do together. i'm not leaving you, i'm letting you fly, spread your wings a little. >> i'm an emu. but you know what? we're going to work a lot together but you've been the greatest person i have ever worked with spectacular human being. >> me, too. >> intelligent, professional funny, talented. >> we don't have time to ditto what he said. thank you for watching "street signs." you've been fantastic viewers and listeners. we'll be back monday. exciting times. welcome to "the closing bell," everybody. i'm kelly evans down here at the new york stock exchange. >> and i'm bill griffeth. one hour to go. this has been a remarkable week for the u.s. equity markets. the dow still on track even with this decline here for its best week in more than three years going back to december of 2011. when you consider how strong the market was in 2012 and 2013, this is the best week we've put together since december of '11?

>> but it seems people would rather have the tortoise than the hare. the question about this one is whether we will get the same result. >> yields are moving up. we'll talk to rick santelli about that. gold is getting slammed. oil has been a little higher today and it goes back to the jobs report. >> it's jobs friday. we'll see how that wraps up trading with an hour to go. the dow right now is down 57 points as traders troo toy make sense of where this leaves the fed and what happens next with the u.s. economy. the s&p is off 5 points and the nasdaq down 15. declines of a quarter to a third of a percent across the board at the moment today. >> two-hour "closing bell" panel. scott cavanaugh of first national. we've got eric stein of eaton vance. christine short from he is estimize. we've steve liesman and rick santelli in chicago. steve liesman, 257,000 jobs created. the unemployment rate dipped -- goes up to 5.7%.

regale us here. >> there's a lot to regale you with, bill, because i think the big story is not so much the 257,000, it's the prior revisions adding 147,000 jobs to december and november which were all part of a broader annual benchmark revision that really upped the trajectory of job growth to now an additional 15,000 per month. i don't have a chart but it looks like job trajectory is going straight up in terms of monthly growth and so what has happened, bill is that our sense of the underlying strength of the job market took a major step forward, and there's another detail in there which is that the household survey showed 700,000 people coming back into the workforce which is why the unemployment rate rose. if there's a good reason for the unemployment rate to rise it's that. it's that a strong job market is attracting people from the sidelines to raise their hand and say, you know i'm back available for work, count me as part of the workforce. >> i'm wondering scott, what investors are supposed to do now

that we've gotten to the point of the economic cycle. what do you buy? is the time for cyclicals over? we know defensives have rallied on the low interest rate environment. >> personally i like financials. i believe with this jobs number going into this i did not think that the fed was going to be able to move and personally after this jobs number i personally think this has really opened up the door for the fed to strongly consider moving. so i believe financials are going to be very strong and also i believe that u.s.-based companies will remain strong. >> rick we talked about this the other day. if we got a big jobs number you could see those yields on the long end of the curve moving back above their october lows. we didn't get the blowout number but the yields have still moved above those levels haven't they? >> yes, they have. and we've actually been discussing for about a week now, bill, that the flavor of the marketplace just didn't seem as

though you were going to get enough buying to challenge some of those low yields like last week's 20-month low at 1.64% established in 10s. we're 30 basis points higher on the week looks to be the highest close in basically four weeks, and it underscores we're above that very important 1.86% that gave us so many great trades really since the mid october wild session. so you really want to be careful here. i'm certainly not saying that i think rates are going to skyrocket or we're going to take away the notion that rates will be soft all year but trends come in many different time packages and i think the short-term trend continues to be especially now at these levels we may come very close to testing what we settled at last year which is around 2.16%, 2.17%. we need to be careful. one thick i wantng i want to bring up the only reason we look at jobs jobs, jobs is because we always associated better jobs with more money in consumers' pockets. today's wage jump is most likely

nine states that enacted minimum wage hikes effective january 1st but in the grand scheme of things, there's no better way to handicap jobs than seeing a lot of then and not a lot of movement in wages, so i think we need to pay close attention to these dynamics. >> that's a point and, eric as investors start to think about whether interest rates, as rick said not only have already made a move higher but may make another one, what should they do about the kind of bond funds they're in the kind of fixed income instruments? what are you recommending? >> what we're not recommending is short-term treasuries short-term investment grade corporates but i think other parts of the market leveraged loans are good certain parts of emerging markets high yield bonds. i think if you can find with all the volatility in markets, if you can find funds that go long and short, that can take short duration positions, i think that's a great place to be. >> you don't think that's risky at all, eric? a lot of those calls are basically not only hotly debated, pretty reliant on the data. basically you got to get a

manager who gets every single one of those right. are you confident you can do that? >> i don't think you need a manager that's going to get every one right but you need one that takes a longer term approach and doesn't rely just on instruments that have worked in the past. the great returns in the past but going forward i think you'll need to be a little more tactical in today's markets. >> christine, we can't forget all the earnings that came out this week and they had market-moving implications whether it was disney or some of the industrials that are suffering from the stronger dollar out there. yesterday we had a flood of earnings and today all of those companies reported last night have seen very very heavy volume. what have you made of what we've heard from corporate america about what they're earning right now? >> last night was very exciting. we said social media companies were reporting, it was going to be very crucial. twitter, linkedin both up double digits.

yelp down double digits. overall the season for the s&p 500 sort of lackluster thus far. we're looking for 6.6% easternings growth. revenues a little lower at 2%. we're still seeing that lower top line number. however, it's only -- we're only seeing growth because of a handful of companies that have come in with big beats. i'm mainly talking apple. it's the largest company in the s&p 500. very heavily weighted. if you exclude apple growth drops almost in half to 3.5%. you know 6.6% not terrible but if you look over the last couple quarter when we had double digit earnings growth revenue growth of close to 5% and knowing it's just a handful of very large companies there is some concern. analysts have been ratcheting down forward four-quarter earnings. there's a lot mentioned of the stronger dollar weaker picture being a problem, lower oil prices. there's some concerns in the future. i take some of that with a grain of salt because we know as we get closer to earnings season those numbers will move a little

more. so far kind of eh. it's been an okay earnings season but it's really the big companies that have pushed the growth rate higher. >> steve, scott mentioned he's buying the financials. economically speaking, how do you think the financial system is positioned? is it going to be a better 2015 than it has been at this point since the financial crisis? >> if you just work the macro on that kelly, what you see is a person with a job is a better credit risk than a person without a job. the longer that person is in a job, the better credit risk they are. the better credit risk out there, better credit quality in the broader population creates more loan opportunities. that's something that's been missing for a while. you combine that with getting some of the regulations we've been waiting for in place and you could see a better loan environment. i want to pick up on one thing the prior guest just talked about which is if we're in a time here of rising consumer demand and rising demand overall, better growth, then this is a time when companies you would think would be bringing on new workers,

spending more money on capital spending. i think this challenges the investment thesis of the last seven years where investors were glomming onto companies that were cutting and keeping their bottom line up from a lack of demand, but now it's a different environment so it might be that investors have to start to take their horizons and look out a little further over future profits, not necessarily next quarter's. >> but, steve, they don't know what tax policy is going to be. they don't know how they're going to be able to amortize their equipment. all the issues will be taking away from the logic you just outlined. >> i agree tax policy is critical and it would be great if they got that stuff together. where i challenge su whether or not there's an unusual amount of tax uncertainty than what we've had, for example, the past eight years and balancing that on the other side rick i would put is the idea of demand and i think the companies are reasonably good at -- or better than i am and i think better than you are at forecasting their demand and if they see it coming it means they're going to have to bring

on workers to meet that future demand. certainly have them trained and have the machines for them to work with to do so. >> beyond the inventory cycle that is jump up and jump down and give us gdp like 2.6% after a 5%. >> i think that's right. >> i'm going to ask a question, rick that would be more interesting coming from you, but you really think there will be tax policy coming out of washington? >> no, and that's why i don't think you're going to get the kind of business investment that anybody is looking for. it makes so much sense. but today's-on-in "the journal" nails it. when you get tax policy in december that's retroactive for the previous 11 months i'm sorry, but you can't plan retroactively what you didn't do in january. >> and that goes back, by the way, last word on this steve, but to the proposal rand paul had with barbara boxer that would allow companies to bring their cash back at 6.5%. he's trying to push five years with an eye toward making it permanent. is that the kind of policy we want? should we take what we can get, in other words? if that would be good for our companies if we're not going to

get real corporate tax overhaul. >> what we have to do is get off of this hamster cycle of these one off repatriation things. that's got to end. you know that, i know that the treasury knows that. i believe congress knows that. whatever they end up with it's got to be something that's permanent because what happens is companies will wait until they get that amnesty to bring the money back. we have to come up with a better system and what is incredibly frustrating from reporting on this story for almost a decade now is everybody agrees. both sides agree. there may be two or three percentage points apart in terms of what they can do and it's time to -- it sounds really stupid -- to put away the stupid differences and come up with a tax plan because what rick is saying i think is real in that tax policy can hold back important investment. >> i would think so. >> agreed steve, yeah. >> thanks guys. everybody have a good weekend. appreciate your thoughts. >> thank you. >> by the way, don't miss steve liesman's exclusive interview with treasury secretary jack lew coming up monday morning first

thing, 6:00 a.m. eastern time "squawk box." >> coming up 50 minutes to go to the close. markets are taking a leg lower. we'll see if europe could spoil the party with the dow off 90 points. back below 17,800. the nasdaq is off half a percent, the s&p is off 7. >> clearly a huge week for stocks. the dow on track to lock in its best weekly gain in over three years. plus, we have the ceo of etf jind wisdom tree speaking with us exclusively. we'll find out if he thinks these gains are here to stay and if he's seeing more investors plunge into the markets right now and where he sees stocks ending by december 31. >> and up next the price wars heating up in the pharmaceutical industry. meg terel elterrel with a special report report. we're back in two. [ male announcer ] approaching medicare eligibility? don't put off checking out your medicare

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it's like a tv curse. this happens on golf coverage. when you mention that a golfer hasn't three-putted all tournament immediately he or she three-putts.

we've been mentioning the dow is on track for its best week since december of '11 and now we're not. we've jinxed it. the dow falling back. we're down 85 points. anything more than 75 points or thereabouts and we don't have it. so right now we're seeing the lows of the session for the industrials, for the s&p, and the nasdaq. look at the ten sectors inside the s&p 500 index. two are positive everybody else is negative. those financials he likes are trading higher and telecom leads the way. >> we've got some breaking news on greece. michelle caruso-cabrera has the details. hi, michelle. >> i feel like there's breaking news at this time from greece every day this week. there's a new headline from the head of all the european finance ministers who frequently get together. the leader of it has come out and put more pressure on greece today saying that they have got to apply for a bailout extension by february 16th at the latest or else they're going to run out of time. this is significant because, remember europe is very process oriented place.

you have to get this done by this date or else there's a whole ripple effect that follows on. what this means is if greece runs out -- if greece hits february 28th when their official bailout program expires, lots of things go into effect. that's when it's quite possible the ecb could cut them off completely, could lead to things like capital controls et cetera. everybody in europe moving the calendar forward on greece trying to get them to come to the table now and make a decision now and greece keeps trying to push it to may, june july et cetera but everything is going against them at this point and that may be why we see the dow moving lower. >> michelle thank you so much. we'll keep an eye on it here. off 85 points. we're watching the 75 point level to see if this is one of the biggest weeks in some thim. who would have thunk it. price wars have begun heating up to the pharmaceutical industry. we saw it play out in real time with gilead stock. >> gilead shocked its investors when it says discounts to its huge hepatitis c drugs will be bigger than the street

anticipated. 46% compared with 22% in 2014. now, gilead said that was partially due to more patients covered by public pairs like medicaid and the va receiving the drugs at rebates of more than 50%. it's also due to increasing competition. the list prices range from $63,000 for eight weeks of treatment to more than $94,000 for 12 weeks. but, of course they represent a huge advance over previous drugs because they're curative for most patients and carry fewer side effects but the drugs have sparked major pushback and drug pricing pressure has become the biggest issue with the expectations that drugs for cholesterol, cancer and other areas could be next. back to you guys. >> meg terrell, thank you so much. a big story this week and now more reaction with someone who has been very involved in the drug pricing story. >> essex press scrips chief medical officer steve miller. steve, welcome. thaction for joining us today, and i guess you're not surprised

ed by this discounting going on. you signed a deal to be the exclusive carrier and now that's what gilead is doing with cvs. are we in the midst of the beginning of a major price war in the drug industry? >> thanks for having me. you know i think this is a new era we're entering into so we have more drugs coming out that are competitors to existing products and it gives pharmacy benefit managers like express scripts to try to get better value for our patients and clients. >> it sounds like that's what is most important for you guys driving that better price for your customers. almost the old walmart model, isn't it. >> exactly right. we've gotten to the scale that it really makes a difference. we're talking about we negotiate for 85 million americans, 25 million just on our national preferred form edred form ewe lear.

>> however, you know what the critics are saying about the deal you struck for example. you're essentially shutting out patients who could receive gilead's hep c drugs. are these drugs interchangeable or what do you say to those saying this exclusive deal shuts out certain patients and takes the decisionmaking away from doctors? >> so these cases are actually unique because you have to have drugs that are clinically equally important. so in this particular case you had two drugs that both have a 95% cure rate. the real difference between these two products is the gilead product you take once a day, the other product you take twice a day. we think for $10,000 difference patients are willing to take the drug twice a day for just 84 days and get to cure. but you're right, this won't always happen and we'd like to have the most choice for patients, so clearly what we'd really like is good pricing from all the products. >> and i wonder steve, hep c

has been the place where a lot of this has come to a head lately. do you expect this to happen with a lot of other drugs going forward? has there been a fundamental change in the pricing or is this going to end up being more unique to this particular treatment? >> this actually isn't unique. we've done this historically but it's never gotten this much attention. we've done it in diabetes, in high blood pressure, or high cholesterol. we've now been able do it in hepatitis c. you can look forward to what the pipeline is bringing us and you know this summer there's two new cholesterol agents coming to the market. truly break through products but it will give us the opportunity to pit them against each other and hopefully drive more value to our patients. >> by the way, i'm going to ask what sounds like a naive question but i'm just -- when i hear about the size of the discounts gilead mentioned this week, up to 40%, are these guys still making money? what kind of margins are we talking about in the drug industry where sometimes you're pricing patients out of the market because they simply can't

afford or a doctor will choose not to treat them because the drug price is too high? so is drug pricing based on costs itself or what's going on here? >> yeah so it's always unclear what dictates how the price is set when it comes to the market. as you know when gilead came to the market at $1,000 per tablet, we said this is clearly too much. and patients aren't going to be able to afford it and as you know many insurers only covered it for the sickest patients. we thought that that was wrong. we wouldn't want to wait until our kids' livers are scarring before we wanted to treat them. so the reality is we wanted a lower price and when abvi came to the market we were able to get that. but your question is really about margin. that is do they have the margin to play with these? now, remember abvi brought their product for $11 billion, so clearly they had to set it high to recover that. abvi clearly doesn't have that

kind of investment in it that gilead had. so gilead paid $11 billion, abvi produced theirs on their own. they had a lot more margin to work with. >> and for a lot of investors that's going to become a differentiating point as you continue to flex your strength. thanks for being here this afternoon. he's the cmo at express scripts and as mentioned, when we had that earlier earlier with mark bertolini with aetna. we asked him about the discounts they borkworked out with gilead. now we know it might be closer to 50%. >> the dow is down 84 points right now. rumblings out of greece the negotiations continue as the clock ticks on that country to get its debt servicing negotiations completed with the european union. the s&p is down 7 and the nasdaq is down 23 points. >> a better week for stocks but we're not finishing that strong. we'll take a quick look at the

s&p 500 heat map. we're probably 6 to 4 in terms of red versus green today. we're wearing red for the aha's wear red day for women's heart health awareness. the market correlation is just spurious. >> coincidence. >> when it's good news/bad news for stocks may be when a great jobs report makes an interest hike rate more likely. >> plus we'll talk markets, fund flows and what's hot in the hot etf field coming up. stay tuned.

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welcome back. markets off 80 the dow is off 80 hugging that 17,800 level. it's interesting what a different tone wrere're seeing year-to-date. utilities had been one of the lead leaders, in today's move alone they're one of the laggards. it looked different on february 6th than january 31st. >> the yelgdield has gone up 30 basis points -- >> in one week. they hearkens back to the taper tantrum. >> it has to do with the strong jobs report with stronger revisions for two earlier months. sounds like good news right? so why didn't the market keep rallying here he asked? >> some worried this report does make a fed rate hike more likely to come sooner than later. let's get reaction from jeff cleveland from payton and reigel lindsay from stern ag

and cnbc contributor and wsj chief economics commentator greg -- >> that's right. >> back where he belongs. >> greg we'll start with you in this case. what do you think the fed does here? >> you got two cross cutting trends i think in this report. one is the obvious strength of the economy with the very large headline number of jobs created which suggests that we're not only at a strong pace of growth but it might be actually accelerating. that argues in favor of the fed moving as soon as june. against that you have two other things. the fact this inflation is well below target expectations are well below target and less point out the fact that the unemployment rate has really not done anything for four or five months, and one of the reasons is that labor force participation has stopped dropping. that's a positive supply side indicator that the fed will take as an indication that there's still a fair bit of slack in the economy. so those two factors, the fact that you still have a fair bit of slack in the economy, that labor force participation is going up and inflation is still so low, i think pushed them further towards the september

time frame. >> do you agree lindsey and is that why yields on the long end have gone up as much as they have do you think? >> i think the strength in the report was certainly on the earnings side. as we saw the strongest monthly increase with that 0.5% growth but this comes on the heels of a 0.2% decline in december. if we're talking about wage growth over january and december, it was just over 0.1%. so while i think this was a welcomed retrieve after a miss on the latest gdp report a miss on the latest ism, a miss on the latest durables and retail sales it's hardly creating a sense of immediacy for the fed. remember, the fed does not wake up and look at one better than expected data point -- >> no we do that here. >> exactly. the market does. they trade minute to minute but the fed is going to take this in the context of a longer term trend which continues to argue for patience and further accommodation. >> i wonder jeff and i can't see it right in front of me but the revised december number,

wasn't it better than 300,000 for the job gain. that's pretty darn strong. >> it was, yeah. and you look at the three-month average, kelly, 336,000, that's a step up. i do -- we do think you're seeing an acceleration in the data, and so i think it's great. does it risk the fed moving earlier? absolutely, and that's what the two-year treasury yield is telling you today. i think, kelly, we saw the highest or the strongest upward movement in two-year yield since 2010. so the market is looking into this report and thinking this changes things for the fed and i think it does and greg made a great point that wage growth is soft, but it has been soft for some time keeping zero interest rates, i don't think that's going to move the needle there 37 ifthere. if we get more job growth, then we could see wages move higher. we had pretty low average hourly earnings in may of 2004. i think it was 1.9%.

that did not stop the fed from hiking in june of that year. so if anything for me this tilts it closer to a rate hike and i think you're seeing that market reaction play out today. >> so what do you think, greg? does janet yellen start liftoff at precisely the moment that mario draghi starts buying up bonds in europe? what do you think happens here? >> if that's what's happened then you want to be long the dollar, don't you, bill? there's an urgent question that the fed is going to have to grapple with and that's whether they keep the word patient in their statement in the month of march. because if they have it in the month of march it means they can't go in june. janet yellen has told us patient means no rate increase for the next two meetings. jim bullard made a good point earlier this week. you may want some optionality. if they take it out in march, it gives them the option but not the compulsion to actually move in june. so that i think is going to be the big debate facing those guys at least in the next few months. >> all right. thanks guys. we'll leave it there for the

time being. jeff lindsey, and greg. really appreciate it. some people thought drones would take jobs away from humans. who thought that? but the exact opposite is happening at least for now as a matter of fact. mary thompson joins us from daytona beach. mary? >> i am on the campus of embree riddle aeronautical university. they started a four year bachelor degree in unmanned airlinal systems or drones. drones are big business selling to the military and now the faa is looking at other industries and how drones could be used in those industries forestry agricultural, security. both colleges and companies are now betting that the drone industry is about to take you a. >> some people think that the commercial market for unmanned aircraft systems could be much bigger than the military market. >> steve gitlin is a vice president who sells small drones

to gofltvernments around the world. sales to the u.s. military alone, $5 billion in 2013. now a report estimates once the faa approves commercial drone use the industry's economic impact will be over $13 billion in the first three years climbing to more than $82 billion by 2025. >> i think the next big successful area will be public sector in regards to local municipalities adopting this for fire, search and rescue law enforcement, and then bureaus of land management public management type operations. >> as a result the industry is forecast to create over 103,000 jobs in the next ten years including engineers to design drones and operators to run them. you're going to need a four-year degree though and if you're a operator, you will probably need a pilot's license, too but the payoff is big. starting jobs the salary is just about $50,000 and up. back to you.

>> i want to see where that drone is going. that's pretty cool stuff there. mary, thanks very much. mary thompson and drone friend in florida. >> i still want to see one deliver tea as they're apparently -- >> or hot chocolate. >> i do. >> what's with the tea? >> i believe tea can hold its heat a little longer. a little more wiggle room in there. >> 25 minutes left in the trading session here. moving ever lower. the dow down 91 points now. we no longer can say this would be the best week for the dow since december of '11 but still a pretty good -- i think we're now unchanged for the year at least. we've gained back what we lost in january. >> tortoise versus the hare playing out. it was nice while it lasted gas prices jumping higher in the last two weeks. jackie deangelis will explain what's going on next. tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops tdd# 1-800-345-2550 even on the go. tdd# 1-800-345-2550 open a schwab account, and you could earn

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have you heard of the new dialing procedure for for the 415 and 628 area codes? no what is it? starting february 21, 2015 if you have a 415 or 628 number you'll need to dial... 1 plus the area code plus the phone number for all calls. okay, but what if i have a 415 number, and i'm calling a 415 number? you'll still need to dial...

1 plus the area code plus the phone number. so when in doubt, dial it out! i don't want to do this segment. as we know in the world of gasoline, the old say something up like a rocket down like a feather. >> well, our jackie deangelis joins us on why gas prices are back on the rocket rise. hi jackie.

>> good afternoon to you. we saw a more than 7% increase in crude oil price this is week. that's part of why retail gas prices are up but there's some other factors to consider as well. first of all, this is a seasonal increase. we do see it every time this year. refineries go into maintenance mode. they start to switch over to the more expensive summer blend and also traders start to anticipate that people are going to get back on the roads when the weather finally gets nice and demand will pick up. add to this we've got refinery strikes affecting 10% of capacity right now as we're going into the weekend. those are ongoing and these gas prices have seen a more than 10 cent drop in a week alone. $2.17 when we were just talking about going under $2. back to you. >> all right. now, tell me bill what are you paying to fill up a tank? how bad can it possibly be? >> well the last time was $1.89 at my local station but i know i'm going to go back there tonight and it will be $3.15 or something. i don't know. >> we have about 22 minutes to go into the close. the dow looks like it could be

down almost triple digits. we're off half a percent or 93 points. same kind of declines across the s&p and nasdaq. >> wisdom tree's ceo is up next. you may want to listen because as you know wisdom tree is the biggest player in etfs. one of the most popular investments on wall street and still growing in that popularity so don't touch the dial. we'll be right back.

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welcome back. as we keep an eye on markets, dominic chu is back at headquarters clocking today's winners and losers on the street. >> kelly, bill, let's start with intu wit the makers of tubrbotax moving down after the company said it has temporarily halted transmission in state tax return after seeing increases in suspicious activity. deva de devry falling as well saying costs will rise in the third quarter. there's brookdale senior living moving higher after sandale asset management called for the

company to separate its reality estate portfolio into a reit. they said they would consider the proposal. shares up 6%. we'll end with wisdom tree the etf provider losing ground after posting weaker than expected third quarter profits. you can see the shares down by 1.5% today. back over to you guys. >> dominic, thank you. what's behind the results and how are etf investors hnlandling this market? >> we welcome back jonathan steinberg the ceo of windom tree investments. >> thank you. >> you made money but your expenses also went up big, 23%. is that by design or will you try to rein that in? >> really it was because we had such a strong fourth quarter that compensation went up a little bit. we had $4.5 billion of inflows in the fourth quarter so i think the analysts underestimated that a little bit, but in 2015 we gave guidance we are going to be spending more to higher more people to satisfy the growth opportunities to we're seeing. >> it's interesting, i can't recall who we were just talking with trying to find good talent

in this space. portfolio managers. said it's actually very difficult. what's your method? are you experiencing the same thing? >> because, you know, in asset management really the etf industry is taking so much market share and there are so few of us that we're finding it relatively easy to find talent. really exciting. >> you're basically taking it in from the fund management space to ness new products. which products in particular are people flocking to. >> right now things that are strong dollar oriented hedged equity funds and u.s. equities are driving inflows. so hedge hedj and dxj, our japan one, both are doing extraordinarily well. hedj this year has already taken in $4 billion. so it's on fire. >> there was a time i can remember when closed end mutual funds were all the rage. closed end country funds. now they're not. why have etfs resonated longer period of time with individual investors where those closed in

funds didn't. >> closed in funds have really a very expensive up front load. so they were sold with that load. the reason people are going to etfs are because they're really investor-friendly. they are liquid transparent and tax efficient and they tend to be lower fee. we're taking market share because it's a 21st century structure that serves investors better. >> what about some of the concerns people have about getting in and out of these products. that's the beauty of etfs. they allow you to trade during the day. >> correct. >> when we think about the growth of the industry, you want to go to $100 billion. globally you're at a quarter of that right now. is that right? >> we're at $45 billion today. >> i'm sorry, about half of that today. >> yes. >> what do you do to get from here to there? >> really do the same things. continue to launch new and innovative products and educate the adviser and the investor on our exposures and the benefits of etfs and the formula has continued to work. so nothing will change. we're going to grow with the

growth of the industry. so in 2014, last year, the industry had its best year ever $239 billion of inflows. in the fourth quarter $118 billion. the best quarter in the industry's history. >> i realize i know who i'm talking to but does it feel like there's something amiss in the market when people are trading these kind of vehicles rather than investing directly in stocks? i know i'm sounding old fashioned now, but what about the change in tone of the market when that's the case? >> so etfs are not just competing with mutual funds. they also compete with direct ownership of stocks. it's a very similar experience. it all happens via a brokerage account. with no paperwork with the etf sponsor but you get built in diversification with the etfs. when you think about 2008 single company risk is not to be minimized. so it's not surprising to us. >> but in some ways for -- and i'm not talking about veteran long-term investors, the jack bogle types out there but for

the newbies who come to the market, it almost becomes a video game. when they're watching the market and they want that kind of movement. when they see the market move they want to participate in that every single time. in some cases etfs allow them to do that don't they? >> etfs, there's been so much innovation. it allows you to get exotic exposures. european exporters hedging out the currency. you couldn't get that without going to a hedge fund prior to that. but performance always has attracted money and etfs are no different. >> what can you tell us about active versus passive etfs at your company? >> we have mostly passive rules, but we're not beta. so in a sense we're rules-based active. many of our exposures. active is -- the beautiful thing about passive is it's more predictable. the financial intermediary, it's easier to create asset allocation tools using passive etfs, and that's one of the reasons they're growing so

quickly. >> and you want to stay that way as you grow? >> you get more flexibility in active. you're not fog the index. certain things we do emerging market corporate bonds, we're using western as our adviser and it's active. so you have to think about what the underlying exposure is but we'll do both and we're second or third largest in quote, active etfs. >> always good to see you. >> thank you so much. >> thanks so much. >> jonathan steinberg, ceo of wisdom tree joining us at post nine. we have 12 minutes left. >> i was just going to stay speaking of exposure it's going -- >> do you really want to go there? >> i think we should let viewers know in 12 minutes time the "sports illustrated" swimsuit models, there they are, this will speak for itself. and there's tom farley in the middle, are going to be ringing the closing bell at the new york stock exchange. >> yes, they are. so it has been another wild day on wall street. could be a volatile ride into the close with the dow down 102 points right now. so keep it right here.

we'll be right back.

about 8:30 left in the trading session. 90-point decline for the dow. joining us right now -- i know you like this market. >> i do. >> do you buy dips like you saw in january? >> i'm still a buyer of stocks. i think for the rest of the year it's going to be about where you pick your spots rather than just buying the whole market wholesale, but the reason i like the s&p 500 is it is still the highest quality index around from an equity standpoint. it's got great dividend yield, balance sheets are cleaned up nobody spends any money isso there's a lot of cash. the name of the game this year and so far has been volatility. we've seen lots of strange moves, currencies and oil prices and the market itself and i think that quality is going to continue to be important. >> you make a good point about

buying the index broadly because what kind of rotation we've already seen this year. first it was the utilities and health care doing well. >> exactly. >> lately a different story. >> super defensive and now somewhat cyclical. ewe tilth utilities sold off today. i don't think utilities is where you want to be because i think rates are going to move a little bit higher and -- >> i'll smiling because -- i'm not picking on you but i have heard that for like three or four years now. at the beginning of each year we all say rates will rise you don't want to be in the utilities and yet utilities have continued to power higher. >> they have. but here is the thing let's say we're at the nader in interest rates, utilities are probably the worst place to be. if rates lose a little lower, i don't know how much upside you get in the sector. i think by the second half as the fed starts to tighten and we feel better about growth, global growth could be a little bit better because lower oil prices

actually benefit global gdp. so china you know all the oil impartners will see better growth from that lift. >> a moment ago we're off 100 points. art cashin was saying if we don't hole certain levels we will see it move lower. is this a technical move? because of the job report? >> maybe a little bit of it is nervousness about the fed tightening earlier than was anticipated. i'm really bad at calling daily fluctuations in the market. >> oh go ahead, anyway. it doesn't stop a lot of other people. >> exactly. but i do think that, you know, the trend for the rest of the year should be higher rather than lower. >> what's your target for the year? >> 2200. a healthy upside. >> stay right there. last i heard we had 300 million to buy from mr. cashen. that still the case? yes. or thereabouts. >> after the bell best selling author walter isaacson plus

"shark tank" investor kevin o'leary joining us on the panel. and an eamon javers story that russian spies may be infiltrating wall street. you're watching cnbc, first in business worldwide. ase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today. your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys.

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average since december of '11, believe it or not. if we can close with a loss of less than 75 points that in fact, will be the case but that's not the case at the moment. still a gain of 3.7% just this week. for wti, that was the feature of the week. that was one of the commodities calling the shots, very very volatile week. when all is said and done though oil gained 8.7%. that's incredible. back to $52. back above $50 on wti. the 10-year yield, we mentioned it earlier, up 30 basis points in yield. we're at 1.94%. we began the week at 1.64%. back with savita and matt cheslock has joined us here. what about this volatility? so january was down. so far february is up big. what's going on? >> it was a little scary early in the week as we started monday and broke below key support levels. people got worried, thought it was going to accelerate. it didn't.

we got some positive earnings news out of the -- less news out of the ecb and we got this jobs number today which helped us for the most part of today. i think the volatility is great for a trader. we've had this range we talked about for so long 17 to 18 in the dow and it's been perfect. s&p 2,000 to 2,060. >> we established you don't want to be defensive, you want to be cyclical. you like financials? >> financials were equal weight. i think there are haves and have nots. one sector i'm worried about are reits because they're a rate play and they've done really really well. >> this could work against them. >> it could. >> what about oil, energy. >> energy this is is the million dollar question. >> would you nibble there yet? >> we've gotten down to the lowest valuations we've seen in like 30 years, so it's super cheap. the question is is there another leg down in oil prices? our commodities team thinks oil could test as low as $30 a barrel so i wouldn't buy here but i think we're getting close. >> and if we go down to $30, what happens to equities very

quickly? >> probably going to be a leg down. it's followed oil pretty closely so far. >> very good. thanks matt savita good to see you. and the ladies gracing the cover of the upcoming issue of the "sports illustrated" swimsuit edition ringing the closing bell. stay tuned for the second hour gels with kelly evans. have a good weekend, kel. >> thank you bill. welcome to "the closing bell," everybody. i'm kelly evans. let's close out this week. a tepid finish to who was going to be a big week on wall street. look at the dow. we had to go out with a decline of 75 points. it looked like we might have eked in there to make it one of the strongest weeks we've had in one time. a lot of different cross currents. across the board declines of a third of a percent. the nasdaq is off almost half a percent or 20 points. let's bring in today's panel. walter isaacson is here from the

aspen institute. he's the author of "the innovators" along with sara eisen and "shark tank's" kevin o'leary. we're joined by larry mcdonald and steve grasso shortly. first, this was a huge week for the market. we'll start with bob pisani from the floor to wrap it up. >> and we did very well here. job growth and wage growth today was pretty good. tepid response. we had a huge response from the market earlier in the week. i just want to show how the indices moved. we went across the board, kelly. we're still settling out but russell 2000 up better than 3%. big cap s&p 500 and the midcap historic high yesterday, up 2.7%. the tone of the advance had a cyclical bias. look at the major sector this week. energy financials materials, consumer discretionary, industrials. these are terrific moves on the upside. again, all cyclicals.

the defensive names, health care and consumer names lagged a bit. next week wall of worry, whether the greek time table might be pulled forward. they need to apply for an extension of that emergency funding but they so far refuse to do that. that became an issue late in the day today. oil stabilizing. we could use that. if the market goes down it's often because oil is suddenly dropping and we also hear about janet yellen's testimony, just heard that today, february 24th and 25th in congress. that's when we will hear about the possibility of when the fed might be moving on interest rates. if you think higher interest rates are uniformly bad for the markets, look what happened to financials today. the big guys who would benefit from higher rates all had a great day. bank of america, suntrust jpmorgan, and keycorp all among the major gainers. kelly, back to you. >> financials back in favor. bob, thank you very much sir. turning to the panel with steve grasso joining us now off the floor. kevin, we want to start with you because the huge theme of this year for you and for everybody has been dividends, show me the

money, pay me for it et cetera. if the fed starts to raise interest rates, does any of that change what you want from the market? >> it keeps you away from utilities into ones that are growing free cash flow. you stay on the theme of cash return back to shareholders because over the last 40 years, 71% of returns came from dividends but the stocks i will own will be ones that are growing cash flow. maybe more midcapish in nature but i will still mine for dividends but the real action this week was on the 10-year, 18% move in a matter of four trading sessions. you know i'm a bond guy. i think the action will be in corporates. i think spreads will tighten and will make more than equities in the next 12 months in corporate short-term debt. >> is this going to be the jobs report that killed the utilities. >> it could be. it's hard to argue with a billionaire. he has a longer time horizon thane most of us and most of us by a connotation fast money traders. the end of the story is if you

look at every time you see a headline involving greece the markets get taken down. so i don't think that utilities, it's over just yet for them. you have to understand though too, where else are you going to get? i own southern sl. the yield on that is 4.3%. where is the competition for that? so i have had capital appreciation. i have the yield. so it's hard for me to argue with not selling it. >> walter, what do you think when you look at the market? >> i think the big news is of course, with job growth the job numbers, the fact that more people are coming into the workforce and that's combined with sort of a structural change, you're beginning to see which is more on demand on tap, part-time workers not because they have to do it that way but because they're millennials or people coming out of good careers who say i want to just work when i want to work on what i want to work. >> so this is good for america. >> this is awesomely good for america. people are worried about why is it that participation rates have been low in the job market? a, participation rates are going

up and, b, it's not the worst thing in the world to have flexibility. >> sara? >> we saw the bagest wage increase since 2008. we saw a 0.5% wage increase. that's something that not only has fed chairman janet yellen been looking for but most americans were looking for. does it stay? was it driven by temporary factors like increasing minimum wage across states? >> falling oil prices. >> really that's going to be the key. and what we saw today in the treasury market was indicative of the fact that maybe this is for real this, kind of wage growth beginning to form because they pushed up -- pulled forward their interest rate increase. the odds went up for june. they were at 18% on thursday. today they're at 27%. >> i would love to ask kevin a question. when you talk about the fed, i have always been in what i call the battle of bunker hill camp which is when it comes to inflation, don't fire until you see the whites of their eyes. do you think they're going to

have to fire earlier now on interest rates? >> i think sara spoke to the issue now that moves the certainty from a rate hike in september back to june. wage inflation is the reason the fed moves because they've been waiting and waiting and waiting for it. if you go back and look at history at '99 or 2004 equity market the hit a 6% hit. i'm ready for that. because it's around enhanced activity, the markets come roaring back in a matter of months. this is bullish for american stocks. >> larry mcdonald, do you agree? >> the one thing i'm looking for since november 1st nine times the s&p has had an intraday reversal to the downside with lower oil. today it was with higher oil. so i think overall i'm bearish short term because the greece curve, the three-year curve versus the ten-year so 3s, 10s is massively inverted 800 basis points. u.s. equities cannot go higher with that type of systemic risk.

>> but, larry, it's steve grasso. do you think that oil -- the guys i speak with that are energy specific funds are getting squeezed out of their mind. that whole crowded trade with long dollar short oil is unraveling. >> i think the faed is going to start -- i think the fed is going to start talking the dollar down because the dollar is a raging tornado around the world. it's lowering oil prices. it's putting all kinds of pressure on systemic risk. think of russia, for example. the companies, the country itself. the dollar is really strong -- >> larry, here is the interesting thing. it goes back to an issue brian kelly had raised. if the fed tries to talk the dollar down by walking with weakness we will get flight to safety inflow that is push it up. if they try to talk the dollar down by, i don't know just coming out and doing it on the basis of not lowering interest rates or holding off, then i don't think markets would have any reason to believe them or listen. >> remember in the fall of 2013 the dollar made this vicious

move, and they started to talk it down. they talked the dollar index down 3% or 4% in six months. did you see a big move. they've done it before. i think they will do it again. >> only way they can do it convincingly though is to be even more patient on interest rate increases. the bottom line is the u.s. is outperforming. look at our economy, look at the jobs number we just put out relative to what's happening in europe, in japan, in china, and everywhere else in the world. they can't fight that too hard unless they're really willing to be patient and hold out on that interest rate increase which the treasury market today told you was not the case. >> sara i have been invited this year this year to three great divergence events, conferences. so the entire street every single house is calling for this great divergence. it's the same thing as last year. when everybody has the same opinion, i want to run the other way. >> it's an amazing social life you have there, larry. >> i'm jealous. i didn't get those invites. wait a minute. kevin, talk to us about at what

point -- actually i'm cure grus from both of you. you're going to stay in utilities with that 4% -- >> it's not to say -- i have a portion of it in utilities but also a portion of it in twitter. so i own twitter google facebook. i'm well-rounded but i'm staying in the market but i realize i'm staying in there for headline plays and my utilities are something for rainy days. next week when we get a bad number -- last week we were talking about the market we were 60 handles lower. >> if you are holding onto utilities, you can go into the corporate bond space and in 36 months get 4.5% and i'll give you another 5% capital appreciation if spreads tighten. come with me baby. >> the only problem -- >> i'm a bond man. >> right now i'm an equity guy. >> there has been so much money flowing into this the dow utility index had its worst day since 2011. >> savita said if you think

interest rates are going higher utilities are the last place you want to be. >> utilities and emerging markets got slammed when we heard the taper tantrum. in southern it was in the low 40s. it's a 48 handle right now. i still have the capital appreciation. you factor in how much i have cliffed on dividends, i'm actually up. >> this debate about the rising rate environment and what it means for markets is only going to continue. >> i have a couple products i'd like to show kev during the commercial break. >> don't quit your day job. >> thank you for being here. be sure to catch around steve coming up on "fast money" at 5:00. they will be talking big money with eric chemmyi. the economy adding more jobs than expected last month and add in the revisions it was a whole lot more. plus we saw some movement on wages. is the labor market and the economy finally turning a corner here? we're going to talk about that next. also, russian infiltrating wall street. sounds like the plot of a cold war era drama, but the justice department says this threat is all too real and it's happening

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welcome back. the u.s. economy added a better than expected 257,000 jobs last month, and we saw some big

upward revisions. the closely watched -- wages growth also clicked higher. that has some watchers believing the economy may have reached a turning point. joining the panel is tom gymble.imble. so you called it. do you think the economy by extension is doing better than most think? >> i think it's doing better than what people are believing. i'm optimistic. when companies are bringing in middle managers when you're seeing people start to make that uptick and not have to leave their job to make the money that's a good sign. >> that would mean what then for the fed? >> it will be interesting to see but we're seeing an increase in wages. we're seeing lower gas prices. people are making more money, gas is cheaper. things better be ready to explode. the logic would tell you that.

>> one interesting thing is it seems to put to lie this great worry we had that technology was going to permanently destroy middle class jobs and $70,000 to $120,000 range. >> the thing for me has never been people are afraid of technology. me personally i'm afraid of the people that use it. if we're looking at things that way, there's always got to be somebody who is pushing the button somebody programming the button. there's always going to be somebody else who is thinking how do i get that job? that continues to push people to be better at what they're doing and that's a good thing. >> it's amazing the number of jobs we're seeing being created because of technology compared to the number that we worried about would be destroyed by technology, and it's the same we've seen for like 200 years. >> are you saying, walter we have to learn to trust? trust in technology is what's missing? >> if you have 20 years of0 years of data points that technology increases productivity increases wealth increases new jobs you don't have to think let's smash these

looms that are mechanical because it will put weavers out of work. but these job numbers show that technology is not destroying jobs anywhere along the spectrum. >> couldn't agree with you more. the fact of the matter is go back to the horse and the buggy because it created -- people were riding horses instead of using them to get to work. take it hundreds of years or tens of years in the future and people talk about colonization of the moon. who is going to be doing that? human beings. we have a program, we have to have a vision and a dream that people are going do that. >> let's go back to what you talked about, gasoline prices before. it's just been very recent that we've had these lower gas prices and i'm going to say we haven't even seen the overall affect yet. it has dragged down earnings. that was the negative story. what you're suggesting is the positive is yet to come. that's the back end of upside we're going to get. are you in that camp? >> 100%. i was talking to somebody in my office and they said i literally

thought the gas pump was broken because i looked at it and it said $35. they're thinking it's supposed to be $80 to fill up my car and this is a small sedan. the fact of the matter is if it stay this is way -- what happens with the average worker in america and what's happening to the royal families in the middle east are two different issues. but for people who are focused and living in middle america, i think the best is yet to come with what they're going to do with the extra money. >> not to be a debbie downer on jobs but if you had to pick out some not great news the number of start time americans is at an elevated level. also the number of long-term unemployed, both of those numbers didn't budge in today's report. just wondering how much of that is due to maybe a secular more permanent shift, whether it's technology or just an aging group of workers and how much of it is fixable. >> i think it's a new normal and i do believe there's a long term unemployed that unless they're going to go back and educate themselves to do jobs

where the skills gap exists on the high end or they're willing to take jobs that are lower level. there's a shortage of truck drivers right now. unfortunately, people who have been long-term unemployed and doing white collar job for mid to five high figures don't want to do that job. they don't want to get certified to do that job, but we want people to go to college and the president wants people to go to junior college and to do these things. well, guess what middle america still wants somebody to cook their hamburgers their fries, cut their grass and do these things. we might want our kids to go to college but we still want people to do the work. >> let me take this opportunity to bash federal regulations. as an investor of small businesses around $10 million in sales, it's such a hassle to comply with federal regulations now, particularly in places like massachusetts and california. hire part time and you don't have to hire a lawyer to file the form. it's a huge problem. >> not to mention health care. >> health care is a whole new nightmare for compliance. one of the reasons we're not

getting foster job growth is we've overregulated our own economy and it's a huge detriment. >> let me give walter a last word. >> if you look the number of full-time jobs has gone up a little bit this month more than was expected -- >> we're still 10 million behind where we were. >> second thing i would say is maybe a portfolio of part-time jobs is not a bad thing but what people want especially because health care reform allows them to get individual insurance. >> why won't you bash the feds with me? >> i'll bash the feds with you, kevin. >> we'll save that for the next block. tom, thank you so much for being here. we have some blacking newsreaking news from los angeles. >> kelly, in a further sign that the situation at the port is disintegrating, the terminal operators and steam ship operators are going to suspend all operations offloading or onloading cargo onto ships for the weekend. there will be no work on the ships this weekend. yardwork will continue in the

congested ports to try to move cargo around but nothing on the ships until they resume monday morning. this as the pma has been saying the situation is about to collapse on itself quote in light of ongoing union slowdowns up and down the coast, pma member companies finally have concluded they will no longer continue to pay workers premium pay for diminished productivity. however, they will -- yardwork will continue at the terminal operator's discretion though the dockworkers continue to limit operation. each side has accused the other of slowing down. we will have more on this. >> real quick, does this mean there won't be any activity at all? >> this means there will be no activity moving tar go on and off ships. there will be activity trying to clear space inside the ports but there are so few yard crane operators, that has slowed down a lot. there's no point taking cargo on

and off ships if you don't have anywhere to put it in the port. >> we know this has already hitting this country's export numbers at a time of dollar strength and before it got this serious. jane wells, thanks for bringing us the latest developments from los angeles. keeping a very close eye on that one. meanwhile, are consumers starting to spend some of the money they've been saving from lower gasoline prices? we'll speak to the chairman of equity one about that. and from russia with -- well without love but with really bad intentions. there's a new warning from the government that russian flies are trying to infiltrate wall street firms with the intention of creating financial mayhem. you won't want to miss this story.

you can see it there, the drop in gas prices certainly has been a boost to average americans, but are they spending that money at the shopping mall? we could have an answer. welcome. >> thank you for having me. >> we wanted to talk to you because we're talking about a lot of grocery stores that anchor nor developmentsank anchor your developments. >> you see vacancies going up occupancies coming up. last time we rented a space compared to what we rented, these days everything is going in the right direction from our perspective. >> everything works until the

fed starts raising rates? >> that's a different element of that equation but clearly the customer is back the consumer is become. there is the new stores formation in our shopping centers. vacancies are being gobbled up by new tenants. >> i was told that the correlation between gas prices and going to the movies is the closest correlation you can imagine. is that true about going to shopping malls and does that help you? >> i think so. i think so. i'm not sure about the correlation with moviegoers but clearly we've each american family has another $200 in its pocket, then some of it gets spent in our shopping centers for sure. >> does that determine whether you might move into more urban areas like you have been versus suburban? >> actually not so much but the movement to urban i believe is secular and keeps going and i don't see it stopping anytime soon. >> is that what you would answer -- there's this idea out there that american shopping

malls and shopping centers are dead that we're too over stored, people are shopping on the internet. how do you respond to those concerns? >> the u.s. has been over retailed for as long as i can remember it. we have 24 square foot per capita compared to 8 in europe or compared to 1 in brazil. >> wow. >> that's why you're investing in brazil. >> to put it in perspective. but not all shopping centers are the same and clearly there's bifurcation. you see the secondary and tesch tertiary markets suffering and urban hard to penetrate, strong demographics shopping center doing extremely well. so you see that bifurcation across the board and you see it all over the world. >> i wanted to ask you about your cost of capital in doing what you do as a developer. for the last 22 years it's done nothing except go down. we're at the lowest interest rates in history. when i look at a transaction in new york city like a premium office building trading at 1.5

cap which recently happened here which i think is insane -- >> insane. >> you should invest in shopping centers, it's four. >> what is the cap rate for shopping centers versus what it was 20 years ago. >> how about five years ago? >> let's start. i'm old enough to tell you 20 years, to give you 20 years. >> give me ten years ago. >> 20 years ago everybody would have told you in the u.s. this is a ten cap business. everything was a ten cap. >> wow. >> i believe today it's five or a notch below that. >> so a premium shopping mall near dallas goes for a five cap now? >> yes. >> so are we at a bubble or what? >> you tell me where ten years' money is going, i'll let you know. >> you know i think the issue is when rates go up your asset class is going to hit a big headwind -- >> if rates go up i suggest you buy kohlcalls or puts. >> maybe at 25 basis point or 50 basis point rate hike isn't going to really hurt you, but if

we went back to hiftic levels where the 10-year is at 4.5% wouldn't that do a lot of damage to the value of your portfolio? >> i believe the serious answer to that is the following. i believe that rates will go up in tandem with other elements in the economy. it's going to manifest a full recovery of the economy so that means that the consumer is going to do well. there are going to be more buying going on in our shopping centers. our customers are going to do well. we will be able to raise rents so maybe cap rates will go up but it doesn't mean the shopping center's value will go down. >> what kinds of new -- we talk about retail and think still very traditionally of the 20-year-ago model. what does retail mean today. we're talking about a fitness center and another type of experience. >> we are in the business of shopping center really serves daily necessity items and services. you know, the lowest penetration of e com is going to go to the supermarkets. it's going to be 0.5% in 2018

based on a study. so people still going to shop for their groceries in supermarkets going there. but definitely 20 years ago you did not see a fitness center in a shopping center. today every shopping center has one. urgent care walk-in doctors. every shopping center now has it. this is the new trend like you see in new york city on the streets. you see it almost in every other shopping center. there are new concept that comes every day, and they fill that space. you see -- >> what about fast food? we've been talking so much about mcdonald's problems. they brought in a new ceo. can he do anything or is it a change for consumer habits? >> from where we see it whether it's mcdonald's, chipotle we'd like to have both. but they keep coming and they

keep he inventing it. chipotle is a great example. they did not exist ten years ago. >> you just said a moment ago every day there's a new concept that comes along. what's coming on tomorrow? >> i will tell you tomorrow. >> maybe it will be the fed racing rates. before we let you go what will that mean for your business. for investors who love everything you're saying but wonder about the rate environment? >> clearly we are influenced by the rate investment. there's no question about that. but i believe that a raise of say, up to 100 basis points would not do much to the industry. >> then we'll leave it there. thank you for being here. as we learn a whole lot about what shopping centers look like today. cyber theft may be too common these days but russian spies are using the tried and true methods of sex and greed she said to infiltrate wall street. that according to the u.s. government. eamon javers has this story next. later, does new balance plan

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russian spies infiltrating wall street. it sounds like something from the cold war but the u.s.

government warning it's happening right now. eamon javers is in washington with the story. >> we saw that takedown of the alleged russian spy ring in new york last week. one of the details we learned in the complaint in that case was that those spies were targeting the new york stock exchange for one of the places where they were trying to gather information. well this morning i talked with the department of justice assistant attorney general and he had a warning for wall street staying that foreign intelligence services, multiple foreign intelligence services, are operating today on wall street. one of the ways he said they're gathering information is by using social media. take a listen. >> we know spies and others are looking at what your employees are posting online to learn about them to figure out who is most vulnerable so they can approach them and steal your secrets. >> what are they trying to accomplish? is this for the destruction of the financial industry? is this to be able to disrupt it? is this to make money? what are they trying to do? >> i think that you've named all three motivations are real.

they want to figure out if there are ways in the short term and maybe individuals who work with an intel service but have a private motive and they want to make money off what they learn from the stock exchange like regular crooks. it could be they're mapping it out so in the event one of these nations has a conflict with the u.s., they can disrupt what we value very greatly, our financial sector and it's security. >> carlin said no individual wall street firm is equipped to handle a nation state espionage service. he's recommending that wall street firms reach out to their local fbi office if they think they've got a potential problem on their hands. he said also that wall street firms need to be watching their own employees to find out who might be the most vulnerable people to an approach by a foreign intelligence agency. so it sounds like it's time for some paranoia up there on wall street kelly. >> that's exactly what we're wondering. stay there while we bring in the panel. walter, what do you make of this? >> first of all, obviously russia has an incentive to

figure out how to disrupt our financial system since we're putting sanctions and doing things that hurt their financial system. secondly, when you combine it with the cyber threat attack it puts us in a very vulnerable position. this is odd because it's sort of old fashioned, spies, human spies, human intelligence but both for financial reasons and for geostrategic reasons you could see why russia what want this capability. >> it soames to be aeems to be a remind sometimes it feels like the 21st century, that stuff doesn't happen anymore. that doesn't mean anything. >> but we're still the 20th century, too, and sometimes even the 19th. >> and i hear the oligarchs are pretty unhappy with us stateside because of what we've done to their economy in the matter of about 11 months. we have erased half your personal network and you're illiquid and you can't get access to your u.s. accounts. it doesn't surprise me when i hear the sex, drugs, and rock and roll part of this. i think they'd like to try

anything to inflict some pain. it really makes somebody mad who is a billionaire to only have $500 million. it's a problem. >> i'll take your word for it. >> we talked about the old-fashioned intelligence gathering, what carlin told me is the spies are using the same strategies they've been using since the dawn of time sex, attractive young women on wall street, they're using greed in the form of flat out bribery and using revenge. finding those people on wall street who might be disgruntled, angry at their bosses and vulnerable to an approach. all of that is stuff intelligence services have been doing forever basically. >> let me ask you, eamon, if i may, this is walter isaacson is the fbi really equipped to deal with this in combination with cyber? are they the right agency that can deal both in russia and in the united states or do we need a new way to approach these types of blend of old and new threats? >> yeah. well, it's a really good question. the fbi would tell you they're absolutely equipped to do it and the cia would tell you they're the ones to handle this on the russian side of the equation but they're putting a lot of

resources in it and they were telling me today this is a big priority for them. economic espionage against the united states is undermining u.s. competitiveness around the world, particularly on the cyber side where you see the kinds of information going out the door in huge volumes that you could never have done in the '80s and '90s. that's damaging to american companies and to american leadership. they think it's a national security problem. >> so what should companies be doing about it? are they working with the fbi enough? >> yeah, well what carlin says is companies need to work with the fbi and the department of justice more than they are. they need to be aware of it and he said this needs to be a sea tweet level approach. they need to have a risk mitigation policy in place. a lot of the firms don't have that, are surprised to see it. a lot of them think strictly in terms of cyber and they aren't necessarily looking at who is forming relationships with the people in your i.t. department who is forming roupt. relationship was the executive assistants at the firm and what are people putting online on facebook that might

give a spy an indication there's a vulnerability there. >> it came up in the last round of reporting about some of the activities perhaps down here is he nyse, but some of the questions sounded like the russians were trying to understand how they might appreciate analyze, have a heads up for some of these activities coming against their market. did you pick up any of that as well? >> yeah. absolutely. in the complaint last week against that alleged russian spy ring the u.s. government said that one of the things they were trying to figure out was information on u.s. sanctions against russian targets. they're trying to understand the sanctions process, who might be targeted, how it would work, all of that. so there's definitely a defensive aspect of this for the russians in particular but carlin also said there are multiple foreign intelligence services at work on wall street. it's not just the russians. he wouldn't name them or give me a number but he said there are more than just the russians here. >> eamon, thank you. eamon javers in washington. that anthem hack isn't just another hack. victims are already being promised and it's heating up "the hot list."

also new balance betting big on soccer taking on nike and adidas. we will talk to the ceo of the athletic shoe company about the soccer deal expansion and, oh, yes, wearables, after this.

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the real question that needs to be asked is "what is it that we can do that is impactful?" what the cloud enables is computing to empower cancer researchers. it used to take two weeks to sequence and analyze a genome; with the microsoft cloud we can analyze 100 per day. whatever i can do to help compute a cure for cancer, that's what i'd like to do. it was a huge week for wall street, even with the sell-off today into the close, but before we close the books let's get too today's hot list with allen wastler. jo >> we had two big themes on the website this week oil and

markets. today both of them were at the fore. right now we're leading with a piece on where oil prices might be going from here. it's a wrap up of experts throughout the week and just to give you a taste, i'll mention it, this week i ran the numbers for the most looked up securities. oil once again beat stocks for the most looked up security. >> wow. >> now, markets were big today too. while oil was the number one look up again today, there's a definite tech flavor. my stop three stock lookups were twitter, apple, and go pro. and twitter beating apple which is pretty unusual as you know kelly. >> takes a move like we saw today, i guess. >> besides oil and markets, the anthem breach that we reported yesterday still meekingaking a lot of news. people are already getting scammed on this. they're getting e-mail or phone calls and people saying your anthem account has been hacked. you know if you click on this we can help you.

it's a phishing scam it's malware. don't click anything in e-mail folks. just don't, don't, don't. >> i want to get some reaction from the panel -- we need to wish you a happy birthday don't we? is that why you're in a different seat this afternoon? >> yeah. we had a little party over there and it's a mess. we didn't want to show it to you. >> happy birthday allen wastler. really appreciate it. >> thank you kelly. >> that's on sunday. i was going to say to you about the hacking, i know people who were affected by this. surprising, maybe not, they're already getting these phishing. >> you know this is now touching on health care records. it happened a bit with the sony hack which they took health care records of sony as well. we need to build another layer of the internet now, and when we first built it in 1969 is only took a year. when with you turned it into internet protocols, it was gone in nine months in 1973. but it's been 40 years. we need to have a secure layer on the internet for people who want to know this is a verified domain. this is an authenticated

signature and you could even do it with things like the block chain that undergirds things like bitcoin where we could say these are authentic. i'm going to sign up for an authenticated, verified signature layer of the internet and try to stop these scams because the internet now can't continue as a totally anonymous, totally insecure site when people are phishing for your health care records. >> people have been asking exactly what kind of response. thank you. that's a good one. >> it shouldn't take more than nine months. >> who would do it. >> it's done as a distributed system. same people who have done the block chain. but whether it was the original net or internet protocols, it was done by people who created through a request for comment process or the world wide web. it was done with a group of people. it was put out there and said okay, you want to use the web layer, that's fine? somebody, a group of people not

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when you think of soccer footwear nike and adidas have been duking it out to be the top brand for yours, but now new balance is trying to change that launching a new soccer line providing the uniform team liverpool and lining up some of soccer's biggest stars to endorse its program. joining us for more on the announcement is new balance president robert demartini.

>> thanks for having me. >> is this a personal preference. is it just never to late? how can you possibly compete? >> as you said in the opening, it's a very big market and dominated by two big players, but we've always been pretty a very big market dominated by two big players, but we've always been pretty fearless about taking markets on as a private company, we think we've got room to definitely grow the business and carve out a nice share for ourselves. >> and we have talked as well about the opportunities when people get into a new space, robert, and have new technology to offer. i think, for example, underarmor breaking into athletic apparel. do you i goes have a technology improvement or enhancement you think is going to be a game changer here for soccer? >> we to have some technology we'll be releasing when our product comes out in a couple months. we announced this week strong partnerships with ten global players all soccer fans would recognize and five global and european clubs that really play at the top of the sport. >> let me ask you a question as an investor.

i was an investor in nike when they were launching their wearables and talking about the excitement of moving in the digital space and how it supports their core business. that did not play out for me well as an investors. there was a lot of money wasted there. what makes you think that now you can do this in almost the same way and be successful? excuse me for being a skeptic, but when i see a big guy blow their brains out, what makes you better? >> kevin, you know i don't want to comment about competition, but i do know what we're doing in the soccer business is working very closely with those athletes and they've been wearing our product for months now. we've been using their feedback to build better product. this is still an industry where a product is king, and we think that we can build very successful product in soccer just like we have for years in track and field, and like we've done with major league baseball over the last five years. >> walter? >> i was wondering what you're doing to prepare for the apple watch, whether you think that will be a game changer? >> i think anybody who went to

ces this year realized how crowded a space this is. some people are projecting by '19 it will be a $12 billion business. think it's the relationship with consumers. as a private company, we love the fact we don't have to show our plans, but we will be in the space. >> as far as your launch into soccer, are you -- i mean isn't it all about sponsoring the big athletes and being all over the world cup? and spends a lot of money to do that? is that part of your plan? >> well, it certainly is an expensive business but we do think working directly with athletes getting their feedback and testing that product is the key to building better product and so far that's got us off to a nice start. >> and robert, i just want us to listen to kevin here on wearables and the way this is all going, this fusion of apparel and technology and then have you respond. take a listen. >> if you think in ten years from now we're going to walk around with these 3 x 5 pieces of hard glass in our back

pocket, no, absolutely not. i think wearables will equal apparel some day. >> why not make an aggressive move into that space or are you or is that going to be part of your plan here? is this more than getting into a particular sport or niche is really going to be the future? >> i think kevin's right here. i think the idea, these things are going to get smaller and more integrated and we're not going to be looking at our phones or watches. it's it's going to be embedded into the products. we again believe by working with the world's best athletes, we'll get the feedback on how to do that in the best way and we're excited about bringing those things to market. >> you think it's going to be big in the u.s. by the way, before we let you go soccer? >> absolutely. absolutely. there's more kids play soccer today than any other sport in the u.s. with the english premier league on television now every saturday and sunday it's definitely going to grow. >> yeah. you know, we hear more and more about it. robert demartini, thank you very much for being here ceo of new balance. you're going to see a lot more of them on the soccer field. coke pepsi, and dr. pepper may be soft drink choices this

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at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping.

it was a huge week for earnings and guess what next week shaping up to be some more of that. we're going to hear from some big names including coca cola pepsi, aol, tesla, kelloggs. you have to get your rest. what are you going to be focusing on? >> the big question for coke and pepsi is how much international did pressure they face? coke much more so. pepsi has business in russia. the ruble collapsed and has been hurting companies with international exposure. how are they managing the decline? thousand how steep was the decline and carbonated sales?

>>think inging, too, we're going to shift into that part of the earnings season and could be treacherous. >> yes. a lot of the companies are multinationals. you mentioned kellogg. talk about consumer habit sifting away from soda and soft drinks, also away from cereal. >> do you eat breakfast cereal walter? >> i do. >> you do. >> it's not my favorite -- >> breakfast isn't. i only wonder because to your point in a period of 10 or 15 years our diets have changed and gone the way of coffee and croissants. >> you gurt. >> one of the things i learned about cereals, 350 calories. raisin bran with milk. >> they put it on the side of the box. >> i like to use the app instead because you can shoot the bar code on the side of the box and learn it's a ton of calories. it reads the side of the box. it says yikes don't eat this. >> on front you'll see a big label that says protein included, good source of protein. that's what consumers want right now. they want to advertise the fact that there's in there, too.

perhaps that will turn along. >> the trend is not your friend when you think about -- i have a lot of 18-year-olds hanging around in my basement. they don't drink pop anymore. they're into health. they drink, you know active teas, stuff like that. i think the pop guys are going to have tough time the next ten years. >> that's the way a lot of the big ones have gone, it's acquire acquiring health-driven companies. we have that on tap for next week and will hear from tesla and others. how are the consumers going to remain in focus? again, the jobs report this morning plus the drop in gasoline prices if we stay here will be good signs. >> yeah, i really do think you see an economy coming back on almost every single front. our friend wrote about that this morning which is this really is an economy where you don't say, hey, here's the big problem in it. >> kevin, last word. >> i love corporate debt. 36 month corporate death. 4.5% yield. even if the market corrects, it's only 60% correlated. i think money is going to move into thtat and looking for a 8%,

9% return. >> thanks for being here on this friday. "fast money" is coming up with melissa lee and the gang. twitter had a big day yesterday. four of the traders at the desk were long. only one still has his position. >> oh, drum roll please. >> we'll walk through that trade tonight. >> straight over to you guys. >> have a great weekend. >> you, too. "fast money" starts right now. i'm melissa lee. traders tonight, tim seymour, steve brasso brian kelly, guy adami. stocks falling on news that s&p downgraded greece and concerns whether the fed could be start raising rates soon. we'll tell you how to play it. preparing for tesla's report. they'll take their positions tonight. twitter having a stellar day. three on the desk were long on last night's earning. we start off with the move in the markets today and concerns over whether the federal reserve could raise rates soon. this sort of seemed like it's good news/good news