things >> maybe it's a deflate-gate in u.s. car imports >> in the same way you place baseball >> something's going on. >> it is curious tariffs on exports of trucks, a >> i have something curious. big item here. mine is also about mlb they are tariffs we both agreed there's a report that nike is in 1994 as part of the wto, and close to taking underarmour's neither of us can change them deal to make uniforms. report says because of the without changing for all other exporters unless we do that in problems, this would save them the context of a bilateral trade money. >> i don't have a baseball lunch check please, so thanks for deal, which is what we were working on with the previous watching power administration these are the normal tariffs >> closing bell starts right that we both apply to trade with now. countries with whom we do in the welcome, traders react to have free trade agreements >> are you willing to lower your two white house wild cards, cancellation of a summit with tariffs as part of a new deal? north korea and new trade >> i think as part of a new tensions i'm eamon at the white house, deal, indeed, we consider that most industrial tariffs should the president is makie inine iis go to 0 provided that the u.s. on two fronts calling off the is willing to do the same, and i summit with north korea, and think that is one of the things hardening the line on what could become a trade war that they have been discussing >> at the new york stock with wilbur ross in terms of exchange, when the smoke clears, future discussions, but in order how will stocks react to the to get to that point, we would need a permanent exemption from 10-year yield under 3% again the threat of unfair tariffs on i'm morgan brennan, legal battle steel and aluminum exports

>> and, ambassador, has the u.s. between short term rentals and approached the eu initially the law. we spent months investigating. you don't want to miss this cnbc before imposing those imports to exclusive. >> i'm kelly evans new reports the u.s. is going work with the eu, to place those after bitcoin, and did towns resolve the pension crisis or sorts of tariffs on china. make it worse? did they want to work with the the "closing bell" starts right u.s. or against china on that? >> we've always offered to work now. closely with the administration and welcome, everybody, on common concerns with china, we'll get to the stories in just both the over capacity in the steel market, which was the a moment, but, first, a check on result of excessive investment the markets after the big news in china, the difficulties of of the morning about the president cancelling his summit investing in china, and the way with the north koreans all the major averages that sold china treats intellectual off on that are bouncing back. property these are absolute issues of the dow was down as much as 280 common concern between the united states and the european points, down 97 right now. union, and we've always offered >> the low of the day, about 11:00 a.m. we begin with two big pieces of the work with the administration on addressing issues >> ambassador, switching focus, uncertainty out of washington. there's a new government in trade and north korea. italy, who has very clear plans eamon is live at the white for how they'd like to reform the eu it involves stepping back the house. >> reporter: the president tried level of integration does the eu prefer that plan or to strike an upbeat note,

cancelling that summit, speaking french plan from president to reporters in the west wing macron seeing deeper integration going forward? >> there's always a debate in today, the president said people should not be anxious in terms europe how we take forward our of the future here in terms of integration, bringing many what happens and it could be benefits to our citizens, both rescheduled, possibly june 12th, politically and economically, but he struck an ominous differing views, clearly in a military note as well. debate about how to take forward here's what he said. the reform of the euroarea in >> i've spoken to general mattis particular, and this new italian and the joints chief of staff, government brings views to the the military, by far, the most table, but you need 27 countries powerful anywhere in the world to agree on these kinds of changes, and so this will be a debate which will continue for that's been greatly enhanced some time, and there will be recently as you all know, is viewsing in we agree, as we always do in the end, on a ready if necessary common position between our >> reporter: saying the u.s. member states. military is ready if necessary dismay from the south korean >> okay. ambassad ambassador, thank you for side here's the statement they put joining us today, appreciate it. out saying it is hard to resolve sensitive and difficult diplomatic issues with the ambassador david o'sullivan from current way of communications. we hope that the leaders resolve the eu >> i had a feeling he wouldn't problems direct and close say less integration is better >> i had a feeling he was not dialogue not going to say more all of this begs to question of integration is better and eu has

where u.s.-china trade relations to shut up >> thus the situation in europe these days go in the wake of the summer >> diplomatic, on the fence, beautifully, and well-rehearsed. the president said earlier in the week he was frustrated he felt possibly xi intervened to >> absolutely. >> we've got, what, 50 minutes urge north korea to take a or so, just less than 50 tougher line in nuclear negotiations because of china's minutes, 47 minutes before the close. ambitions in its trade we need the countdown. negotiations with the united states the president announcing some stepped up measures here over the past 24 hours on trade, and it remains to be seen how all >> how do you think the ieall - this plays into the ongoing italian bond market is >> we know the italians, so far, this is important, discussing this the u.s.-china dialogue. other day, even on the day we do expect that the commerce italian yields spike, it's not secretary will be headed to china at the end of next week to contagious across europe conduct negotiations with the chinese side we'll see where all of that >> just their problem. plays out, but four-sided, >> meaning it's contained for now. let's have a look. five-sided, six-sided 46 minutes left of the trade negotiations going on here on now, time is taking away >> there's the countdown box the nuclear front and trade front. >> eamon, thank you, more in >> dow down by a third of 1%, just a minute, but stocks did stage a comeback after falling nasdaq just higher >> we're just getting started. earlier on that news of the stay right there summit cancellation. >> seema mody is charting that much more on how the market reacts to the sudden breakup of the nuclear talks on the

peninsula, plus, a new way to >> decision to pull the plug on the summit pushed stocks lower solve pension problems with bonds. is it working? you see right when the news came making everything worse? we'll hear from one city leader out at 9:40 a.m., right there. moving full speed ahead. dow fell 281 points at the lows. and reports that department of justice makes a move on bitcoin. interesting comment today saying rhetoric and posturing on both are prices being manipulated sides heats up again as likely, is the everyday investor getting that makes it difficult to gypped this"close iing bell" live reschedule a summit before the from the new york stock exchange u.s. labor day holiday on the 3rd of september, a traditional with kelly evans and wilfred frost. starting point for voters to pay we're back in two. attention to midterm election campaign look at reactions in the gold market hitting $1300, the first time this year. this, as the 10-year yield dipped below 3%, which has been weighing on the financial sector also for that flight to safety trade. right now, 2.98% regional banks traded down on that, but not well off the lows of the session anyone can get you ready, important to point out holiday inn express gets you the readiest. a surprising build in inventory out of western texas sent oil because ready gives a pep talk. showtime! but the readiest gives a pep rally.

prices lower watch the auto sector today, i cleared my inbox! holiday inn express, trump confirming a probe into be the readiest. imports, performing higher, but when it might be time to buy or sell? a different picture overseas, with fidelity's real-time analytics, you'll get clear, actionable alerts volkswagen, porsche, bmw, all about potential investment opportunities in real time. taking a hit there's the boards >> down 4.5% now, seema, thank fidelity. open an account today. fidelity. you. >> yes now to the historic summit whai tell clients, etfs can follow an index, cancelled by the president this morning. but which ones target your goals? one of the questions is what it's not about quantity. happens now with denuclearization prospects it's about quality. >> we'll discuss further with no trendy stuff. i want etfs backed by research. fred kemp, president and ceo at is it built for the long-term? the atlantic counsel good afternoon to you. my reputation depends on it. fred, i mean, is this art of the flexshares etfs deal stuff or any prospect of are designed and managed around investor objectives. denuclearization of north korea so you can advise with confidence. now done and dusted? before investing, consider the fund's investment objectives, >> i think it's art of the deal risks, charges and expenses. stuff. this is a trumpian act to gain go to flexshares.com for a prospectus containing this information. read it carefully. leverage i was in seoul last week, and the south korean leaders, and i talked to several people relatively high up, believes that kim jong un made a

strategic choice, that he needs to build his economy, he needs to guarantee of his continued existence from the united states and he's ready for compromises up to denuclearization in their view certainly, from the trump side, and this we heard thaed, they are preparing for the summit, but he told foreign relations committee, the team on the north korean side has not been engaging with us i think it also has to do with the fact they are not seeing good faith on the north korean side you could even see a rescheduling for june 12th, who knows, but i do not think this process of negotiations is over because all the key parties want it too much. >> but, fred, just going back to the statement that north korea put out last night, taking issue, apparently, with comments that vice president pence said a analogy against the libyan situation. this is from pyongyang senior

envoy for u.s. affairs they said that they could make the u.s. a case of an apaling tragedy, they neither have experienced or imagine it could be a nuclear showdown and called pence a political dummy. how could -- at least they came back this morning, and said, fine, recycle flowers in the u.k.? it's cancelled how do you not pull the north >> everything in london. koreans out after a statement rules are tight. that's good. like that? >> well, look, first of all, i >> is it >> you have to put them in a think it's interesting that different thing, anyway. president trump decided, and i >> stocks off the session lows, think rightly so, to say this dow off as much as 280 points after president trump announce was a kim jong un statement. the u.s. cancelled the nuclear he controls what anyone would summit with north korea. say in the official sense. for more, bern mckinney is here he's right to say this is your statement. he called it his statement i think he's right to call him out on that. i think the bigger concern is and morgan kelly welcome, guys. david, first to you. we are taking this in stride that they received a list 6 this morning, and interestingly, particulars from secretary of interest rates looked like a flight to safety there, and you state pompeo north korea might have been a expect that to be a temporary bit surprised by the detail, about how intrusive it would be thing? >> yes, i do when you think of it, it's not

to denudenuclearize. that bad an outcome here, no, i they are absorbing that. don't think kim was ever going we don't know the power to give up the nukes structure in north korea i think that this meeting was it's opaque. is there a hard line putting pressure on kim jong un? always full of danger, and if 100% control who knows. you're not going to go through with the wedding, don't show up one thing that's said about to the altar bebolton and the vice president, embarrassment all around and more dangerous i think counting the talks, the word "libya," and it's not the denuclearization of libya, postponing the talks, we'll see. but how gadhafi left office in it's not negative. interesting they rally off many pieces and dead, so they -- anything and stock market gets nerves back, but overall, the you know, that's the one thing that kim jong un is talking picture is still pretty positive about, has talked about with one in the u.s i think this is a small bump in the road here. other foreign leaders for many months already, so that hit a >> do political concerns worry you as a market investor in their own right on only when sensitive spot >> china happy today did they want the summit to take they impact trade talks they have an effect on the market - place? >> i think there are four major >> this is something - >> go ahead, burns players here >> this is something we'll be kim jong un needs the summit because of his own existence and facing for quite some time now you know, what we've seen so far economy. donald trump wants it for his this year is a game of a tug of own purposes, nobel peace prize, war between positive days you legacy, the deal of the century. had strong earnings results, and

on the negative side, president moon wants it for sure geopolitical concerns such as, because he's a peacemaker. you know, trade discussions with chinese want it if it means that china, you know, you had the north korean issue, and now that they can get u.s. troops off the we're through with earnings season, you lost the good side, peninsula, and so i think that would be their goal, and they will try to make north korea but you have bumps in the road, and that's probably exacerbated drive a harder bargain by the fact we're at last year in 2017, you had monetary policy there's more tension between north korean leader and chinese tail winds to get us over the leader than most people know or humps, but this year, that's believe, and so that's also not gotten a lot tighter, and so the way we think about it is take a that smooth a relationship >> fred, great stuffer trampoline, tighten the spring, great as always, fred kemp there's more bounce. >> and, david, where is that >> thank you citing national security, leaving you in terms of best the president is looking into places for people to be in the raises tariffs on foreign cars market right now >> well, i think we have a serge some view this as a negotiating tactic to gain concessions from mexico and canada, but we drive in growth over the next year or a lot of european cars how might this impact the u.s. so that will be good for earnings and push up rates relationship >> david sullivan joining us, eu fed raises rates every quarter because of that, there's money ambassador to the united states. thank you for joining us flowing bonds to stocks. >> thank you i'm in equities, particularly >> what's your reaction to the news of the potential tariffs? financials, steer clear of utilities and reits although

>> well, at an early stage, they are doing well on the there's app investigation opened market move today in the 10-year, but long run, be i see that reaction is critical, pro-cyclical in the market over the next few months, but you it's a stretch to imagine that car imports could be a threat to national security, but let's see how the investigation plays out, have to look forward to a slow and let's see how the domestic u.s. discussion on the dourn. ultimately, i don't think trade advisability of this makes its way forward. obviously, from our perspective, calls come to anything other than more uncertainty in markets, slowing it all down a hard to imagine that extra tariffs on autos would be wgo little bit >> burns, now time to have clie exposure to domestic businesses, compliant, but it's early, let's smaller caps, perhaps? see how it plays out in the u.s. >> you have seen that already so far this year. the smaller caps certainly have discussions. >> andu place tariffs on benefitted from the fact that they are less exposed to geopolitics and trade wars as well as some of the primary beneficiaries of the recent tax cuts now, that said, you know, valuations there have gone up a bit, so you don't necessarily get the valuation discount in small caps that you did once upon a time, but, you know, at the same time, you really should probably focus -- we've been telling the clients to focus on is cyclical value names because

you do get the reversion to the mean effect that they've been out of favor for so long that you can sort of ride that tail wind >> okay. all right, guys, thank you, burns, david, talking markets today, appreciate it 40 minutes to go, dow's down 50 point turn positive into the close s&p down four right now, nasdaq up by six. russell fractionally higher. many local governments are trying something new to fund their underfunded pensions, but is this solution making everything worse deutsche bank planning to slash the global work force. we're back live from the new york stock exchange to discuss those factors and very much more coming up. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself.

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a couple individual stocks to watch, deutsche bank trading down, down 4.65%, and -- >> you go back to the fact that morgan stanley was 17 minutes and goldman's -- >> shorter than that a couple weeks ago. morgan's was 17 minutes, deutsche, european structure, they are longer anyway, but the length points to the fact it was a very busy contested one, but breaking end of power lunch, they survived it, 91%, and the headline being this job cult, going from 97,000 to 90,000, shrinking balance sheet in the corporate investment bank by

10%. still doing that reaction from the core - >> there's no bounce back. >> adr, right? >> yes, but the fact that the restrax was not bigger is why we trade down when they came in a month ago, they talked about, you know, the big, you know, focus on the core business, and they hope they retraced steps more, and they have not traded down. >> best buy reported a balleat s morning. stock falling 6% now after a disappointing outlook, and that said, the comps are better than expected, 7% against 3% of what the market looked for. >> down 6 partnersh.5%. usually one positive and one negative >> not today >> 34 minutes left of trade. low of the session was down 281 points that came around 11:00 a.m., rallied since, and down 50 points or .206 of 1%

dow closing lower, would be the fourth time in 16 sessions what to watch in the close department of justice opened an investigation into whether traders are manipulating the price of bitcoin there's nor coming up. every fire department every police department

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welcome back to "closing bell," we have a news alert on harvey weinstein wnbc learned he's expected to turn himself in tomorrow to face charges related to alleged sexual misconduct. those charges following a probe by the manhattan district attorney's office, nypd, expected to come tomorrow in new york weinstein has denied wrong doing. back to you. >> okay. julia, thank you dramatic news on that front, of course, people have been asking what the status of the new york investigation is into harvey, and the news on the federal side yesterday as well. time for a cnbc news update. we get to sue for that now sue? >> here's what's happening at this time, everyone. we start with a white house event where president trump called his decision to cancel the plan june 12th north korean summit a tremendous stetback, bu he is keeping the door open to a future meeting >> hopefully everything's going to work out well with north

korea, and a lot of things can happen, including the fact that, perhaps, and in what way, it's possible that the existing summit could take place or a summit at some later date. the driver of the new jersey school bus that crashed and killed a student and teacher was charged with their deaths. he allegedly made a sudden u-turn in the highway median when a truck collided with the bus. he had a total of 14 license s suspensions and eight speeding tickets. reaching an agreement with the owners of a puppy who died in flight. the carrier apologized for the accident and did not disclose how much they'd pay the family you are up to date that's the news update this hour, back downtown to you >> all right

interesting guesses, but no idea how much they'll get for this. >> could be any number, frankly. sue, thank you very much for that let's get to our closing bell exchange kim forest, and keith bliss, and rick santelli at the cme in chicago, all joining us right now. keith, what's your take on the market moves today i guess pretty obvious reason for the selloff initially, geopolitical concerns. encouraging to see the rally we've had since at 11:00 a.m. this morning >> absolutely speaks to the resiliency of the market, wilf encouraging signs inside the move as it rallies back from the news this morning. importantly, look at the transports, up over 1%, and the main movers up in there are the rails in the passenger airlines, and that's -- you don't see moves like that, and if you think a market trends into a bear market. so the other important point is on the financial side, small caps, russell 2,000, that's where the resiliency moves

through, and we think it goes higher, again, speaking to the financial strength in there, even though the yield curve flattened out slightly this week, but i think people feel strongly about the economy and what it means for financials, transports, and other cyclical companies. we think social security a good move for the market today and had continue >> rick, asking you about the moves in rates as well 10-year back below 3% yesterday. you talked about that retreat. is it getting more significant now? >> well, i think it is once again i know we're splitting hairs here, and viewers, i don't mean to, but several basis points makes a difference i think the key technical level is 3.03 from a very significant high, in december 31st, 2013, and, yes, below that , you can see, we started to drift, whether it was the auction, and i think there's a drip you have bunds flirting with 50

basis point. you see, although the italian bond market does not seem to have a transmission into the credit markets of europe in general, they have a huge transmission into the psyche of politics in europe, and that's the point. even though they were not higher in yield, look at the 10-year close, 2.39 in close, high year at 2.40 so we're splitting hairs. there's issues with the other aspects of nervousness in the globe to be very enlightening with respect to the turkish lear, for example, not moving a lot further down against the dollar, but just like italians, close, so i think very significant all these moves. i do say interest rates may not go down a lot, but i think that real issue is losing momentum to the upside and consolidation mode on u.s. rates and lower levels >> so, what's the best way to

play the market, kim sounds like tensions abroad is the best to go for u.s. exposure >> well, we like technology because it gives you, realm, it's domiciled in the u.s., but it does -- you can buy technology anywhere, and that's in demand. we like net app and intel because they are unloved right now, and intel has not benefitted from ai or autonomous driving, but we think it will, and net app is just this sleepy company that's been the no. 2 storage company for a very, very long time, and we think that allows them to develop a very good product for the hybrid cloud and on premise sorpt t of storage for data, nerdy picks, but going with them. >> nerdy picks often the best

win. talk about oil prices, keith, pulled back a bit, is that important for the wider cequity market as well >> i don't think they care if it trades back up above $80 it's holding up well, and certainly, pulling back and there was news reports today they may pump more crude and ease prices keeping it in the sweet spot, and i think that's equities are trending off that a little bit more importantly, if oil comes back, you see transports, again, particularly rails and airlines rally more, that's the believer and doubt theory, continue to rally and challenge the all-time highs they set back in january, we have to go with that, and you see the dow come back up above 25,000 and challenge its own all-time high. >> leaving it there, thanks, kim and rick as well >> despite rising interest rates

of late, many cities in the u.s. invest in the stock market through the issueance of bonds planning a quarter billion in bonds this month to go towards its workers' retirement season >> the cities pay a lower interest rate for the bonds, some say the risk outweighs the rewards. joining us now to discuss, seth and kyle crocker from the two larry county board of supervisors. in terms of what interest rate you expect to pay on bonds issued, what levels are we talking? >> somewhere in the neighborhood of 4.5%, and we're currently paying 7.25% >> so 4 po.5% you pay to put th into the stock market perhaps or other investments going forward. is that a big hurdle to start with >> i don't

we're in a great economic situation. we have zero debt outside this opportunity that we have, so we're really out of the norm of the local government where we will be able to capitalize on a strong economy, capitalize on job growth, and we want to make sure we are doing is fiscally prudent for taxpayers. so every's clear on this >> it's a municipality that has to meet pension obligations, and to do so, they borrow money to invest in things like stocks for a better -- is this robbing peter to pay paul? >> more or less. you are borrowing money invest in risky assets because as mentioned, they borrow at 4.5% you can't invest in riskless treasury bills, but risky assets, and because there's going to be risk involved,

there's going to be volatility, and volatility affects budgets year to year >> if you don't meet, say you have to get, you know a 7% return or whatever it is every year to kind of make those payouts and all the sudden that gap is growing, if your fund does not meet the gap, does that mean taxpayers chip in the rest? >> yeah. we'd have to look at another solution we have an obligation already, so we have an unfunded liability of upwards of $350 million so regardless, even if the markets do bad, we, today, are having to pay 7.25%, last year was 7.55% as far as what we owe now. our pension system is over a billion dollars. we just had a committee meeting regarding our asset and liabilities, and that's the situation we're all defined benefit plan this is not something unusual. this is something that governments have to deal with all over the country

>> yeah. no that's why we talk about it. here's an idea, if we can't meet obligation, we don't want to shake down the taxpayers, so let's borrow and invest a leveraged bet on the market continuing to go higher, in linear fashion in order to meet payoutings how did you get here in the first place? >> goes back to a history of what the whole idea of defined benefit is outdated. the private sector, with a few exceptions, utilities with a defined return that is regulated, you know, the companies are not going forwards that plan, and governments are the only option, and they have options because they tax individuals more that's not prudent we think we need to make sure that we are a first step to other reform looking for

contributions. that's takes away the market volatility >> well, that would be - >> market volatility is going to happen regardless. >> yeah. absolutely and the interesting thing is that companies have moved in this fashion because they had huge problems running pensions, and some today still do, so do you think that you're going to see a lot of cities, you know, teachers and firefighters and police, are we talking about them having 401(k) plans that can't happen overnight. it can't, right? >> that is correct, and -- >> absolutely right. >> go ahead. >> onesecond, tyler. >> took a long time to get into the mess >> go ahead. >> he mentioned something. this was a long time coming. these liabilities were not accumulated overnight. the interesting thing is, you don't see the financially robust states and municipalities issuing obligation bonds it's states like illinois, new jersey, connecticut. the pension obligation bond

tends to be an investigator of a fiscal distress and a red flag there's financial problems and there's pension systems growing out of control in terms of liabilities. >> who are the investors saying, well, for right now, i get the tax equivalent yields that look good in a low yield environment, but the best case scenario is it pays for over those -- that gap, and the worst case scenario is the second the market does not behave the way it has in the last couple years, that gap could grow. >> well, and if you listen to the states i just rattled off, none of them would be classified after issuing pension obligation bonds as being fiscally hael lly now and great stewards of the pension systems, so it's really just an indicator, a way of kicking the can down the road even further, so that someone else deals with the problems down the road. >> tyler, last word to you

>> i would argue that our situation is not like those. we have zero debt outside this new obligation we have a strong economy, our county is growing over 1%, which is high for california, and we've got lower unemployment rates that we have not seen in decades, and we're in a positive situation. we took over a year to analyze this, and we know that - >> okay. >> we know this is the best situation for the taxpayers, saving over $100 million based on our analysis. >> tyler, we wish you luck thank you for talking to us about it seth, thank you as well. >> thank you >> thanks for having me. defined benefit pension schemes all over the world >> yes >> we got 17 minutes left of trade, and we're down about a third of a percent on the dow, nasdaq dipped into the red as well, but well off the lows of the day. now, this mystery stocks climbing back higher after falling sharply at the open.

we'll reveal the food stocks that is fighting back. that'll be coming up cnbc inside the world of illegal short term rentals and who is behind them our investigation of unwelcomed guests is coming up.

welcome back, everyone, dow is down 78 points, we were up -- how do i say it -- down 16, moving back lower now, the nasdaq is now down by two. williams-sonoma jumping after reporting earnings yesterday, raising full year guidance still, trimming gains initially seen afterhours up 5%. >> checking in on the sectors performance today, and, of course, one of the big factors we've seen in reaction to the news, cancellation of the summit with north korea was a buying yields, and utilities, therefore, best performance, and financials are suffering, and energy, though, the worst performer, down 1.7% as we saw. rise in the level of

inventories, and oil slipped 1%. >> a little break for consumers, though, going into the memorial day weekend, talking about high gas prices >> tweaking the pump prices? >> no. >> by friday evening >> rises like a feather -- like a stone? i don't know >> we know what you mean >> i'll work it out, 12 minutes to go, and russell trying to stay positive. we'll see. >> mike is posing up a mover today, mike? >> we know the consumer staple stocks have been slammed, and within staples, the food stocks hit particularly hard, and we have one today that is struggling, might not abell bad in terms of the details. that when we come back (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play

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you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] download the xfinity my account app and set a password you can easily remember. one more way comcast is working to fit into your life, not the other way around. welcome back, big number on the bill, 1.2 million to sell, cautioning the market does not seem to be moving terribly on it, so we'll see, just how many those orders come to fruition. dow down 75 right now. >> looking at the laggards in the dow, and we are looking at exxon right at the bottom, followed by chevron, not surprising given oil prices have slipped, and jp morgan chase

playing as well. >> that's right. down to the floor, mike is posting up news. >> they had earnings coming in light on the top and bottom line what you see right here, down 1.2% more broadly, the meat area of consumer staple outperformed the other food stuff, so maybe this is one area holding up better than cereal, dary, and packaged food companies we talked about recently as hitting new lows, guys >> maybe mike, you know the saying, rises like a rocket, falls like a feather? >> i was trying to think of it >> am i making it up >> falling like a feather makes sense. >> yeah, yeah, that's the important part for everybody checking prices at the gas pump. >> there we go mike, thank you very much.

i was thinking it plummets like a stone, but that's the wrong way round. >> it's the opposite >> anyway, there we go, mike santoli is switching seats with me in a moment up next, coming back with the "closing countdown." >> as well as earnings from gap coming up. keep it here, we're back in two. 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.

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welcome back, everybody. i'm kelly evans, this is how the dow transports look into the close. it is a strong session they are up 122 points that's better than 1% gain perhaps, the flip side of what we are seeing play out in the oil space right now, wti crude is barely hanging on to the $70 mark, down a buck today, and brent, obviously, hit hard as well, but for those who like to follow dow theory, sign that transports and industrials would be both higher is taken as a positive industrials have not got there, though down 82 points right now, wilfy. >> wilfy there we go. it's the close >> the tie, it's straight. >> the tie is straight there we go, kelly, thank you very much. we got about four minutes left you mentioned the dow transimportatran transported, let's look at the s&p 500 intraday move closer, looking up at the chart, it is red across the screen, if we zoom in on the chart, which is bad, but low at 11:00, much further, and we have

rallied nicely throughout the session, so given the news the geopolitical news earlier, the breakdown, of course, korean summit, encouraging session throughout the afternoon at the low of the day, well below where we are now, and if we look at the half screen of all four, the low for the dow 281 points, and at the moment, we are down, down 83, so, yes, lower, but very much improved throughout the course of the session, and now let's look at the 10-year treasury note. main reaction we saw on the breakdown of the north korean summit was buying of the bond market, pushing yields lower, back below 3% level, and yields closing at 2.977 a little bit since the low at 11:00 a.m., same timing as the low in the stock market in the yield sectors. what's this all mean well, it means interest rates played a lot of the performance, and banks suffered, utilities have done well, and, in fact, utilities at the top there, up

0.7%, financials at the bottom, down 0.7%, only worsened by the performance in energy stocks, down a full 1.7%, and, of course, stocks have done well recently, seeing a slip in the oil prices we got the oil price coming up it's down about 1.3% that's coming for you also coming for you is the gold and yen prices we've seen the yen strengthen notably today, very much the dollar not acting as a safe haven, but the yen was, and there's gold with a nice jump on g geopolitical concerns, 1.1%. seema? >> i think the move in the energy market is overlooked given the spotlight on geopolitics. it's no surprise that energy was the big mover today, exxon, chevron, big giant that led the dow to the downside, and alternatively held the dow jones transport index, like kansas city southern, alaska air, and southwest airlines

it's surprising to see oil prices move lower ahead of summer kicking off, and consumers travel more, take road trips, and that's why i think you're seeing such a big move in the energy market. alternatively, look at retail. with when was the last time you went into victoria's secret, wilf >> never >> exactly it's been a long time for the millennial generation. >> it's not only reason. >> of course it did slash the outlook, best performing name is l. brands on the s&p 500, and we got more names in the retail space reporting tonight, gap, decor outdoor, maker of uggs, and ralph stores, a better gauge to the health of the consumer >> the intraday rally seen in equity markets in the space, particularly encouraging given the trade seen in the rest of the world today. asia mostly lower, europe soft, as it has been of late, and week to date performances, before today, the dow, s&p, and nasdaq, this week up, best part of a percent, still holing on decent gapes for the week, encouraging

resilience in the face of the geopolitical concerns. >> u.s. outperforming europe, something people are keeping a close eye on >> absolutely is approaching the close, we are down about 63 points, so just rallies a little bit into the close, off the lows of the day, a few other points of note, telcos doing well, and industrials, so, again, there might be trade concerns off the back, but doing well today there's the bell down 78 points on the dow as we get to the close ringing the bell here, big board, carnival corporation , an that's it for the first hour, kelly's got the second thank you, historic day on wall street because the president's decision this morning to call off that summit with north korea stocks down as much 280 points

on the lows on that, closing down 75 points that's 24811 the s&p 500 down about five and a half points at 2727. nasdaq barely negative by a couple points at 7424, and russell a gain at 1628 continuing to outperform, about ten points below they're recent closing high joining us for more on this, cnbc senior market commentator, mike, bill, and nancy, good to see you all. topping the dow, ge, yesterday, worst session since 2009, down 7%, but now up 3%. exxon a decliner down more than 2% as oil prices did recede, and energy, energy was the big winner on the s&p, though, a more 3% gain, and whirlpool down 3%, mike, and there's earnings coming our way now, and after hours, but, really, the big story today, of course, is what

are ramifications to call off the summit what do you think of that? >> the market decided, tested the downside, see if they are getting upset about this, think if there's implications for a belligerent stance against chtht for trade, however it works out, and the morning low, market grinds higher because really when you looked around, none of the other trends had been too distu disturbed. volatility index is close below 13, basically on a four month low, and showing you that in general, internally, the market is holding together. so, yes, stocks pulled back a little bit this week in terms of the hottest areas like energy, and treasury yields are down a little bit, but it's not necessarily telling you the picture changed much >> we have headlines from the white house now again saying reenforcing the president's decision to send this letter to kim jong un this morning saying the summit was off, and that letter cited some strong awful

words from north korea itself in a statement last night, where they talk about the threat of nuclear war with the u.s. if it does not go forward, and so, again, the market given all of that taking it in straigide, rit >> absolutely, kelly i'm not a political commentator, but pleased with how the market responded today, and, also, this is part of the negotiation process, and so to reenforce that, stocks said the same thing. we did see not see a big selloff or panic at the close. that was a big move. i think there's going to be more of this and will continue on with, you know, ups and downs throughout the process what >> nancy, what do you like in the markets? with what's going on, do you change sectors or names you like to be in >> yeah, well, you know, the risk on cyclicals, the trade has been more positive despite all

options that value stocks would do better. we're lucky because we play in both spaces because our metrics are relevant we like the overweight we have, and the stocks performed the best this week with boeing with the weekly move. we like the space and particularly interested in a stop like federal express that sold off on fears of global slowdown in growth, but well-positioned for a positive surprise walmart at these levels is interesting to me again, and so i think there's a lot of opportunity. >> okay. >> yeah. >> let's bring in mr. value, mr. smead. is the market moving from you? you can't be a value guy without sitting out broad rallies and market moves and comfortably in contrary names what do you like right now >> starting with the first

topic, the international stuff is noise that is what it is, just noise people should not be making long term investment decisions because the noise cancels itself over time. operating as a stealth bear market under the surface, and it is under mining economic confidence, so people are afraid that we are not building the homes we should in the next five years and putting confidence in international cyclicals, and we have the most wonderful demographics in the world in the united states right now, so we want to make money in five to ten years in college educated women. that's where all the money will be spent in ten years, and they are both careered people and moms, both, and we want to own target the target report was so much

better than all the nay sayers made it out to be. >> target sold off yesterday on that >> yeah. >> amazon is either dr. evil, meaning he wants to kill you, he wants to kill you, or he's richard simmons. he's going to get you into shape. he is getting target into shape, kroger into shape, et cetera, and discovery communications, all this tribulation about disney and comcast is confusing investors, making them forget who owns 30 to 50-year-old women viewers, and that's discovery communications >> hgtv now too with the scripps move to your point on that, though, bill, this is not a space where you can -- the home builders were supposed to be the, you know, the story, and they had a horrible year, interest rates or not a great return on capital,

what do you think? >> kelly, you raised such a good point, so here's what we do. we sit down with financial advisers and those who hire us and say, we'd like to try to make as much money in ten years for you as we can. well, the historical facts are, stock you doubled on last year is going to take a rest, right it was white hot last year the home builders are cold right now for awhile, but ten years from now, when people look back and see all the homes we had to build for the next ten years, they will go, oh, i got so many regrets, i used to own that home builder, i used to own lenar, but i let the temporary correction shake me out. >> you're sticking with it for the demographic long haul. we'll come back. let's dig in for with the latest on the president calling off the june 12 summit in singapore with north korean leader kim jong un, in fact, the white house official said the north koreans failed to show up for a planning

meeting in singapore last week more what's going on there dr. evelyn is joining us, former deputy assistant director of defense and director of convention on weapons of mass destruction and terrorism. quite the title. >> yes >> thank you for joining us. what a day the same official, white house official quoted, said nothing short of denuclearization is seen as a successful outcome how likely is it, really >> i think, kelly, the ultimate goal, denuclearization, is something at this moment not likely if anything, it'll happen at the end of a long process, taking months, if not years, which is fine as long as the north koreans freeze their programs. i think the markets are

responding relatively in the u.s. -- i don't know about asia, in particular, the markets see something in the letter that trump wrote and in the north korean statements in that there's hope for negotiation if they freeze the program, it's not clear they allow people -- look, they destroyed, you know, the mountain they did testing, but the thing was caving in on itself any ware. it was useless >> right >> that's not some grand gesture that they are making how can question expect them to freeze the program >> i agree i was there in 2008 before they blew up the plutonium cooling tower, so the north koreans are expert at high profile demolitions that do not amount to much, and as you said, they had to do the demolition of the mountain for environmental reasons, probably china was pressuring them on that as well. that does not mean that we can't get into a negotiation with them

about freezing their program because there are incentives for the north koreans to come to the table. they want the world to recognize them as the regime in control of north korea. they do want economic assistance, certainly, and they are still under these maximum sanctions, technically we'll see how they hold up because in is going to be the real test now for the administration in the short run. >> we just wants to bring eamon in, more details and headlines from the trump administration. >> reporter: white house official briefed reporters, that briefing just broke up, and i can tell you the white house official walked us through sort of a litany of disappoinments over the past week in terms of the negotiations with the north koreans saying that a delegation from the united states was in effect stood up in singapore last week when they showed up to start preparing for that summit, which was scheduled for june 12th, saying the united states simply had difficulty getting the north koreans to pick up the

phone on their end of the phone line they spoke earlier, but last week, it went radio silent, officials said, and also saying that the president dictated every word of the letter that was read out from the white house this morning from him to kim jong un of north korea, this white house official offering relatively bleak assessment, even though the president suggested maybe the summit could still be on, this official saying, look, june 12th is in ten minutes, he said, sort of joking way of referring to the fact there's just not much time to reschedule this, but saying the president hopes to continue to have dialogue and hopes to continue to possibly plan for some kind of future summit the president, himself, today seemed to leave the door open for that with kim jong un in terms of what he expected from the north korean leader. this is what he said at the white house earlier today. >> looks --

>> reporter: looks like we don't have that sound. what the president said here earlier today, he hopes kim jong un takes the opportunity to lift his country from poverty and do the right thing here, ultimately, it's not clear, though, where the negotiation goes from here now, kelly. >> thank you very much doctor, how do you think this affects the u.s. negotiations with china as well that are ongoing and the tensions from everything from the south china sea to trade issues. >> it's not encouraging. they were not helpful with regard to north korea because incentives are not there now they are pressured by the president on tariffs and by the penalty gone on the south china sea issue, and so they are not feeling like they need to help us out on north korea, but i do think we have to remember what the president proposed with the north koreans was backwards and upsidedown the best way to prepare for a summit is lengthy negotiations between the professionals.

i think if we can go back to that level of diplomacy between the state department officials and the nuclear experts on our side and on the north korean side, and also include our japanese and south korean allies for starters, then i think we can get to a point where you can have a summit. but the president -- >> doctor -- >> the president should be the closer >> yeah. how he thinks of it too. doctor, thank you very much for joining us >> thanks for having me. >> mike, what's your two cents on this? >> i think the way it nets out from a market perspective is there was nothing to price in or get excited about in march when we throughout there would be a summit, and nothing now other than it's a long term process in a long term stalemate. unless it spills into new stance on china because the market wants the china trade story to go away. >> yep >> so it wouldn't mind if the white house folded it's probably not going to happen, but i think that's the only way it becomes relevant to investors. >> nancy, question for you, it seems like tech companies to

agriculture, concern about ter rafs - tariffs from china or trade disruptions is the larger issue. >> yes we lived the story for three months, appkelly, and i think there's a link between china, trade negotiations, and north korea, and i think -- i would not be surprised if this were coordinated activity, and this is what we've seen from north korea historically, and, also, from china, so mike's right. we all want this to go away. look at boeing as a approximapre stock regained what it lost in the wake of the traid wde wars, don't know that that's sustainable at this point, i suspect not. as we go through the summer and volume, you know, declines, we're going to see a lot more of this -- these kinds of days, where we just grind along. >> yeah. >> and that's what we'll see, yeah, i don't know what to say other than that. >> bill, if this does not disrupt college educated women,

your trades are on, right? >> it slows down the nobel peace prize for trump. >> yeah. >> i don't know if that disrupts college educated women, there's a theory on that, too. we have to go, we have to go bill, nancy, thank you very much for joining us >> thank you >> thank you >> earnings on auto desk are crossing the wire, meg, how do they look? >> for the first quarter, looks like a beat for auto desk on earnings per share three cents ahead of estimate. revenue at $560 million for the quarter versus analyst average estimate of 538 million. the q2 and fiscal year guidance is light on the eps side for the second quarter forecasting 13-16 cents, just short of analysts' looking for 18 cents there for autodesk. could be why it's down, kelly. >> thank you shares down 3.5% we have more news on harvey

weinstein. julia has that, julia? >> kelly, that's right, wnbc learned harvey weinstein is expected to turn himself into authorities tomorrow to face charges related to alleged sexual misconduct. those charges are also expected to come tomorrow, and, of course, those charges follow a probe by the manhattan district attorney's office as well as the nypd this is all just coming a day after reports that a new york state grand jury convened to hear evidence in connection with sexual abuse allegations a grand jury was presented with evidence related to possible financial fraud. he denied wrong doing and no comment from weinstein's attorney back to you. >> thank you stay right there, everybody. more is ahead on the closing bell next up, reports the government goes after bitcoin. looking for price manipulation is the currency trading free, fair, and safe plus, cnbc goes inside the world of illegal short term

rentals. and who is responsible unwelcomed guests coming up. the "closing bell" with kelly evans is live from the new york stock exchange returns in two minutes. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point.

that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

we got retail earnings for you, starting with the gap, it looks like a miss for the company if the first quarter, at least on the earnings line, coming in at 42 crepts a share, versus estimates of 46 crepts, revenue stronger than expected at 3.78 billion, versus expectations of 3.61 billion, and store sales light at 1% growth versus 1.7% growth as analysts expectations. breaking down the brands gap owns, old navy up 3% on comps, missing estimates of 4% increase, banana republic up 3%, better than expected, a flat performance they looked for. gap global is minus 4% in the first quarter versus expectations of minus 2% there, and gap is down almost 8% in the after hours. the company reaffirmed full year eps forecast over to ross stores now, coming in as a beat on the revenue

line, and 3.59 billion versus expectations of 3.54 billion on the eps line, harder to say at 111, however, they included a 17 cent tax benefit there. may not be comparable to what they looked for at 1.07. store sales at 3% versus 2.9%, but the stock is down 5% on a light q2 forecast, back to you. >> thank you grand theory of gap is everyone needs three pairs of khakis for casual friday. >> that was the first lull this is not good enough for what investo investors' expectations are. clothing got a tail wind gap is guiding to fiscal 2018, current fiscal year, up flat to up slightly, and so the traders thought there was upside >> including athletics, now the new version of everybody needs three pairs of yoga pants. >> they are still hoping for

further rationalization that the store would shrink is down a little bit more, but gap brand not doing well as, you know, is a negative surprise. >> shares down 7.5%. we'll watch that meantime, reports are that the department of justice opened a criminal investigation into possible price manipulation of bitcoin and other currencies crypto is not moving on this what's going on? we have john, from morrison and forester welcome to you how serious a probe do you think this is? >> another sign that both the justice department and regulators are looking to treat the digital world the way they long treat the other markets in some ways, it could be long term better for trading once people have more security in the market market, they use it to trade >> i heard the crypto bulls make

that case today, john, but not everyone gets off this scott free, and defining narrowly what all the activities are and which are above board, does that shut down other activity? >> a great point there's been a big debate and argument out there over what are some of the things securities regulated by the fcc are they commodities the cftc when is justice going to start investigating aggressively and starting to bring cases, and we're starting to get answers. just this morning, i was up doing a panel with one of the top enforcement regular laters at the scc, and she made it as clear as day that one of their top priorities right now is digital coin offerings in fact, we were talking, supposed to talk about a whole different topic, and she stopped it just to make 100% clear that everybody knows out there that they have not yet seen a digital coin offering that in their mind not operating as security.

>> wow >> well, that's clearly the area that seems closest to the regulators' mandate and that they are motivated, it seems, to try to shut down when it comes to the trading of the currencies, themselves, it sort of is a paradox on the one hand, as an asset, whatever it is, you actually know how much is owned by which identifiers, right not necessarily names, but a number it's incredibly concentrated, the wealth that's been created in something like bitcoin is in a a handful of hands, but trades so much elsewhere. is the focus strictly on how the orders are handled and how it's transacted realtime >> there's three types of enforcement issues already one, if reports are true, this is the investigation we're hearing about today, and this is people manipulate the market, essentially, spoofing, washing,

taxes used in other feels, but here, great volatility, no regulation, you are seeing that type of price manipulation i think we all know it's out there. there's a race to see which exchanges and how voluntarily people can put in better practices to make consumers feel more secure that they are not getting hoodwinked because someone else manipulated the market that's one a second trend you already saw justice department prosecution taking down one of the exchanges that was saying essentially, hey, there's money laundering going on here. you are -- >> right >> you are essentially operating money, and the third trend i see with a lot of clients right now is that they are having massachusettsi ivmassive hacks in their system, so bad guys overseas intrude on the page, and it looks like a nation state intruder at the end of the day, they are not stealing intellectual property or disrupting the company.

some are fortune 500 companies what they are doing is crypto mining, using free bandwidth they get hacking into the companies' servers to make money from the bitcoin market. you'll see enforcement in at least those three areas. >> right crazy. john, thank you very much for joining us appreciate the extra information. >> thank you >> former assistant attorney general. >> micron is the best in the s&p today. fast money traders say whether that stock can keep rallying coming up. first, it's no. 12 on this year's cnbc disrupters list, ceo of oscar health explains how the company is shaking up insurance despite the president's repeal of obamacare's individual manda mandate. that's still to come keep it right here

welcome back, an earnings alert, deckers outdoor beat the quarter, coming in on earnings per share at 50 cents versus expectations of 19 cents, and sales also had estimates at 401 million versus expectations of 376 million, and the ugg brand up 6% in the quarter to 257 million in sales company also giving full year guidance revenue coming in ahead of expectations at 1.925 billion to 1.95 billion, ahead of what analysts looked for, and deckers is up 6.4% back to you. >> thank you i caved, mike, i had been getting the knockoffs on amazon,

you know, like, 20 bucks a pop, and wore through the heels, i said, all right, so i got the ugg ones >> amazing how long ago uggs were a fad that was doomed by the way, deckers -- >> i think most people still consider it a fad. >> they had a massive drop >> they've come back >> all the way back up >> no, i'm firmly a fan. anyway, cnbc released the top 50 disresu disrupter list, and ugg is not on it, but one health care company is looking to be there joining us here to discuss what's next for the company is mario, cofounder and ceo welcome to you >> good to be here, thanks for having me. >> look, you are all over the place, you spend a lot on marketing, don't you is that a big part of the budget >> interesting thing, quarter of the members we have is word of mouth. we're in the subways, telling the story, but people like it, and so they tell friends and

family, and that's how >> important to improve experiences with consumers because dealing with health insurance is the worst task out this what are the ways you make it manageable >> u.s. health care was both too complex and costly the insurance company in theory lowers costs, and no one likes the insurance company. we are a consumer friendly company, much more engaging around modern technology, and we give you free medicine, two-thirds of members, can handle the medicine -- >> telemedicines means i can facetime with a doctor >> click a button, and a mobile doctor calls you, chats back, share pictures, these are our own doctors, and they book appointments for you as a follow-up, hand you back to your team, the six person team, would be -- one is a nurse, they watch data, they come when you're in the emergency room, they help you handle that experience and so on. >> what's the profile of the

customer at this point obvious, most likely are going to be very comfortable with technology, but what is it in terms of age, employment status, buying their own insurance out of pocket? >> depends on where we are we sell in texas, san antonio, and in new york, a lot of freelance programmers, designers, you know, cookie businesses, and so on, and that's the clientele here. >> cookie businesses >> exactly >> bakeries and so on. >> we got a long running cookie thing. >> everyone needs great health care we provide that, and people tell friends and family, that's how we get businesses on board in other estates, we have an older population, san antonio, people are 45 years old on average, complex conditions, obesity, diabetics, but the beauty of the system, you can manage your health care through the app, technology, or through the team, humanized outreach, build up trust with us before you utilize health care, and

that's the secret, i think in which we deliver great health care >> what's the greatest challenge this year? >> a very complex system, health care, and people are vendors in hospitals that used to kind of quarterly data transfers and stuff like that, uber app did not update in realtime, you are wondering if you stand by the car, rebuilding that takes a lot of technology rebuilds we are doing that, still in the process of turning it into a great experience, we'll pay claims in three days on average, shorter than most insurance companies and will be close to realtime, that's a big shift towards the way the system should be working. regulatory side, it's complex segment of the economy to navigate, certainly, as well, dreaming of a situation where we can get a member know them and stay with us for 50 years, advise you today how to live your health care, and so you stay healthy in 50 years >> they have to like you a lot to stick around for 50 years

dpl ye >> yes >> congrats again. >> thank you >> joining us after making it on the disrupter list the full list from no. 1 spacex to no. 50 sofi it's on cnbc.com let's take a look how we finished up on wall street dow was down 280 at the lows after the president this morning announced the north korean summit talks were off, but we recovered the dow closing lower at 75 points, three of the four major averages lower, and russell with a tiny gain time for a news update with sue, sue >> caller: kelly, thank you very much here's what's happening at this hour, everyone russian president putin welcoming french president ma cron to st. petersberg saying moscow regrets the consolation of the north korean summit and macron hopes the u.s. and north korea continue to work towards denuclearizing the korean peninsula. wnbc reporting that harvey weinstein is expected to

surrender to authorities tomorrow morning for alleged sexual misconduct. it is in connection to an investigation by the manhattan district attorney's office that weinstein allegedly sexually assaulted numerous women in a preliminary report from the national transportation safety board, the report says uber disabled the emergency braking system in a self-driving suv involved in a deadly accident in arizona. a woman was hit and killed in that accident in march and president trump pardoning the boxer, jack johnson, first african-american world champion, surrounded by his great grand niece and sylvester stallone convicted in 1913 for the man act, traveling across state lines with his girlfriend who was white. you are up to date that's the news update at this time, kelly, back downtown to you. >> great stuff sue, thank you very much >> uh-huh.

>> sue herera. chips and semis chugging along in may, up 10% fast money trade on whether it's too late to cash in on the group, and president trump talk about spygate, but there's a new one involving amazon g details later to come on the "closing bell. ♪ ♪ (baby crying) ♪ ♪ don't juggle your home life and work life without it. ♪ ♪ and don't forget who you're really working for without it.

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welcome back, down day in the markets, but micron up 2.5%, and semis climbed 11% in the last month joining us to discuss that, cnbc "fast money" traders, karen, tim, good to see you >> kelly >> karen >> yes >> chips >> chips >> it's been quite the move. do you like them here? >> i do. i hope the move's not over, i'm long intel i like the name, data center growth is what's driving it for them, and a lot of others as well, and i'm a little bit concerned, though, getting a little bit sort of, you know, there's a lot of excitement in the space, obviously, micron was, their news well-received, and they talked about the -- that -- we did not see a plateauing of data center growth, so that was really good, even if hand sets do plateau, there's other drivers there, so that is good, but i also kind of remember when these things

traded like cyclical companies, and these are not so cyclical or cheap. >> yeah. tim, i was going to say, we talk about it as a group, obviously, you know, karen hit a coup of of them on the value side of things relevant to talk about semiconductors as a big group anymore? >> it is think about the market and what we had over the last two, three months with the pullback, and found this legs, i think, semis actually led look may 1 to the present, semis outperformed s&p by 7.5%, going 13%. i think it is seen as the cyclical story karen points out, intel is largely flat to the s&p whereas intel is treated more as a defensive play, as a megacap tech play, a balance sheet play, whereas look at a qualcom not included in the group often, a very interesting story of course, we know the concern around royalties and nxpi, but at 11 times, it's very interesting. >> all right couple ideas there, guys, thank you very much. >> thank you >> thank you >> tim and karen, in 20 minutes,

catch more on "fast money" at 5:00 p.m. eastern. more and more cities are creating laws to curtail short term rentals, and morgan has that story, morgan >> kelly, that's right, we are inside the world of legal short term rentals, and who is behind emth our investigation on air bnb is coming up after the break. ron! soh really? going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95...

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capitalize on the on the wild west, and they come in no. 3 on this year's list this means growing pains, and morgan has air bnb unwelcomed guests, a cnbc investigation into the clash between illegal short term rentals and restrictive regulations, morgan? >> that's right, valued at $31 billion, air bnb is worth more than of its publicly traded hotel rivals home sharing is here to stay, but lawmakers across the country are moving down to crack down on rentals against the law. one major issue? the company's creating and managing illegal short term rentals, which are rented out via sites like air bnb they say they worked with cities across the world to craft reasonable regulations, but not in miami beach where the fight has no end in sight.

on the streets of mieami beach, we roll up on a group of vacationers, tell-tale signs of illegal rental, two units advertised on air bnb have lock boxes and key pads do you live there? >> we do >> how long? >> we rented on air bnb. >> for two nights through a host named rachel, the same rhing in this listing online. >> are you surprised to hear it's not legal here? >> yeah. it's something that's posted for people >> it's more interesting when this officer calls rachel. >> i was just speaking with the occupants here, and they said they rented your unit. the city has an ordnance that prohibits short term rental. are you aware of this? >> they are actually my guests are my friends >> they told me -- >> they are staying in my apartment. >> are they staying here for free, is that what you're telling me >> yes >> i can get them on the phone

to talk to you right now because they said they paid approximately $950 for the weekend rented via air bnb >> oh, no, no, no. let me check with them again hello, sir, you guys got a free apartment. she said you're free and don't have to pay to stay there, is that true? >> that is not true. >> she's on the phone, maybe she wants to give you a refund >> reporter: she's associated with a company that's well-known to city officials, they are a new york based management company that rents properties and leases them versus air bnb and other rental platforms to short term tenants both she and the property owner, staying in a downstairs unit, were each issued a violation notice which carries a $20,000 fine the owner did not want to talk to us. the total fines amount to

$700,000 at four properties in miami beach. >> these properties on air bnb -- >> reporter: we wanted answers from the host, rachel. >> i'm sorry about that. i'm really sorry i can't take this call right now. >> the coo and co-founder says her company has since got out of the leases where short term rentals has not allowed, and has not paid the $700,000 in fines >> lawyers are resolving that. they feel like it's unconstitutional the way they are fining there's many, many different groups fighting the city, it's not been resolved. they are not collecting the fines that they are issuing. >> are you going to wait and run out the clock and see if laws change in miami beach? >> right now, we are just not accepting any homeowners in miami beach. we get about 30 to 50 requests a day to lease property on our website. >> do your investors know you

have outstanding fines in miami beach? >> investors are fully aware of everything gone on, we stuck our necks out for a lot of owners, and we are tackling a really difficult problem in general with our property and with basically accepting single family homes >> are you saying you'll continue to break the law in properties until - >> i don't say we want to fight and enter properties now knowing that the law has changed, and we're not allowed. >> confirming that rachel is still one of the hosts >> she said renters were friends not paying anything. which was false. she lied about cocompliance. are you aware? >> no. how do you know it was false i let friends and family use our places >> here's the violations here's the customer receipt. >> yeah, i mean, she probably was put on the spot, and she was probably scared, and i didn't --

i was not aware. >> this is an increasingly, and and about illegal short term rentals. >> this is not just happening in miami beach. >> it's not just happening in miami beach, that is where a lot of our documentary and reporting did take place, but we have spoken to city officials in many markets across the country, and whether it's new york, whether it is miami beach, and whether it's boston, l.a., et cetera, there are issues that are arising. i will give you the example of boston because in terms of what critics are calling the commercialization of the short term rental markets, the fact it's becoming increasingly common practice, in boston, you are seeing a big dispute right now going on which is looking to prohibit investors who do not live on a property from being able to rent it out, and air bnb said the proposal would negatively impact tourists,

business travelers, those who want to make extra money from home sharing, but, again, this is playing out in a number of markets across the country >> i wonder about the hotel industry >> absolutely. >> how they fit into this. >> listen, there's a reason a company like air bnb is on the cnbc disrupter list, six years in a row it's been disrupting the t traditional leisure and travel industry, and so i did actually sit down with air bnb's head of global policy, chris lehane he thinks miami beach hasn't had a serious desire to engage with airbnb on resolving the issue because based on the issue that's come out, there have been a number of reports looking at the hotel industry over the years, that the city is effectively working with the hotel industry is what he said of course, we also got a response and the american hotel and lodging association didn't mince words on this either they said instead of supporting common sense regulations, airbnb has opted to deploy a massive obstruction campaign of dirty

tactics, deceptive messaging and personal attacks against 234iane who raise as concern i think the bottom line here when you're looking at miami beach, for example, however the law got there, the law is there, and based on reporting, the law is being broken. and as you saw in the clip we just showed, really, the losers in that scenario are the guests who are getting knocks on the door from code compliance being told they're in an illegal rental and have to relocate. >> especially as it prepares to go public, how it's going to deal with all this. >> certainly i should note that airbnb says and it is working with hundreds of cities around the world, not just in the u.s., but around the world to craft regulations and comply with those regulations. but it's some of these major markets like miami beach, new york, boston, et cetera, where this continues to be tense >> all right with the late into on it, morgan, thank you very much. morgan brennan brings us that investigation. if you're concerned that alexa is listening to every word, you might be right

when crypto expert will explain why the doj's crkdn acow on bitcoin is a buying opportunity, he says stay with us you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions to help them reach their goals. being ready for wherever life leads. that's the power of pacific. ask a financial advisor about pacific life. with dell small businessout your technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.

there is another spygate afoot, this time in portland, oregon, and it has to do with amazon's alexa didi >> hi. a family is claiming their alexa device recorded a private conversation in their home and the conversation was sent to one of their phone contacts. the report coming from a local tv station in seattle. the woman telling the station that every room in her house was wired with alexa device, and the family was alerted to the problem when they received a call from one of her husband's employees. he's the one who received the

audio files. he told them to unplug their alexa devices because they had been hacked. whiefl it wasn't a hack, the incident clearly appears to show a malfunction. the woman contacted amazon repeatedly, and that an amazon engineer investigated, acknowledged the problem and apologized amazon takes privacy very seriously. we investigated what happened and determined this was an extremely rare occurrence. we are taking steps to avoid this from happening in the future consumer groups are already responding to the report a spokesperson for the group consumer watchdog says amazon owes it to the company to investigate and report back to the consumers. we have multiple calls in to amazon, kelly. we have not heard back back to you guy. >> aditi, thank you. mike, is this going to gain traction as more people become aware of the story so apparently she asked the colleague, well, are you sure this is for real it was really us

he said yeah, you were talking about hardwood floors. yeah, we were. >> so we don't actually know if it was a voice command that was misinterpreted by alexa. >> somehow miscustody. >> or if it's just a glitch that sometimes this happen. >> amazon also tried to say maybe the system kind of created this who knows. but if it shows that this is even possible. >> it's the larger issue for amazon, and will justify everybody who is like white house has held off i just don't feel comfortable with this in my house yes. >> i don't know if it's the reason i'm resisting it. i don't see the upside as kind of the disruption of it. >> i see the usefulness in terms of the voice commands. and i think that's why it's been so successful. but the privacy issues are going to get bigger. >> sure. >> especially after this one. >> if you're only talking about hard wood floor, though. >> what you worried about with the after hours movers right after this on "closing bell.

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whatever they went through, they went through together. welcome guys. life well planned. see what a raymond james financial advisor can do for you. here are your after-hours movers we'll start with gap that is plunging after missing earnings estimates because of disappointing same store sales growth down more than 7%. ross stores also down. weaker than expected same store

guidance, and it's down more than 5%. and deckers outdoor is soaring after profits surged on strong sales of ugg boots ugg is here to stay. >> it keeps defying the doubters and really continuing give and take with the stock reaction but the underlying story seems okay >> that's true overall looks okay ugg is here to stay. it's not a fad it's created its own category. love it or hate it, just like crocs. >> i dent get it >> that does it for "closing bell." thanks for tuning in, everybody. "fast money" starts right now. "fast money" starts right now, live from the nasdaq market site overlooking new york city's times square i'm melissa lee. only the desk timothy geithner, karen finerman and dan nathan. tonight on "fast," no ko is a no-go. cancelling his meeting with north korea, sending stocks a wild ride today. but there could be an unlikely winner from the fallout. we'll tell you it is and bring

you the latest plus, the doj launching a crypto crackdown on bitcoin price manipulations. is bitcoin really being manipulated? how worry shod investors been? ran nue ner will be here to weigh in