Transcripts For CNBC Closing Bell 20150529

4 . A drop in inventories this week. And also a drop in the number of drilling rigs hoping to push that commodity higher. Its another down day for the transports. The airlines are bouncing back and weve got the ceo of Spirit Airlines here to talk about fluctuating oil prices and capacity are impacting his company. He looks spirited doesnt he . Ben baldanza. Talk of yet another deal shares of Health Insurer humana have been on a tear in the last hour or so that the company has put itself up for sale. Theyve had interest expressed to them by some rivals. Theyve hired Goldman Sachs and the mating dance begins. The stock up 17 . More details on this story, coming up. Its still breaking right now, as a matter of fact. Big implications across the Medicare Advantage space, of course for the Obamacare Exchanges as well. The dow is down to close out the month, 113 points, just above 18,000 for the time being. The s p 500 down about 12 for the broad index there. That nasdaq actually the outperformer on the session but still down 27 points. Lets start with the oil spike ahead of next weeks key opec meeting. Its all about supply and demand. Jackie deangelis is at the nymex nymex. Traders said wed see volatility of 55 to 65. We certainly have. A big pop today, closing over 60 60. 30. The drilling rig count decline again, we lost 13 oil rigs. On top of that a perceived boost in demand for both oil and gasoline expected to continue throughout this summer. Add that to the fact that people are watching political issues in the middle east isis claiming responsibility for an attack on a moss income saudi arabia is one of the issues. Meantime we had a slightly weaker dollar today. You have Short Covering going into the weekend on the last trading day of the month. It creates a perfect storm to go higher. A lot of traders saying we could bump up from here because closing over 60 was paramount. Back to you. Lets get to our closing bell exchange. With us today, meg green of meg green and associates back with us. David leibovitz with jpmorgan is here at the New York Stock Exchange and Rick Santelli is in chicago. David, this week, volatility came back. Economic data mixed sat best. And the fed was out there telling us not to fear or obsess over that first rate increase whenever it happens. What did you think of what we learned this week and what does it say about the markets right now . You make a very good point. Volatile has been high. Its been our base case all year that as we approach the initial fed liftoff well see volatility pick up in stock and bond markets. Turning to the data, yes, the First Quarter gdp print or the revision wasnt terrible but it was what people expected. We were negative growth territory, the fed seems to be looking through it investors seem to be looking through it. Im much more focused on the Second Quarter numbers weve been getting. Broadly were seeing stabilization in the economy. What are you buying here meg . You know were always in. Were never out. We dont try to play guessing games. But the truth of the matter is i think a lot of people need to understand that the s p is not your big winner this year. Theyre all looking, every time the market hits a new high which they are on a regular basis it doesnt take but one point to get to a high. Everybody celebrates. Everybodys excited until they go home and look at their portfolios, look at their statements. Its not like that. The reality check is a 60 40 portfolio will be doing a little better than the s p this year. The truth of the matter is when you look at the highest Interest Rates and what they will do now you have to look at where do you go . Do you jump out of the market or jump away from bonds . No. Its a good play to make if you want to get into the things that do well after a market rate increase. Thats what were looking for. Stay diversified in that regard. Rick what did you make of this week and the increase in volatility and the movements not only for fixed income but for the dollar as well . Well you know i think its easy to tie up when i think about a story that everybody emailed me about 2 1 2 hours ago that New York Stock Exchange margin at high levels and i understand that when stocks go up the margin tends to correlate with it. I get that. I think fully leveraged, fully margined, it explains the volatility. You get a lot of margin calls. And whether it happens domestically or on the other side of the globe, it hits all markets. I think well see a lot more of that. In terms of volatility down the road and what the fed may or may not do i think its going to be a game of frogger. Well see a lot of movement and people jumping in jumping out. Because the next correction we get most likely will see both higher rates on some type of adjustment getting used to normalization. Stocks wont necessarily like that. Thats a liquidation trade. It isnt necessarily transferring your money from one sector to another, its capital preservation. That always plays out in the market much different. But its short lived. Meg, pick it up if you would. People who are in fixed income are wondering if they should jump out of the fed. Only does raise rates once or two. What are they to do . You know what i dont think everybody should be running from bonds. Not every bond is the same. You might not want to be in treasuries but high yields are up, doing well. We went back and did a lot of study on what happens after since 83 there have been five rate hikes. So what has done well after those rate hikes . Muni bonds. They might not have performed well this year theyre only up 3. 3 , 3. 4 . The other thing is yes, there will be much more volatility when theres a rate hike. That comes with the territory. Volatility is an investors really good friend. You do not get out of the market. You stay in because the market is higher after rates go higher. Point well taken. Before we go whats your best investment idea right now, quickly . We still like u. S. Equities. There may be more Growth Potential abroad in europe given the stimulus and increase in confidence there. Think theres no need to run for the exit of the u. S. Equity market. Well see more volatility but historically stocks have continued their upward ascent. Thank you all. Well send it out to dominic chu for a quick market flash on bristolmyers. Whats happening . The drug giant is down by 8 reracing 7 billion, 8 billion off of its market cap, toward its lowest levels of the session. This coming out of the asco conference. They have presented some of their results for an experimental cancerfighting drug and those results have somewhat disappointed investors. This does open up also, some say, for possible gains from their competition from the likes of perhaps a merck or roche in switzerland to gain ground on particular drugs being put out by bristolmyers squibb. The bottom line the results for positive for this cancerfighting drug but not as positive as some investors would have hoped for. It does perhaps, leave the door open for competition of the likes of other drug companies. So, again, thats the reason why. Those stocks shares are down by about 8 right now towards their worst levels today. Well keep an eye on bristolmyers as we head towards the closing bell. Meg tirrell will be at that asco conference on monday. Apparently a lot of fireworks to come out of that as well. These conferences move the shares around. Glad shell be down there covering it for us. Now to the humana story. Shares surging 17 last i checked on talk that it is reportedly exploring a sale after being approached by some of its rivals. Mad moneys jim cramer was talking about this exact scenario last week. We also have an important Analyst Meeting wednesday humana one of the Health Care Cost containment leaders lays out a strategy. Ive been pounding the table for you to own something in the health care segment. Humana is often thought to be a target. Lets get more now on the possible deal from tom carroll. Humana, a huge move. Do you expect this to be the first in a wave of consolidation across the space . Absolutely. This is right exactly in line with our view of managed care this year. Humana i thought was going to be the first to go or a first mover in what we think is a new move of consolidation across the managed care space. Why . Why now . Why humana, why this sector . So humana is a big player in government services. Really theres two places Going Forward where growth is quite significant across health care. Thats the medicare eligible population and medicaid as well. So government growth is a key area, a key growth driver for this space Going Forward. And humana is the big ticket player here at least on the medicare side of things. And a number of the other potential buyers here the larger companies, the likes of cigna, anthem aetna, really need to add a bit more of that capability, if you will to really overweight this opportunity which is really going to last for the next decade. Tom i understand the demographics here but i also know medicare payments from cmms have been under pressure for years. Can you explain the extent to which this has been seen as a luck ra lucrative place. How much Revenue Growth are we expecting over time . Yes, youre absolutely right. The Medicare Advantage program has been under pressure from a reimbursement standpoint really for the last five years as it relates to the Affordable Care act. Going forward, were really at the end of that cycle. Its our view that nitpicking around the rules, reimbursement hits are going to become a lot less and the Regulatory Environment is a lot clearer over, say, the next five years than it has been over the prior five years. In 2016 were expecting to see the first positive rate increase for Medicare Advantage for the players like humana that weve seen in five years. Right. And that on top of the strong demographic argument that you mentioned, i think is quite strong. Who is the best fit for them . Theres talk its aetna, anthem and how much do you think humana is worth right now . Yes, our view this year was that anthem and aetna are both in a position where they must own humana really to maintain relevance longer term. I think, again, my view is anthem was the likely winner in that battle although headlines today are suggesting maybe cigna gets in the game. Cigna also plausible. I think they have the best debt capacity opportunity to do Something Like a humana. Im not counting them out either. Any one of those names could be in the mix. Our bet was anthem. How much . So in terms of looking at valuation, that is a hotly debated topic here this year. In terms of price tag, if we look over the last decade or so, the managed care space has seen m a at a 20 to 25 premium to the prior day close. Lets take todays movement out of it put 25 on top of where the stock has been trading. Were looking at at least probably a 230 price deal price for humana if not more. Thats kind of the neighborhood were thinking about. Depends on if theres a bidding war of some kind. Sure. Thats comfortably above your own target we know. Thanks for joining us this afternoon. Appreciate it. Absolutely. Thats Thomas Carroll from steeple nicholas. The nasdaq its slightly down. Transports are down but the Airline Stocks are higher today. Its been a tough year so far for Spirit Airlines down 17 year to date. It is higher today, though we talk about the challenges facing air carriers in general. Talk with spirit ceo about their particular case. Well find out how hes dealing with the wild swings in oil prices coming up. Then later, a wall street pro names three musthave stocks for the next ten years. Some of the names on this list may surprise you. Well have more on that, closing bell is back in two. Female announcer sleep train challenged its manufacturers to offer even lower prices. But the mattress price wars ends sunday. 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 ends sunday at sleep train. Your ticket to a better nights sleep welcome back. 45 minutes to go in the final trading sefgs the month. The dow looks like it will go out. In fact all indexes in the red, were down about 0. 5 . Anything could happen. Peter costa right behind the graphic there trying to ward off the we have the monthly charts. Weve combined the dow, the s p and the nasdaq composite. They didnt exactly sell in may and go away again, like last year. As we are hearing from Tom Mcclelland earlier, the sell in may crowd is out there. Interesting gold prices have been at quite a Bertha Coombs tracking some of the other movers at the nasdaq in the final hour of trade for the month of may. Bertha . Bill and kelly, look at how the nasdaq composite outperformed this past month and todays movers really exemplify that. Altera at a new high on reports that intel could be getting very close to reaching a deal to acquire the chipmaker for upwards of 16 billion. And the chip sector overall with that mega deal we saw yesterday, avago at 37 billion continues to be buoyant. Chips were very strong performer. Avago at a high as well. Skyworks, some of the others that are componentmakers for apple. Chips for the month are up 9 . Then you have biotechs. Theyve also been a big gainer as well. Up 9 as a group for the month. Consolidation, a big issue there. Going into this weekend, its asco they get that asco bump here at the end of may, beginning of june as folks anticipate some really Interesting Data on cancer coming out of that conference over the weekend. Finally, gamestop one of the big winners, new games mean better sales, better profits. And that was the case for gamestop in the First Quarter, thanks to mortal combat 10. Can you believe thats been around that long in theyre up to the tenth version. Back to you. Youre still playing seven. Yes, yes, im working on my skills. Youre getting there. Thank you, bertha. 20 minutes left in the trading session here. The dow is down 09 points s p down 10 nasdaq down 24. Again, were waiting for the rebalancing in the russell index during the last half hour. All bets are off the table at that point to see what happens. Also ahead, billionaire and former head of the Fidelity Magellan Fund jeff vinik will tell us if its been exaggerated. And Tampa Bay Lightning going up against the new york rangers tonight. Looking forward to this discussion. Its coming up on the closing bell. Can you spot the difference . No . You cant see that . Alright, lets take a look. The one on the right just used 1 less fuel than the one on the left. Now, to an airline a 1 difference could save enough fuel to power hundreds of flights around the world. Hey, look at that. Pyramids. So you see, two things that are exactly the same have never been more different. Ge software. Get connected. Get insights. Get optimized. 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. We live in a pick and choose world. Choose choose choose. But at bedtime . Why settle for this . Enter sleep number. Dont miss the memorial day special Edition Mattress with sleepiq technology. Sleepiq tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow now we can all choose amazing sleep, only at a sleep number store. Save 500 on the memorial day special Edition Mattress with sleepiq. Ends sunday know better sleep with sleep number. Welcome back. Weve got 38 minutes left in the trading session here with the dow down 91 points. The s p is down 10. The nasdaq down 24 as we close out the month of may. Actually with the major averages with positive numbers. The transports though are a different story. The dow transportation average suffering this year as oil has come back again. This is a yeartodate chart. You see, down more than 9 . Nearly correction territory. While the transports are down again today, those pesky airlines are higher brushing off the rally in crude oil prices as well. Joining us on the phone right now in a cnbc exclusive to talk about the oil impact on the industry and other things that are facing him, ceo of Spirit Airlines, ben baldanza. Sorry i cant be live with you in studio. Thank you very much. We heard you caught in traffic. How much of this is about the cost of fuel and what else is going on as we head into the Summer Season here . I cant speak for the whole sector but i would say for spirit, we dont have a lot of headwinds right now. Fuel prices are kicking up a little bit but theyre still moderate compared to what theyve been the last couple of years. And theres enormous demand for summer travel. Our bookings are very strong. We came off a very strong First Quarter and put out good guidance for the Second Quarter. Overall we feel good about the summer. I will say overall fuel prices rising again if they are to is it really the worst thing for the industry overall . Because this industry has weathered much much higher fuel prices over the last two years and has generally been profitable. Its a point, ben. The last couple of weeks theres been a lot of focus on what southwest is doing with adding capacity. Weve heard from american ceo saying whatever they do in terms of capacity or price, we will do too. What does spirit have planned in terms of adding seats, adding coverage, expanding to meet demand this year . Well were having a very big growth year this year. All of that growth was planned before the drop in oil. So were not growing any more in response to lower fuel prices. We see what southwest is doing. Theyre growing a little bit more aggressively. And the industry generally has taken advantage of lower fuel price by filling a few more seats or adding a little more capacity. We saw americans comments as well. They seem solidly sort of aimed at southwest. The reality is if theres a little more of a price war in the industry right now, thats not bad for consumers. And no airline is better at low fares than spirit. Were all for it. Do you hear the groan from passengers when we talk about you adding seats to planes that are already full . I dont mean by the number of passengers, i just mean its pack. Theres less leg room and so forth. Flying is just not as much fun because of that issue of crowding and having to pay for the baggage fees and all those things. What do you say to the passengers about all that . Well theres customers who buy based on sort of physical comfort and theres passengers who buy in order just to get where they want to go. At spirit we put a lot of seats on our airplanes and we like to put even more and what that does, it spreads a high fixed cost over more people so everybody pays a lower rate. Our customers really like that tradeoff. They choose the lower fare over a couple more inches of leg room. And what department of transportation data prove is that the total price customers pay on spirit after they pay for the extra bag and things like that is about 25 less than their next best option. Our customers love that tradeoff. They save money, yes, the seat is a little tight but its still cheaper. When they get there, they stay in a nicer hotel or have a better meal. Just to be clear on this one, as others move to lower prices like southwest, like youve mentioned, will you guys match that . Its important to us were the lowcost airline. How do you maintain that if it is your number one priority if you feel pressure coming from rivals . Well, the total price that spirit collects today is lower than everybody elses cost of production. So when the industry matches our fare if they sell their whole plane at that price they lose money. Again, people are cutting their fares to come down and match spirit. Were not generally forced to lower our fare to match others. Now, sometimes we have to lower our fare in order to keep our plane full if another airline lowers their fares. Were affected by this kind pricing when other Airlines Price low. Overall, like i said nobody makes more money with low fares than spirit. We do fine in this environment. Were bullish about the summer. Ben thank you. Pressure calling in. Hope it wasnt because of a delayed flight or anything. No it wasnt because of a delayed flight. Thank you very very much. Ben baldanza of spirit air joining us. Interesting stuff impacting that industry. Time now for a cnbc news update. Heres whats happening at this hour. For the first time a major study shows that a drug targeting the bodys fighting up inging immune system it works better than chemotherapy for patients with a certain form of lung cancer. And heavy thunderstorms dropping several inches of rain in the dallasft. Worth area triggering a flash flood emergency and leading to dozens of high water rescues this morning. Dozens of vehicle were trapped on the roads and interstates. A chinese bank announcing its begun atms with a facial recognition system for customers. If theres no match, no money can be withdrawn. A. And Michael Jacksons neverland ranch is on sale for 100 million. A buyer gets 22 buildings, including a 6 bedroom, 12,000 square foot home. Theres a Swimming Pool basketball court, tennis court and a 50seat movie theater. Thats the cnbc news update for this hour. Back over to you. I guess the zoo is gone now. I know. Whats that about . Thanks kate. 30 minutes to go until the close. The dow is down just about 80 points, the s p down about 9 and the nasdaq off 21. A little less than half an hour left in the most important 30 minutes of the day as weve established on wall street. A top floor trader will tell us what hes focusing on and what to expect from the rebalancing coming up in a few minutes. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] back on the floor we have where did the time code go. 28 minutes. Gordon charlotte from rosenblatt securities, one of the top traders on the floor. We have the russell rebalancing coming up. Whats that going to do . Its a Morgan Stanley index that will be rebalanced. Half the volume of the russell historically thats what it will be in terms of the closing bell. That means somewhere between 400 million and 500 million shares. On volatility . Thats what were looking at right now. The conditions indicate i think well start to say a payoff. There are procedures. What about anticipating that . What have you thought of the trading and what its done this month and especially the last week where the volatility picked up again, finally. Its been an interesting month. They seem to be fighting to get out of a range. Until we seem to be able to get clarity on which way its going to be are they going to bust it out finally or are the naysayers going to have their day because of greece. Is it going to tell you which way its going to break . Ive been afraid to say this publicly. Just between us. Just between us i think we go to the upside. I think you see in the deal. We see a lot of the other names. Theres big money out there. I think theyre going to put it to work. Thank you. Kelly . Bill thank you. The last few minutes of trade, weve been asking you on twitter how youre playing the mark net the final trading session of the month. Heres some of what you had to say. Jeffrey said i stopped buying the individual stocks its just the dow and nasdaq. Invested in Good Companies at sensible prices. We have the Retail Investor round table. Julie warner is here from better investing. For the first time justin eskar jones us here at post nine. Great to have you with us. Thanks for having me. Thomas lets kick it off with you. What are you buying . I made a couple of small purchases. I recently bought pepsi. I thought the dupont reaction to the board vote was ridiculous, overblown. I got in there. The market hasnt done much. I dont think the market is too expensive. I dont think its really cheap. So its sort of picking and choosing at this point. All three of you told us what youre buying, what youre holding. All three of you own the same stock. Apple. You own apple. You own apple. You own apple. You own an apple watch. Yes. Why do you own apple right now . Its been hot. You think more to come . Absolutely. They have Amazing Products coming out. The worldwide developer conference is in two weeks. We dont know what will come out but we have good ideas. Theyre just on a hot streak. I feel like theyre not going anywhere. This is part of your market research. Why do you think apple is a good investment . Sure. Theyve had stability with all of their products. Until we see something that throws for a left, theres no reason to get hid of them. It was get they did the 7 1 split. That helped investors buy more in. And they just keep chugging away with new and great products. The watch sold a Million Units day one. How do you find yours . I love it. I love it. Its awkward when youre in a public place talking into your watch. For now any way. You have tiffany, gemtex genesee, polaris. Genesee wyoming isnt a mining company. Its a shortline railroad. Okay. I purchased that back in december for the first time. Its a longterm play. I tend to invest for the long term. And i believe if theres growth there, it will ebb and flow like the market does. Favorite company is tiffany and ive owned it since actually the first time i bought it was during the financial crisis. I like to buy good solid, great companies. I like to get them at great prices. Youve had a nice week last week. Ive had a great week. Whats interesting about the three of you, youre talking about individual names, contrary to the twitter and general public reaction the focus is mostly on index funds. Why is individual stock picking the way to go . I think for the individual investor, once you take the time to learn how to do it and as you know, my organization thinks that investment clubs are a great way for the average person to learn. Thats how i learned back in 1984 when i joined my first club. But it gives you control and you get an educated investor will learn how to value a company, pick good solid growth companies, how to get a diversified portfolio. You are the owner of these companies. You take control. You dont have to take profits like the mutual funds if you invest that way. And ive been very successful. I know a lot of people have been successful doing it. The secret is education. You have to get the education and learn to take the emotion out of the decisionmaking. Good point. Good for you and good luck with that as a matter of fact. Tough to do. Jpmorgan is that the only financial you like here . A lot of guys are telling us to like financials here. I love the ge spinoff. I think its underplayed, its not really talked about. I think theyll institute a dividend at some point. You sold citigroup to buy that one. Too many negative stories. I thought it was near the top end of the range. You didnt get shares even if you owned ge. You had to go out and buy them. I started out at 23 24. Its going to make 3 a share, i this i, next year and a dollar dividend i think is certainly possible with a 12. 5 ratio, 37 1 2. Thats one of my favorites. Again, im curious about the backdrop. Are you mostly in just stocks or do you have fixed income investments as well . We have a couple fixed income investments. Obviously i own my house which is a great thing and building up equity. At my age, really its about a Quality Group of products to keep myself going. Im a young guy, at least i think so. I want to be able to go for the long haul. Its not about the day to day. I think everybody at this table is safe in buying green bananas. Were okay with that. Anybody care when the fed raises rates . I want them to raise rates the market will overreact and sell off for no reason. Julie can buy some more right . I absolutely want them to raise. 0 this long is dangerous. I think they should raise. You agree . I do agree but do what they want. All i know is for a longterm investor, the market ebbs and flows. When it gives buying opportunities, im more than happy to take those. When it overshoots, im happy to take a little bit of problem, especially from my tiffany and go shopping in a different place. We love having people like you come on the show to tell us what youre doing with your portfolios right now. Appreciate it very much. 20 minutes to go in the session. Across the board indexes are under prsh yur to close out the month. The dow is down 90 points or 0. 5 . Were not finished with stock picking. When we come back three stocks you need to own for the next ten years. Julie is listening now. A wall street pro has the names he says you cannot afford to miss. Coming up. Later, the next big short. Paul singers latest market call. Thats coming up. We live in a pick and choose world. Choose choose choose. But at bedtime . Why settle for this . Enter sleep number. Dont miss the memorial day event going on now. Sleepiq tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow only at a sleep number store. Save 300 to 600 on select mattress sets. Ends sunday queen mattresses start at just 699. 99. Know better sleep with sleep number. Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Welcome back. Two Big Health Care companies being talked about today. Humana up almost 19 and bristolmyers much lower, giving up 6. 5 after disappointing drug trial data. Ahead of that big asco conference that well be covering. We are looking far ahead. Lets say the next ten years. Joining us right now to break down his three top stocks to own for the next decade john good to see you. Welcome back. Thanks for having us. Is there a common theme before we get to the names . What is it . The list was first picked in 2010. And obviously its had a great run since then. But the thing is you want to look at not just the trends of today but the idea is whats going to stay static over the next decade. So the three that you all wanted to go over these are all static for the next decade. Teva has had a lot of problems but the reality is they still have a lot of tail wind behind them, too, if they can get past the hurdles. Its cisco systems, Teva Pharmaceuticals as well. Yes. Why is teva the place to be for the next decade . Well so when it was picked originally, it was mainly because of the largest exposure to generics. And of course theres biosimilars, youll hear a lot more about over the next five years. Its still not even really all that its really not all that present right now. But all of this should help them. I could even foresee, perhaps, a breakup. I know that teva i know teva was interested in mylan. I have no idea how that will pan out. If that doesnt work out, theyll make another acquisition. They almost sort of have to. On Disney Bob Iger has had an amazing run as ceo. He wont be there forever. Hes already identifying who his next successor could be. Can they keep this juice going for another ten years . Well ill put it this way, he laid about as good of a foundation that a ceo could lay for a successor. The valuation is high. That is going to be an issue. They trade at 20 times blended earnings for the next year. So its not cheap. They dont have a really good dividend. They keep raising their dividend but their stock keeps going up. Whos not going to watch star wars and marvel in five ten years, well still be watching marvel and star wars movies. That i follow jon. Explain cisco especially since we entered the postchambers era. So cisco is easy. In technology the whole trick . Looking at a decade is not to pick the biggest winner out there. Its to pick a company that will be paying you as you own it. Cisco loves to do buybacks. Outside of apple they are the number one buyback in tech. As far as over the last decade. Their dividend yield is almost 3 now. Youre going to get a 30 pop just from holding it over the next decade. The reality is theyre probably going to grow plus or minus a little bit more than the global gdp. So as long as valuations hold up and by the way on valuations, they are a cheap stock also. So its not like its kind of trying to pick the next apple here. Great stuff, jon. Thanks. Appreciate it. I appreciate it. Jon ogg. 24 7 wall street. 14 minutes left in the trading session here. Coming back a little bit, the dow down 76 points right now. Find out if stocks can turn the red arrows into green ones in the final minutes of trade. And later, we speak to the ceo promising to pay the College Tuition of his employers children. The founder and ceo of boxed, coming up. The 2015 cclass. At the very touchpoint of performance and innovation. Welcome back. About ten minutes left here. Art cashin said we have a 350 million to sell going into the close here. But its anybodys guess whats going to happen with this index rebalancing thats occurring on the close here. Could be swings. Lets talk about them with independent Investment Consultant david darst. Discussion weve been having on the one hand was about all the trading activity weve been having. Im looking at longterm goods, i dont care about the nearterm wiggles. This is a Sleeping Beauty market. The Sleeping Beauty stayed asleep for 100 years until she was kissed by the prince. The princes name is arp, a. Howry earnings retail sales and profits. Im amazed the market is holding as well as it is kelly and bill. We have 12 factors. We dont have time for 12. You better hourly. Retail sales, average hourly earnings. The employment is not really going down. The manufacturing sector, construction, spending low. Down. Durable goods orders industrial production, chicago philly fed, empire state and the last three is lack of vigor as evidenced by this 0. 7 decline annualized in the gdp and the lack of pricing power, number 11 and 12 the ppi, purchasing power and the Producer Price index and the Consumer Price index. If you think were stuck in a period of clowe growth what do you buy here . Ive been amazed i just whispered it to you last week bill, the bank stocks have acted so well and they may be indicating that this housing sector, pending sales, new home sales, existing home sales, housing starts. The nahb thats the Home Builders index. Right. That has really shown some resilience and actually is pretty solid. Okay . If you get a good jobs number next friday kelly, for the may jobs number i think that could basically simulate. We dont have animal spirit. This irrational not exuberance. This is irrational sunderland. Are we destined to remain in this traying pattern until the fed decides to raise rates . Is that the catalyst thats going to get us out of here . That is could be a sediment for greece settlement for greece. Thats been weighing on things. First quarter gdp minus 0. 7 . The Second Quarter number that the atlanta fed is talking about is 0. 8 . Which would keep the fed on hold presumably. Correct. Are we destined to stay in this trading range, do you think . Well stay in this trading range until we get a strengthening in the labor market. 80 of americans who do the real work in this economy. They have to basically be in a more animalistic spending mood. Its been all the games have flowed to the people who own assets. And their big asset, the 80 is their house. That and a little bit of tightness in the labor market. Thats the underlying principle of the market doing better this year, the economy to do better by housing doing better and labor doing better. Those are the two things that have to happen bill. Think you put it well. Thanks david. Bank stocks. Keep your eye on the bank stock. We will. We will heed your advice. David darst with us this afternoon. Up next, right back to the closing countdown. Well review get monthly charts of different investments and see how we did this month of may as we close the books. Greece why is matters a lot to wall street. Well check in with michelle carusocabrera. Youll watching cnbc, first in business worldwide. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Heres to breaking more glass ceilings in golf and everywhere else. Kpmg. Continuing our commitment to the next generation of women leaders. 3 1 2 minutes left in the trading session for the last trading day of may. Mary thompson lets see lets go over these charts and see how various investments did in this month. Okay. The old adage, sell a man, go away. Look at the dow. Its turning lower right now. This is the month. Well look at monthlong charts. Today down 0. 5 . For the month, virtually unchanged, down 0. 2 . Transports the dow transportation average for the month is down 4. 5 . Price of oil . Price of oil, concerns about capacity in the airlines and some concerns about whats happening with the railroads, too. Transporting fuel coal and oil as well. The month of may, we began the year with very low prices. Theyve since been coming back. For the month, mary up 7 . So as the transports went lower, oil is going higher. Thats a slam dunk. The dollar also probably up. The dollar theyve been talking about parody with the euro. But the dollar stalled out a little bit here as we wait for situation on greece the dollar index for the month up 1. 7 . Right. What weve been seeing lately is the strength there. Yield in the treasury the tenyear, lets see how it did. For the month of may, representing percentages on a percent anyway the yield up 4. 3 in the month of may there as they get ready for the feds to raise rates. The question is when is it september or december given the weaker data that were seeing . Do they push it out longer. More people are talking about financial stocks as a result of all that. Finally, what did rear up at the end of the month, weve been in the back water area for so long on volatility, the vix and then finally, it started to come up and for the month, up 3. 8, almost 3. 9 after this 4. 5 gain today. Now we have the rebalancing. We clean the slate and get ready for the month of june. Whats expected for the summer months here. People try to regain the rebalancing as well. When the stocks close out, thats what they use to decide the market cap the trading volumes. How to change the indices in june. Its been a choppy day but a lot of the concerns that we had in the past are to the forefront again. We have concerns about greece once again. That was a contributor to some of the volatility concerns about the economy as well. Some of the data hasnt been as strong as expected. The fed meeting is in just a couple of weeks. With the weaker data though will they be raising rates for the first time in the june meeting . The expectation right now is not. Theyre making an awful lot of speeches lately saying do not fear the first rate increase. Or the pace of which theyll raise Interest Rates. Obviously there is a desire to raise rates whether it happens in june or more likely september. Thanks. Have a good weekend. Down 100 points. We did get a little bit of selling as we close out with the rebalancing of major indices as well. Stay tuned. Much more ahead on the second hour of the closing bell with kelly evans. Have a good one. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. Heres how were finishing the day on wall street also the week and the trading month. The Dow Jones Industrial average really doing down on the close there. We had a rebalancing, we have the concentration in the final trades as well. Just below 18,000 the closing level there. The s p down 13 daz knack down 28. Moving substantially higher in fact, as jackie toll us earlier, were looking at a close for the session that was above 06 bucks. More bullish talk among the hopefuls that will potentially see more breakouts to the up side. That remains to be seen. A 4. 5 move today. This was the final trading day of the month. That strategy doesnt seem to apply for the month anyway. Dom chu. Its an interesting move overall. May ended up being not quite as bad as some people thought it was going to be. As we take a look at the major indices, the dow closed up. The s p in that same ballpark about 22 points overall for the month. You can see here the nasdaq composite, a lot of that deal driven, hot specters in technology biotechnology, Semiconductors Nasdaq composite up by 2. 5 . As we drill down where the action was overall beyond these major indices, take a look at some of the sector performers some of the stock performers overall. For right now youre seeing the Energy Sector down by about 5 . Thats the month to date loser in terms of the overall factor thats done the poorest, if you will. Energy continues to be a volatile sector. Something to watch. As for the best performing sector overall, maybe no surprise here. Its been hot last year. Its been hot this year so far. Health care up about 4. 5 . That trend continues. That bristolmyers deal bristolmyers action today, maybe notwithstanding. Take a look at whats happening with humana and some of the other names as well. Thats an interesting trade to watch. Take a look at the overall biggest winners so far. Because of that move today with possibly a deal for humana putting itself up for sale its up about 29 for the month. A huge move for this Health Insurer. As for the worst performing stock in the s p 500 overall, thats interesting as well. Thats keurig green mountain. Thats how things stack up and wrap up. Generally speaking with a few nickels and dimes here or there, thats whats going to happen and thats how well wrap up the overall month. Back over to you. Great stuff, dominic chu. Lets bring in the panel. Jim la camp is here from ubs, kate kelly and robert frank. Welcome, everybody. We have fast money trader tim seymour and cnbc senior contributor larry kudlow. Welcome one and all. Let me just begin, im look fog the panel, guys if theres a bull market it is in deals. Weve had the second busiest month for u. S. Deals in terms of announced deals in history, 233 billion worth. Where does this take us next . Is this a bullish time for the markets generally . Theres a lot going on to be happy about. It seems like were up and were down. Underneath the surface, all three major averages are up. You look and see whats up in the market. Health care, financial technology. What do these have in common . Earnings growth. Go out and find companies that are doing well. Its not just mergers and acquisitions. Find companies that are out there performing. Thats the point. This is a stock pickers market, not an averages market. Kate . As we wait for Interest Rates to rise which could be september at the earliest at this point. Financing is still cheap. People are looking for ways to combine and increase efficiencies. I heard dick bowles talking about the way that companies are cutting costs to preserving margins that way merging and gaining new business lines, assets, while cutting staff and overhead is one other way to do that if you can get the financing and you have cash. A lot of people do have cash on the balance sheet. To me this m a activity is worried. First of all, the best performing may prior to this were 2007 and 2000. As a former m a reporter, people do deals not when the targets are cheap but when their own stock is overvalued. When their own currency they feel like its not going to get much better than this, thats a time to do a deal. First they tried efficiencies. Thats how we got out of the market bottom. Then we did stock buy backs. This is the third phase, m a. It may be the last phase. You may have an issue where everybody thinks Interest Rates will go up. You have financing costs that youre looking in the wind shield and saying theyre going to go up. If im going to do a deal ill do a deal right now. Thats doing deals based on the supply of money, not based on what an asset is worth. Thats a problem whether youre looking at real estate art, everything. Thats where the problem is. Whats your read on all this . You know in terms of the numbers today, i didnt see anything that really changed. Okay . I would disregard this First Quarter number. You basically have the same story we had for years. I call it the 1950s. 2. 5 growth virtually no inflation, rock bottom interest rate. If you want a positive number to support jim lecamp nonfinancial domestic profits are running 7. 5 over a year ago. Thats through the First Quarter. Thats a pretty good number. If we keep that pace going, which i think we well could, i will continue to advice buy the dip. We have that plus tim, we have the stronger u. S. Dollar. Is that helping to attract money here and out of other mark pets or no . Lets pat jim on the back one more time. Companies that are doing better in this environment are those that are not exposed to the stronger u. S. Dollar. Health care is one of those places. Look at the global economy, weve had a mixed bag this week. Certainly greece first of all, dont discount the role greece played all week in the heaviness in stocks and into month end. Weve gotten some sense that imf payments will be delay or a deal is delayed until the end of june. I continue to think its a lot of noise. As it plays into the Global Growth story its been weighing on europe. I think European Assets this week also got cheaper. If you look at the dax, we traded down to the 100moving day average. Its rallied a couple times in the last run. I tend to agree with the panel which is that i think the u. S. Economy is in pretty good shape. For all the negative things, durables numbers were a surprise, new home sales were a surprise. All that was kind of good. Well leave it on meantime. The disappointing Economic Data in the u. S. Helping to spark that selloff. It may be a familiar one. Michelle carusocabrera joins us now. Which greek deadline is it this time . Tim seymour was talking about it. Weve had weaks of hammering, speculation. Things cowl get real for greece and its kreders they have to repay roughly 300 Million Euros to the imf on friday. Its the first of four payments due in june. Its unclear whether they have the ability or willingness to play. There have been confusing headlines. Lets get down to the worst case scenario. What are the consequences if they dont pay the imf on friday . Looks like not much. First technically they have until the end of the month to make all of the june payments. Second, not paying the imf on time doesnt trigger default clause in another bornds out there. What is far more consequential is the nearly 7 billion euros greece owes the ecb due in july and august. Make no mistake, things are getting worse by the day in greece. Thats right. Take a look at your screen. Pensioners line up every month at the banks to withdraw their Monthly Payments from the government. They want to make sure they got the money and they want to make sure it doesnt stay in the bank because theyre worried. Not paying the imf next week may not turn out to be such a huge market event even though it would be clearly symbolic of how desperate the situation is if greece indeed doesnt pay. Looking for your reaction here. People are trying to figure out whether, you know, its not just whether or not greece leaves the euro as michelle indicated. Its much more nuance now. Walk us through the way we need to think about this from an investment point of view for these markets. Its kind of like what the fed is doing right now. Theyre hammering us into believing theyre going to raise Interest Rates. In greece what im worried about is capital control. If they put capital controls in greece, what are people in portugal going to think, what are people in spain going to think and what are people in italy going to think . Can could wreak havoc. You could even see bitcoin go up. Can i Say Something about the gross story. This greece story. Go ahead, larry. The European Central bank is going to bail out greece whatever that means. Germany wants them bailed out because they dont want to leave the euro. Thats the german position. I said this i dont know for two years. What really is more interesting to me is what happens here at home. Im just going to say this to pound the point home. Profits are the mothers milk of stocks. Nothing has changed regarding the economy. Its stag nan the and has no inflation. We know financial contagion is real. We almost got to go. Listen, in this case are you saying youre not worried there could be any kind of Financial Market contagion from what happens . Greece . That is correct. As they struggle for the record i agree with larry. Because of the ecb, i believe it is not a systemic risk. Thats all. Michelle . If it werent for the ecb, greece would have been gone a long time ago. Larrys right. Tim . I hate to say what larry said. Capital controls i would put a 0 chance on capital controls at this point. The contagion effect is something the markets will try to do something with. Thats where volatility comes in. Dont overtrade that volatility in my view. I think the world is in a better place. Well leave it there. Thanks, michelle larry, appreciate it. Stick around to see tim seymour on fast money at 5 00 p. M. Paul singer revealing what he says is the next big thing. And the hes gone to running for the stanley cup. Jeff vinik joins us later on the closing bell. Youre watching cnbc, first in business worldwide. Female announcer sleep train challenged its manufacturers to offer even lower prices. But the mattress price wars ends sunday. 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 ends sunday at sleep train. Your ticket to a better nights sleep welcome back. Bond prices have fallen a bit lately. Theyre still up sharply from last year. Now billionaire investor paul singer says bonds are the next big short. Kate kelly has the details. Kelly, paul singer and his colleagues at Elliott Management have been fierce critics of the feds easy money policy for years. In a letter issued at the end of april and reported yesterday by my colleague on cnbc. Com elliott recommends betting against bonds tied to at least three developed country governments, the u. S. The uk and japan as part of what it calls the socalled bigger short. Thats a play on words with the big short, the infamous 2007 and 2008 trades made by many and captured in a Michael Lewis book by the same name. The bonds elliott recommends shorting quote, present they change their minds to find the exit door blocked with Everything Else doing an aboutface at the same time its going to be one heck of a day. They go on to talk about the herd mentality that governs the markets right now. Singer and his colleagues arent the first to short such bonds. Bill gross recommended a trade to short the german bund to recognize it was a poorly executed trade. That was a tough week for him to be sure kate thank you. I want to bring Rick Santelli back into this conversation. Thanks for staying after hours. This is your bailey wick. We heard from singer himself that it is time to short bonds. Do you think its for real this time . Keep in mind that its been the wrong trade for many years. I do happen to think theres going to be a lot of normalization consequences that will result in upside in yields. But consider some facts. Were going to monetize more debt this year than ever before in history. If you dont believe me every major bank reports on it. Central banks now own, get this 22 trillion 22 trillion in assets and a good chunk, almost all of that, are government securities. Our economy is 17 trillion. It puts some kind of perspective on it. What im getting at i do believe rates are going to be uneven but not treated evenly. I think southern economies of europe rates are more vulnerable than treasury rates. Were all vulnerable because this is an experiment and nobody knows how its going to turn out. I would caution that the inventory of actual tradeable securities is the problem. Okay . I think thats where it starts the catalyst. But in the grand scheme of things on the big picture, even though i think this trade can work i still see rates lower than many expect in the big picture because i think that we are in a new normal of growth hence, you wouldnt see so many officials questioning things like productivity and growth. Boom, it finally dawned on them. Seven years in, its not working. Not working the way it should. The other reason this is practical and matters so much there are a lot of people out there with huge fixed income portfolios. Those flows have been more than flows into equity again. Right. They wonder if they get out of the way of an oncoming truck. Youve had Central Banks buying moran bodz than are being issued by their respective governments. You have negative Interest Rates. How negative are they going to get . They have room to go on the upside but almost no room on the downside. Very asymmetrical. Thats been the case in japan for decades. It has not changed. They call that the widowmaker. I thought that was natural gas futures. That too. There are too many of them to count at this point. Exactly. I guess the question for kate is, is this something that a Retail Investor could do should do to hedge their bond portfolio . Im not sure i think a Retail Investor should do it. It talks about how this trade is available to many people. The easiest way to do it is through bond futures, right, jim . You can do that. You can buy floating rate securities. Last word. Only if theyre aggressive should they do this. Depends on the strategy. As kelly knows, you have bond funds that are looking into these trades. Jan janis is one example. Key point. Thank you, rickster. Appreciate it. Thank you. Have a great weekend. Paul singer will be one of the featured speakers at cnbcs delivering alpha conference. Go to deliveringalpha. Cnbc. Com for full details. The massive silk road underground drug dealer case we have information. This is on the founder of the silk road. Hes been sentenced to life in prison. You might recall he was arrested in october of 2013 and then found guilty on seven charges of february this year. Ulbricht ran an online drug bazaar including where you could buy other things including murder for hire fake i. D. S, et cetera. All transactions were conducted in bitcoin, the virtual currency. During the trial, his lawyers did acknowledge that mr. Mr. Ulbricht did start silk road but then said he left and came back to run it. At that time he was arrested. Sentenced to life in prison. Back to you. Thank you very much this hour. For years weve been hearing about the death of the mall. They hope a Shopping Experience will return people to the malls in droves. And one ceo paying College Tuition for his employees children. Can wait for that. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. We live in a pick and choose world. Choose choose choose. But at bedtime . Why settle for this . Enter sleep number. Dont miss the memorial day special Edition Mattress with sleepiq technology. Sleepiq tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow now we can all choose amazing sleep, only at a sleep number store. Save 500 on the memorial day special Edition Mattress with sleepiq. Ends sunday know better sleep with sleep number. When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. With Innovative Solutions that connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. The huge increase in online retailers and sameday delivery is becoming a real threat to malls. Now the malls are fighting back. Courtney reagan is in San Francisco with a look at what could be the hightech mall of the future. The idea of the death of the mall gets a lot of attention but when retailers like sears, dalias, radio shack, the smart mall is what fills that space. Mall operator westfield is considered an innovator. Here on the fourth floor of the San Francisco center mall the first of its kind 37,000 square foot space is called the spoke. Its all sin con valleyesque. Its the first ever coworking space in a u. S. Mall. Theres also popup shops that face the mall demonstration and event space. Its all available for shortterm rental. The spoke offers a shortterm physical home for Innovative Companies from startups to large brands most of which have a focus on the intersection between retail and technology. Space can be rended for even just a day. Shoppers can design custom shoes or custom tshirts. Five designers with the Fashion Incubator of San Francisco, backed by macys, will be here for a month. Even angry birds creator has its new Virtual Reality game for shoppers to experience. Now, westfields coceo steve lowey doesnt think the mall is dead obviously but he thinks darwins theory will play out in retail. In order to survive you have to be a mall that adapts most especially in this case when it comes to technology. Having a good location doesnt hurt either. This mall is one of the most heavily trafficked in the country. Kelly . Wow. Courtney, stay right there. It looks beautiful. That what do you think . That was amazing. I get so burned out of the coffee shops in brooklyn. This sounds like something theres a need for is a public mobile office space as well as a flexible space where you can have an interactive experience although online. How different is it from other parts of manhattan or other cities that are heavy in retail space commercial. You add working space into that is that the point, jim . I think its the niche that will get you here. The malls still have the same problem. People can go there and eye ball things and buy them cheaper on the internet. If you have a location thats going to be an event to go to the mall itself is the destination because theyll have different retailers, different products, different new innovations, different technologies it might be fun just to go there. Thats the difference between that and what a brick and motter does brick and mortar does. Is this a whole different kind of way to experience the mall Going Forward or geared at getting kids back in the mall. Its not men the to be a traffic driver so much as it is to stir innovation in retail and tech knowledge. Traffic will be a nice ancillary effect that happens but this mall actually gets a pretty nice amount of traffic. You do see a decent amount of millennials that still hit the malls they need some place social to go to hang out with their friends. The point is hanging on to the millennials as they grow and become a little bit older consumers. I think theres been a lot of interest so far. Folks we talked to said yeah these shops will change every month, ill come by and see what else i can do. If you can make custom shoes or tshirts that gives you an activity, a personalized product to take home with you. I think it looks cool. Appreciate it. I agree, the loud music in the coffee shops, it makes you crazy. It does. I think thats done for a reason. I think its so you cant make phone calls or work. They need a mix of people to sit there and show theres actually pedestrian involvement. Right. Tricky balance to strike. Yes. Parents of Current College students know tuition costs can be sky high. Boxed has announced hell cover four years of tuition, minus room and board for the children of his employees out of his own pocket. Whats behind this major bonus . Well find out from the man himself later. First, though the Tampa Bay Lightning are taking on the new york rangers tonight in game seven of the stanley cup sell miss. Jeff vinik hasnt only been involved in hockey after running of the Worlds Largest mutual funds and Successful Hedge Fund hes working on a property in tampa. Well get his view, next. Now its time for a cnbc news update. Here whats happening at this hour. A federal Law Enforcement official says former House Speaker Dennis Hastert was making payments to a man in order to conceal a sexual relationship they had while the man was a student in high school. Who was indicted on charges related to a 3. 5 million in Bank Withdrawals to keep the man quiet. Top republicans arent criticizing the removal of cuba from a u. S. List on terrorism. House Speaker John Boehner says the regime got this for nothing. A sevenmile stretch of Southern California coastline where oily globs of goo washed ashore will remain closed until officials determine the water is safe for swimmers and surfers. They began washing up on wednesday. We end on a sad note. American express president ed gilligan died suddenly after falling ill on a corporate plane to new york. Was coming back from a business trip. He was 55. Hes survived by his wife and four children. 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. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] female announcer through sunday its posturepedic vs. Beautyrest with up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Mattress price wars ends sunday at sleep train. Your ticket to a better nights sleep welcome back. Markets closing out the month today. The dow dropped 115 points and art cashin told us 47 of that volume today was on the close. An incredible amount with a few other things including a rebalancing. Still a decent month for what we see as a fearful one. Humana soaring 20 on the news that the Health Insurer is working with goldman on a potential sale. And chipmaker altera up on news its getting closer to a deal with intel. Do you need stock pickers to find growth in the market . Active funds are outperforming with active funds of slightly more than 3 2. 8 for the passive guys. Theyre not too far behind. Morning star actively managed u. S. Equity funds have seen 700 billion in outflows since 2006. Join us from post nine with his take is Jeffrey Vinik who used to run one of the best known active funds, the Fidelity Magellan Fund. He is also the owner of the Tampa Bay Lightning. Welcome to the program. Its a pleasure to have you here. Great to be here kelly, under great circumstances. T in a moment. Okay. The death of the active investor has been greatly exaggerated, as twain would say, do you think thats true . Yes and no. I think a balanced portfolio makes the most sense. The market has got more competitive. More smart people trying to pick stocks and industries et cetera. Its important for those investors who want to use active Portfolio Management to do their research and have the best managers. You were at the Magellan Fund in the mid90s. Lately theres been talk about whether the markets are broke and the different factors that might be contributing to that. Do you think the stock market is healthier or less healthy than it was 20 years ago . I think its the same. Markets go through cycles over long periods of time. Theres better liquidity at some periods of time. Theres ups, downs, all kind of different conditions. For companies, the New York Stock Exchange, the Financial Markets are a great place to raise capital. Our system is great. Entrepreneurialism allows that to grow. On the other side for really good investors who do their home work, theres opportunity to make outside rewards. You still have your own management in your own fund. I do. I focus on the lightning and real estate and other things. That project which is cofunded by bill gates is a massive project for tampa. Right now that part of tampa can be a little bit desolate. What are you going to do to justify more than a billion dollars in mixed use down there . Its becoming less desolate by the day. Theres an awful lot of growth going on in downtown towntown tampa right now. What were going to do around the arena, there are several major anchors, convention center, at quarium, port and cruise ships, the history center, our building. Thats 3 million visitors to the uptown district a year on the water front. What were going to be doing is the University South Florida School of Medicine Health Heart Institute are coming down. We hope to get the museum of science to move downtown. A lot of that was caught up in state funding. Is that resolved . Its likely to get resolved over the next month. I let the politicians do their job. I dont interfere. Bringing usf downtown i think the legislators see that and were optimistic. Were planning to bring in office buildings, a couple of Corporate Office tenants. Weve had very good conversations. Theres a lot of interest new hotel, residential, 2,000 residential units. This will be mixed use 24 7 live, work play. Its a cliche but thats really what it is. We want to have a great environment for millennials, empty nesters. Sure. For all kind of people to come and enjoy and be in downtown tampa. Its a great place to live. I think kelly wants to talk sports in just a minute. Another topical question about fifa. I knowformer direct he of the Liverpool Club and a sports investor. What do you make of the scandal. Im focusing on hockey. A lot of time i do real estate. I do know theres a lot going on in the world of soccer. Anything to make the sport anything that improves the integrity of pro sports, i think is a really good thing. Dallasft. Worth area as you know, the cowboys moved out of dallas mostly because local politics. Thats what a lot of people dont realize. In ft. Worth its probusiness. We have the sundance square. How important is it for politicians to be probusiness and how much of an impact do probusiness politicians have on their local economies . And then finally, im looking to are a couple tickets tonight. Do you know anybody that might have them . Thank you for the question. Thats a great question. Its critical to have the local politicians. We spent a lot of time explaining to the politicians, the legislators at the county level, at the city level, at the state level, explaining our vision for what were trying to do, the economic activity, the jobs. We hope to bring thousands of jobs, a billion dollars of incremental economic activity, tens of millions of dollars of new tax dollars to tampa. Governor rick scott, mayber bob buckhorn, the county commissioners have been so supportive of our project. Thats why tampa is on the move these days. This city is doing great. Speaking of being on the move jon cooper the coach has done a tremendous job. How much longer is he going to be with the team. I hope for a long time. Hes not on the move. The only place hes moving to right now is Madison Square garden. Steve yzerman is our general manager, up for gm of the year we have great people in the organization. Whether its hockey, real estate, the stock market its all about good people. You also have a lot of former rangers on the team as i understand pitting some former teammates against once another. How is this going to contribute to the game seven atmosphere . There are several former rangers players on the lightning, former lightning players on the rangers. You dont need extra motivation. This is for a trip to the stanley cup final. Doesnt it always seem like hockey goes to seven games. It does because its the greatest sport. Its so even during the season its a dogfight to see who makes the playoffs. In the playoffs the series go six and seven games. Its so even so compelling. Half the games are decided by one goal. Theres a ton of overtime. Overtime is that exciting unless youre an owner. Everybody, grand folks, family friends, Everybody Loves the series. Congratulations on your success on a lot of fronts. I almost want to say good lightning because youre here but that would be wrong. No nobody recognizes me in new york. Not a problem. We all hope for a great game tonight. Thank you. Appreciate it. Thank you. Tuition costs are soaring. One ceo is putting his own money on the line for the education of his employees own children. Well talk to the ceo of boxed about why hes shelling out the cash for this major park. And monday well be join by the ceo of clovis oncology. You wont want to miss that, coming up on the closing bell. We talked many times about the rising cost of a College Education. Now one ceo says hes going to play for the College Education of all his employees children. Whats behind this big move . Joining us now, chieh huang, the ceo of boxed. Its an online retailer of bulk household goods. How much is this going to cost you. Quite a bit. Its actually me. You picked up on a great point. Its my personal commitment and my stock in the company an a bit of my cash thats going into this fund. It hasnt been uncommon in the past to see universities offer employees benefits. Its like henry ford giving people a raise to buy more cars. Yes. Why do you feel this was so important and to you. If you boil it down to why i did it a big reason i did it you have a lot of ceos on the show. You have them daily, tens of ceos on these shows. The thing ive realized is that the skill i was blessed with being hopefully a decent ceo, im nothing without the folks that work with me. And so no ceo, whether its what anyone from any fortune 500 company, their skill is tied to those folks directly under them. I realize that. That im nothing without these folks and that i want to give back to them. In terms of giving back through upward mobility. Why not give everybody a raise or onetime payout or put the money in an investment fund. I was thinking about that. You get a car, you get a car. Not as good looking as oprah, not as flamboyant or austacious. Youre not suddenly going to be able to afford college. You saw at an evening event that a lot of people couldnt come because they didnt have transportation. How did that help you make the leap to the college idea. Its a great tiein to the car idea. If you cant afford a car, then are you ever going to be able to afford college for your children . If you cant afford college for your children this generation are they going to be able to . Theres nothing to break the chain of kind of like lack of upward mobility and i really thought this was the most i can do. If youre behind on your bills its hard to save and save over the long term. Absolutely. What i love about this it wasnt mandated by legislators or policymakers. We saw a guy in San Francisco that decided hes going to pay everybody at least 50,000 a year. Youre seeing some of the socalled 1 start to do a little bit more thor those that got them there. I think thats great. My question to you, we were joking about this afteroff the air, this guy is catholic hes protestant i dont know if you can actually legally ask people that. We have a few folks with a lot of children. They texted back that their wives said this is our green light to have even more. I hope you have a good wealth manager who is giving you compound returns of at least as much as universities are. The majority of the fund is actually stock. My stock in our company. So if you think about like Early Technology companies, were only about 18 months old as a company. If the founders had put together a portion of their stock when they were 18 months old, that would be a significant kind of you have 12 children at the company. Right now. Maybe there are some buns in the oven. But this right now is not a cost for you at all. How much do you anticipate this could grow . Is there any cap on it . No cap right now. Only tuition. No kind of living costs. I want to make that as broad as possible. I do want those children of the people of the boxed family to be able to work hard and know the value of a dollar by working. No private versus public. Someone kind of someone shot me a picture of a really nice gate and i was like wow, looks expensive. Of a private school. How long do people have to stay with your company . Thats the thing. This will be a long ride and building in a great, big company. As long as youre with this ride, whether its the day before or ten years before on that day whether were up here ringing the bell or we have a great outcome for the company that will be the set thats eligible. You have to go public in order to trigger this . Not only public or if theres an acquisition of our company, that would be the day. Thats when this turns on the clause and grants people exactly. In the meantime they dont get to draw on it. We put together a little bit of cash. We have someone in the warehouse that his son is going to college in just a few months. Wee were covering his costs. Have you seen a ramp up in applications. Yes, we have. I love it. We could talk for another 20 minutes. We should over a beer after this. Sounds like a plan for sure. Chieh huang of boxed. Groans have drones have been well be joined by the founder who says it was a longtime coming. Hes bring something of the drones right here to the flex New York Stock Exchange. Jeffries is calling Virtual Reality the next biggest trend in tech. Will it catch on or go the way of 3d tv and fade into obscurity . That story burning up todays virtual hot list. That when we come back. Friday night, buddy. You are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. Virtual reality has taken this weeks code conference by storm. Jeffries named it techs new hottest trend but is it buzzing enough to make it to the hot lest on msnbc . Right now whats getting attention is the story scott cohn about with wisconsin adopting a righttowork law where youre not required to have union membership, you have 25 states right to work 25 states not right to work. So he took good look at the civil war kind of brewing there. Thats burning it up. Also burning it up diana olelic olelics piece about housing markets. Almost 60 of homes are not beating their asking price. People are loving that one. Finally we had walltowall code conference and the stories that seemed to be popping out the most are Virtual Reality. Taking a look at what gopro is planning. It plans to go into the market by the end of the year and what google is doing with its cardboard product. Weve been playing around here at the web site with stuff. We have samsung gear that oh wow. Picture cnbc in 3d. Thats where were going. What are you seeing right now. Im seeing kind of blurry because my samsung phones are tapped out here. But were working on it. Those are my hot three for you. These are early days anyway. Thats why its important to get people the info. Thanks alan, have a good weekend. Its a bird its a plane, no its drone. Well head outside and get a close look at unmanned aircraft. Closing bell is back in two. Welcome back. Drones, as you probably know, are beginning to take over the skies. One company was just granted faa approval to use its aerial vehicles and unmanned sensing systems, its u. S. 2. Joining us right now with a first look at some of these crazy looking drones is founder dan murray outside of the stock exchange. Dan, welcome. Thank you. Thanks for having me. Im used to seeing these looking drones but what the heck is this one over here . I think thats what most people are think of. Thats what you see as a toy most people areplaying ingplaying with these days. This is a planetype aircraft and it can stay in the air much longer than that can to collect the data. Give us an example of what you can do with this that you cant do with that . Were about collecting huge amounts of data in crops and farms. This can stay in the air 20 minutes, this guy can stay in the air an hour hour and a half. Wow. So you were granted approval by the faa to do what . To use these commercially. Thats our intention is to bring this technology to the agriculture industry and allow them to use this to kind of collect information on how the crops are doing and optimize their yields. Because agriculture is one of the industries where theyre allowed to use these aircraft. Otherwise theyre trying to limit it to people in their backyards playing around. Thats correct. The faa wants to keep this out of controlled airspace or Populated Areas so its good to have this in the field where its away from Populated Areas. I did a story about five years on support farmers in nebraska and one issue that came up analysts at the time and other farmers that wanted information basically resorted to driving around the interstate doing what they called windshield surveys, looking at whatevers on each side of the road. They call them scouts. Theyre usually Walking Around the perimeter of the field and you can only see so much. When we put this in the air, you get an instant view above and you can see 100 acres at a time. We can tell you down to centimeter level accuracy where theres problems in your field. Wow. This looks like the planes you used to see in the mall where you throw it and circle it back. How vulnerable is it with a strong wind. Do you have to monitor wind conditions when youre out there . Its pretty stable. We try not to take it in winds above 20 miles an hour which lets us operate most of the time. Again, you say it looks kind of lightweight. It is. We built it like that on purpose because the sensors that are on board and what we do with the data is the important part of the equation. We want this to be almost disposable. Right here in new york its very difficult if not illegal to operate drones. Thats why we cant fly them right here right now. I wish we could. Is that going to change . Can you operate in new york or will you . We cant and we wont. Our intention is to stay clear of controlled airspace which were legally not aloud to be in in the first place. So well never have them in new york city is. Not from us, thats for sure. But the Central Point in all of this, and as the Drone Industry which is so new were still trying to figure out how big the Main Companies are you guys are four people. So much of the legislation, the faa has taken a stance against it for the most part driving a lot of innovation outside of this country. What do you think they should do in order to both encourage innovation but make sure the skies are safe . Were rooting for the faa. For the longest time the indications were they werent going to allow this type of activity. Thats reversed a bit. Obviously fact weve been granted the exemption is a good thing. We believe theyre working on ways to integrate this technology and were looking forward to. That how big could you guys get . As big as possible, obviously. We think this could be applied across the country. Are you using these in the oil patch right now . I know theyre using drones but are they using your product . No were scarily focused on the agriculture industry right now. We have to go but gopro getting into business this week. What does that mean to you . It doesnt mean much to us because i think thats more of a Consumer Product but i think that was a natural progression from them. You have a gopro on here now. Sure do. Is that what you use . Thats 53d robotics program. Dan, thank you for being here. I love getting a look at these. Maybe someday we can see them flying. Dan murray appreciate it. That does it for us on closing bell. Time now for fast money. Melissa lee, whats going on . One chart, five words, the great ketchup trade. I think i heard train. Straight over to you guys. Thanks kelly , mast money starts right now. Im melissa lee. Traders are tim seymour, Steve Grasso Josh Brown and guy adammy. Tonight on fast oils massive spike, crude soaring back above 60 bucks a barrel ghu is this the real rally on deck . Next week with the kickoff to opec, a top Energy Analyst weighs in. Plus billionaire investor paul singer says now is the time to get against treasuries. Will he get burned like so many before on his next big short . First to the story rocking the street bristolmyers tanking, more than 7 on data released from as