Transcripts For CNBC Closing Bell 20140528

Yearly and blackberry Ceo John Chen. So much to discuss with each of these guys. Toll brothers this hour and uber and blackberry after the bell. Pulling for john chen and that blackberry. Turn that thing aron. So you ask, i know what youre wondering. Who is the most powerful woman in the world right now . A new list is out today, and heres a hint. Its not janet yellen. I mean, some on wall street might argue that point, but well have an exclusive look at the worlds most powerful women list coming up, and well see if you agree with the results. Okay. Heres where we stand in the markets. An hour to go and the dow is off seven points and the s p off a couple and nasdaq roughly unchanged. See if things turn around as we head into the close. Lets get into our closing bell exchange, amy wu from rbc capital markets, Larry Mcdonald from new edge usa. Were very pleased to welcome one Arthur Cashin from ups, here at the trading desk and Jack Bouroudjian from index Financial Partners and, of course, our own rick santelli. Arthur, im going to start with you. The feature for you, havent mentioned that the tenyear yield has collapsed again. We got down to 2. 44 at one point today. Whats going on in your view today . Well, i think the scramble for yield is getting more and more desperate. Its interesting that even with the tapering going on, actually getting to a spot where it should begin to work against yields, in essence push them up, its not. Its not a simple answer like a flight to safety. I think its a global scramble for yields. People pensions and other people undervested and desperate and paying anything they can to buy that tenyear. Yeah. How much of this would you put down to flows or demand coming out of europe, to whats happening with german rates . In other words, is the tenyear, which is important here, of course, to the future of where the Mortgage Market heads and everything, is that reflecting as art is suggesting something thats emanating out of europe as opposed to fundamentals here in the u. S. . Well, i think the catalyst for this goround is definitely the ecb meeting one week from tomorrow, and i think when you have a tenyear spanish yield at 2. 80 which is basically 40 over 10s theres your answer right there, you know. If i were an investor heres what i would do. I would look at all the yield throughout the globe that make no sense and would i sell those securities, but then i would think to myself, uhoh, what if a central bank tries to manipulate the rates even lower right in my face. I know what i can do. Buy a bund or treasury against it. And that epitomizes what goes on and if you want icing on the cake, look at job seekers in france. That reached an alltime high. Look at the unemployment numbers in germany released today. 24,000, on a month over month basis, one of the largest numbers since april of 09. I dont think you have to look far. I think there is a scramble. I agree with art, but i dont think its a scramble for yield. I think its a scramble for a relative value gps that has been robbed from the marketplace by global central bankers. Having said all that though, Larry Mcdonald, you have been pu bullish on bonds and now youre turning bearish, right . If it was a stop they would stop t. Bonds are crushing stocks in 2014. The 30year total returns, near 17 . The tlte up 15 on the year versus 4 for the s p, but i think this is a capitulation moment. I feel theres a tremendous amount of capitulation, Short Covering thats creating an opportunity to get short bonds or sell bonds here. I think you want to do the opposite of what we were recommending clients do in january. Ill take the other side of that one. Hold on just one second. Amy, i want to ask you something related thats been a topic of much interest and its about where the volatility is or isnt in these market. Im wondering, because we talked to bob pisani yesterday and it generated a lot of discussion after hours, overnight and continues now. What role are structured notes, which are owned by pension funds, which are owned by High Net Worth individuals, what parole is the proliferation of these products playing and people basically betting on stocks staying in a range and having to be short increasingly short volatility . Kelly, thats a very, very interesting question, and one thing i would tell you, especially for structured notes issuance, a lot of what happens, especially in the european market, as well as in the u. S. Market, is a lot of the people who are owning these notes are trying to be short volatility because they are collecting yields. Exactly. And that has very interesting parameters to the dealer community, and one of the reasons where people are trying to explain why we see that suppression. The other thing i would just say is were talking about the tenyear and the level. What is more interesting is how low the volatility has been in rates. Right. And in fx and commodities and equity options. People say to me, look, the most interesting thing is that volatility is the lowest, cheapest asset class right now and none of us have a timing or trigger of when this will change. Is this a coiled spring, amy, that were building here with everybody winding up on the short vol trade like they are . You know, to me its sort of we have to get to a point, and the point is we have the fed tapering, but we still have ecb out there. Yeah. The problem is people have a very difficult time caring this timing, right. They have been holding long ball positions and know the regime is low. Just dont know when and if it will spring any time soon and a lot of people get burned holding it for a long time so you still continue to see people selling puts or using notes to be short vol because thats how they get yield right now, and its not that they dont know that it can end. Its just that they dont know when the party will end. Lets add Keith Fitzgerald to the fun. Keith, i know youve been bullish on stocks. Weve been sitting at these highs. Weve got this lack of volatility here. Do you still think that the next best move is to the upside . Well, i tell you, im becoming very, very concerned now for the first time in several weeks. I think were buckling up like a pilot says weve got turbulence ahead. I think a summer swoon is coming, a leaderboard changed dramatically up on the dow it investment only 1 in 19 stocks having 52week highs on average. A year ago that was 101. We got overbought readings consistent with what we saw in 2007 and a percentage of gdp in terms of market capitalization which is what we saw right before the dotcom crisis. Im careful and im cautious right now. Hang on, jack, there in a second. What do you think, art . I think thats dead right. Saying for some time youre seeing the indices go up with fewer and fewer players supporting it. A smaller percentage of the s p and when the dow is kind of a distorted index, but the s p and a variety of the other indices, they dont see the same number of 52week highs that youve had and an old fogey like me doing this for 50 years you tend to look towards tops or bott tomorrows or turnaround points when you get that nonparticipation. Fewer stocks are hitting those highs. Low volatility that many natives say when the birds stop singing thats the time to be cautious. I learned from you, art, by the way, so thanks very much for teaching me. Jack, are we still going higher here . A lot of people getting sweaty palms . How about if i told you not only am i on the side of that trade but i have a feeling well see a bit of a meltup over the course of the next few months and let me explain that. If you listen real carefully, and ricky, i hope youre listening, wish i had one of your props right now, you can hear that sucking noise coming out of the bond market which is just sucking in longs and it is a trap. You can see it. It feels it, and it is eerily like a blowoff top today. Having said that, what is the real story for me is the fact that were looking at a stock market that went sideways. It corrected in a sideways fashion, and right now, lets go through some numbers. Im looking at a market that has 115 of forward earnings for the s p which has given it roughly a 17 multiple. One if it spanned one single multiple, all right . From 17 to 18, thats 200 s p points and it will happen in a flash. Youll have a lot of people reluctantly that will be wondering why they are losing equity purchasing power parity. Just a quick question, art f. Rates, if its europe to some extent, are lower than they perhaps ought to be based on how the u. S. Is doing, what does that ultimately mean . To go back to jacks point of a market meltup. Could that put us in a situation where it does stimulate asset prices, overshoots it to some extent because theres other forces holding down here . A great many things going on. Im not a technician or chartist. I work with cocktail napkins. If you look at the movement in the tenyear, down below 1. 47 which was kind of an important point, that could go down to 1. 35, maybe even 2. 25. That could begin to influence as you said at the opening Mortgage Rates, and you could get refinancing. You could begin to see a lot more activity and that might give jacks premise a little bit of a boost here. Theres a lot at stake, and i want to see where they go first. The last couple of times that rates were sinking, you saw financial conditions generally tighten and thats not happening this time around. The credit markets are still strong. Just had a billion dollar issue. Youre not getting the warning signs that were losing momentum here, are we . Not yet. I think things continue to move in the right direction but the old phrase may you live in interesting times, i think the next three weeks will be very interesting and what mr. Draghi does may set all these markets a kilter because you cant do the kind of qe that we do. Everybody is nodding. Well leave it there. Hey, art go ahead, rick. Rick santelli here, do you really think the difference on a 30year mortgage between 4. 50, 4. 25 and 3. 50 is why the Housing Market isnt delivering the goods in. No, i dont think thats the entire reason, but i do think theres still a line of people trying to turn that house back into an atm machine. Ah, yes, yes. And if you can get rates down to, you know, 3. 25 2. 25, 2 , they will be in there for that extra quarter of a percent. All right, folks. Always enjoy the conversation. Thank you all for your contributions today. Appreciate it. Thank you. My pleasure. Lets get back to watching the ebb and flow as we get set for the close of trade. Dow slightly negative and the s p adding a point, significant because we could be closing for a third day of record highs. And the Toll Brothers talks about the luxury Home Builders profit doubling in the next quarter. How long he sees hitting toll earnings out of the park, especially if rates continue to move lower here. Yes. Plus the ceo of uber and blackberry will take some time out of the code conference and we eel get into soaring valuation estimation and blackberrys ceo giving us the scoop on winning back customers who have defected to iphones and android. Keep it right here. Youre watching cnbc, first in business worldwide. We were just discussing gold during the commercial break. Some interesting moves lower for that metal today. Jackie deangelis keeping an eye on things over at the nymex. Not another great day for gold prices, breaking through another key Technical Support level of 1262, closing down around 6 today at that 1259 mark. Of course, this is after the slide yesterday of 25. So the key issue to watch here, traders are saying, its the equity market. If equities continue to climb and make new alltime highs, gold will continue to slide if theres any hedging or any safety protection out there. Investors are running to the bond market. They are not looking at the gold market. Meantime the miners saw a little bit more of the losses steepening and intensifying today as well. It wasnt just the precious metal itself and when traders are asked about the next stop they say technically were looking at 1247 but could go as low at 1210 or 1200 if the dow continues to climb, if it hits about 17,000, and were not that far off from those levels at this point. Back to you. An important signal to watch is we try to figure out whats happening. Tenyear treasury yield falling to a new 2014 low coming with the Interest Rates just as investors were creating an uptick. Leaving people confused where rates are headed next. Whats going o. Cnbc senior contributor larry kudlow and deutsche banks chief international economist. It is the question of the hour, guys. Why are yields going down when the fed is tapering and the yields we were all expecting to go up . Whats your version, larry . Basically i think the Treasury Bonds are telling you, a, moderate growth in the economy. Most of the drop, as weve discussed is real Interest Rates. Can you see it in the t. I. P. S market. B, 2 inflation, maybe slightly higher, nothing to get excited b. Bonds are probably overshooting on the downside. Would i rather buy stocks. This is the stock market that everyone loves to hate, and i just would rather buy stocks period. Thats where id be right now. Youre alone on that one. Next five years, just stay with it. Isnt it the case that weve worried about the yield on the tenyear following and on the tenyear rising and the equity markets and credit markets churn ahead. Is that an important signal in the Global Financial significant until, is it not a signal anymore . The Economic Data is Getting Better and better and numbers on the inflation front, bpi and cpi and even the cleveland fed is predicting will go up and rates continue to go down. Right. Whats most peculiar about this is no one has a real expectation of whats going on and thats when markets step back and say, wow, we dont really know whats going on and you get all the explanations thrown at you and you say i think its this and someone else says i think its this. The move itself is the information. That makes you somewhat worried because its so disconnected from the economic recovery. Bonds overshoot, stocks overshoot, no big deal, gold is crashing, how big is that . Yields are dropping, not because of whats happening here but overseas, and youve got a number of investors over there who are coming to the safety of the u. S. Treasury market. Who knows. As their economies slow down. Id want to be long european stocks. The central bank is going to ease the treasury over there. Just get into the stock market. Profits are going to improve. Might see some buying from the emerging markets. If the u. S. Was more of a closed system and rates were starting to rise and that would act as a governor on activity and instead for whatever reason yields are too low relative to where they quote, unquote, should be. Kelly, kelly. This ends badly again. This is a this is a downsized goldilocks. Not real goldilocks which is 3 to 4 . This is a miniature goldilocks of 2. 5 growth and low inflation, and and whether they are right or wrong, we wont know for years, the fed is not going to tighten, as ive said, in my lifetime. They may normalize you. Ive been kwoegt you and a lot of flinches when i say that to people. Doesnt mean they wont raise rates, but thats just modern normalization. Im talking tight money. You are years away from tight money, and, meanwhile, profits continue to slog their way higher. I dont care about bonds. Davis i think theres certainly been slowing in growth and the rewound wasnt as strong as we thought after the crisis but banking is better and housing is better and that process will create tighter markets which will create inflation eventually. Mario draghi no, no, no. Growth doesnt cause inflation. Growth does not cause inflation. Thats why i said tighter markets. Draghi is widely expected to cut rates next week in the European Central bank. Do you think he will . Hes been threatening it a long time and hasnt done a thing. Certainly playing a very Important Role in psychology, if you look at the values as talked about earlier, certainly the u. S. Rates look relatively attractive compared to what youre seeing in europe. The outlook is the any stinks in europe, lets just call a spade a spade. So buy stocks. Even germany. But the central bank is going to backstop the economy. Thats what they are going to do. The same thing will goin a here. Ive got one for you. Why dont you buy india. Buy the indian stock market. Theres a lot priced into that market right now. Had an incredible rally. Gone from some free market capitalism in india, get out of china which is probably not going anywheres, and i want to say, dont underestimate this fed policy thing, okay . Look, right now the tailor rule says the fed should be at 1 and the old fed funds rate and they are not, and they are going to take their time. Look at the futures market. Doesnt even happen next year. That experts an northern effect all the way up the curve. I think we all agree on the u. S. Economy but the question is should we or shouldnt we be paying whats happening in the bond market, not just as a signal i hate bonds right now. Bonds are so boring to me i cant stopped it. We need to abolish the Corporate Tax. I thought were you going to say abolish the bond market. Get rid of the Corporate Tax and bring the 2 trillion here thats overseas, back here, and put some torque into capital goods and jobs and then well have ourselves a good economy. Right now thats not happening so bond rates are dont worry about it. Go into the stock market because the economy will surprise everybody. Its a mini goldilocks. This from the man who when he got up on the set said im low energy today, i dont know whats wrong. I knew you would take off. Everything is fine. This is people are looking for reasons to be pessimistic. Stop it. Stop it. Its going to be okay. The political situation is going to improve. Jobs are going to improve. Larry, always good to see you. Thorsten, thanks for joining us. My pleasure. Well, larrys favorite market is starting to come back here a little bit. The bond market. Yeah. The dow is very close to turning positive here. Down four points with about 40 minutes left in the trading session. Were still though about 35 points away from an alltime high on that. The s p, if we get a positive close there, it would be our fourth consecutive record close. Is it four now. It would be. And in fact were positive right now. Merger and acquisitis and ac be heading for a banner year, according to our next guest maybe the best year ever. Find out whats driving all the consolidation and which sectors are poised for more deals . Thats next. Also, a new survey shows Many Americans are afraid of going broke during retirement, but heres the kicker. They are still unwilling to cut back on current spending to save for that retirement, so were going to talk to a man behind that survey and figure out why we have the disconnect in the feelings of so Many Americans. Dont touch that remote. Were back after this. Pags 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. 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Joining us now is partner and m a attorney at silver and cronwell. Certainly off to a great start. To a certain extent weve had as much activity this year as weve had through, you know, october to december of most of the last five years so it really is a good start. Thats coming off a super low base and were talking about a number of deals, dollar size. Were talking about certainly dollars. Certainly number of deals and i think more importantly were talking about cross sectors and crossborder deals and activity out of the United States as well as inside the United States, and were talking about hostile bids. Were talking about second bidders coming in for deals like we saw with Pilgrim Pride and hillshire so youre seeing a lot of things that you see in m a booms. Why now . Money has been cheap for a long time. Money being cheap is only one part of the equation. A big part of the equation is really business confidence, and i spent a lot of time in board rooms and a big question last year and the year before is the economy going to soften . Whats going to happen in the rest the world and towards the end of last year i saw that going away. I saw less and less questions by mappingment it search and certainly by the directors, and so there was a feeling that they needed to start to act. This is a great point. Important one, too, for people trying to get signals right about what this means. Is that all coming from a position of weakness or strength . Are companies doing this because they are desperate for Revenue Growth or as you kind of suggest because you see better prospects regardless . It really depends on the company and the sector. I think, you know, in the Health Care Sector to a certain extent they are doing it ball game a lot of companies have drugs coming off a patent. They dont have particularly good pipe lines. They see competitors making acquisitions so they are doing it because of that. Not because of taxes . Well, a lot of deals a lot of deals are straight domestic deals. True. And a lot of other sectors, its really a position of strength that they are moving from. I was always taught when you get a fleury of activity like this this could signal a market top. This doesnt feel like it. The economy is still in a slow recovery phase right now. Any activity tends to come towards the end of a bull market. However, if you look at the last few, you know, m a runs, they tended to be between two and four years so if this is just the beginning, you know, we have a ways to go here. Certainly lawyers, bankers, hope that thats the case. Been waiting a long time for this. Give us a little bit of time. Release of held breath. In terms of places to watch. I hear anecdotally consumer space. Consume, consumer, consumer. Why is that and would you agree . To a certain extent thats an area that we expected consolidation for a long time and for the last five or six years its been very, very little consolidation, so thats when were going to see a lot more of. I think were also going to see continued health care with consolidation for the reasons i just mentioned. Retail, thats a very tough space to be in. To a certain extent people really since the dotcom boom have been predicting that consolidation. A last quick question for people in washington who are watching and who weve been throwing questions out to do something with Corporate Tax reform. How big a role is that playing in the activity today . I dont think its playing a huge role t. Tends to be part of the financing equation. How much is this deal going to cost me and save me . How much can i spent, but, you know, we need tax reform. Thats clear. Pfizers deal aside. Right. Thats been the exception to the rule to this point. Well see how much longer this continues. Im sure youre very busy. Good to see you, frank. Heading towards the close, about 30 minutes left in the trading session, the dow hovering just below the unchanged level here. Still about 35 points away frommin a alltime closing high for that average, but the last i saw of the s p was positive, and any positive close there would be another new alltime closing high. Up about two points. Nasdaq slightly weaker. Much more ahead on these markets and well hear from the heads of two closely watched companies, uber and blackberry. They are battling detractors and working to build market share. Cant wait to hear from these guys. When we come back, socalled Old Technology stocks, like krifngo, hewlettpackard and intel have been outperforming this year. Will that last . We have a special report coming from the nasdaq right after this. In todays market, a lot can happen in a second. 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Weve been talking about the fact that, by the way, where are the had lines . Dont know it if youre not following quite closely. The stock market rally that everybody loss of to hate. At this point getting very little attention outside the world of wall street. Established names like cisco and hewlettpackard and oracle have been outperforming the socalled new technology but are those winds about to shift . Soma mody has the details for us. Thats right. No question that so far this year the older valueoriented dividend paying names are winning the race, but s p capital iq is calling this a crowded trade. Scott kesler, the analyst there, says move of the growth for these oldschool names is coming from acquisitions. That might not be seen as risky, but this increases the likelihood of earnings variability and inconsistency, but, you know, Pacific Crest disagrees citing the cyclical rebound in the market being a catalyst for electricity names going forward. On to new techniques, these stocks have been under pressure and some analysts say given the big drop in stock prices valuations, forward pricetoearnings ratios, are more attractive than they were earlier this year. In fact just today twitter was upgraded to buy saying this years drop in the stock price have resulted in a much more favorable risk reward ratio. If youre trying to get back into the new tech trade, be cautious. Many of the names are still trading at a premium to the market and may have further room to fall before they are seen as a god buying opportunity. On that note, bill and kelly, out of all the companies in the s p tech sector do you know which one has the highest percentage of buy ratings . This one took me by surprise. Which company has the highest percentage of the buy ratings . In the s p sector. I was going to say hewlettpackard. Thats what i thought, one of the older legacy names. I was going to say twitter. Its actually facebook. Facebook, 80 . Yeah, yeah. Out of all the analysts that cover, 80 have a buy rating. 99 of tweets are basically why are you spending more time talking about facebook so its both the street and the retail investors. Yeah. Its always one of the toptickers on the website, too. Right. People are obsessed with this name. You saw twitter there. Up 10 on an upgrade as somebody else stepped in from wall street to issue a buy recommendation and it has come down so far so well see. Thanks, seema. Thank you. 23 minutes to go. Even the people that dont use facebook that much like investing in it. The dow losing a little bit of ground, off 13 points. S p still clinging into positive territory. Toll brothers seeing green on the heels of its strong earnings report. Tolls ceo coming up to talk about his plans to keep growing the luxury Home Builders profits, plus well get his read on the lately hardtoread Housing Market these days. The heads of uber and blackberry. 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As you can see, the s p is positive fractionally at this point, but, again, any positive close for the s p will be a new alltime high. Really the feature has been the tenyear yield again today. Davis absolutely. Fell sharply and got down to 2. 44 and Still Holding at that level right now on the tenyear treasury which, of course, has a big impact on Mortgage Rates. And then amid all of this, individual names are big movers, 3d systems and the twitter name we just talked about. Dominic chu is following some of the big movers today. Kelly, bill, well start with some of these big movers. Smith and nephew is one of them. Soaring on speculation that it could be bought by rival medical device maker striker who has denied they are interested in the company and the stock came off of its highs. Smith up about 3 . Later, wells fargo said striker might mick a bid and trading up again. Up 3 on that particular trade. Two Shoe Companies also walking, if you will, in opposite directions, dsw is plummeting on weaker than expected firstquarter earnings, blaming, yes, the bad weather and Brown Shoe Company is rising on better than expected profits after boosting its full 2014 outlook. Gaining ground, more upgrades to a buy rating, twitter up about 10 and well end on the Home Building side of things. Toll brothers advancing on better than expected secondquarter result as the luxury home builder was able to sell more homes at higher prices than the same time a year ago. Toll brothers, of course, up about 2 , kelly, bill, on that news. Back over to you guys. Yes. Toll brothers stock moving higher and the company reporting more earnings and quarterly profits doubling and sold at much higher prices. Over 700,000 in that period. The average price delivered, 706,000 to be exact, up from the 577,000 just one year. Thats a big increase, wow. Were joined first on cnbc by Toll Brothers ceo. Thanks for joining us again, doug. Thanks for being with us. Thanks for having me. How would you describe. Still trying to get our arms around this Housing Market. Yes, we had a lousy winter, but, you know, Mortgage Rates are coming down. Home prices are going up. How would you describe the state of the Housing Market in this country right now . Well, id call it very good. You know, which came off the bottom. We started the recovery back in 2011 with great acceleration into 13 and for the last year business has been good. Its been relatively flat. Now, thats fairly consistent with prior recoveries. If you go back to the early 1990s the market roared back and then it slowed down a little bit, stayed flat and then accelerated again so i think youre in the early stages of a recovery but for the past year or so, business has been pretty flat for not only Toll Brothers but for the industry, but were very comfortable where we are. We love our Land Holdings and love our luxury position and were very confident that pentup demand is coming back and were in good shape. Is the reason for that slowdown, doug, because prices have jumped so much or because rates have moved higher, and i understand the answer can be both, but i wonder here as rates go back down how much that how much they matter period for your Business Today relative to the past . I think what happened last summer is there was a lot of price increases through last spring with all the builders and then last june Interest Rates went up by about one point in a threeweek period of time which had a bit of a shock to the market, and for the last year or so, as i said, business has been flat. For us Interest Rates really arent an issue. Youre right. They have come back down. A 30year mortgage with no points is now 4 , 4. 1 and whats going on is theres still confidence issues out there. Need a little more job growth. People have to get a little more value out of their existing home. You know, there are some people that are still underwater, though thats changing rapidly. People that are that bought home in the early 2000s are now gunning to see equity back in their home. Right. But we havent sold nearly as many homes in the last five years as were sold historically in a very normal year, and so this pentup demand is growing, and we feel pretty good that its beginning to come back out again. Our Business Model is strong, but were going through a period where, you know, things are a little bit flat but its not unusual for a recovery. Quickly here, we keep hearing about tight inventories, that there just arent the homes out there if the demand is going to be there. All real estate is local, and it depends on the price point and all that, but can you give us a sense of why were not seeing more building with these tight inventories . Is there a lack of confidence among the Home Building industry overall still . Well, were not a spec builder so we never really built a lot of homes that were not yet sold. As an industry i think the other builders that tend to build more specs, which tends to be at the lower price point, i think they are being a little more careful, a little more conservative. Theres only five months, 5. 3month supply of new homes on the market. Thats low. If demand picks up, that number will go down dramatically which is when we have Pricing Power. As you said, its a very local business. Whats going on for us in new york city and going on for us in texas and coastal california, where were now very large through a big acquisition we just concluded, those markets are very hot. We have significant Pricing Power today. Inventories are low so we really study it market by market, and most markets are in very good shape right now and those tend to be markets that were in. A final question before we let you go. Isnt that because youre effectively the builder for the 1 . It should be no surprise you guys are doing better than everybody else. Well, thank you. Its a little more than 1 . Our average house is 700,000, but we love our niche. We love the luxury end. Our pies dont have mortgage problems. 20 are all cash. Those that get a mortgage put 30 down. Their decision to buy is more of a discretionary decision, more emotional. Its based on confidence. They want to move the Toll Brothers home, in the Better School distribute and want to move down in the active adult world so we love our niche because were not dependant upon the kid coming out of the apartment who cant afford his first house. Right. Were in a very different busy a havent happy where we are and will stick with what we do. I bet. Thanks for joining us. Really appreciate it. Thank you very much. Heading to the close. 12 minutes left. Were down 25 on the dow. Stumbled just a bit. The s p has moved back into minus territory so maybe we wont get that alltime high today. It will be a stretch. 12 minutes to go. Forbes outwith the rankings of the worlds most powerful women. You may be surprised who is number one on the list. Its not janet evans. Is it caylee evans . Well be right back. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase like 60,000 bonus points when i spent 5,000 in the rst 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. Sfx sounds of marching band and crowd cheering sfx sounds of marching band and crowd cheering so, im walking down the street, sfx sounds of marching band and crowd cheering just you know walking, sfx sounds of marching band and crowd cheering and i found myself in the middle of this parade honoring americas troops. Which is actually quite fitting because geico has been serving the military for over 75 years. Aawh no, look, i know this is about the troops and not about me. Right, but i dont look like that. Who can i write a letter to about this . Geico. Fifteen minutes could save you fifteen percent or more on car insurance. Jlt. Just about eight minutes left here. Its going to be a squeaker for the s p. I know were splitting hairs here which i cannot afford to do but the s p is literally unchanged at the molt. Any positive close will be a new alltime high for that index, the fourth day in a row weve seen that. Dow and nasdaq trading a little bit lower. Joining me now is Michael Underhill from capital innovations. Almost an hour ago we had some of our favorite analysts on like you who have been bullish on this market and they are starting to get a little nervous thinking maybe we extended things too much. What do you think . I see some Technical Support. When you look at treasuries, you have to look at fixed income and equities. Technical support of treasuries, a lot activity in the treasury market. See some profittaking but its profittaking of stocks that got ahead of themselves. Biotech and technology and look at industrials and materials. Actually those arent ahead of themselves. I think you see some value in those types of stocks. Seeing activity in those sectors today. Cant look at overall market. What about those treasuries. There are those who feel were starting to see a short squeeze that this is the end of the full phase weve been in for treasuries. I would look at this. Again, i continue to see high volatility and low gdp growth, but when you look at whats going on. Seems like every analyst and Portfolio Manager you talk to nowadays, they are a meteorologist and talk about the weather and how its impacted gdp and the slowdown and when i see housing recovery, i look at industrials and transports. When you see the treasury market and see transports. Right. Very, very good indicators of positive Economic Growth and momentum. So it is that rotation that were going through right now. Absolutely. Michael, good to see you. Thank you. Were going to come back with the closing countdown for this wednesday, and after the bell a ceo doubleheader from two of technologys most talked about companies these days. Coming up transport app uber and onetime mobile kingpin blackberry. They will be joining kelly live from the code conference out in Southern California. Both companies at a critical juncture in their historys. 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This is interesting. Lock at this. Starting to house some altitude on thedown. Looked like we might turn positive as we were heading into the final half hour of trading, but now were starting to lose some ground here in the last few minutes of trade. S p, any positive close was going to be an alltime high, but were losing ground there as well. Now down more than one point. The feature of the day really had to be the tenyear where the yield continued to have lowered. Were down to 2. 44 , a level weve not seen since last july, and we wonder if that can continue, whether were going to see even lower yields, especially as we consider that the European Central Bank Next Week is expected to lower rates so that could push it even lower. One more thing. Weve talked a lot about the lack of volatility. This is the volatility index, the vix. This is this year, and we are i think we are below this is the lowest level for the year right now. Were down 14. 5 on the year at 11. 73, bob pisani. Weve talked about that quite a bit, but here again stocks watching the bond market very carefully. Tenyear yields at 11month lows. And gold at 3. 5 . Transports at historic highs. Got a lot of strange things going and all of it has got one theme and thats volatility is low. The trading desks are complaining, not making a lot of money and stocks are at new highs. Long time investors should be happy with the market, at least for the moment. Were seeing no action and thats what the trading system wants. Action to generate trading. Were not seeing it in Foreign Exchange or bonds, not seeing heavy volume or in the stock market as well. Dont tell us its the summer and, therefore, we can all walk away. Thats not the case at all. This has been going on, and the question is why is it flattening out . Hardly a collapse and i wonder why were moving lower here in the last few minutes of trade except for the transports which are still up 58 points. Seen a little bit of decline. Some of the drug stocks are down. Ill tell you where the big trade s. In the last five days cyclical groups like financials and industrials and consumer discretionaries have made a comeback. Thats the one trend that weve seen recently and the more defensive name, telecom and consumer staple stocks, they have been the lagyards overall. Standing next to the booth where they make a market in twitter, up 10 . Thats been a feature with one analyst coming out with a buy recommendation. I wanted to mention alibaba. Wall street journal reporting that well get more details on the 28 people who control the partnership. Theres a partnership of alibaba that essentially controls the board. Of course, they are in registration with the s. E. C. For the ipo and im sure the s. E. C. Has questions about who these 28 people are. Were still looking for them who announced terms midjuly to midaugust. At least thats the timetable for the s. E. C. To hold that up. Thank you, robert. See you later. So were going out with minus signs. No new alltime high for the s p. Four in a row and well stop this week with three in a row. Stay tuned now. Youve got the ceos of uber and blackberry from the code conference in california. Thats coming up now on the second hour of closing bell with kelly evans. See you tomorrow, kell. And welcome to closing bell, everybody. Im kelly evans on this wednesday looking to see if we can finish here for the fourth day in a row with new highs for the s p 500 but it looks like at the bell were falling just short that. Broad market index giving up two points on the close. The dow off 40 and the nasdaq off about 12. Lets bring in todays panel and talk about what that means along with whats happening in the rate space, of course, our very even eamon javers, stefling link and Nathan Bachrach and Mary Thompson and trader steve grasso joining us from the floor. Nathan, let me ask you a simple question. Where do you see opportunity right now . What are you buying . I like largecap value. I think any company thats making a profit now, guess what . The economy is going to get better in the Third Quarter. Well eventually have one of those quarters where everybody says its going to go up 3 the next quarter and that was like last july and august you waited and then the fall came and went and winter has come and gone. Yes, there is a santa claus, and i think well see some growth and i think companies are making money now and paying a dividend are only going to get better. Thats the opportunity. All right. Youve got to watch your bonds right now. Dont know what your duration is on the bonds. Call up somebody real quick. If anybody doesnt know that at this point. Three years ago they were all starting to worry about that. I know, i know. Very simple. Interest rates, could they get any lower . I know. Hold off on that thought now. Thats a whole other conversation. Mary, you were furrowing your brow. Whats the growth driver in the Third Quarter if youre saying were going to see that . Whats going to change things for these companies in the Third Quarter . I think well see a lot of pentup demand meaning i couldnt buy during the winter. Unless your favorite color was white, sure not buying a lot of cars and cars are still old. I think well see spending. Wont be on a snow blower anymore, on a swimsuit or maybe in the leisure industry. I think well see some of that, and that would be my take. Speaking of which walt disney just priced 0year debt, Something Like half a percentage point higher than where the u. S. Treasuries are trading right now and lock at how low that is. Stephanie, do you agree . Where do you see value . Well, i do think that the bond market is most surprising thing this whole year. I mean, i feel like deja vu. We come on every week and say the same thing. Tenyear bond yield down again and once again 2. 44 is a really low number. I dont think its going to stay here. Maybe it goes lower in the near term and i have no idea honestly why other than people are short hand that kind of thing and relative to where german bonds are, yields and japan, and i get all of that, but i do think the economy is Getting Better. Lock at yesterdays durable goods. In that report you have Better Business investment. Thats where i think the growth is going to be in the second half of the year. Weve been waiting for that, so if we do get that we will see a little bit better economy, a little bit better higher rates and i do think that earnings have been pretty good in the face of all of this uncertainty, and that to me is the most important. Eamon, i dont know if you caught it. Did you hear when doug yearly told us, ceo of Toll Brothers, turned in a better quarter, despite the average selling price is 700,000 from in the high 500s and we said to him, wait a minute, are you doing so well because youre the Housing Market of the 1 and he effectively said, yes, 20 of the buyers are all cash and Mortgage Rates dont matter and thats the main lever you would expect to benefit. Thats where you have to be at the very high end in terms of housing. Makes you wonder at what point will lending get looser in this country. Had the huge pendulum switch on lending after the financial crisis. Does that matter though . Isnt it really the fact that prices have gone up a little bit. People arent in a financial position where they really feel like, you know, how much how much looser do conditions really have to be . Well, i think, for you to see a huge boom in the wealth effect youll have to see lending standards loosen up for the rest of us. People who cant afford those jumbo jumbo loans. How much lower do we have to see . Banks seem like they are very comfortable with tight credit. Actually theres a conference this week and all the banks are speaking at it, and they are all basically saying that loan growth is inching up higher. Usb said it, sun trust said t. Several companies are saying it, so they have problem with the Net Interest Margin and spread business but thats a different story. In terms of the economy they are Getting Better in terms of loan growth and that should improve, and that should also drive better confidence, along with housing and we do need jobs. Drive economic recovery. I dont think so. Some of these people have been priced out of Housing Market. If youre looking at that for a catalyst anyways. Prices are extremely high. Thats another hurdle. Last week they said satisfaction in housing is up which is a nice way of saying, you know, i think im not going to bother buying anything else because who else wants to go through all the agony and ill stay where i am and that slows the Housing Market down. Lets bring in steve grasso here from the floor. Steve, good to see you. I wanted to ask whats going on with the price action in twitter snad. Saw the upgrade. You know, its going they put a 42 price target on it saying that they could monetize and add sales saying that international is going to be a huge growth area for them, but i always wonder when a sell sign analysis comes in. Where were they on the way down . You also know that its not you know, they were up like 3 at the open and it was attributed to the open. More than 10 on the close. Feels like theres Something Else happening. You guys on your network, had the ceo on, middle of the day. Stock rally today. You have a short interest. Obviously those shares goes unlocked so not as big as a percentage basis but theres a lot of, lets call it leveling out. I dont want to call it stability in twitter right now because it assumes a different connotation to it, but theres a lot of leveling out on the sell side where it seems to be the pressure is mostly off. Is that generally of some of the hard hit momo names the last couple of months . Had kind of a total rollover, and the ibb, iwm, the q net, internet index, so those actually started to stabilize last week and they continued to kind of stabilize and twit sker a big part of that. Look, twitter is down from 70, so its already down. Maybe it has rallied and bounced off of its low, but its still down a whole heck of a lot at a lot of these companies, and these are the times when you get opportunities. You can also throw in there amazon as well. Of course. Twitter is right back where it started. We have to congratulate the investment bankers. They got a price right, about where they are now. All the investment bankers, they got this one right. Didnt we get that, predictions of softer growth here in the United States. I mean, at some point you wonder how many more users are there. That is definitely been the lockup. Would you buy twitter . And what we were talking about with steph here. I own it. How much further do you think they go . I own it. Im not selling it yet. You know, for me, its the 29. 51 level to be exact. That was the level it bottomed out in, so just, you know, a couple weeks back. Thats where you bought in . No, no, no. I wish i bought in. Id be wearing a smile right now. So for me thats where i i make the point of saying, you know what . Ive got to cut it loose and it will have a facebook moment and it hasnt had one yet, but im still long the name and im staying in the name. Facebook moment. Should talk about this company. Its the moved loved on street, stephanie, and usually that might be a warning sign and it continues to perform well. Hang in there, whatever seems to be happening in terms of the market. And it, too, is down 15 from its high, and it has some cat lifts ahead. Near term they are doing a very good job on mobile monetization. Total mobile sales in terms of ads, its 59 , up from zero two years ago. They have instagram and they will monetize that next week and they have got whats app, a monetization process in 2016 so youve got short term, medium term and long term. Well, first of all, they are enthusiastic with the m a activity, a good sign finally, a positive, but the trading volumes, again, are very negative. We had the cfo of citibank saying they will be down 20 . One thing moving the right direction and still a drag on the other side and even though they say lending is picking up. Still restricted to a great extent and what regulators are dictating with their loans and their books so as much as they would hike to say, you know, want to jump ahead. We want to be basically an indicator of the economy, there are still some restrictions on this group. Seema, weve got to go here in a sec and when we talk about whats going to drive the day, find out the firstquarter gdp was awful for lack of a better term. Thats a technical term. Thats got to be somewhat priced in though so what are the important events to watch and what other names, by the way, are you interested in here . First of all, if you look at tomorrow, thursday, initial jobless claims so even though jobs numbers are laggings, initial jobless claims are leading, you have to look at that number and see progress in the jobs market. For me i do have some exposure to biotechs, so hopefully those names start to level out a little bit more. Im looking to get back in amazon and certainly looking to get back into bank of america. I dont think the cat lifts are there, but waiting to sell off like a lot of other bears. I believe its coming. It might be a couple weeks out. All right. Well check back. Be sure to catch steve grasso coming up with the fast money crew at 5 00 p. M. They have got Regis Philbin set up at the nasdaq. Well be giving traders his top stock picks. Dont miss that coming up at 5 00. Dont have brakes or a Steering Wheel but google think its selfdriving car is the future of transportation and could replace taxis in cities. Will google partner with car for hire service uber . Well ask the ceo next and blackberry market share could plunge by more than half this year. Ceo john chen is here to explain why hes not as worried at some believe he should be. Dont want to miss a moment of that interview. Youre watching cnbc here, first in business worldwide. Welcome back. All day cnbc has been live at the conference out in Southern California bringing you the latest and breaking news. Joined right now but julia boorstin. Hi, julia. Thanks so much for talking to us today. So everyone here is talking about the new fully selfdriving car that google revealed yesterday. Yeah. Google is a big investor. What does this mean for unier . Well, i think the first part is, you know r, were super excited about selfdriving vehicles and its not our plan to manufacture cars. Somebodys got to do that, and, you know, google is sort of leading the charge on that is a really good thing because the sooner selfdriving vehicles become a reality, the sooner transportation in cities just fundamentally changes and definitely for the better. So you just tell me before we came out of break that youve already been talking to google about how you mike Work Together with this. Does this mean that google is going to buy unier . So first i would say, you know, we have a very Good Relationship with google and we have a lot of conversations going, so i cant really get to the details, but in terms of acquisition, you know, i was asked that on stage and i said look, thats like asking a happily married man who his next wife is going to be and i dont feel like. This is a labor of love. Were not thinking about our next life. Kelly . Travis, just thinking about driverless cars, i wonder if you guys would embrace that because your drivers cost like 90 grand a pop. Oh, i no. I think the world today is that cars need to be driven by people, and, you know, making sure that those people who are providing that service have a quality income that is better than their alternatives is absolutely imperative for unier to continue to grow. I was just going to say actually a lot of people may not be aware. What i was referencing in new york city, your drivers make, is this correct, a median or average salary of 90,000 . Thats probably twice what the taxi drivers get. Well, keep in mind that the drivers we partner with are essentially, they run their own businesses. Yeah. The median net income of a driver on our system is 90,000 in new york. Its 74,000 in san francisco, and thats after all their costs, including even depreciation of the car, gas, insurance, the whole nine, and so it is twice as much as what they would expect to make in a taxi and because of that were not just able to bring riders along with a better experience. Were also able to get the best drivers in every market as we scale to provide that service to those riders. And your Business Model is taking 20 of their revenue. Thats correct. So our business mod sell 20 of every ride, and it varies, like if its an suv its 28 . In certain cases we might go down to 15. It depends on city by city and different products but thats essentially where we end up. You Just Announced a big news on stage here. Youre partnering with at t to embed your uber app on at t phones. How big a deal is this . How much do you expect to boost your Customer Base and revenue . I think theres a Bigger Picture first. Unier is wiring cities up, right . Were wiring it up in terms of transportation, and theres a supply side which is we give every driver a phone that basically allows us to see where that car is realtime. Switching a number of our line over to at t and they become the Backbone Infrastructure for this wiring up on the supply side. On the demand side, well, there are still tens of millions, hundreds of millions more people in the u. S. That want to that dont know about the uber option, and so they have weather on their phone. They have messaging. They have email, but transportation is a thing, and its something you do every day and that should be part of the core that you get when you get an at t phone, and i think that thats the sort of the breadth of the relationship that we have and were looking at 50 million phones a year going out with essentially uber as part of the core sort of app base that is on the phone. Travis, just because, you know, you mentioned it, what happens to people who are living in communities of say 0,000 . You know, the u. S. Is a huge country. Theres a lot of empty space. Can everybody expect, even if they have the uber app, that they can realistically and affordably use this service . I think thats a really good question, and were still in the process of finding out how small a Community Uber will work in, so we have gone to cities as small as 90,000 people and uber does great, and so as were moving out to smaller and smaller places, were going to find out how small we can go. As long as the price as long as we can get the price pretty low, we might be able to get to, you know, communities of 20,000, 30,000 people, and who knows, maybe even beyond that, but right now, 90,000person cities, weve kind of got that one so were testing to see how well we can go on that front. Look forward to see uber for everyone in the United States. Thanks so much for joining us. We really appreciate it. Great stuff. Travis, our thanks as well. Send it over to dominic chu who has a quick market flash. Lets keep it on this kind of techie theme. Palo Alto Networks this time around which is soaring after hours. The company reached a settlement of a Patent Litigation suit alongside juniper networks. It will make a onetime network to juniper of 75 million in cash and 100 million in shares and warrant. All litigation is going to be dismissed. Now separately palo alto also reported better than expected Third Quarter earnings and sales. Palo alto is currently up 9 after its market highs and trading in after market volume. As for juniper up 1 so, again, big news out of palo Alto Networks. Kelly, back over to you. Thank you. Blackberry shares, down 28 in the last three months. How does Ceo John Chen plan to reassure investors about his turnaround plan . Hell join us exclusively next and heres a scary stat. 55 boston of americans with significant savings fear going broke during retirement. Theres a head scratching kicker. Most say they are willing to cut back on Discretionary Spending now in order to save for the future. The panel reacting to this shocking survey later on closing bell. Today is wednesday 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. Just missed closing off another record high of the s p 500. Meanwhile blackberry seems to be at another rough patch. Its stock down 50 over the last year and the company booked major losses on its flagship blackberry 10 smartphone. Joining me now from the code conference from california, our very own jon fortt who is with blackberry Ceo John Chen. John . Thanks, job. Thanks for joining us. Stock price doesnt always tell the full story so tell me about the z3. You have the launch in indonesia about a week and a half ago. Report out of the New York Times suggested maybe the reception wasnt so strong. What is it . It was actually quite good. I think that report i dont know where the source of the report was, but i check into it, you know. All the local stores and distributors, the carriers, it seems to be pretty good. So i guess the question is around what your expectations were. Clearly youve hedged the downside of your relationship. Are you going to have to shrink the organization any more if efforts like the z3 dont pan out towards the upside scenario, or do you feel comfortable with the way things are trending right now in. First of all, the z3 is just one small part of our overall product turnaround plan, and so we shouldnt judge it by just that. Its been doing pretty well. We have a plan to take it to a lot of Different Countries in a very short time, so but, no. The answer is itself is not going to change too much of the big picture dimensions, but i think its doing well. I think it will do well. Software and services, the core of your strategy moving forward. The enterprise server product that gives a lot more compatibility between the old blackberry and the new blackberry. How are your efforts going getting Large Enterprises to adopt that . Are they understanding that they can manage ios and android as well as blackberry, your efforts to sort of lure them from other systems . Are they working . Yeah. Its working. Im going to be able to share some metrics when we do our Earnings Call later on, so by and large its working. The products coming out in november. We have a blackberry 10 server today. We promise whoever adopted blackberry 10 will have a free license to upgrade to the 12. Were building up the cell storage and pushing all over the world in the enterprise space. Im encouraged by everything. All of these in the details and the execution. Theres still a lot to do. We are doing it. Sounds like cautious optimism. Kelly at the Stock Exchange has a question. John chen, great to have you. Reminds me thats going on with hewlettpackard which caught a lot of peoples attention announcing another big round of job cuts recently. Do you expect to have more job cuts on the way as you turn around strategy, and do you think youll be a strong independent company for the foreseeable future . The answer is no, i do not have any big round of cuts coming. We are in the tail end of our restructure effort which started a couple of years ago, a year and a half ago. Im now finishing it off so thats behind us. I dont have any plans for that. Truly intended to be a strong independent company, and i i think we we made some good predictions or milestone ahead of us, talk about profitability and talk about cash flow, break even. I think people would like the effort and the process that were going two. Certainly. When do you remember expect to generate earnings, 2015, beyond. Yeah. I i expect us to go cash flow positive or break even by the end of had fiscal year that were in which is meaning by february of next year, calendar year, and then beyond that it will be sometime soon after that that it will be possible. So what are you seeing in terms of enterprise hunger for the server product that youre selling . It looks like over the past quarter weve seen quite a Healthy Enterprise Technology Market in general particularly in north america where, you know, your headquarters are. How are you feeling about the prospects to actually sell this at a decent clip once it comes out . I feel reasonably good. Theres a Strong Demand of markets. This is not about blackberry in general. Theres a Strong Demand for a very strong application. You hear a lot about Internet Things and m2m and everything connected to each other. We specialize in security and infrastructure and Application Development and deployment and provisioning so those are all very basic things that enterprise wanted to have. Yes. The market is pretty good. Okay, okay. Is the launch of a device like the anticipated iphone 6 going to be a catalyst for you, an opportunity for you to say heres a new device that enterprises are looking to adopt, look what we have to go with it, or should we expect it to be what its been for the past couple of cycles which is a hit to your hardware . This is why the strategy is so much focused agnostic operating environment that we manage securely. More operating devices, windows, iphones, ipad, things i dont understand yesterday, android, the customer will see us as a very robust platform thats reliable and secure to manage these things so and the best ownership solution so i view that as a positive, not negative. I want more device out there. Youre largely hedging your bets in the consumer market. Dont want to say backing away from it because clearly youre not. When you see things like the rumored deal between apple and beats, what do you think . Cant comment a lot about that. Dont know the details of that, but we we want to get well in the enterprise space first. Okay. And then we will go to consumer. John chen, thanks for joining us on cnbc. Guys, back to you. All right. Jon fortt and john chen, thanks very much. John chen is closely watched throughout Silicon Valley to see if he can succeed on this front. Breaking news on apple. Josh lipton in cupertino with the details. What can you tell us, josh . . Reporter here in cupertino, california, where apple is just announcing that its acquiring beats for 3 billion. I just had the opportunity to speak with apples tim cook and the beet cofounders jimmy ivy and dr. Dre. They, by the way, will be joining apple as employees. Now, this transaction, kelly, is expected to close in q4, cook telling me it will be accretive in fiscal year 2015. I asked cook why he decided to do this deal. Started talking off about the tradition of music in this company. We know steve jobs, of course, lived and breathed music, cook telling me they did 35 billion in songs that were download. Why beats in particular. Cook told me, first of all, it was the talent here and jimmy ivy and, remember, he called this a cultural affair. Ivy has known apple a long time. Talked to me about how much he had known steve jobs, the friendship he had had with him. Then went through the different divisions. Beats electronics did 1 billion in revenue last year. Remembering that head phone segment. This is a segment that beats dominates. Controls about 52 of that highend head phone market, according to npd and thats a market thats growing by leaps and bounds. It jumped 20 in the First Quarter year over year, and i asked cook if theres any way, any possibility that his Creative Genius could be put to work and tim cook did not dismiss that idea. Youre also not getting into beats music. Youre acquiring the streaming service. Remember, that seems to be where all the movement s. Last year Digital Music downloads, they actually fell for the first time, but streaming consumption, that jumped 32 , according to nielsen. Cook is very excited about beats music. I did ask him are you concerned at all about jumping into what is a very competitive space . Youve got to now compete with pandora and spotify and cook telling me, listen, hes not worried about that competition, about that rivalry. His only concern is making the best product. I asked drey finally how he feels about this, drey telling me hes excited and ready to roll up his sleeves and get to work for tim cook. Kelly, back to you. Josh, thanks very much. By the way, did day indicate that he had any regret with the way that that video was notoriously filmed, the way that may or may not have been affected. Did that have any effect on whether that deal got done in. Drey did not indicate that that was an issue at all. When i asked drey he said he was very excited and moving forward and the opportunity to do some work here in cupertino, california. Josh, thank you. Is apple overpaying at 3 billion but does it matter . They possibly are overpaying but at least they are doing something with their cash and they have to kind of overhaul their music business. I think it will take a little bit of time but youve got the right talent in place. Its positive and then you get the Developers Conference next week. Youll hear about more Product Introduction and people will get excited again about this company Getting Better growth and not just the value play that it is. Josh, this is mary. Did jimmy iconvenient or dr. Drey say what their roles would be in. Definitely employees. Not Simple Police some time of advisory role. I asked jimmy and dr. Drey there. They are employees. They say they will be reporting to apple directly and hopefully in some type of role where they are just getting more advice and guidance about where the Music Industry is headed. I think thats really what their real talents are, and obviously a long time noted, successful, music producer and executive. When you think about where music is headed with itunes, downloads, digital downloads falling for the first time, the growth seems it be in streelg and certainly part of the excitement that tim cook wanted to talk to me about. Thanks so much for bringing us that news. Apple acquiring beats for 3 billion. More reaction to this news. The shaws are ever so slightly positive after hours. Stay with us. Well be right back. The Performance Review. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Welcome back. Its done. Apple Just Announced its buying beats for 3 billion. 2. 6 billion being the purchase price. Stock higher on the news after hour. Lets bring in our panel to react to this news. Do you like it . I think we saw this coming, so a telegraph punch. Looked like they got a discount. Also looks like a manageable multiple here, and i guess andre young or dr. Drey is about to have a role in apple which is interesting itself and jimmy, hard to figure out why hes there. Obviously we need to see more streaming and this is a wearable story so it does make a lot of sense. Its eamon javers here in new york. Do you have an answer to this question of why there was this telegraphing of this deal . Saw a little bit of a stutter step. A lot of press around this and suddenly silent and now were seeing the formal amountment . Any idea what happened in the interim . Great question. I think apple built an empire of having very careful, very choreographed buildups and excitement, and i have the feeling that dr. Dreys little viral video with the friend wasnt part of the master plan, not the Standard Apple rollout, to say the least. It is kind of Steve Jobsian in a brilliant sort of way. Could look at this, a company thats lost its moggeo, tim cooks product nounsments dont have flair. That video had flair. Stephanie as a shareholder likes the flair. I like that they are doing something with hair cash and i think this is going to be synergistic. I guess my question is how do you see the whole thing big out and how many years will we have to wait to actually see real Revenue Generation . The markets are pretty good and the accretiveness is pretty quick. I think a lot of other investments in tech world have a lot of ramp. How long before facebook sees acretion . This seems pretty quick compared to recent moves. Its great, got head sets and some streaming music fine, well get the watch, fine. I mean, where is it that do you want them to buy tesla . When is this thing going to become the First National bank of apple . Okay. You want it to be a bank, thats the exciting business to get into these days. I want paypal that shreds with this thing. Payments are a little more exciting. Arent they supposed to maybe getting into payment . That would be a big deal. The phone you just held up has the fingerprint scanner. The fingerprint scanner and some of the new partnerships with Identity Verification systems are way to turn this into a point of sales device which weve already seen, if not all that successfully in some early kind of experimental renditions like square. Are they going to become a bank . I think for everyones sank we hope not, we doubt it and given the way the banks are doing right now, probably not that many people will be inspired to go in that direction. I promise you. What products are they set to announce next week . Obviously the operating system both for the pc desk top and more excitingly for the mobile. We hope its encircling a whole new geography, controlling your virtual life to your mobile phone and controlling your life at home. Thats an exciting obvious area for apple to use its brand. Do you think dr. Drey and jimmy will be there . Maybe, but not front and center on the digital home initiative. Can we talk about the home. How big of a market do you see this becoming for apple, and how long before its actually generally accepted by homeowners in the u. S. . Whats the lead time here . I think the lead time is very short. I think we saw that with googles commitment to nest. I think with the ibeacons and everyone in the high income glass who buys apple has a home flooded with the wireless significant until and the investments they have made in blue tooth. The question is how much margin and money will they make in the next 18 months. That might be harder but that stuff is definitely here and its coming to your home or a home near you very quickly. Thank you. Josh, thank you. Big news this hour. Googles new driverless car is driving plenty of conversations as well and clicks on cnbc. Com. Well find out where the autos of the future are parked on the hot list and retirement concerns have millions of americans worried, including those who are reasonably wealthy. Even people who are worried about being old and going broke will not curb their spending now to save for the few. The shocking details coming up. Little things, anyone can do. It steals your memories. Your independence. Insures support. A breakthrough. And sooner than youd like. Sooner than you think. You die from alzheimers disease. We cure alzheimers disease. Every little click, call, or donation adds up to something big. Alzheimers association. The brains behind saving yours. 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. Lets start here with dominic chu. Whats going on, dom . Were looking at tillys, a casual retail clothing for teens, young adults. They are reporting firstquarter earnings that came in line with expectations, but the secondquarter guidance was significantly below wall street forecasts, and thats what investors are honing in on. That stock is currently down about 23 in the after hours trade raud and tillies is a smaller cap Company Worth around 250 million, 300 million, an interesting commentary on at least one segment of the consumerdriven market. Need to get out to the mall. Havent even heard of them. Thank you. Driverless cars revving up users. That story among the ones burning up todays hot list. It started out this morning with our google report about details of this new driverless car that they are testing out and trying to introduce, but then its been walltowall stories from the code conference out on the west coast. Weve had the intel ceo taking off his shirt to show wearable tech and a discussion on how slow the internet is and brian roberts, head of comcast, the parent company, saying no, broadband is something to be proud of, we heard about the state of the industry and the wrapup of what microsofts plans are. We are john chen of blackberry talking about his plans for what are you doing in new jersey . Need to be out there. Im out of breath. All our readers have been in. It already gotten over 100,000 all told. Its the hot of the hot list today. Wow. Is it the google driverless car thats dominating the conversation because it feels that way . This morning it was, but that sort of faded off once the intel guy took off his clothes to show wearable tech. Ill tell you, the internet audience is fickle. Throw something shiny on them, they will follow it. Yeah. Well, i hope not too many people take a page out of that book now. Thanks, allen. Sure thing. Good to see you. Keep the shirt on. Whats more important for you, saving for retirement or spending money on things like entertainment and vacations . Right now if youre living in the here and now camp youre not alone. A shocking number of americans are prioritizing Discretionary Spending over saving even though they fear going broke in retirement. More on that story next. Also ahead, who is the most powerful womany in world . Mandy drury is standing by to tell you who took the top spot. Back in a moment. You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. Welcome back. A look into the financial minds of americans. Not willing to cut back on their current lifestyle to save more. A recent report released. Why arent people wanting to make sacrifices. Aaron, the important thing to emphasize is its not the people arent cutting back because they cant, its because they wont, is that right . Hi, kelly. I think its more important than that. Its a set of competing priorities. They have the fear but theres a whole set of priorities including living the lifestyle and paying down debt and supporting family members that is driving not putting more towards retirement. That sounds to me like they dont have the ability to save instead of the willingness . I think thats fair. They have a willingness and the question is can they save enough. If they have to make choices, can they save for retirement as well as things in the more near term basis. If an income for a family of four went from 60,000 to 52,000 and theres just not enough money to go around because you just dont have the funds. Its fair. Theres not enough money to then requiring a real prioritizatiop. And you have to prioritize how am i going to save for my retirement and my childrens education. Parents are making the choice to save for their children as opposed to themselves. The single people are saying im going to spend it myself instead of the retirement. What would you recommend for someone saying i do have two children and im trying to pay down my retirement and college. How would you tell them to prioriti prioritize . What we do is its all about creating a plan. Not saying stop this and pay for that. Its saying creating a a financial plan. Dont you think its a selfless choice people are making prioritizing their kids future of their own. Absolutely. The problem is down the road its going to be payback time. Your kids are now going to be paying for you. Our boomers are supporting their elderly participaents kind of cg this problem. To fund our own retirement is something we havent seen until recent history. So are we unreal listic to believe we can pay for our childrens education and our own well willing and our retirement as well or should you just give up . I think if you start early enough, the 18 to 24s are saving now. Theyre beginning a saving problem and thats going to carry them through. Its because theyre not having kids as early. A lot of them are putting off having children and having kids much later. Theyre doing the savings before they have that huge cost coming in, right . No question. Are they getting used to the savings so when they do add children im genuinely surprised by this. The millennials, 80 are saving where as other generations start later. The Great Depression generation, every time we get more surveys out, aaron, isnt this the case, this is a generation more like their grandparents generation than like their parents . Our survey points to that. Seeing whats been going on over the last five, ten years and saying i have got to start sooner. We have got to bounce. Aaron, thank you so much. An important issue. Michelle obama 8th. Clinton, 6th. Most powerful womens list up next. Well tell you who they are. Making new york state number two in the nation in new private sector job creation. With 10 Regional Development strategies to fit your business needs. 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Forbes annual list of the worlds most powerful women. The 2014 list of female power players is out and none of the top five are executive. Number five we have imf president Christine Lagarde and number 4 is brazilian president. And third on the list is Melinda Gates and second on the list janet yellen. And topping the list for the ninth time. German chancellor, angela merkel. Gms mary barra comes in at number 7. Ibm ceo, gin any rometty placed in the top ten. The 28 corporate ceos control 1. 7 trillion in annual revenues. 18 of those women founded their own companies or foundations. Also a very powerful list. Back over to you. Mandy, thank you so much. So heres whats interesting power versus success when it comes to general motors, ibm. Mary barra, to be on the top ten in the world are they successful . I think its too early for the gm ceo, mary barra. She just got into the role. Well see what she does. Shes done kind of an average job to me. Im kind of surprised there. Having the president of brazil in the top five, with that economy doing what it is doing is surprising. But isnt ait a power of a different sort . Im looking at hillary clinton. Hillary clinton is unemployed by the way. And then Michelle Obama coming in number 8 on the list, i think thats interesting, too. Because obviously the Obama Administration has got two more years left in power but what happens to Michelle Obama after they leave the white house. A fascinating story in question to see if theres a global foundation. Whether she can continue to become a global power player in the future is going to be something to watch. I love anybody men or women. I want to know whats going on at smith college. Im telling you, shes in the top five and you may not like anything about her. But i think theres something to learn there. To the women at smith, i would love to sit down with all of them together. That would be exciting. Fast money is coming up. Thank you, everybody, for being here. Melissa lee joins us with a look at whats on tap. Were going to trade the apple news that broke. And we have got tv icon and legend Regis Philbin. Hes got stock picks. He picked out micron way back when. Hes got a knack for picking the stocks. We start with the breaking news coming out of apple. It is official dr. Dre joining apple. For 3 billion cash in stock. Dr. Dre and beats cofounder will both join the crew. Lets go to headquarters. He just spoke with tim cook about the deal. Josh. Yeah. Just a few minutes ago had the opportunity to speak to apples tim cook and as well as beats