work anymore lebron james has security of another type, walking away from a $35 million contract knowing that there's another one right around the corner at that level, maybe even more. he is not going to opt into his deal with the cleveland cavaliers. we'll wait to see what happens >> that's right. thank you for watching "power," and "closing bell" starts next happy friday, everyone, time for the closing bell, i'm wilfred frost. the ceo of deutsche bank, only bank to fail the fed stress test speaks out in a rare and exclusive interview. >> i'm phil lebeau in chicago, eight years since tesla's ipo, the stock rocketed higher, there's still a question on the mind of investors. >> reporter: we're in berkley, california, marijuana retailers in the state are scrambling to offload inventory after a law change over the weekend. the winners and losers over the shifting pot industry ahead.

i'm sara ieisen, we'll get your portfolio ready for the second half. the "closing bell" starts right now ♪ >> good afternoon, happy friday. >> you were roughunning >> you would have done so. that's good. welcome, everyone, happy friday, all of those stories and more to come, of course, but first let's check in on the markets. we are nicely higher this friday afternoon, up around about a percent on the dow, 235, high of the day of the dow is 293, and the low was up 108, so it's been green on the screens throughout the day. the s&p and nasdaq up as well, but trailing the dow >> the dow and s&p had the biggest gains in more than three weeks, pushing the major averages into positive territory for the month of june. they are still down, though, this week. nike is a huge part of the story, leading the entire market

higher today after the blowout earnings expectations were high going in for nike, but the company manages to surpass them. how? they looked to return for growth in north measuriamerica, and ni that with 3% growth, and upped its forecast for the year based on what they are seeing. that was a surprise. china is growing, and the innovation, investors particularly love the higher margins, average selling prices, and overall, customer response to the new products like vapor max and epic react those are the number one and two performance running shoes now priced at $125, so can it continue here's what the ceo mark parker told investors last night. >> we see strength across both product types, store and apparel, both competitive marketplaces for nike and north america, but around the world.

we see the results that we rated, i think in q4, and momentum that's building we'll continue to see throughout the fiscal year. very bullish on apparel, the performance and certainly sportswear >> where is the opportunity in the business well, nike is boosting its direct to consumer business. nike got stores as they grow double digits. women's business call out as an opportunity to scale like women's jordans and company painted digital as a huge opportunity. digital sales rising 41% part is the sneakers app, releasing shoes, so it fit together this quarter, investors got the inflection point they wanted to see with better momentum than they expected. >> the performance year to date and off the back of the earnings very, very positive. that report all very positive. what goes wrong from here in. >> macro head winds are the negative for nike. more than half of the sales come

from overseas incoming the strong dollar which is near the highs of the year again, and the valuation is now at a multiyear high, so investors to have think about what's priced in terms of future earn, not to mention trade, no talk of trade on the call, but china is such a key growth market that anything would compromise that would hurt nike's future sales. >> that's nike, and, by the way, as you got to it first does not mean your segment is more important. >> just rising more than yours >> fair point. >> group decision. >> of course >> stress tests out yesterday. despite failures and difficulties for certain banks, overall, it was a win for the industry in the face of what was a very tough test. total payouts rose by 28 billion for 165 billion, with 80% of the gains coming from the money centered banks of the 28 billion increase, $20 billion was buy barks, $8 billion dividends. the big banks, wells was the

biggest surprise, increasing the buyback to $2 had 4 billion, well ahead of simts estimates o4 billion. there's effective ccar yields for wells fargo and citi ahead of other money centered banks like bank of america and jpmorgan, but really big returns there across the banks morgan stanley and goldman sachs had to reduce their initial plans while deutsche bank's u.s. unit failed qualitatively, and said they put widespread deficiencies in the capital planning controls. despite that, the ceo struck an optimistic tone speaking earlier to me today. >> if we can show that quarter by quarter that we get the costs under control and i'm very confident we get costs under control, that we have a stable franchise and go from a revenue point of view and that direction

where we think we can go and will go, the sustainable profitability goes up quarter by quarter and revaluation. it depends on staustainable profitability. we took the right steps and confident we keep up >> more from that interview coming up in just a few minutes. overall, the bank index shows this a win for the sector up 0.9% >> can't turn the tide for banks. we'll see. >> we'll see tough quarter for sure >> gm, latest auto maker to warn about the impact of president trump's potential import tariffs. our phil lebeau with the details. this caught my attention, phil >> gm like other auto makers filed comments like this, and these are the comments filed in the last hour at the commerce department, and if they do their investigation into whether or not the automobile industry is

being hurt due to foreign competition and tariffs on vehicles in other countries. this is what they are saying in its comments to the commerce department they said tariffs undermind our ability to compete how? drives up prices in the showroom ultimately hurting demand, and for the auto industry, they are looking at a fourth straight year where auto sales in the united states could top 17 million vehicles this is the longest stretch of stainability, if you will. we'll get june numbers early next week. the auto industry overall told the e-commerce department if you put these tariffs on vehicles, you drive up prices in their estimation by $6,000, $5,880 to be exact the average price that you, i, and other people pay in showrooms on average, $32,500,

and tack on another $6,000, and you see where the auto makers and dealers and the industry is worried. look at shares of the german auto makers. they are also weighing in on the congress department's investigati investigation, but the shares have been under pressure, guys, talked about this for some time, the german auto makers are worried that their trade surplus with the united states vehicles built there and sent here could be in jeopardy if there is a 25% tariff slapped on imported german automobiles back to you. >> makes statement hearing that from an american auto maker saying this results in fewer u.s. jobs, not more, phil, thank you. >> and that impact as well on the dow, for the first half of the year, down 5%. >> feeling it hard, yeah >> let's continue the discussion, and joining us today iss is ernest and steve grasso, and

rick santelli. we expect volatility given the month. >> absolutely. it is a day we waited for. this is the third date in june we expect a lot more volatility. i think depending on the activity that we already have seen in previous sessions, a lots been priced in already. might see or continue to see window dressing as we get towards the enof the day >> what's been a struggling couple weeks with various negative headlines and market declines, is it important today we end roughly where we are 200 points on the dow? >> i think so. the volatility adds 1% move to the markets, and investors are not used to that ending up in the green, getting the dow back positive for the year, financials stopping their downturn would be important and understand this is a vacation, holiday mode next week, shortened trading sessions, so

buying will drop dramatically. >> anything fundamentally change over the last two sessions that led to the better tone and big rally we've seen versus earlier in the week where there was a lot of fear mongering about trade and hammering about trade, or is this just end of quarter and end of happier stock >> i don't think anything fundamentally changed to be honest with you in the last couple days. going to see elevated levels of volatility throughout the year due to the rhetoric around trade and so on, but i think the key here is a focus on the earnings with reports from the second quarter, and more importantly, the calls in the outlook that companies give because the expectations are very high, 30% for 18 year over year relative to 17 and 10% for 19, and if we somehow don't get a call that's consistent with those high expectations, the market could be in for a bit of a head wind in terms of price action >> rick, i didn't know what to start with with you today, a big

jump for the likes of the euro and pound against the dollar, all the the fact the yield curve is at its flattest since august 2007, i believe, to have quite stark moves today. >> yeah, yeah, yeah, you know, the yield curve is a popular discussion i don't know we der reeve heening from this. all the management used to control interest rates for the last eight or nine years, so for the dollar, this is an interesting scenario, wilf the dollar makes up 57% of the dollar index, yet today is down three quarters of a percent closed up on the week, and the euro closed up a little bit on the week as far as all the other dynamics, alls i can tell you is that a small story that traders in the equity complex here had a plan coming in on monday they said, it will be nasty, monday, tuesday, and wednesday, wanted to buy based on effects

of half year end, thought they'd buy thursday age friday. maybe they got lucky talk to traders, they have significant strategies for how to deal with rebalancings and they are good at it. i don't think the market fund ta ment -- fundamentals changed a lot and will blow over we have to pay close techniques. the rest of the world is coming into an issue that's going to keep their rates softer than ours, and that pressures us down, so the real issue is, do we break the way from the notion of a softening rest of the world, divergence here that's the topic to focus on in the next quarter >> yeah, and whether rick's talking rates or, john, the economy. the whole story was global economic recovery. that does not look like it's happening anymore. >> it's not. sounds like a heavy lift to really have a major impact on what woer looking to do. and as said, earnings season in two weeks a very important to

hear what companies have to say, what the outlook is moving forward. the bar is set high. >> quickly, you're bank of america, stress tests yesterday a turning point for the sector >> inso. we own bank of america, wells, and citi, and we think that's a story there that's obviously capital from the shareholders, seeing that continue as the financial regulation and the impact of the stress tests sarts to si-- starts to sink into the prices >> leaving it there, gentlemen, thank you for joining us we've got 47 minutes left of trade and higher, six points n n the dow. slipped a little bit, but a positive day at 0.85 points for the dow. up next, more from the interview from christian sewing and the

u.s. operations and employee morale mention caps head to the polls to elect a new president results could have major implications on everything from oil to nafta we will break down the possible outcomes we want to hear from you whose walk in the open is better, mine or wilfred's. reach out to the show, twitter, facebook, or e-mail us facebook, or e-mail us we're back after this or your digestion... so why wouldn't you take something for the most important part of you... your brain.break. in drug stores nationwide. prevagen. the name to remember. >> well played fl what about him?

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welcome back we got a broad based rally here. dow up 200 points, s&p up half a percent, and energy stocks lead the game they led all quarter long. it looks like we are finishing up the quarter higher, week lower, and month higher for u.s. stocks, by the way, telecom is only thing negative now. >> eighth year the s&p rose in the first half of the year impressive given the negativity of recent weeks. moving on to deutsche bank despite the sec part of the fed's stress tests, shares tried higher, but the stock is down

more than 40% so far this year i spoke exclusively with the ceo and asked thoughts on the bank's stress test result >> i think we've shown from robustness and so lidty of the bank, we show strong resolve and i'm happy about this because it was a lot of work, and we know that on the control side we had deficiencies we have done good progress we have completely committed to work with the authorities to get it right over the next year. >> given the size relative to the small bank and problems it's causing you, did you consider getting rid of it as part of restructuring? >> not at all. i mean, for various reasons. number one, look at the size of deutsche bank, u.s. next to germany, most important markets we are in and that remains the case, key market secondly, we should also see,

again, what the stressness is all about, and from the robustness point of view and the liquidity. we know we have work to do on the qualitative side and fully committed as a board with the regional management here, and, therefore, highly confident to get over this one and be the key partner here in the u.s. >> if we tack about corporate investment in the bank, the area you are shrinking, trying to shrink your way to higher returns. is there an example of that working in the last decade or two anywhere it's a tough task. >> i think we should be careful with the word "shrinking," but we're investing into the business in the corporate investment where we are not market leader. look at the transaction bank we are the number one. we are one of the biggest u.s. dollars globe ally all these businesses are in the

u.s., and we have certain businesses we are not dominant and not having leading positions. there we do adjustments and use those resources freed up there in order to invest into other parts of the corporate investment the corporate investment overall does not shrink, but we grow the stable businesses as i said before to get to a better balance. that is the story. >> but that size, you mentioned, christian, is all relative and smaller than it used to be for deutsche bank. i mean, total revenue was 37 billion down to 31, i think, billion, last year you are losing revenue there you are losing stock there, returns are low, it's a tough task to get to 10% target from here >> that is right therefore, we clearly have a plan to go into trajectory to the 10% and the real issue is that now quarter after quarter we show two things stable revenue and stable franchise and i think we are a good way there, and at the same time we get the trajectory right

on the cost side, and also there i'm convinced with the measures taken and the measures we have already implemented that we are on the right way, and we'll show year over year an increasing profitability and tightening >> in the start of this month, after a number of hurdles already, s&p's downgrade and share price declines, you wrote a staff e-mail to colleagues saying, quote, many of you are sick and tired of this bad news, that's exactly how i feel, but there's no reason for us to be discouraged. since then, less than a month passed, share prices hit another record all-time low, and you had this qualitative failure with the fed stress test yesterday. how much more of this can employees take is morale low? >> i couldn't say that honestly, for 29 years in this life, it's a contested conclusion and never underestimate resilience of

deutsche bank. that's what i can see also in the morale of the people and globally we actually just did a survey, and for the first time in three or four years, it actually went up we're not yet happy with all the results, but the direction is the right one. that speaks for the resilience, morale of the people they want clarity. i give them clarity on which direction we go. that's what peoplemen menwant i tell you we are resilient. >> message is nailed on, impressive answers there, of course first tv interview, that said, you only look at the share price year to date, down 42% with another record all-time low this week to be reminded of the scale of the task he has on his hands in this restructuring to shrink his way higher. will be tough. >> just joined in april? >> exactly you know, it's another big restructuring. >> more layoffs? >> well, 7,000 layoffs has been

announced. we'll see when that comes through. we got more on the restructuring plans set to come from that interview in the next hour as well as his take on eurozone politics and his view on the president's trade policies and what it means for the euro zone and economy. >> looking forward to that in the meantime, 37 minutes before the closing bell, and the dow's up 177 did i do the math right? >> it was right. >> it is a broad based rally, but we come off session highs, nasdaq up half a percent, russell flat, but for the quarter, it's the russell index of small caps and domestic companies doing the best eight years since tesla went public early investors rewarded with big gains, but there's one big thing wall street wants to see we'll explain. plus, shares of the brewer of corona brands tanks on the back of earnings

what's what behind that beer bust after the short break

welcome back to the "closing bell", we are up three quarters a percent on the dow, slipping a little bit approaching the close, up 183 points for the dow, the high was just shy of 300 points there is the sector heat map energy with a great week >> great quarter >> as well, exactly, telco in the red. it is a broadly positive day the russell, which had a good

quarter as well, is flat as we approach the close up next, with the first half of the year, almost in the books, we'll ask main street investors how they are setting up for the rest of the year in our "closing bell" investment club wall street digests stress tests, but is the fed focusing attention on the wrong companies? we'll dive intth qsto atueion we'll dive intth qsto atueion stil until the day you leave for your trip. add-on advantage. only when you book with expedia.

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stocks rally on the final day of the quarter, and half of the year, the dow's up 188, really nike is the big story behind the dow's gain, adding 54 points all by itself financials are rallying off of the back of the stress tests, but morgan and sachs are not participating. >> interestingly, bank of america slipping in the trade. wells big outperformer, but bank of america now down half a percent. let's move on and look at some individual stocks to watch today. we got a couple coming up. consolation brands, one of the weakest in the s&p 500 beer, wine, and spirits maker

missed wall streets estimate because higher marketing and transportation costs took a toll on operating margins it was a margin story showing even the fastest growers in the consumer space like consolation, really continue to be one hit by margin pressure. grape costs were higher, transportation costs top line growth is there, corona still working and strong trends. all analysts bullish, rbc, wells fargo, said it's an opportunity to buy >> we'll see next impact world cup did, but the shortage of carbon dioxide >> rationing beer sales. >> we'll have that on the downside in next quarter's numbers. walgreens, one of the few stocks missing out on today's rally after being downgraded from hold to buy under uncertainty a rough welcome to the dow jones industrial average down 11% since replacing ge on tuesday. it's a little bit unfair that

comparison had ran upcoming into the dow, but because it's entry into the space, that had the biggest effect coming in, 8% move a couple days ago. 11% decline, it's the amazon entry into its space >> i read that research note from jeffreys on the downgrade to hold, and basically they say even though it's marginal, small chunk of the business, ability amazon to scale is leaves an overhang on stocks like walgreens that didn't provide anything particularly inspiring in the results announced this week either. >> although, bouncing back, still positive, but just slipping a little bit. >> tough week. >> tough week. >> if you're a pharmacy retailers. time for a cnbc news update, sue in. >> wilf, sara, this is what's happening at this time, everyone president trump celebrating the six month anniversary of the tax cuts and job act boasting the bill helped lead to a roaring

jobs market with low unemployment rates for a broad cross section of americans >> it's by great honor to welcome you back to the white house to celebrate six months of new jobs, bigger paychecks, and keeping more of your hard earned money where it belongs, in your pocket or wherever else you want to spend it. >> there appears to have been a mishap in a flooded cave complex in thailand where rescuers have been searching for 12 boys and the soccer coach missing for six days one rescuer fainted, and another with a stomach ailment rising water is complicating relief efforts a glass bridge, look at that, suspended over a valley in south china opening to spe spectacular views of the ground below. that features a siglass deck and world's biggest and highest glass construction i don't know >> i don't like that

>> i don't think i would go out there. i really don't i'm a chicken. >> i don't like that makes me -- i did a bungy jump once >> really. >> taken back to that, most awful thing ever, horrible experience >> i just -- >> i don't like looking at it. >> palms are sweating. >> me too. >> enough. >> you guys are wimps. looks cool >> sara, more power to you, go ahead. >> yeah. if she really means it >> thank you >> easy to say let's see you out there. sue, as ever, thank you very much >> you got it. see you next hour. and it is the final trading day of the month, quarter, and first half of the year how are main street investors gearing up for the rest of 2018 in time for check-in with retail investors. jackie, how are you feeling with all of the trade tensions out there and the rocky way we ended the month of june? >> yeah. it's been a little bit rocky

just a lot of unknowns right now, you know, with the trade wars, you hear something different every day, it seem, but honestly, this first part of the year has ended a lot better than i thought it would, so i'm actually feeling good as we go into the second part of the year >> and we were talking before the break about how walgreen's declined as amazon enter its space. how do you think amazon continues to take on new different sectors. can it have success in all of them >> sure it can, but as retail investor, they are at a disadvantage we are looking at companies they are eating up, and they are taking it away from us as we try to invest in those, so, amazon, i understand what it's doing, capitalism is great, but from my point of view, i'd like them to slow down a little bit so we can get our feet wet >> jackie, you feel good about the second half of the yearment ta -- year are you taking the opportunity

to buy it was a down week, and if so, what are you buying? >> i am, so it was a down week, and i did pick up a little bit of some stocks that i had been watching, adobe was probably my biggest one i was glad to finally get in on. i think that is such an awesome long term play, fundamentals are great, and they are a wide mote for what they offer in terms of graphic design suite so i'm bullish on that company for a long time, and finally i took a position in this this week >> you've been buying discret n discretionary stocks >> yes they are doing wonderful fundamentals are good. i also got into crocs. they are good too, and their stock price, i believe, for the quarter, they beat estimates three quarters in a row. that's great and consumers discretionary is something i never thought i'd get into and happened to get into it, when i look across the board, a lot of companies in

that market are doing very well. >> jackie, you held ge for a long time, sold out of it, and recently announced the restructuring program, giving the stock a boost. do you want to get back into it? >> no way. i held that stock for a little over ten years, and i -- it's just been a big disappointment for me i think that they will pull it together, but i have lost confidence where i'm not comfortable holding it because there's so many other places, even in that sector that i can put my money where i know it will do a lot better and not without having to wait so long and having to see all the changes happen i'm out of ge. >> demond, do you factor politics at all when you think about investing? >> i do. it's because every time our president tweets or makes a comment, the market reacts a little bit, and sometimes a lot, and yesterday's stress test and banks, i own sun trust and have

for three years, and they are going up and across the board for a lot of banks that are feeling good about that, and i also like the regulation rolling back, especially when it comes to lending and rates it's benefitting coming up in the home stretch of the year >> guys, thank you very much for joining us, and good luck with the quarter ahead. jackie and demond hicks. >> thank you 22 minutes to go here before -- >> oh, wow >> 22 minutes to go, and broad rally continues on the final day of the week and month and half of the year. energy, materials, industrials are leading. this is actually energy stocks best quarter in several years. telecom down >> up 7%, well, 8% now >> oil continuing to rocket higher up next, the results of sunday's mexican presidential election could have far-reaching implications way beyond the country's borders. why you should be paying

attention to the polls and why it matters so much for investors. plus more with the deutsche bank ceo log on to twitter and facebook and tell us whose walk is better yours looks better like this, i have to admit. >> you're running. >> slo-mo. >> well-played guys, we're back here in a couple minutes

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welcome back to the closing bell, we got 80 minutes left of trade, and we are up 0.7% on the dow, less than a half percent on s&p, and russell in negative territory, slips a little bit approaching the close. the high of the day was 300 points, and now it's half that at 162 points higher mexicans will elect a new president, and results could have major business implications, our michelle caruso-cabrera will break it down hi, michelle >> hi, sara, unless polls are dramatically wrong, the next president of mexico is a man who goes by the nickname amlo.

he's run for president of mexico twice before, but this third time is expected to be the charm. take a look. he's far ahead in the polls by at least 18 points or more according to other polls u.s. investors are concerned about amlo because of two decades in politics mexico he's anti-american and politics similar to the late chavez from venezuela. this time he moved towards the center, and his big campaign push is to be anticorruption now, when it comes to nafta, he says he will continue with the negotiations starting under the current president, but he wants to do more to protect mexican agriculture which was decimated by nafta also important to u.s. business, his desire to stop foreign investment in the oil sector which was only open to foreign investment four years ago to stop what you see here in this

graphic. the steady decline in production mexico used to produce more than 3 million barrels a day guys, and now it's falling they need foreign investment, but he wants to stop it. back to you. >> michelle, there's coverage in the u.k. about the fact that jeremy corbin, the very left leaning leader of the opposition is goods friends with amlo, and, in fact, spent 2016-17 new year's eve together -- >> doesn't surprise me >> there's speculation if he wins this election, it has -- it's a sign, a far left fire brand can win and a boost whether it's for boost to jeremy in the u.k. or for a bernie sanders type candidate in the u.s. is that fair, and would that be applicable across the rest of the americas, north or south >> i can certainly see where people would think that and certainly possible i would -- what's much safer to say is this a an anti-establishment vote as we've seen in other countries in the world, amlo is going to wipe the floor with the two parties in power for the last 100 years

it was always one of those, and the two parties have basically been decimated by him. it's definitely an anti-establishment push for sure, whether to suggest that you can get a bernie sanders type leaders in the united states, i don't know, and you'd know about the u.k. better than me, wilf >> michelle, i just have a question because it seems like the relationship between he and trump has been challenging from the beginning and if amlo, someone who gets along better because he has the heel and whether that's a good or bad thing thinking about what the talks for nafta, whether they can agree on something >> so, you know, conventional wisdom for a long time was that a nafta negotiation would be tougher under amlo, but there's been some rethinking about that. he is very much a nationalist like president trump, a strong man. we know that president trump likes those individuals when you

look out of the way he looks across the world so maybe the two would get along better or there's a better option to do a deal there as a result also, you know, the united states has asked mexico to raise its wages, and the reason jobs go down there is because wages are low, $4 for manufacturing an hour, compared to $39 here in the united states. amlo likes the idea of raising wages in mexico, of course, that makes them less competitive. that's why the u.s. wants them to do that, but it does appeal to him for higher wages in mexico >> michelle, great stuff, thank you very much, michelle caruso-cabrera back at hq for us big couple days for mexico, facing brazil monday in the world cup. big clash there, of course, local rivals >> england didn't have a good week, did it >> clear to the next round, play tuesday. >> less than 15 minutes to go before the closing bell, and we're losing some of the gains, still, firmly in positive territory for the dow, up 158, the s&p up half a percent, and

the nasdaq, russell 2,000 slips negative, but it still is a big winner for the overall quarter up next, we have the market acronym of the week, and you might ink ththe choice is a little poorish introducing e*trade personalized investments professionally managed portfolios customized to help meet your financial goals. you'll know what you're invested in we'ling. so you can spend more time floating about on your inflatable swan. [ding]

welcome back dow was up almost 300 points at the high that slipped as we head into the close, last ten minutes of trading here, s&p up a third percent, same with the nasdaq, still down for the week, though up for the month of june, and up for the quarter. technology with the 8th quarter in a row of gains. let's have our market acronym of the week, david, of course, independent investment consulta consultant what are you going for >> i think given the strength of crude oil, go with crude this week c is confidence. basically, you've got the national federation of independent businesses at a 48-year high, wilfred. you have the empire state manufacturing, ism

manufacturing, ism non-manufacturing, consumer confidence and sentiment is very high offsetting retail sales this week and personal consumpti consumption. the r is the renminbi, it's been weak it's probably going to seven renminbi per dollar. they are trying to control data, tighten the central bank, and trade and tariff storm going on that they are involved in discussions with a president whose first and last name starts with t, not saying which president it is. the u is up oil. now, there you just talked, sara, about the strength of the tech stocks, how they are strong the energy stocks have done extremely well this quarter. up 12% versus 2.9% for the s&p i think you want to stay with energy you got good dividends there

you want to stay with energy russia, saudi arabia, and the united states are effectively creating a new open. they all want oil to be high the crud -- d, declining interest rates i'm most amazed by the ten-year easing off to 2.85, something like that, basically, that means the banks are not able to get that spread between short term and long term with the yield curve flattening it's often a precursor or a harbinger of a recession so we're not there yet, but you want to watch that like a hawk, and, finally, e, earnings. second quarter earnings supposed to be up 19.8%, full year, up p 20% on 8% revenue gains. buy stocks that are small and mid cap stocks they have been doing well. the russell 22000, s&p 600 vasty outperformed the stock market, and you want to basically have stocks that are a blend of

defense and offense just like the four remaining ex-world champions in the world cup, which is brazil, argentina, that would be france -- they are not an ex-winner - >> it is >> argentina -- >> you'france won in 1998 >> i just came to france >> england won it in 1966. there are five by that count, anyway, that's irrelevant. in terms of market broadly, what's the story for you over the half year as a whole dow finishes the half slightly negative, s&p positive, nasdaq up 10% >> that's a trade story. dower underperformance is trade, right? >> yes it's all about tech. it's been all about crowding into these very high multiple, high valuation trades. i think it's time to take some off the table, wilfred, and move into defensive names i'm talking about energy i'm talking about telecom. i'm talking utilities. that would indicate that interest rates are not going to rise enough to hurt those latter

two yield oriented plays go for yield and safety right now. i think the first half, you look at europe, that's down japan is down. china is in a bear market. china's down 16.6% year to date, and if you go back to last year, they are down over 20%, so they are officially in a bear market. you want to stay away, ease up on the emerging markets which have done so well, not time for emerging markets, stay home. >> not well as of late, of course, there we go. >> defensive >> the last words of -- you must cultivate your garden. stay home. buy u.s., small and mid cap stocks >> there we go david, thank you very much >> thank you so much >> acronym and a literary reference. >> latin, everything >> and french. >> and french. there we go. plenty up next, back with the closing count down and five

minutes of trade left. >> tesla took off since the ipo eight years ago today. nearly 2,000% rally in the stock, but coming up, debating whether the stock is at risk of a collapse some are predicting it you're watching cnbc, first in business worldwide ♪

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to the countdown, a quick question, whose walk is better >> yours >> thank you very markets, well the highs, selling off approaching the close. starting with nike, year to date, up sharply today, of course, up sharply throughout the year, held the dow most of the day, and consumer discretionaries is the best sectors in the first half of the year, and nike a big factor of that look at the screen of the banks, other big story, wells fargo, up 4%, capital return bigger than expected, citi nice, and bank of america slipped, stated well, goldman sachs and morgan slipping as well not holding on to the gains that we thought the sector might do, and that's been a factor in the last hour of trade as we slipped a bit. half screen of the indexes today, and dow slipping. high was 2.93 points, now 96 the s&p up 0.6%, and now just .25, and bringing in

sectors of the day, seema has the story of the day, telcos, suffering, but energy doing well, holding significant gains, but looked at lots closer percent, and that slippage seen in the last hour or so playing out there, still only two sectors negative, but not off as much as we were. >> that's right. end of the quarter selling we came off the highs, but higher for the quarter, but lower own the year the dow down 1.5%. what's ironic is that they took ge out of the dow jones index, and inserted walgreens, funny enough, the worst performing stock on the dow, lower 16% on the year with the news from amazon the russell 2,000, small caps r a -- caps, and technology, the winning trades as a way to be seen insulated from the trade fears, plus, benefitting from that stronger dollar, what has not worked, industrials, i have to mention bitcoin, below 6,000, moving 20% in the month of june. >> and in terms of today's

trade, a quick look at the dollar because euro and sterling very strong today. the dollar's just positive for the week, but it is slipping today. almost 0.9%. there's the bell ringing at the nasdaq, hashtag sports, and new fund fear at the nyse. up 64 points on the dow. the high of the day was 293. still positive, but not as much. that's all for the first hour of the "closing bell," and , sara, back to you. welcome, i'm sara eisen in for kelly evans, and wilfred will join me in a moment finishing the day on wall street, the quarter, the week, the month on a high note, but as mentioned, well off the highs of the session. dow manages to eke out a quarter percentage point gain. nike a part of the story, closing up 11% s&p 500, actually close near the

flat line losing almost all gains, same with the nasdaq. nasdaq down more than 2% for the week s&p and dow down 1% for the week all three of them, though, higher for the quarter, second quarter. russell ended lower. we have michael santoli, and john augustine from huntington private bank, and sandy vallier from the vallier balanced fund, and, mike, final day, there was a lot of end of quarter -- >> a little bit of noise >> yeah. >> quirks in there, and not a lot of noise on the trade front. that helped. >> right that was clear it was more relief than enthusiasm that was driving us, even at the highs of the day we basically had a little of pressure release from the emerging markets they were very stretched to the downside the dollar came off, all the areas including the banks stretched down as well, got relief, and then the markets kind of took some part in that,

but not necessarily. >> mike, when it comes to the last half hour of trade, look at the intraday chart, the picture is not attractive, we lost momentum going into a week where volumes are down, and any slight negative sentiment we get next week is accented >> it probably will. i think because it's the last day of the quarter and you have a major index rebalancing going on -- i don't want to excuse it, obviously, shows there's not enough buying interest to keep market above the levels here, but it seems like it was more about exactly pairing things up at the close and some essentially rebalancing going on, so that's why i don't want to extrapolate too much, but, however, the fact that the bank stocks across the board could not hold a bid is really not all that positive, and it might have ben treasury yield curve with new lows >> i mispronounced your name, sandy villary, how does this set us up for the second half of the

year >> it's going to be a continuation of the first half with everything from deregulation, low corporate taxes, and trade war had the russell up over 7% in the first six months, and you saw it dramatically outperform large caps, and so i think that's going to continue. the other thing is you got larger caps, procter & gamble and pepsis had yields that were competitive with the 10-year, but that rose to levels that i think there will be continuesed pressure on the names and people play offense rather than defense in the second half as they did in the first half. >> when we consider sector performance, clearly, technology fantast fantastic, consumer discretionary strong as well do you think we'll see rotation in the second half of the year out of the sectors >> potentially out of technologies the one we are thinking about they have decelerating earnings trends to them probably not consumer discretionary. that's the area we are looking at

we see continued rotation in general in the sectors, wilfred, but notal from the consumer sector >> talking about consumer names, we hit shares of nike, leading the dow higher today, hitting an all-time high, itself, reporting strong earnings last night, earnings beat, revenues beat, company said it's all return to growth in the u.s., and that is sustained. 3% gain in sales for north america, double digit growth internationally led by china up 35%. it was all driven by new product launches, higher average selling prices, and investors like what they heard and got the bonus of a $15 billion buyback. look at the company now, mike, up 30% of the year, and we wonder whether that multiyear high valuation can stand and continue to grow >> yeah. really, you rebuilt the growth stock premium into nike that was there years ago and fell away and now is back. you know, a lot of the conventional wisdom said in the new world of commerce and

consumers, it's the brands that were going to thrive, right? if you had this recognizable brand, it's across any platform and seemed investors bet heavily that nike is one of those winners, and, again, to your point, i don't know if we pricez in the next couple years of good news >> analysts raised targets today, and 80 is average, which is where the stock is now. talk to a paul from deutsche bank saying there's another 10% upside, it's a complete rebasing of the stock because we've seen this inflection point at a faster momentum. shouldn't take long to get there because they show the new product relief is at higher prices are working, and, by the way, apparel was stronger than footwear for a period where everyone thought it was dead, it's fashionable, and lulu is pumping 19% >> that is true. never against another 10% for a name like this if the market holds together and consumer trends are good, but in terms of much more upside from there,

it's a big question begin the move from october. john, you like consumer, do you like nike? >> yeah. we do. we note that underarmour had a good first half of the year as well, so both came back. but, yeah, nike is on the buy list we use that and continue to use that we're more interested know in seeing what the analysts do with the target prices next week after delivering this good quarter. >> talking buybacks, of course, nike had one, but a lot of banks had plenty, but the banks lost early gains today after strong results following those fed stress tests leslie picker looked at whether the fed looks beyond bank to decide what's included in tests. >> that's right. specifically nonbanks like black rock and vanguard that have combined $11 trillion and expected to double that amount over the next decade largely thanks to the growth in passive investing in the form of index

and product funds. regular lapt s have sounded them but so far we've not seen much in the way of stress tests here in the u.s on "squawk box" today, regul rer laters are not focusing on nonbanks >> people enter in a year because etf gives instability liquidity. there's a shock to the market. they find they cannot get that liquidity. what do they do? sell something else. that's what people do. i see it over and over again, and then you get financial con they -- contagion that spreads to economic contagions. >> you saw this in february, xib, that blew up. that one security caused investors to lose $2 billion, but the concern is whether something similar happens on a much larger scale, guys. >> slightly disagree with the sentiment that he was talking

about there because it's very different when you keep your cash that's meant to be safe and, you know, if a bank does something too risky in the other part of the business in it draws down people's savings is one thing, but if we're investing in the stock market, we should know there's risk attached to it. i don't know if it's the same kind of debate >> well, there's risk attached to it when investing in the stock market, but i think what he's referring to with the etfs and etns is the more interconnectivity that those asset have with the broader market as a whole and risks associated there also, a lot of, you know, in regular investors put money into mutual funds and expect that to be safe and diversified in the same way they put money in the banks without that fdic insurance, of course, but how do all of these things link up with the banks i think was the point more on that contagions side of the equation >> sure. we saw etfs led to a sudden

selloff, more volatility like in february, but, again, that's for investors to know about, is it not? >> it is i mean, i see it as a subject for the bit to look at for general sis semiystemic risk aro example, a blackrock or vanguard big in the area, what are you measuring? no capital to hold against it. just a matter of saying, can an instrument be too unwieldy for a market to handle in a stress situation. >> what do you think, sandy? >> i like we scaled back, dodd-frank stress tests and that sort of thing. look at the 35 banks that went through it, $1.2 trillion in capital, and i think they came through okay, but i'm a big fan of capital markets and putting the burden, which is what congress wanted to do, put the burden back on the banks rather than, you know, having the government really handle it, so i'm a fan of deregulation. >> a lot is also for pr, right

i mean, if the banks were to blame for the last crisis making the stress test public was an effort from the fed to show we're on top of this, and the system is healthy, and they are not bringing us down again, right? >> exa >> exactly every crisis is different each time it pops up. plug the holes from the last financial crisis, inevitably, another crisis recession, that's just the way the cycle works, comes from somewhere else, so i think a lot of people are looking now to see where that potential risk could come from, and how that could then spread into the banks, which could cause more confusion >> after the 1987 stock market crash, there was a rule every firm reported the volume of programmed trading handled every week, and it was meaningless for decades after it happened. >> always chasing the last blowup >> exactly >> leslie, thank you >> thank you >> another big story, canada announcing they will retaliate against new u.s. tariffs kayla has details and the extensive product list

>> charging 25% tariffs on u.s. steel and aluminum coming in and 10% on other goods like ketchup, candy, and toilet paper beginning on sunday. canada's foreign minister said she spoke to u.s. trade representatives six times this week, but the only way to reverse canada's actions is for the u.s. to resend its tariffs >> this is a responsive action it is a resciprocal action. it is a dollar for dollar response the u.s. action which initiated this is an illegal action under both wto and nafta >> the defense comes as president disstain for the wto intensifies believes they were client, but the retaliation is not. that's a reason why lighthizer said new tariffs from europe,

china and mexico shows disregar for the rules. the retaliation has bolstered the president's belief the wto is ineffective, and when i asked the adviser whether the president looks to get out of the wto, he said, this may, indeed, be the catalyst. sara >> kayla thank you very much just looking for some stock reaction here. mike, it's interesting to note that schmucker and hershey are the worst performing staples, and goldman put out the note saying they are most exposed, minimum exposure, 5% of each, but both have high production of some of these taxed items, what they sell in canada in the united states. >> right >> in other words, shipping it across the border, and it's going to be taxed, for instance, coffee, caffeine, jams, jellies, taxed, same as chocolates. >> it's a new front. that's the takeaway.

we keep bracing for additional products and companies where this is going to be impacted >> john, russell's outperformed this past quarter because it's more domestic, small caps, does that continue the rest of the year >> we think so we have a bias there at the shop that huntington, put on two installments in the second quarter. also, they have higher earnings growth for the next 12 months, up in the 20% range for protected earnings growth, so we are still there with that trade. we got out of em moved to domestic for our customers. >> okay. we're beginning to leave it there, guys, thank you very much for joining us, john augustine and sandy villary. what the president of deutsche bank is saying and whether the bank is eyeing a potential acquisition. as we mentioned, stocks closing higher today, but data shows us the second largest ever weekly outflow from equity funds. coming up, "fast money" says whether it's a bearish sign for investors. we want to hear from you,

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shares of deutsche bank higher despite failing the second part of the stress test on the qualitative measure i spoke with the ceo and asked why after ten years of restructuring efforts his restructuring effort would be different. >> first of all, we start from a very good foundation if you look what we've done over three years, cleaned up the balance sheet, increased capital, look at liquidity, we start from a foundation that's very robust, and i agree with you, we need to work on a sustainable profitability. there, we decided to increase the part of the stable earnings in the bank that was the reason why we integrate post bankwith the retail bank in germany we are the key no. 1 there in germany, see growth in this one and wealth management and asset management business, and we'll have the very focused approach to our coffer investment, the core dna of deutsche bank, focus there where we are market leading, many of those, and

last, but not least, we get more disciplined on our cost edge that was a weak part we have measures in place and confident we'll focus there. >> let's talk about the retail bank, which, as you said, you got a big position integrating the bank in germany. is that really the place to be within banking at the moment when you lock at the interest rate outlook, the sort of economic line in the eurozone. is that where you want to be long term? >> retail bank is one of the key ingredients because it stands for stable business, and the retail bank, also in europe, but also in germany is all about scale. it is important that we have a large enterprise there, a large operation, and we have more than 20 million plants, more than ten million times of the tent million are digital. we are working on a platform solution for the retail business, and synergies, we get from the merger, this would be a

business which over the next three, four years would show return on equity of about 10%, and then it's a very nice and stable business which will be -- >> more scale help would you like to merge with a commerce bank? >> we have so much to do now on our own and clear focus for the next 18 months that we should execute on our homework. that is where the management team is focusing on, and i think that is our top priority >> you concerned about the political outlook in the eurozone, whether domestically with merkel's government or countries like italy >> i'm pleased whatever i can draw now in the last 12 hours, they had agreement and certain alignments on the immigration topic. it's vital to have a unified europe and that we have agreement on certain key questions like immigration, but also banking, capital markets union, and personally, i think we are going into the right direction, therefore, i'm welcoming, actually, the decisions made last night in europe we need strong europe.

we need to be competitive and europe needs to be - >> if we talk about trade a little, clearly, there's a agreeing protectioni isis isistc from president trump and eu in terms of response. if we see full tariffs imposed on german auto makers, is that a big blow to the german economy >> you know, i just don't want to only focus on the german economy. i think overall the trade and tariff is something which at the end of the day limits growth globally i'm a firm believer in free trade, and not where you poster riffs. i think and i hope we get better agreements and the politicians can align their views because globally i think increased tariffs reduce growth and that is bad for the economy >> what's president trump's

effect on the economy? >> i'm not here to give my view of president trump, but i think we're all interested in unified approach to the key questions like immigration, trade, and i'm still very hopeful we find the right solution >> interesting to hear in that talk about political developments in europe over the 24 hours, and merkel bought herself time, not sold the issue, but bought herself time euro rallied on the day. on the trade topic, a number of tricks whether it's the nato meeting, brussels meeting, or u.k. meeting that's the tone he'll meet >> did not want to go there on the politics you tried. >> right >> but, clearly, mike, i mean, for the german economy and import tax on autos? >> sure we all want a unified approach, but i don't know the president wants a unified approach that was the unspoken piece of it >> talk about the dax whether because deutsche bank had a terrible first half of the year

or autos for the last month or two, down 5% for the first half of the year. >> true. >> staggering. >> banks are a part of it, right? >> deutsche bank certainly it, down 42% as we know, but europe is struggling much more than u.s. has even though the dow end negative for the half. there's definitely more struggles happening. >> the markets allocating the anticipated pain in a way that's more away from the united states than here. >> everybody loved europe going into the year. >> that's right. that was the other piece of it >> hurt so much because the trading partners are the u.s. and china. >> you can say the prospect of rate hikes is pushed back for whatever reason that is, and that's hurt the banks. everyone last year talked about rates globally going up, and now it's just the u.s., and that, again, is no help for deutsche bank a lot on his plate stocks staging a rally to -- actually, they lost the rally, but still managed to close higher up next, the "fast money" traders' takes on whether there's more stormy weather ahead for stocks and today is the 8th

anniversary for tesla's ipo, stock up nearly 2,000% since going public we'll debate whether celebrate it by buying the stock or take your profits back in a couple minutes

welcome back to the closing bell, tesla drivers tend to be big fans of the elon musk and electric auto maker. >> i hope he's successful and

profitable so i can keep driving this car and get another one. >> i think he's intuitive, amazing businessman, takes a lot of risks, and i think you need to take risks if you're going to move things forward. >> and those risks have translated into a nearly 2,000% gain since ipo eight years ago today, but there's still plenty of doubters. we'll debate whether the stock shifts into overdrive. later, why the hot trend of taking helicopters to wealthy resort towns in the nation sparks a battle between fliers redents of the hampton at the front line next on "closing

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we've got a news alert on kraft-heinz. meg? >> what appears to be a brewing ketchup war between the u.s. and canada, we have a statement from kraft-heinz saying as a global

food company they oppose taxes or tariffs on the products nafta has been in place for 20 years and developed supply chains across north america and opposed to change that impacts ability to seamlessly move products across the border the washington post reported canada looks to fight back on products including ketchup saying that this weekend they will make a trip to tomato country in canada with plans to levy about 12.6 billion in tariffs on american-made products including those made by heinz in response to the tariffs on canadian metal, sara, that statement from kraft heinz >> not just ketchup in the cross hairs, meg, thank you very much. kraft heinz sold $2.2 billion in products to canada last year, 8 of the company's total sales, however, only 20% of the company's canadian business is

imported from the u.s., and it is that cross border import that is hit with the new tariffs, and that's a problem, clearly, hit as food makers do. coffee, ketchup, mustard, mayo, salad dressing all hit by this scenario >> this could be why the market faded in the last hour i mean, the fact that we were getting some kind of conclusion this might happen. you don't want to put too much weight on the news >> investors bailed out of stocks in a record pace in the last week, and outflows from global stock funds totaling 30 billion, the second highest ever and second time investors poured money into treasury bills. fast money" traders are here to talk more about this, and, so, tim -- >> hi, sara. >> hi.

>> hi. >> that's a signal to buy. is it that negative enough you are jumping in >> the guys at bank of america do a great job on this analysis. sentiment not oversold enough, flows not extreme, especially in emerging markets despite of seven of eight weeks out i think the macro background has not reversed suddenly, even though i do think there's head winds there, and i think we're frankly very range bound, and i you saw what happened with emerging markets, there was a lot of hedges taken off, not for good, jbut oversold in the shor run. >> mike, your take on the level of the ten-year attractive enough in its own right to get people into bonds because they like the yield because interesting it's talked about on a day where the big banks, wells fargo and dividend yield 2.9%, banks looking at yields higher than the 10-year, why so atrabt

i -- attractive >> i don't know that it is, but th