Transcripts For CNBC Closing Bell 20180213

That vix up at 25. Weve got our crew standing by Courtney Reagan watching the stock staging a comeback Steve Liesman on how it could hit the gdp. We begin with bob pisani amid new warning signs. It kind of feels like its quiet today, and yet if you look at it on an historical basis, this is a pretty active day. The one to one advancing in decline so were not getting any weird breadth signals here the volume is lower than its been in the last several weeks by historical standards its high but compared to the last two weeks, actually, its pretty quiet. The volatility, the vix is elevated but moving in a very narrow range thats a sign of Little Things settling down. Kelly is absolutely right about the dow. 280 points from high to low. That would have been titanic two weeks ago and yet today were watching, oh, okay, thats not that bad overall i think the important thing is if you look at the dow, about half are up, half are down just what i said, one to one advancing to declining stocks. Caterpillar on the upside, and some banks on the upside utx, which has been a poor performer recently some other stocks to the downside finally on the vix, were rolling over into another contract tomorrow. This will be the february contract that were rolling over tomorrow the vix is elevated. The cash is higher than the futures contract this is called backwardadtion. Well roll over tomorrow its still elevated. The front month contract is still a little elevated. But not nearly as much as we saw just a few days ago. This is another sign the market is pricing in still some nearterm volatility but they dont feel its way out there. Certainly not in the next month or so that will be elevated like this back to you. I get backwardation and contango confused. I just like saying it. So do i. Thank you a number of stocks are gaining ground that they lost last week. Its been a really wild week, of course. Plus, more than a week for the market with the big spikes and big plunges. On friday, though, is when the s p 500 hit its intraday low you can see it here on the chart. Stocks have bounced back nicely since. The s p 500 itself is up about 5 from that friday intraday low when it hit 2532 while mixed today, all 11 sectors have bounced back at least to some degree from friday three of those 11 s p sectors have gained more than the broader index since that friday low point. Thats the point were watching. Technology is really leading the bounceback as it led the way last year. You can see technology up by more than 6 since those friday lows Consumer Discretionary right behind it, up 5. 6 and then, of course, youve got materials and industrials also up higher by more than 5 since those february 9th intraday lows now, ten stocks in the s p 500 have gained double digits since their friday lows. Take a look at this csra, thats the top performer since that point. Up more than 36 from that intraday low on friday under armour class a shares up almost 27 remember, that did report earnings today we got other top performers, which include micron technology, cboe and amazon. Thats one we often talk about, up more than 11. 5 since the lows hit on february 9th whether these are true buyers or some Short Covering, it just shows you the long path weve traveled since just friday kelly, back over to you. Courtney, thank you we may be off those lows but still trading off the recent highs. The question is, whats the impact on the economy . Steve liesman is reporting on how this drop could impact main street. Economists beginning to consider what lower stock prices mean to the economy and some are shaving off points for less wealth effect from stocks. Others saying it doesnt matter that much. The wealth effect is the tendency to buy more and save less when stock and real estate values rise. Estimates are people spend between 3 and 5 cents of every dollar from the windfall from their portfolios the question is, do they stop spending when the portfolio declines markets surged by 4. 5 trillion the past six months but are they freaked out by the loss of 2 trillion in a couple of weeks . Goldman sachs things the wealth effect may have added a point growth over the past year. Now with stocks not as rosy, goldman thinks that half point could go away. There will be other advantages as far as bigger paychecks because of tax cuts but americans could look at the 2 trillion and forget about the 2. 5 trillion in gains. Thank you very much lets talk more about this and bring in a couple experts from wall street chris heisey with bank of america. There they are how have you been . Ive been good. What do you make of this sudden surge of volatility and what are you doing about it . We exposed a structural issue in the market and i think we stretched the fabric on the upside and downside in a short period of time i think it created a big scramble to adjust value risk for strategies and portfolios. I have to say some of this typical this is very typical, this price action. Its trying to gradually claw back some gains it had given up for equilibrium. Yeah. There was a component that had to be technical. I would look forward and start to apply what does this higher volatility mean . Is the market sending us another message . Is it, do you think i think theres a message in that were beginning to see higher volatility in Interest Rates. Thats really the center of gravity when it comes to pricing assets that was occurring for a couple of months. Started in Early September so that traveled through the market i think what we have to watch for now is a couple other things related to stocks. First quarter earnings comparison year over year are going to be difficult. We had a Strong Quarter in the First Quarter 17. Here come the 18 numbers. The market will smell that before it happens. I think weve already seen noise in the numbers and thats likely to continue. I had to reread your notes. I thought you were talking about automobiles. You said this is kind of like torque what do you mean well, i mean, this, perhaps, is a new term but a torque correction is one that includes velocity, you know, the speed of the decline, force is the magnitude of the decline, and ultimately what happens during it, and thats rotation. We havent seen significant portfolio rotation in quite a long period of time. The last time we went through an episode similar to this was the midcycle correction. Its been a few years before that and what were pointing to is just two years ago we had significant fears of deflation when oil collapsed twice thats the last time we had a 10 correction all of a sudden two years later now were all of a sudden worried about significant inflation to come . So, the point here is that this is a torque correction its technical in nature but it does have legs one thing everyone should worry about is price stability one that measures is inflation to suggest were going to all of a sudden start to switch on a dime to an inflationary consequence, i think, is a little premature i would say this, kelly, to your point. Were going to get data points perhaps wednesday that look a little dicey as it relates to, yes, the speed of inflation is coming but well also get data points because of secular moves, technology, other things, demographics that will push price and stability down over the course of months we are in a regime shift, though we are there and portfolios will have to reposition themselves. A lot of headlines suggest this was about Interest Rates and the rate of increase of the tenyear, especially you have some fed officials still talking tough, even with this volatility. Theyre saying, we still have to stay the course and raise rates. Is that good or bad for the market i think its going to create additional friction. It is a concern. What im interested in is, yes, the increase in rates has risen, but we never had this much debt in the system. Weve never had a fed thats been so involved in markets now pulling out, withdrawing there goes a 25 billion on the sell side coming and 75 billion more to fund the deficit this creates a very interesting situation, given the fact a lot of banks and traders in the markets in Interest Rate futures have stepped away because of the volcker rule im concerned about Interest Rates and im concerned that expectations are just, hey, what just happened is behind us lets go back to the normal. It seems to be consensus that makes me a little nervous. Thats too easy. Speaking of too easy, tech has been such a winning trade. Tech and financial, some of your winning positions. Are they still or do you change that now no, no change there i think really we almost had the opposite of 2000 if you remember in 2000, tech got wildly overvalued and the rest of the market was below and tech had to catch up and it had a big drop in this case, since the First Quarter of 2016, tech has had a big catchup rally if you looked at the prices of some big tech names relative to their growth rates, they were undervalued relative to the market they caught up now to the rest of the market. And i think its really a twoway street now tech and financials should be performing and i think a lot of sectors of the market will underperform. Before we go, what kind of mixture . Are you changing it all . Going more to the inflation plays and intrasensitives or what are you doing here . This is a phasein approach here were going to continue to move toward cyclicals, more towards values it is a market of stocks from this point forward its going to start to gather some speed here. Youll see correlations actually even drop a little bit lower its going to be about profits, profits, profits and well have these small torque corrections as violent as they are, well have a few before we can clear that the bottom is done. Good to see you both. Chris heisey and liam dalton weve got 49 minutes left in the trading session. More volatility. At the magnitude is not as wide as it has been lately. So, a 280point swing for the dow today from bottom to top were up 20 points right now wul see what happens with 50 minutes to go. A lot more ahead on the closing bell. Next up, the woman who warned against shorting volatility if the markets had listened to her, the last week for the markets would have been very different. Today she has a new warning. See what it is next. This is the closing bell on cnbc, with Bill Griffeth and kelly an le omheew york stock exchange. [fbi agent] youre a brave man, mr. Stevens. Your testimony will save lives. Mr. Stevens . This is your new name. This is your new house. And a perfectly inconspicuous suv. You must become invisible. [hero] ill take my chances. Welcome back maybe youve heard of new reports that claims a whistleblower has come forward to shed light on a scheme that manipulated the volatility index, known as the vix, that cost investors hundreds of millions of dollars a month. Bob pisani joins us with that story. This alleged whistleblower has written a letter to the s. E. C. Saying vix is subject to potential manipulation i spoke with this whistleblower a short time ago he would not identify himself to me only that he had been working at buy side firms for 20 years in senior roles the crux of his argument is that vix derivatives, futures and options, may be subject to potential manipulation the vix is calculated using options in the s p 500 one month out, 30 days out lets assume the s p is at 2600 and options are priced between 2800 and 3,000 normally far out of the money bids and puts, say those at 1,000 or 12,000, way out of the money, theyre no calculated because theres no price to them theres no bids. This whistleblower contends the only time we see bids in these far out options is just before the settlement on the options contract hes asking to investigate to find out why that is actually happening. His contention is that some traders go long vix futures and put in bids and offers way out of the money and profit when the vix goes up just before settlement now, this whistleblower emphasized he had not observed anyone manipulating the market directly only to have observed irregular patterns in the markets that impact investors he says he himself has never manipulated the vix. His letter to the s. E. C. Has serious error twice referencing the cme when it should be cboe his attorney said it was a clerical error and does not help our credibility. Back to you. No, it doesnt. As we continue to dig into this story. One investor who did call the vix as the next big short a few months back. Leslie picker with more on that. Big short meaning it was a popular short. I spoke with quadrattic capital manager in november four months before the markets started their wild swing she focused on the risk on what she called a crowded trade and shorting volatility. Were in a low yield, low return environment some investors have been forced to figure out other ways to generate yield in their portfolio. A common theme, the best sharp trade out there is selling vol the problem is everyone is doing it now i like to say the big short out there is people who are short vol. That doesnt mean vol is going to spike hugely at any point, but it has the possibility to because so many investors are short volatility. That trade was turned on its head a week ago after the vix more than doubled in one day she spoke with us earlier today on cnbc and talked about the liquidation of an exchangetraded note that trades as an inverse to the vix with ticker xiv. It was the thing everybody was in that was the best short, meaning the xiv, to be short that because ive always said its going to zero. It did happen. It took four months to play out. So, where might the next trouble spot be . Davis says Corporate Credit. I think the private credit markets is something to keep an eye on the last shock we had in credit was in january 2016 when oil fell so aggressively i feel like weve had the shock in vix where vix spiked and varies etns we were watching i think watching credit spreads as we have the fed reducing Balance Sheet and what thats going to mean. Davis says there was little in the way of contagion in securities that crashed last week that may be different if something happened with Corporate Credit guys leslie, thank you for more on this, lets bring in our own mike santoli hes with us here at post nine we have the head of derivative management let me ask you this. Whats your version of what happened here. Was it manipulation or was it a trade that just got too crowded, as nancy davis suggests . In my opinion, this is a trade that got too crowded ill speak to manipulation claims later what i think happened last month is a very small example of what happened on black monday of 1987 black monday of 1987 you had portfolio insurance. These vix products, they were short vix futures. As vix futures rose, they were forced to buy more and they moved the market against themselves to me its a simple story of, one, too much leverage you had a product that could be wiped out in a single day which is easy from low levels of volatility too much leverage and too low volatility. So heres my question, all that being said about this the volatility products, is the only reason stocks declined because theyre programmed by algorithms or whomever to do this to say, when the vix goes up to 30, its a sell . Was there any other linkage that you can tell theres a very indirect linkage, called vol targeting. At those programs arent forced to sell everything in a single day. Some programs say they want to target a certain volatility to their portfolio. If they feel the market has become more volatile or measure volatility to be higher, they may, in turn, liquidate some portfolio to match that new target volatility. Importantly, most dont look at the vix. They look at the actual moves in the stock market and use that to determine what volatility will be Going Forward just to built on these points you have these products that we should remind people, were meant to mimic the inverse of the single day move in the vix this was essentially engineered in a way that in this environment was going to implode and skid off the road. The other thing is the general market backdrop, which was very compressed volatility, assumptions of compressed volatility continuing and a relatively small market decline creates an outsized up move in volatility its sort of the pebble in the road high speed and you do a spinout. That seems to be what happened. Were these instruments doing what they were supposed to do or did something break down they were, largely speaking, doing what they were supposed to do theres a lot of talk about what happened after the close of regular trading on monday when the vix continued to spike and you had everyone knowing or assuming that these instruments were going to continue to force buyers and teetering on the edge of having to liquidate. We pretty much knew cramer said it, it was going to 50 Tuesday Morning. Where did it go Tuesday Morning . 50 you knew it was going to happen it created this talk that there was a raid and some hedge funds tried to help this along if they could. Its totally different from these allegations that the statistical calculation of the vix is somehow manipulative, which i think remains to be seen. Why did the stock market have to go down, especially go down 1600 points like that . Youre asking why the stock market went down on monday look, you came out of very low volatility regime. 2017 was incredible low volatility low when its low, people raise their leverage indirectly people perceive that risk is low and take more risk as nancy davis earlier point out. I think it was ultimately a function of too much leverage, volatility that was very low and ultimately this is an unwind ill ask you the same question were these instruments doing what they were designed to do or was some did something go badly wrong here they did what they were designed to do but the important distinction is they got too large relative to the market they had to trade. In other words, these markets had to rebalance their holdings at the end day. If vix futures were up, they had to buy vix they got so large, shorting volatility was so popular, so profitable that these products became too large relative to the underlying market. I think that is really the story here, is that they moved the market against themselves. Would you short the vix now i think volatility is higher now. I think it is a better risk reward now. To bet against it correct to short voluntarily stilt batia risklimited fashion no naked puts thank you. Good to see you. Mike, well see you later on closing bell as well 36 minutes left. The dow is up 44 but you missed some volatility. Pretty good volatility the dow opened down 180 points and then suddenly up 104 were somewhere in the middle. Still ahead, an expert weighs in on a potential multibillion dollar deal in the Health Care Space which could face serious regulatory hurdles. Billionaire steven cohen under fire in a new lawsuit. Well tell you why one employee has accused the firm of, quote, structural sexism. Were back in two. Everyone has a thing. That binge watch over the weekend thing. That back from the dead or robotcowboy thing. Or maybe its watching satisfyinglysatisfying things. 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Speaking of which, materials and energies are in the red. Energy down a third of 1 . If we wait long enough, we might have three people on the closing bell exchange. There we go. We got it. Joining us we have teeg sanders, steve and steve grasso. Welcome to all of you rick, let me start with you because what is going on with Interest Rates we talked about going over that key 2. 9 level we have a big Inflation Report coming tomorrow morning. Now it looks like the market is backing off those rate expectations and youre right. If you look at this being the sixth session, six, weve had in aid closing yield range from 2. 81 to 2. 86 load looks like it will meld into that will range it has been that crazy while the stock market has weve had bigger intraday swings but the closes really do tell me theres a whole lot more going on in the fixed income space as it tries to get its gps than its normal response to a softer volatile equity market not that many years ago you get that type of volatility in the equity markets, you would see serious downward pressure on rates. Even as they sit down 4 on the day where twos are up three, we flattened the curve six to seven basis points today if you look at the way markets traded in years gone by, you would see such a significant drop in the Interest Rate level, which does lead to tomorrows number of course, well be paying very close attention, the year over year, top line and core. It will all be very significant. Very quickly, on the issue of volatility and orders and this whistleblower, i dont know the specifics but i will say one thing, electronic trading generically in all products is prone to many bids and offers that ultimately get canceled thats the nature of the beast. Yeah, that inflation number will get picked pretty clean tomorrow morning when its released we just had a derivatives trader on who said if anything at this point he would think about shorting volatility but within reason not going to go nuts if youre buying nonvolatile markets and all the sell side banks lever themselves to extremes, when we first started that, the collapse because it was 301 leverage, based on assets now we have this volatility leverage if you reverse it, you get what we had last week now, if you go back to it where you have these risk parity and nothing that anyone can understand to the layperson, but where you have these risk analysis coming from a black box spit out when you buy and celek wits, it becomes a hopeless state for short increments if you see the unwind, we were so oversold, the rebound effect creates a buy of equities. Thats what weve seen in the last couple of days. How long before it gets triggered. Above 2700 in the s p, well see if were in an overbought status to see where we level off. About 36 points shy of that level. Given how much weve talked about the different programs or wall street that may have contributed to the opportunity, have you seen that opportunity, some that were down 10 or more, still finding them here . Yes, we have. We would agree with the fact that if you did see a massive riskoff trade, you would ordinarily see the safe. Havens rally strongly. We didnt see that gold was actually down as we saw, the yields actually rows were looking right now in the small cap space, ticker oled, which is universal display corporation, its off 25, 28 from most recent highs youll benefit strongly from the proliferation of tv screens, flat screens and any smartphone device amazon, which is up on the screen, will benefit as well we think theyre still the number one play based on aws and the fact theyre expanding intelligently into areas they have their core competitive advantage which is sheer mass scale of distribution. Not a small one you want a small, you want Something Big whats interesting as far as performance basis, if you look at Consumer Discretionary names, weve had tax cuts and corporations have said this is their biggest tailwind, also to the consumer if you dont live in new york or california, this tax cut is going to be huge for you to take one of the president s words, huge so, if you look at the xly over the last five years, its only second technology. Xly yeah. Its only second in performance to the xlk, which is the technology etf. Because it has amazon in there, netflix of course so, if you dont want to make your single stock bet and worry about the risk one of these blow up, you buy the etf. For the last five years, thats where money has gone, technology and the consumer. Guys, thank you appreciate your thoughts steve, well let you get back to trading. Validity to the show, i am a real trader. We know where the priorities are, as they should be thanks. News update with sue herera. A man who set off small bombs on a new york city street and at a charity race in new jersey in 2016 has been sentenced to multiple terms of life in prison ahmad rahimi injured 30 people when one of his pressure bombs exploded in chelsea neighborhood. Rex tillerson expressing plans for the u. S. Export imimportant bank to sign with iraqs credit ministry. Much work remains to rebuild iraq and modernize its economy helping iraq create a government that is inclusive, accountable and transparent will build a society that can counter the extremist ideologies this will deal isis its final blow and demonstrate its failed ideology. In a televised address to the nation, netanyahu says Police Recommendations to indict him on corruption charges, quote, will end with nothing, end quote. The recommendations now go to the attorney general who will decide whether or not to press charges. You are up to date thats the news update this hour ill send it back down to you guys kelly, bill . Well see you next hour thank you. Sue herera. Still ahead, billionaire mark cuban laying out his volatile strategy today. Hes talking about some names hes buying. He has harsh words for apple. Plus, a potential multibillion dollar merger in the Health Care Space that could shake up yet another corner drugstore. Well explain. Stick around more closing bell coming up. Is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. I thwell wait. What did you meetthink about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back amazons been trading higher on reports its looking to become a hospital and clinics various Hospital Executives have been invited to meet with the tech giant on several different occasions to talk about amazons possible expansion into this space. Stock today up 2. 25 . Who can keep up with the am sdmr amazon news . Theyre going into health care with wait, theyre going into hospital whats amazing to me are the various businesses they go into are almost fully formed by the time they go online. Look at what they did with whole foods. They transformed the whole foods Business Model just like that and its working. Theyre doing test pilot with amazon and yet laying people off at corporate. Theyre constantly in flux that is your amazon news of the day. Mark cuban joined cnbc earlier. He was sounding off on some names he likes in this volatile market lets send it over to Courtney Reagan for a recap. Amazons part of that, too. Billionaire investor mark cuban telling cnbc the recent volatile market swings are a big buying opportunity. He bought puts on the vix, the vxx. He said not a huge position but enough to be interesting adding shares of Virtu Financial because, quote, they do highfrequency tradingle and make money off volatility. He confirmed his two biggest positions are amazon and netflix. Netflix he bought at 50 a share. Regarding the Snapchat Update everyone is complaining about, he thinks its a net positive and hed look at buying shares on a future dip. I want to show you the fullscreen chart of apple take a look at the dip between noon and 1 00 p. M. Eastern time. Cuban was dissing the iphone x saying its okay, not spectacular, which caused the shares to drop off ouch back over to you. When mark cuban speaks everybody listens you wonder you do wonder, is it something about trump . He was talking to courtney about what to do did he say anything about any judgments about whats happening with all the volatility crazy stuff so, he called into the half time report and he said, i took opportunity to buy when there were blood in the streets and he gave those couple examples he thinks volatility will continue, which is why he looked at Virtu Financial because of highfrequency trading and making money off the volatility. Those were his thoughts on the direction weve been going back and forth. We all know marks a pretty smart guy. Not one to hold back on his opinions at the same time. True. Thanks, courtney. 20 minutes to go and moving higher the dow was up 104 at the high and were up 80 points right now. Another proposed alignment that could disrupt the future of the retail pharmaceutical industry well take a look at what the deal could mean for the sector. Some call it the great bond blowup well look at whats behind those moves and talk about the impact on stocks after this. Your brain changes as you get older. But prevagen helps your brain with an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right Financial Advisor, life can be brilliant. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley two,that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at Td Ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with Td Ameritrade. Welcome back lets talk about another possible deal in Health Care Space. Drug distributor amrisourcebergen up after talks with walgreens its just the latest move in the turbulent Health Care Space. To talk about it bill smeed from smeed Capital Management and manager of the Smead Value Fund i know youre adding positions in amerisourcebergen im interested in whats going on with all these mergers, the aodd alignment with jeff bezos and the other two guys jpmorgan. And Warren Buffett. Now this one you see opportunity here, obviously, right well, theres been a pretty good pattern since the whole foods announcement when they scared everybody out of grocery, pharmacy, retail, et cetera. The stocks that got spooked by that have been outperformers to the rest of the s p even though the s p is up nicely during that time period. And this appears to, another one of these episodes. Either jeff bezos is dr. Evil or hes Richard Simmons what i mean by that is either hes cutting your throat like he did to macys and barnes noble or hes getting everyone in shape the way it seems like walmart and target and kroger and now walgreens are all getting in shape because of what hes doing bill, i, first of all, love your analogies never fail to disappointment. Still working on Richard Simmons. But were talking about major changes. When you have cvs and aetna getting together, when you have walgreens maybe deepening its relationship with amerisourcebergen, these are big, big, big bets to be making. Do you think these companies are getting themselves into the right shape by pursuing these deals . The first thing to understand is the profit the aftertax profit margin at amerisourcebergen is tiny. The old adage in other business for jeff bezos is your profit margin is my opportunity, so this whole idea that doing the things that buffet and dimon and bezos talked about are going to have some huge impact on the cost of health care, in our opinion, is fairly ridiculous. Willie sutton robs banks, because thats where the money was. The money its not just about that tieup most of the time people are just kerpd about amazon being the one to give drugs to people without the traditional channels if thats the case, thats much more an existential threat for these companies . No. Everyone thinks everything in every industry that amazon takes a look at its an existential threat because they dont make a profit in most of the things they do in the first five to ten years theyre in an industry exactly its a profitforming torpedo. They sit there and throw out Nuclear Bombs at fedex and at wa walgreens and kroger scott galloway, the guy from nyu, explains thats way more power than a companys supposed to have in the capital system. So, if youre i was just going to say, in order for there to be some sort of price discipline in that industry, somebody has to start losing money to gain market share to enforce price discipline youve hit on it dont you think thats, in part, what jeff bezos has in mind . Hes showing hes willing to lose money to gain market share to bring his competitors down, right . That would be true if what hes doing was going at the largest expenses in health care. The largest expenses in health care are almost exclusively the last five years of your life and almost over the age of 70. Willie sutton robbed banks why . Because thats where the money was. The Health Care System is way overloaded on hospital visits the last two years of your life. So, this idea this idea youre going to pool 27yearold Software Engineers with 45yearold genx bankers and are a reduction in Health Care Costs or honey in on the Drug Distribution business with small margins, thats not where the money is. Thats fair enough but amazon has made some inroads. Weve reported on this into looking at pharmaceutical licenses in different states its not like theres nothing there. My only point on that would be, maybe its good for the consumer this is also a company thats kind of focused on that. Its important to them hey, if youre a prime member, maybe you could get your drugs delivered and make it cheaper and easier if theyre a nuclear bomb pardon the phrase but if theyre damaging the competitive ability of these companies, maybe thats good. Maybe whats kroger has to do is great. Who owns drugstore. Com . Amazon does now no. Walgreens does its been shut down. Amazon keeps telling people theyre going to do something successfully that theyve tried constantly for the last 20 years. Were going to make money delivering groceries show me the list of successful people in there. Charlie munger and Warren Buffett wouldnt buy into the grocery delivery business. You see what im saying . The problem is the fantasy is way worse than the reality and what walgreens is doing is saying, look, were going to shore our business up even more. Were going to have more power and more control in our part of the business so that you cant come in and ruin me. Theyre basically doing a nordstrom strategy versus a jcpenney or macys strategy. Always thoughtprovoking. Thank you, bill. Love it thank you. Bill smead joining us im still thinking about Richard Simmons. Must be diapers. Com that amazon owns. Thats what it is. Dows up 70 points we have been in rally territory this afternoon well try to make it a threeday stretch of gains going back. The lows were the intraday friday at 1 40 p. M we have rebounded sharply from those levels smaller gains today. The nasdaq is up half a percent. Under armour looking very strong after reporting those eshings this morning the Athletic Wear Company is rtf r rk merrod coming up. Ts begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Lets get a check on some of todays market movers. Shares of online Product Distribution Company vipshop seeing a 27 jump in sales during this quarter compared to a year earlier that stock is up 7. 3 . Under armour soaring today after reporting earnings this morning. Retailer met wall street estimates on earnings, beat on revenue, saw north america sales slow but posted very strong sales internationally. They were up 47 in the latest quarter. Thats why the stock is up 16. 23 right now should we go too a twoshot . Were mi bk congacwith the closing countdown. There it is. On cnbc feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. 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And what about being able to react to the 24hour futures market with integrated trading across web and mobile . Still happy . Good. Then its time for power etrade. The platform, price and service that gives you the edge you need. Etrade. The original place to invest online. The dow up 60 points i wasnt here yesterday, clearly, so i missed this big rally we had late in the afternoon here today we had a selloff on the open, down 180 looked like we were going to see a selloff day. At 1 00 arrived and all of a sudden on a dime the market turned arounded and moved higher up 104 points all of a sudden. The ong thing ly thing is volum light. The volume is not as convincing as it has been when weve seen this volatility. The tenyear note continues to bump up against 2. 90 and pull back again its happened again and were back to 2. 82 on the tenyear yield right now. Oil, isnt this interesting, with the inventory story showing a gusher at these levels, price continues to move lower. We were in the 58 range we finish at 59 and change, which can only be good for gasoline prices as far as im concerned, bob pisani. Anything that would bring them down is fine with me. Remember, theyre raising prices for the gasoline tax in connecticut. I think thats going to be an issue in some states around the country. You notice how they do that they dont do it in november, right around election time as jim rogers pointed out one time, isnt it interesting that tax day is exactly six months different from the election day. Earnings after the bell tonight, metlife and baidu a good crosssection of sectors. And maybe well get fundamental discussion tomorrow because everybody is watching the cpi. What precipitated this, jobs report a week and a half ago, better than expected, market moves down, 2. 8 on the tenyear. Numbers will be very important on the cpi and ppi maybe well get that inflation talk back and away from the vix talk wouldnt that be nice . I think we have a ways to go before that happens. See you tomorrow, bob. We finish with a modest gain after more volatility on lighter volume more earnings, more inflation talk to get you ready for that cpi tomorrow morning on the second hour of the closing bell with kelly evans and company. See you tomorrow, kel. Welcome to the closing bell, everybody Third Straight day of gains for the major averages but smaller, more tepid ones and Interest Rates backed off the dow went out 40 points higher 24640 is your level there. Sam magnitude for small cap russell 2000s. Nasdaq up about 0. 5 and back to 7,000 level to 7,013 we went over 2. 9 on the tenyear note earlier this week. Still a big range for the dow, nearly 300 points all said and down up 104 at the highs, down 180 at the lows we have cnbc senior markets commentator michael sankchael y welcome, everybody the biggest winner in the dow today was walmart. The biggest decliner was dow dupont on the s p, under armour was the biggest gainer we mentioned its Earnings Report, up 17. 5 brighthouse financial, the biggest decliner with an 8 drop today. Mike, weve now built three days off the back off the lows of friday afternoon today was not as strong a session. It wasnt that emphatic in terms of the move. I think in its own way, i think it might have calmed people more it was quiet even down 180 at the open that qualifies as no big deal in the last couple of weeks and it was almost after three hours when the market sat there, very slowly people decided, okay, maybe this is going to be pretty orderly and ill buy in here again, you cant make any statements i think of it as like somebody has a health scare. The doctor says, hes at maximum danger we have it stable but we have to watch. Good days and bad days. Like the concussion protocol you were talking about. And i think its responding the way youd want to see it the next test is, lets see if it can trade above last wednesdays highs. Its only up about 1 or 2 from here. Charlie, youve been buying along the way, right i wouldnt say all along the way. Definitely lately. What were excited about is individual stocks are actually differently based on their fortunes you tend to talk about the market for the last few years thats been absolutely right. The markets gone up and down together lately were getting a lot of dispersion the names you talk about up and down dont have a lot in common with each other. Its coming down to are individual Companies Reporting better numbers by and large, they really are. And i dont know if we can show the sector board, but we had a little change in nature today. It was more ratesensitive parts of the market leading the way in the s p. Real estate and utilitieses and telecom and at the bam end was materials and energy i know thats still sectorspecific but it brings up what the market thinks about Interest Rates even for specific companies you like, do you have to take a view on whether were still going higher for the tenyear or not that would be the exception to what i just said. That is that sectors that go up and down with Interest Rates do move together. Weve had this view weve been right on for 18 months, the reits, the mlps, highdividend paying utilities are really overpriced theyve gotten cheaper, underperformed the last 18 months and we think there is still danger there, they can go lower. Were watching the u. S. Economy and the Global Economy we think fundamentals are quite strong the earnings will be quite robust over the last 18 months weve been overweight risk we actually flattened our position from growth being overweight to more of a neutral weight, neutral call there but we believe overall we do have to focus on the yield curve. One has to consider that the Federal Reserve is going to be moving quite quickly to catch up to the u. S. Economy, to catch up to all the fiscal stimulus that youre going to see over the next 24 months that could provide, perhaps, scotch perhaps the market overall in regard to moving quite high i want to talk about volatility broadly speaking. Vix around the 25 level. We also have whistleblower claims saying there was manipulation of those products the point is, its still higher than we were for all of last year, all of the really strong part of the rally. Is there market manipulation you want it to keep coming down well deal with the Market Dynamics which is we had the fastest correction, fastest doubledigit loss in history, at least in 80 years. That tells you the market was springloaded to have a volatility storm thats exactly what happened the vix, did it have to move to 50 no, it was exacerbated by the volatility strategies that made the tape very compressed all that is just Market Conditions in terms of who did what, were they real or fake . It remains to be seen. I dont think manipulation is at the center of whats gone on with the market themselves in terms of prices. If you look at last monday after the close, did something happen where opportunistic traders trying to push certain products to the brink i dont know its totally separate. A lot of things are getting layered on top of each other from the selfstyled whistleblower, the calculation of the vix itself can be manipulated. The whistleblower discovered a flaw that allowed some traders to post quote on s p option without physically engaging in any trading. Cboes statement to us about those claims said, we take our regulatory responsibilities and oversight of the market very seriously. Its full of misconceptions, factual errors including a fundamental misunderstanding of the vix futures and etps that is what i would believe here because this is something that this person has been saying for a while, would believe its possible not that somebody looked at the forensics of last week and said, aha, this is whats going on. Charlie, youve seen plenty of these markets in terms when different types of products have been blown up. To mikes point, if traders smell blood, they will push something and they will they will get to that outcome even you go back to the early 90s when they, quote unquote, broke the pound of the bank of he can land. Its when you sense a position in the market cant hold that everybody piles into it, right absolutely. If you look at how some of the biggest hedge funds have gone down in history, including longterm Capital Management, its when people knew these guys are long x, im going to start shorting x and putting pressure on the person who you know is long i think thats what happened here that were an awful lot of people short volatility. People saw it and people put pressure on that trade i just yes, there might be on the margin an attempt at manipulation but if you look at the actual option contracts that traded and the vix calculation, the volatility implication of that price, it shows a spike in volatility so, this is not a figment of somebodys imagination and whats your verdict when people say to you, then why did the market drop . What do you say . That is more complicated. I think a lot is because of higher Interest Rates. Warren buffett wrote a wonderful letter in 1977 about the power of Interest Rates, the gravitational force. If people think Interest Rates are going up a lot, that has a big impact on markets. 1 increase in the tenyear rate has about a 16 impact on the value of the s p if you think rates are going up 100 basis points, stocks should be theoretically worth 16 less. Small Business Optimism this morning was higher than expected in january the National Federation of independent businesses reported reading of 106. 9, expectation was 105. 5. The cited the move on congress and white house tackling taxes and regulation this is where the fundamentals you mentioned earlier come in, right . Right. Are they Getting Better is optimism higher and are Interest Rates going higher as a result of that absolutely. This is perfect evidence youre seeing a tightening of the labor force, consumption is going to accelerate on the back of that, youre also going to get deficit spending that hasnt happened when weve had such an expansion of the u. S. Economy so, thats the great experiment here to go back to charlies statement, when you have the fed funds rate at 1. 5 and if you get three to four fed rate hikes in 2018, an additional three to four rate hikes in 2019, that has a Material Impact on capping the longterm forecast of returns for equities and it also is a competing asset class, the money market fund, to equities hence, the reason why you have to be somewhat more cautious and start to move up the quality spectrum once you start to see the Federal Reserve continue to raise Interest Rates yeah. Well hear a lot more from the fed chair later this month, of course then they have their opportunity to show the markets what theyre going to do here thanks for joining us. Thank you charlie and chad. Theres a lot more ahead still on the closing bell. Announcer tim cook takes on apples shareholders in a cupertino showdown the big focus, the iphone franchise. Is it shaky or will it keep being the backbone of the company . Plus, were getting you ready for curling at 5 00 p. M. Eastern time tonight with full coverage right here on cnbc from south korea. The closing bell with kelly evans returns in two minutes mom and dad got a new car. Its not theirs. Its mine. Mine. Mine. And it always will be, forever and forever. The new rx 350l with three rows for seven passengers. Experience amazing at your lexus dealer. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back we have a news alert on afleck whats happening there thats right. Aflack announcing a twoforone stock split payable on march 16th this is going out to shareholders of record on close of business march 22, 2018 shares of aflac are up 1 in the afterhours trade. Thats odd move given the accounting issues theyre dealing with. Accounting issues, bad press, and out of fashion stocks are really not splitting anymore, especially when theyre well below 100 maybe its not a surprise. Its probably a retail stock they have kind of a big network of sales agents who may overlap with their shareholder they have the duck. We interviewed this duck. Its a fairly narrow, obscure insurance product that Everybody Knows because of the duck. Shares fractionally higher. We also have a new earnings alert on fossil. Courtney with those details. Check out shares of fossil after hours, surging this company is under 500 million in market cap. On the smaller side. But shares are up 45 after hours. We thought it was important to bring it to you. Their earnings bringing the street handily with 64 cents adjusted revenue at 921 million. Thats above Analyst Consensus the ceo says in the year to come, fossil will be a smaller, yet more profitable company. They doubled their smartwatch sale, the wearables to more than 300 million thats still only 14 of the watch category but an important growth driver as they go through this set of strategic initiatives, that includes growing ecommerce up 40 in the Fourth Quarter. Thank you fossil has been such a challenged name for so long. Four years ago it was 100 higher for stock its been a long, steady victim of the whole accessories thing i was looking to see if it was heavily short. I think all the shorts have taken their profit. 13 bucks a share with that 14 pop on those reports as stocks resume their rally the last couple of days, bonds are sinking and everyone is watching the tenyear helping us understand the blowup in bonds is victoria thanks for joining us. I know things took a step back today, but do you think yields are still on the verge of punching higher . I think they are going to move higher. If you look, we have strong fundamentals weve had good earnings. You heard one report right there. I think earnings are 14 24 quarter, up 14 . Looking higher for next quarter. You look at some other economic numbers. Look at pmi numbers, third consecutive month where all components of pmi are in expansion territory. You have increased treasury issue answ issuance well see coming. You have the opportunity for rates to continue to move higher but you have to watch the neutral rate right now the neutral rate on the tenyear is under 3 , about 2. 97 as it gets close to that, youll have increased volatility. We hit the 2. 90 mark and keep coming back down i think thats the level we need to watch im wondering, how do we gauge the market stress that may or may not happen as a result of that it tends to happen in spurts it happened this morning then the dollar is still weaker. Theres not a flight to safety bond yields, it backed off a little it doesnt feel like its not risk on risk off its not that flight to safety. The market is not telling you theres something very identifiable that will be contagion onfiltering through the system i think people are focused on chinese liquidity measures this is something people return to when the markets get rocky. They look like they might be dicey and not adding liquidity ahead of the Lunar New Year as they often do. If you want to worry about something, china is always there. Outside of there, youre right, not a lot flashing red. My favorite anecdote is the chinese is complaining on the waybo account, why arent the markets i digress. Theres not a lot of flashing lights that say, worry about something systematic. Victoria, we also and i think go ahead. I was just going on to say, i think you can look at the credit markets and see that as well theyre not flashing red now either they stay pretty well contained based on what we saw last week. If you had to say to people, that means Interest Rates are going higher and its not creating a lot of market stress, what kinds of opportunities does it create as a result . Well, i think if youre looking at the fixed income market, theres definitely opportunities there. Youre using that fixed income market for the income component to match your liabilities. Take a little Interest Rate risk off the table, do some shorter duration Corporate Bonds with higher coupons on them and you can benefit from some of this movement and also look at other areas last year in december we were talking about how we thought volatility was going to increase and thats an opportunity for people to take a little off the table and look for other places. I mean, were doing that in our covered call strategies that uses volatility, maybe looking at some emerging market opportunities. So, i think its a place for people to just reassess their total portfolio and see where they have advantages. Well see where we stand in the morning and as we move back towards those levels we discussed. Thanks for joining us. Thanks so much. For more on bonds, you can check out jeff coxs writeup on cnbc. Com. Another earnings alert this time on metlife and morgan is back with those results thats right. Its an afternoon for insurers adjusted earnings for metlife, 64 Cents Per Share net income of 1. 2 billion right in line with what the company had guided two weeks ago when it had delayed its Earnings Results in the midst of that reserve charge disclosure tied to its pension transfer risk business return on equity, 15. 2 adjusted 1. 8 total adjusted revenue, 15. 4 billion. In this release, chairman and ceo saying, at our underlying Financial Performance remained solid, the reserve charge and impact on Fourth Quarter and fullyear earnings as well as Material Weakness that led us to delay our Earnings Announcement are unacceptable and deeply disappointing. He goes on to talk about how they are, you know, really sort of focused on getting to the bottom of that situation metlife will be holding its Conference Call tomorrow morning. Meantime, shares are down 3 in the afterhours trade. Back over to you morgan, thank you the weirdest thing about all the challenges theyve had is that its metlife saying, we cant reach people we owe money to. Its a very strange daish. How many times does that happen with a company. The question is, we cant just reach people, but, therefore, we didnt reserve against the possibility well have to pay out. Absolutely. Now theyre trying to do that. Seems like ail cumulative effect of a relatively small ongoing issue. I think taking over a lot of different Pension Plans and trying to figure out those people who money is still owed to you can see the shares still nervous about all of this. Down 3 after hours. Apple shares are down 8 in a month. Coming up, find out what ceo tim cook is telling shareholders about his plans to get the stock back on track amid concerns about those iphone sales. Plus, one of the biggest names in the Hedge Fund Industry is being sued for discrimination against women at his firm. Well have those details when we come right back. No, please, please, oh shrieks in terror heavy breathing and snorting no, no. The running of the bulldogs . Surprising. Whats not surprising . How much money aleia saved by switching to geico. Fifteen minutes could save you fifteen percent or more. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Some names in the Hedge Fund Industry getting hit with a sexual discrimination suit. Its targeted at steve cohen and Douglas Haynes it claims executives engaged in a pattern of discrimination against women and unequal pay. The suit also details a toxic Work Environment where women are excluded from meetings with executives saying no girls allowed and frequently commenting on their appearances. The plaintiff is lauren bonner, associate director who said out of 125 Portfolio Managers are women and women often earn half of of men for similar work she says she was passed over for a promotion after complaining about what she deemed to be inappropriate behavior from a colleague. Shes seeking an order to stop this conduct and an undisclosed amount of monetary and punitive damages. In response to the lawsuit, point72 wrote in a statement to cnbc that the firm emphatically denies these allegations and will defend itself in a more appropriate venue than the media and said, we stand by our record of hiring women. Cnbc was unable to independently verify the allegations in the lawsuit. Cohens prior firm settled Insider Trading charges and cohen agreed to convert his firm into a family office, point72. Six weeks ago he was once able to start managing outside capital. I wonder how this affects that its also interesting because when we were talking about, are there going to be a crop of stories on wall street like weve seen in tech and elsewhere, one of the things we learned is a lot of banks now require people to go to arbitration for this so, i wonder, you know, maybe the hedge fund is not the same deal thats what makes this lawsuit so unique. Its public. Its filed in federal court. This is something that wasnt settled outside of court, at least at this point in time. Its something we actually are all able to read and get a better understanding, at least the allegations shes putting forth in this complaint about the firm whereas typically these types of things get settled out of court and never see the light of day. Yeah. Leslie, thank you. Well see how this impacts his fundraising steve cohens, that is. Under armour beat on revenue. Up next, the fast money trade on if you should buy the stock, still down 20 over the past year well head to cupertino where ceo tim cook took on a bunch of things, including the future of that franchise iphone. End thing. More checkingin or checking out things. That tripledouble thing doing it yourself or tagging a friend thing. More revolutions in the making thing. That play like a girl thing. That fourlegged friends thing. At t gives you more for your thing. More entertainment, internet, and unlimited plans. More for your thing. Yeah, thats our thing. Today, smart planning is helping the new new york rise higher than ever. As the world leader in unmanned aerial systems, were attracting the worlds best talent to Central New York. And turning the airport into a firstclass transportation hub. All while growing urban areas into vibrant places to live and work. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. To grow your business with us in new york state, some moments can change everything. You cant always predict them, but you can game plan for them. For 150 years, generations of families have chosen pacific life for retirement and Life Insurance solutions to help them reach their goals. Being ready for wherever life leads. Thats the power of pacific. Ask a Financial Advisor about pacific life. Welcome back another rally on wall street todays was a little smaller but extends the gains. Dow up 39, nasdaq up 31. It was up about 0. 5 and the best perform er another Earnings Report hitting our wires, twilio. Moving up over 6 turning in better than expected quarter loss was better than expected on better than expected revenues. The ceo is also stepping down. And when youre looking at the First Quarter guidance, it is a little mixed shares appear to be shaking that off, focusing more on the quarter that just beat twilio shares up 5. 5 . Thank you time for cnbc news update with sue herera. Hello again heres whatses happening at this hour. President trump meeting with a group of bipartisan lawmakers at the white house to discuss possible trade sanctions on steel and aluminum imports he says his administration is considering all options. Part of the options would be tariffs coming in. As they dump steel, they pay substantial tariffs, which means the United States would actually make a lot of money. And probably our Steel Industry and aluminum industry would come back into our country. Chicagos 100story John Hancock Center getting a new name the building will be known by its address, 875 north michigan until new naming rights can be negotiated. In houston, Harris County commissioners approving a multimillion dollar plan to renovate the astrodome it would include raising the astrodomes floor to create an underground parking garage and also create nine acres of open space. Thats a big project thats the news. Back to you. Where are they getting the money . That remains to be seen. Sue, thank you very much. Sue herera there. Lets get to some other big stories in our rapid recap sn were starting off with red arrows the dow is indicated to open down by 138 points. Hedge fund manager steve cohens Investment Firm being sued for sexism in the workplace. The complaint alleges that male executives at point72 engaged in a pattern of discrimination against women and unequal pay. Fed chairman Jerome Powell in a ceremonial swearingin serb money making unexpected comments he says, quote, well remain alert to any developing risk to financial stability. Strategically when you look out ahead, theres more uncertainty introduced because of that Political Uncertainty and the fact we have to Pay Attention to the details now and what the administration might do, i think thats going to increase the Volatility Shares of under armour are ripping today after the Company Reported better than expected revenues along with a dip in inventory. Its a big day for apple because it is the big Shareholder Meeting out west tim cook taking questions from shareholders. In terms of spending plans, cook telling his stockholders that apple is spending about 16 billion in cap x saying that goes to our confidence in apples future. Now positive on the session. Third straight day of gains for major averages the dow went out about 40 points higher 24,640 is your level there how about under armour, best performer in the s p today, up 17 after better than expected earnings could this be the start of a turnaround for the retailer joining us to discuss you guys are like celebrities down here youre walking the floor this is like the house of grasso. Were glad they let us in. Fast money traders, thank you for hiking it over here. Under armour, its been a tough one of late. What do you think about this todays numbers were okay i look at gross margins, better than feared. Better than the street feared. So, they came in a little better and shorts covered set of massive Short Covering component. So, i think this is short lived. I wouldnt be chasing it here. I think its a very expensive stock. I much prefer to own a company like adidas. Theyre doing better in north america. Taking shares away from nike and under armour were going to switch gears buy or sell . Buyer. Thats all well give you we have a news alert that Courtney Reagan has. We would love you to react to this. Yes this report just crossing from dow jones that chipotle will name brian niccol as ceo, currently the ceo of taco bell hes 43 years old. This report cites he does have experience turning around a brand with perception problems, noting in 2011 he helped revive taco bells image after a customer filed a lawsuit saying that its taco meat had more filler than beef so, again, brian niccol, the current taco bell ceo, reportedly to become the new chipotle ceo, reported by dow jones. Shares spiking sharply for chip oel chipotle after hours. I would feel so good. 10 gain in shares after im named ceo . They obviously needed this. Also for the exceo probably doesnt feel that good but chipotle needs this. They have massive image issue. They have massive issue with the sicknesses they caused thats what i think about when i think of chipotle. Probably the right choice. Market saying its the right choice i think you can buy chipotle here. Wanted for its healthconscious ingredients as the taco bell guy associated with the guilty, delicious snacks. I get it. Its about turning perception in the brand. They do have a brand issue importantly, they also had issues going into this whole health hazard. Their sales were slowing i look at it and say, they need a few things to change they need to change brands perception and figure out a way to accelerate sales growth. I would look at a couple things who knows what hes going to do. Hell survey its like an 800 million vote of confidence in market cap. However, what does he know coming from taco bell . What does taco bell do in this market, in this industry lots of menu innovation, changing things up, value, and advertising. Media buying, nationalize the whole brand. Thats not chipotles game right now. Well see if thats the way it goes one final point. For years ive been plotting under armour stock against chipotle its perfect oversaturated Millennial Brands that fell on hard times. This has chipotle and under armour diverging to the upside at the same time. Key insight right there. I didnt have a thing i never traded it, i never did anything with it. We have baidu earnings out also with deirdre bosa. Thats right. Baidu, chinas main search engine, referred to as the google of china. Beating on top and bottom line for Fourth Quarter earnings adjusted eps of 14. 90 chinese yuan or rmb. Refuse n revenue higher than expected the stock is up nearly 3 in after hours, which makes it about flat on the year it has been underperforming its other chinese, much larger and faster growing chinese peers, alibaba. Baidu has been looking for Revenue Streams outside of its core business beyond search like artificial intelligence, selfdriving cars as well as streaming video. Well go through the earnings and bring you any more if we see it back over to you thank you, deirdre. Quickly, 3 pop here, one of the best performing spaces, certainly of 2017. What do you think . Baidu was an underperformer in that space. A bit of a turnaround story expectations were low. Thats why youre seeing this pop. At, i think you can probably wait on this and let it settle out a bit. They have to have their story a little better crafted than this. I would be a buyer here id buy baidu. I like j. D. And i really like baba thats a name to buy and hold onto. We have a chart of under armour against chipotle. Thats perfect. Five years. Now, look the white is chipotle. At the end, after hours, thats popping up to catch it. It spreads it out and flattens a little bit. Its ate pretty good look in correlati correlation. Would you rather i feel like its an etf in the making mike santoli i think they might need you need eight for an etf . Yeah, but you could come up with a couple other millennial ones. Now ill be thinking about this appreciate that. I know weapon switched gears and covered a lot of ground. Thank you. Apple was also holding its annual shareholders meeting. Well get those highlights and hear from somett aendees when closing bell comes right back. Its absolute confidence in 30,000 precision parts. Or it isnt. Its inspected by mercedesbenz factorytrained technicians. Or it isnt. Its backed by an unlimited mileage warranty, or it isnt. For those who never settle, its either mercedesbenz certified preowned, or it isnt. The mercedesbenz certified preowned sales event. Now through february 28th. Only at your authorized mercedesbenz dealer. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Welcome back check out shares of chipotle surging 10 after hours after naming a new ceo bob joining us by phone. The ceo comes from taco bell, brian niccol do you know anything about him personally or what do you think is going on with the share reaction and chipotle . Well, if i were to try to step back and dream up the perfect fit of a prospective ceo who could fill, i think, a lot of the needs of chipotle, i think brian is probably the prototypical one of the prototypical finest for that role i think his why well, i think he is hes much respected in what hes done at taco bell through the years you know, hes a you know, he has a marketing background, product development, he has been really key at a lot of the changes within taco bell and, uyou know, that brand has performed extremely well under his supervision. And i think gip whven what he h done there, especially fits a lot of the things that need to be done ultimately to update and to make chipotle, you know, a much hotter concept than it used to be in the past. Bob, what specifically, because, obviously, people will look at the contrast between the price points, the kinds of business, the brand image, things like that between taco bell and chipotle. What do you think in terms of execution he will bring . Well, you know, i think theres a lot of things that chipotle needs i think chipotle needs a menu that, you know, excites customers more so than whats been presented i think the concept has grown stale. I think many of us across the industry, you know, while we might use the brand, i dont think it has nearly the appeal to consumers broadly as what it used to be it used to be really kind of a concept that stood out from others with its whole Food Integrity thesis i think that has grown and is that is that, bob, by the wayside now do you think theyll bring in this guy and go back to the whole food with integrity thing or is this totally about experimentation, marketing, maybe lowering prices . Is that a direction chipotle can go i dont think necessarily lowering prices, but it needs to have a more differentiated call to action for consumers. It cant just be what its been because i think thats stale i think its old news. I think, you know, brands need to be reinvented they need to be given new life there needs to be reasons for consumers to come in and visit those brands and i think chipotle just hasnt had that call to action that it has in the past. All right well see. Bob, thank you for joining us. With the shares up more than 10 on this news this afternoon. Shares of apple were higher today. Still lower about 3 for the year josh lipton is at an apple Shareholder Meeting in cupertino and has some of the mood there josh kelly, the vote at apple Shareholder Meeting today going as planned those eight nominees to the board were approved. Thats tim cook, al gore and bob iger among others. The stock is down about 9 from a recent high, though still up more than 20 over the past 12 months the shareholders we spoke to, today, very much bowled up on tim Cooks Company he said Capital Spending is going up from 12 billion to 16 billion, so thats up 4 billion this year. I think so with that amount of money they will find something new and exciting. Tims a great leader. Hes ethical, moral, and i think hes taking the company in a very ethical direction thats good for business. Theyre very innovative always coming up with a great new product, very versatile and easy for anybody to use. Tim cook fielded questions from his shareholders. He called the iphone x the new standard for smartphones and talked about his wearables business which he says is now the size of a fortune 300 company. Shareholders asked him about tax reform, repatriation, capital return tim cook saying his board remains committed to annual dividend increases back to you. Josh, thank you josh lipton monitoring it for us. Now, he went from organ transplant recipient to olympic snowboarder. Up next, were joined to discuss his incredible journey you can catch the curling mixed doubles match between canada and switzerland beginning right here in 15 minutes at 5 00 p. M. Eastern. Weve been preparing for this day. Over the years, paul and i have met regularly with our ameriprise advisor. We plan for everything from retirement to college savings. Giving us the ability to add on for an important member of our family. Welcome home mom. With the right Financial Advisor, life can be brilliant. Curling is taking the nation by storm we have curling right here on cnbc starting at the top of the hour just about 12 minutes time. Its canada versus switzerland for mixed doubles. You can catch all the olympic curling action on cnbc at 5 00 p. M. Eastern mike, were first in curling i like it i like to call it ice bochy. It is. I like that. When it comes to social media, which platform takes the gold at the olympics cnbc asks the athletes instagram, yeah so, yeah, i try to upload pictures and to increase the amount of followers. I guess twitter right now its fun to kind of see commentary on the sports. I think i prefer instagram. Instagram. Pictures i say a thousand words, its so easy to use easy to connect with people. I like instagram. I travel a lot and i take a lot of pictures. Its one of the best ways to share my pictures. Facebook. Ive been there a long time. Right now its instagram. I used to use facebook a lot, but maybe in the last year i started to use instagram more. Instagram i love it. Im getting a little older so the whole snapchat and stuff is not good im still on facebook. Our next guest is a threetime olympic snowboarder who made history as the first and only athlete to compete and earn a medal following an organ transplant joining us is chris klug, olympic snowboarder bronze medal. I think thats your medal. Thank you for joining us. Its my favorite necklace, kelly. Is it heavy theyre about two pounds. At the time they were the heaviest medals ever in Salt Lake City in 2002. Its the best neck last. Before i ask you about that, i wanted to know, we just talked to those athletes, i was going to call them kids become social media. Do you have a preferred platform what do you do these days . I have got to agree with them im instagram as well. And i have a lot of fun with that i put a couple of photos up this morning split boarding snow mass mountain and riding down in a foot of you are b fresh new snow i keep touch with world cup and olympic friend on instagram and twitter. I have to agree, a picture is world a thousand word and im probably most active on instagram. How are you feeling these days, after the transplant how difficult was it to compete after this has been done. Im 17 1 2 years out from my life saving liver transplant after being on a waiting list i got a new lease on life. Heroic and selfless decision from a donor family. Im heldier than i was ever before my transplant and im having a lot of fun. I am totally addicted to the olympics right now and cheering on a lot of my friend. It brings back so many great memories from my three olympics and really fun to cheer on all the athletes. I was wondering about that, you go back to your first olympics 20 years ago, how have you been able to observe the event has changed . Whether its larger, more exposure for the individual athletes i mean how is it now do you think versus when you first did it. I was the first ever named snowboarder to the u. S. Olympic team, mike syed giant slalom, and the halfpipe now of course slopestyle the level of riding we are seeing in the halfpipe that we are going the see from the four americans on the what we sea saw chloe kim do it was spectacular. Boarder cross was added in 2006 in torino. We have got four disciplines of snowboarding now u. S. Is having fun its fun to cheer on all the athletes we are having a great olympic experience i was at the center of excellence the other day they are really happy with what this team is doing seems like they are well prepared. I like getting a reminder of my geometry. I didnt do so well. They talk about 1080 chloe kim did i think a back to back 1080. Can you slain to somebody like me how difficult that is. Thats not my specialty as well but we are going to see what chloe do was phenomenal last night. I loved her last run how she said you know, that one was for me and for her grandma who was there in attendance cheering her on she could have done a victory lap, easy and safe instead she threw down an 98 an amazing statement on her. But well see 1440 from shawn white tant they are going to go to the moon on the it may be one of the best progressive competitions ever. Wow i wanted to ask you while you were here, we want to ask the athletes, since we are cnbc about any money mistakes each athlete has made i have been on Apple Computers my whole life. I bought as much as i could at the time, which wasnt a lot but that was certainly the best decision i made. The worst decision, i had a coach, who was a great mentor the me he said start an ira and put in 50 if thats all you can do the biggest mistake was that i didnt put more in its a nest egg and enabled us to build a new home in aspen last year. I love that one my dad is going to love that one more than any other story. Do you have any stocks that are your favorites. Im reading more and more im shift into the foreign markets and emerging markets and maybe more housing stuff i have got a real estate business in aspen. Seeing all the millennials moving up and now the largest segment in the work force, they are going to cede need some housing. They might be tiny houses but they are going to need housing those are the shifts i have made i have been a facebook and amazon fan for years as well as apple. Those have all boded well. Im shifting little bit more foreign here in the months ahead. I think we just found a new markets guest. Mike, im sorry. No real mistake there is. How did i do, mike . Is that okay i think you are all right you are on track. And from mike thats high praise chris, thank you for joining us. You betcaly thank you, mike. Chris kluge. Up next, the dow stocks taking home the gold, silver and bronze today and stay tuned the mixed doubles gold medal curling match is ahead. Im dean gemmel the skip of the curling team is like the captain, calling edge stroo, and communicating on every shot whoa, whoa, yep, yep, hard, hard good communication is critical to success on the curling ice. Global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. This is a tomato you can track from farm, to pot, to jar, to table. And serve with confidence that its safe. This is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. This is a shipment transferred two hundred times, transparently tracked from port to port. This is the ibm blockchain, built for smarter business. Built to run on the ibm cloud. This is the ibm blockchain, built for smarter business. Each day our planet awakens but with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. We are moments away from olympic curling. You dont want to miss the mixed doubles final between dan canada and switzerland. It starts in just about a minutes time. Catch all the action here on cn cnbc the top three stocks today in the dow. Cisco takes the gold ahead of its Earnings Report tomorrow it was the top performer. Retail has done very well today. Before and after the correction. Consumers are in good shape. Consumer discretionary is domestic and held up. We are heading into their earnings season. Thats going to be the story. Under armour. People think their numbers bode well for some of the related Retailers Next week. See fit plays through there. Again, today it was only about 55, 60 of the volume to the upside i keep think thinking for reasons to say maybe we have another selling wave to absorb but its checking off boxes that say last weeks lows were okay for a while. In the morning, we have got the Consumer Price report. We will be watching it here at 8 30 a. M. Eastern. That does it for closing bell today. And your olympics curling coverage does begin right now. Glory run for the gold medal. Backtoback 1080s, front side 900. Chloe kim Reigns Supreme in south korea. A nighttime look at the coastal cluster in south korea looks like an Amusement Park there will be excitement to be had on this day of