a tricky one to figure this out. we focused on a lot of earnings one to watch will be xylinx. one of the pure play chip stocks out there. texas instruments had nice trading today on the back of disappointing earnings and that's trading well. we'll see how this group reacts tonight. thanks for watching "power." "closing bell" starts right now. it is the final hour of trade. i'm sara eisen >> i'm wilfred frost the nasdaq hitting a record high intraday we'll see whether the tech-heavy index can pull off another record close >> and the december lows spooked some td ameritrade clients the ceo joins us to talk about whether these record highs could be good for his business and bring the retail investor back >> and facebook, microsoft, chipotle, visa, paypal amongst just some of the names we'll break down the impact of those earnings when we get them. the "closing bell" starts right

now. ♪ >> welcome to "closing bell. take a look at the markets as we enter the final hour of trade. little change which means any close higher for the s&p and for the nasdaq composite would be a new record high close. did breach that nasdaq intraday record it's the strongest the tech-heavy industry index of the bunch. holding the highs. >> for the dow 26828 it would have to be the dow flat doesn't look like it will have a record close the nasdaq looks like it will and the s&p needs fractional gains for a record we'll be joined to hear how he's handling growing competition from other airlines like southwest in its backyard let's drill down on three earnings movers.

morgan brennan following caterpillar's results. julia boorstin has at&t. phil lebeau, the latest on boeing morgan, let's start with you >> you were doing that market check. in terms of the biggest drag on the dow, it's for the most part been caterpillar today with those shares down about 2%, almost 3%. a beat for the economic bellwether as revenue jumped 5% on higher demand for mining and construction equipment mining was the bright spot as revenue jumped 18% but the main focus for investors has been construction sales. so cat's biggest unit, those were up 3% you did see strength in north america. a lot of state and local infrastructure spending despite uncertainty at the federal level. but china, this was the big thing investors have been watching 10% of overall sales once again seen as a pain point cat saying that it expects industry demand for construction in china to rise slightly this year though its own growth is expected to be flat. that's because it expects to

lose some market share amid competitive pricing. now factor in higher costs for labor, freights and raw materials. that's helping dense margins also a raised outlook but that's due largely to tax benefits here in the u.s that's why the stock is trading lower today. lastly, something to watch that i think has been overshadowed because of that talk around china. caterpillar has 850,000 machines that are connected to the internet globally up from 700,000 last year. machinery sales, very cyclical, but this digitization progress is part of an ongoing shift by the company into services to help smooth that out we talk about the internet of things this is the industrial internet of things and caterpillar is working and deploying more of those technologies around those big heavy equipment sales that it is driving right now. guys, back over to you >> morgan, thank you for that. turning to at&t dropping today after reporting results before the opening

julia boorstin has the latest. >> hey, wilf it's interesting if you look at what's behind the miss the wireless unit added almost double the number of subscribers than analysts expected but that number -- that unit's revenue declined because of promotional discounting around getting those subscribers to sign on. now direct tv and its streaming service directv now both lost more subscribers than expected while they've been trying to reduce their reliance on the phone business with the acquisition of time warner, that new unit, warner media, saw expectations fall short. the ceo stevenson facing questions about at&t's streaming service in the works and all the competition for that stevenson saying that he's impressed with the recently unveiled disney plus and the reaction is a good sign for at&t >> and i think what it did is gave the market an appreciation that this is a viable direct to

consumer product that will have good appeal for a broad number of customers >> addressing concerns about at&t's debt load, stevenson also pointed to at&t's sales of its hudson yards stake announced just yesterday, as well as its sale of its stake in hulu. that 10% it owned of hulu saying those two sales are valuable progress towards helping pay down their debt. guys, back to you. >> julia, thank you. wall street also closely watching boeing today. it's helping the dow following its first earnings report since the ethiopian airlines crash in march and subsequent fallout phil lebeau has the key takeaway from the report. >> shares of boeing moving slightly higher after they met expectations on the top and bottom line. the focus is about the 737 max and the impact on the first quarter and going forward from here in the first quarter, cash flow due to the max, no deliveries in

the second half of march down 15%. the production rate changed down to 42 planes from 52 a month that's going to cost them a billion dollars over the life of this program they'll account for it over the next several years in terms of the lower production rate, that comes as the company said today they're not sure when they'll be ready to submit a software fix to the faa. the airlines are expecting it to happen by this summer. on the conference call, i talked with the ceo dennis mullen burg and asked him, how do you reassure travelers the max will be safe when it's approved to fly again. >> we know it will take time we have to earn and re-earn the trust of the flying public and that's work ahead of us, and we take that very seriously. >> and just a few minutes ago, we talked with oscar munoz, ceo of united. he said we're going to have to work with the passengers when the max comes back shares of boeing moving slightly high are

back to you. >> phil, thanks for that joining us, jack caffery, christina hooper and rick santelli at the cme in chicago as always. christina, i'll start with you how do you rate earnings season so far and is that what got us to these record closes yesterday? >> earnings season has been better than expected but it is far from over. and so i would expect that when we finish, it will be better than expected because expectations have been diminished all in all, it will be somewhat mixed. and so we have to be prepared for some disappointments coming. >> jack, if i'm sitting at home and i've seen this tremendous rally up 17% for the year but have been too nervous about what happened at the end of last year -- >> right >> -- to get into the market, is now too late >> i don't think now is too late but as kristina pointed out, you've just mentioned, we've come a long way and come there quickly. we'll get a chance to basically see markets maybe moving more

sideways in the shorter term but we do have gains still to come over the course of the year as investors think about 2020 earnings over the next two, three months that lens is going to shift from what we saw now to what we'll get next year. >> where are cash levels at jpmorgan private bank? >> cash levels are low, at least in terms of the portfolios i pay the most attention to on a daily basis. and we find that timing is hard. timing is really a two-part position it's when do you sell? when do you reinvest we'd rather think about taking that longer term perspective and trying to compound within markets overall. >> you sounded a little bit nervous. is there something that worries you on the corporate front when it comes to the earnings >> i would say i'm not nervous but i will tell you that i do believe that investors seem to have gotten a bit too excited about this earnings season now, of course, earnings are being looked at through a rose-colored lens just given the fed's abrupt change in monetary policy stance. and that has something to do with it. but i just believe there seems to be a bit of animal spirit in

markets right now. and we're probably going to be in for a period of digestion just because stocks have gone up so much. >> so the dollar is above 98 right now. various big moves from the canadian dollar, aussie dollar, euro/yen what's moving all of those things >> you know, it seems so counterintuitive interest rates going down. you have stocks going up, at least for the most part. they are at lofty levels and the dollar zoom, zoom, zooming. where it sits now would be the best close since may 2017. consider some of those pieces. we talked many times in order to get the dollar index to really push through 97 you had to have the euro currency under 112. it is. way under 112. i'd put it this way, wilf, keep it simple. you have to be buying treasuries you have to be buying stocks to enjoy all-time highs what are you buying both of those with the dollar why would you be doing that? well, maybe open up a newspaper

in europe, japan or china and we can make an argument china may be doing better. they got an injection of the drug again maybe they'll do better. maybe trade will fix it. i do believe it will but in the final analysis, it's very difficult to get too excited about investments outside the u.s. even questions about the sustainability of investments in the united states. but while it continues and momentum is in favor of the up side, i think the dollar in stocks are going to side together and i do think that the demand side of interest rates will hold up a bit push yields lower but, in the end, i think 230s, low 240s will be about it. we'll have to wait and see >> so the money is rushing here, jack, into the u.s stocks and bonds, as rick said which groups of the market we'll get a bunch of earnings today. microsoft, tesla, chipotle what's going to be the tell in terms of leadership for this market >> i think the market is in some sense, it's a technology driven

market 21% of the s&p you add some of those former technology companies that have become communications companies and you talk 30% of the market is effectively if you want continued corporate spending in term of how do they become more productive they are effectively the s&p if you don't like tech, it's hard to like the market. >> are you talking about chips >> the dominant part of the technology index is actually software really leveraged to this corporate spending issue, the idea of the cloud and how do companies become more efficient. semiconductors have had a great year and when you wind up looking through, i think it's been a question of companies saying the world is better, but let's recognize that we have come a long way quickly and that we are not necessarily -- we are and will remain a cyclical business. and you saw cautious comments out of texas instruments >> do you want cyclical u.s. exposure, sectorwise, or slightly more defensive? >> i would like to be more

defensive. we are in an environment where we're likely to see some modest diminishing of growth throughout the year in the u.s. and so in this environment, i think we'd want to focus on the defensive, the growth names. i agree with jack that tech looks very attractive for investors in this environment. but don't forget income. we have to focus on dividend-paying stocks as well just because we're in an environment where lower is going to be for longer >> guys, we'll leave it there. thank you very much. jack and kristina and rick santelli facebook shares have shaken off a flood of controversies this year. but are users sickened with the company? >> controversies >> well, maybe we'll find out i do think i get that one wrong. 1 out of 100 that i get wrong. we'll preview those earnings after the bill hawaiian airlines parent plunging on the back of its earnings report. we'll talk to the ceo about the

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welcome back to "closing bell." just a little over 40 minutes left of trade here dow down about 19 points what is driving the dow? disney, nike, mcdonald's travelers, p&g the winners losers in the energy patch chevron, caterpillar, dow dupont all dragging on the dow. interestingly, boeing is helping after those earnings are being digested by wall street. dow not at a record high like -- >> 0.7%. >> you just did the calculation, thank you. the dow -- >> as requested. >> 0.7% away >> ask and you shall receive shares of hawaiian holdings are down sharply today despite beating earnings estimates the airline facing growing concern about increased competition and margin pressure. hawaiian airlines ceo peter ingram join us in a first on

cnbc interview thanks for joining us. good afternoon, peter. >> my pleasure good afternoon to you. >> so what was the reason behind this margin miss which a lot of the analysts are focusing on in particular >> well, i don't think in terms of the earnings reported yesterday that we missed on anything on our relative to the expectations at the beginning of -- >> sure, margin decline then year over year by 4.4% compared to last year >> sure. i mean, the -- we're obviously in a different competitive environment today than we were a year ago that is not surprising given the success we've had. sometimes that attracts more competition. we've seen capacity grow in our markets, but i think if you look at us on a relative basis to our competitors, we continue to generate a revenue premium, and i think we're well positioned for success for the long term.

>> one thing that's got a lot of focus for you is the competition you are now facing in your backyard from southwest. just about six weeks ago, i sat down with gary kelly, the ceo of southwest and asked them about their move into routes to hawaii >> we do have a lower cost structure than all of our competitors that fly to hawaii so we'll absolutely have a southwest effect i think the other thing that people are missing is our customer base. we're the number one airline in california and a near 70% share. they are our frequent flyers they want to fly their favorite airline to hawaii. now we're going to give them that chance. >> peter, how big a blow has that been for you? >> well, you know, we're no strangers to competition hawaiian has been compete with some of the largest airlines in the world for many, many years and competing very successfully.

and our formula is to really focus on the needs of people traveling to, from and within the hawaiian islands and when we compete on that basis, we've got a product and a service that is perfectly tailored for that. our employees do a terrific job. we are always very high in satisfaction rankings, on-time performance. we've been the leader for 15 consecutive years. so we're ready for competition southwest is just the latest to come into the market, but it's really not anything new to us. it's just a different competitor that has decided they'll fly to hawaii now >> still, it must mean lower average ticket prices, right, when you have someone like southwest flying california to hawaii how much lower have you had to lower airfares >> well, our fares are competitive and they're set in the marketplace. and certainly when capacity comes into the market, that puts pressure on pricing, just the laws of supply and demand

working there. last year we saw more capacity in the market from carriers like united and delta and american and we grew our capacity as well and we're growing this year because we see opportunities to be successful. we just launched a new service from sacramento to maui earlier this month we launched new service from boston, which is our 13th gateway from the continental u.s. which is more than any other carrier. so we're positioned to succeed and we're ready to compete >> peter, talk to us about the balance between boeing and airbus you've retired the boeing 767 from your fleet, and taken on more of those from airbus. is that a trend that may continue less boeing, more airbus and how does the recent issues affecting boeing affect your decision-making? >> yeah, we have and we do operate aircraft from both

manufacturers on our neighbor island flights within the island of hawaii. we fly the boeing 717 aircraft we've got aa3-3200 and are addig neos for the west coast service. starting in 2021 we've got an order for 10-787-9s. we've got confidence in both manufacturers for us specifically, it really comes down to, we fly very -- very unique markets we've got short haul flights then we've got nothing in the, you know, 800, 900, 1,000-mile range until you go our flights from hawaii to the west coast for about 2500 miles and we think the 321 neo is the right one for that and the 787 for the long-haul flying that's why we'll be going in that direction starting in 2021. >> so the 737 max issues that boeing has faced don't make you concerned about any of their

other planes >> no, we've got confidence in, as i said, confidence in both manufacturers. i think both of them are very focused on the safety of their products and certainly boeing will work to address the issues that have been raised with the 737 max. but i have confidence that they will put the appropriate focus into that, and they will rectify that as soon as they can >> do you still offer free rum punch on those flights >> we do we have the koloa rum punch from the island of kauai, and we have a complimentary alcoholic beverage for every one of our guests throughout the airplane, provided they are over the age of 21. >> there's your competitive edge >> there we go >> an extra reason to try hawaii >> peter ingram. >> that's what we call authentic

hawaiian hospitality >> fully outfitted in the hawaiian shirt today thank you. by the way, tomorrow on "squawk on the street," an exclusive interview with the ceo of southwest airlines, gary kelly coming up, 9:00 a.m. eastern tomorrow off earnings when we come back, lululemon's new ceo laying out his top priorities for the company at the analyst day, including one way he's planning to take on nike. that's next. plus, elon musk touted tesla's futuristic technology earlier in the week. >> i feel very confident predicting autonomous robo taxis in the next year >> but today, it's all about earnings we've got an all-star panel ready to break down the report as soon as it hits

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welcome back here are some companies that hit all-time highs during today's session. dollar general, norfolk southern, mcdonald's, costco, all moving more than 1% higher norfolk southern holding on to 2.5% of gains. as we stand, the dow is just a little bit lower we have got slight declines for the s&p and nasdaq composite as well, which means no fresh record all-time high closes. >> not yet we still have more than a half hour left. >> i understand how it works >> sneaker giants like nike and adidas will soon see another competitor enter the mix

lululemon. the new ceo calvin mcdonald announcing the company plans to start making its own footwear. this is part of the growth plan which was unveiled at the analyst day. first time they had that in five years. the first priority they laid out, product innovation. i mentioned sneakers also lululemon plans to double the men's business by 2023 and also continue to expand women's by pushing into further -- pushing the company into new products like accessories and self-care products like shampoo and deodorant. the athleisure company planning to double digital revenues by 2023 and expand its physical footprint. expecting to quadruple its international revenue in the next five years. the takeaway, this is a stock that's jumped more than 80% over the last 12 months it's been showing outsized growth for the city. men is where the real growth is for this company doubling that business, it's very interesting because for nike and underarmour and adidas

it's all about growing the women's business the men's is already the dominant part of their business and they have to figure out new styles, new sizes and fits for women. with lulu, it's the opposite >> the shoes a real threat to nike and adidas. slightly different branding. >> any competition that enters the market, a little bit of a threat lulu has got what it nails, it understands its customer and has an ethos and psychology behind its business that whole zen yoga mindfulness that they really speak to their consumers. so if they can achieve that across different categories, it's risky because they have to maintain that kind of appeal people pay premium dollar for this stuff, but that's the growth plan. be sure to catch our exclusive interview with the ceo of lululemon, calvin mcdonald this will be his first tv interview since taking the job, tomorrow at 10:00 a.m. >> can you tell him his pants aren't long enough >> they discriminate against your height? >> no option to go --

>> they are like capris? like short pants >> i don't know if that's what they're called, but they're too short. >> usually men love the fit. >> short men >> interesting special sizing up next -- market fears taking a bite out of investor engagement last quarter. for td ameritrade. we'll talk to the ceo tim hockey about the earnings and whether sentiment has changed now that we've reached record highs for stocks through the at&t network, edge-to-edge intelligence

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welcome back to the "closing bell." we're seeing some pockets of strength in this market. it's a little more defensive in tone today real estate and utilities, traditional bond proxies, are leading the market today technology, though, not far behind consumer discretionary higher in today's trade. energy is the biggest loser down 1.5%, despite that new hostile bid by occidental for anadarko this morning time to get a cnbc news update with courtney reagan >> good to see you here's what's happening at this hour ambassadors from the 12-country lima group walked out of the u.n. general assembly as the venezuelan foreign minister was speaking the group which includes argentine abrazil and canada

repudiates the government of venezuelan president nicolas maduro cameras captured the moment a fire caused a building in wisconsin to completely collapse the fire started this morning and then slowly the building collapsed as firefighters battled the blaze. one firefighter suffered minor injuries residents were successfully evacuated. exploding manholes injured at least four people in new york city one explosion was caught on camera behind a local news reporter no word on what caused the explosions and the pittsburgh steelers giving quarterback ben roethlisberger a new two-year contract extension to go with the one-year he had left on his current deal it all but guarantees big ben ends his career with the same franchise that drafted him in 2004 details not released congratulations to my fellow miami university redhawk that's the cnbc news update at this hour. back to you, wilf. >> court, thanks look at some of the individual market movers today

anadarko petroleum so much talk about this all day and last week as well. up some 12%. trading at 71.6. chevron last week they did 63.15. occidental making a bid today. anadarko, obviously, opted last week for the chevron bid even though the price was lower, the cash portion also lower. nonetheless, that's what they opted for. we'll see what the board says. helping the ox dental one's case is theirs was down it's improved, now down less than 1%. less shares in their offer than chevron's, but still some so that's all relevant. let's look at domino's as well expectation was 2.09 revenue just behind same-store sales growth just behind but the market focusing on the eps beat. hence shares are up. only 5% as we approach the close. up 7% or 8%. goldman sachs as well. that's down 1.3%

that's on news that the doj is seeking a guilty plea to the one ndp. the goldman sachs person saying they don't believe such a charge would be warranted by the facts because senior management was unaware of the criminal activity of these rogue traders i've spoken to some people at the company. we're not aware of what's going on inside the doj, what they'll see that the conversations have not started yet with the doj no negotiations and either way they're confident they won't have to go that far. the negative here then if that's true, either way, clearly not near the end of a reslulolutionf all of this and maybe the fine will have to be bigger the stock downing down 1.5%. sara >> shares of td ameritrade also on the move today, lower after reporting its second quarter earnings after the bell last night. joining us in a first on cnbc interview to discuss the current market environment is tim hockey, the ceo of td

ameritrade welcome back nice to see you. >> good to see you, too. >> some of the numbers on commission and average client trades were down during the quarter. >> right >> what did you see? >> it's a tale of two quarters this most recent one, of course, was the one ending march as we all lived through the tail end of calendar 2018 was quite a drop and this past quarter, a rise back up. in our business, that means a couple things. hugely successful first quarter, right, being the last quarter of 20 2018 huge tried volumes and then what we saw in january as the market started to climb back up, our retail clients were more resistant to getting back in the market, believe it or not. a little more careful. vix dropped dramatically trade levels dropped as a result this deep v was quite a story. it had an impact on revenue growth >> what i'm trying to figure out is just how much retail investor

participation there is right now in this market as we reach record highs >> well, our most active traders are trading a little more -- little less than they would normally our more casual investors and traders are sitting on the sidelines opportunistic about going in but -- >> opportunistic or worried? >> a little of both. depends on who there's less activity certainly as you see the vix itself is low. but the actual trade levels are still down just announced trade levels to about $800,000 that may be getting a little back into normalized range but, frankly, there's a little less trading this year because we saw the activity we did in the tail end of last year >> december was brutal we were sitting on this desk on a day like christmas eve you won't forget it. that was a hideous, fast, precipitous decline. what sort of damage does that do psychologically for retail investor >> small dips. this is the longest bull market. small dips are normal. when you saw such a significant drop in relatively short period of time, that was impactful on

people who haven't lived through it younger generation of investors and traders would say, need to think about that others say this gives me an opportunity to buy they stay in but the average retail investor is thinking back and saying, okay, some of them are moving more to cash, higher yield instruments, less volatile instruments as they assess their portfolio in light of that market on the other hand, the irony is we're right back up to record levels >> does that draw people in? >> i think it does hey, we're back at record levels some investors see something like december, they say i don't want to look at my statement for a couple months. then they see the headlines and, what just happened the last couple of months we're at record levels again it's the old adage of stay in the markets and over time, you'll be well rewarded. >> i wonder if you're having trouble getting retail participation from the younger cohort you mentioned millennials and their skittishness around moves

we've seen >> somewhere about one-third to maybe 40% of our new account openings are for millennials they are clearly interested in the stocks they know they like to trade the most active faang stocks. they're interested in crypto they're interested in cannabis stocks it still makes up about -- those two categories make up about 6% of our trades even in the last quarter. and that's significantly down from where it was at the height of its craze there's still significant interest right now, even in light of what happened last year >> tim hockey, thanks for joining us up next -- we will look at how the recent rally compares to doomed rallies of market past. plus, we're counting you down to a parade of earnings after the bell key metrics to watch from all the headliners including facebook and microsoft and the nasdaq composite hitting a record intraday high here are the biggest winners in the nasdaq 100

"closing bell" will be right back we see access to fresh food being the global norm, not the exception. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

dow down 36. a market flash on shutterfly seema mody with the story. >> shutterfly has resumed for trade up more than 9% after

private equity firms are said to be considering a bid for the company. that's according to bloomberg citing sources familiar in early february shutterfly announced it formed a strategic review committee after being approached by potential buyers keep in mind even with gains following this report, shutterfly stock is still down nearly 50% over the past year. wilfred? >> seema, thanks for that, up 11%. now we are on record high watch after the s&p closed at a new high yesterday mike santoli is back he's at the telestrator with a look at if this rally might or might not hold >> it's the obvious question when you look at a two-year chart of the s&p 500 as to whether we're just building a third summit in this market. you see offer the past 15 months a very slight up trend they are within about 2.5% of each other we've traveled very little net distance with a lot of drama in between. there was an acceleration higher

in the last four to six weeks of these prior rallies. less dramatic into the september peak this is january 2018 that's september 2018. and here, of course, this very strong rally but it also did go a little more vertical in the last several weeks valuationwise, forward multiple on the s&p 17 times in september. 17 times right now here it was 18 times plus. so essentially much more expensive when we're pricing in the big ramp in earnings all of these have to make you ask the question, is it building into something similar here's the difference. you have this 15-month base. you can basically look at this long period of time and say the earnings in aggregate of higher. lower bond yields than we had back in september. so it all seems to be okay for now but you have to be on watch given how far it's travelled in a short amount of time >> what the mentality is to what the fed is doing on each of those points because, clearly, that's relevant or the discount

rate is or which direction the discount rate is headed. >> the view of the fed seems important because economic surprise index, the economic data had been weaker the mark set not tracking that it's tracking something else which is financial conditions being very easy right now. >> there's this idea that the fed has our back >> that's right. and a certain point here, it switched when essentially worse economic data was okay because the fed for now is putting the market in the sweet spot >> see you at the top of the hour we have 15 minutes left of trade. the dow down 22 points as you can see. s&p and nasdaq just fractionally lower. also the russell up 0.4% we're on earnings watch. our reporters standing by to bring you what to expect after the market microsoft, tesla and more report their results. and tomorrow the cnbc stock draft kicking off. it's bigger and better than ever it's a "power lunch" event at begins at 2:00 p.m. on cnbc.

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welcome back to the "closing bell." 12 minutes left of trade

here's where we stand. we are just low on each -- >> it could go either way. >> s&p, nasdaq, would be record all-time closes if they got into the green. the dow is still 0.8% from its own record all-time close, which stands at 26828. >> and we've got a parade of earnings coming your way after the bell our reporters are standing by. julia boorstin on facebook, josh lipton on microsoft, phil lebeau on tesla, kate rogers on ch chipol chipolte, seema mody on visa and paypal >> we'll see how fast facebook can keep growing in the wake of negative headlines about everything from data privacy to inciting violence on the platform a key number to watch is daily active users they are projected to inch up to 1.55 billion also watching revenue growth

growth is expected to decline to the slowest pace since the company went public 25% revenue growth we'll see how that number affects average revenue per user and with ceo mark zuckerberg talking so much about investing in protections for the platform we're listening for updates to growing costs. wilf >> julia, thanks for that. to josh lipton on microsoft. josh >> here's what we expect when microsoft reports eps of $1 on revenue of $29.8 billion representing gains of 5% and 11%. keybank's brent braceland thinks the cloud business will jump 43% to $9.7 billion pushing the cloud mix to a record 33% mix of revenue. he sees azure growing. last quarter from windows devicemakers did fall 5% >> phil lebeau watching tesla. what do we expect here

>> tesla is expected to report a loss for the first quarter but the three things that investors will be focused on, first of all, what was the cash burn in the first quarter. where does liquidity stand will tay talk about potentially raising capital? production guidance, does that get altered and the third thing, the most important thing, what the demand for the model 3 you can bet there will be plenty of questions about that during the conference call at 5:30. >> phil, thank you kate rogers is watching chipolte >> analysts are projecting the company to report eps of $3.01 on revenues of $1.26 billion same-store sales expected to increase by 7.3% outside of that all-important comp number, all eyes will be on digital growth for this brand in q4 digital sales grew to 12.9% of the company's overall sales ceo brian nichol continues to place emphasis on growing that part of the business the stock, too, up over 60% year to date. it's the best performer in the

restaurant space back to you. >> thank you, kate we'll look forward to your interview with the ceo tomorrow. to seema mody for a look at what to expect from visa. >> the first thing to watch will be growth overseas and if visa can continue to expand its geographic footprint. the biggest international market is asia. analysts will also be looking out to whether visa is seeing an up tick in cross-border spending and collecting higher fees and third will be any comments on the competitive landscape after apple announced plans to unveil a line of credit cards and venmo in talks with banks to issue a branded card they are trading near all-time highs. >> seema, thank you for that let's get to deidre bosa looking at paypal. >> there have been some concerns building around whether it can keep up the pace of the growth and make money from venmo.

paypal has been slow to monetize that p2p app it could take as long as two years to do so the bigger paybalgrowth picture is hit something snags investors will be looking for evidence paywal pal can justify the year to date gains >> thank you all very much we look forward to those numbers when they hit the close which is seven minutes away we'll have the closing countdown. >> after the bell we'll break down those earnings with an all-star panel the earnings party just getting started. "closing bell" will be right back dow down about 54 points, seven minutes to the close i consulted with your grandmother's doctor. we can do the screening at her house. hi.

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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. the nasdaq hitting a record intraday high earlier today. let's go up to uptown to bertha coombs for more on what's driving it >> we seen a bit of a fade in terms of the nasdaq and nasdaq 100. on pace to break an eight-day winning streak and microsoft really is one of the exemplars of what happened today. microsoft hit an all-time high

ahead of earnings and then just faded as the day went along. we've seen the chip sector continue to outperform on the back of texas instruments, better than expected earnings results and all-time high for that sector with historic highs as well for analog devices kla-tencor and xilinx on tap to report and the consumer discretionary sector seeing historic highs ebay having its best day today in three months. and we're seeing new highs today from costco and the likes of ollie's outlet back to you, wilf. >> we have just under three minutes left of trade. we're not going to hit record all-time high closes for the nasdaq and s&p which are both just lower the dow also lower, of course. 0.8% from record all-time high closes sectors, real estate and utilities are top today. defensive tone despite a jump in anadarko oil prices slipping 0.8% today also big move higher in the dollar the broader index is above 98.

the aussie dollar is the biggest entered mover. the euro having the biggest effect as you can see down 0.6%. but a lot of moves higher for the dollar against various currencies want to show you the ten-year. we've seen successful buying of treasuries pushing prices higher there it is over the last two or three sessions you can see that slide down to 2.52%. i bring in bob pisani with stocks we're focussing on. lots of earnings coming today as there was this morning 3m tomorrow and 3m is one of those stocks at 52-week high dr horton, some of the home builders hitting new highs bertha was mentioning tech new highs. that's important i've been complaining all week we're right at new highs on the s&p but don't have a lot of breakouts. only 13 new highs on the s&p 500 yesterday. today, believe it or not, the s&p down a little bit, we're getting significant breakouts. close to 40 new highs on the s&p, including some of those

names bertha mentioned microsoft, kla-1tencor and xilinx volume is a little better than it was still not getting much in the way of volatility. overall, all the numbers are aligning well right now. china data getting better. europe is still a question mark. i think that's the biggest issue. >> french and german business -- very disappointing in terms of whether they've turned the corner that's why the euro is down 0.6% >> xetra not doing very well that's the main wild card out there. now we'll start hearing from some of the big tech names and on friday, from the energy names. chevron will be speaking the numbers were taken down too much in the beginning of december when the oil market was modeling $50 oil for 2019. it's $65 right now if the analysts believe we'll stay right around there, the oil estimates are too low, and i

think they'll start coming up after we hear chevron and exxon. >> down more than 2% today that's linked to the anadarko story. schlumberger, what a week. energy the worst performing sector on the s&p which is closing down by 0.2% the dow also down 0.2% and the nasdaq down just slightly so no record all-time highs at the close. the russell outperforms up slightly sara, back to you. >> welcome to "closing bell." sn wilfred frost rejoining me along with mike santoli. you saw technology and consumer discretionary just turn red. so we didn't make new highs. but importantly, we held just around those record highs that we notched at the close yesterday from the s&p and the nasdaq

dow finishing lower 0.2% 57 points down s&p 500 also down 0.2% defensives led the way up. real estate, utilities, staples, best performers, energy, communications services, materials. worst performers in the market after an intraday record, it pulled back down less than 0.25%. nothing dramatic here. the russell 2000 continued to outperform it's been something to watch small caps up about 2.2% on the day. here comes the earnings parade investors are waiting for a number of names. julia boorstin following facebook josh lipton ready for microsoft, phil lebeau on tesla, jen rogers on chipolte. joining us to talk about the market is barry nab, director of research welcome back and welcome back mike santoli. >> thank you

>> now your first thought on the record and the fact we held near those highs today but couldn't quite make new ones. >> we've held today. a little fatigue or a little bit of a pause after not just hitting a new record but being up 25% in the s&p 500 in four months that's what we're doing. four months ago today that you hit the christmas eve low. by any stretch, you'd basically say it's due for something like this i do think there's a little bit of a sense, you know, we just look at that chart 20 minutes ago that said it's a logical place to say maybe this is an area it's going to take a little more than what we already know to get us a bit higher. >> and the fact we had that record close yesterday in the midst of earnings season, more coincidence than because of earnings season. a lot of the gains came long before that. >> since earnings season began the night before jpmorgan reported, it's still up. obviously, earnings season was not a sell the news event. better than feared numbers, but to me, it's more about the

broader environment which says earnings estimates were cut too much we knew that that's been confirmed and yet this accommodative financial conditions in the backdrop >> that raises a question on earnings i've heard two arguments one, the expectation was super low and so these are just beating low expectations, and, two, this actually does point to some strength in corporate america where we weren't exactly sure what was going on what's the picture we're getting? >> i think it's the latter fairly definitively. and step back for -- from earnings a little bit as we know this is a particularly complicated period to gauge earnings very difficult comps all sorts of teches. as long as revenue growth is above, that's where you have positive operating leverage. if you looked at the various measures of growth, gdp, growth domestic income, gross output and corporate revenue growth it was more like 4.

and those are nominal measures once we got above five you create a level you have positive operating leverage this quarter will have a marmginally positive earnings number but that implies that the core underlying economic momentum is quite strong, and i'll cite a couple of examples that industrial companies that announced on friday -- thursday actually, honeywell, danaher, a couple that reported this week organic revenue growth is 5%, 6% that's strong underlying momentum revenue growth from industrials is 6 from consumer discretionary, 6.5% even staples, your sector. >> actually growing for a change >> this is strong underlying momentum >> we saw some revenue declines in the banks but we'll maybe come back and dive into them in a moment the sector that got us over the line yesterday, that outperformed was health care the likes of the russell outperforming today. do you think crossing over that

record close now marks a time to rotate out of the sectors -- into the sectors that have underperformed or still stick with those momentum stocks >> i think that one characteristic of this market has been this kind of grind where sectors take their turns it's been mostly a growth market but you've seen signs of cyclical stocks picking up the stock as the defensive backed away that's kind of the way i think that the sort of organism of the market regulates itself in a decent spot. >> it can be confusing you have utilities which would suggest people are still thinking about slower growth the rails and chips, also performing incredibly well >> yeah, it's really been more about the economic sensitive cyclical sectors in the early part of the year when the rates market was rallying and treasuries were rallying, you had very stron performance from reits and

utilities but they've underperformed fairly significantly. for me two areas to avoid. it's the rate sensitives and the health care sector i downgraded health care a month ago. it's ultimately fading government policy is probably a pretty good strategy >> the politics around 2020? >> yeah, there's a long period of declining profit margins in that sector as well. and there's productivity issues in the sector that are really long-term structural issues. so you've got that policy overhang that's going to continue for some time but this is a massive period of underperformance as well >> all right hang on. we're getting results. microsoft just crossing the tape josh lipton with the numbers josh >> microsoft reporting eps of $1.14. not clear if that compares to the $1 the street was looking for. revenue $30.57 billion analysts modeled $29.84 billion. just looking quickly through the segments for you revenue and productivity and

business processes, that comes in at $10.2 billion. within the office 365 commercial revenue growth, 30%. revenue in intelligent cloud, that's $9.7 billion in the quarter. and within that, azure revenue growth 73% and revenue in more personal computing, $10.7 billion windows oem revenue did increase 9% in the quarter. back to you. >> josh, thank you azure is the shiny object here always in the microsoft report that's the cloud business. and it looks like it was a beat. investors were looking for around 60% growth. got them to 70% growth so you're seeing a move up >> another 2% bump in microsoft. the bar was relatively high for microsoft. pretty much everybody is on board with the story but the fundamental momentum is supporting what the stock move has done here. so it approaches a trillion dollars in market value. you have 30 buy ratings on it. it's not a surprise.

it's not really a contrarian story. we expected one of the most dominant growth stories to deliver and so far they have. >> it's up 2.2%. $127.80 after-market trade if it got to 130 it would cross the $1 trillion level market cap again. barry, the other point office 365 is important, the stickiness of that similar attractiveness in growth there in those numbers as azure we'll come back to microsoft because facebook is out. jewe boorstin has that. >> facebook beating expectations top and bottom line and in terms of daily user numbers. the company is taking a $3 billion legal expense related to the ongoing ftc investigation. they say this expense is not expected to be tax deductible and they are taking this $3 billion because they estimate the range of loss due to the ftc investigation into the potential violation of privacy, the commitment to protect users'

privacy, will be between $3 billion and $5 billion so they are taking $3 billion now, but they are warning the matter remains unresolve and there can be no assurance as to the timing or terms of the final outcome. now if you include that $3 billion legal expense that facebook is taking, the company's diluted earnings per share of 85 cents. if you take out that $3 billion just to look at what the apples to apples comparisons would be, the company's earnings per share would be a beat. looks like it would be stronger than expected. $1.89 per share. that would be a beat versus expectations of $1.63. so we see the stock trading up 4%, and i really think that's because there has been an expectation that facebook would be facing a multibillion-dollar record fine from the ftc now a little more details in it. so the earnings would have been a beat excluding that revenue coming in at $5.08 billion higher than the $14.98 billion

expected that means 26% year over year revenue growth analysts were expecting 25% yeeyear over year revenue growth and then daily active users, $1.56 billion, up 8% that's a hair better than expected monthly active users you see shares up almost 5% and it will be interesting to see what other details they give in terms of the outlook and how this expense will impact guidance for 2019. also if there's any insight into how soon this could be resolved. $3 billion expense now but the potential for an additional $2 billion expense to hit that bottom line there. guys >> julia,thank you for that. mike, i guess coming into this, the strength of snap and twitter, the question was, is that taking market share facebook is showing here is it's not. the eps misses because of a one-off. but the revenue strong and daily

active users also fractionally ahead of expectations. >> the core business performance mess ri metrics are on target. there's always a little value in putting in a fixed number on something like this legal charge whereas opposed to it being a potential expense down the road. that's them arguably paying for the past the present is the user engagement seems fine. a half trillion market cap company growing revenues in the mid-20% range. >> the mark zuckerberg quote at the top of the release says it all. we are focused on building out our privacy focused vision for the future of social networking. you see hints of this impacting the numbers all over the report. head count was up 36% from last year expenses, and that includes the charge, up 80% from last year. i mean, if you are a regulator looking for signs they are working on this, you see it in the report, even though they are

continuing to grow advertising and grow users >> there's no doubt. i think that the silver lining there from an investor's perspective is that's all things the company has chosen to do so those are kind of margins getting impacted because of choices management has made to run the business in a more human intensive way and try to stay on top of these issues. the stock still also 15% below its high of last year. so it's not as if it's kind of off to the races and all these issues have gone away. >> up more than 50% from the low. >> just a couple of the large nasdaq stocks still not close to the old highs. >> you can't comment on individual stocks. do you feel like these faang names are going to get another leg of impetus from earnings season >> probably. i mean, i think the long run story with them is that they are winner take most era is starting to ebb the fed marked that by writing all about it at jackson hole you're seeing signs in consumer

products of some of the companies fighting back. walmart and target against amazon the longer term story is a little less positive, but core fundamental momentum is still quite good the thing that struck me about microsoft that was so compelling was, one of the three things i was looking for from earnings season is evidence that cap ex momentum in intellectual property in software, in the cloud, that momentum was continuing a pace because that's really what the tax bill benefits not so much equipment investment but software investment. and microsoft's number would lead you to believe that that underlying momentum in capital investment is pretty robust. and that's a big story for the balance of the year in my opinion. >> we've got another one for you. chipolte results are out kate rogers following that for us >> this is looking like a strong q1 for chipolte. beats across the board here. eps $3.40 adjusted that's comparing to estimates of $3.01. revenues also beat

$1.31 billion for q1 compares to estimates of $1.26 billion comps up 9.9% in this quarter. analysts were looking for an increase of 7.3% restaurant level operating margins 21%. driven mostly by comps here. also digital grew 100.7%. now accounts for 15.7% of sales. it opened 15 new restaurants in the quarter. closed two we'll hear more from the ceo tomorrow on "squawk box. don't miss that. the stock is lower by around 2% or so right now. the call starts at 4:30. we'll bring you more from that >> thanks. down 2% despite the comp sales beat visa is also out seema mody has the numbers >> visa seeing a beat -- seven-cent beat. $1.31. revenue higher than expectations at $5.49 billion versus estimate of $5.47 billion

thanks to new vendor and merch apt additions, payments volume up 8% in the second quarter. keep in mind cross-border growth slow in line with expectations visa increased earnings outlook for 2019 we are looking at shares down about 1.5% but this stock has really been on a tear up 22% so far this year. close to its all-time high the conference call starts at 5:00 p.m we'll get you more details when they come out. >> seema, thank you. we want to take visa or chipolte >> visa is interesting that was one of the very popular, arguably crowded megacap growth stocks people were into. the numbers look fine, on target with revenues. beat on the bottom line. to take the money off the table reflex, not a surprise similar with chipchipolte. hard to know after more than a double in the last year. 50 times earnings forward multiple obviously, doesn't surprise you to see it just wobble a little

bit. >> and you can see from the intraday chart, it had a decent session today. >> 9% comps, though. >> that's the thing. one of the analyst notes said it's all about the same-store sales growth which is a big beat interesting. we have an analyst coming up who is very bullish on the stock but down 1.5%. >> it's interesting these results are coming in mostly better and to your point, a lot of growth on revenues as well. this was a period where, you know, the stock market at one point was cratering and there was real recession fears out there. we kept hearing from ceos. we don't see a recession the consumer is fine the data was coming in mixed hard to really tell on wall street now it seems like we're getting a clearer picture of what's going on >> i think that's spot on. i think when you look back on this period, strategists look back on this period, five years from now they'll struggle to find anything in the data to justify a 20% sell-off in the stock market ahead of time it really is like 1987

but the consumer never really got much of a boost last year from the tax bill. and so this whole idea, well, the stimulus is wearing off and so the consumer will be much weaker i think that's been called into question the real underlying fundamental story for the investor is interest payments as a result of disposable income at 40-year lows debt continuing to go down through this entire business cycle. wage growth up productivity growth is up. they're earning it because the wages are going up because the labor market is more dynamic it's really robust which is always why i thought this whole recession fears predicated on a yield curve which has been influenced by central bank policy, not just here but globally was all completely off base >> to your point, one justification for the pullback was we got to 17, 18 times p/e when around the rest of the world, they were much lower. >> i don't believe that for a minute clearly what happened in the

fall was you had the ecb -- you had the ecb, the boj and the fed by $2 trillion worth of bonds in 2017 and buy zero in 2018. and that whole dissipation of that purchase has culminated in september and october. we had a liquidity shock like in '87 and like in january of last year that liquidity shock just a narrative developed out of that which really had no basis in truth. now you did have a hit to confidence for a time. capital spending plans, for example, softened for a couple of months but they've come right back because that underlying consumer story is so robust. >> ch >> chipolte coming back. we also have paypal numbers. let's get to diedre. >> a bit of a mixed quarter here shares lower by about 1% in the after hours. now 2%

eps coming in ten cents above consensus at 78 cents. part of that was related to a benefit to its investment. revenue in line with estimates at $4.13 billion representing 12% growth year over year. for the first time paypal releasing active accounts for venmo. 40 million accounts. and that compares to 15 million for rival square cash. no one is doubting venmo's popularity the question is whether it can be monetized looking soft here. total payment volume coming in lower than what the street was expecting at $161 billion. venmo tpv also short so growth is slowing here as the company struggles to monetize this unit. venmo, second quarter revenue guidance light but q2 earnings guidance in line the stock is moving lower now down 2.5% in the after hours but this is a stock up nearly 30% year to date guys >> d, thanks for that.

mike, down 2.5%. v venmo is always -- we weren't expecting it to be profitable. >> still growing 73% in terms of the -- >> a lot more competition coming in >> i put it in the category of the kind of consensus beloved growth stocks in the right part of a sector that, you know, on a quarter by quarter basis is going to be priced tight for a blowout number and didn't get it this time. >> barry, your view on this, and the tech threat to banks >> yeah, i think i was smiling about this because it is a little bit overhyped this intermediation. we've talked about bank productivity remained high in the first quarter. so the whole idea they are going to be disintermediated is a little bit of hype and eventually some of these companies will probably be owned by the banks >> paypal slipping 2.5% after

hours, but as d said, up some 30% year to date barry, thanks for joining us up next, facebook shares higher after beating wall street's earnings estimates. we'll discuss whether you should be buying this stock on the back of these results >> plus, a tesla bull and bear debate how to trade this beaten down name you are watching cnbc all over earnings this hour first in business worldwide. - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in des nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

facebook on the back of its earnings, julia has more details. >> two interesting nuggets about facebook's daily active users published in the company's slides in europe, daily active users grew by 4 million. that's a significant jump. the same jump we saw between q3 and q4 this is meaningful because a lot of people have been watching that number after it declined between two consecutive quarters last year due to gdpr, the european private regulations but i want to point out in the u.s., facebook's users have hit a wall the company reporting 186 million daily active users

that's flat with the prior quarter. if you go back over a year and a half, we have barely seen any growth going back q3, 2017, 185 million users. we've seen basically no growth in that u.s. user base since way back before all the negative headlines started breaking about cambridge analytica privacy and fake news concerns >> pretty striking to see that growth hit a wall here in the u.s. >> how do you read that, julia do you read that as it was due to the privacy scandals and all the headlines or just the u.s. market was saturated >> i think the u.s. market is saturated. i think they've seen growth in instagram and they've talked about that being the source of growth we've seen these other platforms in the past two days snapchat and also twitter and they are finally restarting their growth engines when it comes to daily active user numbers. 186 million, that may be the cap of what kind of growth facebook can see in the u.s. when there's

so many other players out there. some of which are their own apps such as instagram. >> julia, thank you. joining us to dig into these results, jim stewart, columnist at "the new york times." welcome, jim and mark is a senior analyst at rosenblat securities has a buy rating on the stock. mark, we'll start with you on some top line thoughts of what investors should take away from this report. >> it's a great number so revenues came in in line, but the big number was u.s. advertising was very strong. roughly 20% above what we were expecting. so very strong trends for a second quarter straight now in the u.s. this is the seasonally weak q1 quarter. impressive number there. just looking at a couple other things that stood out. total expense growth if you exclude the ftc legal charge came in well below management guidance for the year of 40% to 50% range. so that came in at roughly if

you exclude that, came in at roughly 34%. that was -- that compares to our expectations of 44%. consensus above that looking at roughly 47% growth year over year so that's what showed a really nice up margin beat. we saw roughly 42% up margin on that -- on that up side. all in all, a good number. i was just looking at the mau numbers and i heard the comments earlier. i'm not too concerned about the u.s. the u.s. is stalling out here. but if you think about the u.s. and europe combined. 600 billion users there. >> on the point of the users -- on the point of the users, jim, does it matter if they're flat in the u.s. as long as they're not declining, do you think? well, we all knew it was going to tap out at some point

maybe with population growth it can continue to grow if they get young people, but what's interesting here is when you take out the ftc, they grew earnings about 10% on an 8% gain in total users which suggests to me that they're finding ways to take the existing user base and make it more profitable. if they can take that $186 million u.s. users and get more advertiser revenue in other words, take share away from other advertisers, that's very impressive. and i think that trend is going to be an important thing to watch. >> we're talking about a company that's faced legal problems and pr problems and scandal after scandal, privacy issues is the focus of regulators from brussels to washington i mean, has this impacted their business, jim? >> not very much obviously, they got the $3 billion fine sitting there, but this privacy issue, i think, is

very easily solvable i think probably they have already solved that they've already cracked down on that i was surprised to see not that there wasn't more r&d expense and more costs associated with this i thought they were trying to figure out how to stop fake news from getting on there. how to keep the russians from getting in on the next election. i don't know how they solve those problems that's going to be very expensive. i mean, maybe they're not trying all that hard because -- >> maybe users don't care. >> the users apparently don't. the eu people, i think, are more privacy focused. and you did see a decline there earlier. they seem to have gotten over that they're back on the platform if you are into this, i don't know where else you go and i think most people that i talk to, they really are barely paying attention to the privacy stuff. >> do you think these costs, as jim points out, are not going to increase steadily year over year just this one-off $3 billion provision? >> no, i actually -- i think

mark zuckerberg and his piece, op-ed earlier talked about, i think it was roughly $3.7 billion or $4 billion of incremental spend on safety and security and if you recall, last year they added roughly 30,000 contractors, safety and security contractors. those are not full-time employees that are focused strictly on safety and security. so we've got -- the expectations this year have roughly 800 bips of deleverage. so that's well sort of priced into, you know into the stock here >> i wanted to ask you, mike, because the focus for investors and other quarters has been how much is all of this costing. and is it worth the cost and it appears that investors have sort of changed their tune on that as facebook has rebounded in a really big way. >> you can say it's affected the business model and the profit margins and exactly how leverage

to revenue growth the bottom line is going to be. if you consider the customers really to be the advertisers, ultimately, that has not changed very much and average revenue per user going up. the stock is no longer as cheap as it was near the lows, obviously, but it's certainly not valued as highly as it was, you know, back before all these issues started and that's largely because people figure for a long term it's a higher cost base. >> jim, what do you want to hear on the call? >> i want to hear more about the -- where the growth is happening, how much time people are spending on this site. that number had gotten really, really high. and i don't know how they're going to increase or sustain that although advertisers don't seem to be worrying about that. and also i'd like to hear more -- zuckerberg talked about shifting the whole focus of the thing, you know, towards a more privacy oriented feed. changing the model i think advertisers got very nervous about that i don't see anything in these

numbers that suggestsamentally the product and how people are using it >> jim stewart, mark, thank you both still ahead -- chipolte shares are volatile despite reporting strong profit, revenue and same-store sales coming up, an analyst reaction to the results and monitor the earnings call which is about to begin. the stock has actually turned positive after a big drop on the numbers. and still awaiting earnings from tesla we'll debate those results with a bull and bear kwhwhen they coe out. what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums.

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what would you like the power to do? welcome back shares of xilinx sinking seema mody has the details >> shares of xilinx are trading down revenues in line upbeat guidance for the next quarter. why is the stock down? it's a stock that's up about 64% so far this year so one could surmise perhaps the street was expecting a bigger surprise to the up side when it comes to earnings. the stock is down about 12%. in addition to reporting earnings, the company did announce the acquisition of solar flare, a networking technology company it did become a strategic investor in this company back in 2017 but xilinx acquiring solar flare for an undisclosed amount. the stock falling here in

after-hours trade. maybe the bar is set higher for this group with the chips trading at new highs >> the group looks overheated. xilinx up more than 10% this month and more than 60% year to date that probably explains the magnitude of the initial fall. time for the cnbc news update with courtney reagan. >> president trump attending a prescription drug abuse and heroin summit in atlanta he stressed the nation's opioid epidemic is a big problem and that his administration is handling it. >> i'm pleased to report that in just four months, more than 16,000 inmates are participating in new drug treatment. already during my time in office, we have reduced the total amount of opioid prescribed by 34%. the nra is suing los angeles over a new law requiring companies that want city

contracts to disclose whether they have ties to the gun rights group. the lawsuit claims the law is unconstitutional because it violates the first amendment right to free speech measles cases have spiked to the highest levels since the disease was declared eliminated in 2000. health officials in new york and california confirmed a total of 44 new cases which now brings the national total to an estimated 671 cases so far this year that's the cnbc news update at this hour. wilf, back to you. still to come -- much more reaction to all the after-hours earnings results and we'll hear from a facebook shareholder about the social media giant's eainrngs beat. we're back in a couple k for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backsearch.

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shares of chipolte trading higher now a took a drop after reporting numbers and have climbed back. peter sella joins us we know you like this stock and this company you must be pleased with what you see. what's the key number to pay attention to >> i am.

thanks for having me on. the key number is same-store sales growth which was nearly 10% driven primarily by traffic growth that suggests they're getting new customers back into the stores and well on their way to expanding earnings and getting back to the $25 in eps we've been talking about >> what about the mobile digital push >> i think that's an important pillar to growing earnings and growing their same-store sales that's where the customer is 100% growth in your digital sales. now over 15% if you look back to where they were a year or two years ago, they were doing almost nothing on the digital side. it's extremely important to get that part right. clearly they are getting it right. they are goetzi ingetting it rih delivery side and it's going to help on the margins as well. >> are the margins going to get hit by loyalty programs, partnerships they've announced >> i don't think so. i think the loyalty is going to bring in new guests and start to drive the traffic higher i think you start to get some

traffic, more traffic into the stores, you'll start to see the margins expand also keep in mind as more and more sales go digital, those sales are going to be executed off the second line which is a higher margin make line. only requires two to three employees to run at peak versus your traditional make line which requires five or six employees so we actually think the margin profile should start to improve. start to see evidence of that this quarter with margins around 21%. i think that is a core pillar of getting this business back to $25 in eps, if not higher. >> i guess big picture, peter, how big can this chain become? right now in terms of store openings on a net basis, what are they opening, a 5% or 6% rate a year in terms of new locations? how integral they get tremendous scale? i look at a 50 p/e stock and wonder what the market is implying about the overall footprint. is. >> if you look back several years ago before we had the food

safety issues, we were talking about somewhere around 4,000, 5,000 units in the u.s after the food safety issues, that number kind of pulled back and they were starting to pull back on the unit growth. look, if margins -- the same-store sales and margins continue to expand you'll see the unit growth go along with it i think the next leg to the story could be an acceleration of new unit development. see some of these stores open with the chipolte lanes or drive-through as you call it that gives them a larger footprint to go after more real estate in the country. >> what's the why here behind all of this? is this a leadership story how did they win back consumer trust after, you know, they got pounded for so long on those safety issues, on e. coli and other issues >> you know, it's a great question i still think they are a far cry from their historical peaks. so they are probably a little more than $2 million in unit volumes today.

they were at 2.5 so we haven't gotten back there yet. they are on a pathway back but one of the keys has been the marketing and pushing more of the dollars to national marketing versus local marketing. and then second has been the push on the digital side which is where the consumer is becoming more visible and giving access to the consumer where they want it >> peter, thanks for joining us. >> thank you tune in tomorrow an sclu interview at 9:30 with the ceo. up next, shares of facebook are trading higher by around 4% after posting quarterly results. investors now anxiously awaiting the start of the media conference call. we'll hear from a shareholder mi ungutorwatchi o f, congp. ♪ to make connections of a different kind. at adp we're designing a better way to work, so you can achieve what you're working for.

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facebook reporting a beat on revenues for the quarter the stock is up some 5.6% despite the fact that facebook says the ftc privacy probe launched last year after facebook's cambridge analytica scandal could cost the company as much as $5 billion. joining us now to weigh in on facebook's results, timothy lesko from granite investment adviser. he owes about 12,500 shares of facebook thanks for joining us. what's your take on these numbers? this provision for legal expenses being taken in the stride of -- based on the share price reaction >> well, certainly it was a good

earnings number. a good revenue number. and whatever the one-time cost or two-time costs that this ftc fine is going to be doesn't really affect what investors are looking for in the future out of a company like facebook. they report on monthly active users, daily active users and revenue is what's important to this company and we really want to see that revenue number continue to grow because that's the secret in this stock not maybe the extra cost they have as they try to increase privacy. >> are you getting what you want there, timothy looks like 26% revenue growth, which, you know, a lot of companies would kill for, but for facebook, i think it's the lowest growth we've seen since the ipo. >> well, certainly have a lot of large numbers starting to catch up with them as well one of the largest companies in the s&p 500. and as those numbers go up, 27% increase on the larger number is still a fairly large amount of additional revenue what's really important here is

that advertisers see no other choice but to go to these platforms in order to grow their businesses and what you are seeing here is a secular shift in how advertising dollars are spent. no matter what happens with privacy, the expectation is still that facebook is going to garner a fair share of those advertising dollars. and include that other platforms like instagram and whatsapp where they aren't the ones that i think the public sees in the crosshairs of the ftc. they really only see it as facebook >> tim, you know, as a lot of the revelations about fake news or privacy violations or any of the rest have come out, one of the defenses that facebook and google have said, we've never done anything except allow partners and app developers and advertisers better target users and get more relevant ads to them so if the privacy measures are going to be getting in the way of that process, is that going to make them less valuable to advertisers, or, if they are just the most relevant, even if they aren't as relevant as they

otherwise could be, is that enough for facebook? >> well, i think you hit exactly the nail on the head is whether or not the new data privacy regulations, should there be new data privacy regulations, begin to hamper either what they're able to offer or what people are willing pay for that offerin and that has yet to be seen. i don't think you've seen a tremendous degradation in europe where they put the privacy regulations on and quite frankly, people complain about the privacy issues and they complain about cambridge analytica and they check facebook it's hard to really think that people have changed their habits based on what happened >> it seems to be true tim, thanks. >> thanks for having me. coming up, we are still awaiting tesla's first quarter results and we'll bring you the numbers and analysis as soon as we get them. >> here's a look at how the big after-hours movers are performing coming up here. stay with us we're back in a couple of minutes. measure up?

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all right. it's nearly 5:00 p.m. eastern and we are still awaiting tesla's earnings results let's bring up phil lebeau what's the hold up, phil >> i wish we knew, sarah those who cover tesla we have a running joke that there's our time and elon time and things on tesla run on elon times. sometimes reveals happen an hour, hour and a half after they're supposed to begin. usually they have their earnings releases by 4:15 eastern time. that's usually when we have them in this case it's unusual that we don't have it yet i don't know if that means anything i think it just could be a case where tesla is not quite ready to send them out and we'll see

if there's any particular reason for the delay, but like everyone else, we are awaiting. >> phil, thank you very much we look forward to hearing the numbers when you get them. meantime, let's talk about how they should play tesla garrett nelson from crf research joins us with tesla and dan nye has a buy. dan, you're a bull on the stock, but you think potentially they're delaying this because you think the numbers will be so bad. >> in typical tesla fashion. there's no doubt this will be a train wreck quarter. we all know that, and i think part of the delay here is just another example of tesla and there are no a dulls in the room especially with the cfo leaving and there is a prove-me carter coming up especially with guidance it's a glass half empty view unless they prove otherwise. >> how are you bullish on a company when you make those sort of comments when you think they're purposely delaying the

results -- >> because it's going to be a train wreck. >> and they have more time to have the call stocks. >> it's not about that they're purposely, per se, it's the fact that just like phil talked about, they constantly continue to trip over their shoelaces when they do the analyst thing and this is just another example of not giving investors the time to analyze it and giving that conference call what you really need to be, in my opinion, probably the biggest conference call for musk and tesla, maybe to date. last time you were here, two days ago, we were sitting here waiting for the big event on autonomous driving to begin and that was delayed and pushed back a few days and it came at a weird time, 48 hours before earnings how much of it was smoke and mirrors and how much of it was real in terms of stuff you can buy into models and buy the stock off of >> 70% was smoke and mirrors or maybe more pie in the sky.

30% of it was numbers, and i think that speaks to why even as bulls, i think you're starting to see a little bloom come off the ruse in terms of how they're handling this. demand issues are one thing and how you walk investors through this and that's why in 30 minute, in my opinion it will probably be the most important hour for musk and tesla to hand hold even the bulls. >> garrett, what are you expecting from these numbers >> we know the quarterly vehicle shipments were down 31% from the fourth quarter from the first quarter. the unknown is the average price realizations per vehicle and the cost per vehicle our suspicion is because the volume was down so much that their cost, unit cost really jumped higher from the fourth quarter, and so we're expecting a below consensus quarter. we're at a loss, non-gap loss of $1.10. the big problem goes beyond the first quarter and it's looking

ahead for the next three or four quarters and they're going to be fighting a federal electric vehicle tax credit that tps to pha phase out and it will be cut in half july 1st and it will go away completely at year end and that's a big reason why people have been buying the vehicles. >> garrett and dan, thank you both very much >> up nextwel ea, 'lbrk down which stocks are making the biggest moves after hours when we come right back iking. selfie-ing. and whatever this is. available to the public... never. smartdogs are not the answer. but geico has a simple tip. turn on "do not disturb while driving" mode. brought to you by geico. craftsmanship and technology that have made the rx the leading luxury suv of all time.

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just enough time to say thanks for watching. that does it for "closing bell," "fast money" picks up the earnings coverage right now. "fast money" starts right now with an earnings extravaganza more than $2 trillion at stake in some of the largest companies in the mark reported earnings, facebook, microsoft, paypal getting ready to kick off their earnings conference calls and we are still awaiting earnings from tesla. they typically report at 4:15. it's 5:00. nothing yet. we've got full team coverage on all of these names including facebook which julia boorstin is monitoring in los angeles and gene munster is keeping tabs and we start off with facebook and that stock soaring after the media gian