Transcripts For CNBC Closing Bell 20150122

Point trading range from top to bottom. Sglefr single trading day this year as youve said. Incredible were up 261 points. We should remind everybody in case you missed it this morning or some hugh a historic day. European central bank decides it will launch quantities taitz difference easing. Japan was first back in 2001. The u. S. Followed suit. Now its europes turn. The baton is being passed and markets are rewarding it. Say with us for a closing bell exclusive, david mckay in his first interview since becoming ceo. Much to speak with him about. Of course moved today by the European Central bank. Also canadas surprise rate cut yesterday. And they make a huge acquisition. National city bank today. He will tell us about it and their plans for the u. S. Denmark cut overnight by the way. Another surprise rate cut. Exactly. They have to respond. Its a cascade. A race to the bottom as it were. And when it has a gate at the end of it you know its big. And the nfls deflategate is now hit thissing critical mass. Bill belichick earlier today said he knew nothing. And tom brady is scheduled to speak in less than an hour about this very issue. And it occurs to me thats what mayorrio draghi and Bill Belichick have in common. Theyre both fighting deflation. Yes, they are. And in the markets right now again coming up with new tools, launching new programs and seeing a reward at least in the short term. Were seeing rallies 1. 5 . In the u. S. Interesting to see the reaction as well this Interest Rates. In the u. S. , interesting to see the reaction as well this Interest Rates. Already super low, but going even lower and that is putting more pressure on our rates here. Dow took a while to catch organization but now things are moving higher here. Lets talk about it in the closing bell exchange. With us darren wolfburg jim lowell Heather Hughes joseph clark, and of course our own Rick Santelli. European central bank has begun a Quantitative Easing Program. To you automatically buy european stocks . Look what happened to our sock market when they started the latest round here in the u. S. Hopefully youve already moved into a goody verse filed you are european funds. We think that the enthusiasm which certainly could linger for a whileverse filed european funds. We think that the enthusiasm which certainly could linger for a while is up against a fairly specific deadline. Ecb stops its similar Bond Buying Program in september of this year. That means i think by july at the latest, european economy, the zone in particular will have to show evidence of at least some form of a turnaround. Otherwise whatever you gave between now and then could easily be taken right back. Not only do you have the point jim just made the fact that a lot of this was perhaps already priced in and thirdly and real interesting is the fact that elerian, larry summers, everybody saying europes Quantitative Easing Program wont be that effect difference and yet look at the reaction here take. What do you make of all of it is this. Absolutely. It was a much needed item that the ecb had to take advantage of. You had tee nation their statistics for months and it was something they had to respond to. As far as exposure and, you know, getting access to the market hedj which is an etf, fx adjusted to the youreeuro has been trading well. Gold also traded well on the back of the Swiss National bank ending their tag. The autos in europe should trade very well because they will be bringing in dollars from overseasoversea overseas. As you look at the selloff that weve had year to date, i think there is good bottom fishing that you can do in that sector here in the u. S. So i think there is a lot of opportunity and you should take advantage because i think well have a youve to the up side for a few months. Heather, with the move by the central bank today in europe the euro has gone down sharply. Its now at 1. 13. Down about 2 against the dallas. So dollar. Are you more inclined to buy stocks or travel to europe . I think with that strong dollar derek peguesim in the market for a new car, so maybe we go shopping. Youre right, our dollar is making it tough on u. S. Multinationals. But i think its key, the biggest difference between the European Central bank and the Federal Reserve is that our Federal Reserve when banks deposit money at the fed, we give them something, not much, but 25 basis points, right . Well on the other hand banks are penalized for Holding Money with the ecb at 20 basis points. And that will be the biggest difference forcing people to go out and spend that hasnt yet worked. But that is their hope to create inflation in europe which hasnt worked in five years in the United States. Joe, same question to you. Is this Program Going to help europes economy turn to stronger growth to see more kinds of the right inflation, if you will are markets just deciding to buy first and worry about the outcome later . All professional fighters love to have a telegraph punch and thats what we got today. Weve had a central bank game for six years going on. That doesnt even count japan. And nothing has happened. This is not a story of fear. Nothing, what are you talking about . You mean in the economy . Yeah, the economy. Its all driven asset prices. The u. S. Economy or u. S. Stock market . Because im seeing pretty big moves. So the u. S. Asset prices weve seen phenomenal moves. And you will see that in europe as well, in the northern part of europe. Weve already started to see some of those stocks, some outperform the United States. And thats the first time thats happened in a few years. So, yes, it will work for asset prices. It wont create jobs. It doesnt matter how much they did, it wont create demand. Joe, youre right. Thats whats happened. Its creating equity bubbles potentially. Yes, no doubt European Equity markets have headed higher and this may help them head higher from here. But what else is it doing for the economy from a fiscal standpoint . A long term perspective, real Structural Reforms we all know need to happen. Rick santelli, your turn buddy. Im curious to know your thoughts on how the markets have responded today. We have a late day rally which now puts the dow back in the black for the month of january after all the volatility. But with the currency markets with the treasury markets and everybody else doing what theyre doing today, how do you read the response by the markets this morning . Well, you you framed it right because were getting a market response. Were certainly not getting an economic response. Its not like between 8 30 eastern this morning and now a million europeans were hired for jobs. No. The equity markets are doing what equity markets do. Its global. All stimulus is fungible. Even when you have all the wrong way cory begans going in different central banking directions. And i think that this will pretty much guarantee that the European Union whether share its moniker with japan. I think they will be the second big developed economy to say that they had a lost decade. Because the more you give in the front, the more complicated the exit is and i think we cant lose sight of that. You said it was a dark day for me. Its not a dark day for me at all. Its a dark day for those that are looking for, you know, the sweat of their labor in the form of capital. In the end, whether its al aryan or summers, it wont most like work but it wont stop them from embarking. Its all about the markets. Let me just tell you, i had an interesting tweet this morning. I just want your response. Investors saying finally europe doesnt do anything, which gives me as the investor the confidence in the outlook for the next couple years to put money to work in europe or the u. S. If that is the desired outcome, thats something to be encouraged by isnt it . What do investors really say . Heres what i heard. Boy, they gave us a chance to put our money in stocks with very little risk and coat tail with the Central Banks. Thats what i hear. What i didnt hear is thank gissendannergod the ecb did it like america because well see a boat load of people get jobs and all the acrimony get fixed. Thats what id like to hear. And ten year jgbs between from 25 to 32 yield which happens to an three week high which is a 20 move higher in rates. Nobody should use percentaging whether in the vix or in Interest Rates. I know you hate that. Jim lowell, what do you think, is it possible europe is possibly going to go through its own lost decade here as a result of what is going on with their central bank . Its certainly possible, but i think that economics self interests and political self interests are highly correlated. It took the evident ccb a long time to get to this point. But they have to prove in terms of economic turn around very quickly that this is the right stimulus measures to be taking. The markets certainly will be ahead of that. I dont think that it will be all that patient. I do think europe is decidedly different from our own economy. Its a patch work quilt compared on our blanket. But the threat of getting capitalism right in order to fund the soerlcial agendas is exactly like our own. Darren there are a couple risks out there, as well, perhaps Falling Oil Prices or what is happening still with rush russia and the ukraine. You mentioned some ideas but are you concerned about that or about the greek elections coming up where they might call for tough measures and its not entirely clear whether greece itself will be included in the Bond Buying Program . They said that they would start buying greek bonds starting in july in their presence conference. All that being said i do think that there are risks in the marketplace. Certainly anything that is correlated to the strength of the dollar or the inverse correlation of that like oil, there a risk there. That said, do i think well start to see the weakness work itself off because youll have depletion rates in the shale plays that are going to start to become quite noticeable as you get into the spring and summer and you get into the driving season. So if youre looking at the price of oil, im looking at maybe 5 to the down side. But if you get some sort of snap response out of opec youre looking at maybe 10 to the occupy side. So from a risk reward basis, i actually like the oil patch down here. And youre starting to see a lot of smart money enter that sector. A view that two to three years from now, that sector will be significantly higher. We have to go, but heather, what kind of car are you looking for . With oil still low, you might as well say bigger is better. Go big. Thanks everybody. Good to see you. 50 minutes until the close. A strong session for equities. The dow up 268 points. Gains of 1. 5 across the board. Nasdaq up about 80 points today. Took them a while, but finally got the rally. Packed show headed your way. Bb t soaring on the back of strong earnings out today. But its been a sluggish year for that Regional Bank stock. Their ceo will talk earnings and fed policy and ecb policy, oil, all kinds of things coming up. Looking forward to that. Also ahead royal bank of canada ceo joining us for his first tv interview since getting the job. Hell tell us what drove the acquisition of City National. Lally today. Stock market up about 277 right now. And is this the sector heat map. So yesterday, lets call you utilities hit an allim high. They are negative today. Financials and consumer discretionaries were negative yesterday. They are leading pack. And yet u. S. Interest rates still pressure to the down side. Dominic chu is keeping an eye on it. Lets start with lands end. Fourth quarter profit and revenue coming in below expect stations. Shares you can see trading down by about 16 . A good day overall for the airlines. Southwest flying high after the carrier posted better than expected quarterly results. United hit a 52 week high on a bullish 2015 forecast and Alaska Airlines increased its dividend by 60 . And well he said here with a Regional Bank bb t moving higher after better than expected Quarterly Earnings. And it was interesting mark newton tweeted earlier that he thinks its a little bullish at least near term that you see some of the rotation out of defensive sectors like telecom and like utilities. Back to you. Thats for sure. Got to watch it. P. More on these earnings there bb t. Lets talk with kelly king. Good to see you. Welcome back. Thanks. Glad to be here. So tell us about the quarter overall. We were in sort of wait and see mode. We had pretty good Economic Activity in the last quarter and were all waiting for the fed to do something here. So how did you do in the quarter . Well, we had a great quarter. We had record Quarterly Earnings and record amnnual earnings driven by strong fee growth really good expense control and really just outstanding credit quality. So all of that combined to give us really a pretty outstanding quarter. I noticed as well you had a huge increase in commercial real he is say the. What can you tell us about this sector . Well have diane ol lick later talking about some of the strong activity in chicago. What regions are you seeing for the pickup . Well, were seeing pretty broad based in terms of geographical area all the way from maryland all the way down through the keys and over into texas. So all in the geographical areas are improving. Its interesting until this quarter, most of the cre growth has been in multifamily. But very pleasingly this quarter multifamily was relatively flattish. Which i was glad about because it was beginning to be stoo tropg. We saw broad based growth in Retail Office hospitality, shopping centers. So were really beginning to see broad based growth in commercial and thats good. During the quarter you sold some of the mortgage portfolios. Where are we in the cycle of getting rid of thor to closures and the overhang of supply that as a result of the financial crisis . To closures and the overhang of supply that as a result of the financial crisis . I think what has happened is the supply has come way down. And there is still a very healthy demand for this kind of product because the overall opportunities for investment today are still quite limited particularly in terms of relatively higher yielding assets. And sos as the banks have gotten rid of more and more of these products at lower prices the demand is still there. We held on to some frankly because the prices were too low. But then as now the prices have gone up because the demand relative to supply it was just a really Good Opportunity for us to sell. Kelly will, meanwhile around the world different jurisdictions cutting Interest Rates sometimes into negative territory. Yields on Interest Rates on bonds keep falling. This obviously a headwind for financials historically. What happens to all the cash all the deposits that you had and what kind of pressures do you think there might ultimately be if rates globally keep heading lower . Well, i think as long as rates globally are low and declining, its obviously a reflection of the fact that the Economic Activity is very very poor, and so banks get hurt in two ways. One is the lower the rates the lower the spreads, that presses our margins. And then of course the lower Economic Activity just gives us less loan activity. Fortunately the u. S. Is doing much better today than the eurozone and china and other places. So relatively were feeling pretty good today. But we are still hoping and waiting for some additional Economic Growth that will cause rates to rise. I personally position that may be think that may be around the corner in the u. S. But globally a ways down the road. Here in the u. S. Youll still look to make other acquisitions . Are there regulatory reasons why you wont . No no regulatory reasons why we wouldnt go forward. We have acquisitions going on now in texas, kentucky and pennsylvania. And all three transactions are proceeding very very smoothly. We anticipate no problems in getting them approved. Theyre looking very, very attractive attractive. So were excited about that. And would hopefully anticipate additional in the future because frankly were pretty good at it. And we need scale because with these additional regulatory costs, we need more skill to presented the fixed costs over. But you know what happen you keep making acquisitions certain members of congress will want to break you up pretty soon. Yeah, but were so small, they wont worry about us. Were just a shawl countryul small country bank. Kelly, good to see you. Thanks for joining us. Thanks a lot. 40 minutes left in the trading session. A pretty good rally. Dow up 272. Its the underperformer almost. S p up a little less than that percentagewise. But nasdaq up 1. 77 right now. And in a deal of the day, canadas biggest bank by market cap buying Los Angeles Based City National for 5. 4 billion. The ceo gives us the scoop on what sparked the deal and why hes choosing now to take another stab of going big into the u. S. Also ahead well go live to havana cuba. I didnt think id be saying that anytime soon. A special talk on u. S. Talks to normalize diplomatic ties with the islands. You can bring as much as 100 worth of cigars and rum back now. Eamon javers is down there with 100 bucks. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Who do you work for . Your boss . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. Welcome back. 250 point rally on the dow today. This after the European Central bank became the latest to pursue quantitative easing. The markets are marking it up right now. 1. 5 gains across the board. There is the heat map. A lot of green. U. S. As we know and cuba holding high level talks to restore diplomatic ties that we havent had in more than 50 years. And eamon javers is on special assignment and joining us now from havana. Were squinting to look at the cars in the background there, too. Reporter yeah, the cars here are fascinating. A lot of these old american cars have been on the road for 60 years. And a lot are just held together by copper wire and rehabbing all the mechanics inside. Converted to diesel. Its amazing what you see on the roads here. But we have little high level diplomacy here and low level, as well. High level first. Weve seen statements now from both the cuban side and the american side saying that the negotiations have been going well. Fairly bland Substance Free kind of statements but it is an indication that both sides are happy with whatever progress is being made behind closed doors so far today. The ultimate goal here of course is to see the reopening of the u. S. Embassy this which was closed back willin 196 2. One big rule change weve seen this involves what americans who travel cuba can bring back with help. If you can get a visa to come done heerksre before you couldnt bring any cigars or rum back with you. Thousand you can bring 100 worth. We went down to the store and bought 100 worth of rum. You get a lot before about six bottles. But for 100 we only got four cigars. So its very expensive no the for the cigars down here. That will change. When the market picks up, i think production will increase. The cigars down here. That will change. When the market picks up, i think production will increase. Cigars down here. That will change. When the market picks up, i think production will increase. Once you get here, bill. Im not a cigar smoker but id be interested in that rum. Thank you. Good to see you. Eamon javers from havana. I think its fascinating were headed back down there again. 30 minutes left in the trading session. Just a little bit off the highs. If you just joined us European Central bank finally announces quantitative easing. And up next what happens in europe may not stay there. Our pros explain why the ecb 60 billion euro program per month is affecting your money here. And later are more earnings coming your way. This Time Starbucks and capital one. Well get you the numbers instant analysis as soon as they hit the tape and of course the mar are ket response, as well. 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. Ive been called a control freak. I like to think of myself as more of a control. Enthusiast. Mmm, a perfect 177degrees. And thats why this road warrior rents from national. I can bypass the counter and go straight to my car. And i dont have to talk to any humans, unless i want to. And i dont. And national lets me choose any car in the aisle. Control. Its so, whats the word . Sexy. Go national. Go like a pro. Well, there it is. Dow up 267 points. I didnt think we would do this, but there will we are. And the dow heat map of the 30 components inside the dow industrial average 27 are positive. Only at t and verizon are lower and then American Express announced big layoffs, as well. Havent seen a session in this time especially where the financials are on top. But jpm and goldman both having better than a 3 day. Juggernaut. European Central Bank President delivering a bigger bazooka than most people thought he would. The big goal, stimulating europes slagging economy, but it matters here and around the globe, as well. Steve liesman tells us what is going on. I think the interesting thing here is for a move that was so telegraphed, draghi still managed to surprise markets. Let me show you why. 60 billion euro monthly, there was a story leaked yesterday were they playing around were they trying to set expectations low, underpromise overdeliver. May be. There was talk it would last for a year. It runs through september 2016, but its also kind of indefinite in the sense that he said that it would run basically until inflation hits the 2 target or is on the way. There is risk sharing and there is some really funny stuff about greece. Draghi said there are no special rules for greece except there are a series of rules that make it unlikely the European Central bank will actually buy greek bonds. As to whether it was a surprise i think the best way to do is to look at the currency markets. Eurodollar Exchange Rate down to an 11 year low, 1. 13. It went in to the day i think around 1. 16 and change. Now trading well below 1. 14. And then if we have also the german bupdnd, as well. Another market that should be intensely sensitive. You can see that cliff right there. I call that an El Capitan Cliff right there. Five basis points down on the news. Actually a bit of a delayed reaction. So he talked about this 30 months ago. He said whatever it takes. Well, now it being looks like he took that action. Looking for gold over them their cliffs. And well get more reaction now. Lets bring in Brian Reynolds and gregory. Gentlemen, good to see you. Thanks for being with us. Greg, weve seen this movie before. Compare to what weve been through the last six years. Any big differences that you anticipate to happen as a result of what theyre going to go through now . What i think is interesting is that the ecb is introducing qe about five years after the fed did. So the first thing to keep in mind is that do not expect the european economy to start roaring the next month or two. Look at how long its taken for the United States to respond. The second thing which is more positive is i think the ecb has learned from a bit of the feds trial and error most importantly that this is an open ended commitment. And that the condition for stopping is not when they have reached a certain size but when they have growth and inflation back on some positive trajectory. To my mind thats a single most important reason to be bullish about todays announcement. Brian do you think at some point well catch up and be reflected in higher bond yields in europe and even in the u. S. . Probably not. In the short term this is a positive thing because the amount of quantitative easing is bigger than those stories that were leaked out earlier this week. But in the long run you look at quantitative easings hughow they have been received by markets. They have usually resulted in a short term spike which were seeing today and then investors sell stocks. So unless we take out decembers highs in the s ps, i think this is just a short term blip. And its taken a long time for qe to have any impact on the economy. It has at bits of an little bit of an impact on the financial markets, but other than that, i dont see this as a big deal. One of the things that has happened with the openended nature and the way it perhaps affects markets, and im holding out that you could be totally right here is that it introduces for the first time a wouldway trade. And this has been a oneway trade for a very long time papd. And we have got be the blips. But you have to think this theyre in it for a much longer period of time than they were before. Yeah, and if i could just jump in there, steve. Leaving it openended thats a great thing in terms of their flexibility that this move affords them. But when you think about it, its only a trillion dollars. That sounds lying a lot of money, but during my career the shadow Banking System has gone from 0 to 70 trillion. So this is kind of like a little tail wind for a jet airplane. But in the big scheme of things its more private sector financial squlering thatengineering that will have a bigger impact. And i want to add to that weve seen risk assets respond quite positively to this. And that is always the first shoe to drop. The s p took off before the economy did. So we have to have a few other things happen for this to be a positive story for the eurozone. You have to see the Bank Lending Channel loosen up and that will be partly a cops defense of the please of their Capital Raising per. You have to see easing of some of that fiscal austerity. You have to see government and the periphery get serious about structural reform. Given all those things i think youll be positive. Id say the one thing id look at today that makes me somewhat cautiously optimistic that will happen is that inflation swaps break evens are uptodate. It looks like the markets are betting that this will in the end have the effect that its intended to get. Consumption, income and demand all going the right direction. And here youve emphasized time and again the size of the buy backs that have assumed the u. S. Stock market for years. And how important that is a factor. What kind of impact is similar behavior having in europe or is it just going to start picking up now do you think . I think youll have more Financial Engineering in europe. I think that will be a good thing for European Markets. But i think well have more Financial Engineering in the u. S. So i would prefer the u. S. There a joke going around on wall street that Bill Belichick and mario draghi are worried about the same thing deflation. The problem with this move is that oil prices moved down sharply today. People were expecting a 3 million build in barrels and it was tli times thehree times the size of that. So it will be very difficult to get inflation back up to the levels that Central Banks want. All right. Brian just prove wlag a Small Community wall street is. Weve all been hearing the same joke. Does this make Janet Yellens job harder or easier or does it matter . For the record, i made that joke at 7 00 in the morning just to be clear. I think this provides ill send you the note on my twitter account. I trust you. But i think this helps out janet yellen given her flexibility to go either way wh when it comes to what they will do this year. Ive become increasingly skeptical that there will be a rate hike at least in june or july. En maybe it will happen later this year or next at this point. But if, and thats a big, if the European Central bank put a floor under inflation, start a little growth over there, get a little inflation in that country, that will help the United States ultimately. All right. Greg, i heard will you say you agree. So well leave it at that. Thank you to three of our favorite economic minds. Very much appreciate it. Heading to the close, 20 minutes left here. The dow up 270. Havent seen arthur walk around here, so i dont know which way the wind is blowing toward the close, whether were seeing more buying or selling. But the dow is still a healthy gain of 1. 5 . Nasdaq especially up 1. 7 . And brian mentioned oil prices perhaps the fly in the oipt ointment. Crude down 2 . Natural gas down 3. 7 . Gold making a comeback. Back above 1300. Achd upup next, a top media analyst explains why hes turned cautious on a once high flying group, perhaps not the brightest spot of todays otherwise shining markets. If welcome back to showdown im jerry rice here discussing the upcoming big race between the tortoise and the hare. Jerry, the hare always brags about his speed. Fine, but he crossed the line when he told. Hey, turtle neck. Want a head start, how about a week. Yeah, my performance does the talking, ok. Jerry, thanks for having me, i have film to study. Hey, how about you rice cake wanna race . You dont want none of this. Vote on twitter for your chance to win a mercedesbenz big race viewing party. You total your brand new car. Nobodys hurt,but there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do, drive threequarters of a car . Now if you had a Liberty Mutual new car replacement, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. New car replacement is just one of the features that come standard with a base Liberty Mutual policy. And for drivers with accident forgivness,rates wont go up due to your first accident. Learn more by calling switch to Liberty Mutual and you can save up to 423. For a free quote today,call Liberty Mutual insurance at see Car Insurance in a whole new light. Liberty mutual insurance. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. The dow up 264 points. Looks like were coming off those highs right now with about 17 minutes left in the trading session here. S ps up 30 and as we pointed out, nasdaq bigger gainer today with a gain of almost 80 points right now. Or 1. 7 . And a lot of media stocks are rising today. But its been a different story in the last several weeks. Dominic chu is keeping an eye on why. There have been haves and have nots over the media sector. But over the last year select media stocks have had a tremendous run. If you look at say a disney which just is a percent arm fromway there record highs. Time warner has done even better, up about 30 during that time. Media stocks are getting more attention in recent trading and thats due in part to release of a Morgan Stanley industry yoult look for 2015 in the media business. In it, they downgraded the industry to a cautious you because of things like past performance, eroding subscriber bases and Foreign Exchange head winds just to name a few. After five years of outperformance, they say its time to get more defensive as margins and multiples correct. They like past underperformers like cbs and dreamworks. Some they say away from including viacom. So again very much about stock picking especially in media. But the overall sector not as favor able in Morgan Stanleys eyes. Caution is the watch word to investors in the media sector. Slow down advising eroding subscriber bases and creeling for online licensing have all created concerns. Parent of cnbc comcast of course is included. Joining us now to discuss is ben windburg. Good to have you with us. What has you convinced that these stocks and yet managed to perform are now going to really find a much harder path from here . Well, really there are three factors. The first one is advertising trends. And something that you have to be concerned about is the economy is growing. Gdp growth has accelerated and Television Advertising has actually slowed. And thats happening for two reasons. One ratings are down across the dial. And down meaningfully. Second youre seeing advertisers shift into other platforms, a lot going into mobile. And the subscriber numbers youve mentioned have started to fall. Consumers are increasingly opting for smaller packages that include less video channels, less networks. And so the days when every network was essentially carried across all 90 million pay tv subscribers, we think thats coming to an end. And finally on the cost side people arent watching Live Television anymore. To the levels they used to. So repeats are not airing. So you have to put on new content which means more hours more capital, and so there is pressure on the expense side, as well which is why were concerned about margins. But none of this is lost on any of these media ceos. They all are looking for different Revenue Streams beyond the traditional advertising and subscriber growth and so forth. Theyre buying inging content, creating their own. So is it possible were looking at a snapshot of a Business Model that is not going to exist say five years down the road . Well, theyre looking. But i think the challenge they have is the Current System has created incredible profitability for these networks. A lot of Cable Networks generate margins in the 30 to 50 range. And theyre facing new entrants position netflix and youtube that operate at much lower profitability levels. So the incumbents have maximized their margins and the new entrapts are disrupting it. Thats exactly what i was going to ask how much of this is a netflix factor and how much when we look at for example the moves addition is making which carry a lot of the quote unquote traditional cable channel, how much will that bail out the longer guys in the longer term if at all . Netflix we think is an hour and a half of you viewing per day per netflix subscriber. Thats meaningful. And so the fact that consumers are looking for smaller video become paages is not surprising when they have these other options. And thats just netflix. When you layer on amazon and others, there are other substitutes growing in popularity. In terms of dishs streaming service, its an important trend to watch. Dish is launching a product with very little margin to try to attract any whenmillennials into the ecosystem. But they will make less money and a lot of networks arent carried. The majority of tv networks are not included in that service. So there is a loss of did distribution. Tough to hear as we sit here on Live Television and ask you about it. But its important. Well see if the stocks can adapt as we move forward. Thank you, ben windburg. 12 minutes left here. The question is, is this rally going to be a one day wonder or whether this extend beyond some are we launching a neutrally . Well talk about that coming up. Get professional traders to talk about where they see the market going. The dow up 262 points. Also we have more earnings coming out after the top of the hour. Starbucks an capitald capital one among those. Well have Market Analysis and reaction. And then royal bank of canada ceo to buy l. A. Based City National. Plus his take on the collapse of oil, what its done to their business and so forth. How it will impact their prices down the road. You can find a new frontier. Theres nothing stopping you and a lot helping you. Technology thats with you always. This is our promise. Its never been better to wander because wherever you go, youll find us doing everything we can, so you can. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out dow coming off the highs. Up 254 points. What was the high, 280 . Something like that. S p up 29. Nasdaq up 76 right now. Joining me we have john and ben. And you have a smile on your face. Youre loving this volatility. Absolutely. Look at the charts going back to december 29th. We started somewhat of a correction. Not unlike what we went through last year. But this volatility has been fabulous. It makes people make a decision. And you have a pretty large bandwidth to make the decision in now. Does the volatility make sense, though . What is the message of the market here . Weve had every single day this year, weve been making much of this fact. The dow has seen a trading range of 200 plus poichts s points every day this year. Were in transition to a new year and what is happening in europe. Were in transition on consideration what is growth in terms of wages and this type of environment. So it makes sense. If anything what weve learned over the last few years is that volatility tends to create opportunities swellings indicate risk. I dont want to put words in your mouth. The way the market is acting its acting more like a bottoming phase or topping phase . Id say a bottoming phase and we think its healthy for the market. Do you agree . I agree but i think the volatility will probably be here at least until the First Federal increase. So whether thats march or whether thats june still a good time period of volatility. I believe thats been the case for quite some time. And the volatility seems extraordinary compared to last year, but in historical terms, its really not that unusual in moves in daily trading basis. Makes sense. And wed also have to think that if anything that bottoms phase could be longer than shorter. Just were bottoming compared to where we were just in the last what sectors make sense to buy at these levels . I want to own technology industrials. As a contrarian pick materials. And of course Consumer Discretionary. I want to be exposed to the cyclical because im looking for the economic expansion in the u. S. To continue and an economic recovery to begin in europe. And he would be a customer of ours. Very similar in the thinking and what were seeing. Energy still has to be some cherry picking in the Energy Sector with what is going on. Its been a very costly place to be if you havent made wise choices. But again, the cyclicals and plaurply particularly the technology, Infrastructure Technology firms if you will, were seeing a lot of interest. All right. Good to see you both. Thanks for joining us. Ben, ill let you get back to work. Well be back with the closing count done countdown. And then earnings numbers and market response. Plus Cloud Storage company box is pricing its highly anticipated initial public offering. Is it an out of the box idea to buy the stock when it starts trading tomorrow . Youll find out. Breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. Your old 401k is rolled over into a Td Ameritrade ira. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better Td Ameritrade. You got this. If youre running a business legalzoom has your back. Over the last 10 years weve helped over one million Business Owners get started. Visit us today for legal help you can count on to start and run your business. Legalzoom. Legal help is here. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. We expected a rally because the Quantitative Easing Program announced by the european natural bank was about 20 more than expected. Didnt get it this morning. You got this afternoon. Were up about 264 points as we head toward the close. A gain of 1. 5 . Where we did get the expected response right away was with the eurodollar Exchange Rate. Collapse of the europe. This is just against the dollar. Decline of 2. 1 . E. This is just against the dollar. Decline of 2. 1 . This is just against the dollar. Decline of 2. 1 . And then coming up tonight, earnings starbucks and capital one getting set to report their numbers. Right now, starbucks up almost 2 . Capital one down 1. 2 . Bob pa is an isani, is it the beginning of something . What did qe do for the u. S. Stock market . Did it help the stock market . Whether you you believe it or not, it help willed. There is no reason to believe that long term it nt would help the European Market and thats why im more bullish on europe right now. No reason to think its fundamentally different. And today the rally transports great on earnings. Financials great on okay earnings from the Regional Banks. This was not just european led rally. We took off late in the afternoon. All right. Very good. Thank you. So were going out healthy gains. We expected some volatility today because of the European Central bank and we got it. Industrials up about 265 points. Stay tuned now. Earnings from starbucks and kacht one capital one and exclusive with the ceo of the royal bank of canada coming up. Welcome to the closing bell. Im kelly evans. A strong session across wall street. We got to talk about why we had such a pick up at the end of the day. We had all day to talk about the European Central bank. It was really there in the final hour and just about that we saw stocks moving to the up side. The dow closing with a gain of about 264 points. 1. 5 . Should be good enough by the way on put us back into positive territory for the year. Its been a year of 200 point swings every single trading day and today was no exception. S p add 3g 11, nasdaq up 83. Lets get to it. Zachary cara bell is here. Suze anwell have more on the markets. Hi, guy. George why do you think it is that markets were suddenly moving much higher to the up side later in the u. S. Trading session . It took a while for people to actually realize this was bigger than expected and really kind of addressed three things. Reduced uncertainty, weve been waiting years for this finally to come to fruition. And here we are central bank that was late to the party finally showed up and now we have all of them at some point in the last five years doing a major qe program. Second, it was bigger than expected. 60 billion. And the third part which is really critical is that its tied to them actually hitting inflation. And we actually think it will be hard for them to turn inflation, i think they will be in the program for many quarters to come. Is the catalyst for higher rates . Catalyst for higher rate sngs listen s . The unintended of oured ifs and ill say irresponsible actions, it allowed other Central Banks to act in kind. Its like sort of everybody in the pool. How does it make sense how does this end well . I toe zach will sort of rage against me here. But if everybody is trying to burn their currency, how does any of this end well . Is there a situation where the entire world can be bankrupt . Is there a reset button . One of your guests said a trillion dollars, these not a big deal. Thats madness. If you think about it, im not trying to be a jerk but no look at the size people say its nothing anymore. If you recognize the sign of the Capital Markets that we have built today and really take all of it into account, a trillion dollars didnt buy, zachary, what it used to. Guy you reminded me of peter lynch from network. And you may be entirely right. The outcome of all this is completely uncertain. And it could all end really really badly and we could all be looking back telling our children by candlelight that we remember a day when there was actually electricity in the global world. Or it could be there is a lot more room to manipulate these legitimate will than will are laws dictating how theyre priced. And right now deflation is the greatest risk. One of the bizarre consequences could be to send u. S. Rates even lower as people pour into u. S. Rates looking for yield. But europe has to do something and i think if youre mario draghi, this is the only something to do. Its that europe drop and that stole the show today even after a 16 fall in the last seven months. Seven straight months of Euro Weakness ahead of this, building in expectations for this. Mar draghi still managed to surprise and the euro plunged. At one point down 2 . It is below 1. 14. Thats going to help european earnings and especially the surplus countries like germany over there that depend very heavily on exports. And that is the most Immediate Impact of the draghi policy tool. And the reaction across global stocks is they like it because its that stimulus. Whether it will target europe or anybody else in the world, that eventually boosts underlying guys point was the fact that that leaves the u. S. With a stronger dollar which should be a good thing philosophically and yet maybe becomes more and more of headwind for some companies with a lot of overseas operations and that sort of thing. I dont like the handling art. I think every Large Corporation has currency traders and if they wind up getting hurt from this very substantially, im going to start interviewing them all and ask what have they been thinking. It has been a big move in a short period of time. Guy, i want you to relax a little. Sbl hang happening on a second. Starbucks is moving. Earnings are out. 80 cents exactly what the expectation was. Dominic chu with more. 80 cents is the headlines earnings number on an adjusted basis. That matches the wall street estimate. Sales at 4. 8 billion. That also matches just in line with average analyst estimates. Also Global Comparable Store Sales gaining 5 thats just a hair better. Analysts were expecting global Comp Store Sales growth of around 4. 9 . So well say its in line with expectations. Shares are up by about 1. 75 . They are off of their after market highs. They were up by around 3 heading in to this full here. Also the Trading Volume here right now relatively light for the time being. Picking up steam about 440,000 shares have traded. Options market had been implying a move of around 3 and those shares again trading choppy. Well bring you more details. But for right now, a match for sales and earnings and Global Comparable Store Sales coming in just about in line with expectations. Back to you. Thank you very much. Back at headquarters. James is joining us. We want to talk more starbucks. A move that looks like investors are encouraging these results. Absolutely. Im earn kunlged myself. I got long the name ahead of earnings expecting a good quarter. They met on top and bottom line here. And what i think is really encouraging is that global comps number. We expected them to see really nice growth overseas especially as they start rolling out Aggressive Growth strategies in china. And it seems the play is working out here in the u. S. What do you here think as well . Starbucks performance again coming in a period where mall traffic is declining. Certainly factors that could have pointed to weakness. The average american is saving 18 every time they fill up their tank and thats about five lattes. Now we know some of the discretionary money is going. Enough about 60 billion a month of ecb and liquidity. How much coffee is starbucks i own starbucks. Personally, i think this is one of those companies in exactly the right spot over the past years. They are creating both an experience and a feeling around drinking a cup of coffee that actually is more than just drinking a cup of coffee. And its going global. So the mall traffic is a problem, but they seem to have shifted that by having an international strategy. And having a Premium Experience strategy. And especially they have also done some impressive stuff on the payments front. Dom, do you have more detail . We do. They also shares up by about 3. 5 right how. Half a million shares have traded. Also forecast numbers from starbucks, they see their full year earnings per share coming in at between 3. 09 and 3. 13 on an adjusted basis. That comes in again maybe the mid point a little bit shy of the 3. 13 analysts were expecting on average. They also see q2 eps of around 64 to 65 cents a share that also falls shy of the 68 Cents Per Share average. So as were going through more numbers, well see if that impacts the stock. With you but right now, shares still up by 3 . I guess back to zachs point, we saw ebay and i believe f 5 really miss on the guidance piece but really get punished for it. And yet today starbucks guidance misses the street and shares up better than 3 right now. Was that to me . Sorry go ahead, james. Right. Absolutely. And one of the questions that was brought up, weve been waiting to see where all the extra cash flow that the u. S. Consumer as a result of cheap nrpg has been going. We havent seen it go into retail. And it looks like starbucks will be one of the discretionary names that is benefiting from the cheap energy. And guy. Howard schultz is a stud. Im not all doom and gloom. There are great single stocks stories out there. We have found what gets you going. I think the coffee is lousy by the way. Is it the food . What keeps driving the traffic . Their even thoughn innovation. Howard schultz is a great ceo. But let me say this about exports. If youre an export economy, you should be able to win based on the things that you make and the people want them. Not because your central bank is burning your currency and making more attractive on that front. Totally fair point. Nathan. Ill give you one piece of advice. One word. Food. Thats where all the savings is going. America runs on its belly. Always has, always will. Health care. Its going to health care. Theyre saving it at the pump spending it in health care. Its not going in health care. Were getting obese and then well need health care. Yesterday we had data about where the dollars saved on gasoline are going. And i still cant believe Health Care Premiums ss down year on year by just a couple of dollars. But im truly surprised by that piece of information. It does indicate people are spending on food. Nobody wants to do dishes at the end of a long day. And after cutting back if five or six years, im telling you, lets go to chilis. That will be interesting to listen for. Starbucks up 11 over the past 12 months. Pretty much in line with the s p 500. That will be the question, where is the growth going to come from, will it come from the new store openings holiday sales. And continued focus on online. Howard shuttlechultz picked up on the trend. James, where do you think starbucks can trade now that they have beat in terms of its next range . Right. So we were looking for a move of around 2. 60 by 2. 70 by tomorrows were right at that level so i dont think there is too much more up side, but i would sgekts the expect the stock to trend higher over the next quarter. Okay. Thank you. And guy, as well. And thank you, george. Dont miss the interview with Howard Schultz tomorrow 10 00 a. M. On squawk on the street. Straight ahead here fast money at 5 00. They will have the latest coverage from the Earnings Call for starbucks. And we will have more coverage of the big up in stocks today. But first a big buyout in the banking industry. Royal bank of canada acquiring City National. Up next dave mckay joining us for an interview. And a commercial Real Estate Industry talked about this. On fire. What one major city has been hissing the boat. Find out which one and now it can be on the verge of joining the party. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] female announcer its time to make room for the new mattress models but sleep trains huge year end Clearance Sale ends sunday. Get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. Save even more on floor samples, demonstrators, and closeout inventory. Plus, free sameday delivery, setup and removal of your old set. Dont wait sleep trains year end Clearance Sale ends sunday. Guaranteed sleep train your ticket to a better nights sleep royal bank of canada announcing acquisition of city National Bank headquartered in this los angeles. Probably the biggest move to date by ceo dave mckay since taking the heldm back in august. He joins me now from toronto. Welcome to the program. Thanks for inviting me. And talk about City National. How long was this in the works, why are you guys looking to the west coast and where do you see the potential for your Canadian Bank . This opportunity has been in the works for well over 2 1 2 years as we step back after we sold our mass retail client franchise to pnc back in 2012. We looked at how could we build a new customer franchise in the u. S. And really lever our two core strengths. Top ten Capital Markets operation that were proud of and our top ten broker dealer based out of minneapolis, both of which have very significant client franchises. That was the goal to say how do we lever those strengths, how do we find an Attractive Customer that we think that we can certain really well. It all culminated in todays announcement. A lot of hard work and discussion. So it wasnt as if oil prices dropped in the last couple of months and suddenly youre looking into the u. S. Youre looking into the u. S. As a longer term strategic move. Is it demographics a bet on the strength of the American Economy . Its both. You look at the number of millionaires that have been created in the u. S. Market if you look at the recent study 15 growth in millionaires in the us over 570,000 new millionaires created. You see the demographics shift toward savings, strippestment, advisory capability. All those play heavily. And the u. S. Economy which we currently outperforming and we expect to outperform over the long term. Its interesting to think about the ways in which demand for banking is shifting. Maybe it is a generational thing where people instead of taking out loans to buy homes and whatnot have as they have gotten older the baby boomers im referring to now need someone to protect that i ever wealth and maybe grow it a bit. Is that why not just but everybody seems to be really trying aggressive will to get into this space . S reason we like City National, such a strong franchise, a great combination of Private Banking and commercial capability. Such a strong franchise, a great combination of Private Banking and commercial capability. Not just High Net Worth but also the commercial banking segment is a strong growth segment. And those boomers need advisory cape ability. They still need Private Banking services. There still will be borrowing, but the growth rate will be slower. So we see it both as attractive testifies and we look at City National and an increditcredible franchise that they have. A great growth profile. And it comes at a time when the yield curve is inverted out three years. Typically that suggests a recession. Are you prepared for a recession in canada a drop in housing prices . How are you thinking through what could be a real challenge for your Banking System . I think the singles that youre seeing in the market is one of uncertainty and difficulty in reading the signals. We have a strong economy. Our results through 2014 we had a very strong year. So were exiting the year with momentum momentum, but the uncertainty around the declining oil prices investment profile, Energy Industry production uncertain, were seeing cuts to projects layoffs. All that creates uncertainty around the future. And you saw the bank of canada reduce rates yesterday accordingly. So i think we live in a world of greater uncertainty about the future. We still are predicting 2 plus growth. Energy is only 5 of the overall gdp, so we do see great opportunity and strength in the canadian economy. Just not a much as the u. S. Economy. I was going to ask you as well about the extraordinary moves from europe. What kind of effect will that have on your business . Certainly anything that could k. Boost confidence over the long term and create Customer Confidence in investing in the future will have a positive effect. You saw the effect on the markets today. So i guess one of our Biggest Challenges is the lack of confidence in the future and certainty and investing going forward. The more that we can overcome that with policy, the greater growth trajectory well see in the future. I wonder too, we had bb t on the program. Regulation is always a concern although he said they will keep acquiring banks. Did you come up against any u. S. Bidders when you were looking i realize City National wasnt on the market, but as you were sniffing around. Or are they hamstrung by what Kayla Tausche was talking about, even in the u. S. Banks have to stress test and acquisition scenarios . Its not that feasible for them. You can take advantage of the stricter Regulatory Environment these days . Thats a great question. Certainly played into our thought around timing. Its very quiet on the acquisition front. Not a the loot oflot of banks have this confidence. We thought the environment may be different a year from thousand. Now. This is a prize bank that a lot of other banks would like to partner with. They were a not for sale. It all came together with the perfect timing. What is the City National acquisition going to mean as you reposition or continue move ahead for the next couple years despite some of the macro challenges weve talked about . Well, many of our camenadian commercial customers are set being up operations in the u. S. So part of this is helping our growing canadian franchise would i having access to u. S. Commercial account and Cash Management kachcapability. We see a great opportunity to cross sell into our 340,000 High Net Worth households. And we see great synergies between our Capital Markets operation in new york and the commercial operations of City National where we use our Balance Sheets so they can grow with their customers to a greater degree take on more deposits. So our rating, our Capital Markets expertise create synergies across our entire Customer Base and u. S. Franchise. And we think thats incredible organic growth trajectory going forward. Exciting times for all of us. Dave mckay thank you. Joining us on a big week for the royal bank of canada and also global Central Banks. Really appreciate it. Moving on now major averages are erasing january losses. Today moving back into positive territory. Is it full steam ahead for stocks . Well talk about that next with some market allstars. Also, were just over a week away from super bowl xlix. The only thing anyones talking about as you know though is deflategate. I think weve had a statement from a u. S. Senator about this. So who is responsible . Joining us in just a moment, com dominic chu has breaking news. Dreamworks saying they will cut 500 jobs and also the number of feature films that they put out two from three. They will also take a pretax charge part of a new plan to restructure their feature film business. So again bad news on the jobs front. 500 jobs being cut at dreamworks. They will also take a 290 million pretax charge. Back to you. Got to say job cuts are adding up during this earnings season. It started yesterday. The trend unfortunately continues today. Well have much more on this as mentioned, the nfl and a lot more coming up. Cant say thank you enough. You have made my life special by being apart of it. everyone cheers glad you made it buddy. Thanks for inviting me. Thanks again my friends. For everything for all your help. Through all lifes milestones our trusted advisors are with you every step of the way. Congratulations thanks for helping me plan for my retirement. You should Come Celebrate with us. Id be honored. Plan for your goals with advisors you know and trust. So you can celebrate today and feel confident about tomorrow. Chase. So you can. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Busy day for dominic chu. I hope its not more layoffs. P. This is intuitive surgical. Were watching the shares. Maker of the da vinci surgical system. Stock moving higher. Shares up by about a percent. 21,000 shares have traded so far. Back to you. It has been an afternoon melt up for stocks sdwrnly. For more were joined pisani betterrtha coombstter thatrtha coombs, rick is an telly. Why the late rally . We had a significant buy around 2 30, 3 00. The big debate was is this european money coming in, or was this u. S. Based money. They dont tell us that, but the volume picked up and we had decent volume today, almost 4 billion shares on the floor. Not bad. Meanwhile up at the nasdaq, that was the outperformer on the day. Why do you think . It was. The nasdaq started out sort of meeting early on. Part of it was the strength that we saw in apple. Apple has sort of been pushing back up towards its 50 day moving average. Technically weak for a while here. As people look ahead to apples earnings next week, that started has started to move the sock back up here. So that sort of was the yubd pinning. And then you just had a broad rally overall in the afternoon. The interesting thing i think is well start hearing from the real tech heavy weights. Ibm obviously putting in a real down note for tech. But you can argue some of that is just ibm specific. Theyre in the midst of a big turnaround. When we start hearing from some of the bigger names next week like apple, google and others then well get a better idea. Ive got a Rick Santelli question. So we were watching the reaction to the ecb today. I was watching it in the currency market. Rates market was interesting, as well. Ten year yield ending higher. Wondering how long this move stays with us. How much juice really did it the ecb provide here beyond just a single day of trading . Well, since theyre not going to embark on the real buying until march, it does have an openendeded quality, i would let the markets speak for themselves. You nailed it rates closed a bit higher. Spreads against bunds and tens widened almost nine basis points. Id say very short term id like for more selling and higher rates in the u. S. And some of the Higher Quality sovereigns. But it is the Foreign Exchange market that took the brunt. Two ways to look at it youve nailed it there, too, 2 today 15 for the year. It wasnt as though anybody was shocked either way. But i do think if your goal is weakened currency a whole lot easier than doing things like qe to stem unemployment. So i think if there is one residual notion, its that a parity euro is certainly not out of the realm of possibility. And just look at the euro versus the yen today, as well. So you have the two what i call short people currencies. Im not that tall so this is not a negative thing to say. But in the end, that gives you and you lot of information, as well. So what does it tell us . When i see the italian stock market up 2. 5 and i know it didnt improve today we cover business, we wap everybody to be long equities if they can make money. But i think that really is the story along with how about this. How about for the first time we can at the present time buy on the rumor. We waited until draghi came out with a participantsent permission note that says Angela Merkel says its okay i can do this. We had no statements taking back anything from what he said. Finally somebody he had maybe this will actually happen. Well finally see stimulus even bigger than before. Doesnt it make sense that qe would move the peripheral continues, italy and spain, the most. Look what qe did for the market here in the United States. Whether you believe it ideologically or not you believe in qe was great why where we not think it would help the european stock market. But can we trust that the European Central banks will step in there . I suspect the answer will be no. There is a 20 aspect of this that kind of mutualizes losses. And a lot offof us have been saying we live in a global system where a lot of the liquidity is fungible. Youve certainly got japan, china, europe. And other than i dont know, like the greek elections next week leading to a precipitous departure of greece from the euro its hard to see what will interrupt what has been a very gradual but significant move of stocks and all other Asset Classes until the fed does or does not raise rates in june. Hey zach i got a lot of emails about you. Did you really say since we have a feeiat currency manipulation is legal . I said legitimate currency manipulation. Thats like saying legitimate murder. How about infinite wisdom of congress. Its saying we make up the rules of fiat currencies. Wonderful for those of us who think Financial Freedom is just another offset of freedom in general. Bring it back to the u. S. Market. If you look at the sectors that youts perform today, financials Consumer Discretionary and industrials, cyclical stocks that tend to do well on a better economy. So there is a real bullish momentum. Three things came into play today. First off, there was healthy amount of skepticism being engendered by what happened in europe saying maybe in the states we wont be so quick to pull the trigger. Maybe it goes out further than six moments. So thats a healthy thing. We had the state of the union. We guiltyot gridlock. No one will do might go in washington. And we have lower earning expectations. Go in washington. And we have lower earning expectations. Transportation transports did really well. Decent Regional Bank earnings. So earnings matter. Were in that sweet spot. Well leave it there. Thanks, everybody. Commercial Real Estate Market has been going gang busters. Reits had been cold until now. This market may finally be rebounding. Well talk about that with diana olick straight ahead. And have you seen this . A luxury apartment complex in new jersey burning to the ground last night. Nobody was seriously hurt thankfully. More on this tragic story when we come back. You total your brand new car. Nobodys hurt,but there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do, drive threequarters of a car . Now if you had a Liberty Mutual new car replacement, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. New car replacement is just one of the features that come standard with a base Liberty Mutual policy. And for drivers with accident forgivness,rates wont go up due to your first accident. Learn more by calling switch to Liberty Mutual and you can save up to 423. For a free quote today,call Liberty Mutual insurance at see Car Insurance in a whole new light. Liberty mutual insurance. Take a look. This was a horrific fire in new jersey last night engulfing a luxury apartment complex. Incredibly nobody was killed. Only minor injuries reported. Its owned by avalon bay communities. Shares today up about 1 . They indicated theyre from the much fully ensureinsured today. It speaks to just you how strong real estate trusts have been. Except chicago. And thats where he wewe find diana olick. Reits do not love this town. Chicago has been a laggard in the nations economic recovery losing jobs and population. But thats finally turning around at least here downtown. Tech is behind a lot of it which is feeding both office and luxury rental apartments. A chicago developer now acquiring a 100yearold building downtown rehabbing it with tech tenants in mind. This after groupon bought the wrigley building, google increased its chicago footprint and motorola moved in to the merchandise mart. The jobs are also fueling the luxury rental market with a 328 million sale last week of relates 111 west whacker. Related and private companies, the reits dont like chicago because it was a laggard in the recovery, but that may have been a mistake. Given the performance that we found over the last four years in the rental market here which have grown at almost a 9 pace every year, i think that those investors are now seeing chicago as one of the most stable strongest largest markets. So this v. Have they been missing out . No question. You may see more investors with a construction of a chinese backed condo tower. You can expect to see more International Demand once that goes up. And that is a common theme that we have heard. Stay warm out there. Diane olick from the rooftops of chicago. Thank you so much. And chicago isnt the only place where luxury is all the rage. Some are recallingcalling miami the american riviera. Joining us now for more is don peoples. Welcome. Its good on see you here. We wanted your perspective on the next hot pockets of the Real Estate Market. I think chicago is an interesting market. Our company looked at chicago in the last market cycle. The challenge is its difficult to make money there because the cost of construction generally exceeds the value of the real estate. And you only get a very limited win deto make money in chicago real estate. So im not sure thats the place it be. Miami is the hottest place in the country. Miami . Absolutely. Miami is very hot. The overhang of inventory from the last recession is gone. There is tremendous activity on sales of new construction to be built condos. And there is really no more land left on the ocean in miami. And then washington, d. C. Is very strong. The most recession proof market in the country because the government doesnt stop spending. And d. C. Is doing very well especially gown town mt. Vernon triangle area foggy bottom george town which has always done well. And youll see the suburban areas continue to gain strength in d. C. And then i think that we were talking about the horrible fire that took place in new jersey. But i like new jersey too. I think new york has gotten so expensive, new york city especially manhattan as gotten so expensive. And if you look at jersey city, hoboken, they are essentially similar proximity to brooklyn to manhattan manhattan. So the last market cycle they did well. Id like for them to come back being as well. And then i like boston. I think i like everywhere. No i like the eastern gateway cities. And i like warm weather. Dont we all. So two questions. One, what is the impact of potential opening of cuba and maybe havana on miami as a positive negative neither . And the other is a more delicate question. We got run away housing prices 2004 through 2007 even though better housing, more rents is something you want if youre in that market how far up would these things have to go before you you felt like nervous that it was going up too much . Well, i think first question is cuba will have i think a positive influence on miami because culturally, we have a very large cubanamerican population. And to have the dynamic where our residents can see their family members with ease i think that will be a good thing. And on the real estate side, i think youll see there are a large number of Miami Developers that are looking to go cuba and invest. Hopefully that will start reducing supply in miami. But i think on the pricing side manhattan is at a point where it is very hard to imagine continued rapid growth on what is considered the upscale mid market of the city where that is trending 1800 to 2,000 a square foot. So i think were at an Inflection Point there. And i think miami has a lot of room to grow because while you hear these headline numbers on the top end on the atlantic ocean, downtown miami is still relatively good bargain compared to other global cities. And to jump in only because we have breaking new, but you have to come back because i have questions about the sun belt on the west coast and all these other things. Appreciate it, sir. Breaking news on jamie dimon dimon. For the on that executives at jpmorgan, including jamie dimon, while his overall compensation remained flat at 20 million, he did receive a cash bonus in the calendar year 2014 that is the first one that he has received since 2011 that cash bonus, 7. 4 million. His restricted stock portion about 11. 1 million. And his base salary stayed flat at 1. 5 million. Now, remember, in 2012, the company was hit by the london whale trading loss. In 2013 they had that major settlement with federal government authorities over mortgage fraud. That was in the range of 13 billion. And so even though we did see revenue and profit at the bank falling year over year we did see the introduction of a cash bonus for dimon for the first time in several years. We should note the rest of the operating Committee Also saw their compensation flat year over year except for two executives that saw pay raises and that is chief of the Asset Management unit and the companys cfo. Back to you. An update there for jpm. Meanwhile blowout stock market rally making it a busy day already on cnbc. Com. Hot list is coming up next. And forget a possible deflationary problem. You know where were going. Thunk patriot Quarterback Tom Brady may have one of his own. There are shots from the press conference still going on right now for the quarterback. Many people pointing the fepger erfinger directly at him including fran tar kenton for intentionally deflating footballs to help him win. 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 todays big market surge means plenty of people buying stocks today. Clicking on cnbc. Com result. Whenever we get a big melt up the crowd comes piling in trying to figure out what is going on, how much money they might have made. They also look to the wise men. So they dove into the carl icahn interview. He was on fast money halftime with his thoughts about oil. They love that one. And then art cashin hes talking about just a currency war now as far as europe is concerned, trying to export deflation and that never works out well he said. Nothing but tom brady . Well, we streamed the press conference and i saw a lot of people in that one. But its like a stream. Draghi did that get big numbers . That was huge this morning. Absolutely huge. All right. Lots of stuff going on. Alan, thank you. Patriots as mentioned could have a super problem on their hands. Who is to blame for deflategate some you might be surprised who Fran Tarkenton is pointing the finger at. If its the story everyones talking about. Not mario draghi even the coach of the new england patriots, by the way, who hates speaking to the media was forced to address this. I had no knowledge, whatsoever of this situation until monday morning. Ive learned a lot more about this process in the last three days than i knew or had talked about it in the last 40 years, coaching this league. The patriots coach, Bill Belichick, on accusations that footballs were intentionally deflated. Just moments ago, the quarterback of the patriots tom brady, had this to say. I didnt alter the ball in any way. I have a process that i go through before every game where i go in and i pick the balls that i want to the footballs that i want to use for the game. Our equipment guys do a great job of breaking the balls in you know, they have a process that they go through. When i pick those footballs out, at that point, you know, to me theyre perfect. Well the controversy may even overshadow the actual super bowl game coming up in just over a week. Well get more reaction now with hall of fame quarterback, Fran Tarkenton, who joins us on the line from atlanta, with georgia. Fran, thank you so much for calling in. Just curious what you make of all of this. Is this some kind of common practice, interfering with footballs, that youre aware of . This is all awful. Ive listened to this press conference win love tom brady, hes been coached and coached and coached. Belichick was coached. Its all a bunch of garbage. But heres the truth. Quarterbacks are obsessed with the ball. I played for 18 years. I set every record. Before the game i had my equipment guys rub the ball down, to make sure its what i wanted them to do. I got and i would try and i would grip it to make sure it was the right grip. I did that every time for 18 years. The one thing i didnt do was inflate the ball or deflate the ball we didnt think of that. But the quarterback does not let a ball come out of his sight. And what happened here is they deflated the ball they found out that it was deflated below where it should be. And tom brady knows exactly what that ball feels like and he okayed the ball and thats the bottom line. Fran you said something very important, you said we didnt deflate or inflate the ball because we didnt think of it. Havent we already heard from players indicating that this now may be something more common . Well it may be. I couldnt know. But we never deflated them because we didnt think about it. But there is a rule. The rule is youve got to have it at 12 1 2 pounds. And they went down to 11 1 2 or 10 1 2 pounds and thats against the rules. And if this is a practice theyd be letting this practice go on for a long time with nobody checking in on it, but i dont think theres any question. Youre not going to go and get if youre a quarterback, like tom brady or Aaron Rodgers or fran tarky, you know exactly what theyve done to that ball. Fran why is everyone blaming the patriots . Why isnt the nfl to blame . Why dont they standardize the balls, like they apparently do in the super bowl, and that they do in basketball . Isnt this a well my super bowls, we the quarterbacks have always been in control of the balls before the game. And of what the ball is going to look but i wasnt even aware of the rules on what the weight of the ball should be or not, but we didnt mess with that part of the ball. But they do now. They have those rules. But obviously, youve got people tampering with the balls. But what im saying is the quarterback knows what that ball weighs and what that ball feels like. Bottom line frank, because we have to go, im sorry, but are you saying then that you think tom brady was not telling the truth . I think tom brady knows exactly what the ball felt like. He has the final control over the ball. Yes, he knows where the ball was what the weight of the ball was or not. Fran, thank you. Got to leave it there. Some breaking news again back at headquarters. Well send it back. Whats happening . Heres whats happening, kelly. We have some news here reporting by the ft the Financial Times is saying that telefonica is poised to agree to a deal to sell its British Mobile business, thats called 02. That o2 business would be called to the Company Controlled in hong kong by lee kaxiang, one of the wealthiest men in the world. Now, the deal again, which owns the 3 mobile company, one of the big mobile operators in the uk, their combination could be a good deal, this according to people familiar with the situation right now. According to the ft telefonica has been in talks to sell this o2 business to Hong Kongbased since similar discussions with bt ended before christmas. Interesting development on the International Wireless front. Possibly a change in the landscape in the uk. More to come when we get details. A huge cross border deal a fascinating one too, dom. Thank you so much. Were back in two with some final thoughts. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Welcome back. So much action today. Lets get to a quick final thought with each of our panelists before we go. Nathan . Stay in europe youre now about to be rewarded for your Asset Allocation you couldnt stand last year. Dont get weak in the knees. Despite the weaker euro . I like it. And if you want to sarah will tell you how to hedge your positions a little bit more but stay in europe. That could help earnings that weaker europe for european companies. Thats another plus. Watch the euro see if it falls closer to peridy even faster. Well see if the currency pressure does to them. Zack . Look, theres a lot of ballast for this market and today resupports that fact. Until the fed does or does not do whatever theyre going to do in june, barring global crisis, which always happen but hard to predict, theres a lot to support. They can keep messing around with their currency. Is that what youre saying . Guys, thanks everybody, so much for being here this afternoon. Really appreciate it. Fast money is coming up in just a few moments. Melissa lee, whats on tap . Hi kelly. One of the most hotly anticipated ipos expected this year. Weve got an analyst who says it is a notouch under any circumstances. Well see if hes thinking outside the box. All right, kelly ill take it. Thats all ive got. Fast money starts right now. Live from the Nasdaq Market site, overlooking new york citys times square. Im melissa lee. Our traders are dan grasso and starbucks shares rallying on the back of earnings. The Conference Call starting right now. Well bring you the latest comments from ceo Howard Schultz throughout the hour. But first, the return of the rally. The s p is now positive for the year, after the European Central bank announced new bondbuying program this morning. The s p is now less than 2 from its alltime high. Financials leading the way today with bank of america up more than 4 on the day. Is the ecb move an allclear sign for stocks . Guy, what do you say . Well its a madness sign for the world. But an allclear for stocks . I dont know lets see what happens tomorrow. But for a day at least, things worked out pretty well. We had some interesting price action in the morning. I thought the movement