i'm not sure there are a lot of them. >> you would know. >> i'm not sure i would. >> we're watching that the impact of kim kardashian west and her tweets. >> it's such a sinister suggestion what happened at that jack in the box? >> i want to know more now thank you for watching "power lunch. >> "closing bell" starts right now. welcome to "the closing bell." i'm wilfred frost. >> i'm sara eisen. here's what's moving in the final hour of trade. we've got stocks lower across the board. dow down about 126 points. low of the session down 203. so not quite as bad. tech is getting hit particularly hard you see the nasdaq there tech heavy, down 1 1/2%. those chip stocks really in the crosshairs of the latest flare-up between the u.s.-china trade war. >> within the s&p the tech sector's down close to 2%. some individual names on the move tesla hitting its lowest level since december 2016 after one analyst said the company's facing a kilimanjaro-like uphill

climb for hitting its profit targets. >> sprint and t-mobile volatile right now in the last hour of trade on a new report that that merger could be facing headwinds from the doj we'll have the latest on an analyst who says if the deal is approved there's one other stock that is primed for a takeover. >> and semiconductors are getting hit on news they are suspending activities with huawei, and we'll start the day with the china trade fight and its impact on the markets. jon fortt is covering huawei, kayla tausche has the latest from washington and phil camparelli of jpmorgan will be with us for the full hour today. we'll get his take but jon, let's start with you. >> yeah. huawei reported sales of $104 billion in 2018, wilf, making it about twice the size of cisco. and that's a big customer for u.s. suppliers to lose vijay rakash at mizuho says that because huawei has 20% to 30% share in global mekt networking and 5g infrastructures and the number two handset maker by volume the impact is broad so look at qualcomm, intel, broadcom, western digital and

micron, all among huawei's biggest suppliers and among tech's notable losers in today's session. you can see there qualcomm, broadcom, western digital all down more than 5%. huawei getting squeezed on the software and service side as well here with google saying it will no longer directly supply huawei phones with the latest android software that's likely to have the biggest impact on huawei's smartphone business in europe where it had been gaining share rapidly, guys. >> jon, to that point, though, google allows certain manufacturers to enhance android and specialize it to their specific brands. huawei can still use the normal version of android explain to us exactly what's happened there >> part of android is really open source. and so that they will continue to have access to. huawei in its domestic market of china already does its own specific enhancements. but access to overall android updates that are pushed out from google and the google app suite

that comes with the own version that it directly supplies to the oems, that huawei will not get access to. >> jon, thank you. let's send it over to kayla tausche in washington for a broader look at where the u.s.-china trade war stands right now. kayla? >> sara, safe to say there's no progress to speak of with china's foreign ministry spokesperson saying the deal that president trump keeps blaming beijing for breaking never existed. china also says the u.s. fabricated the issue of forced technology transfers though a european union study says it's not only happening but it's worsening. these trade tensions between washington and beijing are beginning to spill out into other geopolitical issues. you had the u.s. sailing warships near disputed territory in the south china sea you have china airing anti-american movies in prime-time on state television channel cctv which said the programming change reflected an echo of the current era. and then you have iran asking china for help to protect its nuclear deal as tensions between iran and the u.s. escalate as

well there's a morgan stanley note out that says if this reescalation of trade tension between the u.s. and china doesn't get resolved in a few months the chance of recession is increasingly likely sara >> kayla, thank you. let's bring in phil cam pa relli, jpmorgan asset management also joining us is laura caldecino from rbc capital markets. phil, what are you telling your clients about the state of u.s.-china relations >> first of all, on may 3rd when everything looked like it was all good to go, there were a lot of things that fell into place at that point. you had really a perfect pivot for the fed. you had a great earnings season. and then you had a trade deal that was ready to go and then all of a sudden come that weekend you had to take the trade deal off markets off this month about 3%. 3% to 5% something that seems likely in that piece of new information. a couple of important points to put in perspective, though first of all, we think the fed means more to broader risk-taking. so last year when you had the

trade flare-ups you also had colin powell saying we're -- in december you had him say we're going to go a few more times in 2019 that stuff is off the table. the other thing that's off the table is politics versus economics. the president is able to have a discourse like this right now because the economics is on his side you just put up a 3% number in gdp growth in the first quarter. as we all know, the unemployment rate is very, very low i don't think it can get to the point where it slips into economics, where it slips into the s&p -- the s&p is like the president's nielsen rating right? so as the s&p comes off -- >> the dow >> i think it's at -- it wouldn't let it slip into economics. i think that's important >> laurie, trade-related pullbacks, are they an opportunity to buy >> i think it depends on your time horizon we've actually thought the s&p was overdue for a pullback we could easily see it going down to 2650, and that would be normal -- >> the year-end target is still 2950 >> yeah, we think we're going to muddle through, come out of this

rough patch. the way we've put it to clients is we're not pounding the table today. we think there could be some incremental down side in the year term but we still like the market >> phil, look at the action in semis. really rough on the latest huawei news. what do you do if you own that sector which has been such a market leader this year? >> so you said market leader and i think technology, sara, at times turns into a flight to quality sector for folks people know these names and they want to come into tech tech is a high beta sector we're seeing that now. semis also are a big sentiment driver it's a macro theme and until this thing really does go slip into something that's more economics than politics, we would agree with lori here, but not much upside anyway for the market here. go find other ways to play upside in the market besides just the tech sector >> some of those tech names you think it's fair that they're pulling back >> absolutely. and you know what i think is really interesting about today's market action, and we saw a little bit of this last week as

well, it's not just the semis and tech hardware names that have this direct trade exposure that are getting hit hard. software stocks are underperforming today. and that's been an unbelievably crowded area that's one of your flight to safeties that people are hiding out in there's some plain old-fashioned profit taking that's going on in crowded and expensive parts of the market >> so you're saying, phil, until we get any kind of resolution, if we get think kind of resolution on u.s.-china trade, do what? >> so at this point we don't believe this is going to slip into an economics issue. upside from the markets still exists right here but only mid to high single digits. and the fed is more important. >> going to defensive stocks >> so defensive stocks and fixed income proxies i think makes some sense because nobody's talking about interest rates jumping to 3%. we're at about a 2.40 to 2.60 range here which makes sense for things like utilities, reits, preferred stocks all of that is okay to get carry in the portfolio sara, another thing, i know we like to talk about stocks here, high yield credit makes a ton of

sense in the wait and see environment that we're in right now. we've got a 6% yield and you get a little bit of spread compression. you can get the same return that you can get in equities with less volatility. >> we're getting a lot of agreement here lori, quickly, you also like utilities? >> we've been saying tactically add to utilities for short-term protection we downgraded health care back in their we would prefer to play utilities as a defensive vehicle. other than that our advice has largely stayed the same. we've been looking to buy staples. we see a lot of value there. of that already had pricing initiatives in place and we've liked areas like financials which are cheap, underowned and are really not caught up in the trade where fears at all >> doesn't matter how expensive utilities bet? by the way, they are the only sector higher again today. >> we actually found in our last update that utilities no longer looked expensive relative to the broad market which was very different from what we saw a few months ago >> lori, thanks for joining us great to sigh. phil sticks around for the full hour we've got? breaking news on hbo julia boorstin has the details >> wilf, the final episode of "game of thrones" was watched by a record 19.3 million viewers

last night across hbo's platforms. that's linear, the live broadcast as well as hbo go and hbo now, the direct to consumer streaming service. that exceeds the previous record that was set by the second to last episode, that was last week, that had 18.4 million viewers. and this is the most watched single telecast on record on hbo ever 13.6 million viewers just for the live 9:00 p.m. airing. so really notable here that this surpasses any other show that hbo's ever had including "the sopranos." that was the prior record holder but it also helped to boost "barry," the season finale with 2.7 million viewers. obviously tiny compared to the numbers we've seen for "game of thrones. really interesting, guys a lot of backlash. controversial episode here and way to end that series but definitely leaves a big hole for hbo as it moves forward. back over to you >> 19.3 million disappointed individuals. >> i don't think it was unanimous disappointment i wish we had exit polls

>> controversial >> people always want -- >> over a million people -- well over -- well over a million people signed a petition saying they wanted to have hbo remake the final season, or the -- i'm not sure if it was the final season or final episode. >> final season. >> final season. so that's well over a million people pretty remarkable. but people care. they're passionate about this show, which is better than the alternative. >> well, either way -- >> i was disappointed. were you >> honestly desperately disappointed >> devastated. >> it wasn't even -- julia, thank you very much. it wasn't even, sara, the way they -- the storyline. i felt there was just gaps they didn't make it all link together lazy >> i wanted to know why jon snow was destined to end up with the wildlings. i thought he was destined for more greatness >> anyway, we have to leave it there. 19.3 million viewers either way i'm sure they won't mind today they've done well. sprint and t-mobile up after signals from the fcc about their

merger but it's far from a done deal we'll speak with an analyst who says the merger will be terrible for verizon and at&t after the break united steel workers president joins us his take on the trump administration's deal to remove steel and umumalin tariffs on canada and mexico. what impact that will have you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade,

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welcome back to "the closing bell." a little over 45 minutes left to trade and we are down 160 its own on the dow let's send it over to mike santoli. >> here's a look at what we're going to be checking out the next couple of hours in terms of all the dials and gauges of what's going on in the market risk appetite, going to take a little glimpse at that the intraday pattern that's been at work for about a week right now. market breadth checkup toward the close. and then the u.s. versus the world. we'll hit all that over the course of the show one way of glimpsing risk appetite in the market, we've been tracking this for a while this is the s&p low volatility these are more stable stocks against high beta. that would be the riskier, more aggressive type cyclical stocks. obviously clear over the last two months or so clear outperformance of low volatility stocks. that's the blue line right here.

i chose this date because that was when the ten-year treasury yield broke from its highs of the year it's been more of a bond-like stock leadership and today we don't have it right here but today the low volatility stocks are outperforming the high beta stocks which has a lot of semiconductors in it by more than one percentage point. even though the market remains relatively close toyotas highs we've had this bounce in the last five or six days, you still have a little bit of a defensive undertone. so we'll have to monitor that, guys, to see how it proceeds from here. >> mike, thank you so what do you do? that's a pretty big gap. >> you'd better have a well-diversified portfolio that speaks to some of the crowded trades in the market nobody liked the low vol stocks. not a lot of folks were in those. and the fed is telling you, right? the fed is telling you you'd better have a diversified portfolio. stuff that can get you carry and stuff that can get you growth. >> like what >> so the carry trades are -- i mentioned the high yield credit in the last segment -- >> but high yield-c isn't that high vol >> no. not as high vol as those beta

names -- >> like semis. >> like semis or tech. i think it's telling you to go find diversified portfolios not just in the equity market but also in the fixed income proxies within the equity market as well as the creditor carriage rates and it doesn't have to be corporate credit it can be other parts of fixed income as well >> play it safe i guess is the message. >> yeah. >> u.s. officially reaching a deal to lift the steel and aluminum tariffs on canada and mexico that happened friday in turn canada and mexico now saying they will lift their retaliatory tariffs on the u.s joining us now to discuss what it all means for u.s. manufacturing and steelworkers, leo gerard, international president of the united steel workers of america leo, thanks for joining us >> good to meet you. >> what impact is all of this going to have, the new decision to lift the tariffs? >> i think it will have minimal impact part of the reason is the canadian and u.s. economies are very well integrated but in particular in the steel industry if you go back over the last, say, ten years, one year there would be a small surplus

for the year, another year there would be a small surplus for canada depending on what was happening primarily in the construction and auto industry. and i think the administration wanted to put those tariffs on as leverage for their bargaining on nafta but also to send a message to the other countries and we've always taken a position that there ought to be strong tariffs on china, south korea, vietnam, india. every one of those countries cheats they don't play by the basic rules of trade or the basic rules of the wto so i think once the shock of lifting the tafshsz each way against and for i think that it will calm down and we're going to support the government and in moving its agenda to take china on we can't tolerate a 300, 400, 500 billion-dollar trade deficit in manufactured goods from one country year after year after year that's just not playing by the rules. >> are the tafshsz working on china? have you seen a change and is it helping your business? >> i think that we've got to be

a lot tougher with china part of -- if you look at the statistics, while we've been -- the administration has been talking with china they've been flooding the market. because our trade laws don't work very well if we think that they're cheating, we have to fail a case with the international trade excision commission. and from start to finish if we were to win the case you're talking about sometimes up to 18 months and sometimes the remedy is for three years then you've got to go back and do it again the trade laws in the united states and in canada are really backwards. you've got to demonstrate you've been injured before you can ask for some relief. and how bad the injury has to be so you lose thousands of jobs, you win a trade case i think the administration has to get a lot tougher with china. i mean, i heard you just talking about howie a little while ago huawei is going to put stuff into this country at less than cost they're looking at making electric buss and they want to send them over from china. i'd just as soon have a fight

for clean air, clean water inside this country rather than wait for china to send their junk to us >> yeah. there's also concerns that they're spying as well leo, there's a lot of -- >> let me just interrupt there's not a concern that they're spying we know they're spying our steelworker computers were hacked and we went to the commerce department, we went to the justice department and we indicted now it's three, four years ago we indicted five chinese who were crashing our computers. us, the u.s. steel and westinghouse were being crashed. we know they're not playing by the rules. we know they're cheating there's no question about it it's what are we going to do about it >> i just wanted to get quickly your thoughts on the thought that now that we're done with the canada and mexico steel and aluminum tariffs do you think it was productive did they work? >> look, i think they didn't work they didn't work for either country.

and there was not a big change the tariffs against each other were a wash. and the reality is while we were spending that time debating two countries that play by the rules the countries that weren't playing and don't play by the rules have been flooding our market our trade deficit in durable goods has gone up, not down. and that's coming from china, india, south korea, indonesia, turkey and so there's an onslaught from every country in the united states and canada need to put safeguards into their legislation so that we're not going to be victimized by unnecessary and unwarranted surges in our capacity >> leo gerard, thanks for joining us today >> glad to be here thank you. >> still ahead on closing hour, much more on tariffs and trade we're going to talk to the ceo of drilling services company canary big impact on the energy industry from this trade war and up next, shares of tesla falling as one firm sounds the alarm on elon musk's profitability plan we'll discuss whether the stock ye-tfr i b back omtsig aro-date plunge.

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welcome back tesla trading lower by around 4% today after wedbush cut its price target on the stock to $230 from $275 the firm cited major concerns about ceo elon musk's growth plan, saying the path to profitability in the second half looks like a, quote, kilimanjaro-like uphill climb. i think also quoted as a

herculean task >> they also said they were in a code red situation this is from dan ives we had on three weeks ago as a bull. >> as a bull later after that appearance he went to neutral. i think this was a calculated step down from buy to sell rather than doing it in one switch >> sounding bearish. though he came on as a bull in our debate he was getting there >> today's move follows tesla's nearly 8% drop on friday after the ntsb found out the autopilot technology was engaged during a fatal crash in march colin, thanks for joining us one of the key parts on this downgrade is based on whether the company can hit model 3 production targets this year do you think that's a key stock price mover for the rest of this year and will they hit the targets? >> without question. the volume and gross margin is the real driver for the stock. and really more than the volumes we think the gross margins per unit are really what's going to drive the stock. and it's really going to drive

the profitability for the organization so we look to things like this recent acquisition of maxwell, which we believe can drive at least 20% cost reduction on their battery packs, which is a huge cost driver for the company as a key strategic decision that they recently made and really when you look at the global sell thru here with some weak numbers coming out of china, all the tier ones and auto company lowering expectations for the year, there are some real concerns now, on the bright side what we are seeing is a substantial sell thru in europe there were some slightly disappointing numbers in april but largely on the year we've been up 40% year over year on electric vehicles, which is a good sign for tesla and certainly they've been performing well over there so we're watching this very carefully but we think the guidance is achievable there's certainly demand there and the big variable for us we don't know how is really the gross margin >> so colin, the stocks and the bonds are hitting new lows it's been battered, down 40% so far this year, and you're

hanging your hat on cost savings for tesla? >> no, we're not hanging our hat on cost savings. we're hanging our hat on the spread between their cost structure which we think is reasonable and their ability to sell through and we still think that's very much intact. the big issue on the stock here is the company's no longer getting the benefit of the doubt on the market given the growth in the company but also erratic behavior from the senior management and a lot of changeover in the last year and a half we still think there's substantial demand for tesla and that there's still at least two or three years ahead of all the other oems in terms of having uvs in the market and the consumers are well ahead of where the traditional oems are at this point. >> given half-some of those concerns we've seen in terms of the track record do they deserve the benefit of the doubt >> at this point there's some show me to the story at this point. they've put up some very good quarters in terms of generating cash they had a disappointing first quarter. so the second quarter is incredibly important for them to build back some credibility in terms of projections for the market and their ability to

deliver on the volume. >> okay. colin, thanks for joining us appreciate it. colin rusch from oppenheimer funds. >> up next, executives from nike, adidas, skechers and more sending a letter to president trump strongly opposing plans for new china tariffs. we're going to talk to the footwear industry leader about why he's calling the proposed move "catastrophic." woman: my reputation was trashed online,

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call reputation defender at 1-877-492-6705. here's what's happening at this hour. chicago's first female african-american and openly gay mayor taking the oath of office. lori lightfoot sworn in with her wife and their daughter by her side she told the crowd she's looking forward to what she and chicagoans can accomplish together >> i'm looking ahead to a city of safe streets and strong schools for every child regardless of neighborhood or zip code a city where people want to grow old and not flee a city of sanctuary against fear where no one must hide in the shado shadows. a new hampshire cafeteria

worker who was fired for giving a hungry student a free lunch has been offered a job with world-renowned chef jose andres. she previously declined an offer to get her old job back. >> the student brought the money in at 7:30 in the morning, and that afternoon the district manager called me aside and fired me pretty much said that that was theft because i let him leave the kitchen without paying for it i would do it today if i was still there. >> you are up to date. that's the news update at this hour guys, i'll send it back down to you. >> sue, thanks so much for that. we've got a little under 29 minutes left of trade. let's get back to mike santoli for more from the market dashboard. mike i don't think we've got mike's mike there but we'll get back to him if and when we do in terms of the broader markets all the sectors in the red at the moment on the s&p. absolute levels aren't quite at the lows of the day but it has

broadened out with the nasdaq down 1.5%. tech the worst performing sector utilities are now in the red as well all in the red, phil going back to that point you want to get into the safe haven names, broadly, though, for the market do you want to stay back until you see a bit more of a pullback >> what i was saying earlier about the trade deal now being priced out of the market, that's worth about 3% to 5% in my opinion. the market's down about 3% month to date. but here's the deal. i think both sides of this china and u.s. kind of policy maker front have puts underneath the market i think the trump put is certainly there, that if this thing does slip into economics and you start to -- he's not going to let it go that far because that affects the re-election campaign and i think you saw that in december wilfred, on december 1st we had trade peace. it was a 90-day time out the market dropped from december 1st to december 24th by 15%, plus with the fed.

and i think that's the bigger story folks should be talking about. >> mike, i think your connection is back up and running what have you got for us >> i hope so, wilf we're taking a look at thin tra day rhythm that's been in force for the last week or so. since that big monday sell-off of last week there's been this pattern where we have weakness overnight into the opening of new york trading and it's illustrated here by the s&p 500 futures contract this is basically 24-hour continuous trading the circles are at or near the new york market open at 9:30 you see this pattern of rallies pretty much every day. now, sometimes they roll over. we've had some weak closes as well but it seems like almost every day we've had this pattern today aswell but we have rolled over as well. giving back some of those gains. what's going on? some people have said it's global investors with global concerns on a net selling basis and then the new york market you have a little more of an instinct to buy the dip. also of course big companies active in buybacks that happens during the regular session. it's the kind of thing that once too many people notice it and start to bail on it it's not going to last anymore but it has

been one feature of the relative resilience of the market, just not kind of buckling all together every morning it seems we've had a rally. we'll see if it lasts. >> cramer always calls it's pajama traders and there is this view, mike, that you can't trust what's going on in futures these days >> yeah. and i'm not sure if it's more the case now than it used to be or if the fact that it's people looking at trying to handicap exactly how certain headlines are going to trade when you have kind of full strength participation during the day it's very difficult to know. but what's unusual, i think, this time is the contrast is all to one direction you've had weakness overnight, then bounces it's not just they're wrong way in both directions it's almost all kind of weakness into the open. and then at least an attempt to pick up the slack. >> just need those bearish europeans to stop trading. >> get out of the way. >> i wasn't going to pin it specifically on europe >> well, today it was.

mike, thanks adidas, nike, all companies among 107 of them penning a joint letter to president trump today urging him to remove footwear from the list of proposed tariffs saying in part "it is an unavoidable fact that as prices go up at the border due to transportation costs, labor rate increases or additional duties the consumer pays more for the product. the significant tax increase in the form of tariffs would impact every type of shoe and every single segment of our society. let's bring in matt frese. he's the president and ceo of the footwear distributors and retailers of america matt, sort of alarmist warnings coming from your group how bad is it going to be if we do get those 25% tariffs on footwear >> yeah, that's a great question because you have to understand, we've been paying billions of dollars in duties on footwear since 1930 just last year we had a $3 billion duty bill.

if there are talks on a 10% tariff on goods already tax add cross the border we're looking at an additional $3.5 billion on chinese footwear alone that's a $5 billion duty bill just on chinese footwear and it's an unavoidable fact that as prices go up consumers pay more, particularly in the footwear industry. we wanted to send an alarm that this is going to be a catastrophic event if the president proceeds on this and we wanted to make sure he understood the history that we're already paying duties to this day anyway. >> suggesting it would be a catastrophic is pretty severe, matt you wrote if it goes through it will be catastrophic for our industry and every american family i mean, even if their footwear costs go up 25%, is that a kafr catastrophe for every family >> if you think about it, the average import duty is about 1.8% on all consumer goods we average closing in on 12% and some of our footwear is upwards of 70%

so if you're going to attach 25% on top of a 70% duty on a cheap plastic shoe that's sold to working families in the united states, we seem to think that that's going to be a challenging environment that you're going to ask these working families to pay more for their footwear. this is a consumer good that people need. it's not a luxury item it's not flat-screen tvs or cigars or whiskey. it's footwear. so when we're asking the american consumer to purchase a product overseas because almost 100% of shoes sold in the u.s. are made overseas and it's on a product they have to buy because it's footwear, and you're going to jack the price up an additional 25% on top of the duty rates already paid, we think that's just unfathomable when it comes to asking the american consumer to pay for more of this china trade war >> and you guys put out some great data i covered it last week just about how much the shoe price would increase, whether it's a basketball shoe or a hiking shoe. and it's stunning. my question is if you guys are already, if this industry is already paying such high import

duties and tariffs, why not support the fight? because president trump is trying to level the playing field. he's trying to get better terms for american companies that do business abroad and it sounds like the shoe industry needs that pretty badly. >> well, the terms as you talk about them, sara, are the terms the u.s. government applies to our imports. so if the u.s. government is in position to eliminate all tariffs on all footwear coming from china, we would applaud that immediately but that has not been part of the discussion as far as we can tell as far as we can tell, it's utilizing tariffs, it's utilizing the american consumer to meet a goal that i think we all find laudable, going after the chinese on forced technology transfers and intellectual property protection, using american footwear consumers as levera leverage it's such a blunt force tool that is used upon the american consumer so again, if the terms are what the u.s. government's going to charge the american consumer as it buys imported footwear, we've

been calling for the elimination of all footwear duties for decades and we will continue to do so. >> matt, can these companies not move where they produce these items? >> they can move it's a difficult process, though unlike apparel and other consumer goods, footwear is labor-intensive. it takes a lot of infrastructure, a very skilled workforce. the industry has actually been moving even prior to president trump's election the industry was moving to places like vietnam and cambodia and indonesia because at one point 93% of our volume came from china. and that number is at 69%. so the industry is moving but it can't move quick enough to take on additional tariffs over the summer if that's the way the administration wants to go and you have to realize that a vast majority of americans purchase shoes at mass family retailers. so asking them to pay more at walmart or target or other places, most of that footwear does come from china because it's got good value, it's good

quality, and consumers can afford it. so asking that whole section of our industry to move is one of the challenges that we see >> matt priest, thanks for joining us >> my pleasure >> 20 minutes to go before the bell here are some stats at the big board. more new lows today in terms of 52-week lows versus highs. 80 new highs, though, and things are improving a bit as we get to the close. at the start of the hour, wilf, utility the only group up. now it's energy joining the possession fcc, sprint, t-mobile reaching an agreement on merger condition ppz we're going to dive into the winners and losers >> plus google cutting ties with chinese equipment manufacturer huawei we'll break down the smackdown and who could come out on top.

welcome back 16 minutes left to trade the s&p's down 0.7%. meantime t-mobile and sprint paring some of their earlier gains after the justice department reportedly leaning against approving their proposed telecom merger that's just hours after the fcc chair ajit pai announced his backing of the deal. jonathan chaplin from new street research joins us now to discuss. jonathan, yo-yo session in terms of this news flow and the stock price move what's your take on the fact that the fcc is so clearly backed the deal and now the reports suggest the doj is not backing it >> this morning when the news came from the fcc that they were in favor of the deal, generally we hear from the doj first and the fcc follows. we assume that the fcc and the doj were on the same page because they almost always are it never happens that the two agencies split on a deal like this so the news this afternoon is really perplexing. we don't know whether it means

the doj's going to ask for concessions over and above what the parties have negotiated with the fcc or whether they're really going to try and oppose this deal. but if they try and oppose it with the expert agency having given the deal their blessing it's going to be a tough fight in the courts. >> so you've never seen the doj and the fcc disagree like this >> i've only been covering the sector 18 years. in those 18 years i've never seen it happen it might have happened before then but this is really unusual >> so what does an investor do yes, the stocks are still up do you buy on prospects that the fcc's backing will be good enough for the deal to go through? >> so you can buy t-mobile because t-mobiletion in a great position whether this deal goes through or not sprint is much, much more precarious sprint, if the deal goes through we think it's worth 10 bucks if the deal doesn't go through it may well file for bankruptcy. so that's a nerve-wracking name to try to play with the state of affairs being what they are today. >> if it goes through, what does

it mean for at&t and verizon >> i think it's bad for at&t and verizon. i actually think the fcc reached the right conclusion that this deal being approved is actually good for consumers and it's good for consumers because t-mobile's going to be incredibly competitive with all the extra assets they get from this deal, which ultimately is going to be bad for at&t and verizon >> what about dish you've got sort of an against the grain take on this one >> yeah. it cuts both ways for dish if the deal's blocked, t-mobile probably needs to do a deal with dish and they need to do it quickly. if the deal goes through, t-mobile's obviously off the table as a partner for dish but it increases the pressure on verizon and at&t to do something with dish. from my perspective pushes out the timeline on dish getting a deal done but doesn't take away the prospect of a deal at all. and i think in a scenario where it's verizon and at&t doing a deal with dish dish's spectrum is probably going to get a higher value than if it was t-mobile >> just sum it up.

which is the top pick of all these ones you just mentioned with with twher in the moment? >> amongst the group i think the one name you can really play with confidence is t-mobile because they're in a good position whether this deal goes through or not >> well, i mean, do the at&ts and verizons fall into your bond proxy safe havens? they do pay high dividends >> it's the dividend story sure and i think when you talk about whether this merger goes through or not it speaks to whether is this a pro business administration or not. that's something -- we talk about things like lyft, uber on the ipo side the m&a side is another big important sentiment driver for investors. i think most would like to see something like this go through for sentiments there. >> jonathan thanks for joining us great to see you >> thank you >> we have got 13 minutes left to trade up next we're trading the close with a top strategist at barclays why he says trade headlines may soon create more meaningful market eecffts back in a couple minutes down 0.7% on the s&p et they're

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listen to your mom, knuckleheads. hand em over. hand what over? video games, whatever you got. let's go. you can watch videos of people playing video games in the morning. is that everything? i can see who's online. i'm gonna sweep the sofa fort. well, look what i found. take control of your wifi with xfinity xfi. let's roll! now that's simple, easy, awesome. xfinity xfi gives you the speed, coverage and control you need. manage your wifi network from anywhere when you download the xfi app today. what's your take on today's action and people's positioning? >> hey, guys how are you? so a couple of things we're focused on today are really kind

of overall volumes firstly which are very low and with the bond market not really moving it's not really saying to us that there's a flight to safety. so the semi universe is getting hit pretty hard with the escalation of the trade talks over the week. our take on that is i think investors had sort of an inflection for the second half baked in and with huawei kind of frontloading their orders by three to six months it could be a little trouble for that space. and given the sox is up still about 16% year to date, it's outperforming the s&p, it is pretty droud crowded, it's part of the momentum trade, that's something that's clearly in focus for us so i would say we're looking at overall volumes which are low. the action in the semi space which is a little disconcerting. and just overall not a real ton of panic given what we're seeing in bonds. and as well when i talk to the guys on my floor we're not seeing a real demand for protection on the portfolio level. a little bit of complacency. my guess is we kind of trend back and forth a little bit around these leflsz and i think

the rix-reward remains pretty solidly to the down side just given that there is very little protection on and the headlines continue to be negative. >> i was just going to ask, mike, how you think investor are processing all of the trade news day to day and whether -- you know, there's real worry about the economic impact here and it just seems like uncertainty. >> i think it's becoming a little more of the former where there's a worry about kind of what the economic implications are going to be if f. this continues to escalate and go further. i'm not going to go into the speculation that's out there because obviously it's speculation. but if it were to continue to worsen, the economic impact would definitely be real some of the costs would be passed on to the consumer and the effect on earnings would be pretty poor too. so right now, like i said, i think the thing we focus on is positioning, which coming off of last week is a little bit cleaner. for instance, part of the reason we think that the dips were bought so aggressively last week were some big collars that were on some big funds out there. that has probably dissipated a

little bit, and positioning overall is cleaner so as the headlines continue to suggest that things get worse my guess is there's a little bit more down side >> okay, mike, thanks very much for that mike lewis at barclays phil, final thoughts as we go into the close hearing that take, the fact the volumes are low, do you think there's a little overreaction in some of the semi names for example? >> i do. there's been about 116 billion in equity outflows this year remember, the fund manager survey coming into this year was the most overweights by fund managers to cash since march of 2009 very, very different from positioning standpoint one of the things, the curve, i think the spread between 2s and 10s is an important sentiment driver we're at about 20 basis points positive we got down to about 10 in late march. as the curve goes i think that'll drive sentiment. and rate vol, currency vol that stuff is not saying go panic. right? it's saying okay, this is a political issue that needs to work through, not yet an

economic one so those are some of the things we'll keep an eye on >> we have six minutes left to trade up and next we'll be back with the closing countdown we've got all the angles covered for you with mike santoli, bertha coombs and bopini 'lbeack in a couple minutes. i'm working to make each day a little sweeter.

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trade. let's wrap up the day's action with mike santoli, bertha coombs and mike pisani. mike, first to you and your market dashboard >> number 4 is market breadth. just to check up on what the advance-decline looks like right here it's been decidedly negative all day, about 1 to 2 up side to down side volume. it has not worsened throughout the ay so that's basically a solidly kind of negatively skewed number but not overwhelmingly so. also there are more new lows than new highs on both the nasdaq and new york stock exchange also not unusual on a day when you've had the market down the way it is. but it's nothing that says this is some kind of big washout or panic. it seems like it's pretty well balanced within the context of a down side day. i did also want to look at the equal weighted s&p 500 that's an etf that basically holds all stocks in the s&p in the same amount it's often a little bit of a proxy for what i might call the average large cap stock. sometimes there's a variance with how it trades against the s&p.

today it's pretty tight. you see the equal weight version barely outperforming the s&p 500. maybe that's not a surprise on a day when apple, a very heavyweight in the s&p, is down almost 4%. i will now send it to the nasdaq for bertha >> thanks very much, mike. it's basically a story of tech continuing to fall here in the face of concerns about chinese tariffs. if you take a look at some of these indices, they aredown today. since may 3rd, since the president had his tweetstorm that started the whole thing earlier this month, we've seen the large cap tech down about 5% or so. but chips are down about 13% apple is down about 13% during that period on concerns that they are going to see higher costs for their components when you take a look at chips that are apple suppliers and also huawei suppliers. it's a double whammy for them. they are among the worst performers today including qualcomm, broadcom, qorvo, xilinx, all of them saying they're going to have to suspend

doing business with thetelecom giant. but it's not just those names today moving lower on the other side a little bit of relative strength not a whole lot positive in the nasdaq 100 t-mobile hitting a new high on that news from the fcc, although it is off its highs over at the nyse bob pisani is looking at what's happening with a lot of those big names on the big board that are also affected >> thank you, bertha no signs of any thaw in u.s.-china relations that's the problem new lows on 3m just take a look 3m was 20 a month ago. you can see the move down from there. same situation with caterpillar. not a new low but qatarar pilar was 140, 141 about three weeks ago and it too has been moving down not quite a new 52-week low. maybe better to stay domestic. remember medicare for all? united health had a big, big drop about a month ago down. it's almost recovered almost all of that losses there speaking of domestic, travelers is just shy of a 52-week low that hasn't happened in a while.

and today utilities, 12 of the 24 new highs at the s&p 500 are utilities. wilf, sara, back to you. >> thanks very much. the bell being rung here at the big board. at the nasdaq the children's diabetes research foundation we are down 0.7% at the close of the s&p. the second hour of clbltd clblt starts now and welcome to "closing bell." i'm sara eisen >> and i'm wilfred frost along with mike santoli, cnbc senior markets commentator here's how we're finishing the day on wall street the dow down by 85 points. the low of the session was down 200. well off the lows. we've revisited the lows in the final hour of trade but had a nice pickup in the final 20 minutes. s&p down 0.7%. nasdaq down 1.5%

russell only down 0.7. tech very much the worst performing sector on the s&p three sectors positive, energy, financials and utilities >> apple that has been really one of the pain spots in this market as these trade tensions continue and as a deal looks farther and farther out. apple lost another 3% today. it's now down 22% from the highs. if you are worried about this rising sort of nationalism, anti-american feeling in china which was the story of the day, china tv apparently now showing korean war films to stoke anti-american sentiment. you look at apple it was at the bottom of the dow today. >> it's not just about the supply chain companies like all the chip sectors, it is also exactly about the companies that sell a lot of finished products into china like apple. other interesting thing, pretty calm market, pretty calm dollar. again, dollar's been edging higher steadily but pretty much flat on the day and no big moves even though it's seeing a lot of volatility in the equity market. >> joining our post-game panel to talk about today's market day, victoria fernandez, chief

market strategist at cross knock global investments ian winner, member of the drexel hamilton advisory board and phi camporeale still with us, head of asset -- at jpmorgan. you did see some place that's are hard hit that are involved in the trade war like chips, like apple what stood out >> what stood out is the market's continuing attempt to try to ring fence the tariff victims and try and sort of separate those that are directly impacted and those that aren't so at the open once again you had a big sell-off coming in seemed like there might be some down side momentum rallied right away off those lows not for any particular reason except that the market seems like there are bidders in this zone around 2800 on the s&p and i think to me the mixed performance is again the market's attempt to try and kind of place the trade issue in some kiebds of a context and not make it everything about the market right now it's some success.

five days into this process. it's not clear it's going to necessarily last but that to me is the takeaway semis are down 3% or 4%. and the overall market's down a little more than half a percent it tells you that's what was happening. >> do you think the dangers around trade are fully priced into the market? >> not at all. i think the consensus is largely that either there is going to be a deal or even if there isn't we're going to win it pretty easily i get the sense most investors think something will get done. so i'm pretty sure that there's asymmetric risk to the down side here and i'd be surprised if something gets done anytime soon i'm a lot more concerned about the effects and the economic effects that i think we're already seeing because of this trade war. >> part of your thinking on, that ian, is if this continues to escalate that china's actually better placed to win the battle than the u.s. is that right? >> absolutely. we forget that they're an

autocracy. we always talk about how we're stronger economically. but who's to say what they're going to actually tell their people and if their people ever say anything they disappear. meanwhile, our soy farmers and everybody else has real-time information about how these tariffs are hitting us so i'm not so sure we're in such a strong position when it comes to winning this trade war against china. >> victoria, if you look at which sectors did well and which didn't, utilities on top again as a safe place to go. but financials and energy also closed positive. what does that tell you about where you want to be right now >> when we're looking at our investments we've started making the shift a little more toward value stocks than toward growth stocks and i think you're seeing a little bit of risk off people looking maybe for some of the safety in the utilities, the more bond-like vehicles that we see. i think it's good to see financials come back because they've taken a big hit and it's no surprise that we saw the chips and the tech segment

really take a hit because of the huawei ban it's not surprising to see that. the i like that the market came back off of its lows i think that tells us there's some momentum going forward and we're reducing some of the noise to particular segments and that we need to take a longer-term look and make sure you're well diversified. >> the nasdaq got hit hardest of the major indices today. let's go bertha coombs for the breakdown of what took place there. bertha >> and really the chips were the big sinker for the nasdaq. smh, that's the etf, now down below its 200-day moving average as well as its 50-day moving average, closer to bear market territory. today it traded on very heavy volume you take a look at the large caps that were lower a lot of it continues to be this whole china trade fallout. now you have to add alphabet to the group. they will not be selling technology and licensing their technology to huawei call tomb and broadcom in addition to suffering issues over apple and its issues in

china will also not be selling to huawei on the back of that ban. a little bit of relative strength we're seeing in health care health care wasn't positive today but a few of the names within the nasdaq 100 were in that space it's something we'll be watching tomorrow at the second annual cnbc healthy returns conference. back over to you >>ing all right. bertha, thank you. which brings up health care. so where does fit? is it a defensive flay right now or growth? >> it's a defensive play you n. our opinion the point i want to make about technology, what we're talking about here-s we got a blptd for this, guys we were in a trade war for months last year and then once apple -- you mention td, sara. once apple started to warn about future earnings all of a sudden december 1st came and we got a time out on trade. it's not like this is all brand new ground for us. we got the blueprint last year we got the really bad price

action on the nasdaq in october of last year, which eventually led to the time out on trade and i just don't think investors should forget that as they're battling with the volatility going on right now specifically in tech >> in terms of sector plays, victoria, we'll get a further set of numbers on the consumer this week with retailers reporting. do you like that sector? >> you know, we do like retail we have some of the names that are actually reporting this week in our portfolio home depot is one of those target on the fixed income side. we think consumer is the foundation for the market to continue to trend higher not that we won't have pullbacks but the consumer is doing pretty well we saw university of michigan sentiment come at a 15-month high we have average hourly earnings continuing to be above 3%. productivity's doing well. so i think there's a lot that can bode well for the consumer that's going to continue to push the markets. we'll be watching these earnings coming out this week kind of gives us some idea how the momentum's going to be for the rest of the quarter.

>> what is the latest read we're getting on the consumer? >> i think you can make the case right now, sara, that the consumer has never been as healthy in the cycle as they are right now. so victoria mentioned wage growth i think the really important thing is the ten-year treasury we're at 2.40. people are loving their mortgage rate again people are loving their borrowing rates again. so i think the consumer from a debt standpoint is in a really good position because of how low rates are. nobody's talking about rapidly rising rates, sara the ten-year note means more to the u.s. consumer than the federal funds rate ever will because it drives the housing market >> you're probably worried about the tariffs that are threatened or would impact the consumer those extra 300 billion. >> you don't even have to listen to me. listen to the ceo of walmart listen to all the ceos of sleeper companies. they're telling you prices are going up and it's great the consumer has all these great data in the rearview mirror but everybody just seems to think they're just

going to absorb all these price increases and there's not going to be any issue with that. you know, you still have a lot of people struggling out there and a lot of those people shop at walmart so i'm not sure why we're so convinced that the consumer's in such great shape and is going to continue to be in such great shape going forward. >> i just wanted to add this to the mix. let's talk fed and how it relates to the markets atlanta fed president rafael bostic sitting down with our steve liesman earlier today dismissing expectations for a rate cut by the fed this year. listen >> the market is ahead of where i am so i would say i'm not expecting a rate cut to be imminent, certainly not by september i'm open to moving either direction, and right now i'm not really tilted to the cut side as opposed to the hike side >> i mean, is it a problem that the market and the fed are on different pages? >> it's not new. it's not a new problem if it is. but i do think -- >> it's still jarring to hear a fed president talk about it. >> there's a tension first of all, he's reiterating

what the fed has been saying it's the market that has decided to anticipate a change that the fed's not been prepared to signal so at some point there could be a little bit of an issue, a clash of these viewpoints, but it's hard to say how it plays out. right now we have stock market no doubt being supported by very low yields and the sectors that do well when yields are very low and growth's expected to be slow the market is kind of crying for a rate cut at the short end. as time gets closer to the end of the year when this cut is anticipated yeah, maybe there's going to be something to upend that picture but if it means growth is a lot better, earnings estimates in the second half look achievable, it doesn't necessarily mean the stock market has to take pain for that >> we should point out as well bostic not a voting member whereas bullard who is makes comments about consistently low inflation over the weekend >> he's been quite dovish for quite a while. >> but i take the point of what -- phil, overall trade we talked about a lot is the fed the most important

factor for equities? >> so we believe it is once they said on january 3rd we can dramatically change our approach to monetary policy the market jumped. right? trade was progressing in the right direction but it was really the fed and once the fed said last october that we're far away from our neutral rate market started to tank. i think the fed is the most important part we don't believe an ease is going to happen this year either we would agree with the atlanta governor there it's all about inflation if jerome powell is right and those temporary effects on inflation, things like apparel, things like airline prices, things like portfolio management fees, if that stuff is temporary the fed is not going to ease and you don't want the fed to ease i really believe that. you want the fed to be continuing on a pace where they're meeting their mandate. plus if they're easing stock market's going to be lower, wilford. >> do you want the fed to ease >> i don't think they're going to have a choice but yes, i do want the fed to ease and i think if they've shown

anything over the last decade, it's that they don't know how to forecast and they showed this year that they're not really even independent anymore. sought rhetoric to me is just going to pick up from the executive branch about cutting rates and cutting rates and even doing q.e. and as we get closer to 2020 i think they're going to be erring on that side and so i actually think that's the reason the market's going to hang in there, is because of the federal reserve. >> victoria, you added to a couple of stocks last week i believe. what were they >> yes, we did we added to mcdonald's last week we added to palo alto last week. just again going back to that value play that we've been doing, s.d. waters another name that was a new addition to our portfolio. just looking for names, not necessarily specific sectors but looking for names that we think had some value when we had a pullback in the market and we think will do well going forward. >> okay, guys, we'll leave it there. thank you very much, victoria, ian, and phil for joining us phil in particular for the full

hour and ten minutes or so up next, hanging up on huawei. what google's latest move could mean for other u.s. tech giants. >> and tariff turmoil. the ceo of oil services company canary says the u.s.-china trade war is putting u.s. energy dominance at rk.is he will explain why, coming up ♪

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big story today, google restricting huawei's access to some android devices additionally chipmakers like broadcom, xilinx, qualcomm, reportedly telling employees ton supply huawei until further notice >> this comes after president trump signed an executive order barring u.s. companies from using telecom equipment made by firms that may pose a national security risk. joining us to discuss, gene munster from luke ventures and ed snyder from charter equity research a very good afternoon to you both gene, if i start with you, there's a lot of back and forth as to whether the broader trade dispute with china may improve in due course. given that this is on national security grounds do you think the writing's on the wall more long term for huawei in the

u.s. >> it is, wilfred, and i think there's an important distinction. there's the trade bout and then tech and somewhere in between. and the degree that the u.s. government has been kind of cornering huawei here is a tough position to back off from. so for example, on the trade side of the tariff we could have an outcome where the powers come together and there are some announcements about new lower tariffs. but that doesn't change some of the branding that's happened around huawei as basically an actor for the state. so i think that huawei's in a tough -- they're in a tough position here and i want to true to enumerate that quickly. they have 24% global market share of smartphones about 2/3 of that comes from outside of china and that segment, if there are components that are being pulled back or services like google that get removed undoubtedly that's going to have a negative impact on their demand and so to put it's most simple way this is some significant

damage that's being inflicted to huawei that's going to be hard to reverse >> i'm glad you did that because it's not a household name in the u.s. and 180,000 employees work at huawei. who's the most exposed in terms of u.s. names? i mentioned some of the chip sector what's that relationship like? >> in terms of u.s. suppliers -- go ahead okay sorry. u.s. suppliers, the most exposeed is qorvo which sells a lot of components that go into those handsets skyworks is in there broadcom's got a little bit of exposure and then you've got semiconductor guys like cree who provide wafers for them. most of that will be dislocated short term and come back into the long term. that goes into the phones. what huawei winds up not selling in phones samsung will and awful those guys supply samsung too.

mostly short-term dislocation. there will be some probably long-term problems with revenue because the effect of this is going to krim huawei not just in phones but especially in base stations for cell towers because china's going to have to slow down their 5g rollout and the rest of the world is going to slow down purchases for huawei on the base station side and that won't come back anytime soon >> gene, should companies like apple be concerned there could be retaliation, whether direct or just more generally some kind of boycott of american brands in china? >> unfortunately, wilf, i think they should be concerned about that and to quantify that risk is 15% of apple's revenue comes from what they refer to as broader china. probably about 10% of that revenue comes from mainland china. and i think when you're trying to assess apple's risks, i'm a firm believer that apple is vastly undervalued right now and there's tremendous upside. but let's talk about the next

few months here and break down this tariff into two pieces. one is tariffs on potential products coming into u.s. and i think the probability that am falls under that is extremely low. the second is the risk about china like you're talking about. i think that that is a moderate to a high risk that when you see little things, subtle things like "game of thrones" not being shown in china, there's ways in social media that that can recoil and have a negative impact on apple's iphone business or their broader business in china and the months to come >> ed, finally what do you do with these stocks? >> you've got to wait. none of this is going to get shipped out anytime soon we were visiting a company on friday after the announcement on site and talking to the ceos, one that i named they have been on a conference call with the government and the government is arguing with itself over the implication of this or the implementation of this they have no idea yet. there's no weigh to sort out how big or how long it's going to last for some time

i wouldn't do anything in the short term ultimately, many of these companies will recover and when depends on how this all plays out in the long run. >> gene munster, ed snyder, thanks for joining us. >> it's a pleasure >> thank you >> up next, u.s. versus the world. we're taking a look at how domestic stocks stuck up to global markets mike santoli back at the dashboard. >> later meatless mania. another fast food chain pphoing on the fake meat bandwagon the details when we come back.

s&p down 0.7%. nasdaq and indeed tech stocks az whole the biggest decline dwroirn 1.4% for the nasdaq. >> mike santoli, u.s. which is -- >> we've been talking about how the u.s. market is looking a little sloppy. but just look at the rest of the world. excluding the u.s. it looks like a decidedly more bearish picture. the s&p 500 hasn't gone anywhere in 16 months if you look at the all-country world index subtracting the united states, this is outside the u.s., it fevlthly hasn't gone anywhere since the beginning of 2015. this is a local currency this is not about currency effects necessarily. and it's all about 9% below

where it was in january 2018 obviously we knew the u.s. was a consistent outperformer. the folks at net davis research who highlight this say it seems like a lot of stocks in the world are effectively in this sideways churning kind of bear market type activity and i guess you could spin it a couple of different ways the u.s. has been a bit of a haven, it's more expensive than the rest of the world but it's obviously more stable with a little bit better growth or you can say we're due for a relative -- hard to say what that is. a lot of people i find recently have been trying to challenge the long-term conventional wisdom of the virtues of geographic diversification within a portfolio maybe that's one tell that people are getting too comfortable with the idea. >> china had a pretty strong catch-up bounceback.

>> just by the math the u.s. is now a larger chunk of the overall world market cap as well those other moves while they're significant they don't really drag the u.s. market -- or drag the global u.s. index. >> this is what the president talks about when he says we're winning the trade war, we've got the leverage >> somebody might say yeah, there's also more air under our market for that reason >> mike, great statistics. thanks so much time for a cnbc news update with sue herera hi, sue. >> hello, guys here's what's happening at this hour, everyone the justice department says former white house counsel don mcgahn cannot be compelled to testify before congress about the findings of special counsel robert mueller's report on the russia investigation the report says mcgahn would have immunity as a former presidential adviser it could clear the way for mcgahn to defy a congressional subpoena ordering him to testify by tuesday senate majority leader mitch

mcconnell is introducing legislation to raise the minimum smoking age from 18 to 21. it would cover not only tobacco products but also e-cigarettes and vapor products as well iran announcing it has quadrupled its production of enriched uranium the announcement comes after president trump and iran's foreign minister traded threats and taunts and former south african president jacob zuma dancing in front of supporters after leaving court where he was facing charges of corruption, money laundering, and racketeering zuma was south africa's president from 2009 until 2018 when he was forced to resign by his ruling party guys, i'll send it back downtown to you >> weighing the trade risks. the canary ceo, he believes the china trade war could threaten u.s. energy dominance. and a graduation gift to remember a billionaire investor gave the

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harley-davidson ceo matt levitich sitting down with cnbc earlier today. he weighed in on the impact trade disputes have had on his company's business >> uncertainty robs businesses of the kind of clarity that they need to make investments and most of these investments for most companies are long term in nature. they are for harley as well. we're having to make investments we didn't contemplate a year ago because of this trade situation. we don't need additional motorcycle capacity. but in order to get into europe, whether it's through our thailand investment or if the eu doesn't approve our application through another investment possibly within the european union, that's capacity we don't need that's investment we don't need. so this uncertainty to me is real and it affects every business, every business leader making decisions about how to deploy capital >> guys, it affects harley in particular that stock is down almost 20% over last year they've had real struggles with europe the impact of the tariffs, the retaliatory tariffs. not to mention being the subject

of some of president trump's tweet storms >> and i think interesting that he focused on the word uncertainty there. not the tariffs themselves if there was sort of certainty going forward as to the long-term outlook maybe it would be reduced both involve looking to move production outside the u.s this doesn't help the u.s. manufacturing picture in the way that perhaps president trump would have liked to see it >> it's a reminder that these companies have spent 25 or 30 years globalizing the supply chain and going to where it was most fishefficient to produce now they have what they would view as artificial impediments to what they've always done. for deglobalizing, then they might know exactly how to proceed. but if you don't know if there's going to be a reversal within the next two years of these policies, then you have ways to -- >> the stock's down about 20% over the last one year, over the last 12 months wells fargo on friday pointed to other factors, though. it's very easy when a company so is in the crosshairs to blame it all on trump and blame it all on

trade, but changing tastes, millennials don't like the bikes, margins under pressure -- exactly. it's easy to try to divert attention. >> but to his point, we have less demand around the world and we have to build factories that's not what you normally would do >> on this topic another ceo feeling the impact of the u.s. trade war with china is dan eberhart of canary oil field services in his latest op-ed in "forbes," neverending u.s.-china trade war puts u.s. energy dominance at risk he expresses concern over having to raise prices 15% and the long-term impact on the u.s. economy. dan joins us very good afternoon to you thanks for joining us. >> thank you for having me >> sum up the state of play at the moment have these tariffs made you want to manufacture and in fact manufacture more in the u.s. either in the short term or long term >> they definitely have in the short term we manufacture typically 90% in china and 10% in the u.s this has thrown a bunch of sand

in our gears and caused us to reevaluate what we're doing. but it's difficult to buy capital equipment that costs a million dollars or $3 million at a piece for what may be a short-term or 24 or 48-month, you know, trade situation in the u.s. so it's difficult to make the decision to add capacity but it's definitely caused a bunch of sand in the gears to what we're trying to do with our normal trade partners in china >> a lot of people don't know you because you're private you're a huge oil services, right? business >> mm-hmm. >> when you say this puts energy dominance at risk, what do you mean >> a couple things one the export story i think has been tremendous for oil, tremendous for natural gas and china has gone from being something like the third biggest importer of lng, to 20th as a result of the tariffs. there's no tariff on oil specifically yet, but we've already seen china -- a year ago china bought about a quarter of the u.s. oil exports now that's trickled to 1% or 2% and going to fall to zero.

as far as u.s. oil and export market, china has basically been taken off the table. on top of that is as our costs go up, a lot of the stories are about the costs going up to consumers and the costs -- and that's being a negative. but in the oil and gas business, you know, we can't really raise our costs. our costs are competitive with west african crude, with opec crude, whatever. so as our costs go up we just lose market share. we can't really raise -- the oil companies can't really raise the price because it's a world price with oil we're squeezed on both ends. we don't even have the option of trying to charge the consumer. that's not how the u.s. oil and gas competes >> you mentioned uncertainty as to whether this is going to be a 12-month thing or 36-month thing and that makes it hard to make those capital allocation decisions. if you did know that this was a full-time long-term issue, could you easily move your production out of china and if so once it was moved would it remove the current 15% price increase, for example, you mentioned >> sort of i think one of the implications

i think of this trade war is a forced rebillion to other emerging nations places like india, places like vietnam, and adding capacity there instead of not what trump was originally intending, manufacturing in the u.s but that's much easier said than done we've tried in india we've looked really hard at vietnam. one of the problems with vietnam is they don't have their own steel. then you get into a technical mix of does what you're manufacturing meet a substantial transformation test? if it's made with chinese steel but made in vietnam and exported to the u.s i know there have been some -- not my business but some light goods that have been caught in this gray area but for us it's a big concern. if we put all that impetus into adding manufacturing capacity in vietnam it may not even work because places like vietnam and indonesia, they're getting their steel from china >> in terms of the idea, though, of threatening energy independence and u.s. exports,

the point's been made that it's a world market if china is buying direct from the u.s., they're buying from somewhere. therefore some other buyer has to buy u.s. supplies is that not the case >> i think that's potentially -- i think that's a good point. but you still end up with the export -- the main export market that people want is asia, principally china. that was going very, very well as a way for u.s. oil companies to bring hard currency into the u.s. and was really a tremendous success story. and i think stomping that out hurts places like north dakota, oklahoma, texas and is another kind of unintended consequence to this trade war. one other point on the trade situation is that the tariffs are one thing but it also costs in that it takes maybe six or seven more days to get our stuff through customs. so i've got to have more supply chain. it hurts our partners in china are less willing to invest in newengineering or additional assembly line capacity and so there's other unintended consequences besides just -- it's not just the tariff it really affects the entire

chain and our competitiveness. >> dan eberhart, thank you for joining us >> thank you >> of canary well, it's looking like nothing is impossible. at least when it comes to the meat substitute craze gone on. up next the pizza giant that's looking to rule supreme with its new menu offering. in the film "the social network" the winklevoss twins were supporting players in the facebook story now a new book has cast them as tcn's adbioileing men. their roles in the crypto craze ahead.

welcome back to "closing bell." let's check out some other stories on our radar today while millions of people around the world did tune in to "game of thrones," i think 19.3 million to be precise, that highly anticipated finale last night, turns out fans in china were left out of the excitement. 10 cent video which owns the online broadcast rights in china for the hbo hit announced they would postpone the showing just one hour before it was scheduled to air viewers expressed all sorts of anger on chinese social media. on wab oet site, with some even suggesting the u.s.-china trade war could be to blame. i believe one of our gefrts brought that up as well. >> gene munster did. >> as one of the sources of tension. i don't really get it because it's war-like. >> i don't see the strategy of that >> but it is an american phenomenon >> we don't know if that's true or not what is interesting and what they've been reporting is the nationalistic tone to chinese state media in the last month

has upped significantly versus the prior year and a half of this trade war clearly there's been an elevati elevation. u.s. products being boycotted. >> chinese citizens wanted to consume a product that happened to be american without really hurting the american producer of it is an odd -- >> the annoying thing for them as well is i feel like everything was talking about what happened so quickly you wanted to watch it live and not have it ruined for you >> not so annoying thing is -- >> little caesars which is getting in on the fake meat craze. the pizza chain unveiling its impossible supreme pizza made with meatless sausage from impossible foods little caesars is the first national pizza chain to go meatless but it follows burger king and white castle both of which have unveiled meatless options on their menus. i say this admitting we haven't tried any of these meatless burgers or options yet

pizza's an odd one to bother doing it with because there are so many great vegetarian options for pizza already. it's not like you need to pretend to be having a burger or a hot dog where you might understand -- >> is this a fad is this a bubble or is this a real movement >> it seems opportunistic by a lot of the restaurant chains you're going to see what the market really is for it. but i agree with you, it's not -- by the way, is it vegan cheese or is it real cheese >> that's a good point >> i just want regular cheese, sauce, a little basil. i don't need any fake meat >> but you're also probably not ordering from little caesars. >> no. but i have had my share of little caesars >> meanwhile, graduation season is upon us one commencement address this weekend grabbed all the headlines. billionaire robert f. smith, founder and ceo of vista equity partners offered morehouse college's graduating class a solution to their student debt >> this is my class, 2019.

and my family is making a grant to eliminate their student lo s loans. >> i guess justifiably getting a ton of attention today, bringing a lot of focus on obviously this one gesture which is incredibly generous, but i think focusing in on -- honestly, there's a lot of ways people are attacking the student loan issue right now there's a lot of wall street types who are investing in college graduates' future income part of an agreement it's a new asset class actually. i think there's a growing idea that this is not an insurmountable thing, that there are ways of having forbearance and sort of chopping away. also the debt is very, very concentrated among some small subset that has an enormous amount of debt the average person graduating not a huge amount. >> but actually i went back and looked at the racial component which is interesting given the college and the donation that was made and it turns out recent

black graduates of four-year colleges do owe on average 7,400 more than their white counterparts according to -- >> morehouse is a historically black college. >> yes morehouse is a black college >> and as robert frank's been reporting all day, often gives a huge amount to philanthropy but hasn't always grabbed the headlines before has done now and -- >> i wonder what billionaires and businesses are going to follow through on this -- >> it became kind of a joke but i think there's a reality, it may actually happen that way >> still to come the journalist behind the book "the social network" is now taking on bitcoin. he'll join us next to talk about crypto's wild ride my ideal cloud? it has to work like air traffic control. it's gotta let new data integrate with data from our existing systems. ♪ ♪ be able to pull from reservation platforms built 20 years ago. and also be able to use apps to book super-personalized trips on shiny new phones from the future. plus, i need freedom to move my workloads wherever, whenever -

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bitcoin has been surging lately up almost 50% in the past month as a drop in fraud concerns, conversations about the future of crypto currency are all drawing investors back in. with us now, ben mezrich, author of "bitcoin billionaires," tells the stoish of how the winklevoss twins actually became the first bitcoin billionaires nice to see you, ben pu are you still in touch with them >> i talk to them every day. i'm like the third winklevoss twin right now i've been following them around for a while and learning how they dove from being the bad guys in "the social network" to now being worth billions of dollars in crypto. >> do they deserve the credit of being sort of the bitcoin billionaires >> i do think so i think that i underestimated them and i think this book redresses how they appeared in "the social network. in that they were the archetype of the jock chasing the krat cree kid around the gym in skeleton costumes and now i see them leading this revolution in

bitcoin. >> how much of a gain have they had from this? they were known as losing out for settling for tens or hundreds on facebook but -- >> they bought in at $7 and they bought 200,000 bitcoin they bought about 1% of all bitcoin. so as they wrote it up at 20,000 they were worth billions, 4 billion. at 8,000 they're probably worth close to 2 billion so they did an amazing thing they took their facebook settlement in stock instead of cash and that stock ended up going to around $500 million so they ended up with a very large settlement and turned it into billions. >> were they true believers, are they true believers, or was it purely an opportunistic lottery kind of thing? >> what sold me on doing this story is they are absolutely believers in bitcoin and crypto and the future of this technology so they went in not just as sort of a gamble but they went in both feet in they think it's going all the way to the moon. >> what's your take in terms -- and your take on their take as it were on whether it's bitcoin that's going to go to the moon

or whether it's broader blockchain technology and how that can be a negative for bitcoin? >> listen, crypto is the future. 50 years from now we're not going to be walking around with pieces of paper in cured leather like medieval peasants bartering for things in cash we're using digital technology i think they believe in that bitcoin is the first mover so they do believe bitcoin is the one. >> beyond just investing in bitcoin, what else do they have going on >> they've got this exchange they built gemini, which is a currency bitcoin exchange you can buy crypto with. they built a really large company there. they're both feet in the story tells their beginnings, where they found bitcoin on a beach in ibiza and went from there to here. but they're in. >> are they tracked effectively in bitcoin >> you want it to go up if you have that much of it but they diversified a bit. they're smart guys they're banking on crypto.

if crypto goes, their skank does well you don't just invest in the class, you own the casino. >> i want to ask about facebook, given you wrote the book the film "social network" is based on so often now we hear the intentions are so positive from the facebook founders that it was to connect the world and they care about privacy. do you think that's fair was that always the intention going back to the links, is it more elitist. >> i think, facebook is becoming the mantra zuckerberg always wanted to make he's attempted to change the world with facebook and that's what's happening now we're starting to see what facebook's was always meant to do he wants to change the world for better but we all agree having no privacy is better but that's always his goal whatever they say from the very beginning, i think we got

zuckerberg right with "the social network," he wanted to change the world to make it work like for mark zuckerberg that means we don't have our own game and own privacy and his whole goal from the beginning wasn't just to build a company, it was domination he used that word. i think we're getting there now. >> is there a little shout out with the winklevoss twins? >> i think it's all pride. if facebook launches a gij tall coin, he's thinking about the twins and and twins are driven by what they felt was betrayed fre very beginning the facebook and trying to create something bigger >> matt mezrich, thank you so much "bitcoin billionaire." still ahead -- two things to watch as we head io nta new trading day when "closing bell" comes right back is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals.

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welcome back time for our wall street look ahead, the key things you need to watch tomorrow. we're covering retail and major earnings tomorrow, dan ehrlich keying in on housing data. and standing by with more on boeing's big week ahead. court, let's start with you. >> tuesday is a big day with retail earnings with home improvement to the higher end. one theme to watch is the impact

of weather home depot reports first the weather for the important spring selling season hasn't been ideal it's been cold and wet for many parts of the country, making it hard tore do those projects outcan doors still analysts are expecting comparable sales to grow more than 4%, which is stronger than last quarter's rate but on par with the rate from last spring three department stores, choelz, jcpenney and nordstrom also reporting tomorrow analysts don't forecast positive comparable sales for any of the three, even though rival macy's did see a comparable sale gain in the first quarter the one wild card with retailers this week, will any address tariffs in a way that help investors identify the risks >> thanks, courtney. let's get to dianna with more on the housing data. >> tomorrow morning we get sales of existing homes for the month of april these remember clothing so people who are out shopping in february and march remember, march we saw a really big drop in mortgage rates so we

will find out if that had any effect on sumers in april we get the sales of the newly built homes for april but those represent signed contracts in april, that's when mortgage rates were a little higher we will get an idea how rate sensitive today's consumers are. we also i get earnings from toll brothers tomorrow afternoon, luxury high-end home builder we've seen significant softening on the high end of the market because of all things consumer, especially having to do with salt, that is changes in the tax law in new york, connecticut, new jersey, illinois and california we will see how toll brothers did. that's after the bell. back to you guys. >> diana, thank you for that let's look also at boeing's big week ahead phil lebeau is on that for us. >> later this week two huge meetings for boeing and more questions about when it will apply for recertification on the 737 max. you have the faa and regulators from around the world meeting in dallas that will be on thursday on that same day, the airlines that have the max or have

ordered the max, they're going to be meeting with boeing in montreal and we're going to be watching to see if we hear details about when there might be a recertification play, when that will take place. as you look at shares of boeing, keep in mind the company is likely to reapply for recertification of the max some time this month. it's not guaranteed but that's the expectation that's out there. one last note, guys, ryan air reported earnings today, they don't fly the max yet but it's scheduled to have the max in its fleet. in fact, that was supposed to start earlier this year. they are saying look, even though we're not flying the max yet, because we have to change our plans, we're going to be asking for compensation from boeing that's the story with all of the airlines that either have the max or plan to have the max and they've had to change their plans. guys, back to you. >> phil, thank you mike, what will you be watching >> i think the market -- well have this pattern, right, just strictly market mechanics where we have overnight sell-offs. there's a definite wariness on what headlines we're actually

going to see and then the u.s. market opens up and there's a little bit of bade in there. i think there's more skepticism growing that in fact the trade war is necessarily going to be resolved any time soon but the we have to sort out exactly what it means, that there's this ongoing stalemate. all of that, i think the market still craves good u.s. economic numbers. it's not rooting for an erosion of the macropicture so that we get some kind of fed leak. >> still will be focused on the china exposed names? >> it seems so waiting for the moment as it expect to finally reach something. looking at the cell stocks, interesting group. down big on the huawei news it seems. that's huge in the real estate sector right now that's where they sit. so you have seen a lot of the damage spread but the question can it be contained? >> another group i've been watching, transports the airlines and railroads, often leading economic indicator, down 10% from the

most recent 52-week high still arp sharply from the crease eve low but i don't know how reliable it's been lately. >> the deeply cyclical stocks have not participated. they have not confirmed the recent high. it's been a defensive market even before we got this little jolt. >> more news today down as well, i guess a little bit of reprieve that the moves weren't wiped down and out that's all the time we have. thank you for watching "closing bell." "fast money" begins now. >> "fast money" starts right now. live from the nasdaq market overlooking the city's times square, i'm melissa lee. check us here, tesla taking a hit today, briefly dropping below $200 a share as the electric vehicle maker faces a mountain of issue. so what can save the stock we've got some details plus, tech stock getting tough today as tensions rise between china and the u.s. rebecca patterson this could be th