leadership and technology. energy is a small percentage of the market >> not a lot of movement in interest rates, actually, such a driver, so that's probably where we see flatness. >> relief there. >> thank you so much for watching have a great weekend >> "closing bell" starts right now. ♪ . it's friday, time for "closing bell," and today could be the highest volume days of the year we'll explain why. >> i'm brian sullivan, opec strikes a deal, but enough to curb crude to the recent rally >> we're in chicago, the president turning up heat on european auto makers, telling them build here or face steeper tariffs. what it means for the global auto market coming up. and i'm kelly evidence evens. is that a plastic straw? you may not use them much longer and what businesses are trying to do about that

the "closing bell" starts right now. ♪ >> i think it was better the second time, you know, not so questioning about the straw. >> you like that story >> i really do >> so much so you rewrote the headlines to put it in there >> you have to you're not going to be here to talk about it. you don't like paper straws. >> drives me mad don't give me a straw or a plastic one. >> do you feel guilty using the plastic straw? >> no, in general. >> do you hate the ocean >> no, i'm good at recycling in general. >> pretty good at recycling. >> balancing things like that, use of plastic bags, only the straw, don't want it to dissolve in the cup >> good man. all those stories, but first, a check at the markets, dow higher for the first time in nine days, trying to avoid a losing streak. has not had one in 40 years. the biggest gain in two weeks. two of the four averages are positive

the russell is negative right now. kicking off our closing bell exchange, matthew is here, and rick santelli at the cme in chicago. matt, starting with you, eighth days of declines, important to end the week in a positive session or could have proliferated further >> a sigh of relief going into the weekend, especially with the volume we're expecting on the close today, so hopefully we'll maintain it. you know, we see a change in the leadership group over the last couple days, and that is encouraging. if tech rallies, oil rallies, and maybe we get the financials to go with it after the stress test, and, you know, maybe we get real, you know, wind behind the sails of the market. >> what do you think >> there's pressure on the markets, geopolitical events, reading the tweets and what's beginning on you have higher oil prices ending on a positive note is psychologically important. i don't think it's about whether it's eight days or nine days down i don't pay attention to that, but ending a friday on a

positive note tends to be an important thing. >> positive as well in terms of data from europe which has been rare recently, allowing the european risk assets to rally as well >> yeah. you know, there's been some good data points bur, but in my mind there's a slowing there. we can debate to the extent of the slowing, beut the fact is bund yields settled off 6 partnersh6.5 points on the week, widening the spread in the treasury, widest since 1989 that's significant, especially in a time we try to handicap the difference between our speed and speed of europe and the rest of the world. i continue to think this is going to be something that haunts europe. it's going to affect many markets. especially what's going on in italy, now, granted their 10-year is not 3%, but it's getting a little crazy it's not far away. when that acts up, it tends to

affect the high credit spreads for instance, if bund yields trade under 30, it's almost impossible not to see our curve drag down a bit. i think the issues are important when you have a fed, rightly looking at the positives in the u.s. economy, wanting to tighten it up, but the unintended consequences how it fits together is going to be confusing. we're basically on changed in the week, 2s, 10s, 30s, and dollar index is only off a quarter of a percent, it closed at 94.75 last week >> wondering, matt, on that rebalance today, too, with all the volume is this just a one-day event, or what are you guys looking for? >> it's not a one-day event. it used t ed to be more along te lines, but now it's a week long event. there's an index and rally into this may be sol off today in anticipation of a buy side, but what this does is this gives portfolio managers an opportunity to balance anything they are uncomfortable with going into a slower season, so

that's what i would anticipate, huge volume, an opportunity for people to get out. >> let's talk about individual stocks one of them, apple, still happy with that? >> yeah, very happy with it. it's a cash cow. we look at it as a solid cornerstone stock for the portfolio, opportunity to raise the dividend, enormous buybacks, repatriating dollars to the u.s., and at the end of the day, doing a great job managing the product line they are not done innovating that's the headline people talk about, but to us, they are very much a part of the big psychcyc with a long way to go. >> earnings and the trade fears, fedex, but you like that >> we love it. we think it's a winner all around you know, the war with amazon in terms of how much they pay the postal service is going to help fedex. they're constructed differently than ups in the sense fedex own their routes you don't have the type of union risk or strike risk that a company like ups does, and great

earnings outlook for the company. >> rick, we talked about this already, but going back to the dollar and strength, today's paired back a little bit, but it's interesting, actually, the oil prices rose as much as they have with the dollar >> yeah, no, the commodity-dollar relationship obvious to all investors, but, you know, let's not underestimate the commodities certain have a life of their own that stretches out well beyond the effects of the reserve currency denomination, and that gives us good clues with regard to opec. markets are smart. leadup to the big events, investors have a good idea that's why they are appty-icallimatic or counterintuitive when the event actually occurs. >> to that point, anything in the energy space you move on today now that the move today is to bid up crude and a lot of the oil names as well.

>> yeah. so, i mean, i think very broadly speaking, we're not huge on the energy space there's a couple stocks in the space we like like chevron, but those are yield plays and defensive plays more than anything else. i'd say ewe tiutilities are goio see some jump up and -- probably a little early right now still, more of a third, fourth quarter. >> goes higher >> yes well, not necessarily oil prices i think they are range bound i don't think wti is going to go much about 70. seems to be stuck between 65 and 75, in that range for a broad band on it, but utilities are under pressure in the last few weeks. i think they rebound in the third quarter. >> yeah. >> okay. great stuff, leaving it there. >> thank you >> thank you >> we should say that oil rally flattened the close today in europe big oil names rallied a lot, but look at the week to date performance, the dak down 3% for the week >> wow

>> tough week over there, particularly the german auto names. >> president trump lashed out at european auto makers in twitter as tariffs go effect in bourbon, motorcycles, and orange juice. it's not a laughing matter, though, phil lebeau? >> reporter: not at all, especially if you're a dealer selling an imported dealer from europe, and the dealers are nervous with what they heard from the president this morning. this is the tweet. he said, how would you like to pay a 20% tariff on imported autos. based on the trade barriers placed on the u.s. and great companies and workers by the european union, if these tariffs and barriers are not broken down and removed, we'll place a 20% tariff on cars coming into the u.s. build them here. just to refresh your memory, in terms of what the tariff situation is right now, anything built in europe shipped over here, 2.5% tariff. anything we build as far as autos and ship over to sell in europe, that's 10% tariffs

for europe, the advantage is clearly in their favor they have a nearly 44 billion dollar auto trade surplus. that's because they are sending all of these high dollar, high profit vehicles and when you look at how many they are selling here, it's about 6.7% of total vehicle sales in the united states. that's how it breaks down. if you look at all the autos sold last year, over 17 million, 1.15 million came from europe. all of the german auto makers had a rough month. stocks down again today. there's a genuine fear, not only among auto makers, but the dealers here in the country that they could see higher tariffs, and if you're trying to sell an s class or 3 series or any vehicle, and it's not one that's built here in the u.s., you are worried. that's why the shares are lower. guys, back to you. >> phil, that figure you showed us, 56% of the cars sold in the u.s. are made in the u.s., even

some of the 56% are german auto companies as well. >> yes, they are are, correct. correct. volkswagen, bmw, mercedes have plants in the u.s. and supply vehicles to the u.s. focus there on the right, that 6.7%, those are vehicles built in europe, sold here in the u.s., and that's really the heard of that 44 billion dollar trade surplus when it comes to autos for the europeans. >> phil, great stuff thank you very much. >> we can't go without asking him, real quick, phil, chevy, the blazer, they are bringing it back >> yeah. we have not seen that since 2004-2005. last night in atlanta, general motors showed us the new blazer. now, this is far different than the previous one the previous one was build on a pickup truck platform, really a bulky, heavy suv this is a cross overutility vehicle, meant for those people in the suburbs, and they are looking for more utility general motors is hitting the sweet spot of the market

they are not fools the demand now is for crossovers look at the sales for gm, up 23% for crossovers they are in demand gm is hitting that look at shares of gm, the blazer will be built in mexico. some people will be saying, well, why not build it here in the u.s. they have set up their system so that the mexico plant that they have there, there's capacity, and they want to utilize capacity some of the blazers, a lot of them, will be imported from mexico gm's exports from mexico in the first year to date, guys, up 39%. it continues to build down there. >> wow >> that's not going to change unless we see something change with nafta >> yeah or another tweet, but the bronco was brought back and the blazer that's a good looking car. you're the car guy, but i think it's good looking. >> no range rover sport, though. >> it's a blazer phil, what are we going to do with him

>> not meant to be, wilf, not meant to be. >> it's a good looking car >> that was my opinion >> candy apple red, thank you. boosting oil output by 600,000 barrels a day, lower than anticipated so oil is spiking on that decision >> joining us on the hone is helima croft, good evening to you in vienna. >> caller: good evening. >> were you surprised at the extent of the rallin the oil price? crude's up 5% despite this change i guess it's because it's slightly underrealmed? >> caller: i think the signs yesterday raised expectations. when they came out with an imbig yo -- ambiguous statement that caused markets to see it's not as big as expected and the fact they were able to come together for an agreement last night, the iranian oil minister dramatically walked out

of the monitoring committee meeting, and people thought we might not get any agreement today, that opec would bust up, so i think the fact they were able to come together and the supply add does not look enormous is why we have a rally. >> yeah, that was interesting, a precursor to today's decision. no now the market's thinking, okay, not as much supply as we might have, sending up the oil price, dramatic move today, but does it keep going higher, do you think? >> caller: we have to see in terms of, you know, what the additional follow-on statements are from opec. what we see in terms of potential trade wars i mean, i think the trade war stories are potential negative for oil, but really in terms of the positive, the thing i focus on, the bullish catalyst, the iranian oil minister came out today talking about the fact that european companies, key companies, halted purchases of iranian crude. he does not expect that buyers of iranian crude will get any waivers from the united states

so we could be looking at a situation as we go up into the back half of the year where we have more iranian barrels coming off the market at the same time, venezuelan production is dropping u.s. output is bottlenecked because of the infrastructure issues so i actually think that we could be coming into the situation where we are tight barrels going into the back half of the year. >> helima, do you buy into the argument some of the iranians are making that this is opec responding to the demands of president trump, or is this opportune tweeting by the president that's kind of worked in his favor this time >> caller: i mean, i think trump's intervention in april very much changed the direction of opec policymaking we have a situation in april where it looked like they were going to roll over the existing cut, not make modifications at the june meeting, and trump dramatically intervened making repeated requests on saudi arabia to put more barrels in the market, and saudi arabia said we're responding to

consumers, we hear you, but the key consumer in the united states, donald trump, he really drove the policy change. >> all right, thank you for your time >> caller: thank you so much as we mentioned, 5% pop. >> what was the thing you talked about the other day? a spritz >> yeah. you get that in vienna order what you want. well, maybe not -- >> a lot of fruit juices in vienna >> no orange juice based on tariffs. >> no, well, yeah, but it's more apple and -- >> 20% more expensive. anyway, head over to cnbc.com for more on energy including the key level one analyst says the xle needs to break in order to be off to the races. that's on cnbc.com right now still ahead, the fed's stress test results approaching the second round next week, and why investors in two major banks

could be concerned about the outco outcome. a known event in the market could have an impact on trillions of dollars of investments coming up. reach out to the show on twitter, facebook, or e-mail us. closingbell@cnbc.com back in two. ♪

you shouldn't be rushed into booking a hotel. with expedia's add-on advantage, booking a flight unlocks discounts on select hotels until the day you leave for your trip. add-on advantage. only when you book with expedia.

welcome back looking at the percentage gainers in the dow today, and if you hear this twice, it's twice as nice. as mentioned, chevron with a nice session with oil prices up 5% today couple others up there as well, 2% gains shall we talk about the russell rebalance today? the 1,000 and small caps 2,000 are getting rebalanced on the close. this is an annual event causing huge volumes and price swings, even in stocks like apple,

microsoft, and jpmorgan. >> we have the index provider behind today's rebound, so, bob, take it away >> thank you it's the triumph of the index. talking for years as everybody talks into passive funds, index funds, etfs, and today we have a massive rebalancing. what can we expect at the close? >> well, you know, if we do our job right, bob, no one's going to know that much happened we want it to be a very smooth transition really, what we are doing with the annual rebalance, we want to have the indexes be an accurate representation of what's going on in the real economy that means that once a year we have to update things. >> but you guys -- sorry to interrupt you -- >> sure. >> you can't affect whether all the other investors as bob talked about have to buy and sell and move the things around massively as a result, so when you -- you know that the stocks will move even if you just try to make the tweaks >> really, what we're doing is accounting for the fact that some stocks have gotten bigger, some have gotten smaller, some

now belong in the bigger russell 1,000s, and some are downgraded to the russell 2,000, and, you know, et cetera. from our perspective, the key is to keep the indexes representative of the asset classes that the end investor is tracking, and we do that with the annual reconstitution today. >> that doesn't mean that's not price swings in theory, the individual stocks do not have price swings, but it sometimes does happen. >> sure. there's no question it's a big day for a lot of the companies, especially some of the smaller ones, but, you know, we fry to communicate in a transparent way for the markets and minimize volatility the percentage of stocks turning over in the russell 2,000 or 1,000 in any given year is relatively small average investors are not going to see a big shift one way or the other. >> the fact we had companies doing stock buybacks as of late, that influences how big the rebalance is, so which stocks are likely to be most affected, like apple, for example? >> serwe see the top five stocki

the russell 1,000 index. the large cap index or all tech related. fiber technology outright, and fifth is amazon. that's a lot of people thinking that as tech technical technically, it's the consumer discretionary sector, but the tech sector is the winner this year in the recon. there's more wait after today than before. >> phil, we don't think about apple when we think about the russell, we think small caps that's where a lot of of this has to do with index funds, so big now, if you want small caps, buy a russell 2,000 tracker. if you want the s&p, so, when people do that, that's what causes these prices, right, bob? you talked about that. >> talk about a good example here is grubhub. they had an amazing line it was 43 a year ago, and it's $110 now >> wow >> going from the russell 2,000, small cap index, into the russell 1,000. at the close today, alex, there's going to be a lot of people whoa are indexed to the russell 2,000. they sell grubhub, and those in the 1,000 buy it

the question is, is the amount of people buying and selling going to be equal or not >> right >> there's money for sale at the close. grubhub is for sale at the close because there's more money index to the russell 2,000 >> we do work ahead of time with the partners to ensure it's a seamless transaction and match -- >> do investors know they are aa ware of this >> yeah. one of the responsibilities is that you provide this information out to the public to everybody at the same time when we talk about our partners, we talk about the etf providers, index fund providers, and idea of communicating ahead of time is to they match these big buy and sell orders so you don't have chaos at the close. >> it would be awful if they didn't do it already >> yeah. we put up the screen, 10% of the russell 2,000, the bench mark for small caps, is controlled by the index funds. that's why this becomes an important event. >> yeah. >> this keeps going up, essentially. >> $9 trillion 9 trillion benchmark to the russell 2,000, active and

passive. a trillion is active money >> 10% figure would be higher or lower when we talk about s&p 500? >> probably have to ask s&p on that one >> i wondered because russell is smaller caps >> generally, higher >> yeah. >> wow >> and more money in that situation. >> we have more -- we have a lot of active participation in the small cap space, and we value partnerships with our passive partners as well as active managers that we work with >> for you, a good day today, no price mauves >> yeah. we want this to be the biggest headline of the day. they like boring >> that's right. >> we don't. >> they like boring. >> sorry to disappoint >> no, bob, let us know what happens. thank you very much. >> thank you up next, abc is bringing back a new version of "roseanne" without her. the new reboot and strategy behind the move. we heard the buzz, artificial intelligence and virtual reality, but we got a top asset manager to tell you

how exactly you can play those themes in the target best. that's coming up here on the "closing bell," don't go anywhere aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com.

welcome back, watching dow up nearly 200 points today, reversing the eight day slide now, or at least trying to dow and s&p positive, but nasdaq and russell not the case >> cut me off for a minute they did. >> it was not an accident.

ha-ha -- >> oh, now, a month after cancelling its hit "roseanne" reboot, there's a new spinoff without the controversial leading lady julia has the details from l.a., julia? >> the series has the working title "the connors," ten episodes have been given the green light for this fall and looking to grab that same audience airing the old show's time slot at tuesday 8:00 p.m. roseanne said, quote, i regret the circumstances that caused me to be removed from the show, and i agreed to the settlement so that 200 jobs of the beloved cast and crew were saved, and i wish the best for everyone involved the new show's cast members including john goodman issued a statement saying, quote rg, we m back to tell stories of challenges facing a working class family today we are happy to have the opportunity to return with the cast and crew. this was the highest rated

series in the broadcast season there are big questions about how much of that audience will return this move should help abc hold on to some of the $60 million in ad revenue projected that ro roseanne would have brought in and saves 200 jobs among the cast and crew. >> a big risk, right i can't imagine they would put a series like this, basically untested into a prominent role, if they were not hoping it could salvage the whole debacle, right? >> well, remember, kelly, this show is less untested than an entirely new show. they had a hole in the time slot where roseanne would have been, and now they know that there is a dedicated fan base to some of the other characters so i think they are probably going to be playing on the familiarity of the family, of the show when they bring it back, and, really, trying to remember that the show is not just roseanne, but a family of people around her, so i think it'sless of a risk than starting

from scratch, and hopefully they are able to hold on to the viewers. remember what a huge hit it was for broadcast tv we'll see how it turns out in the fall >> julia, do you think mr. iger weighed in on the decision, all the attention a little bit elsewhere? >> oh, he is probably very busy these days, but it sounds like he was very much involved in the decision to cancel the show initially. this is a big deal for them. i suspect he was probably consulted. >> a big deal, but this is a bigger deal. >> thinking about, you know, how often, how common is it to see a successful spinoff of a very successful show? i'm sure, you know - >> do you remember the joey spinoff of "friends," not good >> exactly there's a lot that have not worked granted, same people, but -- >> has all the same people other than one very important one, kelly, and there are some examples of the type of thing happening, especially in the

'80s and '90s. this is different, though, in that it's about the same family. it's not like it's all of the friends and joey went it alone i think they are going to try to use the fact that this is such a controversial thing that was in the headlines, as publicity for the show we'll see if the buzz of what we are talking about now and over the past month translates into buzz for the show. comes down to how good the show is >> julia, great stuff, thank you very much for that don't be too concerned about the spinoff. we have to keep "closing bell" going without you for five months >> oh, yeah, i don't - >> for childbearing. >> i'll be like joey time for a cnbc news update. >> here's what's happening, the u.s. ambassador to the u.k. robert wood johnson tells british broadcaster, sky news,

he doesn't find it difficult to represent president trump's controversial views in britain >> i'm a believer. you know, i know what, you know, the rationale behind his election and why people voted for him, so when i have to explain what he says in his twitter or what his actions are, it's -- i tend to look down the road where he wants to take everybody. >> palestinians are continuing the weekly protest for the third month in a row along the israel-gaza border, throwing rocks and flying balloons and kites with burning rags tied to them towards the israeli first shortage of co2 caused a beer drought in russia for the world cup, and now the government called on the gas producers for help after warning of chicken shortages c02 preserves drinks and fresh foods in europe. that's your update at this hour. oh, my goodness, what is the world coming to. >> the reminder of the value of

amoan yum gas, right who knows that much about the industrial supply pipeline if it did not cause shortages in chicken and beer >> exactly affected the world cup lucky we didn't go to the world cup or go home because there's no beer at the moment. >> and carbonated drinks, soda >> it's a problem. >> all because of a plant maintenance? >> yeah, crazy >> thank you >> yeah. >> finding that story and how it snuck its way in there >> yes >> and scores coming up? >> yes drinking the carbonated drink with any kind of straw i don't recommend. >> why >> it's too airy it's too -- you know, it doesn't -- you got to -- >> really? >> yeah. >> one of the benefits of drinking a soda through a straw is saves your teeth. >> i know. that's why i get a straw, but, like, no, no >> we should save it because that story's still to come >> yes, it is. >> lucky viewers moving on, next guest says we're in the midst of a modern industrial revolution, and

companies embracing technology like artificial intelligence are the winners. >> let's bring in dan from fred elder management, the ceo, dan, thank you for joining us, and with everybody so focused on the existing technology winners, tell us who you think should be some of the picks for the future >> well, thanks, kelly we're in the midst of a modern industrial revolution based on the platform of internet, mobile computing, big data, and software, of course, and computer power we see artificial intelligence increasingly applied across a wide range of businesses one example would be in the medical field, a company called m metadata, the leaders in trials already, but adding on top of the data base they have, analytical capabilities to try to determine, you know, better ways to run the trials, better possible drugs to combine with other drugs, and offering solutions to pharmaceutical companies all over the world >> that's a health care company.

you also have in the auto industry, a name for us as well, right? >> right so, you know, our analysts are scouring every single sector, and analysts are renown for skill and intelligence, and in the auto industry, severely challenged across the traditional manufacturers. there's two trends, automated driver assistance systems, self-driving systems as well as, of course, the move to electric vehicles, but at the forefront of this is a company called app key. they are providing a lot of electronic systems, connected systems that will be both vital in electric vehicles as well as in the increasingly automated driving cars that we'll have in the future >> and if we talk about the big cap tech names we all talk about often, a lot of them have an a.i. assistant of some form, whether it's ibm or alexa at amazon and so on and so forth, which of those stands out in your eyes as being the leader? >> well, wilfred, a great

question in terms of both, you know, artificial intelligence computing as well as voice recognition because that's one of the key battle fronts there we'll start talking to and controlling a lot of things in our lives with virtual assistance, and actually, you know, between ibm, amazon, google, it is really hard to say right now which one is in the lead, you know, they have strength in different areas. amazon leads in consumer applicatio applications, but google has a huge advantage right now in self-driving cars and voice recognition technology is extremely good on the mobile devices as well. it's hard to say among those three, all really doing a lot of advanced work in those areas >> finally, dan, are the chinese competitors here, potentially going to be the ones leading the way in terms of ones with the best technology or most investbinve investable opportunities >> chinese companies like

alibaba are investing heavy in artificial intelligence and machine learning, but what we're going to find is because these app kilications are about understanding behavior and interacting with people, the climates, if you will, cultural differences will make a difference american companies lead for the american consumer and american businesses, but the chinese are likely to lead in their home countries where their culture and practices dominate >> thank you very much leaving it there, dan from fred elder management we got just under 20 minutes -- over 20 minutes before the close bouncing back, dow had eight sessions lower in a low, but up today, and s&p is up, and nasdaq and russell lagging. the stress test results, two big u.s. banks that could have investors on edge. >> later, shares of software company red hat dives in today's session. why nay are down almost 15% right after this at the marine mammal center, the environment is everything.

we want to do our very best for each and every animal, and we want to operate a sustainable facility. and pg&e has been a partner helping us to achieve that. we've helped the marine mammal center go solar, install electric vehicle charging stations, and become more energy efficient. pg&e has allowed us to be the most sustainable organization we can be. any time you help a customer, it's a really good feeling. it's especially so when it's a customer that's doing such good and important work for the environment. together, we're building a better california. >> welcome back. s&p 500 hanging on to about a 10 point gain today, and here are the sectors with energy leading the way, up better than 2% after the opec decision this morning

did not increase supply as much as the market anticipated. oil prices up 5% today, just under $70 a barrel materials and telco higher, two sectors in the red today are technology and financials. >> shares of redhat falling after reporting earnings after the bell yesterday the software solutions company gave revenue forecasts short of analysts' expectations due to the strengthening dollar, sending the stock lower by a sharp 14% as things stand. tonight, jim cramer is talking with the redhat's ceo at 6:00 p.m. eastern time. don't want to miss it. quick clarification. the reason i don't like drinking soda out of of straws is because of the can, a can of soda with a straw -- fountain drink is another story. >> if it's in the glass -- >> it's the fact if it's out of a can, i don't want to drink it out of a plastic straw >> why >> i don't know. >> what about if it's poured

into a glass >> that's okay >> that's weird. >> i know. this mystery stock is trading at an all-time high revealing the company and why it's rallying today when we come right back >> we still got the straw discussion to come >> oh, yes >> oh, good. this is just another tease >> yes >> because i don't know. >> that's in the next hour >> what? i'm missing it >> i'm sorry >> well, i'll just tweet in my thoughts of your discussion. still to come, a deep dive in the financials after the fed results, what you need to know about the round two coming up next week, and, of course, financials, the sector in the bottom of the s&p 500 today. bottom of the s&p 500 today. back in just a a couple minutesy from the sun and wind, we're storing it. as the nation's leader in energy storage, we're ensuring americans have the energy they need, whenever they need it. this is our era. this is america's energy era.

nextera energy.

(birds tweeting) this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. this is not the cloud you know. this is the ibm cloud. the ibm cloud is the cloud for smarter business.

♪ ♪ welcome back to the "closing bell," 15 minutes left of trade, a look at the individual stocks to watch today, first up, carmax, our mystery stock we teased earlier company trading at all-time highs dating back to the february 1997 ipo. this is on the heels of an earnings and revenue beat this morning, stock's up 13%. >> i wonder if they sell the new blazers. >> the website having a look for a range rover sport.

>> oh, gosh. >> the other thing that's interesting is why people buy a used car outright -- >> the maintenance for these, the range rovers and land rovers, the transmissions on those things >> financing deals in the u.s. versus europe for a used car is attractive, it's, like, why bother >> what's that cost in the u.k.? >> i don't know because i'm not an expert on chevrolets, but - >> why looking at the traverse >> looking for a range rover, but it did not come up, and i got sent to the 2015 model of the traverse >> carmax, take note organic products maker received an offer for protein business from pilgrim's pride the sale could amount to $700 million. up 2%, pilgrim's pride dipped a little bit today about 15 minutes to go into the close. dow's up nearly 200 points, hanging on to a nice gain to break that eight day losing vehicle, and s&p up as well, and

nasdaq and russell lower morgan stanley had stress capital levers which are more lower -- which are lower -- tongue tied myself there >> you're just trying to get too precise. >> i didn't want to phrase it wrong, exactly >> yes >>ryg cnga ntce tintohae seen mid sentence we'll discuss that and make sure every comment is accurate after this short break

with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase. show of hands. let's get started. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. we're not on an island anymore. [ roaring ] what could go wrong? you good? yeah, you? [ roaring ] [ screaming ]

nope. rated pg-13.

welcome back to the "closing bell," we mentioned the winners in the do the dow, and here's the losers jpmorgan, the biggest with a drop of 1.4% today, and home depot, nike, and microsoft are weaker >> the 35 largest u.s. banks cleared the first stage of the regulatory hurdle yesterday passing the feed's stress test showing they have enough capital to withstand recession, but goldman sachs and morgan stanley had stressed capital levels and leverage ratios lower than many rivals slr, bank's total leverage, total capital as percentage of total assets next week, we get the comprehensive capital return

plans and outright pass or fail, but if we look at the xlr levels for some of the banks and morgan stanley and goldman sachs in particular, you see how much lower they are and close to the all-important 3% level needed for next week, so they are above that, which is why people are overall relaxed, and look at the capital levels as well, goldman sachs is lower that's why they are trading off a little this week i think you would have seen a bigger trade down today if you had not seen goldman already pair back the buyback plan which is what they did after last quarter so people would have thought, gosh, they have to do that they wialready did that so no price reaction >> of course goldman and morgan look worse in this case because they are more trading businesses, more exposed to the kind of market selloff and recession that -- is that a fair point or something about the result that, no, they need to do more to bolster themselves >> it's a fair point and at minimum, required minimums are

lower, but the ultimate minimum for all banks is 3% for the slr, and they are closer to that, so it is somewhere in between the other point i just say with goldman sachs that a lot of people are pointing to today, if you compare their capital levels to december 2017, the comparison, and in this adverse stress scenario, goldman drops off in the lending business. the fed said there the lending there compared to some of the other big banks is more risky, and i think that is -- >> that is interesting >> something they picked up on >> to ensure banks keep lending in a downturn, right goldman turned itself more into a lending business more than it was. >> got a focus on that, and, again, both banks came out with the statements that said, look, this does not impact our capital return plans, and it is different next week to this week, and we'll have to wait and see until next week. that's why they are trading off 1.6% for morgan stanley, and goldman sachs stopped the capital buyback plan after last week's results so it was not a surprise, but, again, barely

lower. >> barely. trading down just a couple pennies. up next, we'll come back with the closing countdown >> yes and after the bell, ups averting a major strike we told you about that we'll have the latest and what it means for the company coming up on the "closing bell. what about him?

let's do it. ♪ come on.

this summer, add a new member to the family. at the mercedes-benz summer event. lease the glc300 for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. introducing e*trade personalized investments professionally managed portfolios customized to help meet your financial goals. you'll know what you're invested in and how it's performing. so you can spend more time floating about on your inflatable swan. [ding]

welcome back to the "closing bell," four minutes to go this friday afternoon, dow up 262 points, ending that eight day losing streak it had gains for all the indexes, nasdaq lower, russell lower today, but in the end, a better end to what's been a tough week. a quick look at the sectors so far today, and we see that energy big rebound comes to that in a moment, telco up, materials up, tech is the only one suffering, hence why we have seen the nasdaq a little bit lower. let's talk about the story of the week, though, so, yes, we've got a gain for the dow today, but it will end the week as a whole down some 2.5% there's the dow for the week no, sorry, with today's gains, down just shy of 2%, but still a negative week. sectors for the week as a whole, industrials suffering, trade fears, utilities gaining as a boring risk averse sector, which is the story really there, and let's look at the week to date of oil bob pisani is joining me,

getting a big jump today because of the opec meeting, not increasing production as much as expected, 5.6% up, and then one week to date chart as well was dax, a nice bounce today as european equities, but down 3% for the week as a whole, which highlights even though we got better declines this week, europe suffering much more >> yes we got a little bit of good news the manufacturing numbers today, the pmi for europe better than expected, and, you know, europe's in a slow down. their earnings numbers, economic numbers generally are well below ours that's a little bit of good news europe up 1% the thing about this week, the damage, the industrials down 3%, materials down 3%, and there's your trade. in fact, semiconductors also rolled over a little bit, and rolled over a little more today, and i think the thing to watch here, over the weekend, there have been unsourced reports all day that the trump, some people in the trump administration are in favor of restarting the

negotiations with china on tariffs. that showed up a lot in the commentary this morning on the trading desk, although you get somebody's name to say a high ranking official, this is what we're doing, no, we don't have that looking for clarification, that would be market positive, but waiting for the russell rebalancing, big volume at the close, final prices, some reweighting, a lot of money moving from the russell 2,000 into the russell 1,000, and, of course, had is what we call that triumph of the index all the etfs and all the people buying passive funds like the s&p 500, the russell 2,000, they want to own those funds. today, they are being rebalanced all of the stocks in the group apple already a little bit for sale, reducing the share counts, jpmorgan reducing the share count, and grubhub going from the 2,000 into the 1,000 because that stock, grubhub, was $40 a year ago that's been a monster. the market capitalization is up dramatically, and congrats to

them they are a big cap stock bluebird, exact sciences, a lot of the biotech companies, they are -- they are seeing some share count changes as well. they are going from the russell 2,000 into the russell 1,000 it's like a graduating class in a way. >> we're going to have a lot of volume into the close, just over a minute left, and dow up 130 points, and let's talk about another thing this week, so, basically flat coming into today, soft today, a bit of reprieve, has the dollar strengthed, played into the market >> the trend is a real problem because we've seen the dollar just rise. this is just a temporary thing today, and we've seen a number of companies, redhat today, coming out specifically saying the dollar is a problem for us, adjusting numbers as a result. oracle as well >> they are on "man money" later. >> look for earnings commentary now to be the dollar to be central. >> as we approach the close, 30 seconds left, holding gains for

the dow, but slipped significantly, up 111 points we were up 160 earlier, but we are still looking at gains for the dow, for the s&p, and the nasdaq and russell are lagging somewhat there goes the bell. ringing at the new york stock exchange here is texas light gm, and the nasdaq is -- somebody else -- i have not got them. ftse russell, there we go. the dow is up 117 points kelly? thank you. welcome to the "closing bell", everybody, i'm kelly evans, the russell with the rebalance, generates biggest volume, and in the last couple years, the biggest volume the market has seen the dow had a begin of just 119 points, managing to break the eight day losing streak, but we did come into this the last coupling minutes of trading

there. the blue chips close, and s&p up 5 points, 2754, nasdaq weaker, shedding a quarter percent today, same with the russell, and russell is 1685. now, the price of crude oil serged nearly 6% after opec modestly increased output today. not as much expected whether the price is climbing, going over 70 a barrel, and what does that mean for the summer driving season we'll get into all of that coming up. joining me on the panel today, barbara from north bridge wealth partners, and evan newmark on a friday welcome to you the winner on the week was verizon, caterpillar the loser, taking it on the chin as the market is concerned about trade wars over in the s&p, darden restaurants the winner, and redhat the loser, dropping 14%, in fact, a lot in the session today. evan, broadly speaking, how do you think the markets are holding up here? >> treading water. >> yeah. >> treading water.

largely because of the tariff situation. you know, there's another one of these trump trade skirmish tweets earlier today >> this morning, yeah. >> it's weird, usually the market prices these things out, but if you don't know what the white house objectives are here, you don't see the end game, that's hard to model scenarios or see where it goes, and that's why people are just treading water. >> curious thing to me is about the tweet this morning and what happened this week is that he said, you know, the eu does not drop car tariffs, we slap a 20% tariff on them a couple days ago, we had a break through where eu auto makers were saying, we're happy to get rid of tariffs on both sides, u.s. has to get rid of the tariff on light trucks and doesn't want to, but is that a sign the strategy could work how are markets supposed to think about that >> the problem is that the people that trump is negotiating with, they don't know what the end game is, so his style of negotiating, which is, you know, i'll keep on asking for things until you say no, and when you

say no, i don't know when i'm going to say yes, and i'll keep you offbalance, and the problem is we have multilateral institutions to deal with this very situation, but he wants to go the bilateral way, which is i think creating all sorts of problems >> phil lebeau has more on this, in fact, and, phil, again, it shows it could all move forwards a win-win kind of outcome or maybe they just get upset about the tweet today. >> the trump administration has the hammer right now, kelly because the german auto makers, y european auto makers need the u.s. market. you will understand why president trump tweeted this this morning he wants to to say, really, you want to put down retaliatory tariffs? look what we do in response. based on the tariffs and trade barriers long placed on the u.s. and its great companies and workers by the european union, if the tariffs and barriers are not broken down and removed, we will be placing a 20% tariff on all cars coming into the u.s.,

build them here, there is a huge, huge trade deficit with the europeans and the europeans enjoyed a huge advantage with us how much of an advantage well, just look at finnish vehicles alone, there's a trade surplus of $32 billion last year, and with the $7 billion from the auto parts union. that's the european union with a 49 billion dollar auto trade surplus. they do not want to lose that. that's why they are worried about the trump administration going forward with the tariff. the german auto makers build in the u.s., but that's suvs, a big part of the market, but that's not all the sales. for bmw, volkswagen, the ceos of those companies push for the elimination of tariffs because they are worried any increase in tariffs would hurt

their sales here in the u.s., and that's why you see the stocks -- look at this, this is a horrendous week. kelly, some stocks are at lows not seen since 2016. >> wow that takes you back. phil, thank you. phil le bow there. barbara, does that mean there's an opportunity in some of the names? if you think is a all about does it get worse before it gets better or just a lot worse >> that's what the market is trying to figure out that's the question. industrial stocks, last week because of the trade uncertainty, i happen to think rationale minds preveal, using the hammer, and we're not going to hurt our own economic self-interest, however, opportunities are opening up some of the names, cat, boeing, worst case be in the stock, i don't know when they turn, but there's opportunities happening weekly >> are you in there yet? >> no, no. >> we also had bank of america and they said calculations suggest a trade war could lead to a significant reduction in

growth for the first time, we're seeing economists have warned this could lead to recession. d >> yeah. i mean, like i said, it's uncertainty. nobody, not even the white house knows what the end game is, how this really plays out. and the thing that regot actually from the oil market this week was certainty, and we saw what that did for the oil price, kind of put a floor under oil prices the one bit of stability we saw this week was with the opec decision, outside of the opec, you basically have whether it's china or it's the u.s. or europe, you have a lot of uncertainty. there's a view held by the white house which is, oh, we tough is out better then them, chinese stock market did better. >> it's true >> yeah, but the leaders in china do not look at the chinese stock market as a proxy for their policy >> no. >> whereas the united states, it is a proxy for our economy >> that's fair, but in china, if the main thing is to keep people employed so they are not out

protesting against the government, and the only way to do that is to ensure that the sectors are humming the way they have been in the last couple years. they are not humming anymore they have to do something. i don't know what that is. >> all i'm saying is you are dealing with -- it's a bit of apples and oranges the u.s. stock market, if the u.s. economy goes into the tank, the u.s. stock market or before it does -- the u.s. stock market will react china is operating in a different economic context with a different economic - >> does it hurt the u.s. it's a bigger threat to the chinese. >> i think it hurts the economy because it hurts confidence. you can't put a number on that it's a very hard thing to actually figure out. >> i agree with that because the risk right now, no, it's not hurting the market, but the uncertainty created, at some point, you know, cnbc, you did a quarterly survey of the cfos, 65% said the current trade policies will hurt their

companies. 20% will have a negative impact. that, we have earnings to offset that, but it's not going to take long before ceos step back, they don't know what the policy's going to be, and they stop committing and stop hiring we're not there. we're not remotely there, but if it drags on. >> that's fair this is the time they invest, the tax cuts, breaks from that, stronger economy >> one of the big problems is even if the white house, we know they are -- there's not unanimity in a point of view, and whenever you go into a negotiation, you like to have all your forces aligned, and that's just not the way trump operates >> no. nothing by the book, his own book oddly effective a lot of the time >> oddly effective until ineffective. >> that's right. >> it's one of those things. works until it doesn't >> or doesn't work until it does >> yeah. >> opec, there was clarity there today. the kind that pushed oil prices

higher ministers agreed to boost output, but more modest than expected the market looked for a million. what do you think? just a one-day reaction? crude prices wti under $70 now. >> it kind of -- look, you don't know with opec everybody -- if anybody can predict what the price of oil was going to be, they'd be a rich person in a short period of time >> yes >> meanwhile, guys in the business, hedge funds closed up shops in the last couple years% >> i lost my ear piece% i didn't know what was going on. anyhow, this puts a floor underneath you how long remains to be seen. could be for a few months, though >> 70 is the new floor >> i think so. >> barbara >> i agree with that i've been skeptical up until now. i thought they would increase production more. now, in the past, they have been on a little going around the production pull. they have been disciplined the unknowns are the usual we don't know how much shale comes on we don't know, you know, a lot of things about supply, but for

you, demand is strong worldwide, and that ties into the view of the economy, and it's not remotely over. >> the weird thing about the opec decision and trump's trade squirmishes is that all of this stuff in a certain direction would suggest inflationary pressure the bond market does not believe it one bit still have a very flat - >> oil prices, you're talking about something that could push up, other than it acts like a tax on consumers more than anything >> you'd expect with a strong economy, low unemployment, all the stuff would suggest in a world that existed 20 years ago, that this would lead to inflationary pressure. it hasn't and the market doesn't think it will. i have not paired down anything since -- i'm hoping for a second run. i don't know i don't know it could run to new highs, but i don't know >> barbara, your favorite place to be right now? >> in energy >> or in general >> in general, i'm a broken record on this you know, i like the secular

high growers, a problem in the large cap tech, huge runs, netflix is up, but i'm not selling, i would not necessarily adhere >> all right >> i pick on the industrials a bit, you know, because they are down so much somewhere in here. >> all right they can hang there with netflix, maybe thank you, barbara, appreciate it very much still to come, redhat the worst performer today after issuing weak guidance. fast money" trade whether that's a flat trade ups shares struggled this year, but the company is delivering for investors today. we'll explain why in just a moment and we want to hear from you reach out to the show on twitter, facebook, or e-mail us at closingbell@cnbc.com. at closingbell@cnbc.com. back in two. ♪ all night long... is that lionel richie?

let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪ need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now. so you can be confident you're getting the best price. giddyup! kayak. search one and done.

dow adds 119 points, snapping the eight day losing streak russell and nasdaq lower, though oil staging a rally today after opec agreed to raise oil production, and brian sullivan is in vienna with the details. >> reporter: kelly, and interesting and, at times, a weird day. the building there, the capital

of opec in austria, bottom line is this. there's a bunch of crazy math going around they reduced the cut across opec nations and ten others reduction of the cut means more oil goes into the market everybody's math is different, and the media hammered the opec folks trying to figure out the exact math we did not get an exact number here's the thing basically, 600,000 to maybe close to 1 million barrels a day will be added to the market within the month that's what you need to know the reduction of the cut is $600,000 to a million barrels a day. some countries, venezuela, iran, mexico, are simply not able to increase production. that's probably why oil prices rose today because maybe they were disappointing traders, did not get the size of the cut expected, or they simply do not believe that this increase will take place to the level that many people think. either way, there's more oil coming into markets in the

months ahead >> all right, brian, thank you very much, what's the decision mean for gas prices now? we will ask tom from the oil price information service. hello, tom, and does this mean pump prices are going higher >> no, i don't think it means that they are going dramatically higher i think we're looking at a summer range between $2.80 to $3.10. if not for the meeting and response in crude oil -- and, by the way, domestic crude oil today was up $6 or $7 a barrel in the basin from tuesday. aside from that, gasoline prices would have dropped probably ten cents in the next 30 days. >> so instead they stayed the same and, listen, we're talking now a big increase over last year. the average we're showing there, about $2.87 a gallon last year, $2.28 good thing the economy's strong, but how much higher can gasoline

prices go? >> probably go a little bit higher and not really impact consumer spending, at least on fuel, and i don't think they'll have an impact in the driving season where it manifests itself is after labor day. people have an internal meter knowing i spent $1500 on gasoline this year and cut back on spending then, particularly since we don't have shopping seasons like we used to years ago before e-commerce. >> yeah, and to your point, evan, you see this more of a floor. >> i do. i do and it's -- it has less to do with the amount of new barrels that they will be adding basically, what they're going to do is ensure compliance. the saudis and russians tell everybody else, we'll ensure 100% compliance going forward, less about the amount of barrels pumped and more about making sure no one sneaks in barrels the market does not anticipate >> how does that set you up

later in the year? the supply is not there, it's going to tighten the market. >> it's weird. i can't -- you know, you have the guests on, like, oh, this means -- the oil market is really hard to tell what it actually means you know, as someone who bought energy stocks back when the oil price was down in the 30s, my gut feel on this is a little bit, you know what, looks relatively cheap then, and now it is higher, much higher, and interestingly, the stock prices have not risen in the way that the oil prices fluxuated they are up less than the actual price of oil >> insight on that, tom? >> yeah. i would agree with that. i mean, the oil markets and equities prices, particularly for big oils, are reflecting much lower crude oil prices. i think, again, look at people who have production in the basin, that price is up $7 in, like, the last 72 hours or so, so it is a good situation for

producers. i think refind ers do well becas of good gasoline demand, and, by the way, the previous guest mentioned inflation or lack of it i think we'll see inflation later this year, not in gasoline, but diesel and jet fuel continuing through 2019 >> and that'll be a challenge for companies. >> yeah. this whole inflationary question, i'm not saying -- i mean, the market's saying forget inflation. it's over, done with despite low unemployment, despite low current gas prices, it's like, yeah, there's a 35 basis point spread between the 10-year at 2.9% and 2-year at 2.55 that's flat. >> no, you're right. tom, thank you very much >> thanks, kelly we've got news on netflix now. julia has the story from los angeles. julia? >> kelly, netflix letting go of its top communications

executive, john freeland, top communications role at netflix overseeing media and content publicity. he just tweeted, i'm leaving netflix after seven years, leaders have to be beyond reproach in the example we set and i fell short of that standard insensitive in speaking to the team about words that offend in comedy i feel awful about the distress it caused in a company i love and i want everyone included and preerc appreciated. i feel honored to have built the team and part of the collective adventure. we reached out to netflix, and they directed back to the tweet. no comment yet on who is replacing him in the role. netflix shares trading down 1% guys, back to you. >> do you know what he said, julia? >> i do not. i asked multiple people, and i was directed back to that tweet. it seem like it was something that was in just one conversation about -- seems like it was something in one conversation specifically about comedy, obviously, netflix did a

number of comedy specials. i'm not sure what was said it -- everyone directed me back to the tweets. >> all right communications chief out >> look at the shares. >> more than doubled this year crazy. >> yeah. >> it is up next, ups avoiding the largest american worker strikes in decades details in a moment. might be about inflation, too. plus, the last straw for plastic straws find out why more and more companies are turning to environmentally friendlier options and winners and losers from the move later on the "closing bell.

ups one of the better performers today after reaching a deal to avoid a massive worker strike morgan >> kelly, that's right after months of negotiations, ups and international brotherhood reached an agreement for a new five-year deal including pay increases and also lays the ground work for increased weekend deliveries and potentially, although ups has not announced this, potentially sunday delivery, so the creation of a new weekend driver job. ups saying it's, quote, goal has been to reward the companies' ploys for their contributions to the success while enabling the business to be flexible to meet customer needs each of the goals have been met in the new agreement adding its well positioned to grow and meet needs of its customers this deal covers roughly 250,000

workers, mostly drivers and package handlers, making it one of the biggest collective bargaining agreements in the u.s. keep in mind, they still have some details to be worked out. the two parties are also still negotiating an agreement for about 11,000 ups employees, which the company says they are, quote, confident, will happen, and the agreement has to get ratified by employees, but this is -- when it gets approved, means we're thwarting ups the potential for a strike which had gotten to that point would have been the first in decades. look at shares of ups. off the highs of the day, ending the day up a quarter of a percent. kelly? >> how much, morgan, do we know how much wage hike they are getting as part of the agreement? >> part-time workers increase, and full-time workers get an increase, and there's a special category created with specifically with wages around the weekend work as well

>> which is a sticking point thank you. we talked about the inflation thing, evan, that story, and, you know, they are able here, to say, and they have a lot of leverage, you know, we see teachers across the country push for increases. we see now the teamsters get wage hikes some point, it's all got to add up to more inflation, better wages. >> you love the wage data. >> i do. >> i know you love that stuff. you love the jobs report it's not showing up. it has yet - >> that's why i love it. it's interesting >> where is it where does it show up? 250,000 workers. >> end of the day, they argue it's just starting to show up because you have to look at the broader unemployment rate, which is fair. i get it there's people outside the labor force and they are slowly coming in, and said you just got to wait, it's coming, it's coming, it's coming. >> how many years have we had the discussion >> probably eight. >> yeah, i mean, it seems crazy. >> i know. >> maybe it takes a, you know, maybe it takes an oil price shock or something like that to bring back inflation >> i think it's coming

labor market is too tight. cloud stocks hit hard after redhat had a hard week how to play the cloud concerns later, global shipping industry is bracing for a potential trade war between the u.s. and china k. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. it's a smart way to eat lunch in peace. sweet, oblivious peace.

welcome back, closing on wall street, dow up half a permit, snapping the eight day losing streak, had not had a nine day losing streak in 20 years. nasdaq was down, and russell was down three time for a news update now hi again >> hi, kelly this is what's happening now president trump hit back against the controversy that's enveloped the white house over the child separation of illegal migrants the president highlighted the plight of americans whose loved ones have been killed by people who entered the country illegally. >> we're gathered today to hear directly from the american victims of illegal immigration you know, you hear the other side, but you never hear this side you don't know what's going on these are the american citizens permanently separated from their loved ones >> secretary of state mike

pompeo hosted jordan's king for a working lunch at the state department president trump welcomes the leader to the white house on monday the thief caught on camera at a missouri convenience store stealing while dancing or dancing while stealing has been caught arrested for jumping across the counter at a gas station to snatch lottery tickets the whole time, she showed off the dance moves. tiny dancer. that's your update for the hour. >> i don't know what to think of that >> i'm going whacky on a late friday in the summer >> i understand. that story is whacky have a great weekend, thank you very much. the other big stories of the day now, no other convenience stores were robbed here's our rapid recap stocks are on the move, futures indicate a higher open as the dow snaps an eight day

losing streak. >> decision day for opec oil ministers meeting now behind closed doors >> what they announced today is effectively a reduction of the reduction. it did not say we're increasing output they were very, very keen on making that point clear. >> tomorrow marks two years since the u.k. voted to leave the european union >> so far, the economy slowed, but is still growing and has not collapsed. >> supreme court handed down another decision today this time on wireless location tracking. >> chief justice says we decline to grant the state unrestricted access to a data base of physical location information. >> president tweets moments ago about possible tariffs targeting autos from the eu. >> if these tariffs and barriers are not soon broken down and removed, you'll be placing a 20% tariff on all cars coming into the u.s. >> the source of the president's ire, imposition of retaliatory tariffs from europe in effect

today targeting peanut butter, orange juice, cranberry juice, and bourbon. >> making waves this week? >> yeah. >> what do you think of the online sales tax decision? >> devil's in the details. i understand in principle. you know, but amazon stock did not go anywhere, and, in fact, everyone argued, oh, good for amazon it's hard to -- it's hard to read into these things i don't know what it means >> you're right. again, would have had a bigger impact in the past, but privacy one today, too, a lot of stuff happening. redhat with the worst day since 2006, finishing down 14% after its earnings after the bell last nights, and lowered the second quarter and full year guidance, and other software stocks got hit on this, including slunk and sales force. of course, they had a run this year is that run over down 7%. "fast money" traders are here to talk about if. what do you think of the impacts? >> it's interesting. we're talking about cloud, but this is specifically more of the

middle ware applications area thinking about cloud, and i think it's interesting because bigger in the cloud space for sure are the big players, amazon and google, and otherwise known as alphabet, and both actually have larger businesses we just don't think of them necessarily as much, trading at valuations more attractive i don't think redhat fell quite far enough because the valuations have gotten ahead of themselves, and i think it could go even a little bit further lower. >> do you think the sales force selloff, brian, was justified? >> well, so here's what redhat said, which could be extrapolated to the other industries is that number one, it was a strong u.s. dollar. all of the cloud players, no matter what you sell, are impacted by that, and, number two, talking about competition or conforming to the sales cycling of oracle and ibm, which tells me that this is a highly competitive market we've known that already to mike's point, there's a highly competitive market with high valuation, and it starts to say, wait, is there a basic head wind here?

u.s. dollar. then i start to get concerned. >> well, is that too much to make from redhalt, mike, just unique to them in. >> i think it's more red hat than anything else i do think that slunk and i do think players like botch, that we have not mentioned, areas that they are ahead of themselves, but, remember, you're still dealing with a space that's growing at 40% a year, top line, and just cloud in general and these applications, and all the middle ware with it are ultimately going to end up profiting from that business, but, you know, current valuations, do not chase them here >> are you bailing on anything, brian, because of this >> i'm not bailing on in addition i was not in the cloud stock so nothing to bail on >> ha-ha, what were you going to say, evan? >> it's the classic problem of growth stocks. they come down to valuation. hit a bump in the road >> right >> stock down 15%. stocks like sales force or red hat up probably, oh, 100% in the past year or so, and i mean,

these stocks have the runs, and then sometimes they end up like oracle they have gone nowhere the last two, thee years. >> that's a bigger problem than the fact they are up 100% and drop 15% >> no, no, it's interesting. you see what happens, you know, there's a lot of issues for oracle >> the model, yeah >> against sales force, but what happens when a growth stock stops growing is they get flat i think if you did back three years or four years on the oracle space, you see it it's been flat >> a lot of the same >> gone nowhere. and red hat had the huge run >> all right you see -- >> valuation >> all right >> it's not over, but saying valuation is -- like rump's policy, valuation does not matter until one day it does >> all right michael, brian, thank you, guys. >> chemical weapon >> see you in minutes. red hat ceo is sitting down with jim cramer tonight on "mad money" to talk earnings results and if there's color to add to this at 6:00 p.m., and "fast money" at 5:00, there's a dow

stock about to come back he'll reveal that name mcdonald's could be more environmentally friendly first, china vows in a trade war to the end, that could upset trade routes looking at that impact and what it means for commerce next experience lexus safety system+ standard in the 2018 lexus es and es hybrid. lease the 2018 es 350 for $339 a month for 36 months. experience amazing at your lexus dealer.

with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about the details. fine, i obsess over the details. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase.

trade tensions between the u.s. and china heat up with chi china's state media saying it's a symptom of paranoid delusions after the president threatened to hit another $200 billion worth of chinese imports of tariffs earlier this week. how could the increasing tensions impact those who make a living transporting goods between the two countries? joining us now is the cnbc's senior editor, and author of "dynasties of the sea," welcome, so surreal, lori, congratulations. >> thank you >> i don't know how you do all this with everything else you do for the company, but this is the topic. already people you spoke to in the book are really concerned about where this trade war is going. >> they really are the people i spoke with in the book are the ones with the foresight and vision to really create the path of trade we know today, and shipping tends to

thrive on uncertainty, and drives up prices >> huh >> there's a very fine line. they understand why trade talk is going the way it is because the president would like to have fair trade, but there's so much to go, like how far can he go before the 50 plus years of relationships within trade are impact the impacted >> yes, they'll slap tariffs on our products and every day is a new tweet, maybe it's eu autos, but what makes them sit up and go, wait a minute, this is not just a war of words. this is really hurting business. >> well, what really hurts the business right now is not the words. it's what they call the nontariff tariff that china is imposing already on our exports. for example, this was well documented a couple weeks ago, the chinese were actually asking ford to dismantle, take out a car, and dismantle eangine part to see the serial number

that takes time. >> basically it's a hassle >> right slowing down exports at the port, means time is money when it comes to shipping that's a double whammy people pay fees, considered late charges, and anywhere from $75 to $150 per container. >> huh >> there are hundreds on these ships. >> this is costing us even though we do not see it as a tariff >> exactly >> charging now when it comes to certain products they go into the chinese holding tanks, and so not only are the ship owners paying, like, tariffs if you will, late fees, but paying chinese and customs cargo containers so the chinese - >> what this is about is law of unintended consequences. people go, oh, 10%, but it's not. >> is it unintended if the point is - i guess it's more about is it going to be effective for the

big picture goal of, which in this case might be china stealing our ips >> yeah. it gets to, you know, we talked before about the trade, trade deficit it this, the economy is this, all the calculations, but that's not the way the invisible hand works in the economy. the way it works is that a shipper who now suddenly has late charges to pay, suddenly, he raises the price by x and y, creating labor issues, and it's all a knock-on effect. >> and higher fright costs >> trickle down effect at the employment in the port the latest messaging about tariffs on the autos, when it comes to certain vehicles, the customer absorb iss the cost ofh tariff, but those buying a camry are not able to. cars that are middle class and less demand, there's less items in those ships, which means you need less people employed at the port to take the things off the ship

in fact, like over at the port of long beach, i was there with the head over there, and the trickle down effect, if you will, for employment from the port of long beach is 1.5 million people nationwide. >> wow >> from that one port. they are not the largest port. >> i believe it, though, that's a major access point we know how much chinese stuff we buy in this country, and that's effective let me ask you quickly, why where a follow-up? why the sequel why a compelling story. >> shipping is a forward looking indicator of any economy these visionaries, i was compelled to talk to them. there's some that created trade routes, the south-north trade. never had that in south america. so i always like to talk to people that create opportunity out of nothing, and now they look at africa it's exciting. >> that's for sure like you said, always a good indicator what's happening thank you very much, lori. >> thank you >> the book is "dynasty at sea."

news alert, and meg, what's going on >> interesting story here. the sec is reportedly investigating when companies may have engaged in rounding up of their quarterly earnings improperly this is according to a report from dow jones saying that the sec sent kwirque to ten companies about earnings adjustments that could have pushed earnings per share results higher this has to do after an academics study pointed out there's an abnormally low rate of fours in these earnings reports of companies earnings per share suggesting potentially that they may be rounding it up to five, which then allows them to round up even further from there, so we'll dig more into this they did not name which ten companies the probes went to this is from dow jones, kelly, back to you. >> thank you interesting one. as they say, a company's earnings of 55.4 points a share -- >> does not surprise me at all

>> and five cents a share -- >> does not surprise me, what human beings do. if you bid on a house, when they -- >> is it criminal behavior how much trouble should companies get into if they improperly round up earnings a lot? a little >> i don't know, i don't know. depends if you round up very, very small numbers opposed to rounding up numbers that mean more >> i like when they are able to use the -- feels like one of the algorithm, not as many 4s as there should be. >> like the 1990s at ge's earnings, like mathematically. >> steady uprd spewalo opening a new bank account make cash when you do. that's next in today's takeaway.

welcome back it's time now for the take away. want free money? head to the bank we begin today with the fact that regional banks are offering $300 on average for opening a checki ining account now. you have to have a minimum balance or do direct deposits, but why is the battle for deposits heating up? >> because banks need deposits to make money. when interest rates are higher, they need more and more deposits >> don't they pay more then when rates go up? >> as it is, you know, most banks still don't give you the rate you know, i talked about money markets, but you can -- people, you can get 2% on a money market fund right now where you take the money out. >> pretty much any time. >> cds are 2.5%. money's locked up. >> that's the fundamental point.

>> the money -- yeah it's good for banks -- for a bank to get 2.5% for one year money. >> if they hand out $300 >> you don't remember that stuff. you don't remember the toasters. >> reported last week and now by closing roughly a dozen solar installation facilities and ending a partnership with home depot that reuters said generated about half of the units sales. tesla said they'd rather sell solar through their open stores but doesn't this suggest there's trouble in this business >> i don't -- you know, it's weird, i still don't understand the solar business very well too much government involvement. it's one of those weird businesses where everything depends on incentives and the distribution structure i don't even understand it. >> ironically recently as an alternative to like a home generator. >> you did this at your own place? >> no. but it's very, very expensive. so there's subsidies now. >> it's all about subsidies and the tax benefits. >> tesla has the power wall.

if the price comes down over time, it can be very -- >> i understand how elon musk sleeps at night. he must be a very busy man. >> he is he's trying to crank out those model 3s. finally, more border backlash for u.s. businesses now nearly 100 coders are threatening to leave the platform unless microsoft drops its contact with i.c.e., immigration and customs enforcement. microsoft has taken a stand against i.c.e. splitting up families at the border but a january blog post says microsoft has been helping i.c.e. with facial recognition should they have to cut ties with the government? >> i don't know how much leverage the programmers have. once upon a time i managed software developers, a few hundred of them, and that's a world i -- they don't look at the world the way a journalist would look at the world.

they are much more principled than the average journalist. >> thank you very much. >> not to demean journalists in any way. they're a very tough group to manage. >> google had to cut ties over a defense contract that involved a.i. because employees revolted. so if there's no longer going to be this coziness between silicon valley and the military, isn't that a big problem for this country? >> you know, it's weird. i think it's on a case-by-case basis. i think the way the leverage works right now in silicon valley is you have to keep the programmers happy. and that leverage may change over time. but for now at least, at least in microsoft's case, it may not. >> i'm going to watch amazon, which is doing more government contracting than ever. paper or plastic we're not talking about bags next, the fast food industry is revamping straws we'll tell you why and what's at stake.

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. this is a story about mail

and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ you may soon be saying good-bye to plastic straws at fast food restaurants or anywhere else. aditi roy joins us with this devastating story. aditi. >> hi there, kelly

that's right because of pressure from consumers, cities and companies are making that switch from plastic straws to other materials that are better for the environment. here at the ferry building in san francisco, a lot of the eateries are using paper straws. some of the top producers of compostable plastic straws including eco straws and eco products that sells to restaurant chains, stadiums and universities paper straws are another popular option ardvark straws says its sales have gone up 5,000% in the last couple of years. and glass straws, simply straw says they have quadrupled their sales since january. but it costs less than a penny to make a plastic straw. compare that to 4 cents for compostable plastic straw, 6 cents for paper straw and 50 to

60 cents for a glass straw it seems like compostable and paper straws are the best alternatives mcdonald's is replacing with paper straws and bon appetit has banned plastic straws at 1,000 locations. we did our own test dip all of these straws into water. it's been here for hours and hours. a lot of people question about the paper straws some are soggy, but this aardvark one, it's actually held up pretty well, not soggy at all. >> you're telling me that paper straw is not soggy at all. what do they coat it in? >> i'm going to drink from it. maybe i shouldn't be drinking from it, right maybe i'm sipping the kool-aid. >> the compostable plastic straw, i could maybe get on board with that. >> you're pro plastic straw. you're comfort al with the plastic straw. >> i'm very comfortable with the plastic straw and i'm not comfortable with the price of some of these other straws

and so, you know, if you and me -- you know, tiffany is selling a sterling silver straw for $425 >> you want that kind of straw >> no, i don't want that kind of straw. i want the -- >> you want the cheapo -- >> do you feel guilty when you drink out of a plastic straw >> no, but maybe i should. here's my thing. i was all for -- i don't really care about this balloons thing then those funny balloons, the ones with aluminum foil? i was on the beach and there were two dozen of these balloons everywhere, and i was like come on, let's get rid of those balloons. >> so aditi, this is not just about straws, it's also about the plastic stirrers and some of the plastic lids that people put on coffee cups, for example. >> exactly it's all the accoutrements that go with coffee, like the lids and stirrers here in san francisco there's all different types of material that you sometimes get food to carry in instead of plastic

containers so it's an assortment of things. simply straws, they have seen their business quadruple since january and they are selling their straws at places like whole foods and partnering with espn, national geographic, so they're working with big brands because of what they stand for. >> aditi, thank you. look, if they invest and get the price down the stuff works fine, but i don't want them banning them everywhere. >> did you have a crazy straw when you were growing up >> i loved those >> by the way, those tasted like plastic after the first dishwasher use it was like you were drinking plastic. the bulls making a returning to wall street helping the dow snap an eight-day losing streak. industrials dragged down the market because of the ongoing concerns about trade caterpillar and boeing the worst performers in the dow. 21st century fox one of the best in the s&p disney raised its bid to buy the media giant's assets, topped an

offer from rival comcast netflix was up nearly 5% this year facebook hitting new highs, up 3% i agree with you, it's amazing to me how much these companies are still growing. >> yeah. i don't -- >> the share price, i can't -- >> tough to justify. >> we'll try next week evan, thank you for joining us today. that does it for "closing bell," everybody. "fast money" starts right now. live from the nasdaq market site overlooking times square, i'm melissa lee. tonight on "fast" bitcoin is getting slammed after japanese regulators call for an upgrade of a major exchange. are we seeing the death of bitcoin as we know it? we will break it down. plus the chart master says there's one dow stock heading for a big comeback he'll tell us the name and how high he sees it going. first, we start off with the energy sector to the rescue helping the dow avoid its longest losing streak in 40 years. one could say it was the t