hi, everyone. welcome to "on the money." i'm sue herera. stocks hit new highs. is the market rigged and can the retail investor get a fair shake? the focus on high-frequency trading. what it is and why it matters. and the new gig economy. one-third of america's workers are part-time, but there is new technology that helps keep them on the job. why freelancing may be the future. and the dreaded alternative minimum tax. how to avoid the amt and what do if you get hit by it." on the money" starts right now.

here's a look at what's making news as we head into a new week "on the money." that big chill the economy saw this winter may be thawing. employers picked up their pace of hiring in march and the economy created 192,000 new jobs. the unemployment rate held steady at 6.7% and the number of people hired in prior months was revised upwards. the numbers, though, were still slightly below economists expectations. that sent the markets up in early trading on friday with both the dow and the s&p 500 hitting new highs. but stocks were lower at the close on friday. a new sign of strength in the economy -- auto sales for march came in better than expected. gm, up 4%. ford, 3% higher. chrysler, 13%. and toyota up 5%. that is an annual pace of 16.4 million vehicles sold, much better than analysts' expectations. more trouble for banking giant citigroup.

federal authorities have opened an investigation into a $400 million fraud involving city's mexican unit banamex and bad loans that it issued. amazon is hoping it will set the world on fire. the company introduced its new set-top box called fire tv to compete with apple tv, roku and chrome cast. the device will stream video, games and music to a tv of set and help the internet giant find a place in your living room. fire telephone is expected to retail for $99. stocks hit new highs, job creation is on the rise as well. so is it all sunshine and smiles from now on? joining us now, youaustan gools and current prove sov sore at the university of chicago booth school of business. jeremy siegel, professor of finance at wharton. gentlemen, thanks very much for joining us. austan, i'll start with you if i

could and the jobs report specifically. the economy creating 192,000 jobs in the month of march. the unemployment rate unchanged at 6.7%. first off, were you surprised by the number, and secondly, what does it tell you? >> it was about almost exactly what i predicted which is to say it is an improvement over, let's say the previous three years and definitely an improvement over the last couple of months where we had the weather. but it is not that great. i think what it tells us is the economy's growing, but it is growing modestly and at that kind of rate of growth, the job market's only going to improve so-so and people are still going to be feeling like it's not a full recovery. >> well, jeremy, do you agree with that? i was a little surprised because we've had such a terrible winter, a lot of people thought that weather would affect that number. >> i'm actually more optimistic about that report than austan is. first of all, we had an hourly

work number that ties the high since the recovery. that was a big bounce positive. we had over 400,000 in household employment. i know that's a volatile number but it tends to then cancel out that near-zero number that we had on the previous month. so actually, i thought it was pretty good. now there's no pressure on the labor market. remember, all the discussion now is is there beginning to be pressure on the labor market that might cause a wage rise. we saw .4% in the previous report. now it is back down to zero. so we don't see pressure there which again puts off any imminent tightening that the fed might have to do. so on the whole, i think this is bullish for equities and basically a good number. >> austan, what does it tell you about the economy and perhaps the equity market as well, the stock market? >> well, look. i think jeremy is right, the

equity markets are pleased with that because it suggests it is not too hot that the fed will try to cool things down, but it definitely wasn't a bad report. what it tells me though for the broader economy, yeah, we saw an increase in hours, but in. some sense then it's not yet translating really into sustained wage growth and that the growth rate of gdp -- you saw the export numbers come in more disappointing than what was expected. the transformation of the economy from predominantly excess consumer spending, growing faster than income was growing, and excess residential construction which characterized the 2000's expansion. shift in import and export-led growth is still a work in progress, at best. >> right. jeremy, we still do have the problem of the long-term unemployed, those who have been out of work six months to a year, or maybe even longer. and those that are diskoernlged and simply are not looking for a

job anymore because it's been so very tough. are we seeing any improvement on that front? >> not very much. i mean one of the marked things that are different about this he recession is we had a great improvement in that short-term unemployment indicator, but long-term unemployment went way higher than we've ever had before, and in any recovery. there's this worry, will they ever find jobs with the aging of the workforce, a lot of those people thrown out were middle aged people. there is a question of whether they can really be put back to work. >> austan, you get the final word. does this number influence the fed in any way to change its stance on interest rates or do we see lower interest rates for still some time to come, until we get a much better number than we saw? >> i think for at least half a year to a year, it doesn't change anything. it's right around expectations. i think looking beyond that, the fed's own forecast is pretty

optimistic. so if we start getting a world where the fed is correct, then there will be pressures to tighten but this had is not as optimistic as what the fed is predicting or wants it to be. >> gentlemen, thank you so much. great conversation. appreciate it very much. coming up next, we are "on the money." are america's public markets really for the public? a renewed debate on fairness and frequency when it comes to what makes the stock market tick and what it means to your nest egg. a slack labor market is forcing some americans to live from gig to gig. we'll talk to two entrepreneurs who explain why that's actually a good thing for workers and for the economy. and as we go to the break, a look at how the stock market ended the week.

critics of high-frequency trading say these traders are scalping pennies from investors. but it is more complicated. say through your discount brokers you send in an order to buy 100 shares of ibm. that order is likely routed to a marketmaker who will internalize the order, that is try to match your buy order with an equal sell order from their own inventory. in the unlikely event they can't match the order, it will be sent out to a stock exchange, like this one, or possibly to a dark pool which is a private trading venue run mostly by private brokerage firms. there are over 30 exchange in over 40 dark pools though not all are open to smart investors. the high-frequency trader has

likely bought the stock a penny lower a very short while earlier and hopes to sell it a penny higher to you. but it is institutional traders that are especially unhappy about high-frequency trading. they buy and sell very large orders. they complain that the pennies add up and that the market moves around them when they try to place large orders making it more expensive to trade. does computer-supported high-frequency trading that slices seconds to microsecond allow the u.s. stock market to move at two speeds, one for insiders and one for everyone else? well, that's part of the renewed debate this week on fairness in the american equity markets. now there's word the justice department is investigating high-speed trading. the ceo and founder of trade works which does business in high-frequency trading is here. jiff killburg is the ceo of killburg financial. how would you describe in its basic form what high-frequency

trading is. >> when most people want to do a trade, the only institution that they see or are aware of that they are interacting with is their broker. so typical example is i'll trade in my personal td ameritrade account and that broker will take that order and, because it is a member of an exchange, it will route that order to the exchange. that's all people are used to seeing. but behind the scenes, the fact that the order went to an exchange doesn't cause a trade to happen like there has to be somebody to take the other side. so now there is an industry of people who compete on a level playing field bea sis using information that's widely available to everybody who sit there and provide these quotes that are ready for anybody to transact against. that's called liquidity. these are orders that are sitting in the exchanges waiting for you to transact either on the buy side or the sell side, whenever you want. >> jeff, weigh in on this if you will. this has been controversial this week because some people say that the speed with which some

of these orders are executed puts them ahead of other orders. >> i would say the stock market is not rigged but there are high-frequency trading components that do add value but there certainly are some high-frequency trading xoen innocents that do not add value. that opportunity specifically in the front running i think is a disparity that needs to be recognized. i looked to my friends john and jerry. in nascar, what do they do? they put restrictor plates on the engine. that limits the speed. we need some form of restrictor plate on the stock market speed to get everyone on a level playing field. >> respond to the notion that some high-frequency trading would be legal front running and for those who don't know what front running is, it is an order that gets placed before somebody else's order. front running is illegal. how do you view that label that's being put on high-frequency trading? >> yeah, front running is illegal.

people get confused because what happens is that there are different ways to access the data in the market. there's fast ways, there's slow ways but none of these ways are private or special to a certain class of people. you can pay for whatever data source you want and if it is important to your business to have fast data you can pay for it. it costs you the same as what any other person would pay for it. you can't jump ahead of an order. once you see a quote at an exchange coming across, that means the order is already there. >> what he said is actually just not true. i know he spoke eloquently and laid out the case but there is front running going on. >> can you give me one example? >> let me finish, please. there's 1,000 milliseconds in one second. they're actually trading in microseconds which is 1,000 microseconds in one millisecond. there's no need for that type of speed. it is kind of like going to a pillow fight with you but i'll bring a baseball bat. thaun fair edge that needs to be eliminated.

what i'd like to see the s.e.c. do is start the exchange, although there is two feeds going out, one is a direct feed, one is a consolidated feed. that disspart allows them to game the system. secondly we see when an order goes to an exchange like a bats, if it doesn't get the toward wants it goes to the other exchange out there. that's when these high-frequency trading machines see that order and they can run faster to that next exchange, take away that offer and sell it to that pension plan where ma and pa have invested. we need to have a two-focus situation here and really bring some regulation. i played a lot of football in my days, sue. there's always a referee on the field. there's no referee on the field right now. we need one. >> i think you would welcome it -- you welcome any inquiry and any look into your side of the business. are you all for transparency. correct? >> we are all for transparency. i agree with jeff the consolidated feeds that are in widespread use need to be accelerated to the maximum

possible extent. i don't support the fact that direct speeds offer a speed advantage but they are commercially available to everybody. >> i'm out of nanoseconds so thank you both very much for joining us. up next, we're "on the money." new technology changing the way we work and as a result producing a virtual workforce. can you quit the office and earn with just wi-fi and a dream? find out coming up next.

one in three american workers are freelancers. and by 2020, they are predicted to make up half of the labor force. what's driving workers to freelance, and is it beneficial for you to join? becky quick spoke to tech entrepreneurs fancy hands founder ted roden and fibrous ceo miha kaufman on the new gig economy. >> very quickly, tell people exactly what it is. fancy hands. start off with that sglp fancy hands is a personal assistant service. for a flat fee per month we will do anything that can be done from a desk for you. >> call my cable company, make sure you change something there. put an order in for a car or for an airplane ticket. >> exactly. yes. >> what's the flat fee? >> it starts at $25 per month. >> not bad. tell us a bit about fiber. >> it is basically ebay for services. it allows people to offer their

skills in the form of products to a global audience and the prices go between $5 and thousands of dollars. >> what's something people would do for $5 for me? >> well, usually it is very basic services. it could be personalized greeting card. it could be translation of a short paragraph or could be a small graphic design work. >> let me ask you both this. who is signing up to do this kind of work? are these people who have other jobs? are these people who can't find full-time jobs? >> i think it is a combination of both. i think it is both under employment, older people and young students who are wanting to pay for college. >> ted, normally what we'd see as the economy improves as we have come out of the recession, you'd see fewer and fewer people doing freelance work, part-time work. why do you think it is different this time around? >> i think maybe the nature of work has changed a little bit and what people consider to be

their day job is now changed so you can do things virtually from home. >> a lot of people are working from home. i guess that's a huge advantage, too. if somebody's at home and they have something they think they can do, what is a way for them to come up with a skill or -- how would they find you? how would they do this? >> just try. fiber covers over 100 different categories. we have over 3 million services. so go in there, get inspired, get some ideas of what you can do and just try it. i think it's -- we all agree that the job market is changing. >> yeah, it is. i'm trying to figure out all the reasons for why that happens. maybe people are living further away from cities. it's a lot harder if you've got an hour and a half commute each way. >> i actually think that looking back 50 years, people used to have one work, get a golden watch and retire. today young generation barely stick at one place for over a year. maybe two. i think that this is really -- because people are rethinking the concept of work.

they want to become their own boss, achieve financial independence on their own terms. >> ted, as we have the american -- affordable care act come in, obamacare, does that make it easier for people do this? does it make it more difficult? >> i think it is going to make it way easier. i think it is too early to say for sure but now you can think about leaving your job and not having to give up your insurance. that opens a lot of doors for what you can do in the future. >> i'll ask you both. is this something that could happen without the advances we've seen in technology? >> absolutely not. the technology has changed what we're allowed to do and hugely meaningful ways. all the phone calls can go through our system. all the communication can go through our system which could not happen years ago. >> i totally agree. i think traditional freelancing was more about local audience. what technology has done is really to broaden that and facilitate access to dploebl audience. >> thank you both very much for joining us.

up next, a look at news this week that will have an impact "on the money." and beware of all the deductions and credits that you're claiming. why you could get smacked with a big tax surprise. and, how to avoid it.

for more on our show and our guests, go to our website, otm.cnbc.com. you can follow us on twitter at

onthe didn onthemoney. earnings season kicks off with jpmorgan chase and wells fargo. on tuesday microsoft ends its support for windows xp which could mean a major security risk for up to 95% of atms that still run that operating system. wednesday, the federal reserve's open market committee will release minutes from its march meeting. and on thursday, the imf and the world bank will hold their annual meeting in washington to discuss the global economy. the irs is banking that the alternative minimum tax will get the wealthy to pay more. but it is not just the rich who are getting hammered by this tax rule. personal finance reporter sharon epperson is here now to explain what the amt is and how you might be able to avoid it. good to see you, sharon. >> good to be here, sue. >> start with what the amt is. >> it is a dual tax system that we have in this country. you have the regular tax, then you have the alternative minimum tax. this is a tax that actually does not allow for certain deductions

and certain tax-free items that are available on the regular tax. you have to pay the higher of the two when you do the two calculations. so that's an issue for a lot of people. they don't realize that they have do these two calculations and pay the higher amount. >> who mostly is affected by this? >> well a certain amount of your income is exempt from the amt. for couples, it is $80,800 and for singles it is $51,900. so that helps a bit. but, we are talking about people who make about $200,000 to half a million dollars that often fall into this amt trap. >> is there anything they can do to avoid it? you mention some of your earnings are exempt. what can you really do to try to avoid it? >> other than to move to a state that doesn't have a high tax system or get rid of your children or something because you have a personal exemption for that and that's not allowed for amt, there's not a lot that you can do. but itemized deductions don't have as much value with the alternative minimum tax so you may not want to he take all of them this year. if you can, defer to another

year when you may not be subject to amt. that's one thing you can do. but for a lot of people, just be prepared to pay the higher tax. right now at this late date there's not a lot you can do. next year if you don't exercise the options, maybe you look at the accelerated depreciation of your business an decide whether or not you're going to claim that. there are some things that you can put off to another tax year but right now with april 15th just around the corner -- >> it's looming. >> -- there may not be a lot to do. >> but good advice for next year. >> start planning now. that's the biggest thing you can learn getting hit with the amt. >> sharon epperson, thanks so much. thaels the show for today. i'm sue herera. thanks so much for joining us. each week keep it right here because we are "on the money." we'll see you next weekend. d. so, what'd you think of the house? did you see the school rating? oh, you're right. hey, babe, i got to go. bye, daddy. have a good day at school, okay? ♪ [ man ] but what about when my parents visit?

okay. just love this one. it's next to a park. [ man ] i love it. i love it, too. here's your new house. ♪ daddy! [ male announcer ] you're not just looking for a house. you're looking for a place for your life to happen.

a cnbc original production. [ music ] >> marijuana is the most profitable illegal narcotic. >> this is a huge business. uh, in california alone, it is the number one crop. >> and there's at least 13 gardens within a mile radius of our home. >> thirteen gardens right around your house? >> mmm-hmm. >> yes. >> wow! >> thousands of growers, millions of users, and a market in the billions. >> how much money was coming in to your marijuana smuggling operations every year? >> about 50 million. >> it's a multi-billion dollar business rife with guns, gangs, and plenty of money. i'm trish regan. join me for an unprecedented look inside america's marijuana industry