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Expiration. Bill, the question which well get to in one second is why. So here is where we stand in markets right now. The dow is up 161 points. The s p 500 adding about 18 to 1854. If we hold, there will be a new record closing high. The nasdaq up 40 points above the 4,300 level at this hour, bill. Lets ask that why question you posed. Get to our closing bell exchange. Our round table includes Patti Edwards from u. S. Bank, Quincy Crosby from prudential financial, anthony chen from chase and our own Rick Santelli in the windy city as well. So, patti, why is the market up as much as the dow was up 190 points at the its peak today. Why is the s p near alltime high territory . Were getting through earning season and 75 of the reports have been better than expected. You add to that it looks like weve got a little bit of resolution in the ukraine and the fact that people had been taking money off the table and its time to get back in. I think people are just going where the best deals are and right now that seems to be the u. S. Market. The u. S. Markets. And thats where if you look at the action in europe overnight and asia to some extent, is it the g20 statement, anthony chen, in your opinion because id be amazed if Something Like that coming out of that group of policymakers would be enough to hand us almost 200 points on the dow . I think the g20 statement went a long way talking about boosting Economic Growth by 2 over the next five years and, of course, putting to rest any discussion of austerity whatsoever. All those things are suggesting that we are going to try to stimulate not only the u. S. Economy but the Global Economy which will lift up the emergency markets that really have been the real pain for Financial Markets for quite some time. Joining us, he made it through traffic, peter from Cantor Fitzgerald is also with us. Earnings are one thing, the fed the another with the tapering, and there are those who feel were in sort of a sweet spot right now with the slower growth, the tapering, the good earnings. Do you agree . Is that why this stock market is doing what its doing right now . Yeah. You know, the earning beats are fine, 75 beating. Thats actually not that out of line with the average beat rate. So i dont think its stellar earnings. I really do think its something of a goldilocks scenario in which we have just slow enough growth to keep the fed engaged and were not so late in the fed easing cycle that people are worried we dont have the fed backstop. I want to go back to the point anthony was making about the g20. Weve been going back and forth, is it true that Something Like this statement can really cause a rally . Youre saying austerity is off the table, thats supportive, but why did yueurope struggle s much and here in the u. S. We seem to have this levtation. Especially when you consider its easier said than done. Its easier said than done but even in europe youre seeing less and less discussion of austerity. You have seen spain, the Credit Rating picking up. Youre starting to hear Forbes Magazine saying ireland is one of the best countries to do business in the world when it was a poster child for problems a few years ago. Youre hearing less and less of that drag overall. Youre getting some good news in italy that maybe things are going to move forward and the ukraine situation that was mentioned a few minutes ago. That uncertainty is out there. And then lets not lose sight of the fact that the economy in the u. S. Is slow growing, it provides more room for Central Banks to do their job. Germany also today we came into this market with good data out of germany. The survey is a very influential survey. It provided a nice confirmation that at least in the largest economic block in the eurozone, germany, things are getting better. Thats a good point, quincy. So also over the weekend picking up on more people looking at emerging markets and saying, well, you know what . Extremely depressed valuations, tons of outflows, maybe now is the time to actually try and start to look for opportunity in this space. Is that a threat at all, that people are going to start to look elsewhere for opportunity as these indexes in the u. S. Plumb new highs . Perhaps so. Theres already been bottom picking and moving into certain emerging markets, but i think theres one other element here. Markets love m a activity. One of the things that we have seen is that the acquirers share price has moved up in a number of cases. Thats very unusual and its a very positive catalyst for the markets. It presents a halo effect on the sectors and subsectors in the markets, and the activity that weve seen is in number of sectors. So you continue this, you can see the market move higher. Wed like to see cash deals. Nonetheless, the market has been waiting for m a activity and its here now. Let me ask mr. Market the why question today. Rick santelli, in your view why are we rallying like we are today . Whats going on . Well, the weather is an excuse potentially to keep rates in check, and they are in check as you look at these charts. Weve basically gone nowhere since february 12th. The last time we touched 2. 76 level and since then weve added 300plus points to the dow. And i think when you add into that the notion that some of the data has been weak even over and above any weather implications. So, yes, you know what this is about . You cant fight it sometimes. And i understand that. As long as the three or four investors behind you are willing to pay more, as long as its fresh in peoples minds that 55 people went for 19 billion, theres obviously no shortage of liquidity looking for a home. I think that its going to continue. Its not surprising at all. How long the game goes on, thats another question, but obviously investors are interested in that today and i can respect that. And, rick one last point, bill, and that is that the head of the central bank in india a couple weeks ago was raving somehow Central Banks werent doing anything. Today his tune changed saying Central Banks around the world seems to be listening to whats going on in emerging markets. Thats the message equity markets are hearing around the world. Everybody seems pretty positive about the markets about you theres always going to be another side of the trade and it came this morning from our friend james grant, the longtime editor of grants Interest Rate observer on squawk box. Hes a hard money, sound money kind of guy, and hes worried about the impact that fed policy has had on all the earnings that we love so much right now. Here is what jim said this morning. My fear is that because Interest Rates are suppressed, therefore earnings are inflated, so when rates go up again, suddenly the hall of mirrors is shattered and we look at each other and see what actually is rather than what the fed wants us to believe. Patty edwards, have we been tooli fooling ourselves . Revenues has only gone up by about 7 . It is final for revenues to start picking up the pace and thats part of the reason youre seeing the m and a. Companies are looking for Revenue Growth. They will have to get it somehow and i think m a which be way a lot of them play it. Its a great point. Its one thats getting a lot of chatter, which is its fine that you generally have seen the price of the index track earnings, but there really hasnt been that Revenue Growth. So how do you read this . Do we have to kind of have a transition here where that top line does pick up . Well, i would think eventually we need to, and i would agree with mr. Grant in that you had two effects on low cost of capital on the markets. The first is obviously through lower interest expense and better net earnings and the second is through price earnings ratios. When the cost of capital is low, pe ratios tend to rise. And so you have had a double whammy, and we have really not seen robust Revenue Growth, and, again, i keep coming back to the fact that we have an accommodative fed and a growing Balance Sheet this year. The Balance Sheet will grow another 7. 5 and at the end of the day when you boil things down, thats operative. Rick, youre not as much you are a fan of the fed as much as jim grant is, but i wonder as skeptical as he sounds about the impact of fed policy on earnings, isnt this precisely why the fed was adding all that liquidity to the economy right now, to help the corporations through these tough times. I dont know. I hearken back, i kind of remember the dynamic was to help main street actually, but, no, i think jim grants words should be carved in stone. Very little doubt in my mind hes right, but that isnt the issue of him being right. The issue is how long will the game be afoot. How long will i be able to look behind me and see investors champing at the bit to pay higher than my high bid . Thats the question. Normally these things take a quhol lot longer to work out than many investors believe. You raise an interesting point. I wonder what quincy thinks about this. How much of this policy has been directed at helping Corporate America which in fairness is indicative of main street. These are our big employers not much trickling down. You dont need an umbrella. Theyre the ones buying shares and benefiting from all of this. Absolutely. The fed started this to create liquidity in markets. Then they moved to the jobs mandate. It was supposed to be trickle down. The virtuous circle that ben bernanke outlined did not actually take place despite Auto Industry and housing, but ill tell you this, we saw a taste of what happens when the fed changes, not may 22nd, but in june. Look what happened to markets globally. The market saw a taper of tightening. Everything sold off. When tightening happens, something always breaks. It took fed speakers, it took the bank of england, the European Central bank to calm things down those two weeks in june. We would have run into absolutely a lack of liquidity in markets. So we got a taste, a dress rehearsal of what can happen. By the way, janet yellen, she goes up on capitol hill this week. I dont want to be long going in because she is careful in those q a. They can twist it, they can f torture going long yellen has been they cant handle normalization. Thats whats going on. This is fun. I always love sparking debate about fed policy. Oh. Thanks, everybody. See you later. Appreciate it. Great to see you guys. Is this me . Thats you. All you, sir. We have 50 minutes left in the trading session here, and weve had a rally. The dow was up 190plus points at the peak today. Now we have a gain of 154 right now and were watching to see if the s p is close at an alltime high. Much more on this rally is coming up. Plus, tech deals helping to fuel this strong market. Theyve been happening at a fast and furious pace lately. Coming up, a look at whats driving that and which Companies Might be next. And Dreamworks Animation is getting away from its movies core. First they announced a publishing unit. Now theyre opening a shrek entertainment attraction in london near the london eye. When we come back ceo Jeffrey Katzenberg will join us and talk about this ambitious move in a first on cnbc interview. Tdd 18886486021 there are Trading Opportunities tdd 18886486021 just waiting to be found. Tdd 18886486021 at schwab, were here to help tdd 18886486021 bring what inspires you tdd 18886486021 out there. 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It is just another step in what is, you know, a path to building a branded Family Entertainment company, and, you know, diversifying, using the great characters and stories and ip that weve built up, some of which we acquired with Classic Media last year. And suddenly there are many, many opportunities for us to really diversify the company. And the stock is up on this news. How long will it take before we start seeing profits generated or real revenue generated as a result of this deal . The first will be next year. Theyre on track to open up the first attraction right by the eye in london which is maybe the greatest piece of real estate, and that will be Spring Summer of next year, and then, you know, weve committed to roll out a half a dozen of these with merlin, and, frankly, in success, there will be many more. Its a great product and theyve done a wonderful job building these around the world. Now, you say its a great product. I think its important to make it clear this is merlin is le legoland. Youre talking about a whole different type of entertainment. They do legoland, madame tussaud. They have a number of midway products. Theyre a couple hours experience in it. What were doing is really almost like live theater. You the audience will participate in a story with live actors and our characters from shrek and you have to help, you know, solve the story and save the day. And its very clever, and i think a really fun, unique way to engage with our characters. Kelly and bill, want to jump in . Thanks, julia. Jeffrey, its great to see you. Just curious over time what you think the ratio of nonmovie income to actual movie income will be for dreamworks as you roll these kinds of things out . Yeah. Its a little hard to right now today, you know, 75 , 80 of our income comes from our core movie business. You know, my ideal is three, four, five years from now that would come down and be 30 or 40 of our business. Its still the heart and soul of the company, and without those great new movies and characters, the rest of it cant happen, but i hope we are able to grow the Company Significantly now out into television, out into parks, out into publishing, many different things. The Publishing Business you Just Announced earlier this month, whats your plan there . How big could that business really be . One of the real places of Great Success in the publishing world today right now is kids, and both e publishing as well as hard covers. We own golden books. You know, we all are familiar with that as a wonderful, wonderful property. And with all of the other Movie Properties and now Tv Properties coming from netflix, we actually now have the scale to have an inhouse publishing operation. Great. Bill . Jeffrey, on the whole question of distribution, its clear youre testing different modes of distribution out there with publishing and with the licensing to merlin and, you know, this tablet that youve developed as well. But what about just going whole hog into electronic distribution of some kind . Our parent comcast has made it clear that thats content and distribution are the ways to go to survey. Why dont you guys just merge with netflix. You and Reed Hastings could run a whole empire. Im sort of kidding in that regard but you know what im talking about. Are you going to at some point make a full commitment to distribution to complement your content . Well, a couple different ways. First of all, netflix has become really dreamworks probably most important partner and customer, and we made a huge deal with them just literally six months ago. Game changing for us. In making new television content, very specifically for that platform. So, frankly, their growth, this new deal that theyve done with comcast, thats all good for us. Were very excited about it. But i think the next place for us where youre going to continue to see real opportunity is in digital distribution. As you know, we bought awesomeness tv last spring, which is a teen and tween girl youtube channel, which has had unbelievable growth and continues to, and were going to launch a couple more verticals in that same space in the coming months. So that now gets us into distribution, direct distribution. We look forward to seeing where that all goes. But i have to ask you before we run out of time about the cnbc 25. Youre named as a contender, and were curious who you think should be on the list of the 25 most influential people in business. Well, so i can only relate to my world here. I would say for sure Reed Hastings and ted serandos as a pair. Brian roberts, you know, i think and steve burke in terms of what they have done. You know, i think one of the really guys who has done one of the most amazing jobs as a ceo today in our space, probably the best job, bob iger at disney has really done a remarkable job there. And, you know, i think a coming up and getting ready to is theres a new head of youtube, susan and robert kinsel. A lot of contenders. Youre very modest, mr. Katzenberg. Thank you so much for joining us. We really appreciate it. Thank you, julia. Thank you, jeffrey. Great stuff. We have 40 minutes to go to the close. The dow is up 150 points at this hour and the s p 500 if it closes here, bill, i believe it will be closing a thet a new re high. What will russian vlad nelad putin do now that the government he supported collapsed and hes not confined by the olympics . And activist investor carl icahn is still at. Accusing Marc Andreessen of putting his interests in front of shareholders. So how has it right in this case . Is it icahn or an drdreessen . 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Weve got some breaking news on bitcoin. Mary thompson joins us with whats going on here. Of course, on the day we had the head resigning from the big coin foundation, more news for bitcoin advocates. The security for trust wave is saying cyber criminals have released a malware called pony that basically steals digital wallet that is contain bitcoin and other digital currency. This happened from september to february and 220,000 worth of bitcoin were stolen. A malware called pony released to steal thewallets that contain this currency. Beware the trojan pony. Yes. Russias Prime Minister is questioning the legitimacy of ukraines new government saying instability in that nation threatens russias interests. Our chief International Correspondent Michelle Carusocabrera still in that area, is in kiev now with the latest on all the uncertainty in ukraine as many wait for what Vladimir Putins next move will be. Good evening, michelle. Yeah, we havent heard directly from Vladimir Putin yet, bill. We have heard from several of his deputies and we know theyre unhappy with the situation here in ukraine and the president of france, Francois Hollande called putin today and spoke with him on the phone trying to encourage him to back a peaceful and negotiated settlement here, but what putin will do what his next move will be in what has become this chess board of ukraine is still hard to know at this point. At the same time the west tries its hand at influence as well. The eus Foreign Policy chief Catherine Ashton was here in kiev. She was meeting with opposition leaders as they try to form a new government. The parliament here, a coalition government, and also with members of the International Community trying to come together and put together some kind of aid package for the country whose economy has really been pummeled by nearly four full months of protesting. Last week that crescendoed in a bloody confrontation between the protesters and the government and today in the square there are still thousands of protesters, but it is much quieter though extremely mournful and somber. Russia is extremely unhappy that their ally, Viktor Yanukovych has been ousted and is on the run. Hes wanted for the bloody showdown we saw in the square last week. It remains to be seen what theyre going to do. Ukraine is at a pivot point between the east and west and both areas of the world are fighting over it to keep it in their sphere of influence. Guys, back to you. And keeping michelle busy we should add. Michelle, thank you so much. We know its been a long day, a long couple weeks as well. Hermitage capital ceo bill broward saying putin should be concerned about the regime change in the ukraine because if it happened in ukraine, it could also happen in russia. Bill joins us tonight from geneva, switzerland. We know youre no fan of putin. You know that country better than most. First, explain your current relationship with Vladimir Putins government and how it got there. I was once the largest foreign investor in russia with 4. 5 billion invested in the stock market. I started uncovering corruption in the companies i invested in and started to expose it, and in 2005 i was expelled from the country, declared a threat to national security. The police then raided my offices, seized my documents, and then stole 230 million of taxes i paid. My lawyer uncovered it and testified against the police. He was then arrested, tortured and killed in 2009, and they have since gone after him posthumously prosecuting him in the first ever posthumous trial in russia. I have a lot of experience with putin. While weve been focused on what ukraine is going to do, you say there should be just as much concern about putins future being on the line here. Even as people in the u. S. Are talking about how putin has a step up on hes outmaneuvering us on the chess board and all of that, what is your read here as to how strategic ukraine is for russia and how vulnerable putin is . Well, i think we have to understand that ukraine is kind of like a Junior Varsity version of russia. You had a clep toe kratic regime. Its a much bigger version of the same thing in russia. What putin got to see was people said, were fed up with this. We dont want to have it happen anymore. And no matter what tricks the government in ukraine tried to play, the power of the people overcame that, and this is putins Worst Nightmare because if it can happen in ukraine, it can happen in russia, and he doesnt and putin doesnt know what will trigger it off. In ukraine i dont think they ever would have expected an eu treaty would have triggered a revolution but thats what happened. Thats the thing that triggered this whole confrontation was the treaty is thee u at the expense of any relationship with russia at the same time. So now what happened do you think to that eu treaty and what does putin do about that do you think . Well, the eu has said very explicitly that theyre ready to open up the talks about the treaty again. I think the u. S. , europe, and others are ready to step in with imf funding for ukraine, and i think the Ukrainian Government would rather take their money from the west than from russia. I think you will see a treaty being signed. I think you will see financial package being agreed with ukraine, and then i think what you will see is russia theyre not going i dont think theyre going to send troops across the border. That would be crazy. But what i do think you will see is that russia will do all sorts of provocative measures, really subtle provocative measures over the coming months and years to try to bring ukraine back into their influence and they have a lot of leverage. They have gas. Ukraine lives off russian gas. They have a lot of trade with russia. Russia can play hardball and they will because thats what they do. Bill, at the same time, doesnt russia need ukraine in order for the pipelines that funnel gas to its western european customers, its a relationship where they both need each other, do any not . And how much does that complicate the billions in aid that whether its europe or the imf or entities in the u. S. May want to hand over . Its not so simple as just relinquishing funds, is it . Youre absolutely right. I mean, this is a highly complex, messy exercise which almost certainly wont work out for anybody. Ukraine has flipflopped from one side to another. There was an orange revolution where the western candidates won and then the yanukovych came in on the russian side. Its a tug of war going on between the two sides and its not going to be simple no matter what. Bill, does it all ultimately depend, and i hate to put it this simply, but on the oil price . Thats how much room to map nuf maneuver to support ukraine that russia may ultimately have . I think everything in russia depends on the oil rice. The reason why russia hasnt had a yanukovych revolution is because people are richer in russia than they are in ukraine. Why are they richer . Because the oil price is above 100. If the oil price were to drop and theres lots of reasons why it might, drops down to 60, then russia will be in the same situation in the future as ukraine was in today. Wow. Bill brouder, good to see you. Thank you. Thank you so much. And meantime, markets going lower here. Were still with a healthy gain of 137 points. The s p is up 14, but its getting closer to that alltime height territo high territory. And, bill, ben willis, some of the floor guys talking about verizon and how a rebalancing there related to the vodafone deal may be impacting the appearance of the buy or sell close pressure. Well keep an eye on that. The s p 500 is on track to close in uncharted territory. The question now is whether its full steam ahead for the bulls here. Well get some top Money Managers to weigh in on that. We have a huge week coming up for retail earnings report. How will this rough winter impact the sectors bottom line and could pent up demand result in a spring sales surprise . Let it ever be so. Were coming up with that in a moment. My sinuses are acting up and ive got this runny nose. I better take something. Truth is, sudafed pe pressure and pain wont treat all of your symptoms. Really . Alka seltzer plus severe sinus fights your tough sinus symptoms plus your runny nose. Oh what a relief it is let it ever be so. Im looking forward to. Y retu for some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Welcome back. Rally day on wall street. This has been one of those days where when you ask why is the market rallying, it depends on what you and. Short covering, the g20 communique over the weekend, the fall of the Ukrainian Government, all the mergers and acquisition activity, and on and on and on. The simplest answer, kelly, more buyers than sellers. The dow up 145. At its peak it was up 196 points today. The s p is in record territory right now with a gain of 15 points. How about more buyers than stocks, bill . Barrons making the point again the wilshire 5,000 is the wilshire 3666 in fact. Right. Supply and demand. It always comes back to that. Some retailers have been blaming bad weather for lackluster earnings recently. But not every retailer is a loser from the polar vortex. Courty reagan takes a look at that part of the story. Expect to hear a lot of weather commentary but for good reason. Its not really an excuse when it has a real negative impact though you probably wont hear a lot of thanking Mother Nature for those that it might have helped. Barclays retail analyst allen rip kin thinks home depot was a beneficiary. Jeffreys is recommending deckers, the company that owns uggs saying channel checks con i remember the ugg brand has benefit the immensely. We believe sales trends over the holiday period and throughout winter have been robust. Jaffrey thinks the cold weather helped macys early in the quarter but tight control of the inventory likely didnt leave left of it to sell in january and polar vortices likely kept shoppers inside. Maybe theyre shopping on websites and potentially shopping on more macy websites than Department Store space which havent had as much traction online as macys have. We want to bring in evan gold who analyzes the impact of weather on business and have a little bit more discussion about this. So etcvan, were going to get me retail numbers later this week but people are trying to figure out if january and february were about unusual weather patterns or something else. Whats your read . Weather certainly had a pretty Significant Impact so far this winter. Weve seen it where all these major storms have kept people housebound, unable to get out. So it definitely is going to have an impact not only on overall retail traffic but individual category sales as well. Do you think it creates pent up demand or is this a lost opportunity . Are we losing business here that wont come back . I think in certain respects youre going to see business that just doesnt come back. You know, the recent polls were about a 50 billion impact. Certainly a certain segment of that does come back, but we think theres about 4 billion that simply doesnt come back based on restaurant traffic that you dont make up, hourly wages, just simply sales that dont get made up. There will be some pentup demand as we saw here in the east last week where it finally got to feel a little bit like spring, people got outside, start to think about those outdoor projec projects. There will be a spring, i promise you, but right now were still a little stuck in winter. Ill leabeliever it when i s it. The city had the impact of Higher Energy prices is taking 20 billion out of consumer wallets in First Quarter. So is the impact almost perhaps being felt more subtly through Higher Energy prices do you think . Absolutely. Theres going to be a certain amount of sticker shock as those heating bills come due. Whats that going to mean is there will be more money spent on basically people paying their bills and less discretionary income, so you may feel the impacts a little bit over the next couple of weeks but, again, spring will hit and customers will get outside and look to spend. Courtney, were making this doom and gloom scenario out here. Theres got to be winners in some of this in the Retail Sector as well. Sort of the ones we ran through, home depot and lowes will sell shovels and snow blowers and then you have decker. Some analysts looking at that and saying, ugg, that brand, its got to do well when its colder outside. And channel checks tell us thats the case. You have others its going to hurt. Nobody wants to get out of the house when its really, really cold. The Winter Weather makes it tough for those delivers it come through. Folks are shopping online. This year i think the weather probably did have an outsize impact but the warmer it gets and potentially the earlier it gets, maybe that pent up demand is actually even stronger. People feel so good and are so happy to see the spring, maybe they will buy more spring merchandise. I dont know if we can real quick show whats happening with treks. The shares are up 20 . They make a lot of sort of composites, plastic and wood materials. Evan, theyre up 20 . Theyre completely exposed to trends in the housing market. For anyone who is looking at the housing data and wondering if thats a passing phenomenon the way it cratered in january and february, a company like trex seems to be saying, no, were seeing through this. Absolutely. All of the outdoor home centers right now, while courtney was saying they had a favorable bump due to, you know, all the cold weather over winter, spring is their christmas. They are ready for spring as well, and theyre very anxious for the calendar and Mother Nature to start screaming spring so people can do those decking projects, all those outdoor lawn Care Projects they have on the docket. Evan, thanks for the weather forecast. We cant wait. Courtney, thanks. Thank you. Great to see you both. We have about a little more than 15 minutes to the close as we watch the indexes. The high of the day we were almost up 200. Were only up 130 right now. The dow has not had a 200point gain yet this year. Correct. Its barely had a string of strong gains. Were back where we started jan 1 basically. But is this rally for real . What happened to that 10 correction we were supposed to get . We have an allstar panel on the markets coming up on that. 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Kelly, were going to start with netflix hitting a record high on news it agreed to pay comcast the parent of this network for faster speeds for its streaming services. On the tech front, another deal to add to the books, rf microdevices and Triquint Semiconductors deciding to merge in an allstock deal. Health care is being led by huma na. One of the leading providers of plans said rate cuts may not be as bad as anticipated. Trex hitting a record high as the composite deckmaker reported better than expected earnings. A two for one stock split and a 50 million stock buyback. Dillards losing ground after reporting weaker than expected Fourth Quarter earnings. I think we have trex on our front porch. We used it in the ceiling. Did you lay the boards yourself, bill . Oh, you bet i did. I guess theyre not boards. Theyre not real wood. Theyre fake. You have to have something to hold up against this ice and weather. Im not a carpenter. I just play one on television. Heading towards the close, record territory for the s p, but the dow is nowhere near that. Were well off the highs of the session. The industrial average was up 196 at the peak. Up 147 points right now. Yes. And investor optimism about the state of the economy, is that one reason why the s p 500 is closing at a new high today . Coming up, well hear from someone who says the economy is actually a disaster right now, and thats echoed among a lot of people. What does he see that most investors dont . Find out coming up on the the closing bell. Like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com some Brokerage Firms are but way too many arent. Why . Because selling their funds makes them more money. Which makes you wonder. Isnt that a conflict . Search proprietary mutual funds. Yikes then go to e trade. Weve got over 8,000 mutual funds and not one of them has our name on it. Were in the business of finding the right investments for you. E trade. Less for us, more for you. The funds prospectus contains its investment objectives, risks, charges, expenses and other Important Information and should be read and considered carefully before investing. For a current prospectus visit www. Etrade. Com mutualfunds. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure and Global Broadband network free you to focus on what matters. With Custom Communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. Every day of the week. Centurylink® your link to whats next. Welcome back. We are off the highs of the session. The dow was up almost 200 points, but now were up 137. Still a pretty decent way to kick off this monday as the s p here, bill, could be closing at fresh record highs. 1,le 5 1,851 is the latest. Perhaps you can tell us, a, whats driving these gains today. B, whether investors are facing a climate of higher Interest Rates, lower Interest Rates. Does it not seem like were searching for direction here . Well, i think were with regards to higher or lower Interest Rates, its still very much a wait and see. We would need to see better economic numbers before we even could consider the fed talking about tightening in 2015. But as for the reason for the stock markets going up, look, were coming off a good q4 although earnings expectations have really come down for 2014. Theres basically no bad news. Theres a lot of us with a wait and see with all the economic numbers coming out. What do you think, oliver . Generally agree. I think if you look at q3 and q4 gdp numbers for the u. S. , they were very, very strong, strongest in a dozen years or so. Youve had good corporate earnings come out this year and this past quarter and the anticipation is for that to continue to strengthen. So general mood on wall street right here on the New York Stock Exchange with investors, were talking to individual investors is were more concerned about missing out on gains than were worried about losing money right now because the last few pull backs have been very, very small. I remember when we were talking about a month ago we were sitting here at the end of the january saying is this it . It was a 6 or 7 . If you blinked, you missed it. Exactly. Let me ask aaron erin a question. Since you guys at s p capital iq are focused on earnings, the contention is fed policy has distorted the earnings picture. That it has artificially inflated corporate earnings with all this easy money out there right now and its going to be an ugly earnings picture as the tapering continues and they start to remove that. What do you think . I disagree on that point. I think when you actually look at the difference between the earnings and the revenues, we can see that there really isnt that much money going out. Our Revenue Growth for last year was 2. 8 . Theyve ratcheted it down for 2014. Its about companies being more profitable. So certainly having cash flows does help that momentum, but i think what the fed really has done and ultimately was always their goal was increase housing, get that economy rolling, get people spending on housing, and, therefore, the cash flowed. We have to go but real quick . Shes absolutely right but keep in mind earnings have been growing and theres strong cash Balance Sheet and dividend payout ratios are very low. There wont be a reckoning if Interest Rates rise . There may be a reckoning but it certainly wont be all of a sudden. I guess thats mildly reassuring. Thanks very much for being here this afternoon on a monday where we have kicked thing off on a pretty strong note. Well come back with what could be a historic closing countdown here if the s p closing at a new alltime high. Will we or wont we . Thats the question for the s p in particular. Youre watching cnbc, first in business worldwide. 0 thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. 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Three minutes left. While im thinking about it, im coanchoring the nightly Business Report on pbs. Check your local listings for the time. It looks like we will have an alltime high for the s p but the dow continues to come appreciably off the peaks of the day. The s p needs to close above 1,848 and change. Were there now with a gain of 13 points. The dow up 123 as we head toward the close. Bob pisani youre standing near a post on the floor of the Stock Exchange. Were at the post of verizon. Take a look. We have a lot of people. Verizon completed its vodafone transaction on friday. They paid a large amount of money, verizon did, to vodafone to buy out its interest in Verizon Wireless. Verizon now controls Verizon Wireless. It has to be reweighted in the s p 500 and thats what the traders are doing here. Theyre looking to get the final Closing Price on verizon to buy into that company because its being reweighted. Meantime, bill, its getting a little hairy with this closing high. 1,848. 38 is what you need did i jinx it . It is coming back off now. Were 1,849. 6. Were one point away. It can go either way right now. We were much higher a little while ago how much of that was short cover . A lot of guys have been telling me they think its Short Covering today. Earlier in the morning as we hit the new highs, the market just rocketed up. The intraday highs before 10 00. A lot of people simply have not the minute that happens, you get the psychological thing where people worry and they get back into the market. Theyre worried about losing out. Once you pass these intraday highs, but weve come off of that quite considerably and 1,858 we were around, so we were almost 10 points higher but it looks like we will make it. Verizon, all the Telecom Stocks are trading to the downside. Normally the reweightings do not result in dramatic price changes if its dot the way everybody wants it. They result in big volume moves. You will get all these people here have tens of thousands. Back to you, guys. Thank you, bob. Well keep an eye on the s p. The closing value is 1,848. 38. Were about a point above that. So as we head toward the close here, it looks like we may do that. The dow really pulling back. Again, at the peak it was up 196 points on the open this morning. Now a gain of 116 or thereabouts. And theres the s p as we head toward the close. Stay tuned. Much more coming on the second hour of the closing bell, and this week we got retail sales as we highlighted and janet yellen testifies to the senate on thursday. So a big week coming up. Stay tuned now. Here is kelly evans and company. Ill see you tomorrow. And welcome to the closing bell, hour two. Im kelly evans, and its going to be a squeaker here for people looking to see whether, in fact, were closing at new highs for some of the major indexes on wall street. Weve started off the monday on a positive note but was it enough . It looks like we lost momentum just heading into the close. I feel like im calling a footrace or something. Here is a look at how the major indexes are doing. The dow looks like it added about 102 points when all is said and done to 16,205. The s p 500, this is the one weve been watching, and it looks like it will be just shy of the 1,848 level that in midjanuary marks the closing high. So we will not in fact have gotten there today. Well watch and see if the numbers change but the nasdaq meanwhile adding about 30 points. The outperformer of the session though, not by as much as weve seen at some points, 4292 is the level there. Lets get right to it right now with todays panel. Joining me now, dan greenhouse from btig, very very own Kayla Tausche and dom chu, steve grasso will join us in a second and i spy guy adami, our fast money trader. Maybe dan, you can tell us why stocks rallied so much today. Id like to say its because everybody is celebrating the life of great hall ramus but its probably not that. We have reversed the previous decline related to the emerging market kerconcerns. It wasnt systemic. Guy, the question becomes, all right, so we had this pop. People are moving past those concerns. Why couldnt we hold the almost 200point gain we had for the dow midday . Look, i dont know if it is systemic or not. I think the jury is still out. I think for now it seems like everything is calm, but things could flare up at any moment so im not necessarily in that camp. Why didnt we hold the highs today . I think the animal spirits are at work. Im not really sure why we went up. I think a lot of it was m a activity. You saw the facebook deal. I just think its exhausting itself. Look, i got to tell you, you know i have been wrong for about 40 or 50 s p points. You thought we would go lower than we did. Why does everyone cite merger and acquisition activity as a sign that the market will go higher . We have been talking about how theres no confidence in the Corporate Board room. They havent been willing to put that you are money where their mouth is and look for growth. This is a sign that maybe they are looking for growth if they havent been able to see it, if they have actually been becoming leaner and increasing their margins, that maybe we are at that peak and maybe they do need to start doing this. I dont think that the activity that weve seen so far is really enough to say this is going to be a blockbuster year for m and a, but its putting a bid under the market when there isnt a lot of reason to say theres a reason why people are buying. The last blockbuster year for m and a was 2007. 2000 actually. Some of the best years, wasnt this the very peak of the dotcom boom . Thats why the Facebook Whatsapp deal had so many people talking because it was almost this question of are we already signaling or coming towards another market top here . When you have as many all stock transactions as you have, its one thing when youre borrowing money, deploying cash, if youre using your stock, the conventional wisdom is youre using your stock because you think your stock is richly valued. More than anything else, it hasnt just been this year in 2014 where you can make money just anywhere. The market is pretty much flat for the year even with these kinds of gains. You cant say it was defensive and cyclical. The best performing sectors are defensive like health care. But the worst performing are telecom. Its a stock pickers market. You have to pick where you put your spots. Very quickly, with respect to something dom just brought up with respect to the allstock transaction, from an academic standpoint, what you want to see as an existing shareholder is a takeover with cash. That means any assumed accretive gains to your stock price, youre going to get all of them. Why should you use cash when you can lever up . This is a much more complicated conversation, but in theory if im an ibm shareholder to use an example, if i buy another company with cash, anything that that Company Provides to me in terms of accretive gains and by accretive you mean what . By buying that company thats going to be beneficial to me as an existing shareholder, i get 100 of those gains because i paid for it with cash. If you pay for it with stock, in theory and again in an academic sense, you are sharing those gains with the new existing shareholders. Dan is just being greedy. He just wants the cash all for himself. A lot of times especially recently you have seen a caller so there is a range and there is sort of a guaranteed amount you will get, but it is nice to see some of these acquiring Companies Giving stock to say, hey, look, you can participate in the upset. This can go one of two ways. At least theyre giving that you opportunity. When you use Equity Capital, the cost for Equity Capital is a lot higher than the cost of using debt. Meaning you have to generate a lot higher of a return on that capital than you would using the debt. When you use stock there are pitfalls there as well. I dont want the producers to scream but we do need to talk about why this tax code, our system still prioritizings or incentivizes people to use debt instead of other means. Whether its banks trying to raise capital, whether its Corporate America, whether its individuals. Steve grasso is going to join this conversation right now. I dont want to throw this big question at you. Maybe we can just talk i would have rather jumped in on the other one. Youre just off the floor. I see a lot of activity at verizon. Does that have anything to do with the lateday selloff we just had . This is obviously with their own issues. This is reweights with their own issues internally with verizon, specifically how they generate between the indexes that need to hold it and everything thats going on with the stock. Its related to the vodafone deal. Totally. Youre going to have another issue tomorrow as well because you have guys that are evening up and turning their position based on the vodafone. If im holding the s p 500 stock, do i have to worry about verizon right now . No, i dont think so. I think its a matter of getting back to what dom had said, if you think the overall market is going up, then you own everything, and i know you said its a stock pickers market but 70 of all stocks trade with the overall trend. So right now dan has been bullish. Hes been right, right, dan . Im not going to deny. So he has been bullish. Hes been right. But this can turn around quite quickly, and then 70 of all stocks go straight back down again. Guy, what are you seeing in terms of correlation . What are the patterns here in this market as weve worked through the first couple months of the year, we came off a little bit, were right back up, it almost feels like march 1 is a reset of jan 1 or have things changed underneath. A couple sectors have stuck out to me. Defense stocks have been unbelievable for the last 18 months, something we have talked about for a while. Look at like Lockheed Martin today. Interesting when theyre cutting back our defense budget, cutting back our defense to the levels we last saw world war ii, so its interesting those stocks have been on fire. Health care obviously great. Then you start to connect the dots and look at trex today. Thats pretty interesting. That trade is over but what does it mean for home depot tomorrow . And my sense, you might see a ridiculously good quarter out of home depot and maybe we take out the 82 level. So a lot of this is connecting the dots. Looked a nvidia. That stock has done nothing for five or six years. Its gone slightly higher but not nearly as much as the tape. Maybe theres something going on there. Maybe all the m a chatter is starting to catch up. A lot of interesting krog ccros currents. Its up regardless. You want to make money, you want to be right. I want to jump in real quick and draw everyone he is attention to whats happening with the s p 500. According to bob pisani, we havent closed this index yet because we cant close it until this vsh is verizon is revolved. So you might see the numbers moving around a little bit on your screen and that is the case. Theres a sizable crowd gathered around there, 1,847 is the level. Were watching the level closely again because if we close above 1,848 and change it will be a record high. But there is this issue steve was talking about that has to do with verizon and the vodafone deal. Theyre rebalancing. If you own Something Like the s p 500 which all these big funds do or you have to track it, whatever happens with that index affects you and affecting buying behavior. If we can bring this back away from the he esoteric debat what matters is earnings. Were coming out of a Fourth Quarter earning season that was stronger than the average strategist expected. Earnings were up 8 to 10 in the quarter. We can argue about why that is or where the growth came from. At the end of the day as larry kudlow likes to say, earnings are the mothers milk of stock prices and if youre going to keep having earnings quarters like we did, stock prices should ultimately keep moving down. I will go with this 3 . Weve been saying that for three years now. That makes it even more ag e egregio egregious. Earnings estimates have already come down significantly over the past two months. Analysts are trimming down their estimates in some ways by half to what they thought it was just at the beginning of january. So again there are some expectations. Earnings are backward looking where the s p is the best forward looking indicator. True. The problem were dealing with now is how much of this as you guys have been covering is going to be blamed on the weather and people think theres pent up demand. Thats why i think the trex case is so interesting. Weve had 2. 9 Revenue Growth for this past quarter. As much as we can say theres been 8 to 10 growth on the bottom line, we cant argue about where thats coming from because largely its coming from cost cuts still. Can i jump in . I know you want to move off this, but nat gas prices last year average 3. 62. Now theyre averaging 4. 88. Thats a huge increase to discretionary spending. Where is that going to come out . And citis figure for this, its nice to have some sense of the hit, were talking about 20 billion out of consumer wallets q1 on slightly higher gasoline prices and nat gas prices which explains some of the weakness. And compound that with the fact that some of the emergency Unemployment Compensation programs, the extended benefits on the part of the government expired, there are reasons to think as grasso just noted that the First Quarter might not be gangbusters. By the time earnings season comes around, we get a lot of retailers this week but by the time earnings season comes around, how Many Companies will be talking about poor weather as an excuse to either bring down they already are. I totally agree. That said, very quickly, after a 30 up year for the s p 500, would it be the worst thing in the world if q1 was up for down plus or minus if we took a pause. He have a jpmorgan investor day tomorrow. Are there a couple quick points people need to watch for . Three things i think people are watching for. First, capital return to shareholder. They are going through a stress test. They had a Buyback Program and a dividend in place but they dont have a great relationship with washington these days. The big key is whether they say anything about continuing to return capital to shareholders. Number two, an update on litigation. Theyre in the middle of a lot of ongoing federal investigations and investors want to know where those stands. Number three, well see a pullback from this branch footprint. They have some 6,000 branches, and they have been the contrarian bet. Shares were up almost 1 . Guy, last word, do you buy the financials here . Blackstone, love it, loved it for a long time. You want a beta play, check out fortress. Thanks, everybody. Be sure to stick around and catch guy coming up on fast money in just under an hours time at 5 00 p. M. Im going to miss curling though. Much more ahead on these gogo markets. We have your money covered with full Team Coverage from the New York Stock Exchange. The nasdaq, the chicago merc. Find out if todays rally is a one off or is there room to run . Plus, this could be the year of tech mergers and acquisitions as Tech Companies sit on piles of cash. Find out what could be in play sooner rather than later. Youre watching cnbc, first in business worldwide. Always call y local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back. A noteworthy session for several reasons. Today weve got the s p 500 closing near a record high, if it will in fact close. Weve got bob pisani on the floor at the Stock Exchange to he can change that in a moment. Sheila dharmarajan in the nasdaq and Rick Santelli. Bob, first to you. When is this index going to close . I dont think it will close at a new high. The story is verizon completed its transaction with vodafone. They bought out vodafones interest in Verizon Wireless on friday. Its now being rebalanced in the s p 500 and it looks like 46. 23, theyre just completing this deal now. The last price before that was 46. 54 for verizon. It looks like the s p will be down a little, and, kelly, 1847 were at right now. The old closing high was 1848. I dont think we have a new high on the s p 500. It looks like were just going to miss it, bob. Please do flag us as soon as it looks like that index is closing. In the meantime shall want to get over to shell ila. What was driving the nasdaq . Today there was a flurry of reasons. Tough talk about tech m a. Weve seen 50 billion worth of deals done in 2014 so far. Thats the best yeartodate we have seen since 2000. A lot of people really talking about this trend and what theyre also noting is interestingly we are seeing acquirer shares get bid up after these transactions. Yesterday rf microdevices up 16 after it said it was going to buy triquint. People say that may be a sign board rooms may be more willing to do m a. We could see some more m a down the road. Rick santelli, here is the debate thats been circling wall street right now. It goes back to the comments jim grant made this morning about whether the market here is overvalued once we start to think about what earnings and revenue really are in a higher Interest Rate world. But how can we even have that conversation when Interest Rates are still so much lower from where we started the year. Well, i think thats true, and i also think anybody who doesnt believe that using Interest Rates as a crutch at this point doesnt make a huge difference just when you figure out your options pricing, traders, change that riskfree Interest Rate 50 or 100 or 120 basis points. See how the value of that option changes. Now, think about a stock and how earnings are discounted. The most important thing is steve grasso said it the last segment, the weather asterisk is just a green light for stock investors. Theres a spread relationship between zero to a lot of impact in weather, and i think that a lot of impact is whats priced into equities. A smaller impact into treasuries which for ten days the closing yield of a tenyear note has been between 2. 71 and 2. 76 . That speaks volumes. It has been remarkably stable. Thats whats so interesting. It feels like i would say a coiled spring but that implies its moving upward. Is it fair to say that tenyear has just been sitting while investors more broadly try to figure out what the next move, what the next direction is. I think its telling us its idle speed is suspect. That seems to be contrary to whats driving stock verinvesto. Hey, if i was a stock investors, it would certainly seem i would go with the momentum, risk on trade as well. And that speaks to whats happening in the tech sector right now. Thats exactly right. We are continuing to see this momentum trade on. Remember last year some of the momentum stocks chocked up 100 , 200 , 300 gains. Were seeing that continue. But those stocks are delivering on results, tesla, facebook, netfl netflix. These companies are actually delivering. So it kind of makes sense are they really delivering or is it momentum . Listen, im not going to try to argue the tesla momentum trade, but they made 23,000 vehicles in 2013. Amazon has moum billihow many b sitting on the sideline. Im not sure how they define perform. You have all those momentum stocks that are doing well, but today we saw just a sheer woosh up in the first half hour as we pushed through to the new intraday highs in the s p 500. Thats purely technical moves there. Not a lot of fundamentals behind a lot of that. Though that happens quite often. Bob, all the same by the way, kelly, we did not make a new high. 1847. 61 is settled out. Are we closed now . It looks closed, yes. 1847. Were just shy of that level. Going back to the point rick raised, i wonder if the word we should be focusing on is growth. In other words, investors are willing to pay for growth now because the broader environment still suggests were kind of growth starved. So those names, yes, even a tesla, even at the high valuations that can at least deliver it or deliver the promise are the ones being rewarded. You can argue about the technical moves and whether stocks are overvalued. Im not necessarily disagree with you, but as you said its all about growth, this environment, and these are pockets of Growth Investors are willing to pay obviously a ton for that kind of growth. Hey, rick, would you buy a tesla . You know, i would buy a tesla if it was my seventh car and the city i lived in never had temperatures under 55 degrees. All right. Well, when you move and thats the case, let us know and then maybe well get interested in the shares. Thank you, guys. All right. Appreciate it. Weve been talking about the Facebook Whatsapp deal but never mind that for right now. We want to ask what could be the next red hot tech merger . We will explore that issue coming up. Its a big story. Well be right back. And no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. I needthats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Lemme just get this out of here. To go. Unlike some places, we dont just change your oil. Our oil offer comes with a fourtire rotation and a 27point inspection. And everything looked great. Actually, could you leave those in . Sure. Want me to run him through the car wash for you, too . No, no, i cant. Get a dexos 1, syntheticblend oil change, tire rotation, and inspection for just 39. 95 or less. Chevy certified service. Olets say you pay your tguy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. We asked people a question, how much money do you think youll need when you retire . 500,000. Maybe halfmillion. Say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. I was trying to like pull it a little further. You know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. Im going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, are you kidding me . [ dan ] its just human nature to focus on the here and now. So its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Welcome back. The s p 500 today touching a new high although not quite closing at that level. Seema mody keeping tabs on all the movers for us. A lot of big movers. Zhuo lily out with earnings after the bell. The daily deal site for moms and kids products posting better than expected Fourth Quarter revenue. Stock is up in after hours trade on strong guidance, up 10. 8 . Then theres Tractor Supply up in the after hours trade. This after it raised its buyback plan by 1 billion. The stock up about 1 after hours. A different story for solar city which is getting hit after saying it would delay its Fourth Quarter earnings results. Now, in the regular session, facebook hit a record high. Ceo Mark Zuckerberg saying whatsapp is a great fit for his company. Joseph a. Bank moving higher after an offer has raised. 3d systems fell after bank of america downgraded them to underperform from buy saying it sees top line growth coming at the expense of margins. So that was one of the losers in todays trade. Kelly . All right, seema, thanks very much. We want to focus in on tech mergers. Its been red hot even beyond the 16 billion facebook acquisition of whatsapp. My next guest predicts it will, quote, turn into a frenzy. A ami amish, its great to see you. Do you mean frenzy relative to even the dotcom times . Its a little different this time. I think tech is here, its too big to fail. Its great to be on the show again. This is just a tip of whats going to happen this year. The chinese say its the year of the horse. Everybody needs to jump on the tech wagon and really look at it as the year of the unicorn. Thats how im looking at it this year. All the big players are always buying 10 and 15 companies. Whatsapp has really caused a stir, but think about what google has done with nest. Mobile is really driving this massively, and theres a lot of other sectors from the internet of things which are also going to be seen for the wearables. Drones is a hot topic. Gaming is cash gaming is really going to take off. So, you know, theres going to be a lot happening in this space right now. I want to bring the panel in on this with some perspective as well. Steve, what do you think when you hear this kind of talk . Well, you always look at these stocks, and you always question it a little bit. I question it the same way i question when a Company Grows its buyback. I always wonder where the real growth is coming from. Obviously gobbling them up. But i just by the top players right now instead of trying to pick who theyre going to take out because obviously its a monopoly for them. Thats an interesting strategy. This is how i look at it. You got your apples, amazons, your googles, people were talking about yahoo even could be well see what Marissa Mayer says. Those arent the sexy names. I think if you want to be a little more aggressive like we are, id break it into private and public. If youre a public investor, you want to try to figure out which of the sexy names are going to take off or maybe get acquired. If youre a private investor like i am, the vc money is huge this year. The last two months have been record deals right now. My dream scenario if you want to talk about it is imagine if apple bought square, twitter, and tesla. They would just jump into those markets. M a wise, you will see apple do some big things and you will see we thought carl icahn had a big wish list with the buyback. Thats not a bad wish list. Well, you know, carl, if you think about what carl said today about ebay and pay pal. Apple has this huge opportunity in payment. Whether its pay pal and it breaks off, probably what hes trying to do another possible target. T kayla. Marc andreessen said he thinks every company that failed during the dotcom bust would succeed today because the internet has such a more mature infrastructure today. Do you think by nature of where we are on the tech landscape that a larger portion of companies can and are succeeding . Thats a great question. Marc andreessen is a visionary. I love Marc Andreessen. Anything marc says i would Pay Attention to. So i definitely agree with what marc is saying. I think its a different world than 1999 but is that good or bad . I guess thats a good thing, right . But im thinking through what does that mean . Does it mean that the infrastructure, the cost is so much lower now so theres a lot more Successful Companies and thats a good thing or does it just mean a lot more players chasing after a similar kind of space . Its a great thing. Its a different world now. Technology is what fuses everything. Its in your house, its in your car. Everyone the smashrtphone market is ridiculous and growing globally. Theres huge opportunity with tech. Everything is going tech. Dom, i just worry when something sounds like it cant fail. Its a no lose. Thats what my dad always told me. If something sounds too good to be true, it probably is. Technology has not led the way higher since the depths of the financial crisis. It hasnt really been the leadership role. What gets it to be that leadership role or puts it in that leadership role again . You know, thats a great question. I think what youre seeing here is back in the day were talking the 90s, it was a little different with the personal computer out there. Mobile is driving everything. Content is king as well. If you see the m as that yahoo did as well on the content side, look at pinterest. They get all these users and then they monetize. Whats leading the way is tech. When you go on google, you search something. When you go on to buy something, you go on amazon. Youre going to see apple potentially buy tesla. Youre going to see a lot of big players that you never even thought about buy technology companies. Everybody. Amish, we have to go but what are your three top picks right now . Private or public . Public. My three top picks on public side right now, i have been so bullish on facebook. I actually so facebook, twitter, and the third one im going to say is apple. Kind of getting back to this point you just bet on the big horses in this space and the question even about public versus private tells you so much about these markets. We have to leave it there. Thank you so much for being here, amish, and well see you even if a company like apple gets a bid as a result. Jump starting the economy, up next Steve Liesman tells us if the Top Economists think thats what we need to kick things into high gear right now. Plus billionaire investor carl icahn as we just discussed calling for ebay to spin off pay pal and force board member Marc Andreessen to resign over an alleged conflict of interest. Who has got to right on this one, icahn or andreessen . Thats just ahead. 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Ask your gastroenterologist about humira today. Remission is possible. Honestly . I wanted a smartphone that shoots great video. So i got the new nokia lumia icon. Its got 1080p video, three times zoom, and a twentymegapixel sensor. Its got the brightest display, so i can see what im shooting even outdoors, and 4 mics that capture incredible sound. Plus, it has apps like vine and free cloud storage. My new lumia icon is so great, even our wipeouts look amazing. Honestly, i want to see you be brave welcome back. So what will it take to breathe new life into this economy. Leading economists have been hashing that out at this years 30th annual National Association of business economics conference in arlington, virginia, and Steve Liesman is right there in the middle of all the action. Steve, great to see you. What are you hearing . Well, im hearing that theres a longterm prospect that the u. S. Economy could be growing quite a bit less than it had been growing. Dug elmendorf from the cbo making a presentation and saying that the long run Growth Potential of the economy, thats how fast the u. S. Economic engine can run, may be now more like 2. 1 compared to 3. 3 over the prior 60 years. That is roughly 200 billion less a year in annual output. Some of the reasons for that are the aging of the population. Were not going to do anything about that. Cyclical weakness. That could potentially come back. Discouraged workers. A lot of questions about whether or not we can fix that problem, and fiscal policy which people say can be fixed. Tax reform along with Immigration Reform and Regulatory Reform. Several areas listed as places we can help the economy. Larry summers, the former treasury secretary, saying today that lower potential growth probably means lower real Interest Rates for some time to come, and we should get used to that. Very controversial suggestion from him, kelly, as you know. Hes saying more Government Spending is the answer, but that, of course, is debated by others, for example alan greensp greenspan, who says government spend something potentially the problem. Absolutely, steve. Stay right there if you will. We want to bring marshall aurerbach into this conversation. Marshall, whats your reaction to the talk, this idea that the economy is going to grow more slowly over a much longer period of time . Well, i certainly sympathize with a lot of what Larry Summers in particular was saying. I do think fiscal policy is something that could be used to rectify a lot of problems we have, but theres no question that the data has been very, very poor over the last several months and its not just weather related, as many of the bulls on wall street have tended to ascribe. Marshall, you cant overlook the fact that the second half of the 2013, even after the Fourth Quarter downward revisions, is going to have been one of the strongest periods yet in this recovery. Yes, and the indications are that for the last month of december and january, the data has been very, very poor. Weve had poor retail sales, the unemployment, weve had a lot of discouraged workers as steve pointed out. The ism numbers were not good, we had big inventory build. It seems this is being ignored. Its not just a question of weather because we are seeing a lot of data from previous months being revised downwardly as well. If youre right you know, kelly hang on steph ove, one secon. Is this the end of the circle . Are we headed to another downturn, marshall . What are you saying here . Im saying certainly that we are looking for growth somewhere in the range of 1. 5 to 2 at best, and it could get lower because the whole trajectory of fiscal policy which so many on wall street continue to applaud, they say isnt this great, this deficit it cois coming down, bu it continues to suck income out of the economy and it continues to lower our potential longterm growth rate especially as you have high prevailing levels of private debt. What were you going to say, steve . I was going to say whats interesting about the conversation here is it looks kind of through this whole weather situation, through next month, you know, beyond last month, that, you know, the Real Investment decision people have to make, there are two decisions. One is what is the potential growth rate of the economy . How much do i believe why does that matter for investors . Why does the potential rate matter . Because really thats the long run speed of the economy, okay . Think about what kind of engine you have in your car. Do i have an engine that will take me 80 miles an hour or an engine that will take me 60 miles an hour maximum . Okay. And thats going to tell you how much profit our companies can generate. Look, profits i think profits are an important consideration, but ultimately it comes down to spending power, aggregate demand, and if you dont have that in an economy, then it doesnt matter how much Regulatory Reform you have. It doesnt matter how normally id agree with you, but in this economy right now, you have pretty low demand pretty low growth but you have tremendous profits. Certainly profits as a percentage of growth, and theres a big question can that continue or yeah, i think thats an anol nomly. You cant keep getting that on the basis of more restructuring and more financial engineering. Ultimately you have to get some top line growth and were not seeing that right now, steve. Thats a raet problem. Its a function of poor aggregate demand in my opinion. Is it also a function of the globalization of the world that companies in the United States especially have found a way to make more per dollar of revenue than ever before, that they are supremely leveraged to every dollar of revenue that comes in, and we may be in a long run period of stagnant wage growth but high corporate profits. That certainly has not paid over the past several years to bet against the ability of american corporations to profit from what revenue comes in the door. Well, profits have been very, very good but ultimately, as i say, i dont think this is sustainable and the external environment is equally poor. In europe were seeing marginal growth but in many countries you have depressionlike levels of unemployment. Now were starting to see horrible data coming out of the emerging market and china which does call into question the ability of say u. S. Companies to improve via the external trades. Marshall, what would your policy response your ideal policy response then be . Well, i would stop the deficit terrorism for one thing. I think we have pay too much focus on this whole notion of fiscal sustainability and keeping and not worrying enough about getting higher employment, higher growth. If you get higher employment and higher growth, you will get lower deficits by definition because you will have more taxpayers in the economy and youll have many more people spending money. I think that should be the main obsession with policymakers right now. Last word, steve . Well, i would just say that its interesting to me that data has come in thats been very poor, and the market seems to be shrugging that off in part because it thinks a lot of it is weather, but i think theres this idea out there which i think is proven to be true, that companies have found a way to profit, and i hope marshall is right to some extent that some of these profits eventually go to workers but i just dont know. I think it may be more of a sustainable model than marshall is giving it credit for. I think its a financialized economy. Thats the real problem actually and i dont think that is a sustainable model over the longer term. We have to make stuff, not just financially engineer thing. Well leave it there, gentlemen. Thank you both. Carl icahn is on the attack yet again. This time the billionaire investor and ebay shareholder renewing his push to spin off pay pal. Hes also calling for board member Marc Andreessen to resign due to alleged conflicts of interest. So who is right in this Battle Royale . Plus, we want to know what you think about ford dumping microsoft for blackberry in its Car Technology system. Is this a good branding move to ford . Tweet us your thoughts cnbcclosingbell. Though cnbcclosingbell. You think about ford dumping let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Im actually a dj. [ dance music plays ] woman [laughs] no way that really is you . If theyre not a cfp pro, you just dont know. Cfp work with the highest standard. Like carpools. Polly wants to know if we can pick her up. Yeah, we can make room. Yeah. [ male announcer ]. Office space. Yes, were loving this communal seating. Oh, its great. Yeah. [ male announcer ] the best thing to share . A data plan. New at t mobile share value plans for business. Our best value plans ever. For example, you can get 10 gigs of data to share. And 5 lines would be 175 a month. Plus you can add a line anytime for 15 a month. Sharings never been better for business. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Welcome back. Carl icahn is at it again. This time the billionaire investor targeting ebay. Not only calling for the company to split off its pay pal business, but hes also calling into question Marc Andreessens loyalty to the company. Is he a little off base or does he have it right. With us a lena and dennis burrman. Does icahn have it right here . Well, come on, this is carl being carl, kelly. Hes looking for any soft spot he can find. What i really find interesting about what hes saying is this is in a way wall street trying to understand Silicon Valley. Things that happen in Silicon Valley where they probably have no conception that it might be wrong, carl is at least i think making a somewhat fair point about where andreessens allegiances lie. In the end i think its going to be hard to requequestion that m andreessen isnt doing the webe he can as a board member. I mean lena, go ahead. I have to disagree. I think hes reaching here. Some of the companies that he even mentions as possible conflicts are so the competition is so little, and some are not even competing against pay pal. I think its just a good example of how wall street doesnt understand Silicon Valley. Leena, one second. Elon musk, the guy who started pay pal, he says by having ebay own pay pal, he likens it so if target owned visa. David sax is saying if you allow pay pal to pursue its destiny they could become one of the largest absolutely. Thats a different issue. Going after andreessen and donna hoe for these conflicts, i think it is reaching. It is reaching a bit. Some of the things in the letter were sort of warmed over bits from clips as the ebay response showed but i kind of like it about carl that hes willing to mix it up and go after these guys in Silicon Valley where in the valley people will not touch these folks whatsoever. Icahn has proven hes willing to go after for gods sake even apple. But he has to get his information right if hes going to go after them. If youre saying strategic strategically this would be the right move, then why shouldnt the people who he cites as standing in the way of this move be pushed aside . Well, you know, i mean im not saying that its the right move. I think there is a right to question whether or not in the future pay pal is going to be, you know, best fit within ebay, but, you know, to go after andreessen for these conflicts doesnt really make sense. I mean, andreessen is a pretty brilliant operator. Hes obviously helped pay pal become what it is and ebay as a company. So i just dont really see the match in the way the thinking is happening right now. Again, carl has played this game so many times. He knows how to create a little action out there and thats what hes doing now. To the central issue, kelly, of whether pay pal and ebay should be together, i think arc of history probably has to say and ill bet leena on this, ill bet her a dollar, that within three years a bitcoin. Those companies will be separated. Within three years, dennis . Yes. Leena . I dont know if this is if the bet is worth it. I actually agree here. I do think that pay pal is going to eventually surpass ebay in revenue and i really think that theyre going to eventually be valued more and it will make more sense to have it as a separate company. But, you know, going after directors and the ceo the way that icahn has just not i question his tactics. Id say we cecil csee silico valley represented by leena he does do the ad hominem attack sharper than most meme do, and then not allowing people to focus on the main point which it sounds like on both coasts theres some agreement. We have to leave it there but it feels like everyone is coming down in the same place. Ill get the dollar from leena in three years. Well bring you back. Thank you, dennis. Keeping the snoops away. Thats what the new black phone promises to deliver as a result of its soupedup apps and android modifications. The black phone. Well check it out next. Well be right back. E craft ori. E craft ori. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. Tdtdd 18886282419 n take you in many directions. T spark your curiosity d 18886282419 you read this. Watch that. Tdd 18886282419 you look for whats next. 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And that is the moment that driving the lexus gs will shift your perception. This is the pursuit of perfection. Welcome back. The race for mobile security is on. Between hackers and the nsa, privacy is a prized commodity. And while apple has quietly issued updates over the weekend for its major security breach, a Company Called geeksphone is introducing a product called the blackphone. Take a look at this. The phone valued over 1,500, hopes to be the super secure answer for those concerned with government snooping and hacking. And i want reaction from our panel now. Would you buy it . Have we gotten to that point where people want and need such a secure device theyre willing to pay up for it . Whether they want it and whether they need it are two different things. I dont think people will be willing to pay for this. I think theres a need for it on a certain level, but the number of people that think they need this is so small. How worried are you, mr. Grasso, about the security of your mobile device . Im constantly checking to make sure my information is out there. You have to get security monitoring software. You need to know whos got your information. Youve got that kind of stuff . Yeah. What kind of software . Its all stuff you do. Its all advertised on the internet. Im not going to start giving them no, im actually just curious because i dont have life lock or any of these things. Should i . Things like that. Do you guys all have these things . I dont have these. But when i look at the fine print of Something Like blackphone, doesnt look that effective. Its not nsa proof. If the government wants to listen in, it can. The only thing it does is look at the fine print of your own apps and turn off all the wifi enabling. You can probably do yourself on your own phone if you knew how to do it. For 1,500, you could buy a heck of a lot of burner phones, like 30 ones. Use them for like a month. It is like m. I. Is when you least suspect. There are only 600. I caught him shaving off his fingerprints before he came on to the show. I will say, the touch print sensor on the iphone doesnt work every time. And makes you wonder about how much we can pivot towards using this technology and only using it. I want to know if dan has the Sophisticated Software things to protect your security. Im still on a flip phone. You are not. Its a motorola star tack. Its a hot pink razr. I use the star tack. Its not a bad strategy. Its signaling and in reality more of a fire wall. All right, 1,500. Weve been asking what you think of ford hooking up with blackberry, speaking of mobile, while dumping microsoft in the Car Technology systems. Tweet us cnbcclosingbell. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back. Theres been a lot of tech news today. Ford is reportedly linking up with blackberry to power the Sync Software in its cars. We wanted to know what you think about this move. Is it smart for ford . Michael tweets, thats like asking which dinosaur is going extinct first. Glenn tweets, it is a good idea because of low costs and security. And jeff tweets, ford should hook up with apple, instead, so siri can drive our cars for us and talk the entire time to keep us company. What do you guys think . Smart move . I like the fact theyve all got skin in the game. Ford had a bad experience with microsoft and now blackberry is trying to bring itself up from the ashes. They both have something to prove here and i think they both have the motivation to do it. I havent heard so many people talk about blackberry as a long story in months. Seems like everyones starting to look at this and go, theyve got the Enterprise Software stuff going on. Look at it was security and enterprise. That was what kept blackberry people, exactly, but the whole idea is you want to talk about splitting a company, how do you get away from hardware with what really moves the needle . Well, you saw the hardware business, did they not . I think theyre trying to focus more on that was the problem when you saw the stock cratering. People didnt see you can separate them. They didnt think you could survive. I think its an extremely confidencebuilding sign to see that a longterm product that something ford would be building in future models is based on a company that a lot of people were saying, well, we didnt really know, two years, whats going to happen. Thats a really good sign. Quick final thought, mr. Green, on markets. Uh as we look toward the rest of the week, a lot of consumer names and earnings. Were 90 of the way through the season. Traditionally, this would be when youd stop caring. But the companies that report this week are primarily earnings. Home depot and a number of other companies, theyll give you realtime assessments of whats going on according to the weather. That been said, whats going on is not all the weather. Hopefully we can glean some insight separate one from the other. What are you watching tomorrow . Put it this way, im watching mac macro. We have to see another pullback. And when i get that pullback, Im Still Holding my breath to buy google on a discount. Thank you so much for being here. And fast money is coming up in a few seconds. Melissa lee joining us with whats on tap. A whole hour now, melissa. A whole hour with commercials, but still uncensored. Were going to take a look at the threat scape out there with bank of america analyst who put out more than 100page Research Report on where the vulnerabilities are. We are going to trade that. The topmost breached industries, defense and health care. Well, i think you should do the freestyle commercial breaks online. Well, well explore that. We dont want to blow our cover. Have a great show. Thanks. Fast money starts right now live from new york citys time square, im melissa lee. We are back here on the big screen that we did have a lot of fun on the interweb. If you missed us online, well have some of our favorite moments later on in the hour. Emerging market turmoil in both the ukraine and venezuela, Dennis Gartman will bring you his top three trades coming up. And the s p 500 hit a record high in todays

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