"squawk box," shorts deutsche bank, the problem child of the global financial sector for some time now and continues to be something to watch deutsche bank, db. thank you for watching >> "closing bell" starts right now. >> and our best to harry and meg meghan >> welcome to "closing bell," a record breaking day for the russell. what's it mean for the rest of the market at cnbc global headquarters, i'm dom chu where walls of worry and caution flags are lining up against the rally. what's the risks for investors right now? >> reporter: we are reporting a major breakthrough in migraine medication shareholders and parents set to benefit big time >> reporter: i'm wilfred frost in windsor, less than 24 hours left until the royal wedding a look at the money behind the big event. i'm kelly evans, blowback against musk's boring company,

some saying numby, not under my backyard a warning from the pope, the "closing bell" starts right now. ♪ welcome, everybody especially welcome to you. >> well -- >> have we ever -- you would be here and i was -- and now it's all, but this is a real -- >> it's a pleasure >> will be an exciting friday. >> we'll get it done >> carolito, borrowed that from michelle carl is here for wilf. him in just a moment, all the stories in a moment, but closing out the day and the week, the dow swung 100 points today, right now up fractionally. russell, there it goes again, juggernaut, up two points, another intraday high. >> averages on pace to close the week lower let's go to cnbc global headquarters for the warning signs in the market today. hey, dom

>> looking at the big investor worries right now because we do know that markets climb a wall of worry so here's biggest worries out there. we asked a lot of strategists, analysts what they thought the no. 1 biggest risk is in the market place we compiled a sampling of them look at some of these ones because we got to put interest rates front and center what happens with the fed? chris economist said the biggest risk is fed policy the market does not do well when the fed tightens that's a risk for him. the macro issue, matt says every time we see a meaningful rise of rates, it exposes some kind of bad investments elsewhere in the marketplace. maybe not the kind of big crash, but could create a scary downdraft seen in february rates playing into that discussion also sticking with the idea that we have this broader macro theme, it's about the stronger dollar, weaker emerging markets. this is blake over at west

securities saying the emerging markets' weakness is the top of the list because it's the most immediate and current stress in a few countries and could spill over into emerging markets and impact developed markets like ours here in the u.s the earnings picture a focus because of the dollar. lori says that she thinks that earnings are going to be a big issue because we've seen historically when the dollar strengthens too much, earnings revisions take a hit the expectation for a weaker dollar had been very consensus, if stronger, could cause real turmoil, and summing it all together here, what does it mean for companies in america well, look at what ivan says, it's about revenue and profit growth anything to derail that train is a risk a sampling of the risks that could be a threat to the market. back to you guys >> xle is up, sixth straight week of gains now, and bob

pisani can tell us how far it's come from the lows >> flat on the week for the s&p 500, a huge victory for the bulls, does not sound like it, but it is. concerns here, down, down, down, lower highs, broke that decisively, sideways here, that's fine with everybody, and for most of the bulls at least right now. kelly mentioned the xle, energy, small part of the s&p 500. only 6%, but look here, we're up 14% hitting new highs. this is a three-year high for the energy stocks, so they crick contribute along with technology stocks, and semiconductors as the leader move down, up notably here in the last few weeks here, and this is just a slightly to the downside today there's not a lot of concern, but the important thing is we decisively broke the down trend. you want to look at the banks, obviously, with the interest rates moving up, the banks help, but this is much more important here, 4% gain in the last month

for the banks, more than some people were expecting. finally, something very important. the industrials are starting to break out. caterpillar and deere have been doing much, much better. the transports have been doing better you see the down trend again, breaking out right here, and that's a major, major move to the upside. that's a big contributor to the s&p for the overall, so we've dodged a lot of bullets this week look at everything that could have gone wrong. inflation concerns, higher gasoline prices, retail sales prices paid index on the empire state manufacturing survey, that caused a big scare monday, but nothing's really happened. 10-year treasury up 7 points, down today, market could have gone down on that. it did not u.s. dollar up 2% yesterday, now only up 1.2% for the week, and, again, that could have had taken the markets south, but it did not, and the trade talks stalling out, well, we don't know what's going on with nafta, but all of this could have brought the market down this week that's why i'm saying, guys, sideways, a big victory for the

markets. >> all right, bob, thank you bob, see you in a bit. for more, let's bring in tim anderson, managing director at tjm investments, here at post nine and john chief investment strategist at asset management welcome to you both. >> thanks. >> tim, thoughts here? we had a bigger session earlier, but, you know, it's quieting down throughout the week amid worries outlined >> i'm on the same page as bob this is a very constructive week for markets, especially with the 10-year yield from 3% to 3.10% as effortlessly as it did. three weeks ago if that happened, the market would have been blasted hard. i'm comfortable with the fact we're going to be at 3%. we're going to go higher we're -- even though we're in a rising interest rate environment, it's going to be gradual, and we're still historically at very low rates >> what's a little bit higher, and at what point does it matter to stocks? >> well, it will always matter a

little bit, but i think the key is the macro economy is still improving because if the macro economyfu economy was not improving, you could not see the russell continue to lead the market how it is. >> john, thoughts? >> my thoughts are very much as what he just said, and what we heard bob and dom express. market is climbing a wall of worry, but i think with the market's message is to investors is we are normalizing, reflating, areflat i -- reinflating, a good thing, the outperformance of cyclicals and defensives and small cap strength, that's a very good sign and the fact that we've got the highest yield on the 10 year or close to that since 2011, well, we're still way off from the 5.3% that broke the back of the markets in the last cycle. >> what areas do you think are stretched right now? what's expensive >> well, that's a great

question, i mean, if, look, if the russell gets up to 1640 or 1650, we could get overbought. if energy were to continue to rally, i really don't see a 90 or $100 in the future for oil prices >> john, would you agree with that, especially, i mean, are these -- sidewaas well as areas done, are you backing down from that >> i still want to be exposed to small caps, mid caps as well we are market cap agnostic since the beginning of the year, so we buy equally on the asset allocation basis, large, mid, and smalls, but when it comes to what's over, i'm worried about energy, energy stocks have been running up, and yet you've got u.s. producers, many of them, especially the frackers, producing an oil that's actually costing them >> yes >> rather than putting money in their pocket that's problematic also, if we see any kind of a

break in opec, we could see prices of oil start to reverse where they have been going, we think $80 would be a lot to see on a a barrel of oil based on what technology's done to production >> if we get a couple good trade headlines, right, deliverables, is the market coiled for that, or have we already priced that in >> i think that's going to be a further positive if anything, you had negative banter on the trade front this week, and the market shrugged it off, although, we had hours where it sold off, but generally, acted much better than it has with negative banter a month ago. >> like you said, if this happened six weeks ago, reactions are different. that tells you about the market these days >> yeah. >> guys, thank you, tim, john, talking about the stocks as we head into the final hour here. emerging markets, of course, having not such a good week. the etf down 3% since monday what's driving the drop?

>> it started with argentina and turkey and spreading stocks in brazil down 7% this week on track for the worst week since may of 2017, and in mexico, the eww etf down over 5% on pace for the fifth straight negative week for the first time this year, and analysts say in this environment of higher rates, stronger dollar, and rising oil prices, emerging markets will continue to stay under pressure and they say the countries that are under real danger are those that rely heavily on external debt financing and are seeing inflation pressures build. take a look at this. argentina, inflations rate, above 25%. turkey's rate around 10%, and then it comes down considerably with india and philippines between 4% and 5%. if further data shows consumer prices rising or continuing dramatically, that could further derail this emerging market story, which has had a

tremendous run over the past two years, up 42%. kelly? >> wow that's a big run seema, thank you let's bring in joyce chang, head of emerging markets and credit research at jpmorgan welcome to you "the wall street journal" points to the 100 year bond in arg argenti argentina, boy, do investors look foolish now, fundamentals deteriorated so much, but he said, maybe you do better holding given the coupon than a u.s. treasury. how bad is it for you? would you invest in argentina? >> the overall emerging market selloff here is overdone i'm very impressed with the corrective steps arian gene t tee -- argentina has been taking the president came out issuing a number of policy moves like talking the to the imf the central bank took corrective action, reducing fiscal deficit target as well i think the correction here is a bit overdone >> on argentina specifically,

right? how do you incorporate other areas of the world like brazil >> we added to emerging market fx overall broadly a few days ago, and i think the fundamental outlook for emerging markets -- remember, it's much earlier in the cycle. you're only in year two of the emerging markets' recovery cycle. the countries have reserve buffers at this stage. it's growing above potential right now. i wouldn't take one week or even less couple of weeks out of context. >> feels to me like emerging markets have been reshuffled over 10 to 15 years. names we talked about in the bricks hay day, it's like every couple years that group changes. what's most attractive to you right now? >> so we're looking closely at the election calendar. brazil, mexico, and turkey, election calendars contribute to some ongoing volatility, but the oil exporters, higher oil prices actually help emerging markets because net oil exporters so some of the countries that are oil exporters look attractive

now. we got back from the china summit seeing good opportunities in china right now the growth actually surprised us >> careful, they don't want to be called an emerging market, but a global superpower, joyce, just to be clear, but you'd -- if that is where they still fall >> well, that's where they fall in the indexes >> well, joyce, thank you very much for joining us today, joyce chang. with just about 45 minutes until the bell, dow is up 4, s&p down 6, a mixed day and tight range today. >> that's true you've been watching it all day. >> all day thanks for the reminder. >> 45 minutes to go. we're just getting started will the u.s. strike a trade deal with china? is the president taking the right track in negotiations? a former ambassador to china is with us straight ahead plus, my brain breakthrough -- migraine breakthrough, what it mines for patients and investors in by te.

we return in two minutes ♪ cfa charterholders have proven themselves by passing one of the most rigorous exams in the world. demand the best. demand a cfa charterholder. cfa institute. let's measure up.

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welcome back, royal wedding is tomorrow. are you watching it? tuning in? >> uh, yes >> no? >> we'll see >> depends on the time it is tomorrow morning, and wilfred frost is in windsor outside of london covering it all for us, near the lego land of windsor where they built a mockup of the royal wedding last week, dozens of people and hundreds of manpower hours you're in actual windsor or lego land >> reporter: actual windsor. the scenes look fake, but they are not, they are real carl, no tip that your response was not as negative as david faber's. he was not watching it getting to the point the wedding is estimated to cost $45 million. most of which on security, and the queen picks up the tab this time around more than she did in 2011 for william and kate's wedding because this one is not a state occasion, but she should

be able to afford it here's a look at her finances. the queen's total personal wealth is estimated at $490 million. that stems from an investment portfolio of $150 million, and large amounts of property like an estate in norfolk and one in scotland she does not own windsor castle or buckbuckingham palace they are a trust as well as the jewels the queen can use them, not sell them most of the queen's income comes from the crown estate, which she also does not own. it has a value of $16 billion, stemming from large amounts of property in london and 2 million acres outside of it. she receives the sovereign grant each year, roughly 15% of total income generated by the crown of state. last year, that came to $58 million. the remaining 85% goes to the u.k. government. she also gets around $20 million per year of income from the

private pool of capital that existed for the sovereigns since the 1300s. similarly, her son, charles, the prince of wales, has a source of income at $20 million per year from the cornwall. it's up to the queen and prince of wales how to disperse that income among their children. that's the finances, guys. let's get back to the occasion despite david and carl's lackluster enthusiasm for it, let's talk numbers we expect hundreds of millions of viewers globally, perhaps as much as half a billion for context, 350 million tuned in for william and kate, and 750 million charles and diana in the 80s. i'm delighted to be here in windsor outside the castle >> this may surprise you, wilf, but the neighbors have a few people over, okay, i think i'm going to go, and i'm going to try to make scones >> very nice >> for the occasion.

i need tips, and i need clotted cream or something similar to it i couldn't find that in the grocery stores this morning. >> reporter: well, i don't know much about making scones, myself, i have to say, so i can't help you there, but i'm looking forward to details of the party. focusing on the ceremony, that's what the day is about -- >> ask your mom. >> reporter: i want to hear details on the party and alcohol and fun as well. >> she'll have helpful suggestions for me >> reporter: she will. i'll get a recipe and bring it over and bring over british c confectioner's sugar >> how close will you be >> reporter: so the ceremony, the procession after the service will be about two and a half miles going right through windsor great park and various spots along there. there's cameras throughout we will not miss a moment tomorrow, but myself and the "today" show team is up above the castle itself.

i was using a fact that the castle's 100 foot above river level. on the western edge of london, it was a defense back built in 1070 by william the conquerer, but "today" proved how easy it is to get above the castle because the set is higher than the castle walls we're not on the set at that moment, i'm afraid, but if you tune in tomorrow morning, plenty of coverage from up there. >> i have a feeling there's no bad live shot around there gorgeous >> that's true >> reporter: it really does beg to believe how amazing the setting is, and the weather is fantastic which is rare. >> do we ask about goldman and blankfein? it's not the right time, right place? you're there -- but, you know, the times says he's going to leave in december, and you know curious if you had a few cents on that. >> reporter: i'm not up to speed on that development today, so i will leave you guys to discuss

that >> all right >> reporter: if he's leaving, that would be a shame, but the queen of windsor castle is very much staying she's there because the royal standard is flying at the top of the tower now. >> excellent >> wow >> thank you, wilf, great to see you, thank you for sticking around for us. >> reporter: of course, any time >> you carried out your promise. see you soon, man. meantime, just about 40 minutes until the bell dow, again, in a tight range, affected by boeing, by the way, up 9 points, s&p down 6, and shares of campbell's soup down abruptly today what was in the earnings release that ended up sinking the stock. >> and trade tensions, coming up, joined by max baucus, former senator and ambassador to china, at he wants to hear from the white house about trade still to come on "closing bell.

welcome back, campbell's soup dropped on unexcepted news that the ceo is stepping down after seven years at the helm, reviewing vast array of brands, and the stock is down 11.5%, carl >> nordstrom is down, results enough to overshadow better than expected earnings, and the stock is down 10%. >> wow >> tough day for retail. >> initial reaction was 7%, still sinking today, not too much encouragement

35 minutes before the bell see if the dow stays positive, s&p negative by 6, and nasdaq negative by 23 a breakthrough treatment for migraines, that's coming up. 10-year climbing this week, as you know, hitting the highest level since july of 2011 what you neeto kd now as we go into the final half hour of trade. ♪ you and me together ♪ through the days and nights. ♪ i don't worry ♪ 'cause everything's ♪ gonna be all right. ♪ no one, no one, no one ♪ can get in the way ♪ of what i feel for you.

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hello, everyone, i'm sue herera with your news update at this time. the suspect in the santa fe high school shooting has been identified as 17-year-old student, and the photos confirmed by kprc tv, a local tv affiliate and by local police officials. president trump lending support to an administration effort to boost job prospects for former prison inmates, the effort spearheaded by his son-in-law, jared. >> working together, we can restore the rule of law, keep dangerous criminals off the streets, and help former inmates get a second chance at life, and a second chance that many of

them will really succeed at, if only given the chance. >> the washington post reported president trump pushed the postmaster general to double charge the rates to ship packages, and postmaster general resisted president trump's suggestions in private conversations in 2017 and 2018 explaining to him the rates are set by contract. that's the news update this hour kelly, back downtown to you and carl >> you'll be watching, right, sue? >> oh, totally totally. >> with hat or no hat? >> no, you have to have the hat. it's not the same without the hat. and no fascinators has to be a proper hat with a 4 inch brim, and the reason i know that - >> i thought a fascinator was a hat? >> no, they are not allowed. they are not allowed at wimbled wimbledon, and that's how i found out about the 4 inch rim it's another story >> i learned more in the past 15 seconds than i learned all day

>> let's stay focused on the clotted cream. thank you very much. enjoy. >> you too, kelly. joining our exchange today is focusing back on the markets, rob morgan here, and keith bliss, and rick santelli at the cme in chicago keith, i want to start with you. it's about rates overnight, hitting 3.12%, or something like that. >> right >> it's significant this week, and yet the markets just -- stock market's shrugging >> in the area where the market is deciding which way it's going to go. there's a decided turn to today's trade, low volumes, the feel of a summer friday trade a little bit, and 10-year backed down from the higher rate, and it's coming in, so the equity market is trying to see a unite at 4 or 3, and stay at 3, that's the sweet spot for equities, else with the small caps, and you see that in the trade today, look at the russell 2,000, hitting an all-time high again, and you heard me talk about that before, that's the most

important index to reflect, u.s. economic activity, the larger indexes churn on earnings and things like that, so you're right that the 10-year yield and yield curve at large is really what is important and key to the equity markets right now >> rick, you did good work on the 10-year, and the importance of hanging around 3, but hanging on 3 on a closing basis. what do you think about it right now? >> yeah. you know, considering that we gave up some ground, you know, down 5 on 10s and down 5 on 30s today, but both of them are up 10 basis points on the week. listen, the 10-year without a doubt is the benchmark i like to watch the thirty year, but any type of close above 3.03 is significant, and most likely will continue the pattern of slowly working our way higher in yield, and i underscore slowly they lost the 3.22, i wanted it to close above if both

maturities close add that those levels, it's exciting with respect to the upside, but i caution one of the biggest stories we've all heard from our sources is how short big institutions are in the long end space. hedge funds in particular. i think that we need to be really aware of the idea that they will be a safeguard as rates go up. we'll recycle some of those large short positions into short covering, and bids may mitigate the upside, but i still say all lights are green, not only for interest rates, but for the fed because as the yield curve spaces out a bit, that keeps powell on point. he wants to grab as much rate insurance as possible. >> rob, are you looking at the small caps like our guests earlier were suggesting? small caps, energy, thinking, hey, maybe they look overvalued? >> kelly, i still like the small cap space, and i think that it's going to be really good

potential trade war insurance, if you will, because if we don't get the situation resolved with china, the big cap multinationals are going to continue to be buffeted, so i definitely -- and keith talked about this earlier as well -- that even though we just hit a record, small caps look strong here >> leads us to financials. jpm back below the 50-day, citi below 70 can we sort of push that off a bit because of the summer friday feel or not? >> i think so. remember, also, small caps, largest constituent group in the russell 2,000 are financial companies. you see the rallies, and, i mean,ing -- i mean all the fundamental drivers, echoing rick's comments, slowly move rates higher, dollar keeps stronger, mid-level and smaller level financial firms will perform well they should perform well, and the big banks catch up as a result >> and, rob, anything to add on that >> well, yeah. i think we're finally starting

to see the beginning, anyway, of the steepening of the yield curve. that's going to help banks and there's, of course, been a lot of talk that maybe with the financial regulation we're going to see, i hesitate to call that a merger boom, but maybe some more activity there that will help lift financials higher, and that's a sector i like as well >> rob, you said, you know, maybe we would start to see that spread widen, but if anything, isn't the concern that we have been through that phase already? that's what the early recovery was about, and now it's later cycle and that comes back down is it weird for that to get wider at this point in the way you suggest it helps the banks >> i mean, it's -- to talk a little bit more in depth on that, you know, the spread between the two year and 10-year is nearly as tight as it was back in 2007, and, of course, that was the great recession of 2008, but i don't think it's

necessarily weird for that toe happen, just kind of the way this cycle -- this is a very long cycle that's had its highs and lows >> hey, kelly, kelly - >> yeah? >> weird what's weird what's weird is hundreds of billions of dollars of negative interest rates all over the world, central banks $16 trillion of securities, yeah, weird is everywhere in the fixed income space, so i guess the yield curve steepening at this length of an expansion cycle could be the least weird thing of all >> right exactly. guys, thank you very much. rick santelli, rob morgan, and keith bliss. news alert on trade talks with china let's bring in eamon javers. >> reporter: larry kudlow spoke with me, briefing us on where we stand with chinese negotiations. the chinese have come to trade and optimistic and the president's optimistic they'll get a deal based on these

negotiations that are going on right now. he also said that that $200 billion figure we saw mentioned in the "new york times" last night, the chinese said the deal is on the table, negotiating various sectors on the table, not going through details, but areas are easier like energy and farming and financial services, but there's a lot of things going on he said the number's a good number in terms of $200 billion reduction in the trade deficit between the united states and china, and i can tell you, kelly, separately, i talked to a senior administration official here at the white house earlier today, and he laid out some of the elements of the proposed deal coming together behind the scenes here, and one of the elements is u.s. control levels of foreign firms in china. remember, restrictions are right now up 49% of what u.s. firms can own in terms of percentage ownership of companies in china. under the proposed deal, that

would move to 55% in three years, and in some years after that in the outyears, eventually, to 100%. that would be applied under this deal to a number of different sectors, which one specifically are under negotiation, but financial services, i'm told, is very likely to be one of the sectors that's included in that deal, so that would be open up the opportunity for u.s. financial institutions to wholly own at some point in the outyears financial institutions in china that's something we've not seen before, and that is under discussion as part of this overall deal that's going on, but kudlow talking to reporters moments ago striking an optimistic note despite pessimistic rhetoric from the president yesterday who, himself, said he was not sure these negotiations would be successful so maybe something changed in the past 12 hours, kelly >> yeah, may be. eamon, thank you i read on corn, they think they can get $150 billion figure if they needed to on corn

>> corn. chinese tariffs on u.s. ag >> right if they ramp that up big time, so one place to watch, perhaps, iowa would be happy. >> that's for sure that's an important state. just about 22 minutes to the closing bell, dow's up 20 and s&p down 5 the cbs board approving that motion to dramatically cut voting power of the redstone family we'll get details coming up. a breakthrough in migraine prevention we have more on that story, meg? >> kelly, as much as 36 million americans suffer from the debilitating headaches, but now there's a new way to prevent them we'll tell you about it and what it means for the drug industry back after this.

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ythen you turn 40 ande everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough? should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah. schedule a complimentary goal planning session today with td ameritrade. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

welcome back to the "closing bell," check on the winners in the dow, and boeing is up 2.25%, leading the way with an 8-point gain that gives us, oh, about 50-60 points on the dow, and weaker components are the reason we're not doing better, but turned positive by 20 for the blue chips, and caterpillar and nike up a better than 1%. fda approves a new drug from the prevention of migraines.

meg? >> the drug is made by amgen, and it's the first of the new class of medicines called cgrp inhibitors, designed to prevent migraines, and maybe a huge relief to the 36 million americans who suffer from the e debilitating headaches we talked about what this means for her patients >> everything else we've used up until now was something as designed to treat a different problem whether it's blood pressure medicines, antiseizure medicines, that we pulled into the migraine world >> now, one commentary meant to prevent migraine is botox. that was approved for prevention in 2010 and draws more than half a billion in annual sales from that indication. they expect this drug to be a moneymaker as well although, the price is lower than many expected 575 a month, or less than $7,000 a year though, amgen is first to market with this new class of medicines, it's not alone for long

similar drugs are in development at eli lily and other pharmaceuticals so hopefully there's more to choose from coming soon, guys, back to you >> meg, i guess the cost is a question directionally, will the industry be able to argue this is moving us towards more reasonable cost structures >> definitely, carl. it's interesting to see a price come in below what folks expected we've seen that on a few drugs recently, and we asked michael if that was a sign of the political pressure or sign of the times, and he said, yes, possibly, but we've seen lessons from drugs priced too high and were not reimbursed from insurers, so they are going a different direction with this one. >> tricky thing here is there's no cure, meg, this is just a treatment. you might need it forever. >> that's right. you might have to take this once a month for a long period of time, and in clinical trials, reduced days to two days for patients who have migraines for 14 days a month. >> have you suffered from one?

>> no, i'm lucky, thank god. no issues. have you >> no, looks debilitating. >> we have colleagues who struggle with it, and that many instances a month and you have to work, yeah, very difficult. thanks, meg. >> thank you >> possible treatments for those migraines. 15 minutes to go and 15 points higher on the dow right now. >> all three major averages on pace for a losing week up next, talking about what contributed to some of those orfot ulben hacod i ste r next week. we're back in two. (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play (bell ring)

welcome back, art just mentioned there's a billion to sell on the bell today it's a big number, but it is an options expiration day so not fully reflective of that in any case, positive by just about 14 points in the dow, 12 minutes to go. joining us is david darce with the acronym of the week. >> a shoutout to new york university, all of their graduates, 186th commencement today. i'm in nyu purple. i think with all the talking going on, you got the fed meeting june 12 and 13th, opec's 147th ordinary meeting june

22nd, and you've got the june 12th punitive meeting from the latin word for thought, okay, which we hope will take place, okay, and you've got the conversation with europe, the three ms, macron, may, and merck. that's the acronym i put forth, talk the first t is time versus price. if you take a look at this, kelly, take a look at this - >> i'm looking, but squinting. >> okay. the blue is bull markets, and the red is bear markets. >> more blue than red. >> you can see the average bull market lasts nine years. we've done 8.8 years it's quite ageing, however, the average is 450% gain, and we've only done 350% >> all right >> so there's still upside on price, but time is getting late. okay

the a is ascending, three things are ascending, the dollar, oil, and interest rates, and i think that's why you want to basically be in banks and in energy. the l is lofty valuations and lofty expectations we've talked about on your show, carl, in the morning, with our dear friend mr. cramer - >> of course >> talked about the profit gains in the 20% neighborhood that can they be maintained or not? lofty expectations that may not be met, so that's one thing you want to watch out for. >> k is for kelly. >> loft evaluations in the tech sector and chinese tech sector, some of the big b-a-t stocks very high valuations the l -- k, is korea >> oh. >> let's hope this goes forward and produces a good outcome. you want to quote ronald reagan,

ronald wilson reagan, you want to quote, trust, but verify, and then the s is strong economic data there are a total of 13 data points that i'm going to rattle off very quickly >> no, you're not. >> okay. >> no, you can, okay go ahead, go ahead >> okay, chicago pmi, phillie fed, empire state manufacturing, factory orders, okay, industrial production, lean economic indicators, all right, housing prices, housing starts, the housing confidence, the nahb, the small business -- nfib, independent business optimism. you've got consumer personal income, personal consumption, okay, that's 12, and you have jolt -- job opening layover turnover survey compared to the number of people unemployed. you have more people unfilled than are unemployed. this is a good thing i think that's why the market

can continue to lift short term basis >> what happens, mr. darst, when the pope comes out and criticizing what you and we all do here? >> when who comes out? >> pope francis, you saw today, the vatican has put out a document with a lot of harsh words in it for banks, for people in finance, for the world sort of capitalist system, and i'd like your reaction to that >> kelly evans, happy and proud to be a roman catholic, and i want to wish all our muslim viewers today a good ramadan the pope is infallible in faith and morals, but not in the stock market market, okay keep that in mind. i do believe if i were whispering in his ears, i would say make women priests okay >> you have to go there of what we said?

make women priests all right. >> let husbands have wives be priests. i know that's a bit much that's a step. >> that's a big step >> it's a bridge >> it's a far bridge >> i got four brothers, and i don't even have any sisters, but pope francis, he's got this latin popular streak in him. i like him >> very much so. >> when he walks in the room in the morning, people say pope francis, good morning his holiness when you walk into a room in the morning, people say, jesus christ >> you're always full of surprises, that's why we love you. thank you very much for joining us >> thank you very much for having me. >> puts the live in live television >> carl, have a great day. >> we are coming back in a moment with the closing countdown. >> and after the bell, we are talking trade with max baucus, former senator and u.s.

ambassador to china, how worried he is about tensions keep it here, you're watching cnbc first in business and catholicism worldwide.

there they are, your neighbors. you like them. they always remember everyone's names. your kids love swimming in their pool. you like them. if you forget your trunks, they'll loan you some. they have a section in their stock portfolio just for pool stuff. everyone likes them. you like them. but you'd like them better if you made more money than they do. don't get mad at your well-liked neighbors. get e*trade. welcome back to "closing bell," dow up 11 points, s&p down 6, and pretty tight range friday as markets try to escape the week with mild losses.

time now for the closing countdown. few things to watch. russell record highs for the third day in a row as investors come back to small caps again. keep your eye on that going into next week, and industrials, big part of the story today with boeing, and really, making the difference going into the close between a loss and gain for the dow. energy, which was shooting for an 11th day up, not quite able to get it with wti just about 71, and bob pisani wrapping up the week interesting threads in today's action >> the important thing is, and i said this in the last hour, three sideways is a big victory. we are flat on the s&p 500 we had a little bit of weakness late in the day on some of the semiconductors, applied materials disappointing, but sideways when you have these kinds of issues, when you have inflation issues that are a major thing, when you have trade issues, very much unresolved, we don't know what's going on with nafta right now, and that's good news take a look at other charts.

the dollar up almost every day this week. that's usually various parts have issues every day this week and still sideways up eight, nine points, sitting near the highest levels since 2011, and that is a good sign we're not moving down on that. the problem? the market believes inflation's going to be very, very moderate. that's the way the trading action is. they are not trading like the 10-year is going to be at 4% number two, the market believes there's going to be some kind of trade deal, that there will not be a trade war and somehow all trade issues resolve themselves, so there is a -- i think, there's a real risk to the upside right now, and i think that the -- the community could be very easy disresuupted quick if the nafta things falls apart, and suddenly, we get particular issues with china, and, finally, north korea, they don't seem

very worried about it. it's fallen off. the vix is at 13 essentially, i mean, that's a really low number given the risks that are happening. you know my rule, carl, we've been together a long time, don't yell at the stock market is the main rule, saying you're not thinking about this in the right way, but the market is acting like a lot of things are going to go right right now. >> right what's happening in financials today? a little soft beggiven the over picture? >> the 10-year yields going up this much only takes you so far. the moves up in rates, it's very, very modest still in terms of impact on the bottom line for the companies, but they need more and better loan growth. again, we saw meh loan growth. commercial lending is fair, auto growth loaning has been going down for the banks it's going the other way because of the slight uptick in the sub-prime auto loan business,

seeing higher default rates. it's a mixed picture 1% on average is not very good >> that's been a concern since the -- that's the closing bell here, ringing the bell at big board is azul, and nasdaq, it's livexlive media. >> thank you, carl, and welcome, everybody, i'm kelly evans, and this is how we finished up the day and week on wall street, dow with a gain of two points, watching that shake out here, but the dow and russell -- the big companies and small caps are the only ones in positive territory today. the russell up a point or two to 1626 the s&p and nasdaq negative on the day. s&p shedding a quarter of 1%, 2713, and nasdaq down more than .33 of a per1%

a record close for the russell 2,000, on a string of them this week as people invest in what they call pre-war insurance in that sector and energy space as well we have michael santoli, he's in the box this time and evan newmark is on set and nancy tang tangler, chief investment officer. welcome to you all biggest winner was nike and cisco laggard earlier in the week m may ma macy's the winner for the s&p, and campbell's down 15% with the ceo leaving. mike, let me just start with you. what do you make of the way we've finished off here and the record runs in the small caps? >> it's fascinating, kelly i mean, we're obviously idling on a market wide basis last four days has been a tight

range, more or less held your ground this week although there was noise around buying yields, and dollar getting stronger. that's not good. variation, though, even more extreme weakness in consumer staples, already the worst group, you know, energy just breaking its streak, so i think there's a lot of kind of selectivity within a very static market right now, and that's not a bad thing, but the small caps, they tell a net positive message, obviously, domestic economy is fine, and it's kind of good right now, so take comfort in that, but i push against the idea that small caps making a new high are any kind of special great signal how the overall market does. it's a catchup move after multiple years of lagging, i think. >> yeah, and, i mean, mike's pointed this out before, evidence -- evan, but small caps doing well happened in the early part of a bull market and not in the end, yet, i don't know, that's why it's interesting,

very weird time in the market. >> in the previous hour here, a couple of the guests said, oh, small caps look great, i like the small caps - >> some said there was value >> as soon as they were in agreement that small caps were great, probably not so good, i was like, it's been a great may for me and only great because of two things, energy and, two, i have my short position it's not ten years old, but a few years old, finally on my last chunk of that, i got like 40% of that left it's break even on that. >> yes >> it's only taking two and a half years to break even on the last chunk >> doing better than other active managers on that front. >> yeah. we've not talked about the bond market, but the bond market in long term bonds or mid-term bonds, it's been a losing year for you. i don't know, bonds today and prices were up, but what - >> what do you think the effect is >> hard to say there's a lot of safety in short term end of the market, so sub

one year, bonds, doing fine, money markets earning 1.9 to 2% yield now on the money market funds. >> wow >> that's a nice return. long end, probably down 7% or 8% >> oh. >> year to date. i don't know that's affecting the market i still think it's a macro market, and i think trade issues are what counts right now. >> we'll come back to that nancy, how about you how are things set up now, and what parts of the market do you like the best? >> we're overweight industrials and overweight technology, and i think you saw today the industrials don't care so much about trade tensions at the moment >> had a nice day. >> and boeing. i was in washington yesterday, hearing the right things, i think people are cautiously optimistic i met with our friend, larry - >> mr. kudlow? >> yep i think the market is poised to finish the year higher, certainly, but we took 5% of our equities off the table in january. we were way overweighted, and 5% in bonds so we are super underweighted in bonds and kept

small caps constant. it's great, the recovery, but it's not a bull market yestert.y >> when you say, you know, you don't want to be, you know, in the bond space right now, is that going to stay that way for some time? >> it could. i mean, we are short the index, our duration is much lower, and we're adding nonkcorrelated asst classes, so some cat bond funds, and some just different nonror la -- noncorrelated asset classes. we are still down, but not much, modestly, less than 1%, but it's a victory. >> absolutely. i want to mention what happened with the chips today, applied materials had its worst day since 2009 the stock fell after lowering its forecast for this quarter's earnings, for revenue, stock down more than 8%. they also lowered sales projections for the semiconductor business the company's forecasting 7%

growth for the current quarter compared to expectations of 13.8%, just about half of what the market was looking for the stock was also downgraded to neutral by goldman on weak guidance, and other chip stocks down too like micron, intel, and skyworks, mike >> yeah, i mean, obviously, the market is not forgiving for any companies that radically lower guidance for the coming quarters because that's been the big question exactly is the fundamentals decelerating from here that's understandable. lamb research down 3% in sympathy on the semicap equipment side of things it was not, though, a washout comprehensively in the group, amd upgrade, so i think it's too early to say, okay, semiconductor cycle is turned and it's no longer a leadership group for the overall market, but clearly becoming more selective as the overall market exactly is >> yeah. the chip market is one of those weird animals that i never -- i was the head of a tech banks

group, and i never really understood it. it's very hard to understand they trade very much in sympathy they are supposed to, you know, it's supposed to be 100% barometer, and if you believe what they are telling you, get out of the chips i'm not sure that's the way the world works, but historically, that was the way it was supposed to work. i think to mike's point, the market will be very unforgiving now in terms of growth expectations because a lot of analysts jacked up expectations. >> yeah. >> you see companies like, you know, like campbell's soup is weird to use, but they bought a lot of companies to buy growth, and when the growth is not there, the stock is taken to the cleaners that's what's happening with campbell >> a number of companies looked at spinoffs, divestitures or shrinks because the payoff is not there. what do you say about the downward move in the chips is that a barometer? >> historically.

the one chip stock not down is texas instruments. that's the most modest exposure to smart phone, and so we have diversified away from smart phone. it got out of qualcom awhile ago. >> apple >> they disappointed >> you own apple even if you don't like the smart phone >> you can, you can, but we'll see, i mean, we were in here pounding the table at $89 a share, and it's had quite a run. >> nancy amazing presence on all the major things it's staggering. i mean, she called the top on the chips, called -- >> you did this to me last time. >> come on, i'm being tough. i'm being hard >> it's not accurate i make plenty of mistakes. >> i know, i know, i'm being unfair, but -- >> did you say you own nordstrom? >> i do, but it was top in the country last year, 4.5%. >> brave for opening a department store

>> i was going to say, stick with it, we have to move on, but sticking with it >> so tired of it, but, yes, hanging in there plays a role in the portfolio. we also own ibm, there, are you happy? >> at least you're honest. >> of course i am. >> most active fund managers are not that honest. >> no, no, numbers tell the truth, so, yeah. >> i want to talk about trade for a moment today marked another round of talks between u.s. and chinese trade officials on the heels of china's foreign ministry denying reports they would cut the trade deficit with the u.s. by $200 million. what should they do to deescalate trade tensions, if that's the goal, is former senator and u.s. ambassador to china, max baucus, thank you for coming and joining us. >> you bet, thank you. >> the first question is, do you take the u.s. at face value here do you think they are really after, let's call it a $200 billion increase in our exports to china

>> well, i do think that the president may have made that request, but i also think there's not much grievance to the argument china's going to give in. china just can't we don't have $200 billion to sell to china, whether it's agriculture, whether it's planes or industrial goods. that's the problem >> although, it sounds like there's some areas, as i mentioned, i read corn could go from almost nothing to $150 billion. wouldn't it be great if you could send all the corn to china, get rid of the ethanol machine date, senator, and everybody's happy or everybody's unhappy? >> yeah, well, it's important to remember that the united states and china very much need each other. $600 billion in trade between the two countries, and president xi wants to resolve this he does not want instability or a trade war, and donald trump, i think, frankly does not want a trade war either because that

causes economic instability and make it difficult for the '18 elections or in '20. the problem here is we're going after legitimate problems with china in the wrong way tariffs do not force china to change its industrial policy or the 2025 policy. they are just not going to change the way to change it, frankly, that is the -- >> go ahead. >> the way to change china, work with other countries work in concert with the western europe and japan, because otherwise china will divide and conquer. >> the only thing to say on that front, look, they are not off the 2025 goals, that's one thing, but hearing reports they will open up the financial markets more, and that's a big deal letting you go from less than majority ownership to majority even to full control and jpm moving already to set up shop there >> yeah, well, it's, you know, it's -- it's -- sometimes what they say is not what you get for example, there's talk about

opening up financial services maybe eliminating equity caps on jbs, but in china, they are always very slow they say they do stuff, but it takes a long time, and sometimes it just does not happen. also, in the financial sector, talking about securities, many other areas where financial sector could be opened up in china, but they are not talking about that the real danger i see here is that president trump is mixing three areas which should not be mixed. number one, zte. that's an enforcement action zte violated the law they should be prosecuted. the other is legitimate trade issues with china. they are real, no doubt about it do not mix enforcement action of zte with trade issues. add to that, foreign policy matters, kim jong un, maybe him and trump in singapore, who knows, but the danger here, all this is in president trump's mind, we have no idea what he's thinking, and mixing all the three together - >> listen -- >> the problem is that - >> i can - >> he may give in on trade in

order to get kim >> right, and, you know what, is that the worst outcome for the world? if all of these are basically pieces on a chess board, i understand why you want a lot of maneuvers in order to pursue america's interest, final thought on that? >> well, i think it's very dangerous because we don't know what's in kim jong un's mind or in jinping's mind, in trump's mind, and we can't trust kim, and it's hard to trust xi. hopefully they'll go to singapore and get a deal that's a big, big order. >> fair enough thank you, senator baucus, appreciate your point of view on this >> yes >> quick reactions, but, mike, first, to you. >> yeah, obviously, it's all about how we can define progress or victory when it comes to the talks with china i think the markets would be perfectly fine with essentially

no deal if it met no additional punitive or aggressive measures on either side i don't feel as if the market is really hinging on they're being progress, so i think it's one of the things that the market does not attempt to price in in any detailed way until we know exactly what terms they are considering. >> you know, i think there could be a win-win for everybody, and that would be if someone in the white house, maybe it's larry, canconvince donald trump that trade and our relationship with china need not be a zero-sum game, and if trump could just come out and say, you know, we've been having a lot of haggling, blah, blah, blah, i realize it's not a zero-sum game, we can be winners -- >> he can't negotiate from that point of view, can you >> it's not a negotiation, but changing the mind set. as long as you think it's a zero-sum game, there's a winner and loser, and china will not allow themselves to be the loser.

>> absolutely fair >> i don't think donald trump will allow himself to be the loser. >> he doesn't have to, it's a win-win, everybody's a winner. >> yeah, no, i think, look, we have allies and that's an important thing for us to reenforce and stress i don't think china has trade allies they are a bully that's an opportunity, but i think we're just going to get modest movement around the edges. everyone declares victory. we'll move on and fight another day. >> yeah. i feel like they spread money all over the world just buying influence and allies and people to isolate the u.s >> the u.s. historically has always had that influence. >> yeah. historically >> it's donald trump alienating the european union - >> i'm not talking europeans >> i'm talking in terms of working with your allies you know, tpp was a great example. he - >> that was a mistake. >> that was a mistake. >> that was a mistake. >> may yet revisit it. >> there you go. >> we got to go, nancy, great to see you in person. >> great to be here. >> nancy getting beat up by evan >> now i feel bad for the rest

of the day >> never >> a lot more is ahead on the "closing bell. straight ahead, energy surge, talking about the big run, and the players in the sector that still have room to move plus, how one entrepreneur is trying to fill tens of thousands of jobs. the pope's big warning for capitalists. this is the "closing bell" with rkto eham e w ve frothne yo sckxcnge. rever. ♪ ♪ you and me together ♪ through the days and nights. ♪ i don't worry ♪ 'cause everything's ♪ gonna be all right. ♪ no one, no one, no one ♪ can get in the way ♪ of what i feel for you.

welcome back battle over cbs rages on company postponing annual shareholder meeting after voting to approve a special dividend all in effort to delude the voting power of the biggest shareholder, redstone, so what's next our special correspondent, william cohen, followed the drama closely. he joins us now, and, look, david faber suggested yesterday this could take months in the companies, there's a lot of uncertainty in the media business right now what happens here, do you think? >> well, that's right, kelly this is definitely now moved into the delaware courts, and that could be months you know, it's, obviously, very upsetting for the managements of both companies to sort of have to face this, but i think they've been dealing with cbs

and viacom have been dealing with this since last august when shari redstone resurfaced this for a second time. they are unprecedented developments it's not great, especially for cbs shareholders seeing their stock price go from $70 to down around $50 it was below $50 after the judge's ruling against cbs yesterday. so it's definitely a crazy, unprecedented, it's not helpful, and it's going to be a long while before this gets resolved. >> william, it's evan newmark. i have, i guess, two questions here's the first one regarding the shareholders, cbs shareholders, there's been no secret for years about what you're getting when you buy either cbs or now in the case maybe viacom and cbs you are getting a company that's being controlled by the redstone family that's been that way for years do shareholders really have a

right to complain that the redstones have somehow mucked up with their value here? >> look, i think that the shareholders -- minority shareholders of both companies have put up with some nerve for a very long time, i don't think management of either company, particularly was enthralled to having to deal with sumner on a regular basis, but he was the mogul, the guy who put it together, the entrepreneur taking the big risks i think shari pushed management teams to their breaking points, not just the management teams, but the special committee of cbs's board of directors that voted unanimously against the deal i think at some point you have to ask yourself, is she doing the right thing for the non-redstone shareholders, and, frankly, just look objectively about how the market is voting when the cbs stock goes from $70 to $50, there's a lot of pain out there. >> right, but what happens - >> i think the time is right to ask that question. >> so cbs said, okay, we'll

dilute the stake by issuing more shares and take you from 80% to 17%. if that's not going forward, what other options do they have if they feel like she's the problem? >> well, if that doesn't happen, then i think all bets are off because shari will probably want to take some revenge, and i can't say i would blame her. that might be the end of the part of the cbs management team. that could be a change of board seats, dramatic change in board, board composition at cbs, and shari could then merge the companies, and end game for her is to sell the companies together for someone like verizon or at&t or apple or facebook or amazon or something, so that's obviously the end game she's trying to do here to make it easier for the redstones to get out of this. it's not going to survive for the next generation of redstone ownership in my opinion. >> mike, we've watched -- seen

reports, of course, verizon was interested in cbs, the ceo pushed back on, but nevertheless, if she succeeds in this, moonves is fired, gets the payout, and the companies merge, i mean, is that -- i -- is that the worst outcome for shareholders if the thing gets sold >> it's really unclear exactly how bad an outcome that is relative to what they've already suffered, so, in other words, if there's value in the two companies that looks cheap enough, they both have been going down, you put them together, and for one thing, what we don't know is if shari redstone has watched markets' reactions to all of this and maybe had second thoughts about what exactly makes the most sense or how it's treated as a combined company, and, of course, national amusements said yesterday, we're not just going to go out there and recklessly slam the companies together. there's no preconceived idea that said, we're in a world that 21st century fox seems to have made the determination his company does not have proper

scale for the new world at $70 billion in market value. together, the two companies are shall smaller than that, so it's totally unclear where they would fit. >> wow quick word >> the thing is, i got to get moonves's pr agent here. i mean, can you imagine if someone was the -- was it independent ceo of fox, okay, and basically tried to take the company away - >> for itself -- >> the track record, cbs is a middling size media company. >> share price performance is impressive for a company that was supposed to be a nonperformer viacom was supposed to be thenex it's not facebook. it's not a company of the future it's a media company that's barely been holding on, and les moonves paid himself $70 million to $100 million a year playing stick-it-up with the redstones i give that to him they are good.

they are really good >> thank you very much for joining us >> sure. >> i would have loved to have got a word in there, but it's hard >> it is hard. we'll bring you back and we'll do it again. >> thank you >> appreciate it, nevertheless, have a great weekend >> my pleasure energy etf rallying for a tenth day, and fast money traders say how they trade this power play first, though, discussing whether fears of artificial intelligence killing jobs are on target or overblown. that's still to come let's stop talking about diversity, and actually be more diverse. as investment management professionals, let's measure up. cfa institute.

cfa charterholders have proven themselves by passing one of the most rigorous exams in the world. demand the best. demand a cfa charterholder. cfa institute. let's measure up.

it fell to 1.71 million getting unemployed benefits, lowest since december of 1973. the job market is in upheaval with jobs unfilled and robots joining the workplace. harley, talk for a second, i mean, labor market is so strong, you know, companies having a hard time ramping up getting workers, so what effect is that creates in terms of technology they may not be looking for? >> well, i think that they are having a lot of challenges, for example, with people here who are working on visas they have to start looking at training they have to start looking at doing work domestically onshore because of the challenges that they are having, and there's a shortage of skills companies are grappling with that, and they have to focus on serious training

>> so the visas are the tech visas? seasonal workers >> right so a lot of companies are looking for stability. if people can't get visas renewed, they have to go back home, leave for india, for example, that's a major concern for companies, so they are looking to do work here in the united states more and more and for trading and to hire full-time people because that's posing a big challenge but you mentioned earlier -- >> technology, right -- go ahead. >> you had mentioned about automation, is that, you know, kind of good or bad, so, you know, here's what -- first, what is artificial intelligence artificial intelligence is basically programming machines to do things that people would normally do, so the bad news is you're replacing people with machines that's the bad news. the good news is you are creating far more jobs, creating innovation >> right >> that's going to create opportunities for everybody. >> so what's the single stroke to help the most right now

do we need to bring more people into the work force or what? >> well, i think college training in i.t. is really important. i think that where companies normally had their pick before, now more than ever, they have to train people, but, you know, to get -- an example would be the horse and buggy. so when that was replaced by cars, people lost their jobs, people who took care of horses, took care of the buggy, but automation with the assembly line with cars created a number of new jobs and created all convenience where people can drive, so that's what it's going to do. a good example could be if you are driving to the airport and you're running late for a flight, because of artificial intelligence, in your calendar, it'll show the time of the flight it'll have a gps your phone talks to you and says, you're going to miss that flight, do you want me to reschedule another flight, for example. >> bring it on i love it. hey, like they said, sell the place, bookkeepers, created a

new industry harley, thank you for joining us >> thank you >> harley lippton on the state of the work force. on wall street, the biggest move in russell. all week, they are the headline grabber setting record highs since late january dow up 1, and nasdaq and s&p weaker nasd nasdaq, in particular, fell 26 points, chips and industrials having a rough go of it. time now for a cnbc news update >> hello, everyone, this is what's happening at this hour. the texas governor said the school shooting suspect pagourtzis had a shotgun and revolver whose father owned them legally. he's been booked in the jail, and it's been called the most heinous act in the state >> it's with a heavy heart i

confirm as of this time, there's been ten lives lost and another ten that have been wounded a boeing 737 operated by state airliner cubana crashed on takeoff from the international airport in havana with 105 people on board. the plane came to rest in a nearby farm field. a military officer said there appears to have been only three survivors who are in critical condition. russian leader putin says he does not believe military grade nerve gas was used against former spy skripal because he would not have survived that attack skripal was released from the hospital earlier today that's the news update at this time kelly, back downtown to you. see you monday >> see you monday. thank you very much, sue fast money traders talk about the rally, and the pope

taking another shot at capitalism we'll tell you what he's saying and whether he's got a point still to come. the digital divide is splitting this country. we have parents who are trying to get their kids off of too much social media and computers, and then we have parents who would only hope their children have access. middle school is a really key transition point, right. the stakes start changing. students begin to really start thinking about their futures. what i like about verizon's approach is that it's not limited to just giving kids new tools, it's really about empowering educators to teach in different ways, and exposing kids to more active forms of learning. giving technology is not a total solution. teaching technology, now that is.

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i'm sure you noticed at the gas pump, but oil climbed 15% over three months, and that's pulling energy stocks higher too look at the etf, xlf, up for the 6th straight week, first time that happened going back to, oh, just september, joining us now for more on this, "fast money" traders, mike, trying to figure out if money justifiably higher or just kind of riding the wave of exuberance right now? >> well, i think there's certainly parts of it where it's absolutely deserved. i mean, think about the oil services companies, names like haliburton, i liked for awhile, up 25% in 90 days, but this is servicing mostly north america and, of course, we're booming north american oil production. fundamentally, a great business to be in, regardless where oil prices are it's long north american enp business continues to develop fields which is good for halliburton. >> a way to play it without worrying about the economics of

the production david, what about you? >> well, i mean, we have a report out that the integrated, right to buy them right now, but there's a lot of operating leverage occurring in the, you know, in the midstream, if you will, that allows them flexibility in the back half of the year looking at returning cash to shareholders, really in the sweet spot now, and the opinion is the integrated are the way to play it. >> michael santoli, your thoughts >> i think the sector has gone from being very much neglected and disliked earlier in the yea to chasing it in the short term. only way you get up six straight weeks and xlp up ten days in a row before today is people grabbing for it. so i think it can blossom into a trade with a different basis, earnings estimates go up, all the rest of it, but it's ripe for a pause, if nothing else, for a while. >> newmark, when are you

selling? >> selling a little bit. >> selling a little bit. >> every week. selling a little every week, but overweight in it still what happens with energy is if you go back -- look at the 10-year chart on this stuff, you know, a huge runup in 2006 and 2007, and literally came off a cliff, popped up, and it's still versus over a 10-year period, it's still pretty low, so, in the scheme of things, it's not up big yet >> all right, guys, thank you, micha michael, david, thank you. much more coming up on "fast money" at 5:00 p.m. eastern, 22 minutes time the vatican is calling for more financial regulation and stronger ethics in the markets the impact that decree could have on investors is next when "csing bell" comes right back your retail business.y every paf so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer.

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welcome back, pope francis out with a major document this week, castigating global markets and calling for financial regulation, the document references the '08 financial crisis saying in part the financial crisis developed the occasion to develop a new economy. more attentive to ethical principles on the contrary, the response seems at times like a return to the height of econism. they call it a ticking time bomb waiting to explode, and we are

joined by steve grasso and reverend james martin editor at large at "america" magazine by phone, reverend, starting with you, what's the significance in terms of the church of the release of this kind of document making the statements about capitalism >> reporter: we-- >> caller: it's a statement of teaching, put out by the doctrine of the faith and human development, and it's a reminder, i think, after the financial crisis that, you know, the only bottom line or the bottom line for corporations need to be more than just profits. it needs to be human dignity and the human person, a restatement of social teaching in the catholic church. >> steve, do you feel it's an affront? >> i do. reverend, it's a pleasure to be on with you, and i am a devout catholic, a roman catholic, and a lot of times it feels as if the message from the pope or the catholic church sort of hits a cross roads. this could have. said back before the financial

crisis i feel as if the years after the financial crisis, corporations have done more than enough or have done a lot to compensate and to really level the playing field, and i think that if this was written maybe 10 years ago, i would say that there's a lot more work to be done, but the impoverished in the world i think shrunk tramatically, and the financial markets are the pivotal reasons why, and this stuff is mangled up in with corrupted countries and where that wealth is placed. >> and, reverend, isn't it true that it really, you know, took kind of pope john paul ii to embrace capitalism a little bit more than. the church is actually historically antagonistic about it from the late 1800s and people in cyclicals then look at the youngest people, attitudes about capitalism are already negative and socialism positive is the church risking

reenforcing the wrong message here >> caller: no, i don't think so. i'm a working grad and i spent six years at ge, so i come from both sides capitalism is the most successful distributor of goods and services, but it's not perfect, and as we can see from, you know, the many poor people in the world, and what the pope and vatican are trying to do is just remind us that, you know, rather than -- it's not an attack, but it's saying, look, it's not perfect, needs criti e critiqued like any system. >> right, but wouldn't the message be stronger, reverend, coming out there saying, you know, pointing to what happened in venezuela right now saying the world cannot be blind to the risks of socialism or to the risks of people consolidating control under the guides of trying to do something positive. in fact, it seems, again, reenforcing the message of, well, it counts more if, you know, come out this and claim to have good intentions or ethics than it does to look at the kinds of systems that deliver those results. >> caller: oh, i don't think he's saying that at all, and i mean, the catholic church talked

about socialism and communism many, many times, and it's time to look at capitalism, and i think, again, you know, you look at the number of affluent countries and say something is out of whack, and one thing out of whack is not putting humans in the center of things. it's a critique. capitalism is not perfect. that's one of the things the pope needs to say and is saying. >> steve >> well, if you look at affluent countries, i'd think even the quote-on-quote poor are rich by standards around the globe, but i do agree with you, kelly i think that as a roman catholic, when you hear the pope say this, this is a message, reverend, that's been around for years now, and i don't think the rhetoric changed, and i say that with all due respect to the pope, but it can be said in a different he's ousting the rich, and that's why that church has survived for so many years and centuries.

>> reminded of the late michael novak, and there's devout catholics who would strongly, again, dispute this messaging and just say, it's not so much that -- capital is neutral, right, a capital is neutral. it's about -- the faith itself teaches it's about the heart of your intentions, so is there a way for the church to make this point or the pope to make the point, or is the message, again, we're going to see headlines tomorrow saying -- you know what they say, they say, catholic church, pope francis rails against capitalism, and there's a danger in that, don't you think? >> caller: there's a danger in misleading headlines, but by the same token, if we're all devote catholics, the church said for many years, we have a preferential option for the poor, and that's not in quotes there are poor people, and the church is on the side of the poor argue, as i have, capitalism is the most efficient system, but it's not above critique. su >> sure. >> caller: it's not just a system, we have a part in it,

corporations make decisions every day how to, you know, sort of -- what to focus on basically, and the pope is saying we can't just focus on profits. we focus in on human beings and especially the poor. >> i think just to - >> you're right. go ahead >> kelly, last comment i think when the focus should be from a catholic telling what i feel personally is that the poe k -- focus should be on other countries that have corrupt leadership keeping their poor poor, and that's the lid on poverty, not the free countries that have the financial market systems that are open. >> right >> open to everybody to achieve what their financial goals could be >> you acknowledge the -- no one is let off the hook. >> of course >> you can't point to any system and say, oh, i'm good because i'm part of this >> right >> no one's off the hook >> caller: right >> that's the danger >> we got to go. >> that's the danger >> guys, thank you very much we'd love to get more into it, steve, reverend martin, appreciate it, thank you >> caller: you're welcome. coming up on "fast money"

bitcoin a bust this week although tom lee predicted a boom what went wrong next hour, but musk laying out a vision for the boring company phil lebeau has the details, phil >> kelly, who wouldn't want to beat traffic by zipping around in a tunnel at 150 miles per hour well, there's some people in l.a. who are saying, oh, i'm not rehaa good idea. we'll explain when the "closing bell" returns. market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? this endangered species is getting help from some unexpected friends. these zebra and antelope. they're wearing iot sensors, connected to the ibm cloud.

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. elon musk is laying out his details for the decision of the bore company phil lebeau is here with those details. >> the information we got does

make it sound interesting if they can dig one of those tunnels they're proposing outside los angeles. they basically talked about their vision for the boring company and what it might do they want to build a 2.7 mile basically proof of performance tunnel it would have shuttles that would carry people up to 150 miles per hour the rides just $1 is what elon is saying, and he says he has the talent the spacex that would help make this dream a reality >> if they did what you saw there, and some of those resources were applied to personal mass transit, there is the potential for significant breakthrough that can only happen with public support. so we hope -- if we can ask for your support, that would be great, and i would really appreciate it. >> you heard at applause there about 700 people who were in

attendance there are already some neighborhood groups who have said, we're not sure this tunnel is a good idea they're suing the boring company. they want to stop the project before it even happens they are questioning the tunnel's plans kelly, this gets to the heart of perhaps the biggest hurdle that the boring company will encounter. it is going to be lawsuits in terms of people who will say, what's the environmental impact? i don't think this is a good idea under my backyard as this goes forward -- and by wait, elon musk never talked about how much this is going to cost or who will pay for it. i will be curious to see if they can get any of this built, this extended 2.7-mile tunnel they already have a shortened tunnel they're building under spacex, putbut a longer one, i'l be curious if it happens >> phil, we all were he's a professor at the

engineering school we want to talk about the safety issues here. they're going underneath l.a. and california, and do people need to be worried about what's going to happen -- can the ground handle it >> of course homeowners should be concerned any time you're tunnelling, the geologic conditions can get quite complicated and there is the chance for movement at the ground surface with that being said, i will say we have many years of experience with tunneling in urban areas and even seismically interactive urban areas like seattle >> right can you imagine, if there is earthquake risks in california, i'm sure they don't want a trigger here what kind of standards are you talking about? >> i don't think the risks of triggering earthquakes is really a concern, but the real risk is these tunnels crossing active

faults and being able to handle the displace mments of those faults during the earthquakes. >> so if you're elon musk and the boring company, we just saw him there trying to appeal to stakeholders should they be right to let this experiment go forward? >> i think so. when we think about los angeles, the traffic is a problem it's environmental, it's a health, it's an economic problem. so i'm very encouraged that people are thinking about solutions. >> but will they know if they cross one of those fault lines is it pretty clear >> well, and that's a real problem. of course, seismologists and geologists have mapped many of the faults in the los angeles area, but one problem is that we don't have them all mapped so, really, until they start boring and are collecting that information during that process,

we won't fully know. >> well, that's a somewhat scary thought. professor ben mason, thank you mike and evan, would you want this oven under your terrace yard >> if i was able to get from jfk to the upper side of new york at 150 miles an hour, i would put up with a lot of tunnels there already is a lot of infrastructure the problem here is these projects take a tremendously long period of time. they basically -- they're almost impossible to get them done in the democratic society >> sure. and we've seen that even with trying to expand the subway system in new york city. >> an exit in long island becomes a 10-year project. >> we don't know who is funding this mike, what do you think? >> we don't know who is funding it this is the place to do it if you can do it. i'm also a bit encouraged that most of the pushback is coming

from issues of safety for the most part as opposed to saving some insect or people saying, i don't want this thing near my house. i alluded to the second avenue subway cost a million dollars, took a decade or more and it was 3.5 miles long >> 3.5 miles and $5 billion. >> it was terrible, i know more retail earnings we're going to look ahead to those results right after this h. with ingenuity, h. technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. with dell small businessout your technology advisors you get the one-on-one partnership you need to grow your business.

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welcome back as we digest nordstrom, there is a plot more in terms of retail earnings on deck for next week it includes names like kohls, target, lowe's, best buy what are you watching? >> honestly, it's the week before memorial day coming up. it feels a little summery today in terms of the pace of trading -- >> yeah, not the weather >> no, not the weather in terms of the pace of trading. what would your jolt be?

>> jolt? president trump gets two thumbs up, spoke with president xi -- >> it's a little premature >> i thought it was may 22nd >> no, i think it's june 12. i take your point. there is a lot more than retail earnings evan newmark, mike santilly. "fast money" starts right now. new york city overlooking times square tonight on "fast," it was the wrong consensus. falling short of expectations of the greatest bulls and one was none other than tom lee. what does he think will happen next tom will be here to tell us what plus, it is rare that an earnings report causes a battle at the white