as a matter of fact, everything we were doing was aimed at retiring those people, but as you can see, unfortunately, although 30 years have passed, they have got influence. the influence which they were building after 1989 where they assumed a new identity of an elite of a new state so this influence is still strong this is what i can say let me assure you that freedom of speech is absolutely respected in poland poland respects all constitutional standards, just as in the united states, the right to assemble. there is free media in poland. there's everything functioning in a normal democracy. one can announce what they think. one can demonstrate. one can say what they think in poland people are not attacked in demonstrations in poland police do not use tear gas against people people can speak their mind. they can express that they're notpleased with something. this is their right in democracy. please ask polish journalists, when was the last demonstration

in poland when some kind of tension happened no, it didn't, because in poland, we respect the right to demonstrate and express your concern because we believe this is one of the foundations of democracy in poland. there is absolutely free and just elections, all the standards are respected. so please, ladies and gentlemen, come to poland and see poland with your own eyes please do not repeat certain things that are repeated in the west poland has quite a conservative government that is true there are certain standards of action not everybody subscribes to those standards, especially people of more leftist views but had this is the nature of democracy. you have one side of the political seat in power, then people make a different choice, and another side of the political stage comes to power there's nothing extraordinary about that this is the change that's happening in poland. when somebody wins the elections, they have the right to implement the program which they announce before the elections. excuse me, however, realizing

implementing the program which you presented in your election campaign is not only the right but i think an obligation resting on a politician, and this is exactly what is happening in poland. >> a question for both presidents mr. president, you said just a moment ago that poland will join the visa waiver program soon how soon >> we think fairly soon. we're doing very well with it. it's a complex situation, as you know but we're getting very close we allow very few countries to join, but poland is one we're thinking about allowing in so we'll be making that decision over the next probably 90 days >> sir, will you hope, or do you think maybe when you're in poland in september you will make the announcement? >> i think it's a very good idea thank you very much for giving me that idea >> thank you, mr. president. >> translator: mr. president, the visa waiver program appeared

on many occasions, but then it did not come into practice how optimistic are we about the words uttered right now by president donald trump >> translator: i'm looking at these words optimistic i think this is the first u.s. administration which has treated this problem in such a serious way and in such a comprehensive way. when we talk with mr. president, the president expresses his deep care about that. also, which i talk with the u.s. ambassador to warsaw, she looks at the problem all the time, and i firmly believe in accordance with the law binding the united states, because it is something that i want to stress very strongly, according to the law binding in the united states by all the action which is are necessary in those respects, such as today's signing of the agreement on prevents and combatting serious crimes, i believe that through all these sanctions, this visa waiver program is going to be possible

soon anyway, it is going to be possible before the end of the first term of president donald trump. >> okay. thank you very much. thank you very much. [ applause ] >> president donald trump hosting president duda at the white house. welcome everyone to "closing bell." biggest headline as it relates to the markets has to be about china, saying the relationship is a bit testy right now, but he did say that he thinks that they're going to end up making a deal with china ultimately didn't move the needle for the markets, but of course, we listen to every headline there >> and he said he thought a deal would come because he felt china needed to make the deal. he also said there was no deadline for implementing further tariffs on chinese products so there is space, as it were, before we see the next level of

tariffs. as you said, no real move in the markets. we're down 50 points on the dow. >> pretty much have been there all day. he also said we have a good relationship with north korea and china's been helpful on that front. let's bring in eamon javers. >> reporter: what was striking to me is when the president was talking about his relationship with the polish people in answer to the polish media question this gives you a sense of how personal all of these diplomatic relations are to this president. he said that because of president duda's leadership, because he feels close to the polish people and president there, he was willing to take that action on announcing the 1,000 american troops going to be stationed in poland at a base that the polish are going to pay for. the president putting all of this in personal terms that leads me to think that the relationship with xi jinping is going to be so paramount on that question on whether or not we get a deal between the united states and china it's all personal in this president's opinion. this is a leader who deals one on one with the top guy in each

country and likes to deal one on one country by country he's not talking a lot here about nato and some of the multilateral, multinational organizations. he's talking about his relationship one on one with each country and each leader i think you got to look at that as a template for how he's going to approach the end game here to the china goenegotiations as wel >> as you rightly point out, troops into poland, not something we might have expected snapshot two years ago when he was critical of nato we just mentioned at the top, the tone on china similar to what we've got in the last couple weeks >> reporter: yeah, that's absolutely right and then the tone on russia also so fascinating here. you heard president duda there being asked whether he saw russia as a friend or a foe potentially. president duda retraced the history of russian-polish relationship, which has been tortured for centuries, going back to the year 900 and talked about the bravery of polish soldiers dying in various battles and conflicts with the russians over the years, saying he hope the ultimately that

poland and russia can be friendly and kind of a friendly relationship in this era, but tracing about a thousand years worth of disastrous history between poland and russia. then you saw the president saying ultimately he thinks poland and russia can have a friendly relationship in this era, largely because of what the united states is doing to try to help the president bridge that gap. >> eamon javers at the white house, thank you very much joining us for the full first hour of the show to break down market action, josh, good to have you with us again >> hi, wilfred, how are you? >> very well >> do you know any polish? >> i was going to ask about the currency >> they were full answers, though, from president duda. >> a good translator >> maybe you're an expert on poland as well s&p is down 0.2% just want to start with oil because it's down to 4.2% on the day. is that a worry for you, that equities are going to play catch-up or resilient markets in

the face of such a big move? >> this is something i've debated with people for a long time i don't think oil offers any signal for either the economy or the overall stock market or really anything that people should be overly concerned with, other than when it's at some sort of an extreme that literally changes people's behavior we don't want to see crude at 20 we don't want to see it at 180 if it's going to oscillate back and forth between 30 and 70 or 40 and 80 for the next few years, i don't think there's any signal there if you actually look at crude over the last year, it's down 22%. the xle, which is the large cap oil companies, is down 19% that sector has been in the punishment zone for a long time. then you look at the services sector, it's worse the oih is about to make an all-time low that's the etf that holds things oil services all-time low started trading in 2002. that has offered zero signal for what's going won the economy take a look at the producers,

xlp. a low back to '06. so we have to take that, compartmentalize it, and not read too much into whether or not that means something about recession, not recession, expansion, et cetera >> agree, especially because the latest moves seem to come on top of a build in crude inventories. josh with us for the hour. let's get straight to the other stories we're watching today bertha coombs is at the nasdaq julia boorstin is covering the facebook drop today. phil lebeau watching tesla and gm bertha, let's start with you and the action at the nasdaq getting hit the hardest. >> we're seeing a teeny bit of strength today in small caps and bio tech large caps being dragged lower by facebook and chips. analysts at ever core cutting prices on micron, western digital, and others, saying they see the recovery for memory chips pushed out until late next year but big love for cybersecurity

ipo crowdstrike, on pace to be the best performing tech ipo this year, opening at 63.50 after pricing above the range at $34. >> bertha, thanks very much. the nasdaq is lagging but only down 0.4%. meantime, facebook falling today on new headlines surrounding how the company dealt with user privacy concerns julia boorstin has that story for us in los angeles. >> that's right. facebook shares down about 2% on a "wall street journal" report suggesting that mark zuckerberg was aware of facebook's privacy problems the article points to an email exchange in which mark zuckerberg asked employees about an app that claimed to have compiles tens of millions of facebook users' data facebook suspended the app but did not take broader steps facebook responding saying, quote, at no point did mark or any other facebook employee knowingly violate the company's obligations under the ftc consent order, nor do any emails exist that indicate that they did. facebook did say that they

expect to come to a settlement with the ftc and to pay up to $5 billion in fines back over to you >> all right julia, thank you turning to tesla, had been higher on comments from elon musk to shareholders, but losing steam throughout the session phil >> and it's interesting when you look at what's happened with shares of tesla because earlier today, they were up on comments from elon musk at yesterday's annual meeting where he said, look, we do not see a demand, particularly when it comes to the model 3. they expect it to potentially be a decent shot and a record quarter. the number to look at when you look at model 3 deliveries, 73,900 that's the target, the estimate the analysts are putting out in terms of quarterly deliveries. remember, they dropped down in the first quarter to the 50,000 range. they're expected to ramp up from here let's go back to when they reported first quarter earnings at the end of april. it's been a rocky ride, guys

the one thing that we have noticed is that the stock got a bit of a bump yesterday because we heard from elon musk. remember, we haven't heard from him much over the last month >> it's also been a rocky ride intraday, phil up at 222 this morning a couple analysts coming up later in the show. phil, thank you. the mega defense deal between united technologies and raytheon is facing new challenges >> that's right. so could be the biggest defense deal ever, but wall street not so sold. bill ackman opposes the deal each with less than a 1% stake some analysts are skeptical, calling it a reconglomeration that muddies the investment thesis for shareholders in both companies. both stocks are down for the week so far. that's even with utx shares, rebounding a bit today, up more than 1%. but the carnage extending to the broader aerospace and defense group as well. the ita etf is down 3% for the

week to date too that's as investors wonder whether this deal actually potentially signals a top for defense spending guys >> all right morgan, we'll see what happens there. thank you. we've got 40 -- >> 47. >> 48 just about until the close. joining us now to talk about the market action, megan choo from wilmington trust, along with josh brown megan, so we're taking a pause here on the rally after six straight up days for the dow question is, what does is the next move and where is the catalyst going to come from? >> that's a great question well, we are a advising our clients not to chase this market but also not to pull back and run away either. we have the fed and trade are the two big catalysts. the last few days, the market seems to be very much trading on the hopes the fed will come in

and save the day the elephant in the room and arguably the more important catalyst from our perspective remains trade. we really haven't gotten too much of a development there. we did avoid mexican tariffs, but the china issue looms large. so we expect higher volatility we expect a period of perhaps some consolidation here. but the meeting at the end of june between president trump and president xi is necessary just to get things back on track. we don't expect that to result in a deal. so the market is going to have to be patient from here. >> josh, the dow is up nearly 5% for the month so far got a couple big events that come with the fed meeting and the g20. is it hard to see further upside from that 5% june rally until we're through those events >> i'm not sure i'm the right person to ask about the next 5%. there will always be the next event and the next event if you're a trader, there are stocks that are making new all-time highs very quietly. we're going to talk about one of them later in the show very large-cap company, well known. another one is microsoft

does not get enough respect. this stock has made a new all-time high yesterday. it's one of the few mega cap tech stocks not currently under the microscope and being screamed at by political people. yet, it's very rarely talked about because they don't have a social network that's popular with consumers the xbox maybe is not a big enough part of their business. but that stock is absolutely working. if you're a trader, you're looking for things like that i'll give you another one, home builders very quietly about to take out a new high, a level it hasn't seen since february of 2018 meanwhile, you had this huge back-up in rates and mortgage rates. >> application surging >> that's if you're a trader if you're an investor, everyone is like, what do you do? 1200 points in the dow last week i can't buy them here. the s&p right now is 2.5% off its high, but the russell is 13% off its high so maybe that's where you're looking. you're looking at small caps maybe they've been hurt more by tariffs than large caps. i don't know what the story is

but if you're an investor, not a trader, and you want to buy something at a discount that hasn't had that run, the russell is 12.7% off its high. look at it find something that you like whether you're a trader or investor, and there's enough of both in the market right now and you could find something constructive to do with your money. >> i mean, josh brings up a good point on the 52-week high. there are a lot of them. a lot of them are defensive names. meghan, do you want to stick with what's working in this market, even with stocks trading some of them near record highs in the defensive space, or go with the other strategy josh laid out, think long term, play catch-up in the russell or semis? >> well, i think the movements we've seen in the market does give an opportunity to perhaps rebalance your portfolio a little more towards some of the losers but the market -- the parts of the market -- >> which one >> well, like your small cap or perhaps even your semiconductors in areas of technology that have gotten hit a little harder but the market has been by and

large led by some of those more defensive oriented sectors so that does give us a little comfort that the market is not overly complacent about the threat of tariffs. we did increase a little more ex exposure to defensive sectors of late consumer staples, utilities. but we're also, as i sai earlier, expecting higher volatility within those sectors, there are opportunities. within your consumer discretionary, maybe it's off price retail, whiching benefit from higher tariffs and more inventory at your traditional retailers. areas of the f.a.n.g. complex, they're not that expensive, and there's a lot of growth potential there. so we're looking within the sector to more the industry and stock level to try to find opportunities that might not be as obvious >> meghan, thanks very much for joining us great to see you

markets are down 0.2%. still to come here on "closing bell," virginia senator mark warner joins us with his thoughts on regulating big tech. >> plus, lululemon has been a standout in the retail space, up 40% so far this year an update on the business when earnings hit right after the bell 'lbrg emo u iwel inth tyoast crosses. moving is hard.

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simple, easy, awesome. go to xfinity.com/moving to get started. just under 40 minutes left of trade the s&p down 0.2%. let's send it over to mike santoli for today's mark dashboard. >> here's what's on the slate. the s.i.t. index in just a minute then ringing the register. a bit of a glimpse of retail activity in the month of may vetting the "v," that would be the v-rebound we've seen so far in june. main street's portfolio. a look in aggregate at how households are positioned in stocks, what it might say for the long-term. so s.i.t., that's semiconductors, industrials, and transports these groups very economically geared, looked at as somewhat economic bellwethers the very top of these were here

in september what i want to highlight is you had these nice recoveries. then the pull back into may. then i would call them half-hearted bounces you're not really seeing leadership out of them today's semis are down 2% on a downgrade. but it sort of shows there's still plenty to prove from these groups to say that the global coast is clear we know that, right? we know that's the story but the market is not really telling a different story than what we see in the headlines about global growth being a challenge, the trade war being an overhang. so i'll be watching these industrials in particular, not really leaders on this little bounce we've seen in the markets. that seems like a bit of a ham strung group right here today. it's a defensive tone to the market underlying the indexes, guys >> mike, a good one. thank you. see you in a bit josh, does that tell you something about the global economy, that these bounces have been halfhearted in leading groups like industrials and transports >> it definitely tells me something about people's opinion of the global economy, whether or not that will come true, you know, we have yet to see but i do think it's interesting

that we have these ipos. we've got this group of, let's say, 20 or 30 stocks making new highs. a lot of them come from areas like technology. but what they all have in common, even if they're consumer discretionary, these are companies that don't require anything more than 1% global growth because they are eating into market share of their competitors or they're inventing new categories so yeah, if you're mired in these companies that require huge government budgets or very, very fast gdp growth around the world in order to increase their earnings forecasts, you're not doing well you're not having a good time. energy is an example we pointed out that goes right along side of that. so the big winners are companies that have secular growth stories that are all their own, and whether or not gdp forecasts go up or down is not a factor in how people are pricing those stocks and the demand to own those shares >> like beyond meat. >> just like beyond meat regardless of the global economy, people want more cauliflower elbows ground up into a patty

>> we'll discuss that in a bit the dow is down about 45 points. s&p 500 also lower by the way, crude oil down 4% at the close. worst performing group in the overall market is energy financials and technology also having a rough ride. after the break, one wall street firm says nba star kevin durant's achilles injury could have a surprising impact on a stock. we'll get word on the street on that name next >> and later, just how big of an impact do the china sttariffs he on the american sure -- consumer?

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containing this information. read it carefully. welcome back to "closing bell." we've got just over half an hour until the close. time for word on the street. evercore initiating coverage of u.s. restaurants the firm giving an outperform rating to mcdonald's, restaurant brands, chipotle, and darden, saying each company is making substantial improvements in execution. imperial capital maintaining its

outperform rating on msg networks the stock has been under pressure in reaction to an achilles injury by golden state forward kevin durant the firm says many investors were long msg on the thesis that durant would be going to the knicks but that there was never any guarantee he would join the team >> and beyond meat getting a downgrade to market perform from outperform over valuation concerns of the stock's nearly 500% rally since going public last month that analyst will be on "fast money" tonight at 5:00 p.m josh, interesting that this is a downgrade in rating on beyond meat, at the same time upgrading its price target from 107 to 123, which says it all in terms of how quickly this has moved around >> yeah, one thing sell side analysts are good at is looking at what the price has done and adjusting their target so it's closer so that way it looks less foolish. i don't know how helpful that is for investors. i think beyond meat, for me,

there's this concept called the too hard pile. certain stocks are, i don't know what to do about this so i don't have to do anything. i think that's where it is for a lot of fundamental investors for people who are traders, it's a phenomenal situation the stock went down $35 yesterday. so people that are buying it, shorting it, getting in and out within the same day, i think it's drawing an outsized amount of attention on robin hood, for example. that will die down, and ultimately, this will trade at some multiple. i just don't know if it gets a food multiple. because it's kind of got major differences from thiesen and what else do you compare it to but a meat producer nobody would say it's cheap. >> it continues to be driven by some of these headlines that big restaurant brands are taking it on, going to supply it the latest is tim horton's in canada if you go through the quarter, that's where the 500% growth number was

>> i am an expert on restaurant menus and ordering in general and enjoying >> eating. >> i am. i know my stuff here there are meat producers that have managed to get themselves to the place where they have enough cache that a restaurateur wants to list the brand on the menu you will see that on a restaurant's menu. but i don't know what those businesses are worth i don't think they're worth 80 times revenue. if you actually look at publicly traded food companies, they trade like two times sales on average at the high end. so this company would have to grow revenue at a substantial clip for the next ten years, just to justify the current market cap forget about any increase beyond this so even in your wildest dreams, if the expectations are met that this is going to capture a big piece of the meat production and consumption in the country, it's still not reasonable at today's price. >> you're not there.

>> no. >> plus a higher sodium than regular burgers. >> the evercore initiation focuses its outperformance on the fast food names as opposed to the casual names. any of those stand out >> the casual dining stocks and companies are not benefitting from technology to the degree that quick service is. so the ability to order from an app, walk in, pick up the, that's becoming habit forming for people and mcdonald's happens to be very good at it. what's interesting is none of these companies are in let's cut prices mode. what they're doing is they're improving the products, improving the service, getting technological efficiencies, and building habit-forming consumer traction that is a better story than what it used to be with these stocks in a different type of economy, which was how cheap can we make the menu items so they are benefitting from that as well it's very important part of the story. >> 29 minutes left to go in the session. dow is down 45 points.

we've moved south a little bit the lows, though, were down about 90 here are three things driving the action soft inflation data out this morning. consumer prices barely rising in the month of may crude oil fell 4% today on rising u.s. stockpiles in fears of slowing demand. energy, big reason because of oil. also, financials and technology are the losing sectors in the s&p. >> time for a cnbc news update with sue herrera >> hello, everyone here's what's happening at this hour hospitals in hong kong are taking in dozens of protesters who were injured in violent demonstrations over an extradition bill the proposed law would allow hong kong to extradite citizens to mainland china for trials illinois' governor signing reproductive rights legislation today. that measure includes the decriminalization of some late-term abortions. the move comes as other states are sharply tightening access to abortion facebook trying to make it easier to donate blood it is rolling out a new tool

today in major cities that connects blood centers with prospective donors the tool sends alerts for specific blood types that are needed and barcelona striker lionel messi has a new title. it is the world's highest paid athlete, dethroning boxing world champion floyd mayweather. and "forbes" magazine reports messi earned $127 million between his salary and endorsements over the past 12 months he scored 36 goals while leading barcelona to the spanish league title this year. >> so i love this. top three were all soccer players. >> yep, exactly. >> floyd mayweather retired. >> that's a valid point, actually it really is but yeah, all three. top three. >> but he certainly retired with plenty of earnings i'm sure he won't mind thank you. >> he also burns cash on fire on instagram posts. he takes baths in it >> which is not to be commended.

i guess he's got plenty. still ahead, an early read on the may consumer spending levels oruld that be a warning sign f the market we'll discuss.

dow is down 53 under a half hour to go before the close. back to mike santoli for his second dashboard of the session. >> mark of america, merrill lynch. economists have an i understand retail sales based on debit and credit card volumes. a down shift in activity for may. a 0.1% increase month over month, around a 2% annual level. that's the orange line here. retail sales, autos. pretty much in tune with the story that the s&p retail stocks have been telling you, which is a bit of a step down in activity nothing too alarming, really consistent with a slow but still positively growing economy what was interesting is the three-month average is still holding up okay. apparently credit and debit card had been kind of choppy. in terms of region, they break this down. california, san diego, and l.a. and san francisco were strong on these measures houston, dallas not so great so kind of a coastal story and then who knows, maybe an energy

impact in texas. >> mike, thanks very much for that we look forward to the next installment. meantime, shares of tesla lower today despite positive comments from elon musk last night. here are some of the highlights. >> we're actually doing well, and we have a decent shot at a record quarter on every level. i think we can be cash flow positive despite having a very high growth rate with steady improvements that are likely to occur over the next few years, it won't be long before we have a 400-mile-range car. >> let's bring in dan ives, a neutral rating on tesla. and joe osha has an outperform on the stock dan, i'll start with you the shares opened positive on the day, down quite a lot right now. what was your takeaway >> musk is talking a great talk. it comes down to walking the walking. naturally the issue in terms of number -- and the street really, you know, for two q numbers,

especially second half, that's an everest-like battle for them to hit there's a lot of wood to chop ahead. even though last night was optimistic, the street continues to be negative on them hitting that year-end number >> joe, when he says there's no demand problem with the models, should investors take him at his word >> i'm not sure they should take him at his word, but i think if you look at the way the stock's acting, people are realizing that the first quarter was not really demonstrative of demand and what we're seeing now is perhaps a little more demonstrative. i think certainly the company still faces challenges i'm not quite sure i agree that we're talking about an everest-like challenge here. if you look at where they are now, come in at 90,000 units plus for the second quarter, i think the full-year targets are easily achievable, which is why the stock has rallied. >> but joe, you haven't outperformed but cut your price

target a little bit. why have you done that >> well, to be honest, look, i try to be intellectually honest. this is a high-growth name with high-growth multiples. i've been consistent about saying i think it should trade on 15 times. i cut that number a little bit so the share price target comes down but gosh, $347 from where the stock is right now, still a pretty good return >> who are you siding with, josh >> i mean, talk about the too hard pile. i guess i'd love to hear either of your takes or both of your takes. let's say we take production of the cars off the table and say they'll come in at the consensus range. what about $14 billion in debt and long-term liabilities, number one number two, what about the revolving door of executives if you talk to the people that are battling it out over this name all day long on social media, et cetera, those are the issues that continue to come up and i think cause the most amount of consternation after elon's personal behavior

>> may i go first? sorry. >> joe, go ahead >> i think the taller of you go first. >> we don't judge like that on "closing bell. >> i think you've got to unpack the points there a little bit. it's entirely legitimate to point out that there has been a revolving door of executives i heard you refer to social media. as far as i can tell, most people on social media don't do cash flow analysis because if they did, they would see that the schedule of debt, when it's coming due, what the company's generating, should allow them to repay it part of what's going on here is the stock is falling down. to be honest, there's been a lot of off the cuff analysis on social media that i don't think is very good, although i do agree that elon's management style is a problem sorry to jump in there >> dan >> yeah, i strongly disagree with that. it just comes down to the math doesn't lie. if you look at numbers for the year, better chance of me

playing for the raptors than them hitting those numbers that's the fundamental issue here the street sees that and you got the debt that continues to be the albatross around their neck. and it comes down to profitability. rielgtd n if you look at the tea leaves, profitability second half, seems like that's going to be a big challenge. that's why the street is putting those sort of dynamics together, and that's the issue here for tesla. that's why it's going to be, in our opinion, a very, very challenging period for them to get through. >> all right dan and joe, thanks for joining us >> thank you we've got under 20 minutes 18 minutes to go before the closing bell here's where we stand in the markets. dow is down 45 points. kind of in the middle of this range we've been in. up 33 at the highs, 89 at the lows broke the six-day win streak for the dow yesterday. we've been kind of hanging in place, taking a step back. the russell 2000, small caps, outperforming today. that's something we haven't seen in recent sessions >> still ahead, we'll talk to senator mark warner, vice chair

of the senate intelligence committee, about whether he thinks big tech companies like facebook and google should be broken up. don't go anywhere.

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time now for today's wall

street buzz. josh, you're watching zoom video, ticker zm it's been a monster, actually, since its ipo in april up another 6% today. >> so beyond meat has captured everyone's attention for obvious reasons. it's a little more tangible and we're hungry a lot but zoom is really, for me, this is the much more interesting story. this is now a $27 billion market cap. it's a company that's enabling thousands of businesses, and they hope millions of businesses, to act as though everyone is working in the same location so it's conferencing software on steroids it's very similar to some of the hottest stocks in the market right now. it's not just about video cameras. it's really more of a productivity tool, software as a service. the story with the stock is it will not let you in. it's been maddening for people that have said, i love the story, the growth rate is bananas, way faster growth rate than beyond meat i really want to be here

i'll wait for the pullback the stock is up -- i have it here -- >> 182%. >> but it's up almost every -- it's up six out of every ten days since the start of trading on april 18th. that's what's driving people crazy. even on the down days, it barely goes down. it's not a market stock. it seems to be in its own world. the beta is off the charts it's 3.7 so for every 1% move in the s&p, this stock gives you almost quadruple. of course, that could work on the downside, too, it just hasn't yet that's have our important stock right now. >> are you still as excited about slack as you were when you joined us a few weeks back after the recent earnings? >> i am. that's what's keeping me out of the workdays and the zooms slack is the one i want to be in, and i can't own them all i think slack will come out next week or a week and a half. it'll be worth about 17 billion when they list it's direct. there's no underwriting. so it'll just be plopped on the new york stock exchange. they're not raising any money. they already raised a ton of money last august. by the way, the valuation, they

raised 7 billion now it'll be worth more than double that. >> but revenue growth slowing and profit loss is widening. >> but big companies are spending more and putting more of their workers on the service. and that leads to future revenue growth so i love the name >> we've got 12 minutes left of trade. we're down 61 points on the dow. the spread for the day was up 33 at the open, down 89 at the lows only down slightly for the major indices. >> up next, your last-chance trade. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad.

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walmart is doing and the fact it's working, most importantly anyone can throw a lot of money at technology and hire a lot of executives, but when you get top-line growth coming explicitly from those investments, the street pays attention and credits you for it that's what's happening in walmart. nobody who owns this stock has a loss in it and psychologically, that's where a breakout comes from. >> are you waiting for it to hit this 110 level >> if you're an investor, no, of course not stephanie is an investor she's in it much lower from a trading perspective -- now, one thing i want to bring out. rsi is 77. it's off the charts. we say like 70 is very overbought what i think you want to look for here is for the stock to have a couple down days, flat days on low volume pick your spots. you may get it lower than this breakout point just keep it on your screen because it's one of those companies that once it gets rolling, after a long period of consolidation, it sends to continue to stay in motion

we've seen that with other large-cap names in the recent past mcdonald's, great example. >> coca-cola, procter & gamble all these safe-haven stocks showing growth >> and walmart doesn't have much yield, so you can't chalk it up to a bond proxy. this company has found its groove after a long time of sitting back and waiting on e-commerce >> walmart is josh's last-chance trade. >> meantime, lululemon out with earnings after the close sarah? >> lululemon is a darling of the system it's way outperforming retail and the market it's beat revenue expectations 17 of the last 20 quarters so investors will want to see whether it can keep that momentum going watch those same-store sales always key expectation on the street, 11.6%. the company just guided during the quarter and said expect the low double digits. that's where the market is men's business will be in focus, a huge growth driver,

international as well. it's a small part of the business it's growing very, very fast they don't necessarily break it out, but in recent quarters, they have been pointing to the numbers on men's and international because they've been that impressive i would put e-commerce in there as well. options implying a move, up 10%. >> father's day coming up. the abc pants, the jogger. do the right thing men love this stuff. they don't want to go to the store themselves i don't. but on the weekends, i'm head to toe lulu i have to be honest. >> you just want women to buy it for you. >> i don't know what looks good. i'm a mess but i do think that, like, this has legs it's not like a fad. oh, men wearing lulu this could be five or ten years, who's to say >> company wants to double the business in five years >> we'll be focused on earnings after the bell after the break, we'll be focused on the close veines left of trade don't go anywhere. i assembled it myself last night.

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and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. less than three minutes to go time for the closing countdown let's trade the close. as we try to figure out which way the market moves next, what is the technical picture look like, and what other sort of leading groups or sector performance show you some direction? >> thanks. so going into the close here, a couple things we've been watching first, really, the technical

landscape, which started worsening as of yesterday's close. you see this outside day reversal momentum overbought on the short-term really, we start to feel there's very little impetus for a meaningful rally secondly, i would highlight sector rotation and flow is another thing we're watching keep an eye on the first half of the week, really a move higher within the small and mid cap complex on what i thought was a short covering rally then large caps have certainly been buoying the markets higher. we've seen materials we've seen staples as well as tech, you know, take these things higher. so safety today, investors seeking refuge and really lackluster volumes, another thing i'd highlight here >> thanks very much for joining us we have 90 seconds left to trade. mike santoli, what are you watching >> in terms of the technical set, this is a six-month chart

of the s&p 500 this squishy day we've had two days in a row came right here after this "v. i think you would probably give it another 3% or so before you would say, aha, this was an oversold bounce, you can't trust it it would create something like this so 3% down from here, you could still say this is an innocuous, benign pullback, waiting for the next catalyst. a little deeper than that, you maybe get concerned it was just a head fake bounce that's the s&p up at the nasdaq is bertha >> the nasdaq 100 yesterday eked out a gain today snaps a six-day losing streak, mainly because of facebook that's the biggest drag. look at the intraday chart took a leg down on negative headlines at noon over regulatory issues. bob, over to you >> bertha, fractionally down today but a very clear pattern in the last six weeks. defensive names, particularly consumer names tend to outperform that's happened again today. drug stocks like merck up. you get the tech names moving to the downside also things like banks and energy names

so jpmorgan, goldman sachs moving to the downside we even had some new lows in the oil complex. exxonmobil and chevron also to the downside you see this pattern playing out a lot. walmart is up 6% or 7% just in the last six or seven weeks. there's the closing bell coming up just in the middle of the decline. dow jones industrial end of the day down 40 points >> welcome to "closing bell. i'm sarah eisen. >> and i'm wilfred frost, along with mike santoli. let's check in how the markets closed dow is down 0.15%. s&p down 0.2 the russell stayed in positive territory just about the nasdaq did lag some moves in oil. that meant the energy sector was low. yields for the first time this week slipped a bit, undoing the good work the banks had done in the early part of the week in fact, wells fargo down as much as 3% at the close. >> and for all the talk today

about the defensive groups going up, how about this ipo we got an ipo at the nasdaq today, crowdstrike, ticker crwd. popped 70% there's still hunger in this market for the hot, fast growing names. this is a company that posted 100% year on year revenue growth last quarter and became a $20 billion company just like that so some mixed ipo performance in general, but it's in cyber it's in cloud. it's in all the secular growth places that investors still want if you want any sign that risk is still on, check that out. >> as we talked about with josh, zoom was up again today. beyond meat, even after a day of selling yesterday, another downgrade today, bounce back to the upside >> coming up on this hour, should big tech be broken up senator mark warrener is goi going -- warner is going to join us to weigh in joining us, josh brown still with us. and mike, what stands out to you

amid this mini backtrack of what we have seen over the past week or so? >> i think the fact it's basically benign, inconclusive right now. you had a pretty good split of stuff up and down. i do think there's enough for everyone in the sense that if you're skeptical of this little bounce that we've gotten, you're not going to be persuaded that it was anything more than just a bounce based on what's happened here i don't think you can really draw too many conclusions. it does show you that the stock market wants treasury yields to kind of open the way, get them higher for stocks to go up to have a little more of a risk-seeking move right now. but we're caught, right, because we don't have guidance on the fed beyond the data. and we pretty much got what we're going to get >> and those big events to come, mike, you mentioned the fed, g20. it's hard to see some major moves ahead of those s it? >> it's hard to see a news-driven move ahead of that, right? so if anything, it would just be kind of a positioning thing. market pulls back 2%, all the sudden people have to buy in or

vice versa i don't think you're going to see a breakout of this range, necessarily just based on new information until we get some resolution >> unless we get a tweet about china. >> i was going to say, whatever the news is going to move the market, it won't be anything we're talking about or making graphics for he could announce a tariff against new york city. like literally anything can happen i want to point out the fact that the russell managed to go green and stay there >> it's called salt. >> something interesting that we were looking at, at our shop, and this has implications for a lot of viewers, especially professionals. hundreds of billions of dollars have been allocated toward factors. one of the most well-known factors is the small-cap premium. they're trying to say because they're taking slightly more risk in small caps, there should be more reward of course, over long periods of time, if you actually look at iwm divided by the s.p.y., that

hit the lowest level yesterday since 2003 so 16 years we haven't seen that etf be priced at such a small level relative to the big caps i think that speaks to where people are allocating now, what they've thrown in the towel on it's interesting to see the russell manage to hold its own in a down tape if it could put together a few days or weeks like that, maybe that's a bigger story for the summer >> why are we seeing that? is there not a case that domestics should be outperforming? >> that's probably more of an industry makeup story. so in other words, obviously the s&p is 25% tech and then a lot of consumer discretionary, whereas if you look at the russell, i think it's 20% banks. you've got some industrials in there. so that's probably more of a sector and industry story than it is about somebody making an active decision. i want little companies versus large companies. but the point remains, those

sectors have been out of favor then for a long time, too. >> does feel like this sort of shift in tone toward the market, a better june, not seeing steep declines, even when we have down days like this has a lot to do with the fact the market now expects the fed to shift into telegraphing a rate cut, possibly as soon as next week, and then starting to cut interest rates i mean, how much conviction is there behind that? >> i think that advises against getting too negative you have to be aware that the market tends to have a reflex move higher if you do get the rate cut even beyond the rate cut, i've been pointing out with treasury yields where they are, corporate bond yields have followed them down the last time the s&p valuation was here, triple b rated bonds were at 4% now they're at 3.8 in march, the same valuation that just tells you there's some valuation support, some support out there across the capital structure, even if it's not the

reason to buy aggressive >> i want to ask you about some of the big tech names. one of the reasons you said you're attracted to microsoft earlier is that it's not in the cross hairs of the politicians is that enough to warn you off the googles and facebooks of this world >> i'm in google i own amazon so i am in the cross hairs not personally but in spirit i know the end result is there'll be maybe more regulation, definitely overseas, possibly here. we'll see. that's probably going to be a political decision there will be a check written, maybe multiple i don't think that's going to matter i think when you look at how those two companies are positioned, for me, those are stocks i want to be invested in for the next three, five, ten years, and i don't think paying a fine in 2020 after ag months of rhetoric is going to change the earnings picture so i think with google, we talked about it last week, stock was 25% off its high at the time it's had a nice bounce since then google should continue to work maybe facebook is a similar story. not exactly sure.

>> paul tudor jones saying today he thinks rate cuts are coming and to bet on gold mike, what's your take on this >> that is the playbook. he's been through many, many of these cycles i don't know tell me where the markets are trading the moment before we get a rate cut that would help out to decide. gold has already started to act better it's not as if it's been a secret so to me, it doesn't necessarily mean it doesn't happen this way. but yeah, the other piece of it is within the stock market, the playbook would say buy autos and housing and retail and things that would be refreshed by cheaper debt we'll see if that plays out because those are depressed areas. >> just going to cut you off because lululemon is out with earnings earnings per share, 74 cents analysts were expecting 70 cent. beat on revenues as well

782 million on the back of an estimate of 755. the comps, which are always the story for lulu, up 16% wall street consensus was up 11.5%. whisper numbers were a little higher, especially on the buy side still, remember, this is a company that is coming off of a tough year to comp, which is why we're not talking about 20% comps. that was last year's story so to put up a 16% comp on top of that is especially attractive gross margin, 53.9%. that was an increase maybe some questions about lower than expected guidance, which we are running on the screen right now. perhaps that's why >> might be a touch light. >> why the stock isn't moving. otherwise, the quarter is a beat pretty much on all fronts. for the full year 2019, net revenue in the range of 3.7 to 3.77 billion based on comps of low double digits liz dunn is with us from

performa is the guidance light? what are you getting here? >> the stock is priced for perfection, at least into the quarter. i think the story is very much intact, and i think that if the stock does act weak on this report, it's a buying opportunity. i think this is when you buy and hold for a very long time. >> joe morrison also with us what's your first take i know that consensus was about 16%, 17% revenue growth. you were optimistically looking for more than that >> yeah, and they came through on the bottom line on the earnings while liz is right, i guess i'm more cautious looking ahead and looking a little deeper. look, the q-1 was great. they came through. even if there is a little bit of a cautious guide here, that's not different than we've heard from everybody else. but here's the thing what about the back half this stock is priced for perfection it's a 50% premium to its growth rate i'm worried about the gross margin, because you know what,

the way they're going to get cross margin going forward is going to be on items or areas of growth that are a little bit more like shoes, international, tops, and the men's business they have indicated to me they were pretty bullish about how strong their bottoms business had been that's a margin driver those other ones i mentioned, i'm worried as the comps get tougher and gross margin on the back half, that could get tougher. >> so all the cautious analysts on lulu talk about gross margin and the fact it's going to be very hard to sustain this double-digit comps growth at the same time as the very high gross margin, which is way higher than what we see from nike or under armour is it possible for them to just achieve a new level of scale and keep up these margins? >> yeah, this is a different business than those other businesses the vast majority of their business is direct to consumer, versus those other companies trying to build that business. they had a little retrenchment over the last couple years with gross margin

now as they've righted the ship, they are moving toward i think there is, you know, gross margin stability, maybe not a ton of opportunity there's also sg&a leverage, and they're guiding for the next five years for double-digit sales growth plus, they've initiated a buyback. it's firing on all cylinders >> strategically, what's the one move that they could make? they seem to have done everything right up until now in the last three years in the recovery what's the one thing they would announce that you would say, oh, that's going to be a mistake what would worry you >> some people are worried about them going into health care and products that are way outside yoga pants >> wellness. >> luggage, shoes. >> i think health and wellness is a megatrend i think they're playing it in all the appropriate areas. i think that they strategically test things and scale them they built a men's business. they're saying men's can double. they proved they can build a viable, bigger than most people

e-commerce business. they see a double in that. international, they say quadruple. i think like a lot of these other companies, you look at what they say and what they're actually delivering, and it doesn't necessarily match up lulu has absolutely been delivering i think they've got a lot of opportunity to continue to do so >> john, quick final thought to flip it around, what would you need to see to get more bullish? >> i think that one thing, stretching the envelope. if they announced a pretty big acceleration and expansion overseas, we'd like to get that international business profitable i think they've got a lot of opportunity there. but back on that gross margin point, one thing to remember is they're within 80 basis points of their all-time high on gross margin that's like a 10, 12-year high while liz is right, there's more room to go, i don't know how much further there is beyond that so that's what you got to watch in the back half that's just the other side of it >> by the way, on those growth drivers i said to watch, the men's comps up 26% bottoms business continues to be

led by abc, josh brown, that's you. north america strong but also international continues to be their biggest growth opportunity. the market growth of up to 70% in china in q-1-t so it's coming off of a low base, but still, these are the kind of numbers -- >> a lot of people saying the men's was a mistake originally just because they hadn't done that many different categories yet at that time now i feel like they have the latitude to say, hey, we're going to give this a shot. and the stock price maybe wouldn't react because to your point, they start small test, and if it works, they keep going. makes sense to me. >> plus, he's getting it for father's day >> but not the wellness products you don't want them. >> you don't want like licensed spas or something like that. >> i'm big into wellness candles and oils >> lulu shares up after market here liz dunn, thank you. josh morris, thanks for joining us as well >> earnings alert on rh. seema mody has the details

>> a strong report from rh, the parent of restoration hardware reporting earnings of $1.85 adjusted versus the estimate of $1.55. revenues coming in higher than wall street consensus at $598 million. the estimate, 584. it's also raising its full-year guidance just looking through the earnings transcript, rh says it's becoming one of the few retailers that is growing revenues, expanding margins, increasing operating earnings, and driving significantly higher returns on invested capital. on the topic of tariffs, the company says we remain cautiously optimistic that business momentum will continue despite negative macro trends and increased tariffs. the stock is up 21% coming into this report. shares were down about 20% on the year the two big risks for the stock has really been tariffs, according to web bush securities 25% of merchandise value they

sell is imported from china. the other concern has been weakness in the high-end housing market back to you. >> all right seema, thank you soaring 20% after hours, josh. is this one you could get behind, even with the tariff risk on home products? >> you know, i feel like this is so specific where i don't think it's really going to trade per se on tariffs one way or the other. so i think the fundamentals probably matter here more to the shareholder base than any perceived threat from, like, federal policy or -- i don't see it moving on those headlines >> on the impact from 10% to 25%, that includes home furnishings. >> it would be stuld for them not to cite that when they give commentary a, it gives them an excuse to sandbag in a way that's not company specific then they can vault over those lowered expectations >> i think there's specific things going on here in the next breath, they talk about how their stock is undervalued and basically gunning for the shorts a third of the stock is short.

that's where you're seeing this move they're buying back a ton of stock. they levered up the company to do that. that's what this is about. >> big move up 22% in rh josh brown, thanks for joining us still ahead, regulatory and trade risks have put f.a.n.g. stocks under fire recently up next, a portfolio manager gives us four stocks that can deliver strong returns without those kind of risks associated with f.a.n.g she's got her own acronym. >> and speaking of regulatory risks, senator mark warner will tell us whether he's in favor of breaking up big tech cpaesomni like facebook and google

welcome back lululemon shares are higher after hours. initially a brief drop, but up a nice 2% at the moment. rh soaring after reporting much stronger than expected earnings. the company making comments on china tariffs. seema mody has those comments for us >> rh says it's selectively raising prices to mitigate the impact of the increase from 10%

to 25% rh also says it's moving certain production and new product development out of china it doesn't say exactly where, but it does say that it's expanding its own manufacturing facilities in the u.s. certainly joining a chorus of other retailers that have been actively looking at decoupling out of china and into other countries. guys, back to you. stock up about 21% now after hours. >> seema, thanks stocks falling for a second straight day bob is at the nyse as always bertha coombs at the nasdaq. let's start with you, bob. >> the important thing today is the pattern continues we've seen in the last six weeks. defensive names, consumer names. your mcdonald's, your pfizers, your procter & gambles what's down besides tech names banks and oil stocks have been underperforming. so jpmorgan and goldman sachs. you see exxonmobil and chevron this has been a pattern for a long time. take a look here

look at these consumer names hershey's, pfizer, coke, and the utility names all outperforming. generally has been tech underperforming. i think that will reverse if we get some movement on china trade. >> bob, thanks let's get to bertha at the nasdaq for more on the big movers there >> the nasdaq 100 snapped a six-day winning streak, in part because of facebook. that was the biggest drag on some regulatory issues raised from emails reported in "the wall street journal. you see that down. it was chips that were the biggest drag overall as a sector evercore cutting its outlook for the sector, particularly the memory players they were all lower on the day finally, we had some outliers. they were in the staples and health care area, all reaching all-time highs today back over to you >> bertha, thank you our next guest says they're increasing global regulatory risks surrounding those big tech names like facebook, apple, netflix, google, alphabet. so she's opting for m.a.n.g.

instead of f.a.n.g is there a theme here, or are you just kind of going for the anti-f.a.n.g.? >> i think there are multiple themes one is to always make more money. we are contrarians we're always looking for opportunities to invest. i think that heady growth is overvalued, but steady growth is undervalued. so it's time to sell the f.a.n.g.s and own the m.a.n.g.s, which is michelin amdocs, nokia, and gilead >> i want to touch on the ones you think are overvalued the new business models like netflix, you think they're big sells? >> yes, because i think the regulatory risks in some of these social media companies and the competitive threats to media streaming companies like netflix are underpriced in their stocks. as you know, disney plus is coming along i think the market is completely

underestimating how that's going to create a big competitive dynamic in the marketplace where the pricing power netflix is used to, where they've been raising prices, with disney plus coming out at half the price point, it's going to create a gravitational pull down. >> you mentioned these are contrarian picks obviously we fall into the category of value. it's been a challenged strategy or style >> absolutely. >> for a while what has caused that underperformance, and is it going to change? or are you just looking for individual stocks that seem to break free of that >> i'm a very different value manager. typically value managers associate buying financials like banks, which i think is a busted business model since the financial crisis so we look for opportunities which are not traditional value, but what i would call contrarian value. yet, with very high-quality balance sheets, because i think balance sheet risk is the biggest risk out there the picks i mentioned, they're all net cash companies you don't have to worry about if there's a debt crisis, which i foresee coming, these are very strong balance sheets and on

average they give you something between 3.5% to 4.5% dividend yields, which are in euro terms, swiss franc terms extremely attractive to have >> i like the nokia call because you say this is actually a beneficiary of the u.s. blacklisting huawei. why? >> all of these are ben fi beneficiaries of tariff wars if you think about gilead, which is a health care services company, first of all, they're not affected by the data wars. it's the people who produce goods. gilead, we may not have realized it, but trump did a sneaky thing with the brexit trade negotiations all the focus is on the chinese trade negotiations we forget the uk is about assigned trade treaties. in that trade negotiation, he's

put on the table that we want higher prices for our pharmaceutical companies for selling drugs to the nih so gilead would be a beneficiary. we like to think about things that nobody else is thinking about. gilead trades on ten-times earnings and 3.7% dividend yield. it's as consumer staplish at half the multiple of coca-cola because the hiv drugs they sell are chronic conditions, and there's no generic moment. so you can buy these franchise companies which are unaffected by gdp growth, by tariff wars, by currency wars there's perfectly good value out there if you know how to pick it >> thanks very much for joining us with m.a.n.g., the new acronym to focus on. >> thank you for having me up enext, there may be a lot of uncertainty, but allocation sckti remain average. what does that say about the state of the market, coming up this is my headquarters.

this is where i trade and manage my portfolio.

since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more. dow closed down about 43 points today back to mike santoli for the final dashboard of the day >> for most of this bull market, big question, is the retail investor really participating? there's some slow-moving but authoritative data from the fed that shows household ownership of different assets. this is household equity ownership. this all the way back to the 1950s. so you can see this is basically multiple, multiple cycles.

and here's what i would focus on it's just about 55%. the average over this very long period of time is right around here you'd say, well, that's abov average. looks like people are full up with stocks. but if you look at the more recent history, obviously, it's really middle of the pack. i think there's a bigger question that comes with valuations look at the really depressed levels of stock ownership through the '70s and carrying into the '80s. that was the high inflation years. that was the depressed pe years. that's really skewing the average on this. so i think where we are right now is roughly in line with where you'd expect for the market that's been up a long time by the way, the bond component from this same survey is right on the long-term average it's not as if people are overweight bonds it's cash that people own far less of than they used to because it has yielded just about nothing for so many years. so i don't think this is a dangerous sign, but it does show people are involved in the market in aggregate. >> in line with that this morning, they did say cash levels were 4% to 5%, which were

historic lows. >> exactly at some point, maybe that means there's less of a buffer, where people are using bonds in place of cash, which has its hazards, depending on the environment >> all right time now to get a cnbc news update with sue herrera. >> hello, everyone here's what's happening at this hour a north carolina man pleading guilty today to killing three muslim students in a parking lot. craig hicks made a deal to serve three consecutive life sentences with no possibility of parole. federal authorities did not pursue hate crime charges due to a lack of evidence donald trump jr. telling reporters he's not at all worried after his follow-up interview with the senate intelligence committee his testimony focused on answers that he gave to the panel's staff about russia and the president's former lawyer, michael cohen, back in 2017. the u.s. postal service unveiling a stamp honoring former president george h.w. bush today would have been his 95th birthday the 41st president died last

year the stamp is available online for 55 cents and a driver, a very lucky driver, is blaming an allergy attack for crashing his car in tennessee. street video showed the car flipping before skidding down the road and eventually it bursts into flames the driver got out of the car. he's apparently doing fine >> fire started after they turned it back the right way, it seems. >> kind of looks that way, indeed but he's a lucky guy that he wasn't hurt. apparently he got out okay next time, take some claritin or something. >> absolutely. glad everyone's all right. sue, thank you >> season is bad this year up next, will president trump's tariffs raise prices for consumers? yse former ceo of office depot sa no, but the head of the largest footwear association disagrees. coming up. (indistinguishable muttering)

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit welcome back three big companies adjusting their plans as u.s./china trade tensions continue to flare

huawei reportedly cancelling the launch of a new laptop huawei's laptops currently use intel chips and microsoft's windows operating system meanwhile, nintendo reportedly switching some of its production from china to southeast asia and google reportedly moving some of its hardware production out of china to taiwan >> so despite president trump saying china will pay the tariffs, many u.s. retailers are saying they're the ones that will ultimately have to foot the bill and just moments ago, retailer rh came out with earnings, said it passed some of those tariff costs on to consumers by selectively raising prices for more, let's bring in president and ceo of the conference board, former office depot ceo. and matt priest, president and ceo of footwear retailers of america. mixed signals. the cpi number, consumer price inflation, pretty low. pretty soft today. if you look at places like rh

furnishings, consumers are feeling it so how do you gauge the impact >> well, first of all, let's start with trade tariffs are not great long-term trade policy i think everybody would agree with that. we stand at the conference board in the business community for open, fair, and free trade but i think that most ceos would agree that these tariffs are targeted they're justified because they're intended to get china to lower their tariffs, number one. number two, to provide ip protections and number three to follow wto rules so they're supportive of these in the short-term. they're willing to take the short-term pain as long as it has the long-term fixes. the question is what's going to happen to the consumer if you ask consumers today what they expect, the consumer confidence index from the conference board is at 18-year highs. even the most pessimistic forecasters say that it's only going to impact a maximum couple tenths of a percent. that doesn't mean every category is going to be clean you are going to have some

categories where there aren't substitutes. i think of application auto parts, for example, where china is the sole source supplier where they have no choice, and there will be select price increases in some categories overall, when it gets to the level of the economy, it should be relatively small. >> steve, name for us two or three of the conference board members that do support the tariffs. >> i can't name specifics, but the polls of our ceos have the majority saying short-term, if this is a tactic, it's the right thing to do. if it achieves the long-term goal of getting china to play well but look, as a retailer, what happens when your costs go up, you have to look at the marketplace. you've got amazon. you have walmart you have target. you have others who will hold the prices down. so what you try to do is try to push the prices back up to the supply chain there are substitutes for these goods in most categories

and you don't want to lose market share so the net effect of the consumer, broadly in the economy, should be relatively small. i think matt is going to tell you that there are categories that will get hit. >> that's right. >> take the other side >> yeah, you know, for us, we have been paying duties since 1930 we paid $3 billion in duties last year. when you look at the consumer price index for footwear as it relates to the price of that good crossing the border, there's an unmistakable kor ration that the two are interrelated as prices go up, consumers will be hit in fact, the average import price on all consumer goods was 1.4% in 2017 it was 1.9% last year. year to date, it's 2.5%. so our members are telling us, you know, if it's 10%, if it's a 10% duty on top of what we already pay, maybe some of that will reverberate back up the supply chain if it's 25%, all bets are off, and consumers will be hit dramatically >> matt, if all the tariffs did remain in place, ultimately

forever, would your members be able to ship production somewhere such that long-term even if it was quite a drawn-out transition period, things you would go back to normal? >> i think ultimately there will be continued shifts. in fact, one of my members said the threat of tariffs has the same impact as actually implementing tariffs our members are looking to move. in fact, they were looking to move well before this action took place where you find difficulty is in the mass retail marketplace, in the shoes that working american families buy these are shoes that at the border are $8, $9, $10, and they already have a 48% duty. you put a 25% duty on top of that, that shoe is just not going to be made it won't be worth moving anywhere and it won't be worth making in china and shipping to the united states 2 million families purchased those types of shoes last year to a 67.5% duty rate we have seen these duties for such a long time that any time anyone says something

short-term, we can't take that seriously. in 1930, that was when our duties went into effect. it's been 90 years >> all right we could go on and on, guys. we have to leave it there. thank you. by the way, food was the inflationary part of the cpi data today do nuts had a big jump nothing to do with tariffs don't know where that came from. i know you like them though. >> i do. but that new krispy kreme store we spoke about turns out doesn't open until next year still ahead, senator mark 'lgehitaoins us next wel t s ke on breaking up big tech. all in one place. because when it's decision time... you need decision tech. only from fidelity. you need decision tech. plants capture co2. what if other kinds of plants captured it too? if these industrial plants had technology

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♪ after hours movers right now lululemon shares higher after beating wall street's earnings estimates. comp store sales estimates as well maybe weaker than expected guidance we'll wait to hear what they say on the conference call at 5:00 the stock up almost 4% after hours. rh, restoration hardware, shares soaring after profit and revenue beat company had a surprise guidance raise. also says it's selectively raising prices to offset the impact from that 25% tariff on chinese imports. investors are doubling down on home flipping, even as the flipping market sours. diana olick joins us from washington with the details. >> hi. kkr just announced it's doubling its investment in capital partners which lends to real estate investors, many of them

house flippers that takes capital to 500 million total since last year. they've completed more than $2.5 billion in investments through more than 8,000 loans in 45 states and the uk. now, these loans are attractive to kkr and big funds like it because unlike the big drop in rates we've seen this month in the regular mortgage market, investor loans can come in between 8% and 12% interest rates. they also get paid off quickly because the investors rehab and flip the homes but the flipping market is getting weaker, thanks to high home prices and short supply of distressed starter homes flip returns are down to the lowest level in eight years, and the number of flips are down 8% annually, that according to adam data back to you. >> diana, thank you very much for that still ahead here on "the closing bell," a big tech breakup. senator mark warner joins us with his take on whether facebook and good eveninggle sh broken up. broken up. that's coming next

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cnbc has a financial wellness and education initiative it's dacalled invest in you, ready, set, grow as part of our partnership can acorns, the microinvesting app >> and senator mark warner joins us now to discuss his new op-ed, preparing americans for the future of work senator warner, welcome. thanks for joining us. >> thanks for having me. and i appreciate what you guys are doing -- let me say quickly, i don't give a shoutout often to a network, but i appreciate the fact you're willing to focus on this important issue candidly, most folks where i work here don't understand these fundamental economic changes so fire away on the negative questions, but i had to give you a little shoutout there. >> no, senator we'll start with the positive questions. thank you for the shoutout, regardless before we get to the content of

your op-ed on how you want to fix the problem, let's name what the problem is ultimately, it's the growing inequality in the u.s. you're concerned about. is that right? >> it is both growing inequality, it's the fact that the very nature of work has changed. 20th century, we had people that would normally go to work for one firm, stay through their whole career that's not happening we've seen a shift in the incentives 20th century, we had lots of labor and shortage of capital. so everything we did in our tax code and accounting system supported aggregation of capital. 21st century, we got plenty of capital sloshing around. we don't have enough qualified labor. so how do we keep a free enterprise, free market system but slightly shift the incentives to make sure that everybody gets that fair shot? >> one of the things you talk about in the op-ed is a portable benefits system. what do you mean by that >> what i mean is that virtually every young person, and for that matter folks even approaching my age, are going to have a variety of different jobs during their career, or they may have two or

three separate income streams at the same time. i think regardless of what type of work you do, for every dollar you make, some portion of that dollar ought to attach to you in a portable benefit system, and that benefit travels with you from job to job. whether a government manages that benefit, whether worker organizations manage that benefit, that we should experiment on, but we've got to make sure there's some level of economic security that's not simply a government program that travels with you throughout your career >> wanted to ask you about the ongoing tech discussion of regulation in washington and the fact that since we spoke to you last, we now know that the federal government, the doj, the ftc all looking into these tech companies about whether they're monopolies what do you think that the facebooks and alphabets of the world should be expecting at this point >> well, clearly these companies

are enormous and they have enormous power i'm a little concerned on the breakup argument at this moment in time because i'm concerned as global companies, i don't want facebook, google replaced with alibaba and ten cent in terms of chinese companies that offer similartencent in terms of chinese companies that offer services without any constraints and i do have to have the companies realize they have a level of responsibility that candidly they've not taken on yet so where i would look from a regulatory standpoint and we have to do this in a way that it doesn't so regulate that it cuts out innovation and very briefly, there's four buckets privacy where the europeans have moved forward and i think we'll need federal legislation on that and the second is around identity validation and particularly, when i think about the level of hate speech and i think about the facebooks and the twitters and to a degree youtubes how do we think about identity validation and at least the question of should we have the

right to know whether we're being communicated by a human being. third, we'll have questions about content when 65% of americans get their news from facebook and google, should they not operate on the same rules that cnbc operates on in terms of content, and then finally and this is one where there's the most agreement we ought to have a lot more transparency if we knew how much data was being collected on each of us. if we knew what the value of that data was and if our data was portable and interoperable, and similar to the way we mandated portability and telephony. i think we might actually invite more competitors into a market that right now is pretty opaque and pretty close so those would be some of the broad outlines of the rules of some regulatory guidelines that i think we ought to put in place, and the good news is on virtually every one of these issues and i'll have a series of bills and there are bipartisan

agreement. so will we get something done? i work in a place where we're not very high on functionality at this point, but there is a lot of bipartisan agreement and the alternative may be the justice department and ftc action and my hope is the tech companies will come to the table and negotiate. >> bipartisan agreement, senator, but much urgency behind it do you foresee this coming to play before the next election? >> listen, if we don't get our act together before the next election, shame on us. we saw what the russians did in terms of fake identities in 2016 we saw a couple of weeks ago what happens when you simply slowdown a video that was the case of speaker pelosi next iteration of that will be so-called deep fake videos where you won't be able to distinguish who's who. we need to be able to put in place guardrails around social media to protect our election in 2020 we need basic election security guards so there is a paper ballot trail no matter where you

vote and frankly, i'm not trying to re-litigate 2016, but if there are more contexts between there was for the russians in 2016, there ought to be an obligation to report contacts from foreign governments during a presidential campaign to the fbi and law enforcement. >> so today there was a wall street journal article that has actually hit facebook stock showing that mark zuckerberg, a ceo, apparently in uncovered e-mails knew about the privacy practices at the company in response to the ftc probe weren't fully compliant. do you think that the individual ceo s, the leaders like a zuckerberg, you guys should be going after them >> well, first of all, let's see if this wall street journal story is true, but there is clearly part of the challenge with a lot of the tech companies is the founders when they and

they were great innovators and they often times created a separate class of stock in terms of founder stock which means they get to enjoy the benefits of being a public company without some of the oversight and restrictions this is an issue that is candidly bigger than just facebook, but again, begs the question of we need to put some, in a sense, rules of the road in place and not with a heavy hand. i think there are ways that we can look at industry-based standards as the first step, but the wild, wild west days and big tech i think are over both from consumer standpoint and from political parties. >> very quickly, senator warner, since this happened today, don junior appearing before -- you're the vice chairman of the select committee on intelligence, what can you tell us about his testimony >> i'm not going to comment about any of our witnesses i am proud of the fact that our committee is the last bisart an effort looking into what russia

did in 2016. we'll finish our work shortly, but what i think is as important, if not more important, we've got 2020 right around the corner and whether it's russians or others and they've seen a playbook. it's cheap to interfere in our democrat see and we need to step up and make sure there is a proactive requirement to report foreign intervention to law enforcement regardless of what campaign they intervene with we put election security in place and we've put some rules of the road around social media so we don't see the kind of manipulation that took place not only in our country, but we've seen in other nations around the world happen on social media >> senator mark warner, thank you very much for your time. >> for more from invest in you, our program, visit cnbc.com/invest in you we should note that nbc universal and comcast ventures are investors in acorns. up next, your lltrwa seet look ahead and key things every investor needs to have on the radar ahead of tomorrow when "closing bell" returns

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>> welcome back. time for our wall street look ahead. chewy pricing the ipo. >> around this time tomorrow we may have a sense of chewy's ipo price. it is the online retailer

acquired by petsmart, and it is looking for investors to give it a market cap upwards of $8 billion. petsmart is raising about 800 million in proceeds while the company itself will generate proceeds of $100 million the company hasn't posted a full year of profitability since at least 2014 and the top line growth last year was 59% the stock will list on the new york stock exchange urn the symbol chwy. guys >> leslie, thank you very much for that mike, we've got some time for the final thoughts the yield slippage today definitely played a part for the sector performance and just the general sentiment. >> it did. the idea of two days of modestly higher yields shows you that the market is still clenched up ahead of retail sales data, but then also with the fed i think at this point we have enough time in the next fed meeting to rethink it a few times. >> i thought today's cpi

inflation number realized that's the next big thing and it was soft which bodes well if you're praying and hoping for stimulus. >> it wasn't so decisive any it's pretty much on trend. >> below target and softening. >> absolutely. july could happen and it doesn't make it a since. >> we are out of time. thank you for watching and that does it for closing bell >> "fast money" starts right now. i'm melissa lee, tonight's traders, tim seymour, brian kelly and steve grasso on the big show tonight the last beyond meat bull just backed down she'll be here to explain what has her waving the white flag, plus stocks sitting below record highs and one top strategist says there's a new trump trade and she'll tell us what it is and why it's your best summer bet and we'll start with the facebook fallout, stepping back into a bear market after a report says there are e-mail showing mark zuckerberg knew about the company's privacy problems and this as the