How about that tenyear note yield . We have eclipsed that 2. 5 number. That occurring yesterday. The dollar has strengthened. A lot of people talking about that, as well. We are going to be keeping a close eye on the markets, talking about what you can expect from here given that selloff yesterday. That move up in the yield, as well, in the ten year. We start with really a stunner in the bond fund world. Legendary Portfolio Manager bill gross leaving pimco, the Investment Firm that he founded to join Janus Capital effective monday. Janus says gross is going to manage a recentlylaunched Global Bond Fund and will be responsible for building out the firms global macrofixed income strategies. For those who may not be familiar with the fund marketplace, janus has always been an equityfocused house. Only recently having started a fixed income product, which i believe has about 12 billion or so in it, having started i think in the spring. This is stunning news. Monumental. In particular the man who began pimco. Allianz owns it now. He started it way back when and arguably the greatest bond fund manager of his time. How can you call him anything but that . Why do we have him on constantly . He knows more than most people. Lis hertis letters i find to bee best explanation. Has he slipped up here . His total return fund, in particular there have been outflows, clashes. Mohammed alarian cited him his 10yearold daughter writing a list as to why. There was potential tension between the two. Its stunning for a founder to walk out the door with a release and nothing more. Especially the particularly loquacious mr. Gross. We know hes one of the worlds richest men. Maybe he just got tired. Earlier this week we saw the article excuse me for picking up a paper and reading it pimco draws etf probe by s. E. C. Janus which is an okay equity house just got the biggest fish in the pond. There are people who will be loyal to bill gross because he is pimco. Allianz, big firm. We dont know. To speculate would be wrong. Bill gross is a fine man. We could say x, y, z. I wont do it because bill gross will have good reasons and i will feel awful i said its because of xyz. I take him at face value when he says its mixed blessings. All i know is it isnt youre only as good as your last trade in bond. This man has 2. 2 trillion over management. He had. Now hes going to janus offers him a deal. He gets to say where he is. He gets the Newport Beach office. Janus stock price is up sharply. We know there is a big back story here. This was head as we were heading to air. Hard for me to do some reporting, but andrew is offair in nantucket. Hes probably been able to do a little more reporting and can give us insight here. Any sense on what the back story is here . Let me tell you what i do know. I just got off the telephone. Im going to get rid of this, i have a little bit of back and forth. What i do know is the following. Here is the relationship in terms of how bill gross ended up at janus. The ceo of janus is dick weill. Dick used to be the coo of pimco. Thats the relationship and where it came from. Dick weill left pimco because of another problem, talk about a lot of infighting at pimco. Dick weill didnt get along with who the ceo of pimco used to be, bill thompson. He left the company when Mohammed Alarian got there. What i think has happened here is the relationship between dick weill and bill gross is the reason that we are seeing him back now at janus. Let me see if i cant get this back in my ear. I apologize. I cant speak i should say, i cant speak to whether he was pushed or left on his own volition. I can say this. A number of people very close to pimco had no idea. This is shocking and surprising everyone, not just in the markets, but people literally in the room. That unto itself is surprising. I whether he is gone and this is a surprise to them this morning. We will continue to find out whats going on. It is really the relationship between so many people inside pimco and all the different infighting and troubles between bill thompson, dick weill. Its remarkable where things have gone in all of this. The largest bond shop by far at pimco. A couple of headlines here from dow jones citing a source. Ill share them because we know theres going to be a lot more. Gross new he was being ousted from pimco. Again, this is dow jones reporting. They are saying they were firing him. This is with a source. And walked away without a severance package. Wow. These are sources being cited by dow jones. I share those as headlines. Severance for a billionaire nonetheless, he was responsible for creating it. There was obviously turmoil there allianz is not a place that likes turmoil. They are not doing that well right now we know that. I think thes interesting. One of the things to take a look at, Pimco High Yield Fund which is phk is off really badly in the premarket trading. This is not just an isolated, but fascinating personnel story about big personalities. This could have an impact on the fixed income market. Presumably what people are betting is he has to liquidate. I went over some of the top 50 holdings, top 50 junk bonds. You would be surprised how good the credits are. A lot of refinancings. That group is so sick. Bob pisani reporting really well yesterday. This will accelerate the down turn in that group which we know is probably, as you taught me, the achilles heel of this market. Just to your point exactly, a couple of emails im getting right now. Investment grade cds is wider by about two basis points. Thats fairly significant in that market or something worth mentioning. Pimco is the single largest holder of credit derivative risk. There are redemptions. Right. You have to sell. Hence, people start to look. Then they look through the portfolio. High yield. What do they own . Sprint, big high yield name. See what happens to the bonds. This is not just a personnel story, though a fascinating one for one of the well, the single most important figure in fixed income investing. Its also about the markets. You talk about sprint, nextel, chrysler group, hca, these are all hj heinz. It doesnt matter. If they are leveraged, they get sold if there are redemptions. Maybe thats part of the trade. Dick fisher was saying this is the area that is also the most vulnerable. This is the bubble. People want to call the internet a bubble. A lot of people saying there are multiple bubbles and they are all being one week ago we had alibaba. That is an ironic bubble usa today is talking about. What i urge to do is balance things between nike, nike being the proxy or metaphor for business in the world versus europe, where business is really fabulous. This pimco story versus the fact we actually want rates to go up a little because then the market at least is making sense. The cross currents are amazing. Bill gross iconic figure. Bonds, not so iconic. People are trying to short the market furiously. They dont know how to do it. They assume there will be redemptions. We see that a lot with hedge funds. Maynor markets trying to recover from the worst day in almost two months. Nasdaq down almost 2 . Apples 3. 8 drop leading a rough day for technology. Apple happened to be the worst performer on the s p 500 which was down 1. 6 . It was ugly. Can you average the two days . Sure. Ill give you that. Then you have a slight decline. We keep seeing numbers out of europe. You mentioned this many times. Whats going on in ukraine and russia and the impacts on europe and the likelihood of recession for countries that were barely growing to begin with. Right. I think is there a real edge fund bent to what is going on. There is a feeling that the fed has to raise rates. Thats been trumpeted by a lot of people. The problem is that if the fed were to take into account the world emerging markets, china, where obviously the export growth is minimal versus historic. And europe where things are bad. You dont want the fed to tighten if youre a holder of equities, obviously. Its the wrong time. Earnings estimates are coming down. Thats the next light. Earnings estimates are going to come down. We are going right into earnings season. It makes all the sense in the world to do some selling. I cant fight that because of russia, ukraine. There is a meeting between the ukrainian leaders and russia. Everything is being ratcheted up. The president is the leader of the ratchetup fashion. The president has been probably the strongest against russia. His words in front of the u. N. Were they were hawkish. Its hard to retract the rhetoric. At a certain point the rhetoric is so high that people are saying, what is russia going to do . Is russia going to nationalize visa . Meaning nationalize their Payment System and kick out visa a dow stock . I dont think that will happen. I think russia needs visa. You are going to hear that kind of talk because our rhetoric is harsher than their rhetoric. Our rhetoric, the president , is such a hawk on this issue that hes well ahead of the germans. The germans will bear the brunt of the problem. All right. Lets talk coming up, lets talk about nike, blackberry which posted a narrower than expected loss. John ford has an exclusive. There is a key clause for gross leaving. Keep that in mind. Okay. We are going to have a lot more on the stunning news out of pimco. Later on, hear what shark tanks oleary has to say about the selloff. Weve got a lot going on here. Take a look at futures on this friday. We are poised for a higher open. Hello. You can go ahead and put your bag right here. Have a nice flight. Music plays music plays traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the fewest cancellations and the most ontime flights are nothing if we cant get your things there, too. Its no wonder more People Choose delta than any other airline. Nike poised to open at new alltime highs. The dow component saying its flagship brand saw growth in every key category except Action Sports and golf. Nike adds it saw doubledigit growth in orders scheduled for delivery from september to january 2015. Theyre getting it right over there. This is really one of the great ironic stories. Remember youll see the stock up very much. This was the layup short. Thats what i was being told. In other words, theyre big in europe. 5 billion in europe. Theyve got china. United states, how could that do well . You have futures orders up 14 . 20 earnings per share growth. 170 basis points in gross margin expansion. The two countries they are weaker in . Only two. Russia and israel. Both war. You come back and say they talk about currency. They went out in the currency and said currency is not a problem. How do you grow 20 in china, 30 direct to consumer . Western europe up 25 . Whats at the heart of this . They talk about under armour and their ability to create new technology. This is big technology. Im going to sing mark parkers praises. He is one of the great competitors of all time. Whats the story here . It reminds me of i love lucy. You know why . No, i dont. You know how les moonves says he makes so much money with i love lucy . The jordans, its still the bestselling. Duran who is a hero to many people. Jeter. These people are incredible. We should talk more about those guys and less about the guys we all know without going into who is bad. World cup people thought it was onetime only. They used world cup to build their brand. Emerging markets strong. Is there any personalization of shoes is big. In the end, people will say im waiting for the hedge funds. Im using them as my personal villain today because they are fun to vilify. They are. Adidas had a horrible quarter. I think under armor had a great quarter. If you want to read a great quarter, read this thing. An analyst, first question, your ecommerce number is through the roof. 14 futures on the currency mutual basis. Nike demonstrates when you get too negative, you get hit in the face with a nike. There are a lot of put buys. You do. Went to that jeff coons exhibit at the whitney. We are talking about our lead story of the morning, which is bill gross going to Janus Capital. Walking out the door unexpectedly. Leaving from a 2 trillion plus asset house that he built in fixed income to join janus. And its fledgling effort in fixed income. I dont want to fly all over the place, but its a big story. Phk is a closeend fund. That is a closedend fund. I can rumor that down and be a moron. Therefore, what selling will take place among the names they have in the portfolio. You pulled the names the way you would for a hedge fund under pressure conceivably looking at the big fixed income names. And the name on the equity side being sprint which has well over 20 billion in debt out there in highyield debt. You think, samsung investment, not that strong. Valiant, pharma, giant. Say theyve got allergan. The liquidity is not great even for the individual issues except for sprint. There was a man who sat opposite us friday who is, who i think will buy every sprint. You dont go against massa. No. Do you go against reynolds paper . Philip morris downgraded today. You want to shoot against heinz. I dont want to shoot against heinz. You go after these etfs which have little liquidity and not necessarily the right trade. I should be talking about nike. Nike is very important. Im trying to get everything. Think about what youre going to be talking about for your mad dash. As we count down to the opening bell. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. A very busy day. Time for our mad dash. Well have more on that incredible departure at pimco of its founder bill gross. Lets talk sears holding. Ive got to fill me in on this. I saw Douglas Campbell out at sears canada. Sure, its declining in value. Seems thing to be unraveling faster than i think. The key for any retailer is confidence. Most recently, that came in the form of a 400 million loan from esl, the largest, the Controlling Shareholder along with Eddie Lampert of sears secured. Weve got a story st. Joes fair home, the big mutual fund by berkowitz owns 23 of sears and controls st. Joes. St. Joes may have wanted in on the 400 million and chose not to get in. St. Joes, giant real estate. Their 100 million piece would have been secured by real estate. They said in light of their investment criteria, they declined the opportunity to participate. The question on sears holding, you need financing going into the holiday. You need to have the confidence of your vendors. What about your customers . When you sell off all the good real estate, lands end was fabulous. Its done incredibly well. When you are a manager in stocks, a lot of the bad managers sell their strength and then have to keep the weakness. When you look at gary bolters report it was devastating. Quoting jim morson with the doors with the end. Its got to liquidate, losing 10 per share in value. That seems extreme to me. Berkowitz is good. He did get hurt on the banks on the way down. Ive got to be ready for a lot of this. Between his 23 ownership and lamperts ownership of 43 . Theres not a lot of stock out there. You talked about the confidence. This thing had nine lives. Eddie lampert decided who controls it. If he decided im going to back up the receivables, he is rich enough to do that. The big bet against sears has been made over again. Its not a new idea. One will be watching with so many others. We are going to have a lot more on bill gross unexpected departure from pimco. We may have a comment from mr. Gross after the break. 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We are looking at the realtime exchange. People interested after what we are going to do with a 1. 6 drop on the s p. We are 1. 9 below our alltime highs on the dow. Then weve got this huge news in the world of fixed income, which we dont talk about perhaps as often as i would like to. We should. One of the reasons we dont, its much more opaque. Its easy to look at stocks. People are selling these closed funds well below their asset value which theoretically