founder bill bauerman, using a waffle iron to create the sole's pattern. he and phil knight were the collaborators. >> inflation adjusted, is that really -- >> that's a pretty good price. real the book "shoe dog" by phil knight it's one of the great ones "closing bell" right now. >> i'm well friday frost at the caterpillar up post. the dow stands alone the s&p and nasdaq could close at record highs. lots to discuss with 59 minutes left to trade. >> let's look at what is driving the action, higher for s&p and nasdaq, weak earnings for industrials like caterpillar and boeing strength in semiconductor stocks, though boosting technology and investors are awaiting facebook earnings after the bell today

joining us is josh brown. >> i think this is so important, we have this continued strength in the big indices and faang is not leading. this is the thing that everyone has always said. it's a very narrow market, only a handful of stocks. that is not what's get on this year yes, there's been huge performance in some of the faang names. a lot of that was recovery, but you have a broadened rally, something we've been looking for for a long time, and you have great rotation you still can get new highs out of the indices one thing i think is indicative of that, boeing down 2.7%, give or take, that's the biggest weighting in the xli, almost 9%.

caterpillar, also a bad day. that's either the third or the fourth biggest weight in the xli. despite the xli, it's doing great. you have other names picking up the slack. and that tells that there's strength everywhere. that's really what a lot of people like myself have wanted to see. >> of course in a price weighted index like the dow, they are dragging. >> boeing is very important. >> you're saying the upshot is it's a bullish sign for the market going forward that's correct we can rotate away from a few big market cap tech names? >> four points all from all-time highs in s&p, semiconnectors all-time high. remember the union pacific, a huge drop when they came for the rails? got it all back. >> not even four points away from the s&p we're at a record if we close where we are at the moment, but right on it. we'll have to keep an eye on it.

also a record close walk for the nasdaq, 8258 key level. you can see the nasdaq 0.6%. julia boorstin is up covering the facebook settle machined and ylan mui is -- julia, let's start with you. >> will, you see fining facebook a report $5 billion and imposing new privacy restrictions to prevent it from misleading users about privacy or misusing the data the implementing strict compliance measures, and new independent privacy assessments as well as new independent board committee focused on privacy facebook saying that the structural changes they're making go beyond anything required under u.s. law.

sarah? >> julia, thank you. facebook not only the only a company facing scrutiny. ylan mui has details on the doj's new broader investigation into big neck, ylan? >> the justice department plans to look at three areas z kearse related to antitrust, are the big companies stifling innovation or hampling consumers. the the doj, earlier extra treasure require secretary steven mnuchin raised concerns about amazon right here they destroyed the retail industry across the united states no question they have limited competition. there's areas where they have hurt small businesses. >> the justice department does not name specific companies, but the expectation is along with amazon, google, facebook and apple could get hit.

doj said if violations of the law are found, it would proceed appropriately, guys. back over to you let's send it to mike for the first installment of the dashboard. >> the first installment does follow on this theme here, cal it loss of trust, inparticular antitrust. it's a bit of a history lesson, investors are struggling let's dial it back to what happened with microsoft, back before it came to a head the ftc started an investigation into microsoft in 1990, before the wordwide web even really existed. look at this timeline, i'll go through the dashboard in a bit of this timeline in exactly how long it took to unfold '97 products changes, u.s. versus microsoft, the trial begins in 1998, rules that microsoft has a monopoly, they try to break it up the court says no, it's not going to get broken up the stock was doing its own thing, in the late '90s.

finally it did catch up with the overall market look at a 22-year chart of microsoft, and remember these dates from the beginning of it right here, inchally is when this was all going on for the most part, and that was the entire time that it was all about how microsoft was perhaps in violation, perhaps essential an antitrust violator. and of course we had a bear market, maybe it was related, maybe not, and a very long nothing for microsoft before it ever had the second act. these things take a long time even if in fact the government does get aggressive. mike. >> thanks very much. >> way to the right side. >> a big impact since he took over coming back to the other stories, facebook, is the headline the fact it won't lead to a change of the business model. >> there are two arguments the first is probably zuckerberg

will outmaneuver congress, and the investigatoruals agencies that are looking to it, and then maybe at some point there's some sort of settlement a check is written, but to your point, very limited impact >> stock is higher. >> because the market is smarter than, you know, to -- >> but -- >> the other way to look at this beyond just what happens today, the other way to look at this is maybe breaking on facebook would be a huge win for shareholders what if it were a stand-alone company. paypal couldn't survive without ebay paypal is now worth more than ebay at the time they were saying that, much more money was made when they broke up standard oil, a huge amount of value unlocked. same with the baby bells, so actually for shareholders it might not be the end of the world if in fact a breakup happens, but we're talking five years from now in between now and then there's

still considerations about the state of the business. these companies are doing well amazon is a great example. could they fight the government for the next three, four years >> teaming up against them. >> you know what, though there's never been an antitrust case where the consumer was benefiting and the government went after them anyway you have to prove harm to the consumer, and that's not what they're talking about right now, because the consumer benefits from amazon being such an incredible competitor. by the way, they have less than 8% of total retail how could you possibly say that they have destroyed retail they have less than 10% of it. it's not a situation where they dominate the industry. online is only one facet of retail it's not the whole pie it's a growing share of the pie, add organably with what walmart and target have been doing with digital omnichannel, there's no way you can't make the case

they're not out there competing. we need a lawyer to join this conversation. joining us is alexis gilman partner, represented at&t when the justice department challenged the time warner acquisition. weigh in, if you would do you think the government has a sound kay to go after -- >> well, i think we have to back up no agency, neither the doj nor the ftc has allowanced a specific investigation, so we don't know specifically. >> if they mention social media, though, isn't that sort of the -- >> sure, those are likely candidates to look after, sure, but toss clear, what the doj announced last night, and what struck me is the lang way they used they announced a conduct of a review of online platforms

when they launch a look at a company for its conduct or a merger, those are investigations, not a review i thought that was pretty interesting language they're using. when the doj or ftc do start an investigation, that's almost always confidential. very rarely does the agency announce an investigation, and when it does, it's typically only after the target of the public agency has done so first. >> is there any teeth to it. >> i think it's not clear they're investigating a specific company yes. they could certainly well be investigating facts and market conditions that might be the basis for an investigation, but that's not clear from the fdoj's press release. what's complicated in the u.s. you have two antitrust authorities in the doj and the ftc.

before one of the agencies can start an investigation of a specific company it has to get basically clearance, approve of the other agency to launch the investigation, and tech is one of those industries where the agencies have fought behind the seen to tackle some of the big high-profile investigations. so it's not clear to me that the doj has gotten clearance to launch an investigation or the ftc, which has launched its own tech task force, so it's not clear so far which agency is going to be looking at what. >> alexis, just quick will with the ftc settlement, do you think the privacy issues are put to bed for five years >> that was a consumers protection action, so i can't say for sure i will say that privacy hasn't traditionally been a theory of harm in any antitrust case there was a german case where

law does seem to provide some scope for privacy being a competition harm, but we haven't traditionally pursued privacy theories of harm in the u.s. under any trust law. thanks for joining us. >> thanks for having me. >> we're using "big tech" for shorthand. youe but these companies are so different in what they're doing, and they're going to be treated differently by regulators and investigators. >> apple a totally different can of worms if you're a demagogue or bernie sanders, and you want to make powerful applause lines, big it ecis -- >> what does that mean i think that point, let's take a step back. and the resolutions will be very different. >> i know it's one day, but

apple is down today, whereas facebook is higher still ahead, and they're reporting later as well. counting down to a huge afternoon of earns, facebook, tesla, ford and many more. we'll bring you those numbers as soon as they hit. a number of companies citing the trade war in their quarterly reports. we'll take a deep dive into the impact it's having on quarterly results. as we head to break. new home sales rising 7% in june, topping estimates of 5.3%. median new home price, just over $310,000 we will be right back on record high watch here on "closing bell."

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glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back to "closing bell." 44 minutes at the trade, a report all-time closing high will be 30.143, 0.35% at session highs. the trade war and tariffs once again showing up as a keep theme this earnings season i-robot plunging, citing in part

the direct and indirect impact, tupperware missing earnings, and giving guidance below estimates. what impacts you with the trade talks is the impact it has on the chinese economy. big chip maker sending a more posit note with the cfo on the call to do business in china. it's a theme, but certainly it came up in caterpillar, but they also have weakness in the natural gas business the surprise was on natural gas and crown his better than expected, whether it's banks or consumer stocks. >> and they sort of brushed off the trade war. maybe they'll see it in durable goods, in terms of weakness in china. let's drill down seema mody is following

caterpillar. >> hi, wilfred, a slow down in shale boom and higher manufacturing costs due to tariffs cutting into the prophet. over in affairia, growth remains a challenge. citing competitive pricing pressures as well. that stock is faring lower today. a close eye on what it sets tomorrow >> seema, thank you. phil lebeau has a look at boeing. >> will, this was the worths quarterly loss, but it's the future of the 737 max production line this is the comment from ceo dennis mullenberg. he said one option is a shutdown that might be the most official

things to do they currently are building 42 a month what will determine if they is shut down the assembly line if recertification habits and it returns to service, then the assembly line keeps going, and they ramp up production. we should point out today because of the so many of the issues regarding the max as well as engine issues with the 777-x, that first flight for that plane is being pushed out into next year was this a slip of the tongue accidentally today >> no, no, no. no slip of the tongue. no slip of the tongue. i think almost everybody agrees, if anything, this is dennis mullen did not berg and the team softening the market for the possibility they may have to halt production. no, this was not a comment to some analyst question. this was very clearly stated

repeatedly by boeing as a possibility if they cannot keep the timeline for the remainder of the year. >> thank you, phil. a steep decline in boeing, jo >> trader are talking about the 50-day and 200-day have now concernsed that actually is where the sell-off stopped that's not an accident you see a lot of support tend to come in at levels that short-term traders believe are believable i think it's emblematic, typically with a company with a disaster of this mag any 250ud and it's going to cost them a lot of money, you would have a stock that's selling 12 times earnings, maybe, versus the s&p, and it would bepaying like a 5 or 6% yield. you would say that's my margin

of safety. this is a 21 times multiple still despite everything going on >> so still too expensive? >> yes in other market environments we've seen blowups like bp in the gulf is a decent example of this, you say already, the to be has been hammered, and i'm willing to risk the legal liability and the period of time to recover is not that bad in this case markets by definition are giving them the benefit of the doubt i'm not sure there's a play for either value investors or technical traders, so i have left it alone, and i would advise other people to do the same until there's more certainty with the time horizon. >> all right we have under 40, 39 minutes left before the closing bell we're on record close watch for the s&p and the nasdaq

we're above that on the nasdaq, above it on the s&p 500. let's see what happens >> if not for boeing, the dow would probably by her as well. facebook shares have largely shaken off concerns this year. will earnings put a stop to the rally or addore mfuel wee find out after the bell. n, . kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you.

time to get the are word on

the street amazon being raced s. but the firm also lowering the full-year eps on the company, saying it expects the amazon's one-day ships, so downgrade in eps, upgrade in pricing target, no downgrade to revenue just a margin impact rbc capital markets are markets upgrading pultegroup it leaves a more risk/reward profile, also improved pricing trends goldman stacks upgrading party city to a buy. the firm says it's better halloween timing this year -- >> are you kidding stop. >> as key tailwinds for the stock. >> halloween upgrade >> hold on

>> it's an updre to buy -- >> no offense, that stock looks like it's going to zero. this has been down almost since they dragged it back out this was a private equity catch-and-release. there's absolutely nothing encouraging about looking at the price action i would like wait and see. >> so you're not buying chocolate for halloween? >> no, i'm not buying anything they give it to me in costume. >> you're a trick-or-treater for life let's talk about amazon. somebody that watches the show may actually own that one. i am a shareholder, full disclosure, which i think is important. al zone historically has always been a revenue growth story, but people say, can they ever earn money. they actually beat earnings be a

bill yor in net income four of the last five reports, so now the emphasize has shifted to, wait a minute, i don't know if that's so great that they're harvesting, where is the revenue growth i think top line interestingly will be the thing people are nitpicking about number two, they committed to get two-day shipping down to one. they had that before the second quarter. i know we're not there yet, but people will be looking to see if speeding up shipping times is lating to bigger baskets a and then of course thee consolidate -- >> you're trying to talk the stock up >> i'm not trying to i think that's the challenge for -- i don't need to it's a $2,000 stock. they'll be fine. those are the things that i think people will look for, if they can't show a reacceleration growth, and if they can't

demonstrate all that spending on shortened shipping times is helping the orders, then, you know, those will be what people harp on. >> it's up 5%, double most of what the s&p 500 has done. >> up again slightly today, with the upgrade from credit suisse the dow misses out today because of boeing and caterpillar. up nt,ex rick reider will break down his key theme for the rest of the year

we are on record close watch for the nasdaq and s&p 500 weak earnings for caterpillar and boeing are dragging on the dow. vesselors are awaiting facebook earnings. time for a news update courtney >> here's what's happening at an naacp forum, democratic hopefuls responding to the testimony on capitol hill. bless warren repeated her calls for president trump's impeachment. >> i understand there are people who for political reasons say it's not where we want to be, but my view, some things are

above politics we have them is our constitutional responsibilities, to do what is right. >> amazon may have rejected queens earlier this year, but it has its eyeing on brooklyn according to a report citing several sources, they are looking for a massive space to open a logistics facility that lets it quickly deliver orders they say the company could rent as much as 1 million square feet. a pennsylvania superior court threw on the meek mill's conviction that kept him on proa base for a decade. this grands a new trial, which the judges would likely say would acquit him if the d.a. decides to retry the kale. will, back over to you hey, mike. all right. we got the loss of trust sleeping around, that's

self-explanato self-explanatory, i'm going to ask if it's been too much fun, and then deep divisions, we'll talk about reconciling of difference differences one of the lesser discussed earnings today was hilton, it'sing a strong year. hilton was down in the morning, now up about half a percent. it seems like the trends are going the right direction. look at this chart industrywide, hotel occupancy trends what you are seeing here is the current path of sort of seasonally adjusted occupancy rates. it's essential keeping track with last year's very strong levels this is the median, and then of

course 2009 that was your drop here we go, airbnb, all the rest on the it teems like business and leisure trends look okay so clearly people are finding reasons to sleep elsewhere, mike. >> very inappropriate one for you, mike. >> i feel almost like a short story. >> it looks like it has a happy ending >> we'll see might be am businessius. mike, thank you, we are on report close watch here. for the s&p, less than a point away from an intraday report rick, good afternoon. >> my pleasure thanks for having me you're expecting a further wave of global -- do you think that's

priced in all right? >> yes, to a large extent, but we're about to enter the super bowl of central bank activity. frankly it's how much they throw at it. i think he said a pretty high bar last conference, whether it's quantitative easing or lowering rates, we'll do functionally whatever it take. a really big deal. how he articulates that tomorrow pretty big >> i loved your op-ed about recommend i recommending i'm curious why that failed in japan number one, and number two, what is the transmission mechanism?

are we saying that would be a wealth effect? given the fact that most people have a pension and are not relying on gains to retire >> that's a good question. and i think you're completely right. in japan, 2 isn't terribly effective. you think about it, japan has a number of dynamics you've actually got immigration, a number of factors working for you. what do you do this concept of keeping dropping rates, you go into negative velocity it hurts investment. you've got to create aggregate demand actually if you look at the equities in europe, they're paying 6%, 7%, 8% and borrowing at negative rate i don't think they'll do it, and probably not

in september, but you have to create aggregate demand. over time i think the ecb -- and there's other entities in europe that you can work in partnership with, get innovation, technology what are the names that there a are. >> mining and bangs. totally. just because he's been thoughtful, you have to get at the right capital structure. >> they buy stocks, equity funding gets cheaper, because there's a huge buyer of first resort, not last, and you have startups do ipos >> so first of all, europe is a disparate set of countries. >> say france and germany. so the partner where you get equity exposure, and do you buy in public equities, you know, in

other parts of the region. that's where you create aggregate demand look at the numbers today, where is the growth? who will invest? europe tomorrow versus u.s., china, korea, places with a real vibrancy. >> even lagarde with great split occasion fin necessarying skills, i'm not sure she can deliver that >> the politics are very hard. by the way, the politics are going in a any any of rate. >> what if it's cultural what do you say to the person that says, californians are risk taking by nature look what their ancestors did, look how far they went to get there, they're willing to do startups and take risk, and people on the continent do not have the 15i78 predisposition, it's not genetic, cultural they'll never have a silicon valley in immunish other paris

the demographics are not great, the actual deliverage is too big. what if you're the head of the central bank it is what it is, we have a problem, and we're never going to out-earn the debt burden, so you have to do a number of things is it political difficult? 100% buying corporate bonds, which they'll do more of, i think that's politically different by the way, fiscal policy is a better way to do it. >> whatever it takes rick, very quickly, you like european equities. prediction on what the fed does next week? >> i think the fed will go 2350, but i wouldn't -- they'll go 250 over the next two meetings i think they should go 50 -- >> wait, so you think 20 and 25?

i think there's a good 40% chance you go 50 you're supposed to shock the system, be faster and more aggressive when you raise rates, you go slow. >> we operate in a global economy. the e counter. b are 15 big countries are dropping rates you create the same thing where the dollar pressure is the rest of the world by the way, you're not creating that much inflation. >> rick rieder, thank you good to see you. we are on record close watch here, we did tick about 3017.80. financials are doing well today. communication services, netflix popping today after a sort of weak run since earnings. we are counting you down to earnings 85% of analysts say it's a buy we'll break down the numbers with an all-star panel, coming up ♪

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we are on record close watch we've got your last-chance trade coming up. >> after the bell, results from facebook, tesla, ford, paypal, laws sans. the numbers are coming up. f blo. [beep] you should be mad your neighbor always wants to hang out. 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.

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just releasing information on the settlement. >> this is a new chapter for the company. privacy is more central than ever to our vision for the future we're going to change how we build products, and if we don't, we'll be held accountable. >> we'll be hearing more after

the earnings report. more focused on privacy that is he ever before, josh 124. >> i think they get it. >> the big criticism is this is more compliance and oversight. on how they collect and what they do. >> why would it? the truth is nobody really cares about their privacy. we will exchange our privacy for convenience. switching focus, 12 minutes left, what is your last trade? there's been nothing to say about these companies. now we have two confirmed

breakouts. first one j.p. morlon. this is a bona fide breakout it's already happened. the one that looks even better is u.s. bancorp. no one ever talks about it they're not based in new york, they don't have a silly mascot, but this one looks incredible. this is the one, has already broken out and survive i think this is going to be a runaway train in comparison with the rest of the sector here is one that's in develop. keep an eye on sti, suntrust this is a regional, much tougher sector it's been consolidating around 64, 65 since february. now it has broken out. i think 66 1/2, the juice is loose. this is where this thing gets going. take very little risk here it might be even by a signal for

the rest this one is working. >> j.p. is the only one you own then >> i own jpmorgan. i own schwab, it doesn't look great. i might buy goldman sachs, it doesn't look good, but it could. a triple final trade, josh, good >> i'm off for three weeks now facebook, tesla, paypal, julia has a preview. >> the number one thing to watch is growing regulatory scrutiny is affects the company's business there are three areas that will reveal that impact, the revenue, which zuckerberg has warned will slow, user growth, which has been tag nating, especially in the u.s., and rising costs we'll have to see if they say anything about the challenge of

innovating and staying focused. >> julia, thank you. phil lebeau has a preview. really first of all, what happened to the gross margins in the second quarter remember, they really pushed the metal in order to make the delivery targets it's really elon plusk's commentary this drives the stock not only after hours, but will drive it tomorrow morning keep in company with on pace for it's worth year since 2010 current operations, they have a new vehicles coming out. then an update on the

restructures unlike he tess a la, take a ford shares this year, on pace for the best year since 2010 >> deer ra, what can we expect >> we're looking for what paypal tells us about the broader digit at spending background paypal shares have been on a tear this year however, on a price-to-earnings ratio, far more expensive. the street is expecting 75 cents earns per share. guys >> thanks very much for that contessa has a preview. >> analysts are expecting a 2.7% quarterly growth from the global

could sinceo giant with earnings per share of 78 cents. that would be 5.3% higher than last year, but for las vegas sands to deliver, it needs to deliver in macau the vip segment that historically delivered this gambling revenue is under pressure, and the trend is moving toward mass market gamblers, what they call premium mass, to deliver that bottom line that's what we'll be watching. >> contessa, thank glue we'll be cover all aingesles in our closing countdown. don't go anywhere.

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don't get mad, get e*trade and start trading today. four minutes left to go, time for the closing countdown peter joins us at canter fitzgerald peter, you've been cautious, we're heading to new record highs. are you at least encouraged by what you're hearing out of the corporate americas this earnings season >> it hasn't changed my view at tall q1 they were more or less flat so far for the xeens, earnings about flat, when you bake in expectations for what's coming forward, it will be down about

3%, expectations for q3 now in low single digits. i don't think this is an earnings-driven rally. thanks for joining us, we're out of time. apologies. over to mike we're on track for record highs. >> well, thank you very much starting to ask the question, very resilient impressive rally, also the seven-month-aversary. have we had too much fun the s&p 500 is up close to 30%, in fact, including different, you basically have 30% at this point since that low it's a total return on at annualized basis of pushing 55% obviously that's a cherry pick moment to point out. but they run but we'll have to watch how that plays out,

technicals all the rest it looks sturdy, but we'll have to watch it out to rick santelli s. >> yields moved down, but a two-day gives you a much better perspective. we just gave back everything from yesterday down two basis points on twos. curve flattening, never something the fed wants to see, but maybe more importantly we'll pay attention to ecb finally the dollar index isn't quite closed, but it's fighting for a four-day streak of gains seven years tomorrow another date in the history books, bertha. >> put chips at the center of that texas instruments and silicon labs with blowout outlooks, a baker's dozen of them in terms of chips that's what has the nasdaq at all-time highs facebook on tap to report this asp. netflix finally snapping a

nine-day losing streak without those faangs, the s&p earnings would actually be down about 1.5% year over year. >> and boeing was a real problem, report highs, not for the dow, though, with a few semiconnectors, despite boeings and cater pipillar disappointmes northrop grimened up coke as well after reporting its numbers. 3m is tomorrow, disastrous guidance last quarter. and also mario draghi from the european central bank, widely expected he's going to signal rate cuts tomorrow this is all about global central

banks backing the major stock markets. dow jones industrial average going out not far from the lows. boeing and caterpillar the big weights there. new high for the s&p 500, 3,019. there's the closing bell s. thank you. if you're just joining us, good afternoon. i'm wilfred frost. >> and i'm sarah -- the s&p and the nasdaq hitting all-time highs. 3019 up on the s&p nasdaq doing better today, and surging to a new record close, strength also today in the small caps, which is notable thieve under pressure lately up 1.6%, really the dow story

caller pillar boeing ways on the major average. part of the outperformance, the regional banking up 2.6%, and all of the banks getting a boost. interesting to see technology communications services, the next two best performing despite all of the headwinds. >> facebook higher. >> and also, as we discussed with josh earlier, we're positive despite two big, you but overall tracking better, according to facts, we have almost 78% best -- companies tend to bead the low expectations, but overall u.s. demand has been a strong beat. we have a slew of big name companies set to report any

minute joining us to talk about the market today, anastacia ohm 'rosa. >> and first, though, mike, in terms of which sectors shine today, it looks different. >> you saw some constructive rotation, the things that -- maybe he crowded from safer, big-growth stocks, and 1udly more so today. i would say impressive, resilient. the market seems to want more people in. i hate to do that, but that's the way it's acting, so on that's the way it's looking. everybody expects the fed to be friendly everybody and people are pretty happy i think we have to be on alert for the fact in a complacency will build here, but right now the actual market is actually very encouraging. >> anastacia, how are you encouraging? >> yeah, no doubt this is all about the wave of central bank easing from the fed, from the ecb, and i think that's the

single-most important trend. so we looked to the last seven episodes of when central banks actually cut rates we found that the markets tend to really into the first rate cut and rallies after. on an average, the so because of that we're using a bit of a barbell and looking for some oversold names sector is the best performing sector, so as the big pharma names are selling off, we think a lot of negativity is priced in but at the same time semiconductors and software will ten to offer -- the worst-performing group of the s&p, so that's up 6% you're not worried about the split occasion noise, the overhangs, the idea of some of the hopefuls >> we actually worry about it, but the fact it has been up by 13%, that makes us want to look at it. if i look at the sector

valuations, big pharma is trading at a discount to some of the names, so i think a lot of that risk is baked in. so you have to do the stock selection work, and they have less exposure to the part d, and some of the other ones, but i'll tell you another trade we like quite a bit is in european health care. if you think about sector more insulated from some of the regulatory pressures, it's definitely that, and offers a higher different yield. >> josh, one sector we haven't talk about yet is energy is that starting to look more atrackedive? >> i think you have this huge group of massive market cap, massive revenue, blue-chip companies that haven't gotten going yet. i agree with the health care, so many names, mckesson, cardinal health, unitedhealth, these stocks in one year are flat or down it's unbelievable. you can say the same thing about

energy can you say exxon mobil, the biggest company in the country by retch hasn't done anything in a year if those stocks start moving, forget about small caps start catching up. if you get upwarped momentum, it's unbelievable. if you get upward momentum like health care, like energy, sleeping giants that he will be meaningful for the market. that's where it's going to come from these are huge weights in the indexes. i agree with everything you had, and i think add big centering to the list these stocks are due. >> so if the theme is playing catch-up, they both like energy, both like health care -- i don't know if you like energy. >> yes, i agree with josh. i think picking up dividend yields whether in energy or healthcare, looking for high dividend year old, maybe some

cyclicality, i think that's the sweet spot in the market, you can findit in energy and healt care as well. >> you don't have to be bullish, by the way on oil prices a 3.1% yield on the xle. many of those companies are so hedged, upward oil would barely be profitable. so i agree that you want to look for dividends. you will find them in both health and energy. will, facebook beating expectations on the top line, reporting revenues of 16.89 billion versus estimates of 16.5 million. average revenue per user, a key metric, stronger than expected to 7.on 5 per your expectations had been for $6.87. earns adjusted earns per share were $1.99, an 11-cent beat versus expectations.

there are two one-time items that were in the quarter, one was an additional $2 billion charge because of the original fine, and the last quarter, they took a $3 billion accrual. they're taking an additional $2 billion here a second item is a tax change in terms of how compete clays -- so those are two one-time items, but if you include those, it's a beat on eps as well. 1.59 billion versus the 1.56 billion -- i'm sorry 1.58 billion expected, monthly active users in line with expectations. one key thing here, an usual thing for facebook, in the press release they have an i had temperature called "other matters. they were informed by the ftc that it would opened an antitrust investigation into the company. we have reported this before, but we have reported it as an inquiry or probe

this is the first time that facebook has acknowledged that ftc or antitrust investigation they announced a review of market-leading platforms that the doj announced yesterday. so we see the stock moving 2.5% higher but those antitrust and regulatory issues are weighing on the country back over to you julia, thank you very much of course there was a positive session coming into this, with a 40% run over six months, 56% run year to date mike, clearly a decent beat on the revenue line, daily average users in line, but average revenue per user was a beat. did we expect this >> i think the market was telling you it was something pretty good. the market has been looking around the corner, but instagram continues to eat the world

i think that's part of the takeaway here, pretty much bumping against the high, just over a year ago, 217 and 50 i think was the close. it's gotten here in a hurry. it seemed like a hated company by customers, be rig lators, it's not hated on wall street. >> it's not hated by customers they're growing users. >> right that's true, i think on the surface people say they hate it. >> most customers have no idea they're like i don't use facebook, it's lame, it's for old people i use instagram. >> like people used to hated cable company and they never unsubscribed. >> this is a stock that sells 25 times. where else will you find growth, market dominance like that at that multiple? they're talking about -- consensus is almost $12 earns per share and $100 billion in revenue. it's a reasonable forward

multiple given the growth, and you know what? they have to pay a fine every three months we've seen that before it's not the end of the world. >> doj antitrust review, and not every company has that. let's discuss further with ed lee, contributor from numbs number of tim -- "new york times" and ali what's your is take? >> i think pretty positive one is the average revenue per user or user monetization. that continues to grow we think that's positive especially taken account or assuming the user growth rate may slow down a bit. also user engagement if you look at the ratio of daily average users over monthly, i think that's increased lightly from the last quarter and last year. overall it looks positive and these guys continue to attract user attention. >> so clearly the numbers are good, as you said.

what about the headline it was informed in july that the doj would look into -- would launch an antitrust investigation into the company? does that put a cloud over it? >> i think it does i think to a certainly extent it does it may limit the up side for the stock in the near term and also in the long run. a couple things to take into account is that for antitrust, the investigation itself, the negative headlines associated with it, could pressure the stock, but also, you know, a lot of the antitrust cases, where judgments were required, the judgments had been based on whether the quality of the services had been impacted or whether the prices have actually increased with worse quality we don't think so in this case, especially if you take into account instagram.

you have users kinning to love the services, and also the advertiser continue to love the opportunity to target those users, as we see with user monetization so in our opinion, at least, it may be tough to make that antitrust argument against facebook >> >> ed lee, what stands out for you? >> clearly no one is leaving facebook, or at least no one is leaving instagram. efacebook blue, the main app -- i know you were talking about it earlier, you're kind of drawn back in, because you're invited to a party through it, or sent you a notice, hey, so-and-so commented on your post, something like that. so they have done a pretty good job of maintaining a user base, but in terms of regulatory overhang, there's something important to look at, doj taking a look, the lead antitrust executive, he's a conservative when it comes to antitrust, what

that generally means is he doesn't like government getting into the behavioral remedies around facebook. what we saw with the settlement is an entirely a behavioral thing, where they're going to appoint the third-party body to oversee the practices. that's the kind of thing he doesn't like if there is some kind of settlement, it will come to something like a divestiture, like selling off an instagram or something like that, could be devastating. it's more of a question mark and sort of how it's looking at antitrust. it's not just about about consumer choice and whether it's expensive or not, but has much to do with how it's impacting other competitors. we're still working out of a bjork understanding of that. what's your take on that

>> i think it's impressive that it continues to -- absolutely expenses are going to be rising in order to adjust to this new world. you know, in europe they passed the european data protection act, and i think something like that could very well come to the united states. so whether you are a big tech company, small tech, whether you're a company period, you're going to have to invest in data privacy compliance i would expect that the expense line items will continue to pop off the pages. so the way we have thought about this, besides some of the best tech companies, as a hedge, we decided to invest in help deal with things like access governance and using art fifty intelligen intelligence >> you want 56% so far this

year. we're going to continue to watch facebook thank you, ed and ali. las vegas sands is out with numbers. >> we have a miss on both of top and bottom lines here. your honor in at 72 cents adjusted the revenues come in with just a slight miss here versus the estimated 3.39 billion. we're see the softness in macau, and also missed ebitda estimates where they were expecting 334 million, and came in with 346, we'll lurch for the doom, but the analyst says he's still computed about the opportunities for growth

i get in conclusion it's a that's honestly the main takeaway clearly not something that allows you to say the story has turned. >> it's a nice bounce back up 25% down 4.4% off the back of this josh, coming back to the facebook question. a huge runoff. they have improved the platform.

when you look at the events, the soccer tournament recently, the twitter debates, twitter is the only place to be for that stuff. we had obviously a big nba season within this quarter. >> josh brown's wednesday on "closing bell." >> when you look at the events, everything is lined up for twitter to have a great second half, and certainly should have already started. the pressure is on if they deliver, there is a -- there is a long, long period of consolidation in this stock that should be resolved to the up side with a breakout i'm long i hope that's what happening. ford is oat. phil lebeau has the numbers? >> ford beating the street on both the top and bottom line earning 32 cents a share, one cent better than expected, at

35.78 bit on ordinary that free cash flow would not get people excited automotive ebit up 19%, a little lower than people were expecting. some of those analysts may not be factors in the explorer loss, and they had to bring down the assembly for a w450i8. earnings per share guidance for full-year 2019 between 1.20, 1.35 a share the estimate is for 1.39 245 might be one reason why you you see shares of ford moving lower. ford says we have a higher tax rate through the second half of this year, also full-year adjusted ebit is up by $500 million in terms of guidance they expect it to be 7 and $7.5 billion.

again, ford beating the street by a penny guys, back to you. a bit lower after hours. phil, thank you very much. it ran up into earnings, signs of progress. i would say muted guidance it's the kind of stock the market keeps on a pretty shore leash. it's just not that confident about where the auto cycle is headed i don't think it's a surprise that if -- even if it's for a higher tax rate. >> this is a $10 stock now, what does it look like in a recession? >> this is as good as it gets. >> arguably two years ago is as good as it gets. but you're right. >> they've been struggling in europe, china -- >> i think the issue is usually the fed is cutting rates, auto stocks is something you usually grab for, but it's a different cycle right now and different industry, because you have this

overhang. >> definitely the market is not necessarily rewarding the longer -- but i can make a contrarian case for some of the autos here if you look at what's happened with interest rates, the auto activity is starting to pick up. in china, for example, auto sales are down 8 or so percent, give or take, but they should be moving higher for the rest of the year so you could make a case here for picking up some auto shares. i'm not sure -- >> you first, though ford is up, beat on eps, with slightly soft guidance. thank you both for joining us. still to come, much more reaction to facebook's strong earnings, when we heard from warm-up top shareholders. plus awaiting tesla results, how to trade the stock, coming up next.

we have an earnings alert on

paypal. >> we're seeing mixed results for paypal, sending shares down about 5% revenue coming in slightly shy of expectations at $4.31 billion zerz the 4.33 that was expected. adjusted eps of 72 cents, when you eliminate an unrealized gain of 14 cents. guidance a mixed bag here as well due to three things that they say will be implemented later. paypal increases the full-year forecast, and expanding margin forecast, total payment volume an indication of how digital payments are doing, $172 billion, that's pretty much in line with forecasts, ven mo payments falling short of the street's forecast. 24 billion versus $28 billion.

we talk about ven mo all the time, because paypal is still trying to monetize it. stock as i mentioned is lower in the afterhours, guidance by 6% if you think of it, this is a stock up nearly 45% year to date guys >> thank you so much for that. on that venmo line, a mills, but still growing 70% year over year, but nonetheless something that analysts focus on >> top line miss, but certainly it's not set up for anything like that, record high essential given back in the after-hours, basically one of the very favorite space within tech, is there nufds volume to go around?

, visa closed higher today, all-time highs adding to the dow after a little weakness. >> $4 billion shortfall for venmo volumes is not significant. >> $4 billion manx it sound like it's almost declining. i absolutely agree this is one of the big questions, when you get the banks starting to put this in with zell, you can argue it improveding that profitable if it allows them to shut down a store. still ahead, we are still awaiting results from tesla, much more coverage with facebook, the stoic up after hours.

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facebook shares are higher a few molt ago, as much as up over 4% initially on the better numbers, but are now up less than 1%. they came in better, average revenue per user higher, user growth higher as well, but we did learn in july that facebook was notified by the doj of an antitrust review, which i guess is one step further -- it's an investigation now, one step

further than we knew >> and the stock had been are had been racing higher the power of the business evidence, yes, margins were down, because they ramped up costs to deal with the issues, and yet still they have profitability and huge growth. that's almost in favorite of the argument that it's almost too powerful. >> ford beating on both lines, guidance down 7% so it's slid significantly times for a cnbc news update bill griffeth has it. as you must have heard by now, robert mueller spent most of the day on capitol hill, appearing before two committees. as you can imagine, the democrats and republicans had very different takes on his testimony. >> what we established today in the hearing is we have a felon sitting in the white house donald trump committed multiple crimes what the american people and

congress does with that, we'll see in the next few days. >> i don't think this is going to change anybody's mind if you want to impeach the president based on this report, you certainly can do that. i think it will blow up in year face there's no underlying offense. meanwhile, we have learned that rutge hauer died last friday the dutch newspaper. he was 75. for those of you not old to remember "bladerunner" he was more recently in "true blood." the ancient vampire. >> very good reference. >> excellent. >> look at that. still to come, we're still awaiting tesla's quarterly results and how you should be trading the stock.

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♪ facebook just out with results, beating on both the top and bottom lines, user numbers coming in strong the stock is well off its high in after-hours session julia boorstin has been digging through that release julia? >> a couple items from facebook's better than expected results, facebook's capital expenditures coming in significantly lower than expected at 3.8 billion, less than the 4.5 billion that that was the analyst consensus projection user growth in the u.s., facebook grew daily users by $1 million, after that number was flat while european daily users were flat, showing no growth

from the prior quarter in terms of global daily active users, facebook added fewer this quarter, 25 million than in the prior quarter. wilf, back over to you. >> shares on facebook, are higher, though giving up some gains. for more on the earnings, let's bring in dan flax, and carey fasa, and and ed lee from "new york times" is still with us dan, what are your initial -- >> the numbers look strong overall. the user metrics suggest that the users of the platforms are still finding value. the stock has been strong, so perhaps there's a bit of profit-taking. if we step back and think about what's going on, the management team are taking a more aggressive stance towards

privacy and transparency that's ultimately what will needed to make sure this platform is robust, vibrant and can continue to grow from an invest standpoint, we think there's strong growth potential, and overt the medium tern we think there's -- at messenger and whatsapp. >> carrie, as a shareholder, you must feeling good about the numbers. do you have something good the fact that they revealed that the doj is launching an antitrust investigation? >> well, sarah, i would say a couple things about that the first is, we heard this morning, as did everyone who read any kind of publication online or not, that there was an investigation going on it was interesting that the nasdaq hit a new high, the stock was up, and several other big tech names were up as well it's interesting to see how the market did not react to that

news, which i have to say could have been quite damaging just from the headlines so we've gotten through that now we know there's a bit more, but considered this, from the time the market was falling in september, there had been expectations of some kind of investigation. this was not new news for the market, and we've gonefrom the low of 124 on december 24th, up over 60% to the price today. so the market has absorbed that, has really moved the stock higher, and we're not even at the all-time high, which is 217. so looking at the numbers, we saw strength in earnings, and user engagement, instagram is doing phrase the sales could add 3 to 4 billion of incremental revenue, and $5 million for this quarter, which was what they were fined so i think that owners of facebook might be relieved, but they should also be positive and

quite happy with what we've heard so far from the release and the company hasn't started to talk yes. >> again, i don't think there's too much in this earnings report that is super surprising i think a lot of the settlement with the ftc that was announced earlier, the new thing with the ftc and what the doj is looking at, that's a bit of a wrinkle, but i think that's been there. people have known that for a while. i don't think that's necessarily a new thing. i think what we need to look for between both these regulatory bodies and congress just in terms of how you're -- zuckerberg has talked about. a set of products, more direct group messages, fine, that's great. that might address some of the issues, but how do you make money out of that.

if you like instagram that might be another part of the narrative. he is a conservative he doesn't like behavioral remedies, he wants structural things i want to take one action and walk away. i don't want to keep monitoring you. >> i'm trying to is figure out what the administration is trying to. elizabeth warren has come out, breaking it -- abc as of regulatory it's obviously a populist issue are they trying to channel the outrage, or trying to make meaningful reforms here. >> i think there's two things going on legislators, whether this --

harder to gauge frankly. you want to retain this as an issue, if you solve it ahead in 2020, with all these other actions, you kind of lose it as a campaign issue so i think in a way that speaks to facebook's advantage. means nothing will happen in the next two years i think longer term there would be something they want to see a say over what the legislation would look like, so at least they're aware of it and have some say how the business practices will go forward, but i think there's a real within the antitrust intellectual body, there's real change in terms of how that's being applied. >> daniel, you expect to boost in the names you yet to report. >> there's all of these companies need more regulations, needs to be more transparency

with the users, with the governments. i think what is important to note here, these digital platforms, the evolution is fluid, so the regulations or the steps or the framework that may get put in place today necessarily will have to look different 12, 24 months and beyond i would add that if we think about different countries, different cultures, different societies, people view these issues perhaps differently, but i would say broadly speaking it's clear that more work is needed if we focus on facebook, the fact that they are taking a more aggressive stance and there's a shift under way, i think that's positive over the median term. thank you all for joining us facebook shares up a little over 1% coming up, we've got much more on this wild hour of earnings, as we counting are you down to tesla. we'll be right back.

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flight disruptions the stock being hit in after hours. >> thank you very much over to a market flash on bristol-myers. >> meg has the details. >> bristol-myers stock is falling 'they put out an update on a late-stage clinical trials for drugs for lung cancer. this is a series of negative readouts, though it's had success in other cancer areas. merck is trading up slightly, because their drug has had more success in this area >> another win relatively, meg thank you. back to phil lebeau for an update a ford earnings >> wilf, look at ford, stocks are sunday pressure. a clarification here, this is a miss ford earning 28 cents a share for the second quarter, the

estimate was for 31 cents a share. that's you why you see ford shares down over 6%, ford fall short, earning 28 cents a share. guys, back to you. phil, thank for that sls re still counting down to tea'results. we're back in a couple minutes

facebook and ford both beating wall street certains estimates. so as we got clarification from phil lebeau, missed on eps, also had soft guidance. las vegas sands missed profit and revenue expectations

and paypal with disappointing sales. also facebook the standout let's go back to mike santoli. final dashboard of the day >> we saul ref tiff strength, r differences here it shows you the makings of a potential comeback in small cap. so actually it relates high-yield bonds, small caps and large caps let me explain so right up here, this is the junk bond etf, right you see it has been relatively strong, especially lately. this is small caps, relative to large caps they have been under performing. that's an unusual gap right here the rest of the times you see generally this gap gets closed one way or the other this bottom chart shows that this di veerivergence has only n this way a couple of times before in recent history it can be closed two ways, small caps can outperform large caps bringing the blue line higher or

high yield debt can weaken in absolute terms because rates go up or risk appetites wane. that's what i would look for with yields and credit solid it seems people are rotating into small caps to buy beta for a comeback, guys. >> people looked at the small caps, at the traps lagging saying, what is that telling us about the strength of the domestic economy then you get a day like today and it looks like a catch-up. >> exactly you want to see it continue now. i would say the banks have been part of the story because they've been lagging but this is five or six days in a row they've been running and they're starting to create a little more momentum, at least on a relative basis compared to the overall market that's what we're looking for right here in fact, the safer quality big tech growth stuff starts to pull back. >> thanks very much. we are awaiting tesla numbers which we expect imminently dan ives is onset. what are you looking out for >> around gross margins, can

they keep the gross margin knowing that sort of low to mid 20s in terms of trajectory ultimately it comes down to do they rip the band-aid off on the overall unite guidance for the years. do they take their medicine here that will be the key question as well as profit building on the q3 and q4. >> numbers are just out. phil lebeau with numbers for us. >> hey, sara not surprising we are seeing a loss from tesla. company reporting a loss of $1.12 per share, revenue coming at $3.65 billion, a little shy of expectations. free cash flow, $600 million the automotive growth margins which a lot of people were focused on, coming in at 19% it is the guidance that gets the most attention here. shanghai on schedule to open, the shanghai plant on schedule to open by end of the year the the model y is scheduled to be launched by fall of 2020 in terms of the company's

ability to deliver between 360,000 and 400,000 vehicles this year, that is the guidance. they are reiterating that, but their cap x for 2019 will be down a little bit from previous guidance at 1.5 billion to $2 billion guys, i will dig through more of the investor letter but, again, tesla reporting a loss of $1.12 per share. there you see the impact of the stock, down about 7% >> phil, thank you let's bring back dan ives, managing director of webb bush securities he's on neutral on the stock has a sale rating on the stock, a price target of 1.50 dan, i went straight to automotive gross margin which a lot of people were looking for, 19%. i think missed the forecast. >> clearly for the bulls this is a disaster story in terms of the gross margin we knew what demand was in terms of growth, but it comes down to can they do it profitably. you need to see something with a two in front of it this is something that will be a gut punch for the bulls in terms of the gross margin number.

>> explain why the margin is coming down. is it because people are not buying the more expensive model, the s? they're buying the cheaper models instead, or is there something else going on? >> that's the crux of the bull/bear thesis right here, can they be profitable with a lower price, lower margin units of that's been the issue. you could sell more cars can you do it profitably if not, this company will have to raise more capital next year. that's why it is such an issue for the street. >> gary, that said, delivery as expected coming in at 93,000 we have the guide to that. revenue is basically in line and the guidance on deliveries for the rest of the year was not cut. so do you think the share price reaction to the down side is overdone >> we think this is an extremely demoralizing release for tesla i say that because the stock had bounced almost 50% from the low in early june, and there was some expectation that they might beat here. the bar was pretty low for the quarter, but they lost $1.12

it was a big miss during a quarter in which they had record vehicle sales, record high vehicle sales. so you have to look at this and question what the path to profitability looks like for tesla going forward if they can't generate a profit on record high sales. >> i was going to say, so for all of these reasons, you know, obviously new caution hereby in terms of looking at how the stock is reacting. we now it can swing one way or the other, but the setup going into this number was very interesting. it is basically the path of maximum frustration. massive collapse below 200, short sellers, if they got aggressive, stayed aggressive, they got killed on the way up. stock comes back up to 260 which was the absolute bottom of a year and a half long-range, so this report was going to say, okay, is it going to be allowed back into the range or denied. for now it looks like it is getting smacked below it on a technical basis people are going to say it was a head fake move to the upside.

>> and fully at guidance at 360,000 to 400,000 deliverys if they hit it by the end of the year, does the margin on the gross go away or is it key to you? >> it is still a focus but it would take away the doomsday scenario i continue to think whisper numbers are at 340 to 360. that 360 to 400 continues to be a massive challenge. like garett talked about, if you look at the profitability here, this was a goldilocks quarter and you lost over a collar that will be in my opinion the gut punch for the bulls. >> i'm looking there's so much commentary in the letter as they release it beyond the numbers, which is good to get. we learned that average selling price was stable, which is a question for the model 3 at $50,000. manufacturing costs declined i mean that's positive incrementally, right the model sx which there were questions about the demand on the more expensive units, delivery goes increased to 17,722 what is the demand story shaping

up to look like here >> the problem is they posted about a 19% automotive gross margin for the quarter that's a step back from what they did in the first quarter, and it is because four out of every five vehicles they sold during the quarter were model 3s now, that's an inherently lower margin vehicle, and that's a problem for them customers aren't buying as many model s and model x vehicles, and really the next catalyst is the opening of their china factory. but the problem with china is auto manufacturers are notoriously -- are notorious for struggling from a profitability standpoint in china, and the china auto market from demand standpoint has pretty much collapsed over the last year so this isn't a pretty picture for tesla. >> garrett and dan, thank you both for joining us. tesla trading down 9% in after hours. >> thank you. >> now time to focus on tomorrow more earnings. if fact, the busiest day of

earning season tomorrow, amazon and alphabet amongst the many companies reporting. let's start with a report on amazon deidre bosa has it for us. >> amazon returned to big spending days the past quarter, rolling out the one day shipping the street will want to know if the pricing is driving more impulse purchases and more prime memberships. with that more spent, amazon's string of report profits could come to an end analysts expect a growth of 11% of growth year over year on revenue of $62.5 billion, representing growth of less than 20%. analysts are likely looking for clarity on how amazon could respond to regulatory scrutiny amazon is usually quiet on this front but we'll see if tomorrow it is different. back to you. >> all right deidre, thank you. alphabet set to report tomorrow josh lipton here with the preview. josh. >> reporter: so, sara, alphabet is up about 9% this year but it

does badly lag the market and the tech sector. street expecting q2 eps of 11.32 billion. the company is facing head quins including slowing growth and increasing regulatory threats with the doj opening the antitrust review some believe google could be in the crosshairs in part given its market share in search guys, back to you. >> thanks for that a lot of after hours moving. >> facebook has slipped as well. so it looks like it will be a bit of a test here of the notion that earnings have been good enough, we have the fed, lots of things moving in the bull's direction. very good action today. >> and regulatory pile on. >> today's record -- >> a little bit. hey, it was a soft open today, too, and there was resilience throughout the day i think you have to be careful of the fact though that we're getting to that point, semiconductors leadership group seems really super overbought,

needs to cool off. we have to see how the market me tap lies that. >> we did see strength in the banks and as was said at the top of the show you can rally to record highs without feaang. >> the choreography has to be good but it is possible. >> we're out of time that does it for "closing bell." >> have add goo evening, "fast money" begins right now. "fast money" starts now. live from the nasdaq market site, i'll melissa lee traders are guy adami, steve grass owe and pete najarian. facebook reporting after the bell that stock seeing a bis reversal as the conference call is getting under way. julia boorstin is standing by in los angeles. we will get to the red phone in a few minutes. we get started with the big after hours mover so far and that would be tesla. look at that down 11% right now