uk. >> and the northern ireland said they would support that. it would be odd to go through this and end up with the same coalition that's standing here. >> the eu put out a statement saying they're going to continue preparations for all outcomes, including a no deal scenario but they're hoping there will be some kind of orderly deal. >> we continue our coverage of the vote also, thank you, sameer with "the closing bell. here. >> we're thanking everybody. thanks for watching "power lunch. thank you very much for that as you have been discussing, the biggest defeat on record for any uk government. theresa may's brexit deal defeated by 432-202 votes, losing by 230, sara, but importantly seeing 118 of her own conservative mps vote against her. she'll need their support tomorrow when she now faces a vote of no confidence within the

house. check in now on u.s. markets they have held on to their gains throughout the day, slightly off the highs, but it's been a positive session here in the u.s. >> what's interesting is to see the pound react. it made a u-turn on the news, first falling and then shooting up, having a nice rally almost to break even, crossing that 128 level. why would the pound rally? >> the key reason for the pound rallying is that theresa may after the big defeat made very clear that she was willing to face a vote of no confidence she'll do that tomorrow. if she does survive that, she said i'll reach out across the aisle here in parliament and see what other parliamentarians want one thing we are certain of is the mps don't have a majority for the no-deal brexit that is what the pound is taking strength of. investors think she'll win the vote of no confidence tomorrow if she does, she said i'll go to a softer approach, not a harder approach. >> and maybe even grant her an extension. that too is in the mix. >> it's one of many factors at

play for sure. >> let's go straight to villa marks who is in london with first reaction. >> reporter: as i've mentioned, this is a historicdefeat for government you have to go back to 1994 to see a government lose a vote of this magnitude and it wasn't near the 230-vote we just saw theresa may suffer "the financial times" got pretty close at 225 theresa may is immediately on her feet and she is willing to accept an opposition party call for a motion of no confidence. just listen to her reaction just moments after those votes were called >> mr. speaker, the house has spoken and the government will listen it is clear that the house does not support this deal. but tonight's vote tells us nothing about what it does support. nothing about how -- nothing

about how or even if it intends to honor the decision the british people took in a referendum parliament decided to hold. >> reporter: so what's interesting now is that jeremy corbyn moments after that speech was given by theresa may got to his feet he's the leader of the labor opposition party here in the uk. he tabled a motion of no confidence he said that tomorrow he will expect a debate on theresa may's continued presence as prime minister and her government's survival if the government ends up losing that vote tomorrow, you would have a 14-day period, two weeks for them to try and figure out another form of majority in the house of commons if that's not possible, then we would automatically see the triring of a general election on legislation passed a few years ago. right now the conservatives have a razor thin majority in the house of commons, thanks to their partnership with a small northern irish party they have said they will continue to support the

government in this no confidence motion vote tomorrow it would, therefore, require some conservative lawmakers, members of theresa may's own party, to vote alongside all the opposition parties against her in order for there to be a majority against the government. that is incredibly unlikely, even though we saw more than 100 of her conservative mps try to oust her as leader just last month, guys. >> that is the key, people don't expect her to lose that vote of no confidence tomorrow, even though 118 voted against her do you think there's any chance, willem, that in the next 24 hours she would guarantee that wouldn't happen by suggesting that she would stand down earlier than she's so far suggested? >> there's been no indication from theresa may the last few days or last couple of years that she's prepared to resign until she, quote, gets the job done she must have been expecting this defeat tonight. all the indications were there,

given the fact that she pulled the same agreement, the same legislation just a month ago in the face of an overwhelming defeat mid-december. so the question of whether she continues in the role may not ultimately be up to her. as we said, it's unclear there would be enough votes in the commons to defeat the government what we're facing is a situation whereby the labor party, led by jeremy corbyn, if they are not able to defeat the government in a vote of no confidence tomorrow, they would have to under their own party platform accept a second referendum as one of a menu of options left open to them that would be something that a lot of people in that building behind me will be very happy to see this become part of formal labor policy. >> thanks very much. the pound pretty much back to session highs. it's down only 15 basis points as we speak. >> all the european leaders tweeting out their reactions of course interesting to follow, the snark that comes on twitter.

donald tusk, if a deal is impossible and no one wants no deal, who will have the courage to say what the only positive solution is? potentially suggesting they could do another referendum. >> i don't think that's what the pound is reacting to the pound is reacting to the blo belief that she will win the vote of confidence and the next step is she will reach across the aisle and that will lead to a softer brexit. nonetheless, that is not the worst-case scenario outcome for markets, which would be a no-deal brexit let's bring in katherine mann chief economist at citi, and mark and christopher smart, head of geopolitical research at bearings mark, i'll start with you. your interpretation of this move in the british pound >> so we recommended to our clients this morning to take advantage of the dip in the sterling which we thought would

be this normal headline type of risk to go long. i'm not sure i buy into why you think the pound is rallying. i think it's rallying because the market had gotten short ahead of this vote and now it's buying it back people are looking at in the events betting market as well as the options market, they're betting there's not going to be a brexit at the end of march, that this will go on quite some time so we can go back to macroeconomic fundamentals which in the uk have softened but not quite as bad as in the eurozone itself. >> they're going allow it to lapse, the march 29th deadline for leaving the eu. >> exactly >> extension is difficult, though you could see the uk government push to cancel the invocation of article 15 full, but i think extension more than just a month or two takes you up to the may european parliamentary election. >> and there's also the question, maybe christopher, on the political front, are the europeans going to allow an

extension. >> i think if there's a sense that the british government is moving closer to a solution, they may well offer an extension because they don't want to see a hard brexit any more than the uk does that would probably give them a delay to hold a new election and a new government to get in place so there could be a better negotiating position brought forward. i think the odds of that are probably higher today than they were yesterday but there are a lot of moving parts still. >> katherine, do you think we're going to see either of the two extremes, whether that's a no-deal brexit or second referendum to overturn brexit. >> no. actually i agree with the previous commentator that we're looking at a stop the clock scenario stop the clock both from the standpoint of brussels allowing than extension beyond march 29th, because it's not in their interest to have a crash out, and a stop the clock on the part of the parliament in the uk because it's not in their interest to precipitate a crash out either so there's going to be a stop

the clock. the question is what the implication of that might be for real investment and other decisions that are being made by businesses within the uk i think the problem here is that the stop the clock strategy works very well politically but doesn't really change the dynamics from the standpoint of business investment. decisions have to be made, whether they're going to be made associated with march 29th or they're made for six months later. they're already in train and business is already on the move we've also seen the implication through business investment, through housing prices, we've see implications of that through worker movement. so from a stand point of economic damage, there's already a lot of damage to be done whether you do a referendum, that's not going to change that damage and a crashout would make things worse. nobody's interest to do that. >> when does it become, mark, a real issue for u.s. assets, stocks, for instance

is it as we get closer to that march 29th deadline and we don't have any sort of word on what's going to happen next >> two things. it's always been articulated that we want a strong uk. >> president trump hasn't said that. >> well, he suggested the british vote to leave, but the point is really that it doesn't really affect the u.s. economy directly until we get the economic fallout that mrs. mann was talking about which is weakness in the uk economy, weakness in the eurozone and hurting u.s. exports an u.s. international businesses. >> i guess we've already seen some weakness in the eurozone economy. guys, we'll leave it there, thank you all very much. extraordinary vote wells fargo and jpmorgan both out with earnings today, our other top story. it appears december's choppy market affected jpmorgan's result it was that bond hit, right? >> absolutely right.

jpmorgan numbers disappointed. two main reasons fixed income trading missed expectations but jamie dimon shrugged that off as unimportant. >> i really don't pay that much attention to being buffeted by the fact that volumes are low in the last three weeks of december i honestly could care less equity equiti equities, we've gained share those folks have done a great job and fixed income, we've maintained our share and adding around the world we don't know what's going to happen next quarter, and i don't care >> and indeed the share price did improve throughout the day, seemingly less worried that the trendiness was a long-term concern. the other pressure was increased loan loss provisions but dimon said this was because they were growing and taking market share

and credit quality was pristine. he did address an area of concern, shadow banks and leverage loans. >> a lot of those folks are quite bright, they kind of know what they're doing someone is going to get hurt there. the issue there isn't going to be what the loss -- and most of the major banks don't fund a lot of that. i wouldn't put it in the systemic category. the average lending book is a much smaller book. capital liquidity is much higher so it is nothing like '07. >> shares, as i said, recovered significantly intraday and are close to 1% higher at the moment >> question, i mean we talked a little bit about this earlier, but just on the future because i think there were some worries that potentially these banks while not saying it or preparing for a turn in the credit cycle and dimon talking about some of the uncertainties that lie out there. how would you assess it? >> i'd say that the sentiment was pretty relaxed when he was talking about domestic economy

and loan growth was decent, provisions up a little bit but there's nothing that points to a recession. none of the commentary is suggesting that. i think the improvement you saw today with jpmorgan was that people felt, whatever the issues were, they were one-off so it was a private equity loss, it was a one-off. they don't think it's going to be like that all through the year indications are january is better than december anyway. they wrote more loans, gained market share and loans were higher so all in all the market has taken this very well. >> a lot better than it looked earlier. now, coming up, we will be joined by the wells fargo ceo, john shrewsberry, to react to his company's earnings wells fargo is still trading lower with just an hour left in the session. let's talk about all of this joining our closing bell exchange, we have kate warren, investment strategist at edward jones and rick santelli joining from the cme rick, first your reaction to

brexit we're watching the pound recover nearly all of its losses as far as what comes next and what it means for global markets, what's your take? >> well, my take is that when i look at a market, especially the pound or the gilts and how they're behaving in deference to all that has occurred regarding the vote and its large failure, i don't see that the market is where you look to find the answer what is being divined by the markets right now is what expectations were versus what the reality is in my opinion, most investors didn't really think that this would pass, and it certainly wouldn't pass within a hundred votes and indeed it didn't so i think investors mostly had the outcome figured out. as for the bigger picture, i know that wilf went through a variety of permutations that was put forth. in the end i think the overriding issue is whether it's a hard brexit or not i think most investors do not

want to see another referendum and i think that's actually low on the list. that would be my kind of scenario to gauge markets moving forward. should they start to go more negative or positive, i think that really is the issue i think many in the financial markets believe there's going to be volatility in the short term no matter how it turns out really it's the larger picture, will the uk be better off going it alone i think many investors think the answer is yes, just like the people that participated in the first brexit vote. as far as interest rates or foreign exchange, neither of these markets really are giving us an extension of the range up or down to give us any big clues to the wider answer to the question of brexit >> i think the only thing i'd add to that, rick, regardless of what caused today's intraday rally, we are still down on the day and still down sharply year to date, so it's not like we're celebrating brexit passing kate, when we consider this as the bigger picture, brexit,

slowdown in german and french industrial production for this quarter, china stresses, do you think that there could be a big global slowdown this year that's not yet priced into u.s. equities. >> no. i think overall we're seeing signs ofslowing, but i don't think they're sharp enough or significant enough to suggest that we're going to see a bigger global slowdown. i think we're already seeing signs that brexit uncertainty is causing both the uk and europe to slow, as both sides worry about what that means and what the outcome could be as rick suggested, the expectations were that this vote would be a defeat, but i think that overall, everyone is hoping that we don't see a hard brexit because that would be worse and that would be something that would lead in the direction of more slowdown. but overall, the signs are suggesting that things are beginning to sort of flatten out and we may have seen the worst of the declines. certainly we heard that from .

draghi earlier and the slowdown may not be as bad as everyone is thinking now. >> investors seem to be digesting a mixed batch on earnings news. some guidance cuts, some misses here and there is that an encouraging sign after what we've been through in december >> i think it is an encouraging sign expectations for earnings have come down a lot. that gives companies a relatively low bar to jump over. i think that we were hearing that today, that some of the uncertainty in fourth quarter earnings is going to be due to the market volatility at the end of the year, but that seems to have calmed down a bit as long as we're hearing companies say that they're not seeing worse ahead, i think that will be a positive catalyst for stocks to move higher, sort of like we saw the banks today where they looked negative at the beginning. as investors looked at the fundamentals that were contained there, that solid loan growth, both commercial and consumer, that what we were likely to see

is overall more reassurance in these earnings reports than headline bad news. >> kate, thank you for joining us we'll leave it there kate warren. our thanks also to rick santelli, as always. still to come, the white house says the shutdown could have twice the economic impact it originally predicted, and corporate america is weighing in as well. we'll tell you what business leaders are saying, ahead. after the break, wells fargo ceo joins us to break down his bankes fourth quarter earnings report and expectations for the rest of the year the dow is up 125 points stay with us is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.

the global investment management businesses of onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

hey, batter, batter, [ crowd cheers ] like everyone, i lead a busy life. but i know the importance of having time to do what you love. at comcast we know our customers' time is valuable. that's why we have 2-hour appointment windows,

including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome. welcome back shares of wells fargo trading lower. before the bell this morning ceo tim sloan said the bank will operate under the fed imposed cap through 2019 now last month i spoke with tim sloan and he laid out a different time line. >> originally we were hoping that it would be lifted by the end of this year and what we're -- our view today is that we're operating under the asset cap and our expectations is sometime in the first half of next year. but, wilfred, it is on us to make sure we're making the

improvements that we have talked about with the fed in an operational and compliance risk to be able to demonstrate that they should be comfortable to lift the asset cap. >> joining us, john shrewsberry. john, good afternoon to you. thank you for joining us >> thank you thanks for having me here. >> what's happened since december originally the asset cap timeline hopefully lifted late last year and early this year and now not until the end of this year. >> yeah. i think it's just the process of something that's complicated a lot of people involved, very paperwork intensive, and as the process evolves the amount of work expands a little bit. there's really nothing incrementally new other than taking longer. both sides working very hard, very good faith and making a lot of progress and it isn't really -- you can see from the results of the quarter not

having an impact on how we run the business the number of customers we serve we grew both loans and deposits and managed record eps and a profitable quarter with a balance sheet less than $2 trillion which is big enough to serve all of the customers who we seek to serve and working hard on it the entire -- go ahead >> well, with terms of whether or not investors have confidence that management really knows exactly what it is the fed needs you to do, clearly the share price reacted negatively today could that happen again? >> you know, this is a first of its kind type of exercise for us and for them it's a large deal of work. there's a lot of people on their side and on our side that are involved so there is no playbook they don't have a strict script to work by and neither do we both parties are working hard and want the same things

there isn't major disagreement about any of the end game we are shooting for and so it's evolved somewhat it's -- if we could be more precise we would but everyone is working as hard and as smart as they can to deliver against the requirements that are laid out in the consent order. >> john, forgive me. one more question on this topic. i mean, clearly you and tim sloan say it's not impacting the way you do business but for the last six quarters you have seen your revenues decline on a year on year basis at a time when your peers and your rivals have seen it grow so what's causing that difference in performance if it's not the fed asset cap >> sure. well, there are a handful of things first of all, we have a different business mix than our peers and the banks reporting thus far tend to be more cyclical in that way other banks have a different emphasis, for example, in the

krard business which is less of a business for us. we have been operating at a high level generating a very high return on equity among g-sibs for sure mortgage has gotten smaller. we're a big mortgage player and probably have a bigger index on that than most folks and our balance sheet as shrunk a little bit as interest rates increased. deposits have left the system which has caused the deposit growth rate to turn from high single digits in some categories to negative. people are moving money into money market, mutual funds and the like deposit costs have gotten more expensive so we are looking at the whole picture of total revenue generation the cost to hit it we hit the expense target and then generates a return on equity for the shareholders and for the quarter was in the range of 13% which is at the high end of the range for g-sibs when we're

completely reinventing the company and bariearing a lot of costs to do that we are on track to a delivery of 15% roe. we think in 2020 based on how we have laid things out for investors. again, revenue urks expense and the capital demom nay or the in that calculation an in spite of all we have going on and the hard work we're doing, while we do it, that's a high level of return. >> so i always look, john, at your mortgage business and i know that q4 is seasonally a weak period and originations down 28% from this time last year talk about what you are seeing as far as weakness in the u.s. housing market. >> yep so sure. i don't know if it's weakness in the market but going into the first two thirds of the fourth quarter the long rates have moved up appreciably and so mortgage origination expectations slowed down because affordability and refinance-ability were out of money and rates came crashing

down in a larger risk it off trade and so in the first quarter you see applications up meaningfully over a quarter ago and first of all, it is the winter and so less home buying going on in the winter versus the warmer months and secondly rates were higher which had slowed things down we'll see what happens and where rates remain and well under 3% on the 10-year and at the margin that makes a difference, as well >> the commercial loan growth, john, improved is that sustainable? >> well, some amount of it is. there's elements in q4 that are seasonal or that reflect market conditions during the quarter. so the growth was broad based. we have seasonal types of borrowers who build inventory in the fourth quarter and finance that we had borrowers high grade choosing not to pay up in the bond market and use the bank group instead. that drove extra loan growth

there was some deal related financing for m and a transactions and probably more temporary because those things tend to be taken out down the road and i wouldn't expect $12 billion of loan growth every quarter but things feel pretty good notwithstanding what you were talking about before me about the economic environment uncertainty overall. >> how difficult is it to shake off the fake accounts scandal now plaguing the bank for years and analysts, again, pointing to evidence that it's still hurting you during this quarter? >> yeah. so, that was about two years ago and reputationally i think it's difficult to shake off among people that don't have a relationship with wells fargo and working all the time to improve the relationship with people who don't already have a relationship you can see new account growth in the new primary checking account growth in 1.5% range for the quarter. it's the fifth quarter that's

been up. you can see, oh, home equity loans, student loans, auto loans and small business loans up 10% to mid teens percent year over year and evidence of customers and prospects doing more with wells fargo. and so, i think boots on the ground in terms of making a difference with customers, the impact iing with the passage of time. >> what about in terms of fines, jo john there's a charge for the ag settlement is that the last one of its kind do you think >> you know, each quarter we put a pretty comprehensive list of things that are under way, still under way and new in our ten q and ten k and filing the ten k probably late february with the latest update but, you know, in general we are winding down the items that have been listed there for sometime it takes sometime and some cases even a couple of years for these

things to work through the system i'll point to the rmbs settlement with the doj in 2018 that was really essentially ten years old so there's a long tail and been comprehensive to describe it so people factor it into the analysis of the risk and the exposure that wells fargo may have and try to put a number on it of what's reasonably possible and then accrue for things when they're probable and estimatible we're definitely later in the process for this there's a much more limited number of people working through and saw an item settled in december a couple years old and the list is much shorter. >> finally, john, we're in the middle of the government shutdown now the longest in history what do you see for growth in 2019 shutdown uncertainty, trade uncertainty, of course, and the fact that we're coming off one of the best growth years in the last decade. >> yeah. so, we're finishing up a year i

think when it's fully written looks about 2.9% gdp growth in the u.s. and the best forecast for 2019 will be something like 2.5% to 2.6% we have dialed back expectations a little bit but we had a big year of stimulus from the tax reform at the end of 2017 going into '18 we have got a little bit less accommodative monetary policy because of the rate increases that have taken place and the fed balance sheet normalization. the pace of those increases may very well slow or stop in 2019 and we have the impact of what's coming through and as we have just -- as you have talked about we have slowdowns elsewhere in the world that contribute to our activity as an exporter so 2.5%, 2.6% compared to the 10 years prior to 2018 you would probably take it it is a slowdown from 2018 but the forecast accounteding for that 2.5% growth looks pretty good

we can imagine loan growth, you know, we'll see where markets go some of the business is a function of the s&p as we're an asset and wealth manager and the like and transaction flows are very strong. the did he believe it and credit card transactions reported this morning are high people are spending money and in an economy like this where disproportionate consumer spending oriented and full employment it takes something meaningful to knock that off pace in the short term things could slow down after a temporary stimulus like the initial impact of tax reform but things look pretty good right now and i think it takes something meaningful to slow it down appreciably. >> thank you for joining us. john shrewsberry of wells fargo joining us first after reporting earnings this morning. >> 2.5% growth, would not be too bad. >> we shall see. still to come, netflix

shares up 30% so far this year getting another boost today up 7% we'll tell you about the big change behind the surge. nike taking a page from back to the future. literally. unveiling the self tying sneakers the company hopes they could be a game changer on the basketball court. we'll test them out live for you straight ahead i don't know what's going on. i've done all sorts of research, read earnings reports,

looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ the company who invented car vending machines and buying a car 100% online.

now we've created a brand new way for you to sell your car. whether it's a few years old or dinosaur old, we want to buy your car. so go to carvana and enter your license plate, answer a few questions, and our techno-wizardry calculates your car's value and gives you a real offer in seconds. when you're ready, we'll come to you, pay you on the spot, and pick up your car. that's it. so ditch the old way of selling your car and say hello to the new way... at carvana.

welcome back time now for a cnbc news up date with sue herera. >> hello, everyone here's what's happening at this hour. house majority leader hoyer said the house will not take the scheduled recess next week if the government is still partially shut down. this comes as house democrats decline the president trump's invitation to a white house lunch. kenya's interior minister said the situation is under control after a deadly attack on a luxury hotel complex in nairobi. authorities in catalonia say 17 people including 5 alleged members of an extremist cell were arrested as part of an ongoing anti-terror operation. more than 100 agents took part in that operation. and pennsylvania-based giant

food stores is introducing a new robotic assistant to all of its stores in the next couple of months that's him his name is marty. he identifies hazards like spills and frees up associates to spend time servicing customers. he's not really warm and fuzzy. >> the dynamic. >> as long as he doesn't steal their jobs. >> i know. >> look how slow he is. >> that's the fear but, you know, a lot of the japanese robots are cute. they have been using them in the hotels and different places. this guy, i'm sure he's very efficient. he's a little scary. >> there we go we shall see. >> looks like a vacuum cleaner thank you, sue. netflix today announcing a largest ever price hike for the streaming service to pay for more original content. the stock higher we'll have details next.

ceos sounding the alarm about the government shutdown impact on the economy today. jpmorgan's jamie dimon saying, quote, if it goes on to the whole quarter it could reduce the growth to zero that's more political but it is

what it is delta ceo also sounding off this morning on "squawk box." >> we are seeing $25 million due to the fact that government contractors and some government officials are not traveling the way they would anticipate because of the shutdown. >> joining us now to discuss just how big of an impact the shutdown is having on the economy and what comes next, libby cantrell, the head of public policy at pimco what are you telling the folks as far as the economic imsnakt. >> this is unprecedented, right? this is the 25th day of the shutdown the longest was 21 days and we are using the same calculus that the white house is using in that we're expecting about a ternth f a percent for every quarter for every week that the government is shutdown. but you are getting into -- again, unchartered territory

fha lending is scaling back. sba lending is scaling back. so there's the direct impact of 800,000 employees not working and all the ancillary issues, as well. >> what about the sign of flags for the likelihood of more political gridlock in the year ahead? >> doesn't necessarily put us on good footing of big bipartisan doles, does it it ea it's interesting because talking to democrats on the hill there's a desire to show the citizens that they can govern and they also want to show that they can work with the president on issues that are relevant to voters so infrastructure spending, drug pricing for instance so, you know, i think there is still maybe some hope to see bipartisanship and that indoe is increasingly smaller and every week that the shutdown goes on

likely that window gets -- >> what is your prediction of how it's solved? >> i think the most elegant solution for the president at this point is probably to declare a national emergency and then to divert already appropriated funds to building the wall. >> that's elegant? >> for the president, yes, right? because even if that's blocked in the courts he can claim a win with the base he's doing everything he can to build that wall and reopen the government i don't think we're going to see a negotiated settlement. >> moving away from that idea? >> i think he's getting push back but i don't see a negotiated deal with the speaker at this point. >> in terms of polls for the swing vote, is it changing there or something that galvanizes bo both bases >> i don't think it's good for either party and what the polls are showing us is that this is bad for the bad. i think he realizes that and very sensitive to the polls and not good for the democrats either with that said, you know, president trump has a lot of

support among his base for this border wall so i think that we're not going to see a nice resolution for a little bit of time and i think the national emergency is likely way out. >> thank you for joining us. great to see you. we have 17 minutes, 16 minutes until the close. the dow up 0.6%. s&p's 1% nasdaq 1.6%. a positive session here on wall street. nike says they've got the shoes of the future. they're self lacing sneakers. >> you bought me sneakers. >> it took a while to get you your size, size 12. >> they're not sf eltying. >> we'll test it out later on the "closing bell.

we've got 13 minutes until the closing bell nice rally on our hands. technology sector in the lead. health care, communications services also doing well nasdaq composite up 1.7% more than the overall market up about a percent. up nt,umr ex nbeone rated airline analyst after the close.

the ibm cloud. the cloud for smarter business. the ibm cloud. [kno♪king] ♪ memories. what we deliver by delivering. ♪ ♪ wake up early, o. ♪ slap on some cologne

♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo.

i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back a big day for airlines with delta reporting a beat on the q-4 earnings before the bell and united and continental reporting after the close. joining us is jamie baker, u.s. airlines analyst from jpmorgan

and institutional number one analyst in 2018. thank you for joining us. >> good to see you. >> so, talk us through delta first of all a beat but i guess on relatively low expectations. >> yeah. i think that's fair. what delta management couldn't do and i don't fault them for this but they couldn't deliver clarity. we need more clarity on a solution to the government shutdown, on the north atlantic which is a market that's experiencing some challenges we need clarity on, you know, gdp trends for the year. as that clarity hopefully comes into view i think that will help airline stocks break out of the current rut they're in but delta wasn't really in a position to opine on the issues or expect united with anything uniquely salient to say in that regard. >> what's the biggest source of the current rut they're in >> well, you know, it is interesting with airlines

because the top line unit revenue in particular exerts disproportionate influence on share prices you know disproportionate influence on valuation. more so than earnings per share do and at the moment demand trends, rising trends are on the weaker side. that causes airline stocks to derate and not concerned about fuel fuel prices stabilize and makes modeling easier and need more clarity on the top line. >> what about your picks between the three major u.s. airlines? i guess it's quite clear, valuation differences and with that factored in what do you like the best? >> we upgraded united to an overweight we have buys, overweight ratings on did big three and comes down to the individual investor anybody that's bulled up on prospects we think all three

look attractive high if you believe we're on a recessi recessionary precipice or the shutdown continues for a materially longer period of time that influences the picks, as well the answer depends in part on who's asking >> delta ceo said it's $25 billion in revenue this month. this is one of the most vocal industries about the shutdown. how's the industry going to be affected >> well, that depends on the duration of the downturn you know, delta did cite about $25 million in january and, of course, january's a light travel month. if it extends to march we would expect that number to increase delta has the least exposure to government revenue american has the most. united comes in between and american and united have hubs in the d.c. area so, look, the duration of the downturn has an impact and worried about the

knock-on affect. you hear about government workers maxing out credit cards just to put food on the table and even if we achieve a solution in washington, you know, this weekend hypothetically, you know, if you've been put in a severe financial bind because of the shutdown the likelihood that you plan a lavish summer vacation is low and worked about that knock-on effect and tsa issues compounding that potentially. >> what are you looking for for united >> well, you know, we think that they're going to give an eps range for the first time for this year. looking for $9 to $11 innings range for 2019 and, you know, in united speak if you will, sometime that means 10 to 12 they tend to guide conservatively we are looking for a top line, revenue guide of down 1 and up 2% and not dissimilar of delta afforded us this morning. >> jamie, thank you for joining us. >> always a pleasure. >> getting ready for the

numbers. >> okay. >> from jpmorgan. >> united after the bell today. >> exactly we'll be back after the break with the closing countdown. five minutes left to trade. we'll talk about how companies can protect themselves with robert herjavec "closing bell" back after a break. may take after stonington, self-employed and without employer benefits. we haven't had any sort of benefit plans and we're trying to figure that out now. if i had had a little advice back then, i'd be in a different boat today, for sure. plan your financial life with prudential. bring your challenges.

you should be mad at leaf blowers. [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.

welcome back to the "closing bell." we have 2:30 left to trade the s&p up a full percent. there's the intraday chart for you. you can see a steady improvement in the day and if we flip to jpmorgan intraday you can see it had something similar. biggest bank here in the u.s., of course, reported earnings before the bell. and people felt it was one off in the quarter that improved in the day and helped the market. if we look at the four indices, you can see the nasdaq led the charge higher. on a sector basis, tech is right there near the top along with health care and communication services so the banks played a part and much more of a part where the tech names of netflix hiked the prices and investors welcomed that. up about 7% or so today. bob, as i bring in bob, looking at the pound intraday. rallied to be essentially flat

approaching the close. theresa may, massive loss she faced and investors just about comfortable. >> brexit increased more likely. that's the tone of the commentary >> that is why we saw the move because people think she'll win the vote of confidence tomorrow and she said she'll reach out across the aisle in parliament and not a majority for hard brexit. >> a low for the day and not just the pound but on the s&p. we were drifting lower and on that we turned around, as well. >> which i think is extraordinary stuff. >> i'm encouraged by the action of the banks typically in earnings season you sell off the the banks a bit i think because the news isn't that bad number two, remember, 25% declines in most of the banks in the fourth quarter and drastically oversold and a lot of them book value or below at this point and i thought the numbers were not bad

maybe disappointment on the mortgage of wells fargo. maybe in line. but overall i thought the consumer commentary out of jamie dimon is very positive. >> i agree city up, missed on revenue jpmorgan up over the last two days and would not have happened a few months ago at the bell up 157 on the dow. 1.1% on the s&p. that does it for the first hour of the "closing bell." sara, back to you. ♪ welcome to the "closing bell." i'm sara eisen wilfred frost will rejoin me with mike santoli. let's take a look at how we finished the day on wall street. it was an up day first time we have seen that in three sessions the dow with gains of 151 points s&p 500 having a nice 1% rally

nasdaq fueled by netflix and up 1.7% russell 2000 up. health care services rallied almost 2%. technology up 1.5% utilities also gained. british prime minister may suffering a historic defeat. we'll discuss what's next for brexit and the markets coming up. but first, hirl's tere's th stories on the radar stocks finishing up. jpmorgan and wells fargo latest to report weaker than expected fourth quarter revenues and netflix rallying after announcing a big price hike. we'll hit all of those stories joining us to talk about it, michael blockman this glass is halfful with brexit, some misses in the bank

reports and managing to rally. >> we're almost exactly half full relative to what was lost in the three months. i noticed on the close we are up 11.2% from the lows three weeks ago and down still 11.2% from the all-time highs in september. what's interesting about it is the market did kind of slow down getting to this level that everyone's been watching so i don't think anyone has been proven wrong yet if you were bearish a month ago, we'll get a huge bounce and stall out of resistance and then -- you're still not wrong but the market every day is actually behaving in a way that's i think encouraging in the sense that again rallying after morning dips, the volatility index continues to sink from the open to the close every day so it's a sense of stock by stock movement opposed to macro driving things right now. so for now i think it's checking off most of the boxes and can't

declare victory. >> michael, are you encouraged >> what happens next is up to one thing than's the data. everyone's worried about the government shutdown and, well, that might affect data the trade deal that might atekt the data. we have seen how the markets sell off in the last three months affecting the data. empire manufacturing number weakest in a year and a half came out this morning. tomorrow the beige book and a catalog of disasters in terms of slowdownand the loss of confidence over the past six weeks in the beige book and i think it's a problem the question is, with this market rallying, stais there bee spending can we see data to improve can it get better? if you want to be bullish you have to believe the data is better i think it's better enough to ride the growth stocks better. >> when? isn't the shutdown going to

obscure or maybe not even lead to some releases of data when are we going do get a clear picture? >> we have seen this before. the thick about the shutdown is this if there's things stalled out, there's pent-up demand with disasters like government shutdowns, this happens. the biggest worry is this. es ter george who's known as a hawk said something interesting today, you know what we'll wait on rate hikes because they haven't kicked in yet we have to ask are those going to stifle some of this pent-up demand or bigger confidence in the market there's factors here i think the right answer is in the middle not heading to a recession or 4.5% growth here. >> let's talk about earnings, specifically the banks earnings. of course, out this morning. jpmorgan, wells fargo reported before the bell today. jpmorgan missed expectations and then was in line with its revenue. wells fargo closed lower

after beating on earnings but falling short on revenue estimates and also we spoke with the cfo john shrewsberry earlier about his outlook on the economy this year. >> we are finishing up a year i think looks like 2.9% gdp growth in the u.s. and our best forecast will be something like 2.5% to 2.6% we have dialed back expectations for business fixed investment but we had a big year of stimulus from the tax reform at the end of 2017 going into '18 >> we spoke about this yesterday whether we got some, you know, beats on one line and questioned whether the market got more of the same and with jpmorgan we saw the market rally with that. >> so far, exactly i think the market has a willingness to set the fourth quarter aside and say, you know, we have gotten through that. it was a different environment and right now it is all about

all you really have to know is that nothing suddenly shifted downward in terms of the underlying economy and i think that's what investors at these prices of bank stocks all they kind of needed was to make sure that we weren't rushing toward this kind of end of cycle crunch in terms of credit costs going up and the rest of it. that clearly doesn't seem to be the case right now once we get two days of this type of activity and the muscle memory kicks in saying nothing can sink the banks, well let's wait and see what goldman and bank of america has for us i think it's a cushion psychologically about this group. >> do you feel comfortable owning the banks >> no. nothing i have seen yet is changing that. look they're beaten up. best thing to say about them the second best thing to say is we don't have a lehman disaster looming unless there's something we don't see i was worried about loan loss provisions we are not at the point of a problem that we need to react to doesn't make me want to own the

stocks though. i'm seeing the banks like utilities. they're boring i don't see the growth upside. where's the money? they're eaten on all sides zero cost trading at fidelity and jpmorgan you have money management under pressure it is not exciting. >> mike, at the start of the week at least, they were trading at 65% of the level of the s&p 500 average. >> that's your argument, right cheap enough >> where is the growth coming from >> yeah. you could argue that the ceiling might not be that high you know for this rebound just for those reasons. right? the growth. >> they're growing. >> yeah. i know. >> might not be seeing strategic growth to the size of netflix. trading wasn't great but equities trading up for jpmorgan. >> i wonder if the regional banks are the ones that are the

truer test where it's credit cards, commercial loans, housing. >> i think the thing you'd say that's disappointing today is wells fargo because they didn't have that exposure to trading and the big revenue item for citi and for jpmorgan. and maybe those share prices perform better looking at numbers but the fed asset cap to the end of 2019 weighed on the price. bank of america could pull things together in a better light. they'll be heavily exposed. >> what happened on the bond desks? at the last few months of the year >> particularly december and the rhetoric from citi and from jpmorgan is people sat on their hands in that quarter. >> scary >> because they got to the year end and they decided i'm not sure what to do. don't forget in december we saw yields come back down a bit again and see that on a fixed -- >> a big move no one called for. the 10-year at the 3.25, people would roll your eyes and they

did. that's what happens. it's a down and keeps going and now sitting there and no one's doing anything you would think if growth picked up and the economy got back on track and see commercial lending better the issue with that is in the middle of the last year when things allegedly still looking good and going well, you had wells fargo reporting that competition was really tightening up and stretching themselves that worries me. >> this quarter it bounced back. so they're saying -- shadow bankers pulled out structurally they take the market share. >> but the potential upside, like what's exciting from here that doesn't do it for me. >> i understand. >> i don't think it's coming back. >> totally agree and playing devil's advocate but the argue systematic that they're cheap and you don't need something exciting but something relatively solid the other point people make on a long term argument is even if you see a recession, credit

levels, length widiquidity leveu saw regulation and that that wouldn't be repeated again and none of them are exciting arguments. >> not going down 80% and have the existence threatened which happened in 2008 not maybe much comfort but yes. >> my issue is, okay, long a low yielding bond and short a put on someone doing something stupid that's why i would characterize owning banks right now i can be quiet 99% of the time but that's how i see it right now. >> nonetheless, reprieve today, citi in particular two very strong days up nearly 4% yesterday i think it was shares of netflix higher after announcing a price hike. julia boorstin has the details julia? >> reporter: netflix adding 6.5% after raising prices today for 58 million subscribers in the

u.s. and latin america increasing to $13 from $11 lowest cost offering to $9 and the highest cost plan is increasing by two bucks. this will immediately impact new subscribers and roll out to existing subscribers in coming months netflix telling us it's continuing to invest in great entertainment and we can expect netflix to spend more this year on content than the roughly $8 billion it spent last year as rivals amazon, hulu and hbo ramp up the spending and expecting competition from disney and at&t streaming services launching latter this year credit suisse saying it bolster confidence and ability to achieve guidance for margin gains. now, since the last time netflix

hiked prices october 2017 shares have gained over 90% and the company also added about a 5.5 million u.s. subscribers in the year following that price hike and seems like they know how much subscribers are willing to pay. >> good context. julia, thanks. >> i love the way the market reacts to this, mike, because percentage terms it's a big price like and yet the market loves it and as consumers we're not likely to cancel the subscriptions. almost amazing they haven't done it earlier. >> right they have. it's been a -- >> bigger price hike earlier. >> it's a part of the bull case of pricing power with the low absolute cost per month. i also think maybe people are reading into the fact that netflix went ahead with this as they wouldn't do it when subscriber growth is flagging perhaps so maybe it's a kind of tacet reassurance that the membership numbers are okay when

they report. but no >> why is there no risk here that the subscriber growth would slow >> there is. there is risk. they see modest churn. increase in churn. i might have expected -- wouldn't have surprised me, let me say that, if disney stock is up and raising the pricing umbrella over all streaming services but maybe netflix's play is there's a finite amount of ala carte streaming dollars and claim more of them before everybody else gets in the market >> perhaps a shrinking number of disposable income dollars out there. i'm thinking about demand elasticity and marginal utility. people are not going to cancel netflix in droves because it goes up by $2. maybe this pressures the cable guys more. maybe it pressures other consumer goods more.

i don't think so this seems to be one of the increases. it is like talking about jpmorgan i'm bearish on the banks loan provisions increase increased from here to here on this bucket. i view netflix similarly >> hold on netflix does have exciting growth prospects. >> it does exactly. >> you're comparing it to jpmorgan. >> issues people have with stocks here. we can go from growth to value and say here's a fallacy of jpmorgan and about netflix and all about relative and law of numbers. a small increase up here and an it looks big and talking about changes in the vix up 23%. it's 3 points. calm down. that's different we're talking about two different things here. >> keep in mind this is not an annual rate of increase. right? you have to -- you kind of account -- >> "bird box"? >> i have not. people in my household have. >> if you blindfold yourself and drive your car you better hope

the police find you before i do. >> got it. >> okay. >> black rock set to report tomorrow leslie picker with a preview hey, leslie. >> black rock, of course, the firm saw about a quarter of its share price disappear and that was actually half as bad as many of the other managers. as went the market, so, too, did the share prices of the firms that trade in and out of them. declines in stocks, bonds, commodities shrank the firm's assets under management and caused investors especially retail investors to yank their money out. analysts don't expect the tough backdrop to turn around any time soon deutsche banc wrote in a note that the first quarter managers may be the worst in recent memory set to report tomorrow morning across the industry, a bright

spot is etf in flows where they're focused on blackrock said it would be laying off 500 of the employees to reinvest and investors are focused tomorrow on how blackrock will plan to reduce the expenses wall street estimating a very slight increase in eps and revenue compared with last year and may take a bigger catalyst to propel the stock higher, guys >> all right tough times for blackrock. leslie, thank you very much. of course, comes after the layoff announcement news we had recently what's the - >> they have outperformed th other asset managers of that much scale because they have a diversity of client types, asset classes and basically they're diversified across the scene and the scale producer in there and not prevented them from being caught in the same area of the products so i don't know if there's necessarily a way out

and kind of a quality name in a group under a lot of pressure. trading at a slight discount to the overall market that doesn't change the fact that what leslie said that it's no catalyst in sight. >> michael, can you get excited about this financial >> maybe a silver lining in the cloud. look i don't plug my guitar in and play blackrock a sad song here a lot of their traditional business, active management, under attack by lower cost alternatives etf, the same thing. a smart guy said two things that they get paid for. sourcing and structuring blackrock has a huge etf business that even if they don't make a lot of money on it it's attracting the other things like flies to honey and make money doing things like private equity, the transactions we talked about we talked about portfolio construction i predict that's something to hear about in 2019 and more

important and bade for that? no it drive it is things they have of sourcing and structuring. >> all right we have an earnings report unit united continental is out with the numbers. hi, phil. >> reporter: these are blowout numbers for the fourth quarter for united airlines. earnings of 2.41 a share the consensus was 2.04 a share and 70% above the fourth quarter of last year which was 1.40 a share. passenger revenue per seat model, it was up 5% in the fourth quarter that's at the high end of the guidance and above what most expecting. they were around 4%, 4.2%. the margin growing by 90 basis points up to 7.8%. the guidance for the first quarter of 2019 -- $1 a share for eps. that's above the consensus which is 84 cents a share. another reason why the stock is

moving higher with passenger revenue expected to be 0% to 3% positive most are saying they expect it in the negative 1% to positive 1% a couple other notes here. the big question is why? why such a big beat relative to expectations remember as they have been adding more routes, more service that are in smaller cities, feeding in to their hubbles in the middle of the united states. we are talking about chicago, houston and denver, high yield markets, routes. clearly a strategy that's working for united airlines. one last note. they're also ordering a combination of 28 airplanes, four 777 and four 737 max from boeing don't forget tomorrow morning exclusively on "squawk box" 8:00 eastern we'll talk with united ceo oscar munoz. we talk to him again about blowout earnings for the fourth

quarter, 2.41 a share, well above consensus. back to you. >> it's going to be a good one thank you very much. >> you bet. >> phil lebeau we were talking about the doom around this industry and the weaker demand and the probables delta was facing. >> exactly i think people were leaning in the direction of this group is in trouble everyone can see it in the stock looking cheap and so obviously this is relief and the guidance is a big deal. i've just looking. american and delta also looking to trade slightly higher you know in the after hours all this means really is the market is not saying this is a zero sum game. >> right even though delta already reported. >> yes. >> but anyway, michael thank you so much for joining us >> a pleasure. up next, live to london on the crushing brexit vote loss for prime minister may. remember the shoes from "back to the future" now the future is now.

i should say for nike the company launching self lacing shoes to operate from your phone a live donraonemstti from wilfred frost coming up. (vo) switch to the network awarded by rootmetrics and j.d. power. buy the latest galaxy phones, get galaxy s9 free. fifteen percent or moreo on car insurance?ou did the little piggy cry wee wee wee all the way home? weeeeeee, weeeeeee weeeeeee weeeee weeeeeeee. max. (sigh) ...maxwell!

yeah? you're home. oh, cool, thanks mrs. a. geico. fifteen minutes could save you fifteen percent or more.

you'this january 18th-24th, would like to say, "thank you." enjoy a free week of movies on us- from networks like epix, lifetime movie club, hallmark movies now, and history vault. just say, "show me movie week." that's a full week of your favorite hit movies on your tv, online, or on the go with the xfinity stream app. [shouting] it's all on us, and it's all coming soon. you've got some serious watching to do.

welcome back parliament voting against prime minister may's brexit plan we have the latest from london >> reporter: this is a historic defeat for theresa may you have to look back for a similar defeat in the house of commons with an individual vote. what this means, though, is that the prime minister for the first time after weeks if not months insisting that not only was this a good deal but the only deal available to the house of commons acknowledging tonight for the first time there might be other options on the table and here's the immediate reaction when the vote tallies were announced. >> mr. speaker, the house has spoken and the government will listen it is clear that the house does not support this deal but tonight's vote tells us nothing about what it does support nothing about how -- nothing about how or even if it intends

to honor the decision the british people took in a referendum parliament decided to hold. >> reporter: may promising to listen to what other political partys have to say about a solution to brexit to try to take on board their views and more immediately facing a motion of no confidence tomorrow. that's because of this announcement from jeremy corbyn, the leader of the opposition. >> i therefore, mr. speaker, inform you i have tabled a motion of no confidence in this government and i'm pleased -- i'm pleased that motion will be debated tomorrow so this house can give its verdict on the sheer incompetence of this government and pass that motion in the government >> reporter: now, mps on both sides telling us that they don't expect that motion necessarily to go through. relying on members of may's conservative party to vote

against her for that to happen and a former leader of a major party telling us just in the last hour to make it easier for there to be a second referendum on uk membership of the eu and something to watch getting closer to that 29th of march deadline for the uk to leave the european union. >> not sure anything was cleared up willem, thank you very much. in london tonight. so let's talk about it because there are a number of scenarios. we know she faces a confidence vote. >> tomorrow. which the market is pricing in she wins. >> because she won the last one? >> not really related to that because they're pricing this time all of her mps will vote in favor of her because they don't want labor to do well and last one saw some vote against her. i point out remarkable intraday turn around in the british pound but the pound at 1.28 down

significantly and hasn't really cleared up where we go from here the one big development which today continues the same vein is that no deal is less likely. any deal on brexit remains incredibly unlikely and winning the vote tomorrow and then reaches out across parliament to try to come to a deal and lost this one by 230 votes and the eu min t maintains they won't give up much more. >> i think there's also a hope and i think for this reflected in the pound's rally that there's going to have to be an extension of this. march 29th is hard date to crash out of the eu if that doesn't happen that would be terrible for the eu and the uk. so the odds are now raised that they're going to push back the date. >> seems like that's where the market landed and greater possibility and we don't know for sure. >> i think that's possible but

an extension of article 50 is much harder than canceling it. and it's highly unlikely they'd extend it past the dates of the european parliamentary election so when you talk an extension i think you are talking maximum a month or two. >> kicking the can down the road and the market is okay with. >> i'm saying i think an extension is actually more unlikely and the market is just rallying today off the back of the fact that no deal becomes less ikely i don't think it's because necessarily the date is moved. if we get do that eventuality you'd cancel article 50 altogether. >> what would that mean? >> put brexit more indefinitely and the extension -- >> they're making it up as they go along. >> more or less limbo, status quo, that's what i meant. >> the extension of it choirs from the eu 27 canceling it, the power is to the uk extending it is hard. >> they have to figure out

something. >> they can cancel it if they need to. i feel the pound rallying intraday because no deal is slightly less likely and still down significantly year to date. >> it is interesting to see the overall risk appetite as a result of this, as a result of the better pound because it seems uncertain. we'll see what happens. >> also, don't take for certain she wins tomorrow. >> true. up next, we'll break down the charts to explain why history says the recent market volatility may be here for a while. well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

if you've been keeping score the s&p 500 is now up 11% since the lows it hit that brutal day on christmas eve mike santoli looking at whether the s&p is following a historical pattern to spell big gains for the rest of the year. >> yes this is an episode from history that rhymes. this is courtesy of our friend jeff and what he did is study the price action of the s&p 500 in the last year and compared it to what fits most closely to the whole path of markets from previous eras. you can see how well it matches. so this is the last year in blue of the s&p 500 and this is this '56 through '58 matched up near the all-time highs at the time you see right down through the lows it was very close what is interesting is we have

outperformed that over here and this is the end of the last week and this is where we stay. he is not saying it has to follow along there was a brief recession that began in 1956 that the market anticipated and it went down about 21%, peak to trough, down about 20%. so what it would suggest and goes with a lot of the pattern analysis which is it's unlikely to dothis and much more likely even if we recover and december 24th was the low to do this and then maybe get up from there that's the bullish scenario, even a bullish scenario says we have to back off i think that that was interesting. we had a brief recession the fed was tightening up until that market peak and seems like similarities you have to take it with a grain of salt and it's fun to anticipate your question i was not there watching the markets >> young boy.

>> that's all right. >> but, mike, i guess what you grew with the extra green line is a sharper "v. >> we have. >> that almost makes me worried that this can't be repeated because it's difficult already. >> obviously we diverged in here a little bit, too. but yeah it raised the question of whether there's something else we can look at 1962, 1998, more like a "v" and to temper people's expectations up 11% in 3 weeks and off to the races again and that wasa bad dream. it's probably too much to hope for. >> all of us were around in 1992. >> i was watching the markets. >> thank you. time now for a cnbc news update with sue herera. >> hello, everyone here's what's happening at this hour it is day two of the l.a. teacher's strike they're demanding higher pay,

more staffing and smaller class sizes which officials say could bankrupt the system which is the second largest nationwide. the schools remain open with substitute teachers. florida high school shooting suspect nicklas cruz returning to court gop texas governor abbott beginning the second term after being sworn in this a ceremony outside the state's capitol and made no mention of president trump's border wall after the oath of office. rihanna is suing her father. her name says her father ronald and his partner have violated her trademark and falsely suggested that their business fenti entertainment is affiliated with her. you are up to date

that's the news update this hour back downtown to you. >> sue, thank you very much for that sue herera back at hq for us. we'll discuss the sky high costs of cyber crime and whether companies will ever get the upper hand. but first, nike launching what it calls the future of footwear self lacing shoes you can control from your phone. we'll put them to the test when we come back

welcome back nike unveiling its new smart shoe today here in new york. it's called the adapt vb with laces controlled through an app on the smartphone. retails for $350 about half as much as the original self tying sneakers available in 2016. we got our hands on a pair to try them out. >> do i stand up >> we got them in the size 12? for bigfoot wilfred.

there's an app. >> pretty comfortable. >> you control left or right if i move up the left, that tightens. >> oh. >> wilfred you can have preset. >> show the camera what the app looks like they're behind us. sorry. >> they're taking it you can ton the lights on. there's a little light on your sneaker. >> in the front? >> this is built for athletes and the first one is for basketball it is on the court tomorrow in a celtics game and you can also have presets settings for when they need to be at the bench for instance tighter shoes. i don't know if they need to tighten up the laces in the middle of the game versus the bench. apparently that's a thing. >> bigger question is, can they not tie laces? >> there are no laces on the shoe. >> right but -- >> if you went all the way down, loosen them fast >> two-second delay and then once it realizes it's pretty instantaneous. >> got to talk to the cloud. >> come back down again.

>> we can get the pink blast it charges you have to charge it. right? for batteries. it can last up to 12 days and charge about 15 minutes for one nba game and then four hours if you want the full charge. >> can i play with the adjustment >> you are about to face off against mike santoli, the most old-school guy in the world. >> i think it's impressive i do look down and i'm sure some major nba basketball players pull this off better but i think they look ridiculous i'm wearing like snow boots. >> they look like regular sneakers. >> i think it's pretty great otherwise. >> that's a factor >> and -- yeah. >> you are done. >> go all the way down. >> no race. >> and then race. >> i'll definitely win. >> just like a flick. >> and then i'll judge you have your sneakers ready >> ready. >> one, two, three. >> go. keep going keep going.

>> go, go, go. >> i win done >> yours didn't tighten yet. >> see i can still hear them. still going. mike wins. >> well, anyway. >> now win. >> good effort for mike. >> very cool. >> that's a thing. a lot of other companies are experimenting with the smart shoe technology. underarmour with the hover and connected to an app and nobody does the self lacing things and comes from "back to the future." i talked to tinker hatfield a few years ago and see it as self driving cars, the next platform to learn and getting data. >> self walking next. >> you need to be able to control somebody else's shoes. >> i'm glad i got it back off sara. >> see how they do. >> thanks to nike for bringing them down. we'll be talking walgreens and microsoft. don't go anywhere.

and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today.

frstill, we never stoppedss wmaking it stronger.e.

faster. smarter. because to be the best, is to never ever stop making it better. the new 2019 c-class family. lease the c 300 sport sedan for $429 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. companies worldwide will spend over $120 billion on security products and services this year alone. that's according to gardner. yet security breaches are more and more common in recent history. >> the latest victim and second largest was marriott late last year where about 500 million customers had data stolen so what measures can big business take to avoid these breaches shark tank host and ceo robert

may have an idea for us. thank you for joining us. >> thank you for having me. >> what is your take of things whether things improve drastically any time soon? >> well, i don't know if things improve any time soon but we have better tools today and certainly more threats i love the report about the connected shoe that's just an example of a shoe that has a cloud access now and it's a data. what we are seeing is more and more things are being connected worldwide. and every one of those things is a way to breach or hack into a network. >> so if companies are spending more and more money to protect themselves why are we seeing more and more hacks? >> the adversaries are always smarter and newer tools but a combination of the right tools and the right people what we do is we really encourage large corporations and individuals to work with somebody who can help them it's not enough to have the team internally you got to have external support

in terms of managed services and expertise. the other thing that's changing now is threat hunting. you can't just defend. you have to have the ability to actually attack your own network which we call threat hunting with vulnerability scanning and different tools. >> robert, we hear about the mass breaches from time to time, these big companys have to contend with and we know the costs are for them to rectify those perhaps, do whatever settlements with customers and a pr thing but in terms of what's stolen and the information that's exploited by those people making those invasions of networks is the payoff there for them we never really hear about what their incentive is and if it's an attractive target. >> yeah. the average cost of a breach is $5 million not including the remediation after the fact so that's a lot of money but more importantly, it's your brand and it's the suffering that you have in the marketplace.

if you're a ceo you have a responsibility to your customers to protect their data. the hackers are selling those patient records, the average cost of a record today i think is $5 or $6. credit cards but the big change now is politically driven attacks and stealing information i think if anything we have learned in 2018 is that corporations have a responsibility to protect customer data and privacy. >> robert, is there a difference in capability globally on this area are some countries stronger than ever in cyber security or cyber warfare? >> yeah. traditional foes, china and south korea, north korea, eastern europe but the big concern right now in the cyber security community is what's happening in the states you know, in order to protect your systems you need tools and software and fancy lights and

things but you need human beings you need human beings to analyze what's going on in your network. and with the u.s. government shutdown, we really worry who's watching that network. if no one's watching the network, it's just an open opportunity for foreigners to get in or adversaries or other hackers. >> what's happening to all of the data that is being stolen and hacked you know, we sort of as excu consumers get used to reading the headlines. social security data recently stolen through marriott systems. what happens to all of that? >> you know, it is interesting i really worry about that. we have almost become immune to it it drives me nuts going somewhere and want to buy a pair of jeans and they want my e-mail address and they want the personal information i'm that weird consumer that says, no, you can't have any of that all that data is being sold to

other people so people are accumulating that data and making money off selling it to other people and finding ways to attack in the future you know, all that data compiles on to itself and it just become points for people to attack in the future >> robert, thanks very much for joining us we appreciate it. >> yeah, thank you very much and now walgreens signing a major deal with microsoft hoping end off amazon's health care push we'll have the details of that coming up.

microsoft and walgreens teaming up to fend off amazon in the cloud and on the ground. jon fortt joins us from hq to

look at the impact of the deal >> on one side of the table you have microsoft who is duking it out with amazon, google, ibm and others for cloud supremacy on the other side you've got walgreens trying to transform from a pharmacy to the most provided health care services in the cloud era. the ceo told me why this deal is strategically important. >> in all of the partnerships as we are transforming our business to cloud infrastructure, a.i. capabilities as well as with microsoft 365, we are building a lot more of what i'd call industry-specific layers but in order to do that we still have many system integrators, many isps with domain expertise that are all coming together on our platform so it's not just about microsoft but it's about being able to orchestrate that entire ecosystem of tech providers in order to help companies like wba

transform. >> one, microsoft has to help walgreens off of legacy systems. two, microsoft and walgreens will have to build services on that foundation. that's why this is a seven-year deal microsoft has similar deals with kroger, volkswagen, walmart among others the question is can microsoft pull all the pieces together crisply enough to turn these into success stories that will build momentum versus amazon, guys. >> i find this fascinating, jon, the fact that microsoft is attracting all these amazon rivals to come partner with it, because obviously microsoft competes on the cloud, but the retailers compete with amazon, not to mention walgreens with the pharmacy how big of a business is this becoming for microsoft i know they have a big deal with kroger, another amazon rival who else can they take >> it's everybody in enterprise is the kind of adjustable market here it's potentially enormous. but i just talked to amazon's ceo of cloud, andy jassi, a

couple of months ago his argument is don't worry about us competing with you, you've got to build your own business if we've got the best cloud and the best tools, you're better off building it on us. that might resonate with some people we'll see how this plays out microsoft will have to make the case despite the fact it's pulling together all these pieces and players from the enterprise ecosystem, they can execute crisply, guys. >> what does it take to do that? what are they exactly doing? >> well, not only do you have to pull the data out of the legacy systems, write new software that works for the cloud, but then you've got to get all these different players to work together to create something new. it's easier to get, i think, players to work together executing on an older model that everybody knows already, but who's going to bring the expertise and the vision for how that digital experience for a pharmacy and health player, how that's supposed to look. will they get these things to market quickly enough? will they get those digital kiosks built out in 600 stores

in the time frame that they really need to build momentum versus whatever amazon is going to do at whole foods or in go stores i think that execution is key. >> we will watch it. jon, thanks. very interesting partnership, jon fortt. > ext we'll take a look at the biggest stocks making moves after hours. back after a break building a better bank starts with looking at something old, and saying, "really?" so capital one is building something completely new. capital one cafes. inviting places with people here to help you,

not sell you. and savings and checking accounts with no fees or minimums. because that's how it should be. you can open one from right here or anywhere in 5 minutes. seriously, 5 minutes... this is banking reimagined. what's in your wallet? his family. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory,

and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance.

let's check in on some headlines and moves after hours. united continental getting a big boost after beating on both the top and bottom lines, issuing pretty strong first quarter earnings guidance. phil lebeau called it a blowout. oscar munoz will join "squawk box" exclusively tomorrow at 8:00 a.m. let's get another check on the british pound. back to flat by the end of the session. a roller coaster up and down for that the vote of confidence tomorrow. we'll also keep an eye on goldman sachs, bank of america both are up 2% week to date so they have priced in a bit of positivity making it a tad harder to perform tomorrow. >> i think that's the typical earnings season ebb and flow people extrapolate from one and maybe have a give back

day to day market action has been relatively healthy but hasn't proven that we've got escape velocity off of those lows. >> and a chance to hear from the ceo on the earnings call. >> he will be on the earnings call that doe today for "closing bell." thanks for watching. >> have a good night "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tonight on "fast" check out shares of united airlines reporting earnings moments ago the stock is soaring after hours. we'll bring you all the details. plus, we are in the midst of the longest government shutdown ever and wall street is starting to worry one top strategist says it's just a sideshow. he'll tell us how much higher he thinks the market is going from here. first, we start off with the power of netflix ♪ i've got th