last week. >> yeah. >> and so won't affect the quarter to announce which is june 30 quarter but if the currency levels stay at this rate which we would expect then the september and december quarter will miss the estimates on -- just because of the curren currency. >> laura, thank you so much. >> thank you for watching "power lunch." >> "closing bell" starts right now. hi, everybody. welcome to "the closing bell." i'm kelly evans at new york stock exchange. >> i'm bill griffeth. uncertainty in europe and u.s. bond yields, hitting record lows today especially on the long end of the curve. financials in the u.s. and abroad suffering, as well, today. we'll dig deeper into what's behind that move today. >> energy also one of the worst performers. oil prices under pressure with the new study saying u.s. oil reserves surpassed russia and saudi arabia's.

we'll look at the geopolitical impact. >> the question is unproven reserves. how do you count an unproven reserve? >> unproven -- >> exactly. we'll ask about that coming up. plus, the fbi announcing today it will not recommend any criminal charges for democratic presidential candidate hillary clinton. and she is about to speak along with president obama. they're at a campaign rally in charlotte, north carolina. we'll take you there live momentarily. let's start with the u.s. and uk banks under pressure. bob pisani? >> hello, william. you throw in the slow growth and zero, essentially zero bond yields and problems for the banks. once again, after rallying briefly last week, the uk banks are weak. barclays down 5%. same thing looking at rbs. come on over here, vinny. down 8.3% as you can see here on top of the declines that we saw

earlier in the week. if you take a look at how much we've been down in the last six the brexit announcement back on the june, june 23rd. b b barclays down and most of the banks get a very large part, in fact, the majority of their revenues from the united kingdom. barrelclays about half of their revenues from the uk. rbs and lloyds, substantial majority, lloyds 100% of the revenues from the uk. now, some don't think it's such a big issue. the drop in property prices, may not be a big issue because mortgage rates remain low and today a problem here because standard life suspended trading in the uk property fund due to rapid cash outflows, of course, a big insurer and asset manager there and the management/insurance group down on that concerns and assure you also weighing on the banks, as well.

meantime, here in the u.s., regional banks are having problems today. mostly zions. fifth third with a downgrade. regions financial, comerica. most of those down double digits since the brexit vote was announced at the end of june. guys, back to you. >> all right. bob, thank you for now. now the heart of what could be the next crisis. italian banks. michelle has more. >> hey there, italian banks have issues. take a look at the ftse bank index for a year, down 56% year to date and a large portion of that happening in the wake of brexit. italian banks need more capital. this was crystallized in the last 24 hours learning that the ecb told the world's oldest bank in italy that it needed to do even more to get rid of large numbers of non-performing loans.

not a meaningful bank to americans but a symbol of bigger problem in italy. the banking system needs more capital because the banking system is burdened with bad loans calling them nonperforming loans. however, if you want to do any kind of recapitalization with government money, can't do it anymore based on eu rules. the ability to do that expired on january 1. now the way they have to do bailouts coming to banks they have to punish bondholders and in italy it turns out there's a lot of mom and pops who own a lot of subordinated and junior debt in banks, weaker debt. where they could lose a lot of money and politically untenable in italy and trying to figure out if there's a way do get around this while still injecting capital in the banks. italy has wanted to do this, get an exemption to the rules. germany doesn't want to. if i tallian bondholders lose a

lot of money, you have individuals unhappy with the eu and rules and that's how they would see it, guys. raises another question about a threat to the structure of the european union. >> and it's why the comments bare watching, michelle. now out of those officials and german officials, seems like wink and nod to let italy support the banks only way out of this. >> well, so there's in theory some compromise they can come up with. what italy tried to argue is that brexit one of these big systemic events that, therefore, justifies an exemption to the rule and within the rules they allow exemptions for events and germany has said we think that's a disingenuous way to try to get around the rules. but you know how it is with the eu. push comes to shove and then you see some kind of big systemic event or as they have seen it, they have changed their tune in

the past. >> at least two pundits said this morning, can you blame great britain wanting to leave the eu? you will have a friend that needs to borrow money again and again and again. and why put up with that? >> exactly. and they would point to italy saying, listen, italy has not reformed in ways it needed. had years to do so. took too long and why be on the hook for that? >> all right. thank you. >> thanks. let's get to the closing bell exchange for this tuesday that feels like a monday. edmond shing, we have kenny polcari, here at the new york stock exchange and rick santelli from chicago. kenny p., doing a victory lap today. you made the call only friday. you saw it coming here but -- >> we discussed it with a disconnect of what the stocks telling us and what the bond market, gold was telling and so, you know, we discussed that

disconnect and -- >> something had to give. today it's stocks that are giving, right? it was a long weekend here. certainly a lot more news over the weekend. italian banking crisis not helping it. the word out of the ecb, i mean the bank of england this morning, cut the rate to zero and stand tall to support, the fed will support and the boj. what that says is things are not add good as we thought and a bigger problem and rates stay lower longer and in the end that's not really a bullish, bullish story. right ahead of second quarter earnings suspect at best. >> hey, rick, are you able to get a mortgage in this country less than 3%? >> you know, probably. or at least maybe close. but, you know, i don't know that it's a good thing but i don't know that's the important thing in any of these. yes, mortgage rates are going down.

but let's really take a look. you had all these central bankers around the world basically telling the investigators like the italian investors and michelle said, the mom and pops that bought into their sovereign market, and they have said, listen, you know, we'll take you on the freeway of the fix it freeway and do things to fix these problems and after all these years, the problems are not fixed and a bail-in? this is a brexit? it's the same dynamic. michelle's been talking about this all day. the people that are in charge take you on a road to fix something and end all on bail-in land. this is in italy and france. and i'm telling you. the spotlight should not be on the uk even though it's important to monitor the uk, especially at some point and i think sooner rather than later finding out the european side terms of the divorce. but right now, this is all about a 126 yield and italian paper. 10 basis cheaper than our

historic low in the 10-year at 136. we are playing russian roulette in the sovereign markets and to kenny, i understand what he's saying. the fixed market pricing in weakness. now there's an anvil and rates are going down and not so sure how that translates into equity moves on any given day. >> edmond, what do you do with the uk market at this early stage of the brexit process? do you wait until you understand more fully when article 50 is going to be invoked? the terms? that could take forever. what do you do in the meantime? >> i think actually when you look particularly at the ftse 100 index, the benchmark index for the uk, you shouldn't worry too much because it's probably the most global index in the developed markets in the world, so from that point of view, the exposure not so much to the uk

economy but the global uk thinking about pharmaceuticals, oil and gas and mining and really you're not buying a whole lot of exposure to the uk economy so in that case why are you so worried? in many ways this could be bizarrely good thing for the companys because the share prices in pounds, the earnings abroad and when they bring those earnings back to the uk, they're left with more pounds now. >> i'll tell you what people are worried about. uk banking system. what do you do? mr. osborne to talk about the big tax cut of sorts and all kinds of important developments are still to occur. i get the global view that you're giving but for those companies that have the most exposure to the english economy right now, do you take the risk now or do you wait and what do you wait for? >> i would certainly wait. i think if you're talking about banks such as royal bank of scotland, lloyds or real estate

companies and very domestic or even homebuilders and clearly domestic, those sectors clearly it's a time to wait. since the brexit announcement, they haven't performed markedly and far too early to tell because the risk we have here, sentiment in the uk collapsed on the domestic side in terms of consumer confidence, industrial and business confidence and we have no clue how long that is going to take to revert to mead. we could see a headlong slide into recession caused by uk themselves and purely brexit reasons other than macro. but that in itself is affecting the sectors quite heavily and there's no telling where these earnings fall out. >> all right. we have to go at this point. gentlemen, that thank you all. interesting conversation today. appreciate it. with about 50 minutes to go, interesting developments in the markets there. there's the vix up by a point

and a half. the transports down 125 points today. kind of taking what we saw last week, the strong stock gains, the gains in oil and flipping all of that around. oil's weaker. the dow down 127. s&p down 18. airlines stocks and tesla, all declining today. phil lebeau will tell us what's dragging down some of the biggest names in transportation and space coming up. also, coming up -- >> we'll head live to charlotte, north carolina, where hillary clinton is expected to deliver remarks any moment now. could be interesting in the wake of fbi director comb ri's remarks she was extremely careless in the handling of e-mail as secretary of state and would not recommend criminal charges against her. we'll follow that for you. you're watching cnbc, first in business worldwide.

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welcome back. as you see the dow down 133 following last week's rally that was the best week the market seen in two years. ten of the 30 dow components are higher today. johnson & johnson leading the way but companies like jpmorgan are among the laggards today down more than 3%.

>> transports, weaker today, too. delta airlines, latest profit market guidance putting a drag on the space. phil? >> you saw the airline stocks right there, all looking really bad today primarily in sympathy of delta today warning about profit margins for the second quarter and a couple of things and said it ended some of the fuel hedges early so that's going to weigh on profit margins and passenger unit revenue, everybody's warning about it. delta's saying in the second quarter down 5%. what's ailing delta is ailing all of the airlines. more flights, more seats, that's hurting airline profits. there's a glut of seats especially on the lower end and as a result fares are not rising. and they're not keeping up with all the expenses that are there and so you had the cheaper seats bringing down passenger revenue. take a look at the airline index. down 12% in the last year and the three or four months brutal for the airlines and people are sitting there saying when's the

bottom in terms of the passenger revenue? >> aren't we supposed to be in the high traffic time of the year? or is this before -- >> we are in the high traffic, traffic is up and more seats than capacity so -- >> wait a minute. that says that the glass is half empty but if you look at it half full, demand is not as strong as they were anticipating or am i wrong about that? >> the problem is they're expecting greater demand than capacity growth. they're not seeing that right now and the capacity added on the lower end. you have a lot of carrier who is are dumping seats, not dumping but cutting the prices on these seats on the lower end and weighing on passenger revenue. >> i see. what about tesla? stock down today. more problems mounting up for the company. down to more than 1.5% right now. >> yeah. we were talking about this earlier today and like groundhog dog and tesla, this is the second time now that tesla has come out and said our quarterly

deliveries are not keeping up with the estimates that were -- out there from the company itself or from analysts. there you see the numbers delivering 14,370 vehicles, well short of what estimate at 17,000 vehicles. the reason this is important is when you look at their full-year guidance, tesla is sticking with the guidance of delivering between 80,000 and 90,000 vehicles. guys, this means they have to deliver more than 50,000 vehicles in the last 6 months of this year. tesla says it can get there increasing the weekly production. first to 2,200 a week and then 2,400 a week and one more thing weighing on shares of tesla and why it was down more than 3% for most of the day. it's come back a little bit now. >> i wonder, phil, if most investors expect to hit the tar gets. didn't seem to matter in the past when they haven't. >> and tesla doesn't think they

meet the goal, somewhere in the august time frame you might see them guide a little bit lower. tesla's not indicating that they have any plan to do and very adamant to bring up production to 2,200 vehicles a week and meet that target of 80,000 vehicles. >> it would appear that reality is catching up with elon musk's ambitions to some degree there. i guess. phil, thanks very much. see you later. >> you bet. 40 minutes to go here. keeping an eye on stocks. we have sort of sunk near session lows moving through the session today and sat there which is interesting. seen in the past sometimes the european markets close and lifts the pressure. but the dow's down 120. s&p down 17. the nasdaq down 50. as you may loved your refinanced mortgage and banks are losing big money. waiting for hillary clinton who will be speaking at that campaign stop with the president in charlotte, north carolina. we'll find out if she plans to address fbi director comb my's announcement this morning that

the fbi would not recommend criminal charges in her handling of classified information by e-mail. that's coming up here on "the closing bell." stay tuned. 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 and 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. td ameritrade.

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see car insurance in a whole new light. liberty mutual insurance welcome back. plenty of all-time highs today, even as you see markets sinking. a lot of them in the consumer space. pepsi, j&j. places you can look, for example, to still find stocks of investors piling in and a different story of apple today.

take a look. lower along with the chip supplier. pacific crest cutting t. citing weaker supply forecast. this is a big thorn in apple's side. shares down little more than 1%. all right. as we mentioned, waiting for hillary clinton to make a first campaign appearance with president obama. they are in charlotte, north carolina, right now. john harwood joins us here. josh earnest at the white house said the president doesn't plan to announce fbi director comb my's statement of recommendation of no criminal charges against mrs. clinton over the e-mail. i imagine she won't either, right? >> right. we don't have the determination and signaled last week after the

controversy on the airport tarmac with former president bill clinton she would be accepting the recommendation of career professionals and not the way that either hillary clinton or president obama wanted this day to unfold. they wanted this to be the time where president obama hit the trail for her, helped her consolidate democratic support. began making robust arguments on her behalf in a state of north carolina he carried once and lost a second time. instead, that meeting will be underscored for the awkwardness of a situation of president obama's fbi's director has just while ab solving from his point of view hillary clinton from the possibility of criminal charges, strongly criticized her, what he called extremely carelessness of managing sensitive information of president obama's former secretary of state so it's a -- one would hope to know what was said on the airplane, on air force one down to north

carolina. we're not going to get that, of course. and do not expect we'll hear about this from president obama or secretary of state clinton, but their event today is overshadowed by the comb my announcement. >> also, john, i wonder about the impact of what more we learned as is pointed out at "washington post," fbi found 110 e-mails on the server classified at the time they were sent or recei received. she said they were not sent or knowingly sent them. there's other people picked up on the fact of 34,000 plus e-mails exchanged between the state department and the clinton global initiative. so even as maybe that larger issue of what happens next is debated, so, too, will these new findings, i would imagine. >> no question about it, kelly. to me, the bottom line is that the fbi director said the former secretary of state, the candidate, democratic candidate to be the next commander in

chief, was extremely careless and her aides were extremely careless in how they handled sensite information. they had not intentionally mishandled classified information but that that they should have known they needed to be more careful. that is a damning indictment and it's going to be big fodder for the campaign trail in the particulars you mentioned about those individual e-mail chains. but the bottom line from james comb comb my, you're relieved. he is not recommending felony. he criticized you strongly and the words repeated all the way to november. >> indeed. that's for sure. john, thanks. we'll continue to monitor the situation as that rally gets under way there in charlotte, north carolina. thank you. meantime, time for a news update with sue herrera. hi, sue. >> hi. thousands of people protesting in the streets of paris against

a labor bill that prompted the worst social unrest in years. the march came as the lower house of parliament used a special measure to force approval of the bill in the lower house without a vote. and this is the second time. hundreds of people taking part in a funeral procession for one of the victims of a deadly suicide bombing in baghdad over the weekend. rescue teams were still searching for the remains of 200 killed in those attacks. single deadliest bombing to hit baghdad. no charges filed against the great grandson of henry ford following the arrest of a domestic violence incident of his wife. edsel ford 2 didn't appear in court and seen driving away there this morning. a young basketball camper floored by the chance meeting with nba mvp steph curry. look at that face. the golden state superstar making a surprise visit to a warriors basketball camp in hawaii. he also posed as a pizza

delivery man for a room of equally surprised screaming young girls. >> can we play that again? >> so great, suspect it? >> that would be -- >> the look on kelly's face opening the door and there's steph curry standing there. >> it is really pretty amazing. he just surprised the heck out of them. this is the basketball camp. taking place in hawaii. here you go. >> what's going on, man? >> kelly evans right there. boink. that is hilarious. >> look at the girls. so funny. bill, with teenage daughters, we know, right? >> that's fantastic. >> thanks, sue. >> see you in a bit. let's go back to john harwood. >> reporter: we are waiting to hear from hillary clinton and then president obama campaigning in north carolina. they've got a series of people who are going to warm up the crowd and introduce them. we've heard from the white house that the president is not going to address this legal situation on the e-mails but rather is

going to make a strong argument for why hillary clinton should succeed him in the oval office and we will have to wait and hear exactly how she approaches it, whether she makes illusion whatever to the e-mail controversy. i would not expect that. and then hear president obama embracing her afterwards. >> i'm looking at the fact of the 10-year 1.367%. john, the economy is going to figure in here, and -- >> some point. >> it's frankly, keeps moving along without a real narrative. >> that's right. president obama's making the case we have an uninterrupted record string of private sector job creation that continues. the economy's objectively and much, much better shape than it was when he took office. on the other hand, he's acknowledged and hillary clinton, bernie sanders and republicans acknowledged in their campaigns our economy is not delivering rising living

standards for middle class people. though we're headed in the right direction, middle class people do not feel as they're getting ahead in the income statistics and has been some revent wage growth, simply isn't adequate to deliver what the american people come to expect and why large majorities of the people say they're not happy with the direction of the country and both issues, the improvement but also the long-term stagnation are front and center in this campaign. >> how do you think she handles the political fallout from comey's comments today? we'll listen to hillary right now? all right. you know, that's going to dog her as you mentioned until november anyway. but does it become enough of a distraction that she has to keep apologizing or what do they have to do? >> she will have to address the

issue overhung her campaign throughout the year which is that many americans don't trust her. this is something that from her point of view is scar tissue built up for over a quarter century in public life. a lot of attacks back and forth between her and republicans. from the republican point of view, it is that hillary clinton's conduct keeps inviting those attacks. >> all right. well, let's listen in. see what she has to say here. >> senator deborah ross. and your next governor, roy cooper. and of course, with your president barack obama! i feel very privileged because

i've known the president in many roles. as a colleague in the senate. as an opponent in a hard-fought primary. and -- and the president i was so proud to serve as secretary of state. but i've always l also known him as the friend that i was honored to stand with in the good times and the hard times. someone who has never forgotten where he came from. and donald, if you're out there tweeting, it's hawaii.

so over the years, we have had some memorable experiences together. like storming a secret meeting of foreign leaders at a global climate summit. >> that was fun. >> that was fun. >> that was fun. >> you should have seen the chinese guards try to stop us. now, they put their arms out and the president just went right through. then they put their arms out and i went right under. and the president with that amazing smile of his says, hey, we've been looking for you. now, through it all, as we went from political rivals to partners to friends, my esteem for him just kept growing. and so did my admiration for his brilliant wife michelle.

and those two amazing daughters that they have raised. you know, my husband and i know a little bit about how hard it is to raise a child in the public eye. in the fish bowl of the white house. but the obamas have done a fabulous job. malia, who just graduated from high school and celebrated her 18th birthday yesterday. and sasha who has the energy and enthusiasm of a wonderful young woman. now, i happen to think those two young women may be the most impressive accomplishment of all of our president. >> that's true.

>> and it's one of the many reasons why it means so much to me personally to have the president's support in this campaign. after all, he knows a thing or two about winning elections. take it from me. and he also knows that despite all the progress we have made under his leadership, and yes, we have -- >> yes, we have. >> we still have a lot of work to do. president obama's job, one that he did not ask for, but was handed to him, was to save us from a second great depression and that is exactly what he did. actually, i don't think he gets the credit he deserves for saving our economy.

we've added 14 million private sector jobs. the auto industry just had its best year ever. 20 million people now have health care. clean energy production has soared. i could go on and on. but you get the idea. that is what leadership looks like. >> all right. we're going to step in at this point. it is clear, this is going to be an old-fashioned stem winder of campaign -- >> stem winders? >> yes. gik. john harwood, somebody pointed out to me what a valuable optic this presented hillary clinton, she gets to stand at the podium with the presidential seal in front of her there. >> that's right and also with the president whose approval rating is at or over 50% for several months and this is significant, especially at a

time when she has locked up the democratic nomination but not gotten the endorsement of bernie sanders whose supporters she needs to win the election. some of those have been holding back from fully embracing her and guess who's extremely popular with bernie sanders supporters? president barack obama. more than 80% approval. hillary clinton's trying to get the boost out of that for the reason you mentioned. she is not going to address the e-mail issue, president obama won't either. but we'll be monitoring the remarks. if anything comes up relevant, bill, i'm going to be calling you and telling you to put me on television. >> i'll pick it up on the first ring. thank you, john. see you later. less than half an hour to go in the session. we can see unusual moves here. matt cheslock is joining us. what are you watching today? >> you know what? there is so much to watch, but yet, moves the markets

regardless. headline watching right now and political headlines not knowing where we go in london or here. we have a little more clarity here in the u.s. obviously here today i think with the news of this morning about the president maybe to be. so, you know, the market's reacted pretty well all that's going on economically. >> so much is made of the defensive investments still going well. bonds going up. 10-year and 30-year in records. stocks kind of hovering right now. >> considering the damage that could have occurred after brexit and such a surprise and we saw that monumental move and gained almost all of it back and down 100 and worried in equities? i don't think that's the case. gold is strong for a while. we had a lot of experts calling for gold's bottom. that should be really no surprise. bonds are really attractive right now. equities to put the money and

u.s. equities and that's -- there's no historical basis of negative yields and seeing out of brexit and a time to put your money in safe and safe is u.s. >> all right. >> simple as this. >> thank you so much. >> sure. all right. we have 22 minutes left in the trading session here. the dow starting to come back. down just 100. just 100 points. >> 10-year, 1.367 is that yield. coming up. >> amazing. >> u.s. marking an important first overtaking saudi arabia in terms of oil reserves. we'll discuss the standing in the middle east coming up.

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welcome back. shares of netflix higher after comcast said they reached a deal to anow netflix video streaming on comcast's coveted x-1 platform this year, marking a shift of cable from tv provider to embrace players like netflix and comcast is parent company of cnbc. we'll speak with cara swisher who broke this story next hour. you'll be talking to cara there.

>> joining us on set after finishing the watermelon juice in williamsburg. the kingdom of saudi arabia suffering from oil production issues, saw terror attacks inside the borders this weekend. up next, how the kingdom is dealing with the economic and political concerns.

all right. news out today for the first time the u.s. has surpassed saudi arabia in terms of oil reserves. plus, suicide attacks in saudi arabia marked the end of the muslim holy month of ramadan. as you know, all of which raises questions of saudi arabia's standing as a stabilizing power in the middle east. a lot to talk about and so little time with managing director and global head of commodities strategy at rbc capital markets and a cnbc contributor. good to see you. welcome back. >> thank you for having me. >> we have known for a while our reserves were growing and proven reserves and surpassing saudi arabia. is this a surprise? what does it mean for the balance of power in the oil industry worldwide? >> i mean, it makes a dramatic headline and keep in mind that saudi arabia remains the

low-coast producer. so getting the saudi barrels out of the ground is easier and cheaper than extracting from the united states and certainly for saudi standing, not a great headline for them. they like being the pre-eminent global oil power. but the costs are still on the saudi side. >> we had a question of proven and unproven reserves figuring into vaulting the u.s. into the top position here. >> one of the things also to keep in mind and this is so interesting going forward and with the ipo there will have to be a lot of transparency if they want to put the upstream up for offering about really what their proven and recoverable reserves are so it's always been a gray area and saudi moves forward, the reform issues is a greater issue. what can you get out of the ground and what time frame. >> what do you make of that reform effort? i mean, we know that the funding coming from that ipo will be

used for building out a new economy that's not so dependent on oil. how do you expect that to play out here? >> well, i mean, this is a huge challenge for saudi arabia because, you know, they have such large oil reserves and easy to get the oil out an an enormous social welfare state so in this type of price environment they have to make choices. can you do expensive military campaigns in yemen? can you be the third largest spending in defense globally? something has to give. and we see the saudis cutting subsidies, talking about cutting public sector payrolls and can you keep the population going along with you making the reforms? i think it is an open question. >> stay that way for quite sometime. thank you for joining us. >> thank you for having me. we watch oil trending lower today. >> gold's powering higher amid a more volatile environment. we'll hear why he thinks that

metal is a good hedge coming up. thank you is what we say. but we mean so much more. we mean how can we help? we mean what can we do? we mean it's our turn. to do our part. to serve you, for all you've done to serve us. ♪

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show but the east coast. just came back from san francisco, tour of duty there. gold. we often joke on the show. we don't know whether it's a risk asset or a hedge of sorts. it's acting like a hedge right now, isn't it? >> it is acting like a hedge. gold is hard to classify. there's a couple of things that gold does do. an effective hedge against credit risk and in an environment in which real rates are low and increasingly negative, gold does a better rojob in that role. i think the reality is if you're building a portfolio from the bottom up, you have to ask yourself what's going to be negatively core rated in times of stress and fewer and fewer asset that is meet that description. >> what about trying to avoid any, you know, just perfect sort of smoothing and madoff style returns?

isn't it more important to try to, you know, make sure you're invested and sort of stay along for the ride? >> i think it is and why you're overweight equities relative to bonds and in an environment where the economy's slow, volatility is likely heightened. in that volatility you need a hedge in the portfolio and few that work as reliably as gold. >> the fed's not raising rates and the dollar continues lower as a result and one of the reasons why gold is higher? is that how it works here? >> look at it differently. people talk about gold against the dollar. i frame it against real rates and shape that argument is gold produces no income. in an environment and real rates are high, there's a huge opportunity cost of gold. it doesn't do anything in the portfolio. that opportunity cost is much lower making gold a more reliable hedge in that environment. >> when it comes to stocks and also to bonds, i mean, the price of bonds is so high, the yields

are so low and continues a pace today. what do you recommend to people? >> it's hard and i think the reality is we're in an environment where bond yields may back up a bit but nominal gdp is slow and a dearth of bonds out there and possible to be in an environment of yields stay low and in that environment, think more about where can you get income in the portfolio? things like credit, preferred stock start to look more interesting in that type of an environment. >> how much higher does gold go then do you think? >> i think much higher. particularly -- >> back to old highs of 1,800? >> probably if you give me enough time. we're more and more of the bond market is trading with a negative yield, gold can go higher. >> all right. russ, good to see you again. >> thank you, bill. we'll come back with the closing countdown for this tuesday. with the dow down about 100 points.

after the bell, well, another case of frenemies coming together in the media world. comcast ready to bring netflix on to one of the cable platforms. what it means for consumers coming up.

all right. with the dow down 112, we start with the dow here on the countdown but let's start with something else.

this market the due today, when long-term treasury yields hit all-time lows and joking earlier, bob pisani, the impact of mortgage rates that these rates were back to levels that when the flintstones got mortgages. >> i saw your tweet on that. very cute. >> hit 135 at the low today on the 10-year. back to 1.37 right new. >> you can get a 15-year mortgage for i believe it's 2.8. it's well below 3% new. >> for sure. the british pound moving. i have a very close friend when's lived in england for ten years and moved back to the u.s. today. >> today? >> what good timing to leave just as the british pound hitting this 30-year low at $1.30. >> should have stayed there and we should go over there. >> okay, sure. we'll visit. now we get to the dow after last week when the markets had their best year in -- best week if two years.

dow down 113. off the lows of the session today. >> i think it was -- you want to mention the vix? >> let's do that. that's come back. had a huge decline last week. >> 40% drop last week. >> today up. >> it was interesting to hear our friend talking about gold and investing in gold. i do want to point out and i think you hinted at this, the glv with a 40 billion under management. the gold. spydr with 200 billion and the money of index of s&p 500 globally is probably close to $1 trillion. my point being is you can talk all you want about gold as an investment it is a tiny, tiny, tiny part of the global assets. has been for a long time. gold might be going up but the world is not knocking itself over to buy gold in a quantity.

gld did increase. the banks here in the u.s. still acting like those low rates will be a problem for a long time. >> apparently. thanks, bob. see you later. down 115 or thereabouts on the dow. called taps, tragedy assistance program for survivors. a big response and veterans on wall street at the nasdaq. now hour two of "closing bell" of kelly evans and company. see you tomorrow, kelly. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. stocks had a great week last week and giving up the gains and the dow giving up 110 on the bell there. the s&p down 14 to 1088. nasdaq down 39 points, it was the worst performer today, one point down more than 1%. other pressure here, too, transports down nearly 100. vix higher by a point. oil did sell off again today and

the dollar strengthened. coming up, it's been five years since president obama tapped elizabeth warren to set up that consumer financial protection bureau. while republicans gunning for the agency since inception, democrat joined the fight. director richard cordray will join us. we have susan ox, welcome. financial editor, dennis burrman and trader guy adaadami. appreciate you joining us, guy, as well. dennis, a pause in the markets today. perhaps most notably the 10-year yield to 1.367%? extraordinary? >> incredible. i was going to bring the picture on the front of "the wall street journal" with a chart back to 1789. okay? yield on the first 10-year treasury, 12% and never traded lower than today. so the stock market is saying

one thing. the bonds market is saying another. which one will win? i tend to think the bond market will have probably the negative say and it is incredible to think that the circumstances in the financial markets have brought us to this today. low rates around the world pushing money into those u.s. bonds. >> susan? >> i think that's why you're seeing bank stocks hammered today and a rough ride since brexit and we have not seen a lot of leadership and thank goodness carney is running the bank of england coming out today saying the headlines said they're going to lower requirements and we're not worried about the capitalization of the banks and a huge issue for them. interest rates on top of the uncertainty. >> why was a policy response required for a problem of low interest rates? >> uncertainty is driving a lot of concern and i think, unfortunately, the u.s. is mirroring what's going on in the

uk. >> guy, is that what's happening with the yields? is everyone else pulling us lower or deserve to be at the incredibly low levels? >> the answers are sometimes a little bit of both and i think, listen, looking at german 10-year yields, call it negative but though they're negative, 1.6 a couple of weeks ago locking attractive. in terms of relative strength and value, you dwgot to like th u.s. bond market. there's certainty in the world and the certainty is we try to look past it, we have inflations in all the wrong places and we have deflation everywhere else and no way to remedy that and the bond markets trying to tell investors, traders, policymakers that for quite sometime. this is a hard thing to get yourself out of. time is only the thing to heal it and to try to fight against it i think you are swimming upstream. i said for 18 months, 2 years, you know, every time on the show together that rates are going

down. and a lot of -- >> you have, absolutely. >> people said you're out of your mind but that's the reality. i thought 10-year in the u.s. 1.25 and we're within earshot of that. but a yield curve flattening in the united states augustered a lot of things but not positive from where i sit. >> the real impact right away, too, dennis, on mortgage rates. listen, below 3% next for a 30-year mortgage? >> if you have not done it yet, do it now. i feel like a televangelist. call your banker. >> sound like evan newmark last week. >> refinance, right? seeing a 30-year jumbos and overall, 3.5 to 3.38, 3.14 and within the realm of reason and bounty is there and most refinanced and as the number goes down, the number of people to refinance goes down but yes. refinance. >> will that help the banks?

ones with a mortgage business and a little bit of income here? >> a little bit. but the bigger problem is the slowdown economically across the globe. right? so if people stop, even though interest rates are low and not invest and build that new plant and make those capital expenditures and rates are this low and we don't know what it looks like and pull our operations out of uk and put them somewhere else in europe, that's tamping down growth and why carney was out this morning saying we want you to use capital and lending. >> the one thing to upset the apple cart, what if the jobs number is friday and 180,000? >> good number. exactly. >> threshold for improving is pretty low and might be less than 100,000. we know look at the -- one of the small biz surveys, wages up 3.5% on the year and business wasn't hurting. you know, it's possible. i guess the ism manufacturing survey improved.

>> yeah. new york ism was an abomination and say isms good and bad. let's say it's been sort of good -- you had a plethora of data all suggest that, you know, we are sort of muddled in the middle in terms of that. you hit the nail on the head. right? even with the lousy jobs number last month, unemployment rate down and that's what the fed is looking at. that's what they claim they've been looking at an if you get a number back to the norm, say anything north of 160,000, and the unemployment rate falls again to 4.6 call it, how do they talk themselves out of that? like, when's the next excuse? through the brexit seemingly. you know, what are the forces that they're looking at to not allow them to raise rates? i'll say it again. the corner they painted themselves into continues to get smaller and one that i don't think can get themselves out of any time soon and quietly my sense is -- i believe praying

for another lousy number for air color. >> j.j. here on set with us. we like to have a look especially in the wake of britain's vote to leave the eu at what investors buying and selling last month. what do you glean? >> one of the really interesting things goes back to what you're talking about right now. and that is the fact that gm and ford were net buys while at the same time you and i have talked a lot in the past, kelly, exxon and chevron and brought a lot throughout the year net sells and the reason seeing this, what clients are looking for right now is a place to get yield and part of the portfolio and automakers struggled so far this year, gm and ford pay near 5% dividends and chevron and exxon, the price of crude has slipped. it struggles at the 50 level and when it gets to 50, we see people start to sell it. we also have, you know, two of the fang stocks, facebook and amazon. facebook a favorite and amazon on dips people buy it. the most interesting thing to

me, kelly, is our clients became more engaged with the market last month and not less on the brexit vote and paid people to be buyers on dips and we saw that play out last month significantly. >> you fascinating asking phil lebeau about ford and gm. tesla, you know, to compare the two in terms of why investors potentially value tesla, higher than they would general motors is interesting. >> it is. it goes back to what investors are looking for a blue chip name they know in terms of pure yield. tesla, the valuations are higher and i think tesla many view it as a tech play as well as an auto play and make the argument all autos in some sense are a bit of a tech play and the average retail investor, they look at it more of a hybrid of the two than plain automobiles. >> energy energy as much as anything. dennis? >> it is a subsidy mechanism for

a solar panel company is a better way to -- >> geese take on utilities, we have seen those, obviously, second best performing s&p index of the year right after telecom stocks. are they overvalued? you just got to go there because that's where the yield is right now. >> i think that's a great question. steve grasso on this, overvalued in terms of multiples for quite sometime. and i think people have been pointing to that. but as rates continue to go down, people are forced to pile into something like the xlu and not here to, you know, throw barbs but gm 5% dividend, call it. you lost half of that tomorrow in terms of the stock and doesn't mean they're safe with yield and look at at&t and verizon. two stocks trading sideways for seemingly four or five years. nothing has fundamentally changed in either of their businesses. both stocks have had significant breakouts to the upside.

why? people are chasing the dividend yield. i don't know how that ends particularly well and people forced into things they don't understand about or forced into things because they have to and that to me is not the foundation of a strong market. >> i think you bring up an important point right there. people are forced because they have to. and the problem people are having, you know, you talked about at the beginning. the biggest fear is that you go into a fixed income right now and the 10-year and 30-year bond collapses and stuck holding a bag. i think a thought process being i understand ford and gm and i understand their butzs. you are right and taking risk and no question about it. but with that, i think people want to take risk they understand a little bit better and most of us are having trouble understanding when's going on right now in fixed income and professionals. >> real quick, i don't mean to -- i don't think people understand gm and ford and they know the names and sees the cars on the streets and asking what's going on with their businesses, they have no idea.

think about this quickly. gm and ford over the last, you know, four or five years, it's almost been the golden age of selling cars. phil lebeau talks about the unbelievable car numbers for sale right on top of that a stock market that's basically doubled or tripled over that time period. yet, both those stocks have gone down. explain that to me. although people understand gm and ford conceptually, they get it, see the cars in the driveways, i don't think they have an idea what their businesses are doing in terms of why isn't the stock not performing? >> i think they have gotten in at the lower end here, guy, and other thing to say is i think they have a better idea there than most people of fixed income and i thought your first point is where we're at. people forced to make decisions right now they may not want to make needing yield as the baby boomers head to retirement. >> we have to go and also interesting and fundamentally at least maybe a fixed income

instrument to hold to annuity. gm or ford, are you forced to -- i'm sorry, the utility stocks, forced to sell them and potentially realize trading losses? guy, come back. j.j. thank you. >> always a pleasure. on twitter here with seema? >> twitter with brett taylor to the board of directors, founder and director of quip. also formally cto of facebook and also known for his involvement in creating the facebook like button and here we go. appointing bret taylor to the board of directors, of course, a stock under immense pressure, down about 57% year to date and interestingly enough, the stock off of the lows in the past couple of weeks after microsoft announced the acquisition of linkedin and stock up 20% since that news. back to you. >> what were you saying about the like button? >> bret taylor, i was reading about this, was involved in the

creation of the like button on facebook. >> huh. >> how many people claim credit for that? aren't there like seven. >> a guy claimed the #. we have had him on the show. >> that guy and probably seven that claim ownership of the like button. >> only involved in something like that, i would be putting up a banner. >> i have to say unchanged, right? twitter stock, doesn't move the stock. >> well, still. maybe they can move and additional moves as impactful. seema, thank you. netflix shares higher after they reached a deal of content to comcast set-top boxes. up next, a guest to discuss why the deal is so important to both netflix and comcast, a parent company of nbc universal. head of fbi recommending no criminal charges against hillary clinton over the e-mail server scandal. coming up, whether the presidential hopeful will be able to put the controversy behind her. you're watching cnbc, first in business worldwide. called for hp as soon as i saw her.

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welcome back. netflix popped today on news that comcast, our parent company, allowing them on to the x-1 cable program. cara swisher fini eer broke thed

finished the watermelon. she is here. >> very good for you. >> what's this all about? >> there's been ideas that comcast to let more players on to the platform and obviously comcast and netflix not a frenemy but enemy war. the ceo hastings is a critic of netflix and it's a big deal on the platform. >> what is x-1? >> their platform for information to consumers. >> like an app in. >> it's the cable box. it's the cable becomes. >> if you're a subscriber -- >> translate. silicon valley to new york. >> the fancy name for the plain old cable becomes. >> i see. as a sub scriber to comcast, what will happen now? >> you can -- just the way you get a lot of other stuff on comcast, you can -- like roku or apple tv, netflix is right there and sign in to the netflix

account to watch on netflix like "house of cards" or "orange is the new black" and you get it on the comcast platform, a series of apps and things like that. >> cara, you mentioned in the article, the piece you put out earlier, the eye toward regulators and play well. how much do you think it -- >> comcast said that's not the case but tom wheeler, chairman, said he's talking about opening cable boxes. not something comcast likes. you wonder if they'll add hbo and amazon and better for consumers. like being able to buy a certain record at one store and another record at another store and as a consumer you should get everything. >> why do you see it going, denn dennis? >> netflix won the power to make comcast play ball. the consumer wants to have that

access on his or her cable becomes. >> netflix wants to be involved? >> why not? >> why not have access? keep in mind -- >> isn't that a -- comcast, my point is when's the one benefits from -- >> in. >> who's winning from this? >> i would want to know what kara thinks but netflix won with the brand name on comcast's property directly on premise to use a bit of an analogy. >> competing with dish, roku, apple tv. you have to have a -- it is not just -- comcast also delivers content. if that's the content people want and the stuff they have to offer like hbo's "game of thrones" you have to provide it to the consumer and be competitive. >> you know what? i don't want comcast and cut it off and get netflix but it's right there and so easy and i like the cable shows and keep it. that's part of the wager and the

inertia gets easier of netflix already there. >> do we know the terms of this? >> netflix done a bunch of deals with small cable operators and in europe and typically with apple, for example, a certain percent and of in app percentages and bounty thing and then who's in charge of billing and a payment probably going towards comcast and then netflix gets the subscribers which also hitting a subscriber base that's older and that's a good thing, morgan stanley with a report of this. a pool of older people that use cable and always a good thing. >> saying the advertising market for cable is looking better these days. kara, twitter announced that bret taylor joining the board of directors. what does that move signal to you? >> bret's a serial entrepreneur and well liked. worked at google and facebook. friend feed bought by facebook. not a huge success and an interesting company. i think probably trying to get

more entrepreneurial attitude in the company. he's incredibly well liked and twitter has to sell the company. >> who's the buyer? >> maybe facebook. could be. could be. probably google, apple. >> why not, right? >> news corp., comcast would be a buyer. >> worked at facebook, too, i understand. >> cto. >> thank you for joining us. >> thank you. >> kara swisher of recode is a partner of cnbc. shares under pressure after saying to cut costs. we'll discuss whether that's more proof passive investing is beating out active strategies. is hillary clinton really in the clear and the fbi won't recommend charges against her following the investigation of the private e-mail server? hearing from both sides of the aisle when we come back.

fbi director james comey announcing they're not recommending charges against hillary clinton. >> there is nobody in america that could possibly believe that anybody else after what jim comey would not be prosecuted for imperilling our national security. her repeated extremely negligent carelessness and her destruction, remember, of 34,000 documents would be proof of intent. >> all right.

so did comey make the right call or not? let's bring in two washington veterans here in new york for us. ron, you think he's doing what exactly here? >> well, i think he's giving, director of fbi is giving secretary clinton a pass. i worked in the white house for four years. i had a top security clearance and specific about the handling, dissemination of classified information and looking at what the director came out today and said, well, she didn't intend to harm the united states, that's not in the statute. that's not what he should have been looking at and a reasonable prosecutor based on the evidence, circumstantial could have found a conviction. >> ed? >> i couldn't disagree more. jim comey is a tough piece of work. we were prosecutors together in the '80s. he was deputy a.g. under john ashcroft in the bush administration. so if jim say there is's no case, there's just no case. >> we had another guest suggest

that he might be motivated by eyeing a seat on the supreme court. what are the ambitions do you think? >> i don't remember if you remember the incident at john ashcroft's bedside and threatened to resign rather than don what people were pressuring him to do. no one is more ethical than jim comey. this is spillout of the benghazi case and i don't think it deserves more attention than benghazi. >> we both agree. i served with him in the white house for the bush administration in 2000 and no graeter individual with integrity and the secretary of state said i did not receive or send classified information. he notes that they were sent and received marked classified at the time. she said i handled this, secret service protected my server. well, no. you cannot read in classified

programs put the documents on a thumbdrive and secure them in a place not on a secure serve and more than one device, she had several. if the underlying charges against her, it's compelling if it were a ron christie in the white house that did these things, i would believe in the jill. >> you have to prove knowledge and intent and no evidence of that. there was no one said that she was aware of confidential information, classified information sent to her or sent it out. if they classify it after the fact, there's never been a prosecution of anyone under this statute unless there's a matter of intent or treason and neither one applies here, obviously. >> i'd respond saying that the secretary of state's office on the seventh floor in the state department is a skiff. it's secure. as folks who have been read in security programs know, the

intention here is not whether it was marked or not marked. it is assumed classified at the time that it was sent and received. >> is that -- wouldn't that be the case, ed, wikileaks with the e-mails and a better sense of what's in these e-mails and does this pass the test of reasonability? >> no. she has to know and not assume that it's classified. and it's confidential, obviously, careful. she was careful. no evidence that anything was leaked, no evidence it was hacked. so, this is a mountain out of a mole hill. it should just not be prosecuted. >> my thought to that is interesting that he said that the she used it while abroad and a reasonable expectation enemies of the united states could have hacked the system and got the sensitive documents and i go back to the way once you're given the privilege and the trust to look at classified information for the united states government secretary clinton knew as signing a document as i did, the handling of the documents and suggest she

didn't know they were classified and sensitive, i think is a distortion after the fact. >> a final question, ed, too, appears to be 34,000 exchanges of the state department and clinton global initiative. doesn't that raise flags too? >> could have and would have don't make for a criminal case and an investigation by a tough prosecutor. deputy a.g. under ashcroft, head of the fbi. he was a prosecutor with me in the day of prosecuting politicians. the's no case. >> ed, ron, thank you both. that's the latest on hillary clinton east e-mail woes. she's been speaking with president obama by the way at a rally in north carolina but as far as we are aware the topic has not come up. we have a news alert with meg terrell. when's happening, meg? >> kelly, folks right remember that fedavation is trying to fend off an offer and entered into confidentiality agreements

with several drugmakers and as a result of that terminating the bid trying to replace some of the board. now, fedivation said that there was a higher aur than offered and a $58 a share in cash. plus a contingent value tied to the cancer drug that could be worth up to $3 a share. they said they rejected the new offer. earlier today, you saw shares rising on a reuters report that they had entered into agreements with pfizer, as well. heathing up quite a bit, kelly. back the you. >> trying to follow it all. thank you. time now for a cnbc news update. back to sue. sue? >> her's what's happening at this hour. pope francis with a video me message calling for peace in syria and harshly criticizing

countries that supply arms to fighters and spoke of the unspeakable suffering of the syrian people. a study of italy finds eating pasta could slim your waistline. you heard me right. researchers found instead of increasing body weight, pasta did the opposite. experts suggest consumers consider adding some pasta back into their diet with moderation. and the mega millions jackpot risen to an estimated $454 million making it potentially the seventh largest lottery jackpot in u.s. history. the odds of picking the correct numbers -- 1 in 259 million. the drawing will take place tonight so get those tickets. and this is my favorite story of the day. twin sisters giving birth on the same day at the exact same time in different states. lea rogers delivering a boy at 1:18 in the morning mountain time in denver. a time zone away, identical twin

sarah gave birth to a girl at 1:18 pacific time. they said they didn't plan their pregnancies and i don't think they planned the deliveries either but what are the odds of that? >> wow. >> 259 million for the lottery but i -- i think it's probably the same for this. >> crazy. the guys looked the same. echos of each other. i was trying to figure out who was there. >> we were, too. we wanted to have the right person with the right baby. >> that is very cool, though. somehow they pick up on things out there in the universe. >> they do. >> thank you, sue. >> sure. see you tomorrow. consumer financial protection bureau celebrating the fifth anniversary. up next, richard cordray with the agency's successes over five years and responds to critics saying the regulations hurting the industry. and the record-setting golden state warriors might be better on paper with the signing of kevin durant. they'll break down the economics

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welcome back. time now for the market rapid

recap. the dow, s&p and nasdaq lower today. the s&p lost a little more than two thirds of a percent and the nasdaq weakest performer. actually crude was the big loser plunging 5% at one point and the airlines hit hard. didn't see much of a benefit there. delta cut the guidance because of higher jet fuel costs. and those shares down more than 3%. tesla delivering just over 14,000 week vehicles in the quarter. the automaker blaming an unusually large number of vehicles on the way to consumers. now five years ago, the consumer financial protection bureau created under the dodd-frank act to protect consumers and critics say the regulationless hurt the industry. joining news an exclusive interview is director richard cordray. welcome. it's god to see you. and before we talk about the

last five years, what's the next move for your agency? >> well, we're going to be coming out with final rules some point over the next year or so on arbitration clauses in the way of consumers getting the rights vindicated and payday lending rules we think catch consumers in debt traps and looking to reform that market. >> and we have spoken about that. five years in, you know, now having a chance perhaps to see some of the consequences of regulation, are there -- is there anything you'd do differently now or anything in your view is a particular success? >> actually, i think we have learned constantly along the way over five years but if you put together what we have done over time, we have stood on the side of consumers to make sure they're treated fairly in the financial marketplace and back $11.5 million to consumers. we have reformed the mortgage market which blew up the economy back before the financial

crisis. so that it's a safer and better marketplace. and we have responded to almost a million consumer complaints getting individual relief for people around the country and fixing problems. >> susan? >> so, richard, i want to come out to consumer complaint data das base and an important number, 1 million almost. >> yes. >> there have been a lot of times where people felt like they had no recourse for defrauded by the bank in terms of a mortgage, deceptive marketing practices and feels like it's an important thing for consumers and the number reflects that. however, a lot of banks are complaining about the complaint database that some of these are unwarranted complaints and you have looked at that. where's that stand? >> i think that was a more legitimate criticism in the early days with a few complaints and i think less than 1,000 the first month and over time the volume of complaints is tsteadiy

increasing and so much data that the notion that a few of them amiss or maybe not correct is one thing, but the pattern of what we see is very telling for us and helps us prioritize our work. i think it's great data. >> dennis? >> hello. a question for you. it's very interesting from the bank's perspective saying they're pulling out of markets because in a number of respects they're not being allowed to do the work they want to because they fear the cfpb is going to come after them particularly as it comes to disparate around racial issues and jumbo mortgages, they're less conforming. would you say there's a positive difference? >> well, i think we are reforming markets and particularly the mortgage market and what you find with that is consumers can be more confident they're more protected and what

markets? mortgage lending is up. auto lending is up. we had record auto sales last year. credit card lending is up. consumers are feeling better able to manage their finances, responsibly. they're getting fairer treatment. that's good all the way around. it's a win-win. >> all right. and as far as techniques in the auto lending realm, there the cfpb under criticism for alleged racial discrimination in auto lending. do you stand behind the techniques and base them on people's last names and areas of which they lived? >> we work with the justice department on these cases and we see eye to eye on them. this area of the law was reaffirmed by this u.s. supreme court just last june. and we also think that it's a basic principle of american society that people should not be discriminated against based on racial or ethnic background and made to pay more or denied. that's the law to enforce and

we'll continue to do it. >> of course on that basis, people want to prevent the harms, a question of tactics. but before we let you go, what's next for you? we have heard speculation about perhaps being part of hillary clinton's ticket. you know? it's five years now into the cfpd's tenure and what are you thinking in terms of your work to be done or other areas you may be moving on to? >> standing up for a consumers is a full-time job and blessed to have a chance to do it for five years. we're focused on how much work we have to do to make sure these things work for both consumers and responsible lenders and for the american economy and that's my focus. >> if donald trump asked you to be his vice president would you say yes? >> no comment. >> thank you for joining us. richard cordray is correctdirec cfpd. goldm maman sachs saying to and turning to passive

strategies amid the volatility, what this means for active managers next. and pro-basketball star kevin durant expected to sign a contract with the golden state warriors for a cool $54 million. we'll look at the other huge deals being made in the nba's free agency period in a bit. you are watching cnbc, first in business worldwide. thank you is what we say. but we mean so much more. we mean how can we help? we mean what can we do? we mean it's our turn. to do our part. to serve you, for all you've done to serve us. ♪

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welcome back. gold man sax telling the asset management division to tighten the belt. kate kelly has more. >> hey there, kelly. a new report this morning published by the ft that the employees are watching their corporate cards. the idea is to rein in travel unless it directly relates to current management. everything else on the black. this is a time when one key bond fund is down nearly 3% through june according to morningstar figures placing it in the bottom 20% of the bond funds morningstar tracks and underwater on a three-year basis, as well. they're also reporting that the broader mutual fund business weathered nearly $18 billion in a year and a half and even as the assets under management risen year over year to north of over $900 billion. despite the setbacks, the business makes up only 7% of the overall revenue at the asset

management division and includes a bunch of other businesses of hedge funds, private lending among other things and investment manage systematic a smaller segment at the firm overall. still, it's a rough time for the unit, kelly. unclear how much a cutback in travel and entertainment is really going to help matters but it can't hurt in a down time to kind of watch those beans you're counting. >> yeah, exactly. >> hey, the fees on some of the fees is -- what is it? >> probably -- on this fund, i don't know. >> call it -- >> i don't know. >> not 1%. >> say 15 basis points or 75 for good luck. i mean, why would you want to pay that right now given that you can get a vanguard fund or fidelity fund for 15 basis points or 12 or 4? so yes. the move does seem irreversible

right now. >> i'm wearing belt tightening across the industry. there's stuff that's eating into the lunch here. >> absolutely. i mean, and we all might be replaced by robots any moment. that is true. i was actually going to go in a different direction saying broader story and talking earlier about underperformance of hedge fund and assault on the 2 and 20 model and another corner of the world with uk property funds and three of them now and counting, you know, there's a question whether this daily liquidity makes sense for the more liquid assets and across the board questions about structure, fees, efficacy of investing models. all on the table. >> another high-profile example. thank you so much. $3 billion, that's how much money was signed in contracts in the first four days of the nba's free agency. what this new money means for pro basketball next. what's it like to put your home in good hands?

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welcome back. kevin durant set to become steph curry's newest teammate on july 8th when he signed his contract with the warriors. the deal is worth more than $54 million. eric, detail, but also, how are they doing it and why are they getting so high? >> if you look just in the last four days, $3 billion in contracts have been given out to like 5560 free agents. we have another 40 free agents to go in that top 100, the core of the league and most of that money to answer your question, two companies. disney and turner because they did a $24 billion new deal for television rights for the nba. it was triple the previous deal.

so, the salary cap that used to be about $58 million per year was flat, most last few years australia around 70. this year, it's going to be 94 for next year a. >> each team? >> it goes from 70 to 94. so compare next year's to what it was vus just a year or two ago. if it goes up $24 million and you go get durant for 27, it didn't really affect you. >> where are the warriorsing that in. >> it's 27 each year. now, they can spend another 24 per year because disney and turper are giving every team more. >> where does that leave curry, who was not one of the league's cop players. >> he's going to be about the fifth or sixth highest player on the warriors, so he's got one more year to go and then you'll see him try to renegotiate for a bigger number. then he'll be about $25 million.

>> if there's any room at that point. >> there are super scrubs making more than that right now. >> timothy moss in l.a. >> we'll probably see more as vertizements because something's got to pay for that and two, i've done a callation to have number of shot attempts by durant. thompson and green, 66 shot attempts. 68.9 per game. 20 shots for the rest of the team. i'm willing to make a bet with you, kelly, eric, the field for a dollar. you guys can have the warriors. i think it's not going to work. >> now what happens is they have four guys that are making a lot of money. the rest of the team will be minimum contract guys, so the depth you get for having, think about what stocks, you can put your money in one stock, but if that doesn't turn out well, then your diversifieied basket -- >> these are the paying stocks! have they been prigs pricing this? >> vegas now has them as

majority favorites to win the title next year, so there's two to three. better than 50%. so the warriors then the rest of the league combined. thunder went from 8-1 to 30-1, so they're kind of out of it. >> is this good for the league? i'm a duke man i. went to duke, so i know what it is to be part of a dynasty team, we love it, but everybody else hates it. is this good for the league to have such a concentration of talent? >> three owners in the league, 24 of them come from small market teams, so when you put them in a room to vote, they're not going to like that. when you listen to the commissioner, he want he didn't want things like this to happen. they were hoping the cap wouldn't turn out this way, but it's because curry gets paid so little they can make this work. >> and the players voted for this to happen at once! the league wanted to do cap smoothing. thigh didn't want it to jump up, but union said no way, you guys are getting the money now. we want to money now.

this is a unique situation this year only. i don't take bets on tv. >> thank you very much. media moguls are taking over sun valley, idaho this week. not just to participate in outdoor activities, but to make some deals. we'll head there live for a preview on a check of the guest list, next. list, next. shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. intensely-flavored.. colorfully-diverse. beautifully-misshapen.

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the annual conference in idaho has sent many deals in motion. julia boorstin is there with a preview. which companies are making move sns. >> well, they gathering some of the most powerful investors in the world to sit down here at the lodge behind me. all these folks are going to be arriving this afternoon. so far we've seen bryce grazer and james muhr dog. his father, repurt and brother are also attending as are disney's bob igor and -- he predicts more purchases by cable

and satellite tv companies. >> maybe more consolidation, but i think you're quoung to see more in terms of the big distributors, at&t, verizon, deutsch telecom, telenor, bt, the big satellite players. more and more, whatever your cory competency was, they're all merging. >> we also expect warren buffett, bill gates and mark -- as well as peter teal and jeff bezos and mark zuckerberg. we expect to see boths of is sumner redstone saga. his daughter is on the list for the very first time. she's feed wg a long time attendee, philippe dauman over the future of the media giant. they're likely to keep quite a distance from each other and likely stick close to the cbs

cbs ceo. there's also star power here. oprah is on the list again after several years away and on the agenda include a conversation about artificial intelligence and its impact on business in the future as well as commerce. commerce secretary will be attending we pecht plenty of conversation on trade in the wake of the brexit vote. >> thank you very much. who would you chase around, dennis? >> in terms of a deal? as we were discussing earlier today, i think twitter 2016, maybe in 2017. gets old. seems like that's the inevident bability for that. >> do you think the deal making is still likely out u there? didn't start or intend to necessarily be that way. >> it's happened and it will continue to happen as he said. it's all merging into one giant

scrum. >> we'll see. thanks for joining us. talk more basketball after the break. >> warriors and oklahoma in turmoil. any way, that does it forrous. "fast money" begins right now. >> "fast money" starts now. from new york city's time square, your traders on the desk -- tonight, deutsche bank out with a bold call which would spell doom and gloom for the u.s. economy. plus, gold's record rally and one trader is betting get this, 6 million bucks that the yellow medal is heading higher and troubles are mounting. how worried should tesla's shareholders be about the second half of the year? lebeau has special report, but first, the markets. the dow dropped 108 points. s&p sliding, putting an end to the