Transcripts For CNBC Closing Bell 20150223

Homeland security chief warned mall of america shoppers to be, quote, particularly careful, and yet yesterday it was still hard to find a parking spot at that mall. Why arent American Consumers worried if the government is . Some surprising answers on this one just ahead. Important story there. Another one as well, the president just wrapping up comments about these new rules theyre talking about for 401 k rollovers making sure the Investment Advice you get is good for you and not just for the Financial Planner or broker who is advising you. There are some concerns that people are being steered into investments that have higher fees. Theyre suitable for you, but theyre expensive at the same time, and there are cheaper alternatives. So brokers may be making more on these higher fee investments, and so the president wants to do something about that but the industry is fighting back. So we have both sides of that issue coming up a little later here on the closing bell. Yeah divisive one. Here is we stand in the markets. Take a look at the dow down 55 points today. Pretty much been in negative territory for the entire session. Still above 18,000. The s p still above 2,100. The nasdaq were watching to see if it can turn positive into the close. At the moment its also down about 5 points. If i can ask quickly for oil, we had a turn up briefly at one point today, about an hour hour and a half ago, when the Nigerian Oil Minister said that opec had been talking about the possibility of an emergency meeting to deal with Lower Oil Prices. You see that blip up just before 2 00 eastern time. Weve since given back all of that, but at some point there was some talk of maybe opec getting together. Well talk about that among other things. We have the Closing Bell Exchange today. Erin gibbs from s p capital iq. We have kevin kelley from recon capital. Kenny polcari from oneill securities. Everybody is at the New York Stock Exchange except me. Hank smith from Haverford Trust is with us so is tom essay from the sevens report. Kenny p. Let me start with you and get to this oil story. If opec did meet prices theoretically could go higher what if we did have Higher Oil Prices down the road . What would that do to the equity market . Unless theyre going back to 80 or 90 or 100 it will not really have that much of an impact. The market has priced in oil going back to the 60 to 70 range. I wouldnt get too worked up about oil stabilizing. The fact its starting to stabilize should not be causing anyone to get upset. Kevin, this goes back to i think it was goldman talking about so the most owned parts of the market by hedge funds, apple and energy. I mean these are the two places to watch. These are the two things that are ticking the market along. Absolutely. If you look at technology, its continuing to grow. If you look at the nasdaq 100 over the last three years, sales growth is over 20 . If you look at the s p 500, thats 8. 5 . 20 to the threeyear period zbr. And year seeing that going forward. If you look at the s p 500, its 8. 5 and energy is a big sector. If you start to look at utilities, theyre trading at 19 times earnings when you really want to be at 19 times earnings in technology. You raise a key point. 20 topline growth. Thats a rally built on fundamentals and not just manipulated Earnings Growth but real genuine top line growth. Absolutely. And they actually have the cash on their Balance Sheet to do the cap ex. Apple just did 2 billion in europe today. They can do buybacks they can buy other companies, and they can issue dividends, all of which apple is doing. And the other big story that we have to follow here that influences the markets, janet yellen will be testifying to Congress Tomorrow and on wednesday. Youve got something in the back of your mind that says youre kind of waiting for some hawkish surprise from the fed. What are you waiting for . Well im waiting for the market to start to really compress the gap between where fed fund futures at the end of the year are priced and what the fed is saying. Its a 75 basis point gap. At some point i think the market may have the fed a little too dovish. I dont think yellen will do anything shocking tomorrow but if shes a slight bit hawkish, i think we could see bonds continue to decline. At the same time we just had knew murrah who said they expect yellen to reiterate the fed to keep the patient language in the march meeting. Is that your view . Well, they might tweak the language a little bit but i think one thing will be clear, it is going to be a data dependent fed, and when they begin raising the fed funds rate it will be different than the greenspan led fed where they telegraphed rate increases at each meeting. This is not going to happen this time. In fact, we might just get one rate hike this year and it might be well into next year before the next one. So lower for longer i think is the theme here that is going to dominate the marketplace. Meanwhile, erin gibbs, here we sit at alltime highs. Were waiting for nasdaq 5,000. Could come sometime this week. How do you guys at s p capital iq value this market right now. Obviously when we get back to nasdaq 5,000 inevitably the stories about a tech bubble start to come out again, but are we as expensive now as we were back in 1999 relatively speaking . No, no. Were nothing close to that. We are at a peak. Were trading at almost 18 times forward earnings but still were nowhere near those 29 times like we saw in 1999. There is clearly a risk on market right now, and were seeing that even in just in any of the comments with yellen. So were cautious. Were definitely concerned about how earnings are looking. Right now were looking at 1. 6 growth in earnings for 2015. Pretty slight but obviously a lot of that is because of the energy. Theres clearly a big discount because of that energy story, and its risk on. Its a market return market. Kenny . Bill, i would say if you remember what it was like in 99 99 992000. It was all about the dotcoms. People were almost nuts the way they traded. Investment banks would price them at 20 open to 100, trade up to 300, back to 80 and close at 250 in the same day and created thism mania among investors. You would say what just happened . That was a speeding train that hit the wall in march of 2000. This is a train thats slowly making its way into the station. I would reiterate people need to be careful of the multiple expansions. Whether its consumer discretionary, utilities, and the real value is overseas. Were getting off that accommodative easing. Theyre just starting. The german dax index, theyre at 14 times earnings 3. 1 yield. As were getting cautious in the u. S. , you can start looking overseas to find real value. Theyre at a 14 multiple and our multiple is 15 . Our multiple is 19. Youre talking about the nasdaq, the s p. Both. S p is at 17. 7. Thats higher than i realize. That does show you bill there is some value. And you would think. And hank, i look we keep showing this graphic, the utilities are leading again today and you feel rates are going to stay lower longer than people think. I mean wouldnt you just want to go with those dividendpaying utilities right now . Well i like the theme dividendpaying but we dont like utilities because we believe thats an overvalued sector relative to the Earnings Growth youre getting and relative to historically a below average yield even though utility yields where are you looking for dividends right now . Well you can still find dividends across all s p 500 sectors, not just the utility rich or telecommunication rich but you can find it in consumer staples. You can find it in health care. J j at a 3 dividend yield. Where you have a history of great Dividend Growth so when you look at dividends, it really does favor equities and favors being invested. Tom, by the way, can we talk about Energy Valuation here . There are a lot of people still looking at this space. What do you think about the relative value . Well we dont think oil has bottomed. Wed look at it to a point as a value trap. We see oil starting to roll over a little bit here and we are continuing to pound the table. Its rig count decline does not mean production goes down. And the nigeria comments from today, unless the opec nation from nigeria has been promoted to opec leader of saudi arabia, it doesnt matter. What about natural gas . They told us the price would drop and the production would drop off. It never has. Lets jump back to the rig count. As these rigs come offline, then youre going to start to see the supply of oil decrease and i think were going to see that come in the spring and so therefore, i actually think and a lot of people actually think right here oil is going to find its base and so and i think thats a positive. All right. Very good. Thank you all. Appreciate your thoughts. Thanks, everybody. Busy week coming up. We have 50 minutes to go in this session. Keeping an eye in the nasdaq. Right now red arrows pretty much across the board. Not by a lot. Coming up more Economic Data out today. Home sales fell to their slowest pace in nine months. Diana will have a special report on whats ailing the Housing Market. Thats coming ahead of the spring selling season. And up next a new Terror Threat issued against shopping malls across america, but are consumers and wall street not taking it seriously enough . Well speak with the head of the International Council of Shopping Centers when the closing bell continues. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. Market. Closing bell continues. Minus signs on wall street, some of it might be a come back from the rally we saw on friday which was expiration day, so sometimes you get a little pull back from that but the dow is down 63 points. Thats about the low of the session right now with the s p down 6. Nasdaq in danger of losing its ending its eightday win streak as it marches towards 5,000. Here are the ten sectors inside the s p 500 index. Three of them are positive. That would be the utilities, health care, and consumer staples. Interestingly, energy is 4 lower today. This good everyones attention over the weekends. A Terror Threat against americas malls. Secretary of Homeland Security jeh johnson saying this on meet the press. Im not telling people to not go to the mall. I think that there needs to be an awareness, there needs to be vigilance, and, you know, be careful obviously. Its a new phase. Were in a new phase right now, and that involves Public Participation in our efforts. Well the market not yet responding to that warning. Mall Real Estate Investment trusts, reits, they have been trading higher today. Yesterday a spot check of mall of america showed it was crowded. It was a, quote, typical busy sunday as one store manager put it kelly. Well for more lets bring in michael now. Hes president and ceo of the International Council of Shopping Centers. Michael, good to have you with us. Was this news to you . The part that there was an announcement that the malls were being targeted is something weve been living with for a long time, so that in itself wasnt news. I think some of the response was newsworthy, but this is unfortunately, a situation weve been living with ever since 9 11, and i think what is good and one of the reasons your seeing the stocks performing as they are is the mall sector and the shopping sector in general has been very responsive ever since 9 11 to make sure that the shoppers and the retailers and the properties themselves have gn been well protected and that vigilance continues to this day. Secretary johnson used some interesting language during that meet the press appearance. He said were in a new phase. Maybe the public will have to start participating more actively in all of this. Will malls do the same thing . Weve talked in the past when there have been other threats of some kind about the possibility of increasing visual security whether you have security guards that are armed or whatever it is. Is that a likely possibility down the road do you think . Well i think what is a likely possibility is you will see more of the presence. Its one of the things that our industry has done quite well. Shoppers want to feel secure but they also dont want to feel blocked and on trucedn truced by the situation. Shoppers respond to that when the threat level goes up. Of course, there are lots of things you dont see that are behind the scenes and a lot of technology that in the last 12 15 years has really advanced significantly. The digital cameras throughout the Shopping Centers, in the parking lots tracking virtually everyone to really make sure the properties are secure. So i think michael yes, im sorry. I was going to ask how much of the responsibility do you feel falls on your shoulders to keep shopping malls safe . Do you need more resources . Is it a question of communicating more with your mall operators . Or do you just leave this in the hands of Law Enforcement . Well i think what we can say is that the Shopping Center owners have themselves been very vigilant, and what theyve been doing is collaborating very closely not only with local Law Enforcement, but also with the fbi, department of Homeland Security and other national Law Enforcement agencies. So theres a lot of collaboration, and in many Shopping Centers, for example, you will see local Police Substations in the Shopping Centers. When the alert levels rise often the local Law Enforcement agencies will park the patrol cars in the Shopping Center lots or theyll make patrols through the mall. So theres been a good level of not only cooperation but also communication with the mall owners, with the retailers, and the local Law Enforcement. And this couldnt come at a worst time for brick and Mortar Stores because Online Shopping has been growing by leaps and bounds the last few years. The latest number from target for example, just showed 2. 5 of their sales are now online. Thats billions of dollars right there. And if im a consumer worried about security at a mall, im just going to shop more online isnt that a concern for you guys . Well, its one of the things that weve been talking a lot about, bill, is the fact that the Online Retailing really is operating hand in glove with the brick and mortar. Target has great Online Presence and online sales but they also have great brick and Mortar Stores and its been a symbiosis. The retailers that could do well is those that have a strong brick and mortar presence and a strong Online Presence. Consumers still indicate they want to go shopping in brick and Mortar Stores. They want to go in malls. At Shopping Centers across the country, were now at vacancy rates which are as low as they were before the recession. Sales per square foot are at record high. Actually the Shopping Centers are doing very very well. And the american consumer, theyre pretty resilient. Michael, just last question before we let you go. For americans who are watching is the mall of america safe . I think that the mall of america has all of the protections it could possibly have from the local security force, the number of Security Professionals in that property alone dwarfs some local Police Forces and they have been vigilant since 9 11 to make sure everyone is safe and feels safe in the Shopping Centers. All right. Well leave it there. Michael, thank you for joining us. President and ceo of the International Council of Shopping Centers. All right. Heading toward the close. 40 minutes left in the trading session. Minus signs for the major averages with the dow down 59 points, s p is down 5, nasdaq, we havent seen this lately a minus sign down 9 points right now. And up next speaking of target its taking aim at amazon. Cutting its Free Shipping minimum to just 25 bucks. Is that going to be low enough to make amazon prime members question paying 100 a year for unlimited twoday shipping . Well have the retail pros weighing in on who will win the Free Shipping wars. Also ahead, another day, another record for apple. Our dominic chu rounds up todays winners and losers on this monday on closing bell. Stay tuned. Through good times and bad. Our experienced investment professionals are one reason over 85 of our mutual funds beat their 10year lipper averages. So in a variety of markets we can help you feel confident. Request a prospectus or summary prospectus with Investment Information risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. Help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operations. When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Welcome back. Red arrows for this market today. Take a look across the sectors of the s p 500 for some of the pressure as we see that index down about six points. Its coming from the financials today. Its coming from the industrials, bill. Not a ton of green as you can see there and a lot of the defensive parts of the space are outperforming on a day when these more cyclical pieces are having more of a struggle. Im sitting in front of the wall here. I can see some of the best performers there. Humana and United Health were among and aetna. Health care one of the leading sectors today in the stock market in the s p 500. Dominic chu is tracking some of the other movers on this first trading day of the week. What are you finding, dom . Lets continue with those themes here. First of all, well start with Investment Banking giant Goldman Sachs which is lower in todays trade here. It said in a regulatory filing it was raising the upper end of the legal cost estimate to 3 million bucks. It was 2. 5. Government officials told it in december it could face potential legal action involving the sale of mortgage bonds leading up to the financial crisis. And lets talk about the Big Health Insurance companies on the rise. Some of the best performers in the s p humana United Health group, aetna, and wellcare. The governments proposal calls for a 1 cut to payments for Health Insurers but it could lead to a small revenue gain. Green arrows across the board. Well look at target. Fractionally lower. The company is cutting the minute you have to spend to qualify for Free Shipping. The threshold is now 25 bucks. The Online Shopping price wars continue. Theyre heating up. Amazon walmart, theyre all looking at the Free Shipping threshold. Thank you for now, dom. Is target trying to target amazon . Is 25 low enough to get amazon prime customers to question the 99 annual price tag theyre facing . Listen, i cant imagine this moves the needle at all for people who are buying everything from amazon with that prime account. Right. I think that its not so much taking on amazon prime customers. Its trying to take on the vast majority of amazons customers that are not yet prime. Target is still very very small online. As you had rightfully said its a small single digit percent of their overall sales. Theyre just trying to move the needles on their own dotcom business and this is a good thing for them. 25 is lower than amazons nonprime threshold which is 35. And its lower than walmarts which is 50. Theyre definitely trying to get share of that mass customer. Are we headed towards zero . Is that where its going . And can these guys still make money when they have this kind of a deal . Well everyone offers steerowzero at some point or another. During the Holiday Season its hard to find a retail that doesnt offer zero and zero is one could argue that for a lot of amazon prime orders thats essentially what it is because people just perceive that 100 fee as a sunk cost. But in terms of, you know, kind of are we headed toward completely subsidizing Free Shipping, there is no question that has always been one of the most effective levers in ecommerce. Shipping is only getting more expensive, so i expect, you know, retailers to really fight on that front. Thats exactly what i was going to ask. I feel like shipping has evolved in a way that content on the internet has to some extent as well where in the early days it was assumed you would give it away for free and it would be zero to borrow from the famous the wired story and all of that. Now we pay up for it. We pay significantly for it. I wonder if shipping as well will become more and more of a visible as opposed to an invisible cost. Its interesting, well see if it ever actually you know it almost seems as if from the consumer standpoint weve never experienced really inflation in shipping in ecommerce. The consumer almost always will opt for cheaper, freer shipping and theres so many ecommerce stores. There are tens of thousands if not hundreds of thousands of ecommerce stores. Somebody is always offering you what you want for Free Shipping. And consumers can easily go to google and find another retailer that is willing to offer whatever youre looking for for Free Shipping. So thats typically the behavior that were seeing and kind of what we also find which zappos cause us is you can increase the price of your items and give Free Shipping and still break even. So i think thats really part of kind of how retailers are playing this as well. What . They raise the price before they go to fwreree shipping . Shocking. The group were not talking about are the shippers. What kind of pressure does this put on them . We all know what happened to u. P. S. Last christmas when they were under prepared. This time they overprepared. They have to be prepared for whatever is coming when these guys start going to zero threshold on shipping right . Yeah yeah. Well, the good thing is that q1 is one of the least busy times for ecommerce and the carriers have theyre fine from a capacity standpoint now. The big issues really happen in late november early december. So we dont have to worry about that issue just yet. But over time i mean well see how the carriers are even able to if they respond and if they respond by building more Sortation Centers and they invest more capital in the ecommerce space. Just quickly, your views on these particular names, target here and amazon . Im sorry, walmart . Yeah. So i think that targets definitely doing the right things in terms of trying to grow the ecommerce business. I think that theyre still reeling a bit from the Security Breach in a couple years ago. So those are some of the issues that they absolutely have. I think that what well see with walmart is that theyll likely reduce some of the threshold as well to be competitive with target because i think that walmart. Com and target. Com are probably a little bit more competitive. And then amazon i think that its going to be a while before we see anything significant on the amazon front. I dont think that they view target. Com as a competitor right now. Remember that target actually was on the amazon platform for a number of years until a few years ago. And you have to wonder if people ultimately do move towards their model with the security and the Payment Information already stored and everybody using it. Well leave it there for now. Thank you. You taught me a new word sortation. Its a good one. Sortation centers. I never heard that before. Joining us from forester. Much more to come on the closing bell, have you noticed gas prices shooting higher . Yes, i have. Bill certainly has. Youre not imagining it. But why is it happening if oil is at or below 50 a barrel . First, here is sue her hara with a cnbc Business News update . Here is whats happening at this hour. President obama warned the nations governors their states will receive a direct hit if congress doesnt extend funding for the department of Homeland Security. Senate legislation is being stalled after the house passed a bill linking the funding to a roll back in the president s actions on immigration. In a speech to the aarp the president is proposing tougher restrictions on brokers who manage americas retirement accounts. It would place the brokers to place their clients interests their own. Nigerias finance minister saying his country will call a meeting of opec if crude slips further. In november the cartel chose to hood production at 30 Million Barrels a day. Check out this video. A huge chunk of ice fell from the roof of a fivestory building in portland maine, and crashed right through the windshield of that car. Luckily nobody was hurt but the cars owner says his insurance wont cover the cost of the repairs which doesnt really seem fair. Thats the cnbc news update at this hour. The closing bell returns after a quick break. Welcome back. Crude oil dipping back below the key 50 mark but gasoline prices are rising quickly, so why is that bill . Yeah why is that, kelly . We have Team Coverage on that very question. Jackie deangelis is at her perch at the nymex. We have Morgan Brennan. Jackie, kick things off. Whats going on with gasoline prices . Its really interesting. Were witnessing here sort of a divergence, a decoupling between gasoline prices and crude prices. As you mentioned, we did settle under 50 today, and these two typically trade together. We were down 50 in crude prices over the last year. Gasoline prices at the pump down 1. 11 in the same time. Now, the first reason were seeing a little divergence and a spike at the pump is because its seasonal. This is typically the time the refineryies go into maintenance mode and start to switch over. You know you cant see the spring coming. It is coming and that is when we get that more expensive summer blend online as well. Add to this the fact weve had refinery strikes that are more pervasive and that refinery accident at the exxon facility in california. All of these things taken into account. Weve seen gas prices go up 26 cents in the last month. We never got the National Average under 2 and right now were at 2. 30 according to aaa. So the question of course now is, well, how much higher can we go from here . Even if crude oil goes down traders tell me we could see gasoline prices 2. 75, 285 its 2. 85 by the peak of the summer driving season. We have Morgan Brennan with more. Jackie mentioned the refinery strikes and those have expanded. Weve seen that expand to four more facilities. For historical reference, the last time we saw an Oil Workers Strike of this magnitude was 1980. A number of analysts note that strike had little effect on output and prices. A lot has changed since then. Refining operations have become more efficient and that is thanks to tech. With the exception of one tesoro refinery in california capacity at the 12 refineries experiencing walkouts is at a near prestrike level. Companies have been bringing in nonunion management to oversee it. Scheduled maintenance at the time of the year when refineries come offlines for repairs in servicing, analysts say bringing those operations back online is what take more people people like Steel Workers with expertise. Thats the risk where the strikes are concerned. Something to watch excuse me geez. Which is the largest in the u. S. And thats partially undergoing maintenance right now. So if this strike is still under way when those repairs are complete, we could see output impacted that could cut into supply and continue to push product Prices Higher due specifically to the strikes 1234ed instead of some of the other factor jackie mentioned. Try staying port of arthur three times. Tricky. Squinjoining us now andy lippow the president of lippow oil associates. We get the maintenance issues we get strikes. This time ever year is when we usually get the bottle neck in the refining area of the process and prices go up dont they . Well they do. As jackie has pointed out, we did have a bunch of maintenance going on, but especially in california where prices are up almost 50 cents a gallon over the last month, theyre just being exacerbated by this exxon torrance problem that i think is going to go on for several months and affect the california gas price. I was just going to ask about that andy because weve had a number of incidents lately. Talk us through the impact because most people have just dismissed it entirely but it sounds like you dont take that view at all. I dont. In fact, first of all, i did work the strike in 1980 down in texas city, and prior to that in 1978 we had a similar problem with the cat cracker in texas city, so this exxon torrance thing, it could be down months and months and months affecting california prices. So thats really bad news for the California Consumer and i expect retail price there to go above 3 a gallon in the next week. Jackie earlier today we had the talk from the Nigerian Oil Minister at opec that maybe they were talking about a possible emergency meeting to shore prices up. How serious were traders there taking that conversation . Well its interesting because we saw some volatility for about ten minutes. There was a little euphoria. Prices bounced. The brent price over 60. We saw wti go over 50. When they really absorbed what was being said that this is just a request for an emergency opec meeting, weve seen this before, nigeria is not one of the main opec players. We set up technically for another leg lower potentially tomorrow and there are other headlines and reports out there. Right now that was a kneejerk reaction to this news, probably wont see much more from it. Andy what about the fuel blends that have become so common anymore. Owing to various regulation in different states how much is that increasing the price of gasoline from what might have 20 or 25 years ago been the case . Well when we go from a winter grade gasoline to the summer grade gasoline thats add being 20 cents a gallon. If we look to california which has the most stringent specifications and compare that to the rest of the country, thats an additional 20 cents a gallon, especially in the summertime. Morgan i wont make you say port arthur anymore but i will make you say strike. That does not help and i can imagine that if theyre striking for wages at a time when capacity is as strong as it is right now, that labor issue is not going to go away anytime soon. Not necessarily, and i think one of the things theres a few things that the union is striking for and one of them is actually to take on more, i guess, market share within the refineries taking on some of the jobs that have been taken over by nonunion workers which are a lot of same workers keeping the refineries going. Going back to california, the torrance situation, certainly affecting output. You also have the one refinery in california. One of the most interesting things to me and maybe this is something andy can comment on is the fact when you look at retail gas prices over the course of a year kind of go like this. And so we tend to see them bottom out and sort of hit their lowest levels in november and december. One of the things i have been hearing is we didnt see that bottom out until earlier this year potentially in january and sort of that seasonal move upward has been happening later and also that a lot of refinery that is were scheduled for maintenance are maybe not necessarily coming down for that maintenance right now because theyre on a rolling 24hour contract with the union in light of the strike. Andy . Well i do say we are in the heart of the turnaround season especially the gasoline producing units, but that peak is going to be ending over the next couple weeks. The good news is gasoline inventories are rather high for this time of year. Refiners are operating at historically high levels so i dont really see a supply issue going forward. And that to me is going to temper the retail price of gasoline as we go through the summer. Im expecting the summertime average to be only 2 2. 50 to 2. 60 a gallon. We were so excited to see it go below 2. I paid 1. 89 one day. I got out and took selfies of everybody. I was so excited but it was a onetime thing. Now it turns out its a good thing you documented it. Andy lipow, Jackie Deangelis and Morgan Brennan. 18 minutes left in the trading session. The dow is down 45 points. Weve been keeping an eye on the nasdaq wondering if we could finish with a ninth consecutive positive day. Still possible but were down 3. 75 points right now. Just over 15 minutes to go. Up next the Housing Market not showing much strength. The worrisome details from todays report just ahead. Hey mom, you want to live by the lake, right . Yeah. Theres here. Did you just share a listing with me . Look at this one. Its got a great view of the lake. Its really nice mom. Your dad wouldve loved this place. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow in my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. We learned this morning that home sales hit a speed bump ahead of the allimportant spring sales season. Diana olick, what happened. Sho term blip or what is going on . Theres bigger issues at play than a blip and im talking about inventory. Were not seeing enough new listings coming on the market. Granted, todays report showing an unexpectedly steep 4. 9 drop in sales month to month. Its a big backward looking based on contracts signed in december. Real tors are warning about supply after 16 months of inventory gains. We have two straight mons months of losses. Sales were worst in the west where theres no cold issues. Thats where the supplies are falling. California las vegas, denver all with fewer homes for sale this january. Even moving east in texas and chicago, not much for buyers to choose from. Miami is a little bit of the outlier. We have talked about overbuilding especially in the condo market there. New york is better boston not so much. So why are people not listing their homes . It could be that they just cant afford to move up. Home prices have started to increase in larger gains again up 6. 2 in january from a year ago. And thats across most priced categories. Its not that mix of homes issue anymore. Interest rates are moving up as well. Add it up and people may just want to stay put. The First Time Buyers shares is falling. Not a good sign. Bill . All right diana. Thanks very much. Diana olick in washington. 13 minutes left in the trading session. Still minus signs but look at the nasdaq. Starting to come back. This would be the ninth session in a row if we are positive. Incredible run and getting closer to the 5,000 mark. Well talk about that. Also still to come the Obama Administration pushing new rules aimed at 401 k advisers saying they may have a conflict of interest when suggesting which funds to put your retirement money in. Sharon epperson will tell us what we need to know. And why are ticket prices between Floyd Mayweather and Manny Packquiao more expensive than super bowl tickets . I had no idea they were. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Ten minutes left. Look at this nasdaq turning positive as we head toward the close. Art cashin was signaling we are seeing a slight imbalance to the sell side about 100 million to the sell side into the close but thats not a whole lot. That will probably pare off before the bell rings, down 37 on the dow, the s p down 2 points. Joining me right now anthony chan from chase and our own bob pisani. Bob, it would be nine consecutive up days for the nasdaq as we march towards 5,000. If you look whats moving the nasdaq, its two things this year. A couple things, but first and foremost is biotech. If you look at the ibb, that etf for that or the xbie those are at historic highs that essentially have been straight up. The other major part of this is any of like Cyber Security stocks, fire eyes they have been great so far this year. Thats a major mover. Even some but not all of the social media stocks have been moving. Anthony chan we all know that the big story will be tomorrow when janet yellen goes to capitol hill, her first testimony of the year before congress. At some point shes going to have to start getting us ready for the possibility of them raising Interest Rates. Do you think that starts tomorrow . I think theres a good chance. I think she can basically say that the word patient has outlived its usefulness. I know when she says that, everybody will start estimating when will the Federal Reserve raise rates, the next meeting or two more meetings from now. The way to calm Financial Markets is to say once they start that strategy of normalizing policy that that strategy will be data dependent. It will maintain fed credibility because after all, theyve said theyre going to raise rates this year. Why not start to get the word patient out of the Federal Reserve lexicon. Bill im trying to remember when janet yellen she made some comments about high valuations in certain parts of the stock market last year. I think it was june or july but specifically mentioning small cap biotechs. And i think the biotech index, xbi, theyre probably up 40 since she made those comments. I wonder if she will be asked about that again. It was clear from the minutes of the previous meeting that came out last week that the market the fed is concerned about the market response when they do begin to raise Interest Rates. Should they be concerned about that, anthony . I think that the market is important and i think that one of the things we know is that the Federal Reserve is not only data dependent but is also market dependent. There is no need for the central bank to disrupt Financial Markets. Their goal is to try to maintain their two targets of price targets and inflation and, of course, employment. And they dont want to disrupt Financial Markets, and i think thats the reason why what they want to do is maint that credibility and at the same time give the markets the impression its going to be steady as she goes. If the economy gets better they raise rates and the market should like that. The fed has been agonizingly sensitive about any problems they might have with the market. Look how much theyre worried about changing the word patience or removing the word patience frens the statement. Forget about raising Interest Rates. They cant even decide whether they want to take patience out of the statement. And i think best time to do it. They are deliberate. Thats for sure. Stay right there. Well come back with the closing countdown. See if the nasdaq can finish positive for the ninth consecutive day. Hedge funds used to be called the smart money on wall street but theyve been underperforming for a while now, and thats why one pro joining us thinks its a bad sign that they are hot on stocks again. Hedge funds have never had longer positions in stocks than they do right now. Well have more details coming ahead on closing bell. Right here. 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Legal help is here. You can call me shallow. But, i have a wandering eye. I mean, come on. National gives me the control to choose any car in the aisle i want. I could choose you. Or i could choose her if i like her more. And i do. Oh, the silent treatment. Real mature. So you wanna get out of here . Go national. Go like a pro. About three minutes left in the trading session. The dow is it still down 33 but were watching the nasdaq and we will this week its likely that if the market continues the way it has been that we probably will see nasdaq 5,000 this week. Its just a number i realize, but it takes us back to a historic moment back in march of 2000 when the dotcom boom came to an end and then it became the dotcom bust. Right now were up 1. 90 right at 4957. Bob pisani mentioned biotech has been among the groups leading the way and those two big biotech indices you were mexing mentioning are leaders in the session. We have anthony chan with us, too. We go back to that time anthony. It is a very different time from what it was when we ended the dotcom boom in march of 2000 wasnt it . It was. Price earnings ratios were a lot higher. We had companies that people were buying them because of clicks and things like that. Today companies only get purchased if theyre making money and they have good prospects. Things are a lot more settled down. Even the forward price earnings ratio for the s p 500 which is little above the 15year average is nothing like the spread is nothing like it was back then. And guess what . The economy is showing signs of improvement. Remember, what was it the nasdaq pe ratio, it was 100 or close to 100 in march of twaun2000. But valuations didnt matter. Thats right. Eyeball clicks are what mattered. For the s p 500 we are talking about a number in the 17 range. Much more sedative. The closing high as i recall 5,048. That was march 10th, i think, of 2 2000. Were not that far away. We could beat that in just a day. 5,048 i believe was the closing high. We certainly remember those times. Absolutely. Quickly, anthony, talk of possibly an opec meeting. What if Oil Prices Went higher if they start to cut production. What does that do to the economy here . Well, i think the markets never really came around to the notion that Lower Oil Prices are good for the economy even though i think they are, so if Oil Prices Start to stabilize or creep up a little bit higher i think that that will boost Investor Sentiment and it will be good for the market even though prices are still down even though they have come up a little over 30 from the low levels. Guess what . Theyre still much lower than they were from the peak. You still get the positive impact without the panic situation. For all the concerns about earnings, once the big banks got out of the way and oil, the rest of the market earnings were not that bad for the Fourth Quarter. Thank you both. Thank you, anthony. Bob, will see you later. Ill see you later on nightly business report. Here is the second hour of the closing bell with kelly he was and we have nine days in a row, kelly, for the nasdaq. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans, and as we hit 4 00 on this monday lets look at how were finishing up the session on wall street. Be headlines all about the nasdaq today. It goes out just at the bell there with a gain of 5 points. Good enough i believe for a nine nineday win streak when we havent had Something Like that in quite some time. Puts it just 40 points away from nasdaq 5,000. Well talk about the significance of that when we might cross that milestone, and much more. The s p couldnt quite turn positive on the close, down about just 1 points to 2109. The dow giving up 23 and without further ado lets bring in todays panel, rick adelman, kayla taushy ytausche and larry kudlow on the perfect day to have you. And with us is fast money trader guy adami. Great group here. Welcome, everybody. Rick, what are your thoughts, nasdaq closing positive nineday win streak puts us closer to 5,000. Are the 2000s almost over . Thats the only major index were waiting for to get back to its alltime high. Long time coming and maybe its here to stay. Kayla . Well we did see investors have a little bit of a fear of heights. There was 6. 8 billion in outflows in the etfs that track the nasdaq 100 as we got closer to the 5,000 level throughout december and january but it appears its greece for the most part. We saw that the dow and the s p were in the red, but as weve seen, the broader markets go up the nasdaq has gone with it. In addition the nasdaq has had its own propellers going forward, too. So its sort of getting a benefit from both but i dont think a lot of people this time around are that worried and i dont know whether to be scared about that or whether to think this time is different. Larry, what do you think about it . You know back in the old days when i used to show up on squawk box on every friday with my late pal mark haines i must truly tell you i never thought id see a 5,000 nasdaq again, all right . And we are seeing it. So what does it mean . It means a lot of good things but its a growth signal. Its a very important growth signal. Its also an innovation signal. Its also an iphone signal. Its an Information Age signal. Its a social media signal. American ingenuity is alive and well and one of the things i really like about a lot of these stocks, theyre multinational companies. They dont whine about the dollar. The industrial listen when youre apple you can afford that guy adami. Most of their cash is held overseas anyway. Thats a point. But at least they dont whine. I love that. Guy, my favorite data point from last hour it was the 20 topline growth of the past three years that kevin talked about last hour for the nasdaq. Why . Because its top line. Its not just Earnings Growth. It tells you theres fundamental Revenue Growth and demand propelling this index forward. Absolutely seems to be. Kudos to larry. Weve gone back and forth, but larry has been steadfast on his view of the markets. Hes been bullish, hes been absolutely right. I understand also why the markets go higher. I just think we both think theyre setting here for different reasons. And thats fine. I will say this some of the things that still stick out to me is it feels as though to me as the bond market had its selloff. I think it held a key level last week. You had a nice bounce today. I still think rates had lower. The Oil Volatility index big move to the upside again today. Still elevated. That gives me some reason for pause. With that said the russell that i have talked to you about for months, i said it closed above 122 sets up for another leg higher in the broader market. That sort of augers really well for the s p going forward. By the way, i want to first of all say thanks to my friend guy who is a great guy and a brilliant investor and lord knows, i dont always get it right. Lord knows. I just want to say that and i will say this even though i remain moderately optimistic, were going to have to cross some hurdles here and this may surprise you. I dont think the fed is one of those hurdles. I think the principal hurdle is earnings profits are the mothers milk of stock. Forward earnings estimates have been marked down a lot. Not earnings estimates. Yes, the multiple is going up especially energy. Thats correct. I want to see where that story leads. Actual profits in the Fourth Quarter coming in rather well better than we would have thought. I think there is an issue about forward earnings. Richard, do you share that view . Yes in the short term i agree with larry. Its hard to disagree with larry. What it comes down to, i think if we look a year from now, five years from now, theres no question we will be far higher prices and profits than today. Why . Because it would only take a recession for the opposite to be the case. And theres not one on the horizon other than one of those black swan events one of the unknowns a terrorism attack or lord knows what a horrific event. I think everything is pointing very strong and my confidence level is as strong as its been in the last eight years. You know whats so great about that . I really agree with you. If you look at market indicators, market price indicators, which i live and die with, there is no sign of a recession for several years, and there is frankly, no sign of inflation either. And i dont know in the old days, those used to be two very bullish factors. Guy, why arent you a believer . Larry says our fed is not a hurdle, and, okay ill give him that but i think to me one of the unintended consequences of the actions of our fed, whether you agree with them or not, is that theyve enabled they have empowered other Central Banks to act in kind and i dont think those other Central Banks have the tools or the wherewithal or knowledge to handle or to carry strug the landing. Do you like that reference . It might be too obscure for you. Im lost. 1996 atlanta olympics. I got it. Very good. The atlanta connection. Sorry, finish the thought. I think weve empowered other Central Banks to do like actions which i dont think theyre properly positioned or have the wherewithal to do, and they have to stick it in order for these markets to continue to move along their merry way. Youve had pretty good moves internationally. Look, europe the eurozone, i mean, it aint great. Southern europe is never going to be great, but northern europe, which is where the money and the companies are actually looks a little better. Stocks have done rather well. China looking a little better. China . China feels like the sleeper story thats the key to the entire collapse in the commodity sector in all of these things. Shanghai index is just booming right now. So the other one i want to note my favorite actually is india. India. All right. And i know why you like india. We have modi down there doing the supply side thing. All those british colonialists keynesians have been blocking india for 50 years. Who is going to be the modi for america . If youre of the view and i know greg ip and some others are talking about this, that the supply side in this country needs work who does that work . I think we have a lot of modis out there. We have a scott walker modi. A john kasich modi a rick perry modi. A jeb bush modi. I like the gop bench and i think the other team is moving way too far to the left and we can get into that later. Rick . Well, i think even when we get past the bumps of china and india, were forgetting the next major economy and thats africa. Talk about an emerging economy. Its still way how long has it been emerging . For centuries, for eons but theyre on the cusp because scripping in the 18th century to the 21st. And once we get china and india back where we want them to be heads are going to turn and see whats going on in africa the mobile payment stuff if nothing else i will say out of africa has been transformative. And they were among the first to develop a bitcoinesque technology and pace which a lot of people think is a good sign for the development of africa but there isnt really a Capital Market infrastructure there, so even though theres a lot of resources to be gained from investing in africa, its hard to see how you would get a return there what it would look like and its hard to know by the way, guy adami, how it will get us over nasdaq 5,000. It feels like its all systems go. Over the last six moments, think of all the negative you could probably rattle off a dozen headlines that have been negative. Ten years ago would have been maybe disastrous for the broader market. The market shrugs it off. Right now barring something that i dont see happening, its all systems go but the markets just feel like its the next leg higher. The markets dont give you this long an opportunity to buy the lows or in this instance sell the high. Okay. Whip around here. Kayla mentioned out of africa. It was a fabulous movie. Meryl streep . Meryl streep and Robert Redford and the clothing was beautiful. It was done by ralph lauren. I dont know about the economy. We could talk im the only man in america that hated the movie. Apparently you are. Quick round before we let everybody go. What do we watch for the next move in this market . Larry, ill let you go first. Profits. Kayla . Tomorrow janet yellen. She made a comment in july about biotechs being overvalued. I think now that conversation has restarted. I wouldnt be surprised if she gets asked about it. Dont ignore the Retail Investor with the white house announcement well be talking about later today on the show. Investors are going to be paying a lot of attention to conflicted advice and where are they getting the information they need to make investment decisions. To get involved. Guy . Stabilization in the commodities market, specifically energy. You dont need energy to take the next leg lower. We have our four horsemen. Stick around to see guy at 5 00. Hedge funds placing a record bullish bet on this market. Our next guest says thats a terrible sign for stock. Jim bianco will come here and try to get this story out. And president obama taking aim at conflicts of interest in the world of retirement planning. There are a lot of very fine Financial Advisers out there, but there are also Financial Advisers who receive backdoor payments or hidden fees. The white house endorsing new rules ensuring our 401 k adviser wont steer you into investments theyre financially incentivized into. The industry is fighting back. That important story is coming up. 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 there are a lot of very fine that important story is coming Start Building your confident retirement today. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. There are a lot of very fine that important story is coming welcome back. Some breaking deal news in the financial space. Our dom chu has the details. Kelly, steeple financial is announcing another acquisition again trying to bolster its ranks. They announce fortunatelially they are going to acquire stearn stearning a. This was part of their earns release. They boston stifel has been looking to bolster a lot of business was the acquisitions. You may recall back in 2012 they acquired miller buckfire. Again, this adds to their financial expertise. Again, stifel will buy stearn ag. This was part of the overall earnings report. You may recall this was reported by bloomberg last week on friday. Back over to you. All right dom. Thank you for now. Hedge funds making a bullish bet on this market. How bullish . Jeff cox, maybe a record bullish bet on this market right . Yes, kelly. Thanks. After six years of dismal level of underperformance, hedge funds have decided to kind of hitch their wagon to the stock market. Now, as you say, were at pretty much a record level, 57 net long allocation to stocks. Now, this could be a little situation of the gang that couldnt shoot straight. Hedge funds have still underperformed the market this year. Theyre only up 1 so far. Now, the number gets a little better when you adjust for risk but its still not a very good situation. Now, hedge funds their total assets are over 3 trillion now, so the underperformance is not really bothering investors a whole lot but a more stock focused strategy could help allay any concerns investors have. Hedge funds lately have been allocating heavily towards stocks. Report that i saw from bank of america and Merrill Lynch says theyve upped their exposure to the nasdaq which we know has been on a tear lately. Now, for that story and a whole lot more, check back with cnbc. Com. Back to you, kelly. Much more on that one, jeff. Thank you. According to our next guest, this could be a contrarian indicator marking an end to the bull market. Jim bianco joins us to explain. We have to hear this because how important is positioning generally when weve been talking last segment about a number of factors that otherwise would seem to point positively for this market . Well i think what jeff said early on in his niece was hedge funds have underperformed since the financial crisis as an industry. The group has been terrible in terms of their performance. Theyve done very poorly. They continue to do poorly this year. And now theyre starting to get long. So it is literally the gang that cant shoot straight thats getting long and theres a reason for that. At a 2 and 20 thats the Compensation Scheme of a hedge fund, thats a lot of money. You have to be a very good manager in order to get over that hurdle. Theres probably a few hundred managers that can do that. Theres 9,000 hedge funds. So i think theres just way too many hedge funds out there that are getting that kind of fee and thats whats dragging down the performance of the entire industry. You know i think jim bianco is absolutely right to put up cautionary flags here. Hedge fund records have been rather poor. Except for a few months after the bottom in march of 2009 and they bellyache theyre buying gold, that collapsed. Too much liquidity, there was no inflation, they were wrong about that. Upsetting Financial Market dynamics, they have basically been wrong about that. I dont want to lump them all together. There are some brilliant Hedge Fund Guys but you know what . I think bianco is right. I think this is a warning signal. If youre thinking at all about hedge funds, dont invest in one, start one. Its the only sure way youre going to be able to make any money from the suckers who are going to put their money into your fund. I dont know, kayla. I dont know either. Its only really a surefire way to avoid the Management Fee and collect one instead. No surefire way to make money in the market but, jim, a lot of talk has been made today about this Goldman Sachs note about i think it was 12 of all hedge funds have apple as one of the Top Ten Holdings which we were joking earlier in the day that maybe thats a contrarian indicator because they all got the apple trade wrong in 2012. At what point do we start looking at hedge funds and saying this is what theyre doing, were going to do the exact opposite. The apple trade is a concern. Research affiliates did a study about two years ago and they found that going back to the 1950s, if you had constantly owned the largest cap stock out there, now its apple, you horribly underperformed the market. Usually when the stock gets to number one in capitalization, its got the target on its back everybody is gunning for it whether its regulators, customers, it has a very difficult time of performing well and if you want a good example of that perhaps its apple in 2012 when it first became the largest stock. It fell 40 and its recovered but underperformed the market. Now is not the time to look at getting out of the hole by owning the largest market cap stock. Another thing these Hedge Fund Guys i hate to generalize there are some brilliant guys who have done good. Having said that theyre friends of mine but it was the Hedge Fund Guys that started the panic about Lower Energy Prices being bad, and they were wrong. They are just dead wrong, okay . Period, end of sentence. As i said months ago, this is an unambiguously good thing for the world economy. So they missed on that. I want to ask my friend jim bianco jim s there another issue that might be catching up hedge funds. Might longer term rates which affect stock market valuations as you know might they go a lot higher than the consensus believes . Theyre say around 2 now. Speaking of everybody being on a different side of the trade. Thats right. What you do you think . What do you think about the Interest Rate risk . Well two things about the Interest Rate risk. Youre right that the consensus is looking for rates to go higher. And im actually a bond market bull. I do think theyre going to start to head lower from here. Im with guy adami in thinking theyre going to go much lower, but the consensus is wrats are going rates are going to go higher and earnings outlook is terrible. At this point fact set has earnings negative for 2015 outright and when youre in an environment of negative earnings and higher Interest Rates, thats the textbook definition of a stock market that will struggle. We have that right now. Thats something to keep in the back of mind. We have to go unfortunately, but great to have you with us on a couple of important trades to think about. Jim bianco. Well send it back out to dominic chu with express scripps. We have a profit beat and a revenue beat. Theyve recovered losses and are up marginally on 152,000 shares of trading volume. Express scripts earned 1. 39 per share. Analysts were looking for 1. 38. Revenues came in at 26. 3 billion. Analysts were looking for 25. 7 so beats on both ends. However, there were some concerns about guidance. They do report their Current Quarter earnings per share, they see somewhere between 10. 07 and 1 10. 07 and 1. 11. A bit light. Of course, kelly, the reason we care about express scripts is because its americas largest pharmacy benefits manager and you may really that just a couple months back in december of last year they were the ones who in a high profile way said they were not going to go with gileads hepatitis c treatment opting for at least a less costly version. So an interesting move here. Esrx now getting back what it lost in the afterhour session. Back over to you. A huge decision we discussed with the company here actually. Thank you so much for bringing us up to date. Dominic chu back at headquarters. Is your Financial Adviser putting your retire am at risk . Or brokers steering you into a low performing fee with high fees because of a conflict of interest . The white house says yes. And walmart the latest company to hike salaries. Do we need the government imposing higher wages . David axelrod is weighing in later on the closing bell. Rket is never clear. But at t. Rowe price we can help guide your retirement savings. Our experience is one reason 100 of our Retirement Funds beat their 10year lipper averages. So wherever your longterm goals take you we can help you feel confident. Request a prospectus or summary prospectus with Investment Information, risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. [ male announcer ] whether it takes 200,000 parts 800,000 hours of supercomputing time 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Do we need the government can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back. President obama taking aim at one of the biggest threats to retirement and thats excessive investment fees. Our Sharon Epperson jinoins us with the details on this one. Hi, sharon. President obama wants to change the rules on brokers who deal with retirement accounts by requiring them to put the best interests of their clients above their own bottom line. There are a lot of very fine Financial Advisers out there but there are also Financial Advisers who receive backdoor payments or hidden fees for steering people into bad retirement investments that have high fees and low returns. So what happens is these payments, these inducements, incentivize the broker to make recommendations that generate the best returns for them but not necessarily the best returns for you. Now, many people call themselves Financial Advisers but there are differences. Brokers can put you in investments that are suitable but not necessarily best for your situation. On the other hand, certified Financial Planners those with a cfp designation but uphold a fiduciary duty. They must put your best interests above their own financial interests. And thats what president obama wants brokers to follow as well. While the Financial Planning consortium support the plan some say the new rule may hurt investors by blocking access to Financial Assistance and services brokers already offer. Thats exactly the question now for the panel. Stay right there. We have rick adelman champing at the bit to weigh in. As a register Investment Adviser working with consumers and we have a 401 k program we give to clients as well but the movement here is exactly what consumers need. There is no question theres conflict. Everything in the report is accurate. Wall street hates it because this is a major Revenue Source for the big brokerage firms. There is no question this is conflicted and theres no question investors need to understand the difference between brokers and registered Investment Advisers. Kayla . This has been something that the banks have been in the crosshairs of for quite some time because they do have Financial Advisers many of them do, and they have been fined millions of dollars because they have been pushing investors as federal authorities found they have been pushing investors in their own products which were not necessarily the best performing products but their argument was, well arent we here to stir up put people in products . To put them into our products. Isnt that why theyre invested with our bank than other bank . I agree with you, rick, if there are unnecessary fees they shouldnt be here. Its not a question of one or the other. You can have it both ways. In other words, im proof of that. You can be a successful Financial Adviser while serving the clients best interests. You dont have to be conflicted. You dont have to be a crook. You dont have to take back door payments and revenue sharing. You dont have to do that. I dont get this backdoor payment stuff. I dont know where he gets that. Look, i grew up on wall street. I also had a lot to do with the Financial Planning industry. I dont know about back door payments. Its a matter of judgment. I think the interesting thing is weve already were going to flat feebased plans anyway. I mean the investors are not rubes. They know how to calculate costs versus returns themselves. This is okay. John vogel says its okay but whats not okay last point, i dont know if its going to be part of this regulation or not, but in president obamas budget, this is the second time in a row or the third time in a row, he wants to limit the amount of money you can invest in these tax advantaged investment programs, 401 k s yeah. And that is bad policy. That is tax the rich policy. That is anticapital investment policy. Thats the one that bothers me a lot more than that. Sharon get in here. Let me give you the last word as well listening to some of the concerns that have been raised or havent, frankly. Your point about the extent to which this maybe hurts some of the smaller guys by driving some of the business out of the market, how serious a concern is that . Its not a serious concern i have but its one Many Financial Services firms have raised. The real issue is yes, consumers are educated but they need to be better educated. Talking about a fiduciary versus suitability standard is way over the heads of most folks. Bottom line of course they need to figure out how their adviser is being paid ask them if theres any conflict of interest, ask those basic questions to find out if its the right before for you. You may be getting fine advice or fine investments rather from your broker but the advice that you need for wholistic planning may not be what youre getting there and thats what investors need to understand is the difference between a registered Investment Adviser and a broker. Good point, sharon. Theres much more on the website to help people try to get informed. Sharon epperson this afternoon. Appreciate it. Did walmart throw a Monkey Wrench into the 2016 narrative by boosting its minimum wage. David axelrod joins us next. First, sue herera has this cnbc news update. Here is whats happening this hour. Secretary of state jon kerry departed from geneva after another round of Nuclear Talks with iran. Although some progress was made kerry is expected to return for more gogs next week. The two sides ever hopeer are hoping for an agreement by the end of march. The European Union has opened a probe the fda approved novartis drug for treating multiple myeloma. Novartis stock up just a bit on that news. And check this one out in europe. A 33foot sinkhole opened up suddenly in a street in suburban naples,itily. It was caused by an undergroundwater pipe bursting. Heavy rains in that area. And thats the cnbc news update this hour. The closing bell returns after a quick break. Welcome back. Wages remain a hot topic in this country especially in political circles. Its a top issue for 2016 and late last week walmart created waves by boosting their wages voluntarily. Some say it proves the government should stay out of this issue. Sure markets work and theres particularly today a premium on talent and weve got 5 billion jobs that could be filled if we had people with the skills but theres also on the part of companies a desire to retain their workforce. That was what aetna said and walmart was sort of hinting at the same time. We want to build our own and train them. With us for his reaction to thatened a all things 2016 is former Senior Adviser to president obama David Axelrod. Hes the author of the recent bestseller believer my 40 years in politics and joins us for the first time at the New York Stock Exchange. Good to be here. Good to have you. Lets begin with the minimum wage. Doesnt it prove Companies Ever raising it themselves now. Weve gotten to this point in the cycle we dont need the government to be setting prices for us . I dont know about that. We have a long way to go across the country, and even that only applies to a small amount of walmart workers. So i think look weve been having this debate about the minimum wage. I heard the governors argument weve been having this argument since the 1930s when minimum wage was first implemented. We need to get wages up in this country and its really important for the economy because were a consumerdriven economy, and when people have money to spend, they spend it. Yeah. It does seem though that if we allow the Business Cycle to run its course listen its not easy in the early years. You dont want to tell people that they just have to be patient and that the recovery will take hold but it is taking hold. Youd have to respect that i imagine. I do, but, kelly, its been six years since the minimum wage has been raised nationally. States are raising it. The corporate books are looking healthy, and we need to get those wages up. We cant make that the standard moving forward. I wonder if the high profile announcements, this walmart news was all over the front pages of every paper. Strategically, how do you think it affects the democratic partys odds of taking the white house in 2016 and the relative odds of, say, a Hillary Clinton over and Elizabeth Warren. One thing from a democratic standpoint that democrats should be heartened about, now you hear republican candidates talking about jeb bush talking about wage about income inequality and mashrco rubio writing a book about the middle class and all these candidates are out there now talking about issues that a couple years ago they werent talking about. That suggests that they understand that this is what people are talking around their kitchen tables. We have to return to an economy where people who work hard feel like they can get ahead, can support their families and that their kids have good prospects in the future without taking on tons of debt to get educated and trained. You summed up president obamas campaign in 2008 and yes, we can, which it was interesting to read in the book he thought was corny. Yeah he thought it was corny. Happily Michelle Obama was sitting there when we were filming that ad where that debuted and she said its not corny, and he didnt trust me, but he trusted her. I bring it up because i wonder, that was all about the president himself, almost the cult of personality, but if we take the focus off the person and onto the issues for 2016 what do you think the message, whats the slogan . Is it going to be something more macro like that or personality driven do you think . First of all, let me say part of the reason i like that slogan was it was about we and not him. Yes, we can, and thats one of the reasons i was so committed to it. But i think anything that any slogan or any principle that a campaign is boiled down to in 2016 has to be about this issue of wages and the ability to get ahead. And respecting that fundamental value. Dont you that i thats a message Elizabeth Warren fundamentally delivers more authentically than Hillary Clinton or no . I think she does deliver it authentically. I heard Hillary Clinton make a speech, for example, up in philadelphia during the midterm election. She was campaigning for tom wolf, the now governor of pennsylvania, in which they made a stirring speech about her own middle class upbringing, about why its important to our economy. I think she has the ability to deliver this message very well and Elizabeth Warren is obviously nudging the party in a direction, but in the book you talk about your skepticism that clinton would have won in 2008 and her involvement with the Obama White House at times. But do you think 2016 is the year she can win . I do because i think every election cycle is different, and theyre generally defined by the outgoing incumbent. Barack obama was the best Counter Point to george w. Bush. Bush was all black and white sort of analysis. Obama could see the gray and the nuance better. The pendulum tends to swing. Obama wanted to challenge the establishment in washington. I think in 2016 people are going to be looking for someone who can manage washington and who maybe is a little less nuanced than the president is and in that environment hillary i think is a much more appealing candidate than perhaps she was in 2008. And i know you addressed it already, but obviously there were lots of criticism of Rudy Giulianis comments. He says i stand by my message basically. Are you surprised at this point president obama still hasnt i dont know won over well, i dont know. I would write this more off to mayor giulianis desire to be relevant than anything about the president. I mean i have been around the president now for many many years. I dont know anybody who is more aware of the greatness of america because hes lived the american dream, and he talks about it so powerfully. I dont know wherejoule giuliani has been all of that time. You talk in the book about the president s ability at times to he didnt always deliver, doesnt always deliver his message in the most effective way. Well, what i said was that he treats goff governing in a different way. He can be laborious in his presentation and he doesnt thematically thematically. Speaking of laborious, this is quite a read, david, thank you sop for being here. The book is called believer, and your best guess for who the candidate is for the gop in 2016 . February bush . Jeb bush if . Center right republicans have to to make faustian bargains the last two cycles. If it happens again, theyre going to lose again. Well leave it there. Thank you so much David Axelrod at the New York Stock Exchange. Well send it over to dominick for a quick market flash. What we have is an interesting deal developing in the solar business. First solar and sun power shares are up between 9 and 12 in the afterhours session. Thats because the companies have announced they are in advanced talks or negotiations to form a joint investment vehicle, something called a yieldco. What this is is basically both companies saying they will take some of their assets and put it into a company or a Holding Company structure called a yieldco. It acts very similarly to a Master Limited partnership or some kind of a Holding Company reit type structure. What they want to do is have these negotiations, form this Holding Company with the eventual goal of perhaps ipoing these particular assets. They will both contract assets to this joint company. Now, they do say that there is no assurance that this yieldco will be formed or an ipo will be consumemated but its an Interesting Team up of two of the bigger players in solar energy getting together both putting assets on the table and forming this joint Holding Company structure called a yieldco. These are talks they say are in advanced stages but they may not, kelly, lead to any kind of deal. Still moving both stocks. Back over to you. Investors certainly hopeful. Dom, thank you very much. Saving money just got a whole lot easier. Well introduce you to the creator of a new app that automatically transfers money into a savings account when it knows you dont need it and its already gotten google as a high profile investor. Its being billed as the biggest fight ever. Boxing greats Floyd Mayweather, jr. , and Manny Pacquiao will finally fight in may and you wont believe how much it will cost you just to watch the fight of the century in person. Well break down the numbers coming up. Stay tuned. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts mean your peace of mind. Now you can get the works, a multipoint inspection with a Synthetic Blend Oil change tire rotation, Brake Inspection and more. 29. 95 or less. 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. Those fluctuating Oil Prices Continue to have cnbc readers clicking away. Here is Allen Wastler with the hot list. We had that little spike in oil prices because of the ft report saying opec was considering an emergency meeting and that brought the readers right in. Another hot topic, apple. Hit new market cap territory and we had a nice little feature about reasons wall street is still thinking about apple. Four times as many stock lookups of apple on the site today than the next highest which was facebook. And finally, ken griffins messy divorce continues. Robert frank wrote up a nis piece for us. They have released details about how money is being spent. 6,800 a month on groceries, 7,200 a month on restaurant meals. Its the 2,000 stationary bill that seems to be getting peoples goat. And clearly people are looking for it. Thank you, allen. Good to see you this afternoon. Americans just do not save enough money but a new app plans to change that by automatically transferring money into a saving e accounts. And is the fed sending the markets mixed message about when it will raise Interest Rates. 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It has webbed, duck feet. And he is very scared of everything. My scarecrow has wooden teeth. His fingernails are really long. And his clothes have tubes on them. Somewhere over the rainbow somewhere over the rainbow and thats dorothy. She looks like me. Everyone has a favorite movie. Now people with visual disabilities can find theirs. Comcast is proud to introduce the First Talking guide. From xfinity. Welcome back. Americans are not good savers, but now theres an app for that. Digit will transfer money out of your Checking Account that it thinks you dont need into a savings account. Joining us now is ceo and creator ethan black. Good to have you with us. Where did you get this idea . Thanks so much for having me. Kind of had the idea ive been sort of obsessed with personal finance since i started day trading at 13. Something that struck me two years ago was how bad we are at saving and i felt that software could do it better for us. If we could go back to living our lives and doing the things we enjoy while its figuring out every day how much we should be putting aside. I wonder what rick edelman here thinks of the softwaredriven model. If i understand your website correctly, it strikes me that the software you developed is a ripoff. Youre taking money out of their bank accounts, transferring it to a savings account where you are earning all of the interest not the person who gave you the money, is that right . How much is the average national Interest Rate today. Its not historic. Thats not relevant at all. The people fully realize that they are not generating any interest at all. Youve raised a Million Dollars in consumer savings assets and youre earning all that money, not them. Why shouldnt that interest be in their account. Why shouldnt they be able to direct where that money is saved so they can earn the kinds of returns that are better . I think this account is not in the consumers best interest. If you end up saving 2,000 with digit, lets say over the course of a year you would give up about 20 cents. If you were to put that money in a regular retail savings account. So i think the question then why do they need to transfer their money if its not going to make any difference . The question they should ask themselves, is it worth setting aside 2,000 over the course of a year to pay us 20 cents in that sense. The digit thesis is basically saying consumers arent good enough at identifying where their savings should come from and actually directing it to a different account, even though that money could be that interest could be theirs. They just dont do it. So digit is therefore going to do it. And im wondering how your algorithm actually works. Where are you getting the money from . How are you evaluating a customers cash flow. Where do you get it from . Just to highlight that 60 of people aged 18 to 40 saved no money in 2013. Where are they getting the money to send it to you . Theyre not saving money because theyre just not doing it. But the moneys there. If the moneys already there, why do they have to bother transferring it to you so you can earn interest . I dont get it. You must have a friend thats a smart person that lives their life works super hard and just cant save money. If they cant save money, theres no money for you to transfer to a separate account. Thats ridiculous. Your whole industry is predicated on this as well. Its basically, there are people, as you know, who are not making sound financial decisions. We know that there are people who need to dedicate more of their income than they are. I agree. This is just basically a way to try to do that. I agree with the proposition that people should save much more out of current income. I think youre 100 right on that. And im opposed to any governmental limits on saving by the way. I just want to ask you, though are you going to create a diversified portfolio . In other words, bond accounts stock accounts. How does this work in a practical im looking at the investment side. In a word ethan, because we have to go. Sure. For most people they shouldnt put their safety net in a stock market. It should be held in cash. This is the money theyre going to need if an emergency comes up in their life. Once we get people that safety net, well most certainly help them automate into a diversifyied portfolio and save for the future. We have to leave it there. Im so sorry, were out of time ethan. But this discussion is going to continue. Thanks for having me. Ethan bloch is the creator of digit. Its being billed as the fight of the century. It will cost more than this years super bowl to witness the battle between Floyd Mayweather jr. And Manny Pacquiao. The astounding ticket cost, when we come right back. Stay with us. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. 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. Its being billed as the biggest fight since alifrazier 2. Manny pacquiao versus Floyd Mayweather in early may. If you want to see the fight live, start saving live. Eric has the startling numbers about how much this one is going to cost. So this is definitely going to shatter all the records when it comes to boxing. The previous record for payperview numbers was about 150 million. You can go to cnbc. Com ive got all the stats up there. Theyre looking at 400 million possibly. This could be 300 or more. You could even bet on the number of subscribers. For example, 3. 15 million. Thats the over under for the number of payperview subscribers. Theyre looking at 100 a ticket. 100 a ticket just to watch it on payperview . On payperview. And heres the ticket price. Which apparently is already higher than the super bowl . If you look at the ticket price on the screen 10,500 is the actual ticket price to actually watch it in the stadium, 100 more than the super bowl average ticket price. Its three times more than the biggest boxing matchup. Explain to me i like boxing. I dont know enough about it. Theyre both past their prime. One is 36 one is 38. Will be 38 tomorrow. My birthday, actually. In seven years if im making 120 million in a day but why . I mean, i get it the only two boxers anyone has ever heard of. Id rather watch the boxing match than the New York Knicks ill grant you that. The rangers would be a better show. This kind of money, these guys are old, their past their prime. Theyre going to be standing up wobbling in the 12th round. Better that theyre old. Its better that theyre wobbly. They dont get knockouts anymore. If this was over it could be over in one round. This fight will actually go the whole way because no ones getting knocked out so you can afford to pay them because you know the sponsors are going to get the full value of their dollar. They are actually going to make more money now than if they had done this five years ago. People are saying Floyd Mayweather this boosts his career regardless because he had been seen as not stepping up to the fight in the past. If he loses, theres more money to be made because pacquiao is definitely the underdog here. If pacquiao wins they fight again, they both make another 100 million. Unbelievable. Youre not suggesting thats whats going to happen by coincidence . Saturday may 2nd. That is the date to watch this. Were taking closing bell to las vegas. Got to go. Where are these dollar estimates coming from . All the projections. Youve got all these media experts. And theres plenty more at cnbc. Com. Thank you, eric. Happy early birthday. Thank you, guys. Fast money is coming up in just a few seconds. Melissa lee, whats on tap . Hey there kelly. Live from the Nasdaq Market site this is fast money. Apple closing at 133 a share today. Its market cap now double that of exxon mobil. You sell the name or just hold on for the ride . And Just Announced in the past hour, a joint venture in the solar space. Weve got the details and how to play coming up. Plus dennis has his eye on the cheapest stock market in the world. Well tell you what it is and whether you should buy along, too. Lets start with this, apple move getting a big bump. Plus news the company would be spending nearly 2 billion on data centers in ireland and denmark. The stock closing at a level