Liz the top three stories you need to know. Youve got a hot stock, what a turnaround at aol. Revenue rises for the first time in eight years, thanks to a big pick up in ad sales. Youve got mail. Liz search is gaining traction. Aol ceo talking to us about the developments and the future. Plus housing in recovery. New orders, prices even permits are heading in the right direction. Can it last . Homebuilder hovnanian stock building to higher heights. The ceo is talking to us about the real story of real estate. And a monster storm barrelling across the northeast could mean monster sales for publicly traded snowplow name douglas dynamic, when major snow and blizzard conditions heat up the stock, we have the ceo in a fox business exclusive. Countdown begins right now. Liz happy friday everybody. Im liz claman. Countdown to the closing bell just one hour left of trading for the week. In the middle of a northeastern storm, got a little sunshine down on stocks, percolating higher at their best levels in more than five years. Volume is a little bit light here. Nonetheless, lets take a look. We do have the dow moving up today. Right now up 40 points. The nasdaq better by 27. The s p 500 up 7 and 2 3 points. Both the nasdaq and s p on track for six consecutive weeks of gains. Will it happen . We will be watching the levels very closely. Lets flip it over to apple. It moves higher by nearly 2 from yesterday when the tech giant said its board would consider returning more cash to shareholders. Some of them stirring the pot with complaints and lawsuit threats about all kinds of issues, but the pressure is on. The belief certainly that apple might relate to some of these shareholders who are complaining, green light capital. The stock is moving higher by 9. 45. Micro Chip Technology gain of 2. 53 makes it the biggest gainer on the s p 500. Q3 rev weve got traders at the New York Stock Exchange and the nymex. Doreen, glad you are there. Earnings are giving the bulls some ammunition today. Q4 numbers coming in ahead of estimates. You could also say the good news out of europe this morning putting a bid under the market with eu leaders agreeing to budget cuts for the first time in seven years. Whats not to love . Everything is to love. The volume is light, it doesnt matter, and generally i would have disputed that, but i think volume is light, if it would have been bigger then we would have had more to the upside. I think a lot of volume is due to people going home. I sense the sentiment is correct, people like this market. They like it. Liz they like it. Okay. Its that moment at the moment until there is some type of negative headline; right . I mean when you look at that, thats whats been our biggest problem. I think it has been. This has been headline driven for the last three or four years. I think since january truly people have decided they are going to put their money in the stock market. I mean they think the fundamentals are getting better. We saw this this morning with the data out of china and the u. S. I think people are continuing to feel better, and as long as they are feeling better, they are going to take that money that hasnt been working and going to put it in the stock market. Liz alan, im a little surprised by the fact that heating oil on a day where we have this unbelievable storm supposedly bearing down on the east coast, heating oil has a little gain of 4 pennies and also have rbob gasoline moving up just 6 pennies, 2 gain here but crude is in the reverse, down 14 cents. I think its spelling out for us that theres product is a little tighter. I think we have another 2 to 3 weeks before they start coming off. Theres enough supply in the marketplace that even an interruption from a big storm, still doesnt make it go up. Liz i will tell you what is going up is brent. Do you at this point go long brent and short west texas intermediate which is here in the u. S. Because the spread keeps widening . Not yet. Right now what i see is that pipeline, it is going to help out. Theres so much economic interest to bring this spread in. I think theres so many forces at work that are going to start bringing it in. Liz i could have made a lot of money going against what you just said. Well, that was before. Now thats a tough bet. Its already gone out quite a bit again. Liz doreen, make me some money. What do you think is the big trade next week . Oh, next week, i have to tell you, i think we are still going to be looking at techs. Liz good enough. I love to see you guys at the ready because thats what were doing here at fox business. I keep looking out the window. Its vague, but nonetheless its a little bit of for those of us who lived in cleveland, it is not a big deal at the moment. But let me wish you guys a safe journey home. And lets bring it to the one business thats just dying for this snowstorm as a massive blizzard moves up the northeast and Many Companies shut down, we have got that one company thats so excited. They have been praying for snow. They are the leading publicly traded Company Maker of snowplows that mount on to trucks. The ceo and president is joining me now in a fox business exclusive. Douglas is the company. And tell me first, james, first of all, welcome to the show. You are in lovely scottsdale, arizona. Thank you liz. Liz what were the last couple of days, as soon as this storm really hit the radar, what have these days been like for you as that snowplow company . Sure, theres an awful lot of preparation for the storm. Most of our dealers are becoming prepared for all sorts of eventualities, but clearly they want to be prepared for anything that might come up, particularly on part, service parts, and accessories and making sure that they can keep the plowers on the road during this storm. Liz well, the one thing if you compare to what happened last year, where we had unusually light, if any snowfall, i think there was one little storm here on the east coast, at least in new york. That really hurt you guys. I mean you had to really scale down estimates for q4 and full year 2012. Does this change the picture . Can one storm change your numbers . The storm by itself doesnt necessarily change the numbers. I think we take a statistical look at the whole year from october through march, and that will really determine the following year and how we do. Having said that, absolutely a storm of this magnitude does terrific job not only for sales, but i think the psyche of people who make money plowing and with snow, i think becomes much more positive. Liz were looking at your lowered eps guidance, but im talking about say for example, you are the leader when it omes to these names like blizzard, fisher engineering, western products, you market under those names, and they bolt on to the front of trucks. So i would imagine thats big in say apartment complexes, malls, developers, contractors. Who is your basic client or do you have one . Yeah. We sell through dealers. We sell nothing direct through 720 dealers worldwide. But the end user is primarily the Largest Group is people who plow for a living. They are contractors. Theyre snowplow landscape contractors who in the summer might do something at your yard and then plow for you in the winter. That is the largest segment of our business. Liz your sales, though, correct me if im wrong, are driven very much in part by a need to replace after what five to seven years. I look at what weve seen with all durable goods, these are products that last more than three to five years, people have stretched it because of a weaker economy. Theyve hoped that something will last a little bit longer. I know your products are strong, but whats the replacement cycle looking like . Well, the replacement cycle for us is averages about 7 to 10 years. The replacement cycle of course gets delayed because of the low snowfall last year. Liz true. And frankly the first part of this year, but storms like this will help people get on a much more normal replacement cycle. But yes, the more it snow ss, the more the product it gets used, the more it gets used, the faster it is replaced. Liz salt, a lot of cities and municipalities have gone to other types of being from california it is a little hard for me to i reach for the words, different sand, for example. Which one causes the most erosion for your products . Well, i think salt by itself is the most caustic to the landscapes and to concrete. I think thats probably the more difficult, but frankly its one of the areas that creates the most safety for passengers who are on the roads or in other places. So, you know, its a doubleedged sword. Liz is there any way that you can make a snowplow that as it goes by doesnt push all the snow to the edge of my driveway so i have a mountain i have to go through . [laughter] well, i think you could pay the people in the city to not do that in front of your driveway, but everyone else has to suffer through that. Liz yeah, i know. I know. This is a tough business, though. Especially when we have had such light snowfall in the past. How do you anticipate, how do you hedge . You have to buy a lot of metal because thats what your products are made of. But what is your toughest job right now . Yeah. I think what weve always focused on, liz, is to manage the things we can control. Understanding in a business like ours, that every other year could be a weatherdriven recession, so we make sure that our fixed costs are very low and our variable costs are quite high, and as a result, we can ramp up and down very very quickly. And as a result, i think, you know, with the 50year record low snowfall last year, i think we turned in some very nice Financial Results and cash flow results which frankly i think amazed some people. Liz and a dividend of nearly 6 . Yes. Liz thats impressive. People certainly like that. That alone is attractive. For the Ticker Symbol plow, perfect, i love that, plow. The market cap is small, 307 Million Dollars. We do want to point that out because sometimes the swings can get a little more dramatic, but it is nice to see you. Thank you, jim, for getting in the chair in lovely warm scottsdale. Thank you very much. Liz thank you very much. Jim janik of douglas dynamics. Closing bell ringing in 50 minutes. Remember back in the day when aol was super hot, changing the way people communicated through email. Tom hanks and even meg ryan starred in a movie youve got mail, a romantic comedy. Lets fast forward a bit. Weve seen changes now on aol, getting into digital video, boosting ad sales and stopping the bleeding of its dial up business, which was a disaster; right, well not anymore. How did it make the Successful Transition . Could it be leadership . Where does it go from here . Coming up with a conversation with chairman and Ceo Tim Armstrong. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large ofessional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Liz this is an unbelievable story here. Linked in stellar quarter pushing the stock to new highs. Lets get to nicole on the floor of the New York Stock Exchange. Nicoll we are watching the shares. Really doing well. Moving to alltime highs for linkedin, up over 21 right now at 150. 42. You may remember the ipo back in 2011. These are the alltime highs today. Came in with quarterly numbers. Saw revenue soaring 81 . Also saw net income jumping 66 . So with these moves, this is the 7th quarter in a row that they are beating the estimates. You have several firms this morning raising their price target as well. They have 202 million users. Thats up almost 40 year over year. So certainly a nice stellar performer. Back to you. Liz 21 . Thats a really strong business there. Thank you very much. On to another interesting business that has looked very strong for a year or two now, but terrible, almost like youre going to be out of business soon, that was several years ago. Shares of aol soaring today. Off the highs as you can see intraday. The buoyancy losing a bit of steam but nonetheless a very Solid Earnings report pushing this name higher. Revenue rising for the first time in eight years. Like i said, its been a long road here. Earlier today, i asked aol chairman and Ceo Tim Armstrong who came from google what the number one catalyst has been to spark this growth. I think the number one catalyst actually and this is not going to be a financial metric is talent. I think aol has done a tremendous job putting the right people in the right seats to drive growth, and look on the consumer side, with the properties we have, aol properties, things like patch, makers, those things, incredible properties. On the advertising side, you look at what weve been able to do with advertising. Com, which we recently renamed to aol networks. What weve done in terms of the businesses related to the ad business overall. You take a step back, and then look at historical aol businesses, everything has improved pretty dramatically, and thats because of the talent and people we have at the company. You followed the company for a long time, and i think you know what aol is capable of. We have the right people in the right places, magic happens. Liz i have followed it enough to say you could arguably say the Long National nightmare is finally over. You do have after eight years have some decent revenue so thats great. Let me drill down a bit on Huffington Post. Because when you guys bought there, there were some questions and a bit of criticism, they are spending so much money. In retrospect, how smart a deal has this been . Very few times during anyones life that you see brands that can become global brands, and i think the Huffington Post from our perspective we knew two years ago and it is two Year Anniversary of the deal right now that arianna and her team had built a Game Changing property and brand. Wall street looked at the deal and didnt like it at first. But i think, you know, wall street and in a lot of cases lags behind where the opportunities are because theyre focused on the here and now and were focused on where things are going and i think its proved out to be true. We have had double digit growth in in traffic. We have expanded internationally. We won product of the year, most innovative media product. You look at Huffington Post, i would argue it is one of the most valuable Media Properties in the world right now. Liz one of the things that critics might say well the traffic is flat across the board and while you had been declining, youve stopped the slide, certainly, so there you get the thumbs up, but at what point do you really see traffic markedly move to the upside . You know, we reported 6 traffic growth, which out of the top ten Internet Companies is one of the best performances, and then you dig underneath that, we have also shown that, you know, the legacy business at aol has declined 10, 15 percent in terms of traffic over time. The new users were bringing in are actually much more engaged than the users were losing. So you see things like 30 increase in time. 20 increase in engagement metrics overall. You see things like the Huffington Post which i believe is the most widely distributed news property on facebook. So were replacing essentially legacy users in many cases with people who are of the newer generation, the internet, and where things are going. Were happy about the traffic growth. Liz just like a google guy, youve really been on a tear having come from google, and just recently. Adding an some original programming deals with discovery and with the Speed Network which is a part of our family here at news corporation. Are you looking to be and i started to look at this. I said heres aol coming up with its own shows, such as the list or translogic some of these. Are you looking to be the next netflix or maybe even a studio itself . Well, we think theres a gap in the marketplace right now where theres tremendous consumer demand for video. A lot of the great content of the world has been locked up in closed networks on the cable side and those are tremendous programs, and i enjoy them. Everyone enjoys those. But theres an open part of the internet right now which is consumer usage, mobile, desk top, video, tablet that wants video. We have been investing in original programming. We have been investing in partnerships like discovery and speed tv and those partnerships and oprah, Martha Stewart because we believe that the consumers are going to consume a lot more content online. They are going to get it from cable. They are also going to get it from players like aol. You have youtube on one side of the market which is open platform. You have had hulu on the other side which has been a closed set of really cable content. Aol sits in the middle. Were second after youtube right now in video views. Liz not that you are in the same position to have huge cash pile like apple but at some point you might. You did a one Time Special Dividend back in december. Any future chances of shareholders seeing another dividend here . Aol has outperformed the nasdaq standard and poors and Dow Jones Indexes in the last three years. On top of the fact that we gave back 1. 5 billion dollars to investors through either cash dividends or repurchases. Today we announced another 100 Million DollarsBuyback Program overall. For our market capsize, we have given back 50 of the market cap back to investors and still invest in all those Innovative Products services and content overall, so you know were operationally friendly and also shareholder friendly. Were going to continue that path. Liz that looked like a no on the dividend. Im just saying. Dont wait for the dividend there. Closing bell ringing in about 37 minutes and change. Things are heating up in the new York Real Estate market. Its a big shift thats taking place. One where the buyers are calling the shots. You know, lately we have been hearing that the sellers are calling the shots. But you dont even get that much more anymore for seven figure apartments. Were live on the scene and actually seeing you an example of what you are getting. Its coming up next when countdown returns. [ woman ] if you have the audacity to believe your Financial Advisor should focus on your longterm goals, not their shortterm agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. If you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do face time and think time make a difference. Join us. [ male announcer ] at edward jones, its how we make sense of investing. Liz fox business is bringing you the real real estate story all day long, and in particular, the new york Housing Market seems to be morphing from one that had been for the buyers to one that is absolutely for the sellers. But how much space, more than 2 Million Dollars would get you . Thats the big question. We have sandra smith at an apartment in the up and coming area of new york city. And sandra, we wanted you to really articulate the space issue. Sandra so, you do have your own elevator that opens up into your beautiful 2 1 2 Million Dollars apartment. Tiny elevator, nothing special, but its your own private access with your own tiny foyer and as youuknow, liz, everything in new york is tiny. But then you do come into a pretty spacious apartment. Its 1900 square feet. This unit is listed for 2. 375 Million Dollars right now. And youre right, its a sellers market. Actually we talked to the Real Estate Broker thats in charge of selling this unit as well as the others in the building today. We even talked to the man who owns the building, and they said that these are not staying on the market long. They have big windows, tall ceilings, and there is a frenzy of buyers as they put it out there. But liz, our question was, how do you get the furniture in here in that tiny elevator . Here you are looking down at the 8th floor. Yeah, youd have to bring a crane in to lift up some of your bigger furniture. But thats a small cost for somebody paying 2 1 2 Million Dollars for a manhattan apartment. Look at that view. You are looking out your living room window at the empire state building. So just like everything thats in new york, maybe smaller for that kind of money, but location is everything. Youve got the hotel right around the corner. Lots of great restaurants. Were in the nomad neighborhood of manhattan. So thats north of Madison Square park. So liz, not exactly soho. It is not the upper east side. It is not greenwich village, but liz theres a frenzy of buyers out there. They say they are International Coming from argentina, brazil. Its Technology Money locally, domestically. The money coming is from the oil families, coming in from the commodities related families. They say that its not hard to sell apartments like this in manhattan. Its two bedrooms and its pretty nice. Liz its gorgeous. I have to tell you people from knoxville tennessee are looking and thinking where are the curtains . Everybody can see inside. This is the way manhattan is. Folks, a lot of people dont have curtains. They want to see the view. And people are too busy to be looking into your windows. But that is stunning. Sandra it is stunning. Heres a quick glimpse of the kitchen, not bad. You know, it is pretty spacious. I mean gosh if you are looking if you are used to looking at new york city apartments, this is a full refrigerator. You see a lot of mini refrigerators. Full oven. It is all the nice stuff, liz. Liz a lot of people store their shoes in the oven for those of you who dont understand the manhattan world. Offer 1. 7 then the guy comes down and then you take like 1. 9. Its a crazy market in new york city. Thanks for opening that window into that world, sandra. Definitely a buyers not the buyers market, the sellers market. The closing bell ringing in 29 minutes. Were still seeing double digit gains here. So as we continue with the real estate theme here, homebuilders, real homes with curtains, yes, they have been on a tear. Sales are up. New orders going through the roof. Prices have rebounded as well. One of the biggest names in that region of the business, Hovnanian Enterprises has seen its shares of ups and more downs through the years. Will this recovery last . Hovnanian enterprises chairman ceo and president making his way into the studio to break down the real story. Hes made it through the recession. Hes coming on to our set next. Liz sticking with our real estate theme today, things are looking brighter for one apartment reit, Real Estate Investment trust after its Fourth Quarter results. Lets check it out with nicole on the floor of the New York Stock Exchange. Nicole right here on the floor of the New York Stock Exchange, lets check out this reit on our day where were doing a lot of real estate from coast to coast. Were going to take a look here at it. Its actually short for Apartment Investment and management company. You see the stock there is up over 3 . Its this move that we have seen here today. Its actually hitting a new annual high. And another thing we should note its been a winner over the last 52 weeks. Up over 9 . So now this Company Comes out with their quarterly reports and they did well, and this is why you see a winner there for this one. Its based in colorado. They did see their rental rates on new leases and renewals in their portfolio on the rise. Same store revenues that they actually compare year over year did well. Also have affordable real estate portfolio thats in part sponsored by the government. But overall, a winning day for this particular reit. As we noted, green arrows and a new high. Back to you. Liz not bad. Okay. So we could say it, im not going to sing it, but the hills are alive with the sound of a housing recovery, Hollywood Hills to be exact. The number of homes sold for 5 Million Dollars or more hitting a record in california last yeerl. Last year. A record. Robert gray is in Hollywood Hills california right now. Robert making you a little home sick, perhaps, liz. Your hometown Beverly Hills is just off camera here. Im pleased to be joined by the largest developer in southern california. You specialize in planned communities. Thank you very much for joining us. Thanks for having me. Robert now these communities are both mixed residential and theres some strategic commercial in there where were talking about the Grocery Stores and cafes and the like. These can take decades, and you have a couple that are coming online now that you started when you were chief Investment Officer at lennar. Correct. Robert talk to us about who is buying into these communities as they start to come online . Right now the market is driven a lot by natural demand coming from positive job growth. You have a lot of pentup demand. And you have a very strong foreign buyer in our market as well. Thats mainly where the demand is coming from right now. Robert as i mentioned, a couple of decades, we talked to a commercial real estate expert earlier from cbre and he was talking about theres not a lot of demand for new commercial developments. How are you convincing the likes of some of these Grocery Stores and cafes to, you know, take a leap and build and lease or buy a property in your communities, when they are not necessarily finding better deals elsewhere . Well, our communities are mixed use communities, driven mainly by residential. So the commercial component becomes an amenity and complementary to the residential component. We are not nearly a commercial developer. As a result of that, those people who would be interested in nonresidential would do so because of the rooftops. Robert how is the demand for houses . Demand for housing in this marketplace is extremely strong right now. As i said before, you have a very strong job market thats starting to build. We have a household thats very positive right now. On the other side you have shortage in supply both in standing inventory, down to about 2 1 2 months of available inventory and no availability of land. Those two are driving robert cant make more land. Exactly. Robert thank you very much for joining us. Liz, hes also finding Investment Partners unusual in some cases, universities, some other Pension Plans are joining in. Everybody is looking to get in on the action out here. Back to you. Liz all they want in california is a lot of parking i tell you that because everybody drives. Thank you robert very much. Are the homebuilders feeling a real impact of housing recovery . Robert just showed you one example. But one of the biggest names is Hovnanian Enterprises. The chairman and ceo is right here in a fox business exclusive. Lets speak to what robert was talking about, the california market when did the switch flip to on from off . It was gradually on for the last year. But in the last few months, its just gone on fire. Liz two, four . I would say the last three months we have been raising prices pretty steadily, particularly Northern California but we are feeling a very good market. Liz to what do you attribute that . The Unemployment Rate is still relatively high. Is it sentiment . What is it . It is a combination of many things. People have held off the purchasing decision. Thats number one. Number two, Mortgage Rates are ridiculously low so the Monthly Payments are so affordable right now. And you combine that with good prices by historical standards, its a good opportunity. Liz it is a little stunning to see that the dow jones Home Construction index has tripled since october of 2011. Obviously we know it was from a very low base. Right. Liz but give us some anecdotal evidence, what is the amount of time between you saying okay, we have a hovnanian home that is finished, its now on the market, to when it goes to contract . You know, it varies all over. In some places, in most cases, actually, we sell it before we build the house. So really whats key is velocity. Sales per location, that has been increasing dramatically. And were actually almost trying to slow it down in locations by raising the prices. Liz why . Because it is difficult to keep up number one, it is hard to replace the land. Land prices are going up because home prices are going up. And number two, we cant build them fast enough in some cases. So were better off raising the prices, letting it slow down and giving us an opportunity to catch up. Liz back during the housing bubble, you built and i know because it was down the street in edge water new jersey, a hovnanian community. Now youre building one possibly in West New York . Yes, were about to start we had put the land on the back burner for a while while the market was slow. Prices have gone up so much. Particularly right along that gold coast. Liz West New York, it is not exactly but again you are now looking for neighborhoods like what sandra smith showed us, nomad on the rise, moving its way up. West new york is half the price of what we saw with nomad. People can catch a ferry over. So its been strong. Liz how deep an exhale did you finally have when things started to look better . You are still only 5 stock at this point. Well off the highs of the past decade. Absolutely. Its been a long road. I mean it really started to slow down in september of 05. So its been a long painful journey. But i could say about january of 12 things really started to turn, and its now gaining even more momentum. Liz one of the big areas that seems to be hotter or the so called active Adult Housing complexes in areas, florida would be huge too, and they saw such a pullback. What are you seeing in the Florida Region . Florida is absolutely hot, not just active adults but we do that as well. Were building in orlando, tampa, palm beach county, all three are really strong this year. Liz thats an amazing comeback because florida, california, the denvers of the world they had really suffered. Ara what did you learn from going through these horrible times . Of course your father had started the business. You know, you really look back at the times that he went through that were difficult. Sure. Liz then this one probably rates among the highest where you might have thought at certain points can we really make it . In davos i was told that going into a recession the leadership names sometimes fail more quickly than the up and comers because they get comfortable. How did you survive this . Well, as you mentioned, my father started the company 55 years ago. We have been through a lot of recessions. This one is clearly the doozy of all recessions. Fortunately were not dependent on bank debt. All longterm financing. It gave us a lot of opportunity. We have a great name in the bond market. So were able to issue new debt with longer maturities. And weve been through this play book. We were aggressive when the market was really low in the last two years. Weve been buying land. And that land is yielding some good results. Liz theres your lesson, you know, be greedy when others are fearful if you can be. Great to see you. Good to see you. Liz ara hovnanian in a fox business exclusive. Markets still up. We will be right back. 16 minutes before the closing bell rings. Im a conservative investor. But that doesnt mean i dont want to make money. I love making money. I try to be smart with my investments. I also try to keep my costs down. Whats your plan . Ishares. Low cost and tax eicient. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Hes going to apply testosterone to his underarm. Axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. Axiron is not for use in women or anyone younger than 18. Axiron can transfer to others through direct contact. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron iappld as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. 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And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. Liz okay. This is good news. S p 500 is on track for its sixth consecutive weekly gain, but while stocks continue we cant say rush higher, they kind of chugged along, the high yield bond market, which has been a super hot trade, seems to be running out of a little gas. Why should we care . What does that really mean for stocks . Especially if you dont have exposure to junk bonds, why would you care . You should . Larry macdonald is here saying the market might be flashing a Little Signal by a little bit of weakness in the junk bond world . Ever since i wrote my book, ive been dedicated to analyzing risk. Liz you were big in convertible bonds. High yield bond trader. Liz you understand this market. You know what . And what ive seen over the years is its a good leading indicator when high yield bonds sell off, typically from 2007 on, its a leading indicator for equities. So if you look at the crash of 08, you look at the meltdown of 11, both times high yield bonds were selling off before those equity meltdowns. Liz were looking at the far right part of the screen to show that the s p 500, while looking a little bit higher, the blue line, jnk, which is one of the i guess you would say the etfs here, the high yield etf has sold off. So youre saying the yellow line of the s p 500 might not be far behind . I think for a lot of reasons stocks are overbought. Systemic risk indicators from europe are all rising. You have to look at it more and more deeply. The reason high yield is off also is the lbo. When theres a big lbo in the market, the site of a new renaissance potentially in lbos, leveraged buyouts. Going forward, a lot off Portfolio Managers are looking at, whats the next lbo . They start selling down high yield bonds, Investment Grade bonds, ahead of the deals. Liz one lbo can trigger that kind of move . In the 04, 07 cycle it was unbelievable. Heres what investors watching us right now should take away. The key is you want to see more lbos because a cycle of multiple lbos is bullish for stocks. The sign that cfos and private equity people are bullish. Theyre pretty good risk takers at the beginning of the cycle. As we saw in 07, 08, they werent very good risk takers there, but you want to see more than one lbo. Liz okay. And they do come in fits and starts. But lets then say whats the trade larry . If you are correct, although we have had very smart people standing this that very spot saying buy. Just yesterday carol pepper who has High Net Worth clients of more than a billion dollars, she said dont wait for a correction, pour your money into stocks. You are saying no. Lets say you are right and lets say people buy in. What is the trade . Short the s p . Since lehman the only people have that outperformed the market have bought political fear and sold and lightened up on complacency. So i would right here lighten up on stocks. If you did that in 10, 11 and 12 if you did that at this time in the spring of 10, 11 and 12, stocks were up. If you sold into that strength, you outperformed the market. Going forward here i would get long volatility. I would lighten up on stocks. I would think about shorting some sectors like retail looks very vulnerable. Oil has moved 11 in 56 days. Oil, thats a big problem for retail. Liz buy puts, explain to people how you would do that . You could buy put spreads. Or you could outright short. Most people at home, they might own Retail Stocks here. Just lighten up. Liz lighten up on them. And to get long volatility, you can buy futures on the vix and things like that. Liz does the junk bond as we finish up, does the junk bond trade continue or are we starting to see that a little tiny bit from that chart move down . Yeah, it is a long cycle, and if there are more lbos, the market will be under more pressure. It is a very good leading economic indicator. Liz he is a survivor folks. He survived lehman. He is now more than a survivor. Larry mcdonald, new edge senior policy strategist. Thanks liz. Liz good to see you. Closing bell ringing in about 6 1 2 minutes. The dow fighting to keep its streak of positive weeks for the year. Right now still in the red for the week for the dow but possibly green for the s p and nasdaq. Were looking for a close above the following level, 14,009, as the dow inches back toward that very important sort of psychological level of 14,000. Were taking you through the last minutes of trading on this friday. Looking out the window, not that bad yet here in new york city. [ male announcer ] this is karen anjeremiah. They dont know it yet, but they gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. Liz i am looking at the dow jones industrials. This level does not make it a win for the week. We need to see 14,009. Not quite there yet. For the s p 500 for the week. Looks like we are up. That would make it the sixth in a row as far as those moves to the upside are concerned. Best winning streak, longest winning streak in six full months with the vix ticking down just about. 34. Again complacency, is that a worry . Who knows. But on this friday were watching the markets and so much more. Dived asman in place for after the bell complacency. Come prayssy . Im conversating with my coainge shore. Liz lets go over to the nicole. Down at New York Stock Exchange. What is it now a 21 move for linkedin