Transcripts For CNBC Closing Bell 20130214

Boutiq boutique and number two is in italy. And the most romantic hotel in the world, the anastasi apartments in greece. In a that looks u. S. And in the u. S. , the bardesbond in, the rooms start at 600 and go up to 1,200. They bottle that, its called wine. Thanks so much. Happy valentines day, everybody. No matter what you do, enjoy it. Thanks for watching street signs. Hi, everybody. We enter the final stretch. Welcome to the closing bell. Im Maria Bartiromo at new york stock exchange. This market fighting for a close in positive territory, brill. The dow is fighting. Got the s p and nasdaq positive, but were kicking off the final hour watching other stories as well right now, including a huge day for mergers. Warren buffett buys heinz. American usairways form the Biggest Airline in the world, but so far the stock market seems unimpressed. What message is that saying about where our economy is right now . Well look at that coming up. A lot of implications to see this deal flow pick up steam early in the year. More signs though that the individual investor is dipping his or her toes back into the stock market. The balance in 401 k s rising by double digits last year. Get those numbers and well take a look to see if more people are contributing as the dow flirts with a new record high. And the illfated Carnival Cruise ship. Now we are told a few hours from being towed into port. Could be a lot of hours. New pictures are coming in right now, and that stock has been under pressure since news broke of the power failure on sunday. In just a few minutes we could be speaking live with a passenger on that ship for the latest on the conditions, and well find out whether they jive with what carnival has been saying about what passengers are going through right now. All that coming up in the program. First, let take a look at where we stand as we approach the final stretch for the market on the day. The Dow Jones Industrial average down just a fraction. Steady for the last hour or so much. Nasdaq positive, up two points on the session. Take a look, 3198 and s p 500 in positive territory with a gain of 1. 75 points. The dow son pace to finish lower for the second consecutive week but in todays closing bell weve got our exchange josh brown, cnbc contributor from fusion analytics, jim pullson from Wells Capital management and juan kenneth pulcari and our own rick santelli. For you, jim carlson, its all forward. Theres still a lot to like. Corporate earnings coming in right and a relatively low competitive hurdle with rates and a liquid market, investors challenging from their asset allocation, probably underallocated stocks, growth coming in better than expected. Weve got confidence rising as evidenced by better m a activity, for example. All right. So i think youll want to stay overweighted stocks even if you have to withstand some pullback. What about the m a action . Josh, what does it tell that you were seeing more deal flow . Is that a positive for the stock market, or is it a result of the market as Companies Use their stocks as currency . No, thats i think thats a positive provided the deals dont get embarrassing and out of control, and they dont become this lbo mania where its just debt piled on top of debt and youre seeing people do deals just for the sake of the transaction itself. I would not characterize the action as that. What i would say is the huge thing thats happened for the stock market is not the Retail Investor or whether or not he was in. Theres no correlation between fun flows and stock Market Performance in the last five years. What has happened is 4. 5 trillion of corporate buybacks. Thats what driven the stock market. So the real question is are they going to find something more interesting to do than buy their own stocks . Are they going to start acquiring competitors . That could be a tailwind that not a lot of people were counting on this year, and i dont see how we could call that negative, again, until the deals get really silly. You mentioned lbor, leveraged buyout. Dont want to see a ton of that. Yeah, exactly. A lot of buzz on the floor right now. Whats the mood here, what would you say . From the m a side the news is very exciting. The deal we saw with heinz is another indication theres a lot of money on Balance Sheets and companies are looking to put that money to work and looking for the right opportunities so like all the other guests i do expect the m a activity absolutely is going to pick up this year as companies are looking to use that cash and better their businesses. That being said, you can see on the s p were still trading in that very tight range, banging our head on 1525 on the s p which is a level of resistance. Weve seen it the last four or five days, and i think well see it again. I dont think theres any reason for the market to push up and through. It needs to consolidate before it makes the next move. Well see that. Rick santelli, whats the focus from your end today . A couple of things. Traders down here have a pretty good memory and remember a lot of lbos, mergers and acquisitions, big deals in 06, and that was actually not a good signal at the time. Add in a lot of liquidity, as josh said, the last five years are different. Of course, they are different, all floating in a lot of water and im not talking like a cruise ship, and when it comes to Interest Rates, pretty much everybody has written off the fact that they can go down. Its all about them going up. Somebody better remind the 85 billion contributor to going the other way, and thats the Federal Reserve. Today you have all Interest Rates actually moving a bit lower, as you see, 10s and 30s intraday, and also even with the yen up against the dollar, the euro centric dollar index is having a pretty good day and if you look at the daxx, the kaks and the nikkei and take care of the currency issues, they are getting much closer to the zero line in terms of their equity net change for 2013. Speaking of that, reports out this morning that george soros had made 1 billion on his bet against the yen. Hes done it again, rick. Yeah. I think hes been watching cnbc, buddy. Weve been talking about that trade since thanksgiving. Hey, guys. One thing thats important to bring out. When we were on the air in davos, bill, he said that he believed in the japanese authorities to do what they are doing and basically predicted that the yen would keep going lower. Once again, if you had watched cnbc. So he said it. What were you saying, sorry, kenny . I wanted to throw one other aspect out. You know, i dont think that its in anyones best interest to try to pick a top here, because its really hard to do. You can look at price right now and say everything is acting as it should. The bakes are consistently making one and twoyear highs, et cetera, but there will be a pullback. I think people need to steel their nerves. Youre not putting any long positions on right now, are you . Were pretty long right now, so this is kind of a hot stove market. All i can say is my get tuls me lets not try to figure out today is the top. Yesterday, tomorrow. I think its too hard. Right, but i will say if we do push up and through 1525 decisively, youre going to see a very quick move to 1575 because thats really the next pot of resistance so dont be surprise federal in fact that happens. Four points away from that there. Thanks, guys. Appreciate it. Well see you soon. Us a just heard, a flurry of merger activity sparking a lot of big moves on wall street today. Lets check in with bob pisani in the middle of all the action. Hello, bob. Hello, maria. The merger deals are affecting the stock market. The historic heinz deal is really moving some of the big package food companies. Take a look. Historic highs on a number of them. General mills, historic highs. Schmucker which picks jif, pillsbury, folgers coffee, thats historic high. B g foods, another big distributor, campbell soup, not historic but a fouryear high. Lets move on and talk about airlines. Look how bad they all are. The era of consolidation is over. So well have three big airlines, delta, continental and united. Its unlikely well see big increases in prices which is what will drive these stocks further. Remember, Airline Stocks, many of them, sitting right near fiveyear highs. Ive been asked about the solar stocks, and they are all up again today. These are very funny stocks. They move on momentum. Theres been no news today. Theres been talk about finally a stabilization in prices for solar panels recently. Who knows, those things go up and down a lot. I would note, take a look at the etf. Etf for solar stocks, guggenheim puts it out. They really all bottomed riding around the election and theres speculation after that there, of course, there might be tax cuts before the election or tax breaks might be removed. Obviously thats not going to happen, and maybe thats been a little bit of an effect as well on the solar stocks. Guys, back to you. Welcome back, by the way. I know you loved leaving florida to come back to the northeast. Heading towards the close here, weve got about 50 minutes left in the trading session. The dow is the strugler, down seven points. Right now the s p is up a point and nasdaq up a fraction at this hour. Its been anything but party time for Carnival Cruise lines. Its disabled ship, the triumph is limping towards mobile at this very moment. Up next well take you on board exclusively as we speak to a passenger who is on the ship at the movement thats next. Also. Coke has been dragging down the dow all week. Is it time to take the pepsi challenge and bet on cokes arch rival . That trade coming up in a moment here. And then later, famed Federal Reserve critic jim grant is with me saying theres a toxic alignment of forces in the bond market that could send Interest Rates skyrocketing. Scary prediction coming up when jim grant joins us exclusively. Welcome back. Things are going bad to worse for carnivals disabled cruise ship. One of the tug lines is now broken. Weve got all the angles covered. First Nbcs Jay Gray is in mobile, alabama with the very latest details. Ed buck is on the telephone with us. Hes a passenger on the ship right now. Lets start with you, jay. What can you tell us . Reporter yeah. Maria, what else can go wrong . You know, now the tug line has snapped or become disengaged. That lex tend the wait even longer, not only for those onboard and youre getting ready to talk to someone there, but 100 or so Family Members who have gathered at the terminal to try to greet their loved ones. Now their wait extended. A lot of concern and frustration going as you might imagine. They will greet the loved ones. The others will board chartered buses going back to galveston, texas where the voyage originated and was supposed to end on monday or new orleans, louisiana, where 1,500 hotel rooms are reserved for them to kind of dedepress for the day, get a warm shower and fresh bed linens and on chartered planes they will be taken back to texas or their homes, so eventually, and now sometime likely after midnight central time here in mobile, they will finally make it to this port and begin to finally get back on land after whats been a horrific ordeal. Really, what a shame. Jay, thank you. Joined on the phone by a telephone aboard the triumph from houston, texas and works in the health care industry. Ed, thanks so much for joining us. We know a tow line has broken. Have you gotten any guidance on how long the delay will be . What can you tell us, ed. The delay is not necessarily because the tugs line broke. Theres five or tugs laying sitting around, but were stopped because the tide is out, and the ship is too heavy, and we would go aground, so were waiting for the tide to come in. They original any estimated us coming in at 4 00. They said it was going to be a sixhour delay and that was two hours ago so about four more hours, and then whats going to be the challenge is disembarking because the elevators do not work due to lack of power, and everyone is going to be carrying their own bags down, and, for instance, were on floor 11, so thats going to be a challenge, but otherwise morale is pretty good on the boat overall. Ed. Yes, sir. Heard all the Horror Stories about the conditions and about the food and about things we cant really talk about at dinner time on television. We dont know whether thats extreme or if its typical. Give us your version of whats going on, and, you know, carnival says that their employees are doing all that they can to make you passengers comfortable. Are they . Whats going on . Yes. Kudos to carnival. They have done Everything Possible to make our lives nice. They have they have offered us all of our money back. They have offered us an extended an additional cruise voucher, and then the other day they came on and said they are going to issue everyone 500. They have gone over and above to make sure everybody is comfortable. Are you getting any sleep . Hows the food . I mean, whats going on . We get a lot of sleep because theres nothing else to do, but thats thats all good. The camaraderie has been very good. What about the sewage problem . Weve heard reports of sewage problems, limited number of toilets throughout the ship. How bad has it been . Okay. Now, that is the problem with the boat, is that the toilets have not worked, and they ended up having to issue us these bio we call them the red bags, and that is whats been used almost exclusively for almost the first two days after the fire, and all of a sudden they got some of the public bathrooms working and people that stand there. As soon as you go to the bathroom, they are there cleaning that thing instantly and youre ready for the next person. Showing you a photo of you, ed, holding a redba ing ing a r thats one of the red bags. These are your pictures. Are you angry about this . I mean, whats your mood going through this . It sounds like just a week of hell for you passengers, is it . That is not case. No, that is not the case. It has a lot of people have been suffering because their rooms on the very lower decks sort of flooded or had smell because theres no air circulation and they were up, and the first day or so it was nice and all of a sudden it rained and got cold so that was not so good, but my personal situation is we are lick and we have it fairly good meaning that we actually are in a balcony room, and so we have air and we have light, but most places do not have air or light. If you didnt bring a flashlight, then you couldnt see other than the tiny emergency lights in the hallways. The food has been pretty good. They have kept that coming. We had at one point we had three other Carnival Cruise lines circling us, bringing over food in the big life boats. Weve the lines to eat now have been anywhere between 30, 45 minutes, except for one day when they got real cooking, they cooked cheeseburgers and that was a threehour line but the camaraderie has been good, kind of like the hurricanes. Everybody huddles together and then they have one other thing. They have had, and this is the cell phone problem for everybody. They only seem to have power around the elevators so they are having these large charging parties where they have 15 extension cords all plugged together, big strips, and everybody is sitting around for half an hour, 45 minutes charging, and then you pull out, and its all very organized. Theres no challenges. Carnival actually one night opened the bars and free beer and wine for everybody. That was nice, but i can certainly imagine that. Overall overall its not been horrible, but its been an inconvenience for sure. Certainly a memorable trip, i imagine. Absolutely. Will you go on another cruise . Would you be willing to take another cruise, or are you done for cruises for a while . This is my 13th cruise, and yes i would go on a cruise. This has been very well handled. They do a good job. You sound like a nice guy thats willing to look on bright side anyway. Appreciate your view of what youve been going through on the carnival triumph. Thanks so much. Good luck. Our lives we were worried, dont get me wrong. I bet. But were doing, were trying to look at the brighter side of life. Thank you so much. Best of luck. Get off safely, my friend. Lets bring in a Family Member waiting at the pier to pick up her inlaws on the ship. I am. How are you . Good to have you. Thanks for joining us. What are you seeing from your standpoint . Well, right now its just a waiting game. We had just received word right before yall report it had that the tug line had broken so right now its just a waiting game. Who do you have on the ship, and what have you heard from them . I have my motherinlaw and my sisterinlaw, and their friends, angie and margaret whose husband buck is waiting here patiently for her to return as well. Have you heard from them at all . We heard from them briefly this morning. They were tired. They were hungry, and they were ready for a shower, and they were definitely ready to get off the boat. I bet. Can you tell at all . I mean, i dont know if you just heard our interview with that other passenger on the ship board, hes giving us a little more moderate tone from the Horror Stories weve been hearing. Have your passengers, your friends and your mother, have they gone through a very difficult time, or is it media hype that weve been getting in many cases this week . Well, i dont there may have been some media hype, but from some of the things that im hearing, some of them coming directly from our family, conditions were not not good at all on there. Just from what weve been gathering. Sounds like it depends on which part of the ship youre on, if you have the better accommodations youre having a better time there. Bridget, we wish you well and hope your mother and fellow passengers can get off the ship there safely. Thank you very much. Thank to you, too. Coming up, well hear from some top lawyers, yes, lawyers are getting involved, if other passengers will have a case in this one because you can be sure there will be a flurry of lawsuits stemming from this event. Michelle carusocabrera is on her way to the gulf coast as we speak. She will have reaction from passengers all day tomorrow right here on cnbc. Meanwhile, were in the final stretch of trading, 35 minutes before the closing bell sounds. A market thats trying to come back here. Nasdaq and s p positive. Dow jones industrial average looks like its about to go positive. Down just about a point and a half. We will see. Meantime, pepsi reporting strong earnings today, but arch rival coke has been losing some fizz lately. When we come back well tell you which stock may be the better bet to win the soda wars. Speaking of sodas, first new york mayor Michael Bloomberg banned supersized sugary drink and now he wants to do the same with styrofoam cups, the cups you drink soda out of. That and a lot more next. You ready . We wanna be our brothers keeper. Whats number two we wanna do . Bring it up to 90 decatherms. How bout ya, joe . Lets go ahead and bring it online. Attention on site, attention on site. Now starting unit nine. Some of the worlds cleanest gas turbines are now powering some of americas biggest cities. Siemens. Answers. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. Where will it end, and is it coming to your city . Supersized sodas are outlaws in new york thanks to mayor mike bloomberg, and now hes got another ban in his sight. Courtney reagan has the details. Environmentalists are rejoicing but restauranteurs may not be. In his 12th and final state of the city address new york city mayor Michael Bloomberg is proposing a citywide ban of plastic foam containers. Styrofoam increases the cost of recycling by as much as 20 per ton because it has to be removed. Something we know thats environmentally destructive, costing taxpayers money and that is easily replaceable. Well work to adopt a law banning styrofoam Food Packaging from our stores and restaurants, and dont worry. The doggie bag and the coffee cup will survive just fine. A switch to an alternate material would be more expensive and Dunkin Donuts would have to replace foam cups. City Council Speaker Christine Quinn does seem open to it. In bloomberg world, new yorklers dress less than 16ounce sodas in paper cups, maria. Back to you. Court, thanks very much. Pepsico higher after the beverage giant proposed earnings that exceeded expected. Time to buy or are you better off with rival coke . Coke versus pepsi in talking numbers today on the technical side. Richard ross is Global Technical strategist with you aburg grayson and on the fundamental Zachary Karabell is a cnbc contributor. Good to see you guys. Thanks for joining us. And you. Rich, talk charts. Walk us through. Which chart looks better . Lets start with a performance comparison of the two stocks. Clearly youre going to see some technical symmetry, some really strong correlation between the two. However, we go back and start to see pepsi asserting its dominance over its rival cocacola. Its one of the key underpinnings of our bullish call for pepsi. Now, when we take you through the stocks specific chart of cocacola, you see this weeks earnings. A big disappointment. Now the stock had been acting well coming into those earnings. You saw that key breakout right ahead of the earnings. Boom, you get a negative number on the tape, and now we get a false breakdown a false breakout, false breakout is going to lead to a fast move in the opposite direction which is exactly what weve seen setting the stage for further weakness down to 36. Potentially a break down down to the 34 level. When you bring up the chart of pepsi you see exactly the mirror image, a strong fundamental data point and you get the same breakout, but on the pullback you hold the breakout and see the beautiful moving averages. They didnt cross to the downside like in cocacola. Were above the 50 and 200. We think you could push out to a fresh fiveyear high to 75 in pepsi. Thats where you want to put your money. Okay. You agree on fundamentals, pepsico . Not entirely. First of all, i feel like an old saturday night live skit with john belushi, no, coke, coke, pepsi. I would say both of these companies are executing extremely well globally. They are both led by unusually dynamic and global ceos and for pepsi, coke. They have a diverse range and they have moved away from the pure sugar water syndrome that has bedeviled them in the past, into juices, into sports drinks, and i dont see a lot of daylight between them. I mean, theres close to a global duopoly within this suite of brands executing at a relatively high level, and while they have both had their stumbles, pepsi is trying to shift away from the core sugar drink and coke may have found out you hit the nail right on the head, and i think its that strength, that sugar that is keeping people away. Both stocks underperforming in the broader mash. Now were in a bull market and can see that with prices in the broader averages pushing out to fresh multiyear highs. A stock like cocacola breaking down. Thats not where you want to have your money going forward. In a strong tape you want to be in the strong stocks that are leading the charge. Not on the weekend. The momentum in coke and pepsis favor. Once the dust settles from this particular week of earnings, i think youre in relatively strong businesses, both of them, neither of which i find overly exciting compared to other opportunities in the market and none of which will hurt you. I agree. I think these are sleepy stocks, conservative. This is strong tape, as i said. You want to be in strong stocks. As for Michael Bloomberg, dont buy them in new york city. Thanks, guys. See you soon. Appreciate that. Thanks so much. Bill . All right. I dont know what it is about the dow. Doesnt want to go positive. Just did. There you go. I was just thinking it wanted to stay red for valentines day. Its up a point. The s p and nasdaq also fractional gainers. Im loving this deal. But why the disconnect . And Carnival Cruise lines, a lot of people tweeting how he can get cell service out in the middle of the ocean when he cant get it in a major metropolitan area. Thats a good question. Stay tuned. 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Brian schactman has the details of Berkshire Hathaways big purchase and phil lebeau is covering the purchase of usairlines and american. Reporter a quick recap here for you. Berkshire hathaway and Brazilian Investment Firm 3g buying heinz in a 28 billion deal when you roll in the debt. 3g will own half the company and run t. Buffet gets the other half. He put in a little more equity, but will draw a dividend. Classic buffet move, right . Owns a great brand and gets income from it as well. When you look at the brands, you wonder why buffet didnt already run it, oreida and cherry coke, goes really well. Nelson peltz sold off a lot of heinz last year and will get profit off this deal as well. The question many are asking whether this will spark more deals in the food space. You never know, but a lot of insiders told me today because of buffet and the brazilians this may seem special. Talking about special ones. How about the deal that created the Largest Airline in the world. Phil lebeau, of course, its all over that one. Hey, phil. Hey, brian. You know, weve been talking about this 11 billion merger, take a look at what the investor of Airline Stocks want to do. They are selling and selling big. Take a look at the airline index. Showing you a threemonth chart so you can see the runup. This is the biggest decline in the index that weve seen in the last three months and heres the reason y. Just a few years ago there were seven Major Airlines in the United States. Now take a look at big four as we refer to them. American, the new american, is the Largest Airline in terms of seat miles. Once its finally combined with u. S. Air. Ahead of united, ahead of delta, and there you see southwest. Jetblue, its number five, but way smaller than the other four, and earlier today when we talked with the incoming ceo of American Airlines who is the current ceoofu. S. Airways doug parker, we asked him if the consolidation play is over for Airline Stocks. Heres what he had to say. It was 2005, like 11 airlines, at least 1 of the industry and now were down, to you know, three areas. I dont think theres a lot of consolidation. Nicely rational and intensely Competitive Airline industry which is going to be good for consumers and investors. Investors of lcc which is the u. S. Airways stock. They, today, are taking money off the table, not surprising, but we should point out, maria, when weve talked to a number of analysts about this deal and whether or not this is good in the long term for u. S. Airways and the new american, almost all of them said the same thing. They believe in parker, and they believe that this airline will be a very cash flow positive airline in the years to come. Maria . All right. Thank you so much, phil and brian, and thats just two examples of some very big deals. Merger activity at the highest levels since 2009. Up close to 90 in january versus last year. When there was no activity last year, its not tough. Not hard to be up 90 . What does it say about the state of the economy right now . With us with their thoughts, lindsey from ftn financial along with our own Steve Liesman and jeff cox. Lindsey, when companies are willing to put capital to work, thats a good sign for the economy, isnt it . Certainly is. And when we see the merger and acquisition activity it generally signals better times ahead. Corporations are feeling much better about their Balance Sheets and willing to take out new amounts of debt and put cash to work and expand the debt. When we talk about this type of activity, were generally talking about an increase in investment with an indication that the economy is on stronger footing, but thats not necessarily the case. Hold on, hold on. I mean, look, whats going to happen here when you get m a . Youre going to get consolidation. Youre probably going to lose jobs in the short term. Youre probably going to get a rationization, thats a euphemism for cutting the Capital Investment budget. Sure. In the near term it doesnt end up helping the macro economy. In the near term job loss also can be overcome by an increase in productivity, an increase in cost efficiency which leads to further investment, which leads to further employment, Income Growth and further consumption down the line. Jeff, it sounds like you need to break the tie for us here. I would almost take what lindsey said and stand it on its head. Increased m a activity is about confidence of whats happened behind us, not ahead of us. If you look at the history of these things, they usually happen when the market is high, not when its low. Its counterintuitive. When you look around 2009, m a is off a cliff and now were near historic highs and m a is coming back. Agree with some of the points that steve made, have a crowding out effect and a lack of incentive for r d, so im not real thrilled about it. It just doesnt say that much to me about where were going or where weve been. It could be a result of whats going on. The market is obviously trading near highs. Companies are using their stock as currency. Interest rates at rock bottom levels. You have to believe these two items alone are reason enough to have management say we were looking at this deal and now is probably the best time to do it. I just think in terms of trying to read the tea leaves on this, i dont think you can read that much into m a so from a macro standpoint about where the market is going, i dont think increased m a activity increases very much. We see some deals get done but the vast majority of companies are on the sideline even though they are awash in cash. Were seeing Companies Invest in productivity in terms of equipment and software up 50 at the end of last year but when we look at employment and investment and structures this is still very limited, not the robust levels wed like to see three years into the recovery. Many companies citing the unfavorable regulatory and disinsending corporations to invest. Heres a way m a can help. It sends a signal down to entrepreneurs that there is a cashout at the end of the tunnel, and it could inspire ipos. Ipos bring new capital, new businesses to the economy. Thats a net positive for the macro. If we were to continue along those ways. The other thing it does, it does give cash out to guys like blackrock and other deployers of capital who may put it to work in another way. Its not all negative. Its not all positive. The other thing to watch, as im sure my colleagues on this panel will agree, is not all these things work. They look great on paper and everybody gets high about them on the press release, and the press conference, but down the road you have these 5 billion, 7 billion, 10 billion writeoffs when they see the reality what have happens. You know who ends up the big winners, the underwriters, the people who put the deals together and collect the fees. They are the ones. They are the stocks i would be buying. Depends on what the purpose of the merger was. Right. When you talk about the Airline Merger were talking about, thats very defensive. Guys struggling in an industry thats been struggling. Great point. But when you have Berkshire Hathaway buying heinz, i think mr. Buffet is seeing value in a company thats been around for over 100 years. I love the point that brian made before we came on here, its a wonder that buffet didnt own this Company Already as just something that seemed so tailor made to him. Its old economy, a transparent company. But how do we pay for 209 premium he paid . Where does that come from . I mean, yes, productivity in the very long run leads to more jobs, but in the short run, and even the medium run, lindsey, as you know its been a big problem for job creation. Because youve got two companies consolidating, and they are going to look for efficiencies. What does that mean, cutting jobs . The labor market is very tepid. We havent seen the growth wed like to see but id like to put a much longer term growth plan in place rather than worry about a bandaid fix. Well, i think weve ended it here. Weve come to a conclusion. Thank you all. Thanks so much. Were in the final stretch of trading in a market sitting on the flat line, down about two points on the Dow Jones Industrial average. Carnival likely to face a wave of lawsuits once that disabled ship finally makes it to port, wonder when that will happen, but just how liable is carnival in this kind of a situation . We have legal answers, and they may surprise you coming up. 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Go national. Go like a pro. Well, on the day the american u. S. Air merger becomes official. Take a look, its down about 2 , the worst day since november, but over the past year, it is up about 20 . Yeah. U. S. Airways alone is down significantly today, so why doesnt the market seem to like the merger between u. S. Air and american . Im not sure that its a matter of not liking the merger. I just think the impact that its going to have on the Airline Industry may not be as positive because youre going to see this competition from this new gorilla in town thats going to be making some cuts, probably going to maybe cut some prices to bring some competition into certain corridors in the airline business, and it might cut margins for some of these airlines. I think its all about capacity. At the end of the day, even with these deals being done, theres too much capacity in the sky. Yeah. Planes have to be put down. We have to have new planes, and so because theres too much capacity in the air, the industry, even with these deals, still bloated. I mean, analyst say more capacity needs to come out of the sky. Lower yielding roots are going to go away. And they have begun cutting a number of them. I think its beat up, the merger under way of those airlines. Two behemoths like that are going to cut capacity. Yeah. Here we are worse nick a bit. As we approach the close, down 11 points on the Dow Jones Industrial average. As i said, the market just does not want to go positive here, so whats holding this market back . You ask our next guest. He says it may be fear, but where is that fear coming from . Well get some answers coming up next. And then were going whale watching. What the largest investors are buying and selling. Well disclose that and follow up and bring you the information as we know it coming up next on the closing bell. How do you keep an older car running like new . You ask a ford customer. When they tell you that you need your oil changed you got to bring it in. If your tires need to be rotated, you have to get that done as well. Jackie, tell me why somebody should bring theyre car here to the ford dealership for service instead of any one of those other places out there. They are going to take care of my car because this is where it came from. Price is right no problem, they make you feel like youre a family. Get a Synthetic Blend Oil change, tire rotation and much more, 29. 95 after 10. 00 rebate. If you take care of your car your car will take care of you. Welcome back. New figures out today show europes economy is shrinking, and its not just greece or spain, but germany considered the strongest there is also contracting. Many say its the news over there thats holding up stocks over here today. Joining us now is the international economist, author and cnbc contributor. We do welcome you to the new york stock exchange. Thank you very much. Thanks for being here. A pleasure to be here. Whats your sense . Is europe reviving or not, and what impact is it having over here in the u. S. , do you think . I think firstly the market is slightly overreacting, backward looking information. We know what the ongoing structural problems have been in europe. Right. Significant policy changes and announcements over the past six months, eight months, have actually been quite supportive of europe, and i think nothing that directs iind in a hard landing, the breakup and scenario that will work till the middle of last year. Optimistic about where things r. On a relative basis, the u. S. Employee is much more constructive than the european story. I guess people were surprised that even germany, which is considered even the strongest economy in europe is also showing contraction, so is germany have you noticed that were seeing a leg down in activity . I mean, obviously they are all trading with one another so germany will get impacted . Absolutely. Looking at some of the imt forecasts for january. Actually i think the story is improving. I think if you look at german performance in december and december, i think the story is actually more of an akscceleraig story, and, again, i really believe the policymakers are much more constructive and much more supportive, so if things get pretty bad, which they potentially could do, i think they will be there to back up the situation. One other thing, Monetary Policy in the eurozone compared to uk, u. S. And even japan, is still very, very aggressive. I was going to ask you about that. It would appear mario draghi is being dragged kicking and screaming into the currency war with japan, with the United States. Yes. What do you make of that, and what impact does that have on the recovery . Well, i think basically im still quite disappointed that the u. S. Policymakers havent been as aggressive as they might be. A lot of announcements in the policy space, cutting rates, a lot of wiggle room in that area. On the one hand wasnt willing to cut rates a couple weeks ago but was talking down the euro pretty clearly. Not only that. Today theres been a lot of discussions about the possibility of going to negative rates and the ecb following what has happened with denmark, so i think there is a lot of scope there to see much more policy. Whats your take on sort of the positives . Weve talked about energy and the potential for energy, exploration in this country. It seems like shale is increasingly being seen as one of the most important developments in the United States . Absolutely. The story, just think about this. Again, about a year ago, certainly in the aftermath of the 20082009 crisis weve seen u. S. Gdp 1. 5 and 2 . This is not the story were seeing in europe. The u. S. Story, the interesting story around the housing rebound. No seller is not constructive or positive about it, but theres something going on here that feels like theres momentum and obviously looking at the m a story, three bigtime transactions in the market. I think its turning around. So do you feel that europe is on the right track though . I think theres a lot of scope for policy intervention, and im pretty optimistic that they are at a point where they will be more active. Do you see bumps along the road . Absolutely. I think the big ones are repayments, repayments scheduled, the election in germany and we all know, i believe that Angela Merkel will be reelected, but those are the sort of big things that im looking at to see how the markets will react. Let me switch gears to ask you your take on the banking sector. I know youre on the board of barclays so im not asking to give away any secrets here, but theres a Real Movement across the world to split up some of these banks. How do you think this is going to go . Are you expecting a global standard when it comes to the Financial Services sector . Whats your take on how the major banks change the course of business in the coming years . Well, maria, im sure youre aware that, obviously, i have restrictions about what i can say, but i think that the story in general since 2009 has been one of global standards. I know christ ianella guard has spoken about this going back to the g20. A lot of discussion about coming together. Theres a lot of conversations going on in the background that are aiming to have some convergence around these issues. Remember, these economies themselves are undergoing very difficult challenges. The european economy is very difficult with where the uk is now, struggling with the potential triple dip and the u. S. Is in a very different place. Implications of what regulatory reforms can do in the banking space is something thats still open up for debate. Good to talk with you. Thank you for having me. Were going to take a break and come back with a closing countdown and head towards ringing of the bell. Americans have loved opening up their 401 k statements recently because the account balance is up 12 . Coming up. Why that could spark more workers to increase more contributions and give this market even a further boost. And the cruise may finally be close to ending, but the pr and the business nightmare is nowhere near over for carnival. The lawsuits and fallout that are yet to come coming up later on the closing bell. But at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real business. We all work remotely so this is a big deal, our first full Team Gathering i wanted to call on a few people. Ashley, ashley marshall. Here. Since were often all on the move, ashley suggested we use fedex office to hold packages for us. Great job. [ applause ] thank you. And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. Whoa you really feel all 335 footpounds of torque. Its chevy truck month silverado was also recognized for the lowest cost of ownership. Hey, what are you gonna do with it . End table. Oh. [ male announcer ] its chevy truck month. Now get 0 financing for 60 months, plus trade up to get 1,750 total allowance on a silverado allstar edition. Or trade up and choose customer cash plus option package discount for a total value of 7,250. 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