Bull market continues right now, kelly. I think the up love is turning into hate as people continue to watch and try to figure out what to do next. Thats the kind of question well pose to people. Bill, a lot of people focus on the fact its not just stocks, its also gas prices looking here in the case of gas prices sixyear highs for the fourth of july travel season its an important one. Its not all quite coming up roses. Thats for sure. Lets bring our Closing Bell Exchange in. We have a busy couple of hours lined up here. Arob gibbs is with us, mark teper, todd salimony, todd liden from Global Investment trains and our own rick san tellie. Todd, youre bullish in part because it is a relatively unloved bull market, isnt it . It is despite what weve been reading in various newspapers, blogs, a lot of strategists and Market Participant also tell you theres a lot of complacency in the market. Were looking at the volatility init exto come to that conclusion. Well argue with historical volatility so well the vix is relatively high but if you look at other measurements of sentiment, 93 billion yeartodate going into these alternative investments like hedge funds, typically people would go that route looking for different assets beyond u. S. Stocks or looking for funds that have the flexibility and you look in the Options Market were hitting 7 to 8 million contracts and versus the 3. 5 million we were hitting ahead of the last 10 correction, Short Interest popped and s p and cube components. Despite what you hear about the xla septembercy, were not seeing it, complacency, were not seeing it. Mark tepper, you think we keep going here . We think the bull market will continue for some time. The bears talk about the pe multiples are 15. 8, in line with historical averages or stocks are overvalued. We argue based on the fact there are no investment alternatives out there whatsoever that are going to produce any yield, we could see those valuations expanding up to maybe 17 or so, so yes, we think this bull market has plenty of room to run. Aaron gibbs well get earnings pretty soon now that the new quarter has begun. If the rally continues it will put pressure on the companies to deliver. Right now were looking at about 6. 5 growth for q2 and overall about 7. 8 for the year so actually the fact the s p is up about 6 were looking for maybe 10 by the end of the year for the market. Its not that different. There isnt a huge die firstification between earnings and where the market is. Again, were talking multiple, theyre well within normal ranges, about 15 forward, 16 in the past 12 months earnings are up to 10 . You think that outpaces what the market does . I think for the year earnings is forecast about 7. 8. I think the market will outpace it. Look at forward next years earnings, were looking at 10 , 11 growth. If you that i gets priced in, that puts the dow at 18,000 pretty quick. Yep and were looking on target for the 1. 500 is 2015. Its dependent can they deliver third and Fourth Quarter earnings . Those expectations are high and thats a big question. Just looking at the last year, weve hit a new millenial mark every six months so the last three millenial marks have come every sixmonth period. Tom liden this is a strong time for the market but does that continue through the summer which traditionally brings in doldrums. This week historically going back to 1950 has outperformed 72 of the time so thats great news. As you were talking about fun flows and giving a shout out to etfs, equity funds are losing money but et frkf continue to b on new money. Three months ago the areas that got hit the worst, Growth Stocks, small, mid cap technology, biotech, theyre leading it not ohm in volume but appreciation. If we see earnings continue to beat the way we did in the last quarter, two out of every three s p stocks beat expectations, if if we continue to see that, i think well continue to go higher rick santelli, the only cheers i heard from the floor came when argentina scored in its world cup match. You know, down here they didnt even cheer for that, so you know, its one of these first day of a new quarter. To see bonds moving the way they are in terms of selling off of it, to see stocks moving where it is, we havent had that many triple digit gains of late. I think it makes perfect sense and its not only the end of the quarter and half year, its a holiday shortened week. It makes a lot of sense. In terms of how long this could go on, i know this might be counter intuitive for those who watch me but i think the equity game is going to go on a whole lot longer than anybody thinks because theres many ways to look at whether its overperforming or not and i would say that if you look at 2007 at 14,000 in the dow, seven years later up 3,000 points, thats roughly 2. 5, 3 return so i look for the market to catch up and not look at that hiccup and see stocks growth at a downsized rate of growth. Remember when we took out the 2007 high in 2013, thats the year we had our 30 plus return so i think you could look at it in that way and it explains that the music could go on for a lot longer. Youre reading my mind, rick. Were going to be on next hour to take an historical look at the market and i was thinking that same thing about this catchup phase where we went through 14,000 in 2007 and it took us six years to get to the next millenial mark here. I think we should be looking at the nasdaq, dont you folks . There you go. See, youre with me. So your negative return, anything from 199 on is negative return. If anythings playing catchup, mark tepper, dont you think its the Technology Stocks . They hit their alltime high in 2000 at 5100 and we are at 5048, still trying to catch that. The Technology Sector looks great as does energy. What we found is that history has typically told us that really at the onset of policy renormalization, thats a good time to shift into more of a barbell portfolio strategy. Within the cyclicals we like energy and technology right now. Were starting to pull back and pull out of industrials and materials because they appear to be overvalued, and were actually beginning to start to move in more of the defensive sectors again like utilities and also consumer staples. Theyre not cheap, mark. No, utilities have had a good year so far but they are beginning to look attractively valued again. They just recently retested a relative performance load that they tested twice at the beginning of the 2000s, and both of those times as well as this time turned out to be a good Inflection Point for some outperformance from that sector. They still look attractive, investors are chasing yield and you can pick up good dividends and utilities. Tom lydon, people will think theyve missed it looking at this. The message from rick and others is get involved. Thats right, kelly. You mentioned valuations. It might be getting a little pricey, so you look for other areas, if if our economies continue to move along here, emerging markets have been unloved, with the pi of a little over 11, compared to 17 in the u. S. , relatively cheap and we cant forget about europe. Europes Monetary Policy will continue to move that economy along, continue to move markets along there as well, but watch out for the currency adjustment there. Its important their etfs that can help with you that. Erin gibbs what do you think about the Technology Stocks . As rick and i are trying to play catchup, where do you rank them right now . Theyre actually fourth in line for Earnings Growth and as valuations, theyre pretty much middle of the road. For us its very much a stop pickers market. We like some of the stocks they showed earlier, apples and intels, at the now old school Technology Stocks but we feel a lot of the higher Growth Stocks could prove to be a little highly priced. Because Consumer Sentiment has been peaking recently and actually crossed over the 85 mark, thats where id be a little more willing, where we see that optimism come in, thats where id be more willing to come in and take riskier bets. Guys thank you for now. Appreciate it on this thank you. 17,000 watch, bill. Weve got 50 minutes to go before the bell. 1 00 today we got close to the 17,000 mark. Right now up about 150 points at 16 16,976. We only have to go above or hold above 16,978 for that to be above the prior intraday high. Which doesnt make any sense because we already passed it. Carry on. Thats fine, we get caught up in numbers here, thats our job. We have a lot planned including investing legend byron wien, hear what hes thinking about the stock market and what will happen next. If you think the market is hot its nothing compared to gopro. Shares doubling in four days, its up big again today. Well take a closer look at gopro and the markets straight ahe ahead. Marge you know, theres a more enjoyable way to get your fiber. Try phillips fiber good gummies. Theyre delicious, and an excellent source of fiber to help support regularity. Wife mmmm husband these are good marge the tasty side of fiber. From phillips. At every ford dealership, youll find the works its a complete checkup of the services your vehicle needs. So prepare your car for any road trip by taking it to an expert ford technician. 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Wife mmmm husband these are good marge the tasty side of fiber. From phillips. Withal come back. Wall street beginning the second half of 2014 with a bang today. All three major averages with pretty good rallies under way, especially the nasdaq, up almost 1 1. 2 with a gain of 51 points. The dow is up almost 1 and earlier was very close to 17,000. Were going to be watching to see if in the next 45 minutes, kelly, we can hit the next millenial mark here. Well have to see what good harbors do. One amazing aspect of the rally is that its happening in the face of higher oil and gas prices this year. Jackie deangelis has the latest from the nymex. Good afternoon, kelly. Oil prices backing off a little bit more today. West texas sbeer immediate yat close to 105, brent closer to 112. Not that traders arent paying attention to whats happening in iraq but without supply disruption they cant bid the prices up higher. It doesnt mean the recent spike in oil prices hasnt impacted the consumer in in terms of what they pay at the pump. The National Average for gas lean 3. 17, aaa also predicting were going to see nearly 35 Million People hit the road this Holiday Weekend and they expect to see gas prices at the highest level that theyve been since 2008, so ouch, and there is going to be a point where this starts to impact the consumer, and gas prices tend to rise quickly and come down ever so slowly. Back to you. You. Like a rocket, down like a feather. Thats what they always say. Thank you, jackie. Sure. What is next for oil and gasoline prices and what would the impact be if we see a good spike down the road, what would it do the markets and market rally . Joining us, cnbc contribute for matt kilduff and matt morris. Hi, kelly. John how much higher can gas prices go before it does more harm to the economy and are you surprised it hasnt had more of an impact already . Consumers are to the price thats the breaking point. Theres some argument maybe its a higher price point but from my experience that seems to be when they pull back on vacations to School Closing and everything else, to pay at the pump. The one thing to watch is that with the higher and higher employment that were seeing, folks will pay anything they have to, to go to their jobs. Were seeing some support on demand with that. I would just say one other thing, prices have peaked because the iraq situation has been figured in, and hurricane or Tropical Storm arthur is working its way up the east coast, unfortunately, so a lot of folks who might have hit the road for the weekend probably might just hunker down at home and play ma mo no employee. Especially in the southeastern portion of the country where its probably going to be rainy there just at the wrong time for the fourth of july Holiday Weekend. Ken, what do you make of the rise in oil . Does this benefit the Oil Companies themselves or not . Sometimes it doesnt. Well it all depends on how you look at it, bill, from a regional standpoint. The longer the unrest takes place in iraq in general and baghdad in particular, and we had a couple of events today that were really disconcerting, that uncertainty will ripple through the market. What tends to produce a benefit is for those companies that actually have a security premium built into them, and by that i mean north american producers, and producers that are medium and smaller sized companies. We have Smaller Companies now in the United States that are benefiting from the unrest abroad. They tend to be producing higher profit results than the bigger boys and this is likely to continue the longer the uncertainty remains. It isnt often you find an industry where the smallers are favored. We want to get a couple names in a second. John, which do you think exacerbates income inequality in the country, is it the rising stock market or rising gas prices . I think both. Im not sure which one i could pick. Significant amount of the population is without exposure directly to the equity markets, either through index funds or direct Equity Ownership but i think certainly and i was really wor bothered by the talk of higher gasoline tax, yet another aggressive sales tax on the working class folks that have no other choice but to drive to work. That impacts or hurts the economy and investors more than say the rising stock market may necessarily help earn. John, the question im often asked and ill ask you as well, does the oil market have any business being as high as it is right now . It goes up on the expectation that theres going to be a disruption of the oil flow out of iraq, because of whats going on over there, and now were told its coming down over the last couple days here, because maybe it wont happen right now. Well, so the situation in iraq was a concerning one, right, bill . The isis forces ripped through about a third of the country in no time at all. It made some sense that 3 Million Barrels of iraq oil was hanging in the balance for this market. That scarcity premium quickly and rightly gets priced in, 10 of opec, oil that couldnt be picked up. Things are Holding Together right now, so i think the markets been sort of fair mediator in terms of what the probabilities are and what the value of a current barrel of oil is. Okay, kent, what are your favorite plays in this market, if you could give us a couple of names and also do you think its likely here that well go ahead and see some gas tax . I think the gas tax is figured in primarily because we have infrastructure that desperately needs to be prepared. We have a couple of crossinterests here. I also think the situation in iraq is about to deleverage and deleverage quickly. Given whats occurred today and yesterday, we are looking at a virtual guarantee of the country splitting into three parts and theres very little that can be done about it. Isis does not need to control oil fields. They need merely to par lies the central government. Zwr we teased you had rather Small Companies you like, these will not be familiar names to most people and we showed the chart here, carrizo oil and gas, Goodrich Petroleum and magnum hunter. You say its because of the security issue these companies enjoy here these companies tend to be well managed, they tend to be leaner. They tend to emphasize basins they know well and they come in under the radar and tend to produce at a profit in a market that is secure. Unlike foreign sources of crude oil. Gentlemen, thank you both. Appreciate it very much. Great stuff, appreciate it guys. Oil is something we have to keep an eye on for the economy and the markets. The markets are going higher, kelly, now the dow is about 30 points away from dow 17,000. Are you driving, bill, this weekend . Are you hitting the road . Not in a long sense, no. Not more than 50 miles. You drive a Long Distance every day so that doesnt matter. We hit the road last night and it is expensive out there. Ill be flying. Hopefully that trip will go well. 40 minutes until the close. Looking to see if the markets can try for 17,000 one more time. Ill explain more when we come right back. And now telcos using hp Big Data Solutions are feeling the love, too. By offering things like onthespot data upgrades an idea that reduced overcharge complaints by 98 . No matter how fast your Business Needs to adapt, if hp Big Data Solutions can keep wireless customers smiling, imagine what they can do for yours. Make it matter. Iyou wouldnt have it do she any other way. Our toes. But your erectile dysfunction it could be a question of blood flow. 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Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. Chocwhite chocolate loversal. Dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow customers to customize their preferred chocolate. We needed a scalable Cloud Solution allowing them to select what they are looking for. Now there is endless opportunity to indulge. Customization is made with the ibm cloud. All right another push higher as we head for the closing bell, about 35 minutes left in the trading session. About 18. 5 points, kelly a way from dow 17,000. We are in record territory by the way. Were watching this new millenial mark we could hit today. June auto sales almost 17 million, were going to get more on that later. Right now we have to talk about something thats hotter than what we just mentioned, gopro. The stock that went public last week and four trading sessions has about doubled from its ipo price of 24. Is the move justified for a company that essentially makes cameras, albeit very cool strategies. Were joined by david nelson and gene urkin with the Progressive Management group. David you said avoid it initially . I did. I blew it, doug. The truth is i didnt do my homework. I read the income statement and i didnt really dig into the story and what i missed is that investors obviously have gotten this potential Hardware Company could morph into a media company, and that makes it exciting. Thats more of a story than the hard facts as you point out. Just go to youtube and look at the view counts on some of the videos, 30 million, 40 million. Views equals clicks, equals advertising dollars which eventually equals profits and if its just from users thats gorilla marketing. Here is whats unusual about this ipo. Its not the case where weve seen where some of the ipos like some of the Food Companies last year would double on the first day and then settle down. It has gained more momentum, doubledigit momentum each passing day and seems to have to do with the story. More people hear about this and maybe want to get involved. Is that ultimately a warning sign, gene . No, i dont think so. I dont see any warning signs at all. I think we shouldnt be shortsighted here. I think the company and the stock had some great days ahead. I think in the short term we may see some volatility in this stock, but longterm i just dont see any competitor dethroning gopro. Did they sorely underprice the ipo . Is that what youre saying . No, im not saying that. I think theres five key reasons why gopro is doing so well. To piggyback on kelly said, its hard facts. When gopro went published they issued 18 million of 12 million shares outstanding. This created a frenzy for those who want it post ipo which is driving up the stock price. Any time a Company Goes Public they do so with a Business Plan and gopro has executed that Business Plan and theyre being rewarded by interest in the stock and a higher valuation. Let me be clear, am i to understand in the four or five trading days since gopro priced and trading today, something about the details of this companys future changed so dramatically the price justifies having doubled . Youre telling me thats what justifies this and not that more people have in the newspaper are interested in this . I dont think people understand or really did their homework. Im one of them, raising my hand right here. Look at this company, the valuation levels are not obscene here. Yes it came public at 24 with a 3 billion market cap and scooted up to 6 billion. You look at Something Like a twitter at 30 times sales its not so bad. Are you going to buy it now . I would even add, too, that i think a lot of times invests take a topdown approach to investing like we saw with Gps Technology and i think many are now seeing the start of a visual revolution. I think also with the expansion of social media, and an active lifestyle, gopro users are able to take full advantage of their videos and also you know, when youre as popular as gopro, you become very, very important to retailers with better shelf space and the like. For example, you have one of the premiere Sporting Goods retailers on the west coast, they cover and carry gopro products since the beginning and prominently display them in their stores. So david, are you going to risk putting a cap on this stock and buy it right now . Have you bought it . I cant buy it here, bill. I would really like to. Youre going to be kicking yourself for months. Give me a break. I need an entry port at some kind. There will be some pullback. The one thing to be concerned about the First Quarter was down year over year, maybe it was part of the distraction of the ipo. Im looking at the second quarter, maybe that will be an entry. Gene a final point. If gopro is getting it right here, then who loses . Or are they just expanding the category, and this is what im hearing from you, ultimately this is an advertising plot. I dont think anyone loses. I think everyone gains from retailers to gopro. I think even competitors that joined into the pond, i think they have nothing but market share to gain, and i think its good for everyone. Wow. Thanks, guys. Thanks, guys. David dont take it too hard. Dont look at your computer monitor for a few days. Okay, bill. Thank you for joining us. Kelly mentioned the strong auto sales. Don hsu joins us to tell us how they looked in june. This is the data from auto data coming out and weve had a strong month of sales, the Light Vehicle rate of sales for june of 2014 is nearly 17 Million Units per year, thats 16. 98 Million Units. The same time ralast year, last june we were talking about 15. 9 million Light Vehicle sales. Now this is the highest reported seasonably adjusted annual rate or sar as people call it since july of 2006. Back then it was almost 17 million vehicles so were at the highest annual rate of sales since july of 2006, a very big deal especially looking for the auto sales as a possible indicator for the health, bill, kelly, of the overall economy. Back over to you. When it takes us back before the financial crisis that is something to keep an eye on. Gm shares are up 3 today. Pull back a little bit, the dow up 151 points. Thats record territory, isnt it . You lose count of the old highs. Today we set new intraday highs, were close to the new intraday high, which would have been 16,997, 998, something reilike that. We got 30 minutes left, plenty of time here. As long as were above 16,947 this will be a new record closing high, and as mentioned the dow near 17,000. Weve got wall streets top money pros to weigh on whether you should buy, sell or hold. Dont go anywhere. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. 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. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Welcome back. Less than 30 minutes left, on the left is the previous alltime high close by the dow set on june 20th at 16,947. On the right is where we stand today, so were in record territory, but were not quite dow 17,000 yet. Kelly evans . No, we still have 25 minutes to go. As the markets look to close at records, bob pisani joins us, simo modi at the Nasdaq Market site. We want to get perspective. Bob, half an hour to go, less than, do you think well get there . Its a little doubtful at this point. Im not that concerned about it. Bill had the right interpretation and bill usually does. Its about the intraday high and thats the important thing we hit a new intraday high. Well hit 17,000, just a matter of time. What we ought to concentrate on is what is necessary to move the market further or should it deserve to move the market further . I think it does and the catalyst will be better Economic News. Sima, we should be watching the nasdaq, up 1. 25 . Up about 1. 4 as you just pointed out but keep in mind it has been a volatile couple of months for tech stocks as investors question growth prospects, valuation also becoming a big concern. Weve seen a rebound in technology over the past two months. The rise in m a, corporate buybacks getting a lift. I think Going Forward earnings that will continue to play a vital role for wall street. Experts always say that. More so this quarter than previous quarters. Remember the past two previous reports were clouded by bad weather so we didnt get an accurate view of how corporations are faring. Rick santelli, if we had your version of u. S. Versus belgium here, which driz Interest Rates look more justified . Honestly, i think all countries Interest Rates are not justifiable based on the numbers. I think its very difficult to have that kind of mall red dot you are here and this is where youre supposed to be. I would say no matter how this turns out and i have to disagree with bob a little bit, i only look at closing levels as a technician. I think by the end of this year that the 30year bond will still have a better total rate of return than the equity markets and currently stands at around 14. 5 its interesting. Weve gone through 36 minutes of this program and havent mentioned the tenyear yield yet. Our attention has been taken away from that critical indicator weve been obsessing over lately to the stock market today. It definitely has. Remember all the heavy lifting for the total returns, 14. 5 for 30s, 6. 5 for tens basically happened in the first six weeks of the year. February 3rd the low yield was 257, that was significant. Its still significant but doesnt alter the fact that it is part of 2014. I am sure the back half of 2014 will see stocks probably not nearly as stallworth or tight as they were in the first six weeks of the year. You arent anticipating any backup in rates for the rest of the year, did i hear you right on that . I dont think that rates will close in negative territory and that would mean theyd have to close above 3. 03 for a tenyear. I dont see that happening. It is on the back of the stability that weve seen in the tenyear. The Mortgage Rates are finally continuing to creep lower. Zillow was saying theyre below 4 , 3. 98 was the average. Thats something again that has important bearings on how the market broadly performs in the second half of the year. We go back to the Interest Rate scenario. Well talk about this before, id trade higher rates and a lower stock market for better Economic News, better employment, and more coin in the average mans pocket. I would gladly trade a lower stock market from where it is right now. Bob pisani for head of the fed, please yes go bob what will matter is whether or not if we get a slow move up in rates or not, and thats why i asked rick about his thoughts on that. If we are 2. 5 now and we suddenly in the next because we get better Economic News in the next four weeks go to 3. 5 suddenly in a few days the market will have a lot of problems. If we go from 2. 5 to 3. 5 by the end of the year, i dont think the stock market will have a problem and rick, thats why i was asking you about your thoughts on that. And its very interesting, because if i had to say off the cuff not knowing what the data is, i would say stocks are going to have a hard time with a 50 baseis move in either direction for tens if it happens in the next six months. Even with the jobs report on thursday . Yes, i think a 3 tenyear is not going to auger well for equi equities. It might get used to it but it will be like natural gas, smell for a while, slowly disappears as the market gets used to it. Remember when it comes to the state of the consumer, wage growth and housing, those are the two data points experts say are impacting consumers willingness to spend. One of the reasons the s p consum Consumer Discretionary sector as the lagging sector this year. It was one of the worst performing sectors in the second quarter, yes, as we saw the closing yesterday. Thank you all. See you guys later. Busy day still ahead of us. 20 minutes to go. The dow is up 151 points. 16,978 is the latest level. About 30 points above the prior closing highs. We will probably be starting off the month and the second half of the year at a record close. When we come back, dominic chu has a look at the dows journey to 17,000. What a ride its been especially since march of 2009. And also coming up, investing legend byron wien on the stock market and if he thinks todays rally has legs. Tg faster than ever, we believe outshining the competition tomorrow requires 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. Why let erectile dysfunction get in your way . Talk to your doctor about viagra. Ask if your heart is healthy enough for sex. Do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. Side effects include headache, flushing, upset stomach, and abnormal vision. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. Stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. This is the age of taking action. Viagra. Talk to your doctor. Welcome back. We are 17 minutes from the close and 23 points thereabouts away from hitting the 17,000 mark, the dmg industrial average. All three indexes doing well today. The first day of the month, first day of the second half of the year, the vix bill is back sitting right around 11. No surprise there. The market kicking off the second half of the year on the high note, as the dow does approach 17,000. Dominic chu joins us with a look back on this journey to the new millenial mark and how far weve come since the market bottom in march of 2009. Going back to 2009 we put it graphically so you can see just how much its bounced back every time weve seen any kind of shock from outside the system here. Now if you go back to what well call the financial crisis lows, the dow hit a low of around 6500 back, thats now 54 , thats more than half below the 14,000 mark we were before the financial crisis, so it went and hit those lows, back then, 6500 on the dow. You moved forward here to april of 2011. Now were at a threeyear closing high just a couple years later, were all the way back up to almost 13,000 on the dow, thats almost a double from where we were at the crisis lows. All of that inside a couple of years. You fast forward here to october of 2011. Now the dip towards the end of 2011 here was the eurozone crisis. It seems like so long ago but it wasnt that long ago when we had the sovereign debt issues out of europe and we actually fell about 17 , almost 10,655, that was 17 from the highs that we saw just months before, and of course, we bounced back from that and here we are back up to june of 2014, were closing within about 100 points of 16,000, and that was just in june. All of a sudden were knocking on the door of 17,000 right now. Since 2009, the dow has seen a number of reasons to sell off, and it has, to a certain small degree, but every single time weve kind of bounced back and here we are again, knocking on that 17,000 level, its Pretty Amazing how reresilient its been. The question theres a catalyst built to get it going even higher. Dom thank you for now. 15 minutes to go into the close here. We are watching the markets very closely, bill, and looks like were about 15 points away. Will we make another run towards 17,000 as we head into the final quarter hour . Wither bea to find out. Markets looking to shatter records but anything can happen in these final minutes of trade so stick around. That plus a special edition of the second hour the closing bell coming up. Is a daily game of what ifs. What if my abdominal pain and cramps end our night before it even starts . What if i eat the wrong thing . What if . What if i suddenly have to go . What if . But what if the most important question is the one youre not asking . What if the underlying cause of your symptoms is damaging inflammation . For help getting the answers you need, talk to your doctor and visit crohnsandcolitisadvocates. Com to connect with a patient advocate from abbvie for onetoone support and education. Welcome back. We have 12 minutes left here. The dow is up 154 points. Were on of course dow 17,000 watch. We came precariously close, we were at 998. 70 art cashin tells us but pulled back since that time. Decent rally to begin the second half of the year. It certainly is. Lets get more perspective. Jeremy hill from old black companies, matt will join us shortly from virtual financial as well. Little bit of a scramble today. What do you think, jeremy . I think well go higher. This market probably has about 5 more through the year. I think weve seen some decent action in the last couple days and i this i that pour tends some good things Going Forward. We forecasted the second half of this year to be so strong so were already, seems like were picking up a lot of steam and we expected it to be stronger in the second half. If thats the case this market potentially could go higher. I think maybe we got ahead of ourselves. Bill i should mention art cashin stops by, there is a buyin program on the close that could help to lift markets toward that 17,000 mark these guys were just discussing. Matt, this is new money coming in to start the new quarter here but is it possible that when we get above 17,000 that that brings even more new money in or do people become a little more cautious because of that new level here . Well i think theyve been cautious all along, thats why they havent gotten in. If theyre getting in at 17,000 theyve missed some run already. If the market has any retracement they may be quick to pull the trigger on the sell side. I wouldnt be really so excited to see them get involved right now as far as the retail side of it. Jeremy, what about tomorrow . Were going to start to get the Employment Data for june with the adp report, the payrolls on thursday, and hear from janet yellen and what she says has a lot to do with whether we hit this mark and go substantially higher. Today the dow rallied more than it did the entire month of june. I dont think yellen will say anything new. I think the fed is really on hold right now. The jobs number probably comes in toward consensus. I dont want to equate this year to last year because that was a standout year, matthew, but this market again in 2014 has defied the critics or the cynics who didnt think we could continue hiring here. Weve also had a lot of people that have been on board in this market the whole way. Ive been one of the cynics all along. I didnt want to mention that but im glad you did. Any time i can, i will. So again, i think there are so many people that are on board and theyve made a lot of money. There is really no other alternative for people right now. Stocks are going to trend a little bit higher but i dont think its the broader picture people are looking at. Thats the thing that worries me, were so hyperfocused on stocks. When it does turn it could be very fast but it may not get there for some time. That seems like the 17 billion question in the room. Well leave it there for right now. Good to see you. Well take a break and come back with the closing countdown for what could be an historic day as the 17,000 watch continues. Well find out if history can be made. Youre watching cnbc, first in business worldwide. Stay tuned. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. We have a pretty good rally to start the year, the dow a gain of 141 points. This would be a new alltime high, anything above 16,947 will be the s p also in record territory and for the year, you look at this gain here as it continues to march higher, were at, in the last little over a year weve hit three millenial marks, we hit 15,000 in may of last year. We hit 16,000 in november of last year and here we are, knocking on 17,000s door. Back with jeremy hill and matt, and jeremy, you can, we all can itemize some of the headwinds that the markets will face as we go through the second half of the year, right . Absolutely. I mean, the biggest risk in my mind is clearly a mismatch between the fed policy and market expectations, and i think thats something thats going to play out over the next lets say six months, as perhaps we see a little bit higher Inflation Numbers tick pic up. Listen when bullard comes out and says something very different than other fed members are saying, it makes me wonder whether sherry allen can get it together and come out with a cogent policy to dial down the feds longterm monetary support, which is really still what markets are going on. Matt, it was what, two weeks ago when fed chair janet yellen said she didnt think stocks were overvalued, a rather unusual public pronouncement by a fed chair. Was that a green light to buy, in part do we see these rallies because somebody like the fed chair says i dont think were overvalued right now. With an accommodated fed its a green light for people to buy. Theyre not buying any other segment of assets right now. If you allocate your money to stocks, the stocks keep going higher, why not be on board with the person in charge of it all. Thats certainly a green light. Its funny to say that 29 or 30 stocks are up in the dow. Its a broadbased rally, not just one particular sector leading us higher and some of the stocks were the underperformers from last year are outperforming this year. We were making note of that earlier. Ibm the top of the list there, that stock has been dragging the dow for a while and today its the leader. Same thing with visa, and some of the financial stocks. I mean, jeremy hill, are we starting to, i know one day certainly does not a trend make but you wonder whether well start to see a turn in the interest of the market toward some of those laggards that could be considered cyclical for this economy. You have to remember, right, the dow is up around 2 for the year. Companies like ibm i think over the last 12 to 18 months have gone from being more growth value oriented to something that people are shorting on the back end of going long, things like google, right . Google growth, ibm not so much, old technology. So there are idiosyncratic restirisks associated with the dow constituents. The dow components make upwards of 40 of earnings offshore. We have to talk worldwide as well. Matt, this rally bodes well for the ipo market. Gopro has been on the go since it became public last week. Youre getting ready to trade alibaba this summer. We had an upgrade from barclays. Com. Ipos have performed well from Chinese Markets so theres no reason to think that will slow down in the summer. Were ready for fireworks fourth of july. With gopro all systems are go right now. What could pop the bubble here . I dont want to say its a bubble. Thats a bad word to use. What could stop this rally in its tracks, matt . Is it going to be earns from the previous quarter or expectations of the second half being so strong and well not be able to meet the expectations . Something like that. Weve had geopolitical stuff, oil rallying and the gas prices and consumer slowdown. All of these things havent put a blip into the market. I wish i knew what it was, bill. Dont we all . Doesnt look like well hit 17,000. Jeremy hill, do you think we have to grind through for a little while at the 963 right now. I think we get there in short order. The headwinds facing the market right now, as matt just said, there are no unknowns. So i think were going to get there and i think well get there soon. All right. Very good, thank you, guys. Appreciate your comments here. Were going out pretty good rally to begin the second half of 2014, no dow 17,000 but still a healthy gain especially for the nasdaq up 1. 16 on the close. Stay tuned. Ill be back in the next hour as well as we get under way with the second hour of the closing bell with kelly evans and company. [ bell ringing ]. And well comment to the closing bell everybody. Im kelly evans. The Dow Jones Industrial and the s p 500 today on the start of the month and the beginning of the second half of 2014 are closing in record territory. Here is a look at how were finishing up the day on wall street. Green arrows across the board, echoing what we saw overseas. The dow adding about 130 points off the highs of the session and considerably so. The nasdaq adding 50 points, having a strong day over 1 . The s p up 13 to 1973. Lets talk about it with the panel. Who better on the market day like this than bob pisani who is here, welcome. Danny hughes, founder and ceo of Divine Capital is with us. Eunice yu in the house from beijing, Sharon Epperson to talk about markets, brian kelly, fast money trader. Theres a lot to discuss. Brian are you surprised instead of getting closer to retaking the 17,000 mark we gave up a little bit of ground there at the bell. No. We barely gave up anything and the 17,000 mark for me as a trader really doesnt mean anything. Whats most important is that over the last several days, weve seen some pretty good economic numbers globally, europe pmi, china, chicago yesterday, all in all were seeing a Global Economy that appears to be improving but importantly not too fast. Because the big risk here is we have a big spike in Interest Rates and we choke off the recovery. Were far away away from that and thats whats important. Eunice, the trading day starts before 30 a. M. Eastern time and had a lot to do with the data out of china. Over there its actually definitely improving. We saw manufacturing data that came in for the pmi and it looked better than people had expected and that is setting the tone for the second half of the year. Everybody says look at the new orders. They came in very strong. That indicates there could be a better recovery in the United States and thats what everybody is hoping for. When does the average investor believe that . Still the shanghai market down 3 on the year, its been underperforming for years. When is it going to get to those because shanghai is more of a gambling den than it is regular marketplace. A gambling . I thought thats what we had. The truth is i a lot of it has to do with the Central Banks, thats where we owe all of this. The sort of elementary point that might be important, there is a difference between investing in a stock, a stream of future cash flows and doing things like betting with options, potentially betting on commodities. If you want to talk, because people will look at the headlines, theyll look at dow 17,000 and talk about whether its a castle built on sand or air or whatever. Yes. Is it or is it not . A lot of it has to do with the fact Retail Investors arent necessarily jumping in this market. Theyre looking at the new highs and saying does it make sense for me to get in . Thats not necessarily a bad thing if theyre sitting on cash for the right reasons because they watch what happened in 2008. They want to make sure they have money saved for emergencies, want to make sure theyre paying off debts. If theyre not tying up money for investments, they cant get their money in and out thats a good thing. If theyre totally missing out on what continues to be a runup thats a negative. Have we lost that many people since 2008 . We talk about the investor on the sideline. Almost 50 of households were invested in stocks prior to that. Is it that far off now still . About 50 are still sitting in cash right now. But again thats not necessarily a bad thing, if theyre doing the right things with that cash at the moment. I think the good thing that were seeing though a lot of folks are saying i want to be in the market but maybe in a different way. Theres a new study that came out from fidelity showing what people want right now just as much as a 401 k , they want their company to give them stock at a discount. They want to get in the Company Stock purchase plans so those are things that are taking off and in addition to what theyre doing with their traditional. Its great as long as its not too much a part of everybodys investment. Lot of people made that mistake in the 1990s. All their eggs, when your employer is also your biggest investment. Youre probably putting all your eggs in one basket. What about the fact that, brian kelly, when, gauging what happens on the first day of the month, especially when its the first day, second half of the year, this tells you something about positioning . Do you think thats the case here . It can somewhat. You see some kind of window dressing although i think thats a lot less than it used to be. We have plenty of buyers. Whether people are on the sidelines or not its irrelevant. Ultimately if they come in, great. The longer term you have an aging u. S. Citizenship and theyll ultimately not invest like they did in the 90s. Im trading in the now, were going high. Danny i want to go back to something you raised and James Macintosh had a short view, its not unusual to see stocks rallying. All the stocks rallied at the same time and doesnt that tend to happen during periods right before theres a more troubling market, is it a sign perhaps of all of this intervention that were seeing in the central bank . Weve seen an actual war going on between the stock market and the bond market, because theyre both kind of predicting different outcomes, right, and of course im rooting for the stock market, thats kind of where ive placed my bet, and a lot of other people have done the same, but theres a lot of worry, and i think that we see that in the bond markets, and especially longterm yields, because you really dont know, because the central bank really controlled so much of this and i think thats a big concern. Do you think the lower Interest Rate environment now that people are really betting on it, it will last for some time that that would emboden Retail Investors to come into the stock market more . Its emboldened corporations to buy back their stock. You see an awful lot of that. They see historically theyll never get the chance again so thats another risk. The obvious point the zero Interest Rate policies, why is gold up 9 , why is the bond market up, the stock market up, were all at zero Interest Rate policies. The issue is in the second half of the year, can we see a gradually improving economy, can we see Interest Rates go from 2. 5 to end the year at roughly 3. 5, and can the stock market hand tell . The thing that makes that difficult is people told to diversify is because of everything rising as youre saying. That makes it difficult for investors to figure out how am i going to diversify if everythings rising at the same time and the same catalyst is lifting off those. Thats a good problem to have, isnt it . Until it stops. A year and a half weve been waiting, how long has it been . At least a year and a half. But thats exactly the point, investors really shouldnt be waiting for the next shoe to drop or waiting for the back they should be looking at the longterm. Longterm this is what always happens. We see dips but if we have the hindsight Warren Buffett had in 2008, this is a huge opportunity to gain value over the long run. You never hear Warren Buffett necessarily blaming the Central Banks or overly inflating asset prices. Obviously evaluations will fluctuate and he likes to go to work when perhaps because of intervention theres been a crash, but i dont think he today, and hes been quite clear when he talks of the market being fair value, thinks its all some kind of giant, you know, to your point, is this just some sort of false construct or not . I dont think hes the guy who comes out and says its all false. Companies are doing better, theres real wealth being made here. This is not a ponzi scheme and when i said before that it is gambling, look at High Frequency trading. They were investing in the stock market, theyre in and out and that to me is gambling. Its one thing to say its not false but the fed has had an influence on the stock market. All of the Trading Community believes this. I ask the average trader, how much higher or lower in the stock market if the fed had not intervened in the last four years. Average trader response the dow would be 2,000 points or more lower. Whoa. That may be right. That may not be a crazy comment. I put a lot of stock in storage as average investors calling. Brian kelly, does that sound about right . No. Its so hard to go back and prove that counterfactual. I would argue we might be higher if the fed didnt come back. Maybe we would have flushed the waste out of the system and be able to rebuild. Thats an interesting point. On the foundation. Thats difficult to go back and try to say thats whats happening. We have to leave it for some news but eunice, before we go, i want to get to the two of you quick thought. Brian we have payrolls and yellen here in the u. S. That are important to watch this week but also out of china, what is the number one thing people have to be aware of in terms of catalyst to go one way or the other . People are watching to see whether or not the government will come in with more stimulus because now a lot of people had actually hoped the government was going to stick with reforms and not necessarily pushing so much money but now were seeing more and more mini stimuluses, targeted stimulus but at the same time it looks like it could happen. Lets get the news and get a quick response. It has to do with google. Morgan brennan, what can you tell us . Hi, kelly. The next round in the music streaming wars, google is acquiring songza. Price undisclosed. Songza says their 40person team will be joining google according to the chief executive over there. Songask a streaming music app has about 5. 5 million users so its relatively small compared to pandora or spotify. Well bring you details as they come. Morgan, thank you. Brian, what do you think . Id be worried if im pandora. Everybody says they have a dominant share, part of the market but when google enters the marketplace its kind of like when amazon enters the marketplace. They dont have to necessarily make money at it. Trade on this is watch what pandora does. Theres multiple streaming services that have come out over the last couple of months. Theyre heavily cure rated market site. Its saturday morning, youre in the mood for mellow jazz. Remember you may or may not wake up to britney spears. Go ahead. Its not bad at all. Im in an aggressive mood, a mellow mood, its sunday, i want to listen to jazz and its curated and you can pick it and its very good. I think Health Insurance companies should underwrite this, psychological conditioning. Brians right the fact that google bought in, i dont know how to value the company at all. If google buys into t i would be concerned if i was pandora. Brian, thank you for your perspective. This hour well watch companies and do traders think the rally will last and take us as high as 18,000 before christmas . The guys on the floor will chime in next and plenty more coming up on fast money with brian kelly. Well be rig rige right back. Cd something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. We almost got there, 16,998. 70 was the intraday high. For more on what dow 17,000 means lets bring in two traders from the floor of the new york stock exchange, warren and kenny, with the panel of course as well. Warren, what are your thoughts . First of all im hugely disappointed we didnt break through the 17,000 level. We got so close. All kidding aside, i think its been a tremendous runup as the market continues to go higher, set new records almost on a daily basis and this week in particular tends to be a very strong upweek anyway so i think we kind of had the perfect storm of expirations, pushing the market up and coming into a shortened week that tends to be upward i think were poised for new records. Okay and perhaps if it didnt happen today, kenny, what, tomorrow, this week, takes a couple weeks . Listen, i think today was a little bit of a reaction from the end of the quarter, right . The market had been under kind of some pressure as we moved into the end of the quarter. Today was the first day, theres three more months in the whole quarter. You could almost feel the pressure lifted off the market. We went up on not a lot of volume nor was there a lot of commitment. I absolutely think well go to 17,000. You could almost taste it today at 998. 70 is where we really got and it backed off. It feels like it wants to try. It has to do it one or two more times before it finally builds up enough momentum to get up and through. I think youll run into some real natural sell side at 17,000 and above. I think that is going to draw some people out to raise some cash. Is this kenny the market top . 16,998, what does that mean . When was that, kenny, exactly . At 1 30 this afternoon. Who was on at air, whose face was there when we hit two points from 17,000 . You and me . No, it was you. It was you. So im not superstitious. Im just suggesting please dont come on the air, do us a favor for crying out loud, weve been waiting all day for this. Look what you did. Warren, would you like to say anything in kennys defense . Well, lets keep him off the air during the day. And also to bob, im surprised you even saw that we were near records today. I thought you were home listening to soft jazz. Thank you. There actually is something i know nothing about, thank you very much. I think the question today is going to come down to whether this was positioning, twas some of the data, the ism report which is a little bit soft, but markets took it it pretty well. Is it anticipation of what we might hear from janet yellen tomorrow. What is the mick, guys, do you think between positioning sentiment and the fundamental data driving us higher, warren . I think its a combination of a few things. First day of the new month, new money coming in. I think we would have been up today anyway but that pushed us to the levels we reached earlier. This tends to be an up week. Were coming off of that end of the quarter expiration. I would be a little concerned going into the following couple weeks on elevated levels and i think were due for a little bit of a respite on the upside. Sharon . Can i ask how much the 17,000 really matters . Nothing. Particularly on a holiday week, particularly when a lot of folks may be out of the market right now, and what is really the next driver that regular investors should be looking at, do you think . I dont think 17,000 means anything. Its a nice round number but in reality, what does it really mean . It means nothing, right . But the next couple of drivers are going to be dont forget, earnings will start next week. Well fully expect earnings are going to come 4 growth is what theyre looking for this earnings season, this cycle. Well see 70 or 72 of the Companies Beat the estimates like they always do, well listen to Forward Guidance and janet yellen tomorrow talk about how rates will stay low forever. Dont anyone get nervous and boom, the market will continue to move higher if thats her message. Take your point, thats probably what shes going to continue to reiterate, danny. The risk is out there. You know the fed is looking at the extent to which markets have been on this record run and just making sure it doesnt get too ahead of themselves. They have to be really careful and not say irrational exuberance and earnings dont happen for a little while so we dont really have that catalyst. We have summer, which traditionally means everybodys off the floor and often away from their desks. Im actually looking at whats going to happen in the next couple of weeks to keep this going on, and new money is great. What is the biggest, i was going to ask what do you think the biggest risk is that would really scuffer the momentum . The geopolitical risks is the biggest one and theres an awful lot of potential for that to happen. Its easy to poopoo the dow 16,000, 17,000. It reminds us the market is creeping higher. Thats why its important. Warren, kenny, good to see you, i think, on this big day. Please, kenny stocks have been leading the rally from 16,000 to 17,000. Number five, cisco systems, the internet equipment Company Stock is up more than 16 . Coming in at number four, merck. The form ceutical giants beganed more than 20 . Number three on the list, intel, the technology Company Stock rose nearly 23 . Coming in second, media giant walt disney, up nearly 24 , and the best performing stock since the dow hit 16,000 . Caterpillar. The Construction Equipment manufacturer stock is up nearly 33 . But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. If yand youre talking toevere rheuyour rheumatologistike me, about a biologic. This is humira. This is humira helping to relieve my pain. This is humira helping me lay the groundwork. 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Talk to your doctor. This is humira at work. At every ford dealership, youll find the works its a complete checkup of the services your vehicle needs. So prepare your car for any road trip by taking it to an expert ford technician. Because no matter your destination good maintenance helps you save at the pump. Get our multipoint inspection with a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup only at your ford dealer. Welcome back. The dow and s p 500 closing at record highs. Dom chu looks at the key stocks driving the market higher. The dow underperformance since that point if you look at where the nasdaq has come its up about 12. 5 since november the last year, the last time the dow hit 16,000. The s p 500 is up 10 , even the russell 2000 with its ups and downs is up 8 and here we come to the end of line, the dow is only up 6 since the dow first hit 16,000 november of last year. So if we were to have this conversation about dow 17,000, we would be talking about dow 17,600. Dow 17,600 is where we would be right now if the dow had just matched the s p 500s performance since the dow first hit 16,000. So its been an underperformer. You can see that gap on the righthand side, thats where the gap, thats the gap were talking about, the idea that the dow is underperforming the broader s p 500. Now, before the break, we showed you the great clip of the stocks doi ining better, caterpillar, disney, intel, merck, cisco, all of them doing spectacularly, but heres what we want to call your attention to. This is whats been weighing the dow down, the reason why its been underperforming, its been big names on the consumer staple side, Procter Gamble is down 6 during that time just since november of last giant pfizer. Walmart the biggest retailer in the world down 5 , boeing down 4 , verizon down 2 . The boeings and Procter Gambles have weight with the overall dow because theyre priced higher, they have bigger stock prices. If youre looking for why the dow has been underperforming since 16,000, these are the stocks that are doing it, and a lot of the reasons why we are still trying to get over that dow 17,000 mark. Kelly, back over to you. Goldman weighing on the index today. Stand by we have breaking news ongoing insider trader case. Scott cohn joins us. Ranger rat234 ams younger brother rangan has been on trial. The judge is dismissing allegations involving insider trailing of clear wire which would seem to leave the case as just a conspiracy count against ranlg aratnam. The case continues in u. S. District court in manhattan. More as we get it. Back to you. Scott so some charges dropped for now in this case, appreciate the update. Lets get more on the big market trading day. Richard is a little more cautious on the panel joins us. Rich first to you. Lot of people lately have been talking about the capitulation of the bears, about sentiment showing that everybodys looking higher for this market to keep going. You dont agree with that, still youre cautious here . I think the only thing we have to think about, kelly, is that in order for the dow or s p to go higher, earnings outlook with Conference Calls is going to have to get better. Right now the dow is trading at 15 times this years earnings, 14 times next years earnings, on 8. 5 eps growth. The s p earnings for next year 119. Analysts are at 132 next year, thats 11 growth. So unless we start to see some really positive statements coming out, we think this market needs a rest. Otherwise if things do continue to be positive, then investors will start to flick the switch to 2015 earnings and then we could start to look at maybe higher levels. What is your view . How much higher can corporate earnings go here . The numbers i use are s p bottomup operating earnings a little bit above 137 for next year. Theyre clustered around 120 for this year, so theyre somewhat higher than your other guests. The strength right here though, kelly, should be of no surprise. Since 1950 the s p has been up, the two days at the end of june and the first five days of july, 72 of the time. So the strength here is no surprise. Once we get into midjuly and late july, i tend to agree with your other guest. I think that is seasonally when you have a chance to get some weakness. Jeff, what about people who dont want to be trading on a couple weeks basis and want to take a longer term view . I think were in a secular bull market. Ive maintained that for years. I was on cnbc on march 2nd of 09 saying that the market bottoms this week. That was the nominal price low, we made the valuation low in october of 2011, were five years into it. The history of these markets when they come out of a multiyear trading range environment is they usually have eight to ten years left in them. We have years to run left in this secular bull market. Wow, great news for Retail Investors and folks with their 401 k if theyre staying in with what we have, dollar counts averaging in. I wonder how many people are sticking with it and how many people may be jumping into some of the perhaps the wrong stocks for their particular portfolio because theyre looking at the momentum. Rich, what do you see out there . We invest for one of the large retail brokerage clients and were seeing clients that have kind of missed this are waiting for the pullback, and our point is, you should be invested but with what incremental cash it does make sense valuationdriven. The utilities as an example in the dividend etfs now compromise 35 of that index, so a lot of money is going and looking for yield because cash is trash, so i think investors just have to be selective, stay invested but be careful with the incremental cash. Rich, you made a very good point. Lot of people waiting for the market to drop to get on the sidelines. Is there a bit of a floor underneath the market . Weve been talking about this for a year and a half. Every time we drop 3 buyers come in. Thats why were not getting that 10 correction. Bob, i think youre right. We think that the market could pull back to that 1900 level, which would justify again until investors flick the switch, but there will be a floor in the market. What weve done at the firm is we put a little bit of a hedge on just to protect ourselves and were willing to take a little bit less of the upside but not be out of the market completely. Thank you for your thoughts this afternoon, appreciate it, guys. You bet. Up next more insight on the rally from two guys, who have been taken cnbc through 14,000 points. They joined in 1991 quen twhen w was just shy of the 3,000 mark. Which stocks have lagged in the run from 16,000 to 17,000 . Take a look. Coming in at number five, verizon, the telecommunications Company Stock is down nearly 2 . Number four, boeing, its row space companys lost nearly 4 . Number three on the list, walmart. The mega retailers down nearly 5 . In second place, pfizer, the pharmaceutical giants lost nearly 6 and the worst performing stock since the dow hit 16,000 . Procter gamble. The consumer goods Company Stock is down nearly 7 . O f. The performance marque from lexus. Welcome back. We didnt close at 17,000 but the dow closed in uncharted territory. Imagine what it would look like if Retail Investors got off the sidelines. What will get them into stocks web the Economic News convinces the average guy that the economy is really getting better. Thats whats going to do it. What would convince them of that . If the jobs report on friday for example would bring it closer to 300,000 jobs rather than 230 were expecting and we got other data points over the next couple months that were above consensus. That would land the improving economy on the front pages of the newspapers and the headlines economy showing signs of life would follow from that, and then should you get back into the market . Headlines would follow from that. This isnt going to happen overnight. Its a gradual process that unfolds over several months. The talk the average guy gets in at market tops and its a bad idea. Thats a legitimate question but we should have that problem. Im dying to address that. If rates creep up in a manageable fashion the stock market will not have a big problem. We could have a big problem if theres a sudden draumt dramatic spike in rates, to 2. 5 to 3. 5 in a few days on the tenyears, thats a big problem for the stock market but i would gladly trade a drop in the stock market from where we are now 10 even for an increase in jobs and more money than the average mans pocket. Sharon, ill bet you you would trade that, too. Definitely. Thats what people want to see. The problem is that theyre not getting involved. Theyre on the sidelines and not, if theyre managing their money because they have debt thats one case. The other case is theyre terrified about 20082009. Rather than getting in slowly over time, payroll after payroll, putting money in the market, theyre not doing that. Thats the easiest way to do it. With that Historical Perspective lets ask are we going to ask, yeah, take a little, are we doing a little walk down memory lane here . Lets do it. Take a walk down memory lane. Ask us anything. It is good to see you both. We started long before you guys. We were just sitting here chatting. Possibly before you were born. I meant right now discussing all of this. By the way we both started at cnbc when the dow was around 3,000, but we started our careers before the dow was above 1,000. How does 17,000 ring to you . Its kind of nice. The market is playing catchup. Weve seen this before, gold i think is a telling example, where it hit, what, 800 in 1980 and fell back and did nothing for decade or more, even though the inflation rate continued higher, and adjusted for inflation it was vastly undervalued. It had a decade of a huge rally where it played catch with that inflation rate. The nasdaq is doing the same thing right now, it hit the alltime high in march of 2000, hasnt come close to that but now were marching back to that as well. I think thats what the market, the stock market is doing right now, just playing catchup after the lost decade we had between 2000 and 2010, and the financial crisis that hit at the end of that period right now. Were just trying to play catchup to the economy here. Ron, is that how you read it . Thats pretty much how i read it, with respect to the fact also that listen everybody is complaining about valuations and yet the dow and the s p are up roughly 175 from the march 9 flows of 2009. Earnings are up about 180 in that period, Interest Rates are still at zero. You know, its hardier in the d legitimate bear case when Interest Rates are not likely to go up probably until the end of 2015. Inflation is not accelerating in a meaningful way, and not in an area the fed can control so i think when youve got zero percent Interest Rate policy in nearly 60 of the globe the wind is at the back of the market and earnings are Strong Enough to support prices. Were showing a chart that looks like a two or almost threehumped camel. People look at that, i dont know if. I can stomach that volatility. Thats what you were talking about. Going back to what bill said we started when the dow was at 1000. When we spiked up in 1986 and 1987, the alltime high in august of 1987 was 2722, we had gone up 1,000 points in a year, crashed 30 in two months and again, listen, not everything is a buying opportunity. There are times you step to the sidelines, when there are, you know, signature events that would indicate a meaningful correction or a bear market. Rates are not going up. The message from the whole period then, we want to get a quick thought from the panel, too, is what im hearing from you guys is stay involved, stay invested. Easier said than done though, kelly, because my parents grew up in the depression. They very well remember the market crashes of the late 1920s, and where it went after that, and they never bought a stock their entire life because of that. I think we have the possibility of a generation that will feel the same way about the stock market because of what happened in 2008 and 2009. Will we get this tremendous Public Participation in the market . Not right now, and i think its because of this memory that people have. Were already seeing that with millenials. Theres post Traumatic Stress in the Retail Investor because 2000 was the dow and the nasdaq went down 70 . To bills point, i love this, bill, you know how long it took the dow to recover its 29 highs. 25 years. 1956. Thats one thing when people are out of the market but in this case, the repound has been precisely the opposite of that situation. Ron and bill, i was in 1990 hired by cnbc, i was the real estate reporter and when i got there these two guys were already market veterans. Lot of what i learned from the early days becoming the stocks reporter in 97 i learned by hanging out with these two guys, thank you for still being with us. We join those thanks as well and thank you for joining us this afternoon. You want something, bob. I dont know what it is. He wants to you buy a house. See you later. Bill and ron, thank you. See you tomorrow. Bill, see you tomorrow. Up next someone who has seen records come and go, veteran market pro buyon wien, the vice chairman of blackstone advisory partners, when we come back. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. And our luggage was immediately. Taken to. Stolen from. Our room. The Hotel Manager was clearly behind it. He was such a. 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Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. Welcome back. Joining us is byron wein, vice chairman at black stone advisory partners. Byron, its great to have you here. What do you make of the performance weve seen thus far and how things look for the back half here . I said the first half would be more difficult, and i thought wed have a pretty strong move in the second half, and maybe wed started to do that now at the beginning of the year i said i thought the market could be up 20 for the year. It was up 6 for the first half. Let answer see if it can make another 14 between now and christmas. Are corrections extinct, byron . No, were always going to have corrections from time to time but the overall trend is positive. Market valuations are not at a bubble level. Bubble level is 25 to 30 times, at most 17 times, the market can sell at 10 20 tim20 times the 1 500, operating earnings estimate is 2300, i think we can reach that level. Its interesting to hear you say that, that 20 times as a multiple is reasonable because weve had Robert Shiller on the network in the last couple of weeks saying when we get mull tips in the range of what were now were already flirting with historical highs. Has a different way of looking at it. He looks at normalized earnings over a decade. I look at operating earnings on a trailing 12month basis, and thats somewhat different. So he has within his formula or methodology the sharp earnings decline of 200809. I think thats behind us. I think were in a period of slow secular growth, and i think the market can trade at 20 times current operating earnings. And i would like on this note to get your reaction something Larry Summers said on our show yesterday, have a quick listen. I dont think that we are yet in a bubble. I think obviously credit spreads are narrower and thinner than they used to be, certain asset prices have inflated. I think we have a real challenge, which is that its not clear, given the way the economy is structured, what the longterm normal level of Interest Rates is going to be. And my suspicion is that its going to need to be lower Going Forward than it has been in the past, and obviously when you have lower rates, that creates more capacity for people to overstretch themselves, for people to reach for yield. What do you think about all of that, byron . I think larry is, doesnt recognize that stocks compete with bonds, and when you have very low Interest Rates, that usually leads to a higher valuation for equities. So these Interest Rates and even if Interest Rates were to go above 3, until they get to 4, the present Interest Rate level supports a higher pricetoearnings ratio for the overall market. Thats to some extent what he was saying. I think one thing that i hear a lot from investors today is theyve all kind of come to terms with this idea that rates may stay lower so stocks are going to be higher, and then perhaps were not at the end of that move. The question that remains out there that Larry Summers was alluding to is what do you do or do you worry then about the market getting too overvalued . Well the way larry was expressing it, he was troubled by the fact that people would reach for equity performance, and what im saying is that the market is not yet at a blowoff. It is true that investor optimism is pretty high, but i dont think portfolios reflect that optimism. I think a lot of people are still cautious about the market. Absolutely. Just want to ask a weird question, not that these arent all weird questions but in any case, is there a way in which this ends that doesnt involve the stock market sharply correcting, losing substantial amount of its value and repeating kind of the credit womb cycle that weve seen now play out the last time around . I think a geopolitical event of some magnitude could unsettle the market. I think thats something you have to worry about, but right now most of the things that could trouble the market, Interest Rates are likely to say low, as larry points out. Europe is growing, its out of its post recovery recession. Its moved away from us. I came back from two weeks in europe. I think europe is going to grow at 1 , could grow at 2 if they had a more expansive Monetary Policy. I think china is a problem, but i dont think theyre going to have a hard landing. I think japan is doing much better, and i think the middle east situation will stabilize. Byron wien, its good to hear your perspective this afternoon. Thank you for being here. Thanks for having me. Not everyone is so bullish on this stock market. Larry gl larry glazer is here with a warning, next. E more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade, our passion is to power yours. [ female announcer ] f provokes lust. It elicits pride. Incites envy. And unleashes wrath. Temptation comes in many heartpounding forms. But only one letter. F. The performance marque from lexus. Whether its for individuals or fortune 500, larrys worked with all of them on this bull run. Larry, it sounds like youre not a. You know, in honor of our nations birthday, july 4th, its my patriotic responsibility to point out some of the problems were having with this rally. Its not great when you see shortterm Interest Rates at lows and its certainly not great when you see volatility at historic lows. Theres questionable Economic Data out there with First Quarter gdp thats contracting and we have massive political concerns all over the place. So because of that you have an eyes wide open market. You want to see the potholes and land mines. I want to get the panel first, but before i do, where are you putting all this money to work . You have to be careful. Its not game. People get a little sloppy when they start chasing the market and thats whats happening right now. Valuation is determined by earnings. What are you telling people . Cash . No question. Look. There is some value overseas. What is the balance overseas . Okay. Emerging markets still look cheap. Dividend pairs will give you support. Theyre not only expensive but theyre volatile. Theyre volatile. Look, everythings volatile. Nothings volatile. Pick your poison. You should be concerned. Larry, isnt the problem that youve enunciated here well known to all of us . We make light of the fact that its the bull market of all time. The professional investor hates the rally. There are people at ideological war with the fed dieing for the market to go down just so they could prove they were right after all. Youre right. Theres tremendous amounts of people who hate the rally. Isnt that the best thing . When you look, if youre a bull, you actually want the 10 correction. You want the market to pull back to put the money to work. Valuation is an issue. This market is as expensive as it was at the peak in 07. If you look at praise to ratio, its not cheap. Valuation does not matter. We want to conveniently check that. A lot going into the second half o the year saying now is the time to reallocate, now is the time to diversify. What does that mean . Where are you supposed to allocate the money to . Where would it be . Its rebalancing. Its so simple but nobody does it. If you have small caps that led the market, thats the area. Tame some money out of the names. The second half of this year may be a mirror image of the first half. You saw a rebound in the commodity names that were decimated. Thats why you want to be rebalancing. Financials, believe it or not, as a sector, have had a pretty good recovery. They can take profits. Dont be afraid to take profits. Look. You can rebalance. Appreciate the pushback on all the hoopla. Up next, well get the final thoughts. The dow pushed to 17,000. Dont go anywhere. Tdd 18003452550 there are Trading Opportunities tdd 18003452550 just waiting to be found. Tdd 18003452550 at schwab, were here to help tdd 18003452550 bring what inspires you tdd 18003452550 out there. In here. Tdd 18003452550 out there, tdd 18003452550 there are stocks on the move. 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With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of Fidelity Investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. I want to get some final thoughts. Bob, the move as we pointed out took a little while, and, oh, by the way, theres a financial crisis in the middle of it. Since then its been steady eddy. Thats the last time we moved steadily up. Second half of the year, lets get some better Economic Data. Thats the number one issue. Lets see the 2 1 2 percent yield. Theres my wish list. We start to get jobs stuff through the rest of the week. What are you guys watching, danny . Jobs is what were watching. I also watch ipos. Just some numbers real quick. This year 273 issues were announced. We raised 27. 57 billion. Thats compare that to 1999. 636 issues announced with 746 billion raised. Were not there at all. Alibaba is coming but it wont get us there in terms of number, even close. But i have to agree with bob. U. S. Economic data thats very strong. Thats what all Global Investors are looking for because they want to say this economy is actually recovering. Its real. And so thats going to put legs into the rest of the markets. Its so true. The conversation where you go is all about whats going to happen with the world. Sharon . Definitely true. A lot of folks who think they may have missed some of the runup, theyre not the big drivers like the dow drivers today, ibm and visa. Well, you probably have ibm if you have a Stock Index Fund but even visa. Thats in major 401 k plans. A number have that in their plan. So that means you wont too. Sometimes when were talking big drivers, a lot of people think they have them that. I likely have them in their 401 k and mutual funds. Let me say real quick, gas prices are going to hit people in the face while theyre traveling. Is that a big risk factor, bob . Yes. We saw it seven times. I think its definitely an issue. Thats why lets get the issues in the middle east more control. Be safe when you are traveling this morning. Good to see everybody. Fast money is up in just a few moments with melissa lee. Whats up, melissa. Well give you top stocks to buy and top stocks to sell. Over to you. Thanks. At times square, im melissa lee. Stoxx closing no at 17,000. Our traders tonight and its not just the Broader Market rallying. A number of individual names, netflix, 3d systems. Three of the sectors that led dow to 16 to within striking distance of 17k. Can you still make money in these cases . Brian, what do you say . I think you can. You let your winners run. If tomorrow morning were talking about what do