and so, i think that activity is certainly key. you certainly have companies like with cosmetics and putting on makeup routines you have fashion shows you have collaborations and influencers. it's got to be new >> 15 seconds, do you have a favorite retail stock right now? >> i have a lot of names i like. like brands like vf copper, stitchfix and what they're doing with apparel retailing those are my favorites zplp nice to meet you. >> you too >> that does it for "power lunch" >> "closing bell" right now. welcome to the "closing bell." i'm morgan brennan in for sara eisen at the boeing post and what has become the story of the day. that stock is down 6% right now on news that boeing employees may have misled regulators it's also a big reason the dow is down 175 points right now, with just 59 minutes left to go. i'm david faber in for wilfred frost this afternoon let's take a look at what is driving the action we've got those controversies to put it lightly at boeing and johnson & ajohnson. that is having a negative impact

on the broader market. weak china growth data also painting a gloomier picture of the overall global economy and despite some strong earnings, a weak holiday forecast is putting some pressure on retail stocks this morning. joining us for the hour is steven weiss from short hills capital partners and -- yeah, let's talk a bit about that market right now, steven, as well. curious as to your thoughts here as we wrap up another week >> man, it was going to be a great week for me, but unfortunately, i've got a pretty decent -sized position in boeing. i'm going to have to give the check to somebody else for dinner tonight, somebody who you know i'm going out with. so i think the week is as expected you know, we came out of some good china news. and that dialogue carried through. initial earnings have been okay. i wouldn't say they've been spectacular. like every other season. 80% of companies meet expectations, top line and bottom line, because they manage them down during the quarter

so you're in the earnings period and there's really no telling how the market is going to go, because now we're hitting the heart of it. we had a couple of good, what i would say economically sensitive companies report united rentals was a good report we had some others that were good reports the banks, you know, they're either here nor there. they were fine >> they were fine. they were okay more fine than not jpmorgan, certainly. goldman sachs, not necessarily on boeing, since it is sort of the story we're following right now, you said you owned it would you buy more here? >> i actually did buy more >> really? i bought more a little higher up the reason being the following is that these are emotional moves. and we take a look, say, down 22 i bought it when it was down about 13 and change, full disclosure but they're emotional moves. and the facts are the same the facts are going to be that there are two competitors. airbus and boeing. and that's it. so whether i've got to wait another six months or not doesn't matter whether they've got to pay a billion fines versus $500

million, it really doesn't matter at the end of the day so from a long-term standpoint, this is when you have to get involved in the stock. now, there's no excuse for that information, if it's true, that's disastrous, it means a new ceo. he's already been relieved of his dual duties. >> he's no longer chairman >> the question is why it was withheld, which weap don't know the answer >> and it's down not because of that, necessarily. that may be half the action, but it's, what else is there it's always the next shoe to drop i bought it. i don't have a full position so i can buy more i'm disappointed if i have the opportunity to but that's what's driving the market down and j&a news >> and american express. >> we're going to talk about this more over the next two hours. in the meantime, let's get to some of the big stories we are watching today phil lebeau has the details on boeing, which we have been just been talking about panelist damien conver is here to break down johnson &

johnson's latest woes, and brian sullivan has highlights from his exclusive interview with bill gross. >> this sell-off at boeing all revolves around this document. this is an copy of a text message conversation from 2016 between boeing's former chief technical pilot and another associate and it has to do with the 737 max, which was in the process of being certified at that time. and we're not going to go through all of the instant messages and the back and forth between these two people, but mark forkner, the boeing chief technical pilot at that time, one of the messages he sends is, oh, shocker alert. mcas is now active down to m.2 it's running rampant in the sim on me. referring to the simulator a few texts later, there is a follow up comment from him he says, so i basically lied to the regulators and then he says, unknowingly. now, we don't know what he means by "i basically lied to the regulators and we have reached out to his

attorney we have called, we have texted, we have e-mailed so if this is being taken out of context, we would love to hear from mark forkner's attorney the faa administrator is not happy about just hearing about these documents. he sent a letter to dennis muilenburg, ceo of boeing saying, we want more answers and oh, by the way, the faa says that it will be releasing more instant messages regardingthe 737 max. and they'll be sending those over to congressional committees investigating the max a little later on todaye to cooperate with the committee as it continues its investigation and we will continue to follow the direction of the faa and other global regulators as we work to safely return the 737 max to service the committee that boeing is referencing is a house committee that will be holding a hearing with dennis muilenburg testifying that's coming up on october 30th and then the day before, october 29th, dennis muilenburg will be nefg fro testifying in front of a senate committee. so a lot of questions are swirling about what boeing knew,

when they knew it, and why hasn't this detail come out sooner guys >> so a lot of questions and certainly we need more details. we need more context to all of this but given what we've seen with the grounding of the 737 max fleet and the role that the faa has played in that, the fact that there's arguably been some reputational blowback on regulators here in the u.s., i wonder if the flip side here is that this coming out today actually makes the faa look a little bit better in all of this >> i'm not sure if it makes the faa look better. the faa has made it clear, they're going to be much tougher on boeing when it comes to recertifying the 737 max and you see that in the delays that are announced by airlines yesterday, southwest came out and said, we're pushing it back to february 8th. and i can tell you this, morgan. when you talk with pilots or when you talk with executives at airlines, they have no confidence that this plane is going to be certified and up and flying by the end of the year, which is the guidance that boeing is maintaining.

they have no confidence in that. they sit there and they say, yeah, that's what we think but they don't know. so it really does come down to the faa re-certifying this plane. and whether or not this is actually going to happen by the end of the year. >> all right, phil, thank you for bringing us the latest on this let's get to jeffries aerospace and defense analyst sheila kahyaglu for more. i wonder what you think. with the stock down 6%, k this the timeline of the recertification of the max >> thanks, morgan. i'm sticking to my buy rating and at 350, the stock looks more enticing, because it's discounting my free cash flow estimate i like this dip in the stock i think, you know, whether or not those text messages and what el advance it has to the long-term story, i'm not sure. but what boeing has done going forward is, it adds in the aerospace committee. it created a -- it created a product and services safety

organization and third, it elected dave calhoun as -- who is the current lead director, to become non-executive chairman. so i do think they're taking safety measures going forward to change the way they certify aircraft, whether that's the max or the 777x. >> does boeing need to extend out its guidance, its current official guidance that we were just talking about with phil for when 737 max is going to get back into the air and flying again. >> sure. so i think, you know, you're seeing some guidance from the airlines southwest extending a little bit, american into january so that certainly seems like the max being certified by the end of the year is becoming more and more of a stretch and entering into service, more likely in q1. >> got it. i wonder, we've had some earnings, so far this week from some of the other aerospace players, honeywell comes to mind, when it was 10%. sales growth in q3 year on year. i wonder how much you think the

boeing story as we watch all of this unfold is overshadowing the broader growth story that's taking place in aerospace and defense right now. >> sure. when you look at honeywell, morgan, organic growth has been very good in aerospace it's 20% of the honeywell portfolio. it's really been what's been driving the company's bases. but it's actually being driven by 40% of aerospace defense. that's been growing double digits for a few quarters. that's really seen the benefit, whereas its after-market business is only growing 6%. commercial oe and after-market have been quite subdued relative to what you're seeing in the defense market that's really what's going on. and we're looking forward to big defense earnings next week with the contractors. >> shelia, it's stevewi wise. i don't know if you officially follow air bubus or do it becaue you follow boeing, so i don't know if you have estimates or not. but here's my question, even if they were to order cancellations at boeing, because the airlines have lost faith, if you go over to airbus, they've also got a

very long backlog. so essentially the new orders would have to go to the back of that backlog as we saw the growth in airline travel, that's not a good option so are you going to model in any losses in boeing's auto book because that's a question as an investor, i'm very keyed on. >> sure. so we are modeling in some losses in the orders, that's for sure the backlog is still 4,000 aircraft what's going overshadowed is airbus is overdelivering on their competing aircraft to the max. so you are seeing, clearly, a capacity cuts, because the max isn't in the air and the a-320 is relatively underdelivering to its production target. so i think over the short-term, what you're seeing is, you're kind of seeing less capacity is being cut and what impact that's having to air traffic, we're not quite sure so we're doing a study of all

aircraft travel across the globe, tracking 700,000 flights globally and the conclusion we came to is capacity is essentially being cut by 2%. so air traffic is globally being impacted 2%, being underproduced in the market today. >> shelia, thank you appreciate your insights >> thank you very much johnson & johnson, another very large company whose shares are down today more than 5%, in fact. you can see it there, almost 6, after announcing a recall of some of its baby powder. it's a small amount. the company did make the move after the fda found, well, it was 0.00002% in a test by the u.s. food and drug administration, but enough to certainly stoke fears. joining us to talk about this is damien conover, he's mornings r morningstar's equity analyst following the stock. give me your take on this news this morning that does have the stock down a good deal >> when you see the stock down this much, you always have an initial reaction, there must be something fundamentally wrong here but what i think is happening is

this recall by j&j has stoked the fears over all the litigation that's outstanding on j&j right now related to the talcum powder. however, from our view, we haven't changed our fair value we think this is an overreaction by the market and a good opportunity for investors to get into the stock >> i mean, this company has legal expenses that dwarf pretty much any other companies, i would imagine, given not just talc, but opioids and other things, as well, as you well know, damien 15,000 plaintiffs alone here in terms of this charge that talc powder causes cancer, essentially. why aren't you, as an analyst, following the company concerned about the possibility that they could be facing significant losses in terms of at least versus these pliaintiffs >> it's a good yes what we're factoring in for talcum is about $2 billion in litigation costs and that's a lot of money. but when you think about it relative to how large johnson & johnson is, and how large some

of its previous settlements have been, that haven't had an impact on the stock, i really think $2 billion in costs is about the right amount and i don't really think that's going to be overfundamentally bad for the firm's stock price i think when you think about the discounted clothes, they generate so much cash, they're able to pay that generally easily beyond that, the only other thing that we are concerned about to some extent is brand damage so you think about johnson & johnson, their consumer business, which is a little bit less than 20 pblt of t% of the , very meaningful, a lot of the power of that consumer group is it brands. and when you have product recalls and litigation, it does put a little bit of a dent into that brand power however, in j&j's case, they have a lot of different brands with different names so the damage that potentially could be done to the talcum powder probably doesn't carry over to the other brands, and largely leaves its brand power in tact. >> interesting, damien conover

from morningstar, thank you for joining us steven, would you be a buyer of j&j, down 6% >> no, but i haven't been a buyer of j&j -- they've got -- it's a double whammy it's also what we're looking at in terms of bipartisan legislation and drug prices, which hits them, as well i think we could all agree, maybe not, but the talc wouldn't even be on the market if it wouldn't be an admission of guilt if they took it off the market why would you buy it buy the baby powder. i think there's some brand damage there but to put this into perspective, both boeing with all the bad news today, and j&j with the bad news wasdown what ibm was down yesterday on earnings these are big dollar numbers, but not big percentage numbers so if you were looking to buy j&j, go buy it now i personally think he's low on his litigation expense sexpenses knowingly having a product like this on the market, if the connection has been drawn, and it has been drawn in some trials, will just increase their

damages exponentially. i'm staying away from j&j. >> meanwhile, cnbc's brian sullivan spoke exclusively to pimco founder bill gross last hour and brian joins us now with more from that interview. brian? >> yeah, morgan, it was great to see bill again and welcomes us literally into his house here in laguna beach, california wide-ranging interview, by the way. and we obviously talked about fed policy, interest rates, and even how he sort of moved into the stock market he was always known as a bond guy, but now he's purely uncon trained and can do what he want. he's trading and investing his own money worth more than $1 billion. and we talked about stocks as well but let's get back to fiscal policy first, guys obviously, you've got the fed right now. they've been cutting rates and doing the expansion of the balance sheet, but don't call it quantitative easing. and i asked him about fiscal policy and whether he thought we needed more. he did here's what he had to say about $1 trillion expansion and maybe another one to come. >> the thing is, brian, that

fiscal stimulus that we've had with the $1 trillion deficit and the tax cuts and so on, to my way of thinking, they're basically played out and you need another $1 trill n trillion, not just the same trillion, but another trillion to do the same type of magic >> will we do the trillion >> not in the next year and a half, not with the democratic congress, depends on who's going to be elected. if warren gets in, for instance, yeah, we'll do another trillion, for sure >> so if you want to invest around that, call it baby qe, as bill called it there are some stocks and investments he likes he referenced anoly capital. he's able to do what he wants. it's his own money, after all. nice to see bill absolutely terrible backdrop here i got stung by a bee, but i don't think that matters to the story. >> well, it matters to us, though, bruin. we never like for you to have any sort of injury whatsoever.

>> i'm ambivalent about the bee sting. >> the bee for the beach >> i remember visiting him in that general area. i would assume you're staying the weekend, brian that may not have anything to do with the story, either, but be smart. do we feel like he's got any sense in terms of the equity markets? i always find myself when i listen to like, you know, gundlach, for example, genius when it comes frankly to fixed income you know, i don't know do i really care what he's got to say about stocks? >> reporter: yeah, i think, listen, i hear the point, always known as the bond king forever, but he made a good call a few years ago a linkedin/microsoft arbitrage when they were doing that deal. one of the deals he referenced on the credit side, as well, definitely on the side purchase of allergan. when you get into these, you can play it on both sides. he's playing tect side of that game

>> yep >> all right brian with an amazing backdrop, thanks for joining us to wrap some of that interview dow is down 172 points coming up, we're going to stay on top of the boeing story. as you've sign, the stock is down over 6% gordon bicep thuethune will joi weigh in on that, certainly from the viewpoint of someone who has run an airline >> up and next, we'll be watching this downward turn in d oc antake a look at a few of the sectors at the core of the rotation we're seeing in the markets. stay with us your brain is an amazing thing.

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all right. we've got 40 minutes left to go in the session you can see we are down on all the major averages let's send it over to mike santoli to get his first market dashboard. mike >> david, hi, thank you. we're going to first take a look at cracking safes. some of those perceived safe sectors in the stock market coming under pressure as we get some of the rotation into more cyclical areas and then, counting cash? different types of currencies, actually, in cash. take a look at the trend in the u.s. dollar. been at an interesting spot. and stashing loot. what companies are doing -- big companies are doing with their cash or not doing with their cash and then, lying low. we're going to talk a little bit about -- well, i'm going to keep that one a little bit secret for

now. but cracking safes take a look at this, consumer staples against consumer discretionaries etf. this is a year-to-day chart. the white is consumer discretionary. a little bit more aggressive and more cyclically geared the consumer staples have been hitting new highs. not that long ago, they were keeping the market afloat. here are the major peaks in the overall market this year that was early may, this is late july and a slight one in september, and now we're going forward again. it seems as if the market wants to say the economy has kind of weathered a scare and maybe we can get away from those safe yield stocks, as treasury yields start to come up now, take a look in a more focused way at some of the recent haves and have-nots today the real story is software cloud software high flyers, very high valuations and expectations. they are in orange this is week-to-date just this week, down 3.6%. a flattish overall take. and the banks benefiting from low expectations and decent earnings to have a pretty good spread about a six percentage point

spread right now you can extrapolate and say, now this is the new market, but it is interesting the overall tape is kind of sitting there this week, about 0.75% gain for the s&p 500, but under the surface, there's a lot of shifting around, guys >> all right i'm digging the money heist theme here >> sometimes, morgan, you're in a largess mood and you've got to show it. >> very clever i want to get your thoughts on these charts he just showed. i want to talk about this rotation that's happening or is going to happen, and it's almost like a head fake and doesn't happen and it reverses itself. where are we at right now with this market? >> i've been hearing about the value rotation for ten years from value players, actually and there are a few of them to tell me about it look, we're all suffering pain today, if you have some of the market leaders and growth stocks i bought adobe, which i thought was on sale the other day on the downgrade. the sale got bigger today, so i should have waited there's no price matching in the market so you have to save that for retail and you can see how well it's worked out for them.

we were at a trading range in the market and were at the upper end. the bait is going to be where the pain is. it's also where the gains are. but adobe is one that's down microsoft had an upgrade today and that's down. how often do you see that? i don't think anything's particularly cheap and you've had multiple expansions that's driven the market rise, because earnings are flat s&p earnings are flat year over year so what's driving it there's no place else to go and the u.s. market is still the best market to be. but i'm not getting rid of core positions, but -- >> you don't seem to be a believer that value is going to reassert itself in a way it hasn't as you've pointed out over the last decade while all of these value managers went out of business? >> and value managers, you hear them talking about, i bought amazon i bought alphabet. facebook is that value? so value, you know, they've got to get relevant some way so i'm not sure that exists anymore.

actually, the biggest asset class that's growing is esg. environmentals, sustainability, and governance it's 26% of all u.s. fund assets and 40% of global assets and you can't even measure esg except for once a year so what are they doing the market is just looking for these themes and one of them said, i've got to zbeget into values. but at the end of the day, you've got to show growth. and value banks, they're trading in the upper range now, because the ten-year rates have backed up they'll go back down, and we'll see banks go back down and everybody will talk about, it's the greatest play ever phenomenal management. probably the best management of any sector in the market >> all right well, up next, the controversy over vaping could actually help cigarette sales, one wall street analyst thinks so we'll bring you the word on the street, next and take another look at shares of boeing get hit hard on

news that a top boeing pilot misled regulators about the 737 max. gordon bethune is going to give us his take, next. when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life

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street mizuho initiates ratings but anthem gets the neutral. firm citing overblown concerns about medicare for all proposals by a number of the democratic presidential candidates. >> that's interesting. morgan stanley, meantime, downgrading caterpillar to equal weight from overweight and trimming its price target to $145 from $150 the firm citing increasing downside risks from trade and the slowing global economy stocks trading about flat right now, though. >> and citigroup upgrades altria to a neutral it has been a sell at the firm the analyst thinks the ongoing vaping crackdown could actually benefit cigarettes altria also owns a 35% stake in the e-cigarette maker, juul. that was a deal done last spring $38 billion is where it valued the company at the time, if i recall, for that 35% stake $12.8 billion. but as i reported yesterday,

there was a trade done of a fairly sizable stake in juul on the secondary market at $90. that's down from what had been $300 a share where some people were buying and selling this summer, which was well above where even altria got in, in the spring so it's down a lot and these guys in the private market, steve, do not mark things appropriately, sorry, they just don't. >> they don't. a friend of mine invested in elm joey and told me that afterwards and i said, why don't you tell me about that? i would have put money into it the investment went up like tenfold record time. some of the best investments you make are the ones that you miss. so i would be crying the friendship, i don't think it would have broken apart, but i definitely wouldn't have been checking out anymore checks. i don't know why those products are on the mark. >> this is some of the unintended consequences when you see some of these widespread

blanket bans that are put in place. you havefolks that are addicte to nicotine and they're going to find a way to ingest that nicotine and all of a sudden combustible cigarettes are an option i saw you reacting to the caterpillar news >> what's new news, the economy is slowing some people talking about, maybe it's flattening out. i have not been a fan of caterpillar for a long, long time first, it was the prior ceo who his only consistency was missing every quarter for about two and a half years so you value consistency in the stock. that's not kind of the consistency of value but it's just -- the you look at their numbers, their monthly numbers, retail sales numbers, any numbers. they just haven't hit their stride and it's so economically sensitive. they're tied to coal quite a bit. and coal is going the other. so i don't think caterpillar, i think the new management is good, but you've got to play the hand you're dealt. and it's just not where i want

to be. there are other places i can go to see my money wither away and die other than caterpillar >> okay! >> we've got 28 minutes left to go here. 28 minutes left to go here and here are the three things that are driving the action controversies at boeing and johnson & johnson that are leading the market lower weak china growth data painting a gloomier picture of the global economy. these are all things we've been talking about. and despite some strong earnings, a weak holiday forecast is putting pressure on retail stocks. all right. let's get a cnbc news update now. send it back to sue herrera at our headquarters sue? >> david, thank you very much. here's what's happening at this hour, everyone politicians from both sides of the aisle reacting to president trump's decision to hold the g-7 summit meeting next year at the doral resort he owns in miami. >> if he were a township supervisor, he would be in jail for that it's simply not okay for any federal official, the president included, to use their own

business for government activity and to enrich themselves by it >> i'm much more concerned about what happens at the g-7 than where it's at. in my mind, it could happen in a phone booth. i don't care where it's at, as long as good things happen there. and lady gagano doubt nursing some sore muscles today after a concert mishap last night. she was performing in legislation when she invited a fan on stage, as you can see, he picked her up, he was very excited, but then he accidentally fell off the side of the stage lady gaga landed on her back with the fan on top of her she did manage to get back up. the show went on i don't know how the show went on, but it did she is a trooper and we hear she was not seriously hurt, which is the best thing quit looping it! it makes me hurt >> oh, my god. >> yeah. have you fallen off stages before that is not fun. >> it's not fun. no >> and i'm glad she's okay and i guess the show must go on.

>> absolutely, the show must go on yikes! >> sue, see you next hour. >> at some point, we'll have to talk to morgan about her stage falling. >> you opened up a whole can of worms. >> i was like, really? >> once we get through this close, maybe coming up, we've got your last-chance trade. >> and as we head to break, let's give you a check on bonds. the two-year note is hovering around 1.5%. there it is, 1.78 in today's session. ♪ ♪ ♪

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and then this recent very orderly ramp up to this year but then we come to now. a pretty steep sell-off. i don't have the 200-day average in here, but i can tell you for sure that it's right about there. 97.34, as a matter of fact this is pretty much where we are. there's nothing magic about that we plunge below the average in june a little bit, but it's a general loosening of global financial conditions a little bit of tension release. it's also related to the fact that nine u.s. stocks have started to outperform u.s. stocks in the very short-term basis. obviously, yields lifting globally maybe people think global central banks are kind of at the end of what they can do. this also will take the pressure off of, obviously, a lot of the multi-nationals, consumer staples and industrials that have been pressured by that shortened dollar a quick note a lot of this has to do in the short-term with rallies in the british pound and the euro and of course, british pound tied to brexit this index is not the trade-weighted index this is much more the large

traded fx crosses, not as much about imports and export, guys >> mike, thank you >> a loosening of global financial conditions is the right segue now to go into our next guest and why earnings can play a key part in what the fed does at its meeting. let's bring in steve liesman for more steve? >> morgan, good afternoon. the method may have a data problem here it's meeting in other two weeks and the jobs data and the closely watched survey s of manufacturing and services, the isms, they don't come out until afterwards what's the fed to do next week, the peak of earnings season with more than a quarter of the s&p 500 reporting so earnings from household names like ford, caterpillar, mcdonald's and amazon, they could help the fed answer questions like, is the u.s. consumer staying strong and how much the trade war is hurting companies and leading them to cut back investments fed vice chair richard colllaria

said the fed is making decisions meeting by meeting so there's some chance that the fed pauses in cutting rates at this meeting or more likely after it cuts one more time. this compounds the fed's troubles presidents trump and xi, they meet in chile possibly to sign a deal on trade two weeks after the fed sets rates and you know, guys, there's no help for the fed if you're figuring out what those two will do >> for sure. that is not something anybody can quite figure out steve, thank you steve liesman. up next, we've got your last-chance trade, plus another black eye for boeing we'll talk to gordon bethune about the boeing pilot who misled regulators about the 737 max.

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thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. we have a news alert on the battle more streaming rights to the show sou"southpark." julia boorstin has those details. >> a source close to the situation tells me that there are half a dozen interested bidders in the u.s. streaming rights to "south park" that includes hbo max as well as nbc

universal's peacock. the source expects the rights to sell for about $500 million. we've reached out to all of these parties. we have no comment from viacom or nbc universal we have not heard back yet from hbo max. now, "south park" rights are split between viacom and the "south park" creators, tray parker and matt stone. and this is just the latest high-priced deal for library content as the streaming landscape gets increasingly competitive. you see viacom shares are down over 2%. back over to you >> man, $500 million seems to be a magic number for all of these legacy tv series julia, thank you for bringing us the latest we have got 16 minutes left to go. the dow is down 201 points right now. the s&p is down 6. steve, what's your last-chance trade? >> adobe as i said, i bought it after it was downgraded i bought some more yesterday and i actually bought a little more this morning it's a great company the analyst price target is far above where it is right now. and to me, it's microsoft.

you've got great management and they've got a lock on their market so i know some parts of their new product are not doing particularly well, but that will happen so eventually they'll come back to growth. eventually they'll come back to market leaders and high-quality companies. so when you buy a stock like this when others are uncertain about it, you've got to step up. >> stock's up, what, 17.5% so far this year. i mean, software has been an outperformer and certainly anything that's been enterprise facing, you think of all the names out there, this is the one to buy or are you sort of bullish on the industry group -- >> i also own microsoft. i do it stock by stock, and not necessarily going for a theme. but, hey, you know, i mentioned b ibm before, it was up 35% going into the quarter, despite having four quarters of negative growth at this point. so the market is indiscriminate. welcome to passive investing and welcome to zero or negative interest rates that's what's driving it and when you get opportunities like this when they are separating factors, that's when you step in. >> all right there you have it. adobe is steven's last-chance

trade. this is the last commercial break we are going to take before the close meantime, we'll bring you uninterrupted coverage of the final minutes of trade when we take you inside the market zone. that is coming up next on the "closing bell. ♪ ♪ ♪ takin' it off road station ted! goiwagon, eh?ip, huh? you know it's an suv! your family is duckin' and rollin'... while we stowin' and goin' but that's cool, i know for a fact your suv does not suck. and why is that? it aint got that vacuum in the back, whoo! sucking stuff up! what else are we gonna find?

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weiss from short hills capital partners here as well, still with us. >> all right let's start with seema mody. she's at the boeing post for us this afternoon seema? >> david, good afternoon we're here at post 6, watching shares of boeing sell off into the close, now down over 6% on the day, making it the worst-performing stock today and for the week, shaving off about 80%, accounting for about 80% of the losses on the dow. and in terms of volume, on any given day, boeing on average trades about 3.5 million shares. today, nearly 10 million shares have exchanged hands so certainly an actively traded stock. and if you zoom out and take a look at a longer-term chart, you can see that boeing shares are now down over 20% from its recent high. and certainly one of the big laggards in the aerospace and defense sector this report really raising a lot of new questions, uncertainty around when that new jet engine will come to market, guys. back to you. >> certainly big market-moving report here today, seema mody. mike santoli, though, boeing is

not the only reason the ita is down more than 2.5% for the week you had earnings that came out that were softer than expected you also had everything that's gone on with turkey and i think that's easing, putting some pressure on some of the defense names, as well >> for sure. and i think within industrials, aerospace and defense had held up better, as you had all the global slowdown fears. so it probably is also a little bit of that rotation out of areas people had previously felt more comfortable with into ones that had been more suspect the boeing move is amazing, though because it has been mostly sideways, not selling off this entire phrase. but every time they push out the likely return of the 737 max and the indication today this is still in the fact-finding phase, that was not taken well by the market >> today we got results from dow components, coca-cola and american express coke beat on revenue and that stock is currently trading, if we can bring up that chart right now.

it's been trading higher up 2%. there you go and american express also beat on the top and bottom line, as more people used credit cards to shop and that stock is actually down about 2% right now. steven, anything to read through here either on the health of the consumer or also just on these companies as especially a name like coca-cola is looking to reinvent itself? >> i think coke is a completely different story. it's an expensive stock. i haven't owned it for years i have no intention to american express is interesting. take a look at visa and matter kard, they're getting hit as well they've never hit their old highs, despite the consumer being so robust. i'm troubled by it i don't like the way it reads through and i don't like the market is acting with amex having a good quarter. and you take netflix and that stock had a major reversal those are not great signs for the market >> i'm glad you pointed out netflix. it's down 6% this after what was a strong fairly response to earnings that were, i don't know how to

characterize them at this point, i guess a relief to some extent. certainly the international growth but people starting to do the math, wondering about this increasingly crowd streaming area you just heard julia, another half a billion dollars going to the owners of sou"south park" ad the owners of the show an interesting lack of follow-through, certainly. >> disney, on the other hand, has peeked its head up a little bit. it's come up from 128 to 132 >> it was actually a pretty cursory bounce in netflix, i thought, given the fact it had been beaten down so much clearly not a lot of conviction in projecting out that there's going to be a reacceleration in subgrowth. one thing on visa and mastercard weirdly enough, they trade with software software had been super strong now it's selling off probably a little spillover there. >> netflix shares up a little less than 3% for the year. credit suisse, downgrading a number of retailers today. >> so that downgrade really

ended up pulling down the whole sector the xrt having its worst day in more than two weeks. it's down more than 1.2% credit suisse putting out a dow research notice, essentially concluding that retail trends right now remain sluggish. there's a shorter holiday calendar this year, so less time to sell stuff. ongoing tariff uncertainty and even more that just honestly makes it hard for them to see any kind of acceleration or reason to get excited about retail it's the lowest earnings -- it's also lowering its earnings estimates, excuse me, for department stores, and brands that have particularly high exposure to them names like ralph lauren and pvh, as well as gap ink and "l" brands gap ink is soon to spin out old navy macy's, gap, "l" brands also downgraded by the firm to underperform from neutral and those shares are selling off pretty sharply today as a result david? >> yeah, it's funny, courtney, having gone over it as we said

this morning, when it first came out. macy's and "l" brands is by far the worst. it's really taken it hard as the day has gone along here. >> it really has and i think it got a pile-on fromsore analysts who were putting out notes who were saying, look, it's going to take longer to get this thing reinvigorated, if will happen at all. they have some executive changes, they're going into the holiday season it's just not product that a lot of consumers are being drawn to brown. and plus the fact that most of those are mall-based stores and we know it's happening there and it's going to be a tough row to hoe. >> we've got five minutes to go before we close. gdp in china rose 6% year over year meanwhile, apple's tim cook is in china he's been talking to regulators, this after the company removed an app from the app store last week that had been helping hong kong's protesters keep track of the whereabouts of the police. not hurting apple shares, by the

way, up almost 1%, well, about 0.7% 50% for the year it has been one of the stronger performers >> and now it's in danger territory. it's been gone -- it's gone from the story's bad, to the story's too good now expectations are unbelievably low, and ridiculously high i personally don't think they'll be met, even though i own the stock. i think you ought to be watching >> you don't sell it even though you don't think they'll be met >> i'm not going to sell it, because i don't need cramer calling me up saying, you never trade this stock i'm holding. >> president trump nominating a successor to outgoing energy secretary rick perry and eamon javers has the details for us. >> reporter: that's right. the president's selection for the energy secretary's nominee is don bruette he'll be replacing rick perry, who is on his way out at the end of the day the president says, the president just sending a tweet thanking rick perry, who interestingly enough faces a deadline of today top turn over documents about the ukrainian

scandal to congressional investigators. perry was on cnbc earlier today saying, he's not sure or was not sure as of this morning whether or not he will turn over those documents. the white house has been trying to clamp down all cooperation with the impeachment inquiry perry still undecided, apparently, about whether he'll turn over those documents today. just a couple hours left for him to make up his mind on that decision gu guys, back over to you >> eamon javers at the white house, thank you we're counting down. three minutes or so to go before trading ends for the week. mike's got more on the market internals today. mike >> you look at the dow down 200, the s&p down almost a third of a percent. but look inside the up and down volume on the new york stock exchange it's actually pretty much even so it's not necessarily a broader-skewed sell-off in that regard look at also 52-week highs versus lows on the new york stock exchange shows a more positive story. that's been the case for the most of the week and finally, look at a chart of

the volatility index, the vix. it's pretty well contained here, in the 14s ticking up just slightly, but it shows you we're kind of in the neutral zone market is saying at this point, anyway, today's little shake out doesn't necessarily make them too anxious. >> and if you look at that chart, it's a great opportunity now to buy some protection >> if you're inclined. >> we've got two minutes left until the close here and we're moving back towards lows of the session with the dow down 216 points let's get over to rick santelli for a check on bonds rick >> it's been an interesting week on bonds long end's going to close higher, but the short end isn't. look at week of ten-year versus ten-year bunds look at how the bunds are about to trade above that line look at the spread between tens and booinunds it's the closest the two yields have been since february of 2018 and finally, tens minus twos it was the rage of discussion. of only is this positive, it's the most positive at 17 than

it's been in almost three months now, let's go to the nasdaq where bertha finds a very volatile market, but still eking out a small gain on the week >> yeah, but if you look at small caps, rick, the gains are pretty substantial small caps and biotech this week have been the laggards for much of the year are the bigger winners. reeata pharma is the poster child for that the stock nearly doubling this week after late-stage positive data on a drug to treat a rare neuromuscular disorder on the other side, you've got software this week the software sector down nearly 4% workday was the worst performer, and that helped sink microsoft's value this week, below apple apple going out with its fourth straight weekly gain over to seema. >> hi, bertha! well, despite the moves to the downside for the broader indices, there were some pockets of strength. take a look at the home builders hitting 52-week highs earlier this week. and there you go, kansas citi southern, one of the bright spots in the broader industrial space.

better than expected earnings. and we do hear from a number of those industrial names next week back to lennar, 52-week high, up 1% we have that new data referencing tighter inventory. and consumer staple names like proctor and gamble, have seen gains of 1%. the s&p 500 closing at 29.87 the dow jones industrial ending at the lows of the session, down 250 points 26,772 welcome to the "closing bell." i'm david faber in for wilfred frost. >> and i'm morgan brennan in for sara eisen, along with mike santoli, senior markets commentator. we are in the market zone. you can see the day's market action on the right side of your screen >> and as you can see also, we're sort of getting the close is here. there's a look at the s&p, down

0.4%, let's call it. a little less than 12 s&p points the nasdaq, the russell 2000, all the major averages closing in the red this afternoon. >> the dow finishing at lows of the session, down almost 1%, 255 points lion's share of those losses can be attributed to boeing. the stock plunging as a top pilot admits he misled regulators about 737 max troubles and coming up, former continental chairman and ceo gordon bethune will weigh in on all of this. shares of boeing finished the day down nearly 7% joining us to talk about the market day more broadly, though, steven weiss, managing market at short hill managing partner, still with us. along with liz young, market strategist with mellen investment management. but first, mike santoli, let's go to you. i realize this wasn't the case for the s&p, the broader market. but the fact that the dow did close at fresh session lows, what can we read through from that >> we've had a series of soft closes i don't think it's been

dramatic it hasn't really carried over into the next day. i wouldn't read a tremendous amount, except what the overall story for the week was i can tell the story is being resilient, s&p up about half a percent. we're hanging around the highs and you look at the same exact action and say, we're stalled out. the market is a little bit fatigued it's had an opportunity to make a run at the old highs and has not been able to get there if you net those out, it's probably more positive than not, just because the average stock has done okay. the rotation within the market towards somewhat more of offensive cyclical areas is probably encouraging but it's definitely a wait and see. >> in terms of how we finished the week, is dow finishing with losses for the week, but the s&p, second straight week of gains. that being said, it's been pretty narrow. the trading range. do you see any signs we can break out of it at any point in the near-term? >> new highs are always tough to make from a psychological standpoint so to approach it and fall back

a little bit is not unusual. i think we can, based upon the narrative coming out on china. that's what the market is still focused on, that's what controls at all if the narrative remains good, it doesn't matter what earnings are. because you look to the future maybe we go to the upside a little bit the probability of waeighting i, but there's more risk if we trade off to the downside. you're basically not in a great situation to bring new capital into the market. >> liz, how much of this hinges on earnings? >> we saw the start of earnings season in earnest this week, but things are really going to get underway with i think more than 140 companies with the s&p reporting next week. >> yeah, i think, i mean, i completely agree with steve that it's really going to depend on china and depend on the trade narrative. earnings are important, but it's going to take a lot for the market to really reward anybody that beats on earnings i think we're going to continue to punish anyone that misses on earnings much more so as long as earnings are strong, it will keep the market

afloat, but it's probably not going to take us through new highs. i think the strength kind of stays there. i do like that we've kind of rotated from defensives into cyclicals, but also agree with mike that we have to wait and see if it's actually going to hold >> i think i said more than 140. i think the number is closer to 122 s&p companies next week for what that's worth. >> that's a lot. that's a lot >> still a lot >> we'll be busy in the morning. jpmorgan ceo jamie dimon speaking today in washington, d.c. with morgan stanley's james gorman they were at the iff annual meeting. dimon gave his take on consumer and business confidence. >> the consumer remains quite strong their balance sheet, their confidence, their spending wages going up, household formation going up it's the business side is a little weaker, globally. and business confidence has come way down businesses pay attention to geopolitics and obviously, there's china trade and china, america, all of that is causing consternation and starting to

change decisions people are slowing down, certain investments they're making, they're slowing down, figuring out what they wanted so that will slow down the business side. will that cause united states to go into recession? probably not because that 70% has almost never let us down. >> largely echoing comments he made on the company's conference call when jpmorgan reported earnings earlier this week and we did get a slew of bank earnings bank of america, wells fargo, even so with obviously a management change taking place i think it's the 21st. so that's coming up soon, charlie scharf will take over there. >> monday. >> steven, i'm curious your thoughts about the banks, which i noticed did end up and the consumer overall >> they're so linked to the yield curve, that's what they're going to trade on. i actually think the biggest opportunity here is goldman, but you've got to be patient with it david solman is doing a great job, he's making the changes,

and in full disclosure, my daughter does work there but that aside, that's the one that has tremendous bench. he's made the tough decisions, in terms of partners that have been there forever, that presented a ceiling for others to move up into the organization combining some units he's going with the markets, the partnership is pretty powerful i'll buy goldman not buying it here yet, because we're not putting more money into the market, but that's what i would do >> liz, ten days ago you came on "closing bell" and said the financial season would be better than expected. and how do you feel about that now? >> i feel good about that. i never expect banks to be the home run hitter. i would expect banks to be in that two or three or five spot and you want them to hit singles, maybe doubles once in a while, but they're just kind of there to protect the portfolio and keep earnings and some of that revenue stable. so in a situation where we don't see a recession, and we don't see a recession coming over the next 12 months, banks should hold up.

they are going to trade on the yield curve, but they problem back pretty well and still remain to be better capitalized than any other banks around the world. >> well, stocks closing lori for the week, at least on the dow. but seema mody looks at some of the week's biggest winners seema? >> better than expected earnings growing calls for a rate cut and that brexit deal initially sent stocks higher earlier in the week, but today it was the fallout related to boeing, that weaker-than-expected read on china's gdp and its economy that weighed on stocks. speaking of earnings, coca-cola building on its gains today, better than expected earnings report thanks to small-sized cans and that zero sugar coke line that seems to be resonating with that younger consumer the stock up 3% for the week it was also able to manage the stronger dollar impact we'll see if some of the other consumer-driven names can do the same when they report next week. big week for health care, really been battered down by d.c. and the policy uncertainty but for the week, up about 2%. some of the big drug

distributors gaining on news of an opioid settlement still the second worst-performing sector for the year some other big movers in the industrial space, we saw 3m gaining ground ahead of its earnings report next week. 122 s&p 500 companies, plus 12 dow components, all getting set to report earnings next week and we don't have a lot of data, david and morgan, so a lot are saying they're going to read this earnings report to get a better sense of the health of the u.s. economy, especially on the manufacturing front. so that will certainly be in focus. the dow closing down 255 points today, guys. the lows of the session. back to you. >> seema, thank you. >> mike, i can't help but think that some of the narrative that is starting to emerge here, and i realize we're still early in terms of earnings season, but particularly on the industrial side of things, you see this slowing global growth backdrop whether they're able to continue growing their organic sales in light of that. >> i think the premise for the

case is that this quarter we're now hearing about, the third quarter, should be the trough in terms of this earnings lull we've been in for a while. the comparisons get much easier in the fourth quarter. remember what happened last fourth quarter that's when you really had the intense market scare and economic slowdown scare so i think that's what we're looking at and the areas of the market that had been beaten up the most were the ones where the expectations were the lowest. that being said, when you have such a busy earnings week, there's so much offsetting action and you essentially have the indexes kind of stalemate at some times as you have the winners offsetting the losers. but slowly through that, i think you have like you did in april and july what we had in july and april was reacceleration of the trade war at the end of those months which is what thwarted those rallies. we're not really expecting something like that. >> it's been about a year and a half, though, mike. >> yeah, to months of sitting

sideways that's a mutual frustration for everybody on every side. on the other hand, you can point out that that's not how bull markets tend to end, is going flat for a year and a half usually, there's a little bit of an acceleration higher before it's all over. >> the flip side of that is we're flat for a year and a half in the midst of a trade war that's continued to ratchet up >> that's the risk in my view. that the market has just turned a blind eye to all the risks that are out there, including a socialist protest, which maybe they'll focus on as we get a little closer, nobody thought trump would win. nobody thinks warren can win it's a real risk and the question is saying, 25% downside, elizabeth warren wins. what's your upside if trump stays there? maybe it's down side >> nobody thought trump would win, but they didn't know what the market would do if he did. we don't know if the market

would benefit or get hurt by in advance. >> there's a lot to come still 100 days or more until we get to the iowa primary. so steven, thank you for all your time this afternoon. >> liz young, thanks to you, as well >> still to come, we're going to talk to former continental airline chairman and ceo gordon bethune. we'll get his take on the boeing pilot that seems to have misled regulators about problems with the 737 max that he knew about back in 2016 we'll discuss what it means for inveor cinupsts,omg ♪ ♪

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well, shares of boeing were a major drag on the dow today. this after the faa said the company has been withholding messages about the 737 max's safety phil lebeau, of course, covering all sides of this story and joins us with some of the details. phil >> and david, we may have more developments before the end of the day. i'll talk about that in just a little bit but the reason for the sell-off today, it's all about this instant message conversation between the former chief technical pilot at boeing and another pilot at boeing. back in 2016 we're not going to read all of this, but there are two quotes, when they go back and forth that do get a fair amount of attention today. one the from mark forkner, the former boeing pilot who says, oh, shocker alert, mcas is the flight control system that's been at the heart of the problems with the 737 max. he says, mcas is now active down to m.2 it's running rampant in the sim

on me. sim being simulator. a couple of texts or messages later, he says, so i basically lied to the regulators, and then it says in parentheses, unknowingly. we reached out to mark forkner's attorney, davidg gerger. he sent us a response to these messages and the portrayal that perhaps they were misleading the faa or his client was. he says, if you read the whole chat, it was obvious that there was no lie the simulator was not reading right. he would never put anyone in an unsafe plane as you take a look at shares of boeing, i should point out that the company issued a statement today saying it's cooperating with all of the probes, including not only doj, but the d.o.t. and congressional ones. and guys, the reason i say we may have more developments, the faa said today they're sending more of these instant messages or these conversations to

congressional committees that are investigating this we have not seen them yet, but we're looking. and we're expecting those sometimes this afternoon >> phil, we know you'll bring us the latest as you get them phil lebeau, thank you for more, let's bring in gordon bethune, former pilot, former continental airlines ceo, and important to this conversation, former vp and general manager of 737 and 757 programs at boeing gordon, thanks for joining us today. the fact that we're getting these. and i realize that there are more details and more context to come here, hopefully, but the fact that we're getting these instant messages from back in 2016, with how long the investigation has been happening around boeing and the faa and the 737 max, why has it taken this long for these messages to be made public >> morgan, i understand that they turned those over in january to the justice department, but i guess there's some internal government barrier to communicating across those two departments. morgan, they call them test pilots, because it's a test. and there's no incentive for them to lie.

and as a matter of fact, you want the rigorous, thorough investigation and they give you the feedback, because you can't bs in aviation if you're running out of fuel, adjusting the fuel quantity indicator doesn't help you. and so the facts and data that they produce are shared within the company. that may be disappointing, but you definitely, definitely don't lie. >> gordon, in this entire episode, if you want to call it that, since we first learned -- well, since the crashes themselves, i can't remember one moment where things started to move in a favorable direction for boeing pit just seems to kind of keep building here we are, i don't know how many months later. the max is still not back. what's your sense in terms of just the momentum here >> david, i think it gets drug down in the regulatory process as they factionalize normally the eu and the united states would be the lead regulators and other countries would just follow their lead. today, there's a lot os umbragef

criticism against ethiopia and indonesia. a whole lot of issues are at stake, and that's driving what i would say an objective assessment to make it nine months when it should have been two months i'm not saying that there were things that were not wrong, but we're now not fixing technical things we're arguing about who's right and who wrong? >> all right so put yourself back in the ceo position at a major airline. what do you do, you know, when you're at southwest or any number of other carriers that are relying on this plane to come back into service >> they're hustling, to get short-term leases to cover and in the best case, they rewrite their schedule they don't open new cities and it does slowdown their growth. so there's an economic impact. i think boeing has covered well enough with insurance to handle the liabilities, i know they

will but it's not good for the airlines, that's for sure. >> are you surprised that boeing hasn't, at least in an official capacity, pushed back its target timeline for when it's going to have the 737 max up and recertified and flying again >> well, morgan, it's not up to them it's up to a bunch of people i understand it's going over to the senate you can imagine how knowledgeable they are about the technical aspects of airplanes and the questions they'll ask. so it's almost impossible to forecast what's going to happen in a regulatory or a legislative environment. >> i wonder -- i mean, we've talked about it so much over the last couple of months, but all the technology that's gone into this plane around mcas and just the role that that has played. and certainly, it seems like so much of what has hinged on this investigation is what's pilot error versus what is potentially maybe poor design that led to pilot error. as someone who has piloting experience and given just the

dribs and drabs and the reports we're getting along the way, how do you see it? >> i think there's some of both, but primarily, i would look to a pilot qualification and training you know, automobile accidents are usually caused by the drivers. that's also true in aircraft accidents. at the same time, i don't want to say everybody's blameless, but quite frankly, memory checklists are part of getting your ticket or your license endorsed to fly an airplane. and runaway stabilizer trim is part of every pilot's memory checklist. in both of these instances, they weren't run. the cutoff switches weren't thrown the auto pilots were left on, throttles were left on so it was bar behavior by the pilots, but of course those companies resent any criticism of their professional operation. so you get this tit for tat, and that's what we have here but they have fixed the airplane and the airplane is ready to go on, pretty sure. i know i would feel comfortable in the airplane. >> that's a good place to leave

it for now i appreciate you joining us on this ongoing story thank you, gordon bethune. >> have a good weekend >> you, too. up next, we'll break down the charts and find out whether plunging corporate cash spending is a red flag for the market and don't miss an exclusive interview with secretary of state mike pompeo monday at 4:00 p.m. eastern, right here on closing bell no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery. ♪ ♪ ultimately, it's helping thousands of patients return home. and who doesn't love going home.

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welcome back let's send it over to mike santoli, get his take at the third dashboard of the day, as well mike >> calling this one stashing loot what big companies seem to have been doing, at least in the second and third quarter of this year goldman sachs strategist put this together. and it essentially tallies up the various cash spending that s&p 500 companies have done and cash spending in this sense is cash mergers and acquisitions, it is capital investment, so it's essentially all the kind of investing for growth type activities that you would expect and you see this decline right here that's the second quarter. third quarter is probably going to be in the same zone and clearly, that's after a

string of increases. this is corporate confidence you can see ceo confidence going down it's a little bit of a cautionary sign about those business-centric parts of the economy. i would point out, look at what we're going up against here. this was almost a 30% annual gain last year so it's still at very high levels you're giving back some of this extraordinary bulge in cash spending also, when you have seen previous declines like, you know, in late 2016, that did not necessarily mean bad things for the economy. in fact, you had a reacceleration of the economy. so it's not necessarily determinative, but it shows you this overlay of caution out there among companies. >> you hit the nail right on the head for me. i was looking at those 2018 in terms. you're lapping the impact of the tax breaks or tax reform, i should say, here with this you know what i should say i've got an assignment for you let's revisit this chart and let's see what consumer -- or ceo confidence or business confidence, another up with of those numbers looks like versus it >> oh, ceo confidence is way

down is in the dump that's basically the whole story. >> so you already answered my question there you go up next -- thank you, mike -- find out why presidential candidate elizabeth warren's wealth tax plan could impact ceos whose wealth is tide into their stock prices and as we head to a break, here's a look at some of the biggest losers in the tech sector today markets. the business of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve.

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cme group - how the world advances. time now for a cnbc news update with sue herrera. sue? >> david, thank you. here's what's happening at this hour, everyone police in riot gear shooting rubber bullets and using batons to disperse a few hundred young protesters who surrounded the national police headquarters in barcelona. more than 200 people have been injured and 100 arrested since demonstrations supporting the separatist movement began on monday in lebanon, police and protesters fired tear gas and firecrackers at each other outside the government building in beirut. this amid protests against an economic crisis in that country. the prime minister gave his political adversaries a 72-hour

ultimatum to agree on syria's economic reforms as the fighting continues in syria, secretary of state mike pompeo declined to answer questions about the u.s.-brokered cease-fire between turkey and the kurds this as he and the u.s. ambassador to israel talked outside the new u.s. embassy in jerusalem. and here is my favorite story of the day the vatican has launched an app-driven smart rosary. there it is. hoping to encourage the tech-savvy younger generation to pray more. the e-rosary is operated by a click-to-pay smartphone app, which is activated when worn on the wrist and by doing the sign of the cross and apparently it also doubles as a fitness app, but i'm not exactly sure why there you go there it is! >> spiritual fitness mental fitness >> mental fitness, perhaps >> all right that's interesting all right. sue herrera, thank

hope you have a great weekend. >> you too presidential candidate elizabeth warren's wealth tax plan could actually have a big impact on stock prices robert frank has though details and he joins us now at post 9. robert >> hey, morgan if it ever passed, the wealth tax could cause big drops in the stock market right around tax time under her plan, the government would calculate's a person's wealth for tax purposes at the end of each year for ceos and investors and founders whose wealth comes from stocks, that creates a big incentive for lower stock prices in late december accountants and tax lawyers i spoke to say that ceos could talk down their stock price toward the end of the year and stock it back up after january in order to reduce their tax bill stock price could also suffer as executives and founders have to sell that stock to pay the tax how much would they sell jeff bezos, for instance, would owe more than $3 billion in wealth taxes under warren's plan, he would owe more than $8 billion under

sander' plan so he would need to sell millions of shares of amazon stock in order to pay. and that could pressure the stock. >> he is the wealthiest man in the world. >> he is >> i'm just saying not necessarily in relation to deserve to have a wealth tax >> in all of the unintended consequences of a wealth tax, one thing that hasn't been considered is you would get this january effect, which we already have, to a small degree, at a much bigger magnitude, because everyone would have an incentive to have the lowest possible stock price on december 31st and have it bounce back up on january 1st. it creates this weird artificial depression and pop in the market that we kind of already see. >> you've covered all angles of this >> i think we're done. we're at the bottom. >> all the things you've got to worry about. >> we're at the bottom of the barrel i think we just topped out >> robert, thank you >> thank you, guys coming up, a former top faa executive will tell us about the potential legal jeopardy that

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welcome back to "closing bell." another round of negative headlines for boeing this time a set of text messages from a test pilot that revealed the company may have misled regulators the stock closed down nearly 7% on the news today, down 22% since march when the 737 max controversy began. >> ceo muilenburg is due to testify in congress later this month. and this certainly raises what are already fairly high stakes of course, he is no longer chairman of the board of boeing. joining us on the phone is jeff g guzzeti. he's held senior position at the faa, the ntsb, and the department of transportation jeff, good to have you you know, joust give me your take, as we still continue to learn more as to this news these tex messages sent in 2016 that certainly seemed to indicate test pilots were having some trouble with this very

system >> yeah. well, david, i think that we need to have a little more context about the messages it certainly sounds pretty damning from what is -- from what has been revealed you know, anytime a manufacturer says in writing that he's lied to the in itself is concerning, especially when the topic is about mcas, which is this system that seems to be implicated in both the ethiopian and the lion air accident. however, you know, these text messages were from 2016. it was as mcas was being put in their engineering simulator. and so the quote about going rampant may not have meant anything about the mcas system as it would actually function in the airplane, but perhaps problems with how you're going to program it into a simulator

to train pilots. we just don't know the context but if, in fact, it was a lie, because this test pilot, forkner, also indicated that he made a request to have the mcas system's description removed from the manuals, if, in fact, it was a straight-up lie and they were -- and he was part of a plan to hide things, that's very, very bad, obviously. i've never, i've never heard of that in the aviation industry, involving transport aircraft that's why i think there's a lot more to this story that will provide some more context. but with regardless, it is disturbing >> yeah. i mean, and jeff, i suspect we'll probably be hearing more as the days go here. these messages coming out in the midof boeing and ceo dennis muilenburg getting ready to go to capitol hill and finally testify in front of lawmakers. which raises another question.

why has it taken so long for that process to happen, as well? >> you know, i don't know, morgan it seems to me that he should have been testifying long before there might be some political reasons behind it. maybe it's because congress holds sway more over the faa, so they wanted to hear from the faa's standpoint, first. but regardless, it looks like both the house and the senate are going to have their crack at muilenburger and it will be very interesting questioning, you know, perhaps some of this has not come out, because it has been an ongoing criminal investigation by the department of justice. but it's certainly going to raise a lot of curiosity now >> yeah. and that seems to be a key point. and certainly one of the things we would be looking to get more information on is, whether is the justice department would be investigating what the details of that could potentially be looking at as someone who has worked at some of these different regulatory agencies, jeff, i wonder what you think the faa -- i guess the reputation of the

faa is around the world right now. it certainly seems like there's been some reputational damage. and i wonder whether you think these messages, and mind you, i know we need more context, but whether these messages actually help restore some of that. >> >> i don't know whether it would help restore it. i think those that believe the faa fell down on the proper certification of the 737 max are still going to believe that. they're still going to say, well, the faa should have been smart enough to catch boeing in a lie, if, in fact, that's what it was i don't think it will worsen -- certainly, the faa and boeing are taking a hit i think it's going to be short-lived. and i think that once all of this blows over and the 737 max is ungrounded and gets a yee or two under its belt of service, this will be a distant memory but for now, yes, it's going to continue to put the faa and boeing in the spotlight. i don't think it's going to improve the faa's reputation at

this point we still need to have both of those investigations be completed and the reports made public and then we'll render an opinion. >> all right jeff guzzeti, thanks for putting some of this into perspective for us we appreciate it today >> okay. some sad news, eantime, this afternoon mark hurd, the ceo of oracle, passed away today. he was 62. let's bring in jon fortt for more on mark's legacy. jon? >> yeah, i knew mark hurd for about ten years, back when he was the ceo of hewlett-packard and he was really known as a guy who paid attention to detail hewlett-packard was in the midst of a lot of upheaval had just gone through the acquisition of compaq, had missed several quarters. and they found this guy who very few in silicon valley had heard of, mark hurd, who had run teracompany. big data turned out to be the

future and he came in, did quite a bit of cutting at hp and got that ship sailing in the right direction, and then he ended up at oracle, controversy as he left hp over expense reports and a relationship with a contractor larry ellison, the cofounder and then ceo of oracle snapped hurd up the two had developed a relationship over business and conversation and tennis, a shared love of tennis between ellison and hurd a few years ago, he got the title of ceo under larry ellison and hurd had been the public face of oracle, leading sales, just leading the charge in the cloud as that company continues to transform in the cloud era. larry ellison sent out a note to oracle staff this morning, just talking about mark hurd as his friend and one who will be truly missed, guys >> john, thank you jon fortt. up next, the big brexit impact

we'll hear from irish ambassador daniel mullhall and get his take on how the brexit battle and trade war is weighing on his nation's economy th'strghahd. at sait ea 300 miles an hour, that's where i feel normal. having an annuity tells me my retirement is protected. learn more at retire your risk dot org.

u.s. tariffs on $7.5 billion worth of european goods take effect today, affecting everything from airbus planes to french wine to italian cheese. joining us now to discuss the fallout, ambassador dan

mullhall, the irish ambassador to the united nations. you going to get hurt at all in your country by any of these new tariffs? >> well, we will we're a very strong trading partner of the united states we have 750 u.s. companies operating in ireland we have a huge trading relationship in both directions in goods and services and unfortunately, even though we have no involvement in the airbus project whatsoever, about half a billion dollars worth of irish exports will be affected by these tariffs we're very strongly in fair of resolving this issue between the eu and the u.s. and getting back to working on improving our trading relationships rather than getting into a tit for tat tiff over tariffs which will only lead to damage for both of our economies. >> ambassador, have you been involved in any of these conversations with tariffs going into effect, and if so, what has been the gist of them? >> well, i have. every ambassador here in the united states, every european ambassador is concerned about the impact of tariffs on trade

between the u.s. and their own countries. and that's certainly the case for ireland. i mean, we're -- these tariffs, for example, will hit ireland hardest of all of the eu countries on a per capita basis. and we are, in terms of the volume of the exports affected by these tariffs, we're number 6 in the european union, even though we're a very small company with a population of less than 5 million. this has been a particular concern of mine, of the embassy's for the last six months or so and we still hope that how the eu and the u.s. can get down to resolving these issues and removing these tariffs and working on developing the trade relationship between our two economies rather than damaging it through a trade dispute of this kind. >> and sticking with trade, but shifting gears to brexit obviously, this crucial vote coming tomorrow, in terms of the borders on the island of ireland, is this really the main issue that could once again

derail a potential deal? how are you thinking about this? what's at stake here >> well, we're very much in favor of this agreement, because we had two concerns about the impact of a no-deal brexit firstly, that it would have -- pose risks to the peace process in northern ireland, had there been any border controls imposed on the island of ireland and secondly, it could be very damaging to our economy. we believe on both of these accounts, this deal is a good deal for ireland and the european union because it will avoid any imposition aboard controls on the island of ireland. and it does give the european union and the uk a period of at least one and maybe more years to work out a new trading relationship and therefore minimizing the damage to the economies of both the uk and the european union. because ireland would have been very badly affected by any such disruption of trade that could have come about as a result of a

no-deal brexit >> you know to handicap the vote tomorrow in parliament for us, as many others are trying to do right now. >> i'm a diplomat, but i don't have a crystal ball to look into i hope very much this deal does go through, because it will remove a lot of uncertainties between the economies of ireland, the uk, and the european union and it will be good for the united states as well, by the way. anything that damages the economies of the uk and the european union will also be damaging for the u.s that's why i've been talking to people here over the last year, urging them to support the kind of deal that this agreement yesterday would bring about. and i'm particularly pleased that our american politicians and irish americans have been s very sportive of wanting to avoid any risk to the peace process, which irish americans played a very big role in bringing about years ago >> it's going to be a very big weekend. thanks for joining us today.

>> thank you >> up next, mike santoli heads back to the telestrator with a check on market sentiment. and later, key earnings to watch. a slew of big companies that include caterpillar and some major technology names are all set toept. ror we'll give you a preview coming up on the "closing bell. this piece is talking to me. yeah? so what do you see? i see an unbelievable opportunity. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions.

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let's send to mike santoli for his final dash board of the day mike. >> yes, dave, final of the we can. lying low that's what investors seem to be doing right now look at this bank of america mailer inch lynch. bull/bear big-ticket are appositioning of sentiment meant to identify when there is optimism or pessimism. you hit the extreme bear zone. even though there's not a pullback wear and tear on people's moods. this is a net bullish contrarian signal i think people are leaning on the idea into the fourth quarter not a lot of people are set up to expect higher prices. this alone doesn't make the market go up but does set the scene a bit. >> definitely puts it in context for us mike santoli for you up next, the key things every investor needs to watch as we

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microsoft, amazon, bogey, oh, a slough of others as well are set to report their results next woke. let's start with a preview of

caterpillar. seema modi has that. >> always a good proxy for trade, the health of the global economy. when is interesting is ahead of caterpillar earnings report next wednesday, the stock downgrade bid morgan stanley from equal weight to over wgt concerned about repliesing higher inventory levels, a slowdown in key markets overseas and now expect negative growth in caterpillar's two largest business segments construction and energy and transportation in 2020 overall wall street expecting third quarter earnings of 2.the $89 and revenue of $13.4 billion. investors will be waiting to hear what caterpillar says about the slowdown in china, how is navigating through that and coping with growing competition from local players on the mainland also worth noting that caterpillar has been underperforming peers in the industrial sector. it's down about 3% in the past three months compared to the s&p industrial sector flat on the

year that's my -- that's what i do when i try to use the plasma i have to learn from santoli. >> you're giving santoli a run for his money. cater party. 33 m, the other industrials seema thank you. technology meantime is the best performing sector year to date with microsoft, amazon and twitter just a few of the tech names reporting earnings next week for more let's bring in tom forte, managing direct and senior research analyst at d.a. davidson tom, great to have you what are you looking for on earnings next week especially from amazon. >> for amazon, the story there for a little while was amazon aka profit incorporated. to the extent that aws third party retail and advertising were driving outsized profits. now i think that story reseeds for a minute to the extent any invest in one-day prime shipping and then in video content is going to cause profits to be lower than expected for the third quarter. the good news though is the

investment in one-day prime should accelerate sales especially in the u.s. so less emphasis on profits for amazon when they report next thursday. >> it's interesting to hear you talk about content we've. talking about the streaming wars on the heels of netflix results this week. is that a bigger risk to the stock and the numbers we get next week than people realize. >> on the profit side, it is on the strategy side i would argue it's upside. if you think about the beauty of amazon strategy they've been essentially using both streaming music and streaming video as a loss leader to drive retail sales. now they're starting to make investments that could pay off in the form of popular content when you think about their up coming lord of the rings series, for example. to the extent it that they ramp spending as part of the overall war for spending and cone in o.t.t. it could result in better content for amazon which could result in upside. >> but it's more than just that spding on the networknow.

they're -- i think they're buying a 10 oh thousand electric vehicles to deliver packages there is a big investment spend coming beyond just streaming, right, tom. >> if you think about let eye of the initiatives, yes, on the one day prime shipping efforts i think it's a huge difference maker for consumer behavior. when you get products from amazon next day, you're likely to buy more discretionary items and a lot more consumer staples. and i think that's vrpgd news for revenue growth for amaze >> tom fat forte thanks for joining us >> my pleasure. >> another thing to watch next week and that's our exclusive interview with secretary of state mike pompeo at 4:00 p.m. eastern on monday right here on the "closing bell. meantime one lack last look at markets how we begin the week. dow finishes at lows of the session. down 255. >> a couple of news driven moves that did drag the dow down the lesson though has been

steadiness bonds yields stuck around 1.75 for for the 10-year it's wit and see on the flood of earnings >> earnings and trade, the two big things. >> earnings the most part hoping not to hear much else and trade because it won't be good news. >> not expecting nick anything next week. >> that does it for us on the "closing bell. "fast money" starting right now. and live from the nasdaq market site over looking new york's times square. this is "fast money. i'm tyler mathisen for melissa lee. people were throwing things i wish you could have have been here to see if kaern finerman was well behaved grasso was loud but well behaved not throwing anything and guy adami hold the egg nothing, folks because one wall street firm went full blown frinch. we will break down names on the

naughty list from bond king to stock picker bill gross says