vice chairman of lion's gate, michael burns. down 12% plus. >> thanks for watching f-fun. >> "closing bell" is up next. >> and welcome to "closing bell" for a friday. tgif, everybody. i'm bill griffith here at the new york stock exchange. >> and i'm sarah sizen. now heading into the final hour of trading for the month of may with both the dow and s&p hovering near their all-time highs. next week not only brings a new month but an avalanche of huge data that could move stocks sharply. >> an avalanche, i tell. >> you not to be dramatic, but seriously. central bank meetings and shareholder meetings and economic reports. we'll at all you up the month and get you ready for june which could start out to be extremely

busy. >> bank of japan is scheduled to change everything. >> i'll get you that in a bit. >> private joke. also on today's program we've not learned our lesson yet you say. are americans really using their homes as atm machines once again? with housing prices on the rise, are so many home equity line numbers starting to move higher again? i mean, we have some startling figures on how many people are starting to open those equity lines of credit again and what they are doing with it. >> brings us back to the danger days of the crisis, and when you have $20 billion in the bank do you really care about dropping $2 billion to buy a new toy? >> cash. >> what's behind former microsoft steve ballmer's stunning $2 billion deal for the l.a. clippers. everyone is talking about it. why billionaires with money to burn are changing everything when it comes to valuing sports franchises. >> you have a different take on it. >> i do. i think these franchises are going up in value.

i'll fight it out with robert frank, but, first, the markets on this final trading day of may. pretty flattishch the dow jones industrial average, not moving a whole lot. still close to all-time high. down 15 points, and the nasdaq, the outperformer for the month of may, up almost 3% and under a little selling pressure and the s&p is positive and flipping around all day long, bill. >> remember, any positive close for the s&p will be another new all-time high. >> fifth in the last six trading sessions if memory serves. >> let's talk about in the "closing bell" exchange for this friday. dine jaffe from galileo dividend. focus fund is with us today. people all over the place on the floor. hank smith, as we talk ad nauseum about the low yields on the ten-year these days, who is buying the ten-year right now.

you say that's the ultimate fear trade that they don't have enough, what, faith in the growth in the u.s. economy right now. is that the idea? >> well, that's right, bill. almost by definition. if you're buying a bond today, you're not exhibiting confidence. you're not exhibiting exuberance. not exhibiting greed. you're exhibiting anxiety, fear, skepticism and those aren't hallmarks of a bull market top so from a sentiment standpoint i think the market is set up very, very well. there's still a ton of anxiety, a ton of skepticism, a ton of fear, and that is good for bull markets. >> bruce, i want to ask you about that. i mean, are you getting mixed signals from the bond market and from the stock market? i'm looking at the dow transports, for instance. >> right. >> certainly outperforming. that's signalling a very positive view of u.s. positive growth. how do you explain what's

happening with the dow and the ten-year yields? >> that's a very interesting sector because of the need for the movement of goods and materials and as commodity prices have come down over the past 18 months, you know, the volumes have kicked up, so that's been really positive for that sector. i think that overall i agree with the previous speaker's assessment of uncertainty. i think there's a lot of kind of risk out there which people are simply unaware of and are taking unintended risks in their portfolios, and we believe that we really need to understand other types of risks that are inherit in these businesses such as environmental impact risk, labor costs and stakeholder options, and that's very prevalent in the transport sector where you really need to have boots on the ground where your relationships are really strong in order to get contractor transports. >> i'm looking at the list of ten sectors in the s&p 500. nine of them are positive for

the month of -- month of may. utility is the only one that was downch the best performer was telecon. diane, you like health care and industrials. health care this month, up 2.5% and industrials up 1.5%. there's still juice in those lemons, you say? >> absolutely. i think that industrials have showed real organic growth, even a very dismal first quarter. 2% plus, and i think there's more to come, and in terms of health care. even though there's a lot of give and take and what's going to be successful in the long run, there's no denying more and more people are signed on for the affordable care act and obamacare. >> now do you say in the notes here that the u.s. is looking increasingly expensive? are you talking about the stock market or the bond market? >> i think the bond market. >> matt, go ahead. >> the stock market. most americans have way too much in u.s. stocks. we recommend that they have at least 50% of their equity portfolio in foreign stocks, but specifically the cheapest marks like russia, brazil, almost all

of europe. our new global value etf goes further and buys the cheapest stocks within those countries by valuation but also returning cash to shareholders through dividends. >> so you're not afraid of risk right now, is that the idea? >> we are. we're always afraid of risk but we think the risk is overpaying and a lot of these countries are what we consider to be generational secular lows in valuations, many of them trading at single digit pe ratios. >> rick santelli, the show stopper of the month had to be the bond market. treasuries on track for their best month since back in january. this caught a lot of people by surprise. >> yeah. i don't really know why they are surprised. i think, you know, the treasury market is the hedge that keeps on giving. just imagine if in january you would have bought stocks and thought to yourself, what if stocks go down as they did in the beginning of the year? what can i buy that would offset those losses? how about treasuries? well, if you would have bought both, out actually be up now.

the weak link, the equity markets, are finally catching up to the strong 2014 trade in treasuries, but i think that's a dynamic that investors should stick with. it seems very odd to me that most who talk think that they are mutually exclusive. you can only be long one or the oh, and i'll tell you what, pay very close attention thursday to the ecb meeting. i think it will trump friday and wednesday's employment data because when a central bank is giving so much attention to the fact that we need new stimulus, after a crisis, after 2013 was all about european stabilization, i think there's a bit of worry beads that need to come out at this point. >> i was going to ask you about that. what do you think -- how do you think the markets will respond? everybody is talking about the fact that they expect mario draghi to cut rates on thursday. is that already in our bond market? if not, what do you think they will do once the announcement comes out? >> i personally don't think a lot is built into the market? it's very hard to decide what a

bunch of technocrats and bureaucrats and central bakers are going to do. there's no way to predict, but i will tell you this. i think if they do something. boy oh, boy, i would watch out. i would think the message that that would sent at this point would be an equity negative and a fixed income positive. that's my own opinion. >> it will be the ecb and the jobs report looking for a soiled 200,000 around level when it comes to jobs, what is your read on the economy right now. we've had a bunch of mixed data. i mean, just saying today we did see a decline in personal spending coming off of a negative 1% quarter in gdp? >> i think we're going to get a bounce in the second quarter off of an obviously poor first quarter that was mostly weather related, but for the year it is stubbornly slow as usual. this economy is stuck in a below average world of call it 2,

2.25%, and there's good news there. that's not enough growth to create any traditional excesses in the labor market or inventories, but the sad news is it's not enough growth to do a big dent in the labor markets and the participation rate, so -- but i think we can have several years of this 2%, 2.25% growth, and that in the equity markets can perform in this environment. >> i'm curious, you're looking at the outlying european countries for value right now, but if the ecb cuts rates next week, what does that do to value? >> great question. i wish i knew, but part of the margin of safety of buying countries that are this cheap, some of these companies are trading at 2, 3, 5, 8, 10, pe ratios, you have that built in margin of safety. most of the bad news is priced in already. we think there's a lot of upside in these foreign countries. >> all right. we will see. >> everybody, thank you. appreciate your thoughts. have a good weekend. >> thank you.

>> see you later. >> same to you. >> we head towards the month of june right now. we've got 41 minutes. >> you do the math. >> 14 minutes left in the trading session for the month of may right now. a mixed picture today. the dow is down ten points but the s&p is still fractionally higher right now. >> we'll be watching the major indices to see how it all shakes out. main street investors make of what we've seen during the month, how are they setting up and where are they putting their money in the month of june in our end of month investor retail round table coming up. >> always enjoy talking to them. >> apple surging ever since it unveiled earnings. a stock buy back increase and its 7 for 1 stock split, by the way, that was announced next month and announced next month. we're asking the pros if that move stems more from financial engineering versus cool new products. we have a debate on apple coming up. >> and a cool new acquisition. >> and also up next, remember the days when tapping home equity loans was as easy as

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so instead of putting their money to work, homeowners are actually putting their houses to work. >> again. >> yeah, again. use of home equity lines of credit jumping 8% in the first quarter. it is hitting the highest level since, you said it, 2009. >> let's talk about it. of course, it's happening when the housing market came crashing do down. should we be worried about this, snebz -- cnbc contributors dolly lenz and herb greenberg. have we learned nothing? is this the way it's supposed to be, as value goes up people should tap that value had. >> it all depends on what we do with the money. home is biggie bank. the piggy bank effect is fine if we do the proper things with money, do things to improve the value of the home, so in fact

it's just a double plus for our house and if we take the money and going on vacation an taking the money and buying a new car, if we're taking the money and buying something that depreciates it's very problematic. >> i wonder, herb, from your perspective how healthy all of this is and what level you can borrow and how you use it? >> i think the banks have clamped down what level you can borrow at. i don't think you can go 100% or over 100% anymore. >> which is what we were seeing. >> right. >> and what dolly said. putting roof on the house, a good use of money, and i was on air debating someone about it and you worry when you see it go up like that that people are taking money and buying stocks and that, of course, the worst thing you can do with a home equity loan for the average guy,

i suspect, or almost anybody, but i think it's a sign, look, it's a sign people in many markets prices have gone high, and do they have that equity margin in their homes? that's what we want to find out exactly. >> coming in just today. i heard a commercial on the radio, i thought what year is this? it was for a seminar on how to flip houses. >> right. >> at 3:00 a.m. there's a show going on. >> we're back to 2007 all over again. >> guess they are going to buy them from blackstone and flip them. i'm not sure who the sellers are at this point. >> and they said flip it with somebody else's money. and it was all the buzzwords used years ago. with re-we repoeting history ag? >> it's possible and we have to be careful. the banks are obviously bullish on real estate that they are making the loans. if they didn't think the trajectory of the markets was up they wouldn't get burned again

the way they did last time so that's really good news and the other good news is i think the borrowers are also bullish and that credit is loosening so all these things are positive, and i really want to look at the positive but be cautious. you know, everybody really has to act responsibly. they have to act responsibly when they drink, act responsibly. >> borrowing against the home. >> and i wonder, dolly, whether prices are going up fast enough. >> they are in new york city, right? >> they are in new york city. >> for the rest of the country. >> and they are only permitting 80% financing so it's not the 100, 110, 120, 130 that it was before and even though 80% say lot, it still keeps some cap on the story and gives you some cushion. >> i want to say one other thing. >> southern california, that's another belle weather in real estate. how are you guys doing out there right now? >> southern california, there's -- there's less inventory than anyone would want to see so that's kept prices elevated, and it's also led to a

slower start throughout this year to the housing market, but there are plenty of people, including guys like mark hanson who is out there, and he's one of the housing gadflies of sorts who believes you're going to still see a fall here. look, you can't get complacent, and you can't use this as saying we're back to where we were and it's only going to get better. every market is different, but one thing dolly said, at least the banks are making money. the other question is are they starting to securitize them? are they holding the loans? you know, you see -- you see dick garvosivic from wells fargo saying the lenders need the rules lesbianed a little bit of the start hearing that stuff. you start to get a little bit. >> dodd/frank does mandate that they need more skin in the game, the housing lenders, than they used to. >> right. >> they couldn't completely bundle them up and sell them off. they have to keep some of them on their balance sheets right now. >> i think we're so much better off than we were last time but i

hope we did learn some of the lessons. >> in other words, we're human. >> the other question is are they really -- are they accessible? don't you need much better credit to qualify? >> yes. much better credit, the market, really look at the appraisals very carefully so i think we're in a much better position than we were ever before, but i also think that the american consumer can never be undervalued, okay? the american consumer is going to find a way to spend that money, okay? and we're going to find whether it's a michael kors bag or a brand new mercedes, somehow that will be spent. >> borrow responsibly is the message from dolly lenz. thanks for joining us. we'll have to see what's happening. herb greenberg. here we are, bill. 40 minutes. >> close enough. >> and if you look at the major indices the dow is pretty much flat, down 11 points. s&p, still in positive? >> a little bit.

>> just barely in positive territory so the calm end to an up month. >> it has been an up month. all the major averages have been higher this month. up next, apple kicks off its closely watched developers conference next week. we'll be watching that carefully. is the tech giant's rally over the past month being driven more by the coming 7 for 1 stock split or the anticipation of hot new products to be introduced next week? a couple of apple pros will talk with us about that coming up next. >> and later, is the los angeles clippers really worth $2 billion? does it even matter with billionaires with money to burn are bidding for the same team? that debate and much more later on on "closing bell." if you have moderate to severe rheumatoid arthritis, like me, and you're talking to your rheumatologist about a biologic...

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>> keeping on eye on these markets. watching the s&p 500 watch these levels very carefully because we're at a new record high. the close record is 1920.03 and we're going on something like 13 or 14 for the year of 2014. >> five out of six days. >> and a 2% gain so far, it looks like, for the month of may for the s&p 500. >> courtney reagan, what's moving the markets today as we head into the weekend? >> got a lot of movers today, bill. we begin with allergen on news that valiant has increased their offer for 0.3 shares of allergen

stock, allergen trading up 7%. men's warehouse and joseph a. bank gaining ground after the s.e.c. gave approval for the merger saying consumers wouldn't be harmed by the combination. madison square garden moving higher in part due to the new york ranger hockey team reaching the stanley cup finals for the first time in 20 years, and we end with apple, reversing course midday after opening higher. this news could have been profit-taking. the stock up 20% over the past three months and a quick programming note before i let you go. "squawk alley" will be live at apple's worldwide developers's conference beginning right here on cnbc. really looking forward to that, especially out of comments from the code conference. back to you. >> we'll pick up right there on apple because that's really been a stock story over the past few years, the stocks skyrocketing,

as you can say, all the way back to late april and remember that dramatic announcement. the 7-1 stock split. >> is that the reason for the run-up, the stock split or run-up over old programs. let's bring in gene munster from piper jeffrey and rick dolman. gene, hearing all kinds of rumor, the usual buzz you get before an apple conference of some kind. is that why the stock is moving, do you think? >> i think that's part of it. i think at the end of the day the fundamentals is what always drives the stock higher so, yes, i think it's going up in anticipation of the new products, and i would say this, the setup to wdc is a little different than what it's been a year and two years ago, and this is a higher probability that they start talking a lot about a new category which in previous wwdcs they didn't have and that starts part of a movement going into the event. >> you've got the excitement over the event and potential

upgrades for software. got a new product and research cycle coming. >> mobile payments. >> people talking about wearables and beats and that major acquisition so why do you think that it could be the stock split and the financial engineering? >> well, i think -- i think the primary driver is all what you talk about. i think it is the fundamentals so i think that the stock split would be the initial move but the subsequent move that's pushed the stock more recently is clearly about the new products and i would emphasize the new product category. if they do talk about the home automation segment which would be a new product category, that's something i've heard a lot from investors the past few days. >> i'm not sure when you were last with us, but the stock has gone up since that time. you wouldn't pay what it was offering at that time, and you were ruing the lack of innovation with the company. now we're starting to hear about new products and they bought beats. you still don't like the stock? >> well, bill, yeah, i was with you in april and as we talked

about april, and something important has changed, and i don't look at it so much as mysterious new products that they are going to come out with. we've heard about that for the last two years and we really haven't seen anything. i look much more at the financial engineering part. something important changed. when tim cook had dinner with carl icahn, and at that point i think tim cook, himself the smartest financial engineer in the in the world, carl icahn. they increased the dividend and the stock split and the huge buyback of stocks and a buyback of stock is so desceceptive for investors because it actually increases the earnings per share because it reduces the number of shares outstanding and that's so important for people to realize. i believe that a -- >> apple is not doing that right now. >> they are all doing that. >> so many companies are increasing their difficult den. they are not spending on new

factories. they are not hiring more people. they are increasing buybacks, doing all the things that apple is doing right now and it's working. the stock is going up. >> and the stock market is going up because of that. do you know that the stock buybacks of companies of the old stock is the only big buyer that weave seep for the last five years. every major group of buyers, institutions, so on, have been net sellers of stocks in the last five years. only corporations buying back their old stocks has been a big buyer, by $1 trillion a year so that makes stocks go up. now, of course, we have a change in the situation at apple, and this is very powerful. carl icahn is probably the smartest guy in that business and he's giving tim cook advice. when he had dinner, i was wondering, will tim cake that advice and apparently he did. >> gene, what do you think, coincidence or not? do you think carl icahn had that kind of an impact on apple? >> i don't think so much. i think tim cook respectively

took that meeting. the new cfo in his previous job has done more in terms of the financial distribution, i think that's probably driving it more. i guess it doesn't matter what is the catalyst behind it and what's important is things have changed. i think that has impacted the stock. from my perspective it's what the stock going to do going forward and the products that albeit have been mysterious in the past i think will take some form of substance in the next six to nine months and i think that will move shares higher. >> what do you think about the earnings coming down this year? we're going to see operating earnings actually declining this year for apple. what will that do to the stock? >> i don't think -- i think what matters is over the next six quarters, not the calendar 2014. i think the trajectory of the business after the new products come out is what's going to determine where the stock is going, so if you have a down earnings quarter in the june quarter, for example, i don't think it matters. >> but the stock market actually reacts pretty poorly to earnings

disappointment. you think people will -- >> i don't think it would be a disappointment -- i don't think it would be a disappointment. i think there's upside to the street numbers. if they have a down quarter it's already an expectation so i don't think people will focus in on that quarter. i think it's about what's going forward and i think there's upside potential to the numbers and i think we'll get back to a growth story of close to 10%. >> before we go, gene, what are you most excited about? what could we hear on monday that could move the needle for apple? >> the whole home automation? can they create a service layer for home automation. >> turning the iphone into a remote control for your house. >> that is exciting. >> ibm has -- everybody is in that business already for years. there's nothing new. >> it's not about something new. it's about can somebody do it right? the home field is really fragmented.

no one has put it to go. apple is in a place where they can put the pieces together. >> have you seen the time warner ads on tv? >> that's why we love you. always bringing up the important questions, but somebody pointed to me, you lose your iphone and you can't open your refrigerator anymore. >> there must be a backup. >> that's what happen to me, i lose my phone daley. >> 30 minutes left in the trading. the dow is down 9 point and closing up a month when it was up a little less than 1%. the s&p looks like it will close at an all-time high once again. >> bond bulls pouring into treasuries so which market is right? what kind of signals are we getting? dominic chu will be here to clear up what he's calling the land of confusion next, plus our panel of mainstream investors importantly will be chiming in on that debate. >> and then later -- >> vivian, i have a business

proposition for you. >> what do you want? >> i'm going to be in town until sunday and i would like you to spend the week with me. >> name the movie. >> "pretty woman." >> one wall street pro thinks that counting prostitution and sales from drugs being counted in the gdp. don't touch that remote. back in a moment. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971.

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comcast business built for business. >> the lone gainer among the major averages but enough to put it in all-time high territory. trading at 1920, 1921. the nasdaq and russell 2000 trading down today. bond president fighting all month in a heated battle over which market has it right. stocks or bonds on the economy. i know more than a few of the debates happened right here on "closing bell." >> yes, they did. >> and they will continue. takes it back from the phrase to

help clear the air. the bulls and pairs are both sitting around scratching their heads trying to fight out what they are doing. we'll call it the land of confusion. the bad news bears we'll call them say there's no reason for things to be as good as some believe. there's no reason to be as bullish on the economy as everyone wants to be because all that data has been mixed at best looking at jobs, manufacturing, anything else. the s&p is at record highs like you just said and the nasdaq is at 13.5-year highs, so the stock market volatility picture, the lowest in over a year. that just mean things are all good for the market and for the bulls. but no matter your pegs, next

week is going to be clairesy or calami calamity. and there's the granddaddy of them all the big monthly jobs report on friday and the big strait coming from the ecb. will they or will they not cut straits? buckle your seat belts because things could get very interesting. these guys all want to see some action going on. getting things moving one way or the other. drifting higher. morneau now on the market how the small guy is playing it right now.

>> are you worried about the economy and putting things in the stock market? everybody want to know what millenials are doing and students are doing with their money. >> sure, i think, yes, everyone is worried about the economy but overall you have to take the gdp numbers and the more macro economic factors as more of a 10,000-foot level and you have to kind of, you know, in making specific investments, you have to narrow it down to a company specific investment and that's what i do in investing and with stern as well and i work in the micropriced student investment fund and we're always looking at stocks and evaluating different positions and poking holes in different thesis. dave, what are you teaching in

dallas? >> i deep finance and management. >> you should know what you're talking about. >> and you're in the market big time as well, right? >> always have been, but just st. about doing asset reallocation and rebalancing. >> where do you stand right now, relative to stocks and bonds? >> i've gott had to consistently cut back a little bit. take the cream off and rebalance. >> my stocks holdings have changed a little over the last few years. putting money into the less exciting sectors. >> you've got some interesting

names here including lorillard. >> feeling through all the data and analyst reports, you know, looking at different sectors, lorillard more specifically, i like the growth of the business, growing at an 8% top line and the corner market in electronic significant mets which could be a really interesting field to be in in the future. you know, i like the company lorillard net of the e-cigarette brands. i don't see anybody buying apple or facebook or twitter. >> generally by the time these are buzz stocks they are often driven through a premium level of valuation which makes them less attractive. >> can be a great can be but if

it's not valued well. >> several years ago when i seconded visa it had classic growth characteristics. >> i'm sure you use facebook or twitter or any of the hot stocks. >> i'm more of a base value guy, and, you know, those investments don't excite me in that game. i look for more of event driven type of investments. >> i love that. >> thank you, gentlemen. thanks for sharing what's in your portfolio. best selling author of

"capital," the most talked about book out right now, don't miss joe kernin going at with it him. he's really been the pinata. >> look forward to that monday morning on "squawk box." 18 more minutes in the trading session, down a fraction on the dow. looks like it wants to come back and the s&p is starting to move higher. >> the nasdaq has emerged as a clear outperformer during the month of may. the monthly rise is the second one for the tech heavy index. find out which tech names did the biggest and heaviest lifting for the month and how that sets us up for next month. >> and later hold on to your wallet, diamond-maker debeers plans to raise prices 5% every

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not a whole lot of movement, a pretty narrow trading range. the s&p is definitely in record territory and if we close here, that's another high. >> kind of ironic that the nasdaq is down but seema mody has had the best run of the month. >> up 3% over the past month bill and sarah and outperforming the s&p 500. >> look at the sectors that have contributed to the outperformers, biotech and social media, internet, rebounding in the month of may and one trader is telling me that doesn't mean we'll see further volatility in these sectors so stay tuned. getting stock specific, netflix in the month of may up better than 1%. analyst say going forward, expansion could be a big

opportunity. another big winner is genetic sequencing playing alumina. no fundamental reason for why it's up. that's according to eye size group. shares have outperformed so this just goes that settlement and moment mum are playing a big role in the snap back. whole foods down in the month of may double digits. staples, another big loser due to disappointing earnings. it has seen the competition from the likes of retailers like amazon. can the rally condition? that's the big question on the street. if it breaks through its resistance level of 1485 that could confirm the uptrend.

back over to you. >> seeing a move up in yields after what's been a big rally for treasuries. there owes the dow right now. it's just slipped higher. a little over ten minutes to go in the session. you thought brits are stuffy. i haven't met simon hobbs but the uk statistics office will sound profit kigs and money it will make selling drugs. the question is should america do that as well. we're back after this. with all the opinions about stocks out there,

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>> got about nine minutes left here, and the dow is creeping higher. it occurs to me there's a rebalancing coming at the close today which means a lot of volume. the last time there was a rebalancing of this kind, rebalancing stock positions and last time that happened there's 450 million shares that traded hands right at the close so we may get that and a little bit of volatility at the same time.

up nine points now on the dow so we're about seven points away from an all-time high on the industrial average. haven't seen that this week and the s&p is up three points. that would be an all-time high. joining me right now is david darst, independent market consultant, and the market continues to move higher. >> well, they have shaken off ukraine. it's shaken down a slowdown in china's property market and china's economy broadly. i've been very heartened, bill, by the action of oil and copper this month. they are both up 5%. the banks have rallied have month of may that is just about to end as well as the small caps. they had been taking a lot of heat and a lot of gas and that was causing some people nervousness. >> telecom was the best performing sector this month. utility were the worst performing sector. utilities were negative for the month but two defensive plays though. >> that's amazing given how interest rates have continued to go down. you may have heard this, but there's a thought beginning to

grow within wall street within the financial sector that the united states is in a competition with europe to simulate their economy and they are not doing it by currency but by interest rates, and germany's interest rate is 1.37 and france is only 40 basis points more, 1.87 and here we are at 240 something and people think it can go even lower. >> it's the race to the bottom and wreaking havoc in the currency markets as well and all of that suggests defensive investing because they are expecting slower growth in the economy and yet the stock market continues higher here. >> health care still is the lead leader. >> industrials have done well. >> industrials have done well. >> master limited partnerships is an area where investors can look at, a nice yield and 6% plus, up about 6% already this year. they can grow more. they didn't do -- they didn't do

so well for a couple of years with tax worries. real estate investment trusts and bonds you can begin to lighten up on unless you're with a big deflation play. >> i want to ask you about that. we'll take a break and be back and take a look at the monthly figures for the major averages and get your thoughts on where we go, and we'll come back with our closing countdown and then after the bell, what's $2 billion to someone who is a billionaire with 20 times that money in the bank already? we'll talk to someone who is not at all happy that steve ballmer is spending his money by overpaying big time for the los angeles clippers. that's still to come on "closing bell." stay tuned. when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire.

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with the mobile trader app. from td ameritrade. >> a lot of activity on the floor because of this rebalancing some of these indices and look what's happening as a result. the dow is moving into record territory. the industrial average is up 17 points. we are sitting right now at the all-time high level closing for the industrial average. so we may finish the month at a closing high. looks like we'll do the same thing for the s&p. it's up about four points right now so we're going out with pretty good gains. how did we do with the month. all four major averages were positive for the month. the best performer was the nasdaq, up 3% for the month.

the s&p up 2% and the russell lagged a bit. the worst performer after all the highs we've been hitting lately, up 3/4 of a percent. the ten-year yield continues to move lower, down 6.5%. if you want to put it in those terms in terms of the yield on the ten-year. david darst, here we go. some of this is now technical because of the rebalancing. bob pisani joins us as well, but we're finishing the month with all-time highs in the dow and s&p. >> all-time highs with the trend in the market. by the way, you're seeing some action here. >> this is a rebalancing. >> rebalancing the morgan stanley index. there you go. and they do this on a periodic basis so all you see, the indexes that are world indexes that are -- >> some of these stocks have to be sold and some bought to be able to rebalance. >> nothing to do with the fundamentals as all. just that the weighting could

change before the market cap weighted index has been changed throughout the quarter. they get changed going at the close so it's clearly a mechanical thing. the indexes, that you know very well, are held very widely around the world. they paid through a lot of different ecfs. >> the last time we had a rebalancing like that. they had 450 million shares. you see all the activity going on. fill it with a little price movement. do you think the ecb cuts rates next week and if he do what's that doing to our market. >> they don't give it and the market can sell off. apple has been one of the big contributors in the nasdaq this month and has had a great year thus far. staying with apple it can go higher, bill. >> ecb and non-farm payrolls. >> big week next week.

>> thank you both. >> see you later. thanks, david. see you later, bob. we're going out with all-time highs as the rally continues for the dow jones industrial average. we'll see a closing high for that and for the s&p which is now up about four points as well. stay tuned now for the second hour of the "closing bell." here we go. >> another record close for the s&p 500 and after we settle looks like we're heading into a record close for the dow jones industrial average. welcome to "closing bell." i'm sarah eisen in for kelly evans. bill griffith is going to join me here in a moment. here is how we're finishing out the day, the last trading day of the month of may on wall street. 16,714, just below a record high on the dow jones industrial

average. 16,715 which would been the record high, but, still, finishing out in the green. the nasdaq composite is lagging behind, but, still, it has been the outperformer on the month. the s&p 500 hitting another record high and closing above at 1923.42. let's get straight to it with today's panel. andrew sullivan from sullivan law offices, cnbc contributor jon najarian and dominic chu and robert frank out at headquarters and with more on today's action "fast money" trader brian kelly. brian, the bull market marches on here heading into june. >> it certainly does. it doesn't seem like there's much that can stop it which, you know, the trader in me wants to take the other side of it, but it just does not pay at all. the market keeps marching higher. the economic news was fairly good, chicago pmi much better than expected and michigan confidence still good. not a lot of reason for it to sell off. >> i've got to say, the years

earlier when i was down there on the floor of the exchange tough to hear, people talking. >> a lot of excitement today. >> need that today, jon najarian, this rebalancing going on. traders still going at it over here. that's moved the market even higher. >> the sell in may crowd, bill, this is where they really tested their mettle, because if you sold in may, being scared out of the market and going to cash. by may 7 the dow jones was down around 16,400. just a week later it was 16,700, so if you can ignore a 300-point rally and not jump back in at that point, you're okay, but it turned right around and went straight back down to 16,300, and now here we are finishing basically as sarah said as the highs yet again, so i just say if you're somebody who thought you could sit on the sidelines and watch that, you're probably

wrong. you're probably jumped back in and trying to chase it and then got flushed back out as it turned. may was a very tough month for those that tried to sell and then got nervous >> it's not like it's been one straight shot up for the month of may. sure we're rounding up for the s&p of 2% but it was pretty bumping along the way with low volatility and low volume. >> that's right. >> the low volatility and low volume were traders. i was walking around here before we came on set and one of the interesting points that one of the traders made is you get this upper melt effect and you're thinking where timely i can't afford to not be in the market because it's going to cost me movr more to get back in sometime down the line. you can't blame traders at all for being a hence you have because you do have so many conflicting signals. on the one hand you've got transportation stocks which are viewed as a leading indicator of the economy and they are at record highs. meanwhile, you have small caps still struggling a little bit and then you have all the moment mum names like netflix and

amazon that are maybe showing some signs of life over the past two or three weeks and that maybe means investors are getting back in and all of this on volumes that are so anemic it has may traders questioning what's happening in the market. >> with a ten-year yield below 250 who would have thought we would have been here having the best month for treasuries since back in january. >> brian kelly, are you bothered at all by the lack of volatility and volume right now? does that make you concerned about setting highs in that environment? >> listen, i'm always concerned, bill. i always think things are going to fall apart because i don't think it's sustainable. listen, you're getting the last person to come in here and say i finally have to be in. yeah, that would concern me. what i think is going to be interesting next week, you just mentioned bond yield. if bond yields rise, if we get a good jobs number and bond yields rise and the market doesn't rise then i think we really could have some problem because low rates are actually very good for

the market. it makes stocks more attractive. as rates start to rise they will want to be more into bonds to get that yield. >> by the way, if you're just joining us, we've set new highs on a closing basis for the dow and s&p. the s&p was positive for most of the afternoon session, just last few minutes of trade that the dow moved high enough to set the record and i guess we can attribute that to the so-called rebalancing that's taken place here at the new york stock exchange as they rebalance some of the morgan stanley indices here. >> and i'm curious for your take here as we set record highs on the dow and s&p. are you feeling the exuberance from where you sit? >> i'm not feeling the euphoria. >> you're a lawyer. you're not supposed to. >> if the retail investors don't get back into this market or they get scared by some of the numbers out there, no telling what this market can do. at all-time highs. i think that this is the risky sort of the market that a lot of retail customers and investors

will try to avoid. there's a lot of risk built into the numbers right now. >> i want to -- >> i was going to say, robert, it serves to increase the wealth effect out there, certainly, doesn't it in. >> for the wealthy, yes. i found it interesting that one of your previous guests on the 3:00 hour was talking about that companies have been the largest buyers of stock over the past five years, you know, $1 trillion a yore in stock buy backs. everybody else has been a net seller, and i'm not sure of the accuracy of that fact but it does tell you there's three different pictures being told by the bond market, the stock market and the economy, each saying very different things, and maybe there are three different realities, but it's hard to put these three stories together right now. >> it's the land of confusion. >> yes. >> and just to make it even more confusing, the dollar closed out month with the gain. a lot was on the euro slide and you saw gold hitting a new low, a several week low. the correlation here among the major asset classes are kind of mixed up. >> they are not working properly

right now. >> and we're likely to get that big pivot that we've all talked about next week. the 5th when draghi basically tells us, i believe, that we heard david darst talk about it as well. the shocker will be if he doesn't move on either taking rates. >> he's telegraphed the move. >> he'll telegraph it every year. >> big enough to deliver what the market is anticipating given so far that it's just been rhetoric. >> with the german rate at 2.6 and ours at 2.5, i don't know that he needs to do too much, but, sarah, to your point, he can't just talk the talk, he's got to walk the walk. next thursday he's got to do that. we learned about that in the early -- not early morning, but in the early side of our trading thursday and then we've got the very early numbers from the jobs report on friday, and if it's a great number, i would love to see a great number. it's fantastic to see a positive jobs number for two in a row. >> right now a lot of traders will say that there's no fear

whatsoever of inflation anywhere in the western developed economies. if you have ten-year yield at 2.5%, gold which is an inflation hedge, by the way, if gold prices are sliding nobody is worried about inflation. when ten-year yields are worried about 2%, nobody is worried about inflation and with the ecb looking to lower possibly interest rates, they are not worried about it. >> the ppe came up a little bit. >> i think if anything goes off the rails, i think those expectations are going to bring this market down and bring it down substantially and that's scarey. >> we had huge volume on the close. if i read art cashin's hand signals to me, we did about 4 billion shares overall. i lost him. anyway, as anticipated, because of the rebalancing, we did big, big numbers in terms of volume, and it served to push the dow into record territory. brian kelly, for the month, telecom was the big gainer among the s&p sectors.

technology behind it. nine of the ten sectors were all positive. utilities were lower for the month. what do you see happening next month? where are you putting your money to work here in. >> in terms of the stock market, i don't have a lot of investment. i think it's interesting when you talk about the technology and the names that did well, technology and telecom also pay a very big dividend. twa was a defensive play and can you look at something like a microsoft, still pays a dividend and still get to participate in the upside of the market and if things do go off the rail you probably won't get as hurt in those things. >> any reason to take your profits now and change your tune for june? i mean, there can be different trends. >> change your tune. >> that's sarah eisen. >> everyone is saying you shouldn't have sold in may and went away, but you have to see. part of that is based on the fact that the summer months are slow and they were overbought going into the summer.

that could still happen. >> right. >> hand that's why i said if you're somebody who could be tempted to get in here and chase because you sold and you got out. certainly sarah if you're in a tax-defevered basis, in other words, i.r.a.s, 401(k)s and roths and things like that, could you sell here as long as you're not tempted to jump back in and as long as you'll have the patience to wait for a pullback. all of the people waiting for that in apple have that h that. today is did reverse rather dramatically from 6:44 all the way down to 631. that's a pretty big reversal. if that continues next week i'd be a buyer of many more of the tech stocks like apple. outperformers all over the place, image sensors for chips, they just blew it out and that stock exploded to the upper. >> you can't just disappear in

may and go away for the next three to six months. just can't do it, not in this sort of market >> also been over a year and a half since the last 10% correction. >> during the european debt crisis. >> way overdue. >> we'll talk a lot more about the markets. >> there's a reason andrew is here and robert frank is here. lots to talk about with them this hour as well. >> be sure to catch the rest of the "fast money" crew coming up at 5:00. i'm sure they will be taking stock of the main market gains. >> and changing their tune for the month of june. >> meantime, shares of lions gate taking a huge hit on earnings. they will be talking to the vice chair michael burns at 5:00 p.m. eastern time. do not miss "fast money" coming up for a friday. well, they bought in may and now do you sell in -- since may is over, and that's the question we'll be asking right now. >> a lot of seasonality questions. the s&p 500 splurging nearly 2% next month. find out if the rally can carry over and we'll see a june swoon.

there's another one. >> that's an old one there. >> also, when you think about economic growth, you probably think, what? retail sales, manufacturing, global trade. well, now economic giants like great britain are also adding in illegal drug trade and prostitution to their gdp calculations. >> hey, it contributes to the economy. >> we'll hear from somebody who says this is a great idea and that the u.s. may need to do it, too. >> we'll ask our panel about that coming up and our lawyer. >> all-male panel on prostitution. >> coming up. >> former microsoft ceo receive ballmer, as you heard, buying the l.a. clippers for 2, yes, $2 billion, nearly four times the previous record for nba team set earlier this year and much more than "forbes" valued them so are the clippers really worth that much, or are sports valuations out of control simply because billionaires have the money?

and they are willing to overpay to get their toys? we'll ask robert frank, among others, about that coming up. a lot to get to. hope can you stick around for us here with "closing bell." stay tune the. you're watching cnbc, first in business worldwide. you see the thing is geico, well, could help them save on boat insurance too. hey! okay...i'm ready to come in now. hello? i'm trying my best. seriously, i'm...i'm serious. request to come ashore. geico. saving people money on more than just car insurance. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through,

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investors not so much heeding the all adage sell in may and go away. >> turned out to be a pretty good month for the bulls. >> s&p up 2%. it was agonizing because it was choppy. i'll give you an exam. take a look at the major sector gainers. you can see materials, consumer discretionaries and those are cyclical groups and health care and consumer staples. notice there's no financials or industrials in there. they lags a little bit. still choppy and indeterminant. some sectors were just all over the place. retail a big mess. by and large it was terrible. staples, walmart, tjx, tiffany

and nordstrom blew up, never looked back. double-digit gains. a couple other sectors were standouts. look at southwest and delta. for the builters who would have thought mortgage rates were going down and housing starts not quite as disappointing as even a month ago. >> a lot of people noted we had an options experation earlier in the year. a lot of people said all of a sudden bitcoin shot up, coming back, for stable now that mt. goks isn't still around. a lot of people are e-mailing me and asking me about this.

we should look into this a bit more. dish network is now accepting it as a form of payment for customers. certainly interesting to watch. >> the fact that it moved up this week as gold go the done. that got people saying a-ha. i'm not sure that that's there. it's interesting to point that out. >> bob pisani is neutral officially on bitcoin. >> don't drag me into that. either side. >> our next guest has been tracking the monday of may and june for almost foo years. you haven't been doing this for 50 years, i know. what's the seasonal tendency. all negative numbers.

so, you know, after this big may, some like to settle off the high. be careful going into june. wonder how different these correlation trends have been given the fact that we've seen quantitative easing, the fact that we've seen no volatility, the fact that yields are at record lows and zero interest rates with qe and we're tapering, does that throw off your seasonal trends? >> you don't fight the fed, take a defensive moss tour, sell your underperformers and let your winners. >> rise. we don't think we're going to get a big selloff. sixth year of a president's term, the second mid-term year, which is not as bad. quite a bit better, a lot of

bullish factors. seasonality is bearish. looking for a bit of a correction and letting them ride and being more defensive. >> do you let the seasonal tendencies affect your trading, or are you just looking for opportunities? >> i don't trade off of that. i do look for trends in particular, trends feel like the labor day buying retailers around labor day and selling them on black friday. i look for those kind of seasonal trends and i pay attention to the hirshes. in some degree they become self-fulfilling prophecies. people expect selling in may and for whatever reason they had a good first quarter of the year, then they start selling for the springtime. sometimes becomes self-fulfilling. >> sort of self-fulfilling. you guys are saying sell in may

doesn't work. >> has in the last couple of years. >> everybody knows about it so how could it possibly work? how could you have a trading edge when everybody is doing? >> you don't sell willy-nilly at any time in may. you look for a shift or technical indicators. >> i think your numbers will primarily look at dow over the next 50 to 75 years. >> nasdaq, russell, the nasdaq and russell 2000 has the best eight-month that runs through june. that gets a little bit more of a push into june so, you know, it's really the july through october period. a lot of weakness in october and november and sell in may and go away is a british thought. >> it's also interesting it did start in britain with a leisure class in britain, look, when you go away for holidays, go to the beach or mediterranean, you sell in may and buy when you come back in september. the leisure class is no longer the leisure class, workaholic

wealthy and if they take any month off it's suggest. >> you know, you're still seeing the memorial day and summer doldrums here in the state. still that culture and human behavior where there's less business going on. >> i would just say that there's something that bob pisani pointed out just before this segment that was really ringing true for a lot of traders and you can look within the same industry of sector and still find winners and losers and that means doing homework and picking the right stock whether it's nod strom or macy's tiffany's or dollar general. fundamentals matter and that's why some traders think it's a market worst investing in. >> i think so. >> thank you, jeff. >> best to your family. go a good weekend. >> former microsoft ceo steve ballmer buying himself a pretty nice retirement gift. buying the l.a. clippers for a cool $1 billion. >> in cash, we're told.

>> more than double what many valued it at and four times the highest previous sale of an nba team but doesn't matter when a multi-billionaire really wants something and there's a bidding war. that's next. >> and how is this for pricing strengths? debeers plans to raise prices 5% every year going forward, no matter. 5%. so what happened to supply and demand? we'll speak exclusively to the ceo of debeers later about that very topic. >> back after this. friday night, buddy.

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>> former microsoft ceo steve ballmer reportedly buying the clippers for a record $2 billion. just to put that number into perspective, the previous record sale for an nba team was the milwaukee bucks, recently as april actually, sold for $550 million. >> and "forbes" said they were worth $400 million or thereabouts. >> nobody predicted 2 billion. >> mott this time around. >> are they worth that much, that's the question, or do valuations not mean anything anymore when it comes to the mega rich buying sports teams? joining us with her view on this $2 billion price for the clippers, nancy armor, columnist for "today," wrote a scathing piece about this, nancy. we welcome you and commend this. you're not happy on either side of this deal. you're not happy that the

sterlings will make this kind of dough or that steve ballmer is buying that kind of dough. >> no, apparently i'm cranky about the whole thing. >> explain why. >> well, first of all, it gals me that donald sterling is going to make a whole lot of money for making a racist statement, but, you know, i am happy that he's getting out of nba, but their 2 billion, really? i can't even wrap my brain around that let alone thinking about writing that kind of check like steve ballmer is going to have to do. >> he won't write a check. he'll pay cash. >> has it in his back pocket. >> you've done a lot of reporting on this, robert frank, and the fact that this is a trend that we're seeing the billionaires getting into nba teams, whether they are worth it or not. >> look, i'm hearing the same thing hear that i hear at the auto auctions, that i hear at art galleries, that i hear at wine auctions. everybody looks at these prices, whether it's francis bacon paintings or ferraris saying no

way. 142 million paid for a painting and i asked galleries how is it worth that, it's worth what a billionaire is willing to pay? that's how it works. >> we just have to toss out any notion of fundamental value. these are collectibles. these are trophy assets for a growing number of billionaires around the world. they will pay whatever it takes. >> let's not forget, also, you were going to have a bidding war for this team anyway. look at the number of high-profile people who were coming out. doesn't say they were all going to go bidding, but plenty of people who were showing genuine interest in buying this team for whatever reason. you know there was going to be a bidding war and that the sterling were saying, look, if you're willing to pony up the money right now, you can make a preemptive strike and steve ballmer wasn't going to get away with paying $1.1 billion which everyone thought would have to be the price tag if everybody else was coming calling. right now he has to pay what he thinks he can pay to get the team without a bidding war going on, don't you think? >> andrew. >> ballmer wanted to buy the

sacramento kings a couple years ago. didn't get in because someone underbid. something is, of course, worth what somebody will pay. no economic justification as an investment, but if it's a toy, if it's a trinket or ferrari. >> it's not. here's my problem with that argument, nancy and maybe you can argue with me a little bit. the fundamental value is that nba franchises, like most sports franchises, is going up. very valuable and pay tv contracts at the local level and national level which are both coming due for the clippers. it's a big deal. l.a. is the second biggest television market. why can't you make some sort of argument that there is an economic fundamental reason why this is a good value and that value is going to go up? >> well, two reasons. first of all, we're talking about the clippers. we're not talking about the lakers. we're not talking about the celtics. we're talking about the clippers. this is a team that has 19 playoff wins in the last 20 years. they have been horrid for most of their existence, so if you're going to pay this kind of money for a team, get something good. you know, the clippers are on the rise, but come on, and the

second thing is they don't own the staples center. a lot of other teams, they get anything that comes in from -- that's generated by the arena, that money goes to the team. the clippers don't have, that tennants of the staples center which means they only get a percentage. their games are not cash cows, not like when the group paid $2.1 billion for the dodgers. they got the stadium. they got the stadium and parking and everything. >> tv rights and everything else. >> exactly. >> the other point to be made here, the other bid was around $1 billion. this was an emotional bid. this is double what the other bids were, and this is steve ballmer just saying i don't care what it takes. this is a lights out bid that no one else will rationally touch. >> and the bucks, whatever, two months ago, sold for about $550 million. nobody can justify. it's still an nba franchise, and it's just hard to justify a

valuation, even in a much larger market three or four times. >> you can't say that. >> there's a publicly traded team called manchester united, which is the most popular soccer team arguably in the world. >> yes. >> and they are publicly worth $2.7 billion mark to market. >> and they have a long history of winning, too. >> nancy, you get the last word. go ahead. >> i just -- you know, i think obviously it's ballmer's money. he can do whatever he wants and clearly he has it. i don't know. i'm sure the sterilings are laughing at this point. knew they would get a lot of money, but $2 billion. $2 billion. >> well, it certainly is an eye-popping number. i think personally are the other nba team owners because the value goes way up. >> they bought that team for 13 million back in the day. >> biggest winner is call tax authority. >> oh, yeah. >> there's no way that's not a

big windfall. >> and steve ballmer, has to be pretty happy right now. >> thank you, nancy. everybody read her column in "usa today." the l.a. clippers deal is generating big buzz beyond basketball. i know you're all wondering about that. that's coming up next. >> also ahead. >> six full nights, $4,000. >> six nights at 300 is 18. >> you want days, too. >> 2,000. >> 3,000. >> done. >> such a good movie. julia roberts playing a hooker with a heart of gold in "pretty woman" and coming up somebody here says the u.s. could make count the world's oldest profession in its gdp readings. no joke, if it wants to remain competitive in the global economy, and don't laugh because england is actually doing it now. we're back in a movement like 60,000 bonus points when i spent $5,000 in the first 3 months

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performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. turn out to be a pretty eventful day at the white house today. >> our john harwood is at 1600 pennsylvania avenue with the details. really, this was kind of a surprise. where do you begin? >> reporter: well, sarah and bill, this was building towards a day like this, at least part

of it for several weeks. eric shinseki has been under mounting pressure to democrat and republicans as we've had more and more disclosures and problems with the veterans. not able to get timely care and eric shinseki came with the president and met with the president's chief of safe. came into the briefing room and explained why eric shin seccy is stepping aside. >> he has worked hard to investigate and identify the problems with access to care but as he told me this morning, the v.afrmgt needs new leadership to address it. he does not want to be a distraction because the priority is to fix the problem and make sure that vets are getting the care that they need. >> reporter: but, of course, just a couple of hours after that announcement, you had jay carney walking into the briefing room and announcing he's stepping aside. jay carney was not under any sort of pressure to leave but

he's been in the job more than three years, a long time and demanding job. went to the president in april and said he was looking for an exit strategy. the president agreed to let him go with the summer and spent time with his kids. despite all those battles you see on television every day, he's enjoyed doing this job. >> it's not always pretty. it could certainly be better and to be a part of it is an honor and eye for me, and no matter how tough the briefing is, i walk out of here having been glad to stand here. jacques ernest will have his hands full as we get the nominations in the next couple of weeks of a new investment a. director as well as deal with a whole range of problems that the white house is facing as it runs towards a difficult mid-term election.

going to be a busy guy, guys. >> i like how obama said that the flak jacket is officially passed to a new generation. >> did a great job though. >> good to see you. >> the democratic presidential administration certainly are making headlines, congressional democrats are topping today's hot list. >> one of the stories on fire on cnbc.com and joining us with the whole hot list, cnbc.com managing editor adam wastler. >> politics the hot topic and right now we're leading with a couple by ben white. works for political and writes a couple just for us every week and this time he's saying maybe it's time for the democrats to start panicking about economic numbers. all the first quarter numbers came in. not great. we'll make it up in the second quarter, and early indication are, we might not make it all up in the second quarter so ben takes a look at the political equation for democrats and what that might do to their election chances in the mid term. number two story, back to our

old favorite topic, minimum wage. katie little on our staff interviewed the owner of ske restaurants and he says his franchisees are closing locations because of minimum wage hikes and instead of sedding up two locations they are consolidating into one. that's an interesting story our readers are loving. finally a feature looking at the horse population in the united states. where have all the horses gone, down 10% over the last few years. turns out horses are lagging economic indicators so things are getting better now. the horse industry is still where the economy was three years ago. fascinating story. you'll love it. >> who knew? >> sounds like the economy was dominate i dominating. >> at am, thanks for the hot list. >> up next is the segment i've been waiting for, you know, all day today. >> we'll let you do it all by

yourself. >> diamond prices are on the rise and demand continues to grow. the ceo of debeers will be joining us next to talk about the precious gems, the plan to raise prizes a single amount every single year. >> and another story here. the makers of the 1936 film "reefer madness," a fun movie to watch in college. they would be appalled by britain's office of national statistics which says they will count profits from selling illegal drugs and prostitution when it tabulates its calculations of gross national product in the uk. our panel will discuss this and whether or not this is madness or not. coming up on "closing bell." stay tuned. when does your work end?

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cleveland clinic. call today, for an appointment today. >> drugs, prostitution and gdp. >> just join the fun here on "closing bell." >> which doesn't belong this? the uk office of natural statistics found these illegal acts boosted the economy by 10 billion pounds in 2009 so the uk has decided to include those numbers in the gdp report. >> they are not kidding, we think. is this something that u.s. should consider? we'll talk about it, john. >> hang on. >> zach kashl is joining us. trying to get your arms around what an economy is so what do you think?

should we include illegal things like prostitution and illegal drugs in the computation of our economy? >> first of all, this is, you know, an absolutely delicious discussion because it's salacious. we already do include it. in nevada the bea does include prostitution as an economic output in this category of other personal services, i kid you not, along with party planners an personal trainers, i suppose, to some degree. it's a little bit of both. marijuana use in colorado, which is now legal, is in fact included as -- in agricultural services when we measure gdp so the issue is more because we don't include illegal activities in gdp calculations and the european union is saying, some countries it's legal and some countries it's illegal and some countries it's a gray area. kind of unfair for countries who don't include it because it is

cleel. th -- because it is legal. i don't think it's a moral question. >> yeah. it has to be competitive. i know, john, you want to go ahead. >> i love having you on here, and you're uniquely qualified for me to ask you this question. how about -- are these numbers going to be figured into the inflation numbers then? >> yeah, well -- >> if the prices of those things go up. >> in other words, what do you know about the prices of drugs and prostitution? >> absolutely. they will be included. the issue is all these things with so much of our cash economy is it's real, right? the fact that we don't measure it doesn't make it less real, and there's a real problem with gdp as to what it actually captures in terms of economic activity of a country. and i think people are beginning to realize there's a whole swath of things that we're not really adequately factoring in. on the more benign side, the free impact of google sin visible. >> andrew is our resident lawyer

on the panel. you must be appalled that we're talking about these illegal activities and adding them to our economy. >> it's $16.5 billion a year. the gdp has to evolve and accurately represent what economic activity is taking place, and whether you're moralistically against it or for it, it impacts the bottom line so you have to include it. i think it's a no-brainer. >> you include cigarettes. how do you not include these other things that people choose to avail of themselves. >> those are legal, and if you want to make those things legal and tax them. >> we don't want them legal. >> if you make it legal and you can tax it, that means you can quantify the actual economic impact. right now you can't tax an illegal drug deal or an illegal prostitution deal so you don't know what the economic impact really is but if it was legal like in nevada like zachary karabell says, you will know what the impact of the economy is. >> just because it's hard to

measure doesn't mean you shouldn't try to measure it. you have to try to gauge it. >> how do you it, if you can't legalize, it how do you measure it? >> there are ways to do it. italy is going to have much more of their gdp growing because of the inclusion of these things and that's led to all sorts of commentary. >> will be a berlusconi if we take him out of it. >> or the recession. >> can definitely get at these things. the seizure of illegal drugs and drugs going cross-border, it's not that it's so difficult to calculate, it's just that we're beginning to realize there's a whole lot of economic activity for one reason or another that we just don't include. >> like unovation and technology. that might be a step towards the right direction. thanks for weighing in, zach. good to see you. >> later. >> always a good discussion. >> love that. >> all right. diamond giant debeers planning to raise prices 5%. >> that's just not for this year

but every year going forward. when we come back we'll ask the company ceo whether that could end up hurting consumer demand among other things we'll be asking him. stay tuned. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

diamond prices are on the rise as global demand continues to grow and supply is still

limit. de beers the world's biggest mine of the precious stone plans to raise prices 5% every year, 5%, 5%, going forward. >> the question is where is all the demand coming from and how does the company plan to meet it. we have a cnbc exclusive. we're joined by de beers ceo. thank you so much for joining us philippe. tell us what the demand picture looks like across the world for diamonds. >> the demand across the world is pretty strong and last year we enjoyed some good growth. the market grew around 3.5% after only 2% the year before and this year we are expecting market growth for the world of around 4.5% to 5% and mainly driven by a very strong market in the u.s. >> now, the wildcard though is china for you and india, right? the u.s., we've always been big

consumers of diamonds, but that's only just growing exponentially now in parts of asia and the -- and india, right? >> that's right to a certain extent. if we look at market share of the world market, the u.s. market is now close to 40% of the world market when china will be around 13%, maybe 14%. even if there is good growth, and we saw last year growth in china of around 15%, we're still very far off from what we see in the u.s. india went through a little bit of a bad patch because of the rupee evaluation. what was gape egained this chin was lost in india last year. with the new prime minister coming on board, we have high expectations that india is going to come back again because mr. modi is coming from an area that

knows very well the diamond industry. the u.s. is by far the biggest market. >> i want to ask about your strategy on pricing. we've been talking about this 5% increase year-over-year. how did you get that that point and is there a risk it could go even higher. >> we don't really talk about pricing. what we really talk about is demand and growth and we strongly believe that after 3.5% last year, we should see a growth of the market to 4.5%, maybe 5% which is quite high and double the size of what we saw two years ago and obviously prisses are li prices are linked to supply and demand. too early to well. i know these numbers have been quoted, but unfortunately we have to react to the market situation. today the market is looking quite good. what is extremely important is

to look at the growth in the marketplace. we are in las vegas today. we are optimistic that the second part of the year will be pretty strong and this is what is important. pricing decision will come later. >> mr. mellier, thank you for your time. you better rush out and get your diamond. >> i want a purple one. >> you can find those at sotheby's. >> coming up. the old adage sell in may and go away, will it apply to the market this year? it's one of the hottest questions of the day. >> we'll ask our panel what they're expecting, whether or not they're going to change your tune in june. >> and a programming note, tune into this one. controversial french economist thom thomasp iketty will be on "squawk box" on monday.

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and i get a lot in return with ink plus from chase i make a lot of purchases for my business. like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning business even more rewarding. ink from chase. so you can. no joke, she has purple diamonds on her computer screen. >> you haven't seen them before. >> i don't know. whatever. next week should be very busy. we begin the month of june.

anybody want to start on that one? what are you expecting here ? we have a lot of important -- >> worldwide developer conference apple, june 2nd next week. >> we're there. >> that's a big deal. i'm sure you will cover it wall to wall. as far as draghi, also next week. two key things in the first week. >> the jobs report. >> i think we're going to see more bad stats and i don't like this market. it's just so optimistic -- >> boy, you are -- >> i'm a debbie downer this week. >> where did this come from? >> it's the clouds and the rain. >> you've been holding back. >> there have been a number of doom sayers and doom and gloom and wall of worry and they've been wrong. >> look, i like it -- >> since 2009 by the way. >> yeah, i just wonder where all these bulls were in 2009 because there were so many people that were predicting another 10%, 15%, 20% decline. where are those people now? now they're optimistic. >> i'm watching this whole idea you have the jobs number. we've been talking so much about the economic data.

steve liesman has made a huge point of this idea that it's been mixed at best. what we really want to see is the weather effects start to linger a little bit but they're starting to get out of the way. maybe this is the jobs number that provide clarity. >> as the wonky wealth reporter, i'm so excited about the piketty interview on monday. it's been so misrepresented by both sides. i want to hear what the man himself has to say. >> how about this? read the book. >> i did back in january. i thought this is so complex nobody is going to get it but it's so important and it's exciting to see it on the best-seller list but very few people who are even talking about it have actually read it. >> well, certainly it's caused a lot of opinions on wall street and beyond. i'm just going to throw the walmart shareholders meeting on friday. thanks for the panel. >> anytime. >> setting up to be an exciting

month. >> and the fun continues. f "fast money" coming up. >> always a fun time at the nasdaq. lgf shares 11% downdraft on the stack. we have the vice chairman michael burns of lionsgate to answer questions about what happened in the quarter to also give us a look at what's coming up including "orange is the new black" next week. >> a purple diamond would go well with your outfit. >> we're like twinsies. "fast money" starts right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. happy friday, everyone. our traders tonight are tim seymour, brian kelly, steve grasso, and pete najarian. lionsgate shares getting hit hard. reporting weaker than expected revenue. we have michael burns in an exclusive interview coming up. the top story tonight, the s&p closing at a record high for the 14th time this year. the index up