Transcripts For CNBC Closing Bell 20150407

Stanleys adam parker. He will tell us what hes expecting from earnings whether they can spark a selloff in stocks, talk about the words earnings recession have been discussed in conjunction with the First Quarter earnings reports due to come out. And where is howard marks putting his money to work . You will find out in an exclusive interview. Plus Bill Richardson former new mexico governor gives us his reaction to rand paul running for president and what he thinks of the senators plans if he became president he would get rid of the Energy Department and three other cabinet positions if he were to become president of the United States. Well get governor richardsons take on that coming up. You can guess what he would say. We have a lot to get to. Lets start with where we stand. 74 points higher on the dow. The s p 500 up by about 5 points to 2,085. The dow is the outperformer on the session. The nasdaq adding 16 to 4,933. Lets get to our closing bell exchange. Amy wu is back with us so is steve kroll. Hes been regaling us with stories about his first days on the floor of the New York Stock Exchange but i wont tell you what year it was. David kudla from Mainstay Capital Management is with us as well. Jason pride from glenmede and Rick Santelli joins us. Amy wu you read the options tea leaves to gauge sentiment. Which way the options traders are leaning. Higher or lower right now. Whats the sentiment these days . Well, tell you from the s ps perspective, sentiment on the downside is still high for the next one month and three months. Were looking at this via equity skew. But i will say that with earnings seasonings coming to the forefront, i think single stock volatility is actually going to be what people focus on and it tends to be a great time to own options these first three weeks into earnings especially single stock options, financials, industrials, and tech which are the biggest, heaviest reporters coming in the coming weeks. I wonder jason, how much investors should just wait until corporates start buying their own stock again. Its amazing how much of the flow any more and trading activity generally seems to come from Big Companies buying back their own shares. Would you wait until their quiet season ends and they can get back into the game here in a couple weeks . You know it sure feels like quiet season is a better time this time around because weve seen a pretty big drop in corporate earnings in the u. S. Again, i think were kind of looking at this like its a rough winter that weve been through. I know winter i actually kind of hate the winter excuse but the reality is that the winter excuse is actually a true phenomenon economically. You add on top of it oil and the rise in the dollar and i kind of feel like the first the last quarter and the First Quarter are pretty much in that perfect storm of bad situations for what is otherwise a longer Term Economic expansion. So longterm buyers should be buying, but earning season is still pretty difficult. That strong dollar well here a lot about that in a lot of earnings reports coming out but you think the dollar trade is getting crowded or it is already crowded, dont you. I think weve heard a lot about the dollar trade getting crowded. I think it will get even more crowded. The consolidation or correction weve had in drarollar strength the last few weeks is inevitable with the dollar up more than 20 over the past nine months but if we look at global monetary policies, we have 25 Central Banks that have eased since the beginning of the year. Massive squeezing in japan and europe. Here we are in the u. S. Headed towards tighter monetary policy. So i think that the Dollar Strength only continues, and investors need to take that into account looking at large caps they own that are multinational conglomerates or exporters and how they want to reallocate their portfolio in view of that. Do you agree with that view that we are headed towards tighter policy. You have said Interest Rates are only going to go lower. They largely have. What do you think happens now with the fed moves and Interest Rates . Well, i think the fed will probably in june or september raise the fed fund rate 25 basis point but the market rate which is lets take the 10year at 1. 9 , i think will go down to 1. 5 . Because i think the economy is slowing and we will have earnings starting tomorrow. If you look at the utility and transportation index theres something out there portraying a shortterm correction here. Rick santelli, oil doesnt usually ft. Dollar lyly if the dollar is going to go lower, the oil is going to go higher. But thats not happening. What do you think is going on . I think how markets link at the hip is going to be a real tough strategy to come up with because were in that void period where the fed isnt what we call on the floor hot. Meaning the data has slowed down a bit and most investors that i deal with are now much less sure of the timing of any fed normalization. So we look at the euro in a range between 105 and 110 on a closing basis. The markets are running around. You get oil up on a day where the dollar is strong. You get stocks up on a day where the dollar is strong. I think all those linkages will be on the tough side but they will all get back in line when the fed gets hot. People get a better idea whether near or farther on the recalibration of Interest Rates and that will dictate whether we see the euro at 115 or at parity and i think both those directions are easily accessible when the fed goes hot again with regard to information. I love it when he talks trading lingo. When the fed goes hot again. Rick what do you make of steves comment just now that he sees Interest Rates even if the fed does hike in june or september, he see that is 10year going down to 1. 5 . Well, i dont know if i agree with the level. Part of me thinks that the 1. 64 low yield close on the last day of january will be a tough one to break through but i agree on principle because i think our new normal is just too normal considering the level of jobs created, productivity stagnant. Dont see that coming back soon. So i think no matter what the fed does the opportunity to have normalized probably has faded to some extent which makes their decision that much more hard to discern. Amy wu, you see more volatility and the bias to the downside for a little while. Is it possible the markets see its a question weve asked for years now. Will we finally see the 10 correction in the s p that has been alluding us for the last few years . Seriously, right . Or does it matter . Id say one thing going back to your comment on the fed tightening. I can right now if you look at options, its really price flg steepness in the sixmonth space. A lot of people are beginning to think maybe the fed doesnt do anything in june or september, maybe not until december in which case the summer might actually be a great time to sell volatility. It might be a great time to collect yield and own something. Thats certainly contrarian. Jason, i assume you like most think the opposite, that we will see more volatility and more swings or if amy is right, could the opposite actually happen here . Well, you know, i think this really comes down to this fed situation. Theres a fairly strong connection between extra volatility in the market and the onset of fed tightening even when the fed is moving in a very gradual manner its still a wider range of observations after the start of that first rate hike that you see in equities and lets also face it. U. S. Equities are marginally overvalued not really overvalued but marginally. Its one of the reasons weve been positioning our portfolios a little bit more internationally as weve been in 2015. The valuations there are a lot more reasonable and provide both better upside and perhaps less downside even though it feels like theyre a lot riskier. The valuations make them a better opportunity set. David kudla, let me dust off an asset class that people dont like to talk about too much but it still does pretty well. Would you buy dividend paying stocks like utilities if you see a crowded trade for the dollar and maybe yields going lower here . I wouldnt be buying dividend paying stocks right now. In fact, id be selling them. Thats because we think that those bond proxy that is have worked eded eded eded so well because we think rates will rise. Whether its july or september or later in the year were moving towards higher rates at least on the short end of the curve. We know theres competition on the long end of the curve is sovereign debt in europe and japan, but i would not be buying those areas now. I would be staying away from value. Id be looking towards growth looking towards mid and small cap and mostly looking overseas for opportunities because its just better values abroad than in the u. S. You can sell your treasuries to steve, i guess. Jason, before we go here its about the deal wave. Yesterday on the program we heard about some firms so busy with pent up deals that theyre worried about the health of their young associates. If we see a big move several trillion perhaps in merger and acquisition activity this year, how would that affect the overall stock market in your view . Longer term im very bullish on the market and i think were going to have a lot of deals because rates are low and earnings are okay even though theyre going to slow slightly. So i think the m a activity will keep a floor under the market. What we were talking about earlier about a possible slowdown in the economy and maybe a slight correction was only because of utilities and the transportation index stalling and today the russell down on the day. Longer term m a, we are still the best market around. All right, folks. Good to see you guys. Thanks, everybody. Appreciate your thoughts on the markets. With 50 minutes to go here looking at a dow up 70 points on the session and thats on top of yesterdays gains. As we head into the first day unofficially of earnings season thats tomorrow, of course, with alcoas report here. The s p up about 3, almost 4 points there. It is the laggard today. Its up less than 0. 2 . The russell 2,000 is the lagrd. Its turned negative now. Well keep an eye on that. Morgan stanleys u. S. Equity strategist speaks with us exclusively. Well get adam parkers take on corporate earnings the stock markets run up since fridays dismal jobs report plus which sectors hes hot on. Is that like being fed hot . May be in for a few surprises from adam parker coming up. Also fed ex delivering gains from its addition of tnt. What if a Small Company became big buiness overnight . Like, really big. Then expanded. Or their new product tanked. Or not. What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile, a Research Tool on thinkorswim. From td ameritrade. Welcome back. Dominic chu joins us tracking the movers on the session for us. Kelly and bill lets start with whats happening with shire. Shares climbing 5 today. The company is agreeing with u. S. Regulators on a path for getting clearance on an adhd drug to treat hyperactivity in adults. So you can see those shares up by 4. 5 . Shares of axalta have rallied and thats after Warren Buffett brought 20 million shares of the company from a private equity firm and paid 360 million. Carlyle is the biggest shareholder, the paint company spun off from dupont last year. That gives buffett a 9 stakes. Then theres athena health. Hedge fund manager David Einhorn reiterated his short position on the stock. He originally announced a short position last year at the investment conference. Those shares you can see down by 5 kelly, bill so far today. Back over to you. Thank you for now. For more on the markets and if the s p 500 could possibly hit 3,000 within the next five years. Did you say that . Lets bring in adam Parker Morgan stanleys managing director joining us at post 9. Welcome back. Thanks for having me. What did you say, 3,000 about a year ago what we were getting a lot of questions about was the market is up five years and is it over . I thought it was astrological. You have to have some reason thats going to cause the market to decline. We collaborated with our Economics Team and it has to be the economy rolls over corporate arrogance grows, put costs in place that arent merited or the credit cycle deteriorates. We kind of think we could be in the middle of a long expansion. Its already been a long expansion. It has. 2020 would that be the longest one on record . It would. Its reasonable to assume it could be long. You have economies arent exactly synchronized. Policymakers moving in different directions. I think mostly from the corporate side i dont see a ton of management arrogance, not a lot of inventory in advance of recovery, not a lot of hiring not a lot of Capital Spending broadly. All the usual things that come that come at the top of the cycle. Sure you can have midsicecle moves or earnings recession, thats the nearterm concern. Do you foresee that event during this Earnings Period and if so it sounds like investors should just shake it off . Well, we wrote a note recently looking at whats happened in the past when you had an earnings recession without an economic one. It looks like from the bottom of consensus numbers theyre embedding year over year growth. We went back over last 40 years, only happened 3 times. It happened in 86, 98 99, and q3 of 12. If you look at the contemporaneous and following quarters, the market was up if you look at 16 quarters all bu 3 but 3 of these. Youre laying it at the feet of what weather . But the strong dollar do you see the dollar continuing higher . Wouldnt that continue to exacerbate this problem for a lot of multinationals especially . A couple interesting things on the strong dollar. One, i think the pace of strengthening will moderate some. Youre 7 stronger per quarter last three quarters. I think our house view would be that would moderate come from here. I think at the stock level you have to be wary of that in terms of achievability, avoid staples chemicals, machinery, select tech. Were not overweight any of those areas. At the market level what usually happens is the price to earnings ratio expands when the earnings contract because a lot of times theyre both emblematic of a relatively better u. S. Economy compared to europe or other places. Its not necessarily bad at the market level. Im wondering about this deal boom we may see. Weve had several already deals, but if we really see a pickup in activity, what does that mean for the stock market overall . Well typically its good. Typically its good for small cap stocks in particular. Not only do you get the premium but the surrounding securities typically go up. I would think that would be good for certain Capital Market securities as well that typically participate when that happens. But to me i think the call to continue to make is to own small caps. We think the market goes up we think small caps go up more. Lets talk sectors. You said what you would avoid. What would you go with . Our biggest is energy. Its temporary contrarian. I feel i get incoming push back on it. I think theres three prongs to the thesis. One is i think people if you look back at what was said on your network last june brent 100 110. You think about what theyre saying now at 55 its generally cautious. So you have cyclical stock was countercyclical sentiment. Secondly, i know i have to be early. You have to buy Energy Stocks two to three months before the earnings revision bottom. You cannot wait for brent to go up analysts raise numbers. We know thats too late. The third thing is the valuation. If you look at oil services if you look at emps on the variable that is historically were good predictors of subsequent return price to book ebitda theyre starting to look compelling. I think its time to get in there. Capital spending reductions are the catalyst. To me i think about what it is. I still think brent could be higher in two or three years and unless that changes, i think i can stay involved in the energy sector. Energy has strong back lately its going okay. This would be a holding for a couple years . Our average portfolio hold is little more than two years. Okay wow. Adam thank you. Good to see you. Be well. Adam parker. Where the dow is up 60 points. Kind of holding the midpoint of the range. The s p is up 2. The nasdaq up 10. Russell though, the small caps that adam just mentioned, a little bit lower, down 3. 5 points. Up next has fed ex trumped United Parcel service with its mega deal . The pros discuss which stock will deliver better returns for your portfolio. Excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. Welcome back. 35 minutes to go here and we are losing altitude. The dow was up about 30 points more when we started the hour than it is right now. Adding under 50 points. The s p is fighting to stay positive. Maybe following the lead of the russell. That did turn negative just before we went on air and the nasdaq at this Point Holding onto a gain of just about seven points. Lets look at our heat map. All 500 components, fed ex is in there somewhere. Lets see, is it green or red, as we get closer and closer and closer. Look at that its one of the top performers. I wish i had done that well in my bracket this march madness. You did incredibly well speaking from somebody who did not over here. Being modest here. Up 3 on fed ex he said moving on. After the company agreed to buy dutch riflevalt nt express. Thats keeping with the theme. The acquirer is rallying. Hi morgan. Thats right. So fed ex is buying dutch rival tnt express in a deal about 4. 8 billion all cash deal that will dramatically expand the u. S. Parcel carriers footprint in europe which is a nshthmarket in which it currently has little share. It absorbs an existing network and one largely consisting of ground operations which make up about 70 of tnts business. Its a synergy of combining networks for more productive operations particularly the pickup and delivery operations and broadening the portfolio for increased volume share. Fed exs ceo also telling cnbc that this is a play on ecommerce also that the stronger dollar, cheaper oil, and quantitative easing in europe were all factors that contributed to the attractiveness of doing this deal now. As for the street analysts tell me that this is a good move for fed ex one thats going to put it in competition with europes two biggest shipping players, dhl and u. P. S. Thats one of the reasons you are seeing shares of fed ex rally today on this news. Back over to you. All right. Morgan, thank you so much. Is this deal a reason then to bet on fed ex or is rival u. P. S. The better buy . Lets do a stock brawl. James ramelli says its u. P. S. While al hatfield says he thinks thet nt deal could bring fed ex to new highs. Art, why do you think that . It makes them a more viable competitor in europe. We could see growth accelerating in europe as they expand their network over there. Currently theyre a distant fourth in the marketplace. Combining these two entities in europe will make them a very strong number three in the marketplace which we think will drive some growth and it is a very synergistic growth for fed ex and we think there will be tremendous accretion as the deal closes and they integrate the two entities overseas. James, why would you bet on u. P. S. . Actually i like everything about the fed ex deal and i think it will send the stock to new highs. However i think u. P. S. Represents a much better value. The stock is down about 12. 5 so far this year. However, the reason its been under pressure is because of two big missteps theyve had during Holiday Shipping season over the past two years. They didnt have the capacity to handle it in 2013 and then overcompensated with seasonal labor in 2014 causing a huge cost overrun. That kept earnings for that quarter year over year at a flat level. However, revenue still grew by 6 yearoveryear. They are growing their revenue base here and we saw revenue grow across all three divisions. The stock has sold off a lot but what that means for me is its presenting a much better yield around 3 . Sitting on support and i really think that a renewed effort by u. P. S. To Push Services in more profitable areas of their business outside of package shipping is going to provide a driver of Revenue Growth for the stock and another leg higher in a stock thats been beaten up a lot in a market that is near alltime high approximates. What about that art . Would you go for the value player being u. P. S. . The issue with u. P. S. Was mentioned they had a couple hiccups in q4. Their ecommerce business is growing faster. Its a higher cost business with a lower revenue per unit. We have a pricing problem theyre working on but it will take some time. I think in the interim the stock will languish in the high 90s until they get the pricing problem at their b to c business rectified. What would you say to that james . I think that is a definite issue for u. P. S. Here. However, what we are seeing isis expanding their capacity just in general so they dont have to re lie so much on seasonal labor or around the holidays when they have these higher volumes they have to deal with. I think theyre doing a pretty good job so far. Also that 3 dividend yield is very attractive here and the stock is just going to languish in the high 90s im okay with collecting that dividend. Average analyst price target is around 107 which still represents a decent amount of upside from current level approximates. Always good to see james ramelli, art hatfield. Thank you both. Time for a cnbc news update with courtney reagan. Hi there, bill. Here is whats happening at this hour. Chicago voters headed to the polls to vote in the stis first mayoral runoff election. Mayor rahm emanuel and challenger jesus garcia were out this morning. Mcdonalds is planning to put bigger burgers on the mennow. Its introducing a trio of third pound burgers for a limited time this as the struggling fast food giant tries to improve perception about the quality of its food. Seven people were killed following the crash of a small plane near bloomington, illinois. They were returning home from attending the ncaa Basketball Championship game when their twin engine cessna went down just a mile from its destination. Illinois State University confirming two members of its Athletic Department were on the plane. The new maya angelou stamp went on sale today. To mark the occasion a dedication ceremony was held in washington. Oprah winfrey and First Lady Michelle Obama were at the dedication. Angelou died last may at her home in north carolina. Thats the cnbc news update for this hour. For now, kelly, back to you. Courtney thank you very much. 30 minutes to go into the close here. And the dow holding here with a gain of about 50 points but were watching the s p to see if it can stay positive. Its only up about a point right now. The russell, the small caps are negative. Even the nasdaq is only up seven. Art cashin is around here somewhere. We will probably be hearing from him shortly to find out which which the market looks to close. When we come back Bill Richardson gives us his take on kentucky senator rand pauls plans now that hes running for president to eliminate the Energy Department. Of course, richardson used to run that. We now how hes going to feel about that. Lets get him to talk about it when we come back. Generally positive. Weve got 12525 minutes left in the trading session but were kind of meandering right now. Dow is up 50 points the s p up 1. 5. The nasdaq up 8. One thing weve been highlighting is the russell 2000 has turned negative. It was higher earlier in the session but it is moving lower rather ernestarnestly. Senator rand paul of kentucky formally announcing hes seeking the gop nomination for the white house just a few hours ago. John harwood covering all the action from louisville kentucky. Hi john. Hi kelly. Rand paul became the second major republican candidate to enter the race here in a ballroom in louisville. We heard some familiar eye con class am from rand paul. He said he would avoid needless foreign interventions. He said it was none of the governments damn business what a private persons phone records were. He also said he would take on special interests. Weve got to take our country back from the special interests that use washington as their person piggy bank. The special interests that are more concerned with their personal welfare than the general welfare. The washington machine that gobbles up our freedoms and invades every nook and cranny of our lives must be stopped. And if you want to know what special interests hes talking about, the country song that warmed up the crowd before he came on especially prepared for this video, the lyric read theyre living it up on wall street and in that new york city town and in the real world theyre shutting detroit down. That gives you a taste of what rand paul is coming from on economics and the question is as you goes around the campaign trail, can he expand on that libertarian base that his father, ron paul carved out the last couple of elections. Guys . That is the question john. John thanks. By the way, john is too modest to mention hes wearing duke blue on his tie there celebrating the win by his blue devils last night. Thank you, bill. Youre welcome. Happy to mention that. One of the items on rand pauls agenda is to trim the federal budget by eliminating the departments of education commerce housing, and energy all of which would impact american businesses. To offer his thoughts on what impact that could have on business and the economy in an exclusive interview we welcome back Bill Richardson former candidate for president himself as well as a former governor of new mexico former secretary of energy. We could go on but we have to get to the interview here bill. Good to see you. Welcome back. Thank you. Nice to be with you guys. Obviously, we know which side of the aisle youre on and what you used to do for a living running energy. So you would disagree with rand paul, but what hes saying has been said before even Ronald Reagan wanted to limiteliminate some of the cabinet positions when he was president. What do you think about the platform rand paul is putting out there initially right now . Well hes an interesting candidate because hes trying to appeal to the left and young people, noninterventionism privacy, and then obviously to the right, to the right wing saying were going to eliminate cabinet departments. Were going to cut government down. But, you know, eliminating the Energy Department, which i used to head is not a smart move because the Energy Department handles Nuclear Weapons. I mean look at this initiative with iran. The secretary of energy was involved in eliminating and negotiating the Nuclear Weapons with iran. Our national labs, our weapons defense labs where they develop Nuclear Weapons, los alamos, many others. At the same time nuclear waste. You know when Nuclear Weapons plants, you have to deal with the waste. You dont want to put it in residential neighbors. Thats the Energy Department and then lastly right now the Energy Department deals with shale, gas. It deals with Renewable Energy solar and wind. So i dont think its a very smart move for him to be calling for this especially since hes already accused of being antidefense antiinterventionist because they do a lot of the weapons work that we do with russia controlling their Nuclear Weapons, et cetera. Listen governor you also from that perch probably had a firsthand look at how much waste there is in some of the departments. So if we were to preserve some of the key functions of energy for example, fold it into a Different Department and preserve that would there be a way to really eliminate some of of the waste you saw firsthand across that department . Well, theres always been a discussion of merging some of the functions of the Energy Department, especially the Nuclear Weapons work the arms control work with the department of defense. You know thats been talked about. I dont think it makes sense, but, look theres no question that appealing to a republican audience, to a lot of voters they think the government is spending too much. Theres too much wasteful spending. I suspect in every department in energy and education, housing, that he talked about there are elements that you can eliminate. The inspector generals are probably the best ones that can say that. But not because im partial because i ran the Energy Department, but they do a lot of National Defense work. Our Nuclear Weapons development, what i said with russia the deal with iran waste. Im talking about nuclear waste. High level and low level. Somebody has got to handle that and if you have no Energy Department, no government to handle that you know the private sector cant do that. But lets broaden it out though. At the heart of the argument there and as i mentioned even Ronald Reagan was talking about this is a way to reduce the size of government simply to reduce the amount of spending that the federal government does to reduce the deficit we have right now. If you dont look at the cabinet positions, are you going to look at entitlement programs . You have obamacare now which is trying to rein in spending for health care but it will still be an expensive proposition, so where do you cut spending on the government level . Well i think you have got to go across the board. Look, when i was running for president , and i didnt do too well, i was running in iowa and i said we need a constitutional amendment to balance the bucket. That didnt go over too well but i think you have to start with, you know, some of these groups, fix the debt. You have to look at entitlements programs, you have to talk about the growth. Yes, you got to talk about waste and cabinet departments. You have to find ways to find not just waste in government but slow the growth of government. So his message, he has to make that message. I think democrats will make that message, too. But when you go into the nittygritty and look at cabinet departments like i mentioned energy, like 60 of the time when i was Energy Secretary was managing the National Weapons labs that do a lot of very Important National security work. Its not just quote, energy electricity, solar. So i dont know if rand knows exactly what the department of energy does. Well, those responsibilities include Nuclear Weapons, Nuclear Reactor production for the navy radioactivity waste, even human genome project. Just to touch on one thats been back and forth, keystone pipeline. There seems to be this rallying cry for a safer way than our trains to be moving crude oil. Would you support keystone at this point . Well i think what you have to look at theres no question we need more efficient transportation links to get oil moving transmission. You know i think that the Administration Needs to look at the environmental issue, the state department is doing that. You know my view is that were doing so well with shale, oil and Gas Production are up the u. S. Is the number one producer of oil and gas through shale. Were doing well with solar, wind biofuels. You know i think the economic argument for keystone for the jobs it creates which are not that much, you know, is diminished, but i think you want to do the right decision based on jobs and the environment and i think the president is waiting for his final reports, and theres nothing wrong with having all the science say yes or no whether we need to do this pipeline. Were going to press you on it. Would you vote up or down . Right now i would vote down because would you vote up or down on the iran deal based on the details you have heard thus far . Im still undecided. Im worried that we didnt get more from iran. In other words, they should release the american marine. Theyre messing around too much in syria, in the region. I want them to say that theyre not going to attack israel. I think we could have got more but i think per se the reduction of the nuclear materials, Nuclear Weapons in iran that the secretary of energy actually had a big part in negotiating, i think that is good. Should congress have a say in this . I would have wanted more done. Should congress have a say in this . I think congress will end up having a say, yeah. I mean i used to be a congressman. I think eventually congress should find a way to give input. You know they represent the american people. The congress should have a say. All right. Governor, mr. Secretary, mr. Ambassador, good to see you. Thank you so much. Thank you. Bill richardson joining us today. 17 minutes left here. The dow losing altitude. Were heading to the close wondering, yeah, i was going to say s p and the nasdaq have turned negative. Russell 2,000 leading the way. Absolutely. And weve only got a couple minutes here to make up the difference with the s p off 2, the nasdaq off 1 as you said. Still to come howard marks warning clients about a potential liquidity crisis. He will be here to tell us why hes worried and if main Street Investments should be worried, too. While were traveling down main street your local doctor may be in trouble. A new medical billing system could kill the practices of scores of individual physicians across the country. And were going to have details on this. This is a serious problem. Its coming up in october. Well tell you about it in october. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Jacks heart attack didnt come with a warning. Today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before your begin an aspirin regimen. Welcome back and get this a new medical and coding system will kick in october 1 and here is the rub. Its much more complex than the current one, and that leaves solo practitioners across the country ill equipped and even at risk of going out of business. Bertha coombs joins us with that important story. For doctors and hospitals, its a massive change. The new medical coding system that will capture eight times more health data than we do now. Dr. Andrew clineman thinks thats great, but he worries the rollout next fall will also mean eight times more errors and delays in getting paid. A consultant advised him to get a credit line for three months period of time of expenses. Theres an increasing pressure on physicians to leave small practices and to join either large groups or to go into hospital employment situations. This is one of those things that i think is going to help accelerate the end of private practice as we used to know it. Hospitals are worried about the upgrade, too. Truman Medical Center in kansas city processes hundreds of claims a day. So far their systems have worked well in testing with their Health Care Provider i. T. Provider. Connecting with the medicare system, thats worked well. Both the government and insurers have lots of testing planned before the system goes live next october. I have got much more on this on cnbc. Com. Thank you very much bertha. Such an important story. Yeah. Ten minutes left. Art cashin just walked by. 200 million to buy is the bias to the close, but we still are losing some ground here. The dow is up just 15 points. And weve got stocks slipping in the final minutes of the trading day. Can they regain their footing . We know anything can happen here. Dont go away, closing countdown when we come back. The tools and help on experian. Com. So how are we going to sweeten this deal . Floor mats. Clear coats. Youre getting warmer. Leather seats. And this. My wife bought me that. Get your credit swagger on. Become a member of experian credit tracker and find out your fico score powered by experian. Fico scores are used in 90 of credit decisions. I love my mileageplus® explorer card. Were saving our united miles. For a trip to hawaii. We love free checked bags. Ive saved 75 in checked bag fees. No foreign transaction fees means real savings. We can go to any country and spend money the way we would in the u. S. One of the best things about priority boarding is you can just get on the plane and relax. I put everything on the explorer card. I really want my united miles. About eight minutes left here. The market has all the major averages are now negative. Dow down 4. S p down about 4. Nasdaq down about 4. Russell 2,000 which led the selloff is down about 5 points at this hour. Joining us now, ann maletti and nathan bachrach. Congratulation grat yesterday we had a little bad news come out friday. The market started down and rallied quickly back up. And its interesting that bad news really creates good news these days. Sometimes good news doesnt create great feelings. So its an interesting time. Should i correct myself now . You can do it now. Wisconsin lost. Wisconsin did lose but were so proud of them. Im just going to pipe down. It was a great run. Disappointing last night. Nathan bill earnings are going to come out. Whats your expectation . Is that whats going to be driving this market now . Let me say from wall streets perspective, i have no expectation for earnings. Its like a limbo bar they put on the floor and said jump over it. This is not going to be difficult to do. If you take out oil, earnings will probably come in at 4 growth. We would like to see 6 or 7 . That would let us know were really still on track and everything is working okay and we should worry about the fed. Earnings probably going to come in around 4 and this is like with the cnbc poll well look around like i have been saying for three months now, were going to look around and go oh the consumer has money. Well, if they would only start spending it, that would solve all of wall streets problems. Unfortunately, the consumer is going i go to costco things are cheaper. I got money building up in my checking account. My earnings really havent grown since 1979 in terms of purchasing power. Give me a reason. If the consumer can be encouraged in any way to get moving, then i think you will see a better than expected quarter. Otherwise, i think youre going to see a rather flat quarter where were going to beat some earnings but in the end well go really . And we did just have adam parker tell us he thinks despite the setback that the rally, the expansion will continue until 2020. Do you share that view that this could all keep going . I do. The economy the underlying economy does feel weve been in this muddle along stage for a while. It looked like growth was picking up and then you have some hiccups in q1 and its hard to tell whether its weather related, if its a pause, if its currency. So well be looking through q1 looking at the data looking for opportunities in the market. I still think there are plenty when you look from a bottoms up perspective. I think theres still some really good opportunity. Okay. Were running a little late. Good to see you both. Thank you for joining us. Thank you very much. Condolences is what were offering to ann there. Sorry. I also put my contact lens in the wrong eye this morning. Its all right. If washington is not involved she doesnt care. Were coming back with the closing countdown in a moment. After the bell with the april 15th tax deadline looming large, we have investment types about individual retirement accounts before you hit that file button. Youre watching cnbc, first in business worldwide. I am never getting married. Were never having kids. Mmmmmm. We are never moving to the suburbs. We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. A couple minutes left before the close. Show you what the dow did before. Generally positive the whole day. A little hiccup on the open but then we started to lose it as we headed toward the close and we are just barely positive. What led the market today those secondaries, the small caps the russell 2,000 started to turn negative well before the rest of the averages did just before 2 00 eastern time. So the last couple of hours the russell spent in negative territory and is down 6 points. Well keep an eye on that trend. Oil continued higher. The price of wti crude up another 3 today getting comfortably above 50 a barrel. Now at 53, and brent, bob pisani, is heading towards 60 pds. You were pointing out trading at the New York Stock Exchange, very low volume. If youre wondering what happened today, there was no specific news events that any of the traders are talking about. This is a classic lack much buying interest. Normally on the floor we do 700 million shares in a day. Weve done 500 million today. The spyder spy, biggest etfthe world world, 65 million when you normally do 110 million. This is what we call buyers strike. Not a lot of interest right now. I would note the Dollar Strength may be a little bit of an issue. I suspect interest will pick up when earnings start to come in. Lets hope so. Thank you, bob. Still going out with modest declines for all the major averages here. The dow down about 3 points. Stay tuned. Much more to come your way on the second hour of the closing bell with kelly evans. Im see you tomorrow, kel. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans, and lets talk about this rally that just faded here on wall street. The Dow Jones Industrial average at a high of 102 points today going out with a decline of 8. The s p 500 as you can see there closing down almost 5 points 2076. The nasdaq giving up 7 and the russell, that was the big tell, looks like its closing down 7 points. Lets talk about it with todays panel. Joining me is eric chemi, and dan greenhouse. Brian reynolds and fast money trader guy adami. Welcome one and all. Dan, first word to you. What happened . I was in transit during the whole selloff so i cant say exactly what happened. Is that why . That might have been why. Thats correct. But i think the larger story here is worth reiterating, todays action aside. We havent gone anywhere in call it four months at this point. Churning around as we wait for earnings. As everyone has discussed ad infinitum, theres an enormous amount of uncertainty about what companies will say about the european economy, the domestic economy, the u. S. Dollar. You dont like this market dan . No, its not that i dont like it. Our view has moderated. Weve taken a more cautious tone since we dont have a handle on how things look right now. Were not afraid to say that. And so our view has really been for the last several weeks, if not months i really need to wait and see and have companies tell me specifically what affect the dollar is having specifically whats happening in the United States before you can color in the larger story. The bias is still to the upside as it always will be until its not. But Companies Really need to fill in the story because of that uncertainty i talked about before. I think Retail Investors are feeling the same way. If Money Managers are telling them theyre cautious and defensive, theyre feeling they should be that way as well. If theyre in it for the short term, thats probably the right stance to take. I think a lot of folks need to look at the bigger picture. Wile we if you are a longterm investor, youre looking out the next couple years so you still need to be in the diversified area that is youve already planned on for your d whatever your goals are, but i think that cautious defensive mode is really what a lot of folks are in until they see what the earnings will law school. Dan said he needs to hear from companies. I wonder if we need to see Companies Getting back in the game buying back their shares . In the second half of earnings season i think buybacks are going to accelerate heavily because were about to hit half a trillion in new Corporate Bond sales for the year. Thats the fastest weve ever done it. Thats the fuel for buybacks and mergers and that money hasnt even hit the stock market yet. So once we break up out of this range, thats whats coming. Brian, its dan. If i could toss this back to you and get guy in here as well do you really think that the stock market is not going up right now because of a corporate blackout period with respect to buybacks . Well weve seen buybacks go up. Weve seen mergers go up but stocks have done nothing for four months. That tells you that investors have been selling heavily and we we have seen Short Interest rise. That tells you people dont like stocks. Guy, do you agree with that . Not necessarily. Well, look, i think its a quiet time because a lot of people are away. The last couple weeks, a lot of kids on holidays which means a lot of parents are with those kids. Bob was talking about the volume, not that im a big believer, but you have seen volume wane over the last couple weeks so thats part of it. The buybacks yeah buybacks are great but that doesnt mean it works for everybody. Look at qualcomm on the day they announced that 15 billion repurchase. I think it was march 14th, correct me if im wrong, the 13th. That stock closed at 72, went to 75 and its been going lower ever since. Ibm, the poster child for buybacks has been grim death for the last two years. Although it seemingly lifts the broader market, it doesnt mean it helps individual stocks. Companies announce buybacks and many times investors sell them, and so the overall market close up over time but you get these nasty corrections from time to time because people dont like stocks. Why do you think people dont like stocks . Is there evidence for that . A generational thing a fundamental shift, a behavioral thing . Theres a generational shift. Weve talked about this before. Younger people own different sets of stocks than older people. Ibm is an older generation than the 18 to 34. When you talk about what you both said earlier, even if we had been up 50 points today, nothing that you said would be different. So when you talk about we lost a rally, but we didnt lose a meaningful rally because not a word would have changed if we were at the prices we were at 3 00 instead of 4 00. So thats why i think the market is just sitting here waiting. If you look at the chart of the s p 500, the lows keep going higher and the highs keep getting lower. So were just sort of hitting this point where youre going to have to pick a direction. I think the market has been procrastinating. Its a funny way to put it and, dan maybe to your point it is about corporate earnings. What is it youre going to hear that is going to change your view one way or another . I am a big believer, theres a lot of people that would tell you the stock market is where it is because the fed is buying bonds and quimentd. Liquidity. At the end of the day, to quote larry kudlow earnings are the mothers milk of stocks. With respect to what companies are going to say that we dont already know we have to remember after q4 earnings season which came late january and february companies gave us guidance for the full year and for the next couple of quarters based on where the dollar was. The u. S. Dollar on a trade weighted basis then spent the First Quarter rising by 8. 8 additionally. Huge move. Three quarter move we have experienced is the large estst dating back to the creation whats your point . We heard adam parker say earnings recession doesnt necessarily mean the economy is in recession. Its happened three or four times. He think the rally continues. Adam park ser probably going to be right. We think thinks like midcycle and what kills bull markets is not any of the nonsense were talking about. Its recessions its the Federal Reserve, its inflationary outbursts. If were talking more short term it could be the difference between you buying in the market with the s p at 1900 or the s p at 2100. Guy, is the next move down . If people are waiting to get involved should they keep waiting until we get through earnings season . Thats been the mantra for a long time wait wait wait. What frustrates so many people is how many people have been waiting for the last five years and you have not seen the meaningful selloff. When you do see selloffs, i cant wait for a selloff cant wait for it theyve happened a few times and then they terrify everybody. But thats been happening since the dawn of time. So what do i think is going to happen . I have said it to you for while. As long as the russell, the iwm stays above 121, i think the bull market is intact. The iyt, the transports would have been down today but for the move in federal express. That had a big move to the upside. The transports have not been trading well since late fall, decemberish. The other thing you walked about 130 when the market turned around. That coincided with a significant move in the bond market. I dont know what it all means. Guy, you and brian both agree on this point, lower yields lower than what we have seen and steve reiterated this last hour. He said 1. 5 is next. Brian reynolds do you think its possible the yields here go negative in the u. S. . I think thats very likely. Were going to have money market reform legislation hitting in the next 18 months. Thats going to drive money into government Money Market Funds and the deficit is shrinking. So i think youll have negative Treasury Bill yields next year. And you mentioned money funds. We had some news recently i think blackrock looking to move out of the business to some extent. Is that because of some of these changes where youre seeing okay, if you want to have a fixed rate fund or if you want then it all has to be in government securities for example. So everybody starts buying these government securities and demand continues to push yields lower and lower in a vicious cycle. Thats why when we get to negative Interest Rates next year, you will force other people out the risk curve and you will have a bigger credit boom and thats going to lead to more buybacks and more mergers. We saw fed ex go up because of a merger. When stocks go up because of mergers, that means investors are leaving money on the table and that means theres going to be more deals designed to jack up stock prices. Somebody mentioned the transports would have been down if not for fed ex. That means every company in that index is thinking about doing more mergers. Guy . Listen i mean again, price is truth and the market has been bulletproof for quite some time. Dan was just speaking to that. Does it mean and you heard a couple weeks ago, last week somebody said on the morning show the chasm between the real economy and the stock market has never been wider. I agree, and the chasm between eps and revenues has probably never been wider. Eps is great except that if you start to dig into it the reason why esmthps is great, all the productivity gains, the stock buybacks. Theres a scarcity thing. Doesnt mean they should be but they are. It will continue if we see more of this activity. Eric i want to go back to your point about procrastination. What do you think investors are waiting on . We know everything about earnings. We know about the fed. We still have fax seetax season. Theres people waiting for a refund. There are a lot of reasons right now especially as we get into the summer. Should they put the refund to work in this market . Sure. If they have the time to wait for it to see the gains, they certainly should. If they have pay down debt and done other thing, this is a great time to put money in the market only because you have a long time to see what will happen. We may be in this kind of wait and see period for another several months but if you dont need it for five ten, 10 years then why not put it in the market. Guy, let me ask you a question. Its a longer question than we have time for but do you think the media bears some responsibility for keeping people out of the market . Are you including yourself . Not including myself. What i mean by that is in an effort to not be the cheerleaders seen in 07 and 2000 newspapers and Financial Television have paraded out a stream of stories about the chasms and the differences between earnings and revenues. Do you think the media bears some blame here for why people are not in the hashth . And guy, would you include yourself . Im on tv right now with you so you have to include myself. Of course we bear the brunt of some of that. But you know what . Everybody wants to do five pushups and looks like charles atlas. They want to eat one salad and lose 40 pounds. It aint happening. We do these shows to help educate but the folks at home have to do their homework. Do we bear the brunt of some of it . Absolutely. But look at the verbiage. It was a great day. The market went up. We shouldnt use those adjectives. Well continue it. Im coming back tomorrow. Come on. Were offline, online well do something. Its an important point, dan. Guy, thank you very much. Good to see you. Guy adami and brian reynolds, thank you as well. Stick around and catch guy with the fast money crew coming up at 5 00. They will be talking to the cofounder of Oil Price Information service, tom cloweza. Straight ahead, stocks volatile ahead of tomorrows unofficial kickoff to earnings season. How should you be putting money to work . Billionaire investor howard marks joins us exclusively in just a moment. Later, reefer refund madness. Legal marijuana sales were supposed to bring in huge amounts of revenue to colorado so why may the state be forced to return millions of tax dollars back to pot consumers . You wont want to miss this story. Its coming up on the closing bell. Financial noise financial noise financial noise barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. But take data from millions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. Our world is continuously transformed by the innovation of business, but at pwc we believe that businesses can go beyond products or services to have a measurable impact. As a professional services firm, we recognize the role pwc can play in helping build the Financial Capabilities of the next generation. Our commitment to doing so, has helped our people make a difference, not only for our clients, but for our communities. Thats the responsibility of business, and one way pwc is making a better tomorrow. Earnings season getting ready to kick off and many analysts are expecting quite the bumpy ride. How should investors go about investing in this market in howard marks is the chairman of Oak Tree Capital and he joins me to share his strategy. Welcome. Nice to be here. You have actually raised some concern about these markets from valuations to liquidity. Where do you see the most opportunity and the most risk in this market today . Well i think that first of all, there are no compelling bargains that im aware of in the markets. Theres better and theres worse but theres nothing thats absolutely cheap. You know the Central Banks have forced the Interest Rates down to zero. Everything else scales off that. So if the risk free rate is zero, then 2 on the 10year looks good and 5 or 6 on a high yield bond looks good and so forth, and so the relative relationships may be decent but the absolute levels of prospective returns are very low and that goes for fixed income but also equities and real estate and Everything Else. Everything scales off the same base level. It makes your job more difficult. Its very difficult. I describe most assets as being priced on the high side of fair. All we can do is pick from among the best thats out there. Any recent examples . No. You know i dont like to talk about what were doing. I dont want you to get too specific. Listen, everybody from the Federal Reserve down to wall street to main Street Investors are trying to figure out is this market too risky for them to get involved. Well a lot of money has already flowed to the areas that its easy for money to flow to like high yield bonds, leveraged loans, and things like that. And to some extent the stock market. The Better Bargains are in the things that the public money cant float to and cant elevate the prices and im talking about things like second tier he will estate european nonperforming loans, and the like private lending. But, again, you know, the tv watcher doesnt have the option of participating in those things for the most part. So what should what should we be keeping an eye on in terms of risks . Is it mostly overvaluation . Does this mean people should be wary about that or is it liquidity . Is it a looming economic event, higher default rates, that sort of thing. Well i think economic macro events have been going pretty well, and so the market tends to act as if they always will. We know they wont. We dont know whats going to happen. I listened to your previous guest and he said i dont know and i love it when people say that because so few people do. But, you know, so something could go wrong in the macro. Its hard to figure out in the u. S. Whats going to go wrong. Were not having a boom were not going to have a bust well probably continue in a gradual modest, halting recovery as we have for several years. Things are a little more iffy in europe where governance and cohesion are issues japan where theyre trying to inject energy in a fairly slumbering economy, emerging markets, china, russia lots of questions in the world. But then, you know valuations you asked about, valuations are full. Theyre not bubblish. Theyre not highly excessive. Stocks in general are either a little higher than usual or not, but theyre not in the territory they were in in 2000 for example. Would you pin the fed for all of this activity that were seeing or is it just that the market, the demand for Financial Assets or whoeverhowever you want to put it is overwhelming whatever is out there. The answer is yes to both. To all. Yes. The demand is strong but one of the reasons demand is strong is because the fed coerced people to resume investing. I thought after you know in 08 when everything was hitting the fan, i thought that the markets would be moreibund for some period of years because people were so chastened but by reducing the riskfree rate to zero, people with money have to go out and invest that money in the riskier parts of the curve to actually make any money. And were seeing some phenomenon now where, for example, jpmorgan doesnt want to take cash from some of the bigger depositors out there where money funds are becoming are not profitable. So are we still i guess what im trying to say is even just now beginning to see the effect of all of these institutions maybe spurred by the fed really pushing people out of cash and what effect will that have over the next couple years . Well i mean, you know, back in 08 when youre in the trough, cash is king but when youre at the peak cash is a burden, and its more of a burden today than weve ever seen. I mean you know you put you put money in most investments today, you put in 100 and a year later maybe get back 100. 50. You put it in in europe and a year later you get back 99 or 99. 50. I had money in the equivalent of a Money Market Fund and they published that starting on this date were not going to pay any interest on deposits above a certain level. They dont want it. Theres no use for the money. And that will change when theres a use for the money. Or when Interest Rates go a little higher. And i believe that the Central Banks have been suppressing the level of Interest Rates and when they stop i imagine rates will go higher but, you know, in the summer of 13 when the 10year was 3 everybody thought its up from here and now its 2 . Total opposite has happened. Thats why i like that fellow who said i dont know. I also dont know. He and i should have a drink. That seems to be the theme on the show the entire week. I should hope so. I dont like it when people claim to know. John kenneth gal bray said we have two kinds of forecasters, the one who dont know and the ones who dont know they dont know and i have much more respect for the first group. Thank you, howard marks, from Oak Tree Capital covering these questionable markets. Thanks. Starbucks offering employees a new and improved perk. The coffee chain offering to pay for two years of tuition at arizona states online program. Is this a better option than just raising salaries for workers . Plus the average investor contributed just over 4,300 to their ira last year. Stt enough to fund your nest egg . Thats coming up on the closing bell. Monitor them. And rebalance your portfolio. I can do a lot of what humans can. Except have a real conversation. If youd like that, you can always speak to someone at schwab. They arent algorithms. Try not to hold it against them. Say hello at intelligent. Schwab. Com just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. Using wellness to keep away illness. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. For as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. Welcome back. With some breaking news on Royal Dutch Shell, dominic chu with the details. So here is what we got for you. According to dow jones citing sources, Royal Dutch Shell, the british dutch oil and gas giant, is in talks to acquire a british oil and gas exploreation Company Called bg group. Its a large company, worth about 31 billion pounds about 46 billion. This group, bg group, focuses mostly on the gas, the Natural Gas Market specifically called lng or liquefied natural gas. Again, this is a story by dow jones and the wall street journal citing sources, but if it does happen, this could be one of the biggest deals in oil and gas that weve seen in quite some time. So, again, according to dow jones, citing sources, Royal Dutch Shell is in talks to acquire bg group about a 46 billion gas company, natural gas company, based out in the uk and it trades over there as well. Well see if it has any affect on the shares as we go into tomorrow mornings trade. Back over to you. Just as weve been discussing potentially a big wave of more dealmaking activity that one would be huge. No doubt coffee and college go hand in hand. Now starbucks is taking it a step further. The coffee giant upping its tuition plan to offer all eligible employees a fouryear full ride through arizona State Universitys online degree program. For more were joined by nicole smith, chief economist at the georgetown Economy Center on education and the workforce. Nicole, what do you think about this move by starbucks. Should they just have given the money to workers or is this the kind of perk a lot of workers are looking for . Thank you for having me. I think from the onset this is a tremendous move. Its a great opportunity. I think its the difference between teaching someone to fish and handing someone a fish. When you give your employees a bachelors degree or the opportunity to have a bachelors degree essentially starbucks is recognizing their employees as assets worthy of investment. Bringing in the panel, eric . I want to know about the amount of money theyre investing. It looks like theyre investing 250 million. This is really just one weeks worth of revenue. Its not that much money and we know from data a lot of people dont take advantage of these Educational Opportunities which is why companies can do this and not actually pay out the full amount they say they will. Nicole . Well in a way, you know, youre going to make this available to the people and we hope that as it catches on more people would recognize what a tremendous opportunity this is. I think so far close to about 2,000 people have benefited from the third year and the fourth year and starbucks is hoping to extend that to freshmen and sophomores as well. I think its a positive thing all around. Sharon . But there are 144,000 potential employees that could be eligible for a program like this and yet only 2,000 currently are taking advantage of it. Is there some other way to kind of incentivize employees to take advantage of these programs as i agree with you that there are great benefits for many employees but they dont take advantage of them and would it not be better then to use that 250 million in some way perhaps to increase wages for some of these workers . Well in a way starbucks is paving the way. I think we know for example, that many of the people who are working at starbucks, especially if youre low income could benefit from perhaps child care or some other thing because a great challenge here would be that in order to qualify, you have to be working at least 20 hours at starbucks and also enrolled full time in the program. So if youre a parent or a single mom, its going to be much more life and perhaps, you know, people need Additional Support initiatives in order to fully participate. But i think overall its much better. I was going to ask, would this make you more or less likely to invest in starbucks. Irrelevant. Really . Yeah. But i think theres an important point were missing and were talking about and i agree existing employees are not taking advantage of the programs and we know from ken feinberg about the 9 11 fund people didnt really take advantage of free advice, but i think a good question that might be posed is whether or not you would attract in a tightening labor market candidates who are interested in the Program Going forward. Thats my point. Isnt that valuable . Presumably you would attract better candidates. At less cost than if you had to pay them more. To sharons point, thats sort of preferable from a bottom line standpoint. I would just add to reiterate, i have no view on starbucks one way or the other. I just think in a larger sense if youre trying in a tightening labor market to attract quality talent, this might be one way to do it. Forget your existing stock of employees. Youre looking out two, three years. Nicole do you have a preference generally speaking about these kinds of programs relative to wage increases across, you know the workforce . Let me give you an example. Most recently people have been talking about walmarts decision to raise the minimum entry level to 9 the minimum entry wage to 9. And whats happened is Many Companies have followed suit. Tj maxx has followed suit ikea gap. Were hoping that in starbucks decision to actually begin providing tuition remission for its four year programs that other companies would also follow through. It makes more sense for their employees to actually have a bachelors degree and be able to take it anywhere because starbucks isnt limiting you to having to work at starbucks all the time. It makes more sense to have that and then, you know, an extra 2 in your salary. Im just glad sharon were talking about a tightening labor market perhaps. Definitely. I think that is a good point. Another point is to look at online education. A few years ago we would not have necessarily given that much credence to an online degree. Here we have a Major Company saying, look weve partnered with the university for online only education for many of these employees. That may be a trend we see more in the future. A lot of courses you can take online. Thank you so much. Thanks nicole. Chief economist at the Georgetown University center on education and the workforce. And time now for a cnbc news update with our courtney reagan. Hi, court. Hi kelly. Here is whats happening at this hour. White house spokesman josh earnest said he would not expect a final decision in the next few days on removing cuba from u. S. List of countries accused of sponsoring terrorism. He said the process begins with the state department and a final decision to make the change was not imminent. Secretary of Defense Ash Carter arrived in japan for his first trip to the region since taking the job. Its the firs stop in a weeklong tour of the asiapacific region. Opponents of a natural gas pipeline that would cut through virginia protested in richmond. They say they dont want the 550mile partnershipipeline. They delivered 5,000 signatures demanding the governor rescind his support. Whats in a name . Ask joel berger and ashley king. They accepted burger kings proposal to pay for their wedding in july. No wurdord on what will be on the menu but you can be sure the two will have it their way. Thats the cnbc news update for this hour. Wow, i hadnt heard burger king was sponsoring that. I wonder if they will serve chicken fries. I would go for those. Thanks courtney. Were more than a quarter of the way through 2015 but its not too late to save on your 2014 taxes and give yourself a big Retirement Fund bonus at the time. And one of the selling points for legalizing marijuana in colorado was all the tax revenue it would bring in to pay for new roads and schools. Why may the state be forced to return a lot of those tax dollars back to the public . Thats coming up in just a few minutes. We are just eight somedays away from tax day. Theres still time to get a bigger tax break and give yourself a retire am savings an extra boost. Sharon eperson has the details. Many investors are ramping up their annual contributions to their iras. The maximum contribution is 5,500 or 6,500 if youre 50 or older. Make a regular or a roth ira contribution on or before april 15th and it will count for the 2014 tax year. And that ira contribution can have a significant impact. Think about an investor who made a contribution of 5,500 last april. The market is up about 10 . So that 5,500 is worth about 6,000 now. Keep making those contributions regularly each year and certainly that money compounds very substantially. Now, not all i. R. A. Contributions are tax deductible. Depends on your income and thats one reason why roth i. R. A. S have become increasingly popular. Another reason is taxfree growth. Fidelity says 80 of its i. R. A. Customers under 30 put after tax dollars in roth accounts. For those incomes who are too high, you can make a nondeductible traditional i. R. A. And convert it to a roth at a later date. Its hard because the rules have changed about roths and traditional i. R. A. S. How can you be sure it wont change again . That you can still roll it over to a roth and thats not going to change. Is any of this up for grabs as we enter the 2016 president ial cycle or if the White House Party changes . Its likely the contributions you have already made and converted to a roth will be roth. Whether or not that continues, that is something that will probably be debated as it often is. I think the idea is to have your money in different types of diversified stocks bonds, commodities. You want to diversify in terms of the tax impact and thats one of the reasons why people look at the roth as well as the traditional i. R. A. Its like people dont realize this late into 2015 this can still count toward last year. Thats like four months of free money or something. Mostly things dont go past the calendar. You think the only thing that goes past the calendar is the irs wanting your money. I think the interesting thing to me is the politics of it. Do you think people hold back and dont put all the money in they could because theyre not sure maybe some people wait because theyre not sure but maybe some people like you said just dont realize. Fidelity says about more than a third of its contributions to i. R. A. S are made in the last three weeks before the tax filing deadline. Vanguard says double the amount of i. R. A. Contributions come in right down to the wire. A lot of people are waiting just because they dont know or because theyre not sure if they will have money. Maybe this is the important part. For a lot of selfemployed people they dont know they have the money to make the contribution until youre closer to the deadline. Its easy to say they werent paying attention or they didnt know, for a lot of people youre waiting to find out whether you have any money leftover to make a contribution. As the wall street journal has been talking about recently, savings is really a middle to higher income story. Its not something thats done at the lower bracket. So again for a lot of people its just a matter of time. Accountants say theyre doing their tacks and at that time theyre telling them this is what you could put in a sep i. R. A. Or this is the money you should put in a roth and then instead of writing the check theyre able to write a check to make this deposit into their account. Which is good. Sharon epperson. The Berkshire Hathaway chief investing in another company. Well tell you which company that is next. Also, you probably heard of reefer madness in the 1936 film and a cautionary tale about the dangers of pot. Its now a cult classic. Well, there is refund madness and its related to that surplus of tax revenues in colorado tied to legalization of marijuana. Well explain. Stay tuned. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. Welcome back. With a market alert on this Oil Inventory alert. We have the American Petroleum institute weekly build data here. What were showing right now is api is reporting a weekly build of 12. 2 Million Barrels of oil. That compares to an average analyst estimate of around 3. 4 Million Barrels. So significantly higher in terms of a build for the crude oil market here in the United States. As youre seeing there, we are seeing crude oil take a little bit of a leg lower. It was close to 54 per barrel before the number came out. You can see it now trading around 53. 10 a share. So, again, a leg lower here not a dramatic dropoff but anytime we see a build for this kind of data you can expect to see levels come off. Tomorrow is when the Energy Administration data comes out. These have become such market moving events. It isnt every day you can put china, Bernie Madoff and Warren Buffett in the same sentence but Allen Wastler will find a way. Its the readers, kelly. They never cease to surprise me. Right now theyre torquing up on a piece by jeff cox. He took a look at the asia Infrastructure Investment bank. Thats the little outfit china is pushing to be a competitor to the imf and the world bank. He took a look at some of the fears building on wall street in washington that this might actually challenge u. S. In the financial madoffrkets. Theyre also looking at this Bernie Madoff piece. Hes been writing emails to scott coen who covered the whole trial and everything. Hes been writing him emails saying, in retrospect my crimes arent so bad. If you look some people actually made money with me. Come on i think hes trying to get sympathy although i dont see how anybody can have search think for sympathy for this guy. Whenever you put Warren Buffett in a headline youre guaranteed several thousand clicks. Warren buffetts Berkshire Hathaway outfit bought a 10 stake in axalta. It does High Performance coatings on cars. It fits into the auto theme lately. Private equity owned. That was interesting. Those are the ones the readers are hitting. I want to jump in earnings season is about to start. How Many Companies are going to use the ports as an excuse for weak earnings and how relevant should we consider their excuses . I think we will see a lot of them. Some people have been betting on an earnings recession anyway and if you have this great dog ate my homework excuse right there you can slap on it i will just throw it out there, maybe about at least half of those using shipping through the west coast parts are probably going to blame the ports. Season gets under way tomorrow. We know what to listen for. One state where pot has been legalized theyre trying to avoid a tax surplus going up in smoke. The tax is charged on Legal Marijuana and has proven to be such a boon it may have to return money to the public thanks to a provision in the state constitution. Up next, well be joined by a Colorado State senator to discuss. And as mentioned, earnings season kicking off tomorrow with alcoas quarterly results. Im be joined by Klaus Kleinfeld to discuss those numbers right after the bell tomorrow. You wont want to miss it. Were back in two. Tdd 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so when a market move affects one of your positions, tdd 18003452550 schwab can help you decide what to do. Tdd 18003452550 with tools like free livestreaming cnbc tv tdd 18003452550 that give you the latest Financial News and trends. Tdd 18003452550 and bubble charts and price charts that let you see exactly tdd 18003452550 how market activity is affecting your positions. Tdd 18003452550 so when the time comes to decide whether to scale in tdd 18003452550 or scale out you can make your move, tdd 18003452550 wherever you are. Tdd 18003452550 and start working on your next big idea. Tdd 18003452550 open a schwab account and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 tdd 18003452550 call 18777292379. Tdd 18003452550 or visit schwab. Com trading. Tdd 18003452550 schwab trading services. Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 march madness may be officially over but theres a new Storm Brewing in colorado and its being dubbed refund madness. A year after legalizing Recreational Marijuana, the state has pulled in an estimated 60 million in tax dollars. It may not be able to hold onto that money. The tack money that was supposed to go to School Construction and drug education might just be returned to voters and thats because of a provision in state legislation putting a cap on tacks and spending. Now colorado lawmakers are making aby partisan push to ask voters permission to keep the money. Joining us is one of the lawmakers, patrick stedman. Also joined by chris walsh, managing editor from marijuana business daily. Wow, its a daily, theres a lot to cover i guess in the sector. Welcome to you both. Senator, let me begin with you. This goes back what a decade or more this colorado law that if theres too much tax money it goes back to the theres too much tax money, it goes back to the public . We have a provision in our state constitution that limits the ability of the legislature to tax and limits the about of revenue we can keep and spend from those taxes. Its causing a problem for our new Marijuana Taxes. What i dont understand in reading this, though, is looks like the tax money is actually generated by stronger business activity, not, you know in other words, the Marijuana Tax contributed maybe to the overflow, but its not the only reason, so why would this money be blamed or go back to marijuana consumers or buyers . Well thats a quirk of our state constitution. Youre correct. The Marijuana Taxes, themselves have come in 10 million lower than were projected but Everything Else in our state budget right now, all of our other revenues are booming. Colorado is doing great, and we have tax revenue and other cash Fund Revenues rolling in and because of that the Marijuana Tax is in trouble. So, chris, how did that happen . How did the marijuana sales wind up in the middle of all of this . What potentially does this mean . How much money cowell be returned to the typical buyer . Well the marijuana sales tax are very very strong so this is a brand new industry and so it did fall short of initial projections, but those were like throwing darts at a dart board. Its the first state in the nation thats done that. So the bottom line is theres still 60 million in tax money coming into the state that, you know, we got to find a way to either refund it back to consumers, or the people that bought mare juan orijuana or the businesses or let the state keep it. Its a reflection of the unique tax law in colorado that isnt necessarily prevalent in any other state. Dan . Senator stedman, can i ask, where am i going wrong here . On the one hand colorado has increased the level of freedom for consumers and people in general in colorado. On the other hand youre raising additional taxes which you are going to have to refund to them. Isnt such a bad situation that coloradans get additional freedom and a tax refund . Isnt that a good thing . Well colorado voters have voted twice to tax marijuana. When they did the initial legalization vote, they instructed the legislature to come up with a scheme for regulating and taxing marijuana. And we did that. But in colorado our constitution requires all new taxes to be approved by the voters. So the Marijuana Taxes had to go back to the Ballot Voters overwhelmingly passed it but because of the timing of this new tax and constitutional provisions that apply only in its first year and the fact that our economy is booming right now, the new tax is in trouble and were looking at refunds. Voters can say no. Do you want this money to go back do you want the state to be able to hang on to this money or do you want it to be refunded . No, im working on a ballot measure that would get voter approval to not make the refund to allow the state to keep and spend the dollars and were going to spend it on the things the voters wanted Marijuana Taxes spent on. First, School Construction but also Public Safety and law enforcement. Okay. Drug treatment, drug education, youth prevention. Weve got a whole package of things wed like to do with this money. It would be a shame to have to refund it. Sharon . Chris, you said it was like trying to figure out what the taxes really would be was a very difficult proposition, but yet senator stedman said it was 10 million short. Is this market greater than what some of the expectations were though, or were the expectations just in flated in terms of the Marijuana Tax sales would be particularly for the Edible Market . Whenever you pay for new ground like this and have a brand new industry crop up overnight in the world, its very difficult to predict whats going to happen, so, yeah there were estimates that were too high and some even before that that were way too low. The bottom line is you can just look at the solid numbers, again, 300 million in Recreational Marijuana sales last year on track for 60 million in the fiscal states fiscal year. Those are impressive number. So, you know the edible sales were a lot higher than people thought. Thats infused cookies and candies that have marijuana in them. And, you know basically this Zombie Apocalypse of people Walking Around stoned bumping into each other downtown searching for funyons didnt play out. We can look to the numbers to show this is a real valid industry and its been run fairly well in colorado an the fact were having a debate over where the tax money is going is a terrific problem to have. Whether its going to consumers or businesses or back to the state. Chris, before we go just to be clear, how much per person are we talking about, do you know . Actually no refund mechanism exists for this type of refund. Thats one of the things the legislation im working on would come up with. Okay. If we divided state population by the amount, its about 6. 6 chris, sound right . We have to go. 6 or 7 bucks. Its a win for the industry and the business is in it. This is good that this is the problem. It is. A surplus story in any case we like to talk about. Thank you, chris walsh, senator patrick stedman. Please keep us posted as well. We already know texting and driving is dangerous. Super dangerous. Theres a new app that lets cell phone users know when the person theyre trying to get in touch with is driving. Not only are the creators trying to prevent accidents they have Interesting Data about just who the biggest troublemakers are on the road. Well bring you nose details when we come right back. Welcome back. Millions of americans are text and driving and lying about it. Theres now data out revealing just who the worst culprits are. Eric here has those details. Eric . Real networks they had the real player in the 90s. Yeah. They moved forward. They have an iphone app now. Thats where the data comes from. Thats why im explaining it. Their app is the one if you call it it will automatically tell the person youre calling or trying to text you that youre moving. As scary as the data is drivers under the age of 34 one in ten of them have actually taken a selfie while driving. What. And posted it to a social media while the car is moving . While the car is moving. Thats our generation. Thats the millennials. If you look by gender, if a woman calls a man, whether its his mom, his girlfriend his mistress, whatever it is, they are much more likely to pick up. The men . The men will pick up the phone if a woman calls him as a posed to a woman picking up the phone if a man calls her. Shes less likely. Sharon, is this your personal experience here . No. Not really. One data point doesnt explain it. Whats interesting is also i think in the survey, it talked about if you ask someone, do they text and drive, you know theyre less likely to say that than if you ask a passenger, were they texting and driving . Thats more telling. We have to go eric. Whats key about this its more prevalent than people acknowledge. People are lying about it. Cnbc. Com, we have all the data tons of numbers there. So disturbing. Thank you guys all for being here this afternoon. Really appreciate it. That does it for us on closing bell. More on the story on the website. Fast money is coming up with melissa lee and the gang. Ill take it kelly. Thanks so much. Fast money starts now, live from the Nasdaq Market site overlooking new york citys time square im melissa lee. Heres whats on the fast track tonight. Twitter topping the tape today as one big twitter bear turned over a new leaf. Weve got the details. How to play todays 4 rally coming up. And can facebook beat out apple in our fast money madness challenge . The traders are split on the desk so youll be deciding who wins the trophy. A big reversal in crude oil today. The commodity starting lower then closing at its highest of the year. We have new data coming out from the American Petroleum institute. Its moving crude in the after hours. You saw the chart