him for confirmation >> they may have more in common with north korea than they do on trade. obviously the japanese rightly are very, very concerned about a nuclearized north korea. obviously already is a nuclearized north korea. but as i think michelle you were saying yesterday, virtually every one of the missiles fired has gone over japanese territory. >> all right thanks for watching "power lunch. >> "closing bell" starts right now. hi, everybody. this is "the closing bell" at the new york stock exchange. i'm kelly evans along with scott wapner. >> good to be here thanks so much we are welcoming you to the final hour of trading right now, but are we going back right now to mar-a-lago and the president? all right. there's no q&a there, but you heard the president speaking there at that working lunch with the japanese prime minister shinzo abe at mar-a-lago among the things front and

center, trade is at the top of the list the president saying he hopes to shrink the trade deficit with japan. let's go back to the president >> -- and i don't think he'll let us down again. so let's see what happens. if you remember, he voted for health care. and he did us a big favor. it was somebody else that voted against it that hurt us. so i have a lot of confidence in rand, but i also have a great deal of confidence in mike pompeo i think mike pompeo will go down as one of the great secretary of states by the way, he just left north korea and had a great meeting with kim jong-un got along with him really well, really great and he's that kind of a guy. he's very smart, but he gets along with people. so i think that mike will be in good shape we'll see what happens you know, a lot of people are predicting other things. but i have a feeling it's going to work out very well.

i think our country really needs him. he's going to be a great leader. thank you very much. thank you very much. >> president trump expressing his support for mike pompeo, the current cia director who has been nominated for secretary of state, of course and now we've just learned has met with north korean leader kim jong-un just in the last couple of weeks and faces the confirmation which is yet to happen eamon javers is standing by with more on the remarks from that meeting where he is sitting down with the japanese prime minister >> reporter: one thing that strikes me is that the white house is making a full court press here on mike pompeo, the cia director, to be the secretary of state the white house held a background call here for the reporters traveling with the president to make the case that pompeo was qualified to be the secretary of state and you think at least part of the president's motivation here in putting out the news that

pompeo had been to north korea to meet with kim jong-un was to show pompeo in the statesmanship light, not just cia director directing clandestine operations, but also a diplomat traveling the world and talking to the highest level diplomatic contacts the united states government has sort of a twofer there the background here is very much about this president trying to reset what he sees as an unfair trade relationship with the japanese government saying right there to shinzo abe directly across the table from him that he wants to rebalance that relationship, praising the japanese for purchasing american products and prodding them to do even more. so we'll see what the japanese offer there. we know that the japanese are looking for at least some concessions from the u.s. side, possibly including exemptions to tariffs that the u.s. government has been considering over the past several weeks now that's one of the items on the agenda here for these talks. we'll see if the japanese emerge successful on that and if they

offer the president anything in terms of that trade rebalancing that he's pushing them so aggressively here for today. >> thank you very much shoutouts as well to our former colleague larry kudlow new national security adviser john bolton as well at mar-a-lago where that working lunch continues as we speak. let's turn now to goldman sachs and wilfred frost's interview today with ceo and chairman lloyd blankfein >> thanks very much. coming into this interview this morning, i think the biggest questions were about goldman sachs' concession plan lloyd blankfein did say he expected david sullivan to succeed him. >> david is the guy who's left and i haven't announced anything about my own timing, but i've been doing this job for, you know, quite a while. so it's not crazy that people speculate about this. >> what's the biggest factor on timing sit you need to see more from david or you have more you want to do yourself

>> i haven't -- i think there's a kind of not a question of seeing more, but i think that there's a culturalization. his experience and background, his job up to the point where he was coo for a year never surveyed the entire firm and so he ran investment banking and then became coo. there's a lot of complexity to our sales and trading businesses, our investing businesses, our activities overseas so i think it's been a -- i think it's good for him to be the kind of ceo in waiting, if you will >> there on succession now, this is the u.s./china business summit hosted by goldman sachs. and blankfein expressed how important it was that trade relations do recover, but he was optimistic that they would >> well, it has to recover

we're the two biggest economies in the world there's no path forward if we disagree or disagreeable with each other over the long-term. we need to work things out and i understand what's trying to be accomplished here. we say, guess what there's been a lot of time you have developed your economy is virtually the size of our economy by some measures a new day has dawned let's get with it. this is what we're talking about. and i think if that's what it's all about, we should get to the right place. my optimism is premised on the idea that a real aggressive, mean spirited trade war is so bad and the necessity and the advantages that come from trade back and forth is so good, it'd be a very farfetched thing to not get there when we kind of agree mostly on the facts. >> now, of course, goldman reported earnings yesterday where trading was impressive in

part because volatility has risen. i asked whether that could continue for the rest of the year >> conditions where interest rates are zero, yield curves are flat there's no risk premium. central banks all around the world are buying all the risky assets which then therefore put a damper on volatility and the opportunities to perform that's not a natural state we have not reversed all of that, but we're walking that back and walking to. so at the first indications of a withdrawal from what is an unnatural state, guess what. the market becomes a bit more volatility people get compensated for the risk they're taking. our clients are doing better and we're doing better with them >> lloyd blankfein there goldman sachs shares up about 0.5% today guys >> wilf, i was struck by the fact that when you asked him about the succession plans, he said, well, i have had four coos now. i mean, that was such a -- is it

to suggest, you know, they've come and they've gone. and his whole -- to me it felt like he was kind of pushing back and almost trying to put mr. solomon in his place a bit or put the perception that he's on his way out. what do you think? >> i think that particular comment was tongue in cheek. but the fact he did say, look, it's not about david necessarily getting more experience. but it is perhaps just getting a fuller feel for all of the businesses he's got to clear background and debt and capital markets but it's fair to say that most of his background is in investment banking clearly there are significant other areas of the business. not just trading which is often to focus on. but the new areas as well like consumer banking that's why i think the change isn't happening right away >> he also sort of suggested what others have been talking about, wilfred we've been in such a sanguine environment for so many years now because of the central bank

intrusion, if you will, whatever you want to call it. the activity of the central banks around the world and now with the unwind of that along with all these other factors, it's not a surprise that there is this level of volatility the mere question is how long it ends up lasting. >> you're absolutely right i'd say one of the really interesting points about that extended answer was the fact that he said, look we did bounce back this quarter with our earnings, things like trading as we've already touched on but he said, look. that wasn't a top environment for goldman sachs. it might not even have been a top quartile environment for them but it's not the best we can do. so again, i think there was a hint there that he thinks there's steady improvement still to come from goldman sachs just remember yesterday we know they had a big beat on the eps line the shares traded down

interesting to see today even though some of the bank stocks are down today goldman sachs is up. i think he struck a relatively optimistic tone about the year ahead. >> this interview is at 8:30 you could have got here by 3:00. i think you could have been on a plane, gotten back down here i don't know where your priorities are >> you can't complain. you've got mr. wapner there. >> yeah. i'm just saying. >> i thought that was a back handed diss. >> she is complaining a little bit there. i think it was >> don't try to change -- don't shift the focus here, wilf >> all right all right. >> abandon me. >> safe travels. >> see you tomorrow. turning now to the broader markets, stocks taking a move today. where has all the volume gone? bob pisani joining us now with more on that story >> and great stuff from blankfein on volatility. good points here what we're not having is a lot of volume. look how the vix has exploded

this year. all of a sudden we go up to 15 now it's come back down a little bit. the question is, why aren't we getting any volume at the same time sell side traders are complaining. it's been going on for awhile but there are a number of issues going on here. number one more risk means lower volume yes you get initial volume, but then they pull back. you also have less leverage. generally that translates into lower volume then we have longer term issues with the market. we've seen it shift to passive investing. another long-term factor, no stock splits let me show you some of these stupidly high priced stocks we have up there. $1500 for amazon $1,000 for alphabet. autozone $600. figure out what this means it means there's less value overall to get the same dollar amount here. let me show you something on amazon three years ago, amazon was

what $300 put up a chart on amazon here. look how this has exploded in the last three to five years that's an important thing because when you talk about the dollar volume that you have to buy on a daily basis, it changes. take a look. the daily volume in amazon, it's about 6 million shares i'm rounding off here. if amazon was a normal price stock in the s&p 500 to get the same dollar volume every day, you'd have to trade 130 million shares that's an enormous difference. 6 million versus 130 million i'm talking about the same dollar volume. if you had a normal market where people started splitting their stock a little bit more, you'd definitely get higher volume overall. so my sense of this worry, yes, it's a big problem for my sell side friends who are miserable and unhappy about the crummy volume but the dollar volume traded has been near a record high. stock prices are near a record high shares are high priced right now. and i think that goes a long, long way for accounting for this problem with the individual market and by the way, this all started with warren buffett.

remember berkshire he was the first guy who said i don't need to split the stock and i don't understand why people need to do that and we're essentially living with the legacy of that. >> we are, bob it's a great point thank you so much. let's bring in mike santoli along with ken calipari. kenny, i'm glad bob made this point. we talk about how much volumes are down and what that means in dollar terms, is everything kind of normal or does it matter that those prices are so high and that the share -- >> no. i think there's a couple of reasons for that i think a lot of the issue about companies deciding not to split stocks anymore really go back to when the whole high frequency thing started and there was all that issue about who these people were and they're getting in the middle of it and creating noise. those high frequency guys aren't going to play in it because it's

more difficult quite honestly on the one hand, they have succeeded in that because those are high priced. >> it's also a sign of market health the key point here is are these symptoms of a market that is sick or a market that's actually functioning? >> what it does tell you -- we should look at the other direction. there's no logical reason to measure shares it's based on how brokers can be paid that's the whole point also the rationale for splitting your stock was make it more affordable to own at least a hundred shares now every trade no matter how big is a fixed brokerage fee i don't think there's much to be said about the -- however, in the last couple of weeks, volumes are down no matter how you measure it >> maybe there haven't been as many at least in the last few days algo-inducing headlines which cause obviously an uptick in volatility and volume there hasn't been much of that

>> there hasn't. yesterday when we broke through that final level of resistance at 2699 which was that last level, now we're up above it it did then right away you could feel that surge. the minute we went up and through. you could feel the computers heat up once again now we're on the other side of resistance you've got the sell side that backs away >> let me jump in here for a minute we've got breaking news on the fed. let's get to steve leisman >> william dudley speaking at lehman college in new york says gradual rate hikes are appropriate and it's important to get policy back to neutral. he put neutral at 3% where he did an interview i did with him on monday. so he says there's still some distance to go before policy gets tight so right now he wants to get back to neutral. not tight, but he says we got to get to around 3% he's not concerned with the slowdown of consumer spending this year. he says this doesn't change his outlook at all and says the labor market may have more slack in it that is indicated by the 4.1%

unemployment rate. something new i've not heard from, he suggests eventually the federal reserve may want to consider an inflation range up to 2.5% rather than a single number they should only get to that range after they hit the 2% goal this time. otherwise it's seen like moving the goal posts get to 2% and then go to a range where the fed is not necessarily missing its target all the time, kelly. >> yeah. range makes sense. steve, thank you very much guys, what do you think the significance of him saying he wants to get to that 3% neutral rate even as we talk about some of the -- there's very little difference between these spreads right now. >> but he's not wrong. 3% is really normal. right? the problem is we've had near 0% for a dozen years that 3% now seems high when in fact it's really back to normal. so what he said is perfectly okay i mean, it's actually the right thing to say and so the market should not be surprised and the market didn't react to that because the market expects that >> i agree

although the market thinks that neutral like the final terminal rate for short-term is probably under 3% right now >> they don't agree with him on that >> that may be aggressive. it also says they need to tune down on the way. >> steve are you still there >> yeah. it's important to talk about how radical it's been and how that's been for markets for such a long time they talked about being accommodative. we're accommodative beyond what you think. and now just beginning in the last minutes and a little bit before that and now dudley you're talking about neutral and what the market did today. it's off a little bit. but all this talk about neutral is normalizing in a way that was unthinkable even a year ago i think. >> i agree with you. i agree with you but i think it's a different time today than it was a year ago. i think the market is getting a little bit more comfortable with what they really think neutral should be. >> before we go, steve, what do you make of the fact that the

market doesn't seem to agree with dudley on that 3% number here they seem to be below that >> that is true. but there's a saying all good things in all good time. right? in order for the fed to hike that much, it has to do a quarter, a quarter, a quarter, a quarter. so the market and fed have time to come together there were times when the market just kind of laughed at the fed and how much it would do and last year was the first year that the fed did as much as it forecast this could be another year they do that and then we'll have a conversation after another two or maybe three hikes this year >> i still think i'll believe it when i see it fed. some people say 3%, some say 4%. not really it could be a one off. >> they did 3% last year they put one in the bucket this year the market is 80% on the second one. >> let's see what happens. >> it's not like everybody who's

been speaking out is gung ho to do what the market expects that's my point. >> and i will say, mike's comment about them being less data dependent is accurate, but it doesn't mean they're not data dependent. these inflation numbers don't tick up. if they go the other way, you could see a fed that goes the other way. >> all right got to go. thank you, guys very much. 40 minutes to go as mentioned. dow fluctuating here the dow is the underperformer by far. ibm not helping. it's lowest in years right now nasdaq up 0.5% so is the russell. "the closing bell" is just getting started. >> next up, newfound websites for sharing your information wait until you see what happens when you go into a sports arena. this is going to absolute shock you. plus data partners at kensho say

is likely to happen to big names reporting after the bell today we'll zero in on american express, alcoa, and more this is "the closing bell" on cnbc live from the new york stock exchange we're back in two mitenus. . ste. your testimony will save lives. mr. stevens? this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible. [hero] i'll take my chances.

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welcome back to "the closing bell." i'm phil lebeau. we have more with what's going on with tesla and a report that the california -- state of california safety and health administration is looking into whether or not tesla is underreporting work place injuries and illnesses osha saying it takes seriously reports of workplace hazards and alleges of employers' underreporting recordable work related injuries and illnesses on the log 300 that's what companies are supposed to keep a record of all of this comes just a couple of days after reveal an investigative piece saying tesla was, in fact, underreporting workplace injuries so, guys, this is yet another headline headache for tesla as they continue to look into whether or not this is a safe

workplace at its fremont plant back to you. >> and yet shares are higher by almost 2% phil, thank you very much. >> there you go. >> you know the exact point i'm making phil lebeau in chicago meantime, shares of facebook are falling lower today as the fallout from the cambridge analytica data scandal laying out new changes to comply with stricter european privacy laws and a second cambridge analytica whistle-blower said more users were likely affected than estimates suggest. >> if you think you can protect your data by deleting your presence, think again. how you're being tracked now just when you walk inside of a stadium. >> it's all about that four letter word, data. just a foe of your face can be worth a lot of money technology is making this easier than ever. fan cam started as a fan engagement tool helping people find themselves at games and tag their pictures

but that morphed into selling data to teams based on what's in those photos >> gender of their fans, the age of their fans. how different days of the week or start times affect those numbers. and then being able to go back and say, how do we optimize and create a better fan experience that's what we're all about right now on the data side it's about being problem solvers. >> the team who is buy the data can use it for a lot of purposes they can prove to sponsors who exactly is coming to games it's a way of charging higher ad rates. teams can use demographic info to fine tune the days. even where to send ushers during a game a team might know on tuesday nights it gets more young women to attend. that could mean different ads and music on that night. of course the high level of detail in the photos may cause people to be wary of privacy but this data is not being used

to track specific people it's used for trends also your ticket has a disclaimer saying you're in a public place and your photo can be taken and used. if you're going to call in sick, the game might not be the best place to hide. if you want, i can show you how it works >> it's crazy. i mean, i don't know -- scott. i feel like you've been in more sporting events than i have. but does the idea these cameras can zoom in on you and make the information possible bother you? >> i didn't know this was taking place. i'm wondering when this shooting starts and how it stops and fans have no idea is this just going on repeatedly from the moment you walk in the door >> yeah. >> until the minute it's cleared? >> let me show you how it works. this is a broncos fan cam. you can see this photo, this is around the national anthem time. you're going to see people with their hands over their heart doing the national anthem.

this inoccuous photo looks fine until you zoom in. you see people now look how close i can get look howhigh definition that photo is but those guys are sitting up front. you think all right if i'm sitting way in the upper deck. that's not as big of a deal. let me go to the upper deck. let me go to the guy in the last row of section 510 there he is. so there's no hiding at a game like this. and we've got data from twins, all kinds of -- in all the leagues, right so hockey, football, baseball, basketball it's all there and part of this thing, you can see on the website here. it says find yourself for a chance to win the bud light sweepstakes. >> that's exactly -- eric, that's what i -- i look at this and on the one hand i'm thinking any concert and ticketed event

you go to. my face, i'm going to be part of that there might be people who can't wait to get on instagram saying this was me at the game last night or right now as the case may be >> if you look back now, you can see all these broncos logos in the background those are all the people that tagged themselves. so a lot of people, they want to be in the photo. they want to upload it it's a fan engagement tool it's interesting to see how close they can get you to answer your question, they're taking a photo every minute throughout the game. >> if you don't want your photo taken in this day and age, don't go out in public you go to times square in new york city and whether it's the cameras by the police department or whatever cameras wherever they're hanging -- >> but this shouldn't be china where it's a complete surveillance state if you're getting a ticket to an event like this, maybe you eventually have the understanding of you're agreeing to give up your identity for that really if i'm walking around any given street now >> i think it's the new reality of how we live

>> yeah. >> how we live and also by the way, the disclaimer on the back of the ticket is written in such fine, fine print you need like the hubble telescope to be able to read it. it's virtually impossible. i guarantee you nobody had any idea what it says. >> and these companies don't seem shy about it. they seem proud of the technology >> it's your favorite teams. they're the ones buying the information, the data and they're using that to sell to sponsors like bud light, for example. >> yeah. and the ever more targeted >> customized fan experience, kelly. that's what this is all about. >> yeah. the music between innings and all that scary. thanks, eric eric chemi back at headquarters. up first is best buy today that retailer is teaming up with amazon to sell tvs powered by the amazon fire system best buy shares 3.5% on this

news take a look at the impact on roku which is down nearly 11% on the perception this undermines their market >> yet roku was up the same amount yesterday seriously. you want to talk about a volatile stock take the dramamine before you take this. >> it's quite interesting to me especially because best buy is cited as a amazon proof kind of name >> the way that story has a narrative changing over the last few years, right for the showroom from amazon to the partnership with amazon. if anybody was going to get amazoned, it was going to be best buy it's been a great performing to k. >> if you can't beat them, join them another stock to watch is ebay morgan stanley giving the market place a double upgrade to overweight it's not often you see a double upgrade especially where a guy or gal hates it and now loves

it >> and a platform like ebay, we don't talk a lot about it in this day and age but i understand if their point is the advertising load is there. and if they're looking for any other place to go, if there's any pushback on the fang names we've been talking about all right. let's get a check of the markets here we are halfway through the program. 3:30 on the east coast dow jones industrial average, it's a muted day for stocks. dow is down about 12 points. s&p up 6 the dow clearly is being hurt by ibm. there's the nasdaq up 25 points and the russell 2000 small caps performing decent today. nothing to sneeze at >> time now for a cnbc news update let's get to sue herrera >> thank you here's what's happening at this hour, everyone the united states is hoping to reach a deal on nafta with mexico and canada over the next three weeks. congressional aides and industry executives who were briefed by the trump administration say there is a targeted timeline

kennebunktport residents are remembering barbara bush today that is the area in maine where the bush family spent its summers. mrs. bush died yesterday at the age of 92. the funeral will be held in texas on saturday. a search is underway for 640 pounds of dynamite stolen from a pennsylvania work site authorities say they were stored in a locked truck and a trailer after the workers left that construction site on friday. but by monday, they were missing. a $10,000 reward is being offered for information. and saudi arabia is holding a private screening of the hollywood blockbuster "black panther" today the saudi government says the first showing of a commercial film in more than 25 years the screening comes as the kingdom gets ready to open up theaters to the public i hope they enjoy it it was a fantastic film. back to you. >> sue, thank you. you haven't seen it? >> no. but i haven't seen anything. >> oh, boy

>> there's my little thing in the corner there 27 minutes to go into the close. the outperformer today look at the russell 2000 nasdaq up a third of 1%. we'll speak to the man in charge of producing the boeing inlv that's the plane voed in the southwest accident. why he calls it the most reliable plane ever built. during tournament week, a golf course goes from quiet... to bustling. with hundreds of pros and volunteers. and truckloads of technology. businesses need that same kind of scalability. cdw can orchestrate a scalable enterprise cloud solution using nutanix technology that will grow with your business, helping you do more, faster. cloud scalability by nutanix.

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25 minutes to go on wall street nasdaq's having a pretty good day. and the russell 2000 up 0.45%. >> ibm is having a very bad day. it's down more than 7% meanwhile, american express is up 25% over the past year. will investors reward that company after the bell today we'll bring you those numbers l e after-hours action still to come right here on "the closing bell." say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade?

uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird.

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that's why we ask for their help. fresh details emerging in yesterday's southwest airlines incident that resulted in one fatality >> phil lebeau covering this story once again for us today joins us with the latest on the investigation. >> scott, we will hear more from the ntsb that's the national transportation safety board. probably in an hour from now an update on where the investigation stands here's what they know so far they are immediately focusing on what's going on with the metal fatigue inside of this engine that exploded. this southwest airlines engine they say it showed signs of metal fatigue. and this is raising questions about whether or not there have been past incidents suggesting perhaps there's a problem with the cfm-56 engine built by ge

and saffron. they issued a service bulletin last year for the engines but it's not clear whether that service bulletin would have covered this particular engine take a look at general electric shares down 10 cents today. southwest is accelerating engine inspections. they made this decision last night. and other airlines out today saying, you know what? we have either already stepped up our inspections following a service bulletin from ge last year or they are doing it. united, american both saying they have been checking out these engines. within the last hour, west jet out of canada said it will also step up its inspections of its cfm-56 engines >> phil, thank you so much cnbc contributor and former continental ceo gordon bethune was in charge of that type of airplane while he was a boeing

executive. gordon, welcome back nice to see you today. >> thanks, scott nice to be here. >> you ever see anything like this before where a piece of an engine pierces the fuselage and kills a passenger? what do you think it says if anything about the durability of this type of engine? >> well, engines like airplanes need to be certified and one of the certification processes on transportation category engines is containment. so they shoot a frozen duct into a frozen engine and let the blades disintegrate. but it should still be contained in a shell steel wrapper but that didn't happen and that's an issue that, one, the fan blade shouldn't have fallen off it does sometimes, but if it did it wouldn't go outside of the engine shell and of course if that were to happen, it could cause damage to the wing where the fuel is or you could lose a wing. any kind of catastrophic damage. the certification process is

very, very rigorous. but these airplanes -- i think they take off every two seconds around the world >> right. >> so they're the most reliable in the world i can't think of a better one. >> hard to catch before a flight, right? we often see the pilot as we're standing in the airport waiting to go down the walkway there we see the pilot walk around the plane, take a look underneath, walk around the wing it's awfully hard to see any sort of structural issue that could arise in an engine which is higher off the ground than otherwise could be seen by a walking individual >> the kind of failure this caused would probably take a boroscope or another tool to make the inspection. there are many other kinds of engine inspections but it wouldn't be on a pilot's pre-flight walkaround. >> given how widespread the use of this aircraft is, is there

any reason for passengers to be concerned or further steps airlines need to be making right now? >> you know, kelly, what's -- i was just flabbergasted to see the pictures that showed up on the videos of the passengers with their oxygen masks just over their mouth when the flight attendant says put over your nose and mouth i think we're just complacent. because this never happens and the likelihood of it ever happening again probably in your lifetime is remote but it did happen and i'm sure they'll address it but we've grown so used to safety, i think nine years without losing a life in america. it's not common place and not ever likely to be common place >> gordon, how long does a 737 -- it's been the workhorse airline for so long. we said back from your days at boeing is it outdated >> no. it's been updated.

the 737 300, 400, 500 was early '80s this airplane came out in the early '90s and is now another series replacing it. all of them are refinements of previous airplanes what you're seeing, scott, is learned from previous airplanes improving the current airplane this is a much better airplane than the first 767 >> it looks like given everything, the pilot did a great job. >> oh -- >> she had to get everybody down to 10,000 feet and then land that thing with, what? one engine extraordinary. >> and they get really good -- this is a very professional crew and textbook execution but you get tremendous drag because of the lack of the nose cone and engine failure. so to keep the wings level and do the emergency descent which keeps the oxygen levels because you only have so much for the passengers she did a great job. very professional.

>> yeah. and to the great relief of everybody else on that plane gordon, thank you very much for joining us today we're watching the transports for other reasons today they have strong earnings from csx which are boosting the entire index up 2% again after csx up about 7% and wti crude also moving higher but that's not stopping the rally in the transports. in fact, take a quick look at crude which is at its highest since 2014 december of that year. >> all right let's talk about this with our closing bell exchange. you one of these dow fearists? keep a close eye on the transports >> i think there's a time and place for it no, i don't use it as a litmus test i use it as an overall macroeconomy i don't think anyone really questions it are we running into a soft spell? are we going have an inverted

yield curve? those are the questions investors are pondering with the market place the way it is right now. but what are they reaching for tech cyclical energy names. and those are the names that actually out perform when you go into a proposed inverted yield curve or flattening of the yield curve which is not a -- is not a consensus thought, to say the least. >> that's true i was just looking for the quote but earlier we had james bullard saying we could have an inverted yield curve in six months. does it matter they're up two out they have last three days give you comfort on that front >> so look i think what steve said is absolutely correct corporate earnings are very strong they might reach 12% year over year growth. which is tremendous. that's going to lift markets higher generally speaking. you know, there's an old adage of buy on the cannon, sell on the trumpets right now the trumpets are

blaring. you want to go into higher yielding stocks. >> there's a lot of talk about cannons too. >> yes, geopolitics are still part of the landscape. but right now is a calm, perhaps before the storm but calms can last a long time you want to take advantage of that. >> what do you make of the lack of volume? we bring it full circle to how we started part of the show today. wondering what the message of the last few days really is. >> you had so much volatility. if you look at the last 30 sessions, 80% of them have had triple digit moves quite frankly a lot of us especially in the markets are tired. you know, the other thing is quite frankly we're confused you see how the markets are trading and they're two different things the markets are telling you that they're going to invert the curve. the governors are telling you they don't care. and stock market doesn't really seem to mind either way. so it's really very confusing.

and until we can work all of this out, i think you're going to get this collective head scratch. >> i think you want to be on the beach in florida or something. you're tired and confused. >> you don't have to be tired and confused to be wanting to be on the beach >> kelly, if it's the middle of april and it's 30 degrees here in chicago, yes, i want to be down in florida. >> we don't want to hear it. we got the same nonsense going on here. why should we be tireed? why is the market tired? we're about to get a bunch of buybacks have we fully felt the burst of tax relief >> to jack's point and to everyone's point, when you run up -- >> go ahead, jack. i'm sorry. go ahead >> we're getting two different signals. let's face it. we're getting two completely different signals. one from the bond markets telling us we're going to get a recession. then repatriation, buybacks, tax reform package, that the sky cease the limit. this is very confusing >> you have the highs 2872 in the s&p cash

you have the february lows 2532. now if you look at where we're at, we're at basically the 50% retracement. we're smack in the middle between the 50 which means no one knows what to do hence the lack of volatility hence the lack of volume. >> so you agree with the confusion thing? >> it's definitely confusion setting in, but no one's going to sell the market with earnings on the set and on the front right now where estimates were up 18% eps and they're coming in up 30% you'd be a fool to sell the market there'll be a time and a place that time and a place is not now. >> all right got to go. thank you. all right. coming up, we got ten minutes left before we ring the bell dow is down 27 real story, though, small caps are performing pretty well nasdaq is as well. don't forget the dow is largely being dragged down today by ibm which is having its worst day in years. coming up after the bell, we

get more enings. we'll see what they do american express and alcoa report we could see big swings after hours. we'll tell you why when "the closing bell" comes right back 3w4r57 let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we ve a couple seconds left.

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closing countdown. all eyes today on ibm. decent day in the market, but the dow can't get out of its own way. it has everything to do with shares of ibm on the earnings and guidance being weak. that stock down by more than 7%. that's the weakest day for ibm shares in about four years so we continue to follow big blue -- big black and blue really today how about oil? oil is right now trading at its highest level in four years. no wonder there's a lot of talk about energy stocks and some of the value plays in that space picking up steam in the weeks and perhaps even months ahead. eia report showing strong demand there and that was certainly one of the reasons why oil is doing what it's doing today was above $68 and it's currently sitting there as i see it. $68.75 let's bring in bob pisani as always to not only look ahead to what's after the bell with some earnings, but you mentioned the lack of volume the lack of excitement about

what, you know, pretty good earnings -- not pretty good. really good earnings we'll take ibm out of the picture, but you get the drift >> important thing about what's going on is we are continuing to get great earnings report and yet the volume is not there. they're not buying into the market in any significant way. we've got a little bigger problem, scott i want to put up the 10-year yield. we had fed -- mr. dudley from the new york fed on. you were talking about this. mr. dudley said it's important to get policy back to neutral. well, that's a problem remember the word accommodative has been a big issue for traders for a long time. and i'm not sure if they're ready to see the phrase neutral instead of accommodative come june you say they're not ready nar yet. >> didn't he also say, though, that they're in no rush to raise rates. as i said to leisman before, i'll believe it when i see it. >> kaplan yesterday said cyclical inflationary pressures are building okay

the fed is sounding a little more hawkish and the traders are responding the 10-year yield moved up several basis points when that happened with dudley this afternoon. this has been a problem with the banks recently as well and i think -- i'm going to talk about whether we're going to be able to hit new highs. the old january highs on the s&p. this is a major head wind. the fed is the biggest head wind >> what happens if the bank trade finally starts to work again? and what if money starts to flow back into those high growth tech names? you've got tech earnings coming down the pike. netflix starts that off with a bang >> manager more likely will happen we may get rotation if the market continues to perform better these energy names all at 52-week highs finally. remember how long that trade never worked some of the consumer staple names can move up. they've been badly beaten up throughout the year. i think there's potential for other names out there. look at what happened in those high priced names. the semiconductors today

not a bad report at all, and yet they took some profits that's another little issue about how much more the market moves up >> bob, good stuff thanks as always ringing the bell "closing bell" here at the big board. the global medical relief fund at the nasdaq, regeneron pharmaceuticals. second hour of the show begins now. thank you, scott welcome to "the closing bell," everybody. i'm kelly evans. some different moves across the major markets here today the dow dropping 38 points on the bell, but good 50, 60 points of that decline is ibm having its worst day in several years after earnings last night. the dow closing below 24705. about a quarter percent gain for the russell as well. and by the way, the transports

up nearly 200 points on the close. that's also owing some nice performance from csx today after results last night and we have more earnings to come including amex and al khouw ra jo -- alcoa welcome to everybody in the dow today, the biggest winner was home depot while ibm was the biggest decliner ibm down 7.5%. over on the s&p, intuitive surgical was the big winner with an 8% gain while ibm was also the biggest loser in the broad market. what does that say to you? >> well, it says that you have obviously bifurcation in response to earnings right? so you had the best stocks in the sp&p and the worst

it's progress. i do think we're at a level where we kind of fell off the shelf four weeks ago from exactly this level so you kind of had to segue from recovery to something a little bit better, i think. it's going to have to take another 2% or 3% before it's r persuasi persuasive >> and we had several headlines including the president saying maybe he's not going to join the transpacific partnership after all. and we kind of shrugged that off today. why wasn't it as much of a concern, do you think? >> because we're focusing on earnings as mike said, this is a market that's finally paying attention to earnings. most of those earnings are very good up close to 20%. higher than people expected. punishing companies like ibm that don't report well but that's what fundamentally you own when you own a stock yesterday's trade issues, they're important. but corporate profitability is

good and getting better. >> all right barbara, does that make you excited? what names do you want to own here and what names also you don't want to own? ibm is a big decliner today. >> ibm is interesting. it's a turnaround. but turnarounds are lumpy. and people got excited the management was excited on the fourth quarter call. and it didn't happen today you'll stay the course there. >> do you own ibm? >> i do not. i own the netflix of the world, the amazons. >> so netflix being up, you're feeling good about >> yes these tech names used to stay long these are long runways you're going to have some volatility especially in this market but it does give opportunities in tech names. of course a lot of the industrial stays will be high. >> and industrials people have said maybe that's a place to go in the market here and kind of hide out a little bit. what do you think? >> i think that's not a bad

idea because if you look at a lot of industrials, they're down from their highs and names like boeing or federal express, there's opportunity there. >> all right let's talk about interest rates too. that was a big theme of the last couple of days lloyd blankfein sat down with our wilfred frost today. he asked everything from the economy to his anticipated successor. and this was a mike question he touched on goldman's consumer business and why they're doing so much in that area wilf joins us from chicago with more on that in particular hello to you, sir. >> absolutely right, kelly and i thought that was a particularly fascinating answer he said he was, quote, super excited about the consumer business and he framed it as not so much them moving into the consumer space but the consumer space moving into goldman sachs' era of expertise and here's why >> if you're lending to 50

million people, it's math. it's algorithms. when you slap down a credit card, the credit card company, the bank behind it is making a credit decision to extend credit to you really in that split second, how are they doing that? they're doing it by algorithms, sophisticated risk management methodology. now, why us? because on the one hand we have these experiences in digital a lot of the wholesale platforms that drive the wholesale market were created by goldman sachs and then hived off and distributed to a broader community. we also have a balance sheet unlike the normal disrupters of markets in silicon valley. we're a licensed bank holding company. we take deposits and lend them out. the other bank holding companies namely our competitors who have been in the consumer business for a long time are a bit of a victim because of their legacy businesses

>> really fascinating to hear him talk through the rational of why they have moved in but clear distinction. the final moments in that answer where he said they don't have thaez legacy issues that some of the big retail banks in america have that gives them a lot more flexibility. remains to be scene whether this lending strategy pays off in the long run >> you know, theshares are onl up a couple of pennies on the bell there especially after yesterday i don't know maybe even morgan stanley that was up 1% after its results. what do you think about that >> listen. i think all the banks suffered today in part from morgan stanley. goldman sachs did quite well today. this lending aspect. the real moment where the shares moved down was where the cfo said there wouldn't be a buyback this quarter why isn't there a buyback? they're used their capital in other areas like lending

they're trying to grow they think it's the right strategy which will pay off in the long run and i guess investors aren't willing to quite pay up for that relative to a buyback until they've seen a few more quarters of proving it. >> all right mr. frost, get on a plane. it's been a long day for you >> i will shortly. i will see you tomorrow. >> appreciate you joining us again. wilfred frost in chicago there charlie, what do you think has he convinced you lloyd blankfein? i don't know you needed convincing that the consumer business is now in their wheel house. >> no. and i've been a defender of goldman on your show i'm an owner of the stock. that was distressing yesterday goldman sachs has been a high network firm for a long time that's been one of the great things about them. they haven't tried to be all things to all people the middle market is a very tough place to play in financial. there are big people in that space. there's certainly no situation where it's wide open white space. so i think this is disturbing those were blowout earnings they

reported yesterday they certainly didn't come from lower part of the market this is disturbing that they're feeling the need to move into that part of the market. >> anything you guys would add on that? >> what has had to happen to goldman sachs over the last ten years. the industry made it so they had to basically become basically technology driven. all of these things put them in a position of saying we had the platform it's really turning a switch and putting a consumer interface on it that's why i think his answer was surprising to me >> for me it was the first time the light bulb really clicked on why they're excited about it >> and why there's an advantage. they have tremendous balances of credit card loans at high teens. they don't want to substitute a 9% or 10% consumer loan. >> no really, that was a real moment of clarity, i thought >> it's going to work. >> exactly we'll see if it does work. real quickly, bertha coombs

joins us american express -- nope we're going to deidra but we are doing the amex earnings. >> that's right. we've got amex earnings for the first quarter gap eps coming in above expectations $1.86. also higher than expected coming in at $9.72 billion versus $9.46 billion which was expected also guidance, they previous guided between 690 and 730 for fiscal year '18. they're now saying it will come in on the high end so we are seeing the stock up nicely about 2.5%. some of the themes here, we want to keep in mind this is the third quart -- it's facing competition from chase and citigroup, the big banks also want to look at total expenses this quarter. it's up 9% year over year. last quarter they were actually down 1% due to a decline in

marketing spending in the press release they say the rise primarily reflected growth in rewards expenses and other costs associated with increased card member spending, higher usage of card benefits, et cetera. so this goes back to the competition that it's facing to combat that. they're also looking at more co-partnerships as well. and they're still trying to recover from that. as a way to boost revenue. back over to you >> all right thank you. the shares up a little less than 3% it'll be weird when we're not talking about costco what do you think? >> yes, it will. the stock was down 20% and investors were tired of every quarter having to see adjusted numbers. and now i think proof in the puddle is here i mean, people were -- is it going to be flat when you look at the street research, people were not expecting a better than expected number there are initiatives they undertook to change, you know, to compensate. seemed to be working >> there you have it charlie, quick word on this

before we move along >> shows how many people are already in this space and why goldman shouldn't get into it. >> i thought you might take it there. amex up a little more than 3% right now. professor jeremy siegel was on "trading nation" earlier this week warning the markets could be in for a rough year despite strong earnings. >> it's going to be flat to slightly upward tilting year as good earnings collide with what i think is going to be higher interest rates both by the fed and in the treasury market 3.25% on the 10-year is going to give stocks a pause for 2018 >> you can check out more of that interview on cnbc.com you can comment on american express earnings if you want to, but we'd like to know what your thoughts are about the professor' point >> i would agree i think interest rates are headed higher. there's one thing that investors

are missing is how much higher they're going to go. so travel around the world, talk to a lot of investors. you know, i talk about four rate hikes this year. we've already had one. four rate hikes next year. i always get pushed back so i think investors just have this wrong once they recognize that, there'll be problems >> bill dudley earlier had some comments about how he thinks that rate is going to 3% sort of the terminal, the neutral, the fed funds rate. we were talking about how the market wasn't there. your remarks about investors seem to echo that. >> i think investors were more right than the economists for a number of years. not last year. last year the economists were right. but the year before that, the investors were right the year before that the investors were right and probably the year before that if you think you've been right for several years in a row, it's hard to change and they want -- i heard scott wapner earlier he said prove it to me well, prove it to them we're at -- >> what are we proving

the growth number? inflation number what needs to be put up here >> all of the above. so we're going to -- we have all this deficit finance tax cuts and spending increases the unemployment rate is 4.1%. it's going to be in the low 3% that has never ended well. economists likely use history saying history is a good guy you can see my hairline is receding -- >> but wait a minute i wonder if the market is ahead of the economist on this if you're saying the research knows, you go under 4%, it doesn't end well is that what the market is already pricing in saying we get it we're going to get there but then there's something nasty around the corner. >> no. if you look at market expectations for the federal funds rate target going forward, their terminal rate is 2%, maybe 2.5% it's not 3%. the fed said it's a straight line from here to three. it's never a straight line

it's like they're late, they're slow, they're slow then they press on the brakes hard it's more of a curve so we may get to 3% in the long run, but we're going to get there in a different way than even dudley thinks >> if you get to 3% on the short end, and the 10-year note does not really go up a similar amount we're talking about a flatter inverted yield curve that means the market is saying cycle over right? >> it is >> if in fact inflation is strong enough to get -- to justify this and get the bond market agitated about it, then you have an inflation problem. either way it seems like a struggle for equities. >> i totally agree all rate structures will rise. the curve, it's already starting to get -- we're not there yet. but, you know, you do the kind of trend lines it feels like we'll be there by this time next year maybe. and the yield curve never fails. you'll hear economists like me

get on just ignore them they'll tell you this time is different. >> 1994, that time was a little different. to mike's point, it was a choppy point for the market and the economy. but we had near inversion. >> hard inversion. >> all right barbara, what do you think -- >> not a day or two. you need a month or two. no, no, no >> you're right. absolutely so where does that leave you as an investor, barbara >> i think what we're talking about is the timing of this. i mean, it seems inevitable as all cycles end but i saw headlines last week, two different articles recession coming you know, famed wall street investor says. but then end of next year. so the market does discount future news, but not that far ahead. and i think -- you know, it's very interesting who knows this year. but if you look back, 1950, i saw interesting stats that 13 times when january has been above 5%, 12 of those 15 times they closed an average >> so you're still inspired by january? >> i'm inspired by the

fundamentals >> charlie, what would you say >> i think you don't have to go back that far in history a year ago, the 10-year was at 220. we're at 285 today and the markets are up the 10-year was at 160 two years ago. we've gone to 285 and the markets are up it went up wait for it. i know you know what i'm going to say if corporate earnings are strong enough, the market can perform well >> you're a banks guy too. what do you think of all this talk of it flattening and inverting? >> i used to be much more of a bank guy that is right. if you talk to bankers, it's not the absolute level it's the shape of the curve. if that gets flat or inverted which it's not at yet, that is not a pretty picture for banks >> can we make one other point what they have is earnings we knew this when they cut taxes. we knew it was going to be good earnings so what they haven't discounted

is the higher interest rates >> which you think is coming >> it's coming >> all right mark zandi thank you for joining us very much appreciated. there's a lot more ahead still on "the closing bell." >> straight ahead, the reporter who broke the story of top level contacts with north korea's kim jong-un. what's next? and are we really closing in on a deal that would take away the nukes? plus, a big warning ahead of apple's earnings if you own this stock, sit time to take some profits and the big danger lurking beneath san francisco's building boom this is "the closing bell" live from the new york stock exchange with kelly evans xfinity watchathon week is back!

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or the xfinity stream app until april 22nd. welcome back those earnings from alcoa, remember when it was a we bellwether that kicked everything off we have numbers. >> alcoa, 77 cents adjusted versus the estimate of 70 cents. revenue beating expectations as well at $3.09 billion. the question is how tariffs and

u.s./china trade tensions will impact the company's future growth in its earnings statement, the company is projecting a global -- due to delays in profits. the global aluminum deficit is believed to grow up to 1 million metric tons. alcoa shares not only higher today in extended trade by 4% but a gain of 14% last week in anticipation of today's results. and of course commodity prices also moving higher following sanctions on russia's tariffs on steel. this could have an impact on the global supply of aluminum and steel shares now up 4% here on better than expected results >> yeah. they're right in the thick of things, seema. thank you. >> aluminum prices are up in two weeks. they have a tail wind here

>> it's up nearly 4% after hours now trading $61 a share. president trump hosting shinzo abe down in florida let's get to eamon with the latest from west palm beach. >> reporter: hi, kelly the president and the japanese leader held a working lunch earlier this afternoon at which the president of the united states chided the japanese leader for the trade relationship between the two countries. here's what the president said >> reciprocal is the word we have to start using with a lot of nations, not only japan so when we say free, that's good fair, that's good. but i like to say free, fair, and reciprocal the word reciprocal is when you have a car come in, we charge you a tax. when we have a car go to japan which aren't allowed to go there, we have to take down the barriers >> the president also making the case for mike pompeo as his

nominee as secretary of state. he was in north korea over easter weekend, the white house revealed today meeting with kim jong-un to set up a summit with the president of the united states no location yet picked for that summit but here's what the president said about pompeo. >> he just left north korea. had a great meeting with kim jong-un and got along with him really well, really great, and he's that kind of a guy. he's very smart, but he gets along with people. >> reporter: and kelly, one other thing to flag from that lunch, the president went out of his way to praise larry kudkudl. kudlow's been involved in something of a controversy this week after earlier in the week suggesting that nikki haley was momentarily confused, the u.n. ambassador was about the administration's position on russia sanctions haley fired back saying, in fact, she doesn't get confused kudlow was forced to then apologize to nikki haley saying he had been wrong to say that.

the president going out of his way today at this session to praise larry kudlow publicly buttressing him to many. >> eamon, thank you. eamon javers bringing us up to date from west balm beach. joining us now is the reporter who broke the story on pompeo this month. shane, thanks for your time. >> thank you >> so first of all, you know, we got a couple of reporters here how'd you do it? could you give us anything about how you learned about this incredible sit-down the likes of which i don't think anybody in washington had anticipated was even remotely possibly going to happen >> right well, it was certainly a big surprise when we first, you know, from our sources were hearing information about this, we worked diligently to try and find people who were aware of the meeting and who knew something about it it's not the easiest thing in

the world to try and track where in the world a cia director is his schedule is not publicly announced and he doesn't fly in a big plane with cia on the side of it. honestly, president trump yesterday in his meeting at mar-a-lago noting the fact there had been already extremely high level direct meetings i think was helpful for us in discerning more of this story suffice to say, this is something that did not come out of the clear blue sky and took time to report >> is it unusual by historical standards for head of the cia to sit down with somebody like kim jong-un? >> yes i'm not aware of any cia director ever sitting down with a north korean leader. a few years ago the director of national intelligence james claper went to north korea but that was to bring back some americans who were held captive there. he met with a lower level intelligence official. it really wasn't a meeting he had to sit there as they went

with the litany of complaints the north korean had against the americans. this is really quite something it's unusual, too, when we're proceeding towards the summit to this diplomatic negotiation to have a cia director going over so there's raising some questions for some on capitol hill about was mike pompeo doing this in some type of capacity of someone being nominated to secretary of state or an intelligence role? zblit feels to me it leads to him getting confirmed. we'll see how this plays out in washington but more importantly is what was on the table what were the negotiations that occurred either there or are likely to occur in the weeks and months ahead with trump yesterday suggesting that talking about ending the war is okay by him when it comes to north and south korea. >> yeah. the president is really kind of, you know, thrown a lot of things there on the table

we know that when mike pompeo came back from north korea just after this easter trip, that officials in the trump administration began saying that they believe that they had assurances that north korea was willing to negotiate over the future of its nuclear weapons program and denuclearization was on the table it does appear that pompeo got those assurances while he was there. what's not clear is if there was any real negotiating going on. and that pompeo was really there in his role as an emissary for the president not so much to begin negotiating terms. >> well, fascinating shane, again, great story and thank you for joining us >> thanks. >> that's shane harris from "the washington post. the markets taking all this in stride. the s&p up nearly 3% this month. are the bulls backn ar ichge on wall street? ken fisher will weigh in when "the closing bell" comes right back don't work your way upfront without it.

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welcome back we have a news alert >> a female partner brought a charge of discrimination and retaliation against the accounting firm ernst & young. that's according to the equal opportunity employment and opportunity commission jessica casuchi said a male partner groebed her and told her he wanted to sleep with her and she denied those advances. she reported this conduct to the

firm's global diversity and inclusiveness officer but nothing happened that the male partner was not disciplined over his actions she is requesting all available and appropriate relief ian wise said in a statement in response to this the individual who is the subject of the charge has been placed on administrative leave pending the completion of our investigation. once we conclude our investigation, strong disciplinary actions will be taken against anyone we determine to have violated our policies and our code of conduct. back over to you >> all right leslie, thank you. meantime, the vix trading around one month lows. should investors bet on a calm market joining us now is ken fisher we see you, like, every two minutes on cnbc with your commercials. >> if you pay them, that's how you do this stuff. >> you hate annuities, to be clear.

what do you think of stocks these days can you address some of our confusion? >> "a," it's bull markets. bull markets don't die of old age. they die of something big bad happening that hadn't been prepriced. right now i don't know see that. i expect the bull market to keep rumbling along >> but you're not supposed to see something big, bad happening. >> you're not supposed to but you got to look for it so far the world is basically pretty good. now, that's a little bit scary by itself. but when i look at the world now, you actually see most advisers on the pessimistic side you see investors that have run for the hills through the correction the part that's a little bit scary is it's taken awhile to get back to new highs. normally you expect a v-shape pattern with a bounceback. but from the beginning of this correction, we've as a society kept looking for reasons and looking for reasons. >> you're talking about since the late january highs >> exactly and none of the reasons stick.

what we really need is a big, bad scary thing that everybody buys into that then doesn't really take the world down and gets the fear over with. >> so what is the main message of the fact that we've had this correction that it has as you say kind of persisted with a lot of different story lines running through it is it just that, guess what, we needed a correction? is it simple as that >> i think pretty much from the beginning of 2016, we had pretty much a straight run-up for almost two years. >> and it started to kind of take off in january too. we kept celebrating each thousand-point mark we pent through. it was starting to look parabolic. think how many times in this long bull market we've had these periods where the market just didn't want to do it but the fact is if you go back to the phase joined on the pessimism and optimism and on euphoria, we're in optimism but we're a long ways away from

euphoria >> the confusion i was referencing earlier, we had a discussion about how can it be the case on the one hand we're talking about spreads, you know, interest rates on the long end falling. maybe not falling but just not steep, not pricing in a strong economy. on the other hand, you have people pretty bullish on taxes, helping earnings growth, helping the stock market can you square all that for us >> yeah. long rates shouldn't actually go up much unless you've got a big pickup in in flagflation. unless you get a pickup in inflation, there's no real basis. in fact, in america the land of the free and the home of the brave, we've actually because of the relative flattening in the yield curve not only in an absolute sense had a deceleration in the quantity of money which puts negative pressure on inflation. and as you get that negative pressure on inflation, you don't get the pressure to go up. the other thing i always say, whatever anybody forecasts is

prepriced into the market and therefore tends not to occur and if you look at, again, this year like so many years in the past, everybody's forecasting long rates to go up at the end of the year. >> so final question, but does that mean that the federal reserve shouldn't keep raising interest rates >> the federal reserve should sit on its hands and do as little as possible other than trying to create a steady growth in the quantity of money that's consistent with what they think the real growth of the economy is plus whatever they want the inflation premium to be and stop trying to fine tune things that are beyond their pay grade >> i don't know how to pressure that right now there's so many different pieces balance sheet and rates. >> it's pretty simple number milton friedman would have said too. but that would be different. if he was alive right now, he'd be talking about m-4 but the concept of they're going to fine tune interest rates. you think at these levels, you do some tweaking to interest rates. is that really going to change human behavior hugely?

if you've got a project on the corporate side and some little tweaking of the interest rate is going to make it go or not go, it was a lousy project in the first place. >> we've been stuck in that kind of world for awhile. thank you very much. good to get your thoughts. ken fisher from fisher investments. we have an earnings alert on sleep number how'd they do? >> disappointing earnings report card here for sleep number earnings and revenues missing street expectations. comps down 3%. that is worse than what analysts were anticipating. a lot of talk about smart beds in its earnings report companies saying we are on track to complete the transition to our revolutionary sleep number 360-r smart beds by mid-year of course the mattress industry has had to wake up to new come pet tors like purple stock down almost 10% here >> i always thought the ticket should look more like slumber than sunber. >> sleep number. >> i get it.

never mind the share's down nearly 10%. maybe a change of ticker would help let's look how he finiwe finishn wall street. ibm had a more than 7% drop on the bell that pushed the dow down time now for a cnbc news update let's get to sue herrera >> hello here's what's happening at this hour new details emerging in yesterday's deadly southwest airlines incident. passengers said the boom shook the 737 violently. air whooshed through the cabin one passenger died in that accident no word yet, though, on what caused the engine failure. dozens of senators urging scott pruitt to resign as chief of the environmental protection agency democrats signed a resolution today based on the allegations of ethics lapses pruitt's agency is under fire for its spending habits. a wildfire sweeping through

the texas panhandle. it has burned more than 130,000 acres so far and it is only 41% contained. gusting winds and drought stricken land are fueling that blaze. and musician huey lewis is canceling all performances citing hearing loss. he tweeted he can't hear music well enough to sing. doctors believe it could be a disease which is a disorder of the inner ear with no known cause and no known cure. lewis hopes to find a treatment so he can perform again. and we wish him the very best. that is the news update this hour, kelly. downtown to you. >> sue, thank you very much. sue herrera. by the way, a reader says the ticker for sleep numberer should be zzzz. that's a good one. >> that's true then you're going to be last on the stock tables will people still look there apple shares falling today more to the start of the alphabet after analysts called the

company, quote, an uninspired investment and the company will report first quarter earnings may 1 after the bell joining us now are pete najarian and guy adami. good to see you both i want to see the bob pisani stance >> we got it we're sideways we got it. left foot in front >> we got the whole thing. >> i see the nfl super bowl commercial go ahead, guy. >> here. mike santoli's sitting next to you, right when i hear uninspired, i think of jersey girl he didn't write it a lot of people don't know that. i think this analyst is wrong. but you know who's better at this than i am pete najarian. take it away >> i don't know i'm better but i oftentimes listen to katie huberty. she's got a 200-ish price target right now. i believe in that. it's no longer just a services

story. remember we talked about that years ago then everybody picked up on the services wearables. that is a monster growth area right now and people are looking past that as well. which is interesting but they've got those two areas where you see intense growth -- >> wearables >> yep >> mike, you think wearables >> it's part of the mix. i actually think the next known catalyst is probably what they're going to do with all the cash exactly quantifying how big of a buyback, dividend increase we might get that detail so we'll see $200 price target sounds impressive it's only up 13% here from the biggest. >> last point, guy >> like a bunny. the highest that goes in percentage of overall revenues, the better their valuation is going to get >> and margins >> and margins watch out for those margins. >> all right they're doing pretty good on those iphone 6s with the margins for the time being guys, thank you.

we'll let you go pete najarian and guy adami. >> springsteen did write santa claus is coming to town right? >> you can't tell me these things be sure to catch "fast money" coming up at 5:00 p.m. eastern we have the latest now from hampton pearson. >> we're going to show you what happened when i tried to get a question or two as time warner ceo was leaving court. how do you feel it went today? >> i appreciate the opportunity to testify >> were you surprised by the question about how much compensation you stand to earn >> no, i can't comment on any of this, sir. i really can't thank you. >> now, mr. bewkes was on the witness stand all day making a powerful case as to why time warner wants to partner with at&t in essence saying they need the

partner to complete in what he described as the next phase of the video distribution and content surface where you have all of the internet players in particular and a changing advertising dynamic saying this combination with at&t gives us a good chance to compete effectively with digital advertising and consumer distribution he's done tomorrow we will hear from randall stephenson, at&t's boss and the mover been this merger the government is trying to block. >> thank you very much the engine parameters, the rpm indicators on the left engine went down to zero oil pressure went to zero. and the engine vibration which is measured, there's an indication in the cockpit for engine vibration it increased significantly on the left engine. shortly thereafter, the cabin

altitude warning horn activated. and from my experience of flying the 737, i can tell you that that warning activates around 13,500, 14,000 feet, somewhere in there so shortly after the engine indications went down and the vibration increased, that's when the cabin altitude warning horn started making noise indicating the cab kbin altitude was going down to 14,000 feet. the aircraft began a rapid uncommanded left roll of about 14 degrees of bank angle so usually when you're flying on an airline, you rarely get over about 20 to 25 degrees of bank this went to over 41 degrees the pilots leveled the wings and

throughout the rest of the flight there was what i'm going to describe as a fair amount of vibration throughout the airplane as i mentioned last evening, the flight crew elected to land with flaps five opposed to the normal set of flaps 30 or flaps 40. they did that because they were concerned of aircraft controllability issues and because they're landing with lesser flaps, that will mean a higher approach speed. the speed at touchdown was around -- was right at about 165 knots. and that converts to 190 miles per hour now, to put that in perspective, again, i'm just going back to my days of flying 737s and the speed it touched down. according to the weight of the aircraft but to put it in perspective,

i'm going to say that a typical approach speed for a 737 may be around 135 knots again, the higher speed was because they landed with a lesser flap setting than typical. the time from the initial event to touchdown, 22 minutes we have very talented meteorologists in washington working for the ntsb as well as air traffic control specialists. and they noticed on the air traffic control, on the atc radar indications, they could see debris, reflections of debris being painted on the radar. indicating that there was debris falling through the atmosphere and so they plugged in the winds

and estimated where they thought this debris would land and sure enough, the debris landed in about the area that they anticipated it would be as we're finding. yesterday we reported that an engine cowling had been located about 65 miles northwest of philadelphia and in fact, we are finding, residents are finding addition al piecing people are asking me what that is it's the exterior part of the engine that keeps all the wires and pipes from being exposed so that's what that is it's the outside of the engine that's the part that would be painted in the aircraft colors, the southwest colors we are finding additional pieces like that.

we're finding through our e-mail and they're notifying local law enforcement they're finding components keith holloway our public affairs officer will tweet, he said he would tweet it as soon as i started speaking. he will tweet a picture of one of these components that was located yesterday. our operations group, they have requested all faa records related to this flight crew as well as company training records. and that's standard for any investigation like this. the pilot interviews are being conducted as we speak. and if questioned, i'd be glad to talk about how we go about with the pilot interviews.

the cockpit voice recorder group, it will convene in washington in the next few days. so typically what we do is we take representatives, we take an ntsb investigator who's a specialist in cockpit voice recorder readouts. we have a representative from the faa. somebody from the aircraft manufacturer,somebody from the airline, somebody from the pilots union and they all listen to the cockpit voice recorder. as they do it, they listen and find what they were saying they listen and type out what they hear. and somebody says i didn't hear what he said so they back the tape up the old fashioned way. and play it again. then everybody agrees on it and they create a transcript that transcript will be the official record of the cockpit voice recorder so that becomes a public document

the -- and it's a time consuming process. because of the -- some factors, one of which is the sound of the pilots using oxygen masks during the descent, the audio is not as good as using their normal audio boom mikes it will take several days to recreate this transcript -- to create this transcript our structures group is documenting all damage to the aircraft structure the leading edge of the left wing suffered damage it's banged up pretty good and we can see paint transfer. we can see some blue paint transfer we can see a little bit of red paint transfer and sure enough on the cowling, there is a red line that says

hoist here for maintenance to know where the hoist hoists the engine so we can even see some red transfer of paint. so we know that that's some of that cowling coming off striking that leading edge of that wing. we've been documenting the window frame area to understand the window frame that was blown out. the fatally injured passenger was seated in row 14 and so our experts have been documenting the window frame area to understand how the window came out. and i want to note that we have found no window materials, the acrylic that the window pains are made of, we found really no acrylic inside the airplane. we also replofd tmoved the sidel

area in this row 14. we removed the sidewall, the plastic like sidewall there to look behind there to see if we can understand what the denting to the fuselage looked like and we got a good look at the fuselage denting we know what it looked like from outside the airplane this allows us to get the perspective from inside to see how it was dented. the flight interviews are being conducted today as we speak. bill and his team are prepping the fan blade components that we can send back to our materials lab in washington, d.c., for very detailed examination. we'll have a maintenance group that will convene in dallas at southwest headquarters they will begin to examine the

inspection records for this engine and specifically for this fan section, these fan blades. understand the inspection history. we're receiving good information, passengers, as you know, there were 144 passengers onboard this airplane. we're receiving videos and still pictures from the passengers and we would like to encourage if anybody would like to share their videos and their pictures of the inside of the airplane so we can better understand what was going on during this rapid depressurization, emergency dissent and landing. we would love to getthat at witness@ntsb.gov

again, again, witness@ntsb.gov. we appreciate the customers of southwest airlines for sending that material. tomorrow bill and his team will be finalizint if you need, we'l periodically releasing information to our web page. www.ntsb got -- www.ntsb.gov >> we're getting excellent cooperation from parties and also i want to note the cooperation we're getting from philadelphia international airport. great support. and finally, i want to thank american airlines. we -- they've allowed us to pull the airplane into the american airlines hangar and that's been a huge help.

it's meant they've to not have their airplanes in the hangar. in just a moment i'll call for questions as we did yesterday. if you have a question, please recognize your hand. when i recognize you, state your name and outlet. we'll begin here >> channel 6 here in philadelphia you have been able to clarify whether or not the engine was subject to the faa worthiness directive? [ inaudible >> yeah. it's a great question. have we been able to determine whether or not this engine specifically these fan blades were subject to an airworthiness directive issued a few years ago as a result of another event and we have not been able to determine that and it's not as easy as we think. our power plants engineer was explaining to me that a part number can change. if you have a fan blade that comes out as part number one 123-a. if that part gets a new update

that part number may be 123-b. it has the new modification. and so what we have to do is track the history of that blade to be able to determine whether or not that airworthiness directive actually did pertain to this particular set of fan blades and i know that people want answers right away and we'll do a very methodical investigation. we have to document the parishable evidence, the information that can go away with the passage of time we can track down that information next week whether we go do the maintenance records review so once we leave, we have what we need we are forgetting what we need. the question right here.

[ inaudible question ] you said you consider the means. once you -- [ inaudible question ] >> great question. what are we doing? how are we tracking the parts that supposedly we're being tracked on air traffic control radar. what are we doing and how we finding them that is the vicinity of where they might be. they're just primarily more engine cowling parts and so they're fairly light parts and they're going to be more aerodynamic and float more we haven't had any internal engine components at this time so what we'll do is that we will lay out those parts once we get them back, lay them out on the hangar floor to try and

literally piece them back together to figure out what went whe where. [ inaudible question ] >> some of very small components we may not find. but we can refine our searches our guys and we work with them and the parts come off the airplane the size of a football field. it is at 37,000 feet and they can say it's going to be in this area and they can find it. so they do have the sophistication to do it. but we just don't -- we don't know what we don't know at this point. we're still sort of in the very beginning stages of looking for what we need yes, sir >> in regards to the pilot, you're someone that has had the hands on the controls of this aircraft can you tell us what kind of

expertise, what kind of training and what she may have been going through trying to land a plane in the circumstances that you know happened? >> so what might this pilot have been going through certainly we'll get good information when we interview them which i indicated is going on right now i did fly a 737 for ten years. and i was an airline pilot for 24 and so i can say that airline pilots are routinely trained on rapid depressurizations, emergency dissents, engine failure. you'll not get in the simulator for a check ride without an engine failure and then coming around and doing the single engine landing. that is required in all training so i will say that what we heard yesterday, the pilots, you could hear their conversation and the pilots seemed very, very calm and assured of what they were doing. and so i think without getting

into -- i haven't heard their interviews yet but as i said last night, my hat is off to them they behaved in a manner that their training would prepare them for so i'll go to you right here, sir. yes, sir >> thank you >> could you first describe in more detail where the fan broke? was it -- [ inaudible also, have your folks been able to determine whether the heat began from some surface or some interior -- >> yeah, allen is asking a question about have we determined where the fan blade separated and was this as a result of previous manufacturing defect or something like that. i believe that's the long and the short of your question so the fan blade, it separated in two places. it separated at the hub.

so as i mentioned last night, we've got a hub and then 24 fan blades are going into this hub so there's a fatigue fracture where this number 13 fan blade would come into that hub so that we do have evidence of the fatigue fracture let's say a fan blade is that long it also -- >> you've been listening to the ntsb update on the emergency landing involving a southwest flight yesterday it left one fatality right now what we flow is that the