nylam, the big winner of the conference. maybe some of their employees will be buying bentleys. that so far in all of our interviews are on cnbc.com thp. >> 38% pop. three-week low for the do you right now. full coverage on "the closing bell," which is now. >> and welcome to "the closing bell." i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. another rough day, as you know on the street for the bulls here. it started this morning from the get-go and it's just been one of those days where he have time you turn around the market is a little bit lower. >> exactly. if you look at the charts and take a name by biojen we opened near 52-week highs. we're trading down almost 5%. that pretty much traces the entire market. >> nasdaq has been the hardest hit. you see the dow down 150 points

less than a percentage, but nasdaq is down 1.3%. you should have seen the look on her face when we noticed that earlier. lululemon among the retailers that's been warning today. that stock has been down 16% today. and we've got all these earnings coming out this week. we've had all these warnings so there's a feeling of fear right now definitely an wall street. >> and anticipation. retailmageddon is the way one retailer put it to us earlier. goldman sachs sounding the alarm on valuation saying investors are too focused on stocks and hurting longer term return. >> we're not just talking stocks so far today. gold interestingly has been heating up after a horrible year last year and who better to get the outlook for gold and the precious meatals than the ceo of gold corp himself. coming up this half hour. >> talk about a tough 2013.

look at markets right now. as mentioned, the dow is off 159 points. the s&p 500 is off 20 points. near 1820. in fact, it is trading about 1821 so we're well through the lows with he saw after the jobs report hit friday. the nasdaq is the worst hit across the indexes down 1.4%. >> let's talk about this where we go from here this busy week coming up in our "the closing bell" exchange. quincy crosby anthony chan from chase, michael robinson from money map press, and david wright from sierra funds. david wright what's going on? you felt like this is a fragile market anyway. why? >> yes, exactly. well, for example, last year about 80% of the game came from pe expansion fed by the fed. so we think it's going to be a challenging market for equities this year but bonds may be surprising on the upside. >> they have so far. >> well here is what's

interesting, too, quincy. we can talk about the moves in the equity markets today. we really should be talking as well about what's happening in bonds. look at the ten-year treasury that benchmark, going from a 3% yield just last wednesday to now well below 2.83%. that's a big move lower and it's going to be interesting to see the effect that that has now as investors digest it. >> absolutely. i mean what happened on friday was, is this going to be what we've seen every single year in which we go in stronger and then start to pull back? what the ten-year is telling you is let's wait and see some of the data that we're going to get and make sure it wasn't a one off. you cannot attribute all of it to weather. and that's what the ten-year is telling you. the ten-year has been a very good guide. so, by the way, has the two-year, and so as we've seen those pull back the yields pull back just a tad on the two-year obviously, it is something -- it's watchful waiting with more

data. >> right. anthony, have you figured out friday's jobs report yet? let's all remember we were expecting 200,000 jobs and we only got 74,000 jobs in december. >> yes, bill but you also heard from the department showing you all the people that were out of work because of the weather. i think that right now both the gold market and the bond market are like a shark in the water sensing there's blood all over and that's why gold is moving higher and the ten-year is moving lower. i think today's comment about the atlanta fed president that the federal reserve still has a tapering program plan out there is really telling you that we need to see beyond that employment report and realize as we go through 2014 whether we like it or not, the economy is improving and the stock market will eventually get it and so will the ten-year. >> michael robinson there's been almost from the get-go this year no question about which way stocks were headed. we opened lower on that first day of january. we've rarely broken the pattern since. and now a big sell-off on this

monday even as we've had some other more positive signs about the economy. look at some of the cross border m&a activity what do you think is going on here? >> a continuation of a trend that very few people are talking about right now. this bull market has been incredible, but it's been mostly -- i should say it's largely been choppy and news driven. if you go back and look at the lines, they go like this quite a bit. so i still see a strong market in 2014. and we got to look at a couple things that are very important. we have an enormous aviation boom going on right now. airbus and boeing have 10,000 planes it's going to take them eight years to build. we have a massive car boom going on right now and that's important because most cars on the road today in america are 11.4 years old. which means they don't have all the latest infotainment digital technology embedded in them and they're becoming big sales hooks. i'm looking for good sales in the auto industry this year. >> but you're the chief technology strategist and technology has been lagging this market so far this year. i mean that had been a leader

for this market. now suddenly it's a laggard. look at the nasdaq today, we're down 64 points. >> here is the thing that's going on. some of the big gainer you look at tesla and some of the other other companies, massive gains. i don't think it's an accident that the first day of the new tax year is when you started seeing people take profits. i'm looking at this as a long-term opportunity, and this is a great buying time. you might wait a day or two to see how things are going to shake out. i'm not at all concerned. i think tech will recover from here and rally in 2014. >> david, do you think it's the case that the liquidity that was driving this market for much of 2013 is now changing tact, that perhaps it's being funneled more to the bond space. for example, as people go safer to just lock in the 30-plus percent year i had and sit this one out and see what happens? >> that's true too, but valuations are very stretched by the schiller and other

measurements. we think, for example, the next 10% move will be downward. the market has been very strong for a long time and the cycle is ready to top and turn down. >> is that happening now, david? is that your call then that this is the beginning of a 10% move lower? >> yeah. we think there's at least 50% chance that this is the very first little tiny part of what will become a sustained down trend. it's possible there might be another spike to a short new high, but we think it's going to be a tough market this year in stocks. >> we're having a tough market year right now. look at that. now the nasdaq is down 1.5%. the dow at the lows of the session down 170. if we move 10% lower, quincy are you going to buy that dip? >> i think as long as the credit markets are holding up and telling us that the underpinnings of this economy and there's no panic, you're going to see buyers come in and they're going to come in and they're going to be stock specific this year but they will be coming in.

>> anthony there are two kinds of sell-offs we could potentially have. there's a growth scare and a fed scare and it would seem based on what's happening so far that this is more about the fed piece of this. maybe the payroll report was disappointing but it's more about the taper continuing. does this sound right or is this more about wait a minute maybe this economy isn't as strong as we thought. >> it is a fed scare. i think that's the point to be made. but in this environment remember that there were a lot of people that were worried as the ten-year was raising above 3% saying that the ten-year treasury -- >> how is it a fed scare if the ten-year is falling? if there's an expectation that yields or if there's actualization that yields are falling instead of rising if this is more about the fed exiting? >> you have to remember if the federal reserve is tapering and the market is perceiving that that tapering would not be a good idea and it will eventually end up killing the economy, the ten-year will be going down. >> great point. >> my suspicion is we're going to see the opposite.

we're going to see the federal reserve taper, we'll see growth picking up and eventually the ten-year will recover. >> you know what? i think we're putting too much emphasis on the fed. the fed has been pushing on a string is a great phrase. liquidity is high. excess preserves are high. the fed is fine and one of the reasons it wants to taper is it's finding it just doesn't have as much bang for the buck as it did before. it's running out of ammunition. the velocity of money has been so low lately i don't see the fed tapering is what's going on this week. i think it's a blip. >> look at that shares down 3% nike is down 2%. >> good old-fashioned sell-off. go ahead, david. >> i would say the markets this year are likely to have less and less focus on the fed. we don't think market behavior this year will be influenced at all by the fed. the fed had very little influence starting last may as rates began to rise and really the fed has done everything it

can. stocks are stretched. that's the main factor and the fed is really not going to be -- >> but usually when stocks are entering a period of multiple expansion, that continues until that whole cycle is over. so the case isn't necessarily whether or not we're fairly valued here but more about does the cycle have enough traction that we keep going and if we get a sustained sell-off the answer would have to be no and not many people are willing to make that call yet. >> markets have to burn off the froth, and this is what it's doing. it's long awaited. it needs to do it. it's healthy. >> all right. >> all right. well, here we go. let's all take our medicine. >> thanks, guys. >> thank you, folks, for your thoughts today. a good old-fashioned sell-off today pretty much across the board. the dow right now just off the lows that were set moments ago down 165 points. the nasdaq is down 70 points. >> big leg lower. stocks have been on a tear over the last five years. a new report saying focusing too much on assets like stocks that can be immediately cashed in could be killing your returns

over the longer term. we'll explain why next. >> very interesting. pay attention to that. speaking of liquidity, after a huge one-year rally, wall street firm is losing its taste for starbucks. downgrading that stock to a hold. we'll hear from somebody who says this stock can still perk up your portfolio. that's coming up. and some pretty unique michael jordan memorabilia, including his university of north carolina recruiting letter and his diploma. they're about to hit the auction block. this as the first official jordan brand retail store gets set to open here in new york. we want to know why do you think the jordan brand still has so much staying power 11 years after his retirement? your thoughts on that will be revealed later on "the closing bell." you're watching cnbc, first in business worldwide.

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stocks posted huge gains over the past year but is all the liquidity in the market actually killing returns for investors? >> what's with citi private bank is suggesting. they're recommending that their clients move into illiquid assets like real estate or private equity funds. >> maybe some of theirs. >> things you can't cash in too early, and yes, they probably sell you some of those things. joining us is mark and kelly campbell. the point is individual investors are encouraged to go with liquid assets because they're able to get out when they want to get out of those assets, but the citi point is that by doing that you're limiting the returns that you can get by going only with those liquid assets. what do you think? >> they make a very good point. investors should have uncorrelated assets in their portfolio portfolio, in a well diversified portfolio. when they don't, that limited

some of their risk adjusted rate of return over time. and i read their research and i agree, and i counsel my clients on having anywhere from 10% to 30% of their portfolios especially the accredited investors, the high net worth and the ultra high net worth investors, to have that much of an allocation into these noncorrelated assets alternatives, real estate, private equity hedge funds. >> what's the best way for the retail group to get exposure to some of these asset classes because we're talking about sophisticated products sometimes that don't really make sense on an individual level. >> well, you know, the problem that you have is that they are now institutional investments that weren't even available to these retail clients years ago, and even maybe even one year ago. now they're available so they need to typically get them through someone that knows how to work with them. they're complicated. they're different. they're not your everyday stock and bonds, so they need to start looking to some of the better financial advisers. the one that work with people that are in a high net worth

space that can guide them to the right investment and also make sure that investment follows their portfolio. what i have seen is a lot of people want them because now they can -- these hedge fund companies can now market to these clients but they're not getting the information they need to make good decisions. >> kelly, that goes kens something against something i learned a long time ago, invest in what you know understand what you're getting yourself into. some of these investments are pretty complicated. >> if you think about even the stock market in general with the globalization, it's so complicated. you need to have someone that you're going to work with that will help you understand it and bring it down to layman's terms because, yes, they are complicated. even a mutual fund nowadays a lot of funds can go long and short. the fact you can get a short position in a mutual fund is xlu kated but it's available to the retail investor. >> it seems to me the story is also one where, yes, you have

had a great year for the market but it hasn't been a great year for a lot of people for example on the sell side because there hasn't been a lot of churn. look at the fee ratio on most equities. it's extremely low. so they rely on that churn. is this really about trying to get more people to buy more products that have a little better margin? >> i believe it is. i do believe it is. in that research that citi released, i understood their private clients on average had about 30% sitting in cash. >> wow. >> that's a lot of cash to have on the sidelines when you talk about, again a negative inflation adjusted rate of return. if inplationflation is running between 2% and 3%, you're sitting in cash, you're making very very little. it's not worth staying in cash. so it's a nudge for clients to move into alternatives as this particular market becomes appreciably higher in terms of valuations. >> one thing in favor of going with these illiquid assets is it forces this discipline to stay with them a longer period of

time, a five-year period whatever. a lot of investors will claim they are a long-term investor until the market goes down 5% 10% and suddenly they're a 24-hour time cycle they're on right now. >> you make a very good point, bill. that hurts investors long-range investment strategy planning and their financial goals. when they pull out. and let's not forget proliferation of etfs and what that's done to be able to get main street investors and institutional investors in and out of products quickly, that also has an effect. >> interestingly enough kelly, a lot of new etf products come with a lower fee ratio. for example some of the trickier structured alternative investments. >> you know, and not only are they -- yes, they're a little trickier, but the bottom line they're easy in easy out and the whole problem with that is people want to know -- they can pull the trigger i can remember when the stock market crashed. i want to get out when it happens. they make emotional decisions.

>> can you blame them? >> well but, again, if they're going to trust some of these managers which some of them are phenomenal, but, you know, they need to think about this. there's a discipline to the investing process and they need to have that discipline. most investors don't have it. they've performed the worst out of the whole investor class. the average investor -- >> how many people bought commodities instead of dumping them last year. >> what's going to go up now? tell me now what's going to go up? >> we'll talk about that tomorrow. >> we'll check back with you later this year. >> exactly. >> see you later. >> thank you, bill. >> thank you, kelly. >> we have 40 minutes to go. take a look across the major averages. the dow is off 165 points. we're 22 points lower on the s&p 500 now below 1820 and the nasdaq is down by 65 points just above 4100. >> one of the leaders from last year, starbucks, those shares were up a whopping 40% last year. one analyst says this hot stock should be put on ice. another disagrees.

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welcome back. pretty much a sea of red on wall street today as this rough start to the year continues. jackie d., i was going to ask which stocks are making big moves but it seems like a lot of them are today. >> we're going to start with what else intercept pharmaceuticals falling after it's meteoric rise last week. it could be plain old profit taking or that late friday news came out that its experimental liver disease drug experienced more abnormal cholesterol levels than those who were taking the placebo. this stock was up more than 500% last week on positive data from that trial. now, take a look at some of the social media stocks hitting session lows in the last half hour. yelp groupon, zillow facebook linkedin all to the downside

today. soda stream falling after reporting lower profits. also lululemon getting rit hard. the retailer cutting its earnings and reknew guidenuknew revenue guidance. on the plus side netflix basking in the triumph after the golden globes. starbucks falling as they were down grouded to hold from a buy while lowering its price target to 75 bucks from $90 a share. kelly and bill back to you. >> thank you jackie. take a look at starbucks down today, by the way, but it's up almost 40% in the past year. >> and according to bellus it so soon end as they downgrade

the stock. mark riddick from williams capital group and brian sosi are joining us on the phone. thanks to you both for being here. >> welcome guys. >> brian want to start with you because it was your note that's moving shares around here today. and i think one of your points is really interesting which is that you think starbucks needs to add more checkout points to some extent is that right? >> i think i note after i got my starbucks because -- there's a -- they revealed a lot of new products, but when you go into the store, i think their new food platform in their strive to reaccelerate profits is backfiring in their face. we're seeing longer lines. people forgo orders. they're coming across the mcdonald's syndrome where they extended the order it's reduceing efficiency. >> what about that, mark? >> we actually view starbucks as

a positive within the restaurant space, one of the best restaurants you can own. i will address the introduction of new products from the food platform which we think is a growth driver going forward. under normal circumstances there is a certain amount of time that it takes for folks to go through a process of going through greater through put. at that through put is due to the fact that you have customers that have a demand they are willing to full till. we're very positive on the name. we have a buy rating with a price target of $92 and view it as a top of the line name to own. >> and there's no doubt when you talk about the china story where they're seeing good profitability, they have plenty of room to grow. they have teavana. brian, something else that you talked about which is quite important and we saw this in howard schultz's note to employees a couple days ago where he said we're not immune from the desell rathsceleration in traffic that retailers are seeing but he said that's okay because we have the starbucks cards.

those are two different things. i don't know many people who are using their starbucks things to buy stuff online. >> you're right on the mark. the street ignored the words of a person who founded the company and from what i can tell is very much in the trenches with daily numbers and preserving the corporate culture. for him to come out and say there's a fundamental change in how people are interacting with the brand, i think it's a big red flag. why is starbucks valued at 24.5 times forward earnings? it's a big concern. worried about the earning power of the company or at the very least if they will deliver up to the very high expectation of wall street which the guidance right now is officially above the company's earnings guidance they laid out a month ago. >> is there any concern you have about starbucks at this point? >> no certainly not on a company specific basis. to address a couple things first of all as far as a valuation basis. it's actually historically traded over the last four years at a 70% premium to the s&p 500

consumer discretionary index. that premium is down to 30%. we've seen most of the market rise and see multiple expansion over the last couple years. starbucks hasn't not nearly to the extent some of their peers have. within the space of the broet opportunities, quite frankly, they're too numerous to mention. they haven't talked about the growth of single curve, the k-cup side of things the international opportunities. they are a large company company that that has visible drivers that we don't see many other names out there that can match them. >> so far we're focusing mainly on the in-store sales but they're deverse fiing away from that as well. >> it's because of all those items i am worried about the company delivering up to street expectations. i feel as though the stores are not properly situated. even not having the right display cases. you're pulling somebody to

restock the shelves. i think, third, you have to deliver them into the store. >> very good. good discussion guys. thank you, both, brian and mark. >> thank you. >> take care. another beverage maker in the news with investors toasting a mega deal. sara eisen with details on that. >> big move and it's good to be in the spirits business right now. for beam it meant an offer from suntory of japan at a 25% premium over where beam shares closed on friday. hence the stock market reaction today trading just around that deal price. the question is why the premium? well the u.s. market has been hot and it's been a bright spot for global spirit sales, especially in light of recent weakness we've been seeing in emerging markets. that gives japan suntory exposure to the u.s. it is already the world's biggest spirits market and it's home japan, has seen some slower growth in terms of

demand. beam has strong brands. you know them. jim beam cognac maker's mark is the crown jewel in that portfolio and it was widely considered one of the last men standing. we're talking about publicly traded spirits companies that were primed for a takeout. another one to watch, brown foreman actually trading higher today. speculation heating up to may be next. it makes jack daniels. mario gobelli told scott wapner he holds it and generally sees demand for bourbon in particular rising. so far consumption growth for spirits overall as a category has really been growing fast. faster than drinking wine and also faster than drinking beer which has seen consumption growth growing even though beer is king when it comes to profit and volume and sales in the overall industry. bill and kelly? >> wow. and by the way, sara the point about brown foreman is interesting. our friend rich peterson pointing out the role of

activist investors here. they had a big stake in beam bill. something like 16%, 17%. if you look at brown foreman they are only about 1%. we'll see if that makes a difference as far as how quickly a deal could happen. >> if it's going to happen. see you later. that's how they put the wax on the top of the maker's mark bottle. heading to the close and we are heading lower. down 184 points. that must be about the low of the session right now for the dow with about 30 minutes left in this trading session. >> yeah and the nasdaq off 70 points at this hour. almost 25 for the s&p 500. gold has delivered anything but golden returns for investors over the last year. find out where the precious metal's price could be heading next when we speak exclusively to the ceo of gold corp. and later how is obamacare's medical device tax affecting med medtronic medtronic. that's later on "the closing bell." stay tuned.

it has been a tale of two commodities so far this young year. oil has been slumping close to $90 for wti, while gold has been gleaming again. bertha coombs, how are they doing today? >> it's pretty much that story today here today bill. we did see oil prices come off of the lows but we finished

right near the lows at the end of the session. overall the deal with iran has a lot of people thinking a lot more about supplies and the fact that we also are producing here perhaps getting close to a million barrels a day in north dakota. we've seen fund managers cut their net long positions when it comes to brent, nymex and gasoline. nat gas rallying. traders saying participants in the market don't want to be short ahead of the inventory number expecting it to be a record after the polar vortex. and gold the worst year since the 1980s in that big decline. looking pretty good going into the new year. funds have boosted their net long positions by 18% so far this year. bill and kelly? >> all right. so a little bit of a pick up. thank you so much, bertha. gold corp is on the move on the back of that. that stock up nearly 6% so far

in the new year. >> plus the company is announcing an offer to acquire fellow miner cisco for $2.6 billion. is this a golden opportunity? how come i get these and you don't? joining us exclusively once again charles geness the ceo of gold corp. >> appreciate you having me on. >> where are we in the cycle for gold? obviously an incredible decade then a big pullback last year. are we still in the midst of a correction or some kind or what's going on do you think? >> i think we've gotten down to where we're starting to test the lows for gold myself and i think the price action over the last several weeks shows that we're doing a little bit of bumping along the bottom. you know my long-term view on gold is still very positive and it's based primarily on the fact that we've put so much more money into the system worldwide

and eventually the market is going to turn to the inflationary aspect of that. it may be another six months or 12 months but it will happen and, of course we're building mines that last a long time and so we can be very patient. >> but you could also be wrong, and what happens when you're building towards a certain expectation that may or may not play out this year. what do you sighay to investors who are down 30% over the past year? >> well we use very i think conservative long-term gold price assumptions as we go forward with our investment decisions, and, for example, the acquisition we've announced today, we pressure test down to $1,000 to $900 gold and we're a very solid company a strong balance sheet and so we don't see any significant risk to this kind of an acquisition as a result. >> is that the most efficient way to grow your mine capacity at this time, more acquisitions? are there more to come? >> well we're doing it in a lot

of different ways. we've got three new mines under construction right now. two that will come on this year and then one in early 2015 and so kind of the old-fashioned way of finding or acquiring early stage assets and then constructing them. but this is an opportunity that presented itself that we think makes sense for our shareholders and so we're taking advantage of it with the bid that we've made today. >> i wonder who is buying as well? what can you tell us about the demand for gold? is it coming from kind of the traditional buyers -- retail buyers in the space? how have demand patterns changed and what kind of read do you have in terms of the early part of this year. >> that's something that's been very interesting in the gold space over the last year. we've seen a very strong dichotomy emerge between the investment community which has largely been sellers over the last year and as the price has

dropped, we've seen demand from asia increasing dramatically and just yesterday i saw a statistic that the shanghai premium rate on a per ounce value of gold is up to about $15, and so meaning people are paying a premium to acquire gold physical gold in hong kong and shanghai. so that's where the demand has been coming from and we certainly see no reason for that to change. >> charles, last question, i know we have to let you go is bitcoin a competitive threat to your business? >> no i don't know that you mine bitcoins the way that we do so no -- >> no they do not, that's for sure. good to see you, chuck. thank you. >> their process may be coming much more energy inefficient interestingly enough. there are 20 minutes to go before the closing bell. the dow is off 185 points. the s&p 500 is giving -- is selling off by about 29 points

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ready or not, earnings season is here and weak revenue growth lately has been sparking concerns. >> yeah, so for what to look for and which companies to watch, seema mody joins us with a preview. >> first trend will be weak revenue growth. while the economy is picking up that hasn't really translated into higher sales commitments for -- estimates for this quarter. for q4 thus for thompson reuters is estimated a 4% rise. another trend to watch is europe. experts are betting that multinationals will benefit from the ongoing recovery in europe. several companies do have exposure to europe and could see an uptick in demand this past

quarter including priceline. they could offer future growth opportunities for priceline as well as the broader online travel space. when it comes to emerging markets, experts have a mixed opinion on business conditions there. last quarter yum brands and nike were cautious on china while general mills saw strength. management over there said they had a very strong quarter in china and saw terrific growth in brazil. whether we see strength or witness in emerging markets, others point out unfavorable currency fluk wags will be a concern. >> it seems like all that matters is what the end does. >> these days companies that have exposure to japan and how they deal with the depreciation we've seen in the yen will be a factor to watch. >> i think they definitely will be watching these earnings reports a lot more carefully because the fed is less of a factor right now. >> and the fact there's a lack

of direction in the market i think more market makers are putting attention on earnings. this could be the catalyst. >> look at the gaps just today. fascinating. thank you. >> thanks, seema. >> while the dow is down 190 points juniper networks is bucking this selling trend. it's up 8%. shares of the network equipment maker rallying. johnn fortt, what's going on? >> up 8% because elliott management has some ideas about the way forward for that troubled networking company. elliott wants juniper to cut $200 million from operating experiences, return $3.5 billion to shareholders and initiate a dividend. also wants the company to spend less on r & d as a percentage of sales. big picture here this is really about more than just juniper. across tech companies that got beaten in the last round of the tech revolution have got to retrench. look at blackberry. john chen is trying to file a similar playbook there getting risk off the balance sheet through an inventory deal with

fox con. kkr announced nearly a 7% stake in marvel just two weeks ago. that company came up short against qualcomm in mobile. so where might we see more of this? don't know but in securities symantec is struggling to get its business turned around. abm has ibm has eps targets to hit. and then rack space, it's facing increasing pressure on cloud margins. doesn't help that google is jumping into that business. bill? >> all right, jon fortt, thanks very much. heading toward the close, about 13 minutes left in the trading session. the dow is down 180 points. the nasdaq has the more dramatic decline, down 72%. and the s&p is also down 24 right now. target also down in today's market in the wake of its recent hack attacks on consumer credit information. earlier today the company's ceo gregg steinhafel told becky quick exclusively how this has affected its company. >> it's very challenging times

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visit truecar.com about ten minutes left. the sell-off continues. the dow just off the lows of the session, down 174. 1% decline. this will be the first 1% decline for the dow since last october. the nasdaq and even harder decline. and the s&p down 1.3%. joining me the ceo of impacts group and our own bob pisani. what's going on today? >> we were mixed right at the open and then about 12:00, 12:30 dennis lockhart made some comments, mr. lockhart a nonvoting member of the fed, but basically supported the concept of tapering he would support taper at the current rate. despite the fact that the jobs report was rather weak and the markets took this to imply that the fed is definitely set to continue that $10 billion per meeting taper, and things started moving south a little bit after that. >> is this a market you want to

buy a dip on right now, ian, or what are you doing? >> we're a little nervous about the u.s. market at the moment. we're seeing more opportunity, more value in europe and in north asian markets. >> why? just because of valuations or is this a growth story as well there? >> well, i think there's a big recovery play in europe. you have to be selective about the stocks. in asia it's all very different depending which country you're in. increasing evidence of a soft landing in china. >> do you think that run in japan continues? >> well we're cautiously optimistic about japan. we're placing our bets on japan, some china, europe. we love the u.s. growth story. we love the idea that equity markets not going to go down a lot but is there much upside? hard to be sure. >> it's been a lousy start for emerging markets for the year you have to admit. asia is not doing particularly well. china is not doing well. it's impacting our coal stocks, our steel stocks. are you optimistic on china?

>> chinese growth is pretty robust. the government is putting in place some strong measures. more cautious about asian region and india. >> you know what's interesting, bill, if you put up the vix intraday, the fear index -- >> it finally has a green arrow. >> if you put up intraday on the vix, we dropped below 12. my point is there's not a lot of panic. that was the lowest since august and we're slowly moving up but 13 -- i barely pay attention to this when it's been below 20. we're not seeing any dramatic moves to the upside and volume is still moderate. the point is this is a notable down day, one of the more notable ones we've seen in a while and yet the market is not reacting with any sense of tremendous fear or concern. >> if i pinned you down to buy something in the u.s. is there a sector you like? depending where you see the economy here? >> yeah certainly if you're looking for growth in the u.s. or even elsewhere, then long-term infrastructure stories

very persuasive. so the water infrastructure play which captures both the rekofer recovering economy, more and more housing starts means more water giment.equipment. the fracking for shale gas. >> and yet all of that has been a tough time. energy has had a really tough play for the year overall. the weak oil and the natural gas despite the cold weather. >> you're supposed to buy low. >> i know that but most people have been long the energy market for a while now. >> yeah. well, we're looking at some of the derivative plays in the energy market. if you're in the automotive space, there's some great opportunities. automobiles are becoming more efficient. we saw the ford f-150 announcement this morning. they're taking 300 kilograms off the weight of an f-150. there's normore technology going

into that vehicle. >> made the case. ian, good to see you. thank you for joining us today. we're going to take a break, come back with a closing countdown for a monday with thedownthe dow down 173. after the bell do you want to own michael jordan's college diploma? we'll hear from the man auctioning them up and you will not believe how he got them to begin with. it's a great story coming up. stick around for that. plus the first ever jordan brand store is about to open in new york so why 11 years after michael jordan's retirement does his brand still have so much staying power? we will reveal your best tweets your thoughts on that coming up later on "the closing bell." you're watching cnbc, first in business worldwide. ou have diabetes like i do, getting the right nutrition isn't always easy. first, i want a way to help minimize my blood sugar spikes. then, a way to support heart health. ♪ ♪ and let's not forget immune support. ♪ ♪ but now i have new glucerna advance with three benefits in one.

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instead? ♪ ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. we're at the two-minute mark now. earlier i said we were having a lousy year just today and somebody took me to task on twitter thinking i'm panicking on a 1% decline. relax. wroo is where is people's sense of humor on a down day? thedown down dow down 182 points with a decline of over 1%. nasdaq the hardest hit down 1.5% today and the s&p down 1.33%. it would be our first 1% decline for the dow since last october. peter costa, empire execution, what's going on here do you

think? what's the motivation? >> it's a combination of three or four things. you had some relatively negative comments this morning from goldman sachs. you had the talk of the tapering and continuing this or increasing it, and then retail sales. and then seeing lululemon come in light and there's a lot of other retail information that didn't come in very well. >> i could probably find days where that happened last year and the market would ignore most of that. now it's not ignoring a lot of these fundamental thoughts about the market. >> right. and you know what it is? we start off on a negative note. i think we'll probably see this again. we have some room before we're actually going to get in a little bit of a nervous territory. i think it's another 200 points on the dow. we've hit the 50-day moving average. i don't think we'll see that this week but, you know, possibility with some lighter earnings in the financials you could potentially see that but i think we'll be okay. i'm all right with this market here. >> he still has a smile on his face. no panic, no sweaty palms.

>> not at all. >> all right. here they come. we get earnings tomorrow. big numbers from some of the financial services companies in technology. could have a big impact on the day. but in the meantime, stay tuned for hour number two of "the closing bell" with kelly evans and company. i'll see you tomorrow, kelly. >> thank you bill. welcome to "the closing bell" on this monday. i'm kelly evans. the dow posting its biggest decline in over three months. take a look at how we just finished the day. we are finishing just at the lows. the dow is up 178 points 1.1%. the nasdaq giving up 60 points. it was down 70 more than 70 points just before the close there. slightly off the lows. the s&p 500 off 23 1819 is the closing low for that index now. let's bring in today's panel. cnbc contributors anthony scaramucci and eli mui.

kayla tausche and dominic chu and brian kelly. anthony, welcome. >> thanks, kelly. >> what's telling to you about the activity in the market today? >> well you know, i have been saying that we were in a liquidity driven bull market. we're hitting a transition phase where the fed will start tapering, and we have to look at the real economy. the markets never do well off the real stuff. they always do well off of expectations about the future and so now there's a lot of cautiousness about current earnings. >> here is what i like about this point. in this market at least last year, liquidity trumped earnings, and dom, i wonder if that's why japan matters. help us figure out this whole picture. >> well, what it comes down to is with liquidity when you have the back stop of the bank of japan, the fed, all there to backstop things things may go lower but you never get that

resipre precipitous fall because there is a threat that liquidity will be pumped at a higher rate back into the system. all these are driven by stock stories. this is not some risk on/risk off thing -- >> look at the breadth of the sell-off. there are a lot of stocks gapping lower but everyone seems to be getting hit. >> at least in this case what you're seeing is that there is a story that goes along with every company that's stock is down. if you look at soda stream, their earnings preannouncement. if you look at lululemon, some of those companies these are stories you can attribute to microeconomic factors that may be the cause -- >> here is a different -- here is something that's changed, kayla. now it's almost the story you can explain but the broader sell-off people are casting around for narrative. >> you saw the move around noon and we got the comments from jeffrey lacker from the fed. he was reaffirming that the taper will go as planned.

a lot of traders are talking about this goldman sachs note. when he came out and said by every angle the market is overvalued. he said the only time the s&p has traded at a higher valuation than where it is right now is the area between 1997 and 2000 the tech bubble. that caused a lot of volume in the market and a lot of people to start reconsidering their strategies. >> i was going to ask elon if this is all lockhart's fault, the sell-off. >> to the extent this is just a fed scare, i think it's a dramatic overreaction. he said if the economy improves then the fed will keep tapering. however, that's not a set course. the fed has said continuously that they are data dependent and i think he reiterated that. i think the markets are looking for any reason to sell off and for any direction at a time when there's a lot of uncertainty. >> i actually think that you're

going to see a little more of a sell-off but what we're missing right now is the ton of cash that's on the s&p 500 balance sheet and you're going to start to see merger activity share repurchase raises in dividends. so it's not convincing to me that this is a full blow-off 15%, 20% correction. it makes sense that the market would be down after being up two straight years with the resounding strength that it's had and recognizing that the fed is pulling back a little bit. >> look at the suntory/beam deal. we have the third biggest outbound m&a deal from japan ever. the first being softbank and sprint. there is potentially a lot of activity. there are plenty of strategists salivating over the shape kor corporate balance sheets are in. is that enough do you agree with anthony, is that enough to stem the bleeding here? >> well, you know, the shape of corporate balance sheets have

changed. certainly they have plenty of cash. jpmorgan had a great piece out this weekend talking about how ipos and net equity issuance for the first time have outpaced the buybacks. if you look at what companies are doing, they're basically taking their free cash flow and buying back stock. well, free cash flow to buybacks is about 70% now. they're starting to reach that upper limit. i think really what happened today and it started to happen last week is if there was a fed put under the market lockhart and the other fed officials basically came and changed the strike price on it and made it a little bit lower. >> at the same time it sounds like what you're saying is there was kind of the fed buying over here and a lot of companies buying over here and, yes, that buyback activity is probably still going to continue but maybe at a pace that's less dramatic than what we've seen since the lows in '09. >> ibm is your poster child for this because basically they have 100% of their free cash flow they spent on buybacks and you saw last quarter they started to taper down on that. it's still going to be there,

still underneath the market but today and over the next week or so the market is going to have to reprice all this information and the path of least resistance is probably lower. >> i'm really watching the bank earnings because tomorrow is going to set the tone. earnings will really start with jpmorgan and wells fargo tomorrow. surprisingly analysts are really bullish on the space. this is the linchpin of the economy. if consumers feel like they're finally able to be confident enough to start levering up again, that's really going to be telling. i talked to jim paulson of wells capital earlier, and he said he thinks loan growth will be there. he thinks confidence is better. dick bove likes well fargo. if you look at what happened to the 30-year fixed, i don't think anybody thinks mortgage activity will be blockbuster, but they think net interest income and net interest margin -- >> maybe we're moving towards the income.

if the income is under a little pressure because of the mortgage business but maybe business income look better. dom, what do you think? >> if you talk about alcoa, you talk about the bank earnings, we're at the very, very tip of the iceberg with regard to earnings. right now you have a situation where traders are saying volatility, it keeps coming low are and lower. yes, it spiked up a little today. what that does is makes insurance cheap. if you have cheap insurance out there, there may be a compelling reason not because you fundamentally think the world is going to end, but that there's a reason you can buy some put protection to have it just in case. it's like saying geico is going to have car insurance that's going to be 50% off just for this month and you want to take advantage of that if you can. >> interesting point. kayla, what were you going to say? >> there were two technical reasons also about the financials. that is that a lot of companies are barely trading at book value. when we're talking about the rest of the market being overvalued, we look at jpmorgan chase barely is trading at book value. the other thing is on wednesday

a lot of these banks have been talking with the federal reserve about their buyback plans, about their dividend plans, and by wednesday they will submit a finalized plan to the fed and with these companies becoming a little healthier, maybe you will see bigger buybacks. maybe you will see bigger dividends so you could potentially generate income from these stocks. >> i wondwonder, too, let's go back to the valuation point. the note basically says, you know a lot of people expect that the price to earnings for the s&p 500 that multiple is going to move from its current about 15 to 17 or 18 times. he says if you think that you're betting against hit -- history because it doesn't usually happen. >> if you look at a price to book ratio, that's at the higher end of the last three to five years and actually market capitalization to gdp, which is warren buffett's favorite indicator, that's showing a market that is overvalued at this point in time. so i agree with them. there are many metrics here that say this market is overvalued.

>> that's no surprise elon. one of the things lockhart didn't say, haven't shared the same concern we saw in the minutes about the fed being a little concerned, frankly, about frothiness of the stock market. >> i think that the idea of the financial bubble is certainly one of the costs but it's not the biggest issue. the think the center of the committee believes qe is working, that the benefits outweigh the costs and it's a program they feel can still benefit the economy. they're looking at not just the number of unemployed workers but they're looking at broader measure of the labor market that say a lot of support is needed for this economy. >> i don't want to bet against history but there's a lot of things about today that are very different than any other time in recent memory. >> this time is different. >> it's not that it's different. it's just that the fed has been involved in the market now for about a half of a decade and there's a real transition going

on in the real economy. that means that there will be stocks in transition and there will be near-term corrections, but if the fed is right about the overall economy and we see stronger than expected growth the earnings will catch up and it's not the end of the current bull market in our view. >> where do you see the most opportunity for investors? >> i want to go to the financials, what kayla is saying. i think the financials will be a home run position for 2014. you're going to see loan growth. they always do better in a rising interest rate environment. they are buying back stock. they've got more freedom from the fed than ever before. and look for the european banks also to do well. that's a very good position. >> also relaxing some regulations. we have some breaking news on google. jon fortt, what's going on? >> google has acquired nest the maker of home technology for $3.2 billion in cash. very interesting acquisition. of course, they have the nest

thermostat. they have also got a smoke detector, carbon monoxide defector they have just come out with. tony fidellos largely known as the co-founder of the ipod. google ventures has been on nest since it's series b light speed ventures. kleiner perkins has been in as has shasta ventures been very much involved. i actually sat down with tony and his co-founder a couple years ago when they were getting this started to talk about where the market is headed. we had tony on "squawk on the street" just a couple months ago talking to him about this company. very interesting coming out of ces. not only wearable technology but home automation technology. lots of things controlled by the cell phone in this post-smartphone era are becoming more popular. google buying this company. very interesting because they will be able to push this forward that much more quickly. nest thermostats and their over products already in apple stores

as well as other locations. it looks like that home automation and post-smartphone era is about to get some jet fuel era. >> this is fascinating. >> you're talking about a trade where a company is putting together pieces and they fit together is well. with android smartphones, you can pretty much control your home, your thermostat is just the beginning -- >> and it's not the battle for the next platform. >> that's the thing. randle randle stephans was on this morning saying if anything mobile can be monetized, you can do something with it. >> a wide open space. i love this. we have more breaking news. we can't even spend time on this one. jackie deangelis joins us. >> dow jones reporting that charter communications is ready to strike a bid for time warner cable for $132.50 a share. the charter offer includes stock in $83 a share in cash. the transaction would value time warner cable at more than $61

billion including debt. we're watching those shares. they're trading higher. both companies trading lower at the close but trading higher on the news. we're watching charter up 0.6% right now. >> we'll try to get more on that coming up. i want to mention again with that google deal for nest it is google's second biggest acquisition at $3.2 billion. they spent $1 billion on instagram. we know the value of that company now. fascinating moves today. please stay with us. we have a ton more coming up on the program. also want to thank brian kelly for joining us. catch more of him coming up on "fast money" at 5:00 p.m. we'll talk more about today's sell-off. we'll check in with a cup am guys on the floor to get the mood down here. find out if the pullback is actually a welcome one. you're watching cnbc first in business worldwide. here's a question for you: is your tv powered by coal? natural gas? nuclear? or renewables like solar... and wind? let's find out. this

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welcome back. joining me now for more on today's sell-off kenny and warren myers. before i ask you guys about the activity today, i want to quickly clarify because i misspoke right before the break. google has just bought a company named nest. they also bought youtube, famously years ago. it was facebook who bought instagram last year.

let's carry on. we've got about 180 points off the dow today. kenny kenny, what does it mean? >> i don't know why people should be so so surprised because we've been talking about the market being ahead of itself. people have been concerned about what the earnings season was going to bring. we've already seen kind of weaker numbers in the numbers that have been reported and this is a big week because it's about the banks. if the banks start to disappoint, i think you will get some momentum. we're off 1.6% off the high at 1850. so is it the end of the world? no. is it a little bit of a rougher start than spempeople expected? for sure but it's not the end of the world. >> is this about earnings. sgroo sgroo >> a little bit about earnings a little bit about the fed comment that qe will continue. >> it would be one thing if it was just the markets having a bad day but we started to see this with the ten-year moving friday and now we've come 20 basis points off the highs. it seems like that's something

else going on. >> i think as kenny said the market got a little ahead of itself and one thing i look at is the vix. the vix hit a low today of around 1190 which is extremely low and that's a sure indication that this market was due for a sell-off and we got it. >> i think underneath there is some simmering nervousness which just needed a little prompting to come out which is i think what you got today. i don't think the bottom is going to fall out of the bed but i think you're going to test this 1795 1800 level. where did we close? 1817. i'd like for it to test that. >> what about the nature of the sell-off today? we started out this morning looking okay. futures were a little higher. take a nape likeme like a biotech name falls 5% 6%. >> because people are taking money out of the ones that have been the best performers. the ones that have performed so well are the ones that will get hit the hardest because we'll

will use that to raise cash. >> you can watch what's happening with the yen overnight. for example, every time it strengthens, there's generally a sell-off in equities here. why does that pattern pare cyst -- >> we saw that type of relationship with the dollar/euro for three years going back eight months ago forever. you could come in and bank on it every day. i think it's just, you know why is that relationship so strong right now? it's hard for me to really tell other than the fact that i just think it's an opposite correlation -- >> and liquidity to some extent. >> you have got the bag ge up here and you had lockhart say we're on schedule to continue reducing no matter what the number was on friday. therefore it just spooked people a little bit. now, again, i think that the market will stabilize but i'm not necessarily surprised. nor do i think the big asset managers are surprised. they're actually kind of welcoming this pullback a little bit. >> it is amazing.

we're off 180 points on the dow and it seems like the end of the world. and we're so close to the all-time high still. i think we should calm down. >> that's what i said. we're off 1.7% from the high although it's a new year so it's kind of getting off on a tough start when you -- if this had happened in december you'd say what's the big deal we're up 30%. >> it's never really a sell-off or crash until everyone gets genuinely concerned about the fundamentals. >> exactly. >> and it doesn't feel like we're quite there. everyone seems pretty sanguine. >> let's see how we start to make our way through earnings season. now that alcoa is no longer in the dow, jpmorgan and wells fargo are really the ones that kick it off. jpmorgan is a big dow member. >> we'll have intel after the close. 30 big names report tomorrow. if today is any indication it's not just going to be the broad indexes, it will be big moves in individual names. >> that's very typical though on earnings season especially at the beginning of earnings season. >> the old normal is back. >> to some degree yes.

>> we should only hope the old normal is back. >> guys, thanks so much. retail payment systems under attack. far target's ceo speaking with becky quick earlier today. >> how could this happen to target? >> so with millions of target customers' e-mail addresses and credit card information hacked will consumers return to cash payments? just avoid certain stores altogether? we'll discuss buyer behavior and the consumer backlash next. keep it right here. the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

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welcome back. target still trying to recover after millions of shopper information was compromised in a debit card data breach. becky quick sat down with target's ceo gregg steinhafel earlier. >> it's very challenging times for target i can tell you that. it's a real punch in the gut. but throughout this entire crisis we've had a singular focus on really doing the right thing by the guest. we're a company that's been here for 51 years, and we've focused on the guest and we've made the guest our priority for that entire time. so we know that our guests' trust in us is shaken. >> interesting question is whether this leads to lasting changes in the ways consumers shop. will they return to all-cash transactions? let's ask greg mcbride. greg, thanks for being here. >> thanks for having me kelly.

>> i'm curious just right off the bat, it was one thing when this was just a target issue. it's quite clear there's neiman marcus, other unnamed retailers involved as well. what do you think will be the knee-jerk reaction among consumers? >> well, i think the knee-jerk reaction will be a lot different than what we see long term. knee-jerk reaction people are freaked out. it's troubling. but long term i don't see people moving away from the convenience of paying with plastic. nobody has your back if your cash is lost or stolen. the bottom line is consumers have no liability for fraudulent transactions on credit or detective and you don't have that same protection when it comes to cash. >> and, greg to be clear, it is the retailers who are ultimately on the hook here right? because the banks themselves have been quite willing to kind of go along and do whatever they need to to protect their customers because it's the retailers who have to pay. >> well the retailers or the financial institutions.

it's between them to duke it out. the bottom line is from the consumers' standpoint from a financial liability perspective, it's not your worry. you know i think the things we have to do as consumers on a go forward basis, just kind of the usual maintenance. like we buckle the seat belt before we start the car, monitor your accounts your bank accounts and credit accounts for unauthorized transactions. pull copies of your credit reports on a regular basis. pull a different one every four months and just be very careful about what e-mails you click on. >> i want to bring the panel in on this. it's very hard. a lot of people understand more than ever how vulnerable their data is and basically the only thing you can do is cross your fingers, kayla, to some extent and hope it doesn't happen to you. >> right. i think a lot of retailers are going back and combing their transactions and figuring this out. but, greg, my question is senator tom carper of delaware is resuscitating some legislation that was put on the back burner during the financial crisis that basically says some of these retailers should be subject to the same data

regulation and data security law that the banks are because they have to meet these certain standards that are very strict and as you mentioned, they're on the hook. what do you think of this regulation and do you think that would do anything to pacify a consumer walking in a store and using their card? >> well look i think the reputational risk alone is damaging to retailers. you know with or without any kind of legislation. the bottom line is these type of breaches are going to be kind of a fact of life in the sense that, you know, you're going to see these from time to time. yes, we can put legislation into place, but, you know, the bad guys are still going to be out there. they are still going to be looking to exploit vulnerability vulnerabilities in the system. >> it's just more clear than ever, dom, we have a leaky system. one that isn't well protected. at powhat point, where is the fix? is this all up to the retailers? is there something more broadly that should be done? >> if there is a fix, nothing

comes without a cost and at some point either the retailers or the banks or the cyber security firms, somewhere along the way the costs are going to increase and ultimately you have to figure those trickle down at some point to the consumers whether it's in higher fees for credit cards, whether it's in higher fees for using bank cards at certain target or any other retailers' locations. maybe, greg, the question then becomes is ultimately with all the cyber security concerns is it ultimately going to flow down to the end consumer? am i going to have to pay for it in the end? >> well yeah i think so but it's not going to be necessarily apparent how much incremental cost is filtering down to me the consumer. but, you know, it's just the same way with everything else. every other cost the cost of shoplifting, loss through that method, we ultimately pay for that, too. but, you know, it's difficult to ascertain from one period of time to the next how much prices went up because of things like

that. >> i have to wonder how much is this going to reignite the debate over swipe fees those fees retailers have to pay to card companies each time you use your debit or credit card. those fees have been dramatically reduced because of regulations in dodd frank. but the card companies have said incidences like this will happen if we don't have the revenue coming from this stream in order to pay for increased fraud protection and increased security, et cetera. i wonder if this is going to be one of the incidents that reignites this debate that's been long going on between the card companies and the retailers. >> greg? >> well yeah retailers got a big victory by bringing those interchange fees basically down by half, and you could kind of see the water building behind the dam, that we would see the same push on the credit side. i agree. i think this maybe takes some of the wind out of those sails. >> anthony? >> isn't there an opportunity here to create like a life lock for the retailers? isn't this a great

northwesterlialnorthwesterlyentrepreneur opportunity? you bring your card, it's safety sealed which gives the consumer a lot more assurances? isn't that the future? >> you know often times that's where innovation comes from right, is you see these types of opportunities or just kind of lapses, weak points in the system and that's where the next round of innovation comes from. whether it's that or something else, i mean i agree this is going to be the catalyst for greater security down the road. >> but greg what do you do if you're a consumer? at the end of the day, you were notified that you were a shopper at target during this affected period. you went out and immediately replaced your card and now you get another notice that maybe you shopped at neiman marcus, too, you have to replace the card over again. is this going to keep happening over and over again and what today should consumers who see stories about unidentified retailers being subject to this what do you do? >> well i think the main steps are -- and this isn't just in

response it a breach. i think this is good maintenance going forward. monitor all of your accounts for fraudulent transactions and if you see anything out of the mix even if it's a small dollar transaction, report that to your financial institution pronto. pull a different copy of your credit report every four months. we're entitled to one free copy from each of the three major bureaus every year. don't click on embedded links you get. a lot of phishing scams out there. >> anthony you're right, we need better apps for that. with clicking on our website right now, stick around hot list is coming up next. plus carter communications reportedly making a bid for time warner cable, and google buying nest for more than $3 billion. we'll tell you what all of these deals mean for the companies involved and their stocks. keep it right here. we'll be right back. tdd# 1-800-345-2550 searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 can take you in many directions. tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of

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welcome back. it was a newsy day on wall street and lots happening after the bell as well. maybe allen wastler can give us a sense of what's heating up the hot list right now. >> i got a three-way fight for the top spot right now. it's all the stuff you have been talking about. first, charter bidding for time warner cable.

whenever you throw up the number $61 billion in front of people it tends to draw readers right in there. this story is acquiring readers at 200 folks a minute. but right next to it google going after nest for $3.2 billion. little teeny tiny compared to the $61 billion but when you have google and you have nest with their thermostats and smoke -- >> and it's still a big deal for google. >> but the big heavyweight, number three right now but it keeps poking up the market. our market because, of course when the market goes down we always see more visitors coming in. guaranteed. anytype the anytime the market volatile, i see the readers going up. right now they're pouring in trying to figure out what happened. it's a three-way horse race. >> and how vulnerable are their investments. thank you very much. have a good one. as mentioned, there were a flurry of deals after today's close but chaferter communications in particular making a huge offer for time

warner. google making a play for nest. we'll tell you what the deals mean for the companies involved. don't touch that remote. we'll be right back. of life's biggest questions. like, if you could save hundreds on car insurance by making one simple call, why wouldn't you make that call? see, the only thing i can think of is that you can't get any... bars. ah, that's better. it's a beautiful view. i wonder if i can see mt. rushmore from here. geico. fifteen minutes could save you fifteen percent or more on car insurance.

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the mobile trader app from td ameritrade. (vo) you are a business pro. seeker of the sublime. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. welcome back. charter communications making a bid of time warner cable. both companies' shares popping in extended trading. let's bring in chris joining me on the newsline with more on the impact of the potential deal. what do you think? >> my initial reaction was what took so long.

liberty made their investment in charter in march of last year. we've been hearing more about time warner being the target through the fall. this is not unexpected. more of a conversation starter. >> what about the price? >> well the price obviously remains to be negotiated and i would view the low 130s offer that's included in the letter more of a floor than a ceiling. >> how much consolidation do you think is in store? >> well, this has been an industry that's been ripe for consolidation for a number of years and it took an outside actor, liberty media, to really spur that. i think you're going to see more. i would say beyond time warner there's other potential targets. >> and how much of a potential road block bargaining chip i don't know how you would describe it, are the families involved here which is kind of unique for a major u.s. industry. >> actually this one -- there are certainly a lot of families involved in the media business. time warner cable is unique in that there is no family control. that's in part probably why it's

a target. >> and cnbc just confirming the news, chris, that they have made this offer. so they start with the price at $61 billion. you're calling it a conversation starter. how much richer could it go? >> i think it's two questions need to be answered. one, what is time warner cable worth on its own and second what is time warner cable worth in combination with charter? i think the latter is certainly higher than the former. and, you know, there are a lot of synergyies to be had and that's important to time warner shareholders because under pretty much all structures they would be likely to be shareholders of the new company. >> chris, last point, time warner shares as you said are moving higher but it is by less than 1%. did you -- would you have expected a more positive reaction especially as these talks potentially continue. >> you have timing issues amongst others playing into this. i think time warner plus charter is worth more than where they trade today or the implied trading today, but they're very

rational factors and nobody is going to overpay here. >> charter, meanwhile, up almost 2%. chris, thank you for your time. another big deal news breaking after the close. take a look at shoresares of google. news it's buying nest for $3.2 billion. we'd like to get reaction to that with david garrity. it's said this is google's second biggest acquisition ever. what will they do with nest? >> clearly with nest the intention is to move into the internet of things and namely a consumer facing application focused on the home which is what nest labs is known for producing. basically devices that measure temperature, also smoke, as well as also carbon monoxide in the home. obviously it's not the $12 billion they paid for motorola and one might make the argument with motorola they acquired a lot in the pay of patents. i think people will question to what extent can they monetize as

quickly and well as they monetized motorola. >> does this indicate to you google is moving much more seriously into a space that as the home may effectively become the next big platform. >> certainly. while one might argue while people are talking about the battle for the living room and various devices going through set top boxes. getting involved in various other metering devices in the home could also be a way of getting in there as well. obviously it's incumbent upon google management to spell out what the strategic rationale is going to be. whether they do it as quickly as the fourth quarter earnings conference call later this month remains to be seen. >> it's interesting because nest was actually started by a guy sort of informally called the father of the ipod and the products sell in apple stores. are you surprised google snagged nest? >> not necessarily. it's nice to see that from a design standpoint that they're showing some greaters sensitivity in this area but

also what they've been doing around the motelorola hand sets shows design is getting greater importance. could $3.2 billion have been spent to create shareholder value faster? >> it will cause a little head scratching but certainly a big move and one that's going to make venture capitalists as well as also real estate brokers around the bay area very happy. >> and i was just going to ask if first nest who is next if you understand that? >> most of the internet of things applications have really been seen more in the business space. there's a company cal amp. there you've been talking more about businesses using internet connected monitoring in order to control assets and such. so obviously around the residential space something where we see perhaps a lot more competition coming in because of the value that google sees. >> right. and panasonic playing in the

space as well. it will be a fascinating one to watch. david, thank you. >> thank you. >> big news this afternoon. in the meantime, a major setback for medtronic. that company's latest device to treat blood pressure failing a clinical trial. plus new products in the pipeline when we come back. keep it right here. a lot about the most track-tested is ever... but the truth is... we don't have to. the experts have spoken. now it's your move. ♪ ♪

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welcome back. now we want to get you some more detail on charter communications' bid for time warner. david faber is on the phone with more. your thoughts dade. >> first of all, it's interesting because we call it a bid but there is no bid in the letter. it's a letter to begin or try to get them to begin negotiations in a significant way. of course, pressure the company's board and management through shareholders who they hope will force them to come to the table. what i can share with you at this point as well though of course you know we've been following this story since we reported it back in june the meetings. in the letter itself that charter and liberty have put out today, they do reference a december meeting and they reference as well a proposal put to them by time warner cable that they call an unrealistic price expectation. what was that?

well, i can give you the details now because at that time time warner cable indicated to charter that if they wanted to be successful in buying the company, a price of $160 a share -- >> wow. >> would be what they needed to meet. that's $100 in cash and a stock component worth $60 a share. to make sure it's worth $60, they also asked charter and liberty to include a 20% collar sem met symmetrical collar. if it moved down value would say at $60 and if it moved up the idea it would benefit. that was the so-called ask, if you will on the table. at this point we don't really even have an offer from liberty and charter. what we do have is a plea to come to the table so that we can give you an offer that you will then discuss with us and perhaps accept. >> and, david, i want to put

up -- we've been showing shares of charter. i wanted to show shares of time warner. some of the pricing information there. what about this though the fact that, you know, this almost seems to be a backing into a deal, a revaerserseal of how suitors would potentially approach a company. >> as you know from our coverage of this for quite some time charter and liberty have been trying to pressure time warner cable and get its shareholder base to change significantly and to also pressure the company to engage with it for a deal. there are a lot of people who believe a deal between the two would make sense in the sense of at least they love the management at charter and they believe time warner cable might be better operated by a different company. there are significant synergies that could conceivably be ascertained as a result of the deal. but that being said time warner cable and its advisers have made

it clear for some time that were this property to trade hands, it would have to do so at a typical multiple for properties of this type multiple for properties of this type, which has been eight-times, nine-time, or ten-times even. that would get you to the price, let's call it $160 a share. that's a high price. doesn't mean their going to get there. but at this point, the nonoffer does indicate something around the market. it's not clear you get your shareholders to do your bidding for you. >> it's coming through the market the skepticism. 25% below the level that you're talking about. thank you for joining us. and getting important detail on the news. david faber. now, charter communications ceo will be on tomorrow an sidewalk on the street. there will be plenty more on what could happen with that deal. and biotech, in the meantime has been one of the strongest sectors over the past year.

handily outperforming the broader market. one name riding that momentum is medtronic. it's up 31% since last january. can the trend continue this year? and what innovations are in the works. joining me now from the health care conference in san francisco, is omar ishrak the ceo of medtronic. thank you so much for being here. >> you're welcome. pleased to be here. >> and can you tell us first of all, the latest news about the failure with this high -- with this drug -- device we should say, a implantable device to treat high blood pressure. it's a blow. it's a surprise for your company. will there be layoffs or cost-cutting, as a result? >> this was a surprise that's true in that the clinical trial results show the primary efficacy points have not been met. but the safety results were okay. as a result of that we've done a number of things. in addition to suspending trials

that are -- some of them are outside the u.s. and you know we're looking at this. but we have a lot of other products in our pipeline. and we think that we can absorb this setback. this really doesn't have a financial impact on us in the short-term because we weren't really ready for sales of this product until -- for a couple of years anyway. >> sure. at the same time this would be a key area to expand your implantables or double down on the core business, if it worked out. one of the questions becomes how diversified a business model do you want to have in contrast to a st. jude approach? to be more -- to stick more to the devices, implantables business? >> for a start, our interest and focus on implantable devices does not go away. there's risks involved in this. we acknowledge that. and we still want to tap into opportunities that do exist. and many find new products that

we're expecting to come through this year and next year. we'll all contribute to that. there's a rich cadence of product launches that are in the pipeline for us. as you point out, as a company, we're looking at multiple growth factors. and two of the exciting growth factors are independent of the pure new market creation investigator. one is existing therapies and moving them toe merging markets. and that end market is as big as any of the new therapies that we talk about. in addition to that as we move from a fee-per service to a value-based health care system in the u.s. and outside the u.s., we see considerable opportunities because of our size and scale, our ability to contribute across the continuum of care. to get incremental about service revenue and device revenue, which by itself is very large. >> want to ask on that note to some extent that lower priced potentially piece of the market could hurt margins. at the same time will you,

going forward, be charging the same price on the devices that you do sell the services to government customers and private sector ones? >> no. i think first from an on the other handing margin perspective, the service is close to equivalent of our existing business. from a product gross margin perspective, those are different. but what counts is the operating margin. there, we see them to be equivalent. we think that through this -- through contracts we get with either governments or private providers, we will get standardized pricing, that are stable over time. and so in many ways i think it will stabilize pricing over the long term for us. the value that we will create for our customers, in that scenario, would be actual cost savings, in their operation. which we think that we can provide by managing care better across the entire value chain of health care. >> it certainly is an exciting

time for your industry. we will be watching. omar ishrak, the ceo of medtronic. thank you so much for joining me this afternoon. >> thank you. thank you very much. >> have a good one. we have more breaking news this afternoon. this time from the fed. kate kelly joining us now, with some details. >> kelly, thank you so much. the fed has been exploring ways to change the regulation surrounding banks that hold physical commodities and train them. tomorrow or within the next 24 hours, they're going to float the possible rules. these would be attempts to level the playing field between banks that have different advantages in terms of holding commodities. goldman and morgan have a bit of an advantage. we're likely to hear about this on wednesday, when the senate banking committee holds a hearing at which a fed official will be testifying no doubt, on this topic. >> so much happening in that space this week. kate, thank you so much. kate kelly at headquarters. charter communications making that $61 billion bid, if you want to call it that for time warner cable.

google making an offer for nest. we'll get reaction from our panel, coming next. mine was earned orbiting the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

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but it's this google deal for nest i think is so interesting. >> a lot of the companies like nest are privately held. the question is which big tech player buys the next big start-up that's worth $3.2 billion. that's my take away. >> it's interesting that google has said to be want a hardware company. but they're guilding a foothold? your home. >> and if you have an android phone, you can control it. what happens to the nest products that might have been on some of the apple store shelves? >> this is an area the ftc is going to get involved. they have been looking at the area very closely. you're going to have a regulatory aspect. >> any ways to play the space? >> i like the space a lot. but more broadly, you saw two mergers go off on this show. that's an indication of the first quarter. i'd be buying into this weakness in the market. >> guys thank you so much for joining us. such a newsy afternoon. really appreciate it.

"fast money" coming up in a few seconds. melissa lee, what's cooking? >> talking all about the deals. we get the latest from our reporters on charter, time warner. and also you are talking about google and nest. big play on the internet of things. we'll tell you how to trade it. there aren't too many publicly traded companies. google getting upgraded in after-hours session. we'll tell you if this changes the landscape. >> over to you guys. "fast money" starts right now. live from the nasdaq market site in new york city's times square. i'm melissa lee. what happened in the markets today? the broad sell-off across the board. with the nasdaq the biggest loser. and just breaking moments ago, google making a $3 billion acquisition. we've got all of the details for you. plus, an under-the-radar biotech play that has three new products in the pipeline. our traders are team seymour, brian kelly,