joining me now, heather hughes, quenton, and paul diedrich from fairfax global markets. good to see everybody. thanks very much for joining us. >> thanks, maria. >> let me kick it off with you, paul. thanks very much for being here on set. i want to ask you about this reversal today, down 170 at the worst. down 41 points at the close. were you surprised? what do you think's behind this? >> well, you know, obviously, it was the jobs numbers the that came up early on today. but, you know, we look at long-term trends, and every month, they revise these numbers and they're revised up. and that's been the trend. so i think investors really need to think, okay, we know these aren't the final numbers. look at the long-term trends in job growth. they're positive. >> so they ignore them. >> and i think that's what you saw at the end of the day. >> john, sitting on that trading desk of yours, watching the trend switch gears, from down to up late in the day, what were you thinking and tell me what was behind it? >> well, it wasn't that much of a surprise. earlier this morning, we saw the fact that caterpillar was able to hold a big, even though down. the second positive thing was the fact that the long was up three points. the ten-year was down to 368. so the miss this morning on the employment report gave us quantitative easing today in the sense that the bond market rallied so much, there was no other place to put your money, once again. you're going to buy tens at 168 or buy 30s at 2.8. that money is the now leading many to believe, myself included, that we're going to see another wave of refinancing. the spread between 30s and 10s and the mortgage rates has been about 100 basis points. right now we have the ten-year at 168. so if we put 100 basis points over that, mortgage rates really should be in the high 2s, so anywhere between 2.5 to 3%. so at the end of the day what we saw was everybody piling back on to the financials and home builders, as well. we saw financials, a lot to buy on the close. isn't that, at the end of the day, it's where are you going to put your money? it was today, it was this year, it was last year. i mean, this has been the story since october of 2012. heather? >> yeah, so, it's interesting, you brought up a good point. the key is focus going forward. will investors direct their attention to the macro economic data and jobs or will they choose, maybe even earnings next week to focus on cheap, easy money borrowing, supply by the fed, and that big leverage, or big valuation differential between stocks and bonds, as the preview guest alluded to. if so, the markets still could drift higher. >> well, i would imagine so, given what we've got going on with the federal reserve. that's really the point here. you don't really want to get in front of the fed. so in terms of allocating capital today, how would you do it? >> well, we're looking strongly at u.s. industrials, especially in what we call the ema energy, manufacturing, and agriculture sectors. and also, we strongly believe that every portfolio ought to have 5% to 10% in gold, especially gold mining stocks -- >> i would have lost my money if -- >> yes, but you've got to look at it as a hedge. today it did fine, or it was earlier today. it does, it's a hedge against all the things north korea, all the things you've been talking about daily. >> maria, i would like to jump in here real quick, if i can. >> yes, please? >> it's fascinating to me that we're seeing increased volatility, the market got bit up again from the lows today. but we're seeing now these shock waves and we're ultimately seeing the same thing play out that we've seen in the last three years. we've seen an incredible start to the year, the first three months, i come on the show, you know, everybody gets all bullish, exciting, and all of a sudden the market gives all of it back. and i think we're going to see, we're setting up for the same thing this year. and i think investors out there need to take a deep breath, take a step back, and what's wrong, what i always struggle with people, there's no other place to put your money. well, if the pattern repeats itself, the best place to be right now is to be building a cash position, so that later on in the summer, when we get oversold, which we will, you can then buy that dip. i think we've seen the same thing play out the last three years. it will happen this year. >> yeah, but with the federal reserve continuing this stimulus policy, let's say they don't end the stimulus policy anytime soon. >> well, i think they've already started to -- i thought it was fascinating yesterday that they started to hint against that. they started to hint that they might end it this summer, if the data was good. so you're right, maybe with today's data they don't end. it's just infinite quantitative easing. and in that case, you're right, we'll go up forever. but that isn't going to be the case. we'll see shock waves to this. >> john, jump in. >> the fact that japan, that was kind of a game changer, what they did. you know, the dollar/yen is already up to 97/70. the fact that they're going to increase the amount of liquidity in their system by twice as much is huge. also the fact that the ecb is also pedal to the metal. so you're fighting this wall of liquidity. so i don't think you can assume the last two years we had a swoon, we're going to have a swoon this year. the ned knows we've had a swoon. so everybody who thinks they're going to taper quickly, they're not going to taper quickly. and unless we get six months to nine months of 900,000 plus of job growth, they're not going to do anything. so at the moment, steady as she goes. we saw good action today in energy stocks, such as capitally owned gas, you said ultrapetroleum, neighbors. you're looking at stocks like exxonmobil and chevron that have $300 billion market caps, but yet the oil and gas revolution that's going on in the united states, some of the market caps on those stocks are 3 billion, 10 billion 20 billion. so where are you going to get alpha in your portfolio, you have to go to those stocks. we saw a big rally in those stocks. >> i'm just getting an e-mail here and hearing that the last time quarterly earnings growth came in under 1%, that was the second quarter of 2012 and that was growth just under 0.9%, the following quarter, the s&p 500 gained 8.9%. so go figure. it doesn't matter we're going to get 0.6% of growth in earnings for the first quarter, we're still looking at the fed to drive the momentum in the market. so why am i going to fight the fed? and i'm talking the u.s. and also talking japan? >> i also think caterpillar showed us that this morning, maria. >> that's right. and look at indicacat right now. it's come back. >> maria, we're in a very, very dangerous environment. and when the bank of japan comes out and they're talking currency war, as we're see right now, we could have shock waves. and again, you're right, you can't just fight the fed. but we've seen what happens in this market when they even ease off the pedal for just a few moments. the market gets crushed. and i think investors need to be aware of that and when the market's parabollic is a good time to be raising cash. >> i think when the fed is going to take the foot off the pedal, that's when i'm going to go with your recommendation. and that is to buy gold. i don't know why you would buy gold right here, knowing that they've already told us the 2053 is the date. >> i think the biggest surprise it's going to be is the fact that the fed is going to taper and the market is going to stream higher. everybody's expecting the market to go down when the fed tapers, and that's not going to happen. >> how about if the goes down and the fed hesitates. what happens when the market starts to slide and the fed is still printing? >> what do you think, paul? >> i think gold is going to go up at that point. it has to. we're seeing quantitative easing all over the world. this is going to happen. but there are other things out there. >> like what? >> like north korea, like iran. there's, you know, the possibility of some tsunami out there. >> what does that mean -- >> but you want to be in, i think, gold mining prurzs who are profitable -- >> gold mining producers did nothing as gold prices were going up. i just explained this to you. because for a long time, i watched gold go up and the gold companies do squat. >> they're at historic lows and people have been, i think, hurting gold, profitable gold mining companies because of the gold mining exploration companies, which have been having problems. i mean, if you're a long-term gold in buyer, gold buyer, these are the companies to buy right now. i mean, you're buying at capitulation prices. >> got to believe the value is there. >> good conversation. really appreciate the vibrancy and all your ideas. thanks, everybody, have a fantastic weekend, paul. it sure was a volatile dayton street today. so do bond investors have it right? if so, is that bad for stocks? bond versus stocks next. we'll take a look at rates along the way. then a report from the front lines in the battle over obama care. the ceo of the mayo clinic is with me today. he'll join me on how the new health care law will impact the medical history and the care that you receive. but first, the director of president obama's national economic council is up next. gene sperling, he is here with his take on today's surprising unemployment number and how the administration plans to handle it. that and a lot more coming up on "closing bell." stay with us #. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. welcome back. well, the jobs report for the month of march sending the yield on the ten-year to the lowest level of the year. did the bond market have it right all along? are the u.s. economies on the slow road back to recovery and is the great rotation out of bonds into stocks just about over. jeff cox over at cnbc headquarters, rick santelli at the merck. rick, you've been arguing this point for a while, that the economy has a long way to go. >> yeah, i think it does. i mean, let's consider the very simple facts, that we have a sequester that may be $45 billion on the economy in this fiscal year. we've spent trillions of dollars on stimulus, some would call it deficits. and for the last four years, there's been boatloads. and after all of that, we get a jobs number like this. and the discussions are still that something politically created like the sequester was never supposed to fall into place, because the democrats thought the republicans would cave on defense, and they made it messy, that something like that could actually derail a 15.5, $16 trillion economy. what that says to me in english is, our economy is a lot weaker than people think. and as far as interest rates being right or wrong, i think they're mostly right. but keep in mind, we forget something. that we have weak china, we have weak japan, we have weak europe. we have a fed that isn't only pushing stocks up by its programs, but it's buying treasuries and it owns a lot of treasuries. so in the little real movement we have in interest rates on a day like today, i think you could really see that interest rates haven't gone up, partially for all those reasons, because it's just too weak out there. and it isn't just the u.s. and we can't decouple, maria. we can't go it alone. >> and, of course, earnings coming out next week. i guess that's really going to dictate -- what's with all these bells, by the way? is that coming from the merck? >> that's why we have fair value in stocks. the s&p and the dow futures and options just closed now, and that's their closing bells. >> okay, thanks a lot. first quarter earnings expected to grow about half a percent or something, according to the s&p capital iq numbers. that's the first quarter that stocks locked in huge gains. what should we read into that? >> well, hwe're at record earnings. i know people find that hard to believe, but we are at 2012. we'll probably be at record earnings in 2013. so with that said, 8 or 9% games in the s&p 500 for the first quarter may have gotten ahead of themselves a little bit. most of the expectations for earnings gains are in the second half of the year. right now, we're expected to be up about 7% in earnings. that's a pretty good number. remember, maria, 2009, we were at the bottom. the stock market's up more than 100%. but corporate earnings are also up 100%. and i agree with rick, the bond and the stock market are both being distorted by the fed. but earnings have been rising. they have been up. >> what about you, jeff? how are you seeing -- what are you looking in terms of weighing into the difference here, what each market is telling us. >> i think when you look at it, i think the bond market has had it right in terms of the real economy. i think that the stock market has reacted to this sort of synthetic economy. and then the bond market and the stock market have reacted to the realities of the synthetic economy. just to kind of -- when you look at interest rates, you can't always just look at absolute value. i think you have to look at directionality and proportionality. the bond market has been signaling over the last couple of weeks that we are heading into an economic slowdown. i think that was borne out today. but when you look at the equity market action today, and maybe bob could elaborate on this a little bit more, it really didn't make a lot of sense. a huge sell-off at the beginning. and what was with the transports? i have no idea. i don't know how to explain that trade today. >> a heavy sell-off, and going back, mean reversion, going back closer to where the rest of the market has been. >> i love what happened with the transports today. i mean, i just think, once again -- >> how do you explain it, though? >> we were all worried about what was going on with the transports, the fact that they were diverging from the industrials and then they come right back in. how do you explain it? obviously, there are buyers in there looking for value and buying on the dip. >> you have reversion to mean. the transports have dramatically underperformed the for the last several weeks and you get them coming back. but jeff, let's go back to the point here. rick and i both agree, everybody agrees that the fed's distorting the bond market and the stock market, isn't the fed artificially keeping yields too low as well? if there was no qe2 or qe3, rick or jeff, where would the yields be on the ten-year right now? >> i have a hard -- i don't think that they would be dramatically higher, because, they would certainly be somewhat higher, but i think you would still be below the historical average. just because we are in this incredibly slow growth environment and we probably would be in a much slower growth environment without what's happening with qe. but, i mean, i just think, lake i said, you have to look at the direction of it. in terms of, you know, it's sort of a counterfactual argument, you know, where would yields be. but i just don't think -- >> rick, where would yields be without qe2 or 3? >> i think they would be about 150 basis points higher in the ten-year. >> given the economic data, you've got to believe they would be much higher than they are right now. >> so so on the stock market, rick, we debate this all the time down here, i would say on average, most traders feel, without qe2 or qe3, the dow would be 10,000 points lower. that >> but let's talk reality, gentleman. we are where we are. the fed is inducing a stock market rally. so, does it make it any different for me to make money in this market? >> no. >> yes. >> okay, so it's -- >> qualitatively, yes. >> now what? >> i said yes because there's a difference between realized and unrealized profits. we talked about this yesterday, maria. if it doesn't end well, unless you have taken the game and pulled your money out, when the fed subsidy ends and the market doesn't like it and it sells off, i just don't think everybody's going to be able to pull out the value that you see now that they have an unrealized paper. >> let me see this, maria. i agree with the other point you keep making about don't fight the fed, but i think you can hedge the fed. and i think any smart investor right now is hedging the fed. the fact of the matter is, we don't know how this ends, where it ends, when it ends. presumably some of the bid in the market today came from the fact that qe eternity is solidified from here. the fed's got nowhere to go. i think they could move the goalpost from that 6.5% unemployment target if the participation rate keeps going down, because it's obviously distorting this so-called drop we had in the unemployment rate. it makes it very complicated. i think the smart investor, one of your guests in the last segment said, build up some cash here and wait for a better entry point. >> we'll leave it there. thanks, gentleman, very much. we'll keep watching this story. up next, the thought of implementing obama care has some companies getting sick, but the mayo company may have the treatment to cure the ills the mayo clinic ceo is with me next. and later in the program, gene sperling, president obama's top economic man will join me to talk about the president's budget. it's expected next week. another tax hike could be in the offing. don't go anywhere. back in a moment. oh, he's a fighter alright. since aflac is helping with his expenses while he can't work, he can focus on his recovery. he doesn't have to worry so much about his mortgage, groceries, or even gas bills. kick! kick... feel it! feel it! feel it! nice work! ♪ you got it! you got it! yes! aflac's gonna help take care of his expenses. and us...we're gonna get him back in fighting shape. ♪ [ male announcer ] see what's happening behind the scenes at ducktherapy.com. 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(announcer) scottrade. voted "best investment services company." welcome back. hospitals around the country are trying to grapple with the upcoming changes due to the obama care. one hospital is the mayo clinic. the president touting the hospital as a model to replicate across the country. joining me right now to talk about that is the boss, ceo john no noseworthy. good to have you on the program, mr. noseworthy. >> thank you very much. >> so what are you doing at mayo that's so different from other hospitals? tell us about your strategy. >> what we're seeing in america right now is a move to consolidation of health care associations, hospitals, large medical groups. a lot of merger and acquisitions. mayo clinic believes that the key to outstanding health care is integrative care around the patient, doctors and nurses working together. so instead of consolidating, we're following an integration strategy, where we take great hospitals that want to get better and believe they can integrate their care better if they have mayo clinic knowledge driving their system. so we've built and still building the mayo clinic care network, which is a non-owned affiliate of integrated services. >> all right, so, you're partnering up with various hospitals and other institutions to ensure that that mayo way of doing it is spread out. let me ask you about what you just mentioned. that is consolidation. do you think that hospitals continue to consolidate? what is the issue behind all this m&a that we've seen in your area? >> well, a lot of it is being large enough that you can be competitive in the post-aca world. and driving up enough high-revenue services that will keep the hospital profitable. we don't believe that's the strategy that's best for patients. >> in terms of the expense side of the business, we've seen a large number of challenges to obama care. now, you've said that the new health care law is a good start. but where is that new law going and where is it lacking in your view? have you seen the bite in terms of this expense that a lot of other companies and ceos come on this program and say that it is a big pressure? >> well, it will be, unquestionably, there'll be a lot of downward pressure on revenues and health care. we see that company. the first step was to get americans insured. and we believe that's a good thing. there's no more money in the system, however, to cover that. so there's a great drive to efficiency, better outcome, at lower cost. and also looking at health care payment reform, that recognizes that health care is a spectrum of complexity and the health care payments should recognize that. and similarly, all health care is not the same. some groups are very high quality at low cost, others are just the reverse. and we believe that the next step is to get meaningful health care reform that drives better outcomes at lower costs and that could start with fixing the sgr. >> so, where does that -- how does that change, then? what would you like to see in terms of better outcomes? how does that happen? >> well, as we've talked once before, we've put together a strategic research alliance with united health group, the largest insurance company, through their optum subsidiary. mayo clinic outcomes, 5,000 lives in a database, and 109 million lives from the claims data over 20 years in the insurance industry, and then link those together in a way that protects patient anonymity, but determines what works in health care, how do you get great outcomes, and what's the cost of that. and then use that as a competitor market place, bring in others, other academic medical practices, research universities, policy makers, device makers, big pharma, other insurers to put their data in this database. and then innovate the system and offer rewards and incentives, if you will, for those that can do the best work. better outcomes and lower costs. this is a big difference in health care to have this. >> and, of course, the innovation is a big difference. technology enabling so much. now, for a long time, well, i guess maybe it's at least 20 years now, in terms of the medical device industry, and really the innovation that that brought in terms of helping so many, do you -- are you seeing any impacts from the tax on the medical device part of health care because of the health care legislation? how does that play out? >> well, i think that plays out more for the device companies than it does for us. but if you look at a total cost of care and reimbursement, it obviously plays into that equation. it's another variable in this very volatile and uncertain time. but, essentially, what we're asking for in the post-aca era is to recognize the spectrum of care, it's not just primary and preventative services, but it's also procedural care, complex diagnosis, and if you will, cutting edge care. and we all need to work together to get the quality better and get the costs down. and we can do that with data, and then create that competitive marketplace. that's where we think we ought to go. >> and you say the post-aca era, meaning the affordable care act, obviously, and what happens after the affordable care act is implemented. we got the jobs numbers out today, john. they were underwhelming. are you hiring at mayo and is technology enabling some of that, real quick, as we wrap up here, are you hiring? >> sure. we are hiring, but very strategically, maria. with all the uncertainty, we're basically saying, let's just hire those key professionals that will drive better outcomes and lower costs and improve our research to do that. so, very strategic hiring in the short-term until we see where this ends. >> all right. we'll leave it there. john noseworthy, always nice to have you on the program. we so appreciate your time tonight. >> thank you very much. >> we'll see you soon. in light of lackluster job creation today, a tax increase seems like the last thing the economy needs, but it may be coming in, in the president's budget. which is coming next week. gene sperling, the white house's top economic man, will be here, explaining how it's possible and give us a preview of that budget. and later, which earnings could spark huge stock moves in the week ahead. stay with "closing bell." we're back in a moment. is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com [ laughter ] ♪ [ female announcer ] each one of us is our own boss. and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ welcome back. well, brace yourselves. president obama's budget is due out next week, and it may very well include tax increases, as well as spending cuts and entitlement reform. let's go live to john harwood at the white house for a bit of a preview. over to you, john. >> maria, we know the administration is coming out with a budget next week that does include, yes, some tax increases, also some spending cuts, and the so-called chained cpi reduction in social security benefits, some increase in cost to upper income medicare beneficiaries as well. it's getting attacked from the left and from the right, which is a sign, listen to jay carney, the press secretary, that they're doing exactly what you need to do to get a job done. here's jay carney. >> it is not the ideal proposal, but the president recognizes, unlike, i guess, republicans, that we're not in the business in washington of getting everything that we want. that does not happen. negotiation and compromise requires a willingness to accept less than 100% of what you want. >> the question, maria, is whether or not this proposal coming after the house and senate have both passed partisan proposals for the democratic and republican perspectives is the question over the next couple of months, but there's some interesting biplay on the issue of taxes in this chained cpi. today, the house speaker's office criticized the administration, said they don't deserve so much credit for this chained cpi proposal, because it also raises taxes because of the effect on tax brackets. that's interesting, because they support that position, and in effect, they're saying they do support some tax increases. >> john, thank you so much. we'll be waiting for that next week. john harwood. of course, president obama likely facing another budget battle when he delivers his fiscal plan to congress and that is happening on wednesday. his proposal would include cuts on spending on social security and medicare, which both sides of the aisle agree are necessary. but also, an increase in taxes, which senior house republican leaderships are already balking at. in the wake of today's poor jobs report, that is just 88,000 new jobs created to private and public payrolls in the month of march. one has to wonder what a new tax could do to the economy. of course, the country's jobless rate still edged down to 7.6%. that's down from 7.7%. but that is because people stopped looking for jobs. let's bring in gene sperling. he is the director of the national economic council and a friend of the "closing bell." gene, good to see you again. thanks so much for joining us. >> thanks for having me. >> give us your headline on that budget, whatever you can tell us, in terms of the headlines from what we might expect next week from the president. >> the headline is that this president, in an effort to strengthen the economy, strengthen middle class jobs, and strengthen our long-term fiscal position issing the will keep out on the table his compromise offer to speaker boehner, which would do a sensible $1.8 trillion in deficit reduction. and what that would mean is that our debt would be declining as a percentage of our economy. we could see the deficit going under 2%, as percentage of our economy. and it will be done in the right way. not with these harsh sequester cuts, which i think speaker boehner once called devastating. but, instead, sensible entitlement savings, revenues that come from tax reform, that lower tax expenditures and loopholes. i think this is the type of balanced approach. it's not easy. it requires compromise by everyone. but i think it's the type of balance that we need, if not exactly the details we have, this is the type of plan that ultimately we need for a bipartisan compromise. >> and we sort of heard that from mr. carney earlier, as well. let me ask you this, gene. does it include tax increases? >> you know, what the president has in his budget is he'll have tax reforms the that will raise about $580 billion in revenues, together with over $1.2 trillion in spending cuts, including spending in interest savings. so that's what it has. but the reason why we are hopeful that this might be capable of more bipartisan support is that there's no, there's no rate increases that we're asking for. we're basically saying, we can work in the way that speaker boehner and the republicans wanted us to do last fall, which is to have tax reform, that as part of that tax reform, will close enough loopholes and tax expenditures that we can supply some or all of those savings to reducing the deficit. >> all right. well, that sounds reasonable. i mean, no tax increases, but you're talking, really, about doing away with some loopholes. it might be a tax increase for some people who are sort of counting on that tax loophole, but at the end of the day, you're not going to change rates, you're not going to change tax rates? >> no, i think that was the big controversy and rates did go up, for those over $450,000. for a couple over $450,000, a single over $400,000. but i think we agree now that at this point, we can raise the rest, through tax reform, that in one way or another, goes after deductions and tax expenditures. the president, in his burgt, which we released on wednesday, would give his specific ways of doing that. but, obviously, there's other ways that we can work together, to have that type of tax reform, that has savings that lower the deficit, that meets the president's fairness and progressivity goals and are part of an overall package, which will have significantly more in spending cuts and entitlement savings. >> that sounds good. like baby steps, the two sides coming together. let me get your take on the jobs report today, gene. obviously, a lot of people were disappointed, wanted a lot more job creation than we saw, 88,000 for the month of march. what happened? >> obviously, we would like to see stronger numbers. i think related to our budget discussion, though, it's an important reminder. which is, we're not just coming back from any recession, we're coming back from the worst recession we've had in a long time. we need a stronger recovery and we should be doing everything we can to tear down the barriers that could keep us from expanding and growing as strongly as we should. so one of the things we should be doing is, you know, not having a sequester that people think will cost hundreds of thousands of jobs, not allowing this uncertainty about manufactured crisis to take away the confidence of a lot of job creators for making long-term investments. so, if we can do a smart fiscal plan, one that still invests in infrastructure and skills of our workers, but deals with long-term savings and entitlements and tax reform, i actually think we can take away some of those barriers, take away the self-inflicted wounds and i think there would be a very positive confidence response if they could see us working together to get something like that done. >> i agree with you. in terms of that skills gap, you think that's a big problem. a lot of people come on this program and they just can't find the people that they need with the skills they need required to do the job at hand. >> you keep bringing up the sequester. is there a shot we could reverse it? it's done, right? that's in the rearview mirror mirror? or is there a chance you could actually reverse that and stop the cuts? >> remember, this was a sequester that nobody thought should go into effect. the speaker of the house, himself, said it would be devastating. i think every day you see, you know, civilian military workers, most of them, half of veterans, taking pay cuts. you see children, you know, not being able to finish their head start programs. i can't imagine there's many people on either side of the aisle who think this was the right way to do deficit reduction. >> but is there anything we can do about it, gene? anything we can do to fix that, reverse it? that's what i'm asking. i know everybody hates it. it was the wrong -- it's not the way you want to conduct business, we know that. >> maria, i think the answer is, i think we should. i think there are sensible people on both sides who would like to. it's not, you know, i'll be honest and say if our republican colleagues in the house of representatives are not willing to make any compromise with us, then maybe we can't, but i think there aresore people we talked to on both sides of the aisle who understand there's a better, more sensible way for us to bring down our deficit. and i think we should all hope that we can move in that direction. >> gene, what kind of a year are you looking for in terms of growth? have we ever got a real focus on growth for this economy? get back to growth? what kind of a year are you expecting? >> you know, this is exactly why, going back to the sequester, i think that we do need to reduce a lot of the uncertainty, you know, independent economists think the sequester isn't going to destroy this recovery, but they think it could take a half percent of growth off. they believe it could take 500,,000, 700,000 jobs off. why would we have this type of self-inflicted wound? i think more certainty in the housing market, more steps provided for more security, more srnt in the housing sector, and at the same time, if we could have this budget agreement, i think you could have some positive momentum. i'm an optimist. i always believe if we did these things that were right, we could be over 3% growth. if we keep loading up and put more bricks on this economy with the sequester, with this manufactured budget crises, just simply because we can't compromise and work together, we just weigh down the possibilities and we may keep growing and still creating jobs, but nobody should be happy until we're growing at a much stronger level is and we're starting to get more highers, see more long-term unemployed americans finding work. that's the kind of recovery we need. i just hope that there's enough of what the president calls the common sense caucus to help make that happen. >> yeah, i just, if we had a tough jobs number this month, imagine when the sequester starts having an impact. things are going to get worse then. >> you know, for me, even if we have a good jobs number, we'll all know it would have been better if weapon didn't ha didn it would be better if we had less uncertainty. one of the nice parts of my jobs, i get to talk to ceos of major companies quite a bit. and they all say so much of the same thing, which is that they see momentum in the economy, but the uncertainty, something comes out here, gets in the way, and i think we all have it in our interests to take away that uncertainty. and it really just takes compromise and us working together. i think that's what the public wants. i think that's what a lot of the major job creators in our community want. >> no doubt about it. gene, always nice to have you on the program. really appreciate your time tonight. see you soon. have a nice weekend, gene sperling joining us from the white house. the earnings parade about to begin. corporate america starts unleashing the results on monday. find out which three stocks could move big-time, coming up. can't afford to miss that, right? next up, the fed forever, yeah, right. the debate on whether the federal reserve's near-zero interest rate policy is doing nor bad than good. two combatants step into the ring for fight, just ahead. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ to enjoy all of these years. but i wondered what a i tcustomer thought? is great, hi nia... nice to meet you nia, i'm mike. what do you drive? i have a ford explorer, i love my car. and you're treating it well? yes i am. there are a lot of places you could take your explorer for service, why do you bring it back to the ford dealership? they specifically work on fords. it seems to me like the best care. and it's equal or less money, so it's a value for me. get a free brake inspection and brake pads installed for just 49.95 after rebates when you use the ford service credit card. who doesn't enjoy value? welcome back. stocks selling off right from the beginning today, after a weak jobs report. we closed well off of the only 88,000 new jobs were created in the month of march, well below analysts expectation. the unemployment rate did fall to 7.6%. that was down from last month, however, it wasn't because people found jobs. it was more so people actually stopped looking and were no longer counted, because they were frustrated they couldn't find a job. so does this bad news mean the fed will be forever stimulating the economy? we're putting t ing thting the diana furscotch and is now senior fellow at the manhattan institute, betsey stevenson, served in the obama administration, and is now professor of public policy at the university of michigan. ladies, good to have you on the program. thanks for joining us. >> great to be with you. >> great to be here. >> diana, you call this jobs report a wake-up call, that you are making an indictments of defense policy oar what? wake-up call, what do you mean by that? >> it's a wake-up call, because here the fed has been at zero interest rates for years. clearly, it cannot do more to stimulate the economy. it's already said it's going to be at zero until 2016. we need to be looking the at what is making america a left business friendly environment, regulations, obama care, the threat of tax hikes that gene sperling was just talking about a few moments ago. we need to have, keep low-tax environment and less regulation. >> betsey, what do you think? >> well, i think, actually, the recovery has been progressing. so some of what the fed's doing has been working. if you look over the previous three months, we had growth that averaged over 200,000 jobs a month. so, obviously, we'd like to see growth increasing going a bit faster, but i think if you look at today's 88,000, it's wrongheaded to blame that on the fed. i think there's a clear place to blame it, and that's congress with the sequester. the fed is doing what it can and what it should do to balance its dual mandate of employment and inflation. >> but the fed is sort of alone out there, right? the fed seems like it's bailing out policymakers. and that includes the president and congress. >> it is. but the 88,000 number is going to get revised upwards. the important number is that 500,000 people, a quarter of a million people, dropped out of the labor force last month. the labor force participation rate for 20 to 24-year-olds went down by 0.6 of a percentage point. this is serious. this is a real crisis. the 88,000, it's going to be revised next month, the month after, the previous month's job gains were revised up. but the important thing is that even as the recovery so-called increases, the recovery is not, in fact, getting better. more people are dropping out of the labor force. >> maria, that's just not right. if you take a look -- >> that's what the data showed today. >> if you take a look at the household survey and take a look at the employment survey, over time, they tell the same story. the household survey shows job growth. the big increases in the number of people who are employed, that matches the type of job growth we've seen in the employment survey. so if diana thinks that employment growth was even better than the 88,000 last month, that's great to hear. she might beright, she might not. but what i do know is that over the long run, the employment survey and the household survey will tell us the same thing. why we see differences in a particular month like this month, with 500,000 people dropping out, no new jobs in the household survey, in fact, a loss of jobs in the household saf survey is because they're two different surveys taking two different snapshots of the economy and they're both prone to some error. >> we now have the same labor force participation rate we did in 1979. for 20 to 24-year-olds, it's the same labor force performance rate as 1992. >> and those declines started in the early 2000 continued through to 2007, so, by the time the recession started, you're right, we had 4 million fewer workers in the economy than if we had not had the big declines in labor force participation in the early 2000s. i think there's some long run trends in labor force participation and that's something we need to address. >> ladies, this is the conversation that we really need to be having in terms of where the economy goes and we hope you'll come back. appreciate your time tonight. see you soon. we waare going to reveal the stocks you need to keep a close eye on ahead of the earnings season that kicks off on monday. ♪ ♪ no two people have the same financial goals. pnc works with you to understand yours and help plan for your retirement. visit a branch or call now for your personal retirement review. are you red guy for some earnings? next week, we'll find out how corporate america did in the first quarters. which stocks should you buy? let's get into the action with brian stutland. you expect to see some big mo r movers next week? >> it starts to heat up here down on the floor. we are earnings season coming on next week. alcoa, bed bath & beyond. options trader are looking for a 3% move or so for both these names. jp morgan, a big bank name. what i find interesting, though, about all of these names is, you get sizable moves. bed bath & beyond can move 7% up or down typically. now, not as much nervousness on the floor here. people not predicting quite the sizable moves. gives me more confidence that the earning season is going to turn out well. we don't see traders down here getting real nervous. jp mo beg pmorgan is one of tho here where you can start to play it. 30% comes from investment banking and the trading side of things. they are going to get good numbers out of that, given the first quarter move in the market here. so, i think, you know, jpmorgan does pretty well. untdz performing bank of america, wells fargo, so, i'd be looking at them, playing that one, short-term pop. but all the stocks have had a huge run in the market. if we get any upward move after earnings, i start to look to take profits after that point. >> all right, we'll watch that. thank you so much. see you tonight. thanks, brian. make sure to catch "options action" coming up at 5:30 p.m. eastern tonight on cnbc. tuesday in monday to "the closing bell" when i talk with claus klein felt, his company kicks off the earnings, this quarter, as always. and we're going to talk to him before he gets on the phone with analysts to find out what drove the quarter and what he is expecting to be the return to growth. we'll talk alcoa with him. stay with us. my thoughts on the market and leadership when we come back. ♪ [ cows moo ] [ sizzling ] more rain... 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[ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. call... to switch, and you could save hundreds. liberty mutual insurance -- responsibility. what's your policy? welcnew york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com welcome back. and finally today, my observation on market leadership and what it is telling us now. so, where has the leadership been in this market? well, that has been hitting all-time highs even with today's modest declines, the industrials have led this market, no doubt about it. the dow jones industrial average up year to date, as you can see there. financials, as measured by the xlf, also a leadership group. take a look at that chart year to date. and media and entertainment doing very well this year. comcast, parent company of cnbc, up year to date as is disney. so, two of the real leaderships within a group that has been certainly in the forefront of investor interest. the media and entertainment. the weak spots, machinery, commodities, transports, all underperforming this year. pretty tough move on many of these groups, now, the transports, as you can see, are up year to date, but they have been trailing down over the last couple of weeks or so. what do these moves mean and where do we head next ahead of earnings next week amid expectations of earnings growth through the s&p 500 of just .6%. of course, the collapse of materials and commodities related groups, most likely has more to do with the slowing global story than just in the united states. technicians tell me that the momentum is here, in this group on the down side and it will likely stay on the down side. they're telling me to avoid it. as far as the winners, momentum is with the media and financials, as well. the financials saw a good bounce today. there's some interest in banks and brokers, though there's still worry that there