stock is up 4%. >> it could get to 20. no thanks. >> i haven't liked it. i don't like it. steph? >> not right here. certainly it could trade higher if they deliver a little bit better. >> anything. >> you're right. but no. >> thanks to you. power starts now. don't go anywhere, especially the "fast money" fans. we have a big news alert on comerica. the company wrapped up the annual meeting. the ceo said he's willing to sell the company. the stock is higher by 3%. this is something analysts have been calling for. mike mayo got out of the meeting and joins us on the news line. you call this a turning point for cma. why? >> i would say this is one of the most noteworthy annual meetings i have ever been to. this is a turning point.

management is finally listening. we published a report three years ago saying what if interest rates don't rise? well, interest rates didn't rise. they are in a tougher position than they were then. today is the day comerica moves from plan a to plan b. they said they have a sense of urgency to restructure. all options are on the table. they would consider strategic alternatives at least seven times during the annual meeting. >> so the number of times they said that convinces you? they have already said that everything is on the table. >> well, you had not only the ceo saying that but the director was also stressing that. they also said once they review what the consultant is completed they will especially look at the potential for strategic alternatives. let me remind you what we have said here. we said comerica either, one, needs better returns.

two, they need to restructure. three, they need to sell the region. four, sell the bank. or five, change management. the stock is too low. the stock price as far as 1997. it's time to go to plan b. that message came across loud and clear by comerica management. >> which of the alternatives you laid out do you think the lik y likeliest eventualiveevent ti. >> it's been eight consecutive years of cost below capital. they have destroyed value for each of the last eight years. it was disappointing in the meeting when they said the new plan when it is announced in the second half of the year should get close to achieving the cost of capital. close isn't good enough after eight years of value destruction. it was disappointing when they said we realize now is the time

to get a consultant and evaluate alternatives. what about the last eight years with poor returns. the jury is out on the ability to have management to achieve on its own. we'll see what the results are from the review when they announce it in july. >> hey, mike. changes in long term slow propositions, selling assets may work in the short term. the only thing to give quick relief is selling but comerica isn't a small company. are there any buyers out there for the company? >> we think consolidation is picking up in the banking industry. remember, the revenues in the u.s. banking industry are at the worst growth rate this decade in 80 years. if you are not getting the results in the top line, the only way to get results on the bottom line is to become more efficient. one way to become more efficient is to use bank mergers to do that. >> we talked about power lunch team about banks wanting to get

smaller and break themselves up. why would they take on comerica which is a multi billion dollar company? >> you have some potential for in buyers. mufg owns union bank in california. a japanese research team said they would like to get larger in the united states. there are potential u.s. buyers. u.s. band corps said they would like to eventually look at acquisitions again. bb & t has been on an acquisition spree. there are a lot of buyers. on the other hand, we are not saying to sell the bank or don't sell the bank, we are saying create value for shareholders. if they are still off california, they are no longer, that could be an option. i want to make it clear what we are doing at the annual meetings. this is the fourth year we have gone to these. we want to ensure the directors are agents for the shareholders,

that the corrector krek directo taking the job seriously. the director at comerica seems to have woken up or woken up the management team to say, hey, we need to do something. that's meaningful about today at the annual meeting. >> mike, we appreciate the options you have laid out. at the same time, what in your view, which option yields the most return for shareholders and are you in talks with the other large major shareholders like hudson executive capital, invesco, et cetera, about that goal because it could be more effective? >> i do my research. i publish it. sometimes people agree. sometimes people disagree. what we are trying to do with the research is send a message not only to management to generate returns above the cost of capital however you can get it done and hold the boards of directors more accountable for the performance they oversee.

>> mike, thanks for phoning in. appreciate it. mike mayo of clsa. >> let's go to a news alert in the bond market. five-year notes up fwbefore the fed announces its position. rick santelli has the story. >> the demand, i gave it a c minus, same as yesterday's two-year notes. $26 billion. what was the yield? 1.41 for the fives and if you look at the issue market it was 141. trading 140 and a half on the bid side as the option buttoned up. you can say it's tailed a smidge. 2.41 bid to cover close to the ten auction average. 63.4 is really the only good news here. 6.8 on direct. light, 7%. ten option average. 29.8% go to primary dealers. back to back c minus. it's a tall order to deal with

short term securities on the day of the fed meeting though it is the birthday. tomorrow, no seven year. we'll have the statement and tomorrow we'll have the 28 billion sevens. back to you. >> thank you very much. outside of that it is a huge day for corporate earnings. companies reporting from virtually every sector of the economy. bob pisani to get us up to date on the earnings score card. >> the big picture is things are improving. on the full screen the earnings commentary is better. last quarter everyone said cautious about the future. now they are saying stable or improving. ge and honeywell and 3m had positive commentary among the industrials. the debate is if q1 will be the low water mark for earnings. 100% decline in energy earnings. is this the bottom? will things improve? the hope among the bulls is the second quarter, the earnings recession. four consecutive quarters of negative herbings growth -- e n

earnings growth might end. everyone is trying to figure out how the second quarter will look. >> i hate weather. every quarter there is a weather issue. first quarter we didn't have one. one of the few first quarters where you couldn't blame it on that. but you have a wild swing in the u.s. dollar. and a huge drop and rebound in the price of oil. how much do we sort of kind of discount the first quarter? >> we don't discount it. the good news is we still had the strong dollar the first half and the weaker dollar in the second half. some companies noted the dollar fluctuating as a major problem. oil, well, the play now is oil bottomed to 26 in mid february. that's generally a positive for the markets here. now the big issue is can we get real revenue growth? flat is the new up now. right now we are down 1% for second quarter revenues.

if we can stabilize now, just stop going down. flatten out. start moving up in the second half. here's the problem. s&p 500 is reflecting the good ideas. the better numbers we expect in the second half. ge, 20 times forward earnings. something like honeywell, almost 20 times forward earnings. the prices have moved up in anticipation we'll see better commentary. >> and you have a huge pop in earnings from energy in the second quarter because of the doubling from oil, 26 to 42. get used to it. bob pisani, thank you very much. let's drill down deeper on two companies reporting earnings today. lockheed martin and coach. lockheed martin with a 15% jump in quarterly sales raising forecasts for the years. coach with its first quarterly profit in three years. big headlines coming out of both calls. courtney reagan has coach. let's start with jane defense

wells covering lockheed. >> lockheed shares hit an all time high as senator john mccain blasts the f-35 program. earnings and sales in the first quarter were so good the company raised expectations for the year. sales for q1 beat estimates. earnings were shy but included a charge for layoffs. the company gets leaner. the ceo said the $9 billion acquisition of sikorsky is paying off. she wants to expand markets and customers. >> some emerging interests from other customers beyond the oil and gas sector for s-92 platforms and we are pushing aggressively into the search and rescue, vip transportation, and international military segments. >> vip transportation. as for the f-35 the company is on track to deliver 53. but the government accountability office today released a report saying the cost per plane is coming down but it still faces cost

challenges and john mccain calls the program, quote, a scandal and a tragedy. ceo houston said lower oil prices could delay middle east military program purchases but not stop them. melissa? >> thank you very much, jane wells. now let's talk coach with courtney "coach" reagan. what's the key take away? >> pretty decent quarter as coach continues through the transformation. the street is pleased with the momentum of the north american comps. they were flat for the quarter but that's better than was forecast. coach reiterates expectations for positive comps in the current quarter and the prior constant currency revenue projections. all positives there. mainly in china, coach sales, double digit positive. weaker in hong kong and macao. sales grew 7% in japan on a constant basis. the average price per item sold

hit $300 for the first time since 2009 and the handbag market growth reaccelerated to positive low single digits in the quarter up from flat in the prior quarter. coach turned in lower than expected and cutting 300 corporate jobs. that's something that's often hard to hear from main street. wall street likes that it cuts expen expenses. >> what's interesting is the comments about the handbag market reaccelerating in north america. not a ton, but better than flat. could be good. >> courtney reagan. coming up, investing advice from the inventor of the index fund. jack vogel joins us on power lunch. this is cnbc, first in business worldwide.

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quarter past the hour. perfect time for money advice from a market legend. here for an exclusive is jack vogel of the vanguard group. couple of months ago when you were on you said at the depth of the market trough this is not the time to sell. really not the time to do anything. you have been proved right. are you going to gloat a little? i know you won't. >> i don't dare gloat about short-term things like that.

that's the best advice. don't panic in times of market uncertainty or bear markets. >> i hear a lot of financial advisers this year, maybe last year. but especially this year saying this is a stock picker's market. you can't just go with the index on the kind of market we face this year. would you like to answer them? >> the answer is no, no, no. there is no such thing a stock picker's market. we talked about it before. i'm a good stock picker. you're a bad stock picker. we come out equally and the average is average. the total market is the total market. i don't know. it's a funny term. it's meaningless. >> when it comes to the indices you said when things are

volatile it's not wise to do anything with markets. a couple points away from all time highs. with the current pe, almost at 19. what do you do? the difference is a simple one. i use actual reported earnings, gap earnings that have been achieved already. that gives you a 22. if you go to forward earnings and the forward operating earnings, leaving out the bad things that happened to the company and look at what operations were. you get down to 18 or 19 perhaps. the market is not cheap. the dividend yields are low, right around 2%. they have been that way for a while. if you are in the market for a

long. term you have to accept the market return. whatever it may be. i look for returns that won't be nearly as good as the 12% earned per year in the last 70. >> you patiently explained to me years ago that the constituents of total return are basically driven by earnings. company earnings, the dividend paid and a speculative premium. what will an investor pay for each dollar of earnings. you seem to be saying the pe is at a high range. you say dividends will be flat and low. you say returns won't be that good. that leaves earnings here. what are you expecting from earnings and what do you expect in terms of returns over the next that five years. >> i don't do five. but i will do ten. >> sure.

>> hopefully i will be around to discuss it ten years from now. the dividend yield is around 2%. i think we'll do well in the next decade to get a 6% earnings growth on the s&p 500. that's 8% investment return, i call it. with the p.e. at 22, i can see it going down to, say, 18. something like that. that will take the investment return by 3 points. that's better than nothing. no reason to get out of the market. >> are bonds a better buy? >> well, bonds are just as bad as stocks in terms of valuation. i use the word bad. not that carefully. bond yields are rarely worse on a nominal basis. that ten-year treasury last time i looked is around 1.8%. the long-term yield average on

the ten-year treasury is probably around four. so that's an interesting point. that four was achieved during a time of 3% inflation. the real return on four was one. today the inflation rate looks like about 1%. for a while anyway. so that 1.8 comes down to approximately one. not much difference if you look at real returns after taking into account inflation as compared to nominal returns. that's really not a great bullish statement. it is a statement of perspective as to what you can expect to do. we investors are funny people. we'd rather have a 5% return and 8% inflation than a 2% return with no inflation. obviously the latter is the better investment. >> jack, at some hesitation i want to ask you a personal question. some years ago you had a heart transplant. the ceo of united airlines

recently had a heart transplant. i wonder if you have offered any encouragement via e-mail or telephone call to oscar minoz or if you would offer him advice as he goes through the next weeks and months running a company, as you did, after having such a dramatic surgery. >> it is dramatic surgery. i just had my new heart for 20 years now, tyler. i had a very bad recovery at the beginning, awful. then i got better and better every day. i was playing squash with a new racket my oldest son gave me on my birthday, may 8. that's two and a half months after the transplant. i would say, don't get discouraged. there are ups and downs. keep a good attitude. don't get concerned. just believe in the magic of believing, i call it. i have had an incredible

recovery in life. an active career. 20 years to be with my family. i'm the luckiest guy in the world. maybe not everybody is that luc lucky. i would say just assume you will get there. don't worry about it. don't lose sleep over it. what's the point? roll with the punches and do your best. follow the doctor's advice. a lot of pills involved. >> you know, jack, i bet the new heart outlived the new squash racket. congra congrats. >> you're correct. >> jack bogle of the vanguard group. voters head to the amtrak primaries to select the party nominee for president. will front-runners donald trump and hillary clinton expand their leads or could there be an upset in the east? we'll ask an all star panel ahead on power lunch. ♪jake reese, "day to feel alive"♪

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interesting moves on the ten-year move. rick santelli? >> absolutely. we just see a steady creep along the curve. look at tens and 30s as referenced by melissa. they are up a couple of basis points. twos are up the most, up three. we'll concentrate on fives. they were auctioned off. i gave the auction a c minus. we saw a little bit of buying after the results. the one week chart reveals the dynamics you need to know. there was a slow, steady creep. the year to date chart shows you the double bottom. it jumps out at you. it's similar in all maturities. the right side gets different, relative to the left spike on the double bottom the longer you go down the curve. it's all about foreign exchange today. traders saw the dollar index down a half a cent and said the fed wouldn't do anything. as you can see, we are dancing with that 94 level.

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hello, everyone. i'm sue herrera. here is your news update this hour. spanish place say a man arrested on suspicion of arms on the attack on a supermarket in paris. he boarded a jet accompanied by french police this morning. fbi director james comey speaking on a conference on cyber security in washington, d.c. he told the crowd the agency is changing how it investigating cyber crimes. >> what we are trying to do is not be bound by the normal paradigm of physical location. instead ask ourselves who in the fbi is best equipped to respond to this threat to understand this threat and track this threat. then we work to assign that work based on expertise.

>> bill cosmetby lost his bid f new york magazine subpoena for reporter notes chronicling sexual assault claims against him. a judge in new york city ruled against the comedian. prince's sister says the superstar had no known will. she's filed paperwork asking a minneapolis court to appoint a special administrator to oversee the estate. she's his only surviving full sibling. that's the cnbc update. i'll send it back to brian downtown. >> thank you very much. here is how your money and the markets look now. they are nearly totally flat. split in half. you have dupont and boeing, some of the big gainers on the dow. procter and gamble and microsoft are the big decliners netting out to no change at all. on the nasdaq, liberty media hit as well. the stock down 6%.

well, those are the numbers. making headlines in the market today, bad news for those suffering from muscular dystrophy. there was a negative recommendation from a panel on the drug which has not been proven effective. there is still hope. the fda, remember, not required to follow the panel's recommendation though it takes a hit on the news. >> today, shares are higher. it cut capital spending outlook but did report higher than expected results for the last quarter. investors bet the cash flow short fall will get better and oil prices were covered. that's why the stock is getting a bid finally. two big stories on jetblue. that was helped by gains in passenger revenue and lower fuel costs. separately jetblue taking delivery of the first u.s. built airbus aircraft today.

a big trend emerging this season. listen to what fidel di investments director of global research told us on "squawk box" yesterday. >> we are seeing over the last few weeks the typical pattern where companies guide below where they think they will report so the numbers coming into the quarter if you look at earnings estimates tends to be too low. >> we are joined by the earnings squad for the day. we have jack, brian from wells far kwo and brian smallick from hood river capital management. if you believe timer companies are once again sandbagging, saying they are a worse golfer than they are to beat the handicap. companies do it by guiding low, coming in higher and saying, oh,

look, we beat the street. then the earnings aren't worth the score card they are printed on. do you think the earnings we are seeing for lack of a better term are low quality, aka, garbage. >> they are lower quality earnings given they do allow management to have a fair amount of leeway in what they say to shareholders. i think from that perspective, absolutely. if you are looking for a gross score, net event handicap look at revenues. companies are having a difficult time on the top line. they can't adjust those. >> melissa and i do the street talk segment and look through the research. we have noticed that the companies beat the consensus forecast. what do you make of the trend? >> again, that's part of the

game. the fact is management goes to analysts, talks down earnings as much as possible. and then, you know, hopes to jump over it. in fact, i think the last quarter, you know, 75% or so of companies beat the earnings number. normally it's 68%. on the top line it's tougher. only 34% of companies so far this quarter have beaten the top line number. that compares normally to 45%. >> brian, i can appreciate examining earnings quality. that's an important issue. at the end of the day in terms of stock reaction it's all about whether it beats consensus. that's the name of the game here. what are you seeing? where are the opportunities in that? it does seem we are entering this season with a bar extremely low in several sectors. brian jacobson? >> well, the bar had to be

lowered over the last few months. shame on analysts and investors if they are believing the lower guidance. this is a game played for basically eternity here as was pointed out companies beat the earnings estimates less. so top line revenue and pushed back. some of the biggest scandals in accounting history came from manipulating revenue. world com, enron. revenue isn't the be all to end all as far as looking for pure guidance. most of the moves in the stocks we have been seeing haven't necessarily been a result of meeting or beating current quarter expectations. it's more about the narrative for the long-term growth prospects of the company. it seems to me that's what company stock prices are reacting to. what is the narrative, the growth outlook going forward? >> brian, we have established most companies aren't honest golfers. let's get to investment ideas. are there companies or sectors you have seen numbers come out

that you believe that you like enough to put new money to work in? >> i guess on a sector basis, earnings revisions have been positive in software and negative in hardware because of the cloud that's been happening. a couple of names we mentioned on the show are benefitting from the trends. >> we have three brians and a jack in the conversation. how about that? i will ask the jack of hearts over there. >> sounds like a full house. >> maybe the jack of diamonds. i don't know. jack, you're a holder of citi. citigroup, i gather, at its meeting announced today a third of the shareholders roughly opposed the say on pay resolution that was put forward. they don't want to break up the bank. they seem satisfied with it as it is currently constituted. what do you think about the pay packages being given at citi,

vis-a-vis the stock performance which hasn't been that great and what the company may or should do to address it? >> sure. yeah. it is an interesting phenomenon. i will say for the most part shareholders don't want to see incentive pay to bankers, if they see their holdings really don't -- pretty much diminish in value, if you will. but what we are going to do is recognize that, first of all, incentive comp for bankers is really, you know, par for the course, so to speak. and recognize how are we going to align or how can the company align that incentive with the goals of shareholders. let's maybe not focus on cash compensation. let's look at longer term compensation. let's look at perhaps aligning the compensation with longer term goals. if you drill into some of the dynamics, and i will say we have raised issues with citigroup in

the past along those lines. they have done a good job addressing some of the concerns. you know, if you drill down into how the incentive aligns with the incentive of shareholders you can come to a better agreement. >> all right. brian, brian, two geniuses. jack, tyler, melissa, michelle, thank you all. we are one jack short of a full house. >> we were. if we had two jacks. we just had jack bogle. >> we did! he was the river! jack bogle was the river. we go back in time. full house. i'm out. thank you. stay with cnbc today. at 3:00 eastern time, this is a big one. former citigroup chairman and ceo sandy weill sits down for an exclusive interview with the closing bell team. he and his wife donated a couple million bucks to the university of california at san francisco. no doubt the pay issue will come up as well. meantime, voters for the

election headed to the polls and another big primary tuesday, today. five states up for grabs. the big question -- can ted cruz and john kasich's unlikely alliance stop trump from becoming more dominant? become one step closer to the nomination? details you need to hear coming up.

it is the big question for democrats. has he moved the party left forever? let's bring in larry kudlow. pimco's policy head and luis miranda at the democratic national committee. my first question -- are you any relation to lynn manual miranda and can you get me four in the orchestra for "hamilton"? >> if i were i would get myself some seats. >> it's something else. >> same name though. >> good. let's talk about the sanders movement. we have a curious time in american politics. there is a movement in the gop named trump. there is a movement in the democratic party called sanders. is he moving the party permanently left because so many of his voters are the young

voters who will then stick with the party? >> i don't think that's the case. what he's brought to the party has been good. it's energized younger voters. it's energized the broader cross section. the fact that he continues to show strength both elect toerlly and in fund raising shows there is a space for a broader conversation about how to make the economy work better for all americans. look, senator clinton has been very good about engaging in a good economic dialogue. we were talking on cnbc. it's the two democrats having a real debate about the economy and how we expand opportunities and grow and build on the last seven years of 73 straight months of job growth. not a lot of substance. >> has the democratic party and has mrs. clinton had to move far

left in response to this and is this a permanent move? >> yes to both. this was coming on before sanders's campaign. de blasio in new york is a perfect example. mrs. clinton has been pulled to the left. the point is if you take a look at this, it's true jobs are doing fine. i absolutely grant you that. leading indicators not so good. other parts of the economy, particularly business investment, consumer confidence. they are all not doing well. the economy never did well to begin with. what do you have here? you have democratic candidates calling for higher taxes on businesses, higher taxes on individuals, higher taxes on investment. they are trashing business in general. trashing wall street which is somewhat amusing from mrs.

clinton's perspective. on the other hand -- >> amusing because she's represented a lot of clients, spoken to them. >> the money comes from wall street and the clinton foundation has so many conflicts of interest, all of which will come out in this general election. the republicans on the other side -- and i haven't endorsed anybody. look at the platforms. they want to reduce taxes. they want to reduce regulations. they want to help business. they want better border security. to me, the gop has the high ground on economic growth. the democrats have the low grouchbltd a ground and a lot of the sanders people are anti-establishment. i believe trump actually will get some of the sanders people because he is -- >> nonestablishment. >> let me bring you in with a jump ball here. it feels like if the democrats -- if larry is right and they are permanently moving left and staying that way.

and the republicans certainly seem historically over the past few years to be moving farther to the right, you have two parties on the wings. is there an opportunity for a third party to arise? i don't know if you will see a third party candidate. it's too late in terms of getting access. >> not even thinking about this election though it could happen. somebody may decide to stay in the race. >> i disagree with larry in terms of hillary clinton's stance. you'll see she has 1950, she needs 2983 to win the nomination. tonight she'll get close. i think she'll try to pivot center. has she had to move farther to the left on wall street reform and other economic policies? maybe. i think you will see over the

next several weeks her trying to pivot. so far we heard from mrs. clinton. she's not bill clinton. she is hillary clinton. she wants tax hikes. >> go ahead -- >> the tax cuts -- >> the republicans are promising tax cuts for the wealthy. we saw what happened during the bush recession which was you know by the time president obama took office the stock market lost value. it's more than doubled since he took office. the economy worked well. democrats understand if you do tax cuts at the lower income brackets those folks go out and spend the money. put it right back into the economy. not the main stream or the middle class. >> look, anybody would take

their chances in today's economy versus seven years ago. do we have more ways to go? >> running against george w. bush -- wait. hang on a second. really old. taxes had nothing to do with the financial meltdown. by the way, many people would argue that government regulations under democrats were a prime cause of the melt down. i want to ask mr. miranda this. bernie sanders and hillary clinton have both argued that payroll taxes on the middle class are going up. would you explain to me how that helps the economy or the middle class? >> well, what you are seeing with donald trump is his calls for people not to invest in the stock market are the kind of -- >> i just asked a different question. how does higher payroll taxes -- explain this to me. >> they don't have somebody running capable of handling the economy. >> how do higher taxes help the economy? >> what democrats are proposing is to lower taxes essentially on

the lower income brackets. and have those at the top pay their fair share so we can make sure we are making the type of investments. >> larry is asking specifically about payroll taxes. i want to get your response to that. >> the candidates have slightly different plans. i will let the candidates speak for themselves. when you look at them, actually receiving tax credits in different ways to make sure we are investing in things like education, keeping the cost of college down. >> obamacare.

>> we'll bring in libbey for one more. just a second. libby, you have been polite as these raging bulls collide here. >> i'm biting my tongue. >> you don't have to do that. if mr. sanders -- i don't think mr. miranda would answer this -- he would answer diplomatically. if mr. sanders has a bad night tonight, is it time for him to step aside? >> yeah. i'm not going to say normatively whether he should or not, but the math will get increasingly more difficult. how this plays out. should hillary clinton do as well as she did in new york. >> mr. miranda, i will see you at hamilton.

power lunch will be back. we live in a pick and choose world.

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welcome back. i'm meg terrell in boston joined by the bristol-myers squibb ceo. thanks for joining us. >> thank you for having me. >> this year they are focused on cancer. you have a huge drug in opdivo in immune oncology. what's next? can you continue the momentum you have seen already? >> this is an exciting time in oncology. we have never made so much progress before. at bristol-myers squibb we are very focused on cancer, of course. in 2015, we made extraordinary progress. it was approved in lung cancer, melanoma and kidney cancer. we are just at the beginning. we had a great start to 2016. with break through designation in hodgkin's lymphoma, head and

neck cancer. opdivo improves survival in head and neck cancer which is difficult to treat. we are just at the beginning of an exciting journey in oncology. >> how much is the drug pricing focus in the united states now affecting your business and the way you think about development? we are obviously very focused on access of our patients to medicine. the value of opdivo to a patient is so important we must ensure there are no barriers. we are pleased that patients in the u.s. have broad access to opdivo for every one of the approved indications. we are focused on the cost of health care. we understand that it's really an important debate. as a company and a leader, we are already working very actively with regulators, payers, providers to make sure that affordability of medicines continues to be at the center of

our priority. >> i want to ask about the political environment for pharmaceutical companies. we saw pfizer and allergan look like they were targeted by the treasury department for a deal. when you see something derailed by government regulation are you nervous about the environment? >> we are focused on science and innovation. as a result it is important for us to have an environment which is stable and recognizes the value of innovation. that's the reason why we are working very actively with payers and providers to make sure we find flexible ways for our combinations, medicines, different indications so we maximize the outcome to patients. that's important for a science-based company and a leader in oncology like bristol-myers squibb. >> we are unfortunately out of time. thanks for joining us. >> thanks for having me. >> tyler, back to you. >> thank you very much.

meg, we are about right now two and a half hours away from apple's earnings report. exciting day. it's a biggie. the tech giant may post its first drop in sales in 13 years. let's take a look at the stock and where it is now. bear in mind as we go through the afternoon. 104.46 is the quote now. down about a half or two-thirds of a percent. josh lip ton live for us in cupertino. >> well, tyler, apple could make history here. not for the right reasons. at least if you are an apple bull. the street thinks apple will report earnings per share of two bucks on revenue of $52 million. that means a 10% drop on the top line. company's first quarterly sales drop since 2003. the pressure we know is coming from iphones where units are expected to drop about 18%. in part that's because the iphone 6 was such a hit. that means the company is

struggling with very tough comps. analysts don't see the drop as a trend though. they think the pace of the decline will moderate and flip back to growth with the launch of the expected iphone 7. investors have been sellers however. apple stock now down some 20% from the recent high. still most analysts, about 85%, are telling clients to commit capital to apple. they see the iphone franchise getting back to growth. they will argue the stock is cheap. they think tim cook is going to unveil an updated capital return when the tech giant reports results after the close. back to you. >> thank you very much, josh lipton. he'll have it all for us. what are investors focused on ahead of the earnings. tavis mccourt has a market perform rating at raymond james down from an earlier higher rating. he's bearish this quarter. owns about 700,000 shares of

apple. larry, let me start with you. one of the things in my notes caught my eye. you said you think people aren't giving apple enough credit for being more than a hardware company. i find that curious. most of what they sell is hardware. >> that's truly the case, tyler. if you look at it as a hardware manufacturer, just a manufacturer in general, it's got a couple of things manufacturers don't have. the first is 100% return on assets. the second is 300% return on fixed assets. you have a remarkably profitable, unregulated manufacturing business. second thing, i think this quarter won't be pretty, at least cosmetic metly. we are near the trough of the cycle. there will be new products with a special tail wind. they will be the new products.

when you see the bottom in margins in the cyclical manufacturing company that's when the moldable expands. apple is going down because expectations have gone down. unlike most manufacturing ka companies it's gone down at the same time as the multiple. third, when people buy these things and i think we are looking at $50 million incremental iphones, they go into the apple ecosystem and spend incremental money. there are more each quarter and app developers develop more stuff. so the services revenue which is very high marginal profitability expands. fourth, if this isn't good enough, the phone companies used to subsidize the product. the leases will run off and you will have the massive advertising budgets of verizon and at&t telling you to buy stock. >> larry, i want to bring tavis

into the conversation. in terms of the hardware, what's interesting about this quarter is people are concerned about gross margin given the introduction of the asp's average selling price, gross margin will feel pressure. what larry talked about in terms of services, yes, is high margin but it is a small part of the business relative to hardware. you have been on the sidelines. what gets you to come off the sidelines in terms of what apple can say or do? >> you know, i think it's really about street expectations coming down. we thought this time last year we downgraded. we thought the street -- >> haven't they come down a lot though? >> not enough. we'll see where they end up tomorrow. i think the fear on the street is it could be an ipad mini which creates more cannibalization than growth. i don't agree with larry. apple is more than a manufacturing company. the subscribers don't turn

often. this is a recurring business. it recurs over two or three years. in general the last several cycles, investors have gone through a period of under estimating how strong it could be in a good cycle and over estimating how weak it could be in a bad cycle. >> i take larry's point, too. apple is like the hotel california. you can check out but you can never leave. i wonder what you think of the upcoming products. is the iphone 7 going to be a game changer? how much smarter can the smartphones become in terms of what they do and what we use them for? >> our view is the iphone business is becoming like the mac business. we hardly pay attention anymore when apple launches brand new macs. it's been a long time since a hardware change has driven sustainably higher sales. >> right. >> i don't know that we'll see anything again like we did with the iphone 6. that was a major misstep on apple's part three or four years

prior. not having a big screen phone with pent up demand for it. probably the next real big upgrade device for apple will be when they get the curved screens like the galaxy edge. that's not this year. more of a 17 or 18 event. when it happens i suspect we'll have another successful upgrade. >> tavis mccourt of raymond james and larry haverty, thank you very much. >> now to the big earning after the bell. chipotle. is the mexican fast food chain over food safety issues? susan? >> the bar is set low for chipotle earnings. the stock is down 40% below the record last year. this is because of the e. coli outbreak. chipotle has already warned the market it will be an ugly quarter. we know that. probably the worst since it went public in 2006. the street is looking for a loss of 95 cents apiece. revenues should be coming down by about a fifth from a year

ago. same store sales could fall close to 25%. the market is expecting a bad result. so it might make it easier for chipotle to beat the street. analysts are still the most bearish they have been since 2009. but there have been green shoots of late. cohen & co saying they have had traction in the free give aways. who doesn't like that? 41% of those who got the coupons come back close to four times more in the month. >> let's bring in an analyst. shares are down because of the e. coli break outs. there is a neutral rating on the stock. good to speak with you. susan talked about the promotional give aways and people coming back. are analysts, investors estimating correctly the impact when it comes to the cost of the give aways and the cannibalization. i will go in for something free,

but maybe not something i have to pay for. >> sure. the estimates are accurate. the numbers have come down meaningfully. we talked about the stock falling 40%. the 2016 outlook this time last year was $20 nearly. now 2017, a year further out isn't at 14. it's around 13. they are spending a lot from a company that spent less than 2% on all of that marketing before. it will be a long time before they wine wean themselves off of that. the person who thinks the recovery is 18 months away might be overly aggressive. the marketing spend and promotional activity has to remain. >> 18 months is a long time. is this going back to levels prior to the initial outbreaks or especially after the comments from the ceo or cfo that it

could be a long time before customers actually come back. >> not only come back but 20% more. they are opening stores at a 10% clip. you have companies competing much more aggressively. stores growing faster and opening up next to chipotle. you have to get back the customer, add 20 to 30% more customers to get back to the store level volumes. it's a big uphill battle for sure. >> still a show me market for chipotle which is trading 33 times earnings this year. some are still saying it's lofty. >> it is very lofty. great point. the earnings have come down yet the stock hasn't come down as much. 40% the stock corrected. the earnings outlook is down over 60%. >> why are you a neutral? this paints a terrible picture but you are still at a neutral.

>> it is on a relative basis. the stock under performed. at these levels we see 10% down side. i could see it testing 400 if it were to come under pressure on the fundamentals. not enough down side from these levels. longer term it's one of the best return vehicles, even if they were corrected, say, 30% less volumes per store. it's better than their peers. it is a valuation correction, not necessarily an earnings, meaningful miss given what's out there now on estimates. >> matt, thanks a lot. our thanks also to susan lee who will be on the earnings after the bell. here is the menu for this hour of power lunch. an interview with the ceo of janus. we'll ask about the performance of bill gross. plus, what about the growth prospects for the economy? a preview ahead of tomorrow's meeting. and the fda rejecting or deciding not to fast track a drug though many patients want

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a mixed quarter for janus capital. the company did raise the dividend by two pennies a share. let's dig in more with the ceo of janus here for a cnbc exclusive. thank you very much for joining us. part of the revenue issue in the

first quarter was assets under management fell. we have seen it with firms like yourself because of the chaos of the first quarter. are you seeing aum, assets under management come back? seeing resurgence with the market? >> yes. our assets ended the quarter close to where they started the quarter. we saw a really volatile and unpleasant first half. or first two-thirds of the quarter and a strong v-shaped recovery with the rest of the markets. the average assets were down which affects revenue, profits and earnings per share. we ended the quarter close to where we started. >> okay. what does it mean for earnings this quarter? you won't give us a number. but do you think some of the issues in the first quarter aren't going to be seen the next quarter? >> i should have known you were coming with hard questions because you got extra sleep last night. >> oh, there we go. i knew it. they're going to get harder now. >> i understand. quarterly results will vary with

a lot of things -- with the markets, with investment performance, with individual client id i don't sin kra tick decisions. i don't focus much on that. i try to make sure we are on a path. five years ago or more than that, i said, okay, we need to repair the firm. strengthen the fundamental balance sheet. we need to strengthen the investment team by adding talent. bringing in the right people. we need to make sure we have a good foundation for growth. from there we have to focus on clients and grow the firm. i see the results of the quarter as confirming that path. we had positive flows, great results from outside the u.s. i think we are on path. >> there is a guy named bill gross. you might have heard of him. he's a frequent guest on shows like this one. you brought him in. he's outperforming his peers. much of the money -- half or less than that -- was his own.

is bill bringing in money because of bill? >> i think that will happen. his results are excellent. he's the best in the business. there is no better unconstrained bond manager out there. he's beating now 83% of his peers on a one-year basis. i expect he'll continue to put up great results. we are honored to have him, thrilled. i'm sure given the strength of the results we'll see more folks pay attention and invest with him. >> etfs. you're making a big push into the etf market. the problem is it is a crowded marketplace. not only the big ones like the ishares, power shares. there are thousands of other players. every analyst said, hey, it's cool you are getting into i. it. how do you stand out, profit? >> great question. thanks, brian. we need to work hard to only offer things that are differentiated. it is a crowded marketplace. we are clearly not going to

compete with the big firms offering chocolate, vanilla and strawberry. we have to come out with things that are identify bli janus to deliver value above the indices. our first two etfs draw off the core strength of the janus investment team. it won't always be the case. we have different ideas to pull on other interesting thoughts here. we'll have a suite of more than a handful of etfs over time that will be did i hafferentiated an can make a contribution to our financial results and the relationships we are building with financial advisers. >> if the others are strawberry, vanilla and chocolate, give us something specific to janus you will do to capture investor attention and their assets. >> some of the offerings will be directly drawn from the active investment philosophy we have.

for instance, we are well known for a great small and mid cap growth investment team. we are using that for the first two etfs. we'll look at active etfs in the fixed income space that should be transparent and we'll look at some sector and thematic etfs. we'll have an interesting suite of offerings for clients. >> dick weil joining us with a dig also on my little oversleeping incident this morning for "squawk box." i appreciate it, i think. thank you. >> nice to talk to you, brian. >> huh. i have a blush going here. the story of an entrepreneur whose life changing idea came from -- a bad encounter with an ice cream truck. no it's not robby van winkle as we leave you with vanilla ice. ♪ ♪ something grabs ahold of me tightly ♪ ♪ flow like a hawk

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to be the first kid to buy a house... ...it's a very proud moment. whatever home means to you, we'll help you find it. zillow. the fbi will not make public the method it used to crack the

san bernardino terrorist iphone. the method purchased from a third party vendor and the fbi accordingly will tell the white house it doesn't know enough about the technical specs the vendor used to crack into the phone in order to be useful in making a public disclosure about what the vulnerability in the iphone software operating system is. earlier today fbi director james comey spoke in washington, d.c. he said the fbi was close to making a decision about whether or not it would reveal what the iphone flaw was. he said at that point the fbi had made the decision. dow jones citing sources saying the fbi made the decision saying they didn't have enough information about the vulnerability to disclose it. this is important because apple said publically it would like to know what the flaw was the fbi used in order to crack into the

phone. the fbi said it was undecided. now apparently that's started to change. >> it was an fbi contractor that did the work. correct? >> that's right. >> we believe an israeli company. >> we don't know what company it was. there are a number of rumors about who it might have been. so far that's not been disclosed. the question here is the fbi don't have knowledge of what's in the black box in the white house review policy to turn over the vulnerability to apple. this is important because law enforcement and intelligence generally want to keep those vulnerabilities they are aware of secret to use them again and again. they would like to disclose so they can shut down vulnerabilities and make the product more secure.

they trumpeted that. >> we don't know. the fbi never said who they purchased it from. director comey gave us a hint though at one point when he said that he knows exactly who the people were that they bought the solution from. he said he believes they had the united states's interests at heart. whoever they bought the solution from -- the hacking solution, director comey thinks they had u.s. interests at heart. all of this is cloaked in secrecy. the decision is so important here. >> i would imagine part of this is whoever holds the tool, whoever sold it to the fbi, they would then be the ultimate target for hackers. forget individual phones. you need this tool that the fbi bought. one can buy this tool feasibly

and use it on a host of phones. >> right. remember the warning apple gave about this. apple said this software is so dangerous that we don't want to create it inside a secure lab at apple headquarters in cupertino. it could get out and what we learned after the fact is somewhere out there in the wild this software or something like it already exists whether it is a software program or maybe some kind of hardware solution. some kind of a process involving the physical iphone equipment itself. it looks like if dow jones sources are correct we won't be learning that. >> if apple identified who the seller of the solution was, wouldn't they then go and try to negotiate with the seller? >> you would think. >> to acquire it or to acquire the company.

>> apple could buy the company, the solution, ask for a contract to turn it over. the company would have to make a decision on whether that was continuing to sell these vulnerabili vulnerabilities. >> the more people hold onto the tool the more likely it could get into the wrong hands. that's the bottom line. >> the more people who know about it, have access, you just expand that secret circle out and out. there might be more people who have access. >> a great magazine piece resides in this tale. we'll be right back.

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hello, everyone. i'm sue herera. this is your cnbc news update this hour. iraqi lawmakers interrupting a session to vote on a new cabinet, a key demand of supporters of an influential shiite cleric who gathered outside to press for changes. angela merkel visiting the headquarters of the counter terrorism operations after a tour of the berlin facility she met with the german interior minister and the heads of the intelligence service and criminal police office to

discuss the fight against isis. taxis in budapest blocking traffic demanding a ban on uber. it started at a city square before moving to different locations in the capital. it is the second time this year a mass demonstration has been organized to protest uber. americans aged 18 to 34 now surpass the number of baby boomers, making them the country's largest living generation. that's according to the pugh research center. millennials total 75.4 million, half a million more than the boomers. that's the news update this hour. back to you. >> i feel deposed, sue. >> we both are, my dear. >> i'm angry about this. thank you. >> sure. >> oil market closing for the day. let's go to jackie deangelis who is now on top of the world at the nymex. >> good afternoon. oil prices climbing today, closing over $44 a barrel. it really is a dollar driven rally again today.

not just for oil but commodities in general. the dollar index at 94 is supportive. the fed kicking off the meeting. no expectation of a policy change. so the dollar will continue to support oil. in addition, headlines crossing today that venezuela is suggesting nonopec members come to the meeting in june and continue the dialogue started in doha. add to it the fact that we have stronger seasonal demand now. some people are changing forecasts even if they still believe that the supply fundamentals are weak. the department of energy reporting inventories tomorrow. caterpillar getting an upgrade. upgraded from a buy to a hold. a fundamental call.

listen, business is getting better, albeit slowly. he likes the stock valuation. his target on cat, 92. that's about 19% upside. keep in mind it was $115 stock in 2011. we mocked goldman's upgrade from a sell to a hold yesterday. kind of a one and a half upgrade. >> on the wrong side of the trade. that's what happens on street talk. >> there you go. >> next up, container store, credit suisse is more bullish sticking with the outperform rating. the pop up 20%. tcs with better than expected fourth quarter. closets reaccelerated march and april. the change in tone for management. transitions to service oriented. 2016 still going to be a pivotal year. >> it is a nice pop today here.

this is a hideous chart. herb greenberg said it never should have gone public. it was $21 after the ipo. everyone is happy because the stock is back to $7. next up, newmont mining. upgraded to an outperform from a sector perform. they have new production from big mines which off set the declines into others also. the mine in indonesia. if it happens it would be a positive. the company apparently said it is in talks to potentially sell that. the target from rbc goes to 40 from 34. that's about 25% upside. >> you speak indonesian beautifully. want to point out so many analysts are reluctant to get on the right side of the trade and

call a rally sustainable. we are seeing it especially in the gold sector though gold is up 18% for the year. next up, xilinx. we talked about liking analyst calls. pretty interesting comments which may help the stock today from mkm. not expecting a lot saying they expect improving order patterns in communication and data centers. mkm said xilinx is probably the most attractive takeout candidate in the coverage universe. investors can own a company with a good model until the potential catalyst which may be a take out. >> one of the few original semiconductor companies we have been talking about since we were first on tv together in 1998. it's still hanging around there. under the radar name stock is charles river labs. gabelli & company starting with

a buy. charles river labs has relationships with 100 of the biggest drug development companies with funding from bio techs and that despite stock evaluations is still growing. free cash flow. >> that's a big call. >> coming up, we'll take a short walk. let's move on to trading nation. s & p cut exxon's credit rating partly due to low oil prices leaving microsoft and j & j with spot on triple a ratings from s&p. let's talk about exxon and the other energy giants with the trading nation team. craig johnson with piper jaffrey. still a downgrade on credit

rating. what do you make of it? would it make you a sell on exxon if you owned it. do you? >> i don't own it. it would raise alarm bells. exxon mobile is rated aaa since 1949. this is an historic move by s&p. it's all due to lower oil prices. later this week exxon mobil will report earnings down significantly and chevron will probably report a loss. on top of that we'll see the mess in doha last week which you were at. it's been an impressive rally with oil names. good time to take profits. >> good time to take profits. craig johnson you look at the charts. do the charts on exxon tell you to sell it if you own it? >> the chart on exxon has reversed the down trend we have seen for a better part of a year and a half. when we look at the chart of exxon we had a nice rally. i'm not adding to it at this

point. we'll see further backing over the short to intermediate term. when you get the big long term down trend reversals. you want to add to the positions. right now, rsi, these indicators are fairly well elevated. i will wait for the pullback to add to the positions. not to mention the price of oil is at a period of time when you reverse the down trend. is this sustainable? we are stuck in a range between 42 and $50. we may go sideways here for a while. >> it may go sideways. not a ringing endorsement. eddie says take a pause. appreciate it. for more trading nation, go to our website, tradingnation.cnbc.com. we are less than 24 hours away from the next fed decision. as is often the case what they say may be more important than what they do. so what will the fed say about

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we are now less than 24 hours away from the next fed decision. steve liesman paying attention to that. no move expected. we'll watch to see what the fed says about growth. >> which show? >> power lunch. >> and you'll be there. >> interesting results. first thing we start with the good news. here we go. probability of recession. it's come down to the lowest we have had since september here. there's the spike up we had. 28.8%. the idea that we were worried about a recession. >> 48 respondents. economists, fund managers, strat

jis. guys on the street. one of the highest we have had in the history. now it's back down. still a little bit above average. the bad news is the lower probability of recession comes with lower growth numbers. here is the trajectory. december 2014, we thought that 2016 growth would be up near 3%. down, down, down we go. >> good call. the first time below 2% on year over year change. not much more. more growth in the u.s. driven by housing investment. it is a 2.0% world. chris rupkey says the worry here is too many sectors are having problems and could drag us down near recession. let me show you the big concerns to the recovery here. global economic weakness, 36%.

that's pretty much where it's been. the number one concern for the u.s. economy, tyler. tax and regulatory policies 22%. slow wage growth 9%. over my left shoulder. all the negative talk, wall street is spooked. >> i'm surprised. >> i agree. >> didn't get higher. >> inflation, deflation barely registers. each gets 2%. let me show you the fed's time. this equates to slower fed here. the next hike, we thought it was in june. now two months later in august 2016. that's the average for the respondents. when will the balance sheet decline? a month later. now over the left shoulder. when is the fed done hiking? that's the terminal rate. 2.73. now a quarter later. fourth quarter of 2018. one more thing to share. >> a lower high. >> exactly. good point.

james paulsen writes in with economic surprise indexes rising recently and with the u.s. dollar weakening while commodity prices recover the fed's decision to continue to pause rate hikes seems indefensible. he thinks the fed should be moving. >> see you tomorrow. >> 2:00. >> see you then. big debate over the right to try next on "power lunch".

take a look at shares of sarepta down 25% after the fda didn't approve a muscular dystrophy drug. they told cnbc they will not give up the fight. >> we'll continue to talk with the fda and have a path forward. you know, we are committed to working with the fda to see if we can make sure to expedite this as quickly as possible. >> lisa banko, managing director has an under perform, a $so price target. good to have you with us. a good call given what's gone on with the stock. you noted today the fda picture painted at this panel was pretty bleak and there are reasons they didn't go ahead with the fast track including mineral production of the key compound

here and murky clinical evidence because of problematic controls. what are the chances that this thing goes forward on may 26th which is the next key date? >> hi. great to see you. in the ten years i have been covering biotech i have not seen anything as emotionally charged as the fda meeting that took place yesterday. i would say now that the fda has rendered the decision it's going against the odds for the fda to give a recommendation that's out of line with the committee, but it can happen. >> all right. so very, very low odds. in the meantime, they are also facing potentially what could be a cash problem at the end of 2015 they had, what, something a little over $200 million in cash. can they weather this storm? >> well, they do have several ongoing studies that could address some of the deficiencies in the data. possibly leading to approval and maybe the 2018 to 2020 time frame. in the meantime the company will probably need to raise

additional capital to really do the studies and do additional studies to really get the drug through the finish line. >> is it the drug for muscular dystrophy that it's muscular dystrophy. is it because it's doomed or it's going to take longer to get the evidence necessary to get it through the fda? >> you know, the drug could work, the ad calm had an issue with the deficiencies in the data. and the committee, though they gave very heart warming and heart breaking testimonies and many of them from parents, patients, you know, members of the community, it just wasn't enough to convince the committee that the data would be sufficient. now, where we go from here, i think additional studies could address some of the deficiencies. and what we'll have to see how it plays out. >> thanks for joining us. appreciate it. the fdca's decision raises the question should patients have the right to try

experimental, untested and potentially dangerous therapies? >> dr. zeke emmanuel is university of penn's chair of medical ethics. the argument seems fairly clear. if you've got this horrible disease, what's the harm of trying out a drug, even if the fda has not approved it when the other option is so grim? >> well, first of all, let's remember there is no medical intervention, including this drug, that has no side effects, no complications and can't make things worse. so the idea that, you know, it's fine. is not right. second of all, we do not want to have a free market in drugs and exploit people who are, you know, very desperate. this is one of the reasons we got rid of snake oil salesman

and got a process for approving ethical drugs. we wanted to make sure people were taking efficacious drugs. having them in a bad situation and saying oh, we've got something if you either charging them a lot or in essence charging the rest of us a lot to pay for them -- >> dr. emmanuel, i don't think anybody would disagree with what you're suggesting, this is not some company that's come out of nowhere and said i found a medical solution based -- it's a company that's spent time and money that has gotten to a recommendation of a panel. it's not me coming out of a trailer with a solution. >> excuse me. let's go back. drug company starts, for every 100 drugs they start with, three or so get approved by the fda. lots of very reputable drug companies with more research

than this one look promising and fail. just to tell me they went to a fda process doesn't say anything about the effieicacy of the drug. they used 12 patients never did a placebo control. could have done that trial that could have compared this drug to nothing. i understand the desperation of patients. i have taken care of many patients who died that want to try things. you have to do it in a way that doesn't exploit them. this company was trying to not generate reliable valid data. your report -- >> i think -- >> your reporter herself said, would the data show. they didn't show significant improvement here. so they did not actually pass a threshold. >> fair enough.

darcy oleson you have the other side. >> i think the question is whether the fda is going to throw these boys a lifeline or not. these are boys who are terminal and there has not been an advance in treatment in 30 years. the fda itself has concluded this particular treatment is safe. all they're working on now is the exact efficacy. we have parents who have two boys on this. one was walking when he got -- the other one couldn't walk. i mean, so there is a lot of evidence for efficacy, but fundamentally -- >> in 12 patients there's no such thing as a lot of evidence. >> there were doctors begging the fda yesterday for the right to write this prescription out for these boys. it's a lifeline. it is all they have. >> so, look, it's a tragic situation. i totally agree. our hearts go out to these

families and these patients. it is -- >> hearts are not enough. your heart going out isn't going to cure one of these boys or have them get to his next birthday. >> what you don't want -- >> that, you know -- >> what the fda -- >> what you don't want is a panel of 12 government officials trying to make a life or death decision for thousands of families across the country. >> the misrepgz of the panel they're not the government -- >> they had a -- >> let me finish. we want to throw true life lines that are therapeutically beneficial. we don't want to throw just because we invented something that may turn out to be harmful or not. the fact -- >> the families are begging to save their childrens' lives. >> let dr. emmanuel finish, please. i understand it's a passionate issue. >> this drug might not have caused serious harm in 12 patients. does not tell you that it's safe. it tells you it's safe enough to

go to trial. it doesn't tell you it's safe enough to let out to any patient walking through the door. and that's a -- >> well the drug is already -- it's actually in stage three already. >> darcy we're going to wrap it up. what is your next step? >> we need to -- let's get the lifeboats in the waters for these boys. it's safe and it's the best thing they've got going right now. >> listen, it's an inflamed and impassioned discussion over a terrible disease. thank you very much. all right. we'll be right back. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class.

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the market is not cheap. dividend yields are low, around 2%. this is not a -- you know, if you're in the market for the long term, you have to accept the market's return, whatever it may be. and so i look for a decade of returns that are not going to be quite as good or nearly as good as that 12% we've earned per year in the last 70 years. >> that was vanguard's founder on power lunch saying investors should get ready for a decade of lower returns because he thinks corporate earnings will be staying low. >> it will be interesting with what the fed does tomorrow. we asked him that question in

the context of the s&p 500 being about 20 as we were just a couple percentages away from all time highs. >> who would argue with him. i say if we get 10% that's good. and it will out perform most asset classes. >> have fun ringing the bell with your friends from virginia tech tech. >> give it to me, baby. >> closing bell is next. hey, everybody, welcome to the closing bell. i'm kelly evans at the new york stock exchange. >> this afternoon, well, it's pretty much all about earnings, stocks in a bit of a holding pattern ahead of reports from apple, twitter, at&t, ebay and others reporting tonight we'll tell you the key numbers to watch for in those reports coming up. >> also, noted investor howard marks sits down with an interview with how investors should get an edg t