story and our customers tell their friends. >> here's to one hope wines for charity. cheers. >> here's my question before we go. when you drink wine, are you supposed to hold your pinky out? >> yes, absolutely you are. >> you can do anything you want. >> this was "street signs," everybody. "closing bell" is next. see you at the bar. welcome to "the closing bell." i'm kelly evans here at the new york stock exchange. >> i'm bill griffith here at cnbc global headquarters. let's try this again. the s&p 500 is flirting with all-time high territory for a fourth day running. previous three days, fail. didn't happen. closed lower in the last hour. today we're up six points at 1851, about three points above the previous all-time high. we'll see if we can do it this time around. kelly evans. >> that's right. we'll see if there's the conviction, bill, in a market

that people have been describing as, quote, all over the place. in the meantime, watching the ten-year yields sinking. one part of the market hot today, that is shares of mylan. surging about 10% after strong earnings. the company saying it is poised for yet another substantial transaction. what exactly does that mean? the ceo is here exclusively. we'll ask her. >> that'll be interesting. then tesla remains perhaps the most intriguing stock in the entire market. it has doubled just since thanksgiving. is that because the street now sees tesla as an energy company, not just an electric car company? we have one guest who's going to make that case coming up. >> that story, bill, tesla, has been the story all week. now, here's how we stand in markets. what were you going to stay? >> i was going to say an analyst price forecast for that stock are all over the map. from the $200 range to the $60 range. >> pun intended. any who, here's where the dow

stands. up to 16,245. meanwhile, as we mentioned off the top, the s&p 500 up about six points to just about 1851 at this hour. that's three points above its all-time closing high. >> all right, everybody. belly up. let's talk about this marketing in today's "closing bell" exchange. we have a lot of people, more who will be joining us. heather hughes just sitting down. how are you? >> good. >> greg ip from the economist. we have john doyle, jim lowell from adviser investments. we have steve liesman, rick santelli. it's a cast of thousands here. steve, i'm going to start with you. give us the hits and runs of janet yellen's testimony. any big changes from what she told the house financial services committee recently? >> none really. >> thanks for joining us, steve. >> that's fine. just a little bit more of the weather. went out of her way to say there's been more weather since i last spoke to the house.

made one change in one word that i don't find to be very significant, saying that a significant change in the outlook is what would change the fed from tapering. otherwise, the fed is on track. and the fed is still groping for new language for how to advise the market about when it would think about raising rates because it's near that 6.5% employment threshold. >> she left the door open to tapering the taper, right? i mean, they're not on -- >> if you want to read it that way, bill, you go right ahead. i don't read it that way. i read it as the fed is on track to continue tapering and it's going to take a lot to get it off that track. >> greg, what was your read? >> very similar to steve's, although i think i'd put a little more weight on the way she seemed to raise the bar even a little bit further to tapering the taper. she said it would take a significant change -- >> you're saying it's more significant than notable? >> maybe she just lost some of her, you know, legendary discipline a bit and said a word she didn't intend to say. the other thing i'd say is when

she was asked about the weather, she said maybe the softness of the dip is part of the weather. that begs a question. part of it is not because of the weather. maybe there is a slowdown going on here. i still think in the next week or two as they rejigger their forecast for this upcoming forecast round, they may have to take their numbers down for this year. >> heather hughes, where do you stand on the weather question? does the stock market reflect the economy right now? are their expectations too high? where do you stand on that? >> i think the key going forward is expectations. you're right, bad weather has hit both the retail sector and also we've seen the drop in clothing sales and auto sales. home sales still look somewhat stable and strong, right? but the key going forward will be expectations. i think over the past four years, you know, really have expectations been built on actual growth, or are we just -- are they just expectations? we're in a period of validation right now and that gap between

expectations and reality will have to close. although profits are up over 8% year over year right now, we're still slacking on the revenues side. >> i got to add one thing to that. i feel like any day now the market needs a number here. because there's not been a single number that's come along that's really justified where the market's been going. i think if it doesn't get one, it's going to spook. >> like durable goods? >> i don't think that's true. i think we've actually seen some great validation this week alone of the faster growth pace trajectory. new home sales absolutely came in like gangbusters despite the bad weather. and whether you're talking about home depot or lowe's, you had good confirmation in their earnings report that they're looking to a spring-loaded bounce. i think that the sense of a pullback is probably right on. when it comes, i can't say, but a 5%, 10%, 15% pullback on fundamentals is certainly there. i don't think it's priced into

the data. >> john doyle, we can't ignore the storm of events that's happening right now in ukraine and the involvement of russia, the involvement potentially of the u.s. government. does that have something to do here with the bid that treasuries have gotten, and is it any reason for investors to stay cautious until this is sorted out? >> i think that is the reason you saw the yield on the ten-year fall to about a three-week low. you also saw it in european equities taking a bit of a dive overnight. i don't think it's a reason to really sound the alarm just yet. but it's obviously something we're going to get -- keep a close eye on if, you know, russia decides to activate anymore military practices. >> do you agree, rick santelli? >> oh, i definitely agree. i don't know that it's the driving factor. i think everything is in place for ongoing questions regarding the global economy, the u.s. economy, the european economy, chinese economy and the japanese economy. so that's more than enough to make stocks a little iffy. when stocks get iffy, treasuries

get rather well bid. our guests who talked about the weakness in the equities, that showed up. you have to do an aftermath of janet yellen. we've seen her speaking a couple of times. boy, she is smart. i wish i had her vocabulary. something about these hearings reminds me of, you know, when i needed to widen my driveway going to municipal meetings where there's a lot of questions that get a lot of nonanswers. there were very few real, solid answers. the excuses about looking for an unemployment rate that truly reflects what's going on in employment is just a couple years too late. an election too late. and i really think that shows us that the federal reserve is not only behind the curve, they're behind the curve of the curve. >> rick, she just took office. i think you're right, she needs another metric. the fed has needed another metric all along here. >> well, why don't they talk about this earlier?

it's been obvious to the whole world outside of them for years. >> i think they would have wished to have talked about it earlier before they got into the situation they're in now. they want to get out of it. they need another number, another way to communicate. they don't have it now. but she's got a little honeymoon here, rick. i think that essentially -- >> not in my book. >> well, that's sort of my point now, isn't it? >> it is. and that's why i thought we'd get there fast. >> i think she has some time because there's no employment report. there's no force right now forcing the fed to change policy. she has a little bit of time to work this out, bring the committee along with her, and get to a better metric to communicate the market. >> that's what's so interesting, heather. even the parts of this market that if you want to describe them as most encouraging, the place where we're seeing the most run-up, if you look at the biotech stocks, those are the things being cited as reasons we

should be cautious. even the things that seem to be working have that sense of dread that accompany them. >> that biotech index right now is up, i think, 25% over the past ten weeks. that's the highest level since back in february of 2012. so investors are having an eye towards risk. again, going back to the ten-year and janet yellen, so since the fed announced their tapering program, the big question, i guess, that i would like to understand, is the ten-year still pulled back? we've announced tapering, yet the ten-year is at 4.62%. is that due to the political issues in ukraine, or is there a broader story? >> stocks. >> heather is exactly right. look at the bond yield, 2.65%. that's all because so much of the news, the economic data has been missing on the downside. the surprise index has looked terrible. janet yellen doesn't have to worry at all about whether her

guidance is clear. the data is doing all the guidance. >> why doesn't the stock market care, greg? that's what i don't get. why is it that the bond guys are seeing this so clearly and the stock guys are not? >> because the stock guys hate two things most of all, an unfriendly fed or an economy going down into a recessionary type period. neither of those things are really happening. even if you want to be pessimistic about the data, it's not about the economy shrinking. it's just about it coming down to around a 2% pace instead of a 3% pace. >> but that's the game, greg. that's the big difference. that's the difference in adding jobs. that's the difference in 17.3 trillion. that's the game. >> jim lowell, do you invest in this market based on the fundamentals like earnings and economic data, or do you invest based on how the fed responds to those fundamentals? >> knowing that the fed's in the corner certainly enables us to be a little more reasonably bullish, but the facts on the ground continue to support if not greater earnings growth, at least sustained paces of

earnings growth across a broad number of sectors that still look reasonably attractive to us. so absolutely this is a market to invest, but also to stay very well diversified in. the reality is everyone was selling the longest end of the bond market with absolute certainty that that was going to be the place where we saw the biggest losses heading into this year. >> and look what's happened. >> we see the 20-year treasury up ahead of the market averages. goody versification, good risk adjusted disciplines continue to win out. not just day in and day out, but year in and year out. >> john, you have to acknowledge there is this gap out there. it's a gap between what the ten-year has done and plenty of people on the street say they always look -- you know, you don't ignore what's happening in the bond space. that leads the movement here. on the other hand, plenty of people say, look, maybe we flushed out some of the shorts for the first part of the year and the path of least resistance is higher, supported by activity in the credit market. what say you, and how is this resolved? >> i think that's definitely a

possibility. i think that has led to some of that inconsistency so far this year, actually, in the equity markets. but i think with the steady hand of the fed, at least that we're seeing with the new young janet yellen led fed, i think that's going to lead equities to be able to gain throughout this year. we're still looking at the s&p up to close around 2,000 by the end of the year. >> where does that leave -- does the ten-year yield have to move back up soon for you to not change that forecast? >> it does. and i think the reason the yield was down just today was when i was talking about what's happening the ukraine. obviously, geopolitical forces are going to pop up throughout the year and we have to keen an eye on those. overall, we're still bullish on equities moving forward. >> thanks, everybody. >> thanks. >> all right. let's see if we can do this. we have 48 minutes left in the trading session. so far, the s&p remains in record territory, about four points above the closing high

that was set in the middle of january. we'll keep an eye on that one. as well, the dow is up 58 points right now. >> so will today be the day that we hit a record close here for the s&p 500? stick around to find out. you never know how things will shape up for us. the most important hour of the trading day. >> yes, it is. it still is. >> and we'll hear from wells fargo senior equity strategist scott wren. he just made a very bullish call on this market. could we have a close to double-digit gain this year? we'll ask him. >> also, we'll hear from somebody who says, ferkt what's going on in the markets and on wall street. it's irrelevant. coming up, why he says economic reality is only reflected somewhere else in america. he'll tell us where that is coming up. >> also, tax season is upon us. up next, john harwood explains why the income tax as we know it could be ancient history in 25 years. i hope he's right. aflac.

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welcome back. as we celebrate cnbc's 25th anniversary, we're looking ahead to what the next 25 years will bring. >> we're told you can expect big changes in the tax system in the next quarter century with an end to the income tax as we know it. from your lips, john harwood.

he joins us with a look into the future. they'll find another way to get our pound of flesh, right? >> they will, bill. the u.s. first adopted the income tax 100 years ago. may not last another 100, at least in anything like its current form. a surtax on income may remain, one capitol hill veteran predicts. but over time, washington will be taxed toward taxing consumption. >> i think we'll be able to have a much more common sense consumption based tax where if you save your money and you invest your money, you'll be taxed on much less of it than if you go out and buy, you know, the latest car or the latest whatever. >> the growth of domestic energy sources like natural gas, which is keeping prices down, will make that shift easier to accomplish. so will some increase in the tax burden on american corporations, which helped turn tax reform into a reality under ronald

reagan. the more pressure international competition places on american living standards, the more incentive politicians will have to overcome washington's current gridlock. >> people underestimate the ability of this country to transform itself both in its fiscal policy and its tax policy and its energy policy. i think we're so depressed right now. i think we're going to need economic growth so much that the future presidents will do some strange and unlikely things. >> now, of course, we can't underestimate how difficult this will be. in fact, on this very week when dave camp, the chairman of the house ways and means committee unveiled a new tax reform proposal and it found an immediate firing squad, that tells you that this may take 25 years to pull off these changes, guys. >> that's my question. i've been doing this a long time. when i started my career, donald rodriguezen was the secretary treasury for ronald reagan. he was talking about tax simplification. they've been talking about a

consumption tax forever to replace the income tax. i mean, that's going back 30 years now. you know, what is the spur? you identify some things in there, the energy industry and so forth, that might make it more palatable to pull this off, but let's not forget the political reality that still exists in this world. >> the political reality is very daunting, no question. but if you get natural gas pushing those prices down, there will be more room for politicians to tax energy. the environmental issue is something that concerns many americans, some others not so much. but if you combine those two forces, the need for growth, need to do something environmental, that is going to create a constituency for that kind of a change. and remember, we've already carved out the income tax for very large numbers of people. we're moving in the direction of a surtax kind of situation already. in fact, dave camp's proposal had two rates, 10% and 25%, with another 10% rate for people above $450,000. so that concept, the idea of

moving more toward the top for special rev new in the income tax and carving out a lot of people and reducing their taxings at the bottom is already in the political bloodstream. >> john, quickly going to ask, do you think this would be palatable, just presented to the american people? would you rather have a consumption or income-based tax? you think they'd go for the consumption tax? >> they might depending on how you structure it. the concern has always been it's regressive, that it hits people who spend a very high proportion of their income. people think of it like sales taxes. but there are ways you could structure it to make it progressive. i do think that the need to get the economy growing in this incredibly competitive world that we're facing may drive that process along. >> john harwood, thought provoking. thank you. >> you bet. >> see you later. by the way, on the topic of cnbc 25, the contenders for the 25 most influential people in business over the last quarter century, that list has been narrowed down to 100. >> today our tyler mathison caught up with one of the

finalists, magic johnson. turns out without the help of starbucks founder and ceo, howard schultz, magic doesn't think he'd have made the cut. >> the one guy who really taught me branding and really understanding bottom line and build to suit and all those kinds of things was howard schultz. he really -- customer service and making your business about the customer, he was able to really teach me a lot. >> magic's in the top 25 of all time in the nba. could he make the top 25 here? you can check out the final 100 contenders at cnbc.com. a lot of fun. very thought provoking, interesting to ponder. the last 25 years, a lot of changes have gone on. that's for sure. >> yeah, absolutely. we have a lot of changes too here for the market. now up 62 points on the dow as we head into the final 40 minutes of trade. the s&p adding almost eight

points this hour. the nasdaq looking relatively strong today as well. >> all right. hanging on so far. so you think tesla is a carmaker? think again. our next guest says this is an energy company, and investors should not be paying such high premiums for an energy company. mean while, tesla shares have rallied more than 60% this year. they're hovering around $250 a sha share. we want to know who you think has it right. tweet us your thought thoughts @cnbcclosingbell. we'll be right back.

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welcome back. what a story this week. for months, in fact, now electric carmaker tesla, it's planning to build a massive lithium ion battery factory in the united states. >> what next, right? so what does this mean for other companies that already make these kinds of batteries? morgan brennan has been looking into that for us. >> charging is a right, bill. tesla's factory could become the biggest battery factory in the world. that's really going to amp up production. tesla's saying by 2020, it'll be manufacturing more lithium ion batteries in this factory than were made in 2013 worldwide. that's going to push down the cost of battery packs. it's also going to dramatically increase demand. so here's who benefits. for starters, tesla's top battery supplier, panasonic corp., which trades out of tokyo. panasonic reportedly in talks to invest in the factory as a

partner. also, lithium miners set to gain. most u.s. mining is done in nevada, but last year reserve was also discovered in wyoming. chemical company fmc corporation has applied for leases there. and since the u.s. imports about 80% of its lithium, one of the biggest players is sqm, traded here but based in chile. one more specialty company, rock withholdings, is the biggest player in lithium-based compounds. so there's no futures market, but take a look at global x lithium etf. it holds the biggest players. that's up just over 4% today on this news. back to you. >> of course there's an etf for that. there's an etf for everything right now. morgan, thanks. now, our next guest says this isn't really tesla, isn't really a car company. instead, it is an early stage energy company, which, when you think of it that way, significantly lags behind its number one competitor and adds investors should not be paying

such high premiums for the energy segment of their business at this stage. >> so let's bring in cole wilcox from languaongboard management our own phil lebeau. cole, what a story this week. you're arguing tesla is, what, overvalued? >> if -- i look at it as saying it's very expensive optionalty on the energy play that's adjacent. if they're going to build a massive factory with excess capacity for batteries, that's a very early stage business for them and they're very far behind on their competitors for supplying those kinds of things. so you're paying a very, very expensive long-duration, leap call option on that business if you're buying into tesla today for that segment. >> phil, do you think elon musk thinks he runs an energy company? >> no. no, i think elon musk thinks he runs an auto company that could potentially have a play in the energy market at some point in the future, and he's definitely

worried about how he can bring down the cost in terms of production and energy use. but this idea that tesla is an energy play really took off this week when morgan stanley put out a note saying, we're going to raise the price target up to $320. one of the reasons why is because tesla could be an energy play. but i don't think there's anybody in the auto industry or on wall street who looks at tesla as an energy play and not an auto play. >> but cole, at the same time, even if what you're saying is that this story has years before it's going to come to fruition, isn't that the stage at which an investor would want to get in on this? to bet on the growth that's potentially coming, to bet on the shares appreciating. i understand this is already priced in. but is it as transformative as the analyst community has been suggesting? >> from a market segment, absolutely. the ability to store intermittent power generation is going to be an industry as we go forward in time that's bigger than current data storage. it's a massive new thing.

however, tesla is behind a company like byd in china that's already actually delivering containers to utilities and a company partly owned by warren buffett's berkshire hathaway. that's where the market is going. it's the new huge thing. the question is, how far is tesla behind? how much of an optionalty are you paying and are you getting a fair price? i would say in the case of tesla, it's a very, very, very expensive long-duration call option on that business. companies like byd probably offer massive larger upside risk-reward potential. >> so again, phil, i ask, if you don't believe elon musk believes he's running an energy, yet this premium has been building in this company as that play is mentioned out there, do you think he's at a point where he thinks maybe his stock is too expensi expensive? or maybe the analyst community misreads his company right now. >> well, it's hard to tell what the analysts are really thinking

here. i can tell you this. that elon musk, when he's been asked about the price of tesla and whether or not it's overvalued in terms of the actual price, he's the first one to say, yeah, are we probably priced too high, you bet. what's an accurate price? i'm not too sure. we asked him that when we were at the factory about four or five months ago. at that time, i think test wila shares were down around $140. look where they are now. people are saying $325 is the new price target. i'd be curious to see when we see a ceiling in terms of the price targets being put out there. >> cole, especially now that tesla's latest product is a convertible, but it's the note offering they're going to do now. they're second round, as i understand it. looking to raise some more capital. basically, it implies a bet to phil's point that these shares have not seen their highs, that they are going to go as high as the deal mentioned earlier this week. how feasible is that?

>> i don't know. i don't know how much of that is them making a deal. i think at the end of the day, what you're seeing is there's no doubt in my mind that tesla is going towards trying to transform themselves into this adjacent opportunity. but you have two companies. you have tesla and you have byd. they're basically going to become the coke and pepsi of this particular segment over the next ten years. it's going to be very fun to watch as we see things, you know, play out going forward in time. however, one of them you're paying for that future today, and the other one you still have the opportunity to capture it. so from an investment standpoint, it's a tale of two different stories. >> all right. >> a story everybody loves to talk about right now. that's for sure. get asked about it all the time. thank you, both. >> thank you. >> thanks, guys. >> heading toward the close. so far, so good. 30 minutes left in the trading session here. the dow is still higher. it's up 61 points. moving a little higher here. the s&p, though, trying to reach that record high, right? >> and bill, we should add -- we

couldn't to add, this all as the ten-year yield has been sinking. that gap is drawing a lot of attention. we'll keep an eye to see if th s&p can close at a high. up next, we'll hear from scott wren, who says get ready for s&p 2,000 before the year is out. >> he's on the high end of expectations right now. and generic drug maker mylan's earnings jumped 11%. what's driving that growth, and how is obamacare affecting their bottom line? ceo heather bresch will be joining us later to talk about all that. you're watching cnbc, first in business worldwide. 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.

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welcome back. stocks are trading still higher at this hour. lately the last hour, this most important hour of the trading day. we've seen selling into the close. so far, not the case today. the dow is up 63 points. about 10 points off its high for the session. the s&p is what we're watching carefully. that's what traders watch. it's in all-time high territory right now. if it were to close right there, that would be a new high. we've tried four times -- three times this week, failed to do it. maybe today is the day as we head toward the close. >> yeah, bill. markets have felt almost like they're restarting the year

running in place. that correction blink, if you missed it. despite all this, wells fargo advisers is saying it could finish at the level 2,000 for the year. that does make wells one of the more bull iish of the bunch. >> that would be scott wren. also with us, chief investment strategist at raymond james financial. good to see you both. scott, where did you come up with 2,000? >> bill, we had our old target, which was 1850 to 1900. we set that back in august. i think the economy is more dependable. i think you're doing to see more confidence, not only from u.s. investors, but from global investors as well. so we're kind of the lead sled dog. our economy is growing at a dependable but slow rate. valuations are reasonable. so really, all we're doing, we adjust our earnings number up to $118. you take a historical average on that, and that gets you to about

2,000. really, if you look at valuations and sentiment, a 2,000 call is really not a crazy call at all. >> all right. jeff, where do you guys stand? what do you estimate? for scott, they're looking at $118 for earnings if year for the s&p 500. where are you guys? >> we use standard & poor's bottom up operating estimates. they're clustered around $122. i think scott's right. if you put a normal valuation of 16.2 on that, you come up with 1975 as your price objective. that's where we've been all year. i think that's reasonable to expect. i think that the fed is going to continue to expand its balance sheet, about 13%. earnings estimates up about 13%. there's a very tight correlation with an increase in equity prices. i think it's reasonable to expect 10% to 13% out of the equity markets. that gets you to 2,000. >> it's incumbent upon me, i think, to bring up the obvious. we've had a four-year bull market.

an incredible rally here going back to march of 2009. we're coming up on the fifth anniversary of that bottom right now. but yet, you're still out with aggressive numbers based on earnings that expectations may still have to come in. scott? >> i really think that this year we'll see that 10% to 12% total return jeff just talked about. but really, our work -- and granted, this is a little bit of guesswork when you get out there. i would argue we're going to see a good year this year, 10%, 12% total return. it would not surprise me if in 2015 and 2016 we saw something in the 6% to 9% total return, something like that. i think this cyclical market has more to go. if that's the case and you compound that over three years, we want our clients in this market. a lot of retail clients are way under invested in stocks or

sitting on way too much cash. and if we are correct and that's the kind of returns we can expect through 2016, they need to be in here. so this is not the time to shy away from stocks. >> jeff, you know, having seen cycles play out, to bill's point here and to those retail investors who may still be thinking about whether to get involved, what stage, what faphe are we of this expansion? >> kelly, i've never really varied on this. i think we're in a secular bull market, like '82 to 2000. i think it has years left to run. a lot of participants only have the shared knowledge of 2000 to 2014. they have not seen the advantages of holding high caliber blue-chip dividend playing stocks through a 10 or 15-year cycle. i think we're only four or five innings into this game. i think we have years left to run. >> and you just throw darts or

do you have sectors that will take us there? what kind of growth will we see? >> i think scott's right. i think you're going to get 3% to 4% gdp growth over the next 24 months. that's simple but sustainable, likely the sweet spot for the equity markets. even if you don't get a pe multiple expansion, i think you're going to continue to trade higher, and i think the drivers of it are the energy, independence theme. i think the driver is the american industrial renaissance. i just had rich bernstein, the ex-strategist from merrill lynch. we did a video clip. he thinks it's the greatest bull market of his career. and i'm not sure i go that strong. but i think we have years left to run. >> jeff, are you going after bill's job? >> i was going to say, we're hoping rich has a long, storied career as well. thanks, guys. pounding the table for the bull market here. >> all right. >> you bet. >> good to see you both. and we have about 20 minutes now to go into the close.

so as we discuss where we are in this cycle, let's see how important today becomes. bill, do we set a new record high for the s&p 500? the answer right now seems to be yes. >> and then the question will be, does it matter? i mean, we'll see what happens tomorrow if that, in fact, is the case. that's for another day. >> and it is a green day across the board for markets. up next, dom chu will catch us up on some of the day's big movers. >> then, is wall street a good proxy for the economy? the author of "economic revolutions" says wall street is irrelevant. really? he'll make his case. we'll debate that coming up. [ male announcer ] these days, a small business can save by sharing.

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can i get my aleve back yet? ♪ for my pain, i want my aleve. ♪ [ male announcer ] look for the easy-open red arthritis cap. so a lot of green on the screen today. it's sticking so far. >> dom chu joins us now as promised with today's big movers. >> all right. we're going to start off with jcpenney having its best day in at least 46 years after it reported a narrow loss in the fourth quarter. analysts have thought the embattled retailer said its turnaround is on course and its most difficult part is behind it. kohl's also higher. posted better than expected fourth quarter profits and raised dividends by about 11.5%. a different story, though, for

catamaran, which is sinking, if you'll forgive the pun, after they forecasted pull-year profit below street expectations. then mylan setting fourth quarter records. in a programming note, the ceo heather bresch will be live on "the closing bell," this show, 4:00 p.m. eastern. we'll all be paying attention to that interview. >> looking forward to that one, dom. thank you very much. here's a check of markets as we head into the final 15 minutes here. dow is up almost 60 points. 25 or so on the nasdaq. 7 on the s&p. >> before we go to this commercial break, we have this sad note. a familiar face to this program and to cnbc viewers, joe dear has died at the age of 62 of prostate cancers. since 2009, joe was the chief investment officer of calpers, the nation's largest public

pension fund. now, despite the prestige and pressure of his job, there were never any errors about joe dear. he was a frequent guest on this program, didn't take himself too seriously. he answered questions honestly, which we always appreciated. our deepest sympathies go out to his family and to everyone al ca ca calpers. in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ 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. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job

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all right. heading toward the close. about 11 minutes left in the trading session here. we're starting to see a little bit of selling. the dow up just 45 points now. it was up 74, 75 at its peak. the nasdaq still up 20 points. the s&p still in record territory. the three points above its previous all-time high. joining me now, david darst, senior adviser at morgan stanley and joe quinlan. joe, more analysts are up on their forecasts, even as this market continues to struggle for whatever reason. s&p 2,000 is now a target for many on the street. what about you? >> at u.s. trust, bill, we're looking at 1950 to 2,000. we see good earnings. we see the global economy picking up. there's good demand right here

in the united states. >> you don't think this bull market is long in the tooth at this point? can we go that much further? >> this is like the fifth bull market we've had. maybe another year or so. depends on the fed, global growth, housing, and really the employment picture. i think we have room to run. >> what do you think, david? >> bill, i think you can see easily 2,000, maybe even 2100 next year with the just one-point expansion in the price earnings multiple. you have earnings for 2015 up about 6% to 10% as of now. so the market's acquitting itself. it struggled, as you pointed out day after day on the show here. it goes above the all-time high where it is now. can it close above the all-time high? basically, if things do get rough, and that's the good thing about janet yellen's testimony today, they're going to step in and put some fuel back in there, monetary fuel, and you have both japan and you have europe ready

to do so. one thing, bill, you've got to keep watching. the chinese currency has been going down rather than up for seven days in a row. it's the lowest it's been in seven months. that could roil the currency markets. we wish b.b. netanyahu a successful visit. we hope that does not create any headlines. we hope it creates a lot of partnership with our big ally, israel. >> there you go. joe, how much does the fed need to help the stock market to get to your target for this year? >> oh, i just think steady as you go. we have the tapering. we're not tightening. that's two different things. i think what we need from the fed is good communication. tell us where you're going. tell us what's the forecast. i don't think they need to do much. i think they have a good playbook. they laid it out. now just follow the skript. the rest will take care of itself. >> the bond market, yields keep going down, which suggest they're expecting weakness in the economy. if you want to read it that way.

yet, the stock market keeps going up to some degree. so who's right here? you obviously think the stock market is. >> well, i think some of the yields coming down, there's a lot of foreign cash finding its way into the united states. it's coming out of the middle east. it's coming out of eastern europe. it's coming out of china as well. so we're deep dmoebl capital market. we could be tapering, but we're taking on a lot more capital as well. that's a key variable. >> bill, you want to watch the ism number, which will be this coming monday. this is a big week coming up. and on friday as the jobs report for february. so people are going to see whether that's weather related as janet yellen said today. you want to keep your eye on both of these. the consensus is for the unemployment rate to drop to that threshold number of 6.5% this friday. but jobs creation is expected to be only about 140,000 jobs. so keep your eye on the ism. can it bounce back from that 51 number? consensus is looking for around 52 on monday, bill. >> we always have the weather to

fall back on. we got another doo zi of a storm apparently coming on monday. so aren't we all glad about that? actually, it'll hit the middle part of the country beginning tomorrow. so let's all buckle up. >> 21 days until meteorological spring starts. get ready, bill. >> yeah, right. it's on the calendar, i know that. thank you, both. good to see you. we'll take a break, come back with the closing countdown. by the way, i'm on "the nightly business report" tonight. that's why i'm sitting here. i'll see you on pbs. check your local station for the time. s&p still in all-time high territory as we head toward the close. earnings reports from gap and salesforce.com are also moments away. we'll have instant analysis and results of those. plus, one of the hottest stocks today, mylan up 10%. the ceo exclusively coming your way with kelly on the second hour of "the closing bell." stay tuned. i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment

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♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. coming up on the three-minute mark. we're keeping an eye on the s&p. looks like, unless we get a little quick sell-off at the close, that we may get an all-time high for the s&p 500 index. you can see on the left there the previous all-time high close was 1848 and change set in the middle of january. we're a couple points above that now. the dow is still almost 2% below its previous all-time high. we're not even close to that.

of course, the nasdaq, that's not even close to those highs set back in 2000. bob posani, how impatient are traders becoming with this cat-and-mouse game? >> i don't care about the traders. i'm fed up with it. let's do it already. we're going in the right direction. 1852 right now. by the way, not just new highs on the s&p. russell 2000 as well and the mid cap index. that's also historic. we're going to get a trifecta if this keeps going in the right direction. it all started lift iing in the morning when yellen was testifying. nothing earth shattering but very soothing. very, we're watching, we think it's weather, but if it's not, we stand ready. we can stop the taper if things get worse. soothing words. you have to admit janet yellen has this soothing combo going. sort of like a very wise grandmother and a college professor all rolled into one. the questioning was still very

deferential to her. no sharp edges to any of that testimony today. >> and you have to admit the weather question is very big on the economy right now. we usually make light of the fact that companies can get away with using it as an excuse to some degree. but you wonder, like today, the durable goods reports was less than expected, weaker than expected. the jobless claims number was a little higher than anticipated. you know, it's hard to get a read on this economy right now when the weather is wreaking as much havoc as it has. >> exactly. and we've had a good new home sales number. beyond that, it hasn't been that great at all. so the waters are very muddy. >> but the stock market is anticipating it is the weather and when spring cups, the weather will get better. >> yes, and the key point of everybody who says we're at new highs, yes, we're at new highs, but we're sort of stalled at new highs. we're not blowing up.

look where we are on the year. we're basically flat on the year compared to where we were last year when the markets were heading up rather dramatically. a lot of people are arguing that new highs doesn't mean that we rocket up 20% this year. we could end up being sideways for months on end very easily, sitting right near historic highs. >> now you have all these houses coming out saying s&p 2000 by the end of the year. >> yeah, i know. i saw a couple today. if any of the numbers start improving in march and april, as a lot of people seem to be anticipating, i think that's quite possible. right now it's still very muddy. and janet yellen is just about what we needed today. just right. the porridge was just perfect. she hasn't missed a beat. >> looks like we're going to do it. fourth time in a row we've flirted with that all-time high on the s&p. we're going to get it with a

gain of 8 1/2 points. keep an eye out for that. we have gap and salesforce.com earnings coming up. an exclusive interview with the ceo of mylan as well on the second hour of "the closing bell" with kelly evans and company. i'll see you tomorrow, kelly. thank you, bill. welcome to "the closing bell." i'm kelly evans with the s&p 500 rallying today to a new record close. here's how we're finishing the day on wall street. take a look across all major indexes. we're seeing green arrows. the dow adding 75 points as the bell tolls. the nasdaq adding about 26 at this hour. the s&p 500 pushing through at the close there, adding about nine points. 1854 is the level there. a rally of half a percent to a new closing high. what does it all mean? let's ask today's panel.

joini in it is great to have you all here. elon, was it yellen? >> i don't know if it was entirely yellen, but she did say something interesting. she mentioned that the soft data may not entirely be the result of the weather. the fed will be attentive to signals that the recovery may not actually be on track. what i want to point out is not just what she said but how she said it. she veered from the script of her previous testimony and added this aside. she felt like it was very important to bring this up, very important to sort of break the mold, say something about the recent data, and let the markets know exactly how the fed is going to be interpreting the signs going forward. >> the reason i ask, because i might have to channel lewis c.k. all over again. we have another closing high. there might be some collapse here and there, guys, but you tell me if this is something to be applauded, if it's a moment. what does this moment in time tell us, jeff cox?

>> well, i think this goes back to -- you know, we talked so long about this being the most hated stock market rally ever. it really bears out, as we've seen it this year. not a lot of trust here. i did a post earlier today on cnbc.com about the black swan index. a lot of guys out there who are buying protection against some unseen event, people are scared and looking for protection. >> and there perhaps is no better way than focusing on roadw retail. >> if we're looking at gap's earnings for the fourth quarter, we are seeing a beat on the bottom line. gap reporting eps earnings of 68 cents. estimates were for 66 cents. revenue that was expected was 4.6. gap reporting 4.58 billion.

just a touch light on the revenue. we know what the comparable sales look like month by month. gap does still release that comparable sales. up about 1% for the fourth quarter. not exactly the best that we've ever seen, but still it's positive. no true commentary about weather right now from the company's ceo. in the release, gap also upping its dividend to 88 cents per share. that's a 10-cent increase. kelly? >> courtney, thanks very much. shares moving around a little bit now. down about 1.5% as we speak. again, a shiegt beat. reaction here from the panel, guys? >> overall, retail earnings have not been that bad this season. a lot of people have been really worried about them. yes, expectations have been lowered, but they've been coming in okay. i think gap is a perfect example. revenues were a little shy. not terrible. this is something we appear to see the market applauding. >> robert? >> you say no one's excited about this market. i think today is very exciting. not because of the market highs, though.

because of all the activism. we have the official dawn today of the age of activism. we have these three giant companies, very different situation. activism may be the catalyst for this year's rally. >> i think i have the answer to that question. i think the answer is that there's so much cash out there now. investors demanding that cash be put to work. we saw a bank of america survey coming out. investors at their highest level ever saying we want to finally see some business growth here. that's why the activist investors are coming off the sidelines and demanding action. >> brian kelly, what say you about that point or about gap here? >> well, activist investors are coming off the sideline not because they want business growth, because they want the cash in their pocket. that's the game they're playing. none of these investors are saying, hey, let's build another factory and hire another 5,000 people, this is going to be great. >> but they can't cut any further. how do they get more growth?

>> they get more growth with economic growth. they can pay a dividend back to the shareholders. that's all fine and dandy. if you play along with those guys, you probably make money on that. if you look underneath what's going on, the economic growth isn't there. >> whether this is good for economies in the long term or not, it is very good for share prices and good for shareholders today. >> think about what you just said. whether this is good for companies in the long term or not. >> that's a separate argument. what i'm saying is that this is good for share -- look at the share prices of pepsi. >> no, absolutely. >> these are all up on the activism. >> there's no doubt -- of course -- but when it ends, who's left holding the bag? that's the problem you have. >> here's the thing. we were talking about these share prices. we're talking about a bid for stocks. what is the bond market telling us? completely different story. i have to say, i've been talking to traders all day about this.

that drum beat of what the bonds market is saying is definitely growing louder. there does seem to be more fear that things are not that great. >> here's the interesting thing. we raised this during the last hour of the program. the consensus if you want to call it that on why we have this by fur kags, how can it be the s&p 500 is hitting a new high on a day when yields to the ten year are sinking, which perhaps correlates with a weaker outlook? they're saying it's geopolitics. i'm not sure that's an argument that's going to stick. >> you know, we know now you don't need a good economy for a good stock market. if we've learned anything in this crisis, these are driven by two entirely different things. >> this is the lewis c.k. point. everything is amazing but nobody is happy. >> depends how many shares you own. >> markets like to make people feel as stupid as possible. this is the fourth day in a row we've been trying to hit that record. it's a day when it probably shouldn't have happened, right? this morning things in ukraine

seemed a lot worse. the euro was falling. but here we are talking about a new record. >> wait, wait. you guys are reading way too much into the price action in the stock market today. i mean, you're saying that -- >> no, we're talking about record highs. >> the dow was up 75 points. it's a record high. who cares? it was a record high three weeks ago. you can't -- it's kcrazy. >> forget what's happened in the price action and how many times we've been here. the point is we're here. >> great. i agree with that. >> it still matters how tall you are. i'm saying, how tall is the market here, and what does that tell us about its character? >> i don't think you can tell by the growth the market has had today about its character whatsoever. >> i want to know what elon says. >> i think at the point we were bringing up earlier about how stocks are performing, how washington is performing, how main street maerk is performing is a really important one. i think we're going to see gdp

numbers tomorrow that aren't going to be that significantly higher from the first edition of q-4 numbers we saw. i think we're going to see a q-1 that's significantly slower. that is a reason to worry that it the recovery may not actually take off in 2014. and that's a problem for households across america. it's a problem for consumer spending long term. and it's a political problem. >> and there's another interesting piece in all this. one of the reasons why we haven't had a major investment boom is because tech isn't really contributing. a lot of people, even larry summers, talking about how cheap it is to be a start-up today and get a market value. maybe that's a problem. anyway, let's get to salesforce.com reporting earnings. they're down about 1.5% after hours. josh lipton has the numbers. >> sales force just reporting. the street was looking for 6 cents on 1.3 billion. sales force reports 7 cents on 1.15 billion. so a beat on the bottom and the top. just looking through here,

deferred revenue up 35% to 2.5 billion. that looks a little better than what the street was looking for. subscription up 37% to 1.08 billion. a little better. services at 70 million, a little light. in terms of the forecast, q-1 basically in line here. they're looking for eps of 9 to 10 cents. the street was looking for 10 cents. q-1 revenue, 1.21 billion. that's a bit better than what the street was looking for. that stock has been up big this year. up about 60% in the past 12 months. kelly, back to you. >> yeah, salesforce.com, such a great story. josh, thank you. sales force chairman and ceo marc benioff will break down those results on "mad money" with jim cramer. that's a can't-miss interview. now, the stock market shrugging off what remains a tense international situation in ukraine, where masked gunmen thought to be militant ethnic

russians seized government buildings overnight. both secretary of defense and secretary of state with words of warning to russia today. front-page editor of "business insider" here with us. michael, how should investors be thinking about this? >> they should be watching it very closely. ukraine is hemorrhaging money. the prime minister today said they only have $400,000 in their treasury. they have $15 billion left in foreign reserves. so they need some help. >> what's the next flash point? >> well, you definitely have to watch what's going on in crimea. the russian war games will be going on from friday to monday. the fact that there are russian flags over the regional capital and the parliament building in crimea is troublesome. then this government that was approved today, what they're going to do moving forward to get the balance sheet of the country settled. >> finally, michael, can you get

a sense of a correlation between the events in ukraine as they played out today and what was happening in the market? >> i don't think i can say how it affected it, but i can say that the next couple weeks will be very important. the imf is visiting ukraine next week. russia still has significant leverage economically there. they can raise gas prices, which would really hurt. the prime minister said today that $70 billion has left the country in the last three years and $37 billion is just missing under yanukovych. so they have to figure this out quickly. >> michael kelly from "business insider," thank you very much. we'll keep an eye on that this week. and jeff cox, quickly to you as well, from what you can see, the ratio, the correlation, whatever you want to call it between what's playing out overseas and the market action today? >> well, starting to show up already in the currency market. there's definitely some dislocations there. i think you have to really watch

that, watch how it turns -- how it affects energy prices. you start to see this creep into other markets. i've said often this doesn't matter until it matters. as an investor, you really have to keep a close watch on what's happening there. >> thanks to everybody. fascinating discussion. be sure to stick around and catch much more with brian kelly on "fast money." brian, i wish we could keep this going for now. i guess we'll have to wait until the next time you come back. >> wait until 5:00. >> exactly. that too. all right. thanks, guys. much more ahead on the markets today. now back in record territory, as we mentioned, for the s&p 500. in the meantime, take a look at this one. mylan surging today on the back of better than expected earnings and the hint of a big transaction in the works. another one. the drug maker ceo here in a cnbc exclusive next. we'll get the scoop. also coming up, do the rich get more incentives to save for retirement than the middle class? senator elizabeth warren says so, and you'll hear it from her and our panel debating it just ahead. announcer: where can an investor be a name and not a number?

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welcome back. after trying all week, the s&p 500 finally closing at a record today. dom chu, what pushed us over the hump, and what's moving after the bell? >> finally we got through that resistance area. we're going to start off with gap. the company beat wall street forecasts by 2 cents in terms of

profits in this fourth quarter. it came in a bit light in terms of sales. they're increasing their annual dividend to 88 cents a share. the stock is currently at least up -- well, now down about a percent. salesforce.com has beaten fourth quarter expectations by a penny as well. its revenue coming in a bit higher. it sees first quarter earnings of 9 to 10 cents a share. a programming note here. sales force chairman and ceo marc benioff is going to be on jim cramer's show at 6:00 p.m. eastern time here on cnbc. and then there's ross stores. out with fourth quarter results that matched wall street estimates. earnings guidance below what wall street was expecting. that stock down about 2.5% as well. then there's splunk. posted weaker than expected fourth quarter earnings, down about 4%.

decent moves in the after market. back to you. >> thanks, dom. as mentioned, mylan an example of a company putting that money to work. not only have they completed a few acquisitions this past quarter, they plan to execute another this year. with us now in an exclusive interview is mylan ceo heather bresch. great to see you. what can you tell us about this transaction? how big are you talking? >> we've said we're not going to limit ourselves. we've set certain parameters out there, and most importantly it will be an accretive deal. we think there's a lot of interesting opportunities up there. we think we're well poised to act upon it. >> why is size so important in this space, in your business? >> you know, i think that scale, the globalization of the industry as a whole from customers to consumers. you know, i just think that being able to serve every geography and of course our mission statement to get to 7 billion people with affordable medicine. the way you do that is with scale. >> has affordable medicine gotten safe?

because this has been one of your driving goals, to make sure the standards for drugs we're buying in the country, whether made here or overseas, are the same. where do we stand in that battle? >> so we're in the beginning stages of that battle. i think as you'll continue to see as the fda is able to get out and start looking for things, they're going to find them. we believe that's a real differentiator for mylan. we have held all of our facilities to the same standards no matter where they're being sold into. we believe the right thing for patients around the world is to continue to try to lift that bar. we think starting here, obviously, with the u.s. marketplace is the best way to do that. fda's got over the next three to five years to raise that bar and make it a level playing field. >> and can you talk a little more about how you're putting money to work? we've been focused on companies, whether they're deciding to return cash to shareholders, whether they're making major acquisitions, whether they're, you know, raising debt, for example, with an eye towards bigger things down the road. are you guys going to look --

how do you think through your options and what your priorities are on that front? >> so -- and i think what we were able to demonstrate even today on our earnings call is organically, we already have tremendous amount of growth and a trajectory for growth through 2018. we have said we'll hit $6 by 2018, and everything we're doing is to execute on that with things we already have. for us, a transaction, strategically one that complements the platform either operationally or commercially, will just continue to add or accelerate that growth. so i think what you're seeing today is people giving us credit for what we already have at hand and the kind of growth we're projecting. like i said, double-digit growth. and with the transaction, just being able to accelerate that. i think we've continued to turn great shareholder value. we've returned over $2.5 billion over the last couple of years. i think we'll continue to look at the best way to maximize the balance sheet and bring value to shareholders. >> how much harder is it getting in a world where we're bidding up prices so aggressively for

whether it's the pharma or biotech space? it's drawing the attention of people in washington and on wall street with regard to what shareholders are willing to pay here for the valuations for some of these companies. i don't know if we can show that chart right now. nevertheless, how do you look at the valuations here? does that keep you from potentially doing any acquisitions, things you might have your eye on? >> you know, look, i think the good news is any time you don't have to do a transaction, you're able to be smart about it. so our business model has always been about doing -- making strategic moves that are complementary and make sense. if other elements are by-products of that, so be it. i think we've been fortunate to be very smart and tactical about our acquisitions. we're going to continue to be smart. i think, like i said, there's a lot of interesting opportunities that are continuing to percolate, and our ability to act on them, given the size of

our balance sheet, our financial flexible s quite substantial. >> heather, what do you think is more overvalued, biotech or bitcoin? i heard senator joe manchin expressing concerns about that this morning. >> i certainly can't comment on bitcoin. what i can tell you about biotech, i believe biologics is the next frontier we're going to have to conquer. we need affordable bio in the market. >> great to see you this afternoon. really appreciate your time. >> thank you. >> ceo of mylan pharmaceuticals. well, wall street versus main street. up next, the writer of the economic revolution. why he thinks wall street is irrelevant. up next. tdd# 1-888-628-2419 searching for trade ideas that spark your curiosity tdd# 1-888-628-2419 can take you in many directions. tdd# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action

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welcome back. cnbc is live from the young presidents organization summit or ypo for short in los angeles. thousands of young executives and holeful visionaries meeting together with their best idea. and with us now from that event is the founder and ceo of deke digital who says here's something young people know that many are missing. economic reality is not reflected by wall street. welcome, dave. what do you mean by that? >> well, i think our obsession with the ticker is kind of a shorthand or a drawn picture of

the economy, as in saying, hey, we hit a record on the street today, that's got to mean good times are ahead and nothing but prosperity is there. if that ever made sense, what i'm telling you is that the changes that are being wrought in the economy make it less and less and less relevant today. what's happening on main street and what's happening in the industrial parks and what's happening in the valley, that's what's driving change. that's what's driving around the corner. i don't think that the ticker reflects that well. i think our kind of grasping at that as this is how we know what's going to happen next is not good for national economic policy or planning or anything else. >> dave, i want to bring the rest of the panel in on this. it's exactly what we were just discussing. robert frank, i want you to respond here. you were saying that, you know, look, there's no problem. >> look, dave, i just want to -- i know a lot of ypo members. they're wealthy. they have a lot of their investments and wealth in the stock market. for your folks, this does matter, right? secondly, financials and the

financial markets are a huge percentage of our economy. >> look, i'm not telling you that people's wealth, that their accumulated wealth doesn't matter. what i'm telling you is if you want to know what happens next, it's not looking at the ticker that will tell you that. what i would also say is, you know, i've been around here with these 3,000 men and women over the last couple of days, and would you like to know how many conversations have occurred around the subject of wall street? none. i mean, it's kind of -- it's become the province of central bankers and high-speed traders and -- >> so what are they talking about? >> -- companies that are not driving the innovation picture. >> if you're saying it's not the future, what is the future? what are they talking about? what should we be looking at as a future 6 to 12-month indicator? >> well, look, if you go back to 1964, the world's fair and the center of innovation was all of the american giant companies. that's who was making stuff happen. u.s. steel and the big three. but what's happening today is with all of these remarkable

information tools and sources and technologies and cloud power that's out there, what you're seeing out here is people in traditional industries seizing those tools to fundamentally change how services and products are delivered on main street and out of that industrial park. and that is a very different paradigm than saying, hey, what's happening, you know, only apple can drive innovation, only google can drive innovation. i don't think that's the game anymore. >> dave, i totally get it. there's absolutely a tech revolution underway. but here's the irony. all of these companies that you're talking about and all of these ceos you're talking to, they want to go public. they want to tap the financial markets. there's a huge intersection between silicon valley and wall street. >> yeah, look, the guys in the valley want to go public because when you can get money that says an iphone app is worth $19 billion, a lot of people look at it and say, i'd love to be part of that. but that's not the conversation among people in kind of that

bread and butter economy. >> but dave -- >> if you want to really talk about the economy, i mean, wall street versus main street, are you kidding me? that's like godzilla versus scooby doo. we have placed so much emphasis on wall street's growth. >> if you wouldn't minds, which one is scooby doo? >> if you break it down, talk to the small business owners in this country. they're still afraid of taxation and regulation. talk to the guys who are trying to hire people and have a massive skills mismatch, which you had to have heard about that out there in silicon valley, about hiring the right people for the right jobs. there's a huge divergence between saying, oh, geez, the s&p 500 is at record highs and saying the economy is back to work wr we need it to be. >> yeah, no, we're on the same page there. the job numbers and the sort of

sense of national well being does not get generated on what goes on in the halls either in new york city or, frankly for that matter, now in san francisco. >> so dave, what is the outlook for main street then? you guys actually just released a survey this month saying that confidence among your members is at the highest level since april of 2012. so you guys were feeling incredibly bullish in the economy. >> and guess what, the market's a new high. >> exactly, when the markets are reaching record high. do you believe that's still the correct outlook? >> yeah, look, i'm not here to tell you -- i don't want to tell you it's wrong. i'm just telling you that when you've had the kind of fed policy which is clearly driven asset prices and what are the alternative when is you can't earn any kind of fixed income return, then what i'm telling you is, you know, that market is going to do great. our market and where the guts of the economy's coming from is only coincidentally sort of, you know, optimistic or doing well

right now. what you're seeing is people taking -- >> i'm sorry. what i'm hearing from you is basically that you're saying is you have a different way of looking at things but that it comes down to the same kind of message that wall street is giving. are you not? >> look, i mean, i don't think -- i'm not a market strategist, but i'm a market watcher. and this market has not been driven by the power of or the stay sis of corporate earnings. they've risen, but this thing doesn't continue to hit new highs because corporate america is being so remarkably productive and innovative. >> dave, last question. your guys, and a lot of these are top executives in charge of hiring. what is standing in the way of your ypo members hiring more workers right now? >> you've created a playing field in which it makes no sense to expand by number of people. you can outsource, crowd source, offshore. i mean, you can automate. you can do things a thousand

different ways. and that price will not change. >> so that's permanent. you're talking about a permanent unemployed. >> i'm talking about a permanent sense that you can do more with less people and people will continue to do that. >> this is what we talk about when we talk about structural unemployment. >> i think the concerns are same, east coast or west coast. dave, thanks very much. dom? >> all i can say is uggs. deckers getting hammered in the after hours. they easily beat street expectations. it's the guidance for the first quarter for a loss of 16 cents. the street was looking for a 9 cent gain. the stock was halted and reopened at 420. it was down as much as around 19%, 20%. it's gotten back about half of those losses now. still very much a big down trade for deckers in the after market. back over to you. >> thank you, dom. so is the middle class getting shortchanged? up next, we'll discuss if the

tax code is giving average joes fewer incentives to save and what one powerful senator wants to do it about it. then later, td bank ceo is here to talk about the housing recovery and so much more. you don't want to miss ed clark. we'll be right back. we only kno: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com could save you fifteen percent or more on car insurance.s everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here.

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welcome back. top wall streeters like black rock ceo larry fink have been warning a coming crisis is the lack of retirement savings for too many americans. now massachusetts senator elizabeth warren agrees. hampton pierson has the story. >> so massachusetts senator elizabeth warren was invited by a progressive think tank, the center for american progress, to talk about tax incentives for retirement savings. now, the group contends the current tax code greatly encourages retirement savings by high-income earners but has fewer incentives for middle-class savers. senator warren agreed, citing the disappearance of the defined benefit pension has part of a retirement crisis. >> over the last two decades, the proportion of american workers who are covered by defined benefit plans has been cut in half. so that now we have fewer than

18% of workers in america covered by a defined benefits plan, and it's headed down. >> other factors, she says, creating retirement insecurity, americans with little or no savings and the senator says a social security system that is under attack. >> two-thirds of seniors rely on their social security payment to help cover basic expenses. food on the table and a roof over their heads. for 14 million seniors today, social security is all that stands between them and poverty. >> her solutions, strengthening and even expanding social security and creating more government incentives to encourage retirement savings. >> all right, hampton. thanks very much. i want to get the panel to weigh in on this. is it an incentive problem? do you change the tax code? what do you do here? >> there's no question that

because of what's happening on the lower end of the income ladder, people are not saving as much as they used to. the answer is not to then give them more money. maybe the answer is more discipline and more savings by people who can afford it. we had a poll -- >> are you sure the answer isn't just give them more money? >> if you give them more money, maybe they save even less. >> i don't mean in the form of a check or lump sum. can't you do it in a structured way? >> maybe the president had his my ira plan, which is similar to that. there was a poll that asked people, what was the number one reason you got to be a millionaire? they said saving regularly and early. so maybe if people had more discipline, we wouldn't look to the government to bail us out when we needed more retirement. >> are you sure there's no discipline? >> at the same time, we have seen 401(k) balances reach record highs. the average balance is something like $89,000. that's in the enough to retire on. i'm sorry. it's just not going to take you to the age of 80 or 90 or even

75. >> forget 80. that's one of the big issues compounding this problem. americans are living longer. in fact, the average life span is up to 93. to retire for that is a completely different equation. in your old equation of, okay, after i put a certain age, i'm going to put everything into bonds. that just isn't saving anymore. you're seeing a lot of companies capitalize on it. >> then in comes the obama administration with president obama in his state of the union address talking about these ri tiermt caps. you can only have $205,000 a year to draw from when you retire. how does that help anything? >> quick last word. >> and why do you retire? a lot of guys i know don't want to retire. they want to keep working. they love doing their jobs. i think the whole notion of the fact you get to retire at 65 and that's it, a lot of people don't want to stop. >> zero incentive to save. >> breaking news at this hour on pepsi. scott? >> all right, kelly. thanks so much. a sharper rebuke, if you will,

of nelson peltz's plan to split pepsi into two different companies, beverages and snack foods. pepsi has filed an 8k, an official response, in which they say, we have carefully studied the current company structure and beverage business and management's conclusions that much of the data is selective and in many cases misused, they say. they go on to say in short, the board and management have concluded that the financial engineering you propose erodes value for shareholders rather than creates value. he would certainly take issue, i'm sure, with that last line about financial engineering. he would certainly cite the underperformance of pepsi over the last year, relative to its peers. pepsi co. stock over a one-year period -- i should say pepsi co. is actually up over one year, 4%

compared to coca-cola, which is down. over the longer period of time is what mr. peltz would argue that pepsi has underperformed. he makes the point that pepsi would be much better off splitting these companies into two different units. so there it is. the 8k from pepsi. that's the story. back to you. >> scott, thanks very much. robert, thoughts here? >> look, my first job in journalism was covering coke and pepsi. throughout history, what you've seen is that snack group for pepsi has been such a buffer globally when you look at the ups and downs of the carbonated beverages. i would much rather be a pepsi shareholder going into the future than coe cca-cola. >> if you listen to pepsi's recent earnings, they have continually pounded the table for all the benefits of being one company, one alignment. distribution is the big issue, right? then with both of them combined, they have better distribution. >> wow. we're going to keep a close eye

on this one. it's going to get back into this question of, is the snacks business a better home potentially for something with -- >> and it has been so good at kind of listening to them, bringing them in. the whole idea you can bring these guys into the tent, listen to them, appease them, doesn't seem to want to work. >> thanks, guys. coming up, td bank profits jumping last quarter. the ceo breaks them down with me next. we'll also get his take on the housing market and if he sees this recovery sputtering into the end of the year. wait until you hear his take on bank lending too. also coming up, your take on tesla. tweet us @cnbcclosingbell. we'll be right back.

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50%, which meant we were trying to move to a 40% midrange to 50%. so we had a series twice a year moving the dividend up. we thought, why don't we get a big increase. that means it's less certain we'll have another increase this year. but we'll have raised the dividend this year by over 13%, close to 14%. since we started this program, we'll have raised the dividend by 30%. i think shareholders are pretty pleased. >> for you, this isn't meant to be some signal about a change in the underlying business? >> no, no. we're still quite focused on increasing our dividends and lining with our profits and making sure we get to the midpoint of the range. i think the shareholders are happy. >> what can you tell us about what's happening fundamentally with the banking business? what kind of demand are you seeing out there? >> well, we're actually seeing quite good demand. so we're -- i'm talking both canada and the united states. so in canada, we have very

strong results, underlying results. the only negative we had, which you'll be well aware of, bad weather. >> how does that affect your business? >> well, we're a big player in the auto and home insurance business. so bad weather, you know, we had losses in our property and casualty firm this quarter. and so that pulls our overall insurance results down. so if we hadn't had that, our earnings would have been up 12% in canada, our canadian retail. as they were, they're up 5%. so it was a good overall result, but it would have been a spectacular quarter absent the weather. then the united states, you know, we're getting very solid results again. you know, good loan growth. we're quite pleased with what's going on. >> how are you achieving that loan growth, which seems to be quite elusive for the industry more broadly? while it's picked up from the low, perhaps we're not seeing

the kind of growth that anyone from federal reserve policy makers to people in your business would like to see? >> yeah, i guess we fundame fundamentally are a growth engine. we open significant numbers of stores in the united states. we'll open about 33 new stores this year, 15 in new york city alone. so we've been -- we just constantly invest in growing our distribution network. then we have, you know, we call it a better business model. we're open longer. we give better service than anyone else. so we just attract -- you know, we open about 100,000 new checking accounts every single month. >> wow. >> so that's a huge flow of customers to us. that means they create lending opportunities for you as well. >> isn't it true, though, there was a survey from a firm out of chicago where they were saying, look, checking it a fundamentally -- it's a loss leader. so if you're going to open a checking account at a bank, that bank has to cross sell you on other products in order to capitalize on that opportunity. that must be true for your

business then. >> i think -- i wouldn't put it as a loss leader, but i would say with very low interest rates, what you earn on a checking account is obviously heavily diminished because you make your money on the balances, which is dramatically less. we've managed that pretty well. what we've reported this quarter is our deposit spreads are starting to move up again. we're very, very strong deposit-based company. so that's obviously positive for us. but no question, you know, the big opportunity for us is now to cross sell that customer base. we're highly focused on that goal. >> if you could look through the weather effect, i don't know if there will be a pent-up demand effect, but how strong, how sustainable is the recent pace that we've seen in the housing and auto sales with regard to the rebound we've seen here in the u.s.? can you kind of give us a fundamental sense where that's headed in 2014?

>> yeah, i guess people, you know -- some people worry that we're now at a pause in the u.s. recovery. i'm in the camp that it's weather, not pause. you know, when we go out and talk to our clients and our customers, i think there's renewed confidence. i think the fact that we've been able to have a reconciliation on the budget process, the amount of fiscal drag that's being put into the economy is dramatically less this year than it was last year. and that the housing market has recovered. it may, you know, bounce around a bit, sputter a bit, but i think fundamentally the u.s. is in recovery mode. so i'm in the camp this is quite sustainable here for the next couple of years. >> all right. we'll watch closely to see if that's the case. thank you so much for being here again. great to see you today. >> good seeing you. >> ed clark of td bank. well, what's clicking on the website? our hot list is coming up next. we want your thoughts on tesla. do you think the stock is justified at $320 at morgan

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allen wastler joins us from headquarters. what are the top stories today? >> my top one ties into your twitter question for the audience. it is tesla. this is phil lebeau's fascinating look at the fight between texas and tesla. texas doesn't allow direct sales of cars there. they have to go through a dealership. with elon musk coming out and saying, i might build this $5 billion factory there with 65,000 jobs, you might want to rethink that law. and phil did a marvelous job writing it up. yesterday, we talked about good headline words. black swan, is one of those terms. >> my guess is to what piece you're referring to. >> mr. jeff cox gave us a flock of black swans. he says they're circling wall street. an indicator that a lot of guys look at to see whether or not something is too good and people buying cheap protection.

it's up right now. everybody is going, jeff, you cracked the 20,000 mark on that already. and my final one for you. nbc is looking at areas where some people are saying, hey, if there's a minimum wage hike, maybe we won't tip as much anymore. and it pits the lower middle class against the working class. a fascinating read. a lot of people reading that. the best part of that is the comments. there's something to enrage everybody down there. there's 800 of them already. >> a lot of people rely on the tips. you're supposed to be fully accounting for them or not. but it can change the portion of income you're taking home, allen. a huge issue. >> it could. as some people point out in the comments, that's not reported tax money in a lot of cases. you're getting a freebie in some respects. a lot of issues. a lot of points of view. >> thank you, sir. have a good one. get the tweets in last-minute. we want to know if you think

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morgan stanley, setting its price target at $320 a share. and bank of america, merrill lynch, saying 65 bucks. which has it right? do you think tesla is just right at $320? >> john tweets, tesla will never see $165 again, let alone 65. $320 is more doable a year out. neither, the market will determine the price. a tesla car costs about $60,000, so, i'd be willing to pay them 1,000 shares for one car, equaling $60 per share. >> is elon musk the next henry ford? or the next john delorean? right now, i'm thinking he's the next henry ford. the quality of this car, the fact you can buy it used for more than you can buy it new, so people can flip this car for more than they paid for it. it's hard to see how this does not turn into the next huge success story.

>> let's talk about the stock price story. the options traders piling in at 270 and 300 in march. that's crazy. you're talking about a stock that's trading at 47-times earnings. i have no doubt this is a good company. and elon musk is doing a good job there. but the valuation on this stock is insane. >> how do you value the stock? as on automotive company, it should be valued? or a tech company, which the market is looking at. have you really valued the stock? i talked to one trader about this. he said, this is a perfect stock to trade up because it has a big short interest, very small float, and a sexy ceo. in this hot industry. there's a lot of reasons to go up. but further down the road, if if it's an auto stock or a tech stock, is going to be more vibrant. >> we have elon right here. >> the real elon will stand up right now. >> he shares my name.

to have the company stock places soaring. i want to know what the mass market appeal is. they're coming out with a model x soon. once i can get my toddler in there and throw some cheerio's around, i'll give you a better idea. >> thank you for being here. now, it's time for "fast money." melissa lee and the gang. >> "fast money" starts right now. at the nasdaq market site in new york's times square. the s&p 500 closing at a record high today, along with the russel 2000. but it is apple that caught our eye in today's trading session. that went up 2% ahead of tomorrow's shareholder meeting. institutional investors are getting out of the stock. and relative to apple's weight on the s&p 500, the weighting and institutional money manages portfolios are lower than that. is that optimistic? maybe the portfolio investors have to buy apple?