tv Closing Bell CNBC April 1, 2015 3:00pm-5:01pm EDT
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getting away with it at the moment. >> jane from one of the most beautiful places on earth, san simeon out in california. thanks for watching everybody. get your "power lunch" to go at powerlunch.cnbc.com.com. kayla? >> and "closing bell" starts right about now. yes, it does. welcome to "closing bell." i'm bill griffeth. >> and i'm sara eisen in for kelly evans. after wrapping up a volatile month of march, we are kicking off april on a down beat note. look at the action in today's market. we were down as much as 200 points on the dow earlier. of course it was in this hour yesterday that the bottom dropped out for stocks so you have to stay tuned to see what happens next. >> oil has been very strong today. >> yes. >> as we watch the story out of iran as the negotiations continue. yields on the 10-year note have
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plummet plummeted. >> and the dollar turned around. weak data out of the u.s. earlier this morning. >> all kinds of moving pieces. one stock bucking the trend behind us at the new york stock exchange, go daddy. the stock prices last night above the expected range and traded for the first time today with a symbol gddy. the investors liking it as much as their racy commercials. should investors go for go daddy even at these levels? you had a rather eventful morning. >> they took over the new york stock exchange. there was a huge crowd. >> you even had danica patrick -- >> doing push-ups on the floor. >> picture that. doing push-ups on the floor of the new york stock exchange. >> at the same time we were talking to the ceo. i will bring you some of those comments. we'll check out the post. it has managed to hold its gains, 30% gain. walmart inserting itself into a political controversy asking the governor of arkansas to veto a
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religious freedom bill. the governor sending the bill back to be rewritten. >> we'll get to that a little later. let's talk about the markets and show you how we're doing. as sara said the dow is down roughly 200 points on the low. off that low right now down 104. the s&p down 11 negative for the year. the nasdaq is down 38 points at 4,862. nasdaq 5,000 is a distant -- sgroo long >> long gone. >> -- memory there. keith fitzgerald the author of "money morning.com," you're the author of that? >> well there's a lot of authors but they tell me i'm in charge. we'll see if i believe it. >> jack bouroudjian from index financial partners who is doing push-ups himself today, nathan bachrach from simply money and rick santelli. i want to start with you because
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of all the moving parts and pieces. sharply lower stocks sharply higher bond prices and oil prices. what's going on here to begin the second quarter do you think? >> you know i think it all kind of fits together well. i think the equities are disappointing, and that makes the treasuries a bit more alluring. you see bund yields made a new intraday low yield. 15 basis points. 1.86%, you remember where that came from. that's your october 15th low that we bounced off of aggressively or sold off of aggressively so that's important technically. when i look at what's going on with regard to the relative value trade in europe it has slowed down a little bit and i think maybe that's part of the reason we're not seeing yields move a bit lower and i think the most important issue of all is i know jobs the numbers, the headline numbers have looked good for a while, but most of the other data doesn't. so i think it makes perfect sense. >> even the jobs number didn't
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look too good on adp this morning. from chicago to cincinnati ohio nathan bachrach are you worried about some of the signals we're getting with the u.s. economic data? are you chalking it up to bad weather? >> i'm going to chalk it all up to weather, sar remarks but i'm going to chalk it up to whether or not you think this is playing out in 2015 like 2014 did, whether you think a strengthening dollar is starting to have an affect on exports for american manufacturers, which i think it does. whether or not you think the consumers who has a happy accident taking place in their savings and checking accounts which is more savings, will come to the rescue of the economy. i don't think they are. i think the consumer is very happy to watch. and then you take a little bit of cold that actually took place here in the midwest we found that it was rather cold. he put all that together i think we're doing fine. it's a question of whether or not business is going to be able to understand that a rate hike is not going to kill them and, yes, rick santelli, that the
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increasing health insurance premiums are also not going to slow them down. you put -- >> if that's true why do we spend so many months and months listening to fed officials hem and haw about doing it? if it's no big deal pull the needle out, see if the patient starts talking or dying. why not do it? we can't have it both ways. you can't tell me how great things are and tenhen tell me they can't raise rates a quarter of a point. >> i think business has lost their game. they don't know how to dribble anymore. the consumer -- >> they're making a boat load of money being somewhat lazy. thanks janet yellen. thanks, ben. >> it's actually the stock market. what it is is it speaks to what we got out of bill gross today -- >> but they get to buy their stocks and do a lot of things -- >> now you're really hitting on things guys. >> go ahead, keith. >> now you're really hitting on it. i think this market technically is ready for a pause. i think this is absolutely normal. it's a sign of things to come.
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the volatility, the hesitation are signs of digestion and they're all classic signs that the market is trying to come to terms with news. however you want to define it whether it's the midwest, the value trade, whether it's corporate earnings those are all things that have to be taken into account. for the average investors with an eye on quality stocks and quality companies, it's a nonevent. you want to take a step back. >> the markets are acting the way they normally would. we got some disappointing economic data yields went down surprise, surprise. you got the situation -- the negotiations continuing, dragging on between the u.s. and iran and oil prices are going up in anticipation they're not going to get a deal anytime soon. the markets are acting normal if you want to put it that way, right? >> you're absolutely right, bill. in fact, i think anybody that would expect the market to rally in this situation is probably, you know, scratching their heads and shouldn't be in the markets.
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i said it last week this is a very rough time for stocks. there are a lot of headwinds. one of which is the fact that we're in a quiet period and companies can't buy back their own stock anymore and they've really been the ones holding up in the market in a lot of cases but the reality is this. the market like keith said is over extended. it's due to come off a little bit. we don't know when it's going to come off and how fast it will come off but 5% to 10% is probably in the norm and, again, we are getting to that normalization, but rick i have a real point of contention here when you're talking about pulling the pin and seeing if the patient either lives or dies. failure is not an option. it never was. that's one of the reasons ben bernanke did what he did -- >> let him finish. >> failure is not an option and that is exactly why that she is doing the work of ben bernanke, continuing that work and you nou what? god bless her. she's saving this economy. >> rick? >> sounds like warren buffett. >> the u.s. economy needs help from its central bank to the
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extent we've seen it the last six years, okay let's put chiquita on the boat and call ourselves a banana republic, seriously. >> don't forget the stamp. >> wait a second. first of all, we are not in a vacuum. we can't do things by ourselves. we've got the rest of the world in what is a global -- >> i know that's the problem, jack. people can't do much for themselves. >> it's not -- >> i hate the -- what should an investor be doing right about now? >> the average investor should be doing what they're always doing, guys. the average investor should be looking for quality companies -- >> no pete -- i think it's an important point keith is making here. there's a lot of noise around this fed decision june or september. everyone is talking about volatility but if you are a long-term investor it's important, keith, right, to stay focused on the fundamentals. >> absolutely. >> but the one thing that investors -- >> the risk here is we all -- >> nathan go ahead.
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>> here is what an investor is learning. if they're all in the u.s. and they started that way in january, they're looking at the first quarter going what happened? nothing happened. if you had a hedge position if you were international, if you had some europe you had some emerging markets you are off in asia and you went long on your bonds, you gained a couple 2% 3% this year and you're looking at your 401(k) balance and going, well, interesting. asset allocation is working this year. it didn't last year. last year all you had to do was go u.s. and you're fine. this year it will take a little allocation and little brains about where the money is going and who is winning and who is losing. right now american manufacturers are not doing as well. europe is doing great. >> nathan oil is down 11% if the first quarter. will you add to oil positions here or do you think they could go lower? i'm not adding to oil. i'm tell you where i'm adding to oil position is everybody's checking and savings account. we're seeing a happy accident right now, bill and that is that savings are just piling up in checkings and savings
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account. we have a savings rate -- we haven't seen this much savings since 2012. unless bankers come up with a way to convince people to start pulling equity out of their house again, and i hope they don't, we'll see savings continue to rise and what business is going to have to do is come up with a reason why the consumer should spend more. they're not spending the savings they're getting at the pump but they will spent a raise if and when they get it. >> jack question for you. since you are expecting some type of near term correction here, do you put any stock in the idea that april is traditionally the best month for stocks with an average gain for the dow over the last few years of 1.9%? we're talking about on the first day of april here heading into tax season and other fundamentals at work? >> this market has been so counterintuitive over the course of the last fi years and i think right now we have to be a little counterintuitive with our thinking. this is going to be, i believe, an april to sell and a may to buy. it's going to be one of those situation where is we see that
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correction come in april and then it will give investors a real opportunity and what we're looking at right now with the strong dollar is equivalent to the polar vortex last year. this is a spring that is wound up and when it unleashes, you will see a second half of earnings and revenue growth that is going to surprise a lot of people. >> all right. gentlemen, thank you. you're looking at four guys right there i'd love to have dinner with together some time. it would be fun to get thrown out of a restaurant somewhere, guys. i don't know where that would be. >> who would get a word in edgewise? >> exactly. >> heading to the close, we have 50 minutes left in the trading session and we're heading back to the lows of the session. the dow is down 120 points right now as we begin the second quarter for 2015. >> well not lower in this down market is go daddy, going gangbusters on its first day of trading at the new york stock exchange but can you still buy it after this 31% surge? the pros debate whether the web hosting company is a must-own portfolio stock. and the latest progress on
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the nuclear talks with iran. plus wall street's top analyst will tell us how it could affect oil and gas prices down the road. stay tuned. more "closing bell" after this. hosting company is a must-own [ female announcer ] who are we? we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ ♪ we are entrepreneurs who started it all... with a signature.
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the selling continues to begin the second quarter. the dow down 108 points right now, so it's negative for the year. s&p down 12 points. that's negative for the year. the nasdaq, not the case down 39, but it started the day with a gain of 4% for the year so far. of the ten seconders in the s&p 500 index, two are positive today, sara eisen. >> one is energy and the reason for that we actually saw crude closing above $50 a barrel. wti soaring today. some believe it's trading on speculation of how likely a deal is with iran on the nukes. >> eamon javers has the latest developments on those talks, which, unfortunately, are dragging on. >> it's pins and needles time as the obama administration waits for word from negotiators on whether there's a deal or no deal on the iran nuclear program. the state department saying that secretary of state john kerry is going to stay in switzerland for
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another day through thursday in hopes of wrapping up talks, and meanwhile back here in washington at the white house, spokesman josh earnest said that the united states is prepared to throw in the towel on these negotiations. take a listen. >> if we are in a situation where we sense that the talks have stalled, then yes, the united states and the international community is prepared to walk away. >> that said the talks are still ongoing and they said that they are optimistic they might be able to get to a deal. no information on what would be in that deal. earnest deflecting reporters' questions of what the specifics might be and saying any deal will have to be judged as a whole when it's announced if it's announced. a lot of questions in washington and in switzerland. >> eamon, thank you very much. keep us updated. so whichever way this deal goes what is the impact on oil prices? >> joining us now, brenda schaefer,ed a schaefer, adjunct professor at washington university. brenda, with your policy
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expertise, given what eamon just said about the comments and the rhetoric out of the administration, do you expect this 11th hour deal to get done? >> well a deal is really important to the administration. this is really a legacy issue for the obama administration. there was cuba, there's going to be iran. so at some point there will be a deal, but we might have something that's sort of a half deal. in an announcement that a deal was reached but we don't know all the details. this is something that seems to be a number of that obstacles in the different stances between iran and the united states. we might be sort of stuck with a deal but not knowing all the details and somewhat negotiations continuing. >> but, chad, it would appear the markets rally today, the market betting we're not going to get a deal at least in the near term here? >> certainly they did that. now, the war premium is back on. it's sunni versus shiite. it's the saudis versus iran and what's happening in yem sentenceen is a rejection of how opec is dealing
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with iran. the bet is there's not going to be a deal made and if you look at how brent and wti traded today, people are viewing that as something that's going to create waves into the future and prices will at least sustain themselves at the current levels. >> we also have inventory data out of the u.s. came in a little bit lower than many were expecting. still, another record high. brenda on this energy situation, make the link for us between what's happening in yemen and what chad was just talking about, a potential proxy war between iran and saudi arabia, major oil producers, and the iranian potential deal here with the western powers. >> well, you know, oil prices we think they have a lot of mystique, they go up and they go down and why it happens, but it's really about supply and demand. it's actually that simple. so, yes, inventory data that pushes up the prices a bit. in the middle east and the geopolitical level, we have two conflicting things. on the one hand anticipation of some type of agreement in the market so that brings prices down and the other hand what's
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happening with saudi arabia and yemen, this is huge. this is much bigger than maybe we might be noticing because yemen is important not because it's a major oil exporter. it's only about 100,000 barrels a day but its location. if there's any spillover or if forces connected that are fighting in yemen want to really fight back their way to do it would be to attack saudi arabia. so any sort of incident that would happen in saudi arabia would have a very -- would send oil prices sky high at least in the short term. so we have two sort of conflicting forces geopolitical forces working on the oil price. >> yemen is not a big producer but iran obviously is and if they get a deal they expect to be able to bring a million barrels a day back onto the market. that would push prices down, wouldn't it? >> right. first, a lot of iranian ianian oil is already in the market but it's somehow sold through third parties. that oil would come out and be
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legally sold, and so actually in some markets this would be a slight increase in the price because it's sold at a discount in the gray transactions. but, yes i think really that's probably one of the really things that's in the conflict between the negotiating sides right now is actually the return of iranian oil to the market. that's what they want immediately. pull it out of the inventories, out of the storage. and the united states doesn't want to do that so quickly because putting these sanctions in place, this was not an overnight deal. this was two years of serious, serious activity. once the spout is open it's not going to be easy to close it again. so what iran probably wants is the oil released. the banking system released but not have a final, final deal. the united states probably wants a detailed deal before oil is rereleased to the market. >> so given all these changing dynamics in the marketplace, chad, when it comes to supply including what's happening here in the u.s. how do you expect the price of oil to trade wti and brent in the near term here? >> well you're going to see what america is made of when it
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comes to washington ingenuity. there's a chance now for america to take the lead in managing supply and demand. we've gone to almost a 10 million barrels a day. we need to be a net exporter of it, and washington needs to be focused not only on the environmental impact of fracking which is important, but on changing the way we do business in the oil space. what you're going to see is fits and starts. you will see the war premium on people looking at the intermittent supply and demand of u.s. supply and ultimately u.s. needs to be prepared that we now have a country that's got five or six different distinct oil pricing regions that if you go out to the well head right now you have to manage that based on supply and it's got to be somehow articulated globally that the u.s. is in business for themselves and we're in business to support other oil supplies. so ultimately i don't think you're going to see a million barrels come on from iran. i think you're going to see a status quo in the near term for
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what the traders are able to manipulate in the market but america needs to change the way it's thinking about its next ten years in the business. >> all right. >> yes. >> we got a lot going on there. thank you both for joining us today. keeping us updated on the talks with iran as well. >> here we go. less than 40 minutes to go before the closing bell. we have losses across the board. first day of april, first day of the second quarter. the dow is down 106 points at this hour. s&p 500 down 12 or 0.6% and the nasdaq which had been outperforming all year is lagging behind in today's session. >> go daddy though making a huge splash on its first day of trading. i'm begging you to somebody come up with a video of danica patrick doing the -- >> we've got it. we aired it on "squawk on the street." >> we will show you a debate on whether the web hosting company will leave investors flush with cash or high and dry. bull/bear debate on go daddy when we come back. ffer sophisticated investing strategies. my technology can help you choose the right portfolio.
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welcome back. we have some breaking news on mcdonald's. sue herera is here to tell us about it. >> mcdonald's according to dow jones is joining a growing list of large corporations who are increasing pay for their workers. mcdonald's corporation apparently plans to raise pay by more than 10% and add benefits like paid vacation for workers at its u.s. restaurants in an effort to basically rejuvenate its franchisees and also joins
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the list of target walmart, tjx and gap. here are some of the details according to dow jones. the increase will apply to 90,000 workers at all levels of experience and rank. it will lift the average hourly rate for its u.s. restaurant employees to $9.90 on july 1st. and more than $10 by the end of 2016. it will also enable workers after one year of employment to accrue up to five days of paid time off annually. as we mentioned, this is a growing list with target walmart, tjx, and gap making a similar move. bill, back to you. >> sue, thank you very much. as we saw there, mcdonald's down 1.3% in today's trading. let's get to dominic chu who has some of the movers. >> experian therapeutics climbing higher.
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those shares you can see up by 11%. then there's a specialty steelmaker carpenter technology cutting 10% of its workforce in a reorganization, it says that's about 200 jobs being lost. the company wants to reduce costs amid weak oil and gas prices. it also offered a forecast that didn't meet some analyst estimates. delta, american and united kr three major airlines all down big today after deutsche bank downgraded the airlines to a hold rating pointing to weaker than expected international sales. and then shares of go daddy.com soaring more than 30% in their debut. the web hosting company raising $460 million after offering 23 million shares 20 bucks a piece, and sara and bill you have been following from down there all day. the shares are up by 31% on the day's trade. >> not an easy day to go public. thank you dominic chu with down arrows across the board. >> we're in front of the booth where they opened. glen, did you open it this
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morning? >> i did. >> glen the specialist that matched the buyers and sellers -- >> it was a lot more crowded. they had all the employees, the ceo, blake irving was here as well. the question we're asking is after this 30% shop should you be looking at shares to put in your portfolio? >> our bull is james remelli and jason is the bear. james, i think it's the first time we've had you on that you've been a bull on one of these stocks. 31% gain you think there's more juice left here, huh? >> absolutely. i middle eastern, we were expecting between $17 and $19. opened up ripped higher a massive amount on its debut and the market is telling you they like this. go daddy has a whole new suite of products they're offering to existing and new customers. their revenue growth has been red hot. they're an older, more established company, and i think there's a lot more upside left in go daddy. >> jason, i took a look at the s1 filing that they put out before they go public. there were long list of risk
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factors for investing. >> the thing i'm not excited about at all which is why go daddy gets a red light from me is actually first of all, they're losing money. so let's not forget that. they lost $200 million in 2013, they lost a little less i think it was $143 million last year. why would anybody invest in a company that's losing hundreds of millions of dollars per year number one. number two on a more fundamental standpoint which is almost more important, go daddy, in my opinion, has zero motor of safety. there's countless companies that are trying to compete with go daddy, and go daddy is going to suffer from that and not only that, they're not even making money. so it's a bad investment i think. >> james, none of that makes your palms sweat?
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>> right, so i mean looking at the company as unprofitable that doesn't really worry me that much. from thirn through early 2014 we saw yelp stock go from $20 to $100 while they were losing money the entire way. i'm not really that concerned about that. in terms of competition, we are seeing amazon and google move into the space and that should be a concern for investors. however, this is not a small startup that google is trying to push out of the space. go daddy has been around for a while and they have a huge core customer base. they have over 13 million customers in 40 countries around the world, and they're managing over 60 million domains. aside from that they're offering a whole new suite of products to their customers. >> jason, quickly, now that we have seen this 30% pop, we know the bearish case. how overvalued do you think it is? >> well, i think, listen this first day, whatever, up 30% is simply a case of the market trying to chase some type of performance opportunity. it's really a classic first day
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euphoria. i think it will come back down to about the $18 to $20 range and probably just consolidate from there. i don't think it's something you want to touch right now. >> james quickly, price target from you the upside? >> i don't have a specific upside price target. i generally like to wait a couple weeks before i start playing an ipo until they list the options. i'm an options guy. i want to take these using equity option. >> james ramelli, jason rotman, good to see you both. back to sue herera with our cbs news news-- cnbc news update. >> a state department spokeswoman says secretary of state john kerry will remain at the iran nuclear talks in switzerland until at least thursday morning. progress has been made but the two sides have yet to reach a political understanding. a french official said the french foreign minister will return to switzerland to join those talks. california's governor jerry brown has ordered a mandatory
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25% reduction in water usage for cities and towns. this as the state enters the fourth year of a record-breaking drought. california is reporting its lowest snow pack levels on record. walmart looking at how it sources its products in an effort to reduce prices. the head of the u.s. division said the company had launched several projects aimed at re-establishing price gaps over its rivals. and police in toronto are investigating the cause of a sinkhole that appeared to swallow up about half a car. the jaguar got stuck in the sinkhole after it appeared in the corner of a parking lot. luckily the driver was able to escape without injuries. that is the definition of a bad day. that's your update. back to you, sara. >> i hate those images. sue herera thank you very much. here we go less than 30 minutes to go before the closing bell and we're seeing declines across the board. dow is down 115 now.
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s&p 500 also in the red. financials and telecom are the groups seeing green. nasdaq is lagging behind all three. up next a new survey of wall street pros. 85% feel the s&p 500 will be higher next year at this time. is that too bullish? we have somebody from bank rate that conducted the survey and two financial pros in the survey and answered questions. we'll get their views when sara and i come back after this.
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we're coming off the lows of the session as we head toward the close. the dow with 24 minutes left in the trading session down 74 points. we were down 129 or something as the low of the day. >> just in the last few minutes. >> s&p down 8, nasdaq down 28 points. >> yeah. it was down a little bit lower earlier. >> a new survey by bank rate is creating some buzz today. it asks wall street professionals for their market predictions and in this survey a whopping 85% surveyed believe the s&p 500 will be highary year from now averaging out at about a 6% gain in that time. >> we're joined exclusively with the man behind the survey bank rate.com's washington bureau chief mark hammerick and two
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participants, tom lieddden and kim forrest. i think we should start with you mark, does 85% of people being bullish on the market raise ni red flags in terms of a consensus or group think of bullishness? >> the beauty or the dang ser in the eyes of the beholder. that's one of the great things about working with my colleagues to concoct this survey is to portray the palette of colors out there from each of the investment advisers. i would note though to the point that you're getting to the optimism is somewhat restrained as bill said at the outset. it's a low single -- i guess i should say mid to high single digit gain from here for the market and we'll get into it in a moment but people are really looking abroad for gains in the market not so much to the united states. >> let me -- a couple other -- for me eye opening numbers.
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62% of the respondents see better returns overseas than they do here. 80%, 80% of the respondents think that europe has bottomed out in the markets there. kim, how did you vote? >> well i don't think i voted that i think that europe bottom bottomed out. there's a lot going on there still. greece is unresolved. the ecb and their bond buying it's only just begun, and, you know, we hope they recover and it was the bottom but it's unclear that it really is. i don't know anybody that can accurately call those sort of events. >> tom here is an interesting one. 90% of the respondents expect the federal reserve to raise interest rates in 2015. if you pair that next to the fact that 85% are bullish on the s&p 500, i guess nobody is really worried about that. >> well you're right, sara and i think the bottom line is it's going to be a stock pickers market this year if you look at some of the feedback in the
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survey. many are concerned about the dollar. many are concerned about energy. many feel that europe will do better. so in our little etf world, there's some specific earnings small cap earnings related etfs, wisdom tree where they can kind of go through and pick those companies that might do better in earnings situations where really if you're involved in energy related company or a multinational right now with the rising dollar, you're going to have challenge approximates. >> and mark i noticed also along the lines of interest rates going up that the median response from the folks who took your survey see the 10-year at 2.5% by the end of the year. plenty of money managers have had their heads handed back to them for making that kind of prediction for the last five years. everybody expected rates to go up and then they go down again. >> we talk about this too, when we have the economist survey which we've been doing for a
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year, and i guess we have to ask ourselves the question, is janet yellen listening? and i think clearly she is, and i really think the fed has not done anything to dissuade people from having the expectation that there likely are a couple rate hikes in store between now and the end of the year. i think the fed is telling us it's okay to believe that. >> so quickly, kim, the one place there was no consensus, half and half was whether you're going to see better performing value stocks or growth stocks. which one would give investors better returns. where did you vote and explain why? >> we are a value manager. our mandate is total return and that is definitely on the value side of, you know money management. so, you know, that's where we came from and i think value really serves you well. why? because you're picking things that are what you think have some up -- sorry, upside value to it and you're probably not going to go down all that much
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because you're buying it when it's unloved, out of favor, that sort of thing. so i always think that if you have three to five years ahead of you, value is going to win. >> all right folks. thank you. wish we had more time. this is an interesting survey. mark, thanks for brounginginging it along. thank you for your thoughts today. awfully bullish though. awfully bullish. >> right. and the question is do you invest with them or is that a contrarian indicator? >> exactly. >> you decide. >> 19 minutes left. the dow now down 95 points. we're seeing a little volatility as we head to the close. the s&p down 10. the nasdaq down 33. health care is getting hit the hardest in terms of the major indices groups. coming up mark okada of highland capital management. we'll be speaking with him a little bit later on "closing bell."
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so -- >> he's here at the new york stock exchange and we've got a cnbc exclusive. >> what a first day. you get to be ceo and you ring the closing bell. >> exciting first day. >> camera people -- >> a big paparazzi. >> we're proud of our company, proud to celebrate what we're accomplishing. not only our market performance but our performance in the marketplace. we're proud of the results for the last five years. we've been able to impact a lot of lives in the middle market. >> there's a five-year chart of your stock since you spun off from citi in 2010. the stock is up 275%. outperforming the s&p 500. is it the underlying life insurance business that's booming? what's behind it? >> we are in the life insurance business but we're really a distribution company. the real secret of primerica is our distribution capability. 98,000-plus representatives across the u.s. canada puerto rico and even guam and we're in over 1,000 households a day in the middle market sitting down
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with families talking to them about their financial expectations and goals and delivering to them the right products for the middle market. i believe we've had the organic growth that the market expected, as well as we have a great capital strategy that will continue. with me being the new ceo and a disciplined business. >> you read my mind because organic growth is one thing and that's done -- served you well for the last five years but what about that capital strategy. how do you grow the company beyond what you can do organically here. >> that's our plan to do both. we believe the middle market is continuing to have growth opportunities just since we've been public there are 2 million new households just in the middle market in the u.s. our market continues to expand. but we've already got the game plan in place for the next couple years for the discipline -- >> you're free to tell us what that game plan is. >> well we're buying back a significant amount of stock in the marketplace, about $150 million a year and that's what we've talked about previously and so we're going to continue that strategy as far into the future as we've planned it. we think what's worked in the
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past will continue to work in the future along with the growth in the marketplace. we believe we can continue to do both. >> you have how many people working on the distribution model? how many people -- >> over 98,000 people in the u.s., canada puerto rico, and ga guam. you ask about the traditional insurance business pretty conservative, pretty stayed normid normally. but we're seen as a distributor. >> would you call yourself a multilevel marketer? we think avon herbalife, that kind of mod snel. >> i would not. our business model is a combination. we started out as an insurance agency and we have added over time great dynamics from other business models including the franchising model. we're in the securities business. i would say we're a blend of a number of different kind of models. >> they're signaling you have to get up to the balcony. the first thing you tell me on your capital plan is buyback. is that the best use of capital just to buy back your stock? i know a lot of companies do
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that these days but what about putting it to use, creating more jobs out there? >> we're always looking for alternative strategies as well. at the same time we keep our ear to the ground we haven't made any commitments and we're not close to any alternative strategies but we have an open mind to what else might be out there as well. >> i know you have to go. good to see you. congratulations. new ceo of primerica going to be ringing the closing bell. >> thank you very much. >> thank you, glenn. and that closing bell is about to ring in about 12 minutes here. we are looking at the major indices still in the red. certainly off the lows of the session. cutting our losses here with the dow down 95. s&p 500 down half a percent. nasdaq still lagging the group down 0.6%. >> we're wondering whether stocks can climb into the green on the first trading day of the new quarter he said sounding naive. don't touch that remote. we'll find out when we come back. stay tuned. , sir. after some serious consideration i'd like to put in my 15-year notice. you're quitting!? technically retiring, sir. with a little help from my state farm agent i plan to retire in 15 years.
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pare off. but the dow is down 90 points. the s&p down 9, and nasdaq down 27. joining us with their thoughts on where we go from here, phil camp relly and tom diggon. we're beginning on a weak moment for the second quarter. traditionally it is weak this time of year seasonally but do you use it as a buying opportunity? you will step back and let the market cool off a little more? >> the whole global equity market is really exciting for us. what a difference a quarter makes. clients were trying to ditch any global exposure coming into this year. it's like an april fools' joke. italy and german stocks up 22%. >> huge gains. >> but we still like the u.s. >> tom, any thoughts here on the broader equity market as we continue to see declines? this is back to back and also we're now lower for the year on the dow. >> well, i think right now the
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equity market is not real cheap but there's real opportunities within the market. certain segments i think people have been overpaying for yields for a while. so areas like utilities, some of the high dividend payers look a little expensive but areas like financials they look really cheap to us right now. >> as sara is always telling me when the dollar is strong small caps will outperform the large caps. >> i would never disagree with sara, but at the end of the day large caps for us we think are the better bet just based on this part of the market cycle. you're not scared of the strong dollar. >> unless it rallies by another ferocious 25%. >> but it is still in rally mode. i was wondering why health care is down so much today. i guess that's been the big winner. >> i think a little profit taking going on. we're going to -- yeah, i see that. we're going to a break right now. >> no breaking news. >> we wouldn't think of giving you breaking news right now
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because we're heading to the close with about seven minutes left and the dow is down 92 points as we head toward the closing countdown. >> after the bell when walmart speaks, arkansas governor seems to listen. it's all on top of that state's top employer -- walmart -- >> this is going well isn't it? >> no wonder the governor listens. is that why he drinked edblinked on the controversial bill. it's getting noisy in here as we head to the closing bell. >> look out.
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about three minutes left in the trading session. so to begin the second quarter, here is how we did in some three key asset classes. let's use the dow as the proxy for equities. oh, i'm sorry, we have some breaking news first. breaking news my bad. now, ironically we do have breaking news. let's go to eamon javers in washington with that. >> "the wall street journal," the associated press and "washington post" are all reporting right now that the u.s. government has indicted senator bob menendez on charges that the associated press say include conspiracy to commit bribery and wire fraud. all of this stems from a case in which senator menendez allegedly intervened on behalf of a doctor in florida in an ongoing dispute with the united states government. senator menendez has said he did nothing improper in any of this.
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i called the department of justice to see what they're saying about that. they're not confirming the story which is now running in three major media organizations. >> important story, and we'll be keeping an eye on that one over the next hour. now, let me show you how we opened the second quarter here. equities, the dow, sell-off from the open this morning. we had weak economic data on manufacturing, that adp jobs report didn't help as well and we've been meandering all day. well below 18,000. as for oil went the other direction as the talks with iran just drag on. we also will the inventory numbers that came in a little lower than expected. those combined gave us this 4% gain for wti and it did settle at $50 a barrel. it's come off that in electronic trading just a little bit. the other one when you get weak economic data you usually see
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buying in bonds. that's expected and the yield on the treasury back down to that magic level of 1.86%, bob pisani, that rick santelli also points out that was the low set in october and that's been the benchmark support level for yields. >> and the bonds are telling us on the short end that we're not expecting any dramatic increase on the ten-year. that's the cheering year hearing for the close. >> we had the ceo of primerica. a number of sales representatives are on the floor today and they're having a rally as they go into the close. >> can i just point out over here go daddy, stock of the day. look at this opened at 2615. what's it closing at? 2615. they offered 23 million. how many have traded? 23 million. we're stuck in a trading range. a lot of concerns about earnings and slow growth and
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unfortunately i think we're going to have to put up with it. >> thank you, bob. see you a little bit later. we're going out with primerica celebrating five years of trading at the new york stock exchange. wait until you see who is on our panel coming up on the second quarter of "the closing bell." noisy bunch here at the new york stock exchange. welcome to "the closing bell." i'm sara eisen in today for kelly evans. let's take a look at how we are finishing the first trading day of the second quarter and of the month of april. going out with a decline for the dow, about 77 points. second day in a row we're seeing losses on the major indices. the s&p 500 down 0.4% and the nasdaq lagging pretty much all day ending lower 0.4% as well. some of the major groups turning
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green at the end. >> anybody want to buy life insurance? we got plenty of reps around here to do that. >> that's the cheering. primerica employees. >> when companies ring the closing bell they often bring in some of their high-profile employees and they will have a lot of fun and everybody gets a gold badge and all that. this is the first time we've had this kind of a rally going. >> something has to rally today, bill. >> this was the rally for the day. that's for sure. >> let's introduce the panel. that was carol roth. larry kudlow is also here with us. so is "fast money" trader guy adami, and cnbc contributor michael farr. guy, this is a perverse way of looking at it but we had some bad data this morning. adp missed estimates. manufacturing came in light. the market sold off on that. is that a good sign that bad news is bad news again and it's not all about the fed? >> it's not a good sign. even larry i think would agree with this the economic data over the last 6 to 12 months has been at best mixed.
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i would say slightly negative to mixed, and as we've said a number of times, carol is here and you know, sara the way i feel, the bond market is trying to tell you something. bill mentioned before that magic level 1.86%. i don't know if it's magic or not, but the bond bears are going to wish for 1.86% because i still think yields are headed a lot lower. what troubles me are two things the weakness in the transports continues down to 157 or so in thei yt and the magic level in the russ sel 121. it's imperative for the bulls we stay above that level. >> matt with you and with carol and larry and michael farr i feel like i'm at a meeting of the rnc or something here. what's going on here today? larry, you remain positive -- >> did you say the rfra? rnc. i forgot that. >> we'll get to that. >> i would say curb your
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pessimism. i don't believe any of the numbers coming out from the winter. i don't believe a word of it. >> it's all the weather. >> between snow and dock slowdowns and refinery slowdowns. i don't believe a word of it. i also would say this, i think over the past year the jobs numbers, which have outperformed are a better indication of the economy than gdp. having said that or i do have sympathy with guy's view i am looking at profits. i think profits, the mother's milk of stocks, they're coming in sloppy. on the other hand, final point, fourth quarter profit the gdp profits, which is like irs profits, you don't mess with them domestic nonfinancial up 8%. that's your core profits view. that was better than expectations, and it tells me to keep hope alive. >> you know it's so funny, i love larry. i love his politics. i love his advocacy for -- >> i hear a however coming. >> however, i have been disagreeing with him on this economic data from probably the past year. >> you buy it don't you? >> i don't buy it. i don't think that the jobs
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numbers are good numbers. we have not seen wage growth. the numbers are way below what they should be at this point in a recovery. i don't think that there's really any good news around the consumer -- i don't think there's anything we can hang our hat on in terms of here is a catalyst for growth in this economy to justify the multiples that we're facing right now. >> the multiple question is up for grabs because that's a -- >> he'll give me the multiple question. >> i will. >> we're above historical averages. >> i think on jobs yeah we're probably 8 million jobs below where we should be. but you ran close to -- dbl dbl and [ inaudible ] and on wages i want to disagree with you. hours worked are rising over 3%. so you're talking about labor income growing at 5% in real terms. there's no inflation and if you look at the personal income report that just came out, real
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disposable income last three months 7% at an annual rate. what i'm say something there's a lot of consumer fire power as a result of the energy tax cut and the improvement in hours worked. >> if you just joined us a political convention just broke out, and we're waiting to see who the nominee is going to be when all is said and done. >> i accept. i accept. >> larry accepts. >> i accept. >> michael farr. >> michael farr ironically -- you're not in d.c. you're down in palm tree country right now. we start weak here for the second quarter. this is a seasonally weak time anyway, and i am going to bet you're going to use this time to buy. am i right on that? >> i would love to do some buying. i, of course agree with carol roth. i think she makes a whole lot of sense, and i have been kind of in her camp for a while. i think the economic data are nothing to write home about, and i don't think that the consumer does have a whole lot more fire
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power. increeksal lymentally yes, but not a whole lot and not enough to move the needle. i'm concerned if we get some weakness and as art cashin was telling us yesterday, april is usually a pretty good month. ooims i'm always willing to buy on weakness and i think earnings will show something of an earnings recession, disappointing numbers, and i think long-term investors are going to be looking for bernanke's 5% and be happy with it. >> guy, if you look at what moved in terms of industries health care got hit hard. telecom, energy materials actually ended higher. what does that tell you? >> you had the bounce in the oil market. i guess you can explain the bounce in the oil market. it wasn't as big of a build as we thought we were looking at so the market was poised to rally. you also had comments yesterday, i forget who said it though. oil is going to close 20% higher on the year. but what really stuck out to me
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and i will push back on larry on this one, sam zell this morning said the chasm between the real economy and the stock market i'm paraphrasing, has never been greater greater. something i have said for a while and something i actually believe. >> and he was also very worried about the stronger u.s. dollar and how that's making our companies -- >> are you comfortable being in the minority on this panel on this one? >> i actually love being in the minority on every single question we've discussed so far. i'll just say this you can't devalue your way to prosperity. strong economies have strong currencies. our economy is the strongest in the world even though i agree with carol we're not growing up to potential. i agree with that but nonetheless on a relative basis we're fine and i just want to make this point. michael farr i'm sorry, you're wrong. carol roth, i'm sorry, you're wrong, with all due humility. personal income, personal income after inflation, after taxes, is up 6.9% on an annual
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rate. i can't beat this crowd. >> let me just explain. i was joking earlier. if you just joined us the folks from primerica rang the closing bell today and they're using the opportunity to have a sales meeting apparently. so there's a lot of roaring going on here. >> i hope they all get rich. >> i'll still like to nominate bill grifity for ityfeth for president. >> that's not something you want to have happen michael farr. >> i do think that growth as you look ahead prospectively is still going to face some significant headwinds. i think we're going to see growth, but if we raise interest rates a little bit and i wrote about this today on cnbc.com in the op-ed, as you see interest rates go up 1% housing prices go up 5%, and monthly mortgage payments go up 18%. i think that headwind is going to keep us in the slow 2% to
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2.5% gdp growth for a while. i think you will see 5% gains on stocks prospectively. it's not bad. just not run away bullish. >> i want to know where you're seeing that growth. do you think that the consumer is going to stop saving and start spending again? because certainly i'm not seeing the level of business investment or any other obvious catalysts for growth. where do you think that's coming from? >> you know i agree, carol, and i'm much more in your camp. i think that the consumer has been very cautious in increasing their spending. i can't really figure out how they've maintained it. they've seen some wage growth. they've seen some fuel and energy savings. but they've also seen the savings rate increase. we're well below this historical average north of 8%. we're at 5.8% but they're not coming out of the pocket with the cash and the consumer is still lacking in confidence. >> okay. everybody stand down for just a second. we've got some breaking news because we have earnings coming out right now. this from the technology world. dom chu, what do you have?
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>> that's right. bill, we have micron the condition here is reporting earnings of, again, what i'm seeing is 81 cents per share. that beats the average analyst estimate of 73 cents per share. revenues also coming in slightly better than expectations $4.17 billion versus expectations for $4.15 billion. so a narrow beat there as well. just going through here and checking out the stock reaction we're seeing shares move up to the tune of almost 5% in trading so far. about 826,000 shares have traded so relatively heavy volume sara and bill with the move but up 4.7%. beats on both profits and revenues at least right now. the street reaction seems to be positive on this after hours. >> i'm with primerica. >> dom chu, thank you very much. we're going to talk a lot more with you. >> sara is going to be the adult and keep us on time here. >> be sure to stick around and catch guy adami, guy, thank you.
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>> good-bye guy. >> on "fast money." michael farr thank you. we'll check out our op-ed that you shamelessly plugged on cnbc.com. >> didn't even remember it. he had to look down to read it. >> i read your op-ed. >> coming up on "fast money," they will talk to a top market tactician, lucia maouislouise yamada. the market taking investors on another volatile ride today. coming up highland capital management co-founder explains why he thinks this bumpy market is only going to get bumpier. >> first, if earnings really are in trouble, is that market in trouble also. is that what's causing the sell-off? if so, you need to hear this next segment. stay tuned to "closing bell."
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welcome back. earnings season set to kick off next week and in a story that's certainly getting a lot of attention from cnbc pro subscribers, the word seems to be bleak. >> obviously larry didn't take part in that. but dominic chu, is it that bleak? >> well it is right now, and i'm interested to hear what larry kudlow has to say about this because the expectations
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are very low for the first quarter earnings season coming up because right now according to average analyst estimates by thompson reuters, the average s&p 500 earnings growth rate is supposed to be a decline of 2.7%. that's analyst estimates right now. if you strip away the energy sector, things could get better but we took a look at some of the stocks that might be showing upside earnings growth potential, so the folks over at cnbc pro looked at the s&p 500, looked at the biggest anticipated earnings growth rates, and melded them with average analyst buy ratings. they came up with a whole universe of different types of stocks. among them standouts like delta on the airlines side, lennar on the home building side of things. you move to some of the biotech stocks biogen seeing weakness as of late but a 57% anticipated earnings growth. fed ex on the transportation side weaker shares as well today with the overall transportation index down. 63% earnings growth over the same period last year and even
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semi-conductor and technology companies an 81% anticipated growth rate. these are some of the highlights here. cnbc pro subscribers can go to the website and check out the full story and the full list. it's on cnbc.com/pro. there might be bright spots but overall the expectation right now is for again a 2.7% drop in terms of overall earnings per share for this s&p 500 group. back over to you. >> dom, thank you. larry is champing at the bit but first let's talk about more on the upcoming earnings season with christine short senior vice president with estimize. the expectations kept ramping down and down. >> we were looking for a positive growth rate of 1.1%. our numbers include more than just the sell side. we have buy side independent research firms, academics. we have a more representative number and it tends to be a bit higher. we are looking for the s&p 500 to grow just over 1%.
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i'm not saying that's a great number. it would be the lowest since the second quarter of 2012. i think we've really become accustomed to seeing great earnings season 2013 2014 we had a couple quarters in double digit earnings growth so to be hit with something so low where some estimates are negative -- >> don't we have to take out energy though? >> yes, brings our growth rate up close to 8%. >> but you can't -- >> this is your best moment. what you just said is your best moment here in weeks. >> i almost blamed it on the weather though. >> no no. >> how do you take out energy? if the savings from energy is what is driving the growth elsewhere. you can't just take out energy and put it to the side. >> you take out energy and put in everything else. the point i made earlier -- look, i don't disagree with the low number -- >> the numbers we're seeing. >> i don't disagree with that. it's going to be a mixed bag. all i'm saying is domestic nonfinancial, okay that's the core and if you adjust for
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energy what's really going to happen here? energy will suffer but a lot of other sectors at some point whether it's q2 or q3, are going to really benefit because of the torque from lower energy prices. >> are we talking about last quarter? we did see that. there was a net positive benefit. energy -- profits fell 18%. this quarter we're looking for them to fall 59%. it's getting harder to stave off an overall drop. >> a strong dollar is not going to help. even janet yellen mentioned that. i know i know -- >> we don't want to see the trade-off. we don't want to see, well one is going down and that benefits the other one by going up. we want to see both going up. that's when we know we'll be in a good place. >> by the way, energy will adjust pretty rapidly. these fracking companies, which are really high tech companies, are going to adjust very rapidly and lower their costs. that's going to come back very fast.
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>> you're ignoring my king dollar comment. i know you think we were obsessing too much on the strong dollar but it's -- >> you are. >> -- going to hurt those exporting companies. >> did you see the manufacturing jobs in adp. they went negative today. >> and the ism exports were soft. do i believe any of the numbers because of the winter? i'm not sure. let me say this exports in the fourth quarter, the dollar had already been up substantially, 4.5% increase the biggest problem exports has is not the low cost structure from a high dollar and low commodities. it's the rest of the world is in recession. that's the problem. and that's what some of our domestic. here try this out. try this out. i'll do it real fast. if you buy small cap companies and you buy tech companies, they're mostly domestic oriented companies. you're going to do very well. that's all i want to say. >> where are you looking for the biggest earnings growth? is it in technology? >> tech is number one. three sectors that are expecting double digit earnings growth are tech, consumer discretionary,
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industrials are up there, health care. >> you are so good. >> those are the biggest winners. the stronger dollar though we only have 18 companies report from the s&p 500 thus far. almost every one has mentioned the stronger dollar having a negative impact. >> right. >> however, there are companies that have still beat expectations because they're able to hedge. so a well managed company -- >> or they're able to take the expectations down so low that -- >> yeah our numbers actually aren't as low so they're not as conservative. if you beat ours, i saw micron beat which is huge because they were expecting a bigger hit due to the stronger dollars and weakness in the pc market. i think well managed companies can hedge a bit against stronger dollar. they can't hedge completely to offset but i think they can still eke out a little bit of growth. >> it will come up. >> it will be the theme for the entire season. >> you get three nobel prizes for that presentation. >> thank you. >> unbelievable. even pulled sara in. unbelievable. >> and she gets to sell insurance for primerica, too. >> thank you, christine short
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and you can read much more on the earnings story and what expectation is that bleak word comes up. that's at cnbc pro. our next guest says the big swings we've seen in the market lately, that's here to stay at least for the foreseeable future. highland capital management co-founder mark okata explains why on "closing bell." and later we'll normalize relations with cuba will allow americans to hit a home run by investing in cuban baseball? something i know carol roth will want to talk about. we'll get to that coming up on "the closing bell." stay tuned. 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 a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪
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daily use. for a free 30-tablet trial go to cialis.com so more red arrows across the board for equities today adding to a volatile week that we've already been having anyway. >> our next guest says you can expect it to continue put on your seat belt. we're in for a bumpy ride until the fed decides to rip off the band-aid and raise rates. we're talking to mark okata from highland market capital. good to see you. >> great to see you guys. >> you've been warning about volatility and bumps for a while. you must be happy to see this. this is what active managers really need to thrive. >> absolutely. that was our call for 2015. that was -- we would see volatility after qe and until we got to this period where, you know, we do have this liftoff, there is just a palpable lack of confidence across all parts of the economy. it's not just investors, it's
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people that are putting money to work in different ways and so we think until that liftoff happens, you're not really going to see a direction that reflects what's going on. >> when do you think liftoff happens, that first rate increase by the fed, and what do you think the market does with that? >> fantastic question. i don't think the nuclear winter begins when the liftoff happens. i'm in the camp that i wish it already happened. i wish it had happened six months ago. i think the economy could easily deal with it. i think ever since the taper tantrum, we should have started something that the market has been waiting to see what happened. so sooner would be better in my mind. >> could it be june? >> it could be -- i don't know. that's the whole point, and that's the point about why we have this volatility because no one really knows, and you look at the dovish comments out of the fed presidents and it looks like it's going to be longer. some people talking about september, maybe next year. to me that would be a bad thing for the economy because we get
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so much money that sits on the sidelines doing nothing. >> some people look at the wild swings, the 100-plus point moves on the dow and it makes their stomachs turn. why do you like it? >> we're active managers. volatility says it's a bad time to be an investor and a great time to be a trader. if you're a trader long short managers have been looking for periods like this for a long time. and so we've got things in health care. we talk about health care we like. we like the insurers the medical device manufacturers. we don't like small and biotech. we think that's way overdone. >> what do you think about energy? >> energy is another great space. we're down in texas. there's a lot to do in the energy space. i'm not one who sits here and wants to call the recovery in oil prices because it's very complicated. there's a lot going on. i think we're going to have a continued added to the supply of oil, but talk about mlps, right? you look at reits and mlps trading together in the search
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for yield and then all of a sudden energy happens and oil is down 50%, mlps have widened dramatically. >> master limited partnership for those who don't know. >> you can get high quality midstream players with good cash flows. maybe you don't get growth but you can make 4% or 5% and it's a nice call on an energy recovery at some point but who knows when that happens. >> we saw stats throughout the first quarter that suggested that the average investor the small investor was generally taking money out of equities and putting them into bonds. >> yeah. >> what did you think of that? >> well i think the bond market is also going to be a place that's going to be a great place for traders as opposed to investors, too. we've got a lot of differing players in this space. you've got qe that's over. banks really have grown their balance sheets with their bond exposure, and it's kind of done because the stress tests are
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over. and we've got negative rates in europe and that certainly should be positive for our bond market but what if it's not. what if it's a period where maybe it's okay to have negative yields and they can't come over here and then we've got a real problem. we've got raising rates in that environment. that volatility i think is hard wired into the bond market too. >> are you investing in bonds right now, treasuries? >> there is one area where we really love to be an investor and that's in the credit markets. >> i thought you were going to say bank debt. that's your baby right? >> we've been doing that for 20 years. you're talking about 4% 5% your secure, your floating rate. you don't have a lot of interest rate risk and volatility risk. i think that's a good source of good yield. there is a need for good yield. mlp is a part of it. bank loans are a great place to take advantage of good yield. we're really excited about that. >> where do you come down on this question of valuations on the overall equity markets and the gap, if there is any, between where stocks are trading and where they're valued and
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what the economy is doing? >> well i think valuation is certainly high. is it crazy? no. but it's very high in a lot of different places. so we're in this place where i think it's going to be a struggle for the equity market really to keep moving higher from here especially if you're taking earnings down for the next two or three quarters as you were just talking about. so i think it's going to be tough for the beta moves in equity and bonds to do anything so that's why we love this trading aspect. it's great to be a trader get long and strategies like this. >> mark, it's good to see you. thank you for your thoughts. mark okada highland capital management. the primerica people are getting pretty comfy at the new york stock exchange. >> it's a half an hour after the closing bell and they're still cheering. >> let's get to our news update with sue herera. >> here is what's happening. escalating battle with the s.e.c. lynn tilton sued that
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agency to stop it from pursuing a case charging her with defrauding her investors. she explained why earlier on "power lunch." >> after 5 1/2 years of investigation, you know, unleashed subpoena power and one-sided testimony, not to give me a chance to have the means and the time to defend myself seems unfair. >> senator robert menendez democrat from new jersey has been indicted on federal corruption charges, including bribery and wire fraud. he's been charged with using his office to improperly benefit a florida eye doctor and a political donor. mcdonald's plans to raise salaries by more than 10% and add benefits like paid vacation for workers at u.s. restaurants it operates. starting july 1st, the company will pay at least a dollar more per hour above the local legal minimum page at the 1500 restaurants it owns.
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that comes to 90,000 workers. and the world's oldest person has died. she passed away only weeks after celebrating her 117th birthday. she died peacefully at heart failure at a nursing home where she had been living. that is the cnbc news update at this hour. 117 years old. >> and you actually recently reported on her birthday. i remember it. >> absolutely. >> i was sitting here. >> i think it was her son who is 90-something who was standing next to her. it's pretty amazing. >> great stuff. thank you. >> thank you. >> i hate this story. i got to say i'll show it up front. i hate this story. dom chu we have a market flash regarding tesla. >> there's a reason why you hate it and there's a reason why it's so hated by a lot of people on wall street and even on main street america right now because just about ten minutes before the end of trading there was a headline that ran on multiple news outlets with regard to tesla allegedly introducing a
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model w product. now, of course we know this is april fools' day and this was tesla's attempt at an april fools' joke. you can see right there on the tesla blog that it's announcing the tesla model w which you can see is a replica of big ben and parliament on a watch which it says is its new product line. this is obviously an april fools' joke but here is where it gets a little strange. because this did in some way cause a small flurry of trading just before the closing bell. we saw a spike in volume at around 3:52 p.m. and the stock did move. it's $187 stock. but it moved about $1 $1.50 on some of the headlines. it's a terrible story. it's april fools' day but we wanted to point it out that this was an april fools' joke. >> and we did not report that here on cnbc. >> we did not. >> we got the joke but clearly some other folks didn't and it caused a move in the stock. >> i like a good practical joke but when you're talking about people's money, when you have pr
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or whatever it's going to be that's going to cause people to trade on information that is not true, you know especially when it's for april fools' joke that's just not cool. >> i think they should have figured it out, dom, when elon musk didn't tweet it. he tweets the news lately. >> again, the broader thing is how much does the electronic trading factor into this. when you have an algorithm or a headline scanner that sees something like this and automatically does something it brings up the human versus computer debate all over again. an interesting story not because of anything else but it was an april fools' joke that didn't really work out all that well. >> always on the lookout for the fake press releases. >> not cool. not cool. thanks, dom. see you later. arkansas now the latest state to consider passing a religious freedom law that some say could discriminate against homosexuals. >> now walmart based in arkansas, of course, is speaking out and it appears arkansas's governor got the message loud and clear. larry kudlow can't wait to talk about this one next. business you have to work hard, know your numbers, and stay focused. i was determined to create new york city's
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arkansas's governor to veto that religion freedom bill similar to the controversial bill that became a law in indiana. it appears the governor was listening sort of. mary thompson explains. >> you know the state is in a bit of a holding pattern after the governor asked state lawmakers to recall the bill and make changes. hutchinson's decision was a surprise as i said he would sign the original bill. in a press conference he showed his finely tuned political antenna saying religious freedom bills like arkansas are divisive. he also pointed out that his son had asked him to veto the bill. well, so, too, had the state and the country's largest employer private employer. walmart's ceo doug mcmillen said the law would undermine the spirit of the state or the state's spirit of inclusion and then after hutchinson asked for the changes, walmart tweeted out a statement commending the decision saying we clearly
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support the importance of religious freedom and ern courage the legislation to make sure any legislation does not encourage discrimination. this is seen as giving businesses legal cover to discriminate against gays. we'll see what they come up with. >> the story is not over yet. thank you, mary. this discuss now raises the question of big business' role in these kind of issues. >> let's bring in jeff sonnenfeld to get his reaction. he'll join our panel. are you surprised ceos would get involved in a political issue like this the tim cooks and doug mcmillens and others who came out publicly and encouraged those states to do away with these laws? >> no. i celebrate it. there was a period of time where, bill you and i and larry if he admits it are old enough
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to remember we have seen this in earlier decades but they've been dormant for a long while. today is my birthday no april fools' joke and i was happy to hear about a 117-year-old woman you had celebrated earlier on the show. you look back in history on this if we're old enough to remember, it the business round table in the early 1970s broke away from other business groups to speak out on social issues. irving shapiro of dupont, tom watson of ibm. they were looking at race relations, issues of social justice, environmental issues and that's why they split from the business community but we had a period of dormancy for quite some time and now they're finding their voice again. jack welch told me in the early '80s he went to a business round table meeting and took out an order pad to do business and everybody looked at him like he was darth vader for wanting to do business and he said those do-gooders, that's what is wrong with the company. we went through a period of retreating from that.
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i think there's a happy medium back. these are strong companies. >> we want to get larry's thoughts on this. >> and carol, too. >> let me be very clear, i don't want any sexual discrimination. yont any gay discrimination. i spoke to the log cabin republicans dinner last year and i've been a crusader for nondiscrimination of employment. by the way, none of the civil rights acts have a gay exception. gays could be prosecuted. >> what about the role that ceos are playing in all this now? they usually want to stay a million miles away from hot potato political issues for business reasons right? >> it's become more fashionable now. i think jeff is right. i'm fine with that. i don't care about that. what i -- there's a little hypocrisy here if i may with respect to walmart. there are 19 states that have these laws so they're going to close down in 19 states? i just want to ask that. that fellow from sales force, he says he's not going to go to indiana so he's in illinois. he's in florida. they have these laws. >> can i add to the hypocrisy?
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>> we've had a federal law for over 20 years, barack obama voted for the illinois law when he was a state senator. so there is some hypocrisy going on. >> and i'm going to pile on the hypocrisy. here is what i don't understand is that you've got somebody like tim cook who is coming out against this yet he's doing business in countries that actually kill people for being gay. so if you're going to get involved in the issue, go forward and make this -- go after the big issues. i'm going to slap both hands in this particular debate. i think it's a nonissue here in the u.s. but there's a bigger social issue on a worldwide basis. so i think it's hypocritical to be microfocused and not macrofocused. >> the problem with indiana -- i haven't read the arkansas law yet. the problem with the indiana law is it didn't specify that there would be no sexual discrimination. that's a fairly simple thing to correct and that's really all they have to do. but you can't walk away from religious freedom either. there has to be some kind of judicial balance. >> well we can debate this law all we want but beyond the
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criticism here is there any real risk for big business, for ceos of this caliber getting involved in these kind of issues? >> sometimes we have seen people like tom moynahan when he was running domino's pizza taking positions that maybe some viewers would be more upset about as he was a pro life advocate and the great folks running chik-fil-a has gotten themselves into some controversy by taking positions. but nonetheless it's a cross cutting issue. to not divide the population over something where generational you can see the popular winds are behind the ceo on this. they are not out in front. it is remarkable that these ceos are not hiding behind trade associations. they're not waiting for a plebiscite from the shareholders to give them a vote of encouragement or even the board that this is the corporate position. they're acting like corporate states people and i support them. the foreign cross weres act which i know you don't love was a u.s. creation by a u.s. company. it was tom phillips who got out
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there as ceo of raytheon with charlie adams and said we need an even playing field for how to compete around the world. that was a defense contractor. ibm when they went into the south, you were talking about different practices around the country. ibm when they went to south africa or gm in south africa they said we're going to go by universal standards and similarly with u.p.s. going into parts of the south. >> last point i want to make real quick. the federal government and the states should have a nondiscrimination law for employment. nonsexual discrimination for employment. that's something the country needs. >> there you you areare. jeffrey, happy 30th birthday. >> the cftc says it's filing a civil complaint in u.s. court against kraft foods group and mon delay global. they're saying they were involved in manipulation of wheat futures and cashing wheat
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prices. the cftc says it goes back to an incident back if 2011 when the two companies developed and executed a strategy to buy what the cftc said was $90 million of december 2011 wheat futures amounting to a six-month supply of wheat. according to cftc those two companies never intended to take delivery of that wheat. instead, what they were trying to do, the allegation says, is move the spread 2we7b the december 2011 wheat and march 2012 wheat. the spread did move. they say they profited by $5.4 million and thec ftc saying that was improper. we'll talk to both companies and get their side as soon as we can. >> we're not seeing a whole lot of reaction eamon javers. thank you very much. looking at the after hour trades. kraft has been a big winner since the deal announced with heinz last week. if small businesses are the key to growing our economy, kate
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rogers has some good news for us. plus spring is in the air somewhere and you know because opening day of baseball is just a few days away it starts monday i think, and could opening day happen in cuba in the near future? that's the big hope as a result of the shift in u.s./cuban relations. we'll have that story when we continue on "the closing bell." you can't afford. that's why i recommend fast reliable comcast business internet. they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business.
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businesses. kate rogers joins us to explain. good afternoon. >> hi, sara. today's ad p jobs data from march might have missed expectations from a report from sageworks finds private companies in the u.s. closed out the first quarter of the year with a bang in terms of sales. according to sageworks private companies are growing sales at a rate of 9.2% over the past 12 months. that is the highest level since 2012. and 85% of these companies are small businesses. this comes as both sales and revenue have remained steady providing a solid launch pad into the new year. construction companies which had struggled coming out of the recession, they're now leading the pack according to the report growing sales by nearly 14% in the year. in fact more than half of the top 15 growth industries are tied to construction in some way including freight trucking residential building construction, and direct selling establishments. also of note the company says private retail businesses, they're making a comeback too,
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growing sales at a rate of 7.2%. that's up from 5.5% last year. but it does remain to be seen if this will translate into greater optimism and job growth of course, on main street. back over to you. >> certainly saw a little bit of it, kate in the adp report this morning. small business was the biggest contributor. >> as always. >> all right. >> thanks, kate. >> kate rogers. cuba has long been known for three exports, sugar, cigars and baseball players. >> not necessarily in that order by the way. before the u.s. placed an embargo against cuba in 1960 cuba's top baseball team played against american teams. well, now it could go one better. how about a major league team in cuba? >> up next why the shift in relations with cuba could make the basketball business the next big thing for the island nation. don't miss it on "closing bell."
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president obama's decision to normalize relations with cuba has led to high investor interest. >> hundreds of investors are at the cuban summit. all happening today at the nasdaq market site. that's where we find michelle caruso-cabrera. she joins us with one of the potential investors after we saw her ring the opening bell this
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morning. >> i'm here with guillermo santo-cruz. he is here with ing. you look for content in latin america. you package it up and sell it again, right? >> that's correct. >> cuba seems like a natural place for that. tell us how you guys are thinking about it at this early stage. >> well, obviously cuba has a long history in sports. they're powerhouses in many sports. baseball we know about it but also volleyball track & field. all sorts of things. each of those sports has a value in the international market. just like premier league from england has a value in the u.s. same thing for the sports that are played in cuba. so all that will be sorted in some way. needs to be coordinated. people in our industry will look at how do you monetize and how do you take advantage of those in the proper way and in the proper context. >> you're not with mlb. but do you think there is a
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possibility? like could there ever be an opening of major league baseball in cuba? >> in the world that we live in today, anything can happen in the world of sports. cuba dropped out of the world of sports in 1960 and it's rejoining this international market where anything is possible. we have the nfl in europe. we've had nfl in mexico. we have major league baseball in puerto rico. we've had all sorts of things. so to say it could be an opening day in cuba might be a bit premature. certainly we're going to have spring training next year, so that's going to happen. that will open the door to other things. other steps will be taken. and an opening day in cuba could be a possibility. >> sports infrastructure in cuba any good? >> needs a lot of help. certainly from the television side. we all know how television pays for the sports that we all watch. a lot needs to be done. there are currency issues so if you're hosting an event in cuba what are you going to get paid in? how are you going to bring that money out? >> right. lots of hurdles.
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>> how much are they going to charge for a ticket? not a whole lot. your going to be looking at a lot of good will enterprises, shall we say. a lot of people saying okay, what can we do? >> guillermo, thank you so much. we'll see, guys if one day there is mlb. >> i can only imagine the quality of the food that they would serve at those baseball games. >> and the music. >> thanks michelle, see you later. >> william randolph hurst was a relentless media baron of the 20th century. >> but his great grandson seems to have a different approach. we'll have that story when we come back. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes.
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sometimes, the apple does fall far from the tree. >> yes, it does. and while steve hurst's greatgrandfather media titan william randolph hurst may have been known for his hard as nails business persona, one hurst heir is making a name for himself with caring and compassion. >> jane wells joins us from california to explain. jane? >> hey, guys. one of the most amazing things about hurst castle is that it's surrounded by miles and miles of open space. that is the 82,000-acre
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privately owned hurst ranch. originally hurst corporation wanted to put hotels and golf courses there. not popular. so steve hurst found a better way. he sold the development rights for $95 million to a non-profit the california range land trust, in public and private money promising to keep the ranch always a ranch. >> i gave away development rights that were while valuable, i think it's more valuable the way it is. >> when you do a conservation it's a fraction of the cost what it would cost the government to protect it outright but you have a landowner that manages the land and it's really a win/win. >> there are eight such range land trusts in eight states. it's aimed at keeping cattle ranches ranches. >> he looks just like his greatgrandfather. jane wells thank you so much. appreciate it very much.
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>> good story. >> larry kudlow carol roth thank you for joining us today. and for behaving yourself the last 15 minutes or so. hard to do i know. >> could have done a little fracking on the hearst ranch. >> that does it for "closing bell." >> "fast money" is up next on cnbc. >> and it starts right now, "fast money" does. live from the nasdaq market site. overlooking new york city's times square. i'm in tonight for melissa lee. our traders are dan nathan brian kelly, karen finderman, and guy adami. the stock for micron moving lower. we'll tell you what today's report means for the rest of the chip space. and dividends buybacks and stock splits. apple tends to make big announcements in the month of april. what could happen this time around? we've got the analyst who just added the stock to his focus list coming up.
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