other protected categories why is this a big deal this is what facebook different yates itself by to advertisers the micro targeting. reining this could be a headwind longer term. >> thank you for watching "power lunch. >> "closing bell" starts right now. it is the final hour of trade. the fight between elon musk and the s.e.c. is far from over. fed-ex is about to report the first quarterly numbers of year and as dsw shares sank, the ceo joins us for his first interview ever on cnbc "closing bell" starts right now. ♪ welcome to the "closing bell." i'm wilfred frost alongside sara eisen. take a look at the markets less than an hour left of trade. slipping a bit but still in the

green. we are up 33 points on the dow the high was close to 200 points but we have been green throughout the session the s&p's up 0.2%. the nasdaq a little higher up 0.4. health care the top performing sector. as president trump wraps up a news conference with the president of brazil, we'll talk to mark mobius. first eamon javers at the white house with the highlights of the news conference eamon? >> reporter: that's right. it was supposed to be about brazil and the u.s. relationship and a most interesting comment of the president when he was asked whether or not social media companies should be liable for the content on their platforms. here's how the president answered that question. >> things are happening, names are taken off, people aren't getting through. you have heard is same complaints it seems to be if they're conservative, republicans, a certain group there's

discrimination and big discrimination something's happening with those groups of folks that are running facebook and google and twitter. and i do think we have to get to the bottom of it. >> reporter: so the president there accusing the big social media companies of bias against conservatives saying he can see it in the millions of followers on twitter which is the platform he's most attuned to interestingly, guys, officials gave a suggestion yesterday that there would be some trade and agricultural announcements here. what they called deliverables in the follow-up to the meeting and i talked to sarah huckabee sanders and she said there's no announcements yet. but nothing yet. between the united states and brazil's been in terms of ink on paper in terms of new deals so that's something that looks like will not happen today, guys. >> there's a headline, trump administration official says lighthizer and mnuchin plan to travel to china next week for more trade talks maybe they could give investors

something to get excited about in the wake of some sort of mixed signals of that deal. >> reporter: lighthizer was in the rose garden right in front of the president in the event today. he's somebody who gets a lot of face time with this president, obviously in communication with him on a regularly basis the president was asked just as he was walking away at the end of the rose garden presser asked how the negotiations with the chinese was going and he would say only that the negotiations are going well and didn't offer a lot of detail, though, in terms of what that means and that staff to staff interaction, we don't have any sense now as to when exactly the president's going to sit down with xi jinping and said in the past he feels the deal can't be done until he and xi jinping sit face to face in a room and hammer out the final negotiations. >> thank you very much. >> reporter: you bet. now brazil's stock market on a tear the brazilian bovespa up 14% this year. up some 35% since june last

year joining us is mark mobius, founding partner of mobius capital partners thank you for joining us. >> thank you >> let's start with brazil as we just mentioned on a great run of late is that run justified? >> definitely. we used to say that brazil has a great future and always will and disappointed in the past but i think in this case there's real changes because the scandal that encompassed all of brazil is really something of breaking point and a change and the reason why he's elected now is because people want change and they want reform so it's very good news. >> to what extent is the bull case reliant on the broader dollar and the broader oil price environment? >> not so much for brazil. brazil as you know has oil and

higher the price of oil brazil makes a heck of a lot of money the offshore deep oil and sometimes difficult to get to but generally speaking not a big factor i think the big factor for brazil is agriculture. soybean prices, the prices of various other agricultural commodities and iron ore which is a big export for them. >> generally, mark, we are in a pretty good spot for emerging markets after a rough patch last year will that continue, this better environment? >> i think so because if we assume that the china and the u.s. will reach an agreement which i think will happen the chinese market will recover, do better already we have seen some signs of that. india, of course, is forging ahead in incredible growth brazil now in good shape and the question mark now among the brix is russia and i believe hopefully after the reports of trump and the election, maybe

relations with russia can get better. >> what about china itself mark, and what extent is the outlook for the economy reliant on trade deal with their own stimulus >> well, i think it's very good point you make and more interest domestic factors, domestic spending as you know, china's going through a transition from an export-led economy to a consumer-led economy like the u.s. i think they're getting there slowly but surely and if there's a trade deal done then confidence returns and it is all about consumer confidence. right now people are sort of holding back in china and i think where the trade deal confidence will return. >> sounds like you're bullish on a lot of these markets where do the valuations look cheapest right now

>> right now, i would say india is in good shape india looks good because it's not a matter of, you know, historical valuations but the growth rate we are seeing in india. and of course, china many chinese stocks, particularly in the medium and small size companies you know, a lot of big companies have been dragged up because of the index changes. but through a lot of medium-sized companies that look very attractive and where we are looking. >> mark, you made the comment recently you think brex sit is big opportunity. is that for the uk itself? >> it's really emerging markets to make deals with the uk. if the uk makes a clean break with the eu. then there's going to be opportunities. we must remember the uk with all the former colonies around the world have very close connections with the commonwealth countries sort to speak and could be bullish for

the countries, particularly like india and so forth kenya. nigeria. et cetera. >> i mean, what would a mishap regarding brexit which is far from a done deal mean for the rest of the world? >> not good. it's -- you know, it is not good for the uk it is not good for europe. we have a choice really, a sort of muddle through which is not good. or, a clean break which would be generally good if it was done very cleanly or no exit from europe which in my view is the best choice because then you will see a growing europe and that's good for the whole world. must remember, after the u.s. it is europe. that's really the big driver for the global economy at least up to now and then of course china and india catching up. but we have to look to europe to push the global economy along with the u.s >> mark, more broadly, just on

equities globally and the long bull market we have had, does the length of the bull market itself make you concerned as to whether we're due a pullback or not? >> well, you know, i was worried about the u.s. until we've seen this big correction. must remember we have gone through a significant correction in the u.s. and that's very b l bullish in my view with the correction now we're back on track. so i think the u.s. economy and the u.s. market will continue to be doing very well and that's good for the rest of the world because there will be more and more people with money put in emerging markets. so i think -- generally speaking, we are in good shape now. >> as it relates to the u.s., mark, i remember i think you were in town last year and you were relatively optimistic about president trump's policies the tax reform, the deregulation, the trade negotiations and sort of updating trade deals do you think there's more juice

there in terms of the economic growth and the market benefit of the trump trade? >> i do. i think there -- i am sensing a change in attitude towards trump. i believe now people are beginning to think well maybe he's doing the right thing and maybe he's moderating a lot of his policies, more palatable to the democratic side. last year i was worried about the long bull market in the u.s. i think it had gone on too long but now that we have seen the correction i'm more confident. >> what do you mean you think people are changing the attitude about president trump? and what sort of policy expectations do you have heading into the 2020 election >> i expect him to do more in terms of aiding business and giving business more room to expand and that could be a number of regulatory changes that he can

put in place as president. he doesn't need congress to do that so in that sense, we'll probably see more measures that support business and support job growth. that's the key and of course, must remember the negotiations with china are very much related to this the degree to which he can bring china to the table to allow companies to expand in china and also have chinese expand into the u.s. don't forget the chinese could create a lot of jobs by investing in the u.s i think that's going to be part of the program >> mark, thank you >> thank you we've got a news alert on boeing phil lebeau with the details. >> this is formal confirmation of what we reported and others reported yesterday that the department of transportation would be looking into the certification process of the boeing 737 max well, now, it is official. the department of transportation secretary elaine chao asked the

inspector general of department of transportation to do an audit of the certification process for the 737 airplane, the max 8, in sesks. what they're looking for is how did this process develop so this is going to be a probe from the department of transportation looking at the process and specifically i would imagine they're going to be looking at the question whether or not as the faa was going through the process, guys, and had boeing doing self-certification and say, okay, this is how we believe this part will work or certain process will work with this aircraft and then report back to the faa, how was that work divied up and was the faa perhaps not stringent enough on bioing that's an idea or suggestions that has been floating around since the crash of the two boeing 737 max airplanes guys, back to you. >> phil, thank you very much for that update. we have also got a market flash

on altria. >> hi there, wilf. the shares right now are moving lower upon a couple of headlines. one that san francisco officials have proposed legislation today that would ban the sale of e-cigarettes in the city and e-cigarette companies from having a city building and they say they encourage the san francisco to severely restrict youth access also, another headline, fda commissioner gottlieb was speaking at a brookings event earlier and said he met with altria which has an investment in jewel, as well juule and called the meetings difficult. again, speaking at a brookings event. altria shares lower almost 2%. back to you guys. >> thank you. shares of dws are getting crushed today after reporting this morning

talking the investors today. we'll get reaction from the ceo in the first-ever interview on cnbc next. yesterday, former minnesota fed president urged the fed to cut rates. >> i don't anticipate the fed will cut rates but i think they should cut rates >> former fed gor nor sarah good morning raskin will weigh in on the path she thinks the fed needs to take. ng every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential. the global investment management you should be mad at airports.

excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.

♪ whatever it takes welcome back to the "closing bell." we are only higher by a point or two on the dow we have lost the gains which were as much as 200 points earlier in the session there's the winners. health care very much the outperforming sector walgreens up 1.5% tops the list. dsw shares crushed today after missing earnings estimates. the stock down 13% also effective, changing to designer brands and will change the ticker symbol to dbi effective april 2nd. ceo roger rollins is here exclusively at post nine

first time on cnbc welcome. >> thank you verying if me. >> what do you think investors are so disappointed? >> i think our fourth quarter results which included a significant charge for the closure of the town banner that we operated up in canada i don't think that was embedded in what the street was expecting and really i think the difference. >> how's business overall? >> our business is strong. we had one of the best years we have had in the history of the company. delivered a 6% comp within the core dsw business, and really excited about the growth of the business and where we have been over the last 12 months. >> did the cold weather give undue boost to the end of the year and start of this year? >> we love it when it snows in that time period it's interesting, though this time period isn't our holiday season really we call it septober because that's when people run out and buy boots or march and april when they go out and when

that weather turns 70 degrees for the first time and buy sandals. >> i think of retail and off price is typically a pretty hot area your stock is flat over the last year do you consider yourself in that off price sweet spot >> not really. when you look at what we offer, yes, there's some closeout kind of opportunities but in's really not our core business. it is every day value on branded goods that you would find. >> what's the reason behind the name change? >> great question. so we have 50 years of history of being dsw and the business evolved now. and we acquired the cummoto organization which is a sourcing organization and shoe company up in canada and much bigger than dsw. it is designer brands. great opportunity for growth. >> you carry all sorts of designers. who's doing the best >> i wish i could share that with you but i can't i would like to tell you that the cummoto brands are best?

>> heels, sandals? >> sandals. >> overall in the u.s., how would you gauge it >> i would say for us, again, looking at fourth quarter for us it's been a strong year. up 6%. we were up 5% in q4. for us it's a strong year. >> you have nail bars in your stores now >> yes, we do. >> i read. >> yes. >> driving autosorts of traffic. not me yet. >> we could do a mani pedi for you. >> what's the idea >> experiences to life in our brick and mortar locations which is what we're doing with our nail bar. >> to sara's point on the athletic related sales, a third of the sales, i mean, give us more than you have been so far which brands are doing better others is there competition there >> nike is the number one brand. adidas done well for us.

skechers did incredibly well for us, as well. >> you've also been expanding into the kids cat girl. >> we have huge opportunity to grow especially in the u.s., a very small portion of the business today and launched about two years ago. huge growth but also not just kids adult footwear, as well. >> you say the cold weather was helpful. what did you call this period? >> mar-pril. >> yes >> how's it kicked off >> love to coming back and share that after the first quarter results. >> are you as positive on the outlook for spending this year in 2019 as you saw last year >> yes absolutely yes. our business, again, we have momentum we talk a lot about now that we have momentum let's keep it going and been positive with the business. >> what about store closures >> we have not had any issues. actually, it's in our portfolio. only five. >> a theme in retail. >> only five of the warehouses that do not generate positive cash flow which is sort of unheard of i think in the

industry. >> roger, thank you for joining us. >> thank you for having me. now the war of words between elon musk and the s.e.c. hitting new levels. peloton may have hit a speed bump music publishers suing the company for songs by lady gaga, drake, the person spearheading the lawsuit will join us first here on cnbc in't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) it's time to get yours! (vo) quickbooks. backing you.

♪ 36 minutes before the bell and the dow is under just a little selling pressure down 36. s&p also turning negative. nasdaq remains positive but just barely see where we close russell 2000 small cap has been an underperformer. fedex is trading higher. we will have the numbers and analysis coming up. first, former fed governor sarah bloom raskin othe f fed's next move. that's here next on "closing bell." they have the investment expertise to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at therightquestion.org

a cfp professional is trained, knowledgeable, and committed to financial planning in your best interest. find your certified financial planner™ professional at letsmakeaplan.org. find yodoes your wealthancial a cfa charterholder does.l they have the investment expertise you need for the ambitions you have for your wealth.

learn what a cfa charterholder can do for you, at therightquestion.org

♪ weome back to the "closing bell." we are at the session lows or thereabouts at least that means a decline of 36 on the dow or 0.1%. similar decline for the nasdaq there are the sectors on the s&p, utilities the clear laggard gown 1.5%. health care remains the top performing sector. >> catalyst of trade headlines pouring some cold water on the progress with china and marching in place ahead of the fed

meeting out tomorrow >> decent start as well to the week yesterday after a bit of gains last week. time for a news update with sue herera. >> hi, guys. world aid organizations sayfullo saipov clone idai might be one of the worst weather related disasters to hit the southern hemisphere hundreds are dead in mozambique, and malawi. >> it's a mastive disaster hundreds of thousandsings in the millions of people potentially affected we need all the logistical support that we can get. we need to have proper assessments of what is needed as we have heard it is by air we can reach people and it is by water, as well. the illinois supreme court has let stand a less than seven-year prison sentence for jason vandyke convicted of killing laquon mcdonald. his lawyer says that he is

pleased wi the decision. and the woman who illegally climbed the base of the statue of liberty was sentenced today patricia okoumou add her face and mouth taped up and rournded by supporters and got five years of probation and community service of 200 hours that is news update this hour, guys you are up to date i'll see you next hour. >> sue, thank you for that see you then. two-fed meeting in d.c. today with the fed expected to leave rates unchanged and lower the interest rate. kocherlakota appeared yesterday and said the fed considered cutting rate this is year. >> i actually don't necessarily anticipate that the fed will cut rates but i do think they should cut rates. and i think the reason for what is that whereas my baseline outlook is quite positive, i think we'll see growth in 2019,

slow growth. but the downside risks are out there. >> joining us now to discuss more on this sarah bloom raskin. good afternoon to you, sarah. >> good afternoon. >> what's your take whether that is likely, that the next cut could be lower but unlikely this week >> right i think that's right it is unlikely to be this week certainly markets are not expecting the fed to do much tomorrow except, of course, signaling and that's what we really need to take a close look at what is in that statement and what chairman powell says. at the press conference. i think there are probably three things to be watching for in that statement one obviously the question being are interest rates going to -- are they signaling a hike? are they signaling a reduction

or are they signaling that they are going to be staying where they are for the indeterminate future clearly the signals on where interest rates are heading is something to watch for something else to watch for, less so in the statement and more in the press conference, will be the fmoc's plans for the balance sheet. you'll recall that there has been a sense of market uncertainty about where the balance sheet is heading, what the pace is in terms of bringing about a more normalization of the balance sheet so i think that's a second thing to be watching for tomorrow. and the third piece i think that is more of a long-term nature is, you know, if we have a slowdown, if we have a downturn, how long is it going to last are the tools in place to deal

with -- to make sure that any kind of downturn is short lived? that's i think another important piece. certainly, as we head towards slower growth as the possibility of a slowdown becomes more real what's the state of the fed's tools in terms of making sure that we have a downturn that is a v-shaped one rather than a longer term l-shaped one those would be three things to be looking for. >> how much worse do you think the economic joutd looutlook hat before they are seriously considering cutting interest rates? >> that's a great question, and i think it's going to depend, sara, on what indicators are coming in. i think right now they do have their eye on certain -- certain measures that are probably less

than optimal they are wanting to make sure that they don't -- things don't deteriorate further. they have the headwinds and in the midst of a trade war and the tariff issues very much on policymakers' minds. are the tariff issues getting resolved any time soon we have already had a postponement from march into possibly april and even april isn't looking like we're going to necessarily have an end to the issues on tariffs and there's also, you know, there's also a headwind coming from lower global demand. right? so it is not -- it is not great when you have lower demand for u.s. goods and services coming from other countries which are also experiencing a slowdown so i think the fed, the fmoc, keeping the eyes on what's happening worldwide, as well >> sarah, when we consider the yield curve, the 10-year up to

3.2% or thereabouts, now back at 2.6%, do you think 3.2% will be the peak for the cycle >> hard to know. hard to know, indeed we are living through really volatile times and one of the features i think that we have seen since the end of december has been this notion that predictability is not one not that's the nature of the environment right now. there's quite a bit of unpredictability i think volatility in all measures is going to be something that we are going to continue to see. >> so, i mean, the talk now is that this fed is market dependent, that powell got some religion and realized that he was too hawkish after, you know, the november meeting and stopped talking about rate hikes started talking about patience stopped talking about autopilot and talking about flexibility.

i'm wondering how market dependent they are if you were a governor on the board, would you hike interest rates if the outlook warranted and the market was pricing in none as it is? >> yeah. it's a great question because, obviously, the fed's tools work through markets. right? so their tools are interest rates and the size of the balance sheet and those are tools that work through markets. and yet, you have to remember that it isn't market dependency that the fed is supposed to be focused on they're supposed to be focused on the real economy and in particular two mandates, one having to do with maximum employment and the other having to do with price stability so they have to be looking through markets and looking to the -- what's called the real economy in terms of making decisions so i think that market dependency certainly dependency at the cost of looking through to the real

economy is not a good posture to be in. and, you know, unfortunately, i think this president has pushed a little bit on making the fed seem to want to yield to a notion of market dependency and that has to be watched >> fed eons dependent on the markets. markets dependent on the fed sarah, thank you. >> there you go. thank you. we have a news alert from the white house on trade eamon javers with the news >> reporter: that's right. we were told by the white house there wouldn't be a trade agreement announced today but they announced trade agreements. this relates to the visit of the president of brazil to the white house. the white house putting out a statement saying that there are a couple of trade deals in the farm and agricultural space to matter to markets. one is that the brazilians announcing to implement a tariff rate quota allowing for importation of 750,000 tons of

american wheat at a zero rate and work on the resumption of brazil's beef exports and the u.s.d.a. to make a visit to brazil to audit the beef inspection and then finally they're going to tell the teams, the two presidents, tell the teams the negotiate a mutual recognition agreement with the trusted trader programs and the white house says to lower costs for american and brazilian companies so there are some trade items negotiated and agreed to here at the white house and told that the brazilian president is about to hold a press conference of his own over at blair house just across the street from the white house and will monitor that, as well >> thank you very much. shares of tesla falling this year as musk's battle with the s.e.c. rages on. we have the latest next. and peloton slapped with a $150 million lawsuit over copyright infringement we'll talk to the man directing the case goens the compaagainst

first on cnbc coming up.

see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? 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 ♪ welcome back to "closing bell." you are looking at session lows right now for the major averages dow down more than 83. for a change, actually not

boeing's fault it's names like disney, travelers, verizon, apple, american express weighing on the dow. really just seeing stock weakness pick up steam into the close here as far as the s&p 500, groups that are positive, health care and consumer discretionary, everybody else red wilfred, it does come off of a multiday win streak for the major averages. >> week to date gains following yesterday. the s.e.c. doubling down on the criticism of tesla's musk saying he never sought preapproval for the tweets phil lebeau has more hi, phil. >> this is playing out over three weeks and it's unclear when it will be wrapped up of musk to be in contempt of court. the s.e.c. did file a response to the briefing that elon musk's attorneys filed last week saying this is almost a violation of the free speech or it is, overreach. they say that his defense is

really ridiculous in their pop or borders on the edge of ridiculous calling his preapproval or not seeking preapproval being a primary problem. in fact, the s.e.c. in the filing said musk has not sought preapproval for a single one of the numerous tweets of tesla published in the months since the pre-approval policy went into effect. the policy of late last year after the s.e.c. took elon musk to task over the go public at 420 or go private at 420 tweet so for all of this, it brings up the question -- what impact has it had on tesla? we have noticed it in terms of the shares meanwhile, you have tesla announcing that they're delaying the price increase on vehicles by 24 hours and in other words not going do go into effect for another 24 hours because of the extreme demand that they have seen for the rush of orders before the price increase took effect so as a result they put that out there today you've seen a fair amount of

social media activity and they report the q1 deliveries next week so as you take a look at shares of tesla, here's the deliveries, expected to report around 79,000. taking a look at shares of tesla, down back down around the 265 and close to 260 an below range and they haven't tested that since the fall of last year again, we do not know when the judge will make a decision about what happens with this case and the s.e.c. wants musk held in contempt of court. >> what happens, phil, if he is held in contempt of court? what's the punishment? could the s.e.c. go after his job as ceo >> well, the s.e.c. could. look it is up to the discretion of the judge. now, the judge could say, you know what? he was in violation of the agreement. here's a fine. don't do it again. >> they already do that. >> well, they could do that again. this is at the discretion of the judge, sara. the judge could say we think you should have a special master on the board of tesla or you should

not be ceo there is a wide range of things to impose and no doubt depending on how severe is penalty is the judge rules against elon musk the attorneys likely appeal that decision by the judge so it's not clear cut in terms of what the ultimate decision not only will be and the punishment could be it's a wide range. >> all right phil, thank you. >> you bet. up next, citigroup's chief strategist tells us where he is finding opportunity in this market and later, former chair sheila bair will be here with a plan to tackle america's student loan crisis and why colleges should take an equity stake in a student's future success. tomorrow ceo jamie dimon on "the exchange" with president and former obama health and budget official silver matthews. they'll be talking work force development, amazon's hq2, the state of the economy much, much more. don't miss that.

1:30 tomorrow. we've done it! hah! great work old chap. we'll be rich and famous. well i'll be rich, you'll be famous... at least amongst your digging friends. here's a thought, ever consider investing? e*trade has easy to use tools that help you get started. you like playing with tools don't you? 'course you do. ♪ don't get mad. start investing with e*trade. is it to carry cargo... greatness of an suv? or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground?

this is the mercedes-benz suv family. greatness comes in many forms. lease the glc 300 for just $479 a month at the mercedes-benz spring event. going on now. mercedes-benz. the best or nothing.

12 minutes left in today's session. all the major averages turned

lower. joining us, steven whiting from citi private bank and rick santelli, as always. are we taking a pause on a strong run so far in 2019? >> i think that rallying very hard into the fed given the uncertainty of the guidance tomorrow might be an issue we have pretty much come full circle, especially on u.s. equities we are 100 points higher last year and several different policy concerns probably diminished and i think we'll make new highs and need some time, the fed's help and earnings. >> stephen, is it hard for the fed tomorrow to do more than they have done already >> i think it is again, there's a fine thread here of restoring confidence, holding it up and saying, hey, we need to be on a different course you know if you looked at september of the last year pricing at that time including december, four rate hikes and open ended quantitative tightening and

inconsistent with us continuing this domestic expansion. after all, we had a year of falling housing activity not by much and to say that international economies were the principle threat to the economic outlook when the most domestic sector showing restraint i think shows a problem in fed policy and the way we were positioned last year. >> does the market need the fed's help, rick >> well, i just think it's a bit of a fed drift i think we are drifting. it's a fed meeting i don't see we get anything more than details there's issues of dates, composition. that over time we'll be becoming more aware of and i think investors and jay powell for the most part understand where each other are at with respect to investors looking at certain fundamentals and trying to gauge, you know, the global economy versus domestic economy and the spread of growth and quite pleased right now to monitor and not rock the boat much i think that the issue today the

markets don't bother me at all anybody who's worked on anything automotive, sometimes one little wire makes everything run so poorly coming to the domestic economy especially, it is more that scenario than lots of things, many analysts are saying is wrong, this isn't as good. granted. but sometimes just to smooth it out to get more efficiency, the tweaks don't have to be large and trade issues can be the tweaks and the headlines weighing in on the very fragile market today as it gets ready for the conference tomorrow. >> am i right to say take from the first answer you wouldn't deploy cash in the u.s. equities at this moment the. >> we are neutral at this moment we were underweight for the fourth quarter and raised it redeployed took a bit from europe and where i think we have opportunity, again, doesn't have to be immediately, is that the growth outlook between the united states and the world is about the same

the earnings outlook is a lot closer after a year of tax cuts boost u.s. earnings and u.s. economic growth and more comparable taking a look at u.s. dollars, nonu.s. equity 13 basis points behind the united states and very similar muted but positive eps outlook. >> most people would say global growth looks worse than u.s. growth. >> i think you will see those expectations changing. just consider jay powell at his congressional testimony said we had 304,000 jobs created in the month of january this was sort of indicative of how we came into the year. one week later, we showed 20,000 new jobs now, neither of those is exactly the right reading but i think you do need the fed's tightening out of the picture to get us in the middle of that range again, last year was extraordinary with tax cuts. we had chinese monetary policy tightening in 2017, hard coming into 2018

now they spent most of the year stopping and reversing those policies we have had horrible outcomes in europe compared to a year ago. i don't think we repeat the outcomes and not a robust global outlook but if we're not having trade and monetary policy friction i think the world can stabilize at a slower growth rate. >> do you agree that the outlook for the world is matched for the u.s. with the year ahead >> i think that the rest of the world will turn when the u.s. market turns stronger and the economy turns stronger, probably after a trade agreement and i think more the u.s. leading the way than us keeping up with the rising europe. you know tha they have issues with trade and structural issues, germany, france, that they have let fester and i think the issues aren't fixed overnight, trade deal or not. >> gents, thank you both very much. we have a news alert on bick big tech companies called to

capitol hill sue herera with the details for us >> indeed i do the chairman of the homeland security committee in the house is invitding mark zuckerberg, susan of youtube, jack dorsey of twitter and sat yeah of microsoft to testify in front of the committee next week. about their response to the terrorism incident in christchurch, new zealand and what the committee chairman says i must emphasize how important it is for you to prioritize the removal of this sort of sensitive, violent content studies have shown that mass killings inspire copycats. you must do everything within your power to ensure that the notoriety garnered by a viral video on your platforms does not inspire the next act of violence we do not have a response from any of those asked to come to capitol hill we'll keep you posted on that but the hearings are set for

next week. back to you. >> sue, thank you. more news out of washington now. president trump no, ma'am natding a new head of the faa. interesting timing phil lebeau with the details phil >> not entirely surprising we have not seen the formal nomination but there are reports out of washington that the white house will be nominating steve dickson, a former pilot for delta air lines, rated on five different types of aircraft as a pilot as well as a senior flight operations executive at delta. he will be nominated to become the permanent head of the faa. this nomination by did way, guys, while i know a lot of people say, well, look, immediately after the questions of the 737 max, it's been si circulating around washington to likely be nominated to that position, perhaps moved up a bit with the turmoil we have seen at the faa. dan elwell the current acting head of the faa moved up from deputy to running the faa.

obviously, he will not be in that position once steve dickson moves in i have talked with a few people in the airline industry and they've all said at the same thing. steve dickson is highlighted respected. graduated number one from his class at the air force academy he is somebody to come into the job with a lot of credentials an respect within the airline community. guys, back to you. >> phil, thanks very much. look forward to discussing it in more detail coming up but we'll go to break. the close is four minutes away (vo) we're carvana,

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.

you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean.

don't get mad. get e*trade's simplified technical analysis. welcome back to the "closing bell." one minute left of trade s&p intraday, in the red final hour of trade. recovering back up just below flat. four indices for you, the russell is the laggard the dow just in the red. the high was up 200 points the low down 100 points so again a little bit of red towards the end of the session and recovering a little bit into the close. health care top, consumer discretionary up there bob? >> rumors of trade talk tension took the air out of the market

i don't think a long-term problem. weakness in the banks middle of the day. transports weak. some of the carriers like j.b. hunt watch fedex. earnings after the bell. >> we will have those results. expected in about ten minute's time ringing the bell jpmorgan at the big board for women's history month. at the close, s&p's just in the green up 2 basis points. dow just in the red down 5 basis points that does it for the first hour of the "closing bell." sara, back to you. ♪ well, a rallying action in the final seconds there. welcome to "closing bell." i'm sara eisen wilfred frost will rejoin me and mike santoli, senior markets commentator. it looked like the rally would stall out for much of the and

the dow climbed back settling lower 17 points and boeing was higher, not a drag on the dow for a change lately. s&p 500 as wilfred noted barely positive pretty much closing the day flat weighed lower by utilities, financials and industrials and nasdaq finishing up about.1% today. coming up on the ceo of national music publishers association laying out the lawsuit of exercise bike company peloton for using music without permission here's the stories on the radar. fund managers cutting the equity exposure to the lowest level of two years. mack mobius said here u.s. markets are back on track and netflix said it won't join apple's tv service

joining is alicia levine nice to see you nice to see you. >> first, though, mike, there were some trade headlines but overall it feels like it's a waiting for the fed. >> yes i think the market often doesn't want to be kind of caught leaning too far one direction going into a fed meeting day you know at the morning highs the s&p up 4% in 7 trading day and means we were running hot some of the indicators saying people all in on the rally so i don't think it's surprising to soften up. not much going on below the surface. aside from weakness in the transport and the russell 2000, some of those cyclical risk appetite plays fatigue and i don't think it's much more than getting flat ahead of a fed meeting. >> do you agree? it hard for the fed to deliver much more? >> we think we know that the fed is going to do and lower the number or rate hikes for this year we think probably at one for this year, not going straight to zero on the dot plots.

we do think that growth will be slightly shaved tomorrow just because the first quarter calling the kitchen sink quarter so weak and when you have a weak quarter it is hard to make it up in the rest of the year to get to 2.3 to 2.5 and then hear about the balance sheet and this is already expected and investors expect this. the one thing that might be really interesting is hearing about average inflation targeting which is a much more dovish stance for the fed. i think we'll hear about that in the months to come and any mention of this either in the press conference or in the statement this would be much more dovish. >> mike, we saw small caps underperform today largely the regional banks down 2.5% at the end of the session opposed to the sort of ups and downs of the broader market. >> part of it is they can't seem to put together strong days in a row. they're up against technical resistance people say they're still running up into a down trend line and

all the rest of it i did note that the kind of capital markets oriented banks outperforming the regional banks. seems like more of a trading deal activity type of a tape opposed to, you know, a strong loan growth type environment and maybe that's what it is. >> on the deal activity, bankers and companies themselves taking -- making the most of the market rebound. >> started to see an uptick in equity issuance last week. we had mergers listed, another one closing today or next day or so with disney and fox so it just sort of flushes the system with new cash one deal begets another and works until it doesn't and might be seeing an acceleration. >> the bank of america merrill lynch survey of investors with a total of $557 billion under management surveyed found they cut exposure to the lowest since

2016 and the most crowded traders shorting european stocks alicia, what's your take on that does that tally with what's going on at bmw mellon is cash high >> we see investors with high cash levels a then an example of why the market could move higher people were so negative at the end of the year and they're scary at the end of the year that people became defensive. >> why have they not become more positive >> people don't trust it the data has come in much worse than expected, particularly overseas data. and so, that is just very sobering and in addition, the recovery has been a v-shaped recover ri which con founds what we have seen historically. normally retracement and percentage points down on the way up and really very little entryway to get back in here as it's gone straight up and we expect, you know, 2800, 2850

range to bounce around a little bit. consolidate and ultimately this is -- this survey is pretty positive for equities and i'd say this, europe looks like it's starting to turn and the european markets, the european banks believe it or not the uk, wilf, looks like it's starting to turn because the question you have to ask yourself is, could there be more negative data we are not expecting and i think the ecb represented the worst to hear from what's happening in the real economy and where you find opportunity when things sound bad. >> european banks on the valuation points highlight the point you're trying to make. mike, in terms of u.s. equities, the level of cash and the sort of what you take from that as to bullishness? >> largely reflects what we have observed which is basically professional investors feeling under-invested, trying to put risk back on as the quarter comes to and

when we have seen this particular survey show these readings it didn't mean the market is about to take off to the upside and it's been a little more mixed than that. so i don't know that it's a bright flashing buy signal and reflects the fact that there's an overlay of caution. >> we have fedex numbers out hey, kate. >> hey there, wilf looks like a lower q3 than expected here. eps coming in at $3.03 adjusted. analysts looking for $3.11 revenues at $17.0 billion. the street looking for $17.67 billion. the company also issuing some full-year guidance that is a big weak and this is q3 and just one quarter left for the full year the company cfo saying slowing international macro conditions and trade growth trends continue as seen in the year over year decline in the fedex express international revenue and of

concern last quarter and the conference call at 5:30 eastern and the stock dropped in that call talking about some of the trends seeing both in the european business and then more broadly internationally and we'll monitor that and be back on with any headlines. you can see the stock down by nearly 3.5%, almost 4% back over to you. >> thank you very much more that don't miss the exclusive interview with fred smith tonight 6:00 p.m. on "mad money" and a shareholder and investor in the company joining us in a moment mike, clearly trade is a big factor for the company and seemingly from those brief comments from the cfo seems like that's led to this miss. >> trade and the european slowdown. has heavy exposure on the air freight side to europe the stock already such a bad performer. weak bounce off a depressed level and seeing the downside not exhausted at least in the

reflex reaction. looks extremely cheap and a trap because it looked cheap on the way down ten times earnings. >> not cheap enough. >> that's what i'm saying. but this bad a miss in a different type of a set-up you're down more so you have to be on alert for the fact that the stock down so much already and underperformed u.p.s. it is hard to see a sign of a turn in the numbers. november 30th this quarter was supposed to come in at 3.84. that's the estimates already slashed a lot and still come in under it. >> the first quote of fred smith third quarter results below expectations and we are focused on initiatives to improve our performance which sort of raises the question, alicia, you talk big picture, fedex always the economic bellwether.

>> i think it's confirming the data clearly back ward looking and the data we have seen since january 1st is that really global data's much worse. it's hard to call the bottom in the stock and not surprised to say they missed numbers and estimates. pretty lousy out there. >> let's bring in managing partner of bralton capital big slide. does that surprise you >> well, no. you know if you look right now at that's happening in europe and asia and the deceleration, contraction in air freight volumes, no surprise that fedex being the biggest air freight carrier is struggling to make results when number of things you need to do goes down and the amount you get paid and earned goes down, as well. >> what's your take as to the key factors behind this and

whether it's going to bounce back quickly clearly international macro conditions and weaker global trade has been cited the valuation this is at if they turn around a little bit, is this stock a buy >> oh, absolutely. absolutely but the big question is, will it trade tariffs, trade talks continue continue to put a damper on global commerce as it is obviously clearly doing. once that's gone and once that controversy resolved, then even at the lower numbers shares look very inexpensively valued but the bottom line is that not in the u.s. but certainly in europe and especially in asia we're seeing very significant decelerations in the amount of air freight to be moved. >> and i mean, you get the juicy quotes, mike, in the release of the fedex. the outlook, assume a moderate u.s. growth picture. no further weakening in international economic

conditions from the company's current forecast question is, are we going to get the same sort of message from the other global, industrial, you know, macro exposed companies? >> that is a way saying that the worst is at least known if not behind the company and not modeling foururther deteriorati >> why are they trailing performance in the market? >> i would in their defense jump in there if you go back 90 days when they made their release, they wer the first to come out and say, we may have a real problem here in europe and in asia but especially in europe and then it was after that everyone subsequently came out they were out there in front of the news so, as a result the stock suffered but the bottom line is that what they started talking about 90 days ago in their previous release is what now

everyone's come to realize is the truth. so, hopefully they continue to be out in front of it. the stock and the stock will reflect it as the volumes begin to improve. >> kate rogers is digging through this one kate has more on the outlook >> the full-year eps guidance is a bit weak and looking at q4 in particular, they're guiding with an implied range of $4.58 to $5.38. the estimates were calling for $5.39 so obviously the high-end of the range a penny below and in the mid range or the lower end of what i just told you could be bad and the stock down nearly 4.5% now. >> okay. kate, thank you very much for that clearly moments ago taking this as, oh, the past quarter spoke to your idea that the worst is out there in terms of international growth when you see guidance coming down, as well, a theme coming through a lot of companies earnings over the past quarter, does that not concern you?

>> it concerns me to the extent that we have not gotten a trade deal yet so one of our key risk factors for the market and the global economy is can there be a trade deal with some teeth that can get global trade flows going again and like to see it by june and getting that going by june you could have a second half much stronger and most companies bring numbers down enough so they can beat it ultimately at the end. i suspect that there's a little bit of gaming the system at this point because there are so many unknowns and what's happening with trade, when's happening with the deal, when's happening with cap-x and that related to the deal. >> shares continue to sink after hours down 4.5%. u.p.s. shares turned lower in sympathy down about 1.5%, mike we wonder if this is a trend this earnings season yes, we might have a kitchen sink quarter but what about the outlook? >> yeah. i mean, obviously, fedex is so close i guess the epicenter of what's not going right in the global economy that i don't know

if we want to extrapolate it and look at the market's behavior. whether's pulling the market higher nasdaq 100 type stocks, large cap growth, all of these names not dependent on the economy turning on a dime and getting better and a markets way of saying this is the world we thought we were in yes, hopefully, we inflect for the better relatively soon and right now we're just getting exposure to the big companies we think can do okay no matter what. >> what do you need to hear from the earnings call to keep you as a buyer of this stock? >> i think i need to hear continued explanation about how all of their initiatives adding a sixth day to ground, profit improvement plan, continued improvements in technology, how they're building the company to make money whether volumes are up or down and can't control the overall economy but they can control how well they do in it

so more explanation of how they're doing it and how well they're executing on their multiple initiatives. >> don, thank you. >> my pleasure as always. more on president trump reportingly nominated a new head of the faa let's get more context, phil, around this decision we have been talking about the faa a whole lot lately. >> yeah, we have sara, we have not seen the official nomination from the trump white house and expect it some point and there are reports out of washington that the white house will be nominating steve dickson, a former delta pilot and 27 years at delta and oversaw things like technical support, training, regulatory compliance that was towards the end of the career at delta. he's pilot rate on five aircrafts and familiar with compliance issues and also some of the concerns that airlines have had over the years coming to working with the faa.

he's taking over an agency if he is approved that has a world of problems, most notably is the inspector general doing an audit of the faa certification process for the 737 max so that is going to be front and center if he is approved to be the head of the faa. but separate from that, guys, this is an organization dealing with questions of handling safety as well as new aircraft certification. and that is front and center with the 737 max and it's also an agency that has limited resources and part of the issue with certification of new aircraft so again, steve dickson according to reports out of washington will be nominated as the new head of the faa. guys, i'm curious to see other moves from the trump administration relative to the department of transportation in terms of either adding more nominees in different positions or other types of shake-ups

within the department of transportation given everything that's been going on >> phil, any people suggesting that there's been a lack of clear leadership, a lack of top class personnel at the faa in recent months given the issues that have been arising. >> well, they have had a series of acting administrators that's part of the complaint you have not had a permanent faa chief who was nominated and then approved for five-year stent daniel elwell who was deputy administrator and then moved up to the top job in january of 2018 in that position, qula? a little over a year and now he's dealing with what's happened here at the boeing 737 max. you can bet, wilf, we are going do see more questions in the weeks to come about how the faa not only staffed but also run, especially given this inspector general report, this audit being done >> phil, thank you very much, as

always. back do the broader markets here alicia, your final take? if you're buying u.s. equities, which sector >> we like some cyclicals and health care and it's an interesting one because it's not participated in the rally this year in part because some of the political noise out of washington not just for drugs and bio tech on the pricing side but also on the services side because of medicare for all so we think the prices are underpriced and don't think we get rid of health care companies and so we it's an interesting place to invest right now. >> thank you for joining us. >> thank you. >> did well today. best performing group. up next, the outlook for the markets and how wall street is trying to close the gender gap we'll talk to head of global research joyce chang. peloton sued for music copyright infringement the ceo will join us later ,

how about letting your hair down a little? how about a car for people who don't play golf? hey mercedes! mix it up a little. how about something for a guy who doesn't want a corner office? hey mercedes, i don't even own a tie. do you think i need a mahogany dashboard? hey mercedes, can you make it a little cooler in here? [ a-class ] i am setting the temperature [ a-class ] to 68 degrees. we hear you. we made a car that does, too. the all-new a-class. all-new thinking starting at $32,500.

all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. day one of the fed meeting wrapping up right mow and investors watching the news conference tomorrow. there's growing number of experts no longer predicting

rate hikes in 2019 the market isn't predicting any, as well. that includes joyce chang of jpmorgan and one of the nyse bell ringers today and joins us in honor of women's history which we'll get to in a minute joyce, as far as the fed, there's so much expectation baked in for this pause that the fed is just done with the rate hike cycle from the markets s. there a possibility that the fed could surprise >> i think the fed is done for the year we think the fed could be on hold until late 2020 an i think you will hear more of what we have been hearing and seeing other central banks follow suit like the ecb announce policies a month earlier and took down the inflation and growth forecast and getting a message from the central bankers globally concerned of financial stability. emerging market central banks are giving the same message.

>> is that warranted by the fed as the ecb the ecb downgraded their growth and inflation outlooks the fed didn't have to do that. >> they haven't downgraded the growth outlooks but seeing some par decelebration of growth that's actually across the regions right now and i think it is patient, data dependent and, you know, there's been i think concern with the volatility we had in december on overall global financial stability conditions, as well. >> you know, when you mention financial stability that's the fed's euphemism for markets are too bubbly and when that's weren'ted a warranted and say we're concerned. it's the june meeting. the nasdaq at 8500 or something and unemployment down to 3.8% k. you paint a scenario where the markets and the u.s. economy perform well enough by the end of the year that this story flips again? >> certainly you can paint that story but you could also paint the story of greater market

volatility and what the market is debating right now. has the fed moved into risk management mode? are we seeing a deceleration than we thought? and the wait and see on trade tensions, as well. it is data dependent that's what we have seen and seen that right now the surprises on the downside more in the u.s. and elsewhere and europe has taken theirs down and a question on whether the ecb holds through 2020. >> isn't all this priced in? >> when we look at the u.s. equity markets are we are at 30% to 35% of the positions of the peak and still seeing relatively solid sector growth and seeing sectors that lagged an opportunities out there and you don't have the positioning of the end of 2018. >> on the topic of the u.s. china trade talks, what is the expectation both as to whether we get adeal soon and if it's

meaningful - >> the u.s. delegation is going back to china. chinese delegation should be coming in april and i think on certain trade issues that you will see some type of agreement come through in the april/may time frame and it is the nontrade issues. the question of whether this is more of a technology war than a trade war that will be unresolved and on specifically the issue of buying more u.s. goods by the chinese, i think progress is made there and the discussions have made some progress over the last few months. >> you are here with girls anchoring the closing bell and doing resedge lately on female representation on boards, in companies and in finance what's your bottom line? >> we are seeing two areas of progress slow but steady progress in achieving gender balance one is corporate board representation where the numbers are up to 22% of corporate boards have gender representation from women. also california's become the

first state to mandate this. we are seeing less progress in the c-suite. you look at the congress, though, you have a record number of women elected in the last elections so now 24% of the congress is female so there's slow but steady progress particularly on the boards and women in congress that i think is sort of a watershed year for women in 2018 after hillary clinton's loss you had many more women running for office than the case previously. >> looking at the report points out that europe is ahead of the curve compared to the u.s. on this what's that down to? are they a couple of years ahead? >> they have many more government mandates in place and it's been embedded in the guidelines so in the u.s. it's in many of the guidelines and not mandated by the government but we are seeing progress at the corporate board level, a level of awareness of shareholders, as well, where i think companies focused on the issue to a far greater extent.

>> progress is good. equality is better joyce, thank you. >> thank you. >> from jpmorgan. up next, the s&p 500 up 13% this year. we'll break down the charts to see whether the rally could be getting ahead of itself. it sounds like a santoli telestrator issue. lady gaga is one of the many artists played by peloton in the cycle workouts and the company allegedly not paid for her music and that of dozens of other artists. coming up, talking to the head of the national music publisher's association about a lawsuit he's ldi aineanggast peloton filed today. we'll discuss it coming up pch more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have.

put your employees on a path to financial wellness with prudential. bring your challenges. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory.

prevagen. healthier brain. better life. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs.

they all lead here. cme group - how the world advances. . keeping our eye on shares of fedex lower down more than 5% after reporting earnings moments ago and reporting an earnings and revenue miss and weaker than expected guidance for the year you cannot miss jim cramer's exclusive interview with fed smith tonight 6:00 p.m., the company talking about weakness from trade, global economy and how it has to do better. >> yes we look forward to that one. now the strong rally since the end of december is raising some red flags that the market could be overpriced. mike made the way to the telestrator and has more. >> this is really tracking just exactly how hot the market has been running lately. this is from fund strat and a technical look at the rally and going on underneath the surface. this is a momentum indicator for

the s&p 500 which essentially is what percentage of stocks in the s&p are in a weekly untrend. and what you see here is over 90%. it's a pretty rare signal. last time it happened was the strong rally off of the early 2016 february low and we have talked about a lot as analogous to the situation here. the market is overbought participation to the upside and could be a good overbought because you have underlying demand and usually means and this is from early 2016 is the market chopped around. went sideways. didn't get anywhere for a little while and maybe what we are in for right now and doesn't mean the market has to pull back hard but let the momentum indicator cool off and not a sell call as it is maybe we have gotten a lot of the upside in the short term that we are likely to and within

weeks expect the market to settle out. >> if we're going to repeat the 2016 it is a couple of weeks and then another - >> it is more than that. well, see, but i wouldn't -- i'm cautious about extrapolating the entire 2016 experience because what you did see, by the way, this is brexit you had the big check in brexit that kept people back on their heels and then you went up but by the way, the market sagging into the election. it was not as if it was up, up and away after that. the average stock down a lot into the election and not expecting any kind of catalyst that flips the character of the market the way the 2016 election did and shows you there's been some good force behind the move. >> thank you, mike. time for a news update with sue herera. president trump praising brazil's new far right leader bolsonaro at the white house

athen held a rose garden news conference. >> i intend to designate brazil as a major nonnato ally or even possibly if you start thinking about it maybe a nato ally have to talk to a lot of people but maybe a nato ally. which will greatly advance security and cooperation between our countries. secretary of state mike pompeo traveling to the mideast with his first stop in kuwait. he is leading the u.s. delegation at the third u.s. kuwait strategic dialogue. this week he'll travel to israel and then lebanon. the yurptd of southern california says a review of students' possibly connected to the admissions bribery scandal could lead to expulsions and placed holds on the accounts of the students preventing them from registering for classes while their cases are under review usc say it is students have been notified of the reviews. you are up to date that's the news update see you tomorrow.

>> sue, thank you. you do feel for those kids if they didn't know about it in the first place. >> right. >> back at headquarters. on that topic. the scandal that is rocking the nation and we'll discuss it with former fdic chair and former washington college president sheila bair with an overhaul of the way students pay for school. peloton may be pedaling to court after being sued for music copyright infringement e ad of the national music publisher's association explains what's behind that lawsuit when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life 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.

college admissions scandal renewed talks over the cost of higher education and the subsequent student debt which collectively of americans reached $1.5 trillion. our next guest is proposinging a new way to finance higher education. joining us is sheila bair, former chair of the fdic very good afternoon to you thank you for joining us. >> thank you for having me. >> what's the main issue with the way things are structured at the moment >> well, i think two things.

first of all, you just don't know what the repayment capacity of an undergraduate going to college isgoing to be so tryin to set them up with a loan and knowing 40u knowing how much they can afford when they graduate is not known and student debt all the risk is on the student to repay the loan and if they default then it's on taxpayers and the proceeds of the loans are going to colleges which don't have financial risk. if the student is not succeeding so their incentives, this is not -- just basic economics. the incentives of the program to keep raising tuition because the loan proceeds go to you without any financial risk so i think this is not the right way to fund at least undergraduate education and why i have suggested income share agreements and better align incentives and more affordable for students. >> how does that work, sheila? >> it is not debt. not principal. not interest get rid of that. basically a contract between the

financer and the student that the student will pay a certain percentage of their income over a certain period of years subject to a cap and then they're done and it's an affordable percentage only kicks in once the student has, you know, a decent income and it's -- gives everybody an affordable payment something like that model in the uk and australia it's pretty well worked and there's other issues but with affordability it works you have some cross subsections. high earners do pay more than low earners and everybody has the same rate and affordable payment and actually the principal of cross helps support the financial integrity of system so i would love to see us go that direction as opposed to these rigid debt obligations which for most students as we are seeing aren't affordable. >> sheila, what about any attack on the existing sub ply of

student debt out there which seems to be clogging up the system is there kind of workable solution you are looking at or would consider >> yeah. i think as part of this you should transition students into income share if that's going to be the new system. actually, the president's proposals move pretty close to income share he is proposing one he still is keeping debt but do repay that debt give everybody one simple option for undergraduates of 12.5% of discretionary income and more more 30 years and this would actually move us nicely in the direction of income share. and so, you know, unfortunately the polarization of washington is such that and people have such strong feelings of president trump even proposing what i think can be good ideas and bipartisan consensus people viscerally react to it i hope that proposal gets serious consideration in congress. >> sheila, could your proposal

mean that successful people that earn a lot very quickly actually pay more than the value of the education that they got? >> well, i think, again, most of the programs, i recently wrote a paper lookingality private colleges and universities with this there's a cap out at some level, generally 1.5, anywhere from 1.5% to 2.5% of the original amount financed. there are some overall maximum limits on their loan obligation and the 1.5 multiplier roughly approximates what you would pay for a 10-year loan, the default option now under the student loan system so i think with those caps you get some benefit of cross subsidization and i don't think is bad and everybody has an affordable payment and there's a limit on the high earners the pay. >> given your position, former president of a college, sheila, we're eager to hear your thoughts on the college admission scandal unfolding in

this country and whether you think it will actually change anything. >> well, it's very sad i mean, ui think fraud happens everywhere and higher education admissions and important not to taint the whole academy with this it's unfortunate and it's coming at a very bad time for high i education because their reputations tarnished by, you know, other issues of this opaque admissions process and who's actually getting in and who isn't. the free speech issues and, of course, the student debt issues. so i really hope colleges understand that their reputations are really on the line here. the public is losing faith and they need to get ahead of this they need to have more transparency around admissions, get ahead of the student debt problem. do a better job to contain cost. find more affordable options for financing higher education like those with income share and it

is unfortunate and i think it raises a couple of issues. one about standardized testing to what extent can that be gamed? at washington college we found grades are a better predictor because there's ways to, you know, higher people to train you or whatever to take the tests and perfectly legal. i think it also raises some issues of athletics and why the coaches here apparently, you know, just were given the slots to fill. they should be students first and then athletes and so why the admissions office of the college didn't have full control over that is also something i think that raises some concerns. so shame on those parents for doing this my heart goes out to their kids. a lot of them didn't know about it, others were probably doing what their parents told them to do and suffering ramifications, as well. but again, higher ed needs to understand this is just another very bad tarnish to the reputation they really need to get ahead of

the issues with proactive solutions. >> sheila, thank you for joining us. >> happy to be here. thank you. now disney just a few hours of covering on the deal for 20th century and espn unit making a big deal of its own that could change the face of pay per vuie. we're back in a couple of minutes. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org

welcome back here are some of the other stories on the "closing bell" radar today. the economist intelligence unit

revealing the world's moes expensive cities in its annual survey singapore, paris and hong kong all tied for number one spot first time in the survey's history three cities shared the title. bottom of the list caracas, damascus and a couple of points from this, one a little surprised paris at the top france's economy not going that well very different tax position to the companies there, cities it's joined up with singapore and hong kong. london not in the top ten. >> really? >> i would have guessed new york, london, tokyo. >> tokyo not in the top ten and osaka was. seoul is single most expensive loaf of bread, $15 >> wow. >> that's a -- >> new york is benchmark that's what i liked about the survey how others cities are relative to new york. >> surprising. >> london out of the top ten and not that surprising. >> are there -

>> i don't know. anyway, all interesting reading. >> pound is weaker so maybe there's something there. glossier hitting a $1 billion valuation following the lartdest round of funding with $100 million from investors with sequoia capital leading the way. smart capital also glossier made more than $100 million in revenue last year and retail locations in new york and los angeles. amazing story. started out of a news letter really about beauty. one woman show turned it into a beauty brand goes direct to the consumer and really found an audience something you know about pretty well. >> my daughters -- >> teenage girls. >> discovered it it's an instagram propagated thing and they have been to a physical store and said the line of kids and people outside of the store in soho is huge. >> glossier? >> glossier i think is the correct pronunciation. >> one of their birthdays today. >> your daughters? >> yes.

>> happy birthday. maybe hit glossier on the way home. the espn and ufc with a seven-year exclusive deal for the new home for ufc pair per view fights and a way i guess l deep fan base. >> we are obsessed with ufc. >> they are already pay-per-view so you can get people who expressed an interest to pay for their stuff. i think you can find the narrow and deep audience for one thing. >> we have ufc executives on "closing bell. >> oh, i see we also have the world wrestling. >> i think we were invited to a u ufc tournament. >> no, no, we were invited to world wrestling. world wrestling. i've expressed my preference. up next, the ceo of national music producers association

explains why he's suing peloton for copyright infringement ♪ ♪ dear tech... let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how can we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do... and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪

willy davis, who has alzheimer's. i decided to make shirts for the walk with custom ink. the shirts were so easy to design on the site. the custom ink team was super helpful and they just came out perfect. seeing my family wearing my shirts was such an amazing reminder of all the love and support

that everyone has for my dad. - [narrator] check out our huge selection of custom t-shirts and more, for teams, businesses, and every occasion. you'll even get free shipping. get started today at customink.com. p eceloton under fire. why he is suing the company for copyright infringement. >> tomorrow don't miss the >> tomorrow don't miss the interview with david rubenstein.

what do advisors look for in an etf? >> tomorrow don't miss the interview with david rubenstein. don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. has been excellent. they really appreciate the milita family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat us" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today.

♪ sometimes, they just drop in. obvious. 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. ♪

a group of music publishers is suing peloton for copyright infringement they are seeking more than $150 million in damages saying the exercise bike maker used thousands of works in its videos without permission. >> peloton says we just received the complaint this morning and are evaluating it. we have great respect for song writers and artists. in fact we partnered with each of the major music publishers, record labels and performing rights organizations and many leading independents

we have also invested heavily to built a best in breed reporting and licensing system >> nbc universal does have a stake in peloton david israelite is ceo of national music publishers association. welcome, david, thanks for joining us. >> thank you. >> who do you represent and what exactly are you alleging here? >> well, i represent all of the music publishers in the united states, and their songwriter partners so basically all of the song writers who make the music that are used in peloton classes. >> so, david, i'm a regular user of a peloton clearly lots of mainstream music is played every time you use it. are you saying there are a couple of one-off cases where they failed to pay for the music or they never paid for any of the music? >> no, i wish it was a couple of one-off cases. i think peloton is a great product too. i would love to buy a bike and will probably do so when i can

do so in good conscience this is a business that has built itself largely on the music. for a large chunk of the music industry, they have not licensed the music that they are currently using. their statement which you just referred to is incredible. they basically admitted the infringement that they're involved in. they have licensed some music publishers, but this complaint represents ten very large leading music publishers who represent thousands of song writers and thousands upon thousands of songs that have not been licensed. peloton is using these songs and they're not paying properly and not paying at all because they don't have a license. >> so david, why now if what you're alleging is true, why are you only bringing the suit now have you been trying to talk to them already and they backed away >> well, the truth of the matter is, is that several of these music publishers came to us, their trade association, with this concern in good faith we reached out and

tried to reach an accommodation with the company unfortunately those discussions did not go well and we felt we were at the point where taking this action was the only reasonable course for us to take to protect the song writers and music publishers that we represent. >> was peloton's response we are not in fact utilizing those artists' music or there's a disagreement as to the volume of usage or the manner in which it's used? >> no. i actually don't think they're saying any of those things in fact i don't think they have any defense. they have licensed some of the music that they use. they're in complete control of what music they use. and as our complaint states, over a thousand songs which we think is a very conservative estimate we can prove that they have absolutely no right to use it and have been using this is a case of a very large technology company that grew invests that simply did not respect the song writers who were making the music that their business was partially built on.

my guess is if you break down their business model, every other part of their business they paid for properly other than for the song writers who are making the music, which is just shocking. >> david, thank you for joining us. >> it's my pleasure. >> to talk about this suit david israelite, national music publishers association. >> shame we're out of time there was a planned ipo, of course, wonder what it does to that. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's time square, i'm melissa lee. check out shares of fedex. the stock is sinking after hours after the conference call is kicking off in 30 minutes. we'll tell you what to watch. plus netflix fighting back as apple gets set to launch its streaming service next week. how big of a threat is apple to netflix, the streaming dynasty the traders weigh in. the fed decision tomorrow could bring the bears t