Transcripts For CNBC Closing Bell 20140128

At t and yahoo reporting after the bell five ten minutes afterwards so well have plenty of coverage on that. Earnings continue to be a theme all day. We have also got an eye on the nasdaq which is lagging again today. Part of that has to do with the intersection of two stories right now. The stock story of the day no doubt is apple which has been crushed. Lets look at the shares at the moment. Theyre down 7. 6 . A big move for this name. There are some people who believe this is a buying opportunity. Carl icahn buying half a billion dollars worth again. We have someone joining us who says carl is going to take a bath because apple is going down to. Hes hear to make that case. Were also two hours away from a crucial decision from the central bank, not our central bank talking about turkeys central bank. You need to care about this because the decision it makes will have ripple effects on your money right here in the u. S. Its all part of the emerging markets mess the currency things that are going on over there, possible contagion. Our Michelle Carusocabrera is on the ground live in turkey kelly, with the latest. Wow. Lets take a look at markets as we head into this final hour of trade. The dow poised to snap a fiveday losing streak. Its adding 92 points at this hour. The nasdaq as mentioned, lagging a bit as apple comes under pressure. Its up 11 points to 4094 and the s p 500 adding about 10. A decent performance this afternoon, 1792 is the level there. Lets talk about these markets in our closing bell exchange. Joining us kim forest jason pryde,ed to salamon and Michael Pinto and our own rick santelli. Gentlemen, lady welcome to one and all. Michael, let me begin with you. I know well have plenty of time to talk about the emerging markets and apple. Lets talk a little bit about the fed and the likelihood that the fed will continue its taper even if it doesnt, it does seem likely that the Federal Reserve is going to pull back on its stimulus this year. Do you think the markets and the economy can withstand that . Well no i dont at all. Portfolio strategy is now 90 cash. I will be shorting stocks this week or next week. I think the fed has engendered a phony economic recovery based on reinflating asset bubbles, particularly home prices and equities. I think they will be tapering into falling economic strength and i think that ends very badly for the economy, earnings the market. Todd whats your take . Well we like to hear expectations. We at schaefers investment research, we like to go off expectations. Its part of our investment strategy. If you look at i think there is a lot of caution out there in terms of the economy and the impact on stocks. You look at for example, in the Options Market all the portfolio protection trades out there is Fund Managers are cautious. You look at Short Interest. It was just reported today, in fact that Short Interest on nyse stocks was up 3 in the first half of january. Thats been at a high level for the pastself months since selfveral months since the fed hinted taper was on the horizon. In other words, theres still a lot of worry out there a lot of worry to climb . Is that what makes you more optimistic . The market seems to be telling a different story as far as forecasting what the economy will do what Company Earnings will do Going Forward than the opinions being expressed out there. So jason, let me bring you in jason, if i might. Michael paints a pretty dark picture. Todd seems to be saying theres a lot of caution out there. A little caution can be sometimes a good thing, no . Look this is a natural point to see this in the market. Weve been through a pretty rough period over the past three, four five years. Its hard to get everybody back on board. The economy is barry rekoferely recovering. Its making some progress. The fed is doing exactly what it should have done. It should have provided as much stimulus as possible to stimulate deleveraging and now were getting back to normal. The aggregate amount the aggregate amount of debt to income has come down across the world. All the metrics show it. I hate i dont want to talk over you, sir, so please. The aggregate amount of debt thats what you just did. Its there has been no deleveraging. If if you look at household as a percentage of income its at 105 its my turn now. Just a second. Just as a look at Consumer Debt Consumer Debt started in 2010 at 140 of the disposable income. It is now down to 100 of disposeable income. Its coming down. In 1980 it was 45 . All right. Agreed. And we also had 15 Interest Rates. Lets forget about the fact that the government has releveraged to the tune of 17 trillion. Kim, whats your take . How do you see things . I see things that im supposed to find Good Companies to be put in your portfolio. I know this is terribly oldfashioned, but, you know and lets see because i think last year at this time we were equally grim and if you were all in cash you would have got your clock cleaned. I wasnt. Through 2013 and, you know, we did really well because we buy companies that work for their shareholders, and i think thats what you guys are missing with these big macro calls. Good luck with that but, you know what is the bond market telling you . And its the same environment. I find it fascinating today, tyler, because we have been looking at a flattening yield curve and falling rates for most of 2014 which is very counterintuitive, but today looking at intraday of fives, their yields are down a basis point. The chart of fives to 30s you can see theres steepening going on. That probably has imimpliplications for market perception. The buybacks are most likely going to be less and the dollar index is pretty stable and pursuant to this conversation what are we 62 63 months into zero Interest Rates and the fed was very successful in the toothpaste dynamic. They squeezed us owlall down the tubes in the riskier assets because they bought the safest ones in the form of treasuries. Now its going to reverse. And whats the riskiest of the risky . The emerging markets. It makes sense on many levels. Maybe the fed will pull it off. No they wont. Maybe well ride the bike straight. Its not my thought but you never know. Well never know until we get fi years one at a time. Five years of 0 Interest Rates, a 4 trillion fed Balance Sheet, and everybody is pretending they can just exit without any ramifications and they havent even really started the taper. Its 75 billion, maybe it becomes 65 billion and maybe it comes down to zero by the time we hit the summer but guess what happens to currencies . Guess what happens to Interest Rates . Theres all kinds the carry trade. Of things we dont know. Look whats happening in the emerging market. The last person who knows anything is the Federal Reserve. If youre banking on them, youre going to be very sorry. Jason, how is the feds activity or tightening affecting the emerging markets . Do you see a direct nexus there . Remember last summer when the fed said were going to think about the tapering the emerging markets fell out of bed. Is that what were seeing these past couple weeks . There are definitely connection points there, its hard to ignore that. Theres definitely a connection point to emerging markets and economic activity. This is why theyre proceeding in a 10 billion per meeting sort of pace and judging it on an as you go basis as to how theyre proceeding Going Forward. Its also the reason that they are strengthening their forward guidance. They believe that they can offset some of the impact of their tapering on one hand with a strengthening of basically saying were going to have lower rates longer for as long as we feed them. Anybody that jumps up and down and argues its only a one direction move, that theyre going to put their blinders on and not react appropriately is completely missing the communication. You think he can come back with a bigger buyback down the road . Boy, i will take the other side of that wager. Folks and the fed does not control longterm Interest Rates. A spirited debate as we always like to have. Folks, gentlemen, lady appreciate it very much. Thank you. We have about 51 minutes 50 minutes before the closing bell. The dow is higher by 87 points right now, kelly. But apple is not higher. Those shares having their worst day in a year after posting disappointing iphone sales and weak revenue guidance. Up next well hear from someone who says the selling in this company has just started. You might not believe his price target. Carl icahn will be in trouble if hes right. And also ahead, big earnings from at t and yahoo due out after the bell. We will have full coverage of all the numbers as soon as they are out. And dont forget Carl Quintanilla, john harwood and i will have complete coverage of the president s state of the Union Address at 9 00 p. M. Eastern on cnbc. Keep it right here you are watching cnbc first in business worldwide. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. The overall stock market recovering from its recent losses, at least so far today. The dow up 86 points but apple having its worst day in a year after reporting its earnings last night, and they werent bad. Jon fortt, why is the fallout so doggone intense . Tyler, its the iphone number and the guidance. The street was looking for something close to 55 million iphones and got 51. Thats particularly disappointing since apple actually built up some channel inventory during the quarter, which brings us to the guidance. 43 billion in revenue plus or minus a billion. Analysts wanted 46. Even with expanding distribution in japan and china, iphone growth appears to have hit a wall and apple seems to be oneer running out of ways to extend existing products. We have the mini the mini retina and the iphone 5c which consumers seem to be taking a pass on. That leaves us looking ahead to new products. Its going to take tens of millions of a new product, watch or tv to really move the needle for a company this size. Frankly, even if they announce something tomorrow it will probably take several quarters that ramp that up guys. Thank you. So what is next for apples share price . Joining us is burt dolman who says apple is headed to 320. On the bullish side is the lou bassinese. Burt 320 a share, really . Yes. Actually that was my target on cnbc asia about ten months ago. I said over the long term that is the eventually downside target. I had given a sell signal on apple six days after the top at 705. That was in late september last year. Why do you say that . The company had record revenues. It sold the most iphones in a quarter it ever has. It had record sales of ipads, and its profits were pretty doggone good . Profit margins Profit Growth has shrunk now four consecutive quarters. Its losing market share continuously. Why would you want to buy a stock that has declining profit margins, declining profit share, is in a very very crowded sector . They made all their money when they had a virtual monopoly on the smartphones. Its a really crowded sector. Nobody is going to win the Smartphone Market anymore. Go ahead, lou. If burt is issuing a sell signal, im issuing a buy signal today. We can recycle the arguments about profit share declining but this is not about a device. An investment in apple is an investment in an ecosystem and what no one is factoring in is the fact that apple is going to become a big player in the mobile payment space. They have one of the biggest user bases there. Says who . If you look at what apple has been done since early 2012 they have been filing patents. They acquired you athentech. They included a biometric sensor in the most recent device. The writing is on the call. The most recent Conference Call tim cook said we see a lot more opportunity with touch i. D. Everyone loves paying with touch i. D. I think thats the key for mobile payments. You need security which apple got with biometrics and you also need people being familiar with the platform and everybody burt does your price target of 320 take into account what we know about mobile payments potentially with apple or not . And would you change your point of view if apple does come out with something aggressive on that front . Kelly, let me say two things. First of all the target its not a price grabbed out of the air. When i set the first downside target was 520, and that was a fibonacci number. We had a rally up to 589 at that point. Then it came down we said now its going to go to 420. It hit 420 and it rallied. After the rally we said we wouldnt touch the stock until there was a three in front of the price. It hit 385 at the low so that was a good buy point for a rally, nothing else. We hear the story about all these wonderful things theyre going to come out with in the future. Nobody really knows what it is but weve been hearing that for two years now under the new ceo. I think this new ceo at apple maybe a twin brother of Steve Ballmer at microsoft. Wow. Lou, let me let you jump in on that. Look at a fiveday chart of apple and a oneyear chart of apple which shows a very different story. But let me get you to discuss two points. You said that when you buy apple, youre buying an ecosystem. Coy have i could have made the same argument about the microsoft ecosystem and the dell ecosystem a few years ago, thats number one, and do you believe a mobile Payment System will be the catapulting product that mimics the products they have had in the past iphone, ipod ipad . Microsoft and dell compared to apple . Absolutely not. They didnt have anywhere near the consumer appeal of apple which is good point. Saving grace. In terms of mobile payments yes, the technology has been converging on mobile payments for years now and its finally reached a Tipping Point and apple has been on the forefront of this. You see them coming out with biometric sensor. Now htc and samsung are incorporating biometric sensors. Its bigger than the number of accounts that amazon and pay pal have the by knowiobiometric sensor is nothing but a fingerprint reader. Computers have that nowadays. Have you seen hp . But apple also has the ecosystem that everyone is familiar with but everybody has a mobile Payment System. Look at what theyre going to come out with. Yesterday the bulls were talking about the fablet. Samsung has had a fablet for the last two years. You talk about remember the diamond re ceo. Rio player. This is not innovation. Innovation for apple is a different color phone, a gold colored phone. Thats innovation . They should listen to their customers. Apple doesnt need to innovate right now. They just have to leverage they dont need to . Look at the stock price. Down 44. They dont need to do something . Guys, with we have to jump. Lou, if youre right, where are apple shares going . I think apple is going to make a run. I cant predict the future but im with carl icahn. This is a nobrainer buying opportunity. Yes, if you dont have a brain, you buy apple. No way. You still havent answered whether or not you have mobile payments factored into your model. On that note i say take two fablets and call me in the morning. Very clever. The dow is up 87 points. Were kind of sitting at these levels. Well watch for more movement as we head closer to 4 00. The s p adding 10 points pretty good performance as the nasdaq continues to lag. President obama will be heading to capitol hill tonight. It is always a dramatic moment when he comes through those doors and the sergeant at arms says the president of the United States. Income inequality will be one of the big pillars of the reach. Up next, we have a preview and the list of the stocks that could benefit from the president s agenda. And General Electrics Ceo Jeff Immelt making a big bet on his company, buying 1 million worth of shares with his own money. Well tell you what signals thats sending about ge and the Broader Market coming up on the closing bell. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Welcome back. President obama is set to deliver the annual state of the Union Address this evening, and sheila has three themes investors should keep a close eye on tonight. Thats right, kelly. And the number one thing to watch for today, Energy Independence. Market watchers say any favorable talk about Energy Independence is a plus for the producers and refiners. Look, the president may talk about wind emergency or push construction to export natural gas. That could be a positive for the pipeline companies. Like an excel energy or range resources. Number two thing to watch for, housing finance. If the president actually pushes to expand housing credit or maybe expand those refinancing opportunities, jeff clinekleintop case watch a mortgage heavy bank like wells fargo. They could be impacted. Minimum wage is likely to be atopic. That could be a negative for the restaurant and the retail industry. Really, a range of Companies Call into this. Anything from a mcdonalds to a macys or even someone like the gap. Here is the bottom line investors guide to the state of the union is really a sector specific play. You want to watch specific stocks you want to watch specific sectors. Big overall market moves are rare. The average move is only a little more than 0. 1 . So it really is a stock specific, a sector specific play. All right. Some great ideas there, sheila, thanks. The white house says president obama will focus on economic inequality. Joining us now, michael strain, resident scholar at the American Enterprise institute, andrew palmenteria and steve liesman. Mr. Strand one of the arguments you make is we ought to concentrate less on the highest 10 of earners and what theyre earning and concentrate more on the lower 10 , maybe even the lower 1 . How would you concentrate on them . What would you do to help that part of the income curve more up the income curve . Well, you know, there are two ways to deal with inequality, bring the top down or bring the bottom up. I think we should be bringing the bottom up. A big, big problem at the lower end is unemployment. There are things the government can do to help the unemployed. Relocation assistance so they can move to a better labor market is one example. These solutions are key to helping these folks and to lowering the income gap. Andrew the president today using an executive order to raise the minimum wage for federal workers. Whats your take . So my take in general, and im very interested to see what steve has to say on this weve been down this road for years on the longterm unemployed and when you increase the price for something, the demand for that something goes down. So if we increase minimum wage from 7. 25 to 10. 10, thats going to impact, you know, a couple of Million People out of the workforce, number one, and its doing virtually nothing to stimulate structural consumer demand which is really whats needed to get the economy to grow in a much more organic way. So im kind of disappointed that the president has picked this big idea as, you know the centerpiece of his state of the Union Address. This is a big democratic idea. Mr. Strain, very quick, and i want to bring steve in after you comment on this you say dont raise the minimum wage lower the minimum wage for the longterm unemployed and lower it for youth. What effect would that have . I think right now theres a lot of evidence that firms feel like hiring a worker who has been unemployed for six months or a year is a big risk and a way to lower that risk is to lower the amount of money the firm has to pay. A firm might say 7. 25 an hour thats too risky but maybe id be willing to do it for 4 bucks an hour. If we do that we might be able to get more of these folks back into jobs and they can get a better job or get a promotion so theyre not earning that. Steve, whats your thought . We have done a couple stories, and michael has written about this as well which is why im so interested in his writings on this. Theres a couple European Solutions out there. First of all, i think were at or nearing a place where Monetary Policy is not going to help those who have been unemployed for six months or more. Monetary policy. Yes. I think the fed has done a lot of heavy lifting. One of michaels point is we make the shift over to the fiscal side. There are a couple European Solutions out there. Work sharing. We did a story out of germany on this where instead of laying off people, what you do is end up reducing the number of hours for all involved and the government comes in and helps out. The other thing is the use of vocational schools and education. I was fascinated to read what michael rights out of the aei and kevin has setsett. There are important places where democrats and republicans actually agree. Look, minimum wage is not one of them, but the earned income tax credit is one of them. You have conservative scholars and liberal scholars both saying steve do you think the president calls for Something Like that tonight . What is that . Do you think youre right, this seems to be one intersection of policy that people that theres bipartisan agreement around. Do you think that means we hear anything about it tonight . I think he will hear about eitc this evening and minimum wage but i know thats not on the other side. I think theres very little chance of that happening. I think there were reasons to support a minimum wage. I dont think weve tried it steve can i ask you a question . Go ahead. In the Third Quarter last year, 68 of gdp was driven by consumers, right . So how are we going to keep that going . Were either going to see consumers continue to lever up through debt or we need to see real wage increases. So i think these things that youre talking about are great, but we need to do things to address why wouldnt more money in peoples pockets be something to help keep Consumer Spending going, especially if the data is right that the gains are going to those at the top, then things we could do to increase wages at the bottom or income at the bottom would seem to be helpful . There are a million and a half people in the country that make minimum wage and another 6 that work multiple jobs. Whatever percentages you assign to those, youre talking about a small percentage of the workforce. Agreed. So im not totally against the idea. I just think theres the old dont make the perfect the enemy of the good. If thats something that could help a bit and you layer in Vocational Training and you layer in eitc and do you what i think michael is interested in doing which is focusing on the bottom 1 in way that is increase opportunity to those to that class of people then i think thats gentlemen, maybe im misunderstanding, but correct me if im wrong on this, i thought the earned income tax credit which everybody seems to agree is a very helpful tool is a refundable tax credit which means money goes out through it. If you expand it that money, if youre going to maintain the budget the way it is has to come from somewhere. Where does it come from . I tell you one place, we spend a lot of money on rich people through the mortgage Interest Deduction and state and local Interest Deduction. If we take some of that money and we pump that into a more generous eitc, were taking money from wealthy people and giving it to poorer people were making the tax code more efficient by broadening the base. You know its the third rail to do anything to the deduction on mortgages. Is the tide shifting im not in congress fortunately. In the context of broad based tax reform thats a great idea. Its a great idea. I hope its a practical one. Thats another place, by the way, where when i talk to conservative and liberal scholars, they agree. The idea of tax entitlements that Marty Feldstein calls them at least for the wealthy is something that needs to be curtailed. Theres no limit son the amount of spending that happens. It benefits those who dont necessarily need the benefit at the expense of those who need it. Small Government Conservatives should be able to say the government shouldnt be spending money on the top 20 . Why isnt the president coming out steve, tonight and saying we need to reconcile our longterm fiscal imbalances and this corporate welfare youre talking about should be at the center of that discussion . I completely agree with you. Why isnt he talking about repatriateing foreign drive earning. This is small ball versus like im the president. I dont answer for or speak for the president. I think those are good ideas. What drives me nuts andrew is why the thing we agree on why we cant make any progress on that stuff. Sure theres stuff higher taxes, lower taxes, we disagree on that but the notion i think thats a great point. The notion of using the money we already take from people like Oil Companies dont need 80 billion a year in tax credits. Thats insanity. We have to leave it there, guys, but there will be plenty more happening. Only about 5 1 2 hours away from that important discussion. Really want to thank you all for joining us on this issue. Thanks kelly. Thanks so much. Carl quintanilla, john harwood, and i will have complete coverage of the state of the Union Address at 9 00 p. M. Eastern. The dow is up 98 points, so gaining a little traction. The s p 500 higher as well. And the nasdaq is up about 12 points with about 27 minutes before the closing bell. Well see, perhaps well hit triple digits. Will another batch of weak commitment data force the if he had to abandon the taper . Could it increase economic stimulus measures . And could bitcoins future be going bust after two Bitcoin Exchange operators were charged with Money Laundering . Well take a look later on the closing bell. Uncer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. A little gaining of traction there for the dow industrials. Up now 102. The nasdaq higher by roughly 12 and the s p 500 up by 12 at 1793. Kelly . Pfizer and visa two of the big movers on the dow today as well. Disappointing economics data across the board though. It was the durable goods number which tracks big ticket manufactured items tumbling more than 4 in december. Home prices also falling the month before. Plus lets remember the disastrous december jobs report and all of this bad news as Ben Bernankes final fomc meeting kicks off today. Will this force him to taper the taper . Lets brick in peter schiff of euro pacific capital. Also with us is jeff cox, financial editor of cnbc. Com who has been predicting the fed would have to reverse course on tapering. Why dont we just start there, jeff. Why do you say that . Why do you think the fed may be halting and ultimately have to stop its tapering . I just think at some point the fed has gotten themselves to the point of no return on this. I dont really think they know how to get out of the box theyve gotten themselves into. I do happen i think that tomorrow the market is really looking at the precision probability of them adding another 10 billion to the taper. I dont think thats going to happen. I think theres a very good chance that tomorrow they could say, no, were going to wait. For a lot of the reasons you pointed out, tyler. The Economic Data does not look great right now. The equity markets are not reacting very well here. I think theres a lot of uncertainty. We dont know which way things are going in the emerging markets. So i do think theyre going to take their steps very carefully here and i would not be surprised at all tomorrow if they do say were going to stay at that 75 billion mark and see how things transpire down the road. All right. Peter, you dont what do you think the fed does . I dont disagree with that. I mean i think janet yellin certainly will taper the taper talk. In fact, i think shes going to reverse the taper and end up doing more than 85 billion a month in qe. Right now the markets are going to continue to decline as long as the fed stays on this taper time line. And i think the fed is going to be cognizant of that. If you remember theyre basing the taper on the recovery which is the result of the wealth effect of a rising stock market and a rising Real Estate Market that allows us to lever up and borrow more money to buy more stuff that we cant afford. But as these assets bubbles deflate because the fed threatens to remove the props, now all of a sudden the recovery disappears, were headed right back into recession, and the only way to stop the markets from falling and to revive the illusion of a recovery is to do more qe and that is exactly what the fed is going to do unfortunately. What about that jeff . Do you think if the taper went away peter makes the case wed go back into recession. Is that likely . People have been saying the economy is actually doing pretty well. Peter makes the case its only doing well because the fed is paying it to. Tyler, if you look at the numbers for last year. The Earnings Growth for the s p 500 was about 6. 5 . The fed Balance Sheet expanded by 33 . Do the math. The s p 500 went up 29 . Its 33 or 6. 5 closer to 29 . I think its pretty apparent which is the tail wagging the dog here. How independent is the fed . I think less independent than they would like to be. I dont think this is a decision that theyre going to go into willingly, but i do believe that, yes, they are being its almost like a stockholm syndrome type thing. Are you saying this happens this year imminently, that the fed is going to have to reverse course . Oh, i think so. I think its going to be this year, and, you know, tyler, i dont think the economy is actually doing well. Thats the problem. Its just the illusion. Its the stock market going up its the Real Estate Market going up. It makes people think the economy is doing well but its actually doing lousy because the Monetary Policy thats needed to prop up these bubbles is preventing the kind of restructuring we need in this economy to actually produce legitimate Economic Growth and good jobs. Thats why when you actually poll the public and ask the people how they feel to them it feels like a recession because it actually is a recession. Maybe for a few people on wall street the economy is improving but its not on main street. I take your point that the economy is doing well because its being paid to do well. It only looks like it is doing well. Its lousy. Its a disaster. In that scenario, what should i do with my money, peter . What should i do . You should be buying gold. You should be buying mining stocks. You should be investing abroad. You should be getting out of the u. S. Dollar. When the fed surprises everybody and does more qe and people realize the box that were in that its qe infinity that there is no exit strategy that exit is impossible that its ever larger doses of this monetary heroin, the bottom is going to drop out of the dollar. An economy that lives by qe dies by qe. If i could just add to that i have a post up now on cnbc. Com. I think basically were all looking for this correction in the market to come and i think that the people who try to time this market and wait for that 10 or 12 or 15 drop are going to find themselves holding the bag here because i really dont believe i think the fed will move in way before that correction happens and listen history has taught us if its taught us anything about Central Banks, it tells us they always move too late. Theyre always behind the curve, and i think that this central bank is going to prove to be into different than any of its press sesors or predecessors. Thank you. We have about 15 minutes left to go before the closing bell. Were hovering around the triple digit mark for the dow helped by some key components like visa and pfizer. And yahoo Ceo Marissa Mayer has on a buying spree snapping up more than 20 companies. Josh lipton has a earnings preview on yahoo as we await to see whether mayers moves have paid off. After the bell bitcoin busted. Theyre front in center in a Money Laundering conspiracy. Thats all coming up on the closing bell. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. Welcome back. Investors getting set for a pair of crucial earnings that will hit just after the bell, tyler. Josh lipton has a review of what to expect from at t and yahoo . Old and new media there, josh. Yeah absolutely. Tyler, two big earnings after the bell. Here is what the street wants to see. Yahoo analysts looking for eps of 39 cents on revenue of 1. 2 billion. That would be basically flat from one year ago. Marissa mayers plan for yahoo has been to buy companies, improve products and increase traffic but that has not led to Strong Financial results. Investors will pay close attention to display ad revenue as well as how alibaba is performing. As for at t analysts not expecting much. Eps of 51 cents on sales of 33 billion. One number to watch there is the number of post paid Wireless Subscribers in the Fourth Quarter. If at t misses on that number look out, it could indicate tmobile is gaining ground. Back to you. Josh lipton reporting for us from silicon valley. About 13 minutes before the closing bell. The dow has been up about 100. The s p gaining about i think it was 12 points last i looked. It always goes away right when im ready to talk. Thats true. Art cashin pointing out 30 of those points on the dow is coming from visa which is the priciest stock on the index and its having a good day. Still to come on the closing bell, president obama will be delivering his state of the union in the face of stunningly bad poll numbers. Can he get anything done on his economic agenda when 60 of the country say were headed in the wrong direction. Tune in tonight because starting at 9 00 eastern will be hosting coverage of the address. Tanilla and myself will have live reports from washington with john harwood and a great panel of guests as well. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. We are about ten minutes away from the close, about nine really. Industrials up 90 points. The nasdaq higher by almost 10 and the s p higher by 10. 5. So reversing some of the losses from yesterday and friday and days prior. Joining us back from the New York Stock Exchange erin gives from s p iq and skip alsworth from the Hennessy Technology fund. I dont know if you were there for the last conversation with peter and jeff. At the end of it i kind of wanted to slip my wrist. Peter was saying buy canned goods and bottled water, jeff less so, but you get the point. Is it as nasty, erin as they see it or do you see it a little less so . Peters point was whatever Economic Growth we have is totally false and driven by the fed and its not sustainable. What do you think . I wouldnt quite say to put all your money under the mattress and buy canned goods just yet. I think theres a lot of anomalies happening in december and some odd data which i agree with. Look housing started declining as soon as the fed started talking about tapering and rates came up. And weve had all these excuses about housing just isnt coming back because of seasonality and were looking until february march, and april. Id wait until then just before buying those canned goods and look to see if we have that recovery. The same with payroll numbers and jobless claims. Skip what can i buy reliably safely here right now . Well id like to proffer get into the Natural Gas Industry and particularly the distribution side. Natural gas has had a marvelous revolution. We have plenty of supplies and were building the demand side and so the distribution part of the Natural Gas Industry is really separate and devoid from all these other issues that are talked about. Names like names like . Kinder gor erer morgan transcanada, embridge. An unusual name is Berkshire Hathaway with its investment in Midamerica Energy and burlington northern. The railroads should benefit tremendously from transition from diesel to natural gas as a fuel and have an upwards of 50 , 60 fuel savings. Erin, what do you see thats worth buying at these prices . You know besides afew of those, there are some places within the energy space, but another one we also like is in the materials, specifically chemicals. Eastman chemicals is one of our favorites. It has one of the lowest estimates for 2013 but looking at 2014 coming off of those lows these estimates for 2014 have had some of the highest revisions upwards in the past few weeks and we think they could really be some of the big winners going ahead. Thanks for your help. Up next well come right back with the closing countdown. And also after the top of the hour earnings from at t and yahoo . They are due out very shortly, and we have full Team Coverage standing by to dissect all the numbers and what they will mean to those Company Shares and the overall market as well. 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[ car alarm chirps ] hurry in to your authorized mercedesbenz dealer for 1. 99 financing during our certified preowned sales event through february 28th. [ male announcer ] once, there was a man who found a magic seashell. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from Td Ameritrade. All right. We have about four minutes, three minutes to go. The industrials up 92 points the nasdaq higher by 10. 75 and the s p up by 11. Time now for the closing countdown, and back with us on the floor, terry dolan from benjamin and gerald brokerage. Terry, welcome back. Good to see you. Thank you. Compare and contrast as the old essay question went the days market tone and what we have seen over the past three, four, five days. Todays market tone is one a little more of relief. Obviously, we had really gone down a little further than even i expected in terms of a mini correction here. 15,800. Im a little happier in terms of the technical relief the rally has provided. It looks to me we will be able to feel a little more comfortable that the market will stabilize around these levels and move forward. What if anything do you think investors will be looking to hear the president say tonight, number one, and, number two, looking to hear what the fed has to say tomorrow . Well i think as far as the investors are concerned excuse me as far as the president is concerned tonight, i think the Investor Community is looking for him to figure out ways in which hes going to be able to lay out a better plan for expansion in the economy and how he can address some of the issues out there that will give us better employment Going Forward. As far as tomorrow and the fed, i anticipate theyre going to continue along the road theyre going. Theyre going to take a gradual foot off the gas, if you will on the tapering side and i look for them to continue to keep a real close nose to inflation to see how thats going to impact when you say the foot off the gas on tapering, you expect them to cut even more of their bond buying . I do. That is what i do expect them to do. I all along 23e89felt like it was a common sense approach where they would ease rather than shock the markets and thats what theyre doing. I think that in tan dom withdem with decent economic numbers, growth Consumer Company dense will leave a window for the fed to continue to act in that fashion. You have there on the floor of the New York Stock Exchange, you have to have one eye out the window not only on the super bowl festivities, but the emerging markets. How do you process that information . Take me inside the bubble. How do you think about it and do things in light of whats gone on overseas . In many times you got to take it as a comes. You got to look to see what the strategies are after the events begin to unfold and many other cases if youre fortunate enough to see something unfolding that may be an ability to preeveryone Something Like that thats terrific. Its almost defend after the fact in certain situations especially when things come out of left field. Has the pullback been and modest though it has been 3 or Something Like that so far this month, has it been in your view healthy . Yes very healthy. I was very happy with it. I anticipated it. I was hoping for it. Rather than see the move we saw late last year get extended to the point where its way overbought. Yeah. I guess thats a good happy note on which to end things here as they start to ring the bell down at the New York Stock Exchange. Terry dolan thank you very much for being with us. Its going to be a busy hour ahead and kelly will take you through it. Thank you, tyler, and welcome to thethe closing bell. Im kelly evans. Stocks are rallying all three major indexes, in fact. This does mean the dow has snapped a fiveday losing streak as it adds about 89 points. Thats half a percent and we came a little off the highs. We were up triple digits 4edheading into the close. We want to emphasize not only that the dow industrials is higher today but so is the nasdaq, so is the s p 500. Only the fourth time in the last four weeks theyve all been up together. That gives you a sense of how choppy and mixed this trading activity has been. And lets bring in todays panel as we wait for a couple key Earnings Reports due out in just moments. Cnbc contributors elon and carol roth. Sharon epperson and kate kelly. And fast money contributor tim seymour. Welcome to all of you. Its tim and the ladies. Yes. Lucky man. While we wait for at t and yahoo , we have a bunch of people standing by to cover it. Quick thoughts about the action were seeing today, sharon . One of the things investors are probably really happy about and Retail Investors and longterm investors is that finally we are seeing this uptick in the market but it doesnt mean its still not important to consider rebalancing and making sure that youre where you want to be for the first of the year. Dont expect the same euphoria we saw at the end of last year. Today may be a blip. Till be interesting to see whats happening in emerging markets. I think sharon is touching on a key issue. People might be exhaling after a very rough couple days and just feeling like some of these emerging market issues weve been seeing might be i had idiosyncratic and a reminder that the emerging markets have that been at issue are a relatively small piece of the global economy. So a relative safety in the u. S. Although, of course, people are looking to see what the fed is going to do. We have two big fourletter acronyms were sort of dealing with. Sot, state of the union tonight, fomc elon. I was going to ask you about this. Its Ben Bernankes last meeting. Do you expect any market activity today is related to a fed thats going to be less hawkish than feared . I think what today showed is the talk that the fed might pause tapering is premature. The fed is not surprised by the fact that Global Markets would be worried about the pace of the tapering and what it looks like Going Forward. Thats why they started with such a small number to begin with. The fed has been bracing for this actually since december. And if you look at the comments of dallas fed president richard fischer, he said he would not flinch in the face of a correction in order to continuing to vote for taper. In september when they decided not to taper, they did at the time cite some concern about emerging markets and financial conditions and while the economy looks okay its undeniable financial conditions have tightened a little bit this year, but it sounds like its just not quite enough yet for them. If the fed is worried about markets, theyre worried about the International Picture more than theyre worried about the domestic picture. But the fed has said that they are not going to be reacting to every single change in the markets. We saw a little dip. We saw the markets come back and its just not enough for the fed to make a change. They do not taper, i think we would have a big problem. I think the market would respond to that as a panic and it would be a bad thing. Want you to hold that thought so we can get to the breaking news. At t reporting numbers. Jon fortt has them. Jon . Kelly, it looks to be a modest beat. 33. 2 billion in revenue. Thats a hair above the 33. 1 billion the street expected. And the nongap eps appears to be 53 cents, above the 51 expected. On the outlook, it looks like theyre expecting Capital Expenditures in the 21 billion range. Now, here are some key numbers in the wireless business which we want to look at in particular. Wireless Service Revenues growing 4. 8 and phone only post paid arpo arch revenue per user, up 3. 9 . Thats also positive. At t saying smartphones and tablets tablets drove that growth. Wireless subscribers of 809,000 added in the quarter. Record low Fourth Quarter post paid churn. Thats people leaving the network. Thats key because tmobile is trying to push customers away from at t. At t is countering trying to poach from tmobile in q4. At t seems to have done fine. The churn number is 1. 11 compared to 1. 19 a year ago. Smartphones now 93 of phone sales. That is a record for them kelly. Wow. Jon, fascinating stuff. Jrn john fort, thank you. I want to bring in david burkes for some instant reaction. David, what jumps out to you . The initial reaction appears to be a modest beat. They beat on revenues, on earnings, and on Wireless Subscribers. And the Wireless Subscriber growth is interesting here and i wonder if tmobile shares tomorrow will be under pressure because of this. So how does this change relative to your expectations, david, how the Company Appears to be doing at this jinx touruncture. The consensus was they would add 632,000 wireless customers. They surpassed it by over 200,000 which is extra impressive given the intensely competitive nature of the industry and tmobile has been targeting their customers over the past few months. How aggressive have they had to be to not only attain but attract customers in the light of increasing competition . That to me would sound like something where you have to watch margins but it doesnt seem to be concerning investors at this hour. Thats right. What id like to see more kelly, is what the wireless ebitda margins were in the Fourth Quarter. The expectations were it would be around 33. 7 . With maybe a little higher earnings than anticipated, maybe margins held up a little bitter than what the street was anticipating. Okay. David, thanks very much. Jon fortt, hearing that and well try to pick out that margin figure if we can, but anything else as youre looking through the report jump out at you . Well, i think in particular i just want to point to that churn number as being particularly important. Also, theyre saying on uverse, an extension in a way of the wireless business the way they look at it its more digital content, theyre saying churn is low in that area too. Thats their push into the tv space. So all of that positive particularly in the context of apple saying last night that carriers in the u. S. Are slowing down their willingness to upgrade customers early. This kind of strength and those key metrics from at t might point to their confidence why theyre willing to do that. At t moving to the upside after hours, jon, thanks. Stay with us if you will because now we want to switch gears and get over to yahoo which is also moving higher right now. It looks like the Earnings Report there is a beat as well. Josh liplipton what can you tell us . Yahoo just reporting. Remember the street was looking for 39 cents on 1. 2 billion. Yahoo reporting 46 cents on 1. 2 billion. Looking through the product segments display revenue, really the core of yahoo s business. The street was looking for 500 million. Yahoo reports 491 million. Search revenue, the street was looking for 443 million. Yahoo reports 461 million. Kelly, back to you. All right. Josh thanks very much. Now, i want to bring in dan morgan as well with his thoughts portfolio manager. Joining us now on the newsline and, jon fortt with us as well. Dan, first to you. So were hearing perhaps a little bit better in terms of the monetization story. Is it good enough . Its pretty good, kelly. I mean obviously we were looking for them to exceed numbers in terms of search ad revenue and display ad revenue. They were slightly above on search ad revenue. It was a big beat on the bottom line in terms of earnings. Revenues look like theyre pretty much in line with expectations. Just initially looking at the report, obviously a big beat on earnings but well have to drill down and take a look at how other things are kind of coming together on this quarter. And, dan, you have detailed this and others in the past as well but so much of yahoo s share price is a reflection of its stakes in alibaba and yahoo japan. Those two things plus the cash combined equal out to Something Like 30 a share if you work through it. So if we see that yahoo is just now moving up to 39 after hours, that would suggest that the core yahoo business is becoming more profitable. Is that a fair characterization . Well youre right. I mean the trade has been ali alibaba alibaba, its association in terms of the stake, the 24 stake yahoo has in them. You know its kind of discouraging when you net out these numbers and come up with 30 with cash and yahoo japan and alibaba and then you see whats leftover and thats kind of what the street is valuing the remainder of their business. So wed like to see, kelly, obviously a little bit more of a premium put on the yahoo franchise and not so much on these investments like alibaba. Absolutely. All right, dan. Thanks. John fort, what about you . It will be interesting to see what Marissa Mayer has to say in that video call around 5 00 eastern. On the display business that number is not particularly strong, the 491 million. Its 6 decrease compared to year before but interesting here, the number of ads sold increased 3 compared to a year ago and the price per ad went down. I believe thats a reversal of the trend we had been seeing where yahoo had been selling fewer ads and charging more money for them and the thought was that can only go on for so long. If they are able to maintain the reversal there and actually grow the number of ads that they are selling as they continue to increase engagement which weve seen in the com score numbers, it could be some of the early signs of a turnaround but clearly it hasnt shown up on the top line in revenues quite yet, kelly. Jon fortt, thanks very much. Our thanks to david burkes and dan as well for all their thoughts on these companies. Yahoo shares are moving higher by about 2 . They did hit 39 in after hours trade. 41 is the 52week high. Joule Julia Boorstin joining us with results frome ea. The company is lowering its full year Net Revenue Guidance below what wall street had expected and also below what it had previously forecast but the company is increasing its Earnings Guidance for its fiscal Fourth Quarter, the Current Quarter were in now, but its still lower than wall street had expected. Looking at the Current Quarter revenue came in at 1. 57 billion. Thats below the companys guidance and also below wall street expectations. Noncap diluted earnings per share came in at 126. It was above both the companys guidance and wall street expectations. Three pennies better than wall street had expected but, kelly, the street really seems to be focusing on that guidance which is negative and the stock is lower. Back over to you. Yet another instance of this happening during this earnings season with the shares down 2. 5 . Julia, thanks. Thoughts, reaction from our panel digesting the earnings. Tim, what do you make of it . I like yahoo a lot. I think yahoo got sold off not only as a stock but also because of the pressure that was on a lot of the asia internet names because of the pressure from the s. E. C. So when a lot of people do what a lot of traders do is they basically cut their flowers and they keep their weeds. I think yahoo is a flower. The reasons but, tim, hang on a second. Im going to jump in. Even as youre talking all of a sudden it looks like yahoo has reversed and turned sharply lower now and im tourous perhaps theres been some look theres some detail clearly in the Earnings Report people are seizing on. As guy says im trapped in here like mr. Van buren but ill tell you this, what we know about yahoo is that on some of the parts, i have got about 48, and so what we also know is their core business isnt doing a whole lot. Ive got alibaba at 150 billion valuation and yahoo japan taking me much higher with this stock and those are things i know about. When i look at the earnings in the entire sector at ts numbers i think are fine but the numbers that weve seen out of apple, samsung, and even at t tell you a few things, that big trades in 2013 are challenges in 2014. The smartphone space is very saturated. The high end is uber competitive, and that the carriers themselves are beating each other up right now. The arpus are under pressure. At t has had the wind at their back for two years. Kelly, i think were seeing evidence of the phase of volatility that were clearly in now and that may lstast for a while. I think investors are going to be very picky about the details. Overall a reasonably Strong Quarter for apple, but iphone sales werent where people were expecting. I think youre seeing people combing through the press release, looking for signs drilling down to see if theyre getting quality of earnings they want. If not they might sell. Quickly, carol . I think it reinforces the disconnect between top line and bottom line. Were talking about earnings being fully valued. Thats assuming a growth premium and to have a growth premium you have to have top line growth. Thanks everybody. You can be sure to stick around and catch more of time seymour on fast money at 5 00 p. M. Straight ahead, was General Electric the canary in the coal mine for wall street on the recent pullback. One of the most widely held stocks but one of the worst dow performers on the year. Jeff immelt buying 1 million worth of the shares. Should you buy along with him . Also coming up well go live to turkey where the central bank there is holding an emergency meeting right now. Find out what impact events 5300 miles away will have on your portfolio. Its pretty significant. Find out why after this short break. Youre watching cnbc, first in business worldwide. En to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance c youre watching cnbc, first in spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. Welcome back. Well, you can say this about turkey, its got almost nothing in common with las vegas. Why . Because whats happening in that country right now may not stay there. With emerging markets under pressure central bankers are holding an emergency meeting. Cnbc chief International Correspondent Michelle Carusocabrera joins us now live from istanbul. Michelle, a quick trip and i wonder if this lastminute meeting itself sends a worrisome signal to the market . Well so far the turkish lyra has actually appreciated substantially since they announced the emergency meeting, but yes, theres a lot of concern. Were 45 minutes away from this meeting where theyre expected to hike Interest Rates and dramatically. If you look at whats happened to the lir ra in the last 48 hours, you can tell the market widely expects some kind of Interest Rate hike. If you look at the longer term chart, you can see it has been hemorrhaging. Theres been political upheaval in this country thats made investors nervous and the fed tapering. Listen to the expectations. Possibly anywhere from 2 to 5 hike in Interest Rates here 45 minutes from now. In the United States we talk about a quarter of a percent. Here theyre talking about full percentage pourntsints and some think it could be as much as five percentage points. Its not a done dellal. Theyre under enormous political pressure not to raise Interest Rates. Look at one of the front pages. Theres a photo of the head of the central bank and the headline reads, square your shoulders, dont hike. The Prime Minister of the country is frightened that if Interest Rates go up that thats going to hurt the economy. He is seemingly unaware of the fact that massive capital flight can also hurt the economy, and as you pointed out at the very top, turkey is starting to become emblematic of the emerging markets as a whole. Theres been great concern across many of these countries and a lot of investors want to look and see whether or not the Central Banks will do what they think is the right thing in order to stem the decline and capital flight as well. So this could really set the tone for a lot of the other currencies and markets we follow. All right. And that decision due shortly. Michelle carusocabrera thank you so much, as she stands by in istanbul this evening. Interesting, we talk about Central Bank Independence, but the Federal Reserve doesnt have to deal with the president standing up and saying they shouldnt ease. This is a really good example of why its important to have Central Bank Independence so they can make the right decision for that economy. That being said the world bank has already identified turkey as one of the countries most vuler innage to the fidseds taper or a rapid increase of Interest Rates in the u. S. I think what were seeing is exactly the problem that emerging markets face. What happens when the taper comes or the taper is faster than expected andle lethe capital leaves are we making the argument that the fed is independent in the u. S. . Yes we are. I know in theory theyre supposed to be independent, but the reality is we know theres discussions going on behind closed doors and i think most americans would say that they are not as independent as one might think. But do you think for the most part the people who are sitting around the table or in the board room as we should say during this twoday meeting feel as though theyre not acting in what they actually think is the wisest thing for the central bank to be doing . I think theres definitely some discussions going on behind the scenes that influence theyre obviously in touch with the white house. Ben bernanke has lunch with jason furman. They want to keep lines of communication open. However, the fed has also been very active in criticizing congress and criticizing the administration for saying hey, we cant do this alone. We cant be the only institution in washington that is supporting the economy. Congress needs to get its act together. They were very vocal during the debt ceiling debate. The idea that the fed is somehow kowtowing to the white house or monetizing the debt is simply incorrect. What were you going to say, sharon . Back to the emerging markets, a lot of investors are being told by their financial advisers, those i speak to that they need to make sure their portfolios are properly allocated in emerging markets. Then they see Something Like turkey happen and theyre thinking, okay so what am i supposed to do here . I think now is a very good time to make sure that people understand that that means youre supposed to be well diversified in emerging markets as well in these different countries, and that you have to be able to identify those that as michelle mentioned, are very vulnerable at this time and where your money really is in these funds that you may be invested in that are broad emerging market funds. I think thats something thats a lot of investors may be taking for granted. I think thats a smart point. Certainly emerging markets have been a hot trade in recent years for investors and something to put some research into. As you can see with turkey though, politically strange times to which International Investors are now exposed. I was reading about the Prime Minister blaming the bbc and the wall street journal for some of the economic anxiety surrounding his country. The old blame the media attitude. And then weve got this literally this midnight Central Bank Meeting that michelle was talking about may result in a 2 to 5 hike. So really astonishing. Not the kind of thing you would see certainly in the u. S. Well at least right now. Right. General electric moving on to General Electric shares they have been stuck in the mud. Down over 6 from a week and a half ago when they released earnings. The worst dow performer this year. Why did the ceo just spend 1 million of his own money buying up the shares . That discussion right when we come back. Customizable charts, powerful screening tools and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, Td Ameritrade and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Huh, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Welcome back. Take a look at yahoo shares. Theyve been on a bit of a roller coaster ride since releasing earnings. First higher now down 5 after hours. Lets get more on whats behind the selloff. Josh lipton rejoins us. Josh . Yeah, kelly. A couple numbers just to flag for you as we make our way through this release. Yahoo saying that nongap net income of 130 million to 170 million, thats substantially below what the street was forecasting, so that could be part of the downside action were seeing here about 5 right now. Also as we get yahoo reporting, we also get the latest Financial Results from alibaba, the chinese ecommerce giant. They give you the latest results from q3. Revenue did pop 51 to 1. 8 billion yearoveryear, but, again, maybe the action were seeing right here, kelly, could be this nongap net income number which did come in below where analysts had predicted. Back to you. All right, josh. Thanks very much. Now, this month alone General Electric is often by 9 . It is the worst performing dow stock of the new year. Today its rallying a bit after jeff immelt told the world he thinks his stock is oversold by spending 1 million of his own money to buy shares of his own stock. Should you follow his lead and buy some General Electric . With us Steven Whitaker and zachary karabell. Great to see you both. Zach first to you. Ge, do you like it here . I have owned ge personally for years not because i expect them to do extraordinarily well although frankly it did expertly well last year but frankly because i think its a mega cap company that happens to be well run that has a lot of discipline that is trying to innovate and change although, you know, 140 billion, 150 billion Revenue Company as we have seen with apple, its a pretty high bar to create something new. While they sold the network that we are currently on as a way of focusing their business i think they have executed as well as a Large Company in a relatively slow growth world could execute, and i imagine thats one of the reasons why immelt himself is buying more of the stock. Sure. And its trading around 25 today. So is it undervalued . I think theres 12 upside. I look at value in the industrial side separate from the capital side. You put 17 to 18 times on 2015 earnings, you get 23. You can get around 28. I think upside beyond that is a little tough. Relative to other industrials, i think theres more upside elsewhere. But for ge as the other speaker mentioned, its a big company. Its a challenge to grow it and youre starting to see a global sink sink ron nis across a lot of industrials. You have a relatively respectable dividend yield. When you add that to a world where bonds are i think going to find a questionable range, its going to be hard to know where the price of bonds are going to be and rates are pretty low, you have ge with a dividend yield thats been going up consistently. One thing immelt and the board has done they said were generating a lot of cash. We dont know where to buy and where to extend were going to give money back to the shareholders. Im not crazy about the qege capital part. Why has the stock been an underperformer . When you look at how much eps growth they will deliver, youre talking about 5 or under. A lot of that is a result of ge capital. Its peers are operating with growth of 10 , 12 , sometimes 20 eps growth. Investors would typically turn to the higher eps Growth Companies without the ge capital risk. What do you think about the signal of a ceo buying shares . Its not usually the best gauge but perhaps immelt since he hasnt bought in some time this really should be taken seriously. There are two ways to look at it. This is clearly a sign of increased conviction in the company and their earnings trajectory and the global improvement were seeing. On the other hand, if you look at all the times hes bought stocks over the last ten years, its not necessarily been at the best timing from an investment level unless you take a much longer time frame in mind. Zach what about you . I think you shouldnt try to gape out some kind of quantitative pattern based on ceo purchases other than to say hes in the company, deeply invested, he cares about it. I think he happens to be an impressive individual but thats a purely subjective approach. Im going to take it at that, hes committed to the company hes running and he should be. Zachary steven great discussion. Well coopkeep an eye on those shares. Will illegal transactions be the reason bitcoin bites the dust . Speaking at a hearing today, this coming on the heels of a high profile arrest of someone the twins were doing business with. Well have the latest developments in this story next. Welcome back. Were looking at bitcoin which is edging back towards that 1,000 mark again, but new yorks top Bank Regulators are holding a hearing on the Virtual Currency a day after the arrest of bitcoin entrepreneur charlie schrems arrest. Well, a group of five bitcoin entrepreneurs and investors testified in todays first panel right behind these doors. They downplayed the news of charlie schrems arrest. He was vice chairman of the ed a Advocacy Group the bitcoin foundation. The panelists say the arrest show current laws are Strong Enough to regulate digital currencies. They urge leniency from regulators on Digital Currency startups today saying compliance could crush their ability to create and overregulation could drive them offshore. They also touted bitcoins potential as a cheaper, faster way to transfer money than the traditional ones offered by banks. Here is Tyler Winkle Voss of winkel voss capital. So the when bankers who have 3 credit card fees and stuff, their solution they dont have one. The tone of the hearing was civil. The superintendent of Financial Services for the state of new york, ben lawski saying regulators dont want to clip the wings of a new technology. One recommendation for Union Square Partners fred wiltsonson, the u. S. Should be more accepting than china has been. The lesson from the internet is anything china bans invest in. This is about freedom ultimately. The second panel continues as we speak. This is a twoday hearing. It will continue tomorrow. Back to you. Our thanks to mary thompson. I want to get some reaction from the group. Its interesting the way that this is positioned as a fight for freedom, but kate it was a pretty big move, the arrest of these two guys. Its going to make a lot of people think twice potentially about investing in this space. Im just thinking in terms of headwinds, bitcoin, turkish lira. Just kidding. Its become a hugely popular trade and one bad apple im sure most people would say doesnt mean the whole fruit salad is poisoned. I lost track of my met faaphor there. This is a lightly regulated area that gives people a lot of concern. Carol is this about freedom . First of all, i feel really bad for the winklevoss brothers who must be sitting in a wine cellar going cant we do anything right . I dont believe in bitcoin. Anybody who is trading bitcoin is doing it in a similar manner you would going to las vegas and say this is fun. As i have said to you before i feel like this is the Second Coming of beanie babies except you wont have anything to hug when the whole thing falls apart and i dont think any legitimate investor should be investing. But beanie babies also didnt facilitate drug trades you never know. You take take out the beans inside. The fact were talking about greater regulation for bitcoin legitimizes it even more so and so thats something i think investors need to be concerned about or those that are investing in it need to think about and those that are potentially investing in it need to think about, and one factor though that may be in bitcoins favor is what i have been covering so much is all this credit card fraud and how those absolutely. Proponents of bitcoin say this wouldnt happen if we had bitcoin. So i think some folks who may not know much about it other than theyve heard this term may say, okay i know i dont want my personal information stolen. So is this the answer . The hackers will hack directly into their account. I think its worse. Instead of hacking the intermediary of who will protect you, they will hack into your account and you will have no recourse. There are no fees attached to it and thats the beauty. What do you think of that . Its anarchist to some extent. It says we want to allow for any kind were going to turn a blind eye towards the choices and just allow for more choice. I agree with sharon. The fact were Holding Hearings about this the fact theres potential of regulation indicates if you color within the lines, if you follow the rules, well leave you guys alone and this is a legitimate industry. Its only when they start getting involved with Drug Trafficking, heroin whatever that that becomes a problem. The head of the Advocacy Group is arrested with a Drug Trafficking and laundering. Thats why we cant thats why the theory and whats actually happening are important here because while i think everyone will support potentially the idea of an experiment like this lets see what happens, lets not stifle innovation too quickly. At the same time if an important part of what bitcoin actually exists and is used for is to get around the legal system, then that cant be ignored either. And the u. S. Has been surprisingly open to considering bitcoin despite what its used for. Youre absolutely right. But i think what a lot of folks are trying to figure out is how can it work for me not just as a trade, but is this something thats really going to be a legitimate payment source for me and i think people are really grappling with trying to figure that out in light of all of these reports of fraud recently. Thats something that really needs to be considered. Well have to keep an eye out for the hearings and follow whats going on across the bitcoin industry. Whats clicking on our website . The hot list is next plus well go live to washington for a preview of the state of the Union Address. Catch our special coverage. Im cohosting along with Carl Quintanilla and john harwood. Well be back in just a moment. Tdd 18886282419 can take you in many directions. Tdd 18886282419 you read this. Watch that. Tdd 18886282419 you look for whats next. Tdd 18886282419 at schwab, we can help turn inspiration into action tdd 18886282419 boost your trading iq with the help of tdd 18886282419 our live online workshops tdd 18886282419 like identifying market trends. Tdd 18886282419 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18886282419 sharpen your instincts with Market Insight from schwab tdd 18886282419 experts like Liz Ann Sonders and randy frederick. Tdd 18886282419 get support and talk through your ideas with our tdd 18886282419 trading specialists. Tdd 18886282419 all with no trade minimum. And only 8. 95 a trade. Tdd 18886282419 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. Tdd 18886282419 so you can take charge of your trading. Tte or au lait . Cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. Welcome back. We have earnings state of the union, the turkish Central Bank Meeting. Whats lighting up the hot list . Lets ask allen wastler. The yahoo earnings. Yahoo earnings any earns story really, what happens is we get a bunch of readers coming in that read the numbers real quick and leave real quick. But as people read that yahoo report and found they were a little light on their First Quarter projections and a thethe way the shares jumped around. We got two bites of the apple. Do you say yahoo . Yahoo . You mentioned turkey that story has been going for us all day. India saved the day, will turkey be next . What were seeing right now is theres been steady traffic on that story. Right now its beginning to tick up a little bit because were getting close to announcement time. Our friends at fast money will probably have that one. Finally a wonderful analysis from jeff cox. Weve been talking about a correction coming a correction coming and so whenever theres a little dip, you get all these buyers coming in so that true correction maybe will never come and maybe it will be a case of sell in may, go away. He digs deep into the underlying fundamentals. Fascinating read. People are gobbling that up, too, along with the turkey. Allen, thanks. Take care. Lots to check out, cnbc. Com. Lets send it over to sheila dharmarajan. Shares. Vringo. The two sides were unable to come to an agreement and that rate will cover ongoing royalties for sales of google ad words. Ad words infringed on vringos patent. 13 move sheila. Thanks. Take a look at this. It is a live shot of the white house where president obama is putting the finishing touches on tonights state of the Union Address, but he does so in the face of some pretty weak poll numbers. Just how bad is it for the president . Thats coming up next. And be sure to catch that speech on cnbc. Tonight ill be cohosting our special coverage along with carl quinntanilla and john harwood from washington. Well be back after a short break. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Here at fidelity, we give you the most Free Research reports customizable charts, powerful screening tools and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, Td Ameritrade and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. Attention is shifting to washington where president obama tonight will be delivering the state of the Union Address, his fifth. Hell be addressing an electorate that isnt plizeased with the direction of the nation under his leadership. Eamon javers joins us. A poll didnt reveal very optimistic attitudes among the country. Thats right, kelly. Some tough political headwinds for the president going into the state of the union speech from this new nbc news wall street journal poll. Three data points to chew over starting with the overall job approval for the president. This is a number thats totally upside down from the president s perspective. Approval for his job performance, 43 . Do not approve, 51 . That is not a number that any white house likes to see going into a state of union or any other time of the year for that matter. Also on the state of the economy, satisfied with the economy, 28 . Not satisfied, 71 . And that is not surprising give the high rate of unemployment weve seen thats just been so sticky and so unsolvable it seems like under this administration for the past several years. And then on income inequality thats a theme that we expect the president to hit at some point tonight. Look at this. Washington should do more 37 agree with that statement. But washington should do less 21 . So the challenge for the president tonight, kelly, going into talking about income inequality is convincing most of the country that washington has a role to play there at all, and then, of course what that role appropriately or not should be. So a lot of challenges ahead for president obama when he comes up here to capitol hill this evening, kelly. Eamon, when asked how they would describe the country, apparently the top two terms people replied with were divided and troubled. Really bad feelings bad emotions in the country right now. Its a very divided political time in this country, and the president really lost a year politically in 2013 with a series of problems ranging from syria to the obamacare website rollout. Now is a chance for him to have a little bit of a political reset. Its a new year a new state of the union. Hes got a new agenda hes going to talk about, but largely hes going to have to do this heavy political lifting without congress where republicans still have enough power to block most of his domestic initiatives. So the president will talk tonight about using his pen and his executive orders to do stuff that he cant get through capitol hill. Eamon, thank you so much. Weve got a busy night coming up. And carol, there are a lot of people who dont like a lot of people that dont like the sound of the president acting unilaterally saying, i have a pen. I have a phone. Ill do things that congress wont. Not that its a good tradeoff, either, kelly. The one thing thats going to be the biggest disappointment here. Its going to be the treatment of small business. Were talking about jobs and about economy. We know that Small Businesses are the engine to create those jobs and help grow the economy. However, we get a lot of lip service. Small business is important. When you look at the policies they end up hurting Small Businesses. Isnt this all lip service . Its the state of the union. This used to be Something Different than the stump speech it has become right or left. Right. A lot of people are going to stay that its going to be a stump speech. Were going to hear the things weve heard before. What i thought was interesting, one of the points i saw in the poll, was 61 of americans are satisfied with their own Financial Life where they stand, their financial situation right now. And how that will play into how they perceive what the president says tonight will be also be interesting. But getting away from that disapproval rating thats going to be difficult. Its going to be difficult. But i want to bring in ben white here cnbc contributor from politico. And its the president s fifth state of the Union Address. It cant be that unusual for his numbers to be sinking like most president s do or maybe they dont, at this point in his presidency. Well, his numbers are similar to where george w. Bush was at this point, which is not a place any president wants to be. George w. Bush never recovered from those negative approval ratings. He had the war in iraq to deal with. Obama doesnt have that. But what he has is a very grim mood in the nation about the nature of this economic recovery. Thats a very important statistic that 61 like their own personal circumstances but dont believe that the nations moving the right way. And he has to somehow change peoples opinions on the nature of this economy. You cant do that in one speech. The interesting thing to me if you ask people about their personal finances, they feel better about them. Consumer sentiment numbers have gotten better. Im curious how much to take people at their word about how upset they are or pessimistic they are about the country when there are other indications that, you know, look, things have improved to some extent yeah. The problem is people dont trust in this recovery. They dont feel confident. They dont feel that their situations going to get a lot better over the next few years because what weve seen in the last few years is good signs. The beginning of the year looks good. Then, we backslide, then the confidence numbers go down. We wont have a congressional blowup on the debt limit. The only thing that will save obama is much better job creation, more wage increases. People feeling longterm better. You cant do that in one speech. But what he can do is talk economy. What is interesting you bring up an individual versus macro divide. We reported in the Washington Post this is one reason why the president is going to be downplaying the broad academic issue of income inequality and focus more on the Kitchen Table economics that people are facing. Such as longterm unemployment. His announcement of raising the minimum wage. Access to early education. Access to college for lowincome students. Those are the issues that affect people on the ground level. And i think thats where youre going to start to get the emotion, maybe the sort of emotional response to his agenda that hes hope willing carry forward. I think hes he doesnt have a lot of credibility on issues like the minimum wage for federal contractors when he just hired federal contractors to build a website and wasted 400 million. Maybe if they pay them more. Can he take steps to have more trust in his efficacy as a ceo. This is one of the things hes going to try to do to show results more easily. And hes going on travel right after this to pitch some of the ideas to Kitchen Table americans. What will be ingenuous to the private sector is the Public Sector is the one area where right now, with the Austerity Movement kind of losing its teeth, it doesnt have to worry about the bottom line to some extent. So, when you have an increase in the minimum wage for a business or labor costs are going up generally, they have to rationalize that. But you can raise the minimum wage for federal workers. Its not necessarily going to have an immediate blowback effect. Youre talking about 0. 001 of the workforce. Its not going to have a big Macro Economic impact. It will help a small segment of the population. But the idea showing that hes doing something on this. Hes going to try to get money in peoples pockets and maybe get momentum for a minimum wage increase. But tin equality issue, it doesnt poll that well. Only 37 think the government should do it. People are worried about class warfare warfare. You talk more about growth and getting growth for everybody, that might be more beneficial to him. All right. Got to leave it there. Ben, great to see you. Well be watching tonight. You can watch along with us. Ill be cohosting our special coverage of the state of the union, along with karl and john harwood. The fun begins at 9 00 p. M. Eastern. And you can watch shark tank at 11 00. It will be like a shark tank, the political version. Another merging market in the balance. What happens in the next few minutes could reverberate around the world. What you need to know about an emergency meeting of central bankers in cur can i, coming up in ex. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from Td Ameritrade. Welcome back. Turkeys central bank expected to wrap up an emergency meeting any minute now. Policymakers are trying to stem a steep drop in the countrys currency, the lira. That could have an impact on the economy more broadly. The global economy, and even affect us back here in the u. S. Want to get thoughts from our panel on this along with the familys melissa lee, who will have special coverage of this coming up. We expect the statement to hit at about 5 00 p. M. Eastern. And looks like the market is expecting something in the range of a 3. 5 to 4. 5 hike. It will be interesting to see what they do here. Melissa . Sorry, melissa, i dont think were hearing you. Okay. Well work on the wires. In this obviously, we just talked about what india did. Hes the head of that central bank. Hes trying to make a point about defending the currency. Now, turkeys in a similar position. But the pressure is on. And its unusual that theyre having this meeting. Can you imagine the fed meeting. Not only meeting, but coming out with a statement at midnight local time. Unprecedented. We went through tumultuous times. They can pull something together. But this will be a real test to see if emerging markets can stand up to the Global Forces that will be working against them this year. Are they going to be Strong Enough that they arent plumled by rising Interest Rates. Melissa, go ahead. This is probably the most anticipated Turkish Central Bank decision on the books. And the markets are expecting that hike. And weve seen the markets respond in large part to it already. Without it Brown Brothers said you know absent that hike in the markets, you had outlined we will see a bloodbath, essentially in the emerging markets. We will continue to see the markets. The outpost has been strong. Everybody is looking to this decision, which is why we are so tuned in to turkey which is a departure from what we normally do. I want to thank the panel for joining me the last hour. And melissa, over to you guys. Thanks kelly. A number of breaking stories were following. 5 00 on the east coast. Midnight in turkey. That countrys central bank