Transcripts For CNBC Closing Bell 20170706

The very latest. A lot of action there as anticipated. And a Health Care Proposal from republican senator ted cruz is gaining apparently some traction on capitol hill well have details on his amendment, proposed amendment and reaction from the ceo of mt. Sinai hospital lets get to our jon fortt, shall we, beginning with some big job cuts over at microsoft jon is in san francisco. Jon . Reporter yeah, kelly, microsoft set to cut thousands of jobs as it focuses its efforts on the cloud, reorganizes its sales operation around that. Its going to be less than 10 of its overall sales force of just under 50,000 people, but cant get a lot more specific than that. Also, some corporate functions connected to sales now, most of these jobs are going to be overseas more than 75 of them. This reorganization, think of it in terms of a different way to approach selling cloud to the enterprise, to finance, to health care. Lots of different specific Industries Microsoft trying to have subject Matter Experts who really know these industries go in and have a simpler sales process more tailored to that industrys specific needs that an effort to keep the cloud sales going momentumwise and amazon has been out in front as far as the cloud trend goes. Microsoft is known as the number two. They, of course, want to close that gap guys shares lower today about threequarters of 1 jon, thank you right now for now our jon fortt. Wed chat with jon but breaking news out of germany eamon javers is pretty much there on site and can give us a better view of whats going on eamon . Reporter yeah, bill, you can probably hear the helicopters overhead and the sirens behind me here. Things have gotten a little bit tense here in hamburg. The protests have taken a little bit of an ugly tone. I want to turn over here see if you can show the folks whats going on right here weve got some protesters down the hill and behind where im located here, and you can see here that some of the medics are treating some of the injured protesters at least one person here appears to have been overcome by some kind of gas or at least possibly a head wound. We saw hundreds of police amassed in formation behind us protesters marching on the spree along the river front behind me. Then all at once the police in a group of about 500 or so, the police put up a big cheer and charged forward and pushed those protests out of the way, pushed them down the block here behind us we saw at least one or two people behind me throwing bottles and things its been relatively calm in this area though right where we are right here we do see a large group of Police Officers here staging just up the hill from where the more intense parts of the protest are which are just down from where we are. So things getting a little bit ugly h. Not yet dark here in hamburg so people havent really gotten into the full swing of things we imagine that well get a little bit worse here once it gets dark. Back over to you. Amazingly light for 9 00 p. M. Youve seen this, bill, over and over again. They are just Getting Started at this point, and its still well be checking back with eamon to get an update on all of this coming up in a little while, but it is often unclear exactly what what they are protesting at any given moment. Eamon, do you have any sense of when this is supposed to swell . Was tonight the big night or with all the Media Attention that it could perhaps grow yet reporter no. They have protests scheduled for today, tomorrow and saturday so folks here tell me they are bracing for several days of this police are moving into position behind us going this way and starting to clear the intersection which is to my left just here. We do expect that the police will have been planning for this for a while. They knew this was coming. There was talk of 100,000 protesters here in hamburg today and through the next couple of days, so this is something that the police have been preparing for for a while, but as you can see, weve got some of the protesters have their own sort of medical teams with them who are tending to some of the people who have been wounded here already, and like we say its not even dark yet, so this could be an ugly scene once it gets dark. A lot of people Walking Around here drinking beer, smoking marijuana and as all of that ramps up it could get a lot worse before it gets better, kelly. We were discussing this earlier on power lunch. The wisdom of holding a g20 meeting in that part ofgermany i mean, in hamburg that apparently is a an area that the protesters, you know, are a lot of them are there anyway, and it was like you were having it in their own backyard to hold the g20 meeting there any discussion about that in germany right now . Reporter yeah, absolutely. Well, weve been talking to many so of the locals here in hamburg and they say this area just behind me and down by the river is the traditional headquarters of the Anarchist Movement in the area and a lot of locals tell us this is probably a mistake to put this g20 event as close to that group as it is now today. On the other hand, the police have known this was coming for a while and have been preparing. Yesterday things were very peaceful here in hamburg a large protest, a couple of guys right here saying hello were making friends here and having a Little International discourse, so that was the vibe last night, too. Very friendly and very peaceful. A lot of dance music, technodeejatechno deejays. The whole message was antiglobalists and now that President Trump embraces some of that, what is the actual message of the protesters . Is it pro globalists now reporter let me talk, now, okay let me talk, bud. All right were going to let eamon deal with this. The general message here is anticapitalist. Theres been a lot of anticapitalist sentiment among the crowd here, and ultimately theres a lot of antitrump sentiment here as well i mean, a lot of the message here is about donald trump personally, and a lot is about capitalism and globalization a big theme as well so a lot of anger towards all of those fronts here, but not necessarily a unified message here, but definitely a unified protest vibe here. Unified resistance. I know we want to let you go. I can only imagine what youre dealing with behind the scenes there, but just set the stage for us here. I mean, having covered these things myself and youve covered many more than i have, how far away will the summit the actual summit be the World Leaders, will they be able to see any of this as its happening . All right. We lost him. I assume that was a planned loss, that hes okay, but, you know, thats a crazy situation there, especially when they get a view of the tv cameras and they make hay while they can. Thats the oxygen. Exactly well check back with eamon a little while now. Shall we check in on tesla shares in the meantime by the way, they are tumbling again today. Down more than 5 . More questions about the safety of the model s lets get to phil lebeau with more details. Reporter shares moving lower, about 6 lower today. They have now officially entered into what we call bear market territory meaning they have fallen at least 20 from the highs. Just eight sessions ago they hit the highs. I think it was 386 a share. Some of this has been at boughted to a note from Goldman Sachs yesterday suggesting that perhaps were seeing a plateau in the sales of the model s and the model x, and then overnight there was the release of crash test results from the Insurance Institute for Highway Safety these results and this test specifically look at thi collision right here measures how these vehicles handle whats called the small overlap collision where the front corner hits another object at 40 Miles Per Hour the iahs says that the mold s is not a top safety pick because of how the crash test dummy reacted, nor does it give them the top rating of good for that particular test. Calls it simply acceptable in response to this tesla says the most objective and accurate independent testing of Vehicle Safety is currently done by the u. S. Government which found model s and model x to be the two cars with the lowest probability of injury of any cars that it has ever tested, making them the safest cars in history. While some have debated that following these crash results from the iihs, one thing is clear. Shares of tesla versus General Motors the reason were showing you this is it got a fair amount of attention when teslas market cap surfaced General Motors at about 52 billion. Its now fallen back below General Motors at just under 52 billion. But, again, guys, these shares are in bear market territory i was going to ask you how they have done in past crash tests, but how do we you just told us there with that. Two separate tests. How can it lead to two different tests here reporter two different tests in terms what have they do the federal government does a this is not the federal government one that is the iihs the federal government does a full straighton the front of the vehicle. They do not do the small overlap, and the Insurance Institute says, look, in our opinion, if you want to call yourself the safest vehicle in the world, that would be getting a fivestar rating which tesla model s does get from the federal government and getting the highest possible rating, you know, that it could, good rating, from the Insurance Institute. Thats the response from the Insurance Institute. The response from tesla is nhtsa gives us a fivestar rating. The model s is the only suv to ever get a fivestar rate and we think they are the safest vehicles that are out there. All right thanks, phil see you later. Reporter you bet. Now to the markets and what a day its been again. Minus signs pretty much across the board for the major averages today. Joining us as we head to the close here, peter costa, mark lusceny and Rick Santelli at the cme in chicago peter, clearly, youve been waiting for a pullback this is a minor one here weve seen the markets struggle with volatility this week so far. First, let me say something, bill if you saw the video from hamburg, that was actually the costa family july 4th picnic. All right. And that was my family coming after me because i was short the market, but, no, you know what i think a lot of things that happened this morning. You had the eu saying that the kweezing is going to lighten up and, you know, some geopolitical issues, i think north korea is something that we have to keep an eye on, so i think, you know, traders are getting a little skittish right now and with the market being at alltime highs youre going to see these pullbacks, and pullbacks wont be five points and ten points. They will be 100 points, 120 points. We have the private sector jobs report this morning that came in a little disappointing, so we get the big jobs report tomorrow and theres some talk about how strong the economy really is what do you think . Kelly, i think what were going to see is a jobs report that continues to show that job gains are being had. Obviously youve seen a downshift on the number of jobs being creed on a monthly basis because the market is tightening a number of job openings are unfulfilled and continue to grow and job hires cant keep up with the number of jobs created we believe that the labor market remains force which is the key to a selfenforcing economic unit and ism reports in manufacturing and services this morning that both beat expectations i think the reflation trade is ultimately going to reassert itself here in the second half, and were going to see advances of equities going forward. Speaking of which, rick, here we go again. Let us talk about Interest Rates. As they continue to rise the tenyear bund, last i saw was 56. 9 and the tenyear now here in the United States at 238 i think, and youre on record now seeing it back above 241 at some point. Yeah. I think 241, 142, the last significant top after we made the bottom in a market which was 217 which lasted until very recently as the low yield close of the year. All of that have happening, of course, after the high yield close of the year at 263 theres a lot of technical aspects but in english, you know, i really dont think that youre going to see huge amounts of feartype trading and rates running in and not in an orderly fashion, but i do think the trajectory, and weve talked about this before will be to the upside, and its going to be kind of the threetwo notion, three steps up and eventually a couple steps back. I would think in the low 2 been the 40, remember, 2. 44 is unchanged and the whole zone, a pause area and well monitor the behavior the days of talking at a test under 2 is pretty much in the rear view mirror listen, on growth on the economy, on jobs, its hard for me to get too excited that were hitting this brand new soft patch. It is softer than it had been, but over the last 12 or 14 quarters weve seen negative gdps weve seen five handles on gdps and that was all prior to 2013 i dont know that anything has really changed except for the fed is doing something different, and the timing couldnt be worse. They are tightening into what looks like a slowing, but i think well see a little speeding, but i dont think we can get above the 55mileperhour speed limit. Rick, on the very point its interesting because how do you fit the u. S. Dollar in all of of this the dollar index half a point below 96 and all of this as the fed is tightening. What do you make of it see, to me i think it makes sense because we have to get away from thinking that our fed is raising rates higher rates is going to be better for the dollar and part of that have is true but the part that kind of dismisses the dollar is that were not looking at a raw dollar rate, but most are making a comparison about the dollar index which is heavily euro centric or were making a case for the euro versus the dollar, so theres a definite amount you could learn from that relative relationship, and i think what i see is that the euro is king now because they are going through their, yeah, you know, we have a great benefactor they are still doing quantitative easing, were starting to see traction so thats kind of the flavor of the quarter, maybe the flavor of the year, but i do think there will be a point in time where people will scratch their head and say they still have major negative Interest Rates mario draghi probably is going to delay, delay, delay on actual qe which probably qt where they stop it by the end of the year most dont think thats actually going to happen and thats when the dollars day in the sun will happen. All right, but, mark, do you think the rise in rates, if it continues, can be does this become a headwind for the equity markets . Oh, i dont think so. I mean, if we were talking about a yield approaching 4 , then that would be troublesome, but it really matters not so much on the elevation of the yield but why its occurring if its occurring because theres inflation without growth, then that would be troublesome for market and that i have sympathy for, and if its a consequence and better Economic Growth thats promoting faster activity it a could breed inflation while still at the same time negotiate nighting a rate of inflation again in excess of 4 to warrant much higher bond yields, then i think the market likes it because thats Fertile Ground for corporate profit growth. I assume you disagree, peter, very quickly. Of course i do, but, you know, well look at it this way. Were out of the Second Quarter earnings season. Well see how that plays out tomorrows jobs report will be important because, you know what, the fed should really take a look at it and say, you know what, maybe were not growing at fast as we would like right now and the one thing we havent really seen a lot of and we dont talk a lot about it is Wage Inflation you still havent seen it, and i think there should be Wage Inflation for anything to for the economy to expand significantly. All right got to go guys. Bill, real quick, real quick, bill. Thank you. Bill, real quick. Yeah. Theres a third channel, okay its not that its not the right amount of growth its not that the theres inflation. The other channel is because Central Banks are slowly losing control in europe, and that is pushing our rates higher nobody ever looks at that channel, and i think we really need to study that one more. Fair point. A central bank behind the curve. Imagine that thank, guys. See you later. All right. Boy, are we behind schedule here lets move along weve got about 43 minutes left in the trading session and were near lows for the session. Right now the dow is down about 131 points. Senator ted cruz wants Health Insurers to be able to offer cheaper, less comprehensive health plans in addition to obamacare ones up next, the ceo of mt. Sinai Health System tells us whether he thinks that will raise or lower premiums. And the Trump Administration is setting its sights on space we have the names of companies that could be big winners in a new space race coming up. And we want to hear from you. Contact the show via twitter, contact the show via twitter, facebook or send us an eaiml. The power of closingbell nbcnews. Com the power of smart beta. Power your clients portfolio with powershares. Befo nbcnews. Comer the s investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. slow jazz music fly me to the moon and let me play bell ring the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Welcome back republican senator ted cruzs Health Care Proposal is gaining some traction among conservatives and could save the Senate Health care bill. Our Kayla Tausche has more kayla . Reporter kelly, cruz along with utah senator mike lee are among the lawmakers with the primary goal of lowering customers premiums and to that end they have offered the Consumer Freedom component which relies one obamacare plan on a state exchange would be allow to sell any other plans complaint plans would cover preexisting systems and the socalled freedom plans would be offered for healthy young people this structure causes outofpocket costs for the former group to spike but conservative groups have supported it if Senate Republicans insist on tweaking obamacare instead of repealing it the language will provide consumers with more choice and truly more Affordable Health Insurance Company the club for growth supports the amendment but toys total repeal is a backup. That idea has been floated by the president and several other senators kentucky senator rand paul is still grappling wi kentucky s mcconnell is still grappling how to get to 50 members. Trying to get 50 members of youre caucus that can agree to a version of repealing and replacing. A version its unclear exactly what that will look like the cruz lee amendment is currently getting scored by the congressional budget office. Well see what the senate bill, kelly, can come up with when they are back in session next week. All right kayla, thank you very much lets bring in Kenneth Davis hes the president and ceo of mt. Sinai Health System joining us today from new york dr. Davis, good to see you again. Welcome back. Good to see you guys. I know youre not a fan of the gop plan as it exists right now, but what about the the cruz amendment that offers a choice, where the Insurance Companies would have to or something thats complaint with the obamacare systemle what do you think of that . Right, what youre going to end up with is two pools youll wind up a pool of inexpensive insurance thats rather schism, and youre going to wind up with a pool of people who have a lot of preexisting conditions, Health Care Problems and very expensive insurance the problem here is that were taking the Healthy People out of the risk pool and as a consequence were leaving behind in that comprehensive policy those people with preexisting conditions, chronic disease or people who think they are at risk for illness those policies are going to be terribly expensive because you dont have the Healthy People in that pool to bring down premiums those policies are already terribly expensive what do you propose be done about the affordability of obamacare care plans if nothing comes of this whole republican effort right what weve got to do is address the issue of why is health care expense sniff what are we going to do to bend the cost curve as we talk about it what are we going to do to make it more efficient . And that means we have to change the way we deliver care. Were in a system now thats called feeforservice which means providers of care are paid as soon as they do something what we need to move towards, and weve been moving towards it in some places, is a system in which hospitals, providers, physician groups, are paid to manage a group of patients ahead of time, and if they manage those patients efficiently they are going to have some margin. If they manage them inefficiently its their loss. Weve got to change the way health care is delivered these bills are not not addressing those questions. Boy, i can hear all my conservative friends saying thats like socialized medicine. It takes the profit motor it out of a business that needs a profit motive to get innovation going to find cures and things i mean no, not really. What it does is it takes the profit in efficiency it rewards providers for providing really effective care, coordinated care the most costefficient care and then hospitals and provide remembers going to have a margin right now its just openended. That sounds great in the meantime, with everybodyration premiums a bunch an states as we head into next year and the uncertainty that we still have about what is going to come out of this, is it better at least for there to be an option to get people covered, even if they are able to choose a light plan instead of the fullservice plan . Right. At least they are under a plan okay, but lets understand why these rates are going up so high what we have are very poor risk pools. We dont have risk pools with enough healthy young people in those risk pools this, if anything, is going to make that worse. Premiums will go higher. But your assumption this makes it worse because these people are separated into the light plan and the heavy plan. Thats right. And if thats not the case, if they are able to simply say, okay, were going to be able to bring people into the system and combine it on the back end, doesnt that still help to potentially bring down the costs for everybody . I dont see it. I think whats going to happen is youre going to get young Healthy People buying very skimpy policies who should pray that they dont get sick. But the insurers still gets their money, so the whole point of this the insurers are able to offer light plans if they also offer obamacare plans. United health gets the funds from a young person on a skimpy plan. More than they get otherwise. But they will be in accept rat risk pools, so in order to keep those premiums really low, those people who are getting the low skimpy plans, they are going to be in a different risk pool than the people whole have a high comprehensive plan, and im very worried about plans that dont provide preventive care, that dont provide pharmaceutical benefits, that dont provide Mental Health care, that dont provide services for addiction i mean, people like to deny that they have illnesses and then all of a sudden they are confronted with it. Dr. Davis, gallup poll found the number one concern of americans is the cost of their Health Coverage for the first time this is a new and pressing problem. Right, but what we shouldnt do is confuse people and say because the policy is less expensive its good. What they are going to find out is those policies have got all kinds of deductibles, high copays, and when they are really sick its inadequate. The they are pretty inadequate right now, by the way, even the ones who cover essential benefits have very high deductions and are still incredibly expensive on a monthly basis. Dont forget, those are subsidized with critics and it makes it much more affordable for those people who those exchanges were designed for. Before we let you go, and were horribly over time again look, the scenario you laid out of what you would like to see happen, thats not likely to come out of this congress. Thats right. So lets talk lets talk reality. What do you think is likely to come out of congress, and how are you going to respond to it what can you as a Business Leader do then well, i think whats what could come out of this is two trains that is are very destructive potentially to Large Health Care centers in urban areas. One is that were going to be losing an awful lot of medicaid, and thats going to provide the Hospital Systems with lots more patients with uncompensated care the second is were going to find that there will be a lot of people with preexisting conditions who cant afford their policies at all, and they are going to come into the hospital with Major Medical problems and also be uncompensated and once again the hospitals by law will have to take care of them, and its going to be very difficult to see how a lot of hospitals that already have very small margins are going to survive in that environment. We are fundamentally not dealing with the basic problems in health care which these bills. All right. Thank you, dr. Davis. We could do an hour, thats for sure. Thank you, sir. Good to see you again. By the way, General Electric is the worst performer in the dow today after a very bearish call by a major wall street bank well have that story coming up. And then well head back to hamburg germany for the late on the clashes between police and protesters ahead of the g20 meeting. Stay witush hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. Lock at some Market Movers this thursday. General electric, the worst performer in the dow today after jpmorgan slashed its price target on the stock to 22 from 27 a share. Trading at 26 and change right now, and they reiterated an underperform rating citing Growth Potential concerns. Ge shares falling 16 so far this year, making it the second worth of dow perform they are year behind verizon. Meanwhile, shares of l brand sinking today on the heels of weak june sales. The Parent Company victorias secret and bath and body works reported a net sales decline of 6 for june compared to last year that stock is down 14 plus today. And were still monitoring the situation in hamburg, germany, where protesters and police are clashing ahead of the g20 summit p. Our eamon javers is in the middle of it with a little bit more about the clashes ant rest of the president s trip eamon . Reporter yeah, thats right, kelly. We moved a little bit closer to give you a picture of exactly whats happening here, to give you a sense of where we are. Were up on top of a very steep hill that leads down to the harborside and river and ill step out of the shot here and let you take a look at the scene right now. Weve got a large group of protesters down there. They were stopped by police who moved in and really put a halt to the situation they have got signs saying capitalism kills they have been chanting antifascist slogans somebody here just threw a bottle at the Police Trucks that are moving in behind us here with reinforcements for the police down there with the crowd. Its much more like a cross between a street party and a riot here going on as you can see, some of the folks out there just chatting, drinking, hanging out, but definitely an antifascist tone, an antiglobalization tone and antidonald trump tone to the protests here as weve been seeing throughout the afternoon. Across the street here, across the street near the harbor there, the protesters have taken over a building, and they are just sort of sitting on top of that building there, climbing up and down the police are giving them relatively free range to do that looks like no major danger there for the folks who are up there, mostly just trying to get a better view of whats happening, and weve got a lot of spectators also, taking in the scenes tonight as we get towards twilight here in hamburg well get to a situation where it will get dark here later, and theres concern that this situation could get more worse with more drinking, more marijuana smoking and right now a cross between sort of a street party and riot going on here in hamburg, germany kelly, back over to you. Let me reiterate the question i had earlier. Where are you in relative to where the summit is going to be . In other words, will the summit leaders be anywhere near this . Will they even be cognizant that this is going on while they are meeting . Reporter this is pretty loud, and you can hear the security cameras overhead so they might be able to hear some of that, but all of of this is well away from where the president will be, for example, and where some of the other folks will be, but the International Media is right here so all of these images, these protesters are very aware and media savvy. All of these images will go around the world thats really what they want one of the leaders was actually shouting in english to the crowd here telling them lets let them see us and hear how strongly we feel about this and started leading some of the chants, so you can tell that they very much want these pictures out there to the world, a message of resistance, a message of anticapitalism, a message of antiglobalism here, bill. All right eamon, you and the staff be safe i know youve done this before will do. Reporter do what you need to do. Good job as always. Eamon javers. Thanks a lot, bill. The dow is setting lows for the session as are the other major averages, dow down 154 points and the s p down about 23. Yeah. Just looking up many so of the names in particular. We mentioned ge a moment ago thats clearly weighing on the dow. Contributing to that decline of 4 intel down 2 . Weve talked about some of the challenges as well to be had there. In the nasdaq tesla down 6 doesnt help and the s p l brands down 15 . And the russell is the big loser today, down 1. 4 . Shall we check in with sue herera back at headquarters for orins update. You got it, guys. Heres whats happening. Supporters of the venezuelan Government Armed with metal pipes and sticks stormed the congressional building and began attacking opposition lawmakers the violence injured several of those lawmakers. The maker of cliff bars is voluntarily recalling three flavors over allergy concerns. According to the fda, the bars, which are marketed to children in many cases, may include undeclared varieties of nuts the agency says it received a small number of complaints excessive heat in charleston sent that citys popular carriage horses back to the barn during the height of the tourist season new rules require tour operators to return the animals to their stables when there are four consecutive readings of 95 degrees or higher at every 15minute interval overseas, Queen Elizabeth was not horsing around when a hungry little pony tried to eat her flowers. The queen was visiting Sterling Castle in scotland when the shutland pony went in for a nibble, and you can see him doing it right there her Royal Highness quickly told him to she and go away and being the avid horse woman that she is, a lifelong lover of horses, she then gave him a little pat on the nose. Who can resist peonies and roses. There you have it. That was a little horse. Im a sucker for those ponies. Its a shutland pony. There you go. Thank you, sue. You got it, guys. See you later wish i had time. 22 minutes left in the trading session with the dow down 158 points well talk to one technician esout the warning sign that he se in the market right now coming up. We, the people, are tired of being surprised with extra monthly fees. We want hd. And every box and dvr. All included. Because we dont like surprises. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get 4 rooms with hd, dvr, and every box included for 25 a month. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back, stocks keep plunging lower today the dow down 161 points and the s p down 23 to just above 2,400, 2490 and here are the sectors of that index bottom right of the screen, telecom is leading the way lower down 2 . Real estate down nearly 2 Real Estate Investment trust, that is. So you can see Interest Rate sensitive parts of the market having a tougher slog. That said, utilities holding up a little bit better, bill, as we head into the close here. All right and as we do that, weve got 19, 18 minutes left in the trading session here joining us to talk about the market and where it goes from here, our friend carter wirth, fewer and fewer stocks were part of that rise and thats unsustainable and youre here with the weight of the evidence. It speaks to the participation rate, and like anything is it a broad advance or does it have cracks or issues and actually you were saying bring one chart that could show that and i think it does. Let me walk you through. Two panels, top and bottom and the top and bottom is the extra weighted index gap store is 8 billion and gets the same vote as microsoft at 220. And we know its been ascending as the actual s p has been ascending, but what we also know is that its relative performance all year long, really since the election, has been doing the opposite, so the index itself ascending, and the performance relative to the actual s p descending. This is where youre seeing fewer and fewer stocks participating in this. Thats right. And its really been quite precisely since the election, and the market has been propped up, because that implies something, but sustained by few marquee names, and what were seeing now is the market names are under some pressure. Now what. The presumption is that the marking names have more pressure, and that the laggards dont actually come to life. Weve seen a little bit of life in financials. Its short lived, actually energy tried and isnt, but the net of it is instead of the series of rotations you can have a general selling in equities. And these marquee names, the f. A. N. G. Stocks. People have been in those names and when you have a low economic environment and its defensive you want to be in idiosyncratic growth go you go to opens, youve been in cycleality. Are there cycles on the s p that youre watching that tells you maybe were getting to the point where you dont want to be in this market here . Well, for one thing, if you are looking at how long you can go in history without say a 5 dip and selloff collection, pullback, whatever you want to say. Weve gone about 160 sessions is, and thats one of the longer sessions going back to the 1920s, so, again, selloffs arent bad they are good. If they are bullish they want the thing to solve so it rests if its bearish you want it soft and either way a selloff is a good thing, not a bad thing. A warning sign. Very good. Thanks, carter. See you later. Kelly thank you, both. We have a market flash let send it over to our meg terrell. Whats happening, meg . Were checking out shares of alexion. The department of health and Human Services offices is investigating Alexion Pharmaceutical this is a headline coming out of bloomberg. We dont yet have more information. Weve reached out to the hhs oy g, it will not confirm or deny any accusations. Alexion, we havent heard back from them had. The company had a lot of news within the last six months to a year later this afternoon the cfo departing on the same day and they were investigating an internal investigation around sales practices about the big struggles alexion. Bloomberg reporting a couple months ago that the Brazilian Police has rated an alexion office in the sales practices probe and a lot going on with alexion, guys, down 3. 5 on the report about the hhs oig investigation. Well bring you more news when we get it. Thank you very much. Our meg terrell. Were seeing a selloff down the market s p down 23 and nasdaq down more than 1 right now with the 65 drop 65point drop, sorry, and the russell 2000 as you pointed out down 1. 5 . Percentagewise, a pretty steep decline. And two weeks after it made a bid to buy whole foods, amazon is looking for another deal with a big brand deal the tv satellite dish and etail giant are reportedly talking well talk about all of that coming up. slow jazz music fly me to the moon and let me play bell ring youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if there was a single site where you could find the right hotel for you at the best price . There is. Because tripadvisor now compares prices from over 200 booking sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. First word on june jobs and wages. Which sectors are likely to bring second half Momentum Team coverage on squawk box tomorrow at 8 30 a. M. Eastern on cnbc. Just moments ago, art cashin stopped by and told us the market on close orders actually show a bias to the buy side. The imbalance is 350 billion to the buy side which is interesting given the nature of todays trade, but well see if theres if there are enough sellers to meet that kind of buy pressure going into the close here with the dow down 154 points. A lot of the real estate parts of the market getting hit, retail as we mentioned one bright spot though that is been costco posting better than expected samestore sales since june and it includes gasoline fluctuation. They logged a growth of 6 for the month compared to expectations between 2 and 4 not good enough for them to stay in the green as we head into the close and down only half a percent and shares of yum china are posting lower than expected quarterly sales. The company says the drop in sales attributed to fewer customers ordering from pizza hut restaurants. Yum is down 14 , nearly 15 today. Wow. The nasdaq is also one of the biggest decliners in general its falling now to its lowest level since midmay with this 1 decline. Lets send it over to kate rogers for a look into the move here kate hey there, kelly. We just said were down around 1 the biggest drop since may 19th, will the the fourth down day out of the past five sessions so the biggest mover, one of them in the nasdaq 100 is tesla. Weve been talking about it all day. The stock down nearly 6 that on it getting just an acceptable rating for the model on that institute for Highway Safety the stock falling all day, right now down around 5. 72 . Two biotech names to the downside, gilad and biogreen, the i bibi, the nasdaq biotech and one bright spot here has been dish. That stock is one of the biggest gainers in the nasdaq 100. Its up under just 1 . That on reports of a potential partner is this the in the wireless space between dish and amazon that the news now not doing the same for amazon. The stock in the red just fractionally l. Back over to you guys. All right, kate, thanks very much kate rogers for us at the nasdaq today. Not seeing a whole lot of comeback yet right now as we head towards the close with the dow still down 157 points, and if anything moving a little bit lower, the russell down a full 1. 5 right now. And well have your countdown to closing bell next after the bell, its amazon and oosh network that may be ck considering up a new deal. A look at all the possibilities. Stay with us you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. R your heayour joints. Or your digestion. So why wouldn take someg for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. slow jazz music fly me to the moon and let me play bell ring we have a market flash right now. Lets go to seema mody what do you have for us, seema a report from dow jones says Warren Buffetts Berkshire Hathaway is near a deal to buy encore which is one of the nations largest electricity transmission utilities that report says a deal could be announced as soon as today and is worth more than 17. 5 billion. Encore has been up for sale since its Parent Company filed for bankruptcy Nextera Energy made a bid to buy them back in 2016 but they reject it had saying it wasnt in the Public Interest bill, back for you. Seema,thanks very much. Heading to the last five minutes. Coming back just a hair with the dow down 147 points. We can show you the todays trading pattern. Just a slow roll south going into midday here and at the at the lows were almost to the lows of the session right now, as a matter of fact, as we head towards the close the big lagard, weve already told you about, General Electric and jpmorgan lowering its price target on the industrial giant to 22 from 27, and and maintaining its underperform rate on that stock, and that has been one of the biggest laggards for the dow overall year to date, down about 16 verizon is the other one in that category oil, what an interesting day we had Inventory Data that came out that was very bullish. The drawdown was much greater than anticipated, and the market looked like it was going to take off, and we gained back some of the what we had lost recently from yesterday, but then late in the afternoon here, suddenly the market headed lower again, and were at 45. 29. Very interesting developments continue in the european markets here the tenyear bund now at 56. A year ago right now that was a negative yield this is the highest yield now we have seen going back to the beginning of 2016 as they continue to talk about pulling back on Monetary Policy and easy money policy there in europe, and our own tenyear yield is now at 2. 38 or thereabouts, 2. 36 you heard Rick Santelli saying he wouldnt be surprised to see 2. 41 look who ive got standing here just waiting for a bus here on the floor of the New York Stock Exchange, bob pisani along with arthur cash Ubs Financial Services what do you make of the reaction we had a pretty good rally on monday and now were giving it back. Looked like we would get started. Looked like it was new money for the new month, first day and then it wore out dead right on. Markets are concerned about a global inch up in yields and Interest Rates, and they are a little concerned nobody thinks the ecb is going to raise and the whole idea of tapering and whatever. You would have thought with the korean news there would be a flight to safety. Yes, yes. People would rush into bonds. Thats not happening. And they didnt do that the other key factor was oil, and as you pointed out inventories helped in the morning and then at 1 00 when the Energy Stocks started to fade, oil rolled over. It broke down below 46 it almost threatened to break 45, and then last minute we had 350 million to buy on the bell, and that helped us get off the bottom for the bell. Weve had this debate for many years for ten years weve had easy money policies, for ten years everyone has been saying eventually the dam is going to break and well concerned about it, but nobody is raising rates. The ecb certainly isnt. The bank of japan certainly isnt, and the fed will be very, very gradual. Just taken their foot off the accelerator. An tistation down the road. Ecb doesnt team sob very aggressive giving lip service. Yields do this is a version of the taper tantrum. Okay. Yes, i said that just the other day and somebody took issue with that, didnt think it was nearly as bad as taper tantrum was years ago. This is their version of that right now, you know. And its global its global. Lock what happened. After our taper tantrum a few years ago ben bernanke had to pull back on what he said, and after the taper tantrum of last week, mario draghi had to walk back what he said about reflation. And you saw in the minutes what looked like some second thoughts about the fed people, too, that inflation is not going where they want it to be. And the concern, as they always have been, they are concerned about the market response to the policy going forward. They are very concerned about that. And you can say, in fact, weve had Interest Rate groups, reits very higher the last couple of days and Home Builders under a bit of pressure and still looked as modest look at the volume, 600 million on the floor, well below normal at this point. Tomorrow morning the jobs number, i dont know i dont even know what the number is after the adp number, that were expecting right now. Do you think thats kind of a report that can still move a market right now probably not the headline number it will be wages. Yes. Wages will be key, and and the average workweek, how many hours worked thats almost as important as the number of people who get jobs. Were so smart anymore reading these reports, arent we its about time. Yeah, exactly thanks, guys see you later. We go out with a decline of 151 points on the industrial average and even bigger declines for the nasdaq and russell 2000. Stay tuned now for the second hour of closing bell with kelly evans and company. Ill see you tomorrow, kell. Thank you, bill, and welcome to closing bell, everybody im kelly evans. A selloff today on wall street t. Picked up, especially in the last hour has we head into the close. Lets take a look at where we finished the dow dropping about 155 points on the bell, bringing it back to 21,323 after closing above 21,500 the s p 500 for its part down nearly 1 today at 22. 5point drop to 2410 the nasdaq composite down around 1 some big decliners there, including under armour interestingly enough with about a 7 drop on the bell weighing there and the russell 2000, down about 1. 5 closed down about 1 1 3. Right on the bell for the nasdaq nasdaq lower for the fourth time in five sessions dell a lot weaker today, too, volatility jumping up a bit more its been three weeks since amazon announced its acquisition of whole foods is a partnership with dish network next were going to have more with the tech giants going into the wireless space and were monitoring the ongoing clashes between protesters and police in hamburg, germany thats tonight ahead of tomorrows g20 meeting, and well bring you the latest in there as we do get it. Our eamon javers is on the scene. Joining me is cnbcs Senior Market commentator Michael Santoli and the vice chair and Portfolio Manager at aerial investments and stephanie link from taa investments mike, like how you called them some tomorrowland stocks. Yes. A nice way to talk about the f. A. N. G. Names and also tesla which is part of the story, is teslas weakness magnifying whats happening with the rest of the market, or does it just is this just a contributor . I think its a contributor and i think maybe the velocity and the downside of tesla is kind of because nothing else has come along to pick up the slack. Therefore, its more noticeable. You know, i was joking that the f. A. N. G. Stocks and tesla, these very kind of Long Duration big great futuretype stocks have been trading along with bonds, right . As if they were like longterm bonds, and its actually some truth to that, because as yields go up, you know, you kind of have to discount this longfellow of cash flow that you expect from the companies at a lower rate and not to get too technical about it thats how they trade and the relationships, when bonds sell off the big Growth Stocks have sold off and there hasnt been anything else to step in and take up the slack fully and you have it back to a late may level. When Interest Rates go up, stephanie, all of a sudden the value of the future cash flows is diminished, people a little less excited about them. I think it goes back to growth versus value, right depends on the macro the macro data has been kind of sluggish, 2 , 2. 5 and in that kind of environment Growth Stocks tend to work. When we started to think that rates were starting to back up and today was sort of a good example with the german tenyear bond crossing 50 bips for the first time, rates started going up, financials rallied and energy rallied and then energy rolled and then the whole value trade rolled today a little bit. Im glad you mentioned energy and oil in particularly. Do you think that was kind of the fulcrum here. I absolutely do i kind of think were back to what energy does and depends on what the macro and how we feel about the macro. I dont think its its indicative of a recession in any way, but its, again, that kind of sluggish growth that we cant get out of our way in a very important commodity which i think it is you know, you talk about the slowdown i was surprised to see today an article about recession, not putting words in his mouth charlie, do you think its an environment where that kind of environment can persist for some time or do you also think that maybe some kind of correction is coming i hate to be everybody saying the same thing today, but i really do think that some of us have lived since 1981 and sign nothing but declining Interest Rates and when you have since 1981 Interest Rates going down every year that makes value stocks less relatively valuable and makes Growth Stocks with the future off ten years more valuable, and we could see reversal in that, and in fairness a lot of us have thought Interest Rates were going to go up, a year ago, two years ago, three years ago, but now, now we may be getting it and its going to change things. If youre saying, lets back up for a second. What greg was talking about was a recession which you would think would imply what weve seen in the past, you know, prices collapse, unemployment rises, Interest Rates decline, charlie, but now youre talking about Interest Rates going up. Is that because you think thats going to be some kind of trigger here or short move. Thats a great distinction that youre making, kelly. Im still pretty bushel on the economy. Weve got more money going into workers pockets the employment situation, Consumer Confidence is high and regulation is coming down despite bumps in washington so i feel pretty good about the economy. Companies are beating estimates. I think they are going to Beat Estimates in the Second Quarter, so i think were going to have a situation with a stronger economy, higher Interest Rates and that means certain stocks do better than others. Okay. Thats the other part of the story. Yeah. I think, look, greg was talking about the preconditions that you usually see in advance of a recession are very common markets. High asset values, low unemployment thats somewhere notice starting point of a recession, but it can be years before those conditions really get triggered into Something Like a recession its a matter of kind of, you know, have your guard up a little bit or at least be aware that were not early in a cycle. Now, thats fine i think you have to be careful 2 off the alltime highs in the s p 500 and bond yields up to not where they were a few months ago. We have to be careful about saying something dramatic has been shifted thats why yields are going up globally. Global growth is getting bert on the margin and the ecb is kind of i dont know what message they are giving us its certainly not as tight as they wrrgs right thats clear i dont know when they are going to be loosening, but the language is changing, and on the margin Interest Rates are backing up thats a very big move for the german bunds because that has implications for global rates, and i think that as a result, our rates clearly have bottom the. And its dragging us higher. Absolutely. I agree with that i do think in the back of investors minds though, it hasnt been such a tight linkage between every tick in growth and where yields go and where the Central Banks go yes, the preconditions are there. The growth is better and these guys want to get out. If they want to get out, they were seeing negative growth though, you know what im saying thats the whole premise of the discussion. But they want to get out so much that they are willing to overlook deflation targets being missed and they want to say, hey, look, lets get the markets back on their heel so if the markets have had a little freakout, that might not stop them that might be part of the goal maybe thats whats going. Trip them up a little bit let me ask you on a much more granular level about under armour down 7 . Its emblematic of this market, or, you know, retail, as we know, is not having a great session. L brands had a crummy quarter. Let me tell you about in consumer land. Costco is down 11 this morning, before it opens, right down 11 from its high after the amazon news. They post a 6 comp, an astounding number, 4 traffic numbers, and the stock ends down it opens up, and it was sold every tick that tells me people just dont want to own Retail Consumer in general. L brands, l brands is already down huge, too, and and thats before they reported a disappointing comp, and that got hit with 13 , 14 . Are you a buyer then . Do you look at the gaps and say i think its very, very hard. Im an owner of costco im trimming some on the margin are. I still like it very much long term i just think youre in the crosshairs right now in consumer im trying to pick out some names. I picked out tjx the other day. Right. New position for me. But im not going in full right now. As much as i want to believe that these are values. It hasnt paid its like the Energy Stocks. Every time you try to bottom tick them. You get hit. You know, be patient. Charlie, what about you, charlie, when it comes to the beaten down names in the market today . Yeah, i mean, again, what mike said is true. Some of these names are simply off very high levels, and so we would still think that 20 plus pe stocks still have room to come down. Our broad call would be value stocks which have underperformed for seven, eight years now versus growth. They are going to have their day in the sun, and its going to be because inflation is going to come back a little bit that tends to help value stocks which tend to have those hard assets, so we do think that growth is going to be challenged and stock like under armour, this is not the time to get it. All right lets bring in dominic chu investing has been gaining momentum doubling market shares since the financial crisis how healthy is this for the overall market its interesting because im hearing talk on stephanie links side about individual stocks that played, things that she like im also hearing charlie dog about some of the sectors, thematic value versus growth elements that the calls into question whether or not investors really are playing in the stock market individually or through funds and etfs that invest more thematically those days the etf and broad index investing picture a bigger part of the overall pilot. Take a look at this, according to bank of america, merrill lynch, if you look at the stocks, where vanguard is one of the big Investor Funds out there in the world, the number of stocks that they have a huge position in. Today in current markets, about 491 members of the s p 500 count vanguard as a fiveplus percent shareholder. Thats how many people are investing in index funds in how much money they are putting to work in buying some of the Biggest Companies in america remember, back in 2010, it was about less than a quarter of stocks in the s p 500 where vanguard had a 5 stake. Take a look at some of the other pictures here in terms of market cap overall. With eve gotten to a point where back in 2010 vanguard held a 3. 3 stake in terms of the overall market cap of the s p 500. Today its more than double that, almost 7 of the entire market cap is owned by vanguard just to give you another indication of how big the index funds are and vanguard is one of them, by the way take a look at some of the client flows, bank of america, Merrill Lynchs own clients in aggregate and what they have done with regard to single stock trading volumes versus etftrading volsz going all the way back to 08. The red line is volumes for purchases of etfs, that blue line here for single stocks. They are going in opposite directions etfs are winning the day right now. This is the theme that people are going to be talking about. Whether or not this kind of herd mentality investing ultimately ends poorly for some of those investors out there, guys. Back over to you. Dom, in fact, it reminds me of the oped in the journal a couple weeks back, had a couple of professors from the university of chicago law school, they were urging to take a step back from governance and even abstaining all together and this, of course, after some of them had a hard time whether to back activist campaigns or not and todays vanguards ceo bill mcnabb was responding in had a letter to the journal when he said they care about Good Governance more than anyone else, the ultimate longterm investors before they own stocks forever. Therefore, our voice on governance is the most important asset we have in terms of protecting client interests. Does this blog of active funds stand in the way of trying to push for better performance, or should their voices be herd as well they obviously have the right to vote if they want, but just as they abstain from valuing companies, they generally abstain from taking positions on governance they are not helpful to those of us who try to get one vote one share, for example, and get do away with dual class or have a management change. They are not set up to be helpful in that way. They own thousands of stocks, so they cant focus on one situation. In general i know they have the right to vote, but we would actually prefer we agree with the professors and would like them to abstain from voting. Dom, that would be a huge deal if that happens because youre talking about the biggest players in the markets and the representation of, you know, loss of money on of individual investors kind of standing to the sidelines and letting the opinions of activists or whomever, people who have, you know, owned single positions in the stock come forward. Sure, and charles brings up a great point about this if youre an active manager who is looking to focus on the companies that youre investing in, you would like to think that you know them better, you know whats going on and you Pay Attention to the shareholder proxy Advisory Firms out there there are still a number of firms out there, active or otherwise, that kind of have this mentality or belief, kelly, guys, that overall you kind of vote with management and the board. Right. Unless theres some prevailing, pervasive fraud or Something Like that going on typically those types of investors stick with the management and stick with the board so youve got a huge debate about whether or not they should be acting in that way for sure. Yeah. Just a quick counterpoint to that point of view though. The index funds can say, look, we dont have a choice of not buying a stock we think has bad governance we own the index youre an active manager walk away. You dont actually have to be involved, and were fiduciaries. Were not going to surrender our role as fiduciaries even though we dont go every single vote by vote. In which case i hope they beef up their role in Corporate Governance dominic, thank you, appreciate it stephanie and charlie, we appreciate it. Lets go to eamon javers in hamburg where police and protesters have been clashing at the site of the g20 meeting eamon, whats the latest reporter hi, kelly, those clashes have been intense at times here in hamburg but for right now here things have calmed down considerably the protest is more or less over in this area the anticapitalists have gone some of the capitalists have come out, selling beers to people in the street people out here picking up cans for recycling to make a little bit of money, so things have cooled down considerably here. What were told though is that the main body of the protest has broken up, but right behind me and to the left there is a group of people who set fire to some trash bins and the police have moved in with Water Cannons to try to put the fires out what were also told is the protesters have broken up into smaller groups and dispersed throughout the city. My sense is they have gone in this direction, the bar district here in hamburg. A lot of bars and night clubs right here hand thats absorbed a lot of action right now. Well see if things heat up again later on in the evening as it gets darker out here and after people have had a chance to rest for a little while, but for right now very calm here in the streets of hamburg kelly . Do you expect it to change tomorrow, you know, once the once everybody is on site . You mentioned youre not exactly where the meetings are going to be held, but i would imagine part of the idea is to steal, you know, whatever air time is being given to the g20 summit itself, to be able to, you know, interrupt and impede and come take the attention from that. Reporter yeah, absolutely, and these protest remembers very media savvy. They have created floats they have created big huge visuals. They are firing off smoke bombs. We heard earlier just around the corner a lot of either flash bangs or large firecrackers going off, all of that to generate noise, confusion, excitement and attract some of the cameras as well. All of that have is happening throughout the afternoon here. We expect more of that tomorrow. Remember, the main part of the g20 doesnt even start until tomorrow, so ultimately ultimately its going to be ultimately its going to be tomorrow whereas its going to be the main part of the protest here as well so i think you can expect with the World Leaders that are here youre going to see a certain amount of activity throughout the course of the day tomorrow as well, kelly. Eamon, live, somewhere behind you, were looking at some of live pictures what have look like Water Cannons being shot at protesters, getting a little violent there a moment ago police trying to restrain them what is the main message of this group . Yeah. What are they trying to get out there, antitrump oror what yeah. This is an anticapitalist prost, antig20 and antiglobalization and theres certainly a big antitrump element to it. We saw people with signs saying capitalism kills and the anarchist banners being flown. We saw punk kids in the 80s in the United States flying, thats a big symbol here at the protest. Youve got a mixture of different groups communists flying the oldhamer and sickle here as well. Generally a group of left wing groups led by hard core of anarchists wearing all black and refusing to take off their masks for authorities. Thats been a big point of contention throughout the afternoon. All very calm and throughout the afternoon, despite the visuals of the Water Cannons and things, its been relatively peaceful. A lot of shouting, a lot of noise, a lot of running, but not a lot of violence, like you might have seen in protests in years past. Eamon, i remember when we were covering the u. S. Inauguration and even just blocks away from that parade route there was quite a bit happening. In this case, again, images from a moment ago showed its getting a little contentious with the water connones and some protesters fighting with police. Yeah. But some of the people here are seeing the Water Cannons fairly common practice by the hamburg police. And they are running place to place. Reporter yeah. I cant see the images that youre looking at right now, kelly, but i can tell you that earlier today we saw about 500 Police Officers gather here behind me and they were moving in a large formation and at some point one of the officers called for them to charge and they literally started running, charging forward into the crowd. We heard a lot of complaints from protesters and people here watching the protests, that the Police Actually started the scuffling that happened here earlier this afternoon but charging into a group of anarchists, protesters who are simply trying to demonstrate in the streets, so some of the onlookers telling us that they felt that the Police Actually were the instigators in this case right here, but as you know from being in washington during those protests and some of the carburning that we saw there, these things happen in pockets around the city. Its not the entire city all going up all at one time, and it kind of moves around from block to block so right now this block is relatively calm elsewhere throughout the city in the pictures youre looking at right now,maybe not so much. Eamon, obviously the authorities were prepared for something of this sort clearly the police were as well. Is there any sense in which either the crowds are bigger or better or worse behaved than maybe it was anticipated at prior g20 gatherings . Yeah, no, i know they have been preparing for a significant demonstrations here. They are talking about 100,000 protesters coming to hamburg for this weve seen people being bussed in from all over the country so we know its not just local hamburg folks who are here at the protests, but i dont think this is more out of control than the police have been planning for. I think the police were well aware of the level of protests that the g20 and a lot of these Global Economic organizations can attract, particularly from antiglobalists, protesters particularly in the era of trump, so this reminds me a lot of cleveland and philadelphia and washington, d. C. And the riots that we saw there throughout the u. S. Political campaign and the inauguration last year. This feels a little bit like that though the nokes say the big difference in germany you dont have to worry about people carrying guns on the streets the protesters here are not armed as weve seen in the United States on occasion. Here they dont carry guns in the streets though the firecrackers can be a little offputting when they go off behind you more confrontation between the police and protesters happening on the street just a lot of pushing and shoving as we continue to watch this all develop to see which way it goes. If Angela Merkel, eamon no, fan of President Trumps were to come out and say to people, look, youve got to calm down, would she do Something Like that would she be able to have kind of influence reporter well, the political pressure on Angela Merkel is fascinating, right, because she wants tonight host of a successful world event but theres domestic political pressure on here here to stand up to donald trump, to confront him particularly on climate and trade and the issue of immigration as well. A lot of her Political Base doesnt want her necessarily to just sort of meekly welcome donald trump to town they would like some sort of confrontation with him, but at the same time she has to deal with the folks in the street i think, at the president ial federal level, most politicians would leave it to local authorities and local police to handle this, not necessarily put out any specific message acknowledging it because that simply raiseses it to a higher level so i would think wed be unlikely to see Angela Merkel talking directly to the protesters here, but one of the questions going into this has very much been now that shes within three months or so of a federal election here in germany, shes got a political opponent to be wary of here. One of the questions has been will she confront donald trump, and if she does in, what way will she do it and on what issues so were keeping an eye on that politically as well, but in terms of the protesters, i think she would be unlikely to deal with this directly herself theres a big wellorganized police force in town we saw them staging throughout the city yesterday in groups of 50 and 100, preprepared the full riot gear, helmet, sticks, shields. Yeah. Youve seen the Water Cannons being deployed they have people movers. These guys seem to know what they are doing here in hamburg well, were seeing police a moment ago kind of shoving out of the way, clearly clearing some sort of area or square, trying to get the protesters to burst again and moving around pretty roughly there, so it looks like all the tensions are going to remain. Eamon, well check back in with you in just a little bit and see if things worsen as it goes longer into the evening. For now, thank you, eamon. Our eamon javers is in the middle of all this action youre seeing in hamburg, germany, on the eve of the g20 summit meantime, a big reversal in the minimum wage about to happen in a major u. S. City. And two weeks since amazon made its 13 billion food for whole foods. The etailer is not resting on its laurels. Reports that its lining up a wideranging partnership with dish network and we want to hear from you contact show on twitter, facebook or send us an email closingbell nbcunii. Com. Youre watching cnbc, first in business worldwide is this a phone . Or a little internet machine . [ phone ringing ] hi mom. It makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Call or go to xfinitymobile. Com introducing Xfinity Mobile. A new kind of network designed to save you money. Welcome back amazon is taking over the world. Thats what it seems like based on the action weve seen from the company. Most recently its been held by whole foods and now theres been talks between jeff bezos and dish networks chief to enter the wireless building. Welcome to you both. Amal, ill start with you, because this is a juicy story hereby and how much of a partnership are we talking about . You know, its unclear how its going to play out theres a lot of different options here for the companies i think the most likely option is some sort of potential investment by amazon in a new Wireless Network that dish would build and amazon would get some sort of preferential terms out of that have to offer service to its prime subscribers and then to use the network for things that sound pretty extim like commanding and controlling its drone one day or even helping to make the Alexa Service work better these are very early conversations. They can go a number of Different Directions and it can be structureded differently. A fullon merger was pretty unlikely if anything, it would be an initial investment by amazon. Harry how would any kind of a hock woop with these companies play into what otherwise is going on in telecom and media obviously dish has been known to have all the valuiac spectrum with it having to make valuable use out of it. How might it change things in terms of various other partnerships and competitors i think the way you look at this as a media person and its wonderful is theres a new girl in your town, or touse new economic terms a new bidder, that amazon is interested in this is i think extremely logical. Consumer economics tells you a couple of thing. One, you need to be close to the customer and amazon has over 50 of tv households now in prime so they have got plenty of customers to be close to they are a national entity, and then the second thing in the Media Telecommunications world, the the companies that have done the best, facebook and google, have embraced mobility, so here is amazon basically following these two rules. Now the question is how much is the price of poker, and charlie is a world class poker player. He spent i think in the neighborhood of 21 billion for spec trumpet our own internal value is 45 billion on this, and charlie knows that hes sitting on a pot of gold its very, ves flexible and whats going to happen is anyones guess and, you know, i think if youre looking at a negotiation between bezos and charlie, i would rather have charlies side of the equation hes really a very, very clever guy and hes playing with his own chips. He has Significant Interest and control in this organization. Let me just ask you this. A good situation for dish. Its fascinating. Amal, if this does progress where does it leave the other Telecom Players and where might it leave some of amazons rivals who might look at this as a competitive advantage and say what if we need to do the same thing . I dont think they have the scale. Larry, hang on a second amol, go ahead. Sure. Its an interesting question about the other Tech Companies that might, interested in doing Something Like this. Theres been rumors for years that google would want to get into wireless and look the Regulatory Environment for Tech Companies could change, for Internet Companies that provide content or media over networks if Net Neutrality rules are rolled back and this is part of what charlie is betting on is that those companies it might look better to be in the networking miss to some degree if the rules on Network Providers get rolled back and make they can extract tolls from the amazons and goingles of the world and that can be a factor in wanting to do Something Like this. I hate to break this off early, gentlemen its great stuff well pick it it up at the future point appreciate you joining us. We just have breaking news on qualcomm to get to with our skwn ft. Its a double pronged legal attack that callcom is launching at apple the latest not a legal saga between the two companies. Apple refused to pay license fees to qualcomm recently and that hit qualcomm stock. Saying they are filing a complaint with the International Trade commission, a suit for the Southern District of california alleging that apple sin fringing six patents. They are going to ask the itc to bar the importation of certain iphones, not all iphones but certain iphones. The time frame on this, they expect it sometime in august and sometime next year to probably conclude, not to expect the iphone that we see launched at the end of this year i spoke earlier today with Don Rosenberg who is executive Vice President and general counsel at qualcomm heres a quote from him on the screen talking about the patents that are at issue here he says qualcomms inventions are at the heart of every iphone and extend well beyond modem technologies these patents specifically have to do with battery management, and and inside of iphones he says ipads 2 when i smoke to him and how to maintain performance while conserving the battery. Apple has said, qualcomm, you have great modem technologies but youre charging too much trying to get a percentage of the entire price of the ifoam. You ought to be charging for the Modem Technology trying to narrowlycraft the technology saying this isnt about the podium by the way, these are not standard essential patents that were asserting. You cant claim were trying to shut down and use our market power to assert the specific claims these are things that arent standard essential and dont just have to do with the modem and they are technologies, apple, that you are using. Thats qualcomms side of it of course, weve not had an opportunity to get apples side of that so well be reaching out for that as well, but qualcomm filing with the itc to stop the impovertiation of certain iphones only twice this is only the second time in the past ten years that qualcomm has don Something Like that and that was settled before it ever got decided officially, kell el. Im looking at the apple share price. And we see qualcomm higher. I dont know the markets first read on this is going to be that you know, this hardline effort by qualcomm is going to push them closer to a settlement something that shestopped short. Iphones or whatever the terms that are ultimately reached. Going to be somewhere in between what apple wants and qualcomm. Im also wondering for qualcomm, is this an effort to refocus back away from the lawsuits that its been dealing with i think from National Governments and a way to reframe the kind of argument there qualcomm says its apple and a few others including samsung thats pushed the National Governments to bring the suits so this really is a battle of the titans when it comes to tech from call come, they are trying to maintain this Business Model where they get a cut of a sale of pretty much every smartphone out there. They say they are entitled to it the biggest maker of premium smartphones says youre taking too large of a cut of technology that we believe is unique for us and we deserve a higher share of that profit so this is certainly a battle over profits, kelly all right john, thank you. Big news this afternoon. Our john fortt bringing it to you out of san francisco. Going to add anything i think the market is wondering if it will nudge things slightly in their favor they want a cut of every iphone certainly not a huge percentage of the list price. Can you imagine. I think the market feels like theres room there moving qualcomms way, a marriage a decade in the making qvc walking down the merger aisle. Coming up, why it took so long to seal the deal and well go back to hamburg germany for the latest on the g20 protests. Well preview President Trumps meeting with russian leader Vladimir Putin form. Well be right back. Welcome back its now about 10 30 p. M. Local time in hamburg, germany on the eve of the g20 meeting of World Leaders this tomorrow. Theres been plenty of drama there already throughout the evening and into the twilight hours. Protests between police and the protesters and clashes, i should say, have been picking up. Youre eamon javers is there with the latest. Eamon . Reporter yeah, hi, kelly things have calmed down here where we are over by the harbor. We can still hear the Police Helicopters providing security overhead and we know that protesters have been clashing with the police throughout the afternoon and into the evening its now dark here it stays light relatively late its fully dark here in hamburg and well see what darkness brings protesters can more around a little more efficiently and a little more fired up in the nighttime. Well see if thats the case we know authorities have been planning for this for a long time for the past several weeks and months theres been preprotests here in hamburg, a group called smash g20 has been active, creating some damage over the past couple of weeks and authorities here have pumped in enormous security apparatus, including all sorts of razor wires, barricades and even built a Detention Center that will hold those who are detained right now things are much calmer here and in fact relatively deserted we saw big Police Vehicles with the Water Cannons on them that are parked down here they have now moved away, whether they are done for the night or moving to another position, i couldnt tell you, and things here a lot calmer and cooler than they were earlier today. Kelly . Thank you, eamon javers, there in hamburg check back with you in a bit. Time for a cnbc news update lets go back to sue herera at headquarters. Heres whats happening american tennis player and wimbledon wild card player maticsands collapsed in pain. She stumbled and fell. Twitters account for wimbledon said that she suffered an acute knee injury. She was taken to a local hospital she was laying on the court for a full 25 minutes. Parts of Hanscom Air Force base near boston had to be evacuated for several hours after a truck nearby tested positive for potentially explosive material bomb squad eventually cleared the vehicle, but contents have been sent for further testing. And want to get guns off the street heres a way to do that. Authorities in brazil used a steam roller to plow over thousands of guns in rio part of an ongoing operation by that countrys military to destroy 5,000 firearms gamblers of a different kind showed up at the closed down taj mahal. During the casinos Liquidation Sale people walked away with almost anything they could get their hands on including chairs, lamps and, of course, poker tables you are up to date thats the news update kelly, back to you i think its going to be a Hard Rock Hotel and casino amazing what they were selling off everything sue, thanks very much. Well see you later. You got it. The prices are as high as the new york skyline thats the only way to describe the average sales price of apartments and condos in this city well tell you how high is high and how much higher prices may go what if we pull Customer Insights from the data in real time . Go wait, our data center and our clouds cant connect . Michael, can we get this data to. . Look at me. Look at me. Look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Welcome back we had a broad selloff today on wall street, the dow dropping 158 points at the close putting at 23,120. Nasdaq down 1 and the russell 2000 is the worst performer, down 19 points today time now for todays fast take first one of is another uturn on the minimum wage. Instead of seeing its minimum wage go up to 11 in january, st. Louis may see it fall to 7. 70 and the current 10 minimum wage has only been in effect since may. Starting to realize, local increases above the minimum wage well above the surrounding areas dont work as well and its easy to move things around. Something similar in seattle. Baltimore, too. Said we cant afford it. Well see what happens new york has its continued im sure de blasio is going to keep that going. Qvc and the Home Shopping network are merging. Only a 2. 1 billion deal for a company with a combined 14 billion in annual sales maybe a surprise that its 14 billion, but its interesting. Kind of easy to snark and say, wow, this is like yesterdays dominant duopoly in Home Shopping on the other hand, if you think about it, they are direct to consumer omni channel. They are ahead of their time. Retailers exactly. You talk about mobile is a big Sales Channel for qvc, and i guess i also didnt realize qvc owns zhu ulily and Ballard Designs is owned by hsn. I cant get those commercials to stop coming from the house. Malone is a savvy, savvy guy. It seemed ridiculous yesterday but because hes doing it its a stroke of genius. Thats true up next, finally, facebook is at it again the verge says it will launch a group video app to resemble house party which if you havent heard of ive read about but cant use it made a lot of inroads with younger usersins particular does it mean the house party is over never have to know first. Do your daughters use it . No, at least, you know. That youre aware of. That wouldnt be the first time. Yeah. Facebook is obviously kind of got that amazon role in social media, but i dont know that every single one of this place is the first mover, so, you know, the joke is they can kill whoever comes along. I think if they are smart enough to copy the really innovative and catchy app, then thats probably good enough for most of us. If they decide not to the buy it and copy. We can do it ourselves. Not that hard. New York Real Estate is reaching eyepopping prices, getting used to that up here why the demand for luxury apartments in manhattan shows no lbeig bk. Lowing down. Wel rhtac i put everything into my business. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What will you create with your points . The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade welcome back the real estate sector having its worst day of the year, down nearly 2 , but new york city which is known for its skyscrapers and skyhigh prices is showing no signs ref treating robert frank joins us now with the new manhattan real estate record that i really dont want to hear about. Robert reporter well, kelly, if you own you want to hear about it, but if you havent bought yet you dont want to hear about it because youll have to keep on waiting. It was a surprisingly strong Second Quarter the average sale price hitting an alltime record it will now cost you 2. 19 million on average to buy an apartment in new york city in manhattan. Median sales also up total sales volume up 15 . A lot of this is driven by condos the average condo price now topping 3 million, and new construction condos, those are the giant glass towers we see all around town, those average sale prices were 4. 7 million for an apartment now, this is a big turnaround because last year really starting in the second half. We saw weakness in manhattan, particularly at the high end and people tell mow that even see the strongest part of the market be the entry level in manhattan which they say is 1 million for an apartment which is the 5 million plus range will stillwet maybe not as some expected and a lot of this is driven by some pent up demand we saw. People holding off buying before the election and now coming back on the market particularly in the spring to finally by, guys. Back to you. Thank you diane is here mpl ifls really cheering the price declines last year like crash, this is getting crazy, its got to come down i think were going to see sustained prices for a long time theres pent up demand, buyers out there. The markets good. I think even jpmorgan showing in their construction loan. Shows me longterm theyre see ing a positive market. Thats great news. Robert mentioned that new construction is a very hot area. So these new apartments skewed towards the higher end, these condos, they seem to be pulling up the average price what about existing Housing Stock sns will we see mark ups or is it more steady its steady, by bu i think its leveling off because it got a little heat ed in 15 and this then we had some quiet this has through 16. Had to do with the election. But then, the sellers got real the serious, strong sellers wanted to sell and the prices got real and its amazing to me with all the new construction weve had, were able to absorb that with the dif were see ng the foreign buyer. Who is buying this property . Its the foreign buyers, but its really fueled by new yorker, americans, locals. And its not that we have tens of thousands of new construction when we see these towers, most of them are floor throughs you see a 90 story 90 units so were talking hundreds into maybe low thousands. So, we will absorb them. You cant miss it everywhere you go in the city, 157, just sticking up there. Thank you so much. Why are ther me, are youe ce du sh sew performers on the flo of the New York Stock Exchange you can find out what theyre up to after this quick break. Ty ev. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. slow jazz music fly me to the moon and let me play bell ring is that two people or one . Grass hop holy moly circumstance due soleil announcing this will acquire blue man hopes expanding beyond the circus acts. This is on the floor of the New York Stock Exchange right behind me were here with the president of circumstan circumstance thank you guys both for being here thank you, kelly. So, danielle, the Blue Man Group, why them . Because you know, its a strategy of diversification for them now, we have the opportunity to have a new brand that we are going to bring to its full potential around the world because its an amazing marketing and distribution machine around the world and blue men deserve the support of an organization like ours to continue to grow around the world. Im curious do you get any benefits of scale from acquiring Entertainment Companies . Are there synergies to be b gain snd. Totally its a big, big shift and it has been supported by Blue Man Group. What it means is that now, were no longer only a circus company, but now, were going to become a Global Leader of entertainment and thats the goal we are pursuine in pursuing blue man has expanded from base here, but how big is it and how big do you expect it to get. We have a permanent show here in new york, one this chicago, vegas, orlando and ber lip lynn, which is great so were adding to the 20 shows. So were now up to 28 shows around the world is it important for you guys to be an independent Company Maybe a Public Company or do you think fitting as part of a larger a wmeimg type of place where theyre looking to build out content. Would that be an atrtractive partner . Whats interesting for us is that we are one of the leader in the Live Entertainment around the world. Now, by bringing some new type of content, we want to become the Global Leader of Live Entertainment. You do. Not as part of another company no, we want to and we have full support of tpg, an amazing Controlling Shareholder and the support of a minority shareholder that is going to bring cirque in china in a big way. I heard Blue Man Group is just the first step in a strategy to be more aquiztive in the future why is that model important to you and you have anything to share in terms of whos on your list right now first and foremost, we are going to open this coming november, the nfl experience on times square and its also going to be an amazing illustration on how were going to diversify the content. Nfl yes, yes. What do the guys behind us have to do with nfl. Nothing to do with nfl, but our Creative Team is working an amazing experience on times square where the big football fan will have the tount to become a player of Football Team for one day. Is this a Virtual Reality thing . Or be having contact its a lot of new technology that were going to bring. We have invested a lot of research and development and thats our next breakthrough here in new york city. And by the way, leslie, how important do you think this is this is an important step for tpg. Theyve puchlsed cirque about two years ago, so this is part of their expanding entertainment platform theyve been big into making a bet on entertainment, which is big. Moving more toward dingital as a form of entertainment. Weve been talking daily about netflix shares and amazon all these companies trying to get into the Digital Content space well, tpg is doing the opposite. When you talk about music, that seems to be where the growth is is off lot of these efforts you can buy the ticket companies to kind of have links with musical acts and other Live Entertainment. We did a beatles and Michael Jackson show now, we have this amazing pobty to grow at a rapid pace. Congratlaces. How about a round of applause for the guys behind me thank you, everybody, for joining us here on closing bell. Fast money is next mufast money starts now. Your traders are tonight on the fast, the worst performing dow stocks this year could be the best deals in the market for one big reason plus, the ipo market is making a comeback this year for the hottest cities in the market could be stairing investors away and late e tesla entering a bear market jean muster says its model 3 is about to