Transcripts For CNBC Closing Bell 20150515

Outbreak . We speak to the companys ceo, coming up. Also lyft you know, lyft are raising another 150 million right now, the majority coming from carl icahn. Coming up well discuss how much this cash and icahns name can help lyft compete with uber. More of those puns are awaiting us. The story today, bill that has everybody talking from Silicon Valley to back here on wall street. What are carl icahns intentions and what does it signal about the prospects for these two in the markets . Exactly. The dow, well start with the blue chips there, up about 3 points. The s p roughly flat. Remember yesterday with the close of 2121. That was a new alltime high for the index. The dow is still 30 points away from where it needs to be. 18,288 is the number we need to keep an eye out for. 33 points shy at the moment. The nasdaq slightly under pressure and still has a few points to go as well if it wants a new high water mark. This is the third friday of the month, therefore, it is expiration day as well. We could get volatility as we head toward the close of trade. Lets talk about a lot of things in our closing bell exchange. Joining us, Peter Anderson from Congress Wealth management here at the new york stock exchange. Mike balkan and Rick Santelli is in chicago as well. Volatility has been mostly peter, in the treasury markets. I mean you know tremendous increase on the long end of the curve there. What do you make of that . Thats what weve been talking a lot about this week. What does that do to the equity market do you think . I love fridays. I think the volatility does take a little bit of a respite going into the weekend but your point is well taken. I think were still trying to digest when Interest Rates are going to rise. I know weve talked about that for a long period of time now. But the thing thats positive about this right now, i think, is that were going so slow that were now starting to digest the real impact of a slight raise in Interest Rates. I think its going to be okay. As long as its done say, a quarter percentage point maybe the end of this year maybe the beginning of next year. People are finally starting to say i think we can live with this. The socalled bond refugees might actually come back into the market when they start seeing that rates will be rising just a little bit but not too much. Make the case for small caps here, especially as we head into a rising rate environment. Is this typically a better period for them. When rates go up small cap stocks, the whole market will take a hit. The mark set starting to digest that. I think thats what the fed wants. History has shown that after a 09 120, 180day period after small caps rise Interest Rates do well. Thats a leading indicator the economy is probably starting to improve. Youre talking about the rising tide in the treasury market. Youve talked about the trading range weve been lifting as well. Now traders are wondering whether or not the s p with that record yesterday is going to break out of its own trading range here. I mean are we starting to see a new phase for the markets do you think . Or are we making too much of it right now . I think some of the very strange tendencies of the fixed income market really for the last six weeks are evidence of that. The range in equities you could argue, yes, maybe we stretched the upside a bit. But lets take a macro view. Lets forget the micro details. The economy is slowing. Whether anybody wants to be objective and admit that thats their issue. We had a historic buildup in inventories last year that helped propel the second and Third Quarter numbers. It fell flat. You can see it in the ism. Retail sales, durable goods, everything seems to say the dynamics have pulled the activity forward. In that arena, i would think it would make for equities to question how much they could stretch through the top of the range, forgetting the argument about significant downside. This isnt rocket science. Its more of an art than a science. But my feeling is the wild card is that were going to on any given day, have a tendency to have a more wild range to higher yields and lower prices. We are at a twoweek low on tenyearyearolds. I think the phase of readjustment might be temporarily over which means the other side of the mountain is a range. 2. 17 is the key to Pay Attention to on closing yields. Mike you were saying rates would be going higher stocks would do better if the economy is performing better. Which is it . Rates, we all agree, rates is probably going up. The question is the timing of when theyll go up. I think the market is digesting that now. I think rick may be right that its growing somewhat. But not a lot. Were seeing it in our companys earnings little bit of growth tepid growth nothing after the charts and all. One thing weve been watching this week, for a while now, is oil. Its locking in its first ever nine consecutive week winning streak. Jackie deangelis is stepping from the nymex to give us the lowdown on that. Pretty remarkable, thats in terms of the data that we from thompson reuters. We havent seen a streak like this since theyve been keeping track in the 80s. Weve seen eight straight weeks of gains but not nine. We did close a little bit lower, 59. 69. We were down 19 cents on the day. We rebounded a little bit after those baker hughes recount numbers came out. We did lose more oil rigs eight of them. Were down 871 since last year thats more than 50 decline. These numbers tend to be supportive of oil prices. Theres still a lot of people out there, Analysts Investors alike saying not so fast. We are going to probably see the price stabilization here or potentially an increase as we go into the summer driving season. They think theres more downside ahead when that demand falls off. That could be as soon as the fall. Back to you. Thats a point, jackie. Peter, its so interesting. Weve had this massive drop in oil prices at least until the last rebound there. Consumer confidence this morning, it took a step back. Again, it was disappointing. Again, this goes back to the question, which way is this economy moving . Well theres another way you can look at oil prices too. Im a big fan of looking at other data sources to get some insight. If you look at the high yield market for instance, last august, that market was flashing sell sell on any kind of oilrelated company. Weve run that screen again and now what its saying is maybe not a red flashing light but yellow, its almost green. Thats another source of data that tells you, maybe oil really does have legs under it and there will be strength going into the summer. Maybe the consumer is just a little bit fickle. Were all kind of confused trying to figure out where we are in this. Sure. If you look at nontraditional data and try to meld that together, maybe that will give you more insight such as the high yield market. We heard as we head toward the close theres selling pressure on two intrasensitive sectors, utilities and reits. Somewhere somebody believes sectors are going higher unlike the small caps where rising rates are going to hurt. I would agree with that. You dont want to be in those stocks if rates are going higher. Im a small cap guy. We love the small cap market. We think over the long run, we think small caps will be a great place to be. You mentioned a couple consumer plays here imax and six flags. Are you talking about a Global Consumer or do you see basis in the u. S. . We love imax because we think not only do they have a Great International play but theres domestic opportunities, too. Imax, you think about them here in the u. S. Its fully saturated. China is growing like crazy, japan, korea, thats exciting also. We have a terrific movie slate here. Probably the next two or three years is the best slate of movies weve seen from imax. The third thing is they have new Laser Technology which will allow them to take their digital platform and move it into traation dl athletetra traditional theaters. Its a company doing all the right things. Six flags, same thing. Theyre the largest regional operator of theme parks in the world. Theyre starting to open parks in dubai and china. Its a licensing development. Theyre letting operators over there do it. Theyre setting up atms is simply what theyre doing. Whats your single best idea. Hsni one of our top holding. Merger and equity activity. Doing market search on that one at home. Yes weve done a lot of Market Research on that at home. Do i urge you to look more deeply into that. There is a lot of behind the scenes going on maneuvering between those two companies. And weve already talked. You dont have to respond to this. Weve already talked in the past, recent activity that weve seen more mergers because of the anticipation of higher rates. The cost of doing business is going to go up. You want to get in before it gets more expensive. Buy now before its more expensive. What a concept. Gentlemen, good to see you all. Thanks, everybody. Your thoughts on todays Market Action. 50 minutes to go until the close here. Trying to hold on to yesterdays gains. Were a half point above yesterdays level, the dow adding 4 and the nasdaq slightly negative on the session. Netflix, a big winner on the final trading day of the week. Dominic chu will tell us whats driving the media disrupter and the rest of the days movers when we come back. And getting that 100 million boost from billionaire investor carl icahn. Find out how lyft plans to put all that capital to work. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. A verdict in the penalty phase of the Boston Marathon bombing case is starting to be read right now in the courtroom. Sue herera has breaking news for us. Indeed bill. The jury deliberated about 15 hours. Right now whats happening in the court is the defense and Dzhokhar Tsarnaev are standing. The judge is reading the verdict. There are a number of key questions, however that they have to go through before they get to the key and final question, which is will he be sentenced to life in prison or will he be sentenced to death . They have to go through each one of these questions and list how the jury found on each one of those questions. For example, the jury has found that the government has proven at least one of the factors necessary to permit consideration of the Death Penalty. The clerk is reading this. The judge is reading it. Were going to monitor it and as soon as they work their way through some of these key questions and there are a number of them we will get right back to you. Once again, it is that last question that will decide Dzhokhar Tsarnaevs fate. Bill, back to you. Thats many minutes away. Lets get you back to the markets here. Its been a volatile week in the treasuries. Prime example would be the tenyear note. This is the yield. We hit a high in the 2. 30 about 2. 32 i think it was. Were at 2. 14 today. Just in that fiveday period weve seen an 18 to 20 basis point move here. Huge moves and this is the story of the week. He indicated some of the selling pressure on the rate sensitive names today. Dominic chu is coraling some of the big movers of the day for us. There is that sense of churning. Lets talk about the individual names making news. Netflix soaring in trading over the 600 mark for the first time ever. Reports are that the video streaming site is planning to enter chinas online video market. Those shares up by 5 . Dillards, the big retailer did report a slight drop in First Quarter profits yesterday as Merchandise Sales fell anden convenientries rose. Down by about 8 today. Flying tiger, a home goods store, now, again flying higher rather flying tiger has officially. Im sorry. Thats the end of my look here. Again, back over to you guys. Youre welcome to join us on that if you want. I want to talk about flying high tiger. Why not. Flying tiger, a home goods store known primarily in europe and asia. Its landed in the u. S. They offer clever products at affordable prices. The founder is with us here getting ready for tomorrows grand opening. Were glad youre here with us in the meantime. Im sure youre distracted and thinking about whats going on over there to get ready. Why come to the u. S. Now . Well, i think the u. S. Is very, very big market its very interesting. We want to see how how a danish store will do in the states. We have taken a completely danish store, put it on broadway, on 21st street. We want to see what happens we think it will work really well. Lets see. The stuff is really cheap. Its this ikea but at a price point of 5 to 10. People are excited because its colorful and catchy. The flip side youre in a lot of other countries now. What took you so long to come to the u. S. . Well i think first you look at the markets. Theres also logistics and so on. The u. S. Mark set quite different than european. We want to see how it works now in the states but we have now 450 stores in europe that are working well. Now its time to bring it to the u. S. Do you have to tailor products to the United States or can you sell the same thing . We sell exactly the same. We can want to take a danish lifestyle, denmark is one of the happiest countries in the world. We want to give that and share that with people in the states which is colorful which is design and very easy to get. We want to see how that works. Not terribly long ago on his weekly program, john oliver drew attention to some of the fast fashion concepts that are cheap, that have high turnover and that lead to poor Business Practices around the world all to give u. S. Consumers a lower price point. Hes quite popular with millennials and the younger audience and quite popular here in new york city. Theres potentially a risk that this whole moment for what youre doing in your industry these price points high turnover has passed. Are you concerned that the customers want to spend a little bit more but to get one item that will last them for quite a while . I think that is exactly what were doing. Were finding a new way in doing so. When we ask a customer how do they feel going into tiger, they say normally when i go into a Discount Store i feel very poor. When i go into tiger, i feel like a millionaire. I can afford it all. Its a new type of shop. Were taking discount in a completely new way, good quality, good design character, the danish lifestyle. Thats what we want to do. Im sure youre on your knees hoping and begging the dollar to continue to go higher. We also buy products where we pay the dollar. Its even. It would make things cheaper erer here for people coming to the United States. Where are these products made . 07 is made in china. With our design. 30 is food quality. Leonard, flying tiger, coming to the United States. It opens tomorrow morning here in new york city. We wish you luck. Anything that puts a skip in the step of folks at 21st and broadway i am in favor of. Like they need that an extra bonus there. 40 minutes left in the training session. Before we get to expiration as well. There could be volatility in price and volume. Right now, the dow is virtually unchanged at this hour. The dow transports have been on a slippery slope, gaining ground today. But someone expects them to resume their downward slide. They debate the bear and bull cases for the transport, next. And lyft getting a lift. A 100 million infusion from billionaire investor carl icahn. How concerned should rival uber be about that . The pros will talk about that coming up on closing bell. Stay tuned. Weve talked about many of the major averages hitting record highs in the last couple of months. Different story for the transports theyve had quite the pattern since the year began. Look at the volatility for 2015 so far. While its all over the place, so far, net net, the index is down 5 or more this year. One of our next guests says something just isnt right with this sector and he thinks things could get worse for the transportation stocks. Lets brawl this important one out. Carl werth,. We know its the precondition that sets up weakness, which this in the 13 14 period. Its the best performing theme of the market with the exception of biotech. Virtually doubles. Its been rolling over since friday, november 28th. Theres nothing random about that day. That is the day that opec said were not going to cut. Were going to see this through to the end. Ever since, the transports come dominated by rails and certain truckers and the airlines which should be benefiting have stalled. The presumption is that this big bullish to bearish reversal this big topping out formation has more to run. Gary im guessing youre with hodges the name hodges to me says value. You perhaps see value with the decline in a lot of these transportation stocks, yes . Bill youre right. We think the airlines are poised to move higher. And theyve cut their capacity. Theyve consolidated. They have pricing power. Operating margins are improving. We believe this oil will stay lower for longer. So we think thats going to provide a big tail wind for the airlines. We love american at the hodges fund. We like southwest airlines. We think their earnings and cash flow will drive higher and move these stocks up that will reverse the downward trend and the transportation averages. Gary dont you think the average is already telling you which direction matters more as Oil Prices Keep dropping . Would you feel more comfortable if oil stabilized. We think it will stabilize in that 55 to 65 range. We think that will be of benefit to the airlines. They made great money when oil was 100 a barrel. We think theyll make a lot more this year. Theyre all giving cash back to shareholders returning cash in the way of dividends. Theyve got great share buy backs and we just think this is a buying opportunity. And that looking out over the next 12 months the airlines will be a lot higher. Carter youve got some stocks that you would avoid. Are you shorting these guys . Youre looking at night transportation, old dominion freight and Kansas City Southern in the rail sector. Are these shorts for you . Absolutely. These are heretofore great winners and lost their way and look to be rolling over in a sinister way, in the sense they are unable to attract capital. All equities are enjoying a lot of buying interest. So those sort of topping out formations are hard to reverse. One thing that is important about the Dow Jones Industrial average, its a price weighted index. You have big stocks like unp and fedex up at 102 a share, which collectively amount to more than all the airlines in the index. So airlines do not look as bad as this. I think thats important to say. They cannot influence the index the way carter. Yes, please. Just real quick before we go weve seen oil prices up 30 off their lows. If the argument is true why are we seeing more strength in the transport index in correlation with that . Thats right. You would have to think it has to be one, if oil is back up airlines should be falling. Nothing is coming to life. The airlines arent bouncing with the move up nor are the rails or the truckers. Its suspicious activity and its been going on now for six months and it started with a fundamental data point, friday november 28th opecs meeting. Something to keep an eye on. The dow theorists are keeping an eye on those, too. Thank you for joining us today. Thank you. Time for a cnbc news update with sue herera. And we are breaking news watch right now. There is a verdict in the penalty phase of the trial of Boston Marathon bomber Dzhokhar Tsarnaev. It is being read as we speak. We still dont know what the tsarnaev verdict will be whether hes been sentenced to life in prison or death. As soon as thats announced well have that for you. Its snowing in the San Bernardino mountains, up to 6 inches fell as part of a storm system that swept through droughtstricken california despite the precipitation, though, its done little to ease the water woes in that state. The ncaa mens Basketball Rules Committee recommended reducing the shot clock from 35 to 30 seconds as a way of speeding up the game thats reached historic lows in terms of scoring. The shot clock was last reduced for the 199394 season from 45 seconds to 35 seconds. The wnba suspended Brittney Griner and Glory Johnson after being arrested an charges of assault and Disorderly Conduct last month. The two League Allstars were married last week. Thats your news update at this hour. Im going to turn it back to you. Court is working rapidly through these questions before we get to whether he gets life in prison or death. Ill be back in just a few moments probably with that verdict. Back to you. Very good sue. Thank you very much. Meantime 30 minutes left in the trading session. The dow is down a point. Waiting for expiration to happen here as well. See what kind of bias we get, the up side or down side. Im thinking about the 45second shot clock. Can you imagine that today . No. Only 20 years ago. Really slow down the game. It would. You think carl icahn pumps 100 million into lyft. I think some of our producers would like to put a 45second shot clock on interviews. Also ahead, El Pollo Loco shares in the dog house. Were going back to sue herera . We have that verdict, apparently. Back to sue. Yes, indeed we do. Dzhokhar tsarnaev has been sentenced to death at this point. This is lethal injection. The jurys sentencing, Dzhokhar Tsarnaev, the convicted Boston Marathon bomber to death by lethal injection. Bill and kelly, as we were going through these jury questions, there was only one question upon which they were not unanimous. And i find that very striking. The question basically asked whether or not in committing acting of violence and terrorism did he make statements suggesting that others would be justified in committing acts of violence and terrorism against the United States as well . That was the only count where the jury was not unanimous. When the jury was asked whether or not he was basically influenced by his brother tamerlan, three of the jurors only three of the jurors agreed that he was influenced by his brother tamerlan who as you know was killed. 15 hours were deliberated by the jury. They have sentenced him to death by lethal injection at this point. Were going to be going through all of these questions, bill and kelly and trying to discern what the jury was thinking when they were talking about these questions. They were difficult questions. And it was very complicated, because in reading through these questions, some of the questions only pertain to certain capital counts. They really had to work diligently and make sure that the question they were considering relayed to the specific capital count. There was no reaction. Were getting color from the court right now. They have concluded the penalty phase of u. S. Versus Dzhokhar Tsarnaev. He has been sentenced to death by lethal injection. This formally concludes, the judge says the penalty phase of this particular trial. Tsarnaev will remain in custody. He will be formally sentenced by the judge at a later date in months ahead. By law, vicks will be allowed to make impact statements at that hearing. Tsarnaev himself will also be given the opportunity to speak at that time. Theres not a date set for that at this point. It will be some day in the months ahead. He will remain in custody, obviously, ahead of that particular hearing. You can see that there is security in front of the courthouse. That is the courthouse in Downtown Boston where not only media but press have gathered. We expect attorneys from both sides to make statements. You might recall that the defense attorney judy clarke shes quite renown she admitted and kind of shocked people in the first day of the trial by admitting that Dzhokhar Tsarnaev did commit the crime. The defenses sole purpose in this was to get that out of the way and literally focus on whether or not they could avoid the Death Penalty. We now know they have not succeeded in that particular case. He will be sentenced to death by lethal injection. Kelly, bill back to you. All right, sue, thank you very much. We want to bring in criminal defense lawyer Kent Schaeffer who has represented three defendants facing the Death Penalty. Kent clearly the cornerstone as sue mentioned of judy clarkes defense was not whether he committed the crime. He clearly did, but whether he was under the undue influence of his older brother tamerlan. As sue just mentioned, only three of the jurors agreed with that. The rest of them did not. Was that a good defense to mount or were they just unsuccessful in what was a wellintentioned defense motion. I think that was the only defense that a responsible lawyer could urge. He could deny the act in which case not only there was overwhelming evidence of guilt but a jury would see that he was clearly unremorseful and, you know is trying to deny responsibility for which punishment would have been certain. At least this way, if shes going for mitigation right from the beginning. You have to understand the context in which this occurred and what was going through his mind at the time. Looking at some of the precedence here. Weve only seen a couple cases in the last couple of decades where the federal authorities have put somebody to death. How long do you think it will be before this happens . You know realistically we could be talking about ten years. And i think that was part of judy clarkes argument is that at least if you put this guy in super max for the rest of his life punishment is certain. If you go if you sentence him to death and youre looking at direct appeals, appeals to the Supreme Court. Youre looking at writs of habeas corpus. These things take several years each. If hes ever put to death we coulden talking about ten years from now. There could be the reversal of the guilt or innocence or punishment stage and the whole thing starts over again. Should the defense have fought harder for a change of venue . We know what the impact was on the city of boston in all of this. It is an unforgettable time for the citizens of boston all they went through, in the weeks and months in the aftermath of that two years ago. Was it possible for him to get a fail trial in that sense . You know looking back on it in hindsight you might say it certainly wouldnt have hurt to do it. The truth is when you get a change of venue, you go to the closest location where you could go and still receive get a jury thats not been tainted by publicity. He would have ended up in trial in springfield or some jurisdiction thats fairly close and the evidence would have been the same there. People are going to be outraged by mass murders and terrorism and all the things that were present in this case. So i dont think it would have been any different anywhere you tried the case. Even if its on the west coast. What about this sentence death by lethal injection which came under a lot of controversy after that oklahoma case a couple of years ago. Should we expect any changes . Yes, i think that thats something thats currently being litigated now, as a manorner in which death is carried out. Weve seen cruel and unusual arguments being made because the drugs that are being used to put people to death cause a lot of unnecessary pain. Theyre often not effective. Drug companies are refusing to provide them any more. Death by lethal injection is something thats going to be hitting the Supreme Court any day. And people are going to of course will have to decide whether or not thats a manner of inflicting death that is unnecessarily painful and, therefore, unconstitutional. Its okay to shoot somebody or hang them or put them in a gas chamber but you dont want to give them a drug that will hurt them prior to the time they die. As this goes out for a couple more goes on for a couple more years as well Public Attitudes have shifted. In some cases, the public thinks a life sentence without parole is more of a punishment for some people. Could that affect the outcome longer term for this case or Going Forward . It will be hard in this case. That was part of judy clarkes argument. If you put somebody in super max where theyre virtually in a coffin 23 hours a day underground and they will never come up or have human contact with others, thats worse than death. A jury rejected that. Although nowadays juries typically buy that and they accept it. It is true. Whether that will have impact on a court of appeals is doubtful. They decide legal issues. But if the case does get reversed or some sort of legal issue, mainly under the governments thinking, they may go for death a second time. We have Dzhokhar Tsarnaev getting the Death Penalty today from that jury in boston. Kent thanks for joining us. Appreciate it very much. And with 20 minutes left the dow is up a point. Well have more closing bell after this. [ 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. My feet felt so heavy 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 here at td ameritrade, they love innovating. And apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. Female announcer the mattress price wars are on at sleep train we challenged the manufacturers to offer even lower prices. Now its posturepedic vs. Beautyrest with big savings of up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Plus, free same day delivery setup, and removal of your old set. When brands compete, you save mattress price wars are on now at sleep train. Your ticket to a better nights sleep welcome back. Lets get back to sue herera for more on the breaking story out of boston. The verdict on the Boston Marathon trial. Bill, thank you very much. Once the verdict was read the judge addresses the jury. And he just did that. He just poled the jury. He has to make sure each one of them agrees that that verdict form is correct. He just did that. They all agree unanimously that the verdict form is correct. The jurors sentenced tsarnaev to death on multiple counts. They only had to agree on one count and he would have been subject to either life in prison or death. But death, they had to degree unanimously on at least one count. They convicted him on that on count 4, 5, with 9, 10, 14 and 15. So at this point the judge is addressing the jurors. He says that the inconvenience of all of the jurors serving on the jury has been considerable. He called them a model for future juries. At that point, multiple jurors have broken down and are crying. Including the forewoman. Theres a lot of emotion in that courtroom right now. Once again, there is now a waiting period where he will remain incarcerated until the sentence is formally given by the judge. And at that point he can make statements and not the judge but tsarnaev and also the victims families can make statements. Were still getting color, bill. Ill keep you posted. Back to you guys. All right. We hear that often, sue, that even though you agree that the Death Penalty was appropriate in this case its not an easy decision to make sentencing somebody to death. Thats for sure. Tears by the forewoman as sue just told us there. Well be back with more closing bell right after this. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Slight gains here today. The nasdaq down by 6 points bill. After a volatile week a quiet finish. A shares of lyft get an uplift thanks to a cash infusion by carl icahn. The famed investor leading a round of 150 million in new funding for lyft with 100 million of that cash coming from icahn enterprises. In a statement, icahn said ride sharing is poised to become a fundamental component of our transportation infrastructure. Lyft says it will use the funding to deepen its foot print in u. S. Lyft is operating in 59 cities across the country. Currently lyfts valuation is still at 2. 5 billion which pales in comparison to its biggest rival uber. Ubers latest reported funding round could bring the startup to a valuation of 50 billion or more, making it the richest startup in the world. It makes icahn and andreasen horowitz, investors in the same company. An andreasen says all it fair in love war and ride sharing. Money knows no border. They all come together there. Thats right. Thank you, kate very much. What does 100 million and the icahn name for lyft in the long run . Joining us, andrew romans. Thanks for joining us today. What do you make of this investment by carl icahn . I think its interesting transaction. It sends a signal in the market that in the past venture capitalists would invest and hand the baton to the public mark wet an ipo. When you see carl icahn joining us 680 Million Financing round it sends a signal that companies are staying private longer. Theyre raising the capital they need to execute and there may even be liquidity for fonders or early investors. I was almost going to ask if this means well see a lyft ipo before perhaps the end of the year. I dont know. I mean the key comment on that is that companies would have had to ipo in the past to do what lyft is doing or ubers doing. When you see this happening with investors like carl icahn, they dont really need to ipo. They have the money they need. Theyre able to execute and there might be liquidity for founders or early investors. Ipo is the only way out. Icahn said he saw value there relative to the valuation for uber. He sees growth in the industry but he saw value in this particular company right . Yes. I think so. I think we dont have the details but i guess that means if you look at the multiples of sales to valuation in uber he found he was getting a bargain with the multiples of where the business is with lyft. Do you see a valuation like what were seeing on uber placed on lyft anytime soon . Its hard to say. I think when sometimes its in the details, too. We know valuation but we dont know all the terms. Sometimes with an investment of 1. 5 billion into uber they might have negotiated that the first money out is that 1. 5 billion. So that 1. 5 billion is a fraction of the exit value. So theyre actually not so bothered what the valuation is. Valuation goes up if you give a preference to the new investor that he gets all his money out first. And thats been lifting valuations and a lot of growth stage deals we see in the valley. Thats an important point, andrew im glad you raised it. Well leave it right there for the time being. Andrew romans joining us. Hes a partner at rubicon venture capital, bill. Thanks for having me. Lyft one of the big winners in the financial world. Take a look at El Pollo Loco. Its one of the big losers today. It beat earnings when it announced but fell sharply after the bell. After its guidance disappointed investors. For more on this drop and whats in store for the second quarter, including how the Company Plans to handle the bird flu outbreak, were joined in a cnbc exclusive El Pollo Loco ceo steve sather. Welcome, liz. Sorry. Welcome, kelly. Lets clarify. You say the guidance was out there in the market last night. Perhaps it was the sales growth coming in light that spooked people. Yes. I think first of all i think we had a good quarter. As you mentioned we exceeded on revenue. We exceeded on earnings per share and we had sales of 5. 1 . We feel very good about our business. We did, again, reaffirm our fullyear eps guidance and fullyear samestore sales that being said i think as we discussed in the call a little bit of softness we saw in q2 as we were testing multiple proteins. And that concludes next week as we head into what we think will be very popular, our new chicken salad. Hand carved chicken salads which starts next thursday. I think exciting on top of that is weve got as well our 5 under 500 line which has been very popular will include the hand carved chicken salads. Its funny you bring that up. I was going to ask, so many of the fast casual and fast food chains, theres this bleeding everybodys going after the same mechanism. Theyre going after breakfast. Theyre all introducing the salads theyre all going to coffee. Are they going to play the same game by innovating constantly . I dont think its playing the same game for us. As you know our positioning is what we call qsr plus. We have high quality food like youd find in fast casuals like panera or chipotle. We bring that at the speed, convenience and value. Weve been giving you great healthy chicken for years and were just doing that now across our menu. If you look at the things weve produced like quesadillas and the new salads that are coming out. Weve had those on our menu. We think were a leader in this positioning. You guys put up 5. 1 sales growth in the quarter that just ended. Yes. Shake shack did almost 12 . How are you going to get shacklike growth . Well first of all, weve had 15 consecutive quarters of positive samestore sales growth. So weve had the very strong multiple year comp sales growth and 5. 1 is certainly above our its actually above the guidance that weve given of 3 to 5 . Which we reaffirmed yesterday, both on samestore sales and our earnings per share guidance. We feel very strong about the longterm positioning of our concept and really were focused now on new unit growth which we talked about yesterday on the call in our texas growth. Right. Steve sather of El Pollo Loco thank you were thanks for joining us. Thank you very much. Have a great weekend. Coming up on the closing countdown, the dow is up 7. Didnt get to mention it here on air, art cashin was pointing out it was 600 million to buy, was the buy is there but he feels like its paring off quickly here. Back with the closing countdown, right after this. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Welcome back. Heading into the last three minutes of trade. Its a friday. Lets show you what happened this week. The markets. Im showing you the dow. It was the s p that made an alltime high yesterday. And any positive close will be another new alltime high. The dow has about 22 23 points to go before it hits an alltime high. Its in striking range. But this is what happened as we got selloff early this week and then sideways action before the rally yesterday. Weve gone sideways essentially today. Tenyear yield, much more volatility. We piqued early in the week. The reversal of yields for stock prices then it just went south. We had a high yield of 2. 32 2. 33, i think it was. Now were at 2. 14 on that tenyear yield. Had a good tenyear auction by the way this week as well. Quickly on the price of oil, crude oil, we were going for a ninth straight week of gains, weekly gains, didnt happen. Slight pullup back on the close there but for the week the price of oil was up 7. 2 . Were back below 60 a barrel. Michael guyad is with us and Courtney Reagan joins us as well. Where are you putting your money right now . Are equities going to be down or what do you think is happening. Short term we have a couple things that are positive. You had a yield spike. Emerging markets havent sold off. Periods high volatility have been weak in terms of historical leadership. Thats positive short term. Right now we are in large caps. Thats where the momentum still is. You do have i think, intermediate term problems. I just came back from california receiving the 2015 named wagner award, coauthor of peace, lumber underperforms gold. Volatility rises, you might have a correction. Lumber has been weak consistent with all this other Economic Data because the demand for housing, building is still there. You should not see something noncyclical do better than something that is cyclical, lumber. That may suggest later on in a few months we may see volatility in equities. Retail sales have not been there this year. They havent. Next week we get earnings from walmart, target home depot, lowes. Name a retailer, theyre probably reporting next week. Especially whats going to happen with the strengthening dollar with some of the retailers, the brands that play internationally. Thats a big thing to watch. Do you see the dollar continuing higher at some point . Well Inflation Expectations have risen alongside oil. Thats why youre seeing the dollar weakness. Good luck to yellen even though she probably should. Well see when the first rate increase comes. Good to see you again. Courtney, have a good weekend. Were going out with minor gains here. Looks like weve got another record for the s p 500 index. And well see what happens next week. Have a good weekend, everybody. Heres the second hour of the closing bell now with kelly evans and company. Welcome to the closing bell, everybody. Im kelly evans. For the most part holding on to the gains. Lets take a look at how were finishing up the session with the s p 500 adding about a point and a half. That should be good enough for a new closing high for this index. A 2,122 and change. The dow adding change there. 20 points off its record high. The nasdaq down actually underperformer of the day, giving up 2. 5 points. Just above that 5050 level. Sharon epperson robert frank and David Seaburg is riding along with the Market Action today. Good to see you as well. Robert first to you. In a way, weve had so many different headlines from different Asset Classes. Stocks today werent moving that much. Weve had big moves in the tenyear, a record week for art prices. What do you think were learning here . You nailed it. Across the board asset class inflation. The real cpi that should should be looking at is the christys price index. They had a billion dollars in sales in 48 hours, including 180 million picasso, the most expensive painting ever sold. It just reminds us that all of these Asset Classes are driven by the supply of money, not fundamentals. Is it driven by demand this is Nouriel Roubini earlier this week said these record high art prices it doesnt economically mean anything. Its money laundering. What should we take as a conclusion from that . The art market is not the stock market. It is the tip of the spear when you talk about the Asset Classes being driven by a massive amount of liquidity that by the way, is more and more concentrated into a Smaller Group of people. Right. That includes stocks. That includes bonds. That includes all financial assets. There just arent that many things to do with it. Sharon, what do you think the lessons are . Looking outside of the people with that very small group that still want to be invested in the market. As we see the slow grind higher and higher though it is incremental, it is positive. When you look at talking to technical analysts look at where were going, were not breaking new lows and were not were getting to new highs slowly. That may continue. We may have pullbacks. We may have a major pullback. Its a major reason to stay in the market. I wonder if well start to get people shifting money from fixed income to equities which is what were seeing in the market today. When we talked to art cashin the selling pressure was on those rateeits and the rate sensitive areas, utilities. As robert touched on every asset class if youre somebody like me looks expensive. That if youre an investor is a problem. A lot of people myself included not commodities. Im sitting on 40 cash. Not commodities. Thats a relatively small piece of the overall asset puzzle. If youre an investor and you look at bonds, they look expensive. Its hard to look at the stock market and say its a great deal trading at 10 or 11 times earnings. Its hard to look at a 180 million picasso and say, yeah that guy got a great deal. He got it for under 200. By the same token, dont you feel like you know because of all that cash thats in and out of the market that youre missing something . I dont, no i dont feel i actually dont feel like im missing something. But then again, you know its easy for me not to be missing something because i rode the stock market back up. Right, right. If on the other hand i was sitting on the outside looking in and missed that move, i was sitting around going, maybe ill take a little more profit. Right. Thats a smart mindset. If youve seen significant gains, this is the time that maybe you want to take the profits and reallocate them elsewhere. Where am i going to find the best deals . Am i going to get a deal anywhere . You should crowd source the purchase of a picasso. Im sure you could get enough suckers out there to put up 180 million. We learned the biggest flows, youd be shocked if i said to you where do you think most of the money has gone in terms of any asset class this year . The answer is fixed income. Yes. It remains so popular. People see that as the same trade, still. This question of how are we supposed to gauge exactly how strong this economy is . Yes, we have people pouring money into art but at the same time the Consumer Confidence number this morning wasnt great. Some of the retail earnings have been disappointing at best. Were going to get more of them next week. Where are you watching . Look you said it clearly. The disappointment in the economic side has been you know really painful. I look at it and say, look at the negative surprises weve seen this year thus far this year in 15. Its across the board. I said to myself, the markets at alltime highs, how is it sustainable . Theres a lot of complacency out there. Investors are sitting back watching the market grind higher. Theyre actually afraid. Its getting to the point theyre afraid theyll miss a move much higher. When they start to jump in and push this market high you may see a spike up but watch out below. Ill tell you what theres no protection thats been put in place. So a pullback could be very significant. When are we going to get that . David seaburg youre in touch with a lot of investors day in and day out. Whos putting the money into stocks today . Well ill tell you what the volumes on the institutional side are down dramatically. You know some firms are struggling because volumes are so weak. People are complacent, theyre holding on to positions, not turning over portfolios like they were in the past. Feeling that the market can continue to rise here. Were at the point, though, where, you know unless we start to see a real uptick top line growth in earnings look buybacks arent going to be there forever. Right. We have to make sure were starting to see real earnings that will produce growth that allow these companies to justify the multiples. I dont see it. You have a very weird setup here, which is the market certainly equity markets have traded in a narrow range. You have a lot of money sloshing around. You get weird things like the bond market over the last few weeks has been volatile. The 30year yield has pulled back a lot. Right. The yield was over 2. 3 just on tuesday. Yes. There was consensus trade. Long european bonds. That trade came off. There was a massive sell. I understand how that took place. We talked a couple days about that reversing or reverting back. Thats what were seeing. I look at equities and say, look at the conviction right . When you look at the options market, the demand for upside policy isnt there. We talk about that all the time. You were going to say, robert . Following up on evans point, if it is driven by the money sloshing around and it is separate from fundamentals and the economy, what would stop it . The Central Banks around the world, it is global now, dont show signs of dramatic tightening anytime soon. Even if the fed acts in september through december. All that money sloshing around will keep sloshing around. The trigger today was mario draghi came out this morning basically said were never ending qe. Im just going to keep this thing going for as long as possible. All of a sudden people thought german bunds which were a terrible value all week are all of a sudden a good deal because the Central Banks are buying them. The European Data the gdp data earlier this week was better than expected. They thought maybe they start to taper bond buying. Hes saying dont worry. The same conversation is now taking place over there. Its taking place over there and causing investors to look. If theyre not looking here for domestic equities theyre looking international, at europe. Theyre saying this is where im going to put my money. Were not sure whats going to happen with the u. S. Stock market, maybe its best to take those profits and put them in other countries. Yes david, before we let you go one name next week everybody should be watching . I say foot locker. Theyre reporting on friday. I think nike will be a massive beneficiary if foot locker puts up good numbers. 85 of their sales are nike products. Its a readthrough into nike and the strength were seeing in the brand. Love it. Thank you, sir. Thanks for joining us this afternoon. David seaburg. More coming up with david and the rest of the crew on fast money at 5 00. Two biotech and pharma names could be having make or break moments next week as well. Well tell you which stocks you should be watching on symptom therapy at 5 00. How did a fake filing make it into the s. E. C. s database and stay there . Starbucks customers steaming mad after criminals reportedly stole their money through the coffee chains mobile Payment System. Coming up well hear from one victim and find out how starbucks is trying to resolve this attack. Youre watching cnbc, first in business worldwide. 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. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount le fatout from the avon takeover hoax still reverberating on wall street. What we learned here is that its a lot easier to get access to the s. E. C. s edgar database than any of us thought. Ive been talking to experts over the past few days and they say all you need to do is fill out a twopage document called the s. E. C. I. D. Form. You send that in and they send you back with the security codes on this system. This is what happened with this fake Company Filing a t. O. Form once they got access to the s. E. C. s system. That is a tender offer allegedly for avan, avon is tagged in the system. Everybody who subscribes to avon information in the s. E. C. System sees that filing including the wire services. It goes out to the whole wide world. Nobody of it was true. And according to all the sores ive been talking to, the s. E. C. Doesnt check whether these didnt check the accuracy of the information. The s. E. C. Says under federal securities laws, filers are responsible for the truthfulness of their filings and subject to Enforcement Actions when they are false or misleading. The s. E. C. Is saying its not their job to tell whether or not documents filed on edgar is accurate. Its their job to simply set up a Public Disclosure system for the documents to go out. A lot of questions now being raised about whether thats the right way to do business at the s. E. C. Sure, ayman. The fbi reportedly looking into it as web. Eamon javers in washington. Were joined by the former inspect general of the securities and exchange commission. David, ill start with you. Whats your reaction . Is this a known situation that its so easy to tap the s. E. C. s data database . I think its astonishing, frankly. People understand its not a difficult or complicated process to put information on. Theres an assumption that the s. E. C. Is doing something, that theyre looking at it in some way and not passing on the information completely. So its of great concern that you know potentially somebody could use a government database in order to perpetrate fraud. You seem pretty upset by this, too. Especially by the fact the filing remains on the site. Its up now. Its one thing to complain about the fact they dont have security in the front gates. Its another thing to say theyre not ringing the alarm once they know the criminal is inside. As eamon just said this is a faulty document. The primary mission isnt enforcement. Its primary mission is Investor Protection. I dont see how it protects investors to have a known false document sitting on its website at the top of avons filing chart. Right. We know yesterday when this was first released over the news wire, this false bid avon shifted notably on this. Notably. And so much more than even people had expected it would. Because it has been beaten down so much over the last several years. What this highlights is yes, im one who definitely believes Investor Protection should be the role of the s. E. C. And in many areas for Retail Investors theyre doing a great job. Heres evidence that even if you go to the place where youre supposed to go to get more information, the information that you may seek is incorrect and its still there. It would seem that this is a significant kind of loophole. When it comes to matters like this im a caveat emtore person. If people are trading it around beginning on rumors and bad information. If its rumors and bad information. This is a rumor and bad information. You didnt necessarily know that at the time. It went up on the website. My point is nobody is validating the information. I dont see what stops anybody from just putting up whatever they want. I have a question for david. I know he was involved in the madoff case which the s. E. C. Is sort of now compensating for by saying were cracking down on insider trader issues. Are they the keystone cops of the Financial Services industry . Have they gotten better or is this a sign that theyre really not good at what theyre supposed to do. They have gotten better. The bureaucracy, this is how it works, you know. Its funny because when you look at the user manual it looks like the s. E. C. Is doing something to authenticate or to validate this information and theyre not. The problem is if the s. E. C. Starts spending time validating this information, then youre going to have months of delays before the information is put on the public site. And so then you wont have disclosure to investors. On the other hand, as was said earlier, theres no excuse for not taking it down now. They certainly should take things down if theres even a suspicion that theyre false. Exactly. You can take it down pending a further review and investigation. Dont leave it up there. Depending on what the fbi finds, could the s. E. C. Then be forced to do anything . What kind of how would they Work Together in terms of rectifying the situation for the future . Well i mean clearly somebody inside the s. E. C. Should look at this issue. In terms of the fbi, i think the focus is on who provided this information, obviously its a crime to provide false information like that whether there was manipulation in trading that was done as a result. That could be the potential. In terms of the s. E. C. It needs to look inward and make sure they have a process in place that works much better than this. Dan, a last word to you. I wonder if theres any way to get action on this is for it to happen a bunch more times . Whats interest is it did happen two years ago three years ago, sorry, with Rocky Mountain chocolate company. A takeover bid from an equally suspicious bidder. That time they stole from gctr. That document from three years ago, which was found to be fraudulent at the time thats still on the s. E. C. s website today. It might have to happen dozens more times for them to care. Well leave it right there. David cotts and dan primac. Starbucks using the coffee chains mobile app to pay are reportedly getting a lot more than a latte. Customers say hackers are stealing money through those customer accounts. And one victim that lost more than 500 bucks from this. And highend motor coaches, perfect for tailgating with your friends. The companys founder is here to discuss crowdpowered travel on the closing bell. 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. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Next time you get in line for a Starbucks Coffee you might want to reconsider your purchase method. We reached out to starbucks for comment and we were directed to the Starbucks Online security account web page which says news reports that the starbucks mobile app has been hacked are false. Joining us now is one of the viblgs s victims of the hack. Jean, lets start with you. Tell us what happened. It happened to me about six months ago, back in december. I was driving down the freeway with my starbucks app notifying me i was making 50 payments to starbucks. It notifies me about different payments. I pulled over. I found out that about 11 purchases had been made with my Payment Information from my starbucks account and sent to some random email. How much jean have you lost altogether because of this . I have lost about 550. Have you received communication to starbucks . Have you brought it to their attention or tried . I tried to contact starbucks just like you guys i got directed to the customer pass word information. Eventually i contacted the company that runs their Payment Services and the only thing they told me was to that they have nothing to do with that part. Joe lumas, your reaction to both this particular, what appears to be a hack and starbucks denial . That really comes down to whos at fault and what the cause of the issue is. Is it bad password management . Secondly i put starbucks at fault because they should have multilevel authentication. If you log into certain accounts you get a text message, the twofactor way of doing business. Were seeing companies not still adopt to this way of doing business. Theres more responsibility here than to protect your customers. They have to heighten their security a little bit. Drop box has been an issue in the past. About 16 Million People move this mobile Payment System for starbucks. Its convenient. A lot of people want this easy access to be able to get their coffee. How should they be protecting themselves . What should they put in place to protect their money and identity . Passward management is the first steps to protecting yourself. Download free applications. Theres last pass one pass all these different applications that help you develop strong passward pass passwords. Were talking about random numbers and characters more than eight or ten characters long. Were never going to remember Something Like that. Thats why these password politics are out there to protect us. The second line of defense is making sure youre not clicking on suspicious emails so you dont have an infection on your computer or mobile device with malware. Make a request to starbucks and these other organizations saying will you turn on two factor authentication . If the users demand it the corporations will follow. Thats exactly it. Jean you work in i. T. Correct. It was a secure password that i didnt use anywhere else. Im almost certain all my computers are secure. My phone is secure. Theres nothing really that would lead me to lose that password on my own. How can it be that sharon says that how many 16 million accounts and we have poor jean here. Am i missing something here . If this was a sustained if this was a systemic problem, causing aggravation to hundreds or thousands of starbucks customers, you would think they would make the tradeoff on the twostep identification and they would go that way. It sounds to me like theyre making a commercial decision not to do it. Have you gotten money back . Yes. I got my money back because i was protected by my paypal account, not because of starbucks. Its not only me that this happened to. I know other customers that have went through the exact same situation. Jean, thanks for joining us. Sorry about that and glad paypal was able to make you whole. More on the mobile payment space tonight with the nbc disrupter klarna. It will launch service in the u. S. You dont want to miss that. Time few for a cnbc news update with sue herera. Above the marathon bomber Dzhokhar Tsarnaev has been sentenced to death by lethal injection for his role in the 2013 terror attack in boston. The federal jury in massachusetts reached that decision after more than 14 hours of deliberations over three days. He was convicted last month of all 30 federal charges against him. 17 of which carried the possibility of the Death Penalty. The youngest victim of tuesdays deadly amtrak crash was remembered today. The funeral for u. S. Naval Academy Justin zemser. A message to employees saying 1,450 employees will be laid off with another 1,400 furloughed. The layoff totals 39 of its work force. End of an era. Toys r us is closing the only physical f. A. O. Schwarz location on fifth avenue in new york city. It will take place on july 15th. This after earlier reports the toy store was considering a move because of high rent in new york city. That is your cnbc news update. Back to you, kelly. I cant believe theyre closing, sue. I know. Thats a favorite place at the holidays for kids to go. Its one of the most Expensive Properties in new york city in terms of retail space. Maybe they didnt buy enough toys. Its your fault. Its your fault. A buddy of mine was ceo. I feel like ive bought enough toys that toys r us should be just fine. And the rigging settlement with ubs, a settlement after ubs vialed the deal. Is the government unfairly targeting ubs here . Well talk about that next. Who needs a Backyard Barbecue when you can get a burger hot dog and chips on one bun . Thats what crammed into carl jurys american burger. And you can share it with one click. Wow. How do you find the time to do all this . Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you need. Td ameritrade. You got this. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Welcome back. Four major banks, barclays, jpmorgan and royal bank of scotland are expected to plead guilty in a farreaching case of rigging currencies. The deal is now being thrown out and ubs will have to plead guilty just like the others. Is this crackdown long overdue or is it way overdoing it . Gentlemen, welcome to you both. Mark, do you think that is unfair to ubs in this case . I think its unfair to the ubs shareholders kelly. Anytime weve talked about criminal prosecutions of corporate entities and not real people, its the shareholders that pay the price. Its the shareholders money that gets used to pay the government considered by the corporations as part of their legal reserves and life goes on. Its too much too late and its going too far. Andrew . Cry me a river. We have banks that have been violates in the federal securities laws. Its not shoddy mortgages, its libor, money laundering, a whole bunch of stuff that worked after 2008. Think about the savings and loan crisis. Think about arthur anderson. After they were indicted we had no issues with respect to companies shredding documents. It works. Indict them. That will clear the problem up. They put them out of business. Other accounting firms. Look at sarbanes oxley. Once we started throwing guys like that in prison, its cleaned up other companies. The examples you just cited are individuals. Dennis kozlowski spent a lot of time in jail. These prosecutions, these fines im complaining about, no one is individually responsible but the shareholders wind up paying the bryce. How does that make sense . Explain to me where the government settled with ubs and now theyre coming back and giving them criminal prosecution. How is that possible . Not a double jeopardy issue with corporations . Its a technical issue, bonn bob. What happened with ubs, they were not allowed to commit any quote, unquote, further u. S. Crimes. I see. They selfdisclosed additional infractions and the Justice Department said within excuse me you werent supposed to do this again. You dont get a deferred prosecution agreement. I understand that im not advocating giving banks and wall street a pass. What im asking for is the realization that main street through the teachers Pension Funds and the carpenters this is going to pay the government. You can separate the two, though. Theres absolutely no reason why you cant indict both. Hold on. The company is made up of individuals. The department of justice definitely deserves blame for not also bringing criminal indictments against people engaged in wrongdoing. The two arent mutually exclusive. You can do both. Until you start doing both youll continue to have these problems. I agree with you on that point. The problem is there is not going to be the equivalent obligation on the part of banks and culture wall street culture in general to change the way they do things while things can be accounted for as a legal reserve. The street doesnt care. The stocks dont move dramatically. Its remarkable that it continue. Theres a lot of Collateral Damage that we dont realize. Institutional investors cannot invest with institutions that has criminal charges against it. Maybe they shouldnt be. To what extent should we be crying a river for shareholders . There are consequences the shareholders that have nothing do do to do these institutions compete against each other for capital, ultimately the capital should go to the best sturs of it. I agree with you completely. Main street has little say by and large in where their money is invested. Theyre invested in pension savings. Weve tried everything else. Lets indict the banks, lets consider indicting individuals and see if this clears it up. Nothing else has worked yet. I want to see personal accountability, andrew. Until that changes, making the shareholders pay the tab makes no sense to me whatsoever. Well leave it there, gentlemen. The second leg in the race for horse racings triple crown is tomorrow. While the hers are warming up for the freakness, racing fans are poring over programs and post positions. 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But for this one race we might see 150 million. Most of that money, almost all of that money is the dumb money. When theres that much dumb money coming into a race bet on by people who dont know anything about horse racing there are opportunities to take advantage. I got this information from the founder of derbygames. Com. They have all the data. The first thing they said is dont bet on any grey horse. A lot of people think if you bet on the grey horses you can see them, theyre more visually appealing. But theyre not any faster. Thats the first mistake to avoid. The next thing to avoid, are the horses in post number 7. A lot of people think 7 is a lucky number. Theyll just say put 100 on 7. Because 7 is lucky, you dont want to bet on that. You might think these are silly. Im telling you, these are the things that matter the data says to avoid this. You want to avoid the longest shot. A horse at 301 if its the worse horse in the race its probably a 501 or a 1001 horse. On the flip side look at the other extreme, the biggest favorite, in this case american pharaoh. When theres a favorite that big, dont put your money there either. Theres a lot of other people, the dumb money, that want to get that easy win. My final advice if you really wanted to bet on american pharaoh and do it despite the advice not to bet on him, bet on him to place, not win. Theres a free option there. You can get the money whether he finishes first or second. You have an opportunity to make some m money. Check it all out at cnbc. Com. Im the smart money, eric. Thats what we all think. Thats what you all think. You are the smart money. Youre not going to wager a cent. No, no you want to wager on these good trades. If you take the placement. These are positive expected value trades. These have the opportunity to make money over the long term in a statistically significant way. You should be a stock market promoter. Eric chemi back at headquarters. If youre looking for a way to get to the preakness, rally bus connects you with other riders traveling to the same event. Joining us here at post nine is founder and ceo of rally bus. Welcome. Thanks for having me on. I love this. Why did he call it rally bus . Its because of the jon stewart rally on washington a couple years ago. Thats how we started. Jon stewart and colbert had a rally a few years back. Being a Web Developer i created an app that lets people sign up for rides from their town down to d. C. I didnt have the money to risk or sponsor these buses. I required a minimum number of people to sign up before we confirmed the bus. Then you were like a matching service, kind of like uber is today. We put it out there, within a month we got 5,000 people together from 50 different cities across 20 states. Is that how big you are right now, in 50 different cities . How do you sign up how do you do it . We received reservations its a tenhour drive. Im trying to come up with options. Thats what we are, another option. We see so much happening in the transportation and mobility space these days, weve received over res vagus in 1,100 cities we offer service to every event you can think of. If you dont see it create your own, add your own rally point. We need 25 people to sign up along a route and we have a bus. Where do you get the buses and drivers from . Thats the great thing. What were talking about is a sleeping industry that were putting the technology and Business Model innovation on. The charter bus industry is out there, 4,000 bus companies, 40,000 buses. Onetenth as many taxis but they have ten times the capacity. They have extra capacity. Thats what were doing. Bringing them to life. Bringing these buses sitting around in parking lots to life. Do you have to sign away your life basically . If you go on a rally bus . In index. Theyre the safest form much road travel out there, the greenest form and theyre all insured. I hope it makes the traffic better. It couldnt be worse than when youre trying to go to some of these events f. We keep doing what were doing right well be affecting the larger scale things. Were taking 25 cars off the road for every bus we send to preakness. Does that mean you would never do a deal with an uber or lift . Or it just seems like a perfect union. Theres options. We do like that. We hope to make that union one day. Which horse are you betting on . Not number 7. Not the grey one either. Thank you. What can a conductor teach a ceo . Well find out from an orchestra conductor that spoke to leaders at google and intel. Summer is just around the corner. That means beaches and barbecues. Would you eat this new burger . Well be right back. My name is fernando gonzalez. Im the gas Service Supervisor here in Sonoma County. We moved up here 35 years ago and we just love it up here, its a fantastic place to live. Our function is customer support. Making sure that our customers are safe and thats the most important thing. We know we are part of a huge company but Sonoma County is our home. Sonoma county is our pg e. What were doing really means something in the community and its just a great, great feeling. Together, were building a better california. 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. Welcome back. World are buying and selling. Dominic dominic chu. Warren buffett first. They have boosted their position in was parts 47 . Also 21st century fox to about 6. 2 million shares. And refiner phillips 66 to about 7. 5 million shares. They have decreased their positions in National Oil Well barko by 65 to 2 million shares. Interestingly enough, we know that Warren Buffett says he was going to boost his ibm stake. As of the end of the last quarter he boosted it by 3 . Notably, that 3 boost is about 450 million worth of stock. No small feat there. On the an loosa said new stakes in jet blue. About 4. 7 million shares. Also 1 million shares in d. R. Horton. They have cut their stake in united continental, whirlpool and gotten out of their American Airlines stake. Notable moves. And more to come as the afternoon continues. Former orchestra conductor talcum has a message for corporate america. He lays out his reasoning in his newly released book the ignorant maestro. Already he has cult consulted with i had withly known firms like google intel. Welcome. Thank you. The great lessons that you have learn are how do these companies do . Whats the best way to inspire brilliance among your workers. Its not easy but if you look outside your field of expertise into music making for example, you can see a lot of interesting things. And they are all sort of condenserd because the music is bringing everything together in a very intense and fast way. And so you can look at the way conductors actually make people perform better. They cannot play themselves. They cannot even know in advance how those people will play. They can try to dictate everything but then they are just mediocre. If they are really great they do something else. And that something . One of the keys seems to be body language. If a conductor is very happy, are they instilling in their workers the members that they are going to have a good time in what they are doing . If they are too dogmatic too much like a dictator then what are they going to do . Is that the key really the body languages that a conductor has thats something in a a ceo or a manager has to think about when leading teams. I would say its very important to have the right mood, atmosphere optimism and all that. But thats just the start. What you really need to create is a space in which people can actually learn something. This is why the work in music is mostly about gaps. And its about making yourself ignorant enough so something can happen in the gaps that you have never envisioned. Isnt the company and what you are supposed to do within a company, which is people battling to get ahead and to get compensated and to get paid very different motivation, a different sort of fundamental drive than it is in music where number one you do have a sheet of music in front of you. It can be interpreted in different ways but you are there for music. Isnt it a different fundamental motivation . Is it really fair to compare the two. . You have a romantic and beautiful way of looking at musicians. But musicians are human, too, and they want to be acknowledged and they want to be compensated for what they do. Every human thing is there. I would say even more because they are artists and have big egos. And the thing is how not to depress them how not to make them small to be able to control them but rather to let them thrive as individuals and make a better whole. One of the key takeaways, it seems, is that you need to not do too much. In other words to get up there and give each musician the ability to perform at his or her best for a better yoet come overall . Thats true. But just doing nothing will not get you anywhere. The thing is how to do little enough to inspire people, and then support them in their quest. If you are trying to validate a specific result or outcome, then you are actually limiting them. But if you validate the process, you hold them within the process you get to somewhere you didnt know. Thats why i call the book the ignorant maestro. We have to leave it there, is there one company that comes to mine that you think has done this the best . There are so many good people out there, i wouldnt want to name one. But obviously the culture inspired by google is something that caron converges very well with my messages. Certainly does. Thanks for joining us. Thank you snooir. Memory day weekend is the unofficial start of measure is here in the u. S. That means barbecues. Carlos jr. Or hardees is making it easy for customers to get those essentials. The twist, its all on one bun. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. The network that monitors her health. The secure Cloud Services that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. Welcome back. Heres a barbecue i cant keep a straight face. Can you blame me . Look at this. You are laughing. It is a barbecue you can hold with one hand. Carls jr. Or hardees out with the american thick burger today. A cheeseberger topped with a hot dog and kettle cooked chips. My favorite part of this is that it was ten years in the development. Does that come with a parental advisory. Do they allow children eating that. Would you allow your son to eat night no i could see my son eating that in a short period of time but not all on one. Thats what america is all about, that particular burger. Everything in the kitchen sink. I would eat thatberger if they added one thing, and that would be bacon. Ew and and now were talking. I think the hot dog have a baconfilled lining in them. How many calories if you have to ask. Its not that bad, i would guess 650. No way. No way. Its 1030. Very must told me. Just little bit off. I want to try this. I would try this i would not do the crazy sweet donut burger thing that somebody came out with a few years ago. Subway came out with the thing where they stuck frito chips in the middle of the sandwich. I was with my son and we were driving somewhere. We pulled into a subway because he kind of likes it. And the first person there on line was having one of those frito specials. O. It might do well. Thanks everybody for being here this afternoon. Have a great weekend. That does it foreclosing belle. Fast money is coming up in just moments. I think the bun should be a donut. That would be more american. Were going to talk about 13 f filings today. Were going to trade them. Lots of great stuff in there. Thank. Fast money starts right now ma aim melissa lee, tim see more david seeberg david kelly and stave brasso joins us. Netflix topping 600 for the first time. Weve got the real deal on the next catalyst that could take the stock higher. Plus the fade to black. No we are not talking the rally in stocks. We are talked the end of the madmen era this weekend. It turns out the show is good for much more than drinking and ad stales. If you had listened to don draper you could have made big money. First, filings. The biggest and best investors are buying or out of lets get the