The dow is the story today bet than 1 gain the russell, small caps trailing a little bit bob pisani on the floor with more were reversing that trend. We used to sell off in the middle of the day, but friday we diplomat and today we are holding onto our highs its very important. Three trends ive seen thats happened in the last two days. Number one, the healing continues. S p regained 20 of the losses were finally seeing new highs appear and familiar names are on that list. Finally, the Leadership Group since the bottom is the Leadership Group getting us into this, and that is cyclical stocks look whats leading today. Boeing, 3m, apple, cisco, these are all cyclical names lacker eds, coke, mcdonalds, johnson johnson, General Electric not doing too much overall s p new highs, old faces weve seen time and time again on the list amazon, netflix, adobe, hewlettpackard, jpmorgan chase. We continue to see the rally move forward not going back to that idea of selling off late in the day. Well see how we close in the next hour. Back to you. We will see you at the close. In the meantime, hope you saw this this morning. Becky quick sitting down for an exclusive with Berkshire HathawayWarren Buffett after their annual meeting heres his take, would he buy longterm bonds or equities . Listen if you had to choose between buying longterm bonds and equities, i would choose equities in a minute that doesnt mean i think the stock market is going up or anything else but if i were going to own a 30minute equity bond or bond for 30 years, i think equity will considerably outperform that 30year bond over the 30 years. You know, i wonder i dont know maybe mike does. Well bring him in for a quick comment here did he feel the same way when the tenyear was at 20 or something . Oh, back in the early 80s . I wonder if he would have picked he was buying stocks at much lower valuations than he is now. I dont know if he was as vociferous as he is right now. If you do a 30year time horizon, its kind of a rigged game for 30 years, almost nobody is choosing between treasuries and stocks for 30 years, either or. In the letter he talks about how over any tenyear period theres more years that stocks are up or down by the way, he also, a fascinating twist on this, is the bet he made whether an index fund could beat a fundtofund and five years through that in 2012, they were so concerned that their treasuries were overvalued and the yield was so low, he said, why dont we just swap this into stocks. Instead of giving 1 million back upon a maturity in 2017, they got 2. 2 million. He put his money where his mouth is. It was a good trade he more or less picked the it was zero coupon treasuries so they almost reached their full value. It was easy to say zooish this is out of whack. Take it all now. The markets have made quite a comeback since the early february selloff jeff cox joins us with some highlights from his latest piece. Thanks, kelly while everyone else was selling stocks, companies were buying. Corporate buybacks stand at 113. 4 billion in february, the highest level in nearly three years. According to trim tabs now, there are three reasons why this is important. One, of course, is that it helped stem the correction tide back in the early part of the month. Two, it signals employees are willing to cut tax cut savings three, in a year of high volatility, companies will be there. The two biggest weeks ever for buyback desks from goldman the estimate is decline 23 to 650 billion this year even though investors have been demanding more cash deployed for growth, buybacks still definitely matter in this market yeah. More than ever, perhaps. Lets talk about this some more jeff, stay there are buybacks fueling this market comeback right now and what should we think about that mike santoli is still with us and we bring in cnbc contributor kenny, who is on the floor of the Stock Exchange in the past when we talked about buybacks we complained it was lack of initiative or imagination by a corporate board. Couldnt they think of Something Better to do with that money what do we think now i think that argument potentially could still stand. First of all, i think it was overstated they were only putting money into buybacks. There seems to be enough money going around, especially with repatriation going around and tax cut. The pool of cash flows accessible by companies and the repatriated cash leaves money left over for dividends, buybacks and all the rest. I think its important pointing out that as a value of the percentage of the stock market, were nowhere near the highs of stock market volume. That shows in the mid2000s, companies were buying back a much higher percentage of the stock market its still a relevant factor, about 2. 5 market value per year at this pace. It makes the overall amount look very small, even sew i mean, are we talking about less than 1 of the market cap . Its not no. Its 1 per quarter. Essentially its 2 , 2. 5 of annual buyback volume. That adds up. It adds up. Its comparable to the amount of cash coming out in the form of dividends. I just dont think its something thats truly driving the market it might even have more of a psychological impact on v investors. Theres an idea theres aid price sensitive buyer in there with you i love that analogy equity qe. There have been incidents of companies doing a buyback and they dont carry through all the way. Sometimes. Kenny, what do you think of all this especially what happened a couple weeks ago, companies certainly want to take advantage. When those stocks on those days got so dislocated for reasons beyond really anyones control is when they take advantage because it makes perfect sense theyre in the market anyway when they see the price of their stock get arbitrarily dislocated, they want to take advantage of that. I think its a great sign in terms of what the companies are saying about houd theyre using some of their cash when they have the right opportunity but i agree. I dont necessarily think thats completely supporting the market at all because as mike point out, its a small overall, a small percentage it does send the right message to the market and to shareholders that companies are willing to stand there. Hang on for one second. Im coming to you. If we put the chart back up for one second, its consistency is fascinating were talking about a market that appreciated in value but yet that chart is almost flat line going back to buffett when hes asked about corporate buybacks, his answer is, tell me the price. Doesnt seem like price is being taken into consideration here. He had a very interesting point during that conversation with becky when becky asked him whether hes considering buybacks of course, they had that big pile of cash they dont know what to do with. He said, yeah, if we ever get down to that 120 threshold, we would do the buybacks as opposed to a dividend. Goldman pointed out in this note as well, they have their basket of stocks they watch the basket of Companies Investing through cap x and hirings are performing better than companies that focus on buybacks and dividends thet also point out that theres going to be a lot of cash pumped back into the market this year and big double digit increases both for cap x and for and for m a. Theres just going to be a lot of cash flooding the market. I think the buyback issue with the correction, i think it did help stem the correction tide. But i wouldnt argue its juicing the market completely. Someones buying back their shares right now speaking of juicing the market. Lets see, jeff cox, thank you. Kenny, thank you, for stopping by mike stick around here by the way, for more on jeffs article, you can check it out. Its just been posted at cnbc. Com its a great conversation starter. Yes, look at that. Up 380 points on the dow near the highs for the session. New data shows investors put 14 billion in hedge funds in january. That was the industrys best start to a new year in more than a decade, since before the financia leslie joins us. Hedge fund solidifying the rebound in january the industry raking in more than 14 billion last month to put that into perspective, the amount of money hedge funds selected in january is already half of the inflows for all of 2017 it was also the first january of inflows since january 2014 the strategies taking in the most, macro as well as long, short, equity and directional credit allocators say these three strategies have become more popular in a rising Interest Rate environment macro says there could be more distinctions between economies in the world compared to the rising tide weve seen in recent years. Long short equity indicates stock picking will once again be in vogue and directional credit is popular with the changing regime among Central Banks the real question is, after allocating to these strategies in january, how well did they hold up in the correction in january . We should see those numbers come out this week. We were just talking about the bet, who quwon, s p 500 or they picked five strategies. I dont think one made it the entire five years. That was not a good period. In 2007 is when that bet was entered at the top of the stock market and still the stock market over time did outperform. By the way, in that first year, the hedge funds did outperform in the oh, yeah, in the steep downturn, without a doubt. Thats what would happen again i think to its 2. 5 a year so well protect you in the one downturn year. The flows leslie is talking about i think represents a psychology of big Institutional Investors and other allocators saying the market is giving us a lot. Lets get into strategy that might be allweather if were late in the cycle. I was going to bring that up. It flies in the face of the comments we were making in january when we felt like it was the public coming into the market at that time. You know, they are notoriously late in a cycle in that regard here you have the institutional money coming in as well. They were coming in in areas not just riding the stock market theyre looking for ways for people to say, direction appear credit, let me bet on the Companies Going bust as well as those a lot is not just about lets get into the market. Its trying to navigate a market near the highs. Leslie, real quickly, have we seen a sea change in terms of fees have they come down. Oh, yeah. When you look at 07, is it cheaper to get back in these days the days of 220 is gone they look more like 1 in 10. Were looking at about half the fees they were paying maybe before the financial crisis. A lot of people still say those are too high given the returns theyre putting out. Remains to be seen thank you interesting story. 48 minutes left. This could be a barnburner to go into the close here the dow up just off the highs, up 378 points. Everybody is the water. Late last night i checked on japan. They were up almost exactly what were you checking on japan . Just curious. Its my job. We still have 45 minutes to go here and the closing bell is just getting started. Announcer next up, a first look at what rising rates could mean to the spring Home Shopping season which just got under way plus, what Warren Buffett calls one of the worst moves an investor can make right now. This is the closing bell on cnbc, live frothe w m neyork Stock Exchange with kelly evans and bill griffeth. Build and run apps anywhere you like, while keeping your competitors at bay. The ibm cloud. The cloud for smarter business. Today, innovation in the finger lakes is helping build the new new york. Once home to the worlds image center, new york state is now a leader in optics, photonics and imaging. Fueled by strong university partnerships, providing the worlds best talent. And supported with Workforce Development to create even more opportunities. All across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. To grow your business with us in new york state, sometimes, they just drop in. Obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back we have breaking news on the fed. Steve liesman with that story. Thanks very much. Fed governor and vice chair for Bank SupervisionRandy Quarles says hes optimistic and sees higher growth. He says it could raise the natural or call it the neutral rate that could possibly mean a higher path for monetary policy. Hes not ready yet to commit to that he says the economy appears to be in a good spot right now. But fiscal policy looks to give a, quote, considerable momentum to growth over the next years and tax cuts could bring workers back into the workforce and also boost investment what hes saying in his speech, hes waiting to see if the impulse we get on growth is from the demand side, which could create more inflation or the supply side and maybe from greater productivity, which would not really be inflationary its too early to call a turning point on the stronger growth hes seeing but he seems to be leaning in that direction that were in an upward shift in growth inflation weakness, he expects, should fade as tight labor markets show up in wage and wage growth he does caution if deficit spending can have negative economic effect. Thats the first speech on the economy from the new fed chair vice chair for Bank Supervision. Its really important, as you know, theres only three theres the chair, vice chair for Bank Supervision thats it. So far. By the way, before i let you go you no doubt know about this i was just noticing tomorrow afternoon ben bernanke is going to interview janet yellen at Brookings Institute and its labeled as her first time to speak candid i wonder how candid she can be on the day jay powell is testifying. Or so soon. Its unorthodox for the former fed chair to be speping out quite so quickly but you would expect her to show a certain respect to the current fed chairman bernanke is going to interview yellen and then a little later on david wesle, former wall street journal reporter who kelly knows very well and now heading the Hutchins Institute i still think of him as the boss he still makes me shudder. He might ask a couple questions and they might take questions from the odds yens that will be interesting its chockfalcoholichockful of h powell in the morning and bernanke and yellen in the afternoon. Get the popcorn and the gatorade. Are we getting headlines during the show . Were having a meeting after my appearance to determine how to cover we may take some live it depends on what jason wants to do, as you know, kelly. Yes, hes the boss. Steve, thank you very much Steve Liesman there. Could be fun tomorrow. David wessle makes you shudd shudder. The whole crew, they taught me 40 minutes to go in the session. Lets talk about the Home Construction etf falling nearly 5 just this year, so far in the past two months. Mortgage Interest Rates have started to accelerate since early December Pulte group down 13 , dr horton down 12 , lennar down 10 and kb down 2 . Lets get to diana olick who has more on whats happening with housing. Reporter we just got a pretty strong sign of things to come in housing. A drop in sales of newly built homes in january and Mortgage Applications to buy a home also down for the past month. Much of that due to higher Mortgage Rates take a look at where they we want from january 1st to january 31st, up a quarter of a percentage rate. The new tax bill was signed into law and takes away for tax breaks new home sales fell over 7 for the month after falling even more in december new home sales are now down 1 compared to a year ago and thats the first negative annual read weve seen in a while. We also saw the supply of newly built homes rise to the highest in over four years, just over a sixmonth supply here are the two biggest issues for the spring market. On the home builder side, theres plenty of supply, just not affordable supply. And rates moved even higher in february, making matters worse on the existing home supply, well get the contracts later but we know sales are weakening because theres not enough listings not enough affordable listings pretty good on the high end but thats not where the bulk of the demand is. Back to you guys. Thank you very much well see you later. Heading to the close, 39 minutes left in the trading session. Yes, here we go again. Up 393 points on the dow and it is the best performer of the major averages today. Starting to get significant 1. 5 gain there. Better than 1 for the s p nasdaq, russell lagging the group today. As we head to the break, heres a check on Technology Stocks as weve seen, the nasdaq has intel, alphabet, microsoft, facebook intel up nearly 3 today the chips have been popping up up next, he increased the price of a livesaving drug by 5,000 were talking about Martin Shkreli could be facing more prison time after a new ruling make something for dinner. But some of us make something much more. Mom would be proud. With blue apron, any night is a chance to see what cooking can do. They didnt want us to talk over that but its hard to do when were over 400 plus, the high for the dow tonight its the rieturn of american greed and Martin Shkreli is the focus new developments in that case . Yes, its about the securities fraud case, not what made him famous, raising the drug price 10. 4 million total called into fraud which could influence the length of his sentence he was found guilty three of eight counts, including securities fraud the case was complicated because shkrelis investors made back it is money and then some so his attorney argued the judge should determine the total losses to be zero. After a hearing on friday where he sported a new beard he had grown in his five months in prison, the judge sided more with the government prosecutors saying in her decision today that, quote, the evidence does not support and, indeed,