tv Closing Bell CNBC February 23, 2016 3:00pm-5:01pm EST
>> tonight -- >> you'll ask scott about that. i'm sure he'll have something to talk about. >> i'll see you on "fast money" at 5:00. >> the closing bell is coming up at right now. thanks for watching "power lunch." hi, everybody. welcome to "the closing bell" i'm kelly evans at the new york stock exchange. >> i'm bill. the laws of physics have not been repealed. >> because oil is moving lower. >> once again, yes. the dow, s&p, nasdaq all down more than 1%. just off the lows. energy has been "the biggest loser" as oil prices close down more than 4%. this is the april contract now. under pressure as jpmorgan ceo jamie dimon said oil decline is hurting banks. we'll bring you more of jamie dimon's comments coming up in just a moment here.
meanwhile, housing a bright spot in today's market. home depot and toll brothers up. home depot higher by 1.5%. toll up almost 4%. toll brothers ceo will join us in a first on cnbc interview to tell us what to expect heading into the spring selling season. all the outrage about rising drug prices may be overblown according to a new report. cbs health says that growth for prescription drug costs is slowing. they're not saying it's going down, growth is slowing. we've got details and the impact on the pharmaceutical stocks also coming up here. we'll start with comments made by j.p. morgan chase ceo jamie dimon as we mentioned at the bank's investor day conference here in new york city. kayla town, she has been covering this important story for us all day, kayla. >> jamie dimon is taking the stage for the question and
answer session. they pull back the curtain on exactly what their business looks like for the year behind and the year ahead. i want to show you what he said this morning around 8:00 a.m. with his opening remarks where he was talking about all of the issues in the markets, china, oil and gas, emerging markets in general and he said those are the financial markets you see. in a little bit of disarray. sometimes they act rationally and sometimes they don't, but we'll give you the other side of this. the u.s. economy is 70% consumer. the consumer balance sheet has almost never been in better shape. sounding his token optimism as he always does. the problem is is there much to like? there are still some risks. he was talking about european counter party risks when he got a question about that from glen shore, one of the analysts who covers jpmorgan. what spooked investors is when they lads out their exposure to oil and gas. the company said it would take
$600 million in reserves for energy and commodities in the first quarter. that would bring their reserves to $1.6 billion just for those two sectors, but if oil stays at $25 a barrel for the next 18 months, they would need to double that amount. and the thing is, jpmorgan gives more detail than any other banks, any regional banks, any banks that don't have investor days where they pretty much lay out every single line bare for investors and get questions throughout the day. even so, i think it just gave a small sliver of exactly what these banks are going through with low rates, with markets activity still being what they are, the investment bank chief daniel pinto just moments ago said that investment banking fees will be down 25% from a year ago and markets revenue will be down in the order of 20% from a year ago. so when you think about persistently low rates, the risk of energy losses and then some of the previously strong areas
not being as strong as they were, that's why you're seeing the likes of jpmorgan down 4 and some percent down. >> it was accelerating after the first quarter. pretty big declines. kayla taushi there. shares down 4.2% today. that's where they were when jamie purchased half a million shares on the 11th. >> how have other company's shares performed since this so-called dimon bottom when he bought all of those shares. dominic chu has those stories. >> kayla mentioned optimism or token optimism from jamie dimon and whether or not that optimism carries through. since that february 11th purchase of nearly 26, $27 million worth of jpmorgan stock, jamie dimon has seen his shares, yes, rise on the heels. it had been beaten down pretty well and then fall on top of that. if you take a look at the dow jones industrials, we're still
up 3% since the february 11th purchase of jamie dimon's own shares. parts of the dow that are performing relatively well in this particular environment. again, the dow just down 5%, 6% year to date. if you take a look at the big names in the dow that have done the best during that time frame, ibm shares, believe it or not, up about 13%. we know ibm has been a lager in the dow for a few years now. still, just in the past week and a half or so up 13 1/2%. united health care up and home depot helped up by 9%. the best standouts in the dow since the dimon bottom. also, if you take a look at the broader s&p 500, the sectors that have done the best during that time frame, on the retail side of things, kayla mentioned jamie dimon's comments on consumer spending. consumer discretionary up 8%. financials, yes, the banks are having a tough day. they're still up 6% during that time span.
industrials up 6% as well. there are those who believe, kelly and bill, that financials remain a key part of this story. there is a question about whether or not you can see any kind of sustained rally in the stock market if these banks are not participating, they are not today, and that's leading to some at least caution among traders out there about whether or not you can believe that it really was a dimon bottom back on february 11th, guys. >> i'm just wondering, too, dom, when the financials were really under pressure, you also had the benchmark 10 year interest rate moving towards 1.5%. we've seen a pretty nice pop from that recent bottom. i'm thinking about how that might be feeding in all of that. >> it could be. we're at 1.8% for the ten year yield. still well below 2% mark. there are questions about future interest rate policy from the fed. of course, that cloud is going to be hanging over that and all of these financial services companies in the coming months. if you take a look at the banks, yes, the fed is not the entire story, but it's still a very
large chunk of it. energy, of course, kayla mentioned, also a big part of that story as well. for the banks, we refer to them so importantly because it's the second biggest sector in the entire s&p 500. many people view it as the grease behind the world economy. if these banks in the u.s. and the ones in europe can't perform or aren't performing, what does that signal about the rest of the overall market, guys? >> absolutely. thanks so much, dom. >> thanks, dom. >> great information. dominic chu at headquarters. >> let's kick it around. the closing bell exchange. joining us eric ristovan, peter kosta from empire executions is standing by at post 9 and rick santelli checks in from chicago. peter, we're just off the lows right now down over 200 points on the dow. the s&p at 1920 as i said earlier, you know, the laws of physics haven't been repealed. can't go up forever. what do you make of today's decline? >> today is all about oil.
i think we're going to continue to see this in lock step. oil and s&p are going to perform like that probably until i'm going to say until you start getting into the election season. and i know that we're doing a lot with the caucuses and all of that and the primaries, but i think once there are candidates chosen for each party, i'm really thinking that that's the time you're going to see a divergence. that's when investors will start looking at, you know, platforms, what the future might hold for the country depending on who gets elected. i think that's when you are really going to see that divergence. >> gordon charlot made a similar point. get through super tuesday, get some clarity on who the front-runner might be, eric. what happens if we move through that and the front-runner is somebody, for example, like donald trump. how are markets going to take that? >> well, yeah, you know, the market doesn't like uncertainty. i don't think anybody's really certain as to what a donald trump presidency or policy standpoint would look like. i think the reality is that you
kind of go back to, yeah, i know politics is in the background and i'm not dismissing it as an issue, but really oil in the stocks have been pricing off the same thing. i don't think oil is pricing stocks, i think they're pricing off the same thing, and that is the global concern over recession. so if there's going to be a recession that's bad for stocks, that's bad for oil. we don't think there's going to be a recession and we think it's likely that when the market head gets comfortable with that idea you'll see stocks trade on fundamentals and oil fundamentals do not look good. >> hey, rick, let me ask you. peter says the market could -- will decouple from oil at some point. when do you think that will happen? what's going to cause that, do you think? >> i think they'll decouple from energy when crude oil has a magnificent and sustainable bounce back into the, i don't know, high 30s and an aggressive kind of capitulation bounce. so i think the good news of what oil is down the road, whenever
that is, i think that's what will separate it. i think the down side keeps oil in play with the equities personally. you know, let's look at the landscape because we talk about all these issues, but sometimes the macros elude us. you know, we're down 31 basis points on a two year, we're down 53 basis points for the year on a ten year, we're down close to 6% in the dow and the s&p and we're down almost 10% for the nasdaq. so, you know, considering those issues, i personally think we're just in for more of the same, and the real question is is how volatile the process will be. i think for the moment we're at an equilibrium. i thought this morning when ten years briefly traded above a yield of 180 that we'd be a lot calmer than we were, but it's impossible for treasuries under the macro numbers i gave you to ignore when the stock market goes triple digits down, and i think that's going to be something that is ongoing but it
mostly is a day trend. i will be shocked if yields don't inch back up by the end of the session because i think the oil stock/bond trade, a lot of that is from a day trading vantage point, especially some of the speccing on buying tresh zblis that said, we did, eric, find out that both german sentiment weakened by one measure and u.s. consumer sentiment weakened this morning. it surprised a lot of people. you mentioned you don't think there is a global recession on the horizon but that markets are concerned with that. do you think that this new information is partly why we're trading so weak today? >> yeah, i think obviously you have to take consumer sentiment shifts so seriously. consumer spending hasn't been so affected by consumer sentiment. the consumer isn't spending in their typical pattern. what's happened since the 11th, you're talking about howell the market has done since the 11th. we saw a real solid retail number for january out of the
u.s. and a revision to december. we've seen good home sales, good employment in terms of jobless claims. you've seen ppi and cpi show some upward pressure. i think market was trading on fundamentals. this is again a worry about recession and what happens if oil stays at 25. i do not think this is endemic. >> we have to go at this point. thanks for your thoughts on today's market action. >> thanks, guys. 45 minutes to go here just about. dow's down 202 points near the lows of the session here. >> yeah. yeah. close enough. >> the s&p shedding 25. the russell is down .7 of 1%. it's actually outperforming a little bit. the transports, they're hanging in there relatively speaking. >> transports and russell into bear market territory down more than 20% from their most recent highs. >> that's, true. >> when we come back, monetizing mobile. our john ford has how a new breed of tech companies is reaching consumers and getting them to spend. also ahead, the ceo of toll brothers will give us his take
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down 1.45%. oil leading the way to the down side again today. wti, the new contracts down 4.1 or 4.2% at this hour. also lower, fit bit, boy, slumping 20% today on disappointing first quarter guidance. we told you about it yesterday. ceo james park today tried to do some damage control on cnbc's "squawk on the street." listen. >> we tried to give pretty conservative guidance to the street. look, we had a record year and a record quarter. three straight quarters where we've beat guidance, which is fantastic. for us, it was a great year for us. the guidance that we're giving for 2016 reflects the future confidence that we have in the business. >> wonder how many steps he does every day. several analysts downgraded the
fitness tracking devices stocks. some of them still remain skeptical about fitbit's new products out this year. fitbit shares down more than 30% since going public at $20 a share last june. this year's mobile world congress is highlighting a new breed of companies. let's get out to our john ford who has a special report for us today from barcelona. hi, again, jon. >> if you want to know about monetizing mobile you have to look into how to grow mobile. there's nowhere better to go to figure that out than facebook. take a look at these numbers. i mean, facebook, the main product has 1.6 billion monthly active users this month. what's app has 1 billion and they have instagram still growing with 400 million. that's more than twitter has. i spoke to facebook's head of growth about the key to growing and what is really behind that. he said it's retention. keeping the users you already have. take a listen.
>> it's absolutely essential. you cannot grow a leaky bucket effectively. you can only grow services that people like and enjoy, and i think facebook addresses a core communication. therefore, i feel privileged and lucky to work in a product that people love and help growing it, but it is essential that people like the product and have a good experience, otherwise it's really hard to grow or you can grow it artificially but over time it's unsustainable. >> reporter: with a social product there's really a virtuous cycle. if you keep the people they have, their friends when they yoin the service are likely to stay. if that's moving in a bad direction, not retaining users, it will work against you. look at twitter, it's having exactly that problem. probably take a cue from facebook's head of growth on this one. learn to keep the users you have before you can grow, before you can monetize, kelly.
>> are you having a good time out there, jon? i feel like your a a little hoarse. lost the voice? >> reporter: well, yeah. yeah, a little under the weather before i got here and i've been doing a lot of tv, which is great. >> we didn't know if it was party time out there in mobile world congress. >> feel better, jon. >> everybody's sick around here. >> tea with lemon. it's going around here. even in spain, apparently. we've got the markets with 40 minutes left down 200 points on the industrial average. the nasdaq is the biggest decliner percentage wise down 1.4% as i pointed out on this first day when april becomes the new front month for oil, wti down. >> the market is highly correlated. up next, one of the largest prescription drug providers in this country says the rise in drug costs may be slowing down. a top analyst gives us his take. >> the latest results of the new "consumer reports" picks of top auto picks for 2016.
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the worst was oil. >> big time. >> the outperformer today is consumer staples. industrials are there in the middle about 1%. >> let's look at some of the big movers. western digital trading lower. the data storage company says that a chinese investment group has now terminated a deal to buy a 15% stake in western digital after the committee on foreign investment in the u.s. decided to conduct an investigation into that proposed investment. meanwhile, valiant pharmaceuticals is rising. the specialty drug maker says it's going to re-state earnings for 2014 and 2015. a board committee there investigating into its dealings with distributor filodore. they said some revenue should have been recognized at the time drugs were dispensed to
patients, not when they were delivered to filodore. valeant will have unedited earnings. >> growth in prescription drug prices is seemingly slowing. that's according to one of the largest pharmacies, cvs health. spending on medicine rose 5% for them versus almost 12% in 2014. what does this mean for the pharmaceutical sector? joining us is richard evans from ssr health. welcome to "closing bell." you know, i guess when people marginally think about the fact that prescription drug prices were up about 12% last year, what does this tell us about the price pricing power that cvs has here forex ample? >> yeah. so the ppms and the hmos have a fair degree of pricing power if they're willing to exclude certain drugs from formulary. that's what's happened over the last year or two. cvs and united health care have
taken bigger brand categories. instead of allowing every brand into the category, they've played musical chairs. instead of three brands they're going to have two instead of two they'll have one. they've forced them to bid together. that's explained all of the slow down in drug pricing over the last two years. >> you will understand maybe my skepticism at a report that says drug price increases are slowing. when we talk about individual -- when we talk about inflation in this country, the inflation that the individual pays, you know, the first thing everybody talks about is the price of prescription drugs. are we talking about the beginning -- are they topping out right now? you know, what is going on with prescription drugs? >> yes. >> what would cause a slowdown in growth? and is it here to stay? >> yeah, sure. i think it's important to divide what the consumer pays and what the plan sponsor, the employer in most cases, pays on the consumer's behalf.
about 20% of drug sales go to households where the family is paying out of pocket as much as they're paying for written utilities or mortgage plus utilities. then about 75% of drug sales go to families who are paying as much out of pocket as they are for groceries. so the consumer, the family cannot pay more than they're currently paying. so any additional drug price inflation means g.e., ford, john deere who has to step up and absorb that additional inflation. up until about 2014 they were willing to do that because the alternative is you had to tell employees that there are certain drugs you can't have. >> right. >> we kind of crossed that limit in 2014 and the plan sponsors started saying, you know what, instead of being able to take all of those drugs, i'm going to narrow that category down. that's powerful. so over the last two years we've only seen about 40 basis points of net real pricing gain in pharma. in answer to your question, bill, i think we're topping out, i really do. >> so, again, if we look at cvs,
they said they paid 5% more for prescription drugs last year, i meant that's relative for what i think on the u.s. as a whole is 12 to 13% increase in drug spending last year. if cvs is only seeing a 5% increase, that means other people are seeing more than the 12 or 13%. >> exactly. >> who are those parties? what happens with that spending? >> sure. it's not clear from the cvs report where they got the 12%. if you look at just list price increase before rebates and discounts, that 12% is about right. but very few people pay that price. most people are paying or are sponsored or they have a drug benefit, they have some type of insurance and their inflation rate is much lower. it's closer to that 5% that cvs is saying. i think that 11.8% figure looks like the list price inflation and that 5% looks like inflation
after rebates and discounts. it's not only cvs, express, optimum, other ppos and hmos are receiving that. it's kind of like car pricing. the sticker price goes up but that's not what people ever paying. >> airline costs, et cetera, et cetera. >> exactly. >> richard, good to see you. >> thank you. time now for a cnbc news update. welcome back, sue herera. >> thank you very much, bill griffeth and kelly. here's what's happening this hour. syria has agreed to a cease-fire with the exception of military action with isis and al qaeda linked actions. that cease-fire is set to begin this saturday. the italian navy rescued 731 migrants from overcrowded boats in the strait of sicily as they tried to cross the mediterranean sea to italy. they were picked up by three naval ships. firefighters working to
rescue two window washers stuck on a scaffold on the 72nd floor of a new york high rice building. they're secure and they're working to bring them in through a building through a window. that will make your palms sweat. u.s. candy bar maker mars is recalling candy bars after plastic was found in germany. all produced from december of 2015 to january of 2016 are being recalled. that is the c 234 bc news update this hour. back to you guys. >> thank you so much. 30 minutes to go here. dow is down 202 points. s&p is giving up 24 today. the vix is higher. again, it's the mirror image, the flip side, whatever you want to say of what we saw here yesterday. the nasdaq is down 24. >> therefore, it's a turn around tuesday. >> yes, it is, it's back. unfortunately this one is going the other way. >> a leading trader will tell us
the last half hour of the trading session. we have o'neill securities here. we were just talking during the commercial break about perceptions, about the economy if that's what's motivating the market? >> i think it is. whether it's oil under pressure, stocks under pressure, whether they're trading with each other or not, the fact is are we talking recession and global recession and slump or are we talking about, geez, maybe it's not so bad. maybe we will get a rate increase, and then we see the market rise. >> then you hear from jamie dimon who says the consumer has never been in better shape. we'll hear from doug yearly from toll brothers who says the
market doesn't reflect it. >> when the market doesn't reflect it, you talk to joe q public, friends in town who have small businesses, you get a very different view from, you know, your local neighbor. you're not getting the sense that people feel so empowered by this recovery that we keep talking about. actually, there's a level of concern still. >> very quickly, you sound frustrated. >> i'm very frustrated. we've been going like this for a month and a half. >> you don't see an end to it. >> i don't see an end to it. we're not getting a real catalyst. daily conversation but not a daily catalyst. >> kenny p. looking for a catalyst, kelly. >> we'll see if mike can find one. quick check on home depot, the stock up after the home improvement company reported better than expected sales. you can see a rally of almost 2%. michael santoli joins us now with more on how this stock is
pretty reflective of this market cycle, mike. >> really, i think the quintessential stock of this cycle, the most important stock, mostly because all the forces driving the stock to a 240% gain just about in the last five years have been the things that all investors have been pinning their hopes on. discipline. that's been flattering their bottom line numbers. they have managed to squeeze a lot more sales out of their existing customers and do a great job on a single store basis but they're not really growing the footprint of the business. just really to put some numbers on it. home depot has bought $30 billion worth of stock in the last five years. over that period of time per share earnings are up 167%. but the same net income today on five years ago share count if you spread it wider, if they didn't do the buy backs, would have been 110% increase. essentially the stock today trades at 23 times less than the
5 x. this is an example, maybe the exception, kelly, that proves the rule in terms of how buy backs can be effective. if you can actually grow the core business while using excess cash and taking capital out of a mature business, that's the perfect combination. others have done this around the automotive, arguably, autozone, other retailers have tried for this. you look at macy's. $2 billion of stock last year at price close to $70 a share and it's trading today in the 40s. that doesn't seem like the exact same. >> ibm, this is often brought up citing companies like ibm or macy's or pick your example. if only they had invested this more in the business. >> right. >> instead of focusing on financial engineering they would have had a better result. >> ding, ding, ding. >> i hear that except it's not a fair choice. you're not going to ibm saying what would you have otherwise done with the billions of dollars of borrowed cash? would you just have thrown money at the r&d guys and said come up
with something brilliant? there isn't something necessarily for very old mature companies to do with the cash that their businesses are throwing off right now. that's one of the lessons, one of the frustrations, really. >> home depot is an example of somebody who says, hey, we have our mojo back, we're buying a bunch of companies. thanks, mike. >> see you shortly. be sure to check out cnbc.com/pro for more on that. home builders saying this morning it expects a steady upward trend in the housing market. joining us now is douglas yearly, chief executive officer at toll. welcome, doug. good to see you again. >> thanks for having me. >> and what's interesting about this part of the market, by the way, we were having this discussion yesterday on the show. some concern that the luxury space in the world out there is slowing. do you think home building is part of that trend and if so why? >> i think so. you know, the -- what's going on
in the global markets is not reflective of what's going on in our business. we're very happy with where we are. our revenue is up. our orders in the fourth -- in the first quarter were up 24%. our traffic in february is 13u7%. there's no question there's been some concern with what's going on out there in the larger markets, but the housing market is still in the early stages of recovery. our business is good and we're looking forward to the spring season and feel very good about it. >> so why doesn't it feel like that overall? you and jamie dimon are essentially telling the same story today as i pointed out earlier. the balance sheet for the average consumer has never been stronger. it reminds me like we're all getting together for a party, all dressed up, ready to go, the band is there, the food is there, the drink is there, but we're all standing around looking for each other. nobody actually wants to start the party. why is that, do you think?
>> well, what's happened is, you know, the equity markets since the beginning of the year has certainly caused a lot of people to be a bit concerned, but ultimately i think they look at their own personal balance sheet, they look at the home they own, at their desire to move up to a nicer home, at their job security, at their ability to sell their own home because most of the local housing markets are in very good shape and they're moving on with their lives. that's what we're seeing. we have very good activity. we think this market will continue a slow, steady, positive progression. it's a fairly early inning of the recovery. it's been a longer recovery and a slower recovery than we would have thought coming off the depths of what we went through in '07 to '11. so i think overall people feel good. it's taking a little bit longer to step up to make the buying
decisions. we don't see any sign of recession and we're very happy with where our business is. we love the luxury end of the business, where our locations are, our buyer's ability to get a mortgage. mortgage rates are 3.5% right now. they've come back down. overall the housing market is in good shape. what's going on in the larger equity markets and the global economy we're just not seeing. >> are you going to re-allocate resources, doug, away from say the 1% of your market even down towards maybe the sort of aspirational and what for you guys would be more of the middle income, maybe even a first-time home buyer kind of thing? there seems to be a little bit of that re-allocation happening more broadly. i'm wondering even in your piece of the business are you going to be doing some of that? >> our sales right now are at the highest price point we've ever had. we're in the high 800,000 range. that doesn't mean we don't sell 3 and $400,000 homes matched with our, you know, 10 and $20 million condos in new york and
our 3 to $4 million homes in northern and southern cal. so we have a good variety. we are america's luxury builder, but we are not super custom. we are not way out there on a thin branch. we sell a lot of homes from the 3s up. >> are you going to take that sort of 3 to $400,000 segment and invest anymore in that part of the market instead of the $3 million homes? >> yeah, i think you'll see us doing more of that. you know, it's the bmw 3 series. there's no question that toll brothers, which is known for the more expensive product, will continue to offer luxury homes but at a wider price point. we're also doing more and more active adult homes, which is a 55 and over baby boomer crowd. by nature those homes tend to be ability less expensive. >> yeah. >> very good. doug, good to see you. thank you. >> thanks for having me. >> doug yearly, the ceo of toll brothers there. about 20 minutes to go here.
look at this, the market's actually coming back a little bit. the dow is down 162. the s&p is down 19 points right now. the vix is still higher. a little bit more elevated today as oil prices have moved lower. the nasdaq down 54 points. >> i can't get my head. communities for 55 and older, that's me. i'm not ready for shuffle board. that's all i can say. pandas and penguins have been the formula for success for dream works animation. "kung fu panda" flicks raking in money. mike san totelli saw that. jul jul julia borstin tells us if they can boost the market.
about 15 minutes left. the dow slowly coming off the lows. i've been trying to catch sight of arthur cash. it's early to get the in balances, whether it's a buy or sell, but i suspect we know which way it's going. you never know. >> yeah, you imagine it's making its way into the market. >> the dow down 1%. the same for the s&p 500. well, panda is well versed in
kung fu. kept dream works in shape. but a studio cannot only survive on cuddly cute bears alone, which, sure they can, right? >> they can try. >> julia is here to tell us how ceo jeffrey castenberg's company is turning it around. >> they'll beat expectations as they did last quarter and show his turn around is working. perhaps most important is what he says about "kung fu panda 3." stellar numbers in china. it's the keystone to building a new chinese film giant. next year his joint venture oriental dream works will start to roll out mandarin language films in china. they're expected to grow 17% to swing from a loss of $3.08 per share to a gain of 16 cents per share. over the past year the studio's laid off employees and done writedowns on disappointing
performance. with the stock down 18% so far this year, this quarter is key to show the restructuring moves are paying off. kelly? >> we look forward to that report. did you see the movie? >> no. yeah. you and i are thinking the same thing. julia, you will see those because you have young children. you don't have any kids. mine are grown now. i don't see them. do you go? >> it turns out pandas do this kung fu -- i saw a documentary. they're sort of on their hands on the ground and their legs up on the tree and they're doing a bizarre -- yeah. yeah. you look it up. i'm telling zblu really? >> i realized that's why they call it kung fu panda. they do crazy moves that real pandas do. in any case, 13 minutes to go here. >> the stuff you learn on this show sometimes. there you are. he heard me. art cashen saying 300 million to buy on the bell. we do have an imbalance on the buy side. that may be playing out right now. >> yeah, exactly. >> energy dragging down the market today but our next guest has a few ways you can play that sector when we come back.
i will confess. there you are! >> oh, hello. >> you started regailing people with your panda story? >> no. >> amy wu, how are you? market continues to come off the lows here. we were down 220 points at the low of the session. now down 160. the in balance was to the buy side. energy still calling the shots. what are you seeing with energy? are you seeing opportunities there or not at this point? >> yeah, definitely. i think the biggest concern over the last few weeks has been how do you hedge something that is so expensive. so when you finally do start getting a rally in the market and the prices come in a little, granted, they're still high, you get any sort of reprieve, to me, that's an opportunity to do something with that as a hedge. the second aspect that i say, remember, when things go down, everything is very correlated. if you're interested in doing something to protect energy, consider materials, consider
industrials, consider things slightly outside the parameters but very correlated. >> i was going to ask is there anything in this market that's not correlated? we're back into the days where yesterday energy was up, everything was up by about the same percent. today is a different story. where do you find areas trading on their own story or information here? >> not that many things. it's funny. if you look at what seems interesting or suddenly out of pocket, utilities, that's a rate story, do you say, oh, look, the financials seem okay. that's also part of the rate story. to be honest, it's been very macro, very correlated and especially now that we've tapped earnings and the two biggest catalysts are ecb and the fed. there aren't that many things tied to one or two of the big mac crow themes right now. >> so after a tough january -- a february that's been mixed, we're sort of even right now. how would you describe sentiment in this market? bearing in mind that the vix is sitting right on 20 right now. >> you know, a lot of people keep asking me the question
which is it seems like options markets should be more elevated. what's going on? and part of it is when you're down a lot, you don't have anything to protect. so that becomes reflective of the market with not as high a price as you would expect. what i would say is i think most people believe that both the ecb meeting and the fed are going to be relatively accommodative. if it is time to put on a call spread with a relatively high payout you consider that. >> fear factor is not all that high? >> it's not all that high considering the things we know to be outliers. a lot of it has to do with if you don't have anything to protect, what are you going to put on? >> i like your point how everything comes back to it. which way are rates going? what's the central bank going to do? it tells us as many other market watchers have told us is this boils down to a global market recession scare. it says, yes, it's happening or, no, maybe not so much. >> the other thing i would add
is markets have been abnormal. short term option prices have been high relative to long term. that's not normal. the future is supposed to be more uncertain than the present. you sort of saw that come in. after days like today it will go back to being inverted. >> wow. bizarre. amy, thank you so much. >> amy, thank you. we'll come back. we have the closing countdown and if you're real good, more panda stories as well. >> i was going to elaborate but i shall not. >> don't go there. >> there is a bunch of earnings. not only dream works but we have papa john's coming out, angie's list registering the first annual profit today but the stock is still suffering through decline. scott will join us on his take of what's happening to that stock today. you're watching cnbc, first in business worldwide.
or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause) three minutes left before the bell rings. bob joins us for the closing countdown with the dow down. the bottom dimon. back to the 11th when jamie dimon said he bought the stocks. >> 25 million. >> let's look at the various markets and how they've done since february 11th. that would be the dow there. in that time it's gained more than 3% with today's -- >> decline today. >> a little less than 6%.
>> crude oil, what it's done over that same time. we know the correlation that exists between equities and oil. look at that. almost an identical -- >> 26. >> look at that, oil up 16% in that time. >> amazing. >> just since february 11th. >> we're at $31.88 today and the ten-year yield? we're at 1.74%. we hit that low of 1.53 at one point but we've certainly come off those lows as well. one other thing as we get ready for earnings tonight, we have a whole slate. good cross section of companies announcing earnings. there they are. dream works animation, first solar, caesars and avis budget group. by the way, papa john's also announcing tonight. so the big question today, is this just sort of a back and fill kind of day that happens on many markets or are we the start of another leg for the down side at this point? >> i don't think it's clear, but first most important thing is to
get some stability in oil. the market seems to like oil around $30. if it drops way below that, there's panic. >> traders call it a pivot. >> if it goes above that significantly, it seems to cool back down. saudi oil minister said forget the idea of any production cut. some held out the idea if there was a ceiling on production maybe they'd be talking about potentially production cuts or minimal to that. he threw cold water on that. the important thing is oil needs to stabilize here or the markets don't stabilize. you saw what happened to financials. even regional banks were notably weak as oil moved to the down side. in addition to companies with secondaries, cabot oil had a secondary, which was widely subscribed to. there was a glut of interest. it didn't stop the stocks from dropping. 10% to cabot. they added 10%. i think the oil is the key figure here around $30. keeping it there, at least they have some certainty on where the
earnings might be and what kind of production levels we might be able to have. >> bob, everybody. the market down 188 points right now. stay tuned for all those earnings. closing the bell today at the big board, guests of american athens trust. at the nasdaq. stay tuned for hour two of "closing bell." see you tomorrow, kel. thank you, bill. welcome to "the closing bell" everybody, i'm kelly evans. finishing up a tough session on wall street. today is basically the mirror image of what we saw yesterday. if you remember, we were sitting here with major averages all up 1.3%. oil is higher. the total opposite of that happened. oil moved lower. major averages down 1.1. in the nasdaq's case 1.1. the dow giving up 188 points. if you were looking to move beyond that correlation, today
was not your day. joining today's panel, and to rate on more earnings, we have mike san tolly in the house along with kayla taushi. guy adami. welcome back, guy. michael, let me begin here. this is not the message you want, up day, down day, whatever you want to call it. ready to move beyond the correlation that indicate people are worried still about some sort of credit crunch or global recession. >> well, still stuck. still stuck in the same pattern. the rally was mechanical, it went up to a certain level that everybody was watching and then it just sat there. the question was, can we break above this range because we were right at the top of this range after a huge eight day run. the answer was, no, because oil also stretched its rally yesterday and gave some of that back today. i think you can't necessarily extrapolate from today and say that's it, we're right back down to the lows. up 8% and down 1.2%, it's not that bad of a pattern if it's
what holds. i do think it's definitely a little bit disappointing that we are not able to liberate ourselves from this pattern. >> kayla, yesterday stephanie said watch j.p. investors. it's positive along the lines of what we heard from -- interpreted from jamie dimon's w buying stocks. some of the headlines a little bit troublesome especially with what they said about first quarter activities and the shares of jpmorgan closing down more than 4%. >> dimon said he'd buy more at this price if he could. when your bank is trading at that level the book value. what executive wouldn't say their stock is undervalued. that was ringing the same tone. the take away from jpmorgan is the fact that, yes, oil is bad. yes, it's going to cost them more than they expected. in the meantime, there's nowhere else to get revenue from in the next two quarters. interests will stay low. investment banking, no one is doing that. asset management was also a surprisingly less confident tone
than we normally heard from a company that had 26 quarters or so of in flows. >> we heard that out of europe that some of the investment businesses were troubled. this is jpmorgan we're talking about. not some of the others, even the rivals that have been building this out. you can understand if they were in for a hurdle. >> standard charter had earnings which was really, really troublesome continuing to beat that drum, that weakness in europe is not over. we have a comment from jamie dimon. he was asked about oil. he was asked about davos and some of the concerns that the world leaders are bringing to that stage. he did have a very funny comment where he said davos is where billionaires tell millionaires how the middle class feels. how everyone laughs about that, he did talk about china, the emerging markets, but he talked specifically about commodities and how you should not discount the risk of oil but discount the market. the market is usually wrong. here's how he explained that. >> commodity prices have moved like this and oil, this is maybe
among the worst. they've moved like this five times in my lifetime, five times. by the way, so has cotton, corn, sugar, chickens, oil, iron, interest rates, credit spreads, prices move and they move violently and they always move for something you probably didn't know about. >> so, in other words, don't have a knee-jerk reaction. build for the long term and, yes, prepare for near-term swings but don't follow the market because the market is usually wrong. >> well, it's funny as well, guy adowmi, if his point about davos is people getting together to figure out how the middle class is doing, they're doing it wrong. >> maybe they should come to my hometown. i think, listen, jamie dimon, i don't think anybody denies he's a great leader. he speaks in ways that everybody understands. the way he talked about when he got divine inspiration to buy his stocks that morning because he wasn't doing anything. he's refreshing in this environment, but even with his refreshing comments, you can't
take away from the fact that there's some serious head winds. they took massive reserves for commodities and they actually spoke about the potential if brittain were to leave the eu, the massive uncertainty that would create this june 23rd, i think. so he is -- he in some way, shape, form spoke about some of the head winds that we've been speaking about on your show for the last nine months or so. i'm he not saying everything is apocalyptic here, but there's no denying that the banks have now not traded well for a considerable amount of time. their environment continues to get moore difficult so the yield curve continues to flatten. the way they can make money continues to go away. >> yes. >> you have comments of kas kashi kari talking about breaking up the banks. there are a lot of head winds and it's a tough environment to work in. >> it's a lot of chinese deals. it's a lot of chinese
investments banks doing those deals. maybe bank of america has cracked a couple of these, but otherwise there is no way that they can kind of penetrate one area of the market at least where there's some activity. >> very difficult. if you want exposure in the u.s. banks, pete najarian is watching, i just was hanging with him in the greenroom, hi, pete, we talk about one of the greatest banks in the u.s. is u.s. bank corp as well as wells fargo and look at it in comparison to a bank of america, to a citi, even to a goldman sachs or a jpmorgan, you will see they don't have the up side but they don't have the wild swings to the down side. so if you're looking for relative certainty in the banking sector, i think you'll find it in usc. >> it was under a pressure a little bit, mike. >> when treasuries are rallying. this is another piece that shows you that all rallies have a high burden of proof. if all we got out of the deeply over sold market condition was this level of rally and the
treasury yield which looks like they had a complete buying climax at 1.5% only gets you up to 1.75, that kind of treadmill that you're on is not great for the banks, not great for risky assets either if that's what we're in. >> scott miner of guggenheim put out this note. technical analysis told us oil was going to 25 when it was at 60. it tells us the 10 year yield is going to 1% and especially to hear that yesterday when the world was in clear skies mode seems jarring. the point you're making kind of indicates maybe there is more weakness than seems apparent. >> the trade is obviously very, very strong. it remains in place unless it does in a sustained way turn. >> we have some breaking news to get to here out of honeywell. let's see what david faber has to say. hi, david. >> we did get a press release from honeywell, 10, 15 minutes
ago. responding to our story from yesterday and the interview that greg hayes, united technology's ceo did on "squawk on the street." honeywell says it has engaged in discussions with united technologies regarding a possible business combination. they say the value from such a combination would be significant saying they could see as much as $3.5 billion in annual riselized cost synergies. that is something we reported this morning as something they indicated in their conversations with united technology. perhaps even more importantly in rebutting what has been the main defense of united technologies and certainly was the central part of our conversation with mr. hayes this morning, honeywell said we do not see the regulatory process as a material obstacle to a transaction. in facts, they believe a combination would benefit their customers and they say enhance their ability to offer more
comprehensive and compelling suite of technologies to serve their needs. that is a key point of contention between the two companies. there does not appear to be any possibility at this point that they're going to be re-entering negotiating phase, but what is most interesting about this press release is it does not indicate that honey well is at least willing at this point to completely back off from its hopes that perhaps there will be a transaction in its future. it does say we would not and will not pursue a transaction that is not in the best interests of our share owners consistent with our successful and disciplined capital deployment framework. listen, we're not going to do anything stupid here but they're not simply saying we're ready to fall on our sword despite again what were very clear comments from mr. hayes this morning saying we do not believe this deal could in any way receive approval from the antitrust authorities and, therefore, we are no longer engaged in any discussions about a potential transaction. back to you, kelly. >> so, david, it's interesting. i mean, do you think this now
puts utx in a position where they have to come up with a new yeen this deal shouldn't happen or are they still going to stand on this stool given that this was commissioned by honeywell? >> i think at this point we've heard from both companies and it will be interesting to see whether honeywell chooses to continue to advance their thesis about the benefits that would accrue to the combined company from the deal. i don't believe we'll hear very much more from united technologies, no, i don't think this puts the onus on them to respond. the hope is when you start to get communication from both companies, in particular from the company on the offensive, which is honey well at this point, is whether they are able to open up a communications line with united technology and somehow convince them that this is for real, that there is a real road to getting this done in terms of anti-trust and get them, of course, to engage with united technology.
that takes a while to play out but it does appear at least we're in that phase. this is not something that's just been dealt with and put away. >> david, thank you so much. our david faber there with the latest on the honey well/utx. we have an earnings report to get to. >> kelly, dream works beating on the top and bot toll line sending the shares skyrocketing. up 11% in after hours training. they reported an adjusted earnings of 55 cents and 16 cents per share revenue beating expectations of $274 million for the quarter. this quarter of positive earnings is a swing from a loss in a year ago quarter. back over to you. >> thank you. >> guy, your thoughts here? >> very volatile stock. if you have a longer term stock, you'll see what i'm saying. for the last six months it's vacillated in a 4 or $5 range.
the stock shouldn't be as volatile as it is. it should reek of a short covering rally. i have to paw through these numbers. my sense is if it fails to get through 25, then you've got to sell it again. >> mike, anything you'd add there? >> no. just when they miss it always trades on its asset value. pure content creator. now it looks like the franchises have some legs as guy said. just a little bit of a rezblef let's pivot and get to first solar. quarterly results are out. seema mody has that. hi, seema. >> reporter: interesting report, indeed, kelly. 1.50 on the bottom line versus the estimate of 75 cents. revenue topping expectations at $942 million, but i just want to point out as pointed out in the press release, they did see a decrease in net sales from the prior quarter, primarily due to lower revenue from the desert state line project. so that's something to keep in mind. first solar also cutting its
full year revenue guidance. as you point out, they're having broader questions around the health of the solar industry one thing to watch in the conference call, kelly, will be the extension of the solar investment tax credits. that's been seen as a big positive for the solar energy industry. we'll have to see how that impacts the long-term guidance. the company did cut the full year revenue guidance. you're seeing the stock down today in regular trade but it is halted right now. we are waiting for it to re-open at 4:35 p.m. eastern. kelly? >> seema, thank you. in about 20 minutes we will check back in on that name again. guy, how important is this one? there's so many different things percolating. coal sitting absolutely crushed even though it seemed crushed. natural gas prices, so low, they're trying to figure out how to navigate that. where does that leave solar?
>> they were trading in lock step up until the last month. every ceo says there's absolutely no correlation between crude oil and the solar space which i absolutely believe, but there's no denying that until recently there's absolutely been a correlation in the way that stocks trade along with the commodities. they seem to have decoupled. there are winners and lodsers in the space. first solar had a great move. my favorite is sun power. tom warner's been on the show. it's down 3% trading 20 pucks. their business model compared to some other guys and gals in the space is the most compelling. >> have you done the panel thing, guy, yourself by the way? >> no. i'm not hand bey enough. if i were to go up and start banging pams in, you would cry, you'd have my little picture up and say in remembrance. it would not be pleasant. the answer is no. >> we would hope that would not
be the case. >> yes. >> we'll see if that happens. thanks so much. >> as always. >> be sure to stick around for guy adami and the rest of the crew coming up. find out what is in the market that should make every investor worry. kneel kashakari. nick bouvrette will tell you why that's dangerous. we'll tell you which candidate billionaire donors will be backing now that jeb bush is out of the race. you're watching cnbc, first in business worldwide. because when you're setting a new benchmark for refinement, it is the small stuff... that makes the biggest impression. the 2016 c-class. lease the c300 for $399 a month at your local mercedes-benz dealer.
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welcome back. seema modi has the numbers. >> hey, kelly. a wider than expected loss for sc. it specializes in buying and selling hand crafted goods. revenue surpassing expectations at $88 million versus the analyst's estimate of $86 million. other metrics that analysts watch when looking at sc is growth merchandise sales which came in at $2.4 billion. it did see 1.6 million active sellers and more than 24 million active buyers. it also continued a trend of
mobile visits once again growing faster than desktop visits. but i just want to highlight price action in shares of sc on these metrics. want to point out the stock is one of the worst performing ipos in fact in 2015. etsy down 15% from going public in april. this is one of those stocks, kelly, that had a very strong listing gaining about 88% when it went public. >> yeah, now giving back so much of that. seema, thank you. it is interesting, mike, the last three-quarters that they reported they've missed by -- the shares have responded negatively by 24. >> yes. >> 18%, 13%, this is quite different. >> and i think what you're seeing here is because people probably loaded up for one of those double digit declines because it's been a serial disappointer, you're getting relief, short covering, some combination of both. the company hasn't been able to prove that it can deliver a couple of quarters in a row
gives you three years' guidance on various metrics. it's a little bit of a high bar to assess for yourself that you know how the world looks that far out. >> etsy shares are up 9% on that report. financials one of the worst performing sectors. take a look at the shares of the big banks all with pretty big losses. jpmorgan down more than 4%. citi, morgan stanley, goldman giving up 2.5%. neil proposed to policy makers to propose breaking up the big banks to prevent future failures. they say the crackdown by kashkari is dangerous. he joins us on closing bell. welcome to you, sir. so i know you've been a vociferous defendant of the big banks, but frankly, you know, their case seems to be growing thinner and thinner these days. everywhere you turn from the campaign trail to the head of the minneapolis fed somebody is calling for their breakup.
>> nobody loves them. i think that if you go through kashkari's proposal, he's looking for value added stocks. number two, he's talking about 25% capital to asset ratios. now people don't seem to understand this, but banks do create money. if you're going to shrink the banking system and you're going to shrink the big banks, you're going to shrink the money supply. that's going to have a negative impact in that factor. number three, he wants to treat the banks as utilities, which means that the risk taking that banks should be doing will be pretty much eliminated. i think that would have a negative impact on the economy. number four, we are breaking up the banks in the united states. i don't know if anybody has looked but citigroup used to be the biggest bank in the united states. it's now the fourth biggest. it's gotten rid of a trillion
dollar assets and it's selling below book which means nobody won breaking up citigroup. >> yeah, again, perhaps this is something that, you know, neel kashkari had just run for office. it's something you hear from the bernie sanders and the others about the evils of these banks. has it become so engrained that it's obvious that something further needs to happen? >> well, i think it's pretty obvious that we've nationalized the banks in the united states. we haven't sold the stock to the government but in every other aspect the government runs every part of the banking industry in this country. it's gone well beyond simply nationalizing them. because the banks are perceived to be owned by the government, the government passes bills like the transportation ajt which dips into the profits of the bank and gives it to other parts of the economy. it dips into the properties of
fannie and freddie and gives it to other parts of the economy. it's simply assumed. i don't care whether you're bernie sanders or whether you're, you know, richard shelby running for re-election in alabama, it assumes anything you say which is negative to the big banks is positive to the united states. well, it isn't positive that citigroup has gotten out of 30 countries around the world including, you know, being the third largest bank in germany and one of the largest banks in japan. it isn't positive that each one of the united states banks are pulling back in toerms of providing capital availability around the world and in the united states. >> yeah. >> it's not positive that jpmorgan is out there closing accounts with -- unilaterally closing accounts. >> right. >> pulling out of international relations. >> kayla? >> dick, this is kayla taushi. one of the issues is the banks and industry groups have a hard
time describing why a big bank is so much better for the u.s. economy than a smaller regional community bank. jamie dimon to his credit tried his darndest. he was asked how to explain to someone's mother-in-law what a big bank does and he tries to liken it to a 767. having a big bank is like having a turbine engine. having a small bank is like having a lithium battery. is that the best analogy we have at this point? >> no, it's silly. if you take a look at small banks in the united states, we've lost one virtually every day for something like 28 years. in other words, 9,000 of them are gone. you know, they didn't go away because someone, you know, took them over on a hostile takeover, they went away because their business model doesn't work. if i were to ask you, kayla, to give me the name of the three biggest public mortgage bankers in the united states, you couldn't do it because they
don't exist. you couldn't do it if i asked you for the same question about credit cards. you can come up with two of them. if i asked you for the biggest commercial company, commercial finance company, you can't give me one there either. c.i.t. is now a bank. we don't have household finance or beneficial finance or the money store, so you have to ask yourself, why? why do all of these modern line financial companies go away? why do small banks disappear at the rate of one a day? it's because they have business models which don't work. the fact is they do not have access and they do not have access to funding in periods of stress. >> yes. >> big banks have access to funding in all periods and because they have access to the funding they're the safest in the system. we challenge you to come up with a better analogy. that's a good point. what's the best way to explain it, illustrate it. i know you can do it, dick. thank you for joining us.
>> thank you. dick bove there on the banks. we have an earnings word on avis. seema modi, how did they do? >> ticker symbol car. earnings beat by a penny at 18 cents adjusted. revenue slightly missing expectations at $1.9 billion. here's the thing, while their 2013 revenue came in line with expectations, earnings outlook is weak well below consensus. that may be due in part to currency head winds. you're looking at the stock falling right now after hours by around 11.5%. kelly? >> thank you, seema. it's interesting, i want to briefly mention this, we're talking about a lot of companies with high debt load. they have a lot more at steak other than how are they going to survive. this was a financial engineering story, the merger. it's been cut in half this last year. there's general concerns about the rental car cycle. not that great of a business.
residual vehicle expenses. they're not benefitting from the fact that domestic travel seems okay. >> something else to keep in mind. if you don't have credit markets starting to calm down, it will be a problem as well for some of these names. >> yeah. we talk about dhaps have been amazoned enough to become an increasing head wind. we have to talk about companies that are getting ubered. donald trump looking to extend his lead tonight during the nevada caucuses. up next we'll look at how the silver state could impact the rest of the field and where all of that big donor money is floig now that jeb bush is out of the race. find out which car maker had big wins and how that could impact their stocks coming up on closing bell.
welcome back. the official motto for nevada is all for our country. john harwood joins us with how that race is shaping up. >> kelly, the top three republican contenders are all counting down to the nevada caulk y caucuses tonight. he goes in with a 2-1 lead over ted cruz and marco rubio in third. we should caution that polling in caucus states is difficult. you don't know who will show up.
all of them got fresh rhetorical material from president obama. he said he would close guantanamo. they responded. >> plet me say this, mr. president, don't shut down gitmo, expand it and let's have some new terrorists there. >> when i'm president if we capture a terrorist alive, they're not getting a court hearing in nevada, they're going to guantanamo and we're going to find out everything they know. >> we're spending 40 million. i would guarantee you that i could do it for a tiny, tiny -- i don't mean like 39, i mean like maybe 5, maybe 3, maybe like peanuts. >> yeah. >> maybe in our deal with cuba we get them to take it over and take -- and reimburse us. >> now marco rubio got some good news as the contest moves beyond nevada to the big 11-state contest on super tuesday. he picked up through his campaign one of the top
political lieutenants through the koch brothers. that's a sign of the republican standing trying to rally around marco rubio hoping to stop marco rubio and donald trump. >> we have the koch brothers moving into the rubio camp. where are the jeb bush supporters? >> some have signed on to marco rubio. they are exhausted, they are waiting to consider their options. it's difficult for some of them to pick because john kasich, a governor, mainstream republican is out there. they're not ready to pick between marco rubio and john kasich. that feels diffuse. you can expect over time as you've seen from the endorsements, bob dole coming out backing marco rubio. you'll see the jeb bush supporters getting behind marco rubio. >> john, mike san tolly here. are we wrong in assuming that all of these donors are going to decide to put their money behind another candidate here?
could it just be the case that if trump looks like he's the odds on favorite, he doesn't want your money or need it, that they're going to sit this one out? >> some of them will. we should point out, mike, it's not necessarily that important where some of these donors go. money has not driven the outcome here. in fact, the rally that we played the bite from from donald trump, he made the point that he spent less than anybody else and he's still leading. money has not determined the outcome of this contest. if it did, jeb bush wouldn't be out of the race. >> it's interesting, too, john, i wonder how much. even if everybody lined up from all sides, the koch brothers, everybody got behind rubio if that would help or hurt him in some ways? >> exactly. remember, what does money do? money gets you television advertise am. television advertisements have declining importance in politics. we've seen that very dramatically in this race. it's part of the reason why so many voters who are supporting donald trump are rejecting politics as usual.
they hear those messages and they've become numb to them. they don't believe them anymore. >> exactly. then the liability becomes, hey, the establishment, everybody is backing rubio. >> bingo. >> kelly, donald trump made that point in his speech today. he said, all of these other candidates, cruz and rubio, are bought and paid for by special interests, singled out woody johnson, the owner of the new york jets, a bush supporter, pharmaceutical company executive. he said, no, we're going to go after the pharmaceutical conditions, make them fight for those. he's singling them out ag he's going after them. >> fascinating. we'll see what happens as the results come in. john harwood out of washington. angie's list posting its first annual profit. getting hit after the consumer website hits wall street estimates. down 13%. the company's ceo will break down the prices for us and tell us if the tiers pricing hurts them. shakespeare asks what's in a
welcome back. declines across the board 1%. the nasdaq down 1.5% today. pressure on crude oil. the correlation was high once again. crude oil was in the red and so were these markets. after the bell it's been a mixed picture and actually some more green on your screen for these earnings that we've received. strong ger earnings for first solar. dream works up 11% too. surging on better than expected results. avis is lower by almost 11% after it admits it missed estimates. crude oil, seema modi, what do you have? >> kelly, a big rise in inventory according to the api. crude surging twice as much as expected. crude inventories rose by 7.1 million barrels. as a result we're seeing crude extend its losses after hours as you can see now down better than
6%. kelly. >> that's going to hurt, seema. thank you, mike. someone better tell opec to -- >> coming on a day when opec tried to tamp down the expectations of supply discipline, obviously no relief there. >> opec pointing the finger at the u.s. saying you are the swing producer. he said that the other day. >> exactly. >> he also said they're not going to put u.s. shale operators out of business. that was the key point from today. >> they'd like them to do it voluntarily. >> brutal. we'll keep an eye on oil for you. again, something to keep in mind as we head into tomorrow's session. consumer review site angie's list dropping 13%. the company now worth under $500 million in market cap with that drop. it did, however, have its first profitable year in the company's history. joining us on a cnbc exclusive, angie's list ceo scott dershlag. good to see you. the first quarter with you as ceo for you guys reporting? >> that's right. >> you were able to say, hey,
look, we finally had our first profitable year. how will you be able not just to build on that profitability if you can but on revenue growth which investors are desperately looking for? >> yeah. i mean, there's no question that that is an imperative. despite increasing our ebita seven fold and having a positive swing on earnings, the key is definitely revenue growth. that's going to get to pricing and our offer that we make to consumers as well as how we interact with service providers and that will be key parts of the turn around plan i'll be sharing with investors next week on march 3rd. >> you mentioned pricing. you guys have a tiered model, right? there's different price points people can sign up with. is that helping? >> no, frankly. i mean, they went to tiered pricing i think first quarter of 2014 and, you know, i'm not satisfied with what we're seeing in terms of pricing realization. a lot of it really gets to what
value you offer at each of those price points and we'll be sharing some new approaches on that next week. >> would there be any way to get away from a subscription model altogether? >> well, you know, i think that a lot of it is about how you monetize free users and then up sell them into -- into being paid users, but you have to be offering them things that they really care about in terms of taking care of their most precious assets, their home. we have some exciting ideas to share on to how to do that. >> can you give us a sense? i signed up for one of the deals a couple of years ago and get, you know, all of these e-mails all the time and things asking me about this and that. just as somebody who's a user as somebody watching it from an investor's point of view, i'd be interested to see what you think those new opportunities might look like? >> i think it gets to how do you make it easier, simpler, even more just fun to manage all of the services kind of around your home. wouldn't it be great that if you
knew you had an emergency, that you would for sure be able to get a response from a service provider within two hours. wouldn't it be great if you could be prioritized in terms of scheduling so that the service provider was able to be there when you were there. why is it you can get more information on a used car that you were going to buy than you can about the services that have been on an expensive home you're looking to buy? those things can all be done and made part of a membership offering which also lets us personalize the experience for our users. >> those are excellent points. it almost sounds like a 911 for home emergencies or something like a true car for, you know, different things that are going on in your home. in any case, listen, scott, i know you can't give us a lot more detail on it at the moment. we certainly will be listening in. can you achieve your plans with the company at its current size or are you looking at maybe curting, you no he, some of the expenses? is there any sign that layoffs or anything like that would be on the horizon? >> no. i think a lot of what we're
going to be doing is driving returns for investments that have already been made. like we launched a fair price guarantee and a service quality guarantee to take advantage of costs we were already incurring in our call centers. we've gotten a lift as a result with people who value those things. looking for those opportunities. taking costs and inefficiencies out where they're not going to adversely impact the user experience. these will all be part of the profitable growth plan i can't wait to share with investors next week. >> we look forward to it as well, next week, scott. thank you. >> thank you. now the "consumer reports" top auto picks for 2016 are out and there's a surprise winner. we will reveal the only non-luxury brand to crack the top three later. protests planned at apple stores around the world and at the fbi's headquarters after it wanted to compel apple to hack into the iphone from one of the san bernardino shooters. you're watching cnbc, first in business worldwide.
welcome back. there are rallies coordinated for 5:30 p.m. at apple stores across the globe and at fbi headquarters in washington to protest the fbi's request that the tech giant help hack into the phone of one of the san bernardino shooters. eamon jabbers has more on that. >> it is freezing here. we'll see what the attendance looks like.
it looks cold there now. this debate has been anything but cold. starting in the morning when we had michael hayden on "squawk box" on cnbc, the former head of the nsa and cia. he says he's taking the side of apple in this debate on all of the big issues. here's what he had to say this morning. >> the world is changing and what we're -- look, nsa has always had an offensive and a defensive mission. we've always been challenged with balancing. my argument is the american political process needs to make a smart decision and the smart decision is not compelling these companies to have universal back doors. >> and then there was bill gates, the richest man in the world, who was on tv today, a series of interviews out there in which he surprised a lot of people by not necessarily taking the same side as apple in this debate. what gabe said you tultimately,
the right safeguards in place, the government doesn't have to be totally blind in these investigations. here's what he had to say. >> well, the courts are going to rule and it will be good to have that -- that precedent. i do think people want the government to act on their behalf, that they feel like the safeguards are there. >> and that wasn't good enough for edward snowden, the nsa leaker who's in russia. he still has access to twitter though and he tweeted out today very sarcastically, he said breaking, rich man favors central authority in response to the bill gates comments. a raging debate. a lot of figures involved. no clear answers. we're waiting now until the end of the week when apple is expected to file a response in court to what the fbi and the department of justice had asked them to do. >> it's interesting, eamon. i'm wondering what thoughts you might have, mike? >> everyone seems to come down on the side of it unless you're adamantly for or against one side, hopefully this promotes some kind of protocol, some policy, some discussion about how we're going to treat these
things down the road. it's not clear to me. maybe we have to wait for the courts to point this out. it seems to me that the stakes in this case might not be that high, right? >> i was fascinated by the fact that gates decided to take a tact that was different than any other leader so far. if eamon is still here, when is the last time we saw an issue like this that didn't cut across party lines, didn't cut across industry lines, where there was no clear division of who was on which side and for ideological divisions? >> that's the sign. so many were entrenched in the party lines that we can pretty much predict how everyone is going to come down. michael hayden backed bill gates and we had a pew poll in which republicans and democrats seemed to be relatively evenly split on this thing. although 51% of americans overall favor the u.s. government's position here. this one does not slice and dice
in all of the traditional sort of political ways you're thinking about. >> pew survey, 51% say apple -- i'm sorry, apple should unlock the iphone. 38% say they shouldn't. the rest you bet. >> we'll see who braves the weather and thank you for doing so. our eamon javers out of washington. audi clinching the number one spot out of "consumer reports." audi tops the auto picks list. which models made the cut and who was left in the defendant? and tomorrow neal shear, ceo of cheniere energy at 1:45 p.m. eastern time. don't miss it.
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when you look at the bottom three check who is out in the middle, jeep coming in along with fiat and mitsubishi as the three lowest-rated brands by "consumer reports." one key factor in these ratings, how do these vehicles stack up when it comes to safety, specifically do they have collision avoidance systems? that is a key feature that "consumer reports" now recommends and is looking for. those models that have it, those brands that push it, those are going to be rated higher than those that do not have it. quickly take a look at shares of fiat chrysler. we reached out to them for a comment regarding the ranking of jeep being among the bottom three, according to "consumer reports." they say it respects the opinion of "consumer reports" but its own internal reviews shows that it is making progress in terms of cranking out more reliable products. whether or not they are considered reliable by "consumer reports," kelly, doesn't seem to matter in the showroom. sales of jeep have not slowed down at all. this is the hottest brand and has been the hottest brand for
the last three years, despite the fact that it has been at least three years since "consumer reports" has recommended any jeep model. >> wow. although i had a great experience with one in a snowy montana situation. it was kind of dicy, but i was going to ask, phil, about tesla. is this the same rankings that it tesla at or near the top recently or no? >> reporter: it's similar. tesla is not a part of this review because it does not have a broad stream. it's got the model "s" and the model "x" has come out but "consumer reports" has not reviewed it. therefore, they considered it insufficient information, lack of data so to speak. therefore, it did not have a ranking for the brand tesla. the model "s" in the past has been deemed the best vehicle that "consumer reports" has ever tested. >> right. >> but it's not included in this report. >> that was an eyebrow raiser. mike, what do you think about these results? >> it's interesting. as phil kind of touches on, sort of the difference between the critical darlings among movies and the most popular ones,
right, not necessarily a 1-1 and you do have familiar names, subaru, known for if money wasn't real your own consideration the quality brands you might go for. >> was it a consideration at all perhaps? >> results subaru. >> i just think subaru is maybe the slightly surprising top two finisher, yes. >> phil, thank you so much. >> you bet. >> our phil lebeau giving us the results, bacon double cheeseburger, bruce wayne and happy birthday, some of the legal name changes made in the uk last year. what other bizarre monikers made the list next? people talk about "deals"
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apple versus the fbi. they say no to a ruling, encryption codes and national security at the core of the debates. get both sides. "squawk alley tomorrow morning on cnbc. according to "the times" of london 85,000 people in the uk changed their name last year, but among the new names the times reported included bacon double cheeseburger, bruce wayne, penelope pitstop and happy birthday. there's also mr. and mrs mrs. amazing, queens park rangers, sarge metal fatigue, kayla, which i'm picking for you, michael conor lightning, pussyfoot and cats and jammer. >> made it too easy, mike.
>> made it too easy to change your name. >> not screen names. if you gave up mike, what would you change? >> i'd change and stay incognito. >> kayla. >> >> anything is better than tausche, frankly. >> it is a little tricky, sort of the audi auto things. >> that does it for "closing bell." "fast money" begins now. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square i'm melissa tonight not sure where to put your money, host trade of the year and a top technician says it's about to get even hotter. we'll tell what you it is and we'll look at the live shot of d.c. and new york where protesters are expected to gather shortly in support of apple's battle against the fbi. we're on the ground with a special report and later can you guess what company is the best performing fast carpal stock i