to hear what fed chairman bernanke is going to be saying at the news conference which follows the fomc meeting. let's have a look at the opening levels here for the nikkei and the topics for this wednesday. and both indexes well into the positive there, up 2%, both indexes, 13,289 for the neck kay, 1,110 for the topix. let me remind viewers both ended mixed yesterday, very noncommittal trading day, not surprising, given that the focus is on what transpires later today in the u.s., the fomc meeting and the biggest focus for market players is when and how the fed may taper off its bond-buying program. that's a big focus, of course. and judging by the triple-digit gains we have seen from the dow jones industrial average and triple digit gains we see for the in this case kay, the market seems to be saying that the fed will not taper soon, and will continue this $85 billion worth a month of its bond purchases and will also be checking data throughout the summer. so that's one thing that the market players will be looking out. so many investors really expect the nikkei, as well as other inde

and that's a little bit difficult to put into, you know, a very terse fomc statement. that being said, going forward, i think that, you know, some of these elements, to the extent that we can make them useful will begin to appear in the fomc statements. entirely possible. but it seems like the right tactic in this case to explain these fairly subtle contingencies in a context for i could answer questions and respond to any misunderstandings that might occur. >> thank you. >> thank you. tracy: we have been listening to fed chairman ben bernanke giving his press conference. want to point your attention -- and you have been looking at the numbers on your screen, i doubt that has sold off. it began to release sell-off the moment you begin to take questions from reporters there the federal reserve. hello, everyone. i'm cheryl and for liz. this is the last hour of trading. our fed chairman just finished speaking. as we just heard, the fed thinks the economic outlook is improving. the risks are decreasing. these are encouraging words about the economy. investors are really ar

it is not a vote of the opponents he or a plan written down -- of the fomc, or a plan written? >> it represents the consensus of the fomc. >> could you give us information nonsubstantive improvement? is that the unemployment rate coming down by itself to 7%, or other factors? is it substantial compared to he fall? >> many factors we look at when trying to judge the labor market. we look at participation and payrolls and a variety of other data. the 7% unemployment rate is indicative of the kind of progress we would like to make in order to be able to say we have reached substantial rogress. >> mr. chairman, there is an undercurrent of optimism in your forecast and statement. the policy statement today, the on implement rate forecast, 6.8% next year. it is the case that the fed is overestimating the economy's growth rate very often in the past during this recovery. so we have gone through a time in the first half of the year with pretty subdued growth. i would like you to explain where this optimism comes from, and how confident you are that these expectations are going to be me

wall street preparers for what will come out of the fomc meeting. in today's cover story, what sectors could be in for a big boost following this week's g8 summit. plus, why homeowners say they are feeling discrimination in the housing market. and, forget fetching coffee - why interns are demanding more from corporate america. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's tuesday, june 18. i'm angela miles. in today's first look: build-up to the fed. traders jumped into the market to buy stocks ahead of today's federal reserve meeting. it did not hurt that homebuilder confidence hit a 7-year high. the dow rallied 110 points, the nasdaq 28 and the s&p 12. gold had a modest loss. oil briefly traded aboave $98 in monday's session. global glances: traders will await information out of g8 this week. next month, president obama will meet with british prime minister david cameron in washington to talk trade. and campbell's soup is buying biscuit-maker kelsen group out o

that is a little bit difficult to put into a very terse fomc statement.that being said, going forward i , wek some of these elements can make them useful, will begin to appear in the fomc statement. that is entirely possible. it seems like the right tactic theses case to explain fairly subtle contingencies in a context where i can answer questions and respond to any misunderstandings that might occur. >> thank you. [captioning performed bynational captioning institute] [captions copyright nationalcable satellite corp. 2013] >> go to gettysburg, and to carnage there, lives lost, the great battles before at wilderness and chancellor phil. talk about antietam, shiloh, manassas. all these battles, people what they think of a way of life, slavery, what have you. all that to settle this contradiction. on.want we have our country. i like to go to gettysburg to say to my clerks, to we deserve this? do we deserve the sacrifice for the country that we have? are we living up to that? >> the 150th anniversary of the battle of gettysburg. live all-day coverage from th

is that a decision by the fomc? is that -- is that a -- >> that is -- we had a good discussion of that issue today, and we haven't had -- obviously there's no change in policy involved here. there's simply a clarification helping people to think about where policy will evolve, so it was thought it might be best for me to explain it to this group and answer questions. future policy statements may include elements of this, but it's not a policy change. i'm just trying to explain how our -- how we're making a substantial improvement in the outlook of the labor market, how we're making that concrete and how we're thinking about the potential future of the program given alternative policy and economic developments. >> so there was no consensus on that? that's not a vote of the fomc, not a plan written down some place? >> it represents the consensus of the fomc, yes. >> if you could just -- the question i was going to ask is could you give us some information on substantial improvement. is that the unemployment rate comin

down to 6.5% next year, which is your threshold for considering raising the funds rate and yes the fomc has also said it expects to keep rates very accommodative for a considerable time after purchases and recovery has strengthened and yet here we are in the middle of 2013, have not even begun to scaled-back asset purchases. you personally addressed this but could there be a conflict between on the one hand the asset purchase program, on the other hand the funds rate guidance policy. could they conflict? could you elaborate? >> i hope the unemployment rate comes down so fast that this becomes a problem. i would point out a couple things. one is there is a range of estimates all based on each individual's idea of optimal policy so policy assumptions may not be the same. some are as low as 6.5 but as i said in my earlier answer the threshold is not a trigger so evidently if you look at the policy expectations given in the diagram you will see the strong majority of fomc participants expect rates to below at the end of 2015 so that is not inconsistent. just saying people looking at a varie

sixuan is in singapore. >> the fomc meeting kicks off today.sian investors have sat on the sidelines and gains and losses were muted with the exception of full shares. the kospi out-shined, ending higher 1%. the yen trading shy of the 95 level against the dollar. korean automakers and electronicsmakers made a strong rebound after their recent sell-offs. in china, the shanghai composite also reversed early losses to end marginally higher. we know that property majors lent support as the latest data showed china's average new home prices climbed 6% year on year in may, and we just covered that china's housing story in yunis's package. the whole concerns over the economic outlook and the shore-term cash shortage still weighed on sentiment. losses in some of the coal miners and steelmakers on the second row here, they actually capped the gains on that market. in japan, as the nikkei 225 eased 0.2% today in various volumes, but sony shares out-performed the broader index, jumping 4.4% today, this after u.s. hedge fund third point raised its stake in

a lot of people waiting on the fomc on june 19 to see what happens there., one-week chart. the dow is down 1.2% this week. still holding the 15,000 mark, to 15,051. let as look at s&p and nasdaq. the nasdaq is the worst of the butch here. you can see there, all down arrows for the week. you have names that are winners like gamestop and groupon but are to the most part a lot of red on the screen and thin volume as well because people are waiting to see about the fed next week. bbck to you. tracy: or they're in the hamptons already. either of the two. see you in 15 minutes. ashley: that would be a smart move. investors are on edge fearing that day when the fed actually begins easing its stimulus program. ittwill happen one of these days. and it comes just before the fed's next meeting as nicole was talk about. peter barnes in washington, ddc. with latest. peter? >> investors are slightly on edge over the fed's plans on reducing bond purchases as part of its quantity quantity program. once it starts doing that and once quantitative easing, is over, separately

and what the fomc consensus is and i think this is an optimal time of color the dots in for those who and make it very clear to financial markets whose voice matters and whose voice matters less when it comes to monetary policy at this point in time. >> in 30 seconds or less, do you think the fed has been trying to let a little air out of equities markets with their recent comments? >> no, i think they are trying to see if the economy can deal with higher rates. i think one of the important messages from ben bernanke today will be, look, it's okay if rates go up a bit. they will still be very low. there's still a lot of monetary stimulus. the economy this year has gotten buy with a lot less fiscal stimulus. we got fiscal drag and i think they can get by with a lot of monetary stimulus, too, but he has to express confidence to be able to do but the the morphine drip of monetary policy without stimulus. >> a few seconds to go until we're about to get the fed announcement. steve liesman is at the fed with the announcement. steve liesman? >> no taper in the statement today. the fed saying

go back to the december fomc statement. they say that the 6 1/2% threshold kicks in a considerable period after asset purchases have stopped, quote unquote. >> i understand that. but the timing of the purchases and the use of the 7% unemployment rate as a guide to the timing of the purchases is new information. i don't want to get hung up on that. >> the 7% is. but that's just -- you have to go through -- you have to go through 7 on the way to 6 1/2. >> i understand that. but people -- i don't think the fed knows what the exact purchase timing is going to be, much less the rest of the market. how high in your opinion, how high will long-term interest rates go, competing with stocks? how high? >> this is something that nobody seems to understand. the ten-year treasury bottomed about a year ago, it bottomed in july of last yeah, two whole months before qe infinity even started. rates have been going up before qe-3, during qe-3, after qe-3, and you know why? it's because gradually the world is becoming a less risky place. we g

is that a decision by the fomc? is that, is that an intention -- >> that, that is -- we had a good discussion of that issue today, and we haven't had, um, obviously, there's no change, there's no change in policy involved here. there's simply a clarification helping people to think about where policy will evolve. so it was thought that it might be best for me to explain that to this group and answer questions. future policy statements may include elements of this, but it's not a policy change. i'm just trying to explain how our, how we're making a substantial improvement in the outlook for the labor market, how we're making that concrete and how we're thinking about the potential future of the program given alternative policy and economic developments. >> so there was no, there's no consensus on that? that's not a vote of the fomc, that's not a plan that's written down someplace? >> it represents the consensus of the fomc, yes. >> if we could just -- the question i was going to ask was could you give us some informa

and in my opinion who doesn't get it, the fed and the fomc committee. what am i talking about?s, in a shorm short-term world the market can still flex its muscles, but when it does, it isn't necessarily strategic. as a matter of fact, i can almost guarantee you it isn't strategic. do you know what it's about? it's about money, okay? because nobody likes to hold their money more than people that play the markets. they want to hold it and they want to protect it and if something happens, they don't want to lose any of it. so when it comes to all the talk about the fed and what they didn't say and what they may have said and the fact that we just don't get it. you know, we just don't get it. we're not quite bright enough to get it. we get it. maybe they don't get it. long term, $3.5 trillion bal balance sheet, there's a lot of battles they're going to win, when it comes to market efficiencies, how markets move, why they move, and who makes them move, they don't get it. now, that bugs me a little bit. $3.5 trillion. i didn't elect any of them. it bugs me a little bit. they need to

earlier fed hike, the previous he believed were quite out of sync with the statements made by the fomcirman and a rise in short-term rates is quote, likely to be a long way off and the fomc can hike rates of 6.5% and it's not a target, it's a threshold and the fed could increase quantitative easing and as long as the fed is buying assets and even if it's reducing that amount, dudley said it is still easing and not tightening and as it holds assets it's likely to not sell mortgage-backed securities for a lock time. he did repeat the outlook of the trajectory of quantitative easing and it's appropriate to moderate the pace of qe later this year and it is in 2014 if the forecast comes out the way the fed expects. that moderation would happen in measured steps and the policy depends on progress toward objectives and it is dependent on the outlook and not on the calendar according to dudley. back to you, larry. >> we appreciate it. so markets may have rallied on dudley's comments and he said what bernanke said a month ago, exactly and it's the drop in long-term interest rates, and i think i

it surveys all 19 members of the fomc and a slight change in that. thinks that the that the policy should tighten in 2013 and 2014, three, in 2015 in 2016, we saw one member shift from 2014 over to 2015. looks like it got a little bit doveish in terms of when members think they should start tightening policy, raise it, basically, basically raising interest rates from about zero level now for this short-term fed funds rate. ashley and lori. lori: thank you so much, peter. 2015 is the target to actually raise the target rate. ashley: right. lori: the discussion has been when and if the fed will taper its bond purchases and treasury and mortgaged backs. that looks like it is not happening anytime soon. peter, stick with us. i want to send it up to doug cote, our market strategist to discuss this. do you retreated, off 47 points. gains in gold were reversed. curious your reaction, is that significant or not. >> the statement read almost precisely the same as the prior statement. ashley: yeah. >> what i was surprised with was james bullard of the st. loui

you know, if you read sort of the fine print in the fomc statement, it was pretty hawkish. they dowed back their worries about the risks to the economy. they lowered their forecast for the unemployment rate. they even dismissed the lower inflation to be temporary. i think the markets took a look at that and said, you know, maybe the risks are higher that they are going to end qe faster than we anticipated just yesterday or the day before. the other thing i would point out is these markets, the bond market, stock market, all the markets have come a long way over a short period of time so they are vulnerable to anything off script so that may contribute to the ups and downs we see in the last few weeks. >> investors also want a handle where the interest rates are going for the 30-year mortgage and housing market and the ten-year, how much higher it will go. what is your forecast and what impact will that have on the still fragile housing market? >> interest rates are going higher. you know, they will go up and down and all around, that's what interest rates do. my sense is by

numbers that came out yesterday, the inflation numbers, the housing numbers, just made the whole fomc atmosphere a little bit less clear. so people just shedding the safe haven asset. - good to have you on the show. thanks larry. - thank you. in our cover story, the fed is keeping close watch on the housing market - in particular new construction starts, which picked up nearly 7% last month: a good sign for builders, buyers, and those looking toward housing-related stocks. housing starts in may went up 6.8% overall - 3/10 of that new construction of single-family homes, but up 21.6% for new apartment buildings. "right now, their mindset is 'build-to-rent.' that's it." why so many apartments? lending for houses is still tight, with rising mortgage rates. banks see apartments as safer bets and easily convertable. "they're condo-ready. nice finishes so when the market turns, they'll sell them to the people they're renting them to." another reason why such a small uptick for houses: demand, especially for those mega- subdivisions far from downtown. "people don't want to live 50 miles from

. >> the fomc meeting has been a focus for many global market players. the federal reserve has been buying $85 billion in bonds and other assets each month to pump more money into the financial markets. the market liquidity boosted investment sending stock prices up worldwide and has spurred a recovery in the global economy. but at a hearing before congress on march 22nd, ben bernanke hinted at the possibility of scaling down the monetary easing policy. >> if we seek continued improvement and we have confidence that is going to be sustained, then we could in the next few meetings take a step down in our pace of purchases. >> the remarks triggered worldwide market volatility. the following day the nikkei and tokyo index stumbled. comments also changed the currently trends and the dollar briefly fell to the 93 yen level earlier this month. economists point out that chairman bernanke's comments could positively impact the japanese economy if it can get rid of market uncertainties. >> translator: once the u.s. policy direction becomes clear, investors may mo

the men of the trading day, hands down, ben bernanke and the fomc members stopped soared 106 ahead ofwith speculation running the gamet, but one of the signs big ben could exit the fed. cheryl: as construction rises, a guest says a new housing bubble is inevitable. first, to this, dennis. >> breaking news, the fbi says the nsa program helped foil a bomb plot targeting the new york stock exchange. woe don't know when this was. >> the fbi confirms with fox business they uued bis clay internet and phone tour vail lance to foil a plot, last decade that started in yemen to bomb the new york stock exchange and used surveillance to uncover 50 and more terrorist plots around the world. here's whaa happened at the house intelligence committee hearing just moments ago. >> in recent years, these programs together with other intelligence have protected the u.s..and allies from terrorist threats across the globe to include helping prevent the potential terrorist events over 50 times since 9/11. >> nsa utilizing 702 authority was monitoring a known extremist in yemen who was in contact with an indi

that's not a vote of the fomc. that's not a plan that's written down someplace? >> it represents the consensus of the fomc, yes. >> if you could just -- the question i was going to ask was, could you give us some information on substantial improvement? is that the unemployment rate coming down by itself to 7%, or are there other factors involved, and is it substantial compared to the fall? >> well, there are many factors that we look at when trying to judge the labor market. as you know, we look at participation, payrolls, a variety of other data. but the 7% unemployment rate is indicative of the kind of progress we'd like to make in order to be able to say that we've reached substantial rogress. >> i'm from the "wall street journal." mr. chairman, there's an undercurrent of optimism in your forecast, in your statement, in the policy statement today. for instance, the unemployment rate forecast comes down to 6.5% to 6.8% next year. it's the case that the fed is overestimated the economy's growth rate. very often in the past during this recovery. we've gone throug

. >> but don't you think that the fomc made the statement, that they had a sense of where we were? >> with the economy or with the jobs number? >> with the real economy. >> i had to read through that a couple of times because you would think if we had thoughts that the fed was going to pull out the qe, that would be good news or the dollar because there's less money pumped into the system. but i think -- reading through the article, they kind of get to the point where we're worried about the weak economy. it's not the qe3, but if you're looking at the situation where the weak economy and the fed can't do a heck of a lot more. >> what we won't see is any of the people that i'm waiting for a 3% to 5% correction. they never say it. they never do it. they never, ever -- and then andrew, you asked me, how do i feel about this whole -- >> we're going to get there. >> we're going to get there? because al gore calls it an incredible abomination. >> what are we talking about? >> the nsa. he says it's an abomination. which i'm for it, then. and dianne feinstein says she's for it so then i'm

. >> the fomc was thinking about this not really as a chain of policy. we are trying to clarify a little bit what substantial improvement that. >> the fed's policy meeting in september could be a time to review the economic data and consider tapering. bernanke was wise to clarify his remarks. he said that the federal reserve is not only leaving the punch bowl in place, we are continuing to spike the punch. unlike some of his colleagues, lower stock and bond prices reflected a warranted reassessment of qe. so far this week, six fed officials have spoken up to clarify the comments. we will hear from a seven later this afternoon. i do not know if i have ever seen a week where seven fed officials came out and gave a speech like this. >> peter barnes in washington, d.c. thank you very much. the eight here is a stop alert for you. take a look at blackberry. dennis: we are getting our first date peek at the first order. stock is down 25% today. the second worst drought. the worst one was in 2000 when everybody fell. the numbers are, first quarter revenues 9%. $

we will talk about the fomc and monetary policy and how that is affecting companies like ups.k you so much, adam. give her my best. i was on a finance battle with him some time ago. thank you so much, adam. connell: that is good timing. the tokyo bound 787 dreamliner had to make an emergency landing in seattle. dagen: using prescription drugs properly could save our healthcare money every year. take a look at world currencies and how they are holding up against the dollar. ♪ you hurt my feelings, todd. i did? wh visa signature asked everybody what upgraded experiences ally mattered... you suggested luxury car service instd of "strength training with patrick willis." come on todd! flap them chicken wings. [ grunts ] well, i travel a lot and umm... [ malennouncer ] at visa signature, every upgradedxperience comes from listeng to our cardholders. visa signature. your idea of what a card should be. ♪ twenty-five minutes past the hour. president obama wants to hold talks with russia to reduce both countries cold war era nuclear arsenals. the president proposed that the u.s. and rus

. ♪ >> coming up, the story of the morning, the start of a two-day fomc meeting.alk to fed insiders and market watchers. dow right now 55 points. "squawk box" will be right back. . >> are you ready for another wild ride? investors head towards the fed tapering tunnel. we will tell you what's on the other side with special guest host scott sperling. a cnbc exclusive. leading economists tell us what they think of the fed and it's handling of the economy t. results of our special cnbc fed survey ahead. >>> plus, we hit the campus of harvard. ♪ we talk education, innovation and entrepreneurship. the second hour of "squawk box" begins right now. >>> good morning, everybody, welcome back to "squawk box" on cnbc. i'm becky quick and the futures are in the green once again this morning. the dow futures are up 52 points. yesterday the dow was up 109 yesterday. in our headlines this morning, boeing has announced a new larger version of its 787 dreamline were known as the 787-10. it's gotten orders from five customers including united airlines. the new jet will seat up to 33

and there are some discussion in the last fed minutes that some members at least of the fomc thoughthey should focus on scaling back agency debt purchases rather than treasury debt purchases. they don't feel comfortable with the interventions in the housing market. that's gotten some mortgage-backed securities investors a little nervous about that and we've seen some spreads widening out a little bit in the mortgage space. but for the most part it's a response to the change in fed tone and the expectation that we're getting closer to the date of a fed exit. >> you said that -- the expectation is they will dial down purchases before the end of the year. was there any talk or any expectation of how much they would dial down and take away, i guess? >> there were differing views on the committee. but everyone thought they would take a scaled approach. maybe $20 billion or $25 billion decline on a monthly purchase from where they are right now. as much as a quarter lower than what -- what they're doing now is a possibility. but there's a range of views. i think that will be -- a lot of th

he started talking about the fomc looking at their mark to market -- >> quantifying gains. find the stuff you understood and you can benefit from it. leave the other stuff. some other people, rocket scientists are also listening. >> how much do you believe. as i was reading through morning money just before the show, michael obushowski from north shore asset management saying a lot going on right now is driven on algorithms, seizing on news items. covered from the wires. >> i do believe that. i spoke with ron barren last night. he said the same thing. he said, don't worry, this turbulence, volatility is going to calm down. he thinks it will be sooner rather than later. he talked about how what he thinks is happening is exactly that. computer trading is part of it. the other thing we're only five years out from a massive recession. if he's still looking at this as the same way, we'll talk more about what else he said. >> i talked to you about how machines and computers are getting smarter and smarter. get used to a lot of things in the world happening because computers see c

she is a voting member on the fomc board and a noted hawk.er or not that perhaps triggered the sell-off. she's been taken ill, so she's not actually delivering the speech per se, but the remarks will be released. bob is hunting that down, and we'll talk about it when he joins me in a few minutes. >>> the airline industry is raising the profit forecast this year, and a lot of that money, unfortunately coming from extra fees. united even has a new twist on fees, selling yearly subscriptions for more legroom and checked bags. will the other airlines follow suit? will this fly? we have the travel reporter for "usa today" and he writing the today in the sky log. welcome. >> good to be here. >>> phish of all, do you think that passengers will literally buy into this? >> and below the elite level. so i'm curious to see whether the price point is just about right. i do think that one thing that's for sure whether this sticks in this form, we're going to see more and more of these types of creative ways to sell -- to generate more fees, whether at uni

however, he has 12 members on the fomc committee.ecessarily reflect official policy , is an influential member of the committee. these could actually be considered quite, you know, influential on 11 other members. cheryl: one of the things that he said, he said that frankly the bond buying program thus far has been confusing to the markets. i recall recent memory any fed president copping to the fact that maybe they are confusing the market. what you make of that? >> that is in regrets to the actual time limit imposed by quantitative easing rounds one and two. that had a fixed date. it would be -- it would conclude this current quantitative easing is open-ended. is continuous. they're not necessarily put a firm date as to when that will end. it will end when the fed sees the 2 percent inflation target approach as well as labor conditions improving to the level that they have stated prior. cheryl: interesting exclusive interview with you. as i mentioned, thank you. david: thank you. all of what the fed does really depends on what happ

however, right now, consolidation digestion looking forward to june 19th with the fomc press conferencedavid: john, you are bearish, at least in the short term, but today was keep of an interesting day because we saw a percent pull back, and we didn't see the massive profit taking that people say it coming. >> well, we're more concerned about the interimmediate time period. we think that we are living in an artificial environment due to the fed policy, and the market since 2000 and we believe we are still there to continue in that for another four years, and because of the interest rates we have and mar gyps excessive at this point and likely to revert to normal levels, we could be looking at a 10% correction to 25%. david: let's not let that comment pass. it's the high end, but it's possible there's a 25% correction? >> if there's inflation in the next couple years which we thinks happen because of the central banking and in the developed world, the money is leaking out into the developing world which ised commodity intensative and growing rapidly. what's happening is we think there's

over the next week we have the fomc coming out next wednesday. there's not a lot of news until then. so you could get one of those vacuums up. >> bk had a brief pause. we saw that hoagie. >> that's a hot dog, mister. all american hot dog there. >> anyway i'm freakishly in bks camp although the best trade i think the tlt reversed on i believe it was -- i forgot what today is. reversed on today. we talked about it on the show. it's been somewhat -- not off the races but traded really well since. i thought the rally in the tnt with coincide with the equities we saw today. today is a mirror image in the s&p as may 22nd was. almost had a reversal to the upside, missed it by a point in the s&p. now technically you should have another 25 30 handles. >> karen, are you bullish? >> i have been sort of bearish for the last couple of weeks. we are a long biased fund but i thought this morning what was happening in japan i think is still really scary. so i'm surprised by this move actually. >> what are the options markets telling us? . it was a black hawks ra

some stops don't seem to fair about the fomc. we'll tell you how to get in. with the yield soaring to 2.5% how can you play the trades with the taper talk still continuing. we'll talk to the man with the bond fund and helped growing it higher than it was in ten years. manage your wires. watch out for space heaters. clean the chimney. get one of these. cool the romance. and of course, talk to farmers. hi. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investo

[closing bell rings] they're waiting on the fomc next week. street but not a down day on the market. looks like weill have a triple-digit losses on the dow, down 107 points. it might settle a little lower than that. at least a triple-digit loss on the dow. the schaap down a little less percentage wise from the dow but still a significant loss on the s&p and the same with the nasdaq and russell two thousand. the important thing to keep in mind this is the fourth day out of five for the week that it's down. we haven't had four straight @onsecutive days when it is down. pretty darn close. we'll see what happens leading into the weekend beginning of next week. let's look at today's front page headlines. after hitting the highest level in six years last month, the consumer sentiment index fell to a preliminary

traders waiting for that fomc meeting next week.ooking elsewhere in the metals complex where palladium is the big of the decliner, down 3.5%, and a lost traders were expecting see more labor strife in south africa. that strike has been delayed and as a result, some have been liquidating. >>> trading action on the floor of the nyse. bob pisani we saw a dip in the market after the bond, 30-year bond action but come back nicely. >> near the highs for the day. the overall trend is intact. trend reversal. days when the yen has been stronger, and it's much stronger today -- take a look at the markets -- the dollar, weaker. our markets have generally been weaker. today, opposite. noti notice ten year is up and s&p 500 on the upside. dollar/yen, yen is strengthening. in terms of sectors moving publishing stocks on the upside. that's on the deal that we saw. look at moves up in meredith and journal and ew scripps, the supreme court ruling, naturally occurring genes cannot be patented. there is an exception built in. some gene stocks down on

the market's gaze is clearly focused on the fomc. we need to remember a lot has broken down. narrative whereeqe is good and taper something bad, that is disconnected and broken down and eroded over the past six weeks of the keep this in mind. this has been on the table for six weeks. the stock market has been in a very, very broad but comfortable range. look at treasurys and gold. that is not pointing toward a doveish fed. however the stock market seems to be accepting the fact we might have some tapering toward the end of the year, and that is okay. david: edward, you like what bernanke is doing but you see the risks of this policy and even some people bullish on bernanke inside the fed do. we're starting to see synthetic cdos again, other financial instruments that partially led us into the crisis last time. >> first of all, thanks, liz and david, for having me on. david: it's a pleasure. >> whole concept of easy money needs to end sometime in the near future. these synthetic cdos or exotic instruments are quite scary. the fact they're coming back in "vogue" is telling to m

not the least of all what the fomc might do.l that trend continue? with what mortgage rates have been doing. the answer when we come back. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ female announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plu

this is a key economic gauge used at fomc meetings. watch tomorrow will be the adp employment report. it is set to be released at 8:15 a.m. eastern time. economists expecting private payroll employment to rise by 165,000. that is a big jump. don't forget from last month's readings which was just 119,000. many of analysts we've spoken to, liz, said this is friday's numbers, of course the nonfarm payroll numbers will be very important. sometimes we get a little insight from adp in the private sector. liz: watch oil tomorrow. oil based very strangely today. first it was down and reversed and went higher on perhaps news syria had been using chemical weapons. concerns what will really happen with opec. oil began to move up. then it began to move down. so watch the crude market very closely. ashley: we will indeed. we should mention the tuesday streak is now over. 20 tuesdays in a row the markets finished in the green. it had to come to an end at some point, as you said and it has. the streak is over. liz: next it "money" with melissa franci

argument, if that comes out it us kas any pause, given the economic data, i don't think that causes the fomchat's what make a market. we both think if this comes out under 100, that's horrific. >> i don't think it's going to be that easy. go back to the first week in april when we got the number, you saw massive revisions going backwards and that grew those numbers to what were more acceptable numbers. so you got the revisions as you got to play around with also to see how that skews the picture as well. >> yeah. revisions are absolutely key. the other thing to bear in mind today, draghi was surprisingly upbeat. this guy plays on confidence. that upset the dollar as well the way the euro rallied up to 133. i think the market's going to be fine tomorrow. we'll see a number coming in around expectations at 160,000. the market is telling us today they're unwilling to take the risk, at least the currency market's unwilling and this is why we're seeing the move in an unliquid market. >> the ten year, the yield, threatening to go under 2% for the first time in a little while here. in the context o

the next fomc meeting is in september. the question is when will this tapering begin?ccording to federal reserve chairman ben bernanke on wednesday's testimony, he never really acknowledged that anything was going to start until he sees the correct economic numbers coming out. what i mean by that, there's a threshold he's set in terms of unemployment which should be at about 6.5%, maybe 7% he would begin tapering. what tapering means is is literally pulling back slowly from the stimulus that has been in the marketplace. we've seen $85 billion being injected into the marketplace on a -- well, on a very consistent basis. you can't forget we've had this unprecedented kind of stimulus which nobody really expected to last as long as it has for well over three years. so this is highly accommodative, highly unprecedented. so a pullback like this on the expectation it's going to slow down isn't so unyou recall. it's accelerated in the last few minutes. as i mentioned earlier in the show there was a headline that crossed that literally said the fed is seeing tapering qe to 65 b

you look at what changed between the may 1st fomc statement. inflation is going the wrong way, from their perspective. but what's changed is they finally were convinced that q.e. was causing a lot of financial instability and they decided it's time to get out of this thing. they're going to try to couch it around the economy because they don't want to admit they made a mistake. so they tell the story around the economy. but in reality, they realized they were causing a lot of asset price inflation that wasn't healthy. >> are they going to lower their economic thresholds? a lot of people believe that it's sort of ainwiwin-win. if the economy comes in good, that's good news and we should buy stocks in both cases. but won't the fed accept a slower economy and still get out of q.e.? >> yes. i don't think the fed is sensitive to every little wiggle in the data. they've made a conclusion that they want to get out of this as gracefully as they can. obviously if things go to hell in a hand basket, they'll have to call in. but if the economy continues o

. >> the fomc's policy includes on asset purchases depends on the economic outlook not on the calendarl in motion. i think we need to wait a couple more weeks. we really can't be too focused on either short-term high frequency economic data or short-term movement. >> it's important to the stress this added clarity is not a statement of unconditional optimism, nor does it represent a departure from the data-dependent philosophy of the program. >> all right. you heard all of that. the federal reserve is in full damage control, trying to calm markets, play down bernanke's announcement last week to phase the bond purchasing program out in about a year. i still think the markets have it right. i think, unfortunately, when tapering and tightening begins in september which is what stein said today, the council on foreign reels, i think it could be a back-breaker. i'm looking at gold which is tanking. it's a deflationary signal. interest rates have spiked. all i can say for stock investors and bond people, good luck if they follow through. let's bring in ben steele, author of "the battle of br

. >> that is a great point and it's the uncertainty that bernanke and the fomc has created and we knewhey would have a trouble communicating and pulling out of qe because they have some are experience explaining it not only that, but they have zero experience expanding it and contracting it so they knew this was coming. to put a final point on michelle, too. they left it wide open and i paraphrased a little bit and i heard him say if anyone draws the conclusion, and then they weren't listening to me and there were many big ifs in there, and i think he can completely step back on it and not seem dupe liss us to in the least. >> let's get the flipside in which is the bond buying actively harms the economy. it redirects capital to the government. so i hope they'll stop. the earlier they taper, the better the economy will do. >> that's the thing. nobody knows. that's is what's so bad about this whole story. nobody knows. the fed ought to have a simple policy and they either ought to target inflation or target the exchange value of the dollar or target nominal gdp or something. this cat and

[closing bell rings] they're waiting on the fomc next week. david: they're cheering a on wall street but not a down day on the market. looks like weill have a triple-digit losses on the dow, down 107 points. it might settle a little lower than that. at least a triple-digit loss on the dow. the schaap down a little less percentage wise from the dow but still a significant loss on the s&p and the same with the nasdaq and russell two thousand. the important thing to keep in mind this is the fourth day out of five for the week that it's down. we haven't had four straight @onsecutive days when it is down. pretty darn close. we'll see what happens leading into the weekend beginning of next week. let's look at today's front page headlines. after hitting the highest level in six years last month, the consumer sentiment index fell to a preliminary reading of 86.7 in june. that is really lowered the stock market. the movv lower was led by a gloomy review of economic conditions liz was talking about with lagarde moments ago. >>> pnb paribas will expand t

stocks sold off sharply today after the fomc policy director and chairman bernanke's own news conferencebig jump higher. but i say don't panic and i'm going to explain why in just a moment coming up. also tonight, is america going down europe's failed path? well, harvard professor niall ferguson's new book says the u.s. is becoming planet government. but not in texas. because joining us live on the set tonight, special guest host, governor rick perry. he's here to talk about his unprecedented tour across the country to personally lure businesses to the lone state. listen up. blue states, you're in trouble. rick perry and f

lennar, itb, and the backdrop is bernanke and the fed and fomc and i bet that bernanke will ease some of the concerns we've been hearing about near term. >> when he speaks on wednesday. >> that's right. >> people are already saying who is sick of talking about bernanke already and it's monday? still two days to go or years. >> years. >> it's the same story over and over and over. >> you have to give some credit to the bulls who all year have been secret service agent first half of the year -- the market will be moved by the fed and the second half by fundamentals and you have, you know, the two-pronged approach. you have the home builder sentiment which was the highest since i believe 2006, but you also have this expectation of what bernanke will say on wednesday so perhaps it's going to be the fundamentals that keep us riding out the rest of the year. >> housing is hot, right? >> fundamentals in his world. >> just a whole lot of money. >> yeah. housing is just so hospital we talked last week about the mansion shortage. we're going to look this week at what's happening with the big au

think that the current level of inflation is not going to cause the fed to act, not a concern of the fomc. only 7% saying that. let me throw it back to brian and to mandy here, and we can talk more about this survey in just a sglit yeah, come on over, steve. actually lots and lots of things. meantime, we want to throw this one at you as well because president obama stirred up a little controversy when he said this to charlie rose. >> well, i think ben bernanke has done an outstanding job. ben bernanke is a little bit like bob muller, the head of the fbi. >> yes. >> where he's already stayed a lot longer than he wanted or he was supposed to. >> yikes. >> i'm not sure that he intentionally meant to stir up a little bit of controversy, but that's exactly the effect that has been achieved here. so who is going to replace bernanke? >> well, you know, i think there's two things about that. first, it seems like confirmation that bernanke is going to be leaving. he didn't say i'm going to be asking for bernanke to stay. we're in discussions about him staying or anything like that, and also there