>> that is amazing. >> that is fantastic, tyler. >> robert the host. >> how about this for the title of that show? "if you have to ask, you can't afford it." >> that's even better. >> thanks for watching "power lunch." "closing bell" starts right now. welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> the dow coming back from a 100-point drop earlier today, currently up 38. but apple still under some pressure. the stock down nearly 3% after yesterday's earnings and the outlook failed to impress investors. apple hoping the mac event will change the narrative. julian robertson. hear how he's so concerned about a democratic win on election day. >> there is a great fear that

mrs. clinton is going to put these people out of business. >> we will tell you what sector he is talking about, coming up. and look out, m irylan anot epipen may appear next year, but people are worried it's not what it should be. let's start with apple. the company posted year-end declines for the third straight quarter. we're going to bring in colin gillis from bbc financial who has had a sell rating on it for a while. colin, maybe we'll start with you. did you see anything in the report, did you hear anything from tim cook that alters your view at all that the stock is still a little too high here? >> the issue i have with apple, and the market is also expressing by looking at their price to earnings multiple, which actually declined the

tenure of tim cook while the broader market has gone up about 40%. apple doesn't have that founder flame anymore. we reiterate their existing products. there are starting to become some question marks in the narratives like, will china return to growth? will there be the strong demand for the iphone 8? it's still strong products driving the revenue. >> how does apple get from here to there, especially in a quarter where the revenue in their apps, for example, was quite good, but it also might have had a lot to do with pokemon go. >> it probably was pokemon go, but we got super mario brothers coming. i feel growth will continue to improve in our view, and that will condition to the iphone 8 cycle. looking at that for growth, i think the stock is too cheap. >> the stock is too cheap, andy. it obviously had a run of 25% since the summertime lows.

was it expected momentum with the iphone 7? what can we expect from iphone 7 to 8 sales as we look into the next four or five quarters? >> if you look back a couple months ago, the iphone 7 sector was expected to be worse than it was. to drive the stock meaningfully higher, you have to go through this cycle or you have to have people start to look more towards the 8 or a new product. the 8 is probably more than likely the new product, at least in the next 12 months. >> i know, colin, at least one analyst who thinks apple is a classic value stock. not a ton of growth, says it's maybe kind of pinned between 100 and 130. if it still has those characteristics of returning, it's doing the buybacks, it's doing all the right things and it's not materially slowing in terms of turning negative on a sustained basis, then is this a company you really want to have a sell on? >> if you look at the question

mark of whether the iphone is going to return to growth or not, this was probably one of the best quarters for apple -- the december quarter. this is the holiday quarter. they have an extra week. then, of course, samsung with the galaxy note literally coming out of the marketplace, it really leaves apple's iphone 7 to fill that void. the good news saul ois all out. it remains to be seen whether china comes back. tim cook is backing on india. that remains to be seen. the mac product announcements coming out. that will be a tiny blip. it's all dependent on hardware sales of the iphone. if you see any hiccups in the march quarter, limited upside in the december quarter. >> there was a little kbasimpate by the analyst yesterday about maybe using the capital it has

at its disposal. do you think those are maybe general overhangs or is it just what we like to talk about? >> those are general overhangs. that's why essentially it's the cheapest name in tech right now, because people aren't giving him credit for that, probably nor should they. but all that creates opportunity if you're a shareholder and you can support the down side with the valuation and the iphone by itself and all those other things can drive upside if they come through. >> colin, will you turn positive? not just that they can show a reaccelerati reacceleration. >> you see companies like softbakr going out and buying arm holdings which would be a very nice fit for a company like apple. it would be overseas cash which apple has ample of. their domestic cash is much more constrained. we see them continuing to rely on the same product base, and

while they do that, the market is not going to value them as anything other than a hardware company. >> all right, guys, thanks. we'll leave it there for now. andrew hargrave's colin gillis talking apple. now to the rest of today's earnings. bob has the highlights on the floor with us. bob? >> we're moving up on the s&p in earnings. take a look at boeing setting up disappointment for apple in the dow. so did nordstrom, general dynamics. ing ingersoll rand, think heating and air-conditioning. that's up by 3%. that's helping some of the industrial names. not all the news was great. look at southwest, down almost 8%, and this is even weaker earlier in the day. they talked about higher fuel and labor costs, the technology outage in august also hurt them, their unit revenue down about 4% so all the airlines are down. finally i want to point out the

technology names out there. akamai had great numbers overall, juniper networks had great numbers. their earnings estimates they reported well above what analysts were expecting. bottom line is this, folks. right now earnings are looking to be positive for the s&p 500. for the first time in four quarters, the earnings recession may finally be over. guys, back to you. >> bob, thanks a lot. a lot of give and take in the earnings but tilting to the up side. we have kim forrest from the capitol group and jack and the co-founder in chicago. if i look at how the market traded today, s&p 500, you could argue sort of held where it had to and then bounce wd crud with oil. what do you see going on in these relationships? >> mark, i would expect a change

today. october is one of those big, scary months for portfolio managers. they will sit and cash until the very last day they possibly can, and sure enough, they put that money to work. so this is the kind of day you would expect to see strength. the fact we're not getting more strength is actually surprising me. something is wrong with this market. it's starting to act a little sick. you heard bob's report on earnings, but when you hear stocks like apple, say what they said, or ge, say what they said, these are bell weather stocks. then the question is are we going to get a surprise with this gdp on friday because these numbers are starting to scare people. >> do you agree with that, keith? what is the market digesting today? >> the market is digesting what we topped in august. we've now been in a short-term down trend since that time. if you were to take a look at the charts for both of those indexes, in the russell which is very less formed, we have a

triangle wedge which we have right now, and if we break down 2020 and 2015, it wouldn't surprise me at all if we go back and retest the february lows around 1810. the trend line that was drawn from the february lows at 1810, we've been dancing back and forth across that line for the last two weeks, and we really have no direction. we're consolidating into an indecisive direction right now, and it will take a real catalyst to break this market out to the upside or even to break down to the down side, and i don't see that happening in the next 30 to 45 days. >> kim, as somebody who looks at company by company, stock by stock, is this earnings season generating more opportunities, or does it basically look like more hazards out there for your portfolio? >> well, it depends on what kind of timeline you have. so we're longer term investors. any time we buy a new position, we're looking at three to five

years out as the low end of the holding period. so if you are that kind of investor, some of these stocks that traded down look really good to us. for example, intel. intel, i think, is well positioned in its portfolio going forward. we're going to have cars that drive themselves, trucks that drive themselves, drones, a whole lot of processors out there. and we think intel has the technology to be able to deliver it. so if traded down, people wanted more than, you know, they could deliver in this quarter, and we took it as an opportunity to add to our position. so that's what we're doing. and then on the other side, stocks that are just priced for perfection, maybe you want to take a little bit off the table. >> kim, what about in the oil space we've been talking about? the price has stabilized since it collapsed last year. does that mean there are opportunities out there?

>> well, it's super complicated. so here's the problem. oil is a commodity, so you can get it from north america, you can get it from saudi arabia, you can get it from iraq. it doesn't look like the opec, you know, agreement to reduce the amount of oil they're pumping might hold up. so it depends. are you feeling lucky today? if so, maybe buy some oil. or what we've done is we hold an integrated company that, you know, gets money not only off of pumping it out of the ground but also selling it to you and making chemicals and that kind of thing and they pay a great dividend. do you feel lucky? i don't. >> those of us who saw the movie know that it takes a lot of courage to answer yes to that question, kim. jack, let me circle back to you and wonder if you could spin this whole seasonal thing a different way, which is to say we've just about come through the scary september-october

period, the s&p 500 is down less than 2% as we speak right now. did we dodge a bullet? will that make people think the end of the year is a little safer? >> michael, let's take a step back and understand. a year ago at this time we were essentially in exactly the same spot in the s&p 500. what has happened since then, stocks like apple have gone up 25%. if we're not going to get one or two of these big stocks that have really been carrying the rest of the market going up, then we might be in trouble. you couple that with the fact you got a big headwind in this election, and the other thing we were touching on and kim talked about opec a little bit, if we see a disintegration of opec -- and there is a very good chance that could happen -- it might be more important than the election results. you can see oil go down to 20 or $30 a barrel, and that alone will drive equities to that 1800 level keith was talking about. >> just like a year ago, we have to keep watching oil. we've got just over 45

minutes left before the bell. we have the dow flirting with the line into the green. s&p 500 just 2% below, and those big stocks are holding down the nasdaq for now. julian robertson speaks with us exclusively. we'll talk to him about why he's apoplectic about a clinton presidency. tesla, texas instruments, groupon and other big names. we'll break them down with our cnbc analyst. you're watching cnbc, business first worldwide. before taking his team to state for the first time...

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victory this time, but he's not, and we're in kind of chaos, and i'm up in the air, but i decided to support the libertarians, and bill well is a good friend of mine and i have a lot of respect for and faith in, and the governor of new mexico had an excellent record and whereas he

may be a little more aggressive than i am on drugs, i can go along with their policies. >> but are you okay with the fact that voting for them basically helps put hillary clinton in the white house? what happens if hillary clinton wins this election? >> well, i think that's a tragedy that is going to happen, with or without me. >> and what about the prospect of winning the white house and her gaining control of democrats in congress? >> i worry terribly about that, and i worry about so many of these great senators and congressmen who will be out of power to regulate our country. >> so if you're not a supporter of donald trump's, do you feel like it's still important enough to make sure that if you support the republicans that you give them the best shot at the white house, especially with a supreme court in play, that they get support down the ballot for the senate and house races you're

talking about? >> i think it's very important that we get those great senators and representatives of the republican reelected. i'm trying to do that. but i'm going to stick with the libertarians. >> why is it so important to you to make sure that republicans have as much control as they can in this country? >> i'm apoplectic over the thought of mrs. clinton being president of the united states. but i also feel very strongly that these republican people kept people like kelly ayotte and people like that, joni ernst in iowa, they are really good people that set a tone for our party and for our young people to aspire to. >> let's talk about your business a little bit, the hedge fund business. it's under some pressure these days. so, you know, what happens from here? how bad is the shakeoutgoi goino

get? >> the shakeout is tough, and it's caused by, i think, increased competition from more hedge funds. i suspect we'll get over this at some time before too much longer, but it's been a very tough period for hedge funds, all of them. >> what would you tell a young person in the business who is interested in some kind of career in investment and finance? where would you point them? >> i would talk to any young person getting into business, and i would tell them, hit them where they ain't. go to an industry that is lacking people. when i got into the investment business, the real big hitters that companies wanted went to advertising. that was the hot thing. nobody wanted to be in investment banking, and investment banking was the place where they should have gone, and the reason that they should have gone there was because there was

nobody else there to fill these flops. >> anywhere today that you think looks interesting? >> well, i don't have any ideas on that. i'm not thinking of changing jobs right now. >> so what about investments that you like? what are some good opportunities you see in the markets right now. >> i really like microsoft. i think its cloud activities and also the new management has brought a revival of bill gates' initial strategy, and i think that's a great company. >> do you mind that the shares are at an all-time high, though? >> i don't mind that. i don't have the statistics on it, but they're probably very little ahead of what they were in about 1995, i guess. i like air canada very much. i think it's an airline that's

doing all the right things, and it's priced about three and a half times earnings, and it's down about two points today, and it's, i think, a well-run company doing the right things at a very cheap price. >> and we'll have more from that interview in the next hour of the show, including a couple more companies that he likes. what i don't think made the cut but is worth mentioning when it comes to politics is he actually thought the mexican peso was oversold and that the united states would make a good investment. >> it did seem like it wasn't trading at its fundamental. also interesting that he now likes microsoft. julian robertson in the late '90s, he didn't participate in the bubble, really. he paid for it in the short term but paid off for him in the long term. now he likes microsoft at a more

reasonable valuation. >> it's trading at all time highs, but he pointed out it's only a little bit higher than the '90s. >> earnings are a whole lot higher. >> yeah. we'll have more from that interview in the next hour of the program. we have about 40 minutes, a little less to go here, and the dow is moving higher. a gain of about 50 points. it was mostly oil calling the shots earlier. a new poll shows donald trump meeting hillary clinton in florida. we're told why the stakes are so high in the sunshine state. ceo mark hurd for oracle. how oracle plans to one-up rivals. stay tuned. cnbc sector sort

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increase in active users in the third quarter over last year. >> one day changes that. new poll numbers for the presidential election show donald trump leading hillary clinton in florida. john harwood has the story. hello, john. >> donald trump has been complaining lately that the polls are rigged, and it's not surprising because the polls haven't been very good for him. today he got one that he liked an awful lot. it's a new boomberg politics poll that shows him two points ahead in florida. a must-win state for donald trump, so any polls where he's winning is good. a larger margin of african-american voters and smaller of latinos. this poll shows hillary clinton is 1.6% ahead of that average. donald trump only leads in two of the polls. we'll have to watch and see if

this is the beginning of a turnaround for donald trump. he did get some bad news nationally of a poll out this afternoon, usa today and a suffolk poll had donald trump down nine points to hillary clinton in a four-way race, and significantly, while hillary clinton is getting 89% support from fellow democrats, donald trump is only getting 80% support from fellow republicans. that's 13 points behind mitt romney's pace in 2012, and it illustrates the dynamic that you guys were just discussing with julian robertson, which is that you have some reliable republicans that are not on his side. he needs to have them come home to tighten this race in florida and everywhere else. >> john harwood, thank you very much. let's talk more about the candidates and whether this has changed the economic discussion. >> joining us now is senior executive at brooking who spent

30 years at the wall street journal and made us cry. >> i didn't make you cry, kelly. i wiped other's tears who made you cry. >> what happens after election day? let's just say hillary clinton is in the white house. it still seems the ground has shifted tremendously. >> i agree. tie large extent, though, this has been a substance free campaign. when this started a year ago, i thought there might be interesting arguments about spending and taxes, and we made a little budget game called the fiscal ship to let people see what the choices were. what we've seen is almost all the subjects have been pushed to the side. i think donald trump made it easy for hillary clinton. she doesn't have to talk about the long-term debt because he would blow up the debt. so she says, well, i won't make it any worse, and she looks fiscally responsible. where i think the biggest issue is on trade, where the needle has moved and it's really hard to see how hillary clinton can take office and talk about tpp or any of these other free trade

pacs. >> she can't talk about them or she can't promote them? >> she can't promote them. it will be like george bush's "read my lips." she might someday get there. i think part of her trust problem is everybody knows she's kind of sympathetic to these treaties. but coming into office where she'll have to worry about this sanders/trump contingency of voters, she won't want to do something to tip them off. >> are we just talking about issues around the edges, or is this campaign going to define what really matters for the trajectory of the economy? >> i think the campaign will define, and the challenge to hillary clinton and the leadership of congress is to convince americans that we can have the good parts of globalization, but they will try and steer us away from the bad parts. any one trade treaty and sometimes calling these free trade treaties is a bit of a misnomer. there are tons of rules that

advantage some people and disadvantage other people. the idea that we're going to build a wall and shut down globalization is very dangerous. i think we have to worry a lot about our competition with china. i think the most serious thing about rejecting the tpp, which there are some things to argue about, is it leaves asia to think maybe we should get into bed with china. >> and look what's happening with the philippines and every where else. it's interesting to think about the impact elizabeth warren and bernie sanders will have here. hillary clinton is now the person who is most likely going to be in the white house, so did she have to take steps to immediately kind of say to them, look, i'm going to do free college, or i'm going to -- what economic policies do you think are going to happen because of that? >> i think they will have a lot of clout. bernie sanders, who basically had no clout in congress before, will come back much stronger. you heard hillary clinton leaning heavily on elizabeth warren on the campaign trail the other day. i think the most important thing will be the appointments. do do

do bernie sanders and elizabeth warren have is a veto over the next undersecretary? they're gearing up for that. i think the first skirmish will come over that. in order to govern, she's going to need to deal with the house of representatives where the republicans are likely to still have a majority, or even if they don't, they'll have a substantial minority, and she's going to have to compromise. so tricks for her is to keep give enough red meat to bernie sanders and elizabeth warren without completely turning off the republicans and ending up with four years of getting their votes and nothing through congress. >> you mentioned trump let her off the hook because she didn't have to address the long-term debt situation. what should be the main message about the long-term debt if you're in her shoes? >> the long-term message is we should not worry about it right now. it's large, it's not causing us any immediate problems. we know we have a dearth of public spending and private

spending. we know there's nothing the fed can do. it's nothing, in my opinion, we should worry about right now. but saying we're not going to worry about it over the next 25 years is dangerous, so what they should be doing, and it's tough to give people two-part messages. we're not going to cut the deficit today, but we're going to take steps -- social security, medicare, medicaid, other entitlements -- that will reduce the debt over the next 25 years. >> it's good to have a substantive discussion about these policies. >> more here than we had in three debates. time now for a cnbc update. let's go to sue herrera. sue? >> reporter: ash carter telling the pentagon to stop trying to take back bonuses given to soldiers that reenlisted. four high school students have been injured in a school bus accident near houston.

33 students and the driver were on board in clear lake. the bus collided with two other vehicles at an intersection. american airlines opening an office in havana this week. the u.s. governments granted nine airlines including american, jetblue, delta and united permission to begin commercial flights to cuba. most start late this year or early the next. they have caught these crooks pilfering thousands of dollars' worth of pumpkins. as you can see, the thieves are picking their own once, not twice, three times. they swiped nearly 200 pumpkins in all. that's the news update at this hour. back to you guys. >> somebody had lots of pies to make. >> that's right. resale. >> i hope you didn't buy a hot pumpkin in new jersey this season. with about 25 minutes left before the bell, we still have -- let's see, the dow is

just around the flat line, up 25 base points. not too bad, and you actually have the s&p 500 approaching that flat line again. a leading trader is going to tell us what he's watching in the close, coming up next. and tesla reporting its results before the bell. we'll tell you what analysts are looking for. we'll break down the numbers before they hit the street. stay with us. that's all still ahead. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high,

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our children thrive. welcome back. keep an eye on shares of under armour today. they're down about 3.5%. they performed from outperform who they believe the sports maker grew too big too fast, and that's putting pressure on cash margins and cash flow. this after a disappointing report yesterday. we have advisers here. take a look at the field position of the s&p 500, mark. we've kind of been in this range for a long time. where are we now? >> in the s&p, we're set to record the third straight dow month, but we're only about 3% from all-time highs, and if there were similar levels, it's been since july. you see we got toward the highs of this range. it's really held since september. this chart is a spitting image of the way a lot of industries

are set up across the world. if you look across the world, they made real highs and we show signs of stalling in this area. my thinking is we're still really week. you need some callous and potentially that's after the election. tech is obviously very strong financials, but you have health care weakness, discretionary. a lot of sectors really aren't doing that well. >> we kind of lost help from housing related and auto related. when you say you need a catalyst, you need a down side catalyst and then maybe you can rebound? how do you think this gets resolved? >> initially it will be to the down side because there are only about a third of all stocks moving to the industry average. how weak right now so few stocks trading all that well. in november, great for retail, the earnings haven't been that

great thus far. we'll get momentum to return to the upside and see financial and tech and industrial starting to trade well, but right now they certainly haven't. 2014 on the down side. we break that which i think probably can happen. it will send us down to about 2070. on the up side 2165. >> we'll hope for the best. with a narrowing condition of about 2.5%. >> that's right. >> thank you. help by boeing with some specific dow blue chip factors there. that 4% gain very different than the s&p which is currently negative 3 points. a privately held drug maker is planning to launch a rival to mylan's epipen next year. we'll look at how much of a threat this could be to the drug giant. and google putting back its massive fiber ambitions. we'll tell you how that could

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mylan labs is under fire for hiking the price of its ep i pens, but there could soon be a return of a rival.

hello, meg. >> one of the reasons many people cited the price of the epipen was the lack of composition for it. that may help next year. sanife withdrew it from the market. it was found to dispense an inaccurate dose or not deliver the drug at all. the inventor is a private company called kaleo and they said they plan to bring it back to the market in 2018. the key question, of course, is price. kaleo's ceo told me, quote, we're working to make sure we have low out of pocket costs for the patient. this doesn't necessarily mean a low price for insurers, though. when it was prooefrl on the market sold by sanife, it was sold at a premium like the epipen.

and t kaleo told me last month that it raised the price to cover the cost of patient assistance. a lot of questions about what this product, when it reaches shelves, will actually do for the price of this drug. >> meg, did doctors consider them virtually interchangeable? >> they consider t but i think doctors were pretty comfortable prescribing them. they were able to take maybe 10% of market share. mylan plans to introduce its generic version of the epipen at half the cost and it's stepped up its patient assistance programs of the epipen so people will get help of about $300. that's the question, what will be the highest amount they'll have to pay. that was the point kaleo tried to hammer home, they didn't want

patients to pay a lot. but in terms of what the insurance pays, that's unclear what that would be. >> this does nothing to sort of resolve all the pricing tactics and schemes that sound like it will stay under scrutiny? >> it's under a ton of scrutiny, and they're coming out with their own video trying to explain the drug industry supply chain showing that the things we've heard from mylan, they're trying to say it's not just the drug companies driving up the cost of our meds. a lot of people skeptical about that argument, though. >> skeptical and confused, i think. meg, thank you very much. >> thank you. we've got less than 15 minutes left before the bell. you see the dow holding onto gains, the s&p 500 down 3.31. tesla with a wave of

investment earnings. we'll show you what you should watch in tesla results. at 5:30, ibm ceo ginn ibm ceo ginni rometty.

welcome back. tesla is highlighting what promises to be a very busy hour for earnings. we have phil lebeau with a preview of those results. phil? >> the one question people will be focusing on, where is tesla's liquidity? we've talked a number of times about the expenditures, the capital expenditures coming up. they have a cash drain that's going on. so the real question will be where is the liquidity at the end of the third quarter? by the way, given the deliveries were stronger than expected, many believe we could see stronger earnings from tesla. the earnings coming after the bell, and a little later on, we'll have contact with elan musk which begins at 5:15. back to you. here we have on the floor steven parker. he's head of dramatic equity solutions at jp morgan.

steven, where you're set up right now, i feel like we've done nothing since the u.s. broad trade in markets. is it all clear from here or do we have things to work through? >> i think the market will focus on short-term things like the election, the fed hike in december. we're seeing good results, and for the first time in a year, we'll see probably positive earnings growth. that needs to continue into next year if this market moves higher. while the market moves sideways, it's the more cyclical sectors which led, and i think that's a positive statement about where we're headed next. >> i should mention we are about paired off at the bell here. the market has been gyrating here. we also learned there was a huge outflow of equities. why aren't people pulling out on the nasdaq? >> we've seen $150 billion coming out of global equity

markets this year in funds. i think people are getting nervous. they look at the election and say, let's take some money off the table. i think that we're not seeing any money and exuberance flowing in could make it go higher. >> the market has remained remarkably strong in the credit markets. is that just an overheat itself? >> no, i think credit markets can do well, and i think one thing they're telling us is we may be in a low positive growth environment but it's still a positive growth environment and that's good for stocks as well. >> good to see you, steve. thank you so much. steven parker from jp morgan. joshua lipton has the details. josh? >> kelly, if you're waiting for apple's new wireless headphones, you might have to wait a bit longer. a statement from apple saying

the earlier response to airpods has been incredible. we don't believe in shipping a product before it's ready, and we need a little more time before airpods are ready for its customers. remember apple said those would be available sometime in late october. that product was unveiled in september when apple unveiled its new iphones, the 7 and the 7-plus which removed that headphone jack. apple not saying exactly when that product will be available. kelly, back to you. >> this is interesting, i guess. people already have the new phones, or do they not? >> yes. >> so if they have the new phones, i assumed these new whatever-they're-calleds will go out with the new phones. >> that was never the game plan. the game plan was these would come out late october. again, that's been delayed. it was certainly announced with phones and reviewers got them to test out the quality, of course. with these new phones you have

to go wireless or connect to the lightning jack. again, no set time here on when the product will come out, kelly. >> if the phone doesn't have a headphone jack -- >> you need other wireless headphones. sync up with bluetooth, josh? >> i couldn't catch that, mike. >> so if you don't have a headphone jack, are you listening with a bluetooth connection? >> you can obviously use the wireless speakers. this was a new product, though, which got a lot of positive reviews. it's not clear at this time why exactly they've been delayed like this. apple, i read to you guys, simply saying they're not ready at this time, no reason given, so we wait until they do hit the shelves. >> there was also talk about compliance issues, a difficulty producing even the phones they have on order. >> certainly that was one big takeaway from that earnings

report. i think investors quickly zeroed in on that guide and what it implied for iphone growth. i know the analyst i talked to said it did include growth of digits. when i asked about that, apple executives made the strong point that right now they are supply constrained. you may want an iphone 7-plus, but that doesn't mean you can buy one. the debate now becomes how much of an issue that is for investors. if you're supply constrained, that's a negative impact to total sales. i know bulls, though, would say there is a demand that they will figure out those supply constraints and meet the demand in the quarter ahead. >> they are these adapters that can be used with the existing headphones. i'm sure you want to take no chances until everything is perfect and ready to go. josh, thank you for that latest news out of apple.

we'll be back with the closing countdown, coming up next. stay tuned. we also have oracle ceo mark hurd to lay out his kacompany's plans to take over amazon in the gains. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

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the important thing is earnings by large better than expectations. i know everybody is going to be interested in tesla, talking

about what's going to happen after the close. mcam is a company we talked about yesterday. tesla is not on the innovative list because of that no source patent that they have. >> bob, thank you. ringing the bell here, we have rincon capital and blacklock. next is "the closing bell" with kelly. >> hi, mike. welcome to "the closing bell," everybody. the market is moving in very different directions today. the dow gaining about 30 points on the bell, recovering from a lot of 100 points in the session today. just below 18,200 for the dow. boeing helped to pace that. the s&p 500, the index dpaufall by the same amount to 2, 139. the nasdaq dropping about 33

closing to the nose of 3,250. a lot of this responding to earnings in the last two hours, and we'll have a very busy hour of earnings ahead of us. phil lebeau on tesla for us. julia borson bringing us results from wild wings. we'll see you in just a moment as we start to cross. we'll also hear from two big names on the streets. julian robertson weighing in on netflix and biotech. and mark hurd will join us from oracle. michael santoli rejoins us, as well as carol roth. man, it was a wild session. you had everything from ncr

moving 18% to still adjusting some of the huge movers. and what we're learning about defense range. >> this bounce has been consistent since july, but what's interesting is the correlation between stocks has been declining. basic it will hasn't been trading as one big market, it's been trading as corporate fundamentals. maybe that's good news. the index themselves have been stretching lower. i do think we have to be on alert for the idea that maybe it's trading a little bit low energy and heavily. but so far credit markets hang in. it's hard to get too concerned even if we do get more down side. >> what's interesting, mike, as you mentioned corporate fundamentals, i feel like there is a different pace to corporate fundamentals. if you are doing well, that is the expectation and you're not being handsomely rewarded for that. but if you're missing and setting those expectations in a way to the down side, then it's a big dang, and i feel like oil weighed in a little more heavily

than the fundamental store we would like to see today. >> most everybody today wondering about the financials. look at jp morgan, look at bank -- citigroup. they have some voice today. what catches your eye here, tim, about the action? >> i look at financials, i also look at the transports. this is a period where we've actually had good pmis. we've had reasonably good industrial data. so for those folks that want to say the world is slowly getting better but there's no expectation that things are going gangbusters, i think the industrial side is actually working. i realize gm's earnings were kind of a disappointment, but i think transports and shippers and certainly in the case of ups tomorrow, i think we have a read on the global economy we should get focused on, but i wouldn't get worked up over this. pessimism is high and that's

what's been supporting markets. 2,139 on the s&p. i think we'll be holding on that, at least for this week. >> a few weeks ago there were some surveys of institutional managers with their cash levels the highest in 15 years. >> it doesn't seem the position for these markets to take off on the up side. i think people are generally a little watchful and hesitant about that. i don't know if that's a catalyst in itself, but it does provide this backdrop that says, look, the market rarely falls apart when everybody is back on their heels. >> if you look at sort of the levels we're out in the dow, we're really starting to, little piece by little piece, we're at a level pretty soon when i think some of that money is going to go, you know what, it looks like time to get back in. >> i wonder if the election plays into it. when you see a number that big and we're just two weeks away, you wonder if people are moving to the sidelines. >> it's interesting. if you would have asked me this a week or two ago, it looked

like we had a pretty good path, volatility going down on that front. today we get a poll out of florida that says trump is now ahead in florida. if we keep seeing some unusual polls coming up in swing states like that, then obviously we'll see increased volatility then. i think you'll definitely see that extra cash on the sidelines until after the elections pass. >> would you call this the election selloff, tim? >> i would call it not a whole lot to do here. pmi was very strong in the u.s. you give the fed enough ammunition to see fed speak, you have a fed meeting coming up. yeah, i think if we think about the potential pitfalls from markets, there are certainly many. we wanted to see leadership out of financials, we wanted to see leadership out of tech. we've largely gotten that. i still think this rotation we see is alive and well. if you're a consumer with discretionary stock and you're trading at a multiple well below

your five-year historic average. obviously williams sonoma and sher win williams, these were places people hid over the year and that's something people should think about as they look toward amazon tomorrow, and pri priceline, and other names, frankly. >> groupon revenues beat revenues coming in at $720 million versus expectations of $710 million. the earnings per share right in line at estimate of a loss of 1% per share. the stock is moving down and that could be because the company just announced they agreed to acquire living social, and they expect that deal to close by early november 2016. so just looking at details there, they say the acquisition consideration is not material, there's no details on spending with living social. they're coming just within a

hair expected in terms of ranges, but it could be that deal weighing on the shares now. kelly, back to you. >> yeah, those groupon shares down 4%, and they're acquiring a competitor. >> a competitor that was considered to be neck and neck with groupon in order of being able to compete in this area. maybe the stock was down. i don't know if it's on the results, but a lot of these secondary internet type commerce have been potential roller categories. i don't know if people are wondering, look, if they're a buyer, maybe they're not a seller. >> we're getting tesla headlines across the bottom of your screen which on an adjusted basis -- i almost want to just wait for phil to go through it, but it looks like 71 cents a share, adjusted basis again. it looks like 14 cents initially. in the meantime, going back, we still have groupon.

>> groupon at one point was a chicago darling, my hometown. obviously it went through a lot of challenges. the new management team has done a good job in stemming the bleeding and the stock has doubled off of its lows. that said, i think investors have a lot of questions about what is the long-term viability of the model and the spend that is required to teach customers with groupon. it's a very substantial type of business that doesn't breed long-term loyalty, and i think anyone in the stock now, and that's never really a great reason to be in the stock if you're a. i look at the valuation and it's not terribly expensive. i think it's interesting. groupon is not a name i need to run into tomorrow, but they continue to at least grow their

local revenue. that has been the objective of this family. they don't really trade at valuations that make any sense. this one actually does. >> what about apple today, just going back to the way it was traded. these headphones in the last couple minutes about how they're not going to be ready as scheduled. >> the company didn't really give you a lot of reason to try to up your sights on what they can do in the next few quarters. that's the basic bol littom lin here. also not a lot of talk about segueing into the iphone. which is great but it doesn't tell you more than yesterday. >> for apple it's execution risk, the fact they hadn't appropriately instituted demand. now that these air pods will not be available to ship -- by the way, there's no phone jack so i

don't know how that's working for them -- it just seems very out of character for a company that that's, that couldn't be a good sign for people. >> i think all we did was fast-forward some of the seasonable trade, and frankly, last week, or refresh, nobody expected the company to innovate. . it's really not the story for apple, so a company you want to see innovate? . >> all right. let's go to tesla. there's a bit of confusion. a number of people on wall street are going over these numbers to make sure they have

the correct apples to apples comparison because tesla is going to change the way they report its numbers, going from non-gap to gap. here's the numbers for investors to focus on that's comparable. this is a beat by the top and bottom line. tesla earning 71 cents a share on a non-gap basis. the estimate on the street was for a loss of 54 cents a share, so much better than expected. revenue, and we talked about this earlier, that the deliveries were much better than expected in the third quarter. revenues coming in at 2.9 billion. the expectation was for revenue of 1.977 billion. there you see the impact and the deliveries there, it's the cash and liquidity at the end of a third quarter and they've got a lot of cotton expenditures. so they only went down $100

million. and they're also maintaining. which means they would deliver and meet, at the expectation they set last year, at their guidan guidance, of delivering. >> the tesla shares up about 3.5 and 4, and they say wouldn't it be great to show a profit? they were clearly trying to do that and make those deliveries. it seems like they came through and the market is awarding it, at least on first blush. we have to see if the capital and consumption lease will stay for them, not only in terms of

the numbers we're seeing, but in terms of deliveries and forecast i think this is very possible for them in the short term. obviously there are a lot of long term concerns for solar city and a whole bunch of other things, but i think from a trader's standpoint this is good news. >> what tesla reporting a possible quarter? >> remember, that goes back to what they said earlier when eli musk sent out that email at the beginning of september saying, we need to do everything in our power to deliver as many vehicles as possible so we can post a positive quarter, because he knows they'll be putting out a lot of capital expenditure in the next several quarters at a minimum as they ramp up production of the model 3. they still have massive investments they're making and then you have solar on top of it. there are a lot of expenses coming down the road towards them and he knew the third quarter would be critical to say

to people to say, look, we can be cash flow positive, we can turn a profit for a quarter as we move to what's going to be a very critical period as they move toward the model 3 portion. >> tim, do you believe they'll be undone? >> the expectation of musk is on such a low delivery. the expectation of 500,000 cars by 2020, i think, is significant. they've got 2.6 billion to pay for solar city. there is a lot of cash burned. the expectations are a lot higher than what the delivery has been. i'm amazed the market continues to give him that credit. valuation with headline risk galore. it's really about their ability to deliver. and they're making projections which are out to 2025 on deliveries of the model 3 that, again, i just think you can call this valuation whatever you want to. i call it expensive.

>> and specifically, we should throw a pie in the face at the naysayers. still 25% short. we'll see how this hashes out tomorrow. >> see the flavor of pie. guys, thank you. appreciate you all joining us walking through some of these results. there's much more coming up on "fast money" next hour. ginni rometty will join the crew to discuss how it plans to monetize that technology. turn to earnings and find out how you should be trading in stocks right now. up next, oracle ceo mark hurd joins us live for an exclusive he interview here at the new york stock exchange. you're watching cnbc, first in business worldwide. ose new glas? they are. do i look smarter? yeah, a little. you're making money now, are you investing? well, i've been doing some research.

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buffalo wild wings is out with its earnings. let's go to aditi roy with its earnings. >> it was a miss on the revenue but a beat on the eps, revenues coming in at 494 million, missing expectations of 502 million, but those revenues are up 8.5% year over year.

the eps, by the way, 1.29 cents beating expectations by a penny. guidance is saying it will be a bit lower than the lower end of the full year guidance that street analysts had expected, from 565 to 585. also the company saying same-store sales at their company stores are down 1.8%. street expectations were down 1.3% so there is a miss there, but it's also a beat for a company same store sales at franchise locations. that number is also down 1.6%, but the analysts have predicted that number would be down 1.8%. the stock moving up at the moment, 3.48%. back to you, kelly. >> aditi, thank you. the cloud wars are alive and well among silicon tech giants. they took the stage and criticized amazon web services,

one of its biggest competitors in the cloud space, of course. the emergence of amazon has forced oracle to grow its cloud exposure, leaving a net sweep with a deadline of early next month. mark hurd, the ceo of oracle. welcome. >> thanks, kelly. >> where do things stand in the netflix deal? investors want a little bit more on price? >> it's done from our perspective. we had special boards, special committees of both boards negotiate the transaction. we think we've made a fair offer of $109 a share. the tender offer expires november 4, i believe. it's our best and final offer. >> and the earnings were just a little bit patchy. >> yeah. but i want to reiterate, it's our best and final offer. we'll abide by what the shareholders say. if the shareholders don't want to tend to their shares, we'll move on to other things. >> that's part of the strategy

to take on amazon, right? how much more do you guys have to do to compete at the scale of amazon? >> i would say differently, kelly. netflix is more a transportations company, so it really helps us on the sos part. >> softwares of service. >> exactly. there is applications, platforms and infrastructure. amazon smis more of an infrastructure sos player. the net sweep would be more of an applications play. >> i've seen charts when they lay out the biggest players in the crowd. it's amazon, it's google, it's ibm, it's microsoft. then i see oracle and everybody else. are you trying to change that or are you focused more tactically on the services you are offering? >> kelly, let me put it this way. we've booked more in the cloud, if you will, revenue than anybody else in the industry last year.

the cloud industry has probably grown 45, 50%. last quarter we clocked in at 80% plus. so our growth rate is pretty high, driven a lot by applications and by platforms. so we're really happy with our growth in the cloud. we think we can actually do yet better, and this announcement you referred to earlier that larry made in open world was really about rounding out our complete sweep of capabilities with infrastructure as well. >> microsoft has gotten with linkedin. >> i've got my own set of problems. >> would twitter be a good match for you guys? >> i'm sure you expect me to get into a big discussion, but no, we're not making a bid for twitter right now. >> let me put it more broadly, then. is there a place for social networks in your company?

>> i think for us, we're really focused on the enterprise. we're really b to b. we focus on our customer set, which is really not consumers, so the context for us of weaving together enterprise data, enterprise information, applications platform and infrastructure is where we're focused. the best predictor of our future behavior is really what you've seen from us the past couple years. i would argue while some of these announcements seem newsworthy, in many respects they are further advantage of the strategy we laid out several years ago. really, if you dial back to a decade ago, we were talking about cloud before it was called cloud. really, all of these announcements fit into the strategic framework which is really for us to offer a complete set of cloud offerings. >> with net suite being your best and final offer, what happens if that doesn't come through for whatever reason? is there a plan b? >> we're going to move on to

executing our strategy. listen, we'll abide by what the shareholders say. but again, we have so many things to do, such a great portfolio. it's an exciting time for us. this is a generational change in i.t. we're not going to see this come around again. our part of i.t., if you will, the enterprise side, is about a trillion-dollar industry. only about 40, 50 billion of that is yet so far in the cloud. there is a lot to come. >> i was just going to mention, mark benioff said the documents now show potential targets. are you concerned about cyber security just in your daily operations or as part of the enterprise move that you're describing? >> it's about as important to us as anything else we do. when you look from a security perspective, the way we patch our data, the way we secure data, the way we help our customers secure data, it is about as prevalent a subject as there is out there with customers today. >> i imagine you guys are doing

everything you can to make sure your emalils and presentations are the last ones leaked out there. thank you for joining us here. mark urhurd, ceo of oracle. they are losing another executive and scaling back on operations. google's fiber ceo is leaving the company as it announces hold financial claims in 18 cities. later, hedge if you understand manager julian robertson joins us with one of his most recent investing regrets. we'll be right back. which is s unless you're the class clown. the cloud app ecosystem got everyone excited about learning again, instead of my hilarious pranks and shenanigans. [ frog croaking ] and the new wireless infrastructure lets miss smarty pants access her data from anywhere. i might have to actually learn something this year.

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and what steps are we going to use to beat these obstacles before they really become a problem. [announcer] get 30 days free at quickbooks.com the stock is up 6% on 55 shares of volume. kelly, cheesecake factory came out with earnings of 70 cents a share. that beats estimates of 61 cents a share. $560 million and $556 million was the estimate. looking for an .8 of a cent gain. they said they outpaced the casual dining industry during the third quarter underscoring their position. we remain a destination of choice in a competitive landscape. they also say they're going to

continue to predict as many as eight company-owned restaurants opening in fiscal 2016. they opened three in october. they plan to open another three during the remainder of the fourth quarter, guys. back over to you, kelly. >> they have one of the biggest menus of any restaurant. it's like 15 pages. >> yeah. >> cheesecake factory shares about 7%. alphabet ceo resigning. josh? >> craig berig is stepping down. sources confirming that 1 310 people or 9% of staff are being let go. it includes los angeles and phoenix. google saying for most of our potential fiber cities, those who have been in exploratory discussions, we're going to pause our operations and offices

while we refine our approaches. the pause makes sense. building out superfast internet is a capital-intensive business, he says. more broadly, alphabet ceo ruth porat has been taking a harder look at the company's so-called other bets. under her watch there is greater scrutiny, dawson says, at the financial performance of these far-flung businesses. we know big changes have been made. nest, for example, suffered executive shakeups with co-founder tony fidel leaving the company. and they've reportedly put their robotics decision up for sale. tomorrow when alphabet looks for a jump of 38%. expect analysts to have some questions about recent changes to fiber which is responsible for much of that decision's revenue. kelly, back to you. >> there were reports of them, too, doing more of a wi-fi type

approach; is that right? >> every company that tries it has to learn how tough it is to do that and do it in an expensive way. to me it's instructive as people looked at apple and had these grand ideas of how easy it would be for apple to deploy cash in a productive way. google has a tremendous amount of cash, it just isn't easy to get an amount of return. you sometimes have to cut your bets. time now for our update with sue herrera. the iraqi military has said it recap toured two more villages from isis forces. it's been a struggle, though. retreated isis fighters destroyed buildings, hid explosives and set industrial fires as they departed. police in new york state are investigating possible pipe bombs in a jeep in buffalo. the man said he repossessed the vehicle on sunday. officials in nashville are looking into a fire at the world

famous opryland hotel. the fire started in a restaurant in the hotel complex but soon spread to insulation inside the roof. luckily, no one was hurt. residents of eastern siberia are wondering what on earth the bright green light they saw in the sky was last night. it resembled a comet or even a meteorite, space junk or even -- wait for it -- an extraterrestrial spaceship. i don't think so. but anyway. back to you. >> we'll let them try to solve it. i'll keep my eyes out tonight. thank you, sue. tesla is trading higher after reporting earnings earlier this hour. a conference call begins at 5:30 eastern time. some key numbers to listen for, later. much more of my exclusive interview with tiger management

founder julian robertson. stay tuned. we need to be ready for whatever weather may come our way.

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during storm season we want our customers to be ready and stay safe. learn how you can be prepared at pge.com/beprepared. together, we're building a better california. welcome back. earnings from texas instruments are out. dom has those numbers. dom? >> it's only down about a percent right now. i note that because earlier right after the results were out, we were down about 4% for

texas instruments, this after the company that makes a lot of semiconductors that go into everything from washing machines to military equipment post earnings per share of 94 cents. that beats the analyst estimate of 86 cents a share. revenue is also better, $86 billion. they also offer quarter earnings per share guidance. they see between 76 and 86 cents a share. they also note they're seeing an improved industrial market, strong automotive demand and about the personal electronics market that's pretty much flat with last year, so interesting moves here by texas instruments. back to you guys. >> thanks, dom. tesla shares up by more than 5% after the company's third quarter earnings. ben callow, financial analyst at

outer edge. great to have you guys with us. the profit? it seems to be much better than people were expecting, did the cash burn much worse? what's going on here? >> tom and bottom line margin all pretty good. i think the cap x was very good. it came below their initial projections for the year. there was a lot of worry about margins in the first quarter, people thinking lower priced cars would drag margin, thinking they were discounting. we would buy the stock now. >> we were one of the naysayers as they proved this quarter. beyond that, they made a miscomment that only 2% of consumers that have purchased their cars and participated in resale guarantees are asking for tesla to buy those cars back. i think contrary to some of the comments made earlier on your program, this proves the demand is very solid and that the risk

the bears have been talking about for several years on rvgs simply have not come to fruition, so we think it's a solid quarter on many counts. >> ben is carol roth, if you're looking at the potential risk factors, what's the biggest concern to you? is it solar city? is it the potential cash burn and cash outlay, especially in a potentially increasing interest rate environment? is it the deliveries? what is the one thing that should keep the investor up at night? >> i was one of the only analysts that crossed both solar city and tesla. one of the things that worried me was the project in buffalo. i was very surprised when they announced and tesla announced they were going to step in on that project and the stock didn't go up on that. my biggest concerns about the whole merger of the company.

we'll also see solar city's business model shift more to being cash flow positive throughout next year. you have people on your program that says, it's is coming in lower for tesla, and i think they'll see the city is actually going to add cash going into 2017. >> haven't we seen some far below expectations. there is at least a perception out there that the company wanted to pull a lot of levers, make sure this quarter looked really good. make. they're going into the most competitive city of the luxury market. it's the a-4 competition as they come in and out competing

against the series. it's really hard from our perspective to continue to be bearish on the auto business based on how this company is scaling. one other thing i'll mention, automotive revenue up 81% quarter over quarter, and operating expenses up 7% quarter over quarter. they're not just pulling back on r and d. if anything, they were accelerating production and turning units out. we think the leverage is there and that's what people are missing. >> ben callow and jamie al betterine. julian robertson will give us his idea on the sector and what his concerns are. you're watching cnbc, first in business worldwide.

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makes history selling at just over $30,000. and to think this one actually has a surround-sound stereo. the 2016 cla. lease the cla250 for $299 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. welcome back. billionaire hedge fund and legend tiger fund manager jewel wr julian robertson is here. i had the pleasure of sitting down with him earlier and asking him where he's investing now. >> talk about things at depressed levels. the biotech and the sale genes are just selling at very low multiples earnings now.

there is a great fear that mrs. clinton is going to put these people out of business. i don't think she's that stupid. i mean, the country is begging for the new discoveries which these biotech companies are uncovering. i do some work in cancer research, and the progress there is just mind-boggling. i think it's due to in large part these powerful biotech ideas and people and companies. >> are there any smaller names in the space who have promising prospects, as far as you're concerned? or are you looking at more of the larger ones whose valuabtios have sold off a bit? >> i'm looking at the ones whose valuations have sold off a bit. i think a lot of them have a lot of problems. >> and there's probably going to be more acquisition. if you look at even a gilliad, there is a lot of questions how

they backfill their pipeline and they just look for people who can help with that. >> gilliad, it's amazing they have not done more with their huge wads of cash. we were big holders of gilliad. frankly had given up on them because they hadn't put all this cash to work. we think there are a lot of really good acquisitions available and they should be taking advantage of this particular situation now that exists in the biotech area. >> that point raises the company in a totally different sector, but i just wonder if you have a view whether apple should be doing much more with its enormous cash pile to buy companies like netflix, maybe, that you sold out of, or there's that speculation maybe they had talks with time warner prior to the at&t-time warner deal. from that point of view, do you think they need to be more aggressive? >> i'm going to refrain from

criticizing apple too much. that's been a pretty great company. i feel like in the long pull -- i'm not in it now, but i think in the long pull it is a great company, and i've got a lot of respect for them. i've got less respect for our politicians. for instance, who are not worried or apparently don't even consider the fact that apple and a lot of the other good technology companies are going to create an automatic car. think of the jobs that's going to cause to be gone. >> so you're opposed to that, or do you think people should be putting the brakes on that movement? >> no, i think we should be preparing now for what we're going to do with the people that are thrown out of work by automatic cars and these kinds of things. >> you don't think it's a problem that will take care of itself over the long run? >> everything will take care of itself in the long run if you just let it go, but we're not

willing to do that, and i think here it would be good to be thinking about where the unemployed can go. >> let's go back to netflix for a second, which you guys sold out of. was it entirely or just in large part before -- they have this great quarter, subscriber numbers start picking up. still, how much more growth can there be in that business, and do you have any regrets about selling out? >> i have always regrets about selling anything of reed hastings because he's a really good manager and a great capitalist, and i regret not being in it. i think that the growth in that business is going to be terrific. >> so why was the reason, then, of getting out of the stock? >> you know, it's not the world's cheapest stock. it really isn't. anyway, we removed ourselves. >> the full julian robertson interview will be on cnbc pro tomorrow.

he cracks me up. he's such a great guy. >> very gentle criticism. it's not the world's cheapest stock and we've removed ourselves. >> exactly. >> the value discipline is there. he gravitates to stuff that looks like it's cheap. >> and a lot of interesting things to say, certainly, about politicians vis-a-vis whether it be regulation or biotech. it's interesting, though, i'm not sure given the slate of politicians we may have upcoming how you bet on any of the politicians and where they're going to land, particularly on something like biotech. >> in the last hour he mentioned how he likes air canada. i said you might be able to make an argument for them. he wasn't into it. >> if he's concerned about automatic cars putting hundreds or thou of thousands of people out of work, he's probably not willing

to do that. the bank seeks capital and investor sentiment. will doling out. >> ginni rometty, ibm ceo, 5:30 tonight. don't miss that. now that fedex has helped us simplify our e-commerce, we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are.

well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small business simplify e-commerce.

you. welcome back. when deutsche bank holds its earnings call tomorrow, it will be the first since reports last month that the doj is seeking a possible $14 billion settlement for the mortgage-backed securities. dom chu has a review on the results and more on what's happening at the german bank. >> we begin tomorrow. what the numbers come out,

kelly, analysts on average, get this out of the way, looking for a post euro denominated earnings of 27 cents on revenues of $7.2 billion euros. but probably safe to say the numbers are a small sliver of the overall story for germany's biggest bank. lost already 40% of their value this year. that's amidst a macro, bigger picture backdrop that includes the negative interest rate environment, slower economic growth all around the world. so here are some of the things that investors will be looking for, and listening to this time around. first of all, has deutsche been able to turn things around and show profit in revenue stabilization, all we're looking for. we have seen a lot of big u.s. banks show real signs of life in things like bond trading, interest rates and currency trading, that sort of thing. also like you said the settlement with authorities over its mortgage-backed securities sales practices. as of the end of june, the bank

reserved $5.5 billion euros in litigation reserves. that's how the number is going to change, whether or not they're making handicapping a bigger number this time around. the justice department looking for the $14 billion number. though not many experts really think it will end up being this high. also, expect to see mention from the bank's compensation plans, how it plans to keep talent. remember, they pay a lot with stocks. shares up around 30% from the levels in late september. those record lows. so kelly, the stock has been up very short-term. we'll see if it continues given tomorrow's results. >> thank you, dominic. what do you think about deutsche? >> you know, the market value of the company is such a tiny percentage of the economic entity, under $20 billion, basically. and you have, you know, however many trillions of euros in play in terms of the risk on the balance sheet. to me, it's directionally. are rates looking like they might slightly go higher in are you going to have relief and resolution on the settlement. the results are secondary.

>> i don't think it's about the income statement. i think it's all about the balance sheet. when you have an entity trading at about 25% of book value, that's saying that investors fundamentally do not believe that the balance sheet is accurately reflecting the assets and the liabilities. there is something else to come down the pike there. i think that's a big enough red flag that if you're interested in this sector, you can find a better place to put your money. >> and oddly, the european financials have done well as of late, including the rally off the extremely lows. we will see if it catalyzes one way or another. the public outcry has seemingly won. defense secretary ashton carter has put the brakes on pentagon clawbacks. next, his plan to solve the military mess. the greatest population shift in human history is happening before our eyes. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications

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welcome back. and now to an update on a story we first brought on monday. defense secretary ashton carter halted the clawback process. in a statement today, carter said he was suspending all efforts to collect reimbursements, setting a fair reimbursement process and that

process will replace, quote as little burden on soldiers. he also called for a july 1st deadline for all cases. so once this became real, subject of national attention, he has moved quickly to do something about it. >> obviously, just kind of a bureaucratic issue. once you saw the outrage and questioned exactly the ambiguity -- >> i'm surprised why this was part of the process, the clawbacks. >> all i know is that freedom isn't free and these are the people who put their lives on the line so that we can live in this country as free people. and to even think about going back to the -- it just shows we're not treating our active duty military and veterans in the appropriate way. let's start clawing back the money from congress, from their pensions, for not fulfilling their obligations. i think we can find a lot of cash to cover these obligations. >> and tens of millions of dollars in some people so i wonder if that will be returned

and hopefully something changes. >> yesterday the question was were they going to try to figure out who was entitled and who wasn't. >> exactly. at this point, you know. let's recap earnings. big movers already. tesla's conference call at 5:30 p.m. eastern time. and then we had some results as you can see from groupon, cheesecake factory and wild wings. >> cheesecake and buffalo two casual restaurant chains that did decline with the rest of the group. buffalo trading near lows. a little bit of relief, at least -- >> but don't get too ahead of yourself in the sector. those are two very special situations. the fact is, if you look at last month's comp. store sales, they were down. and that was amongst price increases. so traffic was definitely down. i think you have to look at post election if the consumer is really going to bounce back or not. and don't be fooled by two really strong performers for

separate reasons. >> we should have had the cheesecake here onset so we could wish mike a happy anniversary. >> one year at cnbc. went fast. >> we hope for many more. >> happy anniversary. >> the kenny and michael show. >> we'll work on it. >> maybe get you an action figure, too, if you're really lucky. only carol gets one. "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. traders are pete najarian, steve rasa, karen finerman and guy adami. $160 million in assets, a market collapse coming. he'll explain why he is so nervous and where you can run for cover. ibm shares up more than 10% this year and ceo ginny row metty here with why even better days could be ahead. later, nearly $1 trillion in the market at stake tomorrow and google andma