Skip to main content

tv   Closing Bell  CNBC  December 20, 2019 3:00pm-5:00pm EST

3:00 pm
and to see them grow and what this organization has become so i'm very sfioptimistic about what we have here and i leave it in very, very, very good hands >> and you're not leaving. >> i'll be around. >> no, you're not leaving. >> bill griffeth >> [ applause >> come here >> mwah! >> "closing bell," right now [ applause ] >> welcome to the "closing bell." tyler just said bill was synonymous with "power lunch." all of us on the show wish him
3:01 pm
the very best in the future and delighted in the knowledge that we'll be seeing him stauchoften. having established and shown us how it's done, on and offscreen, you're an example to us all, particularly the younger members of the on-air talent like myself and courtney bill, thank you. >> you know, when the stakes and nerves are high, he's a mentor that's taught so much to so many of us, both directly and indirectly while his career can't be topped, bill also taught me to look at life as a three-legged fool, work, family and friends, and faith. hopefully, weapon fi find a newc here with his new position as anchor at large. >> you know what he would be doing, he would be telling you that we have 59 minutes of trade, and in record close watch. here is what's driving the action this afternoon. stocks hitting record highs once
3:02 pm
again with the s&p 500 poised for its straight fourth week of gains. boeing weighing on the dow of troubles raise new red flags for investors. and consumer staples leading the charge joining us, charles bre zzincoy pretty bullish you are >> i would say a year ago, we had people talking about a recession coming, an inverted yield curve, people worried about brexit we had people worried about a trade war. a lot of those problems have gone away, but we havepeople too cautious about the economy the u.s. economy has grown 3.2% per year over year over the last 60 years i'm saying it's going to be a little over 3%, which i think is a down the middle forecast, but people take that as amazing growth i think they're still conservative >> charlie, stick with us. you'll be us for the hour. we'll focus in on the big
3:03 pm
stories we're watching here. and we're also covering a pair of boeing stories. phil lebeau has new details on the boeing 737 max saga and morgan brennan is at the kennedy space center we'll start with seema at the exchange >> at record day for the stock market and while nike shares may be down today, comments from management on the strength of the global consumer is noteworthy, mentioning growth and emerging markets you compare that to what fedex ceo fred smith earlier this week that germany is struggling and china slowdown with will continue, it illustrates the strong consumer, weak backdrop u.s. steel is down over 10% on a dividend cut, weak guidance,
3:04 pm
whereas carnival with its focus on the consumer is up 8% after reporting better than expected earnings >> seema, thanks so much for that one name sitting out today's rally is boeing, the worst performer in the dow for the week as a hole phil lebeau has the latest on the 737 max and another airline pushing back the return date for the plane. wilf >> the significance here is that we're now starting to see cancellations creeping out to june, which means they're starting to threaten or potentially could threaten the busy summer travel season. that's where the airlines make their money. united says they will not be flying the max until june 4th. meanwhile, spirit aerospace out of witchta, kansas, has announced today it will be halting 737 max fuselage production they get about 57% of their revenue from the boeing 737. they're going to try to assess what they're going to do for the 12,000 employees there in witchta. in terms of big numbers, guys,
3:05 pm
this is the one the focus on total cancellations of max flights here in the u.s., go back to the grounding in march, all the way through when they're supposed to come back on the schedule, 145,000. that's how many max flights have been canceled and will be canceled going into spring of next year. take a look at shares of boeing. we remind you that max production, it is going to be stopping in january on a temporary basis. not surprisingly, spirit aerosystems trading in tandem with boeing under pressure over the last year. guys, back to you. >> i guess that 145,000 is higher if you factor in the other region on the point of other regions, we talk so much about where the faa is in terms of the timing and likelihood of when it might reissue authority. what about european regulators do we have any inclination of
3:06 pm
how close they are >> the brazilne nesians and othr working closely with the faa it doesn't mean as soon as the faa authorizes the plane to fly again, that you'll hear the same thing, but they won't be far behind the expectation is that it may be a week, two weeks, maybe three weeks at the most that they are going to say, okay, we've been looking at the same data as the faa regulators and they're going to sign off on it as well. >> got it. thank you very much, phil. we're keeping you up to date with all of these continual delays sticking with boeing, the company's star liner spacecraft failing a key part of its test mission today after launching from the kennedy space center in florida. morgan brennan is there with the details. hi, morgan >> hi, courtney. after another painful week on the commercial side, boeing really needed a win in its defense, space, security business instead, star liner suffered an automation malfunction in this first flight to space, meaning that it will not be making its
3:07 pm
intended trip to the international space. i asked nasa administrator jim bridenstine earlier where the financial hit would be felt if the timeline slips back even further. he said, there's no doubt there'll be an impact. >> if there is a setback, obviously, that can have feedback when it comes to maybe a provider not being able to win the next contract. whether it's nasa or some err commercial company that wants access to space for the value of microgravity that's up to those commercial companies to figure out. >> reporter: so star liner is part of nasa's commercial crew program. it's a multi-billion-dollar program alongside spacex, which has one more safety test of its own before humans can board its capsule, which is called the crew dragon. that first manned flight for spacex is expected in the first half of next year. as for star liner, a lot of
3:08 pm
questions marks and a lot of unknowns in terms of next steps, largely because right now, everyone is focused on getting that vehicle back to earth in a safe and successful landing, one that's expected to happen as early as sunday morning. >> morgan, thank you very much, for following all of those details for us all day long. for more on this, let's bring in chad anderson, a space-focused firm with investments in more than 30 space start-ups including spacex chad, thank you for being with us here today. how much of a setback is today's failed mission for boeing especially >> it's a big one for their space and security business, especially this is eight years in the making and they were in the final stretch and this was a key milestone. it was a big deal. >> can they rethink things >> this was a big milestone, a
3:09 pm
big test this was a dress rehearsal eight years culminating in this milestone. to miss this is a pretty big deal, i think. this is really fresh so i think we're waiting to see exactly how this shakes out, but already, you know, spacex was talking about launching a q1 next year. boeing was out to mid-2020 this might push them out past 2020, leaving spacex with a launch vehicle for u.s >> does this help spacex not that that i haey've had a ss history, but does this give them a leg up >> certainly they were already in the lead. and i would say they're firmly in the lead. they were already planning on launching in q1. they've already done this milestone and passed this milestone. so i think that what's most interesting about today and what's so significant about today is wily in a completely different paradigm than eight years ago when this program started and when we shut down the space shuttle program. today, we're not reliant on one
3:10 pm
company or one program we now have -- we're tracking 500 space companies that have raised $25 billion over just the last ten years boeing has a setback today, but spacex still pushing ahead and they're going to be launching in q1 >> that said, without the centralization and organization that nasa traditionally brought, has the u.s. fallen a little bit behind its rivals or perhaps a bit less far ahead than it used to be with its rivals in the kind of whole space arena? >> i think we've stuttered in our benchmarking against ourselves. so the space shuttle program when it was canceled in 2011, that was pretty bankrupt and we expected to have this commercial capability online in a couple of years. that didn't happen so now it's been eight years, right? and we've had this gap during this period, we've been paying the russians $80 million a seat to get us to the space station until these capabilities come online. remember, boeing was a safe bet here spacex was a relatively unknown
3:11 pm
quantity when this started and boeing was a safe bet. and it shows day got twice as much money to do essentially the same work that spacex did. and now spacex is farther ahead? >> charlie, when you look at the landscape for space, you have some companies that you could be invested in, certainly boeing, part of their business but you also have virgin galactic doing something different than today's launch, at least is this an interesting area for you, because the future is so unknown and opportunities could be vast? >> as value investors, this has got a lot of the things we don't like it has very little proven. it has a lot of different competitors. it has huge up-front they would pick a provider and many providers to spread the jobs out around the country and that world has become much more competitive today, much tougher to pick a winner >> what about boeing stock, though >> i would have said before today that everything that had gone wrong could go wrong and
3:12 pm
this happened. as a good chicago company, we think it's very well positioned. long-term, very well positioned. it's going to be bumpy, but now with all of this bad news, now is a great time to be looking at it >> chad, i want to pivot back to the space investments you guys have made. are they all private market investments, or do you start to see a bit of value in the public market in terms of pure space plays whether that's virgin galactic or others >> this has been a monumental decade for commercial space, without a doubt. ten years ago, there was no entrepreneurial opportunity in space to speak of. it was really a handful of defense contractors. but that is no longer the case today. we're tracking hundreds of $500 plus companies that have raised $25 plus billion so we're in the early phases we're seeing the first companies raise venture capital. some of those are going on to be acquired and we've just seen the first ones start to go public. but we're just scratching the surface and on the edge of
3:13 pm
something really big >> still to come, carnival's stock higher is on the back of earnings, but making headlines for another reason today as two carnival cruise ships collided off the coast of mexico. we'll speak with ceo arnold donald in a cnbc exclusive interview coming up next and as we head to break, here's a check on our data tracker. the final reading of third quarter gdp coming in at 2.1%. that matches estimates and consumer sndpeing also matching estimates, climbing 0.4% in the month of november pch."closing bell" will be right back
3:14 pm
3:15 pm
3:16 pm
welcome back to "closing bell." let me send it over to mike santoli. he has today's market dashboard. >> going to start with an extreme tilt that would be the extreme skew of the stock indexes to the upside and what that might mean for the shorter term time for a reversal. look at the sector and performance breakdown for this year and ask whether we might see some turn about there going into 2020. not standing still, what's supposed to be kind of a boring state, asset allocation, balanced strategy between stocks and bonds was anything but boring this year and we'll take a look at that. and long, sharp horns. the bulls are starting to get aggressive so a sentiment check in the next hour an extreme tilt, though. take a look at a two-year chart
3:17 pm
of the s&p 500 this is not only catching last year's dramatic drop, but also the january 2018 we've kind of obliterated all of that i think the key thing right now people are looking at is that you kind of have these trend lines here where the market has been riding the upper end of it for quite a while right now. 3230, i mentioned earlier this week, it's been a common short-term target for a lot of traders, as maybe the upside extent of this rally you're definitely stretching things to the upside, but it's also been a very older rally, it's not been hampered by a lot of divergences the bond market is diverting what's going on here not too many holes in the bullish story. it definitely looks like a clear breakout, but it does get stretched. this is from ned davis, looking at the last few times -- actually, all times that the market has had a 10% rally in 50 days, as we just have, and that the rally was not proceeded by a big drop so basically, the market was only down 6% before this run what happened three, six, 12 months later well, three months later, you
3:18 pm
actually didn't have a particularly strong proportion of up versus down, but on average, you were slightly higher 15 up, 11 down scenarios also, out of six months. and basically, you had an average annual return of 9% but also 6 down and the last five times this has happened, they've all been downover the last six months. it's merely a tactical point to say, hey, the market doesn't always kind of keep giving you more once you've had 10% over 50 days, guys >> mike, thanks so much for that see you again in a little while. now, carnival corporation stocks soared after beating the str street's estimates on thetop and bottom lines joining us now in a cnbc exclusive interview is arnold donald ceo of carnival cooperation. thank you so much for joining pups good afternoon, arnold. >> good afternoon, wiffle, courtney, charlie. good to be with you guys >> we definitely want to talk about your excellent earnings results in just a moment
3:19 pm
but if we can, arnold, we want to start with this collision between two of your cruise ships earlier today. we're playing some video of it but talk us through what happened here and first and foremost, if everyone was all right. >> first of all, everyone is all right. that's breaking news for me, to be honest with you but in cozumel, we had the carnival glory she had a collision with the carnival legend, which was already docked they're both now safely in port. you know, our highest responsibility and our top priorities are always safety, environmental protection, and compliance and so, you know, we will do a deep investigation on this, but most important thing is the ships are able to sail, they can continue on with guests having a great vacation there's no major damage to either ship. there's some damage to the "glory," which will be -- i believe the "glory," which will
3:20 pm
be repaired shortly. but everybody will be able to continue the sailings, people have booked on either ship will be able to continue their vacations. there were some minor injuries as people tried to leave the dining room, but everyone's fine >> and i know there's been one or two individual ship tragedies in your industry in the past and thankfully, of course, this is far, far from a tragedy but have there actually been a cruise ship-to-cruise ship collision before how confident can we be that this won't happen again? >> occasional, they'll touch or bump in this case, we'll have to do a full investigation there was probably a sudden squall, or wind, that pushed a ship but occasional, ships will touch. in port, of course, you try to avoid that again, this is not a serious -- any collision we take seriously, but there's no real major damage to the ships and no one was injured, seriously injured >> if we can towner your
3:21 pm
earnings report today, you did beat expectations for both profit and revenue and looking towards the next year, your bookings are so far higher than what we saw this year, but at lower prices can you explain what you're expecting for the year to come >> our guidance, we gave earnings guidance of 430 to 460 at the midpoint. that would be yet again another record earnings. we're enjoying record book occupancy at this point, the high test we've ever had in the history of the company we do have headwinds in europe, especially in germany and in southern europe, where in germany, this year in '19, there was afterpretty sudden downturn in consumer attitude about overall travel we had a great increase in capacity in germany, 20% increase so i was very proud about doing that, but in that environment, it's tough to get year-to-year yield increases. however, we're still very
3:22 pm
profitability. germany is one of our highest return on capital targets. but as we look ahead, we will look to perhaps moderate capacity growth in germany and southern europe to reflect the macro head winds there and our guidance, we reflect a continuation of trends >> but macro headwinds, are you seeing them broadly, because 2020 bookings seem to be pretty strong overall, what was your confidence that the macro consumer outlook for next year >> the bookings are strong they're strong everywhere. but again, when you have that level of capacity increase, and an environment where people are overall traveling less, it's tough to get the kind of price increases that obviously we like to see in the u.s., in the caribbean, things are very strong we have -- we're ahead on bookings and ahead on price, so on so the north america market overall is strong. and europe is strong it's just hard to get the
3:23 pm
year-to-year yield increases but we are growing profits there. >> today, you also announced that you're canceling eight sailings of the new mardi gras ship because of a delivery delay. can you explain what's going on there? what is the reason behind this delay? >> yeah, what happened, we have what we call prototypes. we also had a delay with a ship that's sailing today we're very happy about that. she's set and sailing for the very first time, one of our newest ships she was a prototype and previous to that. our nova was a prototype those prototypes sometimes get delayed because they're brand-new ships. usually the second, third, fourth ships in the generation of ships, you don't have that. so mardi gras is a similar class ship, but special for the carnival brand and she will be delayed partly because of the delay that was experienced with the costas
3:24 pm
miralda. the guests will be well taken care of, they have future cruise credits and the mardi gras will be a fabulous ship meanwhile, we launched carnival "panora "panorama," which is sailing now from the west coast, that happened now in 2019 and that ship is doing well, as are all the ships. they're all heavily booked and guests are very excited to visit. >> well, thank you for joining us here today, arnold donald, the ceo of carnival on a day that's a bit complicated for the company. >> complicated, but we're good >> thanks, donald. thank you very much. >> charlie, you are a holder of the stock. >> we're owned royal caribbean in a much bigger position. historically, people thought of carnival as being the better operator versus royal, higher returns on capital this is a extremely capital intensive business, and that's really flipped royal has something they call the double, double program, which is double digit earnings growth per year and double-digit
3:25 pm
return on invested capital and they've achieved that. carnival hasn't quite kept up with royal royal stock has gone from 5 in '09 to 130 today carnival has had nothing like that kind of appreciation. carnival is trying to get its swagger back these are good numbers today >> still happy holder of both. >> i'm a very happy owner of royal. i'm an expectant holder of carnival >> there we go gracious way of putting it charlie, thank you >> shares are up about 8% today. we have about 35 minutes left before that sounds. after the break, two firms out with bullish notes on apple today, including one highlighting the big opportunity for airpods in 2020. we'll break it all down next and later, with stocks at record highs, how should you be positioning for the new year this is a problem that affects each and every one of us.
3:26 pm
together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer. p-tech students around the world. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.
3:27 pm
save kids with cancer. judeeverywhere. like...wide new york. oklahoma. tennessee. florida. donate now at stjude.org or shop wherever you see the st. jude logo.
3:28 pm
we have a new alert on softbank josh lipton has details for us hi, josh >> so we have some news here on softbank clearly going on the defensive here, after that really revealing critical story in bloomberg "businessweek," discussing its culture the head of division fund writing to his employees in an email obtained by cnbc, really shooting down these rumors of disarray internally within the vision fund as partners, saying,
3:29 pm
clearly, we've made some mistakes along the way, as we've acknowledged we're learning and we welcome the scrutiny, but we can't accept unsubstantiated and reckless personal attacks on our employees. this was a story that was tough on softbank. it was tough on masa san coming on the heels of softbank trying to raise its second vision fund. >> guys, thanks so much for that just scanning through that, rather pushing back on pretty strong, as you said, article from bloomberg switching forecas ining focus, t word on the street piper jaffrey raising its price target citing interest in 5g and bernstein out with a positive note on apple as well, air pods could be a profit generator moving forward that stock flat on the day, but up 77% so far this year. next, wells fargo raising its price target on citi to '87 --
3:30 pm
from 97 to $85 jpmorgan are offering their price target from 150 to 125 the firm cite can go improved credit and rate improvements for the banks calling the extended stay of citi's activist investor a popular catalyst for the stock. >> and susquehanna raising its price target on nike from $115 to $106 per share. calling nike's bead on earnings quote evidence of nike's strength across geographies, categories, and channels outgoing ceo mark parker addressing his transition on the earnings call last night >> as most of you know, this is my final quarterly earnings call as nike's ceo. i strongly believe the best time to make change is from a position of strength and our brand and our business are as strong as they've ever been we're focused, we're competitive, we're creating a future of our own design most of all, the time is right because of the team we have at nike
3:31 pm
and of course, john donahoe, himself. >> charlie, are you interested at all in shares of nike >> so, full disclosure, john rogers, our ceo, is on the board of nike. so we don't own it, but just as an outside observer, he's right, things are going extremely well. the brand is as in as good shape as it's ever been. the problems in china people worried about after the houston rockets don't seem to have materialized everything is clicking and of course, that can be dangerous, because this is a fashion conscience business, but, boy, things are going well. >> his to upgrades go for the cheapest and the most expensive. >> i was just going to say that. >> and it kind of highlights the ov overall theme. the interstate environment is a bit more encouraging >> i think jpmorgan, everybody loves, jamie dimon is a wonderful banker, citi, everyone hates. i think the price disparity is too much there citi trading well below book
3:32 pm
the name we love in the middle is goldman sachs very cheap, great positioning, but not loved the way jpmorgan is >> thank you very much, charlie. well, it's time now for a cnbc news update with sue herrera >> hello, courtney hello, everyone. here's what's happening at this hour prrp has accepted an invitation from house speaker nancy pelosi to visit the chamber that impeached him just two days ago. the president will deliver his state of the union address on february 4th an early morning shooting at public works building in wins n winston-salem north carolina has left two people dead witnesses say the shooting stemmed from an argument between two workers. police have yet to identify the gunman, but say there is no further threat facebook says it has remove separate pages that were posing as news organizations and public figures. it's all part of facebook's efforts to keep fake accounts from spreading false information. and health officials may be
3:33 pm
getting closer to figuring out what is causing lung illnesses in people who vape the cdc is calling a former of vitamin "e" a very strong culprit. you are up to date that's the news update this hour guys, i'll send it back down to you. wilf >> thanks very much. coming up, charlie's picking a name that's been a big underperformer so far this year. that call, straight ahead. >> and later, theo poshmark joins us to talk about the ipo landscape and the last-minute holiday shopping rush. and here's a check on bonds. treasury yields on the rise once again today, capping off pretty sizable jump for the week. the ten-year note is currently yielding around 1.9%, sitting at 1.97 "closing bell" will be back after this (brakes screeching)
3:34 pm
okay. so, today you're going to leave your phone with a guy named flip. (ding) but it's more than your phone, it's your business, your customer data, your sales figures. and who can forget, those happy hour selfies? not flip. (honking, gasping) this isn't working. introducing samsung business security solutions, with knox software. with the galaxy note10, you can remotely wipe data or lock phones, so your business is secure even when your phone isn't. samsung business solutions.
3:35 pm
3:36 pm
#. welcome back to the "closing bell." we've got about 24 minutes left
3:37 pm
of the session let's take a check in on the sector heat map. all 11 sectors are higher. the sector heat map is coming. well, i can tell you, confirm for you that it is all 11 sectors are higher energy leads the charge up a full percent followed by staples towards the bottom of the pile, you have the likes of financials and consumer discretionary >> well, here we have about 23 minutes left to go here are the three things driving action today stocks hitting record highs once again. the s&p 500, poised for its fourth straight week of gains. boeing weighing on the dow after united delayed 737 max return and part of a spaceship test mission failed this morning. all s&p sectors are higher today. utilities, consumer staples are leading the pack with gains of around 1%. with just 23 minutes left of the session, let's get over to mike for the second installment of the market dashboard. >> yeah, going to actually take a closer look at the sector breakdown and say maybe it's time for a reversal or sturdy
3:38 pm
enough to continue this is the breakdown from best to worst of the sector so technology, communication services, financials, they are the only three sectors to actually outperform thes&p 500 this is on a price basis, not including dividends. so that shows you, obviously, it's been a little bit of a fewer winners than losers, but really on an outright basis, no losers energy, obviously, barely kind of doing mid-single digit returns. the rest of them clustered so it's a pretty positive story. you're not going to complain about being up, you know, 25% in industrials on a year-to-date basis, even though it didn't beat the s&p 500 there is a strategy that some have advocated over the years of buying the second best-performing sector in a given year, as a bet on outperformance the next year it doesn't have necessarily a very robust history to it. but it has worked on balance over time. so that would mean communication services in this case. but really, that is a dramatic thing. apple, no small reason that
3:39 pm
technology is just far and away, has outpaced everything along with semiconductors. >> thank you very much, mike we'll continue this conversation a bit with utilities, one of the better-performing sectors today. we'll get to seema mody for a better look if investors should own this space next year >> hey, courtney a growing number of companies are trying to incorporate initiatives that make them more environmentally friendly and this trend is actuallytaking hold in the utility sector as well, exploring renewable energy, power-saving projects and the smart grid s&p global conducted a comprehensive analysis of companies that are actively trying to reduce their carbon footprints and three u.s. companies were highlighted that's one way investors could say bullish on this sector plus, high dividend yields, more than half of the sector still boasts yields higher than 3% and one name i'm particular to watch is nexterra energy that's the largest producer of wind and solar energy. it's one of the most favored
3:40 pm
defensive stocks on wall street, despite being up around 40% this year 90% of analysts on the street still have a buy rating on the stock. guys, back to you. >> seema, thanks so much for that a quick view on the sector, charlie? >> i want to call this out there are a number of sectors that are very tied to the interest rate. this has benefited from the high dividend yield, as we still have very low interest rates. we're predicting that interest rates will be ticking up next year that's not going to be good for utility stocks people have been hiding in these names and searching for yields we would frankly be recommending that people not move into utilities. >> thanks for that meantime, a news alert on citadel securities ylan mui has the details >> the dow jones is reporting that the scc is investigating the ipos of slack and other unicorns listed on the new york stock exchange over how they handled the first days of trading. citing sources familiar, the dow jones has sent letters to citadel securities over how it
3:41 pm
opens slack's stock for trading. specifically, they are looking for e-mails that may have been sent before those first trades as well as the policies for complying with the rules of the exchange now we will point out that we have reached out to the s.e.c., they have declined to comment and we have not yet heard back from citadel >> ylan, thanks very much for that that's an interesting story, of course, some of those being not full ipos as opposed to being direct listings. we've got 19 minutes left of the session. we are set for record all-time closes once again. healthy gains for all of the indices and all 11 sectors object son the s&p are higher and shares of u.s. steel are getting crushed. we'll dive into what's behind that drop. as we head into break, win beneo
3:42 pm
is higher by almost 8% 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.
3:43 pm
3:44 pm
♪ ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg. ♪ welcome back
3:45 pm
15 minutes left of the session here's a check on the "closing bell" big board. the three major averages all set for record closes. in the middle, some of today's dow leaders, merck, verizon, and coca-cola. and the biggest dow laggards at the bottom, nike, boeing, and cisco. well, we have just 15 minutes left to go, so charlie, what is your last chance trade on this last friday before christmas? >> i've got a new name today that i haven't talked about before we talked about how everything was going wrong for boeing another company that everything is going wrong for is mosaic the fertilizer company used to be part of cargill it was spun out on its own and literally everything's gone wrong. last year, it rained heavily and they lost an entire planting season that's like macy's missing christmas. there was a big flood in their mine down in brazil. there's been a competitive outbreak of too much capacity coming on. but the good news is demand for fertilizer grows every year as populations grow it's a product that works. it produces more agricultural
3:46 pm
products demand for agricultural products is going to go up. the stock right now is trading at about 70% of book and it's almost impossible to get a new phosphate mine licensed because of the environmental impacts. so this is, we think, the bottom right now in terms of what's been a very tough year >> and it's up as well today >> a couple of their competitors have announced cutbacks in production the industry brought too much capacity onboard now a bunch of those mines are being closed there is a sense that supply and demand is coming into balance. the stock has done pretty well the last couple of weeks >> in a week, up about 13% but down 27% year-to-date. >> the last-chance trade is mosaic this is now the last commercial break we'll take before the close. we will bring you uninterrupted coverage of the final minutes of trade when we you take you inside the market zone, next spotlight.
3:47 pm
3:48 pm
and a drumroll, please. [ hisses ] [ hisses and snarls ] [ bell chimes ] let's dance! and now the icing on the cake! when i lost my sight,
3:49 pm
my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me. it is already working in cities like tokyo. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.
3:50 pm
just a hair over ten minutes left to go in the trading day. we're now in the "closing bell" market zone. >> cnbc's senior market commentator mike santoli is here andcharlie bobrinskoy is here as well. let's kick things off with boeing under pressure after the boeing star failed a key part of its nasa mission meantime, boeing still feeling the fallout from the 737 max crisis united airlines pulled its max aircraft offschedule until june. and a key supplier for boeing will end large deliveries for the max. boeing, one of the biggest drags on the dow today and down 3% for
3:51 pm
the week mike, we were talking about this earlier. felt like it couldn't get much worse. for the week as a whole, it could have traded down more than it has, given how much it's been >> there was what seemed could have been an important little bounce one of the days this week, it started lower. i don't think you could have looked at the way it's traded and say that sentiment has washed out there has been this hopefulness that we're going to get to this point where we can get through the free cash flow burn and all the rest of it the stock is trying to hang in there. very hard to say whether that's going to be the low, ultimately. >> amazon is track to deliver 3.5 billion packages by year end. kate rogers has more details >> the tech giant says it is tracking to hit that big 3.5
3:52 pm
billion number global ly this year amazon has been growing its fleet of delivery planes, trucks, and vans as it takes on fedex and u.p.s. fedex ended its relationship with amazon over the summer, while u.p.s. continues to deliver. morgan stanley estimates to amazon logistics delivered 20 tact of its own packages last year and nearly 46% through august of this year. amazon stock is up about 20% year-to-date, as is u.p.s., while fedex is struggling, down more than 8% for the year. back over to you guys. >> kelly, thanks so much charlie, do you feel like enough of the bad news is in the fedex price now, or do you actually think that u.p.s. is due for a pullback to match some of the underperformance >> we've been looking hard at this it has the wonderful value attributes that we like. they weren't making that much money off amazon before when they had the business. the problem is that amazon -- that fedex, excuse me, is about
3:53 pm
flying packages around the world. and what's happening now, it's shorter land delivery. it's going from a warehouse in cleveland to a house in cincinnati not the airplane that made fedex so profitable. we worry about the capex and frankly it's been a tough thing to be competing with amazon in any business >> i found it interesting they called out weakening economic macro conditions >> it does say something about the global piece it's a little bit more exposed to the macro conditions that they're probably citing than u.p.s. is, which is a somewhat more domestic business but at some point, investors are saying, you can't all beat the macro. >> it's very interesting i wonder what ends up with happening with amazon and if that brings up more anti-trust concerns >> they probably say, maybe it's
3:54 pm
a necessity, but it's not particularly a seamless value-added activity for amazon. it's struggled >> value added perhaps for the customers, which is always amazon's end goal. for investors, remains to be seen shares of u.s. steel plunging after the company cut its dividend and released fourth quarter guidance well below the street's expectations. the steel company also announcing it would idle a portion near detroit and lay off nearly 1,500 employees on pace for its worst week since september. charlie, when you look at u.s. steel or the sector in general, opportunities there? >> these things have moved around the afraid talks, last year, when the first tariffs came out, people thought that be wonderful. and it's been good and bad a very capital-intensive business frankly, too capital intensive for us we have been passing >> let's move on and talk about
3:55 pm
carnival we, of course, were talking about it earlier trading higher on the back of earnings, but earlier today, two carnival cruise ships collided off the coast of mexico. ceo arnold donald joined us exclusively with his reaction. >> we'll do a deep investigation on this, but most important thing is the ships are able to sail, there's some damage to the "glory," which will be -- i believe the "glories with t"glo be repaired shortly. but people will be able to continue their sailings. there were some minor injuries as people tried to leave the dining room that was impacted on one, but everyone's fine t >> the stock trading up today. >> what's interesting, in addition to carnival being up, royal caribbean and norwegian are two of the top ten stocks on the day following carnival's
3:56 pm
numbers. it seems the market issing with to give the benefit of the doubt. pretty cheap-looking stocks. if the consumer is in decent shape, that's the triangulation rationale people are using maybe not stellar results, but good enough in this kind of market >> i was just wondering how much we can extrapolate from consumer spending on something like a cruise and carnival's results based on their commentary to broader consumer trends. >> it's a good question. obviously, it's relevant to broader consumer trends, but what i always find amusing, when times get tough, the cruise l e linlin lines have this line saying, we're a countercyclical. sturdy pricing is better for them than not. and consumers can handle it right now. >> i would just point out that the outlook is actually for better booking, but at lower prices, which is a little bit disappointing to me. >> carnival's outlook. >> yeah, which is to me, better
3:57 pm
than maybe peopled that fared, but not particularly good. >> you're standing yet you're close to selling this stock. >> the stock went from 80 to 50. this was hit hard. and they haven't had the wonderful operating performance that royal has had so i think we have said that the market overreacted that these ships are in place, there's not a lot of new capacity coming, the market will tighten up and the business will be better. we need to see some better results. >> and we did ask the ceo about exactly what you said, with the outlook for higher bookings, record levels, but lower prices. a concern for others mark has more on the market internals on what seems to be a bit of a defensive day >> it's a little lukewarm. it's positive, but it doesn't reflect an up day.
3:58 pm
new highs versus new lows. i keep pointing it out new highs swamping new lows versus where we've come from a year ago that's a positive. and take a look at the micro-cap etf. you're starting to see a little more speculative activity. that up almost 5%, close to double the s&p's performance >> two minutes left of the session. let's get a check in on bonds and rick santelli. >> you know, wilf, it's been a big week, especially if you're looking at long-dated treasuries and/or sovereigns across the globe. look at a one-week of tens, up nine on the week, even though it's virtually unchanged on the session. the dollar index also recouped lots of its losses this week over a penny recouped from last friday's lows. and if you look month to date, you can see the improvement. if you hook in an extra month,
3:59 pm
you can see now how nasty november was >> reporter: the nasdaq on pace for its seventh straight record close, five dozen all-time highs on the index today, including ame amd, which is the best stock of the year, doubling this year haven't seen a down week since the end of september marriott, it's not just chips, also at an all-time high, and that one looks like it's on a record run, nine straight weeks of gains and tesla today, once again hitting an all-time high second straight session above 400. looks like it's getting ever closer to that notorious 420 high seema, i wonder whether elon musk will tweet when it reaches there. >> bertha, we are at the 30-second record close for the s&p 500 right now. the dow is close to the highs of the session, up a hundred points, led by shares of ca
4:00 pm
caterpillar. small caps have been really left out of the broader rep bound we've seen in large caps the index now about 4% away from a new high and that's due if part to that weaker dollar environment. there's carmax, weaker than expected earnings. they're down over 6% there's the "closing bell. the s&p 500 at 3220. dow jones industrial now up 73 >> welcome to the "closing bell." i'm wilfred frost. >> let's check in on how we finished record closes once again major averages up, all of the sectors in the s&p were higher, led higher by energy utilities and health care. that relatively defensive tone as courtney was just mentioning. the dow up about a third of one
4:01 pm
percent and the nasdaq up 0.4% >> joining us to talk about the market day, charlie bobrinskoy at aerial investments. still with us liter with peter shekini at kantor fitzgerald mike, wilf pointing out the defensive tone and yesterday we mentioned we might see some interesting moves today because of it being an options expiration day and the last friday before christmas but relatively quiet session >> it was really more of the same the market continues to levitate in a calm way. seasonal forces. it seems like whatever they had in the risk budget, let's spend it down and turn it into stock it seems to me that the bull case is certainly very plausible, it's just also very well known everybody seems to be broad agreement on why the market is doing what it's doing. and the question is how far that can go right now, things appear
4:02 pm
stretched. it wouldn't be surprising if now was the time when it took a little bit of a rest >> pete, god od to see you and have you join us i've got to ask, you were fairly bearish coming into fourth quarter. >> i think what we missed was really just momentum and sentiment. markets get well overbrought and well oversold. and just as this time last year, we were having a conversation where the market was at 2,400, i saw to recession for 2019 and pa really for 2400 and thought fair value was somewhat closer to 2800 or 2900 that's been our position while uncomfortable for sure, this is reminiscent to me in terms of how stretched sentiment is of 1999 we have valuations that are really, really excessive, by almost every measure price-to-revenue, 2.3 times. enterprise value of ebitda and
4:03 pm
the s&p at about 14 times. i could go on and on we could talk about price earnings ratios on an ltm basis of about 21.5 times. the market did not have any earnings growth this year. the yield curve inverted, something we forecast. the trade war was prolonged, also something we've forecast. all of the conditions prescient to our caution in the second half occurred. but at times, sentiment overwhelms the sort of rationale analysis that we're supposed to be doing as strategists. so what did we get wrong we got sentiment wrong on a risks are behind us narrative. and by the way, listen to fedex, listen to u.s. steel i can go on and on those risks by my estimation are not behind us. >> what's the catalyst for this pullback that you still expect and how big a pullback do you think you can see >> the timing, we have gotten
4:04 pm
wrong. it is difficult to see how much longer this rally on sentiment can last catalysts can be numerous. sometimes it's what i call the weight of water. meaning people just kind of wake up to the fact that markets are pricing in a perfect scenario, which is exactly what they're doing next year. earnings expectations for next year are plus 10%. and the market has completely looked through what was going to be flat earnings growth for this year the market has rallied almost solely on buybacks and multiple expansions any hiccups in earnings in the first quart fourth quarter could be one of those catalysts. >> the one area i would disagree is i think people are not excited enough about the economy. we're predicting a 3.2, 3.5% gdp growth since world war ii, the u.s. has kbro grown an average of 3.2% per year so we're saying an in-line
4:05 pm
growth rate. we have a stronger consumer and a lot of the fears american ceos were very worried this year. i think they'll be spending more money next year, so we'll be modestly bullish on the economy. >> the final reading of q3 gdp was 2.1% for q3. peter, where do you stand for the q4 >> yeah, look, i think our assessment for gdp is, obviously, a bit more bearish. we think that the data will start to roll over the consumer has been extremely dependent on the credit markets. real wage growth has been lackluster at about 0.8% relative to about 1.6% during that period of time during post world war ii credit is really, really important for the market earnings growth, relatively flat next year by our estimation, so corporate profits will not be a driver and look, monetary policy, a very important piece here. not as efficacious as it used to be, globally as well in the
4:06 pm
u.s., it doesn't have much room to cut and lastly, the benefit of the tax cut is really in the rearview mirror here, and i think that's an important, alongside what are massive deficits, which are impacting the credit markets, in the repo market specifically, and the fed is increasing the size of the balance sheet. but that's the counteractive dislocation that happened in the repo market in september >> mike, looking ahead to next week as we think about the santa claus rally timeline, it begins, right? tell me when the actual -- >> that's right. it's supposed to be, i guess, from christmas through new year's or maybe through january 2nd or something like that but basically, it's more like a negative test. historically, it shows you if the market does not go up over a few days, it's often some kind of a warning for the first quarter. it's not so much saying it always goes up over that span. but obviously, we've put a lot in the bank in terms of gains
4:07 pm
already in the first quarter i'm not sure that it will be that significant 2% gdp, inflation, and 2% ten-wreten ten-year treasury yields that is fine although valuations are now higher over most of the time we've had. something could come along to disturb that idea that we're going to be in that zone >> mike, to charlie's point, if we had a 3% gdp growth next year, is that a kind of bad thing or good thing or depends on where bond yields go? >> i think it's a good thing you would have to know what the counter to that would be in the way of what happens to longer term bond yields this bull market has done -- made no progress with bond yields on a net basis of up 2.5% maybe it will, but it hasn't if you get to that point and have that test, is the fed really, really resolute in doing nothing in that type of environment? i'm not sure
4:08 pm
but that would be the thing the look for >> stocks finishing the week in the green. we'll send it over to seema mody for a look at the biggest winners and losers >> s&p now riding a four-week winning streak thanks to further evidence of the consumer holding up well as we close out the year strong earnings from conagra brand. and retail ended up being one of the better-performing sectors for the s&p, led by shares of gap, up 7% no surprise, industrials, transports were the laggards on news that boeing is halting production of the 737 max, shares of ge but fedex by far the worst performer in the s&p on weak earnings, lowering its 2020 kbi guidance as it doubles down on investing and ecommerce on rival amazon as we look at 2020, can you give us some of your best picks >> well, we want to buy what's out of favor and inexpensive and not buy what's in favor and what's expensive when you talk about the market,
4:09 pm
that's counting the amazons and the apples and the microsofts. so the spread between nasdaq and value is very wide so we're saying, value stocks are going to do better we're saying bond substitute stocks are going to do worse, as interest rates go up and we think there's going to be a little bit more inflation. so things like fertilizer companies and maybe even energy stocks are going to do better next year in a strong economy. >> charlie, you are big on the likes of blockstone and kkr, they've done very well you're also very big on lazard, hasn't done well are you still bullish on that? >> it's because black tonne and kkr were partnerships and couldn't be owned by the indexes. and lots of money has been flowing into indexes they made the smart move to convert into c copperrp.s both were up literally 90% lazard is still a partnership and can't be owned by the s&p 500. it's trading at 11 times earnings, where blackstone is
4:10 pm
close to 18. we're hoping they will see the light and convert to an s corp >> peter, what's your top pick for next year? >> i think we like reits i actually think the ten-year will have a lot of trouble getting above 2 or 225 rates will go lower on the slowdown we expect and reit reis tend to be very slow cycle >> it's not easy being the grinch >> we appreciate your honest perspective on what's going on and what's to come thank you for joining us coming up next, we'll talk to former twitter executive katie jacob stton out anabher new female-focused venture capital fund why she says now is the right time to launch "closing bell" is back in about 90 seconds gold! right, uh...thank you, for that, bob.
4:11 pm
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. so w>>i'm searching for info on options trading, and look, it feels like i'm just wasting time. wasted time is wasted opportunity. >>exactly. that's why td ameritrade designed a first-of-its-kind, personalized education center. see, you just >>oh, this is easy. yeah, and that's >>oh, just what i need. courses on options trading, webcasts, tutorials. yeah. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. >>so it's like my streaming service. well exactly. well except now, you're binge learning. >>oh, i like that. thank you, i just came up with that. >>you're funny. learn fast with the td ameritrade education center. call 866-296-7451 or visit tdameritrade.com/learn.
4:12 pm
get started today, and for a limited time, get up to $800 when you open and fund an account. that's 866-296-7451, or tdameritrade.com/learn. ♪ welcome back to "closing bell." new research shows venture capital funding by all-female companies hit an all-time high $3.3 billion went towards all female founded companies while that's an increase from 2017 and 2018, it still only represented 2.8% of capital invested one vc fund is looking to increase investments in companies led by women and other underrepresent eed groups. the fund's founder and partner
4:13 pm
joins us now katie, i don't understand why there's only 2.8% of these funds going to female founders it doesn't make sense to me. are there not enough female founders >> no. it doesn't make sense to me either i think it's great opportunity i think that there are a lot of amazing female founders and a lot of amazing people to have color founder who have been left out of the system and they've been underestimated. and i'm really excited i think of this as this amazing opportunity to be able to back their changing world positive ideas. >> and katie, does it also mean that there are bern returns potentially available because of these founders and their companies have been overlooked thus far and therefore maybe the valuations or the growth opportunities are better relative to the market >> absolutely. the data has shown that when you have more diverse founders and more diverse leadership teams, you're able to see a lot better financial returns. i think that this is an enormous opportunity for more women
4:14 pm
founders, for more women fund managers and more female investors to be able to move the industry forward >> so why is now a good time for you to launch this fund? and if there is a female founded company out there that's listening, can you explain exactly what you're looking for? >> i think it's a great time, because i do think that founders are looking for something different. there's a lot of capital out there. and founders are looking for people like me, looking for other types of investors who have operational experience and product and marketing and bringing products to scale globally they're also looking for people that may have a different industry expertise in climate and life sciences and other types of industries. so i think there are a lot of opportunities, more ways to get funded i'm looking for exceptional founders who have these world positive items i'm always looking for at least one technical founder. and looking to, you know, learn more about them. >> katie, it's been a bit of a
4:15 pm
trap for people to predict the peak of the silicon valley cycle. at least five years, it seems like things have been rolling around for a while what businesses, what types of businesses do you think have a lot of opportunity right now that people ahave not fully explored to date >> i think there are a number of new trends i think we'll see a lot more ai, machine learning types of software companies i think we'll see a lot of really interesting enterprise companies. we know those have been really good to invest in. i think beyond meat and impossible burger have really led the way for more food tech and ag tech. and i'mvery hopeful we'll see whole new wave of climate tech to be able to address some of the pressing challenges that we have in front of us. >> if you found a really great investment opportunity and the numbers looked phenomenal, but
4:16 pm
the founder wasn't in some way from a minority or female, would you still consider it or not >> absolutely. i do think that, you know, it's important to be able to back the very best founders, but i also think it's good to be intentional about making sure your deal flow is representative of the real world. so i'm looking to back any kind of great founder and supporting them with different types of network and operational experiences to help them achieve their investigation. >> katie stanton, thanks so much for joining us >> thank you very much for having me. still to come here on "closing bell," we will break down the charts to explain why the traditional portfolio strategy of 60% stocks, 40% bonds may not be coming obsolete, as some claim. and later, we will discuss enomrccoans veha be faring this holiday shopping season, particularly the resale players when we speak exclusively with the ceo of posh marc powers a booming auto industry...
4:17 pm
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.
4:18 pm
4:19 pm
. welcome back let's get over to mike for the third installment of today's dashboard. >> a very basic traditional asset allocation strategy, 40%
4:20 pm
bonds, 60% stocks. a lot of people are saying that for various reasons, it might actually be obsolete or dying. look at the total return this year, including income on top of price kbgains of the vanguard fund, it's about 20% year-to-date the very long-term average for this asset allocation mix is about 8% and look at the smoother ride that you go with those bonds diversifying you the jagged move with stocks. in a very strong year, the stocks are always going to outperform the starting bond yields right now if you were to invest fresh money in this strategy are 2 to 3% depending on corporates or treasuries or whatever that's basically what your return will be over the long-term. they say, what's the opportunity? that's basically where inflation tend to be they diversify you it seems like that effect that has not gone away.
4:21 pm
it's worth the reminder that you shouldn't ditch this idea, because buying yields seem low >> it's quite interesting. 21% this year. >> obviously, starting off of a low base but bonds have done so well. >> i guess the fear for the traditional holder of that type of portfolio is that the worst-case scenario of a big equity pullback because rates are rising means you should just hold cash. >> and it doesn't hurt to have some of that in there, too it would have an exacerbating effect we haven't really seen that so far. >> it's something people will fear coming around the corner. coming up next, black rock's says this year's rally will carry over into the new year find out where he sees the biggest investopportunities for investors, straight ahead. >> which names are shaping up to be the big winners that's later here on "closing bell."
4:22 pm
(speaking japanese) where am i? (woman speaking french) are you crazy/nuts? cyclist: pip! pip! (woman speaking french) i'm here, look at me. it's completely your fault. (man speaking french) ok? it's me. it's my fault? no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. (pterodactyl screech) believe it. geico could save you 15% or more on car insurance.
4:23 pm
4:24 pm
doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. welcome back here's a look at the "closing bell" big board. record highs for all three of them then we've got the best-performing sectors today. a fairly defensive tilt, but a very positive day overall. all 11 sectors higher. underneath, a quick glance at the ten-year note yields, picked up nicely over the week. slippage for gold and oil. it is now time for a cnbc news update with sue herrera hi, sue. >> hello, courtney hello, everyone.
4:25 pm
here's what's happening at this hour austin police say one person has been arrested and charged with kidnapping a mother and her infant daughter. investigators had been searching for heidi broussard and her baby for more than a week last night they believe they found the baby alive as well as the body of broussard inside a houston area home. a woman was dragged by a car after being robbed in a st. paul, minnesota, parking lot this weekend the woman was not seriously hurt the images were caught by a security camera and police think this is a string of purse snatchings in that area. the queen of england began in norfolk today to begin her christmas break at the royal family sandringham family estate her husband, prince phillip, is not with her he is spending a few days at london hospital for observation after being admitted this morning. andrew bailey is being admitted a as the new grn of the bank of england. he has spent a majority of his
4:26 pm
career at the bank and will have the task of steering britain i through brexit back downtown to you, wilf i don't envy him that task of getting the country through brexit going to be a tough one. >> well, yes, but i think it much tougher for the prime minister and his team than the central bank governor, who has to finesse the thing to the edge that was a picture of the chancellor, who announced that it would be andrew bailey, who's seen as a safeand sensible choice he's been in the bank before and has headed the ft arna, since t. the question mark for the bank of england is that there is already inflation. so if we do see the economy improve a little bit, there haven't been any rate hikes like the fed went through over the course of the last couple of years. there's potential for a hike if brexit doesn't derail things we'll have to wait and see >> we will wait and see, indeed. have a great weekend >> thank you and have a wonderful christmas
4:27 pm
>> thank you, i, too >> li will not be here next week the msci world index hitting all-time highs will the rally continue and what's the best place to put your money joining us, portfolio manager of black rock's global allocation fund ross, good afternoon thanks for joining us. >> thank you, happy holidays >> like woowise what is your outlook for the economy next year? >> we think the economy looks fairly solid it's not going to be a return to the late ''90s we think between the strength of the u.s. consumer, and the pivot by the world central banks earlier in the year , the basic underpinnings look relatively stable and it should be a year of decent, maybe uninspiring, but decent growth for the global economy. >> and so that means stay in
4:28 pm
equities >> it does mean stay in equities i think the real question for 2020 is when are those gains likely to occur and what types of equities are going to do best >> would you stick with some of the winners? as i look at the nasdaq 100 performance, up 37% year-to-date, those big tech names still look attractive to you? >> i think for the most parts, they do. we're still in an environment where there are segments of the economy, and i would name technology, communications, health care, parts of the consumer discretionary space that are benefiting from very powerful secular tail winds. this is where we see cash flow generation, profitability, sustainability and earnings growth and if we're still in an environment where it's decent growth, but it's not the type of growth that produced the value rally in late '16, we still believe a lot of those secular growers like technology, you want to stick with them into 2020 >> what about overseas equities?
4:29 pm
>> overseas is going to be a bit trickier you know, this has really been a decade where the u.s. has dominated. we expect that to continue into 2020 that said, we know most investors have too much equity in the u.s we would diversify outside of the country, we see some of the best opportunities in asia, particularly in emerging markets one of the places we've been overweight in the global allocation portfolio has been china. it's been a bit of a rough ride, but you've seen some tremendous performance out of the more domestically oriented companies, particularly in areas like internet commerce, which are just taking off in asia. >> so speaking of domestic versus international, if you look at your expectations for the dollar, how would that play into your theory for 020 and what makes sense here? >> so the dollar is always critical the first thing with the dollar is the dollar does affect financial conditions it does affect liquidity if we had a much stronger dollar, that would be a bit of a
4:30 pm
head wichwind for u.s. equities not our base case for 2020 we think the fed is on hold and we think that some of the softness we've seen in europe is probably passed a little bit of a better growth environment which means that should esuppsu some of those emerging markets we spoke about >> do impeachment and the election concern you >> impeachment, this is going to play out, i think so far this week, we saw a big yawn from investors. part of the reason for that is no that it's not critical, but most people have already discounted the outcome, which means that trump will be impeached in the house he's very likely to not -- to be acquitted in the senate. i think the election will be a big deal and this is one of the reasons when we think about 2020, we expect a decent year for stocks. we think that the gains may be disproportionately experienced early in the year, particularly in january, because as you great into february and march,
4:31 pm
attention is going to turn to the election and it may be a longer period than people are expecting. now, this could go all the way to the convention. that's going to produce some uncertainty and that's why we think a lot of the gains might be earlier in the year >> russ. i wonder, that's a fairly, i would say, standard take so why are people going to decide not to recognize that the lerks uncertain election uncertainty is coming and i'm wondering about the cadence of things as we get into next year. >> i don't think it's just january. it's a totally fair point. but you think about some of the things that are supporting stocks into the beginning of the year you have a lot of momentum generally, it's been a strong rally, but a lot of people did not participate. particularly retail investors. we saw a massive sell-in of stocks for much of the year, etf and mutual funds people come into the new year, they put new money to work, particularly after a strong year
4:32 pm
like 2019. so i think we're going to see some early momentum in the year. when the election starts to affect markets is an open question, because it does depend on what happens inary, new hampshire, and south carolina. duh bu as we get into the spring, we could see a bit more volatility >> russ, we were talking earlier about the 60/40 portfolio split, do you think for the next decade, holding mondays will be a good diversifying tool against equities or not? >> i do believe it you know, this is something that as your previous guest mentioned, has been thrown out many, many times it continues to work and i think the reason it continues to work is you're still getting that hedge from bonds in your portfolio. and the reason is, stocks and bonds continue to trade with a negative correlation and i think that's likely to continue the times that you see that changing, tend to be times where you either have seen an acceleration of inflation or a
4:33 pm
more hawkish tilt of the fed that's not our base case and the thing that typically share s investors is normally fears about growth in those types of scares, bonds actually work as a better hedge than cash, which is why we would stick with the 60/40 allocation going forward. >> so what is the biggest shark close to the boat? in your opinion? the biggest risk to 2020 for your base case >> you know, we were just talking about that today the big risks are not as obvious. throughout much of the year, we had china and brexit, both of which have temporarily been taken off the table. i think the issue is still, are we going to see something in policy, the u.s. election is potentially one catalyst that undermines confidence, whether on the corporate side or the consumer side, that starts to erode at this very fairly constructive scenario many of us have that could be a game changer, but for now, we think the economy looks fairly solid and we remain tilted towards
4:34 pm
equities going into 2020 >> well, thank you very much, russ, for giving us your outlook for 2020 >> thank you >> up next here on "closing bell," we will discuss how facebook chief operating officer sheryl sandberg's legacy has been impacted by the company's scandals over the last decade. plus, the ceo of ecommerce company poshmark tells us what protections they have in place to ensure products are authentic when "closing bell" returns. [grunting]
4:35 pm
[maniacal laughter] 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.
4:36 pm
4:37 pm
♪ for facebook's sheryl sandberg, 2010 saw the highest of highs and the lowest of lows. cnbc's digital sal rodriguez is here with more, having written this article on cnbc.com, sal, it's titled, here's how sheryl sandberg plunged from global icon to just another powerful tech executive it's a great read, sal i recommend everyone go to cnbc.com to read it. i wonder whether the term
4:38 pm
"plunged" in the title, you feel, really sums things up. when you read the full article, i don't feel like you've come away thinking that this decade has been that bad for her at all. >> yeah, well, thank you, wilf, for having me. i think the word fits in that her highs were just so high at the start of the decade, right she took, you know, facebook from $2 billion in revenue in 2010 to projected $70.5 billion in 2019. and all of that success, you know, it made her a billionaire, it made her a board member for the company, a female icon in the business world and a household name across america. but more recently for facebook, following the cambridge analytica's scandal, all the election interference, that's really been a dent for the company andalso for sheryl as well >> but do you think that that -- some of those scandals, like you're talking about with cambridge analytica and the election interference has
4:39 pm
damaged the progress that she's made for women in the workplace with her "lean in" books and the like >> well, i think it certainly has -- it's made a dent in her reputation i think specifically, with the scandals, cambridge analytica, there was a report last year from the "wall street journal" that mark zuckerberg blamed her specifically for that whole mess so that along with some of the criticism that her book "lean in," has received from people who point out that, you know, it's not very encompassing of, you know, minority women or women from lower social classes. that has really damaged the progress that she had made prior to all of these scandals >> sal, thanks so much for joining us i recommend everyone go to cnbc.com to read the full write- write-up >> thank for having me well, coming up next, fast fashion. secondhand ecommerce company po poshmark taking more traditional
4:40 pm
retailers by srmto, but can it combat customers' authenticity concerns we'll hear directly from poshmark's ceo that's straight ahead. each day our planet awakens with signs of opportunity.
4:41 pm
4:42 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. ♪ welcome back the major averages closed at new highs once again today, as trading volume soared on wall street seema mody has the details for
4:43 pm
us >> that's right. despite the holiday-shortened week coming up, today was the heaviest single volume day of the year, doubling the 50-day average, and that is because it's the third friday of the month, also known as quadruple witching day, the quarterly expiration of stock and index futures and options. volume on ttripled its 30-day average. k see on the bottom, 145 million shares exchanging hands. typically, you would see a number close to 57 million certainly notable as stocks close at record highs. >> thank you, seema. something we discussed a little bit earlier in the show. online secondhand shops gaining ground poshmarks boasts 50 million users with one sale made every second and the resale market is growing ever more popular among millennials and gen "z" consumers. thank you for joining us there's been a lot of talk about the resale market in retail and
4:44 pm
you see retailers like macy's trying to experiment and trying to figure out how they might be able to tap into this market, with one of your competitors doing a pilot program with threadu threadup >> we have had a couple of different conversations, haven't finalized a direction there, but it is a huge trend and something that i think gen "z" and gen "y" are really latching on to. and it's gaining very rapidly. >> so your platform works perhaps a little different than some of the other platforms, where the sellers of the goods for the most part retain the goods themselves and they're in charge of posting the photos, doing the descriptions and posh marc is the platform that connects the buyers and the sellers. you take a 20% commission and the buyer ends up paying for the shipping so i'm wondering when you have products exchanging hands sort of peer-to-peer and there isn't poshmark getting involved and touching or seeing the product, what do you if a product is
4:45 pm
misrepresented for a buyer >> so we have a sort of three-step process in terms of making sure that the transaction goes smoothly. the first thing is really validating the content that the sellers are posting online and so that is something that is a constant process of both using machine learning, community moderation, andcentralized moderation to make sure that that content is as good and as high quality as we can we have over 100 million items posted at any given point in time the second thing is protection that we offer for buyer and seller and the way that the transaction works is that the after the buyer has had the item and they have accepted it. if they have a problem, they dispute it we value -- we verify the dispute and have the item shipped back to the seller for items $500 and over, we actually physically authenticate them they go through something called posh authenticateand we
4:46 pm
physically authenticate them and reship the items to the shopper. >> and with that last program, you do say shop with confidence knowing that your purchase will be 100% authentic 100% of the time how can you guarantee that i'm not sure if you're familiar, but cnbc did a pretty in-depth investigation with the real real with a similar promise and it turns out they weren't able to do that # 100% of the time >> one of the challenges in authentication as you pointed out in that article and as we see that is we can do our best and we try to eliminate as much as the defects as possible, but the world continues to innovate very much like with what you saw with high-end paintings and the qualities of fakes can sometimes be very, very high so we try to extend the warranty, and if you have other problems, even after you've received that item, we try to serve you as best we can for example, for some of the more exotic things like channel and others, where you may have
4:47 pm
vintage jewelry or bags, we employ external authenticates to help verify. there's no such things that can be 100% guarantee, but we try to get you that 100% guarantee. >> manish, i wonder if you do analysis on what average price discount your products go for from their at least, most comparable original value. are we talking people buy stuff and exchange stuff for 10% of its original value or 90%? >> it's typically between 50 to 70% off from sort of suggested retail price there are items that will only go for 10 to 20%, some items may go for a premium a lot of items may go for 90% off. it depends on the popularity of the item, the age of the item, the quality of item, and then sort of the recirculation value, you know, for example some of the belts i've bought, they're barely 20, 25% off, at the same
4:48 pm
time, sometimes i'll be shirts that are almost 80% off their retail price >> so to what extent do you feel like the brands consider you as a direct rival i would imagine if these are old items with huge discounts, it doesn't bother them too much but if you're talking only 20% discount, i imagine the brands don't like you very much >> i think -- we are sort of talking to brands, we've partnered with several brands and i think this sort of continuum of retail and resale is something that's being triggered by the consumer. we're not sort of necessarily always creating it we're giving away for the consumer to participate. and when you think of something like gen "z," they're obsoleting their items. they focusing on building out these communities that we offer them a way to move the item forward. and ultimately a nice pa partnership with brands will work very well >> and before we let you go, we should ask you about your forward plans.
4:49 pm
are you looking to ipo, similar to what we saw from the real real, perhaps? >> we certainly can comment. i think the business is scaling very nicely. we have distributed over $2 billion to our seller stylists and continue to see the business scaling, both for gen "y" and gen "z" and certainly some of the core commerce. so we'll look at the right plans in 2020. it's a nice decade opening up. >> manish, thanks so much for joining us >> thank you for having me >> still ahead, we're only five days away from christmas and retailers are expecting a huge shopping surge in the next few days mi uhatoat, wt wch congp. clpriority.the number one i would declare a state of emergency on day one. congress has never passed an important climate bill, ever. this is a problem which continues to get worse. i've spent a decade fighting and beating oil companies, stopping pipelines, stopping fossil fuel plants, ensuring clean energy across the country.
4:50 pm
how are we going to pull this country together? we take on the biggest challenge in history, we save the world and we do it together. apple card. is a new kind of credit card, created by apple, so it's simple and transparent with a new level of privacy and security. it lives here and here- on your iphone, and it will save you 6% on holiday gifts at apple; like iphone, apple watch, airpods pro and so much more. ♪ apply in as little as a minute, right in the wallet app.
4:51 pm
4:52 pm
welcome back lets send it over to mike for the final installment of today's dash board. >> a long more sharp horns waved around the market from the bulls. the we cannily check of bull and ber indicator. a measuring of positioning and sentiment the we try to gauge if the market went to successive highs as bullish orb optimistic they're. your at the 18 month high for the indicate are this gave you an excellent buying ton
4:53 pm
overshot to the downside back in august and september that's about almost a two-year high because it gets you back to the spring of 2018 however, on a longer term chart you can see the upper bound of extreme bullishness is not that close. this suggests there is room to have people get more aggressively positioned and in a better mood before this gives you a clear signal that the rally run its course. >> that last time we went above the extreme bull was when. >> this is the run to january of 2018 and then you plunge from there i think it was last around the levels in march, april of that year on the way down. >> in terms of the other indicators, overbought oversold. >> they're getting there more overbought which just means a strong rally and short-term indicators mood indicators suggest people are bullish right now but not in a way that says they are positioned in a speculative aggressive way. >> got it. thank you, mike.
4:54 pm
>> up next, the wall street look ahead, the key things every investor needs to watch when we head into a new trading week when "closing bell" comes right back
4:55 pm
4:56 pm
what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the 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 looking ahead to next woke in the final stretch for holiday
4:57 pm
shoppers with christmas just five days away court is standing by with a look at what that means for retailers. but new home sales due out monday and diana here a look at that. >> new home sales have been choppy this year but improved from last year the average rate on the 30-year fixed is full percentage point lower than a year ago. housing starts have been improving this fall and builder sentiment at the highest level in 24 hours. at supply of existing homes for sale is slim the wildcard will be affordable. we'll pay close attention to the price numbers on monday. back to you. diana, thank you for that. we're just five days away as we said from christmas. headed into the final stretch for shoppers and retailers courtney has a look at what means for stocks. >> makes sense the final week before christmas always sees significant volume for retail. but this year more critical. six fewer days between thifgt
4:58 pm
and christmas and the overlap of hannukkah and christmas happens this time too. 56% of shoppers will still buy the final gift in the week leading up to christmas. tomorrow is called supersaturday, the nrf expects nearly 148 million consumers will shop in store and online. that's up from 134.3 million last year. it could make it the biggest shopping day of the year, though shopper track puts tomorrow at number two for stores. either way a huge day. standard shipping for christmas ended midday today for target.com wal-mart.com and amazon. you have more time for macy's and nordstroms you are taking a risk. be careful. >> i'm in the final 56%. >> me too. >> but partly because calculated decision, the pound may have recovered but still weak in any general term i'll do it back there. >> this study that you mentioned court did not account for
4:59 pm
arbitrage of currency. >> you don't have to think about a about that. >> i'm making the most of it. >> so macy's and nordstrom do they do anything different that allows them to guarantee it. >> such a great question i don't know that in particular. because i would have thought that target or wal-mart would have had extended days comparison to macy's or frord nordstroms especially with the proximity of the stores and the omni channel i was surprised when i checked on it. there was a 12-hour benefit to macy's and nordstrom i think it's risky though. >> mike spins to the broader markets. clearly record closes, strong volume and near the highs of the session at the close. >> it's unassailable and a completely 1807 from a year ago. a year ago earn was negative people selling stocks hand over physical and a great buying opportunity. it's not the opposite right now.
5:00 pm
because uptrending markets tend not to turn on a dime in the country shendo the ways the ones going down do. worth keeping in mind if you felt smart for buying the panic, how do you feel when you have the exub rans. >> fair point. closing at record highs for all three major averages again today. that does it for "closing bell." >> "fast money" begins right now. yes it does courtney and wilf thank you very much live from the nasdaq market site over looking times square, this is "fast money" i'm brian sullivan in for melissa again. hi, tim. >> your traders tim selmer carter worth and guy adami on fast it's been a no good bad woke for boeing opinion rumbling the max could be out of service until summer we'll talk about the impact from the stock straight ahead plus ripple makes a splash the jaw dropping valuation that crypto company locked in thanks for get going. and check ou

110 Views

info Stream Only

Uploaded by TV Archive on