool has to some extent, whirlpool, washers, dryers, ovens that can be controlled with alexa this will list has dozens of Companies Working on this technology. Right. And i think the market is over doing this amazon trampling other companies thing. Every time we announce a new initiative other companies go down sharply at least two houses that i saw today issued buy recommendations on home depot and lowes today, buying this dip, because they felt it was nonsense that they should go down 4 just because sears is going to sale on amazon. Amazon was weaker a short while ago. It has turned back positive. When they start selling appliances in the whole food stores with amazon prices, i kind of get it, but we might be a ways from that. Well see time for a cnbc news update sue . Heres whats happening at this hour, everyone. Travelers in the northeast may be one step closer to super high speed transit. Elon musk says the Boring Company which he founded has received verbal government approval to begin building an underground hyperloop between new york and washington. It would whisk passengers between the two cities in 29 minutes. Musk though says a lot of work is needed for formal approval. Target is going to phase out the long time morono brand and all mens items in the massimo items. They will introduce four new brands starting at the end of august t. Boone pickens says on his linkedin across he had a texassize fall that required hospitalization. Hes still mentally strong and its a little hard to find the words that hes looking for to speak clearly. Hes confident that Speech Therapy will fix that problem. And according to the financial website newark, new jersey is the most stressed city in new york followed by detroit and cleveland. They take into work hours, commute time, debt load, divorce rates and suicide. The least stressed city is fremont, california. Youre up to date, guys. Back to you. Sue, thank you very much. We have 28 minutes left in the trading session with the dow up a point, and im here with the very relaxed gordon sharyla wit rosenblatt securities. We were talking earlier whether this market is on autopilot or Cruise Control you have overseas major banks meeting and all these earnings come out and all these initiatives going on here and yet the market the nasdaq is up ten days in a row. Were consolidating here and the buyer still remains to the upside we had oil that came in here a little bit. Right. And we thought that might derail it but it hasnt. If you look at the breadth of the market, upside volume, dawar of downside value. Dow basically flat pin that on one or two names russell up, nasdaq up, s p up. Are we overpriced though historically speaking in your view they are expanding the multiple somewhat, of course, and the question really becomes what are were going to see the rest of the earning season and, you know, the stocks that arent behaving properly are getting punished and the others are getting rewarded youre saying stay the course you dont want to get into a situation where you arbitrarily fight for some emotional reason. This is what the tape is telling you. Dont fight the tape, right yes, sir. Thank you, gordon. Pleasure. Less than half an hour to go. The dow is slightly negative, but, again, any higher close for all the major averages would be a fresh respective record. Morgan stanley with a strong showing for 2017 compared to rival goldman sachs. Its been a long road back for morgan since the financial crisis and ahead well look at that comeback and microsoft continues to ramp up its business of selling webbased computing. Up next, a bullbear debate on that strategy. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade to keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Welcome back shares of microsoft hitting new alltime intraday highs after its fiscal Fourth Quarter earnings after the bell today. Lets bring in a bull and a bear on this stock. Rodney nelson from morningstar is our bull and david dietz is our bear david, you own this stock. I do. Reconcile that for us how does that work we bought it just when ladella came on. The stock up 100 under his tenure thats terrific. Were hanging on but we wouldnt add to the position now because its trading at a premium to software peers, very much to the market people are in love with the stock because its a cloud play, but thats only a quarter of this company. Let me just point out were less than two minutes away to going to House Speaker paul ryan in massachusetts talking tax reform and well get to the q a portion of that discussion in a moment so we may have to interrupt you brief. I rodney, meantime, why do you think microsoft is the a name to hold and what do you think about azure . The stock has had an incredible run yes, while the Cloud Properties are a relatively small portion of the business today, youre buying this business or this company because those underlying Cloud Businesses are growing at fantastic rates. You have azure growing near triple digits and office 365 becoming a much larger piece of the Office Ecosystem and microsoft is the ahead of where they expected to be with that office 365 migration a few years ago the target was 40 of Enterprise Customers would be on office 365 and were actually on 50 as of microsofts analysts in may. Youre buying the businesses for the strong underlying businesseses that are in in the markets that are much larger than in any market that microsoft has competed in previously. Rodney, five years from now as they continue to grow azure and deemphasize some of their socalled legacy businesses, what kind of company do you see microsoft being . This is going to be a business thats driven by azure and 365. Microsoft azure in particular, you know, thats a service thats competing in a market thats worth hundred of bullions of dollars t. Represents a consolidation of so many different aspects of i. T. , and it also enables microsofts customers to pursue new challenges or pursue new projects that ultimately drive the business forward, so on one hand you have it promoting efficiency for Legacy Technology thats still vital to the customers and it also unlocks Machine Learning and other computing frameworks that allows the customers to drive the businesses forward and be more efficient with every single i. D. Dollar that they spent. Why do you think amazon is a better value relative to microsoft . Valuation, plus Market Leader buy amazon youre paying 3. 5 times sale, with microsoft its 7 times sale why pay more for a wannabe yes, amazon was certainly the first mover in this market and has a pretty sizable lead when it comes to Global Infrastructure and a very wellbuilt premium portfolio, but would i argue that microsoft is going to be much is going to have a much more clear opportunity to tap into its enterprise agreements and tap into that very large Enterprise Customer base where it has phenomenal mine share and theres so much investment and time and research. Azure is just a natural landing place for a lot of customers. Gentlemen, we have to go at this point because speaker ryan is taking questions at that event in massachusetts we want to see if we can get any tidbit on the taxwriting process. Lets listen in. [inaudible question ] yeah. How how can anyone have confidence i would say the how has produced a whole lot of legislation. Overall of the veterans administration, signed into law. Weve already had a big down payment on supporting our troops in the military, signed into law. Weve actually done quite few things weve passed more bills in this period than the obama, bush presidencies and clinton presidencies the best answer to your question is the fact that we know tax reform must get done because its high time that it gets done and its been 31 years and as republicans were bird the same way on tax reform. You can see in the senate theres differences of opinion on how to do health care reform. Were so much unified on tax reform and that it looks like and the need to do it so i feel far more confidence of anything that were going to do this year, that tax reform, which is whatty with want to do by the end of the year is going to get done because every republican in the house and senate knows it has to get done if we ever have a chance to get our economy growing anywhere near 3 yeah the big six that are working on tax reform will work on agreement by the end of this month which is next week and be able to actually start writing legislative text over the summer recess can you give us any kind of public assurance that theres any indication of what the plan will look like besides whats in the blueprint. First what i would say is the taxwriting committees will be writing the bill, thats the house ways and means and the Senate Finance committee and what the principles, myself, senator mcconnell, the chairs of the taxwright committees who are representing their committees and the white house are doing is just finding where the Common Ground is on a common tax reform plan that then the taxwriting committees work from to produce the legislation were very, very well on our way and we feel very confident that we see it the same way and, again, we went into this with a common goal. Just what i said right here h. Get the rates down as low as possible for businesses across the board. Do as much as we can on expensing. Make sure that we consolidate the simple tax rates and make it simple bring the standard deduction up so most people dont have to itemize and have a simple form and retain our priorities which is charities and mortgage interest well hand all this off to the taxwriting committee to fill in the details. [ inaudible question ]. These things will be litigated by the taxwriting committee. I dont want to do the ways and means job, the ways and Means Committee working with the Senate Finance committee will finish out those details, but we all know and agree on the direction that we need to go im with 7 news here in boston the revised version of the Health Care Bill would still leave 22 million uninsured do you still think the senate should move forward, at least with repealing i do. I think thats kind of a bogus number what they are basically saying is people will choose to buy something that they dont want to buy if they dont have to buy it the government is forcing people to buy something they dont want so if we stop forcing theme dont want to do they wont do it the other thing it says is it if states wont expand medicare in the future then that person in the state that had gone on medicaid wont go on it so i really dont see that as a credible number. More importantly what were seeing, this is the senate bill as well, were saying let people buy the Health Insurance that they want to buy and lets make sure that we put support on risk pools to support catastrophic illnesses just like maine does very successfully, like wisconsin used to do, and we believe by directing support that person with a catastrophic illness then the rest of the insurance pools dont have to cover the costs then you dramatically lower the Insurance Markets and premiums for everybody else and give everybody a tax credit to go buy that Health Insurance plan we think its a smarter way to go we think it will stop this plan from collapsing, and lets never forget the fact that the Affordable Care act isnt affordable the premiums have doubled. Plans are leaving left and right. Four out of ten counties in america, i have one Health Insurer left in their marketplaces dozens of counties in america have zero Health Insurers left there are none left so thats not even a choice. Thats not a monopoly so this law is collapsing under its own weight so we have to step in front of this collapse and bring stability to the marketplace so that people can actually get affordable Health Insurance, and so that is what were trying to do here, and i really dont think that statistic is a valid one. Yeah just in general, on the topic at hand which is tax reform. Youre here in massachusetts, its a very blue state why do you think the republican message will resonate here i think the republican message will resonate because we want american businesses in every state therefore country to succeed and hire more people we want wages to go up we want the economy to grow faster and we want american businesses to be more competitive. Here is the challenge we have as a country. We live in a 21st Century Global economy, but we had had the worst tax system in the industrialized world that. Matters to massachusetts and wisconsin the same, and so we fundamentally believe by cleaning up our tax code, by making it more competitive, by letting people keeping more of their hardearned dollars we can do more to help people and families and workers but most importantly to help businesses stay in america and hire people and raise wages. Thats good for everybody, red state, blue states, everybody in between. We think its good for all americans. Yeah, in the back. You say that you want to get rates as low as possible how realistic is a 20 corporate rate its very realistic thats the plan we put in the house and there are other ways of getting to that rate than the house blueprint plan and thats what everybody is looking at right now. Our tax writers are running their numbers to look at how can we get these rates as low as possible, and there are various ways of doing it thats the kind of analysis that the taxwriting committee, ways and means and finance are doing so i believe we can get our rates down low we have to make the decisions on the tradeoffs that get there and thats made by the tax committee, ways and means and finance committee. The house voted to give the president the authority he wants to penalize sanctuary cities like lawrence. Did that come up in your discussion with the mayor of lawrence, and if so, can you give any assurance this did not come up with our discussion the mayor got called off because i believe theres a fire were live on tv he got called to be mayor so he had to go do his job so we didnt have a very long conversation other than talk about jobs and Economic Growth and thats the kind of productive conversation i had with the mayor as far as on the legislation we passed in the house, we think its good legislation, important legislation because we want to make sure that were enforcing the laws well break away from that. We get the sense of that there as they begin the process of writing legislation for tax reform thats been talked about forever, and as you heard speaker ryan say, hes more confident about this piece of legislation than he has been more some of the other big ones that have come and gone, most notably health care that they are still wrong lick on. Success begets success and failing that with the Health Care Bill, see if he can do it on tax. Meantime, President Trump announced this new pharmaceutical Glass Initiative earlier this hour that is going to spur manufacturing and job growth here in the United States thats the idea behind this. The initiative is a collaboration between the pharmaceutical giants nec road pfizer and glassmaker corning they will introduce the Glass Packaging to medical products like vials and heres the president speaking about that just moments ago. Merck, pfizer and corning, these three companies are announcing that pharmaceutical Glass Packaging will now be made in america thats a big step. Thats a big statement im very proud of that thank you very much, by the way. And joining us now in a first on cnbc interview is wendall weeks. Hes the chairman and ceo of corning. Thank you for joining us welcome. Thank you i mean, i kind of want to talk to you by the iphone 8 and gorilla glass but we should stay on topic how significant is this news this is a pretty Significant Initiative from the white house. How did you become involved . Weve been involved in a collaboration with merck rand pfizer for a number of years to dramatically improve pharmaceutical packaging and what weve invented is a product called valor glass, and it is a substantial improvement in quality and in manufacturing, and what it does is it makes patients safer, and it helps improve pharmaceutical manufacturing, and so what were announcing is were investing immediately half a billion dollars in creating 1,000 new american jobs, and this is just part one of a plan to invest 4 billion and create 4,000 hightech jobs right here in the u. S. If the government hadnt been involved in this process, mr. Weeks, where would this glass have been produced where would it have been produced, overseas at a cheaper rate necessarily well, we probably would have taken a little more balanced approach, and you cant reindustrialize a major industry like this without touching the government at every level. We need our product to be approved by the fda. We node our process to be approved by the epa, and then we need to work with governance both at states and international and national to make sure were globally competitive thats the help that the office of American Innovation brought to us. And that being are you getting tax breaks is there some form of remuneration to corning to give you the incentive to produce it here in the United States . Not at all by the federal government what the office of American Innovation is doing is helping us make sure that in all the different spots we touch the government we help streamline approvals and to line up the economic priorities and have the federal government work with states to make sure that we can put together the overall most compelling manufacturing platform. So, mr. Weeks, how many screens are you making for the iphone 8 i do not speak at all about what goes on with apple. Are you guys involved with the screen that they need that you need to touch with your finger because you cant use the home button anymore. Is that part of your technology. I do not speak at all about what we do with apple. Is it possible for apple to manufacture these phones made in america . Well, as i just said, people tell me their secrets because i keep their secrets. Let me ask you one more question about a different field then speaking generally. You guys have done an acquisition for Fiber Optics Communications technology and i think the 4g rollout will be a huge deal and verizon and the other telcos are spending like mad. Are we looking at sort of the late 90s bubble in this all over again, or how would you describe the spending and investment thats taking place for the next generation of wireless well, youre right to note to significant investment that was also a first on cnbc with verizon and corning announced a brand new fiberoptic facility to support their 5g rollout i think its fundamentally different than the 90s. Youre seeing big established players put in place jennings Generation Technology to help us all improve wireless technology, bandwidth access, wire line, so its all very compelling wendel weeks, ceo of corning. Thank you. Thank you so much. Appreciate it come book when you and tim cook can join us and talk about the other thing of which you do not speak. Youve got a deal. Thanks for joining us. Six minutes left in the trading session. The dow is down 17 points but youve got the nasdaq, s p and russell in record territory. Countdown coming up. Stay with us. A used car, upbeat dance music dance music abruptly stopping dance music starting then stopping music stops bell rings welcome back markets all but the dow in positive territory and the s p looks like its tipping lower, but if the nasdaq does close higher its up right now, tenth straight for the session and for the tenth straight session the last time that happened was in 2015. Bertha coombs it is there with more bertha reporter its been touch and go on the win streak, kelly, but the nasdaq, russell 2000 and nasdaq 100 hitting fresh record highs. Apple still 4 its april historic high and has been up nine Straight Days but it looks like its winning streak will end today. The two big movers along with apple on this streak have been amazon and microsoft, both of them hitting historic highs today. Amazon slipping, but youve got microsoft here up ahead of its earnings this afternoon, and i would be remiss if i didnt mention biotech really providing strength with kite pharma hitting a high on a positive cancer study. So youve heard the nasdaq, the russell and the s p all record territory today the dow not so much. Take it back the s p is now negative as we head towards the close, but the dow is down 20 points here in the last moments euro continues that strength against the dollar after the ecb meeting again this morning with mario draghi talking growth. The euro is just continuing to exert that strength here and sears one of the big gainers here as we mentioned as they announced that they are going to be selling some of their kenmore smart appliances on amazon that stock was up 20 at one time a little profittaking there and then these other stocks which went lower home depot is actually the drag on the dow today, but you had others like best buy and whirlpool that were moving lower as well. Bob pisani we get more earnings tonight this time its microsoft, ebay, visa and capital one. I just want to point out the transports are really hurting again. Yes. Did you see what the ceo of csx said fossil fuels are dead. Boy, did that get a lot of comments basically implying were not going to invest a lot of Capital Spending and chipping coal around the country and fossil fuels are dead. Thats one of the moments like the volvo comments, were going to be in electric cars that may be a real pivotal point. C. H. Robinson kind of missed, Union Pacific talked about tough pricing in the coal business and transports are having a tough day for the second day in a row. The dow down 21 points on the close. Stay tuned for the earnings from microsoft, ebay, visa and capital one and the second hour of closing bell with kelly evans and company. See you tomorrow, kell thank you, bill welcome to closing bell, everybody. Im kelly evans. Looks liky with a couple record more highs on wall street today. See how things shake out because the s p 500 is right on the line the dow though is dropping 20 so no record high there for the blue chips the s p, as mentioned, sitting there about 2473 now the nasdaq certainly does look like its closing higher with a record of 6390 and same for the russell 2000 at 1442 today. Remember, all four of these averages closed at records yesterday. The earnings will be fast and furious this hour and the earnings contributed to some of the action we saw today, of course josh lipton is covering microsoft results forus when they come in joining me on the panel, senior markets commentator Michael Santoli with denis berman who is financial editor at wall street journal. Welcome to everybody. Mike, we saw a big dip in markets earlier on some of the concerns and the markets have seemed to largely shook that off. What does that tell you . A high alert for certain headlines. People dont think theres Lasting Impact look around. No real disruption or incremental change to the story so were back to the usual drip. The market is essentially Holding Steady with a slight upward bias. Added more than 10 yeartodate gain, up 30 since the february low, february 2016 low, so youve kind of priced in what were seeing which is decent earnings but still slow and steady on the economic front treasury yields down again today so drift is the mode. A lot of talk this morning about Central Banks maybe taking a step back and kind of evaluating the landscape before doing anything certainly the euro interpreted that, you know, strongly, but said the dollar index is all the way down to almost about 94. We saw bond yields moving lower, too. We had awful tenyear tips action so what do you think of the macro landscape . I think people have been surprised by the weakness in inflation and Federal Reserve banks around the world have been surprised by that so they are getting cautious about increasing rates and selling off Balance Sheets and lets face it, when Interest Rates everybody expected Interest Rates to go up, including me and they dont, that has a disruptive effect on lots of different markets. And are you repositioning it at this point now that you sort of say okay maybe this is a secular flattening yeah, im hanging in there. I still think weve got a lot of people who want inflation to be higher when you have Federal Reserve inflation, they have the real power to make it happen. They can figuratively print money. They can if people want to reduce the value of debts around the world, 19 trillion of debt through inflation, they can, so im still betting on the fed to produce the inflation that they want. Meantime, of course, we have the nasdaq, dennis, which not only was a record today but the tenth close higher in a row. If it goes more than that, the longest stretch since 2009, so a lot of talk about comparing today to the late 198090s . What comparisons would you done . Weve taken a look at results. Basically we found its a large portion of the market cup of the s p, but the percentage of earnings is much higher in 2017 this it was in 1999 so this is a different quality to these companies and to these tech earnings than we saw a generation ago, but we also have to remember that some of these companies, like microsoft, like visa which were reporting today, just a few moments, these companies are at alltime highs and you just have to wonder what does it take to break the streak of these market increases and the market is pricing in a lot of High Performance for these companies . The comparison also drawn, look, microsoft is unwest biggest cap stocks today and its got a 570 billion market and if you adjust the market cap at 772 billion it had a lost decade it was about 60 or 70 times earnings then and about 22 times forward earnings right now i think the fact that the tech sector has now surmount the 99 and 2000 high basically tells you more about how ridiculously high they were in that period. And we shouldnt take it for granted. Look at japan. There are markets who would love to be able to come back even if its 10 or 20 years later. This is not the same tech sector, entirely different facebook was years away from even existing. Almost though the general environment doesnt bear any resemblance. In 99 there were 550 ipos and the average oneday gain was 68 . And this year. It went up 350 . Thats not the market we have today. No. It doesnt waitza, by the way, is just starting to hit the screen there capital one as well. Were getting some of these bottom line numbers out and well wait to get the full numbers before we take a look at those. Its funny if you actually we were talking earlier we had so many, charlie, ipos back in the day and now its a very different landscape so on one hand were lasting that it was not like it was in the late 90s and on the other hand everyone is eager to say its a bubble again. Yeah. Youve got to be careful with these numbers. Apple distorts a lot of these numbers. You throw apple in and all the tech sector is producing earnings you take apple out and weve got a lot of companies trade being at massive valuations. Youre absolutely right, kelly we dont have the ipo bubble but i would argue the s p is being dominated with Big Companies without a lot of earnings. Weve got money flowing into those indexes, and thats inflating those companies again so i think theres a lot of similarities. Let me just throw this at you, charlie, for a second its not just even if you wanted to take the s p and say its all a pass of bubble. Weve seen a synchronous rally here. Right, but those other indexes you just quoted are not trading at the same big multiple the indexes are all significantly lower from a multiple valuation if the u. S. Is the s p that really does look expensive because of these big tech names at the top of it. And real quickly, dennis what, were you going to say . I was going to ask charlie if he believes the market is in a way on autopilot because theres so much passive money moving into a cheap s p, etf, has the market moved from a bubble mentality to a dunderhead mentality. I want to hear, that too, but were starting to get the results. Lets goat visa. Heres that Earnings Report. Reporter yes, we have the numbers from visa and its a beat on both the top and bottom line revenue also higher than the street was expecting at 1. 57 billion versus 4. 4 billion expected, however, the stock is a little bit softer in the after hours, down about half a percent, but keep in mind its still very close to its alltime closing high this stock is up some 25 this year it has been capitalizing on the digitization of payments and moving past its strategy has been to move to partner. A good set of results moving higher in the after hours. Well continue to dig through those numbers. Two other numbers. 28. 5 billion transactions processed and payments volume up 1. 9 trillion kelly . Deer drag, thank you. Michael, we have visa, ebay and microsoft which all report all trading at intraday highs. The nasdaq is, the market is and visa is actually part of this group of Growth Stocks thats in the sweet spots of what people want, big platforms and Global Networks that they effortlessly just grow along with Economic Activity and economic transactions and do i think it has a proper premium, but just what is one quarter going to do to really impress a street thats very much already on board. Amend im not sure, dennis, how much of a competitive threat the likes of paypal are here if you look towards Digital Innovation and if youre ultimately realizes that you kind of have to be on the rails whether its vita, mastercard or papal. And they struck alliances after years of conflict around those areas. Paypal is around 70 billion. Visa led 250 or so and i think michael spoke to an important point. This is secular growth to the Digital Commerce arena and ebay is another beneficiary even with it not being amazon. If youre big enough to be ebay on a global perspective, as secular spending moves to that zone, youre going to profit. Thats a great point. Microsoft earnings are out lets get to josh lipton for those hours. Eps of 98 cents, thats versus expectation of 71 cents revenue clocking in at 24. 7 billion. The street was at 24. 27 billion. Just looking through the release, kelly, commercial cloud, annual run rate exceeding 18. 9 billion. Looking through the segments, revenue and productivity and businesses processes including the office franchise, that increased 21 to 8. 4 billion thats basically in line with what the street was looking for. Revenue and intelligent cloud that increased 11 to 7. 4 billion. Within that segment they say azure Revenue Growth 97 finally revenue and more personal computing that decreased 2 to 8. 8 billion. Looks like windows revenue from pcmakers, that increased 1 and surface revenue decreasing at 2 kelly, back to you. Wow josh, thank you. The microsoft shares up 1 to 2 charlie, azure is growing and doubling its revenue on the year you know, thats the kind of growth people are willing to pay up for i guess. Yes lets talk about microsoft for a second because you and i have talked about it a lot. I bought it in 2010 at a pe of 11 after it had gone nowhere for ten years. That multiple went from 66 in 11 to 2000 to 11 in 2010. Now its back to 21 is so its in favor it Everybody Loves it today, but a lot of these these trends are not necessarily going to be long term. Microsoft earns a lot of money, apple earns a lot of money but the s p is where it is because a lot of companies that dont make a lot of money. Dennis, would you agree with that i want to know more about that which companies are those, charlie . Tell us . You go through the list that the netflix of the world are not making this kind of money. Amazon is not making that kind of money even google is not making that kind of money, so of the top five companies, there are three that are not producing the kind of revenue that you can talk about at a profit, that you can talk about at an apple or a microsoft. All right so sounds like youre aseller of your microsoft shares. I did sell for full disclosure we sold them all last quarter so weve owned them for almost 7 years and we think right now were getting to the top. Im wondering, guys dennis, if microsoft is growing its azure Cloud Business, basically 100 year over year and has a 21 multiple, is that undervalued . Doesnt sound and theres an assure dollar and aws puts a lot of pressure for an azure dollar for basically the embedded monopoly of the embedded dollar. Mike aol, what do you think sounds about right. Its right in the zone. If you look at it on a Free Cash Flow basis, stocks are being priced by the market that way. 20 times Free Cash Flow and microsoft still produces a tremendous amount. If you look at the likes of amazon, 3. 5 Free Cash Flow and not to get caught up in the numbers and still trades at a discount to thevery most favored expensive stocks like amazon and even at a discount to alphabet for the record, alphabet will make 30 billion net income. Thats not a bad number. Thats not enough for charlie. We had a number that beat by 10 . The numbers sound spectacular. The market is up 1 in the aftermarket and that gives you a sense for how high the expectations are for this stock. Charlie, if that were an ipo it would be the hottest thing on the block. For a company thats 31. No wonder everybody is pushing the legacy business to get on this train fast because these are the only companies. 4 is, 1976 it was founded 41, even more impressive. Ive got a question for charlie. Seeing these numbers, what does that do to your impression of ibm . Is this a company that needs to split up per se . Probably yes, but let me make that compare soviet republic i agree with that comparison exactly. In 2010 when microsoft was trading at 11 times forward earnings, people were talking about it as a dead company and the sentiment thats changed, not the profitability, not the growth rate. But ibm we think in the Fourth Quarter is going to break the negative 21quarter revenue streak and were going to get a rerate. Its not going to trade at 21 times earnings but the current sub 10 is going to become 11 and 12. They will be able to pull off a transformation similar to microsoft and adobe. Not that strong. Well go from negative Revenue Growth they are taking their revenues to the cloud they are doing less onetime sales of on premises more software and service that has accounting implications and by the Fourth Quarter thats going to be lapping, and were going to state think in the Fourth Quarter to get our first positive Revenue Growth and the stock will trade more appropriately. Capital one earnings are out. Well see if theres any uber disruption there. Its a beat from capital one. Were looking at secondquarter earnings on 1. 24 a gap which includes two cents of acquisitionrelated costs. Revenue of 6. 7 billion which also came in higher than what wall street was anticipating a couple other numbers to keep in account, total net revenue increasing 3 and total noninterest expense krein esed to 1. 4 billion and provisions has always been a hot topic, credit losses decreasing to 10. 8 billion. Ahead of this report Morgan Stanley issuing a report warning that secondquarter earnings from capital one could be impacted by hurt of losses around loans the operators pointing out the taxi medallion loans are following because of the disruption from uber and other ridesharing services. Well see if that comes up during the Conference Call remember, the fed did not give capital one a clean pass on its stress test asking capital one to resubmit its plan later this year, but the stock right now is up by around 4 or more here in extended trade. Seema, thank you. Charlie, maybe thats why were seeing the pop after hours and some relief after the concerns. Could be, absolutely. I think that is a situation in which the expectations were a lot lower, and so that is what youve got to look for here. Youve got to look for situations in which the expectations are reason. Weve got a lot of stocks in which the expectations are very high microsoft would be in that category, but there are still some names where people are worried and where you can have a stock perform pretty well with just a reasonable result. Michael, anything you would add there . No, thats been a laggard certainly in the financials and the taxi thing is fun and interesting and at the margin makes a difference but mostly at the state of consumer finances, Household Finances which are okay but maybe they have kind of been as god as they are going to get. Well take a quick break and come back with the ebay numbers. Thanks for joining us appreciate it. Thank you. Most is moving higher on its earnings up next well break down the results of the microsoft shareholder and a tech critic. Also, more from the tech sector, its wearables. Remember, they were all the rage but theres a big tech giant bailing after the investment got that story for you youre watching cnbc, first in business worldwide hey youve gotta see this. Cmon. No. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Welcome back ebay earnings just hit and aditi roy has the results for us. Reporter we should add that the shares are down 4. 79 which could be driven by a big miss on gmv by the company the actual number for gmv came in for 20. 5 billion versus streets estimates of 22. 4 million. Thats a big miss there. Top revenues are coming in at 2. 3 billion, 2. 33 billion, a slight beat there of estimates of 2. 3 billion on the bottom line, estimates are worth 45 cents the numbers are coming in in line, 45 cents as well guidance, a split decision for the q3 guidance on eps, the numbers came in slightly below on revenues. They came in slightly above, but, again, that gmv number is a big miss there the number of active buyers is another key metric analysts have been looking at and that also slightly beat estimates. The shares are down 4. 3 , its been a banner year for ebay shares which are up about 25 year to date and has been trading near record highs. Still, a lot of competition out thereto with amazon and walmart and on the call were looking to hear some updates on the companys structured data plan its part of an overall Customer Experience plan that they are hoping to boost to attract new customers and also retain existing ones. They are also focusing on its mobile platform. Were also looking to hear anything on its Advertising Campaign which they launched in june kelly, back to you. Aditi, thank you. If its grows merchandise volume which is how much something passes through ebay, the number we focus a lot for alibaba, for example, which has been gangbusters, if that missed by 1 billion, it is that just a hiccup or something more indicative. Its slightly soft. Obviously its not keeping pace with the overall market for ecommerce, right. Thats growing at a 10 click for Something Like that. It looks like a bit of a short fall there they do report, havent looked a it reported active buyers thats a number that shows you the size of the sort of people who are participating on the network. I just think the stock wasnt priced for a slightly soft result up 25 year to date. Its not a fast grower were talking about high single percentage Earnings Growth this career to next it has to be adjusted based on how good the stock has done this year. The stock is down 5 after hours. Well keep an eye on that as we head into the call microsoft out with its Earnings Report check out how that stock is moving hanging on to a gain of 1 joining us with more reaction is jason moore from albion and jason, ill put this out for you, but michael, ill have you weigh in on this first the esb was so big that it looks like the last time they beat by that amount, 38 , mr. Santoli, was in 2003. Yeah. So i i mean i can that the headline earnings per share number is necessarily apples to apples with the published consensus it might be a slightly smaller beat. Yeah. I have to look at the details. But, yes, its still impressive enough and i think as charlie was saying, if it were truly an 18 , 17 beat youd see more than 1 pop in the stock. True. What the would you add to that the whisper number was around 75 so the bar was a touch higher than the sell side and spectacular beat 38 against a sell side consensus and low 30s against the whisper number so High Expectations going in and they cleared that bar, you know, in an exceeding way one thing that i would point out about the after hours, were still waiting for guidance are and were going to get revenue guidance on the call here in 15 minutes and i think, you know, traders ahead of that have are a little bit hesitant to see and then well see that ahead in the stock. Also might have been unusually tax rates to help them in the quarter and something to also keep an eye on. And they are reporting in a way other Tech Companies report which is more of taking into account things like stock compensation and other costs as well i was actually blown away by the azure Cloud Business had doubled. I think that was huge for them i still have a lot of question marks though their Office Business was a nice gain, 20 or so, but Going Forward, i think they are going its going to be heard, right . Because google has they have been actively pitching similar big fortune 500 clients that use their workplace products that will be a factor, facebook as well and they had a restructuring charge. With the sales reorganize. Reorganization on the sales team because they need to transfer from being an enterprisefocus enterprisefocused business to a cloudfocused business. Jason, are you worried about them losing share as they grow to those competitors you know, thats something were paying attention to because obviously we want to see them continue to gain share and see pricing Holding Steady and with aws being the number one player in the market there are concerns about pricing and understandably so and what we need to remember, if we look out the next four or five years, public cloud is expected to triple in terms of spending, so theres a lot of head room for all of these participants to grow, and i think microsoft has some really good established enterprise relationships where they can transition folks along the way in a way that makes shareholders happy so were looking at that the as being the number one key indicator of how they are doing. And im also curious, ed, i think im seeing headlines about amazon and trying to make inroads into the onsite piece of the business is that where microsoft is doing well right now or is that kind of a lot of public Cloud Business still a lot of public Cloud Business for them and thats a good example hand looking at amazon is a big competitor of aws, whats interesting about the way cloud works, its not just server space, its not just that anymore theres a whole lot of applications build into the Cloud Service especially as a startup or Enterprise Business you kind of get locked into on some level or is a selling point that you sort of want to hold on to Going Forward thats why the sales component is so key. Otherwise its a commodity item. You want to build in the specialize service that gives it a higher premium. Some analysts recently had also said that they thought that aws was going to have a bit of a hiccup in the quarter now, again, i dont have it in front of me. I cant tell you whats going on there, but maybe that speaks to why this azure number looks especially strong. Looks especially strong, and i think thats where the competition is, right . Its not just selling to more customers. Have you to build in a software layer, Machine Learning layer for a lot of these things and they are all fighting for the Technology Component as well as the actual server space. Jason, you know what i keep forgetting about is linkedin, not because of it as a product but because of it being part of microsoft. I cant seem to get that in my head how important has that acquisition ben, do you think, to microsoft thats a great question were in such early stages with that acquisition that i think, you know, your curiosity around that is in the same place we are and a lot of investors how exactly are they going to tuck that into the microsoft suite and make that a profitable business or make that a worthwhile business as far as something that will add value to the overall platform the stock is not trading on linked in. An option on growth five years down the road that people are looking at its not in any way part of valuation. I do want to go back to the point someone made about azure growing 97 in the most recent quarter. Not so much that they are taking share from i mean, i think they are growing share, but its not so much that its amazon versus microsoft. Right. Its again the idea that theres so much business and so much of the workload is going to the cloud that all of the established quality players in the cloud are really picking up a new business and theres a long runway for that to continue so were excited about that. At least there should be. Weve got to go, ed lee and jason ware talking microsoft shares up 1 we have breaking news on o. J. Simpsons parole conditions. Our jane wells has been following this for us. Jane reporter hi, kelly, just released o. J. Simpson will be eligible for parole when hes eligible, the first day that that happens is october 1st, so we could be back here in a few months. Under the conditions of his parole it says that he cannot change residences or leave the state without first getting permission as we have been reporting he is wanting to move to florida he has to give permission for that and that permission not yet granted and saying hell be allowed to consume alcohol but not in excess. He did say he was drinking when the crime in las vegas was committed, and that was part of his parole assessment. At the same time, there are these other conditions that are sort of typical. You shall not associated with convicted felons, persons engaging in crimes or anyone your parole overs says you shouldnt be around. Shouldnt use Illegal Drugs or even have prescription drugs unless first prescribed by a doctor also Recreational Marijuana is a nono, even hope it it is legal now in nevada. O. J. Simpson on parole will be allowed to have medical marijuana as long as he follows the rules while hes in the state but no recreational pot and perhaps most interesting you shall not possess, have access to or have under your control any type of weapon unless the item is used in conjunction with the duties of legitimate employment and has been approved in writing by the division of parole and prisons so no weapons. If he stays here presumably no weapons if he goes anywhere unless he has a job where he needs it and they have approved t. Kelly. Jane, i had a question about parole terms when it comes to somebody like him who might turn up in the media, for example, getting income from that and using his name, you know, as a business and to benefit. Is the there any precedent for parole boards trying to deal with those terms or setting any kind terms around, that or is it basically an anything goes kind of environment reporter well, when you go on parole, the board wants you to have a job. The board wants you to make a living the problem in o. J. Simpsons case is any money he makes, the goldman and brown families can try and go after as part of the 33. 5 million judgment in the civil trial over the death that he was found responsible for of ron goldman and nicole brown simpson. By the way, that 33. 5 million is worth a lot more now that aside, he also has a pension he will be bringing in that pension is worth at least 4 million at last word he was bringing in 25,000 a month on the pension that, the goldmans and the browns cannot go to. Thats protected from any civil judgment and he can live on that. Im just wondering, jane, just for thesake of argument, you know, your netflix, youre one of these you know, we talk about the startups all the time desperate for content you write him a 100 million check because people will tune into the next whoever o. J. Simpson thing is he pays off the family, he gets to keep i mean, is that, you know, crazy . Reporter kelly, he tried that after he was found not guilty, and and he had a book he tried to do a special these sorts of things. After the civil trial, the goldman and brown families were allowed to go after that money, so if netflix comes to him and wants to pay him 5 million which, by the way, i dont think thats going to happen, they are not going to be able to pay o. J. Simpson directly 5 million. If if he forms some sort of shell, tries to hide the money, im not suggesting he would, it will be up to the brown and goldman families to go after him. That would be breaking the law and potentially violating the parole hand that could potentially send him back here. Thats a more complicated parole that be most. Thanks so much for joining us. Jane wells covering it all for us today now its time for a cnbc news updepot with sue herera. Hi again, sue. Hi, kelly President Trump traveling to the pentagon for briefings from his top military advisers. The status of u. S. Forces around the world, including afghanistan the prime focus of that business he claimed the overall effort against isis is going well Washington Police say they have received reports that two of the six burundi teen members gone missing after an International Robotics have been seen crossing into the border in canada the whereabouts of the other members is known but foul play is not suspected. Construction work is under way in mosul aimed at repairing and rebuilding the city after nearly a decade a year of fighting between the iraqi army and isis thousands have been left homeless and schools have been flattened and highways turned into dirt roads. Overseas, Prince William and wife kate visiting heidelberg, germany as part of their goodwill tour. They toured a Cancer Research laboratory before returning to the Market Square where they learned how to make pretzels youre up to date. Thats the update this hour. Kelly, back downtown to you. The life of the royals. Sue, thank you very much. You got it. Some centenarians may have one reason not to be happy to mark their 100th birthday. Thats next in todays fast take plus, why intel is getting out of wearables tupd this give apple a leg inhe space thats still to come on closing bell. You always pay 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 nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back time for the sniffles edition of fast take. Ill try not to cough anything up. Well begin with goldman partners cashing out owning less than 5 of what they took public decades ago. They are on the brink of being eclipsed by morgan in terms of market cap, too, michael. Its three separate things but all of them speak to kind of the passing of an era when it comes to goldman obviously when it comes to the partners, they have reduced down their stakes they obviously have not been True Partners for almost 20 years but basically got diluted outed of it. Now they have to no longer report their holdings as a block. I think a lot of this is cyclical and the pendulum is trading back. Thats what they are saying paypal is partnering with jpmorgan to link with chay pace and redeem chase reward points letting them work with merchants that accept paypal thats a pretty neat wrinkle. It the does show what some have been saying about the banks for a long time which would be very, very hard to truly displace them when it comes to daytoday transactions in general. Not that there arent other options outside of the Banking System but they remain this repository of all the deposits and flow and they can kind of incorporate technology and not be supplanted. And if you can use your points at more places, the next raft of stories about new currencies and who is the fed of the citi points. The citi points, let alone the cryptos. And like for paypal, if you cant beat them, join them. Next it turns out permanent Life Insurance isnt so permanent. A lot of policies have termination agencies of 121 years old and older policies huge age 100 to termination and pay out savings. The problem, of course, lots of 100yearolds are now losing their coverage. I guess in the category of a pretty good problem to have, you know were sorry youre still alive is kind of the message here. Look, nobody im sure would really have penetrated the fine print back when you bought this policy who knows how many decades ago. Well, the interesting thing is that back in the 90s they need to be saying by the way, julie julia hurricane hawkins is emblematic of this. 101 years old and broke the record for the 100meter dash. If youre turning 100 now and had this Life Insurance policy on the books now, chances are you bought it when you were still working as opposed to when you were 70. I think nevertheless, if the one thing youre counting on which is the the coverage for when youre older. Death benefit. Exactly then suddenly they are paying it out. It gets complicated. Finally, more amazon news, of course they launched a new photo app called spark but the twist is you can order the stuff off of it i actually think this could be a pinterest killer i wonder about it. The question is how much time is somebody going to spend on his or her amazon app . Are you going to brows or just kind of idly run through it . I think spark might be a separate app but for pinterest is plenty of time. On pinterest sometimes that is a cute thing and i cant really do that oneclick execution and with amazon you can. So in that case maybe it does displace pinterest a little bit. Again, i still think its a functional thing and its increment a. M. Thats what you said yesterday. Its not an instagram. Its Montgomery Ward all over again. Its a catalog. Show you some pictures and you can buy it. And the news that sears is selling kenmore on it. Amazon is the new sears, right . 1,000 percent. Became a mail order and became more physical. Lets get to aditi roy. We had previously reported that the company missed on gross merchandise volume but in actuality it beat on that metrics. Lets go over the numbers once again. Analyst estimate for the gross merchandise volume were for 21. 4 billion, and the Company Reported 21. 5 billion, so its actually a beat there on that metrix still, the stock is going down about 5 , actually about 4 at the moment and weve been trying to date through this report to see what could be driving that the only slight miss here that we detected is the q3 s3guidance and that came in below expectations and well be on the call to dig deeper. Back to you guys. Thought it made more sense missing on gmd, growth merchandise volume, shares still down 4. 5 . Meantime, if a company lays off 80 of a division its a good bet its getting out of that business, and thats the situation that chipmaker intel finds itself in after struggling with wearables up next, the inside story behind the shutdown a used car, to keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Welcome back a couple more for the record books. With small gains to the nasdaq, up five points and the russell 2000 up half a point those are new high water marks the dow down 29 and s p slightly negative and this after they all closed at record highs yesterday. By the way, ten straight now for the nasdaq, first time in a couple of years. Checking on some names moving on earnings after hours. We have microsoft, visa, call at all one and ebay microsoft, visa, both holding on to gains about 1. 5 . Capital one up nearly 1. 5 and ebay down 3 intel getting out of wearables sources telling cnbc the company has eliminated its entire Wearables Division in order to focus more on augmented reality. Back in january 2014 they made a big push at the Consumer Electronics show showing off a head set and head watch. The same year paid 100 million for basis and in april the cap was already late to the company. He said, quote, we are catching up i should just start out admitting that chrissy farr from cnbc joins us and broke the story. Why have they decided that now is the time to throw in the towel . Great question. Weve seen over the past few years intel starting to shy away from wearables after making a huge splash back in 2014 this is a company that missed out on the mobile revolution and for them it was all about wearables and then we started to see some signs of discord and distress over in that unit the basis just did not perform as well as expected and now were hearing from sources out in San Francisco i have to interrupt you for an odd reason but it has to do, of course, with o. J. Simpson who is leaving or the family i believe is leaving after he has just been granted parole a bit of a celebratory moment for the simpsons after his nine years in prison, and hell now be looking to relocate to florida. Jane wells is on site. Jane kelly, you see walking over now to a podium to address the media, arnelle simpson, his oldest child and daughter, 48 in the blue hat and his sister Shirley Baker wearing the black with the hat and as they were auk being out of the area where they were today with o. J. Simpson, a cheer went up from the yard from the inmates, and arnelle pumped her fists it was an unusual site we werent sure if o. J. Was in the yard with them but a cheer went up and they have come out and uncharacteristically they are addressing the media this is very, very rare. We havent seen this perhaps since after the 1995 not guilty verdict, so thats the latest here back to you. All right jane, thank you. Continue to keep us posted thats jane wells in nevada. Christina, back to you i wasnt there in the 90s i dont think you were either, but here we are. I would love to know what wearable hes wearing. Probably an ankle bracelet. Anyhow, when it comes to intel, they probably did have a couple of interesting items, lets say. They had a charging bull that was kind of emblematic of its internet of things and the basic smartwatch and the jarvis headset. Why havent these gotten any traction the wearable market in general which was once hyped by analysts, the growth has been slowing, and one of the big problems is just that these wearables are not delivering the right kinds of Health Information that is keeping people engaged kelly, youve probably thrown at least one wearable in a drawer, i know i have so intel has exited this area, and they are going to leave it wide open for apple and fitbit who have seen more success in this area. Is there a particular type of Health Information or functionality that anyone is attempting to introduce that might make it take off and that might enlarge the market more than it is right now yeah, sure, and i i agree with you i think that there needs to be another type of Health Information. The one that ive been fixated on is medical wearables and we didnt have some scoops over in San Francisco over what apple has been doing in this area and thats to bring glucose sensing to the new apple watch were expecting to see that at some point and thats a way to tap into a whole new market which would be people with diabetes and other kinds of chronic conditions where they need to track their blood sugar. Thats just one example to throw out there, a potential route that we could see wearables tapping into and thats the kind of medical clinical use cases. Intel seeing this moving on to focus on augmented reality. Do you think it has to take over from the wearables effort or is this a new effort . Thats a hard up. My guess is they would have to hire a new group of people for this augmented reality push because its very different from some of the health and fitness tracking they were trying to do. Some of the folks they brought over from the basis team were top rate on things like heart rate but they are not going to need that anymore if they are pushing into these new areas like ar, one of the hot buzzwords at the moment, as you know. Yeah, right, and even as you said is apple doubling down on that very same thing chrissy, great story thanks for joining us. Thanks so much for having me on. We have a news alert on square now seema mody, whats happening here square has named shake shack Ceo Randy Garutti to its board of directors the press release says that randy has successfully red shake shack through significant expansion and has daytoday operational experience and scaling a business will be an asset to both square and our sellers. Garutti will be joining the likes of larry meeker and summers among others as part of squares board back to you. Seema, thank you. House Speaker Paul Ryan talking tax reform at a new Balance Factory earlier today. The latest on what he had to say next [music playing] across the country, we walk. Carrying flowers that signify why we want to end alzheimers disease. But what if, one day, there was a white flower for alzheimers first survivor . What if there were millions of them . Join us for the Alzheimers Association walk to end alzheimers. Register today at alz. Org walk. baby crying fly me to the moon elegant music and let me play bell rings welcome back House Speaker paul ryan today was touring a new balance shoe factory in massachusetts youre out of the factory now. He was asked afterwards about tax reform what did he have to say . He was taking the tax reform case on the road this is the factory where he was speaking its owned by new balance where they make sneakers and he called tax reform a must win for republicans and he pushed back when i asked him whether or not a 20 corporate rate is still realistic. Its very realistic thats the plan we put in the house and there are other ways of getting to that rate than just the house blueprint plan. Thats what everybodys looking at now our tax writers are running their numbers to look at how we can get these rates as low as possible and there are various ways of doipg that the new balance ceo told me that he needs to see a solid ten percentage point rate reduction in order to see a rate reduction. Theyre also privately held. He wants to make sure theres relief for pass through businesses as well as public companies. If you just deal with c corps, you make us uncompetitive. We have different tax bases in the same category. I dont think thats practical so i think theyre going to have deal with both business structures to make this work today was about republicans trying to build that grass roots momentum behind tax reform guys, this is something they did not do with the Health Care Bill and they dont want to make that mistake again. I dont know about how, but i have a hard time thinking about tax reform because it feels Like Health Care issue is so unresolved and i guess they can move on and start to move on after you get budget for the coming year. You have to fund the government again, get by the debt ceiling if theyre crafting it for a september introduction for the actual language in the bill, in theory, it leaves you a few months to get something done, but again, its getting down scaled it was interesting to hear the remarks about ten Percentage Points would make a big difference for the s p 500, the effective rate is 26, 27 its not that big a cut. Microsoft and ibm way below. Thank you. Traveling with paul ryan in massachusetts. Up next, well tell you why athee na health is is me an0 ft hours well be right back. Theyre experts in things you havent 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. 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. And at 4. 95, you can trade with a clear advantage. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Welcome back more earnings to get to here whats happening. Take a look at athena health. 51 cents adjusted. The street was looking for 39 cents. Revenue, too, coming in well above expectations around 301. 1 million. The stock up about 8 here lets talk shoes because shares of sketchers moving lower after earnings michigsseded estimates 38 clents. Revenue coming in hire at is. 03 billion versus the estimate of 967 million. Gross margins, 47. 6 for the Second Quarter outlook, below consensus stock down about 2 here michael, does that make elliots job easier or harder . You know, in theory, it makes it slightly harder to affect more change. Its a jumpy stock a Controversial Company in terms of accounting and whether the size of the end markets are are, yes, so 8 rally there. Want to check on the other movers after hours were approach iing for ebay, va and capital one. Microsofts call doesnt kick off until 5 30 the others are rallying slightly, then tomorrow morning, we have General Electric reporting, ge, theyve trailed the s p by 26 Percentage Points. The question is whether John Flannery tomorrow abandons the 2 target for 2018 earnings. Exactly you almost feel as if the street would take kindly to that type of a move or clear the decks wee going to start with a blank sheet of paper lot of focus is also going to be on the trends with ge eerks cash flow because that was a huge shortfall. Got hit with concerned about the financial businesses but really, a wide range of potential outcomes here with a new ceo. What tone is is he going to want to strike. I think youre right. It would be taken positively youll get a new person in, potentially or otherwise, kind of resetting expectations and saying whats achievablchievabl. So it was interesting you help him set the target, there could be more pressure if it looks like they have a lower trajectory and maybe if theres color, heres how we intend to get there. It doesnt have to be just a trust us, well get to the target or eliminating it all together ge is the biggest drag on s p 500 earnings 50 drop last year, they booked the appliance business sale, so well look to that one in the morning. Meantime, you feel better i promised to. Well see you tomorrow that does it for closing bell. Fast money begins now. Fast money starts right now. Live from the Nasdaq Market side overlooking times square im melissa lee. Your traders on the desk are tonight on fast, the commodities king, dennis gartman, is here with the one chart he says you need to see to make money in this market. Plus, the s p 500 hovering at record highs, but stocks are in bear market territory. The names and which ones the traders are buying when we go bargain hunting and check out shares of microsoft. Jumping to a fresh all time high in the after hours session. Weve got full