interestingly we're seeing a 52 week high on the bond etf. rates 1.36%. all weird which is a very strange -- >> you know what's going to be weird. >> yes. >> on monday our executive producer jason gowertz will be moving. i know you're going to kill me for that. you were great. >> "closing bell" starts right now. hi, and welcome to the "closing bell", everybody. i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. stocks have hit record highs. the s&p, that's the one that's doing it. briefly above the record closing high on the back of that strong jobs report this morning. the dow, the s&p, nasdaq now have all erased their brexit losses. >> remember that? >> it seems like ancient history right now. we'll see if that can continue in the fall. >> it's been a tough week for

energy. oil down more than 7%. we're live on the floor of the nymex with more on that. >> the house has passed legislation to block boeings planned aircraft sales to iran. we have the details and does volvo have any real impact on that potential transaction. plus, facebook is looking to take on snap chat head to head with a new feature in its messenger service as snap chat faces a potential class action lawsuit. more on these stories coming up. let's start with the jobs report. the blowout number this morning, steve lease man has the key data points moving the markets. bob pasani is all over the markets. >> despite the big number, there are some good and there are 1078 bad points in this report. jobs did buck the declining trend but may is down to a paul try 11,000. what you have to average that out with the weakness as well. and that's just the way economists are treating this number.

they average it out over three months and it comes out to 147,000. that's what they think is the more likely right monthly trend here. now it's below the 200,000 trend of earlier this year but above the 114 three-month trend of last month. tom porcelli writes that people are hanging their economic assessment on this single number is careless. last month's number was not reality anymore than this number is reality. the average maybe closer to reality. job growth was, however, broad based. you can see the gains in leisure/hospitality. information technology. leisure, temporary help up. manufacturing a surprise gain at 14,000. wage gains muted on the month, up to 0.1%. that's the smallest gain since february. year over year we're up 2.6% overall. that's something the fed is going to watch. they're going to wait and watch all of this data careful that there are no serious consequences from brexit before considering another hike. guys, that could come, the consideration of it, maybe in

the early fall. >> steve, i know this is more about the market reaction. it's been fascinating you would have thought when this number hit that the ten year interest rate, the yield would have spiked, right? all of a sudden the fed and those calculations would have come back into the picture. tom porcelli and others have been saying, ah, this is no big deal. it's mean reversion. i'm kind of surprised how blase some of the reaction has been. >> if you think about it, you get to have your cake and trade it here, too, kelly. that's really the story. you get your 287. what does that do? makes you feel a lot more confident that we're not falling off a cliff when it comes to job growth or the u.s. economy. because of the brexit fears, because of the softness, because we have a careful fed, it's sort of scared of its own hiking shadow, you know you're out of the woods for at least a couple of months here. you get your growth but you don't get your rate hike. plus i think there's another issue here.

that is that it is overall economic growth waiting to see maybe we're back to the old trend. , i'm really interested in that may report, the revision lower, 11,000. what are we to make of that? i mean, what was that all about? what happened in may? >> well, i mean, there's a lot of theories out there. a possibility that we had a little bit of strength earlier because of unusual youly warm weather, that maybe you gave it up in may. january/february was a time of deep concerns over recession. perhaps we had a lack of hiring on the part of companies although we didn't have the firing to go along with it as companies waited to see what was going to happen with the economy. it's good to put up that chart either from, you know, the dow chart, the big swing we had in january/february. there was a lot of concern about the global economy. >> oh, yeah. maybe that did trickle through. still turned around in june. for now, steve, thank you so much. >> thank you. >> let's get to bob pasani with good news on the jobs front. good news for stocks, bob. >> makes you wonder what

happened. two days ago we were talking about a trading range. now we're talking on the door of historic highs. steve's right. it's essentially you get to have your cake and trade too because the bulls are arguing here that we've got robust job gains coming back again but the fed is still on hold. hey, that's absolutely perfect for stocks. the bears, of course, are quite angry. their argument is the whole rally going on with stocks and bonds is based on the very unusual supply/demand. it's not based on any fund amountals around the u.s. economy. regardless, look at the kinds of internal. 9:1. we're getting close to 400. that's a notable number at nyse. could get towards moderate. volatility, we're at new lows in that area here. what the sector is, the kind of leadership we're having, it's the old risk gone game with the banks, haven't seen this in a long time. leading retailers haven't done this.

even financials, the broader sector in the group moving on the up side. even stocks that have been holding back recently like home builders are having a very nice day. moderate volume here. industrials and material stocks, again, concerns about global slowdown has hurt them. ryder, dupont, caterpillar, boeing, united technologies. these are big cap names. these are the stocks that move indices that are market cap weighted overall. as far as the new highs, we'll talk about the closing highs as we're getting close to the end of the day. 2130 the old closing high in the s&p. you see how close we are. 2130. the dow, a little bit further away. 18,312 but on a day like today, heaven knows almost anything can happen. going to be fun the next 45 minutes or so. back to you. >> bob, thank you very much. because it's not real until you've heard it a third time, today clearly you could have your cake and trade it too. >> which happens a lot around

here, by the way. >> actually, it does, yes. let's go to our closing bell exchange for this rally friday. kim mahoney from mahoney asset management. sitting next to kenny pulcarhy and rick santelli is checking in from chicago. kenny p., i've been talking to some of your fellow traders. the market just blew through some technical levels on the up side. didn't even pause at some of those levels there. what do you make of this string today? >> it almost blew through on the up side the way it blew through on the down side a couple of weeks ago after brexit, right? we cut right through the numbers on the way down. we did the same on the way up. it's been fighting with 2100 for a couple of weeks now. unable to really pierce it. always getting pushed back. today's number just kind of ignited the excitement. boom, right up and through and now we're testing the highs. notice this, there's not a lot of volume that's goine on. on a move like this you'd want to see us approaching a billion

shares down here to confirm that move. i get the excitement. i get the whole thing. like steve said, once you average it out, we're still trending lower, right, in terms of what the number was at 147,000 verses the average was closer to 200. so, you know, you have to take it with a grain of salt and understand that, okay, today is a big party. next week when the earnings start the story could change once again once you start hearing about the strong dollar, currency effects. >> stocks are clearly psyched, rick santelli. bonds still seem totally bummed. >> i'll tell you what. i think we could add 600,000 jobs honestly and i think it would have ended up the way it did. i think we could have had 80,000 jobs and i think that treasury rates would have been even lower. stock market would have been even higher. i don't know. here's the way i look at it. no matter what the fundamental the come out to be, there's a bunch of global investors look at 211 in 30s. 136 in tens. they look at southern european

interest rates, they look at negative interest rates in europe and japan. just hands down. this is a strange, perverse central banker systemic issue and the treasuries and the gilt. look at the charts, treasury, gilt, the pattern is the same. they all spiked and they all went down. exactly the same. in terms of the stock market, for all the reasons the brexit calls were wrong i think are all good reasons to see the u.s. stock market with bigger sponsorship. i just don't see this dynamic leaving any time soon, so, you know, if you're looking at the fundamentals, it's great water cooler talk but if you want to make money, i think right now the crowd mentality is going to be right for a while. >> ken mahoney, where are you making money? are you buying this rally right here? >> it's funny, kenny p. said something. so true, this market definitely has amnesia not remembering one day from the next. sometimes you call it dr. jekyll, mr. hyde market.

blowing through the 50 day moving average and then buyers appear. for us two weeks ago we followed the vix, the vix spiked about 30%. >> right. >> went around 26/28. that's a buy signal for us as it was in january, as it was in august. when the fear rises and the vix spikes, we like the pull back. we are seeing the vix settling in. we've over emphasized the vix. it looks complacent. we are going to take some profits after two weeks ago buying an idea. it's almost anyone's guess what monday will bring. short of amnesia from the markets, the technicals, it's hard. we don't get follow through on either side of the up side. sometimes we get follow through on the down side. >> kenny p., we're going to get some inflation data next week. i'm wondering if that will be ever more important if it shows any sign again from sustained quiet growth here. is that what could finally turn the tide? >> no. i don't think the macro data is going to turn the tied right now. the focus is going to be much

more focused on what the ceos say will be certain. the macro data will play it. steve liesman made it clear. the fed is off the charts. the earliest we'll start discussing any rate hike will be the fall. then we have the election. forget that. the earliest is december. to my mind it's been pushed to 2017. there's a base under here. there's a floor under here. it's going to be hard for the market to correct. >> let me go back to rick for a second here. if i heard you correctly, the ten year, our treasury yields may continue lower not because of what's going on fundamentally here in the united states but it's more they're reacting to these negative rates globally right now. they're sort of being held hostage right there, right? >> absolutely. it's like being a mud rutt. the tires just don't want to come out. i see the course remaining as it is. and, you know, there's kind of dividend rapture going on in stocks. i mean, you're all the efforts on stocks. alls i hear about is traders

talking about i need to own these stocks to get a yield, treasury yield. >> exactly. exactly. >> but you know what, that tends to give the stock market even more support. i just think there's no place to hide from a bit of bullishness from u.s. markets for a while. >> i love it. way with words like nobody else. >> new headline. go ahead, ken mahoney. >> i was going to say, what happens is the market catches people by surprise. off to the beach not looking at this. we start to see performance anxiety. wait a second. kind of neutral to mixed. now the market starts going on. next thing whether you're the biggest bear in the world, you have to respect the trend and jump on. while we have the fundamentals that show a lot of head winds. you can argue the bearish point of view all day long. the market, it looks like the path of least resistance is higher. for the managers who hate the market, they join in. they have performance anxiety. >> can't fight it. thank you very much. kenny p., alcoa begins the

earning spree on monday. >> thirteen fed speakers and counting next week. >> fun things to look forward to. in the meantime, not fun. the latest developments in the deadly shootings in dallas. nbc news sarah rosario is on the scene with the very latest. sarah? >> reporter: yeah, that's right, guys. police here are still in the middle of a very active investigation. the police chief telling us he doesn't feel like he's exhausted every lead that they can look into so now this is why officers are still out here. today much of downtown dallas is shut down. we're told that the sniper, the gunman was killed overnight by a bomb that police detonated all after some snipers were shooting down at the police officers here from elevated areas. one of those elevated areas just down the street from where i'm standing at a parking garage as you can see all the way down at the end of the street. still blocked off by police. now while police are still investigating this, they say there's also a possibility that

someone else could be involved, and while that possibility is still out there, they do not want to release anymore information than what they already have about the gunman. here's what we know so far about the gunman. we have his name. it's micah xavier johnson, 25 years old. killed by a bomb detonated by police. he negotiated with officers before he was killed. we're also learning more about his motive. police say he said he was very mad at white people, said he wanted to kill white people, specifically white police officers. he said he was mad about the black lives matter movement and also about all the recent police shootings around the nation involving black men. he also told officers that he was acting alone but you may recall the police chief telling us today they have three other people in custody. one other person is a female. so now this is something that police are looking into. if this gunman says he's acting alone, who are these people in custody? we're hoping to learn more information about that but right now that's something police are keeping close to the vest while they continue to investigate.

again, follow every lead in this case. reporting live in dallas, sarah rosario. >> we had a moment of silence on the new york stock exchange for slain officers. with 45 minutes left to go in the session, the dow is marching higher. up 255 points today. the small caps, we should say as well, are having a huge session. the s&p is up 32 to just a point below its all-time closing high. the nasdaq is up 80. >> transports, too, i don't know if you mention the that. >> there you go. coming up, watch out snap chat. facebook is muscling into its turf on messaging that self-destructs. sound familiar? this as snap chat faces a lawsuit excusing it of exposing children to inappropriate content. we'll sort this out. up next "fortune" magazine

murray talks to tesla's president. murray will weigh in. you're watching cnbc first in business worldwide. this man creates software, used by this bank, to protect this customer, who lives re and flies to hong kong, to visit this company that makes smart pnes, us by this vice president, this little kid, oop and this obstetrician, who works across the street from this man, who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.

welcome back. rally day on wall street. the s&p in particular had briefly traded above its previous all-time closing high. it's just below that right now with a gain of about 1.5%. the nasdaq is the best performer percentage wise with a gain up 1.6% as we head towards the close. meantime chemours and dupont are rising. a jury ordered dupont to pay $5.1 million. yesterday they were arguing $1.2 billion. the same jury awarded him $5.1 million in compensatory damages. chemours agreed to bear liability. both companies say they will appeal this verdict. now it's been a war of words

between tesla ceo elon muscle and alan murray of "fortune" magazine. murray tweeted, seems pretty material to me with a link to a "fortune" article. musk responded, yes, it was material to you. bs article increased your advertising revenue, wasn't material to tesla as shown by market. we've been waiting for him to show up and he has. >> i have not been in hiding. >> yesterday alan responded to an article suggesting that the "fortune" piece is part of an anti-tesla conspiracy on "fortune's" part to which tesla said, no, you were misleading mostly on your own with many copy cats. jalopnic just lost its sense of irony and didn't get my tweet. now we welcome alan murray. you've had quite a week here. >> only on twitter.

only in the virtual world. the real world it's been fine. kind of warm but otherwise okay. >> look, this is pretty straightforward. the article was written by carol lewis. she's one of the most respected people in our business. she's been doing this for 60 years. she pointed out that they should -- in her view, they should have revealed this before doing the secondary offering. pretty straightforward. it seems clearly material to me. i mean, it had an affect on the stock price. i'm not a lawyer. the lawyers may have to fight this out in court, but it was a perfectly legitimate story. why elon musk chose to go into a rage over carol's story is what's a bit of a mystery to me. >> yeah. so people are familiar with the time line. basically this accident even though we've kind of just learned about it happened a couple of months ago. >> yes. >> in the meantime, tesla was able to earn more money at a higher share price than was the case after this came to light and the question is, you know, how much of that ongoing probe,

which tesla says, look, we were in the early stages of figuring out what even happened so -- >> that's right. so they're very quick to report it to the government authorities so they did that right away. the question is, should they have also told the shareholders before they went out and asked them to buy the stock. again, you know, the lawyers can fight over that, but it's totally a legitimate question. why it sent him into this rage i'm not sure. >> their response initially in that blog that they wrote was that carol had cherry picked some of the information. >> that's just not true. carol is a very -- carol is a very thorough reporter. >> i get that, but their point is that it wasn't telling the whole story that was going on, that they -- as kelly was suggesting, they didn't know all the details yet. >> of course. they didn't want to go public with what they didn't know even though the timing was important, was critical -- >> i just don't buy that. >> i get it. >> i just don't buy it. yeah, sure, we don't know exactly what happened in the accident, that's why there's an

investigation, but is the fact of the accident material? i think in this case it probably is. they said, oh, wait. you don't report every accident that ford motor company has. >> that's a fatality. >> which is different. that is not a valid comparison. this is a new technology. it's being watched closely. the fact that the stock moved when it did become public seems to me to be pretty clear evidence that it was material information. >> is this going to be settled by the shareholders ultimately? i mean, who's going to kind of force the issue? or is it going to be regulators? >> the question is whether someone files a shareholder lawsuit. that's what they're worried about. the stock actually recovered pretty nicely after the fact. i don't know who would be qualified to file such a -- >> and whether the sec should get involved given the timing of the disclosure prior to. >> up to the sec. >> yeah. the thing that surprises me, you guys deal with these kinds of questions all the time. you know if this were an east coast company, nobody would say a thing.

it's a perfectly legitimate question. there's a sense in musk's world that somehow the rules shouldn't apply against them. you're against them. i'm not. i think the technology is great. >> that's what i was going to ask you. what do you think of elon musk? >> i am a big fan of elon musk. we put him on the cover of the magazine. i'm a big fan of the tesla solar city merger. >> wow. >> yeah, because i think it's an opportunity to really show -- to create a 21st century new energy company and i think batteries are going to be so important to that economy -- >> you don't think this is just elon musk -- tesla bailing out elon musk? >> i think there are legitimate questions of selling -- of merging two companies when you're cousins and you have an interest in it, but i actually -- i hope it happens. i think it's a good idea. the notion that the world has to divide itself up into elon lovers and elon haters is it frankly a sign of a peer problem we seem to have as a society. >> well, it's been, again,

another week where we're learning about what this technology is capable of and how the company should be handling it but, alan, thanks for joining us. >> good to see you. >> always happy to come by. >> i will. all you have to do is invite me. >> we did, two days ago. >> yeah, sorry about that. >> that's okay. alan murray, editor of "fortune" magazine as always. 35 minutes in the trading day. if you just joined us, the s&p did briefly trade above its previous all-time closing high. just below that right now. we'll see if we can do this before the close here. coming up, will boeing sell planes to iran air be grounded by legislation that was just passed in the house? our phil lebeau will tell us how this could play out. up next, snap chat faces a formidable competitor in the self-destructive messaging space. we'll have the details on snap chat's new challenges when kelly and i come back. people talk about "deals"

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welcome back. half an hour to go. watching the s&p, 2.5 points shy of its record high. dow up 250 points. s&p up 77. video conference equipment maker polycom ending its agreement to be acquired by mitel networks of canada. the company is valued at $2 billion. now to snap chat's facing a couple of key challenges.

a man mouth competitor and a lawsuit. julia bores stin has all of that for us. julia? >> reporter: hey, bill. facebook is testing a new feature in messenger app. called secret conversation with end-to-end encryption. messages can only be read on one device with the person you're communicating with. users can set a timer to control the length of time each message remains visible. this looks like direct competition for snap chat whose disappearing messages have grown to 10 billion daily views. another thorn in the side of snap chat, a class action suit forex posing minors to inappropriate content. attorneys saying quote specifically, through snap chat discover, snap chat is currently engaged in an insidious minors or their parents that they would be exposed to such explicit

content. snap chat responding, quote, we haven't been served with a complaint in this lawsuit, but we are sorry if people were offended. our discover partners have editorial independence which is something that we support. now snap chat ceo evan siegel was on the sun valley attendee list. we haven't seen him and reportedly isn't going to be coming this year. guys, back to you. >> in a way, julia, the dust up over the discovery thing seems to under score the appeal snap chat has to a lot of people even if their parents are upset. >> reporter: yes. i mean, i think it's interesting in the blog that facebook posted that they are really having conversations about sensitive issues such as health matters, financial issues with an accountant. it's a more serious thing. snap chat is more fun. at the end of the day the ability to send messages that would disappear whenever you wanted them to is something that's very similar to snap chat. this really comes down to the idea that people want to be able

to message in all different sorts of ways and facebook wants you to be able to do that without leaving its family of apps. >> you must be so tired of that view there in sun valley by now. >> we know bill is. >> reporter: i don't know. you can't get tired of this view, bill. >> i can imagine. julia, thanks very much. >> julia boorstin. time for a cnbc news update. sue herera. >> here's what's happening at this hour. the chairman of the congressional black caucus says anyone who deliberately kills five police officers is a terrorist. the caucus gathering in washington to continue for their house vote on guns notably denying those on the no fly list from buying guns. u.s. flags on government buildings in washington including the white house were lowered to half staff for the victims of the dallas sniper shootings. a spokesman says white house officials have been in touch with dallas authorities throughout the day to offer their support. ten states are suing the federal government over rules requiring public schools to allow transgender students to

use restrooms conforming to their gender identity. the states involved are arkansas, kansas, michigan, montana, north dakota, iowa, south carolina, south dakota, wyoming and nebraska. and former alabama house speaker mike hubbard has been sentenced to four years behind bars after being convicted last month of 12 felony ethics counts. state prosecutors had asked the judge for an 18 year sentence including 13 years on probation and a $1.1 million fine. it's a tough news day, guys. i'll turn it back over to you. >> boy, isn't it. >> thanks. >> next hour. going into the last half hour of trade here for what has been a pretty volatile week to say the least. the dow up 241 points. we have a trader going to tell us what he's doing going into the close. plus, coming up, moham mohamed el erian will weigh in on the jobs report and whether brexit is officially in the rear-view mirror.

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welcome back. strong day for markets today. it's been quieter. the dow is up 233. s&p about three or four points from the all-time closing high. take a look at the week that it has been. now year to date only financials are in the red for this week. consumer discretionary has led the way at more than 2%. health care industrials following their technology strong two. in the red telecom and utilities. oil especially, bill, has had a rough one. >> we'll be getting to that in a i little bit. first, let me chat here with steve grasso, stewart franklin of the new york stock exchange. what do you make of the rally today? >> i hadn't noticed it. are we rallying? >> when you look at how we came out of the gates, you had the great jobs number and everyone said off to the races. nothing really correlates to

what the rally that we're seeing. the ten year doesn't correlate to it. >> exactly. >> move in gold doesn't correlate to it. >> exactly. >> obviously utilities under performing. that correlates to it. but at the end of the day i think people were caught off a little bit off guard with this. what does it really change though? what's the fed going to do? are they still on hold? because then utilities are going to be bought again. are they still on hold? staples, gold. so for me i think what really balances out is that 11 point some odd 7 trillion in zero yielding assets. >> that's the point, i think. following brexit is the fed really the top priority right now for the market? aren't they looking more overseas to what's going on and responding there? suddenly we're the best looking thing on the block again like we were for a while, right? >> that's why people are buying stocks and bonds, right? >> that's exactly right. so you have all of those negative yielding assets being pushed here for yielding assets.

however low the yield is. you also have people getting pushed to risk assets as well. you have them getting pushed into the market. that's what's kept the undertone on the market. we haven't made a new high. we're there. >> right there. >> pulling back. >> and we have blown through. we have the april high up 2111. june high of 2120 so we busted through all of those levels. right here 2134 is the big level. outside of that though, if you remember back in may of 2015, that was the 2134. after that the june we were up there 2129. that's why we're spending so much time right here. july was 2132. we've been establishing that 2100 has been a huge important pivot point for the s&p for a long time, right? >> tremendous. >> as long as we're above this here, what are you doing here? are you -- >> right now you basically don't want to be -- i don't know if you want to be buying stocks at this level, but the over shoot levels, which is what we look at, 2150.

2184. 2200. >> yeah. yeah. >> you can get sucked into this market right now, but it still has a lot of movement on the up side. we were short and weak. let's see what they do next week with the kick off of earnings. that should be the defining moment for the market. >> very good. all right, steve, thank you very much. >> you, too. >> steve grasso. kelly. let's get to more on some of these wild swings in oil and in gold this week. let's get over to jackie deangeles who joins us from the nymex. >> indeed it was a wild week for commodities, especially crude oil. take a look at this one week chart with crude. we started the week near $50 a barrel only to drop down and test the $46 level. there was support there. then we hopped up again. then we dipped under 45. today we finished at 45.41. it was more than 7% loss in crude oil for the week. the supportive factors, that strong jobs report this morning was one. gasoline demand and fears still over some of those supply trouble spots around the world

holding us up. at the same time on the flip side the bears are saying what they see is a stronger dollar. they're seeing a global supply glut right now and weak demand in the second half to take crude oil prices down. what's going to happen? crude is likely to trade in this broader range for quite some time. people are looking at the low 40s saying we could go back up to 50. there's not enough to get us back over that critical mark. meantime, gold as you mentioned, saw some pops and drops, too, but it managed to stay over 1350. it closed at 1358.40. a lot of bulls in the gold trade right now. they say they could see it going over 1400, maybe 1450 in the second half of the year. back to you. >> been talking it up. jacquie, thank you. pops and drops. i like that. i like that. you have dividend rapture today? i have pops and drops. 20 minutes left in the trading session. the question really to be answered, can we close above that previous all-time close for the s&p.

we're about 3.5 points away from it but we'll see. as we near that level, we'll see what's crossing here. what that benchmark could mean to the markets and the economy. mohamed el erian joining kelly. looking forward to that very much. thank you is what we say. but we mean so much more. we mean how can weel we mean what can we do? we mean it's our turn.

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well tcome back. we were just informed 498 were higher, 2 are lower. we've been trying to rack our brains on who was lower. let's follow up. >> interesting. >> constellation brand, darden and palo alto networks. by the way, they are fractionally lower. i might be wrong about the particularers. >> pnw, dri, stz down fractionally. every other stock on the s&p 500 is in positive territory today. thank you, pnw is pinnacle west. let's get to the nasdaq which is outperforming, bertha coombs is there with us. >> stocks like polycom are

moving higher. stocks have surged today. they're going back into those stocks that are more primarily exposed to the u.s. nonetheless, we're also seeing big leadership today coming from the chips sector. not huge volume. average volume, but chips today very strong. very strong for the week. intel one of the drivers. bernstein upgrading intel saying some of the data we've seen on pc's strength should prove well for intel's earnings which are on july 20th. nvidia and applied materials are hitting all-time highs. even though the small caps are really the standout, a number of all-time highs within the nasdaq 100 today, including o'reilly auto motives which continues to power forward and take a look at amazon. amazon a big winner and a big reason why we've seen the big recovery in the nasdaq this week. that's the biggest point impact

of the large cap stocks. also today, interestingly, we're having a pretty good day for social. twitter getting some mileage off of reports that it's in talks with the nba and doing other live streaming. facebook not having a bad day. zynga not having a bad day. candy crush getting crushed by pi picachu. those social games continue to be on fire. every time i go on the subway seems like somebody is playing those. >> no, that's true. >> my adult children have been enjoying pokemon go. it's nintendo stock which is up 10% overnight. >> there you go. >> thanks, bertha. we have less than 15 minutes to go here. watching the s&p like a hawk. 2130 and change is the all-time closing high for the broad index. it's currently at 2127 up about nearly 30 points. 1.4%.

the dow is up 233 points. the nasdaq up 375. when we come back financials are on david dar's mind this week. the focus of his acronym. stay with us as we approach the market close. allianz mohamed el erian will put it all in perspective for us coming up. y drew. ♪ ♪ she wants to change the world with you. ♪ ♪ she can program jet engines to talk and such. ♪ ♪ her biggest weakness is she cares too much. ♪ thank you. my friend really wants a job at ge. mine too.. ♪ i'm a wise elf from a far off shire. ♪ and sanjay patel is who you should hire. ♪ thank you. seriously though, stacy went to a great school and she's really loyal. you should give her a shot. sanjay's a team player and uh..

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we have 11 minutes left. while we were in commercial break it was being pointed out that the market on close orders are to the sell side. $350 million to the sell. that's the imbalance. we'll see if that has an impact on the market. >> we've mentioned, too, with today's rally, almost every s&p sector in the green for the year. the lone exception is financials. >> been a very defensive rally we've seen here in the market. today it's been risk on. we welcome our friend, the independent investment consultant david darsch who has been waiting patiently to come on. how are you? >> nice to see you. >> you have banks on your mind today for obvious reasons. >> the acronym banks, b is the

brexit fallout. it's not done yet. economically for brittain and for europe. we think it will deduct from each of their two growths. it keeps interest rates lower for longer. a, a asia is the currencies. china must weaken their currency. it's down about 3% this year, a little bit less. japan needs to weaken its currency. this is the conundrum for the world. the dollar can't be too strong because it hurts our profits, okay. >> easier said than done for japan. >> n is nonperforming loans. this week's economist magazine which just hit the newstand, the eye tall january job, europe's next crisis. so you want to pay very close attention to what happens in italy. if the authorities do step in and allow italy to bail out the banks, the markets will do well, okay? bank. k is keep calm and carry off. not carry on.

time to be a little closer to shore. the phrase carry on comes from the clipper ship captains. break the mass? the owners of the ship captains don't carry on so much. take a little sail off in some of these groups. telecon utility. this doctrinal feeling that interest rates can stay this low. it's the same as 2007/2008. take those, sail off. s is second half earnings. the third quarter is expected to be up only 1% and the fourth quarter now 7%. we'd like to see that take place.

you want to see it move to positive comparison. >> in your acronym banks raises the issue, if you're warning people about the more popular yields in the second sector, where should they go. are financials at all attractive here. >> it's got no jo. you have biotech stocks with pipe lines selling at 12 times earnings. they're well founded, down 18, 20% this year. i think you can selectively look in the energy sector. look at mass limited compartments. selectively look at real estate

investment trust. >> you missed your calling. you should have been a college professor. >> i was told once i was in an airport in boston, it was a snowstorm. i got up on a chair and said, let's take a train to new york. the people said, what are you a television evangelist? what are you? >> he actually is. >> as a matter of fact. good to see you, david. >> thank you, all. >> another great topic. after the close we'll come back and see if the s&p can close ahead of the all-time high. we have the closing countdown. right after the bell we'll speak with mohamed el erian, the jobs report and what happens with the fed now. stay tuned for all of that coming up.

mohamed el erian. the number is 2130.82. that was set last may a year ago. >> come on, 82. >> we're getting there. we're getting there. look at the week we've had. a lot of the strength has been in the latter part of the week and for the week, the s&p is up almost 1.3%. oil went the other direction. well below $50 a barrel. we're finishing at the lows of the week here with a decline of 7.6% at 45.25. the ten year, you would have thought as we all would have thought with a strong jobs report this morning that yields

would have been rising, but they went down and we're finishing the week in range here at 1.36%. we did hit the 1.31 or thereabouts mid week. it's a low. very low. late in the day here a rally. gain of $5 for the week. up 2.1% on gold. >> late buy program in the s&p. >> late buy program in the s&p art cashen is telling me. what has dropped, bob pisani, is the vix. huge volatility. i'm curious. >> back to pre-brexit low. >> down more than 10%. in fact, much of that decline is today as a matter of fact. >> so everything's gone up today. stocks have gone up. bonds have gone up.

>> a lot has exactly happened here. the job situation is strong. the bears are saying it's a lot of nonsense. no fundamental change. no demand with stocks and bonds. you know what's amazing about this, they're both right. we still get the markets going up and hitting new highs either way. i think we're going to get a dash of cold water next week. >> earnings are coming up. >> brexit, remember that? i think it's going to come back and smack us in the face a little bit. >> you do? >> i've been concerned about it for a couple of weeks. that's where you're going to see the impact. dollar, low rates, not good for stocks overall. we'll see how we get through that. it's been a remarkable week. are we going to make it or not? >> very close, very close. we'll see what happens here.

2130.82. up 31 points right now at 2129.37. that's going to do it for this hour of the "closing bell." we have volunteers of america ringing the bell here. stay tuned. mohamed el erian joins kelly and the gang coming up on the second hour of the "closing bell." have a good weekend, kelly. thank you, phil. welcome to the "closing bell." i'm kelly evans. could be an historic day here. the s&p is within striking distance of closing at a new record high. 2130.81 is the record high. i'm sorry, .82. looking at the index just shy of the 2130 mark. we'll see how it settles. the dow up 264 points today. above 18,000. the nasdaq up 80 points. 4900 points shy of the 5,000

mark. the better than expected jobs report. markets are also brushing off the brexit. brittain's vote to leave the eu. coming up, mohamed el erian from allianz will join us. joining us, cnbc pro columnist mike santoli and evan is here. bill lee is with us from citigroup along with cnbc "fast money" trader, guy adami. mike, a quick word on the impact of what we're seeing here. >> nothing was for sale today. 95% of stocks in the new york stock exchange went up. i think it showed you that people had the residual tension on whether we were going to tip into recession. we got a release of that tension. it mostly was manifested in the stock market. i along with everybody else were surprised the yields didn't lift more. basically people were under exposed to stocks given the fact that one of those big worries was basically swept aside.

>> we'll come back to the lack of action frankly in bond markets. let's get more on this huge move in stocks with bob pasani on the floor to recap things. bob? >> it was quite a remarkable day. it does not look like we're hitting a new high. 2129. we're about a point away from it right now. to a certain extent, it doesn't matter. how often do you see stocks going up. bulls and bears, both had different ways of arguing why we went up. the bulges arguing this is a goldilocks scenario. the fed is still essentially on hold. that's good for stocks. the the u.s. economy is not taking off. the rally is based on supply and demand issues for u.s. stocks as well as u.s. bonds. we have central bankers out buying bonds. not a fundamental rally. the amazing thing is they both

can be right and explain partly why we see the rally today. take a look at the sectors that moved today. this was one of the classic risk bond days. retail materials, industrials and financials and banks doing very, very well. what you want to see is as the new high list expands are big names coming on that haven't been there recently. you see some new names like united parcel services on a new high, general electric. nucor, steel company. vulcan materials, i took the liberty of creating a little list there of what sectors have moved high. that was may 21st of 2015. utilities and telecom, we know what a big mover they have been. unfortunately they don't have a big market cap. you have to go to consumer staples. there's the one that made a big difference. up 12% since may 21st.

the big names, the cloroxs of the world that we've been talking about on a regular basis. also smaller but also important are the consumer discretionary names which include things like home builders and automobile stocks slightly less contribution in the health care group. quite a week. guys, back to you. >> bob, thank you for now. let's flip up to the nasdaq for the big movers there. bertha coombs has the big movers. >> small cap sector. we saw people buying some of the names. largest gainers were deal related. polycom, coupling, mitel decided to call it splits with sears capital giving polycom a better bid, $12 billion. both of them won today at least in terms of their shares. it's really big caps that are the big winners this week. biotechs today were the laggards this week. juno, a company trial for cancer

drug. chip stocks, about 2% this week. semiconductor index is about 2% away. today nvidia, all time high, the video sky works. it's an outbreak. on july 20th. the nasdaq is the high. the nasdaq composite from an all-time high. they're passing highs. amazon, that was one of the big drivers for big caps. nasdaq, amazon at a new all-time high today.

bertha, thank you. >> what do you think? we can talk about maybe what didn't happen. i think that's the underlying story here. the sectors that bob pasani, utilities, telecoms, the big gainers have been kind of following the bond market as yields have gone lower and lower. what i think you're at is a juncture. you have the bond markets basically. rates are going negative. u.s. bond market. 18 trillion dollars. >> the question is you have convergence in the bond market.

the u.s. economy as today's numbers showed, not doing too bad. how long can that dichotomy last? >> i don't know. i believe that dichotomy was going to break. >> should have been at five year lows. >> i've been totally wrong about that. there are huge distortions. you're seeing that in the government markets. >> divergence is in the fact that we still have yields. we are at 1.4% on the ten year and those places with worse growth are at zero. >> let's bring in bill lee here. you've been watching the economic data. would you say that things are bad enough in this country to warrant less than a 1.5% on the ten year? >> what we've done is taken off a lot of down side risk. in that sense we've got a better picture of the u.s. economy than we've had in a while. will the fed see that they have to get the ball rolling again or

are they going to find another excuse? i'm sure they're very good at it. >> guy, you've been calling this right. >> kel, do you shop at five below ever? >> no. that's sort of like a teenage mall retailer? >> you're young. i have the entire brain trust of 5 below here. they're all kelly evans fans. they all say hi. now get to the topic at hand. >> i thought you were making an analogy. >> no, i've got no analogy. i'll give you an analogy. bill parcells say you are what your record says you are. you are 6-10, you want to go onto the super bowl, guess what, you're 6-10. i could tell you 100 different reasons why the stock market should go down. here we are at all-time highs. can't fight it. bond yields absolutely terrify me. evan spoke to it. you would have thought today in terms of a relief rally in the bond market in terms of yields going back up, you would have

seen backup in yield. i think the tlt closed on its highs today. something there is a bit of a disconnect. i'll say this, not to throw cold water on the whole thing, but the russell, iwm is still an 18-month bear channel as is the transports. now if they can get on their horse and start to go, then we're in business here. there are still some warning signs. the nikkei thing goes down. i think the 15,000 give or take seems to be a line in the sand there. so i know we want to get the balloons out. there are a lot of things whistling past the graveyard. >> i get your point. dave rosenberg was saying the household survey was weaker. jpmorgan recession risk is still at 37%. tom porcelli, all we did was mean revert. bill, i was going to go back to you though on this and ask, do you think the federal reserve will look at what's been happening in the bond markets and start to say, you know, if

we're supposed to be watching for imbalances in the financial markets and we see one forming there, are they going to try to prick it, raise rates for that purpose? >> no, they're too afraid to raise rates. they need to carry the bond market with them. if the bond market isn't ready to move, they won't move. they will say we are taking a lot of the down side risks away. the markets haven't reacted because they knew we were there as a put. we were there to protect the markets and supply whatever liquidity they wanted. that's the danger. the markets are so used to the fed being their back stop. they're not looking at the economy. the economy is not doing so well. we have a consumption driven economy. investment isn't doing well at all. that imbalance is something we do worry about. that's what the feds should be worrying about. they're looking at the markets saying what are the markets doing. that's the wrong place to look. >> we were supposed to believe, this is the part i find strange, all along the fed's been saying we're data dependent, we're data dependent, we're data dependent. oh, by the way we're data

dependent. what's been showing up is they're not data dependent. they're depending on the actions of the central bank and the actions of the currency markets and the actions of what's going on in the bond market. they're not making decisions based on data. >> they're not independent. they're event dependent. brexit was a big deal. possibly italy will be a big deal. chair yellen is absolutely adamant about keeping rates low because she wants to absorb more slackment for every job thee creates without slack is a plus column. she's looking for every little excuse she can for as long as possible. that's what we have to look for. on the data and the weeks after going to be strong enough to get the fed convinced it's time to start the normalization ball rolling. >> we're going to hear from the fed. 13 different fed speeches. inflation data, retail sales data. should give a fuller sense. >> i was going to say that

kelly. bill, i was going to say, the burden of proof is very high for the bond market to believe that, in fact, the data trend is strengthening enough. they got it that way because they kind of capitulated after that bad jobs number last month. so it's going to take some time and an accumulation of evidence for them i think to be swayed and try to get this drum beat toward a potential tightening back on track. >> keep in mind that the hearts are on the regional fred presidents. anybody from the board, especially chair yellen, they're looking for all the soft spots. when the hearts are talking they're looking for why we have to get normalization going. that's the kind of context we have to see in the press. >> i'm curious because you have said rates are heading lower here all along the way. what do you make of meanwhile what's happening as evan was saying in the bond proxies in the stock market? you know what i mean? the trading era. the love for these sectors is so enormous, so tremendous. >> i think bill was talking

about it. look, it is a little scary when you have a market that's been led by in large part utilities and telecom. again, you know, i don't want to beat up at&t and verizon, they're great companies. when you have those two stocks for four years prior trading in a narrow range, break out, seemingly no news. nothing fundamentally changed at either one of those companies. to are this em to break out with the significance they have, there's something wrong. xlu trading at valuations that are, in a word, rich. what's funny is g gap, generally accepted accounting principles. the only people that don't accept them are people in the market. they're earning around 23, 24 times next year earnings. that's rich. >> you mentioned next week is earnings. we have earnings coming up. you better hope, in my opinion, forget about eps growth, we know how that conditioning handled.

it's all about revenue growth. you better start seeing it soon. just because it has three letters before it doesn't mean it should be going higher. >> last word, bill? go ahead, bill. do you want to get in there? last word? >> i don't think he hears you, kel. i'm going to give you the last word. i'm going to give you the last word. mike santolli had a great chart. you want to understand what was going on earlier today. he showed the 30 year, 10-year treasury is now yielding 2.1%. you know what the stock market's yielding? >> just about that. a couple of days ago. good that you caught up. >> i did. i finally watched the video. >> i want to say one thing to guy's point though. we've been talking a lot about what's gotten us here in the last year while the market's been basically flat. that's not what's happened and that's not what's going to continue. >> exactly. that's what you said here, are we at that point? thanks, everybody. thanks to bill. i know he can't hear me. guy, we'll let you go, too.

the best to the five below. >> kelly evans says hello to the 5 below. >> there is more to come on "fast money." traders will tell you where to find value in the markets tonight next hour. we have a news alert on another data breach. sue herera. >> omni hotels. it's been a victim of a malware attack that affected some physical point of sale systems on site at certain hotels. so far they have not named those hotels. omni hotels and resorts say they have no indication any other personal information was involved nor were company reservation or select guest membership systems affected. so it looks like it's just the point of sale. that tends to be, although they have not specified this, gift shops, restaurants that are on company property, things like that. if we get more information, we'll pass it along, kel. >> thank you, sue. apparently if it worked at one of the chains it will work at

most of them. that's omni with the data brech. thank you, sue. >> allianz chief economic adviser, mohamed el erian. plus, why the huge rally and safe investments like utilities and telecomes can be a shock in the markets in the near future. definitely stay tuned for that.

welcome back. breaking news on cbs radio. >> cbs radio has filed for an initial public offering in an sec s1 offering. it's an ipo worth up to $100 million. no information on the exchange. they're going to list the company on or the ticker symbol. at this point we know they have filed their s1. cbs will be spinning off its radio division. keep in mind this is something cbs touched on on the last shareholder meeting. we have the offering here. there was talk of cbs looking for strategic options around its radio unit. perhaps an acquisition of some sort didn't potentially work out. now they're looking to the public market to take this entity forward. back to you. >> seema, thank you. we know that unit has been struggling a little bit. it's the oldest part of cbs. >> it sure is. i do think this is a parallel.

they would love to sell it. they're going to do an ipo. if not, the radio industry needs to be mopped up now. you have the biggest one kind of in limbo in private equity. probably has to go through a process kind of like what newspapers have unfortunately. >> not a sexy growth story there. >> in radio? >> i can promise you that. >> if it's streaming, suddenly it's most exciting thing in town. so we'll see how they navigate. >> don't get me started. >> markets rallying today on the back of a strong june jobs report this morning. the s&p 500 closed within a point of its record high. with us now by phone, mohamed el erian chief economic advisor for allianz and dog lover. that's a separate story. the jobs report, what do you make of it? >> it's a remarkable market with the exception of short data treasuries, you made money everywhere. it speaks to what i call the goldilocks jobs report this morning. it was strong enough to give us assurances that we can withstand head winds from europe but it

wasn't too strong and, therefore, doesn't force the fed to do anything soon. >> yeah. that's, i guess, the question but maybe it doesn't force them to do anything soon, but is it logical to keep pricing out no action until 2018 after a number like this? >> no. and you saw some sensitivity in short data treasuries. the big problem, kelly, is that the yield curve right now is controlled by what's happening in europe. it's controlled by the weakening economic prospects there and by the outlook for interest rate cuts by the bank of england and more qe. the yield curve reflects more and more europe than it does what's happening in the u.s. even the short dated treasuries at this point. >> mohamed, it's evan nomar. are we in a bond market bubble globally speaking or is this just a currency war, you know, parading around as a bond market? >> great question, evan.

it's both, and it's a reflection on over reliance on central banks and there's a limit to how long this can go on. you know, if you put down the list of issues that we have created for ourselves, negative interest rates on over 1/3 of global government debt, headwinds to european banks, brexit, governments not able to move on the economy because of political polarization, recreating more and more things, but on the short run we could go even further as long as there's this incredible faith that central banks can do it all. >> mohamed, you kind of touched on it there by saying that there's political contingencies that keep a fiscal response. isn't the global market essentially begging governments to take some kind of fiscal action to issue debt and do something on the fiscal side to help stoke growth? >> yeah, begging is a strong word. i think most people recognize that this path cannot continue, that it's becoming more and more

artificial and that we need an orderly handoff. this is part of that handoff but so are structure reforms, genuine economic growth, dealing with some debt overhangs and much better regional architecture. so what the markets are basically saying is that in the short term we can do the heavy lifting but at some point we're going to have to have an orderly handoff, otherwise we cannot maintain this huge gap between valuations and fundamentals. >> mohamed, it's evan again. where do you see the biggest distortions right now? assuming that the price of money or the cost of capitol has been so toyed with by the central banks, there have to be distortions in the market. where do you think those are showing up nowadays? >> well, it depends where you sit. if you're sitting in japan, your biggest distortion is a currency that's way too strong for an economy. sitting in europe the biggest distortion are negative interest rates that are eating away at the integrity of the financial

system. if you're sitting in the u.s. your biggest distortion is this love affair with liquidity. we have basically assumed that liquidity will be there when we collectively change our minds, but as we saw from the temper tantrum from january, february, any hint that the collective card i'm exchanging results in quite big market moves. depending where you sit, the distortion is there. >> yeah. and that's where we'll see if the risks in these markets come to the fore again. thanks for joining us on this friday afternoon. >> thank you. >> markets closing near all-time highs today just about a point short. there's one indicator flashing a big warning sign to investors. that's next. later jim and tom tell us where they're putting money to work. "closing bell" is back in a moment. [ beep ] but you'll be glad to see it here. fidelity -- whe smarter investors will always be.

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welcome back. despite today's big rally, some people say this market doesn't feel like one. the fact that it is driven by so-called safe investments might itself be a warning. eric is looking at the trend lines. he has more. >> that's right, kelly. if you look at a couple of interesting factors, it's the safe defensive sectors like utilities, consumer staples. they're out performing the typical cyclical sectors that we saw due out last year. that's one thing to look out for. that's what happened in 2007. we got to a high in the markets. then everything went down from there. another thing to look at, low beta versus high beta. right now the best performing

stocks are the low beta stocks. the high beta stocks, they're not doing really that well at all. then the third thing to look out for is how are stocks doing relative to where they are versus their 52-week high. so last year if you were close to your 52-week high, if you were a momentum stock, that's who went up. this year it's the furthest, the weakest companies. the stocks that are so far away from the 52-week high. those are the stocks doing the best. last year they did the worse. you're seeing an investor base moving from the aggressive stocks to the safe defensive stocks. it's a different kind of a high than it was last year. kelly? >> it also, mike, makes me wonder, a bull market because we're now so many years into one, is this typically what happens? is this unusual? because as the journal noted the ten year treasury -- >> this is very atypical. going 14 months, let's say we get a few more points in the s&p 500, we get a new high, still a bull market going 14 months

between highs when you didn't have a 20% decline of revenue, that's unusual. but i can actually paint a picture of this saying, look, you had five straight quarters. during that period when you had cyclical earnings go down, you had the boring sectors hold the market up and because you had no recession you had no bear market. so that's kind of the way you square, i think, these two stories. >> the hard thing to imagine is you're at the tail end of a 35-year bull market in government treasuries. >> sure. >> and it's hard -- it's hard to see these stocks that eric was just talking about going much higher. now you can always say they can always go higher. i mean, that's the thing about bond yields. who knew bond yields would reach all-time lows in the middle of a decent although not stellar u.s. economy? it can always go further, but if you really believe that this bull market can take a next leg higher, it can't be on the back of the utilities. i believe that all along this year.

if you don't see financials make a serious contribution to this, it's hard to see the stock market going up another 5 to 10%. >> i don't think it has to be financials. basically we're in the quarter right now when earnings should be going higher. it will be driven by energy, lesser degree industrials. yes, financials hopefully aren't left behind entirely. i don't think it's the lynchpin. >> the correlation is interesting, too, eric. last time we were talking it was all about oil. all about everything that was happening at 2:30 every day. now i almost wonder if the correlations would be what's happening with bond markets or with these so-called safe stocks. >> that's the thing. oil, then it was fang. like what evan said, do you really think utilities is what's going to move the market forward? that's where the biggest inflows are right now is in the utility sector more than anything else. it's a different high than a 2015 high. >> and the flows. >> waiting for the next rotation. i think that's the way you'd look at it. >> the weird thing is the thing

we've not talked about, that's why the pe started to look high, valuation has almost nothing to do with what's going on right now. traditional measures and parameters of valuation, bond markets versus stock markets, it's out the window. right now utilities going higher because they're going higher and that's where people are putting the money. >> actually makes perfect sense if you value them as corporate bonds which is how they're being treated. >> everything is upside down. eric, thank you for joining us there. >> of course. >> walking us through the so-called safe stocks. time for a cnbc news update. sue herera. >> hi, kelly. thousands of people gathering at a square in downtown dallas to show their unity following the dallas sniper attack that killed five police officers. dallas mayor mike rawlings spoke passionately about race, respect for law enforcement and bringing the country together after a tragedy. >> we will not shy away from the very real fact that we as a city, as a state, as a nation

are struggling with racial issues. they continue to divide us. yes, it's that word race and we've got to attack it head on. >> the state department says the u.s. has expelled two russian officials in response to an attack on american diplomat by a russian policeman in mogs could you last month. it called the attack unprovoked. the russians say that diplomat was a cia agent who refused to provide identification. the government investigating complaints from harley-davidson riders who say their motorcycle brakes failed without warning. the probe coverings 430,000 motorcycles made between 2009 and 2011. get your tickets here, the mega millions jackpot has increased to $540 million. tonight's drawing will be the 35th since mega millions had a winner. the longest rollover stretch in the game's history. if you're playing, good luck. >> oh, man. i have a feeling this is going to be the one, sue, if no one

wins it. it's going to be all we hear about. >> i know. absolutely. our little newsroom pod bout together a group of tickets. you, too, go buy a ticket. >> not happening. >> oh, geez. >> unless my grandfather goes. i'll go with him. anyway, sue, have a great weekend. a big rally on wall street pushing the s&p 500 near record highs. up next, two big money managers tell us whether they believe in this rally and how they're investing in this environment. plus, dow component disney on making a move to ease investor worries over cord cutting measures. a look at the possible plan to take espn directly to the consumer but it may not include those high profile events you're looking for. start it from the beginning (jon bon jovi) with directv, you can. you see, we've got the power to turn back time les start over, let's rewi d let's go bk and not quit the gym and have a chance say goodbye to grampy tim

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welcome back. we almost did it. the s&p closing less than a point away from the record close. 21.29. the dow was up 250. the nasdaq was up about 80 and that's, you know, again after some strong jobs numbers this morning. since the s&p last closed at a record in may of 2015, utilities are the best performing sector, very odd, followed by telecom,

staples, discretionaries. industrials up. energy by far the worst performing sector. down 13% there followed by materials, financials, health care and tech which is fractionally lower. let's get more on today's big rally and whether it will hold and what kind of rotation is maybe underway. tom lee is with us along with jim paulsen. tom, if you had to make a bet on where the next leg of this market is going, i mean, do you think it can possibly still be led by utilities and telecom or do you think something else is going to come to the fore here? >> kelly, i think what's really important for the viewers to realize, the market's starting to break out at a time when i think earnings have actually finally reached the point where we're going to see positive revisions. revisions in q2 are the highest ratio in five years. that means you want to be looking at where margins are

turning. that's the material space, that's energy, it's industrials, but it's also groups like walmart, hyper markets like walmart and some of the pharma. there's a very large group of stocks and sectors still viable here because of a turn in earnings. >> what is that turn you're referring to? >> well, there's a couple of things like tailwinds that are structurally in place. first of all, the ism exports order which is a really good correlation to earnings revision and sales growth for the s&p has been above 50 for four months now. four of the four times that it's moved above 50, it was below 50 for all of last year, four times it did it in the last four years, s&p revenues accelerated, s&p revenues accelerated 800 basis points. we're really looking for a turn in earnings coming with really the second half of this year. >> jim, you're also sanguine on these markets. can it possibly be utilities and telecom? >> yeah, i don't -- i don't

think so, kelly. i agree quite a bit with tom. i think the big thing here in the room is economic momentum is returning after a two-year hiatus. that's going to radically up shift sentiment among investors. it's no surprise that tonight the citigroup economic surprise index of the united states finally made it back above zero and is sitting near its highest level that it's been at since the start of 2015. we spent most of that time with negative economic surprises. i think that's starting to turn a corner. so i think we're going to have a pretty big cascade of change in the rest of this bull market. up until now across the globe it's been led by three main themes, large cap, united states and consumer oriented stocks. i think going forward all three of those leaderships are in the process of changing. i think we're going to be led more by small and midcap stocks. i think we're going to be led more by international, both

emerging and international markets more so than the united states. i think we're going to be led more by the industrial, producer, capital goods sectors than we are by the consumer sectors. >> tom, you know, you're looking for perhaps another leg up from here. we've obviously crossed and recrossed this level at the s&p 500 at 2100 dozens of times. if the fundamental momentum is returning, i think the question is ultimately what kind of valuation can this market get to? we didn't really repair valuation in this period of sideways action. what's the right price to pay for stocks when you have corporate bonds yielding 3% or so? >> michael, this is a question that comes up in every meeting we do with our clients. a couple of things i want to point out. utilities and staples which traded 20 times, that multiple is stuck like velcro. i think investors have to assume it's pinned because of a search for carry and the income funds buying these stocks. the rest of the market's trading around 14 times. now i've been in this business for 25 years. you know, in the '90s a 10%

grower is a 20 multiple stock or 25 times so i think we've in the last few years gotten accustomed to any time the pe is above 15, that's where they are. it rerates towards staples and utilities. if you get 16 times forward, that's 2300. >> food for thought over the weekend. tom, jim, thank you so much for joining us this afternoon. >> thanks for having us. >> thank you. >> appreciate it on a big day for the markets. disney shares are down more than 18% since first reporting subscriber losses at espn last august. the company's now taking a baby step towards fighting the cord cutting trend. coming up, details about espn's first move towards coming a direct to consumer service. plus, presumptive republican presidential nominee donald trump promising to bring manufacturing back to the u.s. we'll hear from somebody who says those jobs will just be given to robots, not to people. that's later on the "closing bell." meritrade,

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welcome back. you might soon be able to watch espn directly online instead of having to pay for it through a cable provider. a new report from the information says disney sports network is planning to unveil a

package of programming that will offer direct to the consumer. you won't be seeing professional basketball or football in the package. it will be more niche leagues other than what they air on television. julia boorstin sat down with casey wasserman and his thoughts going direct to the consumer. >> no question they can start in certain areas, going direct to consumers whether it's a soccer-specific product, making it up. very specific product around a specific set of sports or rights as opposed to a broad offering that looks a whole lot like espn today. >> let's get more on this now from the reporter behind the article at the information. he joins us now from the lovely sun valley. amir, great to see you. are we talking correricket here? what are they talking about? >> espn has to skate to the puck they're going to. that's a pun i use because of a sports network.

we're talking about leagues and events that are not the head content, not the super expensive stuff that you see on espn on your tv. this is imperative. core cutting is real. they have to go and be where people are watching content. they have to go online and so they're doing that in a number of ways. they're going to introduce this package of sports that's a bit more niche of stuff you're not seeing already. they're going to be working with other web providers like youtube in being part of their live tv packages. they're going to go to wholesaling espn. they don't want to get the operators and offer the content directly by espn. it will be a long process but it will happen. >> it's interesting but it will happen. they have to find something that will appeal to let's call it the millennial streamer that's not going to be a problem for them. they're offering it that way.

what do you think that's going to look like? >> if you did a grab bag of sports, actual games that sort of goes on espn2, for example, you offer that in some sort of a package, espn2 only gets less than $1 a month in affiliate fees. >> wow. >> they're not so reliant on the second tier stuff. that's why you can view this more as a products extension as opposed to cannibalizing yourself when you have 90 million subs within the bundle. at this point they have the luxury to experfect i am. >> that is a cheap option. they're looking at it like a toe in the water. don't know how deep the market's going to be for high school lacrosse. >> you know, i was going to ask you -- >> i made a joke about your old sport. >> dave everett would be paying 15, 20 bucks a month to watch high school lacrosse, amir? is this where this is headed? no? >> no. no. so the math doesn't work right

now. if espn wanted to take its business to the web it would have to charge something like $25 a person just for espn that one channel. that's not going to work. that's why they have to do this piecemeal. this is a very, very long process. frankly, espn hopes that they really don't have to go this route. they want to preserve the status quo as much as anyone. cord cutting is real. this he have to address that. this is one of the ways they're going to go about it. >> it is a delicate and dicey one for them. great to see you. joining us from sun valley. >> your dad's in the market for a high school lacrosse -- >> by the way, there are whole youtube channels that are about that. really professional ones. not just sort of grab bags. >> that, again, you mentioned the youtube partnership. we're going to see it. >> espn is going to put out of business all of the high school cub reporters who -- >> no way. >> -- sharpened their teeth. >> tickling decline. >> starring kelly evans. strong jobs number this morning is sending stocks near record highs.

up next we'll hear from someone who says the unemployment rate could hit as high as 25% in the next 10 to 15 years as robots take more jobs. he'll explain right after the break.

welcome back p. got a pretty good jobs report today, but long view suggests a lot of jobs could be lost as artificial intelligence proceeds. next guest predicts 20 to 25% unemployment in the next 15 years. joining us is brett king, author of augmented, life in the smart lane. it's an alarming number. trying to make foint about how they, hs really going to be disruptive or do you really

think that's where unemployment is going? 80% of viewers jobs is based on service sector. it doesn't take much to do the math. 2 million you know, trans continental truck drivers, service workers in legal finance, accounting. you know, all of these jobs are potentially risk for automation. either working less hours or have less people working. >> i think we're headed to four-day workweek. i think it was ricardo line, the candle makers would have us blot out the sun. there's always the sense of fear about where these jobs are going to come from. >> in the last 250 year, we've seen technology destruct jobs, but it's always created new jobs, so, mckenzie did a report for the internet. job lost to the internet, 2.6 new jobs created. but with artificial intelligence, it's the first time we're disrupting humans in

respect to process and advance where we've had humans advise. >> is ai that smart? >> not right now. obviously, we've been talking about tesla and the self-driving car incident, but in ten or 15 years, then it will be extremely confident at doing that. and we'll be able to replace humans, so right now, we already have computers, machine intelligences that are better at humans in a range of activities. diagnosing cancer, ibm watson. idle verification. it's just a matter of this technology maturing. >> i was going to say you know the standard pushback is tremendous percentage of everybody used to be in agriculture. that obviously has adjusted downward. also, so many service positions now, they're not actually filling true needs. we create new wants as we go along and personal delivery of those things i think. potentially could rise nup the future. >> there's the creative elements

of design. we're going to have technology integrating into our live in every as a pecht of our wold, so we have to reintegrate or redesign those experiences for that technology basis. technology related experiences. there's potential there. >> did you point to certain industries or sectors or businesses this wr this transformation is already taking place? not taking about amazon, but where there's been a fundamental shift. >> foxcon, supplier for iphone and apple is is retooling significantly around robotics. when trump says he's going to bring apple back, they'd have to do what foxcon is doing. put ai and robots in to m manufacture those jobs. >> we just showed the best part. chances of being replaced by automation. fashion models.

okay. economists, 43% chance. again, that might only be improvement. judges, no. >> what about financial news commentators? >> fashion models -- >> bank teller, financial advisers. primary by because machines are going to be better at giving that advice. in the space you guys are in, then there's going to be ininterpreter ration of the numbers, but in pure number crunching capability, humans won't be able to compete. >> i take the other side. i love it. thank you so much for joining us. the s&p closeing near a record high. next week, we're going get result frs the big banks including jpmorgan, wells fargo and citigroup.

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fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry anexit points and can help protect your potential profits. fidelity -- where smarter inve. welcome back. there is a ton on tap next week. there's what is it amazon's prime day. we're going to get inflation reports. retail sales. perhaps most importantly, earnings. alcoa monday. later in the week, results from wells fargo, jpmorgan and citi. financials, the only sector

still in the red this year. >> popped today, 2% each of them because you did not have treasury yields go up. europe p banks were strong. you had some talk about stopping italian banks and a glimmer of hope that fwrout is going to get those yields higher down the road. >> i wonder if "the wall street journal's" front page article, they're keeping mortgage yields higher than the drop in interest rates. >> talked about it last week. which is amazing. which is you know, mike and i were talking about this earlier, the transmission mechanisms for cheap or easy money doents work in europe. don't work in japan. they do in the u.s. so what's going to be interesting to see is if the banks decide to pass on any of these benefits to us. the working men and women of america. >> describing yourself as the working. >> i still want to refinance my mortgage at a cheaper rate. >> i don't think you're to be replaced by the robot. >> unlikely. >> i'm going to be looking at

inflation and wages from here on end. >> absolutely. probably the single most important day the points. thank you again this hour. have a great weekend, everybody and "fast money" begins right now. breaking news. the bulls are running all ore the world. in spain and on wall street. stocks just points away from record highs. tonight is about one thing and one thing only. your money and what to do with it now on the heels of this is torque day in the markets and what's confusing a lot of people. stocks are near all time highs. bonds are near all time highs and gold miners are rallying. what is going on with this market and where can you make money? >>. >> everything with the symbol in front f it is going higher. my big thing has been i think yields are going lore. the mistake i've made is i thought that meant the stock market almost by definition had to go lower. that's