loa t of sense fricke is an africa is an untapped opportunity. china already has a foothold in africa they've been backing a lot of digital payments companies >> i think i'm with you. i think he's probably looking for an opportunity communications being what it is, it's fine. >> thanks for watching "power lunch" >> "closing bell" right now. >> and welcome to the "closing bell." i'm contessa brewer in for sara eisen today. we're at the home depot post the stock down more than a percent after we got those weak manufacturing numbers. in fact, that's why the broader indices are lower today with 59 minutes left to go of the trade. wilf >> good afternoon, contessa. i'm wilfred frost. let's have a look at what's driving the action u.s. factory activity and construction spending unexpectedly fell in november, raising concerns yet again about the strength of the u.s. economy. president trump announcing surprise tariffs and speaking of

trade, the president declining to provide more details on the negotiations with china this morning, saying, quote, we'll see what happens broader markets at the moment down about 0.6% on the s&p the dow is down 192 points the low of the session for the dow 250. so we are off the loan he lows t recovering a little bit in that final hour of trade. joining us for the full first hour of the show is bespoke's paul hickey. how you doing? >> good. >> do you think it makes sense we'll start on a soft footing given the great run we saw in november >> we saw a big strong run to close out the month of november here and don't put too much weight into the first trading day of the month. i don't know if you recall, but last december, we were up 1% on the first trading day of december and i think we all remember what happened the rest of that month. if we can get the opposite of what happened last december, i'll take it >> fair enough lots to discuss with paul throughout the full first hour of the show. >> let's focus in on the big

stories we're watching today bob pisani is covering the sell-off kayla tausche has the latest headlines. and frank holland is following the impact on shippers let's start with bob and the sell-off >> weakness in the ism is the issues the ism new orders index that's any four-month low. and it suggests softness in capital spending and maybe even earnings growth, particularly for industrials. so what this does is it measures the number of participants who reported increased customer orders compared to the previous monitor. and at 47 or so, that's down still, europe and china pmis, generally, they've been better than expected, particularly today. because we have two pmis above expectations and the u.s. is below expectations not surprisingly today, two big industrial names are weak. all of them weak we also have infrastructure companies that are out there

jacobs engineering, for example. volca vulcan materials also on the weak side. we've seen weakness in the railroad stocks like norfolk southern and union pacific but wilf, i think the most important thing is the u.s. consumer remains strong and that's the reason we're a near new highs. >> we're also following a number of trade headlines surrounding china, brazil, and argentina kayla tausche is on top of all of those headlines for us. >> and they are all related. president trump was characteristical lally cryptic t the prospects for a phase i deal this year. >> the chinese are always negotiating. frankly, i could be other places that i could do all by myself and be even happier. and you understand what that means. but the chinese want to make a deal we'll see what happens >> the president tightened one screw on china by signing into law a bill backing hong kong

protesters and tightening another on steel and argentina, in response to slamming their, quote, massive devaluation of their currencies, which is not good for our farmers, end quote. the white house caught offguard by trump's tweet has yet to formalize that policy on raising those tariffs, guys. >> kayla, quite possible to see december 15th tariffs delayed or postponed, even without a phase i deal signed? >> it really depends on what happens in the next few weeks. understand thing from officials current and former and people close to these talks are that the delay or cancellation of those december 15 tariffs was built into those talks back in october and that the white house signaled that it would do that certainly, that was on the table then it is expected that it will be on the table now but of course, they always say, the caveat, the president reserves the right to change his

mind >> all right, kayla. thank you for that today's cyber monday shopping event is expected to bring in $9.4 billion in online sales according to adoby and as for the rest of the holiday weekend, a number of firms all citing america a big winner let's get to courtney reagan in bethlehem, pennsylvania. the orders come in and they've got to ship out the goods, courtney >> reporter: you know it, contessa and walmart is expecting that today will be one of its biggest days of the year, maybe it will set a record we have to see, there's still an awful lot of shopping to be done there's 1.2 million square feet in this location it's just one of six campuses that fulfill those online orders for cyber monday and beyond. but today is expected to be a record day in general overall for retail, as you mentioned there. we could see the most online sales that have ever been done in a single day in the united states on this day

it was 69 million americans expected to shop but things have changed as far as the timing for cyber monday over the years we used to have to wait until we could get to work and use our desktop computers with high-speed internet to shop. so we saw peak sales happen during the day it's expected to happen tonight between the hours of 7:00 and 11:00 p.m. pacific time. once the kids are in bed and all the chores are done and 30% of the sales volume will happen during that period of time got some early search trends so far from captify best buy is the number one searched retailer online those searches up 332% from last year walmart is number two. it was number one on black fl friday costco trading fairly strongly for a searched retailer online today as it did on black friday. but thanksgiving through cyber monday is really sort of this big blur of shopping nowadays. q and 30% of total holiday sales

are expected to be done over that five-day stretch. >> courtney, when you are comparing what happened on black friday, what happened on cyber monday, do you get the sense that these big retailers that we just saw, who have strong presence, both in bricks and mortar, and online, that they care where the sales come in >> reporter: absolutely not, n contes contessa they just want you to shop at their stores or online they don't care it if you did it on november 1st. they offered those early deals at the end of october. they don't care if you do it now. they just want to capture the sales. we'll see wants, but that's always why it's a little bit hard to use one day as a barometer for the entire season. because things are all over the map now. and you always have those last-minute procrastinators. i only have three gifts done total. so i have a lot more shopping to do >> court, thank you very much for that now, the thanksgiving holiday also kicks off a big weekend for shipping companies, if those boxes flying behind courtney

weren't enough to remind you of that frank holland back at hq with that story for us. >> the question this holiday season is can amazon deliver like, literally, can it deliver. amazon's self-delivery of ecommerce packages will increase by 121% this holiday season. that's according to the forecast from shipmate rix.com. it's also the first without fedex as a partner and the shortest window between black friday and new year's eve possible only 33 days about a week less than last year shippers last faced this in 2013 when ecommerce was only about half the size it is now. fedex and u.p.s. are expected to see single-digit increases to their volume despite the smaller window, while the post office is forecasted to see a double-digit decline. shipmate rix says that's largely due to zpon stamazon stepping us partner program. in-store pickup, another trend to watch about 15% of shoppers are expected to try it out this year it's forecast to grow at a 25%, one out of four shoppers in 2020 back over to you

>> frank, thank you very much for that now, stocks as we mentioned, trading lower throughout today's session. we're off the session lows but still down over 220 points on the dow for more, let's bring in jeff sought paul hickey still with us as well jeff, starting with you. clearly a lot of these discussion points where it's consumer related, a lot of good activity still going on. the data we saw this morning on the manufacturing side, pretty disappointing. as long as the negative data is confined to manufacturing, do you think the market can keep going higher >> i do. i think you're getting an early christmas gift with the sell-off right here on friday and today it may extend into the middle of this week, but the hold stock market saw is if santa fails to call, the bears will roam on broad and wall it didn't play last year retail sales were hurt a little bit with the 20% decline from october into -- we actually identified that decline in early october, as well as the bottom in late december i think you're going to get better than expected retail sales, because you're not getting the 20% decline in the

equity markets >> paul, you think that small caps are the ones to watch here. >> they've lagged for a while here we're starting to see better performance from the small caps. just today, in prior days, when you see doubts about trade or china-related headlines, small caps get killed relative to large caps today, they're underperforming by a little bit, but lately, when we've seen these trade headlines come up the last few days, small caps haven't been as poorly hurt. their relative strength has also started to show a turn here. i think if we do start to see, you know, manufacturing notwithstanding today's weak ism manufacturing, we think it's going to stabilize a little bit at these current levels and be good for the small cap space in general. >> the russell 2000 had what they called a golden cross a few weeks ago, where the 50-day crossed above the 200-day.

and i think the small caps stocks have a lot more to run here >> in terms of the broader trade headlines you both mentioned, clearly, we haven't had incrementally positive headlines over the past couple of days or the last week, but provided the december 15th tariffs don't go into effect and we get confirmation that they're going to get delayed, does it matter if phase i is signed can the market rally in december in that scenario, jeff >> i think it can. i think the trade talks with china have hit a stall because of the bill that was signed, the human rights bill. i live in d.c., i'm still pretty connected in the d.c. beltway and i'm not sure whether the trade tariffs are going to go into effect or not, but i don't think there's going to be a phase i this here. >> when you're talking about the small cap stocks, you're saying it's important that they start discounting these trade headlines, but why would they? >> throughout this entire per d period, small caps have been disproportionately negatively impacted by any day over the past 18 months

>> why would that change now why would the market start -- >> i think you're starting to see the market sense that we're at level where things aren't going to get any worse maybe we will see a delay in the december 15th declines and to jeff's point earlier about a golden cross for the russell 2000 normally in most case, a golden cross, that formation doesn't have a lot of predictive ability. in the case of the small caps, a year following, it's much better than average returns for small caps gains 80% of the time. >> jeff, you have an early christmas present, a buying opportunity. where would you put money to work, for the short-term investor just looking at the rest of this year? >> i still like technology and i like financials. and my father tells me, good things tend to happen to cheap stocks the energy complex is only up 5% on the year. i particularly like the, believe it or not, the midstream master limited partnerships and i think the small caps are getting a january effect in

december >> and paul, for you, are you looking for a particular stocks that might go on your tax loss bounce list? >> you know, i think we haven't really been playing that angle, particularly much, but i think on the course of getting to a sector basis, i would agree with jeff on financials i think the financial sector, we've been seeing much better performance for these names in the internals. and the large cap financials after the big banks this earnings season really broke out of what have been like multi-year consolidation phases. they have the room to raise their dividend payments. they have better than average yields already and they have the ability and, you know, the green light so to speak from the fed to incrementally raise those dividend yields. >> jeff, thanks so much for joining us >> a pleasure. >> good to see you, as always. we're down 224 points on the dow. a little bit more selling in the last ten minutes since the show started, but still off the low, which was down 254 points. still ahead, it's a down day for stocks as just discussed, but

roku has been hit particularly hard on the back of a downgrad from morgan stanley. we'll tell you what's behind that warning and after the break, the s&p 500 on pace for its worst day since early october. mike santoli heads to the telestrator with a look at the key trend lines to watch and take a look at our data tracker. the ism manufacturing index missing estimates in november with a reading of 48.1 construction spending also missing the mark falling 0.48% in october following a rise of half a%. "closing bell" is back right after this break whether you're out here on lte.

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welcome back to "closing bell." we have 43 minutes left to go until the "closing bell. the dow is off 0.75% the nasdaq has declined more than a percentage point. >> let's check in on the markets. very quickly, down 4%, as contessa just said some individual market movers. take a look at f.a.a.n.g. stocks in the sell-off. facebook, apple, amazon,

netflix, alphabet all lower today as investors sell out of some of the stocks that have been leading the rally on the back of those weak ism and construction spending numbers, industrial stocks have been hit particularly hard shares of boeing, honeywell and utx all lourwer. >> let's send it to mike santoli for today's market dashboard >> air is thinner up at these recent heights for the market. i'll take a look at the field position as we pull back a little bit the slope is steep that's the slope of decline or expected decline in earnings forecast but that might not be that big a deal for the market next year. we'll see. vision is limited, very hard to predict the stock market, but people try we'll take a look at the distribution of forecast for next year. and insulation is key. the insulation of a very strong wealth effect on consumer spending so here you go here's a one-year chart of the s&p 5 h. the one-year chart is stem cell

starting to tell a story i'll try to draw some semblance of a trend line. really just to illustrate how we really have kind of stretched to the upper end of this band a lot of folks would basically say, this is the bottom part of this channel that we've be in for a while. it wouldn't be too surprising when you look at it like this to see the market curling lower and give back some of those gains. we had basically a full month without a proper pullback. in this context, not that big a deal i wanted to take a look at the u.s. market, again, some international indexes as well. this is the s&p 500 just today compared to the all-country world ins index excluding the u.s. basically everything but the united states as well as the emerging markets and we have some outperformance today by the non-u.s. indexes. now, of course, the data was good in china and europe u.s. data was the one that surprised to the downside. i like to look at the same relationship, these three assets from august 11th that was the low from the late summer sell-off.

and what you see is the rest of the world outperformed for much of this period, but now it's basically a dead heat. so you see everything up between 6 to 7%. the rest of the world has kind of come back as the u.s. has essentially sort of caught up by not going down as much in the last few weeks a lot of people said, hey, it's a global rally that's why you can believe it. it's a little bit less of a global rally right now, but i think you have to give the rest of the world markets some room here, because they have come off very dramatically from their lows, guys >> another key factor to watch from here is whether or not that worsening construction and manufacturing data is just confined to those areas. if you have it spreading out to different parts of the economy, that would be more of a concern. >> i think part of the premise of the rebound in the cyclical sectors is that the u.s. manufacturing picture was also supposed to be bottoming so today's numbers said, hey, that's not really happening on

time but i like to look at the fact that the tech stocks have been leading the way lower. you had the nasdaq underperforming today. that suggests this is a profit-taking move and not in direct response to new economic fierce coming out of thatism number >> now 39 minutes before the bell and the dow is off 206 points, 0.75%. the s&p is following suit, down 0.7% after the break, analysts say they're getting more bullish on cigarette companies after the crackdown on vaping. which name they say to buy now and later, goldman sachs could be on the verge of a change, but some shareholders 'lexai disappointe d. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group.

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36 minutes until the close time now to get to the word on the street bank of america downgrading deere to underperforming with lowering its price target to $150 a share from $175 the firm cites disappointing earnings outlook and thinks the set-up on agriculture into next year is very challenging and citigroup has a note on tobacco stocks, upgrading altria to buy, cutting phillip morris to neutral firm says the disruption in the tobacco thesis looks hard to sustainable, as vaping has seemed to stop growing in the

u.s. >> and roku sinking, morgan stanley saying it's all priced in morgan stanley says while roku continues to execute a sound strategy, revenue and growth profit could slow meaningfully in 2020. revenue growth in particular focused and on and margins -- not sure about the wording there, my apologies. but this is a downgrade in ratings, but an upgrade in price target, which screams, they're weak and being weak. better late than never, but you've got to call them out when that's the case. they talk about an e.d. to sales margin three times that of netflix's. and the fact that i just said that gross margin and margin kind of justified that for a period, but though slow it muts it more in focus and that's the reason for their downgrade >> roku is pure momentum either direction. it's hard to buy or sell the stock based on a valuation call. it's overvalued, so to speak but going forward, you look at it like, when people -- the

issue in a sell-off today it's like, is it at a attractive valuation? they don't have much in the way of earnings to speak of. where does the support come in you have to look to the charts here but these kind of stocks are -- when they go up, they go up like crazy as roku did, but when they go down, they don't seem to have much of a bottom >> down 14% on the day is this a good entry point for you >> i think roku has an interesting product. but it's not a name we're involved in and i would rather stick with some of the more established players in streaming, like, say, a disney >> roku up 350% year-to-date >> we've got 34 minutes left of the session. the dow is down 241 points we're slipping back towards the session slows. coming up, polls looking at a 5g play and apple gearing up for an event next hour here in new york city focused on its favorite apps and games of 2019

we'll preview what to expect in today's market zone. as we head to break, here's a check on bonds treasury yields getting a boost to start the month the ten-year currently yielding about 1.83%. "closing bell" will be right back

welcome back to the "closing bell." we've got 30 minutes left in the session. as you can see, quite a lot of selling, though putting in perspective we had a 3.5% increase for the month of november down a full percent for the nasdaq as we stand >> here are the three things driving the action u.s. construction spending unexpectedly fell in november, raising concerns yet again about the strength of the u.s. economy. president trump announced surprise tariffs on steel and aluminum imports from brazil and argentina. and speaking of trade, the president declined to provide more details on the negotiations with china he says, quote, we'll see what happens. time now for a cnbc news update with sue herrera. hi, sue. >> hello, wilf hello, everybody here's what's happening at this

hour a developing story out of the uk british police launching a murder investigation into a car crash that killed a 12-year-old boy. but that car also struck children near a high school in essex northeast of london. five other people were hurt. a nor'easter is intensifying in the northeast this hour it's expected to dump up to a foot snand a half of snow from pennsylvania to maine. the storm is snarling air traffic around the country flight aware now reporting about 650 flights in and out of the u.s. have been canceled so far today. almost 3,800 are delayed senator cory booker officially filing for south carolina's democratic presidential primary he's been trailing in the polls. the contest is on saturday, february 29th. and michigan is now the first midwestern state to permit recreational marijuana sales anyone 21 years and older can now buy weed you are up to date that's the news update this hour contessa, back to you. >> sue, thank you for that let's send it over to mike

santoli for the second installment of the market dashboard. >> contessa, we're tracking the slope of earnings forecast it's pretty steep on a typical basis and probably will be next year as well this chart of 2020 earnings forecast for the s&p 500 coming out of credit suisse, it shows you what's happened so far to the estimates for next year. they've come down from about 12% to around, let's say, 9% right now. now, the rest of this chart shows that historically, if it follows the path it typically does, it's going to continue going down for several months and probably settle around 4% growth now, that would be 4% growth on top of minimal growth right now. this has been the decline in the past few months of 2019 earnings forecast the question is, can the market support the current valuations, if, indeed, we do have this degradation of private expectations going into next year 4% growth, already at a relatively high forward multiple for the s&p 500 would probably mean interstates would have to stay where we are.

we'll have to see no prospect of frustration. but it would not be out of the realm to see the stock market remain pretty well supported even small growth in profits, you might privilege the growth stocks, but this in itself doesn't mean that the market is mispriced right now for what we might expect and i should point out, nothing says we're going to follow this path exactly there actually are a couple of strategists suggesting that the numbers maybe for the second half of next year might even be a little bit low but of course, that all remains to be seen >> mike, as recently as march of this year, people still thought we were going to have double-digit earnings growth for next year. was part of that based on the expectation that 2019 would be a bit lower than it's turned out or all based on -- >> no, you can see at that point, we were thinking 2019 was going to be a little bit higher i think it's a fairly standard plug factor that the sell side kind of operates under you put in roughly 10% for a forward-going year

gdp was probably supposed to be higher than we now think it was going to be, as well i don't think it's that unusual for the street to be chronically overoptimistic, the further out you look in this case, 12% down to 4% does change the equation in terms ofwhat the market is currently valued for >> mike, thanks very much for that goldman sachs could be on the verge of a major shift in the way it sets financial targets according to a report in the financial terms. the wall street firm will avoid setting strict targets opting instead for longer term through the cycle goals. the ft says part of the investor day presentation will be geared at highlighting the bank's core wall street businesses, including new funds focused on capital and real estate while taking attention away from goldman's consumer banking initiatives which could take longer to take off i think this is a really interesting article. what is unquestionably true is the importance of their van

investor day, relative to all other typical annual investor days this is a really, really big one for them they've dla delelayed it alreadd share prices will react. other banks' recent investor days as to trying to guess ahead of the investor day exactly what they're going to announce, i'm not sure how easy that is to do. but long-term, short-term targets, they're going to be absolutely key for this stock going forward. >> obviously, it's going to be an important investor meeting, because we're talking about months in advance. >> it's been delayed a number of times. new ceo, new management team >> they've had a lot of transition i think goldman's a stock that we like, you just mentioned before that it's lagged its peers year-to-date analysts are generally negative on the stock versus positive the -- there's more sales and holds than there are buys, i believe. and the valuation is pretty attractive compared to its peers. the consumer side of the

business, you basically have a cheaper stock than the rest of its peers. and you have almost a free call option on the potential success of apple, the apple card, or the marcus consumer unit so i think it presents a very nice opportunity i think for investors focused on the long-term and a name we do like and we do own. >> an interesting part of the article about wlorondering whetr they're trying to push the focus on to its newest foray into private equity and expanding the investing and lending business, that will be quite interesting as opposed to necessarily the focus on consumer. but we'll see. >> the consumer is years down the road before that's going to impact the bottom line you want to focus on more of what the bread and butter part of the business is right now >> by the way, next week, tuesday and wednesday, for the next big update on all of the banks, as they go into the new year, goldman sachs financial services conference will be the exclusive media presence at it and hear from a big slew of ceos

and executive leaders, including someone senior from goldman sachs. a little bit of preview ahead of their own investor day in january. >> we have 25 minutes left of the session. down 0.8 for the dow, a full percent for the nasdaq and the russell. we've got your last chance trade coming up. >> plus, we'll hear from someone who sees a distressing sign on wall street for investors. i'll give you more details later on in "closing bell. ♪ ♪ ♪ ♪

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welcome back time for your last chance trade. paul, what have you got? >> this is going into the next year and years after that, for that matter, two biggest themes in technology are 5g and 3-d sensing, i think two very big themes. and one stock that really is positioned well in both technologies is viavi. it was spun out of jdsu. that was one of the darlings of

the dot co.com boom and bust it was spun out in 2015. and on the 5g, they were leaders on the testing of 5g systems and they have made some acquisitions now as these 5g systems are deployed, they'll have more of revenue stream in that business there. and so, that's very -- that's years -- next year's big and the years after that, once those systems come out in the field. the second on the 3-d sensing is just like on your iphone, when you look at your iphone and unlocks your iphone. the next model of the iphone is potentially going to have two. so a front and forward-facing facial recognition that's just going to double the amount of filters they put in. >> and viavi makes those for the iphone >> there's competition in the chips, but they make the filters involved and they pretty much own the space. and just not even on the phones, but in the automotive sector, in

the car going down, it's already starting with higher-end models, the sensing of the driver, whether the driver is getting tired or -- >> so lots of other applications >> even in the exterior. once 5g comes in, these technologies are going to take off and you have these autonomous driving and that's another application their involved in. >> thank you for that. so we have some news on trade. let's get to washington, d.c kayla tausche has more details what are you learning? >> republican senator chuck grassley who chairs the finance committee who has trade oversight has just made some comments on the senate floor about the narrowing window to pass the new nafta this year listen >> if a deal cannot be reached by the end of this week, i do not see how the u.s. mca can be ratified in the year we're in. >> that is increasingly becoming the conventional wisdom here in washington there are just eight legislative days left this year on capitol hill and here's what has to happen for usmca to actually be passed.

first, you have to have a handshake between the house democrats and ustr then mexico and canada will have to agree to some edits that the white house makes to the deal. then the white house will send the bill to the capitol which triggers a countdown to a vote and leader pelosi and mcconnell will have to sponsor those votes. that's a lot to happen with government funding expiring and a government impeachment inquiry growing by the day a lot to get done and you can see why senator grassley was potentially pessimistic there with how much has to be done and how little time there is >> kayla, thank you very much for that update. the market not really moving off the back of it we're still down 200 or so points on the dow, about 0.7, 0.8% nasdaq and russell down just shy of a percent here coming up, we will go inside the market zone, thinterrupted coverage of e last minutes of trading. we're back in a couple ging? prevagen is the number one pharmacist-recommended

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and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. we have 13 minutes left in the trading day. we're now in the closing bell market zone, commercial free coverage of all of the action as we head into the close >> cnbc's senior markets commentator mike santoli is here to break down these crucial moments of the trading day and we have bespoke's paul hickey with us, as well. roku, one of the biggest percentage decliners on wall street today julia boorstin has those details. julia? >> well, contessa, morgan stanley downgrading roku to underweight from in line that sending the stock plummeting, down about 14%, though it's down almost 15%. it's worth noting the stock is

still up about 350% year-to-date morgan stanley writing, quote, we believe there are risks to growth expectations, not reflected in current valuation levels specifically, we think revenue and gross profit growth may slow meaningfully in 2020 but it's worth noting, overall, wall street is still bullish on roku according to fact set, there are 13 buy ratings, two holds, and three sales. guys, back to you. >> julia, thank you so much for that we discussed this one a little bit earlier. if you read through the note the bit where i have read a few notes over the last year, it's the sales of the hardware as opposed to the advertising growth, which is the more sexy bit, the latter part that people tend to pay up for in other bullish notes. >> that's for sure the real takeaway is when you have a valuation on a stock like this that's addressing this very large fast-growing area, it's -- the valuation is incredibly sensitive to slight changes in the pacing on how long it's

going to take to get big if you say it's going to slow down a little bit on this business line or that, that's the kind of reaction you get >> but when you look at where roku has room to grow, do you see the advertising part of this being a significant piece of the action >> yeah, i think down the road, that's an avenue they can really exploit here and to wilf's point. and the whole streaming. it's still such in flux now, the whole sector and i think there's a lot of uncertainty. so to even say, to model out, you know, any sort of financial targets four or five years from now, nobody knows how it's going to play out at this point. >> another reminder, downgraded the rating, and upgraded their price target to assign that they were late to the recent run-up, as opposed to necessarily forecasting, the largest online shopping day of the full year is in full swing and retailers expected to rake in a record-breaking $9.5 billion but some investors are betting there will be some losers this holiday season, according to data from s3 partners. there are twice the number of

short positions in the spider etf. short sellers are targeting brick and mortar stores, waging over $7 billion against retailers like macy's, kohl's, and nordstrom. again, to hear that there's a lot of short positions in some of these stocks isn't that much of a surprise. it's kind of already factored in, one would argue. >> i think a lot of hedge funds, a lot of traders think of them as structural shorts this is not a call about the consumer of the shopping season right now. it's really about just badly positioned companies for the long-term. it doesn't mean they're all going to be right or that they're not going to have massive rallies that are going to make their short positions painful for a while, but i don't think it's really about a cyclically sensitive bet >> macau saw gaming revenues drop in november by 8.5%, and that slightly beat expectations that were lower in part because of sluggish vip visitation, hong kong protests, crackdown on junkets and the slowing chinese economy. it is the second straight month of declines, and stifel is

warning that december is likely to be the third against a top 17% comp from last year. visa restrictions around macau's 20th anniversary are also due to kick in in december. stifel expect the declines this month between 10 and 12%, as you can see. wynn is down a percent on the day, las vegas sands, roughly flat mgm is flat as well. las vegas sands is the one that stifel that among others wants to watch because of their exposure to the mass market there. where vip continues to be under pressure and in fact, consensus on the street next year calls for vip to decline 15% and mass market to grow 10%. so we're seeing this big switch in las vegas sands has more exposure to the mass market ther there. >> i was going to say, are the declines in visitation to hong kong fully factored in into the

expectations >> what you heard from the company is that, hey, the airport stayed open, people were still coming here. but we did see the vip numbers, visitation numbers dampen somewhat and that there's been concern. if you look at front-page story in the "wall street journal" about numbers in disneyland hong kong, it's clear that the hong kong protests are having an impact on leisure travel >> wynn down about a percent or so today chinese telecom company thatway outgrowing its reliance on u.s. tech, despite u.s. companies receiving permission from washington to resume doing business with huawei last month. the company's latest smartphone contained no u.s.-made parts, according to an analysis known by ubs huawei's older phone models that traditionally relayed on u.s. chipmakers to supply parts for its phones its latest model replace soms u.s.-made chips with parts from dutch chipmaker, which is down today, about 0.6%.

clearly the debate on trade has been, how quickly can they shift their production huawei showing they can be nimble in the opposite direction. >> the longer this takes to play out, the longer companies on both sides will make adjustments to their manufacturing processes. so out certainly helps -- it may be hurting china that u.s. manufacturers are moving capacity to other companies. but at the same time, it's hurting u.s. semicompanies where china has to make alternate plans for their chips. it works both ways and goes to show why this uncertainty puts an overall weight on things, the market and the economy overall and isn't god for anybody. >> u.s. semis is a sector. what do you make of the recent price performance. >> semis are involved in every aspect of technology and even nontech products that you use. and they've led every sell-off

over the last several years and the semis peaked on a relative basis on november 8th, i believe. and have been lagging for the last couple of weeks now there's a lot of positives to like about the market, but this is one thing where the market is telling us the semis are laggin lagging. thing to monitor and that would be a worry. >> oil is one of the few bright spots on wall street today and frank collin has more details there. >> big day for oil compared to the broader market wti crude up a percent and a half two factors are boosting oil prices "the wall street journal" reporting that saudi arabia will push to extend output cuts through mid2020. and further evidence of improving economic conditions in

china. factor data surprise to the upside the move lifting oil names like exxon and conocophillips all up. still, despite these gains today, the energy sector is barely trading in the green for the year back over to you >> frank, thanks so much for that mike, i guess, nice little jump today, 1.4 in wti. brent itself was lower and it comes off the back of a slide last week in oil prices. >> it does >> either way, whether oil has been strong or weak, energy has remained unbelievably lackluster through the years. it's been hard to trust any rallies in the energy stocks you can basically say, it's a maximum contrarian point they're underowned, neglected, nobody likes them. but they don't act all that well and there's this longer term overhang, that lower oil intensity of the overall economy is not helping >> how do you see the broader energy sector? >> it's hard, every time you try to take a stand and buy names, it ends up backfiring on investors. but broader term, weaker energy is -- keeps inflation levels down, and for the broader

market, that is a great thing to see. >> mike, in terms of broader markets to date, clearly we have seen a nice move higher in the yield curves hasn't inspired much performance from the risk-on sectors like financials >> it hasn't although in the morning, it looked like that's exactly the way it was going to go the yields are down off the highs of the day, but not much it's interesting that yields have held up and it peaks to the idea that the bond market is not taking the ism number as a calling off of the recovery story for industrial growth. i think you can basically say, the backdrop is there now. >> we talked about goldman earlier, what about the broader space? >> we like financials, but the yields and stocks aren't moving the way they typically do.

it's a new month we had a very strong november in the broader equity positions >> what about market internals >> not all that bad considering the headline losses in the index. if you look at the advancing and declining, 800 up, 2,100 down. clearly negative, but not so lopside lopsided earlier today, it was unusually strong in terms of the distribution and more new highs than lows part of this is, you go back 12 months and you were right in the middle of that december plunge off little bit of a tailwind to the 52-week clock right there. and i want to point out the volatility index, the vix, which really had deflated below 12 by the middle of l.a.ast week it seems like this trade deadline is going to use the demand for some downside

protection see it coming off though lows. it starts to suggest, maybe we're in for some rougher footing. >> i think you said last week, 1 14 >> i like a range. >> at the moment, by the way, we should mention,down to fresh session lows the dow down 260 s&p just above at session lows still down 0.8% for both of thoepz e those indices. let's get to rick santelli for an update bonds. >> hey, rick >> hi, wilf. if you look at a november 1st start to two-year, you can see all the information important to date we are now at 160. down a basis points on twos. look at the right side it's moving to the upside. it's now up four basis points at 182. the curve is steep in 10s to 2s. five basis points today, despite weak ism this morning. and the dollar index, a 24-hour chart pretty much shows you everything you need to know.

at one point, it was down almost a full half cent, giving up last week's rally and bertha, the ism certainly pulled the rug out of all three stock index, including in nasdaq >> we've seen a broad pullback amazon, among the worst of the f.a.a.n.g. performers today. although, raymond james is fairly bullish, saying that according to edison trends data, amazon spend was up 49% on thursday and friday last week. of course, walmart was up about 53%. meantime, ulta today, shaking up a piper jaffrey price target cut. ulta had really, really steep promotions including on kylie cosmetics of about 40% over to bob. >> ism new order index implied some weakness in the industrial names, capital spending a little bit weaker than anticipated. saw industrial names, particularly aerospace names like northrop grumman were on the weak side, closing on the

lows steel stocks like ak steel, u.s. steel, cleveland cliff cliffs, y all rallied on these renewed steel tariffs on brazil and argentina. there's the closing bell we're closing right at the lows of the day the dow jones industrial average down 264 points. the s&p just off the early morning lows, down 26. welcome to the "closing bell." i'm wilfred frost. >> and i'm contessa brewer >> let's check in on where the markets go bob just mentioned session lows. at the end of the day, s&p down 0.9% dow down a little bit more than that down 260 points or so. the nasdaq and the russell were both down more than 1% in terms of sectors, consumer staples and energy, just eking out slight gains, whereas information, technology, industrials, and real estate was all down more than 1%. >> joining us to talk about the

market day, paul hickey, the cofounder of bespoke investment group. still with us, along with mark lehman, the jmp securities president. nice to see you today, mark. let's start with you does this performance of the markets, this first day of december, have anything to predict here about the coming month? >> well, you get a little queasy remembering last december, which was a tough time in the marketplace. but i think it's a far different backdrop i think after what a big rally we've had through november and december, it's not too surprising we have some tech stocks that are reporting this week, which will give you some tone. but i expect the market to shake this off and continue its accent, albeit with difficult days ahead, but more higher than lower. >> mike, do we feel like there's been a significant change in positioning over the course of the last few weeks or months m. >> i think over the last few weeks, for sure. you go back to september, october, it's pretty clear that investors, professional individuals were very underexposed to stocks, especially if they were going to

be going up. there was a chase, a rebuilding of positions in stocks i think you kind of lost that along the way. starting in the last couple of weeks, sentiment and positioning started to get more aggressive i think it became very much consensus that we certainly avoided near-term recession. the fed was out of the way, you can tick off the list of things that were going well including an inflection point for the better in the global economy. and that's why today's data was just a slight challenge to that story in terms of u.s. manufacturing, having a shortfall in november. i don't think it changes the overall picture, but it does tell you that a lot of good got priced in over the 10% run from august >> are we in a pretty steady period here, paul or is it going to take something more significant to move the market in either direction. >> earnings season is behind us. we may have some economic data that comes up, was overall, it's generally a quiet time of the year and the trend that's been in place usually continues to follow through, throughout the remainder of the year.

as far as sentiment is concerned, mike's exactly right, investors were downright negatively, professionally and individually heading into the new highs we saw last month. but they've come to turn around. but as far as valuations are concerne concerned, tech is trading in the 99.6th percentile, so basically it hasn't been more expensive. so that's an area where it may be a little bit too much enthusiasm where it's much more reasonable. >> it wouldn't seem as if coming into december, if the market continued to melt up by 3%, if the market were flat or gained back 3%, it wouldn't really change the overall story of the year all that much i think that's why it's a little bit tricky you're playing off this idea that you have seasonal tail winds and valuations are rich, but not crazy. but within that 3% cone, it doesn't seem as if you would

change the conclusion that it was a pretty good year it seems like the bull market continues. but we have to get it proven by some firming economic conditions >> mike, to what extent does the data we saw today stronger chinese manufacturing than expected europe sleeightly better than expected the u.s. also below 50 to what extent is that an argument to money to work overseas rather than domestically >> i would support that idea for sure the u.s. has been kind of the quality growth safe alternative in this world that was struggling to grow they also had the dollar down pretty appreciablytoday after that economic data down 0.4%. that gave a short-term lift. i don't know that you can really make a persuasive argument right now that the rest of the world the going to race ahead and the u.s. is not going to also pick up speed to me, it's not that clear a case of one being very much more attractive than the other.

>> and the nasdaq underperformed the major indices, closing more than 1% lower and tech stocks dragged on the entire market paul's been looking at the f.a.a.n.g. names, including microsoft and showing how it's made up a large portion of the gains so far in the s&p 3 we just talked a little bit about the valuations here. what's your point in terms of whether next year we can have gains. these guys need to be involved again? >> it would certainly help they're going to have toat least be market performers, because they've been so strong apple and microsoft combined have a bigger market cap than the russell 2000, depending on the day. these two stocks account for a lot of the market and they're over 8% of the market cap for the s&p 500. so there are a lot to contend with but, you know, again, their valuations aren't absurd we're not looking at -- this isn't a repeat of 1999, where we had intel trading over 70 times

earnings cisco trading at over 100 times earnings and and jdsu trading at who knows what i think these names, we need to see companies and sectors pick up the slack, which as i was saying earliering wing financials are an area, they're a big sector >> mark, what's your take in terms of the broader tech valuations and momentum we've seen here today? >> i mean, clearly, the leaders of the market have been the names that you just mentioned. i'm not sure that's going to play out in 2020 we have also seen elizabeth warren's numbers going down a little bit and less andle less f that pricing with news out of the democrats. united health and five biotech

stocks up 100% in the last month. and the biotech index is up, we're almost triple the overall market since october 1st there's a stealth bear market there too, and that's on fundamentals that could carry us into 2020. let's not ignore that and assume that the f.a.a.n.g. is the only component to take this market higher next year >> bob, what are you seeing? >> the weak ism numbers, and the big cap tech names that have had the biggest gains so far this year if you were looking at the five biggest stocks in the s&p 500, amazon, microsoft, apple, you can throw in google and facebook, those are 15% of the market cap of the s&p 500, all were down rather noticeably today between 1 and 2% when those are five down that match, the whole market will be down and you have the high beta names

that will also go down on weak economic numbers not the biggest ones, but your netflix, your visas, nvidia, broadcom, semiconductor names, all big high beta names. they were all weak today the bottom line, manufacturing, a small part of the u.s. economy, the u.s. consumer still very strong. back to you. >> is that something that you think a trade deal could change the scenario for, paul >> i mean, a trade deal will change a lot of the scenarios. and i think it will improve the backdrop overall i think the overall tone is, we don't see a recession coming and the fed is on hold if not on vacation for at least the six months in that environment, when you have an economy that's growing, stocks usually go up i want to say one other thing. i want to say congratulations to the nurishell high school football team, they won the state championships and lost hair head coach the week before they started

>> there we go congrats indeed to them. and our thanks to paul and to mark for joining us today here in the market zone still ahead here on "closing bell," apple getting set to host an event honoring this year's most favorite apps and games we'll discuss whether apple's big bet onerceis svis paying off when we return in 90 seconds. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.

apple holding an event right now celebrating what it calls its favorite apps and games of

2019 it comes as the company shifts further into services with its recent launches of appletv and apple arkindicatedarindicated let's bring in ross gerber, apple shareholder. so what do you think here? are you excited about a best of apps event >> i think forthe important thi to note is that only apple can get away with holding p ining a event in new york. their app store is an incredible mote fincredible moat for that company. >> when you're looking at apps as part of apple's bottom line, does it matter to you that they are continuing to celebrate them and lift them up and put them on a big platform under a global spotlight? >> i think they need to do this, because it's a monopoly that's choosing a huge tariff to do business through apple, so they

need to justify that with the app developers and this isn't just about placating them this is very common in business. you give out lots of awards to people people love awards they can market that they've got awards but it's really just a way to try to show the developers, like, hey, we're doi we aren't really good at making content ourselves. >> is that likely to make a difference to the developers who are forking over those big fees? >> no, i think they're very unhappy with paying 30%. it's a very high price to pay and apple has monopoly and the government is looking at it. apple is trying to reinvest in its artists by having live streaming events in music but also in gaming and other apps and try to show the developers, hey, here's how we're spending money to help yo and by being on our ecosystem, here's the value. i get what apple's doing >> what do you think so far of the new services the gaming app and the music streaming and you've got apple plus tv now trying to shell out

a new programming, original programming. >> i mean, this is what people have their phones for, use apps, play games, and watch tv apple is trying to fill in all of those boxes for you you look at other app stores, particularly in games, you see those fees dropping. themmic sto iepic store is drops fees >> does that matter if people are using their iphones and using their iphones to get on to these platform requests. >> i think it does matter. once you have a significant investment in apps, your chances of switching to android is much, much lower their highest revenue line is in-app purchases in games. now they're starting to do paid developers directly for their apple arcade subscription service, which creates another virtuous cycle for them to make developers happy and customers happy. >> if we snapshot five years ago, ten years ago, the advantage that the iphone had of having the best ecosystem system that people got hooked to once they used it once, the idea being that they would never

change from being on an iphone is that still a strong a pull as it used to be? >> i think so, but i think the strongest piece of that ecosystem is imessage. i think if you are a normal person, the stats say that normal people download zero apps a month. once you've got your set of apps, most are free -- >> imessage is pretty basic. >> it's incredibly sticky in the united states, if you look at a country like china, there's actually a lot more volatility in people switching platforms. here, you want those blue bubbles and you don't leave. that's apple's big moat. the apps are what makes the platform rich, but what keeps people on the platform is almost certainly imessage in the united states >> and yet you think all of these new offerings are kind of a fail >> i think apple's offerings are a fail you know, they had basically nobody sign up for news. i think nobody signed up for arcade, appletv shows are weak so, you know, the bottom line is that apple needs these outside developers my kids are downloading apps

like nba 2k from take two and playing these and neal's right these in-app purchases are driving so much of their sales spop they want to keep that ecosystem robust with lots of developers and keep those developers happy, because he's right, you know, if you have a green bubble instead of a blue bubble on your phone like my friends wouldn't even talk to you. so it's like, you know, that ecosystem is apple's bread and butter >> or you just use whatsapp, which is -- >> no -- but who's using that? >> everyone outside of america roz, to what extent does it not matter, though, that they do have these outside developers coming to them and they do take 20 to 30% of those revenues. so even if the innovation is coming from someone else, the fact that today's launch really shows, they're still bringing the best -- they can still offer the best and still take a margin from it. >> and that's why we own apple and are not selling apple. but if you notice, they're selling a lot of phones and a lot of headsets and that's what's driving the stock

not per se services. >> you know, i agree with what you said about how only apple could kind of pull this off. but i wonder if there's a little bit of an expiration date on this in other words, yes, we're in the habit of anytime apple says get together for an event, people show up because of the iphone busiezz ad the idea you'll see something new. do you think this will be something annually that people say, sure, let's go for it >> i think ross is correct in saying that people like awards they were not making a big deal out of this. this event leaked a little bit early and there's a lot of very happy app developers in new york city who are going to go out and have some drinks and be happy about their experience that flywheel of the most innovative stuff happens on the iphone is something they have to keep up. whether that has an immediate impact on their sales or their bottom line, i think is pretty hazy but if you don't have developers pushing the boundary of what that camera can do, if you don't have game developers pushing the boundary of what the hardware

can do, eventually the software does commoditize >> we have to wait until tomorrow to find out who won >> hopefully there's an open bar. >> hooray for the people who are there. >> i'm sure. >> right ross, thank you very much. neil, thank you, as well >> we're going to do some breaking news on wells fargo that came out during that interview. they have ape appoipointed thei president and ceo. scott powell will report directly to charlie scharf, the new ceo who took the reins just a few weeks ago. powell most recently was ceo of s santandere holdings usa. so charlie scharf is shuffling the pack a little bit underneath him. the over most high-profile appointment he made was in the government and public affairs department, where they appointed mr. daly, a former member of

barack obama and and it will be public policy and regulatory related to begin with and i guess mr. powell coming in to run the bank in the meantime. the only other point i would add on this, not seeing the stock really move off the back of it, a bit of a blow to mary mack, who was head of consumer and seen as a potential successor when tim sloan was in place. therefore, mary mack, you would have thought might have got this promotion. she hasn't got it. we'll have to see what happens there. but she still has a significantly powerful position, nonetheless. wells fargo stock up about 0.1% after-hours trade. up next, 2020 targets, wall street's s&p forecasts for next year are coming in and their expectations could surprise you. mike will explain that with the telestrator. and later, jack dorsey's leaving on a jet plane the twitter and square exec is

gearing up for a big move to africa we'll discuss what that could mean for his companies and for toto when "closing bl" tus.el

how's this for a kickoff, the s&p posted its biggest decline in nearly two months and the nasdaq and russell 2000 were off by more than a percent on the day as well. >> let's get over to mike for the third installment of today's dashboard. mike >> vision is always limited looking out a year in terms of what's happening with the markets. but this is the season where strategists have to put out a forecast."the wall street journt this together. these are some of the targets from various investment banks right now. you see it at the moment from the major firms topping out around 3,400 for the s&p 3 i do see some other firms with maybe a 35 out there but also, you have at least one firm or a couple of firms saying essentially, we're already overshot where we might be last year a lot in the middle. just as a sentiment read this is relatively constructive. you don't see a lot of outright aggressive establibullishness o

there. 3,400 is less than a 10% gain from here. so normally, i think, you're going to have some estimates coming in there that are going to be at least for a 15% gain. but i did like this kind of selection of methods from lori calvasina saying, if you looked at what the target would be if y we got to a normal level or typical level from various gauges of valuation, like dividend yield, 3706 basically tells you, if we were to normalize dividend yield relative to err things like bond yield. a strong gdp scenario gets you to, i think that's supposed to be 3433, not 4433. but what it basically tells you it's always a mosaic of various factors. she gets to a 3350 forecast. that's 7% or something like that, roughly, in the historical change i think that it makes sense to think of things as a kind of spectrum of probabilities. lots of ways to cut it and nobody knows exactly what's

going to happen, guys. >> mike, this is -- i like the lori analysis as well. you are reminded, the most bullish dividend yield, relative to where bond yields are it brings you back to that point of, there is no alternative. if you focus on that, you can be very bullish on stocks >> this market has been relentlessly in search of cash flows, cash yield. if you look at buy back plus dividend yield, u.s. stocks, big cap stocks are basically the destination. we'll see if that lasts. >> mike, thank well, president trump has just sent out a tweet blaming fed chairman jay powell for the weak ism data. he tweeted, manufacturers are being held back by the strong dollar, which is being propped but up by the ridiculous policies of the federal reserve, which has called interest rates and quantitative tightening wrong from the first days of jay powell >> interesting appoint, of course, on the dollar. 97.8 on the dollar index, down 0.4% today and not at the highs of the year, mike

it's not been a weak period, of course, for the dollar, but still not the highs. and some comments earlier in terms of the new steel tariffs on argentina of course, their currency's a hell of a lot weaker it's not intentional when it comes with all sorts of aggressive negative baggage. but it's a theme we've seen of some time. and the important point we'd make is whether the fed has been influenced by this type of tweeting or not. the fed has pivoted significantly? and even more recently, jay powell emphasizing the undershoot of the fed's inflation target as a reason to stay more easing those are the things you would say if you were trying to build a rationale for remaining more dovish than you otherwise would or have been that being said, the idea that u.s. exporters are very depend on the dollar price of our exports is an antiquated idea. >> up next, home prices on the rise we'll hear from the ceo of one

of the country's bgeigst mortgage lenders about the state of the housing market, ahead on "closing bell. gold!

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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. let's get a cnbc news update from sue herrera >> here's what's happening at this hour. flight cancellations are climbing as winter weather slams into the northeast flight aware is now reporting more than 700 flights are canceled at u.s. airports and almost 4,500 flights are delayed. heavier bands of snow are expected to move into the new york city area right around rush

hour faa chief steve dixon will testify before a house panel next week on his agency's review of the grounded boeing 737 max it was involved in two fatal crashes in five months the hearing takes place on wednesday, december 11th for the first time in almost a decade, the supreme court is considering whether to dismiss a gun rights case. the case involves a dispute over restrictions on transporting licensed, locked, and unloaded guns outside of new york city accomplishme limits it could have major implications for gun rights nationwide. and soccer player megan rapinoe winning soccer's most prestigious award today. the woman's ballon d'or award. she led the u.s. to a record win in france. and england international's lucy

brauns came in second. >> that is good to know. we didn't even come in second in the world cup. i think we came third or fourth. >> and she was a fantastic player >> sue, thanks so much >> you got it. >> rubbing it in there no, you weren't. >> i know, i know. sue, thank you housing stocks taking a leg lower today with the home construction etf falling for the third straight day however, recent housing data beat expectations with october new home sales up more than 31% from one year ago and total mortgage application volume up 153% from a year ago joining us now, san jeep da. so good to see you talk to us about the pace of growth you guys have seen personally and where you think it's coming from relative to the traditional players. >> well, staggering growth in the last quarter i think q3 to q2, we grew about

70%. just to give you a sense of the growth, about six months ago, we do about $3.5 billion worth of mortgages a month and we are now doing $7 billion of mortgages a month. probably will end up doing about $60 billion of mortgages a month in a year. >> i guess i know correlation is not the same thing as causeuation, but you're growing incredibly fast, late in the economic cycle, perhaps at a time when the traditional banks are deciding to pause. they may be making that decision for risk reasons, you might not be taking on more risk, but how do you respond to people who suggest you might be taking a lot of risk late in the cycle. >> actually, it seems like what is actually driving the growth in this cycle so late in the cycle is the fall in interest rates. and so what the fall -- >> but nobody else is growing -- doubling their size like you are. >> well, the non-bank lenders as a category are doing quite well. >> why is that >> because i think that in general, the banks have been more risk averse to mortgages

after sort of what happened during the housing crisis. whereas i think the non-banks are stepping in -- so there is a risk consideration to this even if you're not taking on too much risk, you think the banks are taking on too little risk. >> yes, for example, the fha loan category is a category that banks have completely stepped out of because of the doj risk from many years ago, whereas we find that there are homeowners that have a 5% to 10% eligible -- >> this is not something you are unfamiliar with. you were at city during the peak years to have the financial crisis and you're credited with helping to turn around city during the time when housing and mortgages led to so much trauma for these banks. but when you're looking at the risk that you're willing to take on now to get -- aren't you the fastest growing emergency company in the united states right now? >> in the top 30 >> if you're willing to take on what banks see as too much risk, does that mean you're willing to

look at gig workers who traditionally wouldn't have the applications needed to get a mortgage >> that's part of it, contessa i would say that the banks probably step back a bit too much i think the pendulum swung a little bit too much on one side, and i was in those bank boards, so i understand what was the dialogue at the time non-banks have actually stepped in and have, you're right, partially got sboten into a zon where gig workers, we are very slarn large suppliers of workers who get paid based on restrictive stock units. banks don't lend and there's nothing wrong with that. we find that we are heavily weighted towards the purchase side of the economy. and we are probably amongst the largest lenders in the country in home purchases, as opposed to just refinance >> do you care whether you're doing refis or doing new mortgages? does that matter to your bottom line >> it does

generally speaking, refinancing tends to be extremely interest rate sensitive, so when rates are lower, you get a lot of refinancing. purchase tends to be more linked to the fundamentals of the economy. and what we are seeing in the last quarter, particularly since october, is that purchases has really started picking up and purchase generally tends to have a -- what we call a lower complexity, in other words, it refinances much lesser and is steadier with better margins >> bigger picture question for the industry to round things off. to what extent with all the refinancing that has gone on with rates so low in the last year or so, to what extent refinancing gone on at a fixed rate versus a floating rate? if we do see rates spike again, will people feel the pressure very quickly or not? >> not so the short answer to your question is that most people refinanced wilfred either to a 15-year or a 30-year because the 30-year, it's at 384 right now. it's a fantastic rate.

most people have switched to a fix. if rates spiked up, it's unlikely that they will get impacted however, there's a staggering fact that the morgan stanley refinancing index, i don't know if you're familiar with it, but it says if rates dropped 25 basis points, there's about 56 to 60% of the people that could refinance again. they're in the money >> sanjiv, thank you so much for joining us still ahead, jack dorsey is making a big move. the twitter and square ceo is moving to africa we'll dig in on the big business impacts this could have for his companies, after the break my parents never taught me anything about managing money.

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jack dorsey certainly boosted the royalty for toto today, one way or another. jack dorsey says he's planning to move to africa for a few months, but what could that mean for the company he leads kate rooney is standing by with a look at how impact square. but first, julia boor ststin wi look at how impact twitter >> the content of africa is responsible for a tiny fraction of both twitter's revenue and

user base. twitter's average user was $15.50 well, average revenue per international user was just a fifth of that. an e-marketer estimates that twitter has over 10 million active monthly users between the middle east and africa that's less than 4% of twitter's total. when he's in africa, dorsey could be as much as 11 hours ahead of twitter san francisco headquarters so more responsibilities could fall on product lead ad chief matt drella. and on regulatory issues that are sure to be heating up ahead of the election. guys, back over to you >> so let's get to kate rooney with how dorsey's move could affect square. >> square's not operating in any african countries right now, but analysts are still excited they say it's the future of payment s they see the move as

forward thinking >> it could be an opportunity for square to respond. there's also potential for bitcoin, which dorsey mentions in the tweet and has personally advocated for. dorsey may need no appoint an interim ceo or ceo for the very least depending on how long he's gone but right now there's no heir apparent for square. guys >> so, first of all, let's take square if you have a population this may be, if it's mostly cash, how would it work that they would be using square in this way >> it's tough to get financial expansion across borders so for square, it's easier to twitter to expand. it's not as easy part of this is crypto so jack dorsey has been a big fan of those are a big opportunity. you can see companies like we

pais and analyst s have said, because they don't use cash, it's a huge opportunity. but there is definitely an uphill battle in terms of expanding and getting some of the infrastructure and some of the payment systems in place to be able to use a credit card, for example. to what extent is dorsey seen by investors crucial? if there was an interim ceo or a ceo that was responsible for the day to day, would that have any effect on this announcement? >> for years, dorsey faced criticism of being the ceo of two publicly traded companies. and then twitter shifted its focus and seemed to be doing better, so that criticism faded away doyers has focused a lot on the

company's earnings calls, on the deep bench of executives there's no one person who's his number two who does everything but they have people in legal and in product and in advertising who are each handling different part of the business so what twitter would likely say, they have this sort of diversified deep bench of executives that is right below dorsey that would all be pitching if he's not immediately reachable 11 hours ahead but it will be interesting to see what more details the company gives, as a this whole plan for him to spend three to six months in africa gets closer >> julia, thank you very much for that kate rooney, thank you, as well. up next, distressed debt could be flashing a warning gnsi for investors and the market we'll discuss, ahead orrowed bils and left a trail of bankruptcy and broken promises. he hasn't changed. i started a tiny investment business, and over 27 years, grew it successfully to 36 billion dollars. i'm tom steyer and i approve this message. i'm running for president because unlike other candidates,

i can go head to head with donald trump on the economy, and expose him fo what he is: a fraud and a failure.

well, it's been a banner year for corporate debt amid a dovish federal reserve and a u.s. economy that just keeps growing. according to a story in the "financial times," the portion of bonds considered distressed is now the highest it's been since 2016 joining us now to discuss this is chris white, the ceo of bond click. chris, to start off, we just had the president tweeting this hour that manufacturers are being held back by the strong dollar, which is being propped up by ridiculous policies of the federal reserve, which is called interest rates and quantitative tightening wrong from the first days of jay powell in your thesis, how important is the fed and the actions the fed takes in terms of what we're seeing in the bond market? >> well, the fed is critical i think that as we're unwrapping

what's happening in this economy, it all kind of links back to the fed and fed policy in terms of how the market's reacting i think this really starts with the policy changes that were put in by the fed and other central banks post the financial crisis. what's interesting about the comments from the president today is that we're hearing two different stories. we're hearing that the u.s. economy has never been better than ever before and we're also hearing that we need to cut rates. now, normally, central banking policy, weapon only cut rates and ease the money supply when we are in a recession or trying to move out of a sluggish period of economic performance. so we can't have both of these things happening at once so it's a little bit confusing as to has the policy been wrong or is the economy not doing as well as what's being reported? >> and how do the fed's actions then take effect in the corporate bond world >> sure. i think that the fed and many of the central banks have taken a policy that was an emergency and now made it a part of what they've been doing for the past decade >> so we're addicted >> i think it even goes beyond

addiction. at this point in time, the way the current corporate bond market looks today, twice the way it was in 2018, with bbb bonds dominating the outstanding bond markets made up of bbb, that's being traced back to the markets put in effect by the bank of england. it's this cheap debt cycle that's allowed companies to get really, really massive >> so as an investor in this sort of space, do you feel like the valuations are unattractive? that the bonds have been bid up too much spreads are also pretty tight, it seems >> i think that the way in which the fed went about this policy probably needs some kpamexamina. the fed decided it would purchase the highest rated debt in the marketplace aaa securities and from sovereign nations. the issue is that that activity has basically pushed down spreads across the credit curve. so now for you and i and to get

a reasonable return or for the investors who watch this show to get a reasonable return, you have to invest in companies that are riskier than your appetite and the worst part is you're not being compensated. >> you think there's a bond bubble >> i think it's quite obviously there's a bubble the fact that there's about $15 trillion in outstanding negative interest rate debt and this is something that we've never seen before in the marketplace. so i think it's quite clear that from an overall performance standpoint, we're seeing a market that is not representing the fundament also of the underlying companies >> chris white, thanks for joining us good to see you. >> a pleasure. up next, musk'day s in court. a rundown of the key things to watch for, coming up flying south for the winter. they never stray from their predetermined path. but this season, a more thrilling journey is calling.

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we're back let's get back to mike for the final installment of dashboard >> installation against tougher consumer conditions, financial conditions come in the form of this wealth cushion that has built up in this economy this is real estate wealth this is net housing. and really not that far above

where we were. and just barely come back. but net worth and it's in blue it has exploded. in the form of public and private equities 90% of all stocks are owned by the top 20% of earners of earning households now look at the consume he spending by percentile of earnings that's right here. they're responsible for just about 40% of all consumer spending so twice as much, twice as -- the representation in the spending column. so therefore, the fate of that wealth of the equity wealth and just exactly how these consumers feel about it is pretty important in driving overall consumer spending. the rest of the economy, of course, distribution is pretty steady in terms of those people, their pace of spending they had the big down draft in the stock market it did seem to have an impact on

retail spending. it shows you the wealth dependcy of some degree of consumer trends. >> that first chart is fascinating. go back to it. i think if you look at that if other parts of the developed world, europe in particular, uk in particular, it wouldn't show that at all. housing is so much more to shortage and house prices. they have exploded higher over the last three or four decades in a way that relatively speaking to stock prices doesn't show that. the other thing, whether or not it comes out a blue or orange line it is actually kind of an argument for why capital gains should be taxed a little bit more >> absolutely. they had such an imbe pact there is a tremendous pile of untaxed wealth out there i think all of the politicians can see that they're trying to get at it. >> mike, thank you >> up next, ice, ice baby.

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tesla's elon musk is set to trial. let's start with auto sales. it's a strong many in terms of auto sales the expectation is to see what the pace of sales is and that's pretty strong. and it really had become a major sales holiday sales holiday. that and it's in october and november and the auto sales. as for tesla and the surrounding

elon musk. and that's the stock at all. i think people are more interested in what kind of drama if anything because he is being taken to court by a british cave diver who says when elon musk tweeted he was a pedo guy, that was defamation immimplying he wa a pedophile. i think a people expected this to be settled by now the gentleman is only speaking -- the british cave diver, he is only seeking $75,000. its not like he's going for huge amount of money here it will be interesting to see with jury selection tomorrow by him, thank you for that >> you have probably heard of baby joda, the character from disney that shows up in analyst notes, taking up more social media attention than presidential candidates

according to data news whip. he is cute enough to eat can you devour a baby yoda frappuccino from starbucks secret menu. know how to make the baby yoeda. yoda. whipped cream, caramel, and then you ghet whi you and this is with disney jumping on the craze and it's gone viral on line. >> very, very and we also know by the way that hasn't disney gone after the social it rags. and they're violating copy writes >> if anyone has got through

cycle, it's seriously sweet. >> life in the nasdaq market site this is "fast money. our trade oer our traders on the market. $10 billion worth of sales getting run off online it is ka-ching for all the retailers. roku hits a roadblock. why analysts just cut the rating on the one story stream being stock. and exxonmobil was one the most valuable company in the united states one analyst is betting on a big come back.