conflict on the rise in europe by extension around the world, and thinks we have not done enough thinking about it, and so do a lot of people including an author with a new book out next week addressing this among other things >> important issues. >> yep, certainly. >> "closing bell" starts right now. hi, everybody, welcome to the "closing bell," live at the new york stock exchange, i'm kelly evans. >> i'm wilfred frost the dow is swinging more than 200 points during the day's session, down half a percent for the dow. the nasdaq's down almost 1%. >> real big swings are treasury yields pressuring the market, and look at the rates. we're talking about the highest levels in years for the two-year and five-year today, and look at the difference between what you get for holding a two-year treasury bond versus a 30-year

half a percentage point. >> extraordinary >> 2.9%, key fofocus as well to. first, to bob pisani with the impact on the market >> higher rates are impacting interest rate sensitive groups like banks as well as commodity sensitive stocks, and you might think are not, but they are affected first financials, remember, jpmorgan reported on friday, and generally down since then, most banks trading up, and jpmorgan and regional banks up 1% commodity prices are rising, a major problem for a lot of groups lumber prices are at new highs today, and lumber prices are higher, interest rates higher, and you think that's a problem for a home builder look at some of the home building stocks today. kb home down over 6% also, there are aluminum prices sitting near new highs moving up dramatically this movant helping

the big, of course, commodity plays and aluminum companies aluminum corporation from china here, understandably from china, up 5%, moving up area for the last two, three weeks and then we have the energy stocks. overall, we talk about oil at four-year highs. exxon-mobil up 6% for the month. this is one of the big winnerings the bighope for the market has been earnings are so powerful that we are now making a run towards new historic highs only 1% from the russell 2,000 from the historic highs and 5% from the s&p 500 the question is, can we make it? the reason the rate hike story is a big thing, that's the number one killer of the markets. fed raises rates aggressively and get movers up elsewhere, it's a problem and that's why people are rather concerned and talking about this as the fed is sounding more hawkish in the last couple weeks. guys, back to you.

>> bob, thank you very much for that for more on the impact of the rising rates on the economy, itself, we have steve leisman. >> thanks. a couple risks presented by higher rates first, they think the economy more than fed thinks is warranted making loans for expensive, and secondly, the financial system is leveraged to low rates, a sharp rise could create potential risk. another concern, the compressing yield curve, sharper rise in short rates compared to longer rates, but the fed vice chairman said he did not see a recession signal at current levels >> if you have an inverted yield curve for an extended period of time, right, then that, in itself, could have effects on the financial sector that, you know, that could then lead to sort of a lack of support for real economic activity, but i am not viewing the current flattening of the curve as a particular signal towards impending recession. >> markets firmly believe in two

more rate hikes this year from the fed with a bid on the third hike the probability of a june hike at 88%, and september, 3%, but just 30%, high for that contract, but, still not above 50% level. bond yields growth, up because of the rising deficits and need for treasury to place more paper, guys, and, tomorrow, a chance to talk about these issues with kashkari, at 2:15 p.m., kelly. >> i can't get over moves in the bank stocks today. american express up 7%, bank of new york up 5% key bank up 4% i mean, dramatic moves >> you know, i -- the banking stocks have tried to rally on higher rates for a very long time i think it's interesting they are rallying on -- and hasn't worked -- now all the sudden -- what i want to point out, guys is, that, yes, it's something

worth noting these levels are high right now, but they still seem to be at the top of the range hit earlier this year, i guess, back in january then they retreated from the level. i think we have to go through, say, the 3% level to know that this is a definitive move higher, not just flirting with the interest rates we've been in >> steve, thank you very much. >> pleasure. >> for that. that as well as on the banks it's because yields slipped so much coming into that. it's almost like, oh, we don't have to fear that that - >> relief. >> exactly >> that negative yield story, but a lot is in the short term, although the yield curve is flat, they make money when rising short term yields, but the long term they don't want flat yields. >> that's true love specific themes in the market today another one, look what's happening in the semiconductor index, down 5%, and we have the nasdaqs -- apple suppliers, i should say, incredibly weak today. lam research, 6% decline after

the taiwan semiconductor, itself, down 6% in terms of full year revenue estimates on weaker smart phone demand, apple down 2.5%, weighing on the dow now, logic and xp hit hard. josh lipton, explain this. what's going on here, josh >> reporter: kelly, taiwan semiconductor reported results, and investors, as you mentioned, not happy. the company offered a second quarter sales forecast that did did miss analysts' estimates on the call, executives talked about weakness from a, quote, very high end smart phone. they never did mention apple by name on the call specifically, but the team at morgan stanley pins that forecast miss in part on older cuts from the iphone10 processor. they don't account for 20% for the revenue, and apple is under pressure today as are its suppliers. check out names like skyworks, broadcom and serious lodging what's it mean for apple investors?

bottom line, rbc says softer iphone10 data points should not be surprising at this point, in his opinion, in saying that muted iphone units are now well understood by the streets, still, telling me he is bullish on apple, coining a strong free cash flow, outside capital allocation and a bet that gross margins move higher from here. apple, remember, reports earnings on may 1st, and analysts are expected iphone units up 53 million, a gain of 4% year over year. back to you. >> josh, thank you very much for that apple's growth is a different story, and amazon's growth lifted on the most closely guarded secrets. how many people subscribe to amazon prime, and cnbc has more on the numbers for us, dee >> reporter: that's right, 13 years post prime, we have a number that is 100 million prime s

subscribers globally paying not just the annual $99 fee, but told pulled into the ecosystem of amazon. the number of prime members are lower than netflix, but higher than subscribers of other services like spotify and hulu more than the others as well once you're in the amazon prime system, the company can upsell other services like fresh grocery delivery and music unlimited, collecting data and sell you more stuff. this is a long awaited number and plenty of questions around the prime program and contribution to the bottom line. while sub skriepscriptions have, so have the perks as besos spends on businesses to bring to prime customers. there's a subscription services company that brought in $3.2 billion last quarter growing at 50% over the last yearment it's unclear how much of that subscription fee plus extra

spending by prime members offset costs, but he's never shy to forego profit for what he calls unrelenting customer obsession guys >> exact ly it's line one. the first thing he talks about, and recent satisfaction survey, and, by the way, there's a subtle regulatory point in there, which is to say, yes, everybody in washington seems to be obsessed with anti-competitive behavior here, but we put the customer first, and the customer likes it right now. >> dei - >> absolutely. >> sorry, you go >> go ahead. i was just going to say on that point too, regulations and politics, he, at the start of the letter, close to the top, talking about how many jobs amazon has created, over the past year, so, yes, milestones, but starts the letter with how much amazon is contributing. >> yes see, and those set of numbers in terms of comparing sub numbers to the like of netflix and, you know, music subscription services, how much do we get an inclination how much amazon video plays into the amazon prime subscription numbers

versus free delivery of packages or no comments on that yet >> well, that's the thing. they don't break out a whole lot. this was a big figure although they get numbers on a regular basis from other streaming companies, this is a first time that amazon has gone beyond saying just tens of millions of prime subscribers, and, wilf, an important point, you get an ecosystem, so for $99 a year, you're getting not just two-day free shipping, but you're getting access to a growing library of digital content including original video content, music, things like this, so that was the point, the costs likely a lot higher than what amazon is offering, and they are making less than what netflix would be making just offering you content, although, we don't have numbers or know how much amazon spends on original content >> okay great stuff

50 minutes before the close, dow is.4%, and we have improved fractionally >> the closing bell is just getting started. straight ahead, new leadership at one of the country's biggest name private equity funds, plus, the regional banks versus the big guys. and what jeff just said about writing a better, more efficient office memo. the "closing bell" with kelly evans is back in two minutes live from the new york city stock exchange hi! i'm mike ditka. you know you don't get to be a hall of fame player without taking a few shots. even though i have been out of the game for a while.

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welcome back to "closing bell," everybody, i'm kelly evans, dow down 115 pointings now with the worst performer at the nasdaq talking about apple being weak, but look at components in the dow which are dragging us lower, pg is lower, and we have results, intel down less than 3%, apple down 2.6%, and dow dupont down 2.6% switching stories, lining up the investment banking world, former jpmorgan executive, seen as a possible candidate to replace dimon long term and

possibly to join deutsche bank has a new job as president of capital management, and leslie picker has more. >> that's right, it's part of restructuring or reconfiguration. the $30 million firm presented bruno to president from co-ceo what's truly making more than wall street today is cerberus in general. was anyone else considered for the role what happens if zames opens his own business as for succession, i'm told by a person familiar, fineberg is not going anywhere any time soon and spearheading financial services investments, namely banks in germany like deutsche bank, which they just recently purchased. zames focuses on risk management technology and regulatory issues, the coo roles he had in

the past as for other candidates, sounds like there were not any. they were not in serious discussions for others in the specific role of president, i'm told last summer, he told "new york times" he wanted to start his own business, but now he's spendsi spending since them at mit guys >> leslie, fascinating aspects to the story one is the deutsche bank one, which, of course, seeing a new ceo put in place recently. i remember during that time, always more than the name that some of the foreign shareholders may have wanted, like h and cerberus going back to your main point there, when he left jpmorgan, he was thought of having or wanting to be ceo of jpmorgan.

>> right he was not ceo of mit, and, obviously, cerberus has an engraining of it, and he's not going anywhere this was a move to posture his way into the role in the future, and maybe down the road, he's not old, he's under 50 years old, but it's not to mean we can necessarily see in the immediate, as i think a lot of people were expecting from him >>. >> did he get too imparntient? >> he became coo in 201 2, a hug jump up for him, partly took the role, i think, as dimon at the time, sorting this out, and -- >> bailout in the crisis >> did a lot of that stuff, but i think that if you look at the power structure at jpmorgan, being coo under dimon was exciting to begin with, but the individual business heads had the power rather than deputy to dimon, whether that daniel, head

of the investment bank or gordon smith head of the retail bank, five years, how many years in the role, he had not really progressed, and there was a standoff or discussion and decided to move on i think probably was considered for big coo roles, but whether or not this was his top choice, we don't know, but where he settled. >> thank you leslie picker there. participating in a bank rally today. 42 minutes before the close, and the dow's down half a percent, and nasdaq is the lagger of the big indexes, down 0.8% coming up, shares of bbc rally after the profits, nearly doubling from a year before. we speak exclusively with the ceo about what's behind the strong quarter being up 3% today. a newspaper industry facing a new challenge, and it has nothing to do with readership. we'll explain still to come on the closing bell why are you s? had a coach in high school. really helped me up my game.

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no one thought much of itm at all.l people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here.

welcome back to the "closing bell," the heat map for you there, see two sectors higher, only one meaningfully higher, financials, the rising rates today, been starved of it in recent weeks consumer staples suffering because of amazon news, and real estate is down as well, and technology is down, also higher by the nasdaq. >> speaking of amazon, today's closing bell quote of the day is

curtesy of jeff bezos writes in the annual letter, quote, we don't do power point or any other slide oriented presentations in amazon and said, they write narratively structured six-page memos. what i love, by the way, of course, if you have not read it already, it's a must-read, just to get inside the mind of this guy, and we'll talk to, already, about different deponents of it. it's not piling on power point, but he makes them write a memo -- >> for a tech company. >> exactly it's not authored or say i wrote it or you wrote it, but it's from a team. not everybody on the team has to craft this, but he said people realize quickly you can't bang this out in a hour or two, but days of input and refining to get in it, and ones good stand apart from those who are not >> fascinating for tech companies writing it down, verbal interaction, but, also, really interesting from his letter, trying to talk the

dimon, niche pageants, about not liking too many meetings >> it's important how you run the business >> it is thinking about headlines and decisionings, but guys who manage companies worth half a trillion dollars are talking about the nitty-gritty, and, of course, he referenced a microsoft product. >> use word to write your memo >> i picture handwritten memos too far with that? >> i'd be surprised. i'd be surprised >> i'm sure amazon employees tell us if they are handwritten. >> anyway, worth reading that letter >> 35 minutes to go into the close, and by the way, half a million people employed, another one to be reminded about >> exactly >> dow down half a percent now, and so we're down 125 for the blue chip. home building stocks with a sharp drop, higher rates, lumber

prices, and weak earnings. we speak with the executive chairman about the ways tariffs are impacting that business. up next, bank earnings largely beat wall street expectations, so why is the index underperforming the market over the past week, not today, but it has over the past week. breaking down the money mystery. presenting the all-new lexus ls 500 and ls 500h. experience amazing, at your lexus dealer. 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.

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welcome back to the closing bell as we look at broader markets with declines today, following a couple of back-to-back gains, a check of the leaders in the s&p 500 not often you see american express leading the way, up more than 7% today after earnings yesterday. plus, rates moving higher, bolstering a lot of the banks, including bny melon, up 5% time for a cnbc news update with sue herera. >> hello, everyone this is what's happening at this time a special day for tammy duckworth bringing her newborn baby girl to capitol hill to work in a little senate vote as well earlier, she was the first senator to give birth while in office, and the arrival prompted the senate to change rules, allowing for children to be on the floor.

>> it's amazing, i thank all my colleagues, thank you. >> a cannabis-based drug meant to treat childhood epilepsy is a step closer to full approval today, an fda panel unanimously voted in favor of the drug finding benefits outweighed any risks. and who among us doesn't need some help assembling ikea furniture. look at this, thanks to researchers in singapore, a robot may be doing the job for you after giving ordered instructions, the bot put together the chair where was he when i furnished my first apartment? >> hallelujah. >> right >> you should be able to rent this >> absolutely. >> help put it together. >> and you wouldn't end up with that one extra piece that is supposed to go somewhere, but you don't know where >> until it collapses. >> until it collapses. exactly. >> 18 months later

>> ikea is the most stressful shops. >> it really is. >> but unbelievably cheap. >> you can't pronounce anything either >> yeah. well, i agree. i say, can i have a look at the -- couch swallow and cough while i ask for it and hope they know what i'm talking about. thank you so much. >> see you next hour, guys banks rallying today, bbc among them, and higher by 5%, and the company also signed in lower expenses for the record quarter. >> joining us now, an exclusive interview with the ceo good afternoon to you. >> good afternoon. glad to be with you. >> very nice set of results. congratulations on that, and the share price, clearly, performing off the back of it partly, though, as well, performing today because of the yield curve picture. can you just talk to us about your expectations of where that

interest rate link -- interest income, performing for the rest laft ye of the year, but disappointed a little bit this quarter? >> yeah. so i think that's right. you know, the concern is with the short end rising, you know, fairly precipitously, and the curve flattening to, you know, similar levels to, you know, pre-crisis, there's some concern that this may be portending, you know, slower times or some say recession, as it has in fairness, and many times in the past, so i think that's dampening bank share prices, taking a little bit of the luster away from stellar bank earnings in the industry as a whole. i think it's mostly about signaling if the market is ready to explode everybody's looking past already, as they really should, the dramatic increase in everybody's earnings because of

the tax changes, and trying to look through at the underlying real core earnings increases and thinking about what's happening to the economy going forward >> and what about loan growth? with the -- particularly, the culture on quarter numbers for loan growth, i guess people expected tax reform to lead to a lot more activity amongst your consumer and corporate clients, and that's not really been delivered yet either do you think it will pick up as tax reform takes effect later in the year >> oh, absolutely, i do. i think it was a little unre unrealistic to expect tax change at the end of the year to have much of an effect on the market by the end of the first quarter, so, look, clearly, people are very optimistic about it, and i visited ten of the 24 regions in the last few weeks, talking to a lot of business people, a lot of the client and managers optimism at an all-time high, and plans

are being developed. the pipeline is at an all-time high going up every month. it just takes longer than people think. nobody thought the tax would pass until the day it passed, and so - >> yeah. >> so i think by the time we get to, you know, late summer, fall, you'll begin to see substantial increase then, and that activity, purchases, and stock purchase, so it will happen, just a little lower than -- and later than people think. >> kelly, is the pickup happening into mid-term elections that could put democrats in control of correct me if i'm wrong and perhaps unwind -- i don't know about the tax bill, but the deregulatory gains experienced? >> well, i would take a different view, kelly. i think, if what i just said happens, if the economy picks up in the summer and fall, the republicans will take full advantage of that, full credit for that, that might actually bolster chances to hold house and senate each side will take advantage of

it, but, actually, should probably benefit the republicans more than the democrats. >> kelly, can we talk about your number of branchs. in the call, your cfo expects to close 80 branchs inq2 and 150 over the course of the year. i spoke to lloyd blankfein, branchless, and, today, jpmorgan is confirming its expansion, 70 new branchs in the greater washington area, so there's a clear dichotomy there about whether consumer banking needs branchs or not, what's your position on that >> well, my position is that both are right you do have to invest substantially in the strategy and branch of the future, if you will, but what jp understands, exactly our view, it's a combination of a really robust

digital platform along with an appropriate number of branchs. 70 branchs for jp in the greater washington area sounds like a lot, but it's really not a lot it's more in keeping with the new strategy of relatively few, appropriately placed branchs because here's what's hatching the transaction for consumers is moving from adequate to the digital platform, non-branch dependent, but at the same time, the consumer, including millennials, xors, and y'ers are branch dependent when there's a problem, a complex problem they want to engage in discussion about, so the truth is, you need both. this is not just jp saying we want to go to d.c. and they need an appropriate number of branchs. >> kelly, thank you very much for joining us today great to have you with us as always kelly king of bbt and shares of bbt up nicely today following those results. now, banks having their best day as we mentioned throughout the

show, and in about a week, the kb is up almost 2% joining us now is david ellison from hennessey funds to discuss the trade a little bit more. david, talk us through your take on the last week, whether it's earnings related or yield related, and what are the main factors, and shares outdone by that >> well,i think the earnings have been fine, and that's, you know, i think that's pretty much been across the board. most sanctions doing quite well, a product of the good economy, you know, some regulatory moves, but class by, it's a good economy. i look at that as actually a sign that the economy's healthy. you know, people are not having to borrow as much to make the economy work, so, again, the last time we had a highly levered economy, we had a problem, so we don't have that now really >> just on that front before we move on, barclays this morning, lowered gdp forecast from first quarter to 1.5% from 2.5%. maybe the first quarter's weak

maybe like everyone said, low demand is weak and will pick up, but why do you have such confidence the economy is strong do we simply -- feels like we had the labor market to look at. not that strong if the economy isn't, right >> well, i think, you know, jobs are the life blood of a lot of things i think, you know, i'm not that concerned about the loan demand. i think that that will come, but remember, they are making loans under an environment where they try to make very good loans, which is why credit quality is good as a bank investor, i like that. i don't want people to be stretching making loans that have problems, two, three years down the road. we had that. that did not work out so well, so i'm okay with an economy that's lending appropriately, that is leveraging appropriately, and i think we're getting that now, but i think that the problem is really on the liability side, and that's where the concerns are, meaning that if you look at historically at typical banks with a cost of funds around the 6 is, and

that's historically been the range, and most banks now have across the funds of 1%, and the six month t-bill today is at 2%, so costs go up on liability side not offset by a rise in the loan yields, so if it goes up 1%, what happens to loans and credit quality? so i think that's the concern is that because the short end moves up, and the cost of funds that banks are roughly 100 basis points lower than they will be at some point in the future, and that's a big increase. >> david, clearly, that's a big concern for the retail banks, the money secenters bankeds, but is that an opportunity in the relative sense for the names like goldman sachs and morgan stanley? >> well, assuming that the markets stay hoopen they benefit from an open wall

street in a metaphor call sense, and if wall street is open, they can do deals and borrow money. volatility, you got a good business right now so i think that's probably going to stay there. rates going up, i think, good for wall street, and it gives them more room to play with in terms of the difference between the, you know, the yield and 0, so that's good i also think that a rise in rates is actually good for the economy since it makes the economy stronger, if you've got the retiree in florida with a million dollars in the bank, you know, two years ago, they made $1,000, and now they are making $15,000 a year >> wow >> so that's free money that's going to be spent. that $15,000 probably goes to $20,000 because you get banks to give 2% now, so the point -- just -- you know, going from a 0 -- from 1,000 to $20,000 in three years, that's a lot of additional income that's basically free money for people to spend or invest >> david, thank you so much for joining us today much appreciated

david ellison from hennessey funds. kelly, we have headlines here from dow jones. citing sources that matel's ceo may be in talks to leave the company. now, it does not say exactly why in the report or what else is going on here, but we do know, of course, that mattel has been struggling, shares under her are down about 50% in the year she's been there, and she came to mattel from google, previously, and you can see that shares are moving a little lower on the news right now, down more than 1% back over to you >> courtney, this is really surprising >> yeah. >> as you said, came from google, a much valley higher, and they have benefitted a little, i mean, in a year they feel like it's not enough time is she frustrated? i don't know >> going through the restructuring now, they are working through sort of the taking everything that this business does, looking at

everything on the table, and trying to make smart evaluations going forward, also noting other changes within the industry. we know, of course, toys "r" us is liquidating as well, hurting a big toy maker like mattel, but this cites sources no detail as to why she may be in talks to leave the company, and mattel reports late next week perhaps more information or at least address this report at that time as they have not yet >> wow >> thank you very much for that. much valley higher - >> english expression? >> never heard it before >> kellyism. looking at shares of hasbro, by the way, down 12%. there's been divergence, but this was a big deal move for them to try to - >> uh-huh. >> shore up the business we know is challenged and did not help that toys "r" us went bankrupt >> certainly didn't help any of them, but mattel down 1.5%

we have 20 minutes to go before the close. we are down half a percent for the dow, and s&p and nasdaq down more than that, and financials are the only sector outperforming today, but we have improved, in fact, into the close close, and coming up, much more on market moves and which stocks to watch into the close. later, one of the america's largest newspapers is slashing jobs, and the reason has nothing to do with ding transformation and more to do with president trump. that's still to come on the valley news "closing bell. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs.

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welcome back, we got about 15 to go before the close, recovering a little bit, now down.20 of 1% or 52 points on the dow, almost -- 11 stocks in the green now for the dow. >> there we go we have rob morgan, chief investment officer, and jeff killberg, and next to him, steven, the daily contributor at the street.com welcome to everybody starch, starting with you, coming back on the close, 15 minutes to go, and are rates the big story? >> rates the big story

yes. rates are a big story. the macro has been somewhat supportive of fed trajectory i don't know how good it is for us going forward if the ten-year, if inflation expectations reach a point where the ten-year tiptoes over 3%, we'll get in trouble get into the fangs - >> fangs >> no, defense defense. >> defense >> lockheed of sorts >> by the way, just only if it's inflation move over 3%, i mean, could we have better growth p s prospects to do the same without inflation? is that a better story >> you saw commodity prices and phillie fed index this morning, right? they are moving in the direction that the fed wanted it to move all along, so now all the sudden, do we want this? i don't know.ceo trader, maybe t >> it's been momentum to the downside recovering, you are

right. nearly $70 this morning, masking the anxiety in the equity market i think the answer is yes. >> what's the view on bond markets? i know from your notes you are underweight, so as yields rise, what level would you need to see this buyback into it >> well, again, before we jump into that, will, i wanted to add more to what sarge mentioned not just about rising rates, but flattening yield curve as well and what bbt ceo said moments ago. the spread between the 2 and 10-year is tightest it's been since 2007 so, that, that to me is a warning sign, and -- but i - yet at the same time - >> financials are higher >> yeah, that's because of that spread rally >> you're right. >> we wanted .8, i'll take .60, and holding financial equities -- >> go ahead, rob, sorry. >> go ahead. >> i got to tell you, you know,

even know everything i said there, probably indicates i have to underweight financials, i like them just from the standpoint of regulation and going to see more of a merger boom coming on, maybe "boom" too strong a word, but i like financials here. >> well, i think the biggest thing in the last five, zemseve minutes, they may not be a target anymore, and you saw the s&p 500 move a quick bit higher, resinating with that - how emotional -- rumors -- >> unconfirmed - >> but emotional pick, seeing emotion go up and down, as we know, stock goes up or down, baby >> that's the algorithm speaking there. no human involved in that. overshoot one side and the other side >> exploring that head lien while we are discussing it dom chu has more >> the reason why the markets are moving off of their worst levels of the session have gotten back around 70 points

just in the last, two moments or so, is on the heels of the bloomberg headline saying deputy attorney general rod rosenstein is reportedly not a target or told president trump he's not a part or target of the mueller investigation. now, the reason why we brought that to your attention is the markets did appear to at least move up or because of the headlines, but it's also important to thought here that earlier this month, the "washington post" reported on this that rod rosenstein said he's not a target of the move higher investigation, so, again, rema rehashing on the things reported by the washington post nonetheless, markets moved on it we'll dig in to see more, but for right now, that's the reason why, but, again, something to point out here that the "washington post" reported it back on april 3rd, about rod rosenstein and perhaps no

targeting by the mueller investigation. back to you. >> dom, thank you very much for that whether we are getting better news from geopolitical spheres or out of washington, coming into earnings seasons, we expect earnings to put all of that to bed anyway, and that's not really happened, has it? >> no, it's not necessarily happened i think looking down the road, will, i think, i mean, obviously this earnings season is expected to be great, and i think we're going to see even further down the road for the next several earnings seasons, i think, you know, it looks like a pretty good backdrop for strong equity market here. >> all right i cut you off. >> oh, sure, i mean, it's not just the earnings, but it's more dividends and buybacks, but you know what, last i spoke to you, what, two weeks ago, i felt bae bearish. do i sell the pops what i do in the name i like, i sell puts at prices on the chart where i like it. breaking in the premium. i might not -- i might get run

over i mean, but i'll get run over at a price i thought attractive at the time i did it. >> collect premiums. >> that's how i tackle this market >> all right thank you very much, talking us through the market this afternoon. nasdaq is down 50. phillip morris on track for the worst day in a decade. what's behind that stock drop next here on the "closing bell." hi! i'm mike ditka.

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reporting earnings, largely caused by a miss on revenue and slowing sales in japan where the electric cigarettes are seen as the demand wave is maturing now. >> positioned relatively well given head winds >> the company, of course, that philip morris borrows. >> american and british tobacco down as well blackstone added a $1 billion stock buyback program and incured a special dividend up.6%. this is all about the yield and dividend >> annual dividend yield >> about 8.5%. >> taking your word for it >> stock price is not just performed in the same way as, you know, various financial companies have, but the people that hold it do not mind and got money back in the dividends, including top shareholder. >> excellent point this a difficult niche part of the market, but for that reason,

guests said that's why they like private equity, not that blackstone is. >> people are confused on this if i want private equity, i invest in it, but the biggest question why you seed high yield is people questioned valuation generally. if the market is telling me this is the give play on that, and that's why people discounted the stock price a little bit, but if you believe in just holding them through the cye, yclou get a nice dividend yield out of it. all right. up next, we come back with the closing countdown. so i go national, where i can choose any available upgrade in the aisle - without starting any conversations- -or paying any upcharges. what can i say? control suits me. go national. go like a pro.

welcome back, about two and a half minutes before the close. we've improved in the last half hour, last hour or so, down 95 points on the dow, so about .4%, and nasdaq down at 7% or so, and quick look at intra-day chart, opening down, suddenly sold off the low of the the day at 1:00 p.m. lunchtime and improved approaching the close. the yield curve, short end of the curve, like of the twos at the highest levels for about nine years the longer end of the curve more like a month, 10 years for a month, but yields picked up today, and that improved the sentiment for the banks if we look at the sector performance, financials, the only sector that's meaningfully higher, energy flirted with being higher throughout the day as well, and likes of summer and tech near the bottom, as and i bring in bob pisani

i bring in the pound, a great country, and the post highs today. >> a shame >> it's down smart making comments about rate hikes. >> i'm going to london >> there we go >> a great country, by the way, have we said that? >> either way, it doesn't matter it's a great country >> got a lot of calls what happened in the last half hour the s&p, and, of course, headline out, the rosen rosenstn told president trump he's not a target of the probe, and it was out by the "washington post", and don't get in that so much, but there's traders who did not know that and don't know that. nc information is not on the street, and i want to point out commodities moved things today lumber prices at new highs, and interest rates moving up, and you see what happens to the home builders, down 5%? that's lumber and interest rates going up aluminum high, big move up in the producers today, and all the energy producers which have done

well this week, and oil producers remained generally in the green today. this was a big move in commod y commodities and the interest rate and inflation story >> consumer staples well near the bottom because of the amazon use. >> separate story there. >> unrelated to commodities or interest rates there goes the bell, down 86 points on the dow at the close, and ringing the bell here at the big board is american waterworks at the nasdaq, national geographic emmy golden globe nominated anthology series genius here's kelly evans with the second hour. ♪ >> thank you, and dow out with an 82 point decline, and meanwhile, the s&p down about 15, and russell down 9, and nasdaq, worst performer today, and it was about a third of a percent drop for the blue chip,

and nasdaq, meanwhile, down to 72.38, and talking individual moves there, but apple weighing on the dow and nasdaq, and apple supplier having a rough go of it this morning joining me on the panel to talk this, rates, and more, we have cnbc senior market commentator michael santolli, stephanie link, and brian is here as well in a nice jacket, and he's chief investment strategist, and welcome, one, and all, and the big winner in the dow is american express look at the gain, nearly 7% on the bell, and 7.5% there we brought you earnings yesterday, of course, and all the financials had a nice session today, intel down 2.5% over in the s&p, we have a big winner there, also, american express, actually, snap-on, 6% there for the s&p, and big loser, philip morris international down 15%, so, mike, we go out better than we were sort of looking tloupt t it

the session and whether trump is being investigated by mueller or not. meantime, rates move in a big way today, commanding all the market's attention does it deserve it >> look, shicfted the narrativea little bit, got people's attention again, and days after we've been, you know, spending a lot of time talking about how the yield curv compressed, what's it mean in growth, then inflation stories get revived. >> right >> when the market backs off half a percent in the four-week high, everything is operating in a relatively comfortable band if we are that close to worrying a little bit about inflation as opposed to a little about a yield curve rate, so it seems like it's all in the acceptable zone of something to watch, but not to be worried about just yet, so, to me, that's where we are. context matters to me. recovering for three, four weeks in the stock market, and you're back up to this area that is -- a little friction and

crossroads, and pull back half a percent. not that big of a deal >> steph, running down the big movers on the back, we show the rates, 2- and 5-year american express up 7% mellon up, and jp morgan helped the dow with a 2% gain there, and the flipside of that, the consumer staples had a terrible go of it today how does that leave you thinking >> well, first, i think the banks and financials sold off, and it was overdone. right? earlier this week. you had decent earnings in banks, maybe not exceptional, and i would say in the regionals, less than that, but if they fell off hard, and we were obsessed with the flat yield curve, and couldn't figure it out to save their lives, and rates go up explaining the financials story pick and choose financials some are good. on staples, not one good report today, not one, and if you listen to the philip morris

international conference call, that is a top story. >> talking more about earnings than interest rates there? >> staples, i do, yes, you had pg today, right, i mean, they had -- missed organic growth, and, i mean, less than 1%, still, philip morris - >> down 5.5%. >> downgrade talking procter & gamble for a second what did people expect don't we know these companies are challenged why isn't this the surprise to spook investors? >> people thought 2%, so when you come at 1%, with growth margin pressure, why do i want to pay 19 times forward equity >> they are not. they are not great or washed out. >> i think it's a broader issue in that the broader issue with respect to perspective, okay the default buy to be defensive -- and the marketme t wants to be defensive. >> what do you mean? >> quality punches the majority of people have a a

infatuation trying to call the end of the bull market >> yes, yeah >> the nay sayers have been as loud the last three months as they have been in the last ten years. same story, same song and dance to quote aerosmith, but from the perspective, the staples sector is challenged. for years now, talk about consumer cyclicals having a lot of capacity. guess what in the consumer staple part, a lot of the apacity, and the consistency of the earnings on a fundamental basis are no longer consistent you have a lot of different habits with respect to what we spend money in >> right >> for instance, apple is more of a consumer staple stock than general mills these days >> we've talked about this, and, by the way, creating a new sector to kind of get out from under this dynamic apple had a tough session, down 2.5% too so, you know, who knows what the deal is going to be ultimately with the iphonex sales or whatever there, but i know because you're bullish in general, what's it look like to keep growing leaving that part of the industry behind sm. >> - behind >> i say this, we had good, not

pretty good, but a good earnings period, banks have been better, especially those banks with scaleable business models, and still people are still chasing tech for momentum and performance so you have days like this. there's fundamental pressures on sectors. the yield proxies, utilities, reits, and telecom, we know people are hiding in there for decades, but staples, i think, is a fundamentally challenged area, aside from the staples retailing like costco and walmart, else costco, one of the best companies in the world from a secular basis. it comes down to stock picking within the staples we focus on the costco's of the world. >> today, you had a different leadership, right? you had financials >> energy. >> you had energy for the last month. now, does energy take some profits here in the short term maybe. i think i'm encouraged that you have oil going up, rates going up, and so you have the cyclical trade, and i think that's where you see the better earnings as well, so i think you want to be exposed on that side >> final side on the staples,

commodity prices going up, and tightness in expense categories, well, they can't pass that along. >> yeah. >> they take the hit >> not in this environment >> not in the environment. >> s&p up six out of the last eight trading sessions, only off 6% from the highest. bob? >> 6 out of the last eight days, and syria on the sidelines, china trade on the sidelines, people say maybe we hit the old highs, 5% on the s&p i point out, we are just 1, 1.5% away from the russell 2,000, something like that. that's darn close. there's issues there's a very big group out there saying we have a hard time punching through it, and so, obviously, the fed -- look what happened today talking about a fourth rate hike the two rally killers in history are recessions, not having that, and then the fed getting aggressive raising rates we saw what happened today, moving up, saw the tech on commodities in that, and other issues not emphasizing that so much

geopolitics. seasonably weak period there's a huge debate about whether we have slower global growth i don't know if you look what's going on in europe, but ea earningsings are not good there now. looking at numbers that are 1-2% growth for european equities for this groets. talking 20% in the united states that's huge. part of that is a little bit of a slowdown in economic growth, and part is the stronger euro and weaker dollar overall, but people are really trying to figure out whether we're actually seeing some kind of movement overall, so, kelly, i think right now, it'd be great if we consolidated a little, went sideways for a few days, earnings reports, and then try to figure out whether these numbers are so high that it's worth taking a shot at the new highs. back to you. >> thank you it is gratifiesiying to see ear are earnings driven.

that said, this is the same tune, when you go back to the tech suppliers today, with the t taiwan semis, you had names down 6%, 7%in back to concerns about apple, right >> it was surprising this was the day and news that triggered the selloff because we've known for a long time that apple iphones off the super cycle. it's an okay cycle not a super cycle. interesting. on the heels of lam research, they beat and raised by a mile the stock is up a tremendous amount over the last several years, and it's such a crowded trade. everybody wants semis. >> the results are not great, not terrible, and, today, oh, nevermind. >> you had commentary, maybe double ordering going on from taiwan semi, so the people are nervous. cyclical industry. are we at the peak of the cycle? and, yes, the stock and group are cheap, but what are you willing to pay for that, and visibility just isn't there. if you're going to be in tech, i

still think you want to own more of the secular growth names, and that's cloud, that is fang, and -- >> which -- you had tesla, amazon, google all up today. >> sure. >> 1-2%, not huge beggains, but intell was down 2% >> clearly, they are not able to grow businesses much there, so they pay out more dividends, a change there stephanie said, it's a crowded trade in tech. people have become way too reliant on the performance of the sectors so they got to be there, and biggest problem with the market we talked about upstairs, people don't understand the denominator and numerators are growing >> everybody we've had for weeks will tell you the denominator is growing. >> they don't get it, though they don't get it, michael they don't get it because it's about momentum >> maybe the market is not capitalizing it now, but everyone is in agreement that it's growing >> look at that, but no one's acting on it

doing one thing, saying another. >> right >> 20% earnings, 15% earnings, trading at 16 times, stocks trade cheaper than that, particularly, cyclicals. >> exactly, up 16% last year, market up 20%. >> okay. >> last year - >> i look back there, looking forward, i'm an investor, i look forward. >> just saying, earnings are going to be up more than prices for two years. >> probably true >> what if the economy shows better growth? seasonably, the first quarter over ten years is the slowest of the year what if, just what if fiscal policy helps us 2% >> probably will >> it's not necessarily expected >> and oil priced in by the way, barclays this morning downgraded first quarter gdp growth to 1.5% from 2.5. here we go again breaking news in mattel. >> it's now official, the ceo is out, stepping down, and the new

ceo will be ynon creiz he was the chairman of the board, now ceo of mattel effective on april 26th. looks like margo is taking another opportunity in the technology sector. she's going to stay on during the transition, but she was only there for about a year mr. kreiz was ceo at a global digital and media content company. that was fast, but mattel has a new ceo. shares, though, down in response, more than 3% back to you. >> wow, thank you. put up the chart of hasbro and mattel you see the pressure on the ceo. as she was from the tech world, came in, very difficult environment, you know, being in the toy business, especially with toys "r" us out of business, and mattel down 46% over a year, mike, and hasbro down 12% >> tells you that there's not an easy fix, and probably anybody who comes in there is not

necessarily going to have the anxiouses, so, you know, i don't know what the -- i don't know what it is on this one it's a tough period for a while. >> reports came out from dow jones before the close there might be -- she might be on the way out, and now, already, they are -- yeah, they have someone coming in to fatake over. do you own the names more consolidation >> probably is going to be more consolidation. i wonder if it opens the door for hasbro to buy them i don't know i'm not sure what you get. they have a lot of old line toys a lot -- they have really not kept up in the digital era to the extent hasbro has, actually, much better, so i don't know if they really want to, you know, combine with an old-school type of -- they have great brands, for sure, but i don't know if that's the direction they need to go into >> last word >> last word is this >> take it on the toy business or take it elsewhere >> no, listen, i still think that fundamentals are great, and i think that the problem with the market is still, just a failure to communicate kate, that we're investing again, and this is a brand new cycle, and

it usually takes a quarter or so, and we're four months into the year, still just trying to figure out the new regime. in 2018, it could be the transition into accepting the bull market where the first ten years of the bull were really doubting it, and it is terrible, and now we're accepting it >> walking us through this grief, denial, acceptance -- this is acceptance step? >> accepting it, big, real, nowhere near euphoria. >> thank you very much for talking markets. more is ahead on the "closing bell." coming up, head winds against housing, and how lumber and rising rates are hitting the home builders. a top industry executive is with us live. and how the trade battle is now hitting newspapers, and forcing layoffs in the industry. this is the "closing bell" live from the new york stock exchange with kelly evans we're back in two plins.

welcome back, shares of sketchers plummet after hours, and we have the reasons why. >> kelly, while earnings and

revenue beat street expectations, the guidance for the second quarter came in weaker than expected as earnings of 38-.43 a share, versus estimates of .54 they handedly beat expectations in the earnings statement. the company says we truly field 2017 was a banner year, but as you can see, shares are down more than 18% there in extended trade on that weak guidance number kelly? >> ouch. that's for sure. thank you. top trade officials from the u.s. and canada and mexico meeting in washington today. we have the latest on some timing there, kayla? >> reporter: hey, kelly, u.s. trade representative held two separate bilateral meetings here first with canada and then with mexico's economist minister. the goal is to reach a deal in principle, which they are hoping

to do in the next few weeks. when he left the building after several hours inside, she seemed optimistic they had broken ground on one of the most contentious areas of talk. that being the amount of u.s. content in autos created in the nafta region known as rules of origin >> the u.s. came forward with some creative ideas in the middle of early march, and that's really opened the door, opened the path forward for us going forward, it's important to appreciate this is a very complex set of issues, and i think all three countries are committed to coming up with something where the ideas are strong and where the details are right, and workable. >> reporter: meetings like today, a similar one two weeks ago, bridged high level policy gaps, and lighthizer told our

sources they need three more weeks to reach a final deal. if no deal is reached, worth noting they could end in a stalemate, elections for mexico' president on july 1st, and u.s. midterms in november back to you. >> these talks or nothing, kayla, is that how it feels? >> reporter: oh, well, they want about two weeks to have these high level talks continue, kelly, and then two more weeks for the bureaucrats, or what they call the worker bees in the negotiations to actually put together the fine print of any deal that's what lighthizer told members of congress last week. they need about a month. we are expecting something to happen in three weeks, and i note the tenor of all three trade officials appears much more positive than seen in rounds past. canada was seen bringing a red velvet cake because it was the minister's birthday here today >> and we like the reporter guy in the montreal hat there as well some high spirits.

kayla, thank you very much, in washington there joining us for more on how this could impact the energy space, dan everhart, ceo of canary, thank you for joining us >> thank you for having me >> so you guys sell oil equipment into mexico, so are you looking for a change in current nafta rules? do you just not want them tampered with? what's your interest here? >> well, i think the first rule has got to be do no harm in the trade negotiations i think we got a good overall economy and good energy market right now, so that's number one, but, you know, in 2015, the u.s. sold about 3.5 billion dollars of oil and gas, and oil sold equipment into mexico, and that number grew in '16 and '18 and growing again here in '18, in addition, the oil flows have changed. the agreements need to reflect the modern industry industrial complex and we want to see it set up for success in the future >> what would be the details of

updating nafta in the way you described that recognizes changes in the energy industry >> sure. so mostly nafta does not touch on the energy issues, but there's agreements surrounding trade and signoffs by the department of energy and the department of commerce regarding export rules, and i think that we need to see the negotiations loom in the positive direction, and i think that would be a big positive for the u.s. energy industry >> can you explain, dan, before you go, what that is what outcome are you specifically looking for >> so, we're specifically looking for things that allow for an easier export of u.s. oil equipment into mexico, and then the rules to be redesigned around what's actually happened since mexico or nafta was put s really now with what's happening now is the u.s. exporting natul gas, so nafta needs to be updated to reflect changes in the, you know,if it helps your business as well as they do

that thank you for joining us >> thank you >> that's dan everhart from canary recently imposed tariffs on lumber pushed prices to all-time high, impacting home building, for example, and other tree product, the newspaper industry. the trump administration increased tariffs on newsprint and rising prices caused one newspaper to take action the tampa bay times laid off employees saying tariffs on paper hurt us and the readers. they estimate the tariffs increase the news print by more than 3 million dollars up next, speaking to the chairman of lanar on lumber prices and tariffs they see prices slumping recently talking about that heading to break, look how the s&p sectors finished financials the winners, and the consumer staples did lag the closing bell will be right back

welcome back, a look how we finished on wall street, dow dropped 83 points at the bell, and worst performer, dow down third of 1%, but the nasdaq was down 57 points today, apple was weak, and apple suppliers weak, and the russell 2,000 small caps down two-thirds of 1%. broad markets down half of percent. time for the cnbc news update, sue? >> this is what's happening at this time, everyone. the cdc is warning consumers to throw out any store bought chopped rowmaine lettuce

the ecoli outbreak spread to 50 states chadwick star of "black panther" delivers the keynote address at howard university's commencement next month he's a graduate of the historically black university located in d.c do any of these items look forwa familiar to you? in so, you may be too late to claim them the illinois treasurer's office is auctioning off 175 items next month, and there's a sapphire, diamond ring, artwork, and rare coins. and it's always good to look before you leap. especially into a florida pool take a look at that critter. a tampa homeowner called in the professionals after discovering this 9-foot alligator who got overheated and went for a swim that is the news update this hour kelly, back to you

>> why we took out the pool, sue, thank you very much >> you got it. >> gators in new jersey. >> no gators in jersey >> that i know of. that's global warming. sue, thank you >> you got it, see you tomorrow. a lot more expensive to buy a home these days, we go over to diana olick with details on affordability. home prices are bigger as listings are leaner. the median price of the home sold in march increased 9% from a year ago to $297,000, according to a real estate brokerage, the biggest annual increase in four years high prices are the result of very, very low supply, which was down nearly 12% in march an dmulldmul dmul -- annually housing starts down 3.7% for the month, but not close to historical norms before the last boom hermits, indicator of future construction, fell as builders'

confidence as the cost for land, labor, and materials rise. lumber prices up 28% compared to a year ago, and that's framing and osd, and in contrast, multifamily construction is still increasing builders seem to be banking on continued strong demand for rental apartments as home buyers struggle to buy and afford homes they want. and adding insult to injury today, mortgage rates jumped as the 10-year treasury yield which they loosely follow broke hi higher nothing like an alligator, but maybe close. >> or worse depending where you are. let's bring in stewart miller, executive chairman of lamar corporation, and executive chairman, how's it feel? not ceo anymore. >> feels just like it was before it really does >> same amount of work and pressure >> day-to-day doing the same things, but it's really great to see new executive rise, new executives rise to new positions, and as the people

that have taken the position of ceo, rick, see the president, john jaffey, cfo, diane besset, and they have been doing the jobs for a lot of years, and they are excellent >> you get a veto? do you have to let them go and just kind of say, okay >> if you promise not to tell them this, i get a veto all the time >> oh, well, let's talk about what's happening in the business today, the home builder industry was down 3%. you have interest rates up you have lumber prices up. we talked about that it's the best of times for you guys, but there's also, i don't know if it feels like a lot of pressures that -- how do you feel about the outlook >> look, there's a lot of cross currents out there you heard from diana home prices are up 9%. interest rates have been coming up, and we saw a movement today, and lumber prices are higher, and labor, materials, and there's a number of cross currents out there, but don't

forget the fundamentals of the economy. this is what defines the attitude and aptitude of people to be able to buy homes, and that is -- >> and all the millennialmillen. >> unemployment low, wages going up, double income families >> people say, still, because we remember what happened in the housing -- you can't say there's a housing shortage we overbuilt in the crisis, still dealing with that. do you say so? >> we have a housing shortage. there's no question about that, for eight consecutive years, we've been producing homes at underneath a normalized rate of 1.5 million homes a year, and that's rentals plus forsale homes. we've been building pent up demand market is off -- not participating because they have not been able to get mortgages, and now that mortgage approvals are starting to normalize, people are coming out of the woodwork, and millennials are having children -- >> no kidding.

>> and that means family formations, so we are definitely seeing a lot of demand, again, short supply, and that's really what is driving housing prices up >> does the industry have the capacity to meet demand in the way that's going to maintain some kind of affordability or intentionally restrained or how do you view that >> i can assure you there's no intentional restraint on the supply the fact of the matter is we have short supply of land, meaning entitled land. fly over the country, you see land out there, but entitled land is a big issue. >> what's entitled land mean >> entitled land means it has the approval to build, the number of homes that ha lot of landovers just don't have the -- >> is that a problem at the state and local level? i read somewhere not long ago the cost of kind of building a house and taking intoing t accot has tripled since the last boom. how do you solve that?

or is that why it's not affordable >> it's a local level. that's the problem entitlement is a big issue it takes years to get entit entitlements in the market across the country, adding to the cost, builds to the cost of land, services are expensive, bringing water, sewer to the site is expensive, so land is in short supply, and labor and materials are finding shortages. we have a short supply of labor, and that's driving wages up, which is double-edged sword, and higher costs, but more people afford to buy a home >> the story is when that's the situation that the larger players would have an advantage over, perhaps, a mom-and-pop builder? >> one is that is the case, and, two, does brand matter in single family homes and new home sales? >> start with brand -- i don't know that brand matters as much as size and scale, especially scale and local markets. the ability to garner attention of the subcontractor base is really important, and the ability to have enough scale to be able to make it efficient for

subcontractors to stay on your job is really important. driving efficiency enables us to keep costs down, and that is in favor of the larger home builders >> fighting for the subcontractors love it. we know what it's like get the guy to do the projects, and then, you know, we'll see where it goes from here. worried it's starting to feel like it's going to take off. maybe it's just me if the prices keep going up, shortages, conditions for a bubble-type thing to start -- i don't want to say it, just, you don't think? >> don't you think at the end of the day, people need a place to live >> yeah. >> we don't have an over abundance of rentals or homes for sale off the ground. unfortunately, with shortage and demand growing, you got to see prices go up because of how you regulate and get the homes >> i know. we'll see. stuart miller, thank you so much for the time >> thank you for having me should you buy the shares? we're going to trade the home builders -- stick around here to

hear this. our fast money traders weigh in after this

83 point drop dpfor the dow today. now it's time for the rapid recap. president trump and japanese prime minister shinzo abe agree to step up trade talks >> if we can come to an arrangement on a new deal between the united states and japan, that would certainly be something we would zadiscuss. chip maker is less amazon prime service has more than 100 million members. the ceo announced that milestone in the annual letter to shareholders >> stocks shocking investors, watching five deals in what all of that could mean to the bull market >> i'm not concerned about the move to the downside today i think earnings season has basically done what we've been expecting, kicking off, just the beginning stages of this >> dow out with an 82 point decline, i should say. >> and shares of pinnacle foods

jumps after hours. here's the details new filing shows jana partners took a 9.1% stake in pinnacle foods and intends to have discussions with pinnacle foods board on value creation members including the evaluation of strategic alternatives as well as board composition, and says a construction resolution cannot be reached with pinnacle foods, jana could pursue a board king pinnacle foods was private by blackstone in 2003, public in 2013, and 2014, there was a potential deal with hillshire, but that ultimately did not go anywhere kelly, back to you >> all right, nice pop for them now, up 7%, thank you. u.s. home construction etf with the worst day in two weeks, and to talk more about the home builder, our fast money traders are here good to see you guys we were still talking with lannar stuart miller about this, but what do you think? is today a sign of a problem for the sector or do you like the

space? >> i like the space. i did hear a lot of your interview with mr. miller. i agree with what a lot of what he's saying. i think the backdrop is positive you have growing demand. you don't have a lot of supply i understand that rates are going up, but if you look at the absolute level of rates, it's really not that high, and you have employment, we've not had employment like this in a long, long time, so that's adding to the demand part of the story, and, for me, instead buying one particular stock, i like the xhp, equal waited stock with home builders, home depot, you gemt the who get everything, whirlpool even i look at it that way, but all the elements i like is similar to what mr. miller talked aboutment i like it here an opportunity today >> maybe, pete, the way you play it, if you are worried about input costs or hurting margins, home depot could do well no matter what. >> where i was going with this i don't particularly like

trading the whole builder. it's a difficult trade it's interest rates. that's a big deal. commodity prices, bob talked about lumber and moves seen across the board there, but i love the home improvement area home depot is my favorite stock. been in there forever now, and lowe's not as much as home depot. that's king. i think that's - >> why >> that's the one to beat. >> why not be in the builders? it's interesting that in a way with all of this demand, talking about prices going up, and, you know, sure, i understand there's pressures there, but it seems like it's good news. why don't you like the builders? >> here's the thing, how often do you say they are cheap? forever. the reason is, they don't seem to move, even when nay get earnings starting to move in the right direction, the builders, themselves, now, there's trades there, but, oftentimes, you held on and held on and got nothing from this, so i think there's better trades along the way, and i think what you are talking about. there's different ways to approach it. i love just going right to the home depots of the world where

you got the home improvement side of things you don't have the noise you see with the 10-year rising, commodity prices, and i like the commitment home depot made on the electronic side of things and everything they are doing to compete with the amazons of the world. i think that's a smart move. >> the smart home thing, that's another discussion i'm -- i'm intentionally done about the smart home letting you go thank you. >> thank you much more coming up on "fast money," 18 minutes time at 5:00 p.m. eastern the battle for azos man'hq2 is back. today, we're pitting dallas against newark, new jersey how do you gauge the greatness of an suv? is it to carry cargo... or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the mercedes-benz suv family. greatness comes in many forms. lease the gla250 for $349 a month

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♪ welcome back in january, amazon narrowed down candidates for its second headquarters to 20 cities, and we asked the cities to make an elevator pitch why their city should be picked you can help determine the winner by going to dashforamazon.cnbc.com denver won last week 60% to 40%, the judges were all for denver, so denver is in the next round dallas faces off against newark, new jersey mark cuban makes the case in dallas >> dallas is a great city for amazon to locate a second headquarters we're a city that's friction-free for doing business, a highly educated work force with great universities in and around the city, and just as

importantly, we are an incredible destination people from around the world move here to take jobs and it will be easy for amazon to recruit. in addition, the cost of living is low, the weather is great, the sports teams are amazing, and it's a fun place to live we got a vibrant energy, and you can't get a better city than dallas, texas. >> yeah, but he's in the car talking about it let's did over to newark >> hi, this is hugh weber, and i want to take a few moments to share with you why we love calling newark home. newark has had a storied past, and it's had its challenges and troubles, and, yet, we still see this amazing vibrancy, this will and determination as well as the warmth and love of the people who live here to make this place special. that is the story of newark that

is unfolding we would love to have hq2 be a part of it we believe that it, too, can be an impactful place to not only do amazing things and work and business and commerce, but to create a legacy and for future generations to come, a story, perhaps, the great american story, unfolding before our eyes we look forward to spending more time with you and welcome you to the amazing resource of talent, wealth, technology, infrastructure, airports, rail, you name it, it's all right here in the best kept secret in america, newark, new jersey. i feel like he should have talked about the airport first, but anyway, bringing in the panel of judges to see what they think. they rate each pitch and city based on tax incentives, fundamentals, and the x-factor 15 points total. joining us, elaine, and ed lee, cnpc contributor and managing editor at recode ed, who did you pick >> for me, dallas, by just a

hair margin. i gave it to them for the x-factor newark's tax enseincentives are insane i mean, it's nice for amazon potentially, but it doesn't make sense, but i think x-factor is that dlaallas is a growing city, mark cuban sold is nicely. i think location is a factor right? i think amazon already has a lot of operations in new york, east coast, and i think having a bigger presence in dallas helps it in the midwest. >> elaine, who did you pick? >> i picked newark i actually think it presents a more intriguing option >> oh. >> and, although, ed did touch on tax incentives, $7 million chris christie signed, it's massive, but it x-factor is proximity to manhattan amazon spends a lot of money shuttling employees to

manhattan, new york, and d.c. every month, so having a true corporate presence in newark - >> they could just pick new york they don't have to pick newark, right? >> but they do have the ability to -- there's a renaissance component i think a lot of people, including the ceo of audible has mentioned, which i think plays into amazon's favor. >> mike, do you think helping newark achieve a renaissance is going to be -- >> i don't think that's first priority, but could be an element of it. on the idea of it's a value buy. the problem is, i just don't knowif there's the sort of flexibility and expandability here, right? it's, obviously, already a dense place, it is basically new york metro, as much as newark says no, they are their own place, but dallas, to me, checks off more of the boxes. >> is the -- >> i would - >> new jersey here, is the incentives that are insane i'm -- >> yeah, it's not great for the municipalitie municipalities, and i think texas has a state that's interestingly enough from an

electrode standpoint is interesting because it's growine also changing. i'm not saying that's a reason amazon's setting up shop there could change -- >> they'll try to make texas blue. >> it's actually getting there it's a purple state already. >> elaine qualm and ed lee, thank you. it's crazy just how much we're staking on amazon. you can cast your vote. voting's open until sunday at 3:00 p.m. eastern time. nike falling more than 1% as it brain drain continues still ahead on cnbc, weed week continues on "fast money." growth and cannabis is going to be a buzz kill for one group of stocks you can hear about that at the top of the hour. from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything.

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welcome back it's time for our takeaway today. we begin with another high level departure of nike. the most striking thing about this, mike very little has been anticipated or even discussed in the media has nike shown how to get ahead of dealing with harassment >> it's unclear if it's getting ahead. looking at what's going on everywhere and surveying their own culture or if it's defensive. >> but it never got in the media. >> something has to come out. >> i'm not leaving for that reason i'm leaving for something he. next move over, taiwan semi has strong orders for cryptocurrency mining ships. it comes as both individuala are

trying to deenterprise their own reliance taiwan had been hit on apple supply concerns. should crypto bail them out here >> i don't think investors would love that just because obviously the price of crypto is very volatile demands unclear. it's not a forever thing there's a finite number of these things that are going to be -- zero sum game arms race. >> we'll see. finally, netflix has already cleaned up at the emmy awards but it's now turning its sites on the oscars. it's considering buying movie theaters in l.a. and new york in hopes of reaching a broader audience is this the right move for them? >> maybe just to buy your own loophole to make sure you get the theatrical distribution would be a rounding error. >> if it's going to happen for them, amazon is next, right?

>> probably so interestingly, i don't know if it would go against some of the whatever 60 or 80-year-old antitrust rules that kept the studios from owning a theater chain. i would know idea if that's a wrinkle. >> i didn't know that. that's interesting after hours movers, we'll get you after the short brksea names like skechers hit pretty hard plus an addition to the legal team for trump. [phone ringing]

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welcome back to "closing bell." rudy giuliani is set to join president trump's legal team and according to dow jones which says the move is set to happen immediately. it comes after ample turnover on the president's legal team of course julianni was a close confident during and after the trump campaign, but it now is being reported he'll join the president's legal team for more breaking news from seema mody. >> according to reports cyclist lance arm strong has agreed to pay $5 million in claims for defrauding the government in using performance enhancing drugs while competing for the

u.s. post office sponsored team. kelly, back to you. >> thank you. i'm just looking at this with lance armstrong. it's as much as $100 million in damages and was filed by floyd landis as a whistle-blower lawsuit. >> defrauding the government piece is a big one. >> and 5 million sounds like a lot but it could have been a 100. >> i wonder what his lifetime earnings were. i know he was on top for a while. tons of endorsements. >> i want to quickly give you the after-hour movers. mainly skechers and pinnacle foods. jana partners reported a 9% staelk in the company calling the owner of dunk can heinz, and birdseye vegetable under value mattel announced a ceo change. skechers is plunging after issuing weak. three companies --

>> i don't this this have as much as of an impact on the market tomorrow. "fast money" start now. "fast money" starts right now. live from the nasdaq overlooking new york city times square i'm melissa lee. tonight on fast as bitcoin plunged back it's reaching a key level that got our crypto ball pounding the table he'll join us to break it down from crypto to cannabis. it weed week on "fast money. pot could be a major buzz kill for one group of stocks. vivian assert cowan will be here to explain the tech giant seeking