>> if it holds. >> -- it could lead to a rally of sorts, and that's exactly what's happened here in the last hour here. >> we have a sense this was coming from the european session. you would have gone through the news flow about aid for banco espirito, some of the geopolitical stuff that's extremely troubling. things would look different today. not the case. even oil's struggling to catch a bid. investors are awaiting a key earnings report from aig, due out in about an hour. it has a new ceo coming in less than a month and is trading at idiscount to peers. the numbers could definitely move the stock. we'll have the information first and your analysis right away. all right, also, the president taking more shots at some of his favorite targets, namely wealthy businesspeople. i mean, if you've been watching television today, you know what he said. if you haven't, then you will hear more of those comments where he told ceos essentially to stop complaining. plus, we'll take a closer look at the president's relationship these days with the business community. >> and so, the dow is up 67 points this hour, back above 16,500. the nasdaq now up 0.7% or 30 points, and groupon an out-performer there. finally, the s&p 500 adding 13, back up to 1,938. hard to believe we were just talking about s&p 2,000 a couple weeks ago. >> wasn't long ago. let's talk about a lot of things in our "closing bell exchange." peter andersen from congress wealth management, jordan waxman from hightower, hsw advisers, anthony chan from chase is back with us, cnbc chief international correspondent michelle caruso-cabrera is here with so much news from overseas affecting the markets, which we'll start with in a moment here. and our rick santelli is in chicago. michelle, did we really think they were going to let that portuguese bank go under? >> well, they kind of did, right? they did a bail-in. they're going to punish the shareholders of banco espirito, punish the junior bondholders. remember, this is progress for europe. years and years went by and they didn't do this kind of thing, just did bailouts. those folks are bailed in. just google it. they got punished. if the situation occurred next year, they would punish senior bond-holders when a new law goes into effect. but the market absorbed the banco espirito situation very well because i think it stuck with the guidelines that the european union said they were going to do when it comes to a bank failure. they're going to use some public money to recapitalize a good part of the bank, but it looks like it will be a quick payback if they can turn that thing around. if they've gotten this right. that remains to be seen, but if you can see the market reaction in portugal today, actually did just fine. the portuguese bond market was doing just fine. we did see weakness again today on a completely different note, on germany, because there are still concerns about what impact the sanctions with russia will have on germany, because those are probably the two -- the one economy in the west that's most connected to russia would be germany. >> oh, sure, and they were warning german growth could be flat this quarter after being a pretty strong performer in the quarter before. so, clearly having an impact. and rick santelli, i just wonder, as this happens and so many high-profile investors we know have filed into the trade in europe. what do you think they do? do they leave? do they put their money back to work in the u.s.? >> that's why i've always questioned, whether it's emerging markets or europe. in this day in age we live in where central banks and liquidity and debt are so high profile as part of the solution, almost, that there is a risk. and i think when i look at the dax at 9,200, if you look at that chart, if we start to get under 9,000, i mean, even a weekend armchair technician would see that that isn't going to look good. so, i know that's big, a couple hundred points, but definitely, the dax is what you're supposed to be watching. as for the big story, and we're so glad we have michelle to keep us in the loop here -- i understand that these things are going to work out. i'm a firm believer. there's no fat tail episodes anymore. everything's going to get taken care of, but all this comes at a price. and i still say that's why the treasury yields are where they are. the price is less in the future because we have to worry about taking care of the present. >> speaking of which, anthony chan, the labor reports last week suggested continued growth, but it seemed to spook the stock market. are you sensing that the stock market will be a troubled spot when the fed really does get under way with their interest rate raising at some point? >> i really don't think so, bill, and i'll tell you why, because if you look at the average increase in the fed funds rate in the first 12 months, its average since the '80s is about 1.7%, and i don't think we're going to have a much more aggressive federal reserve. let's not forget who the fed chair is. we're going to get a friendly fed, whether we can justify it or not. that's the reality of the situation. and i think rick is right, we have friendly central banks and friendly policymakers, and i think that's the reason why this situation in portugal is going off with almost no glitch. yes, they're trying to minimize moral hazard, but they're not eliminating it. and to some extent, i think the financial markets like that. they like the fact that someone is minding the store, the safety nets are out there in force. >> and jordan, we got some decent news in terms of fundamentals from the senior loan officers survey from the fed a little while ago today. it looks like there is more demand for loans out there and banks are continuing to ease credit standards a bit here. >> i think that's true. at the same time, banks are lightening up on their inventories of bonds so that the supplies are pretty tight. there may be some trouble ahead in credit markets if there's a dislocation in any part of the credit curve, but by and large, there's an appetite to lend money. i'd also point to the fact that it looks like the second quarter is going to show over 4% revenue growth in the s&p 500 companies and almost 8% earnings growth, which is the best in almost 2 1/2 years. that is topline growth. that is what economists love. and that's well in excess of the gdp numbers. so, i think that goes well for how companies are doing. they're flush with cash. they're making acquisitions. they're buying back shares. and so, if you're a stock investors and you're buying a portfolio of multinational companies, whether they trade on the dax or on the u.s. stock exchange, you're buying good quality companies at attractive prices, and hopefully, holding them for the long term. >> peter andersen, a lot's been thrown at the markets here lately from geopolitics to earnings to the economic data coming out here, and yet, the most that we see in terms of a pullback is 2% to 3% in the past week. and now we're higher again today here. what's it going to take to get that correction we've all been talking about ad nauseam? >> exactly, ad nauseam is the key here. but i think what we'll see is when the fed finally has to take action -- you know, we've had a lot of dress rehearsals so far, and i would say it hasn't gone that smoothly, bill in terms of the way the markets will react. and i think yellen has to subscribe, you know, only hawks are going to get to central bank heaven, and she has to turn a little bit more aggressive, and i think that's when you will see, if any time, the 10% correction, because it will be a little bit rough. and i think the main challenge for all of the investors out there is to realize you've got to brace for some rough running when she finally turns that corner and we finally hear some real language about raising rates and that the rates are actually raised. i think you will see some volatility then. and maybe with a 10 handle on there. but still, remember, keep focused. >> what were you saying about hawks and central bank heaven? what, peter? the hawks are going to heaven? >> there is an old adage that says only hawks go to central bank heaven. so, in other words, if you're a fed chair, you want to be fairly aggressive with raising rates. history shows that those are the ones that are written up to be very, very successful in enforcing economic policy. and so far, we've heard a lot of terminology about labor market slack, those kinds of terms that kind of favor being a little more kind -- >> some argue she's an employment hawk, but that's for another time. >> not to belabor it, but where do doves go? >> big cry. >> to europe. >> i'll let you figure that out. >> to europe, rick? is that what you were saying? >> yes, they'll go to europe. >> go on tour. >> they'll welcome them with open arms. >> michelle, is this story done? >> no. >> is the market -- nothing left to worry about now? >> maybe portugal's done, but i think the bank in portugal, banco espirito santo to be emblematic because we are coming up to a big event in europe where they will reveal what are the quality assets in the european banks, and we think there are a lot of problematic assets in european banks. it's why we believed among leaders within europe in the financial community that there are other banco espiritos out there and we're going to find out what they are, where they are as we go through this process, as they're forced to unload these assets. because remember, we're going through a big shift in europe where it used to be country by country that controlled the banks, and now it's going to be the ecb that's going to control the banks that's supposed to eliminate a lot of politics, kill a lot of banks that have been allowed to survive because of their connection to politicians. but that's in theory not going to happen anymore. so, there's going to be days of reckoning coming soon. >> yeah, and this one's so interesting, michelle. it's fortunate that portugal had this leftover bailout money sitting aside they could use to recapitalize the bank, but the precedent here is still one that i'm frankly surprised markets aren't more troubled by, because if there's, you know, an additional need, if there's another bank in portugal or elsewhere, the extent to which they can rely -- >> the taxpayer money is what you're saying. >> exactly. over the weekend when i heard the news came out, i figured it would have more of a negative impact, but perhaps it was already priced in or people thought this would be an isolated case or maybe because senior debt-holders are protected. >> yep. >> if you want a ten-second explanation, they were very, very pressed to say there's no taxpayer money here. we're actually using the equivalent of an fdic fund. >> right. >> but the fund is really new, so there's not that much money in it, so the state is going to lend them money and the state happens to have this leftover money. >> that's what i mean, yeah. >> and don't worry, when we sell the bank, we'll pay it back, which is a different attitude from several years ago, when it was, how much taxpayer money do you need? take it. here we go. >> you're on your own. right, exactly. >> so, it's different. >> by the way, before we go, while we're in the five box here, show of hands, anybody go to the university of syracuse? anyone? >> it's syracuse university. and it's also the number one party school in the country. >> just named number one party school in the country by "the princeton review." >> i was university of chicago, which was dead last, so -- >> we should have all gone there, i guess. >> yeah, yeah. >> lucky you, jordan. thank you all. see you later. that was just a heads-up for all the parents out there who have kids who are looking at colleges. >> my own parent did go to syracuse university, so i don't know what that means. mom, we have some talking to do later. 50 minutes to go here until the close and the dow's up about 72 points, the s&p 13 and the nasdaq 31, as mentioned. groupon rallying ahead of its earnings report tomorrow, which will hit after the bell. coming up, td ameritrade has surprising data on individual investors' behavior last month and that's next. did they buy market dips or sell into it? we'll find out. also, next, michael kors tripping on wall street again, wiping out all of its gains for the past year. two crows will discuss whether you should be buying michael kors this summer or whatever. we'll get to that when we come back after this. stay tuned. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. we stathat the kid on thehought back of the bus might have a song that he has in his head but he just can't get out. with the technology of cloud, we change all that. i can sing something into my device, up to the cloud it goes, back down it comes, sounding better. we break down the walls of creation and we give music creation for the masses. ♪ ♪ unlock the creativity in anyone. with the ibm cloud. the ibm cloud is the cloud for business. machines will be sprayed to be made. and making something stronger... will mean making it lighter. one day, factories will work with the cloud. one day... is today. welcome back. dow's now up about 76 points, almost 0.5%. the s&p 500 and nasdaq doing even better, up about 0.7% each. this as people are sorting through the rubble from the declines that we saw on thursday and friday. a sharp decline that saw the dow, in fact, in the last two weeks shedding 600 points. but today, at least right now, adding back 80 on the session. meanwhile, have you seen michael kors? oh, dom chu is there! dom chu, hello there. what's going on? >> all right, we've got a lot of movers. let's start with cardinal health, moving lower after the health care services company said its fiscal fourth-quarter sales declined due to the continuing impact of its expired contract with walgreens. so, those shares are off session lows, down nearly 3%. now, disney's moving higher as its "guardians of the galaxy" marvel franchise movie soared past expectations with a $94 million opening weekend at the u.s. box office, setting a new august record for films. amgen also gaining ground on news its blood cancer drug met its main goal in the late-stage trial, shares up nearly 3%. and let's end with michael kors, falling after the company said it expects margins to shrink for the year as it invests more to open stores across europe. kors down about 6.5%, kelly and bill, on today's trade. back over to you. >> thanks, dom. welcome back. >> yeah. good to see dom again. is this an opportunity for investors to get in on kors or is the company head ed the way of coach? >> dorothy lakna from topeka said it reiterates her buy rating while carl nirth thinks this stock is in the throes of bullish to bearish reversal. dorothy, michael kors was supposed to be the company that was taking all that market share away from coach. i mean, they were doing so well. what happened? what's going on here? >> well, i think they ton do so. they reported a much better-than-expected quarter. we were at 83 cents, they did 91. they beat by more than they did in the last quarter and saw very good comp growth across the regions, across the channels of distribution. they raised guidance. i'm not sure what more you could want. >> yeah. >> and i think in terms of coach, you know, which has a multiyear transition in place right now, it's going to take time for them to regain market share. i think kors is still the place to be. >> which is interesting. look, if the shares were stilg up 7% premarket, it seemed like the narrative people were initially going with. >> yes. >> and then they went through this. maybe it's the inventory, maybe it's the discounting line in particular that has people concerned here. >> carter what do you think? why do you think there's a reversal coming here? >> that's just it. the news is so good, and yet, what's the stock doing? it's all about not the news but the price action. and to be indicated as high as it was in the premarket all to then give ground and go negative, this is the second drop in gaap in a month and a half. 10% of the floats turned over. and it's not just kors, it's numberbury, it's swatch and not to mention ralph lauren and coach. meaning a lot of apparel and accessories companies are struggling, and this is a high flier that's gone from 10 to 100 and is now showing signs of real distribution. and all those things today, they were great! so, why is the stock down? >> yeah. is the market trying to tell us something? >> well, the market clearly sent a signal today, but i think the results indicated otherwise. i mean, given -- >> is this as good as it's going to get, maybe? >> i don't think so. i think one of the things they talked about on the call is a lot of the concern before the call started was on markdown exposure and increased markdowns versus a year ago. the company said, and our research actually validated that point, point blank that they had no more markdowns than they did a year ago, you know. more markdowns could certainly point to maybe a deterioration of the brand. that's not the case. and they did also talk about investment spending. that's always a term that worries investors. but i think the investment spending clearly is to drive revenue. if you drive more revenue, you're going to drive more earnings. they also addressed the operating margin issue. operating margins they've said consistently will not stay at 30%. they hit 30.5% last year, but they've said 128% or 29%. >> people say they have telegraphed this, you would expect the numbers to soften. antidotally, what if kors isn't so cool because it's gone so mainstream so quickly and is so much more affordable these days? >> when a great growth stock shows any signs of faltering or there's some compression of margins, it can be ruthless, and we're seeing that kind of action today. this is a dangerous place to be. >> a classic momentum stock. and when the momentum players sense that there's a little crack in the armor, right? >> that's right. we were all listening to the call today. >> they all flee. >> they've heard the data and they're voting with no, sir shares right now. >> where's your price target, carter? >> i think $70's fair, $68, $70. >> you don't have far to go after a day like today. do you have a price target? >> we're at $117. >> $117? >> yes. >> you're going to hang on to that? >> we're certainly sticking to that. >> you must be buying it hand over fist right now. >> well, i think when you transition from momentum to growth at a reasonable price, there isn't a lot of growth out there in retail land in general. this is a lot of growth at a very reasonable price, so yeah, we will be buyers. >> is this your favorite in this category? >> yes, it is. >> you wouldn't buy any of the others carter was mentioning? coach is a special situation right now. >> coach is a special situation and, again, i think the transition's going to take time. we cover tiffany. we love that name as well, but that stock has held up a lot better than some of the others here. so, i think this is a buying opportunity in kors. >> carter, just to be clear, you like the name here, even though your price target is $70? >> no, no, no. i don't like kors at all. i think we're going considerably lower. i just think the path to perhaps even lower than that, $50, passes through $70. >> got it. okay. got it. thank you, guys. >> thank you both. good to see you. important stock there. >> 40 minutes to go. the dow's up 88 points, 15 on the s&p, hugging that 1,940 and 14 points up on the nasdaq as well, 4,390. >> how many times have we been scratching our head over the last few years wondering, why is this market coming back all of a sudden? and here we go again. >> final hour. also ahead, how do you solve a problem like marissa? that's the title of a forbes article questioning marissa mayer's leadership and whether her decisions are too costly and taking that company down the wrong path. the author of that article voices his concerns coming up. and later, is the fed behind the curve when it comes to inflation? our sara eisen's going to round up what the nation's top ceos are saying. and for a lot of them, it is, yep, absolutely. don't miss it. untry. thank you for your sacrifice and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. e financial noise financial noise financial noise financial noise over 20 million kids everyday in oulack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy, affordable, kid-inspired, chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working. welcome back. look at this. rally mode today, and that's just been in the last hour, really, that we've seen many of the gains we're seeing right now. the dow's up about 80 points. we were up about 88. moments ago, the nasdaq up 36 points, a gain of .8%, so pretty good gain there and the s&p up about 18. >> about 35 minutes to go and we turn our attention to yahoo!. the honeymoon period for ceo marissa mayer may be winding down here. a prominent defender changing his tune, penning a highly critical article of the ceo in "forbes." eric jackson, who is long yahoo! shares, is writing that mayer's made a number of costly errors since taking over, causing numerous problems for the company. >> so, for more on if investors should be worried about the company under her reign, let's bring in eric jackson along with tech crunch reporter colleen taylor, who is less critical of marissa mayer, we should say. eric, what changed your mind? she's celebrating her second anniversary and you're sort of fed up with her leadership. is that the idea? >> well, i mean, i've been a defender of hers early on, and i think in the first six months of her tenure, there were lots of obvious signs that she had improved morale at yahoo!. but if you step back and look at what she has accomplished, she has spent $2 billion on various acquisitions that have really destroyed value in the eyes of shareholders. it's been a huge wealth transfer to vcs. shareholders really have nothing to share for it. and probably the biggest problem is just sales. sales have been on sort of a terminal decline, and they've gotten worse under her watch. they were made worse because she appointed this guy named henrique decastro as her coo and head of sales in what was a disastrous move, and i feel she's really lost the trust of a lot of the large advertising agencies. >> and you're concerned as well about the size of the staff that's still there compared with other companies in this space. and colleen, you know, to eric's point, at the end of this as well is basically that she's about to get a major cash injection from the sale of these ali baba shares. should investors be worried that this cash isn't going to be spent prudently here? >> yeah, one thing that eric says here is that basically what we've seen is m&a for the sake of m&a, and i completely disagree. i can see how it may look that way, but remember, when marissa mayer came on to yahoo! there were 60 mobile engineers at the company. in this day in age, that's ridiculous. under mayer's leadership, now there are hundreds of mobile engineers at yahoo! more than 500 at last count back in may. so, all of those m&a transactions have really been about bolstering their engineering talent, which is incredibly important in this day in age. you know, yahoo! didn't get into the place that it was in a 24-hour period of time and i don't think that it's going to turn around in 24 months, but i don't think it's fair to say that it's not in a better place now than before she came on. i think it's definitely in a better place now. >> eric? >> well, i think, you know, past behavior is the best predictor of future behavior in my experience. and so, why should yahoo! shareholders believe that after wasting $2 billion in acquisitions, that suddenly, the next $2 billion or $3 billion she's going to spend post ali baba are going to be any better? i think there's a pressing need right now for shareholders to step up in the next two months, because we expect the ali baba ipo to come out just after labor day. the cash is going to be in the yahoo! bank account and marissa will have the opportunity to spend it. i think there's a better path forward for yahoo! shareholders, which is to lobby for either ali baba or softbank to buy this company, because one of the biggest discounts embedded in yahoo!'s stock price today is an assumption by wall street that when yahoo! sells these stakes in these companies, these asian companies, they're going to have to pay a huge tax bill. there would be tremendous tax savings if one of those two companies bought yahoo and returned a lot of the cash back to shareholders. >> eric, i will say, all your points are very valid, but if you look at the stock price, i mean, it's all about results. i mean, you have to look at the bottom line. that's the report card for a ceo. and you look at the stock chart going back two years, we just showed it's up 200% in the time marissa mayer's been ceo of this company, so what's the complaint here? >> well, to that, i say yahoo's management and board really needs to send a thank-you bouquet to alibaba. two years ago it was valued at a $20 billion company. yahoo! has a 23% stake in a company that most people think will be worth $300 billion. when you subtract out the value of the alibaba stake, what they pay in taxes, it seems the only core part of yahoo! that marissa is responsible for has a negative value. so, there's an assumption by shareholders that when mayer gets her hands on the cash, she's going to waste it. >> all right. wish we could extend this conversation, but we've got to go at this point. thank you both for joining us. appreciate it very much. >> thank you. >> thanks. heading toward the close, about 30 minutes left in the trading session. the dow up 80 points, so we've bounced back a bit from what was a tough week last week. the s&p had its worst week in the last two years and is trading higher today with a gain of about 15 points. is the fed ignoring some obvious signs of inflation? some top companies are raising prices. sara eisen rounds up the action. plus, we'll discuss what could happen if the fed is behind the curve. and then later, the government is moving closer to banning inflight cell phone calls. can't happen soon enough. we'll be taking a poll. sorry, i showed my hand. >> frame's next, please. >> in the next hour, we'll show you whether flyers want to make calls from 30,000 feet or if they're in favor of this ban. cnbc.com/vote. chime in in just a bit. f purchas for my business. and i get a lot in return with ink plus from chase. like 50,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards, even cash back. and my rewards points won't expire. so you can make owning a business even more rewarding. ink from chase. so you can. welcome back. the stuff you miss during commercial breaks. oh. the dow up 85 points right now, just off the highs of the session, back to 16,578. nasdaq's leading the way to the up side with a gain of 36. and the s&p's doing pretty well after that tough week last week, up 15 points. speaking of moving higher, forget what the government data says, ceo after ceo this earnings season has been talking about rising prices. >> sara eisen has also, and she rounds up their comments for us. sara? >> we're calling it inflation nation. take kraft foods' conference call last week "beef, turkey and pork prices for our cold cuts have continued to increase and are at record highs as we speak." so, kraft raised prices on cheese between 12% and 15% and oscar mayer meat prices 10%. and from nike, "we expect average selling prices to increase driven by our ongoing focus on optimizing prices and driving our product mix to premium." that was ceo donald blair on the call a few weeks ago and nike has raised prices. for hershey's, "commodity spot prices for ingredients such as cocoa, dairy and nuts has increased meaningfully since the beginning of the year." hershey raising prices 8%. mars, the competitive, quickly followed. mostly it is food prices. sweeve we've seen coffee companies as well, but basically across the board, tobacco companies, homebuilders and other pockets of the economy, higher prices. for the first time really in years. whether it's driven by higher commodities costs, whether it's driven by new, innovative products, it is notable that companies are feeling confident enough with the consumer and with the economy to start doing this, because as i mentioned, first time in several quarters we've seen anything like this. for netflix and chipotle, it's working out and it's not hitting consumer demand. it will be interesting to see whether it starts to hit some of the food and more staples companies, because the low and middle-income consumer has been facing some tough challenges. >> there's been a long-running discussion when we talk about whether or will this show up in the overall inflation numbers about goods prices and food prices, sara, and then services prices. and the extent to which what we're seeing here is ultimately going to be sustainable. are we going to see the consumer facing higher costs or not? >> and whether it trickles into wages, which is obviously the big question right now as well for the federal reserve and for some of those measures. so far, we haven't seen it really in the cpi, the consumer price inflation index, or in the pce, which is what the fed watches, but that will be a good question coming forward. it goes from companies to consumers first in this sort of realtime data. we'll see if it trickles on to the broader gauges. >> let's talk about -- sara, stay right there. we'll talk more about whether investors should be concerned about inflation right now and whether or not the fed's behind the curve. >> our steve liesman joins us now along with rick newman from yahoo! finance, and we remind viewers, cnbc and yahoo have a content-sharing agreement. all right, rick, what say you here, inflation nation? >> not yet. i mean, we're not seeing it in the final numbers, the cpi, as you pointed out, but we got an interest data point last week, the employment cost index, sort of professional. like, amateurs talk about money printing and professionals watch labor costs. i think if we're going to see signs of inflation, we're going to see it in labor costs first. and we did see a sign that labor costs went up in the last quarter. so, this was the biggest jump since i think the first quarter of 2008. maybe it's a one-off, maybe it's an anomaly, but if inflation isn't going to happen, that's what we'll start to see. we'll start to see little inching up in labor costs. and then the next question is, will companies be able to pass those costs on to consumers? we're not at that point yet. the things you mentioned, food, that's basically a bunch of one-offs, drought and things like that. labor costs are the thing to watch. and we did see a little change there recently. >> steve, what do you think? >> i think it's something to watch, but i don't think there's tremendous fear for it right now. the big issue, the big think on this is that labor's importance in the inflation story is coming down. if you look at what's happened to labor as a percentage of productivity, it's about 10% below where it normally would be. so, there's a lot of room for catch-up here when it comes to wages. the second thing, if you look at the second chart that i brought here today, what you'd see is that labor's share of income of the total slice of the pie is declining. what does that mean? it means that the economy overall is less sensitive to movements in wages. this is an idea that larry summers has talked a lot about. it's something that macro advisers wrote about. by the way, this chart here is very good for stocks. if that's true, it means capital's getting the part. if that trajectory continues, then you could maybe change your we bets on where the s&p's going to be five and ten years from now and where the fed's going. >> steve, isn't it possible that part of that income is coming from government transfers? would that be included? in other words, if people are on subsidies from the government, whether for, whatever reason, would that be reflected in this chart? >> no. that chart is just private-sector wages. >> so, the rest would be their benefits? >> what's not in there is benefits. >> okay. >> but it doesn't really change the story all that much. so, what that means, by the way, is not only a higher s&p, it would also mean, by the way, a lower fed funds rate at the end of the day because the equilibrium fed funds rate would be lower. >> rick, i've always tried to make the distinction between what i call statistical inflation, which is what the government reports and all those indices and things, and anecdotal inflation, which is the prices we all pay and we all sense and people are always complaining, prices are going up, whether it's pharmaceuticals or the price of bread or gasoline or whatever it is, but then the government comes out and says, yeah, inflation's under control right now. how do we reconcile that? >> well, there's a psychological factor. people notice prices that are going up much more than they notice prices going down. and for every increase we've had in gas prices, which by the way, are coming down little bit right now, and food prices, we've got a lot of things that have been coming down in price -- computers, food -- excuse me, clothing, furniture. you know, these maybe are not things you buy every day, but these are things that are part of your budget, and these are coming down in price. just think of your smartphone. >> i wonder, and sara, steve, from digging through on this as well, it's actually a lot of companies, you're seeing lower costs on the i.t. side but a lot of consumers facing inflation pressure. >> yeah. i mean, companies are saying it. if you look at corporate earnings across industries, you will see more talk of pricing, whether it's an effort to boost the bottom line, that could be. you saw reynolds american. i know we just spoke to the ceo talking about lower cigarette volumes but actually higher profit margins and a beat on the bottom line because they're raising prices. so, the fact that they feel confident enough to do that i would say is a bullish signal on the economy and it's something we haven't seen in quarters, and that would suggest that it's more than just food and commodity input price inflation here. >> if nothing else, steve, that's a positive for the economy, if companies have pricing power, though, right? >> let's not forget that the express intent of the federal reserve is to have a little bit more inflation than we've had. we've been running at say the 1% level and they want to get to 2%, so that's the intent of it. it's entirely possible that in the process there's some overshoot and there will be some concern out there. but i would watch the ten-year. the ten-year note is the place where the market's abiding concern with inflation should be most fully expressed. and you don't really see it in there. i think what sara's reported is very, very interesting. and it's a question to me as to whether or not a couple of things happen. first, those price, intentions to raise prices, do they stick? are they able to hold on to them? are they otherwise competed away? do they find that if they rise the rate of the candy bar, they'll go to a competitor who won't raise their price or eventually roll it off? that's one. two is again, this notion of substitutions. do they go from one place where prices are rising to a place where prices are not rising? another thing to goes into the factor is health care costs. one of the reasons that's kept a lid on that is that health care cost inflation is down and down quite a bit relative to what it was. prices are still rising, but that has been something that's buoyed the entire index. >> all right. got to go at this point. thank you. rick newman, good to see you, thank you very much. steve liesman, sara eisen, as always. see you later. by the way, look at the market, almost up 100 points all of a sudden. dom chuck choou has a "market flash." >> lots of green on the board. momentum stocks are on the move, helping move the arrow to the green side. priceline, amazon and intelligentesla up 2% to 9% on the day so far. so, if you're looking for where some of that action is, look towards most of the more volatile name, especially some of the big-cap, large-cap momentum-type names, guys. back to you. >> thank you, sir. we're heading toward the close on a rally day. look at this, up almost 100 points on the industrial average, and a lot of this has happened just in the last hour, hour and a half. the s&p is up 17 points and the nasdaq up 40-plus points right now. coming up, speaking of bargains, who doesn't love a summer bargain? and this time, we're talking about stocks. seema mody's going to run through some of the names beaten down last week that now may have some upside potential. >> and are being met right now, as a matter of fact. later, the nation's media giants post results this week, but two will draw a hyper level of intention, namely fox and time warner. more on that saga just ahead. also, be sure to catch our interview with disney's ceo, bob iger, tomorrow. we're going to hear from him before the analysts do about earnings when they hit, the economy, markets and a whole lot more. we'll be right back. you used to sleep like a champ. then boom... what happened? stress, fun, bad habits kids, now what? let's build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. introducing the sleep number bed with sleepiqtm technology. it tracks your sleep and tells you how to adjust for a good, better and an awesome night. the difference? try adjusting up or down. you'll know cuz sleep iq™ tells you. only at a sleep number store, mattresses with sleepiq start at just $999.98. know better sleep with sleep number. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. welcome back. 15 minutes to go here and a markedly different tone, certainly from the end of last week and even from this morning, as the dow's now up about 88 points. we almost hit a triple-digit gain there. the s&p 500 and the nasdaq up roughly 0.9%, so a pretty big move for a monday. >> and we know that the s&p put in its worst weekly decline in more than two years last week, but we're wondering whether this summer's sleepy dogs will turn into soaring swans. hurry, seema mody, because it's starting happen right now. >> we looked at the biggest losers in last week's sell-off to see if they're now trading at an attractive valuation and asked analysts if these stocks are good buys. first is eastman chemical. the stock is down on the year. it lost more than 10% last week. the maker of chemicals, plastic, synthetic fiber, saw second-quarter profit jump 11%. keybanc sees strong improvements in the visas business going forward. pilgrim's pride another to watch. shares have been on a tear but got hit hard in last week's sell-off, trading below its historic average. analysts say pilgrim has stronger-than-expected chicken pricing and lower than expected grain costs. pulte group is below its average of $17. if you're betting on recovery in the u.s. housing sector, this may be a name to watch. kelly and bill? >> seema, good stuff. thank you. and yeah, about 13 minutes to go here. >> 13 minutes left and the dow's up 90 points, so we'll see if this rally continues here. i mean, this is very typical of this bull market we've been in here. very quietly has just come back again. you know, we've come off the worst week in two years, and all of a sudden, we're in rally mode again here with the dow up 90 points. coming up, president obama saying to ceos, stop complaining about regulations and start taking greater social responsibility. it's one of the top stories on our website. our panel will weigh in. we'll play you reaction from several ceos on cnbc throughout the day and we'll be back in a moment. what if there was a credd where the reward was that new car smell and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! you've had your first accident. now you have to make your first claim. so you talk to your insurance company and... boom! you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? 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[cheering] the fastest in-home wifi for your entire family. ten minutes remaining on what has turned into a rally monday here for the major averages in the stock market. the dow up 91 points, the nasdaq off the highs. it was up 40 a moment ago, and the s&p up 16. joining me to talk about today's market action, we've got aaron gibbs from s&p capital iq and bob pisani. what happened here? i laid it to cashin earlier. he said, once we get back to the morning's highs, if we can hold that, then we'll see a rally and that's what happened. >> well, brent finally decided to rally a little bit after days going down. and so, energy rallied. that's a big reason why the dow's up late in the day. across the board, if you look, cyclicals are up. material's up 1%, tech's up 1%, financials are up. so, all those things -- goldman sachs is contributing. all those names are in the dow and that's what's kind of moving things up. it's a fairly broad rally, but energy's a leader. >> and earnings have helped? >> yeah, earnings. this is turning out to be one of the best quarters since 2011. so, earnings are getting close to 10%, double-digit growth, which we haven't seen since 2011. and revenues are at 5%. so, all those nay sayers used to complain about no revenue growth, we've got it. >> the financials were lagging, though, right? >> yes. >> i mean, if you took that out, you definitely had the 10% earnings growth in this quarter. >> yeah, financials were lagging going in and they've actually had some of the highest, the third highest surprises. so, they have done better than expected, but they're still the ones that are dragging us and they're going to continue to drag us for the next 12 months in forecast. >> how much of this is the relief rally that the portuguese bank got bailed out and life goes on? >> well, you get things a little calmer. you get the ukraine a little calmer. there's still obviously turmoil. but i think it was a big step for them to deep with the portuguese bank problem. look, the government did have to step in. they did provide a loan -- >> that may be a new blueprint now, right? a precedent may be set -- >> right, and the moral hazard is definitely still there, but at least you had subordinated bondholders and you had shareholders share in the losses. at least there is a bail-in process that started. i think it's at least the start of a precedent. if you get a really big bank blowup, i think the senior bondholders are going to get dragged into other kinds of bank situations. that's a good precedent to set. that's progress. there's still moral hazard, but it's progress. >> all right. we'll take a break and come back with you two. we have earnings to talk about at the top of the hour with erin and bob. when we come back, we'll have the closing countdown for this monday, see if this rally continues. then, aig expected to post results just minutes after the bell rings. we'll bring you those numbers the second they hit the tape and get you the highly anticipated quarter for the insurance giant. see how it does. the guidance especially is going to be critical for this company as it continues to march higher. you're watching cnbc, first in business worldwide. ♪ [ woman ] if you have moderate to severe rheumatoid arthritis like me, and you're talking to your rheumatologist about a biologic... this is humira. this is humira helping to relieve my pain. this is humira helping me lay the groundwork. this is humira helping to protect my joints from further damage. doctors have been prescribing humira for ten years. humira works by targeting and helping to block that contributes to r.a. symptoms. humira is proven to help relieve pain and stop further joint damage in many adults. 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[ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. about 3 1/2 minutes left here. this is the day for the dow, up 23 points on the open, and then it sold off. we were down 46. we thought, well, okay, this is going to be the trading range for the day, but i keep pointing this out. art cashin said if we get back to this level here with that gain of about 23 points, we could see a rally here, and that's precisely what happened around 2:00 eastern time, even before then, and it's taken off since that time. we were up 88, almost 98 points for a time. we're just off those highs right now. the ten-year today was very volatile last week. it's been lower today. we've been hovering below that 2.5% level on the ten-year note. now we get ready for earnings tonight from aig, the insurance giant, and that stock has been up 1% at $52.60, which brings us to erin gibbs. what are we expecting from aig right now? >> we're looking for decent numbers overall. the financials have been lagging overall across the market, so we're still expecting a market perform, but overall, financials are doing much better. and those rising interest rates -- >> well, that's the thing is interest rates are not rising all that much. you know, the ten-year's still hovering around 2.50 below and that's got to put a crimp around guys who need a steeper yield curve. >> we expect rates to rise at the end of q-1 or q-2. now, the markets trades earlier than that, so by the end of the year, we expect that pop. we hope that the rates increase much more slowly but steadily, because we are still seeing a lot of the subpar recovery indications. we don't want it to go up really fast, so we expect financials to putter along. >> did you notice regional banks have been down for days. they're down again today, regents financial, snoevis -- >> they've been the darlings for a while. >> and they haven't gotten any traction in the last week because interest rates aren't going anywhere. even the little brief scare we had last week, they didn't pop that much. so, look, i am not worried about that. the thing that would kill this rally, two things. too much bullishness, number one. i still don't see too much. i see it rise 'but i see enough skepticism. and secondly is a rapid rise in interest rates. we go from 2.6% to 3.0% on the ten-year gradually over the next six months with an improving economy, that's fine, but if we go from 2.6% to 3.5% in two months, forget about it the stock market's over. >> the stock market and the underlying economy isn't able to support that. we don't have that growth underneath to support that kind of jump, so we're hoping for a small, slow, scheduled rise. >> a busy week again for earnings, don't we? this will be -- >> this is pretty much the last one. we've got about 60 companies this week and that's pretty much the end of the season. >> we've already got 75%. as you said, we're almost at 10% earnings growth. nobody said we were going to be able to do that and slowly improved throughout the quarter. >> and 5% revenue growth. i mean, that's -- also, we have not seen that since 2011. >> all right. record high. records. >> yep, here we go. thanks, guys. >> on earnings. record high numbers on earnings. >> heading out to the close here with the dow up 82 points. much of that rally late this afternoon, as we've said. and the yield on the ten-year holds still below 2.5%. stay tuned now. an earnings report that often can set the stage for the next day. very important number coming from aig. you'll have that number momentarily. and hey, wait a minute, wait until you see who's on the power panel with kelly evans coming up on the second hour of the "closing bell." i'll see you tomorrow. thank you, bill. welcome to the "closing bell," everybody, on this monday. i'm kelly evans here at the new york stock exchange, and here's how we're finishing up the day on wall street. a surprisingly strong session after we saw some steep selling late last week and after we got off to a little bit of a wobbly start, but it looks like we're going out with the dow up 77 points. at the session highs, we were up almost 100. the nasdaq addi ining 31 pointse s&p about 14. let's get to today's panel. joining me is cnbc contributor michael farr from farr, miller and washington, josh brown and media chairman and ceo steve forbes, also author of "money: how the destruction of the dollar threatens the global economy." here with us to wrap up today's action on the markets is "fast money" trader guy adami as well. it's great to see everybody. guy, first thoughts here on the session today? >> hey, kell! >> hi. >> that's a great panel, man! >> i know. >> you've got josh, steve forbes. i mean, murderers' row, 27 yankees. i think josh will probably say this, i think it's a bounce off an oversold condition. we probably talked about it last week. i think that's what it is. obviously, the situation in portugal being rectified or fixed or whatever you want to call it, that helps. i don't think it's a fix. i think it's emblematic of what's going on in europe, but we'll see what happens there. i still think the russell has underperformed. it bounced today. i still think it trades down to 108 and we have trades below 2.5%. all in all, a good day, nothing more than that. >> are you buying it, steve forbes? >> i think this undoes friday. the market i think has gotten a little bit ahead of itself. there's not a lot of good news out there. europe is still struggling. japan is surprisingly struggling, despite prime minister abe's program. and the u.s. economy still looks like it's going to be below 3%. so, it was a nice rally, but i think it's going to be hard to get a big bull market in the last half of the year. >> michael farr, j.b., you guys believers here? >> i mean, sort of? so far, our stock market seems immune to whatever can be thrown at it whether it's domestic or international, no matter the crisis, the stock market seems to be going up. so, will this pullback really be the beginning of the pullback that we've been waiting for for two years or three years or not? we're due to pull back, but i think as long as the fed's in place, this thing probably does drift higher until the end of the year. >> kelly, the best i can tell you is that if we're going to have a correction, the best reason would be because maybe the economy is a little bit stronger and people are rotating out of high-dividend paying stocks. and that's kind of -- look, let's be honest. look at today. today is an economic risk-off type of tape. it may not last, but utilities down almost 2%, basic meerlz leading. that's actually what you want to see if you're constructive on the economy. again, it's one day, it's a bounce after last week. who knows where it goes, you know, tomorrow or the next day, but it's nice to see. it's refreshing. >> but industrials have been lagging and they continue to lag, josh. and i've been looking at that, and with the ten-year below 2.5%, it's just not what you see when you see a really robust economy, you know? >> yeah. and i would also be concerned with weakness in the banks. i've been saying throughout most of this year, you need banks to get going, in order to get that kind of concrete strength that you'd be accustomed to at this stage and where we think the cycle is. it just isn't happening. >> and unfortunately, bank regulators are still pounding on the banks in terms of lending, so that hurts small and new businesses, which are the job-creators. so, the real strength part of the economy, which should be strong, still hobbled by unnecessary regulation and the fed still playing games. >> and the president said he doesn't have any real sympathy for the banks or any of those big businesses in this environment. >> right, and we're going to get to some of those comments specifically later, but your remark there absolutely reminds me of him saying to stop complaining, mr. forbes, about the regulations. >> well, he should stop complaining and get to doing his job, which is removing barriers to progress. he's been putting barriers in place so the whiner in chief should take his own advice and do instead of talk. >> tough talk! all right, we're going to hear from aig, by the way. >> well, after six years, he deserves it. >> look, we'll have more on this segment after a quick break. we are awaiting aig's earnings, and it reminds me of what you were just saying, about the financials, the insurers struggling a little bit here. guy, what do you do with the financials, with the industrials? i mean, i know you're cautious on the market overall here, but what about some of the cyclical sectors? >> but cautious overall, but it doesn't mean stocks can't go higher and individual names can't go higher. the industrials scare me. you saw them move and that's scary. there are some industrials that are interesting and seemingly impervis to this. a name line rop does well. the underperformance of general electric has me scratching my head. and the financials, i've loved blackstone for a while. i think they're in the sweet spot for their business. and u.s. bancorp, it's not that sexy or that interesting, but if you look at banks, if you overlay u.s. bancorp over a bank of america, let's say, u.s. bancorp trading within a percent or two of all-time highs, whereas bank of america continues to flat between 15% and 15.5%. >> and this afternoon, the sur frey from the fed asks about demand for loans, they ask about supply of loans in credit conditions. it showed supportive trends, more demand, banks easing standards and an uptick in areas like commercial real estate. i understand the skepticism about the market here, but there are signs of life, whether it's the macro fundamentals or the earnings. >> i think the only signs of life that really matter, and so far, we might be getting an inkling of some kind of a change in trend, is wages. and if we really get a lift-off of wages -- look, you've got to get people in their late 20s, early 30s, out of their parents' house. you've got to have household formation. there's never been a recovery in american history that you had no household formation growth. and you're not going to get that until people are making more money. the good news is it might actually happen in the second half of this year, and if it does, look, you could see that lift in some of the areas that we're complaining about -- banks, industrials, et cetera. but we're just not there yet. >> we do have aig's earnings out now, and dominic chu joins us with what looks like a solid beat here. >> it is a solid beat here. so, let's go through the numbers on the headlines here. aig reports earnings per share in the second quarter of $1.25. $1.25 per share. that's the adjusted earnings per share versus analyst estimates for $1.05. so, a handy beat there. also on the revenue side, they report $8.5 billion worth of revenue versus $7.7 billion worth of revenue in terms of the average analyst estimate. they go on in the report to also cite the fact that they completed the sale of the international lease finance corporation, ilfc. that's their airplane leasing wing, to air cap holdings for a total consideration of about $7.6 billion, also that they've put an additional share repurchase, a stock buyback authorization of $2 billion, and they bought back about $1.1 billion worth of shares during the second quarter. so, again, a beat on the top line, a beat on the bottom line, a new $2 billion share repurchase authorization, and they bought back about $1.1 billion worth of their own stock this past quarter, kelly. back over to you guys. >> dom, thank you. shares moving to the up side by about 2.5%, and they rallied on the session today as well. let's bring in katherine seifert here from standard & poor's to discuss aig's results. does this stand out to you against the backdrop of generally poor results across the sector? >> i'm hearing these results as they're coming across the tape right now, and they beat my numbers, and i was above consensus. i was looking for $1.12 a share, and they beat that. these numbers generally sound better than what i was expected, and i think going into this quarter, investors had a muted expectation, because so many of aig's peers had kind of weak results. >> right, and if it's the case, so we're just looking down here across the pretax operating income that the company's reporting. for property casualty, 1.3 on the books versus about a billion at the same period a year earlier. life in retirement, a little bit of an increase there. the mortgage business was up. again, kathy, these results before the impact of any share buyback. so, it's not just a phenomenon of fewer shares outstanding. >> right. it's some organic growth, which is very positive. and i think the other important thing to remember is, you know, aig sort of has two drivers or two dynamics, and there is the business that is the ongoing business and then the restructuring activities. and i think it's also important to remember the sale of ilfc for terms higher than everyone expected when the deal was first announced. that's definitely a positive. these numbers -- and again, i don't have the release in front of me, i'm just hearing what you're telling me -- these numbers sound good, and quite frankly, they sound a little better than what people were expecting. so, you know, it's a positive for the shares. >> let's bring in the panel here, as the shares are up about 2.7% after hours on the news. michael farr? >> kathy, $8.5 billion on the top line versus $7.7 billion? i mean, that's not good. that sounds almost too good to be true to me. how do you account for that kind of a difference? that's a huge difference, right? >> it's certainly a lot higher than a number of peers have done, but also remember, aig's been expanding into some other lines of business, so it may be a function of not necessarily peer pricing power, which we've seen eroding. it may be a function of some expansion efforts. >> kathy, tonight's going to be the last conference call for mr. ben -- >> tomorrow morning. >> tomorrow morning. and then you'll have someone from the company coming up. this quarter, i saw it described online as a hot mess. there are charges everywhere. revenue is down 53% from last year because of businesses they've exited. >> right. >> what does this company look like a year from now under new leadersh leadership? what could we expect going forward now that they've seen to have taken so many charges and cleaned it up? >> i think to the degree that aig becomes a cleaner, leaner organization, that should become a catalyst for the shares. and right now, the stock trades below book value. >> right. >> and i think to the degree that they can continue to execute on the ongoing businesses and continue to drive growth there, the valuation gap between aig and a lot of its peers should close, and that should be a catalyst for its shares. >> steve forbes, as he exits as ceo and peter hancock takes over september 1? >> one is the government had played its cards right, they would have never had to take over aig, starting with the attorney general here in new york state. the other thing is, the business is good, but you have to ask the question for the whole industry. interest rates are still low. what does that mean for pricing power in the future? and if pricing power gets better, is the pc side going to go back to old habits, easy entry and everybody piling in and driving up prices. >> and katherine, you know there is excess capacity still and that for years investment income was one way that companies offset that, and to steve's point, they can't rely on that anymore. every additional day the rates stay as low as they do here. >> right. and you know, the pc industry does have excess capacity. aig is certainly not immune from that. but i think the story as it relates to aig is the degree to which they're able to resolve some of their legacy issues. and that becomes a catalyst for the stock, because right now, even if they perform on par, they're trading below so many of their peers that, really, if they could just get to a peer performer, that's a catalyst for the stock. >> we'll leave it there for now, kathy. thank you so much for your thoughts this hour as aig reports. again, a beat on the top and the bottom line. shares responding to the up ssi. guy, do you think this spurs a broader rally? >> no, i don't think they spur anything, but their biggest legacy is their name. people can't wrap their head around buying the stock called aig. to me, it's that simple. >> good point. >> i think that's why it trades at a discount to its peers. >> guy, thank you. much mover coming up with guy adami on "fast money" at 5:00 p.m. stick around for all that. we have a developing story now out of new york city. bertha coombs with the details. bertha? >> kelly, mt. sinai hospital here in new york has put out a statement saying that in the early-morning hours today, a male patient with high fever and gastrointestinal symptoms presented himself to the hospital's emergency department. the patient had apparently recently traveled to a west african country where ebola has been reported, and that patient has been placed in strict isolation and is undergoing screening to determine the actual cause. so, as a precaution, he is undergoing screening. it's not clear what those symptoms are derived for or what that person was doing traveling and what they were involved with. of course, we know that there is a health care worker in atlanta who is being treated for ebola, and apparently seems to be improving. the white house says that the state department and u.s. customs officials have some strict rules to observe any individuals who do come in that present symptoms and to isolate those individuals. the country is on high alert as this ebola crisis spreads. back to you. >> bertha, thank you. stocks have soared under president obama. he's telling corporate ceos to stop complaining his administration isn't business-friendly. take a listen. >> if you look at what's happened over the last four or five years, the folks who don't have a right to complain are the folks at the top. >> the panel is itching to react to this. you don't want to miss what they've got to say. plus, our jeff cox making the case for why this has become the ultimate trickle-down economics white house, even though president obama has said trickle-down doesn't work. and after a very weak july for stocks, are retail investors getting nervous about this market? we've got the results of a brand new survey, and you may be surprised by them. keep it right here. you're watching cnbc, first in business worldwide. in new york state, we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your business grow, at startup.ny.gov welcome back. let's start here with our dominic chu and another earnings alert. hi, dom. >> all right, kelly, here's what we've got. retail me not, tick er sale. it's down in the after hours, about 5% right now, losing ground after reporting second quarter erngdz that missed street expectations on increased expenses. retail me not operates the world's largest marketplace for digital offers. you can see there the stock has rebounded off its lows, still down 5%. at one point it was down 19%, and the company basically saying that increased expenses came because of product development in sales and marketing and higher stock-based compensation expenses. back to you. >> wow, dom. thank you for now. president obama has blasted trickle-down economics in the past, saying it doesn't work and it has never worked. our jeff cox says trickle-down is alive and thriving, thanks to, well, policies under the president. he wrote about this on cnbc.com and is here to explain. hi, jeff. >> hi, kelly. thank you. well, president obama has stated in the past that trickle-down economics "has never worked," so in light of that, it's surprising to hear him talk about rising stock prices as part of the economic recovery during his administration. after all, the president has been at least a tacit supporter of policies that on their surface are trickle-down economics in pretty much its purist form. he reappointed ben bernanke and appointed janet yellen to lead the fed, which has conducted a monetary policy that's led directly to gains in stocks, surprising given the open left of contempt that the president has shown for the nation's top earners. have a listen. >> if you look at what's happened over the last four or five years, the folks who don't have a right to complain are the folks at the top. >> yeah, and kelly, we could see in charts of the three rounds of fed easing how those policies have led directly to a powerful market, and we know that most of the gains in stocks go to the 20% of the people who own 90% of the market. now, all that market wealth the president seems to be saying actually is trickling down to the rest of the economy. so, will the president actually own up to his own brand of trickle down economics? unlikely. instead, he's focusing on a message aimed intently at getting democrats re-elected to congress, and the president is at his best when he sticks to his time-tested class warfare themes. his latest gambit has been telling corporate ceos to sit down, shut up and enjoy the ride. while he likely won't ever admit it, mr. obama seems to be the beneficiary of at least a happy coincidence in which a policy he professes to abhor has been very good to him. >> thank you, jeff. for more, let's bring in cnbc contributor and former economic policy adviser to vice president biden, jaron bernstein, along with the rest of our panel. cnbc, by the way, has been asking business leaders all day about what the president has said. we'll get to their reactions in just a moment. let's go ahead and play them here. >> by doing that in that interview, he showed both an irresponsibility and a tone-deafness. >> all business people need to rise up in the name of sustained capitalism and advocate for business as a whole. >> i don't think you'd find any ceos that i know, and i know a lot of ceos, who would say that this president and this administration is friendly to business. >> and the president's statement unfortunately just confirms he still doesn't get it. >> president obama does plenty of complaining himself about anyone who dares to disagree with him. last week it was republicans, this week it's ceos. >> some pretty biting remarks there. what's your reaction to all this? >> well, i think if you go out and talk to people who the president was criticizing, of course, they're going to say that. i mean, i think if you went out and talked to some folks on the other side of that divide, you'd probably get very different set of responses. look, i think there's no question in the data -- the president is right about this -- in fact, i've heard the panel make comments like this so far today -- that the benefits of growth have redowned to those at the top of the scale. the equity markets have more than doubled since their trough in '09. and yet, middle class incomes are still down a couple of percent in real terms. so -- >> look at it this way, can the president -- what's interesting is that he sort of seems to be on the one hand saying you should thank me for what i've done for business during my leadership while at the same time saying don't blame me for the effects of this in other ways on income and wealth disparity and all that. can he have it both ways in that regard? >> no, i mean, i guess -- i don't think he can have it both ways, but i don't hear him saying that part about you should thank me. what i hear him saying is stop complaining. i think that's explicitly what he said. by the way, let's be clear, not every business leader is out mr. tl complaining. also, i would grant you that there are some changes in oversight regulation. there's dodd/frank, there's the affordable care act -- >> yeah, a couple. there have been a few. >> so, although, let me be clear about one thing. the affordable care act, over 90% of businesses are exempt from the employer mandate, which, by the way, hasn't even gone into effect yet. so, i think that part's been kind of overblown. >> well, that's another way -- well, all right. let's bring in the panel here for some thoughts. steve, you just called him the whiner in chief. do you stand by that? >> well, he always tries to deflect criticism from himself, and so, he's always complaining about whether it's george bush or meteors or whatever, about why the performance has been subpar. and the performance has been subpar. you take the obamacare, huge uncertainty. what is labor actually going to cost? so, he flouts the law, throws out these exemptions like confetti, especially before an election, putting pressure on insurers, don't let prices go up too much more the elections. that's why you can register now until after november elections. it would usually be early october. so, they're gaming the system. and the fact of the matter is, this is the worst recovery from a sharp downturn in american history. and it's like a baseball player still hitting .250 -- >> with heard that corporate profitability are at record highs. >> labor participation rates sucks, in terms of job creation and a recovery, to use the "s" word again. he can't get around that. in terms of the middle class, jared's exactly right, they've been left in the dust. >> although we did just have the best stretch of job creation since 1999 -- >> kelly, i hardly think, though, that -- i mean, look, we can hold barack obama on account for many things, but the demography in the country and the labor participation rate is frankly not one of them. the thing that i think is important is that i think the ceos want to have it both ways. you've got this rampaging stock market, all of their bonuses and stock option grants are basically being based off something that has nothing to do with them. it's mostly the federal reserve, and it's mostly the passage of time. balance sheets heal, investors come back to the stock market. when you have a 30% rally on the s&p -- >> balance sheets -- >> michael, is that fair? >> you know, i think that the economy has largely recovered because of a trickle down policy started by ben bernanke. we've inflated the balance sheet at the fed. we've had $5 trillion over the last six years in deficit spending. so, you get $4 trillion at the fed or so, you get $5 trillion or so from the fiscal side. we have inflated it. we have increased asset prices on housing and on stocks -- >> let me -- >> and that's the whole trickle down and it's not working. he's right it doesn't work, but that's the only thing he's done. >> let me weigh in on this point, because you're employing a very nuanced definition of trickle down. first of all, what trickle down really means is that you cut taxes for wealthy people and they create more employment, more productivity growth and then economic activity reaches the middle class and down. the president actually raised taxes at the top of the tax scale and we've all agreed that this activity hasn't really trickled down below the top few percent. so, i don't think the trickle down hypothesis really works. i do think there's some macroeconomic truth to what you're saying, but in terms of reaching less well off people, you know, that hasn't happened. and i think that's one of the reasons why the president gets so annoyed about all this, because if you look at the folks who are doing the best, they often do seem to be the ones who are complaining the loudest. >> and steve, one of his arguments really, if you read the "economist" piece and everything the president was saying wasn't so much a general stop whining. he was saying, look, you know, a lot of ceos will publicly say one thing about the social responsibilities they support or something and then they'll privately come and testimony us something different or send their lobbyist to wall street for something different. does that have a grain of truth to it? >> if the president wanted a substantial reform of the tax code on the business side, there's a real consensus in congress to do it, but he won't put something real on the table that is revenue-neutral and can declutter the code. the democrats are willing to go for it. republicans are willing to go for it. there's no leadership. instead, he goes out there and complains. >> steve, i really wish that were true about the consensus in congress. unfortunately, it's just not that. a lot of people like the idea of the lowering rate, broadening base. on capitol hill, much less consensus than you just expressed on that point. >> it takes leadership from the executive-run reagan exercises of 1986 and got a bill that passed the senate, 9703, that reduced the top rate from 50% down to 28% -- >> he had a congress. >> he had leadership, and this president doesn't do it. why doesn't the president call the leaders in and say i'm willing to make concessions, let's get something real done? >> maybe it's because the congress spent last thursday, or was it friday, trying to sue him? so, you know, let's be careful where we apportion blame. >> well, when you trample the constitution, there are consequences, jared. >> well, that's just a talking point. >> you wish. >> we've got to leave it there. >> ignoring laws he doesn't like. >> our thanks to jared bernstein, former economic policy adviser to vice president biden and our jeff cox. we have a quick earnings alert. dom? >> avis budget group is powering forward in the after market. the stock is moving higher in after hours after reporting better-than-expected second quarter profits. the stock's up nearly 4%. now in addition, the rental car agency raised its full-year earnings and revenue guidance above wall street estimates. again, the stock is up 4%. the ceo of the company, ronald nelson, saying that the strong second quarter results were driven by continued growth in both volume and pricing in north america. they also expect some of the pricing trends to progress into the third quarter of this year. so, again, a more bullish outlook, a raising of guidance and all of that leads to a 4% pop in the stock for avis after market, kelly. back over to you. >> sara eisen can add that to her list of companies talking about pricing power. bulls in full retreat in july, at least at the very end. did retail investors go bargain hunting or get cold feet amid the sell-off? j.j. kin haen has the surprising results of a new exclusive survey and what it says about this market. also, it's a huge week for media company earnings. coming up, a look at how the results could impact some potential mega mergers in that space. stay with us. the world has gotten you far,f but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. white chocolate loversividual. don't like dark chocolate. milk chocolate lovers don't necessarily like dark or white. before we couldn't really allow the consumer to customize their chocolate. we needed a scalable cloud solution allowing them to select what they are looking for. now there is endless opportunity to indulge. customization is made with the ibm cloud. the ibm cloud is the cloud for business. that's keeping you from the healthcare you deserve.. at humana, we believe the gap will close when healthcare changes. when frustration and paperwork decrease. when healthcare becomes simpler. so let's do it. let's simplify healthcare. let's close the gap between people and care. well, although we saw the market decline last month, td ameritrade found through its investor movement index that the retail investor was more involved than almost ever before. not only that, but they were net buyers of stocks in a month that saw indexes, the index underperform. with us now for more on how active the retail investor was last month is j.j. kinnehan with td ameritrade. welcome. >> thank you for having me. >> what did you learn from this survey of retail investors as the market was weak last month? >> what we learned is as the market was near all-time highs, the retail investor was in buying last month, but one of the interesting things about it was we know in the past the take on retail investors was they just come in and buy. they were actually selective in the stocks they bought and behaving more than like money managers and the fact that they bought names leica hike yahoo, that got beaten up, and selling stocks that had a nice jump, like facebook, intel. so, they were in selling stocks like that. some of the other names they sold were like bank of america and citigroup, although they remain as big holdings. as those stocks sort of went up slowly last month, we saw our retail clients actually take some profits. so, they're starting to think more like professionals. >> it's funny that you say this, because we actually had a discussion a little while back about how trading turnover volumes were lower now, even though there was more participation. and i asked whether this was because we had a nation of mini warren buffetted, that people were developing more long-term buy-and-hold strategy. is there something to that? >> i think there is. the other thing is the survey beta waits the trades, so options trades. you have to remember that options is, all derivatives, i'll say, is almost 40% of our daily trades. so, when you start to go into the fact that the retail client is so much more educated than they were 10 or even 5 years ago, they understand how to protect their positions with options, how to use options to express their opinion rather than necessarily stock. so, with that, you're also seeing an interesting mix on what's happening there. >> are these positive developments, joshua? what do you think? >> i think they are. i think we allow people to kind of repeat this thing where, uh-oh, mom and pop are back in, it's the top. no, no, no. mom and pop are supposed to be in. they're just not supposed to be mortgaging their home to be in. and they're not quite there yet. we see based on all the info data, they come, they stay, they do some options trading. they're not going hog wild for stocks yet. when we get to that point, i'll tell you, but i think it's refreshing to see them in there and doing things that appear, at least on the surface, to be somewhat protective -- >> michael farr? >> i'm worried by what j.j. said. i mean, this idea that 40% of your business is derivative trading. i mean -- >> covered call. >> covered call writing is fine. of course it's fine, right? i mean, it's fine, but really, should fred and ethel, who, you know, should be thinking about buying, you know, mcdonald's and johnson & johnson, should they really be thinking about derivatives? do both of those go along well together and can real wealth be built that way? are they getting too cute? >> one thing i'll say about that, michael. first of all, we don't let people who shouldn't trade those positions trade those. so, the people who are trading those positions truly understand what they're doing. >> do you quiz them? >> there's options disclosure documents, you have to pass certain levels, so in a way, yes, we do. >> like a driver's license. >> and more importantly, we educate them. i think that's been the biggest difference in the market the last five or ten years. we're not afraid to tell our clients, this is how they work, this is the risk involved. in our education, first thing we stress is risk and i believe that's been the biggest difference for retail investors. they understand that risk is where they should start, much as professionals have done for years. >> steve. >> j.j., and in terms of patterns for the month, can you do day-to-day? do you see days where the market looks like it's wobbly, people start to pull back? are you able to fine tune it? >> on last thursday, overall, our clients were net buyers. as you can imagine, steve, there tend to be like five names that generate most of people's interest. you know, facebook is going to be among them, twitter. >> tesla. >> tesla. you'll see those names in there, but yahoo!'s not a name you're necessarily going to see all the time, so when it is beaten up, you see people come in to buy it. so, as people see things get beaten up, i think this month is going to be interesting to exactly your question, steve. the market overall, first of all, i think it's a test. it's paid to buy every dip in 2014. not only the retail buyers do it but today it looks like people did it but we'll see if this can continue and it will be interesting to see if the retail investor can do so. >> thank you. definitely helps us understand what's going on. j.j.kinahan of td ameritrade. president obama's stop complaining message to ceos is all the buzz on wall street, but is it heating up cnbc.com? hot list is next. and possibly banning inflight cell phone calls. do you like the idea or do you want to be able to make calls at 30,000 feet, even if it means listening to others make them, too? voice your opinion, cnbc.com/vote. we'll be right back. dsl myth #1. it can help your business save money. false. the truth is when you compare our fastest internet to the fastest dsl from the phone company, comcast business gives you more for your money. why pay more for less? call today for a low price on speeds up to 150mbps. and find out more about our two-year price guarantee. comcast business. built for business. welcome back. speaking of gauges of what the retail investor is doing, let's check in with the cnbc.com hot list. >> one you were just talking about not long ago. this morning when i walked in, we had the story about obama telling "the economist" in an interview that ceos should stop complaining. it was number one in the morning. i said we are never going to beat that all day long. we just put up our wrap-up of what the ceos are saying in response to obama's comment, and that's out-polling what obama originally said. so, that's just that magical cycle we have on the website. number one is from sara eisen. she put together a wonderful little piece. here's the headline we got on it -- forget what the fed says, inflation is here. she went and looked at all the different prices for various food items, cars, technology, and prices are going up, even though the fed's little gauge is saying maybe not so much. she lays it all out there. then the third one, this story has been burning up the whole internet, not just our website. it's about that hotel. there was a little item in the "new york post" today about the union street guest house that is threatening to charge people $500 if they book a wedding and friends or family post a negative review. we got in touch with them and they said, it was just a joke! we were just joking. that with wa all humor and everything. the internet's not buying it and people are going in and crushing them and crushing them. naturally, that's my number three today, and it's still climbing the charts. so, we're having a pretty hot time here. >> by the way, what were the tickers today? >> the usual suspects -- apple, facebook. tesla's still floating in and out of there. elan musk was in the headlines warning about ai. loco, thank god, is going down. >> thank you for now. see you tomorrow. >> kelly, i want you to know, i'm fining any viewer of this show $500 who posts any kind of negative commentary about it on twitter or facebook or anywhere else. >> that's a long-standing "closing bell" policy, didn't you know? i mean, it's just a joke unless it happens, in which case we'll fine them $500. >> thankfully, there's never any negative commentary. >> it's totally supportive. it's an amazing effect you have. i think they saw the video of you and your kids. >> hopefully. the president loves that idea, though, a fine for negative comments. >> steve, i have a feeling you might have a fine coming in that case. 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[ woman ] take the next step. talk to your doctor and visit humira.com. this is humira at work. talk to your doctor and visit humira.com. welcome back. time for a quick earnings alert here with dominic chu. dom? >> kelly, this is leapfrog entertainment, the children's entertainment-maker. the stock has taken a hit after hours, really. it reported a bigger than expected loss in its first quarter on revenues that came in shy of expectations. the company also provided weaker full-year guidance and was significantly below street expectations. the stock is down about 12% right now, off its session lows. so, interesting. this is a smaller cap company, but still one of the consumer discretionary ones that may provide signs or clues toas to where this economy is headed. meanwhile, the age-old debate is back in the hot seat, cell phone use onst i can't understand in an emergency why people think it's good to share exchanges with others. anyone here on the panel? >> i think it will go the other way. i want more calls. i don't want anyone talking to me. if you feel the feed to communicate with someone, i have noise can selling bose headphones, don't talk to me, i want to talk with the armrest. get to me on the phone. >> if you want mayhem, especially on red eye flight. i have something i won't tuesday word on this red eye channel yaping away. people shouldn't do it anyway, any airline that would allow it deserves not to be in business. >> should this be banned altogether? >> yes, take a lesson from our 20-year-olds. if we want cell signals up there. >> absolutely. >> fine, tech people. i don't want to listen to you. >> for the, i need them on the phone, i feed them doing anything anne other than where you from, where are you going? i get really uncomfortable. >> are you going to finish that these? that's usually the guy i get next to. >> i can't afford my own jet, i don't want to get diverted by anyone. >> i can't believe you are if support of that. >> i will hand them my phone. >> noise can selling headphones, not everybody wants one. >> by stock in bose. they're going up. >> it's not like we have a quiet card, some of us can make a bowline for. >> the thing is there is only so much ambien i can take. when i'm landing, i can't completely fog myself out. i need others distracted while i'm on the plane. >> so when you're at home, do you use headphones? >> sorry. >> and ambien. >> back to you, kelly. >> i just think, look, as michael farr said, this is an industry, it's not like the airlines are around for years. it's been around decades and decades. i understand the communication have changed. this isn't a threat to allow people to make calls, why should they if we made it this long without them? >> it's not necessary. it probably won't happen. >> the airline personnel, ten minutes trying to ash straight disputes without somebody being too loud and all this? >> why can't we know this, isn't there enough common sense and decorum and decency you wouldn't be that much of what was steve's word? i will not use it now, come on, get a clue. >> can i raise the safety issue, where airlines have become a part of terrorism? is that something we need to consider when at least allowing the use of cell phones in play? >> you think it would be beneficial or negative? >> either way. >> the airline doesn't think it will be a problem to actually use the phone. there are always creative people out there trying to figure out something horrible. >> the other thing about trying to alert somebody if there is somebody happening on an airplane. >> didn't that take place on one of the flights, they figured it out and told people on the ground, what was going on, that's howhe u.s. dollar? >> well, the federal reserve is doing it slow motion. 30% in the last 12 years. remember, we once had gasoline for a buck a gallon, talking to you about the summer travel, unfortunately the federal reserve is clueless about having a stable dollar. we have 60 minutes in an hour, 12 inches in a foot. we will get, i hate to use the four letter word, we will have a gold standard within our lifetime. >> well, look. if you look at the way the dollar is trading, people talk about how it's strengthening. >> the dollar strength is everything else because of the euro is worse. it's like a league with a bunch of 250 hitters. >> the argument for oil, we're not popping to the upside lately, it's partly a fe tom upon the, the fact that the u.s. dollar is strengthening a little. >> remember, from the mid-1980s the part of the last decade, oil averaged a little over $21 a barrel. and i lived. i'm old enough to remember the '70s before you were born, oil whenned from $3 to almost $40 a barrel. everyone said we were running out of this stuff. reagan conquered it, stabilized it 20 to 2005. we had. >> i thought it was the supply thing? >> not at all, weak dollar always begets seemingly strong commoditys. >> i think, you know, it's something telling about this, sarah isen's story, the football one we heard on the blog site, inflation is here. people are seeing it. >> there is more on the website. we will end it there. the british parked the 100th anniversary into world war i. up next, we are live to the u.k. for a special remembrance. . welcome back. you are looking at live shots of london. the u.k. at 11:00 p.m. local time is marking the outbreak of world war i. that was when britain declared on germany. the lights will go out on many important u.k. buildings and across much of the country. there are candles a lot of the population has and will be lighting for the occasion. it was at 11:00100 years ago tonight when britain's sir edward grey on the eve of the outbroke said we shall not see them lit again in our lifetime. rather it was the afternoon guys right before britain declared war. then he made those remarks. >> well, if this were world war i, it was the greatest man-made war in history. we have communism, fascism. naziism, destroyed a global trading system. they did not get back to where it was in 1913 to the 1990s. >> you saw the clash of the ottoman empire. >> while our markets aren't reacting to dliefs, steve is pointing out what can be at stake when internationally we had these conflicts and they can become an economic disaster. >> we got facebook, though. >> and twitter. >> and the stock exchange closed for five months when the war started. >> it's hard to imagine, it's important to remember it. thank you all for being hire. that does it here for us on "closing bell." "fast money" is up next. "fast money" starts right now. live from the nasdaq market out of new york's city time's square. tim seymour, gordon johnson and karen finerman and guy adami, the end of the michael kor's run, he stood out, despite strong numbers this market, kor's margins got investors fleeing. will it go the way like lululemon and coke. a company we seen time and time again, it expands, expands, expands, suddenly it expands too far, there is too much invent ore, it sets in. >> i don't think it was that bad. i think