Transcripts For CNBC Closing Bell 20160902

But were cut those gains in half. So maybe investors betting that the september fed rate hike is even less likely. Well look at what that means for the market, kelly. Weve talked about Donald Trumps trip to mexico and the potential impact on the immigration policy and what asht the currency in the peso. She cannot wait to tell us about that. Meanwhile, mylan shares hit. What a story this is. Theres news the company may have overcharged medicaid for the epipen. Theyre saying maybe grossly overcharged and now the Minnesota Attorney general is asking the company for documents and lori swanson will join us live to explain exactly what shes looking for in this new investigation on mylan labs. And new quodevelopments in Samsung Galaxy note 7 saga. Well have the latest details for you coming up. Lets start with the jobs report, the timing of the feds next rate hike. Steve liesman is all over this for us today. Give us the hits, runs and errors, steve. Theres a couple way it is look at it. It was okay. Less than expected. 151,000. Below the strong numbers we have had. But more than enough to keep the Unemployment Rate steady. Look at clarity of the fed, it was a really lousy number, just on the cusp what might be good enough to hike in september or just below it, depends on who you talk to. Barclays, labor markets squeak past threshold hold. Prestige economics said, no. Fed on hold after not so labor day employment report. Fell to around 26 , 28 going in. Now 20 . Up and down a little bit all day. A 20 chance of a hike and the odds for december remain and went up a little bit above 50 . Heres the numbers. Looking for 180. We got 151. Unemployment 4. 9 . Hourly wages up 0. 1 . Job growth in government and leisure and hospitality. Jeff lacquer said rates should be significantly higher. He thinks job growth is about double the population growth. He says inflation is likely to cause rates to go higher in the future and data he says is consistent with inflation moving back to 2 . He wants higher rates if that wasnt clear. What do we do now . Wait for more fed speak next week and then before the september meeting to see if its on or off for september. I was hoping to go away for the weekend and have it settled. We have the talk about it. Meet a the beach. Wherever you want to talk about it but we are still talking about the fed and this jobs report and that rate hike. Its the Steve Liesman continuing employment report is what thats all about. Exactly. Do you think, though, couple that with the ism number yesterday, doesnt that isnt the ism number really the number to be something that would keep them from raises rates . I dont think so. I think its possible to see the ism as an aberration. Look, manufacturing was never gang busters to begin with. Going at about 52, you know, now fell down to 49. Its not really contracting all that much. But it was never really growing that much. The best to hope for is manufacturing at this level at least is steady and let the Service Sector economy propel growth. Thank you very much. Have a great weekend. And think a lot more about the fed and raising rates. On the beach. Or dont. Joining our closing bell exchange, citi economist bill lee. River front Investment Groups doug sadler. We are very pleased to welcome, well show you these people momentarily. There he is, art cashin is with us today. And Rick Santelli is at the cme. Arthur, you know, this is what, now, day 40 that the market has yet to see a 1 move one way or the other. And its jobs friday. What does it take to get the market to move here . Well, probably takes more clarity from the fed. We have anything but it. You know, you are right. Liesman with Permanent Employment at this level. But well see. I thought the number was weak enough to take september off. Mainly because the average work week dropped. And thats the equivalent of losing over 250,000 jobs. Which more than wipes out the 155 we got. What about you, bill . In terms of where this leaves prospects for the next hike. We never thought september was seriously on the table. We thought the fed speak mainly to get the probabilities priced higher. Now that the data has come in theyre showing theyre not ready to move because the doves have the power at the fed. Theyre the voting members and really dominating the board. All of the hawks you are hearing are generally nonvoting regional fed president s and i dont think they have enough smoking gun in these data to be able to get them get september as a real serious meeting. We think decembers still the more likely one. Doug . Yeah. I think the number buys the fed time which is exactly what they want. Right . Raising rates, theres risk to that. New monetary experiment, a new regime. So i think the fact that you dont have to do anything is probably a good thing for the fed and they can sit and let the data play out. What they want the see is clear economic recovery and i think one of the things to take away from today is if the if were not sure what the fed is going to do and take that sort of one way or the other off the table, the market still wants to go up. Particularly wants to go up overseas and thats a big takeaway. U. S. Wants to gradually drift and overseas markets inexpensive and left to their own devices theyre rising. Well circle back to that. Art, earlier you mentioned Stanley Fischer, an interesting one at the fed. Hes seen as close to janet yellen of a friend and like mind an one of the more hawkish people on the fed. So where does he stand . Thats a great puzzle. Markets are asking that. I mean, clearly he has for months and months talked the hawkish game that every meeting should be on the table. And yet, you talk about fed credibility, down here on the floor theyre wondering if hes that hawkish and sure rates should be raised when they pass on it, why doesnt he dissent . He has not yet. Thats exactly right. I think the sanly fischer kabuki dance for the photo generalics of the jackson hole convention. After that, hes put back in the closet again. Stanley fischer was loved by all economists and hoped for as a leader on the fmoc. He is just a person they drag out to show unity when they need it and they put him back. I think the real power is with the doves of janet yellen and branyard calling the shots. Rick, what kind of number does the fed need to see to move . You are not a fan of the fed and want to see them move now, but realistically, what number do you think theyre looking for before they pull the trigger the next time . You know, i want to answer your question but i think if you have 250,000 numbers, it doesnt mean that they would move. I think 250,000s a robust number. We had a couple numbers in that camp. I believe 292,000 a couple of months ago. But if theres global issues, they can always cling to that. Theres a lot of things they can do. The one guest really aptly put. They want to wait until theyre sure the economys on a solid recovery. I think we are looking at the most solid recovery we are going do get. Even a cheerleader like labor secretary alluded were long in the tooth on the expansion. That would be the last thing i would think he would be saying. But i continue to say that the problem is that this is all were going to get. We need to make major changes in so many other head winds, whether its taxation, whether its obamacare, whether its rules and regulations. All that is where the gold is hidden and the fed doesnt have a shovel to get to it. But it still doesnt mean and the biggest hypothesis is theyre doing no harm, no harm keeping rates this low. I disagree. We have paid a very big price after the credit crisis for the lack of variance in growth. They stripped us of anything above 2. 5 to save us from anything below 0. But years and years and quarters of quarters of 1. 5 to 2 is damage and so much unintended damage we wont know about for quarters ahead to come back and try to put the pieces back together. Productivity and growth being the offchutes at the moment. Bill, back to the Stanley Fischer point once more because he was moving markets more than janet yellen for a time coming into the fed and is the evidence now pointing to markets . Should Inspector General near who hes saying or depends on whether or not they are on the precipice of raising rates . His track record from last year i think verifies that the markets should well ignore him because he was the one who was hawkish, who said the macro conditions are ready but unfortunately bill dudley said the financial conditions are now and thats the point of view seeming to sway the fed and until the markets accept a fed rate hike, they wont do it. Rick is absolutely right. Markets are so distorted with eight years of zero rates and destroyed the market to allocate resources and a reason alone we dont have strong growth. Sadler, how do you make money . Hunker down with the dividend payers that are popular . Invest for growth . Yeah. I would avoid the big i mean, the easiest thing that investors want to buy right now is Equity Income and thats one of those areas i think gotten overbought. I think its people willing to overpay for reality and not pay for hope. Hope is all about growth. And youre at this weird time where i can buy the utilities for the same price of tech stocks. Tech stocks trade at three or four times faster growth. Not regulated. Theyre not constrained by geographic boundaries. Some pay dividends, too, by the way. Yeah, sure. I can buy a group that grows faster, more upside or i can hide in the utilities. Thats from our view seems like an easy trade. All right. Gentlemen, good to see you all. Appreciate it. Have a good, long weekend. See you later. Thank you. And the whoop whoops are kicking up here, bill. Theres more to come in the next 20 minutes or so. I miss this. You got do get back down there. Catch bill tonight on pbs. Thank you. Meantime. Youre welcome. About 50 minutes left to go in the session and the dow up 60 points today. Well off the highs and up a third of a percent and nasdaq up 18 and s p up 8. A story thats unfolding, minnesotas attorney general joining the chorus of government officials demanding answers of mylan. Lori swanson will speak with us exclusively to talk about the investigation that she has begun. Also ahead, is britains exit from the European Union already baked into u. S. Markets or does it still have the potential to blow them up . Well debate both sides of these very different scenarios on what brexit means for your investments. Experiencereathtaking xus perfornce streetlegal form. Get grt offe at the lexus goen opportunity sales ent upo 5ustor cash onds september 5ths. See your lexus dealer. Welcome back. The mexican peso slammed this year. Donald trumps rhetoric might be part to blame. Sara eisen shockingly has the story. This is a big deal, bill. Is trump crushing the peso. It is a loser this year losing about 9 of the value against the dollar and has been unusually volatile. So, weve got this great chart thanks to shawn osborn for putting this together for us. It shows the orange line trump versus clinton in the polls. The blue line is the u. S. Dollar versus the mexican peso. As you can see, that when trump spikes in the polls, so does the dollar and that means the peso heads lower. Is it a coincidence . Look at whats happening right now as trump starts to Gain Momentum again in the polls, the peso is getting crushed. The question, is this real lay correlation thats for real . Maybe. Certainly i talked to a number strategists about this and said you are to look carefully. This is the u. S. Dollar versus the peso against the price of oil and you can see going back several year this is correlation is very much real. Mexico is an oil exporter and when the price goes down, that hurts the economy. And its currency sells off and part of the story and the trump threat is real. For instance, he say that is if he becomes president , hell rip up nafta and try to renegotiate it. Could be a blow to mexicos economy, an export economy and almost 80 of them go to the United States. More than half of its imports come from the United States and dont forget foreign direct investment, hundreds of millions of dollars poured into mexico from the u. S. And since nafta taken effect in the early 90s. Watch the peso, especially if trumps momentum continues. Traders are buzzing about this idea that shorting the peso is ultimate trump hedge and could bear the brunt of the economic damage if he is president or at least uncertainty. I wonder kind of which is this basically a dollar effect that its having on the peso or line up the poll numbers with the peso against a basket and still see weaknesses . It is unique to the peso but as expectations raise Interest Rates, ramp up again, that does drive up the u. S. Dollar and it hurts emerging markets. Mexico is one of the most traded currencies but it is notable that it has underperformed and sort of been in a league of its own, especially when trump won the nomination so this is increasingly a correlation. Well see what happens towards as the polls move to november and the journal said implied probability, the Options Market around this currency for three months spikes. In other words, theres a hedge in expectation of a big move in the currency as we get toward the election in november. Im not trying to poopoo your premise but dont you think the Oil Correlation is more solid . Absolutely. I know a lot of strategists agreeing with you. Yelling at the television right now. But it is something that people are talking about. The trump factor. Mexican economic threat is real, especially talking about reopening nafta. As trump said, mexico has been a big beneficiary of this trade agreement. Potentially more so than the United States. Certainly its economy less diversified than the u. S. And more dependent on the u. S. And a wild card and when you have these big economic threats, they take it out on the currencies. Yep. All right. Thanks. Have a good weekend. You, too. Meantime, Economic Activity has picked up in the uk, manufacturing pmi climbed to a 10month high in august. Data from market showed that this to be the biggest month to month increase in 25 years. Construction pmi also showed signs of life in the uk, as well. What do you know . Maybe brexit isnt so bad. Joining us is scott sumner from George Mason University and john mull don from mulden economies. John, first, to you, you were warning about the effect of brexit not just on britain but, you know, the rest of the world, kind of global economy. Do you feel differently today . Not really. I mean, its beginning to play out in the rest of europe. You are watching italy go, well, we have to rethink our policy. Just yesterday they said were going to cut taxes and raise the deficits and its like a double dog dare to the European Central bank. You know, stop buying our bonds. Well give you more bonds, well run our debt to gdp up to levels only seen by greece and if you dont buy our bonds then well have to leave. I mean, it is truly forget the rules. Well, once italy doesnt have any rules where are the rest of the rules . Yeah. I think that the affect of europe is really going to be when they begin to have a slowdown, a real recession and plays out into the u. S. Scott, do you think that the pickup in Economic Activity were seeing i mean, obviously, this is very early. Nothing changed in Great Britain relative to the brexit process. But do you think the pickup in Economic Activity is in anticipation of the that day when it happens . Whats going on there . Well, i think a lot of pundits thought that the initial impact would be the uncertainty would push the uk into a recession and i thought that was a possibility but not that likely. Now its looking like the uk economy probably wont be hit very much by the uncertainty. Remember, brexit itself wont occur for several years and we have to look at the economic effects later. I do agree with john that italy is probably a greater risk with a referendum coming up and something to watch. Each one of the shots likes brexit vote, italy referendum, there are things that could create a eurozone crisis but probably wont and some point a black swan may sort of hit us from an unexpected direction and so this time we dodged a bullet but there could be future shocks. That said, john, the bank of england responded sharply to this and was so worried about the effect on the british economy it cut Interest Rates to a new record low for a 400yearold institution. And is unveiling other measures, too, to prop up the economy. So are those warrants or was the drop in the pound enough to cushion the blow . Part and parcel of what we saw in jackson hole f. You go look at jackson hole and read the footnotes and the papers, i mean, footnote 8 Janet Yellens speech which was utt utterly boring except that she laid the philosophical case for negative Interest Rates. The princeton professor gave us, well, maybe we should start thinking about 4 inflation targets. The other professors one after another were laying out a the case for a much easier Monetary Policy and when the u. S. Goes into the next recession, we now have the philosophical underpinnings for negative Interest Rates. Its in their toolbox and they want everybody to know it. And its, you know, the same thing is happening but i was asking same thing happening in england over the world. Did britain just spend the bullets on brexit which, in fact, looks like its had certainly not the feared adverse effect so far in the economy . If you listen to the papers, theyre saying, no, we have lots more bullets. Negative rates. We can buy equities. I mean, the largest shareholder in i mean, in facebook today, the public shareholder, bigger than zugerberg is Swiss National bank. We are seeing a world upside down. We dont these guys are making it up as they go along. And so, the bank of england have they have forgotten badgett. Theyre taking the koolaid and move rates down, whatever it takes that they think will stimulate their economy. Scott, you have been urging moderation by the bank of england. Do you think mark carneys overdone it . No. I think hes just about got it right. This isnt like other kind of politics. The more bullets you use, the more you have. This is what people dont understand. Getting a more expansionary policy will actually allow for higher Interest Rates Going Forward and more ammunition when the next recession comes. I agree with john were likely to go perhaps even negative Interest Rates in the next recession but thats less likely needed if we can have faster growth in nominal gdp and support or underpin higher Interest Rates. Interest rates fell sharply over the world right after the brexit vote and before the bank of england cut and so it was really just responding to reality in cutting the rate a quarter point. It had been baked in by the market move. It is fascinating, scott. We almost have to go but i wanted to ask you then kind of a central question. You know, is the british economy itself so weak that even if youre saying this Central Bank Activity is stimulative, its, you know, so weak to warrant all of these maneuvers on its own . I guess you could apply it to the u. S. , as well. In the case of britain, it was almost less responding to an Economic Development than a political one. Yeah. I mean, ten years ago i would have said, no, it is not weak enough to justify the low Interest Rates but again i think the markets are really signaling that the low Interest Rates are reality. The Central Banks cant do much to fight them. We have seen the fed as you know predict four rate increases this year and the market wouldnt accept those. So i think ultimately people underestimate the extent to which Central Banks to adapt to where the market is if they want to keep the economy growing and right now global economies cannot support higher Interest Rates. It is a mystery why. This seems to be the reality. A mystery to explore next time. Thank you, guys. Thank you, gentlemen. Good to be with you guys. Thank you. All right. We have 34 minutes left. And we have got about, what . Seven minutes before the whoop whoops which are just Getting Started but its a positive day for the most part. The dow was up more than 100 points early on this morning. Now a gain of 68. Coming up, not good news for uncle sam. We have got someone who says tax cheating is about to rise in this country. Shell explain why. Mylan incured the wrath of another government official. Lori swanson is demanding answers on the epipen price hikes. She will join us to talk about her investigation when we come back after this. Welcome back. Shares of mylan are dropping on a fresh controversy over whether it misclal if ied the epipen resulting in overpayment by the government. Meg tirrell is here with more. Meg . More news on the epipen and this, of course, pressuring mylan shares today. Several congressmen asking the government to look into whether the epipen has been mischaracterized under a medicaid rebate system essentially including Amy Klobuchar and frank pilone saying that cms because it was characterized as a generic, thats a misclassification. There is a difference in the rebates that Companies Pay to medicaid based on whether its classified as branded or generic or noninnovator. 23 for branded. 13 for generic. Klobuchar said this is an overpayment of 4 million to the state of minnesota alone this year. We reached out the mylan for a statement saying theyre in compliance of all the laws and regulations under classification of the medicaid rules saying epipen meets the noninnovator definition and a rule change in cms this year and applying for a new status based upon that. But klobuchar was on power lunch and talked about this. Take a listen. Your states a. G. Asking for document . From mylan, yes. This morning . Just came out today. I got the email waiting on the commercial break on your show. So thats why you didnt know it. You were doing your show, yes. Do you get the sense that other a. G. S in other states are doing the same . I dont know. I just know that we are doing it in minnesota. I put the estimates of the state was that it could be 4 million owed on one drug because of medicaid rebates. Just medicaid in one year. Is there an intent the a. G. Would sue . I dont know what the a. G. s going to do. So the questions now become, well, did they overpay . Or did they underpay . And will there be any kind of recourse here . What will happen . You know, obviously mylans saying they didnt do anything wrong. Meg, stay right there. We want you to be a part of this bringing in minnesotas attorney general for more on her request from mylan. General swanson, good to see you. Thank you for joining us today. Good afternoon. What are you looking for . Were looking at what was the companys pricing practices. I mean, the cost of this drug shot up so extraordinarily in amount from 2007 charged about little over 50 for the drug. In recent months its charged over 650 for the drug. We have heard public reports it costs a few dollars to make the drug and what were trying to drive at whats the reason for this price spike thats affecting so many people . Im wondering what you do not just about the overall price hikes on the drugs but the medicaid overbilling, as well, reportedly, lori. We are. And so, the interesting thing with mylan is the practices are impacting both individual patients. We have heard in my office from patients who simply cant afford to pay the high cost but we also know it impacts the government as an institutional purchaser. Right . We know that schools buy the drug and the medical Assistance Program buys the drug and looking at has the system been overcharged an enhas the company engaged in anticompetitive behavior . Mylan says that they have complied with all medicaid rules as well as all federal laws. Have they . You know, thats what they have said. I have seen that statement, as well. The purpose of our inquiry to get to the bottom whether they have or not. You know, the issue here, nobody begrudges a company a reasonable profit if they invent a product or make a product. They can charge a profit on that product. But here we have seen such a steep price hike in the price of the drug and trying to find out why. Mylan has a monopoly power. They have about 90 of the market and its not okay for a company that has monopoly power to engage in anticompetitive conduct or conduct designed to harm competition. One of the things we are looking at beyond the impact on the individual patient is what about the schools and other institutions that buy this drug. Theres been reports that mylan may have imposed a term in the contract with School Districts saying if you buy our drug and get a discount for it, then you cannot buy it from the competitor. That type of exclusive dealing clause in a contract serves to further the monopoly power of the company and puts them in a position where they can drive up prices so we are trying to look at whens the marketplace . What is have been the charges for the drug. What are they paying to make the drug . Try to get at the root cause. Right. Miss swanson, its meg tirrell. You see the situations come up with epipen and a lot of coverage of it, a lot of inquiries then start. However, we see this kind of over and over again with Different Companies and drugs. I wonder are you looking at other drugs . Whats the scope of kind of how to maybe catch this before it doesnt catch consumers not able to pay for their drugs . Yeah. You know, we i think in our office since 2010 we have on taned over 75 million in recoveries against Drug Companies. And so, there has been a lot of very dubious questionable activity on the part of the pharmaceutical industry ranging from antitrust violations to issues involving, you know, overcharging of the medical Assistance Program and not following medical assistance rules. I think its been an industry thats been rife with problems. This one came to our attention when we started hearing from people who indicated that the cost has shot up and now because so many people are caught in the high deductible plans, they were literally faced with either trying to come up with the money or if they dont gambling with their life. I think overall, though, the federal government needs to do more to try to police this industry. I think its we need to see the laws change by congress to allow competition in this industry. To allow importation of drugs. So that we can benefit of prices. In other countries. And i think probably more auditing to be done on the part of the federal government to, you know, try to find out, you know, what the companys pricing practices are so that hopefully its not just done on the back end, as well. Just a final question. Have you working or spoken with other state a. G. S and would you include a lawsuit at some point . We have talked to other state attorneys generals who expressed concern and right now we are trying to get the documents, get the information. We are not ruling anything off the table at this point. I mean, certainly if the documents were to show that this like any company violated the antitrust laws then a lawsuit could certainly be something to be on the table. The first step for sus to get at the documents and really put the company to the proof. I have really heard justification of them of why we have seen the outrageous price hikes and what we are trying to determine, is it just greed on the one hand or nefarious . Did they violate the antitrust laws . Thats Minnesota Attorney general lori swanson joining this hour, thank you so much, with meg tirrell. Thank you. As we continue to follow the mylan story, bill, which continues to have more chapters. Lets get to a cnbc news update with sharon epperson. Hermine tore across florida today. The first hurricane in a decade. It brought heavy flooding to areas along the gulf coast. Several neighborhood streets in Pinellas County was under water. One person was killed. A cur few in cass myrrh. Security forces against those of a young man killed in clashes. The 61yearold driver of this pickup apparently suffered a medical issue, and drove his vehicle into a river at high speed. He managed, though, to open his door and get his above water before being rescued by a good samaritan. Chick filet is offering a free breakfast item. It lets them customize the orders, pay ahead of time and skip the line at the register. Thats the cnbc news update at this hour. Back to you. Oh reprehencible. Horrible. Sharon, thank you. Sure. What are you talking about . Yeah. Right . The ordering . You dont want people to skip the line . Thats you have to get the app. Come on. 21st century. You millennials. All about the app. Listen. For that chicken biscuit, i would download the app. 20 minutes left. Tell the traders that was a pathetic whoop whoop that they did there. Pathetic . We couldnt barely hear the interview. I couldnt hear it. Well, i cant believe that. It was it was something else. No. I think they cut our mikes while it was going on. That must be it. It was epic. That will be the excuse. A leading trader tells us what hes watching into the close on this final trading day of the week. Samsung recalling that new galaxy note 7 worldwide. Mapping the oceans. Where we explore. Protecting biodiity. Everywhe we work. Defeing malaa. Diity. Improvinenergy efficiency. Developing me clean burng tural gas. Job . My job aexxonmobil . Turning algae into bfuels. Duci energpovert in the developg world. Elanyou oughwe justy. Tmade gas. Energy lives here. Thisompanys svers. Ne of mi acssible by thounds of spliers and employees globally. But with cyb threats on the rise, marys dcod be underattack. With the hp oft t, d security that senses and mitigates ber reats, their Critical Data is safert. Giving them the agility to be open secur welcome back. As we head into the close with just a little over 20 minutes left in the week, im here with steve grasso. Director of institutional sales. Why is this market rallying . I dont know. Its the fed transparent, isnt it . I dont know. What is it saying about the cla . I feel like everyone thinks theres clarity and transparency and nobody has any clue what the fed will do. Its up because the market decided shes not going to raise rates. Right . Thats why the banks are hit . The banks were up earlier on in the week and then seeing them flatten a little bit. They rolled over a bit. You started to see gold rally and said that they were not going to raise rates. We got the number today which gave them a lot of wriggle room as to what they were going to do. I think they stay away. I thought there was a real shot at september and after seeing the way the markets reacted, this week, i dont think theres any shot theyre going to raise. This is a bad news is good news kind of day then. Bad news on the jobs market. Good news that the feds not going to move. Yeah. I would guess thats the case. Youre going to look for the s p to remain flat to sideways and then maybe the risk is to the downside given what we know now. That was a loud whoop whoop, by did wi. As close as ive been to being on air with the 3 33 33. Enjoy your weekend. You, too. Bill . Apparently they cut your microphone. I stand corrected. We have 17 minutes left in the trading session here. With the dow up 76 points. When we come back, the Samsung Galaxy note 7 now being recalled worldwide after those reports of battery explosions. We look at what it means for samsung and for the spade of explosions of other batteries we have been seeing in the world of technology lately. Also still ahead on this jobs day, the secret is out. The secret service is hiring and cnbcs kate rogers took a shot at being one of the agencys recruits. You think its a job for you . Watch her report coming up. Samsungs attempt to super creed the apple iphone 7 may be going up in the smoke. Jon fortt joins us now with samsungs latest setback on a big launch. Jon . It is a recall and the scale of this is sort of unprecedented in smartphones from what we have seen so far. Samsung said they have seen 35 reports of the batteries that overheat, even catch on fire perhaps. I mean, explode might be going a bit far but it is a serious issue. But theyre doing a recall across the board in korea. In the u. S. They say the batteries in china arent so much an issue. Not clear whether theyll do a recall there, as well. Its not all the batteries is what they seem to be indicating. It is uss a subset of batterys that have caused a concern and its important the note this isnt the main thrust of sams g samsungs known line. The note 7 line on the higher end, the most expensive phone. They also have the note 7, i should have said, isnt in the main line and they have the s 7 also a big seller. This comes right before days before apples going to unveil the iphone 7. Not the kind of pr that samsung wants when apples going to get attention, talking about new technology and a phone that presum bring wont catch on fire. And this is not the only incident of batteries catching fire, problems. Happens with cars, other technology, as well. Is there something going on with Battery Technology itself in. Absolutely. In batteries, inherently unstable. So in a way, it is remarkable this doesnt happen more often and trying to push the performance of a battery, a bigger battery into a smaller space, charge it more quickly, these things can happen. So, theres nothing consumers can do about it . One thing to be sure to do, you never know if theres a manufacturer problem, but one thing to do is use only the type of charger and cable that the manufacturer recommends. Sometimes you get the problems of batteries if you dont have the right type of cable, the right type of charger on the battery. Using a third Party Battery you insert into a phone. If the battery is swappable. Recommend not to do that. We have seen those cases happen, as well. I should also note apple had an issue with the iphone 4 back six years ago. Steve jobs came back from vacation to calls would drop. It was the antenna placement and before a case for that and then the iphone 6 bendgate. It was not really bending and people worried about it. Two of apples strongest iphone cycles. If samsung handles it the right way, it could turn out just fine for them. Thank you, jon. Thanks, jon. They jack up the prices of the chargers, too. Pry to get the cheap one. You dont want to spend 40 bucks. Not a good idea. Beginning an investigation into that, im sure. I get it but its so annoying. Annoying. Thats the gist. They got you. Our next guest says september could be a big month for ipos. Hell tell us which ones to watch for after the break. Hey g are yodoing . Oh hey john, nnecting our bra soe can share our amazing ading knowledge. Thats gre idea, oh hey john, nnecting our bra why dont u justo to thinrswims chat rooms where you cashare strategies, ideas, even acal trades with mart profsionals and thousands of otherraders . I kn. Your bra td my brain before you told my fac mmm, blueberry . Tap into the knowledge o ottrers on thinkorswim on at meriade. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Okay. Running behind schedule. We have rich peterson of Standard Poors feeling the ipo market picks up this month. Why . Bill, historically, the month of september shows, you know, resilience in ipos. Coming off a very tepid august. Theres only six ipos in the month of august, slowest month of issuance since march of this year. A number of deals coming up. Yeti, cooler company. Consumer goods. We got to talk about that in a moment and want everybody to know that the u. S. Air force is making its way to ring the closing bell. You can see making their way through the floor of the new york Stock Exchange, tons of applause for that as we watch them make their way up to the platform to ring the bell in a few minutes. Not that arent we applauding the ipo pipeline, rich. Im excited about yeti. This is a great story. I never heard of them until the wall street journal story of people pilfering the coolers. Luxury cooler company. You have a couple of names there. Nutanix is expected. The problem with the ipo market is proliferation of the health care deals. 60 deals priced this year, 30 from health care, only 6 technology and none of the energy and materials sector. We have to see more activity in other sectors. Absolutely. We doubt well see uber. Not yet. Thank you, rich. Have a great, long weekend. You, too. Well take a break. We have the closing countdown coming your way in a moment. After the bell, Hillary Clinton declaring a war on drugs. Not street drugs but the high price of prescription ones. We talk to the ceo of the Cleveland Clinic about her plan. Its a performance macne. Wi this degree of intelligence. Its sercomp. With this grade of protection. Its a fortress. And wf luxury. Its an oasis. Intring g e mpletely redesignedclass. Its everythinyoneed ito be. Andore. Mercedesbenz. The best or thing. Coming up on the twominute mark before the bell rings. Courtney reagan joins me there at the new york Stock Exchange. Im going to look at a couple of weekly charts here. The dow after all was said and done virtually unchanged for the week. This is the time we were up half a percent for the week. This lack of volatility still with us here and for the week, also, when you consider the dollar rising a little bit, you had the price of oil down during that time. So that correlation held there. Right. Exactly. And then the price of oil went up today. Stocks started to go up today as the expectations for that september rate hike pushed maybe a little bit further into december despite what jeff lacquer says. I think the market thinks its not happening in september and off to december. But the financials actually really hung in there. Up 2 today and then creeping higher. They were weak, lower, makes sense and then gaining steam so i think the market is realizing it might happen still this year. If not september, then perhaps in december. We got to start getting ready for what that means and build in those expectations. And looking at the mid caps, too. Why . Yes, exactly. S p mid cap hit a new high today quietly. Very interesting. S p still about a percent give or take away from that. But the mid caps got there. So volatility is low and still going to be movement in some sectors. You just got to watch out for it even with low volume days. Thats true. It was a jobs day but a lot of people watching the russell 2000. They want to see the small caps and i guess by implication the mid caps confirm the gains seen in the major averages. Absolutely, absolutely. Theres money to be made and not a ton of volatility but look at bio tech, certainly still there and retail and consumer discretionary. Big winners and losing losers. Very good. Thank you. Have a good weekend. Thanks, bill. As you mentioned the air force ringing the closing bell here at the new york Stock Exchange. Looks like we have military personnel at the nasdaq, as well. Stay tuned now for the second hour of the closing bell. Have a good weekend, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. We have a rally on wall street today but the reasons, i dont know, might be kind of disappointing. Lets start with the dow finishing higher by 72 points. S p up 9 and the nasdaq up 22. Gains about. 4 pretty much across the board there and as you just heard, the mid caps pretty much trading at alltime highs. Hillary clinton announced a plan today to crack down on rapidly increasing drug prices if she is elected president. We will have toby kos grove of the Cleveland Clinic of the impact on the industries. Thats coming up here. Stay tuned for that. First, though, on todays panel, senior markets commentator mike santoli once again. Along with contributor evan newmark. Welcome. And david seeburg, as well. Mike, the reason i said maybe the reasons are disappointing is, you know, we were talking to grasso about this and the guests last hour and throughout the day and just kind of feels like that rally that happens on bad news, not on good news. Do you think thats right . It does have that feel in the sense of a very strong payroll number to set off a little bit of scramble that september was a live meeting than maybe it is and i think the jobs report and the 151,000 new i dont knows perfectly really not to change anybodys mind because looking at the bank stocks up, Charles Schwab up 1 . If we thought rate hikes wouldnt be happening, they wouldnt be moving that way. It was a this is pretty much what we expected likely a coin toss for december. No real hurry. Treasury yields just stuck right at that 1. 6 level. So i dont really think it was about bad news means the fed is on hold. It is just this is no real surprise. Evan . Its weird. I think the fed will move in september. Really . Yeah, i do. It is not you know, it is as mike said a coin toss. And it depends on where you were going in. I thought they should have raised six months ago. Not just Wishful Thinking . No, no. Based theyve on the side of dovish every time and kind in the camp if they err on being dovish again, i think its a credibility issue with them. But thats my take. Stanley fischer, here recently, too, heres somebody in january saying theres four rate hikes and taken every opportunity to reinforce that sense of the move, increase rates and not happening. It feels like maybe his credibility is on the line if they dont. I think whens interesting is the real lack of volatility. Two years ago in the end of august 2014, the s p 500 went above 2000. We have been plus or minus 10 for two straight years and unusual. Mikes much bet we are the stats on all that stuff than i am. Hes a baseball guy. It is unusual. Pretty unusual. Two months, two months basically the 10year yield hasnt budged. Thats also pretty unusual. Does it have you salivating, david . It is frustrating but does it feel like, you know, nothing lasts forever . Yeah. Absolutely feels like nothing lasts forever and financials, i dont think the financials were expecting or pricing in a hike in september. I think theyre looking forward and saying we do hope for a price out in december. December time frame. To be honest, kelly, we talked about this earlier on a different segment and the fact that goldman said the number just enough for a september hike, i look at that and say thats absurd. We cant have surprises in the market, especially given whats going on globally. The market cant walk in and be surprised that the feds going to move just like last december. We had roughly 80 expectation the fed to move on rates and they moved. I think you need a number closer to 80 expectations for them to move because otherwise the markets get spooked and cant take the risk of a dislocation. This is where im totally different from the traders mentality. I think just pointing out a fact. I understand but the Central Banks have put themselves in a situation where its a permanent crisis mindset so the financial markets, people like david, and really, people on wall street, theyre all highly sensitized to 25 basis points and im like the market cannot be nine years after, you know, the end of the world, if were still carrying on about 25 basis points crisis mindset is 80 billion of bonds a month. Thats a crisis. I think you have to get away from the absolute level of rates and now the economy is growing at the current level of rates. Whens the hurry to change it . I mean, thats what theyre dealing with. David . I agree, evan. 25 basis points is nothing. Probably not at 25 basis point economy currently. But i do think its about perception and totally about sentiment. This market is trading on sentiment and expectations. If you disappoint the market, if you disappoint what investors are expecting, youre going to have a selloff. Thats going to be a massive selloff given the positioning right now on the tape. Theres no way the fed moves. I promise you that in september. I think decembers when they take action. I would say, david, almost three weeks to get the markets perception to change in advance of what they might want to do and lets not say its over. Based on the information we have right now i would say theres no chance. If stan fischer gives an interview to kelly evans next week and says, ah, you know, one hand, on the other hand, we dont you know, all of a sudden the markets perception would change in a nanosecond. It doesnt take much because the market right now is reading the tea leaves on a minute by minute basis. Doesnt take much. We did raise the issue about whether the fed does matter that much. In a way the fact that, yes, we are talking about it and where it goes next and a lots been happening under the surface and the market. Health care trade not been predicated on whens happening with the fed. Although still a lot to do with the government. Basically, and to what evan pointed out before, a kind of static plateau level of the markets broadly speaking, money is not really leaving wholesale or coming in wholesale and moved around. The rest of the world sees u. S. Stock and bond markets as the main source of income and growth in the world. Thats not going to change with what the fed does. Amazing to look at the collapse of the oil and gas industry with prices there over 18 months and say, yeah, it is affecting the industrial production, there have been a ton of layoffs and the sector hit hard and the economy is still growing and amazed by that. By the way, you know, david can probably talk to specifics better than me but the Energy Sector since the lows in january or february has been very, very strong. I mean, in terms of, i dont know what the year to date on the xle is, but i know that the Vanguard Fund i have is kind of up plus or minus 30 to year probably from the lows of the year which is a big move in what had been a real beaten down sector. Thats the point. If you find a tactical opportunity in this market that has very lit toll do with a daytoday sense with the fact that the fed raises or lowers rates and theres a strong case for buying morgan stanley. Yeah. I think that actually is where a lot of the charact is coming around to which is the stock, the big banks cheap enough and the next move is up, no matter when it is, we dont really know, and they can kind of live with where we are right now and slowly get healthy again and grow. We are looking for executions of retailers and we have a big storm heading our way. Lets get you the latest on hermine. Morgan brennan is following the storm for us joining us with the latest of savannah, georgia. Morgan . Reporter hey, kelly, thats right. Here in savannah, hermine is about 30 miles past us on the way to charleston. You can see still effects and strong gusts of wind here. Still raining rather lightly. Biggest worry, still flooding further south in florida. Officials concerned about a second threat and thats the pools of standing water, their fear is to accelerate the spread of the zika virus. Throughout the region, we have schools and businesses closed, even the ports. Savannah closing last night, Fastest Growing port in the u. S. , handling 8 of container traffic. If you see storm damage at a port like that, that could be significant. The charles ston port complex where the storm is headed next also closed down. Oh, its tough to keep those shots up when the wind wind took her off. Trying to get morgan back and another piece of the story with the ports. And retail. Morgan, if youre with us, we are showing actually where the Tropical Storm is currently located. Reporter yes. So the storm is on its way to im not quite sure what you heard and didnt. The storm on the way the charleston. The port closed down at noon today. The ceo of that port complex saying a biggest challenge in storm like this is actually securing empty containers because if those arent secured they can become projectiles and heavy winds like this. In savannah, a number of travelers actually stranded here. At the Marriott Hotel here on the riverfront, theyre saying that they have seen 200 cancelations this weekend. And weve got a number of flight cancelations at savannah and that airport is still up and running. Never thought about empty containers as projectiles. Also, morgan, saying the retail port issue, extra complicated with the bankruptcy of the south korean company. What is happening there and hows that going to affect the companies . Reporter yes. So, this is roiling the Global Supply chain. We had hanjin filing abruptly for bankruptcy this week. Thats after on funding. Largest line in the world. According to citis chris weatherby. Responsible for 5 of container trade between asia and the americas. So over the past few days, what we have seen is ships of canada to china have been in limbo. Many sport ports, virginia and california refusing to offload containers of the ships or put cargo on them. The concerns is handling costs wont be recoups and not pay tugboat operators and the like but as jim newsome of the North Carolina Port Authority told me, what makes it particularly tricky is shipping lines share vessels. You could have containers of four or five different lines that are being held up on these ships in limbo outside of port and this is the reason its worrisome for retailers. Peak season when they start to stock up on the inventory levels and perhaps even larger of a concern here is whether this is a sign of more pain to come because we have got rock bottom shipping rates, overcapacity for many of the lines and slow Global Economic growth. This is a huge bankruptcy. Largest in this industry to date. We havent seen one like this since the 1980s. Guys . Wow. Morgan, thank you for weathering the storms to bring us all of that. Really appreciate it. Hor begmorgan brennan in savann. Theres still nowhere near where they were in 2007. Theyre not. The rates are not there but you know, we always get a lesson of retailers manage their inventory levels these days. Right . Just in time. Not that long ago. Just not a lot of cushion. Its an efficiency and then a complication. U. P. S. Says its going to raise i think its full surcharge, evan. Regardless. By 5 . So again, people have an option always of going between the longer lead time on the ships or having to switch quickly. The Global Market for shipping, not free market but it works the way markets are supposed to work. If one area becomes too expensive, its simply moves to another way, whether its u. P. S. Fedex, by air or truck. Costs more. Yeah. The more you press down, if you can put it on a ship, send it ten months, thats better than overnight. Consumers cannot complain of the goods. Off a boat. Over 20 years fallen in real terms. Dramatically. Totally. David, leave us with the best idea into the weekend. Look. We put a report out on this particular issue. We talked about the specialty retailers, the clothing companys that are going through a shift in their inventories like a gap stores. Abercrombie fitch. Theyre going to be kind of facing head winds on the port issue and the tjmaxxs of the world benefit because inventory builds could give them a chance to get product cheaper. Thats a winner and an abercrombie and a gap store, of course, theyre probably a little bit of a loser near term. All right. David, thank youing us. Thank you. Theres more on fast money talking about the vix, socalled fear gauge doing something that could spell trouble for stocks. You can find out why top of the hour. Now, Mylans Epipen price hike caused an uproar of consumers and even prompt eed Hillary Clinton to announce a plan. How will that plan impact doctors and hospitals . Cosgrove weighs in next. Believe it or not, americans are the best at following tax laws. But that could soon be changing. Those details are also still ahead. Hey, its been crazy with school being ck so were constantly going over our dataimit. Oh, well, now all of our new plans come with no data overages. W,o more overages . Oh, well, now all of our new plans come with no data overageso that means. Go on. Say it. Wll finale in control. D reack. Troding new at t plans with no data ovage charges. Welcome back. Hillary clinton today announcing a new drug price plan saying if elected shell appoint an Oversight Panel to protect consumers of life saving drugs and treatments. For more on space, lets bring in Toby Cosgrove of the Cleveland Clinic. Welcome to post 9. Thank you. This is a key plank to have a panel who would decide whether the price hikes are too much. Would that work . A question if it works or not. Theres a judgment and going at it for, first of all, a mayor change in producing the drug . Secondly, whens the trend . Whats the value of the drug. This is very difficult to determine and be a judgment call. What is your specific experience . Lets take the last five years with drug pricing. Hows that affected the Cleveland Clinic . Last year, very interesting, we had a 42 million unbudgeted increase in the pharmaceutical costs. And we had really tried to reduce our costs. We took about 10 million out of our cost in valaent drugs alone, increased our drug costs 11 million. Heart drugs and some of that . So, you know, for sodium and been around for 50 years. Right. They had a jump of almost 600 in the drugs, and youve seen that falling on what turing did with their and then now we have epipen. And that is going to increase what the costs of what they put together of 50 and now selling for 600 andsome. Big, big jump. Things like the epipen, recognizable treatment. Obviously people get galled by seeing this and seems like so many steps in the chain, parties to keep the costs down. Insurers in there. The idea is that theyre there kind of trying to beat up the Drug Companies on cost. Why does it not work that way is this tie problem is one manufacturer for most of the drug on patent. One manufacturer. Generic drugs like epipen have only got one manufacturer thats doing it so they can really call the price that they want to do and that is been passed on to everybody along the chain, particularly us who are the consumers of whatever it is. I have a question. Will this committee, you know, hows this different from what is supposed to be happening with obamacare right now . In terms of, the government is already so involved in the pharmaceutical industry, whether its the fda or other elements. How would yet another regulatory body help or harm the situation . Theres no regulation on prices right now. I mean, if lets take insurance prices. You have to go to the state Insurance Commission in order to get your price increase for the next year. Thes nothing like that in drugs. And so that they can go pretty much what the market will bear. But price controls are a serious prospect to raise. I think its very serious and thats the issue and really the question is are we looking at price controls or how will we manage this . Ultimately all of us pay for this and desperately trying to reduce the cost of health care to be affordable for everybody and were seeing a huge jump in pharmaceuticals and more on the way. One element of this proposal that came out of the clinton camp, of course, to maybe clear the way for competitor drugs and treatments. Exactly. I dont know if its as easy as an agency to loosen up the logjam. Thats a piece of it. I think there are things went after. First of all, they said we can levy fines and a tough area because its all in the eye of the beholder whether its gree jous or not. We have examples where it clearly was egregious. Drug prices going up about 10 a year. And so, the second one is they have the ability in this proposal to bring imports into the country from approved manufacturers outside of the country. And finally, you know, competition as you speak about increase the competition. How you encourage competition is only going to be smoothing the way through the fda. Thats something to do anyhow. People will turn around and look at the fda. If anything goes wrong with a trial or treatments or applications of new medicines and say, hey, why didnt you protect us . And hard to say to an agency to kind of be more lenient in some regard. Thats the issue with the fda, frankly. Theres no incentive for them to pass on anything. They get beaten up when something happens as you suggest. Hopefully ruling on drugs that are generic drugs and thats where were having the really difficult thing seen right now. And hopefully the fda will be able to move the competition through faster. We need to have improvements in the fda. Other proposal she puts throughout for all drugs to eliminate direct to consumer advertising. You know, were only two other countries in the world allow that and it does increase the consumption of drugs and increase the total price. Trying to put the tv industry out of business. I was about to say. Its over. Thats it. No more adult diapers. Its been fun, nobody. No more adult medications. You are in real trouble then. Thank you for joining us. Thats Toby Cosgrove of the Cleveland Clinic. While tax season is over for most americans, tax cheating may soon be on the rise and well lay out the reasons next. 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According to the irs, americans are actually among the most law abiding taxpayers in the world. But that could change very soon. The Washington Post has a new piece out saying please dont tell anyone but tax cheating is about to rise and outlines six reasons why and katherine joins us now. Whens it boil down to . As you mentioned, there are six key reasons. Several of them have to do with our actual funding for the irs. And several of them have to do with lots of other factors. So things like, funding for the irs is enforcement efforts is way down. The number of key enforcement personnel, you know, the people to do audits, down by like a quarter over the last five years so audit rates are down. Liens are down. Levies are down. Beyond all of that, in certain districts of the country, the local agents will even tell people, look, if you owe less than 1 million, we wont get to you because we dont have the resources. Wow. Customer service is worse also because of funding cuts and people who want to honestly pay their taxes comply, voluntarily, in many cases, you know, might throw up the hands saying i cant get through on the phone lines. Why should i bother . A reason that you guys sympathize, the tax code is more complicated every year. The u. S. Tax code is phenomenally complex for decades now and not a new thing. I think the most interesting reason that katherine gives is a thing of the gig economy and the reason why i believe the irs has doesnt go after the gig economy, which is selfemployed people, people do odd jobs for cash, people who may drive a uber or various, you know, nonuber or uberlike situations is will politically extraordinarily unpopular if you go after bartenders and waiters and waitresses because i think if you look at its not just about the unpopularity. Its also the voluntary compliance rates. So if you are a regular w2 employee, you have withholding, right . You have paper work that gets sent to the irs every year by your employer. 99 of your taxes on average paid honestly and voluntarily. If you have selfemployment income, you know, the irs doesnt have as much third Party Tracking to be able to tell whether youve paid. You dont have or in many cases people dont do withholding, the voluntary quarterly payments. So the cheating rates are actually much higher so its not just that the irs doesnt go after you. Its that they have less need to go after the people who are, you know, traditional employees than the self employed an its much harder to get the money out of them. Its a perpetual dream in Congress Going after waste and fraud. Its magical. On the spending side of the budget and not a Similar Energy to necessarily go out and maximize what the government is owed on the revenue side. Oh, thats absolutely true. And, you know, there are two pieces to that. One piece is that we have a lot of giveaways through the tax code which makes it legally easier to minimize our Tax Liability. Various loopholes and things like that. Very little political will to tighten that up which could help you, in fact, reduce statutory rates. Theres the tax evasion and avoid answer dont enforce enforcement efforts and cutting back and easier to get away with ripping off the government and leaving taxpayers the hold the bag. Katherine, you say its a funding issue. I read your piece a bit like the irs, you know, why do they take resources from the irs . My point, which i come back to, if there was if it was politically acceptable, they could very easily go out and make examples of people in the gig economy, they could do that. But they dont because politically the pushback would be so i dont think thats what it is. Its not the tremendous. It would be not the most efficient place to be end spending their money. The best place is auditing ginormous corporations that have armies of tax attorneys and accountants to make very, very aggressive tax Planning Decisions and where we are seeing the funding cut back. Theres a much bigger bang for the buck going after like a big corporation, you know, which maybe has a Tax Liability in the millions or could potentially have it in the millions or billions depending on the Company Rather than going after every single little bartender. Dribs and drabs of income or tax revenue to be getting. I think its less, you know, a sympathy issue and more, you know, where do you have the highest roi. This is one of those with an overtime segment into the break you would be hearing more. The odds that the irs is going to go up against exxon and win that in court, very low. Probably win against the bartender. They would. Katherine, thank you. Appreciate it. Thank you. Time now for a cnbc news update with sharon epperson. Heres whats happening at this hour. The fda banning more than a dozen chemicals used in antibacterial soaps saying the manufacturers failed to show theyre safe and kill germs. They must be off the market within a year. Brock turner walked out of the santa clara jail in california this morning after three months of a sixmonth sentence for sexually assaulting an unconscious woman. He was released under a California Law that gives inmates credit for time served. Penn state announced theyll honor joe paterno this month commemorating the 50th anniversary of the first game as head coach and sparked a backlash by people critical of paternos role in the Jerry Sandusky child sex abuse scan l scandal. Another patriots player forced to sit out the first four games of the nfl season. Defensive end confirming he testify positive for a banned substance. Ninkovich is also a team captain. Thiss the cnbc news update. Back to you. Team cap pain . Fantasy team or something . No. Im a big patriots guy. He used it to grow the beard. Sharon, thank you. Watch out james bond, move over jack bauer. Special agent rogers is here. She went through vigorous training and joins us next with what she learned when we come back. Ay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untrational, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs anprovidre contextualized products and services. S. Were creating new platforms across channels so custors can effortlessly invest, borr, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customs in return. Digital works for banking and Financial Services. Lets talk about how digital rks for your business. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more ean burning natural gas. My job . Job at exxonmil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Maki cars go further withess. Fueling the global economy. And you thought just made the gas. Energy lives here. Welcome back. We closed higher across the board on wall street. Dow up 72. S p up 9. Nasdaq up 22. Those are gains of about. 4 for everybody. Mid caps at an alltime high. Cnbc goes out to find where the jobs are and whos hiring . Kate rogers found a secret employer whos hiring but by no means a 9 00 to 5 00 desk jockey operation sh right, kate . Reporter absolutely not. A high driving Energy Career at the secret service. If you think you have the right stuff and the agency is looking to bring on 1,200 new employees through the end of 2017. Of course, now in 2016, more than 22,000 people applied for jobs in those two decisiivision. They put me through the wringer here at the james riley Training Center in maryland for two days to see if i had what it took. So what goes into secret Service Agent training . Police please help me. You learn how to handle emergencies. Police drop your weapon secret Service Trainees in challenges including virtual active shooter drills and remaining calm and collected is key. Thes expensive Firearms Instruction on the range. How do you think i did . Working on the site alignment and site picture a little bit. Reporter future agents go through intense hands on training. There i am pretending to be president obama working the rope line. Theres also controlled breaking and evasive driving training. Let off right here. Get back on. Minimize your input. Doing well. Very well. Reporter among the most important qualities, being physically fit. It is not for the faint of heart. I want stay at cnbc. So, kelly, as you can see, it was a lot of work and a ton of fun and i think its pretty safe to say im sticking with the reporting job here at cnbc. Back over to you. Why do you emphasize police instead of saying very specifically, Police Coming through. Reporter because if you say police, police, police, drop your weapon, it sounds like please drop your weapon. If god forbid in an active shooter situation, you need to announce who you are and make sure people understand you. They have you emphasize it. People asking me all day, do you just say that funny . You knew that . It is clear you were not a shooter active shooter situation or watch enough of law order. One or the other. I suspect your knowledge from not active this is interesting, too. And by the way, kate, what do they do they just assume that youre going to need people to kind of like, you know, leap to your protection in those situations or is there an amount of do you anything in the self defense . Reporter oh, when we were doing the control tactic situations . They were pretending i was a protectee and putting me in situations like president s or dignitaries walk a rope line or book signing and different threats to them, line somebody could pull a life or a gun or a selfie stick used to injure someone. They rescue you and basically get you out of there. I kept tripping on the mat. I was definitely not, you know, not a good protectee and med them work harder for it so thats good. You know, this is a place where theyre hiring and, kate, i wouldnt mess with you. Thats for sure. Reporter cool. I hope im coming back with more cred. Kate rogers in maryland for us, thank you so much, kate v. A great weekend. These days theres a market for just about everything. Should be no surprise theres a Stock Exchange or is it a Sock Exchange for sneakers. Coming up, the data and the deal making behind going long on footwear. We conclude the week long Mission Space series and a closer look at yesterdays spacex launch pad explosion and examine if the rockets and chemical engines we use now, too expensive, too inefficient and too slow for exploring deep space. Welcome back. That spacex rocket exploded on the launch pad yesterday. Luckily, no one was hurt but the rocket and the cargo load of a facebook satellite to be used to connect people in remote locations to the internet destroyed. Who pays for this loss . Eric is here with a look, actually. Eric . It turns out that going back 1 in 20 satellite launches of rocket launches and satellites explode. So about 5 . And theres a market for insurance, about 40 Insurance Companies like alliance, they will give up to 50 million in protection so in this case, for example, the rocket was worth about 60 million. The satellite was 285 million. And the problem is there are about 750 million in premiums each year to cover these explosions. So if you have two or three explosions of this magnitude, the whole industry is already in the red for the entire year. We saw it happen last year and halfway there this year and its a dicey business. It is not like insurance for home or auto or life where you have so much data that the actuaries can nail down. Heres how much money we expect. Theres just enough data points and so much margin chasing this people start giving you a better deal, better deal, better deal and then three explosions, the industry is toast. The entire value insured presumably . In this case, the satellite was but the launch this weekend and a different kind of insurance for prelaunch insurance. But the value of the business, what they would have had with the satellite up isnt insured. Just the value of the equipment. Why am i supposed to feel bad for the insurers . Its an interesting gig. Youre not supposed to feel bad there. Theres a dark world not talked about enough. Were increasing the pace of the launches, spacex was. They were trying to go from i think maybe six a year to now they were trying to do nine. Double digits almost. Really ramp it up. Its interesting the facebook satellite on the rocket for apparently a test launch of some kind. So, all of these questions it seems like to your point, not only not modelible but im surprised they offer it. 50 million limit usually. 300 million, you are looking at six Different Companies of the industry thats around 40 in size. You might have six Different Companies with that exposure. Not one companys dumb enough to say, sure, well give you 300 million. I wonder about the syndicate thing, too. Lloyds take on unique risk, it is not really the company, but the syndicate of investors involved with putting up that capital. Theyre getting them together. Exactly. You have that kind of back ward rational, right . So this is a veryd owe sin accura accuratic type of investment. Thats why they like it. Im sorry to cut you off. In other words, you diversify the portfolio even not priced that well for you. I love it. Heres with a way to reduce correlations and the like a timeshare pitch. Why dont you insure space launches. Fascinating. Get a free trip. To florida, yeah. Or mars. Thank you. Thank you. Staying with space, we conclude the special series Mission Space with the look of power of space flight to be serious, we need to use more than just rockets and aditi roy has a look at a Company Looking at developing the engines of the future. Aditi . Reporter thats right. Engineers call them the freight trains of space and ions are considered the future. Rockets are very fast and they do burn through fuel very quickly. Ion engines use electric propulsion, smaller and more efficient. Thats good for goods and not hauling people. Washingtonbased rocket dyne builds rockets and a leader of propulsion. The company says the new engine transform the way we equip Space Missions and not limited the taking only as much as they can carry when they lunch and ushering in a new era of space exploration. If you envision a time people are working in space, mining, theyre going between a future station and the surface of the moon, theyre actually, you know, doing different things, youll always need infrastructure and youll need support, equipment. These things can be barges that send equipment to places where the people are. Reporter ion engines are already used to move satellites in space and nasas goal is by the end of the decade ion engines tested to move cargo. They also researching Nuclear Engines and just this week, a rue more of an mdrive to go to mars in weeks and no one knows how it works. Make reference to this, this is an old hangar of airships and now owned by gooling. Back to you. Thank you. I love that. Moffitt field. Very recognizable. Aditi roy there. More than 5,000 sneakers, thats the database of stockx, a Sneaker Exchange to revolutionize the market and some people estimate half a billion dollars a year. Well kick it around, next. The industry for resale shoes is probably bigger than you might expect. According to npds annual market has grown to somewhere between 20 and 500 million and thats why one sneaker head has decided to start his own marketplace. Stock x is a stock market for shoes and other merchandise where birs and sellers can connect anonymously. Lets bring in josh, cofounder and ceo. Welcome, josh. Hi. Thanks for having me what makes this different from ebay . Its an actual stock market. Which means that we connect buyers and sellers in the same way a stock market does. Theres full transparency. On ebay, you can only see what things list for. On ebay, theres thousands of product pages. Stock x, one product page. On the Stock Exchange, if you want to buy apple stock, theres one ticker symbol. You guys also receive shoes, vet them and make sure theyre as advertised. Is that right . Right. A big part of stock x is awe then tisty. That the shoes are 100 real. As a commodity, people have to have 100 confidence that what theyre buying is what buying. If it ops ing, it seems you have to create an index. You have to be able to know what the trends are. In fact, the history of the company was the company, originally, a few years aerks i created what was essentially the kelly blue book for sneakers. Understanding the full transparency of what shoes sell for. How many are on the market, et cetera. So, thatst the foundation of stock x. Just like the actual stock market. You can see ever share thats ever traded, every share, price, dividend, split. That level of data is available on stock x for sneak ers how do you actually make money on this, josh . Why am i supposed to read this as something more than just basically a fad . Its a great idea and everything, but how do you get depth and liquidity and size to a market which really you know, how big really is it . The sneaker resale market in the u. S. Is is over a billion dollars alone. Globally close to 6 billion. Weve been studying this data for our four years. Today, ebay is about a third of that. Its an old model how people conduct business. To have transparency, the efficiency of a marketplace where everybody is in the same place at the same product. That creates the liquidity. And the more that come there, the more that use it, liquidity grows and the more efficient the market become. Thinking of all different analogies. You hear clearinghouse in some ways i like a physical delivery market. The its really interesting and i guess you guys also take a proportion of what these shoes are selling for. What are you plans to grow it and beyond smeekeneakers . You mentioned dan. Hes a quo founder in every sense of the word. The interesting part of this business is that he and i had the same idea about using the way a stock market connects birs and sellers to sell consumer goods chls we both zeroed in on stheekers as a good way to start because theyre essentially xhodtized and peel buy and sell and trade them. Any consumer dpood, anything thats not already a product like toilet paper or plastic water bottles, anything thats not a unique item, like a work of art or house, anything else, you can buy or sell using that constru construct. Buyers and seller ks go across the market price when they want. Other collectibles, watch, handbag, wine, you know, things that have a high resale value. Theyre the most logical next steps. I was going to ask are you committed to staying independent . No. I mean, this is a business. Well figure out the best way to grow and who to partner with and that could be anyone. Founder and ceo of stock x. Hard to see the income strings from that. Sneakers unlike a equities security. Gl depend ons what you to with them. I think youre a sneaker lover. Its like art. Like a collectible. Also dont have income streams, exactly. Up next, well take a look at apples big event next week. Theyll ring the in, bring in some new and get rid of some old. 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. Next wednesday will bring us the latest apple event. The iphone 7 is widely expected to be revealed, but what wont be is the phone on the left there. Its an iphone 7 pro and these are leaked photos that said there was going to be a shird model. 7 pro is on the left, plus is is in the middle and then just the 7. Apparently, plans have been scrapped for the pro which was to feature you can sort of tell, of these dual cameras which ive had to investigate with a thorough Google Search and reading of many tech plogs to understand what these thing rs and why theyre so different. Its interesting. The understanding is that the actual 7 is going to have a better camera, but yes, theres dual cameras maybe the sort of next step. Its a much more expensive version. A lot of people think too expensive for the market. So whether they were considering it, its interesting, but expectations are kind of tamped down. Were at the top of the s curve. Topping out terms of marichal improvements. You dont think they have a lot up their sleeve . I just think the whole industry, youre kind of pushing the limits you know, as the product gets better and better,s just how much functionality or additional functionality. I think theyre talking about batteries that dont catch fire. Actually packaging. In the cool apple boxes in some sneakers. Anything you want to leave us with . The thing im going to be looking for in september is really japan i expect some global stupidity to come out. My mom is going to yell at me for using that word. That does it for us. Have a great long weekend. Fast money starts now. Live from the Nasdaq Market site, im melissa lee. Your traders tonight on fast, dont look now, but the fear index is doing something its never done before and it could be the ultimate sell signal. Plus, shes back. Hillary clinton unveiling a new plan to keep drug prices low. Which Health Care Stocks could see the most pain and later, apple set to unveil a new smart phone, but could expectations be the too low . First, a familiar trade that might be getting hot. Stap