Transcripts For CNBC Closing Bell 20140903

Is he concerned about the runup in the face of the turmoil . Well ask him that among other things. And google is taking a quantam leap into Artificial Intelligence. Why they are at the forefront of making machine that is will one day think and feel for themselves. I think it is fascinating. They are not telling us where they are going with this, but i cant wait to see when they get there. The singularity is near, bill. But none other than ending badly for the human race, well find out what google is up to and hear both sides of the hot a. I. Debate. Im surprised hes skeptical. If anybody knows something about Artificial Intelligence i think hes scared. Thats the thing, hes not skeptical. Heres how we stand after the beige book came out, the dow is virtually unchanged right now down just two points after opening higher after the ceasefire between russia and ukraine. Well talk about that. Whats getting hit today is the nasdaq. And to blame apple for that and much of the decline, is apple related after an analyst on wall street said it was time to take profit . So the market is apple and its having the worst day today since late january of this year. And mixed in all of it, the s p which earlier in the session was at a new intraday alltime high. Its off that right now, four points away from the alltime closing high. Well talk about it all in the closing bell exchange. We have jack here with us and rick santelli, there are a lot of things for the market to keep an eye on right now. I think what we are doing is waiting. We want to hear what mario draghi has to say. But this market, the path of least resistance is up. Whether you look at it fundamentally or technically, abby and rick, you are the technicians out there. Last month was the outside month. What that means is a lower low than july, a higher high than july, we ended up finishing higher on the month. Thats a very bullish formation. Hold that, we have breaking news. Hang on a second, guys. We have news on tesla. Phil lebeau is back with that. Tomorrow theres an event in nevada with tesla at this event, they will officially not saying what this is about, but there are reports from dow jones that tesla has chosen nevada as the location for its new gigafactory building lithium batteries. Its a 6 billion investment expected to bring 6500 jobs. Now we are being told by dow jones that nevada is the site for the gigafactory. Tesla is not confirming the report but we know tesla will be at the Economic Development announcement tomorrow in nevada. So read between the lines if you want to. We know nevada is the site for the gigafashionry. Battery is the holy grail of those cars. Speaking of phil lebeau, steve liesman, phil lebeau was on ten minutes ago talking about for the first time im sorry, it says it right here we have steve liesman. But hes not there. Look at that. Prioritize this for us, everyone is pointing to a different fundamental thing right now. We have the jobs and the ecb meeting and the problems between russia and ukraine. We have the fed policy. Whats important to you right now . Im watching apple very, very closely because this is a brand built on trust. And i think the naked selfie scandal is not in damage control right now. The company has not put anything forthcoming out there to give the Public Confidence given thats 8. 7 of the nasdaq. Im worried thats going to transition to the broader psycholo psychology. I think the earning is good and the fed is involved, the ecb and bank of japan, they are all playing the game. I want the upside but apple does concern me today. Thats a bellweather then for you in this market. Absolutely. They have a big announcement coming out next tuesday. Barring any phenomenal upside that i see there. Im actually expecting analysts to say, you know what . We are going to rethink the fact the stock is a buy. That could be a tipping point. Wow. Abigail, what do you think of that, and particularly, what are you paying attention to right here as, on the one hand, we have concerns about apple and then on the other hand, phil lebeau comes out a few minutes ago to say auto sales have recovered to the highest level since 2006. Michelle, it strikes me as we have a lot of extremes going on here. And what stands out to me are the currency markets. I think theres tremendous potential to see incredible volatility. They are wound so tight after all the accommodation over the last several years into the up and down range, uncertainty confusion. The range itself doesnt matter, but when it breaks it could really just rattle the risk asset markets. I think we are starting to see this with the dollar index and its rallies. It has clearly thrown off the commodity complex a little bit and could extend right into the equity markets and a wild card, heres the yen. Its a safehaven. Right now its down on the additional accommodation from the boj, but if any of these political tensions and world global tensions escalate, you could really see it big for the yen to unwind the entire character for 2013 and accepted the equity markets down. Somebody just said absolutely. Did i hear that . That was keith, yeah. Keith i live in japan parttime and have for the fast 25 years and have watched that country in crisis. And i couldnt agree with what abigail is saying more. Shes right on the money there. All right, so watch the yen. Rick santelli, what are you watching . Two letters, qe. You dont need to Pay Attention to anything else. Alls you have to do is hope mario draghi and the bank of japan say qe as many times as possible. The algorithms do their job properly like the cac and dex despite the gloom and doom with regard to fundamentals. Join the club, you two. The water is warm. We might be exiting qe, but all stimulus is fungible and the globe is going to continue to float its way into higher equity prices. Rick, are those two meetings more important than the jobs report this week . I think so, without a doubt. I absolutely agree with rick. They are more important than the jobs report here, but i would like to make a point about the european qe. It is not without its own troubles. When you think about the Political Support mario draghi it may not happen, im with you, but does it need to . Investors are just like, just talk about it and make the price go up. We dont care about anything else. Maybe. When are people going to quit talking about qe driving the equity markets high her . When they stop, jack. Pretty easy answer. Money is not getting into the system. Would you explain this . Markets are going up because companies are making money. We are looking at a 17 multiple, which by the way, which by the way is not that bad. You know what . I remember when we were at 25 multiple. They have a higher Unemployment Rate than it is in europe. Jack, im so glad you can explain that. The bottom line is bank of japan is in on it. Off march 2000 lows. When we got this, i dont know, was it a bogus report between the ceasefire and ukraine, the european markets soared on that news. Our futures went sharply higher. And then it all came back to earth again when it was debunct. Are we being held back by that geopolitical problem right now . Of course you are. You have a risk on, risk off treatly. You instantly saw the bid off the bonds, the german bond and u. S. Treasury backed off, yields rose and money came flooding into russian equities. It was logical decision. Does that ultimately matter, though . Why does it matter to the economy . Why does the market react that way . Because its confident. Its all about confidence. If ffs or ttfs or the investors confidence, they are not doing this based on political gobbly gook. If they see a good market, they are going to put their hope in it, ultimate equation. If it is perceived that this is the worst crisis since the cold war is going to affect the profit outlook, theres no doubt thats going to hit the market. Its amazing it has been this resilient so far in my view, but to return to the ecb qe, i think we need to Pay Attention to the fact that draghi is basic listen on the line for saying he was going to do it, but he may not have the Political Support. If investors expect that, it could really set off turmoil. If you look at the euro, that thing has been tanking. And i think well see it continue down to 120, maybe lower. I think we really need to keep an eye on these currency markets. Michelle, arent you a little disappointed, if we didnt have equity market that is didnt send out good signals, maybe ukraine would give us 20 down in the dax and cac. Maybe they would take more appropriate Foreign Policy action. Theres another signal drop by the markets. Maybe its the bond market that sends the wrong signal to keep the bond market out of it, rick. Great to have you all on. That was really lovely. Its our favorite Cocktail Party crew. We love you guys. Thank you, guys. Oh, youre just saying that. No, no. I told you they would be exciting, i told you. The Dow Jones Industrial averages are higher by six. Im still struggling to read this. The nasdaq is lower by 29, drimpb l driven lower mostly by apple. When we come back, a man who never argues like that. Legendary vanguard founder jack bogle will talk to us exclusively about the fed policy, tall things we just talked about in a more sedate fashion. Find out if he sees a buying opportunity sooner rather than later. Also, apple falling hard ahead of the highly anticipated iphone 6 unveiling happening next week. Courtney reagan describes what is happening in this crucial jecture. Plus, the pros weigh in on tesla and whether or not that stock needs to park in your portfolio right now. Thats still to come on what is proving to be a rather exciting closing bell today, stay tuned. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. Were changing the way we do business, with startup ny. Weve created tax free zones throughout the state. And startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. Thanks to startup ny, businesses can operate tax free for 10 years. No property tax. No business tax. And no sales tax. Which means more growth for your business, and more jobs. Its not just business as usual. See how new york can help your business grow, at startup. Ny. Gov oh, he fakes a handoff quaand hes making a run. For mattress discounters fall kickoff sale right now, save up to 300 on Sealy Posturepedic and serta mattress sets. Even get 24 months interestfree financing on every tempurpedic. Youre going to love their football fieldsize selection. This calls for a little touchdown dance. Dont miss the fall kickoff sale at mattress discounters. Mattress discounters mixed market. The s p is down 2 points. The nasdaq is getting hit hard down 28 points. They are having a bad day. Thats interesting. Courtney reagan is tracking todays movers today. What is going on . Well start with apple because its having the worst day since late january. This comes ahead of the launch of the newest iphone next week. Pacific crest recommends investors take profits. In addition, rival samsung unveiled two new smartphones in berlin. Turbulence for Delta Airlines after a lowered metric for the third quarter. Other airlines fell in tandem after rallying yesterday on oil prices. Toll brothers lowers their full year deliveries after deterring americans from buying luxury homes. On the flip side, mobileye. The software is used to avoid car crashes. Very useful. Back to you. The newest ride at cnbc, congratulations. For more on the overall markets and the economy, well bring in legendary mutual fund pioneer jack bogle, hes also number nine, and i dont know why hes not number one, but number nine on the first cnbc 25 list that outlines the 25 people who have had the greatest impact, the most profound impact on business over the last 25 years. It never gets old talking about that. Jack, good to see you, welcome back. Thank you very much, bill. Hi, michelle. Its nice to be on the list. I dont know why i deserve it. I had a few simple ideas and executed them pretty well. You only transformed the entire Mutual Fund Industry so people knew to put their money in an index fund rather than payi paying exorbitant funds. Thats why bill wants to know why you are not number one. This market just keeps going despite all of the concerns we could site, whether geopolitical, the Federal Reserve policy, now the e wecb, everyone is ringing their hands over what the ecb says tomorrow. What do you make of the continued march move higher for averages in the stock market, jack . Well, if i could hear what he said properly, and im not sure i did, one of your previous participants, they seemed to be having a heavy argument, bill. One of them said it is about profits, corporations making money. If you go back to the unpleasant start of 2007, the markets were up 50 . Dividends are up about 45 . Earnings are up 45 . So all the market is doing in that overall period, and i do like to look at things over the last week, month or the last day or two and say the underlying strength of the american corporation, this is the s p 500 that has been quite remarkable. And im not sure where it all comes from. They are paying lower Interest Rates, the corporation, that helps. And doing more international business, that helps. A new source of growth for many of them over that period. And so the fundamental values are there. The earnings are there. The dividend yield is exactly what it was back in 2007. About 2 . Not a great one. But its hard to see that p. E. S i dont think are particularly extended the way i knew it. The market is selling it 20 times, the market is selling it 20 times looking at reported earnings and looking back, and the way wall street looks at it, they look at operating earnings without all the bad stuff and look forward. And they get it down to 15 times. But even at 20 times, i dont think they are excessive overevaluations in the market. You dont think the Federal Reserves involvement or quantitative easing around the world is necessarily a driver of the markets . Well, i think thats been a big help on the business side since they hadnt done what they had done, the corporate earnings wouldnt be as good and particularly keeping Interest Rates low, people dont pay enough attention to this, i think, michelle. If you keep Interest Rates low, youre reducing a Major Corporate cost. So thats one reason the earnings are so good. So i think it helped and gave the Financial Sector or investor sector, whatever you want to call it, a nice bump of confidence. And it goes beyond any particular numbers. They do have an extra im sorry, jack, what about the idea that fed policy has driven people to risky assets or risk assets overall because of the up credibly low historic returns youre getting from the debt market right now. So where else are you going to go to make anything but the equity market, for example, right now . Well, first of all, its just a great point. The Interest Rates are really low. The average money market fund, i think yield is about a quarter of 1 . The tenyear treasuries are at 2. 3 . These are not great yields. And the odds are that stocks will do better. When you say that lack of income, which is tragic for retired people, in fact, has driven people into the stock market, what you have to realize, bill, you will know whats coming here, and that is everybody that comes into this stock market is offset by people that go out of the stock market. Its not just people cant net by the stock market because its got a certain value. And when you buy, somebody else sells. So its, i guess its the power of demand over supply or the buying power over selling interest, but its still the market is still owned by essentially all investors put together. And when you get this rise in the market, its good for sellers and bad for buyers. Jack, are you comfortable with the new products that have been created to help give people yields . Are they structured in a way that you think is safe . And what do you say to the september skeptics who say, if and when theres a sharp selloff, a lot of people are going to see the efts get down very hard, sell off much more sharply than they otherwise would have, because there isnt as much liquidity out there as some people think. Well, i think youve hit on two very, very important points. They could basically be there on the eft side. The trading on etf is enormous. The standard etf is that trades at 20 billion a day and the fund is only 180 billion in total assets. So its 7,000 annual turnover. And about half the etfs have business held by Institutional Investors and retail investors. More who are trading more than they should, so thats a big warning sign, a very big warning sign. As for the new products we have been creating, you cant get blood out of a turnip, as i would told by my grandmother, and im a strong advocate of maintaining quality high of accepting the markets return rather than trying to exceed the markets return, particularly in the bond market. Because if you want to use a highyield bond fund, and they have a place, some of them do, at least, you have a higher yield but are taking a higher risk. What investors have to be careful about is crawling out so far in that limb to get more yield that if the limb snaps off, they are all of a sudden on the ground. So i would give a lot of attention to the risk involved in the new instruments to improve yield, and i think most of them should not be bought categorically. One of the hardest things to do in life in many categories, accept this. Accept what you get in the market is hard for a lot of people. Jack, always good to see you. Thank you, be well. Thank you, bill. Thank you, melanie. Good to see you. Especially on the fixed income. As he pointed out, the money market is nothing. You get desperate for yields. Exactly. Then you end up taking more risks than you should. Heading to the close, 35 minutes left. The dow is up nine points. We have a rebalancing going on by the end of the close that could distort the market a little bit as we head to this close, but the market really feels like it is also waiting for the bank of japan and the European Central bank and the bank of england, which will all be talking tomorrow morning. That could have a big impact on the market as well. Coming up, tesla now trading in the high 200s. Find out if the pros think the electric automaker will run out of juice any time soon or if tesla should be on your buy list after one analyst predicted it will hit 400 next year. Speaking of which, phil lebeau looks at how the nations auto giant made out last month. So far were getting great reports. What will september sales bring you . 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Whenwork with equity experts who work with regional experts who work with Portfolio Management experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. So what were looking for is a way to plus our Accounting Firms mobile plan. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. We have a slow fade going on in the markets. The s p is in negative territory by two, but hanging right in there at the 2,000 level. Its like it wants it. The Dow Jones Industrial is up by 10. And now the story on auto sales coming in, crossing that 17 million mark for the First Time Since july of 2006. Phil lebeau, how did they do that . Bill, they did it with low financing, strong consumer confidence, and theres still a lot of demand out there. People who want new vehicles. Overall, the sales pace of 17. 53 million vehicles, thats the pace, that is the strongest since january of 2006 when it was 17. 62 million. And when you look at the major automakers and what they reported last month, all of them were better than expected, led by chrysler up almost 20 for the month. Jeep is the big story there. Well talk about that in a little bit. Nissan, ford, gm, slightly negative. That was better than expectations. As i mentioned, what was driving it . Low financing. About 13 of the vehicles according to edmonds. Com sold . July and august, they came with zero percent financing. You offer rates like that, you get more people into the showroom. Trucks and suvs were hot all summer. Thats the story. When you mentioned jeep, chrysler had a huge month. Jeep was up 49 in the month of august across the board, almost every one of their models had their best either august ever or their best month overall. And for chrysler, boy, what a turnaround compared to five years ago. Peter shracknel crunched the numbers, the numbers for chrysler doubled in the last five years. Toyota up 66 . The bottom line is this, a red hot month much better than people expected. And it sets up an interesting fall when we expect sales to at least stay at a high pace if not edge a little bit higher. Bill, as you know, one of my favorite data points, you go back to the worst moments of the crisis, so we are at 17 million cars being sold per year if the august stays the same, right . At the worst moments, you know it was 10 million. And i remember the car executives testifying in front of congress about the bailout saying, oh, if only we could get to 13 million. That could be fabulous. And to know through the year as they thought. At the peak, werent we at 20 when things were booming . Back in 2000, there were a few months where you got up in that high 18s to low 19s, overall, youre getting in rare air above 17 million. If you get up to 18 million, thats way above what people were expecting. Thank you, phil. You bet. All right. Though nothing seems to be stopping tesla, the stock surged over 60 in the last year. And one analyst says it will go all the way to 400. Right now its trading in the high 200s. We have cole wilcox who was bear but now is bullish on tesla. John is saying this is way overvalued, how much, John Thompson . I think the company is worth 5 or 10 billion, not 35 billion. Tesla has a bigger market cap than john deere. It has twice the market cap of fiat. As phil just said, fiat owns chrysler and it is such a market cap that i dont see how in any reasonable timeframe they can live up to that. So it is two times overvalued from your perspective. I think it is more like five times overvalued. Cole, youre the bullish one, defend this. Well, we have to remember, a market is a market. Its worth what it is worth. Today it is 280, something in that range. I was originally bullish early in the stock. Stocks can, at some point, become way overvalued and people can capitalize on that, right . Thats absolutely true. The markets can stay irrational a lot longer and the short sales can stay solvent. We are looking and came back in the stock. We made a lot of moves and stepped aside. We are back in it. It is not a valuation trade. As i like stocks to go up to make new highs. This thing seems to have a lot of juice and youre going to the new product cycle. So youre buying based on momentum or because you think eventually they are producing as many cars as General Motors . A combination of the two, but they are a long way of getting as many cars as General Motors. But you are into the next product cycle release. Q1, the much bigger product cycle than the model s. And stocks making new nighs, its a Freight Train in front of the short sellers to continue to move this thing. The trend is your friend and for us im a trader and not warren buffett. John, lets go back to the fundamentals, you compared it to john deere in terms of its market value right now where tesla exceeds john deere. Dont you think tesla has the greater potential down the road than john deere right now in terms of its impact on the economy and its Growth Potential . No, john deere has 35 billion in revenue. Tesla in the last few months has 2 billion or 3 billion. The problem with paying far too much for a stock like this is that the future that you hope is going to come, you know, isnt nearly as good as you hoped. And then the stock falls dramatically, which is sort of what happened last time we had stocks is this the next gm and ford and who else combined . Well, they have a paradoxical problem in my opinion. If electric vehicles become widely accepted by the market, i mean, right now they are a niche and will sell 35,000 cars this year. Which out of 17 million cars in the market, thats almost nothing. So to get very large, hundreds of thousands or millions of cars is going to draw in competition from honda, toyota, audi, bmw, ford, gm, et cetera. Once the market is proving to be big enough, conversely, if the market isnt big, the Companies Wont enter but tesla is going to the stock will crash. So i see a very paradoxical problem in the long run. It certainly has been a lightning rod on both sides. Thank you both for your thoughts on tesla. Definitely a momentum stock right now. That was cole wilcox and John Thompson. The Dow Jones Industrial average is higher than ten points. The all time is 17,138. So we are a little far from that right now, but well see. We were there earlier. We just need momentum at close. This is an interesting story, taking hightech to the royal seas. Royal caribbeans ceo explains why he thinks his companys new smart ship called quantum of the seas will blow the competition out of the water. Well be right back. 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. Sailing on the high seas is about to get a lot smarter. Royal caribbean is debuting the first ever smartship later this fall fully equipped with boat loads of bandwidth and robot bartenders. Very cool stuff here. On more on what cruisers can expect and if investors can expect more ships like this, first is chairman and chief executive officer of Royal Caribbean cruises, richard, thank you for joining us. Thank you. Its nice to be back. What makes a smart ship smart . What can i do on this ship that i cant do, i dont want to say dumb ships, but nonsmart ships . Well, we wanted to make the experience so much easier. So we are using the technology to give you all the thing that is you would like to have without having to think about it. And you mentioned boatloads of bandwidth, thats something you dont experience today. And we wanted to give people the Internet Connectivity they are used to. Yeah. Thats one example. Ways of tracking your luggage, the security, the way you get on the ship, you can get from dock to ship in ten minutes. You know, it occurred to me, why dont you run the Airline Industry . Your Passenger Experience is better than we go through at the Airline Industry at this point. But is this a high margin move on your part or are you going to accept smaller margins to get people who would otherwise not want to go on the ship or if they dont have the capability of staying plugged in with their phone and so forth. Because it sounds expensive. It sounds expensive but the real beauty is it makes the vacation so much more attractive, we think it will attract more people, especially more millenials, the people will pay more, so we think this is going to generate tremendous business for us. So you think people will pay enough more to offset what i presume are higher costs . Absolutely. And the response to what we have announced, and we have not announced everything, has been so overwhelming that i think we have already proven this has been very successful. A longer and easier vacation. How many ships provide Internet Access . Is it standard to go on a cruise to access the internet at any time . Most ships have Internet Access but not very good internet. What we have done is provided more Internet Access than every other cruise ship in the world combined on one ship. So were talking about hundreds of times the bandwidth. Its a staggering change. And people really want it. Yep. A lot of competition in your field as you well know. Yesterday we had the ceo of norwegian with us, kevin shehan, who just brought prestigious cruise international, its about consolidating those two and the competition it will bring to the market. Heres what Kevin Sheehan said. We are a contemporary cruise line moving to the premium, and now we have the opportunity to marry that with two other cruise lines that have nothing in the same space as us, theres a luxury line and an upper premium category. And, you know, he said, pretty much what youre saying, youre not going for marketshare but you have Pricing Power and will take advantage of that to keep margins where they can be, so, you know, im curious why you dont go for more marketshare in this market. He said as much yesterday as well. Well, i think the beauty of what transpired yesterday, it does show the business growing. People it puts higher evaluations on the business. So it validates what we have been saying, which is more people are learning about cruises. If you give them more of what they want and make the vacation a better vacation, they will pay for more it. So margin improvement, Getting Better returns on what we have invested. Thats where the value creations coming from for us. Has there been enough investment in the industry to make up for and to eliminate the issues that really were dogging it a couple of years ago. I mean, youre doing all the smart ship stuff. I remember video of hundreds of passengers on decks with all of these phone cords trying to charge their phones off of one or two different devices because a lot of the electronics on the ship had shut down. Is there enough investment in the basic infrastructure so that kind of stuff doesnt happen anymore . One thing the industry has been very responsive to is the need to keep improving the infrastructure. And frankly, this is one example of that. This is taking it to a whole new level. But throughout the industry we have invested heavily to make sure the infrastructure is second to none. You can now eliminate so many of the hassles that used to be involved in travel. And so, one of the reasons people like cruises is that its a hasslefree vacation. And we want to make sure that our hassles were eliminated absolutely to the extent we possibly could. Like i said, i think you should be running the airline business. Thats all i can say. Mr. Fain, thank you for joining us. Thank you. Nice to be on with you. Richard fain joining us today from norwegian, i mean from the other one. Royal caribbean. Heading to the close with 16 left in the trading session, the dow is up 8 points. We could get fireworks because of the rebalancing of a couple indices coming up in a moment as well. 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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. Smoking with chantix. As a police officer, ive helped many people in the last 23 years. But i needed help in quitting smoking. Along with support, Chantix Varenicline is proven to help people quit smoking. Chantix reduced the urge for me to smoke. It actually caught me by surprise. Some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. If you notice any of these, stop chantix and call your doctor right away. Tell your doctor about any history of Mental Health problems, which could get worse while taking chantix. Dont take chantix if youve had a serious allergic or skin reaction to it. If you develop these, stop chantix and see your doctor right away as some could be life threatening. Tell your doctor if you have a history of heart or blood vessel problems, or if you develop new worse symptoms. Get medical help right away if you have symptoms of a heart attack or stroke. Use caution when driving or operating machinery. Common side effects include nausea, trouble sleeping and unusual dreams. I did not know what it was like to be a nonsmoker. But i do now. Ask your doctor if chantix is right for you. Domenick chu has been keeping an eye on the s p market for us today. You cant get much more flat than an index with a 17,000 read on it. So that gives you an indication. And in all of this, with the fed catalyst and the beige book and those comments, it didnt move the market much either. What is a little bit interesting to a lot of the floor traders down here that i was speaking to for the afternoon session is how resilient the markets have been despite the fact everything is going on. In terms of sector mover so far, we have seen upside performance. You can see there, utilities in energy, the laggers have been technology and also consumer discretionary. So that gives you the idea of perhaps where the limited action so far is. Also whats interesting, it has maybe been a stealth rally. We have not been talking about it all that much, but michelle carusa cabrera knows we are sitting near multiyear highs. Despite the fact we have geopolitical tensions, there are measures in the market doing okay. Now, i just spoke to john corpine at marine equity, he says there are profits to be taken but nobody is taking the profits. Theres not much of a selloff. They are looking to buy this market because theres no better alternative for the money right now. Youre not earning anything in the bank, so the downside is geopolitical risk, you have to watch that. Hes taking a more cautious tone, so those are the two sides of the story from the floor down here. Art just walked past and said the markets were flat right now, so we are not getting a bias either way, up or down. I think this market is now waiting for all those banks. Three of them tomorrow. They weigh in before the market tomorrow. By far the European Central bank is the biggest, mario draghi. Do you ever call him the italian stallion . You can but im not going to. The bank of japan weighs in overnight. So a lot going on overnight and tomorrow morning. The market is making we are taking a wait and see attitude with the dow up 11 points. Cash may be king, but does it matter if people are hording it . Well tell you if consumers are stockpiling their cash, which is not good for the company. And get this, he says the fed is partly to blame. This story is generating huge buzz on our website. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Frotheres no reasonn average 17 we cant manufacture in shuthe United States. Here at timbuk2, we make more than 70,000 custom bags a year, right here in san francisco. We knew we needed to grow internationally, we also knew that it was much more complicated to deal with. I cant imagine having executed what weve executed without having citi side by side with us. Their global expertise was critical to our International Expansion into asia, into europe and into canada. So today, a customer can walk into our store in singapore, will design a custom bag and that customer will have that American Made bag within a few days in singapore. Citi has helped us expand our manufacturing facility; the company has doubled in size since 2007. If it can be done here in san francisco, it can be done anywhere in america. Seven minutes left. Looking at the market, i have kevin carrone here, we were just talking about the s p hugging the flatline there. Three major Central Banks speak overnight. How important is that for you in this market right now . Theres been a lot of pressure put on the market on the upside in anticipation the European Bank may do something. It is probably premature with other things going on. They are going to start another round of asset or loan programs next month. That will be confusing. You dont think they will come out with a major announcement overnight . No, i think they may take it up but nothing more than that. Interest rates are at an alltime low. Thats pretty good for the small cap market. Historically we have seen an Interest Rate with these, small cap stocks tend to do really well. It was hot the first part of the year and now its not. They have been great performers during the year. After that period well see small caps do well into the end of the year. Well take a break and come back to wrap things up with this market today with the closing countdown. Then after the bell, google making a big push into Artificial Intelligence. Well talk about the tech giants latest move and whether its setting this scene for machines to take over one day. I mean, weve heard that before, right . Dont scoff, elan musk is worried about that happening. You hear it here first. [ 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. It is the 2 00 warning before the closing bell, there was talk of a ceasefire reached between russia and ukraine. That sent european markets sharply higher. It sent the futures market higher and we opened hire this morning. Then the ukraines and russians said, theres no ceasefire. Sideways action, actually negative in the lax hour and now we move higher as they wait for the Central Banks overnight and this morning. A feature of the day, the nasdaq down sharply with the index higher at a 14year high yesterday down half a percent or 27 points. A lot of that is apple with one analyst saying maybe its time to take profits of samsung coming out with some new products ahead of the iphone 6 released next tuesday. And look at apple, when was the last time you saw apple down that much . And this is the worst day it has had since january 28 of this year. Do you like apple here . Or am i asking you a question you cant answer . Im not prepared to answer that question, but Large Cap Technology looks atatractive frm the evaluation perspective. And if the company is Getting Better overseas, we expect large tech to be the beneficiary of that. Broadly speaking, we like large capital. It seems like the market is held back to some degree by that conflict right now. No, i Pay Attention to that, but basingly, im a small cap guy looking for fundamental companies. That stuff doesnt really play into good message to keep an eye on. Thank you, both. We are going out with a tenpoint gain on the dow. And the s p holding right at that 2,000 level. Stay tuned for the second hour of the closing bell. And welcome to the closing bell. Im michelle carusocabrera. Heres how we are finishing the day on wall street, the Dow Jones Industrial average higher by 11. 5 points. The nasdaq lower by 25. The s p 500 fell in love with the 2,000 level the last couple of hours and never budged. Lower by 1. 5 points. Lets bring in susan ox, our cnbc contributor, stephanie link, kayla touche, and yo, iron man. You have that right, my brother. We did this yesterday, the s p is exactly where it was. So lets talk about what was interesting. To me, i thought the rollover in the russell is something to Pay Attention to trading at 1. 21. And look at the outperformance of some of the steel names today, specifically u. S. Steel. And obviously Everyone Wants to talk about apple, yeah, i get it. Down 4 is a big move. Ive talked about the potential for double top that 2012 high in september. Im 700 and change. Basically equating to where we just topped out at. You obviously have that event next week. Ive been in the camp of taking profits into this move. Ill remain in that camp. Well, thats what happened today. Stephanie link, do you like apple here . I like apple, we own apple, but its had a nice run so i have no problems whatsoever in terms of taking profits. If i had to choose between some of these internet social media kinds of names, actually, like google, i think that has lagged quite a bit. It has an attractive evaluation, but to me what was interesting today was the economic news. U. S. Data was good. Factory orders were good. Auto sales, 17. 5, thats a huge number. Gm had better pricing, so i was encouraged by that. And better data in terms of isns. And better china and australia gdp. So the Economic Data in the u. S. Remains Getting Better. China is stabilizing and listen to what draghi and team have to say tomorrow. A lot of expectations, so watch how that plays out. What do you make of the move of apple ahead of what is supposed to be a big announcement . Michelle, thats been the broken record for the last few hours. When the stock is moving up and up and up with no news, it was just the expectation that it would, as it always has, run up into this product announcement. It does seem to be taking a breather a little bit more drastically than it normally does, but at the same time, you do have a note from Pacific Crest that says, look, apple, the iphone 6 already priced into the stock at this point. Fiscal year 2016, it needs create billions of dollars in new operating profit from brand new categories. Can the company do that . Probably, but we dont know it can. Susan, how important have the Central Bank Meetings overnight been for you. We have the bank of japan, the bank of england and the European Central bank weighing in before the market opens tomorrow morning. I think people are going to be really disappointed tomorrow morning. I dont think were going to get huge news out of any of them. In particular, i dont think draghi is going to come out with anything remarkable tomorrow. It was not two weeks ago he made the comments about using any instrument at our disposal, but they have already announced a couple of things. They have black rock looking into a potential act of Security Program for them. They have the new Credit Facility coming out. The first one coming out in september, the ltro, and i think thats plenty for them right now. I dont think theres any big moves out of them. So tomorrow you may get a reaction from the market and the fact with so little news out of the central bank. We have, for the last two days, asked about the unemployment report on friday and gotten responses about the ecb meeting tomorrow instead. It seems everybodys so obsessed with it, it seems, at least to me, and tell me if im wrong, but we could really be set up for disappointment because the expectations are so high. And if draghi misses, a selloff is possible. Qe in europe, expectations bounce, i think the dax will tell you a long way. You have the huge selloff in the beginning of office and the subsequent bounce, but look at the dax and the iwm, they are hauntingly similar in the setup. So to your point, if they dont come out to say exactly what they need to say, and it is very hard to do that at this point, you see a subsequent roll over the dax and maybe that takes the s p down to levels we have not seen in quite some time. But to me its all about the russell predicated to me and whats happening in europe. If it takes the u. S. Market down, thats what you want to buy because the u. S. Economy is Getting Better. We should see better revenue growth. A good, another quarter which sees better earnings growth. Sure, theres risk with europe and potentially already them being in recession and numbers coming down, but the u. S. Centric company, auto, arrow and some porkts of housing and technology are certainly names you can be buying. But michelle, it does seem that its the yield on the german bond that has been the leading indicator for Interest Rates here in the u. S. And i know that there are a lot of people in the fixed income market who would like to see that track a little bit higher. So that the yield curve can start steepening and some of the financials can start making more money. Are we underestimating the impact of the conflict between ukraine and russia, the impact its having on the markets . When you consider theres talk of a ceasefire this morning and the markets in europe took off, our futures markets took off before the open. Then by the time we got to be an hour in, it was clear that there was no ceasefire and we came back down again. Is this conflict holding our market back to some degree right now . What do you think, stephanie . Sure, i think it is holding us back. And to the extent of how much it impacts europe, right . And does it really dive them into a deeper recession, right . As i said before, i actually think theres a chance they are already in a recession. But that then means draghi has to pull out all the stops. So its really a question of timing in my opinion in terms of what the ecb does, when they do it. Do they do it tomorrow . Probably not. But do they do it down the road . They have to do it. Ultimately, i dont know that draghi can fix what ails europe, right . I mean, you can pump all this money at the economy, but if its broken, if it needs reforms, Monetary Policy only goes so far. And thats why he was saying in his comments, he was looking for a political compact. He wants the european leaders to come in to say, we are in this with you and will institute reforms, but in the long way. Thats what hes so clear about his role and how much he can do. But if things get that dire, they are all going to have to do something. Maybe theres a chance they will. But do you remember when that happened . I certainly do. December of 2011, we all thought we were falling into the abusiness. It was an ugly moment. People were scared and throwing up in the garbage. I dont want to go there again. But the u. S. Is a lot stronger at this juncture given what we have done for the last five to six years in terms of our monetary policies. I hope so. Youre itching to buy this market when it goes lower, arent you . Yeah. I can find stuff today to buy, but i think i would love to get something down 5 to 10 . I dont know if well see 10 , but i would love to buy that because the u. S. Economy is doing better and china is stabilizing. It is pretty astounding to say if not for ukraine and russia, we are going higher. We are alltime high in the s p. I dont know how much higher you want to get. Are we underestimating what we are getting to . I missed that day in geopolitical school, so i cant speak much about it, but its clear the guy over there is playing a game of chess and the rest of the world is playing mumbly play. It has not affected our markets yet, which is why we are sort of putting it in the rearview mirror. All right. Thank you, guy. Good to see you. Later, bill. See you. Ironman, you can catch him and the rest of the crew coming up on fast money at 5 00 p. M. Eastern time here on cnbc. Shares of Toll Brothers taking a hit on earnings. They will be talking with that Companys Company coming up, douglas yearley, thats in an hour from now on cnbc. Breaking news on Health Care Costs in the United States. Bertha coombs has the details. Good news or bad news . It is mixed, michelle. Officials from cms are estimating we will hit that 19 level of gdp in Health Care Spending in the tenth year of obamacare in 2023. Thats up from 17 and change over the last couple of years and presently, but it actually, they say now its going to happen a little bit later than they thought. The original projections were that we have hit nearly 20 in 2022. The big drivers of cost will continue to rise. It will be the fact that more people are getting insurance under obamacare. More boomers are transitioning to medicare. And also the recovery in the economy to make people a little more willing to spend on their health care. For 2015, well stay under 5 growth. After that well see the acceleration. Back to you. Thank you, bertha. Well go over to Courtney Reagan with a quick earnings alert. A lot of news this afternoon. Well check out shares of pbh corporate including calvin klein, you know them. Revenue is in line with the forecast stock trading higher by 5 if im reading that correctly. Bill, back to you. Courtney, thank you. Be sure to tune into mad money as jim talks to the ceo of pvh and to dive into the results with manny chirico. Can i get a 5 00 shot really quickly . Who doesnt belong in this picture . Am i the luckiest guy ever . We are looking at ukraine to iraq, tensions surrounding new wars and new acts of terror have people on the edge. Except seemingly here on wall street as markets continue to flourish. Well look at that phenomenon coming up. 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Tibco software is asking Goldman Sachs to assist in the stock trading higher by more than 5. 3 . Michelle, back to you. Stocks still hovering near record highs as investors seemingly pay little attention to a series of global simmering flashpoints. Mandy drury is joining with us the hot spots you need to know about, even if the markets are ignoring them, right . Well take a look. The global flashpoints youre talking about do seem to be intensifying. Well take a look at the big map behind me as a number of the hot spots continue to light up across the board. So first of all, in pakistan, disputed elections in afghanistan here behind me, also terrorism in somalia, yemen and over here in nigeria. But lets start with ukraine and russia. Up here, okay . Mixed messages today from both sides about whether or not theres an agreement in place to end the fighting. While president obama was on earlier today ratcheted up the rhetoric against russia again. Lets take a listen. It was not the government of kiev that destabilized eastern ukraine. Its been the prorussian separatists encouraged by russia, financed by russia, trained by russia, supplied by russia and armed by russia. So the fighting on the ground does continue in the eastern part of ukraine, but the other issue at hand here, guys, is isis and the situation in iraq and also syria. The recent beheading of journalists adding to the fuel of the fire coupling with pressure from the United States to end the conflict there. And look at this, libyan fighters and separatists taking over what was the u. S. Embassy. Incredible video. Back to you guys. Thank you, mandy, very much. Thats an entire country without a framework government. For more on the markets minor reaction to the geopolitical hot spots, well bring in the Vice President of the american Foreign Policy counsel along with our panel. Good to have you, what do you make of the lack of response from the markets . Is it justified because a lot of the economies arent all that big . Or are we sending ourselves up for big volatility if these situations get even hot her . Right. No, its a good question. My sense is what youre seeing in the markets now is a little bit of complacency with regard to whats going on globally. Because your seeing a huge amount of Russia Ukraine n the greater middle east, obviously we just heard about iraq and isis, but the big elephant many the room is pretty soon we could be having a similar conversation with regard to iran because there is a diplomatic track for their Nuclear Program unfolding and it is not all clear well get a nuclear deal any time over the next couple of months. So across sort of the greater expanse of your asia to north africa, youre seeing a tremendous amount of volatility and theres a danger of this contaco contagen to increase significant dislocation. Part of the complacency is driven by the fact that u. S. Congress is out of session and coming back next week. And when you look at Something Like whats happening in ukraine, theres potential there for putin just to back down. I dont think thats going to happen but it is possible. When you talk about isis in iraq and syria, thats a much different issue. We could be talking about u. S. Troops on the ground, Congress Getting involved, so a lot of this is going to start to ramp up over the next couple of weeks as Congress Comes back and the markets will start to react or pay more attention. Stephanie, maybe im old school, but i was always of the belief that the market knows all. It is never wrong. It knows what is going on even though we individually may not know whats going on. Is this complacency or does the market just anticipate that these crises will come to an end without a great Economic Impact . Its so hard to tell, bill. Yeah, the market typically is a leading indicator six to eight months down the road, so maybe people expect that they are going to resolve a lot of the issues. I highly doubt it. They are not simple by any means, but as i mentioned before, i think the biggest concern that i have is how much does it really impact europe, right . And that economy. And how does that drag down the earnings picture for the u. S. Company because i believe they are very well positioned, but europe is in a very fragile state. So its a watch kind of situation. As we said before, the ecb really has to take charge and im not sure they are going to take it tomorrow but they have to take it. War is not necessarily bad for the markets, right . We have lived through how many wars here in the United States over the last couple decades and the markets are much, much higher than before. Well, i think thats exactly right. But what you have to remember also is particularly russia and ukraine, because i think thats probably the fast mover at the moment. This is obviously an issue also, but what youre looking at now is already there is tremendous Economic Impact on the russian economy itself. But that tends to be a selfcontained phenomenon. But increasingly if there isnt a ceasefire deal reached over the next couple of weeks, you are approaching the fall and winter months in which the russians, if history is any judge, are going to rely on what they have always relied on, which is energy a tool of political blackmail. And that can create tremendous ripple effects, not only in y ukraine but eastern europe. Complacency is the correct word in that this could spiral out of control in a very short order. Elan, when you think about ukraine and russian, you think obvious economic effects of that situation to worsen for europe, but many people seem toll have forgotten just on friday we had u. K. s Prime Minister David Cameron talking about the increased terror level in great britain. That is something that really spooked the markets to get them thinking about the seriousness of the conflict in iraq with isis. Have we already forgotten about that . Because that is Something Real that the market can old on to right now . Quickly, if you can. Good question. If we remember after 9 11 there was the idea of a terror premium that bumped up oil prices and created market volatility, i think we are beginning to head in that direction again because of the fallout, not only from instability in these different places, but also the possibility that the syrian conflict could become a global one. Thank you for joining us, elan berman. Thank you. Breaking news on the alibaba public official offering. Sources are telling us with regard to the alibaba ipo listed here on the New York Stock Exchange, we have learned from multiple sources that barclays will be the Specialist Firm that will be handling the shares. So baba, baba shares are trading on the New York Stock Exchange and sources tell us at cnbc it will be barclays handling specialist duties for the baba shares once they go public. They are one of the biggest market moneymakers here on the firm. So perhaps not surprising, but an interesting bit of news. Another bit of detail or color with regard to the highlyanticipate highlyanticipated news of baba. I have been waiting for this for so long, but it is interesting to see them correct create twitters market. Minute by minute, they are trying to basically recreate that in all its success. Well see if they can do it. They better hope they can get a twitter ipo and not a facebook ipo. And thats all about evaluation. We hope to get that toward the end participation itself is enough to make you worry about this thing, isnt it . Certainly. To see who sells what positions ahead of time in order to fund purchases for the stock, it will be interesting to see how this all works out. The New York Stock Exchange is still a great set for that kind of theater the day stocks go public. Its so fun. First it was selfdriving cars, now robots and quantum computing. Thats googles latest undertaking that could pave the way for Artificial Intelligence. Well have an excellent debate about the future coming up. Thats a big promise. And the battle days, people used to put cash under the mattress to protect their savings and they may be at it again. That story is coming up. 800340 so if you get a trade idea about, tdd 18003452550 say, organic food stocks, schwab can help. Tdd 18003452550 with a trading specialist just a tap away. Tdd 18003452550 [specialist ] whats on your mind, lisa . 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Head to our website, cnbc. Com vote and tell what you say you think. Are you afraid of the machines taking over one day . Joining us to talk about that and our intelligent conversation on this, vern brunell, and Michael Borman is joining us as well. Gentlemen, thank you. Vern, should we be worried about this . I remember thinking about this back in the 1950s, not that i was around then, but the concern on ibm, machines are taking over for the human. Now we are talking about it again, arent we . We are always scared of new technologies by human nature. Should we be . No, well figure out how to manage this ourselves. What is important is this type of Artificial Intelligence and quantum cop putimputing are loo for ways to manage their money on wall street. It is worth the investment and technology. And we have to figure out how to manage technology to get out of hand, too. Is it that simple, just managing it . Because elon musk is no dummy. Hes an extremely smart guy that understands this far better that most of us on this panel, right . Yet he has fears about it. What would you say to him . Well, agreeing with the point we have to keep an eye on it, we cant let the technology go wild on itself. We have to be careful of what the implications are of any new technology, but my belief is we are so far from having to worry about the singularity or machines taking over, some of the things we see in the movies, that thats decades away. But nonetheless, elon is right, we have to keep an eye on it. Blue sky it for us, if youre going to create this entity that google is bringing together with all the very smart people, what are the questions that need to be answered right now . What answers are we looking for with this . Well, i mean, really the answers were looking for is, a, what can what opportunities exist once we actually have a working fully functional quantum compute her . Dwave was building a quantum computer of sorts, but im told it cannot do everything we theoretically think they can do. Thats the first question, it can process information much, much more quickly than any existing computer, so i think it is one of those things that initially we are not even fully aware of what we can do with the technology yet. So really kind of the skys the limit. The imagination can run wild with the predictability, looking at weather patterns, who knows what can happen. But vern said theres a lot of good things that can come as a result of this and we have to be careful with the way we move on with this kind technology. It is just like the clone technology, we need to figure out parameters and how we are going to engage in this as a society. And ill just say as a side note, i think elon rusk is working on this on the side and was just dodging it. Look at this happening realtime, our viewers, you are voting right now. We asked, are you afraid of machines taking over . And 81 say, yes, vern, they are afraid of that phenomenon happening. Well, michelle, youre exactly right. Its like any technology, we have to look at it from the earth call point of view and understand it. And to the earlier point, we dont yet understand where the implications are in the technology. Its quite new. But the problem that we have vern, how many years are we away from this becoming a real reality . Is this decades or do you think well really be using some of this technology . Greg says there are people alive right now who will live forever because they eventually merge with robots. You laugh but people who believe that quote unquote singularity is near are deeply widespread, especially in silicon valley. They think its here, including the google guys because they have greg kerswell on staff. How long, vern . Google is already using Machine Learning. They are the masters of Machine Learning and use it all the time to do better search and look for images, all these things massachusetts sheen learning and Artificial Intelligence is just a tool that people are using. And quantum computing, the product we provide is a good underpinning for improving Machine Learning and proving the capability we have there. We today have a computer we have sold to google and nasa and lockheed martin, but we are at the dawn of the error of quantum computing. So well see many years of innovation. Going back to the 60s or even the 40s with the original lek tropic computers, this is the dawn of another age of another type of computing. Michael, you get the last word, are you afraid . Elon musk is. Well, look at the viewers, so are they. 75 are afraid of this happening. I can certainly sympathize that it sounds like a lot of the viewers are afraid of the robot apocalyp apocalypse. We are at the dawn of this kind of technology and we dont even fully understand what kind architecture we need to use to build the quantum computer. So until we actually have a computer that has this massive processing power, im not wor worried how it will be used because we dont know how to build it yet. Once that time comes and we see what the real potential is that it can do, thats when you can be concerned about the uses. But theres still going to be a lot of good to come from that, but we dont need to be worried about it until that point. 75 of the voters can be greatly relieved based on that. Thank you, vern. Thank you, both. That was fun. Thank you. We could live forever . I could be here for dow million . Unless the machines replace you. Thats always possible. Absolutely. I dont want to live forever. I do. Im going to shoot my age one of these days. The fight for control of the senate has North Carolina as one of the most contested raced. Incumbent senator cay hagan is fighting off the budget deficits versus budget cuts on tobacco road. And john harwood is there with a live report. That should be fun. And love and marriage arent what they used to be. Just ask the founder of aragon global management. Hes in the middle of an ugly divorce and now his wife says she was coerced into signing a bad prenuptial agreement and she wants it voided. How safe is anyones prenup when you think about it . Well talk about that coming up. Dont just visit new york. Visit tripadvisor new york. With millions of reviews, tripadvisor makes any destination better. So what were looking for is a way to plus our Accounting Firms mobile plan. And minus our expenses. Perfect timing. Were offering our bestever pricing on mobile plans for business. Run the numbers on that. Well, unlimited talk and text, and ten gigs of data for the five of you would be. Oneseventyfive a month. Good calculating kyle. Good job kyle. You just made partner. Our bestever pricing on mobile share value plans for business. Now with a 100 bill credit for every business line you add. Could mean less waiting for things like security backups and file downloads youd take that test, right . What are you waiting for . You could literally be done with the test by now. Now you could have done it twice. This is awkward. Go to comcastbusiness. Com checkyourspeed. If we cant offer faster speeds or save you money well give you 150. Comcast business built for business. Slentlets send it over to Courtney Reagan now. You can see Shoe Carnival trading down almost 7. 5 after hours. Wow. Big move. Thank you. A tough one tomorrow. This article made it to top of the cnbc. Com hot list yesterday. U. S. Consumers have decided to hoard money written by jeff cox. Jeff is joining us now, what are people doing . Putting it in the mattress . We talk so much and analyst the markets. We say the reason why stocks are up so much is because investors dont have any place else to put their money. Well, actually they do. They can put it into the stock market or put it under the mattress. This formed the basis of a paper that by fed analysis standards was fairly explosive. They make a couple really interesting assertions and one is that we put so much money out there and its not getting put to use. So thats why inflation is so low and gdp has not moved much. A couple figures they throw out, they say under normal circumstances, inflation if they would have kept up with the money supply, inflation would be up 33 a year. Instead the velocity of money or how often each dollar gets used in the economy is down by 69 from precrisis levels. Now, most interesting of all, they actually lay some of the blame at their own feet saying fed policy is really helping to keep the consumer enthusiasm for spending money and also just a lot of worry about the gloomy economy and that kind of thing. There are the two great emotions in investing are greed and fear as we know. Fear is still very much with us, isnt it . Thats what this is saying. Its fear and low wage growth. Its nonexistent wage growth, right . So the consumer has to be very choosy. Either buy that car or maybe spend money on their home or maybe they are going to put it under the mad rettress, but thee not at the ability to be spending all around. And they dont have the extra slush fund. They got caught like the consumer did in the last financial crisis. Too much on margin, too much borrowed and too much in the market. They dont want to get to that point again and wages are not growing fast enough to give them more of a cushion to put that back into the market. Wouldnt you agree, jeff . Yes. Absolutely, kayla. The wage portion is so important. I think its what janet yellen is watching for looking at the economic numbers. Heres a couple questions we need to consider, one is the whole pushing on a string concept. Have we reached the point where qe is not doing any more good, the fed realized it and thats why they are pulling away . The other question is theoretically what happens if the money does get unleashed into the economy, if confidence comes back, youre talking about a torrent of pentup liquidity out there. One possibility is big Economic Growth and the other possibility is the runaway inflation so many people are worried about. What is going to spark that and bring that confidence back . When they get unleashed. The animal spirit. Does the paper have any suggestion on what should be done, jeff . They dont. Its really just an analysis. Very clear analysis of where we have come and why things are as dormant as they are. Theres not a lot of, if youre looking for a ray of sunshine or a Silver Lining behind this story, theres really not a whole lot in there. I think they really feel that this is where we are and this is it just basically offers the explanation for this and this is why Economic Conditions are just as they are. This was written by the cleveland fed. This is not out of the fed board itself. The st. Louis fed, actually. St. Louis, thank you. This is not official policy coming down from the fed board from janet yellen. The st. Louis fed thinks it is time to start raising rates, which is obviously not going to impact the economy like anybody wants right now. It sort of meshes what we heard from jim fuller. You wonder what the next fed meeting is going to be like, if things get uncomfortable, hey, you are calling us out here and holding our feet to the fire. Good stuff. Thank you. You can see this online at our website, cnbc. Com. Thank you, appreciate it. The midterm elections are just two months away. The race for control of capitol hill is on and it is going to be a squeaker. John harwood is in North Carolina. Hes got a key state that could decide the balance of power. Well get this report with larry kudlow joining us with his take as well. And later, how safe is your prenup . Well discuss how one Hedge Fund Managers divorce could set a legal precedent for prenuptial agreements, big or small. Are there small prenups . 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. So as the midterm elections draw near, the battle for republicans and democrats heating up the senate is occurring. John harwood is here with more on this. John . Reporter we have this in highdefinition. Just consider all the things that are not to like. First in washington where cay hagan is the democratic incumbent senator. President obama is under fire at home and abroad. Congress is in gridlock. We have an uneven economic recovery with controversy over taxes and spending and obamacare and deficits. The result of that is only one of five americans believe the country is headed on the right track. But the exact same thing is true here in raleigh where the republican candidate tom killis is the house speaker. Since the republicans took over in 2012, you have cuts in jobless benefits, new curves on voting in the state, you have the moral mondays protest which happened every week here at the state capitol. And only one in five here in North Carolina approve of the state legislature. As a result of that, you have the democrats going after tom tillis just as hard as republicans are going after kay hagan. Thereon the ads. Hay michiggans campaign opp carbon tax even if it could cost the family 2,000 a year. Tell senator hagan we cant afford higher taxes. The taxes that governor tillis gave are more than we can afford. We are going to see these take action tonight. The battle between kay hagan and tom tillis will continue. We know which side you come down on, larry, but let me ask you this way, what does kay hagan whhave to do to win this thing . Last week senator hagan showed up and gave the president a big kiss. Then she went into the American Legion to give a speech trashing obama. So hagans theory here i think it was a small kiss, larry. Okay, a small kiss. I actually think it was a wet kiss is what it really was. Youve got hagan running away from obama. Shes saying im not part of the democratic party. On the other hand, youve got tillis who really hasnt had any policies of his own is this race emblemattic or what well see across the country . Its emblematic that republicans will win one of three, no question about that. But there are seven or eight tossups. You look at the polls and they are all tossups. I agree with john hardwood, this is an important race and important debate. Hagans stuff about class war fair, tax cuts for yachts and rich people, thats not going to sell. North carolina is not that kind of a state. Heres the thing, though, republicans havent really told the voters of the United States what they are for. They are against obama and they are selling us that they are going to veto this and that, but they are asking voters to give them both houses of congress. And they need, in my opinion, a new contract with america to let the voters know tax reform, obamacare reform, education reform, you name it. I spoke to Newt Gingrich about this, he says you only need six or seven. And i bet senators, rob portman is ready to roll, ron johnson is ready to roll, on the other side, paul ryan, what is the gop for . Is it for growth and optimism message or not . So far they have not clarified that. Whats it going to come down to, john, as we go out here . Those two commercials you showed in North Carolina, its budget cuts versus spending cuts, i mean budget deficits versus more spending cuts. Is that going to resonate with voters or what is it going to be this time . Well, exactly right. What makes this race so interesting is that this is the state where because theyve got the governorship and the legislature, republicans have implemented a program and democrats are going after it just like republicans going after obamacare and all the elements of the democratic program. So when they try to mobilize each base, which is what the two campaigns are doing, and at one point of disagreement with larry, yes, kay hagan is establishing distance with obama, but she has to mobilizep. There are only selected places where she is establishing distance. Its going to be a turnout battle. We will see mr. These new voting decisions have an effect. The voting is ten days to 17. There are a whole different factors. Ultimately, it will be a turnout battle pitting these two parties against each other. Is there a spoiler. We got to go. There is a libertarian spoiler in this race. Put it on the website, the spoiler that larry kudlow thinks is coming up in the election. Thanks, guys. Coming up, it was a rough day for apple. One analyst said there were profits in the name. Thats why the stocks sold off. Threats see if that lit up the hot list. That is next. Be sure to tune into cloclog bell tomorrow. We have the ceo tillman and boxers. Man paq uia. Plus the housing mania. It starts right here 3 00 p. M. Eastern time right here on closing bell. Stay tuned. Big day . Welcome back. Courtney reagan cut her honeymoon short. We are ever grateful. You got it. Stocks are moving lower. Off its lows after it hit same store sales, china are estimated to be down approximately 13 . The company says while sales are beginning to rebound, they continues to be negative. The stock is currently trading down by more than 2 . Wren, bill, back to you. Wow, that headache doesnt go away for them. Holly smokes, thank you, courtney. Couples often agree to prenuptial agreements to help potential divorce stay as simple as possible. One Hedge Fund Manager is turning that on his head. Shes trying to dissolve the prenup. Its a billion dollar fight about to set a legal precedent or is it . We will join that story when we come back right after this 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. But parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Citadels ken griffin and his wife anne are getting divorced. Like any couple separating, theyre having some issues. Are they. The issues one is mrs. Griffin moving to avoid a nuptial . Could this set a Legal Precedents . Robert frank has more. Robert. Its like the war of the roses preup in style. It will give her 1 of ken griffins fortune that, will be 50 million from his 5 billion. She says se signed this three hours before the wedding rehearsal dinner. Griffin says her claims are cellatious and untrue. One spouse has to hide assets or undervalue those. There has to be illegal adequate representation or coercion or duress in forcing his wife to sign. Anne griffin is focusing on this last argument, she is saying ken even enlisted a psychologist to persuade her to sign. Kens side saying she had plenty of time to sign and the best divorce lawyer in chicago working for her. The real issue here is kids. She wants joint custody. She wants more money, for now the prenup is ken griffins biggest weapon in this fight. Thanks, robert, very much. I dont want to knock anne griffin. You have to take ownership of your actions. She signed it. Its a legal document. Anyway, she still gets 50 million. Which is not zero. Glass half full, kayla. Anybody taking ken griffins side on this . That is less than 1 of his assets, there you go. Legal representation is very hard when you are forced to sign a day before. Its a yellow flag though they couldnt get to an agreement until three hours before the wedding actually. Ty about it as sort of negotiating leverage or something. Probably. I feel bad. Hey, thanks thanks, guy, for joining us today. You too, are you coming over here tomorrow, right . Ill see you tomorrow and friday. And friday, too. Everybody is keeping square there. Fast money is coming up, melissa lee, how is that prenup working for you . You know, unfortunately, i dont have to worry about that, bill. I have a question for you guys, though, do you like warm seats . Warm seats . I like heated etc. In my car. Exactly him investors love heated seats as well. We got a stock, the ceo of the company, the stock is almost a triple over the past 12 months. I guess that has something to do with heated seats. We center into heat for seats. I love that. Love that. Take it away. Fast money starts right now. Live from the market live times square, pete najerian, karen feinerman and guy adam my, my panel. The stock is having its second worst day of the year after one analyst said now is the time to take profit. Now last night on fast money, a number of our traders were getting concerned about the