Transcripts For CNBC Closing Bell 20140523

100 points off. Russian president Vladimir Putin not holding back in that exclusive interview that you saw here this morning on cnbc, telling a global audience that sanctions imposed against his nation for russias actions in ukraine will in his words boomerang on the United States. What threatened the energy markets. Well have a closer look and hear more of what mr. Putin said at that time. Maybe thats contributing to the Broader Market backdrop here. Also its the crown jewels sporting event of the memorial day weekend, the indianapolis 500 but its not just a car race, also big business. Do you know the minimum racers pay to participate in this event . Its 650 now, and it goes up from there so why does it cost so much . Well speak with the race president live in just a few minutes. It must be the Car Insurance. Can you imagine what the Car Insurance premiums must be going around that track . A great question. Please ask that. I have a good question now. The dow is up 57 points this hour. Lets take a look at where we stand in markets with about an hour to go. That means it 100plus points off its closing high and take a look at the nasdaq. The record close for the nasdaq or at least the recent high is still back. The s p 500, thats the one where right now we do stand in record closing territory, two points above that. Here we go with our Closing Bell Exchange for this friday. Ance stacia am rosa and joe bell and mike gibbs from Raymond James and cnbc contributor michael farr down in washington, d. C. And our own rick santelli. Thank you all for joining us today. Joe bell, here we sit, alltime high for the s p 500, a stones throw away for the dow and, man, you could hear a pin drop. These just not a lot of love for this market still, is there . No, theres really not. Underneath the surface there are some concerns. The leaders have really been in that territory. Those are the larger capps and when you look at the russell 2000 its pulled back about 10 so investors are telling us that they are a little more risk averse in 2014 so i think short term theres a bit of a concern. The fact that were not seeing that euphoria or optimism is a good sign Going Forward out in the next year or so. Michael fax i want to ask you who you think is in this market because on wall street people are hanging their heads and bemoaning the fact that there seems to be no trading activity and in the meantime Td Ameritrade showed about a 50 yearonyear jump in revenues. So is it possibly the case that this environment is okay for the retail investor, even if the institutional guys are kind of looking for for some volatility here . Longterm investors are in, kelly, and they have stayed in. Warren buffett is still in. Were still in. Most of the long only managers are still in. People are continuing to contribute to their 401 k s and for those who have done that over the past three years, five years, ten years, their numbers are looking good. The real risk to this market, in spite of everybody waiting for a pullback, the real risk is to have been out of it so if youve been in youve made money, and i think as long as folks are making money they dont get at. Retail, a lot of institutional and bill griffith, i love your mark hanes tie on today. We love marc and thank everybody for their service as we head to the memorial day as well. Thats what that is about, too. Anastasia, focusing on our markets here. Do you see youre the Global Market strategist there at jpmorgan funds. Well, theres always opportunities in the Global Investment universe. I think probably the best opportunity is europe, and the reason for that is because they still have a rampup, still have a Recovery Process and the ecb is certainly doing everything it can to support the recovery so i think thats one thing. The other thing i would say is even though emerging markets have been such a tough place to be its always the contrarian opportunity that ends up outperforming the market so if we look at russia and look at turkey and india, they are some of the markets that actually outperformed this week. Would you stay with russia given all the tough talk from Vladimir Putin . I think i think russia is one of those opportunities where theres two major investor concerns to be alleviated. Investors need to be convinced theres not going to be an invasion or military action, and i do think that president put putins remarks contributed to that sentiment and theres a little bit of a positive shift and the second thing that investors need to see is this talk of sanctions that is really hampering anything that russia can possibly do economically, the talk of sanctions needs to abate and once again the sentiment that i think president putin expressed as well as the sentiment building over the last week and a half or so is constructive. You know, mike gibbs, so we were just talking a little bit about the risk around the ukrainian elections sunday. Getting beyond that would you agree with say dan greenhouse over at btig who says its time to go wrong and the russell is the place to do it . Oh, i dont know that im there. The momentum is not there yet. I want to reiterate what the original panelist mentioned about. Were talking about an s p thats going to close attin alltime high but did you realize 47 of the stocks in the s p are down 7 or more and 45 are down 10 or more and in the small cap youve got 50 of the stocks that are down 16 or more so beneath the surface weve got a market thats actually been correcting, and were going to have to right this and clear this out and clear the deck before the market is on firm footing to make a move higher. The point youre making, that stealth correction that weve talked about on this program in the past. Rick santelli, did you see any market response to anything that Vladimir Putin said, and do you see it getting ready anywhere for those ukrainian votes on sunday . I really dont. Im not saying they are not super important and, of course, Foreign Policy isnt key, but i dont see anything in the financial markets. The Foreign Exchange markets either or the fixed income markets, boon, gilt that look like they are concentrating on anything on the vote. Theres a lot of talk about the june 15 ecb meeting, and i think its very interesting the kind of week weve had in treasuries. The closing yield in tenyears since a week ago thursday, bill, when we had our best close, lowest yield since july of last year at 2. 49, this is, because were closed early, the sixth close in a row between 2. 51 and 2. 55, and i think thats very important to keep in mind because whether the equity markets get their sea legs back or not i think next week with revisions to gdp and central banks, of course, being the big cheerleaders in a very physical way for what some of the action is in equities, the game is still afoot. Hey, michael farr, you mentioned 401 k s and retirement earlier, and theres a survey that we have more on our website about that just caught my eye because it sums up a lot of the trouble with this environment perhaps. Yeah, theres long money in this market but 55 of americans who were polled in this country surveyed said they didnt even know if they were saving for retirement or if they had a 401 k i guess is the point. Were going into the long weekend. Who are those people . What is one thing that people could do this weekend if they are overwhelmed by the fact that they have missed out on this rally, and maybe they dont have as much saved, would you have one or two recommendations . Yeah, first, think about your future now and start to take some responsibility for it. Dont believe necessarily that the governments going to be there to bail you out. If you dont have a retirement plan, start saving now. Its never too late. Invest in an index fund for the longterm. Need a fiveyear horizon. Even with the market at alltime highs, michael farr . The best rule is to invest when you have money. I mean, in 1998 the market was at alltime highs and it went up another 20 . Its really difficult to be out and to try and time this market. If youre going to be in for the long term you can do it. I wrote about it in my book a million is not enough. Toll the baby boomers seven or eight years ago they needed more money to retire on. Get started now. Index funds are great vehicles, but, please, start. Think about your future. Thanks. I just look at that. That caught my attention. Constantly reminded how Little People have done for their own retirement. 55 of the people surveyed didnt even know if they were in a 401 k plan. Thats too bad. Joe bell, as we sit here on the crux of memorial day weekend, i think about those sectors that might pertain to our u. S. Military, the Defense Industry has been, you know, downsized but yet those stocks have just continued to perform so well. I dont know if youve watched them at all, but, you know, do you think that thats a sector to keep an eye on these days . Yeah. You definitely want to always keep your eye on the leaders in this market, especially as we talked about. Youre talking about health care and the defensive stocks and Energy Stocks so if youre looking for pockets of strength within this market i think you do want to invest in the leaders and the defensive stocks are one of those leaders. And finally, mike, lets put up a chart of the s p 500 again. Were seeing right at 1900. How significant is that from a technical or historical point of view . Its a round number. I really dont pay that much attention to it. I still think the s p is Still Holding up near a high and the rest of the market is correcting pretty hard and tough to catch up until the rest of the market catches its legs. Thank you, folks. Have a good long weekend. Have a good memorial day weekend. And were going into the last hour here. Its going to get loud for a couple of reasons here in this last hour. A lot of customs, a lot of tradition come to the floor. In 20 minutes when we hit on the clock it will read 3 33 33 ahead of a threeday weekend when the whole floor will go up, starting to hear the whoops already and a member of the military will be ringing the closing bell and there will be a lot of applause for him as he makes his way through the Trading Floor. A lot to look forward to and the dow up 59 but the s p were watching carefully because it is in record territory right now. If we close here anyway. 1900 on the dot. Our stocks that pay a dividend like apple and qualcomm are the best place to put new money to work . Plus, who would have thunk it, investors buying penny stocks at the fastest rate ever. Well speak with a couple of market pros about what is driving that surge and whether its a good idea. And in our continuing series on the rising cost of health care, one of obamacares architects, sew eke emanuel tells us what needs to be done to get skyrocketing drug prices back down to earth. Stay tuned. More coming up on closing bell. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Honestly, the offseason isnt ive got a lot to do. Thats why i got my surface. Its great for watching game film and drawing up plays. Its got onenote, so i can stay on top of my todo list, which has been absolutely absurd since the big game. With skype, its just really easy to stay in touch with the kids i work with. Alright, russell you are good to go alright, fellas. Alright, russ. Back to work penny stocks are seeing massive increase in volume right now. By some measures activity is up over 40 from last year due largely to small investors starting to dabble in these risky names. Coverage about this today. We had a sense this was coming, why . If you recall Shaquille Oneal on this show recently brought up penny stocks. Listen to what he had to say. I dabble a little bit. Do penny stocks here and there. Penny stocks. Enpenny stocks, yeah. Get into the big caps. No. Invest for real. Ever since watching wolf of wall street i try to do my thick. Not. I just like to have pun. No blue chips for the big guy. So is this renewed interest telling us that there are opportunities in the pink sheets, as they are moan . Joining us is colin barr from the wall street journal who wrote the article on that and ben willis from princeton securities who made a market in penny stocks on the pink sheets here on the floor. I was working with another firm at the time. I actually wrote the rule for the markets on the floor of the Stock Exchange so i have a little bit of experience in actually trading them so well see where we can go with this. Colin, what do you make of the resurgence of interest in pink sheets or penny stocks right now . Whats that about . Well, i think people want to find ways to get return on their money. Youre not making a whole lot in savings accounts or a lot of the blue chip stocks that dont seem to move a lot sometimes so i think a lot of people were attracted to these thinking its a way for me to double my money. I couldnt help but notice as well. That stuff matters, colin, and is investing in penny stocks a terrible idea or just a really bad one . Thats a good question. Theres a lot of risk in these. The old saying is these are sold rather than bought and thats the problem with penny stocks, you cant tell. You cant tell who is behind them and who is telling them. I think sometimes their mott i was arent absolutely pure. Its a good idea to stay away from these unless you have money that youre not very attached to. When i think of the pink sheets i think suckers market, i think bucket shops, dont think of the big board and i think of market top, especially when theres renewed interest. A couple of things that go to the percentage change in the penny stocks. First of all, fannie mae and freddie mac have had a major major impact on that number in and of itself and thats really not the playground of the sucker moves. They are small they are considered small caps since they have been listed. The only place that they have allowed to trade son the pink sheets. Ill give you a better example of what i have a stock certificate of what traditionally is a penny stock. Called a Lottery Ticket. If youre comparing to a Lottery Ticket, fine, but on their own merit. On their own merit they have very little merit. Very, very few and far between, and ive worked with legitimate companies that do capital formations and some are actually traded down here on the big board. They have grown from that status. The games that are played, as we just heard, is that this is a manipulated market. If you look at the Yahoo Finance message boards, you will see stocks that are touted. As a market maker and broker dealer i was not allowed to challenge the statements made by those people. You knew they were being pumped and dumped. So youre saying theres a legitimate basis for this market because they grow up into blue chip stocks. There can be, but they are few and far between, like a Lottery Ticket. Theres a winner of the lottery. The vast majority are actually not, so thats really what were facing and its a highly manipulated market, the pump and dump. The wolf of wall street is a perfect example. Thats what they are specialized in. Dont go ask your wife if its okay if you need 10,000 right now. Read josh browns book. Thank you the phone. Colin . I agree. What about your point about fannie and freddie maybe distorting the volume numbers that were seeing right new in the pink sheets. If you back out fannie and freddie and theres a bunch of foreign stocks listed on the pink sheets or that trade on the pink sheets because they arent listed, volkswagen and things like that, actually volume increase is larger if you back them out, so there is actually a big rise in trading of penny stocks. I dont think theres any doubt about that. To the point about fannie and freddie, those are Lottery Tickets, too. People in the government have said were going to wind these down. Theres not a congressional debate over that. Theres no reason for anyone to think that those will be money good either. Thats a whole separate segment. Right. People think they will be trading at 25. Like you said. They had a different discussion, colin, it was a great piece, and i guess the last thing that i would just say i know were out of time. It was thoughtprovoking. We always have more questions but so little time. Thank you both for joining us. Let you get back to work on the Trading Floor. 40 minute to go here. The dow is up 61 points. The s p were seven but its sitting right at 1900. Its important. 1902 is the record intraday high. I think were almost there. 1897 is the closing high so if we close right here, a new high for the s p going into the long weekend here. Speaking of which, the new xmen movie is expected to rake in over 100 million this memorial day weekend. Well talk with a top media analyst next about which studios could come out on top by the end of this summer. Also coming up. Revenge of the nerds. Were calling this the geek economy. Our resident geekdom nick chu will give us the lowdown on which companies can give the biggest boost from this rise. Dont get it. You will after this. Predicting the future is a pretty difficult thing to do. But, manufacturing in the United States means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. 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. Welcome back. Heres a look at where we stand. This could be the day that the s p 500, as Carl Quintanilla tweeted out, closes at or above 1900, bill. Up about eight points right now sitting right at that mark. Speaking of other round numbers, the dow adding 60. Just above the level of 16,600. Not the round numbers mean anything but they always signify. And as carl would know its hip to be square. The certain popularity of being a geek is creating huge profits for certain segments of Corporate America. Hes our inhouse geek. Lets face it, carl it, kelly, you are, bill, we are all geeks. Do business news. We have to be geeks in some way. Lets check out the members of Lamda Lamda Lamda fraternity. We call this geek on my. Who are these nerds and how can you profit from them . Well, how about disney, first of all. The marvel franchise, disney is up about 8 so far this year. Remember captain america the Winter Soldier, grossed over 700 Million Worldwide and it star wars reboot promises to bring the true force of the nerd back into theaters in the year 2015. That stock up 8 so far this year or take a look at act vision, the video game company, right . It owns the ultra nerdy world of war craft series with 7. 6 million subscribers. That stock took a bit of a hit. Selling a large stake in the company and still nearly doubled since the start of just 2013. Now, you may not think of pepsico as nerdy, but its mountain dew brand is engrained in that nerd culture partnering with games like halo and Microsofts Xbox 1. Pepsi has gained a quick 11 from its february lows so not too shabby there or the ultimate in nerd culture. How about virtual reality. Oculus, the privately held company, scoring a 2 billion takeover from the likes of facebook so how that will be incorporated is yet to be seep. The stock still pretty volatile, up 11 and the geek trade, the nerd trade, it could have legs. Remember, its all about the future of technology. Us nerds, we do love that tech trade. Back over to you guys. Yes, we do, dom. Thanks very much. Youll hear more whooping from the Trading Floor here as we proceed and get closer to 3 30 east coast time. The tradition is to celebrate. And for the bill to take part. No, its not. We want to look at the box office because the geeks control the box office and how it does and were heading into the Summer Box Office season right now. With us is a movie expert. Great to be here. This is like the weekend that i just live for, memorial weekend. Always a big one. They are whooting in the background for that. And i have to say that im a movie geek and this is my weekend. Youre talking about geeks earlier. Thats what i am for sure. I wonder if this is the weekend movie buffs are moving for. Is this the year that revenues for the box office go from a small increase to perhaps running to a small decline. You never know. Last memorial weekend was a record breaker when fast and furious led the weekend to 314 million for the four days of the memorial weekend period. Thats huge so you had a great mix of films out there. Iron man 3 as well but this year is no slouch. X men, days of future past from fox will do really well. For the four days, i think over 100 million. A terrific franchise. The first one was released back in the year 2000 which predated the first spiderman with toby maguire for two years. I think this is going to do tremendously this weekend, and then you have counter programming with blended which is a comedy with adam sandler and drew barry more and all the holdovers from earlier in the Summer Season. The Summer Season is creeping earlier and earlier. Summer doesnt start until june 21st and now the beginning of may has suddenly become this new area for the studios to start to try out. Loads la game out earlier than it otherwise would have. Thats right. And even if you look at captain america, the Winter Soldier that opened in early april but we have to start the start point of the summer somewhere so i think that the beginning of may really works, and i think when that all changed is with the first spiderman movie it was the first film that opened for 100 million and that was a big deal, and now you have films like godzilla doing really well, amazing spiderman 2 doing well this year and it all ramps up to this big memorial weekend. Theres a lot of time over that weekend, four days, friday, saturday, sunday and monday for people to catch up on the movies that they havent seen, maybe neighbors might be your taste. Want a really good rrated comedy or if you want to see x men which is on everyones minds. Theres a lot of product and a lot more to come. Yeah. Information is flying fast and furious. Do we know already based on the midnight box office how well x men did, and, i mean, everything will depend on how that movie does this weekend, correct . All signs point to a tremendous weekend. I wouldnt be surprised if it were to earn 115 million for four days, maybe more than that. Anything over 100 million i think is a grand slam. Certainly x men the last stand back in 2006 opened with 102 million and that was a great weekend for that film. This is a franchise that has a huge foolg following, not just here by worldwide and we follow those international numbers, and those are vitally important. They provide well over 50 of the global take, and the summer from north america represents 40 of the total year box office, so this is really the biggest time of the year for hollywood, from the first weekend in may through labor day, 40 of the fullyear box office. Its a big deal. Its their christmas. Their christmas and black friday and everything all at once. Paul, the ultimate movie fan. Paul, thanks for joining us. Thank you. This is probably the loudest whoop whoop friday weve had in a long time. Between the golden bull yesterday, talking about it on the show with michelle and the whooping today at a fever pitch, maybe there are lots of subtle market signals. I think so. Around here. Lets send it back to headquarter. A little bit quieter and dominic chu has a market flash. I can hear it all. It must be the unofficial start to summer whoop whoop so, again, kudos for you guys for dealing with that. Bloomberg here is reporting that ibm is going to stop reselling net app storage products starting on tuesday, may 27. The company will focus on its own storage devices which means net app will miss out on revenues, spiking lower towards session lows, down over 2 on this bit of news. Bill, kelly, net app not seeing a good close towards todays positive day. Back over to you. We might in a commercial break. I wonder if that was intentional. The tragedy, depending on how you view this thing. Continuing higher. The dow is up 63 point capping off a positive week for the major averages. The s p in record territory. And if it closes in record territory, bill is going to whoop, too, right. Moving on. Russian president Vladimir Putin speaking with cnbc in an exclusive interview earlier. Political pressure in our modern world. Is putin right . Will u. S. Sanctions backfire on us by sending oil prices skyrocketing here at home . Our pros will weigh in on that. Also, coming up, after the whoop whoop, dividend stocks, all the rage for some time, but someone here says the trade has become way too crowded. Well look at the merits and the demerits of dividend stocks when we come back. Youre going to miss the whoop whoop. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Its gotten quiet again. Kelly is working hard to get it on twitter. Up 65 points on the Dow Jones Industrial average. Were at about the high of the session right there. The s p, thats record territory. Just need to close above 1897 and change. Were there now with a gain of eight points. Nasdaq is up 31, and the russian el is up 12 points or more than 1 right now. My video skills, they need a little polishing. Meantime, the stock markets fear index known as the vix, its fallen to its lowest level in over a year. Take a look. People are calling this the volatility crash. Yes. Kind of ironically worded. Off another 5 . Today its down 15 this year. Matt mccormick from ball warning, could be in store for a volatile summer so what do you buy here . Matt joins us now to tell us why the high quality dividend stocks are still the way to go and he thinks the market is not going to be the to be kind to the stocks in the near term so thank you both for joining us today. What do you think . Where am i going guys, over there . Okay. I think youll see a volatile summer. The market looks complacent, and i also think you need to look at valuations. When you see nondividend paying stocks are trading for 37. 5 times, the last time we saw a pe this high for nondividend paying stocks was the Third Quarter of 07 so when you see the last two years, 2012, 2013, you saw high pe trade, a low quality trade and a nondividend paying trade, thats reverse this year when youre seeing dividends outperform and quality outperform, and when you see more volatility, people will go to apple and go to j j and merck, names that are driving the s p, wont go to amazon which is getting hurt year to date. Its a way to play a more volatile summer. I wonder, do you think quality and dividends can do well even if we dont have a volatile summer because, again, a lot of this sounds like it could depend on whether we see more movement in stocks. Lets take a look at if you take a look at mcdonalds, general mills, and theres 50 of their earnings, and if Interest Rates smart to meld up, even up half a poirngt the cost of capital gets more expensive and the stocks will get hurt. Some of the dividend growers i think will do a lot better and outperform over the long run. Like who . Give an example, more of a defensive stock, outperformed the s p the last decade by a few hundred percent, and if you take a look at what do they have, they have stocks like if you looked at procter gamble, they have tide, church and dwight owns ultra so they get a huge profit margin. So i feel more comfortable owning a church and dwight versus some of the other stocks in there. Same question for you, matt, back to your point there. Would you recommend the same names. Do you think they could do well with the bigger cap names even if we dont have volatility this summer. Shower. I like church and dwight. I like proctor. Mcdonalds has run their dividend for four decades in a row. Where i would be a little risk averse. The ratio up 11 year to date. Its a little bit stretched. When you look at the area shane and i agree on. Grow your income during volatile times and technology is real where im pounding the table on. It has a strong recash flow. Apple, qualcomm, these are names that i think are very exciting with the payout ratio that can double in my opinion, and i think people will really seek out dividends, when its 2008, 2011, this year when volatility picks up people move dividends. What about shanes point, and i think its a valid one that rates will have to go up at some point as the fed winds down its tapers process probably this fall sometime. Rates havent gone up yet as might have been expected but they have to eventually. Wont that hurt those dividend payers . I think it may hurt the higher ones like the telecoms and the utilities, but, you know, everybody was pouncing on the table of rates going up higher. I dont think thats the case. The tenyear has fallen roughly 50 basis points year to date. I would watch out for the high payout Interest Rate sensitive names like the kehl comes and utility. Go for more dividend growth. Still near the lows on that measure so room to grow. Thank you question. Take care. Heading towards the close, and weve had pretty good gains today, and we are positive on all four of the major averages for this week. The dow, the s p, the nasdaq and the russell 2000 especially. In fact, the winner this week. I just looked, so i know. The nasdaq is up more than 2 for this week right now. And ruts el is almost there. Almost an open quiz. Were you pine. Coming, one of the cheap architects of obamacare, zeke emanuel on what the government needs to do to keep drug costs affordable. And coming around the bend. Well talk to a threetime winner of the indy 500 ahead of the big race this weekend. Over 2. 5 million is at stake, and he wants number 4. Keep it right here. mother vo when i was pregnant. I got lots of advice, but i needed information i could trust. Unitedhealthcares innovative, Simple Program helps moms stay on track with their doctors to get the right care and guidance. anncr vo thats health in numbers. Unitedhealthcare. Because you cant beat zero heartburn. Woo hoo [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. One pill each morning. 24 hours. Zero heartburn. You are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back with some breaking news on some cabinet changes at the white house. As expected president obama is in the white house right now announcing that Shaun Donovan, his hud secretary, is going to move over and become budget director. Sylvia matthews burwell, the current director, has been nominated to replace Kathleen Sebelius at hhs and julian castro, a rising star in Democratic Politics who is hispanic, is being nominated to replace Shaun Donovan at hud. Both of these are expected to be easily confirmed by the senate. Not much doubt about that, and the president is making those. Its consistent with his policy in the second term of promoting from within. That is donovan moving over to omb and julian castro, who knows, down the road, could even be on a National Ticket as a Vice President ial candidate. Theres some discussion of that, even as early as 2016. All right. A space to watch, john. Thats for sure. Thank you so much. John harwood. Now, a quick look at markets, shall we . Sure, up 63 points right now on the dow industrials. The s p if youre joining us is in record territory by three points, up eight points at 1900. Mary notchson is with thompson n the floor of the new york Stock Exchange. Reporter on may 13th thats the last time the s p was at a new closing high on mai 13th. The alltime high for the s p also hit that day at 1902. 17. Heres some stocks leading the s p higher today. Of course, hack yard up on the news its cutting an additional 16,000 jobs and after reporting strong Free Cash Flow as well, its stock getting a lift. Trip adviser up as well, ahead as we start the unofficial start to the Summer Season. A lot of vacations evidently not booked yet so some feel that will be good for trip adviser. Better than expected results and lennar up on better than expected new home sales for the month of april. The dow up 63 and the s p is what were watching at 1900. Should we close above these levels for the first time ever. A little bit later, youve heard. It got a pretty good rally going off today to cap off when all is said and done a positive week after all the volatility. In the rake of 2 gains. Were going to talk more about that next hour. Coming up. We talked about whether after that index has been down 10 , whether dan greenhouse says its time to start going long, buying those small cap stocks again. That all starts in just about 15 minutes here on the close. Are. Theyre why we innovate. Theyre who we protect. Theyre why we make life less complicated. Its about people. We are volvo of sweden. Heading towards the close. About ten minutes left in the trading session. The dow up for the session. Nasdaq up 29, the s p in regard territory and the russell is the big gainer today, up more than 1 right now. Joining us now, independent Investment Consultant david darche and peter from empire consultants. Your check list includes sleeping under the stars. Already youre counting the days here. Our 14th year to put that out. Distributed that within Morgan Stanley and elsewhere of things to accomplish and we hope everybody will start off the sum we are a great memorial day weekend and remembering our military service. We thanked the military for their service. Does that include buying stocks this summer . Is that one of the things . It does. I think were going to get a very low print for the First Quarter. Next thursday, you get that First Quarter number. Its been chased more and more like ice melting in the sun. Down to minus. 7 is the consensus now and the quarter that were in now looks like a 4, 4. 5 or maybe even 5. Wow. So retail sales, bill and kelly, retail sales have been lackluster so we expect those to pick up, but the manufacturing side of the economy is there. You saw the new home sales and existing home sales this week. So numbers are picking up a little bit, so i think buying stocks could be a good idea. All right. Do you agree. As we sit here. Above 1,900. Im going to tell you right now. Said this one other place. The cost of family fortune is lighting up. I think the market i really feel that the market is very top heavy and we wont see a correction and im going against the grain. Weve had a great move. Great returns, and i think that, you know going into cash. Im going into cash. Really. I think that weve i think that the the risk reward that you have Going Forward until the end of the second quarter, the end of the summer is going to be negligible. Youve been on the floor a long time. Ive been here before. But is it something that you expect to happen . Just a gut feeling. Couldnt be higher Interest Rates, not a bad print . I think well see higher Interest Rates by the end of the year though. Yes. But but i think right now i im lightening up. I think the market has had a great run. Very fairly priced in almost every sector of the economy and theres probably more expansion. I dont think it will help the market much. What do you think technically speaking. 1901 now on the s p. You want to look at trends, psychological points, go watch criminal minds. 1,900 means nothing. When we see the papers tomorrow morning with this level potentially in the headline, what is what effect is that going to have. To the going to be on the front page. It will basically cause people to reevaluate. Are they more worried about being out of the stock market than being in the stock market. I agree with peter. Youll have a 10 correction sometime this summer. Youve got china slowing down. Youve got this ukraine election this sunday. Okay. On sunday. Youve got geopolitics that can come in. The fed is going to help you if we get under pressure. But if youve been waiting for that buying opportunity to get in, youve missed the whole rally. Weve gotten more and more expensive. You want to be the last one to the table or the first one out of table. 55 of americans dont even know if they are in a 401 k and being at these levels and waiting that that is buying opportunity have kept a lot of people out of the market. You want to own defensive stocks. Weve said health care and apple which is up 8 now, that thing can go up another 12 , 15 . Above 700 by the year end, but there will be a time to maybe put more money to work at lower levels, kelly. Well keep you guys right there and come back and have the closing countdown as we wrap things up for this friday going into the long memorial day weekend. Yes. We could also be in for another nail biter as the s p could close at a record that we just discusses. Were four points above the prior closing higher. Well be right back. Youre watching cnbc, first in business worldwide. When i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards even cash back. And my rewards points wont expire. So you can make owning business even more rewarding. Ink from chase. So you can. Now printing is so affordable and convenient, you can print all you want. Hp instant ink. Save on ink and never run out again. Plans start at just 2. 99 a month. Welcome to the future of printing. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your Trading Floor. Get realtime market scanning wherever you are with the mobile trader app. From Td Ameritrade. All right. Three minute left in the trading session. Dont panic. Dont have to read this whole chart. This is the four major inddeese, the dow, the nasdaq, s p and russell 2000 for this week and whats important up here. The nasdaq is the big gainer, a gain of 2. 3 for the week. Theres the s p, up 1. 25 and the russell up 2 , so pretty good gains for the week. What didnt have a good gain for the week was the fear indicator, so as the averages continued higher and the s p hits an alltime high, the vix is down 5 for the week, and were at a 14month low right now at 14. 37 which plays to your argument because, lower, the volatility goes, it it often can signal a top of the market of some kind. Absolutely. And i think theres still a little more room on the vix so the market has a little bit more. Weve been trading narrow range for the last, oh, my god, almost all year. Right. But i think if we see it right below 11, to me thats a better sign, a better signal. Do have an interesting fact for you before we go. The interesting fact is the last four memorial day weeks have been down weeks, an average of over 2 , so its just something to think about going into next week. Next week. Its been a down week. Because the old saw sell in may and go away hasnt happened last year. Didnt happen last year. Nothing happened except for people making money. Thats a limited partnership. Pharmaceuticals. You want us to go to the safe plays right now. You can go to the safe plays. You want to own the good stocks like schlumberger and buy from johnson johnson, stay on the defensive side. Limited partnerships are a yield play, as you know. Interest rates are low and volatility is low. We want to congratulate the president of the new york Stock Exchange for his seven years of service. What are you taking off the table . 6 or 10 off the s p from where we are now. What if it keeps going higher . Then im wrong, and then ive got a lot of money in cash thats got to do something and a lot of family members that are going to be mad at me. The s p up eight point, still sitting at 1900. Is that considered resistant . Do we consider it at a round number . Psychologically you can go through that whole argument. It should be. Obviously havent blown through and theres nothing to make it go through and i dont think the closing balances will be there. Thank you, gentlemen. Have a great memorial day weekend. And as we go out a tradition on this memorial day friday, members of our military ringing the closing bell here at the new york Stock Exchange, and we all do honor them and thank them for their service to our country. Were going out alltime highs for the s p. First time above 1900. More to come now on this second hour of the closing bell with kelly evans and company. Have a good weekend, kell. Thank you, bill. Welcome to closing bell. Im kelly evans. You hear cheers on wall street. This isnt the whoop whoop because were finishing the day at alltime highs as investors pack up for the holiday weekend. No volatility but there have been gains. The dow adding 62 points, nasdaq adding 31 to 4185. Its most recent high in march but its the s p 500, 1900 on the nose. Where were closing on this friday adding eight points in that represents a new closing high for the broad market index. Lets bring in todays panel. Joining me now cnbc contributor elan, sheila and dan greenhouse and carol roth and also with more on todays Market Action is fast money trader jon najarian. Initial thoughts about the s p at 1900, what do you make of it all . Round numbers always make for good headlines but mean anything more than 1899 or 1901. I think the general rule here is that largecap stocks have held up quite well, and despite the fact that theres been a focus on bond market rally and concerns about growth and a smallcap selloff, largecap stocks are basically at a record high. You last night put out a note where you said its time to start getting long, especially the russell 2000 called the smallcap index and basically the broadest index. The question for a lot of people not in the market. They see us at record highs, from that point, and ill ask you as well, dr. J, is there for room to run generally in the stocks . Theres two things. One is the small cap and largecap argument. With respect to smallcaps and the s p 500 i dont see why there isnt more room to run. Bias to the upside, however modest, but its been to the upside and assuming growth expectations pick up and the economic accelerates from the First Quarter, i dont know why over time the stock market shouldnt do better. With regard to the large cap, small cap divergence, a number of internal things that we look at. And im going to make you hold that thought until our next segment, everybody, when we talk specifically about the small cap stocks. Room to run here and if so where . Plenty. Because kelly, quite frankly, you and i have talked about it a lot the American Association of have had investors report the aaii had the most neutral reading weve had in nine years, and so, in other words, theres an awful lot of folks who are on the fence. Not willing to commit money from the market and not just swarming after all these stocks and thats a lot of money, kelly, that come into the markets and is likely to, as dan said, as we start to see the thawing out of the consumer, Williams Sonoma and tiffany as well as home depot and lowes this week, all the different stocks, and now were starting to gell get a little push from housing. Well have a lot more to the upside. Thats a little bit of the skepticism. All of the Economic Data that weve run so far this year has been uneven. If you take a look at outlook looking at the corporate earnings season, not great. A lot of people tell me that this is a rally without conviction. Isnt that worrisome . Were loaded with skepticism and thats the bullish part of it. In other words, the fact that people are so skeptical, sheila, is why im so bullish. But i think that theres i think that theres theres another issue here and i think that sheila was starting to hit on that. In terms of the economy, the economy sort of reminds me of a chacha where you get the momentum forward and then you come back and you move around a little and you step back, but at the end. Day it doesnt really seem to be going anywhere. In terms of the indicators there arent really any that are showing month after month or quarter after quarter any sort of growth trend and thats the part that im concerned about. Dan talked about if growth picked up, they had a very big in f and valuations that are based on high growth rates so im not sure well end up achieving. Elam . I have to agree. I dont know if its a chacha or A Paula Abdul video that the economy is doing right now. I want to make a broader point about all the fed chatter weve heard this week and rate rage will be the new big thing. You know, im trying to blame the fed for sending mixed signals but sometimes its maybe just the market misunderstanding what the fed is saying. Its been very consistent. Its waiting for clear signs that the economy is improving before well start to increase its Interest Rates, and maybe some of the problems with the fed Forward Guidance is actually that its assumed that investors are more intelligent or more rational than they actually are. Do you think people are being irrational . I think there can be. Fed governor jeremy stein said in a recent speech that the softer the fed talks the more it tries to calm the markets down, the more the markets lone in to hear the feds whisper and there tends to be mania and overreaction to any small shift. Heres what i dont understand. Were actually in the midst of a massive sea shift. Talked to larry kudlow and talked to everybody about it this week and we dont know what its going to look like and what form its going to take. Meantime youve got the Morgan Stanleys of the world and goldman talking about how much more quickly rates could rise, about inflation bottoming out. Why instead of being massively sensitive to these huge indexes do they appear to be shanking and even the bond market shrugging their shoulders and shaking it all o. Dont seem to care. Theres two different dynamics going on here. Let me first add before i get into that, can i disagree with the aforementioned points. Theres no doubt in my mind, print it, no doubt in my mind that the can i will do better in the subsequent three quarters. A very low bar though. I dont disagree but low bars can still be hurdled. With respect to the tenyear in the stock market, listen, there are oftentimes where theres divergences where one group of investors stiffs something out. And as far as were concerned, whats going on in the ten year is entirely separate of whats going on in the stock market, and to the point of a better economy Going Forward, the prospect for corporate earnings, that drives stock prices higher. Whats going on in the tenyear is a much larger conversation. But taking a look at that corporate earnings season and what companies are doing. The earnings season was fine if you look at the big picture statistics, but if you really listen to what the ceos were saying, a lot of their outlooks and guidance really disappointing. Got to disagree again. Go through as many conference calls. Give me some examples. Taking a step back before we get into the specifics. Lets get right to the specifics. The economy was definitely stabilizing and improving. Theres a number of companies in the industrial space and including Companies Like starbucks and the like that operate in china that talk about how the micro in china is much better than mac row. With respect to the economy here in the United States, any number of companies talks about how january and february was not good. The weather impacted everything from jpmorgan to darden, but march looked better and april looked better. Look at old navys comps in april. Carol, getting specific in this case, there are areas where you do see signs that theres been a pickup just in the january and february month. Obviously theres a pickup but were certainly not anywhere where we need to be and in terms of the growth rate that were talking about, looking at the multiple of where this market is trading, i are we going to get something thats going to sustain a 13 or 14 or 15 longterm growth rate in the case of the russell . You know, right now the signs are not pointing in that direction, kell, and i think we have to look at things on a comprehensive basis, and what does that mean in terms of the way the market is trading in the multiples . Im not sure that they justify that kind of a growth level. Thats all fair. Donna rothschild had a very famous quote, you go to war with the army you have, not the one you want. I want a much better economy and Unemployment Rate and want the fed doing things better and the fact of the matter is this is the environment and weve spent three years, four years saying Earnings Growth should be higher, Revenue Growth should be higher. Cut to the bone the economy. The fact of the matter is the stock market is up 170 some the percent off the low and at record highs today and people are advancing the exact same arguments, complaints, bernousness today they were two or three years ago. How big how far can that multiple go . Where do you think they would be at . There are other things that go into stock prices besides multiples. Lets hold everything in the universe flat but earnings go up 3 or 2 . Still get higher stock prices. Dr. J . Where i absolutely agree with dan is i have not been focused on the russell. Now theres obviously some folks who are, and they keep trying to tell me thats a leading indicator. It hasnt been. In fact, if youve been following that indicator then youve missed the last several hundred points. Exactly right. And thats been a fools follow to be in following those stocks. Wheres the money flowing into . Its flowing into caterpillar as dan said. Its flowing into exxon mobil. Its flowing into a lot of the Big Industrial names that are much better balance sheets, that arent pie in the sky and they are real strong earnings right now. I think that continues and gets better in the second half of the year. Great point. Dr. J, before we let you go. What do you think for people out there is the one or two couple of things that they need to watch then . If its not the russell what, is it here . Right now i think youre going to see a big turn in some of the momo stocks that broke down so hard, so in particular i dont think you buy a basket of them. You buy the best. So if you want to be in social media, you do buy a facebook. You dont buy twitter. I think there may be some activist play in twitter, but other than that facebook is the much better place for your money. Well leave it there for now. Thanks for joining us, dr. J and stick around. Catch more of dr. J coming up on fast money at 5 00 p. M. They will be talking to the ceo of trulia about the housing recovery and how its affecting his business. Here, weve been flecking at it. Small caps posting big losses since early march and up next well hear from somebody who says now is the time to buy the russell 2000 before it takes off. Will skyrocketing Prescription Drug prices lead to government price control. Coming up, well hear from one of the architects of obamacare zeke emanuel, and then theres there. Translator as the political pressure has russian president Vladimir Putin warning today on cnbc that u. S. Sanctions could have dire economic consequences for us. Is he threatening an oil war with the west . Thats later on closing bell. Youre watching cnbc, first in business worldwide. Really. So our business can be on at ts network for 175 dollars a month . Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. Welcome back. Heres a look at the russell 2000 and up 2 . Still down 7 since the peak in early march and it had been down as much as 10 . In correction territory. That slump is not stopping one of todays panelists, from Dan Greenhaus from going long. Well ask him about the underlinks for a possible rally. And another thats not nearly as bullish on the group of stocks as dan. First, my simple question. The russell 2000 is trading at a trailing 12month pricetoearnings ratio at Something Like 75, may be higher than that. Why do you think it will continue to rally and that number could continue to go up . A couple of things that go into this argument. With respect to the trailing pe and forward pe the important thing to do with respect to the russ sell the first thing you want to do is x out companies with no earnings whatsoever, but that aside the point is there are companies that dont have earnings. Why would you x them out. Let me take a step back here. My primary focus is the large Companies Like the s p 500. Whats going on in the russell 2,000 is what happened at the peak. Stocks like skunk and fire eye, they have gone by any measure, a stretch, you might say. What you see here in the last couple of trading session, really about a week and a half, the stocks that led the russell 2,000 down are starting to bounce a little bit more than the rest of the index, Something Like the biotechs which was supposed to climb. The shift from growth to value, out of growth and into value, which primarily led the decline now seems to be reversing and leaving aside the valuation argument, and for small caps that is always the question mark, appear to be a number of internals by our measures suggest valuation doesnt matter because the charts look good . No, no, no. Listen, if you want to boil it down to the charts, you can. Listen, value as i at the end of the day is never going to be a markettime tool. Something thats expensive can get more expensive and something thats cheap can get more cheap. Thats an important point. Do you not see it the same way, russell 2000, not a small cap, basically an all market kind of an index. You dont think thats on the rebound here . Absolutely. I think when you look at the russell we low tate into this sector numerous times per year but this is not the time to make that move. At the end of may weve got a weakness in corporate earnings as a whole and quantitative easing coming to an end and we have Interest Rates rearing their head at some point in time in the future so not the best time to play into this segment. Okay. Sheila . If you look at the sorry, go ahead. If you look at the russell this year and just step back and look at the chart, what you see is tremendous volatility in a pull bark of about 10 in february. Those are teeth on that chart, and, you know, you just question whether you want to insert your head into the lions mouth at this point in time. I think its a safer bet to rotate to larger caps, high dividend yielding larger caps. Also, high yielding highyield dividends. Okay. Those arent getting cheap. But sheila . I think there are a lot of really interesting opportunities within the russell 2000. One of the things about high beta stocks is they move higher than the markets. A lot of good quality names in the us russell 2000 that have gotten beaten up indiscriminately. When you are look at the russell 2000 its tended to be a much more passive investing type of investing instrument these days so theres room for actist stock investment. Theres room for interesting opportunities within the russell 2000. Carol, how do you see it . I know you wanted to go down the valuation path and for somebody more focused on fundamentals than technicals i do happen to think that thats important and if you take out the negative earnings, you still have a pe pretty close to about 22 times versus a growth rate thats anywhere between 13 and 14 times depending so youre still looking at 156 to 110 of your growth rate and 200 times book value. If you put that versus the dow and s p and the dividend rates they have, i would feel more comfortable being in the dow and s p as a whole versus the russell though i do agree with sheila there are specific active opportunities that you could go for. Thats always the case though. Thats always the case, that small caps, riskier. Theres a higher growth rate and higher valuations. Thats normal, but if i could ask our guest a quick question, something you were taking into consideration with respect to your allocations, what is it about qe ending that makes you nervous about small caps but not large caps . Pete . Well, absolutely. When we rotate into small caps, again, were going to use a institutional management at both levels so were going to move to cash at the largecap value. When you look at the small caps were going to use rymkx which is a leveraged fund. I like that in the Fourth Quarter actually. What is it about qe endings specifically that make you nervous or positive one way or the other . Well, i think the fed is going to support the market and having qe end is going to be an interesting situation and also with Interest Rates to see what happens there as well. And if i could push back on dan in terms of the growth rate. Thats a whole argument in terms of pe to growth. My issue is in terms of the very slow Economic Growth that were seeing, i just dont think that the growth rates that were looking at are going to support whats going for the with the russell in their valuation so on a normalized basis, on a pe to growth basis, i dont think the growth rates are there for the small caps over the next call it couple of years. If youre right for that person watching out there who may just be questioning how much room to run. How much does this all ply . I dont have a price target on where the russell is going. Looking at a number of factors. Btig is one of the ten largest tradingbased operations in the United States and when i bring that up its you can see flows. You can see our customers are real people. Its not computers. Its not algorithmic. I get a sense of whats going on, and in conjunction with what kelly likes to boil down to, the charts argument from before, when you put this all together in a mosaic of sorts, i get the feeling that things are going to turn here. Im not saying its going to go up at a super rapid pace, but i get the feeling the worst of the decline is behind us. And the extent to which some of the hedge funds would have to chase in and follow that as well could amplify. Pete, thanks for sharing your view. Appreciate it. Have a great weekend. Everybody else is stuck with me. When we come back, russian president Vladimir Putin has a warning for the us and its allies, and it says any sanctions put on russia will have a negative economic effect on the countries initiating them. Is he using oil as a bargaining chip . And late, one of the most successful golfers and now you have a chance to win the same amount of money that Phil Michelson could win at the u. S. Open next week. It could be more than 1 million. How . Stick around and well tell you. 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. Welcome back. Russian president pout put appearing on cnbc this morning at a very special event warning the sanctions on russia would have negative consequences on the west. Translator the economic sanctions as a tool of political pressure will have a boomerang effort and eventually if they go to a negative rate business and the economists of the country, they will how concerned should we be in the u. S. And will he use oil as leverage . Lets bring a senior fellow at the russian Foreign Policy council well, if mr. Putin thinks that he can use oil and gas as an Energy Weapon against the west, then hes sadly mistaken. There will be some shortterm sacrifices and distress in certain countries depending on the extent to which they import russia, but actually that would actually benefit the United States and other Oil Exporters and gas exporters so i think its an empty threat. Moreover russia needs the revenue that it gets from selling oil and gas to the west, just as much if not more than we need the gas and oil, so i dont think that this is too serious a threat, and hes made it before and hes been unable to carry it out. And bill browner, after his remarks, look, putin is actually doing this because hes aware of the audience in the room. They have suffered a 25 loss in wealth since his invasion into ukraine and and is trying to deflect attention. Is that fair that we should read this more as just, you know, positioning, strategizing, more or less an empty threat, or could there be anything to it if he was serious about trying to inflict more economic damage . Its typical russian bravado never to show weakness and go ahead and sanction us, we dont care, the sanctions dont have an effect and so on, but as the reporting from the st. Petersburg conference shows, the sanctions do have an effect, maybe not as much as they should have, but they certainly have impacted the russian economy and created serious difficulties for a lot of players there. Yeah. Looks like that russian economy this year is going to potentially going to contract. Not potentially. It probably will, and whats more the ruble devaluation is continuing. Thats exactly my question. Is russia being too sanguine about its own economic prospects. Said the same economic forum, they have all the tools in place to fight inflation. They can bring it back down and no special measures needed to stimulate the economy. Do you think there has to be more interventions in the future in order to make sure russia doesnt collapse economically. Well, you have to understand that the russian system is based on systematic lying. They have already taken measures to deal with the problems. They have raised Interest Rates in russia tries to three times already this year and they will have to do more interception. The capital flight is predicted by the former finance minister to be almost 160 billion this year. I think half as much last year. The ruble is undergoing devaluation. There are serious constraints on banking. I mean, this is just classic bravado. You know, were going to tough it out and you cant hurt us and the fact of the matter is the economy is being hurt, and this will continue. Sheila . Even if there were no sanctions given the mismanagement and corruption and thievery that characterizes state policy, the economy would not perform well under any circumstances. Is there anything that we should be watching for or any sort of signal that may show that this isnt that empty bravado, that this is something more serious we should be concerned about. As i said, they raised Interest Rates a few times already at key banks, and you look at the value of the ruble on International Exchanges and economic behavior rather than rhetoric, and i think youll see for yourself whats going on. Thats the way to do it. In the meantime, hope you have a great weekend. My pleasure, thank you. Appreciate it. If you suffer from sticker shock at the pharmacy lately, youre not alone. Drug prices are soaring leading some to call for a limed version of price controls. Up next well get reaction and maybe solutions from one of the architects of obamacare, and the indianapolis 500 is as much of a memorial day tradition as parades and backyard barbecue. Legendary racer helio castroneves is here to tell us about his chase to join the exclusive fourtime winner club. [ male announcer ] great rates for great rides. Geico motorcycle, see how much you could save. Welcome back, these past two days our men meg it yourel has been zero in on the cost of health care, especially soaring drug prices. Whats the solution . Is one even possible . Joining us now to button it up along with two insiders who have within trying to tackle this issue, great to see all of you. Meg, please start us off. Yeah, kelly, thanks so much. Weve been looking at the cost of drugs that been rising, specifically the branded specialty treatments for cancer and hepatitis c and other drugs in europe have some price controls. They negotiate more on prices in europe than here in the u. S. And maybe we can start with you, dr. Emanuel, do you think something needs to be done on the very high prices for cancer and other specialty indications . I think whats really concerning, especially in cancer, is that we have a lot of drugs, these 100,000 treatment drugs and for many of them, they dont cure patients and they extend life weeks or a few months, and so i think whats really concerning to people is the fact that there doesnt seem to be a lot of value here and yet a very, very high price tag. I find less objection when you really have drugs that are curative or really extend life like glevac that extends life more than seven years. You dont hear a lot of pushback about that in the same way so its really a question of value and not just price. Alex, lets bring you in, and compared with europe where there are price negotiations allowed, the u. S. Doesnt do that. Do you think we should be looking at that other in the u. S. To help rein in costs a bit . I dont think its a solution that works here and not a solution that works particularly well in europe. You can impose a ceiling on drug prices, but the result of that is that you may lower the top. You may check up with it tomorrow. You may consider it from medium price drugs. Pharmaceuticals will find other negotiators with the payers to recoup the necessary funds that they need to do the r d and bring the drugs to markets that they want to bring. Zeke emanuel, im just curious because the question about solutions as opposed treatments. How often is it the case that the new drugs, which may cost upward of 100,000, are a solution as opposed to a treatment . Is that is it just a very small minority of drugs were talking about, or is this becoming more common . Well, i think in many situations in cancer its less that weve gotten the breakthrough cures and much more that were having these intermediate drugs. The new drug for melanoma, new drugs for lung cancer, they are not curing patients. They are not taking patients who have metastatic disease and making them cured. They are prolonging life, as i said, on average a small number of weeks or months, but i would also say one other thing, we dont have the kind of structure of a Health Care System where theres negotiation. At best we could have maybe medicare do it for the elderly population, but for the rest of us who dont have medicare but have commercial insurance, its not clear that that would have any big effect. Dont the commercial insurers, alex, assume that role, and i understand its a limited one, but they have some say certainly in what is paid for and not paid for . Thats absolutely right and zeke is correct. The government could try to impose other policies to control prices for the drugs that they are paying for, but thats actually likely to have a perverse effect in the rest of the market. Drug companies, theres evidence that Drug Companies will shift that burden on to the private payers and their efforts to recoup. We dont know if they can do it fully, but its difficult to contain those prices all together. I think zeke is also right when he talks about the value proposition. Some of the drugs are providing great value and some of them i think the value is hard to determine, but at the same time i think we should remember that there are an incredible number of lowcost drugs and the 100,000 drugs are really the outliers in a system thats delivering overall great value to the Health Care System. Alex, lets be honest. It is true that they are outliers, but if you look over the next five or ten years thats where all the drug industry is putting its resources. That part of the market is expected to grow 64 in just a couple of years, henceforth, and a lot of those companies are very highly valued precisely because people are expecting big, big returns, and frankly there are some drugs that are 400,000 a year, again, that dont cure a patient of an illness that reduce things like transfusion number. That just doesnt seem like the kind of thing that is justifiable. Are there things in the United States that could be done maybe not by the government but more compared to effectiveness, research, looking at the cost and benefit that these drugs look. Azco is looking at doing this, the cancer group, is there something out there that doesnt come from the government . I do i think this comparative Effectiveness Research is very important so if you take two drugs like avastin and lucentis for Macular Degeneration, lucentis was designed express it for Macular Degeneration and avastin is originally a cancer drug and works just as well in the eye and is considerably cheaper, 1 20th or something of the cost per dose and on those things its hard to see why why you would use the more expensive drug, and here the problem is that the drug company wont try to get an indication for Macular Degeneration for avastin because its the same company that produced lucentis so it has no financial intentive to try to get a market, fda approval and these are the kinds of perverse tis in the system we need to get rid of. Meg, thanks for casting a light on this. Using so many illustive cases to help get at this important issues. Thanks for joining us on this friday afternoon. My pleasure. Enjoy the weekend. Have a good holiday all around. If you have a spare three quarters of a million bucks this weekend, you can enter the indy 500. Thats pretty much the base price with a couple of esections to get a car into the race. Ahead well talk to a threetime winner of the indy 500 and the head of the world famous auto race. If you wear a denture, take this simple test. Press your tongue against it, like this. It moves do you feel it . It can happen with every denture. These movements may irritate your gums. But you dont have to bear with it. You can try fixodent plus gum care. Thanks to its formula, your gums become one with your denture. This helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. And forget it. You are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. Search, compare, and apply at creditcards. Com. Predibut, manufacturings a prettin the United States do. Means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. Welcome back. Some disturbing news about americas retirement savings, making some waves on cnbc. Com. Allen wastler joins us with the hot list. Number one story and scary story. 25 of americans are saving zero. Thats right, the goose egg, for retirement. This is based on a survey from country financial. They list the main reasons as people dont think about it. People dont know how to do it or this is really disturbing people feel they cant afford to. That was 46 of the respondents felt that way about if so very scary and very concerning. Our number two, another concern. Earlier this week there was news that the monterey shale deposit which everybody thought were going to get 15 billion barrels of oil from that bad boy turned out only 4 . Our Energy Writer javier david phoned around to all the experts and asked, what does this mean for the whole shale boom. Not in trouble but it is concerning. We need new deposits and Better Technology for exploiting those deposits. People are always interested in energy, they are in that one and finally, love this. Expedia came out in time for memorial day weekend. Its road rage survey. What sets people off the most. Number one. People texting on the road, as it should. Others are tailgaters and the one i hate, the person who goes into the fast charlayne huntergault just to slow down. There you go, kelly. No man, youre running short of gas and youre upset driving. Have a nice memorial day weekend. Okay. When you come back on tuesday, were going to look for some positive news on the hot list, all right in. Well try. Have a great weekend. You, too. When he said road rage, i thought about rate rage. What makes people more happy, road rage or rate rage . Is the expression clear to you yet . Its a fancy way of saying nothing. Do you think were suffering from could the markets here be suffering from a case of rate rage or why arent we . Why arent rates moving . Maybe thats the question . I dont know. I think people are more concerned about road rage than rate rage but i do think theres a bifurcation with road rage i start with a little flicking of the lights to start to be nice and then the full horn if they dont get out of my way. I feel like youve got to start with flicking the lights but you still feel bad and, i dont know. Its a kinder, gentler way to say get out of my way until you go full horn. And if they are texting while driving it doesnt help the situation. Does anybody else drive. I drive every single did i and my strategisy curse loudly inside my car with my windows rolled up. Im so glad im not on the road with any of you guys because ive probably driven five times in the last couple of years and im a terrible driver so im probably the person who causes all of the road rage issues. Just dont go in the left lane. Thats all we ask. Stay out of the left lane and youll be fine. Exactly. Dan, are you barbecuing this weekend . I dont know. It depends on the weather and i dont eat meat. Then would you have loved jane wells, had a whole thing about grilling soy products is the new im not quite at soy. Okay. Dan is going to tell us. Thank you, everybody. Winning anything four times isnt easy but helio castroneves will attempt to tie the record of four victories at the indy 500. Hell reveal his Winning Strategies next, and when closing bell returns on tuesday after the holiday well talk to tom rogers, the ceo of tivo. We want to know what his companys plans are. Well be right back with the trends. After your companys gone public . And the capitals been invested . Or when your companys bought another . Is it over after youve given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. Welcome back. Spent this week hurtling around at 230 miles an hour and the other manages that track as well as all of the other business elements at hope of the indy 500 which is a 500 million business, by the way. Helio castroneves is a threetime indy 500 winner going for his fourth win on sunday. Welcome. Doug bowles is president of the indianapolis motor speedway. Great to have you both here this afternoon. What a weekend its going to be, and helio, first question to you, how much does it cost to participate in this thing . It costs a lot of money, but i just found out that the purse is 2. 5 million. Dont you think im really going for it . Absolutely. Something im actually looking for. Normally they dont tell us what is the purse, and i guess i guess you gave me a little hint. Thank you very much. Doug, why not is this supposed to be a prize . The purse is reason why half the people get involved. The purse is half the reason that they get involved and the winner takes 2. 5 million, ranges between 2 and 3 million. 15 million is whatter they are racing for here an this is part of one race and 18 races they do on the verizon indy car seer i. This race is also important to winning 1 million if hes the champion of the indy car series. Was the increase in the purse meant to get more people involved, excited, participating, aware . I mean, there are, of course, a lot more money theres much bigger money in a lot of other sports or are you guys trying to sort of catch up to that . Well, no, i think from an open wheel standpoint this race pays more than any other open wheel race in the world and its been that way since after world war ii, and weve stayed focused on that, and as the sport continues to grow well continue to try to put that money back in the purse and especially in this race because it is 100 years old and it is the grandfather of our races. Helio, i think were you looking into this about others who would be participating. At least 400 grand. Something like that to get a car, get involved the track. Obviously for you, this is different. Youre a threetime champ, going for your fourth. What is preparation like . What are you doing today . Tomorrow . All joke aside, its tradition for a race car driver. The only race that you have to try to win is this one. And what an Incredible Opportunity i have here to tie the record with three legends, rick, sr. And a. J. Foyt. For me, its just incredible. We have been working the setup of the car. Today was the last day before sunday that we set up the car. So now, sunday, 12 00, thats where its going to be broadcasting, and were starting on the second row, fourth place. So were really looking forward. We have a great Yellow Submarine in the shell pennzoil car. Right now im going for it. What have your sponsorships been like . How is the environment out there . Its great. We have the Yellow Submarine. This was with rick mears in 1998. I feel the yellow brings luck. I wore the dancing with the stars color with the yellow color. I feel we are in good shape here, but at this point, we are looking forward to it, and i cant wait until sunday. We have been debating whether Corporate America is spending. Whats your experience . Its getting better. Environment is much better, just like he said. And especially with the investment that folks at verizon are making in the indycar series, helping promote it. We have partners with firestone, chevrolet, honda, Great Partnership it is it is growing. And people like helio being on dancing with the stars, and the personalities and the fan and sponsors are attracted. We have an awful a lot of momentum around the indy 500. Folks are excited about the next couple of years to the 100th running in 2016. How many people do you expect and how much does it cost a family of five . Depends on what you can do. Come in with the ga ticket, everyone under 12 is free. So you can get in for less than 60 buck it is your kids are under 12. We have concessions options here. Its one of the events that you can do inexpensively. We have about 300,000 people here on race day in this 275acre facility. Wow. Its the busiest hospital, the busiest community in the state of indiana. Its fantastic to get that number of people here for race day. I imagine your daughter gets privileged seating for this one. Yes, i tell you what, its great. They do a great job. The fans are incredible. I tell you, i dont know if you have the opportunity to be here, but the invitation is open. Its a great day. Weather looking fantastic. Man, cant wait to go out there. The excitement is radiating. Not just the yellow outfit. Thats right. Good luck on sunday. Doug and helio, good to see you both. Good luck. Thank you. Thank you. Speaking of sports, heres a reason to vote for Phil Mickelson in the u. S. Open. One lucky fan will win the same amount of money he takes home. That could be more than a million dollars, and well you the details on that next. No matter what kind of business you own, at t Business Experts can help keep it running. Seamlessly. So you can get back to what you love. When everyone and everything works together, business just sings. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim from Td Ameritrade. Alltoday is friday today, we greet you. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Welcome back. Golfer Phil Mickelson is going for the career grand slam at the u. S. Open, he could be playing for you. Tom explains whats going on. Reporter its not as big as warren buffets billiondollar bracket challenge, but its a big deal. Maybe a ton of golfers rooting for Phil Mickelson in pine hurst, north carolina. This is a big one, take a listen. Im Phil Mickelson. Ill be hitting the big bertha driver a long ways at pinehurst, and i could complete the career grand slam. But this time, ill also be playing for you. Because whatever big check i win, you could win too. Reporter so, yes, some lucky winner will be getting the exact same weekend paycheck that mickelson gets for the u. S. Open. That could be around 1. 5 million if he manages to win the open. Even if he doesnt win, the payout could be big. Mickelson has made an average of more than 183,000 for each of his 23 open appearances. Of course, hes got to make the cut and play on the weekend to get the money. You can go to the local golf shop and try the big bertha golf club. Calway, wants people to check out the gear and buy something. Its a way to get people buzzing about golf. Stick around. Do you think this was going to work . I dont play golf, i dont play games i cannot win. I do not think this is going to work. You know, you think about who the core customer is, is golfer is a Lottery Ticket chance at winning 1. 5 million going to motivate them. Or take the prize money, offer a hundred or a thousand priceless experiences, a golf lesson or dinner with Phil Mickelson. Something that resonates, that would be more effect, and a lot before buzz and customer conversion. I was going to ask dan, you barbecue, do you golf . I golf. I dont use woods, i dont putt, skip holes 8 through 13. People are leaving golf. 400,000 people left the game last year. This is just a big pr thing. They want to get people involved, at least do a billion dollars. The billion dollar bracket challenge got a lot of attention. Its a million and a half, maybe, only if he wins, and you have to go to the store. Mickelsons got a good shot at winning the u. S. Open compared to what it takes to get a perfect bracket in the ncaa, guys. True. And the payout could be Something Like that. Look, tom, you have to go bigger. Go big or go home, right . Exactly. Go bigger or smaller, but be more meaningful to the target customer base. Thats the other way. Exactly. Something that would truly motivate them. Pretty much out of time, guys. Thank you for joining me. A big and long weekend. Come back on tuesday and hope everything goes okay on sunday in the meantime. Fast money is coming up. Melissa lee, whats on tap . We have good, existing and new home sales data points. Were going to ask one of the most heavily shorted names out there, trulia. Perhaps he can answer the question. Over to you guys. Fast money starts now. Live from the Nasdaq Market in times square. Traders, tim stooe mower, john, steve and john. The housing recovery, can you trust it . Housing stocks jumping today on stronger than expected new home sales data, and better than expected existing home sales yesterday. Take a look here. Can we believe this . Just yesterday we were throwing out doubts about home depot there . Brian kelly you said a little bit longer. Give it apl