nature's bounty. because you're better off healthy. welcome to choez "closing bell." at the dealta post shares are trading higher will we close above 29,000 for the first time we've got 59 minutes to find out. >> we certainly do good afternoon leng let's have a look at what's driving action it's not just delta numbers. jpmorgan, citi and wells fargo new trade deals with china

expected to be signed tomorrow headlines injecting uncertainty on existing tariffs and after hittinga new all-time high, apple is now the biggest drag on the dow. we'll have much more on why later in the show. we are up 50 points on the dow steve grasso with us for the full hour. steve, today's session yo yoing. the bottom line though is the deal should be signed tomorrow and the rest of it we kind of knew. >> it seems like the market is looking for a reason to sell off. you have bulls that want a better entry point, bears that want to push it down and any headline that allows them to do that, they're going to roll with it's about china today i think it's going to be about earnings coming up if you really look at where we are in the s&p, the 3300 level is pivotal and if you look at earnings, if we fall short, the market will tank and that's a big word

>> tank is a big word. it's a big worry >> when you say where's the market going or where do i think it's going, i think it will be legitimate to say a 7% to a 10% fall from here if earnings come up short, and that would surprise a lot of people and it's a big if. it's where estimates are. >> 7 to 10% is really big. >> think about where we were last year. it was about an earnings recession. that didn't happen so analysts were forced to raise their earnings estimates and did they raise them too high and that's the question that will be answered. >> very high expectations going into this earnings season. let's focus on the other big stories that we are watching today besides what we just talked about kayla has the latest on trade. as new china headlines hit the market, wilfred has a closer look at today's bank earnings and mike santoli joining us with his market dashboard kayla, what's the latest on trade? >> as the u.s. and china prepare to close the book on the first stage of trade talks the market'

focus is what happens to all of those tariffs? the deal will permanently shelf consumer foerked tariffs that would have gone into effect mid-december as for everything else, an administration official tells me there's no agreement on a path forward with regard to tariff reduction. the two sides are planning enforcement check points to make sure china is abiding by the terms of the deal before rolling back any other tariffs the resources say the president's trip to beijing to begin phase two talks is still up in the air as the administration discusses ways tto most effectively position that trip and potential tariff removal ahead of the election, but so far no decisions yet. >> kayla, what was the base case of tariff removal in the first place? i guess it certainly wasn't imminent >> well, certainly as recently as a month ago the administration had said that there would be no discussion of any forthcoming tariff removal until the administration verified that china was actually making good on its terms

we do expect that there would be some sort of regular check-ins but we don't know if those are monthly, quarterly or if the first one wouldn't be until after the election, at which point they would potentially figure out whether any tariffs were justified to be removed then as i mentioned, whenever the president decides to go to beijing, that could potentially be a news event that a tariff removal would be tied to but it's still unclear when exactly that would happen. >> kayla, it just seems like this deal is never really, really done. we keep getting really close thank you for keeping us honest on the headlines as they change. meantime earnings season is fully under way. we mentioned big banks reporting today before the bell. what are some of the main takeaways and what does it tell us about what's to come? >> the top three takeaways from this morning, number one, december much stronger than expecte expected number two, pressures from low rates continue to have less impact than feared number three, wells fargo

disappoints again. on the first one, jpmorgan's revenue is 3.4 billion expected to an expectation of 2.6 goldman sachs is better than morgan stanley here's jamie diamond talking about the uptick in trade activi activity. >> i don't think it's going to completely go away you still have potential ongoing trade issues with china and europe and stuff like that i think because that sentiment got better, trading got better, how long that continues, we don't know >> net interest margins for all three banks continue to hold up better than feared and loan growth remains solid meaning interest numbers overall did not disappoi disappoint

citi hit 12.1% for 2019 compared to jpmorgan's 19% for the full year last year wells fargo missed expectations largely due to higher expenses the first ceo earning call was fairly downbeat. tomorrow bank of america and goldman sachs. >> expectations really weren't high for wells fargo and they still disappointed. >> they did. and i'd say some of the comments which we'll dive into coming up were very downbeat from the new ceo. the big debate today is how much is that new ceo kitchen sinking it versus fundamentals which is going to take a long time to turn around. the focus is on a little bit of a silver lining that it was mainly on the expense side rather than the revenue side but the fee income was a little soft the other point on the value occasi ation, yes, wells fargo has underperformed over the last couple of years but it used to

have a significant premium to the rest and it still does have some of that premium and people weighing today is how much of it is historical vertical versus absolute numbers today and absolute numbers today, it's a 20% premium on the multiple to citigroup. that's where it has weirdly upside. >> let's send it over to mark santoli. >> in particular on jpmorgan and city asking whether these are two big to fade right now. very interesting analyst opinions set up for jpmorgan going into these very good numbers. it's pretty rare to see the bellwether stock in a big sector have a pretty small minority of analysts still recommending it the stock has taken so well it's taken people beyond where they were comfortable, the still recommending it. right here you have 30 or 33% of analysts saying buy it at these

levels the actual price and target price are pretty close together so that kind of tells you the stock ran away from the street to a large degree. citigroup pretty much still a consensus lightning rigong righ. you can see folks still think that there's plenty of room to the upside if it normalizes its valuation. the only basis for this variance of opinion is the valuation. look at jpmorgan's price to tangible book value on its own and then city group. this shows you a gradual up trend over the last five years or so. now it's about 2.4 times it's pretty rich at these levels, certainly for this era relative to ci stchlt iechlciti twice as much. it's 1.2 times tangible book and that's why analysts think there's a margin bank analysts seem to be value

oriented they're not used to say that very richly valued stocks can continue higher on a growth basis. guess what, both these stocks are up nicely today. >> mike, the multiple difference for citi to jpmorgan is quite clear and obvious. i guess the return on tangible equity is also quite a stark difference as i said, 19% for jpmorgan last year to 12% for citi last year the interesting thing from that is that the forecast for the year ahead for citi is 12 to 13% so it's not like they're saying we're really going to close that gap in the year ahead. the other point i'd also say for jpmorgan which is worth taking note on is that the fourth quarter returns were 17% versus the full year of 19% that's an important trend to watch whether their own roe's have peeked. >> even though citigroup is not going to race ahead to jpmorgan

profitable, it seems that there's a little more room for improvement right there. you're right about that, the return profiles explain the valuation differentials to a very large degree. >> thanks so much for that grasso, where do you stand >> when you look at the xlf and go back to precrisis levels, we really have made up all the ground before the crisis happened when you start -- this story seems a little mature for me think about what pulled these off the 2016 low it was deregulation and tax cuts if president trump is re-elected, he's not going to have congress with him to do any further tailwinds for the sec r sector if he's not re-elected, the legs are cut out in the whole space either way for me i think the story is extended and i wouldn't be a buyer of financials right here. >> after the break we will have more on this sector, wells fargo's new ceo weighed in on the company's cross selling scandal in today's earnings call >> as you know, we made some

terrible mistakes and have not effectively addressed our shortcomings. >> we'll discuss with wells fargo's cfo coming up next. >> later, know var tis joins us live from the jpmorgan conference in san francisco to talk about drug pricing, the 2020 election and more small business optimism falling in december, coming in at 102.7 u down two points from the prior money. the consumer price index rising 0.2% in december we're back after this break. ♪ ♪

are jumping on news it's planning to offer its product on the wholesale channel. the company says its agreement with align technology is expired and it's no longer obligated to stay in the direct to consumer channel. that stock is higher by almost 17% on this news. wells fargo shares trading sharply low as earnings missed expectation due in part to higher expenses. this was the first call for new ceo charlie scharf where he set expectations lower related to

fixing problems from the cross selling scandal that erupted back in 2016. >> as you know, we made some terrible mistakes and have not effectively addressed our short comings. i don't have all the answers yet but i will share more as i learn more and as the year progresses. i will say this several times but you should know there is still much work to do. many have focused on the fed consent order, but remember we have 12 public enforcement actions that require significant resource commitment. i don't want to dwell on it but i just want to be clear, i'm not suggesting here that any of these public issues will be closed this year what i'm suggesting is that we're going to do all the work that's required. >> joining us now is wells fargo's cfo, john shrewsberry. good afternoon to you. >> thanks, happy to be here. >> i want to start by asking how surprised you've been at how

much more downbeat your new ceo is in terms of how much left there still is to do to tidy up those issues compared to where you and his pred cecilsayassess it recently? >> i don't consider that to be downle downbeat he's doing a thorough and exhaustive review of the businesses. >> the market makes it downbeat. you're down 5% today >> there's a level setting of how long it will take and how much it will cost to get there at the same time he gave his early observations on the power of the franchise, on the people that he's met, on the relationship with customers. we're growing customer accounts. we're growing several of our businesses loans grew across the board. deposits grew and the underlying franchise is performing but getting risk and control right and all that it takes to do that, what it costs to do that to make sure that we live up to our own expectations and regulatory expectations is

absolutely his first order of business i think he was very clear about that >> i absolutely agree, john, there was a lot of positives he went through as well, including framing how much opportunity there was to build again on the great franchise you have nonetheless, undoubtedly you look at the market and the share price moves, the key takeaway was how much more downbeat he was in terms of the problems there still are so solve than you and his predecessors were over the last year what was he able to uncover that allen parker and tim sloan weren't able to uncover? >> i think with the passage of time and with new people in lots of seats, you'll recall that our operating committee is more than 50% reconstituted over the last year or so, all of those folks in biggidigging in and doing thr work have come up with plans and requirements so he's got the benefit of that. he's got his own experiences in

having been through something similar at a prior institutions. he's got a different relationship with the regulators as he talks about their observations and what we're doing about it i think all of those things put him in a great position to be able to process all of this and have a point of view about what it takes i don't think it's appropriate for him to try and be rosie or optimistic or allow people to imagine that this is something that's going to go away very quickly when there's a lot of work to do, and that's what we're setting about doing. >> as you mentioned, a lot of changing of the guards in the management positions around you and that more downbeat nature. has it been tough for you, the old guard, and your colleagues to take? is morale pretty low >> i don't think so. i miss some of my colleagues that i worked with for a long time we have a familial environment but it has been very powerful and refreshing to have people joining who have walked a mile in these shoes, who have seen

something similar at other firms, both usg sibs, european banks and elsewhere to be able to add that element of been there done there to solving big problems and coming up with real execution plans and getting it done to satisfy regulatory expectations so by and large i think if you were to take a poll people feel really good about the optimists forward and we are surrounded by folks who have accomplished that in their careers. >> john, it seems very clear that mr. scharf made no bones about the fact that this will take some time he still has a lot of digging to do and things to get his arms around so, if you're a member of the board, how much time reasonably do you think we should be expecting to see some material turnaround here? >> well, i mean, between him and the board, i do think that as he goes business by business and we all do it together with business leadership highly engaged, with each passing quarter certainly

through the first year he'll have a really good sense of what he thinks it takes and i think the plans -- our plans will reflect that and of course the board's privy to that. i think quarter by quarter more will be known and particularly initially internally and then ultimately among our other stakeholders people will come to understan understand the story and hold us accountable. >> i want to talk about the macro environment listening to your call and the other calls. i get the sense there's a sense of optimism on the corporate side in december did you see that and did you put that down to trade tensions easing >> i don't know if it was december but certainly the initial agreement to have a first stage agreement seems to have taken a little bit of the uncertainty and pressure off of trade which was one of the bigger overhangs i think on risk taking and cap x in the business sector so, while it hasn't completely abated, it's not worse

it's probably a little bit better stepping into this year with that going in what feels like a more positive direction and not in a negative direction i think is comforting. the expansion, call it a 2% expected gdp growth rate for 2020, the expansion is broad broadening geographically, by industry there's reason for optimism right now in the u.s. >> talking about optimism back to wells fargo, some of those long-term opportunities that charlie mentioned, the franchise, et cetera, clearly you guys used to have a big multiple premium to the sector do you think a chunk of that is gone forever, or do you think that it's all recoverable again in the future? >> i think a big piece of it is recoverable and that ultimately we should probably settle out where we used to which is a

smaller denominator for roe. there's a linear relationship between roe and price to book in bank stock, so our roe if we're operating officially with our mix of businesses should be -- it might be a little bit below a high performing or the highest performing regional bank through the cycle. there are some g sibs performing at the top of the cycle right now but my sense is that we should get that back. >> john, thanks so much for joining us. >> thanks for having me. >> john shrewsberry, cfo of wells fargo. after the break, tesla shares keep climbing and it's january 14th now wall street is playing catchup. we'll tell you about the latest analyst moves coming up next our retirement plan with voya gives us confidence. we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. i'm good at my condo

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after the break, tesla

welcome back to "closing bell." time to get word on the street let's start with an apple roundup. apple has the potential to reach a $2 trillion valuation by 2021. maintaining a buy rating and raising the price to 355 from 280 based on iphone optimism atlantic equities downgrading apple to underweight but raising its price target

a couple price target upgrades from tesla. 600 from 400 and deutsch bank saying while the company is firing on all cylinders, investor sentiment has gotten bullish too fast steve, you don't even shares of tesla. do you wish you did? >> i've been in and out of tesla. i'm currently not in it. technically from that 186 level everyone was bullish except for the 20-something percent short interest in the name and those should have covered. even when it was in the mid threes it looked like it could explode to these levels these are by far overshoot levels i don't think you should be getting in the name at this present time i will tell you that real quick on apple, i am staying long on

apple shares and the negative call on apple, raising the price target that to me is like you were wrong right now, current prices they were wrong for 35% and isn't it a little too convenient that they just cut that in half with the new price target to be wrong only 17% for me you havewearables, services above $46 billion in revenue contributor. if at all 5 g is a catalyst or a tailwind the stock will rocket to at least 350. >> a classic mixed message >> yes. after the break we'll head out to the jpmorgan health care conference in san francisco for an exclusive interview with the ceo of novartis. >> and here's a check on bonds treasury yields moving lower today. the benchmark tenure currently yielding 1.81% "closing bell" will be back right after this

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welcome back to "closing bell." just over 30 minutes left to go.

here are the things driving the action today earning season, financials, the best performing sector with new numbers out for jpmorgan and wells fargo. the trade deal with china expected to be signed tomorrow although new headlines injecting some uncertainty about when tariff will be rolled back and after hitting an all-time high above 29,000, the dow is losing some steam into the close. it's time for a news update with sue herera. >> here's what's happening at this hour. smoke from the ongoing australian brush fire has caused a player taking part in a qualifying match for the australian open in melbourne to drop to her knees because she was having trouble breathing and in another melbourne tournament, maria sharapova and her opponent abandoned their match due to air quality concerns sticking with those air quality issues, rome has banned all diesel cars from its streets today to help tackle one of the most severe air pollution emergencies of the decade. the ban was issued after various

pollutants broke limits for ten days straight. and moving from rome to venice, just weeks after swelling canals flooded that city, exceptionally low tides forced gondolas and other boats to dock over the weekend water levels dropped dramatically early last week. here at home, finally vice president mike pence swore in general john raymond as the first commander of the u.s. space force. last month president trump made space force the sixth branch of the u.s. military by passing the national defense authorization act into law you are up to date this hour guys, back downtown to you. >> i bet it was smelly there in venice. >> i'm sure it was, yes. when the low water comes in, yeah. >> thank you see you next hour. let's get over to mike s santo

santoli. >> i at least am too old to know the significance of this date. it is the 20th anniversary of the day the dow jones peaked near the end of the strongest and longest bull market in history, the one that ran right up until 2000. we have it from january 3 of 2000 this was your peak a few days later. it was at about 11,700 the dow over the prior ten years appreciated by 450%. the s&p 500 and the nasdaq would not peak until early march of that year so let's call it eight weeks later. this was the first time it rolled over. a few things to note, you were basically not really back to those levels on a sustained basis until well after the financial crisis so obviously we went down there again. that's what you would consider a secular bear market, a long-range bound period. then of course we have launched higher from there. take a look at this other look which is a little bit more recent and we're going to -- this is actually the bull market of the '90s i wanted to show you. this shows you really a flat period, similar to what we just

looked at. 317% by this look if you looked. the previous bull market stronger than we are now we are up about 250% in the dow over the last ten years. if you thought there was going to be synchronicity peaking on the 20th anniversary of that big one, probably not. really in the same field position in most respects not yet. >> did total return accentuate it more? >> only slightly your initial dividend yield if you wanted to go back to 1990 was going to be a bit higher th than 2% zone we started at at this i don't think that was the main difference for those periods. >> thank you. novartis shares are trading higher today the company is providing its vaccine to everyone.

we're with the ceo, vasant narasimhan >> thank you so much thanks for being with us. >> thanks for the invitation >> courtney just mentioned that deal you announced yesterday with the u.k. government to provide your cholesterol drug which is yet to be approved sort of like a vaccine to try to prevent second heart attacks this is a totally novel idea tell us how this came together. >> we're really excited. it has the potential we believe to transform the care of cardiovascular disease which is the leading cause of death and disability around the world. i think health care systems realize you need new solutions the idea is with the u.k. government we signed a partnership that allows them to work to drive utilization of this medicine to hundreds of thousands of patients to try to reduce the number of heart attacks in these patients who have already had a heart attack. it's a pretty revolutionary agreement. it kind of takes population health, a vaccine-based approach

so we're pretty excited. >> any numbers you can give us around this? will it actually save money for the u.k. government if you can prevent heart attacks? >> the u.k. government believes this is a highly cost effective intervention no numbers yet but they believe this will be an important contributor to their ability to hit their targets to reduce cardiovascular disease the other element of the story is we announced yesterday we're doing a clinical trial in primary intervention patients who haven't had a heart attack but are not at goal for their cholesterol, we'll do a large scale study as part of a global program to study this medicine as a primary prevention intervention, so almost a vaccine for cholesterol. you can imagine if we can really take on cardiovascular disease with medicine like this, it would be incredible for the health of the world. >> i want to ask you something that you mentioned in your talk here at jpmorgan yesterday morning which is trust from society and the company's ethics

focus. you of course had a data manipulation scandal last year with your gene therapy drug that the fda focused on how does the pharmaceutical industry win back trust from the public more broadly? when you look back to the 1950s it was the most trusted industry in the world, now least trusted. how do you fix that? >> when you look at the story of our industry we've led to incredible gains in life expectancy around the world. when you look at it today, a person can live no longer 25 or 30 years of age but 80 to 90 because of our industry. if you go back even to the 1970s like you say, we were really well r7espected i think we're going to have to be consistent over time and understand that the margin for error is very small. at novartis we're taking on ethics and integrity, pricing. we commit to pricing our medicines in a value based way and being thoughtful about how we think about any price increases. global health topics where we want to be part of the solution

on global health i think our industry needs to do a lot more on our role in global citizenship topics we committed to be carbon neutral by 2025. we've committed to get gender equality within novartis by 2023 we have to take on these topics as an industry as well to really earn back the trust of society. >> so much more to talk about. we'll leave it there for today thank you so much. >> thank you. >> back over to you. >> our thanks to both of you excellent interview. we've got 22 minutes left of the session. at the moment we're high just about on the dow, negative for the s&p and also the nasdaq. it's been a volatile session but roughly flat on the dow. up next, your last chance trade. and here's pinterest jumping on a report that it's jumping up the social ladder. and disney spiking on a report that the mobile app saw nearly 41 million downloads the first month, the best launch of

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big board as you can see we're mixed on the major indices big tech names that hit all-time highs earlier in the session but as you can see they're trading lower. >> so we have just about 19 minutes left to trade so what is your last chance trade >> if you think about this, ge, what i've been saying the last couple months, ge, $20 in 2020 i figured what better to kick off my first last chance trade with "closing bell" than to start off with ge. do you remember the conversation that was so negative they discussed bankruptcy. have you heard bankruptcy enter into the dialogue in a while with ge? >> no. >> it's in the memory. >> but it's not in the dialogue. they did an excellent job at navigating through unsettled waters what has gotten better

power, aviation, and they have a line of credit i don't think bankruptcy is in the cards, and things are looking brighter but it's all about earnings >> it is off its lows quite comfortably but you're happy to buy here >> think about it, if you look at a longer term chart in ge when it was falling, obviously when you start coming from a lower base the way that it's increasing in price everyone is going to be afraid of, but this is a stock that should be back if it succeeds, it should be back to $30 and $40 and there will be bargain basement if you're able to pick it up. >> you just missed out on the trophy. >> i did i was happy to make it to the top five. >> that was fun, the last chance trophy it's a long way away. >> you should probably do it per month, keep a running score card. >> we've got the spread sheet

running so we know how you're all doing. that was steve's first pick for the year up next we'll bring you uninterpreted coverage of the final minutes of trade as we head to break here's a check on the major averages. you can always watch us live on the go on the cnbc app "closing bell" back in a couple of minutes (soft music)

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you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler so you can take on the markets with confidence. don't get mad get e*trade and start trading commission free today. less than 13 minutes to go in this trading day. we're in the closing bell market zone it's commercial-free coverage of the action. >> mike santoli here to break down these crucial moments as always and we've got tony dwyer

here as well good afternoon to you. tony, let's biegin with the banks. jpmorgan and city trading higher after beating the street's estimates for earnings and revenue while wells fargo shares slipping after the bank reported a 55% fall in quarterly profit, missing the street's expectations joining us for this part of the discussion is ken leon good to have you join us what's your snapshot overall in terms of the fundamental attractiveness for the bank sector in the year ahead do you think the rest of the banks are going to report more in line with city and jpmorgan and beat expectations? >> i think we had strong stock performance in the fourth quarter and all boats rise i think it's going to be relative and we reiterated our buy on jpmorgan, our sell on wells fargo and ka pit lated to

moving out of our sell on citi we think there's two strategies here, one that we see which is america first which is building on the consumer and small business, which benefits bank of america and jpmorgan and then goldman sachs is really, even with its new strategy to expand, its core business is very volatile and cyclical it's still trading and underwriting which q 3 to q4 for all the banks really wasn't that good i would go for the larger scale banks that are investing in technology and expanding and to new u.s. metropolitan markets. it's not wells fargo it's bank of america and jpmorgan >> you went ahead and said sell on citigroup they had a pretty good result today. why are you selling here >> i think they pulled the winner out of the hat. there's always global risk with

citi they only have 45 er% of their total net revenue in the u.s they got 10% greowth out of lati america. china was about 4% most of it is related to the consumer, and we really didn't see a big decline for them as it related to the institutional side for citi, especially with china-u.s. trade, it doesn't seem right to keep a sell on them >> upgrading from sell to hold on citi. thanks so much for joining us. >> thank you >> mike, quickly in terms of the banks' performance, we have slipped along with the rest of the market but it's more pronounced because it's such a strong morning. >> i think you also had this lower because yields have pulled back today as well i think you've gone through these multiple stages with the bank story which was years ago

it was, well, they're better capitalized and lower risk then it was return of capital, buybacks and dividends and now it's maybe the expansion can last longer. it remains to be seen but i think you had a great run and you're basically back to two years ago levels. >> the dow is flat, flipping between negative and positive as we have nine minutes left to go before the closing bell sounds we've got wall street hiking price targets on a slew of these tech names that we talk about so often. josh lipton has some of those calls for us >> a string of upgrades today. bank of america for example getting a price target there, a hike on amazon, seeing behr deliver capabilities microsoft, goldman taking the price target higher there. apple was an interesting call. we did see one firm taking the price target up. they see more room to run,

improvement on that 5 g cycle. we saw atlantic equities downgrade. >> josh, thank you very much tony, as you look at the secoteh sector, it's had such a strong run. do you think this is going to be a group that continues to lead the way higher >> we found two different indicators that we published this morning that point to a pullback in tech i honestly for the last month and a half have been a little bit wrong here where i thought the gains had become extreme we found that when the info tech sector was more than 15% above the 200-day moving average, you tended to get some period of consolidation and pullback that could be a little nasty but it's typically followed by a ramp to higher highs i think the tendency now is tech is up so much i got to downgrade it i think we expect a correction and believe it ramps to new highs with the economy

>> boeing numbers fell to their lowest in decades. phil lebeau has that story for us >> a slew of news for boeing and most of it revolving around the 737 max shows you how much this crisis is hurting the company. commercial airline orders, negative 87 for all of 2019. that is the lowest commercial airplane order rate in decades the backlog remains just over seven years' worth of airplanes that they can build if they get the max recertified, 5,406 t airbus delivering a record 863 aircraft boeing, 380. finally, guys, the story that's got a lot of people talking, an unredacted version of those documents that was released last week by boeing, one of them shows boeing employees referring to lion air acs idiots this came before lion air's 737

max crashed, the first of the two max crashes that started all this back to you. >> phil, back to the orders part of the story, we've seen some reports, some stories in the last month or so that airbus is trying to ramp up their production to what extent are we at the point where airbus meaningfully takes lasting market share i know we always fall back on this point, oh, there's only two producers, it's a case of getting the faa approval back. but is there lasting damage between market share >> there is. look, airbus is already taking market share when you look at what many people call that middle of the market aircraft, one that is going to connect longer range destinations. that's where they've introduced the a-321 xlr. they introduced that last year at the paris air show and since then they've racked up a slew of orders boeing was expected to announce

its own version of that aircraf but they never did because they've been consumed with the 737 max. the new ceo has a priority to get the company back on track and grow. >> one of his priorities in a list of many thank you very much. mike, you've talked to us before about boeing and shares i think are marginally higher as we go into the close on all of this news of a negative order tally how do you even have a negative order tally? >> it's a test of exactly what is in the stock. it's really back to levels it was at in august it has not participated in the broader market rally it seems like there's an everett -- effort to defend the lower range. i don't know if this is a verdict on whether the news has gotten maximum bad but it seems like somebody is trying to make a stand. i don't think the decline in orders was necessarily a big surprise but it is stark to see it out there. >> to see it out there and still

see the stockhold hold at these levels it seems like it would throw you. pinterest is jumping on a report that it's surpassed snapchat in social media popularity. let's bring in julia bore sten for more. >> pinterest shares gaining 10% today that pinterest has surpassed snapchat as the number three social media app behind instagram. e marketer forecasts that pinterest will continue to grow faster than snap, projected to hit 90 million u.s. users by 2022 while snap is skewed to younger people, pinterest users are more represented across all age groups. >> thank you very much as you look at the social space here, are there names that look attractive to you or are there

still too many headwinds when you're thinking about things like trends and social use habits >> it's been a stock picker's market and it's been a component of info tech i'd leave it to mike bram who follows these for us again, this whole social space and the information technology space has been on a ramp so it's a matter of which stocks you pick within that space, especially going forward as i tried to mention earlier, we're looking for a little bit of a pullback in tech. we're not looking for a continued ramp before a pullback i think we would be a little more hesitant in this space. >> two and a half minutes left the dow now just high but the s&p and nasdaq are lower mike, what's market internals saying today >> slathere's a lot of push-pull it's still net positive because the smaller cap stocks are

outperforming even as the index is wavering. there is rotational action look at the pure value tf, the cheapest stocks in the s&p 500 against the nasdaq 100 the qqq is up by three percentage points and the vicks has been laboring in the 12s for a while. it looks like a quasi floor happening right here as we get towards important expirations. >> the vick sitting at 12.6. rick santelli has a check of the bond market. >> tariff affected all markets earlier in the session treasuries were affected but the field curve as you see in tens minus twos was dramatically affected and flattened 24 basis points this is the flattest it's been in one month traders pay attention to that.

bertha, even with the tariff setback, the nasdaq is up 3% on the year, double its other indices and it's only two weeks into the year. >> and we got just shy of 9300 this morning at a new high take a look at the chips and you see how the tariffs sort of caused that choppy trade when it came to big cap tech biotech today is on fire, particularly the large caps, up over two and a half percent some of the companies that presented yesterday getting a nice boost today progeny, one of the small caps helping to boost in health care, small cap help today it has doubled now as a market cap, just shy of $3 billion. bob, over to you. >> we lost steam on trade headlines but a number of stocks that was great in 2019 into

2020, nike, another new high we also saw vin tech, visa, another new high, american express new highs as well, and union pacific. there's the closing bell dow jones industrial average, just barely a gain s&p 500, down five for the day welcome to "closing bell." >> i'm courtney reagan in for sara eisen along with mike santoli. >> where the markets finished, a fairly bumpy session as you can see from the chart on the s&p 500. we had record closes yesterday, not again today but only 0.16 of declines the dow did gain, again, not significantly, about 30 points or so on the dow health care, utilities and

consumer staples the only ones positive financials which had been strong ended in the red. >> joining us to talk about the market day, david ellison, portfolio manager at hennessy funds, still with us is tony dwyer, chief market strategist when we saw this action fall, it was really on the trade headlines and maybe some discussion about the tariff rolling back, when it will happen and when it won't happen. i thought we were done with all of that. >> i think we're in a substantive way done with it i think it was a test of a market that was very extended and took the excuse to pull back on those headlines we've been talking about how the market looked stretched on every metric and there's kind of an easy way and hard way to take care of that the easy way is we go sideways, rotate out of the extended stocks some of that was happening today. the hard way is a sharp, nasty pullback that we have to actually reset some kind of a floor. so we don't know how this is going to go or if we continue to

barrel higher from here. to me you've gone up on almost no incremental good news for days on end so why does it have to be a genuinely substantive negative headline to take us down it's a lot of trading mechanics and tactics right now. >> and small caps doing well today. >> yeah. i think that's what you were seeing apple down 1.something percent on something except the fact that it was up a ton in a very short period of time, and stuff that hadn't participated, it seemed like a rebalancing type day. >> david, what's your take today in terms of the overall market sentiment in pullbacks and ending roughly flat? >> i think mike made a lot of good points. i watched the market it seems like it goes up every day. you've had huge moves in apple and tesla that don't seem to have any sort of -- people just want to own those names. disney has had a huge move sure, a pullback would make

sense. i'm not sure what's going to create it. i think at the end of the day the banks that reported today are telling you that the consumer is fine, that loan demand is decent, that loan credit is good so the economy is as good as it was six or eight months ago and it doesn't look like there's any deterioration so the market doesn't have a reason to go down because of the economy or the consumer >> when you look at some of the readthroughs from some of the bank earnings today, when i look at citigroup it tells me that things globally look pretty good the global consumer business is up a5% from last year. am i reading too much into that or does that give you insight into what we're seeing beyond domestic banking here? >> i think it's corroborating what some of the leading indicators, some of the market pmis are saying globally, that you're seeing an inflection of a historic week. i think what we're trying to do is explain away what typically happens after you've had what we've categorized as the third

mini recession of this cycle we keep hearing that there's been no recession, it's been the longest economic expansion and bull market in history, but we've had pretty close to recession. this will be the third time at the end of 2018 and into 2019. so that global slowdown is starting to stabilize and get better information technology, banks and industrials are supposed to outperform when you've already priced in a recession which it did in the fourth quarter of 2018 i hate to say it but it's typically what you would expect. one of the most incredible things i just read before we came on air was a cleveland fed study saying their ten-year expectation is at 1.7% how do you think the fed is going to raise rates if the inflation expectation ten years from now is 1.7% when they want 2% i think there's a tailwind of the fed and this global economic

inflection. >> wells fargo shares closing 5% lower today after reporting a miss on both earnings and revenue. wells fargo's cfo, john shrewsberry, joined us last hour and here's what he had to say about ceo charlie scharf's role going forward. >> loans grew across the board deposits grew. the underlying franchise is performing but getting risk and control right and all that it takes to do that, what it costs to do that to make sure that we live up to our own expectations and regulatory expectations is absolutely his fist order of business >> david, how much of the wells fargo miss was the new ceo just lowering expectations versus fundamental long-term problems >> i think you have all of that happening and i think you'll probably see that for the rest of the year. i don't see any reason for them not to try to play catchup, meaning they're behind on technology, they're behind on

customer loyalty and all that stuff, i mean, the small banks and their markets continue to take share from them, both people, loans and deposits, and i don't see that letting up any time soon. so they need to rework this franchise. i don't think earnings is why you buy it here. you buy it because this is the guy you believe is going to fix it i do think they need to decide what they want to be i don't think they can be the wells fargo of old they've got to transition to something else and i'm not sure what that is yet i own a very small amount of it in my portfolio. >> bank of america, there were plenty of takeaways from the other numbers that should bode well for them, and goldman sachs similarly with strong numbers but goldman is up 9% in the last month. >> that's often what happens people read through and reprice the stocks in advance of those reports to kind of build in good

expectations a strong late finish in the year in trading is not going to be a terrible upside surprise for anybody right now. i don't think it changes the overall story very much, but, yes, it sets the bar a little bit higher to me the real takeaway, outside of wells fargo, is this is not a group that is positioned to deliver negative surprises right now. the steadiness is what you want. the question is what you pay for that steadiness. it's about how long you think this expansion goes, really not so much how fast the growth is going to be. >> i was going to ask about jpmorgan we've talked about a lot of banks and we haven't talked about that that was fairly steady so at valuation pretty rich right here >> it's rich they keep earning their way into the valuation and i think it's the one largely undisputed core holding. it's like the old general electric where they're one and two in all their businesses and

that worked for a long time for ge. >> when you look at the relative sector attractions across the s&p 500, how do you think about the banks, the fact that they are all essentially now producing double digit roes. yes, they're more expensive than a couple years ago but not incredibly expensive in light of double digit returns. >> i'm trying to find because i'm looking for a pullback that hasn't occurred so i'm trying to find areas that are kind of risky and the banks being one of them i looked at the banks relative to their 200-day moving average. everything that i am seeing with the banks looks more like a kickoff rathlly than some kind final move higher. i don't think there's any real case that you can make that the economy is going to go into a recession and lending is going to be shut off something that was really interesting i read today was that jamie dimon talked about a consolidation wave that we sees in some of the smaller banks in

the banking sector that's one of the things with so much credit available at such a low rate, it could fund a lot of m & a activity. >> the federal reserve has held off on changing its interest rate policies since october but that could change in 2020. you know ubs out with a note predicting the fed will make three rate cuts in 2020 totaling 75 basis points. the firm estimates that the u.s.-china trade war will drag on growth more than expected this year pushing the fed to act. this seems dire and a bit of an outlier. david, what do you make of three possible rate cuts i assume you're not in this cam of or maybe that's the wrong assumption. >> i'm not in favor of three rate cuts. that would take rates down to a point where it would start to pressure margins i'm hoping that the fed learned its lesson about rates with respect to the negative rates in europe as tony and mike talked about in terms of valuation, this group is going to go up when people

feel comfortable that credit is fine and the fed isn't going to go to negative rates remember half their revenues come from their spread and if you take rates down that much this year, you're going to put pressure on the margins. i'm hoping that doesn't happen i'm hoping they use their balance sheet to take care of that issue of trying to bolster the economy, but lower rates from here is not good for anybody. >> i do think you have to be specific about what ubs says is the premise for this call which is the firm thinks that job growth is going to slow to 70,000 on average per month in the first half of this year and the unemployment rate goes up to 4.2% the bar is pretty high for the fed to move but they think if, in fact, the fed decides it has to do something on the easing side it's not going to be one quick tweak of the rate. it's probably going to be a three-cut insurance policy certainly a nonconsensus outlier call but interesting somebody is calling for something besides fed on hold. >> gentlemen, thank you.

mike santoli stays with us up next, the latest trade developments with former chairman of the council of economic advisers will join us when "closing bell" returns in 90 seconds

phase one of the u.s.-china trade deal is expected to be signed tomorrow, nearly three months after the plan was announced. tariffs stealing the spotlight as the market took a leg lower

as sources to cnbc saying there's no agreement on a path forward for a chinese tariff reduction. joining us, former chairman of the council of the economic advisers, education lazear it seems we don't have final details or an agreement on final details just yet how much does it matter? have we gotten past those major mountains for the two economies, or is there still a lot to be worked out that could have a real economic impact >> well, obviously there can always be things that will come in the future that can have an impact, but the deal is a good one. i think this is actually very good news for the u.s. economy it's important that we finally got this thing going we've been talking about it for a long time. the tariffs were supposed to be a vehicle that would get us to a trade deal it looks like we finally got there so that's great. the one thing i would say and economists always have the on the one hand and on the other

hand so i got to give you the other hand, and that is that we shouldn't have delusions of grandeur this is a very positive development but it's not going to be transformational in terms of how it affects our economy. if we take the administration's numbers as given and assume that they're accurate and there's no reason to assume that they won't be accurate, we're talking about something like a half a percentage point of gdp. so that's good half a percentage point of gdp is a big number but it's not something that completely transforms our economy >> ed, how impressive is it that this deal will be signed and yet the u.s. still has something of a bargaining chip going forward for the next stage, still has some tariffs yet to be removed >> i think that's particularly important when it comes to the issue of intellectual property the reason that's important is this if you think about any deal on intellectual property, the way that works in any country, the

united states and internationally as well, is essentially what those deals give you is the right to sue it essentially says, look, we can take you to court or we can impose some additional sanctions on you in the future to make sure that you behave appropriately. so to the extent that tariffs are a potential threat down the road, that can get the chinese to adhere more closely to a deal on ip. that's the big one really because that's the one that probably bothers the united states more than anything else intellectual plroperty, theft hs been a real sore point for us and so the ability to get back and do something in the future, hold out some threats, is probably an important component to the deal. >> this is just phase one. we of course believe that there will be a phase two and the president says, well, that might not get done or signed until after the election

how much of an issue is that for the u.s. economy does that hold us hostage in any way as we're trying to work through these very big issues of intellectual property transfer that you're discussing >> i don't think so. i actually think the timing is fine and not doing things too quickly is probably appropriate. the main point with respect to china is this. look, there's a deal here. it's really the first big deal the stuff with canada and mexico, obviously that's important but that was almost a given because we are 30% of mexico and canada's gdp. they basically didn't have a choice when we're dealing with china it's a completely different story. for china we're less than 5% of their gdp so the fact that we were able to negotiate a deal with an almost equal economy, almost equal trading partner, they are the number two economy in the world, is an indication that we can do this in the future not only with respect to china but with respect to other countries as well. i think for that reason it

actually is quite significant. the other thing i would say is just kind of on the international relations front, again, china is growing. within a decade they're going to be a bigger economy than we are, and it's extremely important that we have reasonable relations with a power of that magnitude. >> just quickly, bring it all together for us. what's your forecast and expectation for the u.s. in the year ahead given both these trade deals coming to fruition >> i always use the market as my best indicator of what's going on the market is essentially saying between 2 and 2.5% growth for next year, no recession in sight. that seems like a reasonable forecast that's not the 3% that the trump administration wants but it's not bad, particularly for this stage of the business cycle with the labor market almost at peak right now. i think it's pretty good news. >> ed, thanks for joining us.

>> my pleasure thank you. up next, we're talking tech, just how stretched is the sector mike will head to the telestrator with that angle. plus apple versus the government the tech giant rejecting the u.s. attorney general request to unlock another iphone. the details ahead. you can always watch us live on the go on the cnbc app "closing bell" will be right back do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. - [spokesman] if you've tried colleg(group cheering)shed, snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are,

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♪ welcome back let's get up to mike for the third installment of today's dashboard. >> it's been a relevant question whether tech is getting too hot to handle in the short term. take a look at tech against banks, obviously another group in the news. this goes back 11 years because i want to take it a little bit before the bear market bottom so you've got a little bit of a sense of the magnitude of the changes. i mean, talk about banks being on a good run lately you can hardly see it here relative to the tech stocks.

obviously acceleration well beyond what the banks have been doing and these are the staple groups that led the way in the '90s bull market now take a look at tech. this is a monthly chart. it's kind of a log scale which means all percentage moves are treated the same that's why it smooths it out a little bit to do it this way there's a trend line here that people are able to draw at the highs coming through this entire bull market in tech and the relevant pieces here, how we've peaked above it. we've accelerated above this strong trend this is not a trend that's likely to unwindor reverse, but two, even if it pulls back, you're well on the trend the xlk, the tech sector is really microsoft and apple. >> clearly tech has massively outperformed and we talk about a changing makeup in market capitalization in s&p over that

time and energy is always the best example banks are still held up in that sense. you've got big players there and a big sector overall to the extent that it hasn't been whittled away. >> that's exactly right. it's not as if energy went from 20% or 25% of the s&p in '08 way down to 5% right now that's unlikely with banks there's too much capital there really for that to happen. and it has in ways been a more balanced industry because they shuffled it all and of course fang is now in communication services so that's why tech itself as we now measure it is not pushing 40 or 50% of the index. >> it's incredible to watch those tech stocks run every single day it seems day after day. thank you, mike. still ahead, black rock's larry fink says climate change is about to trigger a fundamental reshaping of finance. llcos wh "osg enclin be" meback after this. ♪

♪

welcome back here's a look at the closing bell big board the main indices on the top, s&p and nasdaq below the flat line a volatile intra day session but we had record all-time closing highs. the dow eeked out a slight gain. the top performers on the second line, pfizer, jpmorgan chase and the bottom performers underneath apple slipping having had a great run, down 1.4% today. >> it is time for a cnbc update

with sue herera. a developing story at this hour 17 children and 6 adults are now being treated for minor injuries in los angeles after a delta airlines flight dumped fuel while flying over that school's playground the faa saying that delta airlines flight 89 on route from lax to shanghai declared an emergency shortly after departing l.a.x. as a mentioned it is a developing story we'll give you more headlines when we have them available to us. in washington senate majority leader mitch mcconnell saying the senate's trial of president trump will likely begin next tuesday mcconnell also pointing out that the start date is contingent on house speaker nancy pelosi sending the two articles of impeachment to the senate. northeastern spain under an emergency chemical alert following a large explosion in an industrial zone today spanish media reporting one person is dead and four injured, calling it a chemical accident

and finally, soft bank and toyota teaming up to provide tokyo citizens with a new way to commute, by boat the experiment is an attempt to ease congestion, especially ahead of the 2020 olympic games in tokyo the trial will run through january 17th you are up to date that's the news update back downtown. >> sue, thanks so much for that. black rock ceo larry fink publishing his annual letter saying his firm would make decisions with esg in mind, environmental, social and gov n governance he shared his sustained investment thesis. >> what we are saying here, we believe, under erisa, we believe a portfolio that focuses on sustainability and climate change will be a portfolio that

outperforms. so the main component of the letter is saying this is going to be a great investment over the next ten years and, it will also have the planet >> that's not the first time larry fink has brought up climate change two years ago fink shocked the investment community when he called on corporate america to care about more than just profits, saying without a sense of purpose no company either public or private can achieve its full potential it will ultimately lose the license to operate from key stakeholders it will succumb to short-term pressures and remain exposed to activist campaigns and ultimately that company will provide subpar returns let's bring in andrew sorkin who conducted the interview. great to have you with us. good to see you. i guess my question on this is how much will it really achieve because rt announcemethe announe about launching new esg funds and trying to vote with

shareholder engagement as opposed to a blanket rule to say we at black rock with all of our enormous aum is not going to invest in this types of companies as of today. >> i think all of this is a journey, if you will, and this is a step along that journey i think it's an important step and i ultimately think we're going to look back several years from now and look at this moment as a watershed in terms of how business ultimately thinks about sustainability obviously for many years businesses have been talking about this many of them have been doing certain things but none of the big u.s. money managers have really touched this. we can say this is talk but i think what you're going to see -- two things you're going to see you're going to see over the next several years a real shift in terms of how investors are investing, what kind of funds they're investing in, moving a lot of the money that might have historically been in a classic s&p 500 fund into an s&p 500 fund for example that screams out fossil fuel companies. i think the second layer may be

even more important which is what it does for other big corporations and the message that he's trying to deliver to them which is to say that any company that has any kind of carbon footprint -- and we all do -- are ultimately going to have to shift or at least try to change their approach. i think this is going to give some license, if you will, to some businesses that may not have actually tried to effort in this direction to do so even at the expense of short-term profits for now. i think this is about a larger conversation that's going to happen over multiple years, and this is -- i don't want to say the beginning of this because there's so many people in the climate world that have been talking about this for so long but i would say this is the first major embrace by a major investor to say this is actually going to change the way business needs to be conducted. >> andrew, how are they going to actually measure businesses that are making strides when it comes

to sutainability? >> we don't talk about it enough ourselves right now. there are some major esg efforts taking place inside companies -- not just inside companies but in terms of the transparency that's going to be required over the next several years in large part driven by europe that's going to force the issue in the same way they forced the issue on privacy for some of the big tech companies in terms of what we're going to see and also a way to audit it so i think you're going to start to see that and you're going to start to see firms like black rock and others vote against boards that they don't think are working on these issues. again though, part of it is, it is the power of the pulpit it is the pressure that gets put on and i know, look, there's going to be people who are going to say he's not going to hold them to account. for the next several years people are going to say this isn't going far enough or there's no real teeth in it. all of that is probably true,

but the larger piece is what it actually does in the board room. by the way, to the degree that you think this is a good thing, i talked to people today who think this is a fabulous thing and i talked to people who think this is a terrible thing >> andrew, i totally get the point, when you're a high profile ceo like he is or the bank ceos that we talk about often, you're damned if you do, damned if you don't. >> on bank ceos i think you're going to start to see bank ceos -- a lot of the banks have gotten out of financing thermal coal or other sorts of businesses i think you're going to see them actually do even more in large part because of this conversation it's not just again what the companies are doing. it's going to be the financing it's the whole sort of domino effect. >> it's interesting you brought that up because i agree with that but i think the banks can have a much bigger impact because a black rock who can vote with only a 5% shareholders

in company has less impact. >> 100%. >> way less than a bank deciding we're not going to finance an industry anymore but that's kind of what i wanted to come to which is acknowledging your point, these ceos are damned if they do and damned if they don't speak up on these topics, but to that point, what is the actual rationale here for an investment manager, slightly different from the banks and slightly less impact he said there these will be profitable investments by picking the more green energy ones for example there's a little bit of a double standard, acknowledging that he's in a difficult position either way in terms of saying, i'm doing this because i'm doing it for the world but actually i'm also doing it because it's good for our bottom line. >> that's exactly why he's doing it which is so interesting he said straight up and down this is in the a political decision and this isn't necessarily some kind of

tree-hutree tree-hugging do-good decision. this is a decision more than anything else based on the idea that he thinks it's going to be a better investment and that's the measure with which he's had to think about these efforts you look by the way, had you bought the s&p energy index over the last decade, it was flat on a relative basis it would no have been a good investment and i think that's what he's saying more than anything else, that he doesn't think these things are going to be good investments he also thinks the impact of climate is going to impact municipal bonds, the insurance market, and he says he's starting to see that so you're right, this is all about the money. this is about the money but maybe that is -- and look, maybe there's to the extent he's trying to save the planet and make money at the same time, if that's real true maybe the two are coming together for him. >> andrew, thanks so much. we appreciate you sticking

around i'll see you on your show tomorrow >> see you in the morning, my friend >> look forward to that. do watch the full interview with larry fink on cnbc.com. still ahead, the national retail federation holding its annual big show convention 38,000 people are there and some of the industry's biggest names are staking the stage. a breakdown of the biggest headlines when "closing bell" comes ba ck but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. it's a thirteen-hour flight, tfifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position.

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the national retail federation is holding its annual big show convention right here in new york city retail ceos taking the stage to talk about how to best serve today's consumer here's co-president erik nordstrom. >> what's most interesting is really how the customer shopping changed pretty dramatically, in particular, connecting the digital and physical things like buy online, pick up in store, i think a lot of retailers have commented on it we saw a significant step change in that activity >> still waiting for nordstrom's

full holiday results underarmour founder and executive chairman is focusing on product innovation. >> we are in this retail business we think it's going to -- it is alive, it is thriving, but you better make sure you bring resuscitators every day, pads every day and light that thing and make it exciting and bring it to life everything we do is about solving that consumer's problem of making it better. >> always the sportsman there. plank also unveiled a new marketing campaign today, the only way is through. at the end he actually stood up and kind of ripped open his shirt superman style with the new marketing campaign on his chest. shares of underarmour are up. >> he had a t-shirt underneath. >> the t-shirt with the name -- with the campaign. >> i'm sure it was some performance fabric it really is going back to without a doubt the creation myth of underarmour and the performance and the utility. it's not about it looks good

it's supposed to do something for you. >> absolutely. patrick frisk is the company's new ceo. i believe this is plank's first appearance as the executive appearance. >> and model. >> and brand chief, all wrapped into what is at his core net. >> under armour was up 4%. up next, apple disputing charges that it hasn't unlocked the phones of a sptesuecd shooter at a navy base in pensacola. the impact ahead

welcome back apple disputing charges by attorney general william barr that the company has not held the fbi unlock the iphones of a suspected shooter at a navy base in pensacola, florida last month. while apple has said it provided, quote, gigabytes of information to law enforcement, the company continues to refuse barr's request to provide a back door for law enforcement to access the encrypted devices let's bring in former chief security officer at facebook thanks for joining us. my main question on this, there's messaging from apple that if they provide this so-called back door, even if they are providing it to the trusted people, the fbi, the things get out of hand there you open pandora's box and start going down a slippery slope that everyone can then one way or another pick up this back door in future and also sorts of data will be out in the open. is that a fair point for apple to make? >> i don't think apple's making

the point that anybody can get in the back door but i do think they're smart to resist this one of the issues that we continue to have in the united states is that law enforcement thinks about their own issues and to do their own job which is to protect the people in the united states but they don't think about the global implications apple like the other major u.s. tech companies is involved in a multi-decade struggle for global dominance against mostly other tech companies from china and one of the only things that they have that is one of their long-term advantages is that people trust them to build products that are secure and safe so there's a fundamental problem here that if apple decides to build back doors for the united states there's no good reason why they should be able to say no to china and then india and indonesia and brazil and any other country that has the economic power to bring to bear. i think it's smart for apple to resist here. >> what do you understand about this exactly, alex, is that apple has cooperated with the fbi according to them, giving them some information. they said gigabytes of data,

talking about icloud backups and some other things. so in that case does that mean apple is selecting what information on this phone its giving the fbi so the power is in apple's hands >> i think apple and other companies treat two kinds of data differently apple has backups that people can choose to keep on apple servers and they will provide that data to governments under lawful process so in the united states with a warrant, there's a totally different system in china. but by doing so they are only providing data that's been voluntarily sent up to their data centers what they're resisting here is the creation of a special piece of software that apple could load on these iphones which to be clear are actually two very old iphones. because they are old this might be a technical possibility but it would be technically possible for apple to create a back door that would work on these older iphones, but once that is created, their ability to resist turning over that back door to other governments is going to be

very limited to be clear, this is only because of the way that these phones were designed years ago with a modern iphone that you buy from the store today, this kind of back door is theoretically not possible. >> do you think public opinion on this has shifted? there was a similar incident a couple of years back and a debate about whether apple was creating a dback door and helpin the government get information i feel there was much more uproar then than there is today. weirdly, has this sort of data privacy issues that have hit tech companies so hard in recent years helped shift public opinion a little bit that in general there should be more restrictions to data, whether it's the government or anyone else trying to get their hands on it? >> yeah, i think you are right this goes to a really important point which is politicians like to say two totally different things in silicon valley they say we want you to protect the privacy of people, we want you not to have their data, but then the moment the government

wants the data all of that goes out the window so i do think the public conversation has changed the other similarity between here and what happened during the san bernardino case which is the other type that the fbi tried this under a different tg and a different president, in both cases it was a terrorism case and terror maybe short circuits people's thoughts about civil liberties but the defend who owns the phone is dead the people accused of crimes take a plea bargain and as part of that plea bargain they're often required to unlock their devices and provide data to the government the fbi is cherry picking these situations where there's no possibility of the person coming forward and saying, okay, i'll give you my pin and picking terrorism cases where they get people on their side but i think you're right, the public reaction here seems much more muted possibly because of the push for companies like apple to protect our privacy >> alex, this conversation will definitely be i don't knongoing.

thank you. >> thank you. >> up next, mike has a key check to know the state of inflation. and later, major millennial shift. new data shows americans consumed less wine last year, the first drop of its kind in a quarter of a century we'll discuss when "closing bell" rurnsz tastes great! high protein. low sugar. so good! high protein. low sugar. mmmm, birthday cake! pure protein. the best combination for every fitness routine.

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welcome back we're send going to mike santoli with the final dash board of the day. what you dot got, mike. >> what i have is inflation is too calm for markets to care about right now. i'm not sure it stays that way necessarily. but look at the chart of inflation, headline cpi reported this morning, a bit lighter than expected but on a year over year basis, the headline and core cpi about 2.3% to me to it take away on core is the steady in the zone back to 2012 so the economy is producing roughly the a core inflation now as it was soefrl years ago ago seems not an emergency on either side of things either because it's too lie or too high but look at the components of services inflation against commodity inflation. this is also probably not spraysing. but this is a wiped widening gulf core services, very much in that

steady range around 3% commodities of all sorts, goods basically down near zero that's dipped into deflation at times. that's the setup and guess what the economy is becoming more service oriented over time in theory there will be a upward pull to core inflation. again nothing to worry about but i don't think it makes sense for people to say why isn't the fed cutting wait rates it's been steady and supportive of financial markets but definitely want to watch to see which way it tilts from here. >> thanks. up next the buzz on wall streetthe , big stories investors are cog rowe talking about today. "closing bell" bell back in a couple of minutes. to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy. or more on car insurance.s could save you fifteen percent everybody knows that. well, did you know pinocchio was a bad motivational speaker?

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we'll go to market flash >> hey there, wilf shares much beyond meat moving 2.5% higher after announcing a multiyear agreement with the pea protein supplier it expands on a 10 opinion year agreement the two companies previously had shares of beyond meat trading under 2.5% higher. back to you snoop. >> thank you very much, frank. >> also comes of course a week after impossible feeds didn't get part of -- one cht reasons they didn't get the agreement

with mcdonald's because they couldn't meet production. >> that's right. couldn't hit all the locations well it's time to hit the buzz on wall street a new york post story that caspers ceo was reportedly obsessed with gaining unicorn status and derailed buyouts. temper seally and simeons approached for a deal. but but hfz refused when the ceo refused anything less than a billion dollars. he filed for an ipo. this is an interesting company and actually the other night i was at a national retail federation event and he won an award to sort of to be a visionary but this part not brought up. >> whenever i see the entrepreneurial type start-up companies and obsessions of keeping control, going public forever. i think i would go the absolute route. if someone offered to buy you out so you could cash in and put up your feet. >> that's how you keep story bigger scale, facebook was

obsessed with the $100 billion-dollar ipo valuation and hurt them in the first year or so. >> next wall street buzz story looks like americans move away from wine. new data shows the volume of wine in the u.s. declined 0.9% the first time it's fallen since 1994 the trend attributed to a generational shift as the number of millennials surpasses baby boomers who drove strong demand in wine in recent years. i actually when i read this was surprised thinking it through, we haven't seen a decline in wines since 1994 in fact the first year of that with all the shifts towards healthy lifestyle and in the last decade, and clearly the millennials wouldn't necessarily be going to wine as the first choice >> i would surprised because of the sparkling wine i guess but i guess it makes a smaller portion. >> but it's generations pig and

python event affects lots of things. >> diving into the nuance it grew in value by 2.1%. in volume it declined. i see this having read it as resiliency of wine relatively speaking. >> and the seltzer is supposed to triple when it comes to 2023. >> yamaha and warning people not to try and squeeze inside musical strmt cases. coming after carlos ghoen fled in an instrument case. they tweeted we won't mention the reason but there have been many tweets about unfortunate accidents. we ask everyone not to try this. don't try this at home folks. >> i love that. >> in the age of viral reckless behavior on social media, i mean you have to think about these types of things. people were eating tide pods people have to be aware how products are misused >> maybe a piano

but they don't have a case. >> no they don't. >> that would be very difficult for you. >> not many options. >> have to give you a real warning. >> we didn't get the wall street look ahead more banks reporting tomorrow and we're out of time. that does it for "closing bell." >> "fast money" begins right now. >> thank you wilf and courtney live from the nasdaq market site over looking times sfaur this is "fast money. i'm brian sullivan in gwen for melissa lee and the traders tonight are mr. tim seymour wrieen kelly chyronen owe karen fiernment and guy adam kbr tonight on fast a wild ride on wall street. all indexes setting new intraday records. what can we expect when phase one is signed tomorrow in more gains new pains? we take you live to washington and check out bitcoin. remember bitcoin surging more than 7% today,o, b.k. that's what's behind the run? and can you name the mystery