pollo loco. grew up in california. >> we're going to deal with this market sell-off and gas prices and why consumers aren't putting their gas money into other retail moves. >> as i sit in traffic on the new jersey turnpike i will listen on sirius xm radio. this a great weekend, everybody. "closing bell" starts right now. >> thank you, brian and melissa. welcome to "the closing bell." i'm kelly evans to clotionse out this tough week for stocks. >> i'm bill griffeth. what can you say about this week? we itemized it every day, one big up day on monday a big down day on tuesday, quiet on wednesday, big up day yesterday, and today a big down. this is volatility personified. >> the vix right now up to about 16.5. i think we're off 1% on the major indexes. anything could happen in the final hour. the dow is off 220, the s&p is

off 20.6 and the nasdaq, that's the one that's off 39 as you can see right there. also keeping an eye on the small caps. flipping through and looking for the names as they get more attention on the valuation here and more and more people want to play these as a way to protect themselves against some of these external currency moves. watch this index for signs of overvaluation or a pull back. >> what's calling the shots today? oil has been continuing to move lower on more evidence of ever higher inventories in this country. we're still just pumping like mad and filling up coffers around the country, so the price of wti crude is now at $45, and brent north sea closed below $55 a little while ago. and, oh, by the way, the dollar continues to move higher as well. so we're now at $1.05 at this point. >> look at the round number on the dollar index. 100. it was not that long ago this thing was trading in the high

70s. a huge move. again, a lot of that is against the euro but it's not just the euro it's other foreign currencies as well. >> it contributed to the producer price index combining. kathy jones from charles schwab is back with us. so is steve parker from jpmorgan private bank. ken mahoney from mahoney asset management. joe heater from cirrus wealth management and our rick santelli is standing by in chicago. ken mahoney, you say this market is acting like a spoiled child. >> it's been getting everything it wants. for the last couple years we've had fed funds rates at 0% and now we're talking about raising rates and we have this tantrum like the taper tantrum we had. we should all embrace higher rates. we need some ammunition for the fed here. we can't hover around 0.25%. we need to normalize rates, maybe 2% 2.5%. give them some ammunition to sustain this economy so in case

we falter, we have something to work with. so we're still very constructive on the market. we think the fed eventually we'll see this as being decoupled. when fed rates go up it's a sign the economy is getting stronger. >> speaking of that rick santelli, the big date next wednesday, march 18th. that's the fed's next meeting. everybody here waiting or putting this their guesses as to whether that patient language comes out. how do you think the market trades if that language does come out? >> pretty much like it's trading now, which to me is one of the major issues that i think the fed should pay most attention to. we are kind of going through the withdrawal anxiety that's going to be necessary. some day it's got to happen and i think we're at least partially through it. i think it's a good time to keep normalizing rates, and i want to underscore this. especially now. because what's going on in the eurozone opens a window for the fed to have normalization whether it's throwing some of the reserves in a marketplace that really needs some high

quality collateral like treasuries or even if it raises rates to normalize a bit, i think what's going on with europe makes potentially a better climate to do both of those things. just remember the ecb says we're doing qe we have plenty of bunds, and i did a piece today going, dude where is my bunds? if you look at the fact they've had a surplus in 2013 a big sur plus in '14, we're seeing budget surpluses in germany until 2017. why are they going to issue any paper? when we had faux surpluses in the clinton era, we stopped issuing 30-year bonds. i think it's the perfect time for the fed to do what makes the market nervous and i agree with the guest. it's a market. if it goes down so be it. that's the risk of being an investor. >> yeah. kathy jones, what do you think the fed is going to do? when you consider the backdrop right now, the producer price index lower and continuing to move lower as the dollar moves higher here. do you think the fed is likely

to remove patient from its language and start setting us up for a rate increase when inflation is not on the horizon? >> they seem to at least by their comments seem to be moving in that direction of removing the patient language. i have to wonder if the rise in the dollar and the drop in inflation numbers doesn't give them some pause along the way because, frankly, we have import prices falling by 8.5% on a year-over-year basis. >> wow. >> and even -- it's not all oil. it's a lot of prices across the board. you have the dollar rallying very strongly which is only going to reinforce that decline in import prices and wages are growing at about a 2% pace. so even though the unemployment rate is down to where the fed thinks it should be to start igniting higher wages, it's not happening, and as you mentioned earlier, consumers still haven't decided to spend that windfall from energy. they're saving it. so i don't know what the hurry is on the part of the fed.

>> steve, going back to a point rick made it's one that has a lot of people scratching their heads because it's a little unusual. they're saying there's not enough bonds out there, maybe even enough stocks or other assets for the european central bank to buy. what are you seeing in terms of how that scarcity is pushing up prices and what should be done about it if anything? >> well without question you're seeing global assets around the world being reflated. one of the things that i think is really important, and rick touched on this if the fed raises rates on the short end, and they're going do it only when they feel the economy is in a position of strength all of that easy monetary policy around the world is creating huge demand for longer dated assessts we doesn't mean we're going to necessarily see a major impact because of all that central bank buying. >> joe, the volatility continues and you think we're in this for a while. i mean what are the cross currents? are you likely to want to buy the weakness or sell the strength as this volatility continues? >> well, that's a tough one this

week because you'd have to be reacting an an hour-to-hour basis, day to day. but anytime there's a basic change and i think we're basically at a crossroads. we're focused on fed policy, the same kind of volatility we saw when they started talking about tapering and, you know, we were going to see the end of the bull market, the economy was going to slip right back none of that happened. i think it is a good time to be looking at raising rates in a very modest fashion and setting the stage for long term to normalize interest rates. >> a lot of people have been bargain hunting in the energy space. rick, you're the pro here. don't you think oil is trading in a way that suggests it could easily move another 10 bucks to the downside? >> so what? so it moves $10 to the downside. i really don't think it's the end of the world, and i don't think import prices being down is the end of the world. what's wrong with a middle class

in america getting a blue light special on buying some of these products that are being ebsxported from other countries? >> as long as middle america -- for people who are investors, rick, and looking at the space, they need to be cognizant -- >> but if investors have been accumulating this these sectors for 3 1/2 years. maybe they should be a little wary. all i know is i see a lot of private placement deals move this painer. i see shadow banking moving a lot of the paper. i still don't think it's a problem. markets go up markets go down. that's life. >> we shouldn't be surprised also by oil here. any asset class or sector that gets beat up like that comes straight down, then it bounces up a little bit and that's a counter trend rally or a short cover rally and then it goes back and retests. that's where we are right now. if you look at the technicals whether it's an asset class or even oil, this is how it plays out. now the question is whether it

stabilizes after it retests. this is how markets work. >> are you going to buy energy then here? >> i'm going to wait for a little bit more. i would like to see throughout -- baby with the bath water. we're not quite there yet. >> wow. that's a question as well we'll quickly ask you about, joe. you mentioned looking around for value. what do you think about energy? we're going to talk about exxon specifically in a moment or where in general do you -- what do you like here? >> well i mean i like energy but i think it's a little bit wait and see yet. i agree that i think there's room to fall and i look at it as a net positive as long as you're not holding or an employee of an energy company. it's great for the american consumer. it's great for putting money in the pocket of all classes, not just the middle class, but everybody. >> kathy jones, you know clearly the dollar/euro

relationship is narrowing to the pointed where they're expecting parity at some point in the near future. what's the view at schwab? how much lower do we go and what does that do to interest rates in this country do you think? >> well we think it could be a multiyear bull market for the dollar particularly against the euro. i'm not sure it will stop at parity. i could certainly make the case that it can go well below that maybe into the low 90s. and the reason is it's really what europe has to get going is a cheap currency. it's helping the exporting countries like germany tremendously. other than that, bank lending is still pretty constrained. there's really nothing going on there. it's the impetus europe is trying to use to gert the economy going and the u.s. doesn't need really a cheap currency to get the economy going. it's going along okay. so i think dollar could have a couple more years to the upside here. >> so we don't have to book a flight to europe this summer necessarily and be in a hurry.

we have a couple summers. >> i'm planning on it. >> a research trip maybe? >> i have to investigate some things in the soult of france this summer. >> thank you. appreciate your comments on the market on what has been an incredible week again on wall street. thanks, everybody. we've got 50 minutes left. >> we do. the dow is off 219 points. s&p is off exactly 1% right here. the nasdaq off 40. a little bit of the over achieve achiever during the session. >> we'll find out why morgan stanley chief u.s. economist thinks the fed will not start raising interest rates maybe until next year. now, if she's right, then why are stocks selling off now? we'll ask her that and more. >> also ahead, crude oil plunging again. we will get a live report from the oil pits coming up and what does the oil shock mean for exxonmobil? is this a stock worth buying on these dips? we'll ask when we come back. i'm angela and i quit smoking with chantix. my children always wanted me to quit

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if it's friday, it must be sell-off day because yesterday was a rally day. that's how it's been working. >> as much a rhyme or reason as anything lately. >> down over 200 points on the

industrial average. just off the lows of the session with the s&p down 20. the nasdaq down 38. last i heard, i don't know if that's still the case but we turned negative for the year on the major averages at the lows of the day. >> that sounds about right. only two names in the positive on the dow today as you just saw there. microsoft and verizon. everybody else in negative territory at least for today. even amid all this stock market volatile, a new survey shows more around more renters are planning to buy homes in the next year. so our di arn that olick joins us now with the reasons behind this shift. hi diana. >> look the number one reason is rising rents. not only are they at record highs but they just continue to climb, especially in larger cities where young workers want to live. in addition, the job market is improving, consumer confidence is returning to housing, and that is changing outlook. about 5.2 million or more than 12% of current renters in the nation's 20 largest markets say they plan to buy a home in the

next year. that's according to a new zillow survey. that's a 25% jump from the same survey zillow did a year ago. here is the problem. too few of these for sale. listings are low across the nation. less than a five-month supply nationally and lower in many major markets. six-month supply is considered more balanced. that's leading to overcrowded open houses and bidding wars that have pushed prices up higher faster. we did see shrinking price gains last year and that was a good thing helping affordability and first-time buyers but with so little supply and increasing demand, prices have nowhere to go but up. demand is also getting a bump from just the slight raise in interest rates? why? because buyers are afraid if they don't buy now, they're going to pay more later. back to you later. >> thanks, di arn thatanna. jo joining us is mr. wonderful, kevin o'leary.

what's your view of real estate? would you buy a home these days if you were renting? >> i think real estate is the worst investment idea anybody could have right now. just in front of rate hikes from the fed -- >> still, kevin? come on! >> absolutely toxic waste. radioactive waste. rent, do not buy. i tell everybody that. this is the time to be a seller. sell into this market take the dollars, invest it make 4.5%. you'll never make that in real estate in the next five years. this is an asset class that people forget. for 15 years now we've had nothing except rates going down. of course real estate goes up in that environment. of course it does. watch what happened when rates go back up. don't touch real estate. >> what about rising rents? what about sky high rents? >> here is the truth about rents. you take a city like boston where i live or new york city you can still rent and impute a 30% difference in other words it costs you 30% less to rent a condo than buy it. >> kevin i'm going to tell you something -- i just bought a

condo. >> i didn't know if you were going to say that publicly. i was thinking the irony. >> at some point the value proposition was actually a great one i have to say. just going through it myself. maybe it's because, kevin, you're in the middle of some really, really expensive markets in boston and new york. >> but it assumes you're buying as an investment. what if you just want to live there? it's never going to cost this little as long as rates are this low before the fed starts to raise, right? >> for most people their largest investment and their most illiquid is their home whether it's a con or a standalone home. it's 30% of their net worth, 40%, 50% of their net worth. there's room for thought and debate on the issue that if you put the same value of a house in a bunch of corporate debt paying 4.5% for the next five years or bought a house, i think the bonds are going to win. that's what i think. >> but you're thinking about it

as an investment. you can't only think about housing as an investment. what are the most popular shows on hgtv? the ones where everybody is renovating. remodel is at often all time high. people love to do things with their home. you can't do that in a rental. you talk about boston. i talked to a real estate agent who said she had over 150 people at an open house in the snow. that's just common buyer demand from people who want to own -- >> let's have this conversation after the first 25 bip rips through the real estate market and people start to think about rates going up. it's highly sensitive to rates. even 25 basis points can peel 10% off real estate prices. watch it happen. it's coming to a theater near you you. >> i will say, diana, what you're describing in some cases plays into a kevin's market that this is a seller's market. >> it's a great seller's market.

it's actually a great seller's market because there's so little supply out there. >> not a problem. not a problem. wait just give me one rate hike and then let's get together again. >> what do you think is going to happen? isn't that the time people will be rushing in to buy because they do not want to miss the bot tonl in tom in this market, kevin? >> i think what happens in the first rate hike is you start to think to yourself all right, i have been in an environment for so long where there's been no pressure on rates and immediately shows up in the mortgage market. when mortgages cost more, there's less demand for housing. it's small incremental moves -- >> except that isn't happen last time around. when the fed raised rates it co-insightedded with mortgages going up. >> we've had floating is up 3% mortgages for so long. some people will be saying i can't afford this anymore. i'm going to sell my unit now.

>> but they're not floating rates anymore. the sub3%s that everybody refied into, those are fixed rate. more people have fixed rate loans and that's yun of the reasons they're not selling is because they don't want to trade up to a higher mortgage rates. >> there's plenty of floating rate debt. people have been put in a place in their heads that rates will gefer never go up. rates are going to go up and it's going to send a shock wave through the market. i think the volatility we're seeing in equities is anticipating the first 25 basis points. go back to 2004 and 1999 and see 6% swings in the indices when there was just talk of rate hikes increasing. that's why it's happening now. >> all i'll say is my inbox is lighting up with people giving examples in their area of how much cheaper it is to buy than rent. your point about what you can do with the property given the history we've been through is well taken. >> and you will still be invited

to the housewarming. >> we're sort of a beer kind of household here. thank you kevin and diana olick. >> we have 40 minutes left in the trading session on -- what a finish for a volatile week. the dow down over 200 points again. the s&p down 19 and the nasdaq down 36. up next, oil cascading off a cliff again today. that's adding to the market weakness and exxonmobil is near its 52-week low. is this a buying opportunity for this major cap? that's next. i'm type e. my golden years will not just be gold plated. i had 3 different 401(k)s. e*trade offers rollover options and a retirement planning calculator. now i know "when" i'm going to retire. not "if." there's a gap out there. that's keeping you from the healthcare you deserve. at humana, we believe the gap will close when healthcare gets simpler. when frustration and paperwork decrease.

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welcome back. 35 minutes to go. the dow is actually coming off the lows of the session. it's off 195 points but we were off close to 250 a little bit earlier. heading into the weekend some people may be taking off positions waiting to see what the fed will do. in any case not much green on the dow, only one or two names are positive. the s&p is off 18 and there's the heat map. let's see, about a 9 to 1 ratio of sellers versus gainers on the session. >> easily. and crude oil will be hitting the skids hard today. courty, what is driving the drop this time? >> it's the strong dollar and that supply gut. really though every single factor is bearish. it's hard to find anything that's going to push oil prices up. though i know some traders are hoping something eventually will. we broke below that $45 level. that's pretty much a

psychological key support level. we settled at $44.84. the lows we've seen since about january, and this actually also marks the worst week in about three months for oil pricing, and again that dollar divergence with the price of crude oil, it makes sense and we see it really clear lirly when we look at the chart. off strong dollar pressuring crude, u.s. supply levels for the stockpiles of crude at 80-year highs. the international energy agency saying that it continues to defy expectations expectations. lastly, we have that rig count. it is at a four-year low, but it really hasn't done much to move oil. not at least the last couple of fridays when you've gotten that updated number. one trader i know is putting his neck out saying he's going a bit long thinking at some point that rig count is going to have to start to push prices a little higher. we also, of course have the fed next week. there's a lot going on here but technical or fundamental, whatever it is it seems to be

pretty bearish. back to you. >> thank you very much. i remember one oil executive telling us not too long ago it will be a while before they can put the brakes on oil production in this country. maybe june -- >> june of which year? >> well, you know, if there's a concerted effort to drop production production, it's june of this year before we actually start to actually see that happen. >> do we need an opec of our domestic oil patch? >> that's for another time. >> oil's decline has hit exxon stock pretty hard, down about 10%. >> let's talk about that with a bull and a bear. jeff reeves from everyplace.com likes the stock while ian wooineiner wouldn't touch it. why wouldn't you touch exxon? >> bottom line is those trends are still in place. i think we're probably only in the second inning. you just had the exxon ceo at his analyst day last week say that he doesn't expect things to improve in the next two years

and to expect supply to remain high and the global economic conditions to remain weak. so i have yet to see a stock that's based on an underlying commodity where i expect to see underlying commodity weakness that isn't going to respond the same way. and, you know, 9 out of 10 traders i talk to all want to buy oil. they all think it's time that it's going to chop around but stabilize into the second half. and so my sense that the fear trade, the one that is going to catch most people off-guard is a move to $35 in crude. >> so well put, jeff. we hear the same thing. almost all of our guests always like buying energy. how much is that kept exxon price as high as it is now? why do you think it could keep going higher from here? >> let's not say exxon's price is high. it's plumbing 52-week lows. i don't think it's been rally. i'm not going to debate whether or not crude could go lower. i think it could. the important thing to remember is the equity markets are forward looking indicators.

it's not like even if oil does bounce off the bottom and i don't know if it's at or near a bottom. it could continue to stumble around for the next couple months, that's not to say people won't start to nibble at exxon. i'm a believer in long term investor. it's a widow and orphan stock. they have $40 billion in the bank. if you're a long-term investor who wants to average in, why not start doing that now? >> ian, if you're looking at a five-year time horizon, would it behoove you to start nibbling? the yield is 3.3%. that's nothing to sneeze at. >> that's all great but in the long term we'll all be dead. >> fif years. >> let's say in five years. at the end of the day i don't see any reason why in the next two years i need to be there. so to say i'm going to put my money away for five years in exxonmobil

exxonmobil, it doesn't make sense to me, and, you know, the fact that they may have to actually raise more debt and all the other things that are going to happen it doesn't seem like it's the kind of name i need to be in right now and if anything i'd rather be short it. >> jeff, what is your price target before we go? >> a price target on exxon? i would posit end of the year it will be up maybe 10% from here. i wouldn't say it's going to go like crazy, but i kind -- i grate at the notion there are better stocks out there. i'm going to chase a sexy name like boxalibaba. you don't like exxon but you're going to trade twitter? i think long-term investors can have confidence averaging in with a 3.3% yield. >> a lot of anger, jeffrey. have a great weekend. you can tell a very contentious, controversial topic. >> it is one of the favorite water cooler discussions going on right now. what to do about oil and those oil stocks.

let's get to our business news update. here is sue with the headlines. >> here is what's happening this hour. officials have released the names of the seven marines who were killed when a military helicopter crashed off the coast of florida. that occurred tuesday night. a salvage barge has been contracted to complete the recovery of the aircraft which went down in a thick fog. lobbyists say top house republicans and democrats are working towards a $200 billion agreement revamping how doctors are paid for treding medicare patients. the deal would end a formula that for years prompting lawmakers to block unrealistically deep cuts in doctors medicare reimbursements. john brennan speaking in new york said social media and other technologies are making it increasingly difficult to combat militants who are using social media to share information and conduct operations. and four years after the nuclear disaster in japan workers in fukuishima are finally moving contaminated soil to

storage facilities. the government launched a product on a trial basis. the waste will be kept in those facilities for 30 years. that's your cnbc news update at this hour. kelly, up to you. >> thank you very much. 30 minutes to go into the close. the dow is off 190. a tough session. we'll see if the week closes out in positive or negative territory. a tough climb at the moment. >> i have seen art cashin wandering around but i don't know what the imbalances look like at this point. new data showing it's even worse than we knew when it comes to active fund managers getting walloped by their index rivals. our jeff cox will tell us later just how badly they have been underperforming and if that's about to change if this stock market continues to sell off. and up next, find out why m morgan stanley's steve u.s. economist expects fed chief yellen to wait until 2016 to hike rates. don't go anywhere. it's a fact. kind of like shopping hungry equals overshopping.

welcome back. 25 minutes left. let's face it this is a sell-off today and you can see that all ten sectors of the s&p 500 are lower right now. >> the u.s. economy though kind of choppily continues its recovery. so all eyes remain on the fed,

specifically when these rate hikes may begin. >> our next guest is predicting the fed will not move on rates until next year, 2016. here now to explain, she's at post 9 with us managing director and chief u.s. economist ellen zentner. you're among the outliers. people are saying it could be june, october, but you're waiting until next year. why? >> we're waiting until next year because, you know, there's a difference between what the fed wants to do and what we think they will be able to do. the fed wants to raise rates this year. i mean i take the vice chair at his word. last week he said plain and simple, we want to raise rates this year. but we don't know what will happen between now and then and that is the nature of a data dependent fed. if you go to data dependency only you can't say what happens between now and then. >> what data is holding them back? >> so the price data, corep pce,

which is important. they don't need it to be at the 2% goal. gentleman janet yellen has said that but right now it's moving further away from goal and also the lack of pick up in nominal wage growth. we know that's coming. we know we'll get tight labor markets soon enough. i think it's the prices that are a real problem. and what we have right now is two factions on the fed. one faction is willing to put faith in the outlook that all of the pieces will fall into place even in a rising interest rate environment. i would put williams in that camp. and then there's the other faction that wants to see proof from the data. they don't want to go on faith. they want to go on proof. if you want proof in the data and they're looking for a turn in prices a turn upward this dollar is going to make it really hard to get that. >> how much has the strong dollar, king dollar as we're calling it how much has this upward spiral tightened already

for the fed, if you would even put it that way? >> it's a good way to put it because the fed does look at the dollar in the context of tighter financial conditions. for every 1% increase in the value of the dollar it's the equivalent of a 14 basis point widening between the two-year treasury and the 3-month t-bill. it trumps the boost we get from lower yields. that's how the fed looks at it. plus, it slows our export sector. it feeds through. we deport deflation through prices. this is something that will be pervasive in the statement next week even as they remove the word patient because they want to be data dependent but we think that dependency will raise them to not be able to raise rates as soon as they want to. >> there are people who feel there be would no harm taking patient out and maybe raising the rate one time in june and then let's see what happens. it's not when they start, it's how aggressive they are once they begin the process. >> so that's the camp that says

let's start early and go gradual. do you want to take that risk? as a policymaker, this is a post-financial crisis world. do you want to take that risk? >> you seem to suggest when they do start raising rates, if they do it now, it would do harm to the economy. >> yes. if they raised rabts edd rates now. i'm among the camp that says this is a fed that likes to err on the side of caution. this is a fed that buys into the asymmetric risk to tighten policy. and it would be a policy mistake if they went early because you just don't know. they could raise rates and it falls on silent ears and we see no response at all and in that case dudley said well if we raise rates and there's no reaction no, tightening of financial conditions, then we'll go again. >> here is a question -- >> and if it doesn't tighten, we'll go again. >> 2016 presidential election year. are they really going to go in 2016? >> we hate to ever assume the fed is led by political posturing or plays into politics in that way.

they never do. but we're going to go down that road and be discussing that. there will be in a policy tightening cycle in 2016 even if they go as late as we think and people will try to draw a line to how does that play politically but it really doesn't. >> they may not want to but it would be perceived that way whether they would want it to or not because of the timing. >> absolutely. and so let's say that there was a policy mistake. fed starts raising rates early, ends up being more aggressive than the markets can take. the knee-jerk reaction is so severe around the global economy because no one really knows how it's going to adjust to a higher fed, and let's say that they ignore that asymmetric risk. the economy goes down the tubes, all right, and we get a recession. we've never kept an incumbent party during a recession. it's always switched to the other party. >> so it's something to consider and these are all the cross currents that as we approach 2016 will certainly be on minds -- >> something for political

pundits to consider but the fed divorces itself from any type of political leanings but as you say, it's always -- fed policy always comes into play and even more so during election years or around election years. >> it's unavoidable. >> it is unavoidable. >> ellen, good to see you. appreciate your thoughts today. >> thank you so much. >> ellen zentner. heading toward the close. 20 minutes left in the trading session. the dow down just 162 points now. >> tells what you kind of session and week it's been. up next it is friday the 13th after all, so dominic chu has a special report on what's spooking these markets today and what could happen next week speaking of the fed, that could make things even scarier. we're back in two. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light

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it's trained by doctors. and it's always learning. it can help find hidden correlations and help your doctor recommend treatment options for you. there's a new way to work and it's made with ibm. welcome back. getting close here to the close anyway. a little bit closer to positive territory, but still a ways to go with 15 minutes left. the dow is off 163. that's good for almost 1%. the nasdaq is only off half a percent or 25, the s&p down about 15 points. >> it's not your imagination today is the second month in a row where we had to endure a friday the 13th and there's another one coming later this

we're. dominic chu tells us what's spooking these markets. >> the market fear factor is this idea today among the number of factors, the plethora of them, the multitude, the dollar strength, the continued dollar strength. also what's happening with the oil markets and energy markets overall. hue here but here are some things you want to watch out for in terms of fear factors for next week. let's look at some of the market fear factors. first of all, fed ex it's a company specific story microeconomic in nature. they report earnings on wednesday. this is a large component of the transportation index. in terms of the dow jones transportation index, it makes up about 12% of it. so transportation stocks all often seen as some kind of leading indicator or confirmation mechanism for the highs we have in the market. we'll see if that happens. then we have another company story, lennar but also macroeconomic because we have

not only their earnings coming out on thursday premarket, we have housing starts and building permits. housing economic data coming out on tuesday. housing has been a strong momentum trade over the past few months but it's starting to roll over a little bit rye nowright now. we'll see if earnings can help it find some stability. and the last one here. she needs to introduction. it's janet yellen. it's the fed. it's the tuesday/wednesday fed rate meetings ultimately with the decision and the one key word and i will channel my inner gun ss n' roses, it's all about patience or the word patient. will it be in the statement in does that provide a catalyst for more nashth volatility in those three are just a few of them. obviously a lot of them out there but janet yellen probably the top of the list for market fear factors next week. back over to you. >> thank you, dom for now on the second of what did you say there are going to be three friday the 13ths this year? >> i think it's in november.

>> tomorrow is ultimate pie day as well. that's an important one to flag for your viewers. >> make mine apple. >> 14 minutes to go to the close. speaking of numbers, the dow is off 170 points. now, that nasdaq last week closing above 5,000. this week 4,866. off 27 points today. >> she's behaving herself but you have no idea how excited kelly is for pie day. >> you will get another reference tomorrow. >> $100 million to the sell side. i just got the hand signal from art cashin. so there a slight bay yas to the downside. keep it here. we'll see what we do going into the close in just a moment. stay tuned. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

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ten minutes left a little less than that with the dow down 159 points. we keep inching ever higher here off those lows of the session. joining me right now as we head towards the close independent investment consultant david darst and our own bob pisani. a lot of indecision a lot of debate. what is oil going to do? what is the dollar going to do? >> what is the fed going to do? and therefore what do stocks end up doing? >> i think you're going to face a two quarters of negative

year-over-year profit comparisons. so you're going to have a profits recession in the first quarter and the second quarter. >> because of the dollar? >> partly the dollar and the oil prices being down. bob has talked about that. you had ellen zentner on who is a brilliant economist and she just lowered her number from 3.5, the tracking number for fts irs quarter, to 1.9. the fourth quarter was revised from 2.8 to 2.2. the next number will probably come in at 2.4. you got profits down -- sorry, you got confidence down retail sales down china down. i'm amazed the market is holding pup. >> very good point. you have the dollar and now oil has come back to bite us on the shoulder and next we're going to have the fed in higher interest rate anxiety. it's no wonder we're having a little trouble dealing with the market, but still even if we dropped another 50 points on the s&p, which is quite possible next week we go to 2,000, it's still 5% off the highs. it's still another 5% garden variety pullback even if that

happens. >> we're like a baby that's eating cake icing for dessert. we need some cake and cake is growth which will expect to come in the second half. we've said buy europe buy japan, and buy apple. that's where you want to be for the time being. >> we had an analyst at the beginning of the hour who said this market is acting like a spoiled child, and you can make the case it wants everything. we could make the case right now, you just did, that if profits are going to be slowing down, the stock market goes lower, but you could also say, gee, if the economy is heating up, the fed would be starting to raise interest rates, and the stock market would go down because of that, right? >> i would love to hear your most experienced opinion on this. confidence dropped this week and retail sales down. the consumer is actually taking that additional money and saving it. >> i think it's also possible, you know this you're a market historian, it's possible for the economy to improve and under these conditions we're seeing now if the stock market stays sideways because of the profit problem, i do think it's a

serious headwind now. you have negative growth for the first quarter and the send quarter and they're going to get hard to dig out. i think we could have an improving economy and a sideways to slightly down stock market. >> is there a risk of contagious from a ukraine, a brazil a venezuela. finally, there's irrational behavior. whether it's by putin, by opec. we talked about this a couple week ago -- >> this week look at germany new highs, japan had a great week again. two countries both devaluing their currencies essentially. euro and the yen. and outperforming the u.s. >> the nikkei hit 19,000 this week. first time in 15 years. >> that's exciting. >> sounds familiar, doesn't it? >> currencies do a lot and

american tourists are going to europe this year. we're coming off the lows. the dow down 144. i'll bring these two guys back as we head to the countdown to wrap up a crazy friday. the trading cannot end soon enough for some of the investors. we'll be back in just a moment. stay tuned. you can find a new frontier. there's nothing stopping you and a lot helping you. technology that's with you always. this is our promise. it's never been better to wander because wherever you go, you'll find us doing everything we can, so you can.

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the conversation just continued. do you think they're talking the weather or march madness? no. they're still talking about the economy. we're is this wild week. we've had a rally here in this market in the last hour or so. the dow was down over 200 points. it's now down just 117 and still moving higher here. but this is the dow this week. that rally on monday the sell-off on tuesday, the sideways action on wednesday, the rally yesterday and the sell-off today, although we are coming off that low. what was calling the shots a great deal this week the price of oil as more evidence came out that we are getting a lot of inventory build up in this country. this week the price of oil just continued to move lower, and for the week for the week david darst, price of wti crude is down over 9% and the dollar continued to strengthen. >> the united states is swimming in oil, whereas brent they talk

about a little bit of tightening overseas. so brent is up 26% from its low of mid-january whereas the inventories are still so high here, bill. and the economy, the chicago purchasing managers index, thei sm manufacturing, you've got next week philly fed, industrial production and empire state, so we'll get a better look at the underlying. to my mind this is a classic replay of last year and it will pick up in the second half. >> as long as the dollar continues higher and there's no expectation it won't, import prices are going to continue to go lower. they were down 8% in the last period here. can the fed actually talk about raising interest rates when we don't have the inflation targets anywhere near what they've been expecting? >> that's where ellen zentner's call of a march raise in the rates, next year march of 2016 makes sense. the fed cannot have the dollar strengthening on raising

interest rates over here right now. we are in a global competition currencywise and interest rates. you have china india, thailand and korea have lowered interest rates. >> you're texting over here. what are you doing? your taxes? >> texting to see why the heck are we rallying? chevron is rallying in the last 15. exxon has been rallying. it's only down fractionally right now. walmart just went positive. we're getting sort of a broad -- i want to know if anybody notices anything. >> the market is acquitting itself well. >> small cap is rallying. the russell is moving has a shot of going positive. nobody said anything to me at least while we're standing here but it's a nice close here right now. let's put it this way, this is a lot better than going the other direction. >> right. >> not having been said the down volume is 4 to 1 against the up volume today, bill. >> hasn't been that heavy though this week but it has been very

very volatile. good to see you, guys. >> thank you. >> have a good weekend. so we're going out closing out a very volatile week to say the least with the dow now down 141. so we've had volatility just in the last couple minutes. here to wrap that up and look ahead to a crucial week next week second hour of "the closing bell" with kelly evans. have a good weekend, kel. welcome to "the closing bell," everybody. i'm kelly evans looking at the "dancing with the stars" judges here at the stock exchange to ring us in. we'll see how the market judges the market during a volatile week. the dow going out with a decline of 143 points. that most likely leaves it in negative territory for the year. the s&p off 12 to 2053. the nasdaq off 21 points to 4,871. joining me here at post 9, cnbc contributor jared bernstein working on his voice a little bit. >> a little off today.

>> welcome susan from the new american foundation and robert frank. and with us for more on today's slide in the markets and oil, steven short joins the conversation from the short report. "fast money" trader brian kelly will be joining us. welcome one and all. rocket your thoughts here on what's happened. >> it's dollar driven. the dollar and this really fast move is distorting so many things in the world from new york real estate to stock prices. you look at what's happening with small caps. small caps were in the dog house. now they're doing well only because they are more insulated from overseas earnings. it's really hard to read any connection between these market the real economy, and what consumers and investors are really thinking because it's all dollar driven and we don't know when it's going to stop. >> what's the perspective, the d.c. perspective on this dollar move for you guys? >> well one thing to worry about with the dollar is the trade deficit. when you have dollar that's appreciating as quickly as this dollar has, it leads to a higher trade deficit, slower growth.

there's an interesting dynamic here that's troubling for the president who is trying to sell the transpacific partnership trade agreement. strong dollar bigger trade deficit could be an issue there. >> there's been a lot of mixed messages from this economy. jobs are good but wages are weak. consumer confidence is good but retail sales have been week. i think there's a lot of confusion mucking about in the market. the market came back a lot from where tvs earlier today. i think a lot of that the fed is in the quiet pert beforeiod before the fomc meeting. >> the price report this morning, the producer price index, you know out and out deflation and it's not just energy. energy was actually flat last month. year over year it's been negative, not just month over month. month over month it's been negative four months in a row. >> food prices, health care costs are coming in? >> food prices were in there but a pretty bross based deflation.

>> often it does work through into the consumer price index. steven, let's talk about the biggest drag if you will on inflation. obviously that's the drop in oil sips last year. how much further downside do you think it has? >> i think we're at that spot where we've gotten some short-term demand in the market. we have the storage arm so people are buying a lot of oil now, sticking it into tanks, selling out the bank end of the curve. that will continue until that capacity is maxed out. that sets the template for lower prices because once you max out the capacity you're going to have a fire sale in the market. we have strong demand for through put, refinery demand. the product markets are trading at a 30% premium to crude oil so the refineries are burning an extraordinarily large amount of crude oil today and essentially stealing demand from the future. again, once product markets begin to glut it will kill refinery demand. and then we have the other two. first and foremost the weather.

very cold february right? so we have very strong demand for heating oil. but the biggest wonder of it all is all of the retail investor money piling into the uso in the etf. buying the uso is the dumbest thing you could be doing right now. so we're really setting ourselves up to break that mid-$40 support level. i think we head now below $40. >> wow. what do you think then stephen, i appreciate your candor on all of this about the u.s. government, the support that the department of energy may be buying crude to add to the strategic petroleum reserve? >> well we made the correct decision a few years ago during the libyan civil war when we released 30 million barrels when the market was around $9,100 a barrel. so why not buy that oil back at $50 a barrel? quite frankly, that's what the chinese are doing, that's what the indians are doing. i don't know why it's taken us so long as to do this but it's the prudent move at this point.

mind you, keep in mind look, oil prices are the canary in the coal mine. you do not get a 50% cut in oil prices, a 25% cut in copper prices a 25% cut in aluminum prices a 25% cut in lumber prices, all key industrial commodities. what is that telling us about future demand and what is a portent of the economy -- yes? >> i'll come back for your thoughts. i want to bring brian kelly in. is it the case this decline in all the commodity prices is fundamentally a bearish sign for demand or are we just coming off as brian reynolds would put it the subprime and commodity boom so we're adjusting to a new normal that could be good for demand? >> listen yes, there is some of that. we've had a boom in the oil business. we've had a boom in supply. but let's look at it this way. as stephen said we've had a 50% decline in the largest, most used commodity, most traded in

the world. now, there's two reasons for that. either oil supply doubled or demand got cut in half. we know oil supply didn't double. it's gone up a little bit but it certainly hasn't doubled in the last six months only. so now you have the other 50% cut in global demand. let's even just say 25% of that cut is just because people are afraid and it's market forces. you're still looking at a 25% cut in global demand. that is telling you something about the global economy, and it's not a very good sign. >> my only point is this and we'll bring dennis gartman into the conversation as well. welcome to you. we want to hear from you on this move on the strategic petroleum reserve. brian is making a point about fundamental supply and demand. isn't there another fact yoor to consider in the oil price and that's the financial supply and demand is it not? >> well first of all, i think brian got a little excited saying that demand has fallen by 25%. it's fallen demonstrably less than that. it's fallen but it's

demonstrably less than 25%. price kansas city move 50% when you only have a 2% or 3% at the margin cut in demand or an increase in supply so let's square that away first. as far as financials are concerned, the fact we've had such expansionary monetary policies by all the monetary authorities around the world, all things being equal should have sent crude oil prices higher, sent commodity prices higher and indeed they haven't. that does bear fact that global demand is for all commodities generally declining. economic activity is around the world weaker than we should have -- than it should have been. >> stephen what would you say? same question. >> absolutely. first and foremost one of the other biggest drivers of this is the rally in the dollar. there is a strong inverse relationship between the two. so as the dollar has rocketed higher, oil prices have rocketed lower. so it certainly is setting us up

now. the demand isn't absolute. we look at industrial production in china and india. it's going the wrong way. the situation in europe with greece, it's a debacle. here in the united states he keep on hearing that low gasoline prices are great because that gives me more money to spend in the economy. no. it gives me the same amount of money. i'm not spending more. it's a zero sum game. hence why, i don't know why but three months in a row with these very low gasoline prices we still have not yet to see this kick on into the retail sales numbers. so once again i think there are a lot of telltales out there that the economy, there is trouble down the road. >> i just wonder when are we going to start to see the pullback in productions. at some point you think normal economic forces it will equalize out. everybody was predicting that in december and we haven't seen that for three months. i would put that sort of to the panel. >> what do you think, stephen? >> you're not going to see it right now. think about it. a lot of the oil being produced

now is being sold against huges that were sold at $80 a barrel. the producers are getting strong demand in the spot market because of the storage arc and because of strong refinery demand. now you get a 50% cut in prices, this ishas allowed the producer to buy back the hedges at a $30, $40, $50 profit and rebounce and purchase puts for $70, $80 $90 and still realize the very good profits. so between that and the amount of debt that has to be serviced with all the steel that's sunk into the ground you're likely not going to see a pullback in production until the latter half of this year. >> jared? >> this idea that somehow people's paychecks should be going a little bit further because inflation is so much weaker so even if your paycheck is growing at 2% which has been the constant, if inflation is

1% that's more buying power. why is that wrong he said a moment ago, that this isn't something you would expect to boost buying power. >> because of my affordable health care my family premium went up $160 a month. that's great, i'm saving $100 it is gasoline tank but at the end of the month i'm $60 in the hole. i'm just shifting my money from big oil to big government right now. >> hang on one sec. >> health care premiums have been growing more slowly. >> dennis -- >> not for me. >> go ahead, dennis. >> not for you. just saying overall. >> i wanted to say one other thing about crude oil. first of all we have to remember the iranians are not reducing crude production. the saudis are not reducing crude production. the venezuelans are not producing crude production. they are continuing because they made promises to their societies, to their citizens

and they have to produce, they have to continue to expand production to meet cash flow demands. so we're not going to see deductions from production from anywhere overseas. two, stephen and i may disagree on this. i think the decision to buy crude for the xpr are -- was i will illinois-advisedill-advised. we have more than we ever needed. we should have been selling it. i think today was a one off, an attempt to buoy up crude oil prices. >> stephen, do you want to respond to that? >> i have no qualms with regard to that. i just -- right now crude oil is used as such a political tool at the point that i think if we went ahead and -- look

hindsight is 20/20. if we sold those barrels at $90 or $100 a barrel we would have looked at this as a jaundiced political move at this point. i didn't see that happening last year, but absolutely i think, look, we have oil in there. we had to release it three years ago because of a real global energy. just why not replace it right now? >> we'll leave it there. >> this is qe in the oil market. >> i was thinking the same thing. >> i don't think anybody would have expected this. this is quantitative easing via crude oil. >> i remember reading if only the federal reserve could pump crude oil and it seems now in a way that's what's happened. i can't even laugh at these jokes. they hit too close to home. thanks everybody. really appreciate it. dennis gartman, thank you. stephen schork. brian will stay with us. up next we have more of our special market sell-off coverage

plus a new report showing how much index funds have been outperforming active managers. if you believe the selling will continue are active managers where you have the edge? every investor needs to hear this. it's coming up on "the closing bell." stay tuned. it's one of the most amazing things we build and it doesn't even fly. we build it in classrooms and exhibit halls, mentoring tomorrow's innovators. we build it raising roofs, preserving habitats and serving america's veterans. every day, thousands of boeing volunteers help make their communities the best they

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we're joined by bob pisani rick santelli bertha coombs and kenny polcari swapping in here at post 9. jared bernstein, our thanks to him. let's begin with the market sell-off here and, bob, what you think is behind this. >> the concern and this is for next week now is that we get the triple whammy. so we get, number one, dollar strength euro weakness continuing with a lot of people taking the dollar index -- the euro could go to parity. number two, oil continuing to stay weak and maybe breaking through the january lows. got very close to that today. it will put more pressure on oil. finally, an interest rate spike as the fed removed patient. we don't know if they are, but this is the fear. you get that triple whammy and a lot of people think we could do to 2,000 on the s&p. we're 50 points away from that. the key is even if we do go there, i have been saying all

day, that's still only a 5% garden variety correction. i'm still not that concerned but it is a bit of a triple whammy. >> kenny is already fired up. >> i'm crawling out of my skin with this. if we go to 2,000, it's a 5% kind of move. it's not even a quote, unquote correction. when we talk about correction, you talk about a 10% or greater move. 5% is well within the band of normal market action. maybe a little under pressure. if oil comes under more pressure. but if we hold 2040 on the s&p, i actually think that's fairly positive. we tested it a couple times and we held and we've bounced off of it. if we break it i think you're absolutely right we go to s&p 2,000 which is a longer term 200-day moving average. >> remember i think we could stay in that band but if the euro keeps weakening, if oil drops below that level, and you go to 2.3, 2.4, 2.5 on the 10-year, that's a very potent

negative combination. >> that's exactly -- rick 2.4% on the 10-year is that the next stop? >> i personally think that outcome is highly possible but not necessarily the only outcome. i'll paint you another picture. let's say bob's anxiety about equity traders proves to be true. normalization scares them. he they like a one-way market and stocks go down. in that environment rates aren't going to go up as quickly as people think. the first order of treasury business is always that those investors like to buy more treasuries when stocks look a little nasty. i say this the investors have had a peachy environment since march of '09. maybe it's time they shift some of this back to main street. kelly, do you or any of your friends get to borrow money at 25, 30, or 40 basis points? no. when they raise interest rates

from zero to 50 basis points. i don't think it will impact people with car loans at 6.5% mortgages at 4.5%. it will be mostly felt by the investor class and i can understand that but i think it's right. what would happen in the crude oil market if the fed decided it's selling off too aggressively and they tried to stop it at $68. they tried to stop it at $62. you know what we'd have? we'd have a real market. until oil hits a real bottom, it's not going to get the right price structure. price discovery involves risk and reward not manipulation so i think the fed meeting has got to be big-time take patience out. >> brian kelly, jump in here. what do you say? >> well so listen. i think they should not necessarily take patience out. now, listen i'm more with rick where i don't think they should be doing any of this from the get-go but we're already in this situation. so if they continue to talk the tightening talk they're going

to push the dollar higher which could lead us to potentially a dollar crisis when several trillion dollars worth of carry trade has to unwind and it will push commodities lower. that's the part i think is a huge problem for them. now, on the other side let's say they decide like rick said things are going too fast too far, too low, let's stop this let's keep patient in and maybe even at some point in time go back to quantitative easing. how do you think the equity market is going to react to that? i don't think very well. that would be my opinion. >> let me bring bertha coombs in. were there any ports in the storm in the nasdaq? it did hold up relatively a little bit better? >> it wasn't too much today but if you look at what happened this week we saw this week the one index that was up was the russell, the small caps are now sort of attracting a little bit of a port in a storm and part of the reason of course is biotech which can be very volatile but the byiotech

indices closeed at now highs. it looks like investors are starting to say let's look at these companies, these smaller companies that are here have most of their investments, most of their business here at home. and the ruby tuesdays the local chains, not the yums of the world, those are the ones that are starting to really attract a little more investment. will they be hurt with a stronger dollar if the whole market pulls back? likely, but for the moment investors are starting to like them. and the small caps are now up 6 of the last 8 weeks. >> they're pretty expensive though susan. >> they are, and i think if you look at other broad sectors of the market like the financials they breathed a sigh of relief after the stress test. i think they're positioned in a good place. there will be ups and downs, but generally they have the capital in the right place now. they're starting to make changes in the business models. they're kind of moving in the right direction. >> if you're concerned to bertha's point, if you're concerned big global companies

are going to underperform on the dollar strength euro weakness, the ibms and coca-colas in of the world, small caps make a lot of sense. it was harteningeartening to see a little bit of strengthening. appreciate it everybody. stick around and catch brian and the "fast money" crew in a couple minutes. at 5:00 p.m. they will be asking oil price information service co-funder tom kloza how low he thinks oil will go. if you worry the market is about to hit a speed burch, are you better off with one of them. first, activist investor bill ackman responding with our scott wapner. >> i haven't gotten any subpoenas asking me to testify about market manipulation or anything else that is concerning our conduct with respect to

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at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping. the battle between bill ackman and herbalife continues. reports say the fbi may be getting involved. federal prosecutors investigating whether people including some ackman hires, have been manipulateing the stock

price. ackman is sticking to his guns. >> we don't need to make false statements about herbalife. my statements couldn't be more clear. i don't need to gild the lily. this is a pyramid scheme. that's a violation of the law. they are intentionally deceiving people promising them herbalife is a wonderful business opportunity and then they take their money. >> scott wapner is joining us along with herb greenberg one of the first to investigate herbalife joining us as well. welcome to you both. scott, your thoughts? >> important to point out i think as well and herb i know you'd agree, ackman himself is not being investigated. pershing square, the firm is not being investigated in what we believe is a criminal investigation by the authorities. this is simply a matter of whether people hired by pershing square or bill ackman have made false and misleading statements in the past about herbalife, and

herbie he has hired folks and groups to lobby regulators about herbalife. it's a question as to whether those folks at any time made false and misleading statements and what their ramifications of all of that is if, in fact they did. >> herb? >> i don't know scotty. i look at this and i say, this entire thing is a side show. it's bringing it back to distracting people away from the real issue which is herbalife. if you're an investor you're looking at herbalife and looking at the business, what its if you tour business will be. whether some guy -- whether it's ackman or someone else did this or that that's sort of like taking your eye away from what's really important. and i think that's what this pr -- >> herb, if you're getting information from bill ackman that is pertinent to herbalife and it turns out he's doing whatever he's doing that crosses the line and has more of a vendetta against the company or

whatever, wouldn't that be relevant to you if you're trying to build your case one way or another on this name? >> if i'm trying to build my case right now, all i care about are two things. i care about what's going to happen with the federal trade commission. if and when they give some sort of a decision on what they think about the company. and the other thing is about the business of herbalife. how it's doing. herbalife has spent the past year or close to a year resetting their business model. for some reason they're trying to -- from an outsider it looks like they're trying to clean themselves up and really get ahead of regulators. so i have to look at that and i have to say how is that impacting their business? how will it impact their business? we've seen these kind of investigations come and go. i have seen the fbi come out after companies that you'd say, my gosh they have just done this raid of a company, oh my goodness, and then it just sort of disappears. >> the question -- i get what you're saying, herb but this particular story boils down to

whether, you know, a trail ever leads higher up into pershing square and to ackman himself. it's my understanding from the sources -- hold on -- from the sources i'm talking to that this is an investigation that began at least in the summer of 2014 and could go on for another couple of years. so we may not know for a while exactly how far this leads. >> that's right. by the way, you might not know until after we get more clarity from regulators on what they're going to do with herbalife one way or the other. i think what you're talking about, skothd s a different story altogether. you're talking about the hedge fund story. there's a heck of a story if the fbi goes out and goes after ackman and, you know, finds through e-mail trails he was, you know spreading false and malicious information which he says he wasn't doing. that's a heck of a story. but, again, i'm coming back to it from the overall story of herbalife and having watched this thing for several years

now. >> i wonder if this investigation finds that -- finds out that people paid directly or indirectly by pershing square actually did make false and misleading statements about herbalife, what that ultimately means for the firm and for bill ackman and we just won't know for a potentially long period of time, but that's a key question. if it is determined and even ackman himself told me this morning during the interview that he can't say for sure whether some of those people ever did or they didn't. it was almost like not his responsibility to be able to know that at that point. >> and the reason i find this interesting is it goes back to another huge interview scott had, this one about lumber liquidators. >> great interview. >> to what extent herb as people start to use the media as part of their thesis one way or the other, do investors need to be cognizant of the full scope of the resources they might be

putting behind that? does it matter to you? do you have a philosophical approach to some of the shorts that would tie these two stories together or no? >> well, did you say shorts kelly? >> i probably misspoke. >> so if you said shorts i would say why aren't we talking about the long as that hide stocks. >> herb gets very agitated when anybody criticizes short sellers. >> it's not that. they sometimes bring out very good information. >> of course they do. >> i was looking -- >> of course they do. >> and earnings quality. look like the lumber liquidators story, we don't know where that one is going to go down. there's certain pieces of that story we need to still see the end result of. but sometimes whether it's a short seller or anybody else who is bringing out information, investors and the public at large can see. should they just hold back? should they just not say anything? of course they have a vested

interest. but do you not give the information? >> i want you guys to just listen to a clip of the interview with tom sullivan of lumber liquidators. it was his first public appearance since the "60 minutes" story. you could see the decline in the stock after he was on the show today. did he come out, you know, defending his company today. he said that the products that are in question here are safe. just listen to the exchange when i asked him about the chinese made laminate that's really under question. do you really think that consumer -- you say you're going to sell what consumer want. do you really think that consumer are going to want to buy the chis chinese-made lamb nant product if there's any question it's unsafe regardless of the methodology of test a versus test b. >> one, it's how it's tested. that's what it comes down to. the testing was done a deconstructive test, which, again, is not the way it's supposed to be tested and that will skew the results and make it look like it's bad when it's

not bad. >> he said that he is considering or it's on the table perhaps that they would sue either "60 minutes" or whitney tilson, the short seller in that story and that remains to be seen. >> susan, what would you say? >> i think part of the story here is about knowledge and intent. so i think bill ackman truly believes that herbalife is a ponzi scheme or a pyramid scheme. he can't ever be accused of market manipulation. if he's told people to go ourt and say things that are no longer true that's where you get into the bad plays. he's a true believer and has been for years. >> herb quick last word. >> i think that was the best last word. i'm done. >> we'll leave it there then. susan, thank you so much. scott, thank you for all the work on both of those stories this week. scott wapner and our sue herera joins us for a news update this hour. >> and here is what's happening at this hour. the obama administration said it expects the u.n. security council would endorse any final

nuclear power between world powers and iran. a security council vote would be separate from a vote to ease sanctions on iran. boeing's ceo earned some $29 million in total compensation in 2014. a 22% rise from the previous year. his base salary was $2 million up from $1.9 million in 2013. apple's new smart watch may be a tough sell. 69% of americans say they are not interested in buying the gadget. that's according to a poll done by reuters. the poll was taken after apple chief tim cook rolled out the product on monday. and officials are still assessing the damage after a landslide near the charlton, west virginia, airport after heavy rains. emergency crews have reported hearing more popping and cracking sounds from that hillside. and that's the cnbc news update for you this hour. back to you, kelly. they're looking for more rain in that area so that's not a good

situation. >> oh, man, are they ever. the weather this year has wreaked havoc in so many different places sue. thank you for now. index funds drastically underperforming their counterparts but my next guest says it's time for investors to revisit them. and attention world travelers, vacationing in europe, it's getting a whole lot cheaper now thanks to the stronger dollar. that could change quickly though. so what if you plan on heading overseas this summer? how do you lock in the low cost now? we'll find out just ahead. ♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

we newknew index funds have been outperforming. could they be better options for investors if this market really turns bearish? cnbc.com finance editor jeff cox has the gory details. hi, jeff. >> hi kelly. you could call these guys the rodney dangerfields of the financial world. active managers coming under increased pressure this week from a report from standard and poors that poors's that traced by one, three, five, and ten-year returns and finds barely one in ten active managers outperforming basic benchmarks. if you drill down into the

figures, you see 96% of large cap growth fund managers have under underperformed last year. 94% of small cap value managers underperformed last year. the culprit as we know it's low market volatility and it's low dispersion in returns between the various market sectors. it's presented opportunities for index funds. weaver we've seen assets under management climb to $2 trillion. investors noticing it. they're going more towards index funds. there's a little bit of good news for the active manager standpoint and did you allude as we had the lead in here to what we're setting up for this year. active managers are actually outperforming at a 55% clip so far in 2015. maybe some hope there. >> that's an interesting stat. jeff, thank you. stay right there. let's bring in cnbc contributor michael farr to this discussion. is this a contrarian thing for

all investments? as soon as they're hated it's time to buy? >> i'd go there. one size doesn't really fit all i think for investors. we manage passive etf portfolios but we also -- i mean, a primary part of our business is individually managed stocks and bonds. so i am one of those large cap managers. i would argue that so is warren buffett, and he's done pretty well over longer periods of time. it is possible to do pretty well as an essentially long only large-cap manager if you buy and i think hold the right kind of names. >> wait a minute. michael, the point isn't is it possible to do well over time. the point is is it better to get in involved in one of these funds now so navigate a downturn? >> a couple things. one, most active managers will own fewer than the 500 stocks in

the s&p and they're going to do fundamental research and they're going to say we have reasons that these stocks represent more value than the index. the other thing is a lot of them own cash. so they are better positioned in a down market than the index funds. >> i think -- i think michael is exactly right and i think if you have a manager that does -- >> you do? thank god! >> if you have a manager that's doing exactly what michael is doing and he's looking at -- you're not looking at necessarily all 500 names. you're culling it down and looking at the names that make the most sense for that particular individual -- >> we're still talking in general terms and we know it's the case and it should hold for everybody but it usually doesn't. i'm wondering if now is the time you sort of say this strategy i'd rather be involved in. >> if you're worried about real volatility in the marketplace, it makes more sense to have somebody behind the wheel. if you don't think there's going to be a whole lot of volatility and you want to put it on autopilot -- >> the key phrase in all of this and i'm curious on your view on this, the risk adjusted notion. yes, we may not do as well on

the upside as the s&p but we're going to hedge that risk. we're going it diversify and when things go bad, you're not going to do as badly. it's interesting that the 10-year measure showed that the passive did better. >> we got to go. last word michael? >> yeah. you know, this qe and period we've been through has basically meant that even riskier small cap stocks have gone up, too. there's really been no differentiation between quality and nonquality. when markets go down that changes. guys like me say i'm going to take care of you. i might do fairly well as things go up, but when things go down is where we will build in our margin. >> sorry, jeff i wish we had more time. jeff, thank you so much for bringing us the story. there is more on cnbc.com. this is not the last time we'll have this discussion either as we move forward here. another triple digit market move heating up "the hot list." and later london calling for

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i had more people looking up the price of oil than the price of apple stock. once again that's -- >> i thought you were going to say than the euro/dollar. where is that falling. >> it's in the top ten, number six, number seven. we had people jumping into our market editor. she did an analysis of what's going on with oil supply and the iea report this morning talking about the big glut that's building up. some traders actually thinking it might go down into the 30s. you never know. and then finally with the market craziness, michael lewis who wrote "flash boys" published an essay on vanity fair. we had a look at that. people were really gobbling that up and the video where fred katayama went at it with william o'brien. >> i remember it like it were yesterday. >> what is old is young again and people were eating it up. >> it's still an important

topic. allen, thanks. good to see you this hour. >> take care. the stronger dollar making europe a much cheaper place to travel for americans, but what if it goes the other way? can you lock in a less expensive trip to paris today if you're heading there this summer? we have someone to show you how when we come right back.

well there's a look at that surging u.s. dollar especially against euro. americans are getting way more bang for their buck overseas right now. what if that changes, though? how can you get in on this action right now and lock in a lower price for that summer european trip? for more let's turn to president of airfarewatchdog.com. an issue that has been all the talk of this trading floor and of newsrooms and everything. for people who are a little worried that if they wait the euro might rebound, how do they lock in its price right here right now for a summer trip? >> well actually kelly, one interesting idea is to book your hotel on a site called tingo.com. because if the rate goes down the hotel rate goes down after you book tingo will automatically refund your money to your credit card. >> you just caught kenny's attention. >> what a great idea that is.

>> how does that work for the company, though? i guess they're betting what everybody else is that the euro's going to keep going lower? >> well actually tingo works all around the world. any hotel. the same rates that are on hotels.com, for example. it's just an idea -- actually, a lot of hotels aren't crazy about it because obviously they get money back they have to give money back. but i actually booked a hotel in new york recently at the plaza and i got $70 back which i really liked. >> what other ideas do you have up your sleeve, george? >> well some people are thinking maybe they should trade dollars for euros now. but some analysts think that the dollar's going to reach parity. it's 1.05 today. another idea is when you book travel try to book in euros. there's an airline called norwegian air shuttle, for example. they recently had fares from l.a. to copenhagen for 405 round-trip for october travel. you can book in euros on their site and save about 80 bucks. so whenever you see an option to

book on euros, like on air b & b you can pay in euros. why not pay in euros rather than dollars? >> let me just think about this for a second. if the point is to lock it in if you pay in euros, are you paying in today's euros? so i guess that's what people would want if they're going to travel in the summer and they think the euro's going higher. but if you think it's lower you wouldn't want to do that right now, correct? >> right. i mean, no one can really predict where the euro's going, but a lot of analysts think it's going to reach parity as it did many, many years ago. if it were me i would actually wait because i really think the euro is going to depreciate even further. you can also just book the hotel. >> george i'm wondering, have you seen or is there evidence that we have a growing number of americans who are booking a trip to europe? is it shaping up to be a really busy summer? so crowded in fact that it's not worth the price decrease? >> summer is going to be crowded. i think searches are way up. i know on airfare watchdog on our twitter handle

handle @airfarewatchdog we see a lot of inquiries about europe. i think people are definitely thinking about europe this summer. and unfortunately, that is keeping pressure up on airfares because it's increasing demand. >> right. >> so if we wanted to brave the hordes and go to europe anyway this summer what are the cities that you think are the best bets for us right now? >> well usually, cities like athens barcelona are going to be cheaper. some of the eastern european countries. flying to scandinavia is much cheaper than some other countries. but once you get there it's more expensive. london is still quite expensive. >> right. but if you're talking about europe, one of the things i love to do when i go to europe italy or spain or france is to go off the beaten path. don't go to paris. don't go to rome. go to places where you're not going to find a lot of americans. some of those beautiful towns and cities -- >> what are your recommendations? top five. >> listen, i've got to tell you i can give you a whole list. but if you go off the beaten path i think you get much more

bang for your buck and you don't run into the hordes of people that are coming from everywhere. >> last word, george? >> well i think we are going to see a lot of americans there. and i can't think of -- i like americans. so i like it when we bump into each other. >> thanks very much george. good to see you. are you american george? >> i am. born and bred yes. >> okay. >> lebanese extraction. >> understood. understood. thank you for being here. have a great weekend, george. from airfarewatchdog.com. tomorrow is ultimate pie day and continuities the kind of pie you might be thinking of. we'll explain what's behind this very important occasion? this one happens only once a century. we'll be right back. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

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ok, if you're up there, i could use some help. smart sarah. seeking guidance. just like with your investments. that sets you apart. it does? it does. you're type e*. and seeking another perspective is what type e*s do. oh, and your next handhold... is there. you don't have to go it alone. e*trade gives you the support and guidance to make informed decisions. are you type e*? at ally bank no branches equals great rates.

it's a fact. kind of like shopping hungry equals overshopping. tomorrow is pi day. it's march 14th. and it's not just any pi day. it's ultimate one. might not mean a lot to some people out there. but for the science and math community it's a big day and a pretty one. pi day is observed every year to honor the symbol to its full decimal places. march 14th, the first three digits of the mathematical constant pi are 3.14.

there you go. what makes this year so special and this only happens once a century, you can go to the next couple of digits. 15 for the year 2015. and then you can keep going. 92653. so that's 9, kenny, 26 and 53 seconds. we're going to go military time. you can do it in the morning. >> that's exactly right. that's why it's so fascinating. and then as you see they're going to go out -- they've got these kids all across that are just going to go out as far as they can go. i think there's 2,000 people that are each going to be holding up a digit as you go further out. >> that's awesome. i love this stuff. i don't know if this gives us insight into where the market goes next week. maybe you have a better idea on that front. >> it is a distressing symbol for the market. we had a huge car auction today. this maserati that was going to be the star of the auction was supposed to sell for more than two times what it sold in 2010. it failed to sell. this maybe the car that burst the bubble in the collectible car market which has been the best-performing market in all collectibles. so i don't want to call an end to that but this is a bad sign of prices breaking down in that market. >> in that market.

>> so be careful. see, i would not extract -- >> no it doesn't mean stocks are going it collapse. but when it comes to where the wealthy put their money they've been putting a lot of money into cars, this shows we may have reached near a top. >> susan, what are you watching? >> i predict a massive decline in productivity next week because the ncaa tournament is starting. go blue devils. >> are you a duke girl? >> yes. >> oh my goodness. i donate know how kayla toushy's going to feel have b. having you in the house. kenny. >> big fed decision. very quiet until wednesday, then i think what you're going to get, what i hope you get is the fed takes patience so we can start talking about that and the market will start o'refocus and not be so concerned, just because they take patience out doesn't mean rates are going up and people should get that off the table. >> you could use a little patience, kenny. >> i think i could use a little patience. maybe. >> plenty of time to talk about march madness next week. we'll see what the fed brings. for now thanks everybody. really appreciate it. have a great weekend. that does it for us on "closing

bell." "fast money" coming up in moments. >> pi day. it's a huge day. i'm look forward to it. why one trade on this desk sold apple. >> oh, sold apple? interesting. >> out. gone. nothing. no position. >> does it have to do with the apple watch? >> i don't know. find out. >> we'll find out. over to you guys. >> "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square. i'm melissa lee. our traders tonight are tim seymour, steve grasso brian kelly, and guy adami. here's what's coming up on "fast." bailing on apple for now. one of our traders dropping the stock from his portfolio. he will explain why coming up. and while many investors are focusing on europe there's some under the radar action in south america that you should be watching. we'll tell you what it is and how to play it. we start out with a big move in the markets today. stocks coming back after a big sell-off spurred by the stronger dollar and falling oil prices. now the street is looking to see what the federal reserve will do next week. now, a lot has changed since the last meeting started on january 27th. the s&p and oil around the same