Transcripts For CNBC Closing Bell 20240714

From Stewart Frankel welcome, steve thank you are we going to end the sixday win streak here . If we did would it be a shock . And its still plenty of time for us to turn around, turn green. We bounced about 6 off the lows but we are not overbought. So to your point, i dont think that we necessarily have toned today but its a good stop to say lets take a breather, were still above all the moving averages in the overall market about 10 handles lower in the s p cash but i still think were on good footing. Is 2900 a tough footh for the s p . It is because its a big fat round number so i think the 2954, the alltime highs, thats the tough number you have to worry about, not the 2900 lets focus in on the big stories we are watching. Bob pisani has whats driving todays market which of course has been up and down ylan mui is watching a tech antitrust hearing on capitol hill and phil lebeau is covering teslas Shareholders Meeting bob, lets start with you. Lets take a look whats going on its very simple this is a littleability of fad tooeg. Heres the highlight six days in a row we have essentially been on the up side and we have had a 6 rally its pricey now. Seven times forward earnings thats expensive for the market. We have a dovish fed priced in we have a china deal priced in none of this has happened. We havent gotten any rate cuts or a china deal yet. Tech stocks big move up. Some of the big names like amda donee, paypal. Microsofts been up 10 in the last week or so. All coming down today. Martin marietta and volkin all of a sudden theyre done not a lot of big news. But thats interesting infrastructure deal. Another one that hasnt happened yet. Guys, back to you. All right, bob, thank you House Judiciary Committee holding a hearing today examining the dominance of big tech ylan mui with the story in washington yl ylan sara, democrats kicked off that hearing by calling for a top to bottom review of Online Marketplaces representative david cicilline, he is the committees point person on antitrust. He called out google for its dominance in Online Advertising and facebook for its massive user base of nearly 3 billion people he said those are two areas of concern. The sheer dominance in some platforms has resulted in worse products and significantly less choice, leaving people without a competitive alternative to services that harvest their data, manipulate their behavior and monetize their attention this is a bipartisan effort but republicans say they have not agreed to single out any specific company or any specific tech ceo and banking republican doug collins of georgia cautioned that big is not necessarily bad. He said that proposals to break up big tech risk throwing out the baby with the bathwater. Guys, this hearing got a little best a late start. So it is still going on. We will keep watching it and keep you posted. Back over to you you this, ylan. We look forward to further updates. Were also keeping an eye on tesla as the company gets ready for its annual meeting in a couple hours ts time phil lebeau has a preview of what we should be watching phil whenever elon musk talks people listen. Especially at the annual meeting. The three things people are looking for some indication from elon musk about in terms of test las business, lets start first off. Autopilot. Remember he had the Analyst Meeting and he talked about their plans for a million robo taxis next year . What does very to say about that also about the model y and the plans for that vehicle then theres the q2 delivery update will he give us any kind of guidance there remember, the street is expecting tesla to deliver just under 74,000 model 3s. That would be a substantial improvement from the First Quarter as you take a look at shares of tesla. This is a stock, guys, that has rebounded in the last eight days it was trading down in the 178 area now its back up 215 that meeting starts in a couple of hours guys, back to you. Phil, thank you steve, would you buy tesla on this sign of stabilization in the stock . No, i would not its down 35 . And thats notwithstanding the 22 bounce that weve seen off the lows tesla originally was a tech company. They told tuesdays withnt a car company. Didnt get a car valuation and now they want the tech valuation back again its going to start getting a car company valuation. Too much competition i would say sell the we might get your pick of which one to buy later, mr. Grasso a little teaser in the industry a little teaser for the last chance trade, which of course is still a good 40 minutes or so to go we have 55 minutes left trade. Were down. 2 of 1 for each of the major indices. The russell a little further down, half of 1 of course we opened higher so weve lost steam throughout the session. Joining us now joe tanius for more on todays market moves why do you think weve lost steam intraday today i think you have to take a step back and realize that the s p 500 or other risk assets broadly speaking have had a pretty spectacular year. The markets up roughly 15 . And this is happening at a time when Global Economic growth is clearly decelerating and the trade war if anything is intensifying last weeks powerful rally i think was really sparked by the fed. And expectations for what the fed is going to do its important we just teak a step back while this is welcomed we always like to see markets rally like this. We need to keep it all in perspective. So youre cautious . I think were cautious. We look for opportunities into market strength to incrementally take risk off the table. Ask yourself, to the extent this trade war improves, is the fed going to continue along this path of potentially cutting Interest Rates what happens if inflation actually starts to pick up that repricing in the market i think can be painful and we just have to be cognizant of that expect more volatility in the back half of the year. We talked about being 2 from the alltime highs on the s p. What do you need to see to cross that level for me i dont think joe and i are on opposite ends of the spectrum but if you think about it the rate cuts are what caused the market to rally or the prospect for rate cuts caused the market to rally. So now you have the market that has a couple of rate cuts in their back pocket. Chinese trade deal in the back pocket meaning that if it comes out its a positive. Weve already seen most of the negative would you agree with me, joseph, that most of the negativity on the trade war has been priced into the market at this point . I hope it has been. But you never know honestly with this trade negotiation where things are heading i guess i would ask how much more upside is left . After i think tremendous amount of upside because if we both agree that if the fed is were 2 away from record highs. Obviously you have to look at those levels where we were just at so 2722 in the s p cash is where we bounced but that was pre powell coming out in a softer dovish stance. So somewhere midway between where we are now and 2722 is your down side which is better happen what it was just a handful of days or a week ago joseph, with your cautious optimism how are you positioning yourself what sectors broadly we want to be positioned toward the u. S. Consumer i think from a regional perspective we continue to favor the u. S. Not only does it look better infrom an opportunistic standpoint but it provides more defense in what we think is going to be a choppy environment. And with that being said, focusing on consumer discretionary, focusing on technology, but in particular those stocks that stand to benefit from a healthy consumer backdrop what do you think of those picks . It doesnt sound very its not very cautious. Its not very taking risk off the table. But i guess youre looking for spots in the market that make sense. Were looking for spots in the market that make sense but at the same time when we think about risk for the vast majority of our clients its really about thinking exposure to stocks versus exposure to bonds and within the equity exposure where do you want to be leaning . What region of the world there are also various low volatility Equity Strategies you can employ while at the same time keeping some exposure to those sectors lets think about where josephs picks are those are v. Led the market for the last five years. If the market goes up, those sectors will lead the market so its a bet on more positive, more growth, a bullish stance on the market, even though joe is a selfexclaimed cautious in the overall market joe, are you concerned about potential antitrust action against those Big Tech Companies . Absolutely. Its something were always concerned about. I would leave it to our Portfolio Managers and their Due Diligence in being careful with which company specifically theyre looking to get exposure to how about energy . Leading the market dont see that every single day. Could you have scripted a more bullish backdrop for energy you have geopolitical concerns you have venezuela you have russian dirty oil comments coming from there you have everything in the world to be from the bear market. Exactly to be bullish. So if it cant be bullish with that backdrop, in what scenario can it be bullish . The United States is outproducing saudi and russia now on an oil per day basis. That hasnt happened in quite some time. Look for u. S. Production to either maintain or increase. Our foreign dependence on oil is over for all for the nearterm future and i think its in our hands now and opec has lost the power to control the price of oil. So do you want exposure maybe as well to some of the names where the yield as well, that can be travth at the moment or not . You have a real problem the same way i just said josephs picks were technology and discretionary that have led the market for the last five years, energy has done nothing for the last five years. Those large int graitd energy plays. Grant, theres been a lot of plays within the Energy Complex that have rallied. But for everything josephs worrying about and the markets worrying about Slower Growth you dont want to be in energy zblts interesting that Energy Stocks are outperforming today because crude oils flat its a bounce back. Its an overreaction the Energy Complex will trade with the overall commodity so you brought up a great point. I think its more or less a Short Covering rally, maybe people got excited to the up side and are looking for bounces and where the bounces are going to be. The most depressed stocks. Joe, thanks very much for joining us appreciate it. Steve grasso is with us for the full hour. Just to your point on oil, yesterday we saw the market end higher but off the highs of the day and oil started to sell off during the session the same happened today. Oil was higher for most of the session, shoeld off in the last couple of hours and equities have come down with it and were not down significantly, 22 points on the dow, but its had an impact. Slow fade coming up, well have much more on the big tech crackdown when were joined by Silicon Valley congressman rokhanna. Where he thinks raiths regulation is necessary. Well speak with the jpmorgan analyst who sent shares unngoday after he downgraded the stock feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. 45 minutes left of trade dow down about 25 points lets send it to mike santoli for todays market dashboard mike, what are you looking at today . Heres what we have fickle fed forecast. Get to that in a minute. Take a look at the treasury yield at the short end to see what it says about the fed beyond or before beyond meat were going to take a look at some previous hot consumer ipos and how they did turning 29 again not plausible for me but maybe for the market the confidence gap different ceos at different size companies have very different views on things now. Fickle fed forecast. Really going to look at the yield on the twoyear treasury note it has popped up to 1. 93 this is a year to date chart so obviously this yield has collapsed as weve become concerned about the economy, more so about inflation, global growth, and also what the fed 1. 78 last friday to 1. 93 today after we got the Producer Price index today. Nothing alarming but definitely on trend 2 core wholesale price inflation. It suggests that maybe theres room for the market to revise its best guess of what the fed does and when it does it 1. 9 p 2year note and the 1years about 2. 09 i think. It still say were going to get lower than the fed funds rate which is 2 1 4 to 2 1 2. But maybe not much and not that soon im going to be watching this to see how those fed expectations developing as we are in a fed officials blackout window until next weeks meeting, guys. I guess the theme as well for equities both yesterday and today is that generally whether its the short end or the long end we have seen yields rise a little bit and theres still room for them to do so without it spooking equity markets right there is definitely a little best a runway there for yields to continue higher without stocks getting larmd stocks might take comfort with cyclicals leading. However, todays move in treasuries have been minimal just a few basis points on the short end has been the main story. How does the equity market react if the bond market is getting a little too overzealous about rate cuts and the fed doesnt follow through so what is on the chart and what people are looking for is a cut. If they dont get the cut what theyre more importantly, its unanimous that theyre not getting a raise. So as long as you dont get a raise, as long as youre on that side of the boat where you have him in your back pocket, the fed, if you have that rate cut and you have a lot of the governors thinking that way with more dovish comments, more softer money comments, i think thats enough for the overall market to say hey, we have a backstop with the fed. But the twoyear, fiveyear with the inversion that happened there, and mike knows this as well, thats what spooked the market thats what bankers everybody talks about the 210s. The 25s are what bankers are looking for. Maybe even sometimes a threemonth fiveyear. But when you look at the inversion between a 2year and 5year thats whats still weighing on environmentalist confidence mike, would you agree that perhaps because the market doesnt expect the cut to come in the next couple of months that the absence of a hike in those months will be enough to keep the markets supported from the fed perspective . I think the market has to get there. Right now i still think implied in the treasury market, if the fed funds futures is Something Like 70 for july. Thats the very end of july. So thats your window for when those expectations might be modified all right, mike, see you in a few minutes. 42 minutes to go before the close. Take a look at the major averages dow down 29 points weve been negative two times today. Well see what happens in the next 40 minutes or so. Because we were positive really most of the day. Shares of beyond meat are up more than 100 since jpmorgan initiated the stock as overweight last month. But today changing its tune. Stock is reacting. Well talk to the analyst behind the call and later, would you ride in a flying taxi . Uber showing off its futuristic concept today. But when the companys costly moon shots ever actually pay off . Well discuss that coming up. Man stand up if you are a First Generation College student. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent. But it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you, dad man i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Welcome back lets check on the market. Dow down 25 points markets, all the major indices just lower but 0. 1 or so the russell down a little more, 0. 4 we were higher of course earlier in the session but lost steam during the course of todays trade. We have 40 minutes or so left. Lets get to word on the street. Moffett nathanson upgrading facebook to buy from neutral new Revenue Opportunities that could drive longterm growth the companys underlying fundamentals are proving they did downgrade the stock last september. They said the four concerns they had then have all answered themselves one way or another. The stocks up 1. 7 on the news. Lantech equities downgrading wells fargo. The ceo search is headwinds that could lead the bank to underperform its peers during the next 12 to 18 months the call also very much based on the Interest Rate moves weve seen of course wells fargo 90 revenue from the u. S. Or plus 90 and very much focused on Retail Investing and yield curve links and the stock slightly lower. Now to todays call of the day. Beyond meat. So back on may 28 g9 jonk had the most bullish call on the stock, initiating it with an overweight 97 price target. Heres analyst ken goldman on power lunch that day i think the most important thing to look at is the longterm potential. And the most important thing in the longterm potential is how big is this sector, alt meat, whatever we want to call, it plantbased meat going to be beyond meat will get whatever percentage of that it is but when you look at the numbers and how big plantbased dairy has become, it seems clear plantbased meat could be enormous then what happened the stock rallied 113 since the call as of yesterdays close, but that same analyst just downgraded beyond meat today to neutral saying its purely based on valuation, the stock today is down 20 on the call ken goldman joins us now quite a setup. But you must be feeling good about the call after you got a lot of grief for initiating it at such a high price well done thats right. Very good. I may use it or steal that if its okay with you sounds like a good title for your next a rare compliment im actually really happy for ethan brown and team theyve put together a tremendous product they have a great company. Like you said, its really just a valuation call still love the story i just had two beyond sausages for lunch. Im still a big fan of the product myself just a stock at 168s a lot different than a stock at 100. I guess but that was always the question, even when you initiated the 100. People were saying youre nuts the price to sales ratio is just ridiculous when you compare it to any other food stock. So why now is it too expensive when it wasnt then . We want to stay disciplined with our discounted cash flow analysis our dcf said 120, 121ish today is roughly the right number to use. I still believe that the stock when we were looking at this last week was 97, 98 now it went to 168 very simple call for us. Are there other ways to play this theme the clip we just watched about the overall space as a whole are there other ways to play that that havent appreciated as much as beyond meat . There are very different ways to play it there used to be a lot more. We used to have annies as a Public Company we used to have white wave you can still play hain celesti celestial. Thats not a pure play anymore it may eventually when they divest some operations but right now this is the purest way to play this what about the likes of tyson foods that used to have a stake, they sold out are those Companies Going to soo their share price react in a meaningful way or much like David Solomon complaining that his stock doesnt get valued for marcus, is it irrelevant to their share price because its going to be such a small part of the total . I dont think it necessarily is relevant in terms of fundamenta fundamentals in terms of sentiment for the stocks that could be different we could see stocks like tyson arise on the fact theyre starting to sell more of their version of the beyond burger even if its meaning less to the company on a fundamental basis what about all the short sellers in this name a lot of good call right now, good play . I think its a little risky anyone who shorted the stock yesterday is doing pretty well today. I do believe the company will still have better earnings than what the street examines i think its very difficult to short a stock like that and make a lot of money in the long run grasso, for a cult stock once its had its big pullback is the writing on the wall, is it over . No, i dont think its necessarily over to kens point theres a lot of players in the space but theres not a lot of pure players in the space. So when you look at a company like tyson, tyson has an infrastructure already set up. Tyson has a lot of levers to pull in this space it depends on what the next three to six months look like with the competition and how steeped and experienced those competitors are. Lets remember, though, beyond never turned a profit. This is something where i think people already put on their sunglasses and say were not worried about that usually we have tech stocks that dont turn profits that people get worried about. Now we have something that is to your point a cult sector so this is going to be i have no doubt this is going to be a tremendous part of nutrition this is going to be a tremendous part of the food industry. But the problem is once we do a deeper dive theres a lot of preservatives, theres a lot of salt in here im waiting for those arguments that beef is actually more healthy than Something Like this to start raising their head. So i would play it with a diversified play more of a tyson versus a direct play i guess, ken, as we watch this stock did it prove anything when it released earnings and had a positive reception on wall street i think it did, sara. I think they had such a great i shouldnt say great. A good quarter very impressive guidance the tone was very strong with ethan saying they are going to be or they are very conservative with their numbers. I think they ill vaited that they have their act together, that they know what theyre doing, and that they can provide conservative guidance such that people can still buy it and feel good the numbers will still get higher just quickly, ken, how easy is it to replicate what theyve done if tyson foods is not really going to moffett needle on their earnings, what about a new startup thats seen how much this stock has grown, seen your predictions for how big the markets going to be how quickly could someone replicate that if theyve got an amazing i. P. Thats not easy to copy . They have some i. P. I think the true story for them is the r d i think what youre going to see is more iterations in fact, beyond meat just came out with a new iteration or announced the iteration of the beyond burger 2. 0, which is made with a little less pea protein, other ingredients to give it quote unquote marbling thats the r d well see if someone wanted to copy the beyond burger 1. 0 they could but someone could have a Better Burger Going Forward i dont think this is about i. P. But there are many winners in the future bubble or no bubble ill let you guys decide that all else equal, what price target would you go back to buying again around the i feel very comfortable with my 121 price target. Anything below that i feel very comfortable buying with. Ken goldman, thanks very much for joining us beyond meat down 25 on his call lets send it to mike santoli for his Second Market dashboard. Mike, over to you. Playing right off of that going to go back, sort of a walk down memory lane to some other ipos in the consumer space that actually had tremendous debuts in the months after their ipo. First look at krispy kreme donuts from the year 2000 by the way, as the overall market was about to roll over into a bear market this is about a 10 to split adjusted price you went more than doubled in the first few months obviously just about tripled out before the year was up and you see these jagged moves this is what happens and i think the common factor with a beyond meat is its a product that Retail Investors know, they believe that it basically has consumer viral opportunity. This one in particular was a regional concept that was expanding nationally people thought the market was tremendous for krispy kreme. It did not necessarily have a great run all the way through until it was acquired at roughly around i believe the ipo price years later. Then look at gopro more dramatic example, a company thats still public, 2014. So this was the ipo i think was in the 20s this is a big 20 pop oft ipo price. Then it went crazy somewhat similar to beyond meat then you start seeing these jagged legs down obviously the fundamentals didnt really come through longer term for gopro. So im not saying this is where beyond meat is going but any stock like beyond that could be down 40 in a day on a downgrade shows you that underneath that was a real big game of waiting for the next person to show up whos excited about the overall content as opposed to the actual business fundamentals just as a little bit of an example of what can happen when a name gets overheated in its first few months, guys mike, thank you very much for that what happened to Krispy Kremes overall you cant really find them in new york more readily available in Dunkin Donuts is a little more dominant here i grew up with krispy kreme as well i like it. I didnt grow up with it but once i got a taste for it i miss it and they probably had too many stores. They didnt protect the areas for these stores Dunkin Donuts does a much better job and everyone went on a carb diet Dunkin Donuts performed. True. But they have coffee i get it. But krispy kreme probably overfranchised the business and overstored their business and there was too many and they im hearing from one of our producers and donut aficionados that theres a new krispy kreme opening in times square apparently really . Which is great news great news we have 29 minutes left of trade. Things driving the action. Rally fatigue. After six Straight Days of gains, uncertainty over a potential china trade deal and energy one of the leading sectors, oil prices have slipped and are flat at this stage. Time to get a cnbc news update with sue herera hi, sue. Hello,a hello, everyone. Heres whats happening at this hour the pilot who died after crashing his helicopter on torch a new york City Building was not licensed to fly in foul weather. The federal Aviation Administration says Timothy Mccormick lacked the required certificate allowing him to legally fly when visibility was less than three miles. Proponents of an assault weapons ban in florida say they have obtained more than 100,000 signatures on petitions favoring such a law members of the group looking to place a proposed constitutional amendment on the ballot next year and they say the amount should be enough to trigger a state Supreme Court review the Treasury Department announcing it has sanctioned 16 individuals and entities associated with an International Network benefiting the regime of syrian president assad among those being sanctioned, a syrian oligarch accused of profiting by building luxury developments on land stolen from assad opponents. Here at home, new jersey has become the first state in the nation requiring hotels to provide workers with wearable panic buttons which they can press to summon help quickly in an emergency Governor Phil Murphy signed the bill into law today in Atlantic City you are up to date thats the news update guys, back to you. All right, sue. Thank you. Still to come, Mortgage Rates sitting near their lowest levels in a year and a half. Well ask the ceo of Brokerage Firm redfin if thats translating into more home sales. Later Eurasia Groups ian bremer says huawei may not survive this trade war hell be here to tell us why later osg ll onclinbe. Acting white house chief of staff Mick Mulvaney making some comments to our own eamon javers about tariffs. Lets bring in eamon with more thats right. I sat down with mulvaney at the peterson foundations annual fiscal summit here in washington a short time ago i pressed him on the president s claim that its the chinese who are paying the tariffs hes imposed. I asked mulvaney whos actually writing the checks on these tariffs . Heres what he said. Whos writing the checks on these tariffs . Whoever imports them signs the checks so American Companies right the people who are writing those checks are Companies Inside the United States no, no. The charge has always been this is a tax on the american people, that the individual consumers are paying this. Right . Thats always been the challenge, that prices will go up prices have not gone up. Theres no inflation the proof is in the puddle so mulvaney there arguing ultimately, though, that the chinese have more to lose on the tariff front than the United States does even though he acknowledges that its the american importers inside this country who are in fact paying the tariffs despite the president s comments on twitter that the chinese are paying the tariffs. Mulvaney saying it is importers in the United States i also pressed him on the question of whats in that secret deal that the president held up a piece of paper on with mexico earlier today we saw the president saying theres an agreement that might become public at some time in the future mulvaney said that the agreement the president s talking about here may never become public because its a backstop to the larger public agreement. The secret piece says is the consequences for both sides, what happens if they dont abide by the deal. He says if both sides abide by the deal well never see whats in the secret piece of the agreement because that will never be implemented so ultimately that secret agreement could stay a secret for some time to come, guys. Back over to you and eamon, you almost wish its t. Had blown out of his haends and 50ud been able to catch it the photographers zoomed on it and it was backlit by the sun. Theres great work by the photographers. There are some on twitter who have gotten reverse negative images of what was in the president s hand today well, maybe well never find out. But i guess possibly find out in time middle ground. Not the consumer but not the Chinese Companies either stevens giving Online Real Estate Company redfin a double upgrade. Changing its rating to outperform from underperform highlighting opportunities in ecommerce the companys stock is up around 20 so far this year joining us now is redfin Ceo Glenn Kelman thanks so much for joining us, glenn. Hi. I just want to start on that stephens note, actually. Because as weve teased you, weve traded between calling you a brokerage or an ecommerce site and that was central to their upgrade saying originally they felt you were a traditional brokerage, now they do think youre more of an ecommerce company. Where do you think you sit in that kind of definition . Well, were both. Its a Consumer Choice we let people hire a redfin agent to buy a house, but we also let people buy a house off a website. And its really the consumer who chooses. Thats the way it should be. Are you seeing more growth in the website and is that coming at the expense of gross margin well, the demand on our website powers both businesses so even when you hire a redfin agent we use technology to make that agent three times more productive its why we can charge half the price and still have a good gross margin and then for customers who dont need representation from an agent its almost a purely Digital Business that business is much smaller. But its the one that people are most excited about because in almost every country in the world people dont pay a buyers agent and here were giving consumers that choice. So weve seen a big drop in Mortgage Rates on the back of treasury yields in the last few weeks. Blen, how would you characterize the health right now of buying activity in homes across the country . Strong and getting stronger so earlier in the year the market was a b we really had a fairly sharp correction in the back half of 2018 but as soon as rates went down we saw buyers come back. The market was good in the First Quarter. Its even better in the Second Quarter. Im fairly confident about it. The only issue is as rates go down you still have low inventory. And thats going to limit sales. So prices are going to go up sales will not be as strong. Are there any price points or regions you are concerned about . Well, im concerned about all of them at level. But i think californias the one where we have to be the most careful. Its just a state where people have been migrating to that state for decades and now that has reversed people are leaving it has got an affordability crisis way capital a so thats the market we watch most carefully just because prices are on a knifes edge and thats why you see the whole industry so rate sensitive when rates go down, people flood into the market. When they go up they immediately pull back because they dont have the money to absorb the hit. And that just means its going to be a wild ride in real estate a very volatile market i was going to ask about california and in particular the bay area and what youve seen, glenn, if anything as a result of all these hot tech ipos that have paraded onto wall street this year and whether theres been an effect on the Housing Market there well, there certainly has that market has always been crazy. Just because you really cant peg it to income you have to peg it to the stock price of facebook and twitter and google and all the other Tech Companies in Silicon Valley and because there have been so many ipos were just seeing an unprecedented number of bidding wars so 33 offers on a single house last week where we were involved almost all of them were all cash awful them well above the asking price. So it has become intense in San Francisco again. But i do think you have to look at the migration there arent many homes for sale 7 by 7 49 square miles in San Francisco. Theres nowhere for people to go and some of them are leaving as a result so i think the shortterm trend is bidding wars. The longterm trend, less optimistic glenn kelman, thanks for joining us thanks for having me. 18 minutes to go. Love that smile. I know. 18 minutes to go. Heres where we stand in the markets. Dows actually just crossed over to the flat line it was down when we started the hour its now flat. Whos propelling it . Caterpillar, apple, cisco. Biggest winner, utx, disney, and boeing bringing up the rear. Well see where we go. Were positive now s p flat nasdaq, barely up. I mean, were going for six days here, right . On the s p seven days it would be for the dow. Only one basis point still to cover. Come on, we can do it. We can do it during the break which is going to be short and an tde yr stack withoula chcera 15 minutes to go until the close. Steve, last chance trade we should say the last time you gave us one it was match and the stock has done pretty well, up a few percent. Weve had match up, weve had mcdonalds up. And mcdonalds, if you remember, i said buy it above that 200 level because thats been resistance its above that level now. I think you use that as a floor support. Whats now . Incredible. So ford got hammered along with all the other automakers on the mexico tariff scare. And if were hearing correctly that theres going to be no more mexican tariffs, then you have to be buyers of the automakers ford trading down about 10 . Traded up about 7 i think youre good for probably another 2 to 5 from these levels you remember im a fast money trader thats what im looking to make. So if you look at it today, the market rallies even if ford doesnt rally with the overall market i think youre still in safe hands you have a floor below you is it just binary on the trade headlines . Yeah. I think you get beat up. Ford had the least exposure out of the automakers and traded down 10 so it sort of was basically free money. Traded back up 7 . So those that arent a little faint of heart could have grabbed it a couple of percent ago. But i think you have 2 to 5 upside from here steve, great to see you thanks, guys. Steve grasso from Stewart Frankel. Meanwhile the bond market. Rick santellis got that for us. Hi, rick hi, wilf. We had a threeyear note auction. Solid auction. Look at a twoyear chart of threeyear notes you see the way its gradually moving up . Todays close the highest close since may 30th were closing in on two weeks. That indeed pulled the entire curve yields up. Flattening as you see on 10s minus 2s moved from around 25 down to 21. The euro versus the dollar we could look at the dollar index but i think the biggest factor in 50 of valuation is the euro versus dollar the last high in mid march was around 1. 15 plus many traders think thats the area to Pay Attention to wilf, back to you. Thank you very much for that. We have 12 minutes left of trade. Are we going to get the seventh straight day of gains for the dow . Not at the moment. But were covering it. Highs were up 185 points. Lows why wr down about 64 points its been more than 30 days since ubers ipo early investors are having a hard time selling the stock. We will tell you why next. You should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Be go[ laughing ] gone. Woo hoo. Welcome to my house mmm, mmm, mmmmm. Ball. Ball. Ball. Awww, whos a good boy . Its me. Me, me, me. Yuck, thats gross. You got to get that under control. [ dogs howling ] seriously . Embrace the mischief. Say get pets tickets into your x1 voice remote to see it in theaters. Welcome back lets check in on an individual market mover susquehanna upgrading lyft to positive from neutral. Calling it a pure play on u. S. Ride share adding with ubers ipo out of the way nows the time buy the strock. 2 its not a huge upgrade to their fundamentals on lyft just a sort of relative call with uber and gaining 2 sticking with uber, the Company Making the case for its aerial taxi play investors are questioning the path to profitability. Deirdre bosa has the story and leslie picker digging into another problem for uber investors, selling their shares. Aerial taxis ubers ultimate Value Proposition is that it will have a piece of every mile traveled and that includes those in the air. So today the company showing off its latest flying taxi prototype on the outside looks similar to a helicopter on the inside a hightech luxury cabin with automatic doors flying into the snelt. Uber wants to make these aerial taxis commercially available to riders in 2023 thats not that far away and to get there its partnering with some of the biggest names in aviation like nasa, boeing and today they announced another partnership with Jaunt Air Mobility not long ago said that melbourne, australia would be its first uber air pilot city. Of course there are a lot of other things like the economics of it all and regulations. They have to fall in place as well and the question is how much patience do investors have for ubers moon shots as it continues to struggle in Public Markets . Back to you. Deirdre, thanks very much looks cool expensive meantime, leslie picker has more on why early investors are having a hard time selling their stock. Leslie thats right. The option to exercise whats known as the overallotment agreement has expired. That would have allowed a group of preipo investors to sell about a billion dollars worth of stock. The green shoe exists in all ipos in some cases it allows the issuer to raise even more money. In ubers case it was the venture backers that would have cashed out soft banc, benchmark and several uber cofounders were among the many investors looking to sell but underwriters wont typically exercise the greenshoe unless the stock is trading above the ipo price. Ubers stock price wasnt able to do that in the 30day window. Guys up noex were covering all the angles of this market close. Our closing countdown dow down 25 well be right back. You should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back time for the closing countdown were down just three points on the dow. I wonder if we can indeed get positive for the seventh straight session lets trade the close with kevin hincks of td ameritrade. What do you think has moved us intraday from the highs back to the lows and flat . These futures were up all night, wilfred, and then kind of lost their bid right after the open you know, the bonds were heavy all night. I think the markets were strong. And then the ppi number came t out, kind of showed no real inflation, and that made one of the bonds rally back town changed. And this market realized it was tired. Tired is one way to put it, kevin. How else are you guys looking at it in terms of valuation now that weve had this comeback and positioning . I think everyones got to i think the big decisions, were late in earnings season. Right . So those arent going to move the markets. But tomorrows ppi number i think is the biggest data point of the week. I think thats where everyones going to the bond market will move tomorrow. And then well see what that does to stocks i think cpi is one of the bigger data points because of how in focus inflation is right now cpi out tomorrow morning. Kevin hincks, thanks very much lets send it back to mike santoli for the third dashboard of the hour. Mike yes and the s p turning 29 again is it just a coincidence that yesterday and today the s p 500 nosed above the 2900 level and then receded behind it it happens at a time as everyones been saying that were a little bit tired here is where we are and i think the significant piece of it is weve only spent about seven weeks ever above 2900 right here back last summer and of course right here, it suggests theres a little hesitation among buyers to pay up at these levels not the worst thing in the world for the market to go sideways for 16 months but until they break above those highs i think people are going to wonder whether weve seen two or three peaks in the last year and a half lets get up to the nasdaq with bertha im going to turn 29 once again this year and the year after that apple is one of the stocks of the day. Even as we faded here. Apple has held up. Foxconn saying its prepared to move some of its production for apple outside of china thats certainly giving a boost to fears about how tariffs would impact the phone maker but chinese tech today also today rising as well these are really beaten down stocks all of these are very much in bear market territory. Take a look at fang. Despite the fact we have worries about regulatory hearings, about how they might be broken up. Today Moffett Nathanson upgrading facebook and fang overall is higher. Bob, over to you bertha, we just ran out of steam here if you look at the major dow movers, we had big moves up in Companies Like visa recently just ran out of steam. 6 movement a week is a lot to expect for the markets pricey right now metals and mining stocks china announcing its going ohelp with some Infrastructure Spending over there. Mining stocks went up. Finally some of those infrastructure stocks, they were ou on the down side theres the Dow Jones Industrial average break a sixday win streak down 18 points if you are just joining us, a very good afternoon to you welcome to clblt im wilfred frost. And im sara eisen along with mike santoli, senior cnbc markets commentator. We did break the winning streak. The dow ending lower just barely, though. Down 13 points it was as high as 185 earlier today. Looked like we were going to run seven days in a row. Not so much. S p 500 closing flat, which actually masks a lot of strength that we saw in the overall market certain groups, consumer staples, consumer discretionary. Looks like financials even ticking into the dreen just in the last few moments of trade. Russell down a third of a percent. Financials kind of just flat but some of the bigger banks were higher. Citigroup up over a percent. Yesterday we saw yields rise, more of a risk on sentiment. Today they were higher but not across the board and they didnt stay there also oil prices slipped again. Two days in a row. As equity markets came off their highs. Today that meant negative closes but only just, as you say. I would just also point out some strength in the Communication Services stocks today. Especially a name like facebook. Got a little analyst love. Been beaten up so hard between facebook and google and antitrust concerns this has been one of the weaker stocks in the market in the last few weeks helped the nasdaq and helped actually the overall market as well industrials a bottom as well. Later well hear from eurasias ian bremmer. He says were in a geopolitical recession. What that could mean for your money. Well discuss with him joining us, lindsay bell is here, investment strategist at cfra research. Barry knapp, director of research at ironside macro economics. And mike, we turn to you as always a lot of talk about being tired this market. What does that tell you . Sprinting uphill for six day in a row youre going to get tired. I think this is the best way to end the streak i think youd rather miss a streak by a few ticks than make a streak by a few ticks because all of a sudden the streak becomes the story rather than the overall position which is a really nice bounce after a decent little pullback in may. Today had basically the same amount of stocks up and down the new york Stock Exchange. It was basically just kind of an even story to me the interesting part is obviously going to be how we kind of ingest the cpi news tomorrow and look ahead to the fed and decide exactly whats been priced into this market by the way, earnings i mean, they havent really budged we havent really talked about them theyre kind of at a standstill in terms of forecasts simply because of the trade issues. Lets talk about earnings forecasts. Lindsay, whats the biggest swing factor for your forecast on s p 500 earnings for the year ahead . Fed expectations or the latest trade tweets i think for me its the latest trade tweets really because the 25 up from 10 went into effect on may 10th and 90 of the s p 500 had already reported results and guidance. So it hasnt been factored into the numbers and that might not be a huge impact but the things do escalate. We get bad news at the end of the month, the g20 doesnt go as investors have expected, then you could see numbers come down especially in the second half of the year quite sharply what are expectations right now . Right now for the full year were looking for 2. 3 i think q2 is finally looking for a decline of 1. 3 . Thatll probably be fine but its q3 and q4. 7 increase in q38 in q4 we could be talking about another earnings recession we talked about it last time it didnt happen but the numbers i think we should probably wait to talk about it until we get a negative quarter and then we can decide if its going to be two negative quarters because i think flattish earnings is the story. Right . Flattish earnings, how much the markets willing to pay for flattish earnings. Its all about is it just going to be a lull or is it just going to be a rolling over of earnings thats going to last a while thats whats going to matter for the markets as opposed to whether we click for the quarter. Regardless of whats happening on trade youre pleat relaxed about the domestic environment and think that could support gdp all the way. I think thats one of the interesting things that slipped through the cracks over the last couple of weeks. To begin with when you look at the various fed Regional Manufacturing surveys the Capital Spending plan six months forward held up remarkably well in may it had been rebounding in april. Really good sign, capex expectations still look pretty good then yesterdays nfib, or todays actually nfib survey really confirm that both with Capital Spending plans and overall sentiment. Furthermore, the jolt survey showed a big pickup in the turnover of the labor market this is one of my biggest pet peeves for overall finance and how people look at markets we had 75,000 jobs against 153 million job base thats less than five basis points yet if you take the quarterly turnover, the number of people getting a new job every quarter and leaving their job, thats 25 of that labor force. That turnover, and its been picking back up again, is a sign of dynamism, corporate confidence improving thats a big driver of wage growth but not inflationary wage growth actually productivity going up so that improved as well so i was overall you know, when i look at the story in the labor market, the story in business confidence, it looks like were recovering from an inventory destocking cycle that was a consequence of the qt stock market crash, the plunge in retail sales that took place in december. Thats what were covering it looks like domestic demand is pretty good, notwithstanding this trade policy uncertainty. Overall, that looks like probably part of the reason why those earnings estimates dont get cut is companies or analysts just arent getting that guidance from companies that things have gotten any worse and where are we tracking for gdp for q2 under 2 for the quarter. Im saying for the year right but remember, we were at the exact same spot last quarter less than 1 we hadnt got the Second Retail sales number and by the time we got the print everything had changed a lot so fridays retail Sales Numbers probably the big one and then as you start getting a look at june, that will give you a much better picture for where these tracking estimates can be really misleading halfway through the quarter. You want to focus on domestic stocks only . Oh, yeah. Thats been our call for quite some time. We think theres a big secular trend toward much slower global trade. All the countries that have Business Models predicated upon globalization expanding, germany, japan, korea, china, theyre in trouble irrespective of trade wars tlp theres going to be less global trade because companies are going to house manufacturing production where final demand is to the extent they can and that trend has materialized in much slower global trade. I think thats absolutely the way to be positioned through most of this Business Cycle i had that view. Barry and lindsey, were going to hit pause if thats all right. Were going to come back to discuss the markets after the next break but before we go to that pleased to say were going to discuss tech House Democrats began investigative hearings into the dominance of big tech today. Youtube ceo weighed in on tech regulation last night at recodes code conference i think what we have seen is that a lot of times regulation is really well intended. People want to change society for the better but it has all these unintended consequences what i would say is really important is for us to be able to work closely with these different providers, different governments, and be able to explain how can we really implement it in a reasonable way, how to make sure our unintended consequences that they didnt think about. Lets bring in congressman ro khanna, represents californias 17th district, which also includes Silicon Valley. Congressman, good to see you again. Since the last time we talked there have been all these official investigations launched by the doj and the ftc and state attorneys general and the Senate Judiciary committee. What should big tech be bracing for . Well, sara, theres no doubt that tech needs to be held accountable. There needs to be better privacy. There needs to be antitrust enforcement. But it needs to be done in a precise way and not in a way that stifles growth or competition or that is ad hoc. So what i would advise tech to do is get ahead of the curve, to make sure their platforms arent privileging their own products, to make sure they have strong privacy protections, and to show that they really are responding to peoples fears and concerns is this an antitrust issue or is it different . Is it privacy and some of those other terms you mentioned . Well, its both i had i theres a large concern on privacy and what people are going to do with their data. Theres also a concern on antitrust. But i think the relevant example is the microsoft case. And microsoft, the company wasnt broken up but they werent allowed to tie the Internet Explorer to their Windows Platform as a result we saw netscape, google, a lot of competition emerges. Similarly, the Current Companies shouldnt be able to say that their own platforms have an advantage. And as long as they have neutral platforms that embrace competition i think you can solve this issue with smart regulation and enforcement without breaking up the companies. Is there any Movement Toward that on capitol hill i think the process on capitol hill is just beginning but i think there are voice thats say lets do this thoughtfully, lets have wellcrafted regulation, we do need to have oversight, but we need to do it informed about the technology and aware that we dont want china, we dont want alibaba, 10 cent, baidu to become the dominant players. So we want to make sure that america remains innovative and leading growth but doing it responsibly. Congressman, some of the big ceos have changed their tune over the last 12 months. They now welcome regulation and in fact encourage it you interact with them what do you think their motivation to change their tune has been well, wilf, youre absolutely right. Google had an oped calling for well crafted regulation. Chevrolet sandberg has said that at facebook. Tim cook has said that it would make it ease year if there were bright line rules do you remove a doctored video how do you protect a persons freedom of speech versus their privacy rights or their right not to have hate speech . So i think actually having wellcrafted rules by congress may make their life easier secondly, theyre responding to their constituents and their consumers. People want more privacy and they understand that what they want to make sure is that we dont do something rash that squelches competition and invaigs and that were thought nfl how we do these regulations. Do you find yourself conflicted at all now as the cochairman of Bernie Sanders campaign he rails against the top 1 . Thats who were talking about in many ways and hasnt it been exactly super friendly in his language toward big tech well, i call myself a progressive capitalist i think bernie sandters is right that there are communities that have been left out of the technology revolution, a lot of rural america, a lot of communities of color arent participating. And one of the challenges for Silicon Valley is how do we distribute jobs, how do we distribute Economic Opportunity . Every american is a consumer of Technology Everyone gets an amazon package or uses google search. But not everyone has a pathway for economic success so my view and my push has been to get technology to disperse the Economic Opportunity congressman, which of the Big Tech Companies do you think is most ripe for regulation or has to make the most changes to avoid some heavyhanded action from congress . Well, wilfred, i think facebook has to make changes i mean, for example, on instagram i was talking to a friend when i was back home and they said that their daughter was getting creepy friend requests from random people and that person was a techie, it took them ten minutes to be able to figure out the privacy settings to prevent his daughter from getting those requests. Well, facebook needs to make that simpler they need to make sure people can con sentd before their data is being transferred and i say this recognizing that facebook has done a lot of good. Theyve allowed the me too movement to have a voice, the parkland kids to have a voice, black lives matter to have a voice, but they have a lot of work to do to improve Consumer Protection and privacy so facebook refused to take down a viral sort of doctored video of House Speaker nancy pelosi theres a new report in the Washington Post that zuckerberg has tried to be in touch with Speaker Pelosi and shes not calling him back because shes not interested should she be calling him . Sure, she should meet with him. But they should have taken out that doctored video. I reached out to them and i said take down the doctored video i say take down a doctored video of President Trump if theres a doctored video the response, that they just want to diminish it in the news feed, would be as if rns said look, were not going to show the doctored video in primetime, were only going to show it in Early Morning hours. That would be completely unacceptable i think they made a mistake by not taking it out. I think the speaker should meet with them. But they need to take some concrete actions to show that theyre acting in good faith congressman ro khanna, thanks for joining us wilfred and sara, thank you for having me on thank you very much youtube did take it down facebook and twitter, though, said it didnt violate their rules. Theyre having to violate this line between free speech and a safe place for people but also sort of censoring and making sure that tough line to walk. But the congressman, who often wants to defend Silicon Valley, was clear that facebook was the one that was most in the crosshairs lets get a news alert leslie picker has it back at hq for us Pershing Squares bill ackman now coming out against united technologys deal with raytheon. If you recall ackman had been an investor in United Technologies but he urging the company to break apart and streamline its business a bit more. Now ackman sending a letter to the companys Ceo Greg Hayes early sunday morning after the journal reported on the deal this is according to a person familiar with the matter and he said he was concerned about the consummation of this combination between utx and raytheon now, Pershing Square declined to comment on the letter or the companys opposition to this deal but we will continue to report further and let you know what we learned. United technologies reacting slightly to this news, guys. Leslie, thanks very much for that mike, the stock was down some 3 , 4 today its down 7 over the last two days raytheon did poorly today as well yeah, exactly kind of surprising that its up now for the back of this potential block on the deal. Just a little bit. Its an all stock deal merge of equals. Its kind of amazing how much it has traded down this tells you its actually utx buying raytheon. The utx shareholder does not get upset about a deal like this unless its perceived as strategically theyre overpaying for this asset raytheons going down mostly because the currency theyre going to get paid in is the utx this is implicitly going down i dont know that there will be any sway here. Its certainly not something that regulators seem like theyre going to make too much focus on but its interesting ackman who wanted the company to get more streamlined. Is saying this isnt the way to do it. Or raytheon is still ahead on the closing bell, white house economic adviser larry kudlow giving his outlook on growth today despite some less than impressive recent economic reports well delve into his comments coming up. Plus, Eurasia Group ceo ian bremner tells us why huawei may not survive this trade war but to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Who used expedia to book the Vacation Rental which led to the discovery that sometimes a little down time can lift you right up. Expedia. Everything you need to go. Expedia. You guys be good. Illshes gone. Ter. Its a dangerous world. [ screaming ] [ grunting ] woo hoo [ screaming ] pops are your friends gonna die . Pickles dont be so dramatic. But yes probably. There they are. Aww welcome back time for our closing market roundup. Bob pisanis here at the Stock Exchange with a look at todays movers here and Bertha Coombs is standing by at the nasdaq. But bob, lets start with you. We ran out of steam the markets were too pricey. Wed been up 6 the last week. 17 times forward earnings. Thats a lot were pricing in a dovish fed and a china deal again, a lot to deal with for the market you just see this in some of the big movers visa was 156 a week ago. It moves up to 171 or so and you can see it just sort of ran out of steam even though throughout the day it came off of the lows. Caterpillars another one. 120 a week ago, seven days ago, went to 128. And you can see that stock just moved up right at the open was the high print. Then moved down. And again came off the lows there. But ran out of steam eventually. Guys, back to you. That was the theme, bob thanks lets head to the nasdaq for a look at todays biggest movers uptown Bertha Coombs has that for us. The nasdaq composite, the russell 2000, they were lower on the day, but the nasdaq 100, those are the biggest caps, managed to just eke out a sixth day of gains big reason why was apple also up six Straight Days. And with the move weve seen in those six days, 12 , its now positive for the quarter take a look at some of the chip names they also have been up just about six days here its a mixed bag advanced micro was down. That is one of the best performers its off only about 5 from its recent 52week highs compared to a lot of others that are in correction back over to you bertha, thank you very much for that xhgs Economic Council director larry kudlow and Goldman Sachs ceo David Solomon weighing in on the state of the u. S. Economy earlier on cnbc. The u. S. Economys very strong and i wouldnt put much stock in one months jobs numbers i think were in very good shape. And i think were still going to maintain a 3 growth pace this year while the trajectory of growth may have slowed a little bit theres no question the economys still growing. Probably growing around trend. And the fact that were sitting here and the markets now built in an expectation for a couple of rate cuts this year, you know, im not sure how that will play out but certainly if its not going to happen at this point the feds going to have to figure out how to walk the market back from that and that probably wont be good for risk assets if thats where we are. Back with us, lindsey bell and barry knapp. Mike, ill come to you first of all. That David Solomon comment was in response to a question from carl as to whether the market has got ahead of itself for pricing in a rate cut. I mean, clearly solomon thinks thats a fear. Yes as do his economists think there probably wont be a rate cut how would the equity market react if we get to late summer and we havent had one i think you have tofill in the rest of the context. Im on board with the idea the equity market probably doesnt get every single thing on its wish list in terms of china trade deal, reacceleration of the economy, inflations back to trend, stocks are at a record high, and you get a rate cut out of that . Im not sure maybe something one of those things has to fall away. Barry, which one falls away probably the rate cut in fact, i put a note out this morning to that very effect, that the markets way over its skis with thinking were getting multiple rate cuts part of thats or part of that view is i think domestic 2ke78d demand is fine i also think ultimately the economic logic for china to cut a deal with us is so compelling. For example, two nights ago they reported their trade data. People cheered export growth sfablizing a little bit. But normal imports falling 8 1 2 last night they all righted auto sales down 12 1 2 chinas domestic demand is really weak and ultimately they need i. P. Protection for their own innovation they need to deemphasize s. O. E. S. They already had a hard landing in that sector so i think we will get the deal. If we do, you know, were at equity market highs. The fact the fixed income market has overshot the Economic Outlook here is not surprising as ive said a couple of times even on the show that i think the equity market has been a much better leading indicator for Economic Activity than the bond market for two Business Cycles and ive been watching it for like five or so. Giving away my age lindsey, your point earlier is the fed doesnt really impact s p 500 earnings for the year ahead. Right at cfra we do believe theres going to be no rate caught this year the Economic Data is not there it has to get a lot worse than last moss jobs report. And dont forget that the market really isnt an indicator the fed is watching too. At 2 going into todays trading period, 2 off the alltime highs in april, that doesnt indicate an atmosphere where theyre going to want to cut rates. I think theyre going to be data dependent as you expect. The markets really looking to find its footing theres a couple things coming up youve got the fed meeting next week jay powell having another conference call. The markets going to be hanging on to every single word he says. Then you get to g20 at the end of the hon theres no guarantee theres going to be a deal coming out of that the commerce secretary was on cnbc earlier saying hes not so sure youre going to get a deal there either its complicated and structural. Then we get oin earnings season. Theres a lot for us to get through. It seems like, mike, quet is is this fed more marked department dependent or data dependent . I would suggest in december it was data descendent and then it found some religion and it it prefers to be data dependent. But heres the thing thats the common view, right . Powell learned his lesson, doesnt want to tick the market off, look what happened. But what did he learn from december to april . With words you can get the market back. He didnt change policy. He changed words changed the bias he didnt cut the rate my point is you can get it back quickly. You can get the markets favor back relatively im not saying he wants to disappoint. Im not saying theyre not going to cut this summer but they review it as a i heard many talking about this insurance cut, which buys them the opportunity to cut even if the datas okay barry, quick final word i think they clearly are going to change the bias to ease at june and see if they can get away with that but if growth comes through and we get some sort of extension of the deals and no tariff, then we may never get there. And my expectation is well never actually get to that rate cut. And we shouldnt want to get to the rate cut because if we do as lindsey implied, things are significantly worse. Brian knapp, lindsey bell, thank you very much for joining us good to see you both earnings alert. Dave busters. Leslie picker track hag one for us those shares plummeting in after hours trading due to a miss on both the top and bottom line for the companys First Quarter Earnings Results you can see theyre down almost 16 for these results. On the bottom line they missed by about a penny reporting 1. 13 compared with 1. 14 that the street was estimating and on the top line he had reported 364 million for the quarter compared with 372 million that the street was estimating. Now, they also missed on the Comparable Store sales, down ceo Brian Jenkins explaining in the press release today that the Comparable Store sales were about low expectations largely due to the easter shift, which proved unfavorable this year guys leslie, thank you very much for that big slide there. 16 lower. Coming up here next on closing bell, what the confidence gap buneesn small and big siss could mean for the economy and the market this is not a bed. Its a revolution in sleep. The sleep number 360 smart bed now from 899. Senses your movement and automatically adjusts on each side to keep you both comfortable. And snoring . How smart is that . Smarter sleep. So you can come out swinging, maintain your inner focus, and wake up rested and ready for anything. Only at a sleep number store, the queen sleep number 360 c2 smart bed is now only 899. Plus, 0 interest for 48 months on most beds. Only for a limited time. The market closed lower, breaking that winning streak dow down just are 14 points. Lets send it back to mike s santo santoli, final dashboard of the break. The nfib, the National Federation of independent business, the survey on optimism that came out this morning, barry knapp just mentioned, it has rebounded. Its very high this is very small businesses. All domestic, independent businesses this was the trump election bump you had further highs off of that and then this big decline, i get late last year early this year and now a rebound. So its very high on a historical level this goes all the way back to 1986 that tells you domestic conditions look pretty good to these folks. Theyre looking to hire. Business seems okay. Look at the conference boards ceo Confidence Index this is the quarterly number its not perfectly fresh but look at youre basically at lows pretty close to lows for this cycle and this goes back to 1980 this is obviously bigger companies, more global, more exposed to trade, more exposed oglobal growth. This is through april i believe. I cant imagine it got much better in may but it does show you theres a bit of a split here whether youre domestic business, youre probably doing 5. Nfib, its very political. They really, really, really care about taxes and regulation and even whats said about tax and regulation, not necessarily conditions on the ground but it is kind of interesting and it shows you theres room perhaps if you get kind of trade progress for global exposed ceos to get into a better mood and maybe do some spending and investing thank you very much for that. Time for a cnbc news update. Sue hereras got it for us hi, sue. I do indeed hi, wilf former host of comedy centrals the daily show jon stewart delivering fiery emotional testimony to a house judiciary subcommittee today stewart grilling members over the need to reauthorize funding for the 9 11 First Responders compensation fund. Your indifference costs these men and women their most valuable commodity time a lawsuit being filed in philadelphia over the Grenfell Tower fire in london which killed 72 people the lawsuit claims that faulty materials produced by two pennsylvaniabased companies contributed to that blaze. And finally, amazing video of a police chase in central florida. A suspect driving a stolen mail truck led police on a dangerous pursuit, eventually ending in a crash. The suspect was then pulled from the truck along with a lot of packages that were in that truck as well. Youre up to date. Thats the news update this hour, guys i will send it back downtown to you. All right, sue, thanks. Up next, eurasias ian bremmer joins us well get his take on why he were in a geopolitical recession and what that could mean for us. Next on closing bell. What do advisors look for in an etf . I tell clients, etfs can follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Welcome back national Economic Council director larry kudlow and commerce secretary wilbur ross appearing on cnbc earlier today expressing cautious optimism on u. S. China trade talks resuming and the upcoming g20 summit. We were about 90 home on what we thought was a very promising potential deal when the chinese shocked everybody and started pulling back and reneging im hoping, and i think thats what President Trump is suggesting, that in japan at the g20 when he and president xi meet we can pick up where we left off on achieving a really good deal. The g20 is not a place where anyone makes a definitive deal a trade deal is going to be thousands of pages at the g20 the most it will be is a 40,000foot level some sort of agreement on a path forward. Its certainly not going to be a definitive agreement joining us now with his take is ian bremmer, president of the Eurasia Group. I think of you as a g20 expert, guru what do you think is realistic for investors to expect at this coming meeting well, lets be clear. I understand why both secretary ross and larry kudlow are saying what they are. But its a very different perspective from china, which is that xi jinping was absolutely not prepared to come and meet with President Trump until the deal was baked 100 . Didnt want to negotiate didnt want the situation that kim jong un had where they talked in generalities and there is or is not something to sign now, what we just heard on that clip is if they meet at the g20 were not going to have a deal for them to sign that the hope is theyre going to move the ball during the meeting. The chinese dont want that. And it actually implies to me if you put that together with what weve seen from the americans with putting huawei on the restricted entity list over the last week, were actually further from a deal right now than we were a few weeks ago Larry Kudlows absolutely right. We were 90 there. The chinese did walk it back but since then its actually gotten more challenging. So ian, despite that do you think that the effect on the economy has been a little bit less than what people expected so far whether were talking u. S. Economy or chinese economy does this matter as much as people had feared . Again, economists will say its starting to play into the numbers. Certainly, i mean, i dont think youve seen massive impact on pricing in the United States and i do think that trump is going to be much more cautious before he goes after the remaining 325 billion that hes talked about putting additional tariffs on because those are things that americans will feel immediately in things they buy thats clothing. Thats childrens toys right . So i would be surprised if you came out of the g20 and trump said im going for those further tariffs. But again, i dont think were actually very close to a breakthrough deal here and we were actually much closer about a month ago. So explain, ian, how huawei fits into all of this and why you think this Company Might not even survive it might not survive. Right . And its not because the europeans dont want to do business with them but as it stands right now, with huawei on this restricted entity list from the department of commerce, that means that they are not going to be able to source the components that they need to actually roll out software upgrades, to roll out 5g and that means that whether or not you are a partner of huawei youre not going to be able to do functional business with them Going Forward unless the americans back away, unless trump decides actually were find with them, well have a workaround but huawei so far has not shown any inclination to come to a deal to compromise with the americans the way that zte, the China Telecom firm, did over a year ago and trump so far, he has said, well, maybe if theres a deal then i would also include huawei as part of that. But again, were not there yet so as it stands right now, i mean, the russians can say they want to do a 5g deal with the chinese. Lots of other countries can. But you remember, when we pulled out of the Iranian Nuclear deal everyone complained but theyre all now not buying the oil they were from the iranians theyre listening to the americans because u. S. Power through those sanctions actually speaks much more loudly. Ian, youve written recently about a, quote, geopolitical recession. Its quite a sort of headlinegrabbing phrase but how bad is that . Hows it going to manifest you said with china maybe we dont get a deal but the next batch of tariffs is unlikely to be imposed what about other regions, other partners, are things about to get a lot worse . Look, we know about economic recessions, they happen on average every six to seven years since world war ii geopolitical recessions dont happen as often. Its not often when a global order actually unwinds but that is whats happening now. And i think it plays out in the economy and in the market in two ways in principal ways. First is the tail risks become more likely. So whether it is the potential of trade confrontation between the u. S. And europe or japan or mexico or canada or china, whether its conflict with iran, with north korea, even though none of these things by themselves are very likely, theyre much more likely than they would usually be because we dont have the institutional strength, the Global Leadership or the certainty of the geopolitical order the more significant piece for the markets is that we dont have the resilience to respond to crises when they hit. I mean, after the 2008 financial crisis everyone came together, both in the United States domestically, with our allies, with the europeans the whole g20. Right . Was basically saying we need to Work Together to avoid a depression the next time we have a significant crisis, whether its cyberattack against Critical Infrastructure or an emerging market debt crisis or the italians have issues and the europeans need to respond, youre not going to have that resilience you have massively more divisions inside governments themselves much more populism and nationalism backlash the transatlantic relationship is weaker. The chinese are building alternative architecture and the russians want to actually put their thumb farther on those divisions and i think thats the big concern about a geopolitical recession, is that we havent had any International Crisis of scale since this geopolitical recession started. Its unlikely that thats going to continue for much longer, and the response is not what were used to. I mean, ian, you paint a pretty ugly scary picture of the world. And you know, you look at the markets and were sitting like 2 off record highs in the u. S i wonder if according to investors its a world now of winners and losers and relatively speaking the u. S. Is coming out on top. Well, two points to that. First is the United States in a geopolitical recession looks really good. We talk about our border crisis but we dont have the threats from migrants anywhere close to what you experience in south asia, the middle east, or of course europe. You know, we are the Worlds Largest energy producer, the Worlds Largest food producer. Our neighbors canada and mexico and two bodies of water. When the world has more geopolitical crises, the United States feels like a much safer haven, like a much cleaner dirty shirt. So i think thats part of it but the second part is the economy is doing well. Unemployment is low. Wages rupp but im not an economist im a political scientist. And what im telling you is despite the economy doing reasonably well globally and quite well in the United States, all of the geopolitical trends are actually much worse. And even though those tail risks arent very large and if youre concerned about the markets right now, youre more concerned about a u. S. China trade confrontation than just about anything else macro on your plate. So the politics is whats worrying you but i think the biggest concerns are not the ones the markets are going to price in today. Its the response to that next crisis before the 2008 financial crisis the markets were not pricing in the 2008 financial crisis before 9 11 same thing but in the response the response was pretty robust. It was cohesive. Im saying that response is really structurally not plausible in a geopolitical recession. Yeah. And a lot of it was actually formulated at a g20. Which brings us full circle. Ian bremmer. Thank you very much. Of the Eurasia Group one of the most highly tipad chepts make its debut at the code conference well take you there live straight ahead dear tech, dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Are you working for all of us, or just a few of us . Can we build ai without bias . Ai that fights bias . Ai that helps us see the bias in ourselves . We need tech that helps people understand each other. That understands my business. Dear tech, dear tech, dear tech, dear tech, lets champion data rights as human rights. Lets use blockchain to help reduce poverty. Lets develop new solutions with the help of quantum technology. Lets show girls that stem isnt just a boys club. Lets make a difference in peoples lives. Lets do it all. Together. Lets expect more from technology. Lets put smart to work. The flexible class schedules d me tremendously. Allowed me to go to work full time, run my catering business and be a mom and parent. When i reached this accomplishment, it was like, its here, its happening, its now. We at Southern New Hampshire university are the ones who succeed. We are the ones who break through. Welcome back the code conference kicking off in scottsdales arizona this week venture capitalist mary mika taking the stage with her highly anticipated internet Trends Report and our own jon fortt is there with all the highlights. Jon. Well, wilf, i want to focus in on one particular part of this because this things more than 300 pages long. Shes been doing it for years. One of those standout areas that meeker highlighted, delivery and fulfillment companies that are operating outside of the u. S. And are driven by data lots of countries here so okay, in china pinned wardrobe gives manufacturers data on what Consumers Want so those manufacturers can design new products thats doubled users to 443 million in just five quarters. May chuan xanping has doubled to 600 local merchants in two years, similarly working around logistics. In Latin America Rappi is a delivery and errand running platform thats seen orders double to 8 million in just four months tokopedia, trying to solve sameday delivery in indonesia with all the islands you can imagine how hard that is shopee is tackling shopping throughout southeast asia. And in india ji is trying to blend digital and online commerce kind of from a carriers perspective. This is particularly interesting because as you know in the u. S. Amazon is a very strong presence theyre working on oneday delivery and other ways to really get items more quickly to people we see them kind of working in and out of different categories like food delivery across the world there are other players, smaller players that are innovating in ways that are relevant for just those local markets and it is causing explosive growth, guys jon, i wonder if any of those like flip become takeover targets. Thank you very much, jon fortt still ahead leveling up. Gamings biggest show sunder way. Well hear from a top Video Game Company ceo and get his take on the industry, china, and the streaming wars thats next. E3, the video game industrys biggest show is under way right now in los angeles cnbc caught up with the Take Two Interactive ceo earlier and got his take on streaming, china and more josh lipton is here with more. Josh so, sarah, we are here at e3 and i did have a chance to catch up with strauss zelnick. We talked about one theme at the conference this year which is these new video game streaming services, so technology that will allow gamers to stream big, rich, complex games over the internet to their mobile devices. Microsoft, google, reportedly amazon 2 all pursuing this market and zelnick thinks it is a potential, exciting opportunity for the industry if its promoted that its a different experience that allows you to keep consuming games wherever you are, i think that could be incredibly beneficial, so i think well have to adjust expectations from the consumers point of view. Again, this remains to be seen in the fullness of time i am convinced that these services will be great quality. I also did talk to zelnick about china and its a big, important market about take two in the broader industry, theyre approving titles including western ones and the approvals are back up and running and the titles are approved for the playstation 4 console. Josh, thank you very much take two up 7 year to date. Up, in, youralstre wl et look ahead and the key thing. With all that usaa offers why go with anybody else . We know their rates are good, we know that theyre always going to take care of us. It was an instant savings and i should have changed a long time ago. It was funny because when we would call another insurance company, hey would say oh we cant beat usaa were the webber family. Were the tenneys were the hayles, and were usaa members for life. Get your usaa Auto Insurance quote today. Tthis is where i trades. And manage my portfolio. Since i added futures, i have access to the oil markets. And gold markets. Ok. Im plugged into equities. Trade confirmed. And i have Global Access 24 7. Meaning, i can do what i need to do. Then i can focus on what i want to do. Visit your Online Broker today, to learn more. Welcome back now to our wall street look ahead and teslas annual meeting is about to kick off in less than 30 minutes and phil lebeau has that and lululemon and sara will have more on that in just a moment phil, lets start with you what can we expect from tesla . You never know with elon musk, wilf this stock was flying high this was a company towards increasing its production and its been a heck of a year if you look at shares of advertise la and they bounced over the 178 range over the last ten days and this stock is up 35 in the last year and this i what people will be looking for. Does elon musk say anything about deliveries in the Second Quarter . Whats the cadence of deliveries and there is a big surge in the Fourth Quarter we know that the First Quarter was slow relative to expectations and what do we hear about the expectations and that meeting starts in a half an hour and well see if elon musk sees about q2 deliveries. Thank you very much for that and looking ahead to lululemon and saras got a preview of that the always the question with lululemon is can it live up to very High Expectations and this is a stock thats gone up 40 so far this year, way more than the market and here are three things to watch, samestore sales nobody in retail is posting 20 samestore sales growth and this time the expectation is moderated a bit and its up 11. 5 samestore sales and its been a huge growth driver for the company and ceo Calvin Mcdonald has planned to double the business in the next five years and the other biggie is international. The plan there is to Quadruple International sales over five years, guys. There are a lot of Great Expectations and a lot of growth it is a company thats resonating and speaking to its consumer well, however, it really has to keep that up and in a competitive retail environment and competitive yoga and sportswear environment, so far the numbers have been outstanding. I also wonder how it plays and theres been softness in what you would define as luxury its not clear that lulu plays into that necessarily, but 10 plus comps for the entire year and see when they say about guidance sarah, how long before theyve captured the easy growth of mens and the two businesses of the same size its going to be a while its a much smaller portion and the knock against lulu, in the mind, its still a womens brand. Will it speak to men in the same way . Abc pants very popular and showing a lot of growth. Well have those numbers tomorrow at after the bell on closing bell. Ill be covering it. What are you watching tomorrow cpi we get that in the morning again, we are not so fixated on macro news, but i do think its something that matters now because we do need to see inflation stay contained if people want a fed rate cut and if were not and back on trend the question gets reopened, i think, as to what the fed might do its not the defining moment from the fed, but it matters i just want to tell you about a piece of news that were learning about on cnbc economist Carl Feldstein has died and such a sound voice on economics, conservative leaning and never, treatment and had all sorts of views on the fed. Very authoritative. And he ran the bureau of Economic Research for many years. Was a guest recently. Very recently and very sad news our thoughts and prayer goes out to his family and loved ones on that somber note that does it for closing bell. Fast money begins right now. Fast money starts right now live from the nasdaq marketsite overlooking new york citys time square im melissa lee. Your traders on the desk are Karen Finerman and tesla is heating up and were moments away from the companys Shareholder Meeting and well tell you what elon musk says is driving the stock and stocks are within striking distance of alltime highs one top technician says do not start this rally stocks sitting out this rally and nearly 50 of th