>> you have an op ed about tech. >> yeah. it's kind of what i was talking about earlier. the fourth industrial revolution when you look through the noise, technology is a huge play if you can have a long enough investment horizon >> check it out. thank you again. thank you to all of you for being here >> wall street likes china's concessions on trade war are these all good signs this market is close to bottoming 11 days until christmas. amazon dominating. is amazon's growth starting to lose steam and the number of people with wearable devices expected to hit a new milestone this year. the one group that's going to drive sales and what it means for the likes of apple and fit bit. plus the startup that disrupted the world of stock trading now going after the banks and your savings. no fees. no minimums and 3% yields.

too good to be true? "power lunch" starts right now good afternoon, everybody. welcome to "power lunch" glad you could join us on a snowy thursday here in the new york area. stocks losing steam. the dow was up more than 2 0 0 points earlier we've heard this story before. now it is up just 14 or so the s&p dipping into and out of correction territory now down about a fifth of a percent. the nasdaq at the risk of losing the longest winning streak since late august. down 41 points utilities moving up by about a full percent social stocks on the move. snap shares falling to a new al time low you see them down about 1% twitter all over the map today higher at one point. best year ever with that stat not holding up, stock not holding up now shares getting clipped and in the red right now by 2 and a

third. starting strong on hopeful trade headlines and moving ground bob has more from the new york stock exchange >> narrower trading range than we're used to. utility staples leading. banks down 1.5%. semis were up earlier. now on the downside. we have market negatives that keep floating up some of them are new we don't know -- i think the most important negative, we don't know the extent of the global slowdown. that's hard to model there may be additional risk we heard today from the ecb, qe stimulus is going away it's not sure how much it will impact profit stimulations in 2019 i feel the positives generally outweigh the negatives right now fewer rate hikes from the fed. that's a big story the tariff talks and negotiations are ongoing look how much happened in the last few days with the china trade and tariffs.

high level contacts have been reported we have promise from the chinese to reduce auto tariffs and replacing the made china 2025 model. these are positive headlines i'm not clear if it's going to satisfy the trade hawks in the trump administration another market positive. sentiment is awful the american association of individual investors surveys bulls and bears. only 20% are bulls normally somewhere around 40%, 50% are all bullish. that's the lowest since may of 2016 the bears almost 50% that's the highest since april of 202013 a lot of bears, it indicates a short term possibility another possibility of a short term bottom, general electric. look at the year we have the main acts. the number one analysts, jpmorgan upgraded to neutral from underweight finally saying it's time that the street is finally

recognizing the risk you look at that ge down 59% in the year with the s&p essentially flat back to you. >> all right robert, thank you. we have two weeks or so left in the fourth quarter let alone the year the dow on pace for the biggest quarterly loss since the third quarter of 2015. is this pessimism and worries a positive indicator for the markets? we have a chief strategist in asset managements. there was an aaii survey on sentiment today indicating pessimism is up to a 5.5% high does it bother you >> it doesn't. we need to draw a line between investor and consumer sentiment. investment sentiment is bearish given the whip saw volatility. the multiple pullbacks since october. if you look at the results of that survey, what you'll see is that investors were pointing to

concerns about trade and if we can get past u.s./china trade negotiations, investors feel confident >> does 2019 look like a better investing year than 2018 >> yes >> why >> i think there's a number of tail winds that are in place right now to support higher equity prices and continued earnings growth and continued gdp growth did we reach peak earnings probably are we going to get 3.5% gdp growth no but there's a lot of tail winds that support up side growth if we can get past u.s./china trade. >> slowish growth and relatively tepid inflation is often a recipe for pretty good stock market performance do you see that in 2019? >> yes, we do. we always say no boom, no bust, no bubble. i'll take it and we think we've had a bit of a washout here in the fourth quarter. lots of concern with good reason over the potential of pa

protracted trade war with china. there seems to be progress day today, two steps forward, one step back. generally headed in the right direction. we've got to think the 2019 looks like it will be a pretty good year. in fact, if you look at the history of the market over the last 20 years, usually we get one of these bad years and the next year we tend to get a rebound unless something extraordinary like an outrageous mistake by the fed happens we just haven't really had that since '08. >> you're a bullish kind of guy. the last time i spoke with you, it's melissa, ten days ago you said the s&p 500 would rally 7% into year-end. >> i said it had a chance to rally to 7 to the year end >> okay. now you're walking it back >> i heard 7%. but what happened? are you a abandoning that

and does that alter your view for 2019 >> it carries it forward to 20 is the i think we have a good chance for perhaps we got a 2%, 3% rally in here at best. because we still don't have a resolution on the trade issue. and that is a negative overhang that the markets certainly have shown us since argentina on a day today basis means a lot as to how the market opens, how it trades during the day and closes by the end of the day. melissa, what we like the fundamentals we think the technicals are dicey. we also think that sentiment looks like it's bottoming fortunately. good contrarian indicator. overall, we remain positive. >> kevin, going back to your point, this time of year when we get the forecasts, you got to take it with a grain of salt 2018 was an amazing year the forecast pointed to the tax cuts and a 20 % rally. do you agree with john that the

fundamentals look good do you think we've hit peak earnings >> i think we've likely hit peak earnings i think we'll still experience earnings growth. and let me go back -- >> wait. you mean we've hit peak earnings growth >> no. we're not going to get 20% earnings growth all throughout 2019 >> you wouldn't expect that. >> but double digits is good and constructive >> that's fantastic. >> and consumers are still spending and make up over 70% of gdp growth >> don't you have a moment of does that really all matter? all that was in place for 2018 and it was a tough investing year across asset classes, not just for equities. i mean, as somebody who manages money, don't you think these fundamentals can be fantastic, but that may not make ate year where i can make money >> yes we have strong fundament 25alsf. head winds is the fed aggressive not now. we think they'll move one more time next year some are projecting zero times

next year. we think in 90 days there will be a form of agreement between u.s. and china once the headlines move, the tail winds should follow the 30-year up for auction it was the 10-year was yesterday. >> this was a pretty good auction. i gave it a b plus expect to demand the last of 78 billion in supply 30-year bonds adding to an issue originally put forth in november 3 .165 was the dutch auction yield. that was the offered side of the one issued market. that's pretty good if we look at 2.31, a bid to cover. 66.4 solid. it's the best indirect percentage since the first auction of 30-year bonds in 2018 11.5 directs also a solid number

primary dealers take a smaller 22.1% of the auction we finish off with a be plus the supply is behind us. let's see how the market behaves. remember, twos, threes and fives are trading virtually at the same yield maybe the inversion is starting to slowly disappear. >> rick, thank you as we mentioned earlier, markets had been higher on hopeful headlines of trade with china. the ongoing situation with the cfo of huawei is a complicating factor we got the latest. >> there has been optimism but china may feel differently and canada does. it's caught in the middle of this spat after warning of grave consequences in the wake of huawei's cfo's arrest. china confirmed it detained two canadians on suspicion of endangering national security. today an op ed in china's state-run tabloid says canada must set her free and warned that china's revenge will be far

worse than detaining a canadian. it's only a matter of time before the owness is on the united states which requested the arrest in the first place. the next step is for the justice department to file for her extradition. as all of this plays out, huawei continues to face setbacks around the world on security concerns the u.s. banded the use of equipment by the government and contractors and is pushing allies to do the same. so far australia, new zealand and japan have moved to limit huawei's contracts the u.s. and china have been careful to try to keep huawei and the cfo's arrest separate from trade talks but the latest developments and pruesident trump's suggestion that it could be a bargaining chip changes that the fate of the dow is lower by 12 points speaking of amazon, has amazon's dominance peaked new evidence pointing to yes we'll have it coming up for you

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online, there's a strong chance it's on amazon but the latest survey shows that amazon's dominance may actually be hitting a peak. 60% of online shoppers check prices on amazon always or most of the time it's down from last year ultimately just 36% end up making a purchase always or most of the time. that, too, down from 42% last year for the holiday season specifically, 76% of online shoppers say they'll do most of their e-commerce shopping on amazon that is the same has last year big box stores like target or best buy do trail amazon by a lot. the group has grown their share. twice as many consumers now say they will do most of their online shopping at a big box retailer this year compared to last despite many pointing to amazon's growth as one reason for toys "r" us's demise, it's not picking up as much as you might think. only 25% of former holiday shoppers shop at amazon now with half of the shoppers going to

walmart and one-third going to target >> may i suggest -- we've reached peak cardboard box in the house. there is no more capacity for anymore cardboard boxes. if you can get it without a box, see if you can get it. i don't know if that has anything to do with it >> meaning you don't order online >> no. there's plenty of ordering online in it's really not urgent or there's a way to get it while you're in the car already somewhere else and you don't need the cardboard box -- >> that's good of you for the earth. >> no. there's literally -- we are bursting at the seams with cardboard boxes. it's completely selfish. >> target at checkout, they'll give you the option to save a dollar, i think, if you consolidate your packages. say your order has five items and it's shipping in three boxes, you can opt to save a dollar by consolidating that they come together, but maybe

it's slower. >> it's funny. i realize the retailer does the work they open the box. they hand it to you. you can put it on your shelf at home what a concept >> that's true exactly. >> thank you >> thank you let's bring in brian, the chief knowledge officer at cantor retail. great to have you with us. >> good to be here >> kourtney's report, does it jibe with what you're finding yourself in terms of online shop and amazon >> i would say it's a balance. i think with amazon expecting them to continue to grow at the rate they've been growing at over the years is hard to do as you said with an overwhelming percentage of americans now shopping on msnbamazon, that acceleration was slow. one of the things you can underestimate is how effective their friction free eco system is despite your plans and your aversion to cardboard boxes, though ikea has a wonderful app to turn them into toys for your

kids despite that, what you often find is amazon is very good at getting you once you've bought one thing into buying more things there i think we're probably more bullish on amazon perhaps than that report suggested. >> that sounds like a weekend project for kourtney >> in tublerms of amazon, the sr has remained the same. have they gained and maybe higher margin categories, lost in other areas how can we tell what that overall share looks like for them >> well, i think the tail of the tape will be after the holidays. i think one thing that -- i think you can fall into the trap of evaluating amazon the way we look at some of the other fang companies like netflix in terms of use it's amazon's ability to expand use that's really the strength of those models. i would really keep an eye on any question that gets at how many things people are buying on amazon how long they're staying i think those are indications,

perhaps, of where that goes. that being said, to echo the sentiments from kourtney's report earlier, the big box retailers are doing a better job with holiday in the digital world. and, of course, they have a brick and mortar presence that allows them to balance that. you're starting to see the walmarts, targets, best buys putting together a better omnichannel presence >> echo, their product, the echo, is it as big this year as last year? >> well, i'll say the word alexa to annoy anyone with an echo device near the television and now yes, well, let's -- if amazon has their way, yes. i think they are leaning way in as they have both in prime day and over black friday, cyber monday they are really trying to engage people in the broader amazon eco system they're really pushing their devices. they're really trying to expand their footprint. i think that's going to be one of the things to watch coming

out of holiday, how successful they were with that. the more embedded you are into amazon's eco system, the more the frictionless system allows them to sell you more. >> brian, thank you. what can las vegas tell us about the health of the housing market stick around and we'll tell you. plus apple will make a billion dollar investment in austin, texas. a smaller project could provide a bigger hint into where the company is hdeead next we'll explain coming up on "power lunch". [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. don't get mad. i still can't believe how incredible the screen is on the new iphone xs.

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welcome back new signs that demonstrate the housing market is slowing down we have the details. >> it really appears to be jamming on the brakes. several new reports pointing to a sharp drop in demand mortgage applications to build a newly built home fell according to mortgage bankers association. this is a big drop but it coincided with a big drop in mortgage rates rates dropped from over 5% at the start of november to around 4.85 at the end. the problem, hough, is still price. too high there's a tight supply, but supply jumped 5% in november that's the fastest growth in three years according to red fins still red fin saw sales drop 8% in the markets it covers one striking example, las vegas. it had been a very hot housing

market just six months ago the inventory of homes for sale in november there was up 54 % from a year ago and sales were down nearly 12%. that according to the local realtor's association. now, the increase in supply and drop in demand has, of course, led to fewer bidding wars. a year ago 45% of listings on red fin were getting multiple offers today just 32% back to you guys >> thank you very much check out shares of under armor. they are down 20% now this week. the ceo explains what the company needs to do better and we'll hear from him next delta is dragging down the airlines we'll bring you the best of it right afr isteth

hello, everyone. here's your cnbc news update mexican president telling reporters in mexico city that he and president trump have never discussed the border wall or who would pay for it this after president trump tweeted that mexico was paying for the wall through the savings

the u.s. garnered in the renegotiated free trade agreement with mexico and canada john bolton says president trump has no plans to reschedule his previously cancelled meeting with russian president putin the two leaders spoked for about 10 minutes during a g-20 meeting last month informally. >> president, we made it clear, i made it clear to my counterpart in moscow right before the president announced on air force one he was cancelling the meeting with president putin that we simply could not have the previously scheduled encounter as long as russia still held the ukrainian ships and crews. >> some new jersey commuters thought they hit the jackpot this morning when an armored truck lost cash all over the highway. several crashes were reported. some stunned drivers attempted to collect the cash over the highway. it wasn't clear how much money was spilled.

only in jersey that's the news update this hour back to you. >> free money. i don't know maybe i'd stop on the turnpike >> can you see the turnpike with free money all over the place? >> on a good day >> on a good day >> the truth is, they ought to pay you to go on the turnpike. >> absolutely should especially lately. >> all right sue, thank you phil lebeau is here with a news alert on gm involving the company and the white house. >> the president gave an interview on fox news. this is what he had to say with regard to his feelings on general motors and the decision to close four plants in the united states over the next year >> i don't like that general motors does that, and they're going down to mexico to make cars now, the new deal i made makes it uncomfortable for people to go out of the country. i think she's macon -- making a

mistake. all electric is not going to work it's wonderful to have it as a percentage of your cars, but going into this model that she's doing, i think is a mistake. but to tell me a couple weeks before christmas that she's going to close in ohio and michigan, not acceptable to me and she's either going to open fast or somebody else is going to go in but general motors is not going to be treated well >> all right it brings up the question did the president say anything that would make an investor in general motors say this is not good news for the company? clearly, you don't want to be targeted by the white house or the president. no company wants that. but in reality, i'm not sure there's a whole lot the white house can do here in terms of forcing general motors to bring back production either place keep in mind those plants are idoled we have negotiations by the end of next year you could see them make a decision -- we're going to bring back production or start up production again in lordstown.

that's always the possibility. in terms of putting the gun to the head and saying you're going to do it, she made the decision because she doesn't want them to keep plants running even if there's not a market for the vehicles. >> gm will not be treated well what does that mean? >> he seemed to suggest that nobody would be treated well if they leave the country >> right if that agreement goes through and it's approved and ratified by all three countries, they've made their decisions in terms of their production i'm not sure how much he could do look, could he make them a target of a campaign when he runs for reelection and basically have people chanting things like gm is terrible or something like that? that's always a possibility. that's part of his play book whether or not that would impact sales remains to be seen but mary barr and her team are

making this decision based on what's best for the financial part of the company. >> president trump is saying we're not -- we don't want to run a car company. but they want to be in the car business in telling gm what to do it's staggering what this government wants to do with private companies. >> and that last part there about electric cars c that's off the reservation. that's wrong that's not what gm is doing. is it investing more in electric vehicles yes. is it getting out of making internal combustion vehicles no >> is gm using the president and these comments as a way -- is this a salvo against gm. if they're saying we need to rationalize our operations, is getting the president's attention easier >> i will say that gm will be very hard in its negotiations. look at what it did in south

korea. they basically said to the government we're shutting down this operation here unless we get a much better labor agreement. they got it. now, will they do the same thing with the uaw they're always going to negotiate as hard as possible. and there's no doubt that idoling these four plants, it's a way to come back to the uaw and say look, we got to do something. we have too much capacity. that has to go capacity has to go out of the system at some point let's see what we can do in order to change. >> the republican president seeming to come out on the side of organized labor i don't want to put it quite that -- we can't jump all the way there, but that's the direction this is going. it's a fascinating wrinkle in products >> thank you >> absolutely. we're about to talk to richard branson, sara eisen talked to kevin plank. let's begin with jim chenos.

a lot to talk about with the markets. >> indeed. actually, it's been a decent market for a short seller. jim just shared with us a brand new short position says he's had it on since the summer and it involves the u.s. trade fight with china listen >> we added some new and old names. and one area i'm scratching my head about is the macau casino guys we're basically short the u.s. guys >> wynn? >> wynn. >> las vegas sands >> sands and particularly their hong kong listed asian operations. and then we're in our hedge fund lowing the chinese operators >> a lot more from our conversation on closing bell but the basic premise here from mr. chanos who bet against enron

and other collapses. these companies are facing these deadlines on permits and the chinese government has full control to threaten to either pull the permits or pull them completely as a result of trade hostilities between the u.s. and china. it's something he thinks nobody is talking about nobody is paying attention to. but the chinese literally hold the cards, pun intended, when it comes to renewing the permits that come up once every ten years or so which he says are approaching and would be a pretty savvy political tool on the chinese part to use when it comes to the trade fight with china. he mentioned that sheldon adelson, las vegas sands is a big gop donor and trump donor. it would be even more savvy politically to go after and threaten these companies that's why he's worried and says they've come down a lot from their highs but the valuations look rich compared to where they've been we talked about the weakness in

vegas. i'll bring you the full conversation later i wanted to share the news on the new short positions. >> it seems like a binary bet. if the trade talks go well, you have plays that he's short that are really leveraged to the up side because not only will the concessions not be an issue, but the chinese economy could turn around and gambling could pick up >> absolutely. and we did talk about that, especially that this is sort of in the whims of the president right now. we get a tweet nearly every day. it appears that president trump actually wants to make nice and is paying attention to the market fall, and actually the tone and the mood has been better chanos says he sees weakness in mac macau. he thinks they are worried about capital flight from currency one way to crack down is through macau where the money comes in that's also part of the thesis he's also worried about vegas and says millennials aren't

spending as much time in vegas, and that's a trend we've been covering part of the weakness that's been attributed in some of the stocks >> we also want to talk to you about your discussion with kevin plank of under armor you had a fascinating discussion this morning coming off of the investor day meeting they had. >> investor day was not so well received by investors. the stock plunged 10%. the big disappointment was around the forecast. there was a ten-year plan for under armor. analysts hoped they were going to turn the company around sooner and turn north america around sooner. the long-term targets for north american revenue growth were not that optimistic especially if you compare them to competitors like nike. i talked to the ceo and his number two who is sort of in charge of executing and the operating performance of the

company. they stuck to the forecast and the idea that they have their heads down next year is transition. they're going to rebound and take it slow we talked about the culture changes around the uproar that just february 2018 they had to pull their policy for letting people expense strip club accounts i asked kevin plank how that was still a policy and whether they were facing a me too moment. >> i don't think there's a company in the world right now that would say we have all the metrics we want. the one thing i know is as he look to promote, include inclusion across the organization, that we make sure we have women in leadership and people of color helping to drive. we're looking for a management team and executive face not unlike our board that reflects the constituency we're trying to sell to. we're not starting from zero we have an amazing base. the way the story may play out is not always the facts. it's our job to make sure we communicate that story >> playing down the impact and playing up the changes the company is making financially,

culturally to try to get into a new phase after fast growth. the stock still is up more than 30% so far for the year and valued at more than 60 times earnings >> all right thank you. we look forward to the lineup you've got on closing bell today. the market for wearables is set to cross a major line. one company is going to drive sales. it's not the millennials take a closer look at what it will mean for the likes of apple and fit bit. stay with us

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welcome back to power lunch. the wearables market is growing and it's thanks to older americans embracing the health

features e marketer is forecasting the number of users will jump more than 15% among those are over 55 that doubles the growth rate of 18 to 24 age group i assume this is great news for companies? yes, they target the younger age thinking that will grow with the product, but huge adoption among older americans. >> yeah. i mean, first, the base is not all that high yet. the growth rate you have to take that into account when you look at the percentage growth rate. it's growing and it's a wealthy demographic. >> are there two players fitbit and apple with the watch? >> there are others. garmin has a smart watch google has its own operating system wear os fossil adopted that. >> in terms of the health applications, the fact that you can track your heart beat, we got my mom and apple watch specifically because of that reason she wanted that. she wanted to know

not that she had any heart problems, but she wanted to know if she did >> right >> that seems to be huge as these health applications grow more robust, i would think that would attract the older set. >> absolutely. i think apple is really focusing on that with the ecg, the electrocardiogram monitor on the apple watch. that's something they're thinking about they repositioned the watch as a health and wellness device rather than a notification device >> are insurers going to want you to wear these things are they likely to give you a break on insurance if you do are insurers likely to buy them to give to you to wear so they can monitor your health? >> john hancock offered wearables. they're offering a steep discount for apple watch i think they're selling for 25 a big discount they want to monitor that and reward users who are healthy

the flip side is you're giving them a lot of data that they can then massage however >> exactly >> could the government ultimately get in and start to subsidize this for medicare? >> i haven't heard that. it's possible. >> does it mean they're not cool anymore? if all the grandmothers have them, do you want them >> yeah. that's -- that's -- >> careful, now. careful, now >> that is the question. i mean, it is apple making a conscious decision to really position it for older americans. now, does that mean -- does that preclude it to younger people? i don't know but it is a danger for them that they position it that way. >> and an area of growth they're focussed on. thank you so much. let's bring in kristina, a te technology and health reporter a company is showing it's

serious about health tech. what does apple think the prospects are for health and growth in the wearables category >> i can't stress this enough. apple is just so serious about health care and one big signal is that the company has hired dozens of doctors in the past few years. i originally heard that from sources familiar, but i did research to compile this list of which physicians are working for the company. many of them are keeping that secret apple is a secretive company but i think that signals a few things the first is that health care is going to be an area that they see a lot of potential growth. i think the electrocardiogram is just the beginning i see applications for the watch in things like blood pressure and blood glucose. i think that would, again, track that older audience. the other thing is apple knows its greatest potential critics are doctors. winning them over to get them to

recommend these devices to patients is just absolutely key. so i think having some of those folks on board is just a really smart strategy for them. >> one interesting point as we've been discussing this watching apple's growth here is there are some who will say it's kind of rich that apple is so focussed on physical health while it could be behind the mental health epidemic this country is dealing with because of our addiction to these devices. do you think they're trying to get ahead of that criticism which is going to grow louder and louder >> i don't know about you, but when i use my watch, i end up looking a little less at my phone. i think that's how apple would start to position itself and then the company could also start to make strides in incorporating some more mental health style features. they have already a lot of developers around meditation and breathing. taking a rest, and i get notifications sometimes when i'm a little bit stressed out.

that's always helpful. i am a journalist. i could see them doing more in that space who knows? mental health could be a big area of growth >> you found at least $20 associated with linkedin accounts who say they're connected to apple is there any sense of what kind of doctors they are to figure out what areas apple is interested in. >> as you expect, it's a lot of primary care physicians and cardiologis cardiologists. and then you see people like orthopedic surgeons, and that makes sense given their recent partnership with a medical device manufacturer. they want to see if apple watch can help with knee and hip replacement surgeries and whether they're up and walking after the procedures i noted these physicians weren't

a single group off to the side doing advisory work. they were involved in the product development, the business development decisions they were working closely with engineers. so it felt to me like this wasn't just for show that amazon -- or apple was really using these doctors to do real work for them >> yeah. and it's going to be a big area for them maybe they read your piece about quitting social media and thought oh, boy. it's growing, the chorus is growing. thanks for joining us. >> yes >> good to see you now the startup that disrupted the world of stock trading is setting its sights on big banks. no minimums and 3% on your money. is it too good to be true or will it spark a race to the bottom liberty mutual customizes your car insurance

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banks and your savings, offering 3% checking and savings accounts, much higher than the market rate. but how does the company plan to make any money their ceo is answering that question >> so our goal is to be profitable with this business. and we plan on making money in two ways first one is we collect interchange revenue because we have debit cards that we are offering through a partnership with mastercard. and also we invest customer cash into treasuries and government grade assets and we believe over time we will be able to generate yield in excess of what we pay to customers >> and here to explain his models, kate gruney. welcome to the show. as a consumer, you hear 3% checking and savings, no minimum and you think that there is a catch. what is the catch? >> that was the first thing we thought, what is the catch here. i don't know if it is necessarily a catch, it is spic

insured, not fdic insured. so it is called a consumer management account that is something people are used to at bank of america and watch the fdic insurance, that might be a eahesitation for som people >> so you are not guaranteed that money back? >> you are specific insurance is up to $250,000 it looks a bit different minor differences. i don't know that it is keep customers away 3 sprs 3% is a big deal, but they are taking the amazon approach so another catch for the company is that they will probably lose money on this. up front they just really want to add customers that has been their whole model especially with stock trading. they went there 5 million to 6 million customers in two months. so if they can do the amazon thing of adding people, scaling quickly, i think that they can take profits down the road >> and did he talk about customer outflows? stock trading is very volatile

and that is their bread and butter, trading. cryptocurrencies haven't been doing any better either. so is this just the sort of a way to put up the dams to keep the customers from pulling out all their cash >> we'll see i think that it would be a way to add new customers i think they are getting to a point where they talked good going public they are growing so quickly. they have been working on this for two years. so i think that they have wanted to add this, they said that they want it becometo become a full e financial institution and go public think of anything that you can do walking in to a bank of america, jpmorgan, you will eventually be able to do at robinho robinhood. so that is where they are going here >> like a lot of brokerage companies, almost all of them i think, they make money by something called payment for order flow these guys do. without wonking out, without getting into touch with your inner nerd, what does that mean and how much do they make from

that >> they sell customer trades to high frequency traders it is something that pretty much everybody on wall street does, but they have really built themselves on this ethos of cannot necessarily anti-wall street, but sort of different than the banks >> so the trade, not the data. >> exactly so they have said that they are never selling customer data. that is one thing that has the catch. are they going to sell kucustomr data they do sell customer trades though and they have come under criticism for that and another people wonder is that how far they will make money >> and so maybe the online banks, ones who take lidid dec that traditionally use the higher rates, will that pull it back now >> i think that with the stock trading situation, people were forced to keep up. so i don't know if they will take customers from banks necessarily, but they spend a

lot on customer acquisition. the percent rate alone i think would be enough to bring new customers in and not just millennia millennials. they are known for their cool factor, but i think that they are moving beyond that you are looking for yield anywhere, might as well go to robinhood. >> kate, great to have you with us after a huge multiyear bull roun r run, stocks are down 6%, enough to make people nervous about a bigger drop that may be coming we'll get the latest on market sentiment. and richard branson will join us, he has some exciting space news to talk about and we'll ask him about brexit, saudi arabia and much more co hr pertas after this

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welcome to the second hour of "power lunch. here is what is on the menu. a new survey shows that bearish sentiment has jumped to a 5 1/2 year high. is that the time to worry or could it be quite the opposite the sign of a bottom we'll discuss that and to infinity and beyond, richard branson, if i could be anybody for a day, i might be richard branson. he will join us and we'll talk when the big space mission,

brexit, the economy and many more random but interesting topics and refriend facebook? jim cramer says the stock is nearing a bottom, may be ready to go higher we'll talk about that. and taxing your text messages? california may be looking to do just that. we have the details when "power lunch" resumes right now welcome to pow"power lunch." the dow had been up more than 200 points earlier in trading and right now it is down by -- actually up by 12 1/2. materials, discretionary, financials are your laggards utility is the leading sector. and within the dow, proctor and gamble are mcdonald's are the winners. transports are lagging on pace for the sixth negative session in 1e67b airlines really the big drag led lower by delta delta issues fiscal year

guidance below estimates and take a look at wynn and las vegas sands, they are both trading down jim chanos is short both of these names. >> citing china trade issues as the reason and we begin with the president slamming general motors and talking trade. john harwood has the latest. >> it was fascinating on fox a few minutes ago, president trump embraced the fact that there had been financial market gyrations in recent days as a result of his trade policy but he talked about how much the market had risen since he was elected in 2016, said it is okay to take a little bit off the table in order to fix a long term problem of trade. of course there is no agreement with china he expressed confidence that he would get one. but he said that he'd hd a very favorable meeting with president xi he was much harsher about the ceo of general motors, mary barra, and her recent

announcement that she would layoff several thousand workers, close several planned s layoff several thousand workers, close several plannedeveral plad donald trump said that there would be consequences. >> i don't that general motors does that and they are going down to mexico to make cars? now, the new deal, the usmca made i made, really makes it very uncomfortable for people go out of the country and i think that she is making a big mistake. they have changed the whole model at general motors. they are going to all electric all electric is not going to work it is wonderful to have it as a percentage of your cars, but going into 24 -- this model i think is a mistake but to tell me a woocouple weeks before christmas that she is closing in michigan and ohio, i don't think that is right. general motors won't be treated well >> and he said under his economic leadership, ohio would replace those jobs very quickly.

workers in ohio will see whether that is the case and on the subject of his personal attorney michael cohen who yesterday pled guilty, sentenced to three years in jail, he said he had only hired michael cohen as a fire years ago, he did more public relations than law and also dismissed as he has on twitter the idea that the payment of that hush money to stormy daniels and karen mcdougal were campaign financecrimes at all. >> all right, john, thank you. let's get back to the markets. bob pisani is live with the latest >> and the important thing, let me show you two day of the s&p 500. we were on a two or three day up swing until about 2:00 the president talked about the cohen issue, but ever since that "national enquirer" story came out, we've been on a downslope so a political risk at least in the minds of traders a couple things that i don't like, the banks have no energy

at all another day where regional banks are down 2%, 3%. again some of them -- most are hovering just above 52 week lows retailers are getting slammed again. taylor brands had weaker sales and gave weaker guidance but big decline there. that is 30%, not a typo. children's place, express, all of those commodity stocks also drifting lower. a lot of the drillers all again at 52 week lows. any positives? sentiment is terrible. i noted this morning, i don't normally track the american association of individual investors survey, but bulls at 20%, lowest since may of 2016. bears at almost 50%. so normally here you are get something like 40% bulls, 30% bears, 30% neutral that is normal.an extreme showing.

they are contrarian indicators so good when you have a lot of sour sentiment that is out there because often that indicates at least short term bottoms guys, back to you. >> thank you very much results of the latest cnbc all-america survey are in and we see some wild swings in optimism steve liesman has all the numbers. >> thanks very much. yeah, the results are in and there are two really divergent stories we're telling. one is the plunge in economic optimism we were at record levels, 48% in the last quarter thought the economy was good, now it was going to get better and that is the biggest decline we've seen down to 39% in the 12 year history of our survey, you see we're still up from where we began with the trump presidency, but we've given back a piece of the gains. why did that happen? let me show you three reasons. growth expectations.

still growth, but expectations where down for home value appreciation, for wage growth and for the stock market we'll get to more of that in a second at the same time, holiday spending plan way up we've taken out august the recothe -- all the records. and let's talk investment, you can see that is down financial elite, those who have a lot of money, they are always the most optimistic that it is a good time to invest. they were at a record high but back down to earth here as has the general public now i can show you those out of control holiday spending numbers. this is going back to when we first started the survey back in 2006 when it was $688 and it was kind of flat we ratcheted it unto 900 bucks and this time we took out the thousand mark and the 11 ma00 m. and they are spending more because their incomes are

higher it is rocknot rocket science >> interesting numbers there and not only did our survey show sentiment is on the decline, so did the latest aaii poll as bob mentioned. so is this a sign that we could be bottoming, in other words bad news/good news for investors tim seymour is a fast money trader welcome. and also chris sacarelli is here gentlemen, welcome tim, i'd like to get your reaction to what those survey numbers may portend for investors. but if i had to say, i would say what i've seen in recent days is that when there is a rally, investors tend to sell >> yeah, we've been fading the rallies. if you think about extreme measures, they are usually a contrarian opportunity they are also things that are quickly worked off in the same way if you look at rsi, relative

strength indicator, which traders look at to look at how oversold or overbought something is, you could quickly change an oversold condition these aaii numbers i think are important because they -- first of all, we had one yesterday which was more related to market sentiment. this is individual investor sentiment and we are back to essentially the lows of the market in 2016 q1 2016 is where the market effectively bottomed so not great times right now and i think that is short term >> but chris, is it precisely -- is it a good time to invest because people think it is a bad time >> i'll buy into that theory the fact that you have so many people pessimistic, typically that has been positive for stocks 12 months in the future so whether you are looking at technical indicators like tim mentioned and you seove see overbought conditions above 70,

oversold below 30, you are seeing a lot of good signs and a contrarian indicator in terms of sentiment. and the fundamentals still remain strong. consumer spending numbers, at least plans for christmas, it all continues to play into the fact that the economy is actually doing well. it is the stock market that hasn't done well and that is weighing on sentiment. and if you look through the numbers, it is that negativity about the stock market, those growth concerns about the future that people are taking some of their optimism away from what is happening. but as far as the actual underlying wage growth, being employed, low unemployment and spending, that will help the economy and ultimately that should be reflected in stock prices once we get past the negative sentiment >> it should be, but it doesn't seem like it is. consumers may be spending record amounts of money this holiday season, but retailers haven't been feeling it. >> and the xrt is basically taking out all of last year's holiday run. last year we were rising in not

only extinction essentially for a lot of the retailers and department stores. so i think that we've gotten to some dynamics here where people are also pricing in possibly peak wages, peak earnings. and we haven't even really begun to hear that dynamic >> what do you mean by that, that in the retail stocks they are pricing in peak labor and peak earnings? >> i think retail stocks make the assumption can this labor market get significantly stronger and when you've had the most wage gains frankly have been at the bottom end of the labor chain. that is great for a group that deserve and need that. but who does that really help? it helps people like target and walmart who couldn't be in a more competitive structural environment in their core business i don't think that you run out and buy those stocks because target will do massive holiday sales. discretionary is i think under pressure >> so as the market looks north to 2019, what is it telling you if anything about the economic landscape or the investing

climate next year? >> i think what the market is telling you is that people are scared they are worried about the trade war with china, the fed raising rates too quickly and they are worried about global growth. so there is that pessimism that is overlaying the pe multiple that people will pay for stocks. i think you will see earnings continue to grow i think we may see peak earnings growth, but i don't think that we see peak earnings earnings will still grow next year, but it won't be the 25% year over year number that we got because of the one time tax cut. but that tax cut is in place for next year as well, but you won't see the year over year earnings growth but as long as earning continue to grow, it will be a sentiment game i think if you look at consumer sentiment -- or if you look at investor sentiment being negative, at some point we will bottom out in terms of how pessimistic people will get and if companies continue to grow and earn more and continue to thrive in this economy, then i

think ultimately stocks will continue to move higher. it is just a question of getting past the sentiment first >> chris, thank you very much. and we of his waalso wantedt the topic of general electric. the stock is moving higher price target remained unchanged. >> less bad. >> less bad. >> the known unknowns actually that at least for the bulls are starting to be priced in depending on who you want to listen to on this, first of all good for jpmorgan who i think is saying that we're a little concerned about this number, you know, they are at 35 cents a share. the street is at 82. so if you look at jp more began's numbers, the stock is trading 20 to 25 times, the street at 8 or 9 times the internet of things announcement is exciting they have a core industrial audience but nothing to get that razzed

about. the fact that they are selling off assets, yes, you should be excited about that seems like the turnaround is happening faster. >> if they announce the material capital raise, would the stock move higher? >> yes, it would they need capital. maybe not now, but that is what the market has to wait and that is the known unknown >> all right we'll see you in a few mintszs coming up, china is changing a policy that is heavily criticized by the trump administration what is changing and what it means for u.s./china relations and plus virgin lact galactic h officially joined space. and sir richard branson will be joining us and california wants to tax text messages a step too far we'lta autt.l lkbo i from the filmmakers of "the lord of the rings"

i've been looking for you, for a long time. comes a vision of our future. what is that? that is london.

[ dramatic music ]

welcome back a lot of news out of china including new detentions in the huawei case can and change of tune on the economic front eunice yoon has more >> reporter: the foreign ministry has confirmed that two canadian nationals have been detained for engaging in activities that endanger china's national security. one is a former diplomat, the other is a businessman separately there is talk now that china is considering presenting an alternative to its

controversial program made in china 2025 sources are telling me that some of the authorities have recognized that the program is drawing too much criticism from overseas so the chinese are drafting a replacement which could be introduced as early as january. the talk is that the new plan would deemphasize china's goals to document natuminate manufact potentially drop hard targets and include greater market access but it is unclear if beijing would get sorid of some of the more controversial practices a big complaint is that china repackages measures and counts pronouncements as progress so there is a fear that that is what is going to happen again with this program. eunice yoon, cnbc business news, beijing. and as she mentioned, there is talk that china will allow companies greater access, but this is on the heels of china

lowering shares, agreeing to purchase american soybeans and basically bringing us back to status quo so we'll progress or not jimmy pethokoukis and tim see ssee -- seymour are with us. so i won der if the goals have really changed >> i don't think that the goals have changed probably even more so, listen, i think if there is one lesson that beijing has learned is that it is still highly vulnerable to foreign disruptions and technological supply chain that's what you saw with zmte, with wow way and i'm sure they will redouble their efforts to make sure that they are not at the mercy of a foreign government and giving it a death

sentence as was the case with zte. they won't let that situation remain forever so they can call it made in china 2025, they can call it we are the world 2030, whatever they want, they are going to continue their sort of state-driven industrial development model come hell or high water >> and there were actually reports about huawei trying to develop some of the chips that it buys from the u.s. which would hurt us. so are the chinese going to be all talk, yes, we are returning tariffs to where they were on autos, we'll change this plan but really not going to change it how do we know if there is any real progress? >> i think the dynamic here is, they can buy all the soybeans they want, but their industrial policy bont change j -- won't change in china's defense, every other country in the world does this there are national security concern. and national champion company -- i've been investing in emerging

markets. and they are a core staple in every country. and by the way we don't call them that, but you can't tell me that boeing is not a national champion company >> we're just not acknowledging it >> and we call it national security so congress doesn't seem to be treating big tech like their national champion companies. they are treating them just the opposite >> how do you get, jimmy, from the words to the action, how do you know really if what they do matches what they say? >> well, listen, i think we cannot expect china to stop basically making the state available to their large state owned enterprises and sort of the financial power of china for those companies. i think as far as how it interacts with us, with ip and some of these joint ventures, them taking out technology, that we can monitor

that is going to take monitoring over a number of years we can also go after companies individually in the court system that we feel are stealing our ip but that is a long term grind year after year. it is not something that will be evident in a deal that will show up immediately in the aggregate economic statistics. and if that is what the president wants, something where he can say china did this, and now look, they are doing it, that is sort of the immediate reaction and that will be very difficult to prove and one thing that i think still more likely that the president accepts a deal where the chinese buy a bunch more sorghum and they have nice words >> i think that is what the president wants. and bottom line what this really does is push it down the road. and i think first half 2019 actually we have enough progress and we have enough elements here where we can get around the core industrial stuff that is not going to change. but it paints a difficult picture for the second half of 2019 >> in terms of the u.s. trade

relationship with china. >> yeah, i think that we have enough actually -- >> but what about -- >> both are doing what they need to do. >> apple said if there is 25 tariffs, we move the supply base, hiring other people for other roles. but do american companies start thinking that it is in their own best interests to protect their supply chains? what does that mean as an investor >> the irony here is it almost makes it an issue of national security for us if our companies also need to -- if our economies are becoming moral lined, that is something that we really can't afford being at an outright trade war or whatever we're calling this and it is easier said than thade apple is trying to compete on price. >> and there are people in the white house who don't want that. that is the whole point. they don't want the economies aligned. they want our tech ecosystem,

hardware and software and -- >> i think that is a possibility -- >> to be separated and disentang disentangled so whether that moves them places that are not china, they want sort of two separate tech ecosystems, both vying for business in europe >> only thing that will trigger apple moving supply chains is if the next roind kxt round of tar put in place so as long as there is enough progress, whether it be buying sorghum or soybeans or what not to put off the move from 10% to 25% in the next round, that's it >> we're back to where we were on autos although the european autos are now 10% cheaper on tariffs yes, commendable that we're fighting complete theft in national security issues on technology i get it

but we're not going it change this and i do think that we'll pay the piper. but both parties right now are showing that they want to at least have headlines and that's what the market needs. >> and jimmy, given now that china is detaining these canadians for what they say is some kind of spying behavior or whatever, do you think that is why the market is behaving as it is today we started out with okay, china is giving in, only to realize wait a minute, they may be playing hardball with these people now >> yeah, given how sort of nebulous this original agreement is, this agreement to have an agreement to talk about an agreement, anything sort of concrete such as the daughter of a head of a key company being pit in jail, that kind of thing is highly unnerving because you don't know where it will lead to >> guys, thank you very much

who has we are the world now in their head by the way >> i'm done for the rest of the day. >> not me. just you all right. coming up, talk about a turnaround, twitter having its best year ever so should you get in now adss ie you miedt? tring nation is next

welcome back it is time for trading nation. twitter shares backing off today, but check out the moves over the past year the stock is putting its competitors to shame making for its best yearly performance ever those gains even as facebook and snap have both tumbled todd gordon of trading analysis.com is with me and mark tepper is joining us from cleveland. todd, it is a jumpy chart. i know a little tilted higher are. but how does it look to you? >> as a technician, you would certainly appreciate this. there are all sorts of cool technical patterns here known as head and shoulders traditionally reversal patterns. i'll draw the predominant which

is a high, a higher high, followed by a lower high we should have broken down in twtrel and we did not. and if you take that pattern and you just kind of isolate that and flip it upside down, here on this little guy right here, we have an inverse. so a failed head and shoulders, i'm getting very technical here and ile for guise, b ll apologid head and shoulders ends in a move if the overall market can stabilize, i feel like twitter can close that gap so i like it >> so relatively strong charts in weak markets are worth taking note mark, it has never looked cheap. sometimes hard to make a good financial case for twitter how are you treating it? >> i agree i really like it and from a fundamental valuation perspective, if you look at the peg ratio, the peg ratio is at 1 which does make it look cheap.

users love the real time content and conversational format. and it is addictive especially if trump continues to tweet. and now the app is revamped for a better user experience and the knock on twitter is that the daily average user growth has been slowing for the last few quarters but they are really focused on shutting down fake accounts. so on facebook people might only log in once a day, but twitter it is about the user engage the, hum times a day are they accessing the platform.the, hum times a day are they accessing the platform so they are doing everything responsible to increase engagement levels and live streaming is a big part of that. and as you increase engagement, that will lead to more advertisers and i love their new advertising platform, they're charging a $99 a month subscription and that means recurring revenues and there is nothing better so we like the stock.

>> for better or worse, it has become kind of indispensable sell side analysts have a price target below where it is currently trading. so still some skepticism out there which can be a good thing. for more trading nation, will he had to our website or follow us on twitter at trading nation kelly, back to you and now you to kate rogers with a news alert on starbucks >> chief operating officer ron brewer has just announced that the company is going to be partnering with uber eats for delivery here in the united states now, this comes after starbucks had tested pilots of starbucks delivers in both tokyo and miami with uber eats today, they are announcing an expansion to nearly a quarter of their u.s. company-owned stores in early 2019 and remember, starbucks does partner with ali baba in china for delivery with on demand food

dlif delivery i talked with kevin johnson and he says his focus is doing what they do business and traeting pa -- creating partnerships. also tune in at 3:20, we'll sit down in a first on cnbc interview with roz brewer. back over to you >> jim cramer will talk with the ceo of starbucks kevin johnson tomorrow on "squawk on the street." and he will also be joined by uber's ceo, so maybe we'll learn more about this delivery plan. that is tomorrow 9:00 a.m. eastern time here on cnbc. now let's get to sue herera for our news yip up dupdate >> thank you so much maria butina agreeing to plead guilty to a conspiracy charge as part of a deal with federal prosecutors. sentencing guide lines recommend up to six months in prison for

the admitted russian spy prosecutors say it is very likely she will be deported after her sentence is completed. chuck schumer urging president trump to prosecute cow hue technolowaco -- huawei ceo with violating sanctions. >> the recent arrest of the cf off of huawei, a tech giant in china with close ties to its government and military is a reminder of the predator behavior of chinese companies. >> yes, that is a special yule log. kentucky chicken is partnering to create a fire log that smells like, you guessed it, colonel sanders ring which i c er ers o. it is available on the kfc website. it is almost all sold out apparently limited time that is the news update, back to

you. >> i draw the line before the chicken smelling firewood. >> me too. swrir begvirgin galactic re milestone today. morgan >> it was a big day for the space industry overall this is after the company's rocket powered vss unity space plane reached an altitude of more than 51 miles which according to the air force definition is where space begins traveling at mock 2.9 on the way up, nearly three times the speed of sound technically they are the first to launch from american soil to space since the space shuttle program ended in 2011 and also the first astronauts to do so via a commercial company that is based on the altitude at which the government awards astronaut swings the more commonly accepted definition for space actually starts at about 62 miles

nonetheless, it was a big faet oig and key test for virgin which already touts more than 700 reservations at $250,000 a ticket and putting it on track to begin the commercial trips next year and really ushering in a long awaited age of space tourism. >> morgan, thank you very much let's send you no you to the mojave desert where richard branson with the most interesting instragram account i've ever seen george whiteside is standing by. sir branson, welcome and let's m me ask you, we hear what you did today congratulations on that accomplishment how many more test flights like this will you need and the bottom line question is how soon do you think you can begin commercial flights into space.

>> yeah, so obviously an historic day we have a lot of people with big smiles on their faces here the space shiceship has landed. it will go through its tests to see whether anything needs to be altered or changed it will then do another flight into space when those tests are finished, and then another series ever tests, another fwlit into space, another series of tests, another flight into space and then roughly we'll be able to move the whole operation to new mexico i will then go up and again we'll do another series of tests. and if every box is ticked, we can then start taking members of the public up. >> and when do you think that date might be? in other words, when do you think your ride might occur and when do you think the first public flights might occur

>> well, i always get these estimates wrong. it has been 14 years to get to this stage i thought that it would be seven. but if you really push me to make a guess, i would hope that sometime in the middle of next year i'll be going up. and quite soon after that, the public will go up. and we're building here in mojave two new spaceships. so in the not too distant future, we'll have three spaceships operating from new mexico taking people up. >> and the ticket price is estimated to be between $2,0$2$0 and $250,000 will you be actually making money at these prices? >> yeah, i think that it will be a fantastic business there are so many people and today we're just getting interest from all over the

planet now that they see it as a reality. i wouldn't be surprised if in the near term prices may even go up a bit but long term i think richard's vision is to bring those prices down and i think that is exciting >> what is the tougher part, getting into space or getting back from it >> i think the tougher part is building the space ship. honestly both parts are important. we think it is engineered from the start to be saefr fe at each piece. >> sir richard, if we can switch gears here, i'd like to talk about what is going on with brexit what is your hope for brexit and the drougoutcome and if you had your way, would you put it back up for a referendum to the public >> hard brexit would be more damaging to great britain than almost the second world war.

it will torpedo a lot of britis companies, companies would suffer dramatically from a hard brexit so we're hope ful that those 60 brexiteers will be outvoted in the house of commons and ultimately i do think that it should be put back to the british public when all the facts are known for another vote the facts they were given at the last referendum were very misleading it now should be apparent to anybody who lives in britain how painful a brexit will be and personally i would just love to see us get rid of all talk of brexit, get back into the european union as the biggest trading partner in the world and put all this behind us as a lesson learned >> what were some of the misleading facts and what will

specifically the consequences be if there is a hard brek or if the uk exits without a quote deal >> one hard misleading fact. big buses saying that the nhs will benefit by hundreds of millions of pounds it is very obvious now that what actually brexit will do is cost britain billions and billions and billions of pounds so a hard brexit, if i just give you one example, virgin atlantic, one of our airlines, we've already been torpedoed by the pound dropping from 1.55 to the dollar to 1.23, 1 at the present time -- 1 at the present ti time all of our costs are in dollars, so costs have been soaeeen soar.

and it is very expensive now for somebody from britain to go overseas if we had a hard brexit, the pound will drop with parity with the dollar and no one will be able to afford to travel overseas and it would be devastating. that is just one company's example of the kind of damage that it can do >> sir richard, you are a charismatic historic entrepreneur and i'm given to think of one with whom you compete in some ways and that is elon musk who is himself a charismatic audacious entrepreneur as you are. what do you think of him >> look, i've got enormous respect for elon i suppose i see him as a young version of myself doing extraordinary things and he will continue -- he is young, he will continue to do extraordinary things for many, many years to come the only bit of advice i would

give him is, you know, not to burn himself out delegate surround himself with really good people. and you know, a bit like with trump, don't tweet -- you need an editor to check on your tweets i think it can be quite dangerous at 3:00 in the morning you shoot out a tweet. but i think -- i suspect he realizes that. but by and large, an extraordinary individual >> good advice for all of us and congratulations on your success today. >> thank you just one point on that, guys hearing sir richard say there needs to be another referendum or that maybe it wasn't in britain's interests to pursue brexit or a hard brexit is not necessarily going to lay well with the people who still want it his points are valid absolutely, it is difficult for business a lot of people are furious with

the way that the government has handled or mishandled this exit in the first place but if they can get some forward momentum and at least tell everybody what the plan is, i'm not sure him saying this is a terrible idea and it is so dangerous, it could be as divisive as what they are already dealing with >> he is a remainor obviously. >> exactly and they don't want to deal with brussels, they don't want to be pushed away by them, but the costs are becoming quite apparent wall you strestreet taking bite out of apple and jim cramer making a bold call on facebook we'll break it down.

the oil market is closing for the day. jackie deangelis is at the commodity desk

>> prices up 2.8%. and closing at 52.58 this is coming on the heels of yesterday's inventory report seasonally when the weather gets a little colder, investors loowe that it is picking up. and bloomberg report that the saudis might cut exports to the united states and that of course gave the added push. still, will it all be enough to balance the market critics are still skeptical. lots more ahead.

funds generated would support that make phones accessible to the poor it would likely not be a per text tax set to vote on the measure next month. interesting wrinkle on all of this the fcc just ruled that those kinds of messages should be information services, not telekplun ca telecommunication services they are wondering if it is to keep them from being able to there would be outrage

>> yes because telephone services are subject to all kinds of taxes that go to provide rural phone service and service to the poor and so forth >> it is to provide phone services to the poor what is interested is it's not per text it is basically we are going to tax you no matter how often you use texting so we can provide phone services for the poor. >> and no matter your income level. if it's a flat fee and it falls on those in order to fund programs for people to get that. >> yes >> and california is running a $15 billion surplus next year. they are trying to figure out what to do with the extra money. >> stay tuned. >> they are highly taxed out there. >> i think it is the highest in the country. coming up another price target cut for apple and jim cramer's call on facebook. we have more on both of those coming right up. california phones offers free specialized phones... like cordless phones,

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit the late toest to slice the price target this is as they investing a billion dollars in a new campus in austin, texas let's bring in mike. graetd to have you with us >> thank you >> has anything changed for do you take the price target down or is it an knowledgement that there's so much negative that it's really holding it back? >> i think a lot of it has to do

withmultiples that come down i the space. stock is tells us there's a global meltdown in iphone demand across the world what we are seeing is there are pockets of weakness. the survey showed that iphone users seem to be suggesting they are up grading >> that survey to be clear is u.s. users, correct? that's about 50% of apple's market it is another 50% subject to weakness are you seeing that? i'm thinking morgan stanley that's week that said she is seeing weakness in china >> yeah. we don't have as good checks internationally. if you look at all of the components there has to be weakness somewhere we are not seeing it doe mesically. we know it is internationally. it is give an large market for apple outside of the u.s >> i want to talk about

facebook jim cramer said that facebook is ready to bottom. what's your take on this stock i feel like it's been a real disappointment for most investors that think the stock is nearing a bottom. you might be onto something there. it has bchb a constant barrage what can do that is just good results. the results don't have to be heroic or amazing. it has to be through the up rights type of results if that's the case stringing together a couple of good quarters could be good stock going into 2019. >> thank you >> thanks. check please is next a business owner always goes beyond what people expect. that's why we built the nation's largest gig-speed network

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this is a very concentrated play it will go south >> absolutely. thanks for watching. >> closing bell starts now >> welcome to the closing bell i'm michael santoli. this is the hour >> i'm ready >> we have been jumping around a lot. >> i'm in a space plane to the edge of space. >> as people are doing today >> we begin the final hour of stocks well off of session highs. the dow is the only index in the green slightly by one tenth of a percent. the s and p a little bit below yesterday's close. the small caps