san diego padres it's a big market but they're not one of the teams that has been out there. >> apparently never won a world series >> i think they have been in one maybe. >> what is it in poker when you put all the chips -- all in. >> all in on manny. >> how old is he in year ten of this >> 36 or 35. >> okay. >> manny good for manny. >> good for manny. thank you for watching, everybody. >> "closing bell" right now. ♪ good afternoon welcome to the "closing bell." i'm wilfred frost. >> i'm sara eisen. president trump considering auto tariffs on foreign made cars bob lutz and jim press both here with what that could mean for the industry. plus, an interview of paypal ceo dan schulman what he told me about competition in the payment space and comments on facebook and

amazon all to come. first up, though, what the markets are doing one hour before the close a big improvement from what we saw this morning futures were lower early before the bell and there's been a turnaround the dow up walmart's a big part of that story. better earnings. s&p strong up .4 the nasdaq also charging ahead almost half a percent higher coming off of eight straight gains. >> below the open, high of the session, now. >> that's been a trend lately. >> europe closed and that was not a majorly soft session and negative and allowed the u.s. equity markets to pick up. >> what is helping shares of walmart soaring after a big beat on earnings record holiday sales after the government's december retail sales report showed the biggest decline since 2009 what does it say about the health of the consumer bring in simeon siegal and kate rogers following walmart

what is the general take on the consumer versus the comeback story? >> hey there, sara yeah, a takeaway and hearing from the ceo doug mcmillan and talked with the cfo by phone that they really feel the consumer is strong right now i know we have been concerned about potential softness, a slowdown in the year to come and not the story we heard from walmart today. obviously, they're monitoring that but to walk you through the big numbers today, u.s. same store sales up 4.2%, compared to estimates of 3.2%, the 18th consecutive positive comp, a really important stat. also, their e-commerce group up 43% in this quarter and up 40% for the full year. those are really impressive stats and seeing strength, continuing to monitor the situation, but from the walmart perspective things look really strong right now. >> kate, and on a two-year view, i think they recorded their best same store sales growth in ten, nine years and talks i guess to

the broader individual company turnaround to execute on. >> that's certainly true obviously a lot of e-commerce development, grocery another big area which, sara, you follow closely, as well they have pickup in 2,100 stores working on delivery in 800 locations and they said that the areas seeing strength in, toys, electronics. >> buy online. pick up in the store simeon, you don't follow walmart specifically but the other retailers and what does it tell you about ten years? consumer's got to be okay, right? >> yeah. 100% i think it's interesting we have this conversation the three of us last week and trying to parse out the data with an amazon number we have already seen. a costco monthly number and now walmart. what else is there to explain the december number? we have the results. so i think what it shows the consumer i think is doing great. i think the question of the

individual health of specific retailers, that will fall to inventory question that is will fall to preferences but from the consumer read i think we are checking the box on that retail sales number. >> retail sales number revised up or a one-month only issue or a stock specific issue >> noise, something going on in that month but i think the important point is i don't know the date february 19th, december data is back ward looking. >> when we break down the themes, is this an e-commerce versus bricks and mortar theme what is the story? >> it's interesting because normally it is that simple and if we think about the government data versus this it doesn't work at all we have brick and mortar and e-commerce growing and not from the government i think the way we're thinking about it is a brand versus box element here and thinking about brand equity and companies can own the consumer so if they need to walk into a walmart or need to go find a michael kors handbag, that's

where you have the control where it's a function of just driving volume because you have existed in the past, that's more difficult. >> kate, what did walmart say about guidance in terms of forecasting the strength later on this year and say about where they expect consumer spending to be >> they reiterated the guidance given earlier in the year. they did mention, though, a better performance in october and they were guiding based on better numbers that they had given earlier in the year and once again consumer strength does really seem to be there one more thing that's important is tariffs and that question and what it means for walmart moving forward. they mentioned china, also brexit on the call this they were monitoring those two situations and tariffs front continuing to monitor that situation and that costs and prices that consumers pay in store may wind up going up and something they're keeping a close eye on. >> so, simeon, you are saying those that fare best control their consumer who's your top pick to do that in the year ahead? >> we think capri, i mentioned michael kors, creating a

conglomerate you have a brand with power there as well as this ability to embark self help one thing, at the end of the day there's a zero sum game of the consumer, shopper and a company and what happened last year was everyone took price points up and the ability, the retailer allowed to drive sales through higher prices. that means the consumer affords to spend and the retailer gets the margin i think what we are seeing now is excess level of inventory creeped up into the system is removing that ability to do price so what that means is the consumer can still spend but they get to be much more discretionary in terms of where they throw their dollars. >> important theme, also want to bring up the double downgrade today. two beloved stocks in retail ulta and lululemon and not bearish. raised the price target and said best in class. >> we talk about stocks and companies all the time, fantastic companies. they have been fantastic stocks.

we have enjoyed recommending them on the show a lot at the end of the day things don't go to infinity and there are a few things worth asking that when you get to a certain size is there a limitless addressable market no are there -- can you always raise margins? no we took advantage of a recapture, we're talking about 50% to 100% from recent lows feels like a good time to take profits. >> thank you so much for joining us kate, thank you also very much one question on that. >> we wanted to lead with walmart and had to get that in. >> i respect the restraint very good. joining us to talk broader markets, fehr nan da, venda and our own rick santelli. victoria, a good sign of positive market sentiment today. not huge gains up.

but shrugging out european losses. >> yeah, we have positive news the walmart earnings you were talking about, that kind of negates some of the retail sale number we saw last week, some of the negativity from that so people are more positive on that we have seen consumer confidence turn around. that was positive for january and we know that's core lated to consumption and positive news out of the u.s./china trade war. trump tweeted over the weekend there's progress there look at industrials, up i think 16% year to date a lot of that probably having to do with the positive news there. i think there's momentum moving forward. continue with the jobs claims, the ism number an gives us leeway here going into the end of this first quarter. >> i mean, it is remarkable to see the ongoing resilience and strength in the market and talking about an s&p just today, it looked like we were going to start weak an now all sectors

are higher except for health care decision -- what's primarily driving the optimism in the buy the dip mentality? >> i think the first thing to note that this is an unwind of the exaggerated move down in december which happened in extremely ill liquid conditions. yes, we were hit with bad news the market would have been down in the best of times but in december markets are so illiquid that they fell to the worst december since '31 most of this is an unwind of what happened at the end of the year and what that brings us to today is fine balance that we have been, you know, seeing between the lift that we get from valuation which is still very supportive in the u.s. and, of course, outside the u.s. and the drag that is coming principally from idiosyncratic

risks. some as the previous speaker noted have abated a little but other risks waiting down the pike you mentioned potential auto tariffs. you know japanese hike. later in the year. ecb leadership change. italy in technical recession and europe, you know, doing basically growth being rather weak and that's really what we have been trying to balance and the balance of news shifts, you know, a little bit to the better side we get the sort of rally we are seeing today >> rick, is the dollar strong today or is it more of a bit of a bounce back of the currencies like the pound and the australian dollar that have been so weak of late? >> well, i think it's that i also think there's some psychology involved in the dollar index movement today that gets connected back to china and the negotiations and the this notion that one of the pillars of this agreement that our government and the chinese are

working on is stability with their currency and ours. and i think part of the desire to be long the dollar index is basically thoughts on how it will be and how it will react should we get a trade arrangement made and the lead-up to that. i also do think that the euro currency, all the bad news is out there with regard to the euro and now it's just going to be biding time and find out what policy changes or economic changes are ahead. so i think this is one of those points where a lull is going to not be beneficial and i think the dollar could slip a little bit and in the bigger picture the dollar's very sound. i mean, let's consider global equities not just the u.s. i mean, you look at the dax having a good year but the problem with the dax is that it's 17%. below its highs even though it's having a year and the dow jones industrial average right now is

only about what? 3.3% from the highs and i think that's an important dynamic to distinguish. real quickly, interest rates around the globe are certainly getting pressured. we settled at 268 for 10s. we are lower, we have a lower yield, higher price than last year and we didn't finish off last year all that well either >> yeah. i mean, if you want to see the dynamic in currencies, look at the dollar/yen overnight, koroda talking about possible easing. the fed pivoted and then everybody else started to talk about more easing and having weak global growth which is why you see pressure on rate, as well victoria, loretta mester came out talking earlier in the year talking about raising interest rates and the central bank look at finalizing the bank sheet runoff and wind down this process and i think the market

appears to be cheering that. is that a part of your story >> i think they are cheering that and i mean, if you look at the balance sheet runoff, this is pretty much anticipated before she said that they would wind down by the end of the year. if you look at it, you know, obviously reserves they said higher than previously you are looking at a trillion dollars in demand reserves we need a balance sheet of 3 trillion and we are close to that so there isn't that much further to go. the question i think that we are really looking at and how i think it affects treasuries is mortgage back component is really large, over a trillion and if they're only going to move down about 500 billion once the mortgage backs are sold out they have to start buying treasuries to replace that, to keep the balance sheet where they want it and could give downward pressure to yields going forward. >> let's see what they say if anything in the minutes released from last fed meeting coming out tomorrow guys, thank you.

victoria, vinay and rick. >> i wish they were actually minutes. >> what do you mean? >> they kind of finesse them, don't they >> the notes massaged but it's better than nothing. >> yeah. president trump giving an update moments ago on trade talks with china eamon javers with the details in washington eamon? >> reporter: the president getting a few questions of roer reporters and asked about the chinese negotiations ongoing and that march 1st deadline for reimposing tariffs on china. the president seemed to indicate that that deadline could slip. >> i think the talks are going very well with china you're referring to and the talks are going very well. our group just came back and now they're coming here. i can't tell you exactly about timing but the date is not a magical date, a lot of things can happen real question will be will we raise the tariffs? because they automatically kick into 25% as of $200 billion

worth of goods they send so i know that china would like not for that to happen and i think trying to move fast so that doesn't happen. >> reporter: we have gone from aides here at the white house saying that the march 1st deadline is a hard and a fast deadline to the president saying it's not a magical date and indicates he might be willing to allow that deadline to slide the president also giving us something of a preview next week with kim jong-un of north korea, this's hanoi, vietnam. the president not raising the stakes for that summit saying he is in no rush for denuclearization of north korea and signaling as long as there are no active nuclear tests by the north koreans he's happy and not overly eager to get to some final deal with the north koreans in next week's summit, guys. >> eamon javers, thank you, from the white house. coming up, the trump administration could be on the verge of another major tariff move this time targeting autos. we'll bring you details straight ahead. after the break, shares of

paypal up double digits this year >> there's an explosion in digital commerce and we are riding that wave so what we see me rey sive >>orfrom my exclusive interview after the break. we are back in a couple of minutes. it's absolute confidence

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by the gig or get unlimited. and now get $200 back when you buy and eligible smartphone. click, call, or visit a store today. welcome back paypal seeing over $500 billion in total payment volume last year earlier today i sat down with the ceo dan schulman to talk about the growth in the payment space. >> venmo grew at 80% year over year in terms of volume process. this year we think we'll process over $100 billion on the venmo platform but the secret is it's not just a payment transaction it is really tying into this desire in the millennial generation to tie in your socia network. it is a social experience. you do a payment tag it put an emoji, share it with your

friends. they see what you're doing and it's exploded and we are adding more and more services to that by enabling you to use venmo to buy things at merchants, to have a debit card associated with your account that's allowing us to also monetize venmo and really seeing a tremendous turn in our ability to take that business model and turn it into a very profitable one for us over the medium to long term. >> and that question of monetization, of course, up on the earnings call significantly. i think you said it won't be profitable in the next two quarters and not a target of exactly when internally you're hoping it will be profitable any update on that >> yeah. what we said on the call is that we are exited last year at an approximately $200 million run

rate for venmo up from nothing 12 months ago so it's obviously, you know, hitting an inflection point in terms of its revenues but in terms of profitability, what we said on the call is that, you know, people shouldn't expect it to be profitable in the next, you know, one to two quarters but my view on it is it's an incredibly precious asset for us we ought to keep investing in it, adding more services to it, continuing to monetize it, see the revenue, start to scale quite nicely and then eventually that will lead to profitability but i wouldn't predict exactly what quarter we'll turn profitable on that. >> you mentioned the partnerships you have with the big banks and same time they collectively have partnered to create zell. >> yeah. >> and that's growing very fast and slightly more than paypal last year collectively is that going to be a winner takes all space do you think and does it sort of unfair they

partnered together in that way >> no, i don't think it's unfair at all i think the way of the world as i mentioned are companies coming together, sharing platforms, we share our platform with other banks and financial institutions, as well. but peer to peer payments is exploding in the market. it is a multihundred million dollar marketplace and not a winner take all and the difference between like a venmo and a zelle is pretty stark. on average, a zelle transaction is $250. the average venmo about $50. the average zelle transaction is once a month, venmo is four or five times a week and i think both will grow and we're seeing all-time record net new actives

coming in to venmo, the amount we process axccelerating. >> company's doing so well in the u.s. and europe and paypal is known brand in those areas. what about asia? are you disappointed on the pace of traction in the last set of few years? >> asia is a fastest growing region in the world. has been for quite sometime. so i think that's the thing of digital payments it is a great industry it could be, you know, a $100 trillion market. that's sort of the market, total addressable market we are playing into we may have like 1% to 2% share ofthat market today and so every region of the world to me is one that we can expand in but every region of the world today almost equally is growing

at double digit pace for us and so i'm quite pleased with our progress in asia but i think we can do so much more there still. >> is india the sort of biggest tuptd for you? >> india's one very large opportunity. we're gaining traction there i'm very pleased we launch domestically in india about a year ago and pleased with the traction we are getting but you look at japan, indonesia, china, i mean, they're all great opportunities for us en including other markets there. >> dan schulman there, ceo of paypal on the earnings call, the biggest focus, when will venmo be profitable? even if he's not committing to late this year or next year, it is in their control and only if they continue to expand the top line aggressively will it be that they delay profitability. >> it's changed behavior i use it constantly. >> very few companys have that. >> google.

>> google, uber, venmo. >> how's it changing traditional banks you cover? trying to catch up >> so the interesting thing is partner with the big banks and not take them on and that was a very smart step they did and helped both sets of companies significantly. zelle is an interesting pushback and growing fast as dan addressed there and the interesting opportunity for them is smaller banks across the u.s., huge market share in total, they don't have the ability to invest in the same level of tech as the big guys as we saw for the suntrust and bb&t merger but they have a big market share of the fast growing digital payment space already but a lot that they can grab and whether that all comes through as profitability we'll see that's a big swing movement. >> up 21%. financials are down over that period. >> very strong, indeed more from that exclusive

interview with dan schulman and the future with the partnership of facebook and the views on and that the amazon hq2 -- >> takes a side? >> makes it clear i think a hint. >> should be good. >> specifically talking about company -- other companies. also when we come back, mondelez with the financial outlook for 2019 today and what the ceo toldus about growth in the snacking business stralgt ahead. >> sorry. later, director david stockman, the thoughts on trade, the looming deaf sit and why he thinks we have reached a peak trump moment we are back in a couple moments.

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welcome back to "closing bell." there's the sector heat map. only one in red, health care a strong afternoon in particular not far from the session highs off 50 points or so on the dow 0.3% on the s&p. materials, consumer staples, consumer discretionary top the list. time for a news update with tyler matheson tyler? >> four people wounded, one seriously in a knife attack in the french city of marseilles. officials say the knife wielding man known to police is shot dead another official says there was no reason yet to think that it was a terror attack. saudi crown prince mohammed bin salman in india after visiting pakistan. this after a suicide bombing

attack killed at least 40 indian soldiers in kashmir. the crown prince expected to make an effort to diffuse tensions between the two countries. and the west virginia house of delegates killing a complex education bill that prompted a statewide teacher strike it was not immediately clear whether the vote to end the strike union members to meet later today before deciding on what they will do next. and meghan markle spotted in new york city today. wow. dozens of photographers gathering outside the mark hotel for a glimpse of the duchess and in new york for a baby shower. with friends how nice is that back to you all. >> she can't travel quietly these days. >> no, indeed. >> they were there to see her and the baby bump. >> of course thank you. >> you got it. now the trump administration considering new tariffs on

foreign-made cars and could increase costs phil >> we are all trying to figure out what did the commerce department send to trump essentially what we are looking at is this the commerce department has conducted a lengthy calling investigation in the potential impact on national security of foreign vehicles to the united states but it is unclear when or if president trump will act on this report and has, by the way, up to three months for a decision of whether or not german imported vehicles, whether or not they are changed the tariff they pay has to change from the current 2.5% and do they ratchet it up to 25% as the president has threatened. if that happens, what would be the potential impact on sales, not only for those european automakers but the industry overall?

the center for automotive research conducted the following work looking at this potential impact and came up with the conclusion of a 25% tariff on european imported vehicles and parts, it would cost the industry, the industry, not just the european automakers, just under 700,000 vehicles in sales and the average vehicle price would go up about $1,400 take a look at shares of the german automakers, diamler as well as bmw and comparing those with general motors and going back to january of 2017, basically the trump administration and you see that, yes, general motors has outperformed the european auto stocks although let's be honest here gm while it's doing better since january of 2017 has not exactly had a heck of a run, guys. so that's what we are waiting on see when the president acts on this recommendation from the commerce department. >> phil, i know it's hard to find people in the industry that

are actually in favor of these tariffs but what would be the argument, what would the president say would do did reason to do leveling the playing field with us and the europeans >> the president believes it's not fair that the european automakers with a 2.5% tariff and vehicles sent to europe have a 10% tariff that's the first argue frmt the president. the losecond argument is if they build as many here they won't have to import to the united states and we have seen an increase both in terms of production and employment from bmw in south carolina and mercedes in alabama. so his push to get more vehicles built in this country has worked in that regard though he would probably come back and say, you can do even more you don't have to send as many vehicles from europe to here. >> got it, phil. thank you. >> just going to say, as well, sara, lots of factor that is play on this and we always talk

about u.s./china trade, which economy's feeling the heat german, broader eurozone, is feeling the heat. >> u.s. and china. >> when you have a global slowdown, if it's just purely because of cyclical factors, they're feeling it an saw it come out over the weekend at the munich security commerce angela merkel talking about the tariff issue and clearly finds it insulting because it's framed as a national security threat. >> right he would do it in the name of national security and saying they're a threat doing business. >> their economy, france, italy, germany feeling the heat for all sorts of reasons, much more than the u.s. economy is only increasing the pressure. >> later, gm vice -- former gm vice chairman and former chrysler president joining us to weigh in on what the tariffs

could mean and whether there's her it merit to the idea. also, elon musk back in the podcasting game -- there we go -- >> i don't think he smoked this time >> you think of letting other automakers build on tesla's platform >> generally we found it's like quite -- it is not easy to work with traditional automakers. that's not like -- first of all, they're not banging down the door to work with us >> we'll speak with the analyst who inrvweteied musk right after the break. don't go anywhere. ♪ (butcher) we both know you're not just looking for pork chops. you're searching for something more... ...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place.

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elon musk back in the world of podcasting in a new episode out today. here's what he said about how close tesla is to fully aon the mouse self driving cars on the road. >> i think we'll be feature complete this year meaning the car will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention this year. i would say that i'm certain of that, that is not a question mark. >> here to talk about what else musk said in the interview is

tasha keenie to conduct the interview. welcome. >> thank you for having me. >> i find it interesting he did this our phil lebeau put in many requests and likes to talk to the fans you have a $4,000 price target on tesla. >> we do and you know what? we focus on disruptive innovation so i'd say, you know, contrasting the firm to others we focus on the long-term picture, most of the interview's about autonomous driving, not the short term sales or production tar gets we think institutional investors put way too much focus on. >> to follow up, would you like to see him, though, face more questions and answer the questions as it were from those institutional investors that might not be as positive on the stock? do you think that would put to bed the negative issues that -- negative questions that are posed? >> you know, we'd appreciate more questions that are focused on the long term

i think, you know, i have yet to see anyone value tesla's autonomous value most of the price tar get is on the autonomous driving opportunity an we don't think there's enough focus on this and wanted to focus on it in the podcast. >> what did you hear from him on that front >> musk doubled down on the promise thinking that auto pilot is feature complete by the end of the year and then up to regulators about when that will get released and then when that's released without any human help in other words, when can you fall asleep in the backseat. but we talked a lot about tesla's data advantage and highlighting for a long time, the only automaker collecting data off of customer cars and gives tesla this incredible long tale of events that other cars testing the vehicles just don't have and that's ultimately what you need to get that last step to full autonomy. >> what is it about then i imagine there's mapping type

apps that are with people in their cars that give the likes of waymo for data. >> yes mapping is one layer but that's sort of -- think of it as a base layer of autonomous driving. you really need data from the entire autonomous sensor suite of the camera feed coming off of the car. sort of all of the sensors together and you need, you know, a fairly robust processing machine in the vehicle, as well. so what tesla has is basically if you look at waymo, so they report in california what they're getting out of the test fleet. all of those test prototype vehicles have a driver that sits in the front, an engineer, that takes over the car when he or she needs to think of tesla's cars as a test fleet so it's thousands of cars compared to hundreds at the next best competitor an the consumers are acting as that test driver it is basically free labor for tesla to train its machine

learning algorithms. >> why do you think it's a winner of the changes? isn't every single automaker getting into this and questions whether the demand will be there and the winner >> every automaker is getting into this and we think they should and the opportunity should be valued at $2 trillion today in the equity markets and virtually unaccounted for. the advantage of tesla is a data advantage and to train a machine learning algorithm, the more data the better it becomes and tesla will improve at exponential rate that others can't. when elon says by the end of the year that a tesla could be full c ly feature autonomous, the others haven't. >> when you see the negative calls on the stock price from some, are there any arguments that worry you or all conspiracy in your eyes

>> the focus of production and while of course long term you need to make sure that sort of the manufacturing tall sent there, tesla gets the model 3 production rate, we like to focus on that but not in the quarterly increments that other investors like to pin tesla do a month or two late, you know, that's okay with us because we still see the long-term picture and missed a major time line by a year or more that would be an issue but we don't put that focus on the short term. >> okay. thank you very much for joining us. >> smoking snot. >> not this time. now hsbc warned of slowdowns in china and the uk and that could have an impact on the business in the year ahead we have the details on that coming up. and fresh off of his victory at the daytona 500 nascar racer denny hamlin is here live headed to post nine to talk about the big win and the business of auto racing "closing bell" will be back after a quick break. [knocking]

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sunday marked the 61st running of the daytona 500 race which included this massive 21-car pile-up we're joined by this year's winner, denny hamlin about to ring the closing bell. thank you for joining us congratulations on the victory. >> thank you second time around feels just as good as the first, for sure. >> i'm sure it does. biggest race of the year and all that. >> nascar is a little bit different than other sports, the biggest is the first race of the year and to win, you know, for the second time in four years is just amazing and a win for the coach joe gibbs who's the car owner, his son passed away a month ago and i was driving his car, his number, and very special and meaningful win for us. >> yeah. that's a nice tribute. the ratings for wetter

a sign of a turn or was it -- the crash? >> hope so certainly hope so but yeah upwards, i think, 8% or so that the ratings were up. really there's been a giant change in leadership of nascar in the last year and they're making some active changes to the schedule, the way the cars are running, things like that. that are really getting the fans excited about watching nascar again. >> that's one of your passions, how the cars are managed and the cost of doing that i was looking at the statistics and nascar was meant to be in stark contrast to f-1 where it's prohibitively expensive to get into the sport where are we on that scale and which direction would you like to see it go in? >> you like the technology side of it and you have to be reasonable and what nascar was built on is the cars to bring the cars out of a showroom and race it and that really interested the american viewer and, you know, really we have got to kind of get back to that and priced the way out where we

were losing car owners when you have a championship car owner leave the sport, that's tough. but we were slowly but surely the teams and nascar getting together to figure out how to make it cost effective and getting the sport reeled back in and hitting the grass roots. >> among your sponsorships is jordan brand. >> yeah. only one with the jordan brand and see the great partners we have, fed-ex with me for 14 years as the primary sponsor of my race car and obviously toyota, coca-cola, little burger, sportclips and the jordan brand and major companies and associated with the race team and been with us for many, many years fedex sees amazing access and able to entertain their sponsors and employees alike. you know they have been in the sport for a listening time. >> denny, we have to leave it

there. thank you for joining us. >> thank you >> congratulations on the victory and enjoy ringing the bell later which is just ten minutes away of course, we will have the last bit of the market action for you coming up. also shares of mondelez up 20% so far this year up next, why the ceo says 80% of its growth in snacking could come from the emerging mkearts "closing bell" will be back after a break.

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welcome back to "closing bell." let's check some individual market movers. i have hsbc falling after posted annual profit. also warning on some possible slowdown to come in china and the uk down about 3%. the interesting thing here was the trading that disappointed, sara pretty poor especially in equities bad fixed income and pretty poor equity they took a charge, potentially related to brexit provisions and this is a different story to some of the other more worrying european bank performances looking at it pretax profit, $20 billion for the year revenue 54 billion, up 5% year on year and growth came in behind expectations and again

how it's valued, below book value. so this is a sort of solid bank, big bank presence in asia. listed in london that grew and not as well as expected >> true. all these banks under pressure again as the european economy weakens and more talk that the ecb could ease further. >> and trade, finance in asia. which is hsbc's big presence. wanted to hit mondelez shares up 20% so far this year earlier we spoke to the ceo about what is driving growth in snacking listen >> 75% of consumers these days snack on a daily basis and that's growing and millennials will often snack up to four times a day they'll skip complete meals just to have a little snack and so, it's probably a consequence also of our daily lives where we're on the run,

moving, sit down meals become less and less normal and so that's what's really driving the category it is not only in the u.s. it's happening all over the world. in fact, in the next years we expect that 80% of the growth in snacking will come from emerging markets. >> so we picked that clip, a, because it's always interesting to hear about consumer behavior. >> i don't think that's just a millennial thing. >> people skipping meals, on the move, busy but also, it's serious story for the stock which has outperformed the broader staples index and specifically other packaged food companies, talking about campbell's soup also in snacks, kellogg, general mills and out today saying that they're tar getting 3% growth an doesn't sound like much but better than a lot of that industry and why also you're seeing coca-cola targeting 4% organic growth and start to see which staples are doing better speaking to

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welcome back to the "closing bell." everyone, here we have the s&p 500 intraday chart for you we are back near the flat line i hoped to frame this as the low of the day was start of the high and the close. that was true to 3 p.m. and not the final hour of trade and slipping a little bit there. four indices bringing in bob pisani and the you essentially flat but, bob, overall, a better performance, of course, than european trade just slipped a little bit into the close. >> really remarkable the vix below 15 first time that's happened since october. the breadth expanding. we start off 2 to 1.

we close 3-2 advancing every day this is happening for weeks now and near historic highs and that's the thing that i watch. more stocks advancing than declining every single day. >> welcome back. there goes the bell. we are up just a couple of points on the dow at the close essentially flat on the dow. s&p up slippage there into the close. that does it for first hour of "closing bell. sara, back to you. ♪ lots of gain there is into the close. welcome, everyone, to "closing bell." i'm sara eisen mike santoli is off for the day. sort of in the middle of the trading range where we have been all day. dow with a gain thanks to strength in walmart on much better earnings this morning s&p 500 with a gain of a little bit more than .1%.

at the high of the day it was up 9. at the low down 8. the nasdaq composite rose for a seventh day in a row up about .2% and the russell 2000 index of small caps continuing to underperform, outperform, excuse me big story of 2019. better performance in the small caps keep in mind we are coming off of a strong backdrop eight weeks in a row of gains for the dow and the nasdaq coming up, two former auto executives weigh in if president trump does go through with the tariffs on imported cars into the united states. joining us to talk about another day, another rally, dennis burrman is here and chris heisey so, dennis, you know you had a very rosie view of the economy and the market. >> before the turn of the year, yes. >> and that's appearing to be confirmed with the strong comeback of december's ugly

wreck in the market. >> it was pretty ugly. santoli who was here was doubting me. i don't want to claim any victory laps the market can giveth and taketh away i do want to focus on walmart if i may because what they had to say there was very interesting to me, sara. the comp sales across a revenue base of close to $500 billion, i mean, to move the needle that much as they did - >> 4.2%. >> yeah. i believe three in the u.s it was a substantial achievement for that company but i think it's important to show and we'll talk about the other retail things here in a moment i think it shows that you have to have the capital to invest in building both an online and physical world and walmart has that ability and i have some qualms about the retail sales figures that came out last week. >> you and everybody else. >> those were impressive numbers but it takes capital and sale and not every retailer has that right now. >> let's continue on walmart and switching the order.

chris, to come to you, therefore, on walmart, what is your take on that compared to the broader retail sales and do you think that scare about the state of the u.s. consumer has passed and we can be bullish on the broader sector again >> i'm glad dennis said that because the scale, the capital intensity of some of these big retailers is so impressive and to move the needle like you talked about is indicative of a rising real income environment and this whole talk of retail sales in december being down 1.2% and oh my goodness they never really looked further into the story. it was just a headline number that came out and could very well be distorted. we don't know. government shutdown or not but the general belief that rising real incomes are here are very sticky and the unemployment rate lower and the overall broader environment growing at 2% allowing retail sales to

compound themselves. >> we have david schtick joining us on walmart. up 2. 2% do you think that's fair and the company with momentum behind it, talking structural or cyclical factors. >> i don't think it makes a great debate but i agree with both of your other hosts there it's an important number so walmart has scale there were questions of retail sales at holiday i think a key is walmart -- for the first thing is walmart invested, invested in people years ago and hours and now technology and the way it connects with the customer and investing is part of it. i also think the consumer at the lower end of the income spectrum all the way up mid and even above middle income is feeling better it's jobs, wages, gas prices that have fallen at the high end there's something different going on. >> so, i'll take the other side. i mean, yes, walmart numbers

were very strong and pricing drove the gains over foot traffic. foot traffic was up, a good sign also, walmart is taking share so walmart is doing particularly well right now in a broader retail landscape and so the question is what does that mean for the rest of retail? >> it was interesting that they talk about the margins coming down, i believe 27 basis points because they have to make that investment to get groceries into your car you know that's a new system inside the store. >> and growing 43% is expensive. >> it's a rounding error in the course of things and helped them get the help they needed but i would hate to agree with you but i do, sara. >> you have to that's the terms of the show. >> we are seeing some of the - >> whether you are host or guest. >> that's right. i'll let you two decide. >> he knows that's not true. >> you saw the outcome

toys r us is a primary example they were caught with a debt load and interestingly walmart talked about the value of toys in their mix. >> david, to that point, walmart's gain is who's pain most of all? >> well, you know, toys brings up a good example. there's a debt load and financing involved when they get inventory levels but really it's a long period of not investing in the consumer experience and so, you could answer that question you just asked that way which is, you know, who sells groceries? who sells basics who's not investing? in what the consumer sees? the consumer is spoiled for choice it is really smartphone and digital connections and information. they know where to shop for service and and anybody not keeping pace, you know, is going to be a source of share gain to walmart and to others. >> so, david, before we let you

go, what do you do with the stock now that it has been an outperformer how many quarters to continue to post the blockbuster numbers it is so large. >> yeah. they talked a little bit about fading tail winds of tax cut they're so big macro affects walmart along with execution and strategy you know, we have been equal weight doesn't feel great today but we were well ahead of the street on this number thinking that, you know, they're getting stickier one of the earlier comments on your piece here was the consistency of gains is really important. as that continues we'll see what they do with investing in new businesses and can do and comes down to that terminal growth rate and what should we assign that's the big debate the street is having and will determine what people pay for it. >> all right, david, thank you very much. back to the broader markets for a second the gains have been remarkable in this mentality where the dip was bought in the middle of the day and the glass half full

approach to markets, chris s. there too much optimism of a trade deal with china or the prospect of a corporate earnings slowdown or does it seem right to you >> i think it seems right because fair value just use simple math based upon very low earnings growth of 3% to 5% for 2019 will take you to about 2725 fair value in the first half and then look to 2020 later in the year to get you closer to 2900 or a new high and the reason it feels right is because it feels like the market has a sign on the back saying catch me if you can because sentiment has not really improved at the retail market as bob pointed out before, the advance to decline indicator is actually improving as the day goes on and particularly the middle of the day leading me to believe professional investor first and then the catch me if you can mentally means if

earnings hang in there expectations are so low to revalue the market into the summer and the end of the year. >> dennis, do you fear, perhaps, we have had most of the good news on the macro political factors? clearly china/u.s. trade is not solved but the market is closer the pricing in victory than disaster on that front. >> seems about right to me and take into accounted a few different things here. we are at -- i mean, the nba all-star -- i don't know if you watched but the nba all-star game - >> i was not. >> great players and shooting 50% from 2 points and in my mind the market is 3% gdp, 4% unemployment, 1.6% inflation and really good statistics remember, two years ago talking about we can't budge 2% gdp growth but we are there. but that said, we are now at dow almost 26,000, are we not? the tax gains have all sort of worked the way through the system seeing the buybacks, seeing a

lot of political noise both about share buybacks and dividends and some of the stuff out of the uk around the social media platforms. i think -- i'm a little bit less optimistic than chris here i would say that the market has to prove it from here on from where we were before. >> also seeing a lot of price increases and that's a theme we have noticed with earnings season almost over the message of corporate america is prepare to pay more companies including kimberly-clark, mcdonald's, fastenal, hanes, mohawk, they're among the names passing along higher prices to the consumer. there's a very long list it's a triple whammy of threats from cost pressures, from rising freight costs, materials costs to tariffs to the strong dollar. and yet the overall economic inflation numbers appear pretty subdued. so - >> 1.6% inflation, great rate. arguably even a little lower

than where the fed might like it to be and interesting to see if the price increases stick. snunlg t you know technology that's available i think pushes the onus back on the provider my guess is that they will try to raise and they will have difficulty raising over the next year i don't know if you'd agree or not. >> completely agree. the stickiness is what we don't know at this point they will try. the window is open to increase prices rising real incomes allows that. that doesn't early in the cycle. not late cycle but feed into overall inflation and then what you get is it rolling over the price increases don't stick. >> clearly, pricing pressure dmes c domestically is a factor do you want to avoid them given the slowdown fears >> we have had a bar bell for a while in the portfolios. overweight the u.s. and emerging markets. didn't work last year and now

starting to come through largely speaking because the dollar's been relatively stable and overall the stimulus package or not within china or not is helping. and but really what's really the impetus for a barbell particularly for emerging markets is reinflationary tendencies are in and once the fed paused and hearing talk there might be some re-liquefy case to the market that really helps emerging markets. >> do you remember, dennis, how many times to talk about the tina market? no alternative and everybody's talking about that again in a period of weakening growth and everyone's talking about central banks stepping in and rates are low and people are buying stocks. >> are you saying that you should be buying bonds now >> no. there's no alternative to stocks. >> to buying stocks, yes, yes.

the 10-year, right convinced to be above 3% through 2018 and 2019. i guess i'm skeptical. i don't do what he does. i do something different but in a portfolio, my view is, keep it rather steady, rather stuck where it is and see where it goes from here and probably less convinced that there's a ton of upside from here given where the valuations have gone four multiple of 16 plus and if you look at house tore cli is awfully rich. >> we'll discuss this in an exclusive interview tomorrow with kimberly-clark's ceo michael hsu. they have been leaving in terms of some those of price increases for tissues and diapers. >> you get the best guest. d daytona 500 winner. >> thank you. >> and chris and dennis. >> thank you. >> it is the most important trading hour of the day. >> it is thank you.

>> thank you great to see you both, as always. california with the latest report on tax revenue of the marijuana industry and we have the numbers in san francisco >> hi, wilf. california department of tax and fee add administration with the marijuana numbers and for q4 the revenue of cannabis in the state amounted to $103.3 million that includes excise taxes, cultivation taxes and sales taxes. compare it with the q3 numbers of marijuana revenue than and that was 100.8 million, about the same from the third quarter and done a lot of reporting about the gulf between what was originally projected for revenues coming in versus revenues coming in and reached out to analysts and some analytics companies to see where we stand with that gulf right now. but there is right now a bill in the state legislature spearheaded in part by the state treasurer to slash the taxes

because a lot of businesses that are fledgling businesses having a tough time with taxes and regulatory concerns and so that bill would right now slash those taxes. at least temporarily to help those businesses get a foot back to you guys. >> thank you very much for that. up next, much more from my interview with ceo dan schulman. find out what he says of amazon's decision to cancel the new york city headquarters and whether companies should seek tax incentives. david stockman, president reagan's budget director, explains why the soaring national debt is a red flag for the economy and your investments. coming up. creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. welcome back in a recent analyst note nathanson called the facebook and paypal partnership a match made in heaven i spoke with paypal ceo dan schulman about plans for expanding that partnership >> we are already big partners with facebook. we do that for other technology

companies. including google, microsoft. we have a partnership with alibaba. so big tech companies around the world, we're partnering with but i think there's more and more we can do with facebook we are natural partners together they can take the best of our platform assets to use them to serve their customers in ways that they want to. in fact, what you are seeing with paypal right now is we are partnering with marketplaces around the world, you know, the marketplaces that we're partnering with now are already sub fa substantially larger than with ebay and growing 40% year over year so i think there's tremendous amount of partnering not just more with somebody like facebook but tech companies around the world. >> offsetting the lack of growth you have seen from ebay of late? >> yeah, i think so. >> in terms of when you

considered deepening a partnership with a company like facebook, some people criticized the way they used the consumer data you have such important data of your consumers, financial data is that a concern for you before you deepen a partnership with a company like that? >> no. we only use our data the way we want our data to be used and our whole value proposition since our very beginning as a company was shop without sharing so we invented tokenization, you being able to give us your financial information and encrypt it so that retailers don't see that financial information. we only share that information to complete a transaction. and so, partners, tech companies, wireless carriers, can use the platform and know by using the platform that consumers will know that their data is safe and secure, it's an incredibly important part of the

value proposition. >> i want to touch on the fact we're here in the new york city offices and just recently there's focus on the tax incentives that amazon was offered to build a headquarters in new york area when you saw those incentives, what did you think about that? do you consider that unfair that they were being offered some incentives in a way you weren't? >> i think it's a matter between those individual companies that are vying for them and the city or the state that's looking to attract them here. my view, though, in a bigger picture manner is that companies need to step up and be a force for good they need to actually think of their employees as the most important asset they have. and i think in many ways a social contract was broken numerous years ago between companies and their employees

and i think now we need to step up to help our employees, to help them through difficult times, we need to be a good citizen of the world we need to have a vision and values that allow us to help work with governments, to work with ngos, academia to solve and tackle very tough problems and so i think companies need to think about their role in the world in a much more expansive way that goes beyond just like what is my tax incentive to go here or relocate and what is the place in the world and add value to it an give back i think that brands need to be about much more than just making money. they have to have purpose and profit and those two things need to exist and co-exist seamlessly the best companies in the world will be able to do that. >> so forgive me or following up

on this but does that -- >> please do. >> that amazon having been offered those incentives and done a deal if you like on the terms should have worked harder with the communities and the politicians to be accepted there rather than pulling out? >> i can't really comment on, you know, the way that amazon thought about what they were doing or how the city thought about that because i really wasn't a part of that conversation i do know that personally i think that ceos, as leaders of companies, need to stand up and take visible roles and we need to advance and somehow embrace some of the really problematic issues that face us not just here in our country but around the world. for us, that's how do we drive financial health and inclusion that's our vision and our mission and our values help to

support that companies think about their mission and vision and how do they drive against that and make a difference in the world? >> dan schulman again, the ceo of paypal and didn't want to be drawn on the deals of the amazon new york hq2 issue, but saying there's bigger issues than just the tax incentives. >> i couldn't tell sort of going after amazon for the social contract thing or not because i think amazon would respond keeping prices low for consumers and get them really affordable and convenient items. >> yeah. listen he articulated the answer carefully but i think a clear theme there. separately on the facebook point, very interesting because after the most recent set of numbers a lot of people saying will they both announce a deepening of the partnership and what does that mean for earnings for paypal they didn't do that. i read this answer as saying they will soon and waiting to see. there's no announcement and been

on analyst notes and ebay on the decline for them and facebook is a huge platform to make up the difference. >> investors would like that >> for sure. up next, former auto executives bob lutz and jim press here to tell us how worried the industry and consumers should be if president trump slaps tariffs on imported cars and auto parts j. and why the index fund may not be as trance parent as some people believe

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u.s. auto makers voicing concerns of leading president trump to place tariffs on imported cars and parts and a statement writing, quote, the impacts would be long term and reaching every single u.s.-made car and truck has imported components and assembly it would result in higher prices for all vehicles >> joining us now to discuss, bob lutz and jim press welcome to you both. >> thank you. >> what a treat to have you here at post nine. >> it is wonderful to be here and find you where you really live. >> yes instead of looking into the black camera little hole there. so tell us what this would do if the president does go through with it to the auto industry in

this country. >> it's a very difficult situation for the auto companies. you know, the word tariff sounds okay if you're talking about economics but it's a political tax and it raises the prices of cars, the prices of parts, it hurts competitiveness. it will reduce the number of cars sold. it raises unemployment and the other problem is that even if it's negotiation the affect is uncertainty. for the manufacturers and trying to develop plans for the future. so really there aren't many benefits for the car companies. >> bob, it is great to have you with us, as well, although remote where do you stand on this particular threat and tact i have sensed before that with the president in his intentions perhaps not on his tactics is that fair >> you know my view on this. the trade system is broken

every other country and every other region has massive tariffs on imported cars and it's just like repaving a road you know, when you repave it, you reduce the number of lanes, everybody says, oh, this is terrible it's taking me longer to get to work why didn't they leave it alone we were used to it but when the road is potholed enough, ultimately it has to be fixed. and president trump is trying to fix a fundamental imbalance in automotive and automotive parts trade permitted to fester for decades. and that's why we have been hollowing out our industry and the reason is, oh, everybody has imported parts of course they do. when there are barriers against our products and no person -- almost no barrier against theirs, the automobile companies are going to do whenat's financially interesting in the short term

that's why a lot of american suppliers no longer exist. others are foreign owned with a lot of imported content and the president is trying to fix it. and any time you have a system that's fundamentally flawed and then you reach in to fix it there's going to be short-term consequences will the price -- would the price of imported cars like particularly german cars go up sure, they would american cars going to germany get a total of over 30% loaded on them. and our tariffs are under 2% and there's no federal vat that's imposed on them so it's just -- it's totally unfair and it's being fixed >> well, bob, you an i disagree about the v.a.t. point but the tariff point stands. if these tactics in the end led to those two numbers being the same do you think that would then lead to a big change in the sales ratios, for example, of

u.s. cars in europe? there are other big factors at play bob, hold on to jim, other big facts that mean all of these tactics perhaps won't lead to enough of a gain to have been worthwhile. >> i think it's a point of a couple of things is there fair trade? we all want fair and even trade. about 20% of u.s. exports to europe and about 29% of the german exports, automobiles, come to the u.s. it's fairly balanced we have a 25% duty on trucks they have a duty on cars so the playing field has to be improved i think bob has a point but the fact is what's the problem the second issue that you get into, i think, is that the american auto companies really don't produce the vehicles that the german manufacturers make. they haven't in fact, getting out of the car business and so, you don't have another pickup for the domestics

if it doesn't include the japanese, there's the winfall. because they do make sedans. >> it hurts american consumers, bob. it hurts american automakers sourcing parts overseas. hurts european automakers. who does this help >> well, first of all, beloved old jim press was using percentages. 20% of american exports go to europe there are practically no u.s. exports of automobiles and the germans pour vehicles into here. and on that v.a.t. i insist if the german producers paid the v.a.t. for vehicles that are exported i wouldn't have a problem with it because that would equalize. >> that's not a sales tax then it is a sales tax. >> i know. >> applies equally to u.s. cars sold in europe, as it does

german cars in europe as french wine and california wine. >> okay. >> it's not -- you can criticize europe as being a high tax socialist place if that's what your argument is but it's relevant on the trade debate. >> a german -- >> there's grounds on the 10% versus 2.5% tariff to focus on because it's legitimate. >> a german vehicle exported to the united states carries a partial tax load not paying the v.a.t. there's no federal v.a.t. here american vehicle exported has the taxes imbedded and goes to europe an gets another 20% socked on it that's why american cars are 40% more expensive in europe than they are in the states and german cars are cheaper here than they are in germany something's not right. that's my point. >> well, the comparison there should be about the u.s. cars sold in europe and european cars

sold in europe not u.s. cars sold in the u.s. and europe. we'll disagree until the cows come home. >> fundamentally. >> i get the 10% and 2.5% tariff differential sara, final question. >> i want a final word here, maybe jim press, is this all a matter of national security? >> that's the other question is. is there a national security buying mercedes instead of lincolns it is not in my mind a national security issue but more a political issue and, of course, trying to get leverage on improving the trade situation with our competitor countries and an appropriate thing to do but what tool you use? are you using a shotgun to take out a molar? using pliers >> that's the pothole argument in question. i get the idea that nobody likes to fix potholes but good to have better roads but talking about confronting germany, italy, the uk, japan with a national

security threat and raising tariff rates on their beloved industry >> well, you know, just because they're our allies doesn't mean we have to accept everything that's done and gave the store away about 30 or 40 years ago when europe needed the help and japan needed the help and everybody needed the help and we were so rich and powerful we could afford it. well now we are at the same level as everybody else and facing tariff barriers and we have essentially none. as far as i'm concerned, president trump is going to fix them and god bless him for that. >> all right, guys thank you both for weighing in good to have a debate on this. we'll see you soon. >> thank you. >> excellent debate. time for a cnbc news update. >> everybody the supreme court ending a long legal fight by

ruling that a texas death row inmate is disabled and may not be executed. the justices ruled 6-3 in the case of the inmate bobby james moore. justice ginsburg is back on the bench eight weeks after lung cancer surgery she had returned to the supreme court building on friday for the first time but that was just for the justices' private conferences. a judge given the green light to a lawsuit of a parks advocacy to stop the $500 million presidential center from being built in a chicago park. the judge rejected the city's request to dismiss the case. usa gymnastics announcing it named nba executive li li leung the ceo pledging to make it a priority that the sexual abuse claims are resolved. that's the update at this hour back over to you. >> leslie picker, thank you. we're watching two names making big names here after

hours on earnings. seema mody with the news. >> london club with one cent beat climbing to nearly $3 billion in the fourth quarter. the ceo said with u.s. credit card debt, our mission to help our customers improve the financial health has never been more urgent. still, the company did issue 2019 revenue guidance below analyst expectations thus why you are seeing shares down over 5% and up about 30% this year. let's switch to devon energy surging on its earnings report after announcing plans to add $5 billion to its stock buyback program and raise its dividend by a penny to nine cents per share and a plan to spin off the canadian assets. devon energy up 6% wilf, back to you. >> seema, thank you very much for that. now, he was once president

reagan's budget director but david stockman explains why he thinks president trump is doing damage to the economy by running up the national debt and sparking a trade war. plus, a major airline is partnering with helicopter company blade to make wealthy rso the airport. details coming up. obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

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white house kevin hastert weighed in on the growth outlook for the year ahead. >> i know there's disappointing numbers in december and the retail sales disappointing but smoothing through the ps aups a downs we say another 3% year and we started the year with a 300 jobs number and almost -- most quarter that is start with a 300 jobs number in the first month have growth north of 3%. >> joining us now is david stockman, former director of the office of management and budget under president ronald reagan and the author of "peak trump: the undrainable swamp and the

fantasy of maga. i take it you don't agree with the assessment of the economy. >> he predicted dow 36,000 and we are still waiting 19 years later. the point is trump has got the worst witch's brew of economic policy ever presented since i've been following this since 1970 we have got a trade war on consumers. that's not going to help we have a border war on immigrant labor that we need we have a political war on the fed that's finally belatedly trying to normalize interest rates and shrink the balance sheet and we literally have a war on the solvency of the country. we inherited a $700 billion definite in year ten of a recovery already long in the tooth added 500 billion from tax cuts, putting 100 billion more into the swamp of waste in the p&g, paying for it by adding 60

billion domestically to buy off the democrats. this is insane this policy will bring down the economy which is already on its last leg. >> but, david, you can't say that with certainty today. maybe in hindsight in two or three years you will be able to but so far those tactics are working. the economy has grown faster than people expected when he took office. >> that's not true that's spin. that's cherry picking the data if you look at the first 25 months under trump, average job creation 205,000 a month take the last 25 months under obama, average job creation 213,000. >> that's not what i'm saying. >> there's no acceleration. >> i said it's faster at this stage of a long economic cycle than people had been predicted when he took office. not comparing -- >> doesn't matter what they have been predicting. >> there's improvements. wage growth 3%. >> we had one quarter of 4% mainly on the back of pull

forward of exports because of the trade war looming and because consumers drew down their savings rate because they got a tax cut but here are the facts. if you take the first nine quarters including q1 based on what the new york fed predicts for gdp for q1 average real final sales in nine quarters under trump will be 2.52%. in the last nine quarters of obama, it was 2.50 nothing is happening except the cycle is getting older and older an we're now three months from the record in history that came from the 1990s when there were a lot of headwinds and no tailwinds, when you didn't have europe falling apart, when you didn't have 40 trillion of debt in china and, you know, the red -- >> but to put the comparison with president obama aside, growth has been higher than people forecasted at the point he took office the only thing i think you can say with certainty now is he hasn't collapsed the economy maybe it will. >> it is coming. >> so but you can't say that for

certainty. >> you can. >> you can't how? how with certainty >> you have been on this show and other shows before warning of financial collapse. >> wait a minute. >> we haven't seen it. >> okay. you can say it with certainty because no one is outlawed recessions we are at the 116-month segment or point of this cycle, a recession will happen five months or ten or 20 months down the road and when you have a 1.1 trillion deficit on the eve of a recession at the top of the cycle you're going to have a $2 trillion deficit when the revenue collapses. now, the only thing you're saying and i have to just say this point about the fantasyland here in the stock market is to escape a recession for years and years and years and keep adding to this debt and the fed is going to normalize interest rates and shrink their balance sheet and nothing bad will happen that's delusional. the only people who are as delusional of trump i think are

the people down on the stock market. >> what about larry kudlow you hired him. >> back then he was sound. he believed in sound money and balanced budgets today he wants the fed to print money and -- >> i don't think anyone here is saying that we think there never be a recession again and can't say that will happen immediately. separately -- separately - >> i think you can say that if you're going to put huge inflationary forces in the economy at this late stage of the cycle and taxing 250 billion from china at 12% if you put a 25% tariff on cars which have absolutely nothing to do with national defense if you're going to borrow -- wait a minute -- borrow the money you are asking for a collision. i don't know what day or month it's going to occur but the policy is guaranteed to produce a blow-up. >> very quickly because we are out of time. on the flip side, 70% top income rate tax or big wealth tax srks that the way to balance the

budget >> of course not the way to balance the budget to drain the swamp at the p&g and cut 200 billion or 300 billion out of the p&g, take the wealthy people off social security and medicare and stop all this wasteful domestic spending that's what you should do. trump wants to do none of it the house republicans don't care the democrats want to spend more the fact of life is that we're going into the 2020s with a baby boom retiring 10,000 a day and the social security, medicare exploding and everybody in washington is sitting there whistling pastthe graveyard. >> you have to come on with good predictions sometime i feel like there's a lot of armageddon and carnage coming from your mouth, david thank you very much. >> thank you. still ahead, index funds the dominant force in investing and new concerns about transparency and accountable. we'll discuss coming up.

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an op-ed in yesterday's "the new york times" called for

lawmakers to take a more active role in overseeing index funds because of concerns about transparency cnbc's leslie picker has more on the story. is this a growing worry, leslie? >> it's a growing worry and growing trending the term is synonymous for passive investing. for very little cost investors can put their money in funds that track a market. but they take aim saying there's a lot of discretion as to what's added in some of these funds it's reason by a law professor, steven davidoff solomon and robert jackson customizable indexes don't track the index like the s&p but give them more of a say of what is added. more and more asset managers are creating their own indexes. they don't need to pay licensing funds that way and they're

adding back in an element of stock selection into the process. the basis of an index funding is not to have active management so this runs counter to that. the op-ed says it's possible that many investors don't actually realize they're getting special indexes. the two point out of the need for additional transparency and oversight, guys. >> leslie, thank you very much for that now, partners in the sky the fight for high flyers as american airlines teaming up with transportation disruptor blade. we'll have the details for you, we'll have the details for you, next it's a responsibility. emerson. consider it solved. ♪ don't fence me in. plan utlezs ♪ let me be by myself ♪ in the evenin' breeze, ♪ listen to the murmur of the tall concrete, ♪

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. welcome back american airlines teaming up with helicopter company blade. robert frank is here with all the details. >> american airlines this morning announcing a deal to improve one of the worst parts of flying, getting to the airport. now, in new york and los angeles, american is teaming up with blade to helicopter customers to the airport they will then get driven to first-class check-in after getting expedited at security, they can hang out at the american club lounge they will run three choppers and it takes five minutes.

out of l.a.x. it will fly from next to the staples center in downtown l.a the blade trip per person is $195 if you buy a single seat or if you charter a whole helicopter for six people that's between $695 and $1350 the american airline service is an additional $350 for the first passenger and $100 for each add-on so the blade flight and the vip american service will total $545 if you're flying alone but of course it could change a lot if you have more people on the chopper and more people in the program. >> the first price sounded pretty cheap my question, because there used to be a partnership with delta has this moved to american airlines because they poached it or delta dropped it? >> i think it was more they poached it and they saw an opportunity to integrate it into americans' marketing plan. a lot of blade's customers and founders are l.a >> i wondering if corporations

could pay for that if you could expense that $200 to the airport? >> a black car is not that much less for a single person so i think that's where they were aiming to get it right around the black car right. >> from laguardia to here is about $55 so it is more. >> but five minutes compared to about an hour is a good time savings. >> we're out of time ro robert, great to see you. "fast money" starts right now. live from the nasdaq market site overlooking new york citiest times square, i'm melissa lee. tonight on "fast," wall street is waiting with bated breath as a trade deal deadline approaches one top strategist says a deal could unleash a major rally in the markets. she will explain. plus, it's no paradise uk lawmakers calling facebook a digital gangster maybe it's all about the benjamins because the stock is still soaring. first, we start off with