policy but with a wink >> so starting but not ending. so look for more rhetoric about possibly pursuing this depending on how the fed meeting next week goes. >> and larry kudlow pointing out that what the president really objects to is other countries that they themselves may be manipulating their currencies. >> and we might pursue measures there. thanks for watching "power lunch. >> "closing bell" starts right now. welcome to "closing bell." i'm michael santoli. i'm here at the coca-cola post coke actually the best performer in the dow today and for this week broader mpicture is more mixed. s&p 500 and nasdaq both on track for all-time record highs as we get into the final hour of trading. we'll break it all down. >> and i'm sara eisen. let's look at what is driving the action second quarter gdp ahead of estimates 2.1% growth. alphabet earnings leading the

tech sector higher and the federal reserve decision just days away with an interest rate cut firmly expected by wall street joining uts for ts for the hour lindsey bell perfect day to have you because you are the sort of earnings scorecard keeper things feel a lot better than they were expected going in. >> absolutely. this was the busiest week of earnings so far this season. but what was surprising to me is hear from all the companies talking about the outlook. i was expecting them to cut numbers sharply and most reiterated and even raised guidance of course there is a few that cut and took things down because of uncertainty around trade and other things but i thought that it would come from a more broad spectrum of companies. >> the themes that we can take from this week it seems that consumer geared companies doing very well. the great big tech companies that we've been valuing for five years or more proved that that is why that they basically have great

businesses what are we going to see in the coming weeks in terms of sector, industries, what comes next? >> i'll be focused on the energy sector and then later the consumer discretiona sector, and the energy sector is expected to see yet another quarter of earnings declines. they are expected to have declines all year long in earnings growth. so oil prices haven't done so great this year. and that is a key driver for the sector >> technical earnings recession second quarter in a row down >> why believe so. we're almost flat eps. i'm row jekprojecting 2%, 2.5%. >> and it is kind device >> something to talk about >> not in statute that we know what this is, but good to know that we won't be below the flat line most likely anyway.

so let's focus on some of the big stories. seema mody has a look at the movers and today's gdp print kate rogers is covering mcdonald's and deidre bosa has amazon and josh lipton watching alphabet. >> highs of the day and on pace for a record close, that gdp report showed that americans are spending more thanks to lower unemployment and higher wages. that story also showing up in a handful of earnings reports as well take a look at starbucks and mcdonald's, both all time highs. the question is can the trend continue in addition to the consumer names, take a look at retail some very tough first quarter earnings season for the retailers. and that earnings season sector starts next week and a number of them at 52 week highs. we're about 40% of the earnings season part of the story today of course is tech

make text message players including alphabet moving to the up side driving the nasdaq higher as well back to you. >> and on the consumer front, gdp numbers out, 4.3% growth from the consumer. that was the best level we've seen in a while. clearly doing all the heavy lifting for this economy and providing a better backdrop for earnings overall how do you see it? >> absolutely. we saw a slowdown in consumer spending in the first quarter. they picked right back up in the second quarter of course that slowdown came from a strong fourth quarter holiday spending season. but we expect the consumer to remain strong here and i think lgsz even though business spending was weak in the second quarter, i think that what you did see is at the end of the quarter business spending and durable goods orders picked up so we want to see that continue on >> and speaking of the consumer, let's turn to mcdonald's kate rogers has more on what was

another strong quarter >> that's right. so mcdonald's beating on met vehicle nearly across can the board. so the u.s. consumer does remain strong same store sales up 5.7% as proceed mowings and store upgrades known as the experience of the future continue to and i off for its franchisees. and steve easterbrook said it was the highest u.s. comp since the launch of all day breakfast. mcdonald's is starting to roll out its dynamic yield technology as well. as you mentioned the stock did hit the new all-time high and year to date up around 20% back to you. >> mcdonald's the kind of stock that for some kinds of markets investors are just hiding it because it is stable and now you see a bigger growth story behind it i wonder if it means the market is already kind of placing a high value on it because not a huge move today in the stock >> no, i mean the stock has had

an amazing run but you could say that about a lot of different stocks too. so this is one that i think investors would be willing to stick with given the growth trajectory that is out there those comp store sales number ups were out of control. they were just amazing so i think it goes to show that this story has longevity, it has legs so i'd stick with it >> yeah, i guess 50, 60 years at this point so let's drill down on two faang names moving on earnings starting with amazon deidre >> amazon is in full spending mode and that is cutting in to profits. investors, they don't seem to mind much because higher spend translated in to faster top line growth within day shipping costs may be bigger than expected, but as the cfo noted, they have been down this road before with warehouses and fulfillment, the willingness to spend on innovation in the past rather than deliver profit has paid off so far. so investors remain patient for now. this time around though, things

could be different amazon is facing international and of course regulatory challenges >> deidre, thank you alphabet is on pace for its best day since 2015 actually contributing a huge chunk of today's index gains josh lipton has more in san francisco. >> so heading into this print alphabet was lagging the market and tech sector, but today i investors are mil piling in. easing fears of slowing growth that have weighed on the name. and the company gave investors something else they wanted too, more disclosure. revealing that its cloud business is now on track to rake in more than $8 billion annually the ceo saying he wants to triple that sales force over the next few years >> josh, thank you it has been somewhat mixed bag overall for the faang stocks this earnings season

fbi a amazon missed on eps, netflix missing on revenue for more on how investors should play this group, let's bring in brent thil aand michael. michael, start but but investors no not quite positioned for this acceleration quarter to quarter how do you treat the stock right now? you may be cautious on the up side i have been pretty constructive about trend in the u.s we were surprised at how robust things were with regards to europe that came as a big surprise. facebook i think had seen much more of an impact from gdpr so their reacceleration made a little more sense. with regards to the large cap names that are facing regulatory head winds, i think we're on the mar kin stigin still a little b cautious since i think that it will stay as an overhang to the multiples. you had google which is

underpatriot, shounder patri weight, shorted by hedge fund and stock up 10% that is kind of underwhelming. and people probably ov overextrapolated the negative trend line after a very disappointed q1. >> and the stock remains below its highs. >> yes >> and it is kind of a predicament for investors because what we learned this week is the fundamentals of this group are strong and healthy and they are growing revenues double digits and sort of unfazed by all of the regulatory headaches so far and yet you have this big overhang with all of these departments looking into their business practices so what did you do >> i think the dark clouds are kind of away from the stocks it has been hammered for so long that regulatory will crush these stories, we just don't think that that will happen. regulatory as ceo of google highlighted is something that the companies have been living

with they have been seeing it for a while. so i don't think that the regulatory piece is the most important. i think the fundamentals google just stepped up with the largest buy back ever. they are putting a quarter of their cash position to buy the stock back we think that it is going higher we think that it is undervalued relative to its growth and you look at the move today, i think there is still more left and you look relative internet software versus other sectors of tech, we've been highlighting that we think the valuations are actually pretty reasonable relative to what we see outside other sectors of tech. so we think that there is actually support for these names going forward. >> looking beyond the regulatory question, amazon in particular here, seems like it is a little bit of a cautious surprise to the numbers. amazon is doing the hard stuff in terms of logistics, but where does that leave this story

>> they had effectively been meeting the top line and blowing out the bottom this quarter. again, a reversal. acceleration on the top line and they missed on the bottom. and this is all driven off the one day delivery they will continue those investments into the next quarter. see if it is clear that those investments were higher than they actually anticipated going into q2. so we think that it is the right thing just like they did five years ago and all these initiatives we're seeing today, they take the long road and i think investors will shrug this off. aws picture is still healthy i think there is a story going around that google and microsoft are having share gains we don't think that is the case. they are the 800 pound about gorilla and they are is multiple laps ahead of the others in the space. >> and michael, i see your two top picks with snap and twitter because they don't have the doj overhang so you expect this to be an issue? >> yeah, i don't agree with brent. and i have a lot of respect for him.

i think amazon going into the print i think investors were fully braced for there to be a meaningful guide down on pragt income people expected revenue acceleration it was definitely much more profound than people expected. but i actually think that you have to be respectful that the competitive intensity in the cloud is going up. and the thing that i found more striking and was most surprising to investor, people thought maybe $150 million more on the revenue side i don't think that is as disconcerting as it was the margin takedown. and that basically happened in tandem with roughly 700 million incremental on tech and content. they talked about it being aws hiring and alexa hiring. so 13% head count growth for the company. cfo said on the call that tech and content hiring went up by around 26% so it was very unusual versus the trend line i think that the street had gotten a little complacent with

the shipping costs we aren't werenweren't surpriseg that was it is nice that google is giving more disclosure. buyback is a fabulous thing but even the $8 billion, that doesn't necessarily blow me away if i take the last disclosure. maybe it has grown around 50% by way of comparison when amazon was at an 8 billion run rate was growing much faster. but let's look at what has happened evolution-wise for the cloud and google i think that they had severely misexecuted under diane. she wasn't that effective. tom -- which i think brent can talk to this i think tom is a well regarded executive in the valley. i suspect before he took the role that he basically said if i'm going to take this job, you'll basically charter me with being able to win. so you saw pretty quickly after he took the job they went ahead and they made an acquisition of around 2.6 billion in looker

which was a sign of you know what, they gave him the charter, he took it, they will lean in and basically fight to win so i think through trend lines the shipping doesn't surprise me the content jump was pretty dramatic so i think in the penalty box until q3 and you basically have got a better sense of what things look like in terms of aws growth and margins >> and these stocks as a category have done a lot of work for the market here in terms of getting the valuation expanse. big cap growth, these types of stocks still do you think have anything left? >> yeah, i think that they still have a ways to go. this is a group that investors feel most comfortable investing in top line growth anywhere from 20% on overall total growth to 20 plus on ad growth so they come have a lot of drivers. so i think this is definitely

where the market is going to gof drivers. so i think this is definitely where the market is going to go. >> despite the regulatory overhang and the investigations? >> because the user is still going into use these stock bes because of that, ad dollars will continue to come their way and that will help profitability >> they do seem to work when the market is playing offense and defense. we'll see if that continues. brent and michael, thank you very much. still made, financials among the week's best performing sectors. one firm just upgraded three of the country's biggest banks. we'll break down that note and we're just days away from the all-important fed decision we'll look at where the fed numbers stood before the blackout period and discuss you whether new data could change their mind dow up 47, s&p 500 and nasdaq on track iffor a record close litary and it really shows.

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everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! 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. 42 minutes left of trade we're on record close for the s&p and nasdaq nasdaq up 1.2% adding to the gains we've already seen this week on mostly better than expected

earnings, better gdp number as well michael has today's market dashboard. >> plus i get taylor swift as my walkup music let me go through the dashboard. hills like white elephants the discussion we had about faang. yes, that is about food. paris is cheaper relative yield story. and then the rest of it in a little bit we had a happy outcome to the macro story. hills like white elephants fdn the ticker symbol, it is the closest thing i think to act like what the faang sector behaves like so you see it here get to a really clear but not extreme marginal new high. so along with the rest of the market, faang and faang-like stocks, but a third of this etf is the big names that we're

talking about certainly an all time high. is this a two year chart clearly a gut check, but still leading the market at least marginally the same etf relative to value stocks, so this is just a proportion what is really shows you is that it has basically been a push no net progress on a relative basis for faang against value since the middle of last year. so one year basis, value starting to hold its own and you see right here a little bit of an up trend of value compared to big cap growth didn't mean it is one or the other, but the way that we've seen banks do really well the last couple weeks as big tech has too, it shows you that the market can accommodate more than one style at once. so not strictly a straight bet on faang and if faang isn't working the whole market falls apart. >> lindsey, what does that tell you? >> i was looking at that and it tells me lmg that maybe it almoi

a stock picker's market. some of the faang and some of the other big growth stocks doing well, that you have to be choosy about who you will be in. >> i wonder if it is something about earnings, the overall environment just working >> yeah, exactly i think that the huge growth stocks have been when you can't count on growth anywhere else and now that is changing at least early signs that it is changing the market is trying to sniff that out up next, we'll take a trip to toy land on today's word on the street and drill down on a new bullish call on hasboro. and we'll preview monday's earnings report on beyond meat how do you pcexptari eections for a stock is that has done that

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time to get the word on the street up board, downgrading match group to market perform from outperform secular growth is increasingly priced in. shares of match up around 80%. yeah, pretty tough to argue that the bullish case is a mystery, the street looking at that chart. >> what is that? is that good for match making? >> i think that it is just a secular trend. we see the stats this past couple weeks about the number of relationships that have started

online versus every other way. it has gone vertical >> next up hasbro from buy to hold the toy maker has demonstrated strong results over the past two quarters hasbro has also generated revenue in the big screen business and finally kpw upgrading citi, goldman sachs and bank of america to outperform. those three stock bes best positioned to benefit from an extended economic cycle. bank of america also moving on news that berkshire hathaway has increased its stake in that company. you like i think goldman and citi there is a question about whether they are net beneficia y beneficiaries because usually they don't benefit from lower interest rates >> absolutely. and that is why we're overall underweight the financial sector because we think that it will be a difficult time for the banking group to really do well.

but citigroup we do like because they have the exposure to emerging markets which will benefit from lower interest rates. also it is the consumer story that we've been talking about all show long. the q2 earnings came out and car spend was up, consumer loans were up, commercial loans. and the spenexpense story is grt gold man sax goldman sachs is about moving in to their wealth management and more really fee based businesses so that is the way we're looking at those second best performing group of the week >> yes, pretty steady. which is why this call seems like a bit of a let's make sure that we get on board before it gets too far along but there has been some skepticism we have got 34 minutes left before the bell. the dow you see up 55 points actually stretching the up side, all the indexes are. the s&p 500 now three quarters

of 1 respe%, that would be a new report high. coming up, we have your last chance trade and lindsay is looking at a name that could be poised to break out. and up next, the fed divide. we'll take a look at what fed 23is officials have said about cutting rates.

30 34i7bminutes left to go second quarter gdp was coming in ahead of estimates at 2.1% alphabet earnings leading the tech higher. and record close watch for both the nasdaq and s&p 500 time for a cnbc news update with sue herera >> hello, everyone here is what is happening. house judiciary chairman jerry nadler and along with democratic colleagues announcing legal action to get information that it deems critical to investigating the president. >> today we are filing an application for the grand jury material underlying the mueller report that information is critically important for our ability to examine witnesses including

former white house counsel don olympic began and mcgahn and investigate the president's misconduct and approving the t-mobile takeover of rye sprint despite fears of higher prices and job cuts this after the two companies agreed to conditions that would set up satellite tv provider addition as a fourth wireless company. >> the doj's announce mgt ment significant win for u.s. leadership in 5g it has been a big priority for the trump administration and by accelerating 5g buildout through this deal, 99% of americans will see 5g faster >> and that is the cnbc news update this hour sara, back down to you we're less than one week away from the federal reserve's big decision next wednesday the market is expecting the fed to cut interest rates for the first time since the financial crisis we've heard from a number of

voting fed members ahead of it discussing the possibility of a july cut before the fed entered its quiet period this week but while many members have signaled openness to easing, the message from the fed not as cohesive as it has been. listen >> many fmoc part pants judged at the time of our most recent meeting in june that the combination of our factors strengthens the case for a somewhat more accommodative stance of policy >> i think that a little more accommodation would be helpful for ensuring that we confidently get above 2% >> research shows don't keep your powder dry, that is move more quickly to add monetary stimulus but not long after that, fed comments said that it was academic and not about potential policy action. >> we didn't ease at the june meeting, but signals were that we were highly likely to ease at the july meeting so now that is priced in the market so if you try to take that out,

i think that it would be very difficult at this stage. >> right now it is all on the up side, but i think as long as the economy is doing well, if that continues, we don't need accommodation. >> nine have spoken in favor of a rate cut five suggested that they are against a rate cut >> it will be a good debate inside that room next week joining nous tw to discuss, stephanie erickson and also kevin nicholson. welcome to both of you stephanie, no matter how much discussion there is at the fed, the market is pricing in a fed

cut next week. the question is, why is the fed cutting rates as expected next week >> so i think as you heard, you know, the participants definitely are divided a large group of the participants favor a rate cut because the fed has failed to reach its inflation target and if you look at the data today while it is true that in the second quarter inflation moved up a bit, over the past year, inflation by most traditional measures has been below 2% and a number of participants are prepared to cut rates now in order to defend the target there are a smaller group of people i think who also are worried about down side risks to the economy such as problems that could be presented by trade policy but i think those risks except for perhaps the risk of lower global growth have faded a bit since the june meeting >> and we head into this fed

meeting with a universally expected cut and a little bit on there are concerns out there, concerns about the inverted treasury yield curve which a rate cut might help to take care of but we have 2% plus growing economy right now. stocks at a record high. volatility index at 12 credit looking good. so how should we think about this fully expected cut we'll get? >> well, i think that it is definitely going to happen because you look at fed funds futures right now, it is pricing in at 80% chance of a cut. and if you go back to 2006, the fed funds futures have never disappointed they have been 100% correct within ten days of the fed meeting. and so i think that you will get the 25 basis point insurance cut. but then i also think that the market is going to do pretty well as long as the fed does not signal that they are going to

need further cutting right now we are very bullish on u.s. equities and we think that at this point that u.s. equities are going to have a chance to run from here as long as earnings continue to come through strong and -- or above expectations and the fed continues to be on our side as they are right now >> lindsay, do you think that this market needs more promises or hints of rate cuts beyond a cut next week to keep rallying >> no, i think that you get the cut next week and it is a signal to the world really that the fed has our back i think part of why the fed needs to make this move more than inflation, more than slowing growth around the world, is really just to get in line with central banks across the world because the fed funds rate has gotten just a little bit too far from what you're seeing around the globe >> but if in fact overwhelming market expectations are one reason that the fed is going to make this move, the market is

now pricing in the likelihood of as many as three cuts, not just the one quarter point cut. so at some point is the fed going to have to push back against what the market expects right here or might it choose to do so next week. >> i think it is unlikely that they would choose to do so next week the fed having clear communications is important to their ability to conduct monetary policy and at this point i think the signals have been so strong that it would be very hard -- it would really affect their ability to communicate well if they decided not to cut rates >> i don't mean not to cut, but once they cut, what is the tone after that because the market wants more after the one cut next week. >> so i think that is a bit up in the air i think that in the june meeting, if you look at the longer term forecast of the fed participants, they did mark down their estimate of the federal funds rate in 2020

and that does indicate that at least the median fed participant does think in fact that there are going to be lower rates in 2020 so it is possible that, you know, we could see a few more cuts but i think the fed would definitely want to temper down its language and expectations that the cuts would behappenin very soon. >> kevin, what is the risk in all of this, that the federal reserve cuts into what is a healthy officialifirming inflat picture when they shouldn't be >> well, i don't think that there is a risk with a 25 basis point cut. but what i think the risk -- the biggest risk is that the market does not get in line with the fed because as the economic data continues to come through strong, i think that the fed is going to move away from the three cuts that mike said is priced into the market and so i think that the market is actually going to have to

adjust to the fed and not the other way around >> and the market adjusting to the fed would be what, a little bit of trouble for stocks or not? >> no, i don't think that it is going to be trouble for stocks i just don't think -- i think stocks will stay more range bound and they won't move up as high as their potential. however, i think that as long as the market adjusts and it happens very slowly, that we will be okay and that is why we right how are long u.s. equities in our portfolios >> all right kevin and stephanie, thank you very much. five days to go until we get this news. we have 21 minutes before the bell we're on record close watch for both the s&p and nasdaq sitting at session highs as we stretch the up side. and let's see, dow up now 68 points s&p trading at 3027. that is certainly the high for the day. and nasdaq has been the leader up next, we'll break down the

new trend in consumer, why more and more americans are choosing to eat out and starbucks getting a big lift after strong earnings we'll bring you new comments from the company's ceo and here is a check on goodyear tire, that stock following after reporting a miss this morning decline nert the rr in the rally ♪ as your life grows, so do your needs. ♪

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17 minutes until the close session highs here on track for record closes for both the s&p and nasdaq let's check on individual market movers shares of twitter surging after beating on both the top and bottom lines the company also reporting 139

million monetizable daily users, 4 million more than expected starbucks getting a lift after earnings and revenue topped expect faces on strong same store sales growth kevin johnson joinedyourself earlier. gave us his take >> from a macro perspective, i think consumer k6d, consuconfidd spending is very good. in fact we all all time highs in our customer connection scores and that is a tribute to the work that our partners in the stores do, but also a reflection i think of the attitude of the consumer in the united states. >> johnson also says he is bullish for the long term on china. starbucks shares up 9% mike back with the second dashboard of the day >> yeah, that was a good segue too. movable feast. might come as a surprise that lot of americans don't like to go get groceries and cook a meal

themselves at home they like to go out. and whether drive-through or sit somewhere else, this is a long term trend we're back to 2010 this is there t from the gdp dag the contrast in food bought to eat at home, that is the blue line, and food away from home, that is obviously mostly restaurants and delivery in there. and off obviously basically catchup. almost at parity and this will cross, no doubt that this one is rising much fasteroff her over here so a secular trend story here with mcdonald's, starbucks, eating out in general. so it is not just about these comps coming from zero sum game. just more spend out there. and i do think when wages are strong, it is one of the most direct effects is that people picking up dinner rather than cooking it >> and it also helps you understand why you are seeing some of the restaurants stocks

trading near historic valuations and record highs and strong numbers to back it up. >> absolutely. the consumers are definitely willing to spend we have eight months now of earnings growth over 3% for the consumer so that is really good confidence is high spending numbers in q2 report was very solid i would just say maybe we should add hours worked to that chart too to see how that is impacted. >> absolutely. it is all connected. it is a premium on convenience among other things >> definitely convenient to not cook at home up next, your last chance trade. plus beyond meat on pace for its best week ever stock up now more than 800%. coming up, we'll dive into what to expect from monday's quarterly earnings report for beyond meat.

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a camera might figure it out. that was easy! 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." just over ten minutes to go in today's session. strong one for the s&p 500 led by communications services thanks to strong numbers out of

alphabet surging today, twitter as well. consumer staples are also having a good day financials, technology, some of the chip makers, utilities, health care. there are some weak spots though energy, industrials and materials. but overall capping off what has been a strong week in the market up 1 ppts 7% on the s&p with a strong rally into the finish near session highs >> and clearing that old high by at least ten points right now. as you say, with about ten minutes to go. lindsay, before we get your last chance trade, let's take a look at some of your past picks july 1, you were bullish on lyft and uber and since that date uber down about 4%, lifts oyft roughly flt and june 17, you picked tiffany. up 2% by that point. so would you stick with those? give us today's pick as well >> yeah, we'll stick with those. uber and lyft will take a while. we like those for the longer

term as they turn into the fee based business and they do all the different things that they are going to do to grow the businesses so we like those just be patient with them. tiffany again i think that their luxury end focus will bode well for them but today i'm choosing charles schwab, that is my pick. it hasn't done that great this year, only up 6% there is value in the stock. we really like the market leadership that this company has. and their ability to grow their brokerage account business and fee based businesses as well they just recently announced acquisition of brokerage and the brokerage managed portfolio accounts from usaa, they got a good price on that deal most importantly, most people will come back and say the problem here is 60% of their revenue comes from net income interest income and with the fed cutting rates, that will be a major problem. we think that is priced into the stock. we think you get about 20% up side on an 18 times multiple which is below are the 23 times

average. >> really has underperformed >> they have the discount retail brokers. but certainly just because the fed will cut rates i think i guess the question is, is it also a bet on the retail investor getting more overexcited and more in the market or are they just kind of gaining market share >> absolutely that there will be legislation later this year also on increasing usage of 401(k)s and motivating people to put money in the market and they think they will be a key beneficiary. >> lindsay, thank you. s&p and nasdaq setting new intra day highs. we're on pace for record closes for both of them up next, we cover august all the angles >> and here are the winners and losers in the dow. r all the angles >> and here are the winners and losers in the dow. ♪

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morning, it was more than able to make up for some of the weakness in amazon and i think that is something to look at moving forward pay attention to those companies that have large weightings on some of these indices like google because moving higher by a little over 10%, that can really drag those averages higher and actually make up for weaknesses else where. >> do you feel like the market in general is positioned a little bit stretched going into next week and into the fed meeting or are people essentially just feeling like they have to participate right here what is driving this to new you highs? >> in- i think investors expect an accommodative fed. they are expecting some accommodation from the fed and if you look at earnings season, earnings look like it will come in better than what we were expecting

but i do think right now you have a solid growth back crop from what we're see seeing and a fed that will be somewhat accommodative moving forward >> is there a sector to you that looks ripe in terms of valuation as a buy mere? >> what i've seen out of earnings so far, looking at actually the reaction post earnings report for some of the sectors, there is actually an interesting diversion. i.t. had about an 8% earnings per share surprise but post earnings, they have actually sold off a bit over 2%. if you look at something like materials, about 0.9% but best move after the earnings reports. so i think that shows that maybe there was an overreaction in sectors like materials that

might present some opportunity for investors if we continue to get solid earnings report and prices out of that sector. >> and intel down today on a good earnings report, so a sell the news in semis at least now rick with the bond report. >> thanks, mike. one week chart tells us a lot. we're basically a little higher in yields than we were last week and we've had solid data so far. durable goods yesterday. the consumption number particular to a gdp report that gave us a two imagine on this quarter, second quarter, and if we look at a chart from the last fed meeting, the 18th, you will see ten year note yeyields are . and the dow is higher. but ultimately it is about the fed wednesday and we're up close to 185 points this week in nasdaq >> yeah, a huge week for nasdaq and it is all tech driven. when you look at the sectors

earlier in the week we had the chips hit an all-time high along with the overall s&p 500 tech sector today you had the communications sector and software joining them at historic highs a lot of that is being driven by strong earnings reports among all-time high list today, you are getting pfizer, e health, all with all-time highs. t-mobile with that approval from the doj to go forward on the sprint merger. but what is interesting, that cloud area amazon's disappointment looks to be a win for microsoft and alphabet >> and it looks like it will be another record close for the s&p 500. and with just four trading days left, a brpretty strong month. and expectations were so low coming into it

coke best performing stock for the week up by over 7% and that shows how it is a number of the multinationals with the global exposure that continue to move to the up side. s&p 500 closing at 3026. so a record high dow jones at 27,196, up 56 points we have federal reserve monetary policy and trade talks that kick off on monday. so a big week. >> double record close on wall street welcome to "closing bell." >> yes, we did get a record on two of the three big indexes the s&p 500 up three quarters of a percent to 3025. nasdaq up more than 1%

8330 google, alphabet up almost 10% driving both of those. the dow did manage a gain of about 0.2% russell 2000 up 1.1% >> felt like an earnings driven rally today. saw coca-cola continuing to do well off its better quarter. the market is getting everything that it wants. better earnings, better economic growth the fed appears set to cut interest rates next week >> so the question obviously is if the market has front loaded all the good news and priced itself for all of that a 2% gdp economy, 2% treasury yields and 2% inflation, that has always been a good backdrop. so the question is have we already figured it out or do we have a few days. >> joining us to talk about the market, barry banister, alec

you young, and lindsey bell is still with us. lindsey, what stands out to you as we watch the record closes on the s&p and nasdaq good news piling up. >> yeah, and i think to mike's point, 2% gdp xroegrowth, infla steady, interest rates may be coming down, that is a good environment for the market to continue to move higher. and that is what has driven this bull market the longest bull market in history, longest economic cycle in history. and something that you will continue to see corporations are certainly if not feeling more confident about the situation abroad, definitely reiterating guidance, increasing guidance and this earnings season has really been a great one so far >> alec, obviously part of the story for how well the market has done, a lot of people about didn't expect the market do well and they were focusing in on the

down side risks. with this run that we've had in stocks, with bond yields very low, it is not as if getting a little bit of expected good news out of the fed is necessarily going to be a major trigger or do you think that it could be? >> i think that we might be setting up for a bit of a sell the news event because this is the most widely anticipated rate cut that i can remember and we're seeing some bifurcation. averages are doing well, but it is very much technology, discretionary, where is the reliable organic growth. health care, energy, not participating. most outside of gold industrials. boeing so there is clearly still some risks out there. >> are you saying that those are tells? are those buys on the catchup? >> you know, that is obviously the $64,000 question i think that the big key, we're trading at about 17 1/2 times forward earnings for mid single

digit earnings growth. consensus numbers model in a big hockey stick up heading into the fourth quarter next year i think that we're getting in to the point that we need to see macro evidence in the leading indicators globally that we are really going to see an acceleration i think we're transitioning to more of a show me market hope is not a strategy you know, rushes may moderate from here. you've heard all the clichés. but i know that it is tough on feel good days like this, but i do think that it is prudent that people should remember that these are risk assets. it is hard to see a big down side catalyst, i'll give you that, but i do think that the onus is on the bulls to show that these gains are justified here >> barry, history says that the market tends to like the initial fed rate cut when there is not going to be a recession. obviously you never know in advance if that is the case.

how do you think it will play? >> one thing i'm noticing is even though the economic risk is receding a little bit, the policy risk has gone way up. 27,000 dow, president's poll numbers are up, the mueller thing is in the rearview mirror. remember the beginning and end stage of any deal is the most volatile period. and he's got to deal with china and iran before 2020 starts. he has currency now and he will probably spend it. so you will see more policy volatility over the course of the rest of the summer >> we were doing this nifty data tracker that moved along showing some of the recent releases that we've gotten out of the economy. not just today's stronger gdp number, we got a better jobs report last month for the month of june. we've been getting better retail sales, better durable goods. so i wonder if that is enough to sort of change the backdrop no matter what the fed communicates

beyond a cut next week >> fed is only part of the story. we'll get july 31. the question of september is not as likely as it was recently remember the fed is too tight for the rest of the world and the rest of the world's economy is very weak so they will answer to a domestic mandate more so than a global mandate and that still has blowback to the u.s. economy over time. but i agree that the u.s. is coming better than expected and as a consequence the market is range-bound. >> lindsay, we had a modest list in treasury yields if there is one thing that maybe one could argue would be the biggest surprise would be the fed to cut and all of a sudden inflation becomes the story

again. i'm just looking for blind spots here where everything else seems to be going right. >> i don't think 25 basis point cut will ignite inflation. if inflation does get out of control and the fed by the way has said in the past that they are willing to let inflation their core pce indicator, which is their favorite, get above 2% for some time before they would get nervous. so they will have time to read the tea leaves and potentially pull back on their rate cuts if necessary. >> alec, let's bring it back to earnings you had strong earnings from the faang names, mcdonald's, alphabet, twitter. is so what does that suggest about where the market is versus expectations

>> the market is not cheap and you need to beatconvincingly and these companies did that and technology is a lot of it. i don't know about you, but with the apps and dwlelivery, we're l spending more with the chipotles, mcdonald's, star buck, it is a consistent trend and obviously tech is a very powerful story you see that with google analysts may be a little out of step with what is really going on but the common denominator is the numbers have to be very powerful averages can move on a given day. but these companies are not indicative of what we're seeing across the market. in the aggregate we're seeing up side surprises that are leading up to 2% earnings growth for the second quarter up from negative 2% expected. so google and starbucks are not the rule >> and on your point of the nearly 18 times forward pe multiple, sure, that is a premium versus historical

averages but when you look at it in an environment where you have inflation that is a as low as it is and interest rates as low as it is, that you can warrant that higher -- >> earnings still matter earnings growth still matter and rates have been low my whole career >> well, probably lower now. >> and i think that is in the market though. >> and i want to talk about something else that happened today which is larry kudlow came on "squawk on the street," we asked him about president trump's concerns recently about the strength of the dollar he has tweeted a lot about it and whether he wants to see a weaker currency ahead of the election here is what kudlow said about it >> he tweeted last week that the dollar is tcurrency in the wourrld. what the president is concerned about is the foreign countries may be manipulating their own currencies lower to try to gain

some short term trade event. that we do not like. but it is not a question of bringing down the dollar and i will say this, just in the past week, we had a meeting with the president and the economic principals and we ruled out any intervention so i don't agree with your assertion. >> and i think the big news there is that they ruled out any currency manipulation because there has been -- or at least currency intervention. there has been building speculation on wall street that this administration might move to actually weaken the currency and intervene in the currency market which would be very unusual. abo but president trump does complain about the value of the dollar yes, he tweeted that he wants a stable dominant reserve currency, but he has complained about it >> president trump didn't like what china is doing because they have manipulated their currency too an extent to offset some of the impact of the trade tensions that are occurring but if you look at dxy, it is up

only about 6% on a year to date basis. and it is at about the levels that we saw in 2015, 2016. so where we're at right now isn't this strenuous level i don't think. but what you see is when you look across the pond, they are talking about cutting interest rates further and doing things like this, it just strengthens our position versus the rest of the world. >> i mean, i would agree that i think that the rate and growth differentials even with the dovish fed still favor a strong dollar and that is one of our reasons for caution is you have the consensus very bullish on an earnings rant when there is no sign of any dollar weakness, that is not the whole story. but a strong dollar ain't good for multinational earnings >> barry, you were talking about the possibility for policy risk blind siding the market a little bit as we go ahead here. do the currency rhetoric or any of that play into that and where do you think that the dollar would go if in fact we did get another flare-up of china trade tensions >> yeah, when you think about

it, the cyclicals really do need inflation up and the dollar down and that is just not the case yet. the other thing, europe is -- the ecb is the world's biggest currency manipulator right now and you have section 232 waivers that expire in mid november on german autos and you also have the comments today about the french digital tax and that has invited a possible response on tariffs so i think that this will get a lot worse in terms of policy risk on trade and tariff threats. it is a winning issue plally as long as it doesn't rock the economy. so i maintain that this strong economy is currency and the strong market is currency. and if i'm the trump administration, i'm going to spend some of that currency in the coming six months. >> by the way, headline just crossing the tape, trump says u.s. has a very powerful dollar. >> there you go. >> so getting the last word on this discussion. there is a difference between a

powerful dollar and a strong dollar that hurts our exports. and that hurts multinational earnings which is something that he has complained about in the past barry, i do take a bit of issue with you saying europe is manipulating its currency. why did you say that >> it is pretty clear. even the comments by some of the european central bank members, they have mad to step in as the central bank to drive the currency down. i know it wasn't a stated objective, but it was the o outcome as part of a lack of fiscal response inside europe. and you now you have a departed draghi begging german but they are not budging. so they have do more and more on the rate side to keep the currency down. so yeah, europeans are probably the single biggest currency man it late tor -- man itch late toipulators fo japan. >> their inflation is way below

target stock ket not hi market not high so they need stimulus >> and that is the same thing. >> weaker than it would otherwise be for germany, but maybe stronger for others. barry, alec, lindsay, thank you very much. still ahead, beyond meat shares up more than 800% since its ipo. up next, find out whether the stock can keep rallying after reporting earnings next week plus we will debate whether tesla is in trouble after reporting a wider than expected loss this week

wall street wrapping up a strong week for the bulls. s&p and nasdaq both closing at new highs. see in seema mody gets us started. >> we ended higher on the week due in part to a number of defense contractors.

solid earnings driven in part by countries including the u.s. prioritizing defense spending. so big moves there the best performing stock on the dow today and for the week is coca-cola, up 5% on the losing side, industrial names led by caterpillar which did talk about the challenges it is facing in china you can see bo and dk secan see lower. next week a number of the big oil producers like chevron which will report earnings and big fed meeting and trade talks. busy week. >> oh, yeah. nasdaq outperforming other major averages bertha coombs has that >> and nasdaq above 8,000. and it was all about the communications this week with alphabet really being the biggest winner this week in terms of the communication names. it has been a laggard among the faangs, but it caught up with its best weekly gain since 2011.

the other side, some of the big momentum names over the last year or so really tanking this week disappointing earnings a l align technology with disappointing sales and tesla with disappointing numbers as well next week apple and a number of chip makers. >> yeah, so earnings still in focus as we head into next week. beyond meat gearing up for its quarterly report on monday afternoon. share of the plant based meat company surging since its may ipo. here to discuss it is kate cox good to see you. i don't think even the wildest bull on beyond meat shares thinks that whatever they can say they did over the past three months will justify the valuation of this company. but the company does still keep announcing partnerships, giving it the impression that this is a phenomenon that is sweeping the world. so where does that leave us with

regard to this company, its place in this industry >> it is pretty interesting going into earnings on monday. it is a company that is really good at keeping itself in the news so it has had a highly visible week plenty of analysts are saying that its valuation is outrageous if not straight up crazy but you know, it is a company that has been producing for more than a decade. they continue to iterate, they expanded capacity to meet on going demand they have had high visibility partnerships this is a smart move they launched a breakfast sandwich in manhattan and that might be nationwide going forward. and dunkin is known for demock are democktizing food. it won't come in at the same price point as convention at me meat >> how many more partnerships

are to be had? >> a good question there is one kind of holy grail which i think mcdonald's who had a strong earnings report and remained elusive and it also got snubbed by chipotle this week saying we won't add beyond meat alternative to our menus so anybody's guess whether it will continue to nail these really high profile partnerships or not >> a good reminder that you give thaws this has been a company that has been around a while there is a whole industry here working on this area for a very long time. they must be looking at this companies and saying that we have to get this on the gold rush not just to go public, but it must be a much bigger opportunity than we thought before so what does the competitive landscape look like, could somebody come in and say now we're the next new thing and we're better >> i think the real fear is that global meat companies, tyson for instance, which came out with its own product after pulling out of investing in beyond meat,

that is the real fear. but it is not as though veggie burgers are new. what is clear is that consumer demand is finally picking up and becoming mainstreamized. >> but trendy or mainstreamized and here to stay >> i think it is here to stay. i don't think that this will disrupt agricultural but i think that it is a diverse landscape in meat offerings and i think that that means that they have some real market share ahead. >> and there is also a question of whether it is actually healthier or not >> right or more sustain bl and those things remain to be seen but i think -- look, it is food, it is taste. is it delicious. and if they can continue to iterate with big partnerships, i think they have a good shot. >> market cap now bigger than 25% of the s&p 500 >> i mean, on some level it shows you that it is an -- the

market is basically screaming that this is a massive opportunity for somebody >> kate thank you. when we come back, we'll debate tesla and whether it is looking cheap. s its body weight. it never questions the tasks at hand. but this year, there's a more thrilling path to follow. (father) kids... ...change of plans! (vo) defy the laws of human nature... ...at the summer of audi sales event get exceptional offers now! is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology,

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tell him we're flexible. don't worry. my dutch is ok. just ok? (in dutch) tell him we need this merger. (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. let's go back to mike for the third dashboard of the day >> and he went to paris because it was cheaper in the 1920s.

and here is a chart that shows that paris, or in france, it is also cheaper if you are issuing government debt. so for the first time in history, this chart shows that the united states has the highest three month yield of all-government debt on three month maturities in the developed world. so never been the case back to 1970 blue is the united states right here so this is again obviously australia, canada, japan, germany, great britain and france and this of course is the main mechanical ration and he will for w for why the fed feels that it has to cut rates once maybe twice. arbor research put this together and it is an oddball thing it shows you short term treasuries are an yut liar aout the fed in theory wants to do something about that never mind what is happening with the u.s. economy.

>> and i think it is also why the president can say that we have the leverage. certainly on trade not just because we are the biggest economy in the world so we're still in this place where we're outgrowing the rest of the world it is why our stock market is stronger why our yields are higher. >> and we got into this habit, of course we haven't seen a rate cut since the financial crisis we're used to it being an emergency measure. >> so do you buy overseas. i know you are looking at yields, but stocks for instance which haven't run up and don't have the valuations of u.s. stocks or stick with the u.s. >> and if the fed effectively is acting as natural bacentral ban world, maybe the cheaper stocks have some run. >> all right tesla shares plunging more than 12% since wednesday. this is after posting a larger than expected loss in the second quarter earnings update and also announcing that co-founder would be leaving the company

here to discuss what is drive canning tesla and what to do after a bad week, gabe hoffman and gene munster thanks for joining us. gabe, what did you learn to give you more fuel for your short argument >> everything i've talked about has been proven right again. second quarter was another disaster yes, tesla moved metal, but they had to cut price thousands so margins were a disaster. they lost more money than investors expected about five months ago gene and i were here together on cnbc and i talked about the first quarter being a disaster and i asked gene what type of miss would it take you to get to you change your mind and that happened. i'd love to know what he is thinking today >> gene? >> well, maybe before -- the simple answer is that they had

some pretty big up side in the march. i think when we were talking six months ago, i said 2019 will be a transition year. dountsedly there will be ups and downs. we had a down in the march quarter massive misses a you discussed, but on the flip side in the june quarter, there was significant up side going from 53 to 78,000 model 3s. and i'd like to quickly point out i think part of that dip administer rece more recently is around the margins. i want to address the brain drain question here and the best perspective is jp strauble as co-creator, no, that is not true he is the an decide mcandy many won wonka. as long as elon musk has the

reins, i will continue to believe in the story >> for a long time the story with tesla was if only that they can get production up to roughly the level that they are at it seems like they might be able to attain scale and have their place in the industry. now there are all these questions about the margins and in fact just how big the ultimate opportunity is. what did this quarter tell you about those questions? >> in quarter told me that they have got a lousy quality car in the model 3 and that it is near the bottom of consume are reports rankings, it has a design flaw. you saw a story about how it catches about 15 pounds of dust and dirt underneath and they had to chop the price. and they cut again in july so yeah, there is demand but it is at a price that tesla can't make money and they lose a ton of money with the brain drain, it is important to note this is two out of the last three quarters that you had a major executive depart murder. if you look back at the 2018 proxy, there is only one guy left elon musk out of the named executives the cfo, chief technology

officer, head of mar connect and sa marketing and sales, they are all gone tesla has more executive turnover than a mcdonald's >> so gene i know the brain drain you think is not as bad as feared what about the profitability question, the fact that margins were such a miss and even if they can deliver on target, it will be hard to do so profitably >> i'd say that the 1% miss in gross margins was just that. i understand direction has gone from 24 to 20 to 19 and investors get concerned about that trajectory. but in the grand scheme, you need to take it into the context of how much cash they have they have $5 billion in cash if they continue at this pace where effectively they would come in let's say 10% to 15% below their targets other the

next six quarter, they will have enough cash for the next two years. when i think about the margin question it needs to be in the context of cash. i'm not trying to make excuses for the fact that they are losing share i'm simply pointing out that when you transform an industry, there is an incredible amount of pain, tesla is going through that it is as evidenced in some of the turnover because it is an intense environment to work and also in the margins. but i'm confident -- we talked about this six months ago. the future is electrification. there is no chance that gas vehicles will be powering the world in 100 years and if you do believe in that, i think that the other automotive makers are materially behind and i think that it is the right thing to do to invest in the business right now >> gabe, gene has a point on the cash they did report positive free cash flow more than $600 million for the quarter. they have the 2.4 billion in capital raised in may.

that was at one point the big concern. >> well, not worrying anymore about a company running out of cash anytime soon when they have a $45 billion market cap, two thirds of that was just more debt so they are over $11 billion now in the debt hole that didn't make it a good long. yeah, the future may be electrification, but to me tesla looks to electrification lie t beta max looked to vhs they had to cut price by several thousand dollars again just in july so they will go through $2 billion of cash by my calculations this year and they did a one time thing with their capital expenditures which people consider it a growth company, it is not. capex was less than half of their depreciation just in this one quarter and customer deposits were down almost 20% in just three months. that is a terrible sign for future demand. >> gene, the capex decline or

shortfall was a big issue. is that hiccup how would you put that in the bigger context for a $40 billion company where a lot the of the value is still based on a big but distant goal >>d value is still based on a big but distant goal? >>lot the of the value is still based on a big but distant goal >>of the value is still based on a big but distant goal >> i think it comes down to you believe in the future of electric vehicles. and i think all of the capex, all of this loss, all of it is under the goeneral until brel la of investing stories have undeniable truths and open opportunities, investors will give forgiveness on the multiple. the multiple on tesla is outrageous it is impossible as someone believe in this story to justify it on a multiple basis br but i would put the capex conversation in the same conversation as investing in the future

the rest of the automotive industry will have to make some very difficult decisions it is surprising to look at -- we talked about competition for the past couple years. there is really nothing. we published a study today, we went in this with blinders on. and found that the ownership, the cost of owning a model 3 is over a five year period slightly less, 5% less than owning a toyota camry that factors in the full efficiencies when you purchase a car and reselling it at the end. that to me is a company that is well ahead of the other automotive makers and something that the automotive makers need to factor this is in investment that they will have to make to catch up >> it is not like ford had a much better week itself. we'll leave it there good debate as always thank you time to get a cnbc news update >> hello, everyone

here is what is happening. democratic presidential candidates continue to make their pitches before the national urban league conference senator kamala harris and mayor pete buttigieg appearing earlier today. >> we must ensure that everyone participates in the wealth that it creates so i'm pleased to announce today that as president, i will make a $60 billion investment in s.t.e.m. education at hbcus and other minority serving institutions >> my generation saw this country elect its first black president and then turn around and elect a racist to the white house. and we ought to call that would it is. meantime french scientists have found a giant dinosaur bone they showed off their discovery which is a thigh bone more 6 feet long. it dates back more than 140 million years and it weighs more

than 1100 pounds it is one of the largest such finds in europe. and they are still looking for other parts as well. you are up to date that is the news update. back downtown to you >> sue, thank you. coming up, a record close for the s&p and nasdaq overall, a very strong week for wall street. actually breaking two week losing streak that we saw before then if you look at the groups, it was pretty broad based communications services the best performing group financials did well. semis also had a good week but intel, you were watching >> they had a very good earnings report the reflex move after it was higher but sold off the next day. you had the small piece of news applebuying part of their chip decision for smartphones i do think that it is worth watching only because semi con dupgtd tors have been such a leadership group huge momentum to the up side a lot of people saying they look overbought, need to cool off didn't really change the story, but it does show you that we did

the stretched up here past the 20% year to date gain. and you still have to ask the question if we've gotten to this moment where all of a sudden people are refocused on everything that has gone right and, you know, maybe leaves us open as to some other kind of -- >> and semis important next week with the u.s./china trade talks. we're waiting comments from president on china, on the dollar and other issues related to the mkearts we'll bring you that as soon as we have it since my dvt blood clot

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cool ♪ president trump making comments on trade in the oval office let's listen in. >> so france put on a tax on our companies. you know that. and wrong, wrong thing to do they should not have done it so i may do that i've always liked american wines better than french wines even though i don't drink wine. i just like the way they look. okay but the american wines are great. american wines are great and they didn't do the right thing. when they start taxes our companies -- we tax our companies, they don't tax our companies. so i told help don't do it because if you do it, i'll tax your wine, tariff or tax, call

it whatever you want so we're working on that right now. [ inaudible question ] >> just spoke to him i have a good relationship with president macron but they shouldn't have done this they used to take advantage of the united states, but not with me as president. look, i look at deals that were done with other presidents of this company and it is a disgrace that our country has allowed this to happen with china for years and years and years, was making from 3 $30 billion to $507 billion a year now we're taking in billions of dollars from china and it is all turning around whether a deal is made -- you know, they are going next week, they have more meetings. meeting after meeting. i don't think personally china would sign a deal if i had a 2% chance of losing the election. i think china would probably say let's wait let's wait maybe trump will lose and we can deal with another dope or

another stiff like the people that allowed these deals to happen, this horrible thing to happen to our country. what has happened to our country, the money china has taken out of the united states has rebuilt china. and i don't blame china. i blame the united states for allowing that to happen. so if i'm president xi, or if i'm frankly iran, and iran wants to make a deal, i can tell you that right now, but if i'm iran, i'll probably say man, if i can hold out, i'm going to wait for sleepy joe biden instead of trump. because sleepy joe, we can make any deal we want with him. he didn't know what is happening. so what else [ inaudible question ] >> we'll be announcing it sometime fairly soon we'll see what happens but they put a tax on -- we said don't do it. we tax our companies, you don't tax our companies. we'll be announcing something. it might be a wine, might be on something else but it is called reciprocal tax.

and we'll be announcing that fairly soon. makes sense, john, do you agree with that? you're a man that enjoys wine. you just won't enjoy french wine anymore. go ahead, steve. they are great, i agree. [ inaudible question ] >> they will be going. look, look, i think that china will probably say let's wait it is 14, 15 months until the election let's see if one of these people that give the united states away, let's see if one of them could possibly get elected and i'll tell you what, when i win like almost immediately they are all going to sign deals and they will be phenomenal deals for the country. but -- so i don't know that they will -- i don't know if they will make a deal maybe they will, maybe they won't. i don't care

because we're taking in tens of billions worth of tariffs. farmers are happy because i gave them $16 billion out of the tariffs and have much more than that left over as you know tremendous amount of money left over like by three times. and we haven't even taxed china yet compared to what i could do. so we have tens of billions of dollars rolling in from china. we never had ten cents coming in and again, i don't blame president xi i blame our past leaders for allowing to than for so many yea - to happen for so many years with the word trald trade organizati. when the world trade organization came about and china joined the world trade, they became a rocket ship. because you know, it is a very unfair situation that took place at the world trade organization. as are many of them. so so he'll swe'll see.

everyone says people pay for it. china devalued their currency and they are pumping money into their society, their country, like you wouldn't believe. you call it quantitative easing. we have a fed that does quantitative tightening and they raise interest rates so we have a normalized rate president obama had no rates and no tightening. and we still have a much better economy than in his wildest dreams and there is something okay about that, but look, the fed acted too soon i turned out to be right they acted too soon and too violently. we've had nine increases, you can check that, but i believe it is nine increases. a couple under her and a lot

under powell i'm not a fan. okay what else? >> the u.s. dollar, too high, too low? >> the dollar is very strong the country is very strong the dollar is-it is a beautiful way this one way, but makes it harder to compete. but we have a very powerful dollar so that is the good news despite that, we're doing really well the country is doing well. it has really become more than ever before the currency of choice you know, you have the euro that tried to cut in, the euro is now not doing so well. europe is not doing so well. we're the hottest economic country in the world even guatemala wants to do business with us so we're happy, right? [ inaudible question ] >> i could do that in two seconds if i want. i didn't say i'm not going to do

something, but i'm -- look, having a strong dollar, there is a reason that it sounds so good. and having a strong dollar is having a strong dollar we have an amazing country, very strong country that is why our country has a strong currency. other countries have a currency that is down the tubes it is a currency that is weak. china's currency is very low you look at other countries, look at the euro, the euro is so l low. germany is paying almost no interest we're paying 2.1%. we're paying a lot of interest because we have a strong currency it is a very complicated formula for some people. it is not complicated for me the federal reserve raised rates too fast and too soon and they shouldn't have done quantitative tight tightening if they didn't do that, we would at 4 pnts .5% instead of 2.1 everyone is so excited but would

he could have been 5,000 to 10,000points higher in the dow i don't want to sound too upset because we just broke are the all-time record on the dow but could have been higher could have been contender. marlon brando would say. [ inaudible question ] >> you said it, short range missiles and my relationship is very good with chairman kim and so we'll see what happens. but many people have those missiles [ inaudible question ] >> not at all. [ inaudible question ] >> well, didn't say -- he didn't say a warning to the united states i can telling you that. he didn't say a warning to the united states. but they have their disputes

but they aare short range missiles and very standard missi missiles [ inaudible question ] >> yes, very good question the best question you've ever asked. >> i asked it the other day. >> and your timing is good because i spoke to him about -- how long have you been here, 16 minutes? ago i hung up the phone as you were coming in, and he is a good guy. he is a friend of mine i think we will have great relationship, and boris is going to be a great prime minister i predict it will be a great prime minister he has what it takes they needed him for a long time. the uk needed him for a long time let's see what happens >> [ inaudible question ]. >> yes, he and i will spend -- we spent a lot of time, he and i, when i was with the queen, the most beautiful days i have experienced. she is a tremendous woman. an incredible woman. we got along very well so boris and i just spoke. i congratulated him and he is all set to go. he is going to be -- i think he

will do a great job. we are working already on a trade agreement, and i think it will be a very substantial trade agreement. you know, we can do with the uk -- we can do three to four times -- we were actually impeded by their relationship with the european union. we were very much impeded on trade. i think we can do three to four, five times what we're doing. we don't do the kind of trade we could do with what some people is great britain and some people remember a word you don't hear too much, is the word england, which is a piece of it but with the uk, we could do much, much more trade, and we expect to do that. okay >> [ inaudible question ]. >> apple >> yes, apple. [ inaudible question ]. >> well, i want apple to build their plants in the united states i don't want them to build them in china when i heard they're building in

china, i said, that's okay, you can build in china but when you send your product into the united states we will tariff you, but we will work it out a man i have a lot of liking and respect for is tim cook. i think they will announce they're going to build a plant in texas if they do that, i'm starting to get very happy okay >> mr. president, do you expect to get similar agreements like the one signed today -- >> i do. >> working on doing that >> i do indeed >> will you get them soon? >> pretty soon i mean we get quick agreements so i just want to end up by saying that guatemala has been really a pleasure to deal with and we're going to have a great relationship for many years to come i would like you, please, extend my warmest regards to the people of guatemala >> thank you, mr. president. >> thank you very much >> thank you president trump talking with reporters in the oval office, taking questions on a range of issues and topics, many related to investing and wall street,

trade relationship with france, with china, even talked about the strength of the u.s. dollar of the let's get to kayla tausche for some reaction. two questions on trade and whether it represents any kind of new thinking on the part of the president, sort of tying the chinese position to the election, and also whether he contradicted larry kudlow who told us earlier on cnbc that the white house has ruled out intervention in the currency market. >> first on trade, sarah, the president didn't really give any back story to what was informing his comments that perhaps china wants to wait until after the election to do a trade deal. now, he has frequently used trade as a way to knock the 2020 democratic field, and he said that china would probably prefer to negotiate with another dope so that could be just a familiar refrain that the president is using there. it also could be based on conversations behind the scenes with u.s. officials and what they discussed with their chinese counterparts that's what we don't know ahead

of the talks next week the white house a, and the president mentioned this right there, the shout across the bow today where the president is directing the u.s. trade representative to essentially challenge china's status as a developing country at the world trade organization the white house says they're getting unfair advantages, short cuts on rules, regulations, timelines, and they don't deserve that anymore as the world's number two economy the president, again, seems to be pushing that issue, and it may come up next week, sara. >> yes, and what about the dollar comment so it sounds like he is saying, it is good to be in demand and we are the best economy right now, and so it is good to have a strong dollar. but on the other hand, a strong dollar can be painful and i can do something about that. is that what he said >> yes, he seemed to be contradicting himself a little bit because he said that if the dollar were not so strong the stock market would be higher, although he can't complain because the stock market has been hitting records that being said, he didn't

necessarily say explicitly that he supports a strong dollar. the quote that i wrote down was, a strong dollar is a strong dollar that was the exact sentence that came out of the president's mouth. i mean there was a decision that was made this week according to my reporting to not intervene in the currency markets at this point, that the anti-interventionists were essentially able to shut that argument down. but the president has had these impulses for more than a year. pete najarian is pretty much the only official stoking them, and the fact he has even been able to make a presentation in the oval office to introduce the idea of capital controls in the united states and potential, purposeful of job markets, equity and debt markets, is remarkable in this country, sara. >> yes, even the semantic argument that larry kudlow made earlier, saying that the president wasn't necessarily saying that the dollar should be weaker, he just thinks that other countries are unduly

weakening their currencies your dollar is stronger relative to something else. i suppose we have the fed likely to cut next week and maybe his advisors were able to say, let's see what happens with the dollar i mean you are going to get your fed rate cut and maybe we can play it from there. >> yes, maybe we can play it from there, mike, but the president seemed to be expressing some envy specifically for the state of play in europe, not only with the euro having weakened but also with the european central bank's actions on interest rates and saying that that's unfair, and i'm paraphrasing here, but he would prefer to see something like that here we'll see if this debate resurfaces after next week, after we see what the fed does and what that does to the markets and whether or not there's any fuel added to the fire here. >> absolutely kayla. we all will be watching it thank you very much. up next, we have your wall street week ahead. all of the key events you need on your radar as we ad ihento a new trading week when the "closing bell" comes right back. ♪

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>> now to your wall street week ahead. apple and under armour set to report next week let's start with josh lipton on apple. >> mike, apple is up more than 30% this year, and one big topic front and center for apple investors will be china. remember, last quarter china revenue clocked in at 10.2 billion, a 20% drop, but cook told me at the time he saw signs of improvement, specifically that march was better than the average for the quarter, in part because the company adjusted product prices, benefitted from its trade-in program and because cook saw trade tensions easing. so how did business do in china this quarter morgan stanley's katie huberty says she sees sign china showed

improvement in the quarter we will find out sara, to you under armour has shown progress here is what to watch, margin. big source of improvement as they get inventories in line, lower promotion. wall street expects 46.4 watch out for new product releasements that have driven excitement and watch for international growth which has been a strong story on wall street the stock is up 50% so far this year. >> yes, absolutely that does it for "closing bell". >> have a good weekend everyone "fast money" begins right now. ♪ indeed, it does. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square, i'm tyler mathisen in tonight for melissa lee traders are dan nathan, steve grass grasso investors gorging on restaurant stocks today, sending brands to new all-time brands.

the consumer is healthy