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tv   Making Money With Charles Payne  FOX Business  July 19, 2019 2:00pm-3:00pm EDT

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joe piscopo an alum. charles payne. to you. charles: neil, thank you very much. good afternoon, i'm charles payne. this is "making money." we're back in the green. big names helping the stock market. the breadth also helping with driven by corporate profits as first week of earnings season in the book. i will tell you how-to book and invest profits, not the same as earnings. i will teach you that. the fed, he joins most investors hoping for rate cut. i say the commander will be thrilled by the new thinking by powell and company. it was 50 years ago tomorrow. apollo 11 astronauts made the first visit to the moon. we remember the historic moment. that and so much more on
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"making money." ♪ charles: another good day for the market. investors getting more evidence of a rate cut on the way. president trump pointing out the world is cutting rates, the fed should as well, because of faulty thinking process there at the federal reserve. he is worried saying we pay much higher interest rates in countries no match for us economically. another words our interest rates are much higher than other countries when they should be lower. this comes from comment from three fed officials that boosted expectations after rid cut. edward lawrence at the white house. reporter: you are talking about james bullard, john williams, new york fed president and richard clarida, and jerome powell in a speech today. he pushed federal reserve to have a rate cut during their
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next meeting. i want to zero in on the third tweet that he made. the president said in that tweet, quote, this is our chance to build unparalleled wealth and success for u.s. growth which would greatly reduce the percentage of debt. don't blow it. president pointing out inflation is low, running under the federal reserve target. vice chairman of the federal reserve richard clarida says they're operating where the economy is going. he says the fundamentals are strong, job growth, low inflation, customer spending n an exclusive interview with our liz claman, he signals a rate cut. listen to this. >> reality in the past the fed and other central probation found it appropriate to take out insurance policies in good times. that is part of the tool kit. if you need to use it, don't need to wait until things are so bad to have a dramatic series of rate cut. reporter: don't wait until things get bad before using the tool. you see possibly a signal. the federal reserve wants to
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head off any type of economic slowdown even before one starts to gain momentum. collar rid today says the economy is in a good place. federal reserve chairman jerome powell said the fed will act as appropriate to sustain the expansion. that the fed will use all of its tools to insure the expansion continues. st. louis federal reserve president james bullard within the last 24 hours actually said that he believes that the rate cut should have happened the last time. there on the screen is john williams, new york fed president. who also alluded to a rate cut but the st. louis federal reserve president believes it should have happened last time. he believes one should happen this time. in his mind of the trade uncertainties a global economic slowdown would cause to us have this rate cut. back to you. charles: thank you very much. joining me neil richardson, edward jones, mattie doppler, national taxpayers union and
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vision four funds vp heather zumarriaga. let me start with you. market got really excited, new york fed president williams talked about a research study. he didn't talk about tariffs or anything else. what he pointed out what is bothering the fed, if inflation gets stuck too low, below the 2% goal. people may expect it to stay that way, creating a feedback loop pushing inflation down over the longer term. i think they're worried about a deflationary death spiral. >> exactly. boil down to the words, we don't want to turn out to be japan which is in a very slow growth momentum. what the fed is trying to engineer with this rate cut to increase economic activity, by lowering the costs of borrowing for companies and consumers in order to get activity to burst through again, give the boost to economic activity that will eventually lead to innation. charles: mattie, you're my
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orthodox stickler. do you like this new fed thinking that i have surmised here? >> i don't think that you're wrong, charles but i think this will be the topic of conversation for the next few weeks leading up to the next meeting. last week the fed chatter would whether it would be 25 basis point cut or a 50 basis point cut. now this week it will be what is the rationale. that is the different arguments from bullard. trade tensions and global slowdown is the reason fed should act to cut-rate. the question of inflation is a good one and we don't know if an inrate cut will spur the growth that has been latent for several month, through several cuts since we expected to be able to turn into inflation. again you hear a lot from powell talking about how their action is going to be considered to extend the current economic circumstances. that is a different calculus than saying we need to act to get ahead of the recession or
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the fact we see economic data weakening. we need to hear from fed officials whether or not they see the economy is strong, whether or not they take out an insurance policy or they think some of the fundamentals are starting to weaken. charles: speaking of 50 basis points, heather, going into yesterday's session, wall street had a 34% chance after 50 basis point cut. a week ago it was 19%. when the market closed yesterday it was 70%. i'm not sure where we are today. wall street really loves the idea of a 50 basis point cut. will it be disappointed if there is anything less? >> that is the problem. it may be closer to 100% of wall street expecting some sort of fed rate cut. i think that if the markets are expecting that, they don't get it, then the markets will sell off. i think if you want to please everyone which isn't the fed's job, you cut by a quarter basis point. you take last december's quarter basis-point hike off the table. you please the president, you
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please critics that say the fed is tightening too much and everybody is happening. half of 1% cut, the economy is doing pretty well right now. i just don't see the economic data that warrants that now. charles: maybe everyone won't be happy in the sense that you do have some purists out there, say only 2 1/2% now, rates. save your bullets. williams addressed that too, what he said was nuts. when we don't have many bullets we should use them all. using 25 at a time won't do the trick. if we only have 10 1/2 basis points, 250 basis points use as much as possible to arrest the problem. >> that is the current thinking. that is what williams research has been doing. one cut won't do enough. fed wants an inch. market wants a mile. charles: what happened? we expected rate hikes. >> a lot changed with the dovish
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pivot. the fed boosted large cap of 18% in first half. here is what is key. not where the economy is we all agree is sound. it is where the economy is going. charles: do you personally feel this would be justified if they cut rates. >> not based on where the economy is. i don't think a rate cut will lead to a trade deal. i don't think a rate cut will stem the tied of slowing global growth. charles: with respect to the future. >> what it will do extend the expansion, give stocks a reason to rally to support the bull market. >> let's remember it is not the fed's job to increase equity prices, right? charles: it's a not. real quick, less than a minute. you guys are brilliant. real quick the michigan sentiment report just out today, went over expectations for consumers because the fed does focus on the consumer, what the consumer is expecting. right now the consumer is expecting stagflation. if that is the case, mattie, is that argument for rate cuts?
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>> i mean 70% of our economy is because of consumer spending so of course it is an important data point but is it the only data point the fed its looking at? of course not. look at philly fed manufacturing report. manufacturing getting a bump after seeing a static hold for the remainder of the year. we don't know exactly what the economic picture is right now. nela is right we need to look where the economy is going. where the economy is going might be very different where the stock market is going. the fed needs to be sensitive to that. charles: stand by for a moment. we have big news. shares of boeing are up huge after the airline builder reportedly will take $4.9 billion charge. boeing saying the calculations are based on an assumption the plane would be up in the air sometime during the fourth quarter. kristina partsinevelos is live in the newsroom with more details. kristina. >> charles that is an after
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the-tax cost. that will be one thing in the second quarter. the reason we're seeing share price rise. seems like boeing is relatively confident. they must know something the fact these planes, these 737 max jets will be up in the air by the fourth quarter. boeing alluded to the fact there would be no production costs. that was a big deal. there might be a little bit after cost when it comes to production slowdown to the tune of $1.7 billion. could they be too optimistic given regulators have to approve the changes to their software. the $5 billion will be given to various airlines the fact they had to reschedule everything. that is the latest number, 371 planes have been grounded around the globe. so boeing is trying to, mend its relationships with a lot of these airlines. that fee, i will end it there, that fee, that $5 billion, does not include any litigation. there is lawsuits on boeing for
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negligence, as well as $50 million going to family members of victims that perished in the two crashes. charles: thank you very much, kristina. i want to come back to our panel. heather, i want to get your thoughts on that and boeing do you think it is over. first for the fed you were going to try to say something there. >> sure. i think the biggest danger, if we do have a true recession the fed rightfully as you point out runs bullets cannot cut rates enough to get us out of recession. janet yellen said the fed needs to cut rates 5% to us out of recession. boeing 737 is the best-selling plane but in terms of what is the impact on earnings overall, i think 4.9 billion which was pretax was widely expected after two devastating plane crashes.
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i think earnings overall will be a positive, very positive situation boeing aside. charles: also we got 42 planes being produced per month now. sometime next month, next year, that is going to go to 57. ne are. a, broken down stocks like boeing, for instance, underlying investment proposition is still absolutely phenomenal. you know, people trying to gauge this market where leadership comes from, you mentioned large cap names. could it still be the names like boeings of the world, caterpillar having a good session today? >> we're looking at industrials like caterpillar, like boeing, they are very tied to economic growth. a lot of them report next week. what we're seeing in boeing's stock price is up, because the compensation costs were largely expected. what investors keyed in on, is that q4 serviceable date, resumption of services of this fleet. now there is still a lot to go on. with boeing there is exhaustive regulatory review that is warranted, needed we're cautious
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about the date t could be delayed. there are a lot of leaders in the market right now, you have to be cale not putting all of your chips in one stock or one sector. we're still at late-stages of a bull market right now. charles: mattie, your thoughts now, late-stages of the bull market. we've been hearing cycle with the rally, expected recovery, i'm not sure, we might throw the old business cycle things away and form new once. market is looking freight. the economy is feeling great here. what are you concerned about right now? >> i'm really concerned about what happens on the trade front, charles. you and i have gone back and forth about this a million times what the administration will do to settle some of these trade worries. that continues to be the number one focus of firms when the federal reserves asks what is your number one concern going forward. that is ex-askerexacerbated that firms have enough employees that
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will be under added pressure if we have a trade war that creates additional hostilities for businesses that want ininvest and create jobs here in the united states. we need productivity on the trade front and usmca trade deal still languishing in congress. i would like to see motivation from democrats on that to see that get done before the end of the year. charles: heather? >> i think we will get a trade deal and usmca done by end of the year. not quite sure about the china situation. fed chair powell pointing to trade tensions in china as one thing they're monitoring. that is outside of the scope of fed policy we have to keep an eye on what the trade war in china does, it does have an impact on the markets. charles: has impact on psyche, the economic impact the fed told us over and over again has been diminimus. the psyche, that is again where the fed has to, it struggles, right? it has to figure out the psyche of the consumer, the psyche of businesses. business investment. you know, listen, ip investment
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is through the roof here. what do you make of this economy? how strong is it has been despite those persistent worries? >> the longer the fed goes outside of the book, which is -- charles: dual mandate. >> employment, natural rate of employment, more complicated the world looks the more complicated their job. the trade issue is a big one of the it is about market sentiment and the supply chain. more importantly about the future of tech. that is the story. that is why it is so complicated that eids back to the u.s. stock markets because tech is the leader. charles: isn't it interesting that semiconductor stocks have been on fire? i think chips are up 37, 40% this year and they were the ones that were supposed to be hardest hit by this war. >> that is the sector to watch. can they still perform with these trade tensions bubbling around? if wees can late will they still perform? do they see the trade impact.
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that is the question. charles: nela, head they are, i could talk to your ladies all week. thank you for your brilliant thoughts. >> thank you, charles. charles: gannett is soaring after "the wall street journal" is saying it neared a major deal. they will combine with gate house media. shares of gate house's parent company on the rise. british tanker seized by iran, this coming of course days after the uk forces seized an iranian tanker near the gibraltar. we'll have a lot more on this later on in the show. it has been 50 years since the apollo 11 moon landing. is america ready to win the next space race? we're in it. first elizabeth warren targeting wall street again, vilifying private equity firms. she says they're vampires an
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monsters. a month after bernie sanders slams walmart for giving workers quote, starvation wages his own campaign is accused of paying poverty wages. we'll break down the disconnect next. ♪ ♪. what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪
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charles: we have got more breaking news on seized british oil tanker. the price of oil now that the tanker company is confirming that their ship was seized in the strait of hormuz in international waters. 23 people on board. no reports of injuries. the company is yet to get in contact with them. uk fears iran is responsible. this comes after days the uk forces seized an iranian tanker near gibraltar. democratic presidential hopeful elizabeth warren is proposing a bill that would rein in private equity, calling them vampires that left a trail of failure of once-thriving businesses the massachusetts senator, just now tweeting, let's be real. private equity is like vampires, draining companies and making
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them rich. my new plan reins in these monsters to save our economy. private equity parachutes in when companies are struggling. they find ways of cutting costs which is sometimes a euphemism for cutting jobs, propping them up, trying to bring them back to life. sometimes the companies don't come back to life. toys "r" us goes out of business. it happens a lot lately. a lot of people are saying maybe only people benefiting from this relationship are private equity? >> that's one model of private equity, charles, but there are many, many examples of companies who have been bought by private equity firms. who then use their extensive connections and networks to basically leverage smaller companies into bigger companies. i could cite you a gazillion companies that base consider were taken on by private equity operators and made, and allowed to access, for example, foreign markets. a lot of small and mid-sized companies don't have the reach
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and the tools that are basically available to them from a giant company like carlisle or others. i think elizabeth warren has cited two interesting examples where she thinks that the process has unspooled unfairly, one being "the denver post," another mid-sized department store chain. well both those industries are in trouble. basically you don't really find private equity companies going in and looking at struggling companies unless they're already struggling. so the fact that, yes, you have to lay off workers at "the denver post" because they're not profitable, what is it about that elizabeth warren doesn't get? she talks about how she is a capitalist. i have yet to find a single sector of the american economy that is prospering that she is behind. we could talk about this for hours but. charles: right. >> i have no involvement in the private equity business but one of the things that is beneficial
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about it is, whereas corporate managers, public company managers have to sort of respond to a day-to-day of stock prices these guys don't. these are privately-run companies. can look for the longer term, have there been examples where companies were looted, yes, but often times because people didn't see change coming. i would say sears, with eddie lampert is a good example of that. eddie lampert basically ruined sears, but my guess it was under anyway. charles: liz, thank you very much. always appreciate your insight. thank you. netflix putting blame on lackluster content for its disappointing earnings but a new report a hollywood legend is working on a deal to come back to the comedy stage may help their woes. find out exactly who it is. it has been 50 years since neil armstrong said, "one small step for man, one giant leap for mankind." now there is a new space race. is the united states ready?
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♪ charles: it is the 50th anniversary of the historic moon landing. some 650 million people around the world watch the u.s. win the space race but there is now a second space race underway. buzz aldrin expressing his thoughts about our space progress to president trump moments ago in the oval office. >> we have the number one rocket right now in the u.s. we have the number one spacecraft. and cannot get into lunar orbit with significant maneuvering capability. that is a great disappointment to me. charles: nasa's chief financial officer jeff dewitt joins me from the nasdaq where they will be ringing the closing bell.
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jeff it has been a long time. great seeing you. >> thanks, charles, for having me. charles: the 50th anniversary is reviving memories what the space race was all about, the greatness, what was accomplished t was accomplished for mankind but those astronauts were wearing american flags on the uniforms. >> they were, charles and you know, 50 years ago, we got to land the first man on the surface of the moon and plant the american flag? i'm wearing a cast, pin of the boot print right here. the great news about this happening right now, we are currently planning not only to go back to the moon and put the first man, man and the first woman on the moon that is the stepping stone to get to mars. in our lifetime we'll see astronauts get to mars and plant an american flag on the the surface of mars. the next person on mars will be
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an american. charles: imagination about space are rekin dilled we heard buzz aldrin, saying hey, we should be able to do more, particularly as space becomes more crowded. >> right. i will tell you the previous administration cut a lot of things. we haven't launched american astronauts on american rockets from american soil in almost a decade now but we're going to do it within a year from now. we'll be launching american astronauts on american rockets from american soil going back to what he complained about there, low earth orbit, going back to the space station with american astronauts. we'll bring back that capability. we're within a year from doing it that will propel us to start doing it further and beyond to the moon and to marchs. charles: jeff, a couple things, the private sector, we're seeing remarkable things, rockets being reused, landing with precision. how much of the role will they play the future with nasa? >> we're partnering with thousands, thousands of u.s.
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companies across the nation. that is really what is helping us go factor than before are those partnerships. it is driving the u.s. economy. if you know how much nasa drives the u.s. economy, all the products we created over these 50 years, but no, these commercial partnerships are key to what we're doing. they amplify our budget, which allows us to do more, which is a great steward of taxpayer dollars. the partnerships are key. we're expanding those daily right now. charles: i don't think it is the purview of nasa, the space force, the idea so many countries are going to the moon, satellites orbiting earth contain our vital information, how important is it in your opinion that we do, we have the ability to make sure we police the heavens, if you will, because it is so part of our daily lives? >> absolutely. i don't like think people realize how much of their daily lives are involved in space.
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you couldn't conduct a atm transaction without gps satellites and timing they provide and farming. space is part of our daily lives. protecting that from bad actors is going to be key. we're at a point where a space force makes perfect sense. the administration is making that happen. charles: jeff, it has been a long time. appreciate the new gig. appreciate your time. what a wonderful period for mankind and of course for america. >> thank you, charles, absolutely. charles: speaking of americana, the corvette is back. it has a radical new design. they are pushing the engine to the middle for the first time in off years. a base model costing less than $60,000. president trump keeping up the on going feud with the quote, unquote squad. we'll have the latest there. this is something the media won't give president trump any credit for.
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3,000 inmates getting a second chance thanks to the first step act. why this moment would not have happened under a traditional republican president and why it did not happen under president obama. ♪ [ sigh ] not gonna happen.
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with feedback to help you drive safer. giving you the power to actually lower your cost. unfortunately, it can't do anything about that. now that you know the truth... are you in good hands? charles: shakeup inside of bernie sanders campaign as some of his workers are reportedly unhappy with their salaries. according to "the washington post" campaign staffers sent a letter to sanders' campaign manager they could not be expected to build a largest grassroots organization program in american history while making poverty wages. meanwhile thousands of federal inmates are returning to their families today from behind bars under the bipartisan prison reform bill called the first step act that president trump signed into law last year. president trump has been pushing
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for criminal justice overhaul, hopes those released will get opportunities for jobs as part of second chance hiring program. joining me to discuss fox news contributor david webb, american university executive in residence, capri cafaro. if this was barack obama this would be the number one story in the news. we would see families, men walking out of prisons. people would be criming and hearing this is what america is about, second chances an redemption. we'll not see that on the nightly news tonight but it is something. >> it matters not only to those 3,000 people but to the families in the communities. you would think that 3,000 people in the nation of 300 plus million is not that big but it actually is big. you returned them to the right side of the ledger. instead of consuming resources an money to house them, you're now giving them a second chance. what is important about this, go back to jesse jackson in the '80s, who praised president trump for this, when he was just donald trump, because he dives
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in and gets it done, he looks what you need. you need a first step. you need the law. you need a second chance, need the opportunity. faith-based component. community component. give somebody another option, add education component to it, ability to learn in prison, transition out, continue to learn. you give people a chance, an example others will take. charles: got to have the training component as well. >> that's right. charles: capri, what do you make of it. >> it is wonderful. one of the few things we can point to in washington right now that actually passed in a bipartisan manner, it has bipartisan support. you know it is very important to make sure that those that have offended, we call it the corrections system for a reason. that is to get people back on the right track but the aspect of training, vocation, and the ability to actually be employed reduces the opportunity, the potential of recidivism. that is were the second chances really come in. those individuals that have been on the inside, they need to be able to provide for their family
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on the outside. >> there is a component really important, i don't want people to miss, employers pay attention. the employ hears a stake in this. the fact if someone slips this also gives the employer a chance to retain the employee, give them a chance to recover, going into rehab program or whatever. this is a business-like approach to solving a problem. washington hasn't done it for years. >> ohio actually has. we did sentencing reform five years ago. charles: i don't think this would have happened under a traditional republican president. also president trump fueling fires again. taking on the fight with "the squad" again, continues. take a listen to comments from a moment ago. >> you know what i'm unhappy with? i'm unhappy with the fact that a congresswoman can hate our country. i'm unhappy with the fact that a congresswoman can say anti-semitic things. i'm unhappy a congresswoman, in this case a different congresswoman can call our
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country and our people garbage. >> capri, what do you think? >> i'm sick of "the squad." i'm sick of the conversation around "the squad." i want to move on desperately, not just because i think "the squad" is bad for business for democrats because republicans and donald trump are trying to paint us all as, socialists and people that make anti-semitic remarks whatever he was trying to paint "the squad" with. they have said some bad things and i criticized them for that. charles: this is really boycott thing is bad. >> i give israel credit saying they would let them come, even though they were advocating for this. i've been critical along with president trump, has not been great on this issue either. >> the squad is not, you have to include the fact they turn around feel like they are immune to rebuttal when they have spent the entire term attacking since they have been in office. aoc has been in office, what has she done? ilhan omar, what has she done legislatively? what is on books for scheduled meeting for immigration. they lie, cast aspersions.
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>> you bring up a really good point, david, this is a very good point, proving the fact these "squad" members don't have the legislative power. charles: they had a chance to vote on the bill to help the border situation. >> they voted against it. >> we have to leave it there. capri, david. >> thank you. charles: eddie murphy may be coming back to standup. do you think he will bring the leather outfit? this may be on netflix. "tmz" says they're discussing a 70 million-dollar deal. after netflix's stock tanked announced 100,000 subscribers were lost in the united states. murphy hasn't done standup in years. he did tease a possible return on jerry seinfeld's cars, comedians getting coffee in cars which airs on netflix. iran seize as uk tanker. they also deny that the u.s.
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charles: we're near session lows right now. oil closing up 33 cents a barrel since learning a british oil tanker is believed to have been seized by iran. this happening in the strait of hormuz in international waters. it comes moments after president trump hit back at iran saying the u.s. navy without a doubt shot down one of their drones. we have the heritage foundation director nile gardiner. this kind of stuff goes back. 2007, hms cornwall was seized by iran. the sailors were kept for 15 days. i remember back then, it was embarassment to the west, uk went to brussels for help, didn't get any help. more recently the uk seems to be much firmer in its resolve. what do you make of this, how this whole thing is playing out? >> yes, charles, certainly the uk is adopting very stuff stance towards iran at the moment. seeing british deployment in the area. british are sending a destroyer
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to the strait of hormuz. just in the last hour or so we understand that a british flagged oil tanker has been seized by iran's revolutionary guard. there is already an emergency meeting of the cobra team here in london. all of the key intelligence and defense chiefs are meeting to discuss the latest incident in the strait of hormuz. so britain is certainly on high alert with regard to iranian aggression and it is vital that the united kingdom and the united states stands up to any attempt by iran to intimidate international shipping in the strait of hormuz. this is latest sabre rat link of the iranian regime but britain is adopting a tougher stance than any other european country. charles: right. >> certainly the uk and the u.s. are closely coordinating efforts in the gulf to combat iranian aggression. charles: we have just a minute
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to go but to your point, it is so frustrating even recently in the last week or so, european leaders saying iran, they're being bad but they're not violating anything. let's give them another shot. are they emboldening iran to continue these bell lynn rant acts -- bell lick rant acts? >> the eu approach is pathetic and they're in full appeasement mode with iran. when britain leaves the eu october thirty first, they will move out off the iran nuclear deal and join the united states to reject this. french and germans what they do best right now, which is appeasing the iranian dictatorship. they're not doing anything to confront iran. we need all of american allies standing up to iranian aggression joining with the united states enforcing sanctions against iran but what we are seeing at the moment from europe is the usual weakness and
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appeasement in the face of the iranian threat and this is deeply unhelpful coming from much of europe today. charles: nile gardiner, always a pleasure talking to you even unthese difficult circumstances. you're the one who helps us understand it the best. thank you. >> thank you very much, charles. charles: president trump is about to leave for bedminster after his phone call with french president macron where he expressed concerns about france's proposed digital services tax. stay with fox business if he makes any comment heading out for the weekend. earnings season is in full swing. as usual the reactions are swift and emotional. i will go in depth to find out where the real values to help you make money. we'll be right back. ♪ don't miss your golden opportunity to experience our most advanced safety technology
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charles: all right, folks. earnings season under way and as usual, results, well, reaction to these results are swift and emotional. the knee-jerk propensity to sell first has become the norm and is magnified by the fact that companies that miss often do see brutal sell-offs. that was the case yesterday with netflix selling off more than 10% after subscriber growth came up well short of expectations. now, while netflix was getting
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dr drubbed, a lot of stocks enjoyed positive reaction. union pacific, ibm, williams-sonoma. profits are how much a company makes after paying expenses and as shareholders, you get a piece of the action through increased value, dividends and stock buy-backs. recent corporate profits have been a moonshot, folks. that justifies a much higher stock market. but it does bring us to earnings or earnings per share. the ultimate mover of stocks is not the ultimate reflection of the health or potential of a company. take xyz company. say it earns a million dollars with a million shares outstanding. that's a dollar a share. but then say a company buys back a whole lot of stocks and it only has 500 shares, 500,000 shares outstanding, well, it's $2 a share. think you get the message. so the true message of this earnings season thus far is where can you find real value. on that, i want to bring in rob.
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we get caught up in the earnings game and there's a lot of manipulation to make earnings bigger than they are but corporate profits are so big, so powerful and monstrous that for me, it justifies stocks being much higher. >> yeah, i think so, charles. you look, you brought up a great point, there's the woodshed moments we are going to see with companies like netflix, but let's face it, netflix is a stock that i think was extremely overvalued, had extremely high expectations, and when they didn't meet that, rightfully so, it got beat up. you mentioned honeywell, ibm, look at philip morris, this is a stock that is still yielding 5% trading at a discount to the s&p 500. they are moving into things like e-cigarettes right now which are a new growth initiative for them. it's a cheap stock, reports good earnings and the stock rallied 9% yesterday. why spend your time in a stock like netflix when you can get a good quality company paying a great dividend at a discount to the market and you see what's happened with a name like that and a name like honeywell. charles: when it's a company or stock that's not so obviously overvalued or that's not so high
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beta, such a volatile stock, and it still gets hit, yesterday ibm was down before it turned higher. there are a lot of names like that. how does an investor, people watching this show, how do they grapple with that? >> yeah. you got to remember, charles, there's a lot of different time frames and you know, motives for people, why they're buying certain stocks in this market. i think as an investor, a long-term investor, you have to be that, not a trader. at the end of the day, you have to look for solid fundamental underlying companies that are growing their business and yeah, you have to look at these earnings reports. this is an important time if you're a shareholder to see hey, are they playing games. so when you look at something like honeywell, it's a stock we don't own, would like to get into it but we weren't too excited because the reason they beat earnings, like you said, buying back stock. one-time tax initiatives. those aren't necessarily things they will be able to continue. look at the quality of the earnings when your company's reporting. charles: meantime, reports that the buy-backs are starting to slip a little bit. maybe companies are running out of money, i'm not sure. are you concerned that this
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could hurt the overall market? >> yeah, definitely you want to see corporate buy-backs. those are definitely something that will help propel the stock market higher. at the end of the day, those are financial engineering tricks and you can't count on that for a long time. you need the consumer to continue to grow but i heard you mention earlier, the consumer sentiment numbers that came out were great. that's 70% of our economy, but even more importantly, when you look at our u.s. consumer, it's a big part of world gdp, so as long as our consumer's doing well, i think stocks are poised to continue the rally. charles: couple names that reported this week that you think would still be good investments. >> yeah. philip morris i think easily has another 15% to 20% upside. you are going to collect a dividend while you're there. microsoft is another name we own but quite honestly, i think you wait for a little bit of pull-back there. outside of that, we are waiting for some of the big names that will be reporting next week. we are still pretty early on in this earnings season. one i would look at is philip morris. charles: rob, thank you very, very much. this is the kind of thing people want to learn about.
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we appreciate it. all right, folks. the dow is up 28 points. we have waffled really for awhile. this news coming out of the strait of hormuz that's not helpful. i want to hand it over to liz claman. i got to congratulate you. fantastic interview yesterday, you moved the market and you made news. liz: yeah. and so much so that the president who, as we know, likes when he has some spare time, started tweeting about that. you saw that, right? charles: i did. i did. liz: breaking news, the president is about to have some time on marine one. at any moment, the president is expected to hop aboard that helicopter to begin his trip to bedminster, new jersey for the weekend. he may make some comments to the press who have gathered there. we've got our cameras and will bring you comments when and if they come. boy, was he fired up about the federal reserve this morning. he ripped off blistering sets of tweets on the market-moving comments made by two fed heads yesterday. one of them, fed vice chairman richard clarida, right here on


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