tv Closing Bell CNBC February 11, 2016 3:00pm-5:01pm EST
>> thank you very much. >> now we'll really let you leave. >> we all leave, in fact. >> the show is over. >> thanks for watching "power lunch". >> "closing bell" starts right now with more on these opec headlines no doubt. ♪ >> welcome to the "closing bell", do you notice something different this afternoon? i'm kelly evans -- >> new stair highly? >> you're listening to the 1812 overture and there's reason. just as we tested 1812 on the s&p 500, a level everybody has been watching -- >> everybody. >> what happens this headline comes into the market about uae potentially a cut out of owe peck. >> isn't that crazy how that happens? you hit that low, actually hit 1810 but there is no 1810 overture, the lowest level since
precisely two years ago today, february the 13th of 2014. we'll let them play it out there at the end of the overture. the 10-year hit 1.53, up 11 basis points since that low and oil is coming back after these opec headlines that we'll talk about in just a moment. a wild last 30 minutes and we've had disappointing numbers out of europe. the banks over there are suffering. we'll talk about that with some of our guests coming up here and the impact that's having on our markets as well. >> it started in the overnight session today and it looks like the worst of it happened just as markets were testing that 1812 level and falling through it and this news out of opec, the u.s. benchmark has moved up more than $3 off the lows of 30 minutes ago. we'll get more insight from former leaders in the financial space over the next two hours about what's happening across
the financial complex here. peter sands is joining us and citigroup vice chair bruce rhodes and former wells fargo ceo. >> not just the banks. look at boeing. biggest drag on the dow today, it was down 11%. we have details on the probe into boeing's accounting coming up. stay tuned for that important story. >> as that 10-year keeps dropping, we have a few high paying dividends with strong balance sheets maybe that could provide a little safety amid the sell-off. >> so much to get to. i don't know how we're going to pack this in. let's start with the bank stocks leading the sell-off for a time. bob pisani is at the post. >> i wish i could tell you we have a rally -- we have a rally in energy stocks, turned positive on these reports from the uae energy minister that there may be some attempt by
opec to cooperate on a cut but it's not helping bank stocks at all. they are all at 52-week lows. key corp, these are classic regional banks, 5% decline, not much of a rally at all. same with pnc, down 4%. right across the board, it doesn't matter, bbt, sun trust, any of the regional banks are all sitting at multiyear lows and even the big money center banks are setting at multiyear lows bank of america, it is not a typo, down 7% today. the lows were only $10.99. you can see even this rally that we've had in the last half hour recently hasn't translated. all of the big financials are trading below their tangible book values, what they are actually worth right now. total book. this is saying -- some people are saying we don't believe the
book values but a lot of people are saying the market is acting irrationally because their loan port yoels have been carefully scrubbed by the regulators. tug of war going on, do you believe the book values or what the street seems to be implying. >> there have been people saying that there are black boxes. we don't know what kind of nonperforming loans are in these things, we can't get a good read on them. how much do you think any further closure of transparency from names to small to large, american to international to help people at least pick winners and losers here? >> well, these banks have been -- their loan portfolios, regional bafrpgz are carefully scrubbed. we've had extensive regulation of these banks since the dodd frank was passed. twice a year the loan back is looked at. we've talked about the energy exposure, most of the regional
bafrpgz, the energy portfolio exposure, 3, 4, 5, 6, 7%. the assumption if you run the numbers they are assuming complete losses in most of these regional banks. they are relatively small but assuming complete losses on them. that's very, very unlikely at this point. the street is in a bit of a panic and you can imagine what bank analyst mike mayo is aper plek tick saying the numbers don't make any sense. the street can be irrational a lot longer than you could be solvent. >> yes, mike mayo going bullish on the bank stocks for first time in 18 years i think it was? >> yeah, just as all this is hitting. >> he acknowledged he might be early on that. >> now to one of the big catalysts behind today's telloff, sweden central bank pushed deeper into negative territory. dominic chu has a story on why they are implementing subzero
rates. >> negative interest rate policy, that's where depositors in effect pay a bank to hold money instead of the bank paying the depositor some kind of interest payment. it's important because a number of major central banks around the world have recently adomted it because they want banks to lend out many to businesses rather than stash it at the s central bank. it's all about the relationship between the central bank and member banks as part of it. many require that member banks hold a portion of deposits on reserve. they get paid interest on that money. but banks can also deposit money above and beyond what's required at the central bank, like the fed or ecb. those funds are known as excess reserves. so central banks are trying to encourage banks to put their deposits to use by charging them funds to keep them there rather than paying interest on them. so that's what a negative interest rate is. it's new and spreading all across the world right now, you've got a host of different
countries, denmark, sweden, switzerland, the european central bank and bank of japan. those are the countries where central banks have similar negative interest rate policy u.s., as for whether or not it really works, not many experts feel as though it's late enough to tell what's going to happen here. the world of negative rates has been around for only a few years. it's not in the cards for us here in the u.s. just yet but just about everyone on wall street is watching closely to see if it could become a possibility down the road. eurozone countries, japan, there are a host of countries out there with these negative interest rate policies, nerp. you heard all about it in congress and you'll hear more about it if they stay in this kind of negative territory. >> it reminds me there was a headline from steve englander where he said negative interest rates are like potato chips, you can't have just one. >> that's a lay's potato chip,
they would say that. the interesting thing is whether or not there will be ripple effects down the line. you don't know what the unintended consequences are going to be about this. in essence you're cutting off their profitability and raising costs on one front for them. the question down the line whether or not they have to make up those lost profits here by maybe increasing fees for customers, we don't know what the effects are but a very interesting case study as we speak. >> they seem to have a way of spreading. dom, thank you so much. >> if you're just joining us, very volatile day. we'll get to all of the developments with the dow down 286. but those negative rates dom was talking about, big topic again during fed chief janet yellen's testimony of the senate banking committee. you saw portions live today. steve liesman has details on that. >> on the issue, janet yellen saying that the fed is quote taking a look at them as it did
in 2010 but still has work to do to figure out if they would work in the u.s. or even if they are legal. >> we would want to be prepared in the event that we needed to add accommodation. we haven't finished that evaluation. we need to consider the u.s. institutional context and whether they would work well here. >> a lot of concern what it would mean for money markets. yellen said it was premature to conclude whether the question was heading for recession but monetary policy was not a pre-set course and whether fed policy is responsible for the stock sell-off. >> the movement in chinese currency and the downward move in oil prices, i think those things have been the drivers and have been associated with broader fears that have developed in the market about
the potential for weakening global growth -- >> let me -- >> spill overs to inflation, i don't think it's mainly -- >> let's go back -- >> a lot on the street would disagree. it wasn't what the market wanted to hear. with concern over interest rates and lack of confidence in fed policy it's not clear yellen has much to say that could cheer markets up. my latest idea, the fed could go out a buy physical oil and that would buoy the market. >> there's plenty to choose from. i didn't hear her say something about any sectors in the market being expensive right now. >> there was concern to point out in previous testimony that she's given where there was concern about bubbles of different parts of the economy. not concerned about that. now, look, the fed expected some volatility in the wake of the rate hike, expected some down draft. i have too think thts more than they expected. >> it's funny you mention that, because there are some who think
that stanley fisher saw the impact on biotech stocks and said there's going to be four interest rate hikes and that helped take the froth out of the market. >> that worked. >> thanks, steve. >> steve liesman. oil and gold. gold is up 55 bucks, making huge moves today. >> it was up $63 a while ago. >> and oil is now $3 off its lows, let's get over to jackie on more what's whipping the markets around. >> a lot of volatility in the commodities prices, oil prices nearing $27 again after we got the headline that opec is ready to cooperate. there's been a lot of chatter about this but perhaps this is a little bit more significant because we're getting away from a nonopec member saying it, one of the weaker opec members. this is coming from the uae but everybody is continuing to say that until it comes from saudi arabia who boosted production in january and opec production also went up in january, we're not going to see an emergency
meeting or a cut. remember, from my reporting talking to saudi sources, we do know they were saying they are going to stay put and baked this into the budgets. in fact, it appears their strategy is working. a lot of traders pointing attention to between the spread, march and april crude, saying one of the reasons we got hit so hard, producers in the gulf are dumping oil at these prices. they want to get whatever they can and we're running out of places to store it. potentially you see a lot of this oil start to flood the marketplace and tells you that prouders are in extreme circumstances, a lot dire straits because prices have come so far so fast. will that lead to production cuts here in the united states? that is the big question we've been waiting for. still, gold prices also showing us the commodity market is volume till, $50 move to the upside. we haven't seen moves like that since 2011 one trader
highlighting. crisis time, post arab spring, gold went up over 1800. people are making correlations looking at what's happening in the global marketplace and seeing if commodities are signaling some sort of return to that volatility. that at least is what the concern is right now in the pits and elsewhere. >> jackie, thank you so much. i'm glad we have jackie because i'm looking at the wrong oil quote. twice i said it's up three bucks. it's not $29 and change, it's 26 and change. still knnear the lows. >> we have much to talk about. we've added an extra voice today as a result. a four box as we call it in television. jim lowell and jonathan corpina and rick san telli. two numbers, 1812, what everybody is watching on the s&p and art cashin told kelly and me
if the dow closes below 15,666 that could mean a dow theory sell signal. all of the numbers are being put in perspective here today. are you watching those as well? >> absolutely, i'm not going to buck art on his numbers and his levels there. clearly that 1812 level we have been watching, i like the music you had on the intro to come into this but that is a significant level there. we did -- we have tested it many times, we did break below it and it's amazing to me as soon as we get below there, we get this oil headline that comes out. market is now selling back off as we're starting to realize there is not enough weight to the oil headline that's there. if we come back down and start testing the 1812 level, there's not much below there. we have to take a step back and see where is there any support? we'll get down to the 1760s and hopefully we get there quick. it needs to get flushed out. >> are you buying into this
market as it continues to sell off? >> we know our managers are clearly buying into the market. we'll continue to do so the selling is continued to be based on fear, not facts. they are able to add to positions that they like and basically reduce the overall cost basis of owning it and find new positions that are clearly more attractively priced thanks to the fear driven sell-off. this has been a market that's really sold heavily on the growth side. biotechnology, health care overall, financial services and technology but on the flip side, consumer staples continue to show not just relative strength but even positive returns. this is a stock picker's market we think bar none and we have a lot of managers clearly capable of delivering value, maybe not in the next three days or tloo weeks but absolutely over the next year to three years. >> and hans, you're focusing on the european banks that has become the latest bogey for our markets here.
you think of this as panic as overdone or not? >> well, i mean, what's interesting about this particular crisis in the european banking sector, it's really focused on the developed markets. we're so used to the fragility of the american banking system and you see the ice landic banks are fine and greece banks are not in bad shape. what is a potential contagio 2346789 n to the overall system. how does that impact the tier, also also that deutsch bank and the large european banks are overlevered and they are system 20, 25 times. the u.s. banking system we pared down from 30 to about 10. we're well insulated around the shock. you know, there might be some
sort of psychological impact on the emerging market system or china but overall i think we're not in bad shape. more psychological than anything else. >> contingent convertible debt issued by the european banks and can become equity under certain circumstances. the more there's concern about those bonds being triggered, the more downward pressure there is on the stock market prices of a lot of these banks. hans, briefly, you made this point about nobody expecting there to be another greek banking crisis. the markets in europe overnight didn't look that great. it looks like italy down 5.5%, whether you want to include that or not. i have heard people say there could be yet another blowup lurking in greet banks. what makes you so confident? >> they've been to hell and back. they've been going through the
whole recap talization exercise, but this is a situation where ironically the germans who are the ones dictating the terms to the per riverals are the ones the most levered and maybe the most susceptible to a shock. we certainly pay attention to the peripheral countries and first time we've seen in a couple of years. let's not kid ourselves. draghi has a bazooka, do you think the germans are going to tell him not to use qe when it's their largest bank that's in the eye of the storm? i think they may back off from some of their more string ent rhetoric. >> especially when the bank lost 30% of its value this year. >> what bond should we buy? >> we sit the table for you, rick, the yield on the 10-year 1.53 and gold got to 1250 and s&p hit a two-year low. what's your view of what's going
on right now? more of the same? >> more of the same. i still find the conversation on negative interest rates fascinating not to belabor the topic. the reason i find it fascinating goes to raum emmanuel. i find it very odd that ben bernanke was writing about it for a long time, discussed in 2010, it's the inevitable conclusion for whose no believe there's magic to central banks. it's either qe or negative rates. but yet i still here janet saying she's not sure because this is the beginning of crisis like conditions and she knows she can do it if she needs to. there may be no other answer which leads me to think, i know people that are very sick. they'll take drugs that are experimental and do procedures nobody ever survived from doing because they are clinging on to any hope possible. but i think that's a horrible way to run the global economy.
because it's as though there really is this ongoing belief that something can change all of this very quickly. and i guess the best anl gi from somebody who always gets lost when i'm in a car. if i get lost and go seven hours in the wrong direction, why does anybody think i can get back to where i started in seven hours? >> i don't think you'll fix it in one administration or one month or one quarter. my timetable is it could take half the time it took to destroy things to try to bring them back. optimistically things aren't going to be good. do you think quan take tif easing will cure was wrong of deutsche bank, that alchemy is the same as sounds finance? it isn't. >> why is gold up then? >> i don't believe you get lost
when you get behind the wheel of a car. >> constantly. >> appreciate your thoughts on today's main. 40 minutes to go. what -- >> where do you start? >> we were down more than 400 points on the dow and came all the way back to almost cut the declines in half now melted down a little bit again, 275 points which is the worst performer, the nasdaq is down half a percent, 20 points and s&p down 25 to 26. >> we have the former heads of standard charter bank, citigroup and wells fargo weighing in on the bank meltdown and whether concerns about the potential impact of negative interest rates are overblown right now. that's coming up. hunting for a yield, we're going to show you wildly held companies who dividend yields exceed the corporate bond yields. you're watching cnbc, first in business worldwide.
then word came out opec was ready to talk about production cuts in oil. we're back down 273 points. s&p down 25. it touched a critical level, 1812 but bounced back and the nasdaq is down 18 points. meantime, mylan is paying $7.2 billion to acquire sweden's meda, 92% premium before the news of that deal broke, mylan down 17.5%. it reported disappointing quarterly earnings as well. >> maybe people not liking the premium either. as the 10-year continues to slide, michael santoli is looking at companies with a dividend yield higher than the yield on their corporate debt. >> topsy-turvy. >> slightly different way of looking at this. it's been commented on that the s&p 500 as a whole has a higher
dividend than the 10-year treasury, much wider. but if you look at the individual companies, you can find large blue chip names that have a higher dividend yield than their own corporate bonds do. goldman sachs highlighted the fact that 40% of the s&p 500 has a higher dividend yield than a bond index. here are some names with a 1 percentage points advantage over their corporate bonds, target, microsoft, our dow stocks, ibm, intel. >> not exactly small caps we're talking about here. >> exactly. the reason it's significant to look at the not just the dividend yields and whether they are attractive but have this advantage over the corporate bond yields, the very low yields on the corporate debt shows you that the market feels they are stable companies and balance sheets are strong. they are not going anywhere. you can't get the extra return without taking a little extra risk. stocks are more risky but if you want that kind of income and a
sense this company is going to be around a while this is an option. >> what has happened in the past then? >> the precedent for this is the entirety of the stock market before 1960. that's one way to look at it. it used to be the case that stocks dividend yields were most of the return you got. now, if you look at the overall market, yes, you can go back to periods since the '08 crisis when treasury yields dipped far below dividend yields and they tended to be good-bying opportunities. the big question rye now, are we in a new world with yields being dragged lower and relative equation changes a little bit. >> what this is telling us on the one handy can buy merck debt with less than 2% and with the potential for price appreciation. so the latter would seem a no brainer unless you're so concerned about where these markets are going or where the world is going that you think
that value will potentially decline -- >> exactly. that formulation, safety is overvalued in this case. the real security of having that promise, that they will pay you 100% on the value. if we're going into a much deeper bear market the the stocks will not be immune to it. if you care what the day to day value is going to be. >> and that spread will only widen. >> in that instance, yes. >> let's check out the dow, 30 stocks, boeing putting the biggest drag on that report that the aircraft maker is being investigated by the sec on accounting practices. let's zoom in there. you can see down 6.99% on boeing. it was down much more than that. phil le beau steps in now. >> a stock at levels we haven't seen since the summer of 2013 and yes, it did resolve largely
around the fact that there was a report earlier today that the. sec may be investigating how they account for deliveries of wher shal airplanes. this has to do with boeing's use of what they call program accounting. they've used it for years and in the past the sec has signed off on it. basically they spread the cost that go into the development of dream liner and over a block of planes being delivered over extended number of years. the question is has boeing overestimated future profitability for the dreamliner and 747-8. they are spreading these costs over forecasted orders of at least 1300 airplanes going out over many years, so far they have a little over 1100 orders, the question becomes, will they ever hit the profitability figures that they have given to wall street and others over time? it will be interesting to see how this plays out in terms of their use of program accounting. the other piece of news comes
from this man, ray conner, the ceo of boeing commercial airplanes held a meeting yesterday and said we have to cut cost in the commercial airplane business if we're going to stay competitive with airbus and cut jobs. no numbers have been attached to what he said to the employees but it's clear commercial airplanes will be cutting costs and jobs. we reached out to boeing and it has no comment on a potential sec investigation as you take a look at shares year to date, this year, this year alone, boeing shares are down about 25%. 25% in five weeks. >> phil, it's extraordinary. i wonder if more has to do with the latter part of your story here. the chief financial officer greg smith was asked on the earnings call whether they were facing any pricing pressures from airbus or just in general. and his response was no, nothing material. now this happens this week and it makes people wonder how quickly is the demand situation
deteriorating and what's going on with the pricing wars. >> you add that into the fact that they had a clear warning on conference call and earnings but they really didn't forecast that too well to wall street or wall street didn't pick up on it. it has a lot of people saying, what exactly is going on here? we need a clear picture. there's not that clarity right now. >> is boeing a special situation or is this -- are we going to be seeing this in the defense sector overall do you think? >> good question. program accounting has been around for years and it's been generally accepted for years. the question in this case is, did somebody turn to the sec with a specific document or information that would say in this case, the information that's being provided is misleading or is this a case where the sec is looking at this and saying, do the numbers really add up over time? we don't know at this point. it may turn out not to be anything more than an alleged investigation at this point.
that's -- more questions than answers. >> all right, thanks, phil. phil lebeau checking in on boeing. >> time for a cnbc news update. >> here's what's happening this hour. u.s. secretary of state john kerry is in munich where key talks involving syria's civil war are under way. russia yesterday proposed a march 1st cease-fire in connection to its role in the conflict. two uber executives getting ready for a battle in french criminal court, accused of violating privacy laws and commercial deception. they have been highly critical of uber saying it doesn't pay taxes and drivers are not properly insured. a phoenix bound american airlines flight made an emergency landing at lax after smoke was detected in the cabin. the flight did land safely but a fire official says two passengers complain of respiratory irritation. the senate giving final approval to a bill which
permanently bars state and local governments from taxing access to the internet. president obama is expected to sign it. that is the cnbc news update. see you in an hour. >> if you're just joining us, what a crazy day. it just is part of this whole story that we've been telling since the beginning of the year, yet another problem that the market focuses on, the european banks and negative interest rate question, and it has sent stock prices lower. in one case the s&p 500 hit a two-year low at 1810. then things came back when the price of oil moved higher on word that the uae minister would be willing to talk about production cuts. market is well off the lows of the day. as you can see all ten sectors in the s&p are sharply lower today, led lower by those financials. shares of specialty grocer fresh market is spiking. reuters reporting it may be
acquired by kroger. fresh market is up almost 18% right now. so not all stocks are going lower, kelly. >> no, there's your green. pun intended in fresh market's case. i'm on the floor with steve grasso and let's begin with the opec report. >> let's call it fact. >> okay. >> why don't we walk backwards from there. you tell me, it's always the conversation of whether it's supply or dmarnd, usually lies somewhere in the middle. who cares? what we're looking at right now is global growth that's aneemic. that's what janet yellen is convinced she sees and dancing around. that's what china is all about, growth comes from china, we don't see it. we've seen that hit the commodity space. so what does that mean going forward. >> the interesting thing is that all of that being the case, the rumor comes out and supply side
of things has oil moving higher and that takes the market off its lows, are you saying maybe people think twice and maybe even if they do cut production that's not going to give us the kind of bid in the market or oil price we need? >> i think what i really believe is that even if they do say and they mean what they say, they don't really mean what they say. >> they are not going to do it? >> have they ever done it before? they always say one thing and continue to pump and produce as much as they want, all of them individually. iran just came back online. iraq continues to pump. so and the saudis need to pump. we know their break evens are lower than the united states break evens but it doesn't matter. they are all going to pump as much as they need to pump. >> they are either going to do it or won't do it, still won't matter. >> you have to just sort of not even listen to that. do we have any global growth?
is global growth there? if it's not there, you trade off of that or lack there of. when you look at oil around $26, it's probably going to 20. >> thank you, i think. steve grasso joining me from stuart financial. >> the european banks which resume their deep dive today on weak numbers from in this particular case, soc gen. >> when you look at the system, it's much more robust and i think there's again too much nervousness. >> that from frederick, now another voice saying there's no real fundamental reason for financial stocks pob doing so poorly. joining us is peter sands, former ceo of standard charter back, harvard kennedy school of
government. welcome. good to see you. >> hi, good to see you. >> if you're not as concerned as the markets seem to be about the european banks and their balance sheets and state of their business, why do you think the markets are doing as poorly as they are right now? xbl well, actually, i think there are plenty of returns for concern. banks in europe are being hit by a sort of triple whammy of fears, the investors are scared, one is prospects for growth, globally and specifically in europe. the second is the impact of low or negative interest rates on margins and third, they've also still absorbing all of the incremental costs and impact on all of the regular tri changes. take all of those three together and that's an acute challenge to the economics. >> they are trading almost at crisis levels here. >> yeah, no, the market is
obviously very, very concerned what the prospects are. but those are the fundamental factors driving those concerns. >> how much of it though is a fear of a return to 2008? are we not over that period yet? >> i think it's a very different situation from 2008. the regular apparatus is different and capital structures in the banks are much stronger and liquidity is much stronger. but there are serious challenges to the ongoing economics. i don't think it's the same kind of thing we face in 2008. >> there are some who are saying the way it plays out and market is pricing in any way is some sort of bail in for people who hold european bank debt. who would be the implications of that. is it an event if it ultimately does happen, the rest of the world can move beyond? >> i don't think we're here,
we're there yet at all. obviously fears are driving people's behavior but that's not the reality of where we're at. >> frankly, there are people who watch these markets every day and are continued to say we're worried there's going to be a bail-in and not just the contingent convertible securities but other securities as well. there's all sorts of mispricing, senior bank debt relative to other securities. this is something that market participants are pricing in as an active possibility. >> i can't dispute that. what i'm saying, i don't see that threat to the viability to the banks as yet. you have to have the banks cross the threshold for the bail-in to become a realistic prospects. >> as we've been talking, the nasdaq has turned positive here and other major averages also coming well off their lows, the dow now down less than 200
points when it was down 400 points at the low. negative interest rates are they here -- to be here for a while. do you think we might see them here in the united states? >> i think that's one of the concerns of investors when they look at the banking sector, what happens next with central banks? central banks are worried about where growth is going to come from. central banks are trying all sorts of different extraordinary innovative mechanisms to try to stimulate growth of which negative interest rates is one tool. it's pretty poor for the economic and banks per se. i don't know quite how far and how much we're going to see but obviously we have negative interest rates, they are a reality in japan and europe. and they are part of this broader issue of we're not seeing the growth we want in the world and central banks are the
main -- the main policy making apparatus for actually trying to respond to that challenge. >> that's why when mario draghi in 2012 said we'll do whatever it takes here, markets believed him. what do you think he needs to say now? >> well, i -- i've known mario long enough to know i wouldn't want to try to second guess him. i think one of the problems of the market is facing is that they don't know what next the central banks can do. is there any more ammunition, any more creativity that the central banks can show? because they've obviously already done a whole bunch of things. and i do think that is one of the fundamental concerns in the market is is the sort of central bank will solve the problem strategy, has that run its course? >> come on, all central bankers were born to be second guessed, any way. another topic, you wants to do
away with the $100 bill in this country. why? >> well, my argument is broader than the $100 bill, it's high denomination amounts, like the 500 euro, 1,000 swiss frank and so on. we don't use them in every day life. very, very few people, less than 2% of americans have $100 bill in their pocket at any one time and 30 $100 bills for every american. where they are used and all of the data on drug trafficking and so on will show this, they are used in the undergrounds economy, drug traffickers hup an traffickers and corruption and terrorist finance and so on. it seems ironic that the state is providing the tools of the trade for people who want to pursue such activities when we don't need them for the things we do every day. >> bitcoin. that's the answer here. electronic currencies could be
the way forward. thanks for joining us. >> thanks, peter. >> nasdaq just turning positive a few minutes ago. let's get over to bertha coombs. >> we're seeing some of the stocks that are being oversold coming back here. today what's been holding things up at the nasdaq, which had a two-year low this morning, a long with the small caps and russell 2000, it's really been sisco following that better than expected earnings report and bulgish comments not to mention the buy back. the stock is having its best one-day gain in over four years, up over 10% as we head towards the close. that's giving a nice lift to the cloud players and amazon has been higher all day among those fang stocks. facebook and google as well. netflix is sitting party out. apple looked like it might turn positive. it's come well off the lows. they came very close to hitting that august low of $92. so far it seems to be holding
that level. looks like it's going to hold today. we'll see if it can turn positive along with the rest of the market. biotechs continue to be the source of pain, off 40% from the all time high. last summer, mylan paying the big premium for the rival swiss drug maker, also disappointing and also disappointing data as well leading the biotechs lower. if you're coming public today, not the best of timing. take a look, it did price a $20 a share, never hit that price. just over $18 and slipped into the afternoon. >> not that you asked but i think we should do away with pennies and nickels and dimes because they are a nuisance to deal with, especially if you're not paying something with your apple watch or debit card and the bill is $20.03 and you don't have it in your pocket. you get 97 cents back and drag
it around in your pocket all day. >> i want to know the portion of millennials that carry it around. >> just 185 points. >> financials still getting hit bad but those comments supposedly by the uae minister helping. it's now $80 and just turned green a short while ago. chevron was at 81 an hour ago. now $83.42. 11 million shares, very good volume. we've had very heavy volume throughout the week or so. what else do we got, occi dental, was 64. now trading at $66 and change. things have turned around. what hasn't turned around, bank of america still sitting down around $11. 350 million shares down about 6%. that's not improved at all.
new 52-week low. the stock was $17 just four weeks ago. now it's down to $11 and huge volume, twice normal volume today. the sour mood and financials continues here. the bank traders the other day, this morning, one of them said to me, for lent i've given up hope. that's what it's like down here. it's sort of like they are just sitting waiting to find some kind of bottom on most of these financial names. >> i think traders will take some comfort if these levels hold right here that 1812 is holding on the s&p 500 and i don't foe if you heard but cashin said if we close below 15,666 on the dow, that would do a dow theory sell signal at that point. >> that's the market of beast there. by the way, the tech sector just went positive on the s&p as well. >> as somebody else around here was saying, everybody becomes a technician in a bear market because it seems to me the market becomes its own
fundamental. >> what happens when people don't understand or can't figure out what's going on in the global economy, they turn to technicals because they need something to trade on and look at that. >> mark pointed to it at the bottom back in 2009. >> yes, he did. >> sometimes when there's enough pressure it becomes its own beast. thank you so much. >> bob pisani on the floor. we have 13 minutes to go. the dow is down 211 points and vix is higher little under two points and s&p is down 17 and nasdaq was briefly positive. >> gold was at $263, now 247. a big come back. >> have you seen a vonn. >> applying for a 17th quarter, dropped 26%. you can expect i would imagine brazil or other markets, plenty
to pick from down there. >> that struggled for a long time. >> seema has been swimming against the tide looking for bright spots, haven't you? >> absolutely. >> like a salmon. let's start with the dow, there are only four to five companies trading in positive territory. cisco moving higher thanks to better than expected earnings and dividend hike is where investors will go through if rates continue to trade deeper into negative territory. that search for yield. disney shares posting a rebounds after trading down yesterday. microsoft and intel, two of the bigger tech names also higher on the day here. online travel, another bright spot, xpeed i can't moving higher on strong guidance. fay a look at that stock, up 10%. trip adviser also moving higher on upbeat earnings, indicating that despite global slowdown fears and gee toshio politics, consumers are still traveling. we're looking at trip adviser, up nearly 14% on the day.
we've been talking about the shiny yellow metal, flight to safety as well as global market volatility, helping gold shares outperform plus the pervasiveness of negative rates. that's also making gold a much more atraktdive asset in 2016, hitting a one-year high today as you can see, $1243, that's helping gold miners outperform. newm newmont continues to rally and gold miners etf up 6.5%. back over to you. >> we're heading to the last ten minutes of trade on this day. with the dow down 206 points. art cashin stopped by and said no buyers sell bias on the close here, they have paired off at this point. joining us with her thoughts, samantha from jp morgan funds.
stepping in here as we try and make sense of the guy races of this market just today. where do you stand on the issue of the impact of european banking crisis on u.s. economy and so forth? >> well, we're thinking of it as pretty separate. i think what's happening now is that the market doesn't like negative interest rates. we know the market likes quan take tif easing. is that going to have spillover effects into the u.s. equity market long term or u.s. recession? we don't think so. >> it's a great point. i wonder whether central bankers will look at the message from the markets and think maybe we should try something different, try more easing. it's interesting they decided to go negative and now we're seeing this sort of fight that the market is putting up. >> it's hard to interpret. it also speaks to the fact that the seb tral banks may be are youing out of tools, even though we know markets like asset
purchases. in the longer term, moving back to what yellen was saying, inflation is anchored in the u.s. we expect growth to pick up. there's a lot of volatility right now. >> are you seeing opportunities though with the slide, we've seen in a lot of these financial, are they buying opportunities yet do you think? >> to an extent. i don't want to dismiss the market as being irrational but there's still a disconnects between what the economy is saying and market is saying. for the long-term investor now is an opportunity to buy. >> i know you said inflation expectations are kind of stable but that's one area where we're seeing slippage, whether it's in the market, pricing less than 1% inflation rates and consumer expectations and feds survey fall ag little bit. i don't know how relevant that is but it does seem there's been a second wave of global deflationary forgss unleashed
here. >> i think it comes back to oil. i'm kind of saying we need to see oil prices stabilize. i don't think the price matters as much, doesn't matter if it's 35 to 40, as long as we get range bound action. once oil stabilizes, i thing we'll see inflation stabilize more. >> what's the individual investor to do here? we hear so many people come along and say dividend growers, that's the place to go right now. if it's not safe, at least you're paid to wait for the market to come back again. seems too easy, doesn't it? >> it does and it's a play done to an extent. valuations are kind of expensive on the dividend players. i like the idea of growth. in a slower growth world what we're seeing, we'll pay up, pay a premium for those companies and sectors that can give us capital appreciation. >> that was the argument for the growth names. i guess at these levels you like them even more because they've gotten whacked. >> they are so cheap right now.
>> i would be looking at growth. >> like netflix, biotech or talking about software as service names or sales force, down 15% on friday. >> some of the sell-offs don't seem justified. there's interesting names and plays in the disruptive tech and health care more growth oriented and they've got the long run trend supporting them. >> what's it telling us right now? i thought -- didn't listen to all of the testimony of chair yellen at the senate banking committee but i was hoping somebody would say, madam chair, was the 10-yield telling you right now? i can't believe they want it to be below 6%. >> the 10-year falling had negative implications where the market is seeing growth. the year durve is somewhat manipulated because of what the central banks have done. i wouldn't look 100% as my
number one recession indicator. >> i'll sulk away though. >> we'll see you top of the hour. >> prepare well. you've got a lot of earnings coming out tonight. >> tons. >> yes, you do. >> seema? >> one stock on radar has been pandora, shares climbing higher on buyout speculation. pandora said to have held talks about selling itself. this is not first time there has been a rumor about the company potentially looking at the potential buyer. given the heightened competition in the online music streaming space with spotify and sound cloud. higher as much as 15%. looking to close out the session up around 10%. the company getting set to report fourth quarter earnings and analysts are expecting earnings of 7 cents on revenue of $331 million. but the big topic of discussion will be about a strategic initiative going forward. bill, you're looking at shares
up 10% on the day. >> those former high flyers like a pandora that have been beaten down so much. you have to think if a company doesn't approach them about a deal, if they have to think about it themselves too, right? >> buyout speculation or considering other strategic initiatives is something that many of these high growth companies willville to look at. especially if we see a down it is turn in the markets. >> seema, thank you very much. we've got five minutes to go here. the dow down 225 points. bob pisani is joining us. looking at charts here today and we're making this up as we go along. the dow is something we will want to look at. it looked like we might have a rally -- that was yesterday. yesterday this morning we had a big sell-off because the european markets were down hard. we've been down 400 points a couple of times today, came off the low around 2:30 eastern,
down 220 right now. the price of oil, brent fell below $30. wti at $26 and change. in it is at $27.30. the 10-year yield dipped below 1.6% in the 153 range overnight and 164 right now. and bob pisani, the vix was at 30 briefly. >> that's the first time that's happened in a while. a lot of people hadn't been happy with the vix because it should be higher given the volatility. some people have been saying the weekly and monthly contracts are more popular and that detracted from people who normally go to quarterly contracts. i think today was an important day, take a look at the xle. we turned around on energy comments from the uae energy minister, xle went positive. we saw exxon go positive and chevron.
what didn't is the financial stocks, slf stayed negative, bank of america never really rallied. bank of america is down 17 prsz, from $17 in the first of january to $11 today. thsz bank of america. i can't emphasize enough that people are just stare at this thing all day long, when is the bottom going to be hit at this point? i think if you look at the regional banks down 25%. none have global exposure or trading desks, all have been carefully scrubbed on the loan books by regulator by dodd frank and the street is saying, we don't believe the book value. and a lot of traders have been aper plek tick about this. mike mayo turned positively specifically because of this. i'm glad we turned around but there's been a lot of damage. >> you have to become -- whether you're a value or growth investors, you have to become a
value investor right now and be patient in many cases, don't you think? >> it znltd make sense the regional banks are down that much. they are exposed to the consumer and consumer is doing well for the most part. there's no data suggesting that the u.s. consumer is not still rocking along. a little bit of a disconnect there. >> this is the era -- 2016 is the year of the monkey. >> yes, it is. >> this should be called the year of skeptic. the uae minister says we're going to cooperate and everybody says we don't believe that. janet yellen says the economy is getting better and consumer doing better. we don't believe that. mario draghi, we'll do whatever it takes. we don't believe that. it's like we're calling everybody's bluff, the market is calling everybody's bluff now. we don't believe any of you people -- >> and the bluff indicator, gold, has gone sharply higher. >> you're going to fall when i ask you this, would you buy gold at these levels here? >> i wouldn't chase returns on gold right now we do think in
the medium term, the outlook is going to pick up and we'll go back to believing the global growth story and then you wouldn't have wanted to have changed your asset allocation to chase returns. >> we could hit $1400 an ounce, which especially if they maintain zeerl row interest rates here. >> gold was spoesed to be a hedge against inflation. >> exactly. >> remember that, in 2011? i did a special on this. gold was a hedge against inflation, now it's a hedge against deflation and uncertainty. i think it's safe to say, gold is a hedge against some kind of uncertainty, inflation, deflati deflation, up 17%. we're in the middle of a rally. >> tough to make sense of this market. i don't envy you doing what you do for a living. thank you for joining us. >> samantha, thank you, see you later. another wild crazy day.
xo group ringing the bell here at the new york stock exchange and comcast and others and nbc ringing it at the nasdaq. we didn't have time to tell you about the earnings coming up but that's happening right now on second hour of "the closing bell. let's begin with how we're finishing on wall street. the dow down more than 400 points, 411, a bit of arally towards the close and close down 259, giving up 1.6%. the broad index, s&p 500, testing and briefly going below 1812, a lot of the community was watching. came off that close down 23 points at 1828, almost 1829. the nasdaq was the outperformer, you heard a couple of reasons why, gave up only 16 points and
closed down on strong earnings from cisco and few other things. let's get to what's on tap for today. another busy hour is coming up and julia will bring us results from cvi and aig and diana is all over zillow. we'll get to everybody as soon as those do cross. mike santoli is here along with rob cox. fast money trader tim seymour joins us and christine short. it's a full house and mike, let's begin with these markets especially the last 90 minutes of trading. >> this is how to make a 1.2% loss feel good or not so bad. coming into the day, looking like it was going to be much worse we bunsed and came off of that, if i'm looking at the way
the market acted, not all of that lopsided. it was a fairly controlled. tech basically finished flat. administered the pain in financials. >> the worst performing sector there. we did close below a level that art cashin was telling us to watch, 15,666 signaling a sell signal. we've been saying a lot of people start to pay more attention to technicals when the market has this relentless selling pressure behind it. we have that to watch. what about the fundamentals? >> it's so schizophrenic, one day about negative interest rates and then next day it's like, well interest rates are going up, that's freaking people out. then it's oil going up, that freaks people out or makes people happy. i can't even keep up. i think the fundamentals are a problem. i think the u.s. is slowing.
you see it everywhere and see the reporting that i do. you talk to people. even if it's also one of these things with people think it's slowing it starts to slow. >> what didn't janet yellen talk about that. her testimony was very similar to last july when industrial production was increasing and now it's decreasing? >> she staked her colors that the rates are going up. they decided a little bit too late, one could argue and sticking with that. it's one of those things you get it in your head you're going to do it. i'm not sure they are ready to move based on the data bought that is not that strong. i'm talking about anecdotaanecd >> we had tim on the show yesterday and thinks the recession in this country has already begun. >> it depends on what you want to look at. obviously people like to say the economy still at 53.5 and the manufacturing ism below 50 now and substantially below 50 and that has always been a leading indicator for recession. if you look at the things like ceo confidence index, that is
high correlation to gdp and that's signaling recession. if you look where earnings have been this quarter, they haven't told you the companies have reversed the trend of the last four quarters, an earnings recession for sure. stocks are pulling back. this is a correction in valuations which is totally warranted. the things that are concerning, you talk about all of this today most worry some to me is the bond market. the 10-year spiking down to 1.53, the fact we're in an area where i think treasury yields not only because arguably there's no inflation, et cetera, but this is the only place in the world in the major bond markets where you have any positive yield. if you doentd think they'll continue to go low are, they will as well as all other place has negative yeeds and u.s. treasury looks at least the safe place to invest. >> looks juicier by comparison. he mentioned earnings and for the energy sector earnings are down 75%. >> that's right. >> other parts of it are holding up better. how is that dictating where investors are willing to put
money? >> i don't think fourth quarter earnings season has been that inspirational. results have been mixed but more so negative. not just in regards to the earnings recession, we're in a revenue recession, our fourth consecutive quarter for the s&p 500. earnings, i'm not sure we're in an earnings recession yet because we haven't seen a down quarter for earnings yet. it's revenues that have been particularly under weming, over 40% have been able to beat the consensus on revenues. >> speaking of earnings, the first one of the hour is out pandora, let's get over to julia. >> pandora's earnings, coming up 4 cents in adjusted earnings per share, 3 cents less than wall street analysts expected. revenues did beat expects by a hair.
336 million versus 331 million. going through the report right now, there's no mention of the company wanting to sell, which is what the rumor has been throughout the day today. active listeners coming in in line with xpekations as did listening hours. >> thank you. pandora shares down 9%. what do you make of it? >> it's a company that needs to do something. i'm a recently loyal pandora subscriber but there's clearly slippage and enormous competition. they are not monday tiesing what they have. you'll see revenue greej, somewhere around 24 or 25%, slowest it's ever been. it's a company where clearly what's moving the stock and what will, new york times story about the company starting to have conversations about selling it self. no kidding. and i theink it's a very competitive landscape. >> there's a whole class of internet companies of this generation that there's a sense they had their chance to make
the business model work. we're not going to wait around and see if it comes true. it's been all about consumer surplus, too good a deal as a customer across the board for them to have a business model that reliably makes them money. to tim's point, it's sort of an obvious thing at this point that you think about what your options are outside of that. revenue guidance was below the forecast. >> it reminds us of the late '90s, you had your chance for every dot com under the sun and when that collapsed it really collapsed. >> these guys do have a business model. it may not be as robust as expectations have been and to your point they should have probably sold -- if they are selling, they are selling without leverage. they have a problem. but the business model unlike say, i don't know a t2000 era company, they make money, 60 million subscribers like tim. they are worth something.
whether they are worth 8 or $20 a share will be the question. >> those shares for pan dora down 8%. let's look over those and see how cbs is doing. >> i'm back, that's right, cbs earnings coming in at expectations, 92 cents per share, exactly what wall street had been looking for. cbs revenue beat estimates coming in at $3.91 billion versus expectations of $3.8 billion. in the earnings release, ceo newly appointed to be chairman, giving positive commentary in 2016 saying they expect 2016 to be a very good year for advertising and at the same time other high margin revenue streams they expect to continue to thrive. they say that retransmission consent and reverse set to hit earlier than expected and on pace to surpass 2 billion in 2020 and say the international market is extremely exciting with higher demand for cbs
programming overseas. they don't give details about the new direct to consumer streaming service, but they say it is attracting a whole new set of younger viewers and on better economic terms. on the earnings call there will be plenty of questions about the exact economics much those new direct to consumer over the top services, back over to you. >> a lot in that julia, thank you. shares up about 2% on the news. what do you think? >> you actually saw before the close, cbs is one that came back the strongest. people thought this story would be relatively intact and that's probably the takeaway from the numbers, pretty much what we thought was going on at cbs. it's sort of one of the value plays within media. >> media has been a tough space during this earnings season. >> very tough. >> the bull case, it's less exposed to the most vulnerable areas and doesn't actually have tremendous dependency on the tv bundle rel fife to other media companies.
they have less to lose by going over the top and have great broadcast assets. >> i wonder where this leaves us viacom being one piece of the drama and cbs being the other piece. viacom got whacked but cbs relatively more positive view. >> the question for cbs is going to be over the next nearish term, how insulated are they from the sort of king leer machinations that occur at the top of the holding company. to the extent to which they have good businesses, showtime is going -- is a good -- could be a beneficiary from this over the top stuff as well hbo has been. it's got great network programming, just did this deal again with the nfl, had a great super bowl. they seem to be more insulated from the cord cutting problems but you worry about the governance problems. >> as i just said not many companies are beating on revenue
and this is a great revenue beat for cbs. especially with the other media companies being mixed thus far. we knew into the fourth quarter they had favorable ad pricing and said they had pretty good guidance around ads and in 2016 between the super bowl and the presidential ee lengss, they are really set up to have a strong year. showtime also being one of their strong cable networks along with cbs sports networks. they have a lot of things going for them. they are more insulated as it goes with cord cutters than the other networks are at this point. >> anything you would add? shares are a little negative now and a lot of this stuff it could be different aspects of guidance and call coming up will have more detail. >> things like are they going to overpay for thursday night football. people would like to see them lose the nfl for thursday night. the only thing i would echo, this company is very cheap, ten, ten and a half times, relative to its peers, they talked how
defensive they are. higher affiliate fees in a nontraditional bundle. i think the media sector is starting to look interesting. if disney is the big loser on the cable bunder, these are the big winner. if you've been worried about the machinations in the sea sweep that's not the reason to sell the stock. very interesting access. >> the one thing you can say about the market, it certainly gives you plenty of entry opportunities, if you've had a list of names and saying i can't buy them, they are too expensive, everything is trading at lofty multiples, look now what you can can do. >> if you have money to put to work and some confidence, it's worth doing. things like the banking sector. you have to assume that there are a lot of babies being thrown out with that bath water, regional banks. the companies that don't seem to be exposure to the kinds of things that would impair their assets whether it's the oil sector or brazil, emerging markets. i think that you're going to find that across.
if you've got money to spare and you've got confidence, go for it. >> i think the latter might be more lacking these days. >> morgan, what can you tell us? >> wynn reporting 1.03 per share adjusted versus 76 cents per share. a beat on bottom line. revenue 947 million versus 948 million expectations. the conference call will get started at about 4:30. keep in mind these are results that were preannounced i guess estimates preannounced about a month ago. again, a beat on bottom line, miss on the top line. if you look at shares the wynn reports, up 3.5% in afterhours. >> mike, people follow these stocks for two reasons, vegas and kind of u.s. consumer being one but macau and chinese issue the other. >> you have to imagine margely discount and you had people like steve wynn saying they are not allowing me to make a profit.
you can say inline revenues is enough to maybe think that it's worth taking a little bit off on the short side if nothing else. >> you agree, tim, the shares look positive on pt news? >> first of all, the stocks have been trading in this 52 to 70 range which is a massive range. they preannounced a lot of these revenues on january 15th and stock rallied almost 25%. the story of macau is probably less bad. wynn palace is scheduled to open on time. better than it has been. i think that the trends -- i'm not going to say they turned -- there's no question they are stabilizing and that's a big driver for this company. 52 is the downside. i wouldn't do much with the stock beyond that right now. >> before we let you go, what else would you tell people setting up for the rest of the week? >> i think there's two things, volatility dangsed near 30 today and i think there's no question
volatility is going to be with us for the foreseeable future. whether this is a side ways market or people believe we've fought and beat the war of 1812 on the s&p, i'm not sure. i think there are very good companies starting to look very interesting on valuation but the broader setup, which includes lower rates, that's a concern. i don't think you can freak out here. you should not be doing too much as part of my view but you have to look at your balance sheet and say which companies do i think are getting cheaper in this environment and make your list when you want to own them for a market setting up a little better. >> it's a good point, mike, earlier we also heard, you said it yourself, the ordererly sell-off continues here. and you can make the argument that actually it would be nice to see some kind of flush. >> the market doesn't always accommodate that desire to see some sort of really true panic that has people really amped up. i don't think you can say that's a preseck sit.
this has been going on for six months. six months we've had basically three moves down towards new lows or near the old lows. people got a little worn out and defensive going into this. you came into this year, not as if hedge funds and everybody say i'm leveraged. i'm long, i love this market. it's been a slow accommodation to the negative as opposed to a very frightened move away. >> more desperation at this point. christine, thank you so much for us. tim, we'll let you go, thank you as well. there's more coming up next hour with tim and the "fast money" crew, they'll talk to merrill lynch technical analysts saying that the nasdaq is about to take another leg lower. >> creating fear among investors two top stock pickers explain where to find safety in the market and drawing comparisons to the financial crisis. former wells fargo ceo, why he
says the banks are oversold later on "the closing bell." you're watching cnbc, first in business worldwide. r cloud can d accessible anywhere. my drivers don't have time to fill out forms. tablets. keep it all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberry apple scones smell about done. ahh, you're good. i like to bake. get expert advice for your small business at att.com/small business. [bassist] two late nights in blew an amp.but good nights. sure,music's why we do this,but it's still our business. we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money.
>> let's start with earnings, $1.10 loss versus 93 cent loss estimate. a wider than expected loss from aig. more share buybacks, approving $5 billion in additional shares as well as increase to its dividend by 14% to 32 cents. another piece of news here, aig expanding the size of its board from 14 seats to 16 seats, nominating its existing board of directors as well as john paulson and coe and managing director of icon lp, to be 2016 meeting for aig. aig has been under immense pressure to split the company. a very interesting development here in terms of board seats. for now, back over to you. >> thank you, those shares down 1%. what do you think?
>> it's all about how this thing gets set up with restructuring. i don't think now is the time they will stretch to make numbers. i don't know how to interpret what they delivered today. >> what do you think about a 16-person board in general? >> it's a little bit unwieldy. i don't think that's a net positive in this environment. >> adding a couple of names under that pressure that you mentioned. the market taking a big dive today but the next guests say there are safe places to put your money. david nelson from bell point market asset. welcome to you both and where do you think is a port in the storm? >> utilities and telecoms are usually where you go but i try to find an industry with some kind of secular wind. it's pretty obvious defense mill spending will go up. i like the defense sector, lockheed martin, it's not the traditional place to look for safety but if you look at the
political landscape and all of the candidates, i would venture to say with the exception of possibly bernie sanders, everybody is looking to increase defense spending. you look at a company like lockheed martin, and the rest of their programs really bridge the gap between science fact and science fiction. north rop has the long range bomber. there's a lot of good news in the stocks and they hold up better than others. >> safety in the bombers. >> safety in bombers, it's bold. what would you say about the defense space? >> even bernie sanders though -- >> he's going to have to do it. you have to look at the geopolitical risks in the world. it's all telling us that we're going to need to beef up defense spending everywhere. and even president sanders might want to reduce it. he's got congress to deal with. >> just two quick things, today the stock sold off in an accelerated way about boeing's accounting and this is project
accounting, it's been one of these things hundred over for a while. >> they use contract accounting, that's really -- boeing uses what they call i think it's called program accounting. >> program accounting. >> they use contract. it's a boeing specific issue. >> mark, defense for you or where are you looking? >> admittedly we went chalk, which is to say we went with conventional defensive sector and consumer staples and telecommunications and utilities and even real estate investment trusts, that's a position we have in our outlook 2016 piece several weeks ago. the dividend payers will rotate back into vogue once investors realize the fed would have to walk back those rate hike expectations. and continuation of a subdued economic framework would support those defensive -- consistent grower as well as fact dividend payers, so far they've worked exceptionally well. >> are you worried about their valuations because a lot of
people find that area of the market compelling? >> unquestionably as it relates to utilities, trading at 16 times trailing, which is a little dear for that sector. other two, not necessarily, if you peer inside staples and look at walwalmart, that's just star to work in this marketplace given the fact it was considered a broken icon as recently as several months ago. there's reasonable valuation in dividend appeal there. in the other name i could mention, of course, is at&t. again, telecommunications stocks trading at 12 times earnings with a 5.3% yield. high coupon. >> last word? >> i think those are great picks as well. when you look at the dividend, don't go just for the yield but the payout ratio, make sure they've got in room. >> agreed. >> thank you both. >> thanks, kelly. >> we have an earnings alert to get to on acty vision.
>> activision missing on the top and bottom line, 2.12 pl versus estimates of $2.2 billion. earnings missing estimates as well, company reported adjusted earnings of 83 cents per share versus estimates of 86 cents. the company did increase its quarterly dividend by 13% to 26 cents per share. there was also some guidance here which is failing to reassure wall street now with shares trading down and after hours. the company's revenue guidance for q1 coming in above expectations as did its earnings guidance for q1 but q1 came in less than guidance but for the full year better than expected. generally better than expected guidance, that's not helping the stock in the afterhours trading moments. back over to you. >> as soon as we get the charts back up but they are down 17% after hours on these results. >> no mercy.
when you miss right now, people are not in the second chance business right now. >> we saw that with names across a number of different sectors, activision in the cross hairs right now. let's get over to seema. >> we have a big winner here after hours and that is groupon, shares are spiking after the company reported better than expected earnings four cents adjusted on bottom line. revenue topping expectations at $917 million. the analysts consensus was for $846 million. revenue being held by strong online sales and daily deals and looking at shares up better than 17% after hours. keep in mind year to date still down about 15%. but overall a decent report here. >> seema, thank you, i was looking at the market cap, 1.4 billion and those shares up about 15% afterhours. >> finally some good news, i guess. as you say, mike, you come out
with one little comema or t not sliced -- >> it was trading like a call option on survival. anything upside is okay for now. >> they should -- they could merge with pandora. >> there we go. there's the deal. >> is the eurozone destroying its own banking system? former citigroup senior vice chairman bill rhodes will weigh in and then explaining why the u.s. banks are being unfairly punished for europe's banking crisis. stay tuned.
european banks continue to rock the market. bob diamond joined us yesterday and these were his thoughts. >> when i think of today and the european banks, to be honest, think about march row draghi and the european central bank. when i think many of us three years ago were concerned about the potential insolvency of european banks because of the lack of liquidity in the money markets, governor draghi was very clear that he'll do what's necessary. i thing the bigger issue right now for the global markets is confidence that mario, governor draghi and ecb are providing the liquidity that's necessary. >> is more central bank action needed to save european financials? joining us now is big rhodes, senior vice chairman at
citigroup and also author of "banker to the world." welcome. >> it's always good to be with you, kelly. >> it makes -- you've been on front lines and see the crisis potentially playing out with european banks. what are you thinking? >> you have to understand that credit creation in the banking system in europe is much more important than it is in the united states. because we live such an active capital market. in other words, 75% of credit creation in europe exthe uk because they have a capital market, is a banking system. the banking system has problems. that means the whole economy of europe has problems. >> why do you think though that all of a sudden this is now bursting to the floor in the last couple of months? >> i think it's been brewing for a while because you have to remember in 2009, the regulators here in the united states led by the treasury, but the fed insisted fdic, all of them
insisted the u.s. banking system increase capital substantially, liquidity ratios were pushed up and a lot of bad debt was written off, sold off, et cetera. in the case of europe, it was only in october 2014 when ecb european central bank got control of the regulatory process that you got to get meaningful stress tests. so there was a big difference in timing there. and one of the reasons the u.s. is in much better shape u.s. banks better capitalize higher liquidity issues and done a awful lots of work on problem long book. all of that has come home to roost. >> sure. >> in europe at this particular point. some banks are under more stress than others. >> why is deutsche bank now the poster child when as was pointed out for a while it was banks in italy that had more nonperforming loans, germany has
been one of the strongest economies throughout? >> john cryan did a lot of cleanup at ubs and inherited a difficult situation there. he said so right off the bat and restructuring plan to basically increase capital and liquidity. he says he will do it by selling off assets like the post bank. one could wonder why deutsche ever bought the post bank in 2008. and so he's in the process of trying to basically pull back on some of that and increase the capital. ratios tier 1 are about 11. he wants to get 12 plus. then you have the cocos. >> debt that could turn into equity -- >> somebody called them like a bond with a hand grenade attached. >> exactly. you didn't have those in the united states. it was a much simpler situation.
we justin creased capital, increased equity. i think that the deutsche bank has been under a lot of pressure, it doesn't just start recently, it's been under pressure for quite a while and a lot of litigation costs and problem with russia, et cetera. >> what is the central bank going to do? now that we realize it's a problem and washing on our shores as well, what does the european central bank do? >> i had a chance to talk with mario draghi a couple of times last year, latest in december, he's an old friend. and he will do more -- when he was criticized in december for not doing enough, it wasn't that he didn't want to do enough, it was germans backed by the dutch and fins and others who wouldn't let him. you will see that the european central bank led by mario will take more action. i think the banks themselves have to be in there making sure they have sufficient capital, that they are risk taking something i talked about when i
was with you last -- this last summer, the importance of risk taking at these institutions, all of that has to come to fore. when the minister of germany has to make a comment he doesn't see a problem with the deutsche bank. >> usually a sign that the crisis has started. >> john cryan is a good banker and he needs time to reinstruct tour as he's outlined a couple of months ago. >> we'll see. thank you so much for joining us. >> always good to be here and hopefully next time things will look better. hopefully, i'm predicting that we may get into a recession in that piece i did with the "financial times" in october. >> i encourage everybody -- >> emerging markets already there with the exception of india, we have a rout in commodities and exchange rates are so volatile i haven't seen that in years. and world trade is collapsing. if you take all of that
together, i think we're going to have a very volatile period to cover over the next couple of months. >> i encourage everybody to check it out. thank you for joining us. >> bill rhodes. >> zillow's earnings are out. diana? >> they came in on revenue in line, $169.4 million but swung to a loss of 1 cent per share. the expectation was a gain of one cents. why? higher than expected costs, part of that a pricey lawsuit going on with news corp's move, used to be realtor.com. zillow is the nation's largest real estate listing site and includes trulia and street easy and hot pads and just announce they are acquiring naked apartments. there may be restructuring costs in there as well. they are touting a 61% year over year jump for full year 2015.
but if you look at the sequential, the quarter to quarter, there was a decline from 142 million unique users to 124 million in q4. that's definitely worth watching but declining, we'll want to learn what that's about. revenue in line, loss of one cent. less than expected. >> diana, thank you. those shares are moving lower on the news by about 6%. time for a news update. hi, sue. >> here's what's happening this hour. the head of the environmental protection agency declaring the supreme court's decision to freeze carbon regulation won't quote slow us down. the nation's high court yesterday temporarily halted the white house's clean power plan, which would establish the first ever limits on carbon pollution in the united states. a senate subcommittee today holding a special hearing on zika virus. cdc director tom freeden warning lawmakers zika infections in puerto rico could reach into the hundreds and thousands.
goldman sachs settling a class action lawsuit accusing it of defrauding investors in subprime mortgage offers. if a judge approves, they'll pay $27.5 million. >> this is the coolest story of the day, one of the biggest discoveries of modern science. scientists announcing they have found evidence of graph tagsal waves in space. they were detected by the collision of two black holes. that confirms albert einstein's century old theory of ripples in space time. totally cool. that is the cnbc news update. back to you. they say it's the equivalent of galileo using a telescope to see the stars. >> i would say it puts the global markets in perspective. >> yes, it does. >> thank you so much. >> sure. >> sue herrera with the latest. earnings calls from cbs and wynn reports are now under way. real bring you the highlights and will the plunging 10-year
treasury help fuel a housing boom? when we come back. the market's been pretty volatile lately. there is a lot at stake here, you know? look jim, we've been planning for this for a long time. and we'll keep evolving things. so don't worry. knowing what's on your mind and acting accordingly. multiplied by 13,000 financial advisors. it's a big deal. and it's how edward jones makes sense of investing.
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and continuing to decline throughout the morning and especially early afternoon much the dow fell as many as 411 points during the session as oil hit its lows. also boeing had a big drop and that oil low was the lowest since may of 2003. then all of a sudden we starteded to see stocks make a late stage comeback on the last hour of trading, there was a report that uae official was saying opec is looking to cooperate in a production cut and all day the nasdaq was outperforming and when all was said and done, the dow closed down only 255 points. helping drag down the market today with the possibility of adding concerns, joining us to help figure this out -- even i'm backwards, former chairman and ceo of wells fargo. thank you for joining us. what would negative interest rates mean for u.s. banks? >> before i answer that, kelly,
i want to acknowledge i saw my old colleague bill rhodes on your show a few moments ago and one of the most experienced and smartest bankers i know. good to see him again. >> he wasn't that positive by the way, dick, on the outlook as you heard. he's talking about recession and talking about risk in the european banking system. you know? >> i think the world -- the rest of the world does have issues. i don't think yet apply to the united states and i don't believe -- i believe there's a risk of recession in the united states but i don't think there will be one in the united states. >> rob? >> one of the things we're looking at is this extraordinary decline in the bank stocks. not just the goldman sachs and city groups and ones with exposure to brazil to securities market, but even plain vanilla bank stocks and regional bank stocks and u.s. bank corp, people like that. how worried should we be about
the possible impairment of their balance sheets? because if there snts any impairment, they could be buying these things at 80 cents on the dollar? >> i don't think there is a great worry of impairment, unless we have a very, very long and serious recession. i think this is more of a reaction to what is happening to banks overseas and the possibility quite frankly of negative interest rates. that would be very negative for banks. it wouldn't do anything to the balance sheet, they wouldn't earn as much money. and i think it would be a big mistake. i think negative interest rates cause your currency to devalue and gives you -- doesn't you don't want to admit you're devaluing your currency but that's the effect. the consequences that you really puts a tremendous strain on your banking system. that cannot be good for anybody's economy. i think it's a big mistake and can't imagine that the federal reserve would be dumb enough to do that. >> i mean, it seems as if our
fed is deeply resistant to this idea, hopefully has other options. but even outside the prospect of negative interest rates, clearly net interest is hard to come by just because of how the yield curve looks right now. wonder if the market is essentially saying, look, we had pretty much a credit cycle. based on regulations of a lot more capital, the returns weren't that great across the board. so how do we see our way towards a growth in this industry if there's going to be any at all? >> well, i don't think there's going to be much growth. you're right. the banking industry is already taken all of the allowance they can and their cost reductions are limited. it has to be about revenue. i don't think you're going to have revenue growth but i think that the market is worried about negative growth. and worried about balance sheet disruptions. i think they are way oversold. you have banks that are selling now for around ten times
earnings with dividends 2.45 to 3.5%. relative the rest of the market they are cheap. i've been buying stocks all day. in fact i have a ton of wells fargo and bought even more today because we're having our 25% off winter sale. i mean these are good values at this time. >> would you buy deutsche bank? i wouldn't. >> i'll leave it right there. appreciate the trading disclosure. thank you for joining us and we'll see if the housing market ever gets a lift from these rates. let's send it over to dominic chu -- >> i'll actually pick it up. nuskin, reporting a miss on the top and bottom lines, 62 cents on revenue of $572 million. here's the thing, guidance coming in well below expectations and that's what seems to be hitting stock right now. down by around 15.5% despite a weak report card the company
increasing quarterly dividend by 1.4% to 35.5 cents per share. >> dom, you've changed since the last time? seemax seema, thank you so much. >> twitter is still falling after its disappointing earnings. the social media service failing to grow the user base from the past year. we'll examine the year the coo adam bain laid out to turn the company around. this just got interesting. why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache.
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our focus is around live, live is important and powerful to people and to the powerful t. and also, to the business. you know, on the product side, we're focused on refining an iconic product. we know that we're going to see a return to user growth. and also, the business is in a really strong place. we've just don't integration from twitter into periscope, so you can actually go live from periscope and have those live broadcasts show inside of tweets. we're focused on live, because we think live is actually a really powerful part of the platform. whether it's live video, or live information. we think we've got a massive opportunity when it comes to live. >> live. that was twitter chief operating officer talking about the company's strategy to spark user growth. which has stagnated the last quarter. will the focus on live work for
the company, though? that's the question, guys. what does that ultimately mean when it has many concerns still looming about its live product, which is twitter. >> i do think at root it's taking advantage of one thing that twitter can do than other alternative platforms. it's just an acknowledgement, we have this franchise, let's try to exploit it the best as possible. but the tone and content of what he said conveyed this idea that they have all kinds of time to figure this out. this is what we're focusing on now, as opposed to here's the fix, here's what the product will look like -- >> kevin yesterday, one of the shareholders, saying no one is expecting quick fixes anymore. >> i think that's right. they've got 320 million users. but everyone seems to say, you need to have more. what they really need to think about is show a little more love for those users, find better products, find better experiences and better experiences for advertisers or whoever they're going to monetize this.
i feel like they've been torn into all these different directions. live seems to be an acknowledgement to do more with what they have, than to say we're going to compete with the 1.6 million people on facebook. >> again, even with that being the case, people are looking for more solutions. >> the question is also, is this company sized correctly? are the finances of the company being run right for what it's ultimately going to be as a business? the entirety of their cash flow basically, adjusted cash flow, all those questions, i don't think the market is swallowing it very well. >> up next, we'll get an update from the cbs earnings poll. "closing bell" will be right back.
welcome back. shares of cbs trading lower after hours, despite beating wall street's estimates down about 3%. julie boorstin has been listening into the company's conference call. hey, julia. >> that's right. cbs shares first higher, then moved into negative territory. the ceo saying that strong fourth quarter results, the
springboard for an outstarnding 2016. >> our assets are performing extremely well. and they're set up for a terrific future. i know you're sorting through a lot of earnings analysis this week, and when you look at cbs, you'll see that we have a unique and compelling story. >> saying super bowl revenues beat financial targets. this year over-the-top subscription services will start to impact results. he praised cbs over the top saying they're looking at making more original programming for cbs all access as well. he said when accounting for all digital platforms, the viewership is up 6% from ten years ago. kelly, back over to you. >> that said, some would read it negatively. julia, thank you. another crazy day for markets. we'll tell you what should be on your radar for tomorrow when we come right back. new? how's your mother? umm..she's doing good.
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>> engine of the world. >> i'm looking for more signs of the mna bubble is popping. veteran wall street bankers sells to french bank. >> thank you for joining us on "closing bell" today. you can catch rob's pieces on breaking news, and select articles are now available on cnbc.com back slash pro bell. >> "fast money" does start right now. overlooking new york city's time square. traders from the desk are tim, david, dan and diadomi. the man who called the decline in deutsche bank back in december said there's something more troubling in the global market, and it could spell more pain for stocks. plus, worry about your money. we've got four stocks that are up this year, and last year. they're unbreakable stocks. we'll tell you if they're worth buying right now.