Transcripts For CNBC Closing Bell 20160601 : vimarsana.com

CNBC Closing Bell June 1, 2016

Headlines at that code conference in california today. Find out why jeff bezos of amazon says winning Golden Globes helps sell more shoes. And Sheryl Sandberg joins us. Stay tuned for that and facebooks ceo. And Steve Leishman now. On whether the fed is givie ini clues on the next rate hike. U. S. Is youing modestly. And the. The beige book did stay tagt labor markets were seen widely. And have seen wages pick up. Other sectors show real estate was stronger and looks like manufacturing is doing a little better up at least from recent lows and todays ism manufacturing suggesting the same thing. The beige book said Consumer Spending increased moderately throughout districts. Points toon economy that sounds like it is growing around 2 . But some say it is Strong Enough for the fed to hike over at jeffries they put out an immediate commentary that said the reports. Not a whole lot of evidence to do. Real data tomorrow. The adp delayed because of the holiday tomorrow morning. And jobs and services on friday. Overall jobs look of course are 170 as expectations continue to ratchet down. What do you think . It seems to me the one headline that jumps out to me, the non economist, would be that wage growth report they put. That is something they are watching very carefully. They are. And i think you are right to point that out bill. You have been watching longer than i and that is the kind of thing they would be looking at. It doesnt say they have to raise quick or embark on some, you know, steep increase in the fed funds rate. But it does say wages are picking up. It is something we were waiting for. It underpins the case for a rate hike. So again we have that june or july debate but im not sure there is much debate whether or not they ought to go some time in those two months. Any patchy . Some continues to exhibit weakness in oil and gas. But overall the economy continues to add jobs despite what they have lost in the oil. But yes it hits individual districts and sectors very hard. The economy seems to be wti stang. As you know and consumer sending is okay and weve seen it pick up and part of whats helping the outlook for better growth. Well see if its sustainable. Thanks steve. Kim forest, steve grasso is somewhere on the floor of no new york stock exchange. And Rick Santelli in chicago. They say the stock market should not fear the raising of rates because history suggests the stock market performs well when they raise rates do you think that will happen this time around. I think history tells us usually the fed raises Interest Rates in the face of better global growth, better growth at home and inflation. We dont have any of those three right now. So i think that is the scare. But i will tell you bill. What do people always fear . They sell yield in the face of a fed. December everybody was worried about emerging markets, selling utilities. Utilities rallied 14 from that rate hike. Gold rallied. Gdx. The miners rallied. The dollar actually weakened. Be careful about what you think. Look at the facts. Workdays. Better. Top and bottom line. Then you have the sales force bid for demand wear. What do you draw from sales forces bid here. Would you be look at at this part of software to invest . Sure. I think it is probably a better time for a investor to take a look at it. Sales force from anybody i know that is a salesperson and uses the product they absolutely love it. And, you know, that speaks a lot for the product. Because salespeople generally dont like to use tools. They like to sell. So it enables their work, you know, and makes them a better salesperson. They love it. But i think it is interesting that hr is picking up. Or hrfocused software is picking up. And i think companies are looking to manage their workforces better in an era of rising wages, does about that make sense . Rick did you see anything in the beige book that you feel the hawks can hang their hat on right now . Im pretty much in the rorschach camp on that. If the fed wants to tighten, they will find reasons. If they dont want to tighten they will find ample reasons not to. So to me there is no way to divine which way that is going to go. But i thought the yield curve was kind of fascinating today bill. Because in your question to steve and the answer i totally agree. There was a time, you know, when we were chugging along in a Strong Economy. The long end, seeing all the strong fundamentals of the Strong Economy would ratchet rates up and at some point of course the party would have to end or the punch bowl pulled away. So the short end would start to flatten as the fed talked about raising rates. All of those days are gone. Kind of a stockholm syndrome market. I think many ways they are held hostage by policy and now the markets look to the feds. Im not sure that relationship emerges but ill tell you the fed things the markets arent ready for a tightening. But the markets been conditioned by the fed to think that. It is a strange relationship. Im not sure when we are going to go. Im still saying were back at square one. At 37 basis points with regard to the rate it is too low in ar 2 economy. We want more. But we might be in this quasi 2 for a while. So were kind after back to the future with regard to what the fed is going to do. A name people are watching is boeing. If kim, you like boeing here. Why . For a couple of reasons. Their book to bill this year is probably going on the under one. But do you care they have a backlog that stretches into the next decade . So that is one reason you might look at it if you were a longterm investor. Theres been news out on a government refuelling Plane Program that says its been kicked out six months before another or the first delivery. Do you really care if you are a longterm investor . No. Use this as an opening. So that is why we like the name. Are you worried . You know, the journal editorial said theres basically been a bubble in this space. Do you think thats been true . Is there a risk were coming on the other side of that . Well i think if you are if your reason for owning this was fuel prices are going to drive people into new planes, then maybe. But i think it is also the cost of running your fleet. And these new planes can demonstrate that that is a lower cost total cost of ownership. The rates are still low enough. People dont buy these planes. They lease them. And those rates are good enough. So we still think that the backlog is very safe looking on into the future. Before we go steve, which number is more important, 50 oil or sp2100 . Ill take the cop out. They are probably equally important because they are both right here. Were walking into a wall of resistance in both. You are never short a dull market. Its been very illiquid. The bulls have had time on their side. Seems like the markets are held hostage by both like rick said. I wouldnt be putting money to work until we reach new highs. Interesting to watch the s p test that 2100 marks. Its been flirting for a while here. Up just a point. The dow is barely higher. Moving up out of negative territory most of the session today. Nike and under armour are of course once darlings of wall street but its been a rough couple of months for the Athletic Apparel makers. Well talk about whether this is a buying opportunity for these beaten down stocks or not. And amazon Ceo Jeff Bezos and sin dar pichai making comments in california. And bezos giving sight into the companys content strategy. Globe, you know, it helps us sell more shoes. Of course it does. Golden globe. Lets take a break. Well be right back after this. Welcome back. Keeping an eye on markets here after a healthy volume day yesterday. And by the way if you thought the stock moves were interesting. Credit markets we came back and had one of the biggest issuance days. About 17 billion with. So something to keep an eye on with in terms of the markets. And hardly ho hum considering it opened down 122 points this morning so the dow has had a good comeback today. And demand is among the biggest gainers on wall street today after being acquired by sales force for 2. 8 billion. 56 premium to the tuesday closing price. Sforseo says will help expand the ecommerce business. Google Ceos Sundar Pichai just hatching up a big speech in the code conference. Sundar talked about video, about hardware. But a big theme of this conference is Artificial Intelligence. And pichai talked about how that is an extension of googles legacy in search. In some ways we think of this as each user being their own individual google. And i think how we answer and respond to, i dont know, a 10yearold living in indonesia with like you asking a question. I think it is not we want this to be user centric. And i think part of building a smarter system over time is to be able to understand users and with that assistant for them. That friend for them. Skmi think it is going to take us time to figure this out. Googles interested in getting more and more information about what people want to know in their day to day lives. Even if they are not entering it directly into a search bar. Also talked about nexus devices saying google is going to take more hand in how those tablets or phones, how they are designed. Whether they are still going to work through partners. Also emphasizing video. People increasingly want information through video not just text. So google trying to build on the strengths and work the angles over time. And it is interesting to think about how they now might be looking to amazons alexa. Which kind of came out of nowhere and became a standard almost for a. I. And Voice Recognition technology. Google, yes is coming out with its competitor. It is not going to be open, at least not initially the same way amazons is. I was talking to one of the executives here at amazon just about when amazon knew that was a success. And he said within about a week after they released it, the amount of demand they saw and the private release and the way people were trying to hack it too do more. They quick expanded the vision for it and very happy with the way it is growing. They know it is a success when people are immediately trying to hack it. I love that. Jefb wf bezos was there as well. Listen. Amazon studios is now making original content for prime video and that is going extraordinarily well. Weve got multiple golden globe winning kod comedies. From a business point we get to monetize that content in a very unusual way. When we wane golden globe, it helps us sell more shoes and it does that in a very direct way. When people if you look at prime members, they buy more than amazon than non prime members and one of the reasons they do that is once they have paid their annual fee they are looking to see how they can get more value out of the program. The idea of amazon for many years was i could buy it online and it would delivered to me. Sometimes very quick. I personally im utterly astonished sometimes this box shows up on sunday and i only bought it saturday at 7 00. And its there on sunday. Yeah. Pretty cool. Yeah. But thats not your truck. That is usps or whatever. Yeah. In the u. S. Were going a lot of the last part of the delivery. Were not trying to take fedex out of business and. Well always better prices. Better prices on transportation would be acceptable to us. But what im really saying is we are driven to supplement the capacity. Well take all the capacity we can and we still need to supplement it. Were growing our business with ups, and with u. S. Postal service. And still were supplementing it. A lot to work with there. Are they trying to put ups and fedex out of business . No i dont think they are bill, but i think what is happening is they are at this point supplementing capacity but they are also putting a lid on the prices i this i some of these competitors can charge. If amazon figures how to do this capacity delivery sufficiently, they know how much it should cost and how much capacity they should have. Who knows if they eventually decide to take it over. And the other piece about the shoes and the movie, it works the other way too bezos was saying. When they sell more shoes and people want prime because of that, they are more likely to check out the movies and tv shows that amazon has in the libra library. So faz cycle. Are the competitors going to have to assemble to some conglomerate rival to amazon or are they going to be the only ones able to delivery across all of these facets of our lives. At the root of that is data. What amazon has always had from the beginning was information about exactly what people are shopping for. Not just what they are buy bug looking at on the site and they have been matching it to figure out what people might want. So amazon has a brought selection and knows how things e fit together. Even if competitors develop, they have to blend their data to be in such a way that they can be as smart as amazon about those things. There are those trying to do it in ride sharing. Didi is trying versus uber and lyft and grab. But data is really the competitive advantage. The coin of the realm in this new era. Off the top of the head you wouldnt think a movie or rinltal tv show is going to help you sell shoes unless you have the data that allows you to go for it strategically in that way. Felt like we were entering a golden age of technology. I thought we were b already there. But he thinks were just entering that now. Bezos said he went on this great vacation with his wife and inlaws. And joked he actually gets along with his inlaws. Had a good time but he still ran back into the office. So some of that speaks to his general enthusiasm for things hes working on. He always thinks it is early innings. Ever hear a tech executive say well were in the ninth inning, im just kind of phoning it in at this point. They are not going to be in that seat for long. Great stuff from the code conference. And more in the next hour when were joined by facebook coo Sheryl Sandberg. And the companys chief technology officer. And elon musk telling model 3 owners that it may not get access to its super charging network. Is this a little zinger now for people willing to pony up a thousand dollars for the cheaper newer model of the tesla . Im not sure how much of a zinger it is. Putting down a thousand dollars for a 35 thousand base vehicle. And ill be stunned if anybody pays just 35,000 dollars fur that people. And not getting the electricity to charge it up for free. I thought if i was are they asking for cash back . That is the interesting thing. They have been very cautious about giving out numbers in terms of how many people have returned their deposits. They did say the last time they gave us an update that there was i any like 12,000 who decided i put down a deposit and then took it back. The total number is still like 373,000 vehicles. You have 18 months minimum before they start rolling out. How much is it to use would have been these chargers . It is not a cost. The super Charger Network is part of the deal. When you buy a model s you can use the super charger. Or a model x you can go and you can use it. What elon musk is saying is you have to upgrade your model 3 to have access to the super charging component of it. At the end of the day that is it. Doesnt mean your cant recharge your feel. It just wont go as fast. That is what super charging is all about. When you go and super charge your vehicle, you are making and id have to look at the latest numbers. I they 50 charge in 20, 25 minutes. As a slightly slower rate. So its yet to be determined whether they are going to charge people approximate for super charger piece. You would get upgraded software. If you came and said i want this but i want the capacity to do super charger. They would say okay. And they havent established the pricing yet. Its no different than any other business. They realize what people will want. You sound like you are shopping. I pass by one of these charging stations and i see teslas in and i guess im too embarrassed to stop and ask. Premium and unleaded electricity. All the same. And i have that sales number in a little bit. You promise . I promise. The accountants in the back room. Let me know. The dow up 18 after having been down 122 on the open this morning. Theranos founder Elizabeth Holmes had a net worth of 4. 5 billion a year ago. You wont believe what forbes says shes worth now after investigations about whether she misled investors about the companys technology. And reinventing a brand. Why is another retailer trying the exact same strategy as one that didnt work . Well ponder that when we come back. When it comes to medicare, everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. 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Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. Welcome back. We have that breaking news on auto sales now. A little better than expected. 17. 45 million is a t rate of sales. Not the overall sales. The rate of sales for the month of may. Earlier general manager am and saying 17. 1, maybe. 17. 45 is the pace of auto sales for the actually overall auto sales for the last five years. 17. 5 is where we finished last year. This means in the first four, five mo

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