earnings after the bell. full breakdown and conference call coverage on "fast money" tonight. >> yeah, and if you -- three reasons to watch "closing bell." dow 22,000, bill griffeth and sara eisen, the cover girl for the latest issue of athleisure magazine you look amazing. >> very athletic. >> very leisurely. >> take it away, guys. >> i'm trying to put the leisure in athleisure. >> some of the photos you took, you're a pool shark, no idea. >> well, i learned for that photo shoot. i made sure barbie was behind me how about the yoga pose though. >> i love that, very nice. >> came out on under armour earnings day so we got to talk about it a lot thanks, "power lunch." welcome to "closing bell." i'm sara eisen in for kelly evans at the new york stock exchange. >> have to cancel the segment we had planned for all of that.

i'm bill griffeth. on track for another record close. we came within 12 tantalizing points of dow 22,000 this morning. we've since pulled back and the s&p is trading close to its record levels. grasso would know what that level is, that record, but we'll goat that in a few minutes we're about a point away. >> thank you >> you're welcome. >> coming right up, apple has certainly been a big catalyst in the dow's rally this year, but can it last? coming up, we debate whether you should buy or sell this hot stock ahead of its earnings report which is due out today after the close. i love it when i get to be here for apple. >> you're here every time we do apple earnings just works out that way. >> and president trump is set to host a small business event at the white house called small business, the engine of the american dream as son as it gets underway we'll take you there briefly live. what the president has to say on what has turned out to be

another newsy day. >> the dow is inching ever closing to that 22,000 25 points away bob pisani in the middle of the action on what's driving it. bob? >> the good news is the dow is on fire. the bad news is the advances kind of narrow we're essentially at 22,000. let's not quibble, 21,000 first back in march. what made 19,000 points what, was the leadership take a look i'll show you the numbers. you'll be started. mostly boeing. 400 of 1,000 points was bogues, mcdonald's had a healthy contribution cat florida, unitedhealth. 26 other stocks in the dow only responsible for 150 of the 1,000 points that we've seen remember, dow is a price-weighted index here. last four trading sessions, here's another weird thing the dow industrials are up 240 points wait a minute. the s&p is down four points, and that's because you get the big moves up in the stocks, so, for example, boeing has had a huge move up in the last few days first down day in a while for

boeing, but it's up almost ten points in the last few days here that's about 70 points in the dow. we're also seeing a little bit of rotation. some of the other lag yards are starting to move up. some hopes that oil stocks might be moving so chevron has had very good numbers. that's been helping the dow since their -- their earnings, about four or five days ago, and then we've got a few of the other sectors, retailers, for example, a little bit better about, and walmart is slowly slowing every day climbing up fractions of a point here. the hope is maybe we can get some kind of summer rall re, and, guys, we'll be talking about that more and the prospect for it tomorrow. back for you. >> all right, bob. by the way, i do quibble, so we don't acknowledge 22k until we hit 22k, but i also digress. we'll see you later. apple for its own account has been a major contributor to the dow's record run and its earnings after the bell, could have a big impact on this rally josh lipton joins us from apple headquarters here in cupertino with a preview

josh >> reporter: >> well, bill, here's what to expect here for atpel's q3, earnings per share of $1.57 on revenue of 44.9 bill crop. iphone shipments, 40.7 million there's also going to be a focus, of course, on the average selling price of the iphone, the sales mix and gross margins. real attention though is going to be on that q4 guidance and what that tells us about the new iphone in the pipeline right now the street is looking for q 4 revenue of 49.2 billion. gross margins of 38.3% if that misses, tim cook will face a lot of questions on the call about whether the new phone will be delayed as many on the street expect. analysts say a one to two-month delay, not a material concern, but if that delay lasts longer, past early november say, than fiscal 2018 estimates could be in jeopardy. heading into this report, apple stock up almost 30% this year. it is up more than 60% since hitting that low in may of 2016. guys, back to you.

>> all right, josh thank you. we'll see you next hour. let's add some more ingredients to the stew. we've got the breaking news on the auto sales for july. phil lebeau, how did they look in. >> not great 16.73 million. that's the sales rate for the month of july. i think that makes the fifth straight month that we've seen a sales pace under 17 million vehicles for some comparison guys, july of last year, the sales rate was 17.81 million, so 16.73 million is the sales rate for last month. back to you. >> all right. >> certainly seeing that that in the stock reaction gm and ford down 2%, 3%. >> what a great time to buy a car. >> why, because other people aren't >> i bet you don't even own one. >> i do not own a car. >> never a good time to park in new york city. >> yeah. unless you can rent one of those parking spots. >> yeah, i guess even that's expensive. >> she's looking at me like where is this going? >> going to the closing bell exchange

with the dow up 72 points, the chief investment strategy at jenny montgomery and steve grasso from post nine and rick santelli gheks from the cme in chicago. just from march to now, from 21,000 to 22,000, this market continues to move on. >> always have a big benchmark series of data points in the indices we get there quicker don't get there quicker, do the ebb and flow, but to your point you have to hit that number before that number is counted, and you check that box, right? i totally agree with you we're making a lot of headway. rotation is the key for me though do we see all eyes on apple right now. if you see apple have a stellar print and the stock continues to fly high it's going to be very difficult to switch out of f.a.n.g. and go into energy. not as sexy. >> you know what is sexy right now in terms of groups and rotation is telecom. i'm watching that group lead while autos continue to get

hammered on these latest set of results. how do you play the rotation, and are you moving money around as we see it continue to switch? >> well, sara, that's a little bit of a difficult thing to do when telecom at the end of day is two stocks, at&t and verizon. hard to imagine they aren't already in everybody's portfolio in some way, shape or form there. is merit in rotation of a broader sector like financial and like energy. contrarily we've been bullish on energy for several months, and it's starting to pay pitch tends by way of the supply demand balance working in favor of oil prices and dragging along with it the energy patch, and also some of the financials, namely one we like at citigroup which along with many others have passed a series of stress tests, and we think it has a good balance sheet in the way to restore capital shareholders going forward, so i look for that to sort of reassert itself in the second half of this year, that pro-cyclical trade went dormant in the first half of 2017 i look for better conditions in the next couple of quarters.

>> meanwhile, rick, finally an uptick for the dollar index, but also a pretty healthy decline in the yields here. the ten-year down to 225 last i saw. what's going on here >> yeah, no, we dropped four basis points pretty much right around the time we were getting ready to open the equity markets. you know, just drifting a bit. i think it's more the aftermath of last week's meeting than anything else. just kind of getting its gps back just while continuing to pay attention to the psychological areas from here. of course, 2.13 is the low close and 2.25, spent some time there. it's a significant area, but i'll continue to make my focusing the euro currency while the dollar had a small little itty bitty rally today, a minor setback for the euro, although yesterday was its first 118 handle close since january of 2015 and still last i looked was supporting the 118 handle. just consider this h.118 handle, two and a half weeks ago, which would have been what, july 13th,

we still had a 113 handle. on june 26th, a little over a month ago, it was trading with a 111 handle settled at 111.80. a spectacular run but a little different. look at the kak, the daxx, the big european bursds are not on t on the high like the dow we want to pay attention to the relationship as well. >> engineer non-exporters closed lower for the month. rick and i had this debatier curious what you had to say, grasso does any of therefore have to do with relative political uncertainties between the u.s. and everybody else, a play on inflation? what's driving the dollar down >> i don't know if it's anything to do with politics but i'll push back to you and say what classifies at politics, you know, because fed policy is going to be politics to some people not politics to others.

>> we'll play semantics now. >> going to play semantics a little bit. >> politics is -- >> depends on what politics is at this point. >> it's the implementation of the trump agenda, the trump trade. >> shower, but the problem is he hasn't gotten anything passed yet. >> that's my point >> so for us we all know there's supposed to be a tightening that's happening, that really is it going to be -- is it going to happen as quick as they say. we all know about the politics of the trade we all know he can't get anything pass, yet the s&p and the dow, right around record highs. august, having said all that, august is a tough month for the overall markets. we've all been calling for this selloff. who knows when it happens. i've been investing in the market i'm still at 98% in the market i haven't pulled money out just yet. >> we've got to go right now mark we owe you an extra question we'll get that to you next time when we come along some news we have to get to at some point thanks for all joining us. >> we're monitoring the president. president trump about to host a small business event at the

white house. you're ylan mui joins us now with a preview of what we can expect ylan. >> reporter: there are literally dozens of small businesses invited to this event. they come from the manufacturing, retail and even transportation sectors now, this event will be hosted in the east room by president trump, also attending will be his daughter ivanka trump as well as small business administrator linda mcmahon. both of them are expected to make remarks now, some of the other attendees at this event will include president trump's new chief of staff john kelly as well as jared kushner and nec director gary cohn. what we're told is this meeting will focus on economic growth and job creation now, to support both of those things white house press secretary sarah huck bowe sanders just urged congress to make sure that it raises the debt ceiling as soon as possible she says that's needed to promote economic growth as well as fiscal responsibility over on capitol hill senate majority leader mitch mcconnell

also signaled that had lawmakers are starting to focus on this issue. he said that they are looking for a way forward in the next month or so. how exactly both the administration and lawmakers would try to approach this issue is still unclear what we do know is that time is running out. the deadline to raise that debt ceiling is september 29th, according to the treasury department so lots on the agenda here still in washington, even as we head into august. back over to you guys. >> yeah, that doesn't leave a lot of legislative days on the calendar after the august recess, ylan. >> small business optimism really jumped after the election there was a lot of good feeling and confidence about the trump agenda and the republican congress what's happened to that since health care failed to pass since we're waiting on details of tax reform and plenty of other distractions around russia and everything else. has it been dented is he likely to face some tough questions about that >> reporter: yeah. there are a lot of challenges facing this administration in terms of getting its legislative

and economic agenda pushed through. one of the key questions for the small businesses will be what happens to the pass-through rate r.president trump has assured small businesses that they will not only lower the tax rate for big corporations but also that pass-through rate that affects so many small businesses as well but one hangup in that debate could be exactly how they write the rules to ensure that the wealthy don't take advantage of that. >> all right, ylan, thank you. the president coming in right now to the east room with a lot of dignitaries, a lot of members of congress who are involved with the small business administration, linda mcmahon, the sba administrator, ivanka trump is part of this. the sba is entering into its 65th year of existence as it continues to try to help what they are calling the engine of the american dream here's the president. >> thank you very much it's a great honor to be here, this magnificent house known as

the white house. we're pleased to welcome members of congress and so many incredible entrepreneurs to the white house to celebrate the work of the small business administration as it enters its believe it or not 65th year. i'd like to just say that senator jim risch is here, jim, thank you very much, marco rubio, a strong competitor, i will tell you that, senator joanie ernst who has been my friend for a long time, and we appreciate you being here, and they love you in iowa, don't they, hu steve chabot, where's steve? and mike kelly good, mike, thank you very much for being here all of you, we really appreciate it i want to thank administrator linda mcmahon for doing a tremendous job helping small businesses all across our country. she has been incredible. known her for a long time and

her husband and herself built an incredible business. she's determined to transform america and american dreams into reality. we also want to thank my daughter ivanka for her incredible work on behalf of small businesses and women entrepreneurs. and this is really a fact, and i've read some of these stories, but they demonstrate what it takes to succeed you thrive because you found something that you love to do, pursued it with all of your heart and never ever gave up so important you just don't give up america is on the verge of a golden age for small business. we're ending job-killing regulation those folks know that very well, and we're really ending it at a record pace, i'll tell you,

right? [ applause ] >> we're eliminating the tremendous, the massive restrictions on american energy and numbers are going to be released next week that are going to be earth-shattering as to what we're doing with energy and the amounts of energy we're producing, far greater than ever before, and pursuing bold tax cuts so that our companies can thrive, compete and grow [ applause ] our stock market has reached an all-time high today, all-time high think of it. nobody ever talks about it they don't talk about it [ applause ] i keep telling general kelly, come on, let's go. you're chief of staff.

they don't talk about the all-time high stock market and they don't talk about another factor, that unemployment just hit a 16-year low. they don't want to talk about it [ applause ] and y and i think to me maybe the biggest is gdp at the quarter just released at 1.6%, so that's so much higher than anticipated. remember, i was going to say we're going to try to hit 3% over the next period of two years. well, 2.6 is getting closer, gary, closer than we thought and a lot faster than we thought, but don't worry about the 3, we're going to be higher than 3 in the not too distant future, too. [ applause ] so we're setting economic records and we're very proud of it, and, you know, it's a very big thing and the jobs are

coming pouring back. factories are coming pouring back no our country, into our country. jobs are coming back you saw the foxconn last week. they will spend 10 billion, but he's one of the great businessmen of our time, and i think the number is going to be 30 million so he told me off the record, he thinks he -- 30 billion, think of this. he may go $30 billion investment but he told me that off the record so i promised i wouldn't tell anybody [ laughter ] that's called big business, by the way. that's big business. you'll be big business got to start off small, but you're going to be big like that he started off small, and now he's about the biggest i want to thank foxconn and the group. they are spending a tremendous amount of money in wisconsin and other places, and they have been fantastic. together we're unleashing a new era of american prosperity, perhaps like we've never seen before, and you see it day by day. you don't hear it too much from

the media, but i think the media is going to actually be forced to cover it pretty soon. they will have no choice i'm very inspired to be in the company of such motivated entrepreneurs, peek, people that i really respect because i know what it takes. i've been there, and believe me i know what it takes you are the dreamers and innovators who are powering us into the future. that's exactly what you are, and my administration will be there with you every single step of the way and so will these people right here [ applause ] every single step of the way, so thank you. thank you very much, everybody ness. >> the president addressing a number of small business owners there in the east room clearly he doesn't watch cnbc as much as he used to. >> nobody talks about the record high stock market? >> we do.

>> and the unemployment rate and so forth you know what i love about the small business events that they hold, you get the list here of the people who are there in the east room who own these smell businesses there are locksmiths, an electrician, an owner of a thai restaurant, a small trucking company, a public relations firm, trop cool smoothie, i mean, the creator of the american dream. >> america is on the verge of a golden age for business and talked about some of the policies that america is pursuing to help small business which is something they have been all over. these are some earth-shattering numbers that he says will be released next week on energy production pursuing tax cuts which i'm sure this audience likes to hear and went into the stock market and the 2.6% economic number which was a

quarterly number, close to his -- >> double what it was the first quarter. not a bad number we'll continue to monitor any reaction from the president and also this market and we're 40 minutes from the closing bell about. the dow is a standout. has hit a record high as president trump said today inching ever closer to 22,000. we'll see what happens in the last 40 minutes or so. s&p is up .2 being led by telecom thanks in part to the large sprint to profit coming up, we debate whether you should be owning or selling the stock ahead of earnings which are due out the next hour. >> plus, facebook bought a startup that helps make chat bots smarter when we come back, how the rise of the bots could change facebook's messenger into a huge business. >> and, of course, we want to hear from you. you can roach out to the show on twitter, facebook or send us an e-mail is it a good time to be buying a

car? as bill suggests. >> it's a heck of a time to be buying a car, and you can pick up a copy of-at-leisure tnkfothplo. >>has r e ug download it online it's free. you're watching cnbc, first in business worldwide [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.

they are the natural borns enemy of the way things are.

yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful. positive day for stock the s&p is a couple days away.

nasdaq is up 9.5 with apple rallying ahead of their earnings and the russell up 2.5 points. let's check on some of the other movers in today's market shares of spirit air taking off or jpmorgan went from upgrade from neutral shares down after a weak earnings report but today up 4.5% and regeneron was cut on expectations that the company may be too high for treatment for adults with moderate to severe eczema. that stock down 2.6%. >> facebook recently shut down a program where bots started communicating in their own language julia boorstin has the details how scared of this should we be, julia? don't be scared facebook did

shut down an experimental ai program but not because they were concerned about robots taking over the world. facebook has been training bots to negotiate with each other to help people them to messenger users. when they realized they made a mistake by failing to get them to communicate in english but rather than our shorthand they shut the program down. bots are increasingly important to facebook, they bought oslo to give recipes and recommend restaurants and movie showtimes and other thing. they will integrate the oslo team to help ramp uppies messenger tools. bots are key for facebook to try to make more money off of facebook it's a top priority. if the bots work they will enable companies to communicate with consumers, and they will also help keep the messenger users hooked but they need virtual assistants that are more

like her and less like how back over to you >> elon musk, bill gates, stephen hawking, mark cuban the other day warning about the dangers of ai and the rise of machines. >> for more on how concerned we should be, let's bring in martin ford, author of the book "the rise of the robots" and a product manager as well. i think it's the idea of the bots coming together and starting their own language that got a media attention. sounds like a sci-fi movie can you explain and why we shouldn't be afraid of it. >> basically facebook set up two systems that were intended to negotiate it each other.

that's not really surprising this isn't any particular reason that two machines should speak in english unless we tell them to do that, but it's really important to recognize that these were very specialized systems that were set up to negotiate prices, and that's all they were going to do. they are not going to wake up and take over. i saw a lot of stories in the media that facebook shut these down because they were worried about what's going to happen h.i don't think that's the case. i think they should it down because it basically wasn't doing what they wanted it to do. they wanted it to converse in english. this is progress but not to be worried about. >> but is it symptomatic, this one bots talk to each other and it wasn't useful so facebook shut it down to use that term, but is it symptomatic of the fears that stephen hawking and bill gates and mark cuban and others have about how the technology could get away from us. ?

>> well, you know, i think the real thing with ai it develops very quickly, and -- and, you know, even industry experts sometimes don't exactly know what's going on with it, and really what we need to be thinking about are the frameworks for legal and ethical decisions which have to be made when these things are so advances and we don't necessarily know what's going on. >> that's happened so often. the technology gets ahead of the lawmakers and so on. >> to martin's point, the example of sort of two chat bots talking to each other, you know, not that big of a deal but if we think of a chat bot on a suicide hotline or as we go into autonomous vehicles, there's any them of ethical dilemmas in terms of impact and cars deciding who to say, if you will. >> how would you characterize the speed, martin, at which ai is evolving and what that means for some of the practical use

cases? >> it's true it is evolving very rapidly, and i think some of those concerns are legitimate on the other hand, you know, looking to the government for a way to regulate all of this is misguided. i think that we've seen that the government is not going to be able to keep up with all of this either we have to rely on companies to be responsible and this may be one demonstration of that. one reason that facebook decided not to go in that direction is they wanted to build a system that was transparent where they could understand what's happening and that's one of the most important initiatives happening in ai is there's an increased emphasis on building systems. not black boxes that don't just do something we want to rather understand what they are doing and that's become quite an important focus of research are. i take that as a positive and that's one of the ways that we'll address these concerns >> do you have fears >> i think the same fear is that

all of the rest of us -- >> what would be your biggest fear when it comes to the evolution of ai. >> so i think these well-scoped projects such as a chat app where we know we want to know this to talk to another human where it has to be able to understand and these are well-scoped products where we can understand that space. a lot of open-ended questions where people are training the real essential artificial, we don't really know where to go and either one we don't really know where it's going to get. >> we'll let the bots solve the problem. they can figure it out. >> r.j., thank you martin ford, thanks for being with us as well. >> time for a cnbc news update right now with sue herera. >> hey, sue. hi, bill, hi, sara vice president pence and wife karen arriving in montenegro aboard air force two

they were met by the country's prime minister the vice president is wrapping up a multi-stop tour of smaller european nations to reassure them that the u.s. will back them against any border incursions by russia the turkish trial of nearly 500 suspects which includes a number of generals and f-16 pilots all accused of leading last year's failed coup attempt began today. u.s. based cleric gulan who the government blames for the coup has been named the main defendant in that case and will be tried in absentia mix spin electronics is recalling 263,000 liquid glitter mobile phone cases in the u.s. they are made for the iphone 6, 6s and 7 liquid and glitter can leak from that case. they were sold nationwide and online from october of 2015 through june of this year. and in sports news, the seattle seahawks signing strong safety kam chancellor to a three-year $36 million contract,

25 million of which is guaranteed chancellor would have become a free agent at the end of the year that is the news update. i'll send it back downtown to you guys, bill and sara. >> my giants need to sign a few more players to get themselves -- get the offense back on track again. >> well, i don't know. i'm a packers fan. go giants, go packers. >> yes, i know. >> thank you so much, sue. >> you got in it, bill. >> we've got 27 minutes left in the trading session here, sara. >> less than half an hour to go. could see unusual volume you say the mood in the market continues to be good we see that in another record for the dow. what's driving it? >> all calm in gotham city i've always said earnings is where the rubber meets the road and that's what'sfueling the economy and it's giving investors confidence that we are on the track that this market is doing well, and you're still, you know, seeing it broadly across a bunch of sectors, so

all good right now. >> well, that puts the onus on apple coming after the bell. where would you say the expectations are given it is a dow component. it's one of the best performing ones of the year so far and the,000 is the show shopper right now. >> an interesting event that's sure to come tech has been a big driver in this market that's lagged a little bit as of late but i don't think guys are afraid of apple. it's behaving well they are pretty well encouraged they won't get any surprises here today but overall it's just been a positive earnings season and we don't anticipate it will change with that one or any of the other runs coming down the road. >> tesla on wednesday, a few others. >> yeah. we'll be watching all those. it's interesting that -- that a lot of the macro data wasn't all that strong, but even in spite of that we're seeing good action to the upside, and as we look to the final last half hour here, we're seeing pretty good indications that we're looking to continue the trend into the

close. >> we'll keep an eye on that 22,000 level gordon, thank you. >> thank, sarah, thank you, gordon, very much r.26 minutes left in the trading session. the dow is up 66 right now we're about 43 points away from dow 22,000 you know, president trump, of course, ran his own private company. up next, we'll talk about the way whether he's running are the arofirto oe would fly with the bod decrsf a publicly trade company. stay tuned dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! and the wolf huffed like you do sometimes, grandpa?

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president trump has touted economic gains since he took office we just heard that this hour but how much credit should we get for those improvements our chief economics reporter steve liesman has been digging into that question >> reporter: economist say the president can't very much but some ways on margin he's helped in other ways than he's hurt most economists view the second butt better growth number has a bounce back from the weak first quarter and say these are early days for a president to influence the economy. the u.s. really has been an underperformer globally, maintained 2% average while the rest of the world has

accelerated and the numbers we are talking about now is what we expected before the election some of the positives and negatives that the economists have been citing first, deregulation. certainly haven't been any more regulation and the idea that some areas are deregulated could help business. stock market gains have led to a wealth effect that could be worth as much of a quarter percentage point of gdp over the next year. confidence and maybe more business investment. on negative side, policy uncertainty, the aca repeal failure has led back to push back the idea of tax reform, immigration and trade two policies unliked by economists the end of rising regulatory costs under president obama could be boosting business confidence and maybe soon boosting business investment add it up to a slight positive but it will take real legislative changes, guys, for the president to make a meaningful mark on the economy things like confidence and gains in stock prices, they can go away pretty easily >> steve

thanks very much in addition to keeping an eye on the economy, all the recent white house shakesups have had many watches many watching his management style former john mccain staff expressed concern over him running the country like a business. >> there's no business in america that runs like this white house and no ceo of a publicly traded company that would have not already been removed by his board if he acted one-tenth of the way donald trump did. >> joining us on this management discussion to talk about president trump as ceo of the usa, terry haines head of political analysis and managing director at evercorp and adam galinsky chairman of the management division at columbia business school. professor, what sort of grade

would you give president trump, and if he's judging himself as ceo of the country, how is he doing? >> he's doing a remarkably poor job, and i think part of problem is that his managerial style of a privately owned company has not transferred well to this publicly owned united states the company that he had before was relatively small, had unitary power and a defined set of stakeholders and was in a pretty predictable environment now he's facing a complex organization with lots of stakeholders with an unpredictable environment and separated powers, and he has -- his managerial style that grew up in this very specific environment has not transferred well at all to this new environment. he uses threats. he uses coercion he, you know, doesn't use persuasion he uses commands, and what he needs to do in this environment is use favors and persuasion and even recognize that even his simple gestures that complex

collateral effects. >> terry, let's face it. nothing prepares anybody to become president of the united states i can remember when ronald reagan took office he was the first run referred to as the possible ceo president, and he had that troika running the white house with ed meese and jim baker and miand bill dever. he will stumdbleed, i'll worry if they are having problems three years from now, not the first six months what the do you think? >> bill, that's a very good intro and thank you, and hello, sara what i think fundamentally is that if -- if this was a business, what you're seeing here is a hostile takeover, and the new owners don't quite know what to do with the new business, but they are learning, and general kelly's appointment on friday is the clearest evidence that they are learning and probably to the good you know, what you've got here is -- is an administration

that's feeling its way and doesn't really have a -- a serious thought out playbook but issism vigs, and they are gradually trying to figure out exactly how to deal with washington importantly how to goose congressional republicans along towards unity and towards policy achievement. they are is that righting to get that. >> yeah. >> i think -- i think kelly's appointment may well be a watershed in that regard. >> adam i was just going to push back against some of your thoughts i -- i get your points on management skills, but often ceos are graded on their share price performance, and if you look at the stock market, we continue to hit record high after record high, something that the president talks about, and i think there's a big reason why. >> that's a great point. i mean, i think there is obviously some positive grades in terms of stock market performance, but as was just said in your previous segment, stock market gains can evaporate overnight. it's much harder, for example,

for dramatic increases in employment to evaporate overnight, and i think that what the problem is that all presidents set a precedent in their early days of their administration, and it's very hard to overcome some of the reactions that -- that we create -- the resentments that we croat and the styles that we create, and i think he'll be in long-term trouble unless he can turn around those processes of persuasion more quickly than he's been doing so far. >> gentlemen, we need to go at this point terry haines and adam galinsky, thanks for joining us today. appreciate it. >> thank you so much. >> nobody has been talking about this, but the dow is it in record territory right now. >> actually the s&p itself is not too far away. >> a couple points away. >> about two, three points away from its own record close. under armour is not participating in this rally. it's falling more than 9% now, wow, on mixed earnings, disappointing guidance what had the company needs to be etr u ouanight this ship, d whheyoshld be buying next

as you saw before the break, shares of under armour down 10%, touching its lowest level since

august 2013 after the company announced mixed earnings and cut its sales forecast and the company slashed its full-year guidance between 27 and 37 cents a share between analyst estimates of 42 cents. also highlighted its restructuring plans to try to get out of the sales slump it has been in. >> ceo said we've identified a number of areas to enhance our operational capabilities and drive process and gain greater efficiencies job cuts though are also part of the restructuring you mentioned, bill 2% of the global workforce expected to be cut, 280 jobs the sales and earnings for the quarter was actually a little better than expected at 9% sales growth what was really disappointing and surprising for investors and analysts who cover this one. foot weigh sales were negative this was supposed to be a big hope steph curry shoes, the big new frontier it was growing fast. north america was flat the guidance was lower just a bit and restructuring. yes, it's happening across

retail yes, it's even happening at its big competitor nike and when you think under armour you think 40, 50 times earnings. that's where it was trading. you don't think of a company in the middle of restructuring during fast growth and cutting jobs. >> big sports outlets like sports authority hasn't helped, that's a nike problem, adidas problem and everybody else now you see under armour selling in cole's department store. >> working for them and they are growing their business, but a lot of people think it tarnishes the brand. >> doesn't fit the brand they were trying to position before, but we'll see if it works. got to do something >> at das is still resurgent reporting results on thursday but they pre-announced higher, hand that's been a major competitive force. here we are, ten minutes to go before the closing bell. we are on dow 22k watch. we're on s&p, what is it, 2477.83 would be a record close

and gaines in the nasdaq and russell 2000 as well. >> up next, buet a aa lnd bear n apple weighing in on the tech giant stock coming up. [car tires screech] [bell rings] (upbeat dance music) (upbeat dance music) (bell ringing)

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art cashin just stopped by to tell us the dow up 79 points, 39 points away from dow 22,000 but we're in record territory. i don't know if you knew that. >> we're on the s&p 500 as well. >> very close. >> a few points away from that, as well. >> meanwhile, apple up nearly 29% this year. it's going to report its third quarter earnings after the bell tonight with much of the focus set on the anticipated iphone 8. is now the time for investors to buy or sell apple? >> well, we've got a bull/bear debate and joining us it is peter karasaraen and abai from securities usa any clues you'll be looking for in today's results for the fall release that could help answer

>> they probably won't talk much about that apple's style not to talk about product releases and what we're looking for today is the results and what the guide for september quarter, but a lot of the supply constraints might show up in the next quarter >> what shall we look for in terms of the guide as for clues about the upcoming release >> yeah, right now people are looking at about $49 billion of revenue from them. we think they are going to kind of guide in line and that probably implies 45 million to 47 million and it doesn't give us much indication of how the initial launch could be, but that's -- if they are in line with that, i think people would be satisfied with the results. >> okay. peter, you're our bull so make the bull case for apple right now. >> well, for me the bull case for apple is really the big opportunity of fiscal '19, but i understand we're talking about the quarter. i actually via different view.

i don't think the quarter and guide are going to matter a tremendous amount because the iphones won't be evident in either in fact, i really think that the guide is going to be below street numbers the consensus is steal and doesn't represent the supply constraints which have been well discussed and well reported. >> so what i hear you saying is that you're willing to endure and what you are expecting maybe to be a speed bump and look longer term for this company, is that the idea? >> absolutely. i look at fiscal '18 numbers, and i don't see a super cycle necessarily reflected in the consensus, and to be honest i don't really see this as a super cycle boom/bust psych. i see this as a super investment cycle where i actually get a couple of years with a two-year rollout of phones. >> all right we've got to go at this point. we're heading to the closing bell thank you both for joining us today. we'll get ready for the apple numbers here up. >> next though, we're coming

right back with bill's closing countdown, and then it's time for the main event apple earnings second best performer of the dow jones industrial average which is set to close at a new record >> dn'gh iidt know that. >> second best performer of the year we'll be right back on "closing bell." ♪ ♪ ♪ ♪ (dance music)

(large boat honking) ♪ i'm living that yacht life life life life ♪ top speed fifty knots life ♪ on the caribbean seas ♪ it's a champagne and models potpourri ♪ on my yacht made of cuban mahogany ♪ gany, gany, gany ♪ watch this i'm phil lebeau with break news on boeing cnbc has confirmed that the

company is close to finalizing a deal to sell two 47-8s that would be part of the air force one project. back in december the president criticized boeing for an air force one contract that was way teams pensive, threatened to cancel it at one point guys, the irony of this deal, the 247-8s have already been built, in storage in the desert in california. once scheduled to be part of a bankrupt russian airline the airline never took elivery but now they are close to being modified and will be part of the air force one fleet. guys, back to you. >> oh, my. so many things we could say but we won't thank you, phil lebeau let me show you the dow very quickly. we're not going to hit 22,000, but we are in record territory, and ironically boeing is not participating today, bob pins be that's the one that got us here and oil down today bumped its head on $50 yesterday and pulled back today. >> and we point out another day,

dow up, transports down. those auto numbers were terrible and the railroads were all down today and auto and now energy, oil a tough situation for the transports. >> once again, the dow is the lone record close. we've got more on that, and those earnings from apple coming up on the second hour of "closing bell. >> and welcome to "closing bell." i'm sara eisen in today for kelly evans. another record day on wall street here's how we're finishing up the session. the dow jones industrial average was the show stopper all day long and managed to close at a new record high, though just shy of that 22,000 level big round number for the first time ever. s&p 500 was strong into the close and finished higher by a quarter of a percent and did close just shy of its all-time high the nasdaq compose composite and

same with the russell 2,000, apple releases third-quarter results. we'll bring them to you as soon as they cross, including reaction and plenty of analysis. joining us today, cnbc senior markets commentator michael santoli, portfolio manager and portfolio manager at pimco welcome to all of you, as we await these apple results due out in half an hour. a new record for the dow, strength in the s&p. was that driven by f.a.n.g.? we've got a new little leadership group going on. >> it seems like that. it's still grinding its way higher, finding a way. i think of it as that team that doesn't have its best players on the need but still finding a way to win the s&p has basically held its ground for two weeks and the dow has made some progress s&p holding still as earnings come in really much better than expected and you can't really complain much about it i think had the question is how much of it and the market is the kind of trying to tell us and

the market is trying to tell us how much is priced in h.kind of a well-earned rest by the rest of the broad market. >> let's get some of the hits, runs and errors on this day on wall street. bob pisani back on the floor of the new york stock exchange. >> once again, the market leadership rotating a little bit in the first trading day of the month. that's a good time to rotate the market leadership. this is what's been moving the markets all year long, this rotation, so let's look at dow lag yards on the year that have suddenly become market leaders today, so, for example, intel has been a lagard. it did well. a big lagard all throughout the year and verizon and other lag yards, great since the earnings came out and goldman sachs, down on the year. did a little bit better today and then there are the dow leaders, the companies that have led us forward they lagged today. caterpillar and mcdonald's and boeing the three biggest names in the dow in terms of percentage gains all down. that's rotation, folks boeing here has been a monster in the last really several

months here, up almost $10 and just in the last few days you can see pause today. you'll see if that changes the dynamics of the dow. a lot of heavy volume today on the first day of the month and big sector etfs. they were buying into certain groups today, including industrials, consumer goods, basic materials and financials all had much, much heavier than normal volume. 300%, 400% on average. i wanted to mention the divergence we've been talking about all day. the transports and industrials transports have been down rather notably ever since the earnings started coming out and industrials hitting new highs and, of course, dow theorist will note that this is not a good sign, particularly after the transports hit record highs. guys, back to you. >> a lot of people watching that weakness in the transports let's talk about some of the economic data coming in, tony. it's interesting that we see the record highs in stocks on a day when auto sales were a big disappointment, sharply below forecasts, spending, didn't really pick up in terms of the

income and spending numbers. manufacturing gauge fell short saw a little reaction in the bond market. but is there a devergence between the economy and the stock market >> well, this has been the case for some time. i was looking back at a blog i wrote for pimco six months ago when we noted dow 20,000 probably didn't mean as much to the bond market as it did to the stock market the bond market then, the ten-year treasury, was priced at 2.46%, and here it is about 20 basis points lower in other words, the bond market has been less than impressed by the outlook for the economy. it believes that there's been no permanent change in the trajectory on growth and, therefore, there should be no change in the view about where the federal reserve will ultimately wind up putting its federal funds rate its policy rate so the view in the bond market is to accept the idea of the new normal which is a subpar growth versus historical averages and the new neutral, the idea that policy will stay low for some time.

>> michael, are you comfortable with the leadership change in this market as the f.a.n.g. stocks falter a bit and we see industrials and some other companies, good old meat and potato type of companies leading the way here >> yeah, investment i mean, i think the growth, the high-growth companies like the f.a.n.g. will perform long term because they are great growth stories, but, no, i think some of the sectors that haven't kept up with the rally over the last couple of years, you mentioned them, financials, industrials, materials, energy. that's the place to look for the long-term investor right now because they haven't kept up, and if you want to ride a gain to come and not the one that's already passed, that's where you want to be, so the rotation makes absolute sense to me, and it also makes sense to me consistent with maybe improving global growth. u.s. growth still anemic at 2%, but it is growth, and a benign interest rate environment and potential for benefits and tax policy so it really makes a lot of sense right now. >> let's dive into the earnings

question because that's what's fueling the stock market and as you mentioned many so of the new leadership in the market under armour certainly did not get it done, but where do you see surprise pockets of strength, and what is the quality of those earnings given what we were talking about with some of the macro data >> the quality is reasonably good multi-nationals in general have a little bit of a tailwind and you see the top line beats which is impressive. in terms of sector pearl formance, i think financials being up as much as they were, without help from treasury yields, is also telling you that you're kind of firming up in terms of the sustainability of these earnings levels right new and certain pockets of consumer discretionary. sara, you mentioned under armour, company specific, they have run aground but travel-related stocks have all been very good performers on the earning side and stock side and i think you can find it. then, on the other hand, you have to have autos, bad monthly numbers and the stocks get punished it's a selective market that's failing to hit up. >> telecom is another one of the

stronger once, sprint springing to a profit. >> tony, my friend, i haven't talked to you in quite a while do you think this market is prepared for more tightening by the fed? mean, the dollar continues lower, and the stock market continues higher here. that doesn't act like a market that's ready for more -- for higher interest rates. >> well, it is ready for higher traits it's priced for higher interest rates. it's just that it's priced for those rates to not go all that much higher. the markets are thinking, the federal funds rate will go maybe in the 2s. in the last cycle it went to 5.25 and in 1995 to 6.5, so in the context of history, the equity market is quite comfortable with where the fed will ultimately wind up putting the policy rate and only if that changes. there's a sense that the u.s. economic growth will get out of the new normal funk and would that view change, and so the equity market can hold up in the face of this that all said, we would at pimco

recommend derisking, good historically to be a liquidity provider and not a taker the world wants what you've got and whatever you've got that's trading well and that might be overvalue and should look through your portfolio very carefully. you might want to give up the world, and this isn't to say that we'd go underweight on credit and reduce to overweight and be very selective about what we hold. >> michael kujno, it's one thing to have a bunch of earnings beats. what are you getting in terms of guidance with some policy, uncertainty going forward and maybe some uncertain headwinds are you getting what you need to hear out of the forecast >> for the most part mike mentioned about earnings and revenue beats, and i think one thing that's characterized this earnings season so far is that we're getting earnings growth we're getting better revenue numbers, and i think that that provides a solid foundation. we talked about sector rotation a second ago three companies that we own reported today, air products,

versum chemical and ip electronics. all three beat handley on the revenue number and earnings number and those are rotation-type sectors that we talked about yeah, i am comfortable certain industries have better guidance than others o.under armour was an example today that didn't provide very good guidance, and the stock was punished proportionally, but i think buy and large the companies that are doing well and seeing revenue growth and earnings growth and providing guidance are seeing the results of that from investors, and that is a positive. >> and a half. i mean, i think the guidance as a whole has held up well the issue as a second half has much tougher comparisons versus a year erlerier. u.s. gdp was up. >> contrary to what the president said, 2.6 was something we thought we'd never see in years. >> 2.6 has been pretty much been the trend for the past six years, give or talk, but you did have a comeback quarter in the

back half of last year. >> who was that, tony? >> that's true. >> no, it's michael. the average annualized gdp number has been high 1s and low 2s so we've had a quarter here and there that's been above that but the average has been around 2 and honestly nothing has changed. one interesting thing about this earnings season is that you've had earnings and revenue growth that have really been better than sort of gdp growth hand that would probably speak to company productivity and an ability to squeeze more ref now out of revenue dollars to get a more sustained longer term rall rei think we'll want to see the pro fiscal, pro business and pro tax policies take hold to really drive a prolonged further run from here, so that is a risk factor going forward, and mike is right the comparisons get tougher. we're now if i think the third or fourth quarter of better earnings after an earnings recession so things will get harder very quick. >> i michael, good to see you

again, thank you tony, don't be a stranger. >> thank, any time. >> see you later >> we do have earnings out for fire eye and deirdre bosa is covering those results. >> reporter: the security software company beating big on both the top and bottom line, revenue coming in at is 45.5, nearly $10 million more than what the street expected also, lower loss, street expecting four cents expegs the 12 cent loss and billings coming in higher than expected at 172 million versus 168 which was expected this. company has seen an executive shake-up earlier this year that sent stocks to record lows, but it's up more than 35% since mid-march and shares in the after hours are up nearly 6% and should note that it's also been under pressure this week as the company has been investigating a potential hack at the company itself of one of its employees guys, back to you. >> deirdre, thank you.

>> good gain. >> up nearly 6% as deirdre mentioned. >> apple finishing the day higher ahead of its earnings report that's due out in about 15 minutes. we'll have the numbers and the instant analysis coming up here. >> but first, we've got to talk about sales. cars are sitting on lots now for more than two months, and that's the longest amount of time in eight years. up next, we'll look at what's behind this slowdown >> you should buy a car. >> you told me that before. >> you should buy a car. >> you know i'm a terrible driver you don't want me behind the wheel. i'm waiting for autonomous. >> mr. eisen can drive the car. >> that's true he's a good driver. >> we want to hear from you. reach out to the show on twitter, facebook, send us an e-mail, auto sales, apple. >> this is the sound track of sara driving right now, by the way. >> you're watching cnbc, first in business worldwide. ♪

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[ music plays again ] a smarter way to wifi is awesome. introducing xfinity xfi. amazing speed, coverage and control. change the way you wifi. xfinity. the future of awesome. shares of automakers fell today on steep sales declines in july gm, for instance, saw a drop of 15% in sales from last year. fiat chrysler posted a drop of 10% and ford's july sales dropped 1.5%. >> let's talk more about the said of the auto section

joining us is a kelly blue book executive and the editor of the revs institute what's going on? how much does this malaise last, do you think >> well, we're rediscovering the truth that the automobile industry is a cyclical market, and we've had seven great up years. look, these sales numbers, the pace in june was about 16.9 million vehicles on an annual sales pace basis of course, it was down burks on the other hand, a year ago it was a huge 17.9, and the other thing is that general motors and some other companies are cutting back on fleet sales and daily rental fleets deliberately those are minimally profitable sales. there were some signs. inventory levels and gm were still pretty high, more than 100 days and 65 days is comparable, but this is not a disaster by any means, it depends on how the companies manage it from here forward and from a macro economy standpoint not a disaster.

>> so characterize it from a company performance. who is navigating through this slump the best and when are the different strategies here? >> we're seeing a varietyof different strategies for different companies, you know. paul hit the nail on the head when he talked about rental strategies for some of the domestics in particular. they are unwinding some rental sales because they are lower margin fleet sales are still up a little bit, especially in the commercial areas, but it's not all doom and gloom like paul said, right. it's still a very strong point for the industry, you know we're looking in well over 16 million sales. you look at companies like honda, for instance. their car soles were actually up this month, and, you know, that's a rarity these days which is a great thing for honda toyota up as well and we're seeing some strength in different parts of the industry for sure. >> hey, paul, good to see you. mike santoli here. >> hi, mike.

>> all of this sonds very reassuring it's good context in terms of how the cycle might be playing out. i do think what's evident on wall street is the this sort of shadow of a fear that we're dealing with more than just a cycle. something structural is going on that longer term we won't see the same strength in cycles in gasoline-powered cars or whatever the kind of scare story s.do you think that all the companies are in a position right now of really bracing for something like that? >> well, the companies are trying to, mike. they have to earn their current business and also get ready for a future that has four simultaneous profound revolutions going on there's the propulsion revolution which is the switch to electric and that sort of thing. there's a connectivity revolution and also the autonomy revolution, driverless cars and who knows what that means hand finally there's the community, the ride-sharing revolution so -- so this is enough to spook wall street and no doubt about

it investors for the near term, the question is are the dividends safe and it looks like the cash flows are pretty good right now to protect the dividends for a year or two anyway at this pain, and they are pretty rich yields compared to what you can get elsewhere in this market. >> one of the ancillary stories, one of the side bars here is the -- what's going on in the used car market. sales are depressed, prices are depressed. i mean, isn't that symptomatic of a bigger problem than just a cyclical downturn in this industry >> yeah, i mean, i think one of the biggest issues you're seeing in addition to pricing is that, you know, you have new car leagues, for example, that's at or near all-time highs and so you're going to continue to see this used car inventory increase as the coming months go on and as the coming years go on so it's going to be a question of how automakers respond to the fact that used car inventories are going to increase.

the fact that that pricing pressure is then going to put pricing pressure on new cars as well the thing -- i think one of the key things though is that now this gives consumers options, right. you have more used cars than ever you have stronger new car product than ever. you have, you know, cpo, for instance, which is kind of an understated aspect of the whole which is doing quite well so the good news for consumers is you'll have all these different options now and you'll get your pick of the litter as far as the kind of car you want, the price you want and it's not a bad time to be in the market. >> yeah. he agrees with you paul, last 20 seconds here how long do these cyclical downturns usually last for the auto industry if that's what it is >> yeah, it's usually, you know, a couple years, maybe three, and i hasten to add that the up cycle this time has been about seven years, so we could be in a period where we have a longer downturn, and it could be exacerbated by some of these supreme court actual changes but

it's too early to panic yet. >> all right we won't and we'll get sara to buy a car yet. thank you both for joining us. appreciate it very much. >> thanks. >> we are getting ready. apple music, the app store, icloud, apple care, apple pay, these have all been solid revenue stream for apple services business. in a few minutes, we'll find out how much they contributed to apple's bottom line. one big thing that they will look for when earnings release. >> a troubling report about the streaming giant's debt load or future obligations, however you want to characterize it coming up in fast take.

time now for a snoebs news update with sue herera >> here's what's happening, everyone senate minority leader charles schumer inviting president trump to visit upstate new york after an interview in which the president said it was okay for people in that region to flee to their homes and move to had a better area with better jobs. >> he should come visit. he should come visit and see why poem love upstate new york so much i wish he were other today it's a beautiful day and he would see how gorgeous it is, and it's one of the prettiest, nicest places to live. great lifestyle, great quality of life. a lot of the old-fashioned values reign supreme so i think he shouldn't have said that. >> education secretary betsy

devos touring educational facilities in grand rapids, michigan she stopped at the van andel education institute to stress the importance of science, technology, engineering and math beginning today, starbucks congo coffee will serve as the foundation for its latest specialty beverage pepper nitro with a jerky twist. it will be available for a limited time only at the seattle roastery reserve which has been a source of inspiration since it opened in 2014 they say. you're up to date. that's it. back downtown to you. >> with a jerky twist. >> interested in the could have de, not the jerky. >> you don't have to worry about it, because you can only get it in one place in the entire country. >> i guess they don't deliver i guess. >> no delivery option. >> i was just going to say this is all about instagram. if they can pull off what they did with the unicorn which went viral. >> right. >> good marketing. >> except you can't get it anywhere else so they can do the instagram and it could go viral

and then everybody has to go to seattle. >> which they will >> what's bad about that >> can you drink the coffee, i'll have are the jerky. >> i'll take the pictures. >> the iphone rumor mill has been spinning. >> we'll see about the numbers when they are released in just a few minutes. we'll have that right here on "closing bell" right here hon cnbc who knew that phones would start doing everything?

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no one else lets you do that. see how much you can save when you choose by the gig or unlimited. call or go to xfinitymobile.com. xfinity mobile. it's a new kind of network, designed to save you money. let's take a look at how we finished the day on wall street. it was another strong one for stocks the dow jones industrial average in particular, it closed at another record high. that would make it its 31st record close of 2017. >> you sure? >> yes. >> we've confirmed that number. >> just checked. >> there have been many. the s&p 500 closed high by a quarter president and financials took the lead in terms of sector performance there. the nasdaq did close higher, up almost .2 of a percent and so did the russell 2000 the gains continue on this first trading day on the month of august, mike, and now we look ahead to apple earnings which could come any moment now, and

had been the second biggest dane gainer on the dow for the year. >> one of the biggest gainers on the dow and also down 5% or 6% from the high and the stock is in an interesting position, neutral position, i think, heading into this report. >> what will you be looking for? everybody is looking ahead to the next quarter, but we'll get this set of results. >> clues for timing and pacing of the iphone 8 and then services i think people really want to focus on that as a potential growth area. >> all right i think we've got the apple results. let's go to josh lipton at headquarters with the numbers. josh >> reporter: sara, apple reporting eps of $1.66 verse expectations of $1.57. revenue 45.4 million versus 44.9 billion. gross margins 38.5%. iphone shipments, 41 million that's versus an expectation of 40.1 million, ipads 11.4 and macs 4.3 million service is up 22% to an estimated 7.3 billion.

other products, the watch, 2.7 billion and spinning ahead to the q4 guide, sara apple saying to expect a q4 revenue between 49 and 52 bill yonel. the street was at 49.2 billion, ander pecting gross margins in q4 between 37.5 and 38%. analysts had modelled 38.3%. i did just have a chance to speak briefly to tim cook. he was pleased with that quarter, pleased with the products results are i asked him importantly about that q4 guide, and specifically a channel sell, and i said this q4, who it be like the other q4s we've seen in recent years basically you going to ship the same amount trying to get this answer analysts have about the new iphone and whether it will be delayed cook simply saying you should look at our guidance of again 49 to 52 billion and analysts should draw their conclusions from that. guys, back to you. >> that sounds like a bullish comment on the forecast, and as much of a clue as we're going to get. josh, thank you very much.

joining with us some reaction to the numbers. gentlemen, thank you our mike santoli digging through the numbers as well. ian, the guide action. everyone was looking for did come in at the high end of the range, all the way to 52 billion in revenues. what does that say about what they are expecting >> well, it's certainly better than expect pedestrian, but ultimately i don't think it matters that much. the big question is when will the iphone 8 actually going to get released and when are people going to do with it? ultimate lit question is are people going to pay 1,100 for a new phone or are they not, and -- and is this had the new iphone super cycle or is it not, and if it's not, which i think so, then, you know, ultimately we'll have to wait and see, but i don't think people are going to react either way too much on this report. >> david, you have a price target of 175 bucks which $20 above where it is right now. what are you thinking, and just from what you've heard first blush in these numbers, what do

you think? >> we were pleasantly surprised with the number. the current quarter was better than expected which i think we thought would play out, but a lot of analysts were looking for them to lower guidance for upcoming quarter because of the iphone 8 delays. that seems not to be the case. they definitely put forward some pretty aggressive or powerful numbers on the go the forward basis and then beyond that you do have the iphone 8 and a whole new generation of phones so we like apple here. we were recommending it about a year ago under 100 we liked it a lot more there because it was real cheap. now it's getting to fairly valued, but we think it's fairly value william weld momentum and good earnings growth from here so we think the stock should still have rhett pretty good upside. >> very quickly before we get to mike's comments on this. what do you think about ian's comments that he's skeptical that people will want to pay as much as $1,100 when it comes out? >> people won't be crazy about it, but we do think the phone companies and apple will figure out ways to do it whether it's a monthly pay over a three-year period like they have done historically for whatever reason people have been willing to pay top dollar

for these phones, and we don't think this current generation is changing that. >> you're talking about a 50% increase from what people are paying right now, an environment with no wage growth so it better be one h hell of a phone a lot of sticker shock if people are going to pay this. >> we've been surprised each time. >> apple has proven that it can sell at the higheren i wanted to point out two other data points from this relyrics mike, which investors were looking for in terms of growth driver services. revenue up 22% china actually for the quarter greater china revenues were down 10%. >> a little bit of good and a little bit of bad. >> that growth number sort of reinforces the view for a lot of people who want that to kind of overtake part of the story here as opposed to just being a hit driven hardware sale china obviously i think is an overhang i mean, i think it's still an open question and in terms of the new iphone i think there was some encouraging kind of read-through

from the fact that the "wall street journal" had something today, there was such low churn at the wireless companies in the latest quarter, and people thought, wow, this is great. many the companies have the competitive act together or people are just waiting. >> waiting in the weeds. >> waiting to change the carriers until the new iphone comes. i think the guidance is somewhat encouraging. i heard the guys on halftime saying the options market was applying a 3.2% move up or down for that for the stock almost exactly right there it shows you it was not the high stakes quarter for the stock. >> but it is higher. up 4%. >> exactly. >> certainly taking the bright side view of it. just isn't necessarily kind of revaluing the company in a dramatic way right now, and i do think there's a question because the forward valuation on a pe basis for apple, while still very reasonable at 14 and change, is at the very high end of its five-year reign the market hasn't proven it's willing to pay up a lot more. >> i hauls love looking at the ipad number, a big fan of the ipad, and they are lagged for

quite a while, but this time around, you know, they just introduced the new ipad approximate larger version, and they beat pretty handly. exec pecting 9 million shipments and they got 11.4 million. >> the first time in 14 quarters that ipad shipments increased so a surprised bright spot. >> the if you put something new on the shelf though, people will buy it. >> and the mac continues to show growth here as well which was also a bright spot sales rising 7% which is, what, we've seen that in a series of quarters lately. how do you factor in some of these other businesses into one that is dominated by the iphone and all this expectation of another one coming with some notable movement here from ipad, mac services, et cetera. >> well, i think mike is right the services revenue is very important and ultimately that's still linked to units, and you have to sell a really good phone, so to me there's one channel check you need to do and one only go to that -- to that apple store on fifth avenue about a week before the launch, and if

there's 1,000 people of dressed at darth saider in tents it's going to be a good launch >> we still do that. you still monitor the lines on fifth avenue even though you can order them online at like 3:00 in the morning >> the diehards will be out there. favorite "star wars" costume >> david, what about the other parts of the business that tend to get lost in the sauce when we focus so much on the iphone? what do you make of those right now? >> those all seem pretty good and ultimately it's the iphone that drives profitability that will drive the future growth the fact that the other businesses, services are, ipad, imacwere all good means the stock has a likely chance of trading higher and the real key is there going to be an uptake will they get the product out close to schedule, and if both of those two things are positive, we think the stock can easily drift higher. we're not looking at a down. we hi it has 15% to 20% upside over the next 15 months.

>> do you think they have to deliver it on time how many reports in the last few weeks is they were going to be delayed and there's supply issues isn't than already baked in? >> i said it's close to on time. doesn't seem like they will deliver it on time though today's guidance seemed more optimistic than most expected. >> do you dress as darth vader and get in line ahead of time? >> not yet if the stock gets to 300 and we still own it may be. >> thank you both. >> with a nice move in the after hours for apple, up more than 2%. >> the options market predicted. >> it should be -- that would be a new 52-week high for apple which it lagged. >> sort of broke out of that slump. >> maybe if it holds, plus i think people are fact oregon in the fact that the company's reputation for being conservative about guidance. >> people were also expecting a weak quarter this is tradition lit lowest point of the year in terms of demand. >> yeah, right. >> and it was higher than expected. >> higher than expectations but not the highest stakes quarter because year over year it wasn't expected to be a great growth

quarter. >> let's send it over to seema mody for another quick earnings alert. seema. >> let's inject biotech and sequencing illumina shares higher earnings 82 cents adjusted, well above what wall street was expecting and sales topping analyst estimates. the ceo souza says expectations of nova exceeded projections stock up, wow, 9% here bill >> yeah, wow thank you, seema see you later. so apple is up about 4%, a little less than that after reporting the earnings 4.5% now it's moving higher up next, a shareholder weighs in on the results and whether he's tethed to buy on the nbe seumrs afr is ♪

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hospital that accepts medicare patients. whether you're on medicare now or turning 65 soon, it's a good time to get your ducks in a row. duck: quack! call to request your free decision guide now. because the time to think about tomorrow is today. all right. apple up 4%, almost 5% after turning in earnings of 1.67 which was a dime better than had been expected. and we're going over all of the apple metrix i mean, pick your numbers. pick your metric they all beat for the most part. >> it's the guisance we like to look at, usually the lame duck quarter. we want to see with the new iphone coming out what it's going to look like

higher guidance, we're probably looking at a september iphone launch the other number that jumps out out at me is for greater china there's a 10% dip. going forward for them, if they are going to expand their market, that's a key roamingon for them to try to own or dive deeper into. >> unless that's deferred. >> deferred buying interest. >> if they take advantage of marketing, i think they could line up a whole lot of people for the iphone 8. >> and we should also mention that apple is now trading about its record intraday height as mike santoli pointed out ross gerber, are you a buyer on this result? worried about china? everything else beat, services revenue and that guidance looking forward. >> you know, we're long-term investors in apple we've been doing this for a long time, and, you know, if i have new money in here, apple gave me a little bit more confidence, you know, in their positioning

and overall execution this quarter than i expected so i -- i am positively surprised with these numbers. i'm really happy, but i really don't like that everybody in the whole execution risk is around the iphone 8, and i do think that there's a lot of risk that they are not going to get any sizable amount of models out before the end year apple is going to release like the phone on time, but i don't think they will have anything like the inventories that they will need so i really think that expectations with the new phone are maybe a little, you know, overboard, and there's so much reliance on it, but it's really going to trickle in over probably two or three quarters, this big super cycle effect, so, you know, we're -- >> ross? >> yeah. you just said you're a long-term investor and you're wringing your hands over whether it's going to be released this next quarter or the quarter after that i mean, does it make a difference >> well, yes, because this is their whole pony now, and, you know, the thing that bothers me is they have had all these opportunities to diverse fry, and they need new products in

the store. the beats acquisition was such a great move for them which was chronicled on all places hbo it really shows how smart good acquisitions are for apple i think they need to be in other businesses i think they need to diversify so we're not all out here praying four-game the iphone 8 to be something super special, you know. >> all right all right. let's get some more. we have maybe more color from josh lipton. what do you have, josh >> reporter: i just want to bring you guys a bit more from my chat with apple's tim cook. i wanted to ask him about greater china specifically i heard you guys talking about that you saw greater china ref two was down 10% that is the sixth straight quarter where it's been down so i wanted to get tim cook's thoughts on that region. cook telling me that revenue was very encouraging, better than had the previous quarter and better than i thoughtit would be if you look underneath, cook told me those numbers. you can see mainland china was flat year on year. i asked cook do investors need to adjust their expectations of what they can get from mainland

china and cook told me he's certainly not adjusting his. on services, that did jump 22% it was 7.3 billion and that was better than expected on that business line, cook saying if you look at services, look at services are up 22% year on year and really a great quarter and we've achieved our goal of being a fortune 100 company earlier than we thought. we've achieved that on a lock back basis we're very proud of that guys, back to you. >> josh, thank you very much. >> i agree certainly, you know, that diversifying is an important thing for this company, especially given that it's one product company the services business looks really great the beats acquisition, i think the jury is still out. it was a nice way for them to enter into streaming services for music. that beat a lot of those deals and that's what gave them that. >> that was huge for them. >> i agree. >> i think they said 3 billion doesn't matter to ample. it was great to do but didn't move the needle that

much. >> and on that point, apple's corporate cash -- >> it is a popular culture. >> apple's corporate cash on its balance sheet topping $261 billion. that's why tim cook is hoping for repatriation and tax release. >> on a net basis you're talking about 1160. >> still gynormous. >> where other thing i want to bring up that shouldn't be forgotten is apple is a value stock in a very expensive market, and that's what's compelling about apple mohr than anything else right now is if you do a 20 times multiple, there's a lot of upside here >> ross, don't you have to stop and ask in a market that values everything at a premium, that basically is willing to really pay generously for every other kind of company, don't you have to ask what the market maybe knows or is concerned about that does depress apple's valuation ultimately >> absolutely, and that's exactly what i'm saying is we're all betting on a phone that i think has a diminishing return i think the phones are amazing

i don't know how it could get even better, and charging is the biggest thing. if i can get a phone that works all day, i think they would sell out, but the point being is they have an opportunity to get into tesla like what ten cent did, so smart. need to get in the internet of cars and they need to be in these businesses and they are not in them and if they don't do this they will have a below market multiple. >> they haven't exploited their imessage otherwise the phone is just a piece of hardware. the imessage, you're locked into that as a consumer and if they really take better care of that and exploit it it becomes so essential that you can't get rid of an iphone. >> we'll wait to hear what's on the call. >> ross gerber, ed lee, energetic. that was good. >> thanks, guys. >> another salvo fired in the fight between procter & gamble 'vgothdeillt nelson pez. wee t e tas on that coming up. rings...

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look at that it's time for fast take and first up, it's the battle between investor nelsen peltz and proctor and gamble the company releasing its proxy today urging shareholders to vote against the proposal to add mr. peltz to the board >> this was a harsh rebuttal against trion arguing for peltz on the board three arguments. one, he isn't offering anything incremental. no new actionable ideas. he's presenting, so why add him

to the board second idea from the company is that his views are based on outdated information they say and they call out, in fact, one former cfo, that retired a decade ago as offering advice and the third, which i thought was the most interesting the why not excuse why not just add this experienced investor with a track record at consumer companies. p and g says it's not compelling to the extent of his reason for board membership this is not a sufficient standard joining the board is not entitlement. instead, it is the result of a rigorous process determined by diversity and balance between short and long-term vision goes on to set the date. october 10 shareholders will get to vote. it's going to be interesting because this is a major large cap stock. peltz owns less than 1.5%.

it has underperformed as nelson says over the last ten years and he points to that underperformance versus the vector and the market. though under david taylor, it has done better and outperformed so -- >> you hit that. right? $30 billion companies are not easy to muscle around. it's a proud company with a relatively new ceo. you can just say no. >> it's a proud board, too >> however, you could also point out and i want to get the other story here, his argument is that this is too much of a closed community. everybody at the company has been there forever and they're all talking to each other to solve their problems they need some outside blood and they're not accepting that >> and the company would respond they have been addressing this and david taylor has been addressing the cultural issues, bringing in some outsiders on management for changing the whole compensation structure and a the way companies report up to management, so this is going to be a bottle.

clearly, we'll wait to see what they release next. >> next up, sprint popping more than 10% today after the ceo said a merger would be announce ed in the future the two potential partner, t mobile and charter think is considering making a formal offer to apply, so what would this mean for the future of media? >> sprint wants to get the idea out that they have so many options and they're just weighing them all. the stock is responding a little bit soft bank's parent down in the last few days because i think there's a sense that maybe they are going to do something aggressive or reckless charter says not interested. and we don't know t mobile and sprint can strike a deal, so i think it's going to set some things in motion whether it's imminent or not, who know, but sprint's a company that's been looking to do a deal

for years, not weeks or monlts >> it's going to be great. >> hey, look, whole industry would love to go from four to three. >> deals are are a coming. >> not finished with apple the fun continues. the conference call gets underway very shortly. another check on that stock and the key factors to list b b b for. >> then on "fast money", one top strategist thinks that classic market theory could be point tog to a sell off. that's coming up 5:00 p.m. eastern.

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okay, into the close with the dow, shares, let me start over again heading to the close -- >> of the show >> of the show and apple is up 5.3% a gain of $8, mike and if the market were open right now, we'd be p above dow 22,000. that would be good for more than 50 points. yeah, all 29 other stocks stay still. what's going to be interesting is whether the rest of big cap tech gets life out of this i'm on record as aing saying api

not a bellwether o we'll see if the rest, the nasdaq 100 looks like it's going to go higher >> chips would be ones to watch. semiconduc semiconductors this big are elirelease of the w iphone >> that's what to watch on a fundamental basis. absolutely i'm thinking more in terms of investor trader momentum feeling like okay, apple's going to run. see if the others go along with it that's what i'll be watching for. nasdaq 100 looks like right now after hour, trading about a half a percent higher >> give credit where credit is due. we had a viewer pointing out this gain in apple would solidify dow 22,000. so thank you for that thought on that and now, the conference call comes up here in the all important guidance >> we'll see if the gain can hold for 16 hours. >> very coy b about the delay on iphone 8 with our josh >> he did point to the strongerr

guidance, which is note bable and an interesting signal when he talked to josh. >> also, the context at apple, so we'll see >> all right yes, we will that does it for "closing bell." thank you, guys. kelly's back tomorrow. so we'll be watching >> i'll be back with apple earnings hopefully >> next time we have apple earnings "fast money" starts now. "fast money" starts right now. live from the nasdaq market side overlooking times square i'm melissa lee. your trader on the desk, tonig on fast, stocks are at record high, but one strategist sounding the alarm he'll explain. plus, starbucks is doubling down on china as other big companies head in the opposite direction what do they see that everyone else is missing and will it pay off? later, sprint is soaring today after the ce oceo says that a b deal is on horizon, first, the big story afte