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tv   Closing Bell  CNBC  October 16, 2015 3:00pm-5:01pm EDT

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unit revenue outlook. boeing under pressure after dal's delta's ceo made comments about an aircraft bubble. >> show is oefr. >> i know. happy friday. >> have a great show tonight. >> "closing bell" starts right now. hi, and welcome to the "closing bell," everybody. >> you're welcome, brian. >> that's pretty funny. i'm kelly evans. everybody is here at the new york city stock exchange today. >> i'm bill griffeth. a new credit swees note said clients are more confused than ever right now. that means everybody is confused. one big reason china's economic i can use, there are a new piece of data coming out this weekend that could shake the markets even further. we will break down that number shortly. >> another thing that's confusing markets, the federal reserve. we will tell you just how vocal
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members have been since that last meeting and why the market is certainly so much trouble making sense of it all. >> netflix has been sweeping the emmys lately. now it may be ieng the oscars, the company out with its first feature film, it opens nationwide tonight. we have details on that and we will talk to a shareholder who is not real thrilled about that. >> silicon valley darling being called into question. we have the wall street journal reporter behind the controversial articles on blood testing startup pharanos. >> let's start with this story about china and the problems for billionaire steve wynn and his casino empire. jane wells has that story for us right now. >> guys, you know what happened with earnings yesterday, they were not good, they continue to be bad. if you told me a year ago that steve wynn would criticize the chinese government the same week he hosted bernie sanders and hillary clinton in las vegas, i would have lost that bet. wynn has long been a china fan. here he is one year ago. >> it's much harder to do
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business than it is here in china. the regulatory burden in china is inn fan tess mall compared to the crap we get in america. it is the most less say fair place on the planet at the moment. >> one year later wynn is bewildered by the lack of uncertainty and he lashed out with a $4 billion property opening in macaw law spring and no idea how many gaming tables the government will let him have. >> we cannot train people and maintain service levels in the noncasino and casino areas when we don't have the time to train our people. so the notion of finding out how many tables you are going to get three weeks before your opening is outrageous and ridiculous. here in america we would never have a las vegas of the diversity we've had if the -- if the city had told us how many tables we could spread. the table cap is the single most counterintuitive and irrational decision that was ever made.
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>> we asked for comment about what appears to be a 180. spokesman michael weaver said of wynn's statements, i think they stand for themselves and should not be regard as comparative. as for coming the same week he is hosting the democrats given his disdain for president obama weaver said the debate had, quote, zero to do with the earnings call. guys. >> the word that stuck out to me from his conference call was weird. he just said the quarter was weird, mainly because of the intervention by the chinese government, right? >> over the months he has grown more and more cautious, in fact, last may he told our unis yoon that he understood why jinping was doing this crack down and he would have to wait it out. the cap on casino tables which he calls the damn cash register and not being able to know how many tables any of them can have he is frustrated in expressing things you have not heard her
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express before about china. >> it's too important for them as a business to leave all together, but what other options do you really have? >> they have done. they have none. they have to wait it out. this $4 billion wynn palace he is committed to, that's not going away, that's going to happen. the matter is how much money he is going to make on it. >> that's real uncertainty. jane wells, appreciate it with the latest on wynn's struggles in china. on monday the latest gdp and production numbers will be out from china. for a preview let's check in with seema mody back at global hq. >> china has been a source of concern for not only investors, but the fed. commodity traders and multi-nationals that rely heavily on china, that's why this gdp number is so important. it will tell us whether china continues to slow down or if the economy is starting to stabilize. the buy is to the down side, economists estimating growth of 6.8% which would mark the slowest pace of expansion since
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the depths of the financial crisis. a slide in commodities, slowing global trade and volatility in the chinese stock market are expected to contribute to the decline in growth. infrastructure investment has also slowed this year and those numbers will be watched to see whether china's fiscal and monetary efforts are working or if more stimulus is needed. remember now stocks were rocked when china's central bank devalued its currency in calling. economists i speak to say we could see more intervention on the currency front if these numbers disappoint. >> that's going to be big sunday night. seema, thank you very much. let's talk about all of this in our "closing bell" exchange. for this friday joining us jpmorgan funds anastasia amarosa is here, along with peter cost can a, rick santelli is with us from chicago as well. an shash is that, do you blame the public for the confusion they feel about the markets? after the volatility of august
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and then the fed not raising rates in september, mainly because of this slow down in china. what's going on here? >> there is so much confusion, so much inaction i think on behalf of the invest urs ers because it's difkt to see where no tourn. the fed has cause this had confusion. in september they told us the u.s. economy is fine, but maybe we are not fine because there is a slow down in china. yes, bill, i agree, there is a lot of uncertainty that has picked up. i think this week maybe has given us a little clarity on both of those two things, the fed and china. first of all, on the fed front, we have gotten retail sales that were somewhat disappointing, fine for the quarter. inflation that's at sfwloe, it's not moving anywhere. so you couple that with the comments from the fmoc members and what they're basically saying, it's not enough for us to implicitly think we are going to get inflation we want to see that. for investors what clarity this has provided is that the fed actually wants to see the whites of the eyes of inflation before they hike those rates. >> right. >> and then on the china front i
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think what we got is better loan datd at that. gdp is important come monday, but loan data is important bau that you say forward looking. >> we saw this market breach the 2020 level. we are at 2028. does that technically speaking give you confidence here? >> you would think so but like we have been talking about the confusion why would the market be at this level? if you are confused one thing you don't want to be is have your money invested in a place -- >> so bad news is good news again? >> that's usually the case. to me i think that i would have to wait for more clarity. more importantly from the fed. as far as u.s. equities i would think that you would want to see the fed come out and say, look, it's not happening this year, we are not getting the data we need, we are probably going to go into the first quarter of next year and rethinking it then as well. >> go ahead. >> i think investors are maybe getting somewhat unconfused. if you look at the fund flows in
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the last couple of weeks we have seen this chasing behavior. we see it every time the market pops and investors start to step in. all the valuations, whether it's high yield, whether u.s. stocks, whether international stocks they have been so beaten up a lot of value has been created. investors are looking there now. >> speaking of the fed, meanwhile, rick, more analysts are saying they're getting all these questions from clients about negative rates which we saw materialize in one of the dots in the fed's last meeting, it's probably from lacota but talk about negative rates and what are people saying about the prospect of it? >> well, people are saying that the fed has two alternatives, normalization window has closed, missed opportunities to buy insurance on the next recession or of course the business cycle winding down and in lieu of that there's two options, option one is more qe, option two is negative rates. seriously, i don't know where else they can go. in terms of investors being confused, i don't know if it's
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confusion. it's faulty guidance. and faulty guidance from micromanagers and central planners. we don't bet on the economy anymore, we bet on how micromanagers view the economy through the lens of their policy which is completely different. just imagine a world where no central planners and no u.s. central bank governors said a word for the next six months, what would investors do? well, maybe they would look at the data and wet on the data the way it used to be. i don't see it as confusion. i see it as we have now conditioned the market to not look at fundamentals, to look at people that are trying to control the outcome and avoiding fundamentals or trying to change them. >> that's john lennon singing ma in, ladies and gentlemen. >> so what do you do? how do you make money in all this? >> i think the tactical rally does continue. investors have fleed all the asset classes that are now actually bouncing right back. if you look at the spreads in high yield, for example, they
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are the widest levels that we have seen in 2012. if you look at valuations they are the cheapest levels that we have seen in about a year. i think you absolutely can find the opportunities there. now, when we talk about the earnings season, if you will think about this week there's so much dichotomy and bifurcation. anything tied to the strength of the u.s. consumer is doing great. anything tied to the commodity sector is going the other way around. you have to focus on the strength which is the u.s. consumer. >> peter. >> i'm just keeping the money in the mattress. >> you are keeping that powder dry. good for you, peter. >> i stand by my convictions. i might miss a 2% move on the upside, but i'd rather take advantage of a 10% move on the down side. i still think we are going to see it and the s&p is going to hit 1865, in that level, at that point i will back up the truck -- >> peter, there are a lot of people who have the same view and it showed up in your survey. the problem is if you keep waiting for that to happen time
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passes and time costs you money, too. >> it doesn't cost you money if nothing is moving. if you are not missing anything, you are not missing -- >> put your money in t bills. >> you don't make any money there and you don't make any money in your savings accounts. i mean -- >> but the perfect example of wakt, right, you did have a 10% correction at one point. do you wait for the next one? why not buy the within you just had. >> blink and you missed t peter. thanks, everybody, for being here. 50 minutes to go in the market. seeing the dow up 32, s&p up 35 points today, the nasdaq trying to hold in there, it's only up 2 points looking to close out a volatile week. >> this has been the narrow west trading ban for dow and s&p since july. >> a not so volatile week. >> i'm sorry. yes. i wasn't trying to contradict her. >> you got the facts. >> up next, fair we will u.s. airways, hello travel headaches? the air carrier starts flying
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under the american airlines flag tomorrow. we will tell you what the merger integration issues could impact your travel coming up next. >> also ahead. >> this is what happens when you work to change things and first they think you're crazy. >> that was the founder and ceo of theranos creating reacting to an article raising questions about the efficacy of the company's new blood testing technology. we will speak with the report who are wrote that these and is following the story coming up. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade.
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markets trying to hold on to positive territory today after a stronger session in europe and even asia a little bit in the green overnight. the dow is up about .2%. interestingly the nasdaq earned 31 toints to the dow, nasdaq barely positive, a stronger session yesterday on the strengths of biotechs and talk about an accommodative fed. some discussion about pinning to levels that are necessary for options expiration, but also a pretty even split between gainers and decliners across the broad index. >> we are up 4 points on the s&p but very evenly split between the green and the red in the
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heat map so far today. let's tell you about a couple movers we are watching right now. alibaba has offered $26.60 a share to buy the chinese e-commerce joint that already owns 18% of the youtube like service. the all cash deal is valued at $5.2 billion. they say they get about 500 million users each month. general electric has hit a 52-week high after the company's earnings per share topped street estimates helped in large part by gains in their aviation and transportation divisions however revenue fell shorter of projections on their oil and gas unit. ge has not closed above $29 since august of 2008. >> united continental stock falling on yus it's new ceo suffered a heart attack. phil lebeau has the latest with the shares down 3%. >> at this point we know there is confirmation from united
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airlines that oscar munoz was hospitalized yesterday. the airline confirming what had been earlier report that he had been hospitalized but not talking about whether or not he suffered a heart attack. dow jones reported earlier today that oscar munoz suffered a heart attack. one, how long will he be hospitalized, the severity of what sent him to the hospital, in other words, is he incapacitated for an extended period of time? will will have to be somebody, maybe the coo or somebody else who takes over his duties or is he going to be back in the job relatively quickly? a lot of unknowns at this point and that's why we are seeing so much pressure on shares of united in afternoon. >> i'm reminded when lloyd blankfein received his diagnosis, they had to get it out to the investment community right away. dow jones broke the story first and i'm just wondering what clarity investors will need at this point. >> they are going to need a lot. that's the difference between this and what came out with
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lloyd blankfein. almost immediately goldman sachs came out and said here is what happened, here is the diagnosis at least our projection in terms of how long we can it will take him to deal with his particular medical issue and i remember i was in new york that day and i remember hearing a couple of people on the floor at the nyse say, okay, i get a pretty good comfort level in terms of what's going on at goldman sachs. at this point there's more questions than answers from united regarding os nar munoz and his condition. >> we certainly wish him well. i'm sure that's their big concern is making sure that he is okay. let's move on, the other story we were talk gg to talk about american airlines lower as it gears up to unify its systems with those of u.s. airways as they make their final flat tonight. do you see integration issues here? we had that with united continental as they merged and their reservation systems weren't as sim pat co as what might have been hoped for. >> i don't think we are ago gg to see a whole lot of issues. what we're seeing today and
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tontd is more symbolic than anything else. the back office, the guts of the integration of these two airlines, much of that has already taken place. we were at the american headquarters at the new operation center a month ago and talked with doug parker at that time. they have been working diligently on this over the last year in terms of integrating the two airlines. in fact, they have been drawing down the reservation system from u.s. airways. there is only a small percentage of their flights that are going through that system. what we're going to see tonight, guys, the final flight, in fact, it's already begun, went from philly to charlotte to phoenix and ends in san francisco tonight. the final flight and then signage. if you go to an airport tomorrow or this weekend you will not see u.s. airways sign, the only thing that's left a few planes that still need to be repainted. >> end of an era, again, yet another era coming to an end in the airline industry. phil lebeau, thank you. see you later. we will take a break with about 40 minutes left in the trading session here. the dow up 42 points.
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s&p up 5, the nasdaq up 6, capping off pretty good week despite some of the bad news on the economy and some mixed earnings reports to say the least. >> and i am looking at oil holding in there. that may help the dollar index a little higher on the session as well. up next, their a no, sir the unicorn? the silicon valley thinks it is. we will discuss the reporter whose article raises that question. >> fed officials have been hitting the speaking trail pretty hard but is their message or messages reaching wall street as intended or just confusing investors? our steve liesman will be here with rather surprising findings. stick around.
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investors?
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welcome back. to close out the week the dow is higher by 45 points, at the moment the s&p is strongest with a gain of .3 of 1%. the nasdaq edging up higher. >> this is the weekly. this is our favorite chart. we love the daily, but the weekly is even better. the ten sectors in the s&p 500 and how they performed this week. utilities is -- wait a minute. >> well, that tells you what kind of week it's been. this is why we love it. >> they are the best performing sector this week. >> speculation about the federal reserve. if you want to know what is behind this market, lower rates
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than longer >> three biggest defensive sectors in the s&p are the best performers this week, utilities, healthcare and telecommunication. >> and energy managing to hang in there in the green. consumer discretionary also positive despite what happened with walmart but other components have been much stronger >> we are market nerds but it's good stuff. we both are. >> no, i mean -- >> and they are. >> general you. >> where were we? multi-billion dollar startup theranos under fire this week, two articles published in the wall street journal investigated the efficacy and accuracy of the single finger brick blood test that put theranos on the map. theranos founder and ceo elizabeth holmes was on mad money last night with jim cramer and here is what she had to say in response. >> this is what happens when you work to change things and first they think you're crazy, then they fight you and all of a sudden you change the world. i have to say i personally was shocked to see that the journal
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would publish something like this when we had sent them over 1,000 pages of documentation demonstrating that the statements in therapies were false. >> john karinew is the author and joins us at post 9. hi. >> must be an interesting last couple of days for you. elizabeth holmes has spoken out, has said that you didn't represent her company accurately. what's your response? >> well, the response is simple. we absolutely stand by our reporting and if you look at the company's responses over the past 48 hours you will see that they haven't really denied any of the facts in the story or any of the factual details. >> we should say for those that haven't read the articles what she has been striving to do is develop a blood test that only takes a finger brick, small amount of blood compared to what they normally take when they take it out of your blood and take a lot of blood.
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what you were reporting is they found discrepancies of similar tests where the finger brick wasn't as accurate as those of the more traditional tests. >> there's that but more importantly there's also the fact that they are not -- they were not using at the end of last year according to my sources who are very knowledgeable sources they were not using their proprietary laboratory instruments on more than about 15 tests out of the more than 240 blood tests they offer consumers. it now turns out according to my sources that earlier this year they stopped doing -- using that laboratory instrument on all but one called the edison on all but one test. so they are now down to proprietary technology on one test. >> that being the case, then, what differentiates theranos from the traditional companies that are out there doing blood testing which are quest and lab corps? >> that's a good question and a question i ask myself. i think the company would probably tell you that it's still often drawing less blood
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because it's using a smaller needles that are used for infants and children and that it draws less blood, but it's still td traditional method of drawing blood which is stick ago needle in the arm and drawing the blood venously. then they might tell you as well they did have one test, a test to detect they werees for which they are still collecting the tiny samples and doing their technology. >> the thing that interests me is a bigger picture question regarding silicon valley and technology right now. they're looking for the next unicorn. this company has a market value of $9 billion right now, in fact, it famously made elizabeth holmes the youngest ever self-made billionaire. she has been on all these magazine covers as a result. is there a rush to find that unicorn in silicon valley do you think before all the test results are finally in? >> well, i think -- >> met for clee speaking. >> our reporting certainly raises questions about the amount of due diligence going on in silicon valley amid this rush
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to get in early on the next facebook and is this still a unicorn? is a company that is essentially just another lab with many fewer locations than quest or lab corp. still worth the same as quest and lab corp. because quest is worth about $9 million and lab corp. is worth about $9 billion. is theranos worth the same as those two companies that have billions of dollars in revenues and profits? >> two further issues you raised. i want to get your comment on quickly. one is she's saying one of their greatest innovations is making these tests available at low cost, as opposed to billing $10,000 for a blood test they want to do it for $2799. how are they able to do that and if that is a core part of their business model does that still represent big innovation in the healthcare space? >> i have sources who have been telling me for months that the business model doesn't make sense. that you can't run a laboratory
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profitably that way. i haven't looked into that question as much as i have looked at the technology and whether there is technology and how much ft technology is being used on their tests. but it's a good question. to what extent can you actually, you know, make a profit with those -- is it true that they are offering those low prices? absolutely. that's true. there is no question. >> and the other i wish as well and you brought up some of their competitors. she said that some of the sources that talked to you were not trustworthy because one of them works for lab corp. a rival now, the other said they wanted -- >> what you just said about lab corp. is i don't think what they are alleging. what they're saying is that one of the several doctors who spoke to me and who had issues with the accuracy of their tests now has a lab corp. phlebotomist in his office to help them draw blood from patients. so they are saying that's -- that's a conflict of interest if
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you are going to taub about theranos, then, you know, how does that look that you have someone from lab corp. and we decided that wasn't an issue. the incident that this doctor, dr. bets in phoenix told us about was back in august 2014 and he later started using a phlebotomist from lab corp. that was in early this year. >> we have to go. i'm curious, regulators, where are they in this whole story? >> the fda showed up unannounced at their door in late summer and spent three weeks there and following that inspection the fda communicated to theranos very clearly that they had to stop using their nano taners and fingerprints. >> has there been any response after your articles fit. >> by the regulators? >> yeah. >> not publicly or officially that i have seen. i also know that there has been a recent audit for the centers for medicare and medicaid services who are the chief overseers of clinical labs in
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this country. it will be interesting to know what the outcome of that audit was. >> i gather the story is not over yet. we will see. >> it is not. i don't think it is. >> thank you for joining us. >> all right. time for a cnbc news update with sue herrera. >> hi, bill and kelly. here is what's happening at this hour. nearly 2000 jordanians demonstrating in eamon to protest the increasing violence in the west bank. they waved flags and marched in mass up the street where they were confronted by jordanian security forces. emergency crews continue to clear debris after mudslides trapped hundreds of vehicles on roads in southern california last night. flash flooding sent mud and boulders raining down on roadways north of l.a. today thousands of drivers are being forced to take alternative routes and more rain is forecast. wow. pope francis is a big hit in the united states. a new knights of columbus poll shows 74% of americans surveyed viewed him as favorable. that's up from 58% right before
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his trip to the u.s. among catholics his popularity rose to 90%. cleveland cavaliers star lebron james is out for the rest of the pre-season. he received an anti-inflammatory injection in his back which will keep him off the court. cavaliers open their season october 27th against the chicago bulls. you are up to date, guys. that's the news update. i will see you again in just about an hour. >> thank you, sue. >> 30 minutes to go. this is where things get interesting. the dow is moving higher, up 56 now, the s&p adding 7, the nasdaq hanging on to gains with about 10 right now. >> we will find out what a leading trader is watching in these final and most important last moments of trading for this week. >> also coming up, when fed officials talk does wall street really listen or are people just getting more confuse snd stay with us. d snd stay with us. tay with us. ? stay with us.
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welcome back here. stocks holding on to gains to close out the week. one reason today anyway could be that west texas crude, take a look at what's happened, it's on the session about a dollar higher today, about 2%. still down about 4% this week, though, but investors will take any sign they get that the energy space is stabilizing. >> all right. let's head into this last half
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hour and talk with gordon shar lap of rose en blatt securities. the markets have weathered mixed economic data, mixed earnings reports. it seem as though bad news a good news gn for this market. >> a little bit of that. i think overall markets somewhat subdued today. as we are expecting a little more action at the gng of earnings season but i think that will pick up. we do have a minor expiration today and we know that's going to be a major liquidity event. >> they are hugging the strike price lines. >> yes, they are. overall the market has been unremarkable. the fact is that the fact that they were able to sustain td up trend, that they didn't give back yesterday's gain, i think a lot of the guys are pleasantly surprised about that. >> is the perception that the fed is not going to be raising rates anytime soon? we had weak inflation data this week that still suggests that we will not be near their target for inflation right now. >> investors are looking for the truth. what is the truth? that's what everybody is trying
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to find out. >> a lot of confusion. >> no one is clear what the signals are. you saw gold it was -- >> yes. >> it's making a little bit of a move but then today is jumped its head and seems to be packing back in a little bit. equities thought they would be a little overdone, they continue to rally here. what is the truth? we are trying to figure it out. a lot of guys are anticipating that something is going to pick up. we will start to see pick up in volatility and volumes here. >> we will see. let us know when you figure it out, too. come back and tell snus looking sharp today. >> thank you so much. you want something, i don't know what it is, but we will find out. >> thank you both. if you feel like members of the fomc have been talking a lot since the last fed meeting you're right. our resident fed expert steve liesman is here to tell you just how many times they have spoken. >> let's take a look at what's happened as we've been talking about this week. to the probability of a rate hike over the past two weeks, it has gone at an extraordinary
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change. two weeks ago we were at a 52% probability for a rate hike by january. that's now been pushed ahead. in just two weeks' times to 53% in march. this has come at a time of a whole lot of fed speak raising the question is the market hearing what the fed is saying. take a look at our count here of the number of speeches between meetings between the january meeting, oh, around 20 and then it crops up to 30 and now, folks, for october, these are just planned speeches, 42 by fed officials doesn't count the interviews and everything like that. what moved the market, take a look here. these are three things that happened that have moved down essentially the december fed fund futures market to price out a rate hike this year. item number one, the statement by the fed, when it came out it talked about weakness in overseas growth. number two, the jobs report, big step down here and the final nail in the coffin for a rate hike this year as far as the market was concerned were the
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tandem saying no right hike in year. take a look at this bump right here, that's janet yellen talking saying that she thought there was going to be a rate hike this year or should be a rate hike in year. is the market getting it right? i want to show you one other chart if we have it loaded which is the market versus the fed here. what you see is bad news was bad news for a while and coming down, bad news became good news as the market vrallied as the fd fund's probability declined. it's probably likely the fed doesn't hike this year but the question is are they too much on one side and to gordon's question on the truth, the appropriate answer is you can't handle the truth. >> steve, it's notable, though, it's going noticed by much of the public that the fed board, the obama appointees are more dovish and the regional presidents are more hawkish. so far phil graham writing the other day suggesting they should perhaps adopt more of a committee style approach with a 3-2 balance or whatnot like we
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see at the sec and cftc. >> there is a committee approach and it does require plurality to change the policy and the policy statement, they all vote on t i'm not precisely clear what phil graham is talking about right there, but there is also an internal etiquette where the governors don't often -- hardly ever dissent from the chair and that really has raised questions among some people. with tarulo and brainer speaking out, with those comments they made a response to all the hawkish talk which was a big part of those 42 speeches we talked about or were they then moving away from the fed chair? that would be more interesting. >> so true. >> they try to be more transparent with all the fed speak but it makes things more confusing is what the net effect is there. thanks very much. see you later. heading to the close, 20 minutes left in the trading session here, holding steady again as gordon pointed out a minor expiration day so the traders maybe are hugging those -- you will see a lot of
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round numbers, zeros and fives td strike prices with the do you up 60 points. >> the s&p adding 7, the nasdaq up 11 on the session. >> netflix releasing its first theatrical motion picture but at the same time it's streaming it on netflix. can the company have its popcorn and eat it, too? kevin o'leary will join us to talk about that next. >> and twitter may have a new friend, ex microsoft chief steve bomer. we have that story coming up.
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talk about that next.
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see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. 15 minutes left in the trading session here with the dow up 61 points, capping off a pretty narrowly traded week here. >> shares of netflix lower on the session today, the streaming giant entering new territory, releasing its first major feature film to customers, it's called "bes of no nation" you can also catch the movie on netflix. >> this is a high brow movie. the dual release has not been popular with the big movie theater chains and it is a different strategy for the company and for hollywood.
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owe liary funds principal and shark tank star kevin owe liary who knows a little something about how hollywood works joins us now. i thought you were a shareholder. why aren't you a shareholder? >> this company doesn't return any capital shareholders, it pays no dividend and it is the tesla of media and content. you love tesla as a car, i hate the stock. same things happening with netfl netflix, i think the product is great but people don't realize they have chaungd their business model. what i love loved about the purity of netflix version 170, they aggregated content, curated t served it up to you, took no capital risk in making it and you paid a subscription fee and their only cost was customer acquisition. they have suddenly got into the movie business and that business sucks. >> why? kevin, if the point is they are not actually trying to be in the movie business so much as make this a way of avoiding the
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distribution system to give people another reason why they should pay 10 bucks a month for netflix going forward. >> unless they get into creating their own content and taking the risks of scripted and unscripted production, they can't hold on to their subscribers and that is not version 1.0. that's version 2.0. must be that they have competition from the hikes of hbo and internationally from other aggregators that are streaming. when you create scripted and unscripted production you are taking horrific risks with huge volatility, 100 years of production in hollywood tells you that. the business sucks. >> but you of all people should know that the entrepreneur in reed hastings is going to want to take risks like this. he has already had success in original content in television, making house of cards and other things. what's the next step? motion pictures, wouldn't you think? >> no i wouldn't think that. what i would think -- look, reed, i love that guy, i love
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any entrepreneur, you know that about me. what i would have done is continued to aggregate a user base. keep going for the prize of having as many people around the world using your platform and then go to those who are taking the risks of making the house of cards and making theatrical releases and giving them all of those eyeballs. i love that business model and while you are at it, reed, pay me a 3.2% dividend and i might buy your stock. that's simple. >> kevin, dividend at this point when they need to be investing so much in this business, the cash flows are a question doesn't really seem like the most pressing option. >> i love that excuse, kelly. i love t i can't afford to pay you any of the profits, you shouldn't get any because i'm so smart i know what i'm doing with all the capital until all of a sudden gravity strikes. return of capital is where 71% of the returns have come over the last 40 years in all sectors of all companies of everybody listed. it doesn't matter if you're growth or not growth. i will fight for dividends until
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the cows come home. >> barry diller was on squawk box this week talking about the traditional -- in this case traditional linear television being antiquated because the content pipe as he put it is so large that that is where the future is. why isn't content a good play for them? especially let's -- let's blue sky it for a moment. let's assume they've done well with the emmy's and other awards, let's assume with this high brow motion picture releasing tonight heaven forbid they should get an oscar nomination at the same time. >> i love all that and there's more magnetic than investing in hollywood movies and going after oscars. i've done the same thing in the past and that's why i can tell you with certainty it sucks chlt you never get your capital back. look oefr 10 or 20 productions you do it because it's fun but it's not profitable. in the aggregation of all movies ever made since there was talkees, some did that research,
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i'm sure it's out there, the return has been 7% with unbelievable volatility over 70 years. it's not a great business, guys. >> i'm rushing to imdb to see which movie kevin o'leary produced here. >> are you going to watch this movie, kevin? >> i will. by the way, i was producing seven years in tibet when i saw it with brad pitt, i felt like i was in tibet for seven years. >> you're going to watch this movie? >> sure. go not. i'm a netflix subscriber. i love the product. it's tesla. i would never buy the stock. >> keep your hands on the wheel when you drive that car. good to see you, kevin. thank you. >> take care. bye-bye. >> kevin o'leary. the dow is up 52, oil is higher, the dollar is stronger on the session today. >> art cashin just pointed out $500 million to buy on the close. so maybe a little bump into the close here. now, if the world feels like it's back in balance today that may be because david darst is
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back with us on a friday, the way it should be. he joins us next for his weekly take on the market action after this. that tv quiz show. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that.
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we have eight minutes left in the trading session with the
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dow up 55 points. it's friday, therefore, it must be once again david darst independent investment consultant. welcome back and tgif. >> nice to see you both. >> so is bad news good news again? the market really seemed to pick up some momentum after it became a little clearer with all the inflation data and with those two fed officials making it clear the fed is not going to be raising rates anytime soon here. >> on the way here i googled something saying boxer who could take punches and not get knocked out and jake lamata who is the bronx bull or raging bull was ledge a dear for being able to take punch after punch and not get knocked out. he is 94 years old, he is still alive. >> he is still around? >> he is still here. july 10th he turned 92 years old. he was legendary for being able to take punches. i can't believe the punchts this market has been able to take. philly fed, empire state, chicago, industrial production.
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>> china. >> factory orders. china. okay. jobs. and it's still sort of motoring along with the three m's and that would be motor vehicle sales, that would be monetary stimulus and that would be mansions. that would be houses. okay? those are the things that are keeping it alive. we had an asset allocation committee meeting this morning and what you basically got to look for is xi jinping to say let's do something with the state owned enterprises. the market could be up 1,000 points if we got stimulus moves that were strictly reformed -- >> kind of moves. >> we are going to reform them further, distribute some of the shares. you don't have to go crazy with this. some people call for that's the way to get the consumer going in china, but china has got to do something. in addition to this right now we have this seesaw teeter-totter kind of market. oil was up 8% last week, it's now 10% this week. and so i've said last year was a
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taylor swift market, shake it off, shake it off, shake it off. this year is an abundance of nothing market which basically we go up, we go down, we really have not done anything. >> and investors are confused as a result. >> there's confusion as a sult of that. profits need to come forth. it's been a very mixed picture so far and you get punished if you don't come through. stay with what's working. home furnishings, home building, housing, building materials, bill, toys, footwear. we've talked about this. stay with what's working. don't try to go bottom fishing just yet, although many of these oil companies do have nice yields and if they don't cut the dividends, this f. they don't cut the dividends, you're going to be just fine holding them for the long-term. >> all right. >> warren buffett's partner charlie munger has made the point you can buy a 6% growth on equity company, if you buy it at a good price you are still not
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going to earn better than 6%. buy companies that have high return on capital. >> good to have you back on friday. >> nice to see you and be here on friday. >> it's an investment course in three minutes. i love it. we will be back with the closing count down to wrap this week up in just a moment. stay tuned.
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>> this looking like my cardiogram. >> you got a lot stronger as the week went on here. the nasdaq had the best week, up 1.1%, followed by the s&p and then the dow. oil this week, david darst was pointing this out, very volatile the last couple of weeks. down almost 5% for the week. here is the one i want to see you talk about quickly, look at the vix for the week. we are down 11% this week down to 15 right now. >> we are back to where we were in the early part of august before all that concern about china and china gdp over the weekend and a lot of people think it will be a 6 handle in front of it. >> you hope it will have a 6 handle. >> if anything less than that we will definitely have a problem. the market seems to be anticipating the high 6 os. first data, i said yesterday before the open everyone would be happy go first data close wd a 16 handle. 16.03, we are going into the
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close. remember, they priced yesterday $16. william. >> bob, thank you very much. we are going out a with gain of 75 points on the bell. ringing the bell at the new york stock exchange, representative of the european american chambers of commerce and cast of fx networks fargo. have a good weekend. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. and we saw a little bit of a pop there right into the close. we knew there was a buy order, but the dow up 75 points, the s&p up 9, half percent gains for them. the nasdaq was bagging today, a third of 1%. by the way, ge, general electric, bringing sexy back maybe. it was really pacing the dow today and trading near 52-week highs. again, we had earnings from ge, part of that turn around story which is inspiring investors, helping lift markets here as you can see.
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joining today's panel we have cnbc contributor evan newmark and sara icen and tim see more. welcome one and all. evan. >> you don't work for ge jen more, you don't have to call it sexy. that was reaching a little bit. >> we've been hard on some of these companies that haven't responded maybe enough to investors' concerns over the years. don't you say that this is now a company who is really starting to get some mojo? >> i don't know. it's hard to say. if there's a lot of global growth in the industrial sector and healthcare sector ge will do fine. if not it won't do fine. i have to say their commercials which are flooding the world. >> i love those commercials. >> they are annoying me a little bit also. >> hold that thought. we actually have breaking news to get to. sue herrera, what can you tell us? >> kelly, earlier there was a report that dow jones and some of its affiliate companies had been -- and publications -- had been hacked by russian hackers.
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dow jones putting out a statement refuting the bloomberg report of earlier today. they say, quote, to the best of our knowledge we have received no information from the authority about any alleged matter. we are looking into whether there is any truth whatsoever to this report by a competitor news organization, referring to bloomberg. that report was that the fbi was looking into it, the sec was looking into it as well, but right now dow jones putting that statement out saying to the best of their knowledge we have received no information from authorities about the alleged matter. kelly, back to you. >> all right. sue, thank you. we will continue to follow the story. evan, you just brought up these questions of global growth. today, i don't know if we can show it again, in terms of sectors industrials were still struggling and tears. i guess that goes back to the question of just what are global growth pros texts and what if china data surprises to the up sides. >> transports did not participate as strongly with the
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overall broader rally. october is turning out to be a good month. >> it's been a beautiful month. i'm glad you brought that up. somebody to my right here has been a little skeptical for most of october. >> but i think what's having -- >> i haven't even been here for most of october. >> i noted that also. >> it's in the face of global growth concerns, not just in the u.s. where the inflation numbers have been slacked, it's been a tale of two economies in the u.s. some of the labor market dat it quite strong, jobless claims, job openings hitting a record high, the manufacturing sector and price pressure are not there. this idea that the fed is going to wait long for lift off has fueled a giant rally. we saw inflows into bond and equity funds this week according to bank of america and merrill lynch, something we have not seen in weeks. >> the real question is whether the oil market and whether the energy sector -- the equity prices are getting it right or whether they are not. i mean, one of two things is true, either the oil sector and all those energy companies their
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stock prices bottomed in august and september, either they did or they didn't. >> what did you think about schlumberger today. >> sn. >> i don't think they are the big tell here because it's a services company. i'm looking at exxon. exxon performed really well today. >> tim, do you want to add any color to this? >> on schlumberger one of the things they said yesterday was that they saw the e and p names that they do service are allocating all the differential in oil prices that were slightly higher in the last few weeks are putting towards their balance sheet not cap ex. on the production side i think the pull back of production and lack of investment in new production in continuing and that's at least a back step under oil. i think the ultimate question is whether the oil and energy assets and the commodities should not have rallied if not for the weaker dollar. there is an interrelationship here. from the production side it's actually a pretty good story. i think you've actually seen the top of u.s. production for this cycle, you have an opec meeting this week or at least a talk of
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opec and non-opec getting together. i think the risk is to the upside on cooperation even though i don't expect it will go to the moon. >> at the same time we are also going to get these china growth figures. it does seem like people have written off chinese groeft as an investment thesis. what happens if we get an upside surprise? david darst alluded to maybe state owned enterprise reform that might be needed. what do investors need to see to start believing in the china growth store again? >> i think the market is positioned to they can handle a 6.8 which is the whisper expectation. i think if you get something to the upside you could see more of a rally out of china. shanghai was up 6.5% best rally in four months, the china volatility story is lower than it is here. i think so consumption in china continues to be very strong. every company that i care about globally is telling a story where china is relatively decent. >> it's not every company. look at yum! brands and hugo boss, nestly cited client as a
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concern. it's not uniformly strong. strong for nike and apple, we will see if it's strong for coca-cola next week and some of these other staples companies. >> on that note let's get out to bob pisani on the floor tracking all the action in the stock market this week. bob, earnings, some macro data that first data oip closely watched today. >> 16 closed above that. the major indices were up fractionally this week. that was good enough for most of the traders. three straight weeks of gain for the dow. why do i say good enough? there was a lot of nervousness going into the, season. there is still a lot of nervousness, we are just starting, big banks like citi and bank of america and the regionals like suntrust reported earnings about in line with expectations and that was good enough in the current climate. yes, there was slower investment banking, yes, low interest rates, yes, it hurt profitability but there was also modest loan growth and extent credit quality. while the banks were weak earlier in the week they rebounded toward the end, you see nice gains here.
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two big global industries reports today. ge and honey well both scrutinized for signs of any ramp pant pessimism on the global committee. both of them beat on the top line how honeywell was a lit light on the revenues. the big mover next week china gdp out sunday night. widely expected to show growth in the high 6% range rather than 7% range. you might have seen some of that concern today, metals and mining stocks like alcoa and freeport were market laggards today ahead of that report. >> yeah, so again, some evidence that companies who are pursuing their own turn around strategies we're starting to see that, but i bring it up because of walmart this week and there are so many large companies trying to basically change their business model. there are some like walmart telling us we are going to have to wait for a couple of years. >> you have two things going on there. with walmart it's the higher labor cost which actually is a theme, we heard about it from
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danny meyer today, talking about the no tipping, but gets back to the higher labor costs at the same time where you do have these global growth pressures where wef not seen a huge recovery in some of these companies. >> the thing that's going to be interesting is whether over the next few weeks the market actually looks through -- i mean, we've been hearing the slow down in global growth, that's been going on for months, since really probably middle of spring and we've been hearing the global slow down is coming, it's coming. the bond market has responded to it a little late, the ten year still around 2%, which is strange. >> even though we've seen near record selling by foreign governments of u.s. treasury holdings which as we were talking about yesterday if you told anybody that was going to happen and instead interest rates would fall -- >> that's providing a lot of support to the market right now. if you can get a yield on the s&p 500 of 2.5% plus or minus, a lot of energy stocks are giving you north of 3% or you have a ten year yield at 2% and wages -- there will be wage pressures. it may take a little while,
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rents are growing, the jobless numbers as sara alluded to earlier are good. the market is looking through earnings right now. it wants there be to be better news than there has been. >> in this global growth sluggish environment there are sectors that are supposed to yield good earnings growth. consumer discretionary, healthcare and technology are the favorites. the question becomes is it priced in or broad enough. >> you see mining stocks like glenco glencore, bhp those stocks hit all time close or near all time lows three weeks ago and have been rebounding. whether or not it's a head fake or sustainable we will have to see. >> people then plenty eager to go bargain hunting in the emerging market space and some of the companies we have mentioned how are we going to know if it's an all clear or iffes in going to be one of those dead animal bounces? >> i'm not sure what dead animal this is. i would say it's all about positioning. >> it's always a cat. >> we will call it a cat or a rat possibly.
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but it was ultimately a case where positioning was so, so poor in terms of any type of risk appetite and that's why you have seen a major rally back. why a win even with mack kau not turning dramatically can be up 40% before announcing their numbers yesterday which weren't so good. the weak dollar trades, commodities, gold, industrials, i think these are largely working but some of the companies you heard this from kansas city southern don't have the global groelt story to support t i don't think anything has changed. i would say that i think the fed could be more in play if you think that the world has gotten calmer that's what they said they needed to see. >> after that -- i mean, it's interesting as well because we just heard brainard and other members of the fed board talking about maybe we need to wait until 2016. how much is it going to take for them to say maybe we can go in december afr all? >> everything that has happened in terms of macro data is not all that different than where we were in september and they were very clear that the global
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factors is what put them at bay. oil prices settled down, volatility back at 15, china is in a much better place. why isn't this a backdrop they could now go? >> because job growth has slowed down for the past two months and consumer prices showed they fell in september. >> i think the september job number was a seasonal number. jobless claims are still back at 15-year lows. i don't think it's changed. i don't think it's gotten better but i don't think it's that much different than where it was. >> is it fair that our ten year and inflation expectations are pinned to global doechlts? >> it's, you know -- i mean, i've been sh give' been saying this for a long time. you're starting to see whether in certain cost segments you're seeing reasonable inflation. i don't think it's reasonable for there to be a 2% yield, but i've been wrong on that for most of the year and a half. five years if you want to go even longer >> you also have more talk and this is thanks to policymakers that the european central bank
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will embark on another round of easing. >> i can't bear t i don't think kelly can bear it. >> i don't think anybody can. but that's no reason for them not to do something if it's the right thing to do. anyway, we will leave it there, tim. thank you. preeshtd your time. much more coming up on "fast money" with him and the rest of the gang talking mcdonald's versus hip olt lay, amazon versvers versus google. the traders will pick the big winners for next week. coming up here billionaire venture cap list veno coslaw tells us his thoughts on silicon valley generally speaking. >> and steve ballmer announcing that he owns more shares of the company than ceo jack dorsey. we have the details in just a moment.
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welcome back. twitter one of the big winners on wall street today. this after former microsoft ceo steve ballmer tweeted he now owns 4% of the company, more shares than jack dorsey and the shares responded up 5% on that news. julie boorstin has the latest for us now.
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>> kelly, that's right. twitter shares closer up 4.85% after steve ballmer's unverified account at which timed good job, twitter, twitter moments innovation, jack ceo leaner more focused glad i bought 4% over the last four months. he's now, there was a lot of confusion because it was unclear if the account was genuine, it's not a verified account, but a source familiar with the matter and close to ballmer confirmed to cnbc that it is ballmer's account. this makes him the third largest individual shareholder of twitter behind evan williams with nearly 7% and the saudi prince who has just below 5 rs but puts him ahead jack dorsey with 3.2%. over the past three months over which ballmer says he accumulated his stake twitter
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shares declined after dorsey took on the role of temporary ceo and have recovered with the launch of new content tool moments and dorsey's permanent appointment. i reached out to twitter the company says no comment. kelly. >> and stay right there. i guess also because you need a 5% stake to file with the sec. twitter couldn't verify steve ballmer's account and whether or not he had 4% of the company. >> twitter wouldn't say anything at all. i thought maybe they would give some commentary on having microsoft's former ceo commenting on his enthusiasm about the company. but they are not obligated to do any disclosures until they hit that 5% mark. >> i have a couple of comments. >> go ahead. >> he may not have a comment but i have a comment -- twitter may not have a comment. first of all, the guy has to learn how to tweet. that was one of the worst tweets. >> you don't even tweet. >> i don't tweet. the second is, you know, nobody should really follow what steve ballmer does. he is a notorious
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overpennsylvania pair. when he was at microsoft he overpaid for skype, he paid $8 billion for skype, they bought -- >> noek i can't handset business. >> he paid more money for the l.a. clip sneers but the clippers are doing all right. >> i think he spent $2 billion. >> they had a great season. >> okay. >> they did. >> you can make excuses for him. my only point is don't necessarily do what the rich multi-billionaire does. >> the other joke is not just does he overpay he is not one known to spot key innovations in technology given some of the problems -- >> the iphone for years, didn't think it was going to be a big deal. missed that one a little bit. >> maybe he skyped the announcement about his shares more than he tweeted it. >> there will be some people bottom fishing in twitter as it came under pressure until the last several weeks, that includes bill miller who told us as well he thought twitter at 19 would be eek have a tent -- it
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doesn't get quite there, but facebook at 19. do people start to believe in the jack dorsey turn around and other strategic moves he is making. >> there will be a lot of announcement from twitter, permanent ceo, announcement of layoffs and the new executive member of the board. the launch of moments which was called project lightning. they're trying to show they are improving the structure of the company itself with the layoffs and new chairman but also the product and improving the product. i think it will be really interesting to see what their user numbers are when they report their next quarterly results, but i think there is a lot of hope that with some of these new products they might start to gain more traction and add more users. i think they still need a little bit of time to see the impact of these changes and also roll out more product changes. moments still a very preliminary product. >> right. and in the meantime they can at least verify his account. >> they d i think he is verified now. >> is he now? >> yeah. >> yeah, but when he first
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tweeted he was not verified. >> i see. all right. well, he got that out of t julia, thank you so much. our julia boorstin. nevada the latest state to ban sports sites like fan duel and draft kings. we will talk about that coming up. first, don't miss t this is my test ride in carnegie melon's self-driving car to see how the vehicles communicates with things like stoplights. >> you look terrified. >> i do. this is the first time i have seen t i'm only in my 60's.
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. earlier in week tesla announced it's latest car update with auto pilot capabilities. is the world ready for a self-driving car and is the technology and infrastructure ready for the world? carnegie mellon university in pittsburgh home to engineers that have been working on autonomous cars for three decades, we visited the team and went behind the wheel with carnegie melon. >> just like cruise control buttons. >> autonomous driving. >> whoa. who whoa. >> so just turning the steering wheel. >> did it no no car was coming that way? >> it knew there was a car there. >> do you ever go like this when you pass a car? >> i try not to do that so people react normally to this car, it's like a normal idea,
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they have no idea some crazy thing is happening. >> glad you said that. >> you can see the classic light screen. >> okay. okay. so it knew that it was a red light. >> yes. >> how did it know that. >> we have a device that tells that it is red. >> your car is communicating with that stoplight. >> that's correct. >> that's because of this being a special top light. >> that is correct. we work with the authorities to install these devices. that's using vehicle infrastructure so it can communicate with the infrastructure, knows what the status is. >> that's called vehicle to infrastructure. >> yes, v to i. >> will it respond to voice commands? >> no. >> everything that's done is done on a touch screen. >> that's correct. >> it talks to you but it won't listen to you? >> that's correct. >> sounds familiar. >> so it seems like the vision for right now is a car that drives itself on major roads and
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then you kind of drive it in other situations? >> yes. on the screen you see that the car in front it basically keeping a safe distance between those two cars and that distance would increase if the speeds are higher, degree of speed is lower. >> and like now he's stopping. >> he's slowing down. >> and we slow down, too. >> once he clears -- and it is trying to change lanes. you are seek an open space in the left lane. >> yes. >> changing lanes. >> so you think if you guys did it right this is what all autonomous cars would like. >> it could be like this or on the squeal like cruise control. >> sorry. >> please check the computers. >> it sounds like we do have a problem there.
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>> was it a problem with that -- >> listen to what it said. >> yeah. is this the equivalent of a blue screen. >> please check the computers? >> not exactly but we have many computers in the back, one of them is not -- >> do you want to go check the computer? >> that's what we will do, yeah. >> my thank to professor kumar and the whole team at carnegie melon. >> there was a little hall 9,000 at the end. please expect the computers. >> there was a lot of background noise. just like it is when you have a lot of loud computer units the whole trunk when you open up the back has a bunch of computers and it's quite loud when you are sitting in the car. >> it looked like a normal car with a steering wheel and everything else. >> it's a key difference between what they're doing and what google and some of the others are doing. they're partnering with gm, that was a cadillac. >> it didn't look like a futuristic. >> they wanted that. they said we want to preserve
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this look of the traditional feel. it has a camera on top of the car and radars that can sense what's going on around it. in the middle where you have the gearshift there is a red button that flips it from autonomous to manual mode but also importantly this car is not voice commanded. everything that he did in this round to take me around was pre programmed. you can pre program which this car has done to drive from new york to washington, d.c., but it's not necessarily reading the situation as it unfolds and able to respond to that in your voice commands. >> now, i want to know is this the team that uber poached from carnegie melon or is this the team that's left behind? >> apple is taking their professors, too, right? >> and actually what carnegie melon does is oftentimes partner with the private sector. there are several different pieces of the robotics technology and autonomous car technology but they are not opposed nor have they been for a while, so google came to pittsburgh for this same reason because basically they wanted a
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couple of their guys and they ultimately came to pittsburgh and did that microsoft has a bunch of former carnegie melon professors way up top in the company and now it's uber. you can actually watch as technology unfolds, they keep coming back to the source of a lot of this development. >> i just have one question. when you first got in the car i notice you kept on looking at your feet. were you looking for your own brake? >> no. i think that was looking at the gearshift in the middle that switches it from regular to autonomous mode. you can feel the thrust of it. >> i heard the acceleration. i felt -- it felt a little dangerous. >> they've been doing this how many years in. >> decades. there is a national competition as well for autonomous cars that they have been winning for decades. so this is, again, a different approach to what google and some of the others are doing but the vanguard. all i have to say this, in some ways extreme will he advanced, you don't even notice it, in some ways extremely primitive. at one point it ms. red a stoplight, but you could see the
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apprehension on my face. >> the other driver or your driver? >> i don't even know who is the driver anymore. you can check out much more at the spark at cnbc.com/the spark and my thanks to everybody for helping to make that happen. time for a cnbc news update with sue herrera. >> here is what's happening at this hour. united airlines says it's new ceo oscar munoz has been admitted to the hospital but gave no details or explanation. dow jones reporting he had a heart attack. the airline says it canceled talks yesterday between munoz and labor leaders. he was named ceo last month. nbc's sister network e news is reporting that former nba star lamar odom has woken up from his coma and able to communicate. e news says he is no longer using a breathing tube. nbc has not confirmed that report. as floodwaters and mud swemt through traffics in southern california with one person captured the chaos on video. the driver using his cellphone
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to record the debris swirling around his car. 115 vehicles, 75 tractor-trailers were swallowed up by the mud. well, on this happy day for these two little mutts, every dog has its day but yesterday was an especially good one for a setter span yell named tilley, she received the wash tone yan of the day award from washington state governor jay insly. this for standing guard for nearly a week to protect phoebe the ba set hound who fell into a cyst earn before both were rescued. on three everybody go oh. that's the cnbc news update this hour. >> i'm trying not to tear up. >> tilley, she deserves more than a day, but anyway she's having her day today. >> man and dog's best friend. thank you, sue. >> sure. up next, the great immigration debate. is a path to citizenship like jeb bush supports the best thing for our nation or is ted cruz correct in supporting stricter
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immigration reform? that's next. plus billionaire investor vin nod khosla joins us for a rare interview. find out where he's seeing opportunities in in market. coming up. ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. that's next.
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opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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here is a look at how we finished the day on wall street. some expirations helped the dow pop 75 points, also strong earnings from ge, that stock at 52-week highs, the s&p adding 9 points, the nasdaq up about 16 on the session today. we have a market flash on brazil now with our seema mody. seema, what's happening? >> some of the brazilian assets on the move. an influence newspaper is reporting that the brazilian finance minister is preparing a letter of resignation and shall submit an application to the brazilian president, but the article notes that the resignation may not be accepted. still investors are not seeing this as good news, the finance minister has been seen as the man behind brazil's economic reform plan. so if he leaves, there will be further political uncertainty and that's why you are looking at the brazilian etf as well as the currency on the move. back to you. >> thank you, seema. >> rial also near a record low.
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political and economic head winds for brazil. given was the latest to downgrade it, s&p already has. brazil's credit rating in junk. a lot of the companies have been downgraded. this is an economy you talk about the pain in emerging markets and in commodity exporting nations, this economy is suffering from both of them. >> we had scott mine ert actually saying brazil was one area he was watching. you get a development like this and makes you wonder if people are look to go bottom fish too heavy. >> yeah. >> you're not interested. >> brazil has been a train wreck for quite some time. >> much more so now. >> it's the seventh or eighth largest economy in the world, in recession, important place for american companies doing business and comes at a time when other emerging markets are suffering as well. every time china puts out a bad number brazil gets hit through the markets. >> we are less than two weeks away from the next gop
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presidential debate it's going to be right here on cnbc. one top issue dividing the field is immigration. ted cruz supporting stricter reform while jeb bush favors a path to legal status. joining us now is tom ten cred dough and terry schilling from the american principals project. terry, let's begin with you, who do you think has it right? >> i think they both have certain aspects right. if it came down to it i would be more along the lines of jeb bush, however, both of their plans are very similar. they both address border security and they both support increased illegal immigration. that's the big story here. there's a national debate right now going on about whether or not immigration reform is good for the country and whether or not more immigration is good or bad and that's -- that's what's really separates these two plans. >> jeb bush having a path to legal status is far from what ted cruz is saying.
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tom, you think that it is cruz who has it right. why do you think a path to legal status is a bad idea. >> first of all, you're right that that is what separates them. it's not the issue of legal immigration it is the path to legal status here and citizen shi. the reason is because of course the reason why that's a bad idea is because of course it is so blatantly unfair. it is unfair to the millions and millions and millions of people who have come here and done it the right way. waited in line, paid their dues and get here only to find out that, hey, do you know what, if i had come the wrong way, if i had just snuck across the border or come in on an visa and overstayed i'd get the same thing. big deal. it is so blatantly unfair that i think that that is one of the major flaws with both the bush plan and of course anybody who is a little more open borders than ted cruz and that's a lot of people. >> the first thing i would say to that is actually governor jeb bush has come out in support of
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a pathway to legal status because it's unfair to give them citizenship at the -- after breaking the law. now, that's where this is really at. we can talk all day about how it's unfair, but the fact of the matter is that governor jeb bush has proposed a proactive plan that addresses the issue. >> yeah. >> he has called for an exit entry registry system, double layer fencing. he is addressing these security issues as well as ted cruz has. the path to legal status is fine. >> not nearly as well as ted cruz. >> what's that, tom? >> not nearly as well. i'm saying he hasn't address it had nearly as well as, quote, ted cruz has because ted cruz has a much more i think definitive plan for securing the border. there's two things that we are operating under here that i think are false. and they underlie the entire debate on immigration, especially within the republican party. and that is, one, false assumpti assumption.
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number one, that hispanics vote primarily monolith clee. absolutely false. number two that immigration is their big issue. these things have been pushed so hard on the media and by a lot of people who want to see open borders that they have gotten a lot of republicans to pie in, including jeb bush. in fact -- in fact, hispanics vote the way they vote on the same -- for the same reasons that other people vote. poll after poll after poll shows it's jobs, it's the economy, immigration is way at the bottom. >> but congressman -- >> terry, we have to go. very quick last word. >> it's going to be very hard to get hispanics and latino voters talk to you when you are talking only about deporting their families. we need to build consensus and build a path to legal status. >> we will have more on this in a couple weeks. hot push u. appreciate. it. again, we will continue to hear more of this debate in the weeks
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as we head up to that event. october 28th right here on cnbc. coverage starts at 5:00 p.m. eastern time don't miss a moment. the data storage market is hot with pure storage going public earlier this week and up next named venture capitalist vine nod khosla joins to us talk about where he's seeing opportunity. and the state best known for its casinos banning fantasy sports. the nevada state gaming commission now trading sites like fan duel and draft kings as gambli gambling. what will this mean for the major players? northeast coming up. we're gonna get bigger. we're gonna merge with cableworld. (exec 1) cableworld? i can't stand those guys. (exec 2) they're the worst. (exec 3) they're totally incompetent. (exec 4) that company stinks and i mean they smell. i used to work there. i had to breathe through my mouth the whole time. (cole) shh, shh, shh, they're here. (newhart) this is gonna be fun, firing everyone. (vo) get rid of cable and switch to directv. call 1-800-directv.
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venture capitalist on the hunt for promising startups in the tech arena. it's found its way to nutanics. the company which many expect to go public soon is reported to be valued at more than a billion dollars. panday is founder and ceo and vinod khosla is founder. what is the promise of nutanics in what seems like a crowded space? >> well, it's not really a crowded space. there is a large shift from the old architect tours that actually sun micro systems started represented by emc, dell, cisco and others. that's being obsoleted by the new cloud infrastructure that amazon and google have pioneered and almost all the action is in
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startups that are reinventing that infrastructure for the new enterprise. it's a very large market. >> and it's a market actually derash we had this big new on, dell and emc combining, they want to be able to sell people an all in one solution. would you view them now as a beefed up competitor? >> well, i typically don't look at this as a competition as much as a cooperation. the consumption model is changing because of what people see in the public cloud and people are trying to figure out what it means to bring the same consumption model to the private cloud as well. so there are services that you rent that's the public cloud and services that you buy that's your private cloud. there's going to be a yin yang between buy and sell. we are trying to figure out what it means to build the next generation cloud infrastructure on premises where you can really blend computer science and
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design together. so you have all the goodness of google on the back end and the right brain which is about design and user interface together in one and that's what makes for a rare combination. >> so what is hyper convergence and how much more are we going to be hearing about it? >> if you look at your personal lives we have seen a convergence of multiple devices, your feature phone, camera, e-mail device, pda, video camera. pretty much everything came together in what people call the smartphone. that's the exact same phenomenon that's happening in the enterprise world as well. people don't want to buy these things piecemeal so i think this phenomenon of convergence is a natural one, let's people consume things faster, cheaper and better. >> and that's a good way to conceptualize this. vinod, does this represent the
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transition. many have said we're moving from a consumer to enterprise cycle. is that what this and the dell/emc deal is all about? >> consumer cycle is definitely driving the enterprise cycle. what google and amazon and to an extent microsoft did in the cloud for themselves is obsoleting the $100 billion in enterprise data center that products in companies like emc, dell, cisco, oracle, all those are being obsoleted and replaced ball of the new demands and growth from consumer services. that's what's exciting about this opportunity and because these traditional players really don't have any products or the expertise to do the new products they are being invented by innovative startups like nutanix. >> by the way, while we have you and are talking about innovation, square, you are on the board, have a huge stake in the company, it just filed its
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papers to go public in week. first data today, you know, yesterday having a bit of a struggle with its ipo. what is the real opportunity for square not to get kmod advertised in the same way we are talking about servers not getting kmod advertised. >> i will refer you to the s fund to talk about it. obviously i can't comment on it. >> well, i mean, just generally speaking you still must support the vision despite some of the stumbles we've seen in the ipo market this week. >> speaking to the financial services market in general from the lender clubs to the stripes and others, everything in financial services is also being renovated and reinvented in a much more efficient way both for transaction costs that the block chain bit coin stuff is doing to risk assessment with machine learning systems are doing to capital sourcing which some of the lending companies have done.
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there's innovation to be had all industries to be transformed and i think that's a general very large opportunity in financial services. and re few of the traditional players in consumer -- in financial services are able to do that transformation just like very few of the enterprise companies are able to -- online enterprise companies able to handle that transition to the new cloud platform that nutanix like companies are addressing. >> we thank you for joining us and helping explain what we are witnessing here. have a great weekend. the debate about whether fantasy sports is a game of skill or gambling rages on. nevada has made up its mine and is taking steps to ban the billion dollar business all together. implication of that move are next on the "closing bell." active management can tap global insights.
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welcome back. the fbi now launching an investigation into the business of fantasy sports. now nevada has become the fifth and most powerful state to ban it altogether. eric chemi joins us with the details. >> hi, kelly. the control board ruled that fan duel and draft kings are forms of gambling and cannot operate
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in the state unless they receive a gaming license. it was pushed by the powerful casino lobby who are adamant it is a form of gambling. fan duel and draft kings said this is a game of skill, not chance, so they shouldn't be considered gambling, but nevada say skill and chance are not how they look at things. the casinos have seen big spenders move from traditional gaming to daily fantasy. data shows a vast majority of the biggest fantasy spenders were previously poker players. draft kings is a big advertiser on polk telecasts. congress has been asked not to hold hearings on the fantasy sports despite the investigations and controversy in recent weeks. but the fantasy business has shown no sign of slowing down. they had a record number of sign-ups. and the store is innin predicted
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territory and it will come down to which lobbying has more money. >> and i think nbc universal has a stake in fan duel. >> and then disney has draft kings. so the media guys have their play. >> and robert craft -- >> he is a big draft kings. they are from boston so there is a whole big thing about massachusetts as a proxy to go after craft because people don't like the patriots. that is a real story. they couldn't get them on deflate-gate, but they get them on draft kings. >> you said nevada doesn't like to use skill or luck or -- so what is their methodology. >> chess is a game of skill. but it is not gambling because you are doing the thing itself. you are not betting on an outcome. the lottery is a gamblement it is total chance. >> so how do the casinos define it. on what basis can they say that the sites shouldn't operate. >> when you ask moment easter it
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does seem like glambling. the old supreme court decision, i don't know how to define porn but i know when it i see it. if you bet on sporting events, that is gambling so what is the difference here. >> this is my point. i think it is obviously gamble. but i don't understand why it is not legal except for in a vegas casino. >> that is a broader question. so people i've been talking to think this will force the nation to open up the laws and alaw this to ago toward. >> and the casinos have a lot to lose depending on what the proliferation is like. >> why do you think they got rid of online poker. it disappeared because they were losing too much money to it. >> i'm sorry. we'll have to talk to you at the break. >> i don't want to have to watch another fantasy football everyw >> and we have the story on
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goldman sachs story causing people their jobs and why are exxon and other stocks surging. we'll give you the details. stay with us. the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business.
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built for business. comcast business. they come into this iworld ugly and messy. ideas are frightening because they threaten what is known. they are the natural born enemy of the way things are.
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yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful. 20 analysts at goldman sachs got themselves in hot water and it wasn't for bad stock calls. mary thompson has the details.
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>> the company firing 20 first year hires after finding they cheated on in-house training tests. in a statement the company is saying the conduct was not just a clear violation of the rules butt inconsistent with the valus at the firm. they doesn't uncover how they were cheating, it is not out of the question that they used websites to google when you are supposed to be taking a test. the cheaters were working in goldman sachs offices around the globe. and the news comes after they had a rare miss on earnings. reporting third quarter profits yesterday that were a penny below estimates amid a tough environment for the big fixed income trading unit. back to you. >> i was a first year analyst at goldman once upon a time. 20 some odd years ago. >> did you cheat? >> i was terrified of doing
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anything wrong. my first job. first year. it says something about the culture of wall street. i was terrified. you never cheated or said anything bad about anybody and never talked to the press. >> i thought you might have been taking an anti-millennial bent with this one. >> no. i could go in that direction. >> it is out there to for the taking sara. >> they are hiring. and the trading hit. 33% plunge in trading revenue. >> it is all on wall street right now. they need -- they need bubbles. wall street needs bubbles. >> and the business is doing okay. it is smaller but doing okay n. a word or two, what are we watching next week. is it all about china? >> it is all about earnings and what corporates are seeing in china. coca-cola will report like alphabet, formerly known as google. >> i think the market looks through earnings and don't
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kaelly care about it. >> we cant to see the color and the guidance and the comment youry. >> we'll check it next week. sara eisen, evan newman. "fast money" begins in moments. >> the self-driving car. that looked like fun. guy did virtual reality. guy in the sky. that is a little hint. >> i want a v.r. version of guy for our next hit. that would be cool. >> a better version. thanks kelly. "fast money" starts right now. live in the nasdaq market site overlooking time square. our traders on the desk. tim seymour, josh brown, brian kelly, guy adami. now steve bomber and what is it about twitter that has the richest people jumping in and who should be next. plus, netflix releasing a film today and it could be a big deal to the stock come phone. we'll explain in a special report. but remember the august swoon. stocks have recovered allth

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