Transcripts For CNBC Closing Bell 20170710

Holding in there at 16. Generally speaking, if it was down on last week, its up this week and vice versa. Vice versa, like the weather. Problems with tesla in hong kong meantime, millenials still love the stock. A look at why and well bring you the rest of the millenial musthave stock list as well. Plus, binge analyst dick bove says why hes bearish ahead of earnings kickoff favorite time of the season. I do like the anticipation and once it happens then what happens kind of all right. This right now feels like the exciting one got the Big Bank Earnings and big tech, United Health care is going to report. Well learn a lot in the next ten days. And happy amazon prime day coming up tonight. We start with the Amazon Effect hitting shares of best buy on reports that amazon is developing a geek squad competitor Courtney Reagan just back from italy has details for us. Hi there, bill. Go to see you. Amazon has quietly been building teams of Electronics Experts to offer inhome alexa training and smart home installations in fact, its quietly been rolled out in several markets, and thats jumping all over best buys geek squad turf, and tonight at 9 00 p. M. Amazon kicks off its third annual prime day stealing extra market share from everybody else, all the other online competitors so for 30 hours prime members have access to hundreds of thousands of deals in three more countries than last year for a total of 13 last years prime day was amazons biggest day ever. This year analysts estimate amazon could pull in between 860 million to 1 billion that would be a 35 to 56 increase over 2016 now, while most of the deals are still under wraps, amazon has released pricing for its own devices. Top sellers on last years prime day. Nerd wallets Courtney Jesperson says they have outdone itself with these deals so the amazon echo is 92. 99 50 off regular pricing. 139. 99 on black friday the echo dot 34. 99 that in fact is the lowest price that amazon has ever offered the kindle paper weight will be 89. 99, ten bucks less than what we saw around black friday amazons devices may be the marquee items, but according to ken khoe and the last two fridays amazon shares fell 2. 4 on prime day placement will be key. A former amazon employee, now ceo of boomerang commerce, says that products that come up on the first page of an amazon search capture 90 of purchases, so thats where you want to be those are the ones well be watching tomorrow. Bill and kelly. Thats a great point, not just for prime day but in general. Definitely. Remember how we used to talk about getting the placement on google if you get the box on amazon, if youre on their first page of results, it feels like where Everybody Needs and wants to be. 90 of the market share for that search item will be captured first three items will get somewhere between 60 boston and 70 . How do you get there its sort of one of those chicken and egg games. You have to have a lot of sales. Have to have a lot of reviews, ideally good reviews and make sure that the search terms are full of what customers can see and on back end for the sco searches, a complicated algorithm. Not amazon choosing it but has to do with the better your sales are the higher you are on the search list. I had an idea where are they going to put the geek squad members how about whole foods. That could be a home base who is to say they couldnt car of out a piece of that real estate for Amazon Home Services experts, servicing the electronics or other things that they do. Remember, amazon has Handyman Services and other things, too a much more smaller and fragmented but certainly they need a place to be i think youre on to something. They have a handful of bok locations where they could have hundreds of people come. Thank you, both lets get to our Closing Bell Exchange a pretty narrow day. The douch trading range 75 and its been one of the days for the u. S. Exity market. By the way, dont adjust your set, sarges voice is the way it is rooting for the mets too much this weekend and Rick Santelli is at the cme in chicago so sarge, a quiet day. With volatility last week, a couple big rallies and one big selloff and today the market rests. What do you think is going on here weve got janet yellen and then weve got retail sales, the cpi, business inventories and industrial production. All the events that will happen this week are still in our future today fayettely well work a little hair based on right now youre saying it would come in 24, 25. By the way, the small tech caps are weaker today. We believe informing are where we want to be positioned its a contrarian but we dont see investing in infrastructure as a story about the oil price going into earnings season we think it will be a strong time around financials, particularly the asset managers, so they have been out of favor. We all know the story of technology being a bit played out, and obviously the retail disasters were seeing on our screens today but its a great play. Last week, at least, they have pulled back a by the. Our 2,000 equals have they found eke libbim i this do i these possible they toyed with the r 10s getting close to 60 basis points in boons know, i have, that can make a because its boston going to be the implementation of the start date, draw dawns and that will be key that will be something that mar crow draghi and the ecb pay close attention and react to how the market reacts and mario draghi will have a hard time organizing harder than janet yellen she didnt have all the Interest Rates in the var excountries of southern europes paper to deal with in the process and all the kind of rules that they try to get around that govern exactly the ecb can do n this. For an exhank, bill. You know, i urge traders to watch the euro and dollar yen. The yen is going to be the currency that suffers against both the currency, the dollar and the euro, especially keep an eye on 114. 30, a very important level. I know you mentioned at some the harder hit sectors gm financials, but to ricks point of janet yellen testifying, if youre of the mind she tonight get we appointed. Is it significant that they are trying to get the Balance Sheet down and the bet whats ahead i thenld every single time. Chairman and her team going on during the Obama Administration to be or dovish than it was kehl graph an right noel they have a legacy sitting actually by celebrating that move with Balance Sheet and i think there will be an impact from that. The question is how much the markets are already expecting that that issue of surprise from central bank its been a very long time since they have actually surprised us, and i suspect that well see some of that have in advance of her term potentially coming to an end. You and i usually get a chance to rest im just curious with the retail wreck that continues today the reporting out earlier that the bottom ten of the s p are all Retail Stocks today. Do you see any taunt in that sector yes sure, i started paying well mart last year a few weeks ago i brought it become to rently, looking to peeve up on wall street. All right, very good. I cant receipt to transcript of that interview. Sorry. Appreciate your thoughts on todays market action. Heading to the close with about 40, 50 minutes left in the trading session. They just moved everything up there, including the clock the dow is up 19 points. Teds la h tesla has been losing favor with investors lately but millenials still love the stock. The executive Vice President of trading will tell us which other stocks millenial collins are buying these days. And citigroup predicting oil could hit 60 bucks by the end of the year well debate whether oil has bottomed or whether the supply glut will continue to push prices down. Contact us here on twitter, facebook, email us. So many ways to reacouh t. Youre watching cnbc first in business worldwide. Welcome back we begin with a news alert out of washington. Kayla tausche. Whats the latest . Reporter an offcamera briefing here at the white house started with a white house guest, mark short, the president s director of legislative affairs. He was speaking specifically about the obstruction, to use his word, going on with the stonewalling of various white house nominees, but the questions from reporters centered on the legislative agenda, specifically tax reform and Health Care Reform, and on tax reform specifically he gave a little bit of an earlier time line on that front he said that he expects that the schedule that they are working with, that the white house, senate and the house will have an agreed upon tax reform bill by the august recess we have heard treasury secretary Steve Mnuchin and gary cohn, the white house economic adviser, want a fullblown release of tax reform, a markup of something publicly starting Early September, but it sounds like the white house is expecting to have the tenets of tax reform at least finished by the Time Congress goes out for recess in august of course, that is an extremely ambitious time line, especially given the will hundredpound gorilla in the room right now hand that, of course, being health care. He said on that front he is still confident that that will pass he said he believes the opposition that republican lawmakers were expressing when they were in their home districts over the last week was based on their displeasure for the previous draft of the bill and he said theres been significant changes that have been made that leads him to be confident that this will pass, but, of course, that is the signature optimism coming out of the white house. The real heavy lifting will have to done been Senate Majority leader Mitch Mcconnells team over on hill interesting developments and interesting goal post moving on behalf of the white house with regard to tax reform kelly. By the way, kayla, because it seems hard to process all of this with health care up in the air. Whats the latest in terms of the timing there of any possible bill well, it is moving slowly behind the scenes. Earlier today on cnbc, pennsylvania senator pat toomey said he expected the new bill would come out today he was pretty sure of that, and then when i started speaking to some senior aides around the hill, they said it would be tomorrow at earliest and now im hearing that it will be early this week at best and then Senate Majority whip telling the hill earlier this afternoon hes hoping for something by the end of the week so clearly theres a lot of noise happening it doesnt really seem like anyone outside of the Senate Majority Leaders Office can say for certain exactly when this will be coming out. Kayla and i were emailing about it today several sets of goal posts on Health Care Reform right now. Exactly. Thanks, kayla well see youer. A look at some of the days market movers. Costco shares are trading lower after bmo stock cut the price targets from 160 to 115 and its trading at 151 citing amazons deal for whole food despite costcos strong fundamental outlook and apollo announced it would buy the golf and country club owner for 41 billion, a 21 increase over club corps Closing Price on friday, and today it is up more than 30 . Ever played at club corp . Course . I dont know how prominent. Not sure how prominent it is. Tesla shares continuing to struggle even as elon musk shows off the first Production Model 3. Lets go to phil lebeau. Reporter not too often that you have somebody tweet out a any puck tour of the new model and it sends everybody crazy out on twitter eamon musk tweeted out the first couple of pictures at the model 3 built at the plant in fremont. They complete it had on friday and showed these pictures on saturday over twitter. Remember, the first model 1 deliveries, 30 of them, they will happen on july 28th and then weve talked about it at length they will be ramping up production through 20,000 as a pace of production in december thats how quickly they will be ramping up production this year. Meanwhile, were you look at whats happening with tesla in china which is going to be the largest market eventually for tesla vehicles, and its already one of the bigger markets, they have had no sales in hong kong in the month of april. There were none in hong kong in april. Why . Hong kong was instituting a change they took away a tax credit for electric vehicles, and as a result deliveries for teslas evaporated, but theres a little bit of a back story here in a statement tesla says when the Hong Kong Government reduced the Tax Exemption for electric vehicles and increased the cost of our cars by nearly 100 , its to be expected that demand will be impacted in the period immediately following the change, particularly because of the large number who bought just prior to the change being implemented. How big was the number of people buying right before the end of the ev tax credit in the this chart says it all. Almost 3,000 deliveries in the month of march, so, guys, this headline makes people say, ah, here you go. Nobody is buying in hong kong. Keep in mind in china there are different districts that sometimes will either extend or or end a tax credit for a particular type of vehicle, especially electric vehicles, and when that happens youll see deliveries fall off very quickly or ramp um, and thats what we saw in the case of hong kong as you take a look at shares of tesla, fractionally lower today. Guys, back to you. After having been lower earlier. Very interesting. According to Td Ameritrade the electric carmaker is the fourth most popular stock among millenials to hold, but it doesnt even crack the top ten for the total population of Td Ameritrades clients. Which basically confirms everything that you think you know about teslas investors joining us more is the executive Vice President of the trader group at Td Ameritrade nice to see you again. Welcome back. Thanks for having me. Do the stocks that millenials hold correlate with the top tech brands we finished a lookback in terms of it engagement of our entire client base and then we looked at the millenial segment as well. The main difference is most of them are very interested in technology, but the biggest difference would be the dividendyielding stocks theres three of those in the top ten in the main population and you go to the millenials and they are replaced by the tes las and netflix and amazons which isnt a real surprise when you think about the amount of time that they have to invest and how they want to be a little more aggressive in their stance, whereas in, you know, the general population their duration of investments is a little shorter so they are interested in the income. Exactly, right. So im looking at now specifically june and what your clients bought amd, ford, at t, verizon i mean, they were all over the map here, werent they kind of all over the map. Its been interesting. We actually went back and looked at the last year so we publish this every month. Right the nasdaq stocks, the f. A. N. G. Stocks, have been the market leaders 9 of 12 months. Right. They are trying to hand the torch off and nobody will take it. Yeah. Is it going to be energy, financials financials took it for a month and then they immediately hand it had right back. Telecom certainly not. And if you look at the two biggest days that we h this year, may 17th and june 9th. On those days we had 2. 5 move in the nasdaq. That tells you, you know, what you need to know. Were those selloff days. Well, actually, may 17th was a selloff day. June 9th we started higher it was a friday and then we sold off into the close mainly the nasdaq, and it just drove really big volume. When the nasdaq sells big, do you think people are coming in to buy i think they are taking it as an opportunity to replenish the supplies of the stocks they get these stocks like facebook and apple at levels that they really find attract sniff. The other stocks they bought in june here, tesla, facebook, amazon, apple, exactly what were talking about. How about some of the names that were sold and they include the financials. They include the financials what people are saying they are ahead of the banks all passing, 34 of them passes, and they saw a nice rally and then they rolled right out ofthem. The other two that were sold was whole foods and that was sold because they saw monstrous gains. The profits. And that was sold for not good reasons you know, they are the manufacturers of of cheats that were put in the building there. They sold American Airlines they sold bank of america. Yeah. And they sold bry Bristol Meyers squibb. A little uncertainty with whats going on with the aca, our clients generally speaking, highest number weve had since we started this in imx imx, how engaged are we in the market, the exposure and how confident we are the highest number weve seen. In the last five of the six months they have been pretty aggressive buyers of stock. But not blue apron. We heard that there was millenial interest in snap, but you werent seeing that for blue apron. Snap was really powerful interest the ipo is known to young clients. They bring a lot of younger clients in, and we see it in a number of ways normally we would see 22 of our trades done on a mobile device thats about 100,000 trades a day. They would trade 46 of their trades on a mobile device. Wow. They also trade if i trade snap, 75 of the people who trade snap also trade facebook and they trade twitter, so they all trade the same. Social media. Exactly. Thats how that works. Always good to see you. Thanks for having me. By the way, apron is just a little bit higher today and struggled out of the gate for its ipo. About 4. 5 today. The market is holding on to a small gain and so is the s p 500. Transports lower after hitting an alltime intraday high. The russell is lower and nasdaq up 26. Coming up, well debate whether you should buy the banks ahead of some big earnings later this week. First, shares of Abercrombie Fitch plunging after ending talks to maybe sell the company. Well look at future for that struggling retailer when kelly and i come back. Approaching medicare eligibility . Dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. Shares of Abercrombie Fitch have been plunging today, down 19, almost 20 . The struggling teen retailer announced that its recent effort to sell the business has apparently come to a halt. Discussions began in may when the Company Announced that it was in preliminary talks with several parties. Among some of the interested parties we were told was express and American Eagle outfitters. A pair of retailers, of course, have been hard hit by the decline in mall traffic in the past year. Abercrombie has lost 49 and Urban Outfitters down 38 and American Eagle has dropped 31 and ralph lauren a loss of 23 guess down 22 and gap, the better performer of that bunch down only 5 i have a humble suggestion for abercrombie and fitch. Ditch the millenials and come back to the boomers. You mentioned this before. And i completely agree with you. Forget the apparel they need go back to the abercrombie of 30, 40 years. Wouldnt even have to go that far. Outdoors. The preppie look, you know, that we were so popular for a time. I think bring back you know, my uncle has a massage leather armchair from Abercrombie Fitch, gave my parents gifts a lamp and some sort of trash bin, all sort of very woodsy feeling. There you are. Were good customers. Were not fickle we were loyal. Youre good tippers, too. And more tippers. Thats another story time for a cnbc news update with sue herera hey, sue. Hi, guys. Heres whats happening. Senate Majority Whip John Cornyn hopes a vote will be held next week on a bill to roll back obamacare and a revised Gop Health Care plan could be released later this week thats according to the publication the hill. A massachusetts man accused of killing two engaged doctors pleading not guilty in court today. Hes facing two counts of firstdegree murder, armed robbery, kidnapping and Home Invasion charges. A cyclist in tennessee is hit by a car and the incident is captured on video. Tyler noh and fellow treat leet greg goodman were riding on a parkway in nashville when woodman wearing a gopro captured his friend being hit by a passing vehicle. Luckily noh was not seriously hurt which is amazing in and of itself. And that is one lucky lady 19yearold Rosa Dominguez won two California Lottery jackpots in one week. She won over half a Million Dollars after buying a 5 power five scratchoff ticket and then tried again and won another 100,000 she says she plans on buying a new car. She can buy a lot of new cars thats the news update at this hour we wish her the best kell de, back to you. Im not so sure about that new car, you know. How many times does that come up as peoples biggest money mistake. Be smart. Has 600,000 to play with so there you go. Sue, thank you very much. You got it. See you next hour im here on the floor with peter costa. You feel differently than our guest at the top of the hour who thinks the fed will have a surprise headed this way this year tightening of the Balance Sheet even beyond what weve seen, that kind of thing but youre saying no way, jose. They will stay do havish here. I think they will stay do havish i dont think theres enough empirical data, you like that word, my college degree. An s. A. T. Word. Yeah. The data is just not supporting, you know, two more rate hikes this year. Thats definitely not happening. Even with the jobs report it looked great but you still dont see the Wage Inflation and youre still not seeing any inflation, and you know what, they have unemployment where they want, it even if maybe it will tick down a little bit. But, you know, they are at a very sweet spot right now. If the economy is not growing at 4. 5 or 3. 5 or 4 or whatever they are looking for, why do you want to put the brakes on something thats not happened yet . Me, my feeling is when we do get momentum, which eventually we will the economy will pick up and pick up steam, why would you want to put anything in that way . To me, thats my thought process. How does that fit in . People going to capitol hill and talking to lawmakers and where do you think markets are tilted in terms of the risk coming out of that event . I think the expectation is theres not going to be anything she will be fairly dovish as far as going into this conversation, but i think towards the end of the year they are probably going to do something again, but as far as like a september rate hike, you know, even with the information that we got last week, i think they plight be comfortable with, you know, concentrating on reducing the Balance Sheet which i think is important. Yeah. That will change the dynamic on what we do down here though i do think that you will start seeing a little bit of a of a change you know they are starting to reduce the Balance Sheet and might be flowing a little out of here. Well elaborate on that more later. Thats another financing word for you. Peter, there you go well let you get back to it. Bill . Thanks very much. 28 minutes left in the trading session with the dow up nine points Oil Prices Falling 17 so far this year, so is now the time to bet on a crude comeback . Well hear from both sides of that debate, and wait until you hear who is debating the price of oil these days. And which of the 50 states will take home this years title of best state for business coming up, well give you the first clue ahead of tomorrows huge reveal. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. So thats the idea. What do you think . Hate to play devils advocate but. I kind of feel like its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. We are keeping an eye on snap shares of snap as we head to the close. The social Media Company stock is trading just above its ipo price of 17 a share 17. 04 right now. Pennies away. While slightly positive today, oil prices have been under pressure this year, still down about 17 as stockpiles remain high opec has made a bunch of cuts in the past few months trying to curb the global crude glut but with little effect the World Petroleum conference is up and Steve Sedgwick asked when people will start worrying about oversupply and worry about undersupply. Heres what he had to say. Lack of investment is not big so if that continues for the next couple of years it will be an Inflection Point where what we see today will have an impact on on the consumers at the end and supply will be impacted over i would say over many couple of years. What we need to see is more investment from the various sectors to make sure that there is an adequate supply over the long term. So how do you play the potential energy moves were going to a debate now, and look who is joining us for that. Its zock and block. Today its zock versus block joe zock is our bear and weve got michael block from rino trading partners. Do you think oil is going back to 60 a barrel everything is about time and price in this market and every other market the sentiment has gotten beaten up on crude and Energy Stocks where i live and what it comes down to i think is great opportunity. You want to own quality companies. Ive also gone back and looked at what kind of stocks do really well when crude rallies off of low in sentiment and price in the past three years and always the high beta, the speculative expiration stocks, emp stocks. Those do well. I like a little bit of both, quality and beta and for me it comes down to sentiment and there could be an increase in demand if we get more stimulus, not just from the europe but the world, europe still plus, japan, china. Joe, why are you not convinced . You heard the opec minister casually say it will be two years before the prices reach a level of equilibrium the price right now, the glut in oil is well in place, and opec has not been able to curtail by budgeting down any real price reduction thats reliable, so right now we think its early. Were not in the business of calling the bottom in any commodity, whether gold or oil, but stocks look cheap and if you look at the s p 500 the Energy Sector is at 6 which in my lifetime. In terms of the share of it. Is very, very low so should be attractive for people like toqueville who are contrarian have investors. Who are you looking at the well capitalized Companies Like schlumberger and halliburton and then into Companies Like drill quip. Even if oil is in the 30s they will be able to withstand the pain and see the other side the other companies that you might have seen have already been or worry about have been through Bankruptcy Court in houston and dallas, 24 months ago, when they all went marching in to get credit relief. If oil were to go into the 30s, michael, would that make you abandon the call or just double down on the fact, you know, it would be a temporary move and prices would ultimately move higher . Buying these names, you know, that joe mentioned went bankrupt in the past 20 minutes some have come to market for equity offerings oil comes down this is what we like to call adult swim to use a technical term where its where you have to be very tactical and you cant stop watching it not the longterm value game that joe plays in terms of doing it doesnt work this time you start over i like the quality names he mentioned the integrated oil services, the safe end of the barbell for me and the other end is what i just described to me thats how you play t. Riskreward, sentiment, thats where i am and why i like it. All right you see them only on closing bell here on cnbc zock and block on oil, but i think they agreed. On some of the names, exactly. 20 minutes left in the trading session. The dow is up just 17 points pretty narrow trading day here. And its a case worthy of televisions top detectives. The mystery of lackluster wage growth were on the case. Were going to share what cnbc has found out about this next. The june jobs report saw much more than expected that 222,000 job growth, but the wage growth remained lackluster. Steve liesman pondered this all weekend. He didnt get any sleep and hes combing through the clues to solve this mystery behind weak wage growth and joins us now with his foundings when labor is scarce employers have to pay up to keep their workers and attract new ones but wages are rising 2. 2 year on year, below the 3 to 4 that you might expect with a tight labor market but a look at whose making the most gains in the job market the Unemployment Rate for the least educated americans has fallen sharply in the past six months 1. 3 Percentage Points for those with no High School Diploma and add to that a sharp decline in teen unemployment to a 17year low. Its clear that those with less skill and education are a big part of the new hires, and education, well, it matters a lot for your wage. Less educated and younger workers, they make less than the overall workforce. Your median weekly wage for those with high school degrees, 60 of those with bachelors degrees. In addition, the Unemployment Rate for africanamericans and hispanics also have both dropped sharply in the past six months these two groups, they typically have lower education levels than the white population level and earn less than whites regardless of their education level, according to several studies, so all of that have could be keeping a lid on wage growth so mystery at least partially solved i would say to the extent that lowerskilled and lesseducated and minority workers are the new hires in todays tight job Market Driving down overall wages even while job growth is strong kelly, another lesson from this is stay in school. Yeah, keep learning. Right. Its a lifelong journey. Yes, it is. Thank you, steve. Pleasure. Thank you. Steve liesman. 15 minutes to go until the close. Dow up 16 points the transports have turned lower and the nasdaq is up 4 now, better than half a percent gain but russ sell still down four. Bank starts reporting earnings later this week analyst dick bove tells us why hes bearish after thiquk eak. S ic baby crying fly me to the moon elegant music and let me play bell rings your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Second quarter earnings kick off this week with big banks, citigroup, wells fargo, Jpmorgan Chase all reporting before the bell friday morning. Yeah, and financials have had kind of an upanddown year, still up 8 since january and which banks could emerge as winners and losers this earl season joining us now is manager of Bell Rock Capital and dickbove youre generally a bull here, jacqueline after the runup to the stress test who has room to go . We would look at jpmorgan as well as pnc, and we like the strong Balance Sheets and Solid Capital positions across the banks, especially these two. These two, jacqueline, stand out to you why one is obviously the biggest banks in the country and other is regional. Is this a valuation or capital, too . Valuation is attractive but the capital is attractive. They announced dividend hikes and buybacks especially with jpmorgan and the Dividend Increase with pnc alone was very attractive, so beneath the surface there for both of them, kelly, is really some very strong lending opportunities across the space as well dick, youve been advising people to get out of the bank stocks for a while now what didnt the stress test results change your mind well, first off because the stress test is indicating that the Banking Industry wants to pay out more than 100 of its earnings and dividends think about that if youre going to reduce the capital of a bank at a time when Interest Rates are rising, you are reducing the present value of the business, so why should i go buy a stock thats reducing the present value of its business, reducing its ability to grow its earnings, but theres a whole bunch of negative reasons one is if you take a look at the loan loss provision of the Banking Industry, in 2009 it was 255 billion in 2016 it was 48 billion in other words, on a noncash charge they increased their earnings 207 billion between 2009 and 2016. Guess what they earned for the whole year 171 billion which means they didnt earn any money from operations for the last seven years. Another reason, you know, the overnight rate is up 75 basis points in the last seven months. Corporate treasuries are not taking 115 basis points on their deposits they are getting 8 basis point they ought to be fired how can you take 8 basis points to give a bank money thats going to turn around and lend it at 115 basis points . Okay. Another one, you know, volume sucks in terms of the ability to, you know, show increased growth in loans anywhere. Okay. Jacqueline, what about those points so as a counterpoint we did see some pretty solid loan growth in the first quarter, and that usually tends to mitigate a little in the second quarter, but overall its very robust for a lot of the banks, especially some that we mentioned on the corporate side and then with respect to the rate environment, yes, were seeing slow rate hikes but overall when you go back to the beginning of when the tenyear and twoyear and fed funds started trading, you are looking at 125 basis points right now, but the historical average is closer to five so we have room to keep moving rights higher and also to keep that spread which right now between the 210 is about 97 basis points, and during that entire duration it was 95 basis points, so were still kind of were at the mean and even if we go forward and continue to move rates higher which we should see because were in the at triage mode with respect to the financial space anylonger, we should continue to see a breathing room for the banks because they have been pressed against the wall, both on deposit rates as well as lending rates that we think they will have more room for profitability and more wiggle room for growth on the lending side, both corporate and residential across the board. You know, dick, i often will when people ask me, you know, about investing. Ill say think about how things you think are going to look five years from now, and if things look better than thats the you know, you should be investing at that point. You seem to be suggesting that things arent going to improve for the banks any time soon, or am i wrong about that . No, youre exactly correct. First off, loan volume is not strong in the first quarter. Number two, corporate loan volume is down at the lowest level its been in about five years. In fact, last week Corporate Lending went down, not up. You know, youre not seeing any strength in credit card lending. Its just coming back from very weak performance in the first quarter. Auto lending is very weak. Youre not seeing any strength anywhere other than in commercial real estate which means that youre getting a lot of construction lending, a lot of apartment lending, so thats not looking good number two, the fact that you have historic numbers on Interest Rates which are higher than they are today does not mean that Interest Rates are going to go back to that level any time soon, particularly if the economy is going to get stronger and the thing you can be sure of more than anything else about banking right now is loan losses are going up and they are going up meaningfully so go back to the fact that i mentioned to you that all of the increase in earnings in the Banking Industry has been in a reduction in loan provisions okay. Very good. One of the great water cooler debates these days, what to do with the banks and financials. Jacqueline reeves and dick bove. Thanks very much. Art cashin said the market on close orders showing an imbalance of 450 million to the sell side. How quick they are on the trigger finger with our animation on art cashin. And with that incorporation, the dow is up seven points so weve given up some ground here as we head into the close. The s p holding on to a threepoint gain nasdaq with a little more room up 26. And the closing countdown. After the bell cord cutting which has been hitting video providers hard the one service which has had three name changes and is now poised to be the new king of content. Youre watching cnbc, first in business worldwide upbeat dance music dance music abruptly stopping dance music starting then stopping upbeat dance music bell ringing into the last two minutes of trade we go for this monday, and let me just highlight a couple of investments weve been watching recently that have been moving big let me start with wti crude. Its been down sharply lately. Its down 17 year to date, but today a minor little comeback. Well see. Is the this is it searching for a bottom who knows. The tenyear bund, the german tenyear has been going up sharply, and today a minor pullback were at 54 basis points it the hit 57 late last week has it peaked . Who knows. Im not trying to pick a top or a bottom right here. The dow not much of a movement today. A trading range of about 75 points, so pretty quiet to begin this week. Were watching snap very carefully. It did briefly touch and now its below its below its ipo price now at 16. 97 so well see what impact that has here as we go into the close and into the next day, and seema mody is with me here the retailers have been struggling we highlighted earlier the ten worst performers in the s p 500 are all Retail Stocks today you know, bill, whats striking to mesa clear but subtle shift away from the macro and on to the micro, this as earnings season kicks off. The health of the consume everyone the big topic of discussion here on the trading floor. Just take a look at some of the consumer staple stocks, walmart under pressure hormell trading up and this after pepsi is expected to report results tomorrow. That stock up 10 year to date. Crazy. Thanks, seema, very much. Going out with just a fourpoint gain on the industrial average as we head into the closing bell here stay tuned now for the second hour of closing bell with kelly evans and company. Ill see you tomorrow, kell. Thank you, bill welcome to closing bell, everybody. Im kell deevans heres how were finishing the day on wall street to kick off the week as we begin the second half of the year the dow with a gain of just four points it looks like it may not even have held that as you see it on the screen want you to see how exactly it shakes out roughly 21,412 meanwhile the nasdaq comfortably in the gain with a gain to 6176 and the s p 500 looks like it closed higher to 2427, and the russell 2000s were struggling all session today, down about half of 1 , closing at 1408, and as we just mentioned snap falling below its 17 ipo price for the first time theres the chart down 1 . That means it also looks like its going to close below its ipo price for the first time indicative not just for company obviously, but as we continue to watch the ipo pipeline for the rest of the year meantime, major newspapers are teaming up to take on the likes of google and facebook coming up, how this digital duopoly is impacting how you get your news and what it means for publishers bottom lines joining me on the panel today to talk about all of this, cnbcs Senior Market contributor Michael Santoli and the former fees advisor and everybody on set. Guys, thanks so much for coming down here. Michael, a lot going hon here today. Let me ask about snap closing below its ipo price. How important is that . Psychologically not great its also well below its high print. Thats the thing to keep in mine not as if its been hang around the price. Traded up above 24 at some point so not much sponsorship here for the company on a fundamental basis. I dont think the first Earnings Report gave anybody an extra reason but i do think its also indicative of this market. The Market Growth investors are going to the consensus acknowledged winners they are not really necessarily sprinkling in and around to the upandcomers, and thats reflected in the fact that snap broke below the ipo price and interestingly also the price at which a strategic investor bought stock which is comcast. Oh, right our parent comcan, by the way. You dont think snap can be one of the Great Technology platforms of the future which everybody seems to be investing and the facebooks and the googles. Yeah. And, you know, the f. A. N. G. Names. Even throw a tesla. Theres a chance, i think that they could. What im saying the names you gave about facebook and google are the ones already need. The nasdaq 100 was up twothirds of 1 in a market that was doing nothing, flat and pausing. The correlation between the dow and the s p lately has not even been that high. A lot of Different Things going on the journal is highlighting that, a lot of heavy financial ms. The price weighting and the s p with Bigtech Companies and they are moving alongside the way that trade whats the past tense of shooken out lately kevin, what are you watching in the market im watching earnings coming into the financials, thats very, very important, because if youre a bull in the financial sector, you really want to start to see the loan book stocks growing. Theres two reasons you want to go long financials now after this big uplift with the optimism of deregulation and obviously optimism that the economy is coming along. If the economy is coming along show me the loans, number one. Number two is the other driver would be bigger spreads which isnt happening, so now youve got a real bearbull debate going on on these financials jpmorgan leads the pack. Lets see what they can do. Yeah. I would be very cautious. This is not a sector that i think is going to lead the pack as people think. I imagine, mr. Jeffries, youre quite bushel on the prospects for all the financials, right . I mean, i think the deregulation story as were you talking about is the number one story. Its a creeper, its behind the scenes every cabinet official that our president has put in the place is a pretty probusiness individual, and i think it a tailwind is really driving things. Since you brought this up point, this isalso the major thing driving the markets right now. Health care, dont know whats going to happen there. Tax reform, dont know whats going to happen. Fast forward to the august recess, if nothing is done, what does that do to the snarkt. I think the market really isnt expecting much fiscal policywise or legislationwise. The good news about the regulation trade it doesnt require any votes in legislation. You just have guys running the show that are pro business, and they are in charge of the interior department, in charge of the Commerce Department and Labor Department and that real thats what youre saying, michael . Big, big tailwind that people arent processing properly. The market is taking this view, well, we dont expect much, not going to look to price a lot of specific stuff in on tax and health care and if anything changes incrementally it will be more positive for business than negative it. I think that that all works fine as long as we dont get to a point later in the year or maybe early next year when says thunder bay that was an interim growth spurt in europe and maybe well have to worry about how much well have to rely on this 2 u. S. Economy to get the Global Growth story and keep it intact. Fair point. Both the Senate Health care bill and tax reform dominating headlines out of washington. Youre Kayla Tausche has the latest and some highlights for us, too. Kayla . Reporter earlier this everyone at an offcamera briefing we heard from the white house director of legislative affairs shark short and specifically made some head links on the white houses economic agenda, specifically with tax reform and a bit of an earlier time line that weve been expecting hes planning for the white house, the house representatives and the senate to have a plan, quote, unquote, agreed upon bill by the time they break for the august recess. We heard the line in the sand was an Early September public release of the administrations tax reform plan but this is certainly a bit earlier than perhaps people expected to see drips or drabs or tenets of that have plan being agreed upon. Of course the market will take this with a big grain of salt. Youll remember the president back in march when the house Health Care Bill was scrapped for a vote first time around he said were not going to do health reform, well do tax reform pointing as that one thing they are committed to doing so the market will need to see exactly what this looks like this time around on Health Care Reform, thats expected to be something that needs to happen before tax reform, although there is this talk of a potential plan b and exactly what that would look like to. That end, short, the director of legislative affairs said the senate bill currently being discussed is still the preferable path for the white house. He is confident in its passage later this month he said there have been significant enough changes to the point that gop lawmakers who had previously opposed it will likely be on board now, we havent heard from the Senate Majority leader whether in fact he believes that is the case, but certainly the white house is led to believe that that is the case he said if theres a bipartisan effort whereby they repeal first and then they work with democrats to get something done later on he said that would have to come after repeal because republicans are committed to repealing the Affordable Care act, and Sarah Huckabee sanders, the deputy press secretary, said that the president is making a list for potential consequences for republican lawmakers who vote against this she says shes not aware of a penalty list or penalty box, so to speak at this point, but, of course, we have seen in past attemptses of this situation that the president is taking is very seriously when lawmakers have spoken out against it optimism coming out of the white house again as we all await the significant policy items coming forward. Guys kayla, thank you. Kayla tausche at the white house with the latest. Michael, you said markets arent counting on a lot of this happening. If everything does show move president its a bullish sign . Yeah, probably so i think youll have a line of sight towards actually Corporation Tax reductions no defining what reform means. No defining what a plan means before the august recess again, the market is kind of willing to have it be this kind of hazy thing on horizon. Right. To something thats on moy list of things that has to happen. Let me ask you something more specific kevin, curious of what youre making of all of this. These were some of the worst performing stocks in the s p 500 half they have been hammered and amazon prime day kicks off in a couple of hours if you have prime or you use alexa what do you do with the sector the sector has to go through a change over the next couple of years. Take an Abercrombie Fitch where probably 30 of the locations are no longer profitable and it has to redefine itself. Everybody has an idea of what the blond means to older people because it was very successful back in the old days and then they went after the millenial trade which is a disaster for them so what happens is they cut 40 of the stores. They find people to take over those leases or in some cases sell them and then focus on what might work again i can guarantee you this there will be a lot of angst on the retail stories and reits and in the end it will be a change of manage president , and i think they are getting to the point where they are starting to look interesting to me as a value buyer. Okay. Its not finished yet but whats happened with the tonality around amazon is killing some really good names, too. The costco thing is amazing to me they have had fantastic cash flow they have been slaughtered, not ready to buy yet but really on my radar screen. The bondholders, going to ask you to show the hat. Well wait, well wait. Next time im on. You want to show it all. Talking about costco bondholders here, holders of any that will take too long, do it another time. The tenyear yield bottomed at around 1. 3 last career and went up to 11. 2 and has come down a little bit since then is this it final resting place i dont think theres a lot of room for nominal yield to go higher they are going higher and the fed is in play and janet yellen and her team want to know. To be an ecogeek, real rates have returned on capital and fed rate are going higher. The regulation trade is quite deflationary youve got real and youve gossip flakes. The real is going up and inflation is actually going down so youll have that tussle in nominal. The good news is High Pressure rates are positive for the dollar and on expectations regarding the return on the economy and really positive for sentiments on growth. How would you translate any of that, michael i wonder if at some point real rates going up also pinched market valuations. Good. Good you get head winds that a stronger doll aerocan be like that. We call it a supply side in economics. Youre moving the growth out and i think the market has a goldilocks we had one last week that was really stuff pretty soft to me because the growth data is okay and you get a number in cpi but it is working, its a reverse al of the regulation trade a very positive supply tied story. Have to be careful were the fed. The this they can go but six month well have a new fed chair. And theres talk that janet yellen wont be reappointed . Trump will probably leave her alone. Ill Say Something about the two or threeyear handle on the tenyear if we dont break through in the next six months this will be the sixth head fake on the tenyear move and be verybad for the ive now lived through this on moves look at all the optimism coming in and all of a sawed can breaks down again and it will its just not happening. Final word, michael the target can be there probably have to hit it a couple quarters in a row. One quick thing on retail trade. At least one thing in favor of the bulls on sentiment there was a new of etfs for brick and mortar that maybe is running are out that recall i dont think you have any central arteryik buyers coming in and putting in a floor, especially with it may be primetime for Amazon Prime Video every day up next how the rise of the etailer service could put pay tv in the rear view mirror and the pressure at some of americas biggest newspapers a clash of whats at stake for investors with newspapers and digital ad platforms contact us on the show via twitter, facebook. Digital ad platforms hey youve gotta see this. Cmon. No. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Welcome back lets send it over to courtney rage abe for a Earnings Report. Shares of buyer calleda are lower after reporting 18 cents, what experts were expecting. Shares are lower by about 5. 7 the operating margins and the deferred revenue did come up a little bit disappointing the active number of subscribers, however, did increase by 17 to 335,000 Barracuda Networks is a Security Technology firm. Courtney, back over to you. Thank you meantime, amazons prime day kicks off in less than five hours. Morgan brennan is outside amazons headquarters in seattle with a look at the logistical legwork it takes to pull this one off. Morgan reporter hey, kelly, thats right. Just hours to go until the start of prime day we got a look at the newest part of amazons growing shipping network. This is prime air, so for the first time amazons fleet of boeing 767s will beoused to help move the millions of prime shipments that will need to reach consumers within 48 hours of purchase, and there are currently 24 planes in operation. Thats going to grow to 40 something by the middle of next year they are operated by at as world wie and amazon is investing in a cincinnati cargo hub and all of of this to reign in ballooning shipping costs, the tractor trailers, container shipping, automated warehouses and eventually drones, but dave clark, amazons head of world wide operations, says contrary to speculation amazon is not looking to directly compete against ups, fedex and other carriers that it currently relies upon. We have longterm contracts with most of those partners, and i think those things are still going well our Delivery Networks are all about supplementing the capacity and allowing us to do more innovation and we feel good about our current arrangements so thats the plan, at least for now. No comment, either on the long term police, that that will be in operation and for now the next several days will prove to be a key delivery test thats branded white and plus which could shut down the shipping packages for many of these that go crosscountry. There was a point where uniirwas looking to build out a fedex rival, too seems like more of these companies are realizing that transportation infrastructure, the word im looking for, is so important to being able to get to peoples front door it feels like that makes fedex and ups more relevant than ever, right . I think it most definitely does, and i think if you look at Companies Likeups and fed yiks ten years ago, 15 years remembersus now. The entire Business Model has upended. Ecommerce shipments grow by double digits year an year youve seen more and more need for capacity, and that need of capacity is outpacing how quickly these companies can build out the infrastructure to cater to the demand. So that is the point that amazon is trying to make. At least right now,ing is that they are building out their own capacity to supplement above and beyond what they are utilizing from ups, fedex, the Postal Service and some of these other carriers the ecommerce numbers are absolutely incredible and its really a doubleedged sword. Weve seen more. Switching gears to talk about amazons prime video warning stars estimating the number of prime tv household is catching up to the number of cable tv households. Joining us is dan concernious from personmark company. If amazon can activate all the households, then suddenly it has a huge massive video subscriber. Isnt this a threat to cable tv or not i dont really think so people forget that amazon initially had prime video as a supplement to the prime offering, you know i think that its still really hard tore argue that people are taking prime primarily for the video offering rather than taking it for the shipping benefit. Its certainly because they have that bundle together makes it more competitive and as a result they will certainly surface over time but the content offering is still way far beyond its a content aggregator but not competor. What does it is mean for amazon and its okay attractive elements into prime they areler that does it and where do you think it will head with what prime over time will include. The way i think about it is amazon is increasingly owning the Customer Relationship so we can debate on how much amazon prime customers are signing up for the free video content and how much they are signing up for getting an increasing amount of merchandise on a flow twoday basis. Amazon is securing the relationship with the customer its not unusual that over time amazon through prime, the customer could pay for a lot of Different Things youre doing today. Think of your Insurance Payment and your wireless payment and things of that nature so i think whats important here is amon is increasingly building the relationship with the consumer it starts with free twoday shipping on merchandise and extends it to video content and really it could go anywhere, i think. Michael, i want to flip this back on you for a second whats the right way to look about this each with the reports of amazon dying up with dish is the point content and thats part of you know, package for the consumer once it has several familiar lip members buying prime they can sift through the network as they look. When people arent doing the traditional pay tv thing, if they so desire to be the onestop aggregator of the virtual bundle they are the obvious player, whether it means dish, spectrum, you know, whatever it means, so i think its not just along the entertainment lines, but its reflective of how amazon can kind of leverage those Customer Relationships. Done, along the line could you expect amazon to say in the serious movie niche and the apple has lost in its mochi is just incredible over the last couple of years, having semifinal of the market to have something far less they have entertainment and the live series. Do they aggregate overthetop content . They have streaming Live Football right now i want to go back to some. Points made here you think about amazon as as general aggregator in the space, live is costly i mean, cbs is doing deals with hulu now, 3 going to 4. I mean, those deals cost a lot of money amazon is willing to sell out that money its a Customer Relationship look at health fix how much are make . And everybody thinks they can produce the next great original series hit rates are less than 10 so i think the content providers are still winners in this scenario and the linear guys still have a place because its just another distribution model and they are all tied together through affiliate agreements its really ball keeping the ecosystem though i do agree amazon will be able to sell, you know, other services through that Customer Relationship. Tom, what would you add to that i would add to it that amazon has two deep profit pools that you it can be used to invest in content and second our thirdparty sale to amazon, the last source of thursday night football, new content, i think theres a lot of volume to that just beyond a large number of goods to ship to them on a twoday basis. Gentlemen, thank you. Appreciate you joining us. Thank you michael, to this point, i went back to rode all the amazon shareholder letters from the 1st through the pent he lays it out in black and white. Youre steeped in the bezos scripture. Nobody would actually defly or doubt anything that thats been sid here. The only question is does it have trillion dollar market val value. Our scott cohn is back on the odpp an details on the new ale pruct. Another stop on our wild ride is coming right up theres nothing more important than your health. So if youre on medicare or will be soon, you may want more than parts a and b heres why. Medicare only covers about 80 of your part b medical expenses. The rest is up to you. You might want to consider an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Like any Medicare Supplement insurance plan, these help pick up some of what medicare doesnt pay. And, these plans let you choose any doctor or hospital that accepts medicare patients. You could stay with the doctor or specialist you trust. Or go with someone new. Youre not stuck in a network. Because there arent any. So dont wait. Call now to request your free decision guide and find the aarp Medicare Supplement plan that works for you. Theres a range to choose from, depending on your needs and your budget. Rates are competitive. And theyre the only plans of their kind endorsed by aarp. Like any of these types of plans, they let you apply whenever you want. Theres no enrollment window. No waiting to apply. So call now. Remember, Medicare Supplement plans help cover some of what medicare doesnt pay. Youll be able to choose any doctor or hospital that accepts medicare patients. Whether youre on medicare now or turning 65 soon, its a good time to get your ducks in a row. Duck quack call to request your free decision guide now. Because the time to think about tomorrow is today. Today the Trump Administration is possibly undoing the obama clampdown on tax inversions, when a company like burger king changes its domicile to lower its tax bill what happens if they do reverse course a couple of companies and plenty of companies will be looking at this. There was a little bit of criticism about the obama measure in the sense of it being overly restrictive, not just people up and moving overseas, but theres also, of course, plenty of irony here because the president got elected in part by decrying the regulatory setup that incentivized companies from moving overseas. Two separate things. Feels like the signal coming out of treasury is go for it, they will go for it and that will undermine revenues even more. If you look at health care, a lot of deals that want to get done but didnt. Well be looking that closely. The journals lock at outlook to Department Store cosmetic counters no kidding everybody is fighting for every inch if youre in a war to get people to come into your stores, mikeal, you can afford to offer a lovely wellstaffed fullcost cosmetics department. The idea they could preserve the pocket of premium price within the Department Store format, theres nothing like the same traffic flows and all the rest of it how many times have we spoken about alta and the other kind of category killers in this area. How could they be growing so fast in the slow growth environment. They are taking tremendous share from the Department Store channels. Not completely an amazon story. Its not helping and not helping general store traffic and making Companies Like alta benefit even more than that. A 4 percentage Department Store decline. John gruber says the new iphone could cost 1,200 or more how much stock do you place in his report, first of all, and how many people will pony up for in no real reason to doubt this in terms of initial pricing. Make taking about shortage of components so its a limited supply situation the list price is less than it used to be because it has the installment plan a lot of people will buy them based on the upgrade the installment and the carrier is offering not so much a subsidized phone but one you pay for over time. Your point is interesting and i saw that, too, and they are doing it because they are worried about making enough. Exactly. Credit cards. Com reveals who are the best and worst tippers okay you ready for this, everybody. The best are men, republicans, northeastern, baby boomers and people who play with plastic in general, but women, by the way, with better tippers of hairstylist, buena vistas and Hotel Housekeepers. Interesting breakdown. Im not sure im not that surprised in the overall who tips better. Look at the psychology of tipping, people think it has to do with people want to have the illusion of control and power in a situation, so maybe oh, come on, what happened to generosity also generosity. Also a feelgod issue because also interesting women tend to folks hairstylists and buena vistas why because youre going to see them again youll have a relationship with them though the Hotel Housekeeper thing is weird. People doing a lot of traveling these days. Somebody you never really cross paths with typically. All right time for a cnbc news update with sue herera who is a very good tipper. I am, and my husband always leaves something for housekeeping anyway, more than you needed to know heres whats happening at this hour huge celebrations in baghdad after the Prime Minister declared victory over the Islamic State in mosul iraqis danced, waved flags and others took to the streets in convoys of motorcycles and cars. It took nine months of fighting for iraq to defeat isesins mosul. Here hat home, the Confederate Flag is flying once again on the South Carolina statehouse grounds all it be briefly. A group upset over the removal of the flag two years ago is responsible for the temporary flag and pole. It will fly for several hours annually on the anniversary of its removal which was back in 2015 commuters who take the train into new york city are bracing for whats being called the summer of hell workers starting Major Repairs at penn station, the countrys busiest train station. Some 600,000 people pass through it each day. And in celebration of the summer of hell and National Pina Colada day, a new york city restaurant unveiling the largest pina colada ever made, holding over 140 gallons of liquor they are giving it away free to patrons and offering it to lirr railroader, the Long Island Railroad and the new Jersey Transit and amtrak riders, and i think they probably will need it though it seems to be going pretty good so far reports are its smoother. Glad they are giving those away ink ive had a pina colada. Delicious. All right. I dont know. Girl, weve got a date. Im going to introduce you to pina coladas. You got it, sue im telling you, send me an email well see you later. A rough day for investors in snap seema mody has more from the floor of the exchange here as they close below their ipo price. Certainly a story that got more attention towards the end of the day snap closing below its ipo price of 17 a share, down about 6 though over the past one month they are having some concerns over snaps lockup period approaching late they are month which will allow insiders to sell their shares. Jpmorgan in may was pointing out that an day digital 1. 2 billion snap shares will become available for sale by the end of july, and just keep in mind facebook, twister, linkedin fell ahead of their lockup expirations according to mkm partners snap down about 30 from its full first day of trading and what also prompted selling was snaps first quarterly Earnings Report as a Public Company on may 10th when it posted a 515 million loss last year keep in mind also about onethird of wall street analysts have a buy or overrate rating like that giving some data and analysts trying to assess snaps Growth Strategy here kell they closed down just a penny, just enough for all the headlines. Seema, thank you. Virtual reality being dealt another blow the latest details on facebooks oculus division and the long tim survival of journalism is at stake and calling on a government for permission to create advertising as on facebook and google. All that straight ahead. Yeah, well it was 30 before my fees, like the pizzaordering fee and the dogsitting fee. And the rummage through your closet fee. Who is she, verizon . Are those my heels . Yeah yeah, were the same size. In shoes. With tmobile taxes and fees are already included, so you get four lines of unlimited for just 40 bucks each. The price we say is the price you pay. So we know how to cover almost almoanything. Hing even a swing set standoff. And we covered it, july first, twentyfifteen. Talk to farmers. We know a thing or two because weve seen a thing or two. We are farmers. Bumpadum, bumbumbumbum today the News Media Alliance is calling on congress to allow news publications to negotiate collectively with google and facebook about advertising. The alliance represents around 2,000 new organizations and claims the dominance of the digital duopoly is vacuuming up online ad revenue and giving rise to fake news. For more lets bring in dan kennedy, associate professor of journalism at northeastern and the ceo of crowd tap here with us at post nine. Welcome, guys. Dan, let me begin with you to see a move like this, basically they are asking congress to exempt them from antitrust issues so they can all get together how necessary is a move like this well, if the if the newspaper industry wants to have these kinds of conversations with google and facebook, then they do need to make sure that they are not running afoul of antitrust laws i mean, each one of these are separate companies, and if they act in a collective manner, then they could be in fact seen as running afoul of the law, and they certainly dont want to do that matt, what about you . I mean, would you would you take issue with the fact that facebook and google have effectively become an official duopoly with their control of online information they have become a digital duopoly but in terms of Advertising Market its 20 which means 80 of a market the Newspaper Media companies can still partner with the newspaper Companies Still generate around 150 billion in revenue counting circulation revenue versus the 100 billion for facebook and google so i find it interesting they are coming together and they have 50 more revenues. The lower margin, but they have had and still have some time to catch up dont see Companies Like vice or buzzfeed complaining because very early they understood the shift happening. In a lot of ways they only have themselves to blame and need to look at their Business Model and not come together and fight really what Consumers Want which is an open social platform. Dan, i guess i would wonder, trying to think of a analogy whether its studios going up against the Movie Theater business which is kind of tightly controlled, or in the old days if, you know, if one or two companies controlled every newsstand in the country, would these companies have been able to collectively negotiate here do you actually think theres a prospect given all the politics running both the Big Tech Companies and media businesses in washington that they will at least get clearance to at least make this effort in. Well, that would require a predictions and predictions are fraught with all kinds of problems a couple of things would i note about the finances of this is that advertising revenue for America Newspapers has dropped from about 50 billion a year to under 20 billion a year over the last decade or so. Wow. But more than that, the digital share of that advertising revenue has been stuck at about 3 billion a year since 2007 so it really isnt going any, and i i think that there was a time when the newspaper business hoped that simply by driving traffic to their websites they would be able to put ads on the site and that would monetize their content, but it really hasnt worked out because in the Digital Space advertising is such a commodity its so ubiquitous that it really isnt particularly valuable, especially for news organizations that have to employ a lot of journalists in order to provide the information that we need in a democratic society. That is a paradox, matt, which is why if the ad space is so valuable, at least once was, arguably still is in the physical newspaper, once you get online, at least with the journal have you to be an authenticated user to access most of the content. Sure why cant that be equally valued i think a lot of traditional Media Companies have an embraced advertising model which is jax posing a paid sponsor message versus the content Consumers Want to see. Advertising isnt what brands want to see. They want content, things that consumers seek out which is why you see the newage untraditional companies. So youre saying the only way is for the journal to start running articles with Little Things that say sponsored posts about why this ipo is going to be the hottest thing. They are doing it and creating branded content rooms its blurring the lines. I would also question the traditional way in terms of huge staffs that newspapers have. Do they really need it does each newspaper need their own photographer when its crowdsourced you can go on twitter and find that image so they need to blow up the entire model. Dan, well give you the final point since hes raised some good ones. Quickly. The fact is since the election in particular weve seen kind of a flight to quality, and i think that what people want from newspapers, and i say newspapers for the most part, they are going online to consume the news,ing is that they want a branded identity they want some guaranty of quality and dont want crowdsourced news and thats what a lot of people fear is leading them to fake news. I like that, flight to quality. Everybody come join me in the landch print subscriptions, feels good, get good information like that. Matt, youre like forget it. Matt burton and dan kennedy, thanks for joining us today. Thank you very much. See if Congress Allows this. The oculus rift is on summer sale why facebook, speaking of facebook, knocked 200 bucks off the price of the Virtual Reality head set. And its cnbcs countdown for top states for business and scott cohn is already in the mystery top state. Are you still on a bike, scott hes got wine. Oh, hi. Were in americas top state for business, and in a moment we will give you or first diabolical hint of the state that we will reveal right around this time tomorrow, and after we give you that hint i gt stoatae some of the local wine stay with us , what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. It is that time again. Cnbc is ranking americas top states for business and our scott cohn is live in the mystery state with how the rankings work, scott, and youll give us the First Official hint. Reporter thats right, kelly. Do i have to make a bit of a confession going into this every u. S. State has at least one vinyard, so i guess that was kind of unfair but, hey, its a good place to be where else to be as we count down the states. We will be counting them down all day long tomorrow with the big reveal right here on closing bell at about 4 30 eastern time we have fun with it, but there is a serious study that goes behind all of this heres how we do what we do. Our exclusive study holds the states to their own standards. We measure workforce, quality, availability, righttowork laws, infrastructure, air and water, roads and rails who has the lowest cost of doing business the strongest and most diverse economy . Where can you find the best quality of life . The most technology and innovation we look at education, kindergarten through college and beyond business friendliness, the legal and regulatory structure we measure access to capital and cost of living 2,500 total points, and the state with the most is americas top state for business it is our 11th year, and its gotten to be a tradition that as we count down to the top state where i am we give you diabolical hints, and i have to give you a tip going in, that in order to guess these diabolical hints you have to try and think like me. That is a scary thought. Anyway, the first diabolical hint is wideopen spaces wideopen spaces we want to hear your guesses use the market t use the topstates on social media the med odd allergy at topstates. Cnbc. Com and tomorrow after we reveal where i am 50 ss kelly . Well, of course, i have to give a quick guess, i was going to say georgia, little home state bias im going to say tennessee after the clue what are you going to say, mike . Wide open spaces doesnt actually apply here, i would say washington state. Oh. Just i say birch trees earlier when scott did an earlier wine, washington. Scott, are we right can you tell us, please . Reporter no, i cant ill tell you tomorrow youll both be there tomorrow. Youll find out tomorrow be patient. Going to be hard to top scott, thank you so much looks lovely wherever you are. We look forward to finding out scott is somewhere in this country. Meantime, oculus is putting a Virtual Reality headset on sale will the 399 price point now be enough to entice buyers . That is next. Coming up on fast money one of wall streets biggest bulls got even more bullish. Hell tell you how high stocks could go tonight at 5 00 so we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Welcome back the oculus is on sale again. Lets get to jewulia boorstin w has the late slatest another facebook is cutting the price tag for it once again. Lowering the price for the headset, touch motion controllers and games thrown in to 399. That lower price is just for six weeks. Now, this price for that headset controller bundle for this price cut was already a 200 discount. Now, this latest cut brings oculus into the same rage as sonys playstation vr, which has sold over 1 million units. For that, you need a playstation 4 console, which has sold 6 60 million units. Oculus wont reveal how many units have sold but one thing that might be holding it back, to use the headset, you need to buy a compatible pc, those start at 650, of course, far more than a ps4 oculus explains, the reason for this latest promotion by saying its the best time for consumers to jump into v. R. Because there are now more than 500 v. R. Titles available up from just 30 titles when the headset launched a year and a half ago but v. R. Has really failed to take off as many had hoped Research Firm saying after years of hype and announcements that the firm sees no growth in the last 12 months in either awareness of v. R. Or in consumer interest in using v. R. So, kelly, certainly an area to watch. Yeah, julia, thank you. Michael, i thcink its true, it nichey, has a lot to do in gaming right now the potentials are huge. Give me the actual image people are talking about on Conference Calls anymore. Obviously trying to move beyond the early adaptor, becoming somewhat of a mass Market Product i think it was very telling that basically the advantage held by the installed base of video game consoles hard to get around. I think a. R. Is the new v. R listen to tim cook saying im so excited about these opportunities. Look at the pokemon go, one of the Top Grossing Games this summer, a year after it was first launched thats where all the excitement is you can use your existing iphone to do that. With your exist devices, youre kind of getting a taste of what it could be. Also nobody out there thinks were at the terminal point of how good this is going to get. How inexpensive its going to get. Its tough to get people to pony up. You think, ill wait ten years. Or two. And ill watch steph curry in realtime. Warren Buffetts Berkshire hallway could be in a battle over an Energy Company up nt, tt mpyceisexhacoans o going to weigh in. baby crying fly me to the moon elegant music and let me play bell rings welcome back a bidding war could be looming between Berkshire Hathaway and elliot management over Energy Company, oncor mad moneys jim cramer spoke to that companys ceo about that battle take a listen. We know elliot well, theyre great folks, the largest credit tor. Right. At this point, its conce conceptu conceptual whats in front of us is buffett. The Berkshire Hathaway deal would be great for this company. I dont know enough about elliott yet. Catch jims full interview with that ceo tonight on mad money beginning at 6 00 p. M michael, this one, i love this i love everything about this its a great setup. First of all, i think theyre great people theyre our largest creditor is kind of something that goes along together, you take it with a grain of salt. Also a test of that kind of buffett discount so to speak, hes the privileged buyer. Everyone wants to sell to him. Im not surprised, if buffett is on one side, youre on other, you dont want to be. Do you want to be the one paying much more history of the company, the bankruptcy wooe were out of time please, everybody, join us tomorrow that does it for closing bell. Fast money starts now. Live from the Nasdaq Market site im scott wapner in for melissa lee. Tonight, on fast one of the big est bulls on wall street getting more bullish tony dwyer just raised his s p target for the next two years. Hell explain what has him so excited. Plus, is tesla about to ge its groove back . The chart master who called for the pullback now says its time to buy and after you see his charts, you might be buying, too. And later, blue apron making a comeba