Skip to main content

tv   Closing Bell  CNBC  December 16, 2019 3:00pm-5:00pm EST

3:00 pm
the market's assessment of it, but it has been fundamentally a non-factor, either economically it would seem, and certainly not in stock prices. >> let's see if that changes we'll see if it becomes a bigger part of the market conversation. but to your point, trade really dominating the headlines that does it for us on "power lunch. >> and "closing bell" starts right now. >> seema, tyler, thank you welcome to "closing bell." i'm contessa brewer in for sara eisen today and we are at the boeing post. that stock off 3.5%. moderating the gains on the dow. the component under pressure we have details on why coming up as we count down to potential record closes on the dow, the s&p, and the nasdaq. wilf >> contessa, thank you i'm wilfred frost. good afternoon let's have a look at what's driving the action optimism over the trade deal with china driving all three majors to new highs with the nasdaq leading the pack today. boeing sitting out the rally and dragging on the dow on new
3:01 pm
concerns over production of the 737 max jet. and positive news on the housing front, as home builder confidence jumps to its highest level in two decades coming up next hour, former treasury secretary jack lew will join us to discuss trade and the economy. you do not want to miss that and with us for the whole first hour of theshow, dan nathan from risk reversal advisers. dan, good afternoon. thanks for joining us. >> great to be here. >> more optimism on trade or whatever you want to put it down to is a lot of this news not already out there? are you surprised to see ongoing rallies to new highs yet again >> at the end of the day, you like to see follow-throughs. so friday, we had a muted react. a lot of investors expected some kind of surge, similar to what we had at the end of 2017 after the big tax cut. a lot of this was priced in. i think the continuation of last week's rally into this week is obviously pretty establibullish. also fairly seasonal as we are looking down the barrel of a week and a half left of the market in 2019, a year that the s&p 500 is up 27.5%. it's hard to find reasons to
3:02 pm
sell the market right now. >> let's drill down on all of the big stories we're focusing in on today. bob pisani is covering the names driving the markets to new highs. phil lebeau has details on new concerns about the 737 max and analyst mike boyd will join us to break down where boeing goes from here kayla tausche is in washington with the latest on trade let's kick things off with bob tonight floor of the exchange. >> breakouts very strong at the open over 200 new stocks hitting highs at the new york stock exchange very powerful rally we've got. it's led by the banks. higher yields and a steeper yield curve. this has been going on for the last couple of weeks new highs in almost every single day as well as the super regionals like u.s. bankcorp and regions financial. technology apple consistently on the top, but so are a small group of semiconductor stocks like micron they got an upgrade today over at susquehanna, qorvo, skyworks and others all 52-week highs
3:03 pm
do we have more visibility in 20 #? the market seems to be saying that it does vix very rarely at 11. not many times has it hit that low. it's there again today finally, just high-yield stocks. bottom line, new high there, as well guys, back to you. >> thanks for that, bob. meantime, boeing is sitting out today's rally amid new concerns about the 737 max. phil lebeau has thosedetails for us from chicago. hi, phil >> hi, contessa. the boeing board of directors wrapping up the second day of a two-day scheduled meeting here in chicago, discussing the 737 max production what they're looking at is whether or not to slowdown or halt production of the 737 max i'm told by sources familiar with the discussions that they're more likely to halt than to slow down, if they change the production at all. just a reminder, they are building 427 737 maxes per month that's a production rate we last saw back in 2016 as you take a look at shares of boeing, remember, this is also the time after meetings like this where they announce what the quarterly dividend is.
3:04 pm
they have not cut their dividend it's always either been sustained or increased going all the way back to 1937 let's see if there's any change in that dividend if we get an announcement either today or tomorrow morning. guys, back to you. >> okay, i know you're monitoring that closely. thanks for that. joining us now from denver, mike boyd, chairman of boyd group international, which is an aviation forecasting and consulting firm. it's nice to see you today give me a sense of how you're looking at the challenges that boeing is still facing, mike >> well, the point is, when you have an airline like southwest, it desperately needs these airlines outing it off until the first quarter, that means they see something that's going to delay these airplanes. boeing has to do something in the meantime they're rung out of places to park airplanes, and yet they have to have suppliers screaming at them. remember, the day they announced this airplane going back into the sky, we probably have six to eight months of digesting what already has been produced. >> so if you're sitting there
3:05 pm
with 400 new max units since march, do you think that a cut in production is absolutely essential? >> at some point, they're going to run out of places to park them and at some point, they'll have to figure out how to handle their cash flow. so i think it really is. but once this deal is done, again, you can't dump 40 airplanes on american airlines that's going to be over a couple of months. so i think they may want to cut back on the number of airplanes that are sitting out there and reconsider >> mike, does dennis muilenburg still have credibility in investors' eyes? >> well, he must, because he's still there and he has credibility with the boeing board of directors the question is, does the max have credibility and to be very honest, it's almost become a joke now, the word "max. again, what they need to do is sort of repackage that airplane and they're not moving in that direction. >> hey, mike, does it trouble you a little bit, though, that the company was moving at a much quicker pace to get that
3:06 pm
airplane recertified and get those production levels going. and it really took the faa to slow things down, finally. you know, going back to the question about muilenburg's credibility. it seems like they really wanted to get this thing going faster than the faa wanted them to. >> i think they did, but i think that again, with -- it's not just the faa, it's caec in china. they want to make sure it's right for them as well for boeing, it's out of their control right now. >> dan, what do you think about the stock? >> i think mike mentioned cash flow they had $26 in cash flow per share and now they're expected to be flat from 26 to 0. and that's the story if they halt and they have this drain on cash flow, they have these fixed costs to make all of these planes they have a backlog of 4,500 planes to me, i think, unfortunately, if you do get a halt, the ceo will be on short time and 2020 is kind of lost in my opinion for the stock. >> mike, one more thing here
3:07 pm
what about the suppliers >> excuse me >> the suppliers >> oh, it must be huge because it's not just the good riches of the world, there are a lot of smaller suppliers there, and at some point, they're going to say around the world, it's not worth pouring money into this unless you can give me some money. and boeing, they're not getting any money for these 400 airplanes that are sitting around at some point, the suppliers might pull the plug, and we don't know, some may have already done so. >> mike, just one final thought, mike how damaged is the brand of the max. the president tweeted about that today, suggesting they might need to rebrand the plane. even under that rebranding, potentially. are customers ever going to want to get on this plane again >> well, yeah, they should remember, the consumer has a pretty short memory. but let's be real blunt here i mean, the brand is damaged so you need to come out -- my opinion. and i'm not a madison avenue guy, but they need to come out
3:08 pm
with something called the ultra or something else so people think it is not the exact same airplane and it won't be >> mike boyd, thank you so much for joining us today we have some news now on fedex and amazon, eric chemi has that story >> fedex stock dropping after they said amazon is blocking third party sellers from using it for prime shipments citing a decline in performance heading into the final stretch of the holiday shopping season. the ban on using fedex starts this week and will last until the delivery performance of these ship methods improves, according to an email amazon sent sunday to merchants note, amazon had already stopped using fedex for its own deliveries in the united states, but third party merchants had still been able to use fedex cnbc has reached out to both companies for comment, but the stock there dropping a percent and a half after being positive earlier today. back to you. >> eric, thanks so much for that dan, any thoughts on fedex stock at this level? >> we know this is a crucial week we know that u.p.s. and fedex
3:09 pm
have had some problems delivering up to amazon's specifications at the end of the day, fedex is going to report, tomorrow, they'll report earnings tomorrow after the close. that will be pretty interesting. the stock has been kind of battered over the last couple of years. we know that amazon has set their sites on logistics they want to put fedex and u.p.s. out of business or make them a second or third source. to me, i think this is an amazon flex right now the timing is not great for fedex. >> they're flexing with fedex, but not flexing with the united states postal service. you want to talk about performance issues as a customer, i'm saying. >> fedex stock moving over 2% on that news. it had been in the green, partly because of trade optimism, perhaps. but now very much in the red, down 1.7% today. turning now to trade, as the u.s. and china agree on a phase i deal, potential problems arising on the new nafta or usmca. kayla tausche has more in washington kayla? >> reporter: wilf, mexico is outraged that the u.s. version of the new nafta allowed for
3:10 pm
five inspectors to regulate its labor reforms on the ground. so mexico's chief negotiators returned to washington to make sure that provision wasn't as heavy-handed as it sounded >> these personnel will not be labor inspectors it's not the kind of inspector that had been disclosed for the whole year >> the error appears to have been cleared a statement from the u.s. trade representative says they're no different than existing inspectors that the u.s. government has in mexico the usmca still teed up for a house vote on thursday guys >> kayla, thank you for that you know, it's funny, because usmca has somewhat been overshadow ed by the importance of the u.s./china deal, but this is a deal that really matters to a lot of business's bottom lines. >> china is less of a trading partner than mexico and canada combined we know this deal was agreed upon months and months ago obviously, the ratification was a foregone conclusion. i think it's important but it's also important to remember this is a rolling trade war. it really started with some
3:11 pm
threats about auto tariffs in europe and metal and aluminum and steel and now we're in south america. it so looks to me that you'll have some trade stress in the global economy for some time to come, because even with this phase i deal with china, we don't have a huge rollback of tariffs as it is so i think the trade situation globally is going to be really tense more at least until after the election >> but if usmca passes and gets ratified, one can see the president getting behind that and for those trade partners, at least, not starting another role in trade role. he has formed on whether it's backing down not least going into an election year he'll want to pin success on to this >> i think there's one thing that's very clear about this president, that he has weaponized tariffs what did he do when he didn't like what was going on with immigration? he threatened tariffs. that's not something you would generally do so i wouldn't put anything off the table. and i'll tell you, whatever we just rolled back with china, if he doesn't like what's going on over the next couple of months
3:12 pm
or as we work towards a phase ii, there will be more tariff threats. so to me, i think the phase i is kind of toothless at the end of the day. it's not much of a win in my opinion. >> it's nicely higher today. set for three all-time record highs. the s&p up 0.8%. 48 minutes left of the session still ahead, former treasury secretary jack lew will join us live here at post 9 to discuss the state of the economy, the 2020 election and much more. >> up next, the fin tech fight we'll bring you details on a brewing battle between venmo and one major brick and mortar bank. the empire state manufacturing index beating estimates in december with a reading of 3.5 and home builder acceptability hitting a 20-year high in december, topping estimates with a reading of 76. "closing bell" will be right back at fidelity, online u.s. stocks and etfs are commission-free. and when you open a new brokerage account, your cash is automatically invested at a great rate.
3:13 pm
that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk
3:14 pm
while our competition continues to talk. when it comes to using data, which is why xfinity mobile is a different kind of wireless network that lets you design your own data.
3:15 pm
choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to other top wireless carriers. save up to $400 a year when you switch. plus, unwrap $250 off a new samsung phone. click, call or visit a store today. 45 minutes left to go to have the trading day record close watch for the dow, s&p, nasdaq, all sitting comfortably over the levels to beat let's check in on an individual market mover shares of ww are moving on news
3:16 pm
oprah winfrey is extending her partnership with the wellness company into 2025. winfrey has been a board member, strategic partner, adviser and shareholder of ww. the company formerly known as weight watchers. she's been there since 2015. and as you can see, that stock is up 3.5% on the day. >> the power that she brings fantastic. >> the oprah touch >> it's been a banner year for investments in fintech companies, but an influx of cash hasn't led to my buyouts for certain -- or ipos kate rooney is in san francisco with that story for us hey, kate. >> hey, wilf, good to see you. finance start-ups are attracting billions from private company. despite that, very few liquidity names. there are now more than 58 so-called fintech unicorns out the there. we saw last week, but otherwise, not a lot of
3:17 pm
megadeals. these private price tags has not made banks big buyers here the most likely path is an ipo, according to investors but when these finance start-ups do end up tapping public markets, investors may not see them as a tech company the most obvious comparison is a bank, that don't trade at nearly the same multiples wilf >> i love all of these stories and we discussed at lent recently it was on a sort of 20 times multiple, 20 times sales multiple i guess the difference being that it created a huge amount of value, these start-ups but i'm not sure they've taken that much revenue from the big banks, which is slightly different from an uber threatening taxis or an amazon threatening retailers. >> when you look at the actual user numbers, they're tiny compared to jpmorgan, but the public comparison of when these companies actually go to ipo,
3:18 pm
investors have said, they're not a tech company in many ways, they're not a bank they barn with u.s. bank or some of those chartered banks in utah so public market investors will really want to see the value we saw it with wework, it works in private markets investors are wondering if that can carry over to an ipo which we haven't seen a lot of it, so it's sort of uncharted territory. >> kate, stay with us. "the wall street journal" this weekend highlighting tensions between fintech and bill banks after some pnc clients experienced trouble connecting their bank accounts to venmo or they had been connected and suddenly they weren't connected anymore. both companies gave customers different instructions about how to solve the problem venmo tells users to tweet their concerns to pnc. pnc told customers to switch to zell instead zell is a venmo competitor that pnc and other big banks operate jointly. at issue here are these wider
3:19 pm
concerns among the big banks, reportedly saying look, we have security concerns that limit access to customer information on fintech platforms the other part of this story is that they have a really proprietary view of the customer's information that belongs to the big banks platforms. >> i think the huge takeaway here is who owns the consumer's bank data? it could be the consumer, and that's what the banks would say, but is it really your data if you can't export it easily or move it to a consumer app like venmo. you have these consumer third parties like plaid which has become a middleman in this instance i spoke to a few experts and lawmakers who basically said, this open banking issue is a real problem, and something like this with pnc arguing with venmo over what is best for the customer really underlines that open banking issue, which we've seen in the uk with some legislation there. we'll sea what happens in the
3:20 pm
u.s. but i think that's sort of the big takeaway, is who owns that consumer data? >> that's a big question kate, thank you for that coming up, one wall street firm just put out a naughty or nice list for stocks, nine days ahead of christmas we'll reveal the naughtiest name on wall street >> plus, goldman sachs ceo david solomon penning an op-ed in "the new york times" focusing on two major challenges facing the economy. we'll tell you what they are and how he plans to address them
3:21 pm
3:22 pm
3:23 pm
welcome back to "closing bell." time now to get to the word on the street rbc capital markets out with its 2019 naughty or nice list. general electric tops the nice list due to demonstrated traction in its turnaround plan throughout the year, the first year for ceo larry culp. ge is up more than 50% in 2015 3m taught tops the naughty lis rbc saying five cuts have tarnished some of its reputation as a defensive high-quality safe haven. that stock down about 11% this year and next up, imperial capital lowers its 2020 estimates for msg networks the firm says it faces near-term risks as it negotiates two different affiliate deals and a shaky performance by the new york knicks could make it harder
3:24 pm
for the to reach a deal with distributors >> and citi upgrading goldman sachs from buy to neutral saying a lack of credit risks gives the stock a favorable risk reward. citi also raising its price target on goldman by $35 to $255 per share. the interesting thing on this, if you look at morgan stanley's price to book and goldman sachs's price to book, there's a 12% gap in the two multiples at the moment two big questions for goldman come early in q1 one is the mdb, the other is the strategy update. that gap closes is worth 12% or so upside. the question is, which of those two prices weighs on the share price more if both go well, they could be going 12% higher very quickly. >> this is a stock 13 months ago is trading right where it is right now. it's important to remember the five-year and post-crisis high is about $280.
3:25 pm
if you get that back above book value, you'll have a stock moving back towards those 2017 or 2018 highspretty quickly. and i think when you make a comparison of some of these investment banks, you have to think about, who is the purest play investment bank and it's these guys you get some of these other issues about what the strategies are, and i think this stock kind of rerates >> from all of the conversations i've had with various sources, i getting the feeling that it's getting much closer. i refer people back to john waldron's comments to me last week he was very, very clear on the strategy update, well prepared, he's confident about it. some other reports suggest he lowball it or don't give estimates. possible that both could be successful in q1 sticking with goldman sachs, ceo david solman out with a new op-ed in the "financial times" on social and environmental impact investing dco calling attention to what he says are two defining challenges facing the economy, climate
3:26 pm
change and economic inequality saying there's not only a powerful investment case to act on those issues. writing that goldman sachs plans to target $750 billion of financing and investing over the next ten years in areas focused on climate transition and inclusive growth solomon suggesting the best way to fight climate change is to have governments put a price on carbon through a carbon tax or other means. it's a very good read, and most importantly, that general theme about making this something that capitalism has to support rather than it always being a charitable cause is the only way to solve it midterm. it's always a bit of a rich criticism. if you go out and put yourself out here with this type of op-ed, you're kind of inviting that criticism next time that the cycle comes around we'll see how it plays out, but it's definitely worth a read >> i think it's interesting that he's throwing the gauntlet down. and probably not just for the
3:27 pm
goodwill that it turns him among people who care about the environment and climate change, but also because if you could get governments to act in concert, then it levels the playing field for those who are willing to do the right thing for the environment and, you know, to preserve climate change and not see it move any further, if you see everybody playing by the same rules >> he joins good company tim cook at apple, marc benioff at i think this is a good group to be in. they're going to lead. thought leadership is important from some of these, you know, massive billionaires in the world. so, you know, i think you're right, when you lay down the gauntlet and you're a bank and touch a lot of businesses in a lot of different ways, might be a software company or an iphone company does, you'll have to actually walk the walk that you just talked. >> absolutely. either way, trading higher today. we'll have more later in the show when we speak with one of the "wall street journal" reporters out with the a new story on esg funds that have drawn scrutiny from the s.e.c.
3:28 pm
lots more still to come here on "closing bell. don't go anywhere. we'll have former treasury secretary jack lew here at post 9 live we're back in a couple of minutes.
3:29 pm
do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere.
3:30 pm
prevagen. healthier brain. better life. when it comes to using data, which is why xfinity mobile is a different kind of wireless network that lets you design your own data. choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to other top wireless carriers. save up to $400 a year when you switch. plus, unwrap $250 off a new samsung phone. click, call or visit a store today.
3:31 pm
29 minutes left to go in the trading day. here are the three things driving the action the major averages hitting record highs on optimism over that phase i trade deal with china. boeing sits out the rally today on new concerns over the production of the 737 max and home builder confidence jumping to its highest level in two decades. let's get a cnbc news update now with sue herrera hi, sue. >> hello contessa, hello, everyone here's what's happening at this hour a federal judge has set a sentencing date of january 28th for retired lieutenant michael
3:32 pm
flynn following his guilty plea of lying to the fbi. in a separate 99-page order, the judge rejected argumented es by flynn's attorney alleging misconduct by the fbi. at a town hall meeting, elissa slotkin getting a strong reaction about her op-ed explaining why she's voting for impeachment. she spoke to a large crowd in a detroit suburb about her opinion piece in the "detroit free press. >> i hope that even if people don't agree with my decision, they see that i based my decision on my personal integrity and that is the most that i can do to show people that i hear them, even if we don't agree. >> reebook is introducing an echo-friendly running shoe that's plant-based it boasts its forever float ride grow shoe rivals the best performance running shoes on the market it will launch in the fall of 2020 everything is plant-based these days that is the news update. you're up to date. back to you guys, wilf
3:33 pm
>> a response, somewhat to all birds, i feel like >> absolutely. >> lovely to see you, as always. we'll see you again next hour. as this decade comes to an end, bespoke investment group is looking at how the last ten years compare to previous decades. paul hickey, cofounder of bespoke, joins us now at the telestrator and you have a couple of charts to talk us through on this topic. >> we have two years left in the year, in the decade. we want to see how things stack up this decade compared to prior decades. it seems when you talk to investors, everyone just thinks that the market has done nothing but gone up in the last decade it has been a very strong decade we're up about 185% in the s&p 500 so far in the 2010s. the 1990, we were up 315%. 1980s, 227%, and the 1950s, 257% so, it ranks as the fourth best decade for u.s. equities in the last 110 years
3:34 pm
but we always hear reference to the '90s we were up 313%. so this is nothing compared to this, i think. so i think in that respect, it has been a very strong decade for stocks, but nothing unchartered or off the beaten path what makes this decade unique, though, if we move along to the next slide, if we look at the standard deviation of returns, how much the returns have differed year-to-date, this decade has been the calmest equity market we've ever seen in u.s. history so for all the talk about how things have been so over the top and so extreme, the weakest was a 6% decline we only have two other decades when we saw a less than 10% decline in any year. this is the mildest, weakest year and the strongest year was 26%
3:35 pm
and that is the, you know, that is the fourth weakest of the best years for any decade. it just goes to show that things are very calm in the last ten years, despite what most people would have you believe >> if we went back to the first chart whilst we discussed, paul, i wonder whether, if you focus in on that '80s, '90s return, given that, of course, we're now questioning whether the next decade can be as strong again, like the '80s following the '90s showed, stripping out all other factors, was economic growth through both of those decades strong enough to support that, ie, if we're going to see a repeat of what we've seen in the last decade next decade, do we need to see very strong growth throughout that period >> for starters, i think to expect a decade like this past decade again i think is a little bit, you know, too much cake, so to speak but i think we can definitely have a positive decade here. as long as -- the key is, the' 80s and '90s, there were periods of tranquil economies, steady growth this is the only decade we've seen in u.s. history, again, that we didn't see a recession so i think as long as you get
3:36 pm
economic growth and steady, it doesn't have to be gangbusters but if you have steady growth as well as a fed that's at the market's back, which i don't think anyone would argue otherwise right now, you could have decent returns moving forward. >> the other point, dan, is for the past decade we've seen looking at s&p 500 returns, as we are, the biggest single structural factor has been the growth in these tech stocks, which now make up most of the index and most of the gains. looking to the next decade, you need to see something large and structural as opposed to 2% cyclical growth every year to justify the levels of returns we've seen in the past decade. >> the most important thing over the last decade is the fact that interest rates were at zero. and interstates around the globe were at zero the fact that the u.s. fed expanded their balance sheet by $6 trillion, and that doesn't even include what else was going on all around the world. and if 2018, q4, taught you anything about trying to normalize interest rates, what happened to the s&p 500, it dropped 20% in 2 1/2 months.
3:37 pm
if you want to talk about a tranquil decade for stocks, you also have to barbell it and discuss the unprecedented easy monetary policy of the fed that's the only way to have that discussion, because all of that other data from prior to 2009, doesn't really matter, because interest rates were basically at zero for the last ten years. >> paul's going to be joining us again a little bit later in the show paul, for now, thanks very much. we'll see you in the market zone we have some breaking news now on live nation let's get to julia boorstin with those details. julia? >> reporter: contessa, the department of justice could take action against live nation as soon as tomorrow that's according to a source close to the situation who tells me that the concert and ticketing company has until the end of the day today to respond to the department of justice's proposed remedies to violations of its 2010 commitment to not force concert venues to work with ticket master within the next few days, the doj could either file a motion that it has come to an agreement with live nation on the changes that the doj seeks or if talks break down, the doj could start
3:38 pm
the process of taking live nation to court. we've reached out to live nation and the doj, and no comment back yet. guys, back over to you >> julia, thanks so much for that, julia boorstin we've got just 23 minutes, 22 minutes left of the session. we are on record close watch at the moment, set for three record closes for the major indices the nasdaq is up a full percent. ♪ ♪ ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.
3:39 pm
3:40 pm
but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.
3:41 pm
welcome back to the "closing bell." 19 minutes left in the session here's a check in on the "closing bell" big board all the major averages hitting record intraday highs and on pace for their fourth straight day of gains below we've got today's biggest gainers. the biggest gainers on the s&p 5 500. green across the screen. >> 19 minutes left to go and dan, talk to us about your last chance trade. >> this time of you, you start thinking about how to position the portfolio into 2020, into the new year spot any is on most of your smartphones. it's a company that's been up 25% in the last month and a half
3:42 pm
or so. they reported an unexpected profit in the last quarter if they do that again when they report in february, with 250 million or so monthly active users and 115 million pid subscrib paid subscribers, this stock is going higher this thing is off to the races, maybe back to the prior all-time high near 200. and i think this is a really interesting name netflix has underperformed massively this year. we know why, content is going away from them i think they will have to horizontally expand their content offering can you think of a better one than streaming music and podcasts, which is what -- i think that they should be buying -- >> netflix should buy spot any >> yes, they should. >> and realistically, you think that might happen? >> it's a $30 million market cap and netflix has been withering over this past year from its highs. and reed hastings is a genius. he figured out how to kill blockbuster and figured out how to do a lot of other different
3:43 pm
things against the bad boys. >> it would also be quite a few a challenge to happen to enter into that space as well. >> no doubt about it i can think of google, of amazon, of five people who should come in and buy this asset right now. >> spotify is our last chance trade. we'll now take the final commercial break before we head into the close we'll come back and take you into the day's biggest movers. and later, our exclusive interview with treasury secretary jack lew you don't want to miss that. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
3:44 pm
(vo) thewith every attempt, strto free itself,pider's web. it only becomes more entangled. unaware that an exhilarating escape is just within reach. defy the laws of human nature. at the season of audi sales event.
3:45 pm
when it comes to using data, which is why xfinity mobile is a different kind of wireless network that lets you design your own data. choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to other top wireless carriers. save up to $400 a year when you switch. plus, unwrap $250 off a new samsung phone. click, call or visit a store today.
3:46 pm
you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today.
3:47 pm
14 minutes left in the trading day. we're in and out in the "closing bell" market zone. >> we're joined by dan nathan and paul hickey from bespoke >> let's kick things off with boeing that stock sits out today's big rally. bob pisani at the boeing post. >> big outlier, down 13 points, that's 4%. that's 90 points in the dow and that's the main reason the dow is dramatically underperforming the s&p 500. remember, boeing has, of course, suppliers all over the world to them, so there's a lot of companies that are being affected, including another dow component, general election. what's the connection? general election has a joint venture to supply engines for the max. they have that joint venture with another company that trades over in europe, saffron, that trades over in europe. both of these are down on the day. there's other companies tout there being affected, particularly some european
3:48 pm
companies. spirit aerosystems they make the max fuselage so that stock is also trading to the down side. guys, back to you. >> dan, we discussed this a little bit earlier, but it has been lower than this so far in 2019 does that give you some sense that it's going to bounce again. not as bad a piece of news we've had earlier. >> i'm shocked it's still up 346 people still died in the last year and a half on two flights that this company is clearly -- i think it's going to come out pretty negligent in why those planes came down in that last segment, the fact that the company was rushing to get this plane recertified so quickly, i just don't really get it here. to me, i think this stock has some support near-term at 320. and you see the 2018 low in december, down at $300, but after that, look at a five-year chart. it looks like of the last five years or so. there's a lot of air below
3:49 pm
and when you think about this cash flow going to zero in 2019. and what does a halt look like for this plane that was going to be so much of their manufacturing, 4,500 backlog for the max. for me, i don't think you step in and buy this right here >> the dow is still set for pa record all-time close. also, fedex shares under pressure because of a fight with amazon er eric chemi has the story >> fedex stop dropping from using fedex's ground delivery network for prime shipments, citing a decline in performance heading into the final stretch of the holiday shopping season the ban of using fedex starts this week and will last until the delivery methods improves. that's according to an email amazon sent sunday to merchants. note that amazon had stopped using fedex for its own deliveries in the u.s. but third
3:50 pm
party merchants had still been able to use fedex. >> thank you for that, eric. paul, what do you think about this is this a real shot across the bow for fedex? >> i don't know how they can resume once performance starts to improve if they're banning them all it's a matter of, i think fedex has an issue, the tnt acquisition didn't go through well for the company and they said when they lost amazon as their deliverer, that contract, they said, that would haven't a material impact, but i think it is. and more and more, you're seeing, especially in the suburbs, the trucks all over are amazon prime trucks. and that's -- that's eating into fedex's territory. and i think it's just a -- it's another headwind for the stock more competition in the space. >> paul, i want to ask about amazon, given that we had analysis earlier of comparisons of the decades is next decade a decade when amazon will have to grow into a reasonable p\e and how quickly does that day dawn >> we saw that issue in the late
3:51 pm
'90s i don't think amazon is nearly a similar argument as that but at some point, you have to -- the growth slows and you have to start growing into that multiple and it can be a gradual process. but, i mean, to see a repeat of amazon's performance over the next few years like the past few years, i think, is just lewd ludicrous to expect that >> josh lipton has more on what analysts are saying about that josh >> so, contessa, micron is now a buy. that's according to the team at susquehanna. the analyst boosting his price target as well to 85, saying he's looking for improving fundamentals here with tightness and shortages for the company's memory chips by mid-2020 he has also now bulled up on western digital, lifting his rating and price target there to 90 bucks, saying that next year 5g phone sales and new game consoles should help lead the way to tight supply and demand taking a step back, chip
3:52 pm
investors had been well rewarded in 2019. the smh, the etf that tracks the chips hit a new high today, surging about 60% this year. guys, back to you. >> thanks, josh. >> dan, what do you think? is there more room to run? >> we just talked about fedex and we said, listen, you're going to get their earnings. micron reports on december 18th. we'll get a really good sense of how tight that supply is and what does the -- listen, this is a sector and the smh, the etf that tracks the semis is making new all-time highs, doubling phone conference ov performance this area of the nasdaq a lot of it might have to do with trade there might have been double ordering for a lot of these tight-supplied sort of chips i want you to be careful a as you head into the -- this just went parabolic >> smh year-to-date up 62% or
3:53 pm
whatever it is, paul have they not priced in all the best news? >> they were down a lot in 2018. what was really notable the last downturn in the semithat is the trough was a lot milder than any other prior trough in the semis. and when you're talking about fedex and micron, you know, fedex's transports, that's the old guard. semis are the most important indicator and group for this market in our view as long as they continue to hit new highs, as they're doing, i think it bodes well for the broader market so, december 18th, micron earnings, that will be an important gauge to watch as long as they continue to outperform, it's hard to get negative on the market >> just under seven minutes left to go in the session let's get to meg terrell for a look at biotech's biggest movers >> two pieces of news have biotech stocks on the move a positive vote from a panel of
3:54 pm
outsider advisers to the fda for its drug for a rare eye disease. an approval decision from the regulator is expected by march amarin getting approval for its heart drug vascepa. the stock rose friday, but it has been down today, as investors already are gearing up for the company's patent battle over the drug. a trial is scheduled to start in january. finally, biomarin getting news for its medication on the most common cause of dwarfism >> meg, how is that being received among people in the little people community? >> it's a really important question, contessa it's a bit of a controversial drug some folks in the community don't believe that a drug that right now has proven just to increase height is something that the community needs or that achondroplasia is something that needs to be treated in that way. so it's going to be very interesting to see the response
3:55 pm
from this community next year as this drug potentially moves through the fda. >> meg, thank you for that a pair of headlines sending tesla stocks soaring today on pacer fior its highest close since december of 2017 mercedes benz will push back the release of its first electric vehicle until 2021, and a longtime bear giving tesla, quote, credit where credit is due. saying tesla is leading in the areas that will likely define the future of car making, like software and electrification on tesla, right now it seems like they own the markets. >> owns the market which market the stock market or -- the stock is up 14%. the s&p 500 is up 2,700%. this stock has come a long way over the last few months it wasn't just a disaster this summer when people were pricing it in. stock's up 14% owning the market, fine. they have this gigafactory
3:56 pm
mercedes pushing out a higher end vehicle that is gong to be going against their model "s." to me, the whole story about tesla is their ability to do this low-end model iii that is not where i don't think mercedes will be competing be them this is just a short squeeze in the year end i'll remind you guys that 380 on the upside is a level where this stock in each of the last three years has failed so i'm not sure i'm buying a breakout on that piece of news >> the commentary on tesla, once these other players get in, it will be game over for tesla. it's like free beer tomorrow we keep waiting for it the thing about tesla, their growth is going great. the one area to watch is customer service as they're selling more models, the commerce are having more and more complaints about getting good service i think that's the key issue to watch, as new models come out. >> especially if you're an early
3:57 pm
adopter. if you put your name on a list to register, you want to know that the customer is there for ifrt, too. >> there's going to be a lot of issues in the first iterations >> just over three minutes left of the session let's check in on uber rallying on news it could sell its uber eats business. >> ceo dara khosrowshahi says that eats needs to be the number one or number two player where they operate or they'd get out in india, uber is reportedly close to doing just that, selling its service to local rivals different reports have put the price tag at between $400 million and $500 million but here in the u.s., uber is third in terms of market cap to door dash and grubhub. if they can close that gap, khosrowshahi has suggested it might be worth waiting out, but will investors get impatient despite today's pop on news, shares are about 30% below its ipo price. back to you. >> thanks so much for that the market would love if it
3:58 pm
could be in a position where it was always the lead and didn't have price competition it's a long haul journey for uber to do that. >> i think that's great discipline i think the difference between the lyft story and uber story is that lyft is a pure play on ride share in north america, where uber is doing all things to everybody all over the globe i think investors will cheer them. >> let's get it over to rick santelli >> double that three and you're up six on the ten-year note. you can see a september chart there. we always seem to run out of gas a little bit when we get that 190, today's high, 189 if you zoom the chart year-to-date, you know what, we settle at 268@the end of last year toput some perspective on it when you look at the nasdaq, bertha, we are 21 points on
3:59 pm
today's low above friday's high. >> we've got records today in the chip sector, the communication sector, hardware sectors, and the big three are really what have been driving it all quarter. alphabet, really catching up there to apple and microsoft in terms of really seeing some gains. microsoft on pace for its best year in 21 careeryears. we're also seeing some small cap highs today in the russell 2000. and turning point therapeutics, it's one of the best-performing ipos of the year children's palace is a big gainr and part of the reason why you've seen the russell 2000 still below its all-time highs it's up on a purchase by the ceo. over to bob. >> boeing really a problem caterpillar has also done gone negativ
4:00 pm
negative still pretty low you want to look at something like that. there's the closing bell dow is sitting at the lows for the day, most of those declines that we've seen including boeing >> welcome to the "closing bell," everyone. i'm wilfred frost. >> let's check in on where the market finished. record all-time closes can once again for the three major averages the dow did lag behind the others, up only 0.4% today, because of boeing's troubles the s&p up 0.7% and the nasdaq up almost a full percent >> joining us, dan nathan, principle at risk reversal advisers and cnbc contributor, paul hickey, cofounder of
4:01 pm
bespoke investment group, and samantha samantha azarello. dan, let's begin with you. what's really driving the action >> i think in the last week, you had two headwinds to basically economic growth and also headwinds to kind of people feeling good about the markets kind of just been turned away for a few months or so that was obviously trade and brexit and now we're at this point of the year where we're up 27.5, 28% in the s&p 500, and there's really not too many reasons to sell stocks between now and year end i suspect you would close plus or minus a couple percent from here >> it was a very strong day for european stocks today, which might have helped, at least at the open here in the u.s samantha, do you think that improving global outlook is playing part here in these record highs >> i definitely think it's part of it. we think the manufacturing data globally is bottoming. i do think that it's priced in
4:02 pm
the s&p 500 is up on the last two months this is really just on sentiment and investors feeling better >> paul, is that investor optimism well deserved, or is there a possibility that we see a re-eruption of trade tensions and brexit, though it looks like it's going to happen, it's something that will rear its ugly head before it's a done deal >> there's always a possibility of that. but what we also need to mention is, the key trade in the last two months is the fed basically saying, we're not hiking rates they're like, we're serious, we're not hiking rates anytime soon until inflation shows signs of overheating right now the indicators aren't showing that when you lift the uncertainty, you have an economy that's stable a global economy that's stabilizing, a u.s. economy that's actually showing modest growth and a fed on the sidelines, it's a good recipe for stocks >> samantha, is there going to
4:03 pm
be an increasing focus therefore next year on earnings? and were you suggesting that you're not that constructive on earnings outlook for next year >> i think if you look at the fact that the u.s. economy will be growing at 2%, we can basically back out what research growth for u.s. companies is going to be. let's saysteady but slow globa growth i think buybacks are also coming down, we know that but i think margins are kind of the big thing that are still up in play. we really don't know from here if margins are going to deteriorate more or stabilize, and that's the key question for u.s. stocks next year. >> well, bank of america did give a bullish outlook for q1 of 2020 earlier today the firm expects a market meltup as well as the federal reserve and european central bank continuing to add liquidity. and the u.s. ten-year to hit 2.2% by february 2 >> march 3 would be 33, too
4:04 pm
i mean, as well. >> it's a little -- it's convenient i wonder whether they altered their expectations to fit that or not let's assume they didn't paul, do you think those are reasonable expectations. first on the stock market that we can have a surge in q1? >> i think we can see an average year for the market going into next year. i don't think we've borrowed from future returns, statistically, when you see strong years, you don't necessarily see major underperformance the next year but that pattern that they were talking about would run counter to the year for election pattern, where you typically see weakness in the first half of the year and as the candidates shake out and you find out who's running on both side, that's when the market starts to rally in the second half. that would be a complete opposite of the typical pattern. >> how important is the weakening dollar in what happens the first quarter of next year >> very much so. you think of some of the largest s&p 500 companies, they get 40 to 50% of their sales from ouds the u.s. samantha said something that is very important
4:05 pm
what is priced in? we started 2019. i think consensus was for 174 in earnings for the s&p 500 right now, it's looking like about 162 or so. yet the s&p 500 is up 28%. so what does that tell you we've just seen multiple expansion. that means there's enthusiasm about future profits if those don't start to come in as we get into 2020, you'll see contracting performance and contracti ining multiples. >> in the bank of america note, that they not only expect a pickup in stocks in q1 but a pickup in yields, do you think you need to see both to see either will that correlation hold next year >> it's an important question, right? we look year-to-date and clients feel good and we want them to feel good, but stocks are up 29%. that doesn't actually make sense, right, when you think about correlations so maybe you get a little bit of a bump in yield on technical factors, but it's hard to see
4:06 pm
stocks moving up significantly in q1, at least in our view. >> goldman sachs says a drop in stock buybacks could lead to market turmoil next year in a new note, the firm says they expect buybacks to drop by 15% this year and decline by another 5% in 2020 it says a greater that expected decline next year could lead to slower eps growth and increased volatility but despite the worry, goldman is bullish on equities for 2020. it currently has a year-end target of 3,400 for the s&p 500. the stock buybacks clearly have added a tailwind to the market's performance over the last couple of years what do you think, dan >> listen, corporate has just got a huge gift this year. there was three 25 basis point cuts by the federal reserve. it made it that much more attractive for them to take out debt and buy back their stock. for some of these megacap names that we know have a ton of cash and the ability to borrow, i'm not so certain microsoft is up
4:07 pm
as much as they are or apple up 80% on a year, that these companies will continue to buy their stock at these sorts of levels you may see that moderate somewhat in q1 >> do you think we would start to see them instead use the money to deploy capital investments. >> so what dan's point is, these stocks are up a lot. and buybacks in that were down 15% this year. how much is the market up this year it's up 27%. a decline, it's not as binary as falling buybacks result in falling stock prices 2018, we had a down year it's not all about buybacks. they're an important part of the market, but if we see stronger than expected economic growth, that will be a positive catalyst >> paul, all else equal, even if we don't see a rise in capex, should we not see a fall in buybacks when stock prices have risen. at least some ceos should be
4:08 pm
looking at it thinking, my stock's not that cheap >> if you're seeing the stocks steadily go higher and keep buying back more, that's what we saw in the early 2000s, just buying stocks that became incredibly more expensive. that would be a prudent strategy to lower buybacks as valuations expand >> some of the banks could be on a 10% yield if they shift all buyback into dividends >> which are one of the only sectors that are below their historical average p\e ratio over the last ten years. and the second biggest -- one of the top sectors. so that's a catalyst potentially for next year. >> to that point, sam, do you think financials are set up for a decade of running ahead? >> we like financials. we like any sector where total shareholder yield from dividends and buybacks is above average and the top of that list is financials >> all right thank you very much, samantha asarelo. appreciate the conversation. up next, former treasury
4:09 pm
secretary jack lew joins us live at post 9 to make a major announcement who he's endsi ithorngn e kn2020 presidential race. this is a big interview. you do not want to miss it "closing bell" is back in 90 seconds. etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully. demand has never been higher for what we do. creating compelling, engaging, and informative content and experiences. with this merger, viacomcbs will be one of the largest and most influential content creators in the world. i know we can deliver on the
4:10 pm
full potential of this amazing new company. wat t. rowe price, hundreds of iour experts go beyond thehe numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story. t. rowe price. invest with confidence. welcome back three record closes there on the stock market today jack lew, former treasury
4:11 pm
secretary under president obama, is here with us on set to make an announcement. in the crowded field of democratic 202 presidential candidates, he's announcing exclusively now on "closing bell" that he will endorse former vice president joe biden for president. mr. secretary, thanks so much for joining us great to see you >> great to be with you. >> talk us through the reasoning. why have you gone for vice president biden? >> i've known joe biden for 25 years, as senator, as vice president, and then as a person. i think the times we're in call for somebody with both a heart and the experience to address some very serious challenges joe biden has both the heart to care and the experience to lead. he has demonstrated his deep concern for an economy that works and works for working americans. for restoring american values, and to restore america's
4:12 pm
leadership as the global and economic leader that we need to be he's also shown he surrounds himself with people who really are the leaders of the next generation, and that he has the ability to reach across party lines and within the democratic party to all parts of the democratic party candidly, he has the experience and the ability to make donald trump a one-term president >> but can he win? >> i believe he can, yes >> do you fear -- some people have suggested that he's not as energetic, as on the ball as perhaps the vice president you worked with was at times does that criticism in any way bother you >> i have seen joe biden over many years, always demonstrate both the capacity and the endurance to get things done i don't think that's any different today. he, sometimes, has stumbled over a word here or there, but that's not new. what matters is a record of accomplishment it's a record that i saw in economic discussions, where he always was the one who brought
4:13 pm
it back to, what does this mean for the american economy and for american workers for the global discussions what does this mean to make america safer and to have america be the leader that we need to be those are all the skills we need in a president >> let's talk a bit about what his platform is and what he thinks going forward he wants to increase the capital gains tax rate, pay for infrastructure through changing taxes on corporations and wealthy. he wants to increase existing taxes on upper income americans. is that the right approach for this time? >> i think who looks at our tax code sees that there are things in it that are broken, that are unfair the proposals to fix it are going to mean looking where it's possible for individuals and businesses to avoid taxation and addressing those that's what tax reform really means, not just cutting rates. i think if you look at what he has stood for, it's been for the kinds of measures that make sense.
4:14 pm
when i was at the treasury department, i didn't hear a single corporate ceo who asked for a 21% corporate tax rate so there's room in our tax code to make changes, to raise more revenue, and to make the system more fair. and if we want to pay for the things that we need to do to address the need in this country for infrastructure, for education, you know, for health care, we're also going to have to find ways to pay for it >>does senator warren and senator sanders go too far on those economic issues? >> look, i think there's a lot of talent in the democratic field in this campaign i think there's ideas that run the full gamut my own view is that to win this election, it's going to be important for democrats to articulate positions that can bring the democratic party together and also reach out. i think the kind of centrist ideas that, you know, vice president has talked about and a number of the other candidates have talked about are the way to win. i also, from my own experience,
4:15 pm
working for one of the lions of the progressive democratic party, tip o'neil, we used to call the democratic matter a big tent there's room in the democratic party for a lot of views, but you have to be able to reach across the party and sometimes across party lines >> you said at the top that you believe that vice president biden can win. can senator warren or senator sanders beat donald trump in your eyes? >> wilf, i've always been the policy guy as i told president obama when i became chief of staff, don't expect me to tell you where you need to be when you're running for re-election. what i know is that in every survey that i've seen, joe biden is the strongest candidate nationwide in the key states that we have to win to win the election, he is the strongest candidate and i think that's actually something the democrats care deeply about this is an election beyond normal importance. having another four years of what we've been going through could do such deep damage that it's going to have to bring the party together
4:16 pm
>> but we have record-high stock market we have unemployment that we have not seen in 50 years. as president trump been great for this economy >> so, you know, i think you won't be surprised when i say that he inherited a pretty strong economy we're in the 11 th year of a recovery, seven years of which happened in the obama/biden mrn administration i'm very proud to have been a part of that i actually think this economy would be stronger today if we had a president who didn't create the kinds of anxiety and uncertainty that has led businesses to sit on their hands instead of making investments. >> you mean about trade? >> about trade, and that has led to geopolitical risk around the world that's kemppt everyone on the edge of their seats, day-to-day, hour-to-hour i don't think that's leadership. i think leadership is protecting the rights of american workers and fair trade it's not about being soft, but i don't think that what we've seen over these last three years fits any definition of normal >> but you must accept, i guess,
4:17 pm
that it has scored points for the president to take on china would you advise, whether it's vice president biden or anybody else, would you advise them to continue a tough rhetoric on china in order to win this next election >> i think that we as a country have to join for difficult issues with china, as we did when i was at the table with china. there aren't any issues that are being discussed now that are new. i would point out that the china deal that was reached, and i'm glad a china deal seems to have been reached because a cease-fire is for the than an escalating trade war it doesn't resolve the big is e issues those issues are still there i think joe biden knows what those issues are and knows how to engage china in a tough way and do it in a way that doesn't create unnecessary conflict that could get out of control, as this trade war has done. >> i want to come back to the broader, how this all boils down to affect the economy. and you joined us here on set
4:18 pm
last, on july 2017 and here's what you had to say then about the trump economy >> we have an economy that's full floiemployment and we've thrown trillions of dollars of stimulus into the economy. that's going to punish off over time i wouldn't sit here and predict that the economy will take a turn in the next month or two. there's enough kerosene on the fire to burn for a wile. but when it burns off, there's going to be a problem because of the policies that have been in place. >> that was july 2018, not '17, my apologies are you still surprised at how well the kerosene is burning, as it were? >> i'm not surprised that we've seen the economy pop up a little bit because of the kerosene. and it's come back essentially to being growing at potential gdp. i think we could continue to grow that way for some time and we are more likely to if we stop
4:19 pm
getting into these fights with every country, our closest allies and our adversaries over issues that have as much to do with rhetoric as policy. i think that the trade war has actually been the biggest risk to the economy in the last six months to a year i don't know you may know better than that i do where we'll be a week from now or a month from now. i don't know what he's going to do on the tariff decision on cars in europe i certainly hope that he doesn't do it, but i don't know from day-to-day what's going to happen now and i don't think these decisions are driven by good public policy. it's driven by day-to-day political decisions. >> you have a few voices now, really like voices crying in the wilderness that are decrying the access to cheap and easy money and our addiction to it. who are decrying the search for yield for these pension funds and 401(k)s that lead people to riskier and riskier bets
4:20 pm
do you think there's a warning here about fed policy and what's to come? >> look, i think that everyone in the markets, everyone who looks at the economy is in somewhat uncharted territory after seeing so many years of either zero or near-zero interest rates in the major economies of the world i do think it's something we have to keep an eye on i actually think that if you look going back to the tax cut, where are we now if the economy were to take a downturn? we don't have a lot of room in interest rates we don't have a lot of room in terms of fiscal capacity we've seen over these last three years, all the progress made during the obama/biden year to get our fiscal house in order and to make sure that we have the tools to fight a recession we're now down to very few tools remaining pitch a lot of confidence in somebody like joe biden who is there at the helm, driving forward the american recovery act that helped bring us out of a recession, that
4:21 pm
helped get this economy growing again. and we couldn't have been in year 11 of a growthth if we hadn't gotten the first seven under the watch of president obama and vice president biden >> although, on the point of ammunition, the national debt did rise every year of obama's protest and rates were very low when he left office. >> but the deficit was 3% of gdp at the end it had been 10 we brought it down zplp a >> and the deficit itself was brought down it to talk about the impeachment. given all the evidence we've heard so far given the simple math in the senate and given that there is an election coming very soon, do you think the impeachment process is a good idea for the democrats? >> you know, i look at the way nancy pelosi has led this house through this process and there were months, years where you could see her holding back the drive until ukraine happened
4:22 pm
i think ukraine, what the president did to use his position to influence american politics, is something i couldn't make up i think this is now happening because of what the president did, not because of what president decided. >> and if impeachment goes ahead, but conviction does not, will that damage democrats' chance in the election next year >> i actually think that the american people are going to look at the candidates and look at who represents their values, who has a better vision on where to take this country, who they want their children to look like when they grow up. and i think somebody like joe biden will win that contest, hands down >> well, on that note, mr. secretary, thank you so much for joining us and bring us your endorsement for 2020 always a pleasure to see you mr. secretary jack lew joining us there now, president trump discussing the trade deal that we were just discussing with jack lew moments ago. and kayla tausche has all the details for us >> the president holding a meeting in the cabinet room
4:23 pm
earlier this afternoon with governors from around the country to talk about regulations. and in a lengthy availability, where cameras were present, president trump talked about what's coming up in terms of those china discussions and some of the difficulty that could rep main listen >> the deal will be finalized over the next couple of weeks. it's actually, translation is the biggest thing. the deal is finished, but the translation is very important. i said, make sure you have the right translators, because you can lose a lot with bad translation. we're working on getting that done >> the u.s. trade representative has said that this is targeted for a first week of january signing in washington, but as president trump notes, sometimes the devil is in the details. and specifically, the details as they are translated in either language wilf >> kayla, thanks so much i'm sure the complicated translation from mandarin into english. thank you very much. the tech sector is up more than 40% this year and our next
4:24 pm
guest says tech stocks could rally another 5 to 7% before the end of the year. up next, find out which names could drive that sector higher >> and as we head out, a look at how the major averages closed today at record levels "closing bell" back in a couple of minutes is the monolithic view of emerging markets obsolete? at pgim, we see alpha in the trends driving specific sectors of outperformance.
4:25 pm
where a rising middle class powers a booming auto industry... a leap into the digital era draws youthful populations to mobile banking and e-commerce... trade and travel surge between emerging markets. every day, our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.
4:26 pm
4:27 pm
tech hitting all-time highs today after news that the u.s. will hold off on new tariffs on chinese goods. apple rallying today shares up nearly 2%. but earlier today on "squawk alley," sanford bernstein's toni sacconaghi says he remains cautious on the sector >> our observation is, tech is riskier today. there's been huge multiple expansion in the sector this year and so investors need to balance that and be really selective >> but we have a guest who says there's a lot of activity in tech dan ives is managing director of equity research at wedbush securities it expects a 5 to 7% move to the upside in tech going into the year beginning here. other than apple, which stocks
4:28 pm
in particular do you think could make that move >> i think it's semi stocks. if you go back to friday, that was a seminole movement in terms of a green light for tech, not just apple, but names like qualcomm, intel, amd right now we go into a super cycle in terms of apple, but from a semi perspective, this is the only thing that was going to stop the train in terms of the tariff issue and that cleared right now you're seeing a riskon trade going into 2020. >> and you think that's worth 5 to 7% for the sector as a whole, simply getting this clarity on trade, even though the market had probably priced in getting no further escalation in the very least >> i think some of it, but ultimately, friday, that was the ft. sumner moment. if there was any sort of tariff right there, there was the gut punch to tech. i think right now, 5 to 7% is just starters. we're much more bullish on tech. we could see a 350 plus stock.
4:29 pm
i look at cloud in terms of microsoft. and ultimately, it's just a start right here going into a renaissance of growth. >> can you see tony's point when you say, you've got to be selective that there's risk here >> but it's like many were skeptical on lamar jackson two years ago. look at what's happened there. there's going to be caution from a valuation perspective. i just continue to view the fundamentals the math doesn't lie in terms of semis as well as tech stocks that's why right now, we're not cautious there's isolated areas of caution. if i look at tech right now, we're looking into a super cycle 5g >> even without real resolution on a long-term trade deal, the fact that this could reerupt next year and we see tensions intensify. >> no doubt that's a long-term risk as well as anti-trust, but at least for now, i'm talking like six to nine months, you'll see a lot of these stocks re-rate in front of that
4:30 pm
you could have some yellow flags in there, but ultimately right now, it's an all-clear green light in terms of tech i think what you're seeing today, more and more investors have to put on risk going into year end in 2020 >> what do you make of the slightly more bullish sentiment? >> if you look at the underlying production numbers dhathat could come out of china. you've got to give all the credit to musk and tesla i think you're seeing the shorts go into hibernation mode if right now, you'll continue to see this go up in a short squeeze. >> dan, thank you. still to come, money pouring into skouo-called socially responsible funds and the security and exchange committee wants to know whethethe r os
4:31 pm
funds are really adhering to the principles details, straight ahead. (upbeat music) - [narrator] at southern new hampshire university we're committed to making college more accessible by making it more affordable. that's why we're keeping our tuition the same for all online and campus programs through the year 2021. - [woman] i knew snhu was the place for me when i saw how affordable it was. i ran to my husband with my computer and i said, "look we can do this!" - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at
4:32 pm
keep going, keep going. [maniacal laughter] gold! right, uh...thank you, for that, bob. but i think it's time we go with gbtc. it's bitcoin exposure through a traditional investment account. nice rock. it's time to drop gold. go digital. go grayscale.
4:33 pm
time now for a cnbc news update let's get downtown to -- or across the river to sue herrera. hi, sue. >> thanks contessa here's what's hang at this hour, everyone cuba's top diplomat with the u.s. is charging that the trump administration is aiming to break diplomatic relations with the island and close the u.s. embassy in cuba. it is a moua ve he says havana
4:34 pm
opposes as he also acknowledged the strained relations between the two countries. democratic presidential candidate tom steyer campaigning in iowa where he spoke about his economic agenda. he is calling for a wealth tax, plans to tax all income the same, and a 10% cut to lower income and middle class families he also took a shot at president trump. >> trump's only path to victory, his chosen path, so to play an economic shell game long enough to win re-election and then walk away and let someone else clean up his mess in 2024. researchers say adding a little spice to your diet could help prevent a heart attack. their study included more than 22,000 adults who were tracked for eight years and people who eight chili peppers at least four times a week were 40% less likely to die of a heart attack, regardless of what diet they followed four times a week might be a little bit stiff for me, but regardless >> also, over eight years.
4:35 pm
>> yaes yeah, it's a long study and a big study. >> and i wonder where the eight years, those other factors that might be influencing things. >> i'm -- i'm sure there are that was the main takeaway, but with all of these studies, there are other issues, choice of lifestyle, not only diet, but exercise >> but think about, the peppers just burn it out whatever's bad, it just gets burned out >> it just goes away >> so medical. >> sue, thank you. have a lovely evening. see you tomorrow meantime, "the wall street journal" says esg investment funds are coming under scrutiny with multiple firms receiving examination letters over the s.e.c. over whether the funds are trial going to companies with truly robust environmental credentials, as esg has grown to more than $20 trillion in 2018 with another $20 trillion on the way according to estimates by bank of america. here with us, one of the
4:36 pm
reporters who broke that story, dave michaels reported "the wall street journal". >> dave, tell us what you found here what's the headline accusation >> we found that the s.e.c. issued letters in 2018 and 2019 to a group of asset managers, asking them very detailed committees about their esg or impact investment offerings. and the s.e.c. sends these letters from time to time to wall street firms. and then in this case, very specific detailed questions. 27 questions on one of these letter letters down to the detail of, tell us your best and your -- >> dave, my sincere apologies. we'll definitely come back and finish the interview my apologies some breaking news on boeing phil lebeau. >> wilf, we have confirmed that boeing will be halting 737 max production we've talked with sources who say that this halt will take effect in january.
4:37 pm
we have reached out to boeing for a comment on this. boeing says it has no comment on this report, but again, we have confirmed through sources that boeing will be halting 737 max production effective in january. not a huge surprise here, guys we've talked about this all day that the board met yesterday and today and it wants to, to a certain extent, contain costs while continuing to build these planes and park them on tarmacs in the pacific northwest again, boeing will halt 737 production startingi in january. >> how much additional pressure does this put on the cfo >> it puts more. definitely puts more can i put a percentage on it there's no way of doing that, wilf but this is definitely -- this is the last thing that anybody expected when this all began and over last ten months, as dennis muilenburg kept on saying, we're making steady progress, we're making steady progress, i think the die was cast last week when he met with steve dixon from the
4:38 pm
faa and steve dixon said, we're not putting a time frame on recertifying this plane. they had no choice but to say, we either slow it or halt it and we've decided to halt it >> phil, do you have any sense of what this means for the workers? >> unclear at this point there's about 12,000 workers out there. boeing has said that they would like to, if they ever halt production, they would like to reallocate as many of those workers as possible, either to the plant in everett or other boeing facilities but they don't have 12,000 open jobs they can put these people into. it becomes a question, are you going to furlough them 45 days, 60 days how does that work out with the machinist contract that they have those are the details that still need to come out >> phil, thank you so much for that the faa saying they weren't going to approve the plan by the end of the year, something we learned with phil earlier in the
4:39 pm
week let's pivot back, esg invests. i guess one other theme that comes out of this, and from what you were saying is whether it's even possible to be perfectly in line with the aims of esg investing, because pretty much all companies are going to have done something wrong so is the blame on those esg investors who are tracting funds under that guise, or is it to be expected that it's impossible to be absolutely perfect in this space? >> well wing there's a lot of variation in the space, because it's a niche space, it's evolving and growing so we don't know at this point what aperfect esg fund or a perfect impacting and investing fund is. but it's the shiny new thing i think that's part of what the s.e.c. is trying to understand is as this space evolves and embr grows in front of it, the regulator wants to know, what you're calling esg, is that what we think of esg. can you explain how you screen these stocks and pick them and what your policies are
4:40 pm
it's a bit of a slow boil. we'll know if a few years how these reviews turn down and if the sec found anything that really worries them. but in the meantime, you know, you can imagine that a lot of the firms that are offering these products are probably getting these very detailed questions from the s.e.c.. >> dave, do you get the sense that there's any appetite for codifying the standards for esg investing? >> not at the regulatory level the s.e.c. tends to be very -- they don't like to pas descriptive rules when it comes to like, how do you define environmentally -- well-governed stock. those just aren't rules or ideas that lend themselves well to the kind of rules that the s.e.c. writes so they tend to be more principles-based, which means the s.e.c. comes in from time to time and says, like, okay, how is this really working out
4:41 pm
>> dave, to what extent are we just seeing all investors doing more of this sort of thing in general, whether they label themselves as a pure esg fund or not? >> well, i think you're seeing more of it, both to the retail and to the institutional market. and there is -- there's demand for it both a push and a pull for it. i think in 2017, japan's pension fund, which is the largest in the world, required outside managers to adhere to certain esg standards. so, you know, i think assets are -- and flows are going into this area. it doesn't seem like it's going to stop. there's a taste for this kind of investing, both in terms of larger institutions and generationally, millennials seem more attracted to this kind of investing, these values matter more to them so, you know, something like the
4:42 pm
s.e.c., theseguys are going to wake up and say, hey, let's figure out how this is working >> okay, thanks so much for joining us, dave >> thank you up next, where the results of the uk election, a lmesson about how the democrats should not run too far to the left of president trump. we'll discuss.
4:43 pm
4:44 pm
4:45 pm
welcome back we're getting more details on boeing let's get back to phil >> the question that contessa presented to me about the fact that now that boeing has decided it will be halting 737 max production starting in january, what happens to the 12,000 workers who build the 737 max out at the plant in renton, washington as i indicated, we weren't sure if they would be furloughed or reallocated to other boeing facilities a source within the company says the workers will not be furloughed they will not be furloughed. they'll continue to be paid, clearly some of them will be reallocated, where other jobs need to be facilitated within the company, whether it's in earth or at another facility there's still going to be work
4:46 pm
that's going to be taking place at the renton plant, but clearly not the level of production we've seen over the last ten months, because boeing has decided that it will be halting max production starting in january. >> no doubt that will be a relief to those thousands of workers who work on the 737 max. phil, thank you for the reporting. let's bring in shelia kahyaoglu. you have a buy on this stock does the pause in production do anything to change that? >> thanks, contessa. i think it pushes out when the inventory build, we work through that inventory build and of course, we're probably going to assume reentry into service at 42 a month and what boeing has said, 70 deliveries a month is probably a heroic delivery rate, we can't get above that so we would expect to see a timeline associated with that halt, maybe one to two months or three months and a gradual -- more gradual ramp in production >> what is your sense that
4:47 pm
investors assume that there would be a slowdown in production of these planes and then factor in that the leadership of this company seemed to indicate that they would be back in service by the end of this year >> a few mikxed mentals, but whe we go back to the july earnings call, it also said they might need to consider further rate cuts or a possible halt to production in if there was uncertainty around return to service. clearly we're seeing that. what investors have been asking today, why now, why a halt to production at the end of the yo year if it seems return to service is imminent. and i think one thing to consider is, we could have 500 aircraft being built up. you don't want to have too many aircraft in storage and thinking about the 42 per month production rate and a 70 peak delivery rate. you don't want to see those aircraft stored for too long i think that's why you're seeing
4:48 pm
the halt to production right no now. >> they've clearly underestimated the extent of problems and how to fix them at the 737 max. is it possible that that is being done again today by the investment community is it plausible this plane will never fly again? >> i think everything is possible, but i don't think that's the outcome we haven't heard anything of major setbacks in terms of re return to service. last week, we were talking about two to three steps being completed in terms of reentry into service i don't think things have changed dramatically but again, you don't want -- you are building at 42 a month that is a hefty rate, although that seems lower than previous months you're starting to see a big inventory build. that's one reason for the halt, likely in my view, and keeping the dividend in mind as well >> slihea kahyaoglu.
4:49 pm
netflix just released revenue data for the first time. we have those details when "closing bell" return. ♪ ♪ everything your trip needs for everyone you love. expedia.
4:50 pm
ugh, another electronic signature. you have to print, walk, sign, scan, recycle, walk, email yourself... really? more walking, try again, waiting, recycle, walk, email yourself, then get back to your day. or not. this isn't working. introducing samsung paperless workflow solutions. with the galaxy tab s6, you can sign digital documents on-screen, with a finger or your s pen. samsung business solutions.
4:51 pm
with[maniacal laughter] pen. gold. gold! right, uh...thank you, for that, bob. but i think it's time we go with gbtc. it's bitcoin exposure through a traditional investment account. nice rock. it's time to drop gold. go digital. go grayscale. we have a news alert on netflix. let's get to julia boorstin for the details. >> netflix breaking out refb knew in users numbers by region for the first time until now, net flikts has just broken down numbers into two categories, u.s. and international the streamers reveal that revenue is growing fastest in the asia pacific region.
4:52 pm
netflix breaking down average revenue per paying member by region despite the growth slowing in the u.s., it showed an 11% increase in revenue per yuser i the first nine months. ending the day down just fractionally. >> julia, thanks for that. up next a new breed of banks, the rise of fintech offering banking services has consumerers conflicted where they should be putting their money. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions. and i see it with zero commissions on online trades. i like what you're seeing. it's beautiful, isn't it? yeah. td ameritrade now offers zero commissions on online trades. ♪
4:53 pm
most people think as a reliable phone company. but to businesses, we're a reliable partner. we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready.
4:54 pm
4:55 pm
now, top tech companies start teaming up with major lenders and the rise of fintech tons dominate, con soournlz are left wondering where they should be putting their money a breakdown of the challenger banks. >> google has announced it will start offering checking accounts, apple has launched a credit card and facebook is taking on venmo with a new payment service. so many of these branchless challenger banks are partnering with fdic banks and traditional banks see this as a benefit. a report found that more than 40% are engaging with fintech
4:56 pm
companies. for consumers this new breed of banks offers lower cost and higher rates on savings, greater access to credit, more specialized services and they're mobile friendly. but no human interaction you're not likely to talk to a real person. products are limited not the broad line you see in a traditional bank you could be putting yourself at ring if the tech firm is not partnered with a bank backed by the fdic all of that is important to look into find more out on >> thank you so much appreciate that. up next, the key things every investor needs to watch for as we head into a new treading day when "closing bell" comes back
4:57 pm
4:58 pm
4:59 pm
fedex said to report results tomorrow after the bell. eric chemi has that for us. >> fedex reporting after the bell tomorrow, investor eyes will be focused after today's amazon news. but despite those tensions, retailers have reported massive e-commerce growth. fedex dropped double digits last quarter which was driven in part
5:00 pm
by tariffs in the trade war. investors expecting another big swing tomorrow some analysts say to focus on the fiscal year outlook again wondering if the company can ut it enough last quarter >> down a percent ahead of those results, coming storm. we're out of time. >> "fast money" begins right now. yes it does. contessa and wilf, thank you this is "fast money. i am brian sullivan in for melissa walker your traders are tim seymour, and also joined by jeff mills, chef investment officer at bryn mawr trust we begin with breaking news on boeing sources telling cnbc moments ago the company will halt production on the 737 max airplane beginning next month, stock moving lower all session and lower in the after-hours let's get more


info Stream Only

Uploaded by TV Archive on