Transcripts For CNBC Closing Bell 20150107

Jcpenney especially. That stock is very strong today on better than expected holiday sales. We certainly are. We have had a down couple of days for the market and set up perhaps for a spring back and surprising to see the resilience today, not more of a flight to safety bid after the tragic shootings in paris this morning and, in fact on that note as we keep an eye on that horrible terrorist attack on the magazine that previously ran the cartoons of mohammed the president and much of the world condemning the barbaric murders. Well get you the latest as the attackers are at large. At this hour i think pictures out of france a vigil is taking place. Hundreds of thousands of french people citizens are in various squares in paris and elsewhere to mourn the loss of those lives today. Yes. And what theyre holding i believe there are signs saying we are charlie referring the magazine attacked. I know that you know we are the business channel. I should mention it was interesting to note that the french stock market did not fall on this news. The part of the european markets higher today, finished up and this time thinking more about the Human Element than anything else. We heard from french hollande theres a day of mourning tomorrow as the grief shared around the world and final hour of trading on whats happening looking to close, the dow up about 180. Strong session today following a couple of very weak ones to start off the year. Thats still the talk of the floor. S p nasdaq also up 1 as we go into this final hour of trading today. Get to the Closing Bell Exchange lindsey piegi and jack and Keith Fitzgerald and weve got Steve Liesman and Rick Santelli to talk about things. Steve, give us a play by play on the fed minutes. You know not a lot of surprises. We knew what came out of that meeting in the press conference. Right . Theyre talking about Global Economic weakness. Theyre talking about the affects of Lower Oil Prices. But overall, what they see is that the u. S. Economy is able to withstand that some seeing risk to the up with side. Maybe a touch aukish with one comment that the fed could raise rates at the current core pce level and they qualify that saying they would have to see Movement Towards a goal of 2 . Overall, you know im more focused today than on the minutes with the data of adp number at 240. Small business hiring at a record since 2006. And finally, that trade deficit number guys showing the effects of Lower Oil Prices on the u. S. Economy, thats a boost to gdp. Our cnbc rapid update up by 0. 4 and looking at a 3 or 3. 2 Fourth Quarter growth and this is a quarter that a lot of people thought down in the low 2s. Especially following that 5 bounce. Exactly. Tell us what you think the fed is going to do here and thatwhat they should do. The vast majority of Committee Members saw new language as a path that it would not occur for a several meetings and they talk about the risk of fed forecast for growth and inflation being to the downside and very likely that again, that pathway to normalization does not occur until well beyond mid2015. Possibly in 2016 as we have maintained for quite sometime. And i think in the end the fed remains data dependent as they always have. If the data comes in under expectations theyre very happy to extend that time line. You know i just want to put out there that i think the comment on the core may be took off the notion they wouldnt raise in 2015. If theyre okay with the core that was a big argument why the fed may not hike this year. I think it takes it a bit off the table. With the expectations go ahead. As you said they also qualify that with they had to be confident in their expectations for inflation reversing course back towards 2 so if we do continue to see downward pressure, that certainly will take rate increases off the table. Even with the expectations of greater growth from the feds staff in that meeting, weve had this rough start to the beginning of the year. Keith, you think this selling is logical. What do you mean . Well i think it is very natural for traders to want to take some money off the table. Logic of big portfolios to rebalance and logical to take some protective action against an uncertain backdrop. But to me it was overdone i think a kneejerk reaction and everybodys ready to get back to work. The key takeaway the markets didnt drop on the horrific events in paris and says to me the psyche of the markets is stronger than terrorists want to believe and thats a great testimony to faith of capitalism. Talk about the faith in a strong outlook after the weak tart to the year. Since the minutes are a couple of weeks old and seen market Inflation Expectations drop precipitously again that we should take these as an indicate indicating where the fed stands now, as well . Well you know its not only that but think about this, kelly. We know that the Oil Producing stocks and those that are related to crude suffer. What we dont know is ancillary affect of the low oil prices and we saw with the retailers today and all of that is playing into whats happening with the fed and one of the things i took away today is they said its unlikely to move before april. Now, unlikely and, steve, ill go back to you with that term. Unlikely is very vague word for me. If the numbers start to heat and todays numbers were hot, if we start to see real good solid numbers, then ive got a feeling that the fed has their hands tied and move quicker than people think. I dont think thats right. Unlikely is probably the best guess. 70 , 80 probability. Youre missing an important number and thats wage inflation. You dont have it. Were not seeing it. Plus to the extent of overseas economies affecting the United States, so far it appears to be through lower inflation, that stronger dollar Lower Oil Prices lower overseas growth perhaps taking an edge off export growth in the United States and all of that if you think about it is a bullish foundation. You couple it drn. I agree. I agree. Couple everything you said not an inflationary foundation. Lets raise a quick question. Hang on a second. Been on my mind. Curious what you think about this. We had jimmy keenan on the show yesterday. The more they say whether its credit or the real effect were talking about a 2016 and beyond kind of event. So quhas the fed supposed to do if theres this sense again because its dropped so sharply that it takes a while for us to feel the feel effects of the decline on the oil patch and those parts of the credit. Bringing rick in on this . Go ahead, keith. I actually dont think its a negative because i think the average American Consumer finally got a very real tax cut in the pocket no keith. I understand. Do you think that thats still strong so the initial that boost is going to be strongest right away when everyones excited about 1. 99 gas and then next 18 to 24 months parts of the oil patch really come off and oil doesnt rebound, what do you do if youre the fed and worried about that potential outcome . I think you sit back and let the market sort things out, which is completely abnormal thats the last couple of days. Yeah. Exactly. The fed doesnt want to do that. It doesnt know what to do if it has to sit back and relax. But i think that the cumulative effect takes a process in tw or three quarters from now. That similar plus feeds into companies and earnings and stock prices ss and i think the market adapts and drive forward off of this. Rick . You are waiting for us to tap you. Lets bring in santelli. We have given you a lot to address here. Pick your spots here. Where do you agree or disagree right now . Well i read the text and to me its still mostly gobbledy goop and having a debate on whether the fed raises rates or not is a crazy discussion. Rates are too low. No matter the outcome of oil. In the end, theres only one question to be asking. If steve thinks that the problem with the economy is we arent getting wages to move up i want the know why another year of 0 Interest Rate policy makes a difference. Or another two years or why is it going to bring some areas of the globe like europe with as high as 12 or 13 , why is qe american style going to bring that down . None of it seems to add up. I will have a discussion of whats going on with Interest Rates. Yesterday, we came very close to that october 15th 1. 86 intraday low and the markets are different today. I think we have a cycle of the equities to get the sea legs back a bit and Start Playing the range now probably between the mid 180s and 205 in terms of rates. I dont think see anything changing dramatically at all. Rick . With all due respect, theres a notion inside what youre saying that somehow you know better than the market knows. No. No but the fed doesnt the fed doesnt. Okay. But hang on. One at a time. They dont know what theyre doing. The fed ended quantitative easing and signaled the next move is up. How much good did the last couple of batches do . Hold on rick n. That time frame. No the markets by themselves have moved down. So when you say rates are too low, rates are too low relative to what . Relative to what you think . Relative to the fact theyve been tinkered with at. How do you know where they would be . Agreed. Agreed. Agreed. Then what are we talking about . Somebody mentioned this is good for capitalism please any country thats a capitalist raise their hand. Gee, dont see any. Hang on a second. Rick, remember we have had this discussion before and we have listen. Listen. Im with you. I get it. Guys, we have the long end of the curve to look at. Far less if you will manipulated if you will. Its a big market of u. S. Treasuries. Thats right, kelly. You cant argue that on the one hand the moves matter and they dont. If we have Material Information from the last couple of months especially expressed in the long end, rick what is that telling us . What Material Information . Ratds have moved down significantly. And why have rates moved down here . Thats what were saying to you . They have moved down for a different reason rick they moved down because traders thats right. Rick, rick you hit the nail on the head. Theyre going down because of europe. Thats it exactly. You cant say its all the fed and europe, thats my point. One or the other. 17 trillion economy an you let the academics with a meeting every 6 1 2 weeks think theyre experts on everything from energy to what kind of products our mortgages should be . And you think that im the one who doesnt make sense . No. But what theyre hang on. Setting the policy rate. Hang on. What theyre trying to do. Its not then we need to find a Different Group of people to make different policy. Why . Rates should be higher . Based on what rick . Not based on the market. Rates should be how can you say that . Listen. Let me get you in here as well. Lindsay, would you argue theres real genuine price discovery happening in the long end of the u. S. Treasury yield curve if you will pressed by whether its players in europe or hedge funds or whomever and not just manipulation by the fed . I think it would be impossible to argue its solely manipulation by the fed but in part i never said solely. Look at all the programs that the fed put in play and they definitely have had a hand but to say the fed is 100 responsible for the level of rates i think thats a difficult argument to make. Rick, lets bring it this way. We have to go. So arguing degrees now and awfully cold in chicago. Implied in kellys question is if yields are going down on the long end of the curve even as the fed talks about raising the short rates, implied in the question is are the long yields guessing a slowdown in the economy if the fed starts to raise rates prematurely . I dont know any other possible conclusion to draw. Exactly. I would draw a different one, bill. Wrong wrong, wrong. Thats keeping people out of the market. The market saying that inflation will be lower. Keep going on wait a minute. Wait a minute. We have to go guys. Youre missing the fundamental point here. Okay okay. We are yelled at in our ears. So what . We are yelled at here by me. I was going to say try having about seven right now. Thank you so much everybody. This afternoon, a big day here for the market. A lot to talk about, obviously. We have still got 45 minutes to go. Still gains of about 1 across the major averages. Much more ahead on the rally and whether this is a head fake or a start of a bull market for 2015. Also coming up Discovery Communications david zaslav from las vegas and how he plans to steer discovery through the storm of disruption in the media landscape. Stay tuned. Female announcer get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. Save even more on floor samples, demonstrators, and closeout inventory. The year end Clearance Sale is on now at sleep train. Your ticket to a better nights sleep last few weeks, you wonder whether, you know, the question is is this a oneday wonder or a beginning of a new trend . The dow up 173 points or 1 . The s p and the nasdaq up like a mountain at this hour and day two of the International Consumer Electronics Show in las vegas and not just about gadgets, by the way. Julia boorstin joins us now with david zaslav. Thank you for joining us. Thank you for having me. You announced the final renegotiation with the Cable Companies is done for the year. Right. And i know theres a lot of pressure with the number of cable subscribers flat to down and pressure to increase the rates youre getting. How did it get . We were able to do really well, a number of deals up and part of it is because the viewership of our channel is up over the years so five years ago we were about 5 of the viewership on cable. Now were about 11 with channels like own and i. D. And discovery, tlc, Animal Planet and a very good story to the distributors that more people spending more time with our channels and we have spent more money on content and we were able to get better than double digit increases. Which will be very helpful to us particularly because were seeing Significant Growth outside the u. S. In terms of subscribers and viewership. But inside the u. S. , its relatively flat and the growth has to come from either pricing or really outperforming the market with the channels. Better than double digit. Whats that mean 15 . Better than double digit. 10 , 11 , 12 . Nice increases on the subscriber fees. Not all of the deals were up. This year you know every year theyre somewhere in the range of 20 , 25 are up. Here everyone is talking about the new over the top direct to consumer services. Dish announced on monday. We have hbo, showtime direct to consumer. You have some offerings overseas. Are you going to launch one here in the u. S. . Overseas we actually have a really interesting product. We have a sports channel in europe called euro sport which is 130 million homes and bigger than espn and eastern and western europe and we offer a direct to Consumer Product for 7 a month and started a few months ago and going great and so thats a little bit unusual because since were in 55 countries, theres not one distributor for all of europe and able to offer actually euro sport directly to your phone and what were finding is its not changing the way people watch euro sport. The viewership is growing. But were able to establish a direct relationship with economics with consumer who is on the go want to watch Tour De France or tennis. Not cannibalizing the service, why not do it here in the u. S. With the Discovery Networks . It is trickier here in the u. S. Were working with the distributors. One thing showtime and hbo will do is not really directly with the consumers but working with distributors to do it and charlie announced with espn is for people that dont have cable. Trying to get the people that havent subscribed to cable but only have broadband and want some video so i think outside of the u. S. It is actually more progressive. In Northern Europe in norway denmark, sweden and finland, we have large broadcast and cable assets and in those markets we are going directly to consumers also. You are seeing a hodgepodge. Here i dont think its going to have a Significant Impact because the ecosystem of the Cable Operators and directv and traditional distributors is where the majority of viewing still happening, at least for the next few years. Interesting. Bill . How are you doing, david . Are you getting everything you want out of the Oprah Network . Its four years old now. This month, as a matter of fact. Youre finally getting some traction among women aged 25 to 54. So its a niche play right now. Face it. This is about oprah and you had High Expectations when you launched this network. You know are you wanted to be at this point . First, its great to see you, bill. Nice to see you, david. Funny you should ask because own is doing terrific. Last night was tyler perrys program the haves and have notes and it was number one on cable and beat the other Cable Networks and most of the broadcasters with a three rating in the demo. In the aggregate, own is now a top 20 network in america. Oprah is on the network and shes really having a huge impact. We also have oprah. Com which is doing very well. But most importantly, we were able to get very good subscriber fees from distributors approaching 90 million homes and the network is very profitable. And in a world where people are looking for content, a little bit differently, we have real super fans of oprah now on own and a big, big advantage. So the network is doing fantastic. It started four years ago. Oprah and i made a lot of mistakes. We have to figure out who the audience was and how to reach them. Today we have a terrific asset. Its also working well online where oprah is doing classes directly to consumers. David it is kelly evans here. A quick question on that. You mentioned online. People are entering and writing today to say maybe the digital streaming space or the top whatever you call it is luke rative. What can you tell us about what advertisers are willing to pay over the top versus traditional cable . Well traditional tv that is still the best value for advertisers. Theres no question that advertisers are starting to experiment in some of the other platforms and we are there with those platforms. We have a business of rev 3 reaching half a billion users a month of streaming video so stream video when you look at youtube doing, as you aggregate it up its a meaningful market. In terms of influencing consumers and dollars theyre coming in a meaningful way on cable. In fact, were seeing and its early, we are only in the going into the second week of january, but advertising is a little bit better. It was slow in the Fourth Quarter but advertising at least in the pricing is always good but the volume was slowing down a little bit in the Fourth Quarter. We are seeing increased volumes so far in this quarter. But theres a lot of reason why volume was down and pricing relatively soft in the third and Fourth Quarter of last year is because of digital. Advertisers shifting into digital and sort of seeing that as a real alternative. Are you concerned about that being an issue . I think the answer is we dont know. The pricing actually to be clear is quite good. The pricing was up you know in scatter between 10 and 15 which was good. The volume wasnt there. Were seeing more volume now. The question is, why wasnt the volume there . Were People Holding dollars for performance . Some Companies Holding dollars for performance for year end or shifting to digital . Experimenting and finding success or not finding success . We will have to wait and see. Out of the box in january, the volume looks better. Quickly, david, you know i cant believe we have gone this long without acknowledging you grew up in the nbc family and a big part of the proud. Back in the day. We were all talking at that time about distribution and how the explosion of Distribution Channels and now worse. Give me a sense of five years from now hoe were all watching discovery, all of your channels. I mean is it easier for you to find all of your audience through mobile or would you rather have it in a traditional fashion the way it is right now . Well, you know the traditional model is very effective and i think its going to continue, no question over the next you know over the next several years and people have alternatives and still watch the tv set in their home and watching more tv particularly outside the u. S. Where theyre watching more tv than they ever have. But we own all of our content. We have 14 channels here in the u. S. On average, 11 channels in 230 countries and so for us the fact that we have strong brands super fans for each of the channels and own the content sets us up. I think we have a big differentiator. Were the largest paid Tv Media Company outside of the u. S. We make more money than anyone else in paid tv outside the u. S. We have more channels than anyone else. The fact that we have on average 10 or 11 channels in every country around the world gives us a Real Advantage because many of those markets like mexico brazil argentina where i was last week or europe in europe we have 11 channels and theres only on average 50 channels and many of the markets will be a nice hedge for us because on a developmental basis they look a lot like what the business looked like hanging out together at cnbc years ago. I have to ask about your stock price, though. The stock down from the 52week highs. Off 25 over 12 months. What will it take to turn that around . For us, were focusing on the long term. So weve acquired euro sport. Largest sports player in eastern and western europe. We have launched more channels across the world. We launched in 230 markets between 2 and 3 channels in the last 3 years so were investing a lot more. We were investing 500 million in content. This year well invest over 2 billion. And for us thats where developing real longterm value. The market share around the world has tripled. We made about 10 of our ebitda outside the u. S. Were now over 40 and a few years we think well be maybe over 60. I think we are investing in owning more content, more ip more channels for longterm growth and you see it in the International Business growing almost 20 on average over the last three to four years. Certainly a Real International growth story. Thank you so much. Unfortunately, we have to go. Appreciate you joining us. Thank you. Thank you so much. Thanks. See you later. Whatever ebitda is. Earnings. We dont use that very often. I know that. I know you know but i was saying as an underlying thing for the people who might have been thinking were here to help. Well explain it to you. 30 minutes to go. The dow up 180 points right now. Been a good strong day. We know that. The question is what will happen tomorrow and the day after . Is it beginning of a new trend or not . Up next how a mid cap fund manager is outperforming the benchmark. Plus Billionaire Hedge Fund manager bill aikman sounding off on jcpenney this morning. It was a dying company and unfortunately today continuing to be a dying company. Dying company and continues to be so he says. So why is the stock up 20 today . The pros debate whether or not he is right about the struggling retailer or if its a stock perhaps that you need to own. Thats coming up. Stay tuned. Welcome back. Dominic chu is watching the big movers. Bill, kelly, start here with with janus capital, the home of bill pimco. Upgraded the Holding Company to an overweight from an underweight citing improvements in performance among other things. Shares up. Alkermes gaining ground after effectiveness of a drug. Arena, as well surging on positive data on one of the treatments for autoimmune diseases and here we go. You can see up by 77 and also going to wednesday the Home Builders news on that president obama set to announce at least reduction on fha mortgage insurance premiums. See homebuilders to the upside. Different story for mortgage insurers and may be more negatively impacted. Down on the day, as well. Back over to you guys. Thank you for now. Turning to our first beat the street segment of 2015 mid cap mania and now a few shining stars could be big winners for the portfolio. Nicholas fund is beating the benchmark up about 9 in the period. Joining sus the nicholas funds portfolio manager, David Nicholas nicholas. Happy new year. Thank you for joining us. Thank you. Thank you for having me. Why mid cap . I asked this before. Large cap i get. You often get an international exposure. And these are Mature Company that is will pay a dividend. Small cap where the growth is. Where jobs are created. Why mid cap . Well bill i think the mid cap sector you get a combination of both. Security with company that is are big enough to compete without some of the risk that is the small caps bring. You know, with not having a substantial business yet so i think those companies tend to be able to grow but also not be as volatile, if you will as some of the small cap stocks. Right. David, here mentioned some of the top holds in the health care arena. Tell us what they are and sticking by health care for 2015 or seeing other opportunities. We are more of a stock picker and thats important. We like Gilead Sciences which i know you have talked a lot about on your network. Right. We think they have its about ten times earnings and great cash flow and i think theyll have the ability to continuously reinvent themselves so they got great momentum right now and we think that will continue. We also like a Company Called valiant. This was the one that was involved in the merger with allergan and we like it a lot. Its, again, a wellmanaged company with great opportunities both organically and i think theyll continue to look for acquisitions. Very quickly, yeah. Let me just ask you this. If the fed raises rates, if the economy started to pick up enough that the fed raises rates, what impact does that have on an average mid cap stock here . Well, i think that would be positive. In particular, if the you know economy is improving. Mid cap as i said before will continue to grow just as the Small Companies will grow. And the valuations there are pretty attractive. We think the mid cap space is always good spot to be. Well well be watching to see which ones in particular you pick this year. David nicholas to kick off the beat the street segment this year thank you so much. Thank you. Love that fire out there. Freezing in much of the country right now. Some of you have an idea. Yes. Pretty windy around these parts, too. Not chilly in the market after a couple of tough sessions to kick off the year. Up 182. S p up 19 and nasdaq up almost 50. A story to be focused on, the gunmen at large in the deadly attack in paris earlier that killed a dozen people. Well have the latest developments on that from france coming up. When it comes to medicare, everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. [ male announcer ] consider an aarp Medicare Supplement Insurance Plan insured by unitedhealthcare insurance company. 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Cnbcs hadley gamble is in parris the latest developments for us there. Good evening hadley. Reporter well, essentially, what we understand is that three gunmen are still on the loose and police seem to be searching for two brothers in the paris area. We also understand that apparently Antiterror Police raided at least two apartments in the paris area looking for the attackers and attack blocks from where im standing. It was koord a french official a scene of carnage. 12 people left dead 11 wounded. Four seriously, at least two policemen were victims of the attackers and also some of frances most dedicated political journalists, political cartoonists, used to poking fun at some of the political elite in france. They have also been poking fun at the prophet mohammed and quite clear that the attackers not taken too kindly to that. Of course attacks by fundamentalists threats by muslim fundamentalists are not new here in france. People as well as terror officials have been coming out throughout the day and explaining the situation. Hollande has come out saying that the terrorists are going to be brought to justice. This is the most deadly terror attack in france over the last few decades. You have to also remember that the role that france is playing in the coalition against the Islamic State is one that not too many people here taking kindly to. France has a population of 5 million muslims, 1,000 we know of fighting with i. S. In syria and iraq and people here in paris rallying, thousands on the streets in solidarity with the victims of the attack and message is today we are all charlie. Cnbcs hadley gamble there in paris, hadley thank you very much. It is a remarkable sight to see hundreds of thousands of citizens taking to the street there is in different cities around france. Spontaneously gathering and on twitter and the website a similar image for the publication, at least. Heading toward the close. 19 minutes left. The dow up 190 points. Jcpenney shares up 20 today. Is it a oneday wonder in response to the stronger than expected Fourth Quarter numbers . Thats just next. You show up. You stay up. You listen. You laugh. You worry. You do whatever it takes to take care of your family. And when its time to plan for your familys future were here for you. Were legalzoom, and for over 10 years weve helped families just like yours with wills, Living Trusts and more. Visit us today for legal help you can count on. Legalzoom. Legal help is here. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. This is one of the surprises today. Jcpenney, we woke up this morning to decent very good holiday sales from the retailer up 3. 7 over that time. And the stock has responded accordingly to 7. 89. The Company Posted the better than expected figures and earlier this morning on squawk box bill aikman told our colleagues on the new new york set he had little confidence still in the xens future. Jcpenney was a dying company at the time we invested in the company. Unfortunately, today continues to be a dying company and we brought in what we believe to be the best ceo in the country in retail to change the business. Execution wasnt what it needed to be and that can happen. Didnt work. Ultimately none of the changes happen unless the majority of the shareholders support the initiative. So whos got it right . Ackman or folks buying jcpenney today . Mark hake and greg fuhrman. Welcome to you both. Mark, listen you have been a stalwart long on the name. You like the clothes. You buy them wear them. Et cetera. Just tell us after the surprise which some describe as a short squeeze are you still confident long term to go back to 15 range youd spoken with us about in the past . Yeah. Yeah. I am very confident in this company. You know, in todays announcement announcement, they implied the same store sales growth was profitable and im expecting a significant profit and at least a very nice Free Cash Flow number for the Fourth Quarter. Okay. Alex, whats wrong with marks reasoning here . I mean hes been a bull and things are starting to look up for this company. Why are you not convinced zblet. Well you know not surprised to see the stock strong today. People shorted this stock ahead of what they thought was a guide down for the Fourth Quarter. Ultimately, though we need to see mid to high single store comps for a good investment here. Theyre already talking about low mid single digit comps here in the Fourth Quarter. Youre going do get tough cover comparisons. I dont see it happening unless they get the sales growth. Looking at the best brands going either to other retail avenues or right to the consumer through their own websites and something you have started to see the last five or six years. Meanwhile, a lot of that comp growth is really focused on jcpenneys ecommerce business and you see about 10 to 20 points of basis to shift every year. Mark, respond to that. You know, youre talking about a company has close to 13 billion in sales. Just a slight increase in sales straight to the bottom line. Operating leverage. And two years ago at the end of 2012 they had very similar Fourth Quarter number and they had 400 million in Free Cash Flow so if you have two or three quarters of very profitable growth theyll be able to have their debt paid down or their book value increased and the stocks not going to stay anywhere near where it is right now. Its being priced as if its going out of business and just simply not going to be the case. I wish we had more time to talk in more detail about the future of jcpenney. Well have you both back at some point. Thank you both for your thoughts on this. Thanks for joining us. Thank you both. 12 minutes to go in the close of the dow trying to make further gains here as we do so up almost 200 points. Better than 1 . Identical gains in percentage terms. S p also up 1 . Bob doll right about the markets in 2014 and very wrong predicting actively managed funds to beat indexed funds. Hell tell us if hes still bullish on the market and fund managers. He is here after the bell coming up. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. 9 30 left in the trading session moving higher. The dow up 200 a moment ago and now 196. S p, look at the nasdaq and dow up equal amounts percentage wise right now. Joining us are Larry Mcdonald along with bob pisani. Welcome to you both. Larry, i had to crash. First line of the note the u. S. Dollar setding up for a sharp decline and i got to hear why. Boy is that a counterintuitive play right now . Think back to the fall of 2013. The dollar was getting out of hand. Emerging market currencies and bonds were in flames and the fed started to talk the dollar down. The dollar went from 85 to 79 from the fall of 2013 into 2014. Dollar index. Yeah. Getting point now in the next couple of days we have got rosengren, we have a lot of fed speak. If they mention the dollar as a concern, theres so much pentup bullishness in the dollar, it could create a reversal and in oil talking a correction . Correction totally understand and overbought and too much strength perhaps, whatever they call it in the market. Talking about more than that or no . A sulback is a bull market for now. If they continue that fed speak, then youll see a more pronounced why would the dollar sell off right now . Raise ratds. It makes sense. Bach back to the same reason and bonds last year. Everybody is in one side of the boat it is the most dangerous trade on earth. Look at oil. Bonds. Short bonds at 3 . Here we are under 2 a year later. Oil, what i saw fascinating this week the bno etf, brent etf trading 92 below the 200 day. Wow. On a technical, but thats a technical call. We are so far oversold on oil. We did a story this morning with kencoh and five times in 30 years when oil has been sold 50 down in 6 months thats it 5 month times, 6 months, oil is up and up an average of 50 . History tells us on the technical level theres seeing these extremes, theres a bounceback we get. The catalyst could be some of the fed speak. The fed talking the dollar down. Thats oil. We havent had the extremes. I dont think were there. The fed talking the dollar down is very good for oil. You understand all the skepticism people have when they hear you say the dollar is going lower. I understand the correction. I get that were all set up too perfectly but for something more significantly to happen. The 10year drop below 2 when the fed minutes came out. Supposed to be hawkish. Riddle me that one. Consensus around june they pushed that away. Were data dependent. I think trying to poopoo this. I think were getting the music. Like we are at the oscars now. Red lights going on. A quick break and come back for the closing countdown. Right after the bell, are you ready to run a franchise . Kate rogers has a special report on boon time for franchises and if kates numbers line up with what kevin oleary is seeing. Maybe hell make an investment. Maybe. A couple of minutes left in the trading session. Today, rally day for the u. S. Equities. Right off the bat for the dow pretty good move higher here. In fact near the highs of the session with a gain of 210 points at the moment for a gain of 1. 2 . Also buying treasuries as bob pointed out. The yield on the 10year back below 2 . 196 right now and trading and one more price of crude oil, kind of a mixed day. Wti, though up 1 . So we saw a movement. But look how volatile crude oil has been today and back to 48. 50. You think we should have an even bigger rally. My disappointment is oil stocks not doing much today. Exxon, chevron. Xop, the Oil Exploration production basket is down today 1 . We should be getting dramatically oversold and a little bit theres the xop. People waiting to rally for three weeks now and on a day with oil stabilizing, you should have seen a move to the upside. I think thats a little bit disappointing. You see the dollar correcting. Do you see oil coming back here . I see a move up in oil triggered by potentially the fed talking the dollar down. It would be a really fed move and we were just talking off and look at the xop, the oil etf, versus oil stocks oil is trading cheap to the stocks today whereas in the past say, october 15th the stocks were trading cheap to oil and same thing of gold and gold miners. Right now i would play the oil versus the oil stocks for the next week. On a different note retailers reporting tomorrow. Holiday sales, jcpenney huge story today. It is the week late. See what exactly the point. See what other people are reporting tomorrow. If they have positive news big plus. Very good. We are going out with a 200point gain. Thank you. See you later. As bob said retail sales reports tomorrow and market moving and well get ready for the big jobs report on friday. Stay tuned now. Hour number two of the closing bell with kelly evans. See you tomorrow. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. We have a green day this week on wall street. Heres how were finishing up the day. The dow going without a gain of 1. 2 or 210 points. S p up 23. Nasdaq adding 57. Gains of about 1 1 4 for each of the indexes and saw momentum pick up into the close. Lets get to it with the panel. Joining me is lee gallagher, stephanie link and kayla tausche. There are people that turn on the televisions or look at market saying really after the shocking events of paris this morning . Are you surprised at the resilience today . No i think we are a bit oversold heading into today to begin with and then the fed told us what we have been saying far listening time the economy is getting better. That Lower Oil Prices are good for the economy. And that Interest Rates probably staying pretty low for the next several meetings and starting to tightening, its gradual and data dependent. All of this means good things for the economy, the consumer and for earnings. And i think thats whats going on here. In addition, low Interest Rates very positive for stocks. Right . And again, for the economy. I think theres a lot to be encouraged about. We did see stocks kayla, high of the session and then came back a little bit bouncing around. Is that the focus the minutes or because theyre a couple of weeks old is it other drivers in the market from here . I think investors like whad they saw in the minutes. The fed is committed to doing what the market needs and also reaffirmed underlying confidence in the direction that the economy is moving in but also patience at the same time with the way that theyre adjusting monitor policy to counter that. You think about some of the retail numbers we saw this morning. Thats really providing a bid under the market and investors say theyre stopping to focus on the past minutes and december data that was negative and now going into 2015 whens happening ahead . Earnings season next week and some of the consumers effects and retail sales starting to trickle through. A question for everybody. If you like the jcpenney numbers and the story there and is it the only game in town . Only stock whose expectations low enough and the bar the clear or other names to buy and look attractive here and going to work . I think it is hard to predict. Today we saw consumer names do really well and i think all of the indicators that they talked about are going to push forward everything. I mean, those are macro numbers and a jobs number on friday and i think theres anticipation built into that. Last month was the best we have had so far. And were seeing wage growth now and thats likely to grow further when the labor market under a tighter labor Market Conditions so i think everything is looking really good except for oil. Kelly, i mean in terms of the jcpenney reaction 30 of the flow short. Thats a 20 move. Look at the stock last year. Practically at the low. Very low expectations. Analysts lowered the ratings in december. Cutting numbers across the board. That said, going to jcpenney theyre going to macys and nordstrom. Not going to wet seal. Exactly. 3. 5 . The entire sector up. And even under armour. Nordstrom rallies on the jcpenney numbers . Just in general. But look at the auto numbers. Weaker than expected. Come on. They are. You cant get better than 17 million. Why is ford at 10 . I dont understand this. Ford has their own issues and product mix issues and gm with issues last year. But youre talking about a 19 growth rate at gms december auto sales. Thats phenomenal. Yeah. 20 at chrysler. Ford has their own problems but those numbers very strong and then finally look at housing today. Those stocks i know they were up with the mortgage changes. Right. However they have been acting better and beneficiary of lower Interest Rates. And a view from brian kelly joining the fray you. What are you buying today . Stephanie mentioned the housing names and really interesting and might think that the fha news is a little bit but housing is so big an such a huge part of the economy that to me thats starting to say if the government is once again going to support the Housing Market then those names could rip particularly with lower Interest Rates and the fmoc minutes matter, not three weeks ago but the state we are in now. They talked about Inflation Expectations needing to go back to 2 . Since the meeting, Inflation Expectations have continued to fall. That says to me the feds going to Start Talking down the dollar. You need to start preparing for a weaker dollar here. Thats what Larry Mcdonald told us. Great minds think alike, kelly. Okay. Hold that thought for a second because we want to incorporate the themes with the next guest bringing us his predictions for 2015. Bob doll, chief equity strategist. Welcome. Thank you. What is your view, first housing and then the dollar next year. This year. Its already 2015. Housings important. But thats the early cycle. It is not going to make or break us if its okay and it will believe. The dollar thats a big story. The mirror of oil. No question about it. Hard for me to see the dollar not rising. Compared to the euro stronger growth here. Weaker growth there. Fed beginning to tighten. Ecb needing to weaken. Perfect recipe for euro down dollar up. Brian, what makes the dollar fall substantially from here . Well so listen. Im looking at a second half of the year dollar rally. Right now, one, number one poxing. Everybody is in this long dollar trade. I think cab drivers are telling me to get long dollar at this point in time. Okay . Number two, when you have positioning like that and you have falling Inflation Expectations here, thats a reason to get out. Bob mentioned that you know europe is going to be easing a. Lot of that is priced in. Potentially they do. Whats going to happen when europe eases . Everybodys going to rush into European Assets and what do you need to buy them with . A xwru ro you yochlt sell the dollars. Buy the euros and then europe ran assets. Before you respond, bob, give us some of what you would call contrarian predictions. The u. S. Will contribute more to global gdp than china. Thats an important one. I think equity much pull funds see inflows this year. As active managers have a shot in a more selective environment doing somewhat better. So the u. S. Growing more than or contributing more than china. Does that mean that china really falls or does that mean that u. S. Actually really rises . More to expectations . Some of both. If the u. S. Can grow three real almost five nominal, thats enough to put the increment higher than china and clearly slowing. Not a basket case but has to do less investing and work on consumption and thats a multiyear process an doesnt happen overnight. A new normal Going Forward with china . Thats a big transition an one we went through. No question. Its multiyear transition. Look. I think chinas going to be just fine. Its big. Its growth rate is the envy of most other places. What is the worry spot right now . My biggest worry is deflation threat of oil, ecb with nominal growth close to zero. Several countries in recession. Inflation number negative. Europe needs to get out of that deflation rut for the world to be okay. Bob, are they able to do is draghi able to do something with Interest Rates where they are and the euro where it is . Will they have a big bah zoo da ka . Two weeks . I hope were not disappointed. Its time to do what it takes. I think the backs are to the wall. Greece russian sanctions, germany slowdown. Whether they say yes or not who knows . They dont have to say yes for draghi to move forward. What about the jobs number friday . How strong do they have to be to justify markets at these lows . 240,000 in 2014. I think a shot at that or more call it 250 and 3 million new jobs. We havent been there in a long time. We havent. Brian kelly, europe and long or exposed now ahead of the decision of mario draghi what does it take from him at this meeting here to not disappoint investors globally right now . An awful lot and probably more than he can do and why i think in shorter term short to medium term we get a weaker dollar stronger euro because weve all expecting something to happen. He is constrained about the germans. At the same time, the eurozone is too important for anybody to let fail. Something will be done. People anticipating it. Probably not the time to be pressing euro shorts. Same time of the numbers this morning of european inflation negative. Exactly right. Even if the ecb does what we hope and expect im not sure thats sufficient for europe to get out of its rut. Thats a necessary condition i think but it needs structural reform and doesnt happen overnight. Very difficult to happen. By the way, what do you think happens with oil and commodities here . Path of least resistance still down. Look. What do you make of the decline we have just seen and still happening today being a slight its the magnitude, the pace of the decline is obviously what has us all concerned if this happened 100 to 50 over the course of 2 or 3 years we would be saying yes. Its the decline that causes concerns of credit and other dislocations to get through. If and when we get through that i think its when and not if its great news and we couldnt ask for much more than low oil prices. To you, brian kelly, do you feel like the low oil story is here with us to stay and how are you setting up for fridays jobs report . I dont think the report matters anymore. The fed told you theyre concerned about inflation. Oil, number two, somewhere around here. Were in the range of the bottom to be put in. That being said i do not think we go back to 100 a barrel. The rigs coming off line theyre easy. It takes a month to put them back on. Gasoline demand is dropping. One week. You know i think we are in this range. Ill call it 50 to 70. All right. Thats still a high end of the ranges im seeing lately are. Thank you so much. Bob doll thank you so much. Be sure to stick around brian with the fast money crew at 5 00 talking with the ceo of gopro nick woodman. The shares have been under pressure. Oil prices plunged nearly 40 in just 2 months. Next guest said the folks shorting oil just getting started. Well talk about that straight ahead. Could the fed shock wall street raidsing rates sooner an faster than people think . Goldman sachs ceo saying dont rule it out and the chief economist that works for him said rates wont be raised this calendar year. Well talk about in it a bit. Welcome back. Lets send it over to our dominic chu for a market flash. Watching shares of herbalife. They were up about 4 in the regular session. Earlier this morning Hedge Fund Manager bill ackman talked about the short position in herbalife and they responded with a statement via a spokesperson saying that bill ackman is entirely predictable with the put options expiring next week he is off on yet another tirade of misrepresentations to drive down our share price. The facts of the business are inconvenient for him and he clearly has no interest in learning them as evidenced by his teams lastminute cancelation of a meeting last month that he requested. End quote. Again, that was a statement from herbalife via spokesperson regarding bill ackmans appearance this morning talking about the short position in herbalifes shares. Back over to you. Thank you. Turning to oil, below 50 a barrel and comes off fresh lows today. Jackie deangelis has the latest. Thats right. 72cent pop at the close at 78. 65 and low this is morning under 47 for wti and under 50 for brebt which is fairly significant. Traders are telling my this is a technical bounce. Typical when you have seen the kind of selling pressure of the last few days but the bearish factors remain. First, you were talking about it. The dollar index at 92. Strong dollar lower crude. Also inventories today. Gasoline, 8 million barrel build. Not the first week the see this. It indicates that demand is not out there. China forty quart gdp, talk of a fiveyear low and people are worried about demand with the china picture so all of these things together i dont want to be Debbie Downer here and looks like we are going lower. All right. Jackie, lets find out. The next guest says volatility in oil is not going away any time soon. Were joined by kathleen kelly, welcome. Great to be here. Start with the positioning in the market. How long or short is everybody now on oil . Positionings not that bad looking at short tons commitment of trader. They have come off a little bit. Theyre not as high as they have been for five years. Longs arent that long. Also, they have been coming off and might have been year end book squaring and the selling of the last two days probably people putting money to work in the space so i think we have seen the shorts start to show up here and i think just at the Time Starting to see positive signs of de. What are the positives that you see in demand . Rig count is coming down. What are the factors to push oil higher from here . We have started to see china is pretty good and imports. U. S. Gasoline demand is picking up. In december at the highest ever for this time of year. You cant look at the weekly numbers we saw now. You have to look at the three or fourweek average and picking up strongly. We have seen the put skew really off as far as puts versus calls and people are positioned for a downside move in this now and setting up that you might see a move up. Dont forget we have an index rebound that starts right now and starting i think tomorrow for all the index rebalancing and thats very positive for both crude and brent. In the fed minutes they talk about oil and the fact of the lowest levels in 5 1 2 years. As a temporary situation, we are seeing some corporates make some permanent decisions, layoffs, reorganizing the capital structure based on the price of oil and wondering whether you think its temporary or more of a longer term phenomenon. Producers produce. Thats the job, right . They have been through the cost of production many times forget. As were seeing crude prices come down cost of production comes down and across the commodity spectrum. How much . Youre seeing energy costs as a different factor. Right . Crude doesnt have one of the Higher Energy cost factors in the own production but metals do, you know you are seeing that in others. Construction costs come down. A you will of that for drilling and mining to come down. So people have to thats one of the risks were not going to see the production cuts as fast as we want to. To that exact point, when do you think were going to see the production cuts . We are starting to see the cap x cuts, right . No ones changing the production cuts. Is that the next shoe to fall if you will . Maybe during earnings season and do you think earnings estimates have already come down enough or is there another leg down . I think the guys look through the cycle and they have been through the cost of production before. They have been above it for a long time and produce through the cycle. I think what youre more likely to see is opec make a move. Iran is startinging to a bit more conciliatory. If we see them make a deal on nuclear then we are going to get for sure the saudis cutting so i think thats more likely to start stemming the fall. But i think you do definitely you can see crude prices lower. At this point right here you are starting to see demand pick up in lot of different countries. I like your point on this that a lot of focus, once we saw this huge sudden drop in crude on and how long everybody was in it june and if your point is that the market is balanced perhaps some of the financial factors if you will have flushed out. I dont know how else to put it. Maybe perhaps its some sortquilibrium here. I dont think its a move in production. We can either get domestic prus opec production or we can get demand to pick up. I think what you are starting to see is demand side to pick up. If its enough to stop the move for long term is unclear. For here its clear. Thank you for being here. Thank you for having me. Is the market in for a rude surprise this year . Many believe Interest Rates will be hiked this year and it could happener sooner and more than expected. Kevin oleary think the franchise numbers bear out on the ground for entrepreneurs . He joins us later. Welcome back. We begin here with an earnings alert. Dom . Kelly, what we are watching is you bick wous wd40. Yes, i use it on everything like franks red hot. The Company Posted weaker than expected First Quarter results. The shares down by about 4 . Among the things cited here weakness in sales in european markets and linked the decline to impact of Foreign Currency Exchange rates and a things to see develop in the earnings season and foreign sy currency rates as a headwind of the company and they say, interesting here a Global Marketing organization for lasting memories of workshops and this is what they say. I love that. I love that. Wd40, a miracle product. It is. I use it on everything. Truly, a gift. Thank you. But again, the shares under a little bit of pressure there. Goldman sachs chief economist with a note saying the first increases from the fed could be pushed back to 2016ment this morning goldman boss ceo of the firm had this to say about rates. A lot of the World Structure has been built on assumptions and im afraid that one of the assumptions in the last go around was the assumption that houses prices cant do down by 40 all over the world at the same time. Do you think theres an imbedded assumption that Interest Rates cant go up sharply to a very high level over a short period of time . Little bit. Joining us right now, kevin oleary who think there iss a chance the fed could raise rates this year and Rick Santelli is back saying he doesnt think the fed is hiking this year. Kevin, why do you think they move forward on this . Because im an optimist on something that we have turned into a pessimistic story. I think about 65 of those that look at the energy decline and repeating and said this is bearish because its an indicator of inflation. I ask myself if we could reengineer the economy of zero cost of energy isnt that a good thing . I dont think i find anybody that would argue that zero energy costs and input costs on energy wouldnt be good so as Energy Declines i take it as an optimistic index in this way. We havent given the economy enough time to absorb the impact and so by q3 and q4 i think we will have bullish growth and earnings. Im an optimist kelly. I hope its going to 35. Understood. Rick, i know we have talked about what you think the fed or shouldnt do. What do you think in this case theyre not actually going to raise rate this is year and why . I dont think they will and i think its most likely because of the second pillar and that of course is price stability. If you look at the original congressional legislation, it doesnt say 2 . Doesnt mention inflation. Doesnt mention deflation. It purely states stability of prices. Doesnt say whether its stability to come at minus 1 on pce or plus 1. Relatively stable prices. And i would say that they are stable. But in the feds eyes and all due respect to our shark tank host there, there are many central bankers around the world this pointed fingers right at the Energy Market saying you know, this is creating deflationary pressures and it is really rich coming from japan who imports all of their fuel and be careful of assumptions and trust me. I did it in terms of no Interest Rate increase in 2015. Trust me if anybodys going to know if it is going to occur, it most likely is somebody at goldman. I would going to say, as people talk about not just the deflation of drop in oil but the negative effect on the oil patch economies. How do we know whether it offsets the boon that kevin is talking about . Thats absolutely right. I think theres a point here. You know the Oil Industry Everything is renegotiated down and pay different prices when everything is flush and theres less of an impact there. But i dont know. To lloyds point, we are used to really low Interest Rates and unexpected things can happen. And they always happen. When you dont expect them. Im not saying hes right. Look at oil. Look at oil. That just nobody was expecting and just happened. Exactly. Even the financial crisis. He is right about this. Hey, rick do you think we see higher wage growth this year . And if so, does that force the fed to do something earlier in your mind . Listen. There is nothing that i would welcome more other than tickets to a cub world series than rising wages. But i dont see that theres anybody out there that is doing anything really thats going to help wages. As a matter of fact, im a Firm Believer that right now that Corporate America and indeed many multinational corporations around the globe have it pretty good. We live in a Global Economy where education hasnt caught up to globalization. You have just boatloads of cheap lay before out there and i would wish to see but i dont think we see it in year or years to come in a sizable fashion. Kevin, why do you think we are going to see it . Lets take the most pessimistic scenario and let me explain why its a good thing. Lets assume that all of the debt that has been given to Oil Companies is defaulted on. I mean every dime of it. Okay . Right. Heres why thats good. Theres been a lot of cheap money given to at will of idiot Management Team that is have bought assets they can never afford if rates go up. Say they default. The ownership of the assets revert back to the bondholders and through litigation the strong managers end up with the assets. This is like a spatula coming from heaven and cleaning up the entire energy index into stronger hands as we move out of this low. I argue that this is a good thing. Its good every once in a while to flush the weakness. When a dish dies in the ocean, the crustaceans eat it. But if the fish died in the ocean and janet yellen was in charge of oceans she would have a moratorium on dead fish. Mixing metaphors. Which one is more likely tickets to the cub worlder is series or wage gains . Wage gains, absolutely. We love it. Thank you both. Thank you, rick. Have a good evening. Kevin, see you back here in just a bit. Up next the latest on the tragic and deadly shootings in paris. 12 people massacred by gunmen who you can see here escaping in this amateur video shot in the terrorist attack. Well have the latest on the manhunt for the murderers, next. Hiring new employees can be tough. But it doesnt have to be. Because now you can post to over 50 of the top job boards with just one click with ziprecruiter. Find candidates in any industry, nationwide. Just post once and watch your qualified candidates roll in to ziprecruiters easy to use interface. Find out today why ziprecruiter has been used by over 250,000 businesses. They even offer a 100 satisfaction guarantee. And right now, you can try ziprecruiter, for free. Go to ziprecruiter. Com free30 horrific day in france. 12 people murdered by terrorists in paris in attack on the offices of a satirical magazine that has previously published cartoons of the prophet mohammed. Hadley gamble joins with us the latest. Haddy . Reporter hey kelly. What we really understand now is that the police are searching for three suspects two of whom they believe to be brothers from the paris area. We also understand of course that these Antiterror Police according to the paris daily, they understand that they have been searching apartment buildings in the area as well. Now, you have to of course remember Francois Hollande is having a tough time as president and everyone is watching to see how he reacts to the situation. He was out on the scene just blocks from where im standing where this horrific attack took place today. 12 people murdered. 11 wounded. Two of the victims, policemen we understand. Some of the other victims, famous french cartoonists for this week lisa tir call paper charlie. We understand about these guys is that theyre used to poking fun at french political figures. We understand also that these attackers obviously did not take kind to some of those political cartoons including those of the prophet mohammed. At the same point, thousands of people already gathered. They have come out to show solidarity and support for the victims of this attack. Were seeing similar things across europe similar protest movements in london brussels and of course in spain, as well. Well have to keep watching to see what comes over the next couple of hours. We understand these Antiterror Police are hot on the trail of the three suspects kelly. Our hadley gamble thank you so much this evening. The manhunt continues in paris for the terrorists. Lets bring in Clint Vanzandt as a former supervisor of the fbi profiling unit. Good to have you back. As we get details about this can you tell sfishow sophisticated and preplanned this was . I think it was preplanned a lot. They used multiple vehicle. Same uniforms. They had weapons. Ak47s. Rpg rockets. They used to threepoint straps to carry the weapons. They probably have body armor on underneath. Bottom line is these three guys didnt fall off the terrorist turnip truck. Theyve been around before, had training support. They have got intelligence. They have planning. This is something that they plan on doing. They went. They executed it. Not only did they execute their plan but they executed 12 people as well as wounded 20 others and one more time we see the bulls eye thats been placed not only on journalists but on police. We lose two more Police Officers today. Its like its hunting season against Police Officers. What it is uniformed standout bad guys know if they take out the cops right away they have a clear field of fire at somebody else. Thats what they did in paris today. Understood. Its interesting to to me seeing ing ing, some beginning with a cartoon of 11 28 mocking the isis leaders new years message and then attack at 11 30 local time. Two minutes later. Is it too much to think its a spontaneous response to that tweet . Yeah. I think its too much. I think theyre planning. They had the game plans in. A couple of things though. Number one, initially, they ran in the wrong building showing no matter how well you plan you can go in the wrong building. Its a terrible incident. Can you imagine they run in looking to find their soon to be victims an theyre in the wrong shop totally. So they have to do a 180, come back out and start all over again and they did that. Whats interesting is what was just reported. Supposedly the french identified at least two brothers. Where does that take us to . Just in boston where we saw two brothers that were part of that attack too. For similar type purposes religious in nature. Just to be clear because we havent confirmed the details yet, i dont want you to speculate on it too much but whats interesting to go back to the nature of this and some others in the Intelligence Community have said perhaps this is one part of the islamic jihadist community for lack of a better word against another. How do we know if it isis or is it one upmanship or Something Else . At least one of the individuals said taking credit we are al qaeda. Let the world know. So he was out there to deliver that message. The question is whats the purpose . And again, one more time in the world where were held responsible. We have to separate religion from politics again. You know . We have to separate the sin from the sinner one more time. And were looking at someone who did this for political reasons, perhaps religious reasons. But that doesnt mean we should hold the religion itself responsible. This is the challenge for me. I assume its a challenge for the rest of the world trying to separate islam in this world. For the professionals in the media. Final question. What kind of Intelligence Response do you expect now . What do you think would be the right way for those who want to make a point about free speech to respond here . Well i think whats being done right now, the rally thats going on the way the world is rising up again. Weve got two communities to support. Number one is journalists and their right to say whatever they want to within the laws of free speech in that nation. Number two, Law Enforcement thats sworn to protect these people and interesting one more time how vulnerable police have been. These are the groups. This incident shown us one more time to support but free speech has got to win out. We cannot be muzzled by three bad guys and two ak47s. Clint, thank you very much. Our hearts go out, of course to all of the victims. Well be right back after a short break. Readers on the website following the tragic terror attacks in paris, too. And other stories drawing attention. Hi allen. Yes. That paris event drew a lot of readership. And the Oil Obsession continues. We are leading with a feature taking a look at why oil prices are likely to go lower. And the short answer is we had the new readings on gas inventories this morning. Way beyond what everybody was expecting so were swimming in the refined stuff. Theres not going to be much demand for the crude stuff. Number two, and this is a story that i know youll really be interested in kelly. Bank rate survey looks at 6 out of 10 americans do not have enough in savings to cover a household emergency. Oh in. Like an emergency room visit or a 500 car repair. Bank rate survey. Wow. 28 of those surveyed said they would just go to Credit Card Debt and pay for it that way. Yep. So often happens. Slippery slope. Looking to save money, we have a feature with whethers happening with Interest Rates, might be time to think about refi. Refence refinancing your mortgage. Estimates put 7. 4 Million People could actually get more than a percentage gain out of refig right now. Thats a big savings. Can i ask an industry question . What is your Mortgage Rate . 4. 2 and thinking about maybe could i really squeeze a full point out of that . You know i was talking, jim and i have been having a funny conversation of watching Mortgage Rates as closely as watching stock prices. When he was much younger. Do you know what i mean . You can almost quote it at hand. Did you see the 10 or 30year today . Bring the Money Matters and come home some day. There you did. Allen, thank you. Good to see you this afternoon. Thank you, kelly. 2014 marked the fifth Straight Year in the growth of entremendous premurs becoming franchise owners but with the Affordable Care act, will it be as attractive Going Forward . Kevin oleary weighs in next. Tune in tomorrow Constellation Brands rob sands will join us in an exclusive. First impressions are important. Youve got to make every second count. Banking designed for the way you live your life. So you can welcome your family home. For the first time. Chase. So you can. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 Straight Years. One pill each morning. 24 hours. Zero heartburn. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with efficiency . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the wellequipped volvo xc60 today. Visit your local volvo showroom for details. Franchising was booming last year according to an annual Industry Report but some new concerns are cropping up for franchisees in 2015. Kate rogers joins us with the details. Welcome. Thank you, kelly. Thats right. Despite the regulatory hurdles, owners say could hurt the bottom lines, 2015 is projected to be yet another year of solid growth for the industry. The International Franchise Association Says the sector is set to grow by 5. 1 this year up for the fifth Straight Year in a row. Economic output from these franchise businesses is an estimated 889 billion. This means cash to be made and jobs to be created, more than 12,000 new franchise locations in the u. S. Will create more than 247,000 jobs in year. But despite that sunny outlook, a government regulations are in the way. According to the ifa and the membership, both minimum wages which have been hiked in 21 cities as of the new year and the Affordable Care act have owner s owners like one i spoke to today concerned about his future ability to grow. Now, the ifa says 85 of the membership believes these two issues will have or have already had a negative impact on their businesses. Back the you. I love auntie ems. This is a surprisingly common conversation and now seeing the numbers, that explains it. About people anecdotally saying why dont we open a papa johns or one of the rest rapt names . Started 20 years ago with one location and now over 70 across the country and concerned about the regulations. Lets ask mr. Shark tank himself kevin oleary back with us. In the first place, would you get into the franchise business . Secondly, with some of the concerns kate mentioned here . Well those are valid concerns. If you poll at the state level or the city level people that are operating businesses franchised or just standalone they complain consistently complain consistently about regulations that are not just federal, but state and municipal. Were probably at a Tipping Point now for the first time in our economys history that we have burdened these businesses in a way that is making us less and less competitive. The franchise model, one of the dark secrets about it to understand is the reason its had such strat atmospheric growth over the last five years is the dirty truth is for small operators, lets say youre starting youve got three or four successful retail operation, and you want to expand and keep them corporately on the other hand, you cant borrow that money from banks anymore. I dont care what anybody says. I live in the streets. Ive got 21 investments in small and mid cap businesses. There is no capital available for them at all. So they have to franchise. Thats an interesting point. How much do you guys here on the panel as wealthy that the ability to open and finance some of these places is a problem . Well i mean, it makes sense is right . Its been a tight market for a while. Maybe that starts to loosen up as the economy improves. I will tell you from owning Companies Like mcdonalds, thats been a massive success and part of their story. Youre not talking about being a franchise owner. No, no, no. But we own the stock. But a lot of the restaurants are doing it. And they all pretty much have to do it to compete effectively. Its going to be interesting to see how it all works out. Look at a marriott. Look at the hotel chains. Sure. So many of our biggest brands operate on franchise models. Oh by the way, people think franchising supports small business. Some of these franchisees are very, very large. They grow to become huge. And were now in the 60 era of deleveraging cycle. So a lot of consumers do have dry powder. Theyre getting the benefit of the refund of lower gas prices. Interest rates are still low. The 10 year below 2 . Any loan they would need or any type of financing that is priced off of treasuries is still going to be very affordable. It might be a ripe time. What you just mentioned too about low gas prices is something the ifa brought up on their conference call. The retail franchise businesses are doing fantastic. Let me just ask you, kevin. Give us one example of a franchise business you would get into and one you wouldnt to right now. What i have learned is having looked at probably 100 over the last six years, youve got to understand the model is to extract 5 to 7 in perpetuity off the franchisee. The only reason they would do that is theyre getting some value. For example, national marketing, a national brand, et cetera. Too often what ive seen and what ill never do is get involved in a franchise rollout at an early stage. Just because youve got one or two or even six successful locations, it doesnt mean youre capable of rolling out a National Franchise operation. Extracting 5 to 7 which is the average of the franchise model is basically a 33 component of the companys profit of the individual operators profit. They better be getting a lot of value. And the only way that works is when you get big and successful and are able to corporately manage the process. So talking about mcdonalds is one thing. And thats been successful for decades. But if youre rolling out the next hot lobster store or Something Like that, ive been involved in those. And they go to zero when they collapse on their own success. It sounds like a ponzi scheme. Getting 23,000 from 15 people and not giving them any value for it. Im very cautious about that. Im glad to hear. Because actually again, a lot of people have looked at this and thought maybe i can make this work. There are many important considerations. Kevin, thank you. Good to see you. Kate oleary, thank you so much as well. After a 002 phew days of steep losses, the market is staging a rally today. Will tomorrow be more of the same. If you didnt buy the dips earlier in the week is it too late . Our panel with thoughts next. The evolution of luxury continues. The next generation 2015 escalade. Stephanie, starting with you, i know today was a little better. Its a little early to throw in the towels. The first week is always a little crazy. Pms are repositioning their portfolios. So you cant read too much into it. We have very encouraging data on auto sales. We get bed, bath beyond. We get the Container Store after the close tomorrow. Keep an eye out on more retail and hear more about the consumer. Theyre in pretty good shape. Bank earnings next week are going to be very telling for the market. I think everybody is expecting that margins were compressed yet again. Now thats been well telegraphed. What did trading activity look like and how is some of the volatility actually translating into business, or is it . Right. I know were not going to get that for a few more days but i know a lot of analysts were setting up for it. The jp call for goldman to break it up to create more value. Wells fargo, one of the great performers, the best in this space, up 27 . And surpassing citigroup as the biggest bank ever. Surpassing citigroups early 2000s record when it was at the height of the empire building. Pretty massive record. I think everyone is calling for wells fargo to cool off from here. Its a Business Model very different from some of the over bracket banks. But well see how it fares. Inits interesting on the banks in general. Can the better economy push up loan growth and costs continue to be contained. And will that offset the pressure. Thats the question that we have in the portfolio. If they werent coming from such a low base would there be all this positive momentum just because improving economy just what has happened with Interest Rates. Certainly. And i think there are going to be pockets of the financials that do well. Mortgages, well see how that does well. How about credit cards . That should also do pretty well. So of these conglomerates will probably see pockets good and bad. I have to get confident in the net interest margin. Some breaking news with. Three names of suspects according to an anonymous French Security officials in the killings today in paris. The two officials that theyre quoting say the suspects name are syed and shareef kuachi. They are brothers as well as 18yearold hamid murad who whose nationality wut wasnt immediately clear. We know shareef and sayeed are french. Were waiting to see if there are any arrests. Once again we know the names. Back to you. Michelle carusocabrera, thank you so much, michelle. Confirming some of these details that two of the suspects are now named suspects were in fact brothers in the paris terrorist attack this morning. My thanks to the panel. Thank you to everybody or the watch closing bell. Fast money starts right now. Live from the nasdaq studio, overlooking new york citys times square im melissa lee. Our traders tonight are sim seymour, brian kelly, karen finerman. Rough day for gopro. The stock ending lowering by just 4 . Well hear from the companys ceo nick woodman. First, stocks staging a major rebound, snapping their fiveday losing streak with all three major averages ending the day higher by well over 1 . The dow finishing up 212 points. Oil, take a lack at this. Finishing in positive territory, putting an end to a fourday slide as fears over a greek exit. Brian kelly, you said the fomc minutes were big today . I actually think they were. I think what the fed told you in the fomc minutes today is dont worry about jobs anymore. The job market is not their biggest concern. Their biggest concern is Inflation Expectations. They said they need to see Inflation Expectations go back to