Transcripts For CNBC Closing Bell 20160401

Dig deeper into oils impact Going Forward. Going in Different Directions which is very unusual, definitely what we didnt see in the First Quarter. Costco starts its deal with citigroup today. What about former partner American Express . We have both sides whether one of the biggest losers can turn things around. The yahoo brain drain isnt over. Details on the latest executive to leave the struggling Internet Company coming up. Shares of tesla are popping after the company unveiled the model 3 last night. Preorders have soared past expectation and elon musk took the stage to unveil teslas new product. Even the base model 3 will do zeer ro to 60 or 0 to 100 in less than six seconds. [ applause ] at tesla we dont make slow cars. In terms of range, the range will be at least epa rating of 215 miles. All model 3s will have autopilot hard ward and 3600 super chargers worldwide and about the same number, about the same number of destination chargers, thats present day. By the end of next year we will double the number of super chargers, it will be 35,000. I want to emphasize that the even if you buy it no options at all, this will still be an amazing car, wont be able to buy a better car for 35,000. That was just a stripped down version behind him. It does come with doors and windows and things for 35,000. Should investors be betting on tesla with this hype surrounding the model 3 . Lets bring in two guys, differing parts of invoice, brad guest worth who is bullish on tesla and Brad Erickson from Pacific Crest who has a hold position on the stock. But sees some concerns for the company overall. What did you think . Are you bowled over by this announcement or what did you think of the model 3 . Brad guest worth wasnt sure who you were talking to. The model 3 itself, it is a quite sigts announcement, 35,000 price point, we knew that was very good. 200,000 preorders, very significant. If you compare this to the model x, there were only 500 preorders when that was introduced and one year later, 20,000 preorders. We have 200,000 in less than 24 hours. This is significant. Well be approaching a few Percentage Points in the overall u. S. Market and its hard to bet against an open ended growth opportunity. The only argument is valuation but the one thing you have to look at, you cannot buy or sell stock on valuation alone. Theres also the question of whether the company is going to make money on the cars or else the more it makes and sells the more it will lose, are they profitab profitable . Ultimately we expect them to become more and more profitable. Our view over next three to four years the growth trajectory is not as steep as investors are banking on. We think if the company were to return things more slowly, you could do it more profitable. Given the executive challenge as this company had to date, it feels like a appropriate amount of discounting in reaching targets is fair. Preorders vales have been terrific and better than expected and warranting of todays move in the positive reaction weve seen in the weeks leading up but were just noting for the next couple of years, you know these guys are going to have to continue to sell their current cars and that could become a slowing growth story. With stock valuation, you are worried about execution issues the company faced in the past, is that it . If you look back each of the last two years this company laid out a target and then not been able to meet those targets. When were talking about half a million cars being sold four years from now up from 85,000 this year, thats a pretty as spirational number in our view. Mr. Gastwirth, how did the subsidies work . The 200,000 figure is significant, right . Is it that figure that affects whether people get the 7500 subsidy Going Forward or just for each particular series of the vehicle. My understanding is that i thought it was 200,000 get the 7500 tax credit. Need to look into that but 7500 tax credit for the new purchase. If you buy it and buy used or right off from somebody else, you do not get the 7500 tax credit. Youre talking 20 . 35,000 is the base, youll expect some bells and whistles and 42,000 is what elon musk is looking for the average price. The thing i look at, when you look at disruptive companies, no Disruptive Company looks inexpensive in the early innings. You can look at facebook, google, amazon, all look expensive and this is the same here. But brad, what about his point about execution problems in the past. Even elon musk whether he was joking or not was saying with the huge orders theyve got, they have to rethink their product schedule right now. Youve got the issue of charging stations. They dont have enough to fill all the needs of these orders, youll have to ramp that up in a big way too. I would say from the Execution Point thats a good risk with any company. You need to see the company execute now. They still execute it quite well. To me the bigger question is supply and demand. Theres significantly more demand than supply. With that you cant really bet against the bull open ended growth story. In terms of charging stations, its another good point. I do have a tesla i drive and ive never seen a charging station full. Think theres plenty of room for the growth of the current market but its a valid point. When you get half a million on the road, youre going to need more charging stations. Whats your understanding, Brad Ericsson how the subsidies work here and are people locked into this purchase once they put down 1,000 bucks for this car . No, absolutely not. We actually went out to a physical location and spoke with several dozen people in line intending on buying the car or putting down the 1,000 bucks for the reservation. A lot of them expressed a indifference as to whether they would actually purchase two years out. No, you can absolutely get your money back any time. Paying 1,000 to stand in line with the cool guys, right . Great country, isnt it. Brad, thank you both for joining us. Joining us, we welcome back kim forest and ben willis from princeton securities at post nine and hello rim santell i, had a busy day on this jobs friday in chicago. Ben willis, ive noted the decoupling at least today and weve seen it lately what do you make of that and do you think well see a trend . Its a great selling for the power of short selling and cost of covering those shorts. That has now been unwound. We now looking at futures contracts theres been very little demand for actual ownership. So you were trading the entire market wagged by the idea of short coming. And put that aside and we need to reexam how well price out. Were talking about earnings for this coming quarter an how they are going to be down 7 . If you remove the energy from that equation, its nowhere near as dire. When you look at the equity investing and have seen the profitable investing its been in the older school if you owe utilities, 15 on the year right in line with the etf on the 20year bond if you will. I think the continuation of this is going to be a market of stocks is a great example and you can use that on the Energy Sector because theres so much going on with the smaller energies and enps that we thought would go bankrupt. Its supply and demand of dollars trying to enter the energy market. Good way to frame it. Meanwhile we have the jobs number out this morning. How does this report figure in and im going to bring it bold because the strongest First Quarter in 30 years. Its really interesting reflects maybe central bank pos iting and with the strong jobs report, where do you think that leaves markets . The best way to answer that, once again is with a sports analogy, you can find teams that havent won a world series in over 100 years and finds players from that team that are going to be in the allstar game. I wont even challenge you on the jobs. But what i will point out is that if you look at gdp, even atlanta gdp now is still under 1 i believe, its up to 7 10 zgt, we can talk about jobs and weak growth but we need to talk about its going to be at least a year before we swear in new congress and new president to address the fiscal side. In terms of policy, your direct answer to the question, i dont think this changes anything with the fed. Even if it did, how do we know if the fed wont change the change . Inhe ha in inevitab inevitably, all of the things that are headwinds we talked for months and months and years and years in some cases, those headwinds will be from a side of equation which isnt necessarily monetary side and isnt going to happen quickly. Were in going to stand patd and i think jobs will stay where they are and growth will dip down a little under 2 and i think were going to be having this debate that the economy is not the stock market for a while longer. A team that hasnt won the world series in over 100 years, on the tip of my tongue, its somewhere. Ill think of it in a second here, rick. Kim, youre saying here with the volatility and the lack of any movement by the fed, maybe it terms to be a long term Value Investor . I think so, if your game is to buy high and sell higher which would be a momentum player, youre kind of stuck for what trade to do, right . Tesla looks good but how do you know . What we like to do is look for companies that either have an internal issue that we feel can be mixed and or in an unloved area of the market and just give it time. And you know, as long as you keep checking in with that company and making sure your thesis is still there, time should play out and they should come back into favor whenever that Business Cycle changes. Have anybody in mind . Sure, were actually a holder and buyer of boeing. And they are getting more efficient, laying some people off and trying to make their one aisle jet more competitive with airbus and we think thats probably something that will benefit shareholders over time. We also like microsoft, which isnt exactly a value play at this point but i still think its misunderstood by market participants, business oriented company. Just wanted to also ask in a way this ties together the larger discussion, the missing link at least on the macro level is productivity, are you seeing that in companies you are scanning and are you looking for those that are able to be and you can bet they will keep being more productive . Absolutely. When companies spend their money they are going to have to buy something more productive than the workforce currently is. Thats either going to be something thats going to take the place of a person or in boeings case what they are doing is making more fuel efficient planes. And thats always in demand even with low oil prices, productivity has always been a driver of making the decision to buy or not to buy a company in the portfolio. We need more of them across the whole economy. That would help. Thanks, folks, have a good weekend. Appreciate your no april fools jokes on this april 1. Please, i beg of all guests today. Not happening here for sure. There are 45 minutes to go here and dow is up 99 points and s p up 11 and nasdaq is up 37 today. Up next, citis global head of Digital Strategy gives his take on jobs being lost to high technology. Disrupters in the Banking Industry and how citi is innovating to fend them off. Which key executive is leaving this time around and what it could mean for the future . Youre watching cnbc, first in business worldwide. 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 new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov we need to be ready for my names Scott Strenfel and r im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. The industrial average opened down 100 points, up 100 a moment ago. Technology leading the way to the upside with a gain of 3 4 of a percent. A Starwood Hotels and marriott both lower. You heard the news on closing bell late yesterday and wasnt an april fools joke. The group led by anbang insurance abruptly dropped out of the bidding war for starwood citing market considerations. The move clears the way for marriott to complete the starwood acquisition which it thought it had done last november, starwood shareholders are slated to vote on the 13. 2 billion cash and stock offer next friday. The word were getting is that chinese regulators are not going aallow anbang to devote that much of their assets. In the meantime technology could be changing the face of the Global Banking system. We talked about citigroups report that banks are having their Uber Movement and could potentially lose 30 of jobs. One of the keys contributing to the report joins us a post nine, greg baxter, global head for Digital Strategy for citi. Thanks. It sounds dire. We see it as an opportunity as much as we see it as a threat. The report identifies some of the potential cost cuts or job losses that could occur in the industry. But just as digital will drive efficiencies through the organization, it also drives opportunities and we see opportunities of 2 billion people that are currently unbanked. Many opportunities for growth as well. Its like the more things change the more they stay the same when it comes to lending. There are reports that bank of america is going to Silicon Valley shopping for a platform and square started as a Payment System and now increasingly using that as a lending platform. But were still talking about kind of old School Banking con semts, arent we . I think most of the investments so far have been in what we call the last mile of consumer experience. 70 has been in that area. There has been less disruption in the Core Products and underlying infrastructure. Often led by banks or in partnership with banks. We talk about the layoffs that will occur as a result of this disruption but theres going to have to be hiring too, right . Are we talking about that much of a disruption overall for the banking stri . I think its a lot easier to predict what roles disappear than to see what are the opportunities to come along with new products and experiences. From our perspective, we would like and welcome the opportunity to replace Operational Services with more advisory judgmental services. So youre telling us in five years instead of talking to you about this, there will be some bot were interacting with on twitter or dispensing Financial Advice or something . That may make my weekends more enjoyable but realistically we see technology as an augmentation where it can help anden hans the way we deliver services and lots of opportunities for advisory and Value Added Services as opposed to operational and back office, middle Office Services that are often done today. Little quick peering into the future there in the Banking Industry. Thanks for joining us today. Thanks very much. Greg baxter. We have breaking news on auto sal sales. The march sales number is below what we saw in february. 17. 54 million. This comes in after many of the u. S. Automakers posted growth that came in well below expectations. Fords sales up 8 , versus estimate of 9. 1 . Chrysler up 8. 1, the estimate was for 13. 54 and gm, really in focus only seeing growth of 0. 9 . You can see those u. S. Automakers are trading lower on todays number here. 16. 57, the annual rate for march. Back to you. Seema, thank you. This is a big disappointment. We were talking about okay 17. 3, 17. 4, not going to mean that much difference. This is a big drop. Especially because when there were questions about the sustainability of 17 million on a run rate we thought we were saying is it sustainable past 2017 and 2018, not march. So seeing a little weakness relative to the recent highs. And auto stocks taking it on a chin as a result of some of that. Well take a break. Less than 40 minutes left in the trading session with the dow up 90 points to start the Second Quarter off. That another key executive departure as she tries a major turnaround efforts. Well have the details. What can investors expect from emerging markets this month . We have a special report on Major Political and economic events that could affect price action coming up. Are you a film buff, watson . No, but i am studying the visual storytelling in your movies. You know, its amazing how much information is contained in a single image. One visual can make or break a film. I am analyzing images for factory managers, sales people and healthcare professionals. Thats good watson. But not exactly movie material. Perhaps the healthcare professional could be played by matt damon. Youre learning, kid. Blackberry posting a smaller than expected quarterly loss. Shares are down 8 today. John chen says the companys goal is to ramp up software and services and put blackberrys Turnaround Services in the spotlight more in the next hour of the show, bill. Thank you, kelly. Yahoo ceos turnaround faced another hurdle as another key executive leaves the company. Josh lipton joins us with the story. Sandy gould is leaving gentlemyahoo to take a break and find the next adventure. Loyal devotion of a brilliant ceo and incredible and passionate Leadership Team leaving yahoo is the hardest leaving i have ever done. Yahoo will always be in my heart. A number of Key Executives though have now left under ceo Marissa Mayers watch and that would include the cmo, svp of home page of verticals and heads of Marketing Partnerships and development. Yahoo counters that many have left for personal or professional reasons and their departures arent always voluntary, some did not meet mayers expectations. Investors say these add to uncertainty about the company. Who is in charge and its future, yahoo stock is up 10 this year, though down 20 over the past 12 months. Goulds departure comes at a critical point for yahoo where she is trying to turn around by cutting costs and focusing on key areas of potential growth and at the same time fighting off an activist shareholder. Theyll have a better sense when they next report results likely in midapril. Thank you very much. Josh lipton. Time for a cnbc news update with sharon ep per son. China stepped up criticism of the u. S. After a senior u. S. Official said washington told beijing it would not recognize an air defense zone over the disputed South China Sea. The u. S. Has expressed concern china could declare the zone to protect its South China Sea claims. Gop president ial candidate john kasich ramped up criticism of rivals and campaigning in pennsylvania he said ted cruz has no record and predicted donald trump would avoid town halls in the future after his abortion comments to msnbcs chris matthews. Two children are lucky to be alive after a gunshot tore through a wall inches from them at a west suburban grocery store. The video of the march 9th incident, a bullet narrowly misses a 5yearold and his 7yearold sister after a store employee mistakenly fired it. A van that became trapped in a sinkhole in Central Alabama has been removed. The driver of the van said he was heading to work when he was swallowed up by the sinkhole. Thats the cnbc news update. Back to you. Holy moly. I know. Thats crazy. Thank you, sharon. We are heading into the last half hour of the trading session here. Rally for now. The dow is up 91 points and Technology Leading the nasdaq higher with a gain of 3 4 . Is it that time already . A leading trader will tell us what hes watching as we head into the close up next. American express was the worst performer of the dow in q1, two analysts debate whether this creates a goodbying opportunity now. Stay tuned. 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. Im in charge of it all. Business expenses, so ive been snapping photos of my receipts and keeping track of them in quickbooks. Now im on top of my expenses, and my bees. Best 68,000 employees ever. Thats how we own it. Atand that in a new house,tee a fyou probably dont sharece, the same tastes as the previous owner. [ dolphin chatters ] so when you need a little house painting or a complete remodel, well help you get the job done right, guaranteed. Get started today at angies list, because your home is where our heart is. Stocks generally higher today. Oil has moved lower and saudi arabia talking about maybe this production freeze is not going to happen in iran doesnt participate. And the transportation stocks are also trading low every today. You see it down 67 points led by some of the airlines, united, continental and delta are trading lower at this hour. Evenly though some of the high profile averages today are higher, transports are not participating here. Bill, thank you. Im on the floor with half hour to go. Joined with alan valdez, its not just oil is lower but transports are down 66 and industrials up 102. Whats going on with this market . A lot has to do with the jobs number today. They are looking at that, the transports and oils. But basically theres no volume. Its just a sector to be in today and thats where the traders are today, theres nothing going on. Why . We have the jobs report, shouldnt that be the catalyst . Its going to look like a great jobs report but manufacturing off 25,000 jobs and Service Industry still second in command. They are not great jobs but the Headline News is going to be good jobs out there. Do people feel its going to be more of the same from the fed, that this report doesnt change anything . Why do you think they are on the sidelines. They are, theres no volume. They are on the sidelines because of that because the fed maybe they are not still in limbo. Even though Headline News is good on the jobs number, i dont know it will move the needle at all. What else are you watching . I was talking to bill earlier, we had a vshaped last quarter. This quarter i can safely say has been v shaped so far also. Its crazy. Were looking at the teches. We think oil made a base here were looking at the Energy Stocks Going Forward this quarter coming into the summer, usually get a bounce anyway. Already the driving mileage is up huge, gasoline demand. Alan valdez. On we go with American Express, one of the dogs in the First Quarter as they feel pressure to keep up with rivals Loyalty Programs and a. M. Ex ends its deal with costco after 16 years. For more open whether amexcan turn things around, lets bring in Global Market intelligence with a buy rating on the stock. And welcome to you both. I want to start with you, a guest wants to buy stocks that have been beaten down for fixable problems, problems that are fixable. Amex has been beaten down. Is the problem fixable . Its going to take a while and to fix them they have to give more rewards which will hurt profitability. I would rather buy a discover who either have better growth or lower valuation. It does seem like theres a high bar that citi is setting here and offering 4 cash back and different incentives like that. What does this tell you about is this a sustainable for citi or other Card Companies have to match it and will amex be left behind. Theres no doubt about that the Consumer Lending business is increasingly competitive and faced with additional products that are being developed. That said, our major point is that we think amex at its current valuation, just about fully reflects all of the negatives and the negatives are pretty well known. The costco deal has ended the u. S. Dollar is strong and gasoline prices are low. The payments business is increasingly competitive. But trading at 11. 4 times forward earnings versus the market at 17. 4, thats only two thirds of the market multiple and the stock is down 35 from the all time high. And but let me just ask you the same question but in a different way. Amex has a lot of charge cards, dont carry a balance. I guess theres no way for them to use that to fund their refunds and their other incentives is amex more of a charge card business fundamen l fundamentalfundamenta fundamentally challenged . His tore he ctorically it wa the banks became more competitive and youre seeing that. If Interest Rates rise, chase will make 3 billion more and invest a lot of that into the card businesses, this could get worse before it gets better for amex. We had a guest on talking about the Role Technology will play in disrupting the Financial Services industry. This is an area thats ripe for that. You glossed over the Payment Services that are entserring the competition here, the fray, thats going to have a big impact on amex, wont it . Sure but dont forget regulation is vital in this industry. We think that the moats are very high and yes, there will be competition from new technologies from fin tech and block chain but we think that its similar to 15 years ago when people thought that there would be no Bank Branches and that the internet would put Bank Branches outs of business. It will be very slow and we think that the inroads that the payments business competitors are making, it will take time. Just real quick, what kind of moat does amex have with the existing customers . You still have to pay them a fee every year. Are they offering things attr t attractive enough to they havent given you enough reason to use the card. Other cards have given you more reason to use them and thats why spending growth has lagged banks spending growth for the last three years. Great point. Thank you both. Thanks, guys. And we have about 20 minutes left in the trading session here and rally continues. The dow now about the highs of the session with a gain of 111 points. March behind us, big month for emerging markets too. When we come back, well get a look at Upcoming Events that could effect that space in the month of april. Apple is turning 40 today. They have come a long way since it first sold 200 Desk Top Computers back in the day. 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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. Nice rally across wall street. It is not just the jobs report but we did have the ism manufacturing report, back in expansion territory and several months in the chicago pmi indicated that yesterday too. That said its a km of Biotech Companies have are doing nicely, regeneron up 14 said its drug to treat a severe form of eczema met its goals and does clear the way for regulatory approval. I can tell you that was the second best performing s p stock this week. The emerging markets etf has seen a rise of 13 just this past month. Seema modi is back to see if these good times to continue to roll in april. Theres a heated die bait brewing over whether this emerging market rally will last. Most long term investors will say this is a short term trade given that at some point the fed will have to raise rates and those countries will be under pressure. Timing is really key. In the meantime, dovish fed weaker dollar helped india and china and russia and brazil outperform. Brazil up a whopping 16 , posting the biggest monthly gain since october of 2002. Benefitting from the rebound in commodities and rising expectations that president rousseff will be ousted. With some investors, like Brown Brothers saying they have run their course as the impeachment process will take some time. In mid april they will vote on whether to impeach rousseff. They need two thirds before the vote moves to the senate. Politics will continue to be in focus for brazil in this month. Also keep an eye on Economic Data from china after Industrial Production and manufacturing rebounded if the trade data thats released on april 13 shows an improvement, analysts will likely scale back expectations of a further weakening in the chinese yuan. It has been a big focus for investors in 2016. Seema, thank you. Weve got our eyes on market with 15 minutes to go in the first month of the Second Quarter. The dow is up 112 points, even though transports are down 52 today and oil has been weaker, look at the s p, the broad index up two thirds of one percent as well. Nasdaq the outperforming up 43. We know spring is here because the for sith yas have turned yellow is that what those are . Do you know what the pink ones are . The pink would be Cherry Blossoms up. Here too . Sure. Where was i . David darst is the other reason spring is here. He has an acronym that spells out spring. Trader group, 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. 13 minutes left in the trading session. The dow is up 121 points. Were sitting at the highs of the day and still waiting to hear from art cashin on the close orders. We should explain to people why were wearing the puzzle piece this is National Autism awareness. This is for Autism Speaks the organization founded by the former head of nbc bob wright and his wonderful wife suzanne. Were happy to help draw awareness and support it by wearing blues and pins. Joining us right now wearing purple is the man himself independent investor consultant david darst. Kelly had a suggestion for you, youre acronym is spring, you should have chosen forsythia. Wow, i would have digging for hours. Please tell us david what you are watching . Before that, while you were just standing there, art cashin just signaled me, 1. 5 billion to buy. Wow. That is the wonder how much of that is priced in here. That could be why were at the high right now. Were off to a racing start. That art cashin piece of data does inspire the opening lines of canterbury tales. How so . When that april with showers, the drought of march have passed to the roota and then virtue and gender is the floor. Thats the way it starts. Its 10,000 lines long, thats the first four lines. Spring, what we want to see is serenity, or serene Foreign Exchange and oil markets. If they can stay calm like this, thats good. The r p is profits, most important. Entering profit season now. That is key. We can only hope there will be profits. Show me the money, wheres the beef . R is the responsiveness of central bankers. Are they paying attention . I think thats what changed the market in february was janet yellen both saying were paying attention, not ignoring the classroom here. You want Interest Rates and inflation rise gradually, no go down further. That indicates worries about deflation. The n is no mind bending terrorist acts. Okay, we dont want to see any, but certainly not something that destabilizes Business Investor or traveler or consumer confidence. And g is Global Economic growth. You saw chinas numbers today and youve seen the purchasing Managers Index on the manufacturing side. Philly fed, chicago, empire state, these have given a little bit of green chutes. Now i understand why it was spring because forsythia wouldnt fit on a full screen graphic. I dont know im more impressed by that mem orization or first four lines of the canterbury tales delivered thank you. What would you buy here then . . You know health care is beaten down. If we had said at the beginning of this year that the best performing would be brazil among the International Stock markets, if we had said at the beginning of this year gold mining stocks which were shuned like the plague last year that they would be up 50 this year, so i think its time to basically look at picking selectively at places where you can get a nice yield. The markets run up 14 from its february lows, look for places that are high quality where you can get yield. What am i talking about . Thats what makes me worried. Nobody was talking about the gold miners and these beaten down unloved parts. Everybody is talking about the income places, doesnt that worry you . I bought up gold mining stocks about three weeks into the year when bill was not here that particular time. Simon hobbs was here and freaked simon out zpl thats not hard to do. It was fun. Gold . Gold, david . I said, simon and they were up 20 now up 50 . I think you can trim back some of these things that have moved a lot but pick selectively. Energy, high yield, but dont pick in the bottom of the bin right here. Youve got protection. Ive mentioned before to you both Canadian Bank stocks and yield the top five, very high quality and they yield 4 or 5 with the Canadian Dollar down yet. Japan, Morgan Stanley still likes japan and europe and weve been very proud of our emerging markets goal which has done so well. Energy, what about those guys that do pain a dividend . That mixes two areas. Every one of your loyal viewers and fan viewers should be looking for dividends that can be maintained. And thats your big oil majors. You want to basically exxonmobil yields 3. 6, 3. 7. Chevron, 4. 5. Then you go to British Petroleum which yields 7. 9 and royal dutch 7. 8, will they all be able to maintain their dividends . If so, you can nible at big oil majors, they make money on the downstream and the refining when oil prices are low. I personally believe that oil is going to come under pressure as we run out of Storage Capacity and people start throwing oil all over the place. Total amount of oil that exists in the world is 1. 7 trillion barrels youll love this. The United States under six states has 3. 5 trillion barrels, we have two worlds under only six states in this country. And we cant recover all of it but if we get some of it oil is going to stay nice and low and going to kick off that plus the millennial generation, were going to kick off a great United States performance over the next 20 years when we get done with all of this zrazdyness. Somehow he tweets too, 140 characters worth of your wisdom at a time. At david darst, is that the handle . Thats right. No extra charge for impressions either. Thats a very good simon, youll hear from him, im sure. Well take a break and come back with our closing countdown. Well talk more about blackberry. Weve got stories on tap, including sec versus Silicon Valley. Youll want to stick around for that. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Ahhh. Bob and i are joined to have mr. Cashin join us for the past week and first trading day of the new quarter. Lets give you a rundown. This is what the dow did this week and for the week a gain of 1. 6 , what we did for the whole quarter too. Wti continued lower and art, well want to talk about this apparent decoupling thats occurred now with wti for the week down 7 . Look at that. And were down to 36. 68. Just for fun, best and worst performing stocks this week in the s p, regeneron and rlunima, the worst in the s p index is l allergan. Oil stocks . This morning you were for first 20 minutes of the day, oil was down on the points and we were down also. Then two things happened that were important, oil began to stabilize below 37 and outcome the ism after five negative months we were above 50, minus 100, up to 110. Not just oil, the dollar a little decoupling, little bit of Dollar Strength in the last few days and normally thats a toxic mix. Strong dollar has been a real problem for stocks in the past and wasnt today. I agree the ism was the turning point for the market. Broader market managed to eek out small gains. When do we care about earnings . Were going to start to care about earnings shortly. As ive said earlier this week, that will mean that the corporate buybacks will be standing aside. That will be an important prop for this market that will not be around for the next three weeks or so. Can we point out the vix has collapsed . Now remember the fed was a major cause of the volatility that we had. The fed has essentially for the short term moved to the sidelines and you can see the vix is almost below 13. It was 13 and low change here but at a new low for the year. Theres the vix for the weekend. 11 this week. Thats a remarkable move. Now its not in that territory very often. Thats the low end of where its been trading for the last several years, down to 12 at some point but are we going to see a headline that said this is new money for the Second Quarter . Youll see that and the first day of april, 60 history of being an upday and were living up to that. Also the whole month of april is a pretty good month. Very good. Thank you, guys, have a good weekend. Were going out with highs of the session just off the dow up 112 points. Noble corporation is ringing the closing bell at the New York Stock Exchange and nasdaq japanese Robotics Company cyber dyne. Have a good one, kel. Welcome to the closing bell. Heres how were finishing the fist day of the Second Quarter, both up two thirds of one percent today and s p closing at 2072 and change and nasdaq up almost 1 adding 44 points, 4914 is the level there. This despite the fact that oil was under pressure today so too were transports, and Airline Stocks feeling some of the burden here. Well have more on all of that in just a moment. The wisconsin primary are is in our four days, ted cruz leading in the polls. What a cruz mean would mean for Donald Trumps fate in the race for 2016 with our favorite guests on this program of the first joining todays panel we have cnbc Senior Market commentator mike santoli and evan newmark. For more is laura vosener and fast money trader guy adami, good to have everybody on board. Mike, if the jobs report falls in the woods and nobody hears it, doesnt it feel like that . The traders telling us the volume is light and i wonder lch to the point ken brown was making yesterday, it doesnt feel that many people are talking about it or paying attention. Am i wrong . Youre not wrong for sure. Theres less attention on this number because it has been so consistent. Its been the same story for so long in this very range, just above 200,000. The Unemployment Rate ticking up for good reasons, pick going back into the workforce. The firming up of the market throughout the day shows that weve been cleared to think of good Economic News as good for time being and modestly good and ism number being above 51 is a big deal too because industrial sector has rallied hard for two or three months in anticipation that that industrial recession might be bottoming. How many times have we said caterpillar leading the dow . As they say, never short a dull market or maybe the fact that the number isnt the fixation of the nation anymore means you know, that weve come to a healthier place. I think so. I mean, the dialogue of the conversation of the First Quarter of the year was recession, recession. What if yellen raises rates and end of the world kind of stuff. And basically yellen came out and said you know what, im going to let this thing overshoot. Im were not going to raise rates or if im head of the fed for quite a long time. And all of the Economic Data with a couple of exceptions has been good. I mean, people are talking about unemployment at 5 . Creating over 200,000 jobs a month. We have good wage growth. You have good price growth. What is the problem here . Thats the Perfect Question for laura. Why if all of these other signs indicate health in the economy is the gdp report so housy . Its a great question. First of all, i think productivity growth in the u. S. Has been lousy and has been for some time. Thats a factor why we expect lower growth to persist over the next two years. And i also think the economy continues to face shocks, its still vulnerable. The hiring is decent what are the shocks . Im not trying to be difficult. Lets talk about the shocks. Like the u. S. Doesnt have that much of an export industry so everybody freaks out when growth in japan is terrible like its always been and mediocre to nonexistent in europe like for a decade and yet the markets jump up and down the strong dollar is killing us. Lets talk about what is generating growth in the u. S. Economy. Its certainly not exports or investment or the government sector. Really the consumer is driving this economy and the consumer is a little bit weaker than weve seen in past expansions. Thats the risk. Is it weaker the consumer or just not spending and saving more . I think were seeing income growth, thats lower on average versus past expansions. And were also not seeing a huge credit multiplier. No one is borrowing against the value of their homes and not seeing much mortgage borrowing and thats a big difference. Its making a slow comeback but not where it needs to be. Were seeing firms ramp up marketing efforts. Td bank, if you walk in a home depot they have a bus to try to get you take out a home equity line of credit. Talk about where you see good consumer plays or productivity areas for this story here to unfold . Weve talked about you know im always skeptical, number one. Its the way i was raised in this industry, what can go wrong will gro wrong. Its important to preface this with that. One of the things i said for a while. There are certain names that will work and continue to work. You just named one of them for Different Reasons but look at the performance of a home depot. I believe the environment we find ourselves in right now and last few years lends itself to exactsly what they do. Cocacola to the upside. And mcdonalds under the new leadership has completely seemingly righted their ship. I want to say is a stock made an all time high today. The things that concern me, s p was magnificent but mentioned the transport and seemingly rolling over the last couple of days. The vix down to 13 and evan can speak to this, that that has been historically levels that is teams to bounce from meaning maybe a selloff is imminent, right . And crude oil seems to be rolling over as well. Now, we decoupled today, absolutely 100 but its been lock step the last 18 months. It will be interesting to see how things trade on monday. On that point on oil, lets add another voice in the conversation here, anthony grisanti, saudi arabia says it wont freeze production unless iran and others agree. How much is that story influencing oils weakness here and do you expect more to come . That story, kelly, two weeks ago was an important stortry to us down here and then a lot of traders realized theres way too much production in the world of oil and they would be freezing at record levels. They doesnt ask the second largest producer to join in the freeze, which is the u. S. And theres a lot of experts out there that would have thought at this time our production in the u. S. Would be down closer to 8 Million Barrels a day. Theyve been holding on pretty well and pretty resilient and prices at 36, 40, will probably continue them being resilient. The one thing you can say the oil price was down worse than the Energy Stocks and the market itself held up. Why is that . The stock market i think as long as crude Oil Price Remains in this sort of range where its not in free fall or not threatening old lows, theres a Downside Risk to crude, you did a lot of investment flows, it was people buying crude futures and also was the currency effect, right . All of those things helped the crude oil rally. Its positive that stocks were ablg to shake off the weakness. I dont know exactly how much more pain in oil the stock market could sustain. Anthony, what about people looking into the summer and saying between driving demand and other factors, make we start to get some traction in the Oil Price Moves higher there. Do you see that playing out . Unfortunately, i think we just saw that over the last month or so. When you look at the commitment of traders reports and open interest, sure its covered in crude oil but there wasnt a lot of longs, very few longs added into the market which makes me think a lot of people dont believe this rally is real right now. We did get a bounce in anticipation of the summer driving season. Those tanks are full right now and now we need the demand to happen. If that doesnt happen in the third and Fourth Quarter were going to see oil test at 30. It was already priced in. The whole oil market year to year people use the same old troep to convince themselves, the summer driving season, you know, a lot of people driving and price of oil goes down and come up with some other excuse. I i wish i was smart enough to predict what would happen. I think oil stocks with a 3 to 4 yield, some of the majors with the price at 35 bucks a barrel. Its not a terrible bet to make. You know, the one thing that guy touched on and then ive been thinking about is whats going it happen Going Forward with some of these stocks that have done extremely well like the mcdonalds or cokes . Im a little skeptical because i dont you know, why are these stocks reaching all time highs in a vacuum in which the bond market is base he canally saying things arent that good. This disconnect between the bond market and stock prices thats a direct connection of bond like stocks, stocks not really growth plays benefitting from the same reasons that the bond market is doing. They are expensive given their yield. Absolutely. Central banks, global Central Banks will be more patient. They are adding stimulus. Thats one reason were seeing bond prices bond yields low and stocks rise. You mention earlier the fact the consumer is still the part of the economy that is the engine. Guy, to the point with all of this, there is such an overvaluation if you want to call it that of some of these names and the reasons that they are doing well seem like they are going to persist. I think evan brings up great points, the valuations that have been a concern in mcdonalds and home depot have been a concern for the last possibly year and youve seen the stocks rally in kind. Im not saying they are necessarily going to grow until their valuation but to mikes point, these stocks make sense on metrics that maybe historically you havent needed to look at. If the market were to go down 75 of the market trades with the broader market, i get that. Right now in the market we find ourselves in, these names are outperforming and benign tach that will continue to do so. Nice history lesson, cocacola, all time high since 1919, over the years all of these different names going public. Thank you for joining us. Have a great weekend. Thank you. Anthony grisanti, thank you for joining and stick around and catch guy with the fast money crew at 5 00. In celebration of apples 40th anniversary, theyll have the tech stocks you need to own for the next 40 years. Happy 40th birthday apple. How the company evolved from the founding in a garage four decades ago to one of the most valuable ones and march jobs number coming in better than expected. What does it mean for the race to the white house, barney frank and larly kudlow will square off. Research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Happy birthday to you happy birthday, apple. They were founded 40 years ago today by steve jobs and jobs flew a pirate flag featuring an apple logo to distinguish the work of the mac from the rest of the company. And what started with the apple one personal computer has grown into one of the Biggest Tech Companies or Biggest Companies period. Ap has a billion active devices and 11 Million Developers and responsible for 2 million jobs in the u. S. Alone. Joining us know with more on the companys evolution is john fortt. Well, kelly, you think about apple and you have to step back and realize that steve jobs didnt even make it through the first full ten years of the company. I mean, he was fired in 1985 when the company was around nine years old. So to give some perspective on these 40 years, its been an odd 40 years, that periods in between 1985 and 1997, 98 when jobs came back and really reinvigorated the spirit of the company. It was a key period. Arguably that third 10year period between 1996 and 2006 is the most fascinating period that includes jobs return along with his team from next bringing the Software Expertise that laid the groundwork not only for os 10 which they still use in computer but also ios, the operating system behind the whole mobile strategy. The ipod and itunes were conceived in that period. I think right now, the ten years between 2006 and now, apple and its investors have reaped the benefit of what was built during that period. The next ten years i expect will be defined by the iphone hangover. Theres been no product in tech like it in terms of revenue and profit that its built at apple. What happens next . Are they able to come with up a followon to that or do they have to shift the type of company they are into being more a Services Company that takes advantage of big installed base of users they now have. John, its evan. Does 40 years mean anything . In the tech world if you go back to other big Tech Companies, ibm basically seen as a slowly dying dinosaur. Hewlettpackard, hewlettpackard was the giant of Silicon Valley probably 40 years ago. Is there room for anniversaries in the world of technology . I think there is. You think about ibm. People have counted it out so many times, that company was born in 1911 and its 105 years old but if you look at facebook and its not even a teenager yet, its around 12. Netflix is older than google. I mean, there are very Young Companies that have done well. The question is how well do they navigate these transition points where things that accounted for their initial success get challenged. The rug gets pulled out from under them. Is their culture and leadership strong enough. The market is brutal. Its like what have you done you might have changed the world a couple of times over but what have you done lately . The market might say were maintaining your market cap at 600 billion. Thats what were doing for you. You need to do something for us to get us above that. John is right in pointing out how through much of apples history, it was kind of a misfit company. It was always under valued and always about getting market share in maces against pcs by fractional amounts. You can shift gears and have a second and third act but how rare it is to do it. And in so doing they dethrone blackberry the Market Leader for years when the handsets first came out and reminder of that today, the contrast between apples anniversary and blackberry shares down. What did john chen have to say . Revenues in the Earnings Report were low are than expected and thats from a lack of phone sales. I asked him at what point do you call it and decide whether or not youre going to continue in the phone business . Listen to what he said. By september we will know, i do believe that we will get to profitability before then. Youll have a great question about there sustaining profitability. We should chat about that more in the future. Let me good to profitability in the n couple of quarters if by september i couldnt find a way to get there, i need to seriously being a Software Company only. Six months, kelly, six months for blackberry to figure out whether it can make phones profitable in the long term. Otherwise they are going to go through drastic changes and have to cut a whole lot if they are going to become a software only company. John chen, not one for sentimentality, hes been very pragmatic in the way hes run the company. Plenty of loyal users bill grifl edge being one of them. He has the Marissa Mayer problem. Im not trying to be too harsh but certain Tech Companies no, let me finish. I happen to they have different kinds of problems. But you know, technology is very brutal. And what happens is when youre when its not working, it can it goes sour quickly and doesnt matter who the ceo is really. Yahoo has no legacy dinosaur business thats separate that they could have Something Else to take off. Its all tied in together, blackberry has a hardware business separate from the Enterprise Software and security business. They could possibly drop the phones an still have something to go with. John chen has built that piece well have to see if hes built it far enough to survive on its own. Thats the hope for a blackberry investor thats different from a yahoo investor. John fortt. Were four days from the wisconsin primary. Ted cruz pulling ahead of donald trump in the polls, 42 delegates are on the line. What a victory for cruz would mean for the 2016 nomination is next. And Mary Joe White putting Silicon Valley in her regulatory cross hairs but is that past her purview. Were back in two. 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. On their auto insurance. 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First though, march jobs data better than expected, 215 jobs added last month but a key level that larry kudlow is watching is the Labor Participation rate which he says is way toolow. Larry joins us now along with fellow cnbc contributor and former congressman barney frank. Thank you for joining us. Larry, weve got a little bit of a uptick in the Participation Rate today . Yes, we did. You know the jobs numbers today were fine. Theres no questioning about that. What bothers me is a longer term trend. If you look at the labor force Participation Rate, if you look at the employment positive population ratio, if you look at the heart of mefamerican worker between 25 and 54 years old, every single measure peaksed in 2000. For past 15 years with republican and democratic white houses, with republican and democratic congresses, weve been unable to break out and get more people working and by the way the Economic Growth rate during that period is a meezly 1. 7 . Productivity is falling and were not getting any gdp. All im saying is we have serious longterm problems to think about that are really bigger than just todays number. And span two different administrations. One republican, one democratic. Yes. Barney frank, some people say this is demographics. Do you believe were doomed by demographics in this country . I dont think were doomed at all in the first place. Thats something larry and i would agree on, if were talking about the birth rate that is too low and not producing enough younger people, people in the work being age, we have the continued fact that america is the most desirable place in the world, one of the most desirable places in the world to live in. We have people all over the world who would love to come to america. And we have the ability to control that, not to the last degree. Were a free society and cant shut that down as efficiently. I think the i think the goal of immigrants which has always been important in america, will continue to give us some ability to deal with if there is a longterm demographic problem, its a birth problem and deal with this through immigration. The point has been made about the Silicon Valley companies, how many of the big successful ones started by immigrants. I want to make a different point. Some people say these low Participation Rates and slow wage rates are a function of demographics in terms of older age and retirement. My point about the heart of the workforce is between 25 and 54 years old, thats not a retirement age at all. That is the basis of what we got here. And its this participation operate is very low and as i said it peaked many years ago in the year 2000. Another point to back this up that worries me long term trend, bipartisan by the way. They arent getting paid. The american middle class is not getting paid. Per capita wages have barely moved since the year 2000. So we have a campaign right now. I would love to know can i respond to that. Barney will agree that all im saying is that youve got revolt and discontent and anger in this election from the middle class and thats a big part of it. Let me respond in two ways. First of all, we all believe in a free society. If people decide for a variety of reasons they would rather not work, well thats a decision and choice we should respect. I think its important that we have jobs available. Thats why the jobs number not just this month but the trend, the great increase weve had, thats very encouraging. What it means is people want to work, they are increasingly able to do it. And thats a good thing. If some people decide for whatever reason, well, i dont have to work anymore, want to spend more time with my family or whatever, thats a choice. Making it possible for people to make that choice is a good thing. Second thing in terms of wages. Im glad to hear, im a little puzzled why you would say only the middle class not getting paid. People in lower than the middle class arent get being paid as much either. Okay. I would say this is encouraging to me and im glad to hear larry talk about it. Many of my conservative friends when we talked about the distribution of income opposed to the growth, we were dismissed as advocates of class warfare, there is a National Consensus important for social and economic rjz. We have to go, larry, but what does this mean for the eye leks leks . I dont havent to have redistribution, i want larger and larger growth. I want to regain you have to have a different share of it, changes in the share. I think it will come. We need reform programs, i get that. We need more growth and we especially near more productivity for the two millionth time ill call for a slashing of the u. S. Corporate tax rate, which i believe will bring in capital, create more investment and raise the productivity rate, which is the key to growth and wage income. That is my mantra and unfortunately no, fortunately im sticking to it. Instead i would like us to build infrastructure. Im okay with infrastructure too. I want to investment all over the place but kelly, to answer your original question, this is affecting middle class is angry, this is affecting republican primaries guys, we have to go. For the working class as well, dont only talk about the middle class please. Duly noted. Gentlemen, appreciate it. Thank you both. Securities and Exchange Committee taking aim at Silicon Valley Mary Joe White cautioning the Tech Community by high valuations of unicorns and urging private firms to be more open. Tech veteran mark cuban no stranger to controversy with the sec and joins us on the phone to discuss the new concerns with Silicon Valley. Mr. Cuban, thank you for phoning in. Are they overstepping . Its not so much they are overstepping the bounds but doing what they do, 100 degrees of gray. Theres no clarity and where theres no clarity and certainty what to do in response to the sec, you get people doing nothing or people avoiding going public or doing anything to avoid dealing with the sec and thats a real problem for up and coming companies and problem for the economy as well. Would you agree with her characteristic of Silicon Valley Companies Need to be more transparent, et cetera . They are private companies, what do they need to be more transparent about . They are not selling shares to the public. There are secondary market shares being sold but if the sec is concerned, pass rule soz we know what they are and can adhere to them. Where they always go wrong, everything is very open ended and nobody knows what the rules are. In you dont know what the rules are it gives them room to take whatever actions they want and create their own fulltime employment act with their lawyers. Thats a problem and leading to companies who already are talking about not wanting to go public. 20 years ago, it was a goal of every enelectrtrepreneur to takr company public. Led to growth and more jobs and employees at all levels being able to participate. Equity and gain from their Companies Going public. Thats gone. The number of Public Companies have been cut in half. I just saw a survey that said 70 of startups now in the valley would rather just have an exit and not go public. Which in turns means all of these Big Companies that are public or Large Companies that may be private as well, rather than having to end this capital into growth and r and d, they can sit back knowing that every startup is coming to them, which in turns reduces competition. And that in turn reduces unemployment. Theres so many problems inherent with what the sev is doing and impact its having. Mike santoli here. One of the things Mary Joe White was saying, still private companies as they rise capital privately have to be more transparent about exactly what their valuations are, shes talking about this gamesmanship of maybe overstating valuations she may be right, im not she may be right but the point is, if youre concerned about it, give them rules and guidelines that are specifics so they know exactly what to do. Now she said it and now were concerned and what are they supposed to do . Just hire lawyers and get opinions . Is that doesnt accomplish anything. Mark, you said entrepreneurs dont want to go public because the sec is so intrusive and not clear. Isnt one of the reasons becse the private market is providing them with valuations that ten years ago were unheard of in the private market . No because theres no i dont agree with that because theres no liquidity. Whats happening is the companies that have stayed private too long not only is there not liquidity for founders or marginal liquidity for founders but nottic identity for all of the employees an losing people to other companies that are looking to go public. I just think right now they are afraid. Its more so in Silicon Valley than anywhere else but its an issue. Is there a problem in general, mark, with a lot of these Companies Just kind of putting these valuations out there and not having to then be held to the discipline and scrutiny of Public Markets, they are able to kind of keep the story going if you will . That does seem like its problematic. Well, yeah, you and i had a conversation a while ago talking about bubbles where i said if you invest in a private company you should write your investment down to zero day one because theres no liquidity and if you dont have intentions of going public, getting liquid will be depending on unless youre one of the 1 able to cash flow your business. It does create problems but on the flip side, we cant presume that the bcs and companies doing b, d and e and later series investments are stupid. They are typically not the moms and pops going into the later series. Those investors and those funds should have not wherewithal to make the critical decisions that are necessary to value a company. And so look theres definitely two sides to the coin. Definite will he some inflation and valuation and maybe the sec is right but if she is, then what she should do give bright line rules. The one thing that can make the whole thing go backwards instead of forward is uncertainty. And thats quwhat the sec does, add uncertainty and creating the opportunity to take action which accomplishes nothing. Im thinking as well about if you are looking at the con lags, maybe look at netflix which sold off this year, where do you find attractive investments right now, mark . I mean, i tend to like private right now but im going to my companies and saying, its worth the hassle to try to go public. And so theres kind of a down mood on ipos because they look at his tore he canally whats happened over the past year and theres been a lot of companies that have been ipos stocks have gone down after the ipo. What im telling our companies, thats a reflection of companies waiting too long. Way too often all of the growth and super hypergrowth that i go public early is part of your public experience and they get to participate in, thats not happen anymore. Companies are waiting to seven, nine, ten years or longer to go public and so thats why youre seeing a lot of ipos under perform. Im trying to work with companies and say, look, lets find underwriters and not everybody is biting and something we have to work at. When we hit 50 or 100 million in sales and think we can be a 500 or 750 million revenue and 10 net Profit Company lets go public early. Challenge is the sec does not make it easy. Hopefully with all of these plus rules coming into effect, some of that will change. And i really think if done right and we can get some Investment Bankers really motivated to get behind this and im trying then well see kind of a reignition of the ipo market with Smaller Companies coming out and that will allow investors in the Public Market to participate in growth of the the problem is theres a reduction of competition for Big Companies because all of the Big Companies have to do is sit back and wait and buy these upstarts doing well, look at facebook with instagram and oculis, in the past they would have gone public and thats diminishing competition and bad for everybody. Larry kudlow talks about capital investment, thats because not so much tax rate, its the fact Big Companies can sit back and wait and buy the next upstart that would have disrupted their industry and not have to worry about doing their own r and d or investing themself. Let me ask you because i brought it up about netflix. Thats another regulatory issue and the fcc just said the fact that they are throttling speeds for people on at t and ver size zon doesnt violate net neutrality. Is that fair . What do you make of this whole thing . First of all, whatever the department of internet fcc says everybody has to abide by. But literally the netflix throttling was more a response to their customers. Im not a fan of net neutrality, i think its a huge mistake and will hold us back in terms of advancing the internet and advancing digital and broadband platforms. But that said, what netflix does with its customers to try to save them money on their band width and give them an opportunity to watch more netflix content, i didnt have a problem as netflix shareholder or netflix user. I didnt know it but i appreciate it because i do watch netflix a lot on my cell account. It probably saves me money. Thats exactly why i was curious what you were thinking there. Real quickly as well, tesla shares in the news today, they have this 200,000 preorders for the model 3. This company is subject of huge debate. Do you think this is the kind of early stage publicly traded company that is a good Investment Opportunity or not here . What do you make of tesla . Are you a tesla guy . Do you drive these guys. Im afraid if i drive ill look at the screen and that will be a big problem. Ive driven them and love them but dont trust myself to drive them. But look, theres two things here and it touches back on what i said earlier, theres a dirnlg of hypergrowth companies that are private. You cant name Ten Companies maybe in the biotech but outside of that cant name Ten Companies that are wow, these guys are going to change things, they are the future. In the 90s and you could Name Companies up and coming that consumers would recognize and people were excited about. Because theres so few of those, tesla netflix, we battle about twitter and whats going to happen there, thats why the arguments are happening because theres so few options. Mark, stay right there. We have Andrew Romans of rubicon booked to have this very discussion about the sec and the vc community. He joins us now as you were waiting and listening to marks comments, what is it you wanted to say or bring up in this discussion . Hey, mark, i agree with you on the fact that startups stay private longer and time delay between sirryes a and exit have gone to 8 or 9 or 11 years. Ill challenge you there is liquidity. Founders can sell maybe 20 of their founders stock into the next financing round. They can sell to their vcs. Absolutely but what about the other 300, 400 people in the company . On that you mentioned that. So right now were seeing employee wide liquidity programs, you have direct secondary funds and growth funds coming in saying we want to buy some of this company the founders dont want to do an employee wide liquidity program. Go ahead, mark. Let me restate. Theres not theres some liquidity but not nearly as good as being parts of the ipo market. When you do secondary market liquidity, first of all, that was part of what the sec is going to be looking at. Who knows its going to be available or how its going to be available. Secondly, you when youre a part of a Public Company and own the stong and get to see a market to market every day, theres a sense of pride. You get to be part of it and friends get to buy in and people get behind you. Theres so much more to it. The liquidity is completely different. Youre exactly right. There is some level of liquidity available and more programs are becoming available. Its really de minimis. If im an instagram shareholder thats a bad example. If im a private example thats not drop box and i think our companies are doing great area we growing and im limited to selling 10,000 worth because the ceo and board does not want to see the stock in too many hands because that creates its own set of problems, so its completely different. So i agree with you there is some liquidity but its so limited and theres so many problems that occur if you become very big and try to go that way that i think you should just go public. Why not take it the other way where the Public Market then gives you the opportunity to really see how your company is valued . Are people scared . Is that whats going on, when they look at what happens to etty and square had to do a down round on its ipo an they dont want that negative attention . Theres two things. One is that some of these secondary financings where someone is selling shares in a privately held company to a different investor, these deals are structured. Someone might say ill buy the stock at this price and if i make a 2 x return ill split the profit on top of that 50 50 with you. Theres ways come after that hard, andrew. Sec will come after that hard. I agree. I think and in particularly where the sec will get more involved and should be if we follow the law, if someone is brokering that transaction, not investing out of their own fund or own personal capita, thats irregular lated activity and where the sec is already here and examining the structured deals when theres a broker. When its someone investing out of their fund or personal capital. The rules say the sec is not supervising those. One thing i want to mention, if an employee in a privately held Company Sells 10 of their position and take that money home, their spouse will say i dont want you to quit your job, stay there and keep working there, we know how much the 90 is worth and good for society but you dont mark, last word. Right, you dont know what that 90 is worth unless its public. One day snap chat is worth 16 billion and next day worth 12 according to fidelitity and now worth 20. You have no idea. Snapchat were public we would know exactly what it was worth. Fidelity is the new nasdaq, my joke. Thank you so much for calling in and thank you for joining us. Fascinating discussion there as we continue to watch and see whether well start to get that ipo flow picking up again. Well find out what Value Investor thinks about tesla coming up when closing bell comes right back. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. A year ago few americans ever heard of the zika virus but concern is ratchetting up. Federal officials met in atlanta to make sure the u. S. Is prepared. Meg tirrell joins us with one area already in the fight. The megsage is zika is coming and one prepared to deal with it key west, florida. They have been battling for years using air, they drop pesticides using helicopters and do it by foot. Turning over every last bottle cap containing water where mo mosquitos might breed. Take a listen. The keys of Mosquito Control is a major part of our infrastructure here. Tourism is the most important industry we have. We want to keep our tourists and residents happy. So here in the keys were willing to spends a lot of money to keep the mosquito numbers down and diseases down. Now they are even considering really brandnew measures like janetgeneral genetically modifi mosquitos, very exciting stuff going on. I heard the sunscreen makers have all of their lines in production working overtime, bug spray bug spray, not sunscreen, bug spray meg, thank you. You need sunscreen too. Take care. Exactly. Prepare for the coming summer and mosquitos. Beyonce has a new line of sports wear called ivy park. When retailer lululemon commented about a potential rival line, the war a words started. Details next. singing alougetting to know you. Getting to know all about you. Getting to like you. Getting to hope you like me. Is someone getting to know your credit . Not without your say so. Credit lock lets you lock and unlock your transunion Credit Report with the swipe of a finger. Getting to know you. Getting to know all about you. Get onetouch credit lock, plus your score and report at transunion. Com get in the know. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Superstar beyonce is now getting into the fitness game. Shes launching an athleisure clothing line called ivy park. In reaction, lululemon tweeted a comment saying, quote, they do say imitation is the best form of flattery. Maybe beyonce is so crazy in love with our brand, shes made her own. Nice song reference there. But after backlash from beyonces beehive fans the company has deleted that tweet and is now sending out messages like, quote, no harm meant and weve got nothing meant and beehive, thats what they call the beyonce fans. Her followers, absolutely. Is it just lulu lemon shes copying, because this trend is everywhere . I want to know. Thats the whole thing. Where is the kelly evans line of yogawear. I would love to do one. I do yoga and love this athleisure category. Hilarious, every celebrity has decided its not a fragrance but about workoutwear. A story in the New York Times about exactly how crowded its getting so athlethargy explains the growth of this sector. Ive been on alert way too early for this in terms of basically everybody deciding that its okay to wear yoga pants everywhere. Youre calling the top of the Housing Market in 2004. Perhaps, perhaps. I called a month ago, i told you, i called the top of the microbrewery market also. When you see these comes back you might also be ill turn out to be very prescient. Im not saying people who are doing yoga will stop wearing the clothes but people who go about their day with no intention of sweating and at some point thats going to be considered a cultural moment. Have i told you about my fuchsia pants. Track pants. Not fitted, kind of like nice sweatpants and wear them all over town. Great Company Called oizelle, whole story behind them, sponsor top elite runners in the country. Sounds like its functional. Not a huge fashion component. But they are counting on more than just the elite athletes wearing, it shall we say. Why Value Investor mario gobelli is not investing in tesla. I didnt ask him about yogawear. Thats next. Teacher of small children. Thats right. I have read it is the hardest job in the world. Thats why im here. Can you. I can offer advice from the accumulated knowledge of other educators. Thats wonderful but. I can tailor a curriculum for each student by crossreferencing aptitude, development, geography. Sorry to interrupt. But i just have one question how do i keep them quiet . pause watson . There is no known solution. patrick 2 pretty great. Ke to be the boss of you . patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. Doing small gigs,side gigs. Gig gigs. Quickbooks selfemployed helps me get ready for tax time. To separate expenses,i just swipe. Its one hat i dont mind wearing. [passenger] i work for me. And so does quickbooks. It estimates my taxes,so i know how much stays in my pocket. And thats how i own it. [announcer] stay in the flow with quickbooks selfemployed. Start your free thirtyday trial today at joinselfemployeddotcom. Herthey work hard. Ade, wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. 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. There is a new spark in town, the spark value edition launching on cnbc. Com on monday. I sat down with Value Investor mario gobelli for the first part of this new series tomorrow, and given the huge tesla preorder news, i asked him if he was investing in the electric carmaker. Heres what he had to say. At the moment we had that debate internal i today for 35,000 plus. Maybe you have to pay 45,000. They are hoping to sell 500,000 of this new model and the analysts are calculating it. I tend not to like to own General Motors or ford ortez la. I like to own the parts companies. Weve owned autozone and oreillys and genuine parts. Owned it for 40 years. If inflation picks up, they do well and if deflation continues as it is they do well. They have limited amount of debt. Theres 150 million shares and the stocks are close to 115 billion market cap and they made for our clients and 13 over a long period of time, kelly. Were very comfortable with that, so i like everything that musk is doing. I think hes very creative and God Bless America for having more individuals like that. We should lower regulation and lower Corporate Tax rates and be competitive globally. Are you investing in no, no. You can catch the full interview with mario gabelli, cnbc. Com pro on monday. He loves the parts suppliers. Cares about valuation unlike most of the people who own tesla. And mario would say hes a margin of safety guy, not a leap of faith guy and if youre a tesla investor youre making a leap of faith that they will get to half a Million Units in a few years and up from there. And do so in a profitable way. The same way that the buyers of your yoga pants, kelly, will have to take a leap of faith. Great business. I had a guy on talking about Virtual Reality. I said whats the last big project you got excited about, yoga pants, that was it for me. See if Virtual Reality headsets are the next big thing. Virtual reality and microbreweries. Any pearls of wisdom . Start of baseball season this weekend is the only thing that matters for the next week as far as im concerned. I dont know. You watching baseball . No. Okay. Ill watch the final four this weekend probably. There you go. Youll have to watch the show. And ill be cheering for steph curry, a little warriors action. Thanks so much for joining me to close out friday and begin the month. That does it for us on closing bell. Coming up, fast money. Happy friday. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square, im melissa lee. Our traders are tim seymour, deaf seaburg, steve grasso and guy adami. Tonight on fast a market mystery. March auto sales coming up solid and auto stocks are falling off the cliff. Could it mean the smoking hot trade is about to burn out . And happy 40th birthday apple, but what about the next big tech stock you can own for the next 40 years . Our traders tell us the names they are betting on and later gold is doing something it hasnt done since Ronald Reagan was president , and it could be a iropportunity to buy. Well tell you what that is, but first we start off with the markets with the s p and dow hitting fresh new yeartodate highs. The s p is only 5 away from its alltime high, but heres where it gets a little tricky. The move comes as oil and rates on bonds are