Transcripts For CNBC Closing Bell 20160906

Estate loans. Should the government pay more attention to art lending . I love this story. A new report says sothebys and its lending arm could be creating a shadow banking system. To hide laundered money. Crazy. Robert frank will be along to talk about that in a little bit here. A settlement for Gretchen Carlson, the fox news anchor claiming she was a victim of Sexual Harassment. More on what it means for twenty First Century fox. There was plenty of deal making. We have the stories. Dom, you first. Kick things off here at the board. Bill, merger monday. No more. Labor day holiday. Takeover tuesdays today. Well talk about the first big one. The german pharmaceutical looking to buy monosanto. Thats up 2 from the 125 bid they had before and up from the 122 bid before that. When we combine them in a hypothetical deal, the biggest Crop Sciences seed manufacturer in the world and brings together monsanto. They own roundup and then bayer as we know it in america and dr. Scholls foot care company. And coppertoen sunscreen. 4 billion in terms of total enterprise value. Equity plus debt and its going to buy banaher near the lows of the session down by 2. 5 . This company does medical technology, science technology. Devices and diagnostic equipment. Cepheid with blood tests. That deal 53 bucks a share and finance it through existing cash and debt, guys. See what happens there. Two big deals to talk about there. Im confused. I thought danahern made yogurt. How do you pronounce fage . I think thats it. Thats one. Thank you, dom. Now the buyout in the Energy Pipeline space. Jackie . Good afternoon to you, kelly. Truly a mega merger in the space as you mentioned. Enbridge, canada, buying speck that energy in a 28 billion deal and could potentially create the largest north American Energy Infrastructure Company out there. It speaks volumes to the consolidation we are seeing within the industry and could continue to see from here on out. Companies looking to reduce costs, to diversify assets and streamline their businesses. Obviously, pipelines get oil from point a to point b but what people dont realize is how important it is here in the United States to build out that domestic infrastructure because its not just about getting product out of the ground. You have to move it around efficiently. If you dont, that is the reason that we continue to see imports into the country from foreign sources. Even with the fracking boom, again, if we cant be more efficient moving the oil, well need to import. So not only did we see enbridge and spectra move on the news. Theyre getting a boost today. But other names popping, as well. Potentially because theres speculation in the field to be tar gets, as well. Kinder morgan, jp energy and williams companies, as well. Keep an eye on the pipeline space and definitely one ripe for more consolidation and more movement, guys. Back to you. All right. Jackie, thank you very much. Well see you later. Lets get to the Closing Bell Exchange for a tuesday. We have peter anderson, the impossibly tan Kenny Polcari fresh from cape cod and Rick Santelli from chicagoland. K k kenny p. , there is a perception september is not great for the stock market and now were not far from the unchanged level here. No. Why . Todays weaker Economic Data points to the issue that the economy is not necessarily where everyones telling us where it is and the rate rise conversation pushed out to december and the markets struggli struggling. Not taking off and not completely sure yet but one way or the other i think the data pointing that way as a sense to test 2,200 on the s p and i think it fails and then it starts to move lower because the reality of the fact that the fed is stuck now, they cant raise rates just speaks to the condition of the economy and so thats a broader topic and investors start to price that in. Rick, exactly to kennys point, that Services Data was pretty bad. And the manufacturing, one people to say its a small part of the economy, the services maybe you say at least it didnt contract. But it was a pretty bad read. Well, it was. Theres no way to split hairs. The worst since february of 2010 and last time under 50 happened to have been the month before that, january of 2010. But as you take a step back, theres a couple of things that need to be aired. First of all, anybody who shocked that we are getting long in the tooth on this Business Expansion just hasnt been around. We know that. We know at some point is recession is going to happen and theres no central bank on the planet to prevent it. Look at what they have done trying to prevent things like that in the past. They bottle it up. To your point and kennys spot, theyre in a tight spot. But i continue to say you cant let every data point move your strategy when youre the Worlds Largest central bank. How it turns out, a precursor to presession . I cant tell you. What i can tell you is even if were recession bound, there is no way to logistically quantify the notion of where rates are given the economy. Now, unfortunately, over time, theyre going to get more harmonized should we go into recession and underscores no tricks left in the bag other than buying things maybe other than securities and negative rates. And therein is why so many including myself unhappy that over several year it is fmoc committee didnt take advantage of many opportunities to normalize rates. Right. And, peter, you know, in this very low rate environment theres a feeling that the high yield market is a crowded trade. You dont think it is yet, right . No not at all. I think its a reflection on the Strong Economy that high yield is a very attractive asset class right now. Im sorry. You think we have a Strong Economy . I do. Based on the consumer and the fact that, you know, unemployment certainly is stable. But certainly would like to see some stronger growth. But from the corporate perspective, things are not looking bad at all. Although you have some default rates peaking up, in high yield on the energy space, every other place looks very good. Balance sheets are better. Jcpenney, for instance, coming out of the doldrums so i think high yield is a very attractive place but you have to be careful what youre interevesting in. Avoid energy and Consumer Discretionary and u. S. High yield especially is very attractive now and gives you nice income. Yeah. Kenny, this whole discussion reminds me of hot and cold by katy perry. One data says its hot and then cold and who can tell whats really going on . Thats exactly the point. Stanley fischer said last week the problem is theres so many numbers you have to sift through it and figure out whats happening. To ricks point earlier, the fed is absolutely missed numerous opportunities to have raised rates and started on normalization. They talk about it now when the data is weaker and the problem which is why i think theyre stuck into the corner and why i dont think you see it happening at all in september and to peters point, im not really sure im not in a high yield space and i dont understand where hes seeing the economy so, so strong when youre getting the weak data. Peter . Well, good point. And ill tell you this. I think the fed, why the fed isnt raising rates isnt necessarily just because of the u. S. Economy. I think theyre looking at a global perspective and theres so many moving points like brexit not played out yet. I think that the fed dare not do anything at this point until we see how the Global Economy plays out. To that end, though, domestically we look very, very attractive compared to any other place on the planet. Wouldnt you agree . I absolutely agree i think were the prettiest girl on the street but when the fed gets up there and talks about raising rates, it is the u. S. Economy, i agree with you. It is a much bigger issue, global issue. Yet, they dont say that. Right . All they continue to talk about is how strong the u. S. Economy is and on the edge and ready and never do it. All right. I would love to see the fed raise a bit just to show us that inflation creeping in and once again if inflation does creep in, thats great for high yield because that means you have Pricing Power and you can pass on that Pricing Power to your customers which in turn builds up your balance sheet. We have to go at this point, guys. Rick, thank you so much for your restraint on this last couple of minutes. I can see you straining there. Yeah, no. My lips are bleeding but im okay. Yes. Well see you later. We have about 50 minutes left in the session today. The dow hanging on to a gain of 25. The nasdaq with a gain of 19. The heat is on apple ceo tim cook to unveil the tech giants newest iphone tomorrow. Well take a look at what investors and consumers should expect after the break. Twitters Board Meeting later this week to discuss whether theyll go private. Well speak to a reporter behind the story coming up. Compx chnge. Peanwewer plts ant more thaa th othe ng t on ee emon re tyre reased into t aph exnmoblead inboboptur re tyam reffordablnto t aph make this techlo better, in duce emins arouhe w thats wwee work right n this is the new comfort food. And it starts with foster farms simply raised chicken. California grown with no antibiotics ever. Lets get comfortable with our food again. Welcome back. Roughly 45 minutes left in the trading session. Some movers on wall street today inclu include navidea pharmaceutical. Market cap of about 90 million and agreeing to sell the north american rights for the cancer diagnost diagnostic to cardinal health. Paying more based on annual sales and milestones of that product down the road. Meantime, centene among the worst performers. Im getting the difficult ones today. Leerink partners is downgrading the stock. Its a Health Care Company with services to underinsured and uninsured individuals in the United States. Kelly . Its all the people combine things and mc said they thought verizon, its verizon . Verizon . Anyway. We know call them and see how they answer the phone. Oldest trick in the book. How do you no. Speaking of which, tomorrow, the iphone, josh lipton is here with what we can expect. Josh . Well, kelly, investors are not expecting dramatic changes when ceo tim cook announces his new iphone tomorrow. Though apple bulls could argue the tempered expectations could work to advantage. Heres what we expect from that new iphone. So faster processor. Pressuresensitive home button. Improved Water Resistance and a new dual lens camera system. Whens generating most attention, that would be the expected removal of the phones headphone jack. That could mean that iphone could be slimmer but it also might frustrate consumers that paid good money for the wired headphones and dont want to ditch them. Apple stock up 10 over the past three months and down 13 from the 52week high and one concern is performance of that iphone franchise where we know sales declined for two straight quarters. Question is whether the iphone 7 could kick start that iphone business back to growth. Steve of ubs predicts it can estimating unite growth of 5 for 2017. He points out over 200 million iphone users have yet to upgrade to a larger screen. Well soon find out whether that is the right call. Guys, back to you. I guess i just wonder, josh, people who have to upgrade because the phones are hanging on for dear life but would the people with wriggle room say ill wait until next year with the big overall . I think thats a great question. The question on the street for the audience, traders, invest tors, can what we see tomorrow jump start the franchise back into the green . As you point out, people on older models but to some majority or minority of those on those elder models decide ill wait until that tenth anniversary edition. Or am i frustrated enough by the lack of that headphone jack not to make the move . Well sign find out. Josh, thanks very much. See you later. Are you bothered by the headphone jack ything . Yes. I dont know how they stay in the headphones if theyre wireless. Maybe dont get too far away. But then bluetooth runs down the battery. Ah. I dont know. Im usually adopter. Maybe in two weeks ill say its the best thing ever. A big week for twitter. A Board Meeting on thursday in San Francisco where there are many topics to be discussed including potentially going private. In his latest piece on the company, curt wagner looks at that option along with the possibility that the company being bought out by, oh, maybe google. Like we have heard from about forever. Curt wagner joins us now. Curt, welcome and thank you for joining us. I guess the question is, this rumor bantied about so many times. Is it looking like theres fire where theres smoke . You are right. These are the same kind of things to talk about for well over a year now with twitter and i think obviously the fact they have a Board Meeting coming up on thursday and the fact theyre going to be exploring all kinds of forwardlooking options i think thats why the rumors are resurfacing and i dont expect them to walk away from thursday with a set game plan and we know whos going to buy us or not buy us. But i think theyre exploring all these different options and i think they have a better idea of where theyre going to spend their time moving forward. Lets solve the problem for them talking here. Its clear they need to maybe follow a path of facebook or even google where they broaden their portfolio beyond the original business theyre in. Cant be a standalone business and do the tweeting business anymore, right . Whats ironic is i think theyre going the other way. So, one of the things im told theyre discussing at this Board Meeting is how to cut down on costs and a few different scenarios could be layoffs which is something they did last october. They could take some of the fringe businesses, things like fabric, a developer arm and trying to find a new home for that and focus and narrow the business so theres only about the twitter app, ad sales, they have and Live Streaming stuff they have recently started doing. They want to be as lean and focused as possible. Because that makes them more attractive to someone that may want to buy them. Lyft with reports of being up for sale or not, curt. With twitter it seems like it cant be a good sign that, you know, this is out there so much. I dont know their market cap. Throw on a premium for acquisition and maybe 15 billion, 20 billion for a company that should have meaningful Growth Prospects for that valuation and the reason the discussion is happening it seems is thats not what twitter has right now. How does that impact a potential suitor is willing to pay . I think that the cost is the biggest hurdle and everyone i have talked to for the last year, especially the last six months pointed to that valuation and said whos willing to open up the checkbook and say 18 billion, 20 billion for a company that is still losing money each quarter . Twitter is not making a profit. Thats where these costcutting initiatives that i mentioned earlier come in. Right . Okay. Can you kind of reduce head count . Can you eliminate the parts of the business not impacting the bottom line and the stock price and make it cheaper to someone else who might want to come in . I think the costs right now is the biggest hurdle. I dont think anyone argues that twitter is a valuable service. Is it worth 20 billion . I dont think so. What about the private equity option to take it private and turn things around in the messy way you dont have to do it in the public eye . Are there names that have been tossed about to be possible suitors . So, ton of names get thrown around and something substantial enough as you may have noticed in the story we didnt mention any specific firms for that reason because theres no one thats coming and being a frontrunner here and i think everyone is sniffing around and taking a look and the challenge with private equity is they want a moneymaking business and take it private and dont want to spend this amount of money to bring a company that, again, is till not making a profit and so that is once again the big hurdle and so then all of a sudden you look at, okay, could someone take a big chunk of the company, you know, an outside investor, could they throw their weight around to get things changed without necessarily, you know, buying the whole company . I think thats a possibility but there are so many different ways to play out. I am eager to hear how that Board Meeting goes. Arent we all . I think the board is, too. Thanks, kurt. Yeah. Kurt wagner. Thank you. We have less than 40 minutes left in the trading session here as we begin a new month labor days over. Summers over. Theoretically. Up 23 on the dow right now. Twenty First Century fox reaching a settlement with Gretchen Carlson after accusing roger ailes of Sexual Harassment. Another anchor departing, coming up. Robert frank with a special report, this is really interesting on Sothebys Financial Services and how the business of art lending may be creating a shadow banking system. Coming up. Ur igo . Like hg someme fi jt gh thk yora every seam of you ur igo . Like hg someme me,jt gh ilorfit and your dg. Yora withnie atke m ee rards ilorfit and your stized he otti dg. Yora extra at an affoleceigoe tea e wi aex aagent. soo bod hands. Mber herat as usgri o cusrs. Ea e m er herat as usgri o cusrs. Ea e on t, wa, heretina . M g ndng . On t, wa, heretina . M weren foers. Ly. It ght. Altohingwa, heretina . M amre i nri. Li one. Ght. G g tos vethousand of th. E. Ght. Ok srlrlanfrreal azie. Welcome back. 35 minutes left in the trading session. Shares of barnes noble climbing today after a positive article over the week. Barrons said its badly beaten by amazon. They all sell books. Dont they . Roots. Family ties. Several new businesses built on people interested in the genealogy and sometimes a branch in the family tree they didnt expect. This guy right here, calmly reading the news updates and the stock update right now is one of those people and it is a subject of his new book, the stranger in my genes. Which is out today. Congratulations. This is so bizarre sitting here doing this. Heres the story. So my family i knew we were a bit unusual because thats my family there. Thats this is 1961. Thats me in the front on the left. Im the youngest of fooi by far. Five years old in this picture and four siblings are . My brother in the middle, he is 16 years older. My sisters old enough to be my mother. I came along way late. Look at the other picture. I should have been opi taylor on the Andy Griffeth show. Isnt this a good idea . Next picture, my brother and my cousin doug, cousin doug in the middle of the picture coming up. Thats my brother on the right. Were on an ancestor in summer of 2012 and doug and i have done a lot of Work Together and he asked me to take a dna test for his research. I dont know anything about dna. I took the dna test. And the test came back and, kelly, it suggested my father was not my father. Because the y chromosomes from you and doug didnt match. Should have been identical. It doesnt change from male generation to male generation. I wasnt even in the ballpark. This point, bill has published a book discussing about my Family History. Another one. Intertwined with the history of this country. So anyway, im reliving this moment. This is four years ago. I thought i was over this. Im not. That day, we have video of the show, closing bell that day. There i am. Two hours earlier, i found out my father wasnt my father. Doug emailed you saying, bill, our dna doesnt match. Exactly. By the way, i purposely wore the same tie today. How fun is that . You havent aged a day. That night i anchored emceed the wharton awards for the alumni for the group. There i am. Trust me. I have no memory of this. Im in a fog at this point. I dont know how i got through this day. This was by the way october 4th, 2012. Market up 80 points the day. I had to look it up. I didnt remember that. Anyway, so the book is about this dna test i took and the chaos that ensued after this and the search for my true identity after that. And im showing it here. And its an amazing read. What the the thing about this to resonate with people is that youre not somebody who grew up thinking you know what . Im different. I look at my family. I look at my parents and think im not one of them. You grew up without a doubt. I was raised by ozzy and harriet or so i thought. The other twist is doug. My cousin doug. Many parts of the book. You wont give it away . There are many secrets. Other secrets in there. Realize or wonder yes. About how much people dont know about their histories and whether they want to find out. We are going to each day this week deal with the dna issue, the testing and the impact on industries and things but truly i think dna testing will have a huge impact on a lot of industries and on Family History research because were going to discover secret that is we didnt know were out there. I know theres still more to come. Absolutely. How is your mother . Mom is fine. By the way, she is 98 years old. She knows about the book. Fine wit. We dont talk about it anymore. I know youre watching, mom. I love you very much. But she made me promise that i will never change my name from griffeth. I promise. From now on, signing my name, ill put griffeth in quotes. Ill do that from now on. You have handled this and doing your job better than so you think. I havent you should. I dont know. You should. But, bill, very much appreciate everything youve done to get through this period. Thank you. You can find an excerpt of the book on closing bell. Cnbc. Com. Order it on your kindle. Okay. We got through that finally. All right. Time for a news update with sue herera. Hi, bill. How long have i known you . I know. Right . Thats a shocker. Now we really do. We went to college together. A minnesota man confessing to kidnapping and 11yearold Jacob Wetterling 27 years ago. He pled guilty to child pornography charges in minnesota. He then led authorities to the remains of jacob last week. A portion of the Houston Ship Channel was closed after a tanker caught fire and spilled fuel oil into the water. It wasnt carrying any freight. The fire was extinguished and nobody was injured. Israeli rescue workers say the death toll of a construction site collapse in tel aviv risen to three. Teams worked all night to search for survivors inside the wreckage of the parking garage under construction. Four people, though, are still missing. And a ball boy at the u. S. Open on saturday was hit below the belt. By a 123mileperhour serve. This is his third round with the i think im pronouncing that right. He was twice asked if he was okay. The ball boy smiled and continued as if nothing had happened. Yikes no. Ow. Okay. Thats what he signed up for. Yes. Thats very true. Thats always a possibility. 123 Miles Per Hour . Thats uncomfortable. Yeah. Thats going to be another excrucikruscruciatin on closing bell. Just kept smiling. Thank you, sue. See you in an hour. Im better now. 30 minutes left in the trading session here with the dow up 29 points. We have a leading trader to tell us what hes watching into the close next here. Also ahead, twenty First Century fox settling an anchor with an apology and a payment. Details straight ahead. s scwht. Get a ay cege fll so manth co wron iercondhar ,htmare my cyatk. Siemendigitagr mages d reut peo perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. 25 minutes left in the trading session with the dow up 27 points. Joining me on the floor of the new york stock exchange, dr. Gordon charlotte as he often reminds me to say. Clearly, traders making the way back from labor day and a busy slate this month and a fed meeting, opec meeting, this traditionally is not a kind month to the stock market, is it . A bit of a holiday malaise in here. I think theyre down looking at the computers until they heard about a book called the stranger in my genes. A rides out of the fellows, bill. Im sure it did. Give it your best shot, buddy. But that being said, 9 to 5 up versus down volumes. Encouraging. Deals on the tape is important to indicate guys are tired of just languishing here in the range. People start getting the pencils out and sharpening them to make it work. You know, this im reminded this is 42nd day in a row of less than 1 move but back in 2014 we had 62 consecutive days without a 1 move and we could potentially have a ways to go here still. Yeah. And look. Its conflicting all the way across the board. You see data today not encouraging and then some of the consumer data we saw recently was encouraging. The deals coming out encouraging. The price of gold a flight to safety. Mixed messages. But again, bill, we have talked about this. We have gotten to a level. We are sustaining this level. If we start to break to the upside, a little bit of squeeze on the shorts and this thing could move and the doing tore the upside. With the cash on the sidelines. Correct. Thank you. Thank you. Happy reading. Kelly . Thank you. Elon musk with a couple of tough weeks with setbacks of spacex and belt tightening at tesla and the backing of someone that played god, the president of the United States and batmans trusted aid. Of course, Morgan Freeman and his investing partner sat down with us and voiced support. Is it true on shoots you sometimes checking the phone to see what the stock market is doing . Yeah. Any stocks in particular . I own tesla. Tesla . Yeah. Im a huge fan of elon musks. And i think hes got the most incredibly Bold Thinking inside of where to go technologically. Hes, you know, what hes done is nobody else has ever done. Hes landed a rocket ship so its reusable. You know what a feat that is . Now were taking off and going to mars, delivering stuff to people who are going to be settling there just like they settled the old west. And bringing those ships back and landing them and reloading them. See . Thats what i i always bring up when we do an interview about tesla, the wild card is elon musk himself and its possible that maybe he shouldnt be running publicly traded companies. Right . Well, thats a so often another story of teslas cash burn or financing or the you think whos owning this stock . You dont expect the answer to be Morgan Freeman. Hey, people love the story. They want do give him capital because they fundamentally support what hes trying to do. Betting the jockey. Thats for sure. Shares up about 2. 5 today. Well call it the freeman bump. Something like that. Okay. You can see more of Morgan Freeman on binge with carl. Meantime, the aftermath of Sexual Harassment charges of ousted fox news president ailes left twenty First Century fox 20 million lighter today. Yulia boorstin with the story for us from los angeles. Julia . Reporter hey, bill. Thats right. Fox saying it settled the Sexual Harassment suit against roger ailes, source close to the situation telling me fox is paying 20 million and though there were talking about ailes covering some of the payment, he is not going to be making any contribution to the settlement. Despite the fact that ailes reportedly walked away with fox twice what carlson is paid, 40 million. Fox saying in a statement, quote, we regret and apologize for the fact that gretchen was not treated with respect and dignity that she and the colleagues deserve. Fox in settlement talks with a number of other women with allegations of harassment against ailes and none of the overs anywhere near as high as what carlson is getting. Now, todays settlement news comes as Greta Van Susteren announced her departure this morning and publicly supported ailes. As for whether it spells more talent departures im hearing there are not more departures expected in the works. Back over to you. Still, departure of greta, julia, thats another big blow. Correct . Reporter well, its certainly another loss and i did speak to someone whos a source close to fox today who said greta is no megyn kelly and implication that megan kel sli a big star there and losing greta is not a loss of other anchors might have been. What is the latest of megyn kelly . Contract is due . Still negotiating, right. Reporter still negotiating and the fact she so publicly came out in opposition of ailes, the fact he is gone, indicates she has a better chance of staying now. Julia, thanks very much. Julia boorstin in los angeles. 19 minutes left here. The dow hanging on to a fractional gain. Sothebys caught in a Money Laundering scandal and the auction house says it was duped in this particular case. Well talk about it. Robert frank tries get to the bottom of it all when we come back. Still ahead, another blow to forprofit education. Itt Technical Institute shutting the doors after Financial Aid crackdown by the government. The fate of forprofit education coming up. Sird go tccesstt your sss wa 29n sue docom domain r the rsye at godadddom. Ack state, froc tohuds valal om lononiso buo, alby y ti, ack state, eati busin trturetmti, uners,ate, the lowetaxe desarea romy d the righenent in n york 15 minutes left in the trading session. Eog resources higher today up 6. 3 on news of buying Yates Petroleum 2. 5 billion in stock and cash. That acquisition is latest by a u. S. Energy company in the basin, one of the most Cost Effective oil fields in the United States. Art lending is one of the sothebys Fastest Growing sources of profits. But also learning that it may be the fastest way to enter murky financial waters. Robert frank joins us with a fascinating story here. Yeah. I mean, its become a huge business. Art lending now, a 15 billion business but the Money Laundering scandal raised questions of what some call a shadow banking system. According to a Justice Department complaint, and report in todays wall street journal the man at the center of the scandal diverted hundreds of millions of dollars into art and then used that art to get a loan of sothebys to generate more cash. Mr. Low emailed an art dealer in 2014 looking to borrow up to 150 million against his 330 million in art which included these two works by monet. He didnt want to go through a bank with the know your client rules and he said speed is most important. He emailed the dealer. One with a fairly quick and relaxed kyc process. Sothebys did a review and wound up granting that loan and dispersing 105 million to a Cayman Islands account of a Holdings Account and sothebys wrongdoing. Many other entities fell victim to a complex web of transactions designed to hide and disguise the illegal source of funds. Youre loaning 107 million and you dont do that much Due Diligence or enough . They have a federal prosecutor head of compliance and a new management since 2014 saying they have the rules but, look, lots of other institutions, were fooled by this. But it remains that you dont have to go through the same know your client process to get a loan from art than you do from a bank. And thats where some people say you should have an even Playing Field there. At least you didnt have to then. Do you think that will change now . Ive talked to members of congress who arent formally proposing thinking but people, including treasury, with rules on real estate similar to this are looking that the. How much are they an art dealer and how much a lender . Its a growing and important share. Lending money has been a very luke rative source of growth for them and important. You and i have had this conversation. I said, who knew . I could walk in, i could ask for a loan of 107 million ar painting . With 200 million already. Little thing. Which im sure you do. Thats the issue. Great story. Thank you. See you later. Market hanging on to a gain of 32 points today. First day back from the labor day weekend. Dow up 4. Nasdaq up 21. The clients of Td Ameritrade embraced facebook in august and ran away from other tech players. Well itemize, name names, when we come back. Our pblem on 19 ty foograrainkeducaon wil j8 years,te oe bt baws f sma busins. L prog the gogos . Thers iltimebusins. L prog r a soluon. Welcome back. The dow up 32 points. Td ameritrade clients net sellers in the month of august, scouting opportunities to take profits after the markets rebounded to new highs. The companys chief strategist j. J. Kenahan is here with us. Where were they buying and selling . Exposure to volatility was higher last month and bought familiar names. Apple, facebook, names that the average Retail Investor knows among the top three or four traded stocks every day and buying there. They were buying in areas of yield like, you know, ford being one of them. Pfizer. But then selling things, its almost i love when i see this. Selling microsoft which is an alltime highs. Yahoo 52peek highs and selling the things going up. Buying thing that is perhaps they know or underperformed and that was a nice story for the retail client. Talking to somebody earlier today of facebook. What a journey. It seems like an easy stock to pick today but think about the debacle after the ipo, nobody it was radioactive. Nobody wanted to touch that stock and look at the comeback. Very much like google went through when it came public, nobody wanted to buy that stock. Too expensive. Who can make money just doing search . What is interesting, bill, a conundrum for retail clients. We are at alltime highs, i dont want to jump in now because were at alltime highs or im all in because were at alltime highs and one of the things were seeing, which is great, retails so much smarter than ten years ago. Small amounts at a time. Really like i said, one of the things we are starting to see more and more is as the fed continues to push things off, this chase for yield, among everybody obviously, when you stocks like ford and pfizer popping up, they havent performed so well this year. Underperformed a bit and pfizer smacked at the beginning of august and they see that 3. 5 , 4 yields and heres a way in case the fed doesnt raise rates to get return. I hope people realize its a dependent variable. I agree with this. Yield is so hard because the stock has underperformed and so, you know, predicated on that not continuing if youre going to capture the benefit and going to go back to people being net sellers last month in general. Whens the last time we saw it happen . Three months ago. At the time we had just come off a big rally. Off big rallies, the clients are net sellers and making you feel good to see theyre doing that and reallocate. You saw bank america up 9 last month. Our clients were net sellers. That doesnt happen very often. To take advantage of the markets and saw wells fargo being bought. Rotating the money in areas that make sense after big moves. Td ameritrade are coincidence indicators . Better than being lagging. Good to see you. Thank you for having me. Well take a break and then the closing countdown in a moment. After the bell, not hard to imagine whats going through the minds of president obama and russian president Vladimir Putin in this photo taken at the g20 summit yesterday. Well discuss the state of u. S. russia relations. Youre watching cnbc, first in business worldwide. s youily tr. Headoe e hybriss ththuit of pfeo 2 30 left heading to the close with the dow up 33. Dominic chu joining me for the closing countdown. So good to have you here on the floor of the exchange. Nice to be back. Going through the cameras one point. Tough do this. Bob pisani is back tomorrow. Thank you for the warning. Yes. Appreciate that. Heres what the dow did again today. Not straying far from the unchange level for much of the session. Kind of a mixed opening this morning but now up 33 points. Two markets watching. With the fed meeting the 10year yield. Getting closer to the meeting around the 20th and the yield and the 10year Holding Steady here. 1. 55 to 1. 6, the range since the kind of last fed minutes, Interest Rate decision jobs numbers, things happening and thats key level. Watching, too, along the lines of that 10year note being the waterfall like last week. Yes, we did, didnt we . Gold prices, thats what im watching, as well. Gold miners very a hot trade, i would argue the hottest of 2016. A lot of weakness in the past month down 10 and getting it back big today. Etf that tracks them up 3 , 4 in the days trading and another sector to watch, an Industry Group tied to the dollar and Interest Rates and the fed, Economic Data, to gold and everything else. Whats the opposite of chasing waterfalls . I dont know. I dont either. Just stick to the lakes and the rivers youre used to. Hers the price of oil. Looking at that, too, before we go out today as we wait for the opec meeting coming up to see whether they talk about a production freeze or whatever they come up to with to try to shore up that market, as well. A telltale sign. Oil story is about whether or not its a supply issue or a demand story. People would argue over the past year or so, definitely been about the fact of way too much of it on the market. People talking about russia, maybe saudi. Other players agreeing to production freezing. Who knows . At the end of the month and huge, too. Transportation stocks, i would just note, highs of the year. And the vix holds at 12. At 12. So volatile. I know. Thanks, dom. Going out with a gain of about 40 mints on the industrial average. Susan komen ready for the race for the cure saturday. Theyre ringing the bell at new york stock exchange. Cardconnect here at the nasdaq. Stay tuned for hour number two of closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans on what could be a record breaking day here for wall street. Dow up 47. Closing at 18,539. S p at 2186 and nasdaq setting records up 26 to 5275. That half a percent gain is good for a record close. Thats in just a moment. Apple might be getting rid of the headphone jack. Ahead, well test out some wireless options and talk about potential backlash the tech giant to face from consumers as a result. Now joining todays panel, senior markets commentator and columnist mike santoli and stephanie link. Welcome, guys. For more on todays market action, fast money trader guy adami and both joining us and, guys, thank you both for being here. Mike, just briefly, some thoughts on pretty interesting day, especially this little spike here at the close in the market. We had kind of a slow growth trade take hold again today. You had treasury yields down significantly. The dollar down 1 . Ism Services Number as a short fall. Seemed like it got the muscle memory back and buy big term stocks to grow in any economy opposed to cyclical stocks that are a play on rebound and i think thats the story and the market goes nowhere in a hurry these days and we had a modest move in a sideways range. A ton of deals, too. Lets get to bertha qucoombs at the nasdaq. A record intraday, as well. Taking out the last record close august 15th and a big cap story here for the nasdaq. If you look at it year to date, its a laggard compared to the other major indices but for the quarter its been the outperformer. And some of the usual suspects have been leading us higher. We have alltime highs today for facebook and amazon. And they have really been some of the stalwarts providing the heft to move higher for the nasdaq among the big caps. Netflix in correction. Alphabet has not been a big performer as apple. For example. Today, the biggest gain earls, though, are a lot of the chinese stocks. Over at baidu theyre working to try to develop a selfdriving car a. Lot of those stocks among the biggest gainers. Apple sat out the rally for the most part finished flat on the day and downside ahead of the big event tomorrow but apple, microsoft, facebook and amazon have really been what provided the big point impact on the nasdaq here since the start of the quarter. Back to you. All right. A big day over there midtown. Bertha, thank you. Stephanie, what are your thoughts on the market . I expected a slow tuesday after labor day and started with a bang with the m and a and very positive. As corporations have more conventions, ceos have more confidence putting the stock and confidence to work and really the ism Services Number shift you had the fang stocks, bio tech and much more growth names rally because i think people are starting to think maybe were going to only grow 2. 5 . Well go back to that whole thinking of tough get the growth names again. Exactly. So im not convinced just yet. I think its going to be very interesting in the next couple of weeks to see if the cyclicals can regain the leadership. Especially led by the financials. But its going to be time will tell and data dependent. We dont have earnings and watching the Economic Data. Great point. Jeff, would you go with the cyclicals and financials here or kind of a fangs and bio teches . Look. I think maybe were missing it but i think you go with the bond surrogates. Utilities, staples, reits, consolidating since the brexit vote. Most of them oversold. Bonds to us if you look at skew, bonds have pretty attractive price characteristics right here and well go back to more than people anticipate and the bond surrogate trade and help with the growth names of the cyclicals and missing something not talking about the bond surrogate names. The issue with them is that they have been so loved, almost been momentum plays and the levels at levels, jeff, how do you do that . With a strong stomach. You need a strong stomach. Look. I dont think theres a top in bonds yet. Sorry. A bottom in yields. And so, you know, if were right on that, well go to 125 or 1 on the 10year, theres room for these things to run. If you look at spreads between, you know, where the average cyclical im sorry. The average staple, utility versus history and 10year in terms of dividend yield, theres a long way to go to get back to the old highs of 2009. We are talking about 50 years of data here so i think theres more room to run there. Guy, you have been talking about the low rate environment for sometime. But i guess, you know, you get data like this mornings disappointment and see it play out and, i dont know. It seems like a land of more distortions if the 10year level moves lower . If you think yields are going lower and i was in the camp for a while, then as rich as a valuation seems on telecom, utilities, the bond surrogates, i dont know if it matters at this point. I think you throw valuations out the window. They matter but that ism number to stephanies point miserable. Right . So what are you saying and doing in this environment . Now you have to look at financials, really take a hard look and say, has the rally in financials predicated on a fed thats going to hike in september or potentially in december . And i think the answer is yes. Maybe that ism number throws september out the window and maybe it throws december out the window, as well. If thats the case, i think you need to reevaluate the reason for buying financials. Understanding, by the way, on valuation basis, its still all relatively cheap. Mike, that just brings us back to the nasdaq closing at a record today. The point here is basically that, hey, if the nasdaq is doing that, and that is the trade people are putting on, is it actually the bad kind of rally in the sense theyre buying growth and dont see it in the broader environment . Definitely not the kind of rally that says, oh, this is giving us a really encouraging signal of whats going on in the world. I think, though, the way to square the dynamics we have been talking about is growth is scarce in the world. Yield is scarce in the world and large cap u. S. Stocks of one sort or another is where money is finding the way to get some of whats scarce. It maybe is that simple right now. Relative to the growth rates at the fangs or some bio techs, lets say. The valuations are pretty reasonable, right . A couple of outliers, i understand. You can get google at 20 times and growing at 20 to 25 . Same thing with facebook growing at the growth rate. Bio tech just killed and theres its interesting do see to me if health care can regain a little bit of momentum and rallied in the spring and early summer and then gave a lot of it back. Well see how that sector plays out. Economies doing well in a low growth global environment. Investors watching the European Central Bank Thursday to see if it delivers more stimulus. Mr. Santoli had an interview with mr. Hathaway thinking that the end of europes Stimulus Program coming to an end sooner than most think. The turning point for europe might be sooner than people think and could be a catalyst for change in the tenor of bond markets. I dont anticipate it in the coming weeks and not surprised if its a 2017 story. What we could see at the turn of the year is interesting scenario where the fed might be preparing the groundwork for the next rate increase, necessary seems the most probable date now for a rate hike from the fed and if at the same time the ecb signaling that it might see an end to its bond purchase program, they could be the catalyst for an upward move in Interest Rates. So he i want to be clear. So, hes saying there could be an end coming to europes extraordinary efforts sooner than people think . Thats right. Basically saying getting into next year, perhaps the European Central bank, everyone is looking to see how much more to stimulate and how much more quantitative easing to do, they might be in a position where their headline inflation gauges pushed up because oil rebounded and even european Economic Datas not been so terrible and i dont think its necessarily something to be worried about tomorrow but would come as a surprise i think to consensus thinking. It means a stronger euro, dollar and the dollar index down a point after that data. I know. I was about to ask mike, what do you think happens to the euro in that scenario and how does it do for the ultimate growth recovery . Right. If that cuts it off a little bit and does bode well for u. S. Multinational companies and specifically Technology Companies and some of the bond surrogates that jeff was talking about. Staples, a lot of companies and environments. Implied exposure. Jeff, if this is the case potentially, how does that square into an environment of u. S. Rates lower because we have been pulled lower by whats happening elsewhere and then this is pushing back against that . Yeah. Thats a fair point but every piece of work that we have done and, you know, believe me, i know that you can shoot holes in this stuff but it does show that the rest of the world follows the u. S. Its not the u. S. That follows the rest of the world so, you know, i still think that the u. S. Matters the most in that. You know, with slow growth and everything else, i think that we are on track to have lower yields than people are anticipating with these terms. The fed for, you know, years now has talked a big game and not done much getting in the ring so, you know, until they show me differently, im pretty comfortable with the bond surrogate call. And by the way, totally unclear where the 10year note yield would trade . We dont say its definitely going higher. Opposite could happen. Thats exactly right. If they argue theyre tightening for a couple of years, yields moved much lower on the back of that. I think an important point is since world war ii for the first time ever, you know, in the 11 instances that we have seen the fed raise rates, december the first time that 10year yields went down and clearly something is completely different than experienced over 70 years and, frankly, i dont think its changed. Until yields tell me differently, until utilities tell me differently, i think the trend is still in place. Guy, what about you . We should have drinks together later. You asked the question or made the statement. Doesnt mean the 10year rates go higher. I agree. The fed controls the front end of the curve. We agree. After that, man, the market controls it. Im here to tell you i think theres a really good chance the front end ratchets higher. The back end comes down. We continue to see the 2s, 10s to levels we havent seen in 8 or 9 years. Nobody seems to care about it. Its 75 basis points or so. But there comes an Inflection Point everybody starts talking about it. Whether thats 50 basis points. I dont know what the answer is but telling you the closer to flat, the more people get concerned and the gold markets the gold market wants to go higher. I know its had a rough month but i think september gotten off to a good start and i think gold and silver ratchet higher in the environment. Just when you thought more couldnt depend on the data. William carlos williams, more than you think. Guy, well let you go. Right on appreciate it. Theres more coming on fast money. Carter worth says one class of stocks could be the best bet for the rest of the year. Hell explain at the top of the next hour. A new cold war. President obama engaging russian president Vladimir Putin in an icy stare down at the g20 summit in china yesterday. Well discuss how bad the relations have become. Plus another forProfit College out of business and blaming the government. Find out why this industry is going belly up fast and whether thats actually a good thing later on the closing bell. Youre watching cnbc, first in business worldwide. I appr cg. Solutelythmarks beenty . Orok j, weve long tin anlep ev t orok j, weve soon tin g whatyo min and ng a ev t li b1s aig d d financial adsors. T ree th valueour. Th, he wkeeinnce pl nce mpan ibty ml w careplem™, u ve to y ibty ml w careplem™, placg ar beull thee saving y our c anmeovag ll fr quote tay. Stith yo. Welcome back. President obama and russian president Vladimir Putin had a bit of a stare down at the g20 meeting in china this week. They dont agree on much. Back here at home, u. S. Law enforcement invest gatding whether the russians launched a cyber war to disrupt the president ial election. Donald trump said if he loses its because the process is rigged. Hillary clinton said the russians are trying to put trump in the white house. Heres what trump said about russia and clinton at an event earlier today. Hillary likes to play tough with russia. He looks at her and he laughs. Okay . He laughs. Putin. Putin looks at Hillary Clinton and he smiles. Boy would he like to see her. Joining us now is an associate dean and professor of international afarrells at the new school. Nina, welcome back. Thank you. What do you think is going on between the us and russia . Not much different than whats been going on for a few years now. So its been very frozen peace in the relationship and your title had now the new cold war. Im kind of feeling that probably we entered that very dangerous stage of the new cold war. Extremely dangerous. Very dangerous. Respecting the past, amazing to apply that title to something now and appears to be more of a lack of cozy relations between the two personally but how much has the relationship actually frayed that you think describing it like that would be appropriate . I mean, i actually have really big trouble with the new cold war because its the cold war, were not looking for new ways of discussing this relationship. We immediately look back at the same times of the cuban missile crisis. Oh, that was bad and now its as bad. I think that is dangerous just naming it this way. But in many more ways, it is really not frozen today because they have been freezing each other out for at least two years, even three years but i think now the more dangerous it gets because russias being accuse of hacking and violating american cyberspace. Actually breaking laws because various information has been actually put out for everybody to see. But also, it has been used as a prop for the u. S. Relations because it really just now its a punching bag. Whatever is a problem, people want trump in the white house, russians, or they want hillary in the white house and i think that makes it very dangerous. We are not dealing with a country as it is. Its a president of that country but what you think your own propaganda tells you about. Exactly. I think what should we believe putden would like to see in terms of relations with the u. S. Or whatever advantage he thinks he might be able to get in one administration or another . What would be his objective . I think both wrong when Hillary Clinton says he wants trump in the white house and hes trump is parroting putin. Thats a nonsensical statement because putin is president of a country that america opposes adversarial. Donald trump is a candidate for president in this country and putin didnt create trump. May be using this as a possibility because trumps really wants to be friends with putin and putin is a former kgb man. Why wouldnt he use this or pretend actually even more so pretend that he uses it as an opportunity . But i actually not sure that he is more willing to have trump than Hillary Clinton because Hillary Clinton he knows how to deal with. She is tough. Its not hes not laughing at her. He knows she is tough and with trump, you know, tomorrow they will argue over who is, you know, taller and more important than whatnot and then all this wonderful way to be a great relationship with russia will end up in the cuban missile crisis. Even for putin in some ways as a kgb man may want trump just because america is really down with trump as president. But he also wouldnt really want to go down with him. Yeah. To that point, no matter who gets in the office here, wont it take a long time to figure out the various different parts and then moving pieces so that it could be yeared down the road where we hear anything of any kind of progress or not progress . Well, i think that is why the cold war is there because as i said, whatever russia is, it is just such a convenient punching bag for all problems there is. You have hacking, possibly hacking, we already now we assume it must be russia. If theres a problem of negotiations around syria, that must be russia. And i think that is very dangerous because we just assume its such an enemy, your question was, can the relationship be fixed . I dont know it can be because im not sure the United States wants to fix it. Whatever the problems are, the United States wants to have russia as such a wonderfully convenient big scary enemy because its serving purposes of many, many layers of american also a common enemy in the Islamic State and a reason why theres talk of coming together around the thought of eradicating the terrorist group but what do you think russias object is are in the middle east . Russia wants Bashar Al Assad as president. Thats russias argument and not entirely incorrectly they argue that when, say, gadhafi gone from libya, theres no exit strategy. They want to see so they say an exit strategy. Whats the vacuum to be filled . Thats one of the things and for russians, putin particularly, all antigovernment forces, actually, terrorists. Doesnt matter whether its isis or not. This is a Sticking Point because they cannot separate who terrorists and whos not. But another problem is that america does need russia. Russia does need america. You cannot have the secretary of state working so hard to have some sort of an agreement and then pentagon goes out an says, well, we dont believe in that conversation. You cannot you have to decide what america, americas policy is and i think thats a problem. First step to that knowing the person in the white house is going to be. Thank you for joining us. Thank you. Congress is back in action and good thing, too, because theres plenty on the plate including zika funding, a Supreme Court nominee and avoiding a government shutdown. Will anything get done . Apple is expected to ditch the headphone jack on the iphone and could be unveiled tomorrow. Find out whether forcing consumers buy headphones is going to cause backlash against apple later. Om lg la tffalo, o, eativeusiniv, tructure iest, o, s ec er po antht elp ow y mpantorr yobusso the iest, welcome back. We have an earnings alert with rate rogers. Kate . We are looking at david busters down by more than 7 on the earnings report. Now, did beat on the top and bottom lines. Eps at 50 cents. Street looking for 44 cents a share. Revenues coming in at 244 million. The street looking for 243 million. Company also said its comps up 1 in the second quarter. But the stock as we mentioned down more than 7 potentially on cutting the fiscal year comps expectation by about 1 . Now, originally supposed to be up between 3. 75 and 4. 25 for the year and lowered to 3. 25 for the year. Back over to you. All right. Thank you, kate. A big move down 7 for a stock that in the past actually moved considerably surprising and beating on the earnings. A decent run. I think thats the rule being cautious on guidance for the second half of the year for retail and restaurant names is poison for the stocks and at least in the short term. Dave and busters down 7 after hours. Congress is now officially back in season after a recess. Eamon javers has a look at everything on the plate. I feel like it should be a breaking news hit. Lawmakers in washington. Look at the senate floor. Theyre here, back where just a few minutes ago discussing funding for zika. Theyre not going to be here all that long, though. Take a look at the days in session for both the senate and the house. You see 43 days coming up in session for the senate. 33 days in the house. And you have to divide that in to pre and post election. Pre preelection not expected to accomplish much. Appropriations and spending bills, perhaps a continuing resolution to keep the government open before october 1st. That one is one it would seem both partys have an incentive to do before the election. Other things that are possible, mylan hearings. We have seen democrats and republicans both talking about mylan pharmaceuticals. The epipen drug price increases. Thats one to get attention. Zika funding like i just mentioned, theyre talking about it today. Well see if they come up with a deal. The president s pushing for more funding for that disease. The Merrick Garland nomination. Thats a big of a wild card. Remember, the president s Supreme Court nomination is languishing. Republicans said theyre not going to move on it. Would that change, though, if Hillary Clinton won the election in a lame duck session after that . Could you see the senate start to move on that nomination . And then tpp. Thats one that the president is going to push. But dont count on that trade deal going anywhere in this session. Thats because you have got both president ial candidates, democrat and republican out there on the campaign trail, campaigning against it. Its just a very antitrade political season. The members of congress here on capitol hill dont want to take the vote for the president here this year, i dont think. I think investors, too, mostly about the government shutdown, right . Are there any prospects thats really back in the conversation . Well, i think that theyre going to get a deal and ultimately they havent done all of the appropriations billing they need to do but package it together in a continuing resolution that keeps the government funded at previous levels. Debate there is going to be on how long to fund that continuing resolution . Fund the government to the end of the year, well into next year, all the way through next year . Wheres the date of a fight again . So theyre really fighting over when they fight again and thats what well see through the fall. Yeah. Like thats not breaking news unless we repeated that banner. Right . Exactly. I feel like ive lived that story a few times already, though. Thank you. For now, eamon javers in washington. Time for a news update again. Hi, sue. The United Nations Security Council strongly condemning north koreas latest Ballistic Missile launches and threatened further significant measures if it refused to stop its nuclear and missile tests. North korea fired three missiles that landed in the sea of japan. Bill cosbys trial scheduled for june 5th of 2017. According to the judge, at his hearing in pennsylvania. Cosby accused of drugging an salt ugh Temple University employee in his home in 2004. Hurricane newton slammed into the resort of los cabos of mexico this morning knocking out power as tourists huddled in the hotels. Newton made landfall as a category 1 storm with winds of 90 Miles Per Hour and rain. Another stunning display of the northern nights in finland on monday. As atmospheric conditions on the sun fueled another breath taking night sky. Thats the cnbc news update this hour. Back to you. All right. I really like to see that sometime. I have seen it. Really beautiful. Thank you. Sure. Intel makes a push into Artificial Intelligence. Buying a chip maker for drones and other devices. Up next, a top intel executive joins us to discuss the deal and future of ai. Itt the latest institution to go out of business. Well discuss why the industry is not making the grade. Thats coming up on the closing bell. I30 heew app . Heew aay. Whmiion peopdoloadhe new a were od fiveon go. Scand. Id infrasuctutu, om. What30 milonopleoathe re nd wee tataroes umr mpyin cloud infstur welcome back. Record setting day here on wall street. Dow up 46. S p up 6 to 2186. But the nasdaq by adding 26 points thats a half percent gain today closed at a record close of 5275 and change. Intel announcing its buying an irish chip firm for proces r processors to power drones, web cams and other devices. Our jon fortt joins us now with wilbur brooks, president of intel capital. Welcome to you both. Jon . Thank you, kelly. Wendell, welcome. Want to start off just talking about the Technology Allows machines and compute earls to see probably the best example of that that i have seen is your demo at the Consumer Electronics show allowing a drone to lock on to a bike rider and follow that rider, not only the drone but the camera followed, also. My question is, why is this Important Technology for intel to own . How big of a market do you expect it to be . Look, jon and kelly. Thank you for having me. We get excited about the acquisition of today. Its a Computer Vision as you outlined, jon. Their mission is to provide the power of sight to all connected devices. So, we get very excited to think about a world where machines and devices can see and can do things like collision avoid dance, mapping, can do navigation of interiors of buildings, et cetera. When we couple the technology that movidus provides with our cameras, we feel like devices are going to be empowered with the power of sight and when they can see and react to their surroundings, they really will become Autonomous Devices and a world where Autonomous Devices provide data back to the data center fits around the mission statement. We are trying to drive data into the data center with smart, connected devices. It is interesting. Looking at some of what they have said about the reason for being on its website it talks about moors law, slowing down, current architectures not well suited for Computer Vision and sounds like an argument against intels legacy business, kind of the suitability of that which intel is also making us expand into other areas. How many more companies is intel going to need to purchase or develop to really thrive in this world of virtual and augmented reality and machines seeing in the real world . Jon, i look at my job every day as being here to fill product gaps or holes in our technology. And to think about the world five years out and to make sure that were really well positioned both from the intel capital side where im making venture actual investments in startup technologies to m and an around companies that are highly complimentary to what were doing in augmented reality, virtual reality, merge reality headsets or in drone technology. So we really feel like putting these two businesses together will drive new Market Opportunities for our products. You know, im reading here, again, wendell, about nvidia with the head start of Artificial Intelligence and the shares as we have been saying here time and again at alltime highs. Is this your way of fending them off or taking them on . And kind of the point jon was making, how big and how much investment is required for you to maintain market leadership as computing expands into the space . Good question, kelly. I guess i would point to a series of acquisitions we have been doing to try to make sure we have capabilities in the space. I think we announced earlier in may this year we bought itsy. Its focused on similar Computer Vision technology that is will drive data to the data center in more industrial and automotivetype applications. Whereas moviduis is focused on remote. We bought in july nirvana with deep learning to help the cloud teach the devices how to act based on the information and the vision that the devices are sending back up to the cloud. So it really becomes a Virtuous Cycle and we believe by 2020 theres 50 billion connected devices and we need that. Give us a update on the portfolio. There were reports earlier this year you were looking to sell off as much as a quarter of your Portfolio Companies, the stake in the Portfolio Companies and told the companies youre as intels priorities shifted the strategic fit had shifted, as well. Whats the status of that review . Have you found buyers . Hows that fit into the investment buying landscape . I became president in november of last year and as a new leader of the organization, i thought i should probably review all of the portfolio, all of my people and the technologies that we were focused on. Its a little bit unfortunate that the review leaked into the public market. After the review, i became very comfortable with intel capital and its portfolio. I wrote a note to all of my Portfolio Companies expressing that ongoing commitment. We are investing at a record pace this year. We remain a largest Corporate Venture Capital Fund and hoping to talk more about that in november and hoping to convince you, jon, to come and moderate a panel again. Well, always good to see you guys. Startups youre investing in, thank you very pointing us, wendell brooks. Thank you very much. Fascinating. A m doing an equity offering. School is out for good at itt. It canceled the programs after the u. S. Department of education banned it from enrolling new students of Financial Aid. Coming up, a look at the fate of the students, teachers and forprofit Higher Education. First, with the rumor of apple doing away with headphone jacks on new iphones, we have a look at the wireless options if you want to listen to music. Thats next. Heirson to survive aimerisea thzheimeassoio i iing make hne aimerisea by fundg ientificreakthughs, acing pliliio i iing make hne aimerisea a prodingocaltificreakthughs, sup tthvise tir civers. Ut we t t tut you itjoheht. Itjoce t. Onol. Lexus is or causthe timaee rfecivinreco one of youa fo tru en yr te thrf. Rfecivinreco one of youa fo tru ivs th cidegi, rt n rat idutooufiacgi, d dacdent idutooufiacgi, our tersavble aisyo foa eeod. Ll welcome back. The rumor that is apple will not include a headphone jack for the new iphones unveiled tomorrow has music lovers on edge so we enlisted eric khemi to look at the options for you. What did you find . Well, so, as we know, doing away with the universal headphone jack that consumers know and more importantly own headphones for means getting an adapter if there is one or, of course, going wireless which is what i decided to check out. Everybody knows this experience. Its really annoying. Reporter if the rumors are true, the iphone will put an end to that mess. At the same time, though, creating a potential new mess, wireless headphones. I bought four pairs and put them through a very unscientific test of my own. How do i connect these things . Reporter first up, the connection test. How long it take to get your phone to talk to your new headphones . Oh, if i hit this button, a bunch of little lights light up. They went away wrchlts the button . Its back again. Now just doing the circle thing. Is that the bout tn . Its connected. Maybe no button. I got it connected. Reporter the results, the least expensive pump 2s only took 40 seconds to connect while the twice as expensive power beats took twice as long to connect. If im forced to go wireless, i should get some distance out of them, right . Here. Hold that. Thanks. Yeah. It is really choppy. What a travesty. You dont want to do that to a good katy perry song. The bose let me go eight car lengths. I have to make phone calls and expecting a few right now. You cant hear me . You cant hear me . I hear you in here. Can you hear me now . What if i Start Talking like this . Okay. Were backwards. So it makes a difference forwards or backwards. Reporter for quality, the bose higher grade and the pump 2s barely passed. Another test, the fitness test. How well do they stay on my ear . Lets do this. Reporter the beats pass. Going to fall off there it is. Reporter the bose not so much. Both inears seemed to hold up. So in summary, apple might be getting rid of cords but you have to buy new headsets. You will have to charge them every day. And youll run your battery down faster with bluetooth and to listen to anything not an iphone, you will need that traditional jack. So apple might be getting rid of tangles and might be creating even more. I mean, do you think people are just going to use the converters . What do you think . You watched it. Thats what i was wondering. Default to what they leave you with . Connect through the charger port . You assume you can connect through the charger but to charge your phone, thats a whole other issue. Or, our colleague tom upstairs shows me this. I dont know if i can zoom in here. Check this out. You plug your headphone back in here and bluetooth from here to the phone. Baub thats the best of both worlds, a cord still not connected to the phone directly. Thats another in between option. You will have to use Something Like that with oldfashioned headphones and no jack to plug them into . Theoretically, right. Keep the headphones that you have without getting headphones that go into the lightning bolt. Heres the problem. Now if you buy headphones that are meant for the iphone, not meant for anything else. Exactly. Iphones for everything else, theyre not good for the iphone. You need some kind of a adan adr on multiple devices. They use bluetooth . Mainly. Its not you showed it in the test. I dont know the experience you have had, pairing wit a car or something, its spotty, not that fast. You have to think apple bought beats and they had it thought out years in advance how it would play out. Initially, we dont want to well use these but eventually theyre so much smaller, so much more efficient and will connect better and, yeah, maybe just for the iphone and how many people want the iphone and use it . 20 years from now the jacks will be gone and that moment exactly where it happens. I dont think it will be 20 years. For sure you know in 20 but along the way. Well see if they can do it in two. Fascinating. Thank you so much. Thank you. Over to kate rogers for a market flash here. Hey there, kate. Were watching microdevices taking a hit after hours. Offering 600 million of common stock and 450 million of convertible senior notes. The stock as you can see down by nearly 4. 5 after hours. Back over to you. Thank you. First it was Corinthian Colleges and now another School Closed the doors. Itt Technical School with Vocational Education to thousands of students shutding the doors after a Financial Aid crackdown by the government. The fate of forprofit education is next. Ns where e re. Oterhe we rk. S ns deg mala oving entus. Fficy. Develoorg rnios. Obobil ngneenergyivahe g. He glco. Y what hey j inn bs u warr azininledge. That gatde t ofsionan jthousas oerrade . E, eaven al t i know. Ur brainold my be tmy henowledgefberryusas oerrade . E, ehetradon torim at ametre. Welcome back. For Profit College industry take ago hit. Itt Tech Institute announcing it will be closing the doors on all its schools after the department of education cut off its federal aid. The company on 130 campuses and enrolled 45,000 students and comes after colleges filed br bankruptcy last may and was accused of predatory lending and inflated job placement numbers. What is the future for the industry . Lets ask news editor, paul. Are you surprised at the speed of this decline. Not really. The for profit Higher Education industry has been on the road for a while. Theyve had slumping enrollments and revenue and itt in particular had face d a lot of scrutiny. The end was precipitous though. So, is the issue the government decided, i guess the reason why i ask about all this is that its not as if there was a trial by jury per se. It seems more like the evidence must have been out the there for years that there was so much wrong with these places that had it piled toup a point they had to shut them down or what happened . Thats the federal governments argument. The u. S. Department of education said that the risk of continuing to allow students to attend was more in risk than the disruption of shutting down the school, despite how hard thats going to be. Irk tt hasnt been convicted of any wrong doing. They do face quite a few state and federal investigation and a couple of federal lawsuits. What happens to the students at the point . Can they go to another site, another company . Kind of the same in terms of composition and what it will cost them or how does that work. Theyre in a really tough spot. Right now, the students that currently atebding students, are ones who have left recently, can apply to get their federal loans discharged, can get their money back. The federal government estimates if all students did that, it would cost 500 million, so its a big hit to taxpayers as well. To transfer is going to be tough. Their credits wont transfer to most community colleges. Those that do accept them might not have the same program, so its going to be tough. The department of educations trying to help as many students as it can. Is there a Business Model that can be sustain ed at this level of you know, whether availability of debt or with the kind of scrutiny of all the marketing right now . Obviously, there are still some publicly traded for profit higher ed colleges out there. Is this something thats a matter of time before they go away or is it going to be a calling . Theres already been a calling. And i have to say its an industry that is facing an exes ten shl threat right now. There are some big players who are doing well. At least hold opg. Strar university, american public. Both considered pretty good products. Capella. University of phoenix is still going under likely new ownership. But much smaller than it used to be. Just to put it in context, they had 450,000 students a few years ago and theyre under 200,000 now. What do you think is going to be the strategy for those that last after they respond to the choking off of federal loans . Thats a dpraet question. Theyre quoing to have to find way to get stupts to keep enroll and theyre going to have to do it without resorting to some practices that have gotten their predecessors in trouble. Television advertising, making promisings they cant keep High Pressure sales. Probably not going to cut it in a Clinton Administration if there is one. So, really, no letting up in sight for this industry. Yeia, it was bill clinton who details it again today. International universities, the for Profit College he was involved with, too. Thanks for joining us. Thank you. Under armour is a name wellknown across the country. Kevin plank is off to asia to see if he can duplicate the feat abroad. Tomorrow, dont miss an exclusive interview with valiant chairman and ceo, joseph papa, at 4 30 p. M. Stay tuned for that. Be back in a moment. Imibo othe k lond for the past 15 years, under armour has seen annual growth of 20 and soars stock price, too. Now, the Clothing Company has its eyes toward asia and kevin plank is in taiwan. Our sarahizen is here with him. Heres how hes sizing it up in asia. Do you feel like youre playing catch up to a competitor thats been here nor decade zbls weve been our career going against established brands. Theres a lot of local Chinese Brands that have some pretty entrenched businesses as well. That you know, we see our position just different. From the other global players. From the local market as well. Weve built a good reputation. Got a pretty good playbook that requires its own china nuance. P sure to tune in tomorrow morning starting on Worldwide Exchange when sarah will begin her series of reports and steph curry. Almost looked like they were on a boat. Clean air. The case for under armour forever has been well, theyre so small relative to competition. They have this long runway. The markets having misgivings about how fast they can get there. I think that aemploys to both. Zpl i think theres an opportunity internationally because they are one of the smallest players, but its getting soget competitive. Very challenging and its getting more and more dependent on having the right apparel or right shoe or the right technology. And the right athletes. Thats right. See how steph curry resognates on the trip to asia. Thank you so much for joining us. Michael santoli, stephanie link, that does it for us on this record setting day for the nasdaq. Fast money begins right now. Fast money starts right now. Live from the nasdaq marksite, melissa lee. Our trards on the desk tonight trk countdown is on for the biggest apple event of the year. Its not the phone or any gadget thats going get traders excited. Plus, the pit boss says there is one large cap tech stock a screaming buy right u no. He will will give us that name and later, one group of left for dead stocks is suddenly surging and may be more than just a dead cat bounce. First, a record close for the nasdaq. It was led by one of the stocks, all time highs, you know the them as the fab, amazon,