Transcripts For CNBC Closing Bell With Maria Bartiromo 20130715

Another 13year high. And the s p 500 index closing in unchartered territory with a gain of just two points, but a new record of 1,682. The blue chips close at an alltime high for a thirdconsecutive session. Lets get to bob and talk about whats moving the markets. The important thing is, the data was very choppy. Retail sales a real disappointment, although Retail Stocks werent down that much. June was a disappointment, i mean, on retail sales. The china gdp came in where the government said it would. 7. 5 . That was a blip, particularly to the emerging markets. The major indices today. Youll notice something unusual. Utilities are leading, and i think most people agree that thats because of the heat wave that weve been having. Put up some of the utility stocks, con ed said they were prepared for the possibility there could be Power Outages in new york city. So con ed, for example, put up some of the utility stocks, all are moving to the upside. Most of the utilities are up 1 , 2 . China announcing a fivefold increase in solar capacity. What do you think thats going to do to solar stocks considering theyre the bigge biggest moving in 100 ranges every few months. Its startling. You see a lot of them are simply 2 stocks essentially. Economically sensitive cyclical stocks did fairly well today. Citigroup, for example, beat earnings. And now wells fargo. We have jpmorgan and citigroup. And no selling on the Earnings Announcement for the banks yet. Thats unusual. Weve seen that often in the past. Certainly a very good sign for Bank Earnings so far. China gdp exactly where they wanted it to be, so a lot of the emerging market etfs were on the upside. The one sector, you see 2 , 3 gains there. The one sector down, housing stocks. Not a lot of news here. Had a nice runup last week. You can see notable weakness here today. Maria, back to you. Bob, thank you very much. Bob pisani. What should you make of this market . Rebecca patterson is with me. Art of oppenheimer funds, and michael of Capital Innovations and our own rick santelli. Good to see everybody. Thank you for joining us. Michael, let me kick this off with you in terms of clients today. Are they putting new money into this market, or are they getting worried about valuations at this point . Absolutely. I think when you look at the outset, people are checking their inputs, theyre looking at risk, at volatility and saying, from an absolute and relative valuation, developed markets look cheap. Emerging markets look exceptionally cheap. When you look at some of the sectors, performance today, things like wireless, telecommunication, utilities, theyve started to hit an inflection point. Theyve hit the june bounce and now seeing a july risk on do you worry some of the emerging markets, their Growth Numbers have really come down . I agree with you, longterm this is where the growth in the world will likely come from. But, i mean, look at the outflows weve seen in emerging markets because of the growth slowing. Absolutely. The emerging markets, as a play, structurally, long term, theyre a safe place to be, because you look at the growth. You look at the gdp, population demograph demographics, you have to feed the people, house them, and create the energy. One of the gentlemen earlier touched upon a very important fact. Energy, when you look at energy and how critical it is to civilization, you see these growing population demographics. You can bet directionally on the price of research in motion or yahoo . But when you look at food, fuel, and forests, in other words betting on whether someone will eat today and when you look at a population trend like that, Something Like that is amazingly powerful. When something decelerates, commodities get beat up, this is growth on sale. Yeah. No, i think you make a good point. Rebecca, are you surprised were at another record high for this market . I mean, volume is was low today. You know, summer monday. Not a surprise. But does that bother you that weve got very low volume and a time when the markets going up . Youd rather see, you know, higher volume in that regard . Obviously, more volume suggests more people are feeling good about getting involved. But i think were in for a choppy summer given this transition. Every investor has to get their head around with the fed. But longer term, if we look ahead to the fall, the winter, next year, i think the equity market will keep resolving higher. The fed is going to be gradual. Growth is going to be improving. Im overweight equities, and i dont see any reason to change that right now. I would like to jump in real quick on emerging markets, though. I do think theyre incredibly attractively valued. But i think some of the headwinds for emerging markets suggests you want to be very careful treading in that space right now. Stronger dollar, lower commodity prices, higher u. S. Yields, those are things that arent going to go away very soon for emerging Market Equities. Yeah, i think its a great point to make, rebecca. One of the points i made last week, and i made my observation about emerging markets, for a long time we were talking about growth levels and not putting into the models the cost of security. The cost of, you know, kidnappings in brazil, or the drug trade in mexico. Yes, these markets are hot and they are growing. But there is a cost to some of the things that for a long time investors were not even valuing. Absolutely. And i think we also have to get used to the fact that a lot of the tailwinds for growth in emerging markets over the last decade are going away. The productivity gains that came in china are going away. The reformled growth that russia experienced in the last ten years is baked in. Were getting more mature emerging markets. Were going to have a slower pace of growth, and markets and investors have to get used to that. Im not quite sure theyre totally there yet. Rick santelli, jump in here. Because even on the credit side of thing, people have been trying to capitalize on some of the growth seen in the emerging markets, and that was a popular trade, although things have reversed given the growth rates in emerging markets. Yeah, and i think in your observation, you said you brought up variables that were not priced in. Ill throw in another one of those variables. In my opinion, the Central Banks of the u. S. , japan, and europe are a variable. Because many of the emerging markets have to deal with these waves of liquidity that come and go, whether tapers on or off, whether the japanese are going to get bette bigger or continue with the abenomics, and these are huge factors where in a world, where the investments are put in into place because of a menu of alternatives. It makes many of the emerging markets very digital. Either theres too much liquidity. Everybodys kneedeep in treasuries, dont want that. So they all go into equities or try to look at that new frontier of emerging markets. But if central bankers change their minds, its the path we get to the future. The demographics are going to work in your favor. Like all equity positions in total. But its the path you get there and how many march of 09s we have to go through along the way. Hmm, thats a good point. Are your clients right now at oppenheimer talk to us about what youre seeing in the mar t market, in terms of risk averacity. Do they want to be money in the emerging markets . Are they more comfortable in the u. S. . They want to put money in the emerging markets. We wont let them. We closed the fund because the flows are incredible. Its not about countries. Its about companies. So when you look at the emerging market indices, theyve been underperforming the s p since the middle of 2010. They have not been a good investment in the aggregate. But theyre heavily weighted towards materials, commodities and the like. If youre looking at companies that are going after the emerging middleclass consumer in these countries, whether or not those companies are domiciled in emerging markets or in the United States, you had handsome returns. What about the u. S. Market . What are you hearing from clients on the u. S. Market . The debate has been centered around the Federal Reserve. Sure. Do you want to be buying this market here . Absolutely. I mean, people are skittish, but now weve transitioned to one of the bad news is good news things. We had a stinko retail sales number. Normally, that would not be good for the market. To the extent it makes people think the fed will delay tapering and pullback, then thats giving another lift to the markets. But valuations are not stretched. No, theyre not stretched. Would you agree with that, michael . Absolutely. When you look at domestic markets and you look at equities and where we are, normalized p es, its like an irish summer. Its not too hot, not too cool, enough sun for photo synthesis. You will see the market participate in 10 , 15 in the upside. What about oil . Is it a problem for equities . Its in a sweet spot. When you look at infrastructure, limited partnership, oil flowing through the pipelines, then its being moved by rail cars, so energy independence, and the u. S. Is roughly 83 . Oil is in a perfect spot right now. Rangebound. And when we look at gdp, productivity and absolute val s values, were in a great spot right now. Yeah, i dont know if 106 is a great spot, though, for equity investors. My point is, if Oil Continues moving higher, doesnt that zap some of the disposable income . It does. And youre seeing that inflation baked in as a result of higher oil prices, but that being said, when you look at inflation, you look at prices, you look at some of the other just fundamental data, housing is recovering, truly. Yeah. The consumers spending more. Its not wild gdp growth. Its low gdp growth. Well have low gdp growth from now until the end of the year. Rebecca, what are you telling clients to do . Were focused on the u. S. We like developed Market Equities better than emerging markets. I agree that bottomup, theres great selection to be done out there. But for u. S. Based, dollarbased investors, you have to think what you give back on the currency. If the dollars strong, you buy the best company in the world in brazil, maybe it outperforming the bovespa, but if the real sells off 10 , you lost a lot of your gains. We like u. S. Equities, develop europe is on the radar screen. We still like japan. We dont think that ones over. Art, in terms of commodities, oil, gold, how do you how do you allocate capital here . What are your recommendations . Well, you know, were pretty cool on gold. But youve had a nice revaluation arguably there. It got ahead of itself, because its driven by an inflation story. And it is on the horizon. People have had to pull back on that. You know, its generally one of those things where we argue a little bit will go a long way if there is uncontrolled inflation. Its not something youll make a material allocation to at this point. All right. Thanks very much, everybody. Rebecca, gentlemen, well see you soon. Why cant this rally get any love . Investors ignoring record highs for a reason, or is there Something Else that they know we do not . Well check in on a market that seems to be riding this record wave, but people continue to bet against it. Then, attention shoppers. You are being tracked. Some stores are tracking your instore habits via your cell phone. Is this going too far . Lets talk about it next on closing bell. Stocks hitting alltime highs today. Where is the love for this rally . Are investors feeling some alltime high fatigue . Joining me is matt from virtue financial, warren and ben willis. Good to see you guys. Thank you very much for joining us. When youre on the floor and you see the flow moving and you talk to the big customers, do you still see that theres conviction to buy stocks, warren . Theres certainly more conviction to buy than to sell, and certainly to short. And in that regard, i would say, yes. You know, i think people at these elevated levels are looking for theyre a little concerned so theyre looking for quick ins and outs, even when they do take the long positions now. More of a traders market . Absolutely. Than longterm commitment. Is that what you see . Yeah, the bias is to the buy side. Inflows are leaving fix the income and dividend paying funds, the equity, the beta issues Like Technology and Consumer Discretionary stocks. The bids are there. No one is reaching for a stock. The institutional customers, the big funds are laying back. They want their bids to be hit. Theyre not reaching the buy anything. Matt, is that what you see . I guess my next question to all of you is about volume. I think we do see it. But were seeing more of sector rotations. Thats whats keeping the market afloat. Instead of buying the whole market as a whole, youre buying particular sectors. So one sector that may be out of favor or out of love isnt seeing the buy side, but were seeing it in other sectors, which is keeping the market afloat, or probably a reason why were not seeing tremendous volume, either, because theyre rotating this money around and around and around. You know, i think you know, the Retail Investor, obviously, is it going to come back to that, is that what takes the market to the next level . Them getting involved, saying, i missed enough of this, i am throwing in the towel. Where is the convkz now, if you say theyre rotating . Where are they rotating now . The next conviction may be defensive plays. As warren said, maybe theyre maybe theyre not totally sold on what the market is doing. The market could be categorized as a gift horse. You know, its really the economics arent there to substantiate this rally for most people. So maybe thats whats theyre doing. Theyre rotating the money around and will rotate into different ones weekly. What about you, ben . Seeing the benefit of a rotation inside. The Bigger Picture if you look at a global picture of money flows, i believe were seeing money flowing out of the bond fund markets and flowing into equities. Theyre being selective in their choices at this point. But if you are picking groups that are in favor recently, i would go to the technology sector. If you want to take a Bigger Picture view, look at the russell 2000. Its a global index, but theyre weightings are on the more unusual side. So its one of the best performing of the major indices in the country now, and theyre heavily weighted in Real Estate Investment trust, regional banks, and transports, and theyre seeing money because theyre still 20 plus on a yeartodate basis, but if what im seeing at our company, we continue to see some discount buying, rail discount bids, and the dividend paying stocks like the utilities and the telecoms, but the active money thats a little more aggressive seems to be bidding in the technology sector, the i. T. Sector, the discretionary, the Consumer Discretionary sectors. How about you, warren . I think youre starting to see people nibbling in the financials, particularly after some of the results we just got theyve been they have to be buying them this year they have yeah, a lot of the money was looking the Interest Rates started to run up a few weeks ago, about a month ago now, a lot of the money went in the smaller banks, the regional banks, because it was a safer play. And they got the nice pop. I think some of the money that made a little profit there is coming out and probably going back into the larger size banks right now. Seeing a little of that rotation. Its interesting. Are you seeing them look, for example, bargains in emerging markets Type Companies . Are you seeing i mean, whats going to be the catalyst to get people excited about stocks from here . I mean, are we talking about the institutional investor, the Retail Investor . Theres a big difference the institutional right here. I think thats whos watching. I want to hear your thoughts on retail, as well. From the institutional side, i think theyre looking for basically any trades they think they can get a leg up . A leg up on. And i think theyre trying to be ahead of the curve on reading what the feds doing. When you look at the bond market and the reaction we had in the spike in Interest Rates after bernanke and everyone spoke the last few weeks, that was extremely crowded trade. And once the word got out that tapering and tightening might be coming around the pike, everyone decided theyd get out. But has that sentiment changed . You guys think that sentiment has changed if the fed wont be doing this in september . Ive said all along that the comes of the bernanke and the fed made were misinterpreted. He wasnt changing their stance. I felt that way, too. I think what youre hearing the chairman say is that tapering is not tightening. Tamering is coming. He plans on retiring by the end of this year, and this is his baby and he wants to make sure its handled the way he wants it to be handled. I think we will see tapering sooner than most people expect. Your bet is september . Absolutely. If not sooner. I think what were seeing is the effective of jawboning and thats why his testimony this week is so important in that, again, the jawboning technique of the fed has been giveandtake. Its about to go back to the take on this. He gave back a little bit last week and the market rallied on it. I would not be surprised to see in his testimony in some portion where he suggests about the impact tapering is going to have and the market react accordingly. Youre sticking your neck out here. You want to sell into this rally . I do. Yeah. Its a dangerous play. You dont want to i should say a slow taper. With no volume, its a dangerous play. The pullback is like waiting for good dough. We know it will happen. Its not the markets not unloved, its just misunderstood. We continue to see a rotation in the marketplace, which is healthy in the big picture. Yeah. And i dont think its any wrong time to buy a stock now. It may get cheaper further down the road. So the professionals are telling you and weve been wrong, quite frankly. The charts have been saying look for a pullback. And they havent come. Theyve been shortlived because theres so much money waiting on the sidelines. I said earlier the bids in the marketplace. Youre not seeing the bupullbac you would have seen in a traditional market. I think ben hit it on the head. Matt, what about you . I think eventually were going to look back on this and say, this was a time a duration that lasted there was no correction. A time correction instead of a price correction. We saw, what, 3 . 3. 5 . Yeah. Everyone looking for 5 and waited and missed that one again. They nibbled. They didnt come in with both feet. I think thats part of the market. There is a lot of cash on the sideline. No one is willing to use it. During the crash of 08, 09, people soed the low. They sold the bottoms. They sold half the position. Now they need it to triple to make money. Theyre not that aggressive trying to buy stocks. Theyre trying to get back to even, get their head on straight, get an understanding of what the economy is doing. As you said, its probably misunderstood. Its not unloved, but misunderstood. No surprise we dont have volume in the summertime. This is not exactly brain surgery to know people go on vacations. You see volatility in this time, too. Yeah. I would agree with you. Other than the fact that weve seen volumes deteriorate over the last five, seven years. Yeah, thats a whole different story. Exactly. I agree, the summertime tends to be slower. Its more brutal in an environment where the declining volume trend anyway. Are there any stocks or groups that you see particular interest . Here we are in a week were really busy in terms of Second Quarter earnings. We know the fed will be a big part of, you know, dominating conversations and the sentiment to where the market goes. Are there any groups or stocks you see that are of particular interest recently . The financials are on the hot seat right now. Based on the Bank Earnings, which were better than anticipated, so Goldman Sachs tomorrow with the earnings, and the risk now is that weve seen jpmorgan and citi demonstrate their ability to trade. Were fully expecting Goldman Sachs to demonstrate they have the ability to trade this market, too. Hopefully, they were short the Interest Rate or short fixed income and long Interest Rate. If theres a focus because of the earnings season now, i would say its definitely the financials. The question is for banks will they be successful in rotating from the position where theyre in the comfort of the tier one capital, manipulation by the fed, to be able to trade out of that and go into the business of banking, buying shortterm money and trading out at long term . Right. And do you think were going to see the impact of the 80 billion that came out of bond funds in the month of june, some of the banks . Have we been seeing that impact . Yes. Yes, we have been seeing that. Without a doubt. Real rotation. Thats where were going to an end people are expecting more to come. The interesting part is it appears the money is taking a shortterm route into money market funds before it comes directly into the equity funds. People need to realize at some point that there are a great many bond funds that were investing in equities and its part of the downdraft we saw in utilities and telecoms. Look at your statement and find out the fund manager may have been in some of the big utilities and big telecoms. Yeah, very good. Not what i pay him for, but a good point. All right. Thank you very much for your insights. Up next, big whale, big haul. Up next, Hedge Fund Billionaire fund paulson stands to rake in a bundle. Later, first the government now retailers, too. Wait until you hear about the data some storms are mining from your cell phone when you hit the mall. Back in a moment. At a dry cleaner, we replaced people with a machine. What . Customers didnt like it. So why do banks do it . Hello . 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Even this year paulsons gold fund is down 65 and is in enough of a distraction that the company is now reporting its performance a little less widely. Paulson often notes that gold is a miniscule part of his 18 billion aum, and not too much of a factor in his overall strategy. To be fair, his other strategies tell a far better story. The Recovery Fund is up 26 on the year, way better than the s p, which is something few hedge funds can boast about. It was initiated to buy bets and other u. S. Investments that would benefit from the recovery and currently holds names like radian, mgic, and one west bank. And the other funs are the rmr funds, like scompanies like sprint. Late friday, he got another potential boost, maria, as his significant stake doubled in price on news that at t would take leap over. Kate, let me ask you, john paulson probably best known for the subprime short back in 07. How are his Credit Strategies performing now . He still has that same fund, right . He absolutely does. Its the Credit Opportunities fund. Its up about 12 year to date. Hes still doing well with it, albeit a little less well than the Recovery Fund and one of those more levered versions of the merger r fund. He still has it. Its worth noting, theres a reason why he has this reputation for having the housing short. It returned 590 in 2007 and about 18 in 2008. So he saw the trend coming before many others did, and as were going to be hearing this week, at the Goldman Sachs trial, i think, which deals with the subprime shorts and paulson was involved in the goldman deals, it was incredible prescient at the time. Yeah, incredible, kate. Well hear directly from paulson later this week at delivering alpha. Hell be joined by nelson and carl icahn and a lot more. Join us this wednesday, july 17th, for cnbcs special conference, delivering alpha, july 17th. Up next, shoppers beware. Stores may be tracking your every footstep through your cell phone. This is for real folks. They say theyre trying to enhance your Shopping Experience. Really . Well debate both sides of this controversial trend. And later, get your wallets ready. Gasoline prices may be poised to jump. Well check in with jane wells on how they may go. Back in a moment. This year is more important than ever because there is a huge sea change taking place. Weve been watching this great rotation where investors are coming out of bonds and moving into stocks. You need to know what to do with your money in a changing environment. Thats what im looking forward to finding out. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond 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. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades you open an account. [ male announcer ] some things are designed to draw crowds. Others are designed to leave them behind. The allnew 2014 lexus is. Its your move. Welcome back. Next time you walk through the doors of your favorite store, your every mav, from the aisles you visit to the time you spend there, to what you end up buying, could be tracked by that store. Is it an invasion of privacy . Joining me right now is todd hazel hazelton, and this is on the story of a the New York Times story today. Todd, good to have you on the program. Quentin hardy wrote a story for the times talking about how customers are tracking us. Is there any different between retailers tracking our habits while were there, online, versus a brickandmortar store doing the same thing . In most cases, no. In the case of nordstroms, i talked to them earlier, they tested it earlier this year. In fact, they used data from shoppers moving around the store. But collected anonymously. They didnt store it. All they were trying to do is make a better Shopping Experience for people in retail stores. And they need to do that, because amazon is taking them away. We have the problem of showrooming, people going into pest buy, trying something, and then buying it online. Thats a problem. This is a real important thing for a retailer to do. How does collecting this data help a retailer to actually know as much as they can . For example, if they have a sale on jeans and they see 12 people walk to the jeans section, then maybe they know the sale is working. Or maybe people dont walk over there, and they know. Or perhaps they need to staff the store better, an electronics store, and a sale on hdtv. People needs to know theres somebody there to take to them. I guess one of my issues is people dont really know that. You know, the other day i went into a bike shop. As i am walking into the bike shop, theres this huge sign that says you are entering a youtube zone. I said, what . This guy is hes doing videos on youtube of everything you do for your bike. Yeah. Thats a little scarier. You should have told me this before i got here. How come retailers are not telling us . They do. Nordstroms, quoted this this article, they have a sign that says, and you can opt out. The phone is looking for a wifi signal, it takes the mac address, which is an identifier for you, and it sees where youre moving through the store. Its sort of just an analytics collector for the retail firms. You know, i get scared when people say, oh, this is anonymous data. What do you mean anonymous data . Its my data. Theres no name attached to it. It doesnt know who you are or what you are. It doesnt . No, it doesnt have your name. Its just its what your phones doing, where its going around the store. If hundreds of people are walking into the macys here, for example, as they do every day, they know where these people are going. Sort of like traffic patterns. People arent looking at ways it collects data on the roads. People are, like, im stuck in traffic. Its the same idea, just inside a store. You make a good point on that. Let me bring in quentin hardy, the New York Times Deputy Technology editor. Good to see you. You wrote the story in todays the New York Times on the subject. Let me ask you your thoughts on the difference between retailers tracking Consumer Habits online versus a brickandmortar store. I think, you know, its been so successful online, it was bound to burst out of the internet and just take over the physical world as well, that you can gather more information on your shoppers is a desire ret l retailers have. People do somewhat agree to this. There are signs, they should be more prominent, saying this is going on often. Right now, they count how many people come through stores with clickers. Where i do think theres a problem here is to say its anonymized, its just one set of data, thats not exactly right. Because you can look at this metadata, and compare it with things like retail slips or parking or other phones and what they did. Maybe even get some other information from third parties. And build up a pretty good profile. Now, they wont put your name on it, but theyll know a lot about you. Well, sorry to interrupt. But without a name, then its anonymous, isnt it, quentin . I think youre sort of driving fear where fear doesnt in a moment of candor, years ago, a Google Engineer said to me, you know, we dont really need the name in the end. The name is kind of noise. We know enough about the person without the name. And your distinction is, well, theres no name, so its anonymous. If you have all their behavior, can you do a lot of things with them and to them without having their name. But how is this different than a club shopper card . Yeah, like costco . Its plastic, it travels over a larger area. It can be recombined with more kinds of data. Its different in many ways. I think the point you make about Club Shopping is interesting, because thats a voluntary decision people make to be followed. And i think thats the likely way this is going to work out with phones, too. People will get some benefit. Theyll say, hey, if youll come into our store for ten minutes, well give you an hours free parking in the mall. People will like that and theyll take it. Is there any way to turn it off and not have people sure shurks an off switch right on the side of the phones. All right. So just turn your phone off . Turn the wifi off. Go into the settings off and turn the wifi part of it off. That works, too. All right. But people just disable cookies in their browsers either, do they . Yeah. Gentlemen, thank you very much. No problem. My pleasure. These are the issues of the day, if you will. Well take a short break. When we come back, his snarky came to symbolize for the public everything wrong with wall street. Coming up, the trial of the Goldman Sachs trader. Also, ahead, jane wells checking out gasoline prices in southern california. What can you tell us . Reporter hey, maria. In l. A. , the gas prices are the highest. The gas taxes are the highest. But in the nation, the highest gas prices are actually chicago. Were going to look at a national map to figure that out and if what goes up must come down, how far down . We look at that after the break. [ cows moo ] [ sizzling ] more rain. [ thunder rumbles ] [ male announcer ] when the world moves. Futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with papermoney to testdrive the market. All on thinkorswim. From td ameritrade. Fffffff. Laclaclac. Hes an actor whos known for his voice. But his accident took that away. Thankfully, hes got aflac. Theyre gonna give him cash to help pay his bills so he can just focus on getting better. Were taking it one day at a time. One day at a time. 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With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. Welcome back. Pain at the pump in california may spread to the rest of the country. We want to go live to jane wells at a gas lease station in southern california. Over to you, jane. Reporter hey, maria, and aaa says the National Average is 3. 61. Its not herement but thats up 14 cents in a week. And theyre saying things like lower inventories and expected higher demand, turmoil in egypt, are some of the reasons. Now, if you look at housing, we call it location, location, location, it turns out gas prices are kind of the same thing. Take a look. Red and blue states mean something very different when you look at the heat map. Red means prices are close to 4. Yes, where i am, california, suddenly a red state. Gas is more expensive than milk is now, and its a little crazy. Life is not always peaches and cream. You have to adjust. July 17th of 2008 we reached our alltime high of 4. 11 for a National Average. So while prices are higher, theyre still 50 cents less than that alltime high. Reporter all right. Well, look here. Gasoline futures taking a breather today. If you can consider a few 10,000ths of a cent down, hey, its down. And we could see oil fall by half, to 50 a barrel. Dont expect to see gasoline fall by half as well. The fact that were relying on railroads and trucks to move product from refinery markets to consumption markets rather than pipelines is adding another 35 to 40 cents. If you do the math, remember, with 50 oil does not translate into 2 gasoline, because we still have to refine it and we have to move it. Reporter now, maria, a big report coming out wednesday, analysts are going to watch to see if theres been another surprising drop in inventories. If thats true, we could see another surprising rise on this sign behind me. Back to you. All right, jane, thank you so much. Well be watching that. How do you play the rising price in gasoline . We want to bring in scott from treon and jonathan. Gentlemen, good to see you. Scott, how are you playing this move . Well, i think that we had the perfect storm to get us up here. I think that ultimately storms do pass. So i think that i want to buy puts. Im looking at december 95 puts. Well go back to that 75 to 95 level, not as far as the gulf oil thinks, but down into that range. Ultimately, maria, the world cant afford high oil prices. Thats a tax we pay every week at the pump, and we cant do it now. And a lot of people think the supply coming on the market will, in fact, put a crimp in some of the moves. Jonathan, what about you . Do you agree with that . I disagree, actually. I think were going to move higher. We still have a lot of uncertainty in the middle east. Weve seen the economy get better. For the first time really this year, it looks like were seeing the demand pick up in gasoline and oil. So i think this is probably the wrong time to start getting shorted. And we actually have a chance to run up here. Well, what about, you know, near term, i could understand, because were still in sort of that hot spot moment of the demand season in the summertime, gasoline, you see the demand and it moves higher. But arent we seeing a lot of supply poised to come in this market mid and longer term out . Wouldnt that be a negative . That is negative going forward. I think a lot of the focus is on the rest of the summer and getting into the fall. And i dont really see a lot of supply getting online just that quickly given how were set up currently. Okay. So you dont think that supply comes on so soon. Scott, what about that . Whats your expectation in terms of moving higher over the near term and coming back down over longer term . Yeah, were in a real nervous spot. We could go a little higher. Ultimately, summer turns into fall, turns into winter. Right. So that demand is going to slowly but surely tail off. So i think ultimately we cant it comes down to the economy, maria. We cant afford to pay the tax every week at the pump. People are yeah. The interviews you do, people are feeling that pinch. Ultimately, weve had this problem in agriculture. If we get to the point where the customer cant afford it, then what do we do . Right. I guess thats where were going. Gentlemen, thank you. Thank you very much. Well see you soon. Scott, jonathan, well keep tom following that. And, of course, today, oil once again above 106 a barrel. Crude oil finishing at 106. 43. It is day one of the trial of former Goldman Sacks Vice President , accused of selling investors products he knew were doomed to fail. Well have the latest developments next. Back in a moment. To make their money do more. ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Ranked highest in Customer Loyalty for brokerage and investment companies. Welcome back. The securities and Exchange Commission kicking off its case against fabrice tourre. He is accused of failing to disclose critical information to investors who lost a billion dollars betting on the subprime Housing Market back in 2007. Mary thompson is live at the courthouse to take us back and forward. Mary, over to you. Reporter maria, in its opening courthouse to take us back and forward. Mary over to you. In its opening gumths the prosecution called this a case of wall street, greed, lies, trickery and desipgs culminating in fraud. Telling the jury of five women and four men the allegations are false and the 34yearold touree received no one. Touree, then a 28yearold Vice President at Goldman Sachs pulled it together in 2007. Paulson is the hedge fund tighten who made billions betting against the Housing Market. They say he withheld information about paulsons role in constructing and investing in the cdo. Accusations tourees team denies. During arguments both sides referencing the email where he calls himself the fabulous fab. He says he knew what he was doing was wrong. The defense saying it was a late night letter to his girlfriend and coworker. The judge is keeping this trial on track. She wants it done in three weeks. The first witness has been called to the stand. He is testifying as we speak. Other witnesses expected to be called, john paulson, the hedge fund giant. He will be as will we when he testifies. Maria, back to you. Thanks, mary. Well keep watching that. All eyes on earnings tomorrow. 30 seconds on the clock for even of our next guests telling us what we should be watching for tomorrow. Gentlemen, good to see you all. Chris youre up first. 30 seconds on the clock. What are you prepared for for tomorrow . Thanks, maria. Really what were watching is the Housing Market index number. Expecting something between 48 and 52. Anything north of 50 is positive. Anything south of 50 is softening in that market perhaps related to bernankes markets in the last couple of months. Were keeping an eye on financials, looking at 21 increase in values there. Goldman sachs going to be reporting. Were expecting 2. 82 earnings per share. Anything above that would be nice, anything lower would be bad. Adam, 30 seconds on the clock. What are you prepared for for tomorrow . Netflix, amazon, apple and also wells far go. Where the four we like. Amazon is a juggernaut. Also the fed is wimpy here. We have deception, the technicals and the stocks from the Retail Investors who hapt even gotten into the market. Amazon, netflix is great Home Entertainment for everyone. Apple is a sneakup party here. Thank you very much. Michael you are up. 30 seconds on the clock. What are you ready for tomorrow . Two things. When i look at stocks like packaging corps of america is going to kick off tomorrow. Were looking at earnings forecast. Were going to see 30 increase in earnings, its a great company. Youre going to see the continued strength, dominance, commodity. Its a great stock in terms of its ability to generate north of 3 dividend yield. All the other names are going to rally in july. The other thing is leap wireless. Youre going to see a counter bid from t mobile. Thanks, guys. Appreciate it. Well see you soon. Up next, are they hot or not . My thoughts on recently battered emerging markets next. 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Before Global Opportunities were part of their investment strategy. Before they funded scholarships to the schools that gave them scholarships. Before they planned for their parents future needs and their sons future. They chose a partner to help manage their wealth, one whose insights, solutions and approach have been relied on for over 200 years. Thats the value of trusted connections. Thats u. S. Trust. Finally tonight my observation on the emerging markets. They seem to be trying to find a bottom. We did see inflows the last couple of days. Last week i pointed out that there is a cost to security. Once these markets bottom out which i believe is happening now investors will be much more selective. No doubt it is about growth in the world over the next ten years which will likely come from these markets. Take china for example, many of them are moving to cities, or india, 1. 1 billion people, all of the above are expected to resume strong growth stories. These so important because so many u. S. Multinationals are betting on these regions of the world to boost earnings. Today we learned from city which traded up on its Second Quarter earnings, its seen as the most international of the u. S. Banks. It has faced pressure because one half of the companys profits in the first half came from emerging markets, longer term these will see growth as the population in these regions continues to expand. As one of my guests earlier pointed out, hes looking long term. The emerging markets as a play structural long term theyre a safe place to be because you look at growth. You look at gdp, population demographics trending toward 9. 5 billion people in 2050. Expected growth rates for hot markets, china, 8 and a quarter percent. Brazil, 2014, five percent projected. All of the nations are expected to grow from these levels. Steady but slow story in the United States, in the United States the debate has centered around the Federal Reserve and the beginning of the end of the quantitative easing. The latest data tells me its not a done deal yet. As ive said many times in this observation the fed may not be able to step away if the economy is in this growth stage as it is today. Today on wall street, the Dow Jones Industrial average finishing in unchartered territory with a gain of 20 points. Last trade of the nasdaq and a 13 year high. S p all time record high of 1682. That will do it tonight. Follow me on twitter and google plus at maria bartiromo. Stay tuned for fast money. It begins right now. Ill see you tomorrow. Live from the Nasdaq Market site in new york citys times scare. Were here with steven p grasso, Karen Finerman were talking about the hottest stocks of the year. We start it off with tesla added to the nasdaq today, up 280 already this year. Pete, still ride this one . I think you can but i think the one issue that i would have had is not only the fact that its up