the football game is like beer, burgers -- >> the two -- >> and magazines they have to buy two pages, not just one. >> right >> sometimes three >> all right i'll see you tonight, jeremy pipen on set thanks for watching power. "closing bell" starts right now. all right. am i ready for this? we have a lot going on >> we have a lot as we like to say on this show, we have a lot of show today. >> welcome to the closing bell >> we're going to get to this exciting information. >> i'm sitting next to a mound of produce we'll get to that later -- >> oh, i thought you meant me. i'm bill griffith, the mound of produce. fedex by the way if you haven't heard revealed this afternoon a key issue that could show up on the next earnings report we're going to tell you what this is. the stock was holding for a while. now it's moving a little bit

higher one and a quarter percent. >> i'm glad you cleared that up. >> me too. >> kbupg after the bell. the results of bank stress tests and a number of dimpbd and buyback announcements could follow we'll tell you what to expect. bid up again today >> big moves there let's get to the market move today. the dow, s&p having one of their best gains in two months the financials leading the way there, the nasdaq is the big leader with a gain -- the biggest game percentage wise here let's get to the closing bell exchange right now leah bennett from westwood trust is with us today good to see you my friend. and rick santelli checks in from the see me in chicago. rick, i want to start with you because yesterday we talked about this taper tantrum that the european treasuries had had after mario said, you know, used the word reinflammation instead of disinflation, and the ecb had to walk that back today. you know, those yields haven't

given up all the that much as a result of that, have they? >> no, and that really is the point, listen, i get the walkback, i understand none of this has ever been done before, central bankers are a little apprehensive, words have meaning at this point. the market paid a whole lot more attention, and you're exactly right. whether you look at spain, italy, candie, u.s., bobbles, the amount of increase in rates yesterday was larger than the givebacks today. reminds me a lot of the stock market for many, many weeks in 2017, where we had very few corrections and when we do have down dates, they're dwarfed by the updates, same type of thing. how are we supposed to interpret that my reasoning after talking to many fixed income traders is, listen, we don't know what mario's direct timeline is, they're going to be gun shy if it affects the markets, global markets that is, because it's the first central bank outside the u.s. to actually think they're going to start pulling the reigns and slowing things down a little bit. at least with regard to stimulation, accommodation,

quantitative easing, it's going to be a bumpy ride, i don't know if i call it a taper tantrum, i would call it just a mini taper tantrum, and in that description lies some of the odds in the marketplace, it's very significant, how significant if we get closed, ten year note yields above 226 which by the way was the high of that quick move from right before the election to right after the election, when we went from 177 on the 4th of november to the 14th at 226, boy, that level is now turned out to be very important because it basically was the high yield today, that's your pivot to watch for treasuries i would use 40 to 2 to 45 basis points for that same pivot for boons. >> and steve, is that behind the move higher and financials today or is that because of more anticipation about this afternoon? how much is price even if we get a slew of announcements about buybacks and returns >> i think it's probably a combination of the two i do think it's about the

results that we're going to hear later on today kudos for rick for getting in the word, the first time i remembered hearing it on a 3:00 p.m. spot with cnbc. maybe we should take a moment for that >> spell it. >> look at rick's face rick, make the face. >> there it is >> there it is >> you know, when you look -- >> plop, plop, fizz, fizz. >> when you look at the back half, we're running into quarter end. we're going to have to decide, is it the horse or horses that have gotten us here? health care up 14% is it going to be technology up thereabouts? who is going to take and do the heavy lifting across the finish line look at financials, you look at energy, those have been the underperformers. financials, couching a bit energy, couching a bit, energy is down 14%. so if you have those guys doing a beta chase trying to make up for lost performance, they're not going to get it by buying tech and health care, they're going to have to place their flag in the ground and make a bet on energy, on reads, so

we're on one of the underperformers. >> and leah, we can anticipate this afternoon with the feds stress test results, we're going to get some dimpbd increase announcements here, but you're looking overseas in europe for dimpbds right now, why >> yes, that's correct at westwood group, we have an office in toronto that focuses a lot on international and emerging market opportunities. and if you look over in europe, valuations are lower and dimpbds are rising at a faster rate than they are here in the united states so we think there's a lot of interesting opportunities there, the stock that we certainly liked quite a bit. we think it's positively leveraged to the recovery in europe it was a great management team, and it's very consistent with our investment approach of looking for companies that have earnings growth that is underpreerkted by wall street. >> would you say the twing kiss, one of those companies, leah >> yeah, twinkie is another good example. we want our strategy here called

westwood select that's our best ideas across the firm. and the hostess is a name that we known our small cap value strategy so everybody's been talking aboutings this year, the amazon whole food acquisition which is exciting and organic foods is certainly an area that's growing very rapidly, but you have to talk to those that cater sugar as well. so, hostess is an iconic brand that had a new management team come in about two years ago, they were bought out of bankruptcy, a fantastic team that has turned around 80 iconic brands, including duncan hines we think this company also is underappreciated and the margins are growing at a nice rate and it has the potential for an increase and their balance sheet characteristics, definitely something we like. >> up 61% in three years steve, what do you think, is this a one day wonder, this rally? do you suspect this -- what has been a very quiet market in terms of volatility that we could see it beginning of a new

trend here >> you know, you really have to look at it in a couple of different ways, there's been the rise of pass i have investing versus active management and whenever you look back, bill, look at a lot of charts, whenever we do sell off the sell-offs are shortener duration and even if they are in deep, you whip back quickly. and i think it's a matter of guys just getting involved in what they deem as to be the best marketplace and best sector, the best space, and you can't keep people out of the equity market. it just seems like this market has a bid. there might be different leadership, but we don't take that step backwards. so, although we could see a little bit of a sell off, i do believe going to the back half people probably are going to invest more money into this marketplace. so ultimately, higher markets stay with it, stay diversified >> all right very good, thank you nice to see you. >> thank you. >> appreciate your thoughts on today's market i didn't realize russell has a better gain than the nasdaq. >> and it's about the same in

point terms too. interesting. nasdaq trying to make up for losses yesterday the dow more than doing so, up 151. fedex announcing a potential issue that could show up on it's next earnings report i'm morgan brennan has that story, morgan. >> hey kelly, they were halted earlierier today for pending news the key statement, quote, we cannot measure the financial impact of the service disruption at this time, but it could be material so what does it refer to well, fedex disclosing that it's tnt express unit which it acquired last year was quote significantly by a system's virus. that update on the heels of a massive ransom ware attack that hobbled a number of companies across the globe this week fedex saying tnts operations and communications systems were disrupted, but that no data breach was known to have occurred also that operations of other fedex businesses are unaffected. so it marks the second time in less than two months that fedex has been affected by a cyber attack remember, in may, the company

said it experienced issues with some of it's microsoft window systems due to that virus that impacted industries and governments in hundreds of countries. nonetheless, you look at shares of fedex today, they are moving higher they're up more than 1%. near the all-time highs they recently hit guys, back over to you >> still a troubling development. >> markets not troubled by it. >> yeah, but you know, you just have to wonder if that's because these haven't been systemic so to speak until now, but, you know, you can bake it into the share price, maybe move through after one quarter. now that they are becoming more pervasive, you know, i just wonder if they're -- even if they're spending more on cyber security over time >> and i don't know, morgan, if this was just mandated by fcc, they have to tell everything -- put everything on the table. they said as they go through the process, it could have a material impact on them, right >> yeah, and you know, and that's the thing to key in on. we don't know whether it's going to have a material impact or not, they don't knee, but the

fact that it could, i think, it was the last line in the press release, guys, the other thing i would just note, the transports are outperforming today too. you talked about the small caps, the small caps are outperforming too. part of the fact that it might be part of this broader, bid to the upside for these names right now. >> a full service report from morgan brennan there you can get a nod to the transports >> i deliver >> see you later, yep. that she does. now to blue apron's ipo pricing that's expected this afternoon we have a lot coming up next hour >> yes >> great stuff the drama is all leading up to the trading that begins here at new york stock exchange tomorrow, leslie has the story for pus. >> plenty of drama indeed, bill, after blue apron filed an amended perspective this morning, slashing it's range, the company is now seeking 10 to $11 per share after investor demand was too weak that the earlier 15 to $17 price range. now, it's rare for companies to

refile with a lower price range, only 4% of internet companies have done so since 2010 according to deal logic. big investor concerns around this one involve the business model. sending a box of ingredients to customer's homes that they then have to cook themselves. they're also skeptical about the cost of acquiring new customers, and blue apron's inability to keep loyal ones. and they're nervous about the competitive environment. not just with other meal kit delivery start-ups, with the looming tie-up between amazon and whole foods. and lowering the price range, blue apron is forfeiting about $200 million in proceeds from the ipo and shaving $1 billion off it's valuation at the new range, blue apron is asking for a price in line with what investors paid in it's latest private round two years ago. that's not a reinforcing sign for the ipo market or the private funding market, guys >> well, i guess the question, leslie would be, how much more have they done to create, you

know, a mote around the business and let's bring in bob on that as well who's here with us at post nine, bob, in those two years, has the company made it harder for competitors or not? >> that's right. that's really the whole story and why they reduced the price the line between grocery delivery, which is what amazon is doing with the whole foods purchase and meal delivery which is what blue apron is doing is very thin. the mote to answer your question is not very wide at all. and that's the problem and by the way, we've seen this with other companies, remember what happened to snap. we had the snap ipo just a little while ago, then immediately, of course, everybody came out and said wait a minute, facebook's got instagram, that's a major problem. we've seen these gigantic tech companies invade the smaller spaces before. remember the smaller company, etsy, they handy crafts, and amazon said amazon so is going to do that and their stock dropped as well on that.

this has been around far while, this problem >> we have here with us a meal kit. this is a big one. this has got three different recipes. >> this is the produce you were talking about. >> yeah, that's the mountain of produce that he was referring to leslie, have you used blue apron? >> i have not used it myself >> you have not, okay. >> i've been studying the financials enough that i feel like i could make almost a blue apron financial dinner, but no, i have not eaten the actual meal kit. >> have you? >> i've done plated which is very similar and what i hope is clear about this, all of these meal services like blue apron are sending you the raw ingredients, and you prepare it yourself. and after doing plated, i ended up with a ton of extra food. my schedule is changing too much i couldn't take advantage of it, if there was one where it was hopping in the microwave, it's read yes three minutes type of thing, sign me up. but in, i couldn't make this work >> have you got with an all

vegetarian meal plate? >> there is one in there one is vegetarian. >> i was looking for that. >> there's pork chops with honey mustard pants sauce. >> now i'm interested. >> with barely salad >> this is for the pork chop >> that is for the pork chop hand me the other two menus. they took those away from me to show them for display purposes very quickly here. >> this is the vegetable toes ta-da. >> that's the veggie one and then this one is a noodles, this is also vegetarian. you know -- >> and where's the wine choices? >> they have wine choices on here too >> i know. >> on the menu card. i don't know, you know -- >> you're quite the chef >> i love to cook. these are interesting recipes, it's an interesting concept, but we have responses from our viewers, and i asked on twitter whether you're a fan of blue apron, and we had -- we're just going to show two of themhere guess, both one pro, one con, and here's the pro it's great for a busy person, senior, the sickly who need

proper nutrition, this helps family members who increasingly take care of family members. >> that's fantastic. >> but here's the one, and i guess i could have written this one, even though he didn't phrase it exactly the way i would. he says i'm not lazy, i go to the store. it's not that i'm not lazy, i prefer to pick out my own stuff. >> by the way, here's how they frame it it should be a cooking education -- >> it is >> i learned thousand make a great vinaigrette from these. >> are you going to stick with it that's the thing >> we've done this >> used all your time. >> i go to whole foods and make my own martinis, i know how to do that. >> got to have enough olive in this there you're going to be hungry. >> for those of white house live on that. >> leslie, thank you. >> thank you, guys >> probably more on that pricing, we hope in the next hour which again was cut significantly below what they were looking for originally. 45 minutes to go until the close. are you bringing the food home what's happening >> no, i already know what i'm

making tonight, and it's not that >> dow's up 147 points today, nasdaq's up 82 that's helping wipe away some of yesterday's declines s&p's up 22. and the -- 82 or 22. you can see it all there >> it's right there whereby yeah tweet from president trump is calling amazon out for, quote, not paying internet taxes. when we come back, a tax expert weighs in on whether the president is right or not. also ahead, should investors be buying shares of big banks or regional one ahead of the stress test results due out this afternoon. two wall street strategists will debate that coming up. you're wchating cnbc, first in meal kits worldwide. (baby crying)

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did several times while campaigning for the white house. >> i have respect for jeff bay soes, had but he bought the washington post to have political influence, and i've got to tell you, we have a different country than we used to have. we have a different, he owns amazon he wants political influence so that amazon will benefit from it, that's not right and believe me, if i become president, oh do they have problems they're going to have such problems amazon, which through it's ownership controls the washington post, should be paying massive taxes but it's not paying. and it's a very unfair playing field. and you see what that's happening and what that's doing to department stores all over the country. very, very unfair and you're talking about billions and billions of dollars. they should be paying those

taxes. >> maybe that's why jeff wasn't smiling when he sat next to the president. that is wooil rineheart, he's with the american action forum i don't know where to begin with this story, let's lay it out here amazon does collect sales tax from people who buy from them -- who live in the 45 states that have a sales tax so there are taxes that are paid, but what about amazon itself and the taxes it pays? where do we stand on that? >> so yeah, i think the president was half right here, and in part yeah, as you mention, amazon clearly does pay sales taxes in the states that it's required to, and it really started this in april 1st, however, there's the other part of the amazon which most people don't really pay attention to as muchwhich are the third party dealers, the platform itself amazon is more complicated which make up probably about half of all retail sales

>> will isn't it the case -- >> i thought it was that jeff basos owns the washington post, not amazon >> right >> true, he does that. he owns the washington post and amazon they're structurally separate, yes. >> no, but my point is if jeff owns the washington post, what bearing does that have on amazon the corporations, you know, taxes. >> it shouldn't. i would suspect, i am -- i don't see why there would be any -- why there would be any inner connection >> all right well we're -- >> laying that out there >> all right >> yeah. >> where do we stand though -- the supreme court ruled years ago that company doesn't have to pay sales tax if they don't have a physical presence in a state amazon is now developing physical presences with brick and mortar stores, we know they have one in new york city for example. >> yes >> so that's going to change their tax situation going

forward, isn't it? >> yes, it will. so they have agreed, at least in april they agreed to start, you know, collecting taxes for the states that require sales tax. and with the, you know, with the new deal that's been launched, potentially they have a bigger, bigger tax incident. so it seems like maybe, maybe they in fact got into these deals and are now working with the state specifically for this reason, but yeah, it is the case amazon is now going to be, you know, now has a bigger footprint in the retail world and a lot of the problems they had in the past really have kind of gone away since april >> will, the issue at heart here is also whether the administration would ever push back against amazon's market power, obviously -- >> good question >> yeah, they are quick to point out look, we have a small share of grocery if you want to paint it that way, but do you think that there's a feeling that amazon's success could make it a target >> yeah, it could be i think there's been a sea change and not for the right

reasons in the antitrust this is one of the other areas i work a lot in. and i really would hope that, you know, whoever comes in and starts really shaping the ftc on these issues really, really deals with consumer-based harms and really we've seen, especially from a lot of commenters in this space that they really haven't talked about what the harm is going to be of this merger. that's what i would focus on i hope the administration would do the same. >> all right will, thanks, appreciate your insights >> thank you >> will we should point out director of technology and innovation policy at the american action forum. >> and we have 35 minutes to go. dow up nearly 150 points today more than rebounding from yesterday, the other savage trying to do the same. the transports morgan mentioned earlier also up 150 points dollars weaker hanging on to the 96 level and the nasdaq's up 85. >> the maker is gaining ground on wall street despite a decline in yogurt sales. we'll talk about the key drivers and challenges confronting general mills.

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again, we'll get the second part of the results from the stress test after the bell today. j and j and murk are the decliners. there are about six of them out of all 30. general mills trading higher after reporting both an earnings and revenue beat before the bell this morning company credited it's successful quarter to cutbacks in both promotions and costs despite the beat though, general motors had a 3% decline in u.s. sales most of that driven by a double digit decline in yogurt sales. however it may be able to turn those numbers around after

releasing a new french-style yogurt endearingly called we. >> the company said there is no official definition for french yogurt, quote, it is more of a standard we have created the head of the yogurt unit said, i think greek yogurt is over. >> it's been over for a while. and now there's an icelandic yogurt >> it's delicious. >> is it all right. >> i got scurvy delicious, but i got the yogurt here, and it was no beuno. >> here's the deal, does anybody like yogurt, plain yogurt? >> it's healthy, it's good for you, you can lose weight, you know, blah, blah, blah, but, in order to get people to teet, you have to add stuff and that takes away some of the benefits of eating yogurt. so now this whole greek nonsense has gotten in the way. >> it's not that it's better for you, it's the pro teen craze and the new flavor thing, and it's now kind of playing itself out yogurt will remain popular

probably >> i think it's a fad. it'll remain popular as long as you keep the cutting -- >> and over to it. >> reporter: see, you keep the cutting edge stuff going there, and people will eat it, but just plain yogurt, not happening. >> indian food that's what it's good for. >> curried yogurt. >> time now for a cnbc news update with sue hare ra, hello >> hello guys, and i love plain yogurt here's what's happening in other parts of the world president trump convening and energy round table meeting at the white house this morning and he met with governors and triable leaders, freeing up access to developing natural energy resources former president obama and his family paying a visit to a temple in indonesia. aarrived following a five day vacation on the resort island of bali the obamas will be in the city for two days a police helicopter fired on venezuela's supreme court in what president nicholas ma dur row said was a thwarted terror attack he later said the chopper fired

on the court with grenades, some of which did not detonate, and that helped to avoid any deaths. venezuelan officials are hunting for the police bhoon carried out that attack. and president trump welcoming the manager and several players from the world series champion chicago cubs to the white house. they gave him a team jersey with the number 45 in recognition of his being the 45th president of the united states. president trump called the cubs a great team that's the news update this hour, i'll send it back downtown to you, kelly. >> all right, thank you, sue i'm on the floor here with kenny of o'neil securities and i understand maybe you could take these ingredients, cook us a storm -- >> i could, i'd like -- >> you don't need it to come in a box prepackaged. >> i wouldn't work for you >> if they get on your distribution list at the bottom. every day will be a recipe for amazing italian food >> you should launch meal preparation service. >> i should. from your lips to god's ears i like yogurt and i use it in my

banana bread, it's good. >> see what i'm saying what do you make of the market meantime today >> it's interesting between yesterday and today. yesterday you had this nervous, kind of variety-filled market, yet today, it's all gone away. all of that anxiety has gone away trump came out, they had the meeting at the white house with all the senators they're trying to get something done. they're trying to paint the better picture that he's got this meeting today with all of these energy, energy executives, and, you know, he's trying to turn the conversation, and i think what that tells you about the market is very anxious depending on the news of the day, yesterday, look what happened yesterday, before you know, the s&p and up 24 on what? nothing really changed between yesterday and today. >> we've also got oil moving around we've got news about europe maybe tightening or yields moving up a little bit the financial stress test results after the bell today >> that's right, a lot of that news was out yesterday mario came out with that news yesterday about potentially tightening and janet yellen came out yesterday and said we're still ready to go. and the market could get nervous. today, it's like they're not paying attention to what

happened yesterday i think what that tells you is that we're stuck in this 22, 25, 2250 trading range and i think we're going to be stuck there at least until we get through next week. if i don't see anything dramatic between now and then -- >> by the way, for you down here, the fact that blue apron had to cut of offer price, does that make you uneasy at all? >> i don't think it makes us uneasy, i think it's a reality of what's happening in the space. the whole food things is not helping that at all, but i'd be happy to talk to blue apron. happy to cook this stuff. >> you think i'm ready to go with that. thank you very much. kenny, over to you, bill >> all right i see a cook off between myself and mr. him at some point. perfect. >> listen, i am so up for that >> all right >> charity buzz. see you later. 27 minutes left in the trading session there, the dow up 15 # 1 points nasdaq and wrestled up more percentage wise major air carrier is testing new technology aimed at speeding up the airport screening process. we have details coming up on

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minions, we're going back t[ cheering ] so, you're villains now? no! no. no. no. [ evil laugh ] ow! yes. [ gasps ] despicable me 3. rated pg.

with the markets trading here, we have other stock to talk about, advance autoparts among the laggers in the s&p with cleveland research downgrading the stock to neutral from buy the firm says that pressure on the industry will likely outweigh benefits from the company's turn around effort >> and speaking of autos, it's time now for fast take and first up today, there is a new acronym in town, sacs, taking over as the new it car. it is smaller and has a sportier look and for that, $7,000 more, bill. imagine maybe some performance hangsments too, but wow. >> and utility out because i've been reading the reviews there's not enough room to carry anything >> in the activity, in the sacs, yeah >> does it have any pick-up to it is it a giddy up >> i guess, i see these things, it's like a sports car, few more inches off the ground.

>> it's like a sporty crossover. is what it looks like, right >> and if it's the new it car and they are charging a whooper for it >> is that the must-have for you? >> i guess, the subaru, maybe. >> yeah, i know, you've got your subaru san francisco once had a booming housing market, now it is one of the slowest growing markets in the united states rising by 5% in just the last 12 months, it kind of sites slow job growth and high pricesed a the reasons for this reversal, could this transstoned other cities >> interesting to me about the write-up in this, san francisco's chief economist said we are in the middle of a slowdown. >> yeah. >> blue aspron making somewhat indicative of this we know the fundraising is probably 2014. so you know it's been a gentle landing, but it's been a slowdown nevertheless. >> you know, last i looked, they had not repealed the laws of physics, it does -- prices don't go up forever, they have to come down what's interesting about san francisco, you know, they have a

very crowded market there. and i think it's adjust function that prices have just gotten too high >> yeah. >> traditionally among the most expensive real estate market >> the rents were higher than new york and i think google is now using modular construction techniques to building housing. >> whether this this spreads to other urban centers, i don't know i think this might be a special situation. >> it's been a couple years now that that area has seen a slow down finally, main wild blueberry prices have fallen to a ten year low. >> yes >> last year growers receives 27 cents per pound versus a dollar. that's a 75% drop. citing competition from canada >> blame it on canada again. where the blue beris works in their favor, but look, this happened to lobster some years ago. prices just plummeted after the financial crisis when demand went down, but what they did is they had to rebrand the lobster

use it in other items so that price could come back again and they could weather that storm. >> how do we absorb the surplus? >> well, they need to find new things turkeys, they did that with turkeys years ago, you know, get it away from just being thought of as a thanksgiving meal. >> you know what they should say for fourth of july this year, everybody should have a crate of blueberries. >> there you are >> red, white, blue. >> put it in your yogurt >> as i do >> at least if you're going buy low, sell high, now is the time to buy blueberries >> apparently. apparently >> yes, that's your helpful hint for today from closing bell. >> and you can read what you'd like about commodity prices. maybe currency is the way to go. the dollar index at about 96, the british pound, the euro showing strength there markets are responding positively, up 150 and with the second round of results, less than an hour, we'll discuss if you're better off investing in the big banks or the smaller ones next are you un-american? if you are a short seller, the

man who runs the new york stock exchange thinks you are. we'll look behind tom's comments coming up. (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings)

are you ready for 3d airport security apparently it's happening. phil is here with the details, phil >> bill, we're going to be waiting to hear what kind of announcement's going to be coming out in the department of homeland security over the next couple of hours about what's reported to be enhanced airport screening that they are going to be pushing not only here in the united states, but also reportedly up to 280 airports around the world, now, these airports cannot immediately put in a 3d carry on bag screener, but remember, just a couple of weeks ago, we were up at rnd facility and manufacturing facility just outside of boston,

and we saw this technology firsthand yesterday american airlines announced that it is buying eight of these machines that it will be deploying at airports in the united states, investing up to $6 million, and what we're seeing is really the transition into more enhanced passenger screening that many people say, well, look, when are we going to get passed the current level of x-ray screeners that we have right now that's the next generation again, there are enhanced security procedures that we're expecting to hear from the department of homeland security within the next couple of hours. really guys, this is the beginning what have you're going to start so see more specialized screening when you talk about people and their carry-on bags at airports. >> so bill, is this going to make the check-in sort of the security process go more quickly or not >> in theory, it should. these machines are designed to move more bags through the system much faster, about twice as fast as the current process

because they can detect potential problems, explosives that could not be detected by the machines right now and in theory, they're supposed to move through the system quicker so you should be able to move through quicker let's see if that actually happens. >> and while you're talking, phil, we're looking at a live picture here of homeland secretary security secretary john kelly confirming that the u.s. will impose enhanced security measures on all u.s.-bound foreign flights i say, good. >> well, the one that says -- >> i don't think anybody's surprised. right. guys, they have telegraphed this over the last several weeks that they are headed in this direction. first the laptop ban was the first indication when they targeted specific airports in the middle east, but, they have made it very clear that what they're seeing through intelligence about the potential for terrorists to use laptops in coordination to potentially detonate a bomb, that worries them and that's why you're looking at

the enhanced security. >> so it looks like it would apply, this is, you know, sort of to recap as this news comes in, applies not just to carry-ones, but also to checked baggage, phil, but it would be for airlines who haven't met enhanced security procedures presumably there are airlines or airports that of that and now reintroduce these items. >> right what's important is we have yet to hear specific details, now some of that, they don't want to the release because they consider that intelligence that they don't want to share wofbl terrorists >> on the other hand, you would think that the airlines at some point, if it's going to mean changes in what we pack or how we pack or how we go through the airports, they will convey that to us. we should point out, this is not an expansion of the laptop ban that is still just for those airports that have already been designated in the middle east.

>> joining us now is marty from who likes the big banks and chris from fig partners who prefers those regional ones, welcome to you both, marty, we've seen quite a nice move here in the big financials of late, you think they've gotten more room to run >> well, beginning of this year, the banks were inflated on deregulation and tax reform. as that kind of played out and the frustration built out the fundamentals that the big banks are going to show midyear. we've given up the excess outperformance, the banks are way behind this year we think the valuation point is good to be able to get the capital acceleration, we're going to get this afternoon, and

double digit earnings growth which you see in the second quarter. >> chris, you're here to make the case for the regionals, and i see on your list, you have bb & t and fifth third, both highly inquisitive, is that one of the reasons you like them? >> actually no, bill, i like the regional stay because there's a real pricing power the banks are very much lagging on deposit costs, so as the fed has tightened several times the past few quarters, deposit costs have barely moved. i think that's very powerful for the banks, particularly the regionals who have market shares around the country and that's going to help their margins and earnings in both second quarter and the second half of the year >> chris, how do you think that would impact the big banks >> it should help the big banks too. >> sorry, go ahead, chris. >> we think it's helpful for banks of all sizes i think your largest banks have the biggest pricing power, i think the large and regionals were both benefitted >> marty, what are you expecting from the stress test results this afternoon i mean, are we going to have any

surprises, negative surprises, do you think, in terms of how much capital is allowed to release? >> i don't think we're going to see any negative surprises this afternoon. if anything, there's a lot of expectation. i think we could even surpass what's out in the marketplace. we think that the last couple years we've seen dividend growth and 11 to 12%, we could see it as high as 18 to 20% this afternoon. we could see as much as a 30 to 40% increase in share repurchased authorization. this is the first time that we've actually seen deregulation come to play, which is the banks below $250 billion, don't have the path to qualitative test anymore. so that pressure taken off gives them a lot of flexibility to ask for more capital deployment.

we think like banks of america or wells fargo and the bigger banks will be nice investments especially in wells fargo can show the first step towards healing past the issues with the path this afternoon. >> and, chris, for you, i mean, we mentioned two of the them, bbmt and you also like sun trust. is that it or do you -- do you just like the concept of regional banks over the big banks in general >> i think there's opportunity for the regionals to trade higher for many, certainly regions financial also fits the bill you can move further down as huntington was mentioned by marty and certainly look at pnc and key. i think the business prospects for second quarter are very strong lone growth seasonally is better, i mentioned margin, i think the expense side should be constrained. we like the fact that credit costs are minimal right now. there aren't issues in the industry which is good for charge-offs. >> all right marty, chris, thank you both

we'll see how those stress test results come out in about 40 minutes here meantime, breaking news on staples, we have details >> hi, i want to point your attention to the screen shares of staples up now as much as 7% on the report from dow jones, quoting sources that private equity firms sycamore partners is near a deal to buy the supplier for more than $10 a share. that would value staples at more than $6.5 billion. according to to the report, the deal was staples could be announced as soon as wednesday again, looking at share was staples popping on this report, now, just about 6.3% guys, back to you. >> i guess dow jones saying it could give more than $10,000 a share. they blocked the emergencier between staples -- >> and office depot. they were talking so it's going to happen here they got a price >> yeah. all right. still, i just -- the other thing i know, they were talking about

maybe changing the business model for staples away from director to consumer and the businesses the business market. >> which was the argument for blocking in the first place when it seems quite obvious in the age of amazon being the biggest player in the room apparently they have quite some control over it. >> looking at the stock price right now. i think the market's buying this, if it's $10 or above, they're keeping below it right now as you can imagine. >> 8% gain seven minutes to go. dow's up around 150. s&p's up 22, nasdaq's up 90. >> when we come back, we'll go live to the nasdaq to see which stocks are moving there and we've got the countdown to the bell coming up aerhi ft ts.

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(baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings) the nasdaq outperforming the dow and the s&p. bertha up in the middle of the action, bertha >> yeah, we're seeing a very nice bounceback for the nasdaq, the chips snapping a two-day losing streak. today, we're seeing some big gains from the likes of cypress

semiconductor upgraded over at barclays, also in video and reports of that, it maybe set to release a new digital currency graphic card, you could read about that on cnbc.com but for the month, chips are big losers down about 2.5%. look at biotech though up for the month, also on pace for their first back to back quarterly gain since 2015. that's where we've seen a big rotation this month. also speaking of health care, we want to watch walgreens, it's up today, ahead of it's earnings tomorrow, the big news that people will be watching for on that conference call is news about the ftc regulatory watch on the deal. expected to announce whether that deal can go forward or not by july 7th. you can see rite aid is up on the news, anticipation that maybe we'll get good news, fred also is going to be buying 1200 of those rite aid stores today up as well back to you.

>> all right bertha, thank you very much. two and a half minutes left as we head to -- i don't know where i got this, i guess i got it from the blue apron thing. dow is up 144. let's review again we go back to the european debt market, the yields there, and i'll show you a three day chart here of the german market. it was, you know, flat on monday, tuesday took off yesterday, after mario made those comments that everybody thought, okay, they're going to start tapering and we had a temper tantrum i call it that rick santelli quibbles with me on that. and today they walked it back, and said no, we've got low rates for the foreseeable future, but look at the response there, not much they're holding at those higher levels for a lot of the european treasuries look at our market same time frame, three days, we had a bit of a response yesterday not nearly the same magnitude and it's holding those higher levels as well.

pretty good rally for equities in the united states today after all of that, european regulators are talking about easier money policy, same thing is going to happen here, i guess, and there's the s&p up smart amount on the day that should be the dow i don't know how -- look at how weird is that, bob it says s&p 500 -- there we go that's better.

broad rally across wall street today the russell 2,000 nearly at a record close here at 1424.92 it's just a point shy from it's all-time closing high. everybody else is off the levels, but still a nice comeback after yesterday's declines, two-thirds of a percent are up 21.453. the nasdaq up nearly 1.5% today to 6234.

weakness in the dollar today, i'll have more on that and crude oil. blue apron it's ipo price tonight. we'll get that number any moment from now later, the biggest banks get graded by the fed to see if they have enough capital to survive an economic shock and to see if they could pay out more. we'll get the results and potentially a flood of dimpblds and buyback announcements. joining me today, michael san toely along with rebecca patterson. welcome to you michael, bill more buyers than sellers today. it is odd to see the strength of this on no employee. >> not much, i think the message from today is -- and it's a consistent one for a while now that the market is label the tough to spook

yesterday was really the third time in three months that the nasdaq had a pretty good jolt to the downside, down more than 1%. air pocket, shake out, but then the market has had a hard time sustaining downside momentum, today was kind of a reversal of that didn't quite recoop all the nasdaq losses of yesterday, but almost so, so to me, it wasn't so much news-driven, it's just that hey, the story hasn't changed, credit markets aren't spooked, we kind of absorbed the central bank speak, and there was a lot of it. without too much trouble, and then the financials, those other areas that have lagged that are participating for the upside >> rebecca, we're looking at the nasdaq, haubed how it's lagging a bit. the names in particular, but today, you know, the comeback story. so are people repositioning for the second half or not here? >> there might be some of that going on, but i agree with mike and that, you know, nothing's really kmanged economy isn't doing great, but it's doing well enough central banks are being gradual. the ecb reconfirmed that today

a short term and fairly brief and limited decline in the market, you see sentiment reverse fairly quickly i think there's still a skiddish investor out there and it doesn't do anything to dent what is an ongoingly widty

story which is the story behind the bull market for the most part all along >> where do you think the fate of the health care bill rests in all of this? the importance you described to them, michael, and the very different reactions if you want toed so say it was yesterday's market or the market in the morning that that bill was post chd had the hospitals stocks up and people since telling us, no, this would be horrible for the hospitals. >> pretty hesitant to attribute yesterday's move down or today's move up, specifically to perceive progress at this particular bill. i think the market has kind of gotten off that treadmill to some degree, they've decided not extrapolate whatever legislative maneuvering today is going to lead potentially to policy down the road i do think though it remains kind of part of the background music of this market that something might get done even if it's not overhauls on health care, overhauls, comprehensively of taxes, it's going to be something that at the margin, is going to be a little bit of a help. >> where rebecca are you guy us focussed how important is 12 that the agendas moving along, even if health care gets put to the

side, something happens on tax and maybe it's not reform and maybe it's just a cut. >> uh-huh. i mean at this point it seems with taxes it's probably going to be late this year, early next year if it happens at all. and i think the good news in a way is that market hopes have been pulled back down to earth and so, there's not a lot of selling and disappointment to be had.

multidecade lows, inflation is under control. ed if and other central banks are going to be gradual. this is a backdrop where you want to stay invested. you need to be aware of valuations, but you don't want to get out of the market >> the one that i would flag is the very short term gallop economic confidence poll, which is really rolled over a little bit and it looks like it's kind of like a lot of things, adverse after the election and giving much of that back. that's kind of -- i don't know, it's not one that's really a benchmark, but the wanting to keep an eye. >> finger in the air what are you saying as you head into the second half of the year and after you've seen the incredible performance i think we've talked with this, health care up 15% year to date technology up something in that range, the nasdaq up 16 or 17% at this point. it's been extraordinary. >> yeah, we're not making any near term changes to our sector recommendations, which continue to be technology, which has been the longest held outperforming rating that we have had. second to that in terms of

duration of outperformance financial, and then health care, because i think health care is a sector that is still sort of housed in the growth indexes, but because of the uncertainty is a place where you can find some value i don't anticipate at least in the near term any changes to those recommendations. >> and meanwhile, rebecca, what are you saying translates into economic momentum or disappointed if matt and others can't get things done i think there sproebl more

upside there we've tilted a little bit more towards europe we have a u.s. overweight, but that's an area i think that's still worth watching. >> the other thing to consider is are we still in a sweet spot where central bankers from the uk, europe, the u.s., and canada all coming out saying get ready for higher rates, we're going to try to get tightening happening here >> it is weaker than it should be for germany i mean, it could go up 20% and it'd still be a bargain for them >> they want to sell more bmws, what can i say >> to that point, it was art saying today, they're scrambling to undo the image that tapering is at hand

seems like we're still on par for that list. quick final word, you also excited about some of the opportunities there? >> yeah, i think mike made a good point about the sweet spot. and i think we are still in one. when you're in a rising rate environment, but you're coming out of a deflation their period and rates are rising from a low base, that's a period of time where you get this positive correlation between interest rates and stock prices, and i think we stay in that. i agree with mike, at some point we probably hit a wall where tighter monetary policy becomes a negative, but i think there's a decent runway ahead of us. >> all right thank you all. good to see you guys liz ann and rebecca patterson here to kick things off today. we're just minutes away from the feds financial reform stress test find out if the banks pass the ski test and weather they'll start increasing them immediately following the results. but first, it's a biotech bet gone wrong up next, our fast take on the eye-popping amount one republican congressman just lost after his biotech investment plunged more than 90%. and we to want hear from you

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so isn't it time our networks did too? introducing america's largest, most reliable 4g lte combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. welcome back breaking news on the martin shkreli trial. we are at the courthouse are details, meg >> reporter: hey kelly, after three full days of the martin shkreli jury selection, we do now have a jury for the trial. we are expecting opening arguments to start any minute now. the courtroom is full. just trying to get in is really impossible just trying to get into the room where the trial is going to take place, there are many people trying to listen to this of course they went through

hundreds of jurors to get down to the jury of 12 plus 6 alternates a lot not committing for six weeks in the summer. still others, as we reported yesterday and the day before, coming in with opinions about martin shkreli they were able to get a jury here, and we are expecting opening arguments. we'll be heading back in bring you any news that coming out. finally a jury, back to you. >> meg, thank you. meg covering all of that for us. and it's time now for fast take this hour. we begin today with a share price collapse of a pharma company whose biggest investor is chris collins shares of inate pharma which figured into tom price's confirmation hearings, mike, are down 92%, that's a paper loss of $17 million. >> and there was scrutiny on collins' purchase, inside purchasing they're buying it. this is a good defense >> do they have moral attitude >> yes, basically just kind of a disclosure thing. >> strange >> i believe mostly at this point.

so, yeah, it's actually kind of a fascinating one, where in this case, and he was really a backer of it. got other investors. it wasn't like i heard something and flipping the stock >> i was shocked to see what a collapse that was. next, boy, am i rooting for this one as well. >> it's like a $50 cab ride. it's kind of an annoying stretch, of course also very densely populated part of the world. >> i would use a much stronger word than annoying to describe -- it took me two and a half hours on the subway back from jfk the other day and that has the option unlike la guardia. >> o'hair does too, there's like a light rail this is the hard stuff. >> we love it in concept, it is it remotely near being fundable, buildable? glon who's got the money for it?

illinois doesn't, chicago doesn't. >> exactly marissa meyer defending travis, calling him a friend and saying, quote, when your company scales that quickly, it's hard, and there are rumors she could replace him. >> there are rumors, i wonder if that's people connecting the dots who's an available free agent in silicon valley and who needs a ceo? but, look, i think there is some empathy toward i mean, ma ris is meyer was in the early days of google, but -- >> stealing quickly. >> early stage companies on the other hand, i mean, we're talking about memos from travis that came under scrutiny as being unappropriate. it -- >> i just wonder if they're looking for a female ceo >> would be. who knows what the reception will be there. >> yeah, we'll see finally european cities are pulling a u-turn on diesel cars and no wonder given how they've polluted the air and the automakers like volkswagen told about that here's what i just can't help

but thinking about this, what if they had gone with petrol all along? >> obviously not as ghood terms of mileage, which has been one of the big attractions of diesel, but yeah, in terms of pollution, maybe would have ended up better. i don't know on a net basis, but really it just shows you how hard to clean diesel problem was that everybody had to cheat. >> why did it have to be diesel? i was in london, and i was there for five years before. it was horrendous. meanwhile in new york city, you've got the clean buses -- there's not a sense -- >> it didn't have to be that way. it was economize and basically because you got better mileage because the taxes make fuel so expensive. >> i know, and you know, again, this is going to be a really hard thing for them to undo. and it's really tragic >> it's tough. >> that's all i have to say about that financial sector has been underperforming since president trump took office. could the latest stress test results which are due out help turn things around that's ahead yesterday we told you about legendary music producer kwinsy

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will welcome back, markets have had a nice run this year, look at that, good figures for the full year. s&p up nine, nasdaq up nearly 16% and according to to the federal reserve, etf's a better driver of that exchange traded funds spent $98 billion buying stocks.

owning nearly 6% of the u.s. stock market, that's the highest level on record with us, here to discuss his new etf, you're part of the problem though, it's not a problem, charles vooertman, this is great to see you >> good to be here back in new york from hawaii >> i didn't realize -- >> tie and everything. tie and everything >> no hawaiian shirt, you know, no legs. >> i say that for where it's appropriate. >> where it's appropriate. >> this is only the second etf you have launched? >> yes and so -- >> so your focus is pretty specific, i mean, it's funny because we talk about etfs, largely, truly passive or just getting market exposure or kind of gimmicky, branding -- >> really, i consider hedge fund in etf clothing. we basically have 100 companies growing free cash flow, using a portion of that free cash flow to reduce the share count. we don't look at buybacks per

se, we look at shares outstanding at the end of the quarter, and we also don't want companies that are borrowing so there's been stories that bye backs are underperforming, but if you separate we're living proof that buybacks based on free cash flow outperform. reduces by 4% to go up by more than that the remaining shares because companies that are growing cash and using a portion

to reduce the share count, you know, do well. >> is the buyback thing as much in fashion overseas as finding these companies doing this >> they're doing more so it's buyback os cur when top management has a bigger stake in the action so, it's like if your company's doing well and you're generating cash and you own a piece of the company through options or whatever, reduce the share count, you own more. so, companies like in europe or whatever that didn't emphasize management owning shares, didn't do much buybacks, but that's changing and so there are many buybacks and we're finding a nice number of companies to choose from. >> one aspect i haven't heard you mention that i think is the way warren buffett framed it, he said i don't have a problem with buybacks, but they need to focus on price in other words, these buybacks should be done when the share surprise trading low, undervalued, and not just because they can >> well, if you could tell me when it's low and when it's high, i will gladly buy low and

sell high at any time. unfortunately, we've discovered that companies that basically use the metric free cash flow as the source of their buybacks, if they're growing crash and they're using a portion of it, the timing is usually all based good to so to speak. as long as they keep growing the cash >> and is free cash flow enough of an agreed upon metric across all companies in terms what have it really -- >> it's the cash -- simply, the design purpose of business, believe it or not is end to up with more cash to get started. unless of course you're elon musk, but -- >> he's not -- >> yeah, higher stock price for something, netflix or something is more important than free cash flow anyway, the free cash flow growth is the -- it's the amount of cash, more cash at the end of the quarter than the start of the quarter. means the company had free cash flow it's that simple. >> let me ask you something, kwinsy jones now branded on etf -- >> yes >> and i imagine this is more the beginning than the end as people realize, i could have an

etf with my name on it too does that worry you as an investor we have seven years of a bull market, and investors are convinced that etfs can never go down they will outperform mutual funds and hedge funds. everything is great. unfortunately, there's no managed money, what happens when there are outflows for index etfs, who's the buyer? >> we're not going to have a financial crisis in our lifetime. >> exactly and mario, god bless him, he throws a little -- runs something up the flag pole and takes it down pretty quick when he sees the reaction of the global -- oh, you're not going to keep printing money forever -- >> charles, great to see you

thank you so much. we love hearing your point of view thank you so much. >> thank you the feds financial stress test results are due out in minutes. we'll bring you the full results right after this break the president of the new york stock exchange making eye opening communities. that's still to come on the closing bell hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness,

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dow up 144, nasdaq up 187, russell up 187 as well but these gains pretty impressive here, about 1.5% for the nasdaq today time now far cnbc news update with sue herrara, sue. >> hi kelly, here's what's happening at this hour everyone, the senate intelligence committee back at work, focussing on russia's efforts to interfere in u.s. and european elections. former undersecretary of state, nicholas burns describing president trump's actions has irresponsible. >> i find is dismaying and objectionalable that president trump continues to deny the undeniable fact that russia launched a major cyber attack against the united states regardless of what party he launched it against. he's done the same thing in europe >> abc says it has reached a

settlement with a south dakota meat producer that filed a $1 billion lawsuit against the network. the suits stem from reports abc did back in 2012, alleging the company's beef products contained pink slime the defamation trial started earlier this month no terms released. looking for cheap gas? the lowest in the country, at $1.49 a gallon this morning. that's it, you're up to date, kelly, back to you >> that is shocking. thank you. let's get to straight to kayla toush in washington, kayla. >> hey kelly, for the first time, the federal reserve has not rejected any capital plans submitted by the 34 banks getting stress tested. the fair did find risk management issues at capital one. it is now required to submit an updated plan within six months or risk it's dividend payments and buybacks getting frozen. the company's levels exceeded

fed's thresholds, but it did once already adjust share hoerld returns before the stress test results were out last thursday american express did the same. one was bronco the threshold the rapid growth in credit card balances and uptick in delinquencies and stress test that included more severe losses for credit cards played a role in this year's assessment. am medical examiner cleared the bar by a thin margin, but senior fed officials say unlike year's past, getting close to the threshold won't be met with a penalty. banks are capitalized and have requested to substantially increase payouts those senior fed officials say banks will be paying close to 100% of their net earnings, kelly, another first since the financial crisis and one that investors in these doc stocks have been waiting for. >> thank you joinings now break it down some more is tom brown here with us at post nine from smooet capital management.

tom, what do you think what happens now >> i think what happens is the shareholder, we get some money back the form of share repurchases, and you know, the industry's really gone from being where the regulators were concerned about being undercapitalized to now at the point where they're just well overcapitalized, it's crazy. >> bill, who are you looking at in particular here >> yeah, i'm just watching for -- >> that it's -- it's a company that has just been so out of favor for so long, if you could normalize the ratio from say three years from now and see sizable dimpbd increases, it'll be fun to sit there in place like we like to do >> that comes up quite a bit, michael. >> as citi does as well. my question would be, were these results so well telegraphed that there's going -- that we essentially priced a lot of this in we're talking about returning an

a. capital that they have in excess right now, but then, who knows after how many years if it's just going to be whatever their payout ratio out of earnings is, has the market adjusted for all of this >> a lot of good news built in so the consensus expectation was that bank of america would raise it's dimpbd by 50, 50% that's a pretty high expectation. >> and the reason why it's important to mention that is because we're going to find out they should start dribbling out soon >> i think something important to consider is this might have been the most hated industry sector of my career. i'm 37 years in the business and think about it, first they had all of their self-induced wounds, then you had a serious of politicians and regulators running around and closed barn doors after the animals were out, and then you have to remember and this idea that

somehow dodd frank or skrut nis regulators or powerful politicians can eliminate the business cycles is. >> jamie diamond will defend this and say yeah, we stress test ourselves all the time. so you know, maybe we've gone too far, maybe we haven't. i mean, sheilabearer was concerned about it some of the leverage ratios and, you know, where those might be left after all of this. >> well, think about this. the federal reserve household debt service ratio is bumping along a five year low for 37 years. so, we don't have any idea what these banks could make if we actually did print 3% gdp growth for a year or if millennials buy houses and buy couches and televisions and they use their american express card or their bank of america visa or whatever so, it's very exciting and since the torture lasted eight years it's unlikely it's all going to be washed up in a couple of years. >> kayla, do you see anything coming out as of yet, now we

wait for each individual bank to tell us exactly what the plans are. >> kelly usually comes out fast and furious, and we are man monitoring, i have one eye on the screen and one on the television, but one notable difference between this year's stress test and year's past that i've covered is when fed officials have been talking about the fact that banks are now asking for significant increases for their level of payout and they're going to pay out close to 100% of earnings, that is not something that has generally been either remarked upon in these conference calls or it's clear if you step back to 30,000 foot level, and that is an administration and a federal reserve that is looking friendly upon shareholder returns right now. >> and we're showing morgan stanley there, it's moving a little bit higher perhaps we have more. >> banks are responding to these favorable stress tests let's just start with morgan

stanley,le to raise by 25% to 25 cents, the company also announcing a $5 billion buyback. take a look at wells fargo, also in focus to raise it's dimpbd by 3% to 39 cents, wells fargo announcing $11.5 billion buyback and to your point, state street, another stock and focus here to raise it's dimpbd by 11% to 42 cents. state street also announcing a $11.4 billion buyback. we're just going through all the reaction here, kelly, for now, back to you. >> thank you >> i'm happy with that problem i hope his ownership continues to rise and rise >> what do you make of state street that one doesn't get talked about quite as much. 11% dimpbd hike.

>> great company, great position, along with northern trust and bank of new york really dominate the custody business worldwide and they've been held by from their capital release, and so i think it's a little bit of a catch-up. >> they've also been really great stocks lately. so you had state street, northern trust, new york as well to some degree making highs recently i think it's basically a capital markets play, they're not pure banks traditionally. >> kayla, you know, her point is well taken i mean, this is more than just okay, the reason they're doing the buyback, they're being told in effect -- see back in -- let's use the prior eras, it was totally common for banks to pay 50% of the profits out in dimpbds. you don't need a new branch every year, there's not a lot of dmal has to be reinvested, in fact, a lot of these folks are reducing their footprint and using technology to interact with their new customers and so therefore, cost structures going down, so, what

do they need this capital for? it's just bloegt the system. and you know -- >> we'll definitely circle back to that. in fact american express, one of the names it was looking a little bit weaker as mentioned, they cleared by a thinner margin, let's get back to this >> capital returns clearly a big trend here american express to raise it's dimpbd by 9% to 35 cents a share, also announcing a $4.4 billion buyback. you can see the stock is responding favorably to this news up just about # % here after hours. also look at fifth third, by 14%. regions financial by raising it's dimpbd by 29% so the results just trickling in here, kelly. what is your message about whether that's appropriate or not? >> my message, this stress test is crazy we come up with this draconian

economic assumptions, we are arbitrarily have a 5% floor, they also pass citi pass wad 10.7% capital ratio compared to the 5% floor they have to pay back more than # 00% of theirearnings >> but explain that for a second. >> just to run down the excess capitol. >> and that's appropriate? there's no reason why they should hold on to a higher amount than, you know, than what is in these tests. >> no because the environment 5%, at 10.7, hold on, how much do we need citi is a separate case, they generate regulatory capital. because of their deferred tax asset. i hope when we find the results for citi, that they've paid out 120% of the expected earn pgs. >> kelly, a way to think about it might be, think about all the money that gets released if they cut the tax on repay treuating money from outside the country, this is, this is money that's being repay treuated from inside

the country. >> but is it going to be -- that's a great way to put it one time effect, in other words, is this the banks playing catch up or catch down or should we expect for a year after year now that the payout ratios are that high >> from the depressed levels of earnings of last four or five years to more normalized earnings and again, you know from talking to us in the past, we believe that the ageing and the millennials is going to be very positive for the financial institutions because they'll just do a the love things at age 35 that they didn't do at age 28 you get velocity of money picking up, and they get teeny nicks out of almost everything that happens and there is your leverage on top of that. >> is there any concern about all of this good news and people getting excited about the stocks at the moment we are in the credit cycle not that it's going to fall apart quickly and the stress test has stringent assumptions about what they can withstand, but on the consumer and corporate side, doesn't get any better than this in terms of credit losses. >> well, mike, the household debt service rash joe bumping

along 37 year lows for years >> let me point out that citigroups looks like a large buyback. >> yeah, impressive move to double it's dimpbds. a raise by 100% to 32 cents a share. citigroup also announcing a $15.6 billion buyback. so a clear indication in how they're responding to this favorable stress test. the second round of it, we're looking at shares of citigroup kelly up about 1.2%, back to you. >> kayla, what do you think? is it party time >> well, people thought it was party time, kelly, last year when citigroup had $18.6 billion buyback, clearly these banks are all stockpiling, they feel that they can give this money back to shareholders and citigroup was a bank was remembering itself in the federal reserves cross hairs and one of those banks that they

found objections with the plan and they had to keep someone from retiring to actually manage that process it illustrates how far a lot of these companies have come. i want to revisit american express too because the stock you saw, it got a big boost on the back of that 9% increase to it's dimpbd, but, the assumption is that american express wanted to do more it had to adjust it's plan in order to meet the feds threshold, so the fact that the stock is up about 1%, does make you wonder, how much more did the company want to be able to give back to shareholders, but had to basically tampa down those exemptions in order to clear the bar here >> and kayla, thank you, maybe we can put up a board here to show the price action of citigroup, morgan stanley, american express and a couple others according to rich peterson, it's the second biggest since 2006, tom. so you're saying maybe this is more of the beginning of what could be coming from these banks here for investors >> i think it's going to be

several years because we're now going to start to bring down the capital ratios that were brought well above the next three years is a catch-up. >> the new citigroup is 2 pkd yielder at today's closing price. that'll kind of go down initially as the stock goes up, then up as they're able to raise. >> 2%, it's not much to sneeze at compared with a zero >> competition for overpriced stables. >> wait, explain that a little bit. >> staple stocks >> yeah. >> not staple the the company -- >> no, they'll be 24 times earnings to get a 3% dimpbds out of a staple company that's not growing. these banks are going to grow. it's inevitable. even if we stay at 2% economic growth, you know, off and on for the next ten years, these businesses are going to have -- they got a lot bigger. they got bigger. tom -- he owns citigroup, i

don't. i own american express, i don't know if he does, and so you heard american express, you know, they had all the advertisements for the nba finals and all the games and they're reasserting themselves as the 5% charge guys, you've got o to love it and of course they want to pay more dimpbds everybody else charges 2.5, they should get to pay me twice as much we have bank of new york >> looets look at bank of new york the bank following suit rising it's dimpbd by 26% tls also expected to increase it's -- excuse me, $2.6 billion buyback also being announced by the bank as well, shares are unchanged, switching focus to bbnt, the company raising it's dimpbd by 10% to 33 cents a share and also announcing a $1.88 billion buyback. and if we have a second, look at

key corpse also announcing it plans to raise dimpbds by 5% >> thank you the share price reaction is muted. you know, we're talking about 1% increases for -- and i think citi's case maybe the biggest ever a lot was priced in, correct, tom? >> right and i'm happy based on the action today that before the announcements were made that the stocks are actually up any on the -- >> on the actual news. and in the case, we haven't heard from jpmorgan yet, and wells fargo, american express, this is the highest that american express stock has been since they divorced costco which of course is a mortal sin. you know to. >> i'm impressed you stuck with them. >> we started buying when they

fell into the '70s because of the divorce, and we're close to cost toe, so, i mean, it was bad, but it wasn't the end of the world. they've only been in business since 1855 >> yeah, they used to deliver mail, i think among other things tom, quickly, when people wake up and read the headlines tomorrow and say wait a minute -- we remember the financial crisis well, why should it be okay for banks to pay out more than they are earning. why okay for only 5% capital levels instead of 10 k37. >> because their capital is 2.5 times what it was when we started the crisis so we have done a better job of risk management, and we've significantly built up the capital basis. >> that's right. >> you got that? >> oh yes, and elizabeth warren still a senator. >> one final piece, and i wonder if it's going to come around are we going to see a round of true mna come around, tom, or is that done? >> the four large banks are done >> right >> and then, the banks between number five and number 25, what

they really have found is we can grow our customer base without paying twice book for somebody else's customer base >> yeah. >> and so i don't think you're going to see among the top 25 banks, i don't think they're going to be a big part of the growth strategy. >> the mote got bigger the mote got bigger, and that's what everybody forgets, when bad things happen to an industry you kind have to ask, did the mote get bigger? and these companies, the mote got bigger >> and by the way, bank of america was up 2%, it hasn't given us the details yet we're going to take a quick break here try to get more on the stress test results when we do come right back by the way, the tom farley called short sellers yesterday there was a little context around that statement. we'll also bring that to you next and still ahead, forget about regular driverless cars gm has new super cruise control what makes it so super, coming up (baby crying)

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>> the banks are releasing their response and it includes a lot of dividend hikes and big buy backs. we have more breaking new with kayla. >> we are getting a release from capital one that the fed found issues with on risk management and what they called one of the most material businesses they have to recommit and capital one appears to be more conservative with what it is asking the fed for it will maintain the 40 cent per quarter dividend and go forward with a $1.85 million buy back program between now and the of 2018 this time last year the bank requested and was approved for a

$2.5 billion buy back program. the bank tempered expectations in terms of the way this year's process and stress test process went it will recommit the claim by the end of the year and no other comment in the press release to alleviate the concerns and it is as you can see be more conservative and the stock is down a little bit more than 1% >> you mentioned these were tougher on the card companies? >> senior officials said not only did that play a role in the stress test scenarios, but have seen record balances, over a trillion dollars and delinquencies going up slightly and credit card companies report that when they come out with earnings it does appear that the fed is taking a closer eye on these companies specifically we still don't know what that material business at the fed alludes to and perhaps we will get more detail from the company

going forward. >> shares down about 1%. >> sun trust announcing they are going to raise the dividend about 40 cents a share a $1.32 billion buy back will rogers is saying consistent execution combined with the strong capital position enabled us to increase the return of the capital. let's take a look at p and c financial saying they are going to raise the dividend to 75 cents a share and a $2.7 billion buy back switching focus to key corp, i top the recap and take a look. the stock was responding favorably to their announcement. dividend hike to 11 cents a share and $800 million buy back. lastly let's take a look and end with cit group 16 cents a share and a $225 million buy back

back to you. >> thank you i will mention i was just crossing the screen and a huge buy back from jpmorgan $19.5 million. >> $320 billion market cap company. obviously it can have that capacity for a big buy back. with the dividend increase, it will bring it up to a 2.5% yield. the banks are trying to get their dividends up to a point where they have a premium yield. as the guys mentioned it's positive that is fully expected. >> the shares of about 45% probably under two >> that puts them a little bit higher citigroup raised by 100% as we mentioned, the bac shares are moving up before this was out and they are building on that a little bit.

>> obviously i think the messages are going to be as fully aggressive as they are permitted to be when it comes to returning capital. that was largely expect and once you get the confirmation because there is some play in the decisions to how much to pay out and buy back >> the question that goes unanswered is whether they can put that in a leadership position >> it will be a lot more about the macro and the yield behavior at this point. 2% economic growth is good enough, but not what will propel the guys i have been fighting the idea that this was an orphaned group of stocks for many years they are trailing on the five-year basis. i'm on board with the fact that they'll participate assuming the yields behave. >> these results are coming across and you have the shares in the 1% to 2% range. still ahead of where we might

have been. anything that stands out to you than as we mentioned, capital one, american express, a little more severe that they were testing does that spell opportunity >> yeah. i think it's a reminder that that is the front edge of how the credit situation starts to get ragged it's not so much a crisis, but it is on revolving losses and the reserves they have to take capital one might be an auto not american express they are on the leading edge of where that will take us when it's not so great. farley had controversial comments we will give you the whole story after this (baby crying)

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>> welcome back. new york stock exchange president tom farley testified and had this to say about short selling. >> i have an emotional reaction. it almost feels icky and unamerican you are betting against a company. the data-driven reality as you get into the numbers allowing short selling in the economy is good for capital formation

the real issue that our companies have let's have a little more transparent. >> if you see the headlines where they call it icky, they are not fair he was setting it up to make a point about it >> he said that's his emotional reaction there is a reflection that said what are the guys up to? clearly the sellers are significant flyers >> we are at the point where we know enough about it and understand enough now that it's okay for there to be disclosure. it still presents some kind of danger >> there is a question as to whether it is fully justified. it's about how they get treated by companies

the trading revenues are the best ever. >> a busy hour that does it for closing bell. fast money begins right now. >> fast money starts now our traders on the desk president trump lashing out at amazon today we will tell you what he said that has tech investors so worried. blue apron is pricing their public offering after cutting the price range earlier today. what it could mean for the debut tomorrow we start off with th