going against what has usually been the case, which is that gas price goes up in the summer. >> and mine quickly is amelia earhart. i hope they confirm it's a picture. it's a sad end, but at least closed the mystery this is an incredible, incredible story i'm sure "closing bell" will have more on the story thanks for watching power lunch. closing bell starts right now. hello everybody, welcome to the "closing bell," happy july 4th, we're back to work here >> i was asking a friend, is this boxing day in the uk? >> that's date after christmas >> i no e, but i'm just wondering how they commemorate this holiday >> well, they were calling this the original brexit. >> that's it i did see that i like that. i'm bill griffith, tesla posting it's worst day in the markets since february after disappointing delivery numbers and some rather harsh words from

goldman sachs. some pretty harsh words. we have details on that coming up here. >> reversal that continued from the session on monday. really tech has beenleading the marke again today, but underperforming over the last month. we have a debate on which names in the sector are worth buying right now. >> and president trump criticizing china for it's economic relationship with north korea in the wake of north korea launching that icbm over the weekend. we're going to take a look at what the president's rhetoric could mean for u.s. companies doing business in china. that's momentarily but first, you saw it here on cnbc the fed releasing minutes from it's most recent meeting in june there seems to be some debate among the fed members about when the fed will actually start reducing assets on it's balance sheet. joining our closing bell exchange, we have with us, peter from the lindsey group steve from stewart frankel, and our own rick santelli is in chicago.

with a fine tooth comb no real surprises. we do see disagreement there about future fed policy as it pertains to the balance sheet, yes? >> i think everyone in the committee wants to reduce the size, it's just a matter of when the timing is. we have to remember that backdrop leaves in february. i have a feeling that they want to get this process started sooner rather than later to give her some time to hand baton off to whoever replaces her assuming she's not going to be there. most importantly is none of them seem really worried about the process. they think by communicating to us what they're going to do, how that is going to limit any impact and i think that is going to really be the market issue and whether that's going to be the case or not. i think it's not going to be the case i think it's disruptive regardless of how many times they tell us they're going to do it >> steve, you agree? >> i do agree. and i do think they're doing what they normally do, just floating that trial balloon, but, if you have gdp or look at any other economic data points

that have been weakening or perceived weakness i don't know how you could deal with the backdrop. there is no inflation. so you're talking about a balance sheet that at the time will probably be two trillion. when you start to really look at that on a monthly basis, starting from ten billion, ratcheting up to 60 billion, how is that not disruptive with the backdrop in the market but i think the market hasn't absorbed it -- >> i might take issue with your characterization of the slowing here look at the pmi of the data we just put out it was strong. >> okay. so you have one offs here and there i think it's just in a precarious spot that they put themselves in. >> rick, did i spot a slight, i don't to want call it a steepening of the yield curve there after the fed minutes came out. >> you know, it looked like -- >> strong word. >> for the most part -- yeah, it reversed out, but you're

absolutely correct, there has been more speedening than flattening since the 26th when everything started when every ten year, all throughout europe and the u.s. was up at least 20 basis points from that point in time, from that monday close. so, i think it's significant, as far as the balance sheet goes. nobody knows how it's going to turn out we can all talk and nobody can discuss these issues better than peter, but we just don't know. and we also don't know if their words are going to lead us to actions. but i certainly do believe that if you cut away through things that i don't think matter anymore, data dependent, inflation, i think they're nervous about asset bubbles. and i think they ought to be, and they have a great track record in history creating them. they have a poor track record trying to prevent them, and i do think that that's the issue. and how that affects all the global dynamics of other central banks, who knows, but i could tell you this, i would think that over the next few months,

no matter what central banks do, i think there's a propensity for interest rates and equities to continue to rise we could debate to the breath and extent of velocity, i think that dynamic remains in place. >> in that vein, peter, i was going to ask you that very thing. do you think like steve said the fed's at risk of tight sboong a slowdown, or do you think to rick's point, they're not doing enough to tighten against this environment? >> well, there's no question they're tightening into a slowing fizz of the expansion. i mean, 1.6% gdp growth in 2016 and decide to ramp up the rate hike cycle historically, they lead to recession and i have no reason

to think this is going to end anywhere different >> hey, steve, we should acknowledge the action of the oil market, and that's a highlight that so much for that eight game win streak that they had. they gave much of it back today with the 4% decline here, what do you make of that? >> right, if you look back, it was up 10% from june 21st, it bounced after that key level $42. it didn't get down a level traded down to 42.53, but bill, rotation if you look at the oil markets right now, you know, if you look at earnings going forward, the problem is, is that all of this earnings growth is coming from the energy sector. if we don't see oil stabilize, probably in the '50s, we're going to have to take a big chunk out of that earnings going forward which could wreck the market as we see it right now. so, look at oil, look at rotation, if they continue to go in the back half of the year, you don't need oil to skyrocket to 85. you need it to stabilize around

$50 and that'll keep the market in place >> and it's not just crude, natural gas down nearly 4% down today, chesapeake, down nearly 8. it's ugly. >> they increased they've production of liquefied natural gas. thank you all. appreciate your thoughts on today's market action. good to see you. now president trump seeming to lose patience with china after north korea tested an intercontinental ballistic missile. trade between china and north korea grew almost 30%, so much for china working with us, but had to give it a try let's bring in michelle for a closer look at some of these economic ties between china and north korea, michelle. >> kelly, the economic ties are deep, that's why u.s. diplomats insisted the country with the most power to change north korea is china china has tremendous leverage over north korea first because of trade nearly 90% of north korea's imports and expert goes to china and almost all of north korea's oil comes from china

china's first quarter exports to north korea up 54% over last year so china has plenty of direct leverage over north korea. also has indirect leverage what i'm holding up here, this is an annual report from the u.n. security council which says a team of investigators that do nothing but investigate compliance with the u.n. sanctions on north korea this report is the most recent, it was out in february it shows that chinese companies provide the financial infrastructure that make north korea's weapons program possible i could show you many, many examples, in 326 pages, it appears more than half a dozen china-related front companies openly help north korea transfer money, provide financing for foreign investors or help the country export their arms which is a big source of revenue for them one example were marshal arts in pyongyang, it serves foreign clients with transfer services and the chinese currency investigators found guidelines

issued in both chinese and english from the bank on how to transfer chinese wan and this is a plaque on the door, pictured here in korean and chinese, makes sense, and also english for foreigners the list goes on and on, question is, why doesn't china do more? guys, a lot of people say it's because they're much more interested in keeping the korean peninsula divided rather than dealing with north korea >> and it struck me, the wall street journal today is calling for regime change in north korea. which seems like a significant development given the history that this country's had with regime change and perhaps what they view as lack of any real options. >> yeah, absolutely. i think it's because of the level of risk is now higher in you think they absolutely do have a missile that could reach the u.s., particularly alaska. are we going to see the chinese enforce the sanctions they claim as being members of the united nations? >> all right something we'll ponder here in a moment thank you, michelle. very interesting

so if you're a u.s. company doing business in china, should you be concerned with all of that joining us right now, sandra from beyond global first of all, with all that michelle has laid out for us right now, clearly china is playing both sides of the trade here what does that mean for u.s. companies trying to do business over there, do you think >> well, u.s. companies need to be concerned because really the administration hasn't demonstrated consistent thought through strategy i think the players here and their interests have been pretty clear so that china would not be on the u.s.'s side without any doubt that was clear from the beginning, but i think u.s. ceos has been clear to them that trump would be very unpredictable, it was clear earlier this year, even there ceos were concerned.

>> your group has a long history of trade between china and iowa, what direct impact have you seen thus far from the way that the trump administration is trying to handle the north korea threat >> ever since the trump administration took office, when we talked to our clients over in china, there has been a roller coaster ride, at first people were really concerned, and, you know, for possible trade war and then after the mar-a-lago summit, things are looking very bright and with the 100 day plan, a lot of our clients are relieved and they are all talking about the possible trade war seems unlikely understand there have been new development this week, but the sense is that when we talked to our clients in china, they felt like, you know, the trump administration is setting the stage and they're wanting to enter into a new rounds of negotiation. maybe things are not progressing as fast as he would like

so they're patiently waiting and hoping that two sides will sit down again and talk among themselves and figure out what the best solution for both sides. >> we were talking monday, even as the u.s. is looking to china for help on the north korea situation, on the other hand, we have sanctioned one of their banks, we -- there's been what the chinese consider to be an encroachment in the south china sea by u.s. vessels. what do you think president xi is going to be telling president trump when they get to hamberg this week? what's that discussion going to be like do you think >> well, one thing is for sure, if trump goes beyond the bluster and actually institutes concrete measures, the chinese will retaliate. and i would like to draw your attention to the fact that steve bannon last year had said that the likelihood of war with the u.s. involvement and war in the chinese south china sea was very likely so, the fact that there would be

possible escalation, the greatest concern is for u.s. companies who actually produce and sell within china. retaliatory measures could be more subtle or they could be more drastic, like price dumping and flooding the markets with goods or restricting market assets so i think that, you know, it would be the u.s.'s interest to dial back the rhetoric and try to be a little more diplomatic it doesn't help to antagonize such a big player as china, the interest of china and the u.s. are just not aligned in this respect when it comes to north korea. >> and well, you know, made a good point a moment ago which is the avenue for, you know, it's not just america's responsibility, it's just that we are their biggest target, if you will, and we are the ones seen as mainly doing something about it especially with regard to china. so if the u.s. moves forward and we act alone, does that mean there could be risk that u.s. companies lose business in china

to say european rivals or mexican ones or you name it? >> yes absolutely i thinkwe can already see that u.s. ceos are more reluctant to take risks, make assessments, they take more of the wait and see approach and european companies are all too happy to move into this vacuum and take over market share. they have their own concerns, for instance, the taking over of know how, say german companies are strong in engineering for instance, they just sold a huge robotics company there and when german companies go to china, typically what china tries to do, they don't say we want to steal your secrets, but if we give you the land, the options, but you have to disclose your trade secrets. >> lee, what kind of -- do you trade with china the reason i ask, are you likely to see tariffs imposed what do you think that would do to the trade relationship? >> oh, trade in agricultural

products from seed to equipment. well, at this point it's really hard to tell, earlier on, several months ago, everybody was talking about that possible trade war. we did entertain the idea if that happened, we might see a tariff being posed on some of the good that we're exporting to china. having said that, and giving all of this tension that is going on right now, our governor actually is taking a all agriculture trade delegation to china, just in about, you know, two weeks from now and i think as president xi pointed out, the u.s. china relationship is kind of like a large vessel selling on the ocean. and there are storms from time to time that my impact, how smooth the ride is, but at the end of the day, economic ties and collaborations and agriculture trade among many other products, you know, in terms of our trading relationship is really the battle of stone for this ship to make sure that it won't go forward and go through the right

direction. and i think we're in the perfect example right now getting all of this situation -- and i absolute ly believe there's too much that we need two sides to come together and have a very constructive conversation to tackle all the issues. >> thank you both for joining us today. we're heading to the close here we've got 44 minutes left in the trading session here mixed day. the dow was lower, now it's up just a point s&p is up two points and the nasdaq's come back label the today. >> not a ton of movement >> and oil went down big today, down 4%. >> that's the biggie for sure. tesla shares are slumping. we will look at how much trouble that is headed in the model three release. apple, alphabeting with all underperforming, you know that coming up, we're going to debate whether now is the time to buy

those laggards or if more selling is on the horizon. we to want hear from you you can contact the show via twitter, facebook, send us the e-mail sissorwibcfit g cn, rsin bune wldde

no follow through. the big rally we saw on monday, unless you count the nasdaq, it's up 36 points, the dow struggling to remain positive. the s&p's up about 3 and the russell is down nine points at this hour. and autoparts retailers are getting hit hard today just look at o'reilly automotive

it's on pace for it's worst day in history, down 18% right now company reported a miss on second quarter same store sales. rising only 1.7% compared to guidance of three to five percent growth companies cites head winds from a mild winter and overall weak consumer demand for that miss. it's taking other companies with it, advanced autoparts 11%, autozone down 9% >> stocks were already so skiddish now this kind of bad news is why you're seeing declines, but for the entire space look, whether they're warranted, time will tell we know that shifting economics of the whole thing building out bigger fleets to service self-driving car type fleets going forward, but that's all so far in the future that if you stick to just what they said about the quarter, you have to wonder if people are overselling it >> they have a double whammy on them right now, they're not just in the automotive, but retail as well >> exactly

>> both are struggling tesla one of the worst performers today last check, down 6%, weak deliveries in the first half of the year let's get to phil with more details. >> kelly right now tesla is having the worst day since may, why? let's look at the companies that the company announced after the close of trading on monday might have been lost over the holiday they reported sales that were frankly lackluster in the opinion of many people total of 22,000, just over 22,000 vehicles delivered. there you see the breakdown between the model s and x. the question has been raised by goldman sachs today, are sales of the model s and x plateauing. look at their sales, each of the last four quarters, and you can see it's been between 22 and 25,000 vehicles, and goldman sachs out with a note today saying you know what, we do think that demand for the s and the x are plateauing, and if you add in the fact that you might see a slower than expected ramp-up in the model 3, which will start in the second half of this year, then perhaps you

could see margins coming under pressure and that's one reason they cut the target price for tesla shares down to $180. tesla has not given full year guidance in terms of deliveries this year. it did say that it expects to deliver as many model s and x in the second half as it delivered in the first half. so, you know, put that together, you're looking at about 95,000 vehicles we don't know how many they expect to deliver of the model 3. we still do not have full year guidance from tesla, but guys, we do know that in 2018, they are still sticking with their guidance of building a half million vehicles so we're looking at a big ramp-up in production over the next, you know, 12 to 18 months. >> so if they've hit a peek in demand for those high dollar cars, you know, the high price points, probably makes sense for them to go for the lower price that's smart on elon musk's strategy there, right? >> they're building out their portfolio. look, they've made it clear they

need to build out the portfolio after this you're going to have the model y which will be sort of a crossover utility vehicle, think of a smaller utility vehicle. they've talked about building a pickup truck at some point so you are seeing what you would see with any automaker that they are going to build out that portfolio, and it makes sense to come up with the model three which is the mass market entry it's going to have a base price, somewhere around $35,000 they have given a final base price yet, but ultimately, the ones delivered, probably are going to sell for anywhere between high 40s and low 50s once people get them equipped with everything they want inside of them. we are really in that period, guys, where we'll see what kind of demand is there and we'll see what the margins are once we see the ramp-up in deliveries of the model 3. >> 6% drop for tesla which is still about 70 incompetent year, phil i wanted to ask you while you're here, what happened with the autoparts dealers today? are they being amazoned? >> no, i think it's more than amazon i think people like to look at

amazon and say, well look, they're shipping parts now, therefore nobody's going to go to autozone anymore. do you think the person's whose battery dies is thinking, i'm going to amazon, no, they're not getting that shipped to them they're still going to go immediately down to the autozone store. i think there are a number of factors here, one factor that's not getting enough attention, remember, if you go back stoechb nine years right when the recession was hitting, you saw a real drop off in sales of new vehicles those vehicles are now seven to nine years old, that's the sweet spot of the market for the autoparts retailers, so you don't have as many vehicles out there and as many perhaps going in one factor that is perhaps overlooked >> that's interesting. >> yeah. i agree. that's why you are where you are, flil. >> thank you >> see you later we have 35 minutes to go until the close. slight decline to the dow, the nasdaq goes significantly higher by half a percent today, up 33, the russ sl lower.

>> it is not your imagination, ceo shake-ups are on the rise and more are starting to look over their shoulders wondering if they could be next. we'll talk about that coming up. and later, we'll look at now north korea's testing of that icbm couldmpt fee oc iacdensstks here in the u.s. stay with us

quick look at the movers in today's market action. one of the worst performing financial stocks today is capitol one. after what was downgraded that

stock to underperform from neutral and slashed it's price target to $80 from 49, it's trading at 82 and change right now. the analyst citing recent underperformance and capital return plans meanwhile, credit card processer vantive after announcing terms to buy world pay for $10 ball. big deal there, jpmorgan was interested in world pay, but announce ld it would not be making a bid of it's own payment providers, paypal and square has been seeing strong gains after that deal was revealed world pay is the largest payment processer in the uk. >> yeah, might not be a household name, but they're effectively trying to build a system where they run the payment system without having to pay the toll to a lot of the incumbent players. if jpmorgan wants a piece of that action, may be why they expressed interest one of the most interesting, if under the radar parts of the financial system >> i agree i mean, it's highly competitive

right now. >> yeah, and a sign maybe jp morgan is back on that we'll talk more about that later. job security seems to be getting more unstable. the wall street journal today highlighting several high profile ceo departures announced just last month. among them, travis, jeff, sally smith, john, and tim this is mounting pressure from the board room and wall street seems to be making the top job more challenge, but if you can keep your job as a ceo, well, that pay may be actually even stronger than it looks from 2015 data, the average pay of 500 highest paid ceos in the u.s.s was $17 million. that's fair value estimates, stock-based pay. realized take home pay including realized gains was an average of about $33 million. this apparently, their pay bill has been underreported since 2006 >> on that one, i mean, we've gone through trends of the past where ceos demanded pay in cash

because the stock market was underperforming, and then after a while, they gave them stock options -- >> to align interests. >> reporter: right, and then the stock market took off and complained maybe they were being overpaid >> value just made the point, there needs to be more clear disclosure in the tables about what the incentives are for executive pay and what the actual payout is and even the most sophisticated investors can't figure it out. >> as for tenture of ceos these days and the number of exits this year, do you notice how when they leave most often they say well this was all part of the plan how many ceos -- >> this is my long announced departure. >> travis aside, the rest of them all pretty much for the post part -- >> this is new news. >> yeah, this was all part of the plan >> i told you i'd retire at 63 and a quarter. >> ceo jobs should be hard >> yeah. >> that's a very important job, it should be difficult

you should constantly be concerned about your job and performance because it's that important. >> amen. >> there you are >> time for cnbc news update with sue herrara, hey sue. >> hi bill, hi kelly, here's what's happening at this this hour moments ago, u.n. ambassador nikki haley did not mince words about north korea's intercontinental ballistic missile launch as she addressed a special session of the security council just moments ago. >> their launch was not only dangerous, but reckless, and irresponsible. it showed that north korea does not want to be part of a peaceful world >> the water is finally back on at kansas city international's terminal b following a water main break it took 13 hours to get service restored in the meantime, travelers were forced to use porter potties and by those expensive airport store water bottles. and finally, could your sense of smell make you fat?

look at those guys researchers gave two mice the same high fat diet but the one on the right had it's sense of smell eliminated and as you can see there, it's about half of the size because it didn't gain weight and apparently did not eat as much makes perfect sense if it smells good, you teet, but whatever that's the news update they needed a study for that that's the news update this hour, back downtown to you guys, kell >> absolutely cruel, what do you think? can you imagine? >> i've cooked and it's so true. not only visual, but it's also sensory. >> absolutely. thank you, sue we'll see you next hour, sue herrara, we're here on the floor to talk about the markets today. interestingly despite a huge drop in o'reilly and the automotive spaes and tesla today, the nasdaq having a good session. >> they are. part of the thing is just a bounce back because some of the big names really got kind of beat up the last couple of weeks, and so i think a little bit of it's an opportunity, right? people going on a buying -- like a shopping bing, stuff's on

sale we didn't get anything really new, other than, i don't think september's on the table so much as a rate hike anymore they've -- i think they've clearly moved that to december and so the issue about the balance sheet shrinkage, september or nothing not i think there's some conversation going on there. >> and important as that is, i'm also wondering how is the market responding to the threat of north korea, the icbm launch, i know it's difficult to discount in realtime. >> it is, but it's interesting because a couple months ago when it happened, you could feel the nervousness in the market. today, it doesn't feel nervous at all and i'm not sure if that's because it's a vacation week and low volume and less people around and not many people making the move. i think it's something to be concerned about. and i think you'll see the market react based on kind of what we just heard nikki haley say. then the market may get a little bit more anty about it >> quickly with the move lower in oil today, i mean, that -- in a way i'm surprised it's not weighing more heavily just because it's been the pattern so far -- >> but i think there's a sense

that oil -- there's no reason for oil to be at 50 or $60 a barrel i think it's clear that the non-opec producers are going to fill that void and that the world is changing. right, technology changing, not only the way oil's produced, the way they get it out of ground, they're bringing the cost down, and then the world is moving from an oil-based -- look what's happening in terms of solar power, electric cars and all that stuff and came out and said it's going to be 2019 social security going to be no more fully gas, electric, hybrid, it's going to make a difference. >> maybe it is good news for us. >> it is good news >> kenny, thank you. kenny, phil. >> i'm still trying to figure out how they get rid of the mouse's sense of smell >> i don't want to know. >> i really don't want to know heading to the close here, 26 minutes left in the trading session with the dow up five points tech stocks have been leading higher today, but they have significantly underperformed over the last month. and coming up, we'll debate whether now may be the time to get back into tech if you've

been out of it and as kenny mentioned, it's going to abandon traditional engines internal kbungs engines and go electric within two years. find out if this is the future of the automotive industry later on "closing bell."

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a federal judge is now ordering the so-called pharma bro, martin slelly to stop commenting on his security's fraud trial. meg terrell is outside the court house there in brooklyn with the very latest, meg >> reporter: hey, bill well that order from the federal judge coming this morning in response to requests from prosecutors monday evening seeking to bar him from talking about the trial at all outside the courtroom. this of course happened after he came into a room full of reporters on friday from a recess and commented on the case the judge saying, it's not a full gag order, saying outside and around the courthouse, she has ordered him not to comment on evidence or witnesses in the trial, citing the possibility for jurors to overhear him now the defense had opposed that motion citing his first amendment rights as well as

council's need to respond to terribly prejudicial press coverage, concluding in a response his comments are the somewhat natural, though unfortunate consequence of a young man with a demonstrated history of significant anxiety being at the center of a supremely difficult time in his life we also learned this morning from the prosecution that several plea offers were on the table leading up to the start of the trial. that defense attorney saying that martin shh relly told him i would never plead guilty to something i did not do it's continuing on the second witness of the day, we'll bring you anymore news from the court house, back over to you. >> i also thought it was weird that they defined this so narrowly they said he can't speak about this within the vicinity of the courtroom. for somebody who's so prevalent online >> reporter: that's right, and the prosecution had asked for all comments publicly including through social media to be barred that wasn't what the judge focussed on, she expressed confidence in the jury that they wouldn't look up information about the case outside of the

courthouse her main concern was they could be walking around inside the courthouse or outside for lunch and overhear something so that's where she narrowly did assign that order. >> you are among the reporters that get to see the principles up front, up close, every single day, i'm just curious, your thoughts on the die ma'amics between his attorney when it's clear that they had different agendas. i mean brockman's trying to reign his client in when slelly wants to talk as much as he possibly can are they destined to stay together, do you think >> reporter: that's a great question, i mean, brockman obviously is doing everything in his power to try to advise ska relly. when they talked on friday, my questions were directed to mr. brockman about what he thought of the days events, and martin responded over him as brockman was trying to say that he was stunned that his client had come in to talk with reporters. brockman clearly fighting on

behalf of his client today >> and real quickly, meg, i think i recall reading, he could face up to 20 years in prison if he's convicted i mean, at what point might there be contempt charges or something like that? i guess i'm just trying to say, there's a lot at stake for marten in this trial, and i -- i mean, everything from that ultimate sentencing to what could happen if he defies the current order? >> you know, it's not clear exactly what would happen, perhaps stronger orders on what he's allowed to do, recourse the judge has, we'll have to ask a legal expert on that it's an interesting question when he was arrested, the government did say he could face up to 20 years if he's convicted on all charges he's pleaded not guilty to all eight of those >> it's clear the judge has to maintain the integrity of this trial because the defense could use any of this on appeal. >> uh-huh. >> if he's convicted at any rate, meg, thanks very much we suddenly turned into court tv

here discussing the minutia of the trial here we have 19 minutes left with the dow up nine points tech led the market higher but recent signs of weakness have investors on edge a tech bull and a tech bear square off, coming up. and ahead, the story of a hollywood access who allegedly took one step too far by creating a fake news operation of pump up stock prices. her next role will be another one of these real life courtroom dramas >> crazy, crazy story. (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play

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shares of buffalo wild wings down today on a downgrade by stevens. the firm lowered the rating of the restaurant chain to equal weight from overweight and cut it's 12 month price target to $145 to 195. it's trading at 123 right now. steven says that the proxy battle that the capital and management shake-up has led to more questions than answers for investors, stock down three and a third percent right now. >> speaking of the ceo shake-ups. >> yes >> any time big changes are coming, not in the ceo office, the company is planning a major reorganization let's get to josh lipton in san

francisco with the latest. joshua >> big changes could be coming to microsoft sales force reports indicating that thousands of people here could be losing their jobs now in a statement, microsoft is largely staying mum saying that mie vo colorado soft is better serving our customers and our partners but in a memo obtained by bloomberg companies and laying out exactly how they want to reorganize this sales force, commercial sales being divided now into two groups, one focussed on those bigger customers. one focussed on smaller to medium-sized clients, they're going to tackle and focus specific verticals, specific industries, retail, manufacturing, and health. and they're going to sell software four specific categories that'll include ai and apps why the big changes now? could be that the ceo wants to

better align with the business he covers his name he says they have the right technology, infrastructures of service with azure, 365, but the point is, they now need a sales force that really speaks the language of the customer, for example, understanding that a health care companies cloud needs are just going to be different than those industries not as regulated, like retail or manufacturing. guys, back to you. >> all right, josh, thank you very much. by the way, the nasdaq is on pace to a void a four day losing streak with the gain today it's last losing streak of four days or more was back in october of 2016 for those of you at home keeping a score. let's send it over to bertha for a look at the move >> in terms of the score today two areas are really in leadership one of them biotech today extending gains. they were up on monday as a tech sold off among the stocks that are doing well today

it's in chips we're seeing people pile back in. that's where all the of the strength is with the big moves up, couple of semiconductor and 11 straight months we saw year over year gains in may so strong demand for all sorts of chips self-driving technology in china. that seems to be all the rage today in terms of self-driving, electric cars, looking to the future of cars, volvo saying it's going to do mostlyelectri cars and that seems to be one of the things that's also hurting the autoparts, guys, like o'reilly having one of it's worst days ever, heating a new low as technology changes, guys, and needs for those old auto parts

starting to look not so hot anymore, back to you >> yep exactly. thank you, bertha. see you later. and while the nasdaq is leading higher today, it has lagged the dow and the s&p just over the past month. nasdaq deposit down about 2% in that time while the dow is up 1% and the s&p is slightly lower. >> it is now the time to be buying let's bring in jean and paul, welcome to you both. we're talking about the time to be buying tech stocks, gene, i'm guessing your answer is yes, where do you see value today >> i think there are three companies that are really leading this next paradigm shift here reporter earlier talked about it, but i think the three biggest companies that are going to move here in the next few years are going to be tesla, amazon, and apple. so think of this as mobile, kind of in 2005, this is that big of a ship that's coming up around artificial intelligence robotics, and augmented reality.

>> paul, we're calling you the bear, but i think that's a little strong, don't you you're cautious on tech, but i'm looking at your notes, you actually like the fang stocks here how do you characterize your view of the market >> sure. the way i look at it is i breathe that tech companies have superior fundamentals, so they deserve to be outperforming, but what you saw so far in '17 with the nasdaq 100 in the first half of the year up about 15% and the s&p and the dow up about half that rate. i just think it's too much and some of the themes that we're talking about, artificial intelligence and mobile and some of the other themes, yes, they'll be big themes in the future, but i think there is a lot of hype between now and then, and so these stocks are taking a breather, and if the stocks come in, i do want to be focussed on the cloud. and so i do like specifically apple and microsoft and google

>> and, gene, just to circle back to tesla, it is having a tough day. either that's a great opportunity for somebody who, you know, thinks like you that there's long-term value here, but i just wanted to go to your point about the renewable energy piece. it's battery shortages part of the problem here how easy of a problem is that to fix? >> it's a really hard problem to fix. and that's why they have to have the gigafactories, they have to create a second and third and fourth probably, but i think that's the difference how we're thinking about this market is we're looking at this kind of in a five year window ultimately, tesla will accelerate the globe's usage of renewable energy, that's their mission statement. and they're going to have a car that's going to come out at the end of the month, model 3 that i think is much cheaper than what people actually think. i know everyone thinks that the model three is more of a mass market car, but i think that the gi nation of what they can do on the batteries and what they can do having a great consumer car is going to quickly turn the sentiment around on this stock

>> paul, again, i'm back to your notes here, your cloud investment aside, you're looking at a couple of companies here for possible trades that i find interesting, fitbit and snap, that's interesting >> yeah, so what i try to do is i try to have about 80% of my tech portfolio in i don't to want say the obvious leaders, but leaders in themes like cloud computing alike. that's where you get your fangs. i try to have about 20% of the portfolio. actually in stocks, i think the pend ewe lum has swung too grossly oversold they are not good companies. they might be crap actually, but i think they're due for a bounce if snap gets back to the ipo price which it's close to there, it's going to be heavily defended with the comments and at the treading desk by their investment bankers and i also think fitbit trading at five with about $3.50 in cash, if they ever do anything right, the stock's going to double or triple off the bottom. >> paul, let me also -- and this

is going to take this in a totally different direction. i want to squeeze it in. we're going to talk intel next hour what's the view on that company? >> i think intel is a great example of '80s and '90s client server leadership. the problem is that is a very old paradigm and the way i look at it is remember years ago when michael jordan was the best basketball player on the planet, and he retired and decided to play baseball and he sucked at baseball. and the way i look is intel dominated one space, why should we assume that they're going to be relevant in the internet era? and so far, they aren't. >> well, i mean, you're saying intel is completely irrelevant, what about data bases. >> well i think data bases and they've done well with chips into the server market, but you can see that they are struggling as they did to become a mobile presence, and now we're even moving beyond that and it looks like amd after long

last they're being very second string, weakling compared to intel in the 80s and out, starting to gain some share. and of course probably the best company in the space is in video. >> i'm just enjoying the analogies so much. i want to keep going >> to muddy that further, who sells more athletic shoes than anybody else >> michael jordan. >> retired back in the '80s and '90s gene munster, paul meeks, good to see you both. thank you for joining us today >> thank you >> thank you >> thank you we are heading to the close here with about six minutes left the dow is virtually unchanged right now. the s&p a little bit higher, the nasdaq's leading higher, and again, oil, a big mover to the downside today with decline at about 4% and we'll get all of that coming up here. >> by the way, nike said there's a lot of kids that buy air jordans today that don't know who michael jordan was >> we're in the midst of wimbledon. the most famous tennis shoe out

there is the stan smith. >> oh right. >> how many people know that he was a tennis play per. >> exactly he played in the '50s and '60s >> if only he saw his shoes now. up next, afterwards we're going to talk to william cohen about the rising tensions in the korean peninsula and the implications for markets and security stay with us

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(bell ring) heading for the last two minutes of trade for this wednesday, no follow through from monday's rally that took the dow and the transports up into a record territory, briefly during that day, so what did move today oil. let's start with that one. that decline there after eight consecutive up days for the price of wti crude, now a 4% decline, and tomorrow, we get some inventory data. so we'll see if that confirms that move there. the ten year yield, not a huge move here, but we are watching it very carefully as it coming off these recent lows with all that's going on over in europe with mario talking about trying to remove some of the monetary policy over there. the easy money policy, and our

own fed debating that. and we saw that in the june meeting of when to start to do the draw down on the balance sheet there. the nasdaq, another market we're watching carefully right now after the recent tech rack and the sideways movements here. a comeback of sorts, just a one day wonder or are we starting to see it move higher who knows, and bob, next hour, they're going to look at this story of intel versus samsung. >> and where's their personal assistant? they've been working on for a while now. >> where is that >> here's something interesting today, we talked about the autoparts dealers being really weak today look at some of the other retailers today. some are extrapolating and maybe that'll spread because this is rather unusual

this is some of the big detail names. rather dramatically four or five or 6%. >> thanks very much. stae tuned now for the second hour of the closing bell with kelly and kpan, see you tomorrow, kell >> thank you bill, welcome to the closing bell, everybody, here's how we're finishing up today on wall street with the dow just ever so slightly in the red and the russell dropping about half of 1% different story for the s&p 500 which added three and a half points today nasdaq, look at this, despite huge declines in o'reilly automotive and a big drop in tesla. stocks are powering higher by two-thirds of 1%

200 points off the naz dock there and the dow is struggling to see if it turn into the green on the bell there. about 50 points off of it's all-time high. meantime, take a look at china today. it will report it's earnings after the bell it was moving lower, quarter point lower on the session today. we'll bring you the numbers as soon as they are out a look at how misinformation on social media is affecting stock prices and what regulators are doing to combat it joining me today is the chief market strategist at ab. it's just -- it's not even a name anymore it's like ey all over again. just ab.

dollar weaker which promotes sickly kls it promotes global rather than u.s. so i think that, you know, what investor are struggling with, how to make it to the end of the year looking for the impact on the market's a corporate buybacks. actually we're down first quarter about 17.5% from the year before. >> it's got buybacks, earnings to consider, the overall david,

fed left the door open to maybe doing something in december. something more substantial is coming with the balance sheet later this year. which of those is more important to you earnings or fed action >> well, at least for now and not just a level of earnings it will start to translate into capital spending plans, hiring plans, expansion plans thus far, large corporations have been on the sidelines, they have talked about significant opportunity and upside yet they've delayed some of the investment that is critical for economic growth and earnings achievability. >> are you the guy who said go short? did you say that on july 4th by

the way? it does not reflect what we did. relative to some of the other regions. however that weight is relatively modest, there's a huge percentage points and reflects the fact that the relative growth in earnings outside of u.s. is likely to be higher, and as we move toward the end of the year, u.s. is facing more challenging compares, and some with higher valuation. >> all right you're sort of off the hook. how about that down move in tesla today? look this stock has been up so much this year, before the recent decline cliens, it was up 72% this year. maybe that puts a 7% decline in perspective. but the shortages of batteries that it's talking about, the fact that other car makers are going electric too, do you think this is where there's investment opportunities? it's a huge momentum stock

it's all about optimistic. but i think from a valuation perspective with all the competition that is entering the marketplace, i think you have to be very, very careful when you start diving into names like tesla, they are going to be impacted by shortage component shortages, just like apple is impacted, for example, if they don't have components to build iphones and they can't sell them, tesla is in exactly the same situation with the shortage of battery packs >> it's similar to the story with respect to bank stocks. it's all about the future. this brave new future that we are all anticipating happening, and i think that a lot of that momentum for stocks like tesla, amazon, apple, has really impacted the market. and you can have the same kind of thing that happens as well. >> that's what makes o'reilly interesting today. they came up well short in terms of the sales, fine in what they're capable of doing again, is this because people are so sensitive to any remaining retailer.

>> crushed exactly. i think there's a lot of opportunities out there in the market that are disconnected from the larger story of interest rates and fed and the dollar. >> and michael, going back to you, you're talking about looking at some of the dimpbd stocks, especially against the backdrop of al rising rate environment. in the short term, maybe depending on what the fed does i think the federal reserve is going to look at data it's mixed at best. i think the federal reserve is probably going to unwind balance sheet in a gradual way rather than be aggressive on interest rates. despite the minutes released, there just simply any inflation in the economy right now with energy down 4% today, below $50 a barrel dimpbd stocks get crushed right when interest rates rise significantly, and i just don't think they're going to rise

significantly in terms of being more gradual increase, and i think nas a positive for dimpbd or any of the stocks >> let me throw a couple out at you. you've got consumer staples which are big brands under this whole ages of what's amazon going to do to hurt their value? now maybe the financials elbowing their way in. what kind of payers in particular do you like >> well remember, based on really the merger and acquisition activity that you're starting to see now, the effect, i think you're going to see some of the consumer staples companies actually peel off part of their brands and start selling them into the marketplace. the financials are going to be under pressure if the interest doesn't rise as much as people think. i think there are opportunities out there. the s&p 500 is at an all-time

high that doesn't mean that all 500 stocks are at an all-time high and was just said by your other guests, just because certain names are hitting all-time highs, because tesla and apple are up a lot, that doesn't mean there's not other opportunities to look at, particularly again in the dimpbd space. >> are you more cautious or also think that maybe interest rates aren't going to be backing up real quickly you can go in there? >> i think, relative to what we think may happen as far as the transparency goes with respect to the fed, i like energy. we've been biting around in energy right now everybody's like whoa, but, but the thing is is that this is a market of other opportunities. i believe there are some very well run energy companies throughout we like bp we like number of dimpbd paying companies and macy's i know that everybody's holding their nose at.

the stock has done well since it's tanked and pays a nice dimpbd and it is a great offbalance sheet >> do you think you could be in macy's for the long run? >> it depends. by the time they figure out how to do that i might be out >> macy's down 1%, that's what you're saying, if you'll to want look at places you flood, let me ask you quickly, if you comment about what's happening in italy with that rescue there, while at the same time, we keep reading the stories about how well fund managers are doing in europe in year what kind of environment are we talking about? >> we're going to have asks, some of the balance sheets for the european banks are still bloated with nonperforming loans. and so you will still get one off situations where government or ecb intervention is

warranted. the key issue is if you look at return of equity for the european banks, it is starting to rise. we're still seeing steep slopes, so i do think in case of europe, the banking industry, the worst is behind them at this point >> and that means that the rest of, you know, they have to run off the bad loans. the rest of economy continues to do well? you think people who kind of are looking at this first half performance, they can still get a piece of it? >> i think this is really the critical point the key to sustaining growth in europe is going to have to be credit growth, most of it is still coming from the banking industry so at this point, the loan growth is going to be the fuel necessary to sustain expansion, and banks look well-poised to deliver it >> let me mention one more thing michael as we bring this back to the u.s. here. great stat from aai, the association of individual investors earlier, they said that stock and stock fund allocations rose to 68.8% among new people it surveys.

it still feels like a lot of people are out of this market, but do you think that actually the retail investor is more or less fully invested here >> no, i don't because that survey, and this is why the survey is how it's constructed, it's very important. that survey is a survey of people that are very focussed on equity markets they're very focussed on economy. they're basically investing folks that are really focussed on consumer basis -- >> you're saying they're sort of the savvy individual investors not the general public >> yeah, i would say that. i would say savvy and more particularly i think they're probably more invested in equities i can tell you that people are more invested in themarket, bu we're getting calls all the time from people that have been in cash and are saying, i give up how do i get back in i think there's plenty of dry powder on the sidelines. not to mention some of the hedge

funds that have been sitting out of the market for years that are finally at a point where they're capitulating as well >> they can't hold their nose anymore. i mean, and you see this all the time, because you see when corporations are buying back their stock and the stock collapses, they stop they pull back they say i don't to want participate right here, when the stocks are going crazy and they're at all-time highs, they're all in and i agree with you, i think that people are just not all in yet, there's plenty of people holding their nose far long time and they're just starting to get to the markets if the market continues to stay stable, it's really hard >> it's an all-time high, it's all-time highs, the valuation of bob schiller tells me things are overvalued it's the size of the market relative to gdp, all of these stats thrown around about how if you've waited this long, maybe just wait until the next -- is that going to be the any waiting for the next financial crisis to get into the market? >> exactly in fact, it's like a stretch arm strong that's been so overextended and i do agree with you, kelly, but the thing is the market can

still sustain itself beyond disbelief. and i think that we've had all kinds of rips to our reality in the past year or so, and the smarkt one of them but you still have to participate and most investors understand that. so they're going to participate in markets like this >> kelly, i want to add also that -- yeah, let me add real quick. if you've got cash sitting in the market, just because i'm saying there's opportunity, doesn't mean you blow all of your cash in on one day. you've got to spread it out in my view. if you spread it out, then you have an opportunity to cost average in and you're not so much cap trading at all-time highs necessarily. >> all right some words of wisdom, thank you all for joining us today, really appreciate it. appreciate it. >> thank you north korea test launching an intercontinental missile and claims it can reach alaska that defense companies are developing to protect u.s. shores and president trump set to touch down any minute in poland now. why the president is visiting that eastern european country just day ahead of friday's g20

meeting and what's at stake for bo ldethears you're watching cnbc first in business worldwide a used car,

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poland air force one appears to have touched down now ahead of president trump's speech in warsaw tomorrow. the president then heading to the g20 meeting later this week where rising tensions with china and some increased threats from north korea especially could overshadow that meeting. let's get to our kayla toush who is in washington with the latest, kayla. >> reporter: white house officials called poland one of america's closest friends, staunchest allies, as the reason the president is visiting warsaw on his first stop of this second foreign trip of his presidency so far the two heads of state will be holding a bilateral meeting and an expanded meeting and a working lunch. they'll be holding a press conference where the two leaders are said to be taking questions. president trump will also be holding a bilateral with the president of croatia and is expected to be giving a speech that has been telegraphed as his most substantive yet on foreign policy on american security and prosperity and on america's relationships with europe in the modern day.

the priorities for the trip overall according to h.r. mcmaster are as follows. strengthen america's alliances to reassert america's commitment to liberty and the rule of law especially given the history of eastern and central europe third to understanding threats facing both regions to develop a common approach to russia. to expand economic opportunity for americans to create robust open and fair energy markets and to pursue a level-playing field in environment and climate issues now on energy specifically, we expect the president to tout the continued exporting of liquefied natural gas or lng poland was one of the first recipients of u.s. natural gas earlier in june. as it seeks to diversify it's energy away from it's previous dependence on russia

one top that i can i didn't mention is north korea, but that is going to be looming extremely large over the president's travels this week. it is something that his advisors are closely focussed on and just last hour we heard the ambassador to the u.n., nick kentucky haley tell that emergency u.n. security council meeting that she expects the u.s. to be introducing new sanctions on north korea to the u.n. in the coming days. and that china's trade with the u.s. is at risk if it violates any of those sanctions so kelly, we're certainly learning a little bit more about how the u.s. plans to deal with the escalating threat from north korea, and ambassador haley said they will use force, it's not the first choice, but they will if they need to. >> wow, kayla, thank you morgan brennd has the details.

a ballistic missile flew for 37 minutes making it the longest launch before landing off the coast of japan while experts are skeptical of the ability to actually weapon news this type of missile, this means the north is moving closer to it's goal of being able to target alaska and other parts of the u.s. like hawaii now the pentagon responding saying, quote, this act demonstrates that north korea poses a threat to the united states and allies and we remain prepared to defend ourselves and our allies and to use the full range of capabilities as our disposal and there are capabilities and the biggest, the ground-based midcourse defense, this is the $40 billion system that can shoot down long range ballistic missiles in space is the only such ground-based system that can defend the entire u.s. from an icbm attack. now boeing is the prime contractor, but aerojet dime are key suppliers. gmd has come under fire for spotty success rate, but in may,

it did destroy a mock icbm lawmakers want to boost the number of intercepters for the system as well a new bipartisan bill would add more than two dozen to alaska's ft. greyly, this is one of two sites where they are currently deployed and where the numbers are already growing this year. lastly there are other defense systems in use around the world as well. these are more regional in nature from lockheed martin and demand for all of these systems is growing, both here and abroad along our allies back over to you >> all right morgan, thank you. morgan bren. so what happens next with north korea? let's bring in military analysts, colonel jack jacobs who joins along with william cohen. thank you both for joining us. >> and colonel, let me begin with you because it's interesting the report that morgan just gave highlighted that we had a deficiency in the antimissile systems, is that right? >> yeah, we do and first of all, performance is not what we would like

it takes a long time to develop these systems and make them work secondly, we don't really have an integrated system yes, we have the capability of hitting them midcourse, we can always try to detect them at launch and knock them down there. once they're passed midcourse, it's extremely difficult to intercept when it's on the way down and we also don't have an integrated system. >> mr. secretary, i've also read that it's hard for us to get this technology in place more quickly than north korea appears to be developing it's own technology, where does that leave us >> well secondly, it's much easier to overwhelm a defense, no matter how good our defense gets it's going to be of a limited nature a limited ballistic missile defense capability against a limited type of attack any time a country can multiply those missiles, be it a china or

a russia >> the first is to announce he's going to rethink about tpp we had 11 countries lined up to support us on a trade arrangement, which they were very much in favor of. the dissent of signal that we were going it alone. going to have america first. we're going to put our interests rather than theirs and when you do that, it causes them to doubt where they should place their allegiance that would be one thing. and i think beefing up their capability, i would be that'd into japan i would be crews missiles in japan. i would do a number of things to

strengthen our own offensive capable in the region as we tighten the sajss against those we're doing business with north korea. >> it's an interesting point to tie together the trade agreement and our leadership there with the defense one. you know, i'm not sure that there's a lot of people who'd want to deal with the nitty-gritty of the trade deal while at the same time, having these north korean statements basically directly threatening the united states. i mean, that appears to just kind of call for us to act a little bit more quickly. i can't imagine that our alleys, former allies, however you want to call them in the region wouldn't be part of that effort. i mean, do you have a sense that korea, south korea aside, we don't have the support in that region against north korea that we would have even five years ago? mr. secretary? >> i was in singapore a short time ago at a security conference at that conference, secretary mattis gave a very fine speech all of those in the audience, and they were all the asia pacific nations were very much in favor impressed with the speech at the same time, president trump was in brussels, refusing

to invoke say he was prepared to invoke article five. that undercut the speech saying it looks like the president telling the nato countries they're on their own there's no article five commitment it was in the speech the president apparently decided to take it out. so that sent a signal from the atlantic to the pacific that perhaps the united states is not as reliable as we once thought that has carried over. and that's something i hope the is going to correct with mr. mcmaster saying we have a comprehensive speech and the coordinated one. going to be great. we haven't been doing it we've been doing it ad hoc and that's not the way to run the government >> and colonel, we know the anti-missile defense systems, the u.s. has put in place of south korea are controversial especially with the current new more dovish government, but what about the point about implementing them in japan and other parts around north korea why aren't we doing that >> well, we're not doing it because we're not convinced that

this administration certainly is not yet convinced that it can -- it doesn't have to go along. go it along. and unfortunately, that's not the way things work. we do have to demonstrate that we're much larger than just the united states alone. i think that's going to change too. i think the practical aspects of being able to defend not only the united states, but our allies and friends, those who are unaligned in every region, that's going to dictate that we be able to have our capability stationed in a wide variety of places i think things are going to change fairly substantially and fairly soon because the alternative of not doing so is really very bad indeed >> colonel, is it possible that actually because of this issue, the u.s. will be able to reassert it's leadership position in that region that william cohen is saying we relinquished -- do you think that might come out of this? despite the trade deals, the rhetoric, despite all of this,

here's the president and the first lady deplaning in warsaw colonel, what are your thoughts about that >> bell, one hopes that's exactly the case you know, it's kind of interesting what's happening currently on the world stage, really is -- appears to be in the hands of secretary of state tillerson. i think he's got the lead on this and i think the president has given them the lead on this because the perception is that military capability alone is not going to get it done that it's only through the use of all instruments of policy integrated that's not just military, but diplomatic and also economic, that's the only way we're going to be able to protect the united states and it's allies. and so that's what's happening now. i think if we keep our eye on what tillerson says, and the kinds of statements that the president's making with respect to diplomacy, we'll see the way it's going to go >> mr. secretary, since the president and the first lady are on the ground in poland now, let me just ask you what you think the significance of this trip

and the speech, kayla told us he intends to give is, what doo you make of it all >> i think it's an effort to kind of recover from the backlash that took place when the president didn't reaffirm our commitment to the nato alliance through possibly invoking article five. i think poland is someone a country that's been standing tall and tough against russia. and i think the other countries want to hear that the united states is reaffirming our relationship in nato to make sure that russia doesn't continue to do what they've been doing in meddling in our elections, that of the germans, the brits, and the others, the french, and make sure that they are not able to intimidate our allied friends so i think that, that's the important message coming from this but i want to comment on colonel jacobs comments. i think it's important that the secretary of state start taking the lead on this, provided he's not undercut by a tweet coming out of the president a day later which negates what he has said it's important that the secretary be given the lead, it's also important that he have

a state department the state department now facing under the president trump's budget, a 20% cut. at a time when we need to actually expand other diplomacy, not contract it. i think it's a good thing that secretary tillerson is in the lead, i hope he stays there. >> former secretary of defense, william cohen, colonel jack jacobs, thanks for joining the president and the first lady on the ground there in poland. meantime, there is a new smart speaker in town. actually, there's more than one. we'll tell you about the competition yi ttrngo give amazon echo a run for it's money. stay with us

welcome back, it's time for the cnbc update. >> here's what's happening at this hour, everyone, illinois's state speaker of the house says his chamber will reconvene and vote to override the veto. lawmakers were in session for two weeks before agreeing on a $5 billion income tax increase that should keep that state's debt rating from being cut to

junk united airlines is apologizing, again this time, over a mother forced to hold her two-year-old son on a three and a half hour flight after the seat that she purchased for him was given to a standby passenger. the airline says a mistake at the gate showed that seat as being open rescuers in oklahoma hiked seven miles to bring food and water to campers trapped by rising flood waters. 18 people became stranded after heavy rains caused the nearby blue river to swell. all of them eventually made it out safely and this may be taking the idea of asugar high to a bad level. a florida supplements maker has started selling snortable chocolate. the founder says it gives user an energy-drink like feeling it costs 20 bucks. it is not fda approved that's the news update this hour, kelly, back downtown to you. >> yeah, i'll take with eating the bars of dark chocolate i don't think i'm the target audience anyway.

>> yeah, i don't think we are either but nonetheless, i think it's more enjoyable too to just eat the bars of dark chocolate >> yeah. so do i. thank you, sue sue herrara. it is time for the fast take and for that, i am joined by a very special guest nor round the wall street journal dennis berman, thank you for being here >> sno no snorting chocolate, but we're ready to go. >> let's begin with ek koes of amazon echo. alibaba is launching a x 1 speaker in china for $73 u.s samsung has plans to launch big speed for the home, dennis, what do you make of it? >> it's going to happen in china the same way it's happening in the u.s. it's interesting to see the adoption i think 36 million homes in the u.s. by the end of this year will have some form of this speaker. >> do you have one i do not you don't either knowing you as i know you, kelly. >> i like jeff fowler's review of the screen one the echoes show, he called it annoying which is the ultimate disk

>> annoying, creepy, but people, i think it was so wonderful when he retired, he said, people don't need me anymore because the computers are truly integrating into our lives and it's going to happen in china the same as the u.s. i'm a buyer on that idea >> all right up next, under pressure from the chinese authorities, china's restricting video game usage those hurnd 12, only an hour a day. 12 to 18-year-olds can only play for two hours before 9:00 p.m., meanwhile, dennis, hope you're paying attention, the times claims video games have gotten so good, they are keeping american men from the work force. i've heard this one before. >> i have. well, i actually take this, this whole point seriously. i think it's only a matter of time before in the united states, want use of smart phones, video games will be regarded as a public health issue. if you look at the ways we spend our time, attention, lives on these devices, it's only a matter of time i salute the chinese for getting ahead of -- >> i agree, look, there's parts

of it that are addictive and people say you behave with cigarettes, i get that, but this is still an overhang from the great recession. and that overall the signs are everything's been improving. it doesn't seem like this time is any different >> okay. well, at least in china becomes a really interesting issue as it relates to government control. they have a little more leeway to do these kinds of things. this is a different type of society. >> i don't to want become like china either, that's another story. >> only a matter of time before you see public service announcements about put down your phone dollar on that one >> when driving. that's where we're starting anyway next up, first barrons is talking about all of these chips leapfrogging intel now comes news that samsung will take the crown with it's second kwaesht earnings that'll show samsung it's the biggest chip maker. >> what happens to intel >> well, i think intel is trying to do a lot of things as we saw with the number of their deals trying to get more into the self-driving car side of things. so, it is significant, i can tell you what intel will probably say, we're looking for

a higher value sale, we're not necessarily looking for revenue itself, but of course this matters in the chip business because scale guides so much of your costs and so, you've got to say intel is on it's back foot no matter what anyone says >> they've reinvented themselves before, they have to do it again. next, $10 billion payments deal, this is the deal they snagged world pay which apparently jpmorgan expressed interest in. to me, dennis, other than perhaps the payments piece of that deal being interesting, is jpmorgan back on the deal hunt now after all of these years, do you think? >> they're not buying a bank, regulated bank we haven't seen those deals in a long time. even if it wantedto. consolidation in the payment space, probably will happen. a lot of talk about vin mill it doesn't make a cent, yet, but it is changing consumer -- it is changing consumer behavior and jpmorgan's trying to change that too. i'd chalk it up to, it's kind of boring, but kind of important. let's wait and see how the space

consolidates >> okay. finally, we had to squeeze this one in, we've talking about facebook looking for tv shows. and now as a report today from deadline that facebook ordered a documentary series about the ball family. tell me you're familiar. lonzo is starting at the lakers. is the whole family participating in this or this -- i have to say, i think it's a brilliant move by facebook >> i'm with you. you know, it's so amazing. facebook can bring you an audience that is rival too or greater than that. and a global audience of that television at large. oh, and you can measure and identify their characteristics as advertising receivers so, i think this is just the start of what facebook will become >> half listening and half watching a shirtless lavar ball in the wrestling ring. this man -- look, this is a savvy play, i think this will

have a lot of appeal and caught me among the skeptics thanks for joining us, dennis. >> thank you anything you want to add a little tease go read the wall street journal, anything like that >> read the wall street journal tomorrow we've got a lot of great stories, particularly as it relates to the financial secto and it's evolution i'll leave it at that. >> excellent look forward to it thank you again sir, thank you young china earnings are out now. let's get to those results >> hi kelly, let's look at young china which was spun off from yum brands 27 cents in line with expectations on it's bottom line revenue just shy of analysts estimates at 1.59 billion. and if you look at same store sales growth up 3% helped by continued in kfc, kentucky fried chicken, but flat at pizza hut so that perhaps a concern here as you look at the stock down 8% after hours. analysts were expecting to see growth at the pizza hut division other metrics to keep an eye on,

they did open 90 new restaurants during the quarter, that's yum china. loyalties members passed 100 million. i like the mobile sales one. i thought the first quarter would be better than expected. this looks like around earlier >> they did, and to your point, the stock is up about 50% year to date. something to keep in mind as we look at the stock down hereafter hours. >> still-up 31 points. thank you. volvo making a move that's both historic and environmentally friendly how the chinese-owned car company plans to leave conventional gas engines behind and go electric is next. and the fcc has a twitter problem. how fake news on various social media outlets is causing some e en idog fht stocks and what thagcys intoig back, coming up. the power of the nasdaq market. the power of 100 of the world's top companies. the power of an etf.

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our phil has more on the story. phil >> now let's be clear here, kelly, they are going to offer all of their models with electric and i had brid, but you can get an engine as well in

2019, it's just going to be phased out as we move towards 2025 here's the announcement from volvo, we'll talk about the significance here in a little bit. they will be offering all of their vehicles with electric motors, starting in 2019, and as i mentioned, their goal is to transition to fully electric line-up by 2025. in announcing this, the ceo of volvo said look, this is -- marks the end of solely kbux engine-powered cars. so how significant is this for volvo? relative to the rest of the industry keep in mind, that their global sales are just 534,000 vehicles. it was up, their sales up 6.2% last year. so in the whole scheme of things, they are still relatively small, their top market, western europe followed by china and in the u.s., their sales, just 15% of their sales come from the united states though they would like to increase that over time. there's no doubt that this is significant and fair amount of attention, but keep in mind, the owner of volvo is gili

this is a chinese automaker, and most important to gili, making sure that it's positioned in china as china transitions into the greater sales of electric vehicles so, that's a big part of this transition that you're seeing from volvo, but no doubt, people are going to talk about this saying oh wow, we've got an established name in the auto industry that's going to take on tesla and really move exclusi exclusively towards electric vehicles, and again, that'll happen by 2025 >> and phil, stay right there. we to want bring paula into the conversation now he's the editor at revs institute. paul, one thing i always feel like important to make clear is the whole idea that moving is greener, depends on what's powering the grid, right i mean, we're lucky in this country fair amount is natural gas, but a fair amount is still coal too >> yes that's exactly right the power has to come from somewhere. and basically the best way to do it at this point is to burn some carbon-based fuel.

wind power and solar and other things notwithstanding but, as phil is absolutely right on this, kelly, this is a bold move and it comes just two months after dealt by automotive announced it's going to split business in two is traditional power train components business is going to be one part of the business, but it's -- the company in the future will focus solely on electric and autonomous cars. it indicates the huge revolution in technology that is spoofed through the industry >> phil, i was reading this article looking for kind of the bigger why, not just because, you know, this is doable, but is there something more to it and i was interested to read there might be an ipo for volvo coming up. look, they've been through the downturn, they're now owned by chinese gili as you mentioned, but if they have an eye towards coming back in the public markets, this is a way to make a splash, right? >> it does, but also keep in mind, that as an automaker, this is a relatively small automaker. you're going to make it

transition, it's far easier to do it if you're volvo than if you were ford or if you were general motors or volkswagen i mean, it's an easier transition for a smaller company with a limited portfolio like volvo. >> and, the other thing, paul that i, you know, thinking through here is tesla already is saying it has supply constraints when it comes to batteries what happens for volvo now can they assume they're going to have a cheap, readily available supply of these? >> well, the market will be there i think to meet volvo's needs. and as phil said, you know, there's not going to be the full electric vehicles, in fact, going to be very interesting here kelly is to see what proportion of volvo's transition will be pure electrics versus i had brids. and those batteries are in a lot more the i had brid. >> if we get to 2021, let's shum, gas is ridiculously cheap,

even relative to where it is right now. and there was not demand and the a. demand that volvo was thinking, don't be surprised that they would transition back. it makes sense right now >> i was almost going to joke about the price of oil and tesla being correlated today, that's probably overdoing it. thank you for joining us >> you bet >> phil and paul talking about the future of volvo. meantime, donald trump may not be the only one accusing fake news of rigging the system. traders may be too as machines take over, articles and social media posts are being used to make trades in split second decisions what that means for markets and what can be done to combat it is next ♪

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for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade. welcome back hollywood actor turning to writing to help increase his fortunes in the familiar tinsel town tale, but when it's made up of fake news stories, it highlights the pitfalls of the increasing number of stock trades driven by computers renee merrill has tracked this story nrt "washington post." she's here with me for more. this is not someone put out a tweet and it you know, there was an actress, explain the story. >> there was an actress, she had ahere peered in movies, princess diaries 2. in 2001, she started a company

and started hiring writers to put oarticles that looked well researched, but they're meant to pump up the price of the stocks. >> what kind of websites might these appear on? >> forbes. motley crew. companies that, site that is business investors would rely on >> and that don't have much of a vetting process. do you thi do you think they were realistic enough >> both. some of the companies seeking to have responded by now beefing up their vetting process. but the, camilla, the actor we're talking about, what she did was tell these writers, don't disclose, so seeking fall alpha requires writers that you're being paid. she would tell them, if you're

going to disclose, we're not going to pay you she called one writer who wanted to disclose an idiot they would try to go around the process, so even when sikhing alpha said this looks strange, they found a way around. >> we've talked about this, where the second something about a company is put out there, there are -- to pick up on and trade as a result. is there any way of telling how much money moved around on false information? >> that's still being studied. this is a new area they're looking at obviously, always been stock scams out there. people trying to pump up the price of a stock but how much has been influenced by social media, that's a new area and the sec now is warning investors about this but still relatively -- >> how do you know and in a way, this is one o f f the problems driving trading activity, but even a human might be hard pressed. how did you come across this story?

>> well, camilla's trial is suspected to start later this month or early next month. it was just interesting, to have an actress is suddenly get involv involved give you a lot about it. i just found it really interesting. since so much trading is done this way, it seems there's a potential for this to become a bigger problem because you don't have the stock break >> and this has been a problem with the sec portal itself i believe it was last year, people would submit false takeover notices because there's no vetting for the most part of what comes in and you'd see the stocks move. is there anything else you can do at this point increasing awareness, but do you get the sense there's a lot of this going on? >> there seems to be the sec didn't just come down onica mill la. she came down a a dozen companies out there like this. one of the experts that i talked to said that i thought was so

interesting, you don't really need to move a stock for more than a minute or five. to make a profit if you can maove a stock for fie minutes, it takes five minutes to figure out this was false news and move on that's enough for somebody to really make a profit to make a profit whether you're trying to move the stock up or down and so now, there are companies out there trying to develop counter -- to rule it out. >> maybe they can do it for this, too, but in in case, it's a really important story >> see how that trial goes >> thank you >> now, the minions were at it again, but it was the debut of dispick bable me 3 that was tha wasn't enough. we'll have a break down on how it favored and coming up on "fast money", wrong on tesla, sayshis tngare finally going his way. he'll tell us why at 5:00. your joints... or your digestion... so why wouldn't you take something

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welcome back it's been a bummer at the box office this summer, but did the long weekend help turn it around julia has the numbers. >> well, the holiday didn't help another lackluster weekend bought the total summer box office down b about 9% so far over last year the summer has been so weak, it's erased gains led by beauty and the beast. despicable me 3 gross $9 million. but 72 million it brought in

over the weekend in the u.s. is about $10 million lower than the opening. this past weekend, baby driver outperformed, only grossed $21 million while will farrell and amy poehler's comedy didn't even crack into double digits what's happening here? could be more streaming options on netflix, amazon and hulu. could be the fact word of bad films spreads faster than ever or sequel fatigue, but those factors aren't impacting the overseas box office where films are far outperforming and also far performing their state side take ef even the fifth transformers and pirates films have been huge overseas hits. >> in china, they only get like 25% of the box office or something. let me ask you about espn.

when we talk about disney, it's television ratings, but it's the kids channels in prime time, the journal pointing this out. they're not showing up to watch tv on the disney channel, former abc family channel, this is going to be another headache for them, right? >> there are a couple of factors here we've seen the whole universe of prime time tv shrink over the past five year, people aged 34 and under are watching about a third less prime time television than they did five years ago, so that is an industry wide trend and disney and kid programming is going to suffer the most because they're the biggest, then you have the fact that just total television subscribers, the traditional paid tv bundles from cable and satellite. those are down so that means that both freeform, the abc family and disney channel have both lost about 4 million subscribers over the past three years that speaks to the whole bundle of shrinking, but the real

question for disney is whether we start to see them do more direct to consumer options freeform has really been focusing on offering their content online and we can see more apps. >> i know. feels inevitable it should be considered in the context of everyone cutting the cord thank you for joining us today and thank you everybody for tuning in to "closing bell." "fast money" begins now. >> "fast money" starts now live from the nasdaq market side, i'm melissa lee. your traders on the desk are -- the ten-year yield -- the chart masters said rates are about to come crashing down to earth. plus, you'll never guess which commodity will be worthless in the next 20 years. it's a controversial call and andrew left has been wrong and tesla until this morning and now, he says today's sell off in the giant is jus