areas that were hit by hurricane florence a couple of weeks ago we'll be keeping a close eye on that and what the impact will be on these financially >> absolutely. in the green right now thanks for watching power lunch. closing bell starts right now. it's time for the closing bell hitting a seven year high. we have wall street's top analysts to join us to talk the impacted rates on his sector plus comcast closing acquisition. the 21st century tells us what deals could come next. billionaire making a big new bet in the food and beverage space. we'll tell you about his new position coming up and ceo of adidas weighing in >> we think that the better it

is >> what he told me about his company's new massive sports deal the closing bell starts right now. ♪ good morning welcome to the closing bell. >> more to come from the interview. let's check in on the markets which are high it has been a yoyo session the dow coming back after being down at the session low. as you can see it is green for the three major indexes. >> indecisive. interest rate worries still front and center ten year yield hitting the highest level earlier before stud dig >> we have full coverage of

today's big market stories sarah is covering that we have more rising rates. looking at how rates are impacting autos. let's start with you >> okay. so adidas is one of the companies that has a lot of exposure to the greater china region it's not the only one. it features prominently but here in the u.s. there are u.s. based companies that also get a very large portion of their business. outside of the technology world it has its own weird subtle knew answers. let's take a look at the names we all know and love take a look at phillip morris international. 16% of the overall revenue

picture. also tiffany and company on the luxury jewelry side of things. it is a very key market for them nike a big competitor gets 14% of its sales from china over there. boeing is from china and then chevron on the oil and gas side of things. so a number of big very well known s and p 500 companies do a lot of business in china could they be some of the ones investors look towards as it starts to play out with regards to tariffs and the biggest economy in the world and the second biggest economy in the world. back over to you >> thanks very much for that trade tengsions are one of the factors. sarah has more on that report. the global economy won't be as strong as expected this year

and next the fund predicts the world will grow 3.7% and it is good and slightly worse than 3.9% forecast that the fund put out why the change trade tensions and tariffs also the slow downs we have been seeing in the immerging world and the stimulus effect starting to wear off. i am cutting it to 2.5%. notably this is the first time it has downgraded since back in 2016 and it says things will get a lot worse if president trump follows through on china and then china retaliates. the global growth would fall more than .8% and remain roughly .4% if those tariffs comes about. in terms of who gets hurt the most the u.s. and china. china would get hit particularly

hard these are themes that the imf has been warning about for a long time. generally you can question sort of the ak accuracy >> and clearly the tariffs are something that could come in later and make things worse still. in terms of the downgrades which was only slight what was the factor driving that? was it the aspect of a late cycle slow down or this em slow down on the way it will mix in >> it will eventually become a neutral effect so you could see a slow down there not to mention if the

trade war gets even worse. the other story we are watching is the rise in rates steve has the look at what higher rates could mean for the economy and feds >> and trade is a part of this story. interest rates are rising. the question is are they rising for the right reason or wrong reason is it because of growth or inflation that could be without the growth rising u.s. bond yields are a symptom of u.s. strength and should not be feared the trouble for stock investors is until now they have been able to have their cake and eat it too. you know the list is pretty long low unemployment, better groechlt tariff as well raising prices and a growing deficit higher rates could put a grip in both hurting sectors but not

derail it. also push up what the government pays for interest. higher rates could be slow the economy to a more manageable growth rate. it is pushing up rates by maybe another full percentage point from here. the current range, not a bad place to end up. that's if rates are rising for the right reason, growth and not the wrong one, inflation >> i'm curious as to why you think this rate move is happening now. it seems pretty abrupt just because the fed has been raising rates for the last few years and the economy has been booming >> i have watched over the years as i'm sure you have the market react in kind of lurches rather than on kind of a smooth slope it kind of ignores something that all of a sudden it lurches to the reality you know, we were in that range

where 3% range i think what happens is bond market moves to a new range. i think that's where we are. one of the things we want to figure out is this range, the middle of that range or the top of a new range if so you can get to 350 or so you can see how that feels and maybe go a little bit heeer. i don't think it's crazy to think about a 3.5 to 4% ten-year yield especially if the growth is real. >> thanks very much nar. also taking a toll on the autooh industry >> when you look at rising interest rates you really skr to look at the monthly payment people are making. it has been movinghigher

>> it would be the four best years ever in terms of auto sales in the yoits i get this question from people regards interest rates and auto loans chls what about the 0% deals you always see advertised? it is more a tease than reality. look at it down to 5.6% in september of this year. down considerably from where it was in 2016. chart of the day general motors versus ford over the last year. not a good looking chart here for either company for gm is story is declining sales in china for ford it remains the same people want to know what this restructuring is going to look

like in the absence of clear dictating. it will be filled today. it is being filled by pushing the stock down lower back to you. you look at the spots and that's debate about whether it's trade, whether it's something about the economy or whether this is company specific how do you think about that? >> it's a little bit of everything it is company specific with ford in many regards and with general motors all moe everybody you talk with will say mary and her team deserve credit for making all of the right moves over the last couple of years that stock is below where itwa at $33 a share that is an indication that investors look at ford and they say -- or gm and they say how is this company going to grow in the future beyond what they doing already? it is not a good sign that we have seen some of the moets profitable years for general motors and this stock continues to move lower. >> all right thank you. and despite some of these

problems international economic growth the markets are higher today mostly the dow is up 5 points nasdaq continues to balance. joining our closing bell exclang michael and steve is back. cnbc contribute to and rick at the cme group. michael, there are problems and among them rising interest rates, slower economic growth and china exposure how is this digesting all of this >> i think with uncertainty. you look back at the comments through last week. they talked about we are far from neutral we are removing acocommodation. it is we are not in goldie locks economy anymore. it resulted in the market getting a lot more rate sensitive. it is an issue because it is going to test the stability of the credit cycle you have had so much issuance.

so the take away, i don't know if we really know where rate are going to go yet. i think we do know that growth has been above average far long time rates have been below average far long time. it probably makes sense to have a medical report folio that can get some benefit from a rising rate that's not super easy to find. it probably means an upgrade in quality, right and making sure you're not overlevered to poor credit >> and they just touched on powell's comments. so all of this stuff has been swirling around. irkts imf is the new thing china has been swirling around is it all about powell it can't be all about things we have already seen. >> but talk about the market moves for the last couple of

days we have had quite big falls but recoveries which you could frame as encouraging the one thing that has been true is very divergent sector performances whether or not the markets topped out overall is now the time you have to pick and choosz going forward. >> we are going to year end. we have seen hedge funds going out of business at a pretty good tick the average return is 3% this year it will help people get rid of what they already owned in the open market. we are in october. s and p best season is october november is best for iwm, for the small index. you'll have to be in the small if you --

>> so rate sensitivity is the new name of the game where are yields going from here >> it is only higher i just think that this is a strange discussion to have think about what steve said. he said rates are either going up because of a good reason which is growth or bad reason which is inflation let's think about that bad reason far minute. if it's such a bad reason i don't understand why every central banker in the world is going to church every week praying for it to see more of it grow disappointed when the stocks aren't taller. a little inflation is good you own a house, own the stock market it will take better care of you. this notion of rates going up being a bad thing, i understand it don't think about it so much as rates. think about it as all of the costs. pretend you a floating mortgage and rates are going up how would you feel if you had a fixed mortgage and rates are going up

what's happening is deleveraging these are all very welcomed signs. think of the discussion we would be having if the economy was cooking and rates weren't moving up like pre2016 the election. then there's a nervousness the economy seems pretty good. what's wrong it's waiting for the feds. waiting for normalization. listen, where all of the metrics are and considering where rates are i think this is still a very large portion of goldie locks. >> the other point is that the u.s. growth is better than a lot of developed nations that plays out too >> if you look at that across all different regions globally we still beat bay large margin every other competitive country. if you believe in catching up then you want to be somewhere

else >> i think that the problem the that the market is experiencing is if you discount a growth stock you get a very very different number than if you discount it at 3%. that's because we are seeing a rise in short term and long-term rates. on the stock market side it is something to be aware of they don't have outside of china. >> as long as rates don't go up too far too fast thaen u.s. can lead and technology can lead >> right i think for sure i think they will probably if there is a rate rise i think you'll see the rotation continue

and whether it's health care or insurance, banking, thanks that might been fit some. >> talk about rates real quick he talked about rates rising every housing discovery has happened the knee jerk reaction is housing stocks >> home builders are getting crushed. >> if you look backwards every other home recovery has happened in a rising rate environment are they rising far good reason or bad reason? there is absolutely no reason rates should rise. that's the verdict it has made >> thank you all very much for joining the closing bell exchange today we have 43 minutes left of trade and we are essentially flat as we approach the close. coming up the take over of

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welcome back to the closing bell we have lerned that acquired -- later disclosed a presentation with very little criticism of the company touting starbucks growth in china. its insulation and domination in the coffee category. akman's firm high did highlight in stock performance but seems to be on board with plannagement team writing we believe starbucks' recent challenges are fixable with appropriate

management execution they said best case scenario starbucks posts a three year irr, worst case 12%. they said we into our stra steejic approach and value constructive feedback on long-term shareholder value. they say we look forward to maintaining a productive dialogue with akman as we do with all of our shareholders the move put the stock into positive territory for the year but as you can see now up about 2% on the day. back over to you >> wonder if it's a good time to sort of recap some of the ackman high profile >> a lot of food chipotle for the current

holdings consumer names have really been a big focus of his lately. he invested in lows. he invested in nike. we have seen this play book where he is investing in these consumer brand names that are more large cap stock and tend to be a little less volatile. it is up about 16% year to date. >> all right >> thank you >> uh-huh. >> kudos to jim. he was saying a good time to get in >> yeah. >> it is interesting in terms of the trading. 22 times consensus today which is the report they released. it's in the a market discount at the moment >> they always got that evaluation >> is it going to come as fast moving forward >> that's a big part of the thesis in this presentation and for others >> and arguing that some of the

risks have priced in we'll have to see how it plays out. >> certainly vag good day today on that news all right. we have about 37 minutes to go before the closing bell. dow is down 41 all over the map. nasdaq losing most of its gains. we'll see what happens in the next 30 minutes or so. the russell is down. still ahead the ceo of adidas about a massive new sponsorship deal it ends the debate once and for all about the proper way to pronounce his company's name a massive new sponsorship deal >> it is the third biggest deal. >> so many different pronounceuations >> h -- pro nununciations. a wlle back here on the closing bell in a couple of minutes. making my dreams a reality

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rjs welcome back to the closing belt we are lose ago lit built of steam as we approach the close nasdaq holding onto positive territory. earlier today we interviewed adidas and before he left i invited him into the conversation to ask the burning

question about the new sponsorship deal they just signed watch. >> congratulations on the deal talk us through it supposedly it's the third most expensive deal ever. >> it is the biggest commercial deal ever. it is the biggest and we really wanted a club in london. it because club and until 1994 it was a no brainer to take that we are very happy and 2019 they will be playing with three stripes again. >> and there's new ceo changed the manager. was that a factor as to why is the right time they could be going back >> no. we are looking to find and it's a global brand that's been un r underperforming. we believe there's so much upside there is less about that change. we are just convinced it has to change last year was probably the worst season we had.

it is one of the best that were made with ramsey it was still a football. >> how big overall is soccer for you? >> it is actually from a commercial standpoint not so big. football is by far the single biggest sport in the world 2 billion people watching world cup. we sold 8 million jerseys within seven weeks. it is by far the biggest >> i hope you timed your investment perfectly and that it comes back to arsenal as well this season. >> we are convinced they will. >> they had a good weekend >> yes >> we say uniform. >> you said jerseys. >> we also have a fight about how to say adidas. >> i will clarify, adidas. >> so it was called adi.

so the right pronunciation is adidas >> so hii'm right. >> adidas. >> but he gave you permission to continue to say it wrong he also showed me on his phone some of the designs for the new kick which was great to see. i wasn't allowed to take a picture of it. >> very cool thank you for letting me join you. >> you're welcomed any time. i know how much it meeans for you. >> how critical he was about the u.k. and europe. he thought it was the worst in 20 years for yeurope he says make it a good deal. they have some skin in the game based in your sell a lot as for china and trade it won't effect us even if the new

tariffs go in. what we make in china we sell in china. when it comes to the market the biggest source comes from vietnam. >> he is having dinner with kanye wednesday night. i asked is that good or bad for your business. he said he's such brilliant creator that you're not going to get some sort of mainstream opinions and kanye has certainly helped with the halo effect around adidas. it is in places like the united states he said growing faster than nike and under armour even though the stock has logged over the last 12 months. >> it was fun. >> yes time for cnbc news update. hi >> thank you very much president trump declaring a state of emergency

kpped to make land fall tomorrow as a category 3 or category 4 storm. rick scott had this warning. >> if you're under evacuation order listen to it leave now. >> do not take a chance. do you not know if roads will be closed you know, we'll do everything we can to help you but do not wait. >> investigators are figuring out what caused last weekend's deadly limo crash. officials were back out at the crash scene trying to determine why a stretch limousine ran a stop sign. and brooks koepka won the u.s. open and pga in the same season he came in ninth the award is voted on by other tour players

con garage lak congratulations to him that's news update >> thank you comcast a more than 75% stake in that company. joining us now to talk about that and all of the other media deals, vanity fair's new establishment we welcome chase cary and formula one group, julia. >> thanks so much. thanks for joining us today. >> nice to be here >> you're a man of many hats including ceo of formula one and nonexecutive director of sky which of course just sold to comcast and formula one has a distribution deal. you're involved in many ways we have seen this big round consolidation. do you anticipate more media deals ahead? >> i think you're in a period of clang that will continue

scale matters. i think to be successful you need scale that enables you to compete or really unique franchises that enable you to distinguish. >> and now of course liberty media acquired formula one a couple of years ago. do you anticipate more consolidation? >> it's not really what i'm focused on i'm focused on making everything it can and should be we think it's really unique in a world. other forums get the global fla nature of us distinguishes what we have. while it has great fans around the world it hasn't achieved full potential my focus is to enable that to be everything it can and should be for its fans >> when you look at how to grow its reach and how to get more die hard fans and reach more

consumers around the world does the fact that there are fewer players change your approach does it make you think more of the tech buyers? >> it probably doesn't change. i think they are a bigger and bigger part of the world we are heading into our strategy is quite straightforward. you to make the events true spectacles to capture imagination. we talked about 21 super bowls we got fans to connect it all of the platforms available around the world and we have to grow it in places where today we really aren't achieving our potential >> yeah. we had a question about all of the media deals. i wonder how we are going to look back on the murdock selling todisney

>> i think what is true is that in certain places a lot of unique scale to compete. when you look at the resources that exist with players like google and amazon clearly they are deploying enormous resources. it is to actually give it away so the nature of this game is competing. the volume of product that's being produced is clearly going to have impact on the world and how you compete in it. i think there will be winners and losers from a content perspective. i think unique event content will be winner i think all of that will drive change and i'm not smart enough to know what it all looked like but it is clearly going to

change >> i want today ask you about the deal for sky which you're uniquely placed to give us perspective on what wlo did best out of that deal sky was trading around 7 pounds below the 8 pound level. the final deal over 17 pounds. who is the ultimate winner for all of the players involved in that deal? >> well, i mean i think there are probably multiple winners. for fox first we had gone into that initial transaction owning 40%. we clearly said over time we should own and control or modify to be minority stake it's not a long-term place to be. you know, fox acted on that. other events transcended i think what came out of this is in a world of unique franchises

and once it sort of put a brighter light on it i think the true value and credit to the sky management for the business they built there and i think as it had a brighter light shined on it competition drives everything. that's going to always effect values >> and just a final question about your digital business. you subscription service you also have partnerships with part of the social media platforms. how big could your digital business be? >> it is an important part of our future it's not a part of our traditional broadcast partners most of our fans are going to watch the core product on our linear platforms for a long long time i think it is for fans and consumers to engage for creating for twitter, netflix, snap chat,

those opportunities for the over the top products which is a product geared towards our hard core fans. what you think you need to do in today's world is again creating additional opportunities they are not add on products but great product taylored for fans and tailored to fans but make sure you're not ignoring the traditional fan that wants to enjoy a great race on a sunday afternoon. >> great thank you so much for joining us here at a time of so much change and excitement and for formula one racing back over to you >> all right thank you for bringing us the conversation so the impact of rising rates, a rare interview. >> and papa john's getting a big

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the best equity research analyst and research team survey >> i think we'll continue to see an active market across the sector when you look at the landscape a very short period of time. a lot have become relatively small players as you have seen the likes of amazon and others

immerge these well capitalized global platforms it's causing a lot of anxiety. i think you'll see continued consolidation. >> can you name some names for us >> i certainly won't put anybody in play here what i would say is the big media companies have quickly become relatively small players. it is a huge scale advantage even if you're a large player covering the u.s. market you're at a disadvantage. you're seeing a rush to scale and i think it will continue >> do you think it is still a significant opportunity if you will when you consider the likes of at&t and what they are trying to do, the sort of metszagssaged

the ones like meg whitman? >> yeah. absolutely the second screen is a growth area in terms of time spent. i guess what i would say is in the premium content world the large screen dominates it will probably continue. there's a huge opportunity and i think we have seen models that have worked very well. they have become huge businesses very much fuelled by mobile. i think the premium part will be a large screen format for the foreseeable future >> i think netflix is one of your top picks it has been a tough three months ever since the big disappointments. stock hasn't found its footing what do you do next? >> yeah. we think the pull back you have seen in growth is giving investors an opportunity in net

fle -- netflix. they have exceeded on a fourth quarter basis by over 3 million ads. you need to put that into context. we think this business has a lot of room to grow. we think it is a highly profitable business already and they will can't to ramp. we t mode is deepening as the company continues to build out studio production around the world. they made recent announcements on that front. scale advancements are under appreciated in the marketplace >> talk us through why you have to buy on disney and is the purchase crucial and are you pleased it has been chopped out of what they are buying? >> i think on the disney front this is one of the few traditional media companies that has a clear path to building a big business people tend to ignore some of the other assets that are performing well and focus on the negatives like espn that's been

tough. it has gotten less bad we think the brands they bring when tlhey launch create a huge opportunity to build a big business and profitable business i think fox will help them along that way, along that path. >> okay. we have to leave you there thanks for joining us. >> we have ten minutes until the close. it is around the flat line for most of the hour it has been quite a yoyo session. >> so much for your theory that when you're on the air the dow goes up. >> no. the nasdaq goes. >> oh, a new one today >> yeah. why the firm is warning about e commerce growth. that's coming up next on the closing bell easy to analyze and?

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it's not just a cost point but very much a belief that walmart will do very well in a way that kroger isn't in capturing more of that online market share by 2025 and also that they can -- >> so it's really an e commerce story? >> yes and also bullish on walmart's core business. >> hards to believe it is still only 2% buying it online the race is still on stocks are only 11% sold online and that's going to grow and amazon and walmart are the ones doing well from it >> we will see

and into a meeting in june both told cnbc they don't comment on market rumors the stock likes it though. up 9%. unclear whether any sort of deal like this it would be combined with wendy's all i could tell you is it has a long history in food it had a big domino's position it did own with a by's four and a half minutes of trade. >> rises rates are impalkting the financials number one bank altsanys will give his picks coming up later on the closing bell.

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session. we had positivity. you can see we are around the flat line as we approach the close. it was quite a bit turn around half way through the session when we start today get that positivity it has allowed us just to come back towards that flat line here we should point out china stabilized today it is also the international picture definitely better today than it was yesterday. a lot of diverse jens. >> i think the important thing is you get the bond market and stock market quiet down. yields went down today a lot of debate about this warning. they make codings and for the boating industry and aerospace

weakness higher raw materials here is the question for earnings is this a broader warning for the market >> the banks on friday ringing the bell here at the big board is qts and corporation we are down 56 points on the dow. slightly lower that does it for the first hour of the closing bell. back to you. >> welcome to the closing bell mike santoli let's take a look at how we are finishing up on wall street. stocks waivered all day long and closed mostly lower. s&p down for the fourth day in a

row. it did snap a losing streak. lost a lot of momentum >> bank stocks getting hit today. coming up wall street's number one bank analysts will join us to determine who will do best in this rising rate environment joining us is from bank of america leading the job today was walmart. big loser down 10% mike couldn't hold onto some early momentums. still fears of rising rates. it is ready to bounce.

big tech stocks were coming back in the morning or if you thought the market was a little bit fragile here both of these things are coexisting today sit kind of a push >> it is a big dissection in terms of materials towards the top. markets trying to find it in that sense >> a little bit. >> it was all about the ppg warning. you had it kind of fell apart after a warning. i think investors have a little bit of a raw nerve. >> what does it tell you

>> i think it is digesting the idea that rates could move higher we haven't seen that environment for quite a while. i think the markets look pretty healthy. i think it's more of a stock pickers market we wrote a note about this the other day. we pointed out within every sector there are some companies that have taken advantage and locked in long dated debt. you know, i also think this is a time to really focus on balance sheets rev raj is starting to become more of a risk. >> the two sectors i would watch out for are the higher growth kind of internet tech companies that are in communication services that's a sector that we watched

a cup ofrl weeks ago the other area which has done perversely well despite hiring rates. i think when you look at utilities income investors will move back in an environment where we are getting yields in your asset class they are under the most pressure today. >> it is the down 20% this year. what's your view on that >> i think that the consumer

plays, housing, you know, retailers, like the whole consumer discretionary sector looks a bit risky at these levels saving is becoming more attractive as rates rise your decision to spend and borrow versus save is skewed more towards saving i think it will hurt some of the housing areas as well as discretionary items. it is if they have been punished too hard for what's happening in the under dp lying economy >> it looks like they have been punished too hard. if you look back two years the

same level in the sort of housing related stock as we were in july of 2017 it seems like it's basically been a huge thing it's an early cycle sector i do think there's caution without it being a huge warning for the economy. >> we have more coming up. we have the story back there >> the u.s. granted an exemption on paying tariffs used in razor brands >> it is being levied on

japanese and swedish steel they hadn't passed it on in terms of raising prices on consumers. they did receive this on paying steel tariffs. back over to you >> all right thank you very much. there's a lot of exposure. >> on the tariff side and on the trade war. >> and every company lined up as consumers of steel and if one gets it it's hard to deny it personally you don't really see the stock doing much i wonder how much the steel cost content is if you think about the tariff impact is there a specific sector you would stay away from right now with no

talks on the horizon and not a lot of progress being made and the threat of more tariffs looming. >> sure. i think it is an overhang. >> so retailers that import a lot of cotton from china or autos or manufacturers that import raw materials from other areas, those are 2 areas under pressure and the exporters one thing i want to point out is that we basically looked at the market and we looked at each segment. so i think the market is actually pricing in more tariff risks than it would seem when you look at the s and p at or near all time highs. what's interesting is that we

have seen very significant multiple compression in the riskier areas. i don't see these as areas you still want to reduce exposure to we are pricing in a lot of potential risks from higher input costs or slow down >> do you agree with that? >> i believe on a sector by sector basis a lot of stuff has been punished. i don't know. >> estimates haven't necessarily come down but prices have. >> yeah. >> let's get onto transports they closed near session lows. this is the fourth day index has been dragged down by american airlines which is trading more than two year lows back to september 2016 what kind of signal is that sending? >> oil is up it is the cost push issue.

i really do think across the board you're also seeing some of the freight carriers trucking has held up well. they of course have to pay up more too i think it's an economy that's running hot. a lot of sectors are pretty stretched in terms of resources. >> we hear and they kick off earnings on thursday do you like these evaluations? >> twlas sector? >> the airline stocks. >> i like industrials overall. i mean you're right about the cost pressure. i think that's the number one risk to watch. what i would watch are, you know, airlines may be more labor

intensive. that's the way we need to kind of rank our industries you know, how much oil they need you know how much oil impacts their margin that's our risk. in that calculus it doesn't come out as well as other industrial sectors. >> speaking of transportation we have a market flash on tesla's chinese competitor they own 7.7% of the tesla shares it has taken a sizable stake in the chinese auto maker which many people look at and say this is a company that will challenge tesla in china it is already the world's largest electric vehicle market even though they are just starting to vehicles there

you have already the number one outside investor in tesla taking a sizable chunk and it is buying 85.3 million shares. up $500 million in neo that's why the stock is moving higher back to you. we have seen lots of different investments from investment firms or auto makers to technology. they really challenging tesla here or is it in people diversifying >> it is more diversifying options. it is too soon to know it will be a huge threat to tesla. it is getting a lot of advance remarks from those in the investment community and in the auto industry who looked at what they want to do. they are just starting their production let's see how thiez guys do as they start to roll out vehicles and then you can say, yeah, they a true threat to tesla

>> tesla is up today it was pretty bullish. >> yes >> what's your take on that note >> it was very bullish the fact that of course you a price target above thekind of floated take private price of 420 is interesting it shows it really felt as this analyst makes the case that tesla will have this key role in the future of all transportations. it will be a key part for it i don't think the market responded that aggressively. normally you're very much near the low. i think there's a lot of show me aspects to it not the least of which the analyst says they will get past this. it remains to be seen. >> and optistic targets when you get to the evaluation page you're like this is a lot of hope built in here >> a lot has to get done to bridge this company from where it is to being in this position.

>> and it's a good 22% gain. the stock is way off though the initial rise that it saw it gets punished on the tariff trade china headlines. >> yes >> everyone assumes that market would be far and ahead of the u.s. market in terms of adoption so, you know, people want to believe. it is still so far between here and there because of making it work on a corporate level. >> thanks. >> final thoughts. you said you liked industrials the other sector that stands out is financials. we have them reporting on friday what's the expectation there on your top pick? >> i like financials for the long term. i think that it's basically -- it's a transformed sector. it was the problem sector in 2007 it took the market down with it. what it has done over the last ten years is it consolidated

capacity a lot of companies went away financials are as they were in 2007 and 2008. i see it as kind of a high quality income generating sector i know it sounds crazy because it was the toxic sector but it often happens. the prior prices ends up being one of the best performers iffuate until it kind of worked out issues there's regulatory, cash return. i think it's a lot of drivers for financials going forward another sector that i like, i don't necessarily like new tech but i like old tech. i like software. again, you know, i see it as kind of a mix of yields. so it has gdp sensitivity but it is also paying a growing dividend yield >> okay. thanks so much for joining us.

>> thank you >> great to be here. we have 45 minutes left. i'm zoning out we have 45 minutes left of the show we will finish trade 15 minutes ago. >> 15 minutes post bell. up next we'll talk about rates and how it will effect the sector >> and there's a new task force that's going to examine insider trading rules. some say current laws benefit the most we'll debate that coming up. >> we want to hear from you. you can reach out to the show coming up. closing bell back after a quick break. anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.

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i don't like what they are doing because we have inflation really checked and a lot of good things happening. so i will say this we are normalizing money and that's good. i think we don't have to go as fast i want to be able to pay off debt also i think very importantly that the numbers that we are producing are record setting i don't want to slow it down aer even a little bit especially when you don't have the problem of inflation i like to stay uninvolved with that >> he likes low interest rate and he doesn't want to and he understands why the fed is making the move he is making he hasn't spoken about the opinion. the president feeling free to

sound off in terms of his opinion on the feds moves but not issues any direct kplands preserving the independence. i like to stay uninvolved. among the reasons the president sited for preferring low interest rates is he wants to pay off debt talking about u.s. national debt and increased borrowing costs going forward. we'll see if he has any further comments on that when he koims back to the white house. the president is heading to iowa back over to you >> it sounds like though she sort of the rhetoric a little bit and criticism of fed, what i just heard from him. >> yeah. he seemed to be explaining his position on interest rates but also explaining that he understands why the fed is doing what they are doing. he said he talked about the normalization of money he understands that what the fed is doing is trying to get back to sort of a baseline here as they call it, some times reloading in terms of more

ammunition in case there's a recession. >> okay. thank you very much. >> you bet speaking of rates, banks finished the day lower levels not seen since 2011 >> joining us now to discuss what banks are attractive in this environment very good afternoon to you thanks for joining us. >> thank you >> congratulations on the ranking. >> thanks very much. >> before we get to the stocks showing your view as a whole what are people suggesting >> i think the group feels pretty washed out. if you went into this year i was

telling you we were getting tax reform and the economy would do better than we thought most would say we should own financials and it feels pretty washed out right now the group trading about 35%. we are getting into earnings that start on friday i think the earnings will be okay i think okay might be good enough >> and when we consider the interest rate environment as we were just discussing, is that one of the key factors that is influencing these stocks whether it should or shouldn't and as the outlook going forward attractive enough? >> yeah. i think throughout the year it had depressed the sector the bond market was telling us something about the economy. now that the curve has steepened a bit maybe it is more sustainable than we thought. it should be good for bank

stocks >> they have three or four where they will benefit from rising rates. >> the fact that we have had this under performance despite you would have thought had supported the group has it caused to question what's going on in terms of how these banks work have they not had the leverage they are used to are credit cards going to pick up from here i'm wondering what the rational is they are close to peak earnings they have enjoyed it without passing on the costs yet so the margins can't get much better from here i think it's a fair assessment i think i would be into the quarter. after the quarter i would be

overweight, the names that are relative to the group. banks are no longer under. >> like who? >> citi group, for example they are doing a 17% return. city is doing 10.5 it is over the next two years. i think it's doable. >> they need to rationalize the franchise. they have had some active ip ve - investors. i think it is at the time where it is going to happen at the doorstep >> which do you prefer >> it would be bank of america

and citi group bank of america has a little bit of room to catch up. i hi the big banks are gaining shares of consumer deposits versus small bangs they are leveraging big brands and disrupting themselves by capturing millennials through their apps >> overall regionals >> yes >> which is a better bet >> i would say the view that they are able to leverage their view to gainshares >> is that something you think will arrive and how big of an extra kicker could it be to the sector as a whole? >> there's not a lot of political support to help big banks but there has been a

change over it is not on liquidity. i don't think there will be a big wave >> thanks for joining us congratulations on the number one banking. >> thank you rising rates may be having an iact vmponalue stocks. we'll take a look at that next to explain

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>> welcome bachlkt we were down slightly and well off the lows of the session nasdaq holding onto slight gains. time for cnbc news supreme court justice hearing his first case today retired justice seated nearly for his successor's first day. as hurricane moves quickly towards florida's panhandle. residents boarding up the windows and president trump

declaring a state of emergency as the storm is expect today make land fall tomorrow. a number of planes are getting heading north. they are serving as a safe haifren for all of the planes in harm's way it welcomed f-22 raptors from florida. 15 nominees for the rock and roll hall of fame including six first time nominees. devo, congratulations to them. that's the news update back downtown to you >> okay. i'm surprised stevie nix wasn't already in there growth stocks have been taking a hit lately. we have more on the relationship between growth and value stocks.

quite the debate we have had it before. >> it will probably keep going too. yes. there has been a growth. over the course of the year it has maintained its advantage growth is ahead by 12% it is what we have seen since the overall market high with stocks really pulling back hardest as rates have goneup you did see very short setbacks. it is not usually the time that

growthpicks up. >> you're betting on financials and you're betting on some more slower growth businesses another point, because it is outperformed the s&p is about 54% growth and 46% value based on these indexes i think it's one thing you're kind of wishes for a struggling market for a while >> abdomen you talk about how facebook is in the category right now. >> relative to other names

it is also to this >> yeah. >> thanks very much for that we'll see you back in the desk in moments from now. coming up the one time sheriff of wall street as u.s. attorney by president trump has a new role that could make some wall streeters uneasy. we'll debate what has prompted his return coming up next. >> and forget about elon musk. richard branson says he will beatthem both in the space tourism race ke has his own personal plans to ma history we'll have details straight ahead.

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is helping hunt them down at their source. because the faster we can identify new viruses, the faster we can get to stopping them. the most personal technology, is technology with the power to change your life. life. to the fullest. calling insider trading laws outdated and unclear it is on insider trading which will propose reforms intended to protect investors. >> they argue changing the laws will befective in trading deals. joining us now to discuss this is rebecca at la grand law

reb rebecca, do you agree with that if. >> the message that they unclear and outdated i don't agree with the fix i don't think what we need is more regulation. i think they don't knowledge the fact that arguably insider trading can be a good thing. and there's no way to complete complete informational parity. i think the laws are outdated and unfair to defendants i think what we need is more of them i think what we need is less >> what do you think we need >> we basically have almost 60 years. i think, you know, it applies where there is criminal intent involved the sec has civil jurisdiction it is a -- that is a distinction

that has been made corporate council able to provide insiders as to where to draw the line. it is setting forth the insider trading. it is under the anti fraud statue a different one was whether merrill lynch would support the notion there is always going to be and always going to be debate. we as lawyers, it's our job to argue why the law does not apply to client. changing the law to provide clarity, i think there is

sufficient clarity right now >> you mentioned that insider trading could be a good thing. it does sort of incapsule late this huge range of opinion about whether or not it is even a crime or should be a crime or this idea that a fraud on the market is something prosecutors have to prove. wouldn't a law help by what is and what isn't prohibited? >> well, i certainly think the law right now is unclear i think the variety and decisions you have seen from circuit courts struggling with what is and is not sufficient to account as criminal insider trading shows that the law right now is unclear i do think it's unclear in a way that is to defendants. so if everyone could potentially be subject to decades in prison for conduct that no one is quite sure how to define, that's unfair and puts it in a terrifying situation the bigger question is yes, why

do we have these laws in the first place? who are insider trading laws trying to protect? do they do it successfully and what's the purpose of markets? it's so that people can invest in companies and you're hoping that they are investing based on the markets have been complete information. there are real arguments and have been studies suggesting when people with the most knowledge, insiders trade that the prices of those stocks are better, are closer to what is the real price it can be a good thing it is what is most troubling of the current laws it is not like -- >> isn't there a difference between price discovery and insider trading? i don't understand how it could be a good thing if you're doing it in a sketchy way. >> right if you're hacking into someone's computer system that's sketchy and illegal.

there is plenty of ways to go after people who break those rules as well. when you're talking about the markets as a whole i want to know when i'm buying a stock that information is priced in already. if somebody knows that something bad is about to happen i would rather there be trading on it already. it will bring the price down i will be buying it as a fair price. there's not necessarily a victim here >> run things off for us could things be refined a little bit further or is it too late to leave things as they are >> currently take further steps. we are a common law society. in a civil law jurisdiction there needs to be a precise statue that governs. we have sufficient statues and

civil enforces have developed protocols. i think we are okay where we are. everything can be tweaked. when you start trying to change the statutes it ends up being far less clear >> we will leave the conversation there won't be the last time we are talking about this thank you. >> thanks very much. so switching gears, hair growth is nearly $4 billion industry it turns out. coming up we'll talk to the cofounder of a company looking to disrupt it. >> why did you look at me at that point >> i was just surprised. i look at you far lot of things. >> you great hair growth >> it's not paid for >> we'll discuss that coming up. and casino slumps. we'll be discussing that coming up

we have all of the latest now. >> yeah. coseen know stocks getting slim as concerns about the impact rising rates will have on the debt it is down almost 1.5% a week to date the company carries a debt ratio of less than 5%. most of it at a fixed rate

golden eldorado has been among lagging stocks 28 companies nationwide. it got slammed over the past week debt ratio 5.3%. look at penn national. it is down even though it got approval to buy pinnacle entertainment. both carry debt ratios north of 5% the most exposed may be cesars about three quarters of balance is tied to floating rates. after a steep dive last week it is climbing back this week you're seeing some of these has a debt ratio of 5.9%

it is up 4%. it made a deal with an indian tribe? california ahead of sports gambling so it doesn't tell the whole story but there is certainly pressure on these gaining stocks because of the debt that they carry. >> what's the latest clearly u.s. china trade tensions, the currency tensions, those types of fears suffer. >> and the gaming revenue has b been a little -- look, harry and david cats, they all say that you're going to continue to see growth, steady growth and that this was a little blip it was a typhoon there that made numbers come off a little bit. if you look ahead they anticipate you'll see value. potentially a 30% upside >> okay. thank you very much.

great to have you down here. >> yeah. >> cnbc unvailed the 2018 list of 100 start ups to watch. up next we'll talk to the cofounder of a company focus and hair loss prevention for men, how he is changing that industry and coming up on fast money fidelities top 401k expert will be there to answer your burning on questions thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

cnbc has unveiled the annual upstart 100 list which highlights 100 promising younger start-ups that you should watch. all companies on the list are less than 5 years old. >> not all the ceos though. >> right. >> health care. >> there are some young ones >> there are young companies

health care company keeps isn't is on the list and the male pattern balancedness prevention and treatment. it's worth 7 the$.5 million am dimitri caring as. joins usnous. >> thanks for having me. >> talk us through this is prevention or fixing the problem afterbalancedness arrive zploos that's right hence the names keeps. the products are most effective at stopping further hair loss, right. one thing -- a big part of the mission is changing the conversation, saying, look if you wait too long a lot of guys two thirds will experience hair loss by the time they're 35. most people think it starts later. the big think we try to do is say the drugs are effective but start at the right time and use them consistently. it's about preventing further loss. >> is it an information portal that you offer here. >> no keeps is really a full service solution for guys that are trying to keep their hair.

that means we have information and education about hair loss. actually a you can do altelemedicine consultation with the physician. we sell the prevention on prescription and have progress trag tracking to make sure you have the best chances of possible of seeing the results you want. >> was there a barrier to people getting access to things like this. >> i'm curious about the middleman role. >> exactly one of the things we really try to do is take out a lot of middlemen. and work directly with drug manufacturers to bring the products to the consumer and something that, you know, the kind of origin was my started losing hi hair and went through the frustrating process of not knowing what to do, not knowing if there were drugs that worked eventually got lucky enough to be connected to one of the leading hair loss doctors in the world who mentioned to him, there are things you can do but you have to start now. and then you know he took the products which before this were quite expensive. so what we do working direct -- we sell the drugs for about half

the cost of the national pharmacy chains and to connect with you at doctor to get the prescription. >> whose business are you disrupting, the traditional dermatologist. >> no it's not really dermatologists, the fact is no most parts of the country it's tough to get access to a dermatologist. most people wait 30 days to get an appointment what we are doing is trying to see we can we can make the make the drugs keeper, go direct to manufacturers and bring it direct to the consumer and expand access to the care and make products keeper. >> ifgs the slightly sad thing from this is it's not revolutionary new thing you have discovered it's still taking the same drugs that already exist you are just sort of coming out with cheaper ways to get. >> with the same side effects they might have. >> right so the drugs have been on the market a long time. the fact is though middle east people don't do realize that they actually work or have access to getting them we see about 3/4s of our

commerce have never stene a doctor for hair loss and never tried any of the products. including the otc .and people don't realize there is something that works. >> i was asking how early is too early when is the earliest warning sign. >> it's calls rowe called keeps for a reason >> in other words you never too early to start. >> oft been you start seeing early sign most guys know when it happened. i've been taking it but about two years i think it's working well, right. >> yes. >> it is inkeet are deed. >> dimitri thank you for joining us and congratulations on making the list ant successful first what year and a half of the business amazingly but you can read more about that and the other companies on cnbc.com/upstart. richard branson layingou ht miss space travel schedule we tell but that next. the "closing bell." >> he doesn't need this product.

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when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. we've got a market flash on ppg pch leslie picker has the story of headquarters. >> hi, shares of ppg are soaring in after hours trading on a disclosure filing by trooi end partnering saying the firm

acquired a stake as of 6:30, they held a stake of 6.2 million shares worth $270 million at the time that filing coincides with headlines from dow jones showing the stake is larger larger and has grown since june poth to 690 million, about 2.9% of ppg and obviously this comes after the earnings warning yesterday that sent the stock lower. but as you can see getting a boost in after hours trading ppg for its part says it's looking forward to dialogue with trian. >> thanks very much for that i guess the stake was built before the downgrade last night. >> look at the quarter from june it traded between 10 oh and 10 a appear up to 115 and down. now it seems like if they are going active it it's with some sense of urgency. >>s in a largely a cost problem they are dealing with right. >> yes. >> other costs.

>> obviously. >> and china demand and things like that. pu it was a pretty broughtly unimpressive update ahead of there. >> been a while since we talked about ppg. >> the big story today. >> you miss to do zwloo have i missed always up for talking manufacturing. >> but no more time to talk on this show. that does it for "closing bell." >> "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq market site overlooking times square .paid refresh guy adami pete najarian a guy adami. the starbucks coffee giant soaring 16%. and bill ackman is betting big on the stock is a big are rally brewing moments ago president trump with a simple message to jerome powell, slow it down tp can could a war be brewing with the federal reserve? we start with the material warning. sound the alarm. >> warning. >> the sector far in awa