d other countries, and this would be an alarm to me for anybody. >> yep what's your sense, too, i mean, this is a small company without a lot of added layers of security are big companies less vulnerable >> that's a very good question i mean, you have to be very cognizant of what your employees are doing at any given time. i don't know >> fascinating story the dow down 104 points. last hour of trading coming up thank you for watching "power lunch," and "closing bell" starts now ♪ >> live from the new york stock exchange, this is the closing bell, i'm wilfred frost. >> i'm sarah eisen the s&p 500 and nasdaq on pace for the best week in the last five weeks, could push the market back to normalcy. we'll discuss coming up. >> combination of rising rates and home prices could drive home

affordability to the lowest levels in a quarter century. what to know before going to an open house this weekend. >> you've been all over this story, which is interesting because the story's been about the reaction, sharp negative one, in the stock. >> it has. that's despite them all appearing to beat the expectations this morning. as you said, they traded low all day. since then, higher rates delivered higher net interest margins, else for jpmorgan and citi, but loan growth stopped and they warned of rising competition for deposits, suffering income in the year ahead. trading was up, but less than expected, citi up 1% year over near, and equities drove those gains while fixed income disappointed again, else for citi they hope to remain elevated for the rest of the year, but settling back in march and april. wells fargo saw expenses grow 3%

year over year, and there could be more to come. the bank hinted it is, as reported, close to settling on the mortgage interest rate issues saying, quote, the cfpb and occ have collectively offered to resolve for an aggregate, and the entire sector down today especially the universal banks next week's focus turns the bank of america, goldman sachs, morgan stanley, latter two investment banks are outperforming the today, and trading lower, most of all >> i like what jim cramer said on twitter, wait a month, then look at the price. if you look back, the sell on the news thing, once it's digested, as a good quarter, it goes the other way >> crucial point not only up sharply, but up sharply yesterday, up 2.5% yesterday because of the yield pictu

pickup and earnings were good. nevertheless, the share decline is a big surprise. on the surface, good numbers, to be down 2 pakist% surprising pe. >> weighing down the market. the pr scandal for wells fargo, recently, the federal regulators offered to resolve a host of investigations into the consumer banking giant for $1 billion that was earlier this month. back in february, the fed imposed a cap on entire assets of the bank curbing that at $2 trillion, and in january, the bank revealed it double charged an unknown number of customers registered to pay bills ically online. they revealed they found up to 3.5 million potentially fake bank and credit card accounts, up from the earlier tally of approximately 2.1 million. it was september 2016 when this all began, though, with federal regulators revealing bank employees secretly created millions of unauthorized bank and credit card accounts, and it

feels like in this long stair step of events, it's not completely over. >> well, certainly, there could be another fine to come. we also saw, of course, costco up, and its efficiency ratio is disappointing. this is tim sloan summing up the issues >> we're making a lot of progre progress, but as i mentioned in the opening remarks, we've got some challenges that we're dealing with right now, and including the reason that we described results today as preliminary, and we take those issues very, very seriously. one of the lessons learned for us, candidly, over the last few years, that we should have been doing a better job of that when we were performing quite well in the prior years, and weaver not going to make that mistake again. >> of course, we should make clear that overall they did, despite share price reaction and bad headlines have impressive

roe as well. is it time to buy the stock? joining us, scott, and naomi good afternoon to you both if i start with you, naomi, in terms whether the fallout is behind wells fargo or not, certainly, when we consider that unprecedented punishment from the fed hard to think it could get worse in that sphere, the punishment sphere. >> well, yes, certainly. the punishment is high for the first time the fed cast the acts aside of the third largest bank in the united states that's hampering, but at the same time, the potential for a billion or more, just what was announced, additional fines coming in for a consumer-related crime in this particular case against the auto and mortgage sectors, but that is something that might actually, i think, become higher in quarters to

come we're just starting with that number coming out now, and, of course, between the fed cap and between that number, this is not the first time wells fargo paid fines in the last couple years nor the first time wells fargo paid multibillion dollar fines in the wake of the financial crisis what's weighing on the stock on the market on perception is the fact that these crimes continue to become unearthed and settlements continue to be ambiguo ambiguous. >> scott, talk us through your view on wells fargo today, down 3.5% as we standpoi now what would the headline be >> thank you a couple things. first, you know, the litany of fines probablies, issues, never like to see that let's start there. unquestionably a negative and weighing on the share price. going forward, though, reality is the cat's out of the bag where we are over a year and a half into this ordeal, i imagine we're closer to the end than the

beginning than just a tremendous underperformer we are left with a stock that on a valuation basis looks more reasonable than it appears no. 2, the emergence of a potentially very compelling cost story, and then, three, they got just a ton of access capital they return over the next couple years. it should provide support and catalyst for the shares as well. you know, they are not completely out of the woods, but we think the stock moves higher from here. >> we often talk about regulatory risks and fines of the banks, but there could be a consumer reaction as well. client reaction. lendi inin ining dropped 1%, des dropped for 32 billion is that going on here? >> definitely. if you're a person with an account with wells fargo or thinking about it, you see the news where it is creating fake accounts, yes, it was a year and a half ago, but we still don't know if it's over. they said it was 3.5 million, it could go up, maybe stays the

same, mortgage and auto delays in lending and insurance slapped with potential new settlements and fines, and the consumer, look, i don't want to get ripped off opening an account and giving my money to a bank that doesn't really look like it protects me as one of their customers. so that is what is impacting the deposit flow into wells fargo. >> scott, quickly, buy on the pullback >> we would. granted the group has done well, some giveback is natural on a good earnings day, but like it for three reasons. one, short term rates continue in the entirety, good for interest margins, and, two, loot of capital return and deregulatory moves in the environment, which is also a good thing, and, third, improving macro backdrop, there's potential for lending to improve here as the year progresses as well we continue to like the group. >> scott, thank you very much. to you naomi, thanks as well >> thank you breaking news in washington.

here's the details, kayla? >> reporter: announcing retirement this week, house speaker paul ryan is endorsing kevin mccarthy for the role of speaker. he announced that in an exclusive interview set to air on "meet the press" this weekend. take a listen to speaker ryan himself. >> do you have a preference? >> yes i think we all believe kevin is the right person >> to be the next leader >> yes we all think - >> our leadership team, not every single person. >> your understand iing whether it's it's leader or not? >> that's right. >> speaker ryan saying that he did not expect any elections for that speaker role to happen before the end of his term later this year. meanwhile, over at the white house, sarah sanders, press secretary, said there's no announcement from the president on who he would endorse for the

speaker, but has a great relationship with mccarthy big news paul ryan backs mccarthy for the speaker role. >> taking the drama out of what was seen as a race for the next speaker. thank you. despite seeing a rally today, shares of ge are still down 22% so far this year, making the stock by far the worst performer in the dow by a wide margin. today, ge is expected to restate earnings for the past two years, and morgan has more. what do you expect this afternoon? >> well, ahead of the first quarter results that are due next friday, ge is restating earnings for 2016-17 the reason, a new accounting standard took effect making companies reveal more about how they stiestimate revenue from lg term contracts ge expects to cut 16 cents after the 2017 earnings and

anticipates a $4.2 million accounting charge. analysts think it could be higher because it may mean lower price service contracts. the results are not expected to impact 2018 guidance or cash flow, but adoption of the new rules do come as the sec investigates the company over long-term service contracting, a probe revealed earlier this year what to watch for? numbers surprising disclosures falling in line with guidance could strengthen credibility, and, lastly, if some metrics look worse depending on q1 results, that could push up ge's borrowing cost something to watch because yields on ge's outstanding issueances already jumped, guys? >> thank you very much for that. a lot of back and forth from ge today. >> yes >> meantime, a pair of research

notes sighting earnings, and tom lee from global advisers says, quote, looking for overall earnings results combined with weak sentiment, contrary signals should be a positive catalyst in the month. meantime, jpmorgan note saying the earnings season should be a significant support for equities as companies deliver stronger than expected earnings growth and provide guidance on shareholder returns from tax wind falls let's bring in our own bob pisani for more. there's an idea out there that earnings are set to look good. revisions have been higher, and, yet, this market is not necessarily positioned that way, bob. what are you seeing? >> look what happened today. i'm with you, wilf, in the camp that says we've had a nice runup in bank earnings earnings jpmorgan trades down on the day earnings come out, but not too much there's a significant group of people, earnings peakers,

believing the market is peaking in earnings growth look at the numbers for the first, second, and third quarter. 20%. the peakers say, all right, we agree, you're right. look into 2019 the numbers are half as good most of the tame they are up 10%. this means decelerating earnings growth, still growth, but decelera decelerating the argument is, come, maybe not this quarter, but the third quarter, the market's going to wake up to the fact, and we're going to have a problem. now, my personal feeling is that we should worry about this not yet, and there's a number of factors that could drive numbers higher >> every bank analyst today pretty much sort of suggested the market is wrong, the numbers are good we should be up. we're not. the market can't really be wrong. it's not like we are down half a percent, but sharply >> i don't think the market necessarily has to be wrong. banks traded in the sort of fits and starts and outperformed on 12 months, the s&p 500, and you had periods where they don't work well. i do think that they suffer a

little bit from the fact that the bull case is so obvious, and they detail the same points, and it's linear and sounds like checkers, not chess. that's fine. that works overtime in the markets, but day-to-day basis, it's about the rate of change. oh, are you going to have to spend more on deposit growth than we expected before, so people are chewing up the estimates. for banks, it's not a big concern, but it is a question of whether they can really be a leadership group because expectations are seen in the bath >> speaking of expectations, we set up the segment with the jpj morgan notes that everyone talked about, and in the note, they looked at the one year ratio for the market, valuation measure at 16 times. when was the last time the market was at 16 times in an earnings season expecting 20% growth, could surpass that, and 7% revenue growth? >> 16 times is about the five-year average for the s&p 500, so there have been periods where you were expecting rapid

growth >> 15 times with cash. >> a big debt count to the 18 plus two months ago. of course; when it was 18 plus, goals said, of course, valuations are a terrible timing tool valuation is the climate, not the weather. >> i think the important thing, if you look at the banks, the banks are cheap right now. what are they? 13 times maybe less than 13 times forward earnings that's telling you a lot right now. that the market is not particularly putting a high multiple on them to me, i see that as a good sign and a sign of positive growth. there's two things number one, there are signs tax cuts may have greater impacts that we are expecting. i can talk about that more, preparing something for monday, and, two, there's signs that the buybacks may be bigger than we've been thinking in the last month or so, and if that's true, then those numbers are going to be even higher >> the way i look at it is all that's on paper makes sense. we should be set up for earnings to help the market, and so, therefore, if a couple weeks in, the market is not responding, you have to start to ask what else is going on

that's what i think the suspense is about now >> banks cheap relative to the rest of the market, but expensive relative to their own past decade history. >> yes what are they? 1, 1.1 >> yes thank you very much, looking forward to see you more throughout the show, of course a news alert on wpp, dom has the details. >> the advertising giant right now in focus for traders because of headlines from dow jones and the "wall street journal" saying the wpp board of directors is looking into a possible leadership contingency plan in the event that the ceo, sir martin sorel, leaves they go on to say the board is considering current wpp veteran, mark reid or andrew scott as co-ceos according to the sources, and all contextually looking at this because of the context of sir martin sorrell

being internally investigated for allegations of personal misconduct some reports say it's a financial nature the company says even if it was material, anyway, all of that being said, this surface story right now is a focus for traders out there. the stock off the highs now, but clinging on to gains for the day. see if they hold into the closing bell, guys, back over to you. >> thank you very much for that. it is 43 minutes away to the closing bell, down 189 points on the dow, so down .75 of 1%, well off the highs of the session, which, of course, up 163 points at the open. we are at the lows of the day now. all right, the "closing bell" is just getting started. stocks poised to move this weekend. plus, one of europe's top regulators lied regarding the next move against facebook and alphab, d reetanmo

this is the closing bell on cnbc live from the new york stock exchange world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. and it's also a story mail aabout people and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you

you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back, 40 minutes until the close, you see from the intra-day chart, arrived at session lows quite a significant selloff

we've seen in the last 15 minutes or so. dow down 220 points or a full percent for the dow. >> all right, the american association for cancer research meeting kicked off this weekend in chicago there's a battle brewing between two giants over lung cancer drugs. we are joined now with that story by meg >> lung cancer important for medical research and a big deal on wall street as well because of the unfortunate size of the market lung cancer is the second most common cancer in men and women and causes by far the most deaths from cancer, more than 200,000 new cases are expected to be zdiagnosed this year in te united states. we see positive new advancements in the space from a class of medicines that unleashes the immune system on cancer cells, and there's trial results on monday that'll better inform doctors how to use the drugs there's huge implications from wall street and to show this, just look back at august of 2016

when they lost $20 billion in market value in a single afternoon after some disappointing clinical trial results. heading into the weekend, evercorp. surveyed investors and found they are optimistic on merck's products on monday those will be the company to watch monday morning back to you. >> meg, thank you very much. we certainly look forward to the results come monday, no doubt, big market movers as well. we got 38 minutes before the close as we just mentioned, near session lows, we've come slightly down .9% for the dow as it leads the s&p and nasdaq, but all indexes are low, as you can see. coming up, shares of zillow fall sharply after it announced they are getting sp inting into business the move and why it's sending the stock lower. crude oil declines, more than 8% this week, and energy stocks on pace for weekly gains. best performing sector week to

date will tensions send oil higher? breaking down the trade when we return in a couple minutes

at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. hello. give me an hour in95. tanning room 3. cheers! that's confident. but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident. forgot me goggles. kayak. search one and done. kevin, meet yourkeviner. kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you.

welcome back to the closing bell, here's stocks to watch dropbox reduced in new coverage, the firm says dropbox's rate of is low, and that's hitting the stock, which, as you can see, down a decent 10% or so, and it

has strong performance since the ipo, of course, but down 10% or so today a user of it actually. >> dropbox >> yes because you use it initially rather than the serving being better you see the threat coming through. >> not me, but i read the note, and there's a lot of substantive arguments here that resinated with inest vers. no. 1, it's going to be hard to compete with microsoft on enterprise because right now it's consumer-focused and it's hard to convert people from free subscribers to paying subscribers and free, what is it 2 gigabytes of storage that disappears quickly, and they warned about security and encryption >> all one theme throughout them, which is scale drop box had it eight years ago, but clearly, microsoft, google, amazon, offer very - >> every's in it >> similar statuses. >> ipo is better >> a stock to point out, another loser in the session

zillow they are getting into a new business, business of flipping homes. they cut from hold to buy, and on this increased balance sheet risk, and we talked to mark of rbc about this, basically, zillow gets into the business of buying homes in a few test markets, phoenix and las vegas, refurnishing them, and then flipping them and selling them it's a new line of business, and investors are not pleased with the debt they will be taking on in order to do that. although, mark said it's great, high margin business if it works. >> down 8% talking about house prices in the second hour of the show as well. mentioning zillow's drop in price, and home prices

at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got

near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item. play [music plays]his". when everything's connected, it's simple. easy. awesome.

welcome back to the closing bell, i'm phil lebeau with breaking news regarding general motors look at shares in general motors the company announcing within the last 15 minutes that it is cutting several hundred jobs at its ohio plant it is eliminating one of two

shifts at that plant, the plant that builds the chevy cruz because of slowing sales for cars overall and the cruise. that's why they are going to be eliminating half of the 3,000 workers at that plant, although, we don't have a defined number at this point. look at the fall in numbers for cruze, down 55% this year compared to 2014 if sales continue at the pace this year they are down 20% this year. general motors report earnings this month we should not be surprised to see the move from general motors it's just not going to crank out cars sending them to dealerships if people are not buying cars. they want suvs and crossovers, that's not what they build at that plant back to you. >> thank you for that. down half percent weighing on the broader market time for a cnbc news update. >> here's what's happening this hour

israel says an iranian drone was armed with explosives meant to carry out an attack. israel concluded that after analyzing the downed drone house democrats slammed president trump for his latest twitter tirade involving syria california congressman thompson led a news conference to voice concern over voice's tweeting. prepare, russia, u.s. missiles are coming >> the president's behavior is reckless and irresponsible it endangers the lives of the men and women in uniform, people who put their life in harm's way to protect our security. we must stop these public provocations immediately >> and the dallas cowboys released bryant, one of the league's most talented receivers, over 1,000 yards each season from 2012-2014. his production has fallen off the past few seasons, so he's gown from the cowboys. that's the update at this time

back to you. >> thank you very much for that. the s&p 500 is on track to post the second weekly gain in three weeks. despite that, the index stalled off in the last hour of trading during this week joining our exchange today, matthew chestnut, and jeff from kkm financial. a very good afternoon to you all. matt, you are here at post nine, start with you beg the bank decline, the market we are looking at, is it encouraging? selling off into the close, but could we have been down more given how important earnings are and how banks are today? >> focused on earnings, anticipated them to be the analyst for the up move. that was not the case. they were priced to perfection and sold off aggressively, and it feels like it's going to extend in the close. i mean, we're trading near the lows, so we have not had any bounceback what's earn couraging to me,

though, the vix is down while the market's down. the market does not know how to read it. looking to another sector to put our money to that could be monday when we get trading firms historically known trading firms with goldman and morgan, they could get the uptick in the bigger names meantime, broadly at treasuries, 10-year yield, 282, what are you hearing >> well, i think it's the rain bound market we're seeing. we saw the s&p 500 get back under 2650 to matt's point, a lackluster response by the vix, but right now, the pricing in earnings season, it's been sensational. s&p analysts look for 18.5% in the first quarter. that's a high expectation. the longest rise in 7 years. that's an opportunity here to take some promise, and they are taking a promise in the financials after just a pretremendous report seen this morning in jpmorgan. >> in terms of other quirky

options where to put money at the time, you're looking at high yield, is that right >> well, not necessarily here in the united states. i like global high yield i'm more interested in finding places that are not going to be subject to the tweets, the taunts, and so i was quite surprised that financials did not come through well today, even though the numbers were great. there is a bounce in the market, i want to be in something with the ability to bounce back rather than being a dead cat bounce >> which are you picking up today? >> i really like being in jpm e jpmorgan they are great i think that citi bank, bank of america is great, but more importantly, in some of the asset management, financial institutions, blackrock is the largest asset manager, and i'm really, really enjoying the fact they are actually now going to be taking somewhat of a socially responsible filtering by getting

rid of companies that manufacture guns or retailers that sell guns, and so we're finding more and more people my clients are interested in impact on being socially responsible. they are raising the bar in that space. i think that's great >> thank you very much for joining us matt, jeff, thank you very much. >> thank you eeu has sweeping internal regulations afghanistaning how companies like facebook and google do business in europe in light of facebook's data breach, u.s. lawmakers called for similar protections here joining us to discuss this and more is the eu commissioner for competition. it's a cnbc exclusivement welco -- exclusive. great to see you, welcome back >> pleasure to be with you how are you doing today? >> i'm good, how are you doing today? >> i'm good. did you watch the ten-hours plus of testimony on capitol hill >> i saw extracts from it, you

know, it was big in the european media as well as here. >> so what do you think about some of the defenses about questions of the way facebook handled our data and our privacy? did he explain it well >> well, i don't think this is done with two hearings i think more investigations are coming my colleagues are in europe, in contact with facebook, but very important thing is that facebook said new consumer rights when it comes to privacy, they'll use them as a global standard, something they'll do for europeans and use that as a global standard. i think that is important because as citizens, we need to be able to afford rights when it comes to privacy these rights are simpler than what we had already. >> yeah. a lot of lawmakers mentioned what happened in europe. i want toed play an exchange

zuckerberg had with senator graham when it comes to facebook potentially anti-competitive behavior, your turf. just listen to this. >> who is your biggest competitor >> senator, we have a lot of competitors. >> who is your biggest >> i think -- the categories -- you want one i don't know i can give one. >> you don't think you have a monopoly >> certainly doesn't feel like that to me >> does it feel that way to you? >> continue. >> i'm sorry, does it feel that way to you that facebook doesn't have a monopoly as zuckerberg said, commissioner >> well, they are particularly big, but for us, one nithing is when you see a big market share, it's a different matter to say that, also, sort of from a legal perspective, you are a dominant position, and that, of course, is very important because you can do things as a minor company that you cannot do as a dominant company because if you are

dominant, well, then, competition weakened already and you are given special speedometer. you know, we don't have a facebook case as up such we have no complaints when it comes to facebook in europe. the germans are doing an investigation, and that, of course, we follow closely to see if they find also by the end of the procedure that facebook has have behaved in an illegal way when it comes to european legislation. >> commissioner, you mention ed the german case, which you said is building. is there a sensewhether it's i brussels, the eu itself, or individual nations that more of the government, more of the regulators do the to assess tech firms, whether it's because of data privacy issues or just general market control >> well, the thing is that in europe, you're more than welcome to have success. if people like your product, if this is the reason why you are growing, well, you are more than welcome.

there's so many successful u.s. companies in europe. thing is, of course, is that if you misuse that position, that size that you grow into, well, then, congratulations stopped. that goes for old-school companies as well as debuting companies, and, of course, we take a closer look, and that's the competition responsibility, but colleagues of mine, they work on privacy issues, on taxation issues, because it is important that also digital companies contribute to society where they make their profit >> you have done a lot of work, and we've had a lot of conversations back and forth on google, in particular, levying a huge fine, billions of dollars on that firm changing the way it operates in terms of shopping, but how did it change business they still dominate search are you looking into whether they are a monopoly? >> well, google cannot be

successful it is to have a market behavior that is legal. and the case is about a legal behavior to promote shopping and demote competitors and rivals who are paid for in the search results. now we're in the process of looking into whether google actually is complying with the decision, and treating rivals as they treat themselves, since they are a dominant company, and it will take us some time because it's a rather granular analysis to understand why choices google makes, still shows google shopping box to be google, google, google >> why do you think eu, you, your office, european regul regularators are tougher than u.s. regulators? >> well, i, myself, am very careful to compare because the market situations are different.

i think for us in europe there's a long tradition to say we want free and fair competition, but we are willing to frame the market because the market shifts the citizen in his or her role as a customer, and that's very close -- this is an idea about society that anti-trust -- idea about the society where the consumer actually has the right to have a fair deal. >> commissioner, what's your view to protectionism? the u.s. tech companies are so, so dominant globally, in fact, th the only real rivals are in china, and the only reason why is the original u.s. companies were not allowed to operate in that region, and europe's a good example of lagging behind u.s. and chinese tech companies because it's been so open. should europe have been more protectionist against some of the tech companies a decade ago so they had their own competitors like china does?

>> well, i think it's very important for european consumers to be able to choose a lot of people like the products and the services that they buy with data from google or facebook. i think that's fine. we want fair competition of course, colleagues are working to make sort of the european ecosystem be stronger it is working. europeandynamic, entrepreneu entrepreneurs, and startups. we want to see a european capital market willing to support these companies because we see a lot of them being bought by, for instance, google or ibm for that matter >> so a lot of silicon valley companies are scared of you. a lot of people in this country know about some of your actions because of the big fines and the big companies you've gone after.

you think this is your final year as anti-trust commissioner in your term where will you focus which companies? which industries >> well, you know, if you really want to change things, you have to be consistent, and we will continue with our main priorities, which is anything digital as one, and, second, energy because in europe we change the way that we produce energy and use energy due to, among other things, climate change, and, thirdly, that, well, we look into taxes because member state plays should not give some businesses selective advantages not available to other businesses because this is not fair competition, and this is still our guiding priorities, and, of course, at the end of that road, it's hopefully a fair market for consumers to get the best possible deal >> and potentially more multibillion dollar fines like the 13 billion euros levied on apple. thank you, commissioner. eu's antitrust commissioner.

>> a pleasure to be with you, thank you. >> by the way, zuckerberg was called to the european parliament twice unclear whether he shows up, but from the interview, you can see tougher questions. >> i'm sure. of course, called to u.k. parliament, he's not appeared in front of, and next week, we get the former ceo of cambridge analytica. up next, the head of trading at tdameritrade. stay with us on "closing bell.

♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony. what are you working forward to? synchrony. of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance.

where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. 12 minutes before the closing bell, ge is actually leading the dow for the change boeing taking 56 points off the

dow. victor jones, director of trading for td ameritrade. nice to see you. how are the crazy volatility affecting the market >> we have to put things in perspective. this week, a very different week from last week a 70 point move high to low in the s&p 500, only 60% of the reigns from last week, and i think that consolidation of price activity is one of the key reasons you see the vix move from 21.5 where we ended last week to the mid 17.5 levels. creating opportunities for hedging, opportunities cheaper, but at the same time, risk is not disappearing from the market, and to the question, over three months, they have been reducing overall market exposure, but there's sectors, in particular, energy as well as consumer discretionary and materials our clients remain overweight >> victor, we've been hoping or asking the question of whether

earnings take the focus off the negative issues, whether it's geopolitics or trade, does the bank numbers today and negative share price reaction to them make it a hurdle for that to work so much higher? >> i think you have to be careful here, and bob pisani on your network does a great job pointing it out. financials overall going into last quarter if you remember, they stumbled out of the gate, revising overall s&p 500 earnings down from somewhere from is 11.5 to 10.2 you have to be careful here about reading into the financials in terms of extrapolating that into overall s&p 500 performance. this week has been about market structure. look at the s&p 500. held at 26 to 2650 range, and index held, gold failed, i should say, safety level, the fourth time this year, so what didn't hold is the oil market

structure. we broke through creating new highs. look at crude oil. risk free to remain in the marketplace. you have crude oil up 11.5% so far this year, but xle, a basket of stocks that attract energy stocks, and down 3%, so if we continue to see risk premium remain in crude oil, you have catching up in the energy stocks that's happened over the last couple weeks >> victor, thank you very much for joining us, appreciate it. victor jones in 15 minutes, we halved the losses, down half a percent on the dow now with ten minutes left of trade. why this year is shaping up to be the worst drop in home foorkt s? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade.

the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

you know what's not awesome? gig-speed internet.

when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. . rising rates, home prices could lead to the worst dropping in home affordability. here's more. >> well, we talk about rising home prices and national numbers but if you are house hunting this weekend, you know it's about the monthly payment you can afford it's projected to weaken this year at the fastest pace in a

quarter century according to arch mortgage insurance. it weakened by 5% in the first quarter and could weaken another 10% to 15% by the end of the year some markets will be worse the average monthly house payment in tacoma, washington could go up 25%, and in boston and baltimore, 21%, and philadelphia and vegas could see increases. realtors see people taking risk to win a deal in the competitive market, waiving inspections and appraisals, putting down small down payments. in fact, the share of borrowers, debt payment is more than 45% of the income tripled last year and comets this year part of that is that fannie mae loosened standards, but, clearly, there's a lot of demand waiting for it a lot more on cnbc.com back to you guys check it out thank you very much for that up next, coming right back

- i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest. holiday inn express, ♪ ♪ wake up early, o. ♪ slap on some cologne

♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo. welcome back, 90 seconds until the close, recovering nicely in a half hour, off the lows of the cay, about a percent for the dow, now down half a percent or 100 points. the other indexes doing just better than that look at the sector performance that is today, very clear financials at the bottom,

utilities, the best performing sector, look at the banks that have reported very disappointing numbers in terms of share price performance, wells fargo, jp down 2%, 3%. goldman sachs and morgan stanley as well, relatively out performing, yet to report investment banks are expected to do a little bit better when they report tuesday and wednesday respectively sectors weak to date, again, energy at the top, and in terms was other performance, weak to date, you got seven out of 11 higher, and energy's up some 5% or 6% for the week as a whole. imprezzive utilities near the bottom, and worth remembering, bob, bringing you into the close, if the theme overall, despite today, up 2% for the week, and -- >> oil price up. >> and energy. >> and i'm still in the news camp -- i have to get my mic still in the sell on the news camp today this is not the start of earnings peak story overall for

the markets. i think that we're going to see technology do well, and technology held up well. down fractionally today, and energy has emerged as a new market leader. >> i don't think the rally's necessarily over sharply up for the week. there goes the bell. cvs corporation ringing, international women's health coalition at the nasdaq. down 122 points on the dow sara picks it up and welcome to the "closing bell," i'm sara eisen in for kelly. s&p 500 off the day's lows, finishing lower by a third of 1% nasdaq off by half a percent, same with the russell index, small caps, important to note, a

higher week overall for stocks, 2% higher ending on a weak note. we got our senior market commentator, and with us, john blank, chief equity strategist, and bill smead, ceo and cio of smead capital management s&p turns out, biggest winner for the week was reforces, and american airlines was the loser. the most important story of the day, the banks, which got pummelled after what so many people said were better earnings >> yeah. i think for a number of reasons why we see them pull back we discussed throughout the day one was the trading was so expected to be higher because volatility picked up it was in equities, but disappointing, of course, in fixed income, and, yet, we saw margins, because of rates rising a bit, but did not see volumes of loans really pick up. all in all, mike, bringing it

all together, it was not enough based on already great expectations >> exactly right i mean, i think basically top and bottom line beats were baked in and, of course, over the course of the day, the treasury yield curve compressed, and you got down to the smallest thread between the two year and 10-year note, and that works psychologically on the market, not just for the banks people just worrying if that's just a late cycle stuff, the economy is to the really in an acceleration pace. that's all fine. i do think that was what was one of the things, though, that was weighing on them >> the bears and bulls excited about earnings don't worry about the tweets and risk of a trade war or geopolitical event, but bill smead, is this is reaction of banks that the bar is higher than we think, than the bulls think for earnings beats >> we think is more has to do with what were the momentum success stories of last year you know, the banks had a great

year in the markets, last year, and people waited until this year to sell, and then you combine that with the fact that the hedge fund and professional guys got way over committed to the trade. only thing for crowded is trade, and tech is the crowded trade that never died. we trimmed ownership of jpmorgan and bank of america last quarter while they were popular, but as long term orders, you don't get out of all of it, just sit there, take the punishment on the part you know you go through the correction with. >> mike, we talk about this being more of a stock pickers' market this year than last year and interesting within the banks today, not just the ones that reported, but across the sector, investment banks doing a lot better than pure retail banks, wells fargo and pnc down 3%, 4%, and they could still kick the broader sector into gear next week when they report. >> theoretically could

differentiation on the banks that are not dependent purely on net interest margin, investment banks would not be as much pure plays on the market, volatility, we've seen, you know, i do think that it's an interesting, very, very early test how earnings are received you have a strange setup where the market was down, usually up 5% in the month before earnings season, and, also, earnings estimates come down into the report it was the reverse this year is the bar high, or share prices discounted that's the dynamic >> or just a market driven by headline risk right now. >> yeah, yeah. >> is there a lot of risk going into the weekend of a potential conflict with syria escalating, you got comey, you got a potential trade war with china all the tweets were market moving >> by the way, in that context, the fact the market of down .25 a percent today, it shows you the market's attempting to tune

that out, not 100% successful, but it's trying. >> do you use today as a moment to buy the broader bank sectors given that relative to the broader s&p 500, it is not overpriced >> it's a good point you know, forward pe on 13, long term, these look good. to me, i say, though, to the point of stock pickers' markets, you have to choose amongst these banks. i don't think the reports from wells fargo are anything to be happy about. they got some serious issues with compensation trying to keep people around, and then you've got citi, basically pricing its book value they got a global growth story that's kind of sputtering, and the only really attractive bank and stock is jpmorgan. knit that together, put it in a bank, hey, buy it? the answer is probably neutral i think that's why we see the basic story of this market being hold it's a technical hold of 200

days, a technical hold on the risk, and that makes sense to me right now. >> you know, bill, what i hear people talking about this earnings season is the use of cash watch the cash levels rise, especially as the companies get the benefit of the new lower corporate tax rate what are you expecting, and which industry should we pay attention to in terms of beneficiaries of the increased cash >> well, you want to -- you want to be domestic, obviously. the companies with domestic revenue benefit, but there's so many disconnections right now. you can talk about the tax rate. you can talk about the tweets. you can talk about the other things there's such substantial swaths of the market that no one wants to touch because they are to be the people that get destroyed by the fang companies, and what we learned the last couple months is whether the fang stocks do well or they do poorly, the people in their way do poorly anyway

regardless so we think the best opportunities -- value investing is not going to die. the reason is if you pay for a bird in the hand, it's worth more than two in the bushings and, secondly, dividends matter and expectations matter, so just as an example, discovery communications, costs about 10% to make unscripted television, and we're on unscripted television right now, that's what it does to make scripted television nobody cares millennials do not watch tv of any kind, shape, or form when they are 50 years old. we think that's wrong. there's great opportunity there. >> in terms of the graphics and the charts, so far, of course, over the week, a whole, up 2%, but the sentiment-wise, do you think bears are outweighing the bulls? >> here, importantly, when we look at what is supporting the market right now, sentiment is one of those factors we saw last week, a big spike in

football, and this week, the survey data is flipping. we brought with us the aaii, bull-bears survey. for first time in two years, there's more bears than bulls. this supports the market trying to put in a bottom here, which we think it's doing. >> in terms of volume broadly on the s&p, what's the take aways >> yeah. i think what's interesting the last two weeks, as the s&p has retested the old lows, it's done so on considerably less volume, nearly half the volume seen in the february bottom. this is very common during corrective phases as the market will retest or undercut an old low, you tend to do it with less drama, less volume, less volatility we see that here consistent with the package of data that suggests the market is bottoming here >> foolish signal to bounce back from here? absolutely i think when you look at the leadership construct of the market, recently, small caps

outperformed large cap, discretionary do better, and on a lot of attributes we look to for signal that have frankly improved over recent weeks >> yeah, no -- >> i think all these things are rounding into place, i think, to have the makings of some kind of a bottom that's what you see this week. it's pretty telling that this two month or two and a half month period of difficulty for the market happens between earnings seasons when you essentially corrected overoptimistic sentiment and also, you know, have a little bit of check on valuations i guess, what you're saying, chris, nothing really long term in terms of trends changed, but we need an adjustment. the question i have is, you know, when can you make that call that perhaps this bottoming process is complete? >> yeah. well, i think it's underway, and i think when we look at historically what we want to see at a low, a lot of the factors are already there. we've had fewer stocks make a

new low over the last couple weeks. volume diversion, vix is lower today than in february, and those are all the characteristics of a good low. we think this market is making its 2018 low right now, and we certainly would not be short right here >> christopher - >> i'm - >> sarah - >> yeah, yeah, when i was on your show, a week or two ago, i mentioned that the professional sentiment was not matching up with the individual investor in two weeks, we've seen professionals begin to buckle, so if there's one and a half bears for every bull, individual investors, but there's still way more than two times as many bulls and bears professionally i think your other guest is very correct that another month or two of this correctsi icorrectis scares professionals into their spot, and then you have a good market forward from there. >> all right we want to move on to a new topic, but thank you, all, for

the technicals on the case up 1%, junk bonds, inflows picking up what's it mean for the broader market a sign people are comfortable? taking risks again >> i think credit markets in general have been in the asset column column, supportive, even as stocks had the pullback, no high yield spreads, kind of get stressed, sometimes you see it if it's a bigger systemic or economic problem it reflects the fact that that part of the capital markets has basically been okay. in terms of etf flows, that's reversal of outflows from the prior month. it's a decent size the bigger issue is that credit markets in general are kind of flashing the green light >> john, your take on this is this something to avoid or jump into at the moment? >> oh, you know, it's another one of these holding patterns scenari scenarios. if you take a look back at the

high yield bond market over five years, you have a huge collapse into early 2016 with the oil price slashed, and then bonds so blown out in the high yield area, and that caused a rally in the spreads for all the way up into the middle of 2017, which is now seven, eight monthsaway and that was the big bull rally, and then what happened the last six months is we've actually seen an increase of spreads and some correlation with worry and some worry about the overspending of the government creating pressure on the interest rates and credits potential for a con con they gent it's not like we go back to the wide blowouts, but i think we're going to be having no risk-on-play coming from the bond market keeping stocks silent >> when we consider the picture

of yields elsewhere in the world as well, it's still a long way to go before we're at normal levels >> absolutely. >> europe, japan, unbelievably low still. >> without a doubt one of the reasons, i think, you have a consistent bid in u.s. corporate debt, right? where do you get 6% yield. it seems like they are reasonably safe, so, yeah, that is a factor. >> the story is interesting. this was a week where we had the first minute from chair powell's first fed meeting, and that was important, perceived as then being a little more aggressive i don't want to use the word "aggressive" - >> determined is the way to put it >> to raise rates and confident in the 2% inflation target they were talking about whether they need to see a faster pace of interest rate hikes, and i just wonder what's going to happen with the bond market. holding in at 3% >> it is, but then the short end reacted. 235 and long end comes down.

by the way, that's been the pattern when the market starts to anticipate the fed marching on when the economy, itself, is not racing ahead >> bill, your view on the picture and which sectors you are pushed towards >> i think it comes down to where you think we are in the economic cycle your point is well-taken the new fed chairman, if you read through the lines of what he's saying, he is acting like we're in the late stages of an economic cycle if he thought it was the late stages, he would be afraid of tightening credit, but he seems pretty confident about raising short term rates, and the reason is we had the most anemic economic recovery off a deep recession in u.s. history, and the human effect of that has been small compared to most recoveries so let's just say we're in the fifth inning of the economic recovery because i think most people think we're in the 7th or 8th inning, so what that would mean for junk bonds is the

strength in the economy makes the credit quality better, but the higher interest rates make it less attractive, and in the case of the overall economy, remember, we're still building way fewer houses than we did at the bottoms of recessions and even in the '90s and 2000s before this segment, there was a housing affordability thing about how unaffordable guess what, the history of the united states is, we build a lot more homes when they are unaffordable than when they are affordable they were incredibly affordable in 2011, and we built the smallest number of homes in a single year in 60 years. when people get married, have children, they want a home, it doesn't make a difference what affordability is they will do it. they got to have it. we think we are earlier in the economic cycle than most people do, which is why our optimism about the banks is after they get down with the corrective process, we'd like them to make

a lot of money from millennials joining the economic party >> we know that's your theme guys, leaving it there we covered a lot of grounds on a lot of issues this >> we did, indeed. >> bill, john, and mike. >> action-packed day back for the second half with more to come straight ahead, a new report on just how much money saudi aramco makes, leaving this country's biggest companies in the dust plus, the new note on netflix making investors think a lot about how high this stock can really go. this is the "closing bell" on cnbc, live from the new york stock exchange opinion ke! finally. you're still here? come on, denise. we're voya! we stay with you to and through retirement... with solutions to help provide income throughout. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. oh. so, that means no breakfast? i said there might be breakfast. i was really looking forward to breakfast. i know...

voya. helping you to and through retirement.

. president trump and his security team debate whether to attack syria >> michelle caruso-cabrera is live at hq with more on reports of what u.s. and british deployments look like in the mediterranean. michelle >> both the president and defense secretary general jim mattis pulled back on an imminent strike in sere yria ov

the last 24 hours, but the unit the kingdom says the u.s. is setting the stage for something. largest strike force since the 2003 iraq war was headed towards syria last night as u.k. prime minister may won the backing of the cabinet to join the u.s. in military action. times reports four destroyers accompanied by two subs are in the mediterranean heading east carrying four missiles and got two b-2 stealth bombers deployed from missouri, and the aircraft carrier with five warships should be there next week. the u.k. deployed six typhoon fighter jets, attacking reconnaissance, two submarine, and a destroyer, and report france will deploy factor aircraft from france as well so no reports right now that anything is imminent to happen, in fact, the administration walked it back, but, certainly, it looks like they are trying to

prepare in case. >> absolutely right, michelle, and may in the u.k. decided enough backing from the cabinet not needing to go for a vote in parliament if they go as far as deciding to attack michelle, thank you very much for that meantime, investors anxiously awaiting the initial public offering of aramco now, we might just note how much the company is worth when that happens. financial information leaked to bloomberg shows they own 33.8 billion dollars in the first half of 2017, significantly bigger than apple at 28.9 billion. aramco disputes the report >> joining us now, rbc capital markets, of course, the size got your attention to begin with, and now even more so questionable to whether this is true and how big the profits are? >> it's something a big company basically guard ed with, you

know, great secrecy, saying today they are not official reports. what we know about saudi arabia is it's a very, very low cost producer, and that was the key figures in the report today that basically $4 in terms of the listing cost i mean, that's one of the key reasons for the, you know, huge process, and there's specific stock analysts, and the numbers out there, if they are true, the company is nice, and if they are true, does that impress investors? >> $52 billion in cash, 16.2 billion during the last -- you know, during the quarter >> i think one of the things we have to think about is not an equity analyst, but think about valuations we don't know what they are looking for. the saudi crowned prince put that $2 trillion number out there. officials never came out with the valuation number, so i think that's very interesting.

i still think the bigger issue they are going to be is where is this thing going to be listed? we know there's a local listing, aiming for 2018, and we still don't have a lot of information about international listings, whether it's going to be private placement with asian investors, whether we have russian investors involved in some type of private placement, so i think that's what everyone's watching to see what does it look like. >> mike, i guess how much transparency we ever get - >> exactly >> fully or not, and that's today's issue. >> i would say $33 billion that's -- is that an annual net income number? is that what we are led to believe? >> first half of 2017. >> okay, this you go >> correcting myself, too, 15.2 billion was cash flows from operations during that period as well >> okay. first half say it's 70 billion a year, how do you get 2 trillion off of that apple's going to have 60 billion in profits in a year or so, and it's not at 1 trillion, and it's not an oil company >> and - >> and a lot of play in the

numbers. this is not a company that's been run to produce reported bottom line income >> no. they have a low production cost, but the profits funds the entire state machinery, and so they pay for school, clinics, the entire social service network is through aramco, military operations, funded by oil earnings this is saudi arabia inc >> clearly, tensions in the middle east and a number of areas is varying oil prices significantly. is that move the right size move given tensions over there? >> coming against a very constructive, you know, oil fundamental company. the ia was out today basically saying mission accomplished for opec in terms of reducing inventory. it's a tightening oil market the geopolitical developments are occurring in the market. that's why we have the type of price move, but as i said

before, i think that concernsi yemen are warranted. we are having actual attacks on saudi arabia, and energy infrastructure is targeted, so that conflict does have real physical implications for the oil market >> syria is not an oil producer, right? so it the worry there the u.s.-russia potential standoff, two of the world's biggest producers? >> obviously, it's the u.s.-russia, but it's also what if we get israel, iran through the war, because we did this reported israeli strikes in syria over the weekend aimed at at air base where iranians operate drones there could be multiple conflicts. >> unrelated, but important is venezuela. >> key backdrop why opec worked well venezuelan production dropped like a led balloon month on movant nth declines at 70,000, they are down 800,000 to a million barrels a year that's the offset for shale. >> thank you for joining us.

>> thank you netflix shares soar more than 60% this yearment coming up, fast money traders say whether the stock keeps rallying after netflix reports its earnings on monday plus, as wee have been talking about, banks kicking off earnings season, banks set to report next week and whether they spark a rally. s you were paying? was your broker a fiduciary? were you satisfied with the attention you were getting? then i explain that being independent gives our firm more freedom to act in their best interests. independence lets us do that. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com where can investors seek pin an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses.

and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. with the extra third rowr... of seats. they think it's theirs. look at them, they have no idea! it's not theirs. it's mine. mine. mine. mine. the new lexus rx 350l with three rows for seven passengers. are you excited about your baby sister coming? experience space for the unexpected with the rx l, part of the rx family. experience amazing at your lexus dealer. nothey're not investing iney commoditiesies. or fixed income. what people are really putting their money into is what they hope to get out of life.

but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item. a market flash, biggest

moves, phil lebeau has the story. >> talking about allegiant. they go to bigger cities as well, but not every day, maybe once, twice a week well, the stock is under pressure today because "60 minutes" has an investigation that will air on sunday night calming into question the safety record of allegiant airlines this is just filed video of allegiant. the safety record is compared with competitors, "60 minutes" say it's not as good as competitors and look at the md 80s in focus, those older airplanes average age of at least 22 years, and we have not heard any response from allegiant today. look at shares of allegiant, compared with the airline indpeinindex, it's lagged overall.

what's the expression? never a good day if you're a business owner and 60 minutes knocks on your door, it's not a good day sunday when allegiant is in focus on "60 minutes." >> we'll watch that. they are all over in cincinnati, a big time expansion >> they have good ice cream there, right >> in cincinnati, yes. as i like to remind you all the time other sectors that were movers today in the s&p 500 energy leads for the day and for the week, it looks like, and financials lagged big time today, and that's the question i guess how is sets up for next week we're not done with bank earnings >> no, we're not bank of america kicks off, of course, on monday, tuesday, and wednesday will be goldman sachs and morgan stanley bank of america you say will be in a similar camp to the jpmorgan and citi. interesting one is morgan stanley and goldman sachs. within trading, mike, it was very much the equities more tilted towards that, and goldman

tilted towards fixed income. >> right >> easier comps than the others because they struggled there last year. >> there is often during a reporting season a b littlittleo the dynamic. it's not a zero-sum game, but it's not necessarily trade a great trading quarter for a firm was not for another. >> absolutely right. >> that's based on positioning >> more than that, investment banking, itself, m&a, you know, raising equity, raising debt was soft for citi and jpmorgan, and in that area it's because one of the others really performed and took all the market. >> a big deal closed, things like that. >> of course; the trading front, rightly say on the right and wrong side of trade. >> earnings coming out next week, mike, watching procter & gamble, the second worst performer on the dow for the year only worse is ge hard fought board fight.

>> that's right. it's been quiet. >> they had the first meeting in april, and this company has seen weakening category trends. you know, despite a better u.s. and global economy and the question is how procter & gamble, a giant of the industry, can fight back, and they have posted better results in recent quarters >> right interesting because personal care as a category, look at estee lauder, they outperform broader consumer staples i know it's just a piece of procter & gamble. >> activist space broadly, throughing that in the cross hairs. >> rebuffing that offer. it's a slow growth >> right >> the companies have got so big, a lot of costs that come out, and a lot of mergers and ag sessions, and, you know, they are lagging in terms of growth >> big week for earnings, no doubt. now time for a cnbc news update >> here's what's happening right now. bill cosby's chief accuser says she wants justice in the entertainer's sexual assault

trial. andrea confronted cosby in court maintaining her story telling the jury cosby drugged and assaulted her at his suburban home in 2004 and said she was given three bill blues thousands of palestinians gathered in israel and the gaza strip to protest its closing one man was killed by israeli fire this is the third mass rally in the last two weeks ivanka trump launched a new u.s. initiative to provide latina-american women with job opportunities at the peru summit of the americas and said the initiative is needed to close gender credit gap. will rests after a car accident in california thursday night he and three were riding in an suv that overturned being sideswiped by another car. will was treated and released to a nearby hospital for unspecified injuries that's the news update back to you. >> thank you netflix shares have been streaming higher all year. up next, the it's money traders

say whether they are tuning into the stock. there's a lot there. ahead of monday's earnings high-tech states do everything they can to help citizens make up for all the deductions they just lost under president trump's tax cuts details on "closing bell." tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant.

sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

how did we finish the day on wall street, the low of the day, close to 1%, s&p and nasdaq outperforming only just for the nasdaq, s&p down 0.3%, russell down, and up 2%. >> better. back to the other big stories today in a rapid recap >> s&p looks to go positive for the year at the opening bell futures up stocks up around a three-week high >> i don't know why the s&p doesn't finish the year up double digits. you can see 3,000. >> jpmorgan, citi, and wells fargo lower this morning despite beating on earnings today. a recent tendency to sell into the earnings news on bank stocks i don't think anybody should be that concerned about it. >> president trump tweeted he may be willing to do a big about face on trade. >> the tactic that the president's used all the

threats, it's been a dangerous thing. we have an interdependent world. the world depends on trade the u.s. depends on trade. >> trading off to agood start, but stocks fading. dow was up more than 160 at the high before dipping into negative territory >> dow closing lower, s&p 500 off the day's lows, finishing lower by a third of 1%, and nasdaq off by half a percent, and same with the russell index, small caps, higher week overall for stocks, 2% higher, ending on a weak note. and with that, netflix up almost up a percent after analysts at wells fargo hiked the price target up from 285 the bank conducted a survey showing half of the users that they surveyed, about 500 of them, would pay more for the service. >> the company reports earnings monday after the close let's bring in fast money traders tim and david for more gentlemen -- >> hello >> good evening. >> evening >> talking to your take --

>> jeans >> on the note in particular, it's like a data-driven modern tech company, but just with none of the issues and baggage that facebook carries >> right it's certainly on the regulatory side and data privacy side they apparently are not under the same microscope. in fact, in terms of the competitive landscape, that's really the place where you go after netflix, a place i'm critical and frankly, i've been wrong. look at the valuation and multiple on the stock, it's not only outperforming and able to trade at over 200 times and ten times sales, but the fact of the matter is in a market pullback, i argue stocks like this are very vulnerable, and, frankly, i know i pulled back 15% in a couple months before rallying back, but think about the move it's on, over 60% this week. i just worry when big cissues happen, and deutsche bank did the same thing i think expectations are too

high >> expectations are high i think for the right reasons. they have done a masterful job growing the business, especially on the international side. hastings got the game down cold. when it comes down to the expectation game on sub growth, he's mastered it from the standpoint of giving street proper guidance, if you will, conservative guidance, and beating it handedly, and i think the quarter -- >> you are bullish >> bullish on the stock. i have been, stampbd bip the bull call. i think earnings are going to show again begins, internationally and domestically base on partnerships established and original content, all about that, invested in it, incredible franchise. >> three years of negative - >> anybody heard wilfred's frank underwood impression >> i want to hear it >> thanks. >> please. >> i have not done this for a long time. we need another question i have to think about it >> he'll prepare >> mike? >> one point of action, not letting you off the hook >> it's really good.

>> interesting in the report was the demographics we all assume, of course, this is a survey of 500 people, not all the users, but assume netflix is for young consumers of content, but 61% are 30-44 and 20% are 45-60. >> that's right. >> offset it >> people spend a lot of time in front of the television, typical typically. it's encouraging. the calculus is ultimately what's global subscriber base? half a billion people are saying it's half a billion is when all the sudden you have magical scale and this looks like a profitable business also, how -- what's the value of netflix's hedge start in creating this model, generating all the content, spending a fortune on it, and now that everybody else kind of has learned the rules of the game. >> the bullish call, tim, from wells fargo at the top is pricing power. >> right >> that, you know, it's not always been a successful strategy for raising prices, but do so because of all the money

they've spent on the very quality programs >> right the argument is it goes up for the guys in a time others feel the pinch. you know, i think the jury's out on that, and the minute you crank up -- again, this report tells you the demographics say you can go higher on a premium product, the whole thing is -- you tell me amazon prime, which cuts the price out from under the guys won't be an offering with scale absolutely right on the scale and first mover. that's the big deal. the guys following to people following them if anything, though, you know, there's one to take over premium in the stock, now if anything, they are the guys taking over. no one's caught by surprise by netflix including the stock market and analyst community great job reid hastings, but how much do you want to chase a stock up 65% this year >> nice outfits, guys, thank you. >> casual friday >> thank you >> thank you of course, be sure to catch all "fast money" beginning at 5:00 p.m. eastern. >> up next, tracking the opiod

trade from the dark web to the post office. right back

what are the ingredients of a life well lived? is it the places you go? the things you own? or the people that fill it with meaning? for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions. protecting what's most important to you. that's the power of pacific. ask a financial advisor about pacific life.

dealers use bitcoin to funnel deadly drugs from the u.s. overseas. we have an in-depth look at it, ylan. >> authorities believe they are using it to buy drugs like fentanyl from china driving the spike in fatal overdoses

ohio is ground zero of the opioid epidemic, and dpfentanyli the leading cause. he overdosed on heroin laced with fetal five times before ending up here, the treatment center in columbus he checked in nine days ago, and it's the longest he's been sober in years >> how many times did you shoot up in one day? >> could be 30, 50, it doesn't matter >> 30 to 50 times in a day >> definitely. >> reporter: got a fix from a local drug house, end of the line of a supply chain killing an average of 45 people a week in ohio, a seller's market >> ask the dealers where the dope is killing people you seek that. >> you want the dope that's killing people >> basically >> reporter: help is trickling in from washington, $6 billion over the next two years. ohio senator portman is worried it's not enough. his office is looking into the

link between fentanyl and digital currency, and says congress needs to wake up. >> we were able to access six websites getting information on 300 individuals, and in every single case, they said, use bitcoin. >> to pay for the drugs? >> to pay. >> should more be done to oversee these currencies >> the regulators are looking at it, obviously, but all i can tell you is because it's anonymous, it's the currency of choice for the drug traffickers. >> now, there is a bipartisan bill from senators grassley and feinstein forcing digital currencies to comply with money laundering regulations the justice department created a task force to focus on use of crypto-currencies on the dark web to buy fentanyl, but the death rates continue to rise so far. we follow the entire fentanyl supply chain from china right to your front door. >> is there a since of what portion of this market is driven by crypto-currencies and other

means of payment and how quickly that's risen >> so what the average industry will say is that less than 1% of bitcoin is actually used in any type of illicit activity however, look at the dark web, the majority of transactions that occur are being done with bitcoin or other types of crypto currencies, so, you know, it is one form of payment, but it is one that they believe allows dealers to shield their identity in a way making it hard for law enforcement to do their job. >> yes the appeal it's anonymous, obviously, for bitcoin, and the question centers around regulation will they look at it when you got the opioid crisis, it turns the spotlight on bitcoin in a much broader way than just buying opioids >> authorities take down websites like silk road and

alpha bay in 2017 and in 2013, but because so many people are dying from this now, that's why they are looking at this with a new lens now >> ylan, thank you very much >> thank you some states are working on loopholes to offset trump's tax reforms already. a look at strategies next. on "fast money," big banks reporting earnings today, but trouble in the crthas for one bank in particular what that is. >> don't go anywhere infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio and add potential income. bring amlp into the game. before investing, consider the fund's investment objectives, risks, charges, and expenses. read the prospectus carefully at alpsfunds.com/amlp show of hands. let's get started. who wants customizable options chains?

ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online.

joins us now with how some high tax states are trying to give taxpayers a break. this is a big deal when salt

went into effect >> and it doesn't a play plopplt you do for last year's tax, but it certainly a voids nevoids ne. the stakes are high, more than $36 billion in federal revenues this year at stake at issue, of course, is the federal tax stage that limits state and local taxes to $10,000. as part of the its budget, payroll started a new charitable benefit that would allow california to write off some of their taxes. and new york basically pays their income tax for you, they get the deduction because they still can, but the employee's gross pay is less. they have also created new

charities to accept taxes. taxpayers could then deduct those charitable donations, get the deduction and they get state tax credits in addition to that. new york, new jersey and connecticut also suing the federal government saying those limits are unconstitutional. meanwhile, secretary mnuchin says -- he, of course, oversees the irs. he says all of these estimates are ridiculous, they're illegal and states should focus instead on cutting their budgets the state budget would be cut in half under the law, but if the irs challenges this or they lose in court, the irs would collect $36 billion less this year and $90 billion less than 20204, so you know they're going to fight it with that much at stake i've talked to accountants and i said, what are you going to advise your clients to do? they said until we get some

official guidance from the irs, we can't tell them anything. of course, they're still focused on payments for 2017 >> the treasury secretary would say, these measures are ridiculo ridiculous where do you draw the line there are some contortions that they go through. >> to get a charitable deduction, you're not allowed to get something of value in return that's a principle of tax law and that's what they will say, you are getting essentially a tax credit in exchange for a chartabit charitable deduction >> what about that postcard we saw a year or so ago is it more simple than it was a year ago >> we have 40 million americans who itemize, they use more than a postcard, so it will be simpler for some but gaining the system with new loopholes on pass-through income, this stuff for the wealthy and those who

can afford tax advice, the accountants are having a field day. >> think yourselves lucky, guys. i get taxes back as well thank you very much for that it was a vatolile day for the markets. we look into next week's earnings after the break need a change of scenery?

the kayak explore tool shows you the places you can fly on your budget. so you can be confident you're getting the most bang for your buck. alo-ha. kayak. search one and done. don't juggle your home life and work life without it. ♪ ♪ don't skip that office meeting for a board meeting without it. don't keep it real... keep it going... or simply keep it in the family without it. and don't turn that business trip, into an overdue family trip without it. ♪ ♪ the more you live between life and business, the more you need someone at your back. the powerful backing of american express. don't live life without it. anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest. holiday inn express,

of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

well, we ended an up week for the markets on a downbeat note, that half a percent decline for the dow. the nasdaq finishing at half a percent up bitcoin had its year i know a lot of people think it's risktaking. we looked at junk bonds which is probably better, but still something going on here. >> people also thought it was very much pressured because people had to sell ahead of taxes. but also, are any people wanting to move money? oligarchs, perhaps, around the world? you had all of this happen as soon as bitcoin started going around >> i'll touch on the banks which as we know outperformed with

those numbers but underperformed with the share price goldman sachs in their oral report hasn't performed as significantly this last year it's up 14 parties but it's not up 25, 30 parties % or so, and g question for them is can they now survive in this volatile environment. if they did, it would be somewhat of an indictment on the management if they can't perform on the trading performance when t -- in the overall market. >> that's one of the matches you're going to look at for goldman, and i guess are we going to get color on this one >> we'll be looking into the earnings calls and any other questions we can post would be fascinating. >> another one very quickly is ibm we're watching into next week >> it's always a show-me type story, right there was an interesting rally

in old tech we had last year, cisco, intel, ibm not really a part of it we'll see if that can turn >> up 2% for the s&p thank you so much, sir a pleasure to have i here. >> always a pleasure to be united with you. that does it for "the closing bell" this week. "fast money" starts right now. >> i'm melissa lear. tonight the bitcoin bulls are back in town as it goes toward $8,000 is it headed to the highest of highs? plus, shares of netflix rally at 8% this week. that's nothing about what traders will see on monday first we start with the market selloff. stocks sinking today, the dow down 120 points. earning season kicks off wit