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tv   Closing Bell  CNBC  October 26, 2018 3:00pm-5:00pm EDT

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this point he says it was using dna e6d which was evident on some of the packages he says there may be more packages out there >> all right thanks >> thank you tim thank you. see you tonight. >> and closing bell starts right now. >> hello thanks for joining us on closing bell let's get to where we stand on this final trading hour of the week the dow rebounding from the
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lows >> here is a look at how the dow closed each day of this week a rough week with a little bit of a bounce. there you see it more than triple digit declines monday, tuesday and wednesday was the bad day down 608 more than 4% declines for major averages >> yes s&p and nasdaq over 4% for the week the dow today over 400 points. it was one day out of five tech stocks have been in the eye of the store getting crushed we'll have full team coverage and looking at whether it was over it is amazon stock drop and we have a look at what's working in a positive sense in the tech
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space. let's start with you >> yeah. i mean if the tech trade may or may not be over. you probably can't make that decision right now look at the s&p. it is relative you're seeing that being given back but not completely. at the widest it was about a 25 24 percentage point. it is narrow but has more to give back. i think we are in the of portfolio as opposed to people preciseliest mating next quarter's amazon numbers or any others it is very difficult to say where we find some footing right here we obviously have a wounded market whose leadership has
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given up a lot of this >> has anything fundamentally changed as a result of some of these earnings misses? >> i don't think that it's changed in any wholesale ways. i do think the perception of how bullet proof these were got to such heights especially over the summer that i think you a kind of reckoning that some times they miss on revenues and some times it takes a stutter step. it started getting a lot of credit for fundamentals that maybe it couldn't redeem in the short term >> thanks very much. we'll see you next hour. nasdaq on track for the worst month since the financial crisis have a look at what's leading the indeks lower and all month
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it has been that much more violent fall for the rest of the tech sectors along with the nasdaq we started seeing the xlk that's the overall new index of the communications names that has the facebooks and the amazons or twitters in it. those are all now in correction territory. a real swift fall down 10% from the highs now. a lot are looking for some kind of washout we are not going to get that leadership net flikts are down about 30% for highs. amazon is flirting with bare market territory google is down 15% from the
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highs. their gains are not enough to counter that even xilinx can't sustain that movement am not down that much and not in correction territory it turned positive for just a moment around 1:00 it seems to be trying to work back up there. almost positive for the week it will be the thing to watch. if we can get apple to turn around this sentiment it could help putin a bit of a bottom i the tech market. >> it will certainly be
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important. dee has more for us. >> the stock is lower by more than 8%. losses have been accelerating. it is on base for the worst since 2014 as she just said year to date shares are still up more than 40%. so there was a very high bar going into this quarters earnings investors, they are focusing on amazon's rescue. they weren't impressed at the company's projected mid-ramid mid-range it represents 15% growth revenue has been bothing growth of nearly half that over the last two years amazon's international segment was another concern.
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they have overshadowing other shots. a 31% margin amazon had the third straight quarter of subscription. prime added 3.7 billion to the top line guys, the question now the does this quarter's disappointing sales outlook change the trajectory of amazon and looking over all of the reports today most don't think so. >> i read a lot of those reports. one thing i'm trying to figure out, was this just a nitpicky reaction or is there actual growth deceleration? >> i think there is actual deceleration so perhaps a higher profit but
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slower revenue growing company the forward pe is much higher than that of some of the other things so does it justify the huge gains that it has seen over the last few years something fundamental is shifting the earnings, the profit came in at 2.8 9 billi$2.9 billion some tech names have held up well frank holland has a look at the actual winners here, frank >> thank you we talked about this terrible month for tech there have been a few bright spots. two spots are actually positive ton month.
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xerox posted a strong beat on the bottom line, apple it has had quite a volatile session. it dipped into positive territory. it is off by more than a percent. for the month down about 4%. even with backlash of a report climbing that malicious chinese chips infiltrated data center. off by only about 5% this month. it was bolstered adding more than 9 million accounts last quarter. they also reported strong venmo which saw growth by 78%. much better than analysts had expected back to you. >> okay. great stuff. thank you very much. thank you to all of our reporters there as well setting things up for us let's discuss the tech trade
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further. we have guests joining us now. amazon is joining us here with david is it fears over earnings report last night? >> you to look at research that came out and said use of social media plateaued over the past two years. what are they going to do to drive engagement the other element i would factor in here is we are still in a where street expectations are too high they are being too high in an environment. we will continue to see the fed raise rates. >> who are you talk about here
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amazon and google don't fit into the social media aspect. >> if you want today look at google they will be subject to regulatory scrutiny. they already are we have had management give a mitsz by not showing up to testify before congress, something that's not necessarily very good when you're facing a regulatory threat and relative to amazon, we have seen it in terms of quarter to quarter. microsoft was actually showing stronger gains so amazon seeing greater challenges and higher interest rates against the high pe name that provides no total return. >> you disagree. you still like amazon and alphabet >> yes i think risk assets including equities will get hit a bit. i think best in class names do
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well i also think that the amazon and apple stories are a little bit less privacy vulnerable than others the best names are the ones to be if you do i think you would be very dangerous to go for less high flying names. they indicate lower quality. >> so david you actually do have some picks and technology that you like and i guess they are ones that pay dividends. >> they have management teams that have evidenced a strong commitment the lead is apple in terms of what they have done. it is for the company when they
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come out with results next thursday to provide greater returns going forward. if you look at microsoft management has done quite well there. last but not least intell being a beneficiary. >> and regardless of the makeup of the total return you can't criticize the 39% year to date whether it was dividends on the topic of amazon falling today a lot of people saying one of the bright spots was the advertising revenue and there's room for that to grow. is there a possible undertone in risk there that if they boost it it will start to cannibalize other areas whether it is subscriptions or amazon prime because people think it is an ad free service it is a huge untapped area >> yes so i think it's hugely creative.
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i think we'll see possibly the first time to see what you watch and look what you search for online and have immediate convert. the reason is because when you search something you have intend when you look it up i can be pretty sure that you're probably in the market for bruno or you have a perverse sense of personal entertainment zblechb more so if you're in the wall of garden you're a convert. you're going to buy it basically they have digitized the advertising of the brick and mortar companies and i think it's one of a few stories they are turning on yeah the evaluation is rich here too. this company factors to be a bigger part of the future than it is today. i like that kind of set up i think they can't help but sort of see the tail winds here it's great to have a tail wind behind you
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>> how much heavy lifting can this stock do when it comes to sentiment around the whole group? >> i think amazon can do the deal that along with amazon having evaluations over a trillion dollars, if apple does well you cow could see things move in his favor. in the case of amazon, advertising is driven by personal investigation so you would put it in a light around privacy concerns tesla giving up a big gain today on new headlines surrounding the department of justice. we have all of the details here. >> it involves a story posted earlier this afternoon essentially saying they looking into the production targets set by musk in 2017 for the model
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three. it would be impossible to meet the goals. we reached out to tesla. >> no subpoenas have been issued the company says tesla's fill os fi has been to set truthful targets not sandbagged targets that we would exceed it is giving back that the company's stock was seeing earlier in the session it was following comments last night by ellison he said it is the second believer in tesla. he was talking about the problems or the challenges
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companies run into setting projections listen up. >> he has the whole tesla team excited. we are trying to get that done >> we were going to for sure motivating the eam, setting tough goals. but it turns out it is hard to predict what quarter >> it is setting targets not in response to the dow jones which came out this afternoon. that's the reason tesla shares have pulled back a little bit. >> thank you very much for that. let's switch focus let's have a look at the biggest losers in the dow. we are currently down 355 points we are getting back closer to the lows of the day across all
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of the major indexes the market is coming up for you. we are down around about 2% now on the s&p the nasdaq is down2.7. points go stronger cnbc has more for us, steve. >> thank you >> it was stronger than expected report this morning for the third quarter. wall street saw an unusual number of negative inside the number writing consumer spending remains robust fixed investments was weak they
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wrote personal consumption boosted growth but the effects will likely be transitory. you can see on the right hand side the gdp number. sorry, there is the government number consumer at 4% business investment should be doing well it bounces back in the fourth quarter. take a look at the kind of -- purposing and pulling you on that a net contribution and inventory up some of it will balance out before the gdp number came out she said she expects growth to slow next year but remain above trend as a result. she said the fed still has work to do. >> financial conditions are still accommodative.
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i think the unemployment rate is at the lowest level and i think inflation is at our target that's a strong outlook. it suggests we need to be gradually thinking more about taking back some of the accommodation. >> economists say growth might have peaked with the question how slow does it go from here? three and a half is a great number right after the seconds quarter. it was the makeup that says we are not sure how we go forward with strong growth from here >> great to see a consumer spending number like that. what about business investment it was kind of under well ming how much is it to see so much of the growth made up by inventories. >> it will have to be worked off some how it is the counter part of the import side. it comes into the country and ends up somewhere either sold or
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on the shelves don't expect the big negative or positive from inventories. the investment can be volatile you had a big decline in structures it may not repeat itself depending what's going on out there. want to be careful we are not seeing early signs of the fiscal stimulus maybe wearing off in the next quarter or beyond that or the monetary policy beginning to take something of a bite out of it. >> if we think back a lot of question marks whether people were bringing forward various things and you would have to say that it is expectations despite that being a fear. >> i think that's right but there's still trade stuff inside that number.
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when you look at plus 9% on imports and minus 3.5 on exports we don't know what the story is. we just want you to be careful here you have growth slow down into that range 2.5 to 3%. i'm seeing those sorts of numbers for the next year. that's a big win underlying growth potential is 2% if you like if we will do a full point above that that is excellent for the stock market, economy and wages in america >> steve, thank you very much for going through the good, bad and ugly >> exactly >> let's talk about the market impact we have sarah and rick at the cme group. we have got more evidence on the economy. we have a lot more color out of
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corporate america. does it match up what the kind of ugly moves we are seeing? >> in some sense it does we are not late stages it can expect volatility we see a correction about once a year on average. we see a pull back of about 5% or more. it is about three to four times on average investors should be prepared going forward. it is accommodative for fundamentals in the corporate sectors to continue. >> welcome back. i want to ask about the gdp print. 3.5% gdp does it suggest to you that growth will come down or is it down to all of the factors we
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talked about it is about the general growth rate >> it has been almost impervious to any of the other sectors with respect to easing back interest rates a bit. today as we sit at 307 and 308 it will probably be the lowest yield close since the 2nd of october. if you recall we were like 306 the next day we are at 316 and 317, 318 those were the breakout days i think it is very important i think one of the dynamics above all of the other issues
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relative value, trade, there's a lot going on in the world. i think rates have been firm because the notion of the fed and its course has been firm firmly set can that be changed? can they look at the marketplace after the december meeting into 2019 and see something different? well, if they do your going to see that show up in the form of lower rates in response to some of the other market sectors. whether it is going to last or not i would say if i was trading today and we settled under 311 since it occurred on the 3rd of october i would consider it kig n -- significant. >> thank you what are you telling your clients as far as how deep this correction looks and how much further it has to go >> well, we are very focused on evaluations.
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if you look at this we have confidence in the earnings so we think it is starting to look attractive. if we tli you could see a seasonal rally into year end fundamentals haven't those aren't going to change on a dime and we feel that the bull market will continue even though we'll see selloffs along the way. >> and a lot of people have been but you're more focused on industrials, is that right >> i i like it as well, hire escalating rates and slower global growth. agree that the fend men thats are strong in both
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they have the internet and industrial there is still stimulus. we think of it as a time to buy, right? it is a time to seize the opportunity of the bumps >> do you agree specifically amid the tech wreck? >> we are focusing on quality growth across the board. as we get into next year investors need to pay attention. we are looking at areas such as health care and also beaten down areas like financials. these are companies with strong credit quality so really for us it's a mark here it's about finding growth at a reasonable price >> thank you very much we'll leave it there
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>> let's get more on this wild last hour of trading about a half an hour to go bob is in the middle of the we were down until about 11:00. we had a breathtaking 60 point rally in the s&p it is remarkable it has been drifting a little bit lower. a couple of things happened. the dollar about 11:00 sort of went down. it is still down add it stopped and rethe chie these they wanted
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posztive lamar was 39 at a general motors was weak at the open 11:00 big rally in that group as well all of the industrial, weak as well there you go moving to the upside overall what is going on here? there is buying interest as stuff is going down. a lot of people's attitude, sentiment isn't bad for a true bottom so earnings are still good we try to adjust they are saying that's not good enough for a real trade. we need a lot more fear overall that the trajectory is notably lower. most people don't feel that way right now. a lot of debate right here finally, watch the stock to
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watch. it has trapped the market remarkably well. it rose at 11 and peaked at the time the market peaked we'll watch as we go into the close. back to you. >> what level would be sufficient for you to think we have had that moment of real panic? >> we were there >> that's a rare number 28 is definitely getting up there and getting higher. >> okay. thank you very much. we'll see you later in the show. let's get a look at how value stocks have performed. >> this is a question traders have been asking for a while now. when will value be in. as this market turmoil continues that's the question among many out there today.
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it is names like foot locker, gap and michael kohrs. jeffreys also likes casey's it is because of the ek by sigs same thing with fellow timeshare provider value stocks under performance is one that's poised to flip
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thanks to rising interest rate environment as well as earnings season, guys >> it is tough to pick those stocks if everything is falling which is what we are seeing today. >> exactly >> it doesn't make much of an offset >> these are opportunities to buy because they see some praety near tomorrow earnings expectations in any market there's no guarantee. they do see these catalysts at least before the end of the year on a day like today it is nice to have a little bit of optimism >> okay. thank you for that time for a cnbc news update with sue herrera >> yes a busy news day today. here is what's happening the department of justice holding a press conference on the arrest where it said it used
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drngs na evidence and a fingerprint to catch him he will be charged with five federal crimes including the mailing of explosives which carries a maximum of 58 years in prison >> political violence or the threat of violence is to our vigorous system of self-government. it is a threat to that respect for law. >> authorities confirm a suspicious package sent to democratic california senator is connected to the 12 others the package was intercepted in sacramento a heavy police reference was on the scene this morning a suspect package was sent to a democrat known for thiz ads calling for the impeachment of president trump.
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so still a lot of moving parts i'll send it back down to you. >> okay. thanks i want to show you where we are as we head into the close. under half an hour to go thedown is down 350 points a pretty broad based selloff if you go all of the sectors are red right now. worst performing communications services including social media names but even the defenses like utilities this week are under pressure this is down 2.5%. it is down more than 4% for the week it is the fourth in a row. let's check on some of the individual movers.
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sit the latest between campbell's board of director it is all going into this shareholder meeting on november 29th they will 2350ig9 this and they have laid out everything transparentally. it's not a common tactic to the vote >> and he is around the sort of 10% mark >> exactly >>. >> my he raises guidance and markets division the stock is up 3%
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the key thing as we discussed is the set up it was down 3% year to date coming into earnings it is roughly flat year to date with today's move. it was differentfor the likes of google which are moving in the opposite direction today >> and the interim ceo, talk about tariffs, the impact said the third round would hit but intel has a global supply change i mentioned the s&p. take a look at our heat map. you can see where the pain spots are right now within this sell off. communications services down 3%. real estate down almost 2.6% materials and energy which have been hit pretty hard this week fairing the least worst of the
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groups if you're looking for a positive today it is because there was a couple of bouts to take it off of the low a day an hour into trade we rallied back >> the oil went up it helped as well. >> and again, we have just come off the lows in the last half an hour the dow transports feeling the pain currently 14.1 john nald hanks for joining us if what's the general theme? being dragd down by general markets? >> first things first. first thing is that it continues to be strong that 2e8s us this is oonl
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correction, not a change in direction. it is in every mode. it is still positive you start to get concerned about the economy. >> feels like it is more vulnerable to the trade war. is that true >> it is absolutely true what we have got is strong goods flow that's a positive for the group. almost all of these companies beating and raising. that's a positive. a little bit of a negative which are mostly capitol intensive companies. if it goes up it is a slight negative the real lingering issue is a trade war. trade war there are no winners in transportation so it is hanging over the group and evaluations of the different segments >> if you consider those sub sectors, those sub segments, which is your favorite
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>> we really like at this point the freight forwarding segment we like least the railroads. they have probably the most potentially effected those stocks were hang around there. all time highs only down 17% versus logistics and saying those that deliver e commerce which have taken it a big dive it is down 30 and 35% in those stocks >> how vulnerable are these companies that you follow to rising interest rates? that is where some of it here started. seems like a pretty capital intensive business how much borrowing is there? >> many of them have fairly well leveraged balance shift so it's
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like an, xo they are yen rating, rang list. their it is to pay down debt >> okay o. let's send it over to dee who is having a look at how payment stocks are fairing during this current sell juf >> they are fairing better than the current market turmoil talking mastercard thafr losses this month a little less severe. they are holding onto double digit year to date gains it has taken a heavy hit but shares have doubled so far this
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year it disappointed with the holiday outlook. they are driven by strengthening u.s. economy we are talking rising wages, lower taxes. people are still spending more on their credit and debit cards. it boost payments for companies that take a cut of each transaction. it may be that multils are a lot more attractive. analysts are calling this growth of at a reasonable price back to you. >> i guess the sort of rising ratd environment that has heard some bank stocks i think they
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are in a good position it is the switch to electronics payments you an amazon that is facing huge competition from other players there on the ground. so you know, these evaluations look better and positioned differently. you can still tap into the rising trend and certainly the different payment methods. all of these are partnering with each other >> interesting distinction within technology.
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we have a look at the bio tech movers >> it reflects larger names which is influenced by smaller and mid-sized companies getting hit a lot harder they were unnamed targets this week because of how medicare pays for some of their medicines. they both reported earnings e l earlier in the week. two stock to watch next week which both have depression drugs
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and next week both report earnings back to you. >> thanks very much for that let's send it back to look at the nasdaq to what's moving as we a proech the close. 17 minutes left until that close. >> we have focused a lot on large kept tech influencing here the russell 2000 set to be down for the sixth great week it is down about 15% from the highs at the end of august a lot of that is coming from some of those bio tech names also some of those regional banks that flew up and are getting crushed along with everything else. that's one of the things we have been watching and some of the concerns for these names which one would think would actually
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do better because they are for the most part more doe mesically inclined is the fact that if they are importers like small retailers they are likely going to face a higher price and higher cost as we look into 2019 we keep seeing this weakness some of that is coming from the bio tech sector. it has really been volatile. as that drags down and you get the under performance that's where we are seeing the nasdaq really starting to under perform here on a near term basis. if you bring up a chart you will note that the nasdaq is still positive unlike the s&p and the dow. that's how far things have come here that even with the big losses we have seen so far it is still in positive territory for the year >> yeah. the rest now firmly red.
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thank you. we have news to share with you right now on murdock we have more on the phone here >> disney has been in the process of divesting the sports when they closed or when they agreed to buy fox earlier this year i learned that an interesting thick may happen and that the new fox wheening this they might ebd up buying all of the sports net works back they are leading candidates with people familiar with the process. i can't remember ever having this before at least at this scale where a company would buy
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an asset and really buy it back, possibly before disney could do anything with the networks in the process he may save fox billions of dollars from tax efficiencies they buy it back at a lower price than they sold it to disney >> this is all still some what hype thet dal. there are two questions. one is that you might remember that comcast, our parent company at cnbc got into a bidding war
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with disney. so originally he agreed to buy these assets which included the sports net work and a bunch of others by about $50 billion it isn't going to get that same lift in evaluation because frankly the regional sports network are not a crown jewel asset. comcast didn't really want them. fox was willing to sell them you're not going to get that same bidding war around that fox could buy them back for a lower value than what they ended up selling them to disney because comcast inflated that
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price as part of the larger bidding war. thank you for joining us >> one of the great back and forths >> yes they have too much control over the sports network they are motivated >> one is whether murdoch thought it through >> at a cheaper price. >> i wouldn't put it past him. >> the deal maker. >> dell maker. let's bring in mike. we will talk about the broader markets. quick thoughts on this potential. >> it is kind of fascinating in terms of whether there was intent initially you were
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carving fox that disney was buying as a package. he could have retained the sports networks. >> if we are framing this as being a loser, one they probably think they were a winner on because it offset. it was all right in part of the package. >> i don't think in any respect it would kind of swing the deal from success to failure. it is not a big enough piece of it they have said constantly that disney was aware because if
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you're paying the overall multiple cash flow, you know, it was basically kind of thrown in at a high price. the only other ones that are higher is twitter, vie come and take two interactive >> it is a new entrance into that sector into the old media at this point. >> thanks to the broader markets. it is a nice little improvement. it is down 200 points. the low of the day is 540. so clearly still a day of selling. today there has been two or three moments we have come off of the lows. >> it hasn't been an urgent kind of -- one pretty good one t. problem is through this entire
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phase none of the rallies have been convincing. i do think -- i don't know what you want right now is a complete desperate flush out to kind of set the new level or if it is showing resilience going into the weekend. >> shares near all time lows of course we talked about the earnings last time we know they made another loss and with no earnings you always wonder whether there is a lot of growth coming through. it also fell again and the company also said expect it to continue to fall next dwaquartes well and -- >> are there any buys left on this >> really interesting on this. even on sales it is 6.5 times
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2019 that is on a premium to post on that pressure. it doesn't look good >> yeah. it doesn't >> it is so much smaller it is under $7 billion as a market value i don't think it will get to those lower multiples. i can't remember a kind of highly touted where consensus turned out to be right nobody thought they had a good real hold on new users, which has all kind of come to fruition it is a strange comparison maybe but to zinga which had a huge burst of excitement and settled into the low single digits for years. >> it's down 12% or so today it is 58% year to date it is 66% since they made 2017
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and it's another loser palmolive is disappointing frontier net sales down 3% this is down half a percent. it was looking for a gain there. this is despite the fact that c colgate priced up 1% weren't able to pass it through. they cut their profit guidance. they are deeming wialing with a backdrop for consumer brands they losing share in tooth paste as the world leader.
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it's been kind of weak results i'm thinking hersheyyesterday. >> it is still early to tell but no question, an interesting position with p and g doing well and some of the others not so hot. >> let's get to a check on how retail stocks are fairing amid-the selloff >> yes so it is down around 10% month to date.
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>> wayfair shut b 25% it is the parent of others down around 20% amazon down 19% since october 1st. there are some retail standouts. childrens place up 14% walmart up and nordstrom up about 2% it is the only department store in the green nont date a lot of these are selling off with the market because most haven't reported their third kwartder results yet and fewer have announced holiday strategies analysts and ceos are still expecting the holiday season will be strong it may could be the shock they need to see that turn around towards the end of the year.
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he told me he feels more ready than he ever has for this season this big important season is to come and we don't know what the third dwarter looked like yet. >> yeah. brace ourselves for those results coming in the next few weeks. >> thank you let's check in on how global markets are faring stocks fell 6% germany off by 3%. winning the presidential election this weekend. decided by the prospect of using market friendly policies to stimulate. it is now up 18% in the month of
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october. stock market ending higher by 2% the reports will shed light on strength of the chinese consumer they are also watching which hit a multi-year low there could be more concerns around the health of china's economy. i'll send it down for the closing count down >> thank you very much for that. we have got just under two minutes left to trade. it has been fairly volatile. we have a bit of an uptake we have just had a little bit of a downdraft.
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it is 1.9% what are other indexes doing today? it is also down similar to the s&p. the dow outperforming playing down about 3% adds a whole what are your main -- >> here is the buying the most beaten up stuff, the autos, the chinese stocks there were buyers around all throughout the day the people that want a bottom, when is the bottom put in? there is still too much and too many people saying the economy is really good they are saying earnings is really good. i do know this unfortunately did
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not determine whether or not we'll have that. it was very indeterminant. >> down 300 points on the dow. the low was 540. an ugly di and ugly week that does it for the first hour of the closing bell. back to you. >> welcome to the closing bell rejoining me in just a moment. i'm here with mike another day of selling to cap off a down week on wall street let's see how it finished up the dow jones closing lower by 1.2% it is about 300 points lower on
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the day. the russell 2000 also losing little more than 1%. what a volatile week this was. the dow ending the week down a little over 3% that faired the best it's the worst month since back in 2008. it has been a brutal week and brutal month let's wrap up the big weekly movers here that drag down this index i can't help but stop thinking we hit an all time
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high year to date we are down about 10%. it has not been over the last 24 hours when we heard from western digital. that certainly did not improve the mood in terms of earnings. they were priced to perfection it didn't see perfection in those results >> take a look at the decline so far this month as we go into the last week of october
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facebook down. amazon down 18% since the beginning of the month this is down 20% from the september 4th high netflix and apple is the best performer in the month we did have some tech performers that did well and those are in fact the best performers in the nasdaq tesla having a fabulous week in terms of big come back they are how they finished today. for the week they have very big gains. next week we are watching apple. it this put a lot more pressure on that earnings report next thursday to really lift the rest of the tech sector
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joining us is paul christopher mike, let's start with your take on what we saw with your week as a whole. the process being if we set some to kind of base we are at about 2 to 3%. the broken leadership with the large tech stocks. you have the sense that the second quarter the peak. that's pretty much pervasive
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right now. not getting a lot of relooet leaf any where else in the world. credit markets have now softened up >> we talk a lot object tech and that's been in the eye of the store. the bottom were energy industrial financials all down 5, 6, 7% for the week. >> i think basically on any given day you have something getting hurt the worst
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the big deal is it is a place you can hide at least for the moment they are not. nasdaq trend is not necessarily -- people aren't abandoning them. they want too wait and see how things settle out. >> for the nasdaq it's about 12%. for the s and prkts it is just under 12%. >> yes >> we are pretty much there. >> by the way, the market is in a correction 75% of all stocks are down let's not get fixated. it is a correction >> i like your passion about arguing say man ticks. >> silt a question of can growth
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continue history will tell you you can have a slow down in growth but still higher levels of earnings and the slow down in the economy have higher levels in spending. >> talk to me about what you think in the moment is they bottomed and are you confident sit a good time to buy stocks? >> priced earnings, let's start there. that's the one people use the most you can use price to cash flow we actually like that one quite a bit. just based on the one that most people recognize price to earnings we think you're down here in the
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16s it is 16 times forward earnings that's a historically low or just below average if growth continues what you really need here is a catalyst we don't know what that will be yet. >> in term of the fundamental drivers you can't ignore the fact that this week it was really dominated by economically sensitive stocks that's where the warnings came from as well i wonder if the market is trying to forecast something broader about the economy that we are not necessarily seeing that was the last three months >> i think sit a background concern. for months defensive stocks kind of lead the way. they were also outperforming as we keep saying, housing related auto stocks, much of
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retail really had a big -- >> the biggest loser was caterpillar. >> yes >> and now the question is is. -- is it just a growth scare? you'll brace for something worse than this? i don't know until now wour able to say the credit market doesn't see anything weird coming. >>. >> let's taukt about this. >> it did close off the lows >> you can expect a guidance for the holiday sales quarter coming up it finished down.
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7.8% >> i don't think a 7.8% decline for amazon on earnings would be remotely remarkable. >> the difference is the stock had already been coming in >> yes >> so i know you don't do that but if one looks at amazon and reads the wall street notes today and you want to buy the discounted price is it with stocks performing the way they are in this envoo i ronment
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>> i think it's the way to approach the stocks. people bought into them buying the secular trend but forgot there is still a cycle here. the cycle transitioned it doesn't mean it is broken we think it is a solid time to be buying good names >> here is something to throw into the mix
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>> 3.3 billion during all earnings seasons in the past three years. it was an important support for the full market. what do we make of that? >> i think it is without a doubt an important psychological support. i don't think on a given day you're necessarily seeing the absence of heavy stock buy backs it is a 1% of daily turnover >> it is interesting to me the size of buy backs is huge in the next sort of 6 to 12 months. >> when you're in a falling
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market. >> it might be a more attractive fall and 6% dividend yield >> i think a cfo would say why wouldn't i want to buy in my own shares if i think my book value is not going down as fast as the stock price is i am doing something ben official by buying back stock cheaper. they don't like to toggle the dif den dividend up and down we are assuming. it is why they are not giving the market as much fuel. >> you'll notice that since the
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beginning of october buy backs have declined with the market. buy backs were already declining. if you look at buy backs divided by or in ratio buy backs were already underperforming stocks through may through september of this year. they really had a strong run from last november through the may period it tells us buy backs really got a swift kick if you like from the tax reform and once that effect started to wear off then you started to see some and they will return to be a support to the market you need a catalyst to make people feel better and chase away some of that pessimism. >> the u.s. economy growing at fatser than expected race. it is 3.5% expected race
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it was a slight beat it is not enough to wire people. it is just to lay the fears that it might be the economy slowing down >> it should in theory have been a comfort. i don't think it was a panic about the economy overhaetingov. you stocks that are in liquidation i think the gdp number didn't change the picture of 4.2% stepping down to 3.5 with some enhancing factors and then down to who knows what in the first half.
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>> it was symptommatic you didn't get that catalyst at all. as steve mentioned what you really saw were the strongest pieces are pieces that won't be as strong in 2019. consumer spending once we get past the tax reform. it is something that markets asked themselves every time the economy shifts gears it is a normal part of the economic cycle we think it would be pretty positive next year but not quite
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as strong as this year >> thanks very joining us. have a great weekend >> thank you >> look forward to that. still to come we'll break down the selloffs to find out whether there is any sign of a turn around. first we'll debate whether apple and facebook can save the day for the tumbling tech sector both reporting earnings next week
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feeling the weight of the market mike joins us to discuss. >> yes so this is the price earnings on a forward basis. the nasdaq 100 etf you'll see the sharp move down
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we had a big spike up. that's the january high. this is where we peaked at over 22 times forward earnings for this nasdaq. it is all of the that you know this is the sharp october drop down it's not terrible because the entire time if you bought this index the annualized return to know is about 15%. it is not really compressed because it has become cheaper. this is relative to the s&p. you can see you're still in an up trend here.
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>> and during the pace did we see growth rates pick up and have we seen those come down >> yeah. i think it was much more about a crowding into these stocks this means the stock prices were accelerating i do think they were going up but just basically people had greater confidence >> and even. >> could there be more pain here >> a lot of these big tech growth names then it would see they should find support relatively soon. you can see the s&p has become
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more compressed over the last mono >> thank you very much >> i think he could bring out like a christmas flip book >> yeah. pick one for the month nasdaq on pace for the worst month in ten years facebook and apple, can they save the tech trade? ed doesn't think they could save the sector why not? >> because it has been boiling up for several quarters. concerns about trends. so the trade war and the eu
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fighting italy intel crushed earnings i don't think it will make any difference >> and you agree when it comes to facebook you're not optimistic there >> it makes a really good point so facebook can offer reaspushss they already reset expectations lower. if they suggest they will continue growing at the high rate there right now it could begin to turn the tide >> i'm curious as to where you come down in this debate
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>> i do think at some point -- >> you don't think if am on numbers and were bigger beats. it would have been different. >> i think earnings season, i think next week we could be in a different zone we decided earnings can't help us that's when a good report is when they would help the stocks. it will be a long repair process for the nasdaq to gather itself up to there. >> talk us through how significant of a concern china is foryou.
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>> and this is a large format screen which has been very popular. a lot of market worries slowing. and so if it is a big hit in china i do think it will remind people that chinese consumers have tremendous buying power and middle class is expected to double in size over the next couple of years. any real worries can hurt the overall market the flip side is new phones could change the tide as well. >> and on your point it is all a macro story. it has felt the most pain here in the selling wasn't the idea that the appeal over the last few years of the bull market for some of these that they were immune that other companies were dealing with like the stronger dollar, that they had their own secular growth trends that we have seen helping
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drive the fundamentals they would always be appealing in a downturn. >> i would never use always with the stock market but yes. it is exactly correct. there were strong secular trends that would buck. i would say national trends with the economy. now you're dealing with something much larger. interest rates would effect all in the united states even though you're seeing some of those play out positively it's not enough to offset that in times of uncertainty how is it all going to play out that's what you are going see here until you get some resolution on the bigger issues or we bottom out on forward earnings you're probably not going to see the bare market here >> see what happens next week. thanks for weighing in when we come back amazon had
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its worst day in four years. worries about the holiday sales forecast we'll discuss whether fears are being overblown later in the closing bell i know you want to leave me for schwab, but before you do that, you should meet our newest team member, tecky. i'm tecky. i can do it all. go ahead, ask it a question. tecky, can you offer low costs and award-winning wealth management with a satisfaction guarantee, like schwab? sorry. tecky can't do that. schwabbb! calling schwab. we don't have a satisfaction guarantee, but we do have tecky! i'm tecky. i ca... are you getting low costs and award-winning wealth management? if not, talk to schwab.
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welcome back to the closing bell dow down 1.2%. the low today was 540. we were off the lows s&p down 1.7%. nasdaq is down 2%. there were winners amid the carnage this week. mcdonald's all lead the dow this week there were obviously much more losers this is a fourth down week for stocks fourth in a row for nasdaq >> and sectors all sharply low >> yeah. >> no hiding in general. >> yeah. and they are leading the way down to ones that wouldn't prefer you had today. it leaves on a stock by stock
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basis. >> this market has a way of trading one thing against the other. today it was a lot of laggards that did get picked up >> time now for a cnbc news update >> hi everybody. here is what's happening at this hour former vice president biden says it is time to end the deviciveness that lead to the bombscares
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>> he says he was worried he might be interrogated or pressured to return home when he entered the saudi consolate. she also said he was treated well during his first visit which was on september 28th. and 20 years ago matthew shepherd was brutally murdered because he was gay today his remains were laid to rest and interred in the washington national cathedral. they feared his grave site would be sdesecrated that's the news update at this hour >> thanks very much for that coming up amazon shares plunging on fears it would deliver a lump of coal up next we'll look at whether amazon could end occupy haviup surprise >> and they are supposed to shine but it has been anything
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amazon having its worst day since 2014. >> joining us now is discuss is former ceo of hudson's bay and analyst at sun trust good afternoon to you both let's start with you in the retail part do you think it was a disappointed guidance? >> growth is slowing competitors is catching up walmart is playing hardball. they had been doing that amazon wouldn't be doing amazon today they are doing a better job
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>> amazon is so far ahead of them that while walmart.com growing may be a 30 or 40% may take a couple hundred growth points it is still an 800 point gorilla. it will grow around 20% at their level doing close to $400 billion in revenues on the top line they dramatically outperform by 30% that's not something that any of the traditional retailers can ever do in my book
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>> yeah. i mean a lot of folks are pointing to how much fell to the bottom line. investors can get used to the idea i think the question though is management running the company with that in mind as well. will they try to maximize the quarterly profit >> yeah. you have to continue the growth machine or you can't justify it. you have to get it going really fast ultimately retailing -- you know, i know you can speak to that strongly, there's a convergence taking place as you do that you can see all retailers are going to be very good in stores a lot of retailers have big advantage in stores versus
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amazon the future is not going to look like this here you see a lot of competitors competing for that same chunk. i take a little bit of joy once you start doing that you have to keep delivering those methods. >> and we talk about whether or not that is sustainable. >> amazon has always been expensive. it is true we have been here before we have been where the stock is down 5, 10, 15%. every time you have bought that you ended up making money. the one we look at is the number of prime users
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it has over 100 million prime users worldwide. they not only spend $120 a month -- excuse me, a year with the company but come literally several times a month and purchase things with the company. it has become the first place where people that are going online look to buy things. it used to be google now it's amazon. from a multiple perspective, absolutely it is an expensive stock about 20 times cash flow you really have to go it to justify 30 if it can continue to grow somewhere around 20% on the top line and faster than that on the top line then i think the evaluations are warranted. >> there's something else. i get that the competition is rising from every side but is there any other retailer that can use its high profit business of fast growing advertising and
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cloud computing and everything else that amazon is into to help fund the expansion where do you find a stock like that >> i'm not an expert on the cloud business but i have to say every business faces competition. so the idea that one business could subsidize another one is an old business. generally most people have frowned upon that. one business is not supposed to subsidize the other. the question is what happens in the long term? >> you're really negative on amazon >> it is worth 800 billion >> the question is are they worth a trillion, 800 billion or
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700 million? that's what we are asking here it is a fine company, very aggressive, a culture of innovation what didn't happen when they were in their stage is walmart and the others weren't willing to take the losses that they are now to compete strongly against them they realized they better draw a line in the sand now or it will be too late later. >> and we have this analyst ratings consensus, one hold no cells for a stock that is down it needs to get adjusted down. >> it really hasn't happened even after today's move. >> amazing >> i don't think you'll see it >> no. that's interesting we'll see. maybe it is not this trip maybe. >> we'll leave it there, guys. thank you very much. tech earnings will push into flexion week with facebook we'll preview results for you coming up. plus the prizing impact
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♪ the new capital one savor card. earn 4% cash back on dining and 4% on entertainment. now when you go out, you cash in. what's in your wallet? leslie has details now, leslie >> there is no other way to describe it. this month has been a blood bath it appears that one strategy was hit the hardest. it is fundamental equity these are investors doing stock
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picking. i want you to take a look at this chart to see exactly what happened to these hedge funds in october amid the wild swings in the market the s&p did just a tad worse down 8.85% wednesday itself proved dire long short equity hedge fends. the most of any single day on record it is down estimated 2.6%. 144 base is points. these are down 6.2%. they also saent note they say other hedge fund strategies did not suffer as much these are estimated to be slightly lower for the month of
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october. importantly they say hedgefund losses do not appear to be portfolio unwinds but it is two-thirds of their declines it begs to question how exposed are the hedge funds right now and how exposed should they be >> leslie, everyone says we are moving into an environment that is good for active management. >> exactly for last 8, 9, 10 years they said i know we are underperforming the market when volatility returns, when involve gets into the market when stock picking is rewarded you will see our numbers pay off. that's why they have justified charging not quite 2 in 20 but
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quite steep fees we have the periods of stress. on average a lot of these equity funs aren't showing the goods. >> thank vow very muyou very mu. we'll have details coming up next here on the closing bell. let's begin. yes or no? do you want the same tools and seamless experience
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unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. time now for the take away first up kohl gat poll monthly i have after mixed earnings report the company seeing particular weakness in sales in brazil and
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china. colgate sees sales decline in the fourth quarter it sighting currency headwinds they have not posted negative organic sales growth since the financial crisis period. people always need tooth pace and soaps but the sales trentds are weak. >> greater latin america exposure. >> this has been a heavily internationally exposed company. the crisis in emerge being markets is definitely going to hit this company proctor & gamble is exposed as well. >> issue for the branded goods company for the last decade as people think of the bottom we have had millennial surveys of late suggesting they are coming back to brands maybe not in a way a loyalty level of older people. >> i think that it depends which kind of brands there is always exceptions if your brand stays relevant and come up with some marketing message or some innovation, i think the tide fabric beads are
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an example from p&g that speak to the younger audience. but overly there is an apathy around big brands. >> down 6% next up, tesla was a bright spot but dipped slightly on the reports the model 3 production statements are being examined. the company's philosophy has always been to set truthful targets not sand bag target that we would definitely exceed and not unrealistic targets we couldn't meet np in other tesla new oracle executive chairman announcing support for the company at oracle's analyst meeting yesterday. >> my second largest investment i will disclose it now i'm not sure people know i'm close friends with elon musk and big investor in tesla. and so tesla had a good day. and -- and i think tesla has a lot of upside. >> he would be a good chairman. >> he would abgood anchor investor, i think. with the market thing. >> this is a surprise, right. >> a little bit of a surprise.
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he is a maverick, right. he likes the big idea, ellisonen does we are in an upwin swing for tesla news flo people feel as if the momentum is back when you had the earnings and production numbers opinion. and this idea the justice department is looking at projection that has been hanging out a long time. >> sil the point you made earlier in the week that significant quarters of earnings brings back to say whag multiple should they have. >> without a doubt the same trap with amazon. it's at 330. the stock was higher than that a few months ago swinging around in that range. >> measuring everything from the 420 level. >> that's right. >>en a finally the "wall street journal" interviewing current and former netflix employees who shine a lit on the company's culture. which while emphasizing freedom and encouraging blunt feedback could be dysfunctional overall the report saying executives are often expected to send emails explaining to other employees why they fired a particular person and any executive above the director level is able to see the salaries of all employees at
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the company. >> it's interesting, i do think once the -- the founder led companies get to a certain size there is a lot of scrutiny about the culture. remember, the amazon story, right about the hard charging culture making people cry. it made a flurry for a while and people walkeda want and forth it this sounds like more a transparency thing where you have candidates and almost aggressive feedback. don't know if it bears on the prospect of the company or not. >> or hiring talent. >> right exactly. >> the earnings parade marchs on next week with apple, facebook, starbucks, gm, g.e. just a few of the name reporting we have key numbers to watch next. >> announcer: the take airway to it brought to you by columbia thread needle investments. your success, our priority
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let's get a check in on the key economic data and earnings reports out next woke. monday brings u.s. personal spending and income data us personal -- well wherefore the u.s. either works. for september as well as earnings from hsbsp mondle ease and wing stop. tuesday kicks off earnings for
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coca-cola, am again, bide ewe electronic arts and t. mobile. >> in case anybody thought it was the uk personal spending date we are not highlighting that sfloot important to clarify that that data is coming to us from the u.s. >> correct general motors kjell yolk yum brands, express scripps,estee lauder releasing earnings wednesday. getting construction september for. auto sales numbers for october on thursday. as well as some biggies. apple, starbucks, cbs, dow dupont and spotify and then friday is actually jobs day. for the month of october we also get earnings from albaba chevron, exxonmobil, seagate reporting before the bell. an exciting week. >> there is plenty to key off of, mostly the market itself to start the week because we are going to have the end of the month and it's kind of a now or never if you want to take advantage of the seasonal tailwinds and basically have this prove a
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typical or dramatic october kind of bear killing downturn they have happened. >> mike the closing level of the s&p for the week near the lows earlier. >> near the lows about 10% down. it hasn't necessarily kind of given way, right you kind of chopped around the area for a while the february lows 2% below. >> that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city times square melissa lee. tim seymour here brian kelly. steve grasso guy adami a wild week on wall street as the selling pain ranges we start with the sell i don't have dow slammed again with 500 points lower the nasdaq leading it lower. a red october. the s&p zipping in and out of correction territory now on track for the worst month since 2009 the nasdaq down 11% this month alone. the russel

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