vaccines. guys with the new p.e.d. treatment this year they are on track to sell 5 million doses. back to you. >> it's a serious problem but i'll tell you this much, jane. that hog behind you the whole time wasn't listening to anybody. had a mind of its own. >> that hog will be mine later. >> bring on the pork. thanks very much, jane. "closing bell" is next. see you tomorrow. welcome to "closing bell," everybody. i'm kelly evans down here at the new york stock exchange. >> hi, and i'm tyler mathesson here at cnbc headquarters. i'm in for bill griffith. stocks kicking off the day in red and after a comeback on all-time high watch. dow needs to gain 21 points to hit a new closing high, and right now the dow is up about six points at 16,728. last time, kelly you and i were together, it did hit an all-time

closing high. >> tyler, just thinking about that, that was april 30th, our 25th anniversary and see if we can do it again today. i think the s&p is trading at record high closing territory. meantime, a heavy duty lineup on "closing bell." exclusive interviews with can't fitzgerald head and two friends who started with $200 have a brand worth millions. >> and will housing turn out to be a bad investment over the next decade? kevin o'leary says yes. he's here to make the case that you're better off renting right now than owning a home and wait until you hear why. >> here's where we stand in the markets. tyler mentioned the dow is up a couple of points to 16,729. still 15 shy of the record closing high. take a look at the nasdaq which after underperforming for the last couple of sessions is trying to add 15 point today and

the s&p 500, keep a close eye on this one. the record high is 1924 just about, and we're trading at 1926 right here with about an hour to go, tyler. >> let's talk markets. joining our "closing bell" exchange is kate warren from edward jones and ken from money matters and keith fitzgerald and jack bouroudjian from intention financial partners and our own rick santelli. welcome one and all. ken, you make the case, my notes indicate, that we are in a kind of rolling correction. make your case for that because we're going to an all-time high potentially today. >> well, what normally happens when you have a correction is you have a drop of 10% to 20%. it recovers quickly, usually within about four months and then we forget all about it, and we move on. well, it's happened here and over the last few months the market basically traded sizeways, and i was -- it's picking up now, but for four months we basically treaded water so the net effect is the

same as if we had a correction. didn't have all the excitement or variety of a 10% drop. >> do you think policy-makers in europe will do what everyone for weeks has been speculating that they will do and add more stimulus to support the economy? >> well, i think the whole phrase of adding more stimulus certainly makes it sound like it's something easy and that it works. i don't think they are going to come up with anything tomorrow in the big picture that's going to work, especial ly if some of the programs of late are using. should be no shortage of volatility. the debate is whether it's more on the euro or bund and subsequently in the southern securities, like the spanish, italian, portuguese greek paper. i think it will all be moving rather large. i just don't think they can possibly deliver. they have had years to enact reforms. mario draghi bought them a couple of years. i don't know if it was prudently used or not, but i will tell you this. the setup going in tomorrow is that the bund yield and ten-year

note yields are both basically at three-week highs. they have both had basically some of the bigger corrections of 2014 because most of 2014 has been yields to the downside, and, of course, let's not dismiss today's trade deficit. that was a big number. it was the biggest deficit since march of 2012, and it underscores not only revisions to first-quarter gdp but the lofty highly debated between us calls for second quarter coming down markedly for four handles to three handles. >> they are. >> keith, let me turn to you. rick raises the question of whether all the fiscal -- the monetary stimulus, i should say, has really had the effect of stimulating the economy. i think you're in the camp that says that the u.s. economy isn't all that hot. we did get the beige book an hour or so ago, points to modest or moderate growth. do you think that the monetary stimulus worked, and do you think that the stock market has

gotten ahead of where the real economy would justify those prices? >> well, that's an interesting question, you know. it depends on how you define work. i think the fed conditions as i've said repeatedly, to make things up as it goes along. i think stimulus has clearly worked. prices simply i think are ahead of where that value is today. what i'm concerned about is a potential for a june swoon. gotten ahead of things and haven't had a meaningful correction but i'm content to play in this market because i think that's what the fed and ecb is telegraphing. we want to inflat things. i'm going to be along for the ride. >> kate, you think this rally can keep going, don't you? >> absolutely. basically the economy is showing signs of picking up a little steam. won't pick up a lot of steam but in particular if the economy does pick up steam that's good news for stocks and valuations are still reasonable, so i think, yes, the fed is trying to not only inflate the economy but trying to be sure that it stays a good environment for investors. >> what do you say because i'm sure you hear this from

investors all the time who look at the markets at all-time highs, can't believe whether they are about to walk in at the moment of a massive selloff. how can you say that's not going to happen when we're so overdue for a correction year? >> we never know when it's going to happen and it's usually a surprise that triggers it so you always need to be prepared for one and that would be a return to normal volatility which we haven't seen for almost three years, but if you're prepared for that and staying invested, realizing in an environment of improving earnings and economic growth, any dips or buying opportunities, not things to be afraid of. >> jack bouroudjian, are the stoc stars aligned for stocks? >> absolutely, tyler. since the low in april, let put it in perspective. we've rallied 100 s&p points, all right. this has been the most disrespected unfanfared rally i have ever seen, and i've got to tell you something, we're at all-time highs, whether people don't know it or not. what's really going on here, what i've been saying all along. the bond market has been sending

the wrong signal and anybody that bought it last week has been catching you have, you know what? i'm going to go out on record and i'm going to bet you that sack of white castles right now and right here that we've probably seen the low yield in the ten-year as of last week, all right. that was it because quite frankly can i not see anybody buying bonds. the competition for equities right now is fixed income. >> hang on one second. >> does anybody here disagree that we've put in the lows for bonds this period as jack just said? anybody? >> yes, you disagree with that. >> go ahead. >> i think that risk is still out there. >> me, too. >> i think we'll end the quarter at 2.25 or 2.30. >> you mean the end of the next month. >> you think we're going back down to -- >> end of next quarter, by september. >> okay, okay. >> rick? >> jack, jack, how's business? how's business? >> business is great if you're long the market, it's wonderful.

we're covering this conference in new york, and i've wondered for years why the big titans of wall street didn't complain much louder that the markets were being pegged by agencies like the federal reserve. now i know why, because the wool is really good, fleeced all the wool and now they don't like the taste of the lamb. find it so interesting that they are not all wondering why the markets aren't moving, why the hell do you need traders when you package interest rates? >> i'm going to serve guys some cheese with that wine. >> i need to inject a word of caution in here because even though i think that the dow will be at 18,000 by the end of this year, after the elections i think we're going to see a real on the order of 5% or 6%, but, again, you have to be careful for the upcoming bear market. i agree with the guest that said you've got to ride the market but you always have to have an eye on the exit. we work with people that are retired or are retiring soon and our job is to the to make them

rich quick. it's to keep them from becoming poor and when the next bear market comes with the debt that we're running, the low interest rates for so long, the imbalance that that is is creating, i think we're setting up for a bad bear market. >> what's going to trigger it? >> i don't know if i would go that far. >> what happens if you don't get that 10% correction, we did not get it last year and whoever that first guest was was spot on. >> haven't got it this year. >> got that rolling correction and it went sideways. >> countries like argentina always have very strong stock markets. >> what we're looking at right now is what i call a meltup scenario. get some of these asset allocation coming out of fixed income because they realize that might be it for the year, watch out. >> how do you meltup? >> there's no customer value. >> what could trigger the next bear market? >> guys, guys, just one at a second. >> why do you say that sideways is reassuring here? >> because i think many investors are still sitting with cash on the sidelines and the

sideways market has reassured many individual investors putting money in stocks and bonds so the rotation is out of cash and bonds. >> you've seen that firsthand? >> need time to digest the new highs. >> people are moving out of cash and saying we need to be invested and i think the sideways has actually comforted people and the low volatility so what we're seeing is more investor confidence and that's good news. >> ken, do you think there will be a meltup after the election and if so why? >> i think the dark clouds on the horizon is when the fed starts raising interest rates and all the emerging markets out there relying on free money start to unwind and their economies start to go badly. that's going to roll all the way around the planet and hit us back right where we don't want it to. >> so that's what you think the trigger of a bear market would be? >> wow. >> very potentially. but you know bear markets are trigger by something we don't know about and didn't see until after the fact and we go, duh, no kidding, sub prime.

october of 2007, ben bernanke was telling us sub prime is not a problem. don't worry about it and then afterwards we find out, oh, my gosh, it's a huge issue so bear markets -- >> that's why you stay invested. >> you see a real after, that ken? >> after what? >> after that sort of apocalyptic event, my word, not yours. >> of course. eventually the bear market ends and then the market rebounds and creates an amazing buying opportunity. >> come on. armageddon is not an investment policy. you know what? arm gotten is not an investment policy. it's not an investment strategy. look, that's not the way to play this market. this market right now is all about earnings. companies are making money. as long as they continue to make money, this market will go up. >> dur see the gdp numbers. >> i disagree with that because, you know, banks were making tons of money in 2007 before the collapse came. i wouldn't rely on earnings as a guide that everything is fine.

there's an underlying -- >> earnings are going to increase this year because we actually saw them go down in the first quarter. >> they were down in the first quarter, and they will increase and currently the pickup in growth in the u.s. but also the synchronized global rebound where we're seeing economies in the rest of the world pick up. that's actually good news. >> bingo, there you go. >> as well as earnings in the rest of the world. >> 60% of the s&p are coming overseas. >> we'll leave it there for now. thanks, everybody. good to see you all. wow. tyler, we've got about 45 minutes to go here to the close. the dow, all three indexes positive and the s&p 500 edging even further to that 1927 mark which i believe if we close here would be a new record for us. >> and we've got a big lineup in the remaining part of the "closing bell" today. you won't see it anywhere else on tv today. cantor fitzgerald and bgc partners ceo howard lutnick up next. wait until you hear what he says about the economy and the economy and if the fed can unwind all the stimulus without causing a major disruption for investors like you.

>> now, the economy is a worry for morgan stanley's adam parker. find out what he's seeing that makes him less bullish now than just a few months ago. >> plus is luxury retail hitting fast times or potentially hitting an ice patch? and where's growth these days? gucci's ceo stops by the new york stock exchange for a rare interview. don't miss our exclusive discussion with him coming up. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ]

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all right. let take a look at markets right now. a little bit shy of an all-time high at 16,736 on the dow industrials. nasdaq up about a third of a percent at 4249 and s&p at 1927. that was a good year. 1927, up three point, a little more than 1/10 of 1%. kell? >> i'll take your word for it. dominic chu will run through it. >> >> reporter: let's start off with a look at smith and nephew up more than 13% in today's trade. bloomberg news is reporting the medical device-maker is getting a possible bid or possible

interest from medtronic looking at a possible takeover for this company. medtronic is also spiking up about 4% on those reports. shares of chinese mobile internet and securities software company nq mobile are surging. you can see session highs up 38%, that's after the company said this a review of the company by independent committee found no evidence of fraud. others have been contending the company is a massive fraud. wall green shares hitting a record high after may sales topped analyst estimates. may sales were up 6% and wall green's at a record high and luxury-wise, coach, one of the worst performers in the s&p 500, the luxury goods company is downgraded or cutting it due to lackluster sales. some interesting moves in today's trade. kell, back over to you,fies. >> medtronic ceo omar ishrak

will be on "closing bell" tomorrow so don't miss it tomorrow exclusively on "closing bell." >> cnbc today is live from the sandra o'neill broker exchange where ceos from all the major exchanges and discount brokers are gathering to talk about what's really going on in the markets today, and joining us now in an exclusive interview is howard lutnick, chairman and ceo as well as chairman and ceo of cantor fitzgerald with our very own bob pisani. >> the discussion here with all of the brokerage firms and the ceos that runt exchanges is what's going on with the trading right now? why have we suddenly seen a drop in trading volumes, not just stocks, but bonds and 4x and what's with the low interest rates? what's that trying to tell the market? is there a consensus amongst ceos what this is telling us? >> low interest rates are just boring for financial markets. there's no two ways about it. i mean, i have a big -- i'm at a

bank and i have a big fixed income and selling coca-cola bonds, grab your pillow, who cares, you won't really make money and low interest rate, and the interest rates are being crushed down by the government and its quantitative easing, keeps buying bondsp and putting them under their pillow so low interest rates for a long period of time make volumes slow. good for prices of equity and bad for volume of equity. >> part of the problem is the federal reserve own policy keeping the rates low, obviously, but isn't it also the uncertainty about the economy. people have been lasting the fact that the firms aren't making that much money. a good first quarter but none of the exchanges or brokerage firms are doing very well in the second quarter because the volumes have dropped. >> i think it's simpler. no uncertainty about the market. low interest rates means the economy is weak. it's the same thing if this economy was booming, we'd have interest rates. you can't have interest rates at nil unless the economy is weak

so the fed is yelling it from the highest platform weak economy, not much going on keeping rates low. >> great news for the real estate business. you have a real estate and commercial arm. you just made some acquisitions, that's great news low rates for the real estate business. now is -- how is commercial real estate doing? >> we had this view interest rates would be really low so it's going to make it tough for the financial service business so we bought newmark and grub and ellis and now buying cornish and carey, the best guy in silicon valley and our business has been booming. our brokers, their revenues were up 47 last quarter, first quarter compared to last year. profits up few times and stocks up near the 52-week high. low interest rates for the future makes for a great real estate business which is great for the stock and dividend which is now 7%. >> real estate as a hedge. >> i want to bring in my colleagues, kell and tyler. take it away.

>> thank you so much for joining us and i love what you just said because there's a colleague, brian reynolds over at rosenblatt securities who says we're in a bigger badder credit boom and commercial real estate may be the next bubble and everything you've just said is consistent with this playing out. why shouldn't we think over the next year or two we see the trends in today's market amplified and exaggerated to some extent relative to even what we're witnessing today. >> well, i think that's fair. look, very low interest rates for a long period of time are going to push people into making certain decisions. equities will do well. what am i going to do, keep my money on the sidelines. think about it, my company has $700 million in cash. we're making 20 basis points so you're absolutely right. i think real estate is going to keep running. >> what i mean, howard, isn't this to some extent reflected in the psychology the way that everybody hates this because they feel like we've been through this before. we've seen this dance before. we know how it ends, and it doesn't end well.

>> well, look, the people who -- you know, the last buyer never ends well but in the world we're in today there's not really a clip. the concept of people talking about, oh, it's going to go to armagedd armageddon. if the fed starts raising interest rates, what do they raise them to, 3/4 to 1%, that won't knock real estate off a bubble, years, maybe a decade before interest rates start to change the fundamental values of real estate so i think we're in a fundamentally positive world for real estate, art, art will go up, all collectibles will go up and stocks will keep rising. cheap money means people will buy assets, and they will keep going so i don't think we're at end of this. i think we're at beginning of a five-year run. >> just to show you about his theory here. when our guests were on in the earlier segment and he was saying be aware of the upcoming bear market, you said there's no way that's going to happen. interest rates is so low, what's

going to knock us off. if interest rates go to half a percent, will they push us off? three years ago if i said interest rates were half a percent, that's a joke. how about ten years ago, interest rates were 1%, you would say this is a gift. too low interest rates makes for high value assets. stocks have a huge platform base beneath them, they are going to do better. >> howard, low volatility, low volumes in the marketplace. how much, if at all, do you think individual investors' skepticism about the fairness of the markets, sort of encapsulated in the book of michael lewis has affected volumes, volatility and the -- and the desire of individual investors to get in and -- and be a part of the markets. >> yeah, i don't buy that. i don't buy that at all, and -- and i've not met the western who gives a hoot about high frequency trading. i think michael lewis is awesome that he's gotten all these people to talk about something that really doesn't affect real people. i think low volatility is

because the world is relatively boring. i mean, we know the economy is kind of boring. we know interest rates are kind of boring so i have two choices, either put risk on or take it off so people are still investing in the internet companies. uber valuing in at $17 billion because people still think, you know what, i'll take my shot for the big leagues. people aren't afraid of the fixing of the market or that kind of stuff. what they are trying to find is the kind of stuff that will make them money. >> the world may be boring, but you never are. howard lutnick, always a pleasure to see you. >> very nice to see him. we've got about 35 minutes before the closing bell. the dow is up nine points at 16,730, s&p higher by 2.5 and the nasdaq higher by 14. >> could be a new closing high for that broad index. much more ahead on the markets, plus "shark tank's" kevin o'leary sounding the alarm here on "closing bell" yesterday. >> i don't care whether you pay $200 million for your home or

$200,000 for it, this is going to be a crappy investment for the next five to ten years. >> which i love because you just heard from howard lutnick the other side of the case. is it so much for the american dream? kevin will rejoin us to tell us more and larry kudlow will weigh in. this could be a combustible combo. >> and from luxury goods, gucci at top of that heap. coming up gucci's ceo gives us a rare interview on luxury shoppers and where in the world they are flashing those bundles of cash these days.

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welcome back. "shark tank's" kevin o'leary made a very bearish call on housing yesterday on this program. take a listen. >> i don't care when you paid 200 million or $200,000 for your home, this will be a kraep investment for the next five to ten years. no capital appreciation on this asset. rising rates are going to kill real estate. rent. do not buy any of this stuff. >> kevin, use those technical terms about -- about investments, back to make his case further today, and he's joined by our own larry kudlow who has a slightly different take on this issue. gentlemen, welcome to both of you. you know, you just heard, i hope, kevin, mr. lutnick talking about how he thinks basically the -- the runway is clear for takeoff, particularly for commercial real estate. why does he have the scenario

wrong? >> first of all, have you to take his premise. he's built his case on the idea that interest rates are not going up in our lifetimes, and i love it when everybody is consistent on the same message because i'm actually a vampire. i've been around for 120 years. i've seen this happen over and over and over again. when you get complacency on something as core as interest rates, you have to know with certainty that change is about to happen. i am convinced that at some point later this year we'll see the first 25-basis point rise. it will rip through the infrastructure of utilities and reits and real estate. do you not have real estate asset values increasing in a rise being rate investment. that never works long term. that's why it's a very bad idea and that's just the beginning of the damage. >> larry, raising interest rates, by the way, is not the same as having a rising rate environment. >> that's right. >> in other words, the fed could do something like that and not actually see much move along the entire curve. >> look, interest rates are going to go up at some point

next year or two, but they will be miniscule interest rates. whether i like that or not, yellen, bernanke, you know, bernanke with his 400,000 dinners with the hedge fund guys said you'll have below normal, below 4% interest rates on the short end of the curve so i don't think interest rates will be a big factor. i think this is a pretty good time to buy homes, buy stocks as well. still low interest rate, tax advantages, a lot of leverage and a lot of product out there and it depends where. can i just say this, when you talk about housing, it's neighborhood, neighborhood, it's location, location. in denver home prices are booming. in dallas they are setting record highs. if you want to go to vegas you can get a house real cheap. >> here's the point. the fundamental disagreement between the two of you over housing comes down to -- this is the central debate, whether or

not you think interest rates are going up. larry, you say no. >> they are going up a little. >> larry, let me take another crack at it. let's just take a case study. >> now at true fed tightening. they will go up a little but not a real fed tightening. i'm sorry, kevin, go ahead. >> all right. leave the fed with a 235-basis point move in the next year, let's just call it that and take a couple in denver, a city you sound you like, 250,000 home and $50,000 equity down. getting a loan much harder, so you need equity and now you're going $200,000 in debt and will service it at somewhere between 3% and 4% and the transaction fees alone will be somewhere around 5% by the time you buy and sell all the things you need, pay the tax. you have to guess that that house is going to go up 6% or better every year you own it to just cover the cost of carrying the debt and all the transactional costs getting into it, and here's where the rubber meets the road, larry, i don't think that house is going to be

worth any more than $250,000 five years from now. would you have been better off going into the market, 50% bonds, 50% stocks with more liquidity. >> i agree with you and i also agree with you on this. i ran the numbers. actually my friend john riding ran the numbers from rdq economics. over the long run, 30, 40 years, stocks outperform median home prices by a lot, so actually, you know, you've got a point there. i think right now with rock bottom interest rates and all the various tax and interest rate writeoffs, by the way, those tax advantages and interest rate writeoffs in the next five or six years are probably going to go away with tax reform, so now is a good time to cash in on that. closing costs, depends where you r.6% a year. yeah, look, again, you've got to tell me where. i don't want to -- i already own a home in connecticut, and the

sales -- the property tax is too high. the property tax is too high. >> we were talking about this yesterday, kevin. starting with property taxes and from there. >> property taxes -- connecticut and new york, new jersey have the highest property taxes. >> under my strategy, i just don't want young people to punch themselves into debt and pay property taxes and put themselves at risk if their asset will never go up. larry, i forbid you to tell anybody to ever buy a house ever again. >> laurie, let me -- >> let me ask you a quick question. >> would you tell young people never to buy a home before we have to go? >> i wouldn't tell young people never to do anything. >> i would. >> if it's not young people, he's a vampire, been around 125

years. >> that's young for a vampire. >> present redoing fabulous and that's a good opportunity to buy. >> kevin, do you own your home now and if you were buying a home and a nice vacation place in naples, florida, would you buy or rent? >> i own multiple homes, i'm not buying anymore. in fact, i'm going to be selling a few of them because i think they are at a high and on top of that i would rent in naples. >> that's a good trade, but, again, keep this in mind. young people and kevin, there's no capital gains on the profit from the sale of the house, and that's -- >> larry, don't lull them into a sense of security. >> got to go. >> you are hurting young people right now. shame on >> you buy stocks, buy real estate. things are better than you think and will be for the next 10, 11 years. >> don't buy real estee. don't to it. >> great to see you both. getting bruised and battered around here. the dow up 10 and s&p 500 in

record territory and the nasdaq adding 16. >> nothing people gets people talking more than housing. gucci, if it's not the fed. gucci ceo up next. the health. luxury goods market, consumers. are they spending money like they were back in the 1980s? >> and later on the show, the co-founders of juicy couture tell me how they built a global multi-million dollar empire starting with just $200. it's a great story. >> plus, yet another obamacare mess. this time it involves more than 2 million of the 8 million who signed up. we will tell you what it is all about just ahead. ♪ ♪ drivers want to go further with their electrical vehicles. but you can't take a trip from lisbon to stockholm if you can't plan and re-charge along the way. the european commission is using cloud to make this possible. creating a single charging and billing network across 28 countries. so drivers can travel as far as they want to go and when they want to go.

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all right. you see the dow industrials at 16,736, up 14 points. 1927 is the number basically just flat right there for the s&p 500, up 3.5 points. the nasdaq composite at 4251 or 17 points higher, and for from market highs to high-end retail, goochy is a company synonymous for luxury. >> yes, and for more on how the luxury retail market is performing in this economy, let's bring in gucci show

patricia dimarco. >> thanks for having me. >> this is a critical moment for luxury, it seems. there are worries about china slowing when that been such a big part of the luxury buy lately. >> looks like the u.s. economy has a hollowing out effect that's going on. what is the future of luxury and the luxury buyer in this economy? >> well, you see, i've been in this industry for 25 years so i've seen a lot of highs and a few lows and i think there's now a correlation between the economic trends and the trend of the industry itself, but i'm pretty much confident long term. it is true that there's been a slowdown in china. there's been a reduction overall on a worldwide basis of the purchasing coming from the chinese customer, but i believe also that that is something that won't last forever. as far as the u.s., well, yes,

there's been some slowdown, but this is very point in the market. it accounts for over 30% of the worldwide luxury market. it's very young market and a market that will right now not enjoying the best of our times but i'm absolutely confident about the future. >> we have a lot of focus on europe over the next 24 hours and what the central bankers there may or may not do to stimulate the economy there. how do you see europe right there, the consumers there, italy, spain, other countries? has the luxury market been badly, badly hit there or not so badly? >> it's -- it's been very difficult, and -- and i would say that that is pretty much the picture for the past couple of years. you have to consider that europe

is partially, let say, 50% of the market is fundamentally local, and 50% is very much dependant on tourists, so the more you have tourists coming into europe, the better, and that wasn't actually the case, especially in the past few month, and i would say in the past couple of years and then i don't have to tell you how the economy has been in most of the countries, often about italy or spain or let alone greece, and all that has not definitely helped this industry, and i would say all industries. >> that's a great point. we've seen though this persistence of even as the central bank's lowest rate, still expensive to borrow in parts of europe for a lot of countries. talk about different parts of the world where you guys are looking to maybe expand. people might be surprised to know how well russia is holding up in spitd of everything that's happened over there. can that continue? >> well, talking about russia,

for example, we're talking over, you know, for some time. gucci had part of its business at wholesale, and we're currently taking over all the business, and -- and it's been somehow difficult specifically because of the ukraine crisis and russia is a fundamental market and not just for the market itself but because russians are very important component of the tourists all over europe. >> and i'm curious, as you change that model, you mentioned in russia, but how generally speaking will the portion of your sales look between stores, e-commerce in the next couple of years? there's a revolution, it seems, going on with the help of technology and the way people are shopping and buying and experiencing brands? >> overall right now we are close to 78% in terms of retail sales versus wholesale but our goal is actually to increase

the -- the share of our own directly overweighted stores, and as far as e-commerce goals, our mid-term goal is to reach at least 5% of the business. as far as the u.s., we are actually over the 10%. we've been the first brand actually on e-commerce. in this country actually more than 12 years ago. and we are actually invested more and more on e-commerce than i would say overall in the digital world and because our intention is to get one single experience to our customer, no matter what is the attach point. >> and you have cosmetics coming and doing a lot on the philanthropy front here in new york this week as well. as the parent company has done some reorganization, i notice that gucci, you're reporting directly up where some other

parts are organized around someone in the middle there. does this mean that it's all part of gucci potentially branching out and becoming its own publicly traded company? >> that's a question you should ask my boss and my shareholder. i really don't know. i don't think so. i think that the group has been organized as a group in the past 18 months and i think that that will be the case for the long term. >> so good to see you down here. >> it was a pleasure. >> congratulations. >> thank you. >> 15 minutes to go, tyler, until the closing bell. let's take a look at the dow at 16, almost at that record high territory. just about seven points shy right now. the s&p 500 meantime adding almost four here. 1928 is that level, as you can see. >> are emerging markets right for activist investors, someone who makes a living being an activist investor in those markets will join us later what she expects from the likes of china and latin america. >> but up next, stocks have been shining bright of late, and

we'll tell you which company could make your portfolio a little sunnier.

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. welcome back, here's where we stand on the markets with 13 minutes to go. just chatting with ben willis. talking about the volume, tyler, even as we're at new highs in prices. you heard howard lutnick mention it to bob pisani as well. still 15% below average. we could be closing today, if the s&p is here at 1927, at a new high for that indecks. >> stocks have been one of this year's hottest sectors so far, jackie deangelis highlights the names you need to know with the biggest potential. jackie. >> reporter: hey, good afternoon, guys. no shortage of sun here in the mo javy desert. as a matter of fact, the panels that you're seeing at the solar star project, they are flat right now because they are at their maximum capacity soaking in all the rays, but let's talk about the solar stocks because a lot of investors are out there wondering if these have run a little bit too fast as a group and some investors are taking a little bit of a pause here. now the analysts scale it all depends on where the companies are in the value chain.

solar panel prices have dropped dramatically, squeezing margins, but the energy analyst at raymond james, he likes companies that provide services to end users and the specialty component makers as well. advanced energy industries is one of the names that is down actually 15% year to date. it makes solar invertors. that's what connects the panels to the grud. this is a high-margin business. also moving today, first solar and sun power on news of stricter imports on solar products coming in from china, so the u.s. name getting a boost there. there's also solar city. if you've seen a 30% correction from its recent highs, a big player in the residential solar market. that's why analysts like that name and the industry, guys, expected to grow at a pretty fast pace, a 20% clip, as a matter of fact. so there are buys out there according to the analysts. you just have to know where to look. back to you. >> all right, jackie, great to see you. stay cool out there as well. we've got about 11 minutes to go here, tyler until the close. >> that's and the dow up 13

points at 16,735, the s&p, as you pointed out a moment ago, would be in record closing territory. >> all right. we'll see if we hit that mark as we round into the closing bell. just when you thought obamacare errors were over, over 2 million may have data discrepancies of those who signed up. what does that mean for 2 million people? a full report coming up. >> and we'll go to washington on the heels of the release of this video by the taliban of army sergeant bowe burghardtal in afghanistan and the furor now raging over this controversial prisoner exchange.

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all right. let's look at the markets. the industrials at 16,738, 16,743.36 would be a record close for the dow. nasdaq up at 4251, up 17 points. the s&p 500 up 3 and change at 1928. that puts it in record close territory. ryan von cran kite as well as larry mcdonald. good to have you here. larry, let me start with you. do you think we've hit the bottom in yields, fanned so, why? >> well, the short term, tyler,

yes. i think, as i said about a week ago on the show, we had a capitulation selloff, guess a short covering rally you would call it, bottom and yields last week and i think for the near term number one or two very large players in this trade were taken out, and i think the short-term bottom is in for yields. >> brian, i know you're going to come back as will larry and join us after a short break, but let me get your thoughts on whether you think the stock market is in a sweet spot right now. you've got a moderately growing economy apparently. you've got virtually no inflation, and interest rates that are low may be going to rise a little bit but not all that much. do you have any problems with buying stocks at these prices? >> we don't have a problem buying stocks here but we're very selective. a lot of complacency and hitting new highs in the s&p every day. underneath the covers though a lot of turmoil has taken place in the small and mid--cap areas. finding stocks to buy there. always a market that doesn't

look very attractive to us but if you pick a stock carefully you'll find attractive names. >> all right, gentlemen, we'll take a quick break and will come right back with you on the closing countdown as we wrap up the first hour of "closing bell," and after the bell morgan stanley's adam parker will tell us why the economy has him less bullish these days compared with just a few months ago. should we all be worried now, too? he's smiling now. you're watching cnbc, first in business worldwide. friday night, buddy.

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all right. we go to closing countdown now and let's take a look at where the markets stand right now. the dow is at 16,738, about 7 points, 6 points shy of an all-time closing high. s&p 500 at 1928. 1924.97 was the all-time closing high there, so we might get a record on the s&p. time for the closing countdown and back on the floor is bryant von convite and larry mcdonald. gentlemen, welcome back. where do you stand on equities as opposed to bonds? just made the case on bonds? >> well, the s&p as a whole is extremely overextended, not just the amount of days above the 200-day moving average, upwards of 600 days but just at an overbought level, the s&p is extremely overbought. the other disturbing thing is that credit is starting to underperform so high yield kret credit, for example, started to underperform equities and that's

a warning sign so you've seen a pullback in the hyg and some of the jnk, high-yield etfs. i would say that's a cautious warning sign. >> brian, i know you guys are really more stock pickers than anything else, but do you quarrel with larry's characterization of the s&p as highly overvalued or overpriced? >> i hate to say anything is highly over or undervalued. i would say the s&p is more expensive than we're seeing in the small and mid-cap space. the dispersion is well over 800 basis points, a large gap. we'd like to focus more on the small cap and mid-cap than large-cap today. >> any particular companies that come to mind as you say that, larry? excuse me, bryant. >> we like moulson coors and regal "big l" oite, good cash flow streams, strong balance sheets available and great value to shareholders so looking for companies with the great stream, strong balance sheets and able

to control their own destiny despite what's around them. >> appreciate your time and insights as we wrap it up for the first hour of "closing bell" with the dow at 16,737. looks like no record high close today there, but, yes, for the s&p 500 at 1927.98. that will wrap it up for my part of "closing bell." it's been a great hour spending with you, kelly. over to you. >> thank you, tyler. there it is, we know this graphic well by now. welcome to "closing bell." going out here with with the s&p 500 adding just enough to put it in record high territory again, add begun 3.5 points at the close to 1927. that trumps the prior closing high of 1926 that we were looking at before, and meanwhile, the nasdaq putting in a decent performance today.

12 points, 17 points respectively. i don't know if we can say decent but it's positive. joining me is columnist and private investor lynn newman, sarah eisen and cnbc contributor and "fast money" trader steve grasso will join us just off the floor in a movement herb, what do you make of these markets? >> i make -- this explains why as i start going around and visiting funds in new york, they say the same thing over and over again, they are starting to pay attention to shorts, and i think that's what's fascinating. that's the change and they see these numbers, and you can see why, because i think people see the stimulus -- what happens when you don't have the stimulus you did and yet you still have the markets going up, and now i think you're going to start to see people try to position themselves and i do think that's what they are doing? >> lynn, what are you doing in this market? >> i'm just trying to build. for me i buy companies and i have to build value.

you know, the markets have taken their own sort of trajectory with liquidity and where we were in stocks, you know, we used it to ride it and my life is really about building value by creating products and driving things and using technology and design to innovate and pay companies forward. >> look, i'll say this. a lot of people in private equities have been complaining with valuations where they are. they can't find stuff with a good value to buy. similar to complaints we hear from stock investors. is that the case? do you remember look around and try to find places to put capital to work and find everything looks too rich around? >> i think it's a tough time to buy because there's two things going on. multiples are going up. the stocks is expensive and banks are looking for lower leverage so even when you buy it's pretty much 1-1 leverage right now so i think it's going to be a tougher time to buy and a much better time for private equity to exit.

>> steve grasso joins us off the floor. you know, this whole discussion about valuations here is going to get important again because it goes back to the old, you know, maybe there's not a lot of trading activity and maybe it's because of where we are. it's not that stretch on a historical basis, are we? >> put it this way. we're at all-time highs so i guess it's stretched on a historical basis and all relative. >> relative to earnings, i mean. >> well, revenues for me, i think that revenues in certain spots have really started to peter out a little bit and you can see that financial engineering versus real revenue growth, and i think that's going to be a question going forward, but as for as buying the market, what do you do with it here? i don't think you get in right here. have you to wait. you get that pre-ecb sort of run-up or covering and then the npf on friday so you have a lot of things that can be a catalyst to going higher but i definitely went to almost half cash, went a little bit early, but i would rather risk that because i think

the risk is definitely to the downside. >> sounds like some of the guys herb has been talking to. >> that confirms exactly what i'm hearing as people go around. people were somewhat confused. look what happened. people were in the momentum stocks and got burned going into march and things fell apart and people were trying to figure out what do we do and stocks come back and slowly say maybe i shouldn't have sold in the first place but when rational minds get around this they realize things did go too much too fast. have you to start separating the companies that deserve to have the valuations from those that were just brought up because of the overall momentum. >> also it is kind of interesting though, kelly, that you wind up getting this rotation as herb was just saying out of these high flyers. you wind up getting the row interrogates into that old tech, and then at a certain point old tech becomes a little bit bloated so no one thinks that value could actually be overvalued when you're looking at a sysco or looking at an ibm, but when that rotation happens, that's going to hurt a lot more

people than the first rotation. >> i think the real key to what's going on in the equity market is really the bond market, kelly. we haven't talked about the bond market. >> the ten-year went below 2.5%. >> i did come on the show a few months ago and said the ten-year was never going to go below 2.5% which, of course, it proceeded to do, but i think that the -- i believe that the keys to the equity market over the next six months is what happens in the bond market, and if the bond market, if the yields continue to rise, stocks could very well face a correction because the economy is going to go through a transition. >> okay. let me put it this way. are you back in the tbt. that's something -- i shorted the treasuries about three years ago. i didn't touch my position. >> i'm having memories of 2011. >> and then when the -- when the treasury starts falling below 250 i was like, gosh this, trade has got to happen some day and i went back into it with a much bigger position. we'll see how things play out.

>> the only problem is, kelly, that correction that we've all been waiting for, including myself, to keep some dry powder. that correction has usually lasted five to seven days so you really have to be quick or else you wind up starting -- if you look at the s&p over the last year or so, we've had, you know -- >> hang on. i want to get sarah here. sounds like a flash correction. >> we haven't talked about the economic data which was actually pretty good. >> does economic data matter? >> to the bond market, you saw reaction-year-old at 2.6, sounds remarkably low but actually a three-week high at least and starting to climb up. you've had services with a bigger beat. you saw things like the fed beige book which is anecdotes from the 12 federal reserve districts showing expansion pretty much across the board in terms of economic activity, consumer spending, manufacturing. things are better and a lot of people are looking for pretty solid jobs report on friday. the fundamental drivers right now, central banks and you've got a big ecb move tomorrow. >> is this going --

>> this is going to be the one where something happens. every month i'm hearing that. >> can i ask lynn whether your companies are actually hiring people right now? what is going on with the actual companies? are people hireing? >> i'm so glad you asked that question because the reality is that things are not so easy out there. i mean, revenues really aren't increasing. consumer spending is really not great, and the jobs market is terrible. i mean, i am hiring, but that's because i'm always looking to replace people. >> the nfib survey saw one of the higher levels of willingness to hire respondents that it's had in months, so -- >> let's talk about what's really happening. 26 million people lost their job in 2008. we've not done -- you need 225,000 to 250,000 jobs to keep up with the population. have we done that every month

over the last five years? >> i'm not sure that number is that high anymore. >> if you ever look proforma at the unemployment rate for the participation rate or the discouraged worker, and i run a big automotive company out of the world and out of detroit, lost 40% of the supply base in 2009. a lot of those people are still unemployed. so we can all talk about what sounds good. we can drive markets, es. >> especially in the auto sector and that's the one everyone is jumping up and down about how strong these sales numbers are. >> look, the automotive market in this country has gotten back after six years to 16 million cars, and we're all rejoicing over it, but think about the fact that it's six years later and gdp in the first quarter was negative 1%, okay? so you really -- you know, we are being driven by liquidity. where are you going to put your money but in the equity markets right now, and we don't look at the shadow economy. we look at the major markets

reporting but we don't look at the shadow economy and what's happening and whether there's lending for those companies and what's really happening in the real world. >> on a sort of related point, steve grasso, i don't know if you saw howard lutnick's remarks last hour that he thinks we'll see a five-year bull market more or less after just by the way having had one. we're talking about a decade. we're talking, right, about one of the longest expansions post-war in this country that we've had? >> you know, obviously it's a fool's game to think whether we're going higher or lower on a day-to-day basis, but if you look at us historically, right, kelly, the market goes up, market goes up roughly 10% annually and iffy extend that over a historic period, so i wouldn't discount it. i wouldn't say he's wrong, but we are due for a correction. we are due for a 10% correction, so he's talking about a longer time period so i wouldn't disagree with him. >> okay.

>> i think the pullbacks are coming in and you have to keep a little bit of powder dry or else it's a little ignorant. >> so long as they haven't gone extinct. >> be sure to stick around and catch more of steve grasso coming up with the "fast money" crew here at 5:00. they will be speaking exclusively with the ceo of dexkom who will go head to head with the new app, a health kit they just unveiled at the developer's conference. don't miss a moment of that. the story everyone is talking about, the prisoner swap that led to the release of sergeant bowe bergdahl and continuing to draw fire. here's the video of actual handover and steve handlesman joins us from washington with the latest. hi again, steve. >> reporter: thanks, this is shining a spotlight from the perspective of the white house here in washington, an up welcome spotlight on what's become a full-blown crisis for the obama straight but everyone acknowledges when you look at this video shot and distributed by the taliban there's bowe bergdahl not looking sharp.

the pentagon said that this entire handoff, you can see the blackhawks there in the sky over this remote area, presumably on the afghan-pakistan border, that this whole thing was core yeahed, each and every move pre-planned so there would be trust and it wouldn't be a disaster, this kind of handoff obviously could have easily turned into a fire fight so the red -- the white flag choreographed, and as the special forces guys approached the taliban, the specific handshakes, you can see one from left hand to right hand, choreographed, said the pentagon, bowe bergdahl before the handshake had already been given, kind of a mini pat-down and as he goes there to the blackhawk helicopter he will get from the special forces experts a full pat-down, not because, say the experts, he's not trusted, but they wanted to make sure he wasn't hooked up with some kind of a bomb that would blow that helicopter out of the sky, but, kelly, again, this is

just along with the video released a few days ago of those taliban, senior taliban, the five returning and being hailed as heros in qatar, this is shining a spotlight on this obama administration decision which down at the white house we're told they had no idea would become so controversial. >> and not the first time either, steve. thank you for now. let's send it over to dock nick chu, a quick market flash. dom? >> a couple of interesting news developments here. first of all, pvh corp, which the parent company of a lot of brands like the north face included, it missed estimates and cut its full-year guidance. pvh's earnings came in at $1.47, adjusted and 1.49 was the estimate so a couple cents shy and they cut its full year earnings per share outlook to 7.30 to 7.40 versus estimates for 7.50. the first-quarter earnings also coming in just a shade light. 1.96 billion versus 1.98

billion. pvh corp, you can see down about 5% in the trade so far, and, remember, stay tuned to "mad money" tonight because jim cramer will have manny turico, the manager on his show at 6:00 p.m. eastern and also what's happening with amazon.com. they will hold a product launch on june 18 and what you're seeing there is a screen shot from amazon's website, and what looks like the profile of some device. it could be a tablet. it could be a phone. of course, there's been a lot of speculation on this, but really this is an interesting development here for a company that has tried to put out devices to compete with all these other device-makers out there. amazon showing just a tease, if you will, of some device that could be, again, speculation, some kind of a new tablet or perhaps some kind, kelly, of a new phone, but june 18 is that product launch for amazon.com. more details as they become available. >> all right, dom, thank you for now. we's been one of the bigger

bulls on wall street and why is he getting more nervous about this market and preparing for friday's major jobs report and a new plan to create jobs by bringing manufacturing back from overseas. lynn tilton will lay that out for us next. talk about the american dream. here from the founders of juicy couture. they started a fashion empire with $200. it's a great american story. you're watching cnbc, first in business worldwide. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution,

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welcome back. investors are gearing up for friday's big jobs report. saw smaller than expected numbers from the adp just this morning. u.s. businesses adding about 179,000 jobs to their payrolls. that short. estimated 210,000 on the street. still, want to turn to our panel about the outlook for jobs and lynn tilton in particular because this is a big issue for you, lynn. specifically bringing jobs back to this country and trying to wake us up to what the reality is across much of the country. >> i think there's a manufacturing revolution going on with many people worried about it's t will reduce the jobs in the country. as we move more towards sensors

and chips and autonomous cars and things that need fewer people it will reduce jobs and at the same time it allows you to make things where you are. >> fewer people to operate but don't these require a lot of people in order to produce the technology in the first place. >> technology doesn't take the same amount of people it does data manufacturing line. the reason i own so many industrial companies is because i wanted to save jobs in this country so you go to aviation and aerospace and industrial manufacturing, but the reality is there's a lot of stuff that we do overseas that we no longer need to do overseas because of the way we can make it here in a very efficient manner which also allows for greater innovation because you don't have the lead times in terms of making things. if we had policy that encouraged investment in this country there's a lot of stuff that we make overseas and ship back here to sell that we could make locally, that would actually put people back to work in this country. >> is this a corporate tax reform thing where you've got all these companies basically keeping cash overseas,

developing and reinvesting over seas because it's too costly to re-domicile. >> it's not just corporate taxes, but that's one thing, but it's also policy. there's no encouragement to bring things back, to build manufacturing facilities, to put people back to work, to invest in this country, not in infrastructure, not in manufacturing. if you want to get people to do it, have you to have policy that encourages people to do that. >> i think the nature of manufacturing has changed dramatically over the last 40 or 50 years. take a company like boeing. boeing is considered a manufacturer, but they are really an outsorcerer of logistics, distributor and they have manufacturing operations all over the world, and there's no way that boeing is going to bring more jobs back to the u.s. just because they are trying to sell more planes overseas so i think it depends on the sector of manufacturing. >> what i just said is make it where you sell it. i said there's a lot of things we make overseas, consumer products, that we bring back here to sell in the retailers, you absolutely should

manufacture where you sell. boeing has to make their planes where they sell it. you know, we make automobiles. >> lynn, michael kors is not going to suddenly start making their shirts and purses in the united states. they can't afford to do that. the margins would get crushed. >> apples can make their iphones in the united states. >> what would happen to the prices? what would happen to the margins? >> how much labor do you think there is in an iphone? you have to really actually go to the data. when you look at what -- in an iphone there's probably $6 of labor, you know. i make the surface mount and surface mount machines that are used to make the circuit board but you can say that and it's not accurate. what's the difference in a labor dollar at foxcom than at a machine? the reality is i do this for a living, all due respect. have 120,000 employees who make things for a limping i make things in china and make things in brazil and in paris and

actually makes thing did, you're not a public company. >> a public company versus a private company. you're concerned about your cash flow and they are concerned about their stock prices. >> absolutely, so what i'm saying to you is right now we don't have anything that incents people to do anything long term and look at the stock price of a apparel maker going down, wait to see what retail numbers look like. there's something wrong. there's a disconnect with reality. >> profit is the point for the incentive, i don't understand why you're saying is focusing on profit is wrong and bad or that you're doing it in a way that's good and other people should find a way to do it better and emphasize on doing it here. >> i'm not saying that people are going to give up profit. i'm saying that actually if we're using robotics and you're using modern day manufacturing, designing in 3-d, testing in 3-d, that there are ways to do things different than we did in

the past, there's an evolution. change section pensive, but there are things we can do here and the way we make things is going to completely change. >> what would a couple of those things be? >> i'll be printing a lot of my helicopters going forward. i won't make it the same way. i won't mill parts. i'm going to print parts. i can have a -- a manufacturing facility filled with 503-d printers that can even print titanium and print things, so things are going to change. as they are changing, bringing things and making it where you sell it will make sense. >> what about where you sell it? what are you seeing in terms of consumer demand, doesn't it come down to the demand picture for companies to start investing and making changes in their businesses like that? >> absolutely. >> for me, most of what i sell, not helicopters, not automobiles, but most of what i sell i sell in this country, and yet so much of what we've made over the years we've made overseas because of pricing, but there are different ways to

manufacture it. i will say one more thing, i think it ends badly for everyone if you have a whole population that is unemployed and at some point you have to think long term about what happens to gdp if you actually end the plague of joblessness. >> great point. >> lynn, thank you. good inside perspective on what's really going on. >> stocks are at or near all-time highs so why is the next guest getting worried about this economy of the economy? morgan stanley's chief investment strategist adam parker will weigh in next. china is underperforming, coming up a look at whether one hedge fund manager thinks china is cheap and whether there's opportunity right now. i got my. it's great for watching game film and drawing up plays. it's got onenote, so i can stay on top of my to-do list, which has been absolutely absurd since the big game. with skype, it's just really easy to stay in touch with the kids i work with.

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welcome back. morgan stanley out with a new and slightly less bullish note saying the slowing economy is a risk to the stock market. here to explain more in a cnbc exclusive is morgan stanley chief u.s. equity strategy adam parker. adam, welcome back. >> thanks, thanks for having me. >> so your price target going into the year was 2014 for the s&p 500. where does it stand today? >> still 2014. we set that december 2nd of last year at our year-end outlook, an 11% upside, more like 5% now, between now and year end so it's kind of tracking there, but i do think there's a big difference between today and a year ago soy think your setup is correct.

>> so what's changed, and i guess the details or the areas where you're more cautious matter if ultimately the price target is still the same? >> yeah, i think this year it is. i think as we look out farther, i just don't know if there's as much upside what. changes this. a year ago, year and a half going we got pretty bullish on the market saying it's a hall pass. good economic news, good for the market and bad economic news it will be good for the markets because you'll have more quantitative easing. >> different phrasing and framing that we just heard. >> good is good and bad is bad. now, that's the difference. that's different from a year ago. now you're tapering, and if we get, you know, a soft patch in ism around assuming they can compute it correctly and in jobs data, right, if you get those things looking soft at all, which has happened four of the last five summers it's hard for me to come on and tell you or tell a client that liquidity is fine. our base case is still things

are improving, still constructive, but i think it's a little bit riskier now because i don't see incremental accommodation as a positive like we did 18 months ago. >> just to back out, you know, for following along through the business cycle then. the markets, whatever you want to call it. what you're saying we're at a point where the risk is at the economic momentum is slowing and the market responds to that, does that mean the expansion is ending, in your view. >> i think all of these cycles are shorter and lower in amplitude so it's not quite as obvious as back when i was forming my investment and you felt like if you were late the cycle would be huge. there's lot of mini cycles, not so much huge ones, so, look, i'm still constructive. i just think the risks are that you have a soft patch and to me the biggest risk is the u.s. economy. i sometimes talk to fixed income people who say to me, hey, adam, the biggest risk to u.s. stocks is a strong u.s. economy because they worry that the fed will

have trouble controlling emotions about the front end. i disagree. i think that's not right, a far bigger risk that we have a soft patch. to me a strong u.s. economy, the market goes much higher. >> good is good and bad is bad. >> that's right. so we're still constructive in here, kelly, so i think it's a little more balanced on risk reward that it was a year ago and that's what you're picking up on my note from last week. >> it's interesting. a lot of the "fast money" guys, a lot of panelists and hedge fund sources that kate kelly talking, to every meeting he's had with guys here in new york, the message is effectively this, we're worried that a correction and less opportunity is in front of us, i just wonder, again, if we haven't learned something and that the correction hasn't come, that there's more firepower and support beneath this market, that perhaps it goes back to a credit boom and maybe interest rates aren't going anywhere, you know what i'm saying, that maybe this is the quote unquote normal hand not deal with how the markets behave.

>> i don't think the market ever goes down 10% or more unless people are really meaningfully afraid of an earnings recession so i'm still constructive so i don't see the probability of an earnings decline is that great. really every question i get, china, hard landing, rate shock, all of this, you know, emerging markets, all of it comes down to, hey, what could introduce volatility into the, estimates? that's what matters, and as long as your base case is mediocre and the fair case isn't that likely i think the market can melt higher and that's basically our call. i just think it's a little bit less upside. >> wait a minute. >> by melt higher, when we've had guys like bill miller on this program, he's legitimately worried about a melt up where you see a bunch of hedge funds, everyone who doesn't get the correction this summer have to pile in the fall and see almost a double-digit ascent into the market at the end of the year, kind of like what we saw last year. that's a melt up. what you're talking about is more of a kind of steady step forward kind of thing.

>> look, we've kind of had that, right? we're up a few percent this year, up a couple of percent in december so i think we're getting there. look, i never think that, you know, the pain trade is higher. i never think that because most people make money in part on assets under management. when they manage more, they make more money so i think the pain trade is always when the market goes lower, and so to me i think the risk/reward is still positive. i wanted to point out this week it's a little more balanced. part of what you're saying and others are saying is can that price-to-earnings ratio for the market expand? the answer is of course it could. i think the base case though, if you get the multiple expansion, what you need is a school teacher curve, not a flatter one, a dream that the ten-year is 3.33 and not a big move in cpi, a dream that the fed won't move the front end for a while, even if the economic news improves. that's possible. >> okay. >> but i think not -- not necessarily strong of an opportunity as it was 12 months

ago. >> all right. we'll see. thank you, adam. >> yeah, great to see you. thanks for all the great questions. >> good to see you. >> 8 million americans who signed up for obamacare and 2 million have discrepancies in applications and more than half of the discrepancies are related to income and that determines who gets subsidies or not. john harwood joins me now from washington with more of that story. what's going on here, john? >> reporter: kelly, this is a situation that is an opportunity for republicans to point out what they cab flaws in the law, but it's not clear how much the data that we've learned today tells us about the success or failure of obamacare. a lot of these numbers are have been out but publicized because of an a.p. report this afternoon. is what they show is when you sign up for obamacare you have to fill out a bunch of information, who you are, where you live, how much money you make, your dependants and that sort of thing that then gets matched against federal databases and if those databases don't all match, it could be the spelling of your name, it could

be a digit in your social security number or it could be comparing the income estimate you gave with what you earned a couple of years ago which is the last they have in the federal database, that then triggers a review by federal officials. about a million cases are cases about the discrepancy between the 2012 tax returns that they had -- that they were being checked against and what you said your income was going to be this year. another 1 million approximately were cases involving integration or citizenship status which could reflect on the kind of verification document that you provided, but what we've seen is most of these cases, when the federal government and contractors helping the government are investigating these, they get resolved favorably and people say there isn't a problem and they have not found fraud yet the that's significant. it's not the case that a very large number of people have been found to have fraudulently applied for obamacare, so this is something to monitor, but

it's not clear whether it tells us all that much about whether the exchanges are going to work or not work. >> certainly more analysis needed. thank you for now, john. john harwood out of washington for us today. we'll talk about a costly mistake this. brand new $10 million yacht sinking as soon as it hit water for the first time. the video that has the web buzzing, but is it heating up our hot list? that's next. also tonight on "mad money," the ceo of skechers telling jim cramer he's trading sneakers for horse shoes triple crown style. >> tell me about how you decided to do the california chrome because it is such an anomaly, and the first reaction is that people say, come on, a horse, but this was a master stroke of publicity. >> why wouldn't you do it? >> because horses don't wear skechers. >> like a billboard in the stadium only this one will be seen by a billion people. >> yeah. i'm scratching my head, too. watch the entire interview with

robert greenberg, the ceo of skechers tonight at 6:00 eastern time on "mad money." passion... your became your business. at&t can help simplify how you manage it. so you can focus on what you love most. when everyone and everything works together, business just sings. appreciate our powerful, easy-to-use platform.o no,thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you just set your start and end price. and let it do its thing. wow, more fan mail. hey ray,my uncle wanted to say thanks for idea hub. oh,well tell him i said you're welcome. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. yea, and these ideas are across the board -- bullish, bearish and neutral.

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that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a 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. welcome back. before the break we mentioned the sinking of a $10 million

yacht. that is rising on the cnbc.com hot list. for that story and the rest of it, here's the site's managing editor, allen wastler. >> pacific northwest and a shipyard there. viral video, got it from youtube. somebody cracked the champagne bottle on it and then the sucker drifts right in and tilts right over and thankfully no one was hurt. no one was injured in the thing but the video is just crazy. since we put it up 25,000 people already checked it out on the site. explained all the ins and outs, people are checking that one out. something a little more serious. we've got apparently a major bet in the options market that apple stock is going to crack $700 by october. our friends at options action wrote up all the details of that bet. >> wow. >> that apple in the headline really draws people, but you know what else draws people into a headline? >> obamacare. >> s-e-x.

>> you put those three letters together in the headline. apparently elon musk, the head of tesla at a shareholders meeting was talking what he might name the third generation model. already has model "s" and molled ed "x" so he's saying maybe model "e" and ford objected to that. ford has long sought the model "e" for its own cars and so they said, tes larks you can't do that which really bummed out elon musk. that's another great story on the hot list for you. >> allen, thank you. >> do for a mold "o" or "a" or "i." >> i think they are going to stay away from "u." they want to sell more cars. >> i like how he took a question from a kid. did you see that? >> i know, i know. interesting as well to see his comments about how some of the developments in cruise control, might be able to get the car on and off the highway and more or

less driving it. >> within a year. >> it could be the case, but he said within a year, i believe. he gave some sort of -- >> that's classic elon musk, putting it a little faster than perhaps it might be. the question is, i don't think we'll be doing that any time soon. >> i wouldn't bet against elon musk long term on anything. >> why don't you buy tesla and force them to make everything here and keep it here. >> he does make it here. >> he's building a big factory. >> completely vertically integrated, really one of the great innovators of our time. i think that everyone has ups and downs and it's a long journey, especially when you're trying to do something no one else has ever done and certain people you don't bet against and elon musk is one of them. >> india's stock market has been red hot. china not so much. which is the better place to put your money, the co-founder of an emerging market hedge fund will weigh in next and how do you build a brand from the ground up? the co-founders of juicy could

you tour now hoe. used to do everything from driving the delivery trucks to modeling their own clothes to build a fashion empire. we'll be back in a moment with them. [ female announcer ] there's a gap out there.

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if frustration and paperwork decrease... if grandparents get to live at home instead of in a home... the gap begins to close. so let's simplify things. let's close the gap between people and care. ♪ welcome back. my next guest is an activist investor operating in emerging markets but not an activist in the way carl icahn or bill ackman is. finding different ways to agitate companies. joining us now is theresa ba

barger. welcome. >> thank you. >> you find different ways to agitate. >> what are the different ways to agitate companies? >> i haven't heard the word agitate before but that's okay. we like to find allies so we invest were companies and in all cases the companies are controlled by a family or a founder. we like to work with those families and founders behind the scene quietly. we make suggestions, and we like it when we're aligned, and we both want to find more value in their company. >> so is this the case even in a place like china? >> we haven't made any investments in china for a variety of reasons, including that what we call microeconomics, that it's hard to find the right company who could be an ally. >> what are some examples where there,has been successful? >> one example is in pru with a construction company. we went in there when we talked

with the person who was going to be the ceo of the company, what do you think of the stock price? it's so low, i maybe need consultants, tell me, why and we said no, i don't think so and we worked with him and his cfo on very simple things, and to your viewers, it would seem so simple, that if you have good transparency, reporting segment reform and investor relations you can add a lot of value. >> that's what's so interesting and the panel can jump in on this as well. in some ways it seems like activist investors can play a consultant like role in a lot of these situations? >> i think it depends on the receptivity of the company. frankly in most emerging markets, and i'm generalizing, most emerging markets there's a family control element or an element of people who really are not that interested in being public companies in what we would call the u.s. or western sets, so i think it's very much

a case by case basis, but i would curious. i think you would see exception rather than the rule of a ceo overseas in an emerging market that really wants to hear from people like teresa. >> is that the case, teresa? >> we talk, then buy, so we look for companies that are run extremely well, where they know how to run the company, and they know not a thing about how to attract international investors so we can work with them and say, look, we know something that can add a little value on and we talk it out ahead of time and they very often will. >> lynn? >> look, i think it's a very different game. i think if you're an activist in the way of partnership, i think it's a very different story. if you're an activist in the way of forcing change in a somewhat hostile manner, i don't think that's going to work in the emerging market. >> i really agree with you because 85% of all the companies

listed in the emerging markets are controlled companies. 51% or more are controlled by someone. you're not going to win a proxy fight with them so we want to be their ally and work together and work positively. >> what types of stakes? how large of a stake do you have to take in these companies? >> our stakes tend to be kind of in the 3%, 5%, 7% range. usually a top three share herald among the non-family share holders. >> theresa, just last question before we let you go. a fund is you can launched aimed at companies with mostly female officials or directors. in your opinion is that something that's globally needed is a focus on women who are in charge of these companies as well? >> i have to say my sample size is really too small because we've only invested in one company that was owned and run by women so i don't have a very good sample size, unfortunately. >> that itself is revealing in some sense. >> i wish i did. >> thanks so much to be here to explain it all. really appreciate t.activist investing. coming up next, the co-founders

of juicy couture are here at the new york stock exchange and will join me to discuss the new book and the glitter plan and how they turned $200 into a fashion empire. tune into the "closing bell" tomorrow. we'll be sitting down with the ceo omar ishrak, considering to be taking over the london-based smith and nephew. we're back in two. with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

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$200. that's how much two friends had to launch what is a multimillion dollar fashion empire. they did southern company ten years ago being paid $250 million. now the two have written a book. it's called "the glitter plan." how to turn it into a global brand and a cnbc exclusive. the women behind the fashion empire joining me now on the floor of the stock exchange. welcome. >> hi, how are you? >> great to have you. >> great to be here. girl power. serious girl power. >> that's right. >> we are dying to be in this

building. >> we're thrilled. >> you sold to liz claiborne. do you wish you listed on the big board instead and come down here? >> let's not go there. we're really happy. >> $250 million. i understand. you look at a company that you talk about in here as well as ernest zone. >> earl genes. >> i knew it was an e in there somewhere. i wonder if you wish you maintained some of that independent ens? >> we are ready for our ipo. >> there are a lot of people starting out in a partnership and it doesn't work out. you guys didn't know that, that that was kind of a business school maximum if you will when you started. why do you think you were so successful and so many others have failed? >> i think because we were not

friends first. we became besties as we worked together and got to know each other. it was an incredible and is still an incredible partnership. >> i think it's a girl's story. i think as a girl, my dad was a work aholic and the way i saw him as a business man didn't appeal to me at all. having a business with your best friend and creating a culture we loved where we laughed our heads off. it was funny and we worked hard and had each other. when things were crazy, we could always like -- >> it makes the highs higher and lows not so low. >> lynn on our panel is talking about the emphasis on manufacturing in this country. you document that in the book how you started in one office. and you needed something and went and got it. would you think it would be the same if you were starting out today? >> we are starting out today and most of what we do is made in

the glamorous usa and we love having it in our backyard. it's important to touch the product and have it in your backyard. >> it's happened in new york and it happened in los angeles and having our first label was made in the glamorous usa. we opened all the sewing lines so anybody could start a t-shirt line and there were so many that started their t-shirt lines. so we still make in los angeles our new line. i think it's important to do that. new york is having the same movement. made in new york. and a lot of people do. it's kind of amazing. i mean sal la ron is made in los angeles. >> you did maternity jeans decades before people that became a main stream thing.

what is it that you think you're capturing today that's missing or what do you sense that's needed, that demand you're trying to fulfill? >> for us, clothes that we want to wear every day. that casual luxury vibe. incredible fabrications that you love to put on. we're not into disposable clothing. i love things to last. i don't want clothes i have to throw away. >> is that the argument for a higher price point? >> yes. things that last. i think it's perceived value. you have to buy something, put it on and feel like you got what you paid for. you know, i think that's really important. and i think that the most important thing is that the product speaks for itself. it's all about product at the end of the day. >> you guys are epic marketers. as you said, without the mba. >> that's right.

>> thank you so much. read much more about it in the book. appreciate it. we'll see you back here in a little while. coming up, the jobs number friday. getting the take on what's moving markets and tune in tomorrow when slash/restaurant owner bobby flay will be on the closing bell as a special guest panelist. over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation...

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. welcome back. let's get some final thoughts. the european central bank tomorrow morning. >> when you say this is being drifening by liquiddy we're about to get another shot of it. they're trying to stimulate their economy. >> is that five sill bls? all panel. don't listen to -- >> that's all right. it's the event of the year. >> let's hear the pearls of wisdom. >> you better have some pearls. >> pvh. what they said was continuing to be challenged. heightened promotional activity. i think that's important when you think about the whole thing. >> evan? >> jobs on friday, watch the

bond market. >> i think pay attention to the real world, retail sales and real job growth. >> thank you so much for being here. fast money is coming up in just a few moments. >> regis philbin was here and david ryan hart of green light called him and offered him an internship. regis spent a day at his office. it might offer clues as to what david is looking into right now. >> over to you guys. >> thanks. "fast money" starts right now. in new york city's time squares. our traders are tim, steve, karen and guy. top stores. the ponds of the villain. fighting words against u.s. tech company from chinese state media. chinese newspaper the people's daily writing u.s. companies including apple, microsoft, google, facebook are coordinating with the prison program to monitor china