right? >> 87 was the open >> 87 was the high and now back to 70 often that is the history of ipos >> we have to see what it means for the pipeline lyft got it for the capital rates but for the investor rates. >> thank you for watching "power lunch. >> "closing bell" starts right now. it is the final hour of trade. stocks rally here. morgan stanley's top equity strategist will reveal the warning signs he is seeing in the market lyft on track to post below its ipo price. what that means for other companies in the pipeline. and mark zuckerberg asking washington to regulate facebook. a former fcc chair will tell us what steps he thinks the government could take. "closing bell" starts right now. ♪ welcome to "the closing

bell." i'm wilfred frost alongside sara eisen. weak start to the week the month and the quarter. healthy 289 points on the dow. that's not too far from the high of the session, which is 300 but as you can see over 1% of gains for all of the major industries -- indices, excuse me seven of the s&p sectors up more than 1%. financials up about 2% utilities and real estate in the red. >> first we got a boost from the overseas data especially out of china. private manufacturing survey showed some strength there and then bonus round in the u.s. 10:00 a.m. hits better manufacturing data here in the u.s. yields ticked up and stocks really got another lift. >> albeit disappointing retail sales data here. and also point to the fact that the german manufacturing data was soft as was european -- euro zone inflation data. yeah, markets focused on that china data >> focus on the two biggies. coming up an exclusive interview on the show with jpmorgan's head of north american mergers and

acquisitions why there have been so many mega deals in north america this quarter and not so many overseas >> but first let's begin with the market warning signs. our next guest says technology misses could be pointing to a disappointing second quarter let's bring in mike wilson, chief u.s. equities strategist at morgan stanley. thanks very much for joining us. >> thank you >> let's start with the macro before we get on to the micro and some of those points we just teased about your views on tech earnings what are your expectations for the fed in the year ahead? and is that a key determinant for your expectations for s&p 500 levels at the end of the year >> the fed has been the story i think for the last six months. obviously too tight was the perception in the fourth quarter. then of course they pivoted aggressively our economist just took out her hike for this year we have no hikes protected for 2018 or 19 rather he had could come back to the

market next year if things strengthen again we'll have to wait and see if that happens we've had the revaluation. we had the devaluation, the deregulate last year we expected and a full rerating already this year and just in round terms we've gone from about 13 1/2 times earnings at the lows in december to something like 16.7 times forward today. it doesn't seem egregious but that's about as full as we can get given that we think earnings forecasts still have to come down by about 5% for the next 12 months it's just going to be hard to grind higher at the index level. but i think the market is looking at idiosyncratic factors and trying to find value in the market which is what today is about. a rotation back to the cyclicals because of the china data, because of the pmi data, which you mentioned and that's where the value is 9 value is no longer in the growth names, no longerer in the defensive names, it's now in the cyclicals and these early cycle groups >> i feel like we should just set up your calls for a little bit. you turned pretty cautious last year when we went into a pretty

steep downturn in fourth quarter and a lot of people started following you. if i'm not mistaken i feel like you've been cautious ever since and you haven't really been a buyer into this amazing rally we've had in the first quarter where does that leave us >> our call the beginning of the year was we called for a rolling bottom we thought the weakest links would rally first. things like e.m. and these early cyclical stocks, because we felt like those had priced in the slowdown we were looking so we actually did upgrade e.m. early -- or late last year in late november. we looked at some of these early cycle groups like semiconductors and home builders and banks and energy and then the market morphed again into the growth areas and that's when we got more cautious again saying we thought market was getting too expensive, particularly some of these growth areas, and yeah, we were too early in that. the market has continued about 1 huffman to 150 points higher than we would have thought we thought $27.50 would have capped us and we've been wrong on that. but that doesn't mean we should be chasing the expensive parts of the market. we think that what's going on today is reflective of what we think is going to be going on

going forward which is that the market needs to have value to come in and these are the groups that should be buying. should be looking at these early sicyclical groups. >> like what go into some more specifics for us >> so e.m., some of the financials which have really been beaten up recently, materials, some of the industrial areas, and then the more cyclical parts of technology as opposed to the late cycle groups like software. today our note was about software specifically. once again talking about how there was a margin disappointments all through the fourth quarter and software was one area where we saw very broad margin disappointment and yet expectations are going up for margins to be ack and at the same time multiples are quite high we think what's going on is people believe we're in a late cycle environment and they're willing to pape for defensiveness. and i would categorize software as being a defensive group and we think that stuff is getting too expensive. the bond proxies got more expensive as yields have come in over the last month or so. >> you write a lot about the

yield curve and what to read into the fact we've seen this inversion in the three-month and where are you in terms of whether that presents a risk to stocks and the economy o'in the near term? >> i think the economy is maybe at more risk than what people had been acknowledging the market knows this clearly because yields have been coming in and the yield curve itself has inverted as you mentioned. but i don't hear in the rhetoric out there that a risk of an economic recession is probably greater today than it's been in quite a while. once again, stocks know that and we think it priced it in december along with an earnings recession. i think what's going to happen in the next three, four months is we're going to continue seeing mixed data on the economic front here's the real rix the way i see it the earnings profits recession is real. the mistake was not the fed tightening halftime year the mistake was the fiscal policy timing, the timing of the fiscal policy stimulus, which overheated the economy last year and that was really our call is that earnings were going to

disappoint because there was going to be margin pressure, and we're seeing it in labor we're seeing it in excessive capex last year which is now being curtailed, and inventory so the risk is the profits recession turns into corporate behavioral change which leads to further economic slowdown. we think the fed understands that that's why they've been so aggressively here pivoting and even, you know, hinting at the idea their next move could be a cut. that's a very stark change from three or four months ago it's not just about financial conditions but i think they're actually concerned about growth, perhaps a tipping over, because confidence is obviously -- was pretty weak in the fourth quarter last year and they want to make sure it doesn't tip over into a recession >> mike, if we did see that cut and relatively soon, even 50 basis points of cut as larry kudlow was calling for, would that make you very bullish on u.s. equities or not really? >> i think the market's -- the bond market's already pricing rate cuts. so you have to believe that the equity market is looking at the same thing and this gets back to once again you have to have a framework around valuation

16.7 times forward earns is pretty full. could we have an overshoot if the fed cuts 50 basis points and maybe people decide they want to pay even more for those earnings absolutely but you have to think about it in the context of risk-reward. that's a momentum game that's a much different story than saying i'm bullish because i think earnings are about to turn up here a 50 basis point cut in fed funds is not going to change the earnings profile for the next six months in our view because once again there was a fiscal policy mistake that -- not mistake but timing of it was wrong and that caused a tightness in labor markets, some of the capital spending markets and also in the inventory chain. >> so this relationship with stocks and bonds you know, bond yields ticked up after the good manufacturing data today and stocks followed suit that's been a pattern ever since we broke 240 on the ten-year and that got a little worrisome but it's not what we're used to seeing for much of this bull market what happens to this relationship and correlation

>> it's interesting, sara, because if you look at the relationship between the cyclicals and defensive within the equity market, we've written about this, it actually let us down cyclicals underperformed defensives dramatically in the second half of last year, and now ten-year treasury yields are actually catching up in some ways the equity market actually sniffed this out before the bond market did. look, i think there's no doubt that if yields in a ten-year go lower again, they take out last week's lows, i think that would be a bad sign for growth and i don't think stocks at the next level would like that. today as you mentioned we got better data and people got excited and yields backed up that's a healthier setup which is why we're seeing a rotation to some of these more cyclical areas and the markets broadening out again that's a better development. i was getting more concerned last week when yields were plummeting towards 2.35 and below. >> but it's not your forecast. right? ultimately you don't think the s&p's going to close above 2700 this year,

or 2715. >> 2750, which is a full valuation. and by the way, we do think yields are going to 2.25 that's where we think yields could head to. because we do think growth is weaker that's the second part of our call which is that we think people have been a little bit complacent around the stock market rallies, thinking the stock market has telling you something good about growth when in fact it's been mostly about easier fed policy and that's good. easier fed policy is good for multiples. but now we've had the multiple expansion. so from here you've got to see growth reaccelerate. flattening out in china does not do anything for the earnings growth profile as far as we can tell in the u.s. equity market and we'll see how that goes. we'll see how that plays out but that's our view. >> mike wilson, thank you. >> thank you >> one company that is certainly sitting out of today's rally, lyft falling below its ipo price on its second dave trade, hovering right around session lows here, down almost 12%. leslie picker back at headquarters with more

how's this going down in the ipo community, leslie? >> it's a good question. obviously it's been holding at $70 a share for homost of the d. that's 10% below friday close and 3% below the ipo close a couple of factors contributing to lyft's decline today. for one it's simply a by-product of when lyft debuted friday was the last trading day in the quarter meaning some institutional investors may have flipped their shares to get a nice one-day return to add to their q1 performance this had been rumored to be a hot deal raised the rain mg. they priced it the high end of that increased range it was reportedly 20 times oversubscribed some investors were probably riding on that momentum for quick alpha. i'm also told there's a short book building and that can contribute to some negative sentiment as well aspeople see to bet against the stock the short book may also include private investors in uber looking to short lyft as a hedge. that's according to two sources. as to whether there's any support from the underwriters at today's price, i cannot say

definitively at this point in time that there is any support jpmorgan is the stabilization agent and could be theoretically helping provide a floor around that $70 a share mark. i'm not saying they are. but they theoretically could be. but there is a lot of volume today around 30 million shares, which is equivalent to the amount of shares sold in the ipo. so in theory, liquidity would need to dry up more for jpmorgan's support to make a difference in lifting the lyft shares higher. guys >> leslie, all private investors that were invested up until ahead of the ipo, they're all locked up for six months is that right? >> that's correct. all the investors -- >> so the only selling of people that have got shares in the ipo last friday, which we were told was heavily oversubscribed >> it could be people who got allocations in the ipo, people who bought at that ipo price of $72 a share. those people are not locked up they don't need to wait for the

six-month 180 days to sell their shares they could trade if they choose to do so it's also likely a lot of the retail investors who were able to buy on that first mark when the shares were open for trading on friday that may decide they also want to flip it but any investor who bought lyft privately when it was still a private company, unless they sold into the ipo which none of them disclosed as doing so, at least those who own a significant a shares, they are yes, indeed required to hold it for six months unless given approval from the underwriter jpmorgan >> so obviously, leslie, we're all watching this and the bankers of the next wave of ipos are probably all watching it carefully. it's on the second day at what point does it become maybe things aren't as good as they seem in terms of demand >> i think we need to wait at least a few weeks on this one to really understand what the market thinks about this ipo that's the soonest, soonest, soonest anyone could really come up with any sort of thesis surrounding this regardless of the fundamentals, which have been out there for a few weeks right now. a lot of people look at the

fundamentals and they say a billion dollars in losses, a $25 billion valuation at the ipo price, what's going on here, i think it all depends on the market appetite for top line growth, whether that will extrapolate to the other ipos coming down the pike, whether those losses actually make a difference in the minds of the public market investors and what they're going to let these ipos get away with. that's the big question. it really all boils down to the collective opinion of the market especially with these new untested business models to the public markets >> leslie, just quickly, we've all said how this is going to be an important marker for uber's own ipo. what's more relevant for uber's i ipo? the price at which lyft listed or the price it's trading at the day uber comes to market >> great question. it's the price at which lyft is trading at the day uber comes to market the reason being the investors who are looking to buy shares of uber's ipo will be using lyft as one key benchmark as to whether that deal is cheap or expensive as it comes to market.

that deal being uber's ipo as cheap or expensive if lyft is trading way below on a multiple basis what uber is looking to price at then nifrgs may say you know what, uber is too expensive relative to what its comparable lyft is trading at, i'm going to steer clear of this thing at these prices so it's really, really important. today's price doesn't matter for uber as much as it will a couple weeks from now assuming uber does go out in may guys >> and it may not matter at all because snap went up 44% on its first day and then another 11% on its second day. it's lost a big chunk of its value since then facebook barely rose on its first day and then fell 11% on its second day >> definitely two days is nothing to mark down as significant. but i think two or three weeks levels will be important >> absolutely. >> and the retail investor xwlijs for the first two davis trading is huge as well. you see especially in deals like snap and especially in deals like lyft where up a much larger retail interest coming into these things you can see a lot more momentum trading than you

may with a spon sponsored back spinoff of an industrial company where there's not as much retail attention paid that needs to settle down. >> leslie, thank you very much still to come on "closing bell," mark zuckerberg says it's time regulate internet companies including his own. we'll discuss what that oversight could look like with former fcc chairman michael powell the first quarter could shape up to be a rough one for vehicle sales. wsorheat isn't necessarily bad ne f t big automakers. we will explain next ♪

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order sales data for the first quarter could point to a big slowdown in purchases. but it may not be all bad news for the automakers phil lebeau's in chicago with that story for us. hey, phil. >> we'll get the final numbers sometime tomorrow afternoon. right around now is when we would expect them to come it n. from auto data but the folks at j.d. power have been crunching numbers and they see a definitive slowdown in terms of overall sales. they're putting the pace at about 16.7 million vehicles. if that holds true, that would

be the slowest quarterly sales since the fourth quarter of 2014 now, it's not all bad news for the automakers there are pockets of strength within this industry we've talked about suv demand. look at pickup demand. it is driving higher revenue per pickup up to 41,500 that's revenue to the automakers not profit but revenue to the automakers a xuflt automakers we're going to be looking at in particular tomorrow, let's start first with fiat chrysler. because of the rotation into suvs, jeep is expected to have a strong march sales we'll get their numbers in the morning. we also get the first numbers we've seen in three months from general motors gm only reports on a quarterly basis. we'll get those numbers sometime tomorrow that will give us some perspective in terms of because they're so large they are the industry leader in the united states. the overall strength of demand out filip it's trucks and suvs that's really what's been pushing not only general motors but all the automakers >> phil, i guess there's a similar theme when we think

about housing with rates coming down, maybe things could start to pick up again next quarter is that a big factor here or is it more broad than that and strength of the consumer >> well, it's strength of the consumer consumer confidence is what drives auto sales. at the end of the day. there's a strong correlation there. look, higher interest rates for auto loans over the last year certainly was a factor along with all of the vehicles that were built over the last four years. record auto sales. it soaked up a lot of the demand that's out there so there's a natural pulling back that everybody in the industry has expected. the question now is does it hold in that 16 1/2 to 16.75 range. if that's what it holds at for the year most of the industry will take it >> phil lebeau, thank you. still to come, the keibler elves could soon have a new home details on the $1.3 billion deal for some iconic snack brands still ahead. >> speaking of deals, the head of north american m&a at jpmorgan weighs in on mega mergers in the first quarter and

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35 minutes left to trade a very vong session to kick off the quarter. up 1.2% on the dow and the nasdaq the s&p up just over 1%. coming up, mark zuckerberg says facebook should be regulated that is his realization. but is it coming too late? former fcc chairman michael powell will weigh in plus venture capitalist

santos rao was optimistic when we talked to him friday about his investment in lyft >> we are long-term holders. we believe in the story. we believe in this whole segment of the market. transportation service is going to be big. it's very disruptive very early stages. >> ahead we'll ask him if today's plunge is impacting his confidence in the company. woman: my reputation was trashed online,

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call reputation defender at 1-877-492-6705. about half an hour till the close. we've got a 300-point rally now. it's been strong we're near session highs, which were around 315. united technologies, jpmorgan chase. kind of a mix. the banks are having a good day. industrials are too. losers are more defensive companies like mcdonald's, united health, j&j and coca-cola. time now for a cnbc news update with sue herera. hi, sue. >> hello, sara hello, everyone. here's what's happening at this hour the u.s. navy and coast guard taking part in marine exercises off the coast of nigeria to try and stop pirates, drug and migrant smugglers. it's the ninth year the u.s. and 33 other countries have trained together a u.s. admiral says that training is crucial to the

african economy. >> the gulf of guinea is a very important region and the sea lines of communication are important not only for the security of the nations in the gulf of guinea but also for the economy so you must have security before you can have a prosperous economy. about 90% of our goods are delivered from the sea a shooting at a school in arkansas this morning involving two eighth-graders police say a 14-year-old brought a gun to school and shot another 14-year-old in the hallway the suspect is in police custody while the victim is listed in stable condition at a local hospital and the cdc says there have already been more measles cases in the u.s. during the first three months of 2019 than in all of 2018. there have been recent outbreaks in the u.s., most notably in rockland county, new york. you are up to date that's the news update this hour guys, i will send it back

downtown to you. wilf lyft sitting below session lows after falling below its ipo price in its second day of trade. bertha coombs is at the nasdaq with more. >> the ipo price was above the initial range at $72 a share initially the company had talked about pricing somewhere in the range of 62 to $68 and that seems to be where it's finding a bit of support today among the things the bulls can look to is that it's not hugely high volume. it's about half the volume that we saw with its debut on friday. nonetheless, if you take a look and pull it out on the two-day, the stock right now is in bear market territory off more than 20% from the high. it hit on the ipo. of course two days do not make a trend for a stock trading. but nonetheless, it could be in for more pressure later this week the chicago board of trade, the cboe, anticipates that they will list options for lyft starting on thursday. and a lot of folks will be watching to see if the stock is

under pressure and what that's going to mean for the slew of ipos expected here on the nasdaq this week. on wednesday we expect a marketing firm, influencer marketing firm that's backed by alibaba aroun holding to go public and on thursday the big one. trade web. that one expecting to raise upwards of $800 million along with silk road medical that's a device maker. and ngm biopharmaceuticals a lot of people waiting to see how liftd trades and whether that names some of the other names going public this week back over to you >> bertha, thank you as the ipo market heats up, the landscape for mega deals is also showing some signs of strength so far in 2019, 12 deals over 10 billion vds been announced globally a lot of those in north america. that includes the ge and danaher deal for more on what to expert rest of the year we're joined exclusively by anu aiyengar.

good to see you. >> good to see you as well >> talk us through some of these patterns and trends you noticed for dealmaking in the first quarter. >> yeah, the first quarter was pretty interesting overall when you look at north america volume it was about flat but hen when then when you pee 10 billion plus, like you said, was extremely-g contributing to almost 60% of the overall market, right? 11 deals you've never had 11 deals over 10 billion ever year to date if you go back in history. so that's pretty special but if you look at the deals below 10 billion, the number of deals, 35 deals this quarter versus 52 last year. so the number of dealsitself has come down even though the overall market is kind of flat if you look globally, the trend is a bit different because m&a in asia for different reasons have been a bit softer you had the big saudi aramco deal but aside of that there was

no deal north of 10 million outside of north america >> what explains the strength in the u.s. versus the rest of the world but the lackluster smaller cap performance in the u.s.? >> so all different reasons. right? broadly the drivers of m&a have kind of been consistent. because organic growth when you look at it globally is good but not great. so people continue to say let me use m&a as a tool to drive growth however, whether that's brexit or general regulatory uncertainty, if i announce a deal will it close or not, does give cost to people and that has been a bit more of an impact in india and apac rather than in the u.s. so in the u.s. investors continue to like growth, continue to like deals, and another big theme has also been this relentless focus on corporate clarity. 40% of the deal volume in north america has come from corporate clarity transactions

ge danaher, dow du pont, eli lilly. there's been a lot of these transactions which has just been focus on your core and divest whatever is not core >> this kind of pace sustainable into q2? >> i think it is the mix may be different in terms of mega deals versus smaller deals. but the drivers are continuing to need growth and on top of that the end markets are getting disrupted. sometimes it's by technology and so you've seen some of these deals happen because you have disruption of the end market, technology driven, customer trends driven. and that's here to stay. so companies do have to think about looking at their strategic toolkit and using m&a to sometimes defend and sometimes be on the offensive. >> what's preventing more cross-border m&a is that just another sort of repeat of the factors you said for why there hasn't been that much euro zone or apac m&a

>> for euro zoen markets you can deal with some volatility but you need some level of certainty. and i think brexit as well as the regulatory framework has had an impact on that. but tell me if your country will make the right decision. >> i wish i could tell you i wish i could >> where should we be looking for deals in the u.s.? are there certain sectors or types of companies that are more ripe >> so technology and health care continue to be active. i'd say the fourth most active sector in the first quarter was financial institutions so whether that's tech or banks. i think both have been interesting for different reasons. because last year if you look at all the bank deals that got announced most of them were structured as acquisitions and the market actually erupted negatively to pretty much all the deals last year in the bank sector this year you've had one big one, the suntrust one.

another big market one, tcf chemical and both were structured as merger of equals using stock and the market seems to have liked them and it's somewhat of the same drivers, right they are also using the synergies from the deal to go and invest in marketing and technology so i think that's going to make other people sit up and take notice >> do you think you'll see more of those sort of region 8 medium-size bank mergers >> i think the driver is certainly there. but you know, merger of equal deals are hard to get done so is there a need and scale benefits, need for synergies, need to invest in marketing and technology absolutely how many of them manage to get to the right structure, to get to the finish line we'll see. >> how does the feverish ipo pipeline this year impact company dealmaking how much demand is there for all of this? >> so in a way it's an

optimistic thing for the whole market, right? when you have a lot of companies and especially quality companies coming to market for the m&a market there's kind of two implications. one is when you have very robust equity in m&a markets companies look at doing dual tracks, checking what the ipo price is going to be looking at what my m&a price is going to be and also as more companies go public they all now have more currency to do m&a that's all good. >> a lot of stock deals. finally-r there other periods in history where this a dealmaking and this kind of activity signaled end of cycle, windows closing, something like that >> so different trends, right? i think, again, when you looked at the last down trend it was probably a lot of lbo-driven activity this one has been much more strategic focused. but most of the deals, i think one of them was lbo type deal. but otherwise, most of them were r point, about 70% of

them i think in north america used some form of stock. sometimes all stock, sometimes stock. and in markets where you have uncertainty that's actually a smart trick, right use stock, share the risk so you're not underwriting each other's performance. i expect to see more of that >> anu, thank you. >> thank you very much >> anu aiyengar of jpmorgan. >> we have a news alert on slacken. leslie picker has the details. >> hi, wilf. just a few months away slack is doing its direct listing on the new york stock exchange. dow jones is reporting citing people pam with the matter that follows spotify's direct listing which was also on the new york stock exchange. that's a unique way of going public where you don't do the traditional road show and book-building method, you that just -- your shares start trading that day and so both of those companies choosing the new york stock exchange makes sense on that front. now, lyft listed on the nasdaq last week but it's been reported

that uber will also list on the new york stock exchange and pinterest in its s-1 disclosed it will list on the nyse as well now, "wall street journal" saying that slack is expected to debut in june or july, guys. >> leslie, thank you kellogg nuancing plans to sell its cookie business to ferrer in italy maker of nutella casino stocks. "closing bell" back after this

welcome back to "the closing bell." we've got 20 minutes left to trade. at over 1% for all the mamg averages, smault cap russell just less than 1% but a good start to the quarter let's check on some individual market movers. within resorts casinos in the macau region --

sorry, region. it's an island reporting better than expected revenue for march. casinos brought in $3.2 billion for the month. their highest total so far this year total represented, 0.4% decline in revenue year over year compared to analysts' expectations of up to 6% decline. shares for example there of wynn up 8%. macau does make up about 70% of wynn resorts' revenue. the reason to focus on, this interesting to see a bit of a turn around in expectations for a key kind of sign of chinese spending on a day we loss got a better revision on manufacturing pmi. good indication. albeit means fractionally lower year over year but better than january and february plateauing and a bit of a turn kellogg should be selling keebler, famous amos and other snacks to ferrero in italy they successfully beat out hostess brands for the business. the deal expected to close by

the end of july. largely expected thanks to cnbc reporting overt last few weeks on this deal where i mentioned that kellogg brought keebler for $4 billion back in 2001, which just shows the changing tastes of american consumers and what's happened to a lot of these acquisitions at big brands the theme for 2019 with some of these food brands trying to get back to growth, divest we're seeing it can campbell's soup they're getting rid of their campbell's international business general mills divesting some of its businesses they're focused on growth and that's a big change where they used to be focused on cost cutting the last few years >> this deal is what anu told us divest -- >> clarity >> exactly going forward. and as you side something we've been expecting cnbc.com up next, allianz's u.s. investment strategist tells us the sectors she nafrz. >> later, facebook's mark zuckerberg calls for more internet regulation. we'll tell you why he wants the

government to have more control and we'll get reaconti from former fcc chairman michael powell "closing bell" will be right back you should be mad at people whos forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated. their app makes trading quick and simple so you can strike when the time is right. don't get mad, get e*trade and start trading today.

welcome back to "the closing bell." 30 minutes left to trade s&p 500 winners, some big gains. xerox, chipotle, and xilinx. strong start to the year including the first quarter but particularly decent start. >> joining our "closing bell" exchange norma mahajen from allianz global investors and rick santelli from the cme in chicago. mona, how would you describe sentiment now that we've had this tremendous comeback in the first quarter? >> clearly we're now up about 20% since the december 24th lows a lot of people were hoping for hoping for some signs that china would stabilize, some signs that perhaps the u.s. could decouple from the global growth slowdown picture. and actually we've seen a little bit of both of that just this morning. we got the china pmi numbers above expectations u.s. pmi numbers looking pretty

solid. i think that sets us up pretty well for this story to continue. obviously one data point does not make a trend, so we're still watchful just like the fed we're very data dependent at this point >> is the market ignoring retail sales data today >> the retail sales data was tricky we were below expectations but the revisions for last month were about 50 to 60 basis points higher across the board. so that brings into question was something going on with perhaps the shutdown time did we get some skewed numbers there? i think people are overlooking that one a bit for now >> when it comes to reading the data, better manufacturing you saw a reaction in the bond market have treasury yields bottomed for the year >> you know, i think they bottomed for this particular move whether they bottomed or not for the year i think the best way to tell would be a technical answer really we broke down when we broke what had been the low close of the year.

for 10s is was around 2.55, 2.56 the session we traded under that it was definitely a big move and we never looked back we need to close back over that level. if we close over that level and keep everything as it is now, sara, i would say most likely the answer would be yes. but we'll have to wait and see there's a nice feel to treasuries but i don't want to get too far ahead of the process. it is definitely a nice move off the lows we're now hovering pretty much all maturities should we close here at the best closes since thursday the 21st. so a week ago thursday it is a start. i really like the cross-fertilization of momentum going on between the treasury complex, rising rates in stocks, and while all this is going on the dollar lost a little ground but once again holding the 97 handle i do think that we have two big numbers this week that could answer the question we're both discussing adp on wednesday of course and the bureau of labor

statistics jobs number on friday 20,000 last month. even though you could call it lagging indicators, a lot about that number that figures doictht figures into confidence of investors. >> macro expectations still a key thing for u.s. equities or can we start to focus on the micro as we approach q1 earnings >> i think the next big focus for the markets will be q1 earnings clearly this quarter we're looking at a negative earnings growth expectation but what's interesting is still q4 of this year we're looking at 8% to 9% year on year growth figure i think that will be the key the back half of the year can we get almost this v-shaped recovery and i think that's where the hope is starting to build, that perhaps expectations have come down, year on year expectations for the s&p right now are about 4% maybe that has gotten a little bit lower. we'll see how q1 earnings play out. and can we set up nicely for that >> i feel like every economics research note i've gotten today has been actually q1 is looking better than we thought

this is supposed to be the quarter with the seasonal factors and the shutdown and the weather. it was going to be bad, bad, bad. but all these economists are revising the forecast for q1 up. does that mean earnings expectations for q1? >> i think generally that's the historical trend companies guide lower than they want and they actually set the bar low so they can be on average. i think it's 1% to 2% every quarter. q1 does tend to be seasonably weak, and i think this quarter in particular as we were coming out of q4 where recession fears were building companies took the opportunity to really set the bar lower. perhaps a negative 3% for this quarter is maybe below what we're actually seeing in reality. so i think we have set the bar quite low. i think the bias is toward the up side there. >> in terms of international exposure equities-wise, what is your preference? >> we continue to prefer this barbell approach u.s. on the one hand best on the block still from a developed

market perspective versus a japan or europe in particular. on the other hand, we continue to like china here it's had a great run year to date we're looking more selectively at parts of e.m. as well i think the story there, if the dollar continues to tried sideways, if we get a trade resolution valuations there are not as stretched so it's interesting. at some point i do think europe becomes interesting as well, particularly from a dividend perspective. you know, the ftse there is a 4% plus dividend yield. euro stocks 3 1/2% dividend yield. i do think the u.s.-china tried if we get a resolution unusual's a beneficiary as well. watching that one. >> mona and rick, thank you both very much. >> thank you guys. >> we've got a news alert. it's on amazon and whole foods hey, dee >> adamson just issuing a press release moments ago saying it will further cut prices at whole foods stores that starts on wednesday they say customers will save an average of 20% on hundreds of items. also that prime members will have double the number of

exclusive deals with that rising over the next few months this is of course to get people into that prime ecosystem. now, these cuts are some of the broadest since amazon bought whole foods for nearly 14 billion in 2017. remember, trying to compete here with the giants in this grocery space like walmart and kroger. hasn't been totally smooth or straightforward. prices have gone up as well on hundreds of items. but on wednesday we'll be cutting the prices of hundreds of items at whole foods. guys >> i don't think any other grocers put out press releases announcing they're going to cut prices on grocery items. this seems like very savvy pr to me >> it's a very amazon press release too. i was looking through it i think lemons and things like, that they do break out the actual items in case you're interested i guess, on wednesday. >> and you know, look, we're talking about it it also has an impact. kroger shares are moving lower on this news because of course the thin razor margins that these companies have, walmart and kroger, when amazon's in there to compete everyone has to go low

>> retail sales for february were soft. and groceries were part of that. i think that's worth mentioning as well. dee, thank you >> i think -- oh >> go for it final point. >> i was just going to say that you know, amazon has been successful in a lot of things but remember that it's been trying to get into the grocery space long before whole foods. so it's bringing the amazon strategy and it still very much remains to be seen whether or not it's going to work >> certainly lots offar industry dynamics at play as well thank you, dee up next we'll be back with the closing countdown. we've got five minutes left to trade. >> after the bell former treasury secretary larry surmds speaks out on larry kudlow's inll to cut rates by 50 basis wait till you hear what he thinks about that one. coming up on "closing bell." one-millionth order. millionth order. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot.

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don't get mad. get e*trade, dawg. welcome back to "the closing bell." i had decided an intraday chart wasn't tharnting pretty flat. positive but flat throughout the session. but nice little pop into the close does show us we're at the session highs, which means over 1% for all of the major indices including the small cap russell which has just ticked above 1% as you can see great start to april for those indices up 1.3% for nasdaq 1.2% for the s&p seven sectors up more than 1%. and a couple of them up more

than 2%. industrials having a good sessions following some good gains in china materials. only utilities is meaningfully lower. financials up 2 1/2. why? yield curve. here's a glimpse at it one to ten years no longer inverted you have to go less than one year to see yields higher than the ten-year yields rising to the long end. >> two things that matter. the china global rally and the ism number did you see the yield? we moved five basis points on the treasury, the ten-year treasury yield in a couple of moments when that number came out. and the banks all rallied. they were up already before that look at that 10-year spike that's an train day. 10:00 eastern time there's the banks all up 3% p got a little bit of a boost here energy stocks. oil here $61 that's a five-month high all the energy stocks moving today. through go, look at that five-month high.

finally just on lyft, closing at the lows, two days in a row. the stock was overpriced it doesn't mean all the ipos are overpriced but the markets telling you they're going to be closest about pricing. >> do people need to be worried about the first two days of trade? >> yes certainly not a good sign. it's going to be better news for the buyers later >> 1.1% for the s&p. the dow 1.3% russell stays above 1% very healthy stock to the corner back to you. >> kick off q2 with a bang welcome to "closing bell." i'm sara eisen wilfred frost joining me in a moment look at how we finished up the day on wall street healthy 330-point gain for the dow on the first day of trading for april and first day of trading for the second quarter up 1.3%.

for the dow jones industrial average. up 1.15% for the s&p financials, industrials and materials all in the lead. pretty cyclical grouping there as far as the losers in the market it wadefensive. utilities, real estate and consumer staples the nasdaq composite topping 1.3% technology having another good day. and the russell 2000 indeese underperforming. still good for a gain of about 1% by the way, treasury yields also ticked up to recent highs from where they've been lately. the 10-year yield trading just about low 250. coming up former fc chairman michael powell tells us whether he agrees with facebook ceo mark zukerberg's call for the government to step in and regulate the internet. and how he would do that stories on our radar for investors. lyft shares plunging after its ipo on friday. president trump escalating his fight with the fed over interest rates. joining us to talk about the market today, peter checini, former market strategist for

cantor fitzgerald. mike here as always. you know, pretty strong start. and if you look at the groups that did the best really teeing off some of the economic numbers and the momentum we got overseas and here >> no doubt about it, sara almost a little too neat and tidy, right? brand new quarter. we came through the first quarter kind of huddling in some of the safer defensive sectors, feeding off of a dovish fed and also low bond yields we get relaxation of the bond market on some good macro data and awful a sudden it's a mean reversion rally because all the stuff that trailed last quarter took off today new flows for the first quarter. so it seemed like it worked pretty well, especially when everybody was saying what we really need to see, some kind of inflection in this global growth story before we get confident that the market has nott eten g anne head of it itself for one day it works we'll see if there's follow-through >> i feel th data has been selecta china was decent but euro zoen and german inflation was is on the good and u.s. retail sales weren't so good. >> i do think china is enough of a spark in that that's the most

incidencive area for people's per sepgsz of where the economy's going to come from if we're going to get a turn that's going to be the engine. again, it's one day. it's 1 1/4% on one dpap. >> manufacturing i think for both of them tend to be leading indicators whereas retail sales are kind of always unreliable these days >> people were picking apart the u.s. ism number a little too and saying it was less than the d.i. but we'll see how the market sorts that out >> peter, what do you think about the way we started the second quarter coming off of a very strong first quarter? the momentum is here >> we'll see it's either xhoemtum or an inflection we don't know if it's momentum if we roll over then it'snot momentum when you look at kaixing this morning and you see the print there i don't think that makes for a change in the narrative at all. i think the internals of the ism number were actually weak. new orders were strong but backlogs were very, very weak. retail sales were weak today's data was the kind of data where you can craft whatever narrative you'd like

around it. >> the market did craft a narrative which was ten-year yields jumped and the -- >> i think that's really important. i think rates have been doing the fed's job for it global growth has been slowing bund yields, jgb yields. they're negative as you mentioned, this is the first day in a long time we've seen ten-year yields above 2 1/2% that's helped to loosen financial conditions if that changes in any form or fashion i think equities are going to start to stall. >> the bears are really sticking to their guns. it's not just you. mike wilson was on in the last hour he's chief u.s. equity analyst for morgan stanley he's been cautious really since the end of last year and he still says there are some pretty big warning signs like earnings. listen >> the earnings profits recession is real. the mistake was not the fed tightening last year the mistake was the timing of the fiscal policy stimulus, which overheated the economy last year. and that was really our call, was that earnings were going to disappoint because there was going to be margin pressure and we're seeing it in labor, we're

seeing it in excessive capex last year which is now being curtailed, and inventory sought risk is that the profits recession turns into corporate behavioral change which then leads to further economic slowdown >> there's still this idea out there of earnings recession. we're going into an earnings season one of the big drivers of this is the fiscal stimulus, the tax united states and whatwhat that's going to mean for companies and consumers. >> all of that stuff coming into play i think the suspense about earnings season is the market is acting as if it's kind of looking beyond first quarter earnings so i think until they actually hit we don't know if in fact the market has successfully kind of cleared that hurdle and said we can write that off or maybe in fact they come in better than expected and we can support the market here. but that's where i think we're going to have the back and forth once we actually report. >> peter, what are you expecting for q1 earnings and will it move

the market >> i think q1 earn rgz sort of in the bag in terms of the way expectations have evolved in particular when we look at what they were toward the end of last year, expectations were to for up 7%, 8% now they're down 3 and change. q2's going to look pretty much the same in my view. i think we're actually subject to downward revisions for q2 whereas i think that's actually not part of the narrative right now. i think that most people think the downward revisions are sort of in the rearview mirror and i think for the full year i think we can see earnings much closer to 162 or 163 than 167 or 168, which i believe is roughly the consensus now. >> which sectors do you think are well set up for this quarter? >> in terms of a rally >> yeah. >> financials have been absolutely beaten up and that's around the yield curve. but it's also around loan volumes and lending standards. lending standards have been tightening and that's generally not a great thing for loan volumes and i think the banks have priced that in they were down 10%, 11%. i think they're poised to rally. i think i said it last week when

i was on the show. but i think that rally's going to be short-lived because we're very long in the tooth in the cycle and that's more relevant than any near-term bounce here and to the point about being a bear and the bears sticking to their guns, yes. but in a market like this, which is late cycle, you have to think a lot more tactically and for me in december i was actually fairly bullish i thought the market was oversold at 2350, 2400 i thought china would rally. it has at this moment i think the risk reward toe owning equities is not great. >> let's talk about lyft where shares fell below the ipo price today. only its second day of trade of course the ride-railing company's stock soared as much as 23% when it went public on friday. closed down 12%. pared back the gains on friday by the close as well mike, do you think this is going to worry the upcoming ipo companies? or are they thinking look, it's two days, let's see where it is? >> i don't think it's an outright worry i do think you have to take the market's reception as a real

evidence of the kind of demand you're going to have out there for certain kinds of companies i would point out that the price range indicated before they actually raised it to $72 for the ipo was i think 62 to 68 68 was the high end of the range. we closed at 69. it's all kind of relative in terms of how you frame what the entry price is for ziegd whether this was a bust or not a lot of ha demand clearly got exhausted at the opening print on friday. when it's something like 6 million shares cleared at that price, what was it, 78 >> yeah, it went from 70 to -- popped about 20 -- >> 20% it was actually in the 80s >> 80s >> yeah. clearly that was short term, exhausted, it but ipos take a long time to kind of season and figure out who the real owners are. >> peter, when we hear something is oversubscribed, i mean, do we have to be a little more cautious about that? >> look, i think so. the performance of ipo story

stocks is really important and again, it feltells you a lie about the way investors are being more picky in what their expectations are and i think if we get a few more of these that don't work out as well as expected i think that's a story whereas one stock, one ipo maybe not so much. >> mike, in terms of the balance of what this does to valuations in the tech sector, is it relevant to the broader nasdaq index? more of a market for the -- >> i don't think it's immediately relevant because if you look at the kinds of stocks that dominate the nasdaq and that have been leading this market, they're almost the opposite of airlift where lyft has no profits as far as the eye can see, very much an untested business model, we don't know if they even have a competitive advantage that will be sustained whereas the stocks that are dominating the nasdaq are basically these ones you never have to seemingly worry about for years to become. it's amazon, it's microsoft and them they have their big moats and they can basically print money and have high cash for years to come at least that's the market determine ailgs of them. so in a weird way i think it does say a lot about private

silicon valley valuations but not a lot about the big public market ones. >> peter you sort of have a macro view on the mashts and where we are in the cycle. what will you be watching in these ipos as we get more of them >> well, in the ipos probably not as much as many but when i look at the fang stocks to mike's point they have been underperforming. if you look at am's performance today it wildly underperformed the broader market, at least when i was in the office and i think the fangs have pretty much been underperforming year to date based on expectations i think in look at the fangs and momentum names it's very, very important. i'll be looking at the fangs very closely, going to be looking at the banks to see if they can sustain their momentum. and transports have also been underperforming on a relative basis. breadth has been deteriorating small caps let's look at small caps they've underperformed the past month or month and a half. and i think that's an important tell as well >> certainly today they did. and i guess for march. though they had a good first quarter. the white house upping its criticism of the federal reserve. president trump calling the

fed's interest rate hikes a mistake. and larry kudlow calling for the fed to ut interest rates by 50 basis points immediately on cnbc friday earlier today i asked larry summers, the former treasury secretary under president clinton to react to kudlow's call >> i think it would be premature to cut interest rates by 50 basis points but i've been generally dovish on monetary policy but the key point is you can't brag on an economy and say it desperately needs urgent monetary stimulus and that that's so desperate a need that you're prepared to take unprecedented steps in politicizing the fed it just doesn't add up >> despite criticism from trump and kudlow not all white house officials are counting on the fed to act here's council of economics

chair kevin hassett speaking earlier about it on nbc 37. >> i think that a lot of people on wall street have advice for the fed and it's not my job to step out there everything that we see right now is teeing us up to have a year is that looks just like last year where you have a first quarter around 1 1/2 or 2 and a second quarter that goes back way north of that and carries to you 3% year. and i don't see anything in the data that makes me think -- >> that sounds like an economy where you might raise rates twice, not cut rates twice >> we'll leave that to the fed they're evidence-based people. >> well, they're not exactly leaving it to the fed. president trump tweeted out pretty much larry kudlow made it very clear where the white house wants to see doing it, whether it makes sense or not. >> it's actually kind of funny on a day when the real-time track, the atlanta fed, gdp tracker went back above 2% for the first quarter. i think that there is a little bit of dissonance here between the message that we have this economy that's really going bangbusters and we need help from the fed to reach deep in the yield curve -- by the way,

50 basis points out of 240 that's what we're talking about cutting in terms of the federal funds rate >> but pete, to the point of what larry kudlow said friday, do you think it's an emergency at the moment? >> i don't think it's yet an emergency. i think it would be premature. and i think the fed to some extent finds itself between a rock and a hard place. and i say that because if it cuts too aggressively too early it sends a message that it is an emergency when it really isn't an emergency on the other hand, because there's not that much room back to the zero bound, if it waits too long it could end up being an emergency so i think it's a very, very tricky spot for the fed to be in, especially now that the balance sheet is continuing to shrink at least through september. >> why would they cut rates right now? 2%, yeah, we don't have an inflation problem, but we're not having deflation >> i agree i don't think the data supports it i mean, there was something of an argument late last year when break evens actually fell off a cliff and real rates went through the roof but now that oil has rallied back a little bit, the data doesn't look quite as bad on the

inflation front. so i think it would be really a bad idea to send that message right now to cut rates 50 basis points for sure. >> i also don't think we can dismiss the idea that the white house line and in fact the president in his tweet pretty much said this, which is they just like to have it out there that things would be even better and they would have even more brag rights about the economy -- >> so it's political >> -- if the fed -- partially, yeah i truly think they wish the fed would do that. >> it would be great to have a stock market bubble and a nominal gdp running at 6% when we get to an election. sure >> and also to your point, mike, larry kudlow very clear in his interview. he says i'm not trying to tell them what to do nor are we actually phoning them up and telling them what to do. yes, that's different from past administrations but it's somewhere in between the kind of two extremes if we did see a 50 basis point cut, even if it wasn't necessarily needed for the economy right now, would that make you bullish on the s&p 500 for the year ahead

>> that's a great uestion. when does bad news become bad news how much room does the fed really have to maneuver at this point this late in the cycle with the benefits from fiscal stimulus now in the rearview mirror how much would a 50 basis point cut matter with the rest of the global economy slowing i don't think that narrative has changed. the china slowdown story's still intact the euro slowdown story is still intact canada's not looking very good i'm not sure it would make me bullish. >> one final question, peter, for you. you said the euro club is doing the fed's job for it with yields shifting recently. what about the dollar? is that about to or already making the fed job harder? >> the dollar hasn't moved that much you look at the dxy as a convenient proxy you are call this year is 96 to 98 most differenttial basis currently hedged versus the major crosses. i don't think the dollar is a headwind it's really the move in the

dollar that makes it hard for corporations to act rather than the absolute level i think the adjustment's been made i don't think the dollar in itself really a head wind. >> we have a news alert on boeing and the 737 max let's go to phil lebeau. >> let's take a look at shares of boeing because the faa is out with a statement regarding the proposed fixes for the 737 max remember those software changes we hoilt when'd we were out in renton, washington last week the faa says it expects the final package of the software enhancement over the coming weeks. that would be for faa approval this is the critical sentence. time is needed for additional work by boeing as a result of the ongoing review of the p 37 max flight control system to ensure that boeing has identified and promotely addressed all pertinent issues upon receipt the faa will subject boeing's completed review for review.

when we were out in renton and boeing executives said we believe we have identified the fixes for the 737 with the swrf and enhanced pilot training and we expect to file this with the faa perhaps by the end of last week or the beginning of this week, that's not happening for a while. so it will be curious to see how investors react to this because it's clear this is going to be a more drawn-out process and if you thought the 737 max was going to get back in the air in no-two or three weeks you take this along with the airlines like american or southwest who don't even have it on their schedule for weeks if not until the end of may, i think it's pretty clear that we're looking at a plane that's going tosh grounded for some time here. >> phil, boeing's down about 0.4% in the after hours. is it fair to say the surprise is they didn't bother making a statement along these lines? surely we were always going to expect that they'd put the new safety -- the software upgrades through rigorous testing >> that's not the critical part of this, wilf.

the critical part is the timing aspect because it was made very clear by boeing executives when we were in roent last week that we've identified this, we think the software's going to be ready to go, we're going to make some final reviews of this and file it with the faa by friday if not by the beginning of this week. it's clear from this statement from the faa that's not going to be happening the drawn-out nature of this is what's going to get some attention here in the next couple of days >> all right, phil, thank you. i guess mike, investors who were hoping for a quick fix aren't getting one. >> that's right. although i think taking it in stride is the way to consider the market reaction. up 2.6% today, the stock it's holding on to most of that. zblinl >> industrials had a good day on the china numbers. boeing on the deep slide from its highs and how much bad news is priced in there >> i think a good bit of bad news is priced in there. obviously i can't comment on individual securities. but it feels to me like the news is priced in >> thanks for joining us today still ahead, facebook ceo mark

zuckerberg calling on the government to regulate the internet former fcc chairman michael powell weighs in and lyft shares plunging below their ipo price. on their second day of trading we'll lkta to an early lyft investor about whether he's worried. later on "closing bell." measure up? a cfa charterholder does. you've worked hard to grow your wealth. 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

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michael powell former fcc chair, current president of the telecommunications association welcome, michael zuckerberg lays out four areas that need to be regulated. privacy and data portability is this helpful to get regulators to do their job >> well, it's helpful but it's kind of a statement of the obvious. the four areas that mark outlined are precisely the areas that he's reacting to public outcry and/or existing government regulation around the four areas are carefully selected but i think they're

areas that have already garnered the government substantial attention. to me what's more meaningful is to see a ceo abandon their long-standing insistence that self-regulation was an adequate remedy and recognize that they may need the government's assistance to satisfy the public they're complying. >> what do you think the rationale, the driving force behind him making that admission? >> two things. i think one is frankly political. it's pretty smart to try to get ahead of the curve and earn some credit for being sincerely committed to a better outcome. i think that's part of it. but i also had i that it's an effort to try to recognize that there are areas they actually need help with if you think about the issue of harmful content, what are the standards for what exactly suffices as they attempt to develop their own roles they'll

have one side of a community angry about those choices and the other side of the rules, somebody else angry about those choices. you at some point sometimes need standards in order to provide a safe harbor for making an argument that you're in full and fair compliance with the public's expectations. >> michael, you mentioned these four areas basically fit right with what has been kind of out there in terms of what policy makers are looking at. data portability, though, is this one that -- i guess is a little bit less directly related perhaps to facebook's alleged missteps and this is more of a general proetical for the frrnt. would that be a major step in your view? >> it's interesting. i think that one's actually a response to elizabeth warren's call to break the companies up i think it's a recognition of what would be required as a predicate for full competition the accusation is that they are a repository, proprietary

repositories for all this data and that people can't adequately compete, thus they should be broken up. so i think that's an attempt to argue for a condition that would improve competitive choice and i would emphasize it's one of the conditions in the european gdpr that they have to comply with anyway pursuant to those regulations. >> so michael, which regulator does this even fall into >> well, i think that's completely amorphous you know, we have the federal communication commission, whose historical mandate is communications, but frankly curtailed and limited to infrastructure much more than the content side of the communications space it's not clear they're calling for that of course congress would be free to either invest that authority in any of the existing agencies, the likely candidates being fcc or the federal trade commission, or create an entirely new or different regulatory authority but i think at the moment they

make no commitment as to what they think is best >> michael, as we mentioned, he outlined mr. zuckerberg, harmful content election integrity, privacy and the final one, data portability. what was his point on that final one? he said, "if you shared data with one service, you should be able to move it to another." was that something that wasn't quite as soft or as pro regulation as the other points >> yeah, again, i think that one's more about competitive choice i think one of the great criticisms that their opponents point to about their power and their hegemony is that they have exclusive control over the data sets and that any new entrant who would want to compete with facebook essentially has an impossible task baud use have to recreate your friend network, your photos, your postings, and if you were given the tools to move those to a new app i think in his op-ed he talks about as easy as signing into an app and

allowing that data to populate, it would certainly remove a barrier to entry for competitive choice and possibly assuage this energy in the government or political candidates for breaking them up under any trust concepts >> a lot of people think this is a way to deflect from that issue. michael powell, thank you. >> thank you >> former fcc chair. stocks surging to start the year history says corporate profit growth could actually soon bounce back too. up next we're going to break down the charts to see whether that will give more fuel to the rally. and president trump threatening to close the u.s.-mexico border find out what impacthat tcould have on the u.s. economy later on chbl clbl

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global earnings expectations are slowing and only a minority of countries are actually showing positive growth, but that trend could reverse if history is any guide michael santoli at the telestrator with more. this sounds like an upbeat run >> it is it's actually a little bit of a green shoot story, sara. what we're actually looking at here is the three-month trend in earnings estimates so if it's going down, obviously analysts are revising earnings lower. this is the percentage of companies with a three-month earnings revision trend that's positive right? so obviously when times are great at peaks all companies are

having a high earnings revision trend. what i think is interesting is the inflection point this of course is the great recession. that was a very deep trough and it took a long time to come back this is 2011 after the european debt crisisand the debt ceilin sell-off here. that was a good buying opportunity for stocks and this as well as that early 2016 example we keep talking about. another earnings recession took a long time for earn togz come back, back to where they were before here's what's crucial. we see this little inflection going up to about 4% of all countries. stocks bottomed in each of these instances, two months before this point where are we now well, stocks bottomed at this point in december, just about two, three months before so it would be consistent with this idea that the market is sniffing out a return to growth across most of the globe in terms of earnings. >> i guess the key risk to that could be that earnings expectations could be wrong and could turn south again >> without a doubt but when you talk about global expectation spz after they've been coming down for a while,

typically they've overshot and the analysts have to turn around -- of course you've had these sort of false bottoms before in these things so you can't take it as a sure thing that in fact we're on the way back up. but this from key liner at sin truft is a little indication that what the market was trying to signal today is maybe we could look ahead to a better earnings picture may not be totally off base. >> as always thank you very much time for a cnbc news update with sue herera >> hello, wilf hello, everyone. r. kelly's attorney accusing the state's attorney of sumcoming to pressure from attorney michael avenatti in bringing sex abuse charges against the r&b singer in ill i will. steve greenberg saying avenatti's involvement has irreparably tainted the case the national highway traffic safety administration has decided to open two new investigations into fires involving hyundai and kia vehicles this after getting complaints of more than 3,100 fires and 103

injuries the probes cover the model years from 2010 to 2015. authorities say no one was hurt when a small plane landed on a street shortly after takeoff from southern california's long beach airport. the faa says the pilot was the only person on board the piper pa-28. the agency says it will investigate the incident and the leading wildlife protection group is calling global attention to the case of a dead whale on a beach with a stomach full of plastic waste. that whale, measuring over 26 feet, was found dead off the coast of sardinia with nearly 50 pounds of plastic in its belly such a sad story that is the news update this hour, guys i will send it back downtown to you. >> sue, thank you very much for that sue herera up next-s lyft's post-ipo sell-off a warning for other companies looking to go ipo? >> and the upcoming wave of tech ipos could be a much-needed boom for california's budget. deilcongp.tas mi u

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lyft closing down nearly

12%, well below its $72 ipo price. >> what sort of price would encourage you to take some profits? i understand your long-term bull case but given the jump you've had since you invested >> the way we do it is we manage funds. we manage this for our client. so after six months we just give it back to the clients, they can do whatever they want. but in our long-term funds we'll see. we are long-term holders we're going to stay there. we believe in the story. we believe in this whole segment of the market. transportation service is going to be big. it's very disruptive very early stages. it's only 10% of the whole market of the country's using this >> does he still believe in lyft given today's stock move santosh rao from manhattan venture partners is back with us good to see you again. >> thank you thanks for having me >> what do you think is driving the selling today? given it was oversubscribed and people like yourselves are locked up for six months >> that's fine today's action is really a

reflection of the ipo process. it's not a reflection to the fundamentals of the company. transportation as a service did not change since friday. it's still a great segment it's a growing market. it will get bigger and bigger. i don't think the fundamentals are reflected in today's price action you'll see some gyrations here and there. the dust will settle at some point. i thought the initial price range of 62 to 68 may be at the higher end 68 was very reasonable the extra was unnecessary but the bankers know best how to do it there are always winners and losers i guess the company won, the bankers won. the early investors, the retail investors lost a little bit. but i think it's too early to say it's a panic, to pull the panic button yet the fundamentals are still intact there's a long way to go >> the fundamentals, part of that is very big losses. and there are all sorts of questions about the path to profitability. jim stewart, "new york times"

columnist, kept saying this is a story-driven stock, it's all about the narrative and the sort of revolutionary product and the new industry that this is creating i mean, that sounds like a strategy >> anytime you have a consumer facing company, the b to c company, it's so much volatility and so much hype around, it you're going to see this action, price action a lot of it. so like he said, this is a long-term story. it's not one-month story, not a two-month story. you really have to wait it out at least till the first quarter. let's see how the first quarter comes out. let's see the trends are they holding on to the trends it's too early to just kind of say this is over today's price action is not a reflection of the company. >> to that point about the first quarter because i do think an emerging growth company when it goes public, investors have to get used to exactly what they're going to be judged by. so what are the metrics that you're going to be keying off of when they first report for example, twitter first said value was on user growth and

then no, maybe not what are you going to be looking for? >> i'll be looking for gross bookings active riders. hopefully they report back and i want to see an up trend there. i want to see revenue per ride, see that up trend there. and i want to see the operating metrics. i want to see the sales and marketing that were trending down i want that to continue down there will be a little bump because of the ipo costs and the public market costs. that's understandable. if they can explain that and keep the long-term story intact, the story's still very much intact >> you mentioned that the retail investors had lost from the first two diays. we didn't know where we'll end up months from now you know much more, the company knows much more, the company knows much more than the retail investors do the hype which even you said was a little greedy. is there a problem with that process? >> it is a big problem i would think people will have learned by now because we've had so many cases where it happens, it goes up and comes down. but tough an early investor, be ready to stomach that. it's not for the faint of heart.

no ipo is for the faint of heart. leave it to the professionals to do it. and that's a very well-known story. it's very well telegraphed up front. but people get in. they don't want to miss out. they feel maybe it won't come back they just want to be part of it. they don't want to miss the next facebook, the next google, the next amazon. they just want to be in. there is some disconnect in terms of communication when it comes to that. >> santoss rao, nice to see you again. >> thank you >> up next the ipo effect. why the state of california could benefit from the recent rush of public offering. plus a fast food double play burger king shaking up its menu while mcdonald's has gotten itself in quite a pickle with customers overseas we're back in a couple of minutes. ♪

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he. welcome back here's what s on the "closing bell" radar today this is a big deal burger king making a move that just may win over a surprising group of customers vegetables and vegans. burger king saying it's testing a meatless version of its whopper using impossible burger patties becoming the first national fast food chain to sell a fast food burger to announce the launch burger king released a video showing burger king fans trying the meatless burger and saying they can't even taste the difference. some people joking it's an april fool's joke. it's not it's actually burger king chasing a really important part of the market and a really important customer it's just an unlikely sort of chain to do it because they've just been known for the whopper and the meat >> the extreme meat stuff. >> i don't know what it says as

well about the quality of the whopper if people can't tell the difference but i'm giving them the benefit of the part. >> that was the jokey part that they couldn't tell the difference >> veggie burger what's wrong with that >> there's nothing wrong with it >> they didn't have this back when i worked at burger king >> it's interesting. to your point that a lot of jaejtz saying they hope it's an april fools. switching to a different burger chain on the note of april fools, mnltds mcdonald's had a prank out that left some customers where the prank was played, australia, feeling fairly sour. the fast food chain posting video of a new offering, the mcpickle, which consisted of burger buns filled with pickles, cheese and ketchup i actually think it looks pretty good i agree. so some people were not happy with the prank at all. but i'd go for it. >> it tells you, though, how outlandish you have to be if you're in fast food to actually get something that's supposed to be a joke. >> in general. >> because almost anything is

plausible. >> social media has sort of made it very hard to distinguish what's april fools and what's not. >> without a doubt not related to fast food, the recent rush of companies planning to go public is not only good news for their investors, it might provide a tax windfall for the california state government california already expected to collect about $13.8 billion from capital gains in general but that number could materially increase lyft's ipo last friday valued at more than $20 billion. other potential ipos expected this year including uber and slack both based in california could bring in even more tax dollars. it's actually kind of amazing. they essentially have a reserve fund, to have a surplus and overage they're allowed to set money aside. it shows a high tax state actually makes money on stock market booms >> but silicon valley's quite a unique example i don't think they'd have any other examples >> they're also thinking about a huge rush of million dollar-plus home sales cash sales happening as soon as

all these -- >> newly minted millionaires >> which is going to distort the market entirely. yeah >> some stimulus for california. still ahead, new data shows a slew of americans are now managing their own money but should they be doing that? we're going to discuss that. >> first, trump threatening to close the u.s.-mexico border this week. the major money impas tt ctofha if it happened when we return ent from national. it's kind of like playing your own version of best ball. because here, you can choose any car in the aisle, even if it's a better car class than the one you reserved. so no matter what, you're guaranteed to have a perfect drive. [laughter] (vo) go national. go like a pro. see what i did there?

welcome back president trump doubling down on his threats to close the u.s.-mexico bodder what could that mean for the economy and the tremendous trade that goes back and forth kayla tauschi is here with more. kayla. >> sara, even without closing the border the trump administration's reassigning of 750 officers away from ports of entry is already having an

effect on the legitimate trade and travel between the u.s. and mexico customs and border protection sent a memo friday to carriers and importers that cnbc obtained and it says to lessen the impact ports are realigning their workforce and limiting or discontinuing some services. and that some services and they'll continue to monitor the situation to restore services as soon as operationally possible business groups are bracing for a potential slowdown or stoppage of the $1.7 billion of cross-border trade each day. the fresh produce association and the u.s. chamber of commerce warn about the uncertainty and potential disruption to supply chains and rising prices for consumers. the actual cost is unclear until it's known how many of the 330 ports of entry would close and for how long, but one in san sid row, california, closed for five hours in november and kamala harris tweeted that that cost $5 million for just five hours. this time no one knows the white house is telling trade

groups that the president is serious, but the office of texas congressman will hurd, who represents a third of the border, says they've been told nothing so far >> kayla, is this likely to materialize? >> as with everything that president trump does, there are some critics who say it's nothing but bluster and some supporters say he's serious and it's necessary as a way to force mexico's hand to help with what they call a humanitarian crisis at the border. only people inside the president's mind know what he will actually do at the end of the day and there's just one person who can tell you, will. >> does it impact his lobbying efforts to get the u.s.mca passed which is in full swing right now? >> it's if nothing else a distraction. it had been thought that perhaps the biggest domestic hurdle for the usmca would be nancy pelosi and what her price would be to put that deal on the floor but president trump could be his own worst enemy here, if he continues to push for the border

closure further distancing mexico from ratifying this deal too. >> okay, kayla thank you very much for that up next, managing your money. fresh data shows most americans are now overseeing their own finances, but is that actually a good thing we'll discuss when we come back. and one top strategist says new highs are ahead. choosing my car insurance was the easiest decision ever. i switched to geico and saved hundreds.

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let's take a look at how we finished up the day on wall street, very strong start to the second quarter, the dow closing higher by 330 points up almost 1.3%, the s&p 500 combining almost 1.2%, financials and industrials were up higher small caps underperformed, up 1%, investors teeing off of what was better than expected data from china overnight and the manufacturing weaker than expected retail sales. >> it is the start of financial literacy month here on cnbc, partnership with acorns, the savings and investing happen, how americans handle their money. it's part of our initiative called invest in you -- ready,

set, grow. a surprising finding, most people no matter how old manage their own fund we've looked into the details. >> it's always important to have a plan in place to meet your financial goals. from building an emergency fund and retirement savings to buying a home or saving for college a financial adviser can certainly help you come up with a solid plan, yet this survey conducted by survey monkey found only 17% of americans use a financial adviser. 725% of americans manage their own money. the do-it-yourselfers span generations. less than one-third of older americans work with an adviser opinion 69% of those age 65 and older manage their money on their own. as do 78% of 45 to 625-year-olds and 82% of millennials, who are 25 to 34 is flying solo really the best approach to help you save and invest that's a personal decision and it often depends on what you can afford. free and low-cost tools from

online of scrimmage budget and savings apps can offer the help you need your company may even provide some options yet these tools cannot replace the human perspective. for many people, a critical aspect of financial planning is keeping emotions in check. and for some, having a person to confide in may be essential to staying on track back to you. >> sharon epperson for more on the story, head to cnbc tot come/investinyou. good idea? >> i think it's a good to consider getting help if you have enough complexity in your financial might have, yes. in fact, the last thing sharon mentioned there, you talk to a financial adviser, most of what they say they do for you is to keep you focused on the plan, on the longer term, and to kind of manage the sort of behavior aspects of investing, not as much really about outperforming the market or selecting products to invest in >> i've always been aware, given my background, of how much more america is interested in capitalism and the stock market

and owning stocks and knowing what's going on there than europe as a whole. 725%, though, managing their own money, whether that's cash and bonds or actually individual stocks or not is quite an eye opening statistic. >> it's big number, but not terribly surprising because i don't think most people have an amount of investable assets that it seems like it's something that they need help with maybe that's one reason for it it is interesting because even the big financial services firms understand there's a kind of a graduation process it seems fine to do it yourself for a while. many, many apps, do it yourself services let you take control of it, and at a certain level almost everyone feels as if they need some kind of guidance >> let's switch focus to what's coming up tomorrow, sara and i both going to washington i'll have an exclusive interview with bank of america chairman and c.o.o. brian moynihan, 12:00 p.m. eastern time, a great time

to be speaking to him given the bank's sell-off, the downgraded data and yield curve expectations >> i'll be speaking with christine lagarde. the chairs of the cftc that is three powerful women in finance on equal payday. sorry to outdo you, but we're both going for worthy reasons. >> absolutely. >> you'll guys lch it all sorted out, the global growth picture and the outlook for banking. >> and switching pack the focus to markets today, great start to the second quarter >> very good start i think essentially the pendulum had swung far in the direction of growth is challenged, bond yield is low, and we got a little relaxation on both fronts we are going to get more important macro numbers tomorrow, durable goods coming out. >> durable goods, auto sales, jobs this shows us the market is sensitive to the data right now,

looking for some clarity >> i think at this point it want bs better news we're not wishing for the economy to really struggle >> that does it for "closing bell." thanks for watching. >> "fast money" begins right now. >> "fast money" starts right now. overlooking new york city's time square, we have our panel with us check out shares of lyft in reverse today, the hot ipo looking not so hot we'll tell you what's gone wrong with the public debut. and stocks surging today and double-digit gains for the year, but the chart master says a number of names have come too far too fast and we start right there with the market rally, the dow rallying 300 points to kick off the second quarter, now above 26,000 back within striking distance of all-time highs and it was the financials leading the way, the group on fire the best performing sector today up nearly 2.5% climbing out of correction territory. check