the all-new glc. the suv the world has been waiting for. starting at $38,950. hi, everybody, welcome to "closing bell", i'm kelly evans. >> and i'm mike santoli in for bill griffeth. two hours they started to both go vertical and the fed telling cnbc chances for a global recession are not high. >> after citigroup had come out saying maybe they are. >> cracks in the high end restoration hardware, it's really getting hammered today, down 27% or so in the session.

we'll discuss what it meepz for the broader economy. china getting hit hard overnight coming into the session, not taking much of an effect on the u.s. markets, we'll break down how you could be exposed to china without knowing it. >> that's an interesting angle on all of this. we have breaking news on apple. what's happening eamon? >> apple just filed its official motion to vacate to the court order last week that required apple to cooperate with the fbi in its investigation into the cell phone of farook the san bernardino shooter. the reporters say this was designed by apple to be written in an approachable and accessible way. they also say that this is intended for a broad audience. it's officially a motion to vacate motion here but they say they are expecting a wide audience to read it. they have written it directly that way. a couple of facts here, they have gone above and beyond and

say the government is now asking the court ordered apple to do something congress has not authorized and the doj and executive branch expressly backed away from, effectively hijacking an important national debate. how we have the official response here from apple to that court order. we'll make our way through and bring any news out of it. >> eamon, anything jump out this morning in particular? >> we saw james comey on capitol hill, it was very clear he was being careful in his response to legters. at one point one legislator gave him a real opening saying that apple is only acting here to protect its business interest. comey went ot of his way to praise apple. behind the scenes talked to a senior law enforcement official said who officials were frustrated by the interview in which he said this threatens the security of millions of people around the world.

they don't see it that way here in washington, d.c. they are frustrated by this debate and clearly apple is frustrated as well and put out this new motion to vacate and expecting a large audience to read it. >> i would assume this motion by apple was somewhat expected. this kind of expected procedure playing out right here? where does it go next? >> it is. they have until tomorrow to get this done. we expect probably they would do it today so they didn't wait until the last minute. now we have tim cook last night talking public a and apple filing its response to the court. next week we'll see more procedural wrangling here and ultimately we're headed towards a court date at the end of march in which both parties will have an opportunity to talk to the court in public about all of this. of course on march 1st, we've got a new hearing scheduled up on capitol hill, the judiciary committee has called the fbi and apple to testify about all of this. the fbi is sending director james comy and apple is sending

general counsel to testify. that lsh a flashpoint as early as tuesday as next week. >> apple has obtained ted olson. i wonder if this is headed for the supreme court? >> i think it is. both sides are indicating it's heading to the supreme court. they both seem to be pretty well dug in here. the expectation is whatever happens with the judge's ruling in this case, once the judge has an opportunity to review this filing today, the judge will issue a decision here inhe have itably you can see that will be appealed to the next level. >> eamon, it's hard to handicap how this might go. any thinking as to who has the upper hand? >> it's unclear. it's not clear how fast this can get to the court and what the makeup of the court would be at that point. this goes from here back to the judge who initially made that ruling then it will go to the ninth circuit of appeals on the west coast. maybe that circuit of appeals is

more friendly to apple and tech community given it's out in california and in that area. once it leaves the ninth circuit, it goes to the supreme court. whether that could all happen this year is certainly an open question. it might be unlikely and by the time next year rolls around we have no idea who will be president of the united states and who's going to be sitting in the supreme court and what that case is going to look like by then. >> so many moving pieces, we're going to talk to jim himz coming up in a little bit. he was involved in that hearing this morning. thank you for now. eamon with the latest word out of apple. let's send with the message about the economy as we turn our attention back to markets. an update, dow, up 147 points but restoration hardware is getting slammed. >> it is. it's an interesting tale of what's going on of the consumers continue to be discern, some loosening purse strings to the benefit of some retailers and detriment of others. retile analyst oliver chin

thinks the middle and lower income consumers are in a better place thanks to lower gas prices and healthy employment. higher end consumers typically pay more attention to the stock market and how the elections could influence the economy and those are wild cards right now. chin's theory is playing out in retail earnings, target comparable sales for the sixth quarter and issuing more upbeat guidance. in the sweet spot of catering to the middle and income consumer right now. wall mart is saying customers are benefitting from lower gas price, helping to maintain positive comparable sales and traffic there too. at the higher end, restoration hardware preannounced those fourth quarter results well short of consensus, shares down 30% in response. gary freedman is pointing fingers at the market, plunge in oil prices for consumers reluctance to spend on high end furniture and nordstrom with a second consecutive disappointing

quarter, plagued by weak apparel sales. saks saw sales drop 1% but it sort of speaks to the higher end consumer being weak but that lower, middle, offprice consumer still being pretty strong. kelly? >> yeah, courtney, i wonder if people are accepting this excuse or this explanation from restoration hardware on face value and these other companies. is it the new weather, just companies that have a hard time ablg to say our customer just wasn't feeling so confident this month? >> it is very interesting. restoration hardware has a pretty unique product. it is furniture highly priced for a lot of consumers, a big decision and big purchase for someone to make. january is a very important month for restoration hardware and that was a month where we saw a lot of volatility in the stock market. that consumer that's buying at restoration hardware probably ties up a lot of their financial

well being in what's going on in the market. i don't know if we can call it excuse. it might be a real reason. we'll have to see what happens. if the company does better, it was a very strong finger pointing from the ceo. >> and a rotation that even last year, the year that main street should outperform wall street at 2016, maybe that's starting to bear some fruit. >> thank you. courtny reagan, moments ago, we brought you news, speaking out within the past 24 hours. >> if a court can ask us to write this piece of software, think about what else they could ask us to write. maybe it's an operating system for surveillance and ability for the law enforcement to turn on the camera. i don't know where this stops but i do know that this is not -- this is not what should be happening in this country. >> law enforcement, which i'm

part of, really does save people's lives, rescue kids, rescue neighborhoods from terrorists and we do that a whole lot through court orders that are search warrants and do it a whole lot through search warrants of mobile devices. we're going to move to a world where that is not possible, it will not end but it will be a different world than where we are today. >> let's get the congressman jim himz in the hearing with james comey, both sides, tim cook and director comey said this is a complex issue, these are very large issues, we should have a large national conversation. did anything you heard in the last 24 hours change your thinking about how this all should play out? >> i'm not sure i heard anything in the last four hours that changed my thinking. what has happened, i've got an appreciation for the complexity of the issues, tim cook in that clip asked a very good question. and obviously comey made a good point. i'll tell you where i come out.

obviously we want to find a way for the fbi to get the information that is in this particular iphone. there could be of course it's possible there could be people who helped in that attack in san bernardino. we want to know that. but before we give this authority, we need to answer the question that tim cook asked, where are the limits of this authority? by the way, we all want to make ourselves absolutely come fofrtable that once this code exists that apple is getting asked to write, it is very well protected. just imagine, this is privacy versus security and also security versus security. imagine it falls into the hands of terrorists and terrorists use that to unlock my phone or your phone to find out where you or i are at any given moment. >> it's complex and there could be unfortunate consequences no matter how it goes. congressman, in some ways the point is rather straight forward. it's sort of if there's evidence on this iphone that is material to a case especially one of this importance, why shouldn't the government be able to access it.

>> they should, but with the right protections that assure us that the code that would allow this to happen isn't going to fall into chinese hands or al qaeda hands or crime cinsin da kat's hands. where does that authority end. can the government say to apple the next ten i phones, you have to insert software that will give us access? the answers aren't 100% clear but we better have that conversation before we grant the government broad authority to do what they are asking to do. >> congressman, is there any idea out there or any real sense that that bargain can be struck, that we can actually have those safeguards and still get at the information? >> i think it is. two things to that, one, right now this conversation is happening in the wrong place in a court between apple and the fbi. it is this institution, the congress of the united states that is made up of the elected

representatives of the people of the united states that should be having this debate. we should pass a law which draws those lines. sadly that ain't going to happen. instead it's going to play out in court. >> why isn't that going to happen? isn't that exactly what you should be doing right now. >> it is exactly what we should be doing. >> bringing people together to bring the best way forward? >> it's exactly what we should be doing and should be doing an authorization for the use of military force in syria. that's clearly in the constitution, our job. we should be confirming a supreme court justice, that's pretty clearly in the constitution as our job. it ain't happening and that's going to happen in the courts which is not where these decisions and arguments should be made. >> advising and giving consent, not just rubber stamping the supreme court but to stay focused on this issue, again, tim cook is choosing to take this in a sense into the public forum and it's actually becoming quite political issue and it's going to take a while for people to take sides but maybe that is the worse thing that could happen? >> i disagree with that.

i'm glad this is in the public forum and the fbi made the request they did and apple is resisting. this means we're going to have this discussion about what exactly the government gets to ask corporations to do. tim cook's point, right, exactly how comfortable we are with the authorities that the government could have, what it means for our security. i'm really glad -- you say political but of course the political arena is where we have these tough can conversations so that's okay. >> as this debatd has developed, people on one side accusing the other, both sides of attear yor motives. on the other side they say the fbi and prosecutors want wide open access to this type of code and a lot more tools at their disposal. do you subscribe to either one of those things, are we having a good faith conversation here? >> any time you have an argument in washington, there are people who would rather focus on people's motives than the

substance of the debate. the point is, this is not a month brainer by any stretch of the imagination. there are issues in which there are serious debates to be had on the merit. i'm not interested at looking at motives but we should be having the conversations. >> i think we're getting more breaking developments on this particular issue. let's get back to eamon in washington. >> i've been going through this apple motion and give you a couple of highlights from what's in it. they are saying no court has ever authorized what the government now seeks, no law supports such unlimited and sweeping use of the judicial process and the constitution forbids it. now we're getting into a constitutional debate here in a conference call with reporters apple executives are suggesting now that what they are talking about here are their first amendment rights and fifth amendment rights. clearly they are suggesting that the government would be trying to compel apple to create new speech, that is the software

itself would represent speech. a constitutional defense here now from apple that indicates to me as a nonlawyer that we could be heading to the supreme court. >> that's for sure. it sounds almost designed that way. thank you, let's get back to jim who is standing by. perhaps because this particular issue, apple says in order for it to get that this iphone in question, it would have to create a parallel operating system to do so. but if there were other tools available, we wouldn't be talking about compelling free speech and compelling a company to do anything. it's more about does the product allow law enforcement to access evidence on a phone for this case and many others across the country where crimes have been committed? >> you raise a really important issue, which is that in some sense the debate we're having has a pretty short lifespan because it's clear that these companies are capable of

producing phones or software or applications that they simply can't get into. and when that happens, of course, we're going to have a world and that's not a world that jim comey wants to be in, write this code and open up this phone and apple says i can't do that. that's also sort of a challenging topic. >> that very thing being reported today, that the new iphone platforms will be even less -- will have even more security systems tougher to design and the i cloud will be tougher to crack. >> exactly. it becomes an issue more institutionalized as oppose to one fleeting with one generation of products. >> to that point, i wonder into what world that leads us. congressman, do you think kind of a final big question on this point, does this represent a whole new chapter in terms of constitutional law in this country because this is the kind of device that we haven't had to

reckon with previously? >> i think it will take us back to a debate during the clinton presidency, the possibility of tech no logical back doors, people will remember the possibility of a clipper chip. fz it possible to create a device and the creator cannot get into, then people ask questions, do we want that device out there. there will be people who say yes as long as there is a back door and the counter to that, back doors make me very nervous. if they are available to the fbi, they are also available to the iranians and russians and available to the chinese and that is a very, very difficult and slightly scary world to be in. >> it's somewhat ironic that the u.s. government has been funding and developing the encryption products to use in other countries that are in some ways the same kind of debate we're

having here. >> thank you for sharing thoughts on all of us with today. >> we'll follow the apple story throughout the hour with 43 minutes before the markets close, we're seeing a pretty nice rally. >> dow is up 154 and 160 at the high. we've finished recovering that lost grounds from yesterday that started midday. coming up, your portfolio may be exposed to china without you realizing it. sharon epperson has a special report.

even here at the stock change everyone is focused on

the story of apple and the fbi. stocks are up pretty nicely at the moment. dow adding 156 points and nearly 1%. and nasdaq is lag, only up 17. >> it's a defensive sectors leading the s&p and dow for now. we've got more breaking news on apple. josh lipton just got off the conference call and joins us with the latest details. >> mike, apple's lawyers just had a briefing with members of the press to really outline what their courtroom strategy is going to be. essentially the lawyers saying for one that the government is overreaching when it comes to the centuries old law used to compel companies to assist the government. apple's lawyers saying the act does not in fact support the kind of sweeping use of power that the government is seeking. they also say the government is violating their first amendment rights. essentially the argument here, remember the government trying to get apple engineers to write new software.

apple's argument is that code is essentially free speech and as such is protected by the first amendment of the u.s. constitution. apple also saying that it's fifth amendment rights are being compromised and that the government is basically trying to force apple to write software that undermines the security of the own products. that question whether a company should be forced to weaken its own security, lawyers arguing that is essentially a political question, not a legal one. echoing the same argument we've been hearing that this is a argument that should be decided by congress and legislators and lawmakers. i'll point out that tomorrow is apple's shareholder meeting in cou cupertino. you can be assured that tim cook will get questions from shareholders about this. back to you. >> josh, thank you so much. apple shares are fractionally higher on the session.

you mentioned it's a little defensive today. citigroup was making waves on wall street this morning saying the risk of a global recession is rising. st. louis fed president james bullard responded to that. >> i don't think the probabilities are particularly high. we always face risk. we are at a lower trend growth rate. you could always argue there might be a higher probability of recession because the trend growth rate is lower than it was historically in the u.s. >> well, is he right? joining our closing bell exchange today, we have robert frost of frost and frost wealth management and steve grasso both here and rick santelli in chicago. robert, let's start with you. how big a question is it in your mind the probability that the u.s. might enter a recession? >> it's pretty low at this point. we don't think the chances of us going into a recession in the near term is really on the table. at some point we will go into recession but we don't think

right now that the economy is weakening to the point where we're going to be going into a recession. we think it makes a lot of headlines but our work is not going to happen. >> why is the market doing so well, especially how weak a session in china and could make a case for a session in the red. >> if oil stays above $30, that mental level of $30, it's quasirisk on. i don't think it's necessarily risk on because mike just pointed out, defensive names and sectors are leading the way. s it not all clear to get back in the water yet but guys are taking a hiatus right now. >> even if the economy itself is not wobling on the edge of recession, we have an earnings recession and corporate earnings have been in retreat for a while and the parts of the economy that matter most to public equities seem like they are struggling a bit. how does that alter the way you investor color the way you're investing?

>> right now is a good time for investors to settle in and make sure they are diversified and not overly exposed to sectors beat up the most. and that they continue to look long term when in fact if they do have a long term goal. we're going to continue to have problems. earnings right now is a significant problem. the wall street journal today came out with an article that really questioned the reality in earnings. >> correct. >> that's a real problem. right now the market continues to get whip sawed by oil. there's about a 95% correlation with oil prices in the stock market. unprecedented. there's a lot of problems -- >> i know we want to get to rick, i want to point out what you started off saying risk of recession. normally there's a 350 basis point spread between the fed funds rate and 10-year, longer term rates. we have at best half of that. we're in grave danger of averting the yield curve of the janet yellen should not have raised. we want to get back to normal

sized rate but she should not have raised. >> enter rick santelli, how would you read financial conditions at present? >> i think there probably is a significant chance that the global slowdown will affect the united states. james bull ard, we pay close attention to what he says because he's an f 1c member but the track record isn't the type i would think on morning star's best list. he was totally talking about extreme monetary policy as late as december of last year, right on cnbc.com article and all for the rate increase. he said to pay attention to inflation, excluding oil. listen, what nobody is perfect, but he immersed himself in this. i would have much preferred that he would concentrate on maybe one of the biggest reasons why interest rates in this country are where they are at. look no farther than a boom. china goes down and the rest of the world seems to ignore it. why are rates down a handful of

basis points today? it isn't from the data. the data was better than expected. now let's look at a boom chart. they settled at 13 basis points, the fifth lowest close for a ten year bund. we followed them. i don't care what type of policy we have, maybe if the fed committee would quit trying to h handicap the future, which ben be bernanke, they are not worried about subprime, what policy is doing to the market to try to get ahead of this. >> what do you do in that type of w0r8d where basically markets are saying some kind of deflationary scale or that being a threat for a long period of time. >> it's going to make it tough if the fed doesn't know. that tells me they have no idea. it's going to be a guessing game and the markets are looking for some sort of stability from the fed and without getting it, it's going to be tough. >> it remains tough, that is

correct. a half hour to go before the bell. dow still up, not too far from its highs on the day. 153 right now. >> up next, a special report on how investments could be exposed to china without you realizing it right after this. serena williams. hi watson. you are a fierce competitor. i've heard that. i have analysed your biggest matches. oh really? when down a point, you serve an ace 5.8 times more than other top players. you sound like a coach. i am not. but i can customize training programs based on biomarker data. watson, that's pretty impressive. you might say i am the serena williams of cloud-based cognitive systems. nah, i wouldn't go that far.

the shanghai composite getting hit hard overnight, closing down almost 6.5% and your portfolio may be exposed to

wild market swings even though you don't own an emerging market etf. sharon joins us with more. >> china can be hiding in your portfolio in a number of ways you may not realize, to figure out where you need to start by asking yourself a few questions. do you have exposure to the s&p 500? remember, it's a global economy and over half of the stocks in the s&p get a portion of their revenues from china. if you own say the largest traded fund, $170 billion in assets, your money could be impacted. next thing you should do, check your tech, this sector is heavily supposed as well. if you own the biggest tech etf, the qqq, you're definitely investing in china. you also want to look at tech mutual funds, you may not think you own qualcomm, but 25 out of the 52 tech mutual funds invest

in qualcomm and of those 25, it's a top ten holding in ten of the funds. you should check your consumer stocks. china has a rising middle class and their consumers present a great opportunity for u.s. and global companies to increase market share. the average s&p gets 7% of sales from china but yum brands, kfc, receives over half of the revenue from china. the bottom line here, it's worth taking a anyone ut minute to se where china may be hiding. >> it's a great point, especially as people are concerned about the direction of that country. thank you. >> speaking of that, we have the g-20 coming up in shanghai this weekend. >> just about to start tomorrow. and it's interesting, you have some hopes up that there would be market friendly rhetoric or maybe managed currency stability agreement. we don't know if anything like

that is on the table. >> they are talking about swh something like that happened after a strong dollar and things happening like that. the interesting thing, it may not be the currency this time around. look at canada will which run deficits and maybe other companies will do it fiscally. >> it's been the missing piece for years now. >> if they don't it through easing, donald trump will have more campaign fodder. s&p is up 14. the vix is lower today and transports are higher and nasdaq up 15. >> tonight marks the tenth republican debate and larry kudlow joins us next with his take on this evening's potential for fireworks.

let's get a technical look at the markets with mark newton. pretty good rally but you're looking at gold. what's to watch? >> gold is up over $200 since the month of december. one of the best months in over four years, it's interesting to see what the reept move has done when you look at the break of not only the down trends and

gold has gotten up to the highest level since the beginning of last year. gold tends do do well when treasury yields are dropping. we've seen both of those, similar to like last year and it indicates a time that there's a lot of distress right now in central banking around the world. near term you see a break out of the strong pattern. a 14.50, obviously the fall is a great time to own gold. near term buy any pullback -- >> opposite of confidence in central banks. thank you very much. >> pleasure. >> thank you, both. 20 minutes to go here, keeping an eye on the dow, up 159 points, continues to move higher into the close, good for a gain of 1% and nasdaq up only half that amount. there is a defensive aspect to this rally today. st. louis president james bullard doesn't think we're heading for a recession. what does larry kudlow think? he's going to join us next.

we might pick his brain about politics too. giving us his take on the economy in both u.s. and canada later on "the closing bell."

let's get straight back for more on apple's response to the government as this case continues. >> we're continuing to go through this new apple filing and we've got some new information in here now on just how early and intensely apple cooperated with law enforcement in the wake of the san bernardino attacks. they provided exactly what the cooperation was. the san bernardino happened on december 2nd. this is a statement by lisa ollie, an 8 year apple attorney, on saturday, december 45th at 2:47, the emergency call center requested the request for information by law enforcement. law enforcement had this particular iphone in hand. through december 5th they say apple employees were in regular communication with the fbi, later that day, apple -- or later, apple received a request for information on three names and nine accounts from the u.s.

law enforcement or law enforcement and throughout the investigation, apple's representatives were continually available to the government 24/7 and say on sunday, december 6th, apple received a search warrant for information on those accounts, that is the three names and the nine accounts that the government and law enforcement were looking for information on. all of that to buttres apple's point that they cooperated intensely with law enforcement and with the fbi here in the early days, before they are saying they got their search warrant on december the 6th. >> thank you. let's bring in larry kudlow. help boil this one down if you can. you know, does apple have a point here about hey you're forcing us to do and it would be more dangerous than secure? >> i think apple does have a point. i'm a national security hawk but

i confess, apple has a good point. i think they are going to try to get this one case settled but it's going to be very hard in the future. one of the things that i don't understand and you're proving this, apple started out by cooperate gs from what i gather and then all of a sudden the cooperation broke down. most of these things, let's say between the fbi and apple or the national security intelligence and apple, most of it is done behind the scenes. i don't know how this is going to turn out. long run, apple has a great point and i think it's going to be really hard for the government to break that point. >> larry, one thing that does make it tough as well. people don't exactly line up in a predictable way on this. people like you say, national security hawks, also often are people who say, government shouldn't be telling businesses what to do. >> you're right. there's a libertarian issue and free market issues and liberty

issues, i get all of that. the tech no logical debates are way over my head. but i don't know why it festered and they didn't make a deal. they may lose it and never get that deal. i don't know how this is going to work out. right now it doesn't look too good. >> all the same james comey has written that this litigation isn't about trying to set a precedent, it's about victims and justice. we heard donald trump on the campaign trail already kind of doing a little improve suggesting people should boycott apple. larry, what else maybe we'll hear from him tonight? >> well, mr. trump, i think taking the strong national security position i'm basically sympathetic with that but also with mike santolli's point. people are talking about individual freedom. in my view america has to be free and safe for us to have our

liberty. this is a very complicated issue. tonight's die bait, there's a lot at stake here because of trump's stunning victory in nevada where he blew everybody out of the water. stunning victory. if i had my drujers and i don't, i'm not a strategist, i would love to see the donald really take a positive optimistic point of view. we can solve our economic growth problems, we can solve our jobs and wage problems and solve -- in other words, i'm hoping maybe against all evidence, kelly, that tonight is not another cat fight that we actually have some positive optimistic proposals from mr. trump who is clearly the leader, right? he's got -- and ted cruz, one last point, ted cruz is hanging by a toe nail. okay? he's plus seven in texas, which is not good. that comes up tuesday. that's not very good.

trump's beating rubio big time in florida. cruz really has to have a positive debate and i don't know if rubio is going to get at him or not but they may. >> there's still an issue that going forward he'll clearly have to address. getting traction from mitt romney. you know where i'm going with this. but first, let's flash back to the 2012 campaign when it was mitt romney himself who had to deal with this question. take a listen. >> you were planning to release your income tax records around april? >> i heard enough from folks saying let's see your tax records, i have nothing in them to suggest there's any problem and i'm happy to do so. i sort of feel like we're showing a lot of exposure at this point. and if i become our nominee, and what's happened in history is people released april of the coming year and that's probably what i would do. >> was that kelly evans i saw on

that panel? was that kelly evans? that was your ticket to the kudlow report at cnbc. >> good old days. >> and you were terrific then and even better now. it's so ironic, right? let's you and i talk. here's mitt romney, taking a poke at trump's taxes. is there anybody in recent presidential history who handled his tax disclosure worse than romney and never climbed out of that big mess? they waited and waited. >> what is donald trump to do. people have a point. if this guy is going to be the number one, number two, in the mix at some point period for the nomination, doesn't he have to go ahead and get this out there now? >> get it out. disclose, i agree. get it out. the one thing i think -- i'm going to speculate here. mitt romney was mou moued by obama and his team about being rich. i'm not sure he ever recovered from that as much as i like

mitt. i don't think you are going to see donald trump mou moued by anybody. life will go on but let us have a positive optimistic pro-growth debate tonight. america deserves it. we need help. >> make america great again larry. >> kelly evans. >> thank you very much, sir. >> all right, thank you very much. paloalto reporting earnings sooner than usual. >> halted after reporting earnings prematurely and putting out the official release. the number indicate that earnings and revenue beat expectations for the quarter but guidance was mixed and you're looking at the stock up 9.6% before being halted. we'll have to wait for the stock to resume trade. panw. back to you. >> we'll watch that one at the close.

just going on ten minutes before the bell and dow trading up 186, s&p right at the verge of the 1950 mark everyone has been watching as a real threshold to see if the rally has legs. >> david kelly of jp morgan funds believes this market better get ready to face a fire breathing drag on. he'll explain this one next. e*trade is all about seizing opportunity. so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause)

joining us now is david kelly from jp morgan funds. you think there's a whole switch in the markets concern going on here or what? >> people talk about when the market settles down. it tends to settle up. i think what is happening a lot of concerns about first of all about china, those ebbed away a little bit. the other thing we've got a good durable goods report with good unemployment claims the u.s. economy does not look like it is falling on the edge of recession. i think fear is going down. >> bigger picture, you do raise the possibility we'll have to start perhaps worrying more about inflation. is that the case here?

we've been watching for this for a long time. >> it is like the sleeping dragon. central bank has jump up and down and tweak its whiskers because people aren't scared of it. core cpi, by the middle of next year we know the overall will be above that. if core keeps on -- oil will bounce back somewhat. then you could look at 3% inflation year over year by the middle of next year. it's not worrying but it's not environment that bonds are particularly positioned for. >> we showed your inflation dragon but looked more like a tangled vine. i wonder if your argument gets tangled on the point of wages. >> wage growth is picking up but also what we've seen in the past, real inflection point. as you finally get the bottom of the barrel, everybody realizes, employers realize it. there's an acceleration in the rate as you hit full employment. as we come down from 4.9

unemployment rate down to 4 by early next year and 3.6 by the end of 2016. as that happens you'll see ak sell race wages. >> thanks for joining us. >> david kelly. up next we're back with the closing countdown in two.

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closing out at the highs of the day, dow up 200. >> it's pretty amazing. this morning we were talking about in ideas art cashin and others saying that this shorter term average price for market has been this area of stalling out, this momentum killer but it seems like we've blown through that. the question becomes whether or not that positive momentum carries. the flip side is a lot of traders still tell me the volumes haven't been all that robust. >> weeks that's been the case, yeah. >> in fairness to the bulls we've been talking about low volume for the past few days and the market keeps on melting high higher. >> just before 1:00, they started to go vertical, pretty much from a flat level. it's hard to say which led which. >> what's interesting about the way this marngt is setting up, we're heading into the last trading day of the week tomorrow, it has been strernth in utilities, if we want to see leadership, don't want to see it straight from the defensive

sectors, we know interest rates are low and know they've been that way for a few weeks now. arguably, for the past few months. but whether or not that continues, financials will still be a key. the second biggest sector in the s&p 500 has to show some -- >> they participated today. there wasn't just the bond like stocks but a lot of people will see this and say, well now the market has to prove they can get a distance toward 2,000 towards the s&p. >> often times it's going to be technology, financials and health care to a certain degree. the three biggest sectors, if you're seeing that kind of participation in today's trade, that gives you at least a little bit of hope and support for the bullish case of things. again, as we talk about the possibility of slowing growth around the world, possibility of that sort of thing happening, that's going to be the real issue. >> we have the g-20 starting soon in shanghai. thanks very much. ringing the bell today, capital

markets and ronald mcdonald house. at nasdaq, it's the workhorse group. "closing bell" starts now. kelly. [ bell ringing ] [ applause ] >> thank you, mike. welcome to "the closing bell." i'm kelly evans, a surprising rally later in the session on wall street. here's how we're finishing. today 1.3%, well outpacing the over averages, s&p 500 adding almost 22 points and looks like it's closing at 1951. people are waufing the 1950 level for the index. nasdaq was lagging a little but up nine tenths of a percent. 4582. this comes despite a rough

session overnight in shanghai. we have our reporters standing by. courtney reagan is covering for us and seema watching for weight watchers and susan lee for craft times. we'll flush out the picture how this economy is going. we'll get those to you as soon as they cross. on today's potential, michael santoli is here and tim seymour. welcome. mike, surprisingly strong rally. you look at the chart and it was a straight line up today. >> the question yesterday, was that a head fake, that little reversal we had midday yesterday and maybe to a fault it was quiet but more rumors about potentially an opec meeting in march. and we did get through that material and people will feel significant we closed above

1950. >> do you think it's significant, tim? >> i don't think you can get that worked up over anything and the fact that the fed has been all over the tape in the last couple of days saying everything, both directions and we have a lot of data coming up. next week we have payroll numbers which could keep the fed on track. people forgot about the volatility induced by everything they could still be doing. the good news is the economy feels better and people want to latch on to that with the absence of the fed. the minute we get that, volatility comes back. we're range bound. people that want to believe we're going significantly higher or lower need to understand there's so much uncertainty and right now until the data deteriorates, this market is probably side ways. >> elon, what contacts would you add? >> you had president bullard on cnbc and i spoke to him last year. he was looking for stabilization in both oil prices and strength in the dollar. we didn't see that in the beginning of the year so that raised the question whether or

not rate hikes would be on deck for march going forward. now we're seeing a little bit of return of oil prices and little rally there. you start to wonder, maybe march may be off the table, but what about the rest of the year. the question becomes, what is the bar for next rate hike, is it higher than the first? >> he walked back this whole discussion that people had been obsessed with about how many rate hikes this year. take a listen to what james bullard said this morning on squawk box. >> one of the things i want to do get away from trying to predict how many increases there's going to be in a year. we want to be data dependent and we want to better coordinate with markets on the idea that we will move but we'll move on good news about the u.s. economy. >> tim seymour, what could you think the essence is of what he was trying to say? >> they are not going to tell the market what they can do because they don't know what they are going to do. the volatility globally, if that was inform to keep them off the board, it's more than enough to

keep them off the board now. credit conditions are tighter and data has been increasingly worse including the services side but they talked about the transitory nature and if we're stabilizing, is that enough of the end of the transitory nature, to see them say, okay, that's taken off the table? i think people expecting the fed to be a nonfactor in the next three months, missing a major -- >> do you mean they could be a factor in raising rates again or really backing off or does it depend? >> we're not going to know. they are not ever going to tell us they are backing off. if we see a payroll number in wage gains that has to be important here, start to show a little frofyness, which i don't think they are going to. but this is something that they want the freedom to be data independent. i think they put themselves out there, i think you need to do

more of that. that's probably more consistent with where the fed is. >> the fed is going to find it's really hard to move from an environment where they are explicitly promising they weren't going to make sudden rate hikes to an environment where they won't see as much. what president bullard was getting at, this issue of where exactly are the fed forecasts going to fall. should they be telling in markets, we expect interest rates to be about a percentage point higher than at the end of the previous year? i don't know the fed is going to get rid -- they are talking about making it more complicated. janet yellen led the subcommittee in 2011 that developed it. i find it hard to believe she would get rid of them but certainly there's wide acknowledgement that they need to be updated. >> so everybody knows, that refers to the feds when released their statement, do include projections where interest rates and unemployment rates are going

and those represented not identified with each member but representing each member with a little dot. it's also interesting, how can they be less transparent if it's more honest when there's renewed momentum to be honest? >> it's difficult to go in the other direction and obscure -- what really have to be components of the fed's thinking at all times, whether you write them down and disclose them or not, everyone has an expectation and the market has no trouble ignoring them. this is what we've seen for years, no know if there's really an issue of fed giving too much information to spoon feed the market. >> i want to briefly hit on something before we get the earnings. tim, i'm toss this for you first. williams deal, a big deal in the pipe line space. energy approached williams and came back at them with a lower offer. if this doesn't deal happen and it might fall apart earlier, what real implications is that

going to have for the entire energy complex? >> i would be reluctant to make a total read. it's nice to see that it can be happening here frmgt there are strong players and people building for next two to five years. the next three to six months still look heavy, i think the activity in the space will continue. what opec said this week is they want to crush the expensive and nonefficient producers out there. it means there's going to be a lot of assets up for grabs. that will be part of this -- i think they seem to at least bleed into credit and banks and notice how that pulled back dramatically. >> one of the issues too, when energy partners, this environment is becoming a dear ass asset. >> why you haven't seen more plo active consolidation. the penalty for being early and basing your price and terms of your deal on one given price of

the commodity, can be very pricey. by all accounts it has to pick up. >> to the oil market too, the trading in the last couple of sessions, real turnarounds and today a rally really pegged on a price of crude oil. i'm not sure on what exactly. >> there was a report just before 1:00 p.m. and this is coming out of venezuela, oil minister saying we're probably going to meet in march. it's interesting because i don't think it's that important to pars the legitimacy except the twitchiness to speak, that tells you something, twice in two weeks. >> i don't understand why when the saudi oil min ter is coming out and reiterating to everybody that opec is not going to act as they think it's going to act and every new rumor appears to be taken as though it has deeper

meaning behind it. is that how you would factor into here the way oil moved over the last couple of sessions. >> sentiment was overly bearish. i still think this was a supply issue not a demand issue. we heard that from the iea this week. if you're someone leaning on the short side of the market, you have to be scared that people are blinking out there. there's no question nonopec producers which includes russia have an interest in having dialogue that they were never going to have before. it means that again first step to changing volatility in the oil price, they said they do want to get rid of is finding a freeze in production. that's the first step and that's enough if i'm short, i would get out of the way. >> we're starting to see some consumer companies saying they are benefitting a little bit finally from this and is there does seem to be a little shift. not at the high end and maybe the stock market sell-off as

restoration hardware claimed but make benefits to the consumers. >> we've been waiting for this pent up demand to drive spending for a long time. and it's still not a shining star. so with the personal savings rate of 5.5% is the latest meeting, consumer has room to spend and has room to sort of drive the economic growth. whether or not they actually do it remains to be seen. >> we'll see again once we get these retail earnings through here how that's playing through. before we let you go, couple of favorite ways to play the market? >> some of the industrials continue to be very interesting. if you want to have total positions in companies showing they have good balance sheets and starting to see stablization in trends, i don't think it's crazy to own some of john deere, for example. the transports are cases where some companies look interesting and freight volume started to stabilize and look better. and the expensive food stocks we're about to hear from will continue to be defensive because these are high div payers and

have good balance sheets generating high free cash flow yields and make them stay at least on the bid. >> apparently there's no stopping domino's pizza. >> it's the expensive stocks of food companies not the companies that make expensive food, yes. >> pizza comes pretty cheap these days. >> thanks for joining us. catch more of tim with fast money crew. >> apple responding to the fbi in past hour ahead of tomorrow's deadline. we'll get the latest as the company continues to fight the government request to unlock an iphone belonging to one of the san bernardino shooters and john levin is here to explain why he says fair disclosure rules are adding to market volatility. why companies should be able to talk more. you're watching cnbc, first in business worldwide. vo: know you have a dedicated advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing.

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apple filing two orders. john lipton has the latest. >> apple executives today holding a call with members of the media just explaining their position here and the bottom line is apple says it has gone above and beyond. what is required by law to

support the government in this investigation. but the line has been drawn here. apple will not write software, allowing the fbi to hack its way into this iphone. apple argues that one, the government is trying to force apple to assist the fbi under the authority of the so-called all rits act, a centuries old law used to compel companies to assist the government. apple counters that this act does not support such sweeping use of judicial power two, it violates apple's first amendment rights, writing software is protected speech. and the government's demand violates apple's fifth amendment rights in that it would force apple to develop software that undermines the security of its very own products. if anything apple says that the question of whether companies should really be forced to create back doors to their own operating systems is it a political question, not a legal one. back to you. >> josh, thank you very much.

we've been following this all day. apple filed this motion ahead of tomorrow's deadline. we're getting word that tech companies will come and support them but big gates himself was one of the people who took the opposite side. >> showing that's it's obviously gray area. there's conflicting concerns right here. i do think it's quite interesting that apple want to present -- clearly wants to make a public case and speak to the general conversation. this isn't really as much of a legalistic argument to win this one case and it's kind of fascinating how we have to bring these broad principles and constitutional permissions and things like that and restrictions into play. >> and people will be argue over different amendments, the right to search and seizure versus what apple claims is being coerced into speech. >> is this a question for the courts or really a question for congress? that's clearly where apple is heading trying to get some sort of congressional action around -- congressional answer around whether or not companies should be forced to create back

doors or not. the fbi seems to be wanting to pressure congress to do this as well. why did the fbi go about this in public court documents versus through some sort of sealed producer, making all of this public? that's an open question. are they trying to influence lawmakers as well. will apple find a more maybe amenable audience amongst members of congress than it is in the courts. >> we heard from one of those members last hour, but he actually seemed to -- just say realistically he doesn't think this action will come out of congress. we'll see, i guess. >> right, clearly we've heard this idea from apple's executives today that it should be fought out in congress if anything. this is a concern we had should be up to legislators and lawmakers and how important the court of public opinion has. this quickly turned to the public very quickly in terms of how it was being framed and interesting how maybe the tide is shifting.

the most recent poll from roiters that 46% of those polled favored apple's position. interesting how the tide might be shifting and why it's so important for both sides to make their case in public. >> also, there's kind of a general and specific issues here. generally speaking, all of us want an iphone that nobody can access and hack, that's private. and can be trusted. but obviously if you or your wife was victim of a horrible crime and there was information on a phone that is the company said we can't access, how would you feel? >> you have to do the thought experiment? what if the person who did this crime, the specific perpetrator were at large? if it was still a manhunt would there be differences in the way the debate has taken? >> we remember the manhunt that went on for a couple of hours and felt an eternity. >> i mean, how many times might you forget what your pass word is or how many times if you pass away your spouse needs to access your phone. there might be memories on there

and family photos, et cetera. how can that person get into your phone? you don't have to go as far as a terrorist manhunt in order to find a scenario to be able to access content on the the phones. thanks for joining us, we'll follow the latest on this story. gap earnings are out. let's get out to courtney with the results. >> gap putting out its fourth quarter earnings results. coming inline at 57 cents per shape. when we look at the revenues, a bit light, 4.39 billion. wall street was looking for something like $4.46 billion. same store sales down 7% for the quarter but remember we know those numbers on a month by month basis. i think the big one here is the full year guidance for 2016. gap giving a range of 220 to 225. wall street looking for 242. that is sharply below what analysts were looking for for the full year. this does mark the first year that art peck has been the ceo.

he has now that one year of transition is behind them he believes the company has.in place the right long-term strategies for growth. a lot of investors are likely concerned about these numbers. >> thank you. ny decembisclosure as to old na relative to gap and banana republic and one of our analysts said maybe they should call it old navy because there was more strength. >> old navy continues to be perhaps the strongest of the three brands but has begun to show signs of weakness. larson is no longer leading the brand and he had been very instrumental in turning around that company. both from a product perspective and process perspective. he had come from h and m. he really sort of turned old navy into more of a fast fashion retailer. the other gap brands have used some of those lerngz and done the same thing or working to get there for both gap and banana

republic, but they still continue to struggle and old navy is starting to slip. >> those shares are down almost 5%. thank you. >> what do you think about gap? >> they have been in this fix for a long time. nearly 4,000 stores globally which turns into a liability as opposed to asset. huge pressure on prices, you can sell the same number of stuff and not move the top line. they've been returning cash by way of buybacks and dividends, you have this owner in there of the founding family, there's always been a sense that they have options but we'll see if the fundamentals can keep it going. >> i feel deja vu listening to this, writing the same exact story and narrative has been happening for a very long time. i do wonder that the enduring strength of old navy, does that say something about the consumer and how they want to buy these days? >> that's the huge question.

we'll get more detail maybe on the call as well with some of these other company results coming in. one of them is kraft heinz. >> beating on both the top and bottom line. when you look at it from adjusted x itemses, 62 cents, above 58 cents and revenues topping estimates, 7.12 billion during the three months, above the 7 billion estimates of the market. kraft heinz, the merger taking place in july of last year. warren buffett the largest shareholder, 27% in the company. the kraft heinz has been going through changes, announcing cutting of 10% of its workforce in november as well. this is something to watch for and we'll be hearing this on the conversation call. we have currency heads and dwindling volumes and maybe we'll get clarity on how they

intend to improve going forward. >> the defensive food sect we were talking about. >> 3% dividend yield, not cheap but stef steady xbl and bottom and top line beat in this environment. weight watchers stock moving sharply to the downside. seema? >> weight watchers reporting a loss of 3 cents for the quarter which is below expectation. the analyst estimate was for 2 cents a share. revenues slightly beating expectations at $259 million. sees its full year earnings in the range of 70 cents to a dollar. honest partnership with oprah winfrey who did take a 10% stake in weight watchers in october of 2015, the company saying the partnership with oprah winfrey is off to a strong start. our transformation momentum is building with positive recruitments this winter season setting a solid foundation for revenue growth and increased profitability. kelly, the question will be on

the conference call as to how oprah winfrey's involvement is helping the company's overall strategy and is it translating into future sales? that's something we'll be watching when the conference call starts. for now looking at shares down 10.6% after hours. i should point out, the stock has nearly doubled since oprah got involved in this company. >> a good point. she was there in the $6 range, now trading under $14. the shares were down nationally 20% in and out down 10 and 11. >> it's been a very jumpy stock. old timers can remember when weight watcher was owned by heinz. it's well off the post oprah high, they are not sure what to make, her marketing power? >> she might be part of this company for a long time so it could take a while. >> just as a consumer, i question their focus on beyond

the scale and not focusing on so much on calorie counting as they did. wasn't that whole value proposition helping you count callies in more convenient ways. what is the message and how are they going to compete with the other fitness applications out there? >> exactly, if you want to walk 10,000 steps, there's aa different application for that. >> john levin will explain why fair disclosure regulations are creating a game of blinds man's bluff. jack dorsey for suspended accounts linked to terrorism, is that an admission that isis is losing the social media battle? that's later on "closing bell."

our next guest taking on fair disclosure rules, ceo of levin capital strategies and here at post nine to explain. you think companies should be able to talk more. why? >> it's a complicated subject and i recognize not the merit by why the other side is saying what they are saying. let me take the background. when arthur leave input this in, that big mutual funds were getting preference. the idea was to make it fair for

everybody in the public. but that concept is completely wrong. the public cannot make investment decisions in my opinion in competition with professional analysts. >> let's sus the example of armstrong world tile. we're talking a tile company, right? what happened in that case? >> in any case, if you wanted to talk to them, the stock was down very sharply but they wouldn't talk until the earnings are reported. >> that is meant to be fair. even if you had a sense of what the basic business trends were, didn't have to have quantity fiction, it falls in two categories, one, there are a lot of questions to somebody wants to know that effect a year or two off have nothing to do with earnings. you might want to ask any company, there's a new competitor coming in. what will be the impact of a new competitor. it's a one or two year. ibm has currently. you want to find out, ibm had short run but won't talk to you. what is the one year impact when

the currency hedges run off. they make a decision that coal plants are going to be on for a while. none of the companies will talk about the range of things that are one, two, three years offer. >> we should mention, we as a show would love this if they talk about the issues and not fall into quiet. >> it's excluded because of the first amendment so they can always talk to us. >> that's a great point. >> that's a great point. i'm actually a member of the bar, loved it. i think it's a bridgement of free speech, the whole thing. >> every company though faces this decision, is anything going on that's material to our business that we have to disclose based on what the market is saying? they have the freedom if they wanted to to pronounce the quarter and say something big is going on. >> that's the other side of the coin. the question is they have used this and expanded it, not to say anything about things that have nothing to do with this quarter.

so the first change i would make would be to say that questions that relate not to this quarter are fair gain. then the question of this quarter is, can you give squall take tif sense and are business conditions generally the same? >> does that require any action on the part of the sec or is that just changing company practice? >> that is 100% correct. it's not in -- it's not in the regulars, it's in the interpretation. but i think larry and warren buffett, big forces trying to have no earnings forecast and less disclosure and what i think is there's got to be some industry group that rebalances it is all i'm saying, your point is correct, it's not codified, it's not reg, it's practice. >> john, thank you for joining us, it's a great case and i hope it brings more aware income.

john levin. >> thanks. >> breaking news in microsoft. what's happening? >> more news regarding the apple case, microsoft now confirming to cnbc that it intends to file a brief in support of apple. brad smith, microsoft's chief legal counsel saying they'll support apple and be filing a brief to support the position in the court case next week and goes on to say they don't believe the courts should seek to resolve issues of 21st century technology with law that was written in the era of the adding machine. this is again brad smith, he says we need 21st century laws that address 21st century technology issues and need them to be written by congress. he says he degrees wholeheartedly with apple that the right place to bring this discussion is to the house of representatives and senate so that the people who are elected by the people can make these decisions, of course, we already saw some other tech ceos come

out and support of apple. you heard mark zuckerberg and twitter's jack dorsey and you can add mike crow soft to the list. >> what -- josh, thank you. not all together surprising but as silicon valley lines up behind apple, i wonder how this changes the case? >> you wouldn't think it necessarily changes it but it does broaden it out. it's not just about this case, this phone, this particular technology. it's about the principle. >> and there has been some mur muring, that some lawmakers might be -- and also heard top senate democrats and republicans say that they would be open to some type of legislation. there is movement and desire to maybe take on this issue, of course as always with congress, devil is in the details. >> why see if that's one way to adrets the entire issue. increasing margin pressures, not

energy loan exposure, up next the bank ceo tells us how low margins will impact his company going forward. >> htc best known for phones now getting into the virtual reality business. i'll test out the device you're looking at there. later on "the closing bell." man 1: [ gasps ]

man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems.

welcome back, you migtd have been surprised by the close. the dow with a gain of 212 points and s&p closing at 1951. a lot of people watching the 1950 level there. oil was higher again today. not surprising it was higher it was just that stocks were higher, you know what i'm saying, td bank, slightly missed street expectations and did announce a 8% raise in the quarterly dividend. let's bring in the ceo. good to see you again, sir, it's interesting to see the results come in and everybody so focused on your exposures to oil but you're saying it's low interest rates that are hurting here. >> it certainly is. good to see you again, kelly. oil is obviously a big headwind but for my bank, it's less than

1% of our outstanding loans and hence a very manageable exposure for us. without a doubt causing some issues some in of the markets in which we operate. very pleased with the result s, up 6%, i was particularly pleased with how our u.s. business did. we had record earnings in the u.s. >> the question of course not just for your bank but for all of them not just about direct loans to energy borrowers but the broader impact of weakness in the energy related economy or regions. is that something you could see becoming a larger problem you now reserved for? >> actually, we've been watching that for a few quarters now. and for us, again, given our size, our exposure to those particular economies is relatively small. so again, that's manageable but there's something that we're watching and i feel pretty good about how we reserve overall for our exposures in those regions.

>> what about when we talk about low interest rates and even though the federal reserve raised the short term interest rate, the 10-year is 1.7% today. canada too, there are some analysts speculating about negative interest rates going forward. what kind of impact would that have, would kind of headwind would that be to your operations? >> without a doubt, such low rates and if they go even lower, they are not friendly to banksz. everybody has been telling you that. we try and manage through that environment. we've had lower rates for how many years in the u.s. and folks were thinking these banks cannot actually generate profits and all of us have done relatively well. we've done pretty well through that phase. we will figure out a way. we use very sophisticated strategies and i think the u.s. actually, the underlying strength in the economy is the confidence that we probably see more momentum out of the u.s. and that's what our numbers are

showing me. i'm not as pessimistic as some might be out there. >> just one more question as well about your deposit base. it seems like banks these days are almost eager to shed deposits that are too capital intensive and costlier than they used to be. is that true for you guys or if you're continuing to hoover them up, how do you make the economics of that work? >> for us, our deposit business, we're not in the whole sale deposit taking business. we're a retail bank. especially in the united states and for us departments come through checking accounts and money market accounts and these are very attractive deposits, we welcome people to bring their deposits to td bank america's most convenient bank. it's a very good business for us and frankly that is the relationship our customers have with our banks. i'm not as fussed about letting deposits go. that's a core strength of the bank and it will continue to be. >> thank you for joining us

again. >> thanks very much, thanks for having me, kelly. >> appreciate it. >> bye. >> meanwhile, the islamic state taking aim at two of the biggest names in social media. mark zuckerberg and jack dorsey. hkc enters the gaming world. will the eye popping sticker price give a headache with sales? that's later on "the closing bell."

facebook and twitter have

been amping up efforts to remove terrorist groups from social media. >> a bit of a scary moment for mark zuckerberg and twitter's jack dorsey because a new video from an isis link group serviced on the dark web threatening them in the effort to root out ice is related accounts on their services. here's the exact wording of the threat. it says you are not in our league. if you close one account, we will take ten in return. and soon your names will be erased after we delete you sighs allah willing. the site is called sons of the caliphate. with bullet holes over their faces, this is scary stuff if you're a corporate security officers. they see a lot of threat on the internet so they'll have to process this along with the other threats they see and

figure out how seriously they decide to take this. >> stick around. it's a tough one. i guess this kind of thing has been coming out of the group for a couple of years now and if you're one of these -- they've even -- gone so far as to target all employees working at these companies and nevertheless what do you make of it? >> you have to just obviously assess the reality not just of the personalities but are they trying to actually attack the apps themselves or sites themselves and take them down and start from there. otherwise, i'm not sure what you do besides travel advisories. >> the "washington post" did an amazing investigation into sort of the nature of islamic state propaganda. and really the audience for this is not necessarily to actually sort of inspire lone wolf attacks but really to show a force of strength and show the world, global audience and people watching right now, that they are strong and they are powerful. the people who make these propaganda videos are some of

the most elite people within the caliphate themselves. it really is a question of who are they trying to reach. it may not be as direct as it seems. >> maybe this is a sign of weakness to some extent showing tactics by social media sites to constrict the behavior have been effective. >> this is taken seriously here in washington. let me give you one behind the scenes example. i want to proceed fairly carefully. yesterday we were covering this meeting of anti-isis messaging at the department of justice here in d.c. and a lot of big companies were at the meeting. i obtained a complete list of all who attended but asked by u.s. government person not to print that list or publicize it because of concerns for the foreign workforces of a lot of these companies, if it was known they were cooperating with the u.s. government against isis and that anti-ace sis messaging event yesterday. for now since there's other

journalistic iimperative, i'm nt going to provide the full list that attended for these very security reasons we're talking about. >> hair raising stuff. thank you so much. >> yep. >> let's sends it over to seema for a earnings report. >> let's look at monster beverage, shares down 7% after revenue and earnings missed expectations, authorizing a share repurchase program of up to $1.75 billion but again looking at the stock down better than 7%. a very different story for the big data company reporting earnings and revenue that beat the estimate. licensing and services revenue topped expectations what analysts were looking for. you're looking for shares of splunk higher. >> plenty of earnings, up 12%. virtual reality is one of the hottest things out there. up next, we'll give you an up close look at htc's new offering

and you might see me try to give a live demonstration. messaging turn down the government's request for a back door into its encryption for years ago, explaining her decision and why she's backing apple in the fight against the fbi. e trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on 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 derivatives pricing model, honey? td ameritrade.

welcome back. mccory research today putting on a conference in new york featuring the biggest names in the virtual reality industry. one of the companies in attendance was htc, highlighting the new headset which will be available to the public starting in april. we're joined by dan o'brien, who is vice president of virtual reality. you brought along a full demo of the product. we're going to try to do it here in a moment. first, tell us about this headset. how much does it cost and when is it available? >> on monday, we start the preorder. it's a complete system. we're giving the consumers to actually get up and move around in their vr space. >> is there an htc phone in here? >> no, this is connected to a computer. and through a tether. it's actually -- >> do i have to have an htc mobile phone to make this work? >> no, this is working through

steam, and with our partnership with val, and steam vr. >> i have to buy one of your headsets, plug it into my computer. and what am i doing, playing games? >> a lot of games, experiences, being able to go to other places, underwater. you're also going to be able to go and -- there's lots of games. lots of different experiences. but then there's a lot of enterprise applications for it as well. >> can i try it out? >> sure, absolutely. i'll take your paperwork. you want to put your face in first. pull the strap over behind you. >> whoa! >> there you go. >> oh, i'm on a ship. okay. okay. this is cool. i've never worn a virtual reality headset before. >> you can take a few steps forward if you like. we have controllers that we can put in your hand. >> when i look down, i feel like i'm falling over. >> do you see your controller if you look down?

there you go. >> i only see a fish. he's right there. right there. there's one. and there's one. what does this controller do? >> put one in your hand. there you go. i'm sorry, i'm just going to power those on for you. >> thank you. >> this is so interesting. >> you should be able to see a controller. >> yes, vaguely. sort of shadowy. >> you can swipe at the fish and move them out of your way. >> do i press the buttons? >> no, you can passively interact with the environment. you can walk. as you get -- stop right there. >> there's a net. is that the end of the -- >> that's called our chaperone system. we actually keep you safe. >> you knew there was an obstacle there? >> no, we actually set the room parameters so you wouldn't bump into anything. >> that's interesting. i don't know if everybody watching can see what i see -- oh, there's some words. i think it's over. those every the credits rolling right now as well. i'll hand this back to you. >> thank you. >> so interesting.

>> yeah. >> and so the whole point is just to immerse me in that environment where i'm on the ship and walking around. >> yes. we can take you to any place, anywhere. >> it does make you feel when you step back into reality, oh, everything here is slow and static, doesn't it. >> yes, it feels a little disappointing in the real world, doesn't it. >> version one, two, three? >> we're getting to the final version. this is our version four really. we actually started developing this with val back in 2013, 2014. we came out with the developer edition earlier this past year. and we're coming out with the commercial version in a month and a half. >> i'm still getting my bearings. it's going to be a brave new world, isn't it. >> that's right. >> thank you for joining us. >> thank you for having us. coming up after this, we're talking pizza. talking to jim cramer on "mad money" this evening. we'll bring you a little snippet or preview of what he had to say on "closing bell."

we've got the food right. we've got the service right. the technology is driving things. our advertising is terrific. with all this volume coming in, our store managers, our franchisees, are handling it

very well. the execution is excellent. you know, it's a lot of different things that have been going right. there was no specific thing that drove it. it just -- it's this momentum that's been building for a long time. >> that is domino's ceo talking to jim cramer moments ago about the company's strong earnings. catch the entire interview coming up at 6:00 p.m. eastern. i wonder if you can still tweet for a pizza. >> i think so. i think they're trying to follow starbucks saying we're not just a pizza company, we're a technology company. we're probably at an all-time high in calorie per dollar. you get fat cheap. i think domino's, because they can be the value player in that, has this advantage. >> it's convenience, too. >> 50% or so of the company sales actually come through mobile ordering. they're making huge inroads with millennials. there's a pizza emoji. that says a lot right there. >> it's popular when i was in

college. i'm reassured it's still popular now. the virtual reality technology, what's interesting is that it's a little bit disorienting. you get used to it, and then you take the headset off and then the real world seems disorienting. >> the matrix, right? >> everybody says virtual reality is the thing this year. i care about it everywhere. >> that's the question, right? what sense is it going to be everywhere? everyone's going to be walking around with a headset? it seems like a transitional technology it seems. not buying any $800 piece of machinery. >> definitely a couple of years before we see the full effects. when the phone comes to wearing it on your face, i get it. >> how much more sedentary can we get. not go anywhere. >> you could be on the treadmill and think you're running through the redwood forest. what are you watching here in this market? >> if you didn't get enough fed speak this week, there's going

to be more tomorrow. two fed governors, fed president john williams will be speaking. and a panel on international monetary policy coordination. >> you made it sound very compelling. if you have some data. >> maybe we'll get profit numbers, too. guys, thank you so much. that does it for "closing bell." "fast money" begins right now. thanks, kelly. "fast money" does start right now. overlooking new york city's times square. i'm melissa. tonight on fast, apple, the stakes growing by the minute in the battle with the government. plus, fed president fuller said the economy is far from a recession. the surge in the dollar they say the fed is missing a key point. it could spell trouble for stocks. we'll explain. later, one major media company may be in the throes of a death spiral. it could send shock waves