Transcripts For CNBC Closing Bell 20150126

So were told. Snowmageddon snowpocalypse, whatever, a blizzard. If you havent heard by now its coming this way and it will affect tens of millions of people. We are live at major airports with thousands of flights already canceled at this hour. A state of emergency has been declared in new jersey in new york. I havent heard if connecticut has but they should. Connecticut they have shut down the major roads, major highway transportation starting at anywhere from 7 00 to 8 00 to 9 00 p. M. This is one of the biggest preemptive moves weve seen for a storm. Obviously if it doesnt pan out there will be a lot of guffawing. But you cant take too many precautions with the wind and the ice and the potential for power outages. We have the latest on where the storm is heading and how many feet of snow you may be waking up to tomorrow depending where you are. Thats right. Were measuring it in feet not in inches this time around. This one apparently is the real deal. So well keep you updated on all that coming up. Just so everybody is aware here in new york 18 inches is the latest we have seen from our nbc news meteorologist. For boston 24 inches. And all through that corridor, again, depending how exactly the storm hits we are talking anywhere from a foot and a half to two to possibly upwards in terms of snow. But gary cohen is still going to make it down here Goldman Sachs president. He will join us for an exclusive interview. It was cohn who declared we are in currency wars. Also a different kind of storm continues to rage the one the white house ignited by trying to take away the tax breaks from College Savings plans. The president insists its really a gift to wealthy people but the story calls into question exactly who the administration thinks is wealthy in the United States. That is a blurred definition. That is for sure. Well have that story coming up later on the closing bell. Here is where we stand. The dow jones off 25 points. Both the nasdaq and s p with saul positives but frankly the real story today continues to be whats happening with Interest Rates and well take a look at the 30year which is trading and closing at record lows today. It traded as low as 2. 33 , closed at 2. 36 . Both of those respectively are record lows. The tenyear hovering around that 1. 8 level. Its record low going back a couple years now was 1. 39 . A lot to talk about as we get ready to show you the tenyear. There it is at 1. 82 in the electronic session. Lets talk about it. Our the Closing Bell Exchange we have margie patel, Anthony Chan Sam Stovall has his team of dogs parked out the big board at the new york for example. Tom from sevens report. Already i can tell i hate tom wherever you are. Thats a palm tree behind him and we have Rick Santelli with us as well. As our bond investor, are we going much lower, are we near a bottom in the long yields now that we know at least we think we know what the European Central bank has in mind for the next couple years in terms of easy money policy. Will we continue soto see our yields move lower . All the trends that have pushed rates down are still in play. The fed is concerned about keeping rates slow. Were very attractive compared to europe. Inflation is very low. So i think well continue to see rates go even lower from todays record levels. Anthony chan lets show than again. Im used to having him down here at the New York Stock Exchange anthony, but where are you right now . Im right here in times square. Rockefeller center. Youre allowed. So listen, what do you make of all these moves in Interest Rates and what part of the world or what asset class looks most attractive to you guys right now . Well i think equities still look pretty attractive and i say equities in the United States which is where were overweighting. We think europe is interesting. Were neutral to europe. But as for those rates, those rates could continue to be under some downward pressure because what is the European Central bank telling us . Theyre not only going to continue buying these bonds, but if inflation doesnt pick up then they will continue for a much longer period of time. Remember, were now in a globalized world. So if german bund yields are continuing to be at low levels and push lower and lower, thats competition for the u. S. Treasury rate. Yes, eventually as the Federal Reserve starts raising rates, there will be upward pressure but its muted upward pressure because of this global competition for bonds. Tom, the other asset class, of course, we keep a close eye on oil. Our friend dan jurgen had a terrific piece in theover the weekend. Youre agreeing with him. You dont see a bottom yet. How much lower do you think it goes . I think we could see a trade with a 30 handle in q1 or q2. Natural gas could be an interesting area. Natural gas when it broke 5 everybody said all this production would be shut in because of low prices. It wasnt. Production continued up. A lot of producers fibbed about what their real evens were. We could see production continue to rise and oil continue to go into the 30s. That raises an interesting question for us going back to the deflation inflation discussion. Im sorry, either one i suppose, whether its here whether its europe, if quantitative easing over there works, shouldnt bond yields are moving up . Maybe they will if, you know germany was allowed to leave. I know everybody is talking about greece leaving the eurozone but that doesnt make any sense. Everybody should stay in but germany. Germany is basically running at full employment. The euro has gotten weaker. If theres any place in the world thats going to have upward pressure in prices its going to be a place that has growth and true tight employment, not just smoke and mirrors with labor force participation, and as for that 30year rate i know its interesting to talk about some of these intraday moves, but the facts are that all u. S. Rates made their low yield peaks on the 15th. 11 days ago. The 22nd was thursday. It came and went. We didnt get a new low closing yield in the 30year which is 2. 36 . We havent closed below it. It looks like were not going to do it today. Weve had seven straight sessions of super tight tenyear yields between 1. 78 and 1. 84 . Their low yield is 1. 71 also from the 15th. The reason i bring it up isnt to split hairs. This was so well telegraphenedd that it now becomes the euro game. And you will have somebody on talking about currency wars. If youre going to be playing that spread game it works a whole lot better when you have confidence that the drift in the euro is going to be slow and easy. Im not so sure thats the case anymore. Im glad you corrected the record on that. Bill, you have brought up this point with regard to the influence europe has on rates. We do see the biggest downward pressure during european trading session. Once europe closes at 11 30, the pressure is off, if in fact theres been selling that day in the equity market we see that pressure alleviated. And the same thing happens in the currency markets. Speaking of currency sam, as the dollar strengthens, theres a feeling out there that small cap stocks tend to outperform the large caps and were in what many believe to be a strong bull market for the dollar right now, but you think the large caps are still the place to go. Why . Exactly, bill. Well i think its sort of misdirected reasoning. Obviously investors say, well if the dollar is going to rise then you go to those area that is dont have International Exposure because their earnings wont be trimmed by the stronger dollar. Well, actually a lot of Companies End up hedging their Currency Exposure and you have to think about why is the dollar going up . Its because were a much more attractive marketplace on a relative basis to international investors, and they probably dont know the nuances of the u. S. Markets the way they know their own home markets so theyre going to focus on the more well known names and historically since 1985 whenever the dollar has been rising above the 95 level where we closed last friday that the large caps have outperformed the small caps. Sam, are you convinced the dollar rally weve seen is going to keen going . Over the weekend goldman was the latest to go wait a minute maybe the fed might start to jaw bone or push back its prospects of raising rates this year. Good question kelly. I think in the mere to intermediate term we might have a counter trend move because right now the percent difference between the dollar and its 200day moving average is more than two standard deviations above the mean. It is at a very uncomfortable level. So we could have in a sense a retrenching, but i still think that longer term our Economic Growth is ratcheting up while a majority of International Economies is being ratcheted down. Margie i should have asked you earlier if you feel rates are still going to go lower, do you buy intersensitive stocks . Utilities have been hovering nearall alltime highs. Thats a classic play. I think the industrial sector looks rather interesting because its really been discounted because of so much fall off from the Energy Sector and they have very high cash flow rising cash flow. They look rather bondlike to me and they may be the beneficiaries this year for investor sentiment. We have to go but, tom, would you buy energy even if you feel prices are going lower here . No no. If you want to try to catch a falling knife, good luck but were staying on the sidelines. Or a falling rig. Thanks, tom. Thanks, everybody. Be safe out there if youre in the Northeast Area. Tom, be very safe out there with those palm trees. So that monster storm bearing down on the northeast, its expected to dump up to three feet of snow in some areas and pack near hurricaneforce winds at its peak sometime overnight and early tomorrow morning. Lets get the latest from our Weather Channel meteorologist tom niziol. What can you tell us . Well were now using terms like historic for winter storm. You know asjuno. Over 28 Million People under blizzard warnings in the northeast and nearly 60 million under some type of winter alert. Look at how the system will move own the next 24 hours. The snow breaks out and begins to increase this evening. In that stretch from philly to new york and boston winds will increase as well so that by later tonight we will be in fullblown blizzard conditions from new york to boston with snowfall coming down at an inch an hour. This continues right into that Tuesday Morning time frame. Now, by tuesday evening new york city will begin to see the snowfall wane across your area but in eastern new england, that snow will continue along with those strong winds and blizzard conditions. Its not until during the day on wednesday that the system begins to lose some of its punch as it moves offshore. Those are the snowfall totals. Two feet plus in the boston area. I wouldnt be surprised to see some areas in the west of boston get as much as three feet. New york city right now forecasting a foot of snow but to the east of them as much as two feet. Just to the west it drops off to about 8 inches or so. Big changes there as you go from west to east. The other part were going to look at are the winds which are going to increase throughout the night tonight and into tuesday bringing blizzard conditions to this area along coastal new england. That combination of wind and snow will mean that travel by Tuesday Morning will likely be impossible in some of those areas. Stay tuned. Well keep you updated on winter storm juno. The blizzard for this week. Well send it back to you. Thats our tom niziol. Im starting to think i should have brought more than a couple tea lights and a thing of matches. You werent a girl scout i take it. Im regretting that now. We have 45 minutes to go into the close. A lot of people already starting to leave early but still most of the guys down here a lot of people staying around to make sure they can trade tomorrow if need be. The dow is in the negative but the s p and nasdaq are both slightly positive. And we have had a lot of questions about it too. We will be here tomorrow. Oh yes. We will be here tomorrow. More on the mega storm hitting the northeast from virginia to maine. Thousands of flights have already been canceled. Schools, businesses already closing, and the streets in the city will all be closed by at least 11 00 p. M. Tonight. Also businesses adjusting what theyre doing because of the snow. We have dow component United Technologies moving its Earnings Report to tonight right after the close. They were supposed to come out tomorrow morning. Weve got microsoft already slated to post earnings later, so we have a busy after the bell session. Well bring you both of those reports the second they hit the tape and instant analysis. Stay tuned for all of that. Coming up our friend vanguard founder john bogle gives us his latest take on the markets. He made waves last time when he said keep it here in the u. S. Dont invest internationally. Well ask him if he still feel that is way and how hes riding out the storm out in pennsylvania. Stay with us. 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. Alright, so this tylenol arthritis lasts 8 hours, but aleve can last 12 hours. And aleve is proven to work better on pain than tylenol arthritis. So why am i still thinking about this . How are you . Aleve, proven better on pain. Welcome back. Yes, normally when we come out of commercial we will show you what the markets are doing, but this is whats making news today. This is times square part of the storm thats making its way up the coast into new england, and this is just the very early stage of this storm at this point. Were expecting a couple of feet of snow maybe 18 inches maybe 24 in central work but its heading its way up today on an otherwise kind of a quiet day in the stock market as you can imagine. But its a busy week or earnings and thats impacting some of the reporting. United technologies moving its report to tonight. Its the busiest week of the earnings season. We have 120 s p companies, 11 dow components expected to post results. Dominick chu rounds up the action including one going earlier than expected because of the weather. Its United Technologies. Theyre based up in connecticut. Theyre moving their release from tomorrow morning to after the clesosing bell. The street is looking for 1. 62 a share. Right now utx shares down by 1. 33 . Microsoft also out with its results after todays closing bell. Analysts are looking for 72 cents a share. Microsoft down by about a percent. Theres texas instruments, one of the biggest analog semi makers. Expectations a profit of 69 cents cents. Earlier today dr horton a home builder, posted better than expected First Quarter results on a 35 jump in new orders. Well end with Norfolk Southern advancing on better than expected Fourth Quarter profits. That rail company up by 1 kelly, bill in todays trade. Back over to you guys. Great stuff, dom. Thank you very much for now. Lets size up this market with one of the most wellknown investors today. Vanguards jack boblbogle joins us from valley forge, pennsylvania. How is the weather . That obviously is a fake background. Are you snowing yet in valley forge . Im in valley forge. It is snowing not too heavily yet. Were supposed to get a lot later and we dont change that illustration behind me. If the building is changed, we would change it but if the season change, were a mutual company, were trying to save money for our shareholders. Keep the expenses low. Thats for sure. What do you make the last time we spoke, you said keep it to the u. S. As far as investing. You felt investing internationally would be a mistake right now. But now we have the European Central bank moving on quantitative easing, their version of easy money policy right now. We know what easy money did to the United States stock market. Do you think it will have the same impact on the European Market . Would you invest over there now . Well first, im not one for going back and forth as you well know as well as anybody, bill. Weve sent so many winters together, and the moment doesnt matter much to me. The markets are funny, theyre sometimes right, sometimes wrong but my overall view is if you stick with the u. S. First of all i dont think your listeners understood this. I got a lot of vituperation for what i have been saying for the last 25 years condensed into about two days about saying you dont need to do International Investing because the u. S. Is an international economy. We get half of our earnings, half of our revenues from companies outside of the u. S. From operations outside of the u. S. So you are an international business, if you will, right here in the u. S. And i dont see any reason to add more. Okay. Id have a mind open enough that if you really want to do it, you know im never sure im right, but dont go over 20 in nonu. S. Securities because you earn your money in dollars, you spend your money in dollars, you save your money in dollars, you invest your money in dollars, youll retire earning money in dollars with Social Security checks, and so youre taking a currency risk when you go abroad in a different way. So i dont think you need to do it, but i wouldnt know when it get in and when to get out. I believe its true that from the beginning of the data maybe back in the 1970 or something, international versus u. S. The s p has outperformed and thats a long time period because we have a stronger economy. We have a more diversified economy, Better Technology economy. Okay. More innovation. Jack im just wondering actually as people start to think about their exposures and whether they even want to stay home, they still have a big decision to make about investing in stock versus bonds. Lately more and more people have started to throw in the towel and say, all right, the bull run in bonds is going to keep going and just buy it and sit tight, but were going to have gary co hn of goldman coming on later and hes concerned about liquidity if rates start to move or the fact that some people may not be able to get out of some of the mutual funds if there are big moves. What would you say to people about buying bonds generally speaking . I would love your perspective on this . I would say caveat emptor, let the buyer beware. There are all kigedsnds of bond funds with differences in quality, sometimes hugely over priced, heavy expense ratios which can eat up a third of your yield at these levels. The tenyear treasury is say around i guess around 1. 8 and if the fund is charging you 0. 60 , thats a third of your yield down the tube for no good reason. I reason i like up to a point at least the total Bond Market Index Fund is its 70 governments. I would prefer a Smaller Government position but the Government Bond market is not going to lose its liquidity, not the market for u. S. Government bonds. I cant see that happening. For marginal sections of the bond market i would say look out and stick to quality. Quickly before we have to go here, jack obviously we see the price of oil continuing lower. For years we talked about the reason to invest is to stay ahead of inflation. Is that inflation rate going to continue to be lower . Are we headed towards a deflationary period as a result of this do you think . Well here in the u. S. I can see inflation remaining at a little bit above these levels say in the range of a half a percent to 1. 5 . I think the last report was pretty much even depending what you do with oil. They sometimes leave it in sometimes leave it out, but theres a natural inflation rate from raises and all kinds of things quality improvements, things like that and i dont see us going to deflation. But on the other hand, supposing you do what are you supposed to do, bill . You can go into bonds for safety, but the yields are not good. And even in the bond area i would say, i think i have said it all along, including to this show, id have my bond position not long but maybe half or twothirds lets say half intermediate term and half short term and i wouldnt forget about Municipal Bonds at these levels because they seem to me to be quite attractive when you take the tax bracket into account. Especially with some of the changes on that front lately. What about, do you have a 529 plan . Does this affect you at all, the potential changes the president is talking about . I dont want to date myself but all my grandchildren are just about out of college. Well youre lucky youre grandfathered into this one i guess. So to speak. Thank you for being here. My pleasure always. Good luck in the storm. Thanks. You, too. Stay well. 35 minutes left in the trading session. We opened lower, moved a little higher, now the dow is down 18 but the s p and the nasdaq holding on to some gains right now. Meanwhile this potentially historic blizzard hitting the northeast up to three feet of snow expected in some areas. Two traders from the floor are going to tell us how the storm is affecting volume and if it really matters in this age of electronic trading, plus what are they doing to make sure they can get to work tomorrow . Also Goldman Sachs president gary cohn will speak with us exclusively. Lots to talk about including Consumer Spending in light of the oil collapse and what he calls the currency wars and where that takes us. Stay with us. She inspires you. 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That one i wasnt. I remember we had hurricane gloria where they had to shut it down early. But these things are more complicated than just bad weather because you have to make decisions based on a lot of factors. If you consider 9 11 for example, right, the exchange was ready to go a lot sooner than the surrounding areas were ready to go and when you consider sandy, that had to do with connectivity between this exchange and other exchanges, so you have to factor in all the other players and make sure the markets are open and that theyre fair and orderly. If only half the guys can make it, is that really what you want . How is it affecting volume tomorrow and how many people need to physically be here for it to affect liquidity or not. Im going to start off with this. I think its ludicrous that theyre opening tomorrow. I have a lot of reasons. I think if the governor and the mayor of new york city declare a state of emergency, that should cover everybody. It shouldnt just cover bayer and deutsche bank. It should cover here too, but that being said we are going to be open we are going to be fully staffed or as staffed as well as we can be under the circumstances. Buys will be down but our staff will be here. Well be ready to work because thats what we do. There is pressure to be on call because of the electronic age were in now, right . Theres obviously competitive factors at play. To peters point about the state of emergency, i got to be honest with you, as a new yorker im a little bit embarrassed that were throwing in the towel so early. 11 00 were shutting this down we have two sharply di ver jebt views. Were private sector the bell is going to ring were going to be here lets get it on. We think that should apply all around. Get the roads clear. You got trucks you got people. Make it happen. Lets go. A question here. We know we see the activity you were involved in on the opens on a lot of ipos and closes how much of that can be done quote, unquote, from home and how much physically has to be done here . The openings and closings have to be done here. For them to have the right price on the opening and the close, the way our markets are set up, you need to have humans to intervene. You want me to get back to gordons thing . I can roll with this. You can work out it out across the street. I know you will. Thank you both. Youre welcome. And be safe please. Getting to and from. Were also now going to flip things down to talk a little bit more about some trading taking place. Bob pisani is at home because of snow. Hes actually avoiding this storm by very appropriately being down in florida. Yeah. Only you could plan this pisani. Youre at the conference centered around Exchange Traded funds. So go ahead, you can begin this interview. Its all yours. Its 72 degrees here. Thats all im going to say. Well move on and talk about oil because commodities and what to do with them 2,000 investment professionals at the etf conference. Jan is one of the big Global Advisers in the commodity area runs a Commodity Fund and a suite of commodity etfs out there. You have been watching oil for 30 years. Where do you think its going to go . Has it bottomed . I think we think its a little too early to say this is a definitive bottom bob. I think where our conviction is a year out, and we just think the fundamentals dont support such a low price, but when youve had such success, then theres a lot of traders Everyone Wants to know should we be buying oil now or oil stocks right now. You run a big etf, oih, its oil Service Names like halliburton and schlumberger. Is there a lot of interest . I get emails every day about should we buy these stocks now . Any smart contrarian is looking at the energy patch right now. Some of the smart crossover money is definitely coming into the space. For us wed like to look at what the sectors are that have been hit the hardest. Oil services and some of the exploration and Production Companies we think will survive this kind of mayhem. You dont like buying oil. You can buy oil as an etf. Uso is the symbol these days. You dont like that. Why do you advise people buy the Energy Stocks and not the oil itself . My biggest concern about playing commodities in the kind of etf world is the shape of the curve and we dont need to get into the details affects that and the way the shape of the curve is now its costing you almost 2 a month to own, just own it. So if the price is flat youre down 20 over the next so youre rolling into the futures contracts an its costing you money. The one sector you would own, oil production. Quality names where the cost of production is below even the 45 of today. That would be the xop, right . Yes. Jan, nice to see you. I will be here for the neck two days while you are digging out up in new york talking about what kind of investments are hot for 2015. Back to you. Dually noted, bob. Our thanks to jan. More is available on cnbc. Com. Bob has some great trends going on in this world which is quickly changing the entire investment landscape. Weve got less than half an hour now to go bill and we have the dow off 26. We do have full Team Coverage of the monster storm trucking up the east coast. Well have the latest forecast and how it could affect you and your bottom line, especially tomorrow. The blizzard prompting dow component United Technologies to accelerate the announcement of its earnings to tonight after the close. It was originally supposed to be tomorrow. We will bring you both reports the second they hit the tape. We have a great group sticking around with us. Stay tuned. Welcome back to showdown im jerry rice here discussing the big race between the tortoise and the hare. My guest is stephanie branton. Jerry, im going bunny. Shocker. Not really. You see, the hares thoracic limbs allow for greater extension and elongated strides. Look for the hare to leverage this advantage. Ok. Vote on twitter for your chance to win a mercedesbenz big race viewing party. 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 welcome back. We have 20some minutes left in the trading seg. The dow is down 16. S p up 2. Nasdaq up 7. The more interesting market today is the treasury market where the yield on the 30year hit an alltime low this morning at 2 33 and change and weve been seeing multi, multiyear lows in the 10year yield. Were well off the low yield. Were at 3. 29 . People are cozying up to treasuries as up to three feet of snow near hurricaneforce winds are gathering outside. Weve got full Team Coverage of the storm that is expected to go down in the history books as one of the worst to ever hit the northeast. Out we go to the streets in new york city. We have Jackie Deangelis doing duty outside the nymex. We have Morgan Brennan in the heart of the city in times square and kate rogers is out at laguardia on long island. Jackie can you see the statue of liberty . I bet you cant by now, right . Reporter you cant actually. Visibility is very low in Downtown Manhattan and actually you just missed a barrage of snowplows and salt trucks trying to get ahead of this storm before it really starts to come down, but the streets are getting messy right now and people that work in the financial district are starting to head home at this point. A lot of vehicles on the road as well because officials have advised drivers to be off the roads so that they can clean them properly and also be open for emergency vehicles. Meantime, a couple things to think about here. The exchanges right now are going to be open for business as usual. Those are the latest updates that we have. The last time that then yse was closed was during Hurricane Sandy in october of 2012 and, of course, the last time it was closed for snow was in february of 1969 but that was a completely different era because there was a lot less going on electronically. So as long as power seems to stay up it appears it will be business as usual. Residents in battery park however, are worried about power because they suffered through sandy. They are stocking up on supplies and bustling and hustling home because it is getting quite frigid out here. The wind downtown is really the thing to think about. That may make the cleanup very difficult. Back to you. Thats a point, jackie. And im looking at morgan too. Morgan, were in times square for hours now. Ive been amazed how much snow there is already. How is it now . Reporter oh, my gosh its been coming down very quickly just in the past couple of hours. As you can see its accelerating and theres well over an inch on the ground now and despite statements earlier to the contrary, were also now getting an announcement from the Broadway League that all broadway shows are canceled for this evening. Thats due to local road restrictions and that we could see cancellations for tomorrow as well. Well be getting more news on that later this evening. So new york city mayor bill de blasio has said that the streets the city streets will close down tonight at 11 00 p. M. As for Public Transportation the new York City Transit is up and running, but service is very limited. In general were seeing new York Metro Area state of emergency has been declared also getting a state of emergency for connecticut, massachusetts, and new jersey. Officials in all of those areas urging motorists to please please, please stay off the roads giving these rapidly deteriorating, very difficult conditions. Back to you. Morgan thank you. We were just saying theres very few broadway show that is play on mondays, so its not surprising that they would cancel tonight but its tomorrow i bet that you will see a lot of cancellations if not all of them but well wait and see what the weather does at that time. Thank you, morgan. To kate rogers now at laguardia and we all know the airlines have been trying to stay ahead of this one. So cancellations everywhere right . Reporter thats right, bill. Cancellations have continued to mount. Its definitely a mess out there. Just within the past hour or so both lardaguardia and newark have issued ground stops on all arriving flights. Flightaware. Com has been tracking this. They say between today and tomorrow there are over 6,300 Flights Canceled in and out of the u. S. If you look here behind me at laguardia, its turning into kind of a ghost town. Theres not that many people left here. A lot of people came in earlier in the day trying to beat the storm. This as united and american both suspended all flights in and out of the Northeast Area airports for tomorrow and boston logan still the only airport as of right now thats completely suspended its Service Beginning at 7 00 p. M. Tonight continuing into tomorrow but flightaware. Com says the way things are going right now in the new york city area they do fully expect that all flights will be canceled in this area by tomorrow. Back over to you guys kelly and bill. Kate, thanks very much. And to jackie and morgan as well. Stay warm. Now a bizarre developing story on a russian spy ring. Eamon javers a stepping in with that. Just within the past hour, u. S. Officials have announced charges against three alleged russian spies active in the new york area. The government officials are saying that two of them were posing as Russian Diplomats but were actually russian intelligence offers. One of them was what they call a knock, a nonofficial cover person. This person allegedly posing as an employee of a russian bank. What they were interested in here in the United States though is not clear. The press release on this gives some of the details but its a little bit vague. Saying that they were recruiting young women at a new york university, also saying that they were targeting a consultant in new york and also saying that they were asking questions at one point about the New York Stock Exchange itself, not clear at all what their questions were about the New York Stock Exchange. I have been emailing with some fbi officials just over the past half hour and theyre all staying pretty buttoned up about this, just sticking to whats in the press release but the headline is three alleged russian spies operating in the new york area. I have no comment. Wow, thats interesting. We had not heard that wrinkle in the story. You got raised eyebrows on that one, that theyre asking about the New York Stock Exchange. Its not clear what they were asking about. In the document it says they were asking questions of a reporter for a russian News Organization passing along a line of questioning about the Stock Exchange that that reporter should ask. That rorner is not named, the News Organization is not named and what the questions were is not named. Like everything in espionage, its a little vague and a little bit squirrely. You certainly piqued our interest. Thank you so much this afternoon. 15 minutes left in the trading session here. The dow is down 18. The s p up 2. The nasdaq up 5 points as we head towards the close with this monster storm heading to the northeast. A key fed policy meeting kicks off tomorrow. Well tell you what you need to know about all that coming up. And amid all of this greece electing a new far left antiausterity leader. What this could mean for wall street and your money coming up next. 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. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ 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. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Anything worth pursuing requires knowledge, hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. The major story this weekend, europe facing one of its biggest tests with greece electing a new antiausterity leader. Michelle carusocabrera is live for us in athens with the latest. Good evening, michelle. Good evening, bill. 40yearold alexis sepris was installed as Prime Minister after winning a bigger percentage of the vote than anyone expected. During his acceptance speech last night, he told his supporters the days of austerity in greece are over. In greece well return democracy. Greek people will regain social cohesion and dignity and the message is that our Common Future in europe is not the future of austerity. It is the future of democracy, solidarity and cooperation. So he claims hes going to end austerity. Hes going to reinstate government workers. Hes going to pay them more money. Hes going to raise the minimum wage. Hes going to roll back taxes for the poor. How is he going to pay for it all . He says hes going to tax the rich even more. Hes going to make tax collection even more efficient or more efficient. The bar there is admittedly low. And he also says hes going to get his creditors, the International Lenders that have given hundreds of billions of euros in bailout money, hes going to get them to forgive some of those loans particularly from the ecb or the european commission. Some of that is probably going to happen but probably not all of it. Theyre going to have a big fiscal gap. How is he going to fill it . Likely there will be some kip type of faceoff between his economic adviser around his creditors. It could be messy and we could see volatility and it could ultimately lead to the possibility, maybe an accident, of greece being forced out of the eurozone. Guys, back to you. Michelle thank you very much. We can see the skepticism on her face with all of that and you know that other European Countries will be watching very very carefully to see if he makes any progress on that kind of an agenda. Not to mention everyone who has pinned their hopes on mario draghi. Will greece spoil the party . These questions remain. Some outperformance by the energy names and a good session for home depot and lowes with the storm approaching. Art cashin just walked by and signaled we have 300 million to buy on the close coming up. Also ahead, Goldman Sachs president garyc cohn will join us. The term he was just talking about last week, the currency wars, you have heard so much about. Later the backlash against president obamas proposal to tax the 529 College Savings plans continues. The part of the middle class that hes calling rich are not exactly feeling wealthy. Well give you the facts on that story coming up. Head to the close, we mentioned art cashin saying there was 300 million in stock to buy on the close. Were coming off the low a little bit. The dow down 6 points. The s p up 3. The nasdaq up 10 points. Joining me is mark from premiere wealth, and peter costa from empire executions is back with us again. Mark obviously kind of odd time were in this awkward period because of the weather and everything. Is this a time to just stand back and let the market do what its going to do or you want to take advantage of opportunities . I want to take advantage of opportunities. Where are they . Im advising to my clients to get into the market. The opportunities lie in industrials, technology biotech. I like emerging markets, and i do believe europe is a strong place to be even in spite of the side show there which is whats going on right now. With greece you mean . With greece in particular. Our exports make up less than 1 100 of a percent of our gdp to greece. I think its a small factor fundamental we dont need to Pay Attention to. Investors and my clients need to focus on the fundamentals driving this economy, loose monitor policy low rates. There are a lot of factors driving the u. S. Economy. Its a plow horse economy, not a racehorse economy. Are you watching support levels or anything right now with the weather and everything . Does it matter . Is there a business asterisk on the market . Theres an asterisk on todays market and tomorrows market. Looking at things a month, three months, six months well forget about this. Im looking at like i told you before, individual stocks being a little more selective in where we put our money to work. And i like the Energy Sector. I love a beaten down a great a very well managed company in a beaten down market is like the perfect spot to invest because management will always win out. Do you want to name names . Im not allowed to but i would go with any of the big droul driller and oil conglomerates. I love them. We have to go. See you later. See you tomorrow. Markets opening tomorrow. Well have somebody here. Okay. Us, too. Well come back with the closing countdown in a moment. This monster noreaster could paralyze much of the northeast. Well have the latest forecast on that coming up. After the bell earnings. Its the busiest week of the period and tonight its dow component United Technologies and microsoft. Utx moving up its announcement. Because of the blizzard they will be announcing in a few minutes so well have the numbers and the market response when we come back. Youre watching cnbc, first in business worldwide. They challenge us. They take us to worlds full of heroes and titans. For respawn, building the best teractive entertainment begins with the cloud. This is titanfall, the first multiplayer game built and run on microsoft azure. Empowering gamers around the world to interact in ways they never thought possible. This cloud turns data into excitement. This is the microsoft cloud. Very quickly heading to the close here. Here is the dow today. The selloff this morning, maybe some of that greek related, two knows. Sideways activity as we get ready for the storm tonight. Now weve got earnings to watch out for. Two big guys and United Technologies was supposed to report tomorrow morning. Now its tonight. Microsoft will be out after the close. Mary thompson, what are we expecting from these guys . United technologies, it will be the first call for the ceo. When he gave guidance that the companys earnings for 2015 would be hit by fx as well as pensions. He said at that time north america is good, europe is slowing, dhin is slowing as well. We look for added color. Microsoft, this is a quarter about hardware. You tend to see strong hardware sales but theyre also concerned about what was the revenue for their clousbased products and whether or not theyre going to lose any revenue because theyre giving away windows 10 for free to some people. Well see what happens. Thank you, mary very much. Were going out with the dow in the green. Stay tuned. Big earnings coming up plus the president of Goldman Sachs on the currency wars on the second hour of the closing bell with kelly evans. See you at happy hour, kel. That is for sure. Thank you, billing. Welcome to the closing bell, everybody. Im kelly evans. Weve hit 4 00 on wall street on this monday as the snowstorm bears down on the northeast. Markets going out it looks like across the board in positive territory and again we spent most of the day with the dow especially under pressure going back to the greek victory yesterday. You heard from Michelle Carusocabrera on that. Will it potentially derail what mario draghi has done to try to boost the eurozone and the Global Economy as well . Thats a question that hangs over us here. The dow going out with a gain of about five points. The s p same five points. Thats good for a quarter percent on the s p and the nasdaq up 0. 3 . Were waiting on some key Earnings Reports due out momentarily. Joining me now is steve ber tony from forbes. Jon fortt, thank you for staying. And with us for more on todays Market Action tim seymour and kenny polcari. Any impact today . There was light volume today. We only traded 640 million shares. Thats my point. Is that a snowstorm thing . Im not so sure its a snowstorm thing . I think the volume has been light. Might blame some of it on the snowstorm. I think some of it is the market trying to digest the most recent news, the ecb, the greek vote. It wasnt unexpected so the markets kind of refocusing on u. S. Macro data. Are we overlooking of the shake up in greece . Its a complicated story because they didnt get the supermajority that would have given tomorrow the total power. However, theyve chose to create a coalition with the independent greeks party which is largely pushing for austerity and restructuring which clearly europe is not going to do but both sides and that means europe and the greeks at this point say its not about pushing to separate from the euro. Thats the most important thing for the markets, and one of the things that weve been talking about for a long time is that greece has really been almost giving you an opportunity to invest in europe and if you look at negative yields in 10 out of 19 countries across europe, you have a place where equities have to be invested so the sx 5e is up 14 in five days. That tells you people think greece is fine at least for now and thats probably how you play it. Staying out of the headlines. Uber is in the headlines a little bit because it put out a note saying its been under a lot of pressure during periods when people really need transportation. It said we have talked to thea g. For the snowstorm we will not charge more than 2. 8 typical times. I have had friends theyve had 8 times surge pricing. We got an email sponsored by the red cross saying because its a National Emergency we will only do three times or 2. 8 times. Is this company learning . Or will we say this will be a model. Its a good pr more for them. If people get stuck and they get 8, 10 12 surge pricing, they will say uber killed us. Will that keep people off the roads . Yes, it will but i think if youre uber you look at the pluses and minuses in the situation and decide its just not worth it to have some story out there tomorrow about somebody who feels like they got gouged. Better they just cant get uber car. I thought this was a nice point mark mart yak made that the u. S. Is more of a plow house economy horse economy rather than a racehorse economy. Do we need oil . Do we need that Services Business to get us there or no . The oil Services Business . Yeah. Listen im of the mindset that Lower Oil Prices are a great thing for the u. S. But i think we are in that plow mode. I dont think were in a racehorse mode. I think the market and the economy in this country is coming back. But its a slow slog coming back. Everybody feels it. Theres a disconnect between where the market is and where joe q. Public feels that they are, and so until that disconnect comes together i think thats going to be the real sense. I dont think people in this country think that we are racing ahead and everything is beautiful. For sure. The polls are better but at the end of the day, a lot of this is still mixed signals. On the one hand Consumer Sentiment is way up and on the other hand Consumer Prices are plunging. I guess the latter feeds into that and we should be grateful unless its dinindicative of slowing emerging markets. People were talking about look at the dallas fed. The reason its potentially right in the firestorm of the energy pullback in this country we started to see a much bigger contraction in the dows fed report, people are watching how that will impact the labor market. That will affect the fed. That will put more pressure at least to take the pressure off the fed. So but tim were in a place where were in a very interesting time because largely i agree with kenny. Lower Energy Prices are very good for this country. Theyre very good for the world. Theyre very very good for emerging markets. Tim listen what you said its all true but nobody should be surprised when they see the dallas fed number or theyre worried about what thats going to do to that part of the country in terms of their economy. I mean thats not something thats hitting anyone out of left field. We all understand that. Hold that thought guys, sorry. Im going to jump in because it looks like we have earnings from united technologist hitting the tape. They are based in both of our were in connecticut and thats where they are as well. This is what were talking about or utx. The headline numbers coming in matching analyst estimates. Earnings per share at 1. 62 per share and earnings on sales of 17 billion. The 1. 62 matches analysts estimates. The sales of 17 billion is just about in line just a narrow miss. Analysts were expected on average 17. 1 billion. Theyve also offered guidance for the full year in 2015. They are looking for earnings to be between 6. 85 to 7. 05 per share. That falls shy of the average wall street estimate for 7. 19. It also comes in below their prior forecast of between 7 and 7. 20. They also say sales are expected to be for the full year 65 billion to 66 billion. That also falls just slightly below analysts estimates for about 67 billion on average. The company did say that they are expecting a headwind from Foreign Exchange thats going to be recurring theme we will get from a lot of Large Cap Companies but thats one of the main reasons theyre lowering their guidance or expectations for profits and sales because of the currency headwinds but again the headline numbers a match for earnings per share on a slight ever so slight miss in sales. Kelly, back over to you. Dom, thank you. You can see shares under pressure by a couple points after market. Kenny, its interesting, united technologyies technologies, this covers so much. Whether were talking defense, the marine one helicopters, or even just elevators, otis and but it would be interesting if you put up the longer term chart in utx so you can see whats happened to it. Have they already punished the stock ahead not necessarily. Their 52week high was 120. Where is it trading . It looks like it was 116, 118 in the market. So the market was not expecting this. You may see then some more Downside Pressure tomorrow. I suspect it will also depend on is this related to some weak ons ness on the defense side o as opposed to the cyclical side. Tim said it earlier. The Forward Guidance is what people will Pay Attention to. If theyre giving a negative assessment Going Forward even if its a small adjustment, the fact is its still a little bit negative so you may see some more Downside Pressure to this tomorrow. Tim, what is the reaction . I think the fx is very important. The velocity of the dollar move is something people did not expect, not that size of a move and we have a bigger move ft. First quarterin the First Quarter. The stock has been trading in a 105 to 120 range. As you said you miss and you miss on both sales and a blue line at a time bottom line at a time like this, youre going to get hurt. Does this become a utx story or about what some of the other industrials which even last hour margie patel was telling us shes looking at in terms of a place for investors to be generally. I like that call. I would say industrials, those that have global exposure they are a late cycle play. I believe the world is slightly better than most people there. The industrials are the guys that benefit from a lower input cost and a Global Economy thats actually recovering. This raises an interesting question kind of related on the transportation side of this. Thinking through other beneficiaries of low oil. This is where i find the u. P. S. Discussion last week so interesting. Here is somebody who is really getting hit because theyre kind of i dont know if this is putting it too strong amazon and others are free riding on their system. Is that fair . How much should they be benefiting . More so than were seeing from low oil prices . I dont know about free riding. Remember, theyve had a nice benefit from amazon over time. I think with the u. P. S. Situation what i was hearing is it had to do with theyre planning to make sure last year didnt get repeated in terms of them being logistically unprepared. Their supply of workers, supply of product out there on the road was higher. Their costs were higher and, therefore, they get slammed here is the funny thing, if im an investor dont i love that . Youre going to put more people to work because you have so many packages to deliver. That should be great. But its the inventory problem. Tim cook of apple is fond of saying inventory can be the bain of your existence. The inventory of trucks and people was too high. And its the Holiday Season which is prime time. Do you that in late january, who cares. But in November December ouch. Thats a point. And i agree, but i think u. Pmpl s. Is one of those stories like fed ex its one of those stories. The way people shop today, the way people buy things today, i think you buy these stocks and put them away and forget about it. Thats what makes this so interesting. I think its a short term blip. Where do you see this evolving as well . Is amazon going to have to build out more of an infrastructure Delivery Platform buy one of these guys . If they it would be you have to on prices. If they want to build up a u. P. S. Themselves rveltion, were talking billions of dollars and u. P. S. Took billions to build. Thats what theyre doing. But u. P. S. Local deliver have one thing, but nationwide infrastructure were talking decades. But what you end up potentially is amazon could end up putting pressure on the margins of the other carries because were going to send it maybe to the Postal Service who is delivering for us on sundays. Well handle that ourselves. Its grocery delivery now. Books arent as cheap as they used to be. We have another Earnings Report. Microsoft report hitting the tape. Josh lipton has the numbers. Hi, josh. Microsoft just now reporting, 71 cents on 26. 5 billion. Remember, the street here was looking for 71 cents on 21. 3 billion. Device and consumer revenue, 12. 9 billion. Commercial, 13. 3 billion. Commercial cloud revenue up 114 kelly. This Conference Call starts at 5 30 p. M. Eastern. Well be on that call and bring you headline as they cross. Back to you. Josh thank you. For now dan morgan joining us with his take. Dan, shares under pressure here. What do you make of it . Well i just got a little bit of the numbers, but it looks like they had good growth in terms of their cloud business. The area were really focusing on is that space in terms of its growth and how much they cannibalize their core windows enterprise server business. But from the whats your price target . I dont have a price target kelly, because im not an analyst, im a portfolio manager. Sorry. Whats your view on the shares . We still hold the stock. We still feel its in transition. Hopefully it can pull this off. Some other companies have been coming up a little short like s. A. P. Last week in terms of making this transition into subscriptionbased Software Company as opposed to the traditional core licensing and maintenance business. So thats really we have to see if they can do it. Jon fortt, do you have a bead on this . Theres pros and cons on this. One of the pros to kind of use a pun here surface pro three. The units were at 1. 1 million. Thats better than 1 million the yaur before. You were looking at better than a million. So they did that. Xbox consoles 6. 6 Million Units pretty good. Phone hardware down to 2. 3 billion from 2. 6 billion the quarter before. Not the momentum you want to see there. Also windows oem revenue, thats revenue from the boxmakers making pcs down 13 . Server products and services at 9 . Were used to seeing a double digit growth number there. Office about flat with last quarter growthwise at 5 and commercial cloud up just 114 . Kind ever hard to say just 114 but last year was 128 . Let me ask because we dont have much time to spend, if this were still Steve Ballmers company would the stock be at this level . No. Given the performance results if they were the same and he was still the ceo . In other words is there a you dont get that new microsoft smell with steve ballmer. We have to go. Everybody, thank you so much. Be sure to stick around and catch tim seymour with the fast money crew at 5 00. Thanks to dan morgan. Theyre going to be talking to one top apple analyst. Dont miss a moment of that. Meanwhile, here you know what this is all about. The monster storm about to slam in the east coast. Up next, well have the latest blizzard track for you and how it could impact everything from the airlines to the retailers with, for example, home depot having a nice session. President obama wants to eliminate tax breaks from College Savings plans because he sats only rich people making more than 200,000 a year use them. Is that 200,000 threshold really right . Well take a closer look on the closing bell. Major winter storm getting set to potentially shut down much of the northeast tonight. Chris pallone in boston which is going, perhaps, chris, to be hit the hardest. Reporter reporter hey, kelly, it is starting to come down here in boston. Were on Boston Common and Governor Charlie Baker says this could be a storm of epic proportions, possibly historic storm here dumping anywhere from 20 to 30 inches of snow on the boston area, but thats not all theyre worried about here. Theyre also worried about winds that could be up to 50 Miles Per Hour inland and approaching 70 miles an hour down on cape cod. Thats approaching hurricaneforce. Also, the most intense part of this storm is expected to hit about 3 00 or 4 00 in the morning where it could snow at 2 to 4 inches per hour. Whiteout conditions along with those winds and high tide is expected to hit at that exact same time as well. Its not good news for people who live along the massachusetts coast. Theyve dealt with these storms before. Some houses in places up on plum island on the north shore, people have been boarding up their houses in anticipation of coastal flooding. So officials here in massachusetts have told people to be prepared to ride this one out and it could be a while. Theyre saying they might not be able to get out of the house wednesday, maybe not even thursday. So as you might imagine, groceries have been flying off store shelves today before this storm. Kelly . Yes, this has certainly been the comeback of market basket. Thank you. For more on the impact lets bring in paul walsh at the weather company. He joins us along with our panel, larry kudlow late coming in but were glad you made it down here because of the weather. Paul first to you. Wed like to get your sense of what kind of Overall Economic impact you think this particular storm will have. Kelly, i think one of the things we have to take into account here is this storm is actually happening on a monday afternoon. It will probably impact us on tuesday and wednesday. Its hitting a Large Population sen tircenter but the fact its happening at the end of january, not on a weekend, and it is Winder Winder winter, i think the impact will be minimal. Its not a significant game changer. It will be impactful for a couple days but another allwell not see a huge impact. Larry, what is it like out there . Its winter. What, the snow . Tell me . Its winter stuff. Where are you from . Upstate new york roots are weeping right now. I agree with the gentleman. No economic impact. You have your canned goods, your gold your guns. We did a lot of shopping today. Were fine with the whole story. Did you buy all those things larry . Everything. I completely stocked up. Rifles . You never know whats going to happen on madison avenue between 92nd and 93rd. You never know. So you have to be prepared for everything. Can i just say one other thought. This is maybe half a jest half seriousness. You mentioned an economic emergency in new york and new jersey. They should make it permanent and then start slashing corporate, personal income and estate taxes so they declare a state of emergency and lower corporate taxes. New york and new jersey and ill add connecticut to that have been in a state of economic emergency. If this gives them a chance to have a complete energy and change of policies it will be terrific. And connecticuts population declined last year. Indeed. Declined. By the way, it used to be a perfectly good state with no tax rates. Estate taxes, abolish estate taxes. You may say that has nothing to do with the snowstorm, youre probably right but im talking economic emergency. Let me get paul back in here. Were all going to florida and texas. Paul . Yes. Go ahead. What were you going to say. One point i want to make as it relates to retail sales actually and q4 were still in retail q4 for many retailers and the fact we had a mild december means a lot of seasonal goods probably stayed on the shelves. So this very cold weather weve had in january, the fact were having a snowstorm in the middle of the week it will have a minimal impact on traffic, it helps from the retail perspective and help them get into q1 february a little cleaner. Of course, its going to stay cold for probably the first half of february but thats okay and in february valentines day was crushed, crushed by a winter storm last year. Thats right. That is were up against that this year. So im actually pretty bullish for spring sales even though were talking about winter storms today but i think as we move into february and especially march, weve got a very easy weather comp and i think that bodes well for the retail sector. A great point. Thank you for being here this afternoon. Really appreciate it. Thank you kelly. Falling gasoline prices are great news for consumers. Goldman sachs president gary cohn says they could be great news for his company. More in the Energy Sector are looking to consolidate. He will join me on that next. And then later will this massive blizzard cool off red hot Airline Stocks and are the airlines handling this the right way for passengers . Former American Airlines ceo bob crandall will join us comeing up on the closing bell. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. 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Weaver seen the dollar and i think we will see more and more of that. You have seen it with the euro recently. A year ago we started to see it with the yen. Now you have other countries, canada recently cut their Interest Rates. They had a move in the canadian dollar. Denmark, peru. Exactly. Everyone is in essence trying to lower the value of their currency to make themselves more competitive meaning that as they try to become more competitive, someone is becoming less xes tiff. Youre saying the u. S. Is becoming less competitive because of this . Yes, it has to. What should the policy response if anything be. Everyone says the strong dollar is good. What do you say . A strong dollar is good in some respects but remember we as a country still export products. We still export goods. We still export services. Those products, those goods, and those services get more expensive to our customers and we still import earnings, foreign sourced earnings from around the world. If you look at the stocks listed here at the New York Stock Exchange, a lot of them have foreign sourced earnings as theyre bringing back euros and yen, theyre translating into less dollar earnings. If exports are 14 of u. S. Gdp, does it not make more sense for them to be more currency sensitive and perhaps less pressing for us especially if were capturing, for example, a consumer bin fit from the drop in oil prices et cetera . Yes, it does. It does. But still we still need to be concerned about the value of the dollar and what the overall impact is in the United States. Also and this will get us into an Interest Rate discussion as the dollar continues to be strong or at least stable and we have the highest yield curve relative to most of the g7 world, it encourages more and more people to buy dollars and buy u. S. Spread product or u. S. Interest rate product, and if theres no risk in the dollar because everyone else is devaluing, that phenomena is going to continue. Lets say for example, i believe your own economist jan raised that project, the fed sensitive to this decides its going to go slower or push off Interest Rate hikes. If we see then the dollar decline a little bit because it is overvalued on a trading basis, what does that do from everything from the price of oil to the trading behavior in which people might exit u. S. Treasuries and Interest Rates go back up . I dont think were going to see a real dollar decline here. None of us are thinking theres a real dollar decline. Maybe what we see decline is the rate of appreciation of the collar. Dollar. I think were more in a world where we think the dollar has depreciated very very quickly. Has the appreciation been because of the negative Interest Rates in europe and people having to find positive Interest Rate products or has it been in anticipation of quantitative easing in europe and people trying to get ahead of that . Because what if youre going to phrase this as currency wars should the fed be going into battle . I dont know if the fed can battle. What is their tactical Battle Movement . I would advocate they have to go into battle. If you consider battle not raising Interest Rates, i think that the fed is going to be backed into a bit of a corner with Interest Rate policy over the course of 2015 and not have as much flexibility as they would like in raising Interest Rates. Let me pivot from that into how it affects goldmans business as well because if were in this period that youre describing and it looks like for example, oil prices arent about to rebound and your commodities business has taken a hit relative to the revenues it once generated and the trading business is all over the place because of this environment, what becomes the next major driver of Revenue Growth . Soo im not sure i agree with the first part of the premise . You think the commodities business is going back to a 3 billion a year business . I never said it was a 3 billion a year business but i think the commodities business is very strong right now. If you look at the oilproducing nations and the consumers, theyre in completely different positions than they have been in. If youre a consumer today and you can lock in these prices youre a lot more aggressive in the markets in hedging than you ever have been. The flip side is if youre an Oil Exporting Country today and youre looking at these oil prices and you see a fairly steep forward curve and you see 10 or 15 of price higher a year forward than you do in the stock market you have to consider trying to lock into that forward price and that all generates business. Understood. That said lets go away from those markets. Lets look at typical corporates in europe today. Holding cash costs you money in europe today. Historically in times of uncertainty which we might say europe is in a time of uncertainty, what did do you . You ran your business as efficiently as you could. You hoarded cash and waited for things to get better. Hoarding cash today costs you money. Right. So instead of harding cash you can do one of three things. Run your business efficiently. You return the cash by increasing the dividend or buy back stock, or with where stock values are around the world today, you go out and buy someone and try to accumulate other assets around the world. Not only can you do it with your hoarded cash but look at the allin borrowing costs today, theyre as low as they have ever been. I feel very, very comfortable with where we are. I feel like i want to go out and do a Share Buyback or something. Thank you so much for being here. A final point, you have dan jurgen saying 30 an hour. You have others saying back at 200. They both could be right. Its just a matter of timing. My view is were probably in the lower longer view. We could definitely get down to 30. What i think is going to have to happen is the front end of the oil market is going to have to go low enough versus the forwards that we price in storage. Got it. And then that all starts to shift. Gary cohn thank you for being here trudging through the snow. My pleasure. 529 College Savings plans are supposed to let earnings grow taxfree. President obama wants to end that because he says its mostly rich people making 200,000 or more using them. Since when is that threshold rich . Larry kudlow has some ideas about this and he will get his chance to discuss it next. Also, apple is the big name on tomorrows earnings calendar but we have a key preview on what will be the story of the day. The closing bell continues in two. Of heroes and titans. For respawn, building the best Interactive Entertainment begins with the cloud. This is titanfall, the first multiplayer game built and run on microsoft azure. 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If you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives, swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back. Its not just the blizzard. A different kind of storm continues to rage and were not talking about Larry Kudlows reaction to gary cohns interview just there. Were talking about the one starting in washington after the president s proposal to tax profits on 529 College Savings plans which are currently taxfree. The Administration Says most people taking advantage of the tax breaks are not middle class because their Family Income is 200,000 or above. Lets bring in sandy bauman on this with our panel. Sandy, is this so much about the 1 relative to everybody else or is it about the price of college for even people at this income threshold and higher . Well college is expensive, and everybody is struggling but the reality is the president is right, 529 plans help mostly people who are affluent and whose kids would go to college anyway and they help more affluent people more dollar for dollar than poor people. Sandy chen youwhen you consider what the president is trying to do, what is the net effect going to be . The president doesnt want to take money away from people paying for college. What the president wants to do is transfer funds from affluent people sending their kids to college to people who are middle income and lower income who have a greater struggle sending their kids to college. Larry . It wont work. Im sorry. It never works. Taking from the rich and giving to the middle class or the poor never works. The dollar sums are so tiny. Incidentally president and mrs. Obama have a 529 and incidentally theirs will be grandfathered so they wont have to pay the same tax penalty. I think thats inconsistent and contrary. Let me say more generically, if you look at the proposals, with respect to the tax credits for working spouses with respect to the tax credits on children and kiddy care they are reaching up to 200,000 and 210,000 as a definition of middle class. I thought middle class was 35,000 to 70,000. All ill say is simple economics. Common sense economics. You cant have a business without capital. Tax capital, youre damaging businesses. You cant have a job without the businesses, and its the jobs that produce the income and the middle class spending. So by taxing capital socalled for rich people or whomever you are damaging the prospects for the very people you say you want to help. I see what youre saying. This makes so little sense to me that the Obama Administration would propose this. I mean come on just politically do you have one of these plans . I dont because i kind of had a feeling Something Like this might happen. I figure just save it and worry the house in california that were renting out is kind of the College Savings plan there. But when youve got people who have been trying to save for college, every parent is freaked out about it and you make suck he is out of them by proposing Something Like this now even if and theres no way this goes through but even if it doesnt go through, i think you sort of created this fear around saving for college, this program that was supposed to do a good thing. A great point. By the way, should not tax savings at all. Should not tax investment. You should not tax capital. We should be taxing consumption. Thats the way this game should work to maximize growth and income. It is scare ji because youre punishing people who were doing the right thing and saving. I dont care how much money youre making youre saving. I have a roth ira. That scares me. Some politician in 20 years is going to wipe that away because they want to. You cant be changing these things. This is money theyre locking up. They cant use for a while because they want a tax break. According to sources, according to reports, the obamas which have a 529 would be grandfathered. Would be exemption from the tax. Sandy, we have to go but ill give you the last word having heard these points. Well first of all, people have already saving in these plans will not lose the benefits. And were not taking money from the rich and giving it to the poor. Were currently using general tax dollars to subsidize the rich and obama is talking about finding a way to direct those subsidies to everyone and particularly to middle income people instead of exclusively to the rich which is what we do now. Thank you for being here. Sandy baum joining us from the urban institute. Railroad operating Norfolk Southern beating wall streetss estimates by a penny. Are Falling Oil Prices to blame . Ceo wick mormon joins us next. And will this blizzard impact the Airline Industrys bottom line as carriers cancel thousands of flights. Former American Airlines ceo bob crandall gives us his insider perspective. Norfolk shorn chuckouthern chugging along as it beat wall street estimates by a penny. Joining us were joined by Norfolk Southern ceo wick mormon. Wick its good to see you again. Thanks for having me on kelly. Great to see you. Its interesting, the drop in Commodity Prices that hurt you guys it sounds like isnt related to oil so much as its related to coal. Is that right . I think thats a fair statement. We continued in the Fourth Quarter to really see some negative pressure on our coal business. Both the export side and the utility side and we did see a decline in the fuel surcharge revenues that we charge because of the decline in oil prices. So why is it that coal has been so weak and do you expect any kind of rebound . Well, we dont see one in the short term. If you look at the International Coal markets, the metallurgical coal and steam Coal International prices are still very depressed, and that makes it you have to for u. S. Coal producers to compete. On the utility side we have a Good Business but coal competes against natural gas, and natural gas right now is trading somewhere a little south of 3 and thats you have to competition. It sure is. And, again, it goes back to the discussion about oil and if we keep produceing and how attractive gasoline becomes as an alternative for drivers here. But for people who are thinking to themselves, wait a minute why is coal so weak . Is this some sort of warning sign about the health of the Global Economy . What do you think . No i think its more just an indication that the Global Economy has not really started to recover and the fact that were seeing still supply come on the market particularly in australia, but some other places as well. So i think its kind of the same thing were seeing with the oil business right now. Weve got a little imbalance between supply and demand and that drives people down. Wick, i could understand if you were caught on the back foot with the drop in oil prices but with coal it sounds like this is an industry trend you should be well aware of. What are you doing in order to absorb this decline in revenue potentially if it sounds like its really not coming back . How do you look to other avenues then to boost your business . Well, thats a great question, and if you look at the rest of our business which is more than twothirds of what we do, the merchandise business the intermodal business both showed really strong growth in the Fourth Quarter and in fact showed strong growth all year. Across our franchise other than coal, we see a lot of reason to be optimistic, and we see a lot of room to continue to grow volumes. We think the pricing environment in 2015 is going to be good. So the coal is a longterm story but its been going on for a while, and even during that time weve managed to grow revenues improve our operating ratio and make Norfolk Southern a stronger company. Wick, we will continue could watch that evolution. Wick more moon ismon is the ceo of Norfolk Southern. Airlines canceled dozens of flights. Should Airline Investors be worried about the cost to the industry. Bob crandall is here next. And tomorrow find out how the storm could impact the lodging industry. Thats tomorrow on the closing bell. 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. 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 ]. Welcome back. Youre looking at a live shot of times square. You can see how much the snow has picked up and the wind too. Winter storm juno grounding planes in all the northeast american airports. American Airlines Announced it is suspending operations in philly, boston and new york city area. Bob crandall joins us. A former chairman and ceo of American Airlines. Box welcome. Its great to be able to hear from you. Theres a little bit of debate whether were being too anxious and too preemptive. Is american doing the right thing here . I think so. Look you can be too preemptive and wait too long. When you wait too long you have a terrible time dig out of a ditch. I think on the whole the industrys presumption is its better to be early rather than late and i think thats right. Have we gotten better because of technology at dealing with these things . Is the recovery going to be faster than it would have been a few years ago getting these flights out in the coming days . Absolutely. Look the industry has always been theyve been an aggressive user of technology. The fact is they get better at forecasting as they go through more of these events. They put more richness in the models and get better at it. Bob crandall its your old pal larry kudlow. Im glad the forecasting sim proved. At least somebodys forecasting in this economy has improved. I just want to ask you, sir, apropos after our last hundred interviews, Lower Oil Prices. Wont this being a great for the Airline Business . Im not an analyst but i would love to scoop up all the Airline Stocks. Larry, for the next short term call it six to 18 months what youve got is you got two things. Lower fuel prices but you got consolidation which means that the airlines now have Pricing Power so you get a combination of Pricing Power and lower fuel prices and youre going to do a whole lot better financially than certainly the airlines did during all the years you and i were talking about all those dreadful results. Is the customer going to enjoy these, low getting discounts now that oil is so low. Oil is half price. Tickets half price. Or 5 cheaper. I wouldnt look at it. The reality is that the airlines have lost lots and lot of money over a period of many years, two, three decades. The fact is they are to some extent refilling the coffers. They are buying lots and lots of new airplanes. Certainly the customer will have the benefit of that. They are making investments in new ground facilities which we desperately need i might say. And the customer will get the benefit of that. I think the customer the customer will see the benefit of a healthier Airline Industry not in lower fares but better planes. Give us an inside look of the operations of an airline at this stage and what matters during a critical moment like this. Passengers have the frustrating time of their lives in airports dealing with an airline. What are the best airline employees able to accomplish during this time thats actually going to benefit the company for the rest of the year . Well during this period of time, we talked earlier about the fact that the models are better. So if the airlines are doing their job right, they are getting the benefit that the information that comes out of those models out to their employees, so that people trying to figure out is the flight going to go, is it not going to go, what should i do et cetera can get reliable information, already at the airport, talk to an agent if not on the phone or over the internet but reliable information is great value to the customer. The airlines ought to Pay Attention to it. Nothing worse than finding Information Online or on twitter. Thank you for calling in this afternoon. Great to talk to you all. Bob crandall. Coming up will apples earnings help rally the stock market back to its historic highs . [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. 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And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. Welcome back. So the big apple set to have earnings tomorrow. Catch the action tomorrow on the close bell. We want to get a preview. Someone suggested when microsoft came in soft they were losing a step to apple on the enterprise side. No. Apple doesnt get significant amounts of revenue in the area microsoft does. Its really about iphone. How close do you get to 70 million iphone units in the holiday corner and more important because we know they had a good holiday what is the forecast for q1. Typically down 16 in holidays from Holiday Quarter to the next quarter. How does the market react to that. Steve, they are always so conservative in their guidance apple is. So i suppose he can expect more of that. What other company, what other Gadget Company do people line up to get the product. Foot locker maybe. Seriously, it has the momentum has the sexiness. Still got it. Apple still got it. Maybe they dont have the advantage of the dollar weaker dollar helping them out. I want to take a chunk out of that apple. I want to go back with all due respect to mr. Gary cohn of Goldman Sachs. Gary just said we have global conferencecy wars the strong dollar is hurting our countrys competitiveness. I want to disagree with all those points. Theres no conferencecy war. Whats happening is individual countries are doing what they have to do to help their economies. That means add more money supply. Its not a war. They are doing to it help themselves. The dollar index on the screen. 95. A big rally in the dollar as a result. The peak of the dollar is 130. Its come back but isnt that bad. One of the great alumni of Goldman Sachs on this question robert rubin who was treasury secretary presided over a strong dollar, i mean a strong dollar period the 90s were fabulous for america when reagan and volkel preside. Higher dollar means everything we buy currencies commodities, oil, everything we buy is cheaper and makes america more competitive. Makes our exports more competitive. A strong dollar right now is a good thing. Larry kudlow thank you for being here this afternoon. Braving the snow. There will be much more from that interview on cnbc. Com. Thanks to my panel. Fast money begins right now. The show must go on. Snow cannot stop fast money. Were live from the Nasdaq Market site overlookings new yorks snowy times square. Apple, yahoo facebook and amazon all coming out later this week. Right now were checking out microsoft. Down 3 despite earnings coming in in line with expectations