had has a better shot of beating trump. >> and so bloomberg, you know, he's going to have his words thrown up in his face a lot. it's going to be interesting to watch. >> and it's on nbc >> it is indeed. we'll see for you that thanks for watching "power lunch." "closing bell" starts right now. that it does i'm wilfred frost. walmart holds their investor days upstairs. broader market improving during the session. nasdaq just positive with 59 minutes left of trade. welcome back to well friday. welcome, everyone. i'm sara eisen apple warning it would miss its revenue outlook due to the coronavirus. despite that, apple is cutting its losses, with that the nasdaq just turning positive.

energy stocks and financials are leading the overall market, while safe havens outperform we'll discuss the impact on the coyne vines. dr. anthony fauci will join us he is part of president trump's task force on fighting the virus. steve weiss is join joinin for the hour. >> what do you. >> i think the market should take it in stride. we've had other companies come out and talk about the virus they make chips that go into handsets in china and primarily asia, also t-mobile here

they had they were lowering their forecast you've had other come out. >> and i've talked about it on the "halftime report" but we all spoke to micro, but in it continues, invariably it would continue in my view you take opportunities to get further invested if you're underinvested in certain names, because it's a one or two-quarter phenomenon. it won't impact what i view as the super-cycle in invests particularly in semis. so what the market is pretty much ignoring today are what a lot of people ignoring, the test it is companies, such as ter, those are down more than apple

was so i think those are opportunities. this is not what's going to be what derails the market. this will not define the market goods forward. it may short term, and as they announce issues with it, bud there are other reasons. >> rahel solomon looks at the impact to supplies, and dan weiss is here to explain why he's still bullish on apple. >> if you look at our results, our shortfall is over100% from iphone, primarily in greater

china. as we look at what's going on in china, it's clear that the economy begins to slow there for the second half. what i believe to be the second -- is the trade tensions between the united states and china put additional pressure on their economy. s apple shares fell sharply on that warning since then climbed significantly. josh has more on that specific topics. >> since tim cook issued that warning, that stock has in and out surged more than 100%. it's added some $700 billion in market cap it also became pricier dat 23 times earnings, as investors bet on a stabilizing iphone franchise, but now apple has withdrawn guidance because

of china, demand there is weaker than expected s production is ramping slower than anticipated. mainland china remains a key -- guys, back to you. ra hell? >> this news putting a drag on the suppliers. let's look at some of those names. taiwan semiconductor down almost 4%, down about 3%, 3.1%, and broad does that com also down about 2.3% our operating at about 30 to 50% of capacity. coronavirus's impact on sales shouldn't come as a huge surprise, as we've been saying already, few american companies are as rye loon as apple is.

40% of the apple locations are in china let's bring in dan were you surprised given the only issued guidance in lane jan, and the fact -- were you surprised to have to come out on this topic >> the others senior going to follow suit. they definitely took it over quicker than machine anticipated. just going back to the super-cycle thesis, as you talked about, that that doesn't change the man doesn't change

i view more the timing issue in terms of what we'll see across the broader semi and tech food change. >> it's the hearts and lungs of cupertino. when you looked at the announcement, it's not as much a demand as that will spike back, about the supply change, how long this continues. when do they -- does though impact 5g phones coming out later this year. that's why apple becomes the poster child that's why the question now will be, in terms of the -- how quickly this rebounds, and do any phones get pushed out. >> what is the companies that haven't warned yes that might

have even higher exposure? >> i think it's across semis you know, when you look at intel being in every chip maker in terms of what we're sealing, i think what you're seeing in the stocks is different from the supply change. i continue to radio this as a hand-holding exercise. so do you get your buying tights look you got last time around? i like it, i own it.

i traded a little bought some, got out. that's great, i don't recommend it for most people at home, but it's barely down the it stock has doubled i'm a big believer, but this is not the point alibaba has the dual listens so those stocks have acted pretty well, but syndication, it's an indication of what a central highest government can

do in terms of getting the market up. i don't think demand will be an issue. i think the timing may be an issue. >> liquid is great, but it's not going to open factories. >> that's why i say it's the timing i don't have confidence that anybody has a grip on the coronavirus. i expect more to be it shut down >> if it did mean a 5g phone for apple was pushed back a year, would that lead you to cut your price start? >> that got pushed back. the super-cycle thesis >> how much would that be worth? >> i think 5g right now.

it's a bump in the road, but it comes down to cook cook ultimately and a half gaved some of the biggest storms, that's right now allowed credibility at least in the eyes of the street to navigate through this turbulence. i'm going to disagree. the market has been there not launching, in other words, for a year until after the market got there. the fact they know it's still going to large who will go and sell their stock pay taxes and then come back in. i don't think it doesing in as long -- it could be -- except for a little faster speeds versus south korea where it's a

full 5g network. it might be better >> dan ives, thank for you joins. >> of course, retail is highly rye line on china, include names like fossil t.pgh and skechers, those all have at least 10%, and -- shares of fossil falling the most today, as you can see there, down 3, almost 3.5%, in terms of that exposure, it has the most revenue coming around china, followed by nike at 18% >> in terms of estimated 10% that's sourced from china, foss the leads that group followed by skechers, nike, and pbh, those numbers coming in, and in terms of the overall s&p 500, 500,

possibly we're talking wynn, las vegas sands, macao, with hout corning, eees tee lauder >> i'm alonging at corning they bought more fiber to go to mars and back a cupping times. >> that's the play there it's fairly ragged, but i'm not, i'm not selling, another not getting in yet i don't feel like i have to make a distill. for more tune in at 7:00 p.m. still ahead, he's the candidate who built a career a wall street. why is mfind out why -- and

later, director dr. anthony fauci tells us whether the coyne outbreak is on the verge of turning into a global pandemic a check on our data tracker. sentiment coming in a bit weaker than expected. driven by lower rates, lower mortgage rates, the dodow wn about 132, 45 minutes left of trade. ♪you got to ac-cent-tchu-ate the positive♪ ♪ e-lim-i-nate the negative "slow it down a little" ♪ and latch on to the affirmative ♪ "it's okay" ♪ but don't mess with mister inbetween ♪

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at:43 minutes left to trade. let's check in on some individual market movesers franklin resources is buying legg mason, including debt it would create one of the largest mutual fund and asset managers in the country and resolve some of the insecurity the stocks both trading up he said we den mean our own

expectations since june of last year after dupont completed that complicated merger with dow chemical and then split into three separate companies ceo mark doyle was at the helm for less than a year that stock is reacting favorably, up almost 1%. robert frank has the details for us bloomberg made his portion from selling data on wall street. now he's proposing a tax on every trade. and a tax of $4.20 similar to a tax opposed by alexandria ocasio cortez elizabeth warren, "the boston globe" and bernie sanders hav r

have -- over ten year, so that's only about a 2% increase in federal revenue. that compares to the $5 trillion that bloomberg's overall tax plan would seek to raise is the bulk of this tax would be maid by the wealthy, saying two thirds would be paid by the top 10% of earners the chaim better of commerce says this is a regressive tax on main street retirement and savings guys, back to you. >> robert, we discussed this earlier, the financial transactions tax, it grabs the headlines as someone who is so linked to the wall street trading environment, but it's not groundbreaking i don't think it hits banks that hard, in fact already exists in other places like the uk, in fact the rate that bernie sanders proposes >> there are dozens of countries

that had it. the u.s. had it for a short time it was it was repealed by kennedy in the 1960s though it sounds like a huge number, the rate is so small and the actual payment is so small that, you know, 770 billion over ten years sounds like a lot, but relative to the federal budget, even bloomberg's -- isn't it back for people who have 401(k)s, 529 college plans, average consumers, i notice they want to get at inequality and hit the high earners, but other people end up paying as well. >> they looked at the impact on the middle class sort of retirement saver and the average tax increase per year would be between $13 and $15 a year yes, there would be some impact on everyday retirement savers, but it's just not that big a

number. robert, thank you very much. really the people hit are the high-frequency traders if you're 401(k), you're not in and out of stock the interesting things overall, this said of announcement, on the surface, you're like, gosh, that's a big progressive for mike bloomberg when you think it through, you're like, okay, he's splitting the difference four, six, ten years ago to where the left win of the party is, and quite clearly there's rationale for that >> he's positioning himself as a moderate, but also trying to secure the nomination and therefore has moved to these kinds of taxes that go after wealth and economy. >> michael, do whatever you can to get elected and do what every other politician does, do the right thing when you're in office >> the interesting thing, of course, with the timing of these announcements, let's see what

the most progressive -- >> you're saying propose it -- >> no joe that it could go think, anyway. i'm not against it if it slows down the high-frequent siz traders, that's great. >> is it great >> yeah, i think it. they suck liquid out of the market. >> where'sst where there's been some u-turns in his proposals like, by the way, with his commentary on volker, where there's been some u-turns, it will be fascinating to say what hi -- there's so much there to sort of -- >> it's just so ridiculous that a guy that's funding a campaign bim himself, owes nothing to nobody, which people thinks is a government organization, it's a massive lobbying organization, that that person is mall line versus the others who have their hands out to everybody. >> that's the positive spin on it. >> yes >> bernie could come back with a

more negative spin, to say he's taking lots of small donations, he isn't addressing -- we have to move on. we'll watch them live tomorrow night on the debate stage. up next, two big calls to tell you about. and which stock nathan son is saying continue to say work as a ten-year dream. a bigger threat to the market that is coronavirus >> i look hat bernie sanders as a bigger threat than the coronavirus. how's that the always outspoken leon it speaking out - [narrator] at southern new hampshire university,

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upping its target, it's bold case is now 1200 up from 650, the firm says it reflects a frahm, and operating margin -- but also racing the price target to 730 from 325, calling it the ultimate possibility stock the core addressable mark is likely to grown more than will

likely be removed anytime soon >> moffett nathan son raising the price target to 290 from 210, the firm calling it a ten-year dream >> it's sort of an embarrassment of riches. there's so much talk about it. let's take netflix, look, i get increasingly send about their spend, which has gotten so much more competitive i don't think anybody else is even close to it, in terms of the content them the question is how long are you willing to go along for the ride with content costs going up, the balance sheet and bars more for the content, so i think it's

okay here. i'm not sure there will ever be a point of reckoning with these stocks it's really up to the competitor to see how netflix does, appearing, peacock, amazon. >> on the tesla notes, it's when you see a massive increase, no change in the rating >> just catch-up morgan stanley one in particular is one of the most pathetic i have ever seen, upgreating the price target 360 to 500. keeping its sell rating, though a massive cover your bases type of bull case this is pathetic just sitting on your benching. adam is calling from the control room. >> that's not real will have life portfolio management.

i can't say here's my bull case. i can say that as long as i have an up side initially and a buy on it. it might double from here. it's ridiculous. >> and i'm told it's not as bad with his increase. 325 to 730 no change in the rating. with the sell rating. >> what is it based on in the margin improvement >> both of thosewhat kind of

buyer will buy it? it could always be overvalued. >> it's up 6.5% today. we have 30 minutes left off the session to keep things driving the action the nasdaq just turning positive outperforming at the 340789. we're down about 150 points on the dow. time for a news update hi, everyone here's what happening the the trump administration a announcing sanctions on a russian firm that helped venezuela get around an embargo.

>> today as treasury secretary mnuchin said, quote, trading as a brokered global oil deals involving the sale and transport of venezuelan crude to provide a lifeline to the illegitimate maduro regime. >> former junk bond king michael milkin is among those getting pardoned by president trump. he served two years in prison, was fined $600 million the white house telling cnbc that the pardon does not affect his lifetime ban from the securities industry. president trump also pardoned bernie kerik. he pled guilty to multiple charges of tax fraud and lying to officials that's the cnbc news update at this hour back to you.

we'll talk to dr. anthony fauci. as we head to break, a check on bond for you treasury yields are declining today with a ten-year legal. at 155, so the low yield trade continues. the two-year at 140. we'll be right back.

that minutes left of trade >> i'm going with teradyne i mentioned it earlier they reported a phenomenal quarter -- actually january 27th the stock broke out to 20-year high, to $80 now it's come down more than 20%. i get why it's down today, but i think the companies do quite well i listened to the call again, the fundamentals are strong. they're in the semiconductor testing. so there's some controversy around it, but that's when you

have to buy these stocks aca akami, i love the story, cloud traverse, security, that's what they do. >> like adam jones, whichever one goes up. >> bought it when it got crushed, i sold at 280 -- sorry. i bought it. and look where it is now >> how closely is it tied to helpline risks >> look, that's a real risk, the supply chain is a real risk, but when you think about semis, you have to think they're going into every walk of life now there are cars, there are

fridge raters, they're everywhere, so you moved a lot of cyclicality qualcomm, for example, take them as an example -- >> that's what they say, they're a secular business now >> they used to be a dollar per phone content. now they'll get 1.50 skyworks, right? the rf players, they're like 9/30 for phone content so the content has increased dramatically, yeah, those are opportunities. i don't think they were ahead of themselves >> we've got 23 minutes left off the session. the nasdaq is just positive by a basis appoint. up next, we'll get an update on the coronavirus with the director of the national a institute of allergy and

diseases dr. anthony fauci he'll weigh in on whether we could sew more cases in the u.s. walmart after reporting results that were just shy of estimates. >> when you're taking risk and growing, some of these things will not work, and i'm okay with that. we've got more comments from the ceo, including his thoughts on e-commerce, coming up on "closing bell. you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated. their app makes trading quick and simple so you can strike when the time is right.

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oh, and happy birthday... or retirement... in advance. welcome back we have 19 minutes left. the major averages, you can see the nasdaq holding on to a fractional change. we're well off the session lows. now it's down 170, one of the worth performing sectors today , also goldman cost 8% the bottom is 2.5% intraday recovery in stocks.

>> on the film side, you tilts, only down about 0.4 of a half there's the context. >> nasdaq would be another record with that one basis point. shares of ge trading lower today on reports that the u.s. is weighing measures to halt delivery of its engines for a new airliners being developed. >> president trump taking to twitter today. i want china to buy our jet engines. i have seen some of the reg lakes being circulated and they are ridiculous. >> i always wonder when you see stories like this, you know, is

tess lag giving up some technology you're saying yes? >> on the film site -- just buy a plane, reverse engineer it. >> it's tricky we want they to buy more and more >> that's why i sold skyworks last week. we'll talk to anthony fauci when we return, as well as the market zone.

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the total confirmed indications now nearing 73,000 the total death toll topping 1800 in the u.s. there are 15 confirmed cases with eight of them in california mean while in corporate america, apple warning that the coronavirus will affect the guidance let's welcome in dr. anthony fauci. welcome back, dr. fauci, thanks for joining us. >> good to be with you what can you tell us right now about how long you expect many parts of the chinese economy, business to be shut down it's something that's unprecedented form the degree to which they have shut down travel think major cities, including

the entire 11 million-person city of wuhan, a big industrial hub, is really unprecedented their deciding to do that was their desire to make sure that the virus does not spread further throughout china it might actually work as unusual as such a move it. it looks like it might be lowing thins down, but we don't know. they're saying i think we need to give it a few more days to determine if that's real or the vulnerability that you generalitily see >> we're aware of what the san

diego is and how it spread >> it depends on how the virus is introduced. for example, the 15 cases that we had, 13 of them are travel related, two are spouses of the travelers. we immediately i did fitted them, isolated them and did contact tracen you get into trouble if people enter the country under the radar, and then you get multiple rounds of traz mission, if that happens, it might be difficult to get your arms around right away if you know that they're there, and you can trade them and do contact tracing, we may be able to keep it contained so it really is kind of something in flux that there's no guarantee whether or not we're going to be able to do it. hopefully we'll be able to effectively contain it.

i think you're direct that in very unusual that there are very few children, for example, let that he 15, 16 years old the median age is about 56 years old, and the people who get into trouble, namely who need to be hospitalized, some of whom need intensive care, are very heavily weighed towards elderly people and those withium lies conditions chronic heart disease, lung disease, diabetes, obesity, things like that so it's very he felt japan could potentially be on the cusp of a major epidemic, a major outbreak do you agree with that

japan has a substantially large number of people in which there were hundreds and hundreds of people >> do you disagree with the repatriation of the u.s. citizens >> two things, one i agree with it, because i was a part of the decision i think it was a good idea to get them out of there. get them here. which is unearingly equipped to take care of them. and we'll provide quarantine for

those who need it. >> what else have you learned about how it's transmitted it's easy to transmit that's been well established we know that a substantial number of people, but they don't have any symptoms. whether they can -- whether you can transmit when you are without symptoms, is still up in the air. it is likely not a major driver of the outbreak.

>> a vaccine even though we'll start clinical trials in about two months, that is the determined safety, a vaccine even at the best would not be available for well over a year, a year and a half. we are starting to empirically test drugs that were developed for other viruses to see if they work with this particular virus. so clinical trials are already starting to determines if they're effective. >> what about this idea that this virus will peter out. there any reason to believe that >> influenza, which is a season at virus certain dissipates and almost disappears when you get to april, may and june a number of other coronaviruses also do that the big unknown is whether this

virus will do that we have no way of knowing whether or not it's going to peter out as we get into warm weather. >> we do what's call mitigation. we try to contain it, if it really is a true global pandemic, it would be virtually impossibility to take infections totally out. you deal with it by social distancing, closing schools, those things that prevent the interaction of people. always alleges, dr. fauci, thanks for joining us.

>> good to be with us. >> be sure to teen in tonight, at 7:00 p.m. eastern time. >> let's get straight to the market zone, all the action going to the close >> we are down 0.6% on the dow, a bit soft, but still well off the lows, which was down 280 points >> cord any reagan spoke with ceo doug mcmillan. >> i think despite have been a q4 that was disappointing for revenues, earnings, overall the walmart story is still intact, stores are xwropgs, they're fixing the fundamentals, they're figuring out a way to use those

two. >> when you're taking risks and grows, some of they will things aren't going to work, as long as they're not too significant, but net-net, foot plus now with the acquisition, we've now gone a business than coming year will be about 50. >> we're learning house to put omnitogether. >> while not everything is going to win, doug mcmillon is okay with that. as a result, they reiterated that during the day, shares are higher by about 1 1/2. back over to you. >> courtney reagan, thank you. >> rahel has more.

>> shares of -- so this is after, i should mention they lowered the to bb-plus >> so s&p cites excuse risks to the turnaround strategy and a weaker profitability outlook, also stating a long history of acquisitions and expanse >> guys, back to you. >> thanks so much for that one what's your take on macy's >> they're doing a lot of the right things that they have to the company is in trouble, the department store model is general, but not doing we.

soaring today. morgan has the news. >> hey, wolf, that's right, coming back down to earth, now up only about 5%, as we head into the close the recent milestones have included the spaceship relocation, but as a service it's not expected to start until sometime this summer adam jon rae writing we just think the share price could use a breather they seems to be driven about awith a surge around space

flight, and guys, it comes on a day when spacex has also unveiled space tourism plans as well let's check on what's moving with indicate rogers now >> hey, sara, we have just tipped into negative territory the big story here, of course, is apple that's stock is lower, shaves off about 20 points after the company's warning, of course on -- they include seminames, and to the up side, were big tech names, microsoft and tesla as well as the fangs, bob pisani, over to you. >> indicate, we may see some modest moves to apple today, but a lot of money moving around look at smh, the semiconductor etf we talk about all the time

3m as well we're closing in the middle of a closing range us was down 280. at the worst, down nine points welcome to "closing bell." i'm wilfred frost. the dow trading lower by about 165 points or so there's the s&p 500 for you, down about a third of 1%, well off the lows, particularly with some of not headline emphasize moving announcements from apple. the nasdaq recovered enough intraday to be just positive and just at another record high. itself off the lows of the session.

and the russell 2000 index still more than 3% coming up, earnings results from lending club week talk to the ceo about the strength of the consumer and his business a very good afternoon to you all. steve, coming back to you, just to kick things off, clearly we have recovered to a record closing high do you get concerned that we're overstretched on a day of more concerns that perhaps could have weighed on the market? >> you want to be it go down some days. i think it was fairly rational but then it said, microsoft doesn't really have all that

much exposure to china, so it got rewarded i don't think the story is over. i think some of the concerned market sold down is what's going to be the next shoe to drop. the next one to cut their guidance going forward the stop line doesn't often tell the stories. investors had their excuse apple, the biggest company in the world given a warning. >> i think moth people think this is just one-off they not a change in the long-term stories. ened and we saw that in the

recoveries when the market was down six >> while hong kong, japan shanghai was actually flat >> to what stephen is the market ignore ignores and looking at the time impact that they're pumping into the market. >> you clearly have a market that thinking it's going to be a transitory issue, and meanwhile, you have stimulus out of the pboc frankly, the election, which you would think would be causing the election, causen people some angst, i think regardless of which side of the al ends up, so the market seems to be looking through this temporary disruption on both the demand and the supply side, and focusing on the back half of to 20, and more importantly 2021

might look likes after coming out this morning, they held their investor day, but disappointing on the fourth quarter. management number one, lowered expectations, two, they want the guidance going forward were at 1.9, and they also talked about the e-commerce, though e-commerce is still a small part they started to talk about bringing those losses in i think they are half a trillion

company, they are the low-cost operator, and management has been great i think investors are more than -- if they miss the next quarter, that would be interesting. meg tirrell has the details. >> this drug started two clinical trials, it's an experimental antiviral it's shown some promise as well as sars and mers. and it's had promising results, but a report from the weekend suggests that the studies are enrolling more slowly as hoped, as the requirements are strict >> meg, thanks so much for that. be sure to tune in tonight,

outbreak, coronavirus, 7:00 p.m. eastern right here on cnbc if a week or so ago people were thinking the worst is behind us, i don't think there's the same level of confident that that's the case >> when you watch the news, you watch the cnbc special, you get alaments so that should give you confidence to stay in the market >> were there any company that is you thought when apple came out last night, i'll bet their next, or around those industries >> i think everybody immediately looked at the supply chain for

apple, and we're well aware of the companies that have had to close stores there >> but, again, even if it was, it's not going to be more than a quarter or so. that is going to be a problem. we also know there's policy responses, not the least our own fit. he's said -- i'm talking about limiting the sales to china. that's what started to hit the stocks last we're.

that's my concern. that's why i sold skyworks, that's a major market for it leon coopeman isn't worked about the market he's here to give his take on where stocks are headed. >> i would say we're on the early stages of knocking on euphoria certain marks are in euphoria like tesla, energy is in pessimism. i'm trying to find things that make sense, but the conditions for a big decline are not present. >> sectors stand out to you? >> clearly coached has shown resilience here. other the first call it six or seven weeks. i don't think it's time for this

bull market to meet its end. i think surgical ways will be limited but i think that earnings growth is going to come dhow which should allow equities to grind higher the coronavirus should be transitory that's our biggest country that margins come unit pressure faster, that should allow this bull run to continue >> do you think to cooper man's point there's something indicative much the broader market sentiment >> i think it's that's been

pervasive to some time people are willing to own sales over earns, and every investor likes a good story to me, this is really just a phenomenon that's been going on for some time. finally trickling into the public markets in a way that i think some folks might have expected last year last year got a bit tripped up is that something to be concerned about? >> it ultimately accounting of concern the.

and the money flows in, and it makes perfect sense. >> i think this puts on a hold for a while the european trade yet again. >> thank you for joining the conversation apple issues a big warning, say it does not expect to immediate special forecasts. >>. later shares of lending club down other 90% we will talk about all of that

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right now exactly what will happen in the quarter, but we've said because of what's happening on the ground in china, our chinese business, not the rest of the world, we expect some impact, but we're not currently predicting that into our guidance. >> not significantly yesterday we have a global supply change, so we're looking to see how to balance that supply decline. it's something we're monitoring, and if anything significantly comes up, we'll certainly communicate that oliver, let's start with nike, jon donahoe saying it's not significantly impacted. >> walmart said a couple pennies, but supply chain is

something we're watching, particularly with footwear and apparel, and i would say apparel is tick already at risk, given that it turn over four times luxury goods is expecting tremendous declines. supply chains evolving, in particular lead times are about six months, so the summer product, and increasinginglincry that will be at risk, if it continues. >> oliver, are there any particular products and brands as well where you think there literally be empty shelves, or is that not really the case? >> i think it is the case. target is more at risk than walmart. target has less of a risk of food presence, walmart is about 55% grocery, and a lot of the

private label is made in china, over 50% that's something to watch. again it's also about the lead times, a lot of orders are in, and we won't be hitting a critical season until the holidays or back-to-school the real impact is three to six months from now. the entire supply chain, has so many items and goods from china that are part of the finished good these are all happening and 'involving and a lot of management teams just don't know how it will evolve. >> first it was threat of tariffs, and now it's this coronavirus. why is there still so much production happening in china? >> i think the infrastructure that exists in china, the system, the factories, how things have gotten drone there, it's been a country that's been very productive and successful

for a lot of companies that being said, sara, there has been a quick move in terms of diversifying the sourcing base and making changes to reach other regions. there's no doubt that china is much, much more important to the whole global economy than ever before it's about a third of luxury goods consumption on the demand side that's something we're watching, too, with much more immediate impact, as half of these stores are closed in china as well, and so many tourists travel the world. that's another aspect of the story that we're monitoring in particular as well >> oliver, just pivoting a bit, why did walmart turn around so successfully >> we're excited what they're doing for the long term. the story is bricks and clicks e-commerce growing at 30% next year, and comp guidance of 2.5%. also it's billions of free cash

flow it's a defensive stock as well it should fare well in this evolving environment where scale really matters all these factors, using machine learning, having a great grocery presence, not being undersold, the everyday low-price leader, that's prepared to compete against amazon, these are well-liked aspects, which have kept the stock at a good place, despite being a pretty high valuation. we like it for the long term we have an outperform rating on walmart as well. >> oliver, thank you for joining us. >> thank you for having me. speaking of nike, a press release naming some significant leadership changes at the company. i think among the biggest is andy campion now takes the role of c.o.o., and eric sprunk is going to be retiring

the other bed headline is heidi o'neal become the president of consumer and marketplace she has a bill rogue in the direct-to-consumers big, and matthew friend beings cfo. he's been inside nike since 2009 clearly john donahoe is putting his market on the company and realigning the chess pieces, i think the c.o.o., someone that wall street knows and has been friendly with analysts for a long time, takes over the number two role any of those outgoing seen as allies? it's not like there was a boardroom battle. >> i wouldn't make anything of it so far we have seen it would be consistent that's because parker stepped down at a time when nike had been doing well in the storm with corporate results so making his market but not

doing anything drastic. in the meantime an earnings alert with groupon. >> a tough quarter for the online marketplace eps came in at 7 cents adjusted. revenue also amiss, that came in at $612 million. a couple news leadership alerts for this company as well they have a new cfo. they also have two none members to its board of directors, so the stock is halted. they'll resume trading, and the conference call is tomorrow morning at 8:30, a tough quarter for groupon, and a miss on top and bottom lines back to you. >> rahel, thank you. shares of lending club lower after becoming the first fin-tech company to purchase a bank we'll discuss that and the company's latest earnings with

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shares of lending club down, but missing revenue expectation. also announcing the acquisition of online-only radius bank, making it the first fin-tech to buy a bank scott, thanks for joining us. >> thanks for having me. i want to start with the news of the acquisition. is it fair to say this was your route to acquire a bank charter yourself or is it going to be contained separately, the acquisition target >> no, you're absolutely correct. we see this as a truly transformative acquisition for the company, because what a bank charter does for lending club is allowing us to taking the lading loan, and combined it with a

demove gatherer, and it totally changes the profile of this business. >> i can understand the rationale to do that i wonder about the timing. why now? do you wish at all you had moved to have a formal bank charter earlier, given that some of the big traditional banks have much more developed online tech operates >> yes, the answer to the question why now, is now we're ready. with our q4 earnings, we have crossed over into gap profitability, which is an important prerequisite, and, you know, with this acquisition, we now clear the path to being able to, like i said, the other side of the balance sheet, and create a really category-defines experience for our members. >> the stock is sell off, scott, after hours, doesn't seem impressed with the deal, or maybe it's the lower growth expected in 2020 we've talked about how -- i

mean, the market cap, i think it was over $8 billion, now just barely a billion what is it that wall street doesn't understand or that has changed in terms of the expectation around this company? >> yeah, we're building something very new here. it's been hard for the market to understand what lens to look through, to see the value of lending club, but if you look at last year's results, we are the category leader and the fastest growing category of credit we achieved new records with our customer satisfaction on. >> that lending club is actually a top performing company in its new set of peers >> when you say that you can kind of cut out that the middle man, as it were, when you argued you can't boost investor

returns, what is the factor that allows you to do that? is it purely because you don't have the cost base of a bricks and more tar branch network? or are there other factors that differentiate you from the big banks as well? >> yeah, let me give that answer in two parts the first question is, i think what does bringing a bank do for you? the path to value is straightforward. one, we eliminate issuing bank fees from the system, right? that's part of the value chain that's currently leaking about $25 million annually two, we're able to replace high-cost funding warehouse lines with low-cost funding, which is deposits, another $15 million or so, and three, we can balance sheet just a smoot portion of the loans we originate and start earning net interest income. so those three things alone on a

cash basis are about $8 on million a year in income that's what the bank does. the question of lending club, how did we achieve that core pail space, that's using technology to keep it very, very simple for the user and very seamless, and by using this marketplace model. we have been able to survey a brought range of customers and get them the right product for them we're able to serve customers that banks traditional serve, so being able to say yes to more across this broad credit spectrum, we're driving down the cost of acquisition, and created a much more firkt are efficient marketing machine. scott, thank you for joining us all right. thank you. still to come here on "closing bell", we're joined by the ceo of choice hotels

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second quarter revenue forecast. that stock was the biggest weight on the dow. other china-related names also got hit off of back of that. wynn resorts and las vegas sands which have been battered on macao exposure, now up focusing on local experiences, you can see the stock is now down 25%. time for a cnbc news update with rahel solomon. president trump praising attorney general william barr, saying he has total confidence in him this is despite barr saying just last week that trump is making it impossibility for him to do his job. >> i do make his job harder, i agree with that. i think that's true. he's a very straight shooter we have a great attorney general. he's working very hard

he's working against a lot of people that don't want to see good things happen. about 160 americans suspected of being exposed to the coronavirus in china have been released. they are held for two weeks. another group is expected to be released on thursday and the nfl's all-time leader in passing yards and touchdowns is coming back for his 20th season. drew brees making the announcement on social media where else what hasn't been nailed down is a new contract to rereplace his two-year deal. back to you. thanks so much for that. a number of businesses also spelling out the impact of the coronavirus. apple saying it would miss its expectations medtronic also says the virus will hurt fourth quarter results, but that the magnitude

is different to quantify, macao will reopen on thursday. macao represents a significant source of revenue for companies line wynn and las vegas sands. you can see the shares ended the job high, in a note that business will likely remain slow speaking of travel, that industry is certainly feeling the impact of the coronavirus while choice hotels has a pretty small presence in china. all of their china-related locations are temporarily closed meantime shares of choice trading higher on the back of its quarterly record joining us from washington, d.c. is patrick patience. any more color you can give us on the hotel, how long you expect them to be closed >>. >> yeah. it's been impacted in a pretty significant wall it's also a transitory issue for

us we're following the guidelines of the government in klein with regard to how long the hotels will need to be closed so while we're, you know, paying attention to it, it is only seven of our 7,000 hotels that are in china so it's a very minimal impact to us, but we are watching it closely to make sure as it evolves we make sure what's happening with our teams in that market >> as it relates to the other thousands of hotels, aren't the chinese key drivers of the growth >> we're not at choice a vast majority of our hotels are located here in the u.s. about 2.5% of our travelers are international inbound. they come from all parts of the world, so the chinese inbound travelers are small on a relative basis we don't have a lot of inventory in the gateway cities. most are in the suburban,

interest state locations as well he. >> so patrick, let's pivot to the results in particular, your view, strong numbers, congrats on that. is that very much a reflection of strong u.s. gdp how tightly do the numbers tend to be correlated to that >> it's a good reflection that the strategy we're executing is working. we had a strong financial performance in to 19, despite the fact that rev-par, the industry metric for revenue did soften somewhat. a choice we are building a significant presence we aded 29,000 upscale rooms last year. we're really executing a strategy to build bran for the customer of tomorrow, so we're pushing into the upscale segment with our cambria brand and our hotel collection, which is a number of butene and resort

hotels we've seen significant upticks in those two brands fors us. >> how hard has it been for you to compete with the bigger guys where they have so much scale as it relates to their loyalty program? >> for us it's a real opportunity. we don't have a lot of upscale brands, so the open markets for new hotel developers to come in and build a cambria is significant. we only have 50 open today we have about 27 cambrias under construction, but last year we added key markets like boston, houston, milwaukee, phoenix. what's coming next year is detroit, minneapolis, so we're filling in the map, and some of the other competitors already have a lot of inventory, so it's giving us an opportunity to attract new developers who are really focused on the timestar being travelers, and the cambria brand has taken off. we received the highest rating

from j.d. power for an upscale limited-service brand. our guests are loving it. >> patrick, thanks for joining us. >> thank you. up next, president trump pardoning former junk bond king michael milkin the latest from washington straight ahead. pl us jeff bezos taking a big step to protect the planet detail coming up

president trump pardoning former junk bond king michael milkin eamon, did this come as a big surprise >> reporter: it did come as a surprise, but one official told me today this was a gametime decision by the president of the united states to actually go ahead and issue these pardons today. but ultimately michael milkin's case had been in the works for a long time. the senior administration official telling me that folks close to michael milkin had been bringing it up with members of this administration since they came into office this has been percolating for a long time. the part today now removes sort

of the league stain here from michael milkin's legacy. if you look at the history there, it's a long one he was indicted, pleaded guilty in the end to six counts of securities fraud back in 1990. he was sentence the to ten years in prison. he served almost two years of that after the sentence was ultimately reduced he paid $600 million in fines and restitution. he faced a lifetime ban from the securities industry, and white house official tells me today that that ban from the securities industry is not affected by today's pardon, guys a long list of people pardoned by the president today, so we'll look at a lot of those officials, people telling me also key was the support of a number of prominent people including rupert murdoch, rich ar la frack, a lot of names that you week familiar with still to come here on

"closing bell", we'll get a pulse on the defense sector. we're joined but the ceo of hung are huntington ialngs. and calls for big changes at the facebook so what are you working on?

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company warding the cash flow guidance could take longer to achieve than previously expected this comes on the heels of mixed q4 earnings. joining us is mike petters >> great to have you here. >> thank you for having me we talk about autonomous cars, unmanned undersea vehicles, you're betting big on that recent acquisition, and i think it was a hot topic in investor day. i'm wondering what your outlook for that is and how you dizzy is be grating with the mix of your more traditional manned ships. >> that's a long topic, and a big discussion, but we see that -- this is a product we think that at the move the navy uses it, the more they'll want to use it. it's a range from very small

autonomous unmanned undersea vehicles to fairly large once, our acquisition of hydroid gave us a space and we see these platforms as amplification of the platforms we build. >> what's your outlook for the budget proposal from the white house last week, in it the navy is proposes is cut to the shipbuilding budget? >> year over year the proposal was cut, but still historically high compared to like the last 30 years the buckets are typical more so in the last three, four years, they've been driven by strategy. the national security strategy has been driving the budget. they're making tradeoffs the budget submission is just the first step in a process that we go through every year, and there's trade space there. we'll see how it works itself out.

i'm pretty optimistic about where we are >> earlier today roger chron not seemed that we couldsee a budget pressed out before the presidential election? >> i agree with that i think what you're going to see is that congress will be interested they're already working, and going to move forward as quickly as they possibly can. >> this morning that jet engines with sales to china might get barned, another example everywhere the u.s. administration has fear that the chinese steal intellectual property how easy is that to do with physical related equipment has china caught up with the pace >> i think all of us in the defense space have felt like we've been under attack for many years on this. it's not about taking product, but about taking designs and intellectual property. so, you know we get to a place

where we certify something that meets a formal military requirement. that's something that we put years of work into, and then to have that evaporate into the space, and they just have the answer, that's not fair. so we've been -- we're very sophisticated in the way that we guard and protect our information, and have really been on the front edge of that >> how good is china's military technology now >> i think they're good. i think you have to give them credit for the way that they have come along. they're very focused they're focused in their region, but i also think that, you know, if you actually were going to have something to turn into a bad day, i would -- i think that there's no question that we're still in a, you know, ship for ship we in a much better place than they are. it's about demonstrating presence if were our allies sees a chinese ship somewhere, the next

question is where is the american ship? that's the game that's going on. it's not really kinetic. >> to that point, wall street has been focusing on margins, free cash flow, and how quickly those increases could could man it's a reason we saw the stock slip and down the last week over reported earnings. but huntington ingalls is setting on a backlog stretching to the next decade given the elevated level of certainty or visibility over the come years what do you see the risks. >> first of all we always worry -- we always worry to ensure -- work to ensure we execute well and we want the street to have confidence that we execute to the best of our ability on the backlog. the next risk is is the industry has to be in a place where it can support wherever the government wants to go with capabilities we're investing in that and working very hard to create that agility to do that

but we're in a time frame where there is going to be some vibration on that. so that's something we'll watch closely. >> mike petters ceo and president of hunting ton ingals industry. >> thank you, mike and thank you to morgan brennan. up next yun welcome conversation elon musk hachced oi wards following bill gates latest car purchase we'll fill you in after the we'll fill you in after the break. on a flexible wealth plan. and with new brokerage accounts, your cash is automatically invested at a rate that's at least 20 times more than other advisory firms. personalized advice. unmatched value. at fidelity, you can have both.

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amazon's jeff bezos pledging $10 billion to fight climate change which he calls the biggest threat to our planet he says the funds will go toward the creation of the bezos earth funding funding scientists and activists and non-governmental organizations. he says he will issue grants this summer. i mean, clearly an enormous and generous gift. we don't know how it's going to be structured yet. my question always, despite the amazing pledge of these sorts, is exactly how it's structured does it mean you get past having to make a sale of stock and therefore pay any capital gains by realizing gains usually there is ways around that which raises the question whether it's right oh redirect funds that way. >> i'm not sure that explains

the instagram post he publicized. it's part of the bigger public profile he has been building for himself. he basically earned more than that just this year alone in what the six, seven weeks of the year the stock has marked up almost 16 billion for himself speaking of billionaires bill galts scoring a new set of wheel, opting for the all-electric porsche rather than tesla. and elon musk had choice wards react tots one user asking by gates decided to buy the porsche not a tesla. musk applying his conversation was gates have been underwhelming, to be honest. >> bit of billionaire tech genius sour grapes back there. but. >> we know elon musk takes things personally. >> i like bill gates excited by -- not a little purchase for most still a frrn pu he finds enjoyment. another billionaire george soros

calling for another billionaire and kmerl sandrock who a billionaire too. removed from control of facebook in a letter to the financial times" soros arguing the social media refuse ds to remove flikting ads was helping donald trump. soros writing if there was in doubt they should err on the side of caution. it's unlikely facebook will follow the course. interesting read, keeps that debate going, the criticism clearly on the other side mike bloomberg is making news as all candidates are hard to say it's just helping president trump get re-elected certainly there is room for improvement on the rules that facebook is imposing >> i was watching "squawk alley. roger mcnamee has been critical of facebook on raising its hand for regulation and not going far enough and saying soros is meant to the european audience. he is not as politically charged

in europe and getting coverage of the regulators there to get them to regulate the more politicking ads. >> on that point, mark zuk rk's self-imposed regulation. market closing down s&p about 0.3% >> and nasdaq a record high. "fast money" begins now. >> speaking of the nasdaq live from the nasdaq, market site in new york he is's time square i'm brian sullivan trade resist tonight are tim city bike seymour. brian kelly and karen finerman and guy adami. coronavirus concerns taking down apple and the market but wal-mart warned and the market barely budged. are they saying the worst is behind us? plus tesla to 1,200. a bull case for the electric auto maker that will make eyes pop. and check out the mystery chart. almost