. >>> the world's biggest asset manager is looking for answers from gunmakers leslie picker has the detailsf that >>> good morning blackrock getting criticism in recent days for its sizable stakes in the three top gun manufacturers. the firm is the largest donor of ruger, american outdoor and vista outdoor. yesterday blackrock out with a statement defending their ownership telling cnbc index providers responsible for the construction of their indices. as a fiduciary we have a responsibility to replicate the indices our clients choose to invest in. as a result we invest in a company as long as that company is in the relevant index the firm goes on to say they don't have the ability to sell shares of the company in an index even if they disagree with management but they can focus on engaging with the companies and their impact on society. blackrock says we will be engaging with weapons manufacturers and distributors to understand the response to recent events. we are working with clients who want to exclude from their portfolios weapons manufacturers or other companies that don't align with v

. >>> welcome back, breaking news, pharmaceuticals, leslie picker with the details >> that's right.n to shares of pharmaceuticals, up in after hours today after a filing showed that berkshire hathaway took an equivalent, 13 f filing at the end of 2017, so that position may have changed in the six weeks since then, but these are, of course, quarterly filings that investment managers have to do at the end of every quarter, so we're keeping an eye on the chshares now back to you. >> leslie, thank you up original 1% mike, makes me smile shares hit so hard over the last couple years >> straight down in the last year >> even just everyday things bring new challenges for them, a new ceo, trying to turn things around, but -- >> yes, essentially other competition, one of the cheapest stocks in the s&p 500 for the a long time. ten times forward earnings for the last two years, under eight, so, clearly, whatever price they got in at, it was a cheap one. >> down 62% over two years >> incredible. >> even with the after hours move we'll see if there's more from the filing and in the others up 8%,

leslie picker has that story >> that's right.n employee is suing point72, steve cohen and president douglas hanes. the complaint alleges that male executives at point72 engaged in a pattern of discrimination against women and equal pay. it also details a toxic work environment where women were criticized for their appearance, forced to draft powerpoint prez ta presentations after giving birth. the woman accuses cohen and hayes of aiding and abetting the unlawful employment practices and retaliation. she is looking to restrain point72 from engaging in such further unlawful conduct and an undisclosed amount of monetary and punitive damages point72 says the firm emphatically denies these allegations and will defend itself in a more appropriate venue than the media the firm went on to say we stand by our record of hiring and developing women. cnbc was unable to independently verify the allegations in the lawsuit. the complaint was filed in the southern district of new york, the same court that charged cohen's prior firm with insider

. >> leslie picker, thank you very much >>> we're approaching the top of the hour, that means the team at "squawk box" is getting ready for the show becky quick, today, that mean, she's live in omaha with a huge interview coming up. hey, becky >> hey, mike, it's good to see you guys warren buffett is here, he's getting ready to come on as you know, this weekend, the company was out with the annual letter from warren buffett to the shareholders we'll talk about what's in the letter including the idea that the company saved about $29 billion from the corporate tax plan that went through we'll talk to him about that also talk about the idea that they have more than $116 billion of cash on hand. i'm wondering if that's burning a hole in his pocket if there are acquisitions that he'd like to see he did talk in the letter about how he'd like to buy something but they haven't found anything at a reasonable price. we'll talk about what that means for prices overall lots of things coming up, of course, guys, this is the first time we're sitting down with warren buffett and talking to him since

let's get out to leslie picker with the details it's something we like to call whale watching it is thatime of year when we know just what they're buying. >> exactly the whales were making some moves in the fourth quarter, one of the most watched investment firms, berkshire hathaway disclosing a new stake in teva the pharmaceutical giant struggled in recent years with declining sales in its generics business, berkshire hathaway acquiring almost 19 million shares worth about 3$360 million at the end of the quarter. that stock jumped in after-hours trading yesterday. green light capital's david einhorn piling in with new holdings including brighthouse financial. the bet there 6$600 million at year-end and coincided with new picks in the retail space including kohl's, lowe's, michael kors, nordstrom. third point making some sizable moves with a 4$400 million stake in intercontinental exchange, the parent company of the nyse i should also note that these investments are from the end of december and may have changed since then >> interesting to see some of those stocks moving on these disclos

>>less leslie, thank you leslie picker. >> tremendous volatility this afternoon, just in the last hourish fed from the previous meeting. the dow took off, up 300 points, but at the same time, the yield on the ten-year up to a four-year high around 2.95 back a little bit now, but the dow has now retreated a great deal shawn is here from wittier trust, and peter costa from empire executions is here at post nine. rick santelli, starting with you at the cme in chicago because it would appear it is the yields and treasuries there and that bump up that caused this volatility in the equity market there. what was going on? what do you think the treasuries heard in the minutes that pushed them higher? >> see, i think the treasuries are in a world of their own, but i do think that the stock market didn't like what treasuries did. i think there's a way to actually prove it, bill. let's look at intra-day of the dow chart, okay? now, if you look at this chart, right exactly at 2:00 p.m. eastern, like, exactly, the minute we were all on the air, we heard the minutes coming out, the stock market shot

beauty, and deirdre monitoring square, seema modi will have numbers from booking holdings, and leslie pickerg us results from hertz and express scripts. thank you. we'll see you in a couple minutes as this gets under way joining me now cnbc senior markets commentator michael santoli as well as michael from ubs financial services and chris burtelson joins us dow was up 2% at the last check. big laggard was disney after comcast said it will be going after sky. both chairs of comcast and disney disney down 4.5% on the bell on the s&p the big winner was aes while autozone dropped 11% to make it a big loser a rally down as well mike, real quickly, even though a lot of the weakness occurred much later than the original selloff, do we still tie it back to testimony from powell >> the testimony from powell obviously got treasury yields moving back up which took away this idea that maybe we'll get a reprieve for a little while longer on the interest rate concerns the dollar going up, as bill and bob were talking about, has also been a switch from the recent trend. yesterday we were kind of poking som

and leslie picker has done a great job showing some of the risk parity programs out there which simplyt you owe more stocks when vol is low and try to control that when vol goes up. there's a variety of different permane areas of how that works. i think that's over. the one thing we can learn is when all the pieces of the puzzle don't fit correctly, it's not going to be the same as other last times the way the interest rate complex, domestically and globally is acted today and around the globe the way foreign exchange rates behaved didn't much the mini crashes or big corrections of the past i would still be a little concerned that we don't want to just think that the controlling conditioning that many traders get -- today, for example, when we opened lower, popped up, went back down. it wasn't until we popped up and stayed up because many traders remember we have broken this pattern of steady eddy it's going to take a while for that conditioning to wear off. >> andy, what do you think the market is telling us here? >> i think this is more than a garden variety correction because we hav

it has a 171 page prospectus according to leslie picker and here we are one day later and everything is fine. >> we have all become -- >> nerd. >> ph.d.s in the fine print. >> xivs. >> the real question is is this over, is it ended now with the death of xiv >> that's the only question. >> of course not feet and i will go back and forth. he is probably right, vol will trend lower but in the low to mid 20s that's much higher than we've seen over the natural course of events the last five years. >> i think it's just a time frame, too because over a short time frame yeah we can be up in the 30s again. i think if you extent that out a little bit, i'm only talking weeks, we are going to find ourselves back in the 20s consistently, toer less, rather than going into the 30s and trading higher than that one thing about the volatility index. it is a measuring stick. i never trade the volatility index. i talk about it every day. i trade off of that through the ciders the spy, the s&p 500 i trade that and look at the volatility index only as a measure. >> the ixx is up >>> up next the man who ha

leslie picker following the money for us, as always.to see you. >> good to see you, too, scott greenline posting its worst performance ever, with 5.5% declines in january, as the s&p 500 rose 5.6%. einhorn saying that the firm's prior worst performance compared with the s&p came in march of 2000, which was a similar environment. he spoke on a call this morning. >> while, the environment has remained difficult with growth stocks accelerating their performance against value stocks this year, including february, we think a reversion may be fooin finally coming soon. >> einhorn noted the evaluation spread between long and shorts is incredibly wide he's hoping this year will coincide with some changes that will help turn around the portfolio. >> corporate tax cuts are a benefit to companies with profits. which are a hallmark of our long portfolio. higher interest rates are beginning to offer investors an alternative. they haven't had in many years and should render uncertain future profits and story stocks less valuable. >> einhorn saying th

leslie picker breaking it down for us back at cnbc hg >> cryptocurrencies were a bright spot this the hedge funds last year. and then the sell off took hold. as bitcoin plunged in january so too did many of the hedge fund that trade these things. new numbers out from hfr show that cryptocurrency funds declined 9.22% during the month. that compares with the broader hedge fund industry, which was up 2.82% and the s&p 500, which gained 5.7% so this is a 180 from last year, with crypto funds collecting more than $2 billion in assets under management and posting average performance of about 3,000%. by comparison, the best performing hedge fund we tracked gained 77% last year is this still the alpha generating strategy investors were clamoring for last year for one, crypto hedge funds need to be able to hedge or bet on the digital asset's decline as well, while still generating those outsized rurs. one fund is showing it's actually possible to outperform even when bitcoin slumps look at this chart of pan terra national capital up 140% net of fees while bitcoin trade lower the firm's bitcoin

manager was warning investors last year about the looming dangers of the short volatility trade our leslie picker is here now with more on that angle. >> that's right. perhaps we're still in search of answers as to what exactly caused the big swings in the markets, but i spoke with one investor last october who predicted the fallout. she said the prominence of traders shorting volatility could one day lead to a spike like the one we saw last week. >> we're in a very, very low-yield, low-return environment. and so investors have been forced to figure out other ways of generating yield in their portfolio, and i think a very common theme, and it's kind of the best sharp trade out there has been selling vol the problem is everyone is doing it now the big short is people who are short vol. now, that doesn't mean vol bill spike hugely at any point but it has the possibility to because so many investors are short volatility. >> nancy davis joins us now. hi, nancy. >> hi, leslie. thanks for having me. >> thanks for being here we should just replay that thing. if that doesn't mean volatility is going to s

funds on behalf of wealthy individuals are also skeptical >> leslie picker, thank you for that >> prison? >> knot profitnot profits. >> the word that our president used >> oh, president apple shares, a big driver of yesterday's bounce back as the tech giant climbs out of correction the company is holding a big event today, we'll get an analyst's take next. take a deeeep breath in... and... exhale... aflac! and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. so he had your back? yup in just one day, we process, approve and pay. one day pay. only from aflac flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it ca

leslie picker has more. >> the spotify f-1 has been filed for the direct listing as we have been reportingeeks now spotify was expected to do a direct listing which is different than an initial public offering essentially they'll just list shares and start trading as opposed to doing a marketed process where they have bankers and meet with investors and so forth. this is step one f-1. it's interesting to draw the distinctions between this and a normal f1 or s1 if it is a u.s. filer. they said they were listing on the nyse for shares to be traded under the symbol s.p.o.t. they didn't say how many shares would be resold. they are registering to resell shares according to the filing of course there are no underwriters on the front page as you would normally see with a traditional ipo. we are still digging through the numbers. we'll circle back with what we learn. this is the latest on the spotify direct listing >> thank you very much shares of pandora are spiking here about 1%. you can see it clearly on the chart. thank you very much. >>> pending home sales hitting nearly a four-year low fall

. >> leslie, thank you leslie picker there. is this the all clear? time to buy sign for retail stocks right now >> let's ask eddie roomba. welcome. it's funny to ask you both because you cover retail i feel like the answer is going to be yes. what do you think is the significance of some of these hedge funds getting involved now, the evaluativaluations get low. >> you should buy some retail. because retail is still going to be very tough for some people in 2018 these retailers that are maximum taxpayers are getting a big break. they can use that the drive the business, pass it back to the consumer, improve customer service. we're going to see a lot of the ones that list i've been recommending they're maximum taxpayers, they're going to get something back here. i think that's part of what's going on the rest of what's going on is people are looking at the way the market's trading and saying hey, it's a good time to be in more cyclical looking stock and we're there. yeah, i think this is a good sign to say yes, buy the ones you want to own. >> ed, you

. >> thank you >> good to have you on >>> let's go over to leslie picker again for more on fidelity'ssite issues. >> fidelity users experiencing some technical difficulties and errors in accessing their accounts following some of the volatile market activity we've seen a folksman for fidelity saying we are experiencing some intermittent technical difficulties on our websites i'm checking on the status to get more information but the same thing happened yesterday among several investment firms, including t. rowe price so certainly something we're keeping a close eye on >>> they say don't check your account when the market is volatile maybe this is a blessing in disguise for people who can't access it. we'll see. >>> when we return, goldman sachs david waldren joins us mom and dad got a new car... it's not theirs. it's mine. mine. mine. and it always will be, forever and forever. the new rx 350l with three rows for seven passengers. experience amazing at your lexus dealer. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevage

leslie picker with more on that. >> big short meaning it was a popular short. i spoke with quadrattic capital manager in november four months before the markets started their wild swing she focused on the risk on what she called a crowded trade and shorting volatility. >> we're in a low yield, low return environment some investors have been forced to figure out other ways to generate yield in their portfolio. a common theme, the best sharp trade out there is selling vol the problem is everyone is doing it now i like to say the big short out there is people who are short vol. that doesn't mean vol is going to spike hugely at any point, but it has the possibility to because so many investors are short volatility. >> that trade was turned on its head a week ago after the vix more than doubled in one day she spoke with us earlier today on cnbc and talked about the liquidation of an exchange-traded note that trades as an inverse to the vix with ticker xiv. >> it was the thing everybody was in that was the best short, meaning the xiv, to be short that because i've al

leslie picker joining us now with more on that.you have been talking to a bunch of them. >> absolutely. things were finally looking up for long short equity hedge funds in the second half of 2017 and in january, after taking years of pain, they had finally pared back their short exposure, riding the market higher, finishing the year up about 13%, thanks largely to their longs. but still returning about half that of the s&p. now, the market that we have seen this week is one of the main reasons why investors allocate to hedge funds in the first place. to protect against swings and selloffs, but not everyone within long short equity will be able to produce alpha in this environment. now, early indications are showing that human driven or fundamental strategies are having a harder time than those conducted largely by algorithms. that's according to data by credit suisse. the average fundamental longs are losing more than their shorts, so they're coming down along with the market. now, equity, those strategies have done better because

over the last couple of years but could this renewed volatility be just what the doctor ordered leslie picker joins us with more. >> for most hedge funds, this is the perfect medicine for others, it can be a death sentence let's start with who's benefiting from the last week. so, whenever the market sells off and volatility spikes, short, biased funds and long, biased volatility funds should benef benefit. short biased equity funds should benefit. same is true with higher turnover fixed income strategies which tend to do better when volatility increases because they found those forced sellers where they can really buy securities on the cheap. now, some hedge funds made come out from even all of this, specifically long short equity new data out from credit suisse showing popular longs declined about 7.2% and shorts rose about 7.1% it's likely that these strategies are trading about flat month-to-day. this indicates the selloff in equities is more index based than hedge fund selling individual names now, the populars are most severe in shops that were short volatility one analyst described this

leslie picker joins us now with more on the company's plan leslie, good morning. >> good morning, beckyey plan to engage with weapons manufacturers and distributors to better understand their response to recent events. they're referring to the mass shooting in florida where 17 people were killed the world's largest asset manager took some heat in recent days for holding double digit percentage stakes in the three publicly traded gun manufacturers. they hold the stakes passively through the etf and mutual funds. that means if an index provider holds them in their index, blackrock must replicate that index. blackrock doesn't have the ability to sell shares in a company even if they disagree with management but they can customize an etf or index. they are working with clients who want to exclude from their portfolios weapons manufacturers or other companies that don't align with their values. it's one of the byproducts of passive investing. for example, florida state board of investing holds $200 billion in gun stocks. it's tied to the russell 2000, guys. >> leslie, thank you very much whe

leslie picker, tell us more. >> t. row price writing in a tweet today we sincerely regret the website outage there were outages among a variety of investment firms. they haven't confirmed those outages like t.rowe has. dow jones reported that customers were unable to log into their vanguard accounts so obviously a byproduct of some of the selling that we're seeing today. back over to you >> thank you, lessee we're done here on closing bell but we're not done today there's a special tonight on today's market turmoil there you have it. 7:00 p.m. eastern. stay tuned "fast money" begins right now. >>> today was one of the most incredible days in stock market history and a very bad day for most investors we lost a lot of value the dow posting its biggest point drop in history. at one point the dow was down nearly 1600 points and entering a correction it came back a bit but it still ended the day down

leslie picker has more on the me meltdown >> that's the only way you can december skscribe it. after-hours trading an obscure exchange traded note used to bet against volatility came tumblingitumbling i down, crashing 85% it's called xiv and held largely by creditsuisse. its p in the after market, xiv continually traded well below that a source told me last night that credit suisse was still deciding whether to call the etn. the source also tells me that the firm's more than 33% stake is completely hedged still, concerns that credit suisse would have to write off its position sent shares of the swiss bank down 7% in ho after-hours trading. credit suisse did issue a statement saying activity is reflective of today's market volatility there is no material impact to credit suisse. the crash to xiv was mirrored by pro shares xvxy which also trays inversely to the vix >> leslie, what does any of that mean >> the best way to look at these things, they're like a bond, an obligation, a note this is not an etf they get bundled into the same structure. this thing did exactly what it was

contessa brewer covering that story for us lestly picker is here on post nine, leslie, with ellen colemanou both. much to get into i have to quickly ask you, ellen, because we just heard about steve wynn leaving his own company, you know, you're whole thing here is to close the corporate leadership gender gap. he was not replaced by a woman in this instance, but what's stepping down quickly say to you? >> the board is serious about the company and what it means going forward, and reputation is one of the things they need to guard, and he would be depressing the company's shares, putting uncertainty into that market, and so moving forward under new leadership it's an important part of every board's responsibility to their shareholders >> now, obviously, there were pretty significant allegations of sexual harassment at the company. as you were climbing corporate ladders, did you experience sexual harassment as you were, you know, rising through the ranks in corporate america >> no, the '80s were a different time, many of us did experience sexual harassment, and there were not as many places