industrial average very quickly. up 17 points, so mandy referencing whiplash. should be a very interesting, and very important last hour of trading. >> and abercrombie & fitch -- >> the most important hour of the trading day. >> that's what they like to say. abercrombie & fitch up 12% year-to-date. "closing bell" is next. and we do welcome you to the "closing bell." i'm bill griffeth at the new york stock exchange, where this market is taking investors on that proverbial roller coaster ride. welcome aboard. >> thank you, i'm kelly evans standing in for maria bartiromo. the stock market is firmly in focus in this final hour of trade. things have turned around, the dow about up 14 points. the s&p down a little bit weaker, up about a tenth, the nasdaq, bill, is down about a

tenth. >> i told you, that one's closer. >> did pull it a little further. >> a top investor today saying this rally will only last as long as ben bernanke and the fed keep their foot on the gas pedal, and the moment they stop, he says it's all over. is he right? we're going to look into that question that's obviously on everybody's mind. >> dominating a lot of the discussion. also, a very exclusive interview with dreamworks' ceo, katzenberg. he's making a new show exclusively for netflix. he'll be here to explain his view of the future of television and film. >> this company he's buying has 57,000 youtube channels. >> isn't that remarkable? >> it's a collection of 57,000 -- you can imagine at least one of them is going to get it right. >> crazy. as you study that, we'll talk more about that, the katzenberg interview, coming up. the dow opened lower, up 86. now we're just up 13.

who knows what the message of the market is today. we'll talk about that in a moment. but the dow is, any positive close, a new all-time high. nasdaq maybe dragged lower by apple, which fell below its 50-day moving average earlier today, and continues to defy the odds. it's down 20% this year, apple is. even as the nasdaq was setting these 12-year highs. we're at 3456 right now. there's the s&p. any positive close there for that one will be another new all-time high. we're up 2.25 points. in today's closing exchange, we have chris retsler, and our own rick santelli, of course. larry glazer, i mean, we talk often about this wall of worry the market climbs. u you say the market's already gone over the wall. >> you know, they say the bull markets do climb a wall of worry. the news flashes were over the wall and on the other side,

we're looking at green. that's what we're seeing here. the advice to investors is, don't be afraid to take a profit. don't be afraid to transition your portfolio, and don't chase what's going to get you in trouble. some of those income-producing stocks may burn you. you may be overstaying your welcome. it pays to be vigilant and not get too greedy or complacent. >> and you're also saying that some of the bigger income-paying stocks are too expensive here. that it's time to get cyclical, yeah? >> look, since the beginning of the year, one of the greatest anomalies we've seen in the market is that the defensive sectors and defensive stocks have had their greatest relative returns in the bull market ever. and so you look at the street, when that happens, it doesn't necessarily imply bad things for the market, but it does suggest a shift to some of the cyclical areas, which are quite attractive, are worth it. >> i guess the question is, why do you want to get exposure to some of those areas now, especially some of the industrials, when you have commodities underperforming, when you've got the china story that's still a concern? >> i want to sort of separate a

trade versus an investment. a lot of the areas of energy, commodities, and industrial tied the to those areas, you're absolutely right. a huge overinvestment is not going away in the area and the stocks will be nothing more than trading vehicles. i'm really much more focused on some of the industrials tied to the housing, tied the to the consumer side of the equation, as well as some of the financials, which have lagged in the rally. >> chris, you agreed with larry, you say it's time to start trimming back here, don't you? >> we've certainly seen a lot of defensive names outperform and lead the mark higher. one area that we spent a lot of time is information technology, which has significantly lagged, partly due to the underperformance by apple. but, you know, we would be trimming back some of the winners here and looking for opportunities over the next summer to be getting into some more cyclical names, as your other guests are identifying. >> chris, does the performance of the market here, we've been talking about new highs, going back and comparing this rally to some of the strongest ones we've seen historically, does that

worry you? >> i think a correction would be very healthy. i don't foresee the fed making any major changes here going forward. they've been very accommodative around the world, and that's very good for stocks. but a pause would be a very healthy thing for all equity investors right now. >> rick santelli, i noticed even as the stock market was going higher, that the yield on the ten-year was also going higher. they were buying bonds and selling stocks and it reversed itself midday. what's going on. >> as you look at the charts, and we'll run through it, a one-day chart reflects what you're saying. the two-day chart, not so much. we're hovering near two-month high rates, going back to mid-march. and today's a very significanting day. because for the most part, you had fair soft data in the u.s., industrial production, capacity utilization, to the sponsorship by foreigners of dollar-denominated financial assets was soft. gdp in europe was soft. it was soft in europe as well.

but yet the dax turned around and went uh, even though the euro didn't. i guess what's the long and short of it? if we didn't have the fed and their buyback programs and all the management of interest rates, i would say you would be crazy to get out of stocks. but who knows? corrections are associated with really free-moving and pricey markets where capital has a risk premium and a price attached to it. it's very difficult to say how long you're supposed to say. somebody's afforded us a gift horse. if you're an investor, you can afford to be in stocks, but nobody knows how much of a gift it is, what percentage is the real economy, or when it's going to go away. >> larry, what's your reading here, as rick mentioned, some conflicting signs in the market. what's going on in trade today? >> absolutely. when we look at the bond market, i actually would argue that higher interest rates would be a bullish indicator for the market. it's interesting that when we look at the sell-off in gold and in commodities, it's provided a source of funds for the rest of the market. the missing component here would

be able to justify why we have a zero interest rate policy, if we have an approving economy. that higher rate would enable the economy to move forward. it would tell the market, we should be hiring people and things are okay. take the foot off the gas if you're the fed and we can allow the economy to normalize when rates normalize. and that is just beginning to happen. very bullish week. >> by the way, before we go, larry, we showed a chart a moment ago. i want to get your thoughts on this, where we highlighted that google so far this year is up 28% while apple is down 20%. what's the message there? >> well, the message is obviously, don't overstay your welcome in a stock that has leadership capabilities like apple did. you know, stocks get overshipped to the upside and the broad market may be doing that, they can also overshoot to the downside. value is a relative position here. and as apple sells off, all of that money transitioned into google and the market anointed it king and leadership in technology and leadership in the

market. that's great, but all of these stocks may actually be cheap compared to some of the defensive income producers that have become a surrogate. so look hard, look fast, and be vigilant in your portfolio. >> all right. thank you all. good to see you. everybody loves cyclicals right now. >> suddenly financials are a darling child. >> once again. >> this is isolating it from some of the concerns we're seeing in china, seeing from commodities. frankly, the market indicators today are all over the place. >> yes, they are. bob pisani, you have to make sense of it. make sense of it for us. >> let me show you the market leaders in the stock market and then we'll get to the global stuff. first of all, retailers having a great day. macy's beat expectations, raised the dividend 25%, increased the whyback, reiterated their aps guidance for the year. historic guidance for macy's bringing up all the retailers. machinery, a little tougher. deere had good numbers, but guidance was a little disappointing. mostly the problem was a construction site. but they're also big in farm equipment and generally farm equipment has done pretty well. a little profit taking pushing

on the machinery businesses. you were talking about the message of the market, bill. here's the problem i've got. yes, stocks are at a new high. the pressure of bonds, up a little bit. but we were under pressure for weeks. here's the tlt. because we're cutting back on bond purchases? the dollar index, i'm not sure what to make of it. it's been rallying, because the u.s. economy is getting better, or because we're engaged in currency wars all over the world that start to show up in the dollar right now. and finally, commodities have been under pressure for a while. copper, sinzinc, aluminum. commodities have done a little better, but all to the dun side today. what do you make of this contradictory stew, you guys? that's the problem i have. it's contradictory information. i guess this is exactly what you get when you have zero interest rate policies globally and the qe3. it creates these asset classes inflations and deflations that make it very tough to get a coherent picture of what's

really going on. guys, back to you. >> that's well put, bob. thanks very much. look, oil prices have also been struggling to find direction today. gold continuing to decline and bertha coombs is at the nymex with more. bertha? >> energy in particular today, very curious, kelly. we had the eia numbers, the inventory numbers showed a decline in terms of crude supplies, there had been an expectation for a slight build, but we saw a big build when it came to gasoline. last week, refiners produced more gasoline and there was really no demand for it, but that does put us in a good position as we head towards memorial day. we are 12 cents below where prices were this time last year and right on par where they were for memorial day. the beginning of the summer shouldn't eat into people's pockets too much more, at least when it comes to the gas pump. we saw some covering here until afternoon, prices did recover. nat gas moving higher ahead of tomorrow's report, a build of 97

billion cubic feet and they're starting to look ahead to hurricane season. accuweather forecasting a very active season this year. >> again. >> yes. >> when was the last time they said, it will be a quiet season? >> it's been a while. but it hasn't been as active, you know, as back we saw in 2005 and 2006. >> i just wonder where? isn't that as relevant as whether, whether it's going to come up that northeast corridor again? causing so much destruction. >> we hope it doesn't go anywhere, actually, but hope it doesn't come up the northeast corridor. >> by the way, one of our viewers points out that yahoo! beats apple and google in terms of performance. it's had a tremendous year, ever since marissa mayer took over last summer. we are heading towards the close. we have a gain of 31 points, but that doesn't begin to tell the story for the market. we'll continue as this hour unfolds towards the closing bell here. >> also, a few people thought a

green ogre could make 3.5 million around the world, but that's exactly what they've done so far. up next, jeffrey katzenberg will join us to tell us about his next big moneymaker. >> and aig has made a major comeback, but is now the time to dig in on that chart. we'll hear from the company's ceo, bob benmoje coming up. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k) or you are ready for retirement, we'll help you get there.

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as we mentioned, dreamworks animation is betting big on digital. one way they're doing that is through this acquisition of awesomeness tv, a teen-oriented company with more than 57,000 youtube channels and 14 million subscribers on google's youtube. >> those are huge numbers. plus, dreamworks is making an original series that will air exclusively on netflix. so what's behind the animation giant's digital strategy? let's ask the ceo. joining us now in a cnbc exclusive, jeffrey katzenberg and awesomeness tv ceo and founder, brian robbins. >> welcome, welcome. >> thanks for joining us. if we can start with you, why

choose awesomeness for this project? >> i think two things. i think they are building an incredible new platform. it's a new kind of content, that's sort of this short form that is just really so beautifully suited to mobile. and as we all hear every day, the world is headed mobile. and i think just as importantly is we have this amazing founder and creative force behind awesomeness tv, brian, and we're just so excited and impressed with what creatively he's been doing. >> no disrespect to him, and i'm not going to speak of him in the third person, he's sitting right there, but jeffrey, what you seem to be saying is that, i would think that the barrier to entry getting on youtube would be nothing, but you seem to suggest it's more effective to buy it than to build it yourself. >> well, no, i think that the

enterprise that youtube is building, we think, is a platform of today and of the future. and it is a place of enormous, enormous opportunity. brian has already built an incredible business there. he'll tell you the statistics behind it, which are extraordinary, continues to have incredible growth and engagement. but most importantly, he creatively has had a great vision for this. it's got annen amazing audience. and we just want to build on and give him the resources to keep going. >> yeah, brian, if we could actually pick up on that point. so 57,000 channels, this is what really caught our eye. why is it you decided to go with that number of channels as opposed to, say, pumping it all and all the focus into maybe a dozen or so. >> and name 1,000 of them. >> well, the truth is there's the awesomeness channel which is the main hub, which is what we started first, which is where all of our original programming

goes. that channel has 500,000 subscribers and over 100 million video views in ten months. and that's where we make our original content. the multi-channel network under it is really about kids coming to participate with us. so for the first time, we're sort of blurring the lines between consumption and participation, meaning kids are consuming the original content we put up, but they also want to participate and make their own content. that's what that multi-channel network awesomeness is and it's actually 16 million subscribers and 60,000 channels, but truthfully, there's over 150,000 channels that have signed up, and they will all be part of the network very soon. >> so we want to know when the bill and kelly awesomeness channel is coming. >> we can be that interactive as well. how do you monetize that? how do you make money on that? besides getting $33 million from jeffrey katzenberg. >> that's a very good start, very good start.

obviously, there is the traditional advertising revenue. also, we're working with different brands that are sponsoring our programs and integrating in our shows in a new and different and exciting ways. and then we make a lot of original content that is available, that we will move to other platforms. we're moving a half hour of sketch comedy show that we do every day on awesomeness to nickelodeon this summer. we had a movie released in theaters this spring. so we're sort of a new media company. we're not just a distribution platform. >> jeffrey, people have been speculating for some time about taking these brands that you guys have developed, the likes of "kung fu panda," even buying the "lassie" rights and moving those into more tv content. but why did you decide to go digital, instead of sticking to a trage strategy that would put you in more homes overnight on a more traditional model?

>> there is the more traditional television and we have several series on nickelodeon, on the cartoon network, "how to train your dragon," as you mentioned, we have a series premieres on netflix, the first half-hour animated show to premiere on netflix, which is growing into an incredible platform. those are all great businesses for us. and we still are committed to them and they're very good revenue drivers for us. what brian is building is really what is the next great platform. and it's not instead of television. and i think that's where the miss is in this. you know, that 20-minute, 30-minute, one-hour sitback experience is very different from what he creates and what exists on youtube, which is a mobile experience, it's what i call in between. it's those moments where we're waiting and have opportunities to fill these gaps with short form content. >> but don't we hear statistically and anecdotally that teens are watching less

television and they're going more online. they're doing more mobile things, more digital things. so i'm not sure i buy your premise there, jeffrey, with all due respect that it's not a migration from one platform to another, because i think teens doing that now, aren't they? >> it's very true that teens, first of all, they're on their mobile devices all the time. i have two in my own house, which is how i ended up in this seat to begin with. they have both the time and the appetite to consume a lot of content. it's just that they consume it much differently than you and i. they don't have to lean back and watch a half-hour show. they're fine leaning in with their headphones on and experiencing things little bites at a time. whether that's, you know, on the way to school, whether that's in between homework, whether that's actually watching tv at the same time they're watching something else on their device. i don't necessarily love it as a filmmaker, but it is the reality. >> and bill, i just have to say,

which is, we shouldn't lose sight of, there are more people watching more television today ever in history. you know -- >> it's just where they're watching it. >> thank you! that's it. so maybe there's some decline in one platform to another in this or it's being distributed many more different channels and different ways of receiving it. but there's more television being consumed than ever before and, frankly, there's more value in the television business than ever before. >> and jeffrey, just to be clear, because you've talked about how these are complimentary moves, are you ruling out the possibility that we could see a more traditional half-hour like program under the dreamworks name, still on a more traditional tv channel in the future? >> you are. you're seeing it today, kelly. >> but new stuff, we're talking about. >> sure, absolutely. you know, we just sold a tv show to netflix, "turbo" off of our summer movie coming out july 17th in a theater new you. >> i find it interesting you consider netflix a traditional

tv outlet now. >> well, we think they are. >> how the new normal begins. >> brian, lastly, what is that $33 million in cash mean to you? >> it means more devices for my kids, i guess. >> a college education. that's what $33 million gets you these days. two kids through college. >> barely. >> thank you both. good luck with the new venture there. thank you both for joining us. >> thank you. >> see you guys. by the way, can mobility bring new life into the struggling video game industry, he asked? we'll speak exclusively to take two ceo strauss zelnick. that's coming up in about an hour at 4:30 p.m. eastern time. in the meantime, with about 35 minutes left in the trading day, the market's up 23. it was down on the open this morning, then it was up 86 or something on the dow, now it's come back again. i don't know who knows -- >> and crawling up a little bit higher into the close, but still not seeing a ton of momentum. meanwhile, aig was written off

by the market after its 2008 bailout, but the stock has made a pretty strong come back, rallying nearly 50% over the past year under the leadership of ceo bob ben moshe. up next, we'll hear from him and ask the stock pros whether it's too late to jump on the apple bandwagon. >> and the apple stock has a tough day after two top hedge funds do some major selling of that stock. coming up next, we'll ask whether you should follow their lead. hey, what's going on here?

do you want the long or the short answer? long i guess. chevy is having a great-deal- on-the-2013-silverado- but-you-better-hurry- because-we-don't-want-to-see- a-grown-man-cry-spectacular! what's the short answer? nice. [ male announcer ] the chevy memorial day sale. during the chevy memorial day sale, current chevy owners trade up to this 2013 chevy silverado all-star edition with a total value of $9,250. plus get america's best pickup coverage including 2 years of scheduled maintenance. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future.

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today and we're not talking about the fourth of july kind either. eamon javers has details. >> attorney general eric holder is testifying before the house you di judiciary committee. this meeting has gotten extremely heated, as heated as i've seen it with a cabinet secretary up on capitol hill. take a listen to this exchange. this is darrell issa, a member of congress here, who opened his questions by playing a voice mail recording of a department of justice official. that's on a separate issue than this whole irs investigation, but it got very heated very quickly and it gives you a sense of the tensions here in washington. take a look at the exchange. >> when i look at the request and try to be as responsive as we can. i'm sure there must have been a good reason why only the to and from parts were -- >> yes, you didn't want us to see the details. mr. attorney general -- >> no, no. >> -- knowing the two -- >> i'm not going to stop talking now -- >> mr. chairman, would you

inform the witness as to the rules of the committee -- >> -- is too consistent in with the ways you conduct yourself as a member of congress. it's unacceptable and it's shameful. >> guys, you just don't typically hear members of the president's cabinet say that a member of congress is unskpenl shameful in a congressional hearing. that's just not the way these things typically play out. and it gives you a sense of just how tense things are here in washington today and particularly for eric holder, the attorney general. and remember, of course, that holder is now investigating through the doj and the fbi this irs situation and darrell issa, the guy he was fighting with in that exchange is also investigating this. so in theory, although they're in different parties, they're on the same track here in terms of investigations, but obviously no love lost between these two men. also, one other thing to bring you up to speed on. nbc news is now reporting that a senior irs official has told congressional investigators that two irs employees have been disciplined in relation to the tax exempt screening of

conservative groups. we don't know the extent of that discipline, what that exactly means. we'll try to figure out for you, but a lot of unfolding here and that's got a lot in washington pretty hot under the collar. >> surprised to see that as well. eamon javers, thank you, sir. speaking of government bailouts, aig has made an incredible comeback following its bailout in 2008, but is it better a company now than it was before? mary thompson has all the details plus an interview with aig's ceo, bob benmoshe. >> we had a chance to speak to mr. benmoshe earlier. benmoshe the engineer behind the company's significant turnaround and his answer to the question, is the company better off today? well, in some ways, he said, yes. >> i think it's a simpler company, more focused company, so therefore, in my mind, easier to manage and one i think that is much more secure for the future. so i think it's better from that point of view. >> a better future for aig means

addressing rating agency's concerns about the company's funding profile, getting the okay to pay a dividend or buyback stock from the federal reserve, once it officially becomes aig's regulator, and most of all, improving profitability at its core pnc business. here's morningstar analyst, jim ryan. >> i would say that the pnc operations, as they are constructed today, would be considered to be an average performer, if you will. >> the pnc business, the crown jewel of ai girks, before its near collapse. now that the company repaid the government at a profit, its focus is on to the domestic life insurance business and property and casualty. where it's not as profitable as its peers. still, better underwriting and higher premiums the in the business did help drive better first quarter profits and a 40% plus gain in the stock over the past year. however, analysts say any future gains in the stock will depend on future gains in the pnc business's profitability. bill, back to you. >> mary, thank you.

let's talk about that. will aig add profits to your portfolio in the future. we have zack carabell. rich, walk us through that chart. >> i don't know if it's a better company, but it's clearly a better stock chart and one we think has significant upside from current levels. when we look at this chart, we see it's tracking this bullish 12-month trend channel, riding that wave of the 200-day moving average. earlier this month, we get a bullish breakaway gap. now, the combination of that bullish breakaway gap and the upside breakout from that trend channel suggests that the bullish trend is accelerating to the upside. we think the stock can reach $53 a chair. >> all right, well, zack, you going to buy it? >> i am not. it's been an amazing stock, no argument. it's got this sort of charismatic, straightforward ceo, which you have a lot of in

the media, because he actually answers questions and doesn't just talk from talking points. but the reason aig's stock went up is because it recovered from near-death and is well run. it didn't go up because the chart looks good, it went up because the company looks good. but going forward, insurance is insurance. it's a steady eddy business. it's not going to be the most bang for the buck. i'm sure they'll pay a dividend, but there's about a hundred places i would rather go if you're looking for something dynamic and interesting. >> i think he was dissing chart watching. >> we don't ask why a stock goes up, it's going up. and let bygones be bygones with this name. keep in mind, we're still 97% below the bailout adjusted high of over $1,200. so clearly there's some room for further upside in this stock. >> asked not for whom the chart tolls. look, it's more that this stock in particular strikes me as a fundamental story to date. it could be a technical story going forward, but i see no fundamental reason to be in this when you could be in so many

other things that are interesting. so today i am neither dissing technical analysis nor aig. i'm sure i will do both in the future, but not now. >> the bell tolls for thee, zach, the bell tolls the for thee. you want to be a buyer. >> oh, parting is such sweet sorrow, but we must go. see you later. where is this going? you can catch more technicals and fundamentals on the new online edition of "talking numbers" at cn cnbc.com/talking-numbers. >> speaking of online strategy, you know, the number of outlets now, even for a channel like cnbc. >> go online, get it there. >> for those of you with shorter time frame. or should we say, attention spans. let's see, the dow now up about 44 points. so the slight rally into the close continues. the s&p trying to add 5 or 6 points, but up 0.3% at this point. the nasdaq distill lagging and fighting to joining the other two. apple weighing on that

performance. in the global economy, what happens over there doesn't stay over there. things that have nothing to do with america can still really hurt the bottom line of companies right here in the u.s. what am i talking about? we'll find out what your exposure is and how to protect your investments, coming up. and speaking of risk, we'll hear from someone who says this market setting itself up for a huge sell-off when the fed finally starts taking its foot off the monasteetary stimulus g pedal. i think we've heard this one before. >> yes, we have. >> stick around. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, tdd#: 1-800-345-2550 and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-866-294-5412.

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well, to study our market's historic rally, a host of risks abroad are starting to worry some money managers here at home. >> that's right, cnbc.com's jeff cox writing about this issue today. also, wolfgang coaster of fire apps joins us now. jeff, first to you. look, the dow's been on a pretty good run. why are fund managers still scared? >> kelly, first i want to say, welcome back to the usa. so glad to see you back. >> oh, thank you. >> things are cheaperi inover h, finding again. >> love not being hit by that exchange rate every day. >> well, there are three things, the number one thing, europe, we know that. the other two things that have

caught my eye that have moved up the ladder as far as up the risk ladder has been number one, those fears of a china hard landing are back again. we saw the gdp number from last quarter come in a little bit lower than expected and now we're seeing some scrambling to institute some reforms. so some nervousness there. and going right along with that is this commodity crackup, worried about the deflation in commodity prices, the fed for all of its money printing has not been able to boost final demand. so it's translated into higher cash allocations and lower cash allocations, despite the strong rally. >> and when companies do business here and overseas, they have to worry about currency exchange rates, but if all the central banks out there are having this race to the bottom with their monetary policy and pushing their currencies down, how do you hedge against currency risk right now? >> you make sure you end up being currency agnostic. you make sure you really

understand your exposures and manage that accordingly. so obviously, you can't just simply hedge the top line, but you have to hedge it so it doesn't end up in your earnings per share. so if you have an ibm that comes out with more than ten cents eps impact due to currencies, not very acceptable. you have companies like act censure or google or yahoo! coming in, they're not impacted on the earnings per share. you have to understand your exposures, on your top line, and then you have to understand what expenses you have to offset that. and by the way, the average company is roughly 200 currency pairs that they're managing. not an easy job, but very doable with companies like fire apps. >> wolfgang, when you start looking around, thinking about the next crisis, it sounds like using a lot of derivatives projects to try to hedge against this risk could be one of them. kinds of strategies are companies implying here? are you seeing any sign that they're turning from something more conservative towards something more innovate i have, ie, something we might need to be worried about down the road? >> i think what they're really focusing on first is really

understanding their exposures. historically, it's been okay to understand, say, be confident about 70, 80% of your exposures off your balance sheet. that's not good enough anymore. what they're trying to understand is what do all of these exposures mean and are they going to be less than 1 cent eps on impact. when they understand that, then they look at the strategies. they're actually staying pretty simple and plain vanilla on their strategies with derivative prospects. >> and jeff, which companies are we talking about here? especially when it retains, for example, to japan, where the yen who break through famously to the dollar mark recently. >> in a big picture, bill, you want to look at the manufacturers, but as far as specifics go, it's going to be the automakers that will have to watch out for this. that's where they really compete with the yen out there, in terms of trying to export cars, export a lot of cars in canada and elsewhere. steelmakers, to some extent as well, but it's really just a manufacturing sector, which has been under so much pressure,

we've seen some of the weak economic numbers that have come out, the new york fed number on manufacturing was poor today. that's where the pressure's really going to come. >> all right. gentleman, important topic. >> if i can interject -- >> i wish had i more time, wolfgang, but you can read more of jeff's writings on cnbc.com if you want more information. >> wolfgang was also saying, look, aflac, some of the biotech companies, plenty out there who might have exposure who you might not be obviously thinking about. >> aflac very big in japan. and the dow continues higher now all of a sudden, up 53 points as we head towards the close with about 20 minutes left. hedge fund tiger management revealing it sold its entire stock in apple and that weighing on the nasdaq. tiger global management, an entirely different fund, selling 75% of its stake in apple. what does it mean when these hedge funds are bailing? we'll take a look, next. and after the bell, we're going whale watching to see what wall street's biggest investors are buying and selling. i guess whale has a different meaning to you folks in london right now, doesn't it?

>> yeah, makes you think a lot about something else in the news right now, jamie dimon and jpmorgan. >> that's for another time. we're back in the moment. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors.

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we learned today that hedge fund tiger management has exited

its stake in apple. that stock saw immediate reaction to the news, now down 3% on the day, 3.3%, which wasn't helped when another hedge fund called tiger global management, which is unrelated to the other fund, also sold a ton of apple shares. not good for apple. >> and what does it mean for a company like apple when big hedge funds start heading for the exit? let's ask steve nemeth from sun asset management. welcome. >> thank you. >> so is it an exit? >> we don't own it right now, but it's interesting, as a value manager, we've owned it over the last five years. typically when it's dropped to an 8 pe net of cash or a 10 pe net of earnings, it tended to be a good buy. now we're viewing nit a much different bay. the earnings growth has slowed is, but it looks eerily similar to nokia in 1998. >> to nokia?

>> yeah. to nokia. it's a tough comparison -- >> because of the trend patterns? >> and the business model. actually, we have an overlay here. if you put the peaks together, they've had incredible runs. apple has gone from 100 to 700. nokia went from 10 to about 60, almost the same percentage increase. they both had the best phone in the market. and at the peak, both companies had a strategy of taking that phone to bring it into international markets at a lower price on the. so for nokia, it hit their margins for the next ten years and affected the company's business. >> and the company is now in a struggle for survival. are you saying that's going to be the debate about apple? a company that's still valued at $400 something a share? >> it's going to get to a 10 pe pretty soon here at $4.23 on $4 on earnings. i might wait a little bit longer. i want to see what those margins are going to do. if they are implements exactly the same strategy of nokia, growing internationally, and it does affect margins, then earnings are not going to be as good as people think.

>> what about the hedge funds piling out here? does it mean anything? >> i think they're drawing the same conclusion. i guess that's how i should have started. i think the company hasn't grown as much as, the catalyst of buying shares back is in the stock, and what's growth in margins going to be. >> but wasn't the time to pile out 30, 40% ago? >> well, yes. >> exactly. and for a long time, apple was a momentum play. i mean, they were always coming out with a revolutionary new product, but now they're coming out with evolutionary products, adding on to what they already have in their product mixes. so isn't it possible, it's still a good investment, just not for those hedge funds that are looking for outside gains. >> and as a value manager, it might look like a microsoft where it's generating a lot of cash flow, they can grow their earnings at 8% to 10%. but i want to see them grow their phone business in asia at a good margin. and there isn't a lot of o evidence of that yet. i think we will know in the next three or four months.

and we'll be back of the stock once they see some penetration in china. >> where did you get out and where are you getting back in? >> i can't remember exactly, it was higher, but we've traded it two or three times in the last few years. but once again, when et gets to 400, i think everyone will have to take a fresh look. >> i can already tell the cocktail conversations i have with my friends, guys are saying, i think i bought myself a little bit of apple, it looks like a good bet here, and i didn't even hear that at the top. >> they'll be averaging down. >> it always makes me worry. but anyway, steve, thank you so much. we'll keep an eye and see if that sell-off continues. how long before the close? >> that would be 12 minutes, kelly. >> 12 minutes times 5, 60 the number of points we're looking at on the dow as we head into the final stretch, a slight rally continues. >> a math genius. up next, brookstone capital's dean zooid lays out

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back. about ten minutes left in the trading session. the rally remains mostly in tact, although for unknown reasons. so when is a good time to take some profits, when there's a correction coming, at some point. is it just not in the cards at this time? what do you do? we've got dean zayed from brookstone capital management. he has four trends to watch before making that decision and also joining us is matt cheslock. >> that's right. before we get to dean's trends, matt, let's start with you. a lot of people today, i was talking about this earlier, looking around going, we don't understand the correlations, what's going on with this market? can you help us? >> unfortunately, i can't. but it was great being here. but a colleague of ours, rich berry, came up with a comment that said that bull markets are born in pessimism, they grow in skepticism, they mature in optimism, and they die in euphoria. which leg are we in now?

we may be into the optimism stage here. so this may be at the tail end here. as far as we're seeing stocks the way they've been acting, we're starting to see some real frothy things going on here. google may be one, apple may be another one on the reverse side, but still, volatility will lead us to some point in the euphoria, and that may be the end. >> what are you doing? what are four trends we need to watch? >> european tail risk, monetary policy worldwide has been very easy, obviously. modestly improving u.s. economic conditions. and then the stability of the chinese growth story. if any one of those four start crumbling or there's some deterioration there, we think we'll have some problems. the one i would look at closest is the european tail risk. possibly resurfacing. you've got a merkel election in september. she may have to talk some tough love there to get re-elected. supreme court con testations in portugal and spain, against austerity. the one i would look at most is european tail risk rearing its ugly head again. >> do you think that's the story today, though? even when we get that german gdp

data that's crumby, look at what the german dax was doing, rallying on the news. what do you think it is that helps explain the confusion that's dominating -- >> i think a lot is the global monetary policy, worldwide. there, 283 easings in the last 20 months worldwide, 15 in the past month. this is part of euphoria that pat talked about. i don't know if the economy and markets are spaep speaking the same language, but we believe in reversion of the mean. >> i know it's dangerous to say it's different this time, but you do have fed intervention that's affecting the stock market right now. so can you use the usual metrics to measure, you know, the movements of the market here, when you get the fed with their thumb on the scale in a big way? >> we keep attributing this move to the fed. and obviously, it's a major influence. but when they do take it off, how quickly is it going to come off. how quickly is this market going to crumble? there are a lot of signs out there, i would be very hesitant to be that euphoric about this market. i really can't be. there are sectors you can play, and there are sectors in stocks,

especially as a trader, that you can get involved in. >> the big play right now, get out of defensives and go into cyclicals. defensives got us here so far, now go to cyclicals. >> we haven't seen the defensives sell off that dramatically. we're starting to see these big moves, but not these big sell-offs in some of these rotations. that's something to keep an eye on as well. >> appreciate your time. up next, we're coming right back with the closing countdown. >> can don't forget, cisco is moments away from releasing its latest earnings. we will have the numbers, the instant analysis, and the market response, and the fact that it could have an impact on tomorrow's trading as well. stay tuned. ♪

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♪ it's not rocket science. it's just common sense. from td ameritrade. two minutes left. a real roller coaster kind of a day. let me show you the dow and what it did today. this had traders scratching their heads. we opened lower this morning, we suddenly had a rally going up 86 points. we thought, here we go again. and then suddenly we went back to unchanged. now we're heading higher, up 54 points. i'll ask alan valdez to make sense of it for us in just a moment. in this next hour, we'll have cisco's earnings out. here's what the stock did today. sell-off on the open and just going sideways here as we wait for the report. the expectation is for a profit of 49 cents on $12.18 billion in revenue. alan valdez, what was this

roller coaster about today? >> first you had the manufacturing numbers, which were a little weak, but when they thought about it, it's actually good for the economy, because -- good for the market, because it looks like the fed will keep the pedal to the metal. >> and a big inventory rise. so the price of oil went down $2. and then it finished unchanged. volatility there as well today. what's the catalyst that's going to start the selling if we're going to see a correction in this market? what do you think the catalyst is? simply running out of buyers? >> there could be a couple, but running out of buyers, i don't see that happening, especially with news out of china, where they may let their public invest in america now. that will push up the market. all you need is a bad fed auction or something like that. that will put the sellers in real quick. but there's an old saying, you can't argue and you can't fight the fed, now you can't fight central banks around the world. everyone's easing, inflation's lower around the world. it's going to keep going up. >> still a good environment for stocks? >> without a doubt. >> thank you, alan, very much. going out near the top of the

day with a gain of 58 points on the dow jones industrial average. but, again, stay tuned, cisco out with earnings in a moment. we'll get the analysis and the market reaction on the stock that could set the tone for tomorrow on the second hour of the "closing bell." well, it's the rally that just won't quit. another day and the dow and s&p 500 closing at fresh record highs. welcome to the "closing bell," i'm kelly evans in for maria bartiromo who is on assignment. bill griffeth is here with me as well. here's how we're finishing on wall street. as bill said, it's been basically a melt-up. the dow not at the highest levels of the is education, but still adding almost 60 points. the nasdaq managing to join its compatriots, the s&p 500, adding about 0.5% as well. so a decent performance. now, in terms of the nasdaq, apple's been a laggard, but we'll be watching for earnings from cisco a