the other thing i don't understand is the dancing weiner let's show it. the augmented reality thing that everybody is paying attention to on snap. >> you don't get it. that's okay. i don't either >> thanks for watching "power lunch" >> needs to catch up with technology >> closing bell starts right now. hi, everybody. welcome to the closing bell on this friday. i'm as confused as tyler about the hot dog. >> but since you're here you're lucky enough to become a hot dog today. >> it is snap hotting to strategy shares of the company -- that's fascinating. those shares getting crushed after earnings, but the ceo was

touting its first augmented reality superstar, the dancing hot dog. is ar the future for snapchat? $14 million in market value. >> meantime let's get to wall street's research prices we'll have the details on jpmorgan's move to take market share ahead. only going to charge 10,000. >> could be a race to the bottom retail stocks get crushed, bill miller iv is making a big bet on shopping malls. we'll join us to discuss what's behind that move >> we do start with north korea and the latest developments about the looming threat against the u.s. >> reporter: we could hear from the president momentarily on the latest regarding north korea there's an event set to begin at president's bedminster golf club it could be on fork force workf

initiatives. he upped the ante this morning he said the u.s. military response is locked and loaded and to that end he retweeted photos posted by u.s. pacific command of air force bombers at the ready in guam. the u.s. territory about 2,000 miles due south of north korea that it has threatened to target, basically signalling should the u.s. be threatened again the u.s. military response is at bay. guam's department of civil defense issuing an emergency fact sheet for residents on how to prepare saying things like lay low to the ground, don't look at the fireball which could be blinding. later this afternoon the president will be briefed by secretary of state rex tillerson and u.n. ambassador nikki haley who was instrumentsal in implementing the onerous new economic sanctions that were approved for north korea just a week ago at that u.n. security council meeting. if we do hear from the president in a few minutes time we'll

bring that to you and any latest on the situation >> thank you very much we'll be listening for all that. for more on how north korea is able to fund production of sophisticated weapons and its nuclear program let's send it to michelle caruso-cabrera. >> it's expensive. north korea pays for it by exporting commodity, weapons, slave labor and extremely large statues. we know this because of this investigators who work for the u.n. put out a large report every year on north korea's progress on nuclear weapons and whether countries are imposing the sanctions imposed by the u.n. sale of coal and minerals to north korea are very well-known. arm sales. one of many examples, north korea sold automatic pistols and assault weapons and anti-personal mines to the congo. take a look at this photo. look closely 30,000 rocket propelled grenades

were seized from a ship in the u.s. canal under the crates how does north korea do it they have a company called global communications. it makes military equipment. company advertising on the internet labor. one example. this letter shows north korean construction company build agnew military headquarters using north korean labor also build enormous socialist style statues. this is in senegal you can see how tiny the flag is u.n. sanctions were imposed on north korea statues back in 2016 so in theory shouldn't bring in that much money. >> that's what i'm confused about. i thought the whole point of the sanctions is to keep this thing from happening >> another point is that a lot of the countries don't abide by them a lot of letters were cents to

various leaders from the u.n. to say hey we saw this move through your port. how come you guys didn't do anything about it. on china in particular, comes up a lot in the report more than 300 times. a lost of front companies there. there's lack of enforcements 312 chinese references in 326 page report, for example china has more recently gotten more serious so when it comes to the recent round of sanctions it could cut off a third of their income when it comes to seafood, iron ore and coal so we may see things change. >> it could if they are enforced >> the other part of this, obviously, this is the way the income is coming from, but clearly the regime over there is deploying most of it into its weapons program and its army it's obviously not helping out necessarily the north korean citizen. >> no. there's terrible poverty people are hungry. there are slave labor camp a weapons program is incredibly

expense jennifer and this hard cash is diverted to that in order to fund it >> michele, thank you. just want to mention as well, we're expecting to hear from the president now at any moment he's speaking on workforce doefrmt and development. let's get to phil lebeau a news alert on tesla. >> reporter: as expected and this is not a surprise we knew this was going to happen there's greater than expectsed demand for the debts offering from tesla. in fact the company originally hoping to raise 1.5 billion. they will raise 1.8 billion through the sale of these bonds. the yield coming in at 5.25% so 5.25% is where it's at. again greater than expected demand to nobody's surprise when it comes to the debt offering from tesla back to you. yeah i mean that's the way high yield

bond off erosierings go. let's stick to these markets here we'll get our closing bell exchange guys, thanks for being here. kenny, interesting market kind of taking this in stride trying to sneak into the weekend in a calm way after a pretty big drop yesterday. >> look what it's done the market has backed off. we were higher now it's almost flat you can feel a little bit of the nervousness although it feels to me that the market around the 50 day moving average is where it found some buyers. last time we broke now that being said i think everybody thinks in the end there will be a diplomatic solution versus the other. and so i think that's kind of what the market is telling you

by the way, if it's the other solution no matter what happens i think the markets around the world will rally on an event like that because the u.s. will stand up and make a stand and everyone around the world is tired of hearing this whole story. >> tony, in the meantime with all of that happening what about the inflation news this morning it was quite weak is this market getting bailed out a little bit because now they are pushing off expectations of what the fed may do here? >> without a doubt the signs of inflation are pretty muted right now. that doesn't mean it's a risk longer term. we've done a lot of work internally on the phillips curve. if you look on it based on employment why aren't wages accelerating more quickly. as the job numbers continue to improve, we see inflation picking up over the longer term. i think it's still a risk just not a near term risk >> rick, how would you gauge the

response today in the treasury market to that inflation news, of course, as well as these other headlines. it's not as if it's a huge rush into say instruments on the on the other hand that were already rallying how do you sort that out >> i like your comment you're looking at it correctly there's been a soft drift downward in yields for basically a month. right before the employment report we were only a couple basis points higher than we are now. that turned around a bit that's an important number a lot of fed strategy embedded in those numbers as inflation numbers today. now on the inflation front, you know, consider 212 and a half low close of the year but virtually unchanged at 219 we ticked down to 218. don't let that get you off the scent. there's still a big case -- if somebody asks me is there a chance to make a close for the year, absolutely

but where is the next 30 basis point mover i would lean towards the upside of the yield. inflation days is important. fed fund futures whether the fed will raise or not. i don't know if that type of thinking will make you a lot of money for the back half of this year balance sheet reduction isn't dependent on anything. it's a must do that won't necessarily get changed by inflation data and how those markets behave to that is going to be key for the back half of the year >> meantime you look at what's happening the dow emblematic of that >> it's a combination of both. you can't discounts kind of the political chatter but can't discount the macro data we've been seeing and what that means going forward.

>> tony, you guys have been saying the unusual thing about this year we haven't had substantial fall backs here he weather less than 2% from the highs a lot of people would have invited a 5% dip is it actually a gift or something to worry about >> you're right. volatility has been unusually low by historical standards. what we're doing to protect ourselves is focusing on the quality of the businesses. focusing on the balance sheets those two things really help you in a volatile or down markets. the other thing we're holding more cash than we usually do we're at 4.5%. that's higher than formal for us not that we expect the market to go down built we're talking about quantitative tapering. there could be some hiccups

along the way. we want toe opportunistic. >> that's why everybody is buying bitcoin >> that's not my choice but to each his own >> guys thank you very much. rick, as well as tony and kenny. we've got a little less than 50 minutes left before the bell. the dow holding on to some slim gains. s&p 500 up a little bit less the nasdaq has been the out performer all day. russell pretty much sitting this one out. you can call at any time hot dog strategy that's the new model for success at snapchat. the stock is getting slammed today. up next we'll discuss if that strategy cuts the mustard.

part of me feels bill would have nailed that line better. >> there's a tug-of-war between markets and fed on inflation that could iacmpt future rate hikes. steve liesman has that story just ahead with at&t you can get your entertainment right here. right now, when you get the incredible iphone 7 from at&t you can get unlimited data and live tv. the channels you love. your favorite shows and movies. making your iphone into more of a... oh my tv is ringing. hey...i'm in the middle of a...a second iphone from at&t? okay! right now when you buy a new iphone 7 from at&t you'll get a second iphone 7 on us. and power both with unlimited data and live tv.

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inindividuvida i >> nvidia is sinking a drop in this key segment was the key to sending this stock. $3 billion got to be fine speaking of growth rates how about snapchat which is dropping on the back of its disappointing results. down 13% right now snap missed on earnings, revenue and user one bright spot the company said its dancing hot dog has been viewed 1.5 billion times

>> all this leading some to wonder if snapchat could capitalize on its ar strategy in a big way. joining us our own julie boorstin her face is not on it. she escaped that along with kurt wagner sort of as interesting and viral as these hot dog effects are and the company kind of trumpeting it as one way out there, is this a way investors should talk about what innovation is at snapchat, these buzzy little features that get people to spend more time on snapchat and engage more? >> i think what snapchat would like us to focus on is that engagements. they just announced users under the age of 25 is spending an average of 40 minutes a day using snapchat, 40 mains day that's ten minutes more than they were spending at the end of the fourth quarter of last year.

so pretty significant growth engagements. by innovating and creating lenses for your face and innovating and creating lenses for the world around you like that dancing hot dog like you just saw in front of me those are the kinds of things making users coming back. the question i heard a lot on the call is whether they can -- here we are again -- whether they can make as much money from these things, these lenses as they are from ads on the discover platform. >> kurt, you know, i'm just not that convinced we've seen effects like this before pokeman go is a good example i guess it was good for that game this is not so much good for snap s-it? what are they going to have to do will they have to come out with something like this hourly, daily, a lot more contents for this to turn into a strategy where advertisers can get involved with? >> well, you bring up a great

point which is how often can they come out with a brand new product and hit that everyone lovers and also one that is going to be unique enough that facebook or instagram or someone else cannot immediately copy that because that's what we've seen so far is when snapchat comes out with something cool or exciting facebook is right there six months behind to roll it out to 2 billion users this is a very tough strategy. and i think what people want is not only this but they want them to show that they can create a viable advertising business behind that so that when it takes a couple of months or even a year for them to come out with the next cool thing they have an important reliable business underneath to carry them through that time. >> of course, we should obviously mention that there's a lot else going on in terms ever contents strategy at snap where in terms of professionally produced content shows, other things like that is there any way to gauge just

yet how excited advertisers are for those things >> well, the company reported that advertising revenue increased about 150% year-over-year, 25% quarter over quarter. they say that over 75% of the top 100 ad age advertisers are now advertising on the platform. i think it will be interesting to see more granularly the type of results advertisers are getting. right now we're hearing from advertisers that they would like to have another third big player, an alternative to facebook and google. right now brands feel they have to invest in facebook and google and the question is whether snapchat becomes that must have destination. >> that's a good points. how much technology is behind the deployment of a dancing hot dog albeit with your face in it. forget facebook why couldn't any other company who want to do something nifty come out with similar kind of tools. >> you're going to see more companies come out with similar

stuff because both facebook and apple are coming out with ar platforms. they are basically opening up in apple's case iphone and facebook camera app if you have a cool idea like a dancing hot dog or fun dog face filter build it on our platform and get it to our users. this concepts of snap being the first to pioneer these fun ar features is not going to last forever because the bigger players are trying to get into that space as well as they have such bigger reach than snapchat does there will be a lot more of this moving forward >> we had an analyst on yesterday who was talking about the launch of the iphone 8 might be a big moment for snap just because you need a high end phone with all these different capabilities to take full advantage of it. do you think that's something the company and investment company are fixated on at this point? >> i think snap has shown its ar can work with the phones we all have now snap will continue to evolve to

make sure they stay ahead of this one thing that's interesting you mentioned apple and google moving into this ar space. the biggest competition right now is facebook and instagram and i was surprised that yesterday in the call there weren't any specific comments about facebook and instagram but there was an allusion to them against these big giants. he understands he'll always be facing this competition and r y reliant on the phone makers. this is a way tore them to have a touch point with the consumer. their refer news are down between first and second quarter. >> i thought that was a clever one. hard to do at the scale that will move the needle >> experimentation will continue thanks very much

got about 38 minutes left in the trading day. kind of losing a little bit of ground here. the dow just barely above the flat line. s&p 500 up 1.4 i noticed the vix back above 16.5 close to yesterday's high. little bit of anxiety still remains in the markets going into the weekend upcoming changes in european regulations are causing what some are calling a crisis for wall street research details next tesla model 3s are hitting the road the electric carmaker is hitting the bond market. we'll have details coming up (bell ringing) finding the best hotel price is whoooo. now a safe bet. because tripadvisor searches... ...over 200 booking sites - so you save up to 30% on the...

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welcome back we keep an eye on these markets into the close how about a ticker is golf equipment maker falling about 8% after reporting earnings this morning. same quarter sales dropped due to a retail slow down. and they say unfavorable weather conditions that kept golfers off the course acushnet down. upcoming changes to european regulations are now driving wall street firms to start charging for research explicitly. putting a dollar price on their investment research. in just a few months the eu will impose a ban on the decades practice of sending free research for clients at no charge in exchange for trading

business jpmorgan going to charge $10,000 a year barclays going to charge $40,000. it's interesting nobody at these firms has ever really thought about charging for, as a product, as required toby these transparency rules. >> bundle their soft commission charges. now they want to put up a chinese wall and say this is what you can charge for trading and what you can charge for research if jpmorgan can come out and say fine we'll charge $10,000 how does a startup who have to charge 100, 150 grand expected to compete >> jpmorgan is subsidizing that research business by other things they do small research firms survive by having another middle man help out with the distribution of their research in exchange for trading business it's fascinating also fascinating on the buy side, on the investment funds

have to decide if they are going to at the time cost or pass the cost on to their own fund shareholders >> in which case the entire cost of this effort gets borne by shareholders >> in some cases vanguard said they are going as a firm essentially to at the time cost. but the firm is owned by its fund shareholders. very complicated and very interesting. i think it will cause a lot of questions that these research firms say what's the value here? >> people will say you don't need who analysts covering apple but that's not indicative of what's happening plenty ever companies don't have that much coverage whether it's worth its salt or not is becoming the new obsession. maybe ultimately forces people to say hey we have to go independent. for everything else we'll kind of get into subsidized costs maybe it won't change a thing. >> another potential down the road where people say wait a second isn't that paying for privilege access

if i'm willing to pay for more calls with the analysts, is that an even playing field. >> driving me crazy. see how it affects people we talk to. time for cnbc news update. let's get over to sue herrera. >> reporter: german chancellor angela merkel declining to say if germany will stwand the u.s. in case of a military conflict with north korea she says she doesn't see a military solution and called for leaders on both sides to tone down their rhetoric. president trump is sending his son-in-law jared kushner and negotiator jason greenblatt to the middle east to discuss peace. billionaire hedge fund manager daniel loeb has apologized a black woman serving in the new york state senate has done more damage to people of color than anyone who has ever donned a

hood end quote. those comments came because of her support of teachers unions he says he regrets the language he used about senate minority leader cousins colombian authorities uncovered one ton ever cocaine inside shipping containers on a ship bound for europe the drugs belonged to a gang of colombian drug traffickers a 2017 report said production in colombia surged to levels not seen in 20 years that's the news update at this hour back downtown to you >> thank you very much less than a half hour to go in the session and the week gordon, little bit of a tepid bounce after yesterday's significant drop what are your looking at >> the thing that's remarkable about this market today is that it's unremarkable. the vix elevated people looked at 2400 on the s&p. a place you might want to get in

a lot of guys with varying opinions but interesting enough 24/40 was the spot we thought it would level out. >> we've seen a come of these one day sharp air pockets, one in may, one in july. didn't lead to anything. is this feeling different to you >> feels like a typical friday in the summer on the backdrop of what caused the volatility to begin with so the fact that it's calmed down this quickly and we got to this spot -- we did see a little bit of reversal in terms of some of the buy side. but overall a pretty calm close. >> we'll see if that plays out thank you very much. let's bring in kayla tausche as we await the president making some remarks as he meets on a

here's the president >> working very hard on being sure americans have the trading they need for jobs in the future i also want to thank ivanka, my daughter for her leadership on workforce training and her efforts, working very, very hard to create new economic opportunities for women across america and actually for women across the world she's been working with the chancellor of germany on helping women all over the world in the past seven months we made enormous gains in getting americans back to work the stock market is at record highs, unemployment is at a 16 year low and manufacturers have never expressed more optimism about the future the optimism has been truly incredible recently foxconn announced it will invest $10 billion to build a new factory in wisconsin we want to make sure every job that comes back is filled with american workers we have a lot of companies

moving back to our country you're probably seeing that. two major automobile companies just announced they are moving back to the united states and build major plants they are looking for the site, putting it out to seven or eight different states and be very happy building in the united states going to work out very well for them that's why in june we began a historic initiative to begin apprenticeship in all industries we're expanding pathways to success. so important apprenticeships are one of the many avenues that lead to the great jobs completely debt free. and who knows more about the word apprenticeship than donald trump. under apprenticeship you earn while you learn. so important so great you love getting up in the morning, going to work and find great things involved. we're also here today to discuss additional steps we'll be doing to expand apprenticeship

programs especially for women and minorities in s.t.e.m. fields where women have been truly under represented. really, i guess, you could say under represented for many, many decades. technology has become a part of nearly every industry from manufacturing to retail. we want all of our citizens, every single citizen, including women and minorities to have access to high paying tech jobs and other s.t.e.m. related jobs. american workers are the best there is anywhere in the world and we're finding work for them. they've built the sky scrapers of our cities, the roads and bridges across our land and will be building plenty of new roads and bridges. the technology that has revolutionized the globe and so much more as you're well aware their skills, talent and grit have always put america on top and we'll remain on top but at a much higher level than we are

right now. and speaking of now, it is our job to make sure that they have the training, immediately to lead us into the future. we have great, great hope. we have a great, great future in this country there's never been more optimism and, again, one employment at a 16 year low. so we're honored to have all of you, mr. secretary thank you very much. we appreciate it ivanka congratulations on working so hard. we really do appreciate it thank you. any questions? >> mr. president what do you mean by military solutions or lock and loaded as it relates to north korea? >> it's pretty obvious we're looking at that very carefully and i hope that they are going to fully understand the gravity what i said and what i said is what i mean. hoefrlly they will understand, peter, exactly what i said and the meaning of those words those words are very, very easy-to-understand >> any progress on the diplomatic back channel? >> we don't want to talk about

progress we don't want to talk about back channels we want to talk about a country that's misbehaved for many, many years, decades actually. through numerous administrations. and they didn't want to take on the issue and i have no choice but to take it on and i'm taking it on. we'll either be very, very successful quickly or be very, very successful in a different way quickly. >> angela merkel said there's no military solution to fight with north korea. why is she wrong >> i think maybe she's speaking to germany let's her speak to germany she's a friend ever mine she's a very good woman. she's a friends of ivanka. perhaps she's referring to germany. she's not referring to the united states. >> >> you want to send a strong message to north korea >> my critics are normally saying that because it's me. if somebody else uttered the exact same words i uttered would say what a great statement, what

a wonderful statement. but i will tell you we have tens of millions much people in this country that are so happy with what i'm saying because they are saying finally we have a president that is sticking up for our nation and frankly sticking up for our friends and allies and this man will not get away with what he's doing, believe me and if he utters one threat in the form of an overt threat which he's been uttering for years and his family has been uttering for years or he does anything with respect to guam or any place else that's an american territory or american ally, he will truly regret it and regret it fast thank you all very much. thank you. thank you very much. president trump there responding to some questions after holding a workforce and apprenticeship event a lot of important things were

addressed. purely on the issue of north korea he was only asked about that and only discussed that he said i hope they fully understand what i said is what i mean i made it very, very easy-to-understand and either he would be successful with regard to getting north korea to sort of stand back quickly or in a different way quickly. among many other things. let's bring in kayla tausche for more reaction to what was just said >> reporter: the president taking questions for the second time in as many days on his working vacation, understanding that this issue is top of mind for so many americans with the threat level or at least the rhetoric level being raised significantly over the course of the last several days. he made those remarks at the top of an event that was scheduled to discuss a workforce development program, an apprenticeship initiative that was setback in june by executive order. he didn't talk about the substance of the progress that

has been made or what the at the nets of that program will be, meeting instead with his domestic policy advisers where the previous meetings were ceos and leaders of communities colleges we'll see if the white house has any more detail about that program. but those comments about north korea where he said kim jong-un better not utter any more the letters this or he'll come to regret it very fast. those are going to make headlines. the president also mentioning he believes there's tens of millionsever americans who are glad or hear him speak this way in a very blunt manner towards north korea. essentially saying look just because it doesn't really go in line with how past presidents have couched their commentary and made workshop statements about these things he clearly things this is a winner at some level out there in the country >> reporter: because this threat is not new to this administration, something that's been ongoing for the past several administrations, and so he has taken a different tack

and perhaps hopes for different results. only time will tell in that regard >> i also wondered if he was careful, the president, he started to say with regard to kim jong-un if he utters one more threat but he sort of backed off as he was saying that to say if he does anything with regard to gooum or any other u.s. territory or ally he said there would be consequences. it does seem like the president is trying to make it clear there's action will be met with action even though he's said the rhetoric is unacceptable i don't know if by saying it's any ally if that's a new front versus any u.s. territory. >> reporter: also, kelly, trying to parse exactly where our allies stand on this he was asked by angela merkel where she declined to say whether she would step in if in fact this situation escalated. he said she's speaking for germany not speaking for the united states and he refrained in that moment to criticize

merkel's response. china has said if, in fact, there is a tangible development between the u.s. and north korea, if there is a strike, if there is some military action china has said that it will stay neutral if that were to happen the president also has not addressed that comment we know he's been very critical of china's role in this relationship, so we'll see if that's something he addresses going forward. >> true. kayla, thank you for now we have less than to minutes until the close. not much move in markets dow still at 23 points s&p is up four russell up two retail stocks are getting slammed leading investor bill miller making a big bet on shopping malls he'll explain why next >> fidelity made waves earlier with providing clients access to their virtual currency like bitcoin. is this a move to attract millennials? whoooo.

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shares of retailer j.c. penney falling 17% today after reporting earns this morning really being hammered. courtney regan has more on this.

>> reporter: shares tipping at a 45 year low. the market cap now sits at less than half the revenue that the retailer logged justin second quarter. j.c. penney rounds out the department store result posting a loss double the loss that analysts forecast. the retailer said it was a result of liquidation sales at 127 stores and shrinkage which is theft, damage and other kinds of loss. both of those higher than anticipated and pressuring grows margin the departments store reaffirms its earnings guidance despite the loss to hit that it has to make up earnings in the second half of the year investors don't really believe that j.c. penney can do it revenues came in stronger than expected that was in line with consensus forecast j.c. penney improved in all categories traffic did improve too bust

still weak down from last year clearly these are secular issues that are not going away for the department store which leads many to wonder whether the best strategy is enough for these players. look at this week's performance. macy's, dillard's, j.c. penney, kohl's, nordstrom. it's just a tough place to facebook you're a department store. >> i know. they were sort of a rare bright spot, ceo even said. wasn't enough. thank you very much. wasn't enough at least for now anchor stores like j.c. penney played a big role for foot traffic at malls but retail has driven so many bankruptcies and shut downs. >> our next guest just made a big bet on shopping malls. bill miller is here. bill, good to see you. thanks for being here today.

so describe this play for us here is it a bet on somehow the come back of shopping or the fact that mall traffic is not really going be impacted or go down in a straight line or is it just real estate value is here? how do you think about it? >> i think at the end of the day, as value investors what we're looking for are expectations, gaps between what the market is pricing in and what's we think is most likely to happen. when we buy shopping malls -- i don't like the term mall because it conjures up images of properties that don't exist for these reits. we're talking about lifestyle centers, town centers that have a mixed component, outdoor use, entertainment space, restaurants. we think the resistance to the retail down turns is much higher than what the stocks are pricing in take wpg which is the larger of our shopping center reit

that has a holding of 12%. free cash flow hold of 18% the dividend is covered by 50% people have thrown the baby out with the bath water and selling everything retail oriented now the valuations are so far out of whack with what's going to occur we think we can put patient money to work here maybe see that yield grow over time >> so, bill, people haven't been discerning which i guess isn't surng. sometimes that happens in the markets. why do you think there's a valid reason for the selloff that we've seen of these properties is it possible people -- we've seen traffic driven, mileage is driven down. is there an effect that could take everybody out or clip it just enough that it makes more of an impact in the longer term? >> absolutely. you bring up a good point.

amazon, that is changing the way people shop and behave so more sales are shifting online but that's why these actively managed properties are shifting to more restaurants, experiences, places that people want to congregate >> so, in some way i guess, bill, amazon which you own made these stocks cheep enough for the psychology for them to be value plays. do these companies that you are particularly owning need to do a lot to revamp their property is there a big capital investment you have to worry about or already set up to be these experience centers >> washington prime group, 80% of their net operate iing compa will be 85% by the end of the year the fact that they have such good cash flow coverage of the dividends means they can use that excess capital to turn

their properties in to places where people actually want to go so while the market doesn't always appreciate the ovals here, management teams do. the ceo of washington prime group, $140,000 worth of stock at this level a couple of months ago. the debt markets are not treating the properties the same way the equity markets are cbl which we also own refinanced their debt at a lower rate than it had before and extended the maturity the equity markets are i think a little bit over reacting on the currents situation >> your dad, he was so long amazon this is now the flip -- maybe he's creating the opportunities for you, you know? is this like he's letting you win at chess >> no. it's a fair point. again everything comes down to valuation. we think it's a very fair price at this point. >> thank you so much for joining us today

thanks for having me >> ten minutes to go until the close. there's been some talk about not wanting to have risk on into a weekend like this. >> tilted to the buy side for most of the day. even as the markets have been flat to down we have to keep an eye how we finish up. you still see the dow is just up 37 points. picking up 15% of what we lost yesterday. >> the nasdaq is back in the 'leen up 42. wel head to that exchange and reports what's moving higher there right after this connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.

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welcome back the nasdaq is bouncing back today after yesterday's drop of 135 points kate rogers is over at times square >> reporter: a big drop yesterday. today we're leading the gains by up more than half of a percent all tech games have reversed course biggest gainers amazon, apple, and netflix are up by 1% another big gainer today is

vertex that's up 3% russell 2000 is up marginally higher today. to the down side one of the biggest losers, nvidia yesterday the stock is down by 6% today again one of the biggest losers in the nasdaq 100 but for the year up more than 40%. back to you. when we come back we'll have the closing countsdown for you >> after the bell google diversity memo and firing of its author which haunts the tech giant. more on the tech giant coming up

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(bell mnemonic) get e*trade and get invested two minutes left in the trading day and the week you have the dow holding to slim gains after yesterday when the dow lost more than 200 points. you had a real volatility spike, volatility index went above 16 as of yesterday. still elevated still jumpy trading. about 15.5 right now in general it bounced. didn't have an overwhelming buy today. a lot of people wonder if you need further oversold conditions and furthers flush before it's safe to buy. you had the transports bouncing today, nasdaq was a leader but a little bit of a give and take >> the vix was the fund end, the

prices were higher that is called backwardation it's a buying opportunities because traders are betting there's some near term event this is obviously north korea that's going to happen but they are not elevating months out >> not a storm that will last a long time. >> it's an important buy signal. a lot of discussion about whether the markets rolling over here noted 200 stocks in the s&p were 10% below their highs. that's true but albeit you, mike, that happens half of the time we got a number of groups, for example, energy. the entire group is in a cyclical decline a look at these. they are 40, 50, 60% below highs. sectors are in secular decline retail stocks 40, 50% below their highs. vast parts of the market are way below. >> some people will look at that

and say look that shows you a lot of stocks have pulled back, they have corrected even if the indexes are just starting to do that we'll see if they touch down or not. >> thank you, bob. ringing the bell here at the big board, pg and e corporation and wildlife society thank you, mike. welcome to the closing bell. i'm kelly evans. we have a rebound on wall street today after several day of losses and big concern of north korea. the dow holding on 21860 for the blue chips the s&p and russell up .13%. how about the nasdaq adding two-thirds of 1% after a steep decline yesterday and despite a very weak session from nvidia.

6256 for the blue chip ipos still struggling but those icos, initial coin offerings are super hot. there's the price of bitcoin with these anxiety bitcoin has been over 3,500 lately we'll explain the rage later joining me on the panel is michael santoli alone with evan newmark and larry kudlow and steve white cigarette here global chief investment strategist for citi private bank guys great to have you on board. mike what do you think of the action if that's the correction not much of one. >> it was a little bit of a tentative bounce people are looking both ways saying is there another truck that followed us that hit us yesterday. you had some encouraging things. things that were hit the hardest

like transports bounced the most there's a feel let's get towards safety treasury yields were down. japanese yen rallied there's a little bit of one ease out there. >> were any of these price declines, some of the high flyers in the tech stock down 20%. anything like that going to get you interested >> no. the markets overall, s&p is down 2% underneath there's some very substantial movement going on. but, you know, i don't love amazon at 960 any more than i hated it at 1080 >> are you a bear? >> i'm not a bear. i do have now -- >> we need specifics >> i have 48% of my money in cash right now >> 48% >> 48% >> what are you getting three quarters of a point.

>> a percent i'm very reluctant to buying in stocks at certain levels what you have going on right now, things that may look like good value, you know the department stores. you had bill miller iv on talking. those things are value traps i have a chart here. i have a chart here. do we have the chart up? >> why would they be value traps? >> all he's doing -- it's amazing. he wouldn't say he's a bear but now we learn he has 48% in cash. now since you and i both ranked them after that he's back tracking i got this i got a little of that i got this i got rubik's cube >> i believe when you're starting to buy into the s&p 500 at historically high levels of valuation, you have to believe that there's good 10% to 20% upside over the next year and a

half and i just don't see it in the s&p 500. >> what would you say how you're looking. >> we're neutral u.s. shares and a -- >> that's the classic institutional cop out. >> it's overweight international equities it's overweight emerging markets and europe why would you stay in the united states why would you be fully invested as we are. 12% eps gains first half of the year 10% for the year more next year now you can't blame the urs market for outperforming over for so many years and having so much good news behind it that we shift to other markets that lag behind >> i was here earlier today.

a lot of fun a couple of points i'm very bullish on stocks 5%, 10% correction here's what i like profits are rising i don't care what the rate of increase is. they are rising. other points is low inflation is a tax cut for consumers and businesses and everything. what we're getting here is lower than expected inflation. that's a huge tax cut on the whole economy and it's going to help a lot as we go forward. the third part is consumer confidence, you see the survey, their consumer confidence was the highest in 16 years. other surveys have said the same thing. we had a private dinner with ways and means chairman but still optimistic about tax cuts and tax reform but i'll say this the senate is lagging. i have to admit. and the trump-mcconnell squabble, i long admired mitch

mcconnell. but trump is right we need inflation. >> consumer prices rose less than expected in july. steve liesman is here. fifth straight miss on the core reading. 1.7 and fed rate hike odds are dimming. >> i've been doing this too many years to argue with your statistics you're right fed officials have been forecasting this rebound on inflation to start the rate hikes again. have to wait a little bit longer consumer inflation coming in lower. unchanged month on month from june missing the core unchanged at 1.7 fed wants to see this number well above 2 to hit its target softer inflation data and comments from fed officials good for the stock market they produced again for a december rate hike >> we keep under shooting our

inflation target wage growth is low why do we need to cool the economy down when we're not seeing these pressures building. we have the luxury of wasting to see what actually happens. >> reporter: waiting is what the fed thinks the market will do. the chance of a december rate hike we have it at 22% that's down quite a bit. different from the cme which is higher now to be sure some economists join with fed officials in forecasting a rate hike. low inflation, global geopolitical turmoil and a debts ceiling debate in septs. lots of time to worry what will happen in september. >> why do we need quote-unquote higher inflation that's the nuttiest thing i've ever heard that's nutty

i love wage growth, especially my own and my friends. here here's a points. here's why it's so great let's look at wages from the employment report. hourly earnings year-on-year up 2.5% hours worked year-on-year up 2%. that's an income proxy for the working class, okay. that's 4.5%. minus 1.5% inflation real income for the middle class is up 3% year-on-year. you see inflation is a tax cut and these bozos at the fed these elites are nuts to want higher inflation. >> forcing up the inflation rate by itself doing nothing to ultimately achieve income growth this is a negative for the economy. what we should do is level in the flat phillips curve that the trade off here is not a big negative, the inflation rate --

>> people outside the labor force who are still coming in aren't coming in >> i agree we need jobs, we need skills, we need better scoring. let's take the phillips curve. a trade off between low unemployment, prosperity equals higher inflation it's broken. it's been broken since the 1970s. the fed models should be thrown out the window >> reporter: so this sounds really clinical and not nearly as populist and wonderful as my great colleague from connecticut larry kudlow made it appear. mostly the gentleman farmer from connecticut, the deal is this. that the fed wants 2% inflation so it's not zero when it gets to zero, larry then it can fall and if it falls everybody says prices will fall and that's good except for when we have deflation wages and salaries also fall the idea and i'm not supporting this as much as explaining it.

the idea is 2% is a buffer against zero because when we get to zero we can't do very well when it comes to doing monetary policy >> we talked about this so many times >> you're a great american and smart guy and long time friend and colleague. let me tell you something we learned in the 1970s we could have high unemployment and high inflation at the same time we learned in the 1980s and the 1990s and low inflation. today by the fed numbers and so forth the unemployment rate is what 4.5%. >> 4.3 don't overstate it 16 year low didn't you know that 16 year low. >> and the pc e deflated that they use is 1.5. so if 40 years of data don't put the rest to stupid phillips curve model i don't know what we have >> i would like to associate

myself with larry's remarks. >> the hot dog inflation that could tie together this inflation discussion with the market with snapchat >> i will point out, there was a little bit of an update in food inflation. hot dog inflation in july, frankfurters line item in the cpi that annualized for the month perhaps or where they surveyed the cleveland fed medium cpi is 2% it's been there for a while. >> spend 10 seconds on this. you're talking about all these really low numbers the nature of inflation itself is more important than these very modest numbers. if we have income led, demand led price it's very different from just having prices move up in the absence of that recovery. >> very good point by the way, can you choose -- i understand the median fed numbers and all this

i love to play with statistics but look it. market indicators are telling you something else for many years. the dollar price of gold and the dollar price of broad commodity indexes has basically not moved in three years it's gone down it's come back a little bit. the last 12 months it's come back basically there has been no movement you can pick out hot dogs. hang on. one points >> what are we talking about is the ultimate point the fed -- are they going to start selling stock, are they not, going to do another rate hike? >> i want to make one points here >> most importantly look at technology that is deflationary and it has been for 20 years and in a positive way that's the key points i'm making >> what's the end point of this entire discussion. >> with the fed you have to put

monetary and fiscal policy together if you get the tax cuts that will raise real rates, not inflation but raise real rates and then the fed can follow rates higher absent the tax cuts -- i agree with evan -- >> inflation is a tax cut. >> that's correct. he just nailed it. therefore the fed should go slow, slow, slow >> thank you >> i got north korea, i got 20 pages of notes on north korea. >> later we got hot dog inflation to talk about. we told you about fidelity making a big bet on bitcoin. a cop executive will explain why and why there are some concerns or risks about its involvements with that crypto currency. >> tesla raising $2 billion to fund melod 3 whether investors huntsihunting

yields should buy it stay with us his on/off splits are the best here. yeah, but his offensive win shares didn't even break 4. come on, check out that stop-and-pop! what do you think? my trade-off analytics indicate no one creates more space on offense. this allows him to nail a jumper from a densely populated urban area. what you're trying to say is from way downtown? i am still learning. i can see that.

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the phillips curve are or we done >> we're going to talk about icos the skyrocketing price of bitcoin is making initial coin offerings a hot topic. we'll look at how these things work and if you can buy one. >> reporter: yes you can invest. initial coin offerings has emerged as a way for crypto currencies to raise capital by offering virtual coin to anyone in exchange for bit do in. icos are strong out of pacing the amount raised by traditional venture capital funding. it raised $232 million last month. start ups outside are starting to join the craze. they are looking to raise $100 million in an upcoming ico mark cuban is expected to

participate. it involves less regulation which optometried concern from the sec, people's bank of china and the central bank of singapore. the price of bitcoin continues to soar hit agnew record high of 3,500 today. okay icos okay earlier this week we reported fidelity is partnering with the digital wallet coin base which became a billion dollar wallet hadley stearn is with us please tell us what was the genesis behind this move >> really this is part of a broader context. so for a few years now we've been trying to understand what broad change is, how bitcoin looks and this experiment is

part of that evolution we offered bitcoin in our cafeteria so people could buy food with bitcoin. 18 months ago people were able to donate to fidelity with bitcoin and this week we announced information have coin based accounts through fidelity. >> when we discuss this news there was a lot of skepticism and even suggested the reason why you guys did this is because you missed the technology of etfs are your scrambling to get ahead of what's the next technological change on wall street. >> the etf story i'll leave aside. our team developed the first iphone app and launched fidelity on facebook and twitter. this is part of our view that block change technology will change the world you can transfer value through software and sort of ware alone. this is a huge change.

bitcoin, and others are really the first part of this >> so people like me i have trouble getting my hands around the bitcoin thing. explain to me that if tomorrow the central banks and the governments of china, russia, united states decided to outlaw the use of digital currencies, whether there would still be a market for bitcoin in other words, in my view, again, which i'm admitting i don't fully understand it, crypto currencies largely an easy way for undetected value transfer which kind of lends itself to money laundering, tax evasion and people who don't want their currency transactions tracked. am i wrong in looking at it that way? >> i think you are a little misguided. so first of all, we are just allowing our customers to see what they are investing in we're not necessarily making a

judgment on bitcoin. but really this is, first of all, this is digital gold. that's a way to look at it you can't ban bitcoin. banning bitcoin is like banning the web or open internet protocols. whether governments like it or not it's here to stay. yes some elements of bitcoin and these technologies are used for nefarious reasons. the u.s. dollar is used for some fairly sketchy things as well. we need to step back and view the technology innovation and what's the big story here and the big story is you can transfer value through software and software alone this is a huge societal break through. regardless whether bitcoin is the one to survive it could be like napster we use napster, spotify and apple music but this is a big change >> what is the big picture problem that is solved by being able to transfer value strictly through software it is a cost issue is there something else that makes it, you know, that much

more superior or adaptable and how do you connect that technology to what the value of bitcoin should be. >> yeah. to answer your first question, it's an innovation so just like music was made digital, cds worked really well and records worked really well but digital music worked better and changed things there's this great quote software will eat the world. this innovation is here to stay. i do think it will make things whether it's bitcoin or something else things faster and cheaperer and create new products, services that we can't even imagine like us sitting here when the first web browser coming out trying to imagine apple and google you couldn't have. we're very early your second part of the question how bitcoin's price is correlated is a trickier one there are various different ways you can look at it i believe gold is about $7 trillion right now bitcoin is about $120 billion.

that's one way to look at it the other way is it's an uncorrelated asset which is very appealing to some people >> i appreciate you working on the iphone app >> i thought he was talking about iphone app for fidelity. >> yeah. >> have you used that? >> yeah. i really genuinely appreciate it it's made a difference >> it's funny, when we first did the iphone app no one thought we should do it who knows what will happen >> all right thank you again. have a great weekend >> thank you very much coming up the white house is reportedly considering turning over much of the war in afghanistan to private contractors. we have a retired lieutenant general to talk about whether that's actually a smart idea first ge shares down 20% making it the worse performer in the dow. now the company's new ceo is putting his money wherhis e mouth is and making a big

personal bet on the stock. we'll have details when we come back your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

welcome back it's time now for fast take on this friday. we begin with a move by amazon into meal kits this time it's different these are meal kits that don't to be refrrefrigerated

>> mres, military has these things to me my big takeaway when i heard this news they are going to have to keep separation between the whole foods brand and whatever they want to do with amazon fresh at least initially. >> if i buy a beef stew i can stick in the microwave i'm fine with that. >> thinking about the whole food product. >> are there margins in this business will amazon make any money i keep coming back to this they destroy industries but not clear that there's a lot of profit on the other end. >> they own everything already their book prices are up nothing like the deal used to be >> nobody reads backs any more you and i may be the only people that still read books. >> us three. >> much smaller industry

>> the new ceo of ge bought $3 million worth of the company stocks 400 shares were added to his 401(k) he already has a lot at stake in trying to take over this company. >> the story said that ge has a rule you have to own 20 times as much in ge stock so he has to get it up to over $20 million. it's more encouraging than discouraging the other thing about ge they have an unusually long tenured ceos that's the pats alternative. 15, 16 years so it's not as if he's thinking like jamie dimon this is an opportunities. >> totally exxon model is an interesting one. what they do, they don't allow you to sell the stock until ten years after you leave. that feels it's much

incentivized >> ge may be one of those situations where incentives don't matter jeff got paid a lot of money over a lot of years and didn't end up with good share price performance at ge. if you asked me was he committed to ge? absolutely the guy probably lived every waking moment for ge did that make a difference for the share price >> does the exxon rule apply to become secretary of state? >> $15 million paying him 20 million a year isn't that much. >> if that ratio you're talking about applies. next, benchmark is now guesting sued because it sued uber now shareholders saying the firm is wrong and benchmark which is trying to get the information ceo off the board itself should leave the board, guys. >> a dogfight and obviously got

ugly a long time ago what i don't get, obviously we know the nature of this dispute but really is it a disagreement how the company should be run, who should be the next ceo this is off to the side of what will matter for the business chaos. one word i would use for uber. it's weird a good product that has issues because of the way it's run. which is unusual in today's age. >> i can see why the board says if you're suing this other board member, you should leave the board. >> finally airbnb for your pool. a pool for sue a start up. it's trying to help families enjoy the summer more cheaply but as you might imagine raising some huge legal and insurance questions. >> pool for you, not for me. >> i like and support the

concept which hey you see your neighbor's pool empty half the time >> bring a cup of sugar. >> the rules are you have to have fences or a gated alarm it's strict just by people accidentally going in. >> what would happen you need a special rider on your umbrella and homeowners. kids friend comes over he has to sign the waiver. >> how much can you earn off of this >> you can get in a lot of trouble. drowning all sorts of horrible things >> hot day, you want to go swimming it's spontaneous >> time now for cnbc news update with sue herrera >> reporter: a head on train collision near egypt's coastal city of alexandria killing 36 people and injuring 123 others no immediate word on what caused the accidents but egypt's railway system has a poor safety record due to poor maintenance and bad management

russian foreign minister sergei lavrov expressing his worries about the north korean conflict while speaking to students at an educational forum in moscow. he told them the first one who has to make a step back wards from the dangerous line is the stronger and the smarter one kenyan president is calling for unity after winning a second term saying there's no need for violence but the election commissionsay he won tuesday's election with 54% of the vote the opposition leader received 45%. and is claiming that vote was rigged the los angeles rams have acquired former first round pick sammy watkins from the buffalo bills. watkins has been a number one wide receiver since being drafted in 2014 but has had trouble staying on the field due to injuries. and in other sports news that just broke, miami marlins owner has agreed to sell the marlins franchise for $1.2 billion to a group led by new york

businessman bruce sherman and derek jeter. the consortium is a group of 16 investors. as far as we know this is according to "the miami herald" by the way who is the sole reporting on it, jeter will contribute $25 million of his own money, but he'll run the team and he'll run the baseball operations sherman will be like a silent partner. that just broke. the marlins are being sold back to you. >> we'll ask mr. baseball about that is this below the price? >> about the going rate. i think he thought -- >> jeter wanted this but needed the financing. how many people would back this? >> he's obviously the public face of this interestingly when he was on cnbc several months ago, nothing was going on he's very close to the vest. this is what teams are going for. that disney deal for ban tech,

$3 billion something like that. >> wow >> a lot of money. they overpaid. >> disney? >> yeah. >> question about whether they are overpaying for the marlins longest lasting war in american history. now the white house may try to turn to private contractors to help win the war in average. up next a retired top air force general on whether that could work google's ceo is under pressure details coming up on the closing bell (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings)

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and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. welcome back president trump issuing another warning to north korea today kay low tausche has the latest >> reporter: the president has issued a variety of threats just today, this morning saying the u.s. military response is quote locked and loaded. then retweeting a flyer from u.s. pacific command saying air force bombers in guam are on stand by to quote tonight. last hour on camera issuing another warning to kim jong-un and his regime >> this man will not get away with what he's doing, believe me and if he utters one threat in the form of an overt threat,

which by the way he has been uttering for years and his family has been uttering for years or he does anything with respect to guam or any place else that's an american territory or an american ally, he will truly regret it. >> reporter: that was the president speaking at his golf club in bedminster, new jersey where in just about a half hour he's expected to begin a briefing with u.n. ambassador nikki haley who helped impose new sanction on north korea a week ago and secretary of state rex tillerson who spearheaded the diplomatic approach and has been on a tour through asia this week the president has said repeatedly he won't telegraph the u.s.'s strategy with regard to north korea but we'll see if he talks about any other details before that meeting or after it's over. back to you. >> thank you for now. let's get more insight on this north korea. a former air force lieutenant general david deptula.

thank you for joining us i know we'll talk about average in a moment. on the issue of north korea how do you feel the president is handling the situation are you concerned it will escalate >> well, it is certainly a serious issue and quite frankly dictator kim needs to understand as the president has clearly stated that if he acts in an aggressive fashion towards the united states, south korea or japan that essentially means end of his regime and his existence on this planet and i think the president is doing a pretty good job in getting that message across to dictator kim doesn't mean that military action is imminent but the dictator in north korea needs to understand that he's walking on thin ice.

>> we'll see again over the weekend what more might happen on this front. general we want to have you here to talk about a separate issue in dealing with the war in average. talk about a slow burning conflicts. there were reports lately the u.s. might turn to private contractors to fight that which makes people think of measurcen rirch es how important it is for a private force to handle some of this conflict as it continues into it's 16th, 17th year. >> well, kelly, let me start right upfront by stating that regardless of the number of resources that are applied, that really can't make up for unrealistic policy objectives. so before we start talking about solutions to a problem we have to define what the problem is. now let me real quickly take us

back to 2001 and our first engagemeen ga enga engagements in average and why we had three security objectives first remove the taliban from power. second is we assure there was governance in place in average that was friendly to the united states and her allies. the third was to remove the al qaeda terrorist training camps guess what we accomplished those critical objectives by the 31st of december, 2001 what happened after that what happened after that we had not just mission creep but mission change where the introduction of hundreds of thousands of pairs of boots on the ground was intended to try to change a collection of 16th century tribes and turn them into a modern jeffersonian democracy. that's unobtainable. >> so that being the case and now, of course, we're entrenched

with this with a more realistic sense of what's possible should the u.s. pull out entirely or use private troops as a middle ground >> well it's an excellent question there are a variety of options let me get to the one that has been offered and is receiving some attention including i understand by the president and that's a proposal by mr. erik prince to use contractors in actual combat potential situations to allow u.s. forces to then gradually come home and pull out of afghanistan. number one, it's an interesting proposal however, it's fraught with a variety of different challenges. first legal challenges second, financial challenges and third, there are policy challenges so your audience understands right now it's against the law

for contractors to engaging military application of force on behalf of the united states. that's one challenge that has to be overcome. then there are many others >> exactly by the way, that itself being a significant one. still with all these other conflicts, we'll see if we come to something like that thank you for joining us today >> you bet have a great day we have a news alert let's send it over to leslie >> reporter: regulatory filing showing quarterly filings as of june 30th. what we learned? we learned exact sake in alibaba bought a million shares worth about $634 million they also held blackrock added a position buying $1.5 million, a mail lone shares worth $665 million at the end of june

they added to their position in dow chemical which is interesting because we've been reporting they are working with other investors behind the scenes to shape what dow and dupont will look like post-break up that stake now is worth more than a billion dollars they dissolved their stake in snap and in sails force and in jpmorgan which is notable because they said in their quarterly letter they believe the trump trade was fading now the exception is bank of america where he boosted his stake by 300,000 shares. interestingly these positions from the quarter are emblematic of a decent quarter. it was up. >> i wonder if others believe in snap too thank you for now. meantime tesla and junk, the electric carmaker is not usually associated with that term but changing with the new model 3.

tesla is turning to the junk bond market. google dwefrpts memo and firing ever its author continues to haunt the tech giants now the op-ed page of one influential newspaper calling r e fothceo to resign. we'll have the latest coming up. at ally, we offer low rates on home loans. but if that's not enough, we offer our price match guarantee too. and if that's not enough... we should move. our home team will help you every step of the way. still not enough? it's smaller than i'd like. we'll help you finance your dream home. it's perfect.

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it has skepticive with moody's and standard & poor giving it a junk rating. it worth the risk? thank you for joining us this is hard to talk about because tesla feels like its own beast in the middle of a junk bond market. that's high yield been quite strong i know there was a little bit of choppiness >> the high yield bond market actually has been pretty busy. one thing we've seen is across the board that covenants have been very weak >> in protection for investors >> that's right. so the investors can expect a lot of cash leakage, additional debt that these companies can incur which can potentially hurt them down the line >> yet they are willing to say i only need 5% or in tesla's case 5.at that. >> in tesla's case it tells us

people are blinded bipartisan the tesla buzz, the tesla story and not with standing the fact that this company is junk rated. negative cash flow they went out with a bond that has protections you expect from an investment graded company >> some of those interestingly very much in favor of tesla in this case, you had kind of a whole part of the business that was sort of sequestered away from what bond holders can have in terms of securing this. >> these bonds are unsecured you can only look to tesla or solar city to pay them back. what they did is they said we're allowed to incur secure deshts in the future subject to some limits but we can lean up, give ten plants out in nevada outside of the covenants let's say this deal closes monday they could go out with a deal on tuesday and leaseholders would have nothing to say about it >> it's the first bond offering.

>> they've gone out with three or for you series of convertible bond low interest debts obligations but can get converted. >> what i find so interesting if you want to points to the fed for fed for anything, i would look at things like this. because in effect -- >> not one of those fan boy stocks >> it has nothing to do with the stock. money is to the cheap right now. a company like tesla, 15 years ago, they were paying like 11 or 12% cuek coupon. >> it's that the whole spectrum of what people are willing to accept in terms of what the coupon is, has totally shifted in this era of super cheap money. >> that's right. you would expect investors to expect a trade off for lousy con nants, a coupon, that didn't happen not sure if they priced since i

haven't been on. they're expected to price at five and a quarter >> it looks like what they did it was upsized still don't know why they didn't go the equity round. >> we'll see what happens. a mess is how some are describing the aftermath of the google diversity memo. yesterday, they canceled a town hall over safety concerns. all the details after this

welcome back ceo now under pressure in the aftermath of that infamous diversity memo whso aaly mere cling for him to be ousted from his post when we come right back. insurance compy that knows the weather down to the square block.

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♪ 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, gany ♪ watch this don't get mad (bell mnemonic) get e*trade and get invested welcome back major mr. david brooks calling for google's ceo resignation following the memo about the diversity practice that led to the firing of its author.

diedra has the latest. >> hi. now, the debate over james demore's continues from david brooks at "the new york times" calls for the resignation for fire iing him saying he was either unprepared to understand his research, not capable of handling complex data or too afraid to stand up to him. james himself also writing an op-ed in "the wall street journal" today, he writes that his firing excuse me, quote confirmeded the viewpoint he set forth in his manifesto, that google has a quote ide lodgical ek cochamber google decided to cancel an all staff meeting on diversity yesterday after some employees have been personally named on various alt right social immediamedia accounts and websites. a dwoog l spokesperson says we'll find a better way to help our employees connect and discuss these important issues

further. according to someone spectacular, he had flown back for this meeting yesterday, but decided against holding it because some employees were worried about asking candid questions given newfound attention. the debate continues on the streets. literally, this poster on a bench in venice beach has a photo of steve jobs with apple's slog slogan, think different and a photo saying not so much >> not sure if that representation captures steve b jobs my point being, is apple today and that's not fair because he's no longer there, but is apple any different than google? effectively, all these companies are are dealing with the same diversity issues and google in its instance had to respond, chose to respond the way it did. the question, tomorrow when an apple employee writes the same memo >> i agree with you on that. it's industry wide issue

everyone is having the same conversation and everybody is on the list when it comes to the attention people say the legal liability down the road. >> it's a hornet's nest. how about retail that's another one next week, we get more earnings. >> we had stocks report this week, but still to come, target, walmart, foot locker and home depot all reporting. home depot may be the exception. >> i had this chart prepared for the earlier segment, it shows amazon against macy's and j.c. penny since the start of the year, pu basically, you've had the stock market really equity investors really accelerate in the demise of the department stores >> unfairly? i don't think fst it's a matter of fairness. we know the future is going to be along the lines of netflix more than disney so that's why you see netflix is being a lot of value right

there. amazon, a lot of these industries, you know what's going to happen. tesla versus ford and general motor. huge shifts in value sfwl can they reinvent themselves as brands >> they can, but it's about shrinking, which they're not used to doing. investors. those are classy value trends. trap, trap, trap >> thank you guys both have a great weekend "fast money" starts now. "fast money" starts now. live from the nasdaq market site, this is fast money your traders are -- we are waiting comments from president trump who's about to meet with u.s. ambassador to the u.n. and rex tiller son about the story that has driven the markets all week, the escalating tensions from north korea it was two words from president trump himself that took stocks down this week fire and fury. sending shutters across the