mahon is here to talk about the strategy now as administrator of the sva. we begin with simmering tensions. we have the latest on the situation on north korea today. >> reporter: the white house

the secretary today choosing, perhaps, deliberately to be vague about what the options might be from herement here's what he had to said. >> he holds his cards close to the vest and he's not going to telegraph how he'll respond to any military or other situation going forward. i don't think that you're going to see the president drawing red lines in the sand, but i think this the action taken in syria shows when appropriate, this president takes decisive action. over the weekend, the president sort of linked global finance to this north korea situation in terms of china's role and whether or not he would label china a currency manipulator, promised to do on dap one, but has not done. the president tweeted out, request would i call china a currency manipulator when they are working with us on the north korean problem. we'll see what happens. the press secretary said from here that they are closely

monitoring the north korean situation and not taking anything off the table, so little of strategic vagueness from the white house about what they do and when they might do it, but that situation with pyongyang over the weekend rolling out military hardware getting people's attention here at the white house today. thank you. for more on this, bringing in retired army colonel jack jacobs and former secretary under clinton, william cohen, now chairman of the cohen group. welcome both. colonel, as referenced, i guess the fact they had, you know, more than one of these missiles on display at the parade made people nervous about what exactly north korea is capable of at this point. what do you think of what we saw and what the u.s. has been saying in response? >> we talked a great deal about the fact that soon north korea can range the west coast of the united states withoa missiles. if we wait longer than putting a

nuclear weapon on top of it, but we have to remember they can already range southready range japan, and other places in the western pacific, and this concerns us greatly, one reason why we're trying very hard to get china, alongside us, at multiparty talks with the north koreans, but we're not going to do that, i don't think, unl north korea agrees in public or behindc closed doors, not to gie up its nuclear program, but to suspend its development until after wes had a chance to talk. we're getting closer and close to a real crisis, and that's base for decades, we've ignored the problem. >> mr. secretary cohen, you were on "morning joe" this morning and felt like a single korean peninsula, of course, would be ideal, than you think that the chinese would welcome that. do you really -- on second thought much that, do you think the chinese would welcome a

unified korea that's clearly an ali to the united states rather than having a communism foothold on the peninsula as they now have in north korea? >> i would say as compared to having a war break out on the korean peninsula opposed to nuclear weapons used is an attractive alternative. i'm not suggesting it's taking place tomorrow, but i would think it would be in china's long term interest to have a w unified korea that's demilitarized as such on both sides inun terms of the united states having a presence in the north i koreans having a nuclea capability. >> right. . it possible? i think it's possible. not in the near term, but long term works to china's interest. south korea is their trading partner, not north korea. >> all right. following just a second, do you think that the chinese have been dragging their feet when itn comes to negotiations with north korea to get them to tone it down? >> yes.

>> why? >> they do it because they don't want to see unified korea with a military presence on their border. >> there you are. >> something to be resolved and something you can work out if the chinese are willing to put the kind of pressure that needs to be put on the north koreans. >> colonel, do you agree with that? is that a viable outcome here in. >> i think it is over the long term, but we have to i remember that the north korean government is a continuing criminal enterprise. the thing they are -- they fear the most ishe not being in powe. china is very much concerned with destabilization of the korean peninsula. that comes with the nort korean government's falling to pieces under pressure from 'sanybody. it's a very difficult situation. first step is not a unified korean peninsula. rid nuclear weapons, and that may be in the offing only if we convince north korea to come to the table. >> i agree with that entirely,

colonel, you are precisely right. a long term goal might be a unified peninsula, but in the short term, that's not going ton happen. i think what you'veot said is tt the north korean reyeem is a criminal enterprise. they are extortionists and saying, feed me, fuel me, employ me before i test again or kill again. and that has reached the point where this administration has said we'redm not going to play that game anymore. so we'reym asking china to real have an impact in terms of what food, fuel, and supplies they provide north korea. regime needs to change course or we'll help. that's the message that has got to be for them. >> william, why wouldn't the chinese be more attracted to a solution in effect they annex north korea like hong kong or other properties? >> well, they may see that as a

long term interest. on the other hand, they don't want conflict. we don't want conflict. what i'm saying is i think this is reaching a point where we may, whether by design or by neglect or accident miscalculation, we get into a war on the korean peninsula affecting japan, china, as well as south korea and us. >> gentlemen, thank you. colonel jack jacobs, thank you, secretary cohen, thank you for joining us today as well. appreciate coinit. news alert on treasure secretary. ylan, what's going on? >> bill, drtreasury secretary acknowledged for the first time tax reform would not get done by august. this came with app b interview with the "financial times" and said as recently a month ago he was committed to the august timeline. now he's telling us the financial times that that time line is,ha quote, highly aggressive to not realistic at this appointment andea acknowledged that the health care debate may have delayed the

tax reform potential as well, but insisted on legislation in 2017. bring you more as we have it. >> thankyou. if the market doesn't listen -- >> factored in you think? let's ask art. >> good idea. with us, michael black, steve grasso at post nine, both of them, and rick santelli from chicago at the cme there. steve, what do you think? >> the w way the market does ha in there to kelly's point that the market is factored into that already. we heard the timeline was pushed back. president trump said, you know, let'su do health care first before tax poly resorms and corporate and personal and all at once and it's going to be a great plan. the truth is, i think you're still seeing rotation out of bonds and equities, distraction of north e korea, syria, other

geopolitical events helped, not hurt market apartments, at least by more time for the president to get initiatives done. >> yeah. >> the froout truth is we had e years, guys, take eight months to get the right policy. moving in the right direction. >> markets peaked down at march 1. it's the end of the april. changing tunes entirely, and bonds with inflows because people think there's nowi chang afoot. what's this market rally today says to you and what's the nex phase look like? >> well, the rally today, kelly, tells me things are getting a little overdone to the downside. the s&p 500 fieutures were 3% o the highs on march 1st as pointed out. bank stocks, 12% from the highs. i'm the guy here who said i think bank stocks are due for a letdown weeks ago. they had the let down, and saying that, they are ready to go. bondso rallied nice lay becaus

everyone was short bonds or thought the w yield curve would steepen. it's flattened with growth expectations and these policy expectations kind of getting dialled back andti pushed out. >> mike -- >> i was going to m say, we hava new rule. every time you pat yourself on a back for a good call, add a bad one you made or two. >> i didn't trade energy well. how's that? >> thank you. >> that works so far. rich, speaking of the bond rally, have you guys identified a level for the ten year or two year you think we'd hit in the near term h here? >> you know, i look at if from a different perspective. much of the talk on the trading floors by those who found the level rereached 227 significant, they are not saying so much looking at where the market may stop. it's more of a vantage point we may have lock up the high yield close for the year. meaning, mid march we settled at 263, high yield close. the fact of the matter is as we continue to drift, that seems to be more and more kind of painted

and permanent markereded at this point. we could go down to 187, 2%, 212, 215, but i think it's still more of a let's keep any -- creeping back upward, 225, see how the market responds when it retests the breakout period of 225 to 227. i think if we continue to see softer yields, it's in a very slow and methodic and congestive patte pattern. will that, if occurs, have a negative or detrimental effect? today, not so much, today could beod reversal of the odds we ha in front of the three-day weekend on all issues discussed so far. >> great point steve. i was going to ask that. if the ten year peaked, equities have too. late, 've been pessimistic on the market, i believe there's pullbackti in t s&p.

i still stand with that reasoning. gdp that probably everyone naught was going to be doubled. we were going to see a 3% gdp, backing up, and to rick's point, more flattening in the yield curve, growth sort of, you know, out of the bubble a little bit, and we already balanced in a lot of projected growth. see where the chips lie. i think it's time to be patient, maybe lighten up. >> all upright. very good, guys, always good to see you. appreciate your thoughts on today's market action. we have 45 minutes to go. the dow's up 128 points. really after a tour close into the weekend. transports higher. the volatility gauge is down a point with everything else happening in the world today, that's strange. the s&p up 14. nasdaq up 34. russell up 17. >> here's the earnings now. netflix andno united airlines reporting after the close tonight. breaking down with the team of analysts with the seconds taped

and preview of what to expect coming up as well. up next, noted value investor on why he thinks alphabet is a solid value play trading at 850 a share range now. you're watching cnbc first in business worldwide. siness world. at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

rally continues, dow up 134 points and shares of boeing higher after reports the company plans to layoff hundreds of engineers as commercial airplanes unit in washington state and other locations. new round of cuts begin june 23rd, and the company is trying to reduce costs to match employment levels to market requirements. the stock up 1 and 5/8 right now. as the market gets more exceptive, finding value is difficult. he explains in today's "spark value edition." i think the interesting thing where the u.s. market

presently is their -- i think that they are either fully priced or overpriced. of course, if you see sustained period of low interest rates, they are good prices, but not only that, in the market, it's interesting. it's not like 2000. we have very high valuations for facebo facebook, amazon, and netflix and so on. the difference of 2017 and 2000 is these are real businesses. these are real businesses with real cash flows and they will be with us for a long time. the question is where they fairly valued? that's hard to tell. my answer is something you -- google has nod participated to the same degree, even looking at the year to date growth in caps,

google is an unusual company. >> you're been in it for a few years. >> two, three years, but google is a company that can innovate outside of its adjacenadjacents. few spaces that can innovate they are not in. this is a company working on these, you know, lenses that detect your, you know, blood sugar levels automatically or self-driving cars, flying caring, all these things. they are able to innovate in completely, you know, unconnected areas. elon is a guy like that, but different companies. >> interested you think that's a good thing and not one of the things where they have a business. they have a mote. they are sticking to the knitting. that's often what you hear from more of the value plays. >> i think in many ways, google is the ultimate business. what they do, they made side

bets, i think that's their term, other bets, the other bets are all around cash flows, especially when we have the new cfo on board, so they are spending in the tens and hundreds of billions, on these other bets, but the mothership is producing billions. tens of billions a year. the other bets are not really going to move the needle in a negative way. i think google is the kind of company which is very up usual compared to the range of -- i think only the other company that is similar to google, i would say, is amazon. and i think that -- >> so many of their bets turned into amazing new -- >> i think jeff bezos probably is one of the top five business leaders. >> wow. >> thee best of the best. >> wow. >> so i'm huge fan of amazon, i wish i was a shareholder.

>> but you can't get in, i imagine. what is the worst mistake you made? >> a lot, but biggest mistakes tended to be where i ignored the leverage on the balance sheets, and they have come to bite me. we had we have investment in mortgage companies in 2008. that's a financial, went to zero. we had investment in a zinc manufacturer last year, with balancing issues, bankruptcy, went to zero. bought the investment rate different. common theme was they bought at concerns, and so, i have gotten more reenforced in my head that -- >> stay away. >> look for the alphabets of the world with just cash without debt. >> we'll have more from him in the next hour. getting his take on gm and autos including david einhorn's idea

to split it. skip ahead and watch it now on cnbc.com/pro. >> wrapping my head around the hundreds of billions of dollars pept is a rounding error. >> for google. >> or alphabet. >> the point on jeff bezos, top five business leaders of the last century. i don't know that anybody argues that point. >> no argument here. a lot of people don't want to buy the stock because they think it's too expensive. >> he is not buying tesla either. >> there you are. interesting market day. even though secretary said a short time ago they are pushing back the timetable for tax reform out of washington, markets are holding on to their gains now. the industrial average up 150 points. we were just off the highs here, and yields on the ten year treasury are backing up a bit, highs of the session there, it.2% now. >> watch that as we go into the close. up next, why shares of drug companies eli lily and insider take a hit on wall street today. coming up, first cnbc interview with linda mcmahon,

new head of the small business administration who helped build a million dollars in real estate. she's going to modernize the agency coming up. agency coming .

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it's your trade. ♪ ♪ e*trade. ♪ ♪ start trading today at etrade.com hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. shares of eli lilly and incyte downgraded today, cut to neutral at piper jaffrey.

fda rejected their new daily pill to treat rheumatoid arthritis citing more clinical data needed to determine appropriate doses. lilly reaffirming full year guidance, though, and potential impact of the decision on its bottom line. look at that. it's eli lilly down 4%. giant company, of course rs and incyte down more than 10% in the trade. >> might have thought the hit was bigger. this happened friday when markets were closed as others mentioned. the drug was proved in europe, but not here, though. a rally. we had rallies in the last few weeks, couple days, but they faded into the afternoon. that's not happening today. we're at the highs of the session right now. the industrial average up 158 points. increase of more than three quarters a percent. >> it's the weather. >> i don't know. expectation for earnings. as we established, when you get treasury secretary saying the

timetable for tax reform is now being pushed back again -- >> taking that in stride. >> any other day, that would have sent the market down. that's not happening today, though. >> no. okay. when we return, former wwe ceo turned small business administration chief, linda mcmahon, speaking in her first interview since then and hshe plans to pump new life into the sba. sba. what if we could bring you better value by having better values? at blue apron, we work directly with more than a hundred family farms.

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dow down 167 points this afternoon. heading into the close, but building on gains, n., that e we had throughout the session today. 46 points, increases eight tenths percent for the averages, and s&p up, and russell, a little bit higher than that yet at 12 points, and small cap making up for losses today. bill? >> 30 minutes left in the trading session, dow up 168 points now. with me on the floor is kenny from o'neil security. review. last i checked, we still have tensions going with north korea, and secretary -- i don't know if you saw, the treasury secretary said the timetable for tax reform has been pushed back further, and we're still at the

highs of the day. >> right. i think today's move is a relief that actually nothing really happened over the weekend. right? >> okay. >> trump didn't respond because of the failure of the launch, although he tested china and u.s. with the intent to launch, it failed immediately. no reaction. i think most of the rally is just that. i think once people, look, we're hitting our head on resistance in the s&p at 50-day moving averages, just in the head there, and it feels like,exhauso earnings season. >> what impact does that have? does that take precedence over geopolitical issues? >> it should. it will try. the more nervous as you get, if it calms down over in korea or china, back the earnings, but if they area and kim jung-uh talks about threatening, that takes focus. until it happens, i think investors will focus, and they

want to know what the companies say going forward. >> i said when i talk to kenny, i mimic him swatting flies as we talk. kelly? >> let's get to sue for the news update. u.s. troops positioned in mosul to support iraqi forces as they try to defeat isis. they fire 100 rounds a day into western mosul. >> mission here is to provide artillery surface to surface. we provide a variety of ammunitions to accomplished shared goal. more traffic trouble in atlanta. look at that. all lanes of an atlanta highway have been blocked after the road buckled due to an underground gas leak. the georgia department of transportation said crews are working to assess damage there. a clean sweep for kenya in the

boston marathon. he won the men's event in two hours and nine minutes pulling away from the american late in the race. edna won the women's event in two hours and 21 minutes in her first marathon. american jordan finished third. congratulations to them all. that is the news update this hour. back downtown to you guys. >> quick congrats to cnbc, 28 years today. >> 28 years. >> that's your anniversary. >> yes. >> you, i think, are the last on air personality who was there that day. >> i think i am, yeah. >> scott was around back then, but he's semiretired now. >> yeah. he and -- >> when did you come along? >> 1991. i'm a new one. >> you're a new one, that's right. >> yes. congratulations, well done. >> thank you, appreciate that. it's a great company and wonderful journey, right? for all of us. >> exactly. sure has been. >> to another 28. >> small business optimism soared on donald trump's

election, but the index declining. >> joining us now in a first on cnbc sfwer view with more on the white house strategy as it pertains to small business is linda mcmahon, administrator now of the sba. belated congratulations, linda, welcome back, good to see you. >> thank you very much, good to be back. >> what will be your agenda pertaining to small business? what will we see you do to help out small business owners in the country? >> well, joining the sba 60 days ago, i have been jumping in, drinking from the fire hose a bit, but i believe my experience as a ceo from growing the small business to taking the company public and having some global brand gives me specific insights into helping small business owners, those who are trying to start a business, those trying to grow and scale their businesses. those who try to create product

by export. so i'm very excited about what we can do at sba to continue to start businesses. you know, we've had a decline in business startups over the last few years, and i'm starting to see a little bit of change in that direction, so we want to be able to support those entrepreneurs for their access to capital, with counselling, and getting more government contracts, so at sba, that's the focus to help them through rebilling businesses and homes if they suffered, you know, a disaster in particular areas. that falls under sba. >> is there direct experience from wwe, linda, you bring to bear working on the sba, or, you know, i mean -- i'm not saying you're going to have story lines and personalities, but, you know, this is not wrestling in the ring, but interested what it's like transitioning from that experience into this one. >> well, i think it's really the background that i had at wwe

when my husband and i were starting, progressing entertainment. we experienced how difficult it was to get access to capital. when you don't have brick and mortar to get loans against, you're dependent on cash flow and management. that's the flow of startups today. understanding that, venturining that and growing a company that became a global brand gives you particular expertise in management, in how to, then, guide and navigate through the capital access landscape, taking the company public was a very different thing, but i think small businesses today really strive for, you know, going through the steps. we'd like to help them -- i'd like to help them live the american dream which i was fortunate to be able to do. >> regarding the access to capital, curious your thoughts on this. the most recent small business

optimism index showed that few small businesses were having trouble actually getting access to loans, about 4% saying needs not satisfied. a much larger number said they artery were -- their capital needs were met or did not want to borrow money at this time. does the average small business in the country have a loan problem or not? >> well, what we're seeing is more and more lenders that come in to the sba program, and sba, of course, as you know, does not grant loans, but we guarantee loans from banks, and so that really has given imptous, you know, to loan to small business, and i do think it is a change in the attitude of the country. there is more optimism for businesses to start up businesses, and they are looking for capital, some are looking for capital to grow, one of the 504 programs for sba really is plant property and equipment

lending so there's more of that as well. it's a good message, a good time, but we need to continue with our couping. our networking for our businesses, especially in the women's business programs. >> one of the issues that does come up in the surveys is the broad problem of deregulation or problem of regulation and hope for deregulation. you're in a curious spot because you represent the federal government's involvement in the private sector. how can you work to, you know, address that concern? >> well, i think it's really important as we hear from more and more of our small businesses to make our business leaders aware of the regulatory environment, not that they are not aware, but that they are hearing more. you know, a small business owner is not only the ceo, but the janitor and the bookkeeper, and every other thing. when you get really rings of paper regulations that you have to comply with and you don't have time or expertise to do is, and you don't have the money to hire someone, so the regulatory environment really can be

stifling to small businesses that are trying to start up, and all they say is regulate things that need to be regulated, but let's stop with the volumes of regulations that we have to comply with. >> can you identify yet any regulations that stand out as something you'd like to see congress get rid of? >> no. because we are now having feedback from the small businesses to actually identify what the regulations are. we are, clearly, listening to what they have to say. i think they are very happy lending environment is looszenning for sure and regular tear environment are hopeful is going to be lessened on -- and the thing i hear the most is paperwork. the volume of paperwork, regardless of what the regulation is, it is just the volumes and burden of having to comply with so much at a time. >> all right. lip da, thank you for joining us. >> thank you, room. >> thank you so much.

i look forward to coming back. >> we'll keep the dialogue going. looking forward to it, thank you. >> we continue so see buying on wall street, dow up 167 points, high for the session here seeing migration into stocks and out of bonds. yield on the ten year 2.25%. amazon well known for the shipping boxes, but it soon may be known for big abortion stores via a big time acquisition bantied about. that's symptoming up. netflix earnings come out today. bull and bear on the streaming service in the portfolio. stay with us. stay with us.

rally on the hands now, good one -- all hands on deck, but energy is pulling back to the energy stocks as the price of energy and oil pulls back as well today, but, stim, a pretty impressive rally today, and i guess more clarification on what secretary mnuchin said? >> well, flipping arpds now, industrials and discretionary, but making a move. saying there's other ways to raise a trillion dollars than

the board tax. a lot of cross currents here. let's get more on the sector. retail rivals, walmart and amazon, eyeing acquisitions to the businesses, and we are back at aide headquarters with a lot of moving parts in the beat today. >> so many like always. another busy day, kelly. acquiring smaller companies is a route to scoop up growth. walmart is in the final stages of acquiring men's clothing brand that would be the fourth acquisition in as many months for walmart e-commerce market after moose jaw and others, each for $75 million or less. finish walmart has no comment. just for trying on, the right fit is the hallmark. based on what i know previously, goal is to capture consumers and e-kmert talent and expertise that walmart does not have.

they are beefing up the portfolio, 95% of the sales still in store. the new york post reports citing a star that amazon, quote, recently discussed evaluating wholesale as acquisition target. b.j.'s is a club like wam mart, sam's club, or costco. 210 locations in 15 family east coast states owned by private equi equity. the new york post said owners are a strapping ipo looking for buyers. if am sovn buys it, it's likely a multibillion dollar deal. amazon spent $103 million on acquisitions last year. that's the lowest deal spent for amazon in just five years. it's physical products before, but this would be the first try physical retail acquisition, if, indeed, it were to come to fruition. bill, kelly? >> that's the question. i can't recall a big brick acquisition made. let's review. walmart is getting deeper into

online while it appears that if this is try, amazon is headed to brick and mori rar r tar. they are going to murder, if the you know what i'm -- converge. >> there is some perfect level of store and online, but nobody knows what it is yet, so right now, walmart is heavily instore. less so online and online growth as ammon is at heavy, heavy online seller responsible for maybe like 40% of all sales made online, but then they may feel the need to have physical stores at some point. we'll hit the e quill lib yum, maybe not another five, ten, many more years, but that's what everybody's trying to figure out. >> i was just looking at walmart's market cap over $200 billion. that's an interesting merger, by the way -- >> convergence, not merging, but, yeah. >> not seeing public markets available as exit for the offering and it saying, you know, kind of elbow amazon, hey,

take a look? >> it's interesting. they were publicly traded back in 2011, taken private, and so now the private ceo tir owners look for the next leg forward. looks like they look to the markets saying, hey, that's not the answer, but we have to seek is a buyer. amazon has deep pockets, $20 billion in cash, as of the most recent fiscal year. they could do it. it's do they want to do it, and is it for the space, distribution centers, or amazon stores? that's two different beats. >> very, very interesting. all right. thank you. good stuff. see you later. a good rally. >> we do. dow's up 180 points at session hig highs. could have been the treasury secretary's comments, other ways to raise a trillion dollars, he said. who knows. the market up nicely, though, gains of nine tenths percent, 1% high forget russell.

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rally continues on wall street, dow up 190 points, a few moments ago, you heard the floor say about 20 minutes ago some of that may be attributed to the fact we did not see an escalation of tensions with north korea over the weekend as had been feared, and then we got comments from secretary mnuchin at the financial times. >> right. he also said, perhaps, most interestingly tax does not look to be done by august, but he alaska said there are other ways to come up with a trillion dollars referring to the border adjustment tax. we are seeing the retailers look a little bit. there's xrt, you can see nicely that ramp up just in the last hour or so since the comments came out. eight tenths percent pushing market towards new high. >> waiting for earnings, airlines higher. susan lee has the numbers that analysts are looking for.

susan? >> remember, this is the quarter before last week's passenger incident, so the main number that is airlines is a revenue figure. how much are you making on every seat for every mile flown. united's case, expected to be better than the industry, better than the rest. in the positive for the quarter, given the pr stamp from the forcible removal last week guidance will be key. future earnings, and in this case, transpacific, more important than transatlantic with boycotts in china, guys? >> all right. thank you, susan. looking at the -- i guess, the back to the thank you, susan, very much. see you lirt. want united airlines numbers there. a key find in the statement, by steve mnuchin to the financial times, key sticking points in tax reform is a borpd eborder adjustment plan, tax imports and

exports, problem for retailers recently, obviously. >> realize it's a problem that it's holding it up, perhaps they get rid of it. as dan said for months now, there's other ways to raise a trillion dollars including repatriation and if it happens, you'll see a lot of deals, you know, buybacks, that sort of thing. >> meantime, netflix said to report earnings after the bell tonight. the company has been prone to lurches up and down about after every earnings report. joining us to tackle netflix in the market debate is martin from sbr capital markets, the bear, and sfra research is our bull. it's not bearish, but you don't want to buy it? why? >> well, look, i think netflix is a great business, but that's not a formula for buying every stock at every price. for netflix, it's a company with great growth, but that growth is decelerating.

they are largely saturating the u.s. and other countries. their ability to drive pricing is less going forward than what was talked to, and i think that that's a dangerous place to sit for a company at trading 60 times and 100 pe. additionally, alternatives are better. i think that's hard for netflix to increase margins, cable companies, and -- >> okay. >> i think it's a formula, you don't need to own the stock here, look for the places, and after, you know, very good outperformance, you know, this year and over the past couple years, you know, i don't think you need to take it right here. >> why do you think netflix is a buy here? >> sure. so i think, actually, the bull case, first off, getting harder and harder to make on valuation. having said that, i think, you know, a number of things herement first of all, it's a story for net flick that remains in tact.

the global broadband penetration, which is very low, and secondly, we are very confident by the strong coalition between content spending and subscriber growth. much made about the strong correlation between the metrics as long as we sustain that, that's comfortable. there's the u.s., concerns about, you know, maturation of the market. saw last quarter somehow disproved, and we're just starting to get the benefit of some of the cable integrations, for example, with comcast platfo platform, seeing potential outside there and more cables down the road should help too. you know, lastly, it's understood. >> true. >> this overtakes the u.s. >> just like the fast and furious movie.

more business overseas than in the u.s. >> absolutely. interesting there's a cautious bear and nervous bull on netflix. thank you, guys. see you later. martin and tuna joining us today. back with the closing count doub and dow up 181 points now. >> after the bell, seinfeld out of ceo of looking at the hedge fund behind the ousting and other moves in recent months. you're watching cnbc, first in business worldwide. siness world.

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last minute of trade here, good rally. looking at the dow, this is impressive laically n. last few weeks, whenever there was a rally of sorts, it faded into the afternoon. that's not happening today. here's the highs of the session. the ten year, bob pasani, near the highs as well today. they were at 225% now, selling bonds to buy stocks, and vix, look, coming off the highest level of 2017 with a deline of 8% today. >> two things, buying protection last week, three day holiday happens, nothing happens, and so i think they are taking off some of the protection today, number two, and even though the economic data was not good, we've been oversold recently. that was a factor. we had a little bit of a late day rally. steve mnuchin made comments with the take away, don't worry so

much about definites. if we get significant growth, that overcomes everything. what's that they said in the 80s. growth that matters. >> bob, thank you very much. impressive rally as we prepare for earnings. united airlines and netflix and one investor says gm should get rid of the dividend coming up on "closing bell" with kelly evans. see you tomorrow, kelly. thank, bill, welcome to the closing bell. i'm kelly evans. dow up 184 points on the bell, 2 20637 there is the level. remember we topped out for all the averages, more comments from secretary that cricketed to that, and s&p up, and nasdaq up nine tenths a percent, 5856,

russell at 1361. yield, dollar, movers here. earnings season in high gear, though, starting right now. julia is standing by covering netflix's results this hour. susan lee with the earnings from united. thank you, guys, both. see you in a moment here. first, as i mentioned, let's get more from washington on these comments from treasury secretary that certainly retail stocks, everybody up a little bit into the close there. what did he was to say? >> well, treasury secretary acknowledged for the first time today that tax reform is not going to be happening by august. he made the statement to the financial times, it's afternoon about face saying less than a month ago doubling down on the deadline at an event, and he said august is a highly aggressive to not realistic at this point, blaming the health care debate for delaying tax reform. still, he told the ft he expects tax reform to happen sometime this year. on border adjustment, he said

the administration did not rule it out, but there's many ray ways to raise a billion dollars. he'll speak at the imf meetings later this week seeing if he'll clarify the replamarks. >> thank you. to talk more about this is paul and you are taller than i thought, but -- >> sorry about that. >> we have a lot to get to. welcome, everybody. what do you think about the rally today? especially, you know, data was soft coming into this, friday, retail sales, cpi, and the china stuff, what do you think of it all? >> markets got oversold here. tech sector is down, and so we are oversold on the market here. weaker economic data pushes out the fed a little bit more, and, you know, i think the markets were headed into earnings season, seeing consolidation of the rally, saw in february, and, you know, it's a pattern seen

throughout the last year and a half, stair step pattern, leg higher, followed by consolidation phase. >> what will you watching now? it's a peculiar way it happens. by the way, energy now participating, oil down, exxon sitting out the rally. do you buy the idea retailers are listed and there's not a border adjustment tax, tax reform at some point? >> i'm really optimistic to get it done, and i like the energy sector primarily because it is a lagger. we'll see inventory decline as we head into the summer driving months, and i think that's setting us up well for the stocks that can overperform in that time frame. >> kevin, what about you? interesting year with the performance of technology. >> i like earnings 17 because it brings focus do what you invest in, individual companies, and one of the things i like best about earnings is notice the different stories.

netflix versus let's say somebody who is not growing, but who is losing subscribers, for example, and it's showing you over the long term if you identify the companies with the win to their back and still positioned, appointing once or two, it's the way to vent in the long term. >> coming out of the weekend filled with geopolitical tensions that feel like they are not going away. rhetoric about north korea, however they resolve problems in syria, so forth, you know, i guess this market feels like it's -- i don't know whether it's looking past that or whether we price that in going into the weekend, but do you just ignore that? i -- i mean, what else can you do, right? >> yeah. i think -- you can't ignore it. feel more nervous, but nobody cancelled netflix being scared of north korea. not affecting the underlying behavior. >> i think the geopolitical risks, some of the tensions going on, you got to look past

it. it causes great headlines, but the world's been a rocky place for, you know decades now and markets have done well if you think about it. look past that. focus as kevin said on the earnings stories and to what anne said, energy sector sentiment is negative headed into earnings, so you could see oversold rallies in netflix. >> what happens then? maybe we get something on the trump tax plan longer term, but feels for now like that whoa basis for the rush up until, you know, march takes has disappeared and people are positioned differently. creating opportunities or mean you joust have a different environment now? >> i think it creates opportunities. obviously, we had a lot priced in from the beginning, when the new ad nrgs came in. there's delays that's bound to happen, and so we're at a place now where there's opportunities that present themselves based on

some of the volatility, and that increase in volatility gives people like me active managers a chance to buy stocks discount. i like the volatility we see in the near term. >> what are you picking up here, kevin? >> well, i think if the market gets choppy, you'll look for entry points on great stories because one of the problems with great stories is they are too expensive, and you end up having to make a bad trade to get into a good investments. ugly markets give you a chance to get on board a really good story. >> did we miss it? i mean, up 183 points on the dow today. what was the ugly market? >> there's another one. i don't know when. >> you're ready. >> thing about bouncebacks, the selloff takes awhile, and then before you know it, market is back where it was on march 1st and people say, oh, i missed out again. >> this is one of the hallmarks of the entire rally, you know, entire way since 2009, awful selloffs, face ripping bouncebacks and people fell they missed it. the netflix earnings are out. straight to julia with the numbers, julia? >> netflix earnings in at 40 cents a share, three cents better than wall street analysts

projected. revenue coming in at $2.64 billion right in line with projections. of course, there's a huge attention to those streaming numbers, the company saying that it added 1.42 million streaming subscribers in the u.s. this is a buiit lighter than guidance of 1.5 billion. internationally, the company added 3.53 million, a hair lighter than projected. the company's, you seeings stock down 1%, and that's likely on streaming numbers. the company provides guidance for q2. interesting numbers there. the company projecting revenue for q2 in line with expectations, 2.75 billion. eps, though, for q2, lighter, 15 cents earnings per share of 24 citizen, likely because the entire cost in the second quarter including shift of house of cards into that quarter. so if you look at the

expectations here of difference subscriber numbers, subscriber numbers for q2 is stronger than projected. that's different than expectations of 2.5 million subscribers worldwide. as we watch the stock down, now about 3%, that's likely on those subscriber additions this quarter being lighter than expected. they continue to dig through the report and back with more, kelly? >> julia, quickly, what did you say they added for the international subscribers in this quarter? >> in this quarter, the international subscribers -- hold on here, i got to get the right number here -- international subscribers were slightly lighter than expected. adding 3.53 million subscribers. the projections were for 3 -- they guided to 3.7. added about 200,000 fewer international subscribers than expected. a little bit light on both u.s. and international in terms of

subscribers just in this quarter while projections for q2 is more subscriber additions than expected. >> okay. great, julia, thank you. back to you in a second here. i want everybody's reaction. paul, you first. >> so netflix is a follow-upny story because it's a successful stock over the last decade, but more than not, the company goes down with the day it reports earnings. as kevin said, you know, using this volatility as entry points to get in, but it's not down much mountain broad scheme of things now. it moves 5% on earnings. as far as subscriber growths, they -- we saw that lower income consumers showed more of weakness in subs on the -- after the price hikes. that could be having impact. internationally, numbers were continuing to show increased netflix. >> what do you do off the back of it? >> first thing i ask myself is, how are they going to solve the puzzle of international, right? every culture and society, it's

a a different puzzle to push people to sign up for something that never tried before. not everyone in every corner of the earth watches house of cards. do you have programming just for pe peru? i don't think so. so the other thing is, you know, they didn't peak, and most analysts are already at a buy. so there's not really much -- they did not give a good reason to raise numbers. there's not much oomph there. trades up a little. >> netflix up three quarters percent. we usually see double digit moves when they miss. >> benign. >> muted response. >> it is. it's a high expectation stock. it is hard for them to go out and exceed expectations every quarter. >> yeah. >> julia has more here. julia? >> interesting commentary here in the letter from hastings on competition. he says here that though they believe that they are talking about the lunch of virtual conservatives -- the service that hulu has in the works,

saying they don't think new services, skimming over the top, streaming tv bundles, will not impact us as netflix's largely compliment ri to paid tv packages saying we are on demand commercial free viewing rather than live ad supported programming. he says amazon's move into nfl football. they bought the rights to live stream a number of thursday night nfl games. hastings saying that's not a strategy that is smart for us as we earn more viewing and satisfaction for spending that money on movies and tv shows. reiteratining netflix is not interested in live sports, sticking to the commitment to original programming. they note that as their slated content expands, they spend over $1 billion in 2017 marketing that content to drive more member acquisitions. kelly? >> thank you, julia. kevin, i also wonder, i mean, if they do change the net neutrality rules -- >> right?

>> how much a problem is that for this stock? >> well, it's hard to say that helps them, right? so it can only be downward. it's -- i can't argue that it's perfectly neutral, therefore a smaller or bigger down, but doesn't change the basic proposition, just an inconvenience for them. >> are you surprised they stay away from live sports? >> i'm so happy. >> why? because it's expensive? >> as an investor, i never want to chase what everyone else is chasing. seems like everybody else is chasing after live sports, and just don't go there. you don't need to. what they do is working. don't chase somebody else's idea. >> the one thing that amazon prime, not necessarily the sports, is amazon prime content makes serious end roads into net flex, but as far as viewership, but it's not a zero sum game. this is a tide to lift multiple boats in the end, and, you know, so much what's good for netflix is good for amazon. >> ironic thing is how much more consumers are willing to pay for all content they consume.

>> adds up. >> the species to be on the lookout for a cord cutters not subscribing to netflix. get to meet one, when i do, i'll start to work. >> hunting now. thank you, guys, so much. anne, kevin, joining us here going through the netflix results. much, much more ahead. shares lower after reporting disappointed metrics. we'll have more reaction and talk about whether investors, as we watch shares down about 3%, should be concerned about those subscriber numbers. mean while, united shares down more than 2% from last week's passenger pr nightmare. can the carriers' earnings, headed our way this afternoon, turn things around? former continental ceo weighs in. you're watching cnbc first in bid world wides. bid world wides. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions,

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welcome back, by the way, united earnings with a bottom line, going through the numbers right now. first time the carrier reported rules since the pr nightmare

last week with the passenger draked off the plane. back to this in a moment. shares not moving too much. now netflix shares lower after reporting earnings moments ago. for more, bringing in michael graham, and maxwell from 55 capital. gentlemen, thank you both for being here. michael, thoughts here on their guidance? looks like that's at the heart of the miss here. >> well, i think, you know, what happened on the kwaufquarter was for q1 were light domestically and internationally. that's why the stock is down. i think the reason it's not down more is because the guidance for subscribers for q2 were heard of where estimates were and consensus was, so i feel like it's just a little lumpiness, had lumpiness before. if the guidance for squrq2 was k weaker, stock would be down more. >> i misspoke. the reason the shares were down more was because of international and domestic net editions were shy. to your point, it was the

guidance that might be strengthening a bit. max, where does it leave you on netflix? >> we see it as a top-down play, the way we look at markets and the opportunity. to us w e figure out if these are still the dominant players in the world of a shift towards streaming content. we think they are, but they face a world in which the content they buy comes across in many, many form, factors, gets more expensive, first mover advantage is deluded with time, and the 96% of america that lives outside of the united states of the world that's not machine only have 40% of the business here and face more competition meaning it costs more for content, more competition, and there's price pressure on the growth area xus. still like the company, but, again, it's macro story and world right now. in that world, we think the pressures are more or less against the huge multiple here and future where profitability is pushed back. >> talk about that, then. what do you look for in terms of ability to grow internationally,

given all the hurdles that max and want last guest mentioned? >> the content point is a great one because, you know, the company is actually trying to manage down the amount of content that is licensing from other people. it's spending $6 billion on original content this year. the plan there really is to draw subscribers to the service with content that netflix builds and producing on its own and netflix owns and doesn't pay royalties on. what that does is enable margins to extend overtime and it's a long term, you know, bet that the company is making. you got content to draw subscribers to the service. they are localizing content in countries as well, and they have to be selective about that, but i think the content is a big strength for them. >> netflix shares, by the way, down 2% after hours. julia has more. julia? >> hey, kelly, i think it's worth noting here that reid hastings expects to cross the 100 million member mark this weekend. now, of course, that would mean

they asked 1.25 million subscribers since the end of the first quarter, they also know that they expect to have about 8.15 million net adds in the first two quarters of the year compared to 8.42 million in the first half of last year, trying to put overall membership growth in the first half of the year in perspecti perspective. kelly? >> absolutely. thank you. max, just before we go, i mean, the fact they hit 100 million members, the idea was hbo was the highest to get, right? they have blown through that in terms of subscriber editions. give them credit. they know how to build the business, right? >> huge credit. looking at multiples, hard to say no and give them credit. they are the leader. >> i mean you, maxwell. >> i give them the credit. >> can't do the international growth. they reached is 100 million. >> it's impressive story, beginning to 40%, executed numbers, do they continue to own

the world or be the no. 1 player in the world. they are. no matter what they do short of a united airlines style super fias fiasco, they are number one for 18 months. it's their market to lose. pressures are real and here. >> yeah, well, julia pointed out -- hbo at 134 million now. i stand corrected. god, keeps growing. thank you, gentlemen, thank you for joining us for early reaction to the netflix. shares lower, a percent or two here. united shares, meanwhile, moving higher looks like after the results. susan lee has more. sus susan? >> strong quarter for united airlines, kelly. they tell straited that bookings ran ahead of expectations. a fifth quarter of a beat with eps. going through the numbers, 41 adjusted ahead of animal is' estimates. revenues at 8.42 billion. higher than what the street was looking for, and it comes down to passenger revenue for the quarter. it was flat. 0%. in fact, the next quarter, this is pretty impressive, united

airlines says they are going to see the first quarter of positive unit revenue growth in two years in guiding for passenger revenue to grow between 1 and 2% and oscar munoz, ceo of united, added a comment in the earnings in relation to the incident last week. he says that it is obvious from recent experiences that we need to do much better, much better serving our customers. the incident that took place aboard flight 4311 has been a humbling experience, he says, and he takes full responsibility, and he says this will prove to be a water shed moment for the company. back to you. >> thank you, susan. the shares were moving higher. for more reaction. let's bring in gordon bethune. thank you for joining us again. >> glad to be here. thanks. >> a lot comes down to how the tone of oscar munoz on the call this afternoon, and this is the first time in the way the public or at least the analyst

community hears from him. what happens if he's serious and they shift attention more to customer service than, you know, investor returns? >> well, i really believe they will stay focused on customer experience. it's a tragic incident that happened, but if you look at some of the things they announced, redeployment of 787 to bigger markets, cancellation of the old airplanes in favor of nextgen, those are all revenue e enhancing moves in place. you'll see better results from that. >> they put up good numbers last monday, actually, day after the incident happened, just talking about, you know, some of their movantly numbers they report. their on-time -- -- >> best ever, yeah. >> stats improved there, best ever, exactly. i guess the question, do they lose momentum from this, or are they able to keep it going? >> i think it flows over.

talking about stock prices above where it was before, when you say before, do they focus on customer experience or bottom lines? sometimes customer experience helps bottom line. in that respect, if you get through the great customer service, and in that respect, i think, you know, improving customer service can help with your overall business, but people are not going to stop flying united. what do you do for newark? walk? >> yeah. >> walking. gordon? >> well, i mean, we're talking about hundreds of millions of people a year on united, so, unfortunately, the incident, i hope it's isolated, think it will be, they are always customer focused. now they are optimizing the utilization of the assets and network for pretty smart strategic thinking that i think will make them move on the revenue side. >> i'm not sure if they addressed it, on the call, or too soon to know, but what about litigation they are exposed to here? pay the guy millions, right? >> well, that's all ensure insu.

they wiare fully insured. so much liability in the business as you'd think. i think it's an isolated case. i'm sure they got the message. it humbled them. oscar did a good job of getting that across. that's behind them. forward thinking, how do we get more optimization of the assets and manage revenue better than we did. fuel's up. labor's certainly going up. that's why their earnings are up. they are addressing that. >> what happens now? go back to the fall, when warren buffet's in the airlines, sentiment is good, share performance excellent. do you see this as any inflection point there? any problems heading into the summer with adding capacity, putting pressure on prices, that sort of thing? >> i think what they are doing is playing a smarter game, more strategic game, utilizing strengths as compared to their competitors, and i'm impressed. the team put together a good

strategy. i look for continuing earnings growth through united through the remainder of the year. >> paul, by the way, up 1% after hours. only fell last week with everything going on. >> yeah. >> about to erase that. >> yeah. i mean, actually the april quarter as far as stock reaction is a weak quarter. this is impressive. stems from the fact that sentiment was south on the stock headed into the earnings report. >> the other issue, though, is this, the airlines generally has been so high so zsh. >> right. >> wonder where that leaves us. i think the stock -- we don't have any positions in the airlines, you know, in the airline sector, so i don't -- i wouldn't be advocating it, but it's something warren buffet's in there. he's not always wrong. >> good housekeeping seal of approval. >> right. >> thank you so much for joining us this afternoon. >> you bet. glad to see you. >> united shares up .8%.

more coming up on why he disagrees with einhorn's push to create two classes of gm stock and eliminate dividends completely. how facebook is taking an unusual step in the fight against fake news. you're watching cnbc, first in business worldwide. siness world.

welcome back. here's a look at other stories we're following today. a furious debut for the eighth

film in the "fast and furious" franchise." the fate of the furious" raked in 532 million globely this weekend, doubling the record holder, star wars, the force awakens. universal pictures owned by our parent, comcast. uber lost nearly $3 billion last year and gross bookings doubled to $20 billion. net revenue at $6.5 billion. the first time uber revealed this publicly since it's not required to do so as a private entity. facebook is trying to fight its fake news problem in newspapers. the social media giant took out full page ads in france and germa germany, how to identify fake online stories, and facebook faced criticism for fake news stories in the u.s. election. meanwhile, it's instant articles, which the company hopes would transform journalism, is falling out of favor with publishers like the "new york times" upset facebook

algorithms highlight video over other contents. time for the cnbc news update. hi, sue. >> here's what's happening at this hour, everyone. arkansas moving forward with its attempt to begin a series of double executions tonight despite rulings in state and federal court the inmates were entitled to additional appeals. the state's lawyer pressed the court of appeals to allow the executions to begin. russian authorities say they arrested a suspected organizer of that is bombing of the st. petersburg subway killing 14 people two weeks ago. eight others also arrested. iowa governor signing a bill into law making it illegal to use a hand held electronic device to write, view, or send an electronic message while driving. that means every use of the cell phone or gaming device while driving is now a primary

offense. new information on prince's death. court documents unsealed today show a minnesota doctor provided oxy koe done for prince under a friend's name to protect privacy. no one charged with the crime in the musician's death. that's the news update this hour. kelly, back downtown to you. >> all right, thank you, sue. noted value investor had a major change of heart on auto stocks over the last few years. owning shares of gm, ford, and chrysl chrysler. that's next. president trump reportedly set to nominate ran doll krorls for a top restory post at the fed. who he is, what that means for deregulation on "the closing bell." bell."

welcome back, a strong finish on wall street, dow up, and s&p up 20, russell up 15, one of the lightest days of the year as we learned. nevertheless, pretty strong session across the board. united continental rising after hours on earnings beat. netflix a little bit lower after

missing guidance for the second quarter, but the netflix shares down 1%. usually a much bigger mover if they have a miss after hours. united up 1%. could change minds about investing in airlines, but others invest in autos. he says why he chooses to invest in gm over tesla in the latest installment of "the spark value edition." >> i always tested auto makers. you know, unionized, cap x, takes you four, five years to get a car to market, and in the meanwhile, the market changes. all these things that are hard to predict, but what ended up happening is that after gm and chrysler went through bankruptcy, as i staided them, they became completely different companies, and so detroit went from being one of the worst place on the planet to build a car to the best, and the reason i ended up in these games was

because when i looked at, for example, fiat-chrysler in 2012, they were basically at one-time earnings. >> wow. >> and this is one time, that, you know, 2017-18 earnings, but it was very cheap. >> yes. >> and so cheapness will let me get over some of the dislikes. >> and some changes to the industry too. do you know david einhorn? >> i know of him, met him a few times. >> couple positions overlap. >> yes, yes, yes. >> one is general motors. >> yes. >> pushing for the stock to create two classes, one for capital appreciation and the other for the dividend. what do you think of the idea? >> it's not a good idea. i'm with gm management on that. i think a simpler and better approach for gm to take, will be hard for them to do that, but a better approach is eventually eliminate the dividend. it's a cyclical industry, why not go no dividend and gm has a

really good capital allocation frame work for returning capital buybacks. in any case, buy backs are a better way to get money to shareholders because you don't have uncle sam in the middle. >> depress the share price? people are there now partly attracted by the dividend because it was high when the stock was cheap. what happens if they leave? >> i can't see gm -- first of all, we shouldn't be making decisions because of stock price. that's not a good idea usually. i'm not saying this to drive the stock price up or down. awl i'm trying to say is that if the business delivers cash flows and it's run effectively, eventually, the stock reflects it. i've been a shareholder in gm for five years. we have not seen much of a return. i think he is fantastic, the company is run really well. they are firing on all cylind s cylinders. one of the things that we don't control is we don't control the

time it takes in value stocks to get appropriately priced. we don't really have -- we don't particularly have -- gm, eventually, it'll get to the price it needs to. >> which is? >> with or without a dividend. probably it needs to be 150% higher than prices. >> is time working against these auto makers? look what happened this past week. tesla's market cap overtook that of general motors, but what -- is the company going to look like in a couple years? >> well, so, first of all with tesla, i don't short anything. i don't think it's a smart idea to buy tesla stock. even though i think he's fantastic. it's changed dramatically. nowhere near as cyclical as it

used to be. the u.s. auto market has quite the room to run. >> what does self-driving car do to all investments? what do you think how it unfolds in the industry. >> first of all, between us girls, there is not going to be any self-driving cars as we think about it for at least a couple decades. >> you really -- for a couple decades? >> so we'll see self-driving trucks -- >> like auto -- >> way before -- auto, just tesla passed by on -- because self-driving trucks, different frame work. when we drive a truck say from california to new york, you can have a driver get the truck to a highway, and then have someone else on the other end take it from the offend of the other highway, and central point of highway driving, that is's si to automate and get drivers out of the steering wheel. but self-driving cars, the last mile is very complicated. complicated in each of the

different scenarios you think about. >> the most driven mile. >> yes. i think -- i don't -- i think we'll see a lot of advances in driver assisted technologies, but the driver will not be out of the seat for a long time. >> our thanks to him, watch the full interview uncut right now on cnbc.com/pro. he doesn't short talking about tesla -- >> good thing he has not in the past, but what i like about that is when he said, keep it simple. respect splitting gm in two stocks. you complicate things as seen over the years, things get -- it has bad outcomes. we want to simplify things rather than make it more complicated. get rid of the dif devidenddivi point. >> cyclical business. >> you don't have signal for

shareholders, if you tweak it or eliminate it for a period of time. the interesting thing, the argument, i don't know that it's in there, but he thinks the auto sales plateaued at high levels. it might look less cyclical the next many years. just because it's kind of like there's a pent up demand for new cars that keeps us from, you know, falling from peak levels. >> seen in housing, boating, cars, age of the fleets, structures ageing, you can tend to see a leveling off here, but not a big dip in auto. >> following the boating stats. >> well, boat -- boats are older than cars out there. replacement cycle. >> people are crazy, i mean, i don't know, never owned one. the bush administration is in line to fill one of three fed board vacancies. all the details for you next. out of ceo of iconic, the hedge fund behind this and other investor moves. stay with us. think again.

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welcome back. president trump with three vacancies to fill on the fed and ready to nominate the choice for the vice chair of bank supervision. ylan has more. >> kelly, the leading candidate for the job appears to be randy quarles. this person told me that everyone but the president signed off on quarles quarles so

far. he was a partner at the carlisle group, in the bush administrati administration, and he was under secretary for domestic finance while george w. bush was president. reaction from bankers privately so far so no official announcement is made, he is a pragmatist, traditional policymaker, x.ed to push for broad deregulation. of course, that's not happening overnight. compass point research pointed to three priorities for him, changing the volcker rule, and, kelly, fun fact, quarles runs a firm with the descendent of the lerchal mariner who now graces the bank headquarters here in d.c. back to you. >> that was an eyebrow raiser. paul, on some level i wonder if there's push back, feels like, oh, i don't know, gets too cozy or, i don't know, depends on views on regulation.

>> yeah, i mean, he's got an impressive resume. i don't know the history, but reading what's been in the news over the last couple days, but take a step back at trump. he's going to point, you know, more med governors, supreme court justices more than any president in memory. he goes eight years, i mean, just going to be a whole court. >> amazing to think about. >> just really going to have a lot of lasting impressions on the ned as well as the quarter. >> and to that point, if quarles winds up on the fed, does it seem as though he defuates frde? there's two sides of that coin. where do you think he would fall in terms of his regulatory approach? >> one thing expressed is he doesn't feel that big banks are fundamentally a problem. he's not so concerned about bank size. he's warned in the past if you just break up the big banks by taking an ax to them, that could lower economic growth going forward. so, you know, he's someone who

wants to apply regulation in the targeted manner, but remember, the last time he was involved in policy was pre-financial crisis. it's a different world he's dealing with now. >> for sure. thank you, ylan. we'll see if quarles makes it on to the fed board. elliot management strikes again. investor targeting the likes of samsung and iconic in recent months, what elliot won today and what company is moving on next. later, roger mcnamee, find out what the names are tonight on "fast money. " " ♪

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klaus kleinfeld was ousted today. the board said he used, quote, poor judgment in contacting elliott management which is iconic's biggest director. today proved a small victory for that hedge fund. headed up by paul singer, and targeted companies all over the world, including places like south korea where they're deeply entrenched. joining us is jeff graham. welcome to you. >> thanks for having me. >> how do you describe elliott and the scope of it today? >> it's among the oldest hedge funds in the business. it's been around for 40 years. they've been doing distressed investing for 30 years. it's an extension from stress investing. the same liquidity profile. a lot of restructuring company boards and restek turg of

companies. so they've been doing that for 15 years or so. and they've been very successful at it. >> what are some of its high profile examples here? iconic is just one. but that they would take on a company like samsung is extraordinary and they're not afraid to go out and ruffle feathers. >> they don't have like the marquee names that, you know, that a bill acme would have or something like that. but they've been targeting companies all over the world. extremely big companies. companies of $100 million in market cap. they've been extremely successful at all of them. it's almost as if they're not looking for the headline wins, like they're happy to get into the board room and to drive actual change in the board room. >> bhp is one in the news right now. paul? >> as we get later into the economic cycle here, activism,

the wave has been very strong. are there more opportunities? are there opportunities to go activist on a company greater, less? >> sure. it depends on your view of the cycle. but the number of activists, campaigns has gone down. look, i mean, it's harder to find good investment ideas out there. if you're big, if you're global, if you have the expertise and the resources, you know, to look at a brought universe of stocks, it helps to have ak ti vism as a tool. >> what's the best part of the world? >> i'm not sure. i do domestic stocks. there are plenty of undermanaged companies here. >> you sound like carl icahn. >> there are plenty of other

activists to say i can't get them to vote for me. they don't have the resources to spend time on afr campaign out there. there has been a huge proliferation out there. maybe a shakeout is a better term for it. what's it going to look like? is it going to emerge as the guys who do it right, and the ones who have been at this for a really, really long time and that's it? ? i think the experience in activism helps a lot. but the one thing you touched on, to be successful in activism, you have to persuade the big past institutions behind the scenes that control the votes of all these public companies. elliott, they do extremely thorough work. they're very well respected by these big investors. and so they are persuasive to them. >> that's the key thing, if you're somebody who's messing with the spire s&p 500 and there's an activist in every one of those saying, i want you to vote for my shakeup, how do you

necessarily know it's the right call? you're more likely to support somebody like elliott, where you would just say, hey, i'm not sure. but if you're anyone who's not up to their level, it's much more can difficult to get any change. >> the arbiters of the hedge funds have been past institutions. they could be looked at how thorough the work elliott does. they're very compelling. we talked about the debt that they did. 330 pages. and it was all killer no filler. that was an incredible presentation. >> it really was. >> i see lots of those. i think that was probably the best one i've ever seen. >> like talking classic rock songs. elliott, arconic, maybe i'm going too far with this. maybe a woodstock feel. jeff graham, thank you. >> thank you. we had some earnings from united and netflix this hour. netflix has just gone positive.

you can see them hugging the flat line there. the numbers for the current quarter they issued an upbeat number for the following one. and united as well which was higher after reporting its results. tomorrow we have financials with goldman and bank of america. we'll tell you why earnings could be a positive catalyst for this market which doesn't seem like it needs one after today. d.

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netflix earnings, inside the numbers. subscribers, new regions and show content. what investors need to know. squawk alley tomorrow 11:00 a.m. eastern. we're kicking off the thick of earnings season, if you want to call it that this week. we had netflix and united after the session today. both now moving higher. netflix by 1%, united by nearly 1%. if everyone's watching half a billion hours of adam sandler movies, netflix can do no wrong. >> look who's laughing now, right? >> they actually tweeted that out, drawing attention. you had an interesting sentiment about how many people watch every day. >> in our survey work we do, over half of all netflix subscribers say they've used the app in the last 24 hours.

that's pretty active user content. >> are you one of them? >> i did use it this morning. >> busted! paul, appreciate it. "fast money" begins right now. "fast money" starts right now. live from the nasdaq site. tonight on fast, netflix just got lower, missed some subscr e subscriber numbers, and the stock is now higher. why? roger mcnamee said there's a storm brewing for two mega cap net stocks. and later, the billion-dollar drug bust. eli lilly tanking today after the new ar arthritis drug. the dow surging more than