raised some $6 billion from south bay. it is very unprofitable. it saw $1.9 billion in losses in 2018 which doubled the year before but is growing quickly >> those losses got big headlines. and they're the we company >> we company. >> we will continue to follow n that and thanks for watching "power lunch." >> we will see you tomorrow. "closing bell" right now it is the final hour of trade. i'm sara eisen >> and i'm wilfred frost boeing's ceo facing shareholders today and there was one theme that kept coming up. >> there's nothing more important to us than the safety of people who fly on our airplanes. our commitment to safety is unwavering we're very focused on safety. >> we never stop from making safety improvements. >> we will continually look for opportunities to improve safety. >> i'm very focused on safety going forward. >> was it enough to convince investors and customers? management expert jeff sonnenfeld will weigh in

and new developments with the energy love triangle going on behind chevron, anadarko and occidental a fourth player could step in. we will explain. the last of the fang stocks will report after the bell we'll tell what you to expect from alphabet earnings "the closing bell" starts right now. welcome back to "closing bell." we are on watch for another record close for both the s&p and the nasdaq check out the action today it's bullish we've got a busy week coming up with the fed, the jobs report at the end of the week, more than 100 s&p companies reporting earnings little directional drivers today but after a mostly strong week last week we've got new record high watches in fact, any close by the s&p and any close by the nasdaq in positive territory will be new records. makes it easier for us we don't have to memorize levels >> yeah. only small gains at the moment

for the overall markets but the sectors a strong performance financials, communications -- >> bank strength. >> seen a little bit of a yield pickup, people more positive about the economic outlook also real estate, utilities, defensive sectors there at the bottom of the list and we've got the ruls the small caps outperforming once again today so we're up a quarter of a percent on the s&p it's also the busiest week of earnings of course and dom chu is back at hq with a look -- no, he's not >> i'm right here. >> why haven't you come and said hello? >> i was just chatting with sara before we came to air, so i did catch up with her. but wilfred, i apologize for not catching up with you i am, however, here and i will -- >> as long as you'll talk to me at the close >> i will see you after the close. and i'll city you here at 3:55 for the closing bell but to your point, you laid out some interesting themes developing in the markets right now. one of the things we want to catch you up to speed on is what's happening with earnings season because for the most part we're at the halfway point if you take a look at the earnings calendar this week, 150

s&p 500 companies are going to be reporting, which will put us well over the hump of halfway point through the earnings season but alphabet after the bell today is key ge and apples, mcdonald's tomorrow qualcomm and square on wednesday. all kinds of other names reporting throughout the course of the week. and when it's all said and told, if those companies really after the same thing we've been seeing, we will see an earnings decline, believe it or not according to refinitive if every other company in the s&p 500 reports earnings as expected in this halfway point, earnings will decline by .2 of 1% over the same quarter last year on the revenue side top line numbers it will be a 5% gain over the same revenues in a quarter a year ago period. with those numbers in play it's also interesting to take a look at what's happening with some of the earnings beats that are happening. because the historicalal beat rate by the way is around 6.2% that's around double what the normal longer-term anch average for beat rates is when it comes

to earnings season at this point. so it's generally positive, wilfred, sara, and we will see a slew of other companies come out after this is all said and done we will see a much, much clearer, probably definitive picture of what q2 earnings will look like with just about almost 2/3 of the companies in the s&p reporting at this stage, guys. and with that i'll send it back over to you and wilfred, i will see you at 3:55 p.m. just before the closing. >> i look forward to it immensely, dom, thank you very much >> still sulking earlier today david solomon weighed in on the state of the markets and the economy right now. listen >> i think april has been more constructive and i'd say overall from a macro perspective u.s. economy's doing well i think there's no question china has responded better to stimulus i was in china two weeks ago and spent a little bit of time there. europe, japan lagging a little bit. but generally from a macro perspective the global economy's moving along pretty well and markets --

>> client activity >> client activity's been better after the fourth quarter speed bump and with the government shutdown, we had a very slow start to the year. but we saw a pickup particularly in march and activity's been more constructive in april particularly we've seen capital markets activity you see obviously ipo activity and that's really starting to gain momentum so i'd say more constructive better, more constructive. >> joining our "closing bell" exchange today, jack parisian, chief economist and co-founder of ucx and chief u.s. equity and global strategist at deutsche bank. binky, are the earnings good enough to keep taking us to record highs there i would say yes. i would say earnings are coming in better than expected as dom was just saying whether you look at it in terms of breadth we've got about a 77, 78, you know, percent of companies beating that's after q4 where it doesn't look like such a big deal that only 68% of companies were beating but that was actually a seven-year low

companies generally beat number one number two, the size of the beat as you mentioned is recalculated as closer to 6 1/2%, which compares with a typical beat of 3 1/2% either way you cut it i would say earnings are better than expected modestly so. >> how bullish are you on u.s. equities are you telling clients to be significantly overweight >> so what i would say basically is that very, very near term i would say the market's sort of playing out the typical earnings season script, which is, you know, the last 24 earnings season in 20 of them the market's been up by an average of about 3%. so that would suggest we're sitting at around 2% up since jpmorgan reported. so you've got another percent to go to hit the average. and at that point -- i think we will get there a little longer, a little bit further but i would argue after that and many as close as the end of this week where earnings are basically done

and the market's ready for a sort of typical 3% to 5% pullback it's going to be basically a little bit over four months since we had a 3% pullback we typically get them every two to three months. driven by positioning. and i would argue positioning if you look across the segments is either long or a way of getting there quickly. >> jack, as i mentioned we've got an exciting week coming up a jobs report, a fed meeting, resumption of trade talks, tons of earnings. what do you think's going to be most important >> i think earnings are really the story. earnings are the mother's milk of the market. and what we've been seeing over the course of these last few weeks is really surprising it's shifting the psychology of the marketplace, sara. everyone's been asking why is this happening, why did everybody miss it. even the imf came out and missed all of this. a lot of it has to do with the fact repatriation in and of

itself is not instant gratification. and i had to explain this to a few customers and a few traders. remember it takes literally anywhere from six to nine months to unwind assets that are held overseas then of course the board has to decide what to do with them. and then you implement the action what we are going through right now is actually the implementation of what we have been expecting over the course of the last nine to ten months and that is a lot of capex starting to hit the marketplace. it's doing it in a very covert manner, by the way, and it's doing it with a lot of money on the sidelines, which is one of the reasons we continue to see these markets going at all-time highs. even without a resolution out of china yet. imagine where we would be if we had any resolution with the trade tariff situation >> do you think the dollar continues high >> i think the fact we're going up with the dollar going up is telling us something, wilfred. remember there, used to be an inverse correlation there. with everything going on in europe-w everything going on out in asia, the u.s. dollar and u.s. dollar-denominated assets

are looking like the best thing in town. and quite frankly it's drawing capital from all over the world. capital goes to where it is treated best and right now it is treated best right here in the u.s. >> binky, what's the sector setup to you right now which one looks like a good buy? >> given that i expect a pullback, all the cyclicals are going to hurt, i would argue the number one clear and straight is buy the dip in health care yeah any pullback is going to see money go back basically to the defensives and that's -- >> even with the political overhang there >> yeah. absolutely i mean, i think we've had the political overhang several times in the past over the last few years. and suggest the severe price action is more to do with positioning than fundamentals. >> if the strong u.s. data continued and did lead to the market to start to expect a rate hike as opposed to the ongoing loose policy, would that derail your overall constructive thesis on u.s. equities >> i don't believe so.

i actually believe that higher rates would be good for equities and if you just sort of think through the simple earth -- september, october the market's pricing in 2, 2 1/2 rate hikes, powell's saying that neutral is way up there christmas eve we're pricing in 2, 2 1/2 rate cuts that's a pretty big move in expected short rates one year out if the market goes back to pricing basically a rate hike that would imply a flat term premium, something like close to 3%, ten-year yield that i think would actually be very good for the markets. >> and jack -- >> can't do it no way >> powell's been so friendly this year to the markets i'm just wondering if there's anything he could say or put in the statement that could disrupt that >> first of all, there's no way he's going to be able to take the 10-year up to -- or the short end up especially with what's going on out in europe. look, there's a relative value trade here between our debt and what's happening out in europe rick talks about it all the

time and it's one of the reasons that we're continuing to see these very short interest rates. but the reality is that jay powell's going to do nothing he's got rates pegged right where they're at it's probably in the best interest of the entire economy for the fed to do absolutely nothing. probably for the next year, year and a half and by the way, we're starting to see some normalization. that inversion we saw between the 2 and the 5 has now corrected itself so it's telling you that the fixed income curve itself is telling you that the fed is probably going to stay at that time >> okay. jack, binky, thank you both very much for joining us. now, hotel names in the news today as airbnb partners on a new hotel in new york and reports say marriott is working on a home rental business of its own. brian sullivan spoke with the ceo of priceline parent booking holdings earlier at the milken summit and he joins us now with the highlights hey, brian >> reporter: hey, wilf, thank you. it's getting a little muddy out there, isn't it? the hotel people now apparently want to be in the home rental business the home rental people want to

be in the hotel business go figure. either way booking holdings, bkng-s right in the middle of it all and earlier today we had a chance to sit down and talk with the president and ceo glenn fogle. and that article on the marriott i said is this a bad thing for you, are you worried about marriott getting into your home rental space here's what he said. >> so marriott and us have always had a great symbiotic relationship while people they've us as xeerths we they've of ourselves as helping each other. our job is to put people in marriott's beds. so when they expand and end up with more beds we fill them with customers. it's good for both of us >> so i mean, listen, because, right, hair still booking rooms for marriott and yet now they're kind of -- what do they call it? coopetition? frenemies? use the word you want. also every ceo i'm talking to at the milken conference were asking the same question do they see a slowdown, do see see a recession, do they see any kind of problems in europe

so we asked ben fogle if he is seeing any kind of a slowdown. >> people always want to travel. >> any evidence of a slowdown right now? >> again, i'm not going to talk now. as you know, we're getting toward our earnings period so whoo i will say, though, in the long run is people continue to make more money they're going to spend more of their money on travel. >> so guys, i tried. he used the old we have earnings defense. anyway, it's a real -- i'm kidding. also sara spoke to your favorite company general mills, asked them earlier that interview at the worldwide exchange and they said they're not seeing any signs of a slowdown. judging by the parking lot here, of course this is a very small subset of the country, no slowdown as well there you go >> general mills has been seeing a slowdown, brian, for the last i don't know, five years they're not seeing growth is what they're not seeing. >> in pacaged goods, right you know more about it than i do cereal has been the problem but correct me if i'm wrong, sara, cereal is stabilizing?

>> yeah. a little bit but you know, you're seeing some real growth in some of the household products makers and the beverage makers. and in certain food companies like mandalay's. but not so much in the domestic players like general mills and c campbe campbell's soup and kellogg. >> next time you interview general mills take wilfred because i want to hear wifrllfr say cheerios >> we have cheerios back home. i enjoy them honey nut cheerios >> he uses cheerios for other purposes >> brian, thank you. >> good job. >> we look forward to the interview tomorrow morning still ahead, alphabet rounds out the fang earnings when it reports results after the close. we'll preview the one key thing to watch and break down those numbers as soon as they hit. >> boeing ceo playing the fence at today's investor day addressing whether he's considering resigning in light of two recent crashes.

>> i've had the privilege of working for the boeing company for 34 years and we know that lives depend on what we do we take that very, very seriously. >> management guru jeffrey sonnenfeld is here to tell us whether he thinks changes are needed at the top. [ alarm beeping ]

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welcome back to "closing bell." shares of disney slipping a little after hitting an all-time high earlier today after that blowout weekend at the box office for "avengers: endgame. accounting for 19% -- i still haven't seen any of them i've seen some of the iron mans. but i haven't seen the team coming together to make the avengers >> me neither. >> but this hype is definitely going to be interesting.

$1.2 billion globally. it's trading down a quarter of a percent but still near those all-time highs boeing ceo dennis muilenburg addressing the 737 max crisis at today's investor day in chicago. our elon noy was at the event and joins us with details. >> reporter: muilenburg faced some very tough questions about his leadership both from investors and reporters. he was asked directly whether he had ever considered resigning in light of these crashes and here's what he had to say. >> i can tell you that both of these accidents weigh heavily on us as a company. i've had the privilege of working for the boeing company for 34 years and we know that lives depend on what we do >> it was shortly after the investor day families of some of those killed in the crash announced that they are filing a lawsuit against boeing they are alleging negligence, failure to warn and civil conspiracy

>> those seats will forever be embedded in my mind. i was not there to help them i couldn't save them it was up to boeing and the others in charge to save them. we paid for a safe flight. but instead my family and others in that plane have suffered a profound loss that can never be mended we are here to ensure that planes remain flyable and safe for human beings >> guys, there's still no clarity on when the 737 max planes will be back in service but today boeing pledged that once they are they will be among the safest planes ever to fly. back to you. >> yilan, reports said muilenburg was much more combative this time as opposed to being fairly conciliatory when he's made comments about the disasters in recent weeks and months is that fair >> i don't know that he was combative. i think the comments that we

heard him make at the news conference were very similar to ones that he has made previously, again, reiterating his talking points that safety is the only and the top priority that doesn't compete with anything else like profitability. but he was defensive in the sense that he did not say that there is an inherent design flaw with the mcas system he said there is a chain of events that led to those crashes, mcas is the common link, they are working to break that link, but that there wasn't a problem inherent in the system itself >> ylan, thank you very much now, does boeing need to make changes in the c suite joining us jeff sonnenfeld senior associate dean for leadership studies at yale school of management here with us on set. great to see you >> it's great to see you sorry it's such a sad day to be meeting like this but i'm delighted to be here in person with you >> always a sad topic this indeed, jeff one of the votes, 34%, wanted the chair and ceo role split,

i.e. taking the chair role away from muilenburg. is that a significant number, 34%? >> not really. i expected it would be much higher last year it was 25% so we're up nine points. given that we had historic soaring performance through 2018, as you know, this past year is the first time they've crossed the $100 billion mark in revenues at 101. but they had an incredible year last year and still a quarter, 25% wanted to separate the roles. there is a cosmetic value in that there's absolutely no research if there are any governistas watching that want to challenge me they're wrong there's no research that shows separation of these roles is preventive you take the top 200 governance disasters almost all of them had separation of roles, enron, worldcom, name it. so it doesn't prevent. however, there's a cosmetic reassurance. and sometimes when there's a crisis if there's a complete lack of trust, and we're not

there yet with boeing, that maybe sermting the roles helps as when the new york stock exchange had a crisis a dozen years ago they sefrmted the roles and it was helpful we've seen it sometimes help. >> this is why we turn to you 37 you're like an encyclopedia of management crises. how severe is for boeing and particularly for dennis muilenburg at this point >> well, if we think about devastating crises, the famous tylenol recall of johnson & johnson and jim burke. mickey arison of carnival cruise lines. one handed very well and the second one handled very badly. or the bp deepwater horizon issues this is far more complicated far more complicated than general motors and mary barra had to deal with it. but mary barra, sxwrirnlg, jim neil of jetblue. artie sorenson the data crisis breach, had did a magnificent job of getting ahead of it however, in support of boeing and dennis muilenburg on this, this is infinitely more complex.

of course losing over 300 lives, it's hard to follow -- you hear the victim's family speaking and nothing equalizes that, nothing responds that. however, in terms of what happened when there are bad guy situations we've talked about where the stuff was concealed. there's not a bad guy of concealing and deception that we're aware of at this point however, there is disappointing obviously operationally something failed and the information has been trickling out and unfortunately boeing was ant heads of it. some things we're reading about in the newspapers because the consultants to boeing and aviation authorities were putting it out publicly at the same time their clients were hearing about it that was distressing and seeing a link between the ethiopian and indonesian situations where it was initially denied and all the regulators were just as confused as the rest of us. >> jeff, they've always maintained there is absolutely no trade-off between profitability and safety and yet we continue to hear about a level of software update

that the ethiopian plane had not taken because of cost, because they didn't pay the same high level as, say, the u.s. airlines is that enough to undo what they're saying or not really is ultimately the message they're now delivering, finally delivering clearly, one that's going to stick >> there's a -- it's a great question because on this mcas system there's this aoa, this angle of approach system warning that when it fails you're supposed to get an alert well, apparently after the indonesian crash, the lion air crash, that had previously been disabled and southwest airlines and others learned only at that point that it was going to be turned back on so the manuals were wrong. however, that didn't affect as far as we know the crash but that was turned off as a curiosity. the fact that it wasn't required in all planes, you had to buy this extra option, is distressing and now boeing says it will be required on everything but i think that's a very good question there are some other questions out there.

in terms of the complexity, there are 900 vendors involved in this. when you look at general motors, it's nowhere near that or johnson & johnson was 100% their own production here where you have 900 vendors, the mcas system itself was made by rockwell collins. not to say it's their faul either but just the complexity in unraveling who's responsible for what, why was there only one sensor and why is the sensor not maintained or installed properly it's complex to figure out i don't think he came across as combative today. i think he was defending the company anddefending their process. something he could do better, though, is he speaks like an engineer he's analytic. he's very precise. somebody who fraps had a different background would understand how to get out in front of this more he showed the sympathy he showed the empathy. he spoke in for him very personal terms today but i think there's more that he could do in terms of accountability who on his management team is studying this? right away mary barra just days on the job told us at general motors her a-team that was going to be responsible for what to

fix the problem. and on the board we hear there's a board committee today. that's great who on the board is charged with this what's the independent investigation? i give it a b. but certainly not an a performance. >> there's 509 angle here to talk about so many. but this could be a big deal for our economy. economists are now warning boeing's delayed and canceled shipments could hit gdp in the second quarter wells fargo actually putting a number production cuts there large enough they say to negatively impact gdp by about .2%. jeffries calling for a .2 to .3% hit. goldman sachs says it's possible to see a .4% drag on gdp it shows you how big aviation is for our exports and our economy and our industrial production. these are, what, $100 million planes and just how prized boeing is when it comes to the u.s. as the world leader for aviation. does it make it tougher for the trump administration, jeffrey, to deal with this? >> you'll be happy to know that aviation's seconded only by

media as one of our biggest exports as among the top five. but yes, it's a fifth of a percent. that might be discounted by many viewers, but that's a lot. and it's a $50 billion or so industry so and the ripple effects are of great concern. if it's of any reassurance, though, there are so many airlines locked into the 737 system and the parts supplies and the rest it's not easy to switch over to airbus now. but there is a slow-up obviously and production has been curtailed and that will have a ripple effect. we don't see it in the first quarter yet but we surely will see it in the second quarter and that should be a concern built into the trump administration's models we don't know how long it will take the faa to recertify the plane. something else i think good that dennis muilenburg said today is they are working openly not just with media but also regulators, transportation department, faa, a lot of congressional oversight. and i hope it won't be grandstanding. i had i some of it's going to be

important oversight. we'll see what happens to whistleblowers there are a lot of rumors out both in today's paper the "wall street journal" and "new york times" have questions about whistleblowers the government did look into a lost these sxlamz throughout a lost these whistleblower claims as not legitimate but still we want to make sure information is getting in there in the last line of "man for all seasons" just before thomas more gets beheaded he said the most valuable possession enterprise has is trust." once you separate the fingers it's forever gone. boeing separated the fingers it's really hard to reweave that tapestry, the fingers of trust great way to put it. as always, jeff, thank you for your perspective jeff sonnenfeld. coming up from chips to casinos ig're counting you down to a b afternoon of earnings. we'll preview the big numbers to watch straight ahead

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attorney michael avenatti has pleaded not guilty to charges that he stole millions of dollars from clients, cheated on his taxes and lied to investigators. he was arraigned in federal court in santa ana, california his trial is scheduled to start on june 25th democratic presidential candidate beto o'rourke has announced his first major policy initiative, a $5 trillion plan to combat climate change he says we'll keep the earth

from sliding past the point of no return. he unveiled his proposal from california's yosemite national park the gunman who opened fire at a suburban chicago plant in february told a co-worker the morning of that shooting that if he was fired he was going to kill every other employee and blow police up that's according to prosecutors. gary martin was killed by police after killing five colleagues. and the family for john singleton says the oscar-nominated filmmaker will be taken off of life support today. this after suffering a stroke almost two weeks ago in a statement the family said it was an agonizing decision you are up to date that's the news update this hour guys, i will send it back downtown to you. >> okay, sue, thank you very much for that. sue herera we have 27 minutes left of trade. we are on track for record all-time high closes for the s&p and the nasdaq yet again the dow is up 45 points or so.

26,600 the level at the moment it needs another 200 points or so to be at its own record all-time closing high. still ahead, shares of apple are up 30% so far this year but still off from their record highs. we'll debate what apple needs to say in its earnings report tomorrow to bring the stock to the next level and after the break, when energy companies fall in love parts are bound to get broken. like when women -- we'll discuss the love triangle as chevron and occidental vie for anadarko's affection next ♪ i want to feel what love is empower yourself with the free tools and resources on investor.gov. before you invest, investor.gov.

we've got breaking news on wework's ipo filing. deirdre bosa has the latest. >> we were able to obtain an e-mail from co-founder and ceo adam newman sent about an hour ago to employees that says this confidential filing is a step toward allowing them to become a public company but notably there is no timeline in this we did sit down with adam neuman a few months ago and he said wework would always be ready for an ipo but this move came sooner than expected. this company is very well capitalized. it has raised some $10 billion from soft bank over the last few years and the latest value of this company at $47 billion.

you have to take a blended valuation which puts it closer to around $36 billion but still that makes it one of the biggest unicorns here in the u.s. and in the world. now, at the same time, though, guys the company is bleeding money. it saw losses of 1.9 billion last year on revenue of 1.8 billion. guys >> dee, this memorandumo, it's slightly odd, isn't it there's a line toward the end it says "it's our responsibility to help lead the way and set the global example for people and corporations how we should take care of each other and of our planet." what's that got to do with going public >> well, i think you have to understand the wework culture a little bit adam neumann has really prided the company on taking care of each other it sounds a bit odd from the outside, but it has created this cult-like following. when you have a desk or an office inside the wework you hear this kind of language they encourage people to work together so this very much speaks to him as a co-funder and as ceo. but i think it might sound a little odd to folks on wall

street but this is what the wework culture is all about. when we sat down with adam neumann he spoke like this it doesn't come as a huge surprise but i agree. very light on details right now. >> that is it & beer taps in the office we're going to be talking about this a lot in the next few weeks but what's the line on wework right now? there was a lot of skeptical articles that came out on it th company, their model, how they own real estate and what they would do in any kind of downturn what are you hearing >> i think that's a really did foint, sara. and especially in san francisco, silicon valley a lot of vcs talk about wework as being a glorified property developer you take a look at some of the others like regencies, they don't have nearly this kind of valuation and this is a public company. the big question facing the company is what happens if there's a recession. this company has never been tested and its business model taking these longer-term leases and then renting it out essentially in the shorter term could be a recipe for disaster but our colleague has written about this company being too big

to fail, if this company fails a lot of property developers go down with it so that's one argument on the both side. but again, it's a complicated company and essentially a property developer with this sort of cult-like culture and following. >> okay, dee, great stuff. thank you very much. i have to say, sara, i like privacy when i'm trying to get work done. that whole sharing and opening -- you know, when i'm sitting prepping next to david he's always asking for my advice trying to say wilf, can you explain this to me what does it mean here very distracting >> good to know. we'll find some sort of isolation for you apparently doesn't exist. meantime the bidding war for anadarko petroleum is heating up anadarko's board of directors deciding sunday to consider occidental's $38 billion cash and stock bid despite anadarko also agreeing to sell itself to chevron for $33 billion earlier this month this will they or won't they between anadarko and its suitors has many investors wondering how best to play the energy space and whether chevron or

occidental will win over joining us is paul, senior vp and energy analyst at raymond james and josh soberstein senior oil analyst at wolfe analyst pavel, what's likely to happen here >> more likely than not, chevron will come out ahead when all's said and done. chevron is four times the size of occidental. it's got a bigger balance sheet. it has the ability to sweeten its bid. for the record, i don't think either company needs to make this acquisition, and in fact i wish that neither of them did it but one of them i'm pretty sure is going to end up with anadarko and if i were a betting man i would say put the money on chevron at this point. >> josh, you think ox deccident have a decent shot at this >> both companies have a chance but the real advantage for occidental is they bid $11 per share higher and it comes with a

50-50 bid for cash and stock so that's the real key for them and i think that's part of the reason why anadarko is engaging with them right now is they see that value of their enterprise really coming out in the $76 offer. >> are there any possible third bidders, pavel >> not likely. but stranger things have happened realistically, the only other super majors that would be big enough to test their luck on something like this would be exxon or shell in other words, trying to outbid chevron and succeeding, it's really just a couple of companies left >> so josh, if you're a shareholder of occidental do you want this deal or someone the ceo says they're the perfect fit, it's a very valuable asset in the permian i mean, the stock has sold off a bit on that. i guess in tl tl would be some balance sheet questions there. what do you do if you own oxy? >> i think that's the key

question right now which is what is the stock bringing in the stock has underperformed their large cap peers by about 15% since the chevron deal was first announced. and you look at a stock right now that's basically flat on the year and yet crude oil is up 35% to 40% so that's the real value that we see. you know, this deal does help them a lot in terms of generating additional growth and a better resource space and providing synergies and a higher free cash flow yield than they would have had before. so we do see rationale for this transaction, even with some of the risks regarding execution and financial leverage >> pavel, would you buy any of these stocks at this level based around how you think this transaction's going to play out? >> yeah, i actually agree that oxy is oversold. even though i wish again they were not doing this deal, the fact of the matter is it has immensely underperformed in the last two weeks and i think the multiple that oxy has

historically -- or the premium that it's historically had versus other large emps has been basically wiped out. so at this point it's about as far away from being priced for perfection as it gets. i think oxy is a good buy here >> is there another anadarko out there, josh? >> we think anadarko's unique in their acid base and their free cash flow profile. we do think the emp sector is right for consolidation up and down the market cap spectrum we don't think this consolidation trend is over at all. >> pavel molchanov, josh silverstein thanks for joining us >> thank you >> shipping wars are heating up as walmart teases the idea of one-day shipping after amazon goes there details next. >> and as we head to break here's a look at the names leading the nasdaq 100 high. heading for a record all-time high close we're back in a couple minutes

welcome back to "closing bell." we're going to do some movers here i have migrated over to post 8 that's where walmart trades. because the shipping wars are heating up walmart teasing a one-day free shipping without a membership fee in a tweet over the weekend. remember, this comes just a few days after amazon, we learned from its earnings report, did say that it is going to be spending about $800 million to offer one-day shipping for free prime members. it costs $119 per year to belong to prime so walmart sort of playing off of that. no membership here required. i think the big question when it comes to these stocks and this one-day shipping is clearly walmart, i think target and others that have been working on their e-commerce business and trying to figure out how to make shipping logistically quicker one day. the question is can they do it profitably amazon definitely gets the benefit of the doubt when it comes to that. i'm going to send it all the way over to wilfred frost. >> also the same post just next

door i've gone for spotify. it opened higher today slipped a little bit throughout the session as you can see it's just below the flat line down .1 of 1%. they reported numbers this morning. the most important part, they've hit 100 million paid subscribers. quicker than wall street expected they added 4 million in the past quarter. they expected to add 3 million revenue in line 1.5 billion euros making a loss, 47 million euros. that was a little bit better than expectations. analysts expected about a 70 million euro loss. the total users including the non-paying subscribers that just use it for free and get advertising, that was a little soft 217 million. so perhaps why it just lost a little bit of steam. but the headline of these numbers, strong of course. their latest strategy is to buy some podcast companies to try to get some exclusive content the likes of apple music don't have also higher margin content we'll see if that pays off moving forward but that stock ending the session is down just slightly. we will be back of course with the closing countdown coming up and much more on "closing bell."

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josh lipton covering alphabet, contessa brewer mgm. >> ahead of earnings alphabet hit a fresh all-time high in today's trade. here's what we expect. eps of 10.61 on revenue of 37.3 billion. now, that would represent a jump of 20% on the top line aaron kessler of raymond james says he's going to focus on google properties revenue too. so the properties it owns and operates like search and youtube, he's looking for 26.2 billion, or 19% growth also he's watching operating expenses he estimates 12.4 billion, excluding legal expenses, or jump of 16%. important because investors are concerned about how that impacts the company's margins. guys, back to you. >> josh, thanks very much for that let's send it over to contessa brewer for a preview of mgm.

contessa >> analysts are expecting earnings to drop more than 43% year over year with estimated revenue at 3.1 billion las vegas gambling numbers are down baccarat bets alone dropped almost 30% in the first quarter. and las vegas drives mgm's bottom line. we'll see whether rising revenues per available room can offset the gambling losses also, we'll get a look at how mgm's new macau casino's paying off. we should see mgm's market share improve there. and finally it's embarked on a $200 million cost-cutting program over two years and its capex spending is plummeting we'll be interested in ceo jim murray's comments on free cash flow sara >> contessa, thank you eric chemi with what to expect oust yum china >> another check on the consumer, this time in asia. two things to look out for in yum china's report first same-store sales at kfc. remember 9% growth last quarter helped offset declines at pizza hut. analysts will also be looking for any comments on the competitive landscape.

this is a company that has attracted buyout interest. yum china rejected an $18 billion buyout offer from hill house capital last summer. going into today's report yumchina's stock is up over 6% over the past year, and since the start of 2017 yumchina has beaten estimates on earnings 75% of the time. >> okay, great stuff thanks very much we look forward to awful those earnings reports coming up any minute now also any minute now the closing countdown. we will be back on record close watch for the s&p and nasdaq in a couple minutes your brain is an amazing thing.

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only about less than .2 higher any higher close on the s&p and nasdaq would be a new record frank holland at the nasdaq today with what's moving there hi, frank. >> good afternoon, sara. you know what? the nasdaq's just minutes away from a fresh record close for the second consecutive trading day. fang names both the leaders and the laggards we're going to start with facebook those shares up nearly 2% following news that it will focus more on privacy for its messaging apps at its developer conference that starts tomorrow. apple and alphabet also leading the way. alphabet ahead of its earnings later on today on the other side of things amazon that's on the laggard side those shares down more than half a percent following news that it plans to launch one-day shipping some concerns about profitability there.

also netflix down on reports it could lose some of its top shows like friends chips also under pressure. intel the worst performer on the nasdaq 100 dragging it down. wilf, over to you. >> okay, frank, thanks very much we do look set for record all-time high closes again for the s&p and the nasdaq not for the dow. still 220 points away. banks, communication services lead the way higher. utilities, real estate, defensive sectors toward the bottom, that is relatively encouraging even though the absolute gains not that large. today bring in dom chu as well 37 going to show you the ten-year as i do >> pretty amazing. if you look at the financials, far and away the best-performing sector so far today. and it's not just the money center banks like jpmorgan or citi we're also talking about some of the regional banks out there as well you talk about the way that these regional banks are performing one of the big sector etfs that we track it with, the spidr regional banking etf gre above its 200-day moving average its longer-term trend line for the first time in a while now.

interest rates a big part of that story >> absolutely right. also google into the close lots of earnings coming out. >> record high there, by the way. >> i was going to say, the last two weeks healthy gain there 5% or 6% for google. off the back of decent earnings from some of its rivals like facebook dom chu, thanks very much. there goes the bell. the dow just higher by 14 points but the s&p up 0.1%. the nasdaq upfor another recor all-time closing high. that does it for the first half of "closing bell." sara, back to you. another record day on wall street welcome to "closing bell." i'm sara eisen wilfred frost rejoining me in just a moment along with mike santoli, cnbc senior market commentator. take a look how we finished up the day. did not take much. any positive close would have been a new record. and the markets were able to do that both the s&p 500 and the nasdaq composite making new all-time high closes. 2943 is your level on the s&p.

up a tenth of 1% what got it there? well, financials, communication services and industrials were the outperformers. pretty cyclical bullish groups in terms of what didn't, real estate utilities and consumer discretionary all lagged nasdaq up .2 of a percent. small caps outperform again up .4 of 1% that's been a big catch-up trade over the last week or so and the dow closing pretty much flat you had winners like goldman sachs, jpmorgan, walgreen's, utx offset by some of the losers, intel at the bottom of the pack after weaker earnings sent that stock tumbling last week p & g, pfizer, 3m also -- we're going to talk 3m this hour when we hear from cramer's interview with the ceo investors awaiting a slew of big earnings today alphabet, mgm resorts, yumchina, western digital, ak steel. all set to report any minute full team coverage of all of those reports. we will bring you the numbers as soon as we get them. reporters are standing by. now joining us to talk about the

market today, charlie babinskoi, vice chairman of aerial investments. welcome to you, charl carrie first over to you, mike. it is an eventful week path of least resistance was continued record highs >> we're in the kind of market where without an observance outside influence the market creeps higher by a fifth of 1% a pretty solid majority of stocks up. the equal weighted market was about flat so holding at the highs to me is the takeaway volatility continues to recede and essentially you had this date today when banks perk up just in this very slight yield move and steepening story and credit seems okay, and that's basically all it takes to get you moving higher, plus some big software names >> charlie, do you like the u.s. banks? >> yeah. they benefit from the big story, which is an economy that's stronger than people think so an economy that's stronger than people think means interest rates go up, which is a

steepening yield curve, which is very good for banks. and frankly banks haven't performed very well for over a year in general we like some banks more than others but in general this is a good environment >> so are you continuing to be bullish, charlie >> yeah. i hope you remember that i do -- that i've been pretty bullish here since things got so ugly last quarter stocks have moved a lot. they move probably a little more than the underlying value of the companies. let's say that we've gone from table pounding, bullish, to cautiously optimistic. people were definitely too bullish -- too bearish, excuse me, on this economy. people calling for an earnings recession. it was not in the cards. the economy is stronger than people think stocks have moved a lot. >> we have the numbers from google parent alphabet josh lipton has them for us. hi, josh >> wilf, alphabet reporting eps of $11.90. the street was at $10.61 revenue, though, they report

36.34 billion, wilf. analysts had 37.33 billion google properties revenues, those are the properties they own and operate, search, youtube, that comes in 25.7 billion. google advertising revenues at around 30.7 billion. other bets revenue at 107 million. other bets operating losses around 868 million google other revenues, that would include the cloud, about $5.45 billion. total tack in the quarter is 6.86 billion paid clicks on google properties, that's up 39% year over year. costs per click down 19% guys, back to you. >> hi, josh. thank you very much. google shares not reacting too favorably, down almost 3% after hours. top line miss. 17% revenue growth analysts were looking for what, in the 20s >> yeah, it gave back what we gained today and a little bit

more it does seem as if the mix is not great. i'd be interested to hear if it's maybe partially a currency issue. but the fact that google network revenues was a shortfall is probably something getting a little bit of attention. and then that other -- if within their cloud slowed down that would be another factor. but the stock having been running a little bit into this number just kind of softening up at the release >> 19% growth. there was a little chipping of the strong dollar. >> and the stock retreated into the close. up 6% over the last two weeks. clearly facebook, twitter, even snap all had positive trends and google's come in light >> the stock's arguably getting a little rich relative to where it's been. not as expensive as it was at the highs last year but certainly fully 25 times expected earnings, which is kind of the upper end of the range of where it's been for a while now. that being said, i always say a company of this scale that grows the top line like clock work at 20% a year is still kind of an

amazing thing. problem is the market already realizes it. >> what do we make of other bets, advertising revenues and other revenues that's kind of the sexy stuff. cloud and advertising and waymo, right? and the fact that it's not really the core business right now but it's an interesting growth prospect for investors long term. >> it is it's not going to show up necessarily in the revenue side. hopefully what they say about how much more's going to be invested in those areas is kind of the thing >> looks like that operating loss did expand. >> that's right. >> significantly from last year. >> is the competition really heath up for advertising a quarter or two ago we were saying it was amazon which was the new one coming into that space. they slightly disappointed coming into this report we thought facebook and twitter voted -- well, for the sector as a whole but the consensus is this is a competing space. >> the pie continues to grow and google continues to have at least its continuing share of that pie so i don't think it's completely -- we're not talking

about zero sum game economics just yet the question was was amazon going to pull away in particular from things like paid search on google which obviously is largely people looking for a particular transaction or product. >> charlie, where do you stand on google and alphabet these results and the setup going in >> i teach two schools in the inner tcity of chicago a stock market class and both of them are all in on google historically that's been a contrary indicator but lately my students have been right i've learned not to bet against google but i will say you've got to watch the politics here the one thing ted cruz and elizabeth warren agree on is these tech stocks have gotten too big and they're using data in a way that's not great for everybody's privacy. i am worried about regulatory risk not being factored in >> what can they do to curb these kind of profits and sales? >> well, you can say the same

thing about what the government did to microsoft and did to ibm in the day >> there's a lot i'm just wondering are you expecting fines? are you expecting actual talks of a break-up? >> yeah. >> europe -- >> yeah. i think its enforced property rule -- privacy rules that give you the right to demand a company forget you, so to speak, and that is very hard for a technology company to do and it would have a big impact on these companies' businesses. so if the u.s. as to put in place the same kind of privacy rules we have in europe that would be a fundamental threat to the business model of google and a lot of the fang stocks >> we're going to discuss google in more detail in just a moment. meantime, we have earnings from western digital and aditi roy has the numbers. >> hi will, wilf a pretty ugly miss on eps from western digital. earnings coming in at 17 cents versus 46 cents which analysts were expecting on the top line revenues are 3.67 billion, roughly in line with analysts' estimates

we don't have any guidance numbers right now. we'll wait for the call on ha. but pretty big news. shares were down right now about 3 1/2% this coming at a time when the industry is grappling with weak data center demand and a downturn in memory chip markets. we saw intel miss its revenue guidance last week we'll see how shares end up right now. right now at the moment down about 5 1/2% back to you guys >> aditi, thank you. turning back toofl bette now, let's figure out what to do with the stock. shares a little bit under pressure here in the aftermarket. victor anthony joins us from aegis capital. ali mogalabi joins us. ali with a hold. victor with a buy. shares down more than 4%, victor are you disappointed in these numbers? >> slightly disappointing numbers. google numbers came in weaker than i was expecting as well as margins came in lighter than i was expecting as well not the most impressive number still solid growth coming out of google properties.

still going through the numbers to try to ascertain what within the google sector numbers allowed it to miss have to look for more clarity on the call for that. but so far not the most impressive number but still a great business >> ali, what's your take >> yeah, to a certain extent i agree. first i should say that this pullback and if it goes down any further i think it could create a pretty good buying opportunity. in terms of the advertising i think it remains strong. i think one thing we should keep in mind is these guys have not yet fully monetized their properties one of the main ones is google maps so you could actually see possibly ad revenues accelerate a little bit in about a year or two years down the road when they actually more fully monetize google maps >> ali, nonetheless, you were looking i believe for the full year for 20% top line revenue growth the revenue a little soft this quarter. can they make that up in the representati rest of the year >> to a certain extent, yes, i think so don't forget there are a couple of things that they have going

for them one on the advertising side i still think that the pricing for video advertising is going to go up a little higher it's going to help these guys down the road. that's mainly based on youtube again, they have not necessarily maximized the sales of their youtube ad inventory and two, there's still a lot of growth remaining for cloud, within the cloud business. of course they don't split it in terms of what portion of the revenues it makes up but i think you should look for those two to possibly drive revenue growth to around 20% for the full year. one more thing i should mention is another positive out of this report, what i notice is tech as a percentage of revenues will stabilize a little bit certainly lower than last year i think it's around 22%. so going forward that could help them either maintain operating margins or possibly widen operating margins a little bits. >> victor, i was going to go to

cloud, which was brought up by ali. we just had these blowout numbers from microsoft on cloud. aws with amazon. where does google stand? is it a player and is it sort of gaining enough on cloud revenue as a percent of the overall pie to actually drive your opinion on the stock >> i've seen numbers that suggest they have high single digit market share, probably low teens and others, but it's still growing significantly faster for them but what i think google should do, alphabet should do going forward given the results i definitely think they should give us a little more clarity on cloud revenues and profits, a little more clarity on youtube i think that should help the valuation of the stock in the same way that aws did for amazon i also think its underlevered balance sheet, i think the company should lever up. i'm a big proponent of using leverage to drive equity returns. i think he had could be more aggressive with the share buybacks i think that's probably the most tax-efficient way to reward

shareholders going forward as well as i'd probably step on the gas a little bit in terms of the waymo rollout. >> what do we know about that? what's the latest? >> they were take the time, starting monetization. multiple different monetization avenues they could pursue. but seems like google is taking their time but there's a lot of competition coming in. you know, i don't -- google has to lead. i don't this that lead sin surmountable i think they need to be a little more aggressive with the rollout of waymo going forward >> we will leave it there. charlie-aly, and victor, thank you very much for joining us coming up, alphabet one of calpe calpers' top ten holdings. we'll speak to the ceo molly frost about the results and the other names the pension fund is holding. >> no relation >> no relation

>> the countdown is on now for apple's earnings which are due out after the bell tomorrow. find out what you should expect from the tech titan and how you should trade the stock after the report

welcome back to "closing bell." mgm out with numbers contessa brewer has the results >> mgm described its first quarter results as better than expected it squeaked out a revenue beating coming in with 3.12 billion. a 13% increase over the first quarter of 2018.

but its earnings per share were a big miss 5 cents compared to the consensus expectations of 21 cents. now, there are charges weighing on the eps the biggest of which is a 7-cent per share tax charge because of the extension of the concession agreement in macau macau, by the way, the bright spot here with 734 million in revenue. it benefited from a full first quarter of its new mgm property being up and running last year it opened in february. that was an easy comp. but las vegas, which makes up the lion's share of mgm's revenues, dropped 13%. it was driven down by a 17% decline in table game wins the stock here in extended trading looks like it's up about half a percent we're going to be listening for the ceo talking about this 200 million cost-cutting measure over the next couple years that's a big focus for this company now. sara wilf >> contessa, thanks very much for that mike, the eps beat looks like

this legal charges taken against that even on the revenue lines not benefiting as much as some of the others from the macau growth strong beat because of the bounceback in the quarter. >> i think that's why the story remains a little captive to what you think about las vegas and whether in fact it can become a little more of a strong market than it has been lately. >> the stocks have been coming back still way off their -- >> well off their highs from a year, year and a half ago. absolutely i think they're kind of moving in the right direction mgm's probably underperformed off the lows i think the others, las vegas sands and wynn have been caught up -- >> mgm had been holding up despite the eps slip it's down -- if it comes back up again i think it's down about 3% now in the after-hours trade, reacting more negatively to the episode miss more numbers to tell you about ak steele out. frank holland tracking ha name for us >> good afternoon, sara. shares of ak steele up more than 3% after reporting quarterly earnings with a miss on revenue

but a strong beat on profit. eps about 10 cents above estimates. the cannot says its shipments of steel actually declined but the price they charged customers per ton increased. 70% of the actually is still sold to the u.s. auto industry analysts were concerned they could see some pressure in as the u.s. auto industry's declined by 2 1/2% however, the company has not as ym pacted as other steel harkz by the winter weather. again, shares of ak steel up right now increasing just as i'm speaking almost 6% right now after a miss on revenue but a really strong beat on eps. back over to you >> all right, frank, thank you very much. this stock has been under a lot of pressure, really going back overt last year. you've got the steel and aluminum tariffs, which is supposed to help the domestic players. what's going on? >> the steel they buy to refine is also going up having the autos is a mixed blessing under a billion-dollar market

cap. even though it's a big player it's really receded a lot despite the policy efforts >> when we come back, we've got much more on today's wave of after-hour earnings. still awaiting results from yumchina >> but first calpers ceo marcie frost will tell us how the pension fund giant is investing as s&p 500 hits record highs and why it's been increase its stake in mijnaarua companies we'll be back in a couple minutes. we're carvana, the company who invented

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welcome back record closing highs once again for the s&p and nasdaq just slight gains overall, though .2 of a percent for the nasdaq a little less for the s&p. dow fractionally higher it remains about 200, 250 poijts from its own record all-time closing high constructive sector performance financials, communications services led the pack 37 defensive sectors like real estate and utilities bottom of the pile the milken institute global conference is under way right now in beverly hills >> our brian sullivan is there along with calpers ceo marcie frost. ahead of her panel on america's pension shortfall. >> apparently we're doomed is the subheading of all of that -- i'm kidding. guys, welcome. thank you. our next guest has a fantastic story. marcie frost you are the biggest pension fund of america everybody i went to harvard or i went to cambridge.

you don't have a college degree. >> i do not. >> how did you end up as the head of calpers unless you went to harvard and some prep school? >> a lot of hard work. >> what? >> a lot of hard work. yeah i spent 30 years in public service in the state of washington started when i was very young. started as a typist. i could type all these documents. >> you went from a typist to rung the biggest pension fund in the united states. >> i did >> that's a book, marcie >> well, i had other jobs in between. >> awesome a great story, though. >> thank you >> softball. now why do you -- you're effectively building a private equity firm inside of calpers. why? is that really what you want to do >> we need the returns and when we get the returns that we need, then the pension benefits that we pay to 2 million people in the state of california are sustainable it's really that simple. >> but the stock market's at record highs the returns should have been pretty get last couple years, no >> returns have been good. we've exceeded our return target

for the last two fiscal years. but what goes up has to come down at some point and we have to think about it from a diversified portfolio. >> you think the stock market's going to go down or you're just prepping in case it goes down? >> we are -- we manage risk. that's what we do. we have to run through a variety of scenarios to run a $360 billion portfolio. i'm not saying the markets are going to go down but the markets have go gone down in the past and markets will go down again and we just have to be well poised to take advantage of every investment vehicle -- >> and you think the private markets give you a better insulation for that? >> we do for us the private markets are the only -- what we call an asset class. an asset class that will give us greater than the 7% return that we need. and when you have the other asset classes coming in at less than 7 you need something else to average that return >> why have so many -- i'm trying to ask this delicately. why have so many pension funds screwed it up across america >> screwed it up >> not calpers >> right >> but there are pension funds

i don't need to name them. you know who they are. that it's very questionable whether those benefits, those men and women work for for 20, 30 years are going to be there what's happened? the market's at record highs >> i think it comes down to you have off good governance in these systems and even more important you need to make the required contributions when you make the required contributions it's the investment portfolio that it really is the economic engine. at calpers 2/3 of the pension benefit going to a california public employee is coming out of investment returns, not from contributions. so if you don't put the contributions into the investment markets you're missing out on that 2/3 return >> wilfred frost back in new york has a question for you as well wilfred, jump on in, buddy >> good afternoon. >> marcie, i was looking down the list of the top ten holdings and the likes of am, alphabet, amazon are all featured there. is that an all-out bet on fang continuing to go higher from where they stand or is it just by virtue of your size you're

forced to hold these big cap tech stocks? >> it really is the virtue of our size we basically own a portion of every listed company we are -- our portfolio's a little more tilted globally than it is on the u.s. side we've been a little underweight on fang but we think that will pay for us in the long run >> but you own every stock in america. >> we own every stock in the index. >> is there some point, marcie, where you become too big to handle i mean honestly. that you just can't invest $360 billion and you might have to break it up or have a different strategy >> i don't think so. there are funds out there that are larger than calpers. and for us it's that 7% return that keeps us a little bit awake at night and when you have access to the private markets you need to fully leverage them in order to get that return that you need. but i don't think we're too large. if you think about where our chief investment officer just came from, it's a $3.2 trillion system so we're not big enough yet. >> what's the latest, newest,

most favorite bet that you have made at calpers? >> favorite bet. >> a new investment you that guys have that you guys love >> so back to private markets. we know that there are a number of ways that you can access private equity right? and we need to -- in the u.s. to do something a little bit different at least at calpers because our $360 billion portfolio scale can be a friend but it can also be a foe so we have a policy target of getting 8% in our private equity portfolio but we need more of it it's the only asset class that's returning greater than 7 and when you're 71% funded you make up the difference with your investment returns so we are introducing two new concepts we've got approval by our board that basically would allow us to create these entities that would access -- pillar 3 and pillar 4 would really be the main street type of companies that we would hold long and hold the majority stake in. >> venture capital, private equity, marcie frost, love your

story, by the way. >> thank you >> amazing from washington state typist to rung the biggest pension fund in america. >> yes >> gives us all hope there's hope for us, wilfred frost. there's hope >> i think it was partly due to her name as well, brian, that got her there. brian sullivan and marcie frost, thank you very much to you both. and congratulations. time for a cnbc news update. sue herera's got it o'for us hi, sue. >> i do indeed thanks, wilf here's what's happening at this hour the chinese foreign ministry has complained to the u.s. about warships going through the taiwan strait. this is the waterway that divides taiwan from mainland china. a spokesperson calling the taiwan issue the most important and sensitive issue between the two countries. aerial video showing a flood-ravaged town in quebec roughly 48 hours after a 160-foot section of a natural dike holding back a lake breached, forcing thousands to evacuate officials declared a state of

emergency on friday. former indiana senator richard lugar was remembered today at a service in indianapolis politicians and local civic leaders honoring the life and legacy of lugar, who died this past weekend at the age of 87. >> you'd be hard pressed to say that there was any greater political leader in indiana history. on top of his mayoral achievements six times elected to the united states senate. amazing in any state >> you are up to date. that's the news update this hour. guys, i will send it back down to you >> sue, thanks very much still ahead on "the closing bell" the s&p 500 closing at another new high >> jim will join us next with the highlights and as we head to break here's a

recap of the earnings so far alphabet beating on earnings, missing on revenue stock down more than 5% now after hours. mgm reporting the opposite big miss on earnings beating on revenues. westerdital ssn gimiing on both. we still await yumchina which we'll bring you as soon as we get it through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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59 cents eps that's a beat of five cents over the 54 that analysts were expecting. a beat on the revenue line as well 2.30 billion against 2.26 billion. taking a look at the comp sales, up 4%. that's much better than the 1.8% the street was expecting in particular kfc was up 5%. a lot better than the 2.3% they were looking for pizza hut also beating estimates but not as much. that was 1% flat versus just .2% that they're looking for the stock about half a percent right now but it's been volatile going up and down a couple of percent right after these earnings yumchina with a beat on the first quarter.

back to you guys >> thank you very much potentially good sign on the chinese consumer i know yumchina's been also implementing its own robotic ice cream makers and a.i. and really trying to turn pizza hut around in the country. >> and it seems like the rule has been if you're selling relatively low-cost consumer items in china it's a bit easier than obviously big ticket stuff. so somewhat sheltered. the stock an that far from its high of last year. the trend is friendly to what they're doing over there >> that's up half a percent. a little bit bumpy though in after hours trade. some strength in china for them. one company when they reported last week didn't see that strength in china was 3m and our jim cramer has just sat down no, jim's not ready yet. my apologies on that jum chyna up 2.8% in after hours trade. let's have a look at how the markets finished here today. as we said, some record all-time high closes with the s&p and nasdaq hithd all-time record

highs. the dow still remains a little off its own record all-time high you've got ingersoll-rand up 6.5% in today's trade. mattel, twitter amongst some of the other gainers. we'll be back here on "the closing bell" in a couple of nus.

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josh, what did you hear? >> sara, alphabet here dropping in the after hours obviously a beat on the bottom line but this top line of 36.3 billion, so up about 17% year over year. that did miss expectations the street was at 37.3 billion i did have the chance to catch up with cfo ruth porat, asked her about listen, what are the trends she's seeing for the company's revenue growth right here and she did mention a couple things she talked to me about fx headwinds that the company's experiencing she also talked about a strong 2018 so suggesting a tough comp here. and she noted the timing of product changes having an impact on the top line as well. she said she would talk more about that on the call, which is starting right now i did ask her about investments too. the company is making big investments in a lot of different bets, from cloud to waymo self-driving cars. and i asked if i could get some sense of the kind of pace of investment, the arc of investment does it carry on at the same pace from here she said the investment thesis

remains unchanged, that they continue to focus on areas where they see long-term opportunities. machine learning, cloud and search she says that's necessary to support long-term revenue growth, position the company she says favorably for the long term and also another issue here which i know is front and center for analysts, who are often frustrated this company at this point doesn't break out youtube so investors can have a clear line of sight into how youtube is performing. ruth porat only saying that youtube remains in her words a strong contributor, significant growth there she said. but alphabet continues to operate as a single ad business. so no indication that breakout's coming soon here i would say the same thing about cloud, by the way. porat talked about cloud but no real insight into that business either at least not in the same way that certain competitors like microsoft and amazon do. she did talk to me ab. thomas curion, he's the oracle exec. who's chief of the google cloud segment, saying she is pleased with his execution so far and

the way he's adding talent to that business. as i mentioned, guys, that call is starting right now. back to you. >> i just want to clarify, josh. did she spell out where the miss came from or was that the reference to strong dollar and tough comps from last year >> i tried to get -- listen, i asked about the miss and if that explains some of the trends she's seeing she talked about some of the issues she's seeing right now which includes the fx headwinds and tough comps and the timing of certain product changes for that we're waiting to hear what she says on the call i would point out it wasn't just the top line you have to make a beeline for google properties too. that's the company's bread and butter that's the properties it owns and operates like youtube and search the street was looking for 26.3 billion. that came in at 25.7 billion so a miss there as well. i'm sure analysts will have plenty of questions about that as well on the call. >> thanks very much for that, josh mike, slipping 6%, two weeks of

gains for the stock. also weighing on the qqq not just its percentage rating on the qqq but dragging down some of the other big-time names. >> yes there's now a little bit of hesitancy with the market. you mentioned giving back two weeks of gains it's up 10% this month and by the way, you could talk about tough comps but analysts knew what the comps were when they came in with the revenue estimates. it's not really explaining it all the way. i do think it rubs at a couple of the very typical raw nerves about google when if gets to these higher valuations, which is what are margins on its own property, its own advertising doing, costs per click going down it always does that gets attention when they're perceived to have missed just the idea that maybe the company is not as focused on maximizing every dollar of profit as other companies are. >> why don't they break out youtube if it's such a success story? why don't they break out the cloud? it seems the question for investors is short-term what do you do with a number like this

but long-term is this still as porat said the bet on machine learning and cloud and search? >> i think it started as a single product company they think of the world as simply connecting people to the world's information and i don't think they particularly love the idea of segmenting it out just for the purposes of people trying to get some of the parts. let's say they would never do that but i get that's the reaction of management to slice it thinner >> 6% of course last week facebook, twitter, strong numbers from them. >> jim cramer meantime has been speaking with 3m ceo about last week's disappointing quarter here's what some of the ceo mike roman told jim >> we are disappointed in the quarter that we delivered for 3m and it really was driven by some challenges we faced in several end markets that we have been talking about for some time and the sidelines in those end markets, china, automotive, electronics accelerated as we went through february, march and while we took actions to get ahead of those challenges we

didn't do enough to offset it. >> jim joins us now with more. jim, i guess the extent of the weakness that they felt in their numbers in places like china somewhat of a surprise, right? >> yes and i questioned -- some of these end markets weaker they turned out to be weaker for 3m than others he just again resorted to saying look, we didn't do what we wanted to do, we didn't deliver, there was weakness and i tried to parry it again. it was difficult i will point out just contrast with alphabet. this was not a man who came on and said it was a good quarter, i don't know what the deal was it was the opposite. it was not a good quarter, we have got to fix things, we have a playbook to fix things it was very abject he came here and was basically saying we blew it but we're not going to blow it again my problem and i said this several times, is there are structural issued at 3m that are going to make it so the turnaround is not going to be a short one. >> what do you do with the

stock? it's flat so far this year, down 3% over the last 12 months has it been punished adequately? >> i don't think so. i think like alphabet it ran tremendously and it has to spend more time in purgatory i think 3m is one of those questions in the big-time penalty box. it is the ultimate chip stock. but the things that -- look, he was saying we have a lot of things to fix but we know how to fix them i did not get the sense they knew how to fix them in 30 days, 60 days, 90 days i got the sense this is going to be a 2019 project. this is my sense i don't think there'sany need to rush to buy up 3m at all. >> you're mentioning the word alphabet any early take on those numbers? >> michael was saying the stock's up 10% i was saying this morning look, this is what happens with alphabet, they report the number nobody likes the number, people hate the number and three months later the stock is up more and

then nobody likes the number they hate the number it's just kind of a dance. i wish ruth porat would get ahead of it. ruth started the last conference call by saying we had a great quarter. it would be great if one time they just it wasn't a great quarter. that is not their way. which is why it's so frustrating. at least 3m says we didn't deliver. this is not a quarter that when i look at the revenue numbers like you guys said that should be this bad. but at the same time it's a great american company with great balance sheet a lot of optionality. they're going to do that every single time i say to myself why did i dump it all-time high. it goes to aunl-time high and then you say at least i'm glad i kept it. >> thank you >> you can't give up >> everything's better than arsenal right now. but you're right, we will never give up blind loyalty.

by hope your loyalty to alphabet is based on fundamental analysis, not blind faith. >> i believe in ruth porat, it's not just my home team, wilf. >> i'm not sure i believe in stanley kronker. but we'll leave that aside it's been poor jim, thank you as always and make sure to tune in to his full interview with mike roman "mad money" 6:00 p.m. eastern time >> are some investors still w atg cautiously optimistic? hoth might actually be better for the market. stray ahead. pnc bank has technology to help make banking easier,

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telestrator with more. >> this is a picture of the analysts consensus forecast. that's the orange line the actual s&p in blue right here you can see this gap is essentially the upside that the consensus says might be left this is it's about a little less than 8% up from when we closed today now wall street is always going to be optimistic they're going to say there is upside left when it's under 10%, i consider that to be modest level of caution which is okay and, in fact, that target is lower than where it was right here in september at above 3200 when the s&p 500, of course, was slightly lower than where we are now. so essentially, it fits in with that being of wall street being a little surprised at the strength of this rally off the lows and maybe it's not as if people's eyes are getting too big just yet based on the sell side officially for their target >> what do we do with the sell side target? is it a con contrary indicator is it a sign of euphoria >> i think when it is extreme,

it is contrary the best signal is when it's very close to where the index is trading meaning there is a lot of skepticism. that is going to be a bullish contrary signal. when it is here between 5% and 10%, it is more or less neutral. >> mike, thank you very much for. that we're gearing up for apple. the earnings report tomorrow afternoon. the key data to watch ahead of that >> plus, earnings scorecard. biggest names making moves after hours next kevin, meet your father. kevin kevin kevin kevin kevin kevin kevin kevin

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welcome back apple reports tomorrow the stock is up nearly 30% so far this year. >> joining us to discuss what they're watching and what you should be, tom forte from d.a. davidson and chris catso from raymond james. what is the key here they're not putting out iphone shipments. is it sales? >> they're a little limited in disclosure obviously, iphone sales is always something we watch. this quarter margin also because we've seen price reductions through the quarter and i think there some concern on what that does with margins. >> tom, a lot of this quarter's

earning season is framed with much lower expectations that are therefore managed to be beaten does that apply to apple or the runup in the stock since is warning in january does that suggest otherwise? >> i think apple is in a good place. the expectations are low for apple since they preannounced the december quarter given the challenges they had both in the iphone and in china. so the big announcement this quarter will be how much money do they intend to return to shareholders this is the quarter where they make that announcement last year was a new $100 billion repurchase program and 16% increase in the dividend i think that to the extent you see big numbers again both in buy backs and in dividends, i think the stock will continue to perform well >> chris, is that a -- is that a market mover at this point in other words, if it comes in the range in terms of capital return, will investors seize upon that as the next excuse to say okay, we can buy more? >> i don't think so and i think the capital

return program by now is pretty well known and, of course, apple at their size, they're constrained on how much they can buy in the market. what i would say, you know, the important thing for apple right now is, you know, one, as you go into the second half of the year, the concern is more about mix. you know, how many older phones people are buying as opposed to newer phones and, of course, our view is the phones coming out in the fall are going to be very similar to the ones from last year so we expect a different result. but i think the other thing as you go forward with the settlement with qualcomm is extremely important because it gives a chance as you go into 2020 for the potential for a 5-g cycle. i was doubtful of that before the announcement because we had doubts about the partnership with intel that changed at this point. >> you don't expect them to reveal the details of the deal >> no, no the at all. >> what catalyst could that be for apple? >> well, you know, i'm sure you got a lot of folks on the show talking about 5-g lately at least it gives an excuse to

buy a phone for next year. and i just don't see having that excuse right now unless the phone breaks or, you know, it just gives the consumer something else and i think the risk was if they weren't onboard with that and they weren't partnered with quali qualcomm as they are now, that may have damaged the ecosystem. >> tom, you are excited about any new products or areas in particular apple card or whatever it may be >> sure. so i think the big excitement for apple is we're trying to figure out, you know, what is next and how do they gravitate away from the iphone i think disney showed you today a wonderful example of content done right, how well that can do with the $1.2 billion open for "avengers end game." apple had the announcement on the in you products including apple tv plus and in which you mentioned the co-branded credit card with goldman sachs. the important thing is to see how the company is positioning itself for the future, things they're doing not just with payments but also with

advertising and health care, things of that nature. and i think that sets up the stock really well from here. expectations i think are very low. >> so, mike, i mean the stock has done well this year. but the theme of earnings season has been companies beating lowered expectations where is the street on apple and just what -- how much are they expecting to get a move up in the stocks >> the estimates came down radically for apple. mostly that was after the january announcement it hasn't been in the last few weeks you've seen a downgrading of expectations. so i'm not sure we're dealing with the same rock bottom forecast and you have an easy -- i think it's much more about, look, the stock is pretty much at its fullest valuation and it's tending to get in the last several years. not overexpensive by any stretch. but it's hard to make that cheap point again. much more about whether people are really valuing the company based on the expect tactioationd they talk about a consumer staple which seems a stretch

that talk is out there >> thank you both very much. of course, apple reports tomorrow we've got one minute left in the show let's check in on what is making headlines after hours? alphabet off the bell. western digital shares under pressure after the data storage company reported a big earnings miss down 5%. >> and gm shares lower after missing wall street earnings estimates because of a 13% decline in las vegas casino revenues and restaurant chain texas roadhouse plunging after higher labor cost weighs on the bottom line not the most encouraging bunch of earnings. i think alphabet is down 7% after hours. really catching your attention >> that's going to be the question for the morning whether, in fact, that reaction spreads. and we have a little more of a rethinking of where we are in terms of the big cap stocks. >> how did they explain it on the call she did say product changes. >> that's right.

so exactly what are they talking about that was maybe a little bit of a slippage during the quarter. >> feels more stock specific >> which is why if it happens the overall sector sells off, people looking for an excuse to take it off the table. >> okay. we'll watch that tomorrow. that does it for "closing bell" today. "fast money" begins now. >> yes, it does. "fast money" live if the nasdaq market site overlooking times square our traders on the delta house desk today, tim, no, we decided you were higher, brian pinto kelly. >> stays bluno, guy and tonight the s&p 500 surging to a new all time high for first time since september. traders tell you what they're still buying at record highs. >> i'd rather be blue than pluto. >> we're going to start with alphabet earnings. the stock is falli