Transcripts For CNBC Closing Bell 20240713

Bloomberg. You mentioned housing and todays gdp data when you look at that, do you believe that you have achieved a soft landing or are achieving a soft landing in the sense that removing to trend growth the rest of the year and next year that is our outlook overall, is for moderate growth of around 2 , pretty close to trend. Thats our outlook could be better. Could be worse you know, you never say youve achieved it. But thats our outlook we feel like our current stance of policy is appropriate as long as that remains broadly our outloo outlook. Donna borak with cnn. Chair powell, setting aside expectations for todays rate cut, obviously 97 sort of expected this would happen today, can you tell us more about the rationale behind moving at this particular meeting as opposed to waiting six weeks and cutting in december and if there was any discussion about that around the table . Thanks. Yeah. I think this seems to be the right movement you can see we had our usual range of prospects, range of views but in the end we had a strong vote in this action i strongly believe its the right action i strongly believe that the alcohols weve taken over the course of this year have been the right things for this economy and will continue to support growth and will do so in the future. Thank you, greg raub from market watch chairman powell it seems the differences all across the country, that different regions are reacting differently to the china trade and some regions are much weaker than others. Theres this urban versus rural divide, the coast versus the middle of the country. How does that factor into your decisions . You know, with Monetary Policy its famously a blunt instrument so, obviously, we cant raise Interest Rates some place and lower them other places, but were very conscious the first thing to know is to understand that and we called that out, as im sure you know in one of our recent Monetary Policy reports to congress, the sort of rural urban disparities in employment, growth and all kinds of things, Health Outcomes its a big and growing difference, set of differences we dont really have, you know, the tools to address that. We call things out that are important to our economy that we may not be that we may not have the right tools to best address them we call them out because were spending all of our time with the economy. Those are issues that maybe have to be addressed by legislatures and at the National Level and at the state level. Could i follow up quickly sorry. So are you asking congress to do something now, or will you ask them to do something down the road im not asking congress to do anything right now i sometimes have noted that it would be appropriate put it this way. We do what we do, which were assigned a job, which is maximum employment and stable prices we do Financial Stability. We do bank regulation. The u. S. Economy faces significant longer term challenges around potential growth, around labor force participation, around disparities of income and wealth, around all kinds of things and those are issues for congress theyre not issues for us. If you really want the u. S. Economy to be all it can be and raise the potential growth rate in the United States, you need proper Monetary Policy but really it isnt Monetary Policy really its fiscal policy that supports inclusive growth. Specifically the prospects for phase one agreement with china, give the ups and downs of the trade dispute, several truces and tentative deals have fallen through, are you concerned about developing Monetary Policy . Thats not how i would characterize it. I noted there might be progress there toward away from bad outcomes it seems like theres the makings of a possible settlement there. What the ultimate result will be but i would say that the tail risk of nonnegotiated no deal brexit seems to have decreased just as i would say that the situation in our trade negotiations with china seems to have taken it a step closer to resolution thats all im saying. If it doesnt work out then will we be back at Monetary Policy that thats one factor among many, many factors that factor into our assessment of the outlook. And if we see if we if things happen that cause us to materially reassess the outlook, change our assessment of the outlook in a material way, then we would act accordingly. The fed has pointed out many times in the past the rising inequality over the past decades and how that could be a factor behind sluggish growth in light of the recent outcome of the strike at General Motors, do you see the union having a role to play, helping to raise or lower middle incomes and promoting more shared growth in the long run so not for us to say what the appropriate labor arrangements will be. I will just say on the General Motors strike, its likely to have taken away a couple of tenths of growth this quarter. Thats likely to come back maybe over the first half of next year i think its good to see it settled but im not going to comment on what the appropriate labor arrangements are thats a little bit far afield from our task here thank you. Thank you, chairman wondering if you would categorize the current stance of Monetary Policy as accommodative or if its just that neutral was lower than we thought this time last year. Secondly, you know, were now two years removed from the tax cuts and jobs act and the economy is growing at about the same pace as it was about, 2 . So given your mention of fiscal policy and the role it plays in longterm growth, is it fair to say that the tax cuts and jobs act worked the way it was supposed to . Thanks. Say again what your first question was. If you lock at where the federal funds raised trading, it should be the middle to lower half of the range from 150 to 175. That means the real rate is probably modestly below zero i think my own sense would be that thats somewhat accommodative policy i would say, though, that theres a range of plausible estimates of what the neutral rate of interest is. And i think many of those who make such estimates have moved their estimate down over the course of many years and that process continues. Nonetheless that seems to me to be very likely to be an accommodative stance in policy and appropriate stance, given the situation were in with continue i continuing Downside Risks and that i mentioned. Hi, gene young from market news i wanted to ask about Financial Stability risks. Recently the imf and some other global policymakers have been expressing concerns over the high level of debt so as rates get lower in the u. S. And around the world, are you more worried about Financial Stability to risk to yield we monitor Financial Stability risks all the time its what we do sns the financial crisis, as i mentioned before currently we dont see large imbalances this long expansion is notable for the lack of large financial imbalances, like the ones weve seen, certainly before the crisis happened. We have a fourpart framework. Ill quickly mention the first is leverage in the financial system, low by historical standards. The second is funding risk, risk of runable funding and that risk is also quite low for banks but also for the nonbanking Financial Sector if you look at asset prices, we see some high asset prices but not broadly across a range we dont see bubbles and that kind of thing. And that leaves the fourth, which is leverage in the nonFinancial Sector, and thats households and businesses. With households, again, we dont see leverage we see them actually getting in very good shape financially in the aggregate. Plenty of households are not in great shape financially. That leaves businesses, which is where the issue has been leverage among corporations and other forms of business, private businesses, is historically high weve been monetarying it carefully and taking appropriate steps. So thats what i would say but its corporate debt is one part of a larger part of our framework. And it is something that were paying quite a bit of attention to and its been part of the last couple of shared National Credit exams and weve been monitoring it carefully and taking appropriate action. Hi, Nancy Marshall again, sir, with marketplace. Have the problems in the repo market led you to whether the liquidity and Capital Requirements for banks are too high is that something that the fed might review i think, again, the most important basic thing is to get the level of reserves back up so that reserves move up and down with some volatility we dont want them to move below the level they were at in the beginning of september, which is, again, between 1. 45 and 1. 5 trillion thats the main thing. Thats the first thing were on a path to do that between our temporary open Market Operations and also our bill purchases in addition to that in addition to that, were looking at there its a big, complicated marketplace. And one of the surprises, as i mentioned, was that banks that had told us that their lowest comfortable level of reserves was here, they were well above that yet they didnt deploy that liquidity when there seemed to be great opportunities to do that that didnt happen why is that . Intraday liquidity which used to be a common thing. Used to be a common thing for banks to have intraday liquidity, daylight overdrafts also there are a few things that make liquidity which is ample in the financial system. Thank you very much, chairman powell given this sustained level of low inflation even in this country, do you think there seems to be a higher possibility that lower Inflation Expectation will remain going forward. Do you think a japanlike situation object japanification of krovengly low inflation and Interest Rates in the u. S. Is getting trumped by the japanification of this situation . Do you think so . So we, of course, have watched the situation in japan and now the situation in europe, and we note that there are significant disinflationary pressures around the world we dont think were exempt from those. Of course, if you look at our current inflation performance, it hasnt been anything like what weve seen in those other places, but we dont think again, we dont think were exempt from those pressures and we are, therefore, strongly committed to having Inflation Expectations anchored at the level that is consistent with a symmetric 2 projective. Thats what were committed to we take the risk very seriously. The risk isnt that inflation might run a couple tenths below 2 the risk is that what weve seen is other economies getting on a disinflationary path and its very hard for them to get off. Once inflation moves down, you have less Interest Rates move down as well because theres an inflation component in Interest Rates, and, you know, we think the right thing to do is to do what we can now to hold and really move Inflation Expectations up so theyre squarely and firmly anchored at a level thats consistent with 2 inflation. Hi. Yahoo finance another type of Balance Sheet question but not necessarily focused on the repo crunch theres discussion before that that maybe we should move rather that the fed should move to a neutral Balance Sheet, mortgagebacked securities and maybe replace them with shorter term treasuries. I havent really heard an update on the composure, the composition of the Balance Sheet for now. Im just wondering if the fed is actively thinking about that right now and, if so, when you might expect to hear something on that. Its an issue but its not an issue that were currently working on or reaching a decision or anything like that its a big one and its one well return to over time but not imminently. Chairman powell, this morning the president tweeted were seeing the greatest economy in American History i just wondered as the chair of Americas Central Bank what you made of that. Im going to maintain my longterm practice of not commenting on anything any elected official would say thank you. Thank you very much. Chair powell wrapping up his press conference, 25 basis point rate cut lets check in on the Market Reaction we are at session highs, as we speak, with the s p 500 set for another record alltime closing high if things close where we stand, up. 3 . Russell still lags lets have a look at the dollar index, which sort of plays out rather nicely, the effect of market interpretation of what the chair was saying there initially, the dollar spiked on the expectation that we wouldnt be having more rate cuts when the chair said, quote, risks to the outlook are moving in a positive direction we then saw the dollar move back again at the point when he was asked whether or not we would reverse rate kus if trade and overseas tensions clear up he implied that rate hikes wouldnt that saw the dollar fall and took equities to session highs. Similar situation to gold, too. Inverse move happening there it fell, session low, 1483, lowest level that, too, has turned higher, as well, as the dollar has moved lower. Here along with our mega fed panel. Joining us today is david eservos, jeff mcculley, sarah, diana amoa and, of course, Cnbcs Rick Santelli we have a big two hours little less than two hours now straight ahead for you rick, your thoughts first. Similar moves in the treasury market as well the twoyear actually turned positive on the day. Now were seeing rates fall again. What has been or how would you characterize the reaction in the bond market to the fed and to fed chair powell today it was a liquidation move i think so was the dollar. Consider this. Weve had a boatload of curves steepening since the last meeting. If youre looking for a curve steepener, youre long twoyear and short tenyear the walk back on the rate cut makes it so you are now selling your two years and youre going to be buying your ten years, which exactly explains why the twoyear shot up to 167, why the tenyear shot down maybe they didnt do it at the same time but anybody, you can ask paul there, who has been at many trading desks, traders like to lay out some of their spreads, maybe they can time it just right the dollar, if you thought there may be more of a dovish tone, of cour course, the dollar would be lower. The dollar did move up i think that was your liquidation trade. The markets are getting their gps back tomorrow morning, which side of 16 or 17 basis points, tens to twos lie on will give us a good clue about the next set of moves moving forward. Josh, in terms of the s p 500 at the moment will be a record alltime closing high. Was the theme there from the fed chair that hes not going to be the one to derail that rally at least . Yeah. I think its interesting that today looks like its going to go out pretty much how the whole year has gone. Ru russell 2000 is slightly down. Nasdaq is ahead of s p, which itself is ahead of the dow this just falls in line with the trends weve been living with now for almost 11 months so not much has changed. The most interesting thing that people are taking from powells remarks and the statement was almost word for word, with the september statement. Its just this idea that it is still a midcycle adjustment, if you will, in the last couple of decades. Weve seen this before 1998 was notable there was a financial crisis around the world we did what we had to do here. Couple of rate cuts and they left things alone for a while. Same thing earlier in the 90s when greenspan shocked everyone with a rate hike and took it back two years later if thats what this is and powell is to be taken at face value talking about there really is no rush there arent any inflationary pressures that would have us undo this, thats exactly what the market wants and thats what he delivered i think thats in line of what were seeing. Steve liesman is able to join us now, asking questions there in the room to the fed chair ive seen your tweets, hawkish on one side and dovish on the other. I dont think its balanced that way, though i initially thought that the chairman had talked way more hawkishly not way more but a bit more hawkishly than was in the statement. The statement said he would assess and he said no, were pretty much on hold here the interesting thing came later, wilf. He said the only reason we would raise rates is significant height in inflation. That means the effort to normalize rates is over. Theres no more effort in that to put it in the words of one strategist or fixed income person ive been talking to, theres now a oneway bed on rates. Its either going to stay the same or go down. Its almost like the chairman, in his comments, have removed the possibility of Interest Rate hikes in almost any scenario last year we raised Interest Rates not because of inflation, but because we were normalizing. We just lost the moon, as tom hanks said, on inflation so, yes, he was a little bit hawkish for rates not going down but massively dovish in the possibility that they wont be going up. Paul, i see youre reacting to steves comments right there. If this marks the end of normalization, does that mean that the bar has just gotten even higher for future cuts . I think i agree with steve, first and foremost. I think he nailed it exactly and it was a midcycle adjustment because they overshot neutral. The most interesting thing to me in the shortterm basis is chair powell said he thinks theyre a little bit below neutral right now. Theyre accommodative, which i think is solidifying the notion that neutral is effectively the policy rate equaling the inflation rate or zero real. But the point that steve was making, i think, is the real home run here, is that its a oneway bet until inflation is above 2 and materially above 2 hes not going to ease any more. When youre looking at it as a Portfolio Manager you think in terms of the distribution of risk theres no risk in the foreseeable future of hikes and theres risk on the downside if he does a material reassessment of the outlook i think that chair powell did a fantastic job of saying were in a good place and were going to stay in a good place unless we do a material reassessment of the outlook. So, effectively saying were not looking at noise stop looking at noise yourself. Diana, whats your take as to what comes next, based on what he said there . I would have liked to have seen a little bit more emphasis on data dependency what we got was an emphasis on trade talks, brexit, things that are very fluid and can turn around on a dime as weve seen several times this year. Removing the possibility of further cuts in the near term is actually a fairly dangerous place for the fed to be. Last year the market thought the fed the economy is not looking that robust ism manufacturing starting to turn over. The pace of job gains has been slowing down considerably. Durable goods are slowing down, implying that the manufacturing structure is far from over fed should have been emphasizing more that the market data still drives i think what they did today was sold that optionality by focusing on trade and brexit. Whats your take, david, as to whether or not well ever see a reversal of the rate cuts weve seen, even if trade is sorted, if Global Growth is sorted i think he laid it out. Its really an inflation story steve is right, once he said that, i think he sort of took this idea that we could be raising rates or unwinding some of this midcycle adjustment for brexit reasons or for reasons related to International Trade you know, you came into this meeting with people thinking there was going to be a hawkish cut. That was sort of a bit of a worry on how hawkish he would be and whether there would be a mistake in being a little too hawkish. And the initial shot of taking out the act appropriately language probably got people on edge thats why we saw the dollar rally up a little bit and the s p not rally very much. I think it went down for a little while once he sort of started talking and telling ou, hey, this inflation problem say big deal and we havent hit it for a long time in terms of our 2 target and we have to materially be above it to start to think about raising rates at any point in time as steve said its kind of a oneway deal here. Either were going to get cuts because things slow down and the inflation continues to disappoint or were going to sit here and grind it out a little bit as we watch the International Issues resolve themselves. So, the stocks equity markets continue to move higher here the dow is up 110 points, s p is at 3047. Sarah blumraskin, what was your takeaway i think chairman powell did a terrific job at the press conference it was, as others have said, quite consistent with what was in the statement at the same time, you see in his tone hes ending a chapter, right . This was, in fact, a midcycle correction while he is, indeed, like leaning heavily on the deflationary risk story, at the same time you sense that we have kind of ended the chapter here, the chapter that was started earlier in the year with with the rate cut and i think that thats what we hear and at the same time, again, he does lean heavily on the inflation side and he emphasizes that this idea of raising Interest Rates seems to be something that is a very low probability. David, what do you make of the fact that last month only one person wanted 50 basis points of cuts from where we were then, whereas this month almost everyone came around to agree there was a need for 25 basis points more . Do you feel like the fed chair is uniting People Better behind him and getting them to move in a direction he wants yeah. I think theres something to that i wouldnt you know, wilf, i wouldnt read too much into it they really wanted to send a were settled message i think he deliver aid were settled message. One important point we didnt talk about it yet. Ill be interested to hear what paul has to say about it we discussed this at the last discussion we had, at the last meeting on the air the framework change, there was a lot of risk. People were thinking that the framework might change as early as q1 of next year, which would be a very, very dovish thing it would probably mean that rates would have to go lower and qe might have to raise because the fed will look back and make up for past inflation mistakes he told us specifically they would be continuing with this assessment at least through the middle of the year so, we cannot expect a framework change in, i think, at any point in time in 2020. It will probably be after the election and i do think thats really to do with the election, because i dont think you want to go through a big fed framework change and the implications that might have on Monetary Policy in an Election Year that would create too Many Political divides on the committee. We did learn something pretty important even if it does seem that the market so far is not creating a lot of action out of this meeting. Paul mcculley i think he gave us a big part of the framework review already. Dave and i already talked about this he said were not thinking about increasing rates until were materially above 2 , he told you the anchor of the new framework. Theyll be talking about a lot of ways to get inflation up to 2 and have an average at 2 over time. But david and i agree and disagree at the same time. I think its going to be a long process to get to a new framework, but i think he gave us the nugget right now when he told us that the new framework is going to be no tightening when were south of our target, period, full stock, over and thats going to be the anchor there are lots of other things in the framework review, but thats the core nugget today. I think whats significant is that there arent any asset allocators or Portfolio Managers coming away from this, saying that theyre going to do anything differently there was nothing in here that would dissuade people from the most popular trades of the year, reits being the biggest example, real estate being one of the bigger performers in the s p nobody is walking way from that in light of what they heard hear. Hold on, Dennis Muilenburg is leaving the hearing. I think her comments are genuine and heartfelt. I respect them as i told her, were committed to safety going forward. Thats my focus. I know its your focus. You know there are people who believe that your words today ring hollow. What do you say to them . Well, phil, you know, i understand theres a lot of challenges, a lot of opinions. You know, theres a lot of sorrow around these accidents. And its important that we respond to those, that we take responsibility for it. And i know its hard, but i can tell you our commitment is relentless it is resolute and we are focused on safe air flights. Thats our job thats our business. Thats whats made boeing great for 103 years, and thats what were going to do going forward. You had more than one representative who said youre not the person you should resign. No, i understand those inputs and i respect them but again my focus here is on taking responsibility, owning it we know what we need to fix. Were making those changes, continue to get better as a company and i remain resolute on that responsibility. Will you waive your compensation this year phil, again, compensation is a decision that my board will make and theyll do a comprehensive revie review. Dennis muilenburg leaving his hearing on capitol hill. Phil lebeau posing difficult questions to him it was a Heated Exchange earlier when one congressman said if youre not giving up any of your pay, how are you accountable he gave the same answer, deflecting it to the responsibility of the board, not himself. We should point out yesterday, morgan, of course, boeing stock rose during the senate hearing, over 2 today. Its fallen by less than 1 . Did i hear phil lebeau is able to join us someone please clarify yes, phil lebeau is able to join us phil, lets listen in. I hear you. Guys, you hear me . Phil, here comes phil lebeau. Hes able to join us go ahead. Go ahead. Summarize, phil, the tone that you heard from Dennis Muilenburg he looked to me. You know much better than i. He looked like he has had a tough couple of days. Very tough couple of days and ill tell you in particular, the last half of today and the last half of yesterday, he was hammered now yesterday, it started with ted cruz saying youre the ceo the buck stops with you. How could you let this happen . We really didnt hear many senators say, youve got to resign you cant be leading this company. Well, we heard that today. We heard that time and again we also heard a number of representatives saying, how can you be paid what youve been paid, given what has happened with the 737 max 23 million was his full compensation, including a bonus last year. And you heard the last representative when she said, look, ive done some back of the envelope calculations and when you factor in your stock compensation and all of that, which would go into fullyear benefits, you stand to make several Million Dollars more than that, maybe 30 million, depending on how those are structured and she said, you know, how do you feel about that . He said weve already said that theres going to be no executive bonus compensation this year for boeing so theres a piece of news there. But as you heard, when i asked him going down the hallway, will you waive your pay this year at a minimum i think thats what the victims families want to hear i dont know if you guys heard at the end of the testimony, one of the relatives of one of the victims confronted him, and maybe confront is the wrong word to use but stopped him there was an exchange there for at least four or five minutes. By the time we got in there, she made it very clear, youre not the person to fix this situation at boeing. You should go back to the farm, thats in reference to him saying i grew up in a farm on iowa im committed to seeing this through. Thats about, you know, the work ethic that i have, to make sure that everything is righted with this situation she said you should go back to the farm this was a really rough day for Dennis Muilenburg and it raises questions for the board of directors. With so many senators and representatives publicly calling for him to be fired, do they, a, issue a statement saying we understand were not doing anything right now . Or do they take some action . Im not sure they will take action clearly, this message rang out loud and clear over the last couple of days. Phil sorry. I was going to say, phil, the conversations that i seem to be having with folks, both on wall street and within the aerospace industry, especially given the testimony over the last few days is that his job does seem much more uncertain, especially when return to service for the 737 max actually happens if that ends up being the case here, is there somebody who can readily step into his shoes . Reporter well, theyve got a deep bench the question becomes when you look at that bench, who would you elevate up into another position now, you know, there are a number of executives who could do that. The question becomes, for the board of directors, if they decide that Dennis Muilenburg has to go, do they bring in somebody and say look, the main thing here is, lets get us through, return to service, Airlines Using this plane again and start to rebuild some of that trust and then we will think about a permanent ceo, it could be you, it could be somebody else . How do they structure any possible replacement for Dennis Muilenburg i know we said this. We have to say it again. We have no indication that the board is considering replacing him. We know senators and representatives think he should be gone and other also look at this and say how can he stay in this job but officially the board of directors are standing by him whether that changes remains to be seen. The lost the chairman title so not standing by him as much as they once were. Reporter thats a good point. To the question of pay, we all know how companies work. Reporter yeah. We all know it is significant for him to waive his bonus but he is in the middle of a huge pr storm, not to mention fundamental problems, but a pr storm. Does he need to go further to try to burst the bubble on the pr to say zero pay, i accept it . Reporter thats why i asked him, wilf. I said will you waive your compensation not just bonus, your compensation this year he basically danced around it and said im committed to making this right thats not a decision for me, et cetera. Phil, thank you so much for that phil lebeau. Reporter you bet. Covering everything for us in d. C. Well, that part of d. C weve also been covering the fed today. Welcome back to all of our panel, which has been a marketmoving event. Its taken us too session highs, just off those session highs in a moment s p 500 set for recordhigh closing. David, thank you for getting up early for us in singapore. What do you expect for next year you know, i really think he told you he doesnt really want to do much the bar to move will be pretty high the data worked great but i dont think well get enough weakness to bring a december cut into play. If things do deteriorate, we got some real weakness, it could happen i think were on hold through the end of the year. Well probably end up going into next year looking at this data the story i thought was sumed up best by steve in the early part of this segment, which there are risks to the downside in rates the risks are probably pretty low. But this is were happy, and its an Election Year next year. The fed doesnt like to get involved in an Election Year the hurdle will be higher to get those additional cuts. Doesnt mean we cant get them what we might have wanted to hear was hey, we are going to try to change the framework and get inflation back to 2 by being easier he doesnt want to do that he doesnt want to get preemptively easy. Theres a slightly hawkish tone to this that the market isnt 100 appreciating and hurdle cuts are a little higher than people think all in all, i think the message was delivered pretty well today. Sarah, theres been a brewing debate about how much monetary stimulus can do to quell slowing Global Growth. Fed chair came out today, said Business Investment is weakened, that todays reading was weaker as well, referring to the q3 gdp reading. Considering the economy weve had this year, its the consumer driving the growth in the same gdp reading, you are seeing strength in the consumer. Can the argument actually be made that all of this easing, the cut in rates is helping the economy, at least here in the u. S. And at least when you look at the consumer . Its definitely a hard question to answer, primarily because, remember, these rate cuts have been made in the interest of an insurance policy, right . Theyve always been cast as a way of actually cushioning a blow or a turbulence that is going to come in the future. So, we actually dont know whether these rates have been particularly successful in matching some of the readings that were currently seeing. I would say its probably a little bit early, particularly when you see gdp we do have to remember that gdp is slowing, that the gdp quarter Growth Numbers are every quarter have been slowing since the Second Quarter of 2018, okay so we are moving into a slowing cycle. And whether or not that slowing cycle is not as slow because of what the fed has done or whether we are still going to see some further downturns is really something yet to be seen. Lastly, diana, i want to give you final word. Icon occur. You need to be buying duration here the fed today made it very clear that theyre not willing to get ahead of the market. Theyre focusing on inflation. Theyre not doing so successfully because Market Expectations are falling that will be a challenge for them t will eventually force them to ease beyond that, the current cycle is being driven by the consumer. The consumer lands the Business Cycle. The Business Cycle is slowing in the u. S. And they will be forced to cut rates further so buy bonds while you can. Thank you to you all, david, paul mcculley, sarah bloom raskin, diana and rick santelli, and josh brown who had to leave. As long as it closes above 3039 well have a record close dow and nasdaq high by about 0. 3 up next, uninterrupted coverage of the close apple results and get you up to speed on the biggest stock stories of the day. Also febacook results, lyft results, starbucks results so much more to come is the monolithic view of emerging markets obsolete . 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[beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Xxxx we are in the market zone, commercialfree action going into the close. Here to break down all of these crucial moves as we approach the close, mike santoli. Bless you and josh brown from Wealth Management as well. 13 minutes left of trade we are just below those session highs, we rose nicely after chairman powells relatively dovish comments and are above what would be a record alltime closing high for the s p 500 by about four or five points. We need to hold the gains weve got at the moment. Lets kick things off with General Electric that chicago jumping on the heels of earnings. Seema . More surprising was the company raising its industrial Free Cash Flow outlook, a key measure of efficiency, as ceo really tries to embrace this twopart strategy of reducing its debt load while finding ways to generate more cash, selling down its stake in baker hughes for 21 billion. For the quarter, Aviation Health care was strong, but power continued to decline it saw revenues decline by 14 culp telling me that 2019 remains a reset year theres still a lot of cleanup to do, plus longerterm risk, market volatility, trade and tariffs and grounding of the 737 max. Remember, they do make that leap engine he was more optimistic than he was when he joined as ceo last year ge shares, check it out, up 10 today, but still well off the al alltime highs it hit back in the year 2000. 58 and change morgan seema, thank you. Josh, one of the other things thats been seen as a potential skeleton in the closet or maybe thats strongly worded. One other thing that investors have been worried about is longterm Care Insurance and what those charges are going to look like when you talk about lower Interest Rates you saw that impact the charge there and seeing that rise but it almost seems like maybe the worst is behind it for ge when you look at the last quarter, when you look at this quarter. Well, the stock market seems to be saying that in price action but i think whats interesting of ge is that not every unit within this business is going to turn at once. Yeah. This is not like when the new ceo comes into mcdonalds and says were going to improve quality to do a better job on markets and reign in governments. Some businesses will not last long enough to turn. Theyll be sold off. If youre the type of investor who bets on turnarounds, this one is going to be in drips and drabs. Its not going to be one quarter. Oh, look, theyve resolved all the issues and there are still many issues here, many of which are still financial issues. Yeah. 85 billion market cap, its like turning an enormous ship and it will takequarter after quarter after quarter of incremental progress in different pockets of this conglomerate. To your point though, morgan, you get to a place where you can plausibly look at the industrial core and say this is the business going ahead maybe its 70 of share earnings next year. Its a 10 stock its not a crazy so maybe its a slightly cleaner story, even if its bumping. Maybe not so many surprises. I agree with that i think the surprise portion of this particular program, weve seen i dont know that there are a lot of other things to jump out of the closet. Yeah. Two major media execs appearing on cnbc, at t chief operating officer john stanky explained why his companys upcoming service, hbo max, will be different than others, like disneys and others and barry diller making a prediction about those entering the streaming landscape. The coverage, the type of content it provides. Its not the same product. We have a product option here where we can go in with a much broader demo and slate of content. When the bills start getting paid and these Public Companies have to announce losses that they are taking, because these losses, by definition, have to be in the billions they think theyve got to compete. The truth is, i dont think they all really have to do so not in the same way. Mike santoli, i mean, streaming wars its starting to get crowded and the prices are getting interesting, too. The surest prediction is that consumers win. Its a consumer surplus type market disney will never have to come out and say they lost billions theyre already creating this stuff. If you add on to it the direct consumer, you know, in a few bucks a month, i think over time that could become its own business you know, its a little bit of a mixed picture. Hbo max, interesting. Youll get about double the content for the same price as hbo if you are already a subscriber but if youve never had hbo before relative to the others. To me, that shows you the innovators dilemma, right how can we under cut that . Very easily, you can. Because you say to yourself, what does wall street want wall street wants huge sub numbers for the over the top more so than they even care about the profits at this stage in the game. So they look at disneys pricing. Unless youre at t, what wall street wants is a 6 dividend. I dont think theyll be able to do both. Game of thrones prequel doesnt matter if they make it profitable or not. Just made the show deutsche bank, german banks massive restructuring continues. Down 8 . The thing that stands out for me here is trading. Clearly theyve closed equity trading supposedly so they can focus on what theyre good at and what clients want to pay them for. What are they good at ooh. Let me finish my point. Fixed income commodities trading down 13 u. S. Bank average up 11 barclays was up 18 this is having closed equity its meant to be the strong suit i think that shouted out to investors that even if theyre closing one department it hasnt worked, to focus on the other. Focus on banking secrecies for crosscountry transactions theyre very good at that. The other point, Investment Banking was strong, up 17 they said that was because of huge loan growth in that area. Youre thinking this stage in the cycle, maybe thats because theyve been able to redivert some of that from equity trading. Again it doesnt feel like the right area to be doing it. In all levels this result was scream i screaming worrying signals and share price responding accordingly, to the themes that josh has been mentioning there as well. Putting some shade on allegedly shady banking right there. After the bell, well get Earnings Results from Facebook Julia boorstin has a preview julia . Shrugging off regulation, revenues projected to go over 26 while earnings are expected to increase nearly 9 from the year ago quarter with user growth anticipated to hold steady around 8 over the year ago quarter, average revenue per user is projected to decline from a penny from last quarter to 7. 04 investors will be looking for guidance on the impact of facebooks investment in safety and security as well as its shift to focus on communication rather than the newsfeed back over to you. Julia, thank you. Mike santoli, some of the conversations ive seen or notes ive seen from analysts coming into the print today has been less about the user numbers, more about the rpoo. And probably what they say about loading on even more costs and what it will do to margins its been a Management Team that for a while hasnt had great incentives to crow about how wonderful the economics, even though they are. Its really about their choice of how they use to run the business with ad load and spending we are set for record alltime closing high on s p 500 as things stand. Need to hold these levels. Also well have results from apple after the close, revenue of 69 billion, 5 higher or lower on earnings and trades positively 75 of the time that stock trading at the moment flat after hitting an alltime high what what are you looking out for . Its both theres a reason apple has added 90 billion in the month of october alone. Thats not a typo. 90 billion in new market cap in 28 days. Theres a reason iphone 11 is being extraordinarily well received. I dont think the street was prepared for how well. They actually have lowered prices on products thats getting good reception. On the iphone front, all is well on services theyre ahead of schedule tim cook wanted to see a 51 billion Services Business by the end of next year theyre almost there its at 44 billion already. It could be higher when they report for this quarter. I think its a dual story. And thats always what you want to see from apple, that confluence of sell a ton of hardware, add margin and by the way, lock in people, apple tv and all these other services its working. The risk is that too many people think exactly that. Its not exactly discounted. Talk about the market internals today. They actually improved. Knock stock started out deeply in a hole, it actually pulled back slightly to the Positive Side more up than down today also, to look at software versus banks. You had the ig to gtf. Look at the outperformance by Software Good proxy for are we going cyclicals, are we going growth it seems like its more of a low and slow at least in the Immediate Response to the fed. Weve got two minutes left to trade. We are set for a record alltime closing high lets check in on bonds. Rick santelli . It was an amazing amount of volatility in the treasury complex. Intraday twos led the way up and down and tenyears, they found a spot to actually steepen late in the session. We want to watch the yield curve. Why . Fed meet something over. Life goes on many look for the markets to trade as it did last week. We want to Pay Attention to 180. That he the breakout on tens dollar index, virtually unchanged, gave up late ground on volatility. Frank holland, its nice to have green going into the close. On pace for a positive finish having the biggest positive impact after previewing its outlook for ios update netflix the biggest gainer, despite negative commentary from green light capital. Really strong day for Consumer Discretionary stocks activision up. Hot wheels and bar by sales. Chips and media are down for the most part, fox and Texas Instruments two of the big names. Bob pisani at the new york stock exchange. Historic high on the s p 500. The important thing is traders have come to believe that the fed backstop is still very much present. That is, the fed will, indeed, step in and continue to cut rates if it needs to be, even if they changed the language somewhat one of the things the fed has definitely done this month is engineer a steeper yield curve as a result, bank stocks have been among the best performers this month theyre up about 4, 4. 5 , a major factor in this rotation weve been seeing recently throw in optimism on trade, helping technology names, particularly semi conductors and those are the major factors in why were sitting at an historic high for the s p 500 theres the closing bell Dow Jones Industrial average just off the high today, up 124 points s p up 11. Good afternoon welcome to the closing bell. Im wilfred frost. And im Morgan Brennan in for sara eisen lets check in where we closed s p 500 closing at 3046. 96, about five points above its most recent record closing high, a couple of days ago dow up 0. 4 , nasdaq up 0. 3 , 25 points or so from its own record close. Russell did lag today, down 0. 3 second half of the fed press conference was interpreted as a little bit dovish. That took stocks to record closing highs for the s p. It certainly did. Were Just Moments Away from big earnings the news continues facebook due out any moment. Apple set to cross at 4 30 eastern. Joining us, josh brown of ceo Wealth Management is still with us Liz Ann Sonders at Charles Schwab and ed lee is at the stock desk to help us break down the earnings trade, which will start at any moment. Mike santoli to you first. Closed right near session highs. The market was pretty well priced for what we got from the fed, which is another cut. Go on hold the history of these three rate cuts and then stop for a while and protect the expansion is fresh in peoples minds. Yield curve, that was a big concern. I dont think it was really a response to anything that the fed did or said except for the fact that its grown comfortable with this, bridged us over at least for now. What was your take on the quality of Earnings Seasons so far, liz ann and what are you expecting tonight . So far, it looks similar to the first two quarters, where the bar got set quite low and so far the beat rate has been sufficient that were moving up off of that. I still think it looks like you could possibly have a negative quarter for earnings but if so, it would be slight. I think the bigger question, though, is the outlook for 2020. Analysts broadly i dont cover individual companies do say they havent done much in terms of adjusting numbers for either the outcome of whatever trade deal this is supposed to be, and in particular if the december 15th tariffs kick in. Any trade adjustments, especially if that next traunch kicks in have not been made to 2020 thats important for a market perspective. Were in that window where forward earnings mean 2020. Josh, we were talking about apple before the bell. Weve got facebook as well etsy, starbucks, lyft. Whats been your take or your takeaway on earnings i really think the most Important Development of this earnings season is the huge moves that the largest banks in the United States made, along with the big comeback for regional banks im not saying its straight up from here. Clearly, there are reasons why these stocks have been so cheap for so long. But i think when you get a jp morgan whip through resistance and make a big new high, then bank of america follows, i think this is important for psychology about whether or not were at the end of the cycle or just somewhere late in the cycle. You would not have these big banks and the big semi conductors, frankly, acting the way they are if the vast majority of Market Participants were pulling in their horns. I like that development. Mike, it was less than a month ago. It was the start of october. Markets were royaling. And we were having the conversation about the fact that historically, october does tend to be very volatile. Yeah. We have one more trading day and now were on pace for the best month of gains for major averages since june. We had the fall freakout in august this year, honestly i think it insulated ourselves psychologically in terms of investor positioning in august for what might have been to come i think basically investors are stepping back and saying okay, weve had about three quarters of flattish earnings we have a big drop in bond yields and low short term rates thanks to the fed. It didnt take a lot of economic pain to get us there and if you tell me maybe could be the case Third Quarter is the low point for earnings and we can maybe sketch in some higher ones from here, i think thats the psychology that was working in peoples favor in october. Is having that fall freak out in august how we all have to get the Pumpkin Spice now in september . Thats it happy new year, josh. Fine. Liz, whats your take in terms of sectors that youre most positive on in terms of outlook for the rest of this year well, for the past year and 15 months or so, weve actually had a fairly neutral positioning from a sector perspective, only one out perform rating on health care we actually think that the bias toward factors as a more consistent way to judge the market has been the more relevant factor than sector. Youve seen a lot of movement in and out of leadership position by sectors but more consistency with regard to factors like quality of earnings. And thats been our focus. You want to have a focus on both quality of earnings, consistent earnings stream but also be mindful of not paying too much for it so its almost a quality growth at a reasonable price message that weve had versus doing the recommendation from a tactical perspective, specific to sectors. Hey, liz ann, its josh brown. I havent seen you write much about International Stocks and emerging markets, which have also rallied this month. I think a lot of people would love to hear what you think about that is it sustainable or are we going to get tricked again part of the reason you wouldnt see me writing about it is my colleague i understand. Is our global strategist so he would be focused on emerging markets for the most part weve been fairly neutral on our equity recommendations from a tactical perspective not just in the u. S. But emerging markets there are so many factors. Ive been calling this environment were in as moments of truth weve gotten these burning questions and probably in our sights have an answer to many of them nede survey recently came out showing for the First Time Ever one factor represents both the positive upside risk and the negative downside risk, and that is trade were kind of in that situation where it could go either way and i think that might represent an opportunity for an area, particularly like emerging markets to break out but theres still enough uncertainties, not least being related to earnings that right now were staying at neutral. Excuse me just going to check in and go to facebook earnings that Julia Boorstin has for us. Julia . On the top and bottom line, company reporting revenues as 17. 65 billion versus expectations of 17. 37 billion earnings, diluted earnings at 2. 12 per share, beating estimates of 1. 91 per share that earnings per share growth is 20 year over year. And the total Revenue Growth is up 29 from the year ago quarter. Thats better than expected. Monthly active user numbers, 2. 45 billion, an increase of 8 , right in line with expectations. Daily active users, 1. 62 billion, 9 increase compared to the 1. 61 billion anticipated statement from Mark Zuckerberg saying they had a good quarter, business continues to grow we are focused on making progress on major social issues and building new experiences that improve peoples lives around the world im sure well be learning a lot more in the Earnings Call thats coming up in an hour back over to you. Julia, we know youll be bringing that to us. Thank you. Mike, i mean, these numbers, better than expected top and bottom line. Better than expected in terms of the user metrics as well we talk so much about the scrutiny. Yep. Possibility for regulation. Privacy concerns it doesnt seem to be fazing consumers or, for that matter, potentially advertisers. No. The reason theyre in the cross hairs of regulators, in part, is because the platform itself is so powerful and it has this effortless growth attached to it yes, they overcome a 28 increase year over year in head count. They hired that heavily and operating expenses up so much. Yes, it shows you that the momentum is there. Its not a particularly expensive stock. 90 buy ratings from analysts the street never gave up on it. Thats true the street looks at the financials and says what am i going to downgrade it for. Beat very much on the eps line capex came in at 3. 7 billion the consensus was 4. 3 billion. Thats probably explaining some of that. Well dive into facebook numbers, trading by 4 , in more detail in a moment and much other earnings hitting the table. We also have a big news alert on twitter Contessa Brewer has that for us. Wilf, twitter will stop accepting political ads on the platform jack dorsey has just tweeted it out. He says while internet advertising is an incredibly powerful and very effective tool for commercial advertisers, the power brings significant risk to politics where it can be used to influence votes that affect the lives of millions. This comes on the heels, of course, of facebooks controversial decision to continue to allow political ads and not fact check those ads jack dorsey says in what may be a not so veiled dig at facebook that its not credible for us to say were working hard to stop people from gaming our systems to spread misleading information, but if someone pays us to target and force people to see their political ad, well, they can say whatever they want. This will apply to both campaign ads for candidates and for issue ads as well. As you can see, twitter dropping by 3. 5 in extended trading. Contessa, thank you. So, josh, twitter, do you think this is an overreaction . It might not be to how much money people felt twitter would make between now and the election even during primary season so it might not be an overreaction you know what . I genuinely think, and i know some people get angry when i say things like this i think theyre doing the right thing for the long term. And im absolutely okay with it as a shareholder. To that point, two share prices right now, twitter down 3 after hours, facebook up 3 of course, facebook had earnings thats why its up is it a sign of things to come if one of social media platforms accept this policy, facebook may have to . They wont. I was going to say theres enough variation. But the pr is much, much worse now with twitter having done this. Senator warner sent a letter to Mark Zuckerberg. They did respond to a lot of the privacy concerns when the pr became too much for them twitter has taken a big stand on this do you think it will hurt facebook earnings . Yoink this necessarily i think facebook will give a standard, tell us what the rules are. If you want to change rules, do so dont make us the arbiter. All these platforms have standards. I dont think if one does it means they all do it. When official candidates are tweeting out their advertisements as well on their own pages. I wonder if this starts to get into a gray area eventually. Starbucks earnings, though, are out. Lets get to kate rogers. Morgan, a very strong q4 for starbucks, 70 adjusted, right in line, revenues at 6. 75 billion. Stores across the board globally up 5 . U. S. Comps up by 6 , including 3 transaction growth. That is also a beat chien camera comps up 5 , including 2 transaction growth also to take you through some of the rewards members in the u. S. Up 15 to 17. 6 million in china, the company now has 10 million active starbucks rewards members. They also say that mobile order sales mix has increased to 10 in china, which is a very important market for them. That stock is higher by more than 3 , guys. Back over to you. Thanks so much, kate. Up 3 , as you said china comps, 5 . Expected to be 3 . American comps, 6 , expected to be 4 . Very big beats. Obviously, they are doing very well the stock actually has pulled back significantly from its highs. It got spun up in the quality brand name stock mania of a couple of months ago obviously its a little bit of a relief and a pretty good margin upbeat if its coming globally from a bunch of different areas. Youre still paying 28 times forward earnings. Very expensive. 15 off its highs youre still paying a mondo premium multiple for the stock. Its nike its starbucks this elite group of brand stocks. Costco. That people are willing to pay for. Youre right. This is one of them. Another one out lyf lyft. Lyft lowering the stock did pop 6 nearly after those results but just went into negative territory its kind of flat, just above the break even line. It raised its full year revenue guidance, given a loss outlook the stock may be sort of bouncing around because it has gained quite a bit on the back of comments from last week that it would be even a profitable. Up earler than expected. Third quarter revenue coming in, loss of 1. 57, better than the 1. 66 wall street forecast per active riders, slight beats there. Last week, as i mentioned, it said it would reach a profitability earlier than expected by the end of 2021. The question now is, though, how does it get there . Especially when net losses quarter loan was 460 million . I asked that to lyft ceo brian roberts. He said through focus. Were not doing food were not doing trucking were 100 focused on our Transportation Network and platform scale to unlock more efficiency ride sharing rival, has not given investors detailed timeline to profitability. Lyft upping the pressure on its larger rival as it gets set to report on monday. Here is the problem with that if thats true first of all, i feel bad for the guy when he came public, nobody wanted profits they wanted growth and then the story changed for the valley now he has to change his whole focus on the fly thats fine. If what he says is true, why would a publicly traded Taxi Limousine Service have a 12 billion enterprise value does anyone think this is a Good Business if they dont platform this thing and be a quote, unquote, tech company, theyre going to focus on making taxi rides profitable roseanne, final thoughts to you, if you had to thread the needle on the results youve gotten so far, what does it tell us about, i guess, where were at in earnings and the read through for the economy and also the fact that weve closed at record highs for the s p. So, i think the record highs for the s p probably reflects fed policy as much as anything else the one thing i would be mindful of is that if you look over the past almost two years in what had been a pretty wide trading range for the s p until the recent breakout sort of extremes of Investor Sentiment really marked some of those interim peaks and troughs. I would pay close attention to the sentiment metrics. Specific to earnings and the consumer, a lot of what the fed said today in the statement reflecting the beleaguered Manufacturing Sector and weak Business Investment versus the stronger consumer, i think that is key to watch from a macroperspective, whether we maintain that fairly healthy dividing line between the industrial side of the economy and consumer side of the economy. We started to see cracks through the employment channels. Thats key to focus on, to see whether that moving into weaknesses through employment continues. We only really had one negative month of data through things like ism employment. I think the next month or two will give us greater color on whether we can maintain that healthy dividing line. Liz ann and josh, thank you both for joining us. Great to see you as always. Up next, ricohs kara swisher will join us plus Apple Earnings will hit at 4 30 p. M. Sharp. Well talk about those rulests coming up. Keep it close. Were back in a couple of minutes. So. How are you feeling . On a scale of one to five . One to five . Its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry clive actually, really angry. Thank you. But what if your business could understand what your customers are feeling. And then do something about it. Turn problems into opportunities. Thanks drone. Customers into fanatics change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. Lets get back to jewel gentleman boorstin. Investor relations page, theres very interesting numbers in here, including the fact that it has grown its daily and monthly active users in the u. S. And canada now this is an area which actually showed a decline in users in a sort of plateau in users over the past two years. This is the first time in over two years weve seen that u. S. And canada grow their daily active users by 2 million. Weve seen monthly active users in canada by 3 million notable there, especially after the decline and plateau we saw another key metric from the slides is average revenue per user is 7. 26. That compares to the 7. 04 street account estimates so, pretty notable here that we actually expected that average per user to decline and instead that number grew by 21 cents between q2 and q3, showing despite all these regulatory concerns, facebook has shrugged off all of them and growing its margins significantly. Back over to you. Julia, thank you so much. For more, lets bring in kara swisher, editor at large, and ed lee reporter at the new york times. Kara, start with you twitter news, actually, jack dorsey saying they wont accept money for political advertising. Whats your take will facebook be forced to follow its a big move its a big and important move by him. Theres been a lot of complaints about how the systems are being manipulated by political figures. Its a big move for him to do this and a bold one, actually, and could impact their earnings. Although i dont think thats an enormous part of their revenue same thing with facebook its not an enormous part of their revenue but a hangover for them facebook, i dont think, will be forced to do anything here they never seem to. They moved after other people. Theyre certainly not a leader in these areas. I want to get your thoughts on this, ed, as well it certainly seems like theres two very different, very specific playbooks that are rolling out at these two social Media Companies wlry scompaniess twitter or facebook. To echo karas sentiments, its a huge move on the part of jack it could affect twitters bottom line more than facebook. Were talking about political ads here money is coming out of political campaigns. Youre running for an office doesnt mean they may still stop accepting pac money, something that facebook and Mark Zuckerberg thought of as well. They dont want to limit the candidates but pittal ads fall under different rules wlchlt that encompasses the same thing at twitter is unclear. Im going through jacks long thread here. Political advertising or messaging will still exist and be paid for. Whether its approximate specific to the candidate, that will be the bigger issue. John, whats your take, quickly, on this news and the fact that twitter stock is down a couple of percent . Then well get on to facebooks numbers. I thought it was a really smart move by twitter. Execution wise, this past quarter was pretty bad they missed pretty badly so, i figure and the stock was down from 40 to now its into the high 20s. I figure its like ive got nothing to lose. I might as well hit while the iron is hot and, you know, put some sort of equity away in terms of pr and feel good and win a lot of hearts and minds for the long term. So, i think its actually facebook, i think, is a little different. With facebook its not so much the political ads that generate a lot of money but its the political conversation and engagement of the users. That, they dont want to mess with because its starting to get election season, a lot more people going to facebook, having political debates, so forth and so on. Everybody wants to sell toothbrushes, whatever it may not be politically related but the conversations will be, increasingly. To that point, john, your take on facebook numbers really across the board they beat expectations here. Yeah. And we talk about the regulatory scrutiny. We talk about the privacy issues we talk about all the concerns there. Certainly lawmakers have been much more critical of the company. And yet when you look at the user metrics, advertising metrics, it seems like business as usual and, if anything, theres growth there dpl thats the thing. Secular trends are so powerful that, you know, a lot of the conversation of politics and libre and all this kind of stuff is really noise. And at the end of the day, its about ad dollars moving still from traditional broadcast print media to online to social media. Much more targeted if you look at the rpu they got user numbers up in the u. S the rpu number, 7 and something in change, upper 7s. In north america its above 30, its like 33 rest of the world is like europe is 10 and the rest of the world is like 3 theres a lot of head room for those for sux to catch up that could propel high 20s growth or mid 20s growth at least for a long time. Kara, set of numbers for Facebook Killing it. Very strong numbers you say theyre not going to be forced to do anything on the regulatory side as things stand, can they continue to kill it for the foreseeable future its an interesting question whether they are the only choice in town and increasingly the only choice between them and goog google theyre a duopoly in this space. They should be winning how much growth is in instagram versus the big blue area of facebook i suspect it is instagram, i suspect a lot of the growth. Its a terrific product. Because theyre killing it in advertising, because they own so much of the market, they have to get bigger and bigger and bigger, because there is so much opportunity across the globe to do that. It just shows sort of the law of giants, that they can continue theres no other choice but facebook, if youre a Small Business or anything else, you have to be there theyre going to do well even with this regulatory overhang but theyre going to get regulated. Its a question of how it affects their business. Kara swisher, john freeman, thank you for joining us ed well see you for Apple Earnings at 4 30 stay with us were a few minutes way from those earnings as well well break down all the numbers and get the earnings trade when closing bell returns does your broker offer more than just free trades . Fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. Welcome back we are awaiting ruls from apple. Jon fortt is joining us as well. Apple closed up today. Facebook trading by about 2 key things were looking out for this, jon . 36 billion in revenue and 86 billion, at least, for the holiday quarter. I think the holiday quarter, that guide is the key thing. Its all about iphone and all of this runup in apple stock is anticipation of a great number. I know they dont break out the shipment numbers for iphone anymore, but how important is that versus the services piece of the puzzle . Iphone number is the important thing to this runup service is about way in the future iphone is about now. Lets hear the numbers. Josh has got them. Guys, apple reporting earnings per share, 3. 03, versus expectations of 2. 84 revenue is also better than expected at 64 billion. The street was at 63 billion. Gross margins 38 . Segment iphone revenue 33. 36 billion. Better than expected the street was looking for closer to 32. 4 billion phone revenue down at 9 a quarter. Sequential proochlt. Mac revenue 7 billion. Wearables, home and accessories is also better than expected at 6. 5 billion. Services revenue up 18 to 12. 51 billion the street was looking something closer to 12. 2 billion. As for that allimportant q1 guide, apple says to look for between 85. 5 and 89. 5 billion. The street was at 87 billion theyre forecasting margins between 37. 5 and 38. 5 one last metric ill tell you guys, Greater China revenue down 2 , also a sequential improvement. Back to you guys. Josh, thanks so much for that jon, lets gu get to you for an immediate take some analysts saying the guide is more important for the allimportant quarter to come. That was not a miss. 87. 5 billion, even if you think that the consensus was 87, thats better. To have 89. 5 at the high end, apple is generally pretty conservative with this so, that is going to make some people happy, as you can see with the afterhours trading. And probably wants to be pretty careful about the guide, given what happened last year. You can almost say that they might even be extra conservative about the fourth quarter, which, of course, is onethird of the way over, the quarter theyre guiding. And we think about the rally weve seen in the shares youve seen alltime highs recently i mean, it really kind of speaks to how high the bar was in terms of expectations coming into these numbers. Which is why on very good numbers across the board youre getting 3 bump, which is fine, except it probably would be otherwise bigger its up 40 in the last five months, the stock is very similar, by the way, to the ramp it had into the 2018 high but now the numbers are coming through. Gross margin guide is pretty nice, too. Yeah. Thats strong. Lets get back to josh lipton for more on apples results. Josh we have a chance to catch up with ceo tim cook. We talked about a number of issues and obviously we touched on tariffs and trade tensions. A couple of questions i had for cook, one is there had been talk about had he been shipping in more iphones here into the u. S. Than usual to try to get ahead of those potential tariffs coming in mid December Cook categorically saying he has not been doing that. Nor does he intend to. As for trade tensions more generally, cooktelling me that he remains optimistic. Says im still optimistic, as i have been the whole time in the end there will be an agreement between the countries. It will not solve everything, will be in a better position where we are and where we have been we factored that into our guidance i mentioned Greater China revenue down 2 , sequential improvement. In q3 it had been down 4 . In currency, revenue was up 1 in the quarter what issue weve had a lot of analysts come out on our network to talk about is, will it be a problem in china when you have the locals like huawei with 5g handsets more vendors will have them. I asked did you see any evidence that that was having impact on chinese consumers . Want to go with the local team, 5g handsets. Cook said he saw no evidence of that in the quarter. And the network is nor nascent right now and we want the customer to have a great experience, meaning great battery life we feel really good about the position we are in back to you. Josh, thanks for that the stock is up 2. 3 the qqq is up over half a percent in after hours trades. Ed lee is still with us from the new york times. Ed, ill start with you. Whats the take . They beat on all the figures, that was pretty amazing. As others have said, the guide is the more important thing. I think all the pressures that they have been facing in china doesnt seem to have quite cut in i think when they do come out with their 5g phone next year, thats when theyll have the real bump. And tim cook is right, the service itself isnt really its nascent, not something widely applicable yet. Having the phone is nice but if theres not stuff to take advantage of that network, theres no point they may end up hitting it at the right time despite the fact that theyre behind everyone else releasing the 5g phone. You were bullish. Theres a lot to like here, it would seem whats the takeaway from you initially . Goldilocks quarter in my opinion. Iphone numbers, read into this china demands about 15 , 20 above expectations on iphone 11. Its a conservative guide. And you put it together now, it shows the install basis are an upgrade. Look at those margins as jon talked about this stock is in the middle innings and moving higher. As a bull to me its a goldilocks scenario. Russ, where do you stand . Longterm holders of apple and tim seems to be guiding the ship well. Playing it safe but making the business hum by having a lower price point that will pay off for apple and putting apple tv in as a kicker to buying products is also going to help them in the Christmas Season so we think well have a good end of the year and i think the market is anticipating that. So were excited. Jon, we havent even gotten apple tv plus yet. You and i were talking about it earlier today. Its a bigger story further down the road but i mean its still strong numbers. Im blown way by apples execution here they had so much working against them the narrative where they dont have 5g. Theyve got trouble in china, which is an important market for them potentially they have trouble in the u. S. Because of tariffs. Can apple innovate anymore people arent upgrading iphones, blah, blah, blah yet they beat and they do it with strong margins and they guide with confidence. Theres a lot to be said there yes, the services story is something that apple has wanted to focus us on this year by us i mean the investor, the financial community. But this is really an iphone story when youre talking about what you just showed me. Thats what apple is showing us here, is that they are actually selling these iphones. The demand is there in the u. S. And in china they manage to see through all the fog and ship them out. Pushing 250 on the stock. Really breaking out. It is breaking out. I think the only thing that restrains the stock from here is the fact that its more expensive than its been in years. Premium evaluation based on forward earnings right now you probably have the street expecting next years numbers to go up. Its a 275 billion Revenue Company as of next year. Exactly how fast can it continue to grow from there i think thats the only restraint. Its not about whats happening with the companies but what the market has already built in at these levels. Ed, i have to get your thoughts on apple tv plus, right . That launches in two days. Youve been following the streaming wars. Yes in general. Warner media, the service and details there as well. How do you think all this landscape shapes up and what do you think it means for apple longer term . You know whats interesting about all these new launches is that theres a freebie happening, right if you buy a new apple device you get it free for a year if youre an hbo customer who has at t, youll get that free for the first year ver i verizon and other streaming services, try to get that for free thats an initial marketing push after that, look what apple is trying to do people talk about apple tv plus as a marketing push. I think it can turn into a real business 5 a month, as small as it is in absolute terms for what you get is absolutely expensive. I think thelma put more content into it quarter to quarter, year year, 5 youre not getting as much as you would proporti proportionally with netflix or hbos max. I think it will be meaningful to services both to the margin and top line in quarters to come its something to pay close attention to. To mikes point where is the valuation at the moment . Whats your price target are you concerned about the level of influence that wall street has on the stock . Its turned significantly some of the parts, i think services is worth 4 to 450 billion. You look at the value ags here 265 is next stop this stock going next year could have a three in front in terms of 5g upcycle. As everyone pointed out, look at the upgrades 900 million installed. Should have a third of that ready for the window of opportunity. This, to me, is a defining chapter for cook and so far for cupertino its as good as it gets. 10 analysts are going to raise the price target its below where the stock is right now. Well leave it there even though theres so much more we could talk about on this thank you to our panel jon fort, dan ives, ross gerber and ed lee. Still ahead, better than expected results on lyft shares and guidance hike. Well get analysis next. Ds. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Welcome back the earnings keep rolling in Bertha Coombs has a look at etsy for us. The marketplace where people put their wares to sell. 197. 9 compared to estimate of 193. 5. Gross Merchandise Sales were much better than expected at 1. 2 billion. The estimate had been for about 1. 13 billion thats up 30 year over year during the quarter, the economy introduced Free Shipping, an initiative to really boost and get merchants to provide Free Shipping they boosted those items in the search algorithms, helping to boost International Sales in particular, 31 . The company also acquired reverb, site for vintage musical gear they are upping their outlook and the stock was a bit higher, is now lower again as we go toward the Conference Call Western Digital lower here, revenues also above expectations at 4. 4 billion versus 3. 9 billion driven by demand for capacity enterprise drives for data centers q2 outlook is a bit light at 45 to 65 cents for the range, estimate is for 75 cents on the street ceo Steve Milligan announcing he plans to retire. He has been ceo since january 2013 he says he will stay on as ceo and director until a successor is named and remain on the board at least for another year through september 2020 you can see the stock there taking a hit on that news. Back to you, wilf. Bertha, thank you very much for that. Still ahead, much more on lyfts results and the outlook for that sckto so much to analyze with all these earnings back in a couple of minutes. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Annoepidemic fueled by juul use with their kidfriendly flavors. San francisco voters stopped the sale of flavored ecigarettes. But then juul, backed by big tobacco, wrote prop c to weaken ecigarette protections. The San Francisco chronicle reports prop c is an audacious overreach, threatening to overturn the ban on flavored products approved by voters. Prop c means more kids vaping. Thats a dangerous idea. Vote no on juul. No on big tobacco. No on prop c. If youre just joining us, weve had a barrage of earnings after the bell apple, facebook and lyft reporting better than expected results. Starbucks and etsy matching on the bottom line but better than expected in sales. Breaking down toydas Earnings Report which has stock trading a little bit higher. At Southern New Hampshire university, we believe in education built for all people. [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Welcome back shares of lyft trading higher by 2 after hours they reported earnings earlier this hour for now more lets bring in an early investor in the. Company. Whats your take on the company. Great quarter lyft is three or three all of the quarters reporting after coming pup process thp they are doing the right thing executing well and 23. 1 times sale we thought they were beaten down we thought it was oversold always believed in the story there is a clear path to profitability and they pulled the profitability time line sooner by one year it adds up to a good company and good price right now and we will be buy zbleers whats more important top line growth continuing to be strong or the path to profitability and them hit hitting us. In this new reality maybe both maybe profitability more than revenue. Its clear path to profitability. In this case they have shone this quarter and the last two quarters that they are executing very well to these numbers. You say you are buyers as early investor. I would be at this stage. This is such a good price. At 2. 1 price. Youre not actually buying. No, no, im not im saying the place its at right now in terms of multiples and solid fundamentals i think it needs to be bought. We compare lyft and eye uber a bit. But uber is more a conglomerate given the different businesses it has and very involved in International Markets. Its not the same situation for lyft i wonder, the fact that lyft is more pure play north america ride share if thats the benefit. Absolutely. I think thats the story all looping. We like the focus. North america focus. The Unit Economics in north america are the best even uber the profitability is driven by ride sharing the International Market is very competitive. And uber has its own problems there. It will take a long time for the pieces to come together. But at this point i think lyft was always had a clear sight to profitability. And they know what they are doing. Lyft shares getting a lift in the after hours. Up 3 . Thanks for joining us santos. Thank you. Thank you. Its been a wild hour for earnings apple and facebook about to kickoff the Conference Calls any minute now up next, we discuss the top things every investor needs to be listening for stay with us doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Im happy to give you the tour, i lohey jay. It. Jay . Charlotte oh hi. He helped me set up my watch lists. Oh, hes terrific. Excellent tennis player. Byebye. I recognize that voice. Annie . Yeah she helped me find the right bonds for my income strategy. Youre very popular around here. Theres a birthday going on. Karl he took care of my 401k rollover. Wow, you call a lot. Yeah, well its my money were talking about here. Joining us for karaoke later . Ah, id love to, but people get really emotional when i sing. Help from a team that will exceed your expectations. Up next, apple, facebook, starbucks and lyft set to kickoff conree lls fenccaany minnesota. What should you listen for in we break it down when we return orlando isnt just the theme park capital of the world, it also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. You should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. And who doesnt love going home. Welcome back to closing bell. Conference calls from apple, facebook, starbucks ablyft and more are about to get under way. Mike what should investors listen for. Obviously apple told us plenty about what they expect from revenue for the coming quarter. I think its a fixation, things about capital return and other expectations and then facebook, you know, really how they are thinking about all the regulatory issues and what theyre doing on a business practice side to maybe counte particularly following the twitter news process Perfect Timing no doubt that will be put to them its great were seeing what an Immediate Reaction they have on it which wont be were following suit yet but theyre going to see a lot of pressure in the direction everyone said in the last hour and a half they never get forced to do anything but its hard. Hard to resist. I dont think its forced but if they say they are not doing it they have to have a rationale. Except thats not just we have always decided to have things on our platform and kind of try to correct them after the fact as opposed to ban them. One of the things i think emerging between apples call and starbucks so many names today is going to be china. And what the resilience of the consumer there looks like. Doesnt seem loob like the its the kworts. No doubt jack dorsey timed the else with that in mind. Sure. That does toes it for closing bell. Fast money begins right now. Live from the Nasdaq Market site over looking new york city times square im mella lee. Traders are tim seymour. Karen finerman steve grasso guy adami. Its if the kids said last tring are drink of water now go to bed. We debate in tempered language starbucks gets a jolt from better sales of hom and abroad and bean counting. But we begin with apple and facebook both up about the same josh lipton is on apple. Julia boorstin on facebook we start wit