Transcripts For CNBC Closing Bell 20140318

Gaining back what we lost last week. For everyone who points to the geopolitical concern moving to the back burner, there will be someone who says you never want to take a guy like Vladimir Putin at his word. Also, the market keeping an eye on the fed. At this hour tomorrow janet yellen will be in the midst of her first News Conference. Right now were in day one of na twoday meeting. Well lay out what investors should expect. Then remember earnings . That matters i think i heard of it. As well today. We have two big ones coming tonight. Two tech titans will be reporting at the top of the hour, oracle and adobe. Of course, we will have the numbers, the market response, and the complete analysis coming up right here. And so on this tuesday, the Dow Jones Industrial average up 108 points to 16,355. Take a look at the nasdaq which is rallying nicely as well, up about 70 points. Im sorry, its up about 52 points. The s p 500 finally adding 14 this hour. 1873 is the level there, and believe it or not, bill, i believe 1878 is the closing high. We are five points away. That close. Joining us on the the closing bell exchange, kimberly foss, Peter Anderson is back with us, kyle harrington, mark martiac from premiere wealth first allied and our own Rick Santelli joins us as well. Mark, are you concerned about ukraine, the situation with russia . Is it enough to make you want to rethink your Growth Portfolio right now . It is on both counts, bill and kelly. Thanks for having me on your show, by the way. It is in the sense we havent seen the full effect of what sanctions are going to unfold from washington, and, in fact, with respect to ukraine and europe, one of their trading partners, europe imports 30 of its natural gas from the ukraine from russia. Through the ukraine. We could have an issue if russia decides to cut off the supply to the ukraine of natural gas. But i do think that investors and the markets have the drama now priced into them, and i dont fear for investors as much at this point. Kyle, i wonder if this isnt one where consumers wind up taking it on the chin. Some of the soft, some of the grains in particular, is it too much to attribute that to whats happening in terms of this unrest and to say that perhaps it wont be for months from now until the effect of that is really felt . Well, you know, i still think that the effects are here to stay and are going to be felt in the coming months. I think that the volume tilts and the increased international disarray will drive volatility up and down and in the domestic marketplace. If youre not allocated to some marketplaces outside of the United States, for example in indonesia, that over the last six or seven years has grown at 5. 8 gdp, youre making a mistake. Visit your portfolio with an international allocation. Would you buy russia . No. I think im going to sit back on russia for a while. I want to see how this unfolds. Im very cautious in that marketplace, and Vladimir Putin, he makes me nervous. Peter, were only five points away from an alltime high on the s p, but youve done the math. You went way back. You still think this is a cheap market here. Well, i have done the math, thats right, bill, and if you look back, what i like to do is be sell telescopic. Lets look from a macroperspective and then we can deal down to the specifics a the a stock level. When do you that, everything seems to be pointing in the right direction. The lights are all green. On the macro perspective, if you look back 65 years on the s p 500 and you look to see where the valuations are, right now at around 17 or 18 times, we are not, and i think this is going to surprise a lot of viewers, we are not really overvalued when is that if you include episodes where we saw the market trading significantly overvalued . In other words, does the average look okay because weve had times like the dotcom bubble . Kelly, it includes everything. Thats why i wanted to go back that far. Some people will only go back ten years saying its a new economy, et cetera, but 65 years i think wed all agree is a pretty long time to look at all these stats. And so it includes everything from 65 years. If you do this it turns out to be within less than one standard deviation of that bell curve distribution that you normally see, and i computed that on a pe basis you have to be about 20 higher before i would start whispering that word bubble. So i think we have a way to go. Now, thats the macro perspective. If you want, we can talk about the individual stock perspective, too, and it all points to very do you want to throw out a name or two you think is attractive here then . Sure. Veri phone, pay. Its up 34 yeartodate and thats not including the increase today of verifone. Its a company that has beat and set its earnings to be greater. And you own verifone . Yes. And youre tired of hearing what . Im tired of hearing all these companies that have missed and guided down. Kelly, for every five of those i would say theres at least one type of stock like a verifone where things look optimistic. We have a positive bias as youre pointing out. Do you feel like were destined to go higher as well or would you take something off the table right now as we approach alltime highs . Well, were balancing as we speak today, but i really do think we are poised to go higher. We have crimea going as planned. We have yellen speaking today. The last two times shes spoken, the market has gone higher, and dont forget, guys, we have 2. 678 trillion in money sitting at. 001 on the sidelines. No real increase in Interest Rates except for maybe 2015. So despite all the fundamentals, we sill have some room in this market to go. It is going to be spotted with volatility, but i still think weve got room to grow in this market. Rick santelli, its not uncommon to see the market rally into the feds meeting tomorrow. But we could be talking about significant tweaks to the language, their tashrgets, anotr taper on the way. You know, tweaks to the language, does that really sound as earth shattering as we want to make it out to be . I dont know. I think it could be. To me its all the rorschach. In the end we all know whats going on here. We have janet yellen continuing quote, unquote, the taper. Why they need to continue to make any purchase whatsoever after listening to our guest makes no sense to me at all. I think the salient feature tomorrow is why they dont want to Pay Attention to the Unemployment Rate tomorrow after all these years of telling us what wonderful news it was that it would move lower. It affected the political landscape, but after tomorrow its probably not going to be as important. Theyll switch gears to things like inflation, which the government measures, but yet anybody who has a hunger for three needles a day doesnt really jive with that anyway. They measure both of them. If youre saying we cant trust cpi, then we shouldnt trust any of the government data. Wow, so we do agree on something, dont we . What do you think the market would do tomorrow if janet yellen said, okay, im done with tapering. No more asset purchases . Well, gee, let me see, there might be some market volatility. Oh, my god. Really . Its not preannounced and everybody isnt in on the fix. I think it would be a wonderful thing for fre markets. A great stride forward. Kyle harrington, i think you would agree. I think i agree 100 . The less janet yellen a involved in the free markets the process will expand and i think it will be much healthier long term for the United States economy. I would agree 100 . One of the things i think is pretty important to look at here is nobody has mentioned this, but this is Janet Yellens First Official press conference. I know we have seen her in the past, and im really curious to see what her Communication Style is going to be. I dont know if everybody on this panel has actually watched her on camera. Rick has watched her very carefully. Okay. Well, it is rather interesting the way she has answered some of these questions, so im going to be looking to see regardless of whether or not shes going to be tapering, i know thats very important, but also i think the way in which she communicates this stuff can really send the market upside down, and she has to be extremely careful to continue what do you mean . Are you worried from the way in which she handled the testimony . Well, i just tuned in on some excerp excerpts, and i wanted to ask a couple more questions. Of course, i wasnt there, but i think there was some things that could have been answered a little more clearly and i dont know if thats because of her academic background and she tends to think more words than we normally do. If you had one question for her tomorrow then, what would it be . I think it would be are you going to continue to give Forward Guidance the way your predecessor has and are you aware what kind of volatility that might cause in our markets. Those are good questions. I would ask chairwoman yellen when she expects to lower the shortterm rate. If, in fact, 2015 is still in the future to start lowering the shortterm fed funds rate. You mean to raise. To raise it rather, to raise it, yes. To raise it, yes. That would be an interesting 2015. To raise it, yes. Weve got to go. Just remind everybody, Janet Yellens News Conference will be live here on cnbc tomorrow so you can see that starting i think around 2 30 eastern time. Correct. Thanks, guys. Have a good one. Heading toward the close. Pretty good gains today. The dow is up 102 points. Here we go again on top of yesterdays rally, so were gaining back what we lost last week so far. 50 minutes left in the trading day. Todays rally sparked in part by russian president Vladimir Putin saying he will not seize other parts of ukraine. Coming up, well discuss why the market is putting so much faith in putins promise. The market seems to believe putin. Do you . Tweet us. Well reveal your best responses coming up. The handle would be cnbcclosingbell. Disney is the second best performing dow stock in 2014 helped by the success of frozen. Can disney continue to deliver magic for shareholders . Announcer where can an investor be a name and not a number . Scottrade. Ron im never alone with scottrade. I can always call or stop by my 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. No two people have the same financial goals. Pnc investments works with you to understand yours and helps plan for your retirement. Talk to a pnc investments Financial Advisor today. Welcome back. So stocks are building on yesterdays big gains and that includes disney. In fact, the blue chip has been the second best dow performer this year. You would think investors are happy. Morgan brennan has been monitoring the annual shareholders meeting. Are they happy . I think so. The meeting just ended. 10 of the 11 Board Members were reelected including sheryl sandberg. Blackberry Ceo John Chen and quar and twitter could founder jack dorsey. Probably the most interesting piece of news relating to todays meeting actually came before the meeting. There had been a proposal for the largest shareholders to be able to nominate candidates for the board. That was actually taken off the table today after disney tweaked its language regarding the chairman position in its proxy statement. That language basically reaffirming that the chairman be an independent director unless its in shareholders interests to do otherwise. A new cars sequel is coming and a new incredibles film and the next star wars movie will take place 30 years after return of the jedi. Kelly, back to you. Morgan, thanks very much. Lets stick with disney for a moment. Its been on quite a run, up 44 other the past 12 months. Lets talk about it. Timot thinks theres more room run and abigail says the stock has gotten well ahead of itself. Lets brawl it out. Tim, why do you think theres more time to the upside . Im the fundamental story for disney is very, very good. Three factors i particularly like are think really, really strong run of films likely to come out not only this year but you mentioned star wars, we have some avengers film next year. They have higher volumes and higher pricing in the parks. And we have the shanghai park opening coming in december of next year. And then finally im really interested by some of the streaming tv deals disney has done. You may recall a year or so ago they did a deal with netflix to do first run rights on their films, and just recently we had the deal with dish last week probably similar to the comcast deal they did a couple years ago where theyre selling some tv everywhere streaming rights and thats incremental revenue for the disney tv properties. Abigail, you look at the stock and you dont like the chart here or when i look at the chart it really does look like its setting up for a near term pull back. When i say the stock is overdone, ahead of itself, its up 100 over the last two years. The dow is up only 25 in that time. Some investors say that outperformance is justified because of the strong story, because of the prospects. When i look at revenue growth, were looking at just high single digit revenue growth. It seems disproportionate for me. It seems hard to believe this stock is where it should be. It appears overbought. Investor sentiment is wildly bullish at this point. Back to the charts, they really are pointing to a nearterm pull back. We could actually be looking at just a move back on the markets moving down over the next couple weeks. Tim, what is the stock trading at in terms of valuation here compared to the historical average . Right. On a pe its about 20 times. That certainly puts it at a very upper end of its direct peer group. A number of its direct peers are trading in more kind of the 17 to 19 level. So its at the upper end of that. Actually seeing any stock have this kind of a Strong Performance i wouldnt be surprised at all if theres some sort of a period of taking profits here. But i think the revenue environment is very strong and also the earnings environment. Talking about the investments in the parks, you know, that should translate into some nice operating leverage here. They also have a product called my magic plus which should improve efficiencies at the marmar parks. Were modeling about midteens eps growth over the next couple years and i dont think were fuelly allocating the right estimates in for the park expansion in shanghai or star wars or avengers. You sound like you wouldnt be surprise fd there was a pull back of some kind at disney. Im not saying it is cheap. Its trading at 20 times. Its the upper end of the peer group and its up 40 or so in the last year. You know, any stock that has that kind of Strong Performance and i dont necessarily see a fiscal q2 catalyst for disney necessarily. I wouldnt be surprised if theres a little period of taking profits, but my view is not shortterm. My view is one year and beyond and i think theres a lot to like about disney. If it pulled back to what level would you buy it . There does appear to be some support around 70 but i wouldnt be surprised to see it go back to 40. That is extreme even in my view but it looks like there could be a negative surprise. Lets not forget about this Malaysian Airline mystery. God forbid if its related to terrorism. That would be a negative for this company, no doubt. You know, i dont know what the chart is pointing to exactly but its pointing to something negative. You mean because of the hit to travel. To travel and consumer spending, confidence. But theres no direct no direct link, but this terms of the theme parks tourism overall. Tourism and people spending on movies and that sort of thing. It could potentially hurt disney. Thank you both. Were heading into the close with 40 minutes to go. The dow is still up 102 points here, bill. Well keep a close eye on the s p as well. Hanging onto the gains here. Russian president putin isnt the most trustworthy person in the world, so why did this market rally like this on his pledge this morning to not seize any more parts of ukraine . Were going to discuss that coming up here. Also, biotech stocks, theyve been red hot for the most part lately, but closely follow Value Investor joel greenbott thinks you should be feeling sick about buying this group. Find out what stocks hes betting against. Thats coming up later on the closing bell. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Was it truly something he said . Stock future this is morning before the open rallied right after russian president Vladimir Putins speech justifying his nation annexing ukraines crimean region and this rally has continue. Cnbc chief International Correspondent Michelle Carusocabrera is joining us today to explain why the reaction has been so strong. Vladimir putins annexation of crimea was a pomp filled announcement in front of the russian parliament. Flag bearing honor guard and entrance heralded with trumpets. An hourlong speech and signing ceremony with putin and three crimean politicians all backed by the kremlin. With that crimea was under the control of russia. Take a look at the s p 500 futures from that hour. Just before 8 00 a. M. East coast time, they rose sharply. It was at that moment when putin during his speech said, dont believe those who say we want more than crimea. We dont need it. That was the answer the markets were looking for. Take a look at the russian stock market, which had been in negative territory but turned decidedly positive about the same time almost 4 00 p. M. In moscow. As you can see here when it happened from this intraday chart. Whether putin can be believed remains to be seen. Remember, two weeks ago, here is the video, he told reporters at a News Conference did he not plan to annex crimea, and yet he did so today. On one other note Mikhail Gorbachev said the referendum was a happy outcome. Many americans remember his meeting with president reagan and when the president said mr. Gorbachev tear down this wall. And putin spoke to the germans and said we supported your reunification, we hope you do the same here. He sees crimea reuniting with russias a analogous to that situation. Michelle stay there. Lets talk about this. Bring in fast money contributor tim seymour and cnbcs jeff cox to talk about if investors should be buying into what putin is selling. I think both you guys are pretty skeptical on this. Jeff, i know you are. Yeah. I dont think theres any reason to believe what putin says. I think it was a oneday trade. If you look at what the russian stock market did, as michelle pointed out, it was basically the equivalent of over 500 dow points. I think anybody who believes that theres anything permanent here is crazy. I mean, this is just a one day thing. We know if anything, it makes the region less settled because we know now that putin can do what he wants and theres going to be very few recriminations behind it. And, tim, that being the case, what are investors to do . Well, i dont know if its a oneday event as jeff points out. I think you really what putin has won and jeff has said this, hes got crimea, and guess what . Were not even talking about crimea now. Were talking about eastern ukraine. Here we suddenly have had a guy who basically now is controlling the black sea, isnt worried about nato coming to his back door and this is what he wanted. He already controlled crimea so clearly it tells you where the interest lie here. Theyre in eurasia, not with the g8. From a markets perspective, i would be very careful at least of expecting this to go into the end of the week. Something like spare bank, which i think is one of the great banks in emerging markets, and its the state bank of russia, that bank has rallied 24 off the lows that we saw thursday afternoon. I was advocating buy youre saying its over, tim. Is that what you mean . Youre in a place where you need to be tactical. I think there are companies you can own and you can own them at these levels and ride through volatility. I think there are names you can trade. Michelle, i just want to raise this point, this executive order that obama has issued against russia, against certain individuals associated with the russian government, seems extremely broad and could potentially net u. S. Companies, and i wonder even u. S. Investors if that were to be the case. Im not saying theyre trying to go after them. But it basically allows the white house to sanction any individual or Company Providing Financial Support to the russian government. Well, thats pretty broad. It is but then they were very specific about the individuals and then in the Briefing Call with reporters, Senior Administration officials said that they were very specific that they were not going to be sanctioning businesses at this point. What were really waiting to hear, kelly, is whats the next step step . They made it sound yesterday like if he annexed crimea, there was going to be a lot more to come, but so far silence. And europe is not interested at all in cutting off russian gas. Germany gets 30 of their gas from russia. This is a big deal and theyve been very cquiet. Big talk, big bluster, but right now its putin 1, u. S. , 0. Its a giant finger wag at putin. I think it speaks to a larger point in the market we have to be looking out for. This is a market thats really priced for perfection. Its assuming perfection. It is assuming the best possible outcomes of all of the things that are coming down the pike as far as the market goes whether its the chinese economy or whether its putin or whether its the federal reserve. I mean, investors are really is it telling us though to some extent the u. S. Economy is Strong Enough to weather some of these yeah. Difficulties . Yeah. And i think from a trade perspective, i think think people are overdoing the russia impact. Russia is turning eastward. Russia and china are now a much bigger ally than they were two weeks ago. From a markets perspective we have to keep this in context. Volatility sell germany, dont sell the u. S. On this news. I dont know i think the jury is still out where the u. S. Economy is. And the other thing that the market is priced in for perfection is that the slowdown in january and february was solely due to the weather. We dont know whether thats the case. We have a lot of question marks out and we dont know whats going to happen through the year as the fed continues to take its foot off the gas pedal. Michelle, i embrace your question about what happens next . Putin has spent years ingratiating himself to the economic leaders of the world and being a part of the g8 process which was so different from the past. Now all after sudden we get this different putin. Its like the throwback days. So you wonder what their role will be in the g8 and if, in fact, they even care what the role will be down the road. I think the g8 i have thought for a long time its a fairly meaningless organization that doesnt get a lot done. When it comes to what does putin do next, i think thats what we wait for. What he says today is not relevant because i think hes playing a dynamic game. He doesnt have a plan. He says, okay, im going to do this, but see how the west reacts. What do you get so far . Zero. That may incentivize him to do more. We dont know. And well have to leave it for right now. Thanks very much for your perspective. Appreciate it. Stick around and catch tim and the rest of the fast money crew coming up at 5 00 p. M. In 90 minutes time. Market clearly buying into putins promise but are you . Were asking your thoughts on what we just talked about here. Send us your tweets to cnbcclosingbell. I got it right. Well reveal the best of your tweets coming up here on the closing bell. We have 30 minutes to go before the close, and despite some of these concerns, the dow is adding 88 points. The s p 500 is less than 10 points away from a new alltime high. This on day one, bill, of the feds twoday policy meeting. Then janet yellen will hold her First Press Conference as fed chair tomorrow. What do investors want to hear from her to keep this rally going . Well have a preview of that News Conference coming up next. Also, how is gms Ceo Mary Barra handling the recall controversy. Its. Li been linked to a dozen deaths. You dont want to miss what kevin oleary and Marcus Lemonis have to see. Plus some new developments out of gm. Stay tuned for all of that. You can catch more of kevin oleary on tonights shark tank marathon at 8 00 p. M. Eastern and catch Marcus Lemonis on a new episode of the profit at 10 00 p. M. Eastern time on cnbc. Stay tuned. Stay tuned. Announcer where can an investor be a name and not a number . Scottrade. Ron im never alone with scottrade. I can always call or stop by my 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. No two people have the same financial goals. Pnc investments works with you to understand yours and helps plan for your retirement. Talk to a pnc investments Financial Advisor today. Welcome back. Here is a look at whats happening in markets. The stocks are surging for a second straight day. The dow creeping closer to erasing all of last weeks losses. Dominic chu, whats driving this rally today . Lets start off with microsoft. They may unveil an office of their Office Software suite for the ipad. Thats according to reuters and other media reports. Shares are up almost 4 . Shares of fossil also popping on the day. The company saying its working with google to make Android Technology wearables like watches, glasses possibly for the future. Those shares on the upside as well. Take a look at penn virginia. Nothing like a little Shareholder Activism moving higher. George soros disclosed a 9 stake and thats always a big deal, and lastly, it was a day in the red for video game restaler gamestop. Walmart introduces a new program to allow shoppers to trade in games for store credit at walmart. When the biggest retailer in the world wants a piece of your action, your shares will take a hit. As we know, the fed kicked off its twoday meet today, but investors are focusing on tomorrow when we get the committees statement and we get that News Conference by janet yellen. Not only that, but fed chair janet yellen, that will be her first News Conference shes delivering and you will see it right here on the closing bell. What should we be expecting . Joining us is Jared Bernstein and mya mcgiddes. Great to see you both. Mya, what do you expect here . Well, im anticipating that what were going to hear from the new chairwoman is a sense of where theyre going to go with Forward Guidance and the sense of where we think the economy is headed. It will be very important what their projections for the economy are and how that is going to dove tail with if theyre going to be changes in the level of specificity that the fed leaders put out in terms of Forward Guidance. As we know its pretty likely they will be less specific but that will give a little less insight into the future policies of the fed. Jared, our Rick Santelli has a dream shell come out tomorrow and say, okay, no more tapering, were done, no more buying of assets. Qe is all done. Were not expecting anything like that, of course, but do you expect any difference, any subtle difference from ben bernanke to janet yellen . First of all, let me say Rick Santellis dreams are probably my nightmares. Lets get that straight. No, i mean, i think shes going to come out and take another ten off the monthly asset buys. Were talking about a mere 55 billion a month now in quantitative easing and as maya suggested, perhaps a shift from less quantitative to more qualitative Forward Guidance. Well see about that. But i think the important point and here i disagree with rick, i think what well hear from chairwoman yellen is that the economy still needs some help from monetary stimulus. It is not out of the woods. Output gaps remain strong. Inflationary precious remain very que he is sent. I think that by the way has been the message of previous meetings, so i expect consistency in that regard. Maya, the one concern we tend to hear from people when they think about a stronger u. S. Economy, what happens when rates go up and we have to do something to address the longer term entitlement issues and the u. S. Government perhaps is paying a little more in interest . Whats your main concern about the evolution here over the next couple years of the u. S. Economy . Right. Well, i think we are in a position where we have become incredibly vulnerable to any significant uptick in rates. I dont think thats on the immediate horizon, but it could be, and were not hedged against it at all. So if rates go up, just by one percentage point for instance, it will lead to about 1. 5 trillion more over a decade in interest payments. Interest already the Fastest Growing part of the budget, even faster than Health Care Costs and Social Security. Its left us vulnerable and the fed under chairman bernanke and my guess is under chairman yellen it will as well has sort of danced up to pushing policymakers to think about how to get the longterm debt under control. The fact were so polarized in washington right now and weve been unable to take real measures we need to mean a lot of the heavy lifting has fallen on the fed instead of this being a partnership between fiscal policy and Monetary Policy which is ideally what you would want. Maya, you said you wanted more clear Forward Guidance. I know everybody would love that, but admittedly, theyre making this stuff up as they go along and its so data depep dent theyre not even sure what the data is going to say down the road. How much clearer do you want this Forward Guidance to be . Let me clarify. I think theyre going to talk tomorrow about Forward Guidance. I actually am somewhat concerned about the notion of Forward Guidance as one of the main fed tools because what it does is it precommits sort of policies down the road. Exactly. And loy ta lot of things can change then. Its similar to what we do in fiscal policy. It may help you now, but it can lead you into tough situations later. I dont think its the strongest tool we should be relying on. Im curious to see what comes out of the press Conference Tomorrow on the topic. Jared, just real quick because we have to go, but there are going to be plenty of people now and in the months perhaps to come who say that, you know, the talk about higher rates and what that will do to the budget has been a lot of crying wolf. That said, this point will come upon us. So to the trillion and a half dollars maya just referenced, what are responsible policymakers here to do . Theres no question that Interest Rates at some point are going to crawl off the bottom and thats going to mean higher interest payments. Remember, half of what we pay in interest is to ourselves, so i think that thats okay. I think the important thing to recognize is that the best way to reduce the debt to gdp ratio is to grow faster, and that would suggest if anything we dont want fiscal constraint. We dont want austerity. We need to promote growth in the near term. That will help us on the problem that maya identified. Jared and maya, thank you both this hour. We have about 24 hours to go until that event tomorrow. In the meantime, adobe out with earnings much earlier than expected. It was supposed to be after the bell, jon fortt. What happened . That appears to be the case. These are numbers from a data sheet that appears to have posted to the site early. Revenues are coming in at 1 billion. Earnings per share nongap at 30 cents versus 25 cents expected. And Creative Clouds subscriptions according to this data sheet in at 1. 84 million subscribers. That is a jump of around 400,000 over last quarter. That pretty much equals the strongest jump that adobe had seen to date in Creative Cloud subscriptions. Adobe is transitioning from a more Traditional Software model to a subscription cloud model. That can put a damper on revenue but its really good for evening out revenue growth, potential, and stability in the longer term and they seem to have beat on the top line and had a Strong Quarter for Creative Cloud subscriptions which is goiod across the board. Have to listen to see what the projection is for the coming quarter but they appear to be on pace to hit that 3 million subscribers that the ceo expressed last quarter. And the stock has been trading rapidly and higher, up a percent as a result. Thanks, jon. Heading toward the close with about 15 minutes left and the dow starting to lose some altitude. Were up 82 points. We were up well above the 100point mark a while ago. Weve heard from adobe. Oracle is next. Theyre getting set to report earnings after the bell. And a person in the cockpit reportedly rerouted the malaysia air flight 370 from its intended path using the aircrafts onboard computer. Thats increasingly the scrutiny of the plane increasing the scrutiny of the planes pilot. How do carriers ensure pilots can be trusted year after year . An aviation expert will be weighing in on that critical issue coming up on the closing bell. Bell. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. All right. The fun continues. Investors getting set for a Big Technology Earnings Report coming up after the bell tonight. Josh lipton has a preview of what we might expect from oracle. Josh . Kelly, oracle reporting after the bell. The street is going to be looking for eps of 70 cents on revenue of 9. 4 billion. That would represent growth of about 8 and 4 for the company. By the division there will be a lot of focus on new Software Licenses which tells us how much new money the company is bringing in. Analysts expect sales of 2. 5 billion for the quarter. Oracle stock has not done much over the past year, and one reason is concern about competition from rivals such as sales force and work day which are attacking oracle from the cloud. Investors will want to see big growth in bookings for its cloudbased products. Kelly, back to you. All right, josh. Thanks very much. We should only have a couple minutes to go on that one hitting right after the bell, bill. In the meantime, we have 13 minutes before that close. The dow up about i cant read the numbers. Up 81 points right now. Were fading into the close. Thank you very much. If you call that a fade there. Despite the market rally over the past five years, you may be surprised by just how little americans have saved up for retirement or how ready they think they will be when that retirement day comes. That alarming story still to come here on the closing bell. Stay tuned. Stay tuned. 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. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Welcome back. The dow up 82 points now as we head towards the close with nine minutes left. Jeff from Fifth Third Bank and walter todd from greenwood capital are with me today here. Do you like this rally . Which market do we believe, last weeks fiveday selloff or this weeks twoday rally here . Somewhere in between. Not very helpful, but we think the days are getting a little tougher where we can expect to see continued strength in the market. The days are getting its getting a little tougher to expect continued strength in the market. So you think were getting a little toppy here, is that it . Weve cut back on our equity allocations in our portfolios. Were playing with real money. We think its increasingly risky in the equity market short term. Were still zwregenerally overweight. We have some breaking news. Becky quick on apple. What do you have for us . There is a new book on apple thats out today. Its called haunted empire by a former wall street journal reporter who was on squawk on the street earlier today. The book has stirred up some controversy. A lot of books that look at apple do. It comes to the conclusion that apples best days are behind it. So for that reason you are seeing a lot of people both inside and outside apple talking about this today and kind of digging things through. If you wonder what people inside apple are thinking about it, i did just go back and forth over email with tim cook the ceo of apple to get his thoughts. Here is what he has to say in an exclusive statement hes given to cnbc. Tim cook says this nonsense belongs with some of the other books i have read about apple. It fails to capture apple, steve, or anyone else in the company. Apple has over 85,000 employees that come to work each day to do their best work to create the worlds best products, to put their mark on the universe and leave it better than they have found it. This has been the heart of apple from day one and it will remain at the heart for daek kouds to come. I am very confident about the future. Weve always had doubters in our history. They only make us stronger. This again despite a former wall street journal reporter who did some exhaustive research. It has stirred up some controversy because it comes to the conclusion that apples best days are behind it, that its gotten tougher at apple to innovate since steve jobs death. Tim cook reporting there are 85,000 people who are coming to work every day and showing up. Were running out of time here, but does he simply just dispute the conclusion that apples best days are behind it or can he point to specific things . I dont know if you got into that i dont have any specifics on it, bill, and i was not on the phone with him so it wasnt a back and forth he can change. This is a response he sent back. I talked to other people who say some of this is cherry picking but the controversy you tend to get when you take a deep dive into a company. People on the inside, people on the outside so tee things differently. And the word nonsense speaks volumes right there from tim cook to describe the book. I guess we know his thinking on that. Thats right. Thanks, becky. Thanks, bill. Becky quick. Were going to take a quick break. Well get to the closing countdown and see how the market handles the close and then after the bell, go bargain hunting with Joel Greenblatt. Well find out where he Sees Opportunities in this market. You may be surprised by some of the names he has on his list right now. Youre watching cnbc, first in business worldwide. Friday night, buddy. You are gonna need a wingman. And my cash back keeps the party going. But my Airline Miles take it worldwide. [ male announcer ] it shouldnt be this hard. With creditcards. Com, its easy to search hundreds of cards anply online. Creditcards. Com. Anply online. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Coming up on the two machine minute mark. A recap of the day, the putin rally continued this morning. We were up more than 100 points much of this day. Starting to lose altitude in the last hour of trade. 86 points on the dow. Adobe came out and beat expectations. Its up about a percent right now. Oracle is whats coming out. They are expecting a profit of 70 cents. Whisper. Com says it could come out to 74 cents. Back with jeff from fifth third and walter todd from greenwood capital. You have already established youre taking some money off the table. What about you . We acknowledge the market could be range bound in the short term but we think were in the middle innings of this economic expansion. We think consumers, businesses, and government have underinvested. We think were going to see a Capital Spending push here this year thats going to drive Economic Growth and that leads you to industrials, technology, financials, and discretionary. Youre investing in them right now. Correct. Pick your spots, the market may be choppy but we like the economic expansion. You like the economy longer term you just think its getting ahead of itself. We think the next top is going to shift very quickly to the fed being behind the inflation curve. We look at tighter labor than we think, tighter capacity in the economy. Last years housing rally filtering into this years cpi numbers. All that could change the tone of this market very, very quickly. And bob pisani joining us here. We do have the fed meeting tomorrow. Thats what everybody is going to be watching. Well probably have a quiet morning until the immediate. Forward guidance will likely be altered somewhat. They will stick to a 10 billion taper, thats the betting so far. Look for them to make some comments on the improved economy. Capacity utilization better than expected, production better than expected. Today a nice revision in Housing Starts for january. The data is starting to heat up a little bit and its not march. Were not getting march data. Were getting february data looking like its heating up a little bit. Gentlemen, thank you. Appreciate it. Bob, see you later. Were going out off the highs of the day but still a decent rally on the heels of yesterdays rally as well. Stay tuned, the report that will set the tone for tomorrow as well, oracles earnings coming up on the second hour of the closing bell with kelly he was and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell. Im kelly evans, and on this tuesday here is how were finishing. Another winning day on wall street. The Dow Jones Industrial average after shedding in the range of 300 points last week adding another 91 today after a strong session yesterday as well. That puts it at 16,338. The nasdaq adding 52 points. The outperformer on the session at 4332. The s p 500 up 13, 1,872 is the closing level there. Again, 1,878 is pretty much the alltime high for this index. Remarkably enough with everything going on in the world, were only a few points shy of that level. Now, were also expecting earnings at any moment from oracle and when those hit, well bring them straight to you. With me todays the closing bell panel, kate kelly, kevin oleary, author of cold hard truth on men, women, and money. The profits marcus lemonilemon carol roth, and guy adami. Guy, do you want to talk oracle, markets more broadly . Lets wait for oracle because its traded great. Lets talk about the markets in general. Youre too young to know who ethel mermen is but everything is coming up roses. Its crazy. The market doesnt want to go down. I see the news. I think its mixed at best. Bob pisani just said the data has been good. Id call it mixed. I dont think earnings have been fantastic, but the market wants to plow higher. You cant get in the way. I have been wrong for the last 60 s p points. I thought the last selloff would sort of move faster to the downside. It didnt. So it tells me the market it tells me we will continue to go higher. We saw the market slice down through on the s p 500 that 1850 level but it has sprang back up, kate. What do you make of that and the move weve seen at the same time seen in commodities. Is that a bullish sign fundamentally or will it be a problem down the road . Real quick on the stock market, more or less the folks i talk to in hedge fund land for instance say theyre constructive u. S. Markets still. They like the conditions theyre seeing with some limit ed qe involved. They like domestic cyclicals among other things, like the u. S. Relative to europe for sure. In terms of commodities, interesting story with the drought in brazil and california as well as some ind yo sin kratic issues in the oat market. Ags in general are only 15 or 16 of the composite. You have much more exposure to energy. Thats why you see the overall commodities indices are only rallies a percentage or two this year. So so far the kind of macro effect has been limited. Thats a good point. To rattle off some yeartodate numbers were talking about, with the broader indexes unchanged stock markets, i mean, coffee is up 70 . Hogs, 42 , cocoa 12 , sugar, wheat. Marcus, are you worried about the u. S. Consumer . Im a little worried about the u. S. Consumer. I look at transports and some manufacturing of course im wondering why theyre driving so high. I think cash on the bl sheet is having a big impact for a lot of companies. Were not getting a lot of debt, sitting with a lot of cash, and earnings arent bad. Kevin, the business round table told us in their Quarterly Survey theyre finally seeing better signs in capital expenditures, a little better with hiring and generally their outlook. Theres another reason, too. Theres no competition for equities. Im a fixed income investor. Show me a tenyear at under 3 . Why would i ever buy that . When i see the commodities starting to have an inflationary tonality to them why isnt the fed looking at that and raising rates for me. Im getting unhappy. Carol, are you unhappy with rates . Youre always unhappy. Juneau im always a little contrarian but as were talking about everything coming up roses and all the prices rising, i want to go back to mr. Adami and i want to talk about the russell 2000. If you look at the small caps which we dont spend perhaps enough time talking about, those seem to be really getting a bit out of range, a really big spread here between whats going on with the russell and say the s p. So i wanted to ask guys opinion on if hes concerned about what hes seeing in the small caps . Kel, im in your camp. You know im way in your camp, but at a certain point as i say all the time, price is truth. Yeah, i think you have to look at the russell and you have to be somewhat concerned, but the momentum in the s p is tremendous, and just to push back on the yields play, why would you ever buy bonds . If you had said to me, guy, the s p is going to be within a whisper of an alltime high by march, where are tenyear yields going to bei, i would have said 3. 5 . The bond market seems to be saying something that the equity market doesnt see. I think the bond market is going to wind up being right, but for now both seem to want to go higher. Kate . If i can just return to this point for a second about commodities and their impact on the market. I think youre going to see a case by case involvement. Jim cramer is going out to the starbucks annual meeting tomorrow. What do they have to say about the 70 spike in coffee prices . Granted, coffee prices were at a real low at the end of last year and they have some room to run with, but an effect like that on sort of a raw input are going to have a huge effect on Consumer Companies that are so dependent on one or two materials. Especially if you have to take a hit to profits. Goldman talking about whether weve reached peak Profit Margins or not. They think we have a couple more quarters to go. Whats interesting, kevin, is despite the fact weve seen this runup, the global inflation indexes is running at an annualized 1. 6 because emerging Market Growth continues to fall short of what it needs to be. The u. S. , the cpi figure this is more than were still pretty soft despite some of the choppiness here and there. So i guess if you want to talk about higher rates, do you have to see both higher general inflation and higher wages. Youre trying to tie our u. S. Domestic economy to the rest of the world, and maybe its different this time. But i look at the u. S. Markets and i talk to Small Business every day. Things are looking better. Theres no question about it. But i want to go back to what guy said. If he really thinks the tenyear rate is going down, that is incredibly bad for equities because hes right, bond guys are way smarter than equities guys. Youd know that if you read liars poker. Im a bond guy and thats the way i look at the world. Right now im looking at this saying to myself somebody is wrong, and if this bond doesnt go past the tenyear has to have more than a three handle on it. Inflation, the one thing we all need to be thinking about especially with the fed meeting going on right now is at some point is the fed going to be caught flatfooted here . At some point is inflation going to get away and theyre going to have to make a big move here . I personally think thats going to hahn and that can have a big effect on the market. The thing i worry about is summer and late fall earnings from some of the retailers. Youre talking about all these commodities driving up. Its going to the finished goods products will land on shelves and the retailers will not be able to raise 3r50is prices. We have oracle out with earnings. Josh joins us with the numbers. Josh . Kelly, oracle just reporting. Lets get you the numbers. Remember, the street was looking for 70 cents on 9. 4 billion. Oracle reports 68 cents on 9. 3 billion. So a miss there on the bottom and the top. Looking through the divisions, new Software Licenses, so new money oracle is bringing in, that was up 4 to 2. 4 billion, but that does miss what the street was looking for. Software updates and support up about 5 to 4. 6 billion. Thats in line. Hardware products up 8 to 725 million. Thats above what the street was looking for, but oracle reporting 68 cents on 9. 3 billion. A miss on the bottom and the top. Delly, back to you. Thanks very much. I worry about oracle missing top line. Cap ex got pulled back in the last 90 days. People started to get a little nervous. I think we may see some pent up demand in the following quarter. Lets bring in david garrity. What jumps out to you. I think what we have to consider is theres been a lot of competition coming up for established it. Vendors such as oracle from some of the emerging companies that have been benefitting from a strong stock market and a lot of entry capital available. Companies like amongo db that costs 10 as much as oracles and you have been finding as companies have been starting to look towards big data as a means of running their business, obviously theyre starting to look at vendors who are more oriented towards this new paradigm rather than Companies Like an oracle or an s. A. P. Or ibm that are the one that is brought out the first iteration ev of database software. I think oracle will be challenged Going Forward from here. David, whats your view on the shares right now . Currently the stock trading down about 6 , the price to Earnings Growth relative to where youre looking at is about 1. 3, 1. 4 times, not necessarily extended versus the overall market, but i would say if youre looking for growth, oracle might be a little challenged unless they step up to the plate and make an acquisition which theyve not been shy about doing in the past. Did i hear what did you say the multiple was, the price to earnings ratio . Price to Earnings Growth is approximately about 1. 35 times Earnings Growth, im sorry. 12 1 2 times forward earnings. Guy, do you want to jump in here for what this means with this old i hate to call it old tech space. It guess back to what carols question to me was. What does it mean for the large cap names and what does it mean for the russell . Some of these smaller cap names are taking over. Clearly, when you see a report like this out of oracle. Oracle has had a huge run, probably going to be a couple days of this selloff. What does it mean for the Broader Market . The market has shrugged off everything. Then i look at ibm which i think has gotten way ahead of itself on the long side. I think maybe ibm is in for a similar quarter to oracle. Maybe ibm is a sale here as well. But, again, if the Broader Market shrugs it off, its just one more way to look at it that the market doesnt care. If this company, if their business is being disrupted by new players, by the innovation in the space, why should we take that as a cautionary sign . I dont know. Im not saying you should. Thats going to be what we should look for tomorrow though. Well, i guess because what were going to start to see, kate, is a lot of people saying the market is shrugging off. Oracle comes out with a big miss, et cetera. How much read through should there really be . Its hard to say. When you read these days about what people are looking to from professional investors, its all about sort of fundamental research and the oldfashioned stock pick something back. So you would think you would see a stronger reaction to news like this. I also notice if you look at hedge fund trends, you saw a peak in total assets under management last year, yet the largest number of closures of individual hedge funds since 2009. Theres an emphasis on quality and sound strategy. It doesnt explain why the market isnt reacting more strongly today. This might be a case of having to listen to what the company itself says if its talking about macro weakness, pricing pressures, et cetera, as opposed to kind of things specific to the execution of their business plan. Yeah, they can come back and say that geographically things were weak for them over in europe, but i would say from a Bigger Picture standpoint, you are seeing a rotation, new tech versus old tech. Obviously you can look at some names like a facebook paying up 19 billion to buy whatsapp and the stock is up. From that standpoint investors are looking for companies that are making bold moves and for companies that are basically setting themselves up around new paradigms in terms of computing. Yep. Well leave it there for the time being. David, thanks for your time. Guy, really appreciate it as well. Thanks to josh lipton for breaking the numbers. The panel sticks around with me and be sure to stick around and catch guy and the rest of the fast money crew coming up at 5 00 p. M. Now, taking charge, thats what gm chief mary barra is attempting to do in the wake of the recall mess of the company she now heads. Shes issued an apology, installed a new safety czar and wi well look at her moves next. And ill talk with Joel Greenblatt, the man behind the book, you can be a stock market genius. Some names hes buying and some hes avoiding. Youre watching cnbc, first in business worldwide. Siness world. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. General motors Ceo Mary Barra speaking out about the recent recalls plaguing the automaker. Shes announcing the creation of a new post to deal with safety issues. Phil lebeau joins us with the details. This is really the beginning of gm trying to get in front of this story because theyve been beaten up so much over the last couple weeks. Today mary barra held a rount table with some print reporters answering questions about the recall crisis for the First Time Since this all blew up a month ago. She avoided talking about specifics in terms of what went wrong over the last ten years identifying the ignition switches and what went wrong there. She says they will not sacrifice accuracy in their own investigation for the sake of speed, and she says that investigation may take up to a couple of months. She said, i ask for your patience. I know you want to know what happens. So do i. So does mark. Shes talking about mark royce, the head of global product development. This is the subject of our internal investigation as well as some inquiries. There may be time that i am limited in what i say, but i do commit to you that as we have results along the way, we will share what is appropriate and more importantly we will take action. She says that if she is asked to testify on capitol hill because there are a couple of congressional hearings that are going to be coming up in the next month, she will testify. So far she has not turned over any documents to the department of justice, hasnt been asked to turn over any documents. She says that shes sorry for the loss of life and that it was one of the first points she made. Thats the first time weve heard that, kelly, as General Motors and mary barra are trying to take those steps at least a little bit to say to the public, we understand the severity of the situation and we grasp how serious this is and what needs to be changed here at General Motors. And, phil, stay right there, if you will. I want to ask the panel about this. Marc marcus, to you in particular, you go in and fix businesses, not necessarily that gm is a flawed business here again, but obviously there are issue that is led to this crisis, some of them predating the new gm. Is mary barra now doing the new thing. She is and thats why i like her as a female ceo. Shes taking responsibility, acknowledging the mistake. Shes saying clearly, this will get resolved, heads are going to roll, im in charge, its going to get fixed. As a female ceo or as a ceo in general . We had a discussion last week about whether a man or a woman would handle this differently and i think in this particular case the fact that shes showing compassion, shes being a great listener, im not sure a lot of men could do the same to be honest. You raise an interesting point. I was listening to phils report and also his earlier reports and wondering what kind of grade would company watchers give barra for communication . I think its interesting she gets a pass for sure. No ceo wants to inherent this. Here is the question. In the incremental buyer, are they going to buy a gm car . Are you going to say im going to wait until she figures it out, im going to buy Something Else . I dont think it impacts current sales primarily because when you compare this with toyota, toyota impacted vehicles that were on the lot and it made people say, hmm, should i buy this . Were talking about a recall situation for vehicles that were built between 03 and 07. Not to diminish the seriousness of that situation. It simply says the people out there looking at a gm vehicle right now are not thinking about this recall in terms of is it in the current vehicles. At the same time doesnt it raise the question of what else might they have overlooked from 2007 on . Absolutely. Absolutely, kate. But if you go back and look at the history of recalls in the auto industry, almost every time theres been a terrible one, you have bun dits out there saying thats it, these guys are dead in the water. You look at the pinto, look at the explorer, toyota, every time auto sales tend its also its an umbrella brand. Youre talking about gm. People dont buy gm. They buy cadillac or buying a certain subbrand, and so the average sun koconsumer may not even though its at the parent level, they may not e quit the issue with the brand theyre buying. This is why having a dealer body that can represent a brand in a community and be very strong with the consumer and instill confidence you had to sneak that in there. This is why having a dealer body is important. Theyre communicating on behalf of the manufacturer and their but tesla it raises the old scepter that in north america, not just gm, we built crappy cars, and does this bring us back into that concern because thats when the germans and everybody else got market share here. Exactly. They can point at this and say, look, here is evidence that along the way weve gone back to our old ways of building crappy cars. And another thing let me put it this way, there are more people who will be read being it and its gotten picked u up, and just as maybe people were starting to trust new car companies, in the back of their mind do they think maybe its just the old thing in new clothing . Theres no doubt. That is an easy theme for anybody to pick up on the web. I get emails all the time from people, both pro and antigm and the anti ones, theyre all the same. Theyre terrible. They build hunks of steel that drive down the street and fall apart. On the other hand, i also hear from people who say they will buy them. But speaking of this damaging narrative, fim and everybody else, too, not only is it something that contributes to the perception thats negative about u. S. Manufacturers, but this is what happened before the government bailed out the big three automakers. It speaks to a bigger issue here about accountability, and i heard mary barra say shes going to take action. Narrowing it down to the people who knew and action against them and getting them out of their jobs and i think if she does that, that will give me and i think a lot of investors a lot of respect towards her. Maybe shes done a great carol, youre assuming theres still somebody who is at the company who was there in 2014 and that they put their name on a document. If were looking for a smoking gun document, youre not going to find it. I think this is more a case of generally speaking middle management incompetence, people let thing go. Were not as diligent as they should have been. No market share loss in the next two quarters. Is that what youre saying . I wouldnt talk about that because i wouldnt predict that and here is why. Youre dealing with the pickup truck market and the problems that theyve had getting their current fullsize pickups to be as readily acceptable or as accepted in the market as they were in the past. Thats a wildcard in there. Theres no way of knowing for sure. Would you say generally no share loss, phil, over the next couple years . Is that my guess is that if you look back at General Motors in two years, theyre generally going to be about where they are now. 17. 8 is the market share. I wouldnt be surprised if theyre around 17. 8 or 17. 9 two years from now. Kevin, are you taking the under . I dont think id short the stock yet, but this is if this happens again in the next few quarters, this will not be good. What about tesla . Toyota survived it. They did and, carol, tesla, thats a whole other segment. Phil, thanks very much. You bet. Appreciate it. Up next, how to be a stock market genius. Joel greenblatt, author of a book with that very same title, tems us where he thinks markets are headed and whether you should go along with them. And the reaction to Vladimir Putins comments indicating they believe him when he says hell stop by taking crimea. What do you think . Tweet us your thoughts cnbcclosingbell is the way to reach us. Your best ones later on the program. Well be right back. ll be righ. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Reach us. H us. E like me. Reach us. H us. Eror satisfaction with selfdirected services by j. D. Power and associates. Your best ones later on the on humans even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, we give you the money for a new one. Call Liberty Mutual insurance at. And ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. So call. To talk with an Insurance Expert about everything that comes standard with our base auto policy. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . Welcome back. Lets get back out to cnbc headquarters and get a check on some of todays big movers. Lets get you up to speed. A few big names to focus on. Oracle shares are taking a hit after an earnings miss. Earnings and sales both came in worse than analysts expected. New Software Sales and internet based subscriptions rose by 4 this past quarter over the same time last year. That growth rate was on the lower end of oracles previously given forecast. Lets move on to jor tech company, Adobe Systems which prematurely released their earnings. Profits and sales beat analysts estimates. Those results were aided by stroer stronger demand for their 405,000 more subscriptions. Solar city, the shares are all over the map on heavier than expected volume. This as the Company Posts a Fourth Quarter loss that was smaller than wall street was expecting but Current Quarter forecasts are for a bigger than expected loss than wall street was looking for. So those shares again moving all over the map positive to negative. Big action. Back over to you guys. Thanks very much. So where should investors be looking for value in in market. Joining me to help answer that question, one of the most distinguished Value Investors out there, Joel Greenblatt of gotham funds and author of the book, you can be a stock market genius. Thank you. Do you take oracle as a tell for the sector more broadly or as somebody being disrupted . We look in general at individual stocks and were valuing them individually. So what we found is that most of our extra returns really come from individual stock picking, not from sector picking. In fact, we get no benefit from where we con scentrate on a particular sector. In the tech sector then, what of the names you like . Well, we like the Cheapest Things that are coming up now are hewlettpackard, for instance, and apple. You know, theyre trading at low measures of free cash flow. There are huge returns on capital businesses. Most people dont like them because theyre old and stodgy. I have been teaching at columbia for the last 17 years. I ask them what do you do with a company that the technology is always changing . I usually tell them to skip that one and tell them to find one they can figure out. When you buy them as a group with metrics that are so cheap as a basket, we dont just buy apple. We buy a bucket of apples. And our bucket right now is very cheap for technology Companies Like that. So for people out there trying to figure out they look at this market, its kind of flat yeartodate and they say how do i pick the winners . What do you tell them . How can they be a stock market genius as well . Well, you know, it comes down to valuing businesses and buying them at a discount. Most people cant do that. So they should probably stay out of the way. What i can say big, big picture is this. Large caps have a much better valuation right now than small caps. Theyre not great, but theyre not terrible. Weve looked back at the last few decades, and if you look at the russell 1000, which is the thousand Largest Companies in the u. S. Which mirrors the s p very closely, were in the 42nd percentile towards expensive. Its been cheaper 58 of the time. 42 of the time its been cheaper. The year forward returns for that index have been somewhere between 7 and 12 in that area, and the difference is, and i heard you speak being it before, the russell 2000. Its stock number 1001 through 3,000. That tells a different story. Its been cheaper 95 of the time over the last several decades and when its been this expensive in the past, the year forward returns are negative, negative around 3 or so. So not great. No. So i imagine youre steering clear of the russell then and of specific names as well snp what do you think about a sector like biotech . Most biotechs have had an incredible run, so i dont have i cant opine on the sector. I would say there are many biotechs that are very expensive. People are very hopeful. Many of them dont have anything in earnings so its very hard to value them. Youre valuing them on hope of their new products and when people are hopeful, they will bid those things up. There was a huge run last year a huge run in january. So were finding a lot of things to short in the biotech sector. Hasnt been particularly great for us to find some of those, but now you have an extreme small cap environment and you have an extreme biotech environment, so i think Going Forward good opportunities on the short side there. If you then were to say to people the value is mostly in the larger cap stocks, it looks like retail in particular there are a couple names there you guys like, correct me if im wrong, coach. Any others . Well, whats coming up cheap now are stocks like kohls and, you know, not super high end companies. I think people are still worried about the midlevel consumer, and in general just worried about the economy. So, you know, particularly the consumer. So those coming up cheap right now. Pretty much everything we buy, people dont like for some reason. Thats why were getting it cheap. Its just that what tends to happen is that people are shortterm oriented, and whether is professional manager has a longterm horizon or not, its pretty clear their clients dont. Some of the stocks the next year or two dont look as good as the recent past so thats not the happy Hunting Ground for making money in the next year or two. We take advantage of that in general. If you had to leave our viewers with some topics to hold onto for that medium term, what else looks attractive . Like i said, the super large caps, you know, are relatively cheap. So the microsofts of the world, hewlett and apple and, you know, pretty much the top 20 names in the s p 500 are a little over 30 of the index. Its weighted so heavily towards those, and most of those names are reasonably priced. Even google. You can still make money in this market . Yeah. Like i said, its still above average as far as expensive but theyre still positive returns available. You dont have to the average has been 8 to 10 . Joel, thank you so much for being here. Joel greenblatt of gotham funds. Another new twist in the missing Malaysian Airliner and the twist that pointing again at the pilots. Do you know how Much Airlines monitor their pilots in the years after they hire them . We didnt but we did get the answers, and well tell you when we come right back. Come right. No two people have the same financial goals. Pnc investments works with you to understand yours and helps plan for your retirement. Talk to a pnc investments Financial Advisor today. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Including postage and a digital scale. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. Welcome back. New information on the missing plane intensifying the focus on the pilot. Ker simmons joins us with the latest. The mystery deepens every day here. Authorities here now saying that they believe there was no one else on board flight 370 who could have flown 777 and that some of the maneuvers it made as it disappeared would have been preprogrammed onto the computer. Inexplicable to people, much of this, as investigators study the pilots Flight Simulator confiscated from his house to see what that may reveal about what he might have been doing request that. At the same time, friends and family of both the pilot and the copilot defending both men. So we stim dont know after all of this time simple questions. Who was flying the plane . Where was it being flown to . Where is it now . And why was it flown in the way that it was . Back to you. Keir simmons the latest. This story reminds us of the enormous power the pilots have once they enter the cockpits. Everyones lives completely in their hands. After an airlines hires a person, what kind of procedures are in place to monitor their mental status throughout the ensuing years in joining us for more, greg feith, former ntsb investigator. Greg, its good to see you again as we follow this saga and as the focus shifts to the pilots. What do we need to know about the controls in place here . Kelly, when an airline hires a pilot, especially here in the United States, they do the background checks, they do some psychological profiling of that pilot to make sure that they are pilot material for that particular airline. Every year the pilot will go back for recurrent training. They also must meet a medical standard yearly in order to perform the duties as a commercial Airline Pilot and exercise the privileges of their certificates. There is no specific psychological monitoring or profiling every year after their initial hire. And, greg, are those standards in the u. S. Generally toughest . What about the International Standards for countries like malaysia as well . A lot of the standards are dictated by the airline, especially with the hiring standards and the criteria by which they hire a pilot. A pilot thats hired here may not get hired overseas and vice versa just because the standards are different, hourly requirements are different, experience, and that kind of thing. Just curious thinking through this, id love to know what the panel thinks, kevin, if you think about the requirements we have for people to get licensed as a pilot, should there now be more scrutiny on their physical and mental condition throughout all of those years they are a pilot . I dont think so because 99. 999 of the time, and i think of this when i get on a plane every day. Works out. I land after having my drink and i feel pretty good. I want to ask greg a question i think is going to be raised and i like millions of others are fascinated with this story. At what point do we stop looking for this plane . Because it must be a huge cost to countries and private companies that are looking for it. In a month, in two months, in three months, is there a point at which we just stop . Kevin, absolutely. You have to start looking at it on the return on investment. When i did value jet, we were down there pulling records for four to five months. There comes a point where you have to really evaluate the assets that you have expended, the monetary assets that youve expended, and determine what your return on investment is to see if its going to proffer any Additional Information that you dont already have. And the malaysians will have a tough call here shortly. The United States has scaled back their operation. Theyre down to two aircraft although they argue theyre not necessarily scaling back the scope of their involvement. No, theyre going to stay involved. Theyre just going to move their sea assets out of there. Right. Quick question on one of the new opera at this theories which is there was some sort of fire on board and the pilots intentionally shut off the transponders in order to contain a potential fire and eventually smoke or fire rendered them unable to operate the 345eplane it crashed. Would that explain why the plane may be lost somewhere in the indian ocean . Theres been this theory, especially about wire fires. New generation airplanes have certified wire that will not burn. Its basically selfextinguishing. If there was a wire fire of any kind, and typically wire fires are slow burning, so, yes, they will create some smoke, but youd have to take out a lot of the wires in that airplane to be able to knock out all the communications. Pilots would be able to get a mayday call off even if they had smoke developing in the cockpit, they would at least declare mayday, we have smoke in the cockpit and try to tell them what their intentions are. Youd have to have a big fire to take out all of the wiring that would affect those communication radios. We have to go. Marcus, you looked upset a second ago. I dont want to hear about return on investment when youre looking for my family. Of course. Malaysian needs to look until they find something. At some point it becomes cost prohibitive. Its been a couple weeks, not a couple months. Thats where the issue of looking in the wrong body of water because we didnt get proper information out of malaysia was particularly undersetting. What a waste of time and resources but also peoples feelings. Something to keep in mind when we talk about the cost of these Radar Systems is the cost of these search and rescue efforts. Got to leave it there. As mentioned, its probably not the last well see of you as we follow all of this. Thanks very much. Were getting details in the meantime on why adobe released its earnings so early. Jon fortt joins us. It looks like a mistake. I have gotten this statement from adobe. Weve determined an internal error caused the Investor Relations data sheet to be accessible from our website prior to scheduled publication. Just got that statement. Ill note the revenue and earnings both came in above expectations as did Creative Cloud subscriptions. Numbers spiked when the numbers leaks. But its trading down a little after hours. Thanks very much. Straight ahead, the golden years for americans may be tarnished. A new study from the Employee Benefits Research Institute gauging how confident americans are about retiring and its not looking good. Also today russias Vladimir Putin says he has no other design on the rest of ukraine and the stock market seems to believe him. What do you think . Your thoughts coming up. S comin, ive learned that when you ask someone in texas if they want big savings on car insurance, its a bit like asking if they want a big hat. scuse me. Or a big steak. Or big hair. A new study from the employee your thoughts coming up. Houghts. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. Welcome back. Russia and the markets, retirement, disney, did any of these stories make the hot list. Lets check in with alan wastler. You bet they did. First of all, right out of the gate, the news that microsoft is finally going to make Office Available on ipad according to a reuters report, thats been on fire all day long. People have even been more interested in the pop microsoft stock got right from that news. So weve got a sum up of all the stock action on it today. Thats been our number one for the last hour. Number two, barclays initiated coverage of the domestic luxury sector. So we titled it up as basically kate spade is in, michael kors is out because they put all their stock picks right out there. People have eaten that up on the site. And finally, Sharon Eppersons retirement piece looking at the latest numbers out, its sort of a good news bad news thing. The good news is, hey, wow, people are feeling more confident, at least some of them. 18 . Up from 13 . Unfortunately, thats still a pretty low percentage right there. Exactly. You know, not great, but anyway, retirement stories always do well on the website. Thats whats burning it up right now. Its such be a important issue. Were going to talk about it with Sharon Epperson just ahead. Thanks very much for now. Take care. See you tomorrow. The clock is ticking, the retirement clock. The reality of that clock is counting down on 9 everyone in this country. Up next, Sharon Epperson will join us. She has the latest report on the state of retirement. Its news you need to know even if its not very good news. Well be right back. What if a small companyigh. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. A Research Tool on thinkorswim. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. We still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness if you qualify, and new car replacement, standard with our auto policies. So call Liberty Mutual at. Today. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . Welcome back. The Employee Benefits Research Institute living up institute, living up to its name. Its put together the most comprehensive study on retirement. Sharon epperson broke some of the study down for us. Most americans arent close to being financially prepared to retire. More than onethird of americans have less than 1,000 in savings and investments, according to this new survey. 60 have saved less than 25,000. And theyre not taking action. Fewer than half have done a come collation to find out how much they should be saving. At the same time, workers overall, confidence in their ability to retire comfortably, has increased for the first time in seven years. 18 say theyre very confident, from 1 last year. But that increase in confidence is almost exclusively with those with higher incomes and participating in Retirement Plans. Onethird of workers with incomes of 75,000 or more, will have enough to retire comfortably. And theyre twice as likely as those who dont to be very confident. But Financial Advisers say its a false sense of confidence, tied to the stock market gains, not to improved savings habits. A second survey finds most americans spend more time buying a flatscreen tv or choosing a restaurant for dinner than they do on planning investment in an i. R. A. Thats an investment many will need to rely on for decades. Kelly . Sharon, stay with us. Such an important topic. Carol . I wanted to ask sharon a question about how much these people should be saving. Because theres one thing to be confident and theres another thing to be in reality. Ive heard anywhere from 25times to 40times your yearly anticipated annual spending. Is that a correct range . You would be really wellset if you had that much saved. Theres others who say depending on your age, if youre in your mid40s or so, you should have threetimes your salary. And by the time you retire at 65, 67, you want to have at least eighttimes your salary saved. So, those are some smaller rules of thumb. Theyre a little less than what you were mentioning. But for many people, they say even that is just unattainable for them at this point. I was talking about your annual anticipated spend, not your salary. Okay. Yeah. Statistics like this make you want to ask, should we not be forcing people to take a portion of their posttax income and force it into savings . Look you sound like senator warren. If these stats are true, everybodys going to end up paying for these people. Exactly. We dont want people on streets of america not being able to buy food. If you have 1,000 in the bank and youre 65 years old, thats exactly whats going to happen. I raise this. This goes back to a suggestion we raised in january. You can have the private sector do this. Theres a ton of cash and earnings and profits. Why not incentivize companies or get them to put them into profitsharing or savings accounts more aggressively . One of the things that the Obama Administration has tried to do with my r. A. Is encourage people who dont have a Retirement Plan set up, dont have access to a Retirement Plan at work or have not accessed the Retirement Plan at work, to at least start saving. And the other thing, now that its tax season, that a lot of folks who are lower income workers dont realize is that theres a savers credit they can qualify for. Theres a tax incentive there for so Many Americans that could use it dont take advantage of. I thought the plan was an interesting one. You would think that a lot of people out there see, i can only put 20, 50 in a retirement account. Whats the point . Or i dont work for a large company. Its a nice potential solution. Thats idea is falling off a cliff already. Already . We have the structure. Im in the mutual fund industry. Let me manage the money. Send it to me. Kevin, is it not better to get people investing in stock, investing in Corporate America . Im saying corporately, when you sign up for a job, it becomes law that 10 of your paycheck goes into an account that forces you to save it. That seems like its your money. Kevin as finance minister just resigned. I just saw that. Many of the people who should get advice, who should work with professional managers, even when they do that, they dont listen to what theyre told to do. Exactly my point. I think Social Security was supposed to be like that. Thats the government managing the money. You want to force people to save. I want the private sector to manage your money. Coming up next, your tweets. Vladimir putin said he had no other designs on ukraine, after annexing crimea today. Markets took him at his word. Should they . Your response when we come right back. Ht back. Searching for trade ideas that spark your curiosity tdd 18886282419 can take you in many directions. 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Until boom, its bedtime. Your mattress isnt bliss its a battleground of thwarted desire. Enter the allnew sleep number classic series. Designed to let couples sleep together in individualized comfort. Starting at just 699. 99 for a queen mattress. Hes the softy his sleep number setting is 35. Youre the rock your setting is 60. That works. Hes the night owl. His sides up while youre in dreamland. Youre the early bird. Up and at em. No problem, because youre in it together. Keeping the love alive. And by the way snoring . Sleep numbers even got an adjustment for that. Crazy . Only if sleeping peacefully with your soulmate is crazy. Find your sleep number setting only at one of our 425 stores nationwide. You can afford a sleep number bed, you cant afford another mediocre nights sleep. Know better sleep with sleep number. Welcome back. Russian president Vladimir Putin, saying he has no plans for ukraine after annexing crimea. Markets seem to believe him. Do you . Captain j. Tweeting, putin is believable at the moment until he changes his mind. Jeff tweets, i trust him to appear in public with his shirt off and ride more bears, too. Thanks to everyone on the panel. What do you think when it comes to laying out the rest of the week . We have janet yellen, appearing tomorrow. Thats going to be a huge market mover. Were going to learn about the health of u. S. Banks. Maybe some of the capital there returning on thursday. Is it still going to be a geopoliticsrelated week . I think waiting for indications from putin as to his plans, that will be something to watch. Im looking to see closure on jpmorgans sale of its commodities unit. Were told that will happen any day. And it looks that the buyer is a swiss trading company. As banks get out of noncore assets. This is the meeting that everybody has been waiting for. Weve been talking about the march fed meeting. I think what comes out tomorrow, thats going to set the tone for the rest of the week. Im looking to see what happens with apple this week, with microsoft announcing the possibility of putting office on to their tablets and other devices. Whats going to happen . Is this the punch they needed . Those shares up nicely today. Im looking at the focus on the banks. Asking myself, will there be a time when we leave these guys alone . The taxing the sector itself, is shear insanity. Ridiculous. As we mentioned, that finance minister position in canada, coming available. The idea someone i know put together a study showing that when gdp in the u. S. Goes above 2. 5 , people care much less about the headline damage at banks. Maybe were headed in the right direction. I think weve gone way too far in punishing them. Its been great to see you this hour. You can tune in and see much more. Kevin oleary, coming up on tonights shark tank minimarathon at 8 00 p. M. Eastern. And right after that, a brandnew episode of the profit, with my two panelists here today. Fast money coming up in seconds. Melissa lee, whats on tap . I got three words for you. Kareem abduljabbar. Is he on the show . Yes. Hes going to be our guest. He thinks that College Athletes should be paid. He also has a new business hes starting up with amazon. Com. Well hear all of the details about it. Concerns Sports Memorabilia that has evidence of the players actually owned it. Dna evidence. I love it. I want his bracket picks, too, melissa. Well try, kelly. Over to you guys. Fast money starts right now. Live from the market site in new york citys times square. Weaker than expected Earnings Report. That Conference Call starting right now. Well get the details throughout the hour. But the rest of old tech breaking out. Microsoft, hitting its highest level since july of 2000, on reports it will unveil Microsoft Office for the ipad. Cisco is hhe