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tv   Closing Bell  CNBC  February 2, 2017 3:00pm-5:01pm EST

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into my face that the cavaliers crushed in basketball. steph curry, watch this. that's his dad. pulls up, banks it in! >> the best basketball player to ever come from virginia tech. >> thanks for watching "power lunch." >> "closing bell" right now. welcome to the "closing bell." i'm sara eisen in today for kelly evans here at the new york stock exchange. >> and that would make me bill griffeth. we have a lot to cover. earnings coming all over the place. amazon will be focusing on that, but we will also be talking about donald trump's day in washington. he met with various business leaders, this time executives from harley-davidson to talk about manufacturing, but we have details on why harley may actually have a unique perspective on immigration and h
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1 b visas. it's one of the great american brands and they pride themselves on making their motorcycles here in the u.s. but there is an immigration angle to the story. >> that story, plus speaking of immigration, president trump's new immigration restrictions could spell trouble for general electric. business implications here, we'll have the reporter who broke that story join us live. >> i have some very pointed questions for that reporter on that story coming up also. >> always a pointed question. >> charles schwab, e. trade, t.d. ameritrade all getting slammed on news that schwab is cutting fees. that man, tim hockey, will be joining us exclusively to talk about that among many other things coming up here. >> you mentioned earnings. we've got a bonanza after the bell. amazon, visa, chipotle and go pro, just a few of the earnings that we will be following for you. we will tell you ahead of time what to expect.
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>> a veritable fire hose. >> let's start with the president's meeting with harley-davidson executives. eamon javers is at the white house. i get to say elan mui, welcome aboard. eamon, tell us what happened today. >> reporter: hi, bill. when executives come through the white house they come through the northwest gate. instead today they allowed the harley-davidson executives to ride their hogs right up the south lawn of the white house. president trump and the vice president mike pence came out to greet those executives, shake hands, take a look at the bikes. they brought them inside the white house for a meeting on substance. in that meeting there was an interesting moment where president trump really used harley-davidson as an allegory talking about trade going back to ronald regan in terms of tariffs that were put in place to benefit harley-davidson. he thinks those were a good idea. here's what he had to say.
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>> you were victims of trading abuse, big trading abuse where they were dumping all sorts of competitors all over the place and ronald regan stepped in and he put out large tariffs and you wouldn't be talking about harley-davidson right now if he didn't do that, but we're going to help you, too. >> reporter: just an interesting little personnel nugget, guys. just a few moments ago i saw dan bartlett walking down the white house driveway. he was a high ranking counselor to president bush back in the early 2000s. i asked him what he's doing here at the white house today. he said, i'm here to visit some old friends. interesting to see if they start to bring in some advice and consent and full-time administration staff here who served in the bush white house. we haven't seen that intensely so far. the trump team is its own team but we're starting to see maybe a little bit of blending if we're not reading too much into that meeting if he's just not simply here to meet with old friends.
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>> you're going to have to stay there 24 hours a day to see who comes in and out. >> reporter: feels like it. >> thank you in washington. >> elan mui joining us now. welcome, elan. >> reporter: thank you. >> you have this new piece on right now, president trump's meeting with harley-davidson could shine light on this corporate immigration issue. tell us this story. it had to do with their i.t. department, right? >> reporter: that's right. harley-davidson is one of the iconic american brands manufactured right here in the u.s.a. what happened was that in 2010 harley-davidson outsourced some of its i.t. functions to an indian company called infocys. some of the people who applied for jobs at that facility said that instead of hiring u.s.
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workers the company was favoring south asian workers who were coming in on h 1 b vees sass. those are used for highly skilled immigrants, people who companies say we can't find these type of workers here in the u.s., that's why we need these people to come in on a highly skilled visa to do that work, but the lawsuit that some employees are now filing against this contractor for harley-davidson says, hey, wait a minute, there were plenty of employees available, many of them were just let go from harley-davidson, why are you bringing in so many workers from overseas in order to fill these roles. >> i think one thing that this shines a light on, ylan, it's not just silicon valley that depends so much on overseas. the rest of the economy is and how widespread is this? >> reporter: this isn't just a silicon valley issue, this is an issue that extends all the way to america's heartland and you
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really see it as donald trump reaches out across the aisles for people who had previously supported the opposite party. many union members are strong proponents of supporting or tightening h1b visa restrictions. that's one area where donald trump is getting a lot of support. >> ylan, good stuff. good to see you. see you around. >> reporter: thank you. >> try the food in the cafeteria. >> she's in washington. >> i know. i'm making a joke here. wall street is split on what the trump administration means to the market. dan loeb in a letter -- investor letter that was recently published saying this environment is undoubtedly better for active investing. jpmorgan turning bearish learning how president trump's global trade policies may have short-term shock to the global economy and particularly those smaller stocks. >> we are getting mixed signals
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to wall street pertaining to the new environment in washington. let's talk about that. joining us, ariel investments, jonathan korpina from meridian export partners and rick santelli checks in from the cme. jonathan, by the way, we should point out this is a very narrowly traded day. the trading range on the dow has been less than 100 points. for the s&p it's been 12 points. going nowhere. let's talk about the higher altitude issue of the overlay of trump policies and the view of wall street which seems to be going in two different directions here. >> right. absolutely. i think we have become so focused on what's coming out of washington, not from the fed side or economic side, more of the political side. we've been so stream lined now to totally take our investment strategies, put them on the sidelines and wait to see what some of these executive orders
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are going to do to our economy and what they're going to do to certain sectors and individual companies that are out there. we've been kind of put in the penalty box, self-imposed, and this market is showing that. we have economic data, headlines coming out from all over the place. earnings report, it seems like nobody wants to do anything today. >> right. >> we're waiting for jobs numbers tomorrow. that's normal but it just seems at this point right now that we're somewhat penalizing ourselves by getting too side tracked to the politics and not really, you know, looking at the fundamentals and the economy as much. >> speaking of which, let's side track for just a moment and head to washington. we have breaking news on deregulation move by congress. john harwood has details. john. >> reporter: bill, as you know, a few days ago president trump signed an executive order accelerating the deregulation process requiring that agencies revoke two regulations for every new one they pass. we have now had the first action by congress in a concrete way on
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the deregulation agenda. the senate has just passed a repeal under the accelerated procedures, called the congressional review act, of what is known as the stream protection rule. the house has previously passed it. this is a regulation requiring coal mine operators to report what was going into streams adjacent to coal mining operations. the coal industry complained that this was a job-killing regulation. of course, environmentalists are in favor of it. it will go to president trump. there are other proposals on deck. we'll be watching those, too. >> all right, john. thank you very much. let's continue our conversation now. charles with ariel investments. they are deregulating, as promised, the trump administration. that was part of the bold thesis. do you like to see these kinds of moves? >> this one is completely
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insignificant. this is not going to move the needle. it's probably a little bit of a favor to west virginia and the coal industry, but the more important regulation changes are going to be for banks, dodd-frank, letting banks and financial institutions decide their own capital structure. obviously what happens in health care. so the one that john just reported on from washington is trivial, but the big changes in regulation are going to have a big impact on a lot of industries. >> there's a disagreement even there. you know, we've talked about this the other day, jim goram at morgan stanley says he doesn't want to see dodd-frank go away, he wants to see changes on the fringes. there are people like jamie dimon who has been called a dodd-frankenstein. >> i'm going to push back on that a little bit. i think both of them would agree that right now the amount of money they're spending for lawyers to comply with all these rules is really hurting them.
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hundreds of millions of dollars of expense. obviously the fines that have come out of washington have been in both of those companies ceo's minds, exorbitant. maybe gorman is saying we don't need to repeal the whole law, dimon is saying repeal the whole law. washington is unifying in saying these regulations have been a big albatross for us. >> rick, how much is the dollar and bond market a leader for what's going on with stocks? we are seeing a continuation of the correlation dollar weaker, bonds and demands. that's the reverse of the trump rally. >> i think that the fact that equities haven't had bigger retracements with the huge moves that we've seen since early november but have movement in a way that does seem to dictate it's losing some steam has put treasuries back in their own hedge mode. i think the dollar index is more
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subservient like the euro and the yen. it doesn't square. inflation in the u.k. and eurozone and even the u.s. whether it's preferred fed measures, how many core cpis, been over 2%, that doesn't really square essentially. i think all roads lead to central banks agai whether it's mr. carney or mr. draghi. they've pinned markets so it's difficult for the short end interest rates to do what they need to do making trading foreign exchange a bit confusing in the process. >> all right. guys, we have to move along. thank you all for your thoughts on today's market action overall such as it is here. >> thank you. >> see you later. >> thanks. >> so we have 48 minutes left in the trading session here. the dow is down 25 points. as i mentioned, we haven't had a very volatile day, but i guarantee you we'll have some fireworks. >> amazon, visa, chipotle and more. plus, charles schwab slashing fees from equities and e trade.
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up next t.d. ameritrade's ceo will tell us if they'll match. will that be good for traders? >> depends on the percentage of revenues they get from the fees. as sara mentioned, a lot of earnings coming after the bell. amazon, chipotle, gopro. >> amgen which i did not mention. >> amgen which is the outlier of that group trading lower. hey, you're watching cnbc first in business worldwide. ov00rs a . maepo ov00rs a .
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shares of merck continue to be on a tear as it has been recently. if you look at all 30 components of the dow jones industrial average, merck is the leader. posting better than expected quarterly domestic sales of its cancer drug keytruda. overall merck's quarterly earnings matched street estimates while revenue missed
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slightly, but it is up more than 3%. >> down market and health care sector down as well. online brokerages getting hit hard after charles schwab said it is reducing trade commissions for standard online equiti equities. >> tomorrow they'll be cut by $2 making it among the lowest among those like fidelity and t.d. ameritrade. let's get out to michael santoli who's with tim hockey, cnbc exclusive. mike, over to you. >> sara, thanks very much. thanks for being with us. >> thanks for having me. >> let's talk about this pricing move by schwab, your biggest competitor. prices have been pretty stable. what does this move mean? is it a new price war? what will be your response? >> well, there's been a lot of discussion around price movement especially as interest rates rise, but let's face it, this price point isn't a new price point. there's precedence in the marketplace and in fact
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scottrade is already at the 7 dk price point. this is clearly a move by schwab to redefine what the value proposition is. it happened today and we'll figure out what we're going to do. >> we're constantly trying to redefine our value proposition. we're all about the client experience and price is part of that. it's not the biggest part. think about the industry, schwab, ourselves, we were all formed in the time when price was a really big factor, going from 3, 4, $500 per trade going down to the price points we're at. now you're in a very, very small tight range for less than the price of a coffee you can make a difference in a trade. it's around the tools, capabilities and experience and all those factors. there are different price points for different combinations of those things. >> bill? >> tim, bill griffeth here. i don't want to belabor this whole thing. we showed a chart that showed the percent of revenue from commissions of your company and your competitors, and by far
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schwab is the lowest. they only take 11% of their revenue from commissions. you're up at 41% right now. so are you going to have to kind of reduce that reliance on commissions and look elsewhere to increase revenue stream? if you do, where is that? >> yeah. so the -- clearly that is the percentages, so we've been on a journey over the last little while to broaden out the revenue streams that would contribute to obviously our bottom line. so we would be taking that into account as we move forward other the next little while. we think there's a very large proportion of factors that our clients take into account. one of the things that we know is the last time there was pricing action in our industry was about seven or eight years ago. our price point was pretty much the same and many others had higher price points. we actually gained share when we -- since that period of time because we know that the tools that our clients love to use
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have, you know, great education, great platforms, trading capabilities, you name it. we know those are all parts of the packages that they consider. >> your stock has done remarkably well since the election over the last 12 months but really picked up since the election of donald trump. can you talk more about what you're seeing. you did see a trump bump in trading but since your last earnings report has that continued and how much new money is coming in? >> yeah, we're still having a good level of trading. it's probably softened a little bit in the new year or since the inauguration anyway, but clearly it's fairly high. so it's been quite good for us. again, right after the election there was some pretty significant moves, sector rotation and otherwise, but there's been enough activity and news coming out of the white house that actually has driven continued high levels of trading. >> some of the things though, tim, that did drive that repositions after the election
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have seemed to have stalled out. interest rates have stopped going up and i wonder if that's one of the reasons the market is taking a harsh view of this pricing action because you can't expect, necessarily assume that rates are going to go up and that will offset any level of commission prices. >> true, but the rate changes we've already had, whether it be the fed fund increase or the overall increase across the curve. it does have an effect on our revenue stream. there's a significant portion of our cash balances that essentially reprice for us. so as a result that's why we had anticipated this type of more competitive pricing action might take place about now. so frankly we're not all that spry. >> tim, we'll stay tuned. back to you guys. >> mike, tim, good to see you. mike, we'll see you next hour when all the earnings start coming out. waiting for that. 40 minutes left in the trading session in what has been a rather tepid day for the markets overall in terms of
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volatility. the dow is down 10 points. >> russell 2000 down 1/3 of a percent. up next, costco is outperforming in part to a calendar shift of the chinese lunar new year's celebration. we'll go through some of those results coming up. plus, here they come, earnings, earnings, earnings after the bell. amazon, chipotle, gopro leading the charge. we'll break down the results when they do hit the tape coming up.
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waited until 8:00 last night to report this last night. i mean, they waited all that time. you would think it would be bad news that they were trying to bury. >> they report at funky times. >> if you look at like a three-year chart -- >> a moon shot. >> this has done very well. $110 three years ago now trading around 71.
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>> not all retail having bad news. this one in the big box retail space. we talked to the coach ceo. it's not all tales of say under armour. and macy's. >> does she agree with these? >> partly. i think it's also the membership fees. >> i'll take as much as i can get. >> people love costco. >> yes, they do. >> i don't get it. i live in the city. we don't have one. >> 35 minutes in the trading session, now 34. leading trader will tell us what he's watching into the close when we come back here. also ahead, why two general electric deals could be in jeopardy because of president trump's new immigration rule. that story is coming up. les is ielg0
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less than 30 minutes into the close. the dow is down just barely, about 8 points. s&p in fact just turned positive so we could see a positive finish. half an hour left. the nasdaq is down a little more than 1/10. russell 2000 and small caps down. sony is higher despite reporting a quarterly miss. there's no chance the company will sell any part of its movie
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and tv business. $962 million charge at sony pictures entertainment led parent company to cut its four-year guidance for operating profits. the company blaming shrinking dvd and blu-ray disc sales. bill? >> sarah, we've got 30 minutes left on the trading session. with the dow down a whopping 3 points and the s&p is up a point. >> you know what, i've been saying it feels as if we're down 250 points. >> why. >> on a daily basis. >> i don't know. it's that we've gottened so accustomed to moving up. >> steve grasso. >> sorry. >> there would be a time when i would have said, gee, this is a market definitely waiting for tomorrow's jobs report, right? >> right. >> doesn't feel like that. >> doesn't feel like that. how about the other day when we were waiting on chair yellen's speech. waiting on the fed. the old script seems to be ripped up, thrown out. >> throw it away. >> burned and now we're myopic on macro headlines.
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>> but jobs still matter though? >> of course. >> we had a great number from adp yesterday. do you think that translates to the jobs coming tomorrow? >> if something skews dramatically from what we've been seeing in the trend we've been seeing, then it matters again. >> right. >> then we become focused on that again. right now everything is macro. everything is what sectors is president trump talking to. how is the economy doing as a whole and what are our relationships like? >> you don't think we'll get much of a response depending what the number is? typically, strong number yields would go up, stocks might go up depending which sector we're talking about, right? >> i think we've had a long enough look. i think chair yellen has done a good job at telegraphing what she would like to do and then doesn't do it. >> yes. yes. >> i think the market has become numb to words. the job market would have to be dramatically different than what we're expecting. people are looking for stronger dollar, looking for yields to go
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higher. as a whole market has had every reason to sell off and it hasn't and that tells you something. >> thanks, steve. >> thank you. >> see you later. sara? >> some resilience. time for cnbc news update with tyler mathisen. >> in his briefing today house speaker paul ryan said the travel restrictions initiated by the trump administration on seven majority muslim nations are a sensible national security move. >> you know this is not a muslim ban. if it were, i would be against it. we are a tolerant pluralistic country. we are and we will be. it's really important. >> meantime, some varieties of skoal, copenhagen and husky brand smokeless tobacco are being recalled after some people spotted metal objects in their pouches and tins. the u.s. smokeless tobacco company initiated the recall after receiving eight consumer complaints. no injuries reported. tiger woods off to a bad
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shart in the omega dubai classic. he bogeyed two of the first three holes. he looked uncomfortable ending the day with a 5 over par 77 now in danger of missing the cut for a second straight week of competitive golf after his long layoff because of back problems. he said his back was fine. his face said it isn't. that's the cnbc news update at this hour. back to you guys. >> yeah, sara was just commenting on tiger's 77. >> i was going to ask you if you were disappointed? >> i just watch it and we'll see what happens. he has a very ambitious schedule. he's playing in dubai this week after having played in the u.s. last week. he's going to los angeles next week. i don't know. he's 41 years old. he's trying to get back to fighting golf, you know, championship weight at this point. >> had an injury, right? >> got to be patient. got to be very patient here.
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thank you, ty. see you later. speaking of patience, a number of tech companies have spoken out about president trump's new immigration rule which temporarily bans travelers from seven countries. now politico is reporting the move could be a problem for general electric as well and for slightly different reason. the iraqi government is warning that two major deals that it has with ge are at risk and might even be canceled. >> joining us now, one of the journalists who broke that story, tara palmeri, white house reporter at politico and cnbc contributor. >> welcome back. >> tell us what the back story is with ge and why these deals could be threatened? >> reporter: ge has been in iraq for over 40 years. they are responsible for a lot of the infrastructure in the country. they signed a huge deal, $1.4 billion, to build up a power plant inside iraq. they have hundreds of employees in there, and they spend thousands -- billions of dollars
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in iraq. this is an american company which may be at risk because of this travel ban. the problem is that we saw a diplomatic memo from the state department that showed that an iraqi official from the government warning the state department that two pending deals may be in jeopardy because of this travel ban. they just don't see the u.s. and ge as a credible partner in iraq. it also throws the entire iraqi situation into complete chaos since isis has taken over a part of the country. and right now they needed stability, infrastructure helps with stability and ge was a big part of that. >> so let me just clear this up. so they're threatening to cancel those deals out of retribution or because of logistical problems presented by these executive orders? >> reporter: it seems to be a bit of both. they don't -- they don't explain more in the actual memo, but ge said that they're not aware of any threat to their deals which
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aren't pending now, not previous deals but future deals. there is concern. i mean, we have a lot of resources in iraq and if you're trying to transport people, especially iraqis that help the u.s. army contractors that are helping to build this country, it's a very traj guile democracy and political leaders can use this and they are antiamerican, breed extremism and undo a lot of the work we've done in iraq. >> this puts the ceo of ge in a very delicate position. let's face t he's going to lose business if they do this. he at the same time presumably has president trump's ear. he has been appointed on a panel of advisers on a way to grow jobs in the united states. can he have it both ways here? >> reporter: i think this is going to be difficult. he's going to have to choose when he needs to use that place on the panel to advocate for his own business. it's good to have a line in for
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the president but when the president is following his own political agenda that doesn't work for you, you have to make a statement. it builds bad will with your new business partners, the iraqi government. they felt really insulted that they were on the list of seven countries in the travel ban and not afghanistan. they said why is saudi arabia -- why is saudi arabia not listed as a country? the 9/11 attackers were linked to that country. you know, they also said they would be willing to look to other countries, hinting at, who do you think, russia? >> yeah. i wonder if there's any implication for the boeing deal ultimately with iran which has been publ another story you've been following all over and that is hedge scaramuc trump administration. rathere are some details, some reports now that that might not be happening because of his
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deal. what do you know? >> reporter: right now it's still in limbo. he has many high level political figures calling on his behalf to president trump, including rudy giuliani, former mayor, and he's trying to make the case that he should have this position in the liaison office, the one that was held by valerie jarrett. this, of course, is something that the chief of staff to the president, reince priebus, doesn't really want because he's trying to consolidate power right now and he already has competing voices in the president's ear in the form of steve bannon, chief adviser, the president's son-in-law, jared kushner, and chief -- a chief aide, kellyanne conway. so he's trying to consolidate power. bringing scaramucci in the mix is one more person in this cabinet that is already full and who has access to the president. scaramucci is not in a great place. the business dealings are the part that is being used against him because he just sold his hedge fund, sky ridge, last
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week. >> right. >> reporter: so we'll see what happens with him. it could be any day to see if he ends up joining the administration or if he ends up back on wall street. >> right. it's certainly keeping you busy. >> reporter: definitely. thank you. >> tara palmeri from politico. >> 22 minutes in the trading day. dow is down 7 points. stocks are moving. the retail world rocked with a shakeup at ralph lauren and a possible sale at macy's. not the store that offers coming up next. president trump full speed ahead with building his wall on the southern border, but he won't be doing it with a long-time friend, construction worker, a billionaire that turned down the project and that friend will be joining us live to explain why coming up.
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a surprising shakeup at ralph lauren. courtney reagan has details.
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>> reporter: ralph lauren surprised the street saying steph fan larsson is leaving due to creative differences. he will stay on until may and the search for a new ceo is currently underway. investors, like you said, aren't happy about losing larsson. they were up 7% back in 2015 when larsson was named ceo and investors were excited about it. on the earnings call today larsson said it came down to differing on decisions related to product, marketing, and shaping experience saying they both, larsson and lauren, had worked hard to find common ground but ultimately couldn't get there. from the beginning it appears the owner had a hard time giving larsson full rein. the morning after the news of larsson's hire in 2015 an internal memo lauren sent saying in part, i will continue to lead
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as i have for 50 years. i am not stepping down, nor am i stepping back. i am stepping up. lauren did launch his overhaul in june of 2016. he called it the way forward plan. that included closing stores, quickening the supply chain and closing on the three core brands. the company says they will continue that strategy. so a very interesting shakeup and i'm not sure exactly who they're going to find to be that ceo position. >> yeah, i was reading some of the analyst's notes on this because you made an interesting point earlier on "squawk on the street", courtney, you said the stock was down over ten year but clearly investors were disappointed with this news. it feels like there is some concern that there's going to be more of a ripple effect with departures, that he brought in a lot of people from the past fashion world from h&m which is where he came from. certainly that has to be a part of it. what else are you hearing as to why investors are punishing the stock so hard? >> that's a good point. ste
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stefan larsson was at h&m. he changed the supply chain. we have to be able to respond a lot quicker to fashion and what the consumer wants. that's what he was doing with ralph lauren. it is tough out there. it's tough in retail. there were some things that weren't going great for ralph lauren, however, larsson had implemented this plan and was working through it. it seems that investors and analysts had liked what this plan was working out. it was a four-year plan. now he announced it in june. i'm not sure how far through the plan he got. there's a lot to figure out for that company moving forward. >> there is another aspect of this, though, that we need to cover very quickly and that is the largest outlet for ralph lauren's apparel is macy's and they are struggling themselves. they're thinking about selling part of the company, right? >> there was a report this morning in the new york post citing sources that macy's ceo may be considering accepting some kind of a friendly offer if there were to be one so that he could potentially head off any
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kind of proxy battle with activist investors starboard values. that's according to reports macy's officially has no comment. we know they've had a stake in macy's since june of '14. they have a lot of street cred. they could convince shareholders to see things more their way. that's not what terry lundgren wants i assume weeks before he actually transitions out of that ceo role into the role of chairman. >> i was going to say. he's stepping down in weeks. >> that's right. yeah, that's right. exactly. but he will be on that board. if that's where the problem brews, he will still be a part of what goes forward. >> wondering if he's trying to make this his last move. we will see. courtney, thank you. >> back at headquarters. 14 minutes left in the trading session with the dow down 6 points. hey, stand by. >> yeah, speaking of retail, the mother of them reports. amazon. we'll also get earnings from chipotle and gopro all after the bell.
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we'll tell you what to expect from the results next.
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utilities. dividend payers on the yield is lower. >> we're going to see movement after the close with some earnings coming out, a full flood coming out tonight. joining us to preview the big names, deidre bosa and dominic chu. >> guys, it should be a blockbuster quarter for between a record holiday season. its continued lead in cloud computing. it earned an oscar nod for the
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digital media unit. it's never been afraid to forego short term. operating incomes this quarter could be anywhere between zero dollars and $1.25 billion. lately it's only been ramping up investments like in the digital media space. more benefits for prime members and its costs into logistics. 6 3/4 of profistraight quarters. we'll see if that continues. >> dom chu with chipotle. what are you watching, dom? >> we've known quite a bit about this. chipotle has pre-warned previously about its earnings. also pre-announced on some sales numbers. we'll see some volatility. the surprises have been baked in. let's see what happens. the markets are looking for top line numbers. 57 cents in earnings for the quarter. revenues about $1 billion here. chipotle has already told us that same store sales were down 4.8% in the last quarter and up
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14% in the last quarter. the burger chain lapsed one year. sales could look a lot better in year on. comparables not as tough. bill ackman's the second largest shareholder winning a shakeup of the board and elimination of the co-ceo structure late last year. we'll be watching for anymore in personnel changes and also forecasts from the year ahead. a lot of commentary, bill, sara, about what the e. coli scare is like and how it compares to what sales will look like. >> i want to know how they're thinking about guacamole cost. >> avocados a huge deal. >> you make them with peas. >> oh, really? >> there is a recipe. >> endamame. >> thank you, dom. >> you've got it. joining us as we head towards the close with the dow dawn, phil orlando and ron mullencamp. welcome back. >> good to see you.
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>> phil, we probably need to talk about this jobs number tomorrow. you're expecting a blowout number, aren't you? >> two key numbers were edp report which was much better than expected yesterday and the claims data was just off a 43 week low. >> what will the market do? >> the market might sell off because they may say economy is doing well, market is doing fine. counter intuitively given the fact that the market has done well, if the economy is starting to perc up, that may bring in a stronger fed. >> is this part of the reason why, ron, you say the bond bull market is over? >> well, yes. i think that's fairly clear. what's been interesting is we've been growing at 2% for nearly a
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decade now. 2% doesn't justify 19 or 20 pes. business confidence has picked up. we've seen some number that phil mentioned hiring seems to be picking up some. but to get to a 3 or 4% growth rate there's bound to be some changes in regs, tax laws and all of that will take a while. frankly we think the next six months is going to be a little bit of a cross current between hopes and -- really hopes and to some extent expectations before some of this follows through. so we think it's going to be a real pick and choose market for several months. >> you're the value investor. where are you going to buy? what looks like it's a good value right now, very quickly, ron? >> you mentioned quickly amazon. it seems to me that if people shop at amazon instead of macy's, they're going to be looking for hanes brand. they're doing good things. we're finding i think i mentioned to your folks
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celanese. it benefits from low price for u.s. natural gas. there are little places you can find with values, but we think the overall is going to be pretty choosey. >> phil orlando, you like the financials, materials, energy, tech, industrial. you like the markets. >> pretty much. >> we like the markets. we are nervous here near term but as the trump administration tries to gain some traction in terms of getting fiscal policy initiatives through, we think it will come back towards stronger economic growth in 2018. >> good to see you both. >> thank you. >> thank you. >> good to see you. >> see you soon again, i hope. we'll take a quick look. the closing countdown here. after the bell, president trump's new wall on the southern border hasn't started construction and one builder and friend of the president has turned down the project. he'll explain why here on "closing bell." you're watching cnbc first in business worldwide. an lifis bas
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xarelto® hov. tilyprres reme is ietenreng.annere i i'avestr ts ste*tr coming up on the last 0 seconds of trade here for the closing countdown, i'm embarrassed to show you a chart of the s&p. we didn't move much. maybe we are waiting for the jobs report tomorrow. what i keep hearing is 220,000 above that number would be the
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market mover. you never know. there were stocks that moved today though. meade johnson, makes baby formula among other things, is in acquisition talks. that was the biggest gainer for the s&p today. very big gain. and then be we mentioned ralph lauren which lost its ceo today and is looking for a new one. now, bob pa san sani. amgen, chipotle, visa. >> go pro has lost it a long time ago. >> one thing that is worrying me a little. the market's holding up well. look at the transports now down 68 points. we have had a terrible week. the transports at historic high. just a few days ago and it's been down five days in a row. big names. ups had a very disappointing earnings guidance report.
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wider had disappointing guidance. ryder down 8. even airlines, delta had that outage on sunday night. it's down. look at the numbers for the week here. so we're below the 60 day moving average. keep an eye on this one. >> all right. thank you, bob. buddy kevin o'leary and team at o 'shares are ringing the bell. get ready for all the earnings on the second hour of the "closing bell." and welcome to the second hour of the "closing bell." i'm sara eisen in for kelly let's take a look at how we're finishing up the day. dow, nasdaq and s&p are all unchanged. s&p did manage to close in positive territory. real estate, staples and utilities. the russell index of small cap stocks closed down the most at
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about 1/3 of a percent. earnings will be fast and furious this hour so buckle up. deed dre bosa, dominic chu will bring us results from chipotle. kayla taushi and meg tirrell will bring us the results from amgen. we have cnbc markets commentator mike santoli out in san diego. tiaa managing investments director stephanie link and founder and chairman, lewis navalier. as we wait for the amazon results, mike santoli, what stood out for you? financials and industrials outperformed. >> yeah, you know, the market, sarah, in a bit of suspended animation. we've seen a bit of a stallout and the drivers people assumed would work through 2017. bond yields refused to go higher. they're stuck where they are. therefore, you do have the more
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stable sectors. really big growth stocks, too, not just the very defensive stocks but bigger growth stocks that drive things like the nasdaq 100. people have rotated fwhoo thint. without having the cyclical groups outperform. on some level we're in a mode where it's good market news and we probably need more of that. >> et cetelet's see what we get earnings. amazon up $1.54 with earnings. that looks like a blowout. the estimate was 145. we'll get the results. if you look at the stock price movement here. >> 4% so far. >> falling pretty hard. deidre bosa, do you have the revenue numbers and other metrics? >> sara, as you mentioned it was a blowout in terms of eps, $1.54 which was above what was expected, $1.35. why you are seeing weakness has to do with revenue.
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that came in below expectations. 44.7, that was expected. revenue came in for the quarter, fourth quarter at 33.7 billion. remember, this was supposed to be a blowout quarter for amazon. it's most important because it includes holiday sales and while the rest of the traditional retail sector struggled amazon was supposed to have benefitted from that and seen a healthy holiday season, however, promotions may have eaten into that as they competed, as they tried to up their prime membership sales. we're also going to be looking into the crowd computing unit when those numbers are coming out. i will let you know when they do hit because that has been a revenue and profit driver in recent quarters. but we did -- the important thing is still see a profit above expectations so that makes it seven straight quarters that amazon has been in the black. we'll get back to you with more numbers as we get them. >> all right. deidre, thank you. louie navalier, long time no
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see. you own a lot of amazon. what are you thinking here? >> i'm happy so far. i don't worry about the after market stuff. i'll buy more tomorrow on a dip if it continues. i do want to see the cloud computing. cloud computing has been feeling its earnings growth. i'm curious about that component. >> why do you own it? do you own it for the cloud? is that the strings there? they criticized jeff bezos for continuing to plow the profits back into the property and reinvesting and not taking those profits. you obviously don't have a problem with that. >> well, i've actually been late on amazon. i've only owned it a little less than a year but i really jumped in after the cloud computing profits. it really helps ensure profitability every quarter now. of course, we appreciate their strong sales, their market dominance. you have to pay a premium for the stock. this trades nowhere near the premium multiple it used to. >> steph, what did you think? what did you hear?
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>> hey, bill. how are you doing? well, i think it's -- it's a good number. i mean, the revenue number was in line with what their guidance was, but you're right. as everyone had said, the expectations were that they were going to blow it away. they said the quarter was a little better than what they expected, 1.3 billion versus 1.1. it's down sequentially like you would expect. net-net the stock is up 12% year to date. it's been a great story. recovered all and then some from when it dipped last quarter. i think if you get a chance to buy this stock, this is clearly where people are spending their money. i mean, look at all these department stores and how difficult these companies and how challenging they have seen the environment and it really is because of online and amazon is the leader. so i think you want to look at this one and buy on weakness if you get it. >> all right. we've got more earnings. amgen is out. meg tirrell, tell us what you
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have. >> higher on the fourth quarter earnings numbers coming in with a beat on earnings of $2.89 versus estimates of $2.79. revenue beating at 5.79 billion. the company giving 2017 guidance of 22.3 billion to $23.1 billion revenue just shy of consensus of $23.3 billion. also looking for adjusted eps of 11.80 to 12.60 versus consensus of 12.46. you might see the shares up almost 3% there is separately amgen said a clinical trial of a cholesterol drug hit its goals trying to show it reduces heart attacks. that's a very important study for amgen. this drug brought in $141 million in 2016 based on these results depending on how good they turn out to be when we see more of them, analysts estimate this could be more than a billion dollar drug guide.
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you're seeing amgen up 3% on that. >> meg tirrell, thank you very much. mike santoli, amgen still under a little bit of pressure here. >> yeah. i mean, i think a lot of it is going to come down to what the investor field position was in these stocks beforehand. i'm thinking specifically about amazon trading at a new high and all the dynamics that steph mentioned about department stores. what that has done is rotate a lot of money by default into amazon stock. people feel like it's the only investable retailer so you might have some kind of a gutt check on a number that wasn't a blowout on the top line when you also have everybody expecting them to enter into a new investment cycle this year. probably not a very long term change of trend but that to me explains why it's moving. >> and, mike, on first blush at least this report doesn't sound like it's going to lay any of the criticism always leveled at jeff bezos for how he runs his company and its profitability. >> no.
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and i wouldn't expect it to. you know, you had that criticism, 3wi8 of bill. it's blown through everybody in its path who was a naysayer. other people, the fans will mention that he told you how he was going to run this company almost 20 years ago when he became public. he said he wasn't going to worry about near term profits. that's a secondary issue. revenue momentum is where the stock is going to trade off of as opposed to whether in fact he's going to harvest the business for profits. >> it's all about prime. that was the first quote. we'll wait to hear the aws numbers. >> costco membership they have going. let's get to the earnings on visa. kayla taushi. >> a baet on the top and bottom lines. $4.5 billion in revenue and 86 cents per share. the expectations were for 4.3 billion in revenue and 73 cents per share. payment volume grew 47% in the
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quarter. that was exactly in line with what the street was expecting. the company affirming guidance for the full year of 2017 for the payments companies that is crucial for investors. it does expect slightly more onerous volatility from foreign exchange. we know what's going on all over the world. net revenue growth will be 16 to 18% but it does expect a point more of an impact from volatility in currencies. finally, i want be to tell you that they do say that the integration of visa europe is proceeding well although their outlook for the year does include integration expenses of approximately $80 million. the street knew they were going to be seeing increased costs with that. this is among the first times that we're hearing the $80 million number. bill and sara, we'll let you know if we have anything zblels stephanie link, 1.5% pop for stock that has under performed. only up 2% versus the broader
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market. >> yeah. and it's actually slightly outperformed master card. master card last week was a little disappointing and it actually is more expensive than visa. visa has a couple things going for it. basically it's visa europe and also visa costco. so those are the tail winds for vees th visa this year. i prefer it to master card because it's trading lower. the currencies are going to weigh on both stocks and i think if you're going to choose this space, american express is trading 15 times forward and has kind of a recovery story. i think that's more appealing, at least to me, for the long term. >> we just had that conversation the other day, didn't we, steph, on those two companies? let's get to go pro also out with earnings. josh lipton has those earnings. >> go pro reporting eps of 29 cents verse expectations of 22 cents. revenue 541 million. the street was at 575 million.
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gross margins basically in line. turning to q1 guidance they're saying to expect revenue of 200 million plus or minus 10 million. that misses what the street was looking for. analysts projecting a two-on-one gross margin. the low 30% range. the street was at 40.5% heading into that report. the stock was up around 20% year to date but certainly on the call you would expect movement. got a lot of questions about this q1 guide. out there on revenue and gross margins. any call we'll get on the new line of hero 5 cameras, that call starts at 5:00 p.m. eastern, guys, we'll be on it. back to you. >> boy, we were talking about that with bob pasani. this is a company that's been suffering. mike santoli, they've -- >> here in after hours. >> they have to plumb the bottom somewhere here in their stock and their business. >> yeah, you did have a lift in the stock off the low.
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they were thinking the business had stabilized. fair or not you end up lumping gopro with fitbit. it was a demand for something that was fresh. companies that have cash in the balance sheet and everything else, they haven't really produced a second act. i do think the market will have to contend with that once again, in fact, they had the holiday season. it's thard to see what the catalyst will be to get the believers back on the bandwagon. >> we have an earnings alert on chipotle. dom chu has those numbers. >> yes, the stock is down by 1.5%. currently 12,000 shares was the volume. the reason why you're seeing at least maybe a more muted reaction compared to what some were expecting, remember, they did pre-announce in january some of the result that we were going to see. let's bring you the results, headline numbers, 55 cents per share. that does miss the average analyst estimate of 57 cents per share. revenue coming in at $1.03 billion. that narrowly misses the
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estimate of $1.04 billion. we'll say largely in line. these numbers we kind of had an idea about during their pre-announcement back in mid january. we should also say here for the full year revenue decreased in 2016 by about 13.3% to $3.9 billion. comparable restaurant sales for the full year down $20.4 billion. also, 4.8% declines in comparable store sales in the full quarter for this past quarter as well. also making some comments with regard to food costs, they were 35.3% of total revenues. that's an increase of about 1.5% compared to the fourth quarter of 2015. the increase they say was driven by primarily higher avocado prices and increased expenses, tomatoes was partially offset by a little bit of relief from beef prices. we'll keep digging through this overall. that's the reason why you're seeing a bit of reaction, more muted for chipotle. now down 3% on close 19,000
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shares worth of background. back over to you. >> i'm telling you, go for peas instead over avocados. >> no. >> stephanie link, i can't imagine you're in this stock. i don't know. >> it's been strong the last few months. >> it's a company that clearly has yet to recover from the e. coli scare. >> yeah, and i think the stock has recovered because it has a high tax rate, 39%, right? so i think people are expecting if you get lower tax reform the company will benefit. that's the only good thing you can say about the story. next couple of months get very challenging for the company on a year over year comparison basis on same store sales. i don't see a real lift in any of the numbers going forward. stock is also expensive at 33 times forward. so i think there's a lot of other areas i'd rather own. mcdonald's, i'd rather own yum brands. those three the fundamentals are
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much stronger and have more tail winds than i think chipotle. >> a lot of the restaurant stocks do all of their business domestically. they benefit if there's a slashing of the corporate tax rate. >> as long as food inflation stays in check, too, right? >> let's get out to deidre bosa with more news on amazon. >> we're digging through the numbers. what we wanted to see was the numbers relating to cloud computing. amazon web services. those are coming in a little bit light. the street was looking for aws revenue of 3.6 billion. it came in at 3.54 billion. also net income from that very important unit which has become amazon's most profitable, that net income came in at 749 million. still a significant chunk. considering it was the 861 million in the last quarter. just want to touch on guidance as well because this came in a little bit light than what the street was expecting. that could be contributing to
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some of the down side that we're seeing in after hours. the company is guiding first quarter sales somewhere between 33.25 billion and 35.75 billion. the street was expecting 35.95 billion, guys. >> we'll continue to look through these numbers and be on the call shortly. >> thank you. louie navallier, there you have the numbers. you heard some first blush numbers on cloud computing. what did you hear? >> i'm not too worried about it because it does swing quarter to quarter, but i cannot find companies that are growing faster than amazon is the bottom line so i'll use any dip as a buying opportunity. amazon isn't like it was a few years ago. we have very good earnings growth with this company now and you just can't find sales like this. so i'll stick it out with amazon. i'll buy more tomorrow. >> what's also sort of funny, louis, about this amazon quarter is the profit number. record holiday quarter into profits.
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now it's been reversed. >> a year ago they reported holiday sales disappointing even though it was up. and so i'm just happy they're making money and i think a lot of smart money will be buying the stock on a dip tomorrow. i'll be one of them. >> louis, good to see you. thanks for joining us. appreciate it. >> thank you. >> stephanie, thank you. we'll see you again soon, i'm sure. >> thank you. >> mike -- >> come back, mike. >> enjoy that swimming pool behind you. nice. >> i'll be back with you tomorrow, guys. >> safe travels. so amazon shares lower after missing the street's revenue estimation. when we come back, a trio of analysts will tell us whether they think now is the time to sell or bias louie navallier's doing. >> the billionaire tycoon who turned down his friend's offer
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let's send this back out to dom chu for a quick earnings
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alert and big movers on the report stock. >> all right. first of all let's start with -- what are we going to do. fireeye's first. we are seeing a loss of 3 cents a share for earnings. that's slightly better than loss of 16 cents per share that analysts were looking for. revenues though coming in light. $185 million. analysts were looking for on average $191 million. also seeing first quarter revenues somewhere in the range of 160 million to $166 million. analysts were looking for on average $177 million. those shares, again, for fireeye really taking a big move. as you can see, they're down in the after hours right now on heavier relative volume. 19% on 1.9 shares transacted so far. that's the news there also. again, some moves here with regards to deckers outdoor. those shares moving as well. deckers posting an earnings per share number of $4.11.
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that misses $4.24. revenue's also coming in light. $767 million. $789 million is what is expected. 2017 earnings per share guidance. q4 is a break even or loss of 10 cents per share, in that range. analysts were on average looking for a 44% per share gain. no shares moving. down by 21% on heavy volume, guys, back to you. >> wow. >> big disappointment. >> ugh sales missing the mark at 7.4 million during a key season. >> thanks, dom. see you later, i'm sure. let's talk about amazon. fourth quarter earnings, bottom line hit, revenue miss. stock down almost 4% right now. for more on the quarter let's bring in some guys who know something about this company. r.j.hanavie from morningstar has a hold on amazon. aaron kessler from raymond james
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has a buy and tripp miller from galane capital partners, he owns the company, shares here. tripp, what did you hear? you're the guy that has a stake in this all. did you like what you heard or not? >> thanks for having me on again today, bill. what i've digested so far for the long term, and we're long-term value investors, i think everything is intact. amazon being a great long-term play. the short-term weakness may provide a buying opportunity for us and our shareholders. some of the weakness in aws doesn't concern us very much because we really feel like that's an opportunity for them to continue to grow in a segment that could be worth trillions of dollars. so it's a big opportunity long term for them. i'll have to digest more of the report but we like what we've heard so far. >> based on what you can tell, aaron, you were positive on amazon before this report, where did the revenue miss come from? what are you going to ask about on the call? >> the key in terms of the
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retail side, unit growth was up 24%. that compared to 28% the previous quarter. a tougher comp in q4. >> okay. r.j., a hold. why and what did you hear from this report? >> we're still generally very positive longer term on this. i think part of the revenue miss might have been the ongoing shift being more of a third-party marketplace. when that happens you're not getting as much of the revenue in there. from what we understand there was a big quarter in third party sellers. that will dilute the revenue but inflate offerings. trip said, all the long-term will be the story here pulling back. >> did we -- i assume we went looking for bears today. we didn't find anybody. >> that's part of the thing here, aaron. there is a lot -- there's a lot of bulls on this stock. it has outperformed. what's it going to take to get it to the next level?
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always a tricky one to put a valuation on. >> yeah, the near term obviously profits are still limited. i think the next thing is continue to see margin improvement. we'll get better margin improvement in the second half of the year. both media, with their prime video business as well as fulfillment center. you'll get easier comps and in 2018 key improvement in profit. you can see more multiple expansion on amazon. >> trip, what i hear most often from bulls, two things, they're willing to cut jeff bezos some slack on how he runs the company and they're not worried about the give and take what happens quarter to quarter. >> long game. >> unit revenue growth slower than what it was a year ago at this time, for example, but that's not going to worry somebody like you or louis navallier, is that what you're saying? >> that's right. long term we think everything is intact for this to be a wonderful investment. there will be a lot of
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volatility in revenues from quarter to quarter. we look out five years. when you look at what they're doing in kentucky with their potential to roll out prime air with the new center, spending 1.5 billion, this is a company with $18 billion in cash. this is an opportunity to gain control of their distribution, take some pressure off their dependents from federal express and ups and gain from their customer fulfilling them from one point to another. >> some of the bears on facebook and the stock did close lower by almost 2%. we're worried about the investment cycle, what did we learn from amazon. prime air is one of the initiatives called out in the press release that they're pumping a lot of money into. >> yeah, no, i think investors have become okay with the expense cycle for amazon. we don't think that can be elongated like amazon. so investors are going to give
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them a little more leeway in the near term to continue to spend. we think a lot of the logistics platforms are building out. we think investors understand that today. >> got to go, guys. r.j., aaron, thank you. trip miller, thank you for joining us as well today. appreciate it. >> thank you. it was another big day for president trump, and things could be ready to heat up with the white house reportedly set to impose new sanctions against iran. we'll have an update for you coming up. also, hey, snap chat could reportedly file for an ipo as early as today. we are monitoring the wires. we'll have full team coverage of that highly anticipated offering if it's released tonight. coming up.
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welcome back. news on uber. dom chu has the details. >> guys, this is coming from ricoh tweeting out breaking news right now. i am hearing, she says in a tweet, that uber ceo has told employees in a memo that he has quit trump's business advisory council. more to come. also the business council stacked with ceos but travis kalanick and elon musk have been getting flak for joining. meetings to take place tomorrow. this is a big deal only because uber has been very much a focus given some of the commentary and linkage to the trump administration. we will continue to follow this. of course, more from karkara
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kara swisher as we hear more. we'll bring you more guys as we know more on our end. back over to you. >> it's all speculation at this point, but you wonder if he's bowing to some of the pressure out there. there was that twitter campaign, delete uber. >> there was a lot of news about new york drivers gild that called on him to remove himself from president trump's council, to break his ties with trump. i believe he was part of the group of ceos that was going to be at the white house tomorrow along with jamie dimon. >> doesn't sound like it now. maybe. >> if that is unclear. >> we will see. >> a lot of the ceos have criticized president trump for the immigration order saying they oppose it. a lot of them have come from silicon valley. kara swisher said a group of them got together for the first time to write a letter. she got a draft of the letter opposing it, sort of taking it a step further than writing
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internal memos and statements out on social media. >> can we see what the stock is doing before we get to sue? >> uber doesn't trade. >> it's not a publicly trading company. >> wishful thinking. >> because of the ipo coming. i blanked out for a second. let's get to a cnbc news update from sue herera. >> thank you, bill. here's what's happening this hour, everybody. california water managers say the snowdrifts are at a drought busting average with the most snow recorded since 1945. the rods drift as high as three branches which provides 1/3 of the water supplies to the state every year. minnesota governor mark dayton's doctor say he recently revealed prostate cancer and it hasn't spread and it's treatable and curable. he revealed his diagnosis a day after he collapsed after his state of the state address. google has taken the top spot from apple as the world's
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most valuable brand. apple's brand value has dropped 27% to $107 billion since last year. google's brand is worth 109 billion. it's the first time since 2011 that google has topped the list. magic johnson is returning to the los angeles lakers. he will assist in all areas of basketball and business. the lakers are currently in the longest playoff drought in franchise history. that is the news update this hour, guys. i know you are very busy so i will turn it right back to you. >> right back to that story. >> love the comment on the lakers, but we don't have the time now. >> we're joined on the phone with kara swisher. what are you hearing? what can you tell us? >> we just got the news that travis is coming off of trump's business council. he joined a big group of business -- i apologize. he's been on this council with a
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lot of other business executives. both he and elon musk have been getting a lot of flak from being on it given the immigration ban, some of the other executive orders that trump has released. he's removing himself from the council essentially. >> do you think -- we were just speculating. do you think he's bowing to the public pressure that's been out there? >> yeah. >> they are planning to go public at some point, you would think. >> in a while. >> the pr clean for a while? >> no. no. no. not going public until 2018. you all want all these ipos, but that's not the issue here. there is an issue around the immigration band. i think being on the council, the immigration issue has become a real hot button issue here. i think definitely the delete uber thing, which is over the -- >> yes. >> i think -- you know, i think the question is you have to
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balance out, is it better to be cooperating on the business council with the president, which are largely -- look, they don't have that much impact. they're usually dog and pony shows essentially. and can you really have maximum impact doing that given how much -- how much it costs to be on it in terms of the consumer -- consumers and people using it, people objecting to it? i don't know if he bowed to the pressure. i think he has a big issue around the immigration ban. so do a lot of ceos. you're seeing an increasingly strong stance against it. you're going to see that. the question is will elon also come off the council. sure, he has immigration objections, too, so we'll see. >> you know what it speaks to, kara, it's only been a few weeks since president trump has been in power. we knew there was going to be some sort of collision course when it comes to silicon valley, the value that campaigned against him. >> yeah.
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>> then they showed up in trump's tower and posed for a photo op. >> yeah. >> you wonder how this is going to play out and the risks the ceos are going to take. on the flip side, whether they need to do this. >> well, you know, the thing is, look, i think they regretted doing that. at the time i wrote they should say something specifically about immigration because of all the incendiary things trump said on the campaign trail. there's an old maya angelo quote, someone shows you who they are the first time, believe it. they were saying, kara, he doesn't mean it. he said it, he must mean it. then of course he felt i'll agree with the campaign promises. i think it did surprise silicon valley people. the question is, will they get hurt? i don't know if you can attack an entire industry, which is the most successful industry in the u.s., attacking all of tech, is
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that really a cogent strategy? maybe so. i mean, good luck with that. i think the cooperation and opposition at the same time are just fine. reasonable people can disagree and i think the trump administration will see that now. >> hey, kara, let me pivot you to an even bigger story. snap has filed for the ipo. >> yeah. >> your response. no big surprise? >> we wrote about this last week? no, not at all. we wrote a story on friday saying that they were going to do that so i feel good about that. this is going to be an interesting ipo. i haven't had a chance to look at it. i think a lot of people are going to dive into the numbers around growth, growing the audience behind the young teen audience, where their advertising numbers are. i don't think the finances matter as much with how much they're raising or what valuation. really where snap chat is going in the company and where you're going to see the weaknesses and the strengths of the business.
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look at that guy, kudos to him for vaisionary and interesting and innovative platform. we'll see how he's doing. >> i'm excited for the results. we'll let you look through it as we are going to as well. >> yes. >> it looks like that f1 filing has just hit. >> yeah. >> kara swisher, thanks so much for jumping on the phone. >> thanks so much. >> more breaking news than we anticipated. much more on the snap ipo when we come back. stay with us. ed wkfor,,anrlclnog on is read cni, tuteg. owowr mpan cni,
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the company formerly known as snap chat just filed its ipo. let's get more details on the offering from julia boorstin. >> snap has officially filed. in terms of the lead underwriters, it's morgan stanley, goldman sachs, jpmorgan and deutsche bank. there are some really fascinating numbers in here. 158 million daily active users. 2.5 billion snaps created per day. now, of course, very curious to see how much money snap makes. the company reporting revenue of $404.5 million in revenue in 2016. for the year and then as it
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compared to revenue at 58.7 million for 2015. so that's growth of more than 6 times year over year. now average revenue per user which is a key metric we certainly pay a lot of attention to when it comes to facebook, that's $1.05 up from 31 cents in 2015. snap incurred a net loss of $514 million compared to necessary loss of $373 million. company saying in its filing here that they think of themselves as an emerging growth company and may elect to comply with the company reporting requirements in future filings. we're continuing to go through the document. they're saying they're going to have three classes of stock and are only going to be offering the class a common stock in the offering. always interesting to see what the risk factors are for the
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startups. some of them include -- they anticipate that the growth of user base will decline over time. that it depends on effectively operating within mobile operating systems, hardware, networks regulation. they say they rely on google cloud for the vast majority of their computing storage and band bit. they generate substantially all of their revenue from advertising. they also know that two of their co-founders including ceo evan siegel have control over all stockholder decisions. they control the majority of the stock. class a common stock will not dilute their voting control because those class a shares have no voting rights. certainly going to be a topic that investors are going to be very interested in hearing more about. we're going to continue to dig through this filing here. there are many pages and we'll bring you more details. guys. >> that was pretty good for a quick look, julia. thank you. it's going to trade at snap,
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s-n-a-p. we reported it would list earlier in the week. 158 million people that use snap chat daily. i think we have kayla on this as well. what stood out to you here? >> to me, sara, the amount of stock that snap chat plans to sell, which is one of the very first things they list, that's going to be what is used to calculate the fees that the bankers will take home. julia just mentioned that goldman sachs and morgan stanley are leading this ipo. they have worked together on various high profile ipos from twitter to facebook although with sort of alternating leads on those. we'll see exactly what share of the deal size they'll actually end up. it's not actually a lucrative business. these are such sought after deals to lead that oftentimes the issuer, the company can negotiate down the fees extremely low. the underwriters for twitter shared $60 million. when you think about how much money these banks make.
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these are pennies compared to the other parts. it's really the bragging rights, the marquee name you can say you manage and go and win other ipos down the line. of course, in you're leading it and it goes poorly, then you're the one that ends up with the blame. facebook, morgan stanley ended up with mud on its face, although in hindsight the fact that they priced that deal at $38 a share now facebook is trading up 130 bucks a share, looks pretty good. twitter was praised for being basically seamless in the way it traded although it has traded down and had so much volatility in the business in the fundamentals have been weakening. we'll see how the bankers manage this, how much stock they sell. $3 billion conservative? do they want to sell more of that and exactly who is going to be selling the stock? is it going to be insiders or investors who invested some time
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ago? is it going to be brand-new issued stock? we'll see when we get a little bit more details. interesting it's $3 billion. biggest social media ipo since twitter. biggest tech ipo since alibaba. kayla, thank you. and julia tauted that revenue per user as a key metric that they're using globally. even higher for north america. that figure is 2$2.15 versus 65 cents. >> are you on? >> yeah, i'm on. the hype begins now, right? >> yeah. >> we've seen this story before. does this become another facebook or does it become another twitter? once it's opinion in the market for a while. >> we're going to have to go through the numbers. >> we will come back. we've got much more on uber's ceo leading president trump's advisory council and there's a lot more beyond that. >> amazon earnings. remember that. >> we'll come back in just a moment.
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mb b 5 all right. we are on top of two big breaking stories this hour. snap just filing for its ipo and uber ceo travis kalinick leaving trump's advisory council. >> it's been a busy afternoon here. we were able to confirm from uber that travis kalinick has stepped down from president trump's advisory council. we were able to obtain an e-mail
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sent out to employees in which he writes earlier today he spoke with the president and let him know, quote, i would not be able to participate on his economic council. he said joining the group was not meant to be an endorsement of the president or his agenda, but that. this follows a few days the uber has been under fire in particular, even though there are other ceos on the council, but again we have confirmed this from the company and we also got a hold of this memo where travis explains why he decided to step down. we'll continue to monitor and just note as well that of course and we've been able to confirm sense and now have the memo from the company. >> we also monitor president trump's twitter feed as we always do, of course. >> he's boughing to pressure as he suggested he was doing. >> from blows and from some of these drivers and for the public and customers as kara fisher told us. we're going to have a lot more
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here on the snap ipo filing just hit the wires. we've been digging through and got some more numbers for you when we come right back. uibotro hasess ngs. know sne ...sui uibotro aouwhers. hasess ngs. know sne
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. >> we are just getting all the details here on snapchat the and she has the latest for us. >> as i dig through i'm focusing right now on the risk factors and there's a very unusual one here. the company saying that as they issue the class a common stock in this filing, it will not die loout their controls. and this cannot predict the
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impact of the capital structure on their business. another interesting thing here in terms of what snapchat's demographics are. there is a ton of competition snapchat is free and easy to join in the barrier. the switching costs are also low. they note the majority of their users ar 18 to 34 years old a demographic that may be less brand loyal. users 25 and older visited snapchat approximately 12 times and spent approximately 20 minutes but users younger than 25 visited snapchat over 20 times and spent over 30 minutes on snapchat every day on average during the same period. so that's both bragging rights to show that dramatic engagement. pretty significant engagement there but also the fact that that younger demographic tends to be fickle. we'll be back to you with more details. >> wow. so the stock they're going to
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issue here at the new york stock exchange will not have any voting rights. >> very unusual. >> crazy. crazy. >> they've listed capital, apple, facebook and gookle, twitter, lime that's another one of the risk factors. up next we'll recap what has been a very busy day for earnings. >> i remember that now. that seems like so long ago. >> politics and more. we'll be right back. ringetinred s e aaests i*tre,
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>> where do we begin? so snap has filed its ipo. you're going to read something that was very interesting. uber ceo revealed to his employees a little while ago that he has stepped down from president trump advisor council was an endorsement of president trump's strategies as pertains to immigration for example. so he's stepped aside and let the president know about that. we had earnings from amazon, go pro, visa, all just in the last hour. amazon is down 4 1/4%. they hit on the bottom line. >> they beat on the bottom line. >> that's what i meant.
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chipotle has now turned positive after being lower earlier. go pro continues to suffer down 14% and fire eeye among others turned in a lousy report. >> the highlight of that hour was that snap filing. 158 million daily active users. you can compare that with competitor instagram for instance, which we just learned from mark zuckerberg has 400 million day active users. when it comes to north american revenue, one dollar a little over a dollar from global revenue. it's not a profitable company. perhaps the most interesting is the description that's getting a lot of attention on social media about the history of snapchat from the s 1 i read. many people didn't understand what snapchat was and said it was just for sexting. even when we knew it was being used for so much more.
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remember that? >> i do. by the way, the stock that we'll be issued here at the new york stock exchange, no voting rights. very unusual. >> it will be the ticker snap. what i day. >> we'll see you tomorrow. "fast money" starts right now. >> it is an earnings extraf began z-a on this very busy night. we've got full team coverage. done those stocks are volatile in the after hour sessions. am general is up over 3%. chipotle is higher. filing its ipo in the last hour and there's something in that


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