tv Closing Bell CNBC June 28, 2021 3:00pm-5:00pm EDT
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it was a double dip. >> so he says it's just as much of a risk to let it run hot and then slam on the brakes. should we wrap it up, at least for this monday? >> he yes. thank you for watching "closing bell" starts now. and stye cool wherever you are. welcome to the closing ball. >> the dow, as wilfred mentioned, lagging today, on news that it's unlikely to secure faa certification for the jets under mid to late 2023. and energy is lagging as well all down sharply and tech knocks is the big win today.
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we'll speak with the ceo of imax, and as we approach the halfway point, we'll get the playbook for that group of stocks first let's focus on the big stories. joining us to talk about huge moves in biotech today is alethia young from canter fitzgerald let's start with mike? >> below the surface, we see a lot of turnover. resell-off in the resell race, really the slack being taken up
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by the stable growth areas in fact, yields have been compressed today, but as they bottomed around june, every time you think the rotational gears are getting stripped a bit, they lock in, and even though the average stock is down appreciably, pure value is down 1.25%, pure growth is up 1.25%, so it's a seesaw session oog way as looking at value growth it's attentive to how much -- the way it's operating today, it's really vastly outperforming invite standard growth and value measures this years. it's operating as growth with earnings momentum. health care is a huge slug of it that's an interesting way to think it's not necessarily all
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one or another thing look at how it trades exactly with the ipo etf, and the cloud etf. it's the s.a.s. long-term, as opposed to the nasdaq 100, which is stable dom nachbt profitable growth it looks like a moment of truth hire as to whether this is a bound in those themes or if there's something more behind it >> lower treasury yield certainly a defining characteristic lately, mike. the delta variant is spreading around the world australia was the envy of the
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world. new uk travel restrictions from european countries most of the world is not vaccinated i wonder if what we're seeing in the bond market, trickling into the u.s. market has to do with lower global growth. >> i absolute ly think that's a factor along with the idea that's really been sinking into the fed meeting, maybe we won't run as people thought, but absolutely, i think the weekend news flow was very much in the direction of we're not quite out of the woods yet globally. >> spain and portugal imposing restrictions on british travel. >> not that it's easy in the british government's rules for the people to travel in the first place. >> they're all quite strict, but they're worried about the variant. >> it's just absurd. if you're vaccinated, they
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should be relaxes things. >> mike mentioned the soaring biotech names, especially the ark names, as experiment an treatment indicates crispr and the again nommic phones that inclusion names like this. >> and join us us is alethia young. as far as big breakthroughs go, how do you see this one? >> it's incredibly new technology that's outside the body, but this is one where they actually -- use the iv, so this is the first time we have seen that, and that could be a whole
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new landscape -- early data is very exciting. >> i they we call the end of it. the stock is up 50t%. what kind of marketing does this open >> i think it openings -- many of them have had suction outside the body, and uses inside, it's -- it's incredible -- >> alethia, we'll have to leave it there on this occasion. not brilliant sound, but thank you for joining us julia has news on facebook. >> facebook shares are moving higher on news that a district judge has dismissed the ftc's
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antitrust lawsuit. there's still a lawsuit filed by the state attorneys general, but i just want to read a bit of the court's opinion here the opinion says that, though the court does not agree with all of facebook's contentions, it ultimately concluded that the complaint is legally insufficient and therefore must be dismissed it looks like the attorneys general complaint may be dismissed as well. but ultimately they're saying -- the argument that facebook has monopoly power in the market could not be proved, and so that is what is at the core of this decision here. we see facebook shares are now up nearly 4% on this news. i'll continue to dig through this opinion, and we will be getting back to you more, but
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this was filed in december, and march facebook asked the federal judge to dismiss the lawsuit and we'll continue to dig into this opinion here. back over to you. >> leading to a 3% to 4% jump for facebook. >> enough to get it over the $1 trillion cap number. after the break, facebook -- talking about big dollars, we'll discuss that with mark maheney that's next.
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oh my gosh, oh my gosh, oh my gosh! facebook shares rallies after a federal district court dismissed the antitrust suit our next guest says virtual reality to be the next thing to drive the stock. mark, great to see you as always particularly good timing in terms of the decision we just got is that warranted off the back of that decision. >> yes, it is. you're right, there's a lot of luck in that timing. what we wrote this morning or over the weekend is we thought
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there was a series of rerating catalysts. one was that the antitrust risk that facebook faced was a lot less than the other platforms, precisely because they don't own a marketplace, and if there were a trigger event that would make people realize that, you would get a reratirerating pure luck in the timing. i think most people if they talk to their aarons probably realize that as well like the enormous growth in tiktok, it's a very vibrant office i think this is pretty clear in the case of facebook. >> it's up 3.2% on this news, but that's not really a rerating, as it was. is there more to come from that particular catalyst? >> i would think so. look, there's no question in my
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mind you've had about a 10% haircut over the last couple years. these are very large platforms facebook is absolutely a very later platform and should be closely scrutinized. our view is it's been over-penalized you get a clear event like this, wait a second, we're paying 18 times earnings if the strip at, which the point of our note is it's a lot greater than people realize, and it's relatively successful, too. so that's what makes us uber bullish, if you will >> so now past a trillion in market cap, market what do you thinksi worth worth? >> we have a $400 price target if you get a rerating opportunity, the stock could go higher than that, so 400 is
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price target for us by the end of the year. >> how big of a catalyst, and also talk us through what we can expect to be using that sort of technology for in the next couple years is it just gaming? or are we going to be, god forbid, taking the next steps from zoom to people in our living rooms virtually. >> let me work backwards facebook has never disclosed what they're getting out of the oculus/q oculus/quest that means the core business is more profitable than we all realized that means the stock is actually 18 times earning for a leading asset with less regulatory risk than a few hours ago, that's interest, but this
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is a very attractively priced business for an asset. very few companies can do that at this scale. the virtual reality interest issing this selling about 2 million headsets a quarter they have a hit on their heads i demoed it myself, but it's a truly immersive experience they have a hit on their hands they have software sales on top of that. so it's a nice diversification the company opening that they're greater than game. that's still tbd >> is this a bit virtual reality, where they're going to ultimately take our private/personal data to start selling it >> well, it's possible they do that right now the only revenue model
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is the sale of the headsets. i bought the zombie game, that's facebook's revenue they give a cut of that to the developer. if you become big enough, if of 10 million units or a million units, then can you start extracting, you know, attack x a commission they wouldn't have to use it to monetize oculus, if it becomes big enough >> mark mahaney, what good timing for us. you make your luck thank for you joining us >> thank you we've got just about 43 minutes left of trade. you will see a tick higher in the nasdaq thank you for that
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move from facebook nasdaq has been the stronger all day long, up 0.8% tracking a record low, while the dow is still down s&p 500 until a tenth of a percent. still ahead on the show, the results of our laters council survey, showing a vast majority of companies are have you discussions at the board level about cyber-risks. we'll speak with kevin mandia. and check out some of the moves. crypto and ether seeing a nice on pop they've been hammered lately, but a reversal of that trend we'll be right back.
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with free remote hearing checks and consultations by our licensed hearing professionals. soak up the sounds of summer with $450 off eargo neo hifi. act now for this limited time offer. and if you're an active or retired federal employee you may qualify to get eargo at no cost to you. welcome back higher earners in higher tax states looking for relief from
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levies may not find it in the latest proposals coming out of washington our robert frank with the story. >> sara, the good news for the high earners is bernie sanders is, for the first time supporting some salt relief. the bad news is it will likely only be a partial repeat his budget inclusion $120 billion, a third of the cost of what a total repeal would cost the u.s. in terms of revenue discussions right now are focused on lifting the cap of those earninging less than $400,000, that would ensure the ultra--wealthy don't benefit from a s.a.l.t. repeat and would cost less than a full repeat this is all in the very early stages members of the salt caucus saying they're still holding out.
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they say it hurts the middle class, so according to them, repealing s.a.l.t. also hurts the middle class. >> robert, it's such an interesting debait, which i guess we had in reverse back in 2017, 2018 if you were to look purely at whether it makes sense and the options on the table of which taxes to change, this one doesn't really make sense, even though i'm saying this from someone who lives and works in manhattan if the deduction was reinstated. >> that is a truth that many democrats will not admit it doesn't make sense for two roars. one is the cost, $80 billion, and $400 billion, and to this point this is a tax that benefits the wealthy, 57% of the benefits of a full repeal go to the 1% those are two facts just hard for the democrats, especially the progressives to get around.
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>> robert frank, thanks so much. still ahead, the ceo of imax joins us to discuss whether the new showings is start of the summer wakening at the box office plus there is just two full trading days left. it's been a strong one and we'll speak with heious look the ten-year is back below 5% back in a couple
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offering it lost 2 billion in the second quarter. shares are down 7% eithery searching after anouns it's buys a company. josh silverman is on with jim cramer tonight time for a news update rahel? >> hello, everyone here is your cnbc news update. juul has agreed to pay $30 million to north carolina, to settle a lawsuit over market to go teens it's the first agreement of its kind with a state, and it would take more action to understate juvenile vaping. and cease-fire has been
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delayed after eight months of fighting, which has left hundreds of thousands of people. miles of interstate remain closed with mudslides. they happened following heavy rainfall near an area burned by wildfires last year. sara, back to you. >> rahel, thank you. 30 minute to say go. here's where we stand. very mixed picture on wall street some real underperformance from value today and cyclicals, growth is outperforming thanks to communication services and technology the nasdaq is tracking for a record close, up 1%. the dow is still down 180 points nvidia, facebook, appearing, microsoft, amazon, intel, that's what's driving the market.
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after the break, is your company prepared for a cyberhack we'll share the latest results from our survey. and we'll ask kevin mandia how companies can better protect themselves hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions
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welcome back, the results of our latest survey show that executives and board members senior paying close attention to cyberattacks christina has more >> if you had no shows, would you get into hacker demands? colonial pipeline paid ransom to a russian hacking group to restore service. nearly half of all ceos say colonian pipeline had no choice but to pay that ransom, including more than 60% of the kruismt fos, and and a recent spat of attacks ha disrupted major food chains and revealed no firm, big or small, is safe from a cyberattack cfos are definitely on the
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lookout. 85% say their company's board has had a formal discussion about recent cybersecurity events and their aftermath but confidence remains strong. more than half of all cfos surveyed said their company is better protected than it was just a year ago. words we all want to hear, especially with cybercrime on the forefront. sara, back to you. >> sticking with hacking, cybersecurcy cybersecurity ceo kevin mandia with fireeye, are companies truly prepared are they protecting themselves against a new wave >> yeah, we are. you get worried about it with the press on the colonial pipeline, but the reality is
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ivan do it for 28 years. what we are seeing is just plain bold there's an unlimited amount of opportunities to hack us, and no risks or repercussions for those doing the intrusions over time you will see successful intrusions. we can't play perfect defense every day. >> what about the ransom it feels like the hackers are getting more organize, making this a business. >> right do companies have an option of not paying does it tell you anything that the justice department was able to retrieve that bitcoin back? >> nobody wants to pay a criminal when they're getting extorted that's not your first option a lot of times ear making a risk/benefit analysis. you saw the poll, that boards are being briefed on what to do
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about it awareness has never been higher. no within begin with the default of hey, let's pay this i think everybody starts, who don't pay, but in you're going to do that, you have to make sure you're resilient, and should ransomware attack work, you with get up and running in hours, not days, and you not the risks you're taking. so the bottom line -- by the way, also, your other remarks, it's great we got some of the money back, and when you have an anonymous currency, you are enabling that anonymity. >> how can people protect against this i ask that in light of the fact if they could subscribe to the very best level of service you offer, would it make them
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perfectly secure >> you never get perfect security even the best defense can give up a goal from time to time, but i tell what you you do ahead of time if you're on a board, you ask the cfo and the i.t. department, what are the critical assets and what would happy if they were encrypted and unusable how resilient are we so every company should figure out here's what's critical, here are our backups, and our backups are secure so the bottom line, it's disaster recovery time when you have an outbreak due to ransomware with no risks or repercussions, every us will have to deal with this over time >> is the government being tough enough when it comes to policing this obviously they're playing a big role is this the kind of thing that can be dealt with by talks
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or t or should there be more severe sanctions? >> you have to respond as a nation when colonial pipeline gets hit, it's a national problem. you can't just say let's outlaw ransomware payments, so it puts the burden on just the private sector to solve the problem. we have to have diplomacy, risks and repercussions, and have to consider all the tools of diplomacy to back the desired outcome that we want, which quite frankly, is to make sure there's risks for those who take advantage of cyberspace and the anonymity it offering. >> you mentioned bitcoin and crypto earlier, how much that is that powered or enabled the big rise we have seen, if you were to heavily regulate so it couldn't be anonymous. would it all go away in an instant? >> i don't know about an
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instant, but there's a direct correlation. we respond to security breaches s. period. as we're having this conversation, we're responding to well over 100 of them when you look at the rise of ran so thatwear, it rises with the rise of anonymous digital occurrencies no question it's an enabler, and now can you commit crime from 10,000 miles away in a safe harbor, and you have unlimited opportunities to do so cu kevin, thank you for joining us. facebook tops $1 trillion in revenue cap. listen to us live and on the go, with the cnbc app. we'll be right back here on "closing bell.
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don't get mad. get e*trade and take charge of your finances today. ♪♪ ♪ 15 minutes after the trading day, we are now in the -- cnbc's senior market mike santoli is here, and today we have shannon sikoshio with is's well. both the nasdaq and s&p are on track for record closes, as we stand -- a big part of that. mike, it's a rotation day. >> without a doubt when the market plays defense lately, it goes toward the
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mostly stable commodities. it's been tough to tactively navigate that, but here in the nasdaq, it's been a calm up trend. i think one net benefit is that it's become hard for any individual to become overconfident they have this thing figured out. actu actually when people think they have it sorted, it's rallying. consumer staples and health care, those are the outperformers. >> although staples and utilities have -- in nenl they've not been flashing those signs.
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they are beneficiariaries at this point >> i love one night in your note, sharon what a time to be barbell. to what extent does that worry you? i think if you try to think about companies that are well positioned, it's hard for me to find a lot wrong with some of the big technology names they certainly have been somewhat stagnant. if you look at the cyclical trade, to mike's point, there's a bit of a rotation here that's probably some positions ahead of the quarter i think that will continue over the next couple days i'm not altogether surprised by
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that if i look at something like industrials, which i think have very long tail, even with a smaller infrastructure bill, you know, i look at this in terms of what i think is an overall sort of increase or acceleration in global economic growth yields? and it does point to company that is have done well, along with some of the cyclical plays are more of a long duration. >> i also want to mention the four biotech stocks that are zooming. these are some of the cathie wood's biggest assets. they were able to work on a genetic mutation inside the body, which is very promising. how have these stocks done obviously they're having a tremendous day today
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>> they've been roaring today. this subset of biotech, where its incredibly promising, but now you see it in practice, it's really about this particular vector of trying to figure things out on the genetic treatment side it's exciting. i just don't know if it's something that, you want to extrapolate through the whole industry. >> great bounce back. >> no doubt about it. >> also a lot of good healthcare break can breakthroughs. >> it wasn't that long ago we were talking about c-- crispr where you so see your -- >> this is alter genetic code.
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facebook is rallies after a fell coral came down on its side in two key cases >> there were two key opinions today. the judge dismissed the attorneys general case back in december, saying there's no precedent for such a long delay after an acquisition before seeking a remedy the judge also dismissed the ftc complaint, saying that the ftc failed to establish that facebook this monopoly power shares are up more than 4% this could also bode well for the other tech giants. we also saw amazon moving higher on this news guys, back over to. >> the entire nasdaq as well
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julia, thank you very much shannon, it's a step forward clearly it's not over. the ftc can now dismiss a new complaint, but it does show there are potential legal hurdles. do you buy the stock on this news >> we already own this stock on the news if you didn't and you were concerned, i think it's definitely at play there is two thinks that are really interesting the judge didn't necessarily say the ftc could take issue with previous acquisition, but number two, it goes back to proving monopoly pow earp. the total addressable mark is unlimited, so it will be difficult for the ftc to prove that it has a hold -- and will likely continue to, as we expand outside of the developed markets on the social media side
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i still think this is going to be an overhang to the stock at certain periods, and there may likely be fines in the future, but overall, this is not a reason to avoid the stock at this juncture. >> it also puts it into serious breakout territory 4% charted, it's rarefied air. >> it's not as if the market was crouched and worried, but it was an extra boost i think down the road, you can have -- and you can be engaged in the competitive behavior. i'm sure the government will come back with something else, but to me the trillion dollar market cap was when, not if. 25 times time, i mean, that's just very easy math for a market of this time so who's in the trillion dollar club
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microsoft. >> apple and microsoft are the two. amazon, alphabet so basically the faang minus net netflix. >> they're tiny. it's pathetic. shares of boeing are weighing heavily on the dow today the 777-x plane is like lieutenant not to receive approval undulate 2023, the faa said it will not approve any aircraft unless it meets or standards. boeing has been developing the triple -- 777x.
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shannon, where do you stand? >> if this was pre-737 max, you would have had investors spooked on this. this is a different buyer for boeing since the 737 max and certainly since march and april of last year there's a bit of an impediment here for buyer to want to step in, but this is still a company that's been fairly well supported by the u.s. government, operates in a very long duration that frankly is an oligopoly, so unless you are setting these metrics for cash flow over the course of the next 12 months, i don't necessarily think this will hinder the story or change the nair fifty for boeing >> also, if you bought the dip
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on the delays, you would be rewarded it's really about travel demand and covid-19, and there are some potential worries. >> there were multiple waves of dips, so you have -- without a dowel, it really is about, not really just reopening, but the sustainability of global travel demand coming back, and back on getting rebuilt slowly, but again, to shannon's point, it really was, up 400 at the peak, the stock was just feeding off the this sense of search, we knew what the cash flow would be for years and years, and now it's getting cried for being back in that direction so i think it's going to be very headline-sensitive for a while, i think. >> energy by far the worth performing sector pippa stevens looking at some of the biggest losers. >> hey, sara, yeah, energy by
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far the worst, down 3.5% every stock within the group is in the red they are among the biggest loseser, shoaf ron dipping 3%, acting as one biggest drags on the do you today's decline comes amid a dip in oil prices. but the sector is still up more than 20% >> shannon, where do you stand on this? a lot of analysts are bullish on the price of oil demand, but then there's the opec question >> well, we just continue to see this from a long-term
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perspective. it's not it's really about overall efficiency improving it's also about institutional demand they're going to continue to look at fossil fuel as an area they want to be underweight. if you have enjoyed this run, i feel some of the analysts are a bit optimistic about the po te tenchal mismatch i think people will take a step back through the middle of this year. >> mike, even after the strong one with the commodity itselves, there's rob for it to even out >> yes, no doubt >> there's still head room, but you have this happening with the
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pullbacks in the stock, just as crude oil got to mid 2018 levels you also did start to shear a love of the bull case on the -- but we didn't hear people we should sell it it doesn't always go step by step. >> peloton and zoom are also up. what are you seeing in the market internals >> the internals have been a bit soft it's been a selective market that's the kip way of saying breadth has lagged so it's been the case for a little while now both kind of economic bellwether
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groups, and they're just about crossing semis are pulling up and outperforming. they're coming from different directions the volatility index has perked up a bit it's still holding into the down trend. >> we have just under one minute left as we stands, we are set for a record close on the s&p and the nasdaq the dow, though, is lower today. tech, communications service are very much at the top of the bar.
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ty bo-- at the bottom of the pie financials we have a record close for the s&p 500 and for the nasdaq up a full percent just the dow lower it was a growth-y kind of day. welcome back to "closing bell. take a loot as how we finished the day. the dow does not tell a story. that's because some of the industrial companies, the financials in the dow were the losers today boeing the biggest drag down
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strength in names like microsoft, and 3m. s&p 500 closing at a record high technology took us there utilities, consumer discretionary, health care stable, so a mix of the defensive groups, and technology, which is also in that boat lately the nasdaq at a record high as well biggest contributions, nvidia, facebook, microsoft and appear 8 all worked on this day where technology shined. coming up this hour, box office bonanza. we'll discuss a huge debite for "f9. and we'll the cofounders of blue owl, this stock is up, and wool
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talk about the business. first up, though, on the markets, shannon is still with us rod von lipsy, welcome to you. first, mime so the dow underperform, is it the slowing global growth theme? >> yeah, if you want to call it the catalyst the air out of that reflags type of idea, in addition to invite news of upticking cases, also, the supply constrapintsconstraii think all those things mixing together with the idea, too, we've had a record number of companies raise their own earnings guidance for this qua
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quarter. >> when you see these report closes, is that a sign to take some profits >> generally when the market reaches a new high, it goes on to reach another new high. investors are certainly worried. light volume today, so a lot of movement in exchanging places, but we think this continued strength in the market is warranted. >> what about the reflation value trade that was so dom nap. is that over >> i think it's taking a bit of a breather there we really think with a strong economy, with bond yields as low as they are, with great value -- especially because we think that interest rates are going to continue to
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move their way upwards, so the value trade is not over. maybe the rotation into the back door is done, and people are thinking about what comes next, but we don't think we're done with value >> how concerned are you about rate hikes or as long as it happens steadily, we can continue to go higher >> i hate to sound naive, but when you listen to powell et cetera comments, even the press comps after, he talks about normal normalization. ahead of that, as we start to talk about the tapering of bond purchasing, and change that would move those hikes up soon er however, i continue to look at overall the acceleration of
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economic growth, we haven't seen the rest of developed europe participate yet, and there's a lot of stimulus, and i don't think you should under-appreciate the amount of stimulus that's been put in the economy. i worry a little lels about rates hikes. i worry a little more about the perception that inflation is getting out of control >> david rosenberg, who is definitely in the transitory camp says to watch materials, which he says is the market's barometer for inflation, which has rolled over. >> you know, i don't think that's the ver, but without a doubt, less concerned about it
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in overshooting inflation, whether it's become the fed kind of says we're on the case or just because, you know, the overshoot in commodities has been unwound to a fair degree. we've justin living with this potential threat for a while with facebook crossing a trillion, what is your positioning within the tech space. >> it was expensive and just got more expensive today we would like our investors to look at the maul and semiwatch tech where we see valuations that are much more attractive we think those type of green technologies that would receive some benefit from infrastructure plan, or will receive some benefit from carbon-neutral type
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of strategies, looking forward we like small and mid caps, we think the megatap names are fully valued at this point in time. >> rod and shannon, thanks for being here citi out with its mark playbook warning investors to hold a cautious view in the next few months great to see you, as always. thanks for joining us. the thing that stands out to me on this report is that, in the short term, at least, you're fairly cautious. >> yeah, unfortunately hitting new highs, leading to new highs, leading to new highs, assumes that markets never correct, which doesn't quite main sense, but the idea of complacent investors, who showed up in a survey we just completed, and
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they seem pretty comfortable with earnings outlooks, a number of things, except for they think there will be stickier inflation, 46% thought 9 to 12 months of inflation. they're worried about the fed raising rates in the second half, the majority of them, of next year, and, you know, if we look to our credit strategy team, they're looking at peak qe historically that's meant this problems in the market i think to answer it quickly, wilfred, there's four things that could coalesce, including taxation, tapering, maybe more inflation concerns, and then lastly margin pressures. >> so, on top of that, how do you feel like your clients are positioned coming into this period, having water out that survey >> so we think they are positioned long in the market, but there's been a slight uptick
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of concern for example, what we have seen is they raised their cash a little bit, and not just 4%, as a percent of assets up from 3% in march they have shifted a little in terms of preferences for the year they think utilities will continue to do poorly. even tech is losing some of its adhe adherence. i would say one other thing. they look europe more than they like the u.s., which is kind of interesting, and they still like commodities. i believe there's still a value trade coming labor cost could be the next area for inflationary pressure. >> so your recommendations out of this, you like value, even though you're cautious on the overall market >> sara, what we do is we liked value right now. we think later this year there will be a push back to growth. some of the pressures -- let me
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give you one example, 2% of the workforce is currently out of the workforce, because they don't have the ability to have daycare or kids back in school they probably will come back in september, october, november, so some of that should ease later this year, but in the meantime it's still a phenomenon. i almost view -- if you think of the last decade or so, growth outperforming value, so investors are conditioned to buy growth as a result, one of the things i worry about is the idea that value is a dalliance, a fling, and then they go back to that you are true love, growth. >> what does that mean of those two groups, where you should take some profits heading into these challenges in august and september? when is the most ripe for profit-taking and caution? >> unfortunately they're both ripe i think the value gets more pop.
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for example, the citi's view for ten-year treasury yield is just for year end, up from current levels should that played out, value always tends to do well. cyclicals tend to do really well in that environment. investors -- i guess i take a bit of a different take. when the fed came out and made its comments, investors ran for safety safety bam the dollar -- and became big-tech cap. not consumer staples and they backed away from some of the cyclicals. we have the reopening.
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>> yeah, the steeper the yield curve, the better for them they are very, very closely linked so bond yields move up, financials outperform, they're the biggest group in value, and tech is the biggest group in growth it's a formula that kind of gets you there. later this year we can see things change, but over the next few months, i probably would prefer it be on a relative basis. >> thank you so much for joining us great to see you as always >> my pleasure, guys take care. up next, whether small caps
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or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. the russell 2000 closed in the red. s&p 500 and nasdaq posted record closes, but our next guest, b of a global research, jill carey hall welcome back, jill. >> thanks. what does that tell you and why do you think it reverses. >> we've seen a bit of a breather in performance from some of the styles that had work previously in terms of small caps, because, but we think they look well positioned as we move forward in the second half here. even though we're more advanced
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in some other areas of the world, i don't think valuations have been reflecting that. small caps have still been trading at about a 15% discount, the large caps typically trade about a 3% premium a lot of the cyclicals are still trading at a pretty big discount the macro data is still sup supportive that, you know, good spending held up well, but i think that should benefit small caps as we look forward. >> do we need a turnaround on the whole growth/inflation argument they have gone back below 150. >> we are expecting higher treasury yields from here, looking for 1.9% by year end if we're in a backdrop of rising treasury yields that tends to be supportive for small caps, but
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overall, interest rates haven't necessarilier the more correlated, so i think, you know, credit conditions remain supporters global macro remains supportive. the ism is certainly within risk, but at least in the near term we're expecting the ism to remain at elevated levels that we have seen we're continues to monitor the macro data, but our regime indicator tells us we're still in mid cycle, which tends to be a backdrop from small caps and value stocks continue to outperform you do tent to see these styles typically work. when profits growth peaks out that's when you want to -- >> that said, jill, in this inflationary environment, particularly the possibility of labor costs continues to rise,
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and perhaps rise faster, does that not hurt -- >> the intendies of labor of small caps is a risk they have a higher ratio of employees relative to their sales. you know, that's particularly true in areas like tech, health kay, consumer discretionary is similarly labor intensive. so, you know, i think that is one risk, and there you want to watch for companies and sectors that have pricing power and are able to price through, as we see labor costs and inflation continue to remain elevated near term. >> within the russell, jill, what particular sectors do you like best? you said cyclicals were undervalued. which ones >> yeah, the sectors that rank well, financials, which we like in both large and small caps
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still relatively cheap and ranks near the top of our framework. some of the much more inflation-related sectors still rank favorably one or small-cap work i would say the consumer discretionary sector is one area that looks more favorable. it's similarly labor intensive, as i mentioned as a risk, but the small-cap sector ben fits more it's more exposed to the reopening in terms of the small versus large call there. >> jill, thank you very much for joining us. >> thanks. let's go to mike now, who's looking at when the market expects the fed to stop hikes. >> this is what the market believes changed from the start of this year it's a clever way to visualize it along this axis is when the
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first hike happens basically the market said not until at least the end of 2023 would there be a sing the hike the blue line is home there would be once the fed did issue tightening 9 now what's happened is we think it will be sooner, but fewer rate hikes expected than back in march, ultimately down around that, probably because the market has a sense if the fed goes soon, he it won't have to do as much. obviously the market doesn't always nail the timing on this, but does explain how the market itself has reacted to what the fed did, or at least in their perception so we'll see how it develops off the next meeting, a month from today, but credit conditions have been unwaveringly strong. no matter what we think about
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the fed, corporate credit has been a big support this is a spread of the corporate bond index you see it below 1%, all kinds of credit quality here that's telling you not much has changed. when that changes, that's when the market, in theory could get into more trouble on the dow the other things to revisit on the first chart is how low rates would still be even after two hikes. >> we talk about it so much, but you're talking about the very smallest of rates, that in their own vein would not work. >> the last cycle, 2018, we didn't think rates were high enough until the equity market threw a fit. so you never know exactly where
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that threshold is. for stocks, it depends on what's happening in the rest of the market. >> when you pull back stimulus, it's always the flow that matters, not the stock mike, thank you. $70 million the latest "fast & furious" film got. up next, imax's ceo on whether we're about to see a summer box office boom, and how the hybrid model could impact sales a check on facebook, the first flows above $1 trillion in market capitalization, after a judge dismissed two antitrust complaints against the company it was going strong all day long, but that pushed it over the edge we'll be right back. llenge ever. but i've seen centuries of this. with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;)
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shares have rallied by around 20% this year. joining us is richard gelfond. agreed to have you with us how are you doing? >> i'm doing great we always predicted around this time in the summer, we would start to see bigger and better numbers. i don't think it's like a light switch, but it's a good start. >> my question is, in terms of capacity, was it as good as you hope >> well, you always hope for more, that's the nature of human existence, but it's about what we expected. you know, because we're global, we're in 84 countries, we have seen countries come out of the pandemic, we have seen the pattern, you know, it's got a
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certain way in china, japan, other places this is right on where we've seen it. i think the one issue based in the u.s. is that a lot of the studios didn't release that many films over the summer, so it was disappointing that maverick was moved out to thanksgiving. bond was moved out of this period, so i do think it's a good start, but my expectation would be you don't see blockbuster after blockbuster, until you get to september it's not a safety issue or comfort issue, it's a content issue. >> how far are we, rich, from normal levels, or at least 2019 levels >> you know, i think probably around the beginning of the fourth quarter
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i think it would lean in for the third quarter, but the slate for the rest of the year is just fantastic. you have "dine." bond, "venom," spider man, and it's one at another. even though "f9" had a great opening, it wasn't global. it opened in china about a month ago, and your parent company deserves a lot of credit it was a unique strategy everyone was waiting for the whole world to open up, and that wasn't goods to happen in that way. i think this is a perfect proof point. it's right on where we thought it would be, and i think this will follow a very predictable pattern, whereby the fourth quarter will be back to 2019.
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>> why are we not at a stage with that great roster movies coming out, where they're allowing prebookings months in advance. >> is it going to be put in place? is it worth doing? >> well, it's just being put in place now, well friday even though capacity limits started to open up in places like new york and california, which are the biggest movie markets, because of associate dis -- social distancing and other regulations, you really only had 50% until about a week or so ago. now you're close to 90%. so you raise a very good point, you couldn't do it that way, but now you'll start to see more
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advance books, for disney's "black widow" the tracksing is good that openings july 9th the presales are good. i think you'll see continued expansion and continued growth, that being the next major blockbuster. >> how many have been pulled and how much do you think -- >> i think moving those movies was a good solution when you're in the middle of the pandemic. most of the big blockbusters like the ones i mention ed, and think it made sense if you had a big blockbuster to wade until everything was open and people are comfortable going, but i
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think during the pandemic, it made sense to stream, because that was the only thing you could do many theaters were closed 2349 world. there was limited capacity, so i think the studios did the right thing by playing mid level movies on streaming or a hybrid and taking the blockbusters and moving them out. if you look at the hybrid results, they're what you would expect it's not accidentalal that the biggest movies of this years did not have a simultaneous video release. i think the market will continue to open up that way once we get through this ser i think you'll see at least blockbusters going at the same time that ppod or streaming service. the world seems to be circling
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around a 45-day release window >> rich, finally i said to ask how food and drink sales were going. i was just wondering whether people wanted an excuse to want to november to have wear masks, or whether people were still being quite cautious they were willing to go to the movies, but wanted a mask throughout. >> imax is a provider. we don't sell popcorn and coke at the theaters. we get our revenues as a percentage of the box offices, but our exhibitor partners have told me that it's done surprisingly well. i during "quiet place" i was told it was significantly higher >> nothing like movie they're popcorn. your stock has doubled over the
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last 12 months, but it pale in comparison to amc. are you jealous of that massive re retail -- >> i can say my wife is jealous. she says i don't want to hear it anymore, but i generally think it's good for the business she sees how hard i work and how hard it is to get that six cents. they're our largest partner in north america, some in europe as well they're renovating a lot of the locations to put imax in, so i'm happy for them. >> richard, thank you very much. >> thank you, both post c-car announcements,
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and they were doubled the different, more than expected, also increasing the share repurchase program to $12 mill -- billion. it's come out at 5.7%, and i believe we were looking at a little lower than that either way, there's a significant boost here to capital return for morgan stanley, and the share's responding, up 3% in after hours. >> it looks like they have also announced an increased repurchase agreement as well
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mike just joined us on set mike, we were wondering what was priced in? i guess they have a nice set uptoday. >> i was going to say that >> particularly as yields pull back james has been talking more clearly about his retirement, if there are increases, will it be toward buyback but morken stanley will probably favor -- >> there aren't terribly tough choices here you can tweak it as you field -- i would say also -- not just withenings companies, but especially with financial -- these compensation their people with stock
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>> just coming into today, the yield on morgan stanley stock was at around about 1.7% this is pushing it up quite nicely. >> a huge premise year old. up next, we'll continue to bring you the news from the other banks. and exists home sales fueling for a fourth straight month. wee look at whether tomorrow's report will be another red flag for the housing market and here's some of the losers today still, the best performer of the year in the s&p 500, but a tough day today.
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what's happening britain's new health secretary says he is confident though england is on track to drop remaining covid restrictions on july 19th, these despite new cases. boris johnson says the next three weeks will give healthcare workers to administration 5 million more shots the michigan governor gretchen whitmer surveying the damage she says old infrastructure, climate change and power outages worsened the flooding. another body was recovered overnight from the site of the collapsed condo in surfside, florida. that brings the death toll to ten. in just two hours we'll get eat update, and a new focus on building inspections in the area
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>> i'll pick that up over to jpmorgan's announcement, which is a small different increase the press release now again, as expected down from 3.3% to 3.2%, the expectation was down nothing too major. dividend doubled, and it did jump on that news. it's a big higher than some expected it has improved, but it has fallen, but perhaps could have fallen a bit more.
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it will be interesting to do if that gain, because of the doubling of the dividend is maintained tomorrow. ongoing good news coming out of these banks. >> up almost 4% now. still ahead on the shows, up nearly 30% since going public. up next, the company's ceo and cofounder on the spac market slowdown, the outlook. we'll be right back. ♪♪ ♪♪ ♪♪
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shares you boulevard owl outperforming, since debuts last month. it's the result of a three-way merger it offers financing to investment management firms. joining us now is blue owl's cofounder and ceo. good to have you back on, gentlemen. a lot of people don't know this company. it's performed well since you went public. what is it that do you i know you're competing with the likes of kkr and blackstone. what is it that separates you? >> well, first of all, i want to
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thank you and wilfred for giving us the opportunity to come on today. we really do appreciate it i think the easiest way to think about our business is we're a large alternative asset manager. we have about $60 billion of capital, just under 300 employ embrace. all of us come in every single day trying to generate the best risk-adjusted profits we can for our investors. those investors are piensions, endocuments, and we have a press in the retail space when i'm happy to talk about. i'm proud of our performance in many of our funds, we have top -- you know, the way we generate those returns is by
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being a solution provide to the private marketplace. we have a number of strategy that we're happy to get into, but the two core strategies are that we provide financing solutions to the portfolio companies. we also provide capital solutions. so think about the owners of those firms. we're able to go to them and offer a debt financing, but in many cases, instead of them going public, we take a passive minority stake, and give them capital to grow their business or just general working capital. >> so, mark, what do you expect as far as growth in assets under manage can you differentiate on those assets >> well, yes, thank you going for having us. at the end of the day we have a
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different business model yes, we've had extraordinary asset growth we expect to continue to have extraordinary asset growth, but our business is really centered on delivers high growth in earnings, with high predictionability, and doing that in a high margin that's repeatable and trance lating that into great earnings and growth for our shareholders. >> sara, if it's okay, can i chime in quickly >> go ahead. >> one of the nice things about starting later that many of the predecessor firms, we got to get out and talk to the investors, in the alternative investment spade. we god to hair what they liked and disliked they all think with low rates a
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lot of money will continue to come into the space. what they all struggled with us was carried interest as you know, much of our peers in this space, upwards of 40 to 50% of their kevin can be from carried interest that's highly variable what they had was in goodr good marks. if really weigh heavily on the stock. so you asks how are we different. there are two things that i think that distinguish us. one, 100% of our revenue, 100% of our pretax profit, most importantly 100% of our after tax profit comes from management fee. the other thing that a lot of firms are trying to copy and we're very early to this is 91% of our capital is permanent. 91%. so we don't have the typical life where you invest for five
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years and it rolls off our funds are out there for 20 plus years so for investors, what we've built is a stream of income based on management fees that goes on in perpetuity. think of a dividend strain that is very stable and you should know the street, the analysts testaments are for us to grow 30% to 40% per annual so i think it is a pretty good place for investors to put their money. >> definitely a strong set of arguments for a better multiple on your stock. some might argument not have a perm formance fee. i want to ask you, mark, if i may, to what extent we're seeing other companies like goldman sachs pivot more into the private equity space and i get that your business model is different for all of the reasons that we've gone through. but to what extent could this be a little bit similar to the late
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2000s decade when we suddenly saw a plethora of fund of hedge fund type options to invest in what have been the hot asset class, if we call it that, in hedge funds of the prior decade and that kind of marked the top. is there a risk that is the case here for private equity and there is so much money flowing into it in the last decade >> well i think we're in the very early days, frankly, of the businesses that we focus on. we're not trying to be all things to all people we're not trying to be a supermarket of alternative investments. we provide solutions to the growing alternatives investment industry and remember, the businesses we're in, private credit, direct lending in particular and this gp stakes and solutions business actually are quite sparsely popular. so in that case, we are in the early days of both of these industries growing up and fortunately in both of those areas we're one of the market leaders. so we think there is a long ways to go. our investors think we have done
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well participating in these sectors and if you believe alternatives will be a part of a future of investing then you believe blue owl is an important part of that because of the solutions that we provide. >> guys, we're out of time we're in the middle of the bank announcements on capital returns but tank you for joining us. i'm sure we'll talk again soon many more questions about the business good to have you both on. >> well, thank you we do appreciate it. take care. >> same here. nk> still to come, more of the ba capital crossing the wires. we'll have them when we return
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up next, lots of bank news coming goldman sachs just releasing capital allocation plan and the stock is up 1.4 percent. details when "closing bell" comes right back goals as it may. ♪ because things are coming back. ♪ making now, the time to move forward. ♪ at u.s. bank, our goal is getting you to where you really want to be. ♪ because side by side, there's no telling how far you'll go. ♪ u.s. bank. we'll get there together. ♪
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sales are down from last quarter we'll get there together. but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today. front desk. yes, hello... i'm so... please hold. ♪♪ i got you. ♪ all by yourself. ♪ go with us and get millions of flexible booking options. expedia. it matters who you travel with.
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welcome back some more crossing on these banks capital return plants. first bank of america which we haven't done yet in line with expectations no extra buyback boosting the dividend by 17% to 21 cents per share. their stress capital buffer requirement in line with expectations coming down a fraction to 2.5% goldman sachs not quite doubling as dividend but going from $1.25 to $2. getting a nice little boost for their share price as well. of course, about 1.2%, all of the banks have traded lower ahead of time today and morgan stanley the standout here, doubling the dividend and
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increasing the buyback by about 20% and jp morgan increasing the dividend from 90 cents a share to 1 cents a share with no changes in its buyback it will be interesting how these will settle overnight. morgan stanley key in terms of the movers. >> second best performer year-to-date, this should continue to provide fuel. >> that is going to do do it for us on "closing bell. "fast money" begins right now. live in the nasdaq market site overlooking times square this is "fast money. i'm melissa lee. tonight karen fiberman and tim and guy and we're all over the after hours action after announcing changes to the dividends and buybacks we're breaking down the action straight ahead. plus we're trading the software serve, the igbtef, hitting an all-time high but is there troubl
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