Transcripts For CNBC Closing Bell 20160212

For the week but look at that. Were just off the highs of the session right now with the dow up 286 points. We have been tracking overnight sessions in japan, which is hit really hard this week, down more than 10 . But we have black rock global chief investment strategist joining us and he says the market looks attractive right now. Is square a takeover target . Visa revealing its stake in the Payments Company and some on wall street say the move could be paving the way for m and a in the category. Watch out netflix, apple is preparing the First Scripted Television Series starring dr. Dre. We will get details coming up. The markets soaring right now, what happened to all of the recession talk this week . Some say the economy and stocks are actually telling us two Different Things right now, Steve Liesman has what the economy is saying and dominic chu looks at the market. I love starting a debate with my opponent mortally wounded because stocks are higher. Im not more tally wounded. Its a flesh wound. Economists are looking at and saying, it doesnt look like theres a recession in the cards. First thing we want to look at here. Weve had decent data on growth. Cnbc rapid update, 2. 5 , nice bounce back from the week in the Fourth Quarter. Jobs 4. 9 unemployment. Consumer doing well. Ive got low oil prices and low inflation and have zero. 5 gain in wages in the last jobs. This morning this is really interesting. An absolutely sterling Consumer Credit report where the lowest bankruptcies and foreclosures in 2015 in the 13 years the new york fed has been measuring it. The cost of servicing debt is now also at an all time low. Consumer in very good shape to spend because of all of these things. The consumer will drive the economy. I know there are weaknesses, manufacturing and overseas growth. We have debt issues but overall, i think these prevail in the economy. Not injure stinking stock market, dominic chu. Were going to balance things out a little bit. The markets may be telling a different story. You go ahead. A point counterpoint. All of steves points are correct. We dont see that much craziness happening if you look at overall whats going on with the markets, we have plunging u. S. Treasury yields. Why . Because we have no threat of inflation, maybe no threat of growth. Im not going to argue with you, you have the floor. All right. It could be not going to say anything. Just going to say that. Maybe those treasury yields, ten years touched 1. 56 yesterday, at a whopping 1. 75 right now. Its not telling us very much in terms of expecting a lot of growth or inflation. Thats not maybe a good sign here. Also the strength in the japanese yen, also viewed perhaps as a way to gauge risk. Really, thats what you got . A strong yen . It could be. Go ahead. How about this, steve, because markets are a discounting mechanism. Arguably, theyve already taken into account every single bit of data that steve just put up there yet global stocks as measured by the msci, old world stock index entered bear market territory. Youve got Government Bonds let me ask a question about the last one. Why wouldnt global stocks, taking into account the decline in earnings, and is it possible even likely that you have this decline in profits from by the way, an all time percentage of u. S. Gdp. Profit margins all time high. Coming down with higher wages and stocks are discounting correctly profits recession but perhaps not an economic recession. I would say maybe its not the profit recession but were on the krus p of what could be four straight quarters of sales declines. Thats true too. Top line Revenue Growth at s p 500 companies is on the verge of being down four straight quarters year over year. That Means Companies arent selling as much stuff. I will cut the deficit, expand Social Security and. I gotten Chicken Nuggets for 1. 49. Why is it that the best rated Corporate Bond market for investment rated companiy deteriorating horribly. Bear had had corporate debt come to market and approaching levels that have been a warning sign in the past. These are main street companies and big employers youre talking about . Kelly, i dont discount the idea that there is a warning sign out there that those warning signs are the things that create the fear. But you cant create the reason from the question itself. In other words, why are corporate blowing out because they are concerned. I agree theres concern and but let me also be the first one to undercut my own argue the and say it is possible for the u. S. Economy to stop on a dime and doesnt always give warnings of a recession. Im just saying when i look at the current data, even if i acknowledge that its soft, theres no way that i can correlate this incredibly bearish outlook from the stock market with the current Economic Data and what it may show about the future. I would say this, guys, none of us is really arguing that we are in in the u. S. Here. Were not in a recession. Some are. Maybe some are. Were not trying to make the case were in a recession. Just that there are some indicators out there that show maybe there isnt as much strength in the economy an that is still a possibility and thats what markets are taking into account by showing you the prices. As one viewer commented, jobless recoveries to jobful recessions. Im going to put a chicken in every pot. And car in every driveway. And car in every driveway. Thank you. Well leave your pictures at the door. Well get back to you. See you later. Lets get to our closing bell exchange, with us is greg from the wall street journal who pretty much covered this entire topic in a terrific column in the journal today. Hope you get to see that. Ken mahoney is also with us here at post nine. So is peter costa from empire executions and Rick Santelli is in chicago. Greg, where do you stand . Could we talk ourselves into the recession if the markets continue this down slide. Economy is what the Economic Data is showing us. Its very hard to see in the data what is actually a recession. But we know one reason all of us have such a terrible job at forecasting these things because its such a big psychological component. Theres a lot of businesses trying to decide this the right time to make that investment and hire that employee. They look at the market down and have second thoughts. We just heard chuck robins from cisco report that earnings had been light because they are looking at the market and wondering is this the right time to make that investment . Best buy got downgraded bid an analyst because they thought Consumer Discretionary is the next thing to suffer. I dont think well have a recession but the odds are komt fortably high but our cruising speed in this economy is very low, 2 . By definition, the closer you are to the ground higher the margin of error, right. Ken, what what are you doing here . We are look at the market as a leading Economic Indicator and were kind of negative. We lower lows and lower highs in the s p 500, look at days today, sell into these rallies. Especially banks. Banks here got a nice lift on buy backs and so forth. They are an openty miystic bunc anyway. 14 countries have negative rates. Thats a headwind for earnings. I dont know how you get through that. Definitely negative on banks. Peter, you famously got back in at 1865 and acknowledged you may be early in that. You have been. I have been. What are you doing now . I would like to Say Something about candidate liesmans presentation, if you are janet yellen and saw that, you would be raising rates the next meeting because that just shows you we got all of thf bright that was the first thing she mentioned in her testimony, look at jobs. Look at jobs. I dont think its going to happen and i dont think it should happen but there are certain things that are starting to make you believe that thats potentially could happen. But i got in a little early but weve had a couple of dips where ive gotten back in as well. Youre i dont like timing it but i do think there are opportunities. My time frame is different than some people, their time frame might be three months. Mine is longer. Rick, i would love to know where you come down on this. Do you think the fed should be paying attention to real Macro Economic variables or market financial signals . I think she should be looking at it all. Im always shocked at in my impression how little they look at. Janet yellen still talks as if the dollar is at 100. I know 96 is only 4 away. But the fed should be looking at everything, just like traders do in real time, handicapping real changes. They should be looking at it all. I think what they should be looking at the most is how the japanese market has responded since the 19th of january. When they did their negative push, okay, nothing is better to educate than actually using the eyesight, sense of seeing and it just seems to be lost. I mean, negative Interest Rates is the story this week. My guess is its going to be the story for a lot of weeks. Now, maybe japan can United States the test tube some more and try to help the condition of their stock market and counter intuitive aftermath of their currency rally but this is ground breaking. This is huge. And i think that the world should be a bit nervous about negative Interest Rates. I think its a horrible idea and japan seems to be doubling down on the notion if youve read some of the latest headline. I guess what i remember most, in 2013, 2014, part of 2015, releasing numbers, thinking the numbers werent that great and stock market kept making record after record after record. You know why the stock market looks so confusing now . Because everybody forgot how confusing it was when it did nothing but go up and ignore data that was at best mediocre and thats when we considered it good. That was a good five or sixyear rally we had going on. How much of this are we not attributing enough to the international influence on aur own economy. Commodity inflation that we experienced in this country was not our fault. It was china and the huge demand and now its going the other direction right now. How much of that should we be taking into consideration as well . China is 10 of the world gdp. Just we have to care more than we ugsed to. A big chunk of s p 500 revenue dom was talking about, revenues being very weak, thats because of the translation of the very big rise in the dollar. So the stock market in particular has to be very sensitive to whats going on in the international scene. Its harder to make the case that the u. S. Consumer or business that sells to the consumer should be equally worried. If youve seen the latest confidence numbers, it looks like were starting to see a little bit of a lift from the low gasoline prices. I take a little bit of comfort what weve seen in the last 48 hours that some of the positives are finally beginning to be felt and we may be hitting bottom in terms of how bad the international influences can be. I wonder, if the market telling us as well, that it doesnt like the idea of negative Interest Rates but if the fed could come back in with talk about easing and maybe other Central Banks, shouldnt have to be the fed but the dollar is involved. This rerun out of things to buy . Do they not like going that route . Why is everybody going negative . I think theres two things the market is worried about with respect to the fed. They have a plot out there that tells us their base case is to raise rates and for four or five weeks theyve been saying its a mistake. Janet yellen did not say, youre right, were not going to do that. She did signal there was a pause coming. She couldnt because they look at the data. But underneath that is something else. Even if the fed did capitulate, they only have 25 basis points. Youre watching yellen being grilled by lawmakers, but she should ask questions, what have you done on the fiscal side . Somewhere along the way, state lawmaker ez, what can you do . Thats more surgical when it comes to tax and spending and monday policy is a blunt instrument. You have to look at the fiscal side of things. 300 point rally after four consecutive down days this week. Not including fridays big selloff. Oil is leading this charge clearly. Its oil leading it right now. I think there was also positive data this morning. Weve been under a lot of pressure and sometimes there are bounces and with the way the market is, you have the 300 point moves on the down side, everybody can understand that but moves on the upside, even though its churning and a lot of churning and people are rotating back into certain sectors. Theres certain good like the financials for example. Thats a start to see that happening with more money moving into the financials again, thats a very good signal. Im not going to say thats going to happen but if you see that continued, thats a positive. If youre looking to buy financials, you can buy them from ken mahoney. Im not looking for them. Thanks, guys, appreciate it. Have a good long weekend. 45 minutes to go here and again, when our markets close, the next one really will open up significant is going to be china after having been closed for a week and after having seen Global Markets put in pretty shoddy performances. The area where stress was coming from and reacting to what weve seen is why people are a little bit concerned into the weekend but its not showing up in the markets here today. China will trade it twice before we open on tuesday. Thats right. And the dow here with all of that going on is up 301 points and vix down more 2. 45 points and transports up 150 and nasdaq 69. Transport is up even though crude oil is on track for one of the best gains since 2009. When we come back, well talk about whats driving this spike today, the oil boil as one viewer tweet d us here on that one. Well talk about whether the gains are here to stay as well. Also ahead, a prime takeover target, well hash that out with kayla taushe. It started with a single connection. And the network was born. It soon grew from a luxury to a necessity. So at t built a network just for you. One that connects your businesses, devices, cars, mobile entertainment, family and homes. We grow as you grow. Always evolving. To work for you how and where you need it. This is your network. The network of at t. Welcome back, were going right to the sectors, for the week, Consumer Staples, perhaps immune to some of the things were seeing right now. The Consumer Retail sales look good, not great for january this morning of the Consumer Staples up for the week and everybody else lower, especially financials down 6. 7 . Todays rally makes a huge difference, coming into the season, the financials were down 6 on the week. Now a much less worry some 2. 4 . 2. 3 , i was reading the index number not the percentage there, my bad. Improvement certainly over the picture that was being painted this morning. For sure. Oil prices, this might have a lot to do with it, really spiking. Remember yesterday, they were up 3 off the lows, if you saw yesterdays show, anyway, crude oil is up 3 bucks or 11 . Sparked by comments from the uae production minister that a cut could be coming. That remains to be seen though. A lot of skepticism on that. Lets bring in anthony from grz energy. Do you buy i mean, the market responded immediately, big rally. Immediately. But there is everybody i talk to and every human being seemed to discount that that wasnt going to happen. What do you make of this . I dont buy it. If you look at the timing of those remarks somebody did. We were ready to make exactly, somebody did buy it. The weak shorts bought it. But if you look at the timing of those remarks, it came in at the point where we were ready to set new lows that were through 2003 lose for oil. It was right on the cusp of that and then if you remember, we were above 31 when this started and once we drop below 30, this looked very weak. I counted up a few lots and it looked like about 15 to 20,000 new shorts came in between monday and thursday of this week. You know what happened . They all covered today basically. What i was going to ask, people looking at the broad markets and move in oil are wondering how much of this might be short covering. What would you venture to say. The vast majority will be short covering, maybe two out of three dollars. The other dollar rally that we did see is going into long weekends, historically the market does rally. If there are a lot of shorts in a position, nobody likes to be short going into any long weekends because what happens is any kind of news that comes out will spike the market rather than drop it further. So a lot of those shorts came in, a lot of them covered, going into long weekend. I looked it up. Before thanksgiving, before christmas, before new years, all rallies up 2 and above in oil prices. Youre selling this rally then . Im selling this rally. As you mentioned, china opens up on monday and tuesday. Lets see how those markets react. This is a little overdone to the upside as the oil market does. It gets overdone to the upside. Theres huge amount of supply out there. No reduction in production. So theres no reason to think that any of that is going to change any time soon. I want to sell these rallies. Very good, anthony. Always good to see you. Have a good weekend. Anthony grisanti and you can hear they are starting. They started early this afternoon the tradition you get on floor of the New York Stock Exchange before a threeday weekend. They are closed on monday for president s day. A rally continues and dow up just under 300 points for this friday, capping off what had been a very weak week for the markets. Up next, is square ripe for a takeover. Well discuss that. Black rocks global chief investment strategist says japan is the place to invest right now, even as stocks cap off their worst week since 2008 and that financial crisis. That and more coming up on closing bell. In new york state, we believe tomorrow starts today. All across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. Like in utica, where a new kind of workforce is being trained. And in albany, the nanotechnology capital of the world. Let us help grow your companys tomorrow, today at business. Ny. Gov for your retirement, you want to celebrate the little things, because theyre big to you. And that is why you invest. The best returns arent just measured in dollars. Td ameritrade®. Welcome back, little more than half hour to go before the long weekend. Dow is up 290 points into that. Pandora falling on disappointing Fourth Quarter earnings. A New York Times report that the company is exploring a sale today. Down 16 . Square is popping on news that visa now owns a stake in the mobile Payments Company of just under 10 . We should note, twitter, jack dorseys other company is also rising as well today. Kayla tausche is here to make sense of it. The filing overnight seemed to take the market by surprise. They were interpreting it as an overly optimistic strategic move by visa when it stated visas intention to convert the investment from private liquid Class B Shares to class a, letting visa sell shares when the lockup expires in mid may. The problem is the a class of publicly traded shares is very small. While visa stake is only 1 of squares total outstanding shares, it appears much larger as a percentage of class a. Im told visa has not added to the stake since 2011 and filed the filing this week because the deadline to disclois is tuesday. Others who hold Class B Shares could make similar disclosures in the next few days. What would dorsey think about one day being owned by a payment processor . I asked him that very question on ipo day. We have a lot of power in our independence. As you said, we can really be a platform that is ago nos tick to devices and networks. Thats important because our sellers shouldnt have to care what comes across the counter and how they are buyers are pay egg. The buyers should be able to pay with whatever they want. The technical term as he mentioned is platform agnostic, they can process apple pray, android pay, you name it, taking away lucrative business from the Company Siding with one of those. You can understand why the likes of visa would want Strategic Access to see what their innovating on. Just a question as you mentioned about this lockup expiring, its sort of surprising to me that the class a shares are the publicly traded ones and these were kind of off the radar screen in a way. Im wondering, how are we supposed to get kind of like full understanding of how many shares might be out there with square and bunch of other companies when the lockup periods expire if they are in a different class of shares. It depends on what they choose to disclose. Many have dual class share structures because the founder has the Voting Rights that accompany those shares. Those will stay class b. The likes of visa when they made the investment in 2011 and actually was public, dorsey made a statement about it at the time and visa acknowledged it. We didnt know how big it was and there are probably a lot of other investors that might similarly have been disclosed in the past. We dont know the size. Pulling back a little bit, we add twitter to this equation and you wonder what this does to the jack dorsey empire, right, assuming that visa does make a play for this company. Im not sure that visa would make a play. It certainly would be able to afford Something Like that but square hasnt even reported its First Quarter of earnings as a public company. You have to see how it performs in that way. If youre at square, there is real value in not turning away master card, amx, all of these other companies because you want to be able to accept any type of payment. Twitter, i think is potentially just short covering. So as we continue to watch in the timelines on these new Ipo Companies over the last couple of years, i guess then well find out what the filings in a sense as to whether people who are already invested but we dont know the full details are now going to sell those shares. Is that right . Yes, and as any company that goes public approaches its lockup, any shareholder who intends or just wants the option to evaluate potentially maybe thinking about selling those shares, would have to file that. You will see, it wont be opaque foufr but jack dorsey has the majority of the control of this company. Thats what we know. We know that. Thanks, kayla. Time for a cnbc news update. Hi, sue. Heres whats happening. Pope francis meeting with the head of the Russian Orthodox church upon arriving in cuba, a Historic Development in the 1,000yearold xis many that divided christianity. Gop president ial candidate jeb bush campaigning in South Carolina and at a town hall meeting said his experience as governor of florida cannot be matched by the legislative experience of opponents ted cruz and marco rubio. A woman in boston was killed this morning by a flying man hole cover on interstate 83. The man hole cover became dislodged and flew through the windshield of her car. Investigators are investigating what caused it to become loose. Smartphones could be earthquake detectors of the future. My shake, available on android and released by the university of berkeley could give warning without their own sis mow logical instruments. You and i grew up in earthquake country, its nice to have that kind of warning but you could also cause a panic if people you could. It is it doesnt say quha the magnitude is going to be or epicenter. It apparently and its still kind of sketchy, its when the earthquake starts. It doesnt predetermine the earthquake necessarily but as they start to get an inkling of it. It confirms, yes, youre in an earthquake. Yes, were in an earthquake. Very good. Im glad i didnt have to deal with that growing up. Thank you so much. Sue herrera. 30 minutes to go here. S p up 33 points to 1862. The transports are higher and nasdaq up 66. Leading trader will tell us what hes watching into the close as we close out another wild week here. Black rocks global chief investment strategist makes the case for investing in japan. The worst week since the 2008 financial crisis. He wants to buy these dips though. Stay tuned. In the final half hour trade for this friday. While we were in commercial, it was the trader whoop whoop whoop that happens before a threeday weekend and he was leading charge, standing on a table and arms flaling wildly. That was impressive. Thank you, i was going to put the top hat on for abe lincoln. President s day on monday, i know. Thank you very much. Before we run out of time here, what do you think about this rally . Which market is more correct, todays ralgly or selloff we saw four days this week . I think its been a tough year. I would have to say we have tough sweating in front of us. More than a few guys are relieved by the very versal. Are you surprised they would get into the market before a threeday weekend and china opens after a week off and theyll have two days to trade before we trade. That was the concern. You have three days and you have the risk here, which indicated that maybe guys were feeling the risk was to the upside, which was something that people were starting to talk about and getting a little bit overdone here. Maybe gold was telling you that a little on thursday on that big move. Its theres a lot of things going on here. And one of the guys are trying to figure out, what about the Energy Sector and what about the price of oil, 15 moves up and down at these levels this is significant, youre not seeing it in the retail sector, meaning it is consumer taking money and doing anything with it. A lot of questions here and we have tough in front of us, but they are finding levels and taking shots and the action is good. Glad to be here with you today sir. Thank you so much. Kelly. You guys together are the best. Japanese stocks are getting slammed this week, down more than 10 and more than 20 this year. Our next guest says space is starting to look attractive. He joins us now, russ, weve been teasing the segment and were dying to hear the case for buying japan. Its funnily, japan has been hit with everybody else and whats also interesting the japanese Banking Sector has been hit along with the paBanking Sector in europe. Theres concern in europe at the capitalization of european banks and in the u. S. Concern, its overblown, about the Energy Exposure of u. S. Banks and problems in japan. Japan, the concern is negative rates, all of a sudden the yen jumped up its strength to 112, 113, i dont even know. If that on futs the entire approach of kuroda and abe to ease policy, theyll have so ease more now. If they go negative or do things more than they have, it will hurt the banks. The Movement Towards negative rates by Central Banks is going to be problematic in general because that is a tax on the banks. The issue in japan is the yen actually is not as much of an issue for japanese banks as for exporters. Even if the bank of japan goes slightly more negative, but the solid effect of that is a weaker yen, then youll see strength in the japanese stock market sfwl what about the banks . Will the japanese banks be hurt if Interest Rates there go further negative . Banks anywhere will be hurt if you continue to see Central Banks use negative rates as their primary policy tool. That said, japan overall is probably going to move with the Global Market in terms of are we going to see another recession . Is china stabilizing . Unless we have a worst case and scenario, they look arguably the most oversold right now. Clearly you wont buy the banks then but what will you buy . Lets think about the companies that would benefit from the Lower Oil Prices as we know japan imports all of its oil, right . Japan if it is lower, that helps them to some degree. Where are you going to buy here . It helps the manufacturing segment and utilities in japan. You raise an important point. Its not just japan. India got crushed this week produced a decent gdp report. Another country where you import about 85 of the oils. Weve seen all of these markets follow oil lower in the case of russia brazil, that seems sensible, harder to justify in japan or india, other importing countries particularly in asia. Russ, would you be long in japan if you knew they were going to further tee value its currency . No, i would not. If you believe china was going to aggressively, not just have a minor slide in currency, a large devaluation they were not expecting, i dont think you would be want to over under that scenario, a big devaluation in china will put most markets at risk. What is the forecast for what happens with the yen, that it weakens obviously, right . I think bank of japan would like to see it at a lower level. What weve seen seems like a severe move and seems strange. We hear all of this talk about the yen is a safe haven bid. Its not clear why in a risk off environment you want to agres gresively go to the yen rather than the dollar. So many people have come through this week and last week saying the markets are overreacting. What if they are not . What if they are forecasting a more severe slowdown than we can foresee right now . It is possible. I think that is the question. Again, in fairness, youre seeing the action in credit markets and commodities and commodities more about supply. But really this comes down to a simple question. Do you believe the Global Economy is sliding towards a recession or more significant slowdown . If you did and earnings estimate still have further to come down, markets could go lower. If the belief the economy will stabilize at a low level, then this is creating buying opportunities. All right. Thank you so much for joining us, russ. Thank you. 19 minutes left in the trading session. Coming slightly off the highs, they were up more than 300 points and up 267 right now, s p up 30. Stocks are rallying today. Up next, is it time to ditch the strong performing safety trades like utilities . Well explore that. And then later, Many Technology stocks are cooling off. Now the San Francisco Housing Market is doing the same. Coincidence . Maybe not. Well get details coming up on closing bell. 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We have the dow heat map, 28 stocks higher today, the Party Poppers are merck and j and j. Reflecting a more bullish day. Look at the financials, jp morgan up 8 . Because theres the story out that the surging on news that chairman and Ceo Jamie Dimon bought half a million shares of the companys stock with his own company paying 25 million for that stake in the company. And goldman is well up 3. 6 today. Utilities as weve been talking about the sectors here, theyve been outperformer so far this year. How much more upside can there really be here . Morgan brennan joins us more to explore. That certainly is the question especially today when youre seeing everything rally except utilities but the dow jones utility average is up 5. 5 . Compare that to the dows loss of about 8 . So investors have flocked to the safe haven feature for many reasons, Global Economic uncertainty, youve got falling treasury yields and dividend cuts by Energy Companies that have made utilities payouts seem that much more attractive and stable. However, sectors getting expensive. Look at the forward priced earnings ratio and compare that to the broader s p and you can see the jump in utilities. Theres stock picking to be had. Higher growth names better positioned for Clean Energy Regulations like Dominion Resources and next era energy and companies that he says are really well levered to u. S. Infrastructure coal retirement and Renewable Energy adoption. Exelon is awaiting merger and pin cal west, thanks to 6 Earnings Growth and utilities allure as a potential takeover target itself. Back over to you. Thank you, morgan. What a great rotation, almost it feels like these days, ats least for a day. Lets see what happens after the long weekend. Lots of speculation going both ways. Usually people want to take risk off the table. Ahead of a threeday weekend. There was every reason to believe this could be another down day today. And yet some were taking the flip side, maybe someone could come into the market here. A number of Different Things could be going on. The dow is up nearly 300 points. And this being a friday, there is one thing you can count on, that is that wall street veteran david darst will be here with vice on how to put your money to work. Hes been saying buy japan for a while now. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. E trade is all about seizing opportunity. So im going to take this opportunity to go off script. So if i wanna go to jersey and check out shotsy tuccerellis portfolio, whats it to you . Or im a scottish mason whose assets are made of stone like me heart. Papa youre no son of mine or perhaps its time to seize the day. Dont just see opportunity, seize it applause watching tvs get sharper, youve had it tough. Seize it bigger, smugger. And you . Rubbery buttons. Enter the x1 voice remote. Now when someone says. Show me funny movies. Watch discovery. Record this. Voila. Remotes, come out from the cushions, you are back. The x1 voice remote is here. Welcome back to closing bell. Nine minutes to the go, the dow is up 291 and s p up 33 points. Our friend what do we call you . Independent Investment Consultant david darst joins us and were standing in front of the exxon kiosk with the stock up today, oil big come back. Do you believe opec is ready to cut production and oil has bottomed . I think theres a good chance of it. I think opec is divided into two groups, you have the venezuelas and nigerias one group suffering might will and united arab em irates and saudi, they have said that if iran would agree to cut they would consider cutting. That would be a boost for oil, boost for the markets. It would help the currency markets. Its interesting were standing in front of exxonmobil because John Davidson rockefeller said more money has been lost by people in properly searching for yields than in all of the Bank Robberies in human recorded history. I love that. Somebody tell mike santoli that. The zero Interest Rates and negative Interest Rates cause more overcapacity. Funny you should mention that. Youve been pounding the table on japan for a long time. Does this make it more compelling or not . Russ loves it right now. I love japan. I think theyve got the restructuring story and valuation story and growth story. We will see how china opens next week having been closed all week with the Lunar New Year holiday. Japan lives next door to one of the worlds great deflationists right now, china. Japan needs to step on accelerator as far as structural reform. Theyve done the monetary and currency. Its strange to me that the yen has been rising after they cut Interest Rates to negative which they did on january the 28th. The people have been piling into yen as a sort of haven currency like the dollar and like gold, which i have also mentioned here as a place to keep calm and carry on. Thats what you need right now. Defensive stocks, telephone companies, utilities, Consumer Products companies, Drug Companies that can keep their yield. You want those, you would be loading up on those . People have been moving in that direction. Theres some concerns about the valuation. Great point. There have been 15 bear markets since 1928. 15. On average a bear market dropped 44 . This one is down 15 . It lasts 20 months and this one started last june in the top. Its been down about nine months. In my opinion, if this is a bear market, what would be driven bit a recession. If its not a recessionary bear market, it drops 28 , which its dropped half of it and only last six months which its beyond on time. Are we going to have a recession or not . Im at 50 or higher. Wow. He leaves us with the headline, i hate it when you do that. Happy valentines day to everybody and if he or she says dont get me one, they dont mean it. See you later. Life advice. Well come back with a closing countdown with the dow up 296 points. Well talk after the bell about apple reportedly making its first original tv show starring dr. Dre. John forte will join us coming up. Youre watching cnbc, first in business worldwide. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain and rain. Water got inside and ruined everybodys everythings. 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E trade is all about seizing opportunity. And id like to. Cut. So im gonna take this opportunity to direct. Thank you, well call you. Evening, film noir, smoke, atmosphere. Bob. Youre a young farmhand and e trade is your cow. Milk it. E trade is all about seizing opportunity. We cannot come to ab end fast enough for some people. Its almost there. Up 300 points on dow. Lets look at fiveday charts, the s p because the number that everybody was focusing on like a laser beam was 1812 on the s p. Thats was hit a couple of times yesterday and then bounced off of that. It happened as they announced the uae oil minister was doing his things. Coincidence, i dont think so. So many skeptics. Oil also bounced. So for the week the s p is virtually unchanged. Wti crude today up 10. 5 . Thats off a high that was set earlier. We were in the 29 range, with up more than 12 . For the week oil is still down 6 plus percent and the tenyear got down to 1. 53 at that v bottom before returning to the levels we see at 1. 73 . The other highlight had to be gold. We started the week at 1150 wrote it down, 1165. Got to 1253 before the pull back began for week up almost 7 . Complete reversal. 230 yesterday, the whole world changed, uae minister comes out and says we may get some kind of what happened . Nothing happened. Nothing has changed. Have you met anybody that believes that . Why did the market rally . You tell me, im rather amazed. Look at this reversal. The s p down all week, we moved 50 points in the s p in 24 hours. Crude down all week now up 10 . Gold is rallying all over the place. Now down today. The yen of course had been strengthening everybody was freaking out about that since 2 30 yesterday it has weakened. The whole world went the other way around. What happened to the threeday week . That mantra all year. Not now. I dont know. Its a little bit weird to me and the answer is, nothing has changed. There you are. Thank you, bob. Good long weekend. Were going out on the highs of the session. If youre trying to figure this week out, youve come to the right place. Stay tuned now for our two of closing bell have a good long weekend, kelly. Thank you, welcome to the closing bell, im kelly evans and we have quite a rally to close out whats been an awful week on wall street. Dow 310 points up today, led by jp morgan, 8 , goldman having a nice rally as well, nearly 2 gain. Same for the s p 500 up 35 points on the session, 1864. The nasdaq up 70 points today. Again, plent tif concern coming into the trading session about what was happening this week. Now maybe some of that coming off. Well get into the reasons why in just a moment. Oil being one of them. Look at this move, a 10 jump, were talking about just under 29 a barrel from a low of just over 26 in the last day or two. And how whether this can persist is swirling around the floor as well. Joining the panel, mike santoli along with evan newmark. Welcome guys. Guy adami joins us too. Youve been watching this market all day. I have. Predawn to the close now, what do you think . Came into it with the nikkei down 4. 5 , the market lifted itself out of the danger zone. We came off the january lows. It seems like one good aspect was one the rally did build kind of slowly through the day and close near the highs and two, it came on strong u. S. Economic data. The good retail sales number and core retail sales number was probably a net pro. You might argue maybe they should make more but it doesnt have to be dollar for dollar. We spend a lot of time in the zone of 1850 to 1860 the s p. People are wondering, is this how markets bottom . Are these kind of sharp upward signs a sign were putting in a bottom or just another head fake and dont be fooled and we could go down again . I dont think anybody really knows. I do thirveg think theres a bid furcation of whats going on. Its been consistently good, hasnt been bad. The bond market has been saying something totally different. The bond market has been saying that theres not just a global recession but if you believe in negative Interest Rates, kind of quasiglobal depression, stock markets kind of priced in for maybe a mild recession. Are you putting more money to work in the stock market . I have been over the last couple of days but i was kind of 1800 was my like go big kind of level for the s p and never really closed near 1800. It always bounced back at the end of the day. I have been putting money to work really since last summer in oil, in a van guard energy fun. In Vanguard Precious Metals Fund also, build my positions. It should hedge your short my tbt . My tbt has been pounded like a veel chop, down 30 . On investment that i said i kind of was like my downside is 15 . Im down 30 . But i think yesterday may have been the turn. I cant tell you there was a turn. Lets bring in guy adami, to your credit, youve been saying dont believe this drift higher in Interest Rates, were going lower, back to 1. 5 , we got there in the last couple of days and is that kind of capitulation for you . For a couple days it did. I thought 1780 in the s p, thats what ive been saying for a while, got to 1810, stopped on a dime then you had basically three positive headlines for the market, 2 30 yesterday uae headline jack will speak to that and our post market during our show jamie dime on announces he bought stock, jp morgan and Deutsche Bank got a reprieve for the short term. Those three things coupled with the fact were going into a long weekend, one of the things we talked about last night, dont fade it, that proved to be correct. Were closing on the highs and no mans land, you come in 1940 is reachable on upside and if something comes out out of china and japan does something crazy again is their want to do, that 1780 level comes back into the cross hairs. I dont think you fade tuesdays move either, whatever it may be. You mentioned jackie and oil and the full crumb here. Lets bring in jackie. What are people saying about this one . Let me start off by saying, best one day move for oil prices in seven years. A 12 gain and finished at 29. 44. There was some conversation that there could be a bottoming process going on here. Some people were saying if we touch those january lows of 26 and change for a second time, that would somewhat indicate weve reach a bottom but then the other side of the coin is saying not so fast. When you see wild swings like this, you need to take a step back and ask why. Todays move technically oriented, a lot of selling yesterday, you buy the dip and also get short covering, were heading into a long weekend and people dont like to be short. They dont want to be mispositioned. Meantime. The dollar playing a big part. Weve come down a little bit and dollar index is supportive, as guy mentioned, a lot of opec chatter, latest from the oil minister suggesting that we may see an opec cut and people telling me, interesting when the timing of that release was when oil was hitting that january bottom again, a low we havent seen in 13 years. The conspiracy theerlryes about opec are out there. What we need to watch for next week, we saw 28 more oil rig s come offline. Is that going to impact u. S. Production . When we come back to the fundamentals tlsz no reason for a more like we saw today. Thank you, jackie the question as well, whats going to happen as china goes to reopen. Lets bring in jim bianco right now, saying that china is a big concern. Weve had all week off from talking about it from talking about the shanghai composite and all of that. What do you think happens next year . Well, i think if you look at the way the markets have traded this week, theyll open down around 5 or so. That can change between now and sunday night but that should probably put them right back at their lows for the whole move. Theres no doubt china has got a problem. Chinas economy has been the slowest weve seen since tiananmen square. Thats a 25year low in terms of their growth. Weve seen huge capital outflows almost 100 billion a month. Probably their biggest overriding problem. Everybody is trying to get their money out of the country. Its not going to change. If they are the engine of the world they are still having problems and well continue to sputter until they get their issues thats fair enough but the question for entire Global Economy, will they be able to manage this slow gradual decline in the currency or economy or do you need to dlop the currency down 20 and yes, it would be problematic for Global Markets in the short term but maybe that could stem the outflow of capital and maybe that would start to put reassurance this is a twoway market. Lets be blunt about it. They have not managed it very well. They wouldnt be in this position if they were able to manage it very well. I dont think they are going to continue to manage it very well. Its going to be a slow bleed as they pretend theres no problem and prop up markets as far as we go forward from here. Its going to continue to be a problem. Unfortunately, i wish i could say theyve been very competent in the way theyve handled it but they havent. Bring in the panel. Mike santoli here, the way the markets are set up, you might argue their price if you look at Government Bond yields for some type of financial accident or dramatic slowdown from china or rest of the world. Where does that leave us with what looked like a short term buying climax in treasuries yesterday . Youre right, they are kind of set up for some kind of i want to use your phrase, financial accident. When you have the specter of negative Interest Rates and nobody knows what that means and thats bothering everybody more than anything else, its kind of a hard concept to get your arms around. Youve got all of the Central Bank Intervention and youve got the financials especially let out of europe tumbling the way they are, everybody is worried theres going to be a financial accident. Thats the biggest concern that we have right now. And thats what reflected in the bond market. Thats not going away on monday or next week. Its going to take time before we start to worry or work through problems were convinced especially after the european banks that the financial accident is not going to happen. I actually thought this week was pretty good in terms of what we were hearing from janet yellen and dudley. Im one of these you liked im from the lets normalize camp. Markets are fighting the fed. This is one of those instances the old trader saying dont fight the fed. Entire bond market is fighting the fed right now. I think negative rates in europe, i dont think thats a good thing. I think its going to turn out thats not a good thing and sooner we get away from that whole negative rate world, everybody will be better. It doesnt give confidence in the bafrpgz or consumers. Guy, do you agree . To a point i agree youve got to get away from it. Once you go that direction, its extraordinarily difficult to go back the other way. The japanese are trying to torch their durntcy. Lets just put it out there. Thats whats going on. And the fact that the yen is actually strengthened until today has to have them scratching their collective heads. If you once you make the decision to go negative, at what point do you stop . You heard talked about china deval and asked the question, ill give you an answer. They want to play at the table and be upstanding citizensant dont want to do it, theres going to come a point where they say our currency is 40 too expensive, well do a oneoff event and torch their currency and then i dont know what happens. I dont know what happens because weve never seen anything like this before. Jim, if china were to do that, would that while it would be disruptive in the short term, could that solve the problems and keep the rest of the world from having to go into negative rates . Yes and no. Youve got to be careful. If they do that and have some kind of big devalue, its destructive in the short term. We rerun october november of 2008 all over again. But then dont worry, here comes march of 09. Think where the european banks will be starting this position on. Part of the problem with a bank like deutsch bank, their huge exposure to china to begin with. If they have a big devaluation on top of those other problems, we may dry the institutions to their needs and will look like november of 2008 before we come out the other side. Were running out of time, what would you then say again is this whole rate discussion swirling about negative Interest Rates and deflation and commodity collapse and what are Central Banks going to do. What is it that would for you be a sign that a catalyst for a move higher in u. S. Markets and some acceleration in the economy is actually happening . What would be the sign to you thats happening . I want to agree with evan, if the fed starts leading the way towards normalization, that they dont panic and cut rates and dont panic and say look, this period of extraordinary intervention by Central Banks is over, were going back to normal. Now its going to be painful to get there but they need to stop. We cant keep talking about more qe and more negative rates, abolishing currencies, direct monetary intervention, whatever else weve tried to concoct to try to fix the problems. We need to go back to the way we were prior to 2007 without extraordinary Central Banks. That would be the most bullish thing we could do. Im not holding my breath but you asked me what the most bullish thing would be. I agree with everything he said 100 . I dont know how you get back to any sense of normalization. Ill say this because somebody is texting me the word we hear, everyone thinks this. Theres a huge Bear Sentiment taking hold as well, probably at levels we havent seen in quite some time. That in and of itself could get us to trally over the next few sessions but the overriding conditions out there and im not trying to fear monger, looking at the landscape, things dont make sense. Almost by definition, the path that a lot of these Central Banks are going down cant end well. Well see what happens. All i would say fed officials are not talking about these extreme measures, they are trying to stay to the script and the fact they are not going to do four raises takes the pressure off temporarily from what china may have to do. Really appreciate it, guys, thanks you for joining us. Have a great long weekend. Well see what happens with these markets and much more with guy and fast money crew at 5 00. Oil seeing a huge rally but tom kloza says the worst isnt over. Find out why from him tonight at 5 00. Turning the tables, thats what amazon is doing with plans to expend its experiment with brick and mortar bookstores but independent book sellers are not exactly quaking in fear. First, take the money and run, run for president that is. Up next, break down what candidates wall street is putting its money on and one name may surprise you. Oh remotes, youve had it tough. Watching tvs get sharper, bigger, smugger. And you . Rubbery buttons. Enter the x1 voice remote. Now when someone says. Show me funny movies. Watch discovery. Record this. Voila. Remotes you are back. The x1 voice remote is here. X1 customers get your voice remote by visiting xfinty. Com voiceremote. Welcome back, the race for the white house is heating up. Now that Chris Christie has suspended his campaign, one donor is shifting his support to another candidate. John harwood gives us those details. Its been a rough campaign for wall street so far. Leave aside Bernie Sanders, youve got donald trump talking about corporate blood sucker and ted cruz talking about corony capitalization. You have among the republicans, jeb bush, 2. 4 million from the Securities Investment industry. Donald trump down to 12,000 in donations and hes leading the race. Now thats got some investment professionals looking for other candidates, the bill ackman trying to get Mike Bloomberg to enter the race. Ken langone has switched from christie to john kasich but his ties to wall street themselves are a liability. Check out this ad. I was a banker and proud of it. This is the man that was a managing general partner at Lehman Brothers when it went down the tubes. In Congress John cakasich wre billions in lone leading to the financial crisis and he made millions while taxpayers were forced to bail out wall street. And where did that ad come from . From the super pac backing Chris Christie who happens to be ken langones former candidate. Our john harwood. Thank you so much. If you thought wall street was only backing more conservative candidates, think again. Some financial world backing on the democrat he can side. Those wall Street Campaign contributions a lightning rod between the two democratic candidates, take a listen to this exchange to get a feel for just how controversial wall street is among democrats. I debated then senator obama numerous times on stages like this and he was the recipient of the largest number of wall street donations of anybody running on the democratic side ever. Now, when it mattered, he stood up and took on wall street. Lets not insult the intelligence of the american people. People arent dumb. Why in gods name does wall street make huge Campaign Contributions . I guess just for fun of it, they want to throw money around. Yes, i believe that as a result of the illegal behavior on wall street that wall street that drove this country into the worst economic down turn since the great redepression given that you might think Bernie Sander has taken zero money from wall street donors but actually in all of the year 2015 hes taken about 55,000 from people in the securities and investment industry. I actually was able to locate those folks on wall street, call them and talk to them yesterday. There are some Bernie Sanders supporters on wall street. And what a couple of them told me was, look, ultimately, raising taxes on these institutions and ourselves could be a good idea. One of them said, look, we need more regulation and need wall street to be hemmed in by the same rules that apply to everybody else in society. If you look for them, you can find Bernie Sanders supporters on wall street although they are very, very rare. Frankly, with Bernie Sanders, i cant believe hes keeping the money. Hes called the Business Model of wall street a fraud. Is this going to be a problem for him . I dont think so. Ultimately it comes down to each individuals choice. These are not contributions that are given by the institutions themselves. These are given by individuals, sometimes small donations, couple of them were 250 bucks. There are people on wall street who believe Bernie Sanders would be the best president of the United States. And they are entitled under our system to give him money and entitled to take it. Whether that causes a political headache for him, i dont know. He has much, much less money from that industry than almost anybody else running out there. Hes really very small kmared to Hillary Clinton or ted cruz or jeb bush. Thanks so much. What do you make of this . I guess anybody who works in any industry can kind of just be dissatisfied with the direction of things and maybe on wall street, it seems as if everybody is voicing words making them an enemy of wall street. Ultimately also, if you look at donation numbers and what was really bought for those donations for jeb bush and rest of it, these donations are starting to seem like a voluntary tax on the grandiose or something. Not like you can buy your way to Elective Office right now. Wall street, i cant imagine running for office because its almost a sin what people have to actually say to get themselves elected. But i think Bernie Sanders believes this. He probably does. Im not sure anybody else. Wall street is a convenient punching bag for politicians, its been that way well over 100 years and will continue to be that way. I prefer a politician talks to me like im an adult with nuance and fact as opposed to broad brush statements about the evils of wall street or that guy is bad or they should be in jail. You havent gone to Bernie Sanders they should give senators that supported fanny and freddie mac all those years, should be in jail with the wall street people. Hows that very nice. Kids are donating to Bernie Sanders and youll find out about it. Watch out Netflix Apple is eyeing original programming, word that dr. Dre will serve as executive producer of an apple produced television series. More on this story when we come right back. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. All across the state the economy is growing,arts today. With creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in the hudson valley, with world class biotech. And on long island, where great universities are creating next generation technologies. Let us help grow your companys tomorrow, today at business. Ny. Gov welcome back, we have a news alert. Susan lee joins us with details. Lets get to it. Just ahead of the long weekend, Just Announced we have a new positions when it comes to morgan stanley, and exalta in terms of dissolve, meaning reductions in terms of holding, tmobile and iac interactive and increasing in the last quarter, i increased his position in dow chemicals and also allergan. When it comes to decrease, this is also a big mover for him. Hes gone out of his yum brands positions, he had 11. 6 million shares and not only holding 75,000 shares. Kraft foods only holding 85,000 and ebay also another reduction as well. Back to you, kelly. Thanks, susan. We know dow in particular was a point of contention. Without a doubt and still had a campaign there. When he folds his cards its because he got the change he wanted or it doesnt look like its going to work as an a activi activist. Morgan stanley thing is interesting. Timing was apparently pretty housy. Or when it was down 28 on year might have seen when they declare it though six weeks afterwards or Something Like that. I think his timing probably would have been bad. Apple getting into the original scripted video programming area. Dr. Dre, who sold beats electronics is currently filming the First Scripted Television Series and described as a dark drama. The show will be distributed by apple music so is the company trying to take on amazon and netflix here . What do you think john . I doubt it. There are a number of Unanswered Questions along with this. Apple has stayed out of the original content game for so long. It would take a lot of money and Big Organization to catch up. Theres also the brand question. I would be surprised if they release a dark autobiograph cal drama under the brandnew apple. Maybe under the name beats but there will be a lot of risk this story in the Hollywood Reporter describes an orgy scene, if youre apple and trying to sell iphones and ipod touches to kids, you want that associated with your brand. But it is interesting because apple music, itunes Music Festival thats become in piece of original programming where theyve done concert footage and produced this event that they then distribute through apple tv and other ios connected media. But if they want to have a big impact like netflix or amazon, they need to bet bigger than this. We also know its sort of that enticing stuff that netflix sells to people, the success its had has come by the shows you would find by hbo and showtime, i wouldnt be shocked if this was the time of program that might get attention. For those services its because they want to hook you in subscription. Theres a specific sale they are trying to make. Here it would be a oneoff or if they got distribution on skinny bundles or something it makes sense. Does it say anything whether we can infer that the beats folks have some kind of sway in the company to try new things . You know, mike, ive been surprised how little they have done with beats outside of apple music. Remember, this was a billion dollar revenue headphones business. They havent even updated those beats head phones for this past holiday season. It looks to me like a product thats langishing, it was doing so well. As far as sway within the company, i cant see dr. Dres impact on apple at all and jimmy, weve seen apple music grow and seen beats 1 radio and dr. Dre showed up a little bit in that but aside from that, i frankly have been shocked how little dre weve seen given the cultural influence he has. One of the things that struck me as odd, tv show would be distributed through a Service Called apple music. If this is going to be the future for the company get being into like video and original programming, would they rename that service . Itunes stuck with the itunes name even though there was an app store associated with it that this little to do with music for a long time. They distribute music videos through apple music and one might wonder is this project music driven and some sort of rock opera perhaps that fits into music with details on xant details in the Hollywood Reporter piece. We dont know but they have other means of distributing it besides apple music that could distribute it through itunes regular channels even through an app on the app store if they choose that. I dont know that they necessarily decided on a distribution method yet. Its still very preliminary. Mtv was Music Television at one point. Is that what the m stood for . By the way, see what im talking about . You cant, shes a real mill n millenni millennial. My references. Time for a cnbc news update. Lets get over to sue herrera. I was an mtv generation kid. Secretary of state john kerry says diplomats meeting in munich dwred to work with warring factions in syria to implement a nationwide cessation of hostilities. He spoke following a meeting of representatives from the u. S. , russia and other world powers. Senator john mccain speaking at the News Conference with the serbian Prime Minister in bellgrade praising the government for the handling of the migrant crisis. His comments come after holding talks with serbian government officials. John cakasich campaigning i South Carolina. During a speech he said his platform is finding Common Ground and making government work, not just blocking the efforts of the opposition. Lady gaga is joining ma tells monster high lineup of dolls. She and her Costume Designer sister are designing the doll in the likeness of lady gaga and mattel has released the silhouette. They say the doll will be available this fall with all proceeds benefitting the born this way foundation. All right kbr, youre up to date. Back to you. Looks like a war shop blog. Im looking forward to the tony bennett doll. You never know. Theres a new head of the barbie line, mattel announced that today. He could be the one. Thank you, have a great weekend. Hedge funds are off to the worst start in years, we have someone coming up who hasnt seen the selling many have been predicting which means the broader selloff could get worse. San franciscos Housing Market has been on fire and the heat is cooling off. Whats happening in the city by the bay. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. Perfect driving record. Perfect. No tickets. No accidents. That is until one of you clips a food truck, ruining your perfect record. Yup. Now, you would think your Insurance Company would cut you some slack, right . No. Your insurance rates go through the roof. Your perfect record doesnt get you anything. Anything. Perfect for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claim centers are available to assist you 24 7. For a free quote, call Liberty Mutual at switch to Liberty Mutual and you could save up to 509 call today at see Car Insurance in a whole new light. Liberty mutual insurance. Welcome back, heres a look how we finished. Very different picture, a big rally with the dow up 313 points. S p adding 35 and nasdaq adding 70 and oil the story of the session, up 11 , about three bucks, over 29 a barrel. Hedge funds still having their worst start to the year since 2008. Notable names like Pershing Square and tiger global and glenview getting hit hard. S p down 9 year to date. Our next guest says we havent seen much selling this year. It does mean things could get worse for the market. Joining us now, the Hedge Fund Correspondent and now at reuters and we welcome you back. Its been so brutal for these guys. Its not surprise its been a miss area bl year for equity and stock picking hedge funds. But if you look at the data, they are not hitting the panic button yet and liquid date on mass and getting tapped on the shoulder. You can look at that in two ways. Thats a great sign, they are still optimistic and looking at the Market Action and saying, long term were going to be okay and stick to our guns and try to make money off of the value thats in the marketplace right now. Or you could say if you think its the dumb money, these guys havent liquidated yet, if things go down even further and they really hit the panic button, thats going to effect everything else. What do you think, mike . I would wonder if we would expect in january or february to see the panic button hit. They dont necessarily fear you have a terrible year, your year is shot, i just sort of wonder how the seasonality plays into this. I dont have the impression hedge funds as a group came into this year with heavy leverage betting on great things and being very aggressive. What would you say to that . Relatively the outlook is bearish, but if you look at the net positioning, the balance of long and short bets, most hedge funds are still net long. Its a fundamentally optimistic view. The macro guys are short on markets but thats the index names, not picking specific companies of the to be fair, we have seen some selling in areas that people might call hedge fund hotels, very popular names, internet retail, for example. Think amazon, Credit Suisse has data on this or pharmaceuticals, there has been selling in allergan and those type of stocks. And yet contrary to the track record since the crisis, hedge funds as a whole have grotesquely under performed especially given the fee structure. And level of redemptions remained relatively modest. Explain, is it the environment of Institutional Investors so bad that they need to basically throw money at the hedge funds on the hope they are going to outperform in some way . Why dont they redeem their money from these hedge funds . This is the biggest question in the industry, assets hit a record 3 trillion and theres no sign thats going to go away. Its because a lot of Public Pensions out there look at the markets and havent made any allocations to alternatives and dont know where else to go. This is the key point. Just like oil. Youre in a world where the 10year, what was it yielding, 1. 6 , if youre a pension funder and institutional investor, youre like, theres no way youre getting there. The problem for oil, the low are the Oil Price Goes the more people have to pump to get the cash flow. Whats happening here the worst the returns are for Pension Funds the more they look to hedge funds, we better make our money by double digit returns. In the fullness of time thats not happening. But we talked about the equity hedge funds, credit hedge funds its been difficult. Distress guys are waiting for the opportunity to bottom out to get in. Overall, they are bullish. This is strange because the single best bet since the start of the year has been long term Government Bonds. Everybody said get out of rates. The only thing and by the way the number of hedge funds that do that are minimal. Thank you for joining us. Well see if march has the end of the First Quarter approach does bring more selling pressure. Hedge fund reporter over at reuters, amazon, the word has sent many brick and mortar retailers screaming into the night but not so for one regional book store. Ceo of powells books is coming up. If you thought a house in San Francisco was out of your price range, that could soon change. Josh lipton brings us details next. At ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. The high end Real Estate Market in San Francisco may be cooling down. Josh lipton joins us with the story. Hey, kelly, i had the opportunity to sit down and speak with nina, who has been selling high end homes in San Francisco for some 25 years. She hopes that pro inspective buyers have become more cautious. They are more likely to talk about the frozen ipo rather than high end residences. Her firm passed along this chart. In the Second Quarter last year, 18 homes sold for 6 million or more in San Francisco. In the Fourth Quarter, that number dropped by half. The other brokers say theres a lot of demand for the 1 million to 2 million homes here and even at 5 million home, if priced right with all of the bells and whistles still find buyers but one question is this, does any of the cooling in the high end actually bleed into other price points . Analysts at fitch do suggest that the San Francisco home market has run too far too fast. Its overvalued by 16 . Home price growth exceeded income growth. The flip side to all of this, any fall in prices would be welcome news to a lot of folks here in the bay area who have been waiting for a drop to enter the market at a more attractive price point. Back to you. Josh, thank you so much. Josh lip ton out west. Up next, david goliath, the ceo of powells bookstores, talking about amazons move into the brook and mortar. And its valentines day. That means flowers for many. A fresh crop of floral startups are rocking the way consumers look at valentines day. Well tell you why. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain and rain. Water got inside and ruined everybodys everythings. The house thought she let the family down. But the family just didnt think a flood could ever happen. The reality is, floods do happen. Protect what matters. Get flood insurance. Call the number on your screen to learn more. Welcome back, a brick and mortar Amazon Book Stores may be coming to a town near you. After open the first storefront last year in seattle, reports have surfaced that he could open hundreds more. Powell books with over 1 million books which i desperately want to visit. Miri miriam, thanks for joining us. My pleasure to be here. What did you think that amazon may be going into the physical bookstore space . I thought it was a great acknowledgement brick and Mortar Stores have known for decades, there is Something Special that occurs tea physical bookstore not reapplicable on the internet. People have tried and it doesnt have the same certifica its theres an online realtor making this kind of bid to work in the bricks and mortar environment. I wonder, miriam, there have been Barnes Nobles earn borders and walden books you name it over the years, which havent been able really to make a go of this business. What here would be different . Well, i would wonder the same thing. What amazon thinks they have that is different than other chains because when you bring out one store and bring out 200 that are exact same store, that doesnt seem to me to be an innovative retail adventure. That doesnt appear to be cutting edge but part of a tired Retail Concept that the american pu public is getting tired of. I have a question for you, i live on the upper west west sid think with mike santolle, one remaining book store up on the upper west side. Correct. Im one of the people who will go to a book store. Im one of the few people in new york city who go to a book store. How come you havent opened something in new york if you think you can make it fly here, or is the real estate too expense sniff. Youve nailed it. Its the real estate. Book stores need to have a low rental and new York Properties are just not conducive to an independent local book store, and thats pretty sad. I think it works for other retailers as well. Bricks and mortar is under major attack in new york city because of the high cost of the monthly rental. Miriam, i wonder, obviously youve existed before amazon and obviously coexisted with it here and done well. Did you have to change anything. Anything about the physical experience that you felt you could play up the advantages of it, or is it pretty much the same as it had been going back before amazon was such a big player . You know, nothing in retail stays the same for very long. You have to be constantly innovative. You have to zig, you have to zag. We were online in 1993, two years before amazon was. We were testing the waters of online retailing, we still do. We have changed some of our product mix. We are in new and used book stores and we sell depending on the marketplace more of our mixes used, more of our mixes new. Added other product lines as well. We sell audio books and sell gift items, journals, other things in order to complete the assortment and to keep our stores profitable. Hand miriam, we have to go, but are you confident that younger people who have all these apps now and things going on, are they going to cope coming into your book stores, do you think . They are coming into our book stores. I think thats one of the Amazing Things thats going on in the industry. If you look at the numbers, the young adult, the picture books and the board books are exploding. The parents of today in their 30s and 40s are raising kids, are bringing them into the book stores and they are all buying books, and weve got another generation of readers coming along. That is a hopeful place to leave it. Thank you so much for joining us, miriam. Its going to be a fascinating one to watch. It is. Thank you. Miriam sontz, the ceo of powell books. A news alert and lets send it over to susan lee. First off, lets take a look at the new position, taking about 612 million of spidr etf call options, also a big bet when it comes to energy. Were looking at 5. 1 million new shares on etp Energy Transfer partners and also kinder morgan. Hes bought into as well. Lots of oil and gas names, including freeportmcmoran and cabot oil and gas. When it comes to reductions in position , a bit of a shift when it comes to airline, resolving and decreasing his position in jetblue and increased in Southwest Airlines and Delta Airlines and adding a little bit of alphabet in the process. Kelly, back to you. Hes listening, evan. Playing Energy Trades apparently. I wouldnt touch kinder morgan. You know, some of that stuff, its like crazy trader stuff. You know, for me, we talked about it going back a few months. Its one thing to invest in a fund that invests in exxon and chevron and maybe bp and royal dutch shell. Its another thing to be playing around. Hes a credit guy. I understand, but like some are near penny stocks. Tread carefully. It wasnt long ago that 1800flowers was the disrupter of the floral industry. Now its facing new competition from upstarts catering to consumers who want ecofriendly flowers. Kay rogers has the story next. At ally bank, no branches equals great rates. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. All across the state the economy is growing,arts today. With creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. Like in utica, where a new kind of workforce is being trained. And in albany, the nanotechnology capital of the world. Let us help grow your companys tomorrow, today at business. Ny. Gov here at the Td Ameritrade they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Welcome back. Floral startups are shaking up the way consumers look at valentines day. Lets sent it out to kate rogers with 48 hours to go. Hi, kate. Reporter hi, kelly, thats right. Startups like the buchs company have any late planners, partnering with local florists like this one here in new york city and 130 markets across the country offering up flowers on demand in two hours or less starting at 60. Now the company is catering to millennials with their sustainable ecofriendly options delivered from farms in south america and in the United States. They say that a leaner supply chain allows for fresher flowers and also customer savings, and its not just the flowers that are growing. Reannounced a 12 million fundraise just other day and, you know, were in growth mode so were really trying to make this thing very big, and with the idea of having a platform that rewards the farmers and the florists to do it the right way. And its not alone this valentines day weekend. It will be in competition with urban stems, a startup offering up ecofriendly options on demand. They are all hoping to make a Love Connection with customers this weekend. Back over to you. I noticed uber doing some stuff as well about being able to deliver to your valentine, kate. Thank you so much. The question is are the flowers glutenfree . I hear ecofriendly. You know what that means to me. It means the flowers die in about a day. Very expenseive. Means they are expensive and dying quickly. Keep them planted. Im happy to give the flowers some steroids to keep them going. All for the hormone roses. What are you guys watching importantly as we turn the page on this week and head into next week . China is going to be open before the u. S. Trades again and that to me is the main thing. In terms of identifiable candidates. Unfortunately you can say well break out of the macro dependency and earnings are kind of done and hard to see what gets us away from that. Thats true. Im going to look at the Central Bank Chatter because i want to start to hear things like you know what . Maybe the negative Interest Rate thing isnt working. I read an interview with the head of the oecd recently, and he basically said look, negative Interest Rates, if youre a bank its bad for you. If youre a depositor its bad for you, and if you are a consumer it makes you nervous. But they it doesnt even if you were to support easing Monetary Policy they are running out of stuff to buy and running into moral hazard. The whole problem is the cost of the capital is not the problem in these economies. There are structural problems and demographic issues. Nobody goes i need another 25 basis on my loan off. Nobody says that. The most bullish thing that i can imagine is if the market kind of seizes on better economic numbers, and its not berlin policy. Its not about, oh, the fed is going to get easier. That gives you a little time and room to have the market sort of find its footing without that being the constant focus. Well leave it there. Mike, thanks for joining us after an extra long day today. Thank you. Have a lovely long weekend. My day wasnt as long as mikes. Go to lots of book stores and tell us all about it. Thank you so much, evan. That does it for us on be closing bell. Up next fast money. Tim seymour, steve grasso, david seeberg and guy adami. Tonight on fast oil surging seeing its best day in more than stefan years, closing above 29 a barrel and one wellknown Energy Experts says do not buy the hype just yet and hell tell us what he sees as the next real test for oil. Plus be a undercover tech standout. Despite this weeks volatile swings its the one fang stock that manages to pack a major bite. Does this countertrend move mean its time to buy . Weve got a few retail reports next week that could send the