you could end up with whacky things like 164% marginal rate. i hope they fix it. >> i hope they fix it as well. the dow just turned positive as well. all three indices up for the first day in four. >> i hope you live forever on the jukebox. >> that's so complicated. they can read more on cnbc.com. >> thank you. "closing bell" is next. welcome to the "closing bell". i'm kelly evans here at the new york stock exchange where the major averages are fighting to stay in the green. >> nasdaq is doing well. dow is the one struggling. nasdaq led us lower but today it's the top gainer among the major indexes. the dow itself is up only two points. >> that's right. so we got reaction to this volatile market with one of the

wise men of investing, jack bogle. and the allegation that this stock market is rigged. >> look forward to that. have you checked facebook recently? the stock i'm talking about. it was trading at $72, less than a month ago. today it's around 58. pretty quick 20% decline there putting facebook stock in its own private bear market. what gives? we get to the bottom of facebook's big decline coming up. >> here's where we stand. the dow is just about flat at 16244. the nasdaq up two-thirds of 1%. we'll see if that rebound can hold after a tough couple of sessions. s&p 500 up about a quarter of a percent almost five points. we're slipping just below that 1850 level. >> let's talk about that in our "closing bell" exchange. meg green is back with us. so is rob stein. larry glazer from mayflower and

kenneth is here on the floor with us. what do you think? is this a typical turn around tuesday? >> i don't think so. doesn't feel it. no excitement. it feelings like a dead cat bounce. tried to rally them. they failed. been toig wiying with plus and . doesn't feel like yesterday at all. it feels like it's still exhausted as it prepares for the start of earnings. alcoa is not a dow stock any more. it was taken out of dow. the first key is jpmorgan. >> we have some strange bed fellos. utilities rallying with the small cap russell 2000 index. what do you see when you look across the dashboard? >> i actually think that this market has a lot more legs to go and a lot of people are looking for a big correction. they are getting nervous about

it. truthfully i don't think there's anything to be nervous about in a typical market. you will have different waves. people just had the biggest ride in the last five years on this market. it's reasonable to have a little bit of a correction. the problem is where do you go if people want to trim off of stocks? bonds are a tough place to be. so i think it's important that people look at alternatives and see what alternatives can do for their portfolios, just to keep them in balance, to keep them in the game, to be a little bit defensive and to have a shot at moving forward when necessary. >> larry glazer you're our resident contrarian. you think domestic growth is petering out. >> i don't think i'm alone. the bond market wouldn't be rallying the way it, gold wouldn't be rallying the way it is if people thought we would have a robust earning season.

most people would be shocked at the rotation of low pressure system that's happened. brazil and india ripping to the sky. commodities hanging in there. it's a sign that investors are very concerned about earning season. look we got rich evaluation. there are opportunities elsewhere. >> to some extent wouldn't we be seeing the performance, snap back in china and india, some of the commodities perking up here wouldn't that be more consistent with an improving growth picture than one that's getting worse. >> global evaluation is one thing. domestic earnings are another. domestic story has been milked. we ran the productivity -- small caps are twice the multiple of emerging market names. investors are seeking value when they move their value into the emerging market. they are looking at what they don't own in those portfolios, things they shouldn't have sold. that's what they are moving into. that's a ferocious process that's happening. >> rob, you disagree >> the economic fundamentals continue to improve. i get it.

not as much as we would all like. the trend is higher. you're having a technical pull back that might last longer than this but there isn't anything fundamentally unsound about what's happening. we added 192,000 jobs. gdp is in the mid-2%. interest rates are actually kind of in a range. so i don't think there's anything overly concerning. in fact, i would be adding beta on pullbacks. >> would an inverted yield curve bother you? gold rallying signal great domestic growth to you? >> those are two separate questions. gold is rallying after a giant pummelling last year and inverted yield curve would concern me if that happened for a sustainable period of time. >> all these comments are right. a pull back is just a pull back. i'm not expecting a 15 or 20 or 30% pull back that some analysts are out there telling. i don't see it at all. >> what about larry's point that

growth is petering out. the economy is actually -- >> i don't buy that. i think it's just slower than we like but i think we are making consistent, you know two steps forward, one step back. >> why wrong yields on the treasury curve have been as low as they have been. >> inflation -- >> meg, look at that 30. look at the extent to which it has come in this year. the last move a lot of people on a bullish outlook were expecting. >> you're looking at tiny moves. >> no i'm not. these are major moves. >> utilities are rallying. that's not a bullish indicator. >> guys, there's a head wind that's now not a head wind any more and that's government spending picking up and government adding the payrolls in the near future and that will add additional stimulus to the

economy. >> theoretically, logically if the fed is pulling back on the amount of bonds that they are buying right now yields should be going up on the long. but they are not nearly as high as people think they should be. >> if you want to be parachuted into this economy, look at the growth rate, you might not suggest rates would be here but not substantially higher. fundamentally this isn't -- >> that's my point. it's anemic growth. earnings forecast has been coming down all quarter. this is not at that robust earning season. the market is telling you that. it's giving you all the indications we're flat lining and you should seek value where it presents. >> which is what you're seeing. >> you are seeing that switch in value. that's why we're seeing the destruction. the sell off in nasdaq. >> what about the questions out there.

is the move into value happening because suddenly growth prospects more broadly look okay so people don't need to pile into the high flyers or are we seeing weakness because the broader move is breaking down. meg, what do you think? >> i think people have had a huge ride in growth and coming back for value for the dividends. they should never have left value. but i really think that this is just a little bit of a rotation from growth to value. utilities were horrible last year. let them have a little bit of a rally. look at your tech's and biotech's. will you give up on them because they got tanked last month? i don't think so. if you have a little bit, you're going to ride that wave you're not going to give up on the whole industry. >> thanks folks. >> this is a symptom of what's going on. >> i share your views, meg. you're spot on. >> thank you. i needed that. >> thanks very much, guys.

>> i believe in utilities. >> thank you, i love the love. >> i love pushing buttons. you know when you find the buttons to push you push them. we're down five points on the industrial average. at one point we were up 50 point, down 65 point on the industrial average. about mid-point right now. the nasdaq is the gainer today up 29 right now. >> we'll have much more ahead on the markets. michael lewis stirring the pot over high-speed trading with this inflammatory statement. >> stock market is rigged. the united states stock market most iconic market in global capitalism is rigged. >> so, vanguard founder jack bogle thinks high-speed trading benefits investors. >> what does it say about the economy and corporate earnings when sales of hair color products and razor blades decline? that's what's going on right

now. we're trying to figure it out. the pros will figure out what this means for your money. stay with us. stay with us. ♪

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. welcome back. stocks have been stabilizing today on the heels of the three day selloff we experienced. >> what has changed today? >> so kelly, bill, we'll start off with tesla moving higher on news it's starting a leasing program for it's small and medium size customers. tonight also gaining grounds after upgraded the stock from a buy to a hold. seaworld speck on news that a legislative committee failed to pass a bill that would ban trained orca or killer whale shows.

american airlines fell after claiming flight cancellations from bad weather. rovi lost a court of apeels just a minute. and gigamon, the company cut its sales outlook after a large international order that fell. a lot of names individually moving those markets. >> music to some investors ears. our next guest says investors should not be phase when the stock market hiccups lately and while he can be critical of the stock market he cringed when he heard michael lewis say the stock market is rigged. >> joining us, always glad to bring him back, jack bogle, founder of vanguard and also by the way a contender for the cnbc 25 that we'll be revealing. we'll talk about that. good to see you. welcome back. >> great to be with you, bill and kelly too.

>> michael lewis says the u.s. market is rigged. is it? >> well, not in the sense that i would use the word rigged. i don't mean to pull a technicality on you. there's a lot of things going on that is bad in high frequency trading. we all know that. we know there's a front running thing. we know there's poor disclosure. we know there's a risk of technical failure in the market itself going back to the flash crash in may of 2010. we know there's inadequate regulation and inadequate disclosure. all those things are true. what we have to add in a balanced account is they are basically creating these high frequency traders that cap stone >> i didn't lose my hearing. i don't know where he went.

>> we'll try to get him back. let's take a quick break. when we come back hopefully we'll have more with jack bogle. the s&p 500 up about four, the nasdaq up 28. >> also still to come, facing reality with facebook shares slumping by 20% in less than a month. we'll talk to the pros about why it's happening right now and what it means for the social networkers acquisition and outlook. >> alcoa will be out with results in less than an hour. and klaus kleinfeld will be herher here. and jim cramer. you don't want to miss it. we'll be right back. 'll be righ. 'll be righ. honestly? i wanted a smartphone that shoots great video. so i got the new nokia lumia icon. it's got 1080p video,

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all right. i think we got the string and cup reattached properly now. we're back with vanguard founder jack bogle. still with us? >> i'm with you always. >> you were analyzing the pluses and minuses of high frequency trading. you've long been the champion of the small investor out there. should they be concerned at all about high frequency trading? does it give them a bum deal? >> i don't believe that's the case. actually the way our order system works is smaller orders get taken care of much better than those great big ones. there is in high frequency trading certain amount of front running. we don't know how much that is. we don't know how many orders are cancelled. maybe that's half of all orders that go into the system.

we do know somebody gets a penny break, it's paid for by somebody else and one party gets the advantage and one party gets the disadvantage. usually the nature of a penny. i don't see how it's the end of the world. i do think in the long run it's good for fund investors in this sense. it's the cap stone of half a -- >> are you kidding me? >> third time is the charm, maybe? >> wow. that is crazy. all right. >> i don't think it's the htf guys because he was defending it. >> what are you a conspiracy theorist? >> we'll try to get jack back here. figure it out. are you there, jack? >> yeah. i don't know why it's so sensitive. >> whatever you're doing. like the old antennas keep the same opposition so we don't lose

the frequency. >> jack, thanks for your patience. on a related note but one that does affect a lot of investors. is the stock market leslie quid than it seems because of this phenomenon of so many orders being cancelled and is that something that investors should be made aware of and concerned about potentially? >> there should be far more transparency about everything that's going on in these high frequency, among these high frequency traders including the profits they make on this. it's not clear to any of us how much of that cost in the system is one buyer getting favored against seller or a seller being favored against a buyer but that all washes out. we all put our orders in and do the best we can to get them executed favorably. to the extent that system is absorbing the investment dollars we ought to know that and do something about it. it's basically a question about transparency, probably more regulation. the small investor is --

>> all right. we'll leave it. we want to get jack's thoughts because we wanted to ask him -- >> i got a million questions for him. >> he mentioned regulation. really whether going after some kind of financial transaction tax then is the best way to handle an issue like this that wouldn't hurt the individual investor. >> on we go. >> yes. the nasdaq going back to today's markets leading the rebound here right now. >> it's those momentum stocks moving this market this time to the upside after what experts say was a valuation based correction for a lot of these names. internet stocks are staging a come back. a lot of online travel names trading in positive territory. green arrows across the screen. i got off the phone with a couple of traders who said today's move don't mean the selloff in these momentum stocks is over. many of these stocks are trading at a premium of the market that's higher than the average

of the s&p 500. so that perhaps is something important note. lastly while we're seeing a come back in the momentum names just want to point out biotech is not joining the party. it's one of the worst performing stocks on the nasdaq 100. bill and kelly, back to you. >> facebook dropping 20% in less than a month. the stock was trading at $72 on march 10th. now trading at around 48. what's behind the drop and is it a sign of more trouble ahead? is there a buying opportunity here? >> two different views. tom, you're the bull here. you're not concerned about this decline. what do you make of it. >> no. in the large cap internet space facebook is favored among our investor clients and it's been caught in this broad pull back in technology. but as long as the company

continues to exploit the mobile advertising opportunity and you see an increasing mix of their ads coming from mobile the company will be fine, the stock will be fine. you have a buying opportunity here. >> isn't the fact it got caught in this selloff indicative it's not a port in the storm even if its fundamentals are better. >> if you look at facebook, they made a handful acquisitions lately. yes, they are expensive. yes they have been using their stock as currency. they are in a position to be stronger and going forward on a fundamental basis. you're seeing a broad pull back in the market and taking out the market meter right now. it create as buying opportunity. >> if i know you correctly, there may be some chart watching on facebook as well. is that why you don't like it? what's the story? >> first of all, nice be with you again. no, facebook is a great company and what i like about facebook is that the ceo is a very smart

person. he's doing everything right. however, there's a difference between the company's business and the company's stock and if you ask me would you buy the stock i would say no i would not buy stock. the reason is very, very simple. the stock is a high valuation stock. the pe is 95-1. next year if expected earnings come in pe will be about half that. that's still very rich. but my reason for not wanting to buy a stock like facebook or any of these other i.t. stocks we're at the end of a five year bull market. if you look at my charts that i posted on youtube you'll see how two, three weeks ago i said this market is tapping out and we're going to see a severe decline in the nasdaq and the small cap stocks. we've had that since that time. has anybody ever heard of the word bear market? do you think there's any stock facebook or any other stock that

can resist the downturn in a bear market? >> what about those high evaluations he's talking, tom? >> if you talk about a strong stock during a bear market look what apple indict and they indict on apple innovation. facebook is leading the way in monetizing mobile advertising. >> talking about apple, are you talking about what happened after the dot-com crash. what are you referring to. >> look at apple's performance 2008, 2009, 2011, after they rolled out the iphone, the stock did incredibly well during a significant pull back in the market. so, i think that it's not unprecedented for a stock to grow through a down market and if you look at facebook the opportunity for them is to exploit mobile advertising and they are doing a tremendous job. >> all the same just to point

this out as well. felipe la fontain talking about the moves in march was as deep of the dot-com collapse in what he saw in '07-'09. there's something beyond your run-of-the-mill selloff. >> i covered it in the late '90s. so i think even in a frothy bull market for internet names investors will be well off long term by investing in facebook. >> very quickly, people have been wringing their hands on google for years. they said the evaluations were too high there and we all know what's happened with that one. isn't it possible facebook follows the same pattern with those very smart people that you acknowledge run facebook? >> bill, my worth i opponent is talking about the long term. in the long term we're all dead.

in the short term like 2008, 2009 you could see a 50% to 70% decline in a stock like facebook. i would rather not go through the decline and have my cash available in order to buy the stock at the bottom. that's what i would do. i would back up the truck on facebook in a 50% decline. >> that's your call, that it will lose have it's value from here? >> my first down side target is 45 and after that some support in 36 to 38 area. i think both prices we'll be seeing in the next 12 months. we have to define the time frame. >> very good. good intelligent discussion on a stock like that. 30 minutes left in the trading session here. that board went down. we're up 20 points on industrial average. maybe they are waiting for alcoa. maybe they are waiting for larry kudlow. >> up next why we should be concerned about falling sales of

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the dow is up 13 points with 30 minutes left in the trading session. we're focusing on the nasdaq which has really come back today, a gain of 35 points, almost a full percent return although kenny, our floor trader with us said this is a dead cat bounce today. he expects more down side action after today's turn around tuesday correction here. >> two out of the four segments of the market expected to post earnings growth this upcoming quarter. as earnings season is upon us how those two sectors do will be crucial to the overall market. what kind of a season can we expect? >> sar gentleman eisenman has been reading the tea leaves. you're not very optimistic. >> did you know, for instance dollar sales of hair color products dipped almost 4% during the month of february. toothpaste weakened.

you get these gems from nielsen tracking data. they look at the past few months. if you look during the past few months it hasn't been encouraging for household products. if you look at the last now the middle of march here's some of what the food indications showed you. all declines from crackers to infant formula down to cereal. the question is what's driving this? well there's a big story here with the consumer shift. they are shifting from healthier options to cereal from soda to water. in general the macro economic environment has been tough for these companies, which is really in contrast to the optimism we've been seeing for the overall economy and for the consensus for the consumer going forward. a lot of consumer analysts have been writing about this challenged environment. the pressure on lower and middle income consumer. there's also foreign exchange. a lot of these names have been pouring in to emerging markets

for growth. now those sharp currency moves will hurt the bottom line of these companies. barclays pointed out avon, clorox and proctor and gamble are most at risk because of latin america expose sure. tough consumer environment. guidance will be key. it will be interesting to hear them talk about the economic environment, resorting to cost-cutting. >>sara, thanks very much. let's bring in our buddy larry kudlow a senior contributor at cnbc and max wolf. are we accelerating or decelerating or what will the earnings show us? >> let me start with the jobs report on friday. when you look under the hood of some of the key issues, hiring, quit rates, wage rates, it really was a very mediocre report and i take from that the

economy's outlook is not going to be a second half burst, i'm in the 2.5% camp more or less. therefore, i don't think there's much change in earnings, i don't see wage rates popping up. that's been a key factor in profits. i just think it's status quo. >> we're muddling along. >> consumer discretionary has gotten murdered because growth expectations have come down. we won't go to 3, 3.5, 4. sara may be right. usually they are defensive stock. >> max what's your read on the u.s. consumer. can we even call it one consumer or do we have to break it down? >> that's the great question. i have to agree with larry. the last jobs report, the march jobs report unfortunately was in keeping. we tend food cuss on the total nonfarm payroll whether we have more jobs or less jobs and tend to focus on the unemployment rate. we took our eyes off the ball in the 93% of the american labor

force that's working and in march, for instance we saw the average wage unadjusted for inflation actually fall a little bit. we have a two americas here. the average working american has seen five years with no wage increase. >> remember, if you look at the same report, just take friday's report and it's an important one, average work week, the work week increased. it's a nice increase, .7 increase on the month and number much hours worked across the economy. that's helpful. there were signs that they are seeing wage pressure. i agree -- >> i thought it was mediocre. the jobs portion went down. you are right about hours worked. you're 100% right. the trouble is we didn't get any wage increase. >> we have a nice pick up the month before. >> up to corporations to do the hiring and there are those who feel the capital expenditures which have been so anemic for years will start to pick up.

somebody cited on this program yesterday the commercial real estate market starting to pick up. leases are picking up. to them that was a sign we'll see a pickup in capital expenditures down the road and larry is giving me the stink eye on this one already. >> i would love to site. i'm an optimist. i want the country to grow at 4%, 5%. help our world leadership position. opposite watching cap x. it's a key ingredient for jops and consumer income and strength. i don't see much. >> what's keeping them back. >> factory orders report i didn't see it. orders are down. shipments are down. what's keeping it? i'll tell you what's keeping it. they are worried about all these uncertain elements out there. they are worried about their tax burdens. they are not getting their tax reform. they are shifting offshore. interest rates are low enough. they don't want to make long term commitments. long term commitments build

factories and buildings and warehouse. if we can get that, i would change my whole attitude and move to 3.5% to 4%. >> which is where bank of america is. they expect 3.5% for the first quarter. they may have modified that since the jobs report on friday. monday we get the retail sales report. everybody is watching this one because they aspect to see this pick up in consumer spend after a weak start. maybe it was weather or utility bills or spending on the affordable care act. will we get a snap back come monday? >> we'll get a little bit more strength but the truth here is wages is a big story. there's a return to the perception of global risk, political risk. you saw that come to the fore with the russian moves. we saw global rotation of risk buying in to the u.s. that fled the emerging markets base at the end of 2013.

that's starting to settle out into more defensive names from more growth oriented names. if you look at the imf this morning people are taking down their global economic growth forecast both for the globe if not so much for the u.s. and i expect the housing market to be a bit soft by the end of the year as well. >> i agree. don't look at the imf. don't ever look at the imf policy. >> imf just lowered it's 2014 inflation to 0.1% -- 0.1. you know that can't go any lower. >> we got to go to break. we'll ask you to stick around. max great to see you. always great to have you with us on various topics. >> thank you, max. 20 minutes to go. the dow is up 23 points. holding steady right there. the nasdaq again which actually is moving higher here. it's up 37 almost 38 points and that's near the high for the

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. welcome back. we're waiting for earnings tonight from alcoa. they lead the earnings parade and joining us to talk about that and the impact it could have on the markets, bob pisani standing by and larry kudlow. it's not the bellwether it used to be but it's a multinational conflow mr. rate that has its pulse on the world economy. >> i was hopeful -- the problem is every year it's dependent on the price of aluminum and the price of aluminum like the price of copper is not going anywhere and that's the big problem. what we're looking for is the global economy to expand a little and show up if there was price expectations in aluminum or copper. that's not happening. that's kind of why it's not so much a bellwether any more it's tied to that one product. >> alcoa has performed very well. granted it got hammered for years. >> they are closing smelters not

working very well, cost-cutting. >> i'm mildly interested in his guidance. like you. look, it ain't the company it once was or never will be. i'm still interested in what he says. not so much about the u.s.a. but the rest of the world. >> yes, exactly. >> i want to come back to our conversation about the imf which gives countries bad advice and to raise taxes. but, i want to ask everybody, you're worried about consumers, worried about consumer staples, whatever. japan has just done one of the stupidest things in the last 100 years by raising their value added consumption tax. it is not possible. it's not possible that a government can do such a stupid thing if it thinks it's on the road to recovery. not possible. blows my mine. >> just so people know, japan raised its sales tax from 5% to 8%. >> it blew up a recovery.

it blew up a recovery when they did that in '97 or '98. it blew it up. >> what they are doing it is everybody says to japan you have a 200% government debt to gdp ratio. maybe they didn't have to do this and they would be in better shape. >> they would be in better shape if they lowered marginal tax rates. better shape if they lowered individual and corporate tax rates. remember, japan's deficit problems have been a problem for a long time. very high saving rate. very high saving rate in japan. can i give you some free advice. get rid of the sales tax. get rid of that. okay. cut your corporate tax rate some more. cut your consumer -- >> even if it increases -- >> and increase your monetary base substantially more. you need easier money and lower tax rates. come on. japan used to be such a great

place. >> the absurdity is the reason they are raising the taxes the government is spending so much money. >> we got to go. >> they paved over the pacific ocean with infrastructure. it didn't work. >> don't call them keynesians. >> the worst kind of keynesians. >> love having you, lawrence. come back very often. we'll head to the close here. we got about 14 minutes left. the dow super19. nasdaq once again, the stellar performer today up 36 points. up next could today's recovery be undone by something that's happening not in japan but in europe. the chief economist will weigh in. wait until you hear his take. >> a big fight breaking out in ukraine's parliament. many people fear civil war could be looming. do you think? could this disturbing scene be a foreshadowing of what's to come in that country.

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slightly below what was projected back in january. what are the hot spots that could cause trouble for economies like the u.s.. >> so much to talk about so, little time. with us is olivier blanchard and sarah eisen. >> it's interesting 3.6%, certainly an upgrade from what we've seen in the past but it's not strong. you point out a number of risks facing the global economy. why are we here going into six years almost since the financial crisis. why a sluggish global recovery? >> first, 3.6% is better than 3% last year. right? the other thing is why don't we have more? because financial crises leave a lot of choices and they leave high levels of debt. these need to be worked out. that's the reason we don't have a goal we could dream of. it's going dome but it will take time. >> what about the united states.

you captured the u.s. forecast. you said it's the driver of global growth right now. some of the softness we've been seeing the consensus is it's just the weather. we had unusually freezing winters and that held back economic activity. is that all it was? are your expecting to see a meaningful pick up here in the second half? >> i'm not terribly worried. weather comes and goes. numbers come and go. if you look at fundamentals in the u.s., the breaks i was talking about before, i think they are largely gone. there's a lot of noise in the back so it's hard to hear you. >> let me ask you on fed policy, in fact central bank policy and its impact on the economy as well there are those who would feel we would be in a deeper recession if there was no quantitative easing. there's those that feel the markets have not been allowed to correct and adapt to economic conditions and it prolonged this malaise we're going through

right now. where do you stand on that? >> i'm sure the correct thing was done. step one was to get the recovery going and the way do you this is by having low interest rates, conventional, unconventional. then when the economy is going you normalize things. you make sure that interest rates increase and they have to increase. but they were exactly right and the people who think are wrong are wrong. >> just a quick question on japan. we were just having a fiery debate on whether raising their sales tax was a mistake or not. what is your view on that? >> i think it was needed in the sense that they have to increase their consumption tax by quite a bit to have a reasonable tax system. in the short run this would slow down demand. they took some measures to decrease the impact. i think they did it about right. >> speak about monetary policy. in your world economy outlook

there was a strong call for action from the monetary authorities try to stimulate the economy and more importantly fight the super low inflation. what is the cost of the ecb dragging its feet and not going into unconventional policies right now? >> i'm not sure the ecb is dragging utes feet. we're not predicting deflation. we see it as a risk. they realese it's a risk. they are repairing a number of measures. i hope that as soon as these measures are relieved they will implement them. they are thinking about those. it's very hard to hear you because i don't know what you have behind a dinner party or something. >> we're on the trading floor of the new york stock exchange. >> that might explain it. >> mr. blanchard, thank you very much. appreciate you joining us. >> okay. >> olivier blanchard of the imf joining us. sarah, thank you. >> thank you for having me at the dinner party. >> we're heading towards dessert

here. seven minutes left in the trading session. the dow is holding steady up eight points as we wait for alcoa's earnings report. >> we have ceo klaus kleinfeld breaking down alcoa and jim kramer coming up in less than 20 minutes. don't miss it. n't miss it.id a t inspection on your chevy, you got new tires and our price match guarantee. who's this little guy? that's birney. oh, i bet that cone gives him supersonic hearing. watch what you say around him. i've been talking a lot about his procedure... (whispering) what? get our everyday price match guarantee plus a $100 rebate on 4 select tires from your tire experts. chevy certified service. 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.

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three and a half left. here's how we stand right now. good rally on top. took us into positive territory. this is the dow. we're trying to hold on to some sort of a gain. the star is the nasdaq. that's the most volatile recently. biggest down side move now the biggest upside move. almost 1% as we head into the close. now we go to earnings season. alcoa will be reporting. remember now alcoa is not in the dow it doesn't have an impact stroinl average. here's what it's done. maybe they were anticipating something but markets got it up half of a percent. ceo klaus kleinfeld will join us in a little bit after the earnings coming out. what your guys expecting? >> we expect a lot of volatility. going into earnings season we started off the quarter with about 5% growth. we're now almost to 0%. 2%. >> expectations collapsed.

why >> we normally have a reduction of 3% to 4% but a lot of it was the weather. >> how many companies would you think are going use that one word in their earnings report? >> a lot. we've already seen it in warnings. a lot of people have written off, we don't care so much what happens in q1. we'll be looking for guidance. another thing, they have ratcheted down expectations so much we want to see those beats. >> is this the on trick of the ceo reducing guidance so they don't have to jump over such a large speed bump. >> absolutely. when you look at revenue numbers which isn't included as much in guidance, revenue numbers in q1 have gone up to 4.1% but expecting earnings growth of zero. >> the last couple of years it's been opposite. >> this is the first time we've seen revenue expectations higher than earnings. we see corporations have lowered the bar on the earnings

expectations. we want to see those beats. >> where are your expecting the bright stops be? >> telecom. it's six companies. it's very easy. and then also financials and consumer discretionary. so those are definitely our bigger winners and the most highest priced. those are the ones tough to fine value. >> technology, biotech, subset there, very weak recently as we know although today is a different story. what about that group? what do you think? >> for health care they've got just long term issues in several areas. biotech, definitely see some nice earnings as we move forward. >> some of the high flyers, facebooks, everybody is starting to come back to earth here. >> yeah, finally. >> will earnings justify those valuations. >> i think they are still a little high on some of them. >> all right. thank you. we head towards the close.

dow up 16 but it's the nasdaq with the big gain today. stay tuned now let's see what alcoa can say not only about the first quarter but guidance for the second quarter the exclusive interview with klaus kleinfeld coming up on the second hour of "closing bell". see you tomorrow, kelly. thank you, bill. welcome to the "closing bell". i'm kelly evans here. stocks snapping a three day losing streak. it was an up and down day. the dow added 12 points roughly as all things are said and done. s&p up seven. nasdaq adding 38 a rebound but not making up much of the ground that was lost in the last several down trading session. let's bring in today's panel for some more thoughts. welcome to all of you. sharon, we'll talk about markets

and alcoa will report any second now and in the middle of all this we had some problems with the futures. there were a couple of contracts, hogs and a few other things. >> corn and wheat and a lot of agricultural commodities having trouble this afternoon when trading was halted at the cme group in chicago. it has resumed trading. we've seen these technical glitches in the past. in february 2012 we had oil trading halted and orders put back to the floor. open outcry in full force. at the time maybe not as prepared as they might have been if there was more volume. we are looking at this glitch right now because settlement has occurred. and they are saying now that trading will resume tomorrow just as it has always been. . >> open outcry. what a concept. in other words, to come back in for the rescue. am i oversimplifying it.

>> that's how trades are settled. they are doing it that way. when something like this happens that same mantra come occupant you need to have the floor traders there to do it old-fashioned way. >> it's amazing this is just jogging your memory. i visited the london exchange and prices are set in two session. most of the price discover happens in the last five minutes. they also have their screens. but when it comes down the open out cry it's an amazing thing to see. >> a dying art. the reason too why it's interesting now is because of the debate that's been happening in the last ten days already the stock market is rigged, what's the impact of mechanicsized trading. >> this debate we're having is a

constructive one. watson has not appeared on the floor of the exchange to execute trades at a faster speed and a better price than people. and i do think we tend to create drama and agitation probably in excess of what is actually merit. >> we, by the way it's not as though it comes out of nowhere. >> we humans. >> in the case of the agricultural commodities it's not like there was a huge amount of volume. it really was a rather slow day. when these things happen again it raises that same debate of yes you do need humans participating in the process. >> i don't know what we're so worried about. 20 years ago the spread were 12, 17, 15 sense now they are a penny. this is incredible. it's worked. we're now whining about an eight of a cent. >> but that can add up. they are ripping off the average person. >> i'm not a day trader like

you. i'm in for a long run. >> i'm talking about my 401(k). >> we're whining about nothing. let's focus on earnings. alcoa coming. put aside the debate and look whether we can make any money. >> before we do that let me make this final point. we're saying to jack bogle is liquidity in this market as sood or as strong as it appears. some traders say, in fact, they end up -- they get hit with a ten cent spread. when he in try to execute a trade the orders that appear to be in the system evaporates because there's a lot of bid stuffing, that type of thing going on. >> there's only an absence of that kind of liquidity because of the expect jays every single order you have will be filled instantaneously at exact lui the bid you want. that would have been true five years ago. >> one of the lessons of the michael lewis book is these orders have been broken up into tiny lots. you're not seeing the big size

because everybody is trying to cover their tracks. it fragments the market. >> alcoa shares does look like the company is out with earnings. 4.45 billion on the revenue side. shy, of course. a miss on the earnings number as well. after hours shares are moving, if anything they are slightly biassed to the upside. dominic what do you see? >> so on a comparable basis, kelly we have an earnings beat. the average analyst estimate was knick all share. the earnings come out, adjusted earnings of nine cents per share. sales coming at 5.45 billion. that beats the average analyst or just shy of the average analyst estimate of $5.55 billion. an earnings beat. we do have some other stats. cash on hand for the company was

$665 million at the end of the quarter. they say global end market growth for aluminum products remain solid. ceo klaus clean field said they tripled results in mid-stream and strengthened our upstream business for the tenth quarter in a row. we're powering growth in our value added business and aggressively reshaping our commodity business. so, again, some commentary from klaus kleinfeld which we'll be listening to later on in this program. nine cents earnings beats five cents estimates. narrowly misses the $5.55 billion sales estimate for alcoa. we'll bring you any more details as they become available. shares are up marginally about a third of a percent in after hours trading. >> i want to reiterate that. $5.45 on the revenue side. earnings number a beat, it looks

nine cents versus five. >> kelly, i just thought this was interesting in setting the tone for this first quarter earnings wave. people's expectations that have been slightly negative. sounds with alcoa we're getting a slightly positive indicator. a slight sales miss. it's a mixed bag in this quarter. i'm talking about expectations of what we do know. the market here overall is feeling decent today. it would seem. the traders i talked to said take a look at the vix. not going wild. >> so, kevin, you got your earnings. >> that's not going to move the markets. i don't love that market. in a company like alcoa you need sales growth. this is a judge or a measure or metric on global demand for commodities. you don't like it when the top line is flat, soft. doesn't matter how many people they fired to make their

earnings. that's not what you're looking for. you want top line. this is a nothing -- >> that's why it's interesting to see what he has to say about how they are retooling that commodity business because that's something, of course, as you say have been driving earnings. that's not happening right now. what's the next step. although we've looked at alcoa as the bellwether looking at it from the commodities angle and manufacturing angle, we're a service economy. what other businesses are they going into. >> not to poo-poo, alcoa is a multibillion dollar company it hasn't been a bellwether in the past four years. alcoa is doing okay now but i would not read much more into this. >> let me give you a couple of numbers. alcoa increasing 2014 aerospace growth expectations to 9% from 8% on strong demand for large

commercial aircraft and regional jets. it kripts growth in the jet business market. company projecting 2014 growth in automotive in the range of 1% to 4%. packaging, building and construction and a steady commercial transportation market sees a decline in the industrial gas turbine market. so there are southeast numbers goirn point. we're not seeing acceleration necessarily but those are nurjs end segments ultimately for the u.s. and globally. >> 7% gets me excited but the rest of the sectors are anemic. reflecting our own gdp growth here. if we're tying alcoa to domestic gdp growth they are not selling enough stuff overseas. get on it. get on a plane and sell some more stouf the chinese right now. >> guy adame what do you make --

>> i'm on your pay no mind list. i'm sitting here. >> i figure you were deep into the earnings report at this point. >> what do i see? alcoa hasn't bean bellwether since they did fantastic finishes in the '70s. you're way too young to remember. that said this is microcosm of the market. you have an eps beat, all somewhat financial engineering and revenue misses. as i've said before, the divide continues to grow between eps and revenue and to me that's a scary think. listen to sam zell's comments this morning. my instinct says you'll see continued strength. the month is "way too early" for us to see the soft. the chips that's one thing that stuck out to be. look at the stealth movement. qualcomm sold off. that stock continues to move

higher. we had one of our analysts last night talking about altera. >> zach. >> there is a difference between missing revenue expectations and not growing revenue. way too often we talk about that as if authors the same things. >> right on. that's fine. what's revenue growth been? my sense is revenue growth is 3.5%, 4%. eps growth closer to 9.5%. that's way too wide for me. you know i'm right on this one. financial engineering gets you so far and it's done great. you want to talk about rigged markets, yeah, the market is somewhat rigged by companies again, financial engineering, buying back stock, all those types of things and you have this over accommodating fed. to kevin's point you're not getting ripped off it's the cost of doing business in 2014. >> i would have rather seen this

company grow at 10% and miss earnings because they were caught outside. that would move the markets. that's not what happened. >> we'll leave it. catch guy adame with the "fast money" crew. alcoa's earnings as well. coming up next, klaus klein springfield here to break down the results and tell us what it says about the state of economy. we'll be joined by "mad money" jim cramer. and how are retail investors weathering this recent market storm. are they bailing on stocks or hanging tight. wisdom tree chief strategist is here. we're going bargain hunting for two stocks. that's coming up on close bell. you're watching cnbc, first in business worldwide. ♪ i know a thing about an ira

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welcome back. alcoa may want to thank anybody who kicked it out of the dow. since leaving alcoa's stock price is up 52%. the dow since then up is a mere 5%. alcoa stock trading higher after hours after just reporting first quarter results and alcoa chairman and ceo klaus

kleinfield joins me now along with jim cramer. great to see you both. klaus first to you. so much attention is on top line growth. what did you see during your quarter, what do you expect to see for the year? >> well, it's a really strong quarter performance. and let's first focus on the profits. in our downstream business we had another record profit quarter. in the mid-stream business we almost tripled the profitability compared to the last quarter. upstream business we actually had another continuation for ten consecutive quarters now of improvement. on the revenue side what you have to take into account is that we have been growing our revenues in the value at business as well as our profits and at the same time reduce our footprint to become less vulnerable from the commodity side. the commodities prices have come down by 8% compared to

year-on-year and we've pretty well performed and done exactly what we said. basically you see it in the profits. >> klaus, i appreciate your emphasis on the profits. that's why stock investors are excited. for the market more broadly people want to know is demand for aluminum and the products you make growing. is it reflective of a global market that frankly is growing. what do you see there? >> we have very, very exciting growth. in many of our end markets. i mean let's look at why did we see this enormously strong performance on the downstream business. we saw it because we had a very, very good performance and growth in aerospace and on top of it commercial transportation is coming back. in all of these markets for alcoa you see a general market growth and then on top of it what alcoa can add to it through the innovative products we're coming out with. automotive. automotive has been driving our mid-stream. automotive business in very few

years to 2018 will grow six times to about $1 billion business for us alone. then on top of it we're restructuring our downstream business and where there are some gems in there. if you look at the aluminum business we decoupled the pricing from the llme and guess what you see a gem evolving here that's performing well. >> a diamonds business. jim what do you think? >> klaus, i have to tell you. i think you need to explain to people better there's two alcoas. before you there were people discussing you didn't show the revenue growth. it's very difficult for people to one, klaus, that there's a company that really is hostage to the price of aluminum which fell 8% year-over-year and then there's the rest. if you split the two up, one is growing much faster than the other and growing faster than the worldwide economy. >> that's totally correct, jim. that's our strategy, by the way,

because we cure tailed quite a bit of capacity on the upstream side because it's not profitable. so you have to look at where do you want to have the growth. and the good news is we have a gigantically attractive portfolio of value of product in very hot markets coming from aerospace, automotive, commercial transportation, building, construction and packaging and we're in every one of the businesses we're innovating, and growing the profitability. what we see today in this quarter you saw 57% of the revenues come from the value at businesses and they make up 76% of our total profits. this is the way you go. went to independent more from the commodity side and you'll see more of that and actually we're shifting in a very good way. >> klaus, it's the auto segment here in particular that's fascinating to watch as cars get lighter. it's one of the reasons that

morgan stanley said you guys could be well positioned to take advantage of that. how important would that market be for you over time? >> this is a historic shift. this is a totally historic shift. i just give you a reference. we were involved with the big commercial allium car, the audi. and the audi a 8 has sold 700,000 space frames as they call it, aluminum space frames the start of the a8 which was '94. 20 years. the volume for f-150 was exactly the same, 700,000. you're getting a feel for what is happening here. we're right at the top of it. we're leading this and we have innovation going into it. as i told you in a few years we'll turn this into a more than a billion business alone. this one segment, auto sheet alone and we have multiple others that's exciting businesses. in terms of growth, honestly i'm not concerned.

plus we're doubling it up with all the innovation we're putting in place. you see the profitability is coming up and people only pay for what they value. >> klaus last time we spoke i looked what was a short term inventory correction in aerospace. you actually raised your growth expectation for aerospace. whatever correction is over and looks like aerospace, boeing, airbus is accelerating. >> yes. it is accelerating. we actually took our forecast up by one percentage point to 8%, 9% for this year and on average it's 7.5% average growth rate. frankly what we've seen just in the last weeks. the last order from japan $26 billion from japan alone for airbus and boeing. the total backlog stands well above eight years of production. this is a fantastic market.

it used to be cyclical. we don't believe it will come in the next five to ten years given what's currently going on and basically what's happening on this planet which is the growth of the middle class and desire of people to travel. >> speak about china because i you know visited china recently. i want seems like china is in the end always making more aluminum than we need. what are the prospects and is it depressing the world price or usual financial she nanunanimsh. >> there's this industrial folklore around china and the idea is that china is producing aluminum and selling it to the world market but it's really not true. china doesn't have the fundamentals to be competitive in this business. they don't have peroxide, they

don't have clean power. that's why the aluminum that they produce, basically consume at home. this is an upside for us and other western producers to hopefully one day as china restructures their business time port. we're not counting anthony. this is an upside. i'm not concerned that klein will flood the market. i hope that this industrial folklore will go away soon. >> klaus thank you so much for being here. this conversation will continue, jim, i know with you on your program. on "mad money". that begins at 6:00 p.m. there's so much more to discuss. for the time being we'll leave it. we'll scene it over dominic. >> check out chic jompb. leonard green disclose ad stake in the specialty rethe airlines. it said it acquired a little more than 2 million shares.

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pcentury link provides reliable yit services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next. welcome back. the crisis in ukraine heating up again today on fears of possible civil war could thread a russian military invasion. and we're taking a look at how that's impacting energy prices here. >> reporter: good afternoon. crude prices closing up $2.12 today, a big prop for wti, gas prices also popping more than 1% today. as you said as tensions in russia and ukraine continue to unfold. now remember that the ukraine relies heavily on russia for imports of natural gas so does western europe. russia has the upper hand using energy as a powerful bargaining chip. if the u.s. started exporting

that gas to level the playing field, experts say that mr. putin could be disarmed but for now he's the most powerful lobbyist for export that the industry could hope for. here at dominion co-point facility in maryland export is the name of the game. most of the infrastructure is in place. they just need a $3.8 billion plant to liquify natural gas. but protesters are worrieded about fracking. how quickly will the obama administration act. as you can see russia and ukraine has an impact on energy prices in the u.s. as well. back to you. >> so true. thanks very much. how concerned should markets be. willis, great to see you again. look a lot of people in the market think this is going no

further. we've reached the end of this crisis. how much further do you think putin could push things here? >> he could invade if he wanted to. he has 40,000 russian troops right across the border and until a substantial number of those troops pull back it would be a mistake to dismiss the possibility of an invasion. in fact, our call is 40% you could see russian troops moving across the border. markets understand that putin doesn't have to invade ukraine to get the near term outcome that he wants because -- >> which is? what is the near term outlook he wants. more recognition by nato it won't be pushing deep into ukraine? >> in the near term what he wants to do is disrupt the election that ukraine is going to try to hold on may 25th to elect a president. putin also wants to make it more difficult to ukraine to sign the stand by agreement with the imf that would help their very dire financial situation. over the longer term discourage europe from signing a trade deal

associated with the association agreement that would begin the process of moving ukraine towards europe. i think that putin has accepted he's not going to win ukrainian hearts and minds any time to get ukrainians to join his idea of a reconstituted russian empire. he wants to keep that country off balance, unstable, to keep i want as a neutral buffer zone between russia and the european union. >> kelly, i think jackie is right on the money talking about natural gas as the place to look when we talk about this crisis. i know for different reasons places like saudi arabia are concerned about the turn to natural gas potentially and what that would do to crude demand liquified natural gas is a different story. what about the shale base revolution we're seeing now in terms of natural gas fueling our country. i mean i wonder, how unstable is the oil market generally as a

result of these russian and ukrainian political issues? what would your view be, willis. how much of a tipping point could this be for more expensive crude as we get into the summer driving season, summer flying season. >> in near term ukraine has a buffer because they had a mild winter and they were able to store some natural gas and ukraine can draw on that and get a little help from europe. they have a longer term problem next fall and winter ukrainians could siphon off some of the gas head towards europe. what will happen with iran will come to an head. that may be a larger story to keep an eye on. >> the commodity traders i talked to are not very concerned in terms of oil prices in particular about what is happening between russia and ukraine but the instability

understores t underscores the geopolitical risk that's in the oil markets overall and as you mentioned iran, of course, the major factor they are looking at, the weakness we saw in the dollar had a lot to do with the rise in oil prices. but in terms of liquified natural gas and that being an issue when you look at russia/ukraine folks are saying this opens the markets for the u.s. to take that lng to europe but asia is the buyer that wants to pay for it. it will be interesting to see whether the u.s. uses it to its advantage but a greater advantage to scene to it asia. >> willis, quick thoughts and that brawl in parliament today. >> that's political theater. what it underscores is how much pressure they are feeling in kiev. russians are trying to create uncertainty in energy markets. it's good for exporters like

russia. i wouldn't draw too franchise that particular fist fight but it does why are score kiev is feeling the heat. this is a new normal. the russians will try to keep ukraines off balance for as long as they can. >> the same for markets. thank you, willis. stocks snapping three day losing streak but is there still a risk of a deeper correction. how would retail investors react if that happens. later two wall street pickers revealing their list of names they say are too cheap to pass up right now. stick around you won't want to miss it. we'll be right back. back. uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need.

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. welcome back. markets today breaking their three day losing streak finally seeing some green arrows. how are retail investors playing this volatile market? well according to my next guest they are investing in so-called smart index funds. here with his unique insight, luciano siracusano, the strategist at wisdom tree. welcome back. so smart beta, people say this is closet indexing, it's just a way to charge a little bit more for these products that have become almost giveaways. defend this. why should investors be

interested in a smart beta type strategy. what does that. >> even >> it's third option. traditionally about 35% of all the trading on the new york stock exchange is in etfs. they have tracked indexes like the s&p 500, russell 2000, s&p 400 those have done very well against most active managed funds over time. people said is there a better way than just by the market cap of the companies and that's where smart beta indexing come in. >> was there something wrong with waiting by market cap? >> the vulnerability in the cap weighted market you overweight the sectors or countries at the top of the market and underweight the undervalued stocks at the bottom. what wisdom tree did, i said we'll conduct an experiment. we'll own all the profitable companies in america and weight them. then sit back and watch what's the difference between owning the market cap weighted versus owning the market earnings weighted. you have seven years of

real-time data. >> the conclusions are? >> stunning. mid-cap segment, beat the s&p 400 by 400 basis points. small cap base excess returns were 500 basis points annualized over five years. >> is this after fees? >> the index returns that i'm quoting are index returns. check our website. after fees and transaction costs very comparable. this happened, kelly, in an environment where growth beat value in america. the critique was these are just value indexes dressed up in the latest costumes. the reality is this happened even though growth beat value. so there was no value being made. >> to some extent and, again, this is a contentious issue in the fund community because vanguard, for example, is sitting it out. i believe unless that's changed recently saying they don't see any reason to adopt this kind of strategy, they like the products that they already have. your argument is that period of

outperformance and also are the strategies holding up in more difficult times for the market? in other words much of the last seven years -- i guess that would encompass the bottom and peak drop decline. >> it's a heated debate. i would say yes. if you look at the down markets that's a lot much times where the fundamentally way to generate excess returns. in many cases it goes down way less. that's where we've seen in emerging markets. generally the more inefficient the market the greater we've seen the ability of the fundamentally weighted index to out perform cap weighted. it doesn't happen every year or in every cap market. but you can conclude it's working more than it's not not just on an absolute basis but a risk adjusted basis. >> funds flowing into these products and if we back out and say what happened in this latest sell off some biotech index had

a ton of money pulled out. where your seeing people moving money around. >> march 15th we saw a separation between emerging market equity and u.s. small caps. u.s. small caps going down. in the last week money starting to flow back into equity. em equity and etfs were being bought. you haven't seen the inflows into em equity. >> just today the grants investment conference gmo was making the case for these emerging markets saying they are cheap right now. do you see retail investors getting back involved last question with the u.s. stock market and to what extent from a historical point of view? >> we saw in the industry 22 billion of inflows in the first radiator. light relative to where we were last year. i would say etfs is not about the retail investor. there's plenty of hedge funds and plenty of institutions that use etfs.

the case to use them becomes more compelling. the active managers are not getting it done relative to beta. >> i think we just added another quarter to that unfortunately for southeast fund. thank you very much for being here and explaining some of this. really important stuff. the market gyrations of the last week have created some opportunities. coming up some stocks to watch in biotech's and small caps. and a stock way off wall street but entrepreneurship at its best. the detroit bus company is forced to leave wide-open. that story back after this. nnou] when fixed income experts... ♪ ...work with equity experts... ♪ ...who work with regional experts... ♪ ...who work with portfolio management experts,

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welcome back. markets making a turn to the positive. market news was burning up our website. let's get to the hot list. so this is interesting, alan. usually people flock when it's a strong sell off but even today continued interest. >> kind of weird. i expected to it fall a little bit. we have higher traffic levels today than yesterday. which is kind of saying something. people are still trying to figure out what was going on. you know how we talked about the wise man effect yesterday. seems to be going on today too except it's a wise woman. louise gave some signs she's looking for if they happen on the s&p it makes her worried.

basically sector rotation and some technical levels she's looking at. we got it written up. number two, my old fav, obamacare is back. what was going on with that last minute surge that got people up to 7 million. seems to be it was more the carrot than the stick. people were more interested in getting insurance that was affordable than they were fearing the penalties. that might change next year and the years beyond. finally robert franks wonderful little story about how they changed the tax law for states in new york, trying to protect more of it. but it got rid of certain federal credits so there's a narrow band in there where you might end up on a portion of your estate paying as much as 164%. >> alan, thank you. i hope you're not one of them. >> no way. >> up next two market experts revealing bargain stocks that

they say you can't afford to miss out on. city of detroit hit upon hard times but one entrepreneur is driving through them. he started his bus company and his story is just ahead. ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.

welcome back. spring is in the air. stock shoppers are on the prowl after nutrient selloff we've seen especially in the nasdaq. what's stocks you should add let's bring in roberts luna and shane sedderman. welcome to you both. this is exactly what we want to know right now robert. do you have your shopping list ready? where do you see value here? >> absolutely. this is a market where you look at the s&p valuations are fair and small caps are looking pretty expensive. you have to do some bargain shopping, finding companies in dominant market position and have reasonable valuations. my favorite company in the space is a company that everybody knows but nobody owns, americo, parent company of u-haul. everybody knows u-haul. nation's largest truck rental company. second largest in self-storage. what's interesting about this company it's 70% owned by insiders and 28% institutional

investors. so right now it's in very strong hands and i'm talking to my clients. this type of volatile market one of the best tools you can have in your arsenal is conviction. a tools you can have is convict n conviction. they're passing by the trucks on the road every day. very strong company. a very good discount. >> real quick. do you own these names personally? >> absolutely. we own u haul and americo. >> shane, where do you see opportunity? >> if you look at the fortune 500 companies we have got healthy balance sheets. i like the private equity sectors and for tres fits that mold and they pay almost 4%. gross margins, 57%. >> it's interesting that you

like fortress and small cap growth mutual fund. >> well, i think mario has done an out standing job at looking at undervalued small caps that look like they're going to be the best for a take-over candidate. kel kelly, with that much cash out there, are kiddiyou dikidding m? i think you're going of the a healthy return in the second part of the year. if you have some cash on the side lines. you're going to make money. >> this move in the small cap is interesting. these are still expensive and trading like 83%. so you know, is it too soon. i'm curious to both of you. is it too son to go bargain picking to some extent? go ahead, robert. >> when i was asked today to come and talk about small cap

stocks it was difficult for me to come up with a couple names that still had fair valuation. i think the sector is overval d overvalued. most people should take a look at their portfolio right now. i think they're going to be pretty surprised in valuations. if you're one of those investors i think that ship has ran its course. really do some individual stock picking and look for quality names at a discount to the market. >> last word, shane. >> i do believe the market continues to correct and if you have got money on the side lines have a plan over the next three to six months when the markets pull back to ones that you think are undervalue. >> and much appreciated. thank you. >> thank you. >> robert and shane this hour. up next, we're going off to wall street. meet an entrepreneur that got the city of detroit up and launching again with his own private bus company.

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it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review. welcome back. take a look at intuitive shares plunging. >> they were down about 13% in trading. their after market low is down

8%. intuitive surgical is saying first quarter sales will be $465 million versus $538 million. that's due in part to the company expecting a 59% decrease in sales of it's robot systems to $160 million worth of systems. the maker of divinchi surgical robots. back over to you. >> thank you, dom. my next guest, a driving dilemma in detroit creating a company that brings buses that don't have transportation available. here to explain is the president and founder of the detroit bus company along with the rest of the panel. andy, welcome. and congratulations by the way on the startup. is this a bus company or is this a ride sharing kind of things? explain it for us. >> yes. so we're a bus company.

we own and operator our own buses. we want to control the experience from the top to the bottom. transit has been a lacking thing in the region for a long time. we want to bring some class back to it. >> andy, how do you charge for your services? is it like a traditional bus? do you sell tickets. people pay? >> most people ride it completely free. our big front is the youth transit alliance. so everyone gets to ride that for free. that is a youth transit program. because the kids are really the focus. the only way to rebuild the neighborhoods is give these kids an opportunity. so we're building from there first. >> you know, andy, have you found that there's a lot of this innovation going on in detroit whether it's the ceo of quickened loans buying up real estate state and is this more than just a downtown detroit phenomenon? >> there's a lot of focus and energy and money downtown. that trickles out in the

neighborhoods. our work is entirely in the neighbor neighborhoods. we're in a city inside of detroit. we work in southwest detroit primarily. that's where people are. we want to connect those people to the opportunities down town and growing. so i do see a lot innovation. i think there's a lot of push to use all these utilized assets. >> here's the interesting thing. i'm watching kevin and see the wheels turning. andy comes to you and got this idea for the detroit bus company. is this a proper -- andy, are you trying to be proper by the way? >> i don't understand that you have a mon only. people have to get from a to b. what happens if a 50-year-old offers you $20? are you going to throw them out? >> no.

no. we have a lot of different services. but the youth line is what we're working on. we wouldn't be able to do that if we didn't have foundational grounding. >> are you working to become profitable? >> our depot is 90,000 square feet. we rent out other spaces in the building to facility other entrepreneurs to launch their over ventures. we also do tours and charters as well. we own detroit tours.com which is a way we can get people into the city and show them what we're working on and that the city is coming back. a lot of folks that live just down the peripheral of it don't know that detroit is on the way up. >> i hear that people need to consider perhaps privatizing street lights. there's so many issues in detroit. which ventures that you have in your depot seem to be most promising? >> a word if you could, andy.

>> i would say the tiniest businesses are going to bring the city back. it's going to be 10,000 little business that is bring the city back. >> andy, thank you and my thanks to the panel. and i think kevin is going to start a bus company as well in detroit. and fast money begins with melissa lee. and i think talking some google -- oh has a google. >> yeah. i'm going to see if more people will wear it at work like me. i'm surfing the web. >> are you reading the teleprompter from it? >> it pretty cool. you got to try it here. >> lots of opportunity. over to you guys. >> fast money starts right now. i'm melissa lee. tim seymour, anthony and tara and guy. can you trust today's bounce after falling nearly 5% over the past three trading