Transcripts For CNBC Closing Bell 20170712

Course, and also snapchat. Highlights from that interview and i did a little golfing, yes, golfing, nfl great joe montana, and he said i was standing on the wrong he said i was standing on the wrong side of the ball. Yes, we were trying to get it in the clowns mouth. Are you lefty how long have we been working together anyway, well see who won that putting contest. Who you betting there on there i know who my money is on well see, thats coming up we begin in washington, Janet Yellens testimony wrapped up a couple hours ago before the House Financial Services committee, we are joined with some of the highlights kelly, this could be yellens last two days of testimony on the hill her term ends early next year. And politico reporting that nec director gary cone is the front runner for her job when pressed by lawmakers on this question, yellen trying to deflect them. I absolutely intend to serve out my term. Im very focussed on trying to achieve our congressionally mandated objectives, and i really havent had to give further thought at this point to this question. You know, whoever is sitting in that seat early next year will have to grapple with a question of inflation and why its remained so low, even though the labor market has strengthened yel nl said today she believes these factors are temporary and that the fed will be able to get in one more rate hike this year. Most of my colleagues were at least the median anticipated that one further increase in the federal funds rate would likely be appropriate this year, but as it say, we constantly watch the economy, the evolution of inflation in the labor market, and well make decisions on the basis of our evaluation of that information. Yellen also defended the feds process for setting Monetary Policy and pushed back against calls that follow strict rules, guys, also said that Monetary Policy should be free from politics. Back over to you all right i didnt goat hear all of the testimony, but did i hear her at one point say that this may well have been her last appearance before the House Financial Services committee she did say that. She did say that this could be her last Humphrey Hawkins. Wow that takes us back Humphrey Hawkins. Thats true, i think its technically renamed, seeing gary cone itll always be the Humphrey Hawkins testimony. Thanks a lot Humphrey Hawkins in our hearts. Yes, indeed lets get to our Closing Bell Exchange today, lots to talk about including todays testimony, thats why weve included Steve Leishman to the panel today. Michael farr from farr miller in washington is with us, keith bliss is at post nine, and Rick Santelli checks in from chicago. Steve, im starting with you. The market off to the races first thing this morning when we got the text revealed of what she was saying should the market have been surprised that we got dubbish comments from janet yellen you know, shes been the one kind of spear heading this very gradual return to normalcy so the idea that it may be not quite as fast as some of the market maybe earlier believed, she echoed comments made by brainard the idea that there isnt far to go when it comes to raising rates. And the idea that because of concerns about inflation, maybe that next rate hike is a bit of a 50 50 proposition. In fact the probability for the next rate hike or rate hike in december has fallen below 50 at one point today was down at 39, it was 41 , just before we came on air here. So, that probabilitys been knocked out. So that helps a bit. And you have to remember, bill the context here, the context is that there does not appear to be a whole lot of help coming from the fiscal side. And you notice that there werent a lot of questions about fiscal policy proposals, which is what you normally have when theres something hot and heavy on the mind of congress to adopt. Didnt sound like a whole lot of momentum listening to those congressman for the fiscal side. Yeah keith bliss, the inflation stuff seems front and center for the market here yellen did not describe the recent slowdown as being quote unquote idiosyncratic, maybe just partly the result of a few unusual reductions in certain price categories so is this response warranted here when you look at the broader indexes, the larger index which is what we focus on. It probably sl because they will benefit from the rate environment maintaining its status quo, if not being dubbish. I think what chair yellen said was basically the goldy locks testimony where she gave salve to anybody that was thinking the economy was not tracking well or they were going to raise rates quicker than theyve said or suddenly unleash all the bonds on to the market, but i think when it comes to inflation, one of the things we need to keep in mind is that the small caps are the ones that will get hurt here and youve seen that reflected in some of the surveys of Small Businesses they have zero Pricing Power at this point in time and until we get some kind of movement on the fiscal side of things as steve was just eluding to, theyre not going to see any real growth in the business. And thatll have the affect of anchoring the market, at least moving it sideways run up here is welcome based on fed chair yellens testimony it wont be longlived until we get the fiscal side straightened out and stimulants with measures on that side im paraphrasing her, she said something to the affect that maybe the new normal does require low Interest Rates right now. Do you think that this economy could withstand much higher rates at this point in time . When they show a fed rate thats neutral with a three handle i remember being on this show saying thats 50 to 75 basis points higher than the ten year. I dont think anybody sees that in the crystal ball. And i think its official. Listen we dont have inflation because we dont have the growth we dont have the growth because we dont have the productivity all of that gives us no velocity on money and about price tags the power of attorney during the credit crisis was grabbed by ben bernanke and the Federal Reserve. What they did is make one trade for the whole world. They decided to have a shallower depression recession and the price tag for that is the type of growth and the new normal we now have there is no going back anymore just my opinion. Michael, let me ask you about the personnel changes here at the fed. First of all, corals going to the board, perhaps leading more of a deregulatory vent and also, based on politicos reporting, maybe gary cone taking yellens seat next year what does that add up to for you . It looks like clearly a lower Regulatory Environment and that would probably affect Bank Reserves and lower them a little bit and make the operating environment for the banks less stringent. Im not sure that all of the proposals that were hearing perhaps are all that healthy some of them kind of strike me as dangerous certainly removing some of the regulation does make sense, but i think it levers things up. I didnt take from the chairs testimony today i didnt think she was as strong about the dovish point i would still be surprised if they dont raise this year theyve moved on that path and i think you could certainly see them begin the rolloff i think she wants to do before the next chairman comes in i think she wants to start that ball rolling. And steve, another context we should be mindful of is things that marios been saying recently, you know, how do we reconcile what hes thinking with what she said today well, its all coming together i mean, look, hes quite a bit behind where the fed is in terms of where he is on the road, but hes headed in the same direction, and thats been a big part if you look at the last couple of weeks of whats happening to Interest Rates and brainard made note yesterday both japan and europe, europe more so than japan are talking about beginning to reduce their stimulus United States was probably, i dont know, four or five, six years ahead of where europe ended up in terms of quantitative easing and many believe that the better results here in the United States relative to europe are responsible for that that europe didnt get around until 2015 after the fed had been doing it for a number of years already. And thats going to help keep down yields as we move forward, but also overall, over time, its going to mean higher yields as they first end and then perhaps begin to reverse their policies heath, is there anything to add about canadas rate hike this morning too theyre one of the very few major Central Banks to be raising rates here well, i think it speaks to whats going on around the globe and what may be happening near north america. I want to get back to the economic picture and how it would play into the equity prices for me connect the dots the following, we are starting to see signs of capital expenditures, cap x, youre starting to see hiring equal to serviceproducing sector were seeing tightening there. As long as you have cap x, compromise will then go out and drive up productivity, then youll get growth in the market, really if you want to accelerate, get those tax cuts put in place and get them put in place soon and thatll set the unleash every economic beast out there and then you will have the fed really starting to look at a more normal Interest Rate policy moving forward fast per. Keith, hang on, its michael, what happens when that agenda for those tax cuts and that fiscal reform doesnt happen how does the market react then well, that is the real risk and thats, thats the point i was about to get to, michael, if you dont get those things put in place quicker, ive been saying for a long time that its on a knifes edge. And its been waiting, patient, and moving up and moving sideways if we dont get those things done, at least movement in the right direction im not sure i agree. Keith, i would defer to michael and you on the issue of equities, i will point out the market sensitivity to yellens dovishness, were back, unfortunately, in this world where the fed is the only game in town right now. And michael, i dont think the market i think the market is very smart about this. I think they see whats happening. That the agenda is not moving forward, and yet theyre keeping up these equity levels despite all of that. So i think as long as they had a nonaggressive fed, earnings on top of that and 2 growth, i guess theres a case here that the market will be just fine everything seems to be stable i mean, and when you get stability, at least out of a Federal Reserve and Monetary Policy, markets know what to do and theyre not surprised. Its a positive. Just dont call it the new normal thats for sure. Thank you, guys, appreciate all of your thoughts on todays market action. Appreciate it very much. So, happy day after prime day. Boxing day. It is boxing day this day, right . Tens of millions of amazon prime members did make purchases yesterday during the companys third annual event Courtney Reagan has been taeling it up on her side. She has the results. Zbloompb bill and kelly. 30 hours, 13 countries, more than 100,000 deals, amazons prime day is the biggest sales day ever sales grew by 60 over the same 30 hours last year, and maybe more important, amazon says more new prime members signed up on july 11th, then any other single day in its history. And we know that independent Research Shows prime members spend almost double nonprime members annually its a valuable group. Participation also was higher this year with 50 more prime members buying something on the site this year then did on 2016 prime day. Now based on all of this, John Blackledge estimatings they topped a billion dollars in rev hitting between two and a half and 2. 9 billion. Now the retailers owned device was the overall bestselling item throughout the world. Seven times more echo devices in general sold this year over last year globally. And remember, this is a key product that keeps consumers further connected to amazons echo system if you will. Other topselling u. S. Products include the Pressure Cooker and the dna test weve been talking about the push into apparel, 200,000 dresses were sold, the same as the number of light bulbs. Boom rang commerce which is run by a former amazon employee says discounts did average between 31 and 45 . With the Third Party Sellers offering higher discount rates then the products shipped and sold by amazon directly, but maybe whats more interesting is that boomerang found the bestselling products in appliances, home and kitchen, electronics, toys, and games werent discounted on prime day at all in fact, they were slightly more expensive. Back over to you guys. So clever now can i make a humble suggestion. Sure. Package bills book with a dna test. Thats a great idea i cannot believe that a dna test was one of the top sellers. Be careful, folks, for what youre going after out there that is hilarious. Is that not interesting i mean, the deals that were featured were just all over the place from different younds facelift in a bolt, acid pills to the dna test to a number of different headphones, Pressure Cookers, gel pens, i mean, you name it, it was almost everything many of them brands that we hadnt heard of which is why i think boomer range makes an interesting point, topselling products in the categories, those werent on sale at all and slightly more expensive. Very savvy. Wow, they did it again. Thanks, courtney see you later. Weve been watching a developing story out of new york, sue herrara has it for us right now, sue our are filing criminal charges against 14 defendants in an alleged 147 million boiler room scheme that took place in long island, new york, allegedly. They basically say these 14 individuals, allegedly conspired to defraud investors in five publicly traded companies in a scheme that ran from january 2014 to july of 2017 a number of these people are going to be arraigned in brooklyn tomorrow, and then various other courts for the remaining four basically, what they are charging them with, and these are criminal charges, securitys fraud, conspiracy to commit securitys fraud, wire fraud, and Money Laundering basically, they say that many of the victims were Senior Citizens who were repeatedly pressured to buy stocks and receive stock recommendations. The five stocks involved in this particular alleged scheme are very Small Companies they are National Waste management, ces synergies, Grilled Cheese truck, hydrocar issue energy and intelligent content enterprise so its a 147 million alleged scheme of boiler room scheme that took place apparentfully long island, new york. 14 defendants. Well keep following it for you, kelly, back to you they just never learn that is crazy. 20 years later. So the same thing and its sick if theyre targeting older people too, get a life. Its terrible thank you, sue. Well keep track of it for you. Thank you heading into the close with about 45 minutes to go here and the dow up 140 points. Thats close to sessions highs and its enough to be an alltime territory nasdaqs up 19 nasdaqs up 71, its the best performer of more than 1 . And the biggest names in media and tech are out in sun valley, idaho, dead, including barry diller well weigh in on President Trump and one song he really likes right now. Plus as we mentioned, airlines have been underperforming the broader markets so far this year, but powering higher today. A debate on whether the airline rally can last or not. And we want to hear from you. Reach out for the show on twitter, facebook, or send us an email, closing bell sissorwirsining cnbc, fit bune wldde what if we could bring you better value by having better values . At blue apron, we work directly with more than a hundred family farms. So instead of spending on costly middlemen and supermarkets, we can invest in the things that matter most making farmland healthier. Cutting down on food waste. And bringing you higher quality, fresher ingredients for less than you pay at the store. Because food is better when you start from scratch. Get 30 off at blueapron. Com cook for years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Welcome back shares much grub hub up about 3. 5 right now in fact its trading at 45 right now. Saying that grub hubs Growth Profile and leadership are underappreciated in an improving market and the stock is responding accordingly right now. Up 3. 5 and some of the biggest names in media are ascending in idaho today. Chairman of iac and exmedia, joins us now with the highlights, julia. Reporter hey, kelly, thats right, media mogul, exmedia, barry diller told us hed be friendly to Jared Kushner and ivanka trump if and when they arrive here in sun valley. They are on the guest list, but that he continues to be critical of the policies. Net neutrality, immigration, and environmental of the Trump Administration i think its just a joke. And hopefully itll be over relatively soon. It inexplicably began and inexplicably end reporter diller hopes that the Corporate Tax reform that President Trump has been pushing for will happen. I hope it happens ive hoped it would happen during the obama administration. Ive always hoped that its a true craziness. In terms of competitiveness. And fairness but, i dont know, i think this administration has will have difficulty getting anything done reporter now with snap ceo here in sun valley, i asked dill whaer he thinks about snap shares trading below the ipo price. It has a big audience and people like snap so snapchat, so i mean i think that theres a lot of hype i think that any ipo is at all relevant until three, five years after, other than the people who sell off in the beginning or buy in the beginning and hold. So i think that i think that time will tell, but i think evan spooegle who runs it is excuse me, is brilliant. So hes got a good shot. Reporter well have more of my interview with diller as well as all of the chatter here in sun valley coming up in the next hour of closing bell kwths, back over to you. You always know exactly where barry stands on any issue, dont you . Reporter yeah, he doesnt hold back. No. Is he making any noises about making more acquisitions with the iac . Reporter no, its interesting, you know, there is so much nma talk and pressures for companies to consolidate, diller said hes not believed in consolidation. His strategy is the opposite iac, bills and grows these businesses and then spins them off. Diller himself is more interested in spinning off rather than consolidating. He even said that though they thinks with the pressure on Media Companies from these days and the distributors, they have Pricing Power and under pressure to merge my ears are pricked for any discussions that come out especially this year, theres so many changes julia, thank you well check back in soon beautiful sun valley, idaho all right. 37 minutes left in the trading session here on the dow in record territory up. 141 points right now, up 171 at the peak of the day. Bank of america says that apple iphone 8 may be delayed by at least three weeks because of issue with fingerprint and 3d sen source how that could affect the stock, we have that coming up first bill sat down with joe montana to discuss, wait a minute, golf the transition from athlete to businessman and his vemeinstnt in fan dual. We have that interview up next welcome back on a strong market day after Janet Yellens testimony. Dows up 140 points, nasdaqs up almost 70 right now and the russells up 10. And Harley Davidson is lower on a downgrade from bernstein the rating was lowered to market perform from outperform. The market for new bike sales in the u. S. Is eroding and harley is in for a long uphill ride to sustainable unit growth. Shares are down nearly 3 . You may have heard daily fantasy website fandual is reportedly now considering dropping its proposed merge we are draft kings after that decision by the government to challenge that deal in court as it happens, i sat down with nfl legend joe montana yesterday, he and two of his Venture Capital partners are investors in fandual we talked about the Company Rolling out its new golf gaming option he goes what do you think, i go well, they probably dont know because im invested underneath my business in fandual surprise. Yeah. Yeah it was a good fit. How prevalentwas Fantasy Sports when you were playing oh, i dont think it even existed that the point in time. What do you make of the explosion of Fantasy Sports now . I think its great especially for the viewership and it helps bring people to the sports, you know, fanduals launching their golf project and which i think is going to be great. You have start adVenture Capital firm now you and two other partners you see this as an investment. Tell me why this is a good investment, do you think it continues to grow, it gives people on the edge as younger people get to get older and still grew up with these games, gives them an opportunity to stay involved with it. Another one of the top teams of these sports. And so its just blown away. One of the founders says oh yeah, they practice a couple hours a day. How do you practice . And its so but and youre like me. Your kids are much better than video games than i am. Absolutely. Not even close youve obviously made the transition from your athletic career to something different. So many athletes find that difficult. Why is that . Youve spent your whole Life Training to be one thing, and it really takes that focus. And most, most athletes arent ready for their departure from that sport when that time comes so theyre really not ready to move on to the next. I knew i was ready and it was time it took time to find an avenue jumped into private equity earlier in the fund to fund space. Finally got away from that and got back into direct investment. Which is more fun, football or Venture Capital i play tomorrow this is a lot of work, right . Thats a lot of work. Biggest money mistake joe montana ever made . I vested in an early on in a company that unfortunately we found the hard way had two sets of books it was a soccer uniform company. And unfortunately, it didnt work out and probably the biggest mistake. Whatd you learn from that . Do a little bit more research right do your homework yeah. We did homework, but we just didnt know that there was a lot more bad will or as many bad will as there was good. It was very hot out there yesterday. Thats why you kept wiping he got soccer uniform investment i mean, as i said to him, you know, youve got to do more homework, he says what do you do when they have two separate sets of books there bad idea for an investment. Im surprised by his involvement with daily fantasy and i wonder, despite all the skepticism and concerns that it raises, whether some version of that or sports family in general ultimately going to be fully legalized and, you know because for betting on golf too, its been a controversial one. The whole idea, its one thing to bet on teams, its another to bet on players fandual and draft kings apparently are going to abandon this merger because they see themselves being maligned for their Business Models when they are of the giants and in the Fantasy Sports business, like espn and yahoo and cbs sports and others, so, you know, well see where that goes. We did get to play this putting game yesterday and let me just point out, you know, here i am again say three time super bowl mvp, now, admittedly, this is like trying to get the ball in the mouth of the clown. Theres the first try for joe, theres the second try almost made it. And finally, third try for mr. Montana. Then, i step up to the ball. He makes some snarky comment about how im standing on the wrong side of the ball he shouldnt have done that. In it went first try. So yes the mermaid is impressed. Im still undefeated in celebrity golf putting competitions there but you havent gone up against me yet that doesnt count anyway im ready for the challenge any time single handedly, literally, you would win. Any time. That was fun yesterday e yesterday. That was great. 28 minutes to go until the close here, dow hanging on to a 137 point rally broad gaze for all of the marriage averages today. Coming up, is it time to fly the friendly skies with Airline Stocks theyve underperformed but outperforming today. Whether that rally can last. Plus it turns out that the man at the heart of the donald trump jr. russia email controversy appeared here on closing bell a couple years ago. Well find out who he is and how the latest developments could affect the trump agenda coming up what if we pull Customer Insights from the data in real time . 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. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. 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With the dow up 1234 points in record territory, all 11 sectors in the s p 500 are positive today Technology Leading the ways and the financials with the talk that maybe Interest Rates wont go up as quickly as anticipated from the janet yellen testimony this morning the financials are the laggered, but they are still also positive in todays trade, kelly. Good place to kick off our discussion with mark newton. Hes here at Newton Advisors and owner technical market as well, right . This morning was key. We saw the testimony coincide with a surge both in bonds and stocks technologys been the leadership sector for this market, correct . Thats correct. We saw shakiness in june other sectors stepped in to pick up the slack health care started off initially. Then strims and financials, slowly but surely, theyve helped to buoy this market today at an alltime high the xli sector may be trading up there. The airlines helping, what about bond yields which weve also seen rise a little bit, you know, for a variety of reasons, whether its because of International Central bank moves or our own the trend in general has been up i think ten year yields can move back up. This is temporarily bearish for yields, bullish for bonds thinkingings that potentially you get down to two and a quarter. In general, nice breakout in yields you get down to there, its time to start selling bonds again thinking that yellens testimony not withstanding youve seen that globally. Technology has led and its tough to sell stocks look, as a technician, i want to see 2400 broken, then ill pay attention. Then we move to 2470 and its right to stay long i mean, its a counting. Eight years and counting. Well get there at some point. Dont sell too soon. Thank you very much thank you. Mark newton, bill all right, lets get to a cnbc news update right now with sue herrara. Heres whats happening that the hour, everyone the Senate Judiciary committee holding a confirmation hearing on christopher wrai. Prurps nominee to head the fbi. Wrai repeatedly is serving his determination to lead an independent agency if i am given the honor of leading this agency, i will never allow the fbis work to be driven by anything other than the facts, the law, and the impartial pursuit of justice, period full stop. My loyalty is to the constitution and to the rule of law. The former president of brazil, louisiana wees da silva was guilty of corruption and Money Laundering he was sentenced to nearly ten years in prison. He raised the profile on the world stage as its president from 2003 to 2010. Gymboree is closing 350 of its 1200 stores they filed for bankruptcy saying it might close as many as 450 stores bill, ill send it back downtown to you thank you, sue. Very much. I dont know what happened to gymboree youre probably wanted a child no, i dont think ive ever been in one. My kids, when they were young. Its a problem for the landlords. Now theyre all trying to push back and get better terms. Well, thats going on on a lot of retail sectors right now. 20 minutes left in the trading session right now, the dow up 130 points in record territory. Airline stocks have been riding a tail wind as well today after American Airlines increased the forecast for revenue and the streets anticipating a good Earnings Report from delta tomorrow up next, a bull bear debate. Whether the planeshod iurorol yo ptfio or not. Coming up. baby crying fly me to the moon elegant music and let me play bell rings hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. What do you think . 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. Gaining about twothirds of 1 more than 1 today, 62, 63, all the averages in positive territory. And how about a check on Home Building stocks. We had new data showing total Mortgage Application volume fell from the week prior. Volume knew 36 lower than this time last year yeah, thatll make an impact thats for sure lets go to susan lee, quick market flash for us right now, susan. Hi guys, i want to draw your attention to paypal and square lets talk about paypal. Set to close at a record high for this company this is after a partnership was announced between apple and paypal starting soon, it looks like you can use to pay on apples app store, apple music, itunes, and ibooks, this includes 12 nations, the u. S. uk, and australia and canada now this is interrelated, look at square stock as well and square shares. Were rallying to a record high. This is on the back end of a report from an analyst at luke capital. Maybe paypal should be buying square and thats to attract more customers to that get it guys . Back to you. Very good susan, thank you very much meanwhile transports climbing to within less than a point of an alltime high. Delta, jetblue, all trading higher. Is there more room to run joining us now, staying away and David Trainer who is buy the Airlines Welcome to you guys, ill just start with you because this is a someday filled with optimism about bear numbers as you look out, get costs going up for labor theyre not going to be able to raise fares as much and increased capacity coming online so at the end of the day, nay look cheap, but thats how cyclicals always look at the top. Nickleson also said you cant handle the truth david, what is the truth about the airlines why do you like them here . We are seeing a shift. The cost of flying has gone down dramatically over the years. Its a dramatically more affordable as well and were seeing utilization rates or load factors, higher than theyve ever been think about the technology and logistics that go behind flying and how much improvements weve seen in logistics and technology i think the airlines are more efficient than ever, theyve got lower fuel costs than ever, and youve got an Addressable Market thats much higher than ever since the cost of flying is so much lower the world is safer weve seen major macro secly car shifts that makes it better than its ever been by the way, they seem to appreciate those characteristics. You want to be on the other side of their trade i dont know. Theres been a lot of smart investors even the oracle over the last 40 years that have gotten crushed in this space, more so than even people who own dutch tulips back in 1637. History is littered with examples of bad investments. Look, its easier to go back and say theyre cyclical times change, technology change, businesses change, and i think the stocks look cheap and theyre still a little bit cheap. Yeah, its still a cyclical business, theres only so much room for flying and the number of people who fly. You just said its cyclical its 60 of this country doesnt have 500 in their bank account. Im saying they look cheap because its the top i think there are secular shifts under way it means were not at the top of the current cycle. I believe its hard to argue that the american the global population is more wealthy today than in 1970, and thats really, you know, what were looking at in terms of the longterm sort of cyclicality of this sector. David, are they all created equal . Are you buying all the airlines or are some better than others never, and, you know, thats the beauty of a market the leaders are the leaders, and the laggards are the laggards. We dont like united because they have the lowest returns on capital. For the most part, yeah, we like a lot of the names, but there are still few dangerous ones throughout, where we think expectations have gotten too high ian, same question to you, how would you describe whos kind of better and in worse position throughout the sector honestly, theres not much differentiation right now. Either you believe theres a secular shift or you dont i dont believe theres a secular shift. They only look cheap because they do always at the top. I dont think it matters which one you short. Theyre all owned by buffett anyway just pick your poison. Ian, let me ask you about the pricing that seems to be helping their results lately this whole thing about basic economy and different ways of slicing and dicing the fees to ultimately get people to shell out a little bit more, is that at least work . I can say personally, i feel like ive paid extra to get premium economy lately, whatever that means its extra foot space and a bag of pretzels. Is that an important enough and lasting enough shift to improve their economics for you . No, because the Second Derivative is decelerated. And the bigger impact is going to be labor costs. I mean theyre going to go through the roof year over year starting at the end of this year so, that to me are the issues for margins, and that to it seems to me where you want to be selling these stocks, not buying them here. David, youve made your reputation poking holes in Business Models. What could go wrong with your premise on airlines right now . Well, you know, i think ian brings up a fair point labor is certainly one of the largest, if not the largest expenses, variable expenses for airlines and so, if it suddenly spikes, that would be an issue i dont see the likelihood of that being so high, just because they all just came through restructurings where they had to deal with the labor unions and in many cases, the labor unions put them in bankruptcy. So the fact that they would set themselves up so soon after bankruptcy to, you know, experience a similar problem, doesnt make a lot of sense to me all right good decision, guys, that was great. Thank you both ian, david, good to see you. Thanks for having me. Heading to the close with nine minutes left here art just stopped by and said the market on close orders show an imbalance to the sell side to the tune of 500 million thank you, mr. Cashing what do you say of the high of the session 171 point gain. 50 point ts below that level now. Still healthy gains across wall street and well head uptown to the nasdaq for stocks powering that index of more than a percent higher today after the bell, well go live to sun valley for the report from the big Media Conference on why were seeing less mna in that sector stay with us did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats up to 16 times faster than slow internet from the phone company. Say hello to faster downloads with internet speeds up to 250 megabits per second. Get fast internet and add phone and tv now for only 34. 90 more per month. Call today. Comcast business. Built for business. Thithis is the new new york. E . Think again. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov upbeat dance music dance music abruptly stopping dance music starting then stopping upbeat dance music bell ringing 100 is the chip maker was upgraded to buy from hold by sun trust on growth in gaining and automotive markets that stocks higher by more than 4. 5 now also paypal rallying today only news that its teamed up with apple if youre an iphone or ipad user. You can make purchases from the itunes app, using paypal that is higher around 3. 5 also were watching western digital. Thats another big gainer in the nasdaq, 100 on news that it did win a court order to access data bases and semiconductor stables. That stocks higher by around 2. 5 rather today and were also of course watching amazon. Weve been talking about it all day. What a big hit, third annual prime day was the biggest sales day ever thats higher by around 1 today and one mover to the downside, the biggest loser in the nasdaq 100 today is fasten al they are closing branches even though it beat in the Earnings Report its down around 2 . Back over to you all right, kate, thank you very much. Heading into the closer with about three and a half minutes left in the session with the dow up 127 looked like a sleepy hope to morning. Until the text of Janet Yellens testimony to the House Financial Services committee was released before the open this morning and that sent the futures sharply higher and then on the open this morning, the dow was up as many as 171 points. On that rally. Were going to talk about art carbon about why in a moment here the ten year yield went lower a lot did. As it happened, we had a ten year auction today that went okay, pretty well, capping off the draw down was bullish. Prices went up and that also helped the transports today the American Airlines report was very constructed for the airlines up in close to record territory as well. And tomorrow morning, we get the delta numbers here bob and mr. Cashen join me right now. The move is 10 oil it happened all at 8 30 when the text of her testimony came out and the market interpreted that that she was basically enhancing what lyle had said yesterday, and they believe that that, at best, means wait until the end of the year to see how the economy moves before you do anything and you could see that in the futures, the likelihood of a september move is down around 20 . And even the end of the year is a flip of the coin, 50 50. So the market just loved it. They think the feds on hold, the one thing to be a little concerned about is looked a little cavalier about lowering the Balance Sheet. And im not sure its going to be quite as easy as they think it is. But for today, a joyous jamie diamond said as much yesterday about the reducing the Balance Sheet. Never been done before at this magnitude. Well have to wait and see whats going to happen here. Yes, exactly. The thing that moved the markets, rates would not have to rise that much to get to a neutral policy stance. We dont know what a stance is her implication is, it isnt that far away. Nobody knows so the market cares still about where the markets are moving you put those two together, you have a nice rally. We saw Interest Rate improving well, consumer stables stick well emerges markets. All these move when you have low Interest Rate scenario that did well, then we continue to have this rally in the semiconductor group. Technology stocks are going to be reporting really good numbers. The numbers have been so strong overall. You have the tail wind from the tech earnings rally. But first, financials reported earnings at the end of the week thatll be a challenge for them, i think. Financial ts didnt do well because they didnt get the higher Interest Rates to make the money. Thank you very much now a rally, 118 point gain for the dow right now, but well off the highs of the session stay tuned for an assessment of this day, coming up on the second hour of the closing bell with kelly evans and company. See you tomorrow, kell hi everybody and welcome to the closing bell, im kelly evans, and heres how were finishing up on wall street with the high levels. Were right around there for some of the major averages, dow today with a gain of 124 points, puts it at 21,533, looks five points above its prior closing high that was from back in june, june 19th actually. So last month. Now meantime the s p 500 up about 18 points, 24. 43 thats ten below the record level. Nasdaq having a strong session with a more than 1 gain 62. 61 versus 62. 25 russell is playing catchup. 14. 24, just a couple below 14. 26. Also with apples pain be samsungs gain why apple fans may have to wait longer for the iphone 8 and android lovers who get their hands on it sooner we revealed washington as the top state for business washington state, whos at the bottom coming up, well tell you the states, businesses should avoid and why. But joining me in the meantime, michael san toely, danny hughes next to him at post nine from Devine Capital kate moore, and Randy Frederick is also here with us from Charles Schaub welcome to everybody michael, first of all, what do you make of the rally . It is it all a janet yellen response first of all the markets been hovering right in the vicinity of its alltime highs for weeks now. So thats not a negative setup. That was basically the market finding a way to stay supportive anything that the market did after Janet Yellens remarks today was downgrade the threat level of a strident fed. Fed that was going to power ahead, really without regard to its own inflation target. I dont think that was a tremendous imminent threat anyway, but the market was able to say okay, its the low and slow story and you know, so we had this nice little rally. S p 500, if you want to quibble is below the june 19th high. Were up about 2. 5 on the dow since march 1st. Its been kind of a plauding approach to the spring and summer thats okay. I dont think its easy to spin it negatively when you have the rest of the world up big emerging markets up 2 and the outperforming the u. S. Were hanging in there. The fed chair beginning the first two of the day semimy annual visit to congress we have some of the highlights of the testimony, elon hi, kelly yel season still saying that she expects the fed to begin shrinking its Balance Sheet this year, and she gave us a tiny clue durgs herl testimony about when that might happen my colleagues made the judgment in june when we laid out the final details that if the economy continues to evolve in line with our expectations, that its something that we should begin to do this year and to my mind, i would say relatively soon. The exact timing of this, i dont think matters a great deal it is something weve long been preparing to undertake yellen will start this process of normalization, but you probably wont be the one to see it through politico is reporting that gary cohn is the front runner for janet yellen when her term ends. Yellen acknowledged today this could be the last two days of testimony on capitol hill. But whoever is sitting in that seat next year will have to grapple with this question of why inflation is so low, despite the strength of the job market yellen also used her hearing to make the case for the feds continued independence and kelly, itll be interesting to see if a republican appointed fed chair might be more willing to make some of those changes that the gops been calling for. Thats another point. A lot to consider, elon, thank you. Danny, what do you make of all of these moves whether its the personnel changes . What we heard from the fed chair today. Maybe emphasizing going to reduce the Balance Sheet but go slower, whats your interpretation we didnt really get a the love insight on how theyre going to reduce the Balance Sheet. And lets not forget we have about 20 trillion of debt and that really holds back any kind of growth that the gdp is going to have. She said that year to date, we had about 1. 5 gdp growth which takes into account inflation you know, weve got a lot of debt to get out of under we have that pathing us unfortunately, were not going to see a tremendous amount of growth at least thats my take. Any changes that happen from a political standpoint are just that, but the fed and its 113 years has never once really told us when or hit it right on an economic basis, and i dont expect that to happen this time. They have no special insight in terms of forecasting. Randy, i thought it was interesting, speaking of forecasting, i guess, but you think that the pull back in tech stocks may continue. Even despite the nasdaq kind of perking up lately . I said that a couple of days ago. And that was a possibility whats interesting is today tech stocks rally, despite the fact that some of the money we saw going into financials recently was actually coming out of tech. And interestingly enough, even with Janet Yellens comments about reducing a Balance Sheet and all of that. Interest rates for the most part went sideways today. Yes, we could see more pullback in tech stocks here or there but in general, were bullish on tech stocks. We have been for quite a long time we continue to be Going Forward from here. So were talking about and by the way, is this like a technical basis or you think because these are the platforms of the future or because you ordered a bunch on amazon yesterday . Well, no, the fundamentals on tech stocks are quite good i mean most of them have strong earnings they have strong revenues. They have Revenue Growth a lot of them have a lot of cash on the Balance Sheet very little debt, and frankly when you talk about, as you mention a little bit, some of the new technologies that are going on whether its automated driving of cars. Whether its Artificial Intelligence or robotics, theres a lot of interesting things going on in technology right now. And mostly stocks are in very low position to take advantage of that. Do you agree with that generally, how doout size things up here . I think what randy was talking about in terms of a little bit of technical pullback in the tech soak or it, makes a lot of sense look, its no surprise to anyone that tech has been the most favored sector for most investors and for certainly many Equity Investors and i think when we think about rotations in the market, we have to understand that tech may be a Funding Source for adding to some other positions and this isnt a statement on the fundamentals or the earnings potential or the secular growth that were expecting out of a sector, but really about market rotation it doesnt change our longterm thesis what about the comments from the fed chair today . How does that play into all of this for you i think the fed has been very consistent and yellen has been very consistent about the message. Look, theyre concerned that inflation hasnt moved closer to target, but theyre going to continue with normalization. And Balance Sheet runoff is something that they are going to proceed with in 2017 i didnt really interpret a change in tone from the fed chair today, and from my perspective, we are still in a good, macro environment. We saw the good growth environment. And the fed should continue to normalize policy and danny, i hear i should just mention, you guys lightening up, youre taking the other side of sort of the fang trade, so is that actually to kates point, and i think this is what you meant, kate, correct me if im wrong, essentially lightening up on some of those Tech Companies taking some profits and actually going into some sectors that have been beat up, like financials, like energy, because youre looking for that kind of swing. Is that what you meant i mean, i love financials, its probably my favorite sector call at this point i think you have not only the macro, but also the earnings, the cash return, the regulatory side, and very much the policy support. So, i support adding a little money to financial stocks. Well, were about to fly into those earnings, michael, on friday we are, and i think expectations are relatively subdued for the big banks which is probably a good thing i dont think anyone thought it was a great trading quarter. Thats often the big swing in terms of reported results versus expectations so i think financials can kind of look, theyve been trading with the yields for the most part they outperform what bond yields did, maybe theyve already kind of priced in that were trending higher in terms of bond yields i think the market is in a broader way, is trying to reposition for a more cyclical tone look at the kinds of stocks emerging as recent leadership. It isnt global industrials, its airlines and transports, you guys have been talking about it its more of whats for sale the Consumer Staples are not looking good and of course retail by the way, we should show nrg, closed up about 25 today, danny. Companyspecific story, but part of the energy idea were doing a reorder, were selling about 4 billion of assets, trying to lower the levels, shore up the earnings there. It was nearly 30 today when all is said and done. That was a big activist Shareholder Movement this is not the first time theyve announced theyre going to do something differently, but had a huge impact on the stock and could propel it forward i think in the future as well. And anyone else that you call out specifically there in the sectors that you like . You mean, name names . I like British Petroleum weve held that one for a long time i like on the financial side, wells fargo, i think that kbaen is doing very well year over year, and i like the fact that some of these big, huge clearing firms are actually starting to make money again you know, on their balances. So thats something that we, i think, can anticipate to your point, mike. When we see earnings next kweek. Randy also curious quickly. As we Start Talking about the trial balloons if you want to call it that that would put gary cohn in charge of the fed. If you Start Talking about leadership change, it would be more hawkish or dovish, the market would react to that what do you make of the possibility of gary cohn running the fed. What do you think that implies im not sure its clear whether gary cohn will be hawkish or dovish. What is clear is either from the democratic side or the republican side, it doesnt seem like a lot of resistance to the idea of a gary cohn as head of the fed. We have not had a lot of businessmen running the fed. Thats the big difference hes not an academic there might be concern from the part of Retail Investors because he is a goldman alum and wall street exec, and i think sometimes theres concerns that theres too much of that already in government. But at the same time, hes definitely understands the markets and he understands how business works so, i think his confirmation frankly will be relatively easy sell michael, what do you make of it all i dont doubt ben whites reporting that he might be the front runner, i think thats also in the absence of another specific front runner. Yeah, he might be the default they dont seem to want to go with a ph. D. Economist. The one other name is john taylors. And the different and kevin as well taylor for sure would be a he is the rules guy so, if its gary cohn, it feels like hes not going to go by that book. Even though he might be a businessman, hes not interested in the you give me a rule and im going to make the policy maybe raise the rate accordingly. I wonder if he were there nominated or in the job, the resistance maybe could come from the career fed staff its an academic institution, its not its not really kind of an arm of the executive branch so that might be a little bit of friction who knows. Great point kate, last word on this. What do you make of possible change i think we know theres going to be a lot of change of the fed, not to the top of the fed in 2018, but, i dont think were going to look for meaningful step change in terms of policy direction. Like, our big question is, can we continue to have modest, sustained, Economic Growth not just in the u. S. And globally and whether or not we will continue to see normalization in Central Banks outside of the u. S. So, this is theres a lot up in the air and a lot of risk perhaps in terms of policy mistakes in 2018 and onwards im not sure the change at the top of the fed is the biggest risk all right khan did raising rates this morning. The nonstory of the day anyway, kate moore, Randy Frederick, danny hughes, thank you for joining us here. Appreciate it. Lets get to the latest out of washington now. If youve read the donald trump jr. Emails setting up a meeting with russian lawyer, you may have noticed the name iowa man hes the russian businessman, in fact, closing bell interviewed him. Hes involved in real estate and russian pop star and he came here not New York Stock Exchange about two years ago. Take a listen. Well, hes often described as the donald trump of russia he owns the biggest luxury shopping malls in europe and coowns a restaurant hes out with his latest album, hoping to break through the u. S. Music market now and he joins us here at post nine welcome. Thank you, thank you for having me. Pleasure. Very confusing introduction, right . Did we get it right how would you describe yourself . Musician, song writer first of all much of your success is because of your father and hes been a successful businessman, relations with Vladimir Putin and so on. I get that a lot. People that come to my shows, they draw their own conclusions. We have more hi kelly, Sarah Huckabee sanders just grwrapped up the press conference i can tell you she really didnt give an inch on the question of donald trump jr. s emails with the russian go between and whether that was appropriate or not. She said the president has said what he had to say on the subject. She also was asked about whether or not the drip drip drip of this russia story is harming the white houses credibility. She said absolutely not. In fact she said she thinks its harming the medias credibility when she was informed that that comment was made by trey gowdy, republican member of the house of representatives she said, simply thats her response to him too. So, indicating that there might be some friction opening up here between republicans on capitol hill and this white house on this russia issue. Meanwhile, we saw the president giving an interview here to the christian broadcasting netdwork. And Pat Robertson, he was asked about health care bill, his effort there, and how he would feel if it doesnt passed. Heres what the president had to say. I will be very angry about it and a lot of people will be very upset. But im sitting, waiting for that bill to come to my desk in that interview, the president laid out the idea that republicans campaigned on this, they passed a bill time and time again when president obama was in office. And wouldnt sign it he said now hes here and prepared to sign it, hed like republicans on capitol hill to send him a bill. It remains an open question whether they will do that and what role all of this russia drama will play in the legitimative effectiveness of republicans up on capitol hill, kelly. I know, aman, the president had been donald trump jr. Was on fox last night, the president himself was i think speaking to Pat Robertson today. Was there anything more to come in terms of the narrative about the cooperation that they had or didnt have with the russian government enlight of all of this Sarah Huckabee sanders was asked if the president spoken to his son and she simply said she wasnt familiar with any of the conversations that theyve had so she was pretty locked down from the white house lectern here in the briefing room. In fact she was asked if the president views russia as a friend or an enemy of the United States, and she said she just simply didnt have an answer to that question to that either this is a white house that has sort of is locking itself down, hunkering downvery much politically and rhetorically i think the next development in the story are more likely to come either from the news media, which has been digging up a lot of this evidence or from robert mueller, the special council who may have some evidence of his own, but, i think it could be a while before we see anything from him michael, in terms of the market, youve been saying you dont think theres a lot in terms of expectations for health care or for tax reform, because the main question i guess from that point is view is what does that mean . Not specifically. Its not looking like the sectors direct beneficiaries an all of these policies are the leaders. Do i think that most people in the markets believe that theres going to be some help on taxes down the road . Yes. I do think if you came out and said absolutely not, 100 through this entire four year term, theres not going to be a tax cut for companies or individuals. I do think you might have a market impact, but its not really one of the key drivers of the market right now the policy even in the health care it sounds like theyre not getting away with some of those taxes. Thank you. Samsung and apple are at it again. One is facing a delay for its new iphone while the other may be moving up a release date. Well tell you what theyre up to next. And lets make a deal. Its a popular game show its also the unofficial theme for the media moguls conference. So where are all the deals well try to get some answers u wchg yoreatincnbc, first in business worldwide a used car, apples iphone 8 isnt launching until fall, but meryl lynch cited there is a delay other for this year and meanwhile samsung is reportedly pushing up its launch date for the note 8 to september. Joining us to talk more is scott stein, Senior Editor at cnet i dont think theyd push it up unless they were sure were going up to the note 8. We were worried they werent going to go with the note name after they blew it big time with the note 7, but theres so much brand equity there after years of the note brand that theyre going to bring it back and theyre going to try to convince everyone that, you know, they figured out these battery problems yeah, and scott, they also want all the attention they may get from this scott, do we call it a delay of the iphone now . Whats happening now we dont really know. And there are reports of delays, and the question even then would be how significant are the delays you know, would it be something where the phone launch is delayed bay little bit would there be several different lines . Some people are saying it could be pushed really far, others are saying it might launch with just a few features that wouldnt be active and apples done that before apple pay didnt launch immediately with the iphone, and Portrait Mode activated later with the iphone 7 plus so, you know, thats not something that would be a deal breaker, but it certainly would be frustrating the real issue would be whether the phone comes out much later than expected. Scott, its interesting to see wall street kind of trying to defend apple a little bit today and saying look, even if there is a delay, it wont wont change very much about the magnitude of this upgrade cycle because of the installed base and the rest of it i wonder if you think basically thats correct, essentially theres so much pent up demand for the new models that its going to play out over the next couple of quarters no matter how they come out with it. I think so because theres only one place to get the iphone, apple has this ownership over that platform, you know, a android phones, there are a lot of other options thats always one thing. But also yeah, i think if people know its coming, they might be able to wait a little bit. It was one of those things, its not as essential as an iphone, it got delayed for a while, and then, you know, they sold, they seemed to be selling well. So that is, you know, thats the question, is how much does it frustrate . I think if the line splits, and, you know, one rumor or one reports points to possibly some iphones launching in the fall and other higher end one coming later. I think thatll be frustrating, anything that breaks up the release cycle, because i think when youre buying an iphone, you really do have it pegged to once a year at a certain time. And if begins to get too stag r stagger staggered, you know, at what point do you decide to wait just a little bit further for the one after that i dont know how many are buying it once year, but, i agree, it would probably be a little confusing especially if if it changing the holiday shipments. Iphone may cost 1200 bucks, how does that compare with samsung pricing as they roll out the new models too well, were starting to see rumors about the note 8 costing upward of 1,000, and when you look at the galaxy s8 plus currently, theres already an 850 phone, equivalent depending on the market. The note is going to slide above that, you could be looking at 950 or 1,000 depending on how you speck out your note 8. Its not getting to the 1200 price point, but the note has historically been a top end. How are people financing and affording all of this, andrew . Well, in the u. S. Its all been about the carriers. They offer 12, 18, 24, and at t even offers 30 months financing for these phones to try to break it up over a longterm and Samsung Offers its own financing too which is a big boom to the sales. Itll offer you 0 , 24 month financing too. You buy it right from samsung. Com. Michael, it used to be that youd get a 30 month lease or, you know, payment cycle for a car, now thats seven or eight years. Theres no mortgage, the phone is three, i mean, its like were really stretching this thing out here. Right you basically have Big Companies able to float people for these and i think the cars exactly the right example because the Sticker Price of a car, i mean the percentage of people who actually pay cash for the sticker surprise relatively low. And its a matter of just how you facilitate that sale and were talking about installments here of something that nobody wants to have taken away from them in terms of phone remember how its also in terms of the high prices, cosmetically, from so many people its taking the place of a computer. Not only that, which i understand, its funny to think that the whole argument for autoloans of hey, people pay this first before they pay off their mortgage now i feel like people pay this first before they pay off their car. That is true. Look, the auto loansdelinquencies out there. Scott, quickly as well, these displays for the new iphones, is that a samsung product i mean, do they stand to benefit either way i dont know about that thats a good question you know, i think if theyre making the display, i would say so, but i think, you know, thats its an overdue move for apple because it has been all over the place in the market and the displays are not a problem already, theyre really good but there could be battery life advantages to that and you know, its one of those upgrades that you would have expected by now. So, you know, it seems like finally that shoe has to drop. And not on the glass. Guys, thank you both interesting stuff. Thats scott stein and Andrew Martin now cash may be king, but visa is looking to overthrow that sovereign the credit card leader is making an offer they may not want to refuse that if they commit to going cashless that tops our fast take next and its that time again look, at scott youre picture. Nah people are having fun with this. I love isth segment he is back today and thats ahead on the closing bell. Where to get in. Where to get out. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome back and stop accepting cash, michael. Theyre starting with 50 merchants. This is aefrt good call . I would say that. For still accept cash is because they dont to want upgrade the technology maybest that part because of it. Up about 2 is what visa takes. Thats a lot and not accepting cash in america still remains kind of a problem for a lot of 32 in 2015 its been stubborn across the world. I hate it im a next, Google Payments of its own to 400,000 for research at the wall street journal says supports its positions on key regulatory matter pms im stocked one is that academics dont have to disclose the payments theyre receiving from these companies for example in law School Journal articles, the others, these industry conferences that are not explicitly clear i also feel like this is industry practice all over the place. It gives you grants to tell you that gmo crops are fine. I mean, all that kind of stuff and theyve gotten better in some pieces when its opeds, its got to be across the board. Academic journalists yeah, it would help be suspicious of whatever there is. In the nine months through march. I wonder if thatll impact the results on friday. I would say very little just because in the grand scheme of these enormous banks, i dont think its really a key profit i mean, they do it to participate in one other market. I dont really think its dwarfed by mortgages what are their loans . Who really knows. I think the bigger issue with everybody, all of the lenders pulling back on autofinancing is more about what does it mean for the sale of cars the whole, its basically for many people. Does robot lawyers get your attention . It should. Theres an app that using Artificial Intelligence to fight parking tickets for you and deal with other kinds of legal matters. Is this another blow for the Legal Industry it seems like an encroaching threat obviously its certain types of legal matters. Ones you needed a bureaucratic response definitely cash cow businesses i remember years ago when you were able to start doing your will online and thats another one of these these areas are poking away aet, i think, a lot of the bread and butter businesses. I think its ripe for disruption im not saying its going to be the gold standard. Theres plenty of people, myself included, you dont know where to turn to for the basic things and professionals with oe page pricing, do you know what a lawyer is supposed to cost do you choose one based on price . My dads friend, you know, he did it for this guy. He seems fine. I guess ill go with him realtors, lawyers accountants Financial Planners i mean, all of these industries is an area and have you had a parking ticket lately . Oh sure i just pay them. Usually i gambled and lost i dont contest it my grandfather fights those as he should, go for you, gramps time for a cnbc news update with sue herrara heres whats happening at this hour. Five of nine men suspected in the beating death of a 22yearold american tourist, outside of a bar in greece, appearing before an investigating magistrate the nine have been charged with intentional homicide in the death of bacarri henderson back on july 7th. Manhunt is under way in alabama far man suspected of killing three people in a domestic dispute this morning. Officials are looking for 51yearold kenneth lever. They say he is armed and dangerous and may be headed to the florida panhandle. The shooting took place at a mobile Home Community near birmingham a Harvard Faculty Committee is proposing a ban on all student fraternities, sororities, and singlegender clubs. Bans groups that has a harmful influence on undergraduate life. Itll take effect for Incoming Freshman in 2018 and a stunning upset at wimbledon. Defending champion andy murray was defeated in the quarterfinal round by 24th ranked american, sam kwair ri murray is the worlds topranked tennis player. He lost in four sets he is the First American man to reach the wimbledon semis since andy roddick back in 2009. That is the news update this hour kelly, back downtown to you. Good stuff. Thank you, sue you got it. Sue herrara twitter, pandora, gopro are three Tech Companies discussed as possible acquisitions by bigger media ones. Where are all the deals . Were going to discuss that next and West Virginia likes to tout itself as a state that offers country mountains and adventures West Virginia is going on this adventure. The Mountain State climbs to the list it probably wishes it were not on 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. It was up 123 points, 171 at its peak. All this after janet yellen after she began her testimony better than 1 gain on a four day win streak for that index. S p up 17 now lets send it over to susan lee for a market flash. Hi Kelly Stephanie is stepping in, shes taking over for dan who. And box has outperformed and outperforming the sean its time to lay the ground work for major deals. Julia is there no big headlines yet, right . Reporter no big deals weve heard about yet, but all of the moguls weve talked to here tell us it seems like more media consolidation is inevitable. Media giants are facing grower pressure from digital distribution from facebook and google and see a lighter Regulatory Environment i think consolidation is inevitable that doesnt mean its necessarily smart. Consolidation is good, when youre no longer growing, and there is no growth left in your sector, and so you consolidate and cut cost and do all of those things its a consolidation for cable, broadband, and phone. And more and more looking like a pipe and they need more and more content to differentiate and dekmodtize that pipe theres a lot of discussions going on. The fist one. What do i think about deregulation good and bad its good that it opens up a lot of activity and a lot of consolidation. And if its bad, its too consolidated reporter we also heard about two rumored deals that arent happening. Dismissed the idea that cbs could buy lionsgate and it was dismissed that verizon could merge with disney. With rival at t buying time warner verizon could be interested in a content company thats one of the Main Companies thats being discussed as a potential player in that mna space. Kelly, back over to you. I am so curious to see thousand turn ut os, julia, thank you. Joule kbra in idaho. Should we expect a pickup in media mergers or should the slowdown continue . Welcome, gentlemen, tom, what do you expect to happen here in the near term if anything . Well, expect continued consolidation among the Cable Operators because, the economy is a scale with consolidation really drived down the cost of programming. Remember programming 40 of the costs. So you can lower that cost by getting bigger conversely on the programmers side, we dont expect that theres no real economies of scale for programmers. It doesnt say costs tloesz make a movie if youre bigger so, tom, when you say cable consolidation. How will the Regulatory Environment permit that . Well, the fcc certainly has taken a lighter touch on cable mna, and thats going to continue couple private Cable Operators out there that i think might be targets for some of the bigger Cable Operators. Can you name those . Well, the ones that are most talk abouted are Cox Communications and mediacom. What about you . Thats the argument for the consolidation on the cable side of it, maybe not on the content side whats your take on all of this . Well first of all, let me hop in on the cable side, the elephant in the room is comcast looking to go after charter. A lot of people dont seem to think that comcast wants to do that really the only thing that got in the way of comcast buying time warner in the past was the former fcc chairman tom wheeler, and the coordination that he did with the doj to stop that deal with pie and the fcc right now and the same doj and doj is about to get a new head. Hopefully within the next month or so. Im not sure why comcast wouldnt take a look at charter and being bigger in the cable space themselves i mean, thats the deal i think that probably makes the most sense within the, you know, the Current Administration and as far as wireless is concerned, look im sorry, go ahead. No, walt, go ahead and talk about the potential for wireless getting included in here i guess im also wondering in kind of a post at t thyme warner environment here, what it looks like in terms of, you know, content plus distribution. Is that kind of a one of those things that wouldnt want to follow or Just Two Companies doing things for defensive reasons, how do you read it . Were not post yet . We have to get we have to get the doj head in there to approve this deal or not and well see what conditions if any are going to be put in that deal im optimistic, theres oofbl lot of print about some of the assets that time warner owns and what influence the administration will have there but, for at t, to me, that was more about diversification obviously the wireless business is difficult they bought directv to get cash flow time warner diversifies their business the focus should be on verizon theyve done not of this, go 90 and i guess theyre calling it oath now their wireless business is rolling over you talked in the leadup, the executives were saying that consolidation happens when you dont have growth. Verizon pulled a lot of growth forward, its earnings in the accounting for payment plans, offering unlimited early the focus should be on them, on what deal theyre going to do, you know, as they approach whats going to be probably a five year decline cycle in the business. We have to go, anything quickly to add on verizon and who to watch for there its different there is that at t, by buying time warner, they get to control the bundle you know, its hard for verizon to control it. Amc or vie con, it isnt enough content. All right, tom, walter, thank you, as we await further news, whether its this week on in the weeks to come. Meantime, hedge funds are getting hightech in their Investment Strategies in order to stay competitive. Leslie joins us now with more on how theyre doing all of this, leslie thats right. Many in the Hedge Fund Industry are pinning hope for revitalization on greater use for computers to collect and analyze information to make Investment Decisions in some kagss, the trading that, you know, weve been hearing about for decades, in others, its new types like Artificial Intelligence and Machine Learning fda droibted a copy of which was obtained by cnbc the firm estimates that about one fifth of hedge funds with 1 billion or more in assets has at least one person focussed somewhat on data science that proportion jumps to 40 for funds greater than 8 billion. Now the proportion of assets devoted to hedge funds has grown while those in nonfunds have shrunk over time that trend is likely to continue in a separate survey published this week, almost 60 of investors said they plan to increase allocations to kwauntd at a timively focus strategies over the next three to five years. But while the employees and investors are chasing quantitative strategies, its unclear at this time whether the returns are quite there. Hfr data shows macro Systematic Strategies declining 2. 8 in the first half of the year while the broader industry gained 3. 7 , kelly. Thats interesting. Its a big number, michael, what do you make of it . Obviously its hedge funds wanting to sound up to date, wanting to convince clients they have a repeatable process. Thats been a huge thing we have a discipline, a process, were not just kind of flipping stocks based on that not that anybody really sold themselves on that basis anyway computers feel. Yes, it is. But i dont think it changes the actual game. I mean, essentially, youre still trying to, you know, buy things that are undervalued, sell things that are overvalued, youre just doing it in a more systematic play. Ask not the kind that these hedge funds really are going to be consuming. Legsly, what would you add to that i think that is exactly right. A lot are using alternative data sources, things like, you know, research from the brokerage firms, those are information that you just need theyre kind of more from the past alternative data. Those are the things we hear that we most commonly talk about are the satellites tracking the cars until the parking lot at walmart, those are the new type of data that every Hedge Fund Manager needs to get their hands on whether they can interpret the source of data accurately in a way this generates returns remains to be seen whosk you see a flood of Hedge Fund Strategies focussed on that, the returns may not be there as well. Leslie, thank you leslie picker. Our scott cohn revealed in washington as the top state for business that was here on closing bell yesterday, now hes at the Pike Place Market with the states that make up the bottom of the barrel scott. Tlahey there, kelly, its 24 hours that we revealed that washington is americas top state for business, and since then, the comments have been flying just flying. Just flying. Yeah, just like the fish that is horrifying top states, there must be bottom states and we will realve americas bottom states for business right after the break. Stick around all right this is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov 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. 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 were now well aware that washington is the top state for business this year, so what about the worst ones scott joins us now that fish thing was hilarious, the face of that guy any way, whos rounding out the bottom of the list well, yeah, in order to come up americas top states for business, we have to score every state base td on our exclusive study. So, if there are top states, there must always be bottom states maine, the pine tree state, comes in 46th this year, same as last year. With the worst workforce in the nation unproductive by the numbers and low unemployment means few workers are available. Alaska the last frontier, is in 47th place. Hit hard by the oil slump. 48 is mississippi with bottom five in workforce, economy, technology and innovation. But its the most least expensive state to live and do business in. Hawaii repeats at 49 this year it is americas most expensive state, but u boasts the top quality of life. State number 50 had been hit hard by the decline of its most important city, coal, but it wasnt in the best shape going in its West Virginia with the worst economy near the bottom for workforce, technology and innovation and business friendlyness the Mountain State hits the depth, americas bottom state for business 2017. You can read more about the bottom states and the top state and everything b about competitiveness at cnbc. Com. This is a huge product every year that a lot o f people work on too many to thank all at once here or we would be here all day, but i will single out our producers and our new associate producer, anna spring and madison, all the great crews here in seattle and washington and the terrific people at cnbc. Com that put this pogt. Take a look at their work. Topstates. Cnbc. Com let us keep hearing from you best best stops 2017 back to you. You know, i was half listening to that and half looking at the fish behind you, still. I also wanted to bring in your points here on what you think might be contributing to some of the worst performance . Some of those states are swrus kind of in a tough spot demographically. I know maine has a shrinking population an oler population low unemployment, but not an availability of really highly qualified workers and well educated ones, theres a lot of structural problems. On the other hand, making it accommodative and trying to stoke technological advance. Thatsrealm they can do. Were getting these press releases, oh, virginia was up five slots and number one for this and that, so certainly having an impact well, look, its things that people talk about and you just pointed to some of the issues. We always think of it as a conversation starter people look at it. This is not the be all and in all for whats a great state, but the its a way to look at what states, if we do this right, what states are going right, what theyre doing wrong. What they can improve oon and if it get that is conversation going and makes everybody more competiti competitive, thats probably a good thing now, go over to those donuts that come out with cinnamon and sugar. You can get six small donut, delicious. Pikes place and scott, great work thank you, sir appreciate it. In seattle for us. He correctly guessed the top state for business yesterday can we ever stump him . Were quoing to find out after this sfrz baby crying fly me to the moon elegant music and let me play bell rings ladies and gentlemen, its time for stump santoli theyre so good. This is when we transfer from the opinion to the fact part it makes me very uncomfortable Everything Else has stump ed kelly up until now question number one, amazon wrapped up its third prime day yesterday. How much did sales jump from last year . Is it a, 40 , b, 60 or o c, 70 . Wow, those are all right in the same zone of applauplausibi. 60 right one for one i knew it was more than 50, but i thought 70 sounded aggressive i wanted to know the absolute number billion is about twice the daily run rate of revenue that amazon has on a typical day. So impressive. You gookgled that. Question number two, s p, dow jones and msci are both looking to overcome the Telecom Sector which weve talked about at great length especially if the level three goes to the three companies. What would they like to call the sector they might form and and change a . B or c i believe krrk. Media and telecom is more descriptive of a will the of the way you would look at these stocks, but its going to have to be bigger it could be the whole thing it could rival tech. Communication services you were talking about enterprise staples theres other ways to slice and dice it. Sort of like a Business Services but its all semantics the dow hitting an intraday high today. Which dow component is the most expensive leading . A, microsoft, b, chevron oc, merck. Im going to go with chevron. Yes, it is. The energy stocks, is it 40 time, 50 times or about 70 time sns. 68 times. Which is shocking to me. Which sort of shows the market is kind of built in and expectation is going to be rampant at some point. Its a clean sweep. I think the first time and with the tops. Visa is number two merck has a 40 leading pe and we havent stump ed the santoli, so well have to bring it back and try it another time. Maybe next week were playing this for you as well queen yes. Thats it for closing bell, everybody. Fafast money begins now. Right now, overlooking new york citys times square, im melissa lee. Traders are wells fargo strategist says he is a bear among the wall street bulls. Hell explain why hes so worried. Plus, airlines are soaring weve got a special report and later, the vix sinking again a top money manager says dont get too comfortable