Transcripts For CNBC Closing Bell 20150427

Stock. Thatll be coming up a little bit here. We have an apple countdown. I love that. It even looks like an app in some ways. This isnt your markets countdown clock to be sure. Tesla taking off today, the electric car maker making a big announcement. It could mean a new revenue stream for the company. Well explain that one for you. We have the details coming up. Very, very very interesting. Also, a crude reality check, oil backing off of the rally over the last month here. Finished lower today, were around 56. 95 we have two sides of this story, whether or not this recent run higher for crude oil is really over or not. Its very important question for the fed for Interest Rates, and the economy down the road. Another disappointing dallas fed sur stla morning as we assess the damage. Lets start where the markets are right now in the final hour of trade. We are seeing pressure across the coverages. Its a little less than a tenth of a percent. S p down significantly, broad index down 2112 is the level there, about a quarter percent on friday. Since early march, when apple joined the dow, the s p and the nasdaq both hit alltime highs. The dow has yet to do that since apple. How ironic is that . Only a few months before that. The nasdaq is mentioned under pressure. And 1 down thats significant. We have a lot to talk about, dont we. Lets get to it for this monday. With us, margie from wells fargo, jeff from kkm financial, eric from rustle investments, david from Mainstay Capital Management and rounding out the team, Rick Santelli joining us from chicago as well. Killer, you know typically youll get a lot of volatility in the market when earnings are being reported. But weve had a very quiet market in that regard, the volatility index is at a major low right now. Whats your version of why they are so low right now . Well bill one thing thats dropping jaws in chicago is the biotech. Look at the move in the ibb, thats the nasdaq biotech, were seeing a sharp top, 4 dropping. If you look from friday, and i know its in my optic view we are seeing about a 7 move. So that is certainly concerning traders here in chicago. Is that the land unanswered repealed next, right now youre right, volatility is very low alltime highs again here in the s p 500, i think this is the time, if theres ever a time to consider portfolio protection via futures are related products. Well get more into that biotech movement in a moment. Eric let me ask you this though, do you start to buy. Its interesting that the rustle under pressure today when if anything, the earnings season is telling us stay domestic and avoid the overseas stuff. Which way would you go from here . Well, i mean if youre worried about the foreign exposure. I think you can play that more directly by buying europe and japan. In our minds, much more attractively priced and have tail winds relative to the equity marketplace. Rustle 2,000 weakness today, given the fact that biotech is weak isnt hugely surprising. Got way out ahead of itself likely due for the same kind of correction we saw last year when we saw them get out way ahead relative to the market. Its the biggest weight in the smallcap funds. Lets get to the story before everybody else here. Bertha coombs is standing by with more on this sharp decline in biotech stocks that jeff was just talking about. Sharp decline, and one of the things that people watch when you see one way, sort of momentum like this is volume, and we are seeing a much higher than average volume already with an hour left to go in the trading day. One of the things thats sort of helping contribute to that negative feeling is that what i call the unrequited love dance between mylan and teva and perrigo, rejecting the bid. The market cap is about 35 billion. That bid undervalues the company. Weve also got some big heights recording later this week in terms of earnings. Gill yan, one of them on the 30th people worried about the momentum slowing down there with regard to its hepatitis c drugs because theres more competition, theres more pricing pressure. Bucking the trend are some of the usual suspects, we talked about tesla, also monster beverage, it doesnt report until may i think often whenever you have a disappointing on the mna front, the mylan looking like its rejecting the bid. Disappointed investors are taking chips off the table. All right. That storys not over yet though. Mylan. If thats the basis, the fact that were not having this megadeal perhaps potentially at least as of today is enough to send the entire group lower i mean what does that tell you about how much speculation there is for further combinations across the sector versus fundamental growth and some of the earnings that theyre putting up . Yes, it tells you theres a lot of speculative money, ian, Biotech Sector has been well owened, overowned, it doesnt take much money to move out into others such as more european that are National Related to take a big step down in a lot of those names. Even so, a lot of the names are up double digits ian after a correction like today. Theres still hope for the sector, i think. David, as it happens, youre pounding the table for a long short strategy on health care in the aggregate, why . Whats going on there that you want to see . The thing that we can do within the Health Care Sector its a very broad industry sector, and under obamacare, there are clear winners, clear losers there are a lot of opportunities within that one industry for both longs and shorts. And that is where the Portfolio Manager betting on some stocks to go up betting on some stocks to go down if he does that well you have good portfolio performance, almost no matter what the sector is doing his picks are right. And right now in the Health Care Sector, its been very good over the past few years with a long short strategy, you can reduce the risk hedge of the portfolio, and get nice returns. Youre basically saying, pick us well help you avoid the damage, dont worry about it. Yeah, right now the market has come so far, and we still believe were in a longterm secular bull market. What were looking for in our portfolio is, were concerned about revenue on s p 500 stocks. Revenue is down 3. 5 small cap stocks is up 5 why . Strengthen of the dollar. Small caps, midcaps, we want to look overseas to europe and japan, they have quantitative easing as a floor for the stocks. We dont hear anymore. We to want look for ways question diversify out of the s p 500, use these alternative strategies, go overseas look at small midcaps, diversify the portfolio. Rick ill let you answer one of the two questions, why do you think it is as low as it is right now . Is that complacency or what about the fed meeting this week . This is sort of the forgotten fed meeting. We are all focussing on june right now, or september but nobodys thinking about whats going to happen this week. What are you thinking . I think you can reconcile both of those questions with one answer, the fed, the vix is low because of the fed. And most traders are taking a longer term view on normalization, therefore, they believe theyre going to live longer and lawn trade, theyre not going to buy any Life Insurance known as the vix. I think its fascinate, 29th session after the fed meeting. What does it mean for Interest Rates . Last closed above 2 was a day before the statement on the 17th. And in the 29 sessions, every one of them in tenure have closed in the 13 basis point closing range between 186 and 199. And as far as what the fed means or doesnt mean today, like sir arthur solution to figure them out today, you have 17 minute solution because at 11 53, the nasdaq went negative s p didnt go negative until 12 10 eastern in the 17 minutes, they went down when the nasdaq did. Even though it moved to levels we havent seen since early april, almost early march with the 109 handle euro, so they are looking at the fed just like the vix not looking for any tightening any time soon. Rick, are you trying to say that basically the, you know, the bond market is spooked by the downward move in the nasdaq . Its not necessarily that maybe the nasdaq is responding to, you know, a bond market feeling more optimistic about growth in the future . Oh no no if you were on the floor watching the minute by minute, there was little doubt that when nasdaq went negative there was more aggressive buying and treasuries in a market thats honkered down anyway with the fed meeting starting tomorrow. Back in the day, we called that tape watching. I love that. Ricks tape watching right now. Very good. Thanks gang appreciate everybody your thoughts on todays market action. Thanks very much. Only 50 minutes to go here into the close. Dow is down by about 11 points at the moment. S p down 5. 5, nasdaq giving up 30. Again, if we excluded apple, it would look a lot worse as people continue to focus on what it is thats eating the bioteches. Coming up got to show you this clock again. Ticktock on appless earnings. Well preview the tech giants results and whether or not a dividend and stock buyback announcement are also in the cards. Plus a top wall street pro explains his rating on apple which is already near its highest level ever right now. And up next, Mohamed Elerian. The ongoing greek saga and what he thinks about the fed before this twoday meeting kicks off tomorrow. Were back in two. Man you run a business. Could be any kind of business. 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Utilities under pressure as well which is an interesting combo to see right there. My next guest concerned the fed may be too successful in boosting asset prices so hes got his money in cash. Yeah. Isnt that amazing, here to explain that from the milken institute, Mohamed Elerian is back with us. Mohamed, great to see you again, welcome back. Thank you. It happened again over the weekend, every time i run into viewers, in this case they were money managers, they wanted to know what i thought the market was going to do when the fed began to raise rates. You seem to be answering that question with your portfolio right now. I mean, do you think the markets going to have a problem with the fed begins to normalize . So first i dont think the markets going to have a major problem. My portfolio is much more barbell, what does that mean . I think in some exposures out of the public markets, which are heavily traffic because thats where the feds been putting everybody. I think some in cash some in higher risk less liquid exposure. More barbell in order to the no chase the fed because i think theres a genuine question mark as to whether the fed would be able to deliver better economic fundamentals. And as long as we dont get the fundamentals, we are at risk of not validating the high asset crisis. All the same moe hemd, do you want to be for people watching out there selling when corporations are so aggressively buying their own shares in this market and when it doesnt look like the economys about to crater, unless there is your view. So kelly, absolutely right. This market is getting wonderful support, one Central Banks, Central Banks, including china is the latest thats going to join this party. And secondly a ton of cash that is being deployed back into the market. So thats the good news but that has a limit, at some point you need a handoff. Hand off to investment in equipment hiring. You need a handoff from Central Banks to more holistic policy responses. So i have no problem saying that in the short term, the market will continue to get support, i just wonder about the longer term handoff. Just for the record, when do you think the fed will begin raising rates, and really in the scheme of things does it matter whether its June December september, next year some time . And way below historical levels so the fed is going to work very hard to get us off the obsession of the date and focus more on what its going to be a very very gradual journey. I call the loosest tightening the fed would have ever done. The loosest tightening. Well see about that one, mohamed mohamed, almost our problems here pail in comparison to what your policy makers are dealing with when it comes to grease. How do you play that scenario . What happens here . Are there going to be capital controls, how will the euro be affected as well . So i think the more important meeting on wednesday is the weekly meeting of the ecb when it has to consider how much emergency lijd i did support does it provide grease. And the ecb is getting nervous because nobody sells giving money to grease and greece is repaying private creditors and the imf. They are getting nervous that is the only game in town. Will it pull the plug . No because no one wants to go down in the history books as the person or the entity that caused the first exit from the euro zone. Will it extend . Yes, but it wont solve anything. My biggest worry is an accident. You said what it looks like. We have capital controls we start getting small defaults the local municipalities wont give them money to the center and you get capital controls. In that world, the chance of an accident that pushes greece out of the euro zone is quite material. Meantime the dollar has stalled here, mohamed, after that big gain that it saw, do you think thatll resume at some point . And is there going to be a paying point for the fed where theyre going to have to do something about . Or does it delay when they can raise rates. So yes to both yes, itll resume it was a very crowded trade. Very crowded. And its gotten technically better, and but the fundamentals all call for a stronger dollar. Thats the world of divergence. Nowhere near yet the point where you get a reaction from the u. S. The dollar can move another 5 to 10 before you start getting a strong reaction from the u. S. , before you get political talk of the currency. Weve seen it before. We saw the yen move to 120, and then stalled there because it got to a stage where it was too much of a devaluation for others to support. And i think that well get that with the euro, but were not there yet. Mohamed, we have to go real quick for everybody thats piled into europe they see value to our market is this greece issue going to mean that european stocks, that the run is behind them . Will this derail the rally or could the rally actually continue if and when this happens . So i think in the short term if there is a greek exit it will shock the markets. I dont think longterm it makes a huge difference, but what i do think is important and not enough people do this, kelly, hedge the currency. Ek we my extoe sure equity exposure, but not the currency exposure. Thats been a huge growth part. The wisdom true product, mohamed, thank you so much. Thanks mohamed. Mohamed elerian for us. News alert on netflix. Dom, welcome back what do you have . Its good to be back guys thank you very much. Well talk about netflix, we have new news regard to the ceo executive compensation for 2014 per regulatory finding, reid haystings total compensation rises to 11. 06 million. Thats a 43 increase over his 2013 levels of 7. 7 million. The bulk of that is in an option award, 8. 1 billion. The salary did rise by a Million Dollars to 2. 96 million, again, lets put it in context remember, we pointed out that the reed haystings stake in netflix a couple weeks ago was valued at over a billion dollars, as we talk about the options awards yes, 8 million in options but he has around a billion dollars worth of netflix stock, back to you. Hell be fine. Hell be fine, yes. Reed haystings should probably be paid a dollar for his shift. Yeah exactly. Hell be fine. Michael, power lunch, he recommended that disney buy netflix back when their shares were ideaer. They are not today. Would have, should have could have. 38 minutes left in the trading session here. Moving lower. We heard that the biassed maybe to the cell side as we head to the close over the downtown 40. Nasdaq down 37. Up next tesla zooming higher on buzz it could disrupt the electric grid as we know it. We have details on elon musks next latest plan when we come back. 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If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com welcome back. 35 minutes to go into the close here. Lets look at markets as art told us perhaps wed see pressure on the indexes, bill indeed we have. Its off about 40 points. Look at the daz knack, its also off about the same in terms of points. Percentage wise nearly three times doubt, more than that it would be worse if it werent for apple. Biotechs contributing a great amount to that nasdaq decline here. Dominic chu back with us rounding up the movers on this first trading day of the week. Bill kelly, 3d systems and the 3d printing space. Decline so far today, at least two broker chops downgraded the shares four cut price targets, you can see there moving down 7 on the day. Thats after the 3d printer maker estimated sales and profits that came in below average forecast. That was remember at the end of last week. Also watching shares of chipotle up about a percent today after announcing that none of its ingredients will be genetically modified in any way Going Forward. Theyre working on the process now. The mexican chain is also switching its cooking oil from soybean to gmofree Sunflower Seed Oil and rice bread oil as well. Nutritional aspects there as well. Also taking a leg higher today, 7 , 6 now, its being helped aid long by bullish analyst commentary, they believe that teslas entry into stationary batteries for home and other applications is not being fully appreciated. That stock continues to be birated over at Deutsche Bank with a 245 price target. Thats where were going to pick up thanks. Lets bring in for more on the tesla story. Whats your take on tesla leasing and not selling the home batteries to consumers . Well kelly, thats based on a report out of the guardian where they talked with some customers of solar city who are part of a Pilot Program involving this battery stationary storage unit from tesla, in which they will essentially lease the storage unit. I think it makes sense from this perspective. Youre asking people potentially, and we dont know the price here. Lets say the price weve heard, 13,000 in order to buy one of these as opposed to 15 or 20 a month, if you lease it. That works out to what roughly, 150, 300 a year, you take that times ten years, 3,000 that makes more sense if youre a homeowner, and if you get people on a leasing program, guys then youve got them there, almost as a perpetual customer. Theres nobody thats going to turn it off. Nobodys going to say 10 or 20 a month is not worth it. Im going to turn off the stationary storage unit. Nope, once its in the home it stays in the home then youve got the revenue stream. I have a relative out in arizona who leases the solar panels. I think its from solar city. Its part of the project. Her electric bill is 1 a month. Wow. 2 in some cases, but she does pay 1 to 200 a month for the panel. So art, i get the leasing part to lower the cost of the up front cost but what about the utility cost themselves . I guess those will come down as well appreciably, right . For the homeowner, yeah look at it this way. If you have a stationary storage unit, bill and you know you can take power from the grid lets say between midnight and 4 00 in the morning when energy is priced at its cheapest and then use it during the day as opposed to taking energy from the grid thats going to be much more economical for both the customer and the utilities are going to like that too. Remember, theres also the issue here of people who have solar panels if they have excess energy, the regulation of that energy going back into the grid thats a huge problem for utilities. They have not been they have not set up the handle that yet. And as a result, people will say, look well take the excess energy we generate put it into the storage unit then we can use our own power whenever we need it. This is so fascinating, phil it reminds me of the conversation with the American Electric power ceo last week who said this twoway flow is the Biggest Challenges when it comes to the future. It is the future thats for sure. One last thing, guys rod lash, he is not a cheerleader, he is measured in his comments. When he comes out and says i dont think people are appreciating the significance of this for tesla, it gets a lot of attention. Well 245 thats his price target on the shares higher even after the rally today, thank you, phil. You bet. Time far cnbc news update with Courtney Reagan courtney. Heres whats happening at this hour rescue workers in nepal continuing to search through rubble for survivors and bodies two days after a powerful earthquake devastated the himalayan nation. More than 4,000 have died with the toll expected to rise. A massive tornado touched down in North Central texas on sunday leaving behind its own path of destruction. Its what drew the town ripping off roots, overturning vehicles and leaving thousands without power. No reports luckily of serious injuries. Chipotle says it has stopped using genetically modified organisms. The first major u. S. Restaurant change to make the switch. Its move did not result in significantly higher ingredient costs. And the government is lowering the recommended amount of fluoride in the nations water supply. Health Officials Say people generally get enough fluoride because its also in toothpaste and other dental products and in fact too much fluoride can cause white splotches on teeth. That is your cnbc news update for now, back to you both. Wow, thank you so much. From one side to the other, bill. 30 minutes to go until the close. 30 points is how much lower we are. We have record closing highs for the s p and nasdaq. Real entrechment since then if that is a Market Leader no verdict yet as to whether in fact it is. Thats why people are watching it closely. Up next forget the apple watch, its the iphone 6 that investors will be watching carefully it for in todays Earnings Report. We have details coming up next. Plus a top apple analyst explains his buy rating on the stock. Even as it reaches new alltime highs. Were back after this. Doug. Youve been staring at that for awhile, huh . Listen, Td Ameritrade has former floor traders to help walk you through that complex trade. So youll be confident enough to do what you want. Ill pull up their number. Blammo. Lets get those guys on the horn. Oooo looks like it is time to upgrade your phone, douglass. For all the confidence you need. Td ameritrade. You got this. There is an ancient rhythm. [ ] that flows through all things. Through rocky spires. [ ] and oceans swell. [ ] the endless. Stillness of green. [ ] and in the restless depths of human hearts. [ ] the voice of the wild within. Apple shares higher by about 1 now one in a third percent ahead of Earnings Report that its coming out, top of the hour. We are counting down the minutes with our josh lipton who is out at apple headquarters, hi josh. Well kelly, its the most valuable company in the world by a market cap, and now were waiting for its latest results, investors are going to focus on a couple of big broad themes here. One, how many iphones did apple shift in the quarter . Wall street thinks it was about 57 million. That would be more than 20 jump year over year of course the iphone is the product that powers this companys business. It generates more than 50 of total sales, a lot of focus too on apples gross margin expected to clock in at 39. 5 . Though the team at rbc says apple could surprise the upside. They are due to a favorable makeshift to the iphone 6 plus. And then will tim cook deliver a new Capital Allocation plan . One that might be bigger than the current expiring 130 billion program, the analysts of piper says a new program would have to be at least 15 bigger in order to appease the street. So were talking at a minimum of 150 billion. We are live here in cupertino at apple headquarters were going to bring you the numbers just as soon as they cross, guys back to you. Cant wait thank you, josh. Less than half hour away from the close of the trading session and less than an hour away from the Earnings Report. Buy rating just this morning. Good to see you. Welcome. Welltimed call i guess just because of the earnings coming out today. We do sit at alltime highs. I cant tell you the numbers of times when people is already at an alltime high. How much higher . We have a price target of 160 which was 25 higher from what we initiated this morning. Our thesis is straightforward as predicated on a few things. First, were in the camp that there is upside to apple, iphone 6 estimates. Were looking for 58 million tonight. Thats about three million higher. We actually think that there is going to be upside to street iphone estimates for the next couple of years. So were 10 to 15 higher and actually we have a preliminary 17 estimate out as well. So we think we have rev upside, its kind of ongoingingly. The second thing, at least in the near term theres a greater mix of six pluses. Yes. This, i thought this was so interesting reading about it. Its quite important to your case that the six plus the really big iphone is selling really well. Its a much higher operating margin. Its better for apples financial performance. What suggests to you that the six pluses is selling well and will continue to do so . Well its really just a supply chain work that we do. Right. Myself, and we have a fantastic local semianalyst, mike burton does a great job on them as well. So, its js a collect, kind of collectively what our work is suggested to us and we dont think theres tremendous, you know, a tremendous difference between where we are and the street. We think about a third of the units being sold iphones or six pluses, we think street is more in the 27 28 range. Is that having any impact on the ipad . Does the ipad even matter anymore . Hopefully matters towards the end of the year if apple is, you know, sort of rumored comes out with a larger ipad and were big fans functionally of the ipad. We have in our estimates, ive had unit declines 10 to 15 for each of the next years. Declines. 10 to 15 . Because of iphone 6 plus are they replacing the ipad . Theres an impact thats taking place. I mean something sells taking place, things like the most recent mac book pro. Its thinner and lighter. Its sort of ipadlike, it doesnt have touch yet we do anticipate touch coming to, you know, sort of the smaller mac book pro versions as we move forward. Im glad we focus so much on the product, but we also know that the Financial Engineering could be just as important. How much of a Share Buyback, how much of a dividend do you expect both now and Going Forward from this company . So, you know its not, we acknowledge as being important, its not a key part of our call right now because of the structural stuff that is taking place, and i dont want to theres one more leg to our thesis theres greater operating leverage in the model in 15 and 16 than what they have modelled right now. Less, that whole investment in the latest products. Thats absolutely right. There was about 400 basis points of outbacks investment going into both the iphone 6 and the iwatch launch. Thats consistent with what we isnt that true 2010 for the iphone 4, in 2010, almost all of that came off in subsequent quarters. The street has about 100 basis points coming off. You dont think its relevant what they say with regard to the buyback and the dividend . Its not that we dont think its relevant we think that even if they were even if they were not to do something tremendously incremental, the fundamentals of the calls structurally are not Going Forward, still continuing to make the stock attractive, that said our call on capitol return is somewhere between 150 and 200 million. Were looking for a Share Buyback of 5 to 10 ongoingingly. Coming out, weekend see a 5 to 10 increase from this point forward. All right. Very good. Thanks for joining us. Appreciate it. We have a news alert now, bird flu, Morgan Brennan has an update, whats going on morgan . We have four more probable cases of Avian Influenza in iowa. Thats according to the States Agriculture Department. Combined, these cases with there are four of them would affect or are affecting an additional 2. 3 million bishd. Three out of four of the farms are egglaying operations. Keep in mind iowa is the top producer in the country. Millions of egg laying hens now affected by bird flu. This on top of more than two dozen cases just over the past week, and two states minnesota and wisconsin, declaring states of emergency over the past couple of days in regards to this flu. So again, four more probable cases of bird flu in iowa this according to to the States Agriculture Department that brings the total number in iowa up to seven. Guys, back over to you. Thank you morgan. Morgan brennan back at headquarters, bill you know food has been the one component thats down massively for the average buyer at this point. Well see if this makes a difference. Thank you. Lets head to the close, 19 minutes left in the trading session. Dows down 42 points it would be down more if it were not for apple which is up 1. 5 which weve already shown. S ps down eight, he said on friday, and the nasdaq down 33 points being dragged lower today by the biotech stocks. Coming up next, is the oil rally over . The pros are going to hash out whats really going on here. Later, a major blow to 16,000 students attending the forprofit Corinthian Colleges in various companies around the country because they shut their doors overnight. You got an email on sunday studying requester finals and it says dont come to school again, ever. Incredible. Were going to talk about whats next for those students and the publicly traded Education Sector coming up, stay tuned. 73 of americans try. To cook healthy meals. Yet up to 90 fall short in getting key nutrients from food alone. Lets do more. Add one a day 50 . Complete with key nutrients we may need. Plus it supports physical energy with b vitamins. One a day 50 excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. All right. We were afraid this was going to happen. Breaking news on the protests in baltimore at the funeral. Courtney reagan has the story, courtney. Thats right, we are seeing mounting tension in baltimore. This of course follows the funeral of freddie gray who was the gentleman who died in Police Custody as a result of spinal injuries, youre looking here at some images of young people gathered. We are hearing reports from the Baltimore Police that some rocks and bottles are being thrown. There is a mall that is closed. We will continue to monitor the situation, but again, tensions rising in baltimore, following the funeral of freddie gray. We will continue to monitor this situation. Earlier in the day, police had said that there was a credible threat, and to Law Enforcement and that Law Enforcement should be ready and be prepared for Something Like this possibly to happen, kelly and bill. Courtney reagan for now on the latest in baltimore. Crude oil meanwhile pulling back today, settling under 57 a barrel. Up about 30 from the lows last month. There might be a sign the recent rally could be coming to a close though. One thing we noted, Exchange Traded funds that invest in oil futures like the u. S. Oil fund have seen outflows of over 2 billion just this month. So, we were wondering where the etf outflows could be a sign that the rally is over. Joining with us their respective views of this the rally is over near term kent moore is from the Money Map Global Energy Symposium who thinks crude still has a ways to go. Good to see you both. Kent how much more do you think it has to go . Well i think we have restrained upside bill moving forward. The interesting thing is that this has always been a supply and demand situation, but for the first time in memory we dont have to worry about the supply side. We know theres plenty of additional supply to bring online. So im seeing a gradual increase to about 70 to 73 a barrel brent, 60 to 65 for wti by midjuly. But those are actually going to extend to the end of the year and we could actually see prices in excess of 80 by brent by the time we get to december. Neil meanwhile, you think this rebound is pretty much run out of steam is that right . Yes, in the near term kelly. When i looked maybe a longer term for demand kicks in and the supply, but what i called frat blog. Number of wells up there that have been drilled, but not completed. Today its about eight to ten times the normal. Generally, we have about five to 600 of the wells in the u. S. Today, that number stands at about some reports say its as high as 5,000. My thoughts are if oil hits 60, youre immediately going to have a lot of unconventional wells come on quickly. Why is it neil weve seen so many people back when oil was quite alone, say its going to stay here. Now weve seen a 30 jumpup, is that just typical trading behavior . It would seem like its sprung back so quickly, that perhaps that has to be respected. I think you do have to respect that kelly, a part of that also is that the has acted quicker than i think anybody thought. Some of the drilling continues, my point is while they are drilling, they are shutting the wells in. The total a. Wells coming online have dropped materially. You hear about the rig count has dropped in half year today. The number of wells on a weekly basis is even less than that. Youve really had a sharp cut off on new wells coming online. What about the 2 billion outflow out of the etfs that trade oil futures . I realize you could look that as a contarian point of view and say that could just mean were going to hire from here, that is a significant amount coming out of the etfs, what do you think . Yes, it is bill theres a couple of things to keep in mind here. Number one, were going to be reaching a major point in the midsummer where the peek and production from the primary new wells 12 to 18 months in the past is going to be hit. Which means were going to see a rather significant decline in production from the newest wells. Theres plenty of oils out there to make up the gap. What were going to be seeing is a ratcheting up of the pricing for as the new supply and demand ambulances contend. All right. Gentlemen, good to see you. Only ten minutes to go into the close here. Lets look at markets, dows down 50 points. A thur skeptically coming over say the numbers sew an inbalance to the cell site to the tune of 1 billion. He thinks thats going to pair off a good amount of that. We should mention the dow is the outperformer of the session today. The s p down almost half a after closing on friday. Down 36 points and damage across biotechs. Just getting started. Coming up, well also tell you about a game changer in the Home Improvement space. Plus the collapse of publicly traded Corinthian Colleges. We have someone who says wall street could be parablely to blame for that. All that to come on closing bell. About seven minutes left in the trading session with the dow down. Anthony chan from s p capital iq and mr. Capital iq what are you guys expecting from apple . I mean this is easily the most anticipated Earnings Report of the season right . Sure. Our analyst is looking for 2. 18 a share. So you know, looking for a bit, obviously the growth and earnings, also pick up and revenues, but im wondering if this being the most anticipated earnings number with very high expectations, whether, you know, where do we go from here . Yeah speaking of expectations, anthony, what are you focussed on this week . Whats going to be the tail in terms of whether the fundamental economy is holding up . We have exciting data. Gdp data thats coming out on wednesday. Everyones going to be looking to see how Consumer Spending does. Thatll be the key number. We think a half a percent. Did they break out apple as a line item yet . Apple will be a big player. Trillion dollars everybody will be focussing on that revenue number for apple and whether they hedged or not. In terms of the numbers, gdp and the employment course index, were looking to see whether or not to get another percent, if we do, year over year number 2. 6 will be the highest in eight years . Suggesting that janet yellen is getting her way, that year over year changes. How much is benefit opposed to people taking it home . Actually were looking for the jump on a convertly basis to be equal, both in earnings and in benefits. Were starting to see both of them picking up. I think by the end of the year you will see average Hourly Earnings approaching an area between two and three quarters and 3 . That would be exciting. How are we doing so far, earnings season overall . Earnings wise doing what we normally do. We start the quarter at a low point, then we sort of inch our way up now were. Name 0. 8 . And when all the said and done First Quarter numbers could end up being positive. Expectations for second and third still coming down . They are. Down almost 3. 7 for the Second Quarter, and now in negative territory, according to capitol iq estimates, for the third quarter, so all of the weight is now on the fourth quarters shoulders. Listen, i know we have to go but the second half rebound earnings is what everybodys been banking on. Right, now its only in the fourth quarter, up 3. 65. If they dont come through then were in trouble. No rate increase on wednesday. Absolutely not. Okay. I see, its the forgotten fed meeting. Nobody is focussing on the april meeting. Waiting until june then. Anthony, sam good to see you both. Thank you for joining us today. Well come back in just a moment. After the bell well bring you apples results from a corporate mac book. Instant analysis from our team of apple allstars. Youre watching cnbc, first in business worldwide. Legalzoom has your back. Over the last 10 years weve helped one million Business Owners get started. Visit legalzoom today for the legal help you need to start and run your business. Legalzoom. Legal help is here. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again, with aleve pm. 90 seconds left, very quickly, its a simple tale of the tell for the stock market. This is the dow, opened higher closing lower. Were looking to close about the low for the session about 40 points. One of the low spots today, the Biotech Sector dragging the nasdaq down. This is the ibb, one of the prominent biotech indexes down 4 today. In just todays trade. One of the things waiting for apples earnings a whole range of expectations of what they will turn in you heard from s p is expecting 2. 18, ive heard numbers higher than that. Theirs is up 1. 7 bob. Yeah, we had a problem in biotech. Mylan injecting, the other space, applied material didnt go through because they said the concern about the department of justice. Those are two big deals that fell apart. A lot of money was in them. Thats just kind of risk off day. The whole Health Care Group was down. Wasnt just biotech, hospitals were down all the big medical device makers were also down about 2 . By the way, tonight, were going to hear from a bunch of transports, c. H. Robinson will be out, swift will be out. Very good numbers last week well see what happens. All right. We have that coming up right now. Stand by all those plus apples earnings, in case you havent heard right now on the second hour of the closing bell. Kelly evans and company, ill see you tomorrow. Thank you, bill welcome to the closing bell everybody, im kelly annes, and were kicking off the week here in wall street with red arrows. Big Earnings Report due out in moments here. Dow off about 40 points on this session closing 18 and 39 thereabouts. And its the outperformer on the day, the s p 500 down about four tenths of 1 . Today closing at 29. 09, that hanging on to territory above 5,000. Struggling today because of some real quickness in the biotechs. In fact if it werent for apple which is about to report earn pgs. Much more brutal session. About twothirds of 1 . Before we bring in todays panel, we were minutes away from the Second Quarter results. Theres about half hours time. Well bring you the numbers. The moment theyll release, joining me here is dan greenhouse, sarah, kate. Welcome one in all for more own todays action. We brought fast money trading into the fray. Give you the first word here. Are you shocked by whats happened in the biotech space . No im not shocked, if you go back this is probably the third or fourth time weve seen a significant selloff in the etf. Etfs are great when everythings going higher. This isnt a stock specific thing. Bob just mentioned myaln labs respectfully. What seems to be happening from time to time is a holder or a couple of different holders find it necessary to blow out of position. The etf drags down the individual stocks not vice versa. And if you look over the last six to ninety months this is the third or fourth time weve seen it. Can it last a couple days . Probably, but if you go back and look i dont think theres anything that changed in the biotech space today that leads me to believe the story is over. Fair enough and we have seen this movie before we saw it last year notably janet yellen was citing concerns about the valuation in biotechs. Should people who arent necessarily overweight in the space still be concerning . Is this dragging down the Overall Index . The short answer is probably not. We mentioned this last year sold off significantly in the spring in the Broader Markets. They stopped going up at the same pace but didnt decline. I would just sort of build on what he had to say and talk about biogen today. It was about about 11 bucks. It doesnt look fantastic. Thats on top after Earnings Report last week. It really came under pressure then. Its not like this is the first time. Its not, and again the spaces seem to its near a tie, but it seems to stop its a slowing down a little bit. From a Broader Market perspective, its large, but probably not large enough to sick the Broader Market. And sarah, we mentioned last year it was janet yellen talking about areas of froth in the market, where maybe that let some of the air out in the balloon. This time around happening before a fed meeting. Any coincident do you think . This is sort of as meetings go, probably a boring one. We dont get the actual, you know, press conference from janet yellen. Youre not expecting any action. And we are expecting this week to confirm that in the First Quarter, the economy grounded to a halt or barely grew 1 . The story is earnings this week. And the story is the strength in Corporate America giving the low expectations of earnings at least on the bottom line beat that continues. Question about the top line lucid, if you look at the movers today, at least in the dow, apple ahead of the turnings. Stock specific sort of names ahead of the fed and some of the economic data. Back to dan in a second. Kate, im just wondering what you think about this mylan deal. Guys saying no way, nothing to do with the space coming under pressure today. Look, the deal environment for these health care and biotech and pharma names is unbelievable. The extent that theyve grown and extent to which their big and anticipation had nothing to do with it . People feel were going to see less activity and enthusiasm out of the valuations in the short term. I think its been where people are looking to see action as we did with telecom in recent years. Hedge funds looking at that as sort of the next frontier of opportunities. So, i think that it could be a signal moment maybe more symbolic value than technical. At the same time, i think to sarahs point, ive been asking people in general about the stock market whether they still feel good about valuations here. Interesting story over the weekend talks about how a majority of people did tart is to feel that way at 7. 4 for an s p. And im hearing, you know, it depends on what youre talking about. If you look at the weakening of the dollar for instance that may help companies with more international exposure. May be a way to play it. As the domesticallyfocussed companies well see. Well get to them in just a second. What are you smirking about over here . Because we dont have any growth in fact First Quarter . I dont like being called out on my smirk. Sarah referred to the fed meeting as boring. Yes. And i thought that was a completely appropriated a jekttive, for some reason i smirked because not every day you can say a fed meeting is boring. If you are under the illusion that im not a total nerd, i thought that was something to laugh out. Do they pull a wild card here . Raise Interest Rates by half a percentage point . Data dependent, the data has been thats correct. I would say this with such definitiveness, my job is to follow everything they did to the smallest detail and i dont even mind not even being on the desk when the news comes out. Thats how little not in the room. Somewhat accurate. Well all be in the room. Apple is about to take center stage in just a few minutes. Joining us now. We to want look at how the stock trades after this. What can you tell kpups. Recent history. The last eight quarters thats what traders will key on today in relation to how its done over the course of the past couple of years. So we asked our partners over at market data to crunch the numbers over the last eight quarters and give us an idea of what we might expect of his history is a guide. Heres what we got, eight quarters going back to 2013 on average, apple stock does trade positively in the first full day of trading after the earnings release. Closes that way. Average 1. 7 gain for apple on the heels of earnings over eight quarters and its been positive 63 of the time. Nearly twothirds its trading up to close the next day. How does that relate to other parts of the market that we might see happen tomorrow . Because of apple and whats happening there . The nasdaq 100, the largest of the Nasdaq Companies trades up a little less. Half a percent on arch and its up 63 of the time as well. So the same kind of batting average positively in that regard. S p 500 trades up by about one tenth of a percent on average, positive three quarters of the time. Then the tech eta, that sector that tracks the Technology Stocks in the seth 500. Its up a half percent as well and its up 75 of the time. To give you context and idea of what maybe some are expecting after the bell. We should also note that throughout the course of the day, the Options Market has been pricing in what could be about a 4 to 5 move. They are looking for volatility although not out of the realm of reason for how it has traded typically over the course of the past eight quarters kelly. Back to you. Good stuff, thank you very much, dom. How important are the amsz rumts going to be for the market . Important for the market i dont know if theyre important for the market. I wanted to say friday the days start to escape me after a while. I think apples its own ecosystem, its own market entirely. I dont think the Broader Markets going to take a cue one way or another. If they are good the Broader Market will rally. That said go back and look over the last lets say six months. Apple, the pattern has been clear. Big run up into the fall from about 80 to 110. Stock pulled back plateaued to 100 bucks. Then the next leg up to about 130. Pulled back to 125, plateaued far while. Were in the next leg higher. Can the earnings derail it . Perhaps. Ting gets 125, the stock is fine listen to jim kramer over and over again, to a certain extent what peter jarretts been saying. Dont try to trade the stock, its too hard. Ive tried far while. Cant do it. Youve got to own it put it away, close your eyeses, dont get crazy. Im just also looking at, you know, as much of a run as its been on. This is a company of not super high. We were talking to an analyst earlier, just the next couple of years, holding on to its current market share. Its only 17 . Dont you think it could materially grow as we talk more and more about the ecosystem . About the apple watch. We heard this a little bit is that it is just so big, its going to be hard to move the needle when it comes to growth and multiple expansion. Apple has had a strong run up at least 20 so far this year. While on a valuation perspective, may look cheap, even the highest estimate of the new apple watch on the cell side isnt really going to do much to continue to drive earnings and revenues. Yes, strong iphone cycle, but then what . And thats the question investors are going to be asking. I would add, the argument full disclosure follows the company. We have a buy rating on it. The argument from people for investing in apple has been that its cheaper than the Broader Market. More or Less Printing money can grow exponentially and trading at a relatively attractive valuation. Both relative and detract valuation valuation. To sarahs point, theres certainty. And thats why each time they step into a new vertical everybody watches with clarity because people forget when they introduce the ipad the jokes leading up to it or the thought leading up to it was around the name of the ipad. No one thought it would become what it is. Its interesting to something similar. Thats a good point, theres such a disconnect to what youre expecting in advance. Which why i think its actually kind of exciteing to geek out again to see an earnings thing like this. Its a new block generated under the tenure which makes it interesting. Are you going to get one . Anecdotal point. I havent ordered one, supposedly they were backed up until june. I have a good friend whose husband ordered one, the sports version and more sleek, professionallooking one for himself. They came on day one. They came on friday. Wow. Anecdotely i wonder if that means theyve been giving people bearish expectations. Who knows. But it used to be an ipod company. Stick around. Thank you guys. Coming up on fast money at 5 00 with and apples earnings are coming out shortly. We will have the after hours actions from the latest headlines from tim cook. Dont miss a moment of that. Container store is out with Quarterly Results now. And Courtney Reagan has the numbers. Yeah shares of the containers are down sharply. Down 17 . The container missing estimates for both the top and bottom line are reporting Quarterly Results of 24 cents and also been expecting 31 cents, revenues also light, the company said that weather hit hard during that key sale. It was very important sales period for the company. Looking forward, the Container Store expects First Quarter, samestore sales to fall between 3 and 4 and fiscal year saying for sales to be done 2 . Sharing at the Container Store, down about 17 , kelly, back to you. Another tough session for this name thank you, courtney. Talk about tough sessions Corinthian Colleges collapsing after giving a failing grade from the education department. The forprofit Education Company shutting the remaining campuses and leaving thousands in limbo. What that means for the rest of this industry is straight ahead. And how did sales of the iphone 6 impact the bottom line . Well have the latest earnings in just a bit. Youre watching cnbc first in business, worldwide. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the well equiped volvo xc60 today. Visit your local volvo showroom for details. Thats right, kelly, now several Police Officers have been injured. This is according to the Baltimore Police and this is following the escalating tensions in northwest baltimore. Here you see video of what folks are calling the police and describing as juveniles organized sort of their against the Police Officers following the funeral of freddie gray who is the individual with the spinal cord injury that died while in Police Custody. Again, several officers have been injured. There are rocks and bottles being thrown in an area near the mall in northwest baltimore. Well continue to monitor the developments here into the afternoon. Kelly. Courtney thank you for now. College students meanwhile across america are winding down the Spring Semester as of today, schools out for good at Corinthian Colleges, this take a look is the home page. Deactivated essentially because effective today, forprofit college provider is shutting down oerngss in campuses putting students academics careers in disarray and casting doubt on the space. Joining us now, jeffrey, welcome, jeff. Great to be here. Corinthian colleges what happens to the 16,000 students now . Well they are going to be looking for other schools to go to. Some might drop out of Higher Education altogether. Others will be picked up by nonprofit schools or other forprofit providers. Theyll be in better shape because their loans up to this point will be forgiven. Not so at least not yet, for all those students who had gone through corinthian the last couple of years. Exactly. Some of whom are carrying quite a bit of debt as we now know have poor job prospects relative to what were promised. That was the big problem. And a lot of the forprofit sector. Which is why the Obama Administration has been really cracking down on these institutions over the last couple of years because they make promises to students particularly around job placement that they really couldnt hold at the end. Kate. Kelly, i was just going to make a sarcastic comment, we have a fix here for the broken student loan market put the college out of business so the loans are forgiven. In all seriousness, quick question for the guests here why was action not taken sooner . I mean clearly with the regulatory investigations that were going on, the scrutiny of the u. S. Government this was pretty well telegraphed, and perhaps there was a fix that could have taken police earlier without leaving students in the lurch, what are your thoughts on whether this too took long . There will be some people that took too long and others that think the administration has been unfairly cracking down on the forprofit industry over the last couple of years. There is this tension in washington, and in the states that you want to give students opportunities to get a Higher Education, to get a College Degree or a certificate. And at the same time you want to protect them. And sometimes those two goals are at odds with each other, and i think for the most part the government wants to have 1,000 followers bloom, wants to have multiple options for students to take courses. Many different kinds of institutions. And i think that was the case here. They wanted to try to make corinthian have a go of it. The other issue here is that the governments going to be on the hook for all these loans. So they wanted corinthian in some ways to succeed because otherwise now, they have to forgive the loans. Jeff at the risk of asking a question to some degree needs to be asked and being the bad guy here, do the students bear the responsibility here for going to a student like this . Not meaning that it was bad, the forprofit model is bad, but something was going on for some time now. Do the students bear responsibility here . Well for the most part many of the students going to some of the students are desperate for a Higher Education. Theyre not, they dont necessarily have the knowledge at their fingertips that they should have about institutions but i think this is this is a warning for students of all kinds out there. Whether they are 18 years old, 30 years old, going to college for the first time or whether theyre going back to college for the third or fourth time. You really need to look at the statistics that the institution is putting out and comparing that to what the government is putting out in terms of how much Student Loan Debt youre going to have at graduation whether youre even going to graduate at all. And your prospects for a job, and i think that students do bear some responsibility here but at the end of the day, the government was giving them loans, and as a result they thought, hey, this is a legitimate operation. Well now we know better. Jeff thank you. Thank you. Appreciate it. Home remodelling keeps surging and thats creating a growth for Companies Helping homeowners take on renovation projects. Were going to talk about that next and how much will apple raise its dividend and Buyback Program when it reports. Well have instant analysis of what could be a massive return to shareholders later on the closing bell. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back. Home remodelling boom in the u. S. Showing no signs of slowing down. And its not just Home Improvement retails like home depot and lowes cashing in. We have the big winners, hi diana. Its the websites pushing customers to those retailers and to Home Improvement professionals. The growth of names like porch and house is astronomical for companies barely a few years old. And with a new boom under way, they are only serving ahead. Now contractors and designed build firms we spoke to say they must be listed on the sites, its just a new cost of doing business. Recently visited porch in seattle which offers users vast stores of Historical Data and pictures of homes they might be buying, also connects them with local build education and contractors. Porch launched in late 2013 with barely 100 employees, they are now expecting to have 600 by year end, porch has garnered 100 million of investor capitol so far. Focussing on aggregating this data set that nobody else has, Building Partnerships that nobody else has, all these, you know reason really set us up to build products that others cant. And that just gives us a really big advantage. Now its big competition is houzz started as something of an Online Design magazine, now its a marketplace selling goods and connecting consumers with professionals. Neither ceo says anything about going public soon given how much investor capitol they now have, but these are clearly ones to watch. If you want to hear more from both ceos go online kelly. Good stuff, diana. Full disclosure i love them both. Its really a joy. Diana, really appreciate it. Time now for a cnbc news update, hi courtney. Numerous Police Officers in riot gear responded to protesters at a mall in northwest baltimore. The mall sl closed. A line of officers with helmets and face shields are blocking off the malls parking lot. Baltimore city police announced this morning that three violent gangs are working together to quote, take out Law Enforcement officers. Initial tests have found probable new cases of the spreading bird flu on four commercial poultry sites in iowa. The states Agricultural Department says nearly 2. 3 million birds have been affected. And president ial candidate rand paul met with Orthodox Jewish leaders in brooklyn and reinforced his commitment to American Funding for israeli security. He will continue to vote for u. S. Military aid to israel. Clashes between rebels and government militias continue to go to aden. Air strikes pounded central yemen in the city of sana. More than 11,000 people have been killed since the bombings began. That is a cnbc news update for this hour kelly, for now, back to you. Thank you. Now Apple Earnings are due out any moment now. We have full Team Coverage of those results standing by when we come right back in two. vo me . I dont just wait for a moment. I watch for the perfect moment. The one nobody else sees. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. Welcome back. In just about 90 seconds time Apple Earnings are out. Lets get expectations from ross gerber, and Todd Hazelton from buffalo along with our panel, ross, tell us what youre looking for. Well im looking for some pretty good numbers. I think that the analysts have underestimated the sales of the iphone in china and also the refresh cycle. And, i think were going to see some good stuff out of them. Im excited. So youre watching the iphone sales number what are you going to hone in on . Iphone sales will be down from last quarter obviously since the holidays to boost that a bit. Im also really zbresed in ipad sales only because theres been a lot of discussion about the ipad sort of faltering off. I think that shows us that maybe apple needs to revamp that in a way it hasnt been. Maybe with an ipad pro, you could toub that. And also the product categories of apple watch. I know theyre not going to talk about sales figures there. Maybe youll hear something on the earnings call. Ross viewers are aware, the street estimates according to street account for those iphone shipment numbers, a little over 57 million units. Total revenue for that of about 60, 36 im sorry, billion dollars in average sales price of 654. That jive with what youre expecting in a word . Not at pull. The analysts are constantly lowballing everything as well as apple guides low. We expect a bigger asp number. We have to leave it right there. Joshua lipton Apple Earnings First Quarter results out, joshua joins us from cupertino, hi josh. Hey kelly, apple just reporting, lets get you those numbers. Apple reporting, 233 on 58 billion. The street was looking for 216 on 56. 1 billion. So that is a beat kelly on the bottom and the top. Going through the product categories, iphone shipments, 61. 61. 2 million. The street was looking for around 57 million. Ipads 12. 6 million, a bit of a disappointment there. The street was looking for around 13. 9 map shipments, 4. 6 millions. Clocking in at 40. 8 , that is better than what the street had forecast trained to q3. Apple is forecasting revenue at 48 billion. Investors were also hoping tim cook would give us an update on the plan. He does apple expanding capitol return program to 200 billion. Now, i did just have the chance to sit down and speak with tim cook. Let me go over the highlights of how tim saw the quarter. In terms of iphones, he noted that was up 40 year over year. Pointed out geographies in particular Greater China up 40 . The u. S. Was up around 20 . Mexico, up about 80 , south korea, up 100 . And in terms of ipads, cook made confident in the product, confident in the pipeline greater focus we know in the enterprise saying he believes the ipads in his words will come back. As for that capital return program, kelly, cook telling me that apple is returning cash faster than anticipated. Confident in our future he said and believe that the stock was in his words undervalued. Now turns to the watch, apple had said they would not break out revenue or shipments for that product. But cook telling me he was very happy with the response so far. The response has been overwhelmingly positive he said. He noted that the man was out of whack with supply but working hard to right that. Relatively thats a good problem to have. And apple he said has a history at being good at fixing that. Back to you. Josh thank you. And i just want to be clear, you said tim cook on the ipad figure which was well below expectations said he anticipates itll come back . Im sorry, broken up a little bit. Could you repeat that one . Sure tim cook said on the ipad sales figure which was well below expectations he thinks itll come back . Yeah he did, exact words, kelly, what he focussed on was listen that there are, the replacement psych until his opinion was longer than he would like but clearly believed he has products in that ipad pipeline that hes excited about, talked about how theyre going to focus on the enterprise. We know of course about the relationship apple now has to ibm and confident in that products future kelly. Great, josh thank you very much. For more reaction to these numbers. Ross gerber from there, todd as well. Ross, a little under 2 at this point. And look even that mac shipment number missed a little bit, whats your reaction . I think they are amazing numbers. Im so excited. This is great. We havent even talked iwatch yet. The iwatch is blowing everybody away. Beyonce is wearing a 50,000 iwatch and everybody in hollywood wants one. Everybody in music wants one, and everybody in the countrys going to want one. Once all the analysts gou through numbers and look at the product category my god, im not not stock, i better get in the stock. How many times can i say this . At the risk of passing up todd what techno buffalo means, the one issue i have with what youre talking about is the idea that someone, somewhere is going to say oh my god, im not in the stock. A lot of people arent in the stock. Well okay i think we agree to disagree there. But i also will take issue, as im prone to do look at the top ten mutual funds. The top ten actively are underweight apple and they need to get up to the index. They have to buy this stock to get to a 4 rating or trailing the market right now, big time. Is there something in this quarter. Is thering in smt quarter thats going to change that because the story has been for years the stock is cheap, people are underweight, the stock is cheap, is there something in this number number. The stock hits 200 and people say the stock is great and its fully valued. Thats what im waiting for. Im going to keep saying it. Apples revenue grew substantially in chinese soared 71 and surpassed its european revenues to become what looks like apples second biggest market. Its huge its on the far high end of peoples expectations for this period. And dont forget it was only two years ago that the Hedge Fund Manager david took apple to court and accused them of having a depression era mentality when it came to capital. Allocation and, you know, returning money to shareholders. So really a lot of change in a relatively short 24month period. Looks like 193. 5 billion. Even with the pressure. With purchases. They have 200 billion in cash on hand. Todd hazelton 200 billion is also the figure for this return program, listen are you surprised that the shares arent up more . As kate said the expectations were a little bit below that figure and its such a round eyepopping number you might have thought there was more of a reaction. I would naturally. Im not looking at figures like that. I think, you know, when youre a shareholder and you get information like that should be up a little bit and people should be buying into it. I want to get back quickly, china and brazil and the other markets where apples selling phones and doing well. You have to take into consideration, this quarter didnt look at galaxy s or edge or any of samsungs biggest players. Especially in the markets where samsung is often apples biggest competitor and in china as well. So i think this quarter is great, but we also didnt have a flagship from its competitors to compete with. You want to respond to that ross . Yeah, i agree with that. Yeah, theres been no competitors all quarter. The new Samsung Phone is nice. Its really just kind of crap compared to the iphone. Ultimately, its about an ecosystem thats a technical term. It is. But, its the ecosystem, now ive got a watch, all this stuff, my movies, my tv samsungs ecosystem is just what is it . Its googles, its android. Google is a mess of programs. And this is here and thats there. I just want an easy program. And let me tell you, my threeyearold has no problem navigating the entire ecosystem if i give him an android, he throws it on the ground. We have to consider the household though kate im dwelling on this Capital Returns Program again for one more second. The increase 200 billion, and cumulatively. Cumulatively shares up only about 1. 5 after hours. I was looking at the Product Sales once again, you have to wonder if people are disappointed about the ipad sales. You see them down by about 23 . Thats an issue there. The iwatch again, im hoping well hear more color on it. But its sort of a great unknown despite the excitement about it. I wonder if the Capital Allocation program is sort of counterweight to some of those plus a lot was banked in. Isnt having the desired impact. Hang on one second dominic is coming back with more on more on this name what can you tell kpups. What josh just said were combing through the numbers again, looking at the Balance Sheet items. Apples cash horn now sits at 194 billion, again, apples cash balance short term investments, longterm investmentsing with all of that together, 194 billion, staggering a. Money, thats up 9 from last quarter, and up 29 from the same time last year. Also, give you more numbers here on some of the iphone sales figures, they say that the average selling price for iphones this time around 659 that beats analysts estimates for about 6 654. The average selling price exceeding expectations to a small degree and of course another headline here being that 194 billion in cash and investments now sits on the Balance Sheet over at apple making it of course a much larger than the majorities of companies in the s p large cat 5 index. Thanks. You know i would they one bullish indicator is 659. That tells you that people are buying new iphones, even when theyre not ready for a replacement at a discount. Theyre not necessarily trading in an old one and getting a new one. It also gets to the mix which was a question going in that mar upgrade cycles are including the 6 plus thats why you saw higher margins. People are getting more memory. Theyre buying more memory on the phones. Thats a lot of it too. And i want to make quick point, what sarah said before lets not forget the last quarter that apple reported was like the best quarter anybodys ever had ever. There might have been something baked in here that has prevented some furthering upside. Superlative company. Ross thank you. Our best wishes to your kids there, playing with their android devices. They dont play with androids. Much more ahead on apples big Earnings Report. The dichblds when we come back. Also going to look at the suppliers moving on this news. Stay with us, closing bells continue. Here at Td Ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Apple just out with earnings, up better 1 after hours. 134 which does put them in record territory if they open here tomorrow. Lets get more reaction now with lou from Disruptive Tech research, lance, with an apple watch in the house. Michael, cnbc contributor from destination Wealth Management here at the exchange as well. Gentlemen, welcome to all of you. Lou, first to you, this capitol return program, i mean 200 billion for the buyback, not a bigger reaction in shares is there some disappointment in terms of their numbers here . I dont really think theres any disappointment. I mean if you remember they came off of the mind melting numbers from the holiday quarter. I mean what better of an encore can people expect. If i believe, if im correct, the iphone unit sales are the second highest number in the companys history. I think people are focussing on the ipad number which disappointed to the downside a little bit. I think thats irrelevant. Increasingly so. If you look at how much money comes from the iphone its 70 of revenues. So that ipad sales figure really doesnt matter as much as we continue to move forward. You agree, lance . Well i wouldnt call it irrelevant, i think its very important for apple to get the business side of the ipad working, and the big plan the Big Partnership with ibm on the enterprise side and this is something were talking about, larger ipad thats going to appeal to sberl prize users, now maybe later in the year. And also apple cant afford to be a one trick pony yet its fantastic that the sales are exploding like this. Its a real bode of confidence for the quality of the iphone 6 and 6 plus but they obviously want to diversify, have people buy Different Things like the apple watch. Right. And were going to ask you about that. Michael, whats your view on the shares here . We keep taking profit and we said how much do we take . Half as much i think the numbers are going to be great. And the numbers just completely surprised on the upside. Its a hard stock not to be in particularly how much the index. Whats interesting about apple. When people are concerned about buying this stock, i think you need to start looking at apple almost in some respect as a conglomerate company, we didnt hear that much about apple pay. What happens if it starts to explode Going Forward . Now all the sudden have them penetrating Financial Services enterprise with ibm, and really pretty astountding the numbers that theyre presenting. Michael, you mentioned you keep taking profits in the stock. What is the company doing that is telling you you should be taking profits . We just have a lot of profit and just set a portfolio strategy, just keep carving back from a portfolio strategy. We dont like the upside down v stocks, from 10 to 100, back to 10. Kevin oleery said the same thing. Ting makes sense. You cant have it be too much of your portfolio strategy but we still own the position, its still an overweight position in our portfolio strategy well probably carve a little bit more. Every time we carve off stock, it goes up and erases everything we sold already. Im curious about the idea lance, that apple has managed to throw its market share and also raise its prices. And its margin. Is that something that is sustainable . And what does that do to the rest of the smart phone makers out there . Well apple likes to break the rules in this krair. Every time i talk about apple products, why are they so expensive, let me have one. Its like they buy it anyway. And you know apple did a really good thing, they reinvented the iphone, redesigned update that people really embraced. And they did it in sort of this vacuum of time where the competitors didnt have an answer. I was listening to the show earlier, and its very true samsung, you know, which is finally got out there with the six and the galaxy s, thats certainly something that people are going to be watching but, apple manages to not only make, you know compelling products they get away with pricing at a level where it seems like its too expensive. We have more breaking news on the tensions down in baltimore. Courtney reagan whats happening . We now have seven Police Officers that are injured, the injuries are ranging from unconsciousness to broken bones. This is new developments that weve gotten from a recent press conference with the Baltimore Police. Police working to control the rising tensions from a group of violent individuals that are being called lawless. This before darkness falls, that is at least the hope of the Baltimore Police. Here is what we just heard from the captain of the Baltimore Police department. This afternoon a group of outrageous criminals attacks our officers. Right now we have seven officers that have serious injuries. Including broken bones, and one officer who is unconscious. We will do whatever is appropriate to protect the safety of our Police Officers and ensure the safety of the people that live and work in the area. Some of the measures that were mentioned, include tear gas and pepper balls. If necessary to protect the community. There is reports of looting, smashing cop cars, rocks bricks, and bottles have been thrown at police kelly, well continue to monitor the situation. Back to you. Courtney thank you very much. Just wrapping up our discussion here in the meantime about those apple results, lou, im going to give you a last word before we let everybody go. What happens now . Theres so much optimism priced into this name. There were some disappointments weve discussed on the ipad maybe even that mac number. Huge capital return program, what do you do with the shares here . I think youve got to own it. Give me one compelling reason to not own shares because of valuation . No, its still cheap compared to the market. Is it because of slowing growth thats not a concern. Is it because of unfriendliness to the shareholders in terms of returning capital . No, i mean theres no leg for the, for the bear thee stois stand on. This is a name you have to own until the growth wanes. Like kramer was saying, you own it, and forget about it the for a while. Thank you everybody. Appreciate it, guys. On the Apple Earnings this afternoon. Coming up next dominic will round up the after Hours Earnings numbers outside of apple for us. Closing bell returns in two. I think about the shape. I think about color. I also think about sound. I take it into my brain and i think about. What would it look like to me . My tin man has a big toe the size of a house. The lion is small like a toy poodle. It has webbed, duck feet. And he is very scared of everything. My scarecrow has wooden teeth. His fingernails are really long. And his clothes have tubes on them. Somewhere over the rainbow somewhere over the rainbow and thats dorothy. She looks like me. Everyone has a favorite movie. Now people with visual disabilities can find theirs. Comcast is proud to introduce the First Talking guide. From xfinity. Welcome back. Dom is rounding up the action. Were watching some moves here first with alison transmissions, at first glance it looks like the shares are down 5 . The retches came in lighter than expectations. As an estimate there, we are watching whats happening with al ialison p whats happening here with rentacenter, those shares are moving as well. Coming in with their numbers. Also revenues coming in 878 million. That also beats analysts Comparable Store sales up 8 , that pop there almost 9 for those shares as well. Well add one more here whats happening with the Container Store. We have been telling you since the beginning here Courtney Reagan saying the adjusted earnings per share below expectations, also revenues coming in at 224 million. You can see the shares losing about a quarter of their value. Well keep an eye on all these reports as the afternoon progresses, with all these Conference Calls coming up it will be interesting to see how the shares react, given what will be said on the Conference Calls. Back to you. The action in some ways is only just beginning coming up some final thoughts and reaction with our panel. Stay with us. Welcome back. We begin with further developments down in baltimore. Courtney has the latest. Some dramatic new video of a baltimore mta police car on fire outside a cvs where there were also looters. The white house is also now monitoring this situation in baltimore. We have seven Police Injuries one Police Officer is unconscious. There are also broken bones, again this according to the Baltimore Police department. These tensions continue to mount here, going into darkness, police say they will use any means necessary to keep the community safe. Tear gas and pepper balls were two example used. It could be a real hot summer courtney. Just as we close things up here. Reporting its earnings, and some history figureses in this result in fact this is one of the biggest hikes in history. Share up dan, about 1. 3 . How will you play this tomorrow . Listen again we have a buy on the stock. I dont follow it. Walt follows it for us but i think the argument made before by a previous analyst is very simple. Right there there is just not a bare case no not owns the stock. It just means that right now articulating a reason why the stock should go down is increasingly and incredibly hard to find. Will also change the calculus almost pushing us into the black. Thats what makes is so impressive, this earnings beat comes in a quarter where were expecting the worth quarterly profits since the agree recession. For them well also look for signs of strength in the consumer. Tomorrow after the bell im going to be watching kraft especially after that combo. Because that is a big question mark. In other words when the weather warms up here a bit, does the stronger u. S. Consumer start to come out . Very quickly. Visa goes as well. With the last Earnings Report there was a lot of info in terms of what consumers say so thats always an interesting without any insight there. I probably got a slightly more measured world view just a moment ago visavis. Ive been covering energy and finance f. With a couple weeks ago. It was a mixed bag. We had some strong decent beats on the top and bottom lines, but people are waiting for the fed there, as they are in in many other aspects. So youre right. Youre sigh close come out so that tells you at least the Retail Market thats been supporting the price of oil and the feelings about the oil market is going away, at least temporarily temporarily. Thank you everybody. That does it for us on closing bell. Fast money is coming up in a few moments, melissa, with those comments . Thank you, kelly\s fast money start right now. Pete najarian natesh guy adami and karen finerman. Surging iphone sales in china apple saying its going to give back, sitting on almost 200 billion, full our, rossen blatt securities is listening into the call as it gets under way, and well bring you the headlines as they break, but first we have headlines of our own. Josh lipton just sat down with ceo tim cook. Lets get straight to it. Josh . Reporter