still waiting for more headlines out of san francisco. as for the dow jones industrial average. it is off about nine points on the trading session. s&p down about half a point, but the nasdaq's positive largely because of apple. ty? >> that yield on the ten-year bond. the one to watch above 220. that does it for this edition of "power lunch." >> have a great afternoon. see you tomorrow. "street signs" begins right now. stocks holding steady as the world watches apple, and the government watches us. the fallout from the snooping scandal grows, and one big public company is taking a big hit. the headlines starting to roll out of apple's big conference. we'll tell you what's been announced, and what history says about buying the stocks right now. plus, a man who says stocks in general are starting to look bubbly and not in a good champagne way, and knots to be outdoane done by dung doernt--

donuts, what krispy kreme is doing. >> i'll have to stick around for that. something to ponder. if the dow can get back in the black, stay in the black and close in the black it could have its first three-day winning streak since april 30th. haven't had a three-day losing streak all year and haven't had a three-day win streak in a month and a half. let's get straight down to the trading floor to see what's going on. bob pisani and rick santelli in chicago. bob, this morning the s&p upgrade, an endorsement that we're healthier, good to see stocks reacted well at first so why have we lost steam? >> other things besides that. by the way, the s&p announcement i think was good news. long term it should help lower the borrowing costs and short term we're enthralled with the fed tapering being cut. you can see the effect that china's numbers had. the weakness in china that we saw due to the trade numbers that we had really has had an

influence here. we've seen all the industrials, energy, consumer discretionary, interest rates sensitive stocks and i want to concentrate here. material stocks and commodities notably week on the lower trade numbers out of china. the thing that's the most worrisome is interest rate sensitive sectors. bond funds under pressure today. remember, i said a couple months ago, you start putting together two quarters of notable bond losses in the polls of and they will start squawking about it. put up what's going on. i want to show you what's happening with bond funds so the s&p 500 right now for the first quarter up 10%. so far in this quarter up 4.6% but look at long-term treasuries. the tlt, down 2.8% in the first quarter and down another 4% in this quarter. corporate bonds, the lqd etf, down fractionally in the first quarter, down 3%. starting to put together strings of quarters now that are on the down side. by the way, the long-term treasury, the tlt has been down

four quarters in a row. i think this is starting to get noticeable. if this ends where we have, and they send out the notices to the end of the quarter to everybody who owns bond funds and etfs like this, they will look at it again and say, huh, down again? i think this is going to start getting traction if this continues, and i bring this up because it's the endless rotation story we've seen. haven't seen massive money pulled out of bond funds, has not happened, but there's going to be a trigger point where people will start noticing, that and i think we're getting very, very close. >> hasn't happened yet but may happen. rick santelli, bob talking about bonds and kind of stealing your thunder. give us something bob didn't talk about. >> okay, i'll go right in his own backyard, too. let's look at a two-month charge of the cme group stock. notice which direction it's moving? pretty much straight up. now let's look at a two-month chart of ten-year note yields, they also moved straight up, but i think there's an issue that

will break that correlation, one of the reasons is, you know, we've been through a crisis. somebody remember that? and part of the reason was the over-the-counter derivatives. well, a process to rein them in has started to be implemented by the cftc as per dodd/frank, and what they are doing is you have to clear these things on exchanges. give you two guesses why that cme stock is up, but here's the other thing. this might be the mitigating factor to keep interest rates from going up because as collateral requirements are implemented, a boat load of pension and hedge funds that trade in these swap markets at the cme group, among a select few of exchanges that are cleared, well, what's going to happen is the collateral, like treasuries, is going to be sought after, potentially much deeper than current demand. we see it showing up in the repo market so that demand could easily offset some say, some of the rise in interest rates that is under way. >> we certainly hope so. rick santelli, thank you very much. let's get back out to the west

coast and more headlines are coming out of the apple developer conference, scott wapner monitoring it. what have we heard? scott? >> well, mandy, thanks so much. for an event that sold out in some 71 seconds, it's been fairly light on stock and market-moving news to this point. the better part of the first hour was spent on updates to the mac operating system. that's to be called mavericks and some of the features that you'll be able to use on the mac that previously you were only able to access on the ios operating system. that, of course, the operating system for the iphone and the ipad. a couple of those things, ibooks, again, going over to the mac, push notifications. the interesting thing is as they spend so much time focusing on moving things from the ios to the mac os, you wonder how the developers inside the building behind me feel about all of this. they make their trade really on developing applications for the mobile devices, the iphone and the ipad. i can also tell you an interesting note, phil shiller, the senior vice president for

marketing for apple is on the stage right now. he's talking about the updates to the mac book air and the mac book approximate talking about all-day battery life. that's a significant development, and it even addressed some of the issues out there and some of the criticism of apple about its perceived failure to innovate over the most recent term of what it's doing. he said can't innovate any more, my ass, to thunderous applause. trying to get that sound bite turned around so you can hear it for yourself but trying to throw something back at those who have been critical about the way apple has innovated or to what some would say is a lack of innovation in the most recent number of products or over the last several months as we watched the stock, as can you looking at right now, go from a hive $705 to $400 and change. right now it's at 445. the stock was pretty much at the highs of the day as tim cook took the stage about an hour ago. perhaps a little bit more than, that and we're expecting this thing to go perhaps another hour. likely to focus more heavily on

the ios. that's the operating system for the ios and the macs and the ones that these developers said snap up those tickets in just 71 seconds to be a part of this event behind me. will there be more significant announcements to come? internet radio and i-radio, a streaming service? just don't know. will there be a wrist watch, one of the things the late steve jobs became famous for at events like that. that's what we're all waiting to see but it appears phil shiller is on the stage so it remains to be seen really what happens from here on out. we'll bring you the headlines as soon as we hear them, guys and see what the impact is on wall street to those who only stock and those who perhaps wanted to only stock, what it all means going forward. >> it's got to be serious, scott, if he's brinking his donkey gosling into the picture. i can't believe he would call it his donkey on stage like that. thank you very much. >> we figured since it was cable it was okay for me to revisit that. >> of course it is, say that all the time. nothing wrong with a jackass.

they are fine. very good pack animals. >> all right. >> thinking of buying apple stock on the back end of this conference, you might want to think again, at least as far as history goes. i asked our crack data team here at cnbc to say what's the average return for the month of june for apple? yeah, there it is. june's is when the worldwide developers conference takes place and three of the last five junes the stock is down. the average return in the month of june is a negative 2.2%. by the way, speaking of dark skies, because that's kind of cloudy right there. that is a live picture of the nation's capital. at any moment now a woman on a bike with a dog in a basket could fly by that shot, by the way. >> and some flying monkeys as well. >> that is a live shot. that's not instagramed. that's the actual photo look in d.c. right now. >> yeah. can you even see the cloud moving to prove it. the second big story we're following this hour is a 29-year-old former contract of booz, allen, hamilton says he's

biggest source in the biggest leak in the nsa's history. let's get straight is to eamon javers following the story from the front. what more are we learning now? >> reporter: hi, mandy. i'm standing under the literal clouds here in washington. also sort of metaphorical clouds hanging over washington. over at the white house at this hour, white house press secretary jay karny is briefing the press. he's been very eager so far in this briefing which is going on as we speak not to say the words edward snowden. that's the 29-year-old analyst who came forward to the london "guardian" in a video they posted over the weekend on sunday and said that he was the leaker. he was the man responsible for three fairly devastating national intelligence leaks, according to the u.s. intelligence community. snowden said that he had access to a whole range of things, but during this briefing so far jay carney has been very anxious not to use his name. take a listen to this sound bite. >> there is obviously an investigation under way into

this matter and for that reason i'm not going to be able to discuss specifically this individual or this investigation, nor would i characterize the president's views on an individual or an ongoing investigation. >> reporter: carney did say, however, that the president has been briefed on the snowden situation. he would not say whether or not the president has watched the video interview with snowden of which, let me play a little sample here, what snowden says he had access to as an intelligence analyst and the capabilities that he had, an interview with "the guardian" that posted online yesterday. take a listen. >> i could be rendered by the cia. i could have people come after me or any of their third-party partners, you know. they work closely with a number of other nations, or, you know, they can a pay off any. any of their agents are assets. >> snowden there referring to the possibility of being targeted by the triads, that's asian mafia. obviously this is a guy with

allotted on his mind and a lot of worries here. all of washington really focused on who is this man. why did he do this? his stated explanation released over the weekend was that he released this information so that americans could have an opportunity to vet it for themselves and understand what their government is doing to them and in their name, but, guys, can i tell you that the investigation here into what happened here is just getting started. back to you. >> eamon javers, thanks very much. appreciate that update from washington. herb greenberg is joining us now because you've got a very interestingage israel. you've got a corporate acle, booz, allen, hamilton, not a company a lot of people know about, the stock is getting whacked today. you've got an interesting take on how d.c. operates. >> we're talking about third-party operators in this type of thing for intelligence and defense, and when i go into booz, allen's, hamilton 10k, they list a lot of disclosures sometimes you would say in normal types, ah, boiler plate but under the subtitle of

competition, it's what they said about -- that leads me to believe in the world of spy versus spy there is no such thing as competition. here's what they have got. say such things, when they talk about their competitors, we compete and collaborate with companies of all types of size. we strive to maintain positive and productive relationships with these organizations, and then this is the part that really got me going when i looked at this. some of them hire us as a subcontractor. we higher some of them to work with us as our subcontractors. we know that snowden was there for about three months as a subcontractor or working. >> feels very innocentious. we hire you, you hire us. we hire each other and let's all scratch ear owes's back. >> this is washington and when it comes to a story like this, this is the kind of thing no one was going to pay attention to because it's all in the fine print of documents of companies no one is really paying attention to. >> what's the takeaway then? >> the take away is that there is no competition in washington, especially when it comes --

>> that -- let's bring it back to the stock angle, if we could, good sir, which implies booz allen while falling, huddled in a pr room trying to figure out how to manage this, maybe it's a positive buying opportunity for this name if they are going to be the sole providener some respects. >> they are not sole provider. there are other providers and they all worked together. never have i come across an industry where i say our competition is our friends. we work closely with them. want to make everybody happy. >> 98% of their revenue comes from government contracts. >> for all these companies the customer is the government. >> dating in a small town, my friend. eventually you'll come across somebody that your best friend dated as well. >> maybe your sister, just never know. like a little anecdote from home. third big headline of the day, guys. more concerns today about china's economy slowing down, even more, but is there a silver lining? joining us now from the eurasia group david gordon.

great to have you with us, david, and i'm really pleased that you've taken the angle i've often taken and that is slowing down at least in a manageable and slow pace is actually a good thing because we don't want the old administration's growth at any cost mandate, right? >> that's the real story here, mandy, that this news is not bad news. this is good news. >> explain it a little bit further for us then. what's the key takeaway in terms of why it's good news for the investor? >> i think the key takeaway here is that everybody expects that the chinese economy has to slow down over the next several years. the question is this going to be done gradually, and with a reform process? in the past the chinese have always stepped on the pedal as soon as they have hit any growth that looks like it may be coming in at under 8%. this time we have growth heading towards 7.5%. the government isn't hitting the accelerator. this is a government that is more risk acceptant, and i think

they are sending signals here that they understand that growth has to moderate in china, and they understand that if they are going to put reform on the agenda, they have to be willing to accept a lowered rate of growth without always coming in and bailing everybody out. >> okay. so they are not bailing anyone out just yet. not hitting the accelerator pedal just yet but to what degree in terms of the inflation has come off they have the capacity to hit the big accelerator should they need to? >> i think the fact that inflation is lowered actually will give them space to hit the accelerator later. if growth really begins to tank, that is if -- if the chinese authority sees growth coming in in 7.1 or understand 7, 7.2 even, they will now feel more confident in hitting the accelerator without worrying as much about inflation. that's the story here, it seems to me. >> david, in high school i had

to bring my report card home so my parents knew my grades. if college they asked me what i got, and i said a-plusses all around, because they didn't know. right? do you believe china's data, honestly, the bottom of your heart? >> i don't bleefrt china data at any given moment, no. >> thank you. you're the first person i've heard actually say that. >> but, but, let me come back and say i do think that with the exception of housing, which they underestimate its role in the economy so they overestimate growth maybe by a percent or a percent and a half, i think the numbers over the last 30 years are absolutely consistent with what we've seen on the ground. so is china growing at only half what they claim it to be over this time period? no, i don't think they are, so i don't think the numbers are wildly off. now, a lot of this growth is building into nothingness

though. >> sure. >> and i think that's what they need to make reforms so they don't build these giant hotels that nobody ever goes into. >> absolutely, and i think -- >> and roads to nowhere. >> it was tweeted out this morning that china is the mystery meat of global economies. david, thank you very much for your thoughts. >> great to be here. thanks a lot. >> all right. that's a great tweet, by the way. >> it is. >> breaking news out of washington, d.c. the president said to announce jason fermond to head up his council of economic advisers and if the name sounds familiar, steve liesman joins us. tell us who jason fuhrman is. >> supporter of the president been involved in different democratic campaigns but first and foremost he's an economist, and he's probably wonk in chief would be the job that's the job of the national economic council, a position that's near and dear to my heart. >> a wonk in chief position would be something you aspire to. >> i would like to think i serve

the public just fine in this role just here, but what he's going to do is advise the president on economic policies and ways to achieve those sorts of things. this is an interesting job because the guy who has been in this job at times is the guy with the primary ear of the president when it comes to economic policy, guys like bob rubin have been in this job and yet there's other times when the person the head of the nac has not been the person in the first order listening to the president. lesser people in the job. >> and in terms of his resume, he's been the key architect of a number of very key things, like i think the 2010 payroll tax cut, 2009 stimulus package, health care. >> i knew him before he was in government service. used to call him on issues of labor and government programs of social security and things like that so he's got a lot of expertise and been fortunate to watch him come up, and there's alan krueger, another guy, i would call him at the "wall street journal" or cnbc on labor issues, so these guys have an expertise and hopefully they advise the president when he comes up a policy.

>> fuhrman, an architect partly of the stimulus plan, right? without getting into a krugman-esque debate, can we argue that fuhrman is at his heart a keynesian? >> for sure. >> more spending equals goodness? >> is that grammatical? >> i'm going to amend that before i answer. i'm going to say keynesian in the sense that the government has a critical role to play at times of recession and underperformance of aggregate demand and fostering that aggregate demand and getting the economy back on track, jason would almost certainly believe that. >> let's certainly hope he's the right man for the job. okay. more news coming out of the apple developers conference or those fan boys out there and fan girls. let's get to scott wapner. what more have you heard, scotty? >> reporter: mandy, tim cook is actually back up on the stage after this first part of this announcement has lasted about, you know, a little more than an hour. cook was up at the beginning and then some other executives came

up. cook is back where he's finally talking about the ios operating system and the refresh or the updates that are being done to it. it, of course, critical to apple's success because it runs the iphone and the ipad. what's interesting here is that the stock, it actually dipped to the lows of the day. now, you've heard of sell on the news. this could be a case of sell on the no news because to most people who are watching today, you know, updates to the mac operating system wasn't going to move the needle, and that's where they spent the better part of the first 60 to 80 minutes of this presentation in the building behind me talking about updates that were available now on the mac, bringing some of the key features of the ios to the os operating system. that's why perhaps the stock moved to the lows of the day and perhaps reaction as well to the new design model of the mac book pro. there was interesting chatter going back and forth on twitter on what people thought about the new design. i think all of that plays a little bit of a role here, but as i said, tim cook is back on

the stage and he is talking about the ios that is critical and people in the building behind me, those that snapped up the 5,000 tickets in some 71 second according to tim cook, make their bread and butter designing applications to run on the iphone and the ipad so we're watching especially closely now, not only for this, but what, if anything, tim cook has to say about iradio, the so-called iradio. any sort of music streaming service. paying close attention to that and we'll bring you those headlines as we get them. >> scott wapner, thank you very much. all right, on deck. herb is back with five reasons that stocks may be looking a little bit bubbly. >> plus, mcdonald's proves breakfast really is the most important meal of the day, and if you thought the new dunkin' donuts sandwich was really gross, you ain't seen nothing else. all three indices now in the red. 0 hours can go by before i realize tdd# 1-800-345-2550 that i haven't even looked away from my screen. tdd# 1-800-345-2550 ♪

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always good when you get a good guy on the show, and it's not me. gordon bethune, and we're going to pick your brain in the generous time we have allotted for this. >> thank you. >> every time i board a plane, united/continental now, is that because of a better economy or fewer seats? >> fewer seats. we used to have 20 airlines, and we're getting it down to a manageable number. you're only as good as your dumbest competitor, but people are not throwing capacity out there anymore. managing the capacity, and that's why they are full.

>> airlines i believe are expecting their third most profitable year since 2001 but it's largely thanks to the fact that they are completely and utterly wringing us dry. surely there's not much more they can place a fee on so where is the next leg of growth going to come from? >> it's revenue and managing the capacity to make sure that the costs don't exceed the revenue and they are doing a good job. the new merger with american and u.s. air is going to be a plus for the economy. >> got the right leadership? new leadership announced today? >> smart people coming into the company. understand the equation, you know. they are not measuring market share but measuring profitability. i think sometimes, know, the creditors committees kind of slap them around a little bit and make sure they do the right thing. >> what's your biggest single concern right now about the economy? >> well, you know, you look at europe. i don't think it's going to have any gdp growth next year at all. maybe we'll have 2%. we see the s&p moving, but you don't see large international manufacturing corporations making capital investments. you don't see anybody hiring out

there. everybody is kind of holding back waiting to see whether this bump which i can think is cashing in on your dividends and capital gains in 2012, so the treasure gets a nice bump, but i don't see the jobs. >> what's going to open the dam then? what's going to let that all open up and start flowing? >> resolution, confidence, that we know what things are going to cost and what the government is going to do and people will make their -- >> confidence, stock market around record highs. a lot of good stuff happening out there. >> it doesn't comport with what everything going on. somebody smoking t.definitely the s&p is going up when there's no real reason for it. >> there is a reason in a bit, which is profits are up, and what scares me is why, right? companies in the downturn had to lay people off. had to run lean, now they are realizing, hey, we can run lean. we don't need to re-hire. >> absolutely. >> we can squeeze more productivity out of the current people we have because you probably lay off the people you might have wanted to lay off in

the first place anyway, will we ever see a return to significant hiring in this country? it's scary how many people have been unemployed for years, gordon. >> i think -- i think it's people. it's also inventory. you learned that you can live with a lot less inventory and that didn't get replenished like they have and all the behavioral adjustments leave scar tissue. measure twice, cut once. not going to hire a guy until i know that i'm really going to keep him for a year or two years. you just don't do it. >> you don't hire until the employee proves he can pay for him or herself over time. >> you don't hire for the short term because you don't want to have to lay them off in six months so you're looking for confidence that you know what next year is going to look like. have you seen any signs what next year is going to look like? >> i don't possess a critical ball? >> she is on msnbc, great number. brian asked you what your number one concern is so give us a little hopium here, our "street signs" coined word? what is your number one thing out there that you're feeling

most optimistic about? >> i want government as everybody does to resolve this impasse and get on with a -- if we're going to revise corporate taxes, let's do it. let's have a plan of spending, what is the spending level going to be. those are fundamentals, and so that doesn't seem to be any prague progress in getting those things. i hear a lot of talk, but we had simpson/bowles. >> if we can run this economy on talk, it would be great, especially out of d.c. that's the real alternative, clean energy, by the way. >> hot air. >> methane, some might suggest. gordon, thank you very much for joining us. appreciate your insight. more news coming out of the apple worldwide developers conference, so let's go back out to scott wapner. scott? >> all right, brian, thanks so much. you know, it's been interesting. tim cook is no longer on stage now, by craig federigi is, in charge of software where they talk about the researches to the ios operating system, the critical operating system that

runs the iphone and ipad. i believe you'll take a look at some of the pictures on the screens here. we mentioned how tickets to this event were snapped up in 71 seconds, 5,000 available, so the developers really wanted to get into this event which comes frankly at a bit of a strange time for a. the stock has been under pressure. some of the news flow hasn't gone either with the samsung patent decision that came down a week or so ago. there's been questions also about apple's inability to innovate lately. one of the most interesting moments that took place in the bidding behind me is when apple's chief marketing man, phil shiller, took the stage and struck back at apple's critics. >> can't innovate anymore, my ass. [ applause ] >> all right, yeah, that drew an obvious large applause inside the building when phil schiller said that. the stock, which was at the highs of the day, as we came on air, and as the keynote speech

began from tim cook about an hour and a half ago or so has now dipped to near the lows of the day. and as i sort of joked earlier, a sell on the news event, this could sometimes be, maybe it's more of a sell on the no news because there hasn't been anything eye-opening yet to come out of this event beyond the expectations which were somewhat lowered going n.no mention thus far of a radio streaming service no, mention of a wrist watch, no mention of anything television-related. no mention of anything else substantial from a hardware standpoint. no refreshed iphones or ipads, not that that was expected, but at least people were looking for something beyond just software refreshes. this entire thing was supposed to go a couple of hours, so there is, you know, about half an hour of that expected time left. who knows what that is going to bring, guys, but i would say that people are clearly looking for a little bit more than what they have gotten so far. >> let's hope they are saving the very best for last, but meantime, the apple stock has moved to the lows of the day, just turned negative there

briefly. thanks, scotty. we'll get back to you. still ahead on the show, herb and horses. >> and why this is proof people literally have too much time on their hands. >> yeah. >> that's the thing. man: how did i get here? dumb luck? or good decisions? ones i've made. ones we've all made. about marriage. children. money. about tomorrow. here's to good decisions. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your family's future? we'll help you get there.

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. that's the guy's name and he just set a new record. 802 hand collapse in one minute. i'm told, based on my poor math skills, that's 13 collapse per second. he destroyed the world record. why anybody would need to do this, i don't know. >> it's quite remarkable. actually very difficult. we've both tried and failed miserably. meantime, why don't we take a look at what's happening with the market out there. we're currently sitting negative for both the s&p and the dow. the nasdaq is back in the black. it was red just a moment ago. in just a moment's time we're going to be talking about how to spot a toppy or bubbly market with various signs or skees s o cues. that's the tease there and then

the belmont stakes winning jockey mike smith. that's all coming up on "street signs" on cnbc. it's monday. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that.

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welcome back to "street signs" live from san francisco outside of ale's worldwide developers conference where the presentations continue. most of them right now focusing on the ios operating system. that runs the ipad and the iphone. ten new features in ios 7. our jon fortt in the billing calls them bigger than he expectedings changes to the control center. can you swipe up from the bottom of the device to access brightness. multitasking for all apps, battery life enhancements, design differences. the icons clearly look a little bit different as you can see on the right side of your screen there, and also motion sensors, so many of these are things people have been waiting for inside the building as the presentations continue, guys. >> awesome. thanks very much, scotty. thanks for monitoring everything. okay, one of the five

telltale social warning flares of a bubbly market. well, let's bring in peter atwater, president of financial insights and, of course, our very own herb is back as well. peter, great of you to join us. which one of the five signs is the most troubling right now? >> oh, i think in fixed income it's clearly the -- the big truth. the single idea that everybody is has adopted which is there is no alternative, and you saw people reaching for yield all over the place because they felt they had no choice but to keep going into -- >> we asked our guests where would you go and they said there's really no alternative to stocks right now. everybody is peddling this right, peter? >> and they are, and that ties to the second point which is an abdication of risk management. at the top, people decide that the old rules don't qualify anymore. they have to change and stretch, and the whole approach is a clear risk management abdication, and it's really

striking to see bond funds now aggressively adding equities. they didn't close the funds. they merely said, well, can you buy this instead. >> go ahead. >> herb, i was going to ask you. you're always great about providing real life anecdotes and one of peter's things is sort of the novice coming back into the market. you're a worldwide celebrity. at your illegal poker games, people asking you about stocks again like 12 years ago? >> you're assuming i get out, brian. i think right now you're not -- i don't hear people talking about stocks as much. it's more there's -- there's a feel, which is why i wrote this piece in linkedin right now focusing on peter and his whole concept of social -- the social moods and how they impact the market because that's the point. there's one interesting point here, peter. you point out these five things. they all make really good points, the good points, but when you see this in the social mood, in the mood in the markets as you call it in your book, how long is it before you really can

say you're at a top? >> well, tops we hold on to with desperation like a cat being dragged across carpet. i mean, we -- we love confidence and overconfidence. you can't tell people that they are overconfident. they never believe you, so at the top it's a process, and what i like to see is saturation, and people getting strident about it. one of the things that i loved about the top in gold back in the summer of 2011 was that it felt like middle school committee you were either in or you were -- you were a zero, and that to me is what helps define tops. where i really see it right now is at the extreme high end, the real uber luxury world. you know, christy's talks about a new era in art and you have all these pencil buildings going up in new york city that are incredible efficient and expensive to build. you know, the "wall street journal" runs a section on thoroughbreds and how to house your horse in their manson

section, of all things. you know, these to me are all signs of extraordinary confidence at the high end. >> you know, it's not just stock markets. i had someone write in on the comments section of the linkedin section, i'm in silicon valley and you see some of the same signs there. they are different but look at big commercial rental rates. they look at the perks for employees currently in the valley, high levels. you sort of can feel it, you know, and it's an intangible of sorts. >> and they are talking about google creating a whole new hangar at the airport for its fleet of aircraft. i mean, that to me is just another sign of that uber confidence that you see at the top. >> and that's what you call organization complexities. you're number three in terms of signs to look for for a bubbly market and complexities doesn't really mean much to me but companies like google when they feel they are at its peak feel like they can do everything. they can do search and also have a full hangar full of planes,

right? >> they are excellent at google glass and google maps and -- >> i don't know if i agree with you on the google thing. you know how much i love you, but i think on -- your complexities using google as an example here, i don't know. they are a company that's a big lab, so, you know, i have to argue with you on that one point. >> let me give you a different one which you talked about earlier this afternoon which is what's going on in the consultant space in security, and the interweaving of who is a client, who is a customer across the public and private sector. that to me is a great indication of too much complexity at the top. >> that's well said, and a good way to end it, peter, but we'll get you back. i love these sort of macro philosophical discussions. it's good stuff. >> thank you very much. still ahead, palace malice, the surprise winner at belmont stakes over the weekend. coming up, oh, conclusive interview with the jockey mike smith who has more than 5,000

victories. >> wow. later on, why mcdonald's says breakfast is truly the most important meal of the day but first to bill griffith. what's coming up in the "closing bell"? two great hours of programming. google looking to buy its google mapping system. we'll look at charts on that one. also, one of wall street's biggest bulls is turning a little bearish. she will explain. how he feels you should protect yourful of in case of a summer swoon this year. and we'll hear from somebody who says the fed's easy money policies have made every asset class, not just stocks, overpriced. all that and more at the top of the hour. kayla tausche with me today. join us for the most important trading hour. meantime, more "street signs" and the jockey who would be the belmont over the weekend. after this. all business purchases.

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price range will be range between $200 and $300, a steal considering a of minolas range between $500 and $1,200. >> with a quarter mile to go palace malaise ease the final regular of the belmont stakes in new york giving hall of fame jockey mike jockey a win. palace malice had just one in seven wins making the victory all the more sweeter. mike smith has 5,000 wins, won the kentucky derby, 17 breeders' cup wins, more than anybody else. probably made a ton of money. a good guest on cnbc for a variety of reasons. mike, congratulations, take us through the last run and be honest when the race was over. when you got on that horse and got into the gate, did you honestly believe you had a chance to win? >> i truly did. i real believe i did, especially once we got away in good order. running down the backside, and he was doing everything i asked him to do.

i knew i had a big chance at that point. >> i believe that palace malice this time was running without blinkers. what does it mean in terms of making a difference with blinkers or without difference? >> blinkers are to make -- blinkers, they put them on to focus a whole lot more in the derby. well in the morning leading up to the derby. that afternoon it had rained so much and the racetrack was sealed that it made so much noise in behind me and he couldn't see them that he basically ran scared, ran right through the bridle, never took a breert or never never got into any kind of rhythm. took them off for the belmont and got into a beautiful rhythm running down the backside and doing everything i asked of him. i knew at that point he would run big. it was just a matter if i could hold him off going the mile and a half or not, and he sure did. >> ours is an investing audience, mike, and you hear about these stories, you know. people band together and throwing 10 grand and all of a

sudden their horse wins the belmont or kentucky derby. those are the stories you hear about because they are rare. is buying into or owning a race horse a good investment? >> it certainly can be, you know. especially, you know, look at palace malice owners, they're a syndicate. you don't have to put up all of the money nowadays. they have these syndicates nowadays like dogwood stables. just have a wonderful time. look at everybody who won the belmont. mean, here's a horse no one thought could do it, and he winds up pulling it off and everyone had the greatest of times. >> mike smith, congratulations again. a great victory. we hope to have you back on, because it means you won again. >> thank you. >> absolutely. >> thank you. nice to meet you both. >> you, too. coming up on "street signs" the mcbreakfast boom. >> and the nastiest food item you'll see probably this week. (announcer) at scottrade, our clients trade and invest

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all right. welcome back to san francisco, outside the worldwide developers conference on "street signs." i'm scott wapner. perhaps the worst kept secret has come to fruition in the building behind me. itunes radio is what apple is calling it.

it will be built into the music app of itunes. it is the streaming service that was so speculated upon after apple had, you know, signed a number of deals with record labels over the past several weeks. so now, in fact, they are rolling it out. don't know if this is their one more thing or their last thing before they leave the stage. this has gone on for now a couple of hours. there'll be no subscription, i'm being told, in my ear right now by our producers back at our headquarters. you can see sort of the demo that apple executives are now running through to, you know, a good amount of applause at the worldwide developers conference. so itunes radio is what the official name is going to be. and, guys, i'll send it back to you. if we learn any more details, i'm sure we'll bring it. you know, it's an interesting look at that stock, isn't it? this was widely expected by a number of people. the stock had moved to the lows of the day before this announcement was made. much of what's gone on in the

building behind me has focused on the new operating system for macs. most recently, the new operating system, ios 7 for the iphone and the ipad. but the stock is moving higher, as you can see here, back to where it was before, about 1% gain. >> all right, scott wapner, thank you very much. i think it's an interesting take. you know what else is moving, scott, is pandora. pandora, again, to scott's thesis, we all thought this was coming, and then the stock reacts when we get the announcement. i have people saying, you're late on the news, two minutes ago. get off the live blog and get in the real world. some people have jobs and can't hit refresh on the live blog. there's pandora down 3%. i guess this means my apple will buy spotify thesis is completely toasted. speaking of toasted, breakfast boom. that's what drove mcdonald's same-store sales more than expected. that doesn't mean you should buy the stock. rj, listen, a nice story, and breakfast all hours of the day,

blah, blah, blah, but do you buy it because of it? >> this is a rebound for mcdonald's, to their own admission from last year, it wasn't the strongest in terms of product pipeline. they had some hiccups on that end. they got away from the dollar menu marketing message. this year, they've done better on both fronts. the product pipeline, as you mentioned. the breakfast, egg-white sandwich helping to drive sales. done a good job in terms of driving traffic with the value menu. this is a nice rebound year. stocks trading about 16 times for earnings, and that compares with the rest of the group at 21 times. for a market leader like this, you don't get a discount. i'd be a buyer at this level. >> and we unfortunately have to leave it there. apple has been gobbling up some more time. >> we'll get him back. >> yeah, we'll get him back on. the late-night breakfast menu is something i could sink my teeth into. >> could you sink your teeth in this? coming up next, the most disgusting doughnut creation ever in our opinion -- i'd say humble opinion, but that would

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a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ ladies and gentlemen, i give you the krispy kreme's sloppy joe. yeah, ground beef, onions, tomato sauce, cheddar cheese piled between two glazed krispy kreme doughnuts. it debuted at the san diego county fair. it looks gross but probably tastes delicious. anyway, i want to show you what's going on with the stock with pandora and sirius. we believe they are down on the fact that apple is -- well, pandora is now up.

it was originally to the downside on the announcement from apple that it's coming out with itunes radio. free, with ads, no subscription. we were expecting something like iradio, and we got it. >> there is a lot of competition. i used spotify, and among, apple, as powerful as it is, google play will have its work cut out. pandora has critical mass. thank you for watching. welcome, everybody, to "the closing bell." the markets are kind of holding its own right now. we've had a very, very busy week last week. lots of volatility. so maybe the market deserves some kind of a rest today. we have plenty of news we have to get over here, as well. >> the markets were seesawing earlier. the dow was up about 15 points. we always see the most activity, bill, in the last hour of trading. >> yes, we do. >> i'm kayla in for maria bart