sort of liquidity and then do it for your employees too and play in the big leagues, you go public. >> well said. thank you very much. appreciate it. herb greenberg is out there in tv land. >> yep. i will see you tonight at 5:00 brian. >> i'll snap it thank you melissa. >> hope so "fast money" at 5:00. "closing bell" starts right now. hi welcome to "the closing bell" i'm kellen evans at the new york stock exchange. busy day. i'm bill griff fets. the apple executive behinds the watch, just making headlines at the code conference out west in california. we will bring you his latest comments on the watch and the potential decline in smartphone demand as well. all of that coming up here in a few minutes. >> also greasing the markets. stocks on the rebound today. hopes greece is getting closer to a deal behind this one. the details on how it could impact your money. >> arthur cashin' said his sense

was about 40 points of the dow was a bounce of yesterday's sell-off, the rest about greece. >> that will do it. we're looking at the dow of 128 points at the moment. >> crazy story, the irs says hackers stole tax info from 100,000 accounts. we have former homeland security secretary michael chertoff to talk about how to fight the growing cyber threat. it's not just at the irs, it's everywhere. you know about that. esen isis threatens a cyber war of some kind pfr we'll talk with secretary chertoff. >> as we wait on palo alto to report after the bell. here's where we stand in the markets. the dow up about 130 points. that's 0.7%. the nasdaq's gain is double that, 1.4%. we have big movers we're going to get to in a movement in the chase space boosting that 70 points. the s&p 500 up 19 points good for 0.9%.

2123 the level at the moment. >> let's get to our "closing bell" exchange for this wednesday that feels like a thursday. we have jack from index financial partners, david kelly from jpmorgan funds, and our own steve liesman, and rick santelli joining us as well. david kelly, how seriously should we takes the words of the greek prime minister when he says we are close to a deal with our european creditors? >> well, this is a play in many acts. they've said that before. i think the greek sounds more optimistic than their european partners. they may be close to a deal but it could easily fall apart. they need real cash by the end of the summer. i think they're more likely to stay and get a deal than not but still a risk out there. the important thing is europe can now survive without greece so greece needs europe much more than europe needs greece. i think the global economy can get by either way. >> we've had evan on the show saying he thinks the best thing

for the u.s. market is ifs greece leaves the eurozone entirely. what do you think would be better greece to stay in and the drama continue to unfold and be a headwind or at some point as some officials have been hinting in recent weeks, let go? >> you know what i think the best thing would be to let them go. look, how often can you cry wolf? this is exactly what's been happening over the course of the last few years. if they've been serious and they really, you know, if you think about it they've been doing this hap heartedly. they need to collect taxes. something that nobody has been doing in greece for years and years. so unless they can get real structural reform we're going to continue to go through this every six months to a year. i think that best thing that probably happens in europe would be for greece to probably either let go or to take some of those greek assets and collateralize them using something like the block chain technology to

release some of the capital within greece. >> what do you think of all that? to some degree the risk on trade came off a bit as a result of the comment from the greek prime minister, don't you think? you know down here they pretty much look at it like ask ten economists a question get 15 different answers. when it comes to greece -- >> blame the economists, go ahead, rick. >> can't help it. so i would say that nobody knows what's going to go on with greece, like nobody knows what normalization will look like in the u.s. we overlook the facts to play the chase the tail game of insolvency, structural reform that covers most of southern europe, all those don't get talked about. what's going on with greece is a political solution they're looking for, really doesn't have anything really to do with economics. it's always been all about pom ticks with the european commission. i don't think there is an answer that we can know but one thing i'm assured of for every positive headline traders

pretty much look for the half hour time lapse and look for a negative one. >> the answer to greece's woes as suggested in the journal op he ed about america today is simply growth. >> i think so. the great question about whether or not the austery can lead to that growth or do you end up digging a hole deeper and harder to get out of. this is one of the days you have an existential market crisis year. i was with you and evan and sara trying to explain a 1% decline in the market, and i said i thought the economic news was a little better not quite sure then come in today and you're 1% higher and wonder why we didn't take the last two days off and net zero in terms of market movement and just enjoy the beautiful summer weather. >> by the way, steve, ben bernanke as you know out speaking, in south korea, yesterday we had stanley fisher telling us not to obsess about the first rate increase ben bernanke is saying not to fear the first rate increase.

it seems that fed officials and former fed officials are setting us up for something here. >> that's for sure. what they want to do is at all costs avoid a taper tantrum. they want the flexibility to move and get a picture of rick when i say this because i wonder how he's going to react, but butt the thing is they want the flexibility to move. i got you pegged rick right, without having an outsized market reaction. they're very concerned about not just the market reaction but the knock on effect to the economy of an outside move in interest rates and an outside move in the stock market china saying hey, guys, it's coming be prepared so they can do it and not have that outside reaction. >> i hope ben does better with this than, of course, subprime. i'm sorry, you know they are the drama queens. i have three daughters, i understand drama. the drama isn't the markets. the drama is the federal reserve. left, right, center up down going to normalize, not going to normalize. data dpentsds don't talk about

cpi. >> rec, rick that's not -- >> that's not where the drama is. >> no. >> i think the drama is in d.c. the drama is not with the fed, it's with d.c. rick. if you had serious pro-growth policies the fed wouldn't have to do what they're doing. >> oh, come on. >> that seems to be the entire situation. >> governments create growth and wealth like ticks create blood. >> one at a time. >> write that one down. >> you've got a double engine plane and one of them is sputtering. it can't get any growth off the ground so you've got the fed doing everything possible to keep the thing going. look -- >> what are they doing? what's everything possible? what is everything possible? keep rates too low forever? >> you're yelling in my ear. >> guys -- >> david kelly -- >> they're making money easy enough to get and withstand through this crisis. >> we got news to get to in a moment. >> not so easy for people. >> it's clear coming out of the

weekend, pretty much everyone putting out research talking how america doesn't have the growth productivity growth in particular, that it might have had from the '95 to '05 boom era. where does that leave us? doesn't that mean the fed should raise sooner? >> the point is we're much closer to full employment than people realize. the bic issue is not that demand is soft. the demand will pick up. the economy is plagues possum. going to wake up in the second half and second quarter. we only get a few more quarters above trend economic growth before we hit full employment and because there's no productivity growth, no labor force growth the economy will have to slow down. that is why the other part of washington needs to be awake because we need to do things to enhance long-term productivity growth here and get faster growth. >> just have to be careful with that possum plays possum too long it becomes road kill after a while. >> can i just say one thing which is that -- >> yes. >> it's hard to do the look out your window school of economics

and think that the productivity numbers are right. i really have my suspicions there. >> oh, yeah. >> since they're going down they must be wrong. i -- >> let's do revisions, rick. on productivity. >> ask yourselves two questions, why is everybody buying all this stuff that is resulting if it's negative productivity and why is -- let me finish the -- >> government can't create it -- >> why are they hiring people and creating negative productivity out of that. if you have that negative productivity you don't bring people on in that -- >> probably not very good jobs part-time jobs overestimated jobs, maybe -- the list goes on. >> even a period to catch up. we have to get to news. >> they're in the booth on their knees using words you can't use in scrabble. we have dominic chu joining us right now with news on the semiconductor stocks we acknowledge is powering the nasdaq higher. >> powering the nasdaq higher so the big mover this afternoon so far guys is broadcom spiking sharply and now taking another

leg higher to be up by about 20%. see they're near the best levels today. that's after a "wall street journal" first reported the wireless chip companies in advanced talk to be bought by avago. if this deal were to happen one of the biggest tech mergers of all times. over at sp and advisory it could rank as the third biggest of all time in terms of technology mermgers. since it has headquarters in singapore and san jose it could be viewed as the biggest foreign purchase of a u.s. tech company. shares of avago are higher. a bloomberg story that came out recently here, says that a deal could come as early as tomorrow and that a source familiar says it could be a combination of cash and stocks. that's what powered the next leg higher in the last few minutes or so. look at shares of altera on the semiconductor side they're higher. some renewed chatter intel might

be looking to resurrect deal talks there. graphic chipmaker nvidia getting a boost today helping to boost the sector overall helping to propel the market the ticker smh up by about almost 4%. very much a sector an industry group to watch. this, of course, now multiple sources reporting a deal could be imminent for avago to buy broadcom according to the "wall street journal" and bloomberg reporting. >> thank you. jack just a quick word. huge shifts under way in the chip industry. what do these mergers or the space of deal making tell you? >> well two things. one, money is cheap and we know that so i'm surprised we're not seeing more. more important fact is that we're seeing the maturation of that industry. you know think about it that way. look semiconductors over the course of the last few years have become commoditized so i think that we're going to see a little more of that and eventually we'll probably end up

with about three or four or a handful of companies that are running that entire show. >> like -- >> breaking news otherwise this time out of the wearables industry. kayla tausche is here with us at the new york stock exchange with details on that. >> hey bill. the competition in that space has turned into an all-out war. wearable health tracking company jawbone is suing five former employees and their current employee which happens to be its closest rival fitbit alleging that fitbit has not only been rating its employees. the suit was filed moments ago and claims that in recent months, quote, fit bit recruiters contacted an estimated 30% of jawbone's work force including at least five employees to join fit bit each of those bringing along access to and intimate knowledge of key aspects of jawbone's business. before the employees left the suit alleges they used thumb

drives to download files and forward some of them to their personal e-mail addresses and its confidential data included information like an intricate road map to the company's strategy supply chain contacts pricing information and what the company calls, quote the equivalent of a gold mine to a competitor. it's not just any competitor here. it's a competitor that is on file to go public a profitable competitor that will be selling its story to wall street in the coming weeks and one of the risk factors incidentally in fit bit's regulatory filings its ability to hire good talent. it says competition for highly skilled personnel is often intense especially in the san francisco bay area where we're located and we may incur significant costs to attract them if we fail to attract new personnel or fail to retain and motivate our current personnel our business and future growth prospects could be severely harmed. now from evaluation standpoint fit bit is a david to jawbone's

goliath the former worth less than $1 billion the latter upwards of $3 billion. jawbone says it has suffered monetary, competitive and irreparable harm. this is a winner takes all market. jawbone wants to make sure the winner is not fit bit and doesn't come at jawbone's expense. we've reached out to fit bit for comment and we will update you when we have that. the competition is getting very heated and personal. back to you. >> sounds like it. >> when did fit bit or expect or we expect them to see them go public? >> an expectation it would happen in the coming weeks. they just filed their s1 that gave us the first look at the financials a couple weeks ago. so it was expected early this summer. i think that they were hiring a lot of these people at least that's what the lawsuit lays out, in the months leading up to the ipo to sort of bolster their work force, so it will be interesting to see what fit bit's response to this is and whether it does, in fact, affect their road to ipo.

>> all right. kayla, thanks very much. thanks to our exchange panel as well today for their comments. >> speaking of jawbone. >> take your mike off now, steve, it's okay. we're done. >> 45 minutes to go into the close. the dow up 133 points on the session. the s&p 500 remember all these bouncing back from the tough session yesterday we were talking about. the s&p at a 2124 the nasdaq up about 1.5% on the session on big, big moves in the chip space we were discussing. >> when we come back live to that code conference out in southern california where a top apple watch executive just finished speaking to the congregation and what he said. two top apple watchers weigh in on apple's pipeline of new products and services still to come. >> and we also have a lineup of heavy hitters. former homeland is security secretary michael chertoff and the ceos of mastercard and toll brothers will join us on the program. stick around. "closing bell" continues after this.

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. welcome back. with the news alert on nike dominic chu returns with the details. >> kelly bill nike shares are moving lower and taken that leg lower in the last half hour or

so on the heels of today's news of all that scandal at international soccer governing body fifa. according to allegations by u.s. law enforcement officials an unnameddsed multinational sports wear company may have been involved with bribery in brazil. nike is not named in this indictment in any way, shape, or form however some of the alleged misconduct took place during a time when nike won a licensing deal with the brazilian national soccer team. there has been no proven link between these two events important to point out. nike has put out a formal statement on the fifa investigation. they say, quote nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or prior bribery. we have been cooperating and continue to cooperate with the authorities the latest on fee na having a market implication on shares of the biggest sports wear maker out there, nike back over to you. >> dom, thank you very much.

on we go. a key apple executive now overseeing its new watch just finished speaking to the code conference there in southern california. josh lipton is there. what did he have to say, josh? >> well bill jeff williams is the man in charge of apple watch development and he was just on stage here at this recode conference. he described spobs to the-- response to the watch as being fantastic though he wasn't willing to give us hard numbers at this point. >> we decided to do that right out of the -- i mean at the very beginning we decided we weren't going to release data on the watch. we released maybe too much data today and we didn't want to -- we didn't want to do that. >> wait wait wait. let's go back. you're not secretive enough today is that your point of view? >> i think we spend too much time thinking about the numbers and spending time on that and we would rather spend time making

great product. >> now jeff williams might not have been willing to give hard numbers, but analysts certainly are. the team at morgan stanley thinks apple will sell 36 million watches in just the first 12 months. now switching gears apple was making news for another reason as well specifically there is a text message that can disable iphones in a statement to cnbc apple saying they are aware of this imessage issue and going to make a fix available in a software update. i can tell you, jeff williams was not asked about that issue today. he did talk about the upcoming apple developer conference that's on june 8th and you can certainly expect to hear a lot more watch news at that point. guys, back to you. >> all right. josh, thank you. for more let's bring in a couple guys who keep an eye on this sector alex ghana and -- thank you for joining us. how would you characterize the debut of the watch and how it's

done so far? >> it's doing okay bill. less than spectacular. it's not in keeping with some of the other blockbuster product releases apple has had in the past. jp securities think they will do about 15 million units out of the gate this year which is far less than maybe some other market watchers are looking for. but in our view it's really a stepping stone for other greater internet of things aspirations for intel and also for future generations of apple watch that will conveniently get there with the features and battery life we think it needs to be a compelling device. >> what tells you that this product isn't selling as well? there are estimates in the market of 40 million units being moved this year. you're saying only 15. what do you think apple shares have priced in? >> kelly, i don't think that the apple watch is central to the apple investment proposition. our checks suggest that iphone 6 and 6 plus continue to be run away hits in the market doing

well here as well as and perhaps more importantly in china. what we have is sources in the supply chain that suggest that there were supply constraints as we started the ramp of this and we're not yet in the holiday season so we think that's why there's been a rather lack luster start to the apple watch sales. again, jp securities still recommends apple as a stock. >> and i'm interested what do you think? are you as -- >> i think a picture says a thousand words. i already have the apple watch and i'm going to have to disagree. >> i was going to ask if both of you own it. >> absolutely. i've been on the show promoting this over a year and i disagree with alex. i feel like this is another groundbreaking ecosystem and i have the watch all weekend and not only is it great to do little things from notifications to things in my daily life just difficult to do with the ipad mac or iphone i own -- >> does it cannibalize your existing technology or an add-on for you? >> i'm going to say it's --

apple is a way of life. for me since they're already on my wrist they're already in mobile they're getting into our home more with apple tv and siri coming out with control things for me apple is a way of life. we're going to talk more about the apple car but to stick with alex's point on the watch alone, since that's the big news that transition into what we're talking about i feel like the third party apps are going to open up more towards the end of the year so this is going to open up all these companies and businesses that didn't exist just like when the iphone first came out and these companies and businesses started breaking out from gaming. >> we're going to start hearing about that. we have to leave it there, unfortunately. we will hear more as we do mov into the developers conferences for the key holiday season. >> i told you it was a busy day. breaking news on walmart, eamon javers has details on that story for us. >> yeah hi bill. getting a press release from walmart saying they have reached a settlement with the actor

tracy morgan and other plaintiffs in that horrific car accident last year on the new jersey turnpike. walmart saying in a statement the terms and the conditions of the settlement with morgan and the other plaintiffs remain confidential. a statement here from greg ferran the walmart president and ceo saying while we know there is nothing that can change what happened, walmart has been committed to doing what's right to help ensure the well being of all those impacted by the accident. we worked closely with mr. morrelly the attorney in this case and pleased to have reached an amicable settlement that ends this litigation. we are deeply sorry that one of our trucks was involved. guys obviously a devastating accident here for tracy morgan the actor, whose spokespeople were on tv last fall saying he may have suffered brain damage as a result of that. clearly impacted his career and a settlement has been reached with walmart. guys? >> thanks. eamon javers a tragic story. 35 minutes left in the

trading session with the dow up 134 points near the highs of the session. the nasdaq once again that is the stellar standout and you can thank the chip stocks as we talked about. >> last time we checked they were up about 20%, broadcom avago on the back of those moves near equals 30 plus billion dollar market cap names we're talking about. up next michael chertoff giving us his take on the irs breach affecting 100,000 taxpayers. >> a bubble forming in technology? a top tech executive thinks there is but is he right? we will hear from both sides of that issue coming up later on "closing bell." the pursuit of healthier. it begins from the second we're born. after all, healthier doesn't happen all by itself. it needs to be earned... every day... using wellness to keep away illness... and believing that a single life can be made better by millions of others. healthier takes somebody who can power modern health care... by connecting every single part of

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more than 100,000 americans have had their tax data hacked causing problems for those whose identity was stolen and costing the internal revenue service more than $50 million in fraudulent returns. >> a growing problem for which the irs which paid close to $6 billion in fake returns in 2013 the most recent info was available. joining us to talk about this issue we welcome back michael chertoff former homeland security secretary, executive chairman of the chertoff group a global security and risk management form. good to see you again, welcome back back, sir. >> good to be on. >> here we go again. we can talk specifically about the irs problem but you're

worried about a bigger problem involving internet security, aren't you? >> i am. i mean this is obviously a serious issue for the government, which has paid out a lot of money in fictitious tax refunds, but i think more generally people are worried about the security of their financial information, their health information, and if they get worried enough it's going to begin to have an impact on their willingness to engage in transactions and activity over the internet. >> how urgent mr. secretary, is it for the irs and other government agencies to ensure that their systems are as sound as possible given the amount and type of information they have on all of us? >> as the government is requiring more information and they're doing it now, for example, in the health area they have a responsibility to make sure they safeguard it. this particular hack or this particular fraud seals to be actually the harvesting of a series of prior identity thefts

because the perpetrateors collected a lot of personal information and used that to bypass the access controls that are necessary in order to claim a refund. so this was a pretty sophisticated and long-term type of fraud. >> what is your biggest fear? we worry about our financial data being on-line, we do banking on-line, our money is in the bank somewhere virtually. we hope it remains safe there. what is your biggest fear when it comes to on-line security right now? what could happen? >> actually what i am most concerned about is the ability of people to use on-line access to effect physical things in the real world, by influencing the control systems. so, for example, spb hacking into a power plant or hacking into a water plant or even hacking into a vehicle and then affecting the performance of that particular physical infrastructure. and as we move to the internet of things where we are moving

very, very quickly to connect a lot of different devices and often to do it wirelessly i'm not sure we are always building security for the basic architecture. >> is it avoidable or inevitable? >> well some hacking is inevitable and you are never going to eliminate it totally. we can really manage the risk and a lot of it has to do with what we put in place when we build a network. some of it has to do with what people do with their own information. one of the things that apparently was involved in this irs scam is people taking advantage of social media to research their victims. and then using that data as a way of fooling the irs. >>, for example, they could find out your mother's maiden name from facebook and then fill out a bunch of forms using that information that many of us do use for password prompts. let me ask you about the possible solution here. there are a lot of private sector companies growing fast trying to get at the heart of

this. is it enough? i mean what more needs to be done? >> first thing is you want to get to what we call multifactor authentication authentication. not just a password or some information that you communicate, but your fingerprint, perhaps a token. the more ways you can require people to identify themselves the harder it is for somebody to impersonate them. you've got to do it conveniently and it's got to work, you know, 99.99% of the time. but if you have multifact torl authentication you've gone a long way to reducing this kind of a scam. >> thank you for joining us. >> thanks for being here. >> good to be on. >> time for a cnbc news update with sue herera. >> hi. here's what's happening at this hour. the consumer product safety commission says office depot has agreed to pay $3.4 million in fines over its failure to report defects in two models of office chairs. the company had received

complaints that the chair's seatbacks failed causing back injuries. flights in and out of belgium's airports were stopped because of a technical problem at its domestic air traffic control. it said the problem was due to a possible power surge. flights crossing the country not affected. a united nations report issued said the number of people in the world who go hungry a day dropped by 167 million. mostly in rural areas. residents in northern japan were treated to a sight in the sky called a sir comhorizontal arc. it occurs when sun light is refracted by ice in cirrus clouds. they appear a couple times a year in the area but usually not quite so well defined. that's your cnbc news update for this hour. i'm going to get hot tea. back to you. >> i was going to say, tea and lemon, honey, might do the trick there. >> yeah. >> thanks, guys. >> see you. >> about 25 minutes to the close here. looking at a rebound, and we're seeing the nasdaq in particular

lead the way here up 1.4%. adding 70 points. the s&p adding 19 and the dow up 129 on the session. >> coming up, if snapchat's ceo is concerned about a tech bubble should the rest of us be? >> i think there will be a correction. it's a question of when. >> indeed, it is. the tech pros will debate this important issue which could royal your investments coming up on "closing bell."

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welcome back. the code conference in california is a gathering of media types but an old media player today raising eyebrows. >> julia sat down with the man himself, cbs ceo les moonves and joins us with some of his plans. what's he got planned? >> well bill cbs's ceo tells us the world is changing dramatically which is why cbs has a direct to consumer app called cbs all access and is working to launch a showtime direct to consumer app similar to hbo now which moonves tells us he's learned is doing, quote extraordinarily well and says he's happy with cbs's inclusion in verizon's slimmed down

bundle despite opposition from many other media companies, including espn which issing verizon. moonves says he's been meeting with apple about including cbs in apple's upcoming tv package that's in the works. >> apple's talking about something similar in that it will be -- it won't be a 200 channel universe, it will be less than that at a lower price and it will be a different offering that is digital. it is on-line, and we think in that universe we will do better in a is 15 to 17 channel universe we're always going to have to be there. you always need cbs. >> now, moonves says cbs will get paid more per subscriber by apple than cbs gets paid from traditional cable or television -- or satellite tv providers. so definitely a hot one to watch. we expect that apple tv product to launch some time this fall. back to you. >> thank you very much.

and yet there's more. we have kayla tausche stepping in with more breaking news. is this a follow-up on your previous story? >> it is not but i have an update on the advanced deal talks between avago and broadcom under way and i have learned from a person familiar with the matter that avago's board is set to meet tonight wednesday evening to vote on the deal which could be announced as soon as tomorrow morning. take a look at both stocks of the potential acquirer which would be avago, its market capitalization slightly larger than that of broadcom but both of the stocks are up. that is something we saw in the previous large deal in the chip space that year of nxp buying free scale semiconductor. at that time that was the biggest deal in the chip space. this would possibly most likely surpass that but, of course there are synergies to be had in this space. there has been consolidation being talked about ever since the deal happened but i can

confirm according to my sources the deal could be announced tomorrow and the avago board will be meeting tonight. >> thank you. what a move in the shares bill. >> incredible. 19% on broadcom. >> let's see, are we going to chat -- yes, we are. let's introduce our guest joining us this hour. christina warren senior tech correspondent and joining us is the ceo of quantum networks and advisors to equities.com. sitting through some breaking news this hour. thank you so much christina. we have on the one hand evan spiegel talking about maybe a tech bubble and there's too much money and on the other hand the chip space which looks to be going through a period of real consolidation. does this all converge on mobile phones? i mean what is the common thread? >> it does converge on mobile phones and it points to the fact that there is so much money happening in the tech space but when you get down to it a lot of the money we don't know what to do with it. at a certain point things have to converge and consolidate again. that's when we're seeing with

mobile chip sets. >> you think we have a bit of a bubble forming here. >> we're in the middle of a bubble. look at the amount of the valuations for companies that have no business plans, aren't planning to be profitable for a years. every other day a company is getting a billion dollar or multibillion dollar evaluation when even spiegel is saying there's too much money out there that says something. >> ari, if you agree, who are the obvious offenders? when i think about an uber i understand it commands a high valuation, needs to be profitable but it's a real business. >> yeah. first of all i'm a huge fan of your writing in mashble as well. and you're immersed in the technology space and mobile space and i have to say that there are these category disrupters and people use that term a lot but in reality airbnb which is a technology play that's completely disrupting the entire, you know hotel/motel space, uber disrupting the automotive space.

like you said these are businesses that preexisted the internet day but you these companies that are disrupting and making serious i think phenomenal changes. to answer your question i'm completely bullish and i don't think that we're in a bubble right now. i think that there are some tech stocks overvalued. there's no question about that. but overall i mean i think we're in a good safe space. >> okay. give us an example of where you see bubblish activity. >> messaging or cloud computing a topic hot for how many years, how many decades have we been talking about cloud computing and still have valuations through the stratosphere looking at drop box but you look at how box is doing since its gone ipo hasn't met expectations even before its ipo didn't meet what investors wanted out of it. you have all these big companies with lots of money that have been at this a long time coming at the space, the oracles, microsofts, saps. i agree uber and airbnb are true

disrupters but because uber is maybe valued fairly doesn't mean necessarily that, you know, the next -- that company that makes the kim kardashian game is -- >> glue mobile. >> exactly. >> but you would admit, though, that things are different than in the late '90s when people were just throwing money at anything. i think we've become a lot -- i hope certainly, you know, your audience, wall street has become a lot smarter now to actually look at business beyond the business plan and say hey, is there a business here something that's credible something sustainable and i think for the most part i think the industry has gotten smarter or i hope so. >> i think the industry has gotten smarter but important to say a difference between now and 15 years ago that these companies were popping and going public. a race to ipo. whereas now they're waiting as long as they can for the ipo. most of the bubble i would argue is probably in private investments than public capital which was happening 15 years

ago. >> mark cuban agrees with you on that area. christina and ari, thank you for joining us today. >> thank you so much guys. 15 minutes to go. and no sign of giving up at this point. the dow up 134 points. the s&p up 20. the nasdaq powered higher by those chip stocks up a big 73 points right now. >> and up next the price of cancer drugs to their effectiveness. one company wants to do just that. our meg terrell has a special report you cannot afford to miss. >> fascinating. >> back in two. .. ...and takes the wheel right from your very hands... ...this isn't that car. the first and only car with direct adaptive steering. ♪ the 328 horsepower q50 from infiniti. verizon say neversettle. t-mobile agrees.

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it iszs no secret many drug prices are sky rockets and now a major drug prescription manager is pushing to change that pricing structure. >> would it change make drugs more affordable, though. meg terrel has the details for us. >> hey, kelly. the company the u.s. largest pharmacy benefits manager. it negotiates drug prices on behalf of insurers and turning its sights on cancer drugs and had done that with hepatitis c. they've come under scrutiny for how much they cost. it's an idea of pay per performance. a drug called tar see va.

approved in lung cancer and pancreatic cancer. lung cancer shown to extend survival among patients by as much as five months and pancreatic cancer only two weeks. it would pay more for the drug inning lung cancer than in pancreatic cancer. an example of what they're proposing here. another part of the plan paying for more for drugs that work better in patients kind of a personalized medicine model here. shaking up cancer drugs like we saw with hepatitis c. >> what i don't follow is there's an accountability here that's so critical you know, to what we're paying for when it comes to drugs, but at what point do we know it's working? >> that's a great question. express skrips will have to more for diagnostic testing to figure which patients could benefit from which drugs. there's a movement in the industry to do that. more monitoring as the patients take the drugs to see how

they're doing. some critic of the idea say those systems aren't in place here in the united states and maybe that's why the idea of the value based medicine hasn't taken shape. express scripps says it has figured it out and we don't have the details yet. >> free market medicine what it comes down to right. thanks meg. >> thanks. >> heading to the close, ten minutes remaining here. art cashin came by a nuanced close here, $500 million to sell but the tape looks like a lot is pairing off because we are moving higher. even as the stock is coming in to sell here you're seeing demand push the stock market higher. the dow up 144 points right now. >> we'll see what happens in the next ten minutes. more ahead on "closing bell." the ceos of mastercard and toll brothers will join us markets, consumers, housing rebound and much more. back in two. the technology changes the design evolves the engineering advances. but the passion to drive a mercedes-benz

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we've got seven minutes left in the trading session with the dow up 147. joining us at post nine is ben pace from hpm partners. i know two days does not a trend make but volatility is coming back here. >> yeah. >> are you inclined to want to buy the dip or sell the strength? >> it has to be more of a dip than yesterday, bill. i think what we've seen in this

market is 5 to 7% pullbacks no full corrections. a lot of money on the sidelines waiting to get back in. if i had fresh money i would wait for a 3 to 3 5% pullback here. >> we could be headed for a record close for the nasdaq. what would that say to you? >> i think that sector particularly the tech stocks and social media stocks a major driver. i still think we're in a secular bull market that's probably going to last a while driven by multiple expansion. that's probably what we're going to be living with for the rest of the year into 2016. >> even when the fed starts raising rates. >> with the fed rate it's going to be gradual. there's still going to be relatively low rates. it's just a lesser form of extreme ease. >> i get that but what do you think the market does that first time when they raise rates? don't you think everybody will pile on? >> i don't think everybody will sell. concerned about selling. a little of that of a pullback but with the signal that they'll give and the verbiage with that

first tightening they will be careful that experience of two years ago with the taper tantrum. i think it taught them a lesson of the sensitive of the pullback from the ease is going to be. >> people upset that valuations are too high multiple too high. you're talking about multiple expansion expansion. how much further could it go? >> interest rates being where they are and low for a while the 10-year at 2% why wouldn't you pay more for a dollar's worth of earnings not 20 but 18 times. do the math there that could get you to 2250 on easily. >> we'll head back ins just a moment and get to the closing countdown for the wednesday. >> you're watching cnbc first in business, worldwide.

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and the mom who gets to hear her daughter's heart beat once again. we're helping organizations transform the way they work so they can transform the lives of the people they serve. couple minutes left. two days now since memorial day weekend. here's what we've done big sell-off yesterday rally come back day today not quite to the highs but we are up 131 points. same thing for the 10-year yield. we saw a -- the yield come down here and we've been moving lower today as the buying picks up a little bit. 2.13% on the yield on the 10-year note. broadcomes the big story, mary thompson with the gain of 19%. kayla tausche reporting now 21.5% they will be voting on this offer from avago tonight. we may be talking ability about a big chip deal tomorrow.

>> possibly one of the biggest of the year. >> but m&a continues to pick up right now. >> and funding is cheap. so it is -- >> it's cheap now but if they anticipate that rates will go higher now is the time to start making that move, right? >> that's right. that's right. it's again, one of the catalysts we've seen in the markets is the m&a activity that we saw today. also some decent earnings from a couple of the retailers. it's interesting, because kors got slammed on the results but that wasn't a surprise. in anticipated if you look at the stock chart everything in there. >> word maybe greece has reached a deal with its creditors. >> that happened around midday or so and helped to give the markets an added boost as well. good news on the greece front contributing to the rebound in the markets today. >> very good. thanks, mary. see you later. we're going out with decent gains and looks like we're going to have a record high for the nasdaq and you can thank those chip stocks because of the avago bid for broadcom.

stay tuned, more earnings and ceo of toll brothers they suffered in today's trade, we'll get the lo down on where the housing market goes in just a moment. for the second hour of "closing bell" with kelly and company. i'll see you tomorrow. thank you, bill. yes, there are cupcakes at the new york stock exchange for the bell ringing. might as well be for the nasdaq, closing at new all-time highs. a look at how we're finishing up on wall street. the dow adding 122 points about 0.7%, to 18163, the s&p climbing 19%, almost 1%. a 1.5% pop in the nasdaq, 73 point gain and closing high at 5106 powered by some of the chip names, deal making activity and we will talk through the implications with today's panel,

joining me now cnbc contributor carol roth we have kenny pull carry from o'neill securities and also with us more on today's market action guy adam my and charlie deboll in the house from london. a warm welcome to all of you. charlie, to you first, as the guest of honor this afternoon. >> thank you. >> i mean you arrive on a day when the nasdaq is closing at a record high. what do you think of the markets? >> i mean it's a combination of the ongoing strength of the dollar and the fact that the fed remains in abeyance. so the supply of money combined with decent results, it's just more and more fuel. >> are you going to keep buying into the u.s. rally? >> we've started to pair back some of our exposure but we were long previously but we think we're getting to levels now where it's time to start taking some profits. we're going more neutral at this point in time. >> was it just these chip stocks that, you know, the story of the day today. >> it was the chip stocks yesterday was an overreaction

completely, i think that, you know, that's the conversation that's been going on. i think the market continues to be confused yet i do think we're hitting our head here at the top and going to churn here. taking some money off the table, probably not a bad idea. >> carol? >> i was wondering, we've got guy here. how much do you think that this rally has to do with the new york rangers winning last night. >> 100%. spot on and rooting for the blackhawks tonight. 95% of today's rally predicated on the new york rangers defeat of the tampa bay lightning. >> that's what i assumed, yes. >> and guy, if i assume you're being a little facetious here. >> 100%. >> you're not a hockey fan. i think the m&a had a lot to do with it. the greece news had something to do with it. you said it yesterday, markets go up and down on relatively low volume. no memory from day to day, as doug cas likes to say. the ftc that the russell -- the fact that the russell able to hold the 122 level is

interesting. a number of factors at work. the biggest one is the continued m&a and the strength in the chips. >> carol, m&a will be a huge story. this deal could bes one of the biggest of all time in the tech space. >> it will continue to be a huge story and makes this came when we're hitting new highs on the nasdaq feel different than the last time around. not to say there aren't bubblish shus valuations with private tech companies but there are a lot more real companies with real business models with big users to be monetized and so i think that the market is feeling very different, at least about the tech sector than it was last time around. >> absolutely no doubt. that's spot on. the market that the nasdaq especially does not feel anything like the last time at all, right. these are businesses some of them are disrupters and changing the world, unlike what the dotcom did in 1998/99. >> and -- but essentially look as long as we continue to have central banks around the world, supporting markets whether here

europe or asia it will be difficult for the market to pull back of any real consequence. >> do you agree? >> absolutely. that's the very interesting point, that people are talking about higher rates in the u.s. but with the dollar and various other data releases perhaps slowing the fed down or maybe even delaying them a bit from where people were thinking and as you rightly point out the ecb, china and japan all undertaking pretty substantial stimulus still. so, you know, that's bound to be fueling asset prices. >> they're not going anywhere unlike the fed which probably is at some point, the ecb chatter aren't going anywhere. >> it isn't going anywhere as quickly as they keep intimating they might go they're always behind the curve. they're putting it out to the market just in case. >> they float the balloon. >> i don't believe they're changing their posture any time soon. >> yesterday we were talking about the strength of the u.s. dollar like we are today, but yesterday there was a real problem with some of the big cat blue clip tech names like apple

and google and hewlett-packard even. today yeah, we have the big deal news and i understand that is a legitimate reason why these names are going to rally, but if you wanted to sort of take something away from the last two sessions, what's the real message here about what's going on in the tech space, the strength of the u.s. dollar and how much further room there is for this rally? >> one thing, the u.s. dollar strength is here to stay for a while and i know sara eisen put out another piece today, i think the dollar i think but for the fed speak back in march the dollar would be significantly higher than it is now. they just postponed the inevitable. i thought it was interesting today that bond market was able to rally as well. tlt down about a point, reverse closed higher on the day, that's interesting. it tells you that rates still want to go lower, and i think in terms of the broader market a scarcity thing going on with stocks as you continue to see the m&a news it's just going to continue to fuel the fire for the broader market. again, the transports seemingly found a bottom today. the russell continues to show relative strength. i think as long as the iwm

continues to stay above the 121 level it's going to feed the broader market. >> what were you saying charlie? >> i was listening to the comment about the dxy and where it's going. this combination of divergent monetary policy and the fed at least being on standby whether they pull the trigger, but at least sounding like they're going to be moving before too long, you know that's a fairly strong driving force. it's not going to take much to propel the dollar index i think through 100. could get as high as 105. >> we should show the dollar index as well and the strength it's had this year. lately hovering around the 95 level. >> yeah, i mean we touched towards 100 a month or two ago and pulled back slightly but i think that's just a force and we could as i say push on through 100. >> if the dollar is reascending what kind of impact is that going to happen for the right reasons, a better economy, the fed, rate hike et cetera. >> we were prepared for the strong dollar to destroy the first quarter earnings and that didn't happen at all. and what was not talked about

was the fact that the companies, these multinationals that had operations in other countries got a benefit because of the weaker currencies net net wasn't the disaster they talked about. >> look at tiffany today. 12% rally for a company that has tons of international exposure, granted it was an expectations game, but the currency while it hurt them does not have investors soured about their long-term prospects. >> that's a particular name that had fallen probably a little bit too far. i don't think this is going to be a name that will continue to go higher and higher. that's a little bit of an anomaly anomaly. i think the strong dollar has some level of impact but at this point the market is prepared for that. they're pricing that into the story. >> palo alto networks about earnings here. the cyber security firm out with quarterly results. dominic chu ds has the numbers. >> what we have are shares that are just about flat on about 340,000 shares worth of trading volume after palo alto networks

reports earnings per slayer for third quarter of 23 cents, analysts looking for 20 cents. reporting revenues of $234 million, that beats the average analyst estimate of $223 million. also want to point out that they expect for the fourth quarter of 2015 we expect total revenues in the range of 252 to $256 million. also diluted nongap earnings per share in the range of 24 to 25 cents. again a beat op the bottom line and top line for palo alto networks, leading right now to what's essentially a flat trade down by ain't a half percent, 355,000 shares have traded. >> what do you think about palo alto and other security names here. it would seem a no-brainer one area this has to be massive investment in the country public and private. >> obviously the irs news yesterday, let me if you have a chart of palo alto networks pull

it ups because the stock has been on fire the last two years. we talk about it all the time it will sell off on the news because the valuation is astronomical. this is the best company and probably the hottest space out there right now, any sell-off in the stock you to buy it. if this stock sells off to 156 buy it with both hands. i get the multiple is ridiculous but the space is unbelievable and this is the best company in the space. >> we're focusing on all of these publicly available names. i mean are there others globally where where you see leaders emerging in the cyber security space? >> i mean to be honest i don't generally delve in this sort of name security specific stuff, but what is quite clear is that arenas like that are definitely outperforming and certainly our equity teams are looking for such things and another thing that's doing very well in europe at the moment is in the green space if you like. >> sure. >> the environmental stocks there having a fairly resurgent time as well. things like that we're trying to

pick out those kind of sectors. i'm afraid i can't comment -- >> exactly. i think we have news with eamon javers we want to get to at the moment. what's happening? >> that's right. walmart putting out a press release saying it has come to a settlement with the actor tracy morgan and a number of the other participants in a lawsuit against walmart stemming from the horrific crash on the new jersey turnpike last year. they're not saying exactly how much this settlement is for from that accident. remember that accident killed comedian james mcnair who his estate settled earlier this year as well. walmart's president and ceo greg ferran saying we are deeply sorry that one of our trucks was involved and a statement here also from the actor tracy morgan himself saying walmart did right by me and my family and for my associates and their families. i'm grateful that the case was resolved amicably. >> all right. eamon with the latest on that difficult story as we said earlier, thank you so much. i appreciate everybody's time on

the panel. charlie great to see you. >> guy great to see you. >> go hawks. >> original six final would be awesome. >> there is a lot of action to catch this evening. more with guy and the rest of the crew coming up on "fast money" at 5:00 they will ask jason aider why slot machines could be a thing of the past. the housing market with the ceo of toll brothers beating wall street estimates but revenue came in light. is that a red flag for housing? we will talk about that next. also shake shack's red hot debut had many calling it the next chipotle. today the stock selling off the second session in a row. is a pullback a buying opportunity. a stock brawl coming up. you're watching cnbc first in business worldwide.

toll brothers reporting stronger than expected profits earlier today despite the upbeat second quarter earnings the stock slid on disappointing revenues. joining me in an exclusive to discuss the results is toll brothers ceo doug yearley. welcome to the program. >> thanks for having me kelly. >> let's talk a little bit about what's going on in the housing market. you guys, we use as the proxy for the luxury space what was

behind this revenue miss? even as i see, looks like your price points are still going up? >> yeah. that's really just mix. i think everyone's much more focused on our order growth for the quarter which is our sales. so our orders were up 25% on a dollar value and our backlog is up 9% which is really encouraging. our sales this spring have been good. obviously these homes are big and take a while to deliver. the revenue comes through about nine months later. that's really the focus is the order growth. >> doug is the housing market all regional again? where are you seeing strength? what areas are still lagging? >> it's a very, very local market. california is on fire. 30% of our business is now in california. coastal, northern and southern cal. new york city urban division is still doing very well. dallas, texas, is still doing very well. those are the top markets for us. we still sell a lot of homes in northern virginia and new

jersey, philadelphia. overall the market is very strong. our may numbers while flat for new sales, that's because the first week was slow but the last three weeks of may, have been very strong. we're up 29% in orders for the last three weeks. >> okay. bringing in the package in just a moment here but there's this question about how much of a shortage there might be in the housing stock as there is a little bit of a pick-up in demand again. you know there has been a lot of underbuilding but maybe overbuilding during the boom. how would you describe the inventory of homes on the market relative to what customers are looking for today? >> i think it's good now that the builders aren't building as much spec inventory as they did in the years of '04, '05 and and '06. we were're not a spec builder. most of our homes are sold under contract to those who want us to build their dream homes and most of the other builders are being cautious. inventory levels are good there aren't that many shortages out

there and thankfully to the a lot of oversupply right now. >> doug it's carol. i want to know in terms of the luxury end of the market what percentage of your buyers do you estimate are international buyers versus u.s. buyers? i know that the international buyers particularly in california and new york, have been part of the reason driving a lot of the growth in those particular markets? >> so in new york city for our high rise business it's about 14% of our buyers are foreign. in california it's probably a similar number. it's not a big driver of our business on either coast. and those buyers are still coming out. not with standing the strength of the dollar many foreigners want to have a home and invest in this country and haven't seen a change in the foreign investment. it's a small part of our business. >> doug, it's kenny. i should say i was a toll brothers owner, you built me a house 15 years ago. it was a gret house.

it was a time at my life my kids were younger. i don't need a house that big anymore and got out of it. is there a move that you're seeing? are you still building 5 and 6,000 square foot homes or seeing the next group of buyers really wanting a home that's not so big and not so mcmansion type the way they would describe some of the homes? >> well kenny, we have a house for you today because not only do we do the luxury move up home that you bought 15 years ago, but we're following the baby boomer demographic. we have empty nester active adult community around the country now, that cater to the -- you know, to the generation where the kids have moved on out of the house, and the couple wants to downsize. so we really do it all. we still are a luxury move up builder but also doing a lot more empty nester adult. second home communities and result locations, city living brand in new york city washington, d.c. and philadelphia.

we're also building luxury apartments. pretty much any kind of luxury home you want rental or for sale we're your builder. >> real quick, two quick questions. one, what do millennials want and the second is what do you expect is going to happen when interests start to go up mortgage rates? >> so millennials right now, a lot of the millennials are in their mid 20s they're not buying homes yet, still renters. one of the reasons we got into the apartment business is to chase the millennials. getting married later the life than prior generations so having kids a little later which means they may be putting off their decision to buy their first home until let's say the early 30s instead of late 20s. the home they buy might be bigger because they're a little better off at that point in their life. we don't do a lot of the product for that crowd because we don't do starter home but we have some of it and what they're looking for is more of an urban lifestyle.

obviously it's a starter home so it's a little smaller. but it's going to be interesting over the next five to ten years to see how that millennial generation plays out. they're just now beginning to buy homes. >> yeah. just finally to that point about interest rates mortgage rates moving up what impact are you bracing for them there? >> you know there's been really no move in interest rates now for the last couple years. we've been sitting in the 3.5% to 4% range. i've said many times if rates tick up slowly because of very strong economic news which is the reason rates should move we will be fine. i will take a 4% rate any day, 4.5% rate day any day with a good economy. so longs the fed moves rates that way based on strong economic news, we will be fine. our buyers aren't talking about it. very few buyers want a long-term lock. i don't think buyers are that worried about rates right now. if they go up as the economy improves and go up slowly which is what i think will happen, no

problem at all. >> we'll leave it there. thank you so much. appreciate you being here. doug yearley the ceo of toll brothers. investors have been in a feeding frenzy for shake shack stock. shares up nearly 300%. a quadrupling, down sharply this week and the stock looks like krispy kreme's rise and collapse more than a decade ago. he'll make his case next. plus how is mastercard competing in the increasingly crowded payment space? we'll hear from the company's ceo coming up on "closing bell."

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with sleep number. a full plate of restaurant news being served up. mcdonald's announcing it plans to stop reporting the monthly same-store sales. gourmet chain jimmy john's sharing plans to ipo and could value the chain around $2 billion. and then burger joint shake shack down today, about 14%. some analysts saying the stock is too shakey for their liking. let's bring in chief invest mns straight gist at mun morning.com bearish on the stock with our panel burger lover kenny pull carry and carol roth. keith, why are you hating on the shack? >> look at it this way make a great burger snazzy place to hang out but doesn't make it a great investment. this has been priced in the nose bleed section for a long time now. the price to earnings multiple is over a thousand.

that means you have to wait a thousand years to get any money back that you invest in the company at the current rate of earnings premium to the industry not warranted and look at the analyst estimates themselves. looking at a price of about $45. you're talking less than half of where the thing traded on friday. sneads to shake -- needs to shake out. >> whu do you think there's -- is this just a valuation play or the business model fundamentally needs to be considered? >> i get concerned when i hear ceos talking about things they can't explain or qualities they can't teach. this reminds me of krispy kreme ten years ago when they talked about qualities in their employees and doing a better thing. i never had a soevlly conscious -- socially conscious hamburger myself. i don't know how that plays into the investment fill vos lossfy. that concerns me. the technicals is reflecting emotion and hope from a skunler confusing this with a tech ipo and the numbers are not warranted. it's not mcdonald's. >> that's true but guess what?

there's two things going on. there's only 5 million shares outstanding. the float is very small. that's number one. who's forcing this price up? it's not the company. it's these investors for some reason are putting this valuation by paying these prices, right. i would agree, i think the thing is up 300% since it came if it backs off 15 or 20 or 30% you're still up 270%. now that being said is that the reason to go out and buy the stock? no. you have to let it settle in. it made too much of a move. but i do think if it settles back in closer to the 45 50 range it's probably a good shot. >> it's very interesting, back in the mid 90s, when i was an investment banker at montgomery securities i banked the restaurant industry and back then you would have never been able to take this company public because of the number of units they have and the oversize of the chain so the fact that it's being valued now at a higher value than the cheesecake factory which has 181 ufits that do -- units that do double digit

amounts. >> menu items. >> on an average per unit basis, is concerning to me. i think the concept is great and has legs but from a valuation standpoint take a step back and ask yourself how does it catch up to the valuation. >> you're drawing comparison as we look at a nasdaq closing at an all-time high this is like the krispy kreme of back when? >> well, it is. look at what happened with krispy kreme. look at first 200 days of trading for krispy kreme and shake shack the two track closely. the krispy kreme fell 85% on the first earnings miss and ten years later only 39% of that peak. if you're an investor do you want to be the last one in the door at a price of tag of $90 even if it goes to 45 you're off half. i don't think the valuation is there. $3 billion, even at 50% profit margin a shack that will sell -- hypothetically speaking running numbers $3 billion market cap at

a $9 hamburger and to be generous for the sake of argument 50% profit margin talking 722 million burgers this year to support earnings at the present rate. that ain't going to happen. >> kenny -- >> mcdonald's has 6,000 locations. >> final word. >> i was going to say, i may agree but once again it is the investors that are creating -- it's creating the illusion by paying these prices that have to stop and take a step back and look at what the investment thesis is. >> traders not investors. >> traders. >> okay. >> that's true. >> bad investment, great trading. >> more of a trading stock. >> all right. leave it there. >> not suitable for investors. >> burgers versus doughnuts. good to see you this afternoon. >> thank you. >> time for a news update. courtney regan, what's happening? >> good afternoon to you. here's what's happening at this hour. u.s. officials tell nbc news that live samples of the deadly anthrax bacteria were accidentally shipped from the army's dougway proving ground to utah to the defense department and private research labs in the united states. dod said there is no risk to the public as all samples have been

secured. walmart and the attorney for comedian tracy morgan and two other men announcing a settlement agreement ending a lawsuit against walmart arising out of a multivehicle accident last june on the new jersey turnpike. the terms remain confidential. morgan released a statement saying walmart did right by me and my family and my associates and their families. i am grateful that the case was resolved am my ka xwli. japan one step closer to restarting a nuclear plant. regulators say they finished inspecting the sendai nuclear plant in southwestern japan. the first statute of an african-american soldier unveiled at the national civil war museum in harrisburg pennsylvania. he fought in the civil war and died in 1943 at the age of 97. that's a cnbc news update at this hour. back to you. >> courtney thank you so much. whlg coming up next an interview with the ceo of mastercard. how he's fighting to protect consumer data and apple and

square are impacting his business. fifa the most powerful soccer organization embroiled in a massive bribery and corruption scandal. how big this case is and what it means for the most popular sport coming up. and we'll head back to the code conference for an exclusive interview with airbnb founder and ceo brian chess ski. we're back in two. working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this.

cnbc is live at the chicago forum on global cities one of the topics focuses on the way global cities are driving today's global economy. joining us to talk about that and more in an exclusive interview is mastercard ceo ajay banga. welcome to the program. great to see you. >> thank you kelly. glad to be here. >> let's begin with why you're in chicago and why you think it's so important that we understand the role cities are going to play in our future? >> well i think that cities and the growth of organization is going to be part of the way that this century shows how populations will condense and come together. you know that by the year 2015 they're talking about seven out of ten people living in cities around the world and if urbanization is done well it can be the best way to create an

equitable, inclusive and ecologically possible way of growing our population and lifestyles. if it's done badly you can end up with populations disadvantaged, disconnected and thanks to social media, actually capable of communicating is very quickly and you get the kinds of returns and results you see when you don't have the right kind of development in that city. you've seen it happening in the united states in a couple cities in the last few weeks. >> sure. >> it's really important to focus on citys. >> ajay is there a role for master card to play in developing cities in a positive way? >> oh, yes, absolutely. everything from transit systems to connecting to networks. if you look at transit systems, think about intelligent routing for you personally depending on traffic density and what you want to do combined with integrating ticketing. three tickets to go from connecticut to new york. if you could get one and save 15% of the cost of the ticket for the transit system along the

way, i would see that as a win/win for the consumer and provider of transit. secondly all kinds of other networks. social benefits or networks like getting educational scholarships all these things can be easily facilitated using both our technology and our data. it's the combination of those two that i'm talking about. >> it's interesting, ajay that you position yourself in the middle of all of this because another way of looking at it there are all these different networks and payment systems chipping away at what used to be a core mastercard business. how do you guys remain in the middle of this so you can capture all of that benefit and perhaps be the engine of innovation? i would love one ticket to go from connecticut to new york believe me. >> look it's like this a lot of the folks coming into the payments world they are coming in as partners of ours. at the end of the day we aren't in the direct consumer business we are a b to b to c company. we provide the connecttivity and

infrastructure between consumers and merchants and banks in every country around the world. if you're an apple pay you're using our basic as those as visa and am mention to enable consumers to tap their phone. if you're a square and you want to use a square dongle to accept a card at the end of the day the reason you're accepting the card it's riding on our rails again. in a way these are actually ways for our business to expand and take on the real opportunity which is the 85% of the world's retail transactions are still in cash. that's the real opportunity. it's not the opportunity in the 15. it's the 85% that we're focused on. >> 85%. that is an astonishing figure if you think about it. at the same time the debate as you know taking place in silicon valley about the 15% where there's so much money going around so many start-ups you named a couple of them that threaten to up-end this entire space. what do you think payments are going to look like in five

year's time and how do you ensure they're all riding on your rail so to speak? >> well one thing is for sure these five years are going to see more change than the previous 15 years. the pace of the change in technology in this industry as in others is just increaseing exponentially. what we are trying to do is connect up with all the folks who are innovating at the edge of the space. whether we do it through our own mastercard labs or do it through the sort of the investments that we're making in venture capital firms or startups or we are started and funders accelerators and incubators, we get to see the technologies and they understand our capabilities and we get to participate together. i think that what we bring to the table is something that mostly startups will need. they need to be able to get to the consumer with something that is safe simple and secure. and we can help them that with that. that's the role we play and that's our focus, safety

simplicity security. >> ajay banga, thank you for being here this afternoon. really appreciate it. >> thank you. ajay banga is the ceo of mastercard. breaking news out of washington. eamon javers what's happening? >> yeah hi kelly. the doj report earlier today, now we have more news from the irs on this hacking attack and this is an ap report now from sources to the ap. which we have not matched independently at cnbc but ap reporting the irs believes that the identity thieves who stole the personal tax information that was reported earlier today, are from russia. now i should say there's no more context to this report that the wires are flashing but a distinction between identity thieves being from russia and the russian government. a lot of cyber security criminals who operate out of russia and some of the nearby countries. one of the questions here will be exactly who was behind this whether they were located in russia or not. what was their motive and their affiliation with any national

government. the ap as of right now reporting that irs believes those identity thieves were in russia. >> all right. eamon, thank you for now we'll keep following the story and bring you more details as we get them. >> soccer has arrived in the u.s. but it's in the midst of a scandal. fifa slammed with a calamity that rivals anything baseball and basketball has been slammed with. soccer getting hard. we'll go behind the headlines next. still ahead, going from the small screen to the big one, it's not a guarantee for box office success, the creator of "entourage" joins us to say if there is gold to be mined for the former hbo series. stay with us. ♪

the u.s. is issuing fifa a red card alleging counts of fraud and bribery. the action buy the justice department has garnered more attention for fifa here in the u.s. than it usually receives for actions on the field. joining us for his insight into the matter the congressman from california, a former soccer player himself co-chair of the congressional soccer caucus cause which i just learned exists. welcome to the program. >> thank you for having me. >> what's your initial reaction to this matter? corruption is alleged to have run two generations, pretty much a known matter but the u.s. appears to be taking on fifa in a role that they haven't successfully seen any other country around the world do?

>> i'm very disappointed as a former college soccer player and chair of the soccer caucus in the actions of those at fifa. i'm grateful that the justice department is taking this on but i think it's time for new leadership at fifa and fifa's members have an opportunity to replace its president and the coming week -- in the coming week. >> don't you think, though, congressman there needs to be an overhaul the way fifa does business its organization simply allows it over time to be rampant with this kind of behavior? >> i think what fifa must do to restore the integrity of this world unifying sport is shine a light on what happened with qatar and russia and completely go back and look at whether they should have been awarded the world cups and if not, have a fair and open process. the integrity of the sport is more important than one person or one world cup site. >> it's a point, carol. >> i don't know. i for one am completely shocked.

next you will tell me boxing sometimes is fixed and that wrestling perhaps isn't real. i guess my question for this congressman is why is a u.s. taxpayer do i care about this? why should my tax dollars be used to investigate this get in the middle of this spend any time on this when there are real problems here at home? >> well soccer is a sport played by millions of americans and fifa is the world's organizing body. i as a youth soccer playing growing up i played under fifa rules and if if there's corruption at the top our youth leagues are affected by the leaders of fifa and if they're on the take we want to make sure that it is a process that is traps parent and thoeld account. >> you -- held to account. >> you raise a question answered in how or why is the u.s. takings the lead. it happened on our soil and it's been happening on our soil for years. >> it may have but from my tax dollar perspective and all the

things we need to do to fix things in the u.s. for people who don't have jobs et cetera this does not seem an area we should be spending taxpayer dollars. my. >> i have to tell you, i'm also amazed it has gotten as much press. i mean i guess it's a -- kind of like a story but i agree with carol, i'm not sure why we're spending, we as a country, will spend all this money to investigate fifa. throw them all out. throw them out. >> what do you mean throw them out? >> all the guys that are corrupt, the ones that get arrested throw them out. >> out of the country or organization. >> out of the organization and do what you want with them in terms of handling their misdeeds start at the top and reorganize the whole place. >> that almost suggests the u.s. should take on a more active role. carol saying maybe we shouldn't be involved at all? >> i say the united states could host the next world cup. >> okay. that would be great, right. wouldn't that be a great thing for us to host the next world cup. >> every time we host something that brings in so many net

dollars into the country seems like a fantastic idea. >> i'll give you the final word on this congressman. >> i just want to commend our justice department. i think this is something we should care about. this is a worldwide organization, it's the most popular sport in the world, and these individuals who are on the take and it's important to restore the integrity of this unifying sport and i think it's time for the president of fifa to go and put back the faith that we once had in the organization that so many millions of americans are a part of. >> yeah call me old fashioned i like to stand up for what's wrong. thanks for being here. >> thank you thanks kelly. >> and even if it costs a few dollars. when amazon prime beat out netflix for many of hbo's hit series the deal did not include the comedy "entourage" as the tale of four friends living in the hollywood high life gets ready for its theatrical release we're talking to the show's creator to see if a lot of wide spread screening will hurt at the box office. we'll come right back.

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welcome back. looking at the nasdaq which today closed at a new high 5106 the level. we're about 50 points or so off the intraday highs. that will be something traders

watch for tomorrow. 1.5% gain on the session today. now after a four-year hiatus "entourage" that series hbo delivered to us over a decade ago is back, this time on the big screen. the film had a special is if man behind it all doug allen that created the tv series and wrote and directed the upcoming film. welcome. >> thanks for having me. >> have you been here like this before? >> no net like this. >> congratulations on the success of entur rage. is it the first of many movies? >> we hope that people will go. we had a great time doing it. >> how do you get the word out? >> i am doinger everything that i can. i am going rangers game. i am doing everything that i can. the guys did the wrestling the

other night. we're running around. we feel that we have the great movie, and we have to get the word out. >> the content has been such an important investment, and i think that it's going to be one, what have you learned about creating and something like this that's been out for so many seasons and transported to one and more movies? >> you can not learn about that. you do the best that you can, and you hope that it sticks. when it started, we had no idea if we last an episode. to go and do eight years and then a movie, is surreal. >> it's going to be interesting the see if it can make the jump from what was a very successful series to in fact if this movie takes off. you have been doing the great job of getting off. they created a stir on the floor. they were showing up in places like the voice and so you can

feel the buzz. >> so how much of that. you did not do the content as much. you were just indicating it. >> i kind of look at it like it's a separate property. we go and see what we can do with it. the movie stands on it's own. hbo that 30 million subscribers. there's a giant world out that there that does not know the show. this is the most time that people have at the movies this summer. you do not need to see the show to enjoy it. we hope that they will come out and do that. >> it also had a cult voluming. you see people say see this and if eyes light up. those people alone are going tonight up. i think that social need octavia is going the same. >> thank you for having me. >> doug allen the creator of

entourage. up ahead two leaders raise the bamplt we're back in two. bamplt we're back in two. abamplt we're back in two. rbamplt we're back in two. .bamplt we're back in two. we're back in two. we're back in two. 're back in two. 're back in two. 're back in two. 're back in two. w're back in two. e're back in two.

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on the lessons learned from sharing a business. rose from waitress to sits down. ♪ >> when i started in business i was a real e state broerkcker. i respected some great corporations. my goal was to get the best deal that i could. it's not about who got the best deal, but both sides walking away feeling like it's a fair deal. not that one won or the other one lost because then i think that's a bad deal. >> yeah. woman are so hard on themselves about doing all things and be perfect. i have seen that take a lot of professionals doing. i try not to be too hard and keep people close to me and comfortable in being super honest. i don't want to miss the important things in lifer.

friends and family get sick and pass away. it's a gut check. >> absolutely. >> to think that life is just so short. it's too short to not be happy. time to beconscience as time goes on. >> i am working everyday on that. >> that's a message that we can use. visit cnbc.com. turn to go the panel nasdaq goes out. it's the record high and yes carol was on the back of some big news. 5106 in the ship space, but what's the broader message here? >> well there's a couple of messages. one there's a intervention and regardless of how we feel you have to realize that's the way that things are going to happen.

then mna are here to statement off a lot that have not invested for the future and this is how they're driving girls, and go blackhawk. >> at the same time what did you think of doug's comments where he said california is on fire. he said that very strong in the trend on the housing market? >> i am shock that had he said that. i am shocked that he would have picked california as the strongest market. >> it's not the fist time buyer. >> i hear you. that's interesting and i suppose that in california maybe all of that stuff and maybe that's what he is talking able. i am not seeing it. notice that he did not say new york. that was interesting. >> he mentioned urban new york. >> urban new york. i am talking to suburbs of new york. connecticut new jersey. that's why i asked him because the same house that i sold four years ago could not tell me what

he paid for it. it's still under pressure. still under pressure. >> wall street and main street. the people that are doing well are doing well. it's not reflective or what is going on and the average is inflating the message. >> that's why it's so confusing and go back to the market. that's why the market is confused. i wrote a blog today on why the market is confused. it keeps on getting the mixed messages. one day we're down and then not. people are scratching the head saying what is going on. >> to be expected i suppose as we move into the period of great normalization. >> yeah, the point is ramped confusion. we can not get a sense of where they're spending the time and money. everybody is confused. >> why don't we leave it there. everybody goes i don't know. maybe fast money can figure it out for us. seriously everybody thank you. let's hand it off to fast money

and melissa, what is on top. we have the exclusive from the code conference in california. that's coming up. >> great stuff. we have been waiting for that. so listen after evan's comments about the bubble very interested to see what he says. thanks. fast money starts now. live from the market and over looking new york city's time square. tonight on fast a new hotel has some traders cashing out of casino stock. the one vegas insider say that is now is the time to double down. he has a reason why it could soon hit the jackpot. we're going live to the conference where we will hear from the boss of air b and b. when they will i no. the new closing high in the books for nasdaq. it's higher than 1 and a half percent. you can thank the chip stocks