16,000 last november. And weve been adding on average, what 2,000 dow points a year since the low. March of 2009, weve gained more than 10,000 points in that time on the dow, works out to that amount. Dont have to get to 17,000 mark for it to be another historic session. Another close higher for the dow and s p 500, they will be new record highs. Stick with us, all the stats. Any number you want weve got it right here for you. Speaking of stats, truly an uber valuation for uber, cut put at an incredible 18. 2 billion valuation. Is that justified . Uber Ceo Travis Kalanick will join me exclusively for much more on that store sghe trending on twitter all day and also trending all over the jobs report as well. What the numbers really mean to the economy and that guy, if you dont recognize him, mission all the facial hair that he used to have. Pimcos brand new chief economist paul mccully will be here with a take you might not expect coming up here in a few minutes on closing bell. Let me just say his answers may surprise you. I cannot wait to hear from him, especially in this market, bill, because were going to talk to the panel. How do make sense of the bad growth and whats happening to rates. Heres where we stand in the final hour. The Dow Jones Industrial average adding 72 points to 16,980. A look at the nasdaq which is adding 20 points or half a 1 today and timely the s p 500 up about 7, just off the session high to 1947. Bill . All right. Lets talk about it in our Closing Bell Exchange with Patty Edwards from u. S. Bank, stephen wood, Michael Robinson from Money Map Press and chris hobart, Rick Santelli and with the hits, runs and errors on todays jobs report that would be steve liesman. Mr. Liesman, did the report justify the gains were seeing in the stock market today . Oh, i never go there, bill. I think it was a strong report, and what the market wants to do with it, thats entirely up to them, but, bill, you should ask me why im here. Why are you here . And not fishing. Well, to see Paul Mcculleys facial hair, thats why im hanging around. Everybody should be waiting to what paul has to said. The jobs report, solid, 217,000, staying above 200,000, first time in 14 months weve done that for four month straight. Plus, the job growth was widespread. Like to see that. Werent a lot of negatives in there, only one or two of the top Line Industries seemed to go negative so market can do with it what it wants. Job growth pretty strong and some argument, guys, that maybe trend job growth a little bit stronger than we thought it was. Chris, is that what you make of it . I think thats exactly what we make of it. Obviously its good signs and i like the concept the market will make of it what it will. The market likes it. The market likes a lot what have they have been seeing the past week even though there was a little bit of shaky news earlier this week with employment. I mean, overall market is enjoying this along with what the ecb has done with those rates. Are you taking your clients along for the ride . Are you going long or longer stocks here as a result, or are you pulling in your horns . We are, you know, right now were i guess you could kind of call me a a bull sleeping with one eye open. Im looking forward for that correction to come, but right now, you know, the market loves when money is either printed or when the when the fed or the ecb does something to to give us freebies, and the ecb this week has given us a freebie which should push us further. Also gave us an indication they are not done yet which at some point all that leads me to believe is the ecb going to do some quantitative easing as well which, again, pushes the market forward. Ive got my eyes oh. The bears should be coming at some point. Just looking for bad Economic News to push us that way. Steve wood, this report comes amid such a lack of volatility lately, a lack of volume. Market kind of been drifting lately. What do you make of that, and, you know, do you see that presaging a move sharply lower or sharply higher here . I think volatility is likely to inch up. I dont know that theres going to be a spike so longerterm were looking for higher volatility environment and lower returns. Looking at the market year to date, the russell 1,000 is up 1 year to date and we think now were in a global easing cycle. Americans are winding down and the Federal Reserve will stay very accommodative. Europeans have joined the party, tepidly but have joined. You have whats going on in japan as well, so i think that there is an environment where most Economic Growth that weve seen reflected in the jobs numbers leads to a creepup in rate. Thats more of a yield normalization process, so i think things are creepingly grindingly going back to normal and markets are responding correctly. I cant help but look at the yields today in a report like today which twin confirms weve had a strong stretch of job growth, stronger in 15 years, that were closer to some of the targets that you would like to see for an economy performing well and nothing half. Its a shrug by the ten years. Does this tell us this is as high as the rates are going to go this whole cycle . Its hard to say if rates will have a bit more of a correction, but i think the pressure of rates disappointing those looking for higher rates, that dynamic for the most part should be in place for a while. The exact levels, well, you know, the bund yields today against tenyears moved to the widest its been since 1999. On the one hand you have the pricing of the europe versus the u. S. On the other hand, what is it, 59, 80 months after the official end of the recision. Horray, we finally created the 7. 5 million jobs destroyed by the defined time of the recession, and every previous recession going back to 5080 is much shorter and shorter and shorter so the more kitchen sinks they throw, the deeper the recessions, the harder it is to come back and create the jobs that were lost. It sounds like everything is backwards, and my final lost in space comment about central bankers is why janet yellen or even ben bernanke didnt talk more and study more about the effects of what europes doing to keep our rates done, it would have been a very nice time to call qe a day. For all the great things everybody is saying, were still in semicrisis management mode with zero Interest Rates. Yeah, yeah. Patty edwards, i see here that youre thinking about horse racing, the Belmont Stakes are tomorrow. Wonder if California Chrome can win the triple chrome. Im wondering why youre not thinking about hockey though. Im absolutely thinking about hockey. Youll notice im wearing rangers colors, right. Since my kings are leading your rangers right now. One game, one game, come on. Yeah, well. What do you make of this market . Is it a hockey game . Are we going to be duking it out at some point, or are we going to see a horse race here . You know, i think eventually were going to see a hockey game and its going to get a little bit of rough and tumble. Dont see that happen during the sum ir. We think well see a summer meltup. Meantime, it is a horse was and like California Chrome, virtually seems like no one wants to be betting on the horse. The horse continues to run. Youve got a market where you if you look at the operating ranges and how that tracks versus the 7, just barely getting to fair value based on the earnings. The earnings were ahead for so long. Still some room to go, not a lot. Would prefer International Developed markets over the u. S. Market now, but we still want to be exposed to u. S. Equities. I would like to just point out that if rick were the steward of the race, given the steroids, the central banking steroids that this particular horse is on, im sure rick would disqualify it from even being in contention. If you give horses steroids, they just give baseball players, i like long home runs and then it would get rid of all the as tricks, just play the game lock. Michael robinson what about nasal strips, rick . Nobody is still betting on this horse. Are you betting on the stock market . Do you think it has further room to run . I do. I would not be sitting out this market, a longterm bull market. Not just the jobs report. Weve had 26 straight months of higher housing prices, auto sales up 11 for the month of may. Youve got semiconductors doing very well in the first quarter. Were looking at a 4 to 5 sales higher, mobile is still flying off the shelves. Tech is quietly staging a rally, from the mid lows in april. Nasdaq is up almost 8 . Youve had ibd, a big biotech etf, rallied 14 from its low. Tech is sort of the quiet untold story of the stock market is tech has been quietly coming back. Because the rebound that youre describing came after a pretty astonishing collapse. It did. That almost wiped out some funds so i guess the question is got to respect the move weve had since then but what do you see now . Where do you see opportunity . Would you go long to ibb or do you shift more towards the boring value name . I wouldnt shift to the boring value times. I like idb, in it for the long haul, like gilad, in it for the long haul. I still like apple. Apple has really ramped up in its price, 1 for 1 split, a 30 billion increase in the buyback and i would stay long in technology. The ones i just named i think are all good names for a long time. Kelly . Yeah. Last thought. Just the last metaphor here. This horse has been running, really its been dragging. People arent on the sideline not betting. They are trying to hold this horse back. If you think about how this economy has moved, the pessimism in the economy, really the lag of greed and the prevalence of speed. Maybe we dont know the full extent of the economy. I do like that met over. Take care. Go rangers. Rangers. Anyway. 50 minutes left in the trading session. She swore she was in a rangers jersey, too, today. Chicken. The dow is off the highs of the day, up 86 point and look at this. Up 77 and only 86 points away from dow 17,000 now. Amazing. Incredible. Paul mcculley is up. Well get the industry veterans reaction to this mornings jobs numbers. Wait until why he thinks isnt moving even though the u. S. Economy is adding jobs. Well if live to arkansas for the latest flash points and discuss a thorny issue for wall street. That will be wages. And the show of uber spoking exclusively to the newest round of funding that puts the valuation at about 18 billion which makes it a more valuable company than a name like alcoa. 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Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Bulldog yosometimes, all it takes is a warm heart and a cold nose. Thats why mattress discounters good deed dogs is raising money to Train Service dogs for people with disabilities. I would never imagine a life without an assistance dog ever again. I relied on people a lot. He helps me live a more independent life. Bulldog we need your help to do more. Give at mattressdiscountersdogs. Com, or any mattress discounters. Mattress discounters good deed dogs helping dogs help people generally markets are higher today, a favorable jobs report out this morning sent blue chips high. The dow is up 78 points, was up 86 at peak today. The s p and dow both in record territory obviously. Any positive close is a new record, and the nasdaq is up half a percent as well. Yeah, pretty Strong Performance across the board. Walmart management and share hold remembers meeting in arkansas for their annual powwow and sarah eisen joins us with highlights from that meeting. Sarah . Reporter after surviving a brutal thunderstorm here, kelly, this was doug mcmillans first meeting. Shareholder meeting for walmart and has been on the job for 100 days and he talked about technology. Walmart being at the forefront of innovation. A very unusual message, and really indicates a new way of thinking at the top of walmart. Other news from the meeting, board members, the founder of walmart reinstated as the chairman of the board. Really no not many votes against that. Interestingly vice chairman of the board went to greg penner who was a former walmart executive. Waltons is only and does pave the way for a success plan on the board of directors of walmart keeping it obviously in the walton family. In terms of initiatives to look to Going Forward that walmart talked a lot about, expect to see a lot of neighborhood markets. They are Smaller Stores that incorporate pharmacies and groceries inside. Sort of the opposite of the super center that walmart has done so well with over the last few years. Look out for walmart to go into the Convenience Store game, going up against 7elevens there with their everyday low prices. Doing all of these things because walmart is struggling, seen five straight quarters of samestore sales negative, slowing traffic, all in an effort to turn it around. An ambitious plan and have toisment it quickly and entertainment, all nussi and surprising, Harry Connick jr. , fhar fharrell and rallying the troops. Well watch that for a while. Very good. Happy. Its like is this a song, bill, or an effort to explicitly raise Company Morale . A number of shareholder meetings happy will be played, like the number of times feelings was played at weddings back in the 1980s. Todays job report shows a slight rise in Hourly Earnings. Joining us is the chief u. S. Economist at Deutsche Bank along with dean baker, codirector at the economic for policy research. Great to see both of you. Good news in the jobs report but average Hourly Earnings only up 2 . Generally soft, they have been in a range for three years. However, i would argue that broader measures of wage trends, you look at tax receipts are showing much faster growth which is understated and more importantly, kelly, as we low below the lockterm average on the Unemployment Rate, youll eventually start to see the wages pick up but its still a little bit away. What do you think . With the slack in the economy, in employment in the economy, a number of people still looking for jobs. I cant imagine weve seen much of an acceleration in wage growth until that tightens up, do you agree . I agree very much. Theres a strong relationship between the tightness of the labor market and the Unemployment Rate and the rate at which wages grow. Its quite striking because theres been a long period where wages have at left kept up with inflation. The late 90s, the Unemployment Rate went down to 5 around there was great Income Growth up and down the income ladder, but were a long way from that now. Thats what makes is so interesting to look at Interest Rates. One conclusion everybody i guess can reach here its that dont expect to see Interest Rates, to see broader price pressures move up until that wages piece holds in place. Thats the general perception, but would i argue that its more likely companies begin to raise prices first and then the wages rise in response to that as workers bargain adaptively for higher wages once they see higher prices. In fact, i would argue if you look at the last three months, now running at the fastest rate on core inflation that we have run at since the summer. The question is that sustainable . My questions is it is because we were last there in the summer of 2012, unemployment was two points high. I think we might be surprised. The bond market in particular, a little more inflation thats priced in which right now is not very much. Dean, is this something you have to wait out . Nothing the fed can do to try to boost Wage Inflation here, is there . The issue i think is the fed keeping its foot on the accelerator and im hoping very much that janet yellen is prepared to do that. Has started the tapering, by think the impact has been minimal in terms of raising rates. We saw when bernanke first introduced that last june there was a rise in rates. I think the big thing here is that yellen and the fed remain committed to having their foot on the accelerator. No reason to be talking about that any time soon. Still interesting the way you phrased the question. Implicit in your comments, and i know theres no reason quote, up quote for companies to do this, but if they were to start raising wages this could be the catalyst for all the rest of this to fall into place. Right now the corporate share of income is very high and the labor share of income is very low. Companies will take less and workers will take more and typically that does lead the equity mark, but typically that lead is three to four years, so weve got some time for this equity market to play out. Three to for you years. Margins, for example, back prior to the tech bubble peaked at 97. Margins yet to peek in this cycle so we still have some ways to go. Thanks for joining us. About 40 minutes to go until the close with the dow up 81. The s p adding almost eight points and the nasdaq 24. For the first of those two indexes it looks like well close out the week at new highs. I was trying to look up the wedding song feelings. I dont know. Once again ive done it again. Where was i . When we come back, a 32 billion question for you. Will sprints mega merger withtomobile pass must we are regulators and the Justice Department . Dennis berman says no way but stick around for our sprint owe tmobile green light debate and maybe well sing feelings for kell as well. Paul mcculle ye on the jobs report. Find out when he sees the fed raising rates from these rock bottom levels. Able charts, powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of Fidelity Investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Fame, makes a man take things over fame, lets him loose, hard to swallow fame, puts you there where things are hollow the evolution of luxury continues. The next generation 2015 escalade. Fame welcome back. So heres where we stand on this friday afternoon with half an hour to go. It looks like well have new highs for the Dow Jones Industrial average, adding 76 points this hour to 16,912, just shy real of that 17,000 level, and the s p 500 adding seven for its part, 1948 is where we stand. That, bill, too, would be a high. Dominic chu, whats moving the market as we round out whats been a pretty good week in. Seems like just yesterday we were talking about how many caution flags there were, but at least for right now it looks like the bulls are moving. Well start with hertz moving lower on news. It was restating its 2011 results and viewing its financial records for both 2012 and 2013. Can you see hertz down 9 in your session lows on the trade. Also humana hitting a record high after being upgraded to a Health Provider to from a buy to hold rating based in part on improved ratery emburstment and humana up 1. 5 and then theres Gw Pharmaceuticals which is advancing after the fda granted Fast Track Designation for treatment for a rare and severe form of childhood epilepsy that current currently lacks secure and well end with the big deal talk around sprint and tmobile. The deal would face regulatory challenges from the department of justice and the fcc which would increase the risk that it could be blocked so we knew regulatory would be an issue. This time around they will have to pay a lot more attention to. It not just at t that could have problems. Back over to you guys. Thank you. Lets talk about that. How likely is it that this 32 billion deal actually goes through . With us now the wall street journals Dennis Bergman who thinks regulators wont allow t. Hi, dennis. Hi. And with us is dynalink cofounder larry nicholson. Why do you think this is going to happen . I cant profess to know whats going to happen. I do think theres significant hurdles. The fcc itself has broadcast its concerns explicitly about a sprint t mobile deal. Were not sure it makes sense. Tmobile has been great as being a disruptive outlier in the marketplace. I printed this out for you, kelly. If you look at this, you will see consolidation in the telecom industry. Hold that one more time. Really hard to see. But youll see 20 years of consolidation. Do you remember cricket wireless, leap wireless bought by at t . Down and down and down the line. Crickets. Consolidation. Regulators blocked tmobile and at t. I think its going to be tough. I foresee a day when dennis will be able to scan that document and disseminate it to all our viewers simultaneously. That day will be coming some day, folks. Yes. Larry, you think this deal does go through, why . Because the whole world has changed. Nobody ever realized the growth in the mobile business. Theres literally not enough bandwidth out there for growth so this deal has to happen. Its not about adding on customers for sprint. This is about survival out there in the mobile business. Do the regulators care about that . I think they will have to because otherwise they will have more of a monopoly if sprint and tmobile arent aron. They need t mobile to be arm. At t an verizon will continue to buy up spectrum and they will become more of a monopoly so this deal has to happen, and i think it will happen. Whats interesting is what they are trying to do now in the next spectrum auction is hold out the big carriers and let the small carriers in. Well, that would hurt sprint and tmobile so they need to make this deal and i believe it has to happen because it has to happen for the bick. If this happens, dennis, while it may make a better third competitor what, happens you mentioned a lot of these startup names that have been in and out of space over the years and are gotten us to the point where we are today. Does this effectively signal the end of anybody else trying to challenge these guys . Really god point. If you look at the complaints about Spectrum Wireless use, sticking them together for the financial stability, i would say thats plausible, but right now to build a true competitive carrier is basically a nonstarter. If its going to happen, its going to be technology thats different from the cell phones that weve known over the last 20 years. Its going to be a wifibased network that gets you sort of 80 of the way there. Theres all kinds of things. Maybe google will be floating satellites and balloons and hang glideser above us all to give us wireless access but it wont be a traditional Wireless Company because it cant be done given the cost constraints. What about larrys point that this merger is for defensive purposes and if they dont agree to it then one of these guys is going to go under and you have a bigger problem and your hands with fewer players. More of a monopoly if it doesnt go through. Would i say one thing and that was the defense that sprint was making as it desperately sought a buyer over the last few years and when happened . It found a buyer. Theres billions of dollars to invest. If im the fcc and against this, would i say put your money where your mouth is, make it a better carrier and get competitive. The issue, not about building out. You need spectrum and tmobile has an lte network thats unbelievable. The two need each other and the two alone will get hurt. What were talking about here its needed out there. Its going to be growth. I dont believe what you were saying above about the satellites. The 4g will go to 45g and ecommerce, 6 of the world, everything is being pumped over smartphones. Nobody understood what that took. So the cost of Building Networks is enormous, and it has to happen. You need the consolidation. Otherwise like i said before theres a monopoly out there. Just wondering, larry works are you lock in this case . In other words, whats the best way for an investor to play this right now . The best way for an investor to play it is to stay out of these two names. No, no, honestly. Bus this will take a long time and fruition. Buy blackberry. Private joke. Dow 17,000, were there. Dow, 17,000. There you go, dennis. Maybe next week. We europe 73 points on the dow. That and the s p 500 poised to close at new highs. Traders on the floor is saying when is Paul Mcculley coming on from pimco. Hes been known to spot moneymake trends before anyone else so you may want to hear what he has to say about fed policy and Interest Rates coming up. And ubers ceo speaking with me about the Ride Sharing Service and its value at their 18 billion. Not too bad. Well be right back. Ck, and if the feature doesnt work, we havent lost anything, and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer, worsening prostate symptoms, decreased sperm count, ankle, feet or body swelling, enlarged or painful breasts, problems breathing while sleeping and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. Welcome back. Just joining us, weve had plus signs for the major averages today putting the dow and s p in record territory. Nasdaq is up 21. Kelly and i were talking before the show. I was saying on this 70th anniversary of dday when we honor those who gave their lives at that time. Wouldnt it have been poetic justice to have the s p close at 1944, but it looks like it will be above that. Right. Only a couple points away. Yes. Symbolic. We dont want to shave points away from the s p. Speaking of symbolic, by the way, the volatility gauge below 11. Lets send it up to dominic chu for a quick market flash. First of all, a couple minute, 1944 could be a possibility, but meantime, check out whats happening with caesars entertainment, a story were tracking all day. Dow jones says it objects to a notice of default from a Minority Group of bondholders calling the claims quote, unquote baseless. It said it will defend itself vigorously against any action taken by creditors. Down to session lows, down by 3 13 qua3. 25 . Jobs report, four jobs in a row with more than 200,000 jobs created. That hasnt happened in months. Chief economist of pimco joins us now, Paul Mcculley. Welcome back. Nice to see you. Welcome back. Hi, welcome. Thank you. This jobs report, the fourth one in a row job growth above 200,000. Are we on stable ground again . Where are we here, do you think . I thought it was a very soothing job report. In fact, weve had a series of very soothing job reports and i think its indicating that the economy is in fullblown healing. I think were on the cusp of escaping from the liquidity trap of the last five years. I think its a really nice report. Kind of like, you know, a bowling ball right in the pocket. You raise your happened and you say, you know, good deal. Except the tenyear isnt raising its hands. Is it ever going back above 3 , paul . Oh, i think we will in my lifetime. You think . Yeah, i do. Yeah, i do. I think were at the lower end of the new range for the years ahead. I think well have an economy that continues to do well. In fact, in our lifetime the fed will hike Interest Rates, not as much as they would historically. You know our new neutral, and im a preacher of that, put it that way. A 2 fed funds rate, then probably will have a three handle on the tenyear so i think were at the bottom end of the range for the years ahead, but i dont think well see anything nefarious on Interest Rates at all. Whats your version of why long yields remain low even as the fed was tapering . We were all convinced we would be at 3 by now on the tenyear. Were far from that, and there are those who fear that the bond market is signaling a much weaker economy down the road. What do you think is going on . I think you wrap it all together by saying that the bond market is a forward curve on ultimately what is fair value for fed policy, and i think we go back to prior to 2008, prior to the moment. We thought in terms of as a market that fair value for fed funds, the policy rate that the fed absolutely controls, was 4 so i think our mindset was all based upon the notion that you have to scale longer term Interest Rates to the policy rate. I think whats been going on, not just recently but actually over the last year or two is the market accepting that in this new world that were living in, a less levered world with too low inflation that we need to price off of 2 normalized fed fund rate so, therefore, rates are lower at the longer end than people are used to because they will be lower on the front end than people are used to. That raises such an interesting question. Minutesky moment, by the way, being the name of your boat which i think we do have a photo to show people. In other words, are we too complacent with the vix below 11, with everybody with everything sort of coming up roses and you mentioned how bad the crash was last time, the point we argue with Rick Santelli and people every day. Are we setting ourselves up for a calamitous event yet again in a couple years time because of imbalances that are building up today . Im really glad you used that word calamitous because it makes the answer to your question very easy which is no. I dont think were setting up for a calamitous event. At the same time, i dont think we have outlawed human human nature which moves from doom and we certainly had it in 2008 to exuberance and i actually smell some exuberance in the marketplace, particularly when i look at particularly sectors in the stock market as well as in the as well as in real estate so i think were having flavor of exuberance and some of it is irrational perhaps, so i dont think everybody is going to be totally smooth in the years ahead, and i think people will get out and lose money in particular sectors but my real issue is that the overall market, looking at broadbased valuations is not artificial or out of line in reality. The reality is that we have a permanently lower neutral fed funds rate. Youve got a big smile on your face and sound very comfortable and are very happy where things are. What is keeping Paul Mcculley up right now and what are you concerned about as far as the future goes economically . I guess that rules out my bowling game so in the economy itself i actually do have a lot of concerns, not so much related to the markets, but our society at large. One of the externalities of getting out liquidity trip with super easy Monetary Policy weve exacerbated income inequality in our country. The dirty little secret, which is not really a secret, is that the feds policy has disproportionately benefited the well off in our society and as the report showed this morning were not seeing really robust even modest increases in real wages for those who only have labor to bring to the party. You think Monetary Policy is responsible for that . How about what role did fiscal policy play in that as well . Responsible is too strong a word. Its a consequence of the fact that we had to have Monetary Policy as the only game in town. I certainly would have, if i had been in a policy making role on the fiscal policy side, wanted to do things with fiscal policy so as to keep that sort of widening and income inequality from getting as severe as it did, but then im a progressive democrat so, therefore, i accept reality in that we didnt do those things, so one of the blights on our economy right now and our society is income inequality, and i wouldnt say the fed is responsible for it, but it is a consequence of the fact that we had to rely so heavily on Monetary Policy to get out of the liquidity trip. To tie this all together, if you think stocks and real estate could be headed higher because Interest Rates are structurally lower shouldnt the people who are not involved in those asset class eds, in other words, a broad part of the country suffering from the inequality, shouldnt there be a way to get them involved . Thats a complicated question. Im not going to recommend a guy who is not getting a decent raise to put his money in the most speculative stocks he can find. That would be inprudent but you put your finger on a problem, society and policy broadly defined away from monti policy in the years ahead. This income inequality issue is for real and its a blight on our society. Paul, good to see you. Welcome back and come back any time. Love chatting with you. My pleasure. Fodder for weekend discussion. Yeah. 15 minutes to go before the close and markets still sitting here at new record highs. Thats is it redundant to say new record highs . Record highs, or new highs . We say it too much. Been bothering me. Stay up at night thinking about these things. 36 points on t 63 points for the dow. Nasdaq adding about 18 points, 1315. Heres a question r. Tesla and the state of new jersey kissing and making up . A bill thats permitting electric vehiclemakers to sell directly to consumers, not through dealer ships, is getting an important green light from a state committee in the garden state. Could this bode well for tesla in the other 49 states . Well talk about the pros and cons of investing in tesla coming up. Also, uber ceo speaking with me exclusively to discuss his Ridesharing Companys latest valuation. Were talking 18 billion. That makes it more valuable than whole footds. Why do cities shine so bright . Its the glow of opportunities of countless people, every one of us, striving to succeed. Thats what lights cities up for more than 200 years, citis job has been to help empower people and business. Wherever ideas come alive. Wherever you are. The worlds citi. Welcome back. The russell is now is the best performer among the four minimum wage or averages. The dow is up 71 and look at that, within 100 points of 17,000. One more good jobs report we could do that. And weve had a string of them lately. Much to the surprise of many people who are in this market. So green arrows all around. Seema mody highlights some of the gains in the small caps and techs today. Seema . Reporter thats right. After a tumultuous couple of months for the russell 2000, the shawlcap index is staging a comeback, up about 5 over the past one month. Ive been speaking to Market Participants who tracked the russell and whats driving this move and heres what im hearing. For some the drop in price is being seen as a good buying opportunity. Did see a selloff in the month of march and april and better than expected economic data. And, third is years. Several stocks in the russell 1000 offer a dividend deal which is attractive in the current low rate environment. Vanda pharmaceuticals and Vince Holdings and Technology Firm interdigital and some of the big gainers this week. Driving the nasdaq, tech continues to be a source of strength, oracle, intel, sandisk and apple after the 71 stock split. Soma, thank you. Heading into the close. Only ten minutes to go, off session highs in the index and still having a pretty strong session, up 70 points for the dow and 5 or 6 for the s p 500. The board just went blank on us. Were not that far away from 17,000. Can it happen in the next week or so . Maybe monday. Well talk about that coming up in a movement stay tunes. In a world thats changing faster than ever, 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. For that moment, where right place meets right time. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. 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. About eight minutes left, the dow is hanging on with a gain of 71 points, s p up 7. Record closing highs. For those two, the nasdaq up 21 point at 4218. Joining us is independent consultant david darst. Still up. Good jobs report. Is anything going to cause this market to correct finally at some point . What would that be, do you think . Always had that bear market check list. You and i have talked about is the fed tightening and tapering. Taking great pains. Still easy money though. And the European Central bank. Now they are easing, right . Is a recession looming . Doesnt seem to be right now. Not with the job growth. Four months in a row above 200,000 jobs. Right. Valuations stretched. On a longterm basis the shiller price earnings ratio is 50 overvalue, the price to sales is double the longterm average but on a shortterm basis its just slightly rich. Its not super rich. Is investor euphoria present . Look at the vix. Vix below 11. I couldnt believe when i saw that. The last two are the banks, the small caps and the transportation stocks suffering. They have had a good month, you pointed this out. So its all systems go still. All systems go. Apple is up 15 . Weve talked about that on this show week after week. I think its time for people to look at japan on on a basis of four things, bill. Its a valuation story. 1. 1 times book. Its a growth story. Earnings supposed to grow 20 over there versus 6 over here. Its a structural reform story. Abe is supposed to come with some things at the end of the month and lastly Asset Allocation shift. The individuals over there that only 6 of their assets in stocks versus 44 for here so maybe buy japan here. Thats what we love david about. Well bring you back and get to the closing countdown. First to dominic chew. Were checking whats happening with keurig grown mountain, the best performing stock in the s p 500 on or about 2 00 p. M. Eastern time this. Stock started taking off. Can you see on the righthand portion of your screen no. Specific reason that we know of just yet. Looking into this. The stock is up about 6 , 7 , 8 now on this crazy Movement Just in the last hour or so of trading. We will note though that there have been some very, very large options purchases for near dated options that just expired next week that could be a bullish indicator for some but still looking into that story. Back over to you. Somebody call Herb Greenberg quick. Maybe he knows and can find out. Thank you, dom. Weve been in touch with herb who we know follows that very closely and at this point he does not know either so were keeping an eye on Green Mountain. When we come back, keeping an eye on dow 17,000. Were not going to do it today, but could we do it early next week . Well talk about that and then after the bell coming up on closing bell the uber ceo talks valuations and when he may take the company public. The Ridesharing Company now says its now worth more than 18 billion, how is that for a Business Model . Well talk about that coming up. Youre watching cnbc, first in business worldwide. [ 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. About 90 seconds. Heres the tow. Any positive close. New alltime high. Up 77 points, a rally in the open and just moved sideways and sometimes as were hit being alltime highs there, the volatility index, the fear indicator and vix is at a 52week low right now. Its right at 11. For a time it had what we call a ten handle which we havent seen in quite a while here. Bob pisani, talking during the break, Green Mountain up 7 lately. I got calls, all i heard was heavy volume. I think dominic mentioned that. Went from 114 to 122 with heavy volume. Other than, that the general market, the key is the slow grind higher has worked all summer, slow little increments. Money analyst earlier in the show said this is a lot like betting on California Chrome, the favorite nobody wants to bet on because the return wont be that strong. This is an unloved rally. 35 odds. You said 1944, the dday invasion, landing on the beaches, made it possible for us to have this, need to salute them. Like the vix a little higher. Does the rally count if nobody shows up on it . Thats the only issue. For the average investors stocks at new highs. Its a goldilocks situation right now. Thanks, guys. Going out and in fact were going to be going out at the high of the day with the dow up about 83, 84 points. S p up 8. 5. Stay tuned. The ceo of uber on that uber valuation that company was assigned today on the second hour of closing bell with kelly evans. Have a good weekend, kell thank you bill. Hi, everybody, and welcome to the second hour of closing bell. Im kelly evans. You know from that graphic its another historic friday here. Stocks are closing out the week with new highs for the Dow Jones Industrial average and the s p 500. Here in fact is exactly where were finishing the gains of about half a percent and nasdaq fighting back into leadership territory. Now when it has its fourth straight weekly rise adds about 25 points this session and the focal point, the dow and s p 500, 16,922 for the blue chips and the s p to 1949 as we close out this week. Those now posting their third consecutive weekly gains. Lets get right to it. Joining me is david sauerby and zachary ary karabell and robert frank and john seymour. Have all the bears exit late or what happens next . One thing you need to follow, relative value out there reflects the fact that people are still trying to find stocks that can offer up such so the Energy Sector is very interesting. If you look at what happened in europe and the european banks, Deutsche Bank has been beaten up on their Capital Raise and ultimately because of the scale and the risk trade and the fact that liquidity is back for the next couple of months, i think these are the places people are looking. Can now get xlas meant, the vix is way too low. Thats an opportunity. This week we seemed to get very strong data across the board but not too strong. Volumes are up 10 to 20 on the big board. The vix, as tim just mentioned, below 11 at last check. Off 7. 5 . Off like 19 this year. With retoo complacent . Are markets too complacent . No, i like when there are still bears out there. I still think theres a longterm mistrust in stocks boast 2008 and even 2002 and the likelihood is stocks through today are up 6. 5 , including dividends. The likelihood is usually in the stock market its either a low return year or a better than average return year. Its never in the sweet spot of the middle. So 2014 we have a better prospect that well be up 12 or better with the Halfway Point up now 6 . So youre raising your view now. I dont want to say officially but effectively for the year, if weve made it this far, youre saying its more likely than not we keep outperforming. With the simple premise that stocks rarely give you a 7 to 9 , usually below 5 or betty than 12 or 13. Even after a great year like 2013 with valuation still being compelling and Corporate Capital discipline still reined in, that can be a good backdrop to the stock investor. What do you say to that . I think the vibs is too low. I have to disagree with david. The last time we saw vix this level was the spring of 2007 and we all know where that story went, and so i think, you know, perr paranoia is a good friend of the market. It is. I do think we had good Economic News but would i like to see the vix higher to be comfortable. Paul mcculley says while he doesnt think markets are artificial or out of of whack with fundamentals he does see parts of the stock market, parts of real estate potentially looking overvalued. Youve talked about junk bonds. Theres clearly already at this point in the socalled cycle places where you could say, well, maybe things do look a little stretched. Well, this is one of these places where things are only overvalued in retrospect meaning they are worth what people are going to pay for them and whatever yield they are going to get and a low yield and relatively low economic environment people are going to very rationally look for things we it to be more risk i. I just dont see as much risk and i dont see a reason to be particularly paranoid absent systemic and financial clocks and all of us are still dealing in whatever way with the reality of that risk, right, that everything is going to collapse, whether its the fall 2011 where it was the last time markets or 2008 or 2009 and thats there and in a much more prominent way than we thought it was ten years ago and will keep being there. If it doesnt happen a lot of these things dont bear the kind of risk and thats why were seeing a low vick and why were seeing low volumes. What kind of perspective would you put on this market . I think its up of these days where we have to sit back and take stock of where we are, right . Five years on. I was going to let that go. Five years on from the lows in march 2009. We were below 7,000 on the dow and now were almost at 17,000. People are out there saying maybe the nasdaq recaptures its new high within the next couple of years. At this point it looks like anything is possible. Yeah, it is, but whats changed for me this year and what i see is very exciting about this market and economy is we now have a much broaderbased recovery so lets look at that Household Wealth survey which came out yesterday. What was amazing about that is that the house hole, the House Real Estate portion that have 1. 5 trillion in added wealth was more than the stock gains so whats been the problems with this recovery it was stock led, therefore, 1 led, therefore the top was recovering, the rest wasnt. Thats changed. We now have autos doing well, housing is doing well. Incomes are doing better. Jobs are doing better so if you look at this recovery its now branch out and broad ended its own base and that to me is much more sustainable at a much better sign for this market than we were relying on really only a onespeed recovery for the top. Tim, you want to jump in right there. Youre seeing broad sector recovery but if you look at Housing Market and wealth effect thats not trickling down to the middle class. Im not someone who is telling you that the market is overextended. I actually think that the Global Recovery is in midsiegle. Having said you will of that, if you think the economy in the u. S. Is being sustained by the middle class, youre wrong. Its being sustained by central banks. Were now, just now, seeing those gains in housing hold wealth that are for most households. Even though the ratio has declined and a lot more investors might be exposed to the Household Wealth than in the past . They are saving more. Investors are more exposed than in the past but most americans rely on their homes and jobs for their wealth and those two things are better today and trat jectry is better today than it was last year. I would say in all of this that the investing horizon, meaning why stocks or some yields on bonds are fine is that i dont think a lot of these Companies Require a massive middle class recovery, and thats a totally separate issue. The market clearly doesnt. Weve seen that. And i think that continues to be the case because a lot of these companies are able to cherry pick from the best areas of economies, markets internationally without necessarily feeling like you need your story to be true. It may well be true but you dont need it. Stock market relied on stock buybacks, the fed, things that had nothing to do with the real economy. The market will be fine because all those other things are hartgely in place but the real economy, so that most americans feel better about their spending, is on the right track. Let me ask you a question. Hold that thought. I want to quickly real economy, its mediocre at best. Its its the end of the marking period for high school students. Real economy gets about a c at best, maybe even a cminus. Four months of 200,000 plus job creation. Not growing fast enough. Theres fiscal insanity in washington. State governments are getting it right, but washington simply isnt and we cant do it on the back of the fed. Would i like to see some of the companies that have all this cash on their Balance Sheets to start to actually get into investment and really making serious Capital Investment and the tax issue, people dont want to repatriate profits but on a larger issue we need to see some of that money coming back to the economy in a real way. Whats interesting is suddenly today we can all speak in laudatory terms about the economy but a week and a half ago everybody was crying bond yields were creeping lower and lower. Why are people feeling better . This is the funny thing. We thought coming into the year, tim, bond yields had it right and that that was telling us something was going to happen and now what you hear from Paul Mcculley and a lot of other folks weighing in on this is everybody coming around to this idea well maybe we can have a sustained recovery with nominal rates of 2 rather than 4 . The forward indicator of Economic Growth or inflation evident and Interest Rates rising for economic health, if you listen to what ben bernanke has been saying in private, that were all not talking about it in public, yields will not reach 4 in his lifetime, and i assume that lifetime is a 20 to 30year horizon. And hell be wrong. The fed will be wrong and the fed always overdoes. Are you short treasury rates here, david . I think treasury rates are uninspiring, maybe a little bit of cash on the sideline finds its way in treasuries, but the potential to buy em debt of high quality and short duration of 4 yields. Highyield debt, 5 or better yields. Senior bank lows. Thats a god complement to what youre doing in the stock portfolio. Tim, the last word. How you trade all of this. Were going talk about this on ffun today but clearly emerging markets are that. The Energy Sector continues to run. Stay fined for that. Just made my job easy. Now, the economy adding at least 200,000 jobs over each of the last four months. As mentioned, thats the fastest pace of job creation in more that be 14 years. My next guest says dont get too excited about these numbers because the new normal isnt good enough. Well lay out his case straight ahead. Ondemand car service out raising more than 1 billion in new financing bringing the value of the company to more than 14 billion. Ceo carl kalanick will join us with more. 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. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Bulldog yosometimes, all it takes is a warm heart and a cold nose. Thats why mattress discounters good deed dogs is raising money to Train Service dogs for people with disabilities. I would never imagine a life without an assistance dog ever again. I relied on people a lot. He helps me live a more independent life. Bulldog we need your help to do more. Give at mattressdiscountersdogs. Com, or any mattress discounters. Mattress discounters good deed dogs helping dogs help people welcome back. Stocks certainly reacting well to todays jobs report but our next guest says thats as good as it gets. Ralph acampora is here as well to give us his take on everything thats been happening. Good to see you both. Matt, first to you, youre saying, and we were just having this discussion, how strong is the u. S. Economy, youre saying maybe not as strong as we imagined from this string of better than expected jobs reports. Its a good jobs report, kelly, and a lot of the headline numbers of number of jobs created, reached an important milestone of getting back to the precrisis number of total private jobs in the u. S. , but when you go behind the number of jobs and start to think about the quality of jobs that really matters you realize things are not as god as we would like still and recent related data on things like productivity growth, real earnings for workers makes you start to worry is this going to be as god as it gets, like that hollywood romantic comedy of a couple years ago. That would be a thought. Usually we think of jobs as a lagging indicator but perhaps here, ralph, they can tell us about whether or not this kind of pace of job creation is sustainable. Look, are you still bearish here on the market . What do you want me to talk, the market or jobs . Talk about the market first, are you still bearish on the s p 500 . No, no, no. I had a lot of concerns earlier this year. We were talking about it on one of your recent shows but whats great about tech california analysis, when changes occur you change so the discipline and Technical Analysis started to show itself differently a few weeks. When the dow industrials finally mid a new high, thats theory and if you look at the russell 2000 the last couple of days, finally getting the small and midcap stocks and no one is talking about the s p midcap index making a new high yesterday and today. So what does that tell you . A lot of concerns i had are evaporating so hang in there. And and before i bring in the panel, ralph, had a does that tell you . Where are stocks headed from here then in. Well, i cant fight the tape, kelly, and and, yes, i was concerned a couple weeks ago and manich my concerns have been eradicated. I think the market goes higher. Were not early, but ill never fight the tape. Okay. David, your thoughts . Im a fundamentalist. I think technicals matter but they take a distant back seat to fundamentals such as valuation, compelling. Are companies very disciplined with their cash flow and their capital . Much more at this tage of this Business Cycle than in the loft two or three seconds. Thats a positive. Sentiment is still up. Reasonable mistrust in stocks and mean reversion is still working over the lock term and pretty good backdrop to be a what you do i let me put it this way. If matt is right and this is as god as it gets for the economy then those factors you mentioned will be offset by a loss of momentum fundament atherley . Not as god as it gets. Were in the going to travel at 22 annualized growth rates in the s p 500 as we have the last five years, but if we setting into a 7. 5 , maybe as much as 8 rate of return for stocks, including dividends, thats going to outperform the majority of every other asset class and do it competitively. You nexts the quality of jobs which is really important when you dig down in the report and i wondered about the splet between the short term and long term. Does that tell us that is this something that has toss discourage people who have to find their way back . Great question. We saw in this jobs report that some of the longterm unemployment, that total number fell. The concern is a lot of those people arent matching back into jobs. They are dropping out of the labor force. We know that that continues and when you think more broadly about the quality of jobs, earnings is a big thick. What do peoples paychecks look like and recent data on that shows basically no Earnings Growth for most American Workers so the which go question on this is are there other things washington can do with the tax reform, supporting the energy boom to try to get more growth for a lot of workers. Let me just play that those who missed last hour about income inequality. I dont think were setting up for a calamitous event. Until. I dont think weve outlawed human nature which moves from doornlgs and we certainly had it in 2008. To exuberance and i actually smell some exuberance in the marketplace particularly when i look at particular sectors in the stock market as well as in real estaught. Right. So he also talked about the inequality problem in this country. Its an interesting question and i wont do as well with the acaccident and the home spun wisdom sort of thing. You know, if you looked at a jobs report 30 or 40 years ago you would have had a lot of low paying and low quality jobs like today. I think more interesting, and i dont know if youve looked into this. Its a question at at a certain whats the likelihood of that being the entry to Something Else . There was the popular flow of and may have been that was a population illusion. Kind of like an eskatdor like it moved everybody uply isly, people jumping on and on. Mobility of americans, maybe have said its followed a lot. There are some things we can do. The fed cant affect the dynamism ability of workers overtime. Need other policy to support that. Thank you both on a friday afternoon. Remember when new jersey banned the sell of tesla cars in the state. The stock took a hit at the time and now new jersey is taking a step to reers that that ban. This beautiful mansion just sold for 23 million, and you wont believe who lives here. Horses, actually, horses. No a joke. Robert frank is here to show us and tell us much more of this shocking story. Type 2 diabetes effects millions of us. And for many, its a struggle to keep your a1c down. So imagine what if there was a new class of medicine that works differently to lower blood sugar . Imagine. Loving your numbers. Introducing oncedaily invokana®. Its the first of a new kind of prescription medicine thats used along with diet and exercise to lower blood sugar in adults with type 2 diabetes. Invokana® is a oncedaily pill that works around the clock to help lower a1c. Heres how. The kidneys allow sugar to be absorbed back into the body. Invokana® reduces the amount of sugar allowed back in and sends some sugar out through the process of urination. And while its not for weight loss, it may help you lose some weight. Invokana® can cause important side effects, including dehydration, which may cause some people to have loss of body water and salt. This may also cause you to feel dizzy, faint, lightheaded, or weak especially when you stand up. Other side effects may include kidney problems, genital yeast infections, urinary tract infections, changes in urination, high potassium in the blood, or increases in cholesterol. Do not take invokana® if you have severe kidney problems or are on dialysis or if allergic to invokana® or its ingredients. Symptoms of allergic reaction may include rash, swelling, difficulty breathing or swallowing. If you experience any of these symptoms, stop taking invokana® and call your doctor right away or go to the nearest hospital. Tell your doctor about any medical conditions, medications you are taking, and if you have kidney or liver problems. Using invokana® with a sulfonylurea or insulin may increase risk of low blood sugar. Its time. Lower your blood sugar with invokana®. Imagine loving your numbers. Ask your doctor about invokana®. Welcome back. New jerseys twomonth ban of tesla sales may end up being short lived. Dominic chu has the details. Reporter tesla has been banned from selling cars in new jersey since april, but a new bill introduced yesterday has given the luxury electric automaker a little bit of hope in a 40 vote. The states Consumer Affairs Committee Approved a bill that would allow tis la to operate four stores as long as they open a Service Center in that state as well. Several of the former tesla stores are opening as galleries which allows tesla to show the model and cant tell you about the car costs nor can they help you actually purchase one. Cnbc spoke with one of the assembly men who sponsored this bill. He expects the full assembly to vote in the next two weeks, and it will be on the governors desk by the fourth of july. Tesla is hopeful and calls it a quote, unquote positive step. Tesla stock is up over 100 over the past year and the doubling of a stock and this could be an Interesting Development if they are allowed to sell without dealers in the state of new jersey. Back over to you. Want to know if other states have banned direct sales of des la and what this ultimately means for the shares. David, do you like shares of tesla here . This has removed a significant head wind, you could say. Dont own it. Im from detroit. Proper valuations at this point in time, and one quick message to new jersey, long overdue. The Tax Foundation comes out with a survey of state business clients and new jersey has tently singed number 40 in competitiveness out of 50. Thats not a good number. Where do you live now, by the way . I live in detroit. Michigan is number 14 in the nation. Dom, i have a question. In other words, did the Service Center basically solve this issue . In other words, if they build a Service Center that clears up all the concerns and they can make these, quote, galleries, now stores . Its a concession, right . One of the negotiating point that has been happening. It adds more jobs. It allows one more component for this particular dealer type model to operation if they can sell direct and employ people with at least a Service Aspect to the car. That may be one of the things thats alleviating some of the concerns, but, remember, this dealer versus direct sales mod sell one thats been in place or at least the dealer model has been in place for decade in this country. Noernt it changes because of just a straight, you know, Service Center being added, that remains to be seen. Still, it seems, susan, like a pretty important reversal. Wonder if it has something to do with Chris Christies own politics at home. Cant take politics out of this equation. I mean, we forget david is from detroit. Im a jersey girl myself. Gm had a big manufacturing plant in lyndon, started in 1937, was there for decades, and so the Auto Industry actually had a strong presence in new jersey, and that flows right into the dealer mold el. Thats gone away obviously for a few decades now so things need to change. Absolutely this is the right thing and i think what will be really interesting is if that bill does reach Chris Christies desk and if he decides to veto it. Tesla is a little bit like and well talk about uber later, a little bit like disrupting the distribution of a Service People want and setting up a manufacturer with a buyer without having to pay a middle man which obviously adds to costs and fees. Disrupting a lobbyist model. And whether or not the Legal Framework is going to prove to be as elastic as the business framework. Again, uber has been a classic, classic example. So interesting to watch the way the technologies are disrupting in some days aids old Business Models and rules of laws, whether its the companies or the customers seem to view this as inevitable and have no problem pushing their states generally speaking to let this stuff go forward. Isnt this what america stands for . What you have are options. Lets not forget this a dealer mold and a direct sales model both have pros and cons, right, auto manufacturers it allows them to ship the financial risk to the dealers. Those middle men are there and put their own capital at risk in order to sell cars. Say a tesla sells direct to consumers, tesla owns the risk of selling their inventory directly to consumers, remember, its like a wall street model. Goldman sachs, jpmorgan, sometimes they act as dealers. They have inventory. They sell to customers. With dealers its the same kind of thing. For cars they take the risk from buying directly from the auto manufacturers and passing that directly on to clients. Understanding inventory and just in time production, that need of inventory control where inventory is weighing on the margins and the cost of the Company Seems to be shrinking as a level of concern. And underlying all of this. It could shrink. Right now there are dealers compensates for taking the financial risk just like dealers in jenks markets would be as well. And like well talk about with uber, they say Travis Kalanick, the ceo, has said this is potentially the end of car ownership. I mean, massive changes colliding. Thank you, dom. Appreciate it. From one car company to another. Ondemand car service uber. More than an app. Valued at more than 18 billion after a new round of financing. The ceo is here next to tell us how the money will be used and when investors may see a uber ipo and al grimptgorithmalgorit taking over the world, one just named to a board and well talk about that coming up and what that means for the future of Corporate Governance. We started zya with the thought that the kid on the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device. Up to the cloud it goes. Back down it comes sounding better. We break down the walls of creation, and we give music creation for the masses. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. 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Comcast business built for business. Uber today announcing it found another form of financing putting their new value at over 18 billion. Ceo Travis Kalanick joins us now. Thanks for having me. Can you clear up whether your company is worth 17. 2 or 18 billion . We have an 18. 2 postmoney valuation. Whats your revenue, travis . We dont talk about our revenue but i can say its pretty large. There are people already, jaws dropping, saying youre worth more than her the at 12, 13, 14 billion and worth more than whole foods and more than tiffany co and worth more than names of companies with a huge presence and you have said actually you think that valuation is conservative. Is that right . Well, the way i describe it is, yes, were young. We actually turn four years old this week, but weve had incredible growth, and so the size of the Business Today is very large, and the growth is actually unprecedented. But even if you take Public Market multiples, were getting less than Public Market multiples on growth thats far bigger and so, you know, private Companies Just dont get the same kind of multiple. As a Public Company it theres at least an argument that it would be higher. Are you saying your revenue is more than 2. 5 billion. Im not going to tell you what my revenue, is already went through that. I know. Just to pick, for example, Internet Companies, trading at roughly seven times revenue that they are making and you say, look, you think if you were public youre getting something more than that. Im saying, in other words, for people in this country towns how much your company is truly worth it could be upwards of 25 or 30 billion. I totally understand. My point here is, that you know, youre going to have different Internet Companies at different valuations. But a big part of that is also their growth, right, so when you look at high growth. When you do the comps you have to look at High Growth Companies to think about that. That said, were private for a reason so i dont have to have conversations like this. The ceo of ever note said he thought he had a moral obligation to go public and let more of the retail people participate and not just the wealthier investors. Do you feel the same way . Were a very Young Company getting our sea legs and honestly the private markets are incredibly liquid. Of course those private markets often, you know, could be mutual funds and other Institutional Investors that represent a lot of small guys, so i dont look at this as like a small guy, big guy thing. Were a 4yearold company and were still in that really high growth phase and i think its because the markets are so liquid it just makes a lot of sense for us to be private right now. Understood, so four years ago this week, as you mentioned, frustrated you couldnt get a cab ride in paris. Today does that make you a paper billionai billionaire . Cofounder and ceo. Ill let you come to your conclusions so we are we are building a lot of value here because were changing the way cities work and were changing the way people move around cities, and for the better. Remember, uber acts in most city in a world is far cheaper than a cab, righter here in San Francisco its 25 , 20 than a tax and in london 40 cheaper this a black cap. When you offer that kind of transportation alternative, that inexpensively and that at that great of a value youre basically welcoming in tens of millions if not hundreds of millions of people no a transportation option that they never had before. And thats why the panel with me here was expressing how much they enjoy using uber, even before you came in in different cities that they travel, the ease with which it works, the reliability, the service all of which have gotten good marks and as well as you try other initiatives, people should know youre not even just about transportation in this sense that were discussing. Youre also potentially putting companies, giants like ups and fedex on notice. Look, i think thats a little bit of a stretch, right. Like we are doing some something called uber rush in new york. That business is a month and a half, two months old, very early stages, but helping people move things on demand inside of cities is something were really excited about, but honestly, that wasnt part of the fund raise, that wasnt part of the pitch, but what i would like to say is the icing on the cake, if moving things as well as people works out. Lastly, travis, is there a future for car ownership in this country if your vision plays out to the extent that it could . Look, i think people have to get around some way, but i think what were what were innovating on and what were bringing to the masses, particularly in urban environments, is sort of transportation as a service, and and i think its its pretty remarkable where, you know, were in the billions in terms of how big the company is and what kind of activity were doing on a yearly basis but growing faster this year than last year, and so if folks want to sit in the back seat, folks want to be able to push a button and get a ride very quickly and if you can make the economics work so its more economical to push a button and get a ride than own a car then a lot of people are going to do it . Its a pretty powerful thick. Do you retain majority control of your company, travis . Ive been an entrepreneur for quite a long time, and its pretty important for entrepreneurs when they are in that innovative sort of growth phase to to make sure they got the levers to make sure that they can point the direction of the company. I would say we have full control of those levers at this point. Thanks so much for joining us. Congratulations. Imagine quite a weekend. The show of uber and now worth more. Still to come, California Chrome still looking to make history as the first triple crown winner. Well have the eye popping details next. In a world thats changing faster than ever, 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. Welcome back. Computers may finally be taking off, an algorithm has just been named as a member of the board of directors. Lets ask jim pace who has great knowledge and experience when it comes to Corporate Governance. Whats your take on the use of an algor on the board . I find it unique and very unusual, but im not surprised having spent all the years i have working with chinese in china. Is it the future for Corporate Governance . I wouldnt think so. I think we might find some resistance amongst shareholders for substituting a computer or the wisdom of someone who knows the try interest and knows the product. These assuming that the board is doing its job reasonably well, most of time. Thats exactly right. A lot of times especially as we saw in the financial crisis. A lot of major financial institutions, bank boards were taking managements word for it and they werent doing the job. My concern here is how does it learn because its only as good as the inputs it puts in and what does it learn that you start to kind of refine the algorithm as you go . I have a question. You said based on your work with Chinese Companies youre not surprised at this. What do you mean by that. I found in my work with the chinese, they have a great interest in statistics and in gambling, and and in odds, take a look at macaw. Sounds a little like this country, too, zach. Im not sure that steve wynn is going to put an algorithm on his board any time soon. This does raise the whole question of what the purpose of it is. Simply kind of a reality check for the Due Diligence to make sure that the Corporate Board executives are filling out the right boxes and now they are falled in a performance and im somewhat per flexioned as to the rational . Let me put it this way. Would you invest more like willy or less likely to invest in a country thats almost like a big data spot on its board to reveal internal and external information to max moyes or best improve or make decisions. It wouldnt hinter me. One. Pieces to the process. I think it can be added and can take out human emotion. Weve all seen boards do unquestionable actions when it comes to deploying capital in the best interest of the shareholder . If its a piece of the puzzle i think it can add value. Advances in technology have made Great Strides everywhere. This is simply another attive piece to this element, as long as it is a piece only and not in total. By the way, on that. If the algorithm has to process the success rate of corporate acquisitions it would likely vote note all the time. Look at Warren Buffett said. He held his note and voted yes and simply if he were an algorithm he could vote no. And a compensation package is maybe why we wont see the algor go anywhere. Professor, thanks for joining us. California chrome will troy to become the first triple crown winner in 36 years. Up next how much this horse could be worth if he wins and how much money overall is at stake on this race, and speaking of big bucks, this home just sold for an astounding 23 million, there it is. Whats even more amazing is who actually lives here. Its not who you think. Stay tuned to find out. What can your fidelity greenline do for you . Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. 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. Welcome back. The 146th running of the Belmont Stakes is set to take place tomorrow afternoon with one horse looking to do something not done since 1978, that is to win the triple crown. Catch coverage on nbc starting at 4 30 p. M. With chrome being the favorite and going off at 75 odds. If you bet 5, you get back 3. For the horses owners a lot more money is at stake than just the bets being placed. For more on all of this, were joined by the visiting expert on sports business at harvard law school. Great to see you, rick. First of all, how much money is being wagered on the belmont this weekend. We have a technical issue, so its a god thing we have robert frank with us. Get back to him in a minute. Do you know with the total wages this weekend or should we focus on the value of the horse . Whats interesting about the value of the horse, everyone thinks if it wins the triple crown it will be unone of the most expensive horses on the planet and spending the last few days learning about horse breeding, turns out it wont be a very valuable horse, maybe in the 16 million, 18 million range horse was bred for 10,000, but it turns out what matters for horse values is their blood line. He just doesnt have a great blood line. He could be an amazing racer but for breeding purposes hes not going to be because the real gamble is to bet on the horse like he is in first place who doesnt have that great lineage. There are other horses that have already proven it who are worth 50 million, 60 million. Would you pay up for him, david . Probably not. Here is why. When affirmed, last triple crown winner, syndicated at 14 million in the late sef70s, adjusted for inflation today would put California Chrome at 50 million, 51 million, but you dont do this for the investments. You just look at a simple 50 stock, 50 bond portfolio, 14 million in 1978 is well, well, well in excess of 1 billion today. Its not a good investment. No. Its passion. You dont buy Major League Baseball teams or nba teams to make money. And you probably dont buy racehorses to make money either. And we wouldnt go out to see like 11 bonds show up at the gate at belmont. Its like venture capital. You own maybe 100 horses and one of them will be an amazing horse, you will make a lot of money, hopefully support your passion. This horse is very valuable as a racehorse. There are some huge stakes coming up the rest of this year. A 5 million dubai race. He could be worth millions but not as a breeding horse. Hes got to work on those endorsement deals. Thats exactly it. This is a great story. This is like the horatio algiers story of horse racing. This horse is going to have like a reality show in a year. Like we said, whether its horses or celebrities, that seems to be the way to make the big money. Speaking of big money, theres some big money being spent on bringing up horses these days. This was crazy. Tuesday night is the season premiere of secret lives of the super rich. For this season we went inside a 25 million mansion in wellington, florida. I think we have some photos of it. Its gorgeous. Its multiple thousand square feet, interior wood crafting, chandeliers, beautiful views. Its for horses. Just horses live that whole complex we just saw is just for horses . What does the main home look like . There is no main home. This is on the grounds of wellington where they have the threemonth horse show, so the bloomberg daughter goes there, the string steen daughtpringste the equestrians go there and show and compete. Only horses live in this place. They just sold it for 23 million. It was one of the most beautiful structures i have ever seen and the reason all this is happening is its largely driven by all the money in the world. If theres something thats desired by the wealthy right now, its in a bubble, and a horse stable to sell for 23 million, if thats not irrational exuberance, what is . They are literally pet projects. On the reality show thing, i think thats an extremely good idea. We could call the show stud and people lining up to you know. Theres no shortage of things that we will do here to feature its amazing what you can do with air time that you have to fill. Thank you, guys, all. Im surprised, couldnt you just build a stable like that for much less than 23 million . You will see if you watch secret lives you will see why its basically the specific location of that barn that makes it so valuable. You will find out why. Its not on the beach, but its something even better for a horse. Fundamentals matter. Rick, are you there . I would love to just get a word here. Were so sorry about that. Could you just tell us at this point having discussed how much the horse might be worth, how much some of these properties are going for, how much money is going to be bet on this race tomorrow . Well, theres a lot of money on the race. The handle is 100 million. The good thing about California Chrome, hes a smart horse. He told his lawyers to trademark his name. Hes made about 3. 5 million in earnings so far. Hes got to deal with sketchers. Hes got a deal with breathe right strips. And, by the way, if he wins, 30 million in stud fees await him. So thats a big time horse. By the way, the bigtime betting as well, really quickly, in 2008 we had big brown went to the belmont. Here are the big brown tickets. One to four odds, not really great but the bottom line was i was going to win the triple crown. Here was the ticket. He pulled up halfway through. All i won was a stinking stuffed animal horse. Im not very excited about the favorite. This time though just like Miguel Cabrera wins the triple crown, First Time Since 1967, this horse wins for the first time the triple crown in horse racing since 1978. Bet the ranch on him. Thats my tip. All right. Im just still kind of horrified by the breathe rights and the sketchers, but, rick, its good to see you. Hope he has gatorade so he doesnt cramp. Thats a good idea. Mixing sports. Mixes sports. All starts in 24 hours. Coming up next, well look at the week ahead. On monday tune into squawk box. Bill ackman will be appearing exclusively. Always eager to hear his thoughts. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Tdd 1800345255050 tjust waiting to be found. 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Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. White chocolate loversividual. Dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow the consumer to customize their preferred chocolate. We needed the scalable Cloud Solution allowing them to see all 800 products and select what they are looking for. Now there is endless opportunity to indulge. Welcome back. Time here for a final thought. Just to recap where we stand on these indexes. Four week winning stretch for the nasdaq, three weeks for the dow and s p which go out at new highs. Do we take out 17,000 next . Inevitably, yes. Big week for data this week. Next week watch Small Business optimism and their hiring plans because thats got to be the continuation to get this job growth to higher levels. Thats always the key to growth. Great point. Susan, what are you watching . I think its great the ecb is pushing people to lend and thats good for the economy but you want to make sure youre not starting to lend to poor credit. Zach . I think the ecb move this week is a lot more important than the markets even reacted to. It will be interesting to see how this plays out as the fed pulls liquidity in and the ecb reintroduced it. Passing the baton. The french open final. Rafi nadal. Spain has lost their king, they lost their economy. They have rafi. If he wins the ninth french open, no doubt the greatest player in tennis. On nbc. Keeping it all in the family. We cant wait for the new reality Series Starring California Chrome. Stud. Produced by susan. Fast money coming up in a few seconds. Melissa lee, whats coming up . Hey there, kelly. We noticed some unusual trades in Green Mountain coffee as well as ford motor. Were going to decipher the trades see what the traders think of those and were trading apple ahead of the stock split. We had unusual activity in terms of the option activity. So how should you play it going into monday . Well, i hope you have your br breathe rides ready . Thanks a lot. Fast money starts right now. In new york city times square, im melissa lee. Tonight is a very special fast money because i am counting down my favorite songs, my five favorites. Our traders are tim seymour, brian kelly, steve grasso, and pete najarian. They will not have any say in the music we hear tonight. So no difference from any other night. Bingo sorry. There we go. Get serious here. Apple, closing at 645. 57 today. On monday each share will be worth 92. 22. To our stop story, the return of risk. A strong jobs number this morning sending stocks to record highs. Russell 2000 entering positive territorfo
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