Transcripts For CNBC Closing Bell 20140212

The next big thing is you will have to stay tuned for that governor. Cisco reporting earnings about an hour from now. The tech bellwether rattling markets late last year with a weak financial outlook. Should investors brace for more bad news or with expectations this low, will cisco surprise us to the upside . Well get you the information first and well have a full analysis as those numbers hit as well. That will probably set the tone for tomorrow, but theres also something thats going to set the tone for tomorrow. A major Storm Brewing in the south, and not even talking about the weather. This one is all about a key vote to unionize a tennessee auto plant, something that has not happened in the south ever. The president of the united autoworkers will be joining us on the closing bell exclusively to talk about whats on the line in that story. Very important coming up here. And here is where we stand in markets as we head into the final hour of trade. The dow is giving up about 50 points at this juncture snapping what had been a strong win streak. The nasdaq, take a look at this, just a couple points lower im sorry, higher. Its the s p 500 which is hitting a couple points lower. 1817. Market resting after the janet yellen rally of yesterday. Joining us on the closing bell exchange, janet engels, keith fitzgerald, peter anderson, bill nickels and our own rick santelli. Janet, are we just waiting for the next move from janet yellen or what happened . Where did the momentum go that wed had for the last four days . Well, it was huge momentum for the last four days, we were over 4 . We had a terrible start to january and early february, we regained part of that. Should be a good year but not one without bumps. Bill, as you point out, we had about a 6 selloff, a 5 snap back and there are plenty of people saying are we ever, for example, going to see stocks fall back to where theyre testing 200day moving averages . The kind of market behavior thats usually normal . I guess the new bear market is now down 6 . People are real nervous on a pull back of that nature and everybody got a little spooked. Here we are 5 back to the upside. And what do you think that means . Are we destined to go much lower from here or is that pull back over . Well, i think we may trade a little sideways. I think with the market rallying, 30 , 35 , a straight line, you get a little bit of a 6 pullback. Now rally back to those levels. I think kind of a sideways market for a couple months makes sense. Earnings are okay but there are still challenges in the marketplace. I think more sideways than a rocket ship rally from here. Peter, do you agree . You mentioned first off yellens testimony yesterday, i dont know whether or not she intended to do this but i think shes given us a great gift, and that gift is were now putting the fed discussion i would say off the front burner and putting it on the back. So to me thats a great relief, and we can start kind of focusing on fundamentals of companies now which have kind of been in the backdrop for the longest time, kelly. You know, we have spent a lot of time wondering what shes going to say, how shes going to say it, and i think she gave us one heck of a presentation yesterday. I mean, its about six hours of discussion that she presented, and we have a pretty good idea i think of how shes going to proceed. That to me means go ahead. Im sorry, peter. Let me just clarify. Do you think the fed is on automatic pilot now as far as the tapering goes month by month. Is that what youre saying . Im saying she has at least told us that not automatic, bill, but i would say right now shes saying, look, things are pretty good. Im not going to rock the boat unless theres extenuating circumstances, but as far as i can see right now im going to proceed with the tapering unless, of course, she needs a back door to let us know if something really outrageous happens, shes going to accommodate that. To me that rolls in a great sense for equities now, and we can start looking at individual stocks. Okay. Rick santelli, you know whats interesting, it was a different fomc member, if you will, who is getting the attention of the wall street journal. Richard fisher. Theyre saying fisher for president. Citing his comments about the amount of money laying fallow and the fact he said fiscal policy is now an enemy of u. S. Growth and policy makers in washington must focus their efforts in providing incentives for businesses to expand. Do you want to be his Campaign Manager . Listen, i agree with pretty much everything he said, but its not unique. In the world that i experience down on the cme floor in chicago, thats the prevalent philosophy regarding the fed. Doesnt mean traders trade that way because they want to make money, and i think janet yellen and her whole continuation perspective is still left a half of a ben bernanke put in place, but i think yesterday the vote on the debt ceiling played a larger role in the way equities traded and for today we came in with china and their trade balance moving to levels close to extremes that we havent seen since 08. Exports are up 10. 8 . I think its all those factors. Interest rates are breaking out. If we settle above 2. 75 in tens, settle above 1. 55 in fives, we are now potentially looking to take back some of the drops in yields which in my opinion were solely, and i underscore solely, because of the weakness in equities. If equities have their sea legs back, i would look for treasuries to resume a slight increase back to the kind of 2. 82 level. Rick, i agree with you. I think the house vote on the debt ceiling yesterday was a big deal for this market, and were waiting for the final vote in the senate which is under way right now. Well get that for you as soon as that finishes. Keith fitzgerald, we havent forgotten about you. What are we to do with this here . Which market is right, the volatility and the pull back we saw in january and early february or this pretty good rally we had over the last four days . I mean, weve had a schizophrenic market so far this year. Well, look, this is like that old Rolling Stones album, the market has its yayas out, washington is out of the way, traders can get back to doing what they need to do. Concentrating on fundamentals. If you can go with companies that have pricing power, you will just fine. Ceos have a handle on this and theyre looking forward like they should be. Yellen has proved shes a bernanke clone. Thats comforting in an odd sort of way. Bill, yesterday on the program we were speaking with jim grant and it was interesting. Among the concerns he raised were some specific concerns about valuations in the Biotech Sector which nevertheless has been a top performer again this year and i wonder if you are bullish on biotech here. Well, biotech is the one group its the leading performing group in the s p. Coming off big gains last year. If you were to question valuations, thats certainly a group to take a look at. The problem is listen, kelly fundamentals continue to be there, then there could be further upside. Well see. Its a volatile group. Rickster . I want to ask that guest, and im sorry i cant tell by your voice your name, but you said now that the government and the fed are out of the way. See, its the out of the way part that is the huge problem and why i think down the road equities will revisit the first part of the year. Out of the way. They didnt solve anything. Its an election year. Establish pop tilitics rule. Were not addressing the debt. We just learned that the deficit for this month is actually a minus sign. It was a positive sign last year, and as far as the Federal Reserve, what, out of the way . Were still buying 65 billion a month. Still have zero Interest Rate policy and were continuing all those and we have gund lock ola thinks its a 50 50 chance qe wont be over in 2015. Now you got them started. It is out of the way. Kick the can down the road. About what happened with biotech . Hang on one second, guys. Are we doing this news now . Are we doing this news now, guys . Scott wapner, you have got some breaking news for us . Hes not good yet. I thought you said it was right now. Peter, you start. Thank you. Let me just quickly say theorizing is great to talk about this, but in the end stock picking always trumps theorizing. Kelly, you mentioned earlier what about biotech. What is our outlook on biotech. Ill tell you this, that in general biotech is extremely difficult to pick individual stocks unless you have a medical degree, unless you have socalled boots on the ground in these research facilities. So to have like a macroperspective on biotech, its very, very difficult to do. If you have that clarity, sure, there are great biotech stocks out there, but you really have to be extremely careful compared to, say, just a general industrial thats been under stress for the past couple years. And, keith, you wanted to respond to rick. You know, the whole rick were assuming that the fed is getting out of the way at this point, right . To be clear, i didnt say the rick solved one bloody thing. I think the fed is making this up as they go along. What i said is they pulled back. Shes doing exactly what the script says. Shes sticking to the script. I disagree with the script. We have millions of people still out of work, we have corporations that are underperforming, we have unemployment going the wrong direction, all kinds of numbers that arent working, but the fact of the matter is wall street actually knows what the disarray is and theyre more comfortable with that than they are with washington meddling with things and i think thats a good thing. I kind of agree with that. They dont like the disarray, they like the money. Its raining money for of course it is many of the top wall street firms and they wont question the fact that the world is a bit out of phase in terms of the process that allows them to do so. Exactly, exactly. You and i are Kindred Spirits on this one. I think washington is a mess. Theres no adult supervision. The fact of the matter is that theyre going to go on about their business. But you and i also both know coming from the trading world that we do that its traders who have to make the decisions. I dont care what the academics say. At the end of the day youre either green or red. I say its time to go play ball. Well, we have to play some more ball some place else because we have some breaking news. Thanks, guys. Appreciate your comments today. We have some breaking news on dow chemical. Scott wapner joins us now. What can you tell us . Thanks so much. Now im ready. I do have more on the latest developments regarding dan loebs third point and dow. Loeb was asking for dow to split up into two divisions. Dow said today they had done this review, that that was not productive. Essentially rejecting dan loeb. Third point saying the following in a statement i have just received. They say dow has asked shareholders to accept its word that third points proposal to split the petro and specialty chemical businesses would not increase value. Unfortunately, dows lack of transparency means we know neither the methodology nor even the advisers used to arrive at that decision. Transparency is essential considering dows undistinguished track record of Capital Allocation decisions. Third point going on to say they are prepared now to sign a nondisclosure agreement to review and discuss the analysis that led dow to those conclusions. We look forward, they say, to having a constructive dialogue among our own financial advisers. Ceo of dow and dows board which we believe, third point says, can ultimately result in significant value for all shareholders. So thats the latest development in this ongoing story. You see what the stock is doing right now. It is down about 1. 5 . It has been down throughout much of the day once dow did release that statement this morning saying that they were in effect rejecting dan loebs call for the company to split. Now dan loeb fires back. Bill . All right, scott. Thank you very much. Thanks, scott. Lets go to washington now. This other breaking news we were alluding to earlier on the debt ceiling vote in the senate. John harwood, we have the vote now, yes . Bill, the United States senate is now passing the debt limit increase that the house passed yesterday. Weve gone over 53 votes, dont have a final tally yet. There was some drama on the vote to end the filibuster because this is one of those deals where nobody really wants to vote yes but they all want it to pass. They had to figure out who was going to do it. The Senate Republicans ended up having kind of a buddy system and instead of just having the votes needed to get a filibuster, they had twice that many. So you had 12 republicans voting, including mitch mcconnell, who has a big primary fight. It was a bold move by mcconnell but thats part of the responsibility of leadership. Now theyre on final passage and it appears it will pass with all democratic votes to give the debt limit increase that treasury said we need in a couple weeks. This is what markets were expecting, what markets wanted to have happen, so its now a fact. John harwood, any sense of the reaction yet from ted cruz . Well, ted cruz lost, and ted cruz is going to continue to use this issue as a rallying cry, but, you know, weve seen the limits of his power, the limits of the tea partys power in the house on this. John harwood with the vote count at this juncture, an important one. Thank you. The markets may have rallied on the news yesterday but thats not happening today for the senate. Theyve already factored that in, i guess, but the dow is down 46 points. We were down 66 at the low of the session as we head towards the close. I believe this does now put the next issue of the debt ceiling off until arefter the midterm elections until march of next year. A dire warning about the Banking System from a world renowned expert. Take a listen. What we might discover is what ireland discovered or what iceland discovered, that they are almost too big to save, that they can really take down economies. Up next, her solutions to this important problem and we will get reaction from dick kovacevich. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Cozy or cool meow or woof . Exactly the way you want it. Until boom your mattress a battleground of thwarted desire. Enter the sleep number bed. An innovative design that lets couples sleep together in individualized comfort. Hes the softy his sleep number setting is 35. Youre the rock, at 60. As your needs change, you can adjust your sleep number bed, so you can sleep better together. Visit one of our 425 stores for the the largest closeout event of the year with 50 savings on Innovation Limited edition beds. Know better sleep with sleep number. More breaking news. This time on obamacares enrollment totals. Bertha coombs has the latest tally for us. Thats right, bill. The Obama Administration releasing the numbers as of february 1st. They say some 3. 3 Million People have now signed up for coverage. When you take a look at where they anticipated they would be as of february 1st, they still tall about 1 million short. However, in the month of january 1. 1 million signed up. That was more than they had anticipated originally, and 27 of them were young adults between the ages of 18 to 34. Thats a 3 percentage point increase from what we saw in the first three months. Taking a look at the realtime tally, a number of states have offered more realtime pictures calculating from the cnbc team with those state numbers, the numbers now in realtime are at about 3. 5 million. Thats about the halfway mark where the cbo had officially anticipated the administration would land. The cbo now expects that by march 31st we will see some 5 Million People signing up on those exchanges. Back to you. All right, bertha, thank you very much. Back to the market now where the dows fourday rally is in jeopardy. The dow down 38 points right now. Dom chu, whats moving today . Were going to start off with a big name, Owens Corning moving higher after they posted better than expected Fourth Quarter earnings boosted by a return to profitability of its insulation business. So a big story there for Owens Corning. A different plan for well care health plans. Reported weaker than expected Fourth Quarter results as higher medical benefits expenses overshadows their sales growth. And far racy and a steeper th expected drop in Fourth Quarter profits. It also said sales would be flat in 2014. Now, finally, you would think names like jpmorgan, bank of america, citigroup, all you can see there moving at least a little bit but still those big banks a focus for a lot of investors as the financials struggle to get back to even for this year. Back over to you. Thank you very much. Lets stick with the banks. One of our next guests says the system is far from fixed and that the Financial System could go down in flames again sooner than we think. With us is anna admani. The author of the bankers new clothe clothes. And also with us, dick kovacevich. Professor, what is your primary concern with the u. S. Banking system today which some will say who are involved with it, that they actually think this is the soundest weve had the system in years or even decades. Well, it could be the sountest in decades but the question is, is it sound . Thats my question. Is it sound enough . Is it as sound as it can be, should be . Thats my question. What is it that worries you about the Banking System right now . Can you give us an example . Yes. What worries me is a number of things. Im worried about too big to fail banks. Thats a very huge problem. Im worried about derivatives. And im worried about the ricks we dont see that are taken with way, way too much borrowed money so, therefore, is kind of fragile. Let me zero in on too big to fail. Is this a metric you use that tells you that theyre too big to fail . Well, the signs are all over. The signs are all over. Maybe eric holder can take the statement back, but he did say probably what they are thinking, which is what they should be thinking, what would be the effect on the system . So when they start thinking that, you know something is wrong. Thats just one thing. Dick kovacevich, you agree, banks should not be too big to fail, but you dont think they are right now, do you . No. And i dont think they were in the past either. What happened is that they werent allowed to fail. A big mistake. And one of the reasons they werent allowed to fail is that it was a coverup by regulators so that they wouldnt think they were at fault, and they wanted the taxpayers to bail out the regulators, not to bail out the banks. If bear stearns was allowed to fail, it was half the size of lehman, i dont even think the financial crisis would have been nearly as great as it turned out to be. We have to when failure when a bank is truly failing, we have to let it fail. Do you agree . Well, that might be true, but the question i ask is why dont we try to prevent getting to that point of failure . The problem is that the damage starts way before you get to that failure point, and the failure looks ugly. We saw the failure in lehman, and, sure, we could have now said what would have happened if bear stearns was allowed to fail and all of that, but we saw it wasnt fun to let lehman fail and what would happen now if we let jpmorgan fail . Regulators will say that they are working on these issues, that thats exactly what some of the legislation since has been aimed to do, that by the way, Market Forces are taking care of some of this, but next week the Federal Reserve is going to meet. Theyre going to talk about how much extra capital those globally systemically important Financial Institutions have to carry. What level is enough, professor, in your view . Well, i think a level thats enough for reasonable, its not just enough for safety, for health, for functions like a normal corporation does and taking account of your risks everywhere and dealing more with Equity Investors than regulators and debt holders is a minimum level thats good in the rest of the economy. 20 , 30 you still say 20 to 30 because were talking about levels of 12 which is a big improvement for some of the institutions. It all depends on the denominators. Who knows exactly what the denominator is. Is it total, is it off Balance Sheet, is it this and that . The numbers what i mean is like a whole lot more. And i dont see any reason not. Dick kovacevich, are banks overleveraged. Do they still have too much debt on the Balance Sheet right now . First of all, you use leverage. Leverage is usually associated with equity capital. What people have to understand is what we have not used in the past and what banks have a lot of is debt. If you take all banks in the past and still today, they have 30 to 40 in combination of debt and equity, but the regulators have allowed debt holders to get off scotfree, it makes no sense. Debt holders are the ones that dont have any upside. Theyre the ones that can monitor a banks risk. Banks go to the debt markets every six months and every year. They dont go to the stock market for that. We have to use both debt holders, equity holders, and even uninsured depositors. Youre getting then up to 40 and 50 of a bank. So thats how you handle this, and if we could have handled it in the past, theres plenty of it there. We will not need any stock any taxpayer help to resolve a bank if we put debt holders at risk as well as you bring up tax payers in a different way which is as depositors or holders of the debt. I just want to give you a chance to respond. No sorry, go ahead, dick. Uninsured depositors i mean insured depositors will be protected. Uninsured depositors wont be protected either. Its 250,000 and over that they need to monitor their bank. If they do, we wont get into this problem because they will feel at risk and they wont continue to put their deposits or buy their debt. Equity is not the way to excessive equity is not the way to reduce risk in the Banking System. Youve got to use a debt holder because they have no upside. They pay more attention. Why should they have so little equity . Why should we need to get to the trigger where we need to use, you know, we have no cross border resolution, we have so many problems right at that trigger . Why do we get to this trigger . Why the investor Warren Buffett doesnt pay all these people out there are not paying out to equity and they use retained earnings happily. Why cant the banks do that for a while . Because if you get the leverage too low the cost of equity is so high. The way banks will meet that is by reducing their Balance Sheet. Thats not good for the economy. And secondly very quickly. Equity is permanent. Debt isnt. You have to go to the debt markets all the time so youre getting information all the time about what is happening with a bank, and if they cant raise debt, then theyre going to have to shrink and its a notification to the regulators that the market thinks its risky. Its a much better vehicle for protecting the taxpayer and understanding the risk of a bank than equity. Unfortunately, we have to go at this point. We never have enough time, but its clear two very smart, experienced people with a very healthy discussion and a big disagreement on what constitutes too big to fail and whether or not we are there in this economy. Its very important story we need to keep an eye on. Thank you both for joining us. Appreciate it. Great to see you. About a half hour to go before the close. The dow is still losing altitude. Its off about 43 points after a massive and some would say, bill, too sharp snap back. It was impressive. Forget higher mortgage rates. There may be a brand new threat to the housing recovery lurking on the horizon. Well tell what you it is when we come back. Stay tuned. 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. Were open to it. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. Welcome back. So zillow is one of the big names set to report earnings after the bell. There are a lot of them tonight. That company is out with a report that shows when investors may start moving out of the Housing Market and what that would mean to housing prices. Diana olick has the story for us. Whats the impact. Its a big impact, bill. Investors, both institutional and individual, put a floor on home prices and put housing into recovery. No question. Now the concern is when will they dump out and what will that do to the market . Zillow surveyed more than 100 Real Estate Experts and economists and asked them that. 79 of them said if Institutional Investors who have bought close to 200,000 homes started selling their properties this year en masse, there would be a, quote, significant or somewhat Significant Impact on markets that saw the most distress. But the survey also asked when they thought investors would start to bail and the vast majority said not this year. 57 said three to five years from now and 33 said 6 to 10 years from now. Just 4 said investors would sell this year. They bought at market troughs and then they paid 20 to 30 discounts because they were buying distressed. And theyre in markets where rents were increasing. So theyre holding onto a cheap property that is massively cash flow positive. I would see no reason why they would seek to unload those properties anytime soon. So theyre not selling, but we do know investors have slowed their buying, which is already causing some scary results. Take phoenix, for example, were sales are down 17 yearoveryear and supply is up 30 . Thats going to hit prices hard. Back to you guys. It certainly is, diana. One to watch. Thank you so much. Diana olick as we eye the Housing Market. Were watching markets heading in the close with the dow off about 37 points now. A small decline for the s p 500. The nasdaq is still hanging on to positive territory. But shy of that 4,200 mark. What do you think the next big thing in technology is in who better to ask than Marc Andreessen. Hell join us next. And the United Autoworkers Union trying to score a major victory by unionizing a southern right to work state. Uaw president bob king joins us exclusively telling us what this vote means to the future of the labor movement. We want to know how you feel a win by the uaw could affect the automotive industry. Well be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Our melissa lee is on assignment today in san francisco. Shes attending Goldman Sachs internet and technology conference. And melissa joins us live right now with three very special guests. Melissa, take it away. Thanks, kelly and bill. We have gary cone, marc andreess andreessen, and joe lonsdale. Guys, thanks a lot for joining us fresh off the Keynote Panel discussion. Gary, i want to start off with you because we are here at the conference and there are hosts of publicly traded companies, the usual suspects here, but also a lot of private companies. Is this a statement on where Goldman Sachs sees the next area of opportunity of investment . As you know, the Technology Space is one of the major drivers of the u. S. Economy today. Technology, energy and power are the role growth industries. Our Technology Franchise is strong and continuing to get stronger. This Research Conference were hosting has over 2,400 participants, 500 management teams here presenting their companies. Its one of two or three major events we do every year in the Technology Space. 2014 has already started off as a big year for ipos. A record for biotech ipos specifically. There are a lot of Technology Companies in the pipeline and im wondering if tax return will be the year of the exit. Implicit in that is where do you think valuations are because if valuations are good, obviously companies are going to want to look that in. So i think whats happening, i think theres been basically ten years of very few ipos, for sure in tech and information science. And so you i think have this enormous backlog of high quality companies, many of which have gotten built up over a decade or more and you have a Public Market thats starved for growth. A lot of mutual funds and hedge funds have been coming over to make private investments because they havent been able to get investments in growth in the Public Market. Finally at long last after the 2000 crash the Public Market is starting to get interested in growth. What about the notion about a bubble . Weve been hearing that a lot. We had Jeffrey Gundlach earlier on cnbc comparing what were seeing in sotcial immediate specifically to the internet bubble of 99. You addressed this on the panel and brought out some psychological phenomenal on which everybody goes crazy and loses their mind. We had a bubble in 1999 and 2000. I dont think we have had a bubble since. People in the valley have been claiming theres a bubble every year from 2014 04 to today. I dont think anybody would say there was a bubble going on in the 1970s. I think were coming out of a tech depression. I think anything starts to look good people scream bubble. Tech depression, does that make sense . Sure, you can pull out the valuations of apple and microsoft rich in cash. But then you look at twitter, facebook, a fire eye for that matter, and those valuations some would argue are high. These are great companies. Theyre producing great products that you and i use every day. We want to use, and more importantly were willing to pay for. Those are not symptoms of bubble companies. These Companies Understand their product. They understand what you and i want, and they understand their pricing. And i agree with mark. I think mark has studied this as much as anyone. These are not bubbly situations. The situation today is completely different than it was in the late 90s, early 2000s. Pallentier would be a highly anticipated ipo. If it went to market today, what would it be worth . And it actually was amazing. I didnt know news stories picked up valuations but it was all over after i said it in public. Im proud of what theyve done. When you have a company thats growing quickly and is in that type of phase, i think its maybe better these days to stay as a private company. No plans for an exit at this point . No plans for an ipo 2014 . Probably not this year. Probably not this year, although 2015 might be a different story. Mar marc, i have to ask you about bitcoin. You are a bitcoin evangelist, enthusiast. The piece people miss is the payment transaction aspect. If you can remove that 2 to 3 that merchants have to be charged, then you can actually make that a going concern. Where do you see the disruptions actually happening . Who should be concerned about being disrupted at this point. I think its mostly new opportunity. For example, theres a lot of ecommerce that doesnt happen because a lot of people around the world arent in modern payment systems. Theres a lot of merchants that cant be profitable because transaction fees are too high. Another category bitcoin will go after is the remittance category. Thats a 400 billion a year business. Its gigantic. The average remittance fee is 10 if im western union, should i be concerned . Number one, you should be paying attention and number two, it may become a big opportunity because you may be age able to use it. Its a huge opportunity and everybody has the opportunity. Bitcoin is an open technology, open source, freely available. Every established business that wants to take advantage, including people like western union, can do so. Are you worried about bitcoin . Im not worried about it. Im interested in watching it and im intrigued by it, but im not worried about it. Okay. Gary, marc, joe, thanks a lot for joining us. Thank you. Bill and kelly, back over to you. All right, melissa. Thank you very much. We just got word the Senate Banking committee has Just Announced theyre postponing Janet Yellens scheduled testimony for tomorrow and her first time there as chair of the Federal Reserve presumably because of the weather. Right. We know what would happen is it would be the same testimony she gave on tuesday followed by a different q a session. At this point if they adjourn through the end of the month, well see what happens. Unclear when she will be able to appear before the senate committee. Right now with about 17 minutes left in the trading session, the dow is in danger of snapping its fourgame win streak. Were down 36 points right now. Theres a simmering battle between our Resident Market heroes dom chu and seema mody. They square off over what is a better investment, emerging markets or the u. S. Market. Stay tuned. Well be right back. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. I didnt think i could buy them their own, let alone for under 300. But this asus with windows is lightweight and has everything they need not like chromebooks that cant install office or have to be connected to the internet to get much done. With this they can do homework, chat, play games on their own laptop, and their own time. So no more fighting. At least not over my laptop. Honestly, i wanna see you be brave if you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. All right. Well, forget wonder woman and batman. Here at cnbc we have two super friends that rival any comic book heroes. Each week our two financial super heroes seema mody and dom chu try to use the power of facts and a little persuasion to win their case. Today theyre battling out emerging markets versus the u. S. Guys, take it away. Were going to start with emerging markets because there are some experts who say the fear of an emerging market crisis are overblown. Take a look at the emerging market index. Its up 3. 5 over the past week. Some traders mentioned cheaper valuations thanks to a recent selloff. The lira has been strengthening against the dollar. Growth. Yes, emerging markets growth rates have come down but many of these countries are still witnessing higher growth rate a higher growth rate than the u. S. One example, india. Got a growth rate of 3. 9 . Elections are coming up. The Opposition Leader who is seen as pro business is gaining popularity. His victory could be a boon for the indian stock market. I used to work there, by the way. This is interesting. I understand all of those arguments for the emerging markets. Yes, you want to buy them off the lows, but still theres a tempting instinct, if you will, to bottom feed when the cycle may not be over. Nicholas culles at Convergence Group says take a look at the shares. Theyve been beaten down pretty well but its always going to have a rick associated with it because the fed is still going to taper, move that stimulus back, and thats going to have a Ripple Effect in the Global Markets overall. Janet yellen made that reference yesterday in her testimony in terms of the overall picture. She said theyre focused on the domestic market, they cant be responsible for the ripples overall. Thats why the fed is still a risk for emerging markets. There are some stocks out there, companies with High International exposure that analysts say could be poised to rebound. One of them is samsung. Barrons put out an article that says samsung could benefit from a rise in growth rates in emerging markets. There might be some benefit, theres some value there in the emerging market space. Ja how about some stability for the u. S. Stocks because if you take a look at the overall markets for u. S. Stocks, there is, yes, lower growth, but they are more predictable versus emerging markets. Also valuations still pretty inline overall and profits are still growing. So, hey, buy american, thats the case, and thats the reason why you should go into those u. S. Stocks. Its a good debate. It was a good debate. Good job, guys. Thank you. Were not picking a winner. 12 minutes left. Looks like were going to snap the win streak. The dow is down 36 points. I think people should tweet us their winner. Dont you think . Tweet us your winner cnbcclosing bell. Still to come, bob king talking about his unions historic vote in tennessee. No plant in the south has ever been unionized, let alone one of a foreign automaker. Its big news. Dont go anywhere. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. About eight minutes left and it looks like the dows win streak of four days will be halted. Were down 38 points. The s p is down a fraction. And the nasdaq up 6 points at this hour. Michael from the Inflation Rotation Fund joins me on the floor of the new york stock exchange. What is the big motivator right now for this market. It used to be the fed. Are we now focusing more on fundamentals . I think were focusing on the potential pricing out of the supposed emerging market crisis. I dont know about you, but ive been waiting for a long time for this crisis to play out. If you look at the way internal relationships are acting here, small caps which are domestically sensitive are underperforming. Theres a rotation into large cap multinationals. Small caps send to be indicative of incentive. Where are you putting your money to work then . Are you going with those multinationals or are you going to take a flyer on the emerging markets and wait for them to come back . I mentioned last time we had been in treasuries, Long Duration bonds. Prior to that little correction we had this ripped higher but its being led by china. Our models are pretty close to a move out of treasuries into emerging market stocks. If that momentum continues, its plausible you could see new alltime highs in the u. S. Stock market, but the catalyst is not going to be anything here in the u. S. I dont think Economic Data is going to get us there. I think we have to simply remove this fear of this cataclysmic problem of brics and the fragile five. We almost did an alltime high in the dow. What would get us there . Let me point out, this is very late news. The Senate Banking Committee Just postponed because of the weather the weather seems to be the excuse for everything. I wish i could use that for an excuse why i dont go to work. Can we use it for the stock market . Will corporate earnings be hurt . Im a little leery on that. You have to assume markets do discount some of this to some degree. The fact markets are giving the benefit of the doubt to the weaker data by coming back to sharply, seems to indicate that. The most important thing seges to be the pricing out of a crisis in emerging markets. You soo get, that you will see equities look okay and you may get a correction postponed to later in the year. Were postponed a lot of things right now. Its the weather. Its all about the weather. Thank you. Well see you later. Heading towards the close. Well have the closing countdown for this wednesday coming up, and then we are just minutes away from earnings. Its a total bonanza, cisco, cbs, whole foods, mondelez, metlife. Youre watching cnbc, first in business worldwide. Easier. Life 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. 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. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. One of our favorite moments of the new york stock exchange, the annual visit by the members of the congressional medal of honor society, those recipients held the medal of honor for their valor in combat. These are the cream of the crop, the best of the best, and they make their way to the balcony where they will be ringing the closing bell today, and we certainly honor them and thank them for their service to our country, and that is what happens once a year here at the new york stock exchange. So right now weve got the parade of metal of honor winners making their way to the balcony so they can ring the closing bell at the big board. Its an emotional moment for a lot of traders on the floor, many of whom, by the way, are also veterans. They certainly honor the best of the best. Very quickly, let me just mention, were going to have some big earnings announcements coming up just after the bell rings. Cisco leads the way there. Were looking for a profit of 46 cents on 11 billion in revenue. Then its cbs, whole foods, metlife. I know youre a big proponents of all the medal of honor winners. Youve been welcoming them to the floor of the new york stock exchange. What is motivating this market right now. What moves it, the fundamentals, the fed . Were rehashing at the moment. But i think what youre going to have is this return to the fundamentals and a realization that coming march were going to get another 10 billion as well as the macrodata cooperates. In terms of a bupull back. She left the door open. If the data doesnt cooperate, shes not going to be so quick. It was a positive performance by her yesterday. They delayed tomorrows because of the weather so thats off until next week but i think what youre going to see, were through earnings and so its going to be a refocus back on the fundamentals. Once they start to realize what the impact of the withdrawal is, and you may see just a little more churn. Realistically, snow is making its way up the east coast starting tonight. Its already been plaguing the south. What impact does that have on the markets tomorrow . I dont think its going to have a whole lot of impact on the markets because the markets trade so much electronically, its not the way it used to be. Very good. Kenny, thanks very much. The medal of honor winners ringing the closing bell as we head towards the close, the winning streak for the dow stopped cold at four sessions. Were down 34 points. All right. Thats it for the first hour. Second hour of the closing bell with kelly evans. Ill see you tomorrow. And welcome to the closing bell at this hour. Im kelly evans and the dow snapping a fourday win streak. Here is how were finishing up the day on wall street. 31 points lower on the dow, which is now 15,963. The s p 500 shedding barely a point. Sitting at 1819 and the nasdaq managing a small gain adding ten points. Better question perhaps is whether the correction itself that we were just spending so much time talking about is over. Lets get right to it with todays panel. Up from washington, d. C. , our very own eamon javers, cnbc contributor stephanie link, Nathan Bachrach and steve grasso will join us momentarily as soon as hes done trading on the floor. Weve also got brian kelly joining us for more on the days trading action. Its great to see all of you. Stephanie, first to you here, was this too far too fast for this snap back . That fourday win streak which was pretty strong. What do you make of the days trading action . I was encouraged by the earnings we have gotten over the last day, day and a half. Maybe not some household names like spx corp or Packaging Corp of america. Those kind of companies i look to, but more importantly its the underlying fundamentals and what these companies are saying and if you look at an spx, for example, they saw a Revenue Growth in the fluid Power Systems business. Okay, so that translates into just the real nittygritty industrial companies, and i thought that was interesting. In addition, i thought the china data overnight was good. It kind of got played down. Imports and exports rebounded. Well better than expected. We had the bank of england increasing their gdp growth target for the year. Better than 3 . We rallied off the 6. 1 low we saw on the s p last week. I think some of the data has been pretty good so its encouraging. Brian kelly, what do you do here . Where do you see opportunity . Well, i would be a little careful because we havent completely resolved the emerging market issues. A lot of the emerging market currencies thare at real critic points. Over the next couple days, it will be very, very crucial to watch those and this pull back, whatever it is, whether its the 30 points on the dow or something more, will be very telling as to what the direction of the market is. For now i think you just wait. Theres no reason to dive in after a fourday 4 rally. And we will be getting earnings from dow component cisco any moment. Cbs also reporting after hours. Want to remind people those could have a big impact on how the rest of the week plays out as well. Want to get to Julia Boorstin who has the numbers i believe on the media giant. Julia . Thats right. Cbs reporting adjusted earnings of 78 cents per share, 2 cents better than expected and up from 64 cents in the year ago period. Revenue at 3. 91 billion. Thats higher than the 3. 8 billion expected and up from 3. 67 billion in the year ago period. The real headline here might be the fact that cbs announced a plan for a 1. 5 billion accelerated Share Repurchase plan and in the earnings and in this press release les moonves says 2 billion of that Prime Minister will be spent ft. Fir in the First Quarter of the year. The stock appears to be moving higher after hours on the news, julia. Thanks very much. We got a couple of different themes here. We get cbs earnings. Any reaction here from what theyre saying about read through for media, market for generally . Content is king. We talked about that a lot. Distribution is also extremely important, diversified asset base they have. The fact theyre going to have an accelerated Share Repurchase at this price, thats very important. Isnt it very telling welcome, steve. Yes. Let me just jump in there unannounced. Isnt it very telling that companies always buy back stock at the highest prices . During recessions they dont buy anything back because they want to hold back their cash. They have been maybe we another got one thing. Social media has a media component to it. We forget there is good old garden Variety Media and content is king. Ask netflix when they come out with house of cards. I think its i want to know from a wall street guys perspective, i soo he this from the outside in, i never understand why wall street likes it so much when Companies Buy their own stock back. Wouldnt you rather have the companies spend that money buying an acquisition, doing something sure, thats the point is that usually they have no other option to do with their money and thats what theyre doing they have more money than opportunities. Wed rather have them investing in their they have been investing in their own company. They just beat on the earnings front and beat on the revenue line and theyre also adding to their buyback program. What would you rather have . Would you rather have i would rather have it all, steve. I understand that, but the reason why Companies Buy back stock and dont increase their dividend is theyre so nervous because you can never bull that dividend back. Reason main street doesnt like wall street is because when they keep buying back their stock it doesnt do anything to build the company. But i think the original point is a lot of times tops are marked by an exorbitant amount of company repurchases. It seems like a good moment for media, we saw cbs, disney. Content is king. There are only so many outlets that are gobbling up. You have all these places that are gobbling up content. Content providers will be the ones that are free to basically everyones bottom line. Let me briefly bring peoples attention to whats happening on screen. Whole foods out with earnings. Appears to have missed on the top and bottom line relative to what the street was expecting. Shares are moving lower by about 2. 5 after hours. Well have to dig through that release. Dont let me interrupt this conversation though to talk about whats going on maybe they will announce a buyback because the stock is at its low so maybe steve will be happy with that. You know my point. I totally do. I do. Historically you always see Companies Buying back stock at tops. You dont see them buying because they want to hold onto the cash. Its usually not a great indication that the market is going to do better. Obviously weve seen that though. Now, we do have if you will hold that thought for one second. I believe cisco out with its numbers. Jon fortt is breaking them back down for us out of headquarters. Kelly, weve got cisco coming in slightly above on both the top and bottom lines. Revenue at 11. 16 billion versus 11. 04 billion expected and earnings ershare coper share at versus 46 cents. Guidance very important for the coming quarter. We dont get that until the Earnings Call. A few more details, it looks like weve got a dividend increase, 19 cents per share, 2 cent increase over the previous quarter to be paid on april 23rd. They return 4. 9 billion to shareholders through the dividend of approximately 900 million a share. Repurchases of 4 billion. The call though going to be very important as we see geographic breakdown, some trouble in asia for cisco. Weve seen among other Tech Companies and also that guidance also going to be looking for more specific gross margin here. The street tends to care very much about that when it comes to cisco, kelly. Jon, if you had to put a period on it, how would you describe the way these numbers look. The stock is not moving tooraro too, too much after hours. Its better than some feared. Fearing more of a detier yaths of ciscos business, but the guidance has been cautious. We know cisco is making cost cuts, making head count custs. That color on the call and how much further they might feel they need to cut, what they kpt from Gross Margins and how theyre projecting for the coming quarter is going to be very important. We want to bring in eric from Jmp Securities for his instant reaction to these numbers. Whats your take on the quarter . I dont think it was too much of a surprise one way or the other and as jon had said the guidance is going to be important. They reset the bar after their last quarter. I dont think investors were really focused on this Earnings Results as much as theyre looking at what management is going to be talking about going forward. The company is trying to resolve into much more of a broad i. T. Equipment provider, and it will be very interesting to see what they can talk about in terms of their new product directions and things of that nature. Eric, you know, cisco has always been entrenched in hardware and then the peripherals off that. Can they ever move away in a substantive fashion that doesnt cut their margins in half . So weve certainly had our concerns about that transition. I do think that theres Good Opportunity for them to do that, and theyve demonstrated some capabilities of doing that. Examples where theyve done theyre a leader already would be things like security or in case of collaboration, video conferencing, but it is a tough transition for a hardware company. Thats just part of their dna. What about the emerging markets as well, china in particular, which a lot of en r enterprise big Tech Companies are struggling with. What about that for cisco here . I think china is going to be a challenge for them for a while. Theyre in a bit of a penalty box in light of a lot of the security concerns, you know, raised by but is that in the shares already or are there any new concerns, eric . I dont think so in the emerging markets front. I think investors expect that to be an issue probably more relevant to this Earnings Call will be whether they have a recovery in service provider. I dont think people are looking for much of a recovery on the emerging markets front. Couldnt they very simply be giving some low ball estimates of what they think is going to happen moving forward and set themselves up for a wonderful run towards the end of the year . Eric . That would make sense. I think theres also a chance that maybe theyll include a transition in ceo. They didnt announce it this time around i dont think, but thats not too far off, and so you could certainly see they would try to set up a new ceo with a good runway. Dont you think that last quarter they guided down 8 to 10 sequential in sales and they just they beat those numbers, but it was just off of a much lower base that they guided to. So what are we talking here . Is this company ever going to grow again . Last quarter they announced a huge buy back. Now theyre increasing a dividend. Is that what we can expect from a cisco . Well, they lowered their Growth Outlook for 3 to 6 over the coming years, so were not looking at a High Growth Company anytime soon. I do think that if you look at some of the newer products that they have, theyve demonstrated that they can execute. The Data Center Equipment is probably the best example of that. But we have our concerns. I mean, were Market Neutral on this because we think thats a tough transition, and its going to take a long time. Eric, thanks for sharing your views on that. Appreciate it. Were watching cisco shares gyrating after hours. I want to go back to something that we heard last hour in this program, get a Quick Reaction here, brian kelly, from you first. Melissa lee was talking to Marc Andreessen and he said the valuation generally for tech is below the valuation for industrials and we havent seen that since the 1970s. Is that overstating how cheap some of tech has gotten and how attractive is it in your view . Of all the areas of the market, that large cap tech is quite attractive because its so cheap. The only issue i have with it is you have so many people in it today. Jeff gundlach even said it on the Network Today with google. Thats such a crowded trade that everybody has already figured this out. Were not lewis and clark, were not discovering new land. Yeah, its cheap, but just be aware youre not the first one in. Sa technology is cheap, and for me im more of a value investor. I prefer the value investor. Eamon . Im curious if we can have a chance to dig into this report to see what cisco said about the nsa disclosures. We saw last fall them saying the withhold Edward Snowden issue was hurting the company globally. I want to see if they talked about that again this time or if that was just a one off for them. Right. Large cap growth as a sector has been the best value you could have out there. Its trading at 82 of its historic value. I have been saying this for a month and a half. Eventually somebody is going to go i think i heard nathan back there saying thanks, guys. You can catch coming up after this Program Olympic curling at 5 00 p. M. On cnbc. But brian kelly and the fast money freestylers are streaming live on fast money on cnbc. Com. Well round up the earnings you need to know about next and well take a top down view of what the numbers evare saying about the maelt of corporate america. Plus bob king on a key vote going on in a volkswagen plant in tennessee. Workers deciding whether to become the first unionized auto plants in the south. Send us a tweet, your thoughts on air at the end of the program. Youre watching cnbc, first in business worldwide. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. For 299 a month for 27 months. On beautyrest and posturepedic. Financing and save up to 500 get a sealy queen set for just 399. Even get 3 years interestfree financing on tempurpedic. But only through president s day at sleep train. Earnings, earnings, earnings. Theyre hitting wall street one after another right now. Dominic chu is on top of it. Lets start off with cisco systems. Earning 47 cents a share, a penny better than wall street was expecting. Its sales coming in a bit bf expectations. Cisco raised its quarter difficult le dividend to 19 cents a share. Mon da lez reporting weaker than expected Fourth Quarter earnings and sales. It gave 2014 guidance that was better than expected but near Term Economic conditions would be challenging. And then cbs reporting better than expected four quarter profits and sales. Also announcing a 1. 5 billion accelerated stock buyback program. Those shares bigger gainers in the afterhours. Whole foods markets reporting weaker than expected First Quarter profits and sales. It trimmed its 2014 earnings outlook and right now theyre the big loser down 5 , 6 in the after hours. A programming note, whole foods coceo walter robb will be on live on squawk on the street tomorrow at 9 00 eastern on cnbc. Well all be tuned in closely for that report, kelly. Back over to you. Its a big move lower in their shares. Major earnings out in the last couple minutes but what about the quality of this earnings season overall. Lets ask chris constantino, and the panel is here to weigh in as well. Chris, look, the headline seems to be, in fact, this earnings season is pretty good even if Revenue Growth is lagging but is that strong increase in earnings a reflection of telecom, for example, or is the strength more broad based in your view . In our opinion the strength is more broad based than that. In fact, i think telecom is one of those places in the s p 500 where you havent had the majority of companies actually report yet. But if you look at on our model which is a little different than how some other people on the street do it, we actually look at the earnings number relative to where consensus was six months ago versus where consensus was right before earnings which we think gives us a little bit truer idea of whether it actually beat or not. The numbers were getting are actually the best since we started compiling this data two or three years ago wait a minute. The numbers are the best in what sense, relative to where we stood six months ago . Exactly, yeah. The percentage of companies who have been able to beat earnings relative to where the expectations were six months ago, that percentage is actually higher than at any other quarter since the beginning of 2011 when we started looking at things this way. Thats actually true not only for earnings but also for revenue. Thats fascinatinfascinating. Sorry, finish the thought. In our opinion the earnings season has been the best weve had in 16, 20 quarters. Steph, people who say this market is all the fed, sounds like theres more to it. If you listen to what the companies are saying, theyre saying the u. S. Is recovering, europe is stabilizing. Go back to caterpillar. Everybody thought it was going to be doom and loom. Sure, mining was crummy, but cummins, they are talking about a bottoming in the truck cycle. Look at disney, cbs. There are pockets and companies that are delivering, should go higher, and they should serve a higher premium. What im wonder something where are the jobs . If the earnings are so good and things are turning around why are we seeing the flat jobs report. Can we talk about stock buybacks before or was it my imagination . Is that theyre nut putting the Resources Companies are running more efficient you give them a to do list and when they lay them off, theyre more productive. I understand how that works. That doesnt create more jobs. Janet yellen said she was surprised to see jobs were so flat. The corporations job to create jobs or earnings . You would think the jobs would follow earnings. Im not saying anybody has moral responsibility let me guys, hold timeout, timeout. But theres a very interesting point in this actually which people are starting to talk about and its this. Cops dont hire because theyre profitable. They hire because theres demand to meet. Especially when youre building when youre growing a business, you hire people because you have to, not necessarily because you want to. Chris, can you shed any light on that phenomenon . Is there something unusual going on relative to historical standards . Well, i guess in our opinion it kind of comes down to productivity. You know, we just got done talking about cisco earnings and outside of cisco the tech earnings have been quite good in the u. S. Thus far this quarter. These companies are selling a lot of goods and services in the tech sector. Essentially over time thats destroying jobs in my opinion because companies are making due with less. Im trying to remember the article i read the other day that was comparing the success of instagram to kodak. Instagram with 12 employees or something. Exactly. Kodaks peak they were employing 145,000 mostly middle class jobs. To your point, how many does instagram employ . Its a little bit of the effect of Creative Destruction and, you know, Technology Advances our inherently its a Deflationary Force for job creation for better or worse. I would highlight home depot announced they were going to hire 80,000 part time workers up from 70,000 last year. Clearly there are companies that are seeing more than expected demand. There are definitely areas of the economy that are doing better. Every year of the recovery the same debate has been had, which is back in 20082009, there was a worry the companies would never hire again. Weve added a couple million jobs since then. Part of it becomes a question of do we just not know that its all going to turn out okay or has something fundamentally changed . Now were going to fight a head wind. The first is the fed is going to continue to taper. Thats going to be a head wind. Secondly Interest Rates will go above 3 . Theyll get out of this 2. 5 to 3 trading change. And then can people still afford houses . I think whats restraining the mark market now is the headwinds. A 3. 5 tenyear is indicative of a better economy. But you have to fight through it. Well bring chris back for that argument. It is a fascinating point. I had no idea on that metric this earnings season was the strongest in a couple years. Thank you. Tennessee volkswagen workers deciding whether to join the uaw. A yes vote would make it the first unionized auto plan in the south. Well speak exclusively with the uaw president next. And what you think a successful vote to unionize, how impact would it have on the Auto Industry. Tweet us cnbcclosingbell. All. 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. Tennessee volkswagen workers industry. Tennessee volkswagen workers industry. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Welcome back. As membership dwindles, the united autoworkers are facing a potential turning point. Workers in tennessee are voting on united nationsization right now. The stakes are pretty high because the uaw has unable to crack the Mason Dixon Line so far. Phil lebeau has the latest developments. This is a historic vote taking place in chattanooga, tennessee. Right now approximately 1500 workers are voting on whether they want to join the united autoworkers. They vote through friday night. At least one worker explained to us why hes interested in joining theu aw. We dont have a seat at the global works table and we need to have chattanooga there. We need to be there to raise our hand and say we need another car here, bring it to chattanooga, were ready. The stakes could not be bigger for the uaw which has been shut out of the deep south. Its membership peaked at 1. 5 million in 1979, dropping down to 355,000 a few years ago. One labor professor says when you look at whats at stake for the uaw, this could be the beginning of a turn. And there you have a shot of volkswagen versus General Motors over the last year, actually volkswagen alone. Kelly, this vote goes through friday night and for the uaw, big implications if they can actually convince these 1500 members to join the uaw. Kelly . Certainly. Stay with us, if you would, joining us in a first on cnbc interview is bob king, president of the uaw. Its great to have you here with us. Great to be here, kelly. So here is what i dont quite follow about this story. From the coverage it sounds like even if the volkswagen workers vote to join the uaw, theyre voting on creating a Works Council which would mean you give up control of this workforce almost as soon as you get it. What am i missing . Well, its not really giving up control. Its a different structure than were used to. Its an exciting opportunity for the workers in chattanooga to be a part of a global Works Council, to have a real voice in the operations of the plant in chattanooga, tennessee. Its a step forward in what theu aw has been doing with General Motors and chrysler and ford, the positive partnerships we have there. This is a more formal structure, a little different, but great, great opportunity for american workers, for American Labor management relations. Its doing what corporations here, the best corporations do like gm and ford and chrysler. They work with unions and our membership as partners to give the best product at the best value to the consumer. This is a great opportunity. I guess what i suppose i mean is how much of a reflection is this really on the uaw if its driven by a Foreign Company which wants to implement Something Like what it has back home here and it doesnt sound like it has that much involvement with the uaw directly . Well, the uaw would be deeply involved. Most of the members of the work 98 of the members in the Works Council are emittal members. Its something the union and management both believe in deeply in germany. Its a great opportunity for american industry to say how can we create better partnerships between workers and management. This is an opportunity to do it. Phil . Im curious, a lot of people look at this as a one off and say youre almost invited in here because of the Works Council, but with regard to the other foreign automakers in the deep south, many believe you have got no shot of ever organizing them in the future. Does this change the equation in your opinion . Well, i think what well demonstrate is when workers have a Free Democratic choice without management coming in and threatening them or threatening the future the plant, they will choose representation. We have been successful in the south. We represent three large frightliner facilities in the south south. We have won a number of supplier places but you havent won any of the large automakers. Pardon me for interrupting. Thats correct. Because weve never had a situation where Companies Really lived up to the code of conduct that they espouse. Japanese auto mamaker, the germ automakers, they say they support the workers right to organize and collective bargain but then their American Management fights very hard to prevent workers from joining unions. Volkswagen said its the employees choice. Were going to respect that and well find out. I believe that this election will show when workers have a free, open choice, theyll choose representation. Workers want a voice at the table, all workers do. There are some who also suggest, look, that unionization was what sent detroit down the path that its on today. Was what destroyed and carved out the northeast and set a lot of automakers south in the first place, and that this trend, if its if it becomes about more than just this volkswagen plant, could similarly push production outside of an area that now relies on it heavily. Well, look at what the uaw and gm and ford and chrysler are doing right now through a great partnership. We have the highest quality and the highest productive delivering the best vehicles at the best value to the consumers, market share is growing, tens of thousands of jobs are being created. Billions of new investment into the United States because of collective bargaining, because of the relationship of the uaw in these companies. And, phil, bob, thank you both. Did you want to get that last one in, phil . Well, just real quick. I know you have been working with the automakers and you have made a lot of changes, but the perception is still there, right or wrong, and i know you dont like it, the perception is still there that the uaw is an inhibitor to growth and productivity in companies. How do you change that . You change it by doing what were doing. Were the uaw of the 21st century. Were working together for the success of the employer because we know thats the best way to guarantee good wages, longterm security, secure retirement. So i think were showing over and over again on a daily basis that having a union is positive for the company, just like volkswagen says. It is a critical component to their success, the relationship with the unions, and i think in the u. S. Were proving that in the uaw. Were bringing manufacturing from mexico, from china, from korea, from europe back into the United States because we are working together for success of the company. Bob king and our own phil lebeau. Thank you both. Such an important vote. We will be watching it closely. Thank you. Appreciate it. And yet another massive winter storm hitting about a third of the country. Coming up next, find out if and when the stormy mess will hit your driveway. Plus, well discuss how much of a toll this years harsh winter is making on retailers profits. Also, the head of a Luxury Fashion house saying the 99 need to, quote, stop whining already. Thats exactly what he said. Well have the juicy details on this one. Dont go anywhere. But this asuss is lightweight and has everything they need not like chromebooks that cant install office or have to be connected to the internet to get much done. With this they can do homework, chat, play games on their own laptop, and their own time. So no more fighting. At least not over my laptop. Honestly, i wanna see you be brave need to, quote, stop whining could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. Already. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Bulldog what what . Bulldog mattress discounters president s day sale ends president s day . But mattress discounters has the Largest Selection of memory Foam Mattresses under one roof comforpedic, icomfort, optimum. Even a queensize sealy gel memory Foam Mattress for just 497. And wow four years interestfree financing on the entire tempurpedic cloud collection. Better hurry, mattress discounters president s day sale ends president s day. Mattress discounters welcome back. Lets start here with a market flash from dominic chu back at headquarters. Kelly a couple companies losing ground in the after hours session. Well start off with angies list falling after posting weaker than expected fourth earnings. The company sees First Quarter sales below street forecasts. You can see there down about 13 right now in the after market. Cheesecake Factory Police reporting weaker than expected earnings. They were negatively impacted by approximately 0. 7 because of, guess what, severe winter storms. You can see Cheesecake Factory down 3 in the after market as well. Back over to you. Thats interesting. Thank you, dom. Because yet another huge winter storm is grounding thousands of flights across the country and creating a messy commute home and the worst may not have hit yet. Tracking the storms impact both in terms of snowfall and economically speaking its paul walsh, weather and Business Analyst at the Weather Channel and Steve Liesman who has been fighting the snow in recent weeks and poring over storm relating Economic Data. Paul, how bad will it get . The storm right now were seeing across the southeast and well see it up here in the northeast later tonight and tomorrow is really, really big. Its a huge ice storm. The Weather Service uses words like historic and catastrophic and crippling. Its another big winter blast and its going to have implications certainly for february and maybe for the first part of q1. Paul, is the historic piece of this though the size of the storm, how late it is in the year, or the amount of precipitation . What is it thats so unusual and historic about this storm . Its the amount of ice thats going to be falling. Some areas it could create an inch of ice. There are going to be a lot of trees down, roof damage. Cars will be impacted. Its going to have an impact on the insurers for sure as we look at the first part of the year. Thats a great point. So, steve, when we first heard about the results from Cheesecake Factory which blamed some weakness on the weather. So how much of an impact is weather having. I could not get out to the Cheesecake Factory which is directly responsible for those results. Whats happening is economics reporters are becoming weather reporters. I want to show you some maps. If we could zoom out over here, this is the snowfall. These were sent to me from paul who is my regular source on this stuff. Here is 2013. You can see that the rockies right there, a little across the top of the country. Take a look at this year. All the way across the country, huge snow pack, much more, 16 of the nation, close to 43 over there. This is the key, kelly. See these areas in the south that never have snow . Those are not expected by the seasonal adjustments. You heard yellen yesterday talking about the weather, all the economists are talking about it. Here is the story. Probably going to have a reduction in hours worked. Theyre not slip sliding away in atlanta anymore. Theyre staying home which means theyre staying home from work, from the mall. It will rippile through the economy. It will probably be a bounce back in the next quarter. It will probably even out. Steve, youre pretty good at this. I dont know whats happening but steve is giving al roker a run for his money. We love steve. We all love all weather enthusiasts and steve is a bit of a weather geek and we really appreciate that. Paul, to his point, it sounds like people who are trying to think about how the economy is doing at this juncture, i imagine for retailers this has been a nightmare but there are some who say this could mean a lot of pent up demand in the springtime if we ever get there. For sure. And i think whenever you have a really cold, long winter like this impacting large populations, there is going to be a rebound, and the advantage this year is that the comp to last year is completely reversed. Last year we had a relatively warm february until the end of february and then it got really cold and snowy and then march and april were brutal. I think from a comp perspective were really well positioned. When the weather breaks, and it probably wont happen until late march or early april, theres going to be a rebound. I think it bodes well for the retail sector. Additionally, theres a late easter. Easter happens in april. All of that good pent up weather demand is going to happen at the right time. Kelly thats whats so interesting because if you look at a Cheesecake Factory, shares down 3 , shouldnt investors be thinking through this the way paul is . Its an interesting question as to whether theres pent up demand for cheesecake. I dont know if thats exactly what paul is talking about, but for autos, maybe sweaters, some stuff. Here is whats interesting from a Federal Reserve point of view. They want to know what the trend is in the economy. You will have one point in time where you have below trend and another point when you have above trend. I think you have to throw both results out effectively. The little bit of danger is if there is real weakness, it may not be evident for several months to come. Now we have a new indicator to add to the list. Im following the snow and cold. Cheesecake consumption. We hope everyone stays safe because an inch of ice sounds pretty much like the worst conditions ever. Really important to let people know whats going on. Stop whining, thats with the founder of Nicole Miller is telling the 99 . Coming up, a debate with robert frank over what this means and the rest of our panel. Dont go anywhere. Come on in. [ male announcer ] by meeting you more than halfway. Its how edward jones makes sense of investing. [ male announcer ] even more impressive than the research this man has at his disposal is how he puts it to work for his clients. Morning. Morning. Thanks for meeting so early. Come on in. [ male announcer ] its how edward jones makes sense of investing. Welcome back. The ceo of a Luxury Company touching off controversy after his comments on squawk box this morning. Nicole millers ceo said people considered poor in the u. S. Are actually wealthy compared with the rest of the world. Take a listen. The guy thats making, oh, my god, hes making 35,000 a year. Why dont you try that out in india or some countries we cant even name or Something Like a china. Any place. The guy is wealthy. Those remarks causing quite a stir today. Joining me to weigh in is kathy aruee and robert frank and the rest the closing bell panel. Robert, did these comments catch you off guard . They were interesting. If you look at what it takes to be in the top 1 globally, its 34,000. So he is right. 35,000 gets you in the 1 globally. If you look at china, india, those countries he mentioned. To get in the top 1 you need around 90,000 for those countries. It doesnt really put you in the 1 with 35 grand but youre certainly well off. The problem is that wealth is context youll. It all depends where you live. If youre making 35 grand in the u. S. But youre really not feeling great compared to say if youre in rural india or china. So unless youre living in those places, it doesnt make you feel better. Kathy, what was your reaction when you heard the remarks . I couldnt believe he said it, but if anything, i always hear people in congress complaining and whining and always asking for a raise. So if anything i would say the top 1 in our country have gotten used to whining. The bottom 99 are not whining. They actually believe that one day they will statistically be in the 1 . So they do not whine by nature. Theyre very positive. If anything, the top 1 is whining. There is one point, if you only focus on the income side, you can talk about where an american falls, about you what is the standard cost of living for an american who is making say 35,000 because i suspect its much higher than what a person might be making in rural india. Kelly, forget the difference between rural india and the United States. Talk about within the United States. It is contextual. 35,000 in minneapolis or rural minnesota where i have family and inlaws is a much different thing than in new york city. Lets do that to control federal tax rackets. You cant play both sides of equation here and say its different for other countries. Really good point. If it is different, to your point, then why dont we adjust federal tax brackets as well. We have done that. Look how far the taxes are in new york and california and those of us in ohio, for instance, go, yeah, well they deserve it. Look what theyre putting up with. I cant tell you how much people in minnesota get so an y annoyed when people in new york say i only make x and its killing me. I dont have enough money. And they say thats a lot of money, are you kidding me . It doesnt translate. These are different economies entirely, little mini economies, and they all work in a slightly different way and the amount it takes to be wealthy in each of these areas is very different. Another point that the wealthy often make charles koch and others have made this point, if you look at the consumption and lifestyle of people in the u. S. That are considered at or around the poverty line, they live better and have more things than the people in the poverty line in other countries. In fact, if you just took their lives, they would be considered wealthy or certainly but is poverty in rural india the benchmark you want to have in the United States of america . Thats the counter argument but children thats something you often hear these folks say aside from income. Cathy . But children are still going hungry in this country, so to say that 99 of the country is whining who is going hungry . I dont mean to be combative . Who is going hungry in this country . There are children going to sleep with full bellies . Everybody is fine . Theres the ability i think we have battled it incredibly. We are probably the best, the poster child if you will for the globe about combatting fantastic but there are still hungry children. If women dont join the workforce in the early 70s, we couldnt maintain the standard of living we have. Its a twoincome household. Since 2000 medium income for a family of four has grown from 54,000 to 51,000. This is why a major part of america is going i dont feel so good about this. If you look at consumption, its taking place with the 1 . We dont gauge ourselves by india or anybody else. We set our own standards. Cathy . Just saying 99 of people are not whining. I think its the top 1 that are whining and to say that was absurd today and it was inconsiderate and a lack of emotions. I really hope he takes back that comment. I wonder how much he makes. Exactly, exactly. Hes whining. Wouldnt wear a yellow sweater. Hes whiny, isnt he . Quite whine. Guys, thanks. Comments heard around the world. Cisco reporting better than expected earnings after the bell. The Conference Call is under way and lojosh joins us with more detail. That Conference Call just starting. Let me bring you some details. We were waiting for some guidance here, some forecasts from cisco. John chambers on the call saying that talking about q3 revenue and saying cisco is guiding for a q3 revenue decline between 6 and 8 . Analysts were looking for a decline of around 7 . That was broadly in line with consensus. Chambers also talking about the emerging market saying the em orders declined 3 . Brics down about 10 . Chambers say that the emerging markets, in his words, remain challenged, and in some sense out of ciscos control. Kelly, back to you. And shares are moving lower by 4 now after hours. Josh, thanks. That one is going to move markets tomorrow. An icy winter, its a hot website though. Wait until you hear what stories are clicking to the top of the hot list. As v we want to know what impact you think a successful vote would have on the Auto Industry. Tweet us cnbcclosingbell. S whyk has a new plan dozens of tax free zones all across the state. A a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. Yet another fierce winter storm wending its way up the east coast but its not cooling off the website. Allen what specifically are they looking through. My barn burner is what you were just talking about, the interview, the luxury ceo saying the poor should stop whining. We put up Robert Franks write up of that and that thing has been on fire all day long. Already 75,000 people have read the story. 40,000 watched our online interview. Over 17,000 have taken the poll we stuck in there. Here is the surprising part. You just had that debate. Our poll says 51 say, you know, hes bogus. 44 were saying, maybe he has a point. So thats our big read. My number two, obamacare, once again, 3. 3 million signed up. The government is liking that and our readers like it, too. Jeff coxs look at the real jobs number yellen should be worried about. Its the job openings and turnover. He dug in there. December worst month for job creation since august 2012. Just saying. Right. Allen, real quick, jim grant interview yesterday, im hearing a lot about that one. Numbers pretty good . His numbers were very good. What was really good about his interview was the sharing. A lot of people saw it and then shared it on twitter and other avenues. Thats the big thing. Allen, thank you so much. Great to see you and please be safe with all the ice thats bearing down our way. Your tweets are coming in fast and furious. Weve been asking what you think unionizing the first auto plant in the south, what impact would it have on the industry. Were cnbcclosingbell. Announcer where can an investor be a name and not a number . Scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Humans even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, we give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. Welcome back two screen viewing is hotter than ever. Catch olympic curling in a couple minutes. It is wall streets favorite sport. Plus you can live stream fast money freestyle and melissa lee joins us with a preview. Whats coming up next . Hey, kelly. You heard Marc Andreessen talk about this tech depression. Its a perfect day to be here at the conference for fast money freestyle. Well track the cisco Conference Call. Thats one tech company that may be in its own depression. Much more so in the after hour session. We have the ceo of fire eye, a high value stock, one of the best ipos in 2012. Dave dewalt will sit down with me for more on his stock. Its going to be a great one. Half an hour. Thats coming up after this. Melissa, thanks very much. Well let you get to it. What did you think will be the impact on the Auto Industry if workers unionize in the south . C carmine saying Union Leadership has ruined every industry they have touched including government workers. William tweets, growth in Union Workers means growth in the middle class, dont let anyone tell you different. Look at history with seven exclamation points. Two polar opposite views which represents how people feel about this subject. Steph, is there a trade you make off this one way or another or is this a wait and see . I new you have to wait and see how it plays out but i think the Auto Companies have gotten shellacked in the last couple weeks. I think it is weather related and i think gm and ford are doing pretty good. Morgan stanley said they think the auto cycle has pretty much run its course in the u. S. I think its too early to tell because we had big weather impacts in december and january. We still have a very compelling replacement story and they were saying go with the auto parts makers. I agree. Autos rallied mother russia, meet your newest olympic champion. It is day 3 of curling. The black sea coastline has the back drop. Welcome. Every olympics, curling grows in popularity. Theres a passionate group of followers who are watching this in the Late Afternoon and in in the middle of the night and one of the fanatics who calls himself willhelm i i tweeted me