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tv   Closing Bell With Maria Bartiromo  CNBC  July 31, 2013 4:00pm-5:01pm EDT

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great, perfect. >> all right. thank you very much. we close oun, down in pricing, selling pressure here, because of all of the high-cap stocks that are for sale. [ bell ringing ] but still a very good month of july. we'll recap it and a lot of earnings to come on the second hour of the "closing bell" with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. stocks wrapping up a big month for the bulls and all of the drama at the close with the $3 billion for sell in stocks, ending really flat on the day, down about 13 points on the dow jones industrials average, but a big win for the month. the dow, tonight, at 15,507 as things settle out on the street. the nasdaq, off of the best levels of the afternoon, but nonetheless, a gain of 10 points. at 3,626. s&p 500 positive, even barely, by about a quarter there. the dow wrapped up the best month since january.
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bob pisani, hot july, despite some selling at the end of the day. second-best month, bob? >> yeah, you can't -- yes. you can't get any better. we waited all month for the pullback that was supposed to come for the summer swoon that everyone -- and it didn't happen. all we did was go sideways. we didn't even have a 4% correction. look at the major sectors and i'll get to the s&p in a minute. small caps led the way. there's the russell 2000. the dow jones industrials, we hit an intraday historic high today. not a closing high. but good enough. i tell you why i like this so much. when you get healthcare stocks and materials stocks and discretionary and finances, all moving within a point of each other, that's a broad rally. the s&p up about 5%. and in the subgroup, going into july, three, four major groups doing particularly well. we had biotech, airlines, retail, housing. and three of the four turned into a very good month. we know about housing, a little bit of a downturn as the higher rates put a crimp in new -- in
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home sales in general here. the s&p, okay? all week, all month we waited for a correction, and nothing basically happened. we're within a stone's throw of new highs. i said it before. if we now go over 200, particularly 225 to 250,000 print, which possibly could happen on friday, i think that will be greeted as good news for the market, rather than bad news. and as proof, guys, adp, maria, better than expected, interest rates went up, and the stock market did not fall apart on that. i view it as a sign that good news on the economy now may be viewed as good news rather than bad news. back to you, maria. >> bob, thank you so much. we have hit the end of another month of trading. joining me to break it down is nathan, vadim, and our own rick santelli. good to see everybody. thank you for joining us. vadim, let me get your take on what went on today and all summer. we have a hot market for equities. do you think it continues? >> i think the next set of gains
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will be mid-single digits. the bulk of the gains are behind us. the last year, 80% came from multiple expansion. the reason is perception of risk has come down. going forward, we need earnings, and that's not forthcoming yet. >> okay. we want to talk about earnings a bit. julia boorstin, cbs earnings are out. we want to get those numbers now. over to you, julia. >> reporter: that's right, maria. cbs earnings at revenue both coming in better than expected. cbs reporting $3.7 billion in revenue. that's compared to expectations of $3.5 billion in revenue. earnings per share coming in at 76 cents. that's up from 75 cents in the year-ago period and four cents better than the 72 cents wall street had expected. we'll continue to dig through the results. cbs saying in its earnings release these are the best quarterly profits we've had. back over to you. >> all right. the stock making a nice move in the extended hours there. up about 1%. nathan, what's your take on the earnings season so far? of course, revenues nonexistent,
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huh? >> yeah, exactly. so we had great earnings but we didn't have great revenue. >> growth. >> right. it's like the new york giants. you know? offense wins games but defense wins championships. i think the stock market is going to take care of itself. i still like growth. and i think when bob was talking about a broad-based rally and value investors, i think what's happening with value investors is they were a reluctant bond holders who went looking for dividends as well as a little growth, and they found that real quickly during this month as value went the other way. there's a little risk involved there. and so, i think you'll see a shift -- and that's why i like ivw. i like large-cap growth. it's the one part of the market that i think is still undervalued. but i would pay a lot of attention to my bond portfolio, because i think the bond market did not take the head fake today from the fed. the bond market said, you know what, i'm pricing these 10-year treasuries as if we already have tapering taking place, and they're holding firm on that. >> interesting. james, let me bring in james paulson. you still buying this market, james? >> well, maria, i've been since
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may when we first got up to about this level. i thought 1,700 was about the highwater mark for the year. we've entered a trade range for the rest of the year between maybe 1,725 and 1,575 in the s&p 500. i just think we have to digest a number of things here for the rest of this year. we have to digest the big move we've made. three-point increase in the p/e mobile since last fall. we have to digest a rise in bond yields, which i think is 10 year will ultimately go to 3% before the year is out. and we're going to have to digest the start of fed tapering. i think we'll successfully do all those things, but i think the market will take some period of time to digest that and maybe then make another move higher in 2014. >> all right. so are you on the sidelines then for the rest of the year? >> well, what i would do is up here, i would look at moving more towards cyclicality, if you can, and also making sure your bond exposure is where you want it, if the yields are still going to move higher. and then be a commitmenter of
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capital if we sell back into low 1,600s again, which i think we will before the year is out. >> rick, let's talk economic data. a mixed batch, although the jobs numbers were better than expe expected. man, it's hard to move the needle on growth. >> no, yeah, it is. i understand that gdp was definitely better than expected, and it seems the new methodology didn't figure in prominently with the current read. yes, it's still on the light side. but it was better than expectations. listen, if you look at an intraday chart, you can clearly see at 8:15 eastern, rates extended maybe a little more than they would have if this was a fed day without adp. that affected the own tire trade because it overextended up to 270. i agree with mr. paulson entirely, not only about the range or the top of the range in equities, although i've never advocated selling equities post-crisis, but i think the treasury market is dealing more in the numbers we deal with every day and handicap a reality that doesn't give way to
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discussions about words in a fed statement. >> yeah. well, words in a fed statement indicating that the fed will probably be there for a while, even though earnings -- >> well, no, not so much that. the fed's important. but i think that the treasury traders aren't interested in the verbiage. they advise they have brains. they can see the data. they know the effects that the fed's trying to impart on the markets. and they also know the markets have a little muscle of their own. >> listen, one thing that -- >> i'm trying to transition over to earnings, you guys, give me a minute, because dreamworks is out. i want to get to julia boorstin with the details. >> that's right, maria. dreamworks animation, shares spiking on some better than expected earnings results. the company reporting $213.4 million in revenue. that compares to expectations of $190 million. also significantly up from last -- the year-ago quarter $163 million in revenue. now, earnings also coming in significantly stronger, at 26 cents per share, compared to expectations of 20 cents per share. and that's up from 15 cents per
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share in the year-ago period. dreamworks animation has been suffering from some concerns about the release of its most recent movie, turbo," that's not had great earnings, but the ceo, katzenberg, saying we have momentum in the consumer, television, entertainment businesses, the theme parks, saying diversification is working. maria, it seems to be working for the stock now. >> no doubt about it. up 4% now in the extended hours. more numbers coming out, whole foods and yelp. let's get to josh lipton. >> let's start with whole foods here. reports 38 cents. that's a beat. the street was looking for 37. but the top line, 3.06 billion, analysts were looking for 3.09 billion. so a little light there. in terms of guidance, the outlook, whole foods upping its fiscal year guidance, 145 to 146. analysts were looking for 145. also gives 2014 guidance, there looking for 169 to 172. the street was looking for 172.
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we also have yelp out. a loss of a penny. the street, remember, was looking for a loss of 4 cents. on the top line, 55 million. that's a beat. the street was looking for 53 million. maria, back to you. >> all right. thank you so much. back with the market guests. and vadim, what do you want to be invested in right now, and exposed to, given what we know in terms of the slow economic growth story? >> i think you want to cover three areas. be invested in tech. you want to be invested in healthcare. and surprisingly enough, if you have a horizon that's only three to six months, you actually want to be buying mining -- metals and mining. optics of the industry will get better as we go into the second half of the year. it's had severe underperformance for the last three years, and between now and the end of the year, i expect it to outperform. >> you said buy technology. technology has underperformed this year. >> yeah. >> what's the problem? >> there's a huge, huge change in terms of the nature of technology. with the cloud, with the cyber security, et cetera. so there are areas doing
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phenomenally well. old tech has been beaten down and underperformed. i think between now and the end of the year, the laggards will catch up. >> all right. so you think the tech sector comes back. certainly a handful of them already have. nathan, what about you? what are you expecting out of the jobs number on friday? is that the next big catalyst for this market? >> it's definitely the next big catalyst for this market. if it's only 200 -- and i think pisani is smoking his breakfast if he thinks we'll get 225, but i could be wrong. the quality won't be the quality that drive the gdp. it's the service sector, restaurants. how many of us can go out to eat? how many of us can wait on those of us, work only 24 hours a week, working on tips? the quality of the jobs is one of the reasons why when you look at housing, only 25% of the new housing -- excuse me, housing purchases is first-time home buyers. a third of housing is cash buyers. this tells you it's investors and the average american's dream of homeownership is slipping away. that doesn't give me a good feeling about gdp in the second
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half of the year, i have to tell you. >> yeah. well, i mean, what does it take to get this market -- this economy out of this under-2% move? >> well, that's a -- listen, that's the question of the day. i think, actually, tapering will help. because i think we need to get tapering behind us. i think we're so worried about it, that nobody -- the market doesn't know how to price itself yet. and i think once we start tapering, then we'll actually trade on fundamentals, which would be a fabulous thing after five year, wouldn't it, maria in. >> it would. you want to jump in? >> that's the critical question. what will get us going? there's very few areas of pent-up demand. the one to watch is new business formation. it's perhaps the only area of the economy where we're so dramatically below trend, to the extent we start to see credit pick up in small businesses, to the extent the sentiment picks up, i think that will be the necessary engine. >> all right. we'll leave it there. thanks, everybody. appreciate your time. we'll see you soon. thank you very much. that will do it for july. july in the books, at least as far as the stock market goes. up next, we're digging into august, finding out what
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traders' expectations are for august and where the money will flow. then, what in the world is happening in facebook? the stock hitting a new high today, trading above the $38 ipo price before backing off. is the stock out of steam, or does it keep on going? later, former ncaa athletes winning a lawsuit against ea today that could literally be a game changer for college sports, and the video game industry. will the athletes start getting paid, that and a lot more, on "closing bell." back in a moment. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.
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welcome back. july turned out to be the hottest month of the summer for stocks so far. but will the real heat come in august? seema now has the outlook. >> we're talking about the best july performance for all three indices since 2010. for august, if we look back at the performance of the dow, since 1900 when july is positive for the markets, as it was this year, august is also positive. on average, up 1.2%. but when you look at stocks on the s&p 500, right now, 72% are trading at a price to earnings ratio that is higher than the average of the s&p 500. that data according to fact set.
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for this reason, management firm -- asset management firm douglas lane says the market might be due for a pause. however, if you're looking for stocks that may move higher, lane says since we know the fed will taper at some point, stick to stocks that can grow organically without the artificial stimulation from the fed, offer a dividend, and also have a high growth rate. as the market moves higher, the number of stocks that fit this criteria is shrinking. now only 31 stocks on the s&p 500. some of which are in the technology space, microsoft, sisco, corning, ca technologies, and others in the industrial space, lockheed martin, ryder systems, deere, and general dynamics. as the market moves higher, it's becoming more difficult to find names attractively valued and analysts say that will likely be a challenge for investors as we head into august. back to you. >> all right, seema, thank you so much. let's bring in a pair of new york stock exchange traders. steve grasso, cnbc analyst with
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stewart frankel, and bill emert, good to see you both. thank you for joining us. what was happening at the end of the day today? we were told $3 for sale. the market was volatile, down 25, down in four seconds. >> you see this type of selling going into month end. it's a product of august. you guys are taking down net exposure, so you want to free up their books, because their they're not sure. did ben bernanke say -- or did the fomc, did we get anything out of them today that a made you feel luike you have closure? the answer is no. >> no, no. >> the conversation of the past two months, it's set up for the september meeting. so nothing has changed. guys are taking down the net exposure. >> you have to be hard-pressed to believe that anything changed materially in two months. you're talking about the september meeting. seriously, it doesn't look like the fed will begin to taper in september. let me stay on this end of month theory for a minute. ben, you said, also, end of month selling that really --
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does that mean it reverses tomorrow morning? are you expecting a higher opening? >> traditionally, the first month, you see net inflows from capital that's gone into 401(k) plans or corporate repurchase plan, et cetera. so you do see -- you do see money coming to work, so there is a natural bit in the market on the first day of the month. it's a little bit dangerous, as much as i continue to look for a correction in this market, it hasn't come. and i don't think it will happen tomorrow. >> where is the bid in this market right now, for a long time financial services leading things, but the last couple of days, looking at cracks. are they underperforming? >> it depends on the individual stocks. lately, for the last two week, we've been seeing a market of stocks, not necessarily a stock market. so you can see one in a group that really falls apart, yet the rest of the group succeeds. i think the most of the monday, that we're seeing stay in the market, continues to search around for value, and the tech names we heard from the last report on s&p, we see money going into the industrials. now, again, a market of stocks,
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cat tractor in that report, and it didn't perform well over the past few days with the news and the cnbc news on the short interest. so the money going to work seems in the traditional leadership. again, it's -- >> it's also -- it's also in the growth or perceived areas where you'll see growth. it's usually in the technology sector. >> right. >> so we've been concerned with global growth as a whole. so that's why industrials are a wild card. no one knows which -- >> sure. they're exposed to the rest of the world. >> exactly. we've seen the fertilizer companies, the headlines out just yesterday, so we've seen those. we've seen chanos be extremely negative on cat, as ben was referring to. so the global growth plays are in a little bit of a question. >> i know this is a specific story, you're not going to discuss your specific books, but were you in the credit jcpenney, is in a retail story? did you see anything today? >> when cit says we're going to cut back on our lending facility, that's going to send a shiver through anybody's mind, whether you follow the stock or not.
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from your own research side, which i don't believe we do. so i did go take a look at it as soon as i saw the news hitting, and the stock was really -- got cracked on. not a good indicator. >> we should point out a report from "the new york post," that cit is tightening the screws on jcpenney, but we'll see. sometimes where there's smoke, there's fire. >> right. jcpenney was thought to be a turnaround story. but for turnaround story the, you need deep pockets, and deep pockets need lending. if that's any time of chink we see coming out of it, it will be a problem in the overall market for jcpenney. people have invested in it and thought it was going to be a keeper, or that turnaround story, and now they're losing hope. >> right. is there any reason to believe this great rotation actually materializes? is there any reason to believe that actually the money that came out of bonds is going to find a home in stocks? what do you think? >> i firmly believe there is. and if you take a look at just strictly money flows, the money has flown out of the bond market and the dividend-sensitive issues.
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it seems to be pooling, collecting in money funds right now, not flowing directly. >> yeah. they put it in the bank. >> the leakage still seems to be coming into stock, albeit it slowly, talk about that bid. and this month's return, 5% to 7% in indices, a perfect example. every professor will look for the market to pull back, but the market kept pushing, and i don't see that correcting. >> and i would think the high-dividend plays start to come back into vogue in the marketplace -- >> absolutely. >> -- coming out of bonds, they don't go flat into equities, in search of yield again and that will be a popular trade. >> all right. bottom line. thank you very much, guys. ben, steve, see you soon. we want to jump and get to jcpenney. it's down 10% in the extended hours trading session. as you heard, "new york post" reports that cic is clamping down on credit. dana, how big of a concern is this for jcpenney? what's your take? >> it's always a concern when you hear cit is cutting down exposure from smaller vendors to
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one of the retailers. i think one of the things is a "new york post" report. let's wait to hear from the company. we already have a call in. what we're hearing about the back-to-school season is it is sloppy. we know that jcpenney is going to be promoting aggressively in order to drive traffic, and they got the $1.7 billion line of credit from goldman sachs earlier in the year. so it's a news report, nothing's been confirmed yet. >> so what do you want to do here? let's say i'm holding jcpenney, and looking the the stock bleeding in the extended hours. what's your recommendation? >> i think overall, looking at penney's right now, i think there's more concerns with the weak comps, still getting weak comps, still getting weak traffic and it's more of a concern than not. >> more of a concern than not. sitting at $14.67 a share. we know what happened the last time there was commotion around jcpenney. the management shake-up. do you think this company can get back on track? >> i think it's going to take quite a long time to get back on track. the sales, obviously, have been cut tremendously. they're working to put
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promotions, to drive some traffic. you have great competitors out there, whether it's tjx or macy's. it will take a long time for jcpenney's to get back to positive comps and basically if you're going to see it, you better see it by the end of the year, because you're up against the negative 31.7% decline. >> all right. we'll leave it there. thank you so much, dana. >> thank you. >> we'll keep watching the story which is developing. good news on the economy turned out to be good news for stocks. instead of worrying about the good news, meaning the fed will back away. still the question remains, when will the fed start tapering, the $85 billion a month, bond-buying program, who is likely to replace ben bernanke? don't miss the fed roundtable of heavy hitters later. how's this for an aboutface, with a share briefly charging above $38 after lagging for months, can facebook keep its head up? somebody here says absolutely. stick around for the bull to meet on facebook. back in a moment. ♪
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welcome back. we've heard from the fed in today's statement. what did it tell us about when ben bernanke will take the foot off the pedal? we want to get to our panel to help decipher the clues. joining me is former dallas federal reserve president bock mcteer, julia is joining us, as well. thank you both for joining us. >> it's a pleasure. >> yes. >> bob, let me kick it off with you. what did you hear from the fed today? >> well, i didn't hear mention of tapering. i think it pushes it out just a little bit. i don't think it's going to happen real soon.
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it may be announced in september, but the economy's too weak right now, and that was confirmed with the gdp numbers this morning. >> yeah. >> you don't have that strengthening yet that's a requirement for the tapering. >> so, i mean, is it possible, bob, that we don't even see the beginning of tapering before bernanke's term ends? >> yes, i think that's very possible. i think we'll hear some kind of announcement before his term ends. but it may be pushed out beyond his term. >> i see. so let me bring in greg mcbride of to the conversation. greg, your thoughts on the fed and whether or not we're going to see interest rates move much higher from here. >> i don't think we're going to see that anytime soon, maria, because just as bob was saying, we have a slow-growth economy, high unemployment, low inflation. this is not the type of environment where the fed has to have any temper urgency on dialing back the stimulus. i think it's steady as she goes, $85 billion a month, buy themselves time to see if the
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economy does pick up a pace as the fed has suggested it will. >> julia, if that is the way it materializes, how do you want to invest around this? >> well, i think that for interest rates, we're going to be pretty range-bound for a while. we may even see rates drift a little lower in the near term if the fed confirms that, in fact, tapering is beginning to be pushed back. so i think the rapid backup in rates and the noted mortgage rates in the statement certainly is a concern to them with an economy that's running at about 1.5% in the first half of the year. so they decided not to take any chances, and what they didn't say spoke volumes. i think tapering in december would be the very earliest they would announce it. and so, what that means is probably -- it's probably good for the stock market and probably good for interest rates, as well. >> yeah, it's interesting, greg, because you don't think rates are going to go up anytime soon. and yet, you still think the fed will taper sooner rather than later. >> more like later rather than sooner. i don't think it's going to happen in september. i mean, i don't see how they can.
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we're in this economic backdrop. i think they'll talk about it more in september. >> mm. >> again, december is the earliest, maybe not until 2014. with gdp growth sub-2%, it's not the type of backdrop where the fed can feel comfortable starting to pull back on the stimulus. >> so, bob mcteer, let's say this does happen in 2014. who do you think is at the wheel? who will be the next fed chairman? >> well, the easy bet would be janet yellen. and i suppose because they floated the trial balloon that the next in line would be larry summers. either one of those would be a good choice, i think, for the president. >> you know, what would be the difference, you think, in their policy? i mean, larry summers, i think, is highly regarded on wall street, being very smart. is his policy going to be different, because he did complain and criticize staying with qe for as long as the fed has. do you think his policies will be different than janet yellen's? >> i don't think he could have
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very different policies at first. i think in order to get the job, he's going to have to make a wink and a nod toward an easy exit from quantitative easing. i think they both would be very cautious in moving away from it. i do think, though, that he's more likely to move away from it sooner than janet yellen is. she's been a -- she's been there all along when it was -- when it was devised, and she's more committed to it, and she's more part of the fed infrastructure now. >> right. this is part of her baby. >> that's right. >> the quantitative easing. greg, what do you think? you agree with that? >> it's janet yellen's job to lose. she's been the co-pilot. it's very easy for her to slide into the big chair the end of january and with minimal disruption to markets. there's some concern about summers, because, yes, he's knowledgeable, great experience. but he has come out against qe, so there's concern it could produce volatility, and he's been a bit of a verbal loose cannon. so that stands in the way, as
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well. >> he's also worked for the clinton administration, worked for the obama administration. does he create some politics around -- the fed is supposed to be independent. >> very possible. >> that's something that's been talked about. julia, any thoughts on this, the next fed chairman? >> i agree that yellen is the easy choice and the best choice. she's got the fed ebs peerns -- experience. the quantitative easing experience. it seems like a no-brainer. obama has a great loyalty to summers and he likes him and he trusts him. but i think the track record and the baggage that come along with that are two problematic, and why not take the opportunity to nominate the first female fed chair? >> yeah, that's -- that's interesting. is there an investing strategy, julia, that you are undertaking right now ahead of a change in policy? i know you said earlier it's probably going to happen later, not sooner. >> in terms of the tapering coming into effect? >> yeah. yeah. >> i think for now, again, it's
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steady as she goes. i think we're going to be pretty range-bound, and the continued qe is supposive. i think the economy needs it. that's why the fed will keep the foot on the gas for now. i think once we get closer to the tapering, yeah, we'll have to be more cautious and look for maybe a backup move to a higher range in rates and spread products might get hurt a little bit when we get closer to that point, as well. >> all right. we will leave it there. thank you, everyone. appreciate your time today. we'll keep watching that, of course, a new era at the fed. of course, we are facing a new era somewhere else. up next, facebook soaring, about 40% in a week. somebody here says it is still not friending the social network stock. find out why he's so bearish. then, former ncaa athletes scoring a big win over electronic arts in court. and now, ea may have to pay them some big bucks to keep using their images in the games. details ahead. you're watching the "closing bell" on cnbc, first in business worldwide. i've been doing a few things for a while that i really love-- tdd#: 1-800-345-2550
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welcome back. earnings coming one after the other after the close tonight. josh lipton rounding out the big movers tonight. over to you, josh. >> maria, lots of earnings report after the bell.
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whole foods reports, eps of 38 cents. that beats by a penny. but revenue clocking in at 3.06 billion. now, that was a bit light. the street was looking for 3.09 billion. same-store sales up 7.5%. so far in the fiscal fourth quarter, though, up 5.8%. looking ahead, it raises its full-year guidance now, looking for 1.45 to 1.46. analysts expected 1.45. robb will break down the numbers tomorrow. also, we heard from yelp after the bell, report a loss of a penny. remember, analysts thought we'd see a loss of four cents. on the top line, 5 million. that was better than the expected 53 million. yelp giving us guidance for q3, 58 to 59 million, better than forecast. the company also raising its full-year revenue and adjusted ebitda guidance. finally, metlife, a mixed picture there, eps of $1.44. a healthy beat of 11 cents. but top line came in light at 17.04 billion.
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maria, back to you. >> all right, thank you so much, josh. facebook, meanwhile, trading above the ipo price today, $38 a share was the ipo. it exceeded that. the stock is up 40% since it reported earnings last week. now, it pulled back from that ipo price, finishing at $36.80. but nonetheless, the stock has real momentum the last couple of weeks. is it time to get your money in, or have we missed the move? larry joins me, a facebook shareholder. and also with us is carter, cnbc contributor from op penheimer. i like to say one of the best technicians. facebook up more than 40% in one week. what the heck happened, larry? >> the street saw the numbers. t the fundamentals were always there. now everybody sees the fundamental, so you have a pullback today. it will continue to drive forward. i believe it will be over $50 stock this year. >> wow. >> 1.1 billion users, i think will go to 2 billion users.
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you have an ecosystem where the advertising flows into it. advertising is evergreen. i mean a lot of tech investors stay away -- a lot of people stay away from tech investing because it's about the new-new product. this is evergreen, advertising, e-commerce, and it will continue to drive. time to get in. >> carter, what do you think? >> sure, well, actually, we think day-to-day, week-to-week, no upside at all. longer term, the valuation will out at some point. is it more than zynga or less, or twitter? here now, in principle, the following is in effect -- a lot of overhead supply, which is to say on the day of the ipo, 580 million shares changed hands. anyone who bought on that day by definition, when it went down 50%, 60% over the last month or two, was hurt. the condition is as follows, when having lost money, to get out, people act on it. there are unhappy shares at this level. that's why we probed 38 today and failed there. you have to contend with overhead supply. so day-to-day, we think there's
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little upside. it will be stuck here at best for weeks at least. >> were you surprised at the earnings, creating such drama and gains? >> it's quite remarkable, right? it gets to the issue that really there is no such thing as valuation here. what is it worth? it could surge like that, it could have plunged on its ipo. basically, people are trying to figure out what it's about, and what we do know, it has returned to a level where considerable overhead supply, angry shares, who want their money back. >> yeah. now, larry, you know, you mentioned users. i can't forget what we were looking at in the '90s, and we put profitability aside, they had no revenues, they had hits to the website. so users. is that my metric for facebook? what about profitability and revenue growth? >> well, the revenue growth is there. the profitability is there. and the issue with the metrics is, even if you don't say it's 1.1 billion users -- let's say 800 million users -- it's still a ton of users.
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you can't compare this to anything to the dot-com bubble. >> they're making money on them. >> they are. you have to look at it as this. if everybody is trying to figure out how are they getting into mobile, what are they doing, that's the time to buy. you don't want to buy when everyone figure it is out. that's why you have to get in now. >> you bought more, right? >> i just bought more. i'm a shareholder. i went back in on monday. i'll tell you what, the reason i believe is, google is a $300 billion market cap. i believe facebook, with the model that they have and it's sticky, it's not dot-com model, it will surpass that market cap. and if you look at it as an investment, not a trade, get in when everyone else doubts it, and you'll be happy. >> let me ask you if there's anything you see on the horizon that could get you to like facebook, carter. you hear what larry is saying. >> sure, it's legitimate. it's about time. we have returned to where we are. at this point, it's putting it where the street is. 31 buys, 1 sell. it is standing today at the average price target of the sell side. so in many ways, the whole street is already behind the ball, right? >> enamored. >> enamored. at this point, long term, sure.
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day-to-day, and this is not because i say so, but because what history shows, when you return to a very difficult level, you find difficulty. and the stock sure enough probed above 38 and stopped dead-cold today for the reasons articulated here. there are people who just today have had a year of a nightmare and today i get my money back, i want it back, thank you, good night. and -- >> not the people who traded it up to $42.50. >> right, right. >> dan shorted it and now he actually likes it the stock. you said you bought more and the reason is you want to get the stock, larry, when no one else likes it. what about carter? you have how many buys? >> 31 buys -- >> everybody loves it. >> he's talking long term, and i'm talking weeks and months. >> yeah. and i still think it's cheap right now. what's going to happen is institutional buyers are going to jump into this. right now, they're low on institutional buyers. once you get the institutional buyers come in, this thing will start to move. look at amazon. the earnings, numbers on amazon
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are way out there, and this is a better play than amazon for the money and the numbers. >> amazon keeps growing revenue. what do you need to see from facebook? >> i want to see the momentum is there, but bold acquisitions. i want to see a content play. >> that's probably the opposite. you don't want to see acquisiti acquisition. >> that's right. if it ain't broke, you know, just let it go here, it seems all right. >> gentlemen, we'll leave it there. thank you very much. great insights. carter worth, larry joining us. wall street's money pros will weigh in on what will move their morning tomorrow morning. stay with us. and former ncaa athletes trounce electronic arts in court, which could leave ea on the hook for big money. details next. stay with us. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars.
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"first day of my life" by bright eyes you're not just looking for a house.
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you're looking for a place for your life to happen. welcome back. a few hours ago, a u.s. federal appeals court slammed-dunked electronic arts, ruling in favor of ex-ncaa football and basketball players who sued ea for using their images in videogames without permission or payment. the ruling could be a game changer for college sports and ea stock, if today's intraday trading is any indication. joining me to discuss the implications is lynn elmore, former ncaa star at maryland, and former agent. he's now a lawyer and ncaa tv analyst. good to have you on the program, sir. thank you for joining us. >> thanks for having me. >> explain what went down here, lynn. what does it mean for the future of electronic arts? >> well, i think electronic arts now will have to find a way to make their games interesting and exciting, but not pin the
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individual players up against the likeness and images of current players. i mean, that's really what it's about. it's the right of publicity, and the ncaa and ea sports, according to the plaintiffs in the o'bannon case, have claimed that the ncaa has prevented them from exercising that right of publicity through some agreements, but also through a conspiracy, not only among schools, but among the people who work with the ncaa in producing these things, as well as television. >> yeah, i mean, they were using their images without payment, without acknowledgement, nothing. i mean, what about the ncaa? does this impact college sports? does it impact the organization over the long term? >> well, i think it will have some impact, obviously, depending on what the remedy is. now, again, looking to certify the class means that you have people who played even before my time who are claiming that their right of publicity was violated, let alone current players right now. so, you know, if that comes to pass and the money -- the pool
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is about television, the broadcast rights, you know, it may ultimately bankrupt the ncaa and certainly it will force a new policy going forward as to how you televise games, how you treat players. players may ultimately, individually, have to negotiate their right of publicity. >> was it the right ruling, you think? >> i'm not sure. i really believe, again, in a balance of equity, student athletes deserve something, be it a stipend, something to make ends meet. but when it comes to maintaining amateurism, when it comes to keeping the game what it is to the communities that love the game and people, the fans who love it, i think that you have to find a way to balance those equities. so the ruling in effect, sure, they should pay these guys. but in the long term, i hope it doesn't change the landscape of college sports. >> yeah, i understand what you're saying. but you think it could be a step toward paying the players? >> yeah, it will be a step towards paying players from the standpoint of, you know, basic
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needs, a stipend. i really hope they're not paid salaries. and if players have to negotiate their individual right of publicity, that becomes cumbersome, because only a few guys and gals have that type of bargaining power. the majority don't have any now. once again, you'll have inequities among student athletes which could present problems. >> i guess, i mean, if they were using the images without, you know, asking permission, and money, what else are they doing? is there any reason to believe that this is -- this goes beyond just using of the images without permission? >> i don't think there's anything beyond that. what they're doing is they're keeping the money. >> right. >> they're not sharing it. and that's really where the problem is. again, from an equity standpoint, you've got to be able to balance that. and no one complained about it 20 years ago, 30 years ago when i played, or 40 years ago when i played. but because -- because the pot has become so large right now, everybody wants their piece. everybody wants to make sure they're not exploited or used,
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and i think now is the time student athletes felt that it was important to be able to step up and make this case. at least the plaintiffs there. >> and today, people get paid for this kind of stuff. >> yeah, absolutely. i mean, that's part of the marketplace. the ncaa, according to the plaintiffs, have shut off the marketplace to student athletes, and they believe that's unfair. and i guess we all should, in a basic sense. >> all right. len, good to have you on the program. thank you so much for weighing in on this. we appreciate it. >> thanks. >> we'll see you soon. up next, how will the market kick off the new month, tomorrow? what kind of an august might it be? wall street stock money pros give you a leg up on thursday's market action. back in a moment. we're cracking down on medicare fraud.
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>> tomorrow tonight 30 seconds on the clock. our next guests are here to tell you what we should be watching for tomorrow. good to see you guys. thanks for joining us. >> hello, maria.
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>> jay what do you want to be prepared for tomorrow. >> tomorrow we get the manufacturing index and that is interesting because it has ten components to it which is manufacturing employment. the index last month showed a decline in manufacturing employment since the depth of the reception. the adp report also showed 5,000 manufacturing jobs lost out of all the other components that were positive. these seem like under the radar numbers but they show that the creation of jobs seems to be softer and focused more on service industries. >> okay. we will be watching that ism. you clearly think that is the more important point. jimmy, 30 seconds on the clock starts now. >> i'm watching the obvious, housing, we have employment numbers out on friday and of course the rhetoric from the fed. we had a minor pull back in june
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fold by a strong recovery in july. they should use the dips as buying opportunities. we have had a rising rates and i'm watching the flow out of the bond market. i still feel we have room on the upside for equities. >> we will leaf it there. bonus time. what kind of an august would you guys expect? july second best month of the year for stocks. jay, august? >> i think we continue to get a follow through and sectors will continue to rotate to stronger performances with biotechnologist and financials. >> i'm with jay. i think some of the that money out of the bond money will find the stock market. >> you're looking for more gains. good to see you guys. thank you so much. >> thank you. >> up next why friday's closely watched jobs report has become more critical. we're back in a moment. to update our status without opening an app. to have all our messages in one place.
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welcome back. finally tonight my observation on what the fed said today and what it means for the market. i'm focusing on the comments about the economy. essentially downgrading the economy saying it is growing modestly which is less bullish
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than the june assessment. the fed does expect growth to pick up in the second half of the year but the cautious market is that the fed is not close to slowing down the bond purchases even though we saw the gains evaporate in the final minutes of trading because it is the end of the month. the fed said consistent with the statutory manned date it expects with appropriate policy accomodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline to the levels that is consistent with its mandate. >> what does that tell us? the fed is here and here to stay at least until the unemployment rate goes down to 6.5% which is their target. currently it's 7.6% with job growth averaging 202,000 per month, up 180,000. this makes this friday's july employment report even more critical to the fed's assessment
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of the economy which is expected to show employment at roughly the same pace as we saw in june. it's worth noting today that we received the latest gdp report which i will better than expected is well below growth of 2%, an anemic growth story for sure. the fed statement was more of the same so it will be difficult to get any return. we are waiting for the money that has come out of bonds to find its home in stocks. it looks like the fed is not going anywhere any time soon. it will be difficult to begin tapering in two months time, september, really? my guess is year's end which makes it somebody else's problem with ben bernanke's term ending in january. one more reason why who replaces him is such a big story. we'll be following it. before we look at the market today -- it was a wild few minutes of drama at the close.
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the market ended down 21 points after spending much of the day today in unchartered record territory. nasdaq going up a quarter of a percent. the s&p was down about a quarter on the standard and poor's. that will do it. "fast money" begins right now. stay with cnbc. i'll see you tomorrow. >> live from the nasdaq market site in new york city's times square i'm melissa lee. our traders tonight, guy adami, tim seymour, brian kelly, karen finerman and mike khouw. let's get to the big story. hot stocks of july. some big names were a cut above the rest. we're breaking down the reasons for why it could continue for tesla, trip visor apple netflix as we enter the


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