Transcripts For CNBC Closing Bell 20150408

The collapse paving the way for shells buyout ofb g group. This is a huge one. Around 70 billion. Coming up well look at which companies in the energy patch could be the next takeover target. Also here come the earnings. Alcoa ready to kick off the parade. Ceo Klaus Kleinfeld will be here exclusively just moments after the aluminum giants results are released. Thats coming up just after the ringing of the closing bell. And Dzhokhar Tsarnaev has been found guilty of multiple charges in the deadly Boston Marathon bombing. He could now face the Death Penalty. Well have the latest coming up. By the way, i should point out, as soon as any members of the jury maybe some of the attorneys come out before the press, we will be going there live to boston with all of that. So well keep you up to date on this story as well. Pardon the interruption as we do so. The dow is up 11 points. 17,886 is the level. Look at that russell rebounding nicely from its weak session yesterday. It dragged all the indexes lower. Today up six points half of 1 . The sapp p is trying to claw back as well. Well see if we can hang onto the tenuous green arrows. Jack bouroudjian from index Financial Partners back with us. So is Keith Fitzgerald from money morning. Com. Our own Steve Liesman and Rick Santelli and, Steve Liesman, lets start with you. Those fed minutes came out. I mean whats the headline for you . Its clear that they cant decide when they believe its the appropriate time to raise Interest Rates. Its clear there are divisions, bill, and i guess the head looirp for headline for me is theres a whiff of june in the air. I say that not just from the minutes, although there were several comments in there, several participants said that june was they prefer hiking in june. Others said later in the year. A couple said 2016. But it wasnt just the minutes, which were three weeks ago and as bob pisani pointed out in the last hour came before that weak march report but we had two guys today, bill dudley the new york fed president , this morning saying june is in play. He thinks the bar is high for june but its in play and jay powell the Federal Reserve governor whointerviewed at the council on foreign relations. I dont know if we have the sound. If you have it go ahead and run it. Maybe you dont have it. Well get it. Youre point being that june is in play and thats why this market is responding a little bit hawkishly to all of these developments today . I think so. And i actually thought that when janet yellen spoke after the press conference. They removed patience and then she came out and said just because we said not april doesnt mean it couldnt happen in june. I think the fed wants the market a little bit ready for this kind of a move here. And Rick Santelli the response, this happened twice today. We had a rally in the open until the bill dudley throwaway line about maybe june on the table and then the minutes came out. So you had a stronger dollar you had yields going lower on the long end of the curve, and you had the stock market going lower, all what you might imagine would be the case if theyre fearing the fed is going to raise rates sooner rather than later, right . You know im not sure that theyre fearing sooner rather than later. I just think its the kneejerk reaction to get in a market thats kind of trigger happy after 6 1 2 years when youre just even in a discussion about normalization. The yield curve flat 3. 5 basis points, dollar index was minus 7, now its plus 9. Stock market was minus 7, now its plus 12. There really wasnt a lot of activity going on and i think were going to dance this dance anytime that anybody is at the mic or its the minutes or a meeting, but in the end if anybody truly believes that were going to see normalization in june and boy, i pray it would actually happen do you think wed see these minuscule moves that the dow would only be where its at or the curve would have only moved 3. 5 . I think we answer our own question. If people believe june, trust me, the curve would be about 15 basis points flatter than it is right now. Jack i want to pick up on this huge deal today with shell buying bg group. A 70 billion deal. What do you make of it . What does this mean for the markets . Well, first of all, it means there are a lot of bargains out there, especially in the energy space and youre getting a lot of people doing their shopping properly. That in itself tells me something. The other part of that is there are if you think about it, there are a lot of segments within the economy that right now are struggling with what were discussing on this show. They dont know what the future or Interest Rates are just like we dont. In fact, just like the fed governors. When you have a spread between those that want to move in june and those that want to wait until next year, that is a widespread, and usually the truth is somewhere in the middle. What we are really finding and i think what the shells of the world are finding is that the fact that the market has been moving sideways over the course of the last few months is almost as good as a correction. And over the course of the next few months especially if we see earnings not disappoint as much as people are expecting them to disappoint, and thats a very important point. Remember, with the dollar doing what its doing, what oil is doing. So if theres any beat at all there, then youre going to probably get a good move up. Kelly, im really interested in what rick said earlier, that if the market was convinced of a june tightening there would be a 15basis point flattener, and, rick, am i understanding you correctly, that flattener would could where, from the short end coming up along a stable long end or does the long end come up too . Is that the market saying im not so worried about growth as i am less inflation . How does that 15 basis points come out over the curve . I think all rates move up but i think 2s, 3s, and 5s move up much more aggressively. 30 10s and especially 30s are laggard. The proactive aspect of that flattening would be in the maturityies 5 and under. Thats how we know june when we see it senator, is that right . Im pretty sure if anybody seriously believed june, we wouldnt be discussing whether that was the case. Were only talking about the probability getting a little higher. Its not that we necessarily have to price this entire thing in as actually happening. But theres an immediate hit to those who hold that paper that rick was talking about. Sure. Which is why we have to watch this closely. Theres one other thing thats coming out of these fed minutes here and the fed so long has been talking about being data driven. Well, here you have an instance where the data has changed in unexpected fashion. What im most curious about is whether the fed is going to react to the data or whether theyre going to go back to their old bag of tricks and pull a rabbit out that has no bearing on reality and thats what i think the real danger is. Traders dont know what the fed is going to do because i dont think the fed knows what its going to do. What rabbit would you be thinking of . To me its along what rick is talking about. I think we have to pull the needle out of the patient and see whether the patient recovers. This is a market thats addicted to cheap money. You see big mergers and acquisitions, theyre doing it now because they fear they may not have as efficient use of capital a year from now. Rising rates make that more expensive. Its logical to go shopping. Thats whats happening. I use the word fear earlier and, rick you took issue with that. Maybe the markets dont fear a rate hike necessarily, but is it possible that the fed itself fears the market response when they begin raising Interest Rates, rick . I would have no doubt that what you said is exactly true. I think that bureaucrats, whether its at the fed or the government level, rather that t. A. R. P. Vote and it forever changed the notion that policy looks to the market for some sort of confirmationened and i think thats a horrible metric to have. Wrong. Bill dudley said today and he said it before that how much the fed moves and when it moves is dependent upon the market reaction. Yeah. I know there are people on this panel here that bristle at that thought but thats the reality. That the fed is because the market is a transmission mechanism for fed policy. The fed is going to be very mindful of how the market reacts in the transition of that policy. Steve steve, steve, the fed has always reacted to the market. Lets face it. I think thats right, jack. I think its the other way around, guys. Weve been in the markets for 30 years. The markets have always told the fed what they want and the fed usually reacts accordingly, and what i see happening today is the fact that, you know, people are afraid of the initial move. When that move comes and the path to normalization is there in front of us guess what rick . Stocks are going to love that. I think everybody will i dont know if they love it but i agree with you. Dont get caught up in the first or second reaction. Jack can i ask real quick before we have to go were going to get these alcoa earnings that hit in an hours time after the bell. Going to unofficially kick off earnings season. Jack what is this Earnings Report going to mean to you . Alcoa doesnt mean anything obviously. For those that are really watching the market its next week that matters. Pay attention to the financials. As the financials go so will go the quarter. Nothing at all . Keith, you see some opportunity though as we start earnings season. I do. As a trader i see this very differently. I think you have seen a lot come up in the options activity. You have seen a wavering in overall price. Traders are gig to hedge against beginning to hedge. I think you take energy out of the picture and i may have strong growth. You can strip out a few other things, too. Pretty much get anything you want. Thanks guys. Appreciate it this hour. See you later. 50 minutes to go into the close. As mentioned, we have a busy session after the bell. Well get alcoa results. The market pretty much running in place here. Dow is up 9 points. S p is little bit more positive. The nasdaq doing much better up 32 points on a decent session and the russell making a nice comeback, too. Apple watch out today and its gotten good reviews. One mega deal in the energy patch in the bag. So who is next . The pros will be discussing which Companies May be ripe for a takeover. And as mentioned alcoa earnings hit right after the bell. Ceo Klaus Kleinfeld will speak with me exclusively even before talking to analysts. You dont want to miss a moment of that coming up in just about an hour. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. Depositing checks at the atm and transferring funds on the mobile app. Technology designed for you. So you can easily master the way you bank. All right. Were virtually unchanged right now as we head toward the close with the market about 45 minutes left in this trading session in what has been a bit of volatility as they try to read the tea leaves and anticipate when the fed is likely to begin raising Interest Rates. Just like yesterday, bill look what just happened. That dow turning negative in the final hour after a stronger session earlier in the day. Well watch it. 45 minutes to go and letsgate the late get the latest on the big story outside of wall street. Ron mott has the latest on the guilty verdict in the Boston Marathon bombing. Reporter no real surprise in this verdict. Dzhokhar tsarnaev convicted on 30 counts all guilty. The real surprise if there was any surprise the fact the jury deliberated a second day. I spoke to one of the victims of that bombing what waso was clearly surprised the jury did not come back yesterday. The defense case begins in earnest when we begin the penalty phase. The same 12 men and women who found him guilty on 30 counts will now stand in judgment about whether he should spend the rest of his life in federal prison or go to the Death Penalty. Of course, here in the commonwealth in massachusetts, Capital Punishment is not available in the state court system. Obviously it is in the federal court system. There is widespread opposition here. This particular panel is what the federal government considers a death qualified panel. They were open to the possibility of finding someone guilty on the charges Dzhokhar Tsarnaev faced and then say he should pay with his life for his involvement in these crimes. We believe the jury will reconvene sometime next week to begin the penalty phase. Thank you very much. Lets get more reaction with paul goldstein. Paul goldstein and his wife were there that day. Nancy goldstein was running in the Boston Marathon. She was stopped before she got to the finish line thankfully because of the bombing, so she was not injured, but paul was in the thick of it. He was an emt who worked the finish line to help the injured after the explosion, and paul joins us on the cnbc news line. Its been a long two years i can imagine, paul. What is your initial reaction to hearing about these guilty verdicts . Well my initial reaction is im a little surprised they had to deliberate for two days but im glad that they came in with a guilty verdict on all counts. Paul take us back to that day, what it was like what was running through your head at the time. Obviously there was then the chase afterwards that shut down pretty much all of boston. Again, just if you can take us back to that moment and what was what it felt like. Well it was kind of eerie. At first when we heard the bombs, my first thought was patriots day, maybe there were a couple canons and somebody yelled bomb and everything broke loose from there. It was a chaotic scene, as you can imagine. I ended up over with some of the victims, and we just began doing what were trained for, and the thing that was really incredible about that day, it wasnt just the firefighters and the emts who were doing what theyve always been trained to it was all of the folks that had no training that were jumping in and taking the shirts off their back and the belts off their pants in order to provide help and comfort for the victims. Paul as it happens i was there that week. I witnessed the impact this had on the people of boston. It brought them together brought all of you together. The boston Strong Campaign right after that. Do you sense that this will bring closure for a lot of people in that area with the guilty verdicts that are being rendered today . You know maybe a bit. I mean nothing can bring back the lives of the three people that were lost the fourth person including the police officer, and the pain and suffering of hundreds of people but its definitely a good first step in closure and knowing that he was found guilty and that hes going to have to pay for his crime. Paul, do you and your wife feel justice has been served or will you feel that only if he receives the Death Penalty . Well thats kind of a difficult question. You know i feel like he deserves the Death Penalty but in some respects i feel if he gets the Death Penalty, he gets off too easy. Did nancy run last year . Is she going to run this year . Well shes not running this year. She did run last year. When this happened she had been fulfilling a lifelong as dream of running and finishing the Boston Marathon and didnt get to finish so she was very excited last year having the ability to go back and complete the marathon. And, paul, what kind of community has there been . Since your involvement, because your wife was so close to that finish line and you were involved over the last couple years, is there any kind of more direct involvement that you now have as you watch this trial come to its conclusion . Well, as i watched the trial come to its conclusion it almost, you know, has been a couple years and hasnt been quite as much talk. It kind of gets things started again and it reminds people that they have to be diligent that these things do happen and, you know from that perspective people just have to be aware and stick together. That is for sure. Paul, thanks for your time. Appreciate it very much. My privilege. Thank you. Paul goldstein. Weve got about 40 minutes left in the trading session here. We get back to the markets with the dow up just 6 points. The s p is up 3. Nasdaq has had a pretty good day up 30 points. Much more closing bell when were back in two. Stay with us. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Welcome back. About 40 minutes to go here. The dow has turned negative. The s p trying to stay positive. The nasdaq has a little more cushion to do that today. It is up about half of a percent. Similar gains across the smaller cap russells as well. Looking across sectors, discretionary is leading the way, health care as well. Energy is the laggard and that of course is despite a huge deal in the energy space but has much more to do with the big drop in crude oil prices. Oil tanked as u. S. Stockpiles and saudi production continued to escalate even with these low prices here. Light sweet crude today down 5. 75 right at that 50 a barrel level. Lets get to that blockbuster deal in the oil patch we told you about on closing bell yesterday. Royal dutch shell buying uk owned bg group for 70 billion. Our Jackie Deangelis is drilling down for the details. Hi jackie. Good afternoon, kelly. Lets talk about why this deal is so significant. The first is that its the largest in the energy space this year but also the third Largest Energy deal ever according to thompson reuters. Here is what you need to know. You mentioned the 70 billion acquisition price. But also why bg and why now . Well the first issue is that bg is a company that has diversified assets. Its lng and oil assets and it could boost shells portfolio by roughly 25 . In terms of why now, you mentioned the decline weve seen in oil prices. It has taken a toll on bgs stock down 30 in the last year or so. So it seems like it might be a good time to get in there. The question that a lot of people are asking is if this signals were going to see a wave of m a within the energy industry. Answers on that are different. Some people say yes, some people say there will be big targets, smaller targets. Some of the names being tossed around include anadarko bp were talking about apache eog, names like pioneer, just to name a few that people are looking at. Some of these companies have also seen a very steep decline in stock price because of whats happened to oil. Now, some of the risks for this particular deal, were paying a 50 premium here and yes, that might keep exxonmobil from making a counter bid, but at the same time if we dont see Oil Prices Rebound the way shell is estimating that they will analysts are worried this deal may not make sense in the long term, and you guys mentioned it before a lot of people think were sort of trying to find a bottom here at 50, but when you see these violent swings in either direction as weve seen over the last few days and weeks, a lot of people would still say its not over until the fat laddie sings and we could still see downside ahead. Back to you. Thank you so much. A lot of activity in this begging the question raising the question who is next in terms of being a target for a merger or acquisition. Lets bring in brightling energy chris larry and kyle sullivan. You say this deal were talking about is all about low Energy Prices and for that reason you think more deals to come yes . I think so. And the big deal here is that the u. S. Right now is so oil independent a lot of companies that have oil outside of the u. S. That have production in other countries like niger ja ya or the north sea are struggling more than we are here. When you look at Different Companies that are struggling, you will look at Foreign Companies before you look at american companies. Chris, do you agree . I do agree. A good example, i think stat oil is shopping for another brigham. They talked about trying to come in and do a deal withe eog, might have been too big for them. Right now there are lots of companies out there who have cash who are looking to not just grow through the drill bit, thats tough to get financing right now, but to grow through acquisition. If we all believe and i believe oil prices are going to rebound, just a matter of when you can buy assets on clearance sale. I think youre definitely going to see Companies Looking to increase their reserves using cash on hand. Carl do you want to be that specific in specific . Do you have any companies in mind that you think could be candidates . Well, you know bp is being talked about a lot. They were earlier with shell. Also canadian oil assets or Canadian Oil Companies i should say are really pretty big targets also. They really dont have anywhere to send their crude production. So i think that makes them a little bit more vulnerable to m a or takeover bids. You know chris, you mentioned that you believe oil prices are going back up and im sure the industry is structurally long but what happens if they dont . You have to at least consider the question. These are huge, huge deals sure. I hope theyre economical if Oil Prices Stay here or move lower. When you see a deal like bg you know shell is banking on the fact it doesnt make sense theyre going to continue to go lower. Its a bargain and its going to move back up. Weve all said before were going to have a lot of volatility between now and june and i think were going to still see 52 days and 43 45 days. Im not a believer we have a solid floor at 50 and going to grind back up. I think its going to be june july, well grind back up to the mid60s by the end of the year but thats still a lot of value if youre buying a company today. Theyre putting a 50 premium markup on bg. Thats going to be a longer term play. Youre not getting that money back by the end of the year but you can still buy some assets. Oasis a good company, a lot of these companies that right now are good bargains. Great companies a year ago. Theyre Great Companies now. Their stock is down 50 . Carl, were all mindful of the strong dollar and the impact that can have. I can imagine that will have an impact on who buys whom down the road as well right . Thats right. Like i said i think when these companies, especially when theyre based in foreign areas, they will be a lot more vulnerable. I think what happens in the u. S. , i think come june if these prices dont go back up or even go back up maybe 65 level which i think so too, but were still going to have a lot of casualties. Well see a lot of people fall by the wayside. And, chris, how much of this has to do with shell abandoning its effort to pursue more fracking to boost production and go after some of these deep sea rigs and how much of this is also just about the gas business which were hardly even talking about . I think a lot of this is about lng. Nobody is really talking about that. Bg has great assets for liquefied natural gas, the deep water assets. I think theyre buying their way in reserves and into assets when they dont want to have to go and acquire them through the drill bit and theres a lot of companies now are clearance saeld and at a song like you mentioned. I think we will see more of this because companies are levered up. If they cant get drilling financing, they will have to be acquired or theyll be in bankruptcy. Casualties will happen lets hope less bankruptcy and more acquisitions but who knows whats going to happen in the near term. If you have a lot of debt youre in trouble. This deal certainly got everybodys attention. Chris faulkner carl larry, thank you for joining us. Time for a cnbc news update with courtney reagan. Here is the update for this hour. A federal jury has found Dzhokhar Tsarnaev guilty on all 30 counts in the Boston Marathon bombing. He now faces the possibility of the Death Penalty. The Death Penalty phase of the trial will begin as early as next week. The fed releasing its policy minutes from its meeting in march. Officials were divided on the timing of a rate hike. Some favor the hike in june while others prefer to wait until late this year. Others said the economy wouldnt be Strong Enough for an increase until 2016. More than 200 yazidis were freed today in northern iraq. The majority were released either elderly or disabled. Isis attacked the ya i did dis killing, capturing, or enslaving thousands of the minority group. Researchers gave patients a single dose of an antibody and saw an up to 300 field decrease of the hiv virus. Scientists hoping it could lead to a vaccine. Thats a cnbc news update for this hour. Back to you. All right. Thanks courtney. We have 30 minutes to go into the close. The dow is now back in positive territory, so its all over the place here as we keep an eye on that index along with the broad s p which is now up about 3 points and the nasdaq Pretty Healthy day up 30. And really its all about the fed and when we come back, well talk about central bankers around the world talking about cutting Interest Rates and the u. S. Economy showing signs of sputtering right now. Does our own fed have no choice but to delay that first Interest Rate hike in nearly a decade . Were going to hash it out with a couple economists when we come back. Later, alcoas ceo Klaus Kleinfeld speaking exclusively with us moments after the mining giant posts earnings at the top of the hour. What he said could move the stock. Dont miss it. Were back in two. [ 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. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Weve had some volatility today but were not thats not reflected right now as we head towards the close with 25 minutes left in the trading session. The dow is up 7 points s p is up 3, nasdaq is having a pretty good day in the Technology Patch up about 29 points. Show you the 30 components of the Dow Jones Industrial average. Its just about evenly split. Nike is the leader to the upside. Exxonmobil to the downside. Once upon a time we used to be able to show you alcoa in this group, but no longer but i happened to peak and as we get ready for alcoas earnings, that stock is up 1. 5 . Not a bad day considering. The big debate now is when the fed will raise rates but the fed is keeping a close eye on europe and the rest of the world where economies are lagging and Central Banks are taking rates lower. Will all that global easing push the fed to postpone rate hikes here . Joining us a ted peters former member of the board at the philadelphia fed, its tough to say, and lindsay piegsa. Lindsey, its clear from the minutes of the most recent fed meeting they have no clue when theyre going to be raising Interest Rates. What about you . Were still maintaining our forecast that the fed will wait until 2016 to raise rates but right now whats interesting is their focus is really on the international economy. As we know they added International Developments to the january statement and now we saw in todays Meeting Minutes that it was that rapid rice in the dollar causing an erosion of u. S. Exports that really caused the fed to downgrade their expectation for growth inflation as well as the pathway for rates. So any further rise in the dollar as the fed says they do expect will only further erode activity here in the domestic economy and push out that rate forecast until the end of the year at the earliest but, again, 2016 remains our forecast. Its just one event after another leading us to a new normal a secular stagnation in this smeeconomy or not. Will we come through and see more verve . We see a great improvement in the u. S. Economy over the last four or five years. Its incremental. Not a hockey stick. Theres you have to remember a couple things. Janet yellen is a dove. Hes even more dovish than ben bernanke but shes getting pushback among other members. I disagree with lindsay. I think we will see an increase in september and thor increase in december. I think they are going to pass i think theyre going to pass in june but theyre setting the stage for this right now. A big concern among the fed members really is are we getting a misallocation of resources . In other words are people out there spending money and doing things that are inappropriate such as junk bonds which used to yield 12 and 13 are now yielding 6 and 7 . Thats a misallocation of resources. Lindsay, i would never question your thoughts on this. Youre the economist, i only play one on television, but dont you sense i mean i go back to the speech that stanley fischer, the vice chair, made a couple weeks ago. You hear from bill dudley today. Theyre all saying the same thing, you know, that theres a sense they cant wait to begin this process. Theyre anxious to start. Dont you think theyll begin maybe some people think june. Bill dudley said today its on the table. Maybe september. Just throw one canary in the coal mine and see what happens when they raise the rates that first time. Well remember the fed has been anxious to raise rates for the past five years. In fact theyve been telling us that next year is going to be the time line for rate increases. Again, since 2009. So when we think out to 2016 with he have to remember weve been sitting here anticipating liftoff for the past five years. And just going back to the previous point, i think the fed certainly is giving some push barq from the more hawkish members but we have to remember that the Voting Committee is decisively dovish with only a single hawk sitting with a vote currently in this committee. So a unanimous vote to keep rate increases off the table in march i think well see another unanimous vote at april and june and continue to push off that time line to 2016. The one thing the fed has been clear about is that they are data dependent and right now the data is showing no pressure on the fed to begin that liftoff. Ted, do you think that weak jobs report was just a oneoff that we just had . Well i think, first of all, were going to see probably two increases this year. I also disagree with lindsay a little bit. I think the World Economy is doing fine. I think youre going to see china is at 7 growth in coming here in 2015. Thats down a little bit. Thats still pretty darn good. India at 4. 6 growing. Europe is probably going to see a 1 growth which is probably an improvement from where they are. In europe you have some differences there. You have got germany which is way up here and the top of the feeding chain and then you have greece down at the very bottom which is kind of a basket case. They still havent figured out you cant retire at 50 years old with a full pension. I think what were probably going to see is maybe greece drop out of the ecu. That would probably be good. The rest of europe is kind of muddling along and improving and thats always been the internal word muddle along in europe. Ted, let me ask you this. We were talking earlier this hour about the fed is very closely attuned to what the markets response will be when they begin the process of raising rates. Lets assume that they begin in september as youre suggesting here they raise the rates. What happens then if the markets all have a taper tantrum as they did a couple years ago when ben bernanke started to lay out a time table of some kind. If the markets response is too extreme, do you think they rethink that or what do you think they would do then . I can tell you that janet yellen and the fomc really is not overly concerned about what the stock market does in the short term. Theyre going to do whats right about the country. Thats the great thing about janet youre not in the fed anymore. You can tell us what you really think now, ted p. M. Im telling what you im ral thinking. I think in june they will come out and basically set the stage for september. The only thing thats going to spook the markets is if theyre surprised. If they come out earlier in june and say it looks like were going to raise it, then they raise it then its not going to be a big deal at all. So the market is factoryingk for factoring all these things in. Were looking for a 12 to 13 increase. Good to see you both. Ted peters lindsay pietza. Thank you for being with us. Thank you for having me. Programming note christine lagarde, the head of the International Monetary fund will be right here on cnbc tomorrow morning. Wait until you hear what is concerning her the most about the global economy. Be sure to tune in tomorrow morning, 11 30 a. M. Eastern time right here on cnbc. As we head to the close, 19 minutes left in the trading session. Were getting a little bit of a pop. The dow up 27 points. By the way, you know, it was up 100 on the open this morning. Exactly. Until bill dudley spoke. Same as yesterday. A failed rally for a second day. The s p is up 5, nasdaq up 34. Coming up, earnings season kicking off unofficially after the bell. Alcoa and bed, beth and beyond. Well bring you their numbers when they hit the tape along with instant analysis. Up next this could be the worst earnings season since 2009. Our dominic chu has a special report on what could be a wild ride ahead. Stay tuned. Y at the end of the day. They used to get really tired. Until i started gellin. I got dr. Scholls massaging gel insoles. When theyre in my shoes my feet and legs feel less tired. Its like walking on a wave dr. Scholls massaging gel insoles, im a believer 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. From the smallest detail to the boldest leap. Healthier means using wellness to keep away illness. Knowing a prescription is way more than the pills. 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. Realizing cold hard data can inspire warmth and compassion. And that when Technology Meets expertise. Everything is possible. For as long as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. Welcome back. Some huge moves in oil today. That has energy huge declines in the oil price, big inventory gain. Energy is the laggard but stocks have been buffeted by a number of things including some comments by fed officials. Weve been negative and positive this hour. With 15 minutes to go the dow is up 26 and the s p up about 5. Lets see what the nasdaq looks like, all 100 components of the nasdaq. Netflix, yahoo , technology is doing well today. And the opposite side looking down in the lower righthand corner where the losers are, apple i see and you will probably see a lot of smaller Energy Stocks as well in the nasdaq component. Buckle up though, we could be in for the worst Quarterly Earnings season since 2009. Tell us the happy news dominic chu. The bar is low when it comes to earnings expectations and i do mean low here. This is what the experts on wall street are predicting about the strength of the corporate earnings season for the large cap s p 500. Just before we get into the full swing of things here as of right now the Consensus Forecast is for earnings to decline by nearly 3 . You can see that with the little yellow bar behind me. If that were to happen it would be the first decline weve seen since the Third Quarter of 2009. Now, the strongest anticipated Earnings Growth will come from the financial sector. Over here you can see, again, thats because its the second biggest sector in the s p 500. Thats why its so important it carries a lot of weight. Industrials, health care and Consumer Discretionary stocks expected to help the cause, each forecasted to grow by around 7 . As for where the biggest drags are going to be no secret here follow me over here, it is, of course, the energy sector. Expect to show a decline of around 64 . Here is some perspective. If we strip out the Energy Stocks, Earnings Growth for the entire s p would have been positive or expected to be positive by nearly 5. 5 . Now, on the Revenue Growth side, Analysts Expect to see a decline of around 2. 5 when it comes to that top line number growth. The anticipated growth will be powered by this time around Health Care Stocks to the tune of around almost 9 . And energy will be the big revenue drag here as wlt. The anticipated decline of 33 for Energy Stocks so thats the big one on the energy side as well. Well see how these numbers change as earnings season gets into full swing, but for right now well send it back over to you guys. All right. Thanks very much dominick. 13 minutes to go here, keeping a close eye on markets. Yesterday we saw a similar session. We started out strong up triple digits, we couldnt hold onto the close. Today we are trying. We are. Volatility has been the name of the game in the final hour of trading over the last few days. Well get you to the close hopefully in one piece when we come back after this. Hello. I am technology that is changing investing forever. I am a fully automated Investment Advisory service. I can help you choose the right portfolio. Monitor it. And even rebalance it. Ive been called innovative. Revolutionary. And just plain smart. Id blush at the compliment if i could. But i cant. So. I wont. Say hello at intelligent. Schwab. Com 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. Ten minutes left in the trading session. Art cashin just walked by. Theres no bias to either the up or downside. Buyers and sellers have paired off. Everybody has a dance partner. Everybody is waiting on alcoa or waiting on something. The next catalyst what is it going to be . People are procrastinating. Joining us right now is tim from paradis and john manley wells fargo funds. Youre of the opinion youre among those who feel the fed will raise rates this year, maybe a couple times. I am. I think they backed themselves into a corner but it doesnt necessarily mean medium and long rates are heading higher. It could mean a flattening or inversion of the curve but i think they will. What is the market going to do with that . I think they have telegraphed everything. I dont think the market will do much of anything. I think the market is struggling because Earnings Growth is paltry dividend yields are kind of paltry and, you know, two out of the three legs arent so good. I think weve got some issues. John being as specific as you can, what are your favorite ways to play this market . First of all, i play europe because i think continental europe, the developed part of europe is changing. Its been cheap for a reason for three years. Those reasons are going away. Here in the u. S. I play tech i play financials. You play financials. I never thought id say that having survived smith barney but i think the fed will raise rates later in the year but theyre not going to tighten. If you get higher shortterm rates and theyre not trying to slow down the economy, thats not a bad environment for financials. Do you agree . I do. I think that the though i think from a domestic perspective, you know, i come from the credit side so high yield as a matter of fact. As a matter of fact, so we can talk about active credit. Were still finding plenty of thing to do with 7 and 8 yields. If youre able to do that i still see yield compression coming. Theres a demographic elephant in the room we havent discussed, and its just beginning. You know, as it relates to demand for income demand for yield. We just had a former board member of the philly fed tell us that high yield should that its crazy that these rates are so low. Youre telling us theyre about to go even lower. Yeah i think thats it. And i think youre talking about spread compression. And again its always the thing that you dont know. We know were not going to have a default cycle in the next couple years. You dont have the maturities out there for that. You dont have the games that have been played in past cycles. You dont have the overleveraging we saw in 06 and 07. I think people waiting for rates to go back up are going to have a long wait. Meanwhile, energy lower because were still pumping like mad. We are and the saudis are at this point. What does that do to fed policy down the road and the markets then if rates are going to be lower and inflation targets are not being hit . I think theyre going to be very cautious. I think when they said patient they meant be patient because theyre not patient anymore though. Theyre not impatient but theyre not patient. They may not be saying patient but i think they are. I think theyd much rather be late than early but they cant say that either and im not sure i should say it. I think whats going to happen is they want to make absolutely sure and they will raise rates only when they feel its not really tightening. To me that gives a plus to the markets somewhere down the road. All right guys. Good to see you both. Thank you for joining us today as we head toward the close. We have six minutes left here as we head toward the closing countdown and and turning our attention towards alcoa, ceo Klaus Kleinfeld will speak with me exclusively. You wont see him anywhere else on tv today. Thats before he speaks to the analysts. Youre watching cnbc, first in business worldwide. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. 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Add one a day 50 . Complete with key nutrients we may need. Plus it supports physical energy with b vitamins. One a day 50 all right. Three minutes to go here. Tell me its not about the fed. Tell me that. Look at this chart. Here is the dow today. We were up about 100 points on the open this morning until that comment from bill dudley that maybe june was still on the table, and then it fell out of bed. We were negative briefly. Sideways action until the fed minutes came out and it showed people were talking about possible of raising rates in june. Thats when we got this selloff but we did come back again and as bob pisani points out, were right back where we were before the fed minutes came out but thats another story. Oil, another mover today with the inventory numbers that came out showing were still pumping like mad and the price of oil down 5. 6 today on wti crude. Were right at 50. Now we talk about earnings and weve got alcoa coming out at the top of the hour. The expectation is for a profit of 26 cents a share. The stock right now is up 1. 75 and ceo Klaus Kleinfeld will be talking to kelly in a few minutes here bob. This will be the best First Quarter they had in years. They were at 11 cents for the First Quarter last year 9 cents before that. They had a good report last time. Were going to have a good yearly number if they keep this up, if they stay at 26 cents. Do you think the markets are worried about a june rate hike . Most movements in the market due to concerns about a june rate hike. Im in the camp they didnt have the poor payroll report, if i agree. That meeting was before we got that bad number. That was march 16th and 17th. These fed minutes would have been even more dovish had they had that number in their hand. Now, the reason people are concerned is there are a lot of people who think the nonfarm report was an outlier and that the numbers for the next two meetings next two reports will be better. So there is some reason to be concerned about a june rate hike. Ill a little worried about how quickly the market sort of kneejerk moved to the downside. That tells me theres real risk Going Forward if we get better than expected Economic Data and lets hope we do. Dont we want more people employed . Would you take a lower stock market, would you take a 5 to 10 lower stock market to have more jobs and more money in peoples pockets . I certainly would. Meantime a lot of deals, two big ones today, one in pharmaceutical, the other, of course, the oil deal with shell buying bg and the expectation is well see mergers down the road here. This is an indication this royal dutch deal that theres limited supply and ability to get at oil. The supply of oil is declining 5 a year. Its a perishable resource. They have to keep finding it. The best way to do it is to go to companies that already have access to it. Indeed. Thank you, bob. See you later. Going out with modest gains. Getting ready for the Earnings Report from alcoa. Also bed bath and beyond will be reporting. Well get something from the retail sector. Ceo Klaus Kleinfeld of alcoa giving us the first sense of how they did in the First Quarter on the second hour of the closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. And how are we finishing up the day in wall street . The dow turned negative at the end of the session but fought back into positive territory and is going out with a gain of 26 points just above that 17,900 mark. The s p 500 turning in a pretty good day. Up better than a quarter of 1 you have 5 points to 2081. The nasdaq in particular a Strong Performance up 40 appointments. But a lot of that has to do with the performance of mylan. We will talk about all this dealmaking in a moment. Joining me Mary Ann Bartels is here from Merrill Lynch. Larry kudlow and carol roth welcome one and all. Also with us for more on todays markets, fast money trader guy adami. Good to see you here too. Carol, lets sart with m a. This is your bailiwick. Lets try not to use the term m and a so much but dealmaking. Love to make the deals. Energy deals, pharma feels. Were really starting to see it. Weve been seeing it and were going to continue to see it kelly. The lending environment is very very favorable. The Interest Rates to raise debt are very very favorable. And, frankly, companies have nothing else to do with their money. Theyre either returning it back to shareholders or they can try to find some way to grow since they havent been able to do that organically. So were not going to see this stop at any time. I do wonder though with all this m a and with all the buybacks what that means for multiples. Since we have so many dollars that are chasing so few opportunities, will we see permanent multiple expansion based on the fact that there are few Higher Quality names. And will it be a disconnect from sort of the underlying economy . Is there any concern about that as this deal activity picks up . You know, ill say what i always say, the m and a market is the m and a market and im a free market guy, but be advised that the wave of m as means theyd rather buy than mr. Build, and there are large job losses associated. Its like the decapitalization of the American Economy and it does not necessarily show a great economic strength. I would probably argue it shows weakness rather than strength. I dont think it has a big affect on multiples. It might help multiples if you have fewer shares on the market. I myself in my heart i want to build new business startups. I just dont get that excited about m a. Mary ann . Weve been in the camp were going to see m a. Its taken a long time. People have been looking for m a for years and were starting to see it pick up. This morning we got it in energy. Energy prices are down and weve been talking about at Merrill Lynch that we would start to seeing consolidation and we started seeing that this morning. So were nowhere near the peaks in an m a cycle so we think its going to continue. Not only that the issue, as larry was saying with the consolidation and the quote unquote, synergies which does translate into some job losses that means the likelihood of seeing any wage growth for the average consumer, theres a little bit of pressure on that. Guy, i would love to hear your thoughts. Even though theyre not good on the individual company level, dont these kinds of big deals tend to happen when the economy is into a better period so theres kind of job creation thats happening elsewhere that offsets it . Kel, historically, yes, but im going to push back to larry. One of the unintended consequences in my opinion of the feds actions over the last six years is money is so cheap, companies dont have to build. They can buy because the cost of money is zero which has helped their stock prices. They can use cash to buy things. They can use their stock as a currency. So to your point, youre upset about it but the fed and the free markets that we long for are no longer free because theyre held hostage by a Federal Reserve that is far too immersed in what we do day to day. Look, i agree. Guy, theres no pushback here. I agree. Its cheap money. Here is my beef okay . Here is my beef. Briefly, well get to alcoa. We are allowing these companies to borrow in order to finance the takeover. Thats what they do mostly. And we are allowing them to borrow by giving them a Tax Deductions for the interest expense on the borrowing. Therefore, we create too much debt, not enough equity. I would take that deduction away while they lowered Corporate Tax rates. Hold that thought for a second. We have to get to this. Alcoa is out with its Quarterly Results and our Morgan Brennan has the numbers. Hi morgan. Thats right. So earnings for alcoa, 28 cents adjusted. That is a 2 cent beat. The street was looking for 26 cents. So a beat on the bottom line. In terms of revenue 5. 82 billion for the First Quarter. That was a little less than the street was expecting. The street was expects 5. 94 billion. In terms of forecast that sun changed. The stock is up in after hours about 1 . Back over to you. Morgan thank you so much. For more now on that Earnings Report, lets bring in alcoas chairman and ceo Klaus Kleinfeld. Klaus, welcome back. Good to see you. Hello, hello, kelly. Good to see you. Lets begin on the revenue side. Softer relative to expectations. Is that because of oil and gas activity . No really lets characterize the quarter. I think you see its a Strong Operational performance on the quarter and the transformation is really well on track. Looking at the revenues revenues year on year up 7 . Mainly driven by organic growth in the auto as well as in the air row sector. Thats whats happening. Then when you lift the hood on the profit side you see a record performance on the upstream side again super good First Quarter and you see a very, very good performance on the down stream side. Then you look at the transformation, you see integration well under way. Rti going in the right direction. And then we transform the upstream portfolio, make it more competitive, and i think this shines through very very nicely in this First Quarter. And klaus, im glad you brought up this point about the upstream business. As you have transformed this company into much more of an Industrial Company in so many of the sectors and products that everybody here is familiar with, a lot of people have said why keep that upstream business . You know why not spin it off, especially in a climate where spinoffs are so common . Whats your response to that . Well very simply kelly, i mean, we have an obligation from our shareholders to make the best value out of the portfolio that we have, you know . And when you look what we are doing, we are creating this twopronged value engines. On the one hand we are creating and well under way to create the multimaterials innovation powerhouse with the organic growth as well as the inorganic growth, and then we are improving the competitiveness of our commodities business and also this is working very very well with the changes that were making on that end, and you see it in the performance. So both of these things both of these value engines are helping to create the value. And i think you see it very very nicely in this quarter. Thats a point we see here as you mentioned, the alumina operating income more than doubling. Autos Strong Aerospace strong but i am wondering about oil and gas. I mean weve seen such a big decline in the oil price. Banner deals today as we see some consolidation. What can you tell us about that part of the business . Well on the oil and gas business, we also have oil and gas business and once the rti acquisition goes through, well even have a bigger business but its still relatively small to the other big businesses that we have. I mean, think about it almost 6 billion in the aerospace alone. So this is the Small Business and then you have to differentiate what is currently going on. Explore ration is going down a little bit but when it comes to exploitation, people are still investing in that and the direct impact of energy we see that most of our Energy Contracts are longterm contracts so were not that strongly affected. We do get some benefits from the Energy Reduction floating through but thats also not the major driver of our performance. The major driver of our performance is really a lot of the stuff that we do internally on the Innovative Growth side on the inorganic growth side and continuously performing to bring productivity. More than 200 million productivity. Good cash performance. You see it all there 00. Bach youre looked at as a barometer of the Global Demand what can you tell us about the Global Demand . I would say the World Economy looks like its in decent shape. Like last year probably even a little better than last year. If you look at the markets that we are in our end markets, you already mentioned aerospace very, very strong. We expect continues 9 to 10 growth for this year with a nineyear backlog. This is unbelievable. Automotive north america really really going strong. Commercial trucks and trailer really going strong. Building and construction coming back in the u. S. And even Industrial Gas turbines we see there is some uplift glolly. When you look at europe we always think europe is one entity, but its not. I mean, i talk to my folks over in germany and they are very very positive. You saw the recent numbers there on the Industrial Sentiment coming out and its not just the pmi in germany as well as in italy, take that. Its at an 11month high. Looking at spain, looking at uk good. There are places like france that are not so good so its a mixed bag but overall it looks like its not entirely bad. China is relatively stable. Theyre undergoing a lot of challenges but i dont belong in the camp that is entirely negative on china. I think they are going to do well, probably a little bit of lower growth rate but theyre going to do well. Im in general positive. Think about this, i mean we also upwardly revised our aluminum demand number for 2014 when we saw the actual numbers coming out. We saw demand growth for aluminum of 9 in the last year and we believe this demand growth is going to continue. We think that the growth in this year is going to be another 6. 5 . That gives you an indication not only about the attractiveness of the end markets but also how aluminum and other metals that we are in are covering this. We talked when we mentioned first rixson and rti, we talked about how we are expanding in the titanium space. Titanium has become the largest growing metal in the aerospace industry. So not only is it a decent economy but we are positioned in high Growth Markets with very, very attractive offerings. So in general i think we are on the right track. Klaus and the good thing is organically and inorganically things are on track. Thank you so much for being here. I know you have an analyst call to get to in a moment so well let you go. Did you hear how optimistic that was. Thats classic klaus. Did you absorb his optimism . Did you . I was stunned by it. Hes done a great job. A terrific ceo. His aggregate numbers were really very positive and even his comments about europe very positive. Let me just quickly get guy adamis reaction. The shares a little under pressure after hours on that revenue miss among other things. Would you buy alcoa here . Kel, i did klaus, too. I think he does a great job. Is he a terrific ceo . Respectfully how terrific is he . He talked about how Great Aerospace is. Were in the golden age of aerospace defense. If hes doing such a great job, why is the stock been mired at 14 effectively for the last four or five years . They should be crushing it and the stock tells you theyre not. Thats a point. The outperformance of defense despite some of the sequestered programs weve seen bears keeping in mind. Catch more of guy coming up with the fast money crew at 5 00. They will be talking to a ceo who received 45 million bucks to treat ebola. We have breaking news on zynga. Ari levy is here with the details. Zyngas founder, the guy who started the company in 2007 took it through a very highprofile ipo in 2011 and watched as the stock tanked hes back to run the company. The man who has been running the Company Since 2013 is out. All parties involved say it was an amicable move. This was necessary for zynga to get some of the founder enthusiasm back into the company as it goes into the next generation of games. The stock hasnt budged since the ceo took over and pincus owns 64 of the voting shares and 10 of the stock. Hes back to run the ship. All right. Ari, thank you very much. With that update on zynga earnings season is officially under way. Will we get an upside surprise from Corporate America . Well look at that and what it means for the stock market in just a moment. And later well speak to a reporter who was in the courtroom when the guilty verdict in the Boston Marathon bombing was handed down. Were back in two. Youre not like your character cookie in real life. Dont ask questions you wont like the answers to, little boy. Welcome back. We just spoke with Klaus Kleinfeld about his First Quarter results. Theres a lot of buzz on the street. The overall numbers will be the worst in years. How bad will the quarter be . Joining us is lindsey bell. Welcome. Thanks for having me. I know people will say we shouldnt say that as goes alcoa so goes the rest of the season but they did just have a revenue miss and shares are a little weaker. Does it tell you anything . Revenues are supposed to be down 1. 1 total earnings are supposed to be down 3. 1 for the total quarter, overall for the s p 500 five sectors will have negative growth. We havent seen any of since the Third Quarter of 2009 so its a pretty bleak picture out there. Now, typically corporations beat by 300 basis points. Even if we get that Earnings Growth, its only going to be about flat for the quarter which isnt that remarkable. What would it be less energy . Less energy . We would be up 5. 9 . See, i think thats not a small point and secondly i would just say look at domestic nonfinancial earnings which i call core profits. They did very well in q4. They may outperform in q1. Lindsey, in terms of what the market is expecting, i kind of feel like there is an expectation that its not going to be a great quarter. So how much are they going to be looking towards future guidance versus what is actually reported in the First Quarter that we know were going to hear weather, were going to hear dollar, hear oil. Are investors going to be looking ahead to what the future guidance looks like . Absolutely. Guidance is going to be very very important, especially with the s p trading at 17. 5 times. Investors are looking past the first half of the year. Its going to be right now expectations are for negative Earnings Growth but the second half of the year is going to theyre going to need some more positive sentiment. You need the consumer to turn around, Economic Data to improve, Better Weather in the spring to carry the economy and corporate profits. The most interesting thing right now is simply the fact that earnings are down while the economy is not necessarily in recession. Its pretty unusual for that to happen, but typically its the economy that matters more in terms of this ending the cycle in terms of the stock market rally. Well, i always say earnings are the most important, and, yes, theyre going to look bleak, but i looked at earnings estimate revithss, and they have cut their numbers the worst since 2011. It doesnt even go back to 09. Its possible now weve priced in the worst between the dollar and oil where Companies Might even have the ability to surprise to the upside based on these cut numbers. So were actually still very constructive at Merrill Lynch on the market because of this. I love this. I love this. Can i just make one point . Nonstandard, nontypical point, okay . A higher dollar and a Lower Energy Price and the two are related will boost real incomes for consumers and businesses. Now, that may not show up right away. I dont disagree with your forecast, but im saying for the second half of the year and going on into 2016 the real income effect from a positive oil shock may be surprisingly good. Did the consumer earnings names the consumer earnings sectors look relatively stronger . For the First Quarter Consumer Discretionary is supposed to have within the top three best growth 7. 3 . Its a little bit concerning because autos is partially leading that which has been great. You heard klaus speak about that within alcoas earnings but the retailers are supposed to come in second place with growth of about 11 . A lot of the specialty retailers are expecting midteens to low 20 Earnings Growth yearoveryear from last year. A little bit concerned about that for the First Quarter and might lead to your point, carol, management teams to be a little cautious going into Second Quarter guidance there. But its going to certainly be a sector that we need to watch because investors are banking on the consumer in the second half of the year. Investors, all of us it always comes back to the consumer. One little one, financial companies. Lets just call them banks. Cni loans are rising at double digit rate. 15 last three months same about last 12 months. Is it possible were underestimating bank profits . No. Actually bank of america is driving bank profits because they have a yearoveryear easy comparison. They had a legal settlement last year. The financials Revenue Growth is going to be about flat which is very poor when earnings are expected to grow 11 . You see the differential in between that. The other banks, excluding bank of america, citi and jpmorgan which will do well because of easier comparisons, are going to have tougher comparisons. So excluding those three, earnings are going to be down. So the answer is larry, no. Thats a long answer im sorry. Larry no. I tried. Im always looking for a hook. Thats all. Lindsey bell of s p capital iq. Thank you so much. Coming up, jurors find the Boston Marathon bombing suspect guilty on all 30 counts. What was the mood inside the courtroom . We will speak to a reporter who was there when we come right back. 2550 [ 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. 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Gov business welcome back. Boston bomber Dzhokhar Tsarnaev found guilty on all 30 counts. Jay gray has more details. Reporter this jury of seven women, five men deliberated just under 12 hours over the last couple days before reaching that verdict which now triggers the penalty phase in this case. There was not a word to be heard in the courtroom other than the verdict being announced. 30 times guilty, every count that he faced in this trial. No surprise that there were guilty verdicts here. I think everyone expected that. The question was when and what is next. And thats what his defense team has been working toward all along. Youll remember when they opened this trial, they said to the jury he did it. So guilt was almost assured here. Theyve been fighting all along to try and spare Dzhokhar Tsarnaev from the Death Penalty. The argument thats echoed from this defense team to the jury has been that he was pulled into this plot by his older brother, tamerlan who was killed after a shootout with police. They will expand on that during the penalty phase where we will see more evidence more testimony on both sides of this case. The same jury will hear that evidence, listen to the testimony, and make the ultimate decision on whether Dzhokhar Tsarnaev lives, spends the right of his life in jail or is put to death. That phase of the trial expected to last a little over two weeks. There will be one break for sure we know and thats when this years Boston Marathon is run. That is the latest live here in boston. Kelly, back to you. A poignant point. Thank you, jay. For more were joined by eric levinson, a reporter at boston. Com. He was in the courtroom for the majority of tsarnaevs trial. Welcome. Again, what was the reaction from dzhokhar when this verdict was read . I was not in the courtroom today, but over the course of the trial hes mostly sat back. He stood up during the readings today according to reporters there and my coworkers there, but he mostly is hes 21 years old nout. Now. Hes got really shaggy hair and he sits back in his chair and only sort of pays attention. He hasnt been the most involved in the trial but he does talk to his lawyers. He writes things on pieces of paper often, so not incredibly engaged but hes still there and still present. And, eric is it the case that we wont be hearing from jurors because this is still closed until they come up with their penalty . Right. Jurors and federal prosecutors actually are not allowed to comment because theres still a whole other section of the trial to go. They will go into the sentencing phase, they will talk about mitigating factors and aggravating factors and judge the fate of his future, his death or life is in the jurys hands. Eric, did the judge give the jury any guidelines any thoughts, any hints . Well, he says dont tell anyone dont talk to anyone about this. He made a humorous comment last week where he said dont even talk to yourself in the mirror about it. But otherwise its mostly theyre going to start over i believe monday theyll start the next part of the trial and basically a second trial. Theres new evidence theres new the prosecutors present new things and they have to prove that a certain aggravating factor, that the crimes were heinous, that they were depraved depraved. These will make the jury more likely to give a Death Penalty. The defense will say he was 19 at that time his brother was 26. He was the driving force. Those are mitigating factors. The jury weighs those two until the second part starts and then its quiet until then. Eric is it possible dzhokhar himself could take the stand . I believe its possible, but i would be very surprised. There wasnt the defense only called four witnesses in the first part of the trial. They didnt seem very interested in calling him up. I would be very surprised. Im not sure if its possible or not though. I would believe it is. It also sounds like his defense attorney is the same woman who has gotten life in prison charges and other past cases, high profile cases where the Death Penalty was up for grabs. Do you think that or perhaps, you know, these massachusetts something culturally might keep people from sentencing him to the Death Penalty . We spoke with one guy earlier whose wife was at mile 25 1 2 of the marathon when this happened asked him if he felt Death Penalty would serve justice in this case and he thought that would be letting him off too easy. Yeah well so this is a federal trial in massachusetts. So the jury has all been death qualified is what the word is. Basically they have all said theyre open to using the Death Penalty. So even though boston at large, recent poll found a majority of boston and massachusetts is not in favor of the Death Penalty here, its kind of irrelevant to this case. Unless hes 24 hour isolation, hes going to get killed in prison. I mean thats whats going to happen here. So i think this is a very interesting but theyre going to have to lock him up in isolation. Someone is going to try to kill him. Last word, eric . If he were to get life in prison, we would go to the high security prison 23 hours in isolation and 1 hour you get outside but youre not allowed to interact people. Youre not in close quarters with anyone. So, yeah its the same prison where the unabomber is the same prison where a lot of the most highprofile criminals in American History are kept. Eric thank you very much. Also were getting a statement by the u. S. Attorney carmen ortiz saying were gratified the jurys verdict and thank everyone who played a role in the trial for their hard work. Were focused on the work that remains to be done because the trial is ongoing. It would not be appropriate for me to say more at this time. Thats the statement from the u. S. Attorney carmen ortiz. Thanks, everybody. Time for a cnbc news update with our courtney reagan. Here is whats happening at this hour. Russian president Vladimir Putin signing cooperation documents with greek Prime Minister in moscow. Putin said tsipras did not ask for Financial Aid but hinted russia could lift its food embargo from greece. And how about this . 75yearold Jack Nicklaus who has had many memorable moments at Augusta National added one more to the history books when he made a hole in one during the par 3 contest. His tee shot on the 4th hole flew just beyond the flag and spun back right into the cup. Fellow players stopped their play to join in on the cheering. Now, no video for the next story but nasas chief scientist says humanity is on the verge of discovering alien life. Ellen said and i quote, i think were going to have strong indications of life beyond earth within a decade and were going to have definitive evidence within 20 to 30 years. Yikes. Thats the cnbc news update for this hour. Kelly, back to you. Court, thank you. I feel like i have been hearing that for 20 to 30 years. Some little microbe. I feel like i have already discovered them. We have a lot of high tax, high spend aliens so im not surprised at this. Sorry. Weve heard a lot about Massive University endowments. One college is putting all of its market returns to work by giving every student free tuition. The president of Barea College joins us next. Later, well talk about the future of the Media Industry when were joined by superstar hollywood and Television Producer brian grazer. Thats coming up on the closing bell. All of the problems of the world could be settled easily if men were only willing to think. All of the problems of the world all of the inefficiencies could be settled easily all of the opportunities could be realized if we were only willing to see patterns in data we could never see before. To design a machine that thinks like we do. Track epidemics. Predict breakdowns before they occur. To become smarter every day. If men women machines were only willing to think. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. 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. Welcome back. Berea college in kentucky has a clos eye on wall street and thats because its endoument of more than 1 billion is all investment in the stock market and that huge chunk of change along with grants and scholarships covers tuition for all of its 1600 undergrads. Bereas plan works against the grain of rising tuition and mounting student debt. Here with us is the president of Berea College, lyle beroffs. Its a pleasure to be on your show. This sprung into the news during the financial crisis when the stock market was down and people wondered if that put your entire plan at risk. Tell us about the darkest moment there and why you never changed course and how youre reaping the benefits today. Well that was a scary moment but we take the longterm view in the stock market and never want to sell at the bottom, of course. We did have to put in place various Circuit Breakers and reduce our staff a little bit, but we were not forced to reduce the number of students we were serving and we were gratified that the markets came back fairly expeditiously. Were you able to now add positions or increase your funding of tuition . Did you have to shake off pressure . I mean, i cant imagine the kind of outside pressure there might have been on you to abandon your strategy and do something more conservative. It was scary. There were a variety of Desperate Measures considered, but at the end of the day good sense prevailed, and in the recovery since because we had reduced our staffing a little bit, weve been able to add positions back and in ways that meet our needs a little better. I guess we were not wasting the crisis as rahm emanuel once said. Carol . Lyle its carol roth. I wonder if you had ever considered alternative investments. A lot of endowments and Pension Funds and the like have a portion of their endowments in private equity and other types of alternative assets. Has that ever been a philosophy for a thought for you . We actually do have small parts of our endowment in private equity. We have some hedge funds. Its not allin in just plain old equities and were about an 80 20 ratio, and so we have about 20 in either bonds or cash at any given moment so were not entirely in the market. Mr. Roweloff when i hear the story, you grant a lot of tuition money, you know im reminded of a lot of people who incorrectly say the only people that benefit from the stock market is the top 1 . Well, that cant be the case. Youre helping kids who are probably not millionaires just like the stock market helps people in pension fund unions firemen, cops and teachers, so this is an example of where a rising stock market pretty much helps everybody, does it not . Well, thats a wonderful point. Berea college couldnt do what it does without the strength of the American Economy and the financial system. All those gifts that have built an endowment would be basically meaningless or at least they couldnt be leveraged at all if we were not in a situation where markets produce the kind of returns that they do. Of that 1. 1 billion, only 500 million was actually given to us in the form of gifts. The rest is all the result of careful stewardship and not spending all the returns, reinvesting some of them. So we really have figured out how to leverage the generosity of the American Public and the strength of the American Economy in order to provide an education to students who otherwise wouldnt be able to go to college. And a strongly faithbased institution as well. Its a fascinating story. Thank you so much for being here. Congratulations on what youre doing. Thanks so much. It was a pleasure. The president of Berea College in kentucky. Zyngas shares are reopening. Theyre plunging after it was announced the ceo would be replaced by founder pincus. Shares down 8 after hours. The apple watch making it into the hands of reviewers today. No shock but its created quite a buzz on cnbc. Com. And our hot list today. Up next, well get the low down. Theres no mind like the curious mind. One of the most curious belongs to brian grazer. Its led to him meeting people from all walks of life and now hes sharing what he learned in a new book. Brian grazer live from post 9, still to come. Well the fed, oil, and apple, those three things together can only mean its time for the hot list. And here is the sites managing editor allen wastler. It was pretty serious with our readers. They went after the three serious subjects. First the fed, we had the fed minutes at 2 00 and we had a terrific traffic spike around then with people diving in trying to figure out where theyre at and, of course, there were divided opinion. They wanted to drop patient but should we hike rates in june do it in september, wait until next year . People just all over that story. Now, oil, we always get regular traffic on our oil site but today because of the over 6 drop in oil, people just d answer even after the market closed people diving in to check it out. We had the inventory issues so kind of an unusual day. Our little old oil market write was one of the big ones. Finally apple watch, the gift that keeps on giving if youre a website manager like myself. Today we did a wrap up of all the reviews out there. The consensus seems to be very cool. Its so slick and nice. Good to have. But not necessary to have. So people were eating up that story as well. Thats my oed ode. The oil quotes and the apple quotes neck and neck today. Really . That was such a huge move in oil. It was. No surprise i suppose. Allen, thank you. Take care. Move over moby dick superstar hollywood producer brian grazers next big movie is a whale of a tale. Brian grazer will join us when we come back. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. Depositing checks at the atm and transferring funds on the mobile app. Technology designed for you. So you can easily master the way you bank. 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Tdd 18003452550 tdd 18003452550 open a schwab account and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 call 18776703357. Tdd 18003452550 or visit schwab. Com trading. Tdd 18003452550 schwab trading services. Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 my next guest is one of hollywoods biggest producers known for films such as apollo 13 and arrested development and empire. Hes brian grazer and hes ut with a new book, a curious mind. Welcome. Welcome. Pleasure to have you here. Apparently you say curious a lot. I follow your twitter. I get haassssled for how much i say im curious on air. The reason i wrote the book is that i do believe in the power of curiosity and that it is something we all have is coorousity but it is a super power that can enlarge and i will enlarge your life and give you opportunities you wouldnt have ordinarily have had. So im curious there you go. You cant escape the word now. This is also a book about story telling. Given the proliferation of different ways we consume media today, where are the best stories being told right now . The best in terms of platforms . Well like cable tv and netflix and of course, empire is on fox. Well get to that. Netflix is pretty great. Netflix is pretty great and they pioneered something that was pretty extraordinary and its working. And other people are sort of following its course. So probably over the top is something that everybody is going to be into but ultimately it is the story itself and it can appear on any platform as long as the story itself is defining and interesting enough. I just want to say we were talking off stage and probably my favorite alltime movie was produced edd by you, sincinderella man. When you did that movie, were you thinking that this is something that americans need to see . Was this some curiosity because its a rags to riches story. We dont see much of that anymore. A couple things, one is i do love rags to riches stories. I like Horatio Alger type stories, underdog type stories. Many of the movies i make fall within that category. So its something i like a lot. I think movies about self worth and how we struggle to create self worth and identity and respect is kind of essential and i like story that is are patriotic. So the jim braddock story sort of lived within that category. You say i like project was a soul. And thats terrific. Patriotic stories. Thats wonderful to hear. I do. I liked american sniper. I like many movies that are outside of the films that i have personally produced. I want to note for everybody the irony of you sitting down here. You took your Company Public in the 90s and it was as you describe it in the book an uncomfortable experience that culminating with you no longer being and this overlaps with the story line. You mentioned empire. We had talking about empire. Ask how realistic the ipo was. Heres what he had to say. Youve got to know what youre going to do with the money so you can tell the shareholders im going to raise this money and grow the value of your shares. It seemed to be a little bit like why take a Company Public unless you use for for acquisition capital. And i think thats probably where it sort of falls in terps of being realistic. All of that incorporated in why taking a Company Public have to do with your own experience . Thats very funny. It had very little to do with my own experience. However, when we built that into our plot my trial and error experience of going public was very relevant to the writers in building it into will you cineslyons going public. I want to ask you i will go back to this for one second. The point of cookie coming out of prison 17 years later, the stakes are magnified because hes going public. The minute you go public your life is so fragile. We see this probably down here on the floor. Well said. Im sorry to interrupt you. Not at all. I wanted to talk about conversations you might have. Advice you may have for those curious in nature but dont have the stature of being brian grazer. If your an entrepreneur how do you get someone to say yes to have those meaningful conversations. It might be very telling in terms of how you got in to meet people. Well, you have to be persuasive. And, you know my First Experience is i was a law clerk. My job was to deliver papers to celebrities, William Peter playedy who wrote the ex sift warren beatty. The director of the exorcist. You would say can i drop off the papers to this person themselves. And the next thing you know youre having coffee. Exactly. Im having an hour and a half tea with bl a ady. Or with warren beatty. I was able to figure on out how leverage worked in that system. Thats an underdog story. I love it. Im definitely an underdog. So you have empire out there. Its a huge hit. Where is the great curiosity right now . America has not been in a great mood the last couple of years for one reason or another. As you look around in your brilliant mind, what do you see . Where are you going . Im not claire sropbt and cant make any prognostications. I think everyone is focused on the speed and power, or to wrap their arms around things and push it into the bigger part of our planet. But something has to drive all of that. There has got to be some substance. From my view its always a story. Apple has a story. Movies and television of course have stories. This floor here has a story. Theres always a story driving something. A legacy is a story. So there is some substance that has to be scaleable. So ultimately you have to have Great Stories that you believe in that youre completely impervious to rejection, and your belief system is in alignment with the emotional connection of what that story is supposed to do. We have to leave it there. Final question we like to ask people coming through here like yourself whats the biggest money mistake you ever made . Maybe going public. Isnt that telling. Brian grazer thank you so much for being here. I would say best of luck. You dont need it. Well get Larry Kudlows take on that. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. New york state is reinventing how we do business by leading the way on tax cuts. We cut the rates on personal income taxes. We enacted the lowest Corporate Tax rate since 1968. We eliminated the income tax on manufacturers altogether. With startupny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. All to grow our economy and create jobs. See how new york can give your business the opportunity to grow at ny. Gov business [ male announcer ] some come here to build something smarter. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. Welcome back. Remiss with larry kudlow talking about the 2016 president ial race. It is already heating up. Rand paul officially entering the fray this week. Whats it going to mean . Rand paul will shake the race up a little bit but not a lot in my opinion. I dont think hes having the impact for example, that ted cruz had in his brilliant announcement speech. Personally, i know rand paul. I think hes good to Domestic Taxes and free markets. I think hes not a tall good on foreign policy. And this is going to be a National Security election. So i dont think hes going to go anywhere. This business about first term senators with no Management Experience running the country, im not directly it at rand paul only. But its not a model im happy with. I wonder who he is directing that at . This is going to be a great race good bench. A lot of good governors. Were hearing a lot of good things. Im not knocking him. Im just saying there are pluses and minuses. The thought the most interesting thing was the way he was trying to raise money. And he had this story thats clearly trying to a appeal to the younger folks. He has an nsa spy cam, beats headphones with a rand paul skin on him. Nothing says hiphop like rand paul. Thats what the kids are doing these days. He is prying to bring a different voter into the mix. Is it about National Security larry, or is it going back to the John Oliver Edward Snowden conversation on sunday is there a group that will respond to more things that rand paul stands for that have to do with privacy, for example . I hear this. Im not convinced of it. I think they are just as worried about being safe and free as anybody else. Mr. Paul flipflopped on many defense issues. What people are going to ask, and i dont know the answer to this yet, who is it that we want, this country wants, man or woman, who is it we want to sit down at the table with Vladimir Putin or the chairman of the Chinese Communist party . Who do we want . I think thats going to be a bigger question in this election than it has been since 1980. And i have to take it back his bedside manner is not campaign friendly. I dont care how good he is at running a country. Still the American People want people who are good at campaigning. And well let you stay out of this one. Thank you. We wont ask who you are putting on the ballot for 2016. Thats it for closing bell. Fast money in just a moment. 7 today the and getting a grant for the ebola vaccine. We talk to them in an exclusive. Were looking new york city time swraeur. Square. Heres whats coming up on fast track tonight. The unofficial start to earnings season is here. Alcoa shares falling after missing revenue hear from the ceo said about the quarter coming up. Downgrading apple. Making the move today. But most people are focusing on all the reviews of the apple watch. Whether to buy the stock before the preorders start coming in. Zynga announcing its founder is coming back to the helm. Th