Transcripts For CNBC Closing Bell 20140515

Signal a slowing economy. Something well be kicking around a lot. It is the talk of the town. The Dow Jones Industrial average meanwhile is off 168 points at the session low. We were off more than 200. A little bit of a comeback here clawing its way back anyway. Still negative. Meanwhile the nasdaq off. 6 . Or 25 points today. The s p 500 shedding almost 1 , 17. Right in line with the dow there. The russell 2000 has been the leader to the downside for much of this move lower. But today even though it was down 1. 4 or thereabouts at one time, that has come back this afternoon. Interestingly. The blue chips have not followed suit. Something well keep an eye on as we go into the final hour of trading here for this thursday. Lets kick things around in our Closing Bell Exchange today. Sharon stark is with us with d. A. Davidson. John kosar from asbury research. David molnar from high tower. Greg ipf from the economist. You think the bond market is way too bearish on the economy. Right . I talk to a lot of people and nobody can really understand why the bond is doing what it is doing. Best explanation is what jim bianco said yesterday too many people think the bond market is going down so its got to go up. That is to say yields have to go down. Look whats happening in europe. Economy doing much worst than anyone expected. The german bund is down even more inyearold terms than the american bond. I think that tells you worldwide we are still in a period of disinflation, weak growth and you should not be too short duration. Great point, greg. The trading session today illustrates this as well. Pressure started to come off the selling in the stock space at around 11 30 when europes markets closed. Thats when some of the worst losses of the session were all recorded this morning. Take a quick listen. Heres what jim bianco said about where he sees the 10year going yesterday on the program. I think that this capitulation trade were going to see now is a lot larger than people think. Bonds, yields can fall a lot more before this is over with. Jim, where do you think the 10year is headed . Yeah. Whats the number, jim . Low 2s. Low 2s. Rick santelli, do you see low 2s on the 10year at some point . I think there is a 60 chance that we could see low 2s. I think there is a 340 chance e could see 1. 60. Ill tell you what, i like jim bianco a lot, i have him on all the time. But i think even though you can say everybodys offsides and it is Short Covering, why are they offsides . What made the positions what they are . That really is if you dont answer that you dont learn enough to trade beyond this, in my opinion. I think look no further than europe. Theyve managed to put rates for countries whose economies are still highly questionable well below levels of true value. That is coming back to i think draghis book about how i use my bazooka in one is about to have a new ep log written and it isnt going to be pretty. Greg ip talked about a bad day in europe. But it wasnt that. The european data, the german gdp was actually better than they were looking for. So why did bund yields really go down . For the same reason that our yields are going down. Relative value. We saw the southern european yields pop up 16, 18 basis points against a sixbasis point drop in bunds. That means those spreads widen close to 25 basis points. That is risk. Jims right. Its Short Covering but it is a risk trade. Rick, i got to jump in for a second. The bund yield is going down because german bond yields dont respond to german growth, they respond to European Growth and i completely understand but it is the relative value, the spread, that matters. Because now flip it over. We have 120 basis points higher than that 1. 30 yield in europe. What do you think thats going to do to us . Heres the Common Thread between what youre both saying which is, if generally speaking despite what happened in germany European Growth was a little bit weak and the ecb is more likely to and the, it is perhaps no surprise you are seeing some pressure on the i disagree. David, weigh in here as well. Where do you see rates headed next and why . David. I didnt catch that. We see rates going lower. I think to attribute the decline in rates as to wrong side of positioning completely understates what the market is telling us. The bond market is signaling that the economy is not as strong as wall street and economists told us it was going to be. It is not just whetheather rela. We look at a 10year yield under 2. 50 and if you ignore that i think you ignore that at your own peril. I think investors need to be positioned appropriately. We need to be balanced and think about what that means for risk assets. Why do you think the stock markets got it wrong and the bond market right . Why cant it be the other way around necessarily . Just playing devils advocate here. Historically the bond market is bigger, the bond market has a lot more capital there. And thats really generally speaking the smart money is in fixed income. Real finance and finance structures based on these rates. Theres a realness to these rates. You cant really apply to an equity index in the same fashion. Sharon, let me bring you in. You think that actually were going to see acceleration in the economy going forward. Dont you . I think we will see an acceleration in the economy just because businesses and consumers have cash to spend. Lets face it, if look at the individual in their household. If you have money in your savings account right now, its hardly earning anything and its hardly been earning anything for a long time. So consumers are going to start spending. Theyre going to start investing. I think businesses will as well. But with that said, bond market clearly is not paying attention to the fundamentals. I think the weakness in the stock market is driven a lot by selling by Pension Funds who have been overweight equities. Theyre not getting closer to being fully funded and theyre not going to make the same mistakes they did in 2008 by holding on. I think you take those gains and they move it into the bond market. I think thats really led to a lot of support to the long end. With all due respect there, weve been hearing that story sorry. Weve been hearing that story for years now that things are going to get better and consumers and businesses are going to spend but we havent been seeing it. This is the fifth year in a row that were going to check it off and say were not seeing it yet. John, what about you . Where do you stand here . Do you also see rates going lower . If so, why . Actually we do. Weve been looking for 2. 51 since the beginning of the year. We just hit 2. 51 today. But i think the bigger level to watch is down at 2. 40. Thats the low from october of 2011, or march 2011, the high from march 2012. There is a lot of activity around 2. 40. Thats where i think were probably going by the Third Quarter. Does that mean the Mortgage Rate will go sub4 again . I think it could. I can make a quick point . I think at 2. 40, thats a real big deal here. 2. 40 is a huge level. It is one of the most important levels on the chart. If we take out 2. 40, our next big level downstairs is around 2. 10 been 2. 05. Watch 2. 40 really closely. Rick santelli is watching lets keep in mind, thats not consistent with the path for Interest Rates that the fed has told us they expect to follow. If we continue with the bond rally that weve had somebodys going to be proven wrong, either the bond market is wrong and it is going to sell off when the fed moves to titan or the fed will be wrong about the economy. One way or another somethings going to get broken. To illustrate the extent to which perhaps everybody in a sense here can be right, look at whats happening in the Corporate Bond space. Corporate bond yields are falling. They are not rising especially for some of the riskiest borrowers in the whole universe out there. In other words, that doesnt happen when growth is deteriorating. It happens when people are reaching for yield or what have you but theres nothing in this market thats consistent with people jumping out of the riskiest parts of the market, guys. Theyre all piling back in and that tells you that for what have reason we have lower rates right now relative to the mack cofundamentals this credit boom is getting another leg and thats a fascinating thing to but kelly, if company xyz can borrow cleep, it is like the same people that say copper, i dont see a bad thing going on in the Global Economy because copper is up. Look what copper did before the credit crisis. Stocks started going down, copper kept going up. Company xyz can borrow cheap. It doesnt mean that any of their customers will interact with them in six months. Borrowing cheap and a clean Balance Sheet is not necessarily an indicator of trouble ahead. Rick, whats fascinating to connect those two episodes, we did have a commodity bubble and we are having a credit bubble for the same reason which is going back to the Pension Funds sharon was talking about to some extent because Everybody Needs Pension Funds, some of the entitlement funds out there, 7 , 8 . The more that creates a bubble now that does point badly down the road. Sharon, what are you buying here . It is hard to tell given whats happened recently. Id say fundamentally we do like the electronic sector. We like the real estate sector. Agriculture. My focus has been on fixed income and the Corporate Market is a concern. Rick makes a very good point that money is cheap to borrow right now but what do you do with it . What kind of return do you get for it . Im actually a bit worried about corporate spreads because they are widening and i think if this rally continues in treasuries, youll likely see them widen. Theres not a lot of liquidity out there right now. It is actually a little frightening. Liquidity issue, sharon, is one as well people have been warning us about time an again. As long as everyone is buying it is on the back burner. But when people go to sell, thats when it will come to the fore. It will be very interesting to see if there will be a liquid market when buyers go to sell just due to the regulation thats really caused dealers to shrink their Balance Sheets. Greg, quickly, is it possible what were experience is in the aggregate is more kind of the market getting adjusted to less and less fed intervention . Is this just the patient starting to come off the morphine right now . I think what weve seen in the last year is a complete volatility crash where quantitative easing crushed aniest for the market to move violent one one way or the other. Kelly talked about how the vix is so low. It is not a natural environment. It is too calm. Theres too little volatility. I thing that we need to be preparing the coming year for data to be a little bit more surprising, the fed perhaps to surprise us once or twice. If vol goes up, risk assets go down. We have to go. Thank you so much. This is such really appreciate that perspective. Such a fascinating time right now, dont you think . If you hand the scenario to the fed ultimately whats it mean . Suddenly instead of having slightly higher Interest Rates in this point in the expansion if we can call it that, all the points made about the great moderation and the phase we are in now and how big and badly this might end up . It is really fascinating. Really is. We have a good hour planned for you. Well see how we do. Markets already starting to come back a little bit. The dow was down 216 points at the low of the session. Down 167 right now. The nasdaqs down 27. The s p down 17. Straight ahead, more on todays selloff. Hedge fund titan Bruce Richards speaks with us exclusively next. Well get his rearction to todays red arrows. Also coming up, walmart. Their profits battered by the tough Winter Weather the First Quarter but are American Consumers still feeling iced out of the economic recovery . Does trouble at walmart spell trouble for the whole economy . Well look at that. Dont touch the remote. 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. 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Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about axiron. To prepare our kids to compete main todays economy . Way woman a wellrounded education that focuses on science, math, and Career Training for students who dont choose college. Man and thats exactly what superintendent of Public Education Tom Torlakson has been working on. Woman because every Student Needs the real world skills for the jobs of tomorrow. Man torlaksons Career Readiness initiative is helping schools expand job and Technical Training across the state because it makes a difference. Woman so tell Tom Torlakson to keep fighting for the career and Technical Training our students need. Another down day on wall street. Very, very interesting day. You try and get a sense of what the message from the market is. Is the economy slowing down. Is it picking up . I mean it is very difficult to tell these days what the market is trying to tell us. Right now the dow is down 170 points off the the lows of the session. Was down 216 points. Nasdaq, s p also down in this session. Russell 2000 had been the leader to the downside but it has come back, interestingly. Theyve had a bounce this afternoon that the blue chips havent seen the same magnitude of. The 10year yield we made much of seepingly sign ll ll lly see signalling a slowdown, still below 2. 5 today. Well keep europe close tomorrow morning and see what happens. Running a natural experiment that way. Some are calling todays selloff a teper takedown. Dominic chu checks out tepper as track roar. Why the fuss over David Teppers comments . He has the history of making some of these markmoving type calls. Rewind back to september of 2010. Tepper said the feds Stimulus Program is a signal to get aggressively long in the markets. Take a listen. The feds going to come in with qe. Then whats going to do well . Everything in the near term. Everything. What do i do . I got to buy. I cant take the chance of not being a little bit longer now. That doesnt mean im going [ bleep ] to the walls. I can say that . He is colorful and he knows how to coin a phrase. The market responded with the tepper rally. Then in may 2013 hes back talking about the fed winding down qe, that Stimulus Program, and the markets listening again very closely. There better be a true taper or else youre back into the last half i think you might be in the last half of 99. So like guys that are short, they better have a shovel to get themselves out of the grave. I can just tell you real quickly . Look at a chart at whats gone on this morning. The tepper rally is already beginning in the market hasnt even opened. Theres twice. Two other times in the the history now. Last night at salt in Las Vegas Tepper told investors dont be too frickin long the market right now. Tepper is a guy who makes very bold calls and he can either reap the benefits or reap the whirlwind way for his mistakes and he is the first one to admit it. Im the animal at the head of the pack. Okay . I generally am. Like i said, i either get eaten or i get the good grasp. He either gets eaten or gets the good grasp. Well see where he lands himself after these latest comments. When tepper speaks, people listen. Thanks. For more reaction on this selloff and to david detepper comments, Bruce Richards, cofounder of mayor shon asset management, the firm has approximately 11 billion in capital under management. Bruce, welcome. Great to see you. Hi, bill. Hi, kelly. What is your take generally speaking here . How worried, concerned are you about the landscape for Financial Assets . I think Financial Assets are fine for now. Equities wont make 28 s p like they did last year. You have to heed to some of his advice and some of his comments. I think you can probably pencil out a 6 , 7 return over the next 12, 24 months. Thats probably what the opportunity for equities. Is there a little money coming off the table to properly assess that there wont and big bull market for equities, will be more traditional up and down markets. Youll have a little more volatility. In terms of the credit markets thats a slightly different story. What youre seeing in the credit markets is rather remarkable because the fed will be any quantitative easing come october, november, will be completely finished but their interim you have a he very interesting dynamic. The fed is buying 45 billion a month, half a trillion a year. Our deficit is no longer two trillion, it is only half a trillion. Basically the fed is buying all available supply of treasuries. Thats one big reason in addition to european sovereigns trading at lower yields because the ecb will be on hold for longer than what people maybe originally expected given the economic malaise that you see there and given how bunds are working. Technically people are on the wrong side of wrongfooted so treasuries are around for now but this treasury rally is a shortterm temporary thing and will start to resume slightly higher rates from here when you look forward. I wouldnt look too much into one day. If you do youre going to be selling at times you shouldnt be selling an buying when you shouldnt be buying. I get what youre saying on treasuries but plenty of people felt that as the fed did the tapering and took 10 billion off the table each month, they were not buying in treasuries, that long yields should be rising. But you seem to suggest that it is because they are the only ones in town buying right now. But do you plenty of people feel like theyre sending a signal about the economy right now. You dont think so . I dont think it is an economic signal. The First Quarter, 0. 1 . You can say there is a signal there. Inflation, came out yesterday slightly higher, 2 . The Unemployment Rate has dropped to 6. 3 . I wouldnt look too much into that. It is one quarter. Weather indecember deuced. I look forward for the rest of the year probably projecting 2. 5 growth rate. I dont think it is slowing. I think it is very much in track and moving accordingly. I think whats driving this is the following. Peel are short too many treasuries and were forced to buy on upticks. The simple fact is the fed is still easing, still quantitative easing. They are still buying at todays pace a half a trillion a year. Budget deficit is now a half a trillion. Theyre buying all available supply. It comes at a time when treasury yields in europe are coming down, too. Have you guys been short rates this year . Were not short rates outright. We use Interest Rates as a way of hedging any duration exposure we have. Not an outright short. When it comes to credit, are you putting money to work even with highyield junk Corporate Bond yields near alltime record lows in other words, are you seeing yields drop across almost every asset class and still being forced to put money to work in this space . I wouldnt phrase it that way, forced, because no one is forcing us to do anything. How id phrase it is the following. We live thanks to finance repression and the fed having fed funds at zero, we live in this very lowrate environment. Can you get a core or coreplus fixed Income Portfolio yielding 3. 5 and high yield is low yield. Average high yield bond has a 6. 5 coupon priced at 1. 05 price for a 5. 25 yield. That means what are you going to do in this lowrate environment . We are finding very good opportunities but it is opportunistic, dispressed, special situation investing and we are doing this globally. Were able to put together a portfolio. Were not forced to invest. We elect to invest in some very opportunistic situations and generate some pretty attractive returns as a result. You looking at xhot tcommodit all . The drought, whatever conditions exist pushing commodities higher. If you dont see home runs in equities for a while, do you see them maybe . Tangible assets . Were not bullish commodities at all. Not in the slightest. We think there is a negative cycle for commodities over the next several years. One sector weve become more active in is the energy sector. The biggest bankruptcy in the history of the lbl market just happened a couple weeks ago. Tx shield. Theres a coal company weve been short bond and we just recently went long in bond. Theres opportunities throughout the complex in commodity related companies but generally speaking, am i bullish commodities or bearish commodities . Id say im neutral to slightly bearish based upon where we are in the cycle today. Bruce, thank you. Pleasure. Bruce richards of marathon. Down 188 on the Dow Jones Industrial average just off the lows of the session here. The s p and nasdaq also rather sharply lower as we head toward the close. We got about 35 minutes left in the trading session here. Well continue our special coverage of these developments an whats happening in markets. We are also talking about how much walmart might be playing into it. Another less than stellar quarter for the giant retailer. What does that say about the consumer around the economy and should investors be reacting to it like this. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. 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Maybe testing it bouncing back but we did briefly enter correction territory. Traders walked before, theyll quote me, the russell, thats what theyre watching right now. Traders are watching russell, were watching russell. Right now it is off its lows. Dow down 184 right now. Were also watching wall street, a major drag on the dow today after reporting those disappointing earnings. Courtney reagan, where did walmart go wrong . Its the Worlds Largest retailer. Sheer size can complicate diagnosing problems. Walmart did blame weather for disappointing sales, traffic an higher expenses. Quantifying it as a 3 cent negative impact on bottom line for the quarter. The retailer also said its expenses were higher but they posted its fifth straight quarter of flat for negative samestore sales in the u. S. Look at walmarts u. S. Samestore sales in the First Quarter relatively flat with a 50 basis headwind more than double the headwind from weather. Many believe as long as the lower income consumer continues to deal with stagnant wages and a pressured labor market walmart will continue to tune in lackluster results. Many of those problems seem to be outside walmart itself. Lets bring in Burt Flickenger from strategic resos inside group. There was a saying in the 60s and 70s goes, as General Motors go, so goes the economy. Does that hold for walmart now . Are they a proxy for this economy in their view . It did hold true in the 20th century but hasnt held true in the last few years. Wall matters leadership is sabotaging itself, cutting staff in the stores, not stocking shelves before big storms. The worst of weather it should be better for walmart. Kroger wins. Costco wins. Walmart loses. It is all leadership. I love this point. What do you think it is youre citing walmart specifically. Courtney said a lot of the Investment Community thinks these are factors outside the investors control. Theys certainly slowing in the economy. As you look at higher utilities, higher fuel prices, fuel higher payroll taxes. Everything, bill. But all the other wellrun retailers are managing their way through it and putting you positive samestore sales. Walmart used to outwork everybody when sam walton was alive and with his handpicked people for the next ten years through 2002. Now everyone outworks walmart and wall market lacks the initiative. They get stores on weekend. Thats when sales fall apart and no one is watching the business. There is a sheen thats come off of walmart with union organized groups going after them for wages they pay their employees. It puts them in a bad light. Some say that they havent really answered that one that effectively. Thats an interesting one. Every time you ask walmart about it, they he will tell that you a very, very tiny percentage of their workers actually pay minimum wage. They say we arent a minimum wage payer. Only when they are in the onboarding process. They say the vast majority of their workers make much more than that so it becomes a he said she said where the family says i cant make enough to support my family and walmart says these are the numbers we are paying them. It is a sticky one and one that folks havent seen to come to grips with on either side. If we want to go back to bills original question, as goes, blank, so goes the economy, who would that be today, do you think . The ones we really have to watch are kroger, costco, cvs. Those are the real bellwethers of the economy. Shoppers still spending. Macys is key. Tjx is key. In luxury, nordstroms is key. If those go off the retail rails, then we have something to worry about. Retail is fine with the right price, the right product and thats not the case where walmart is today. Though to burts point, macys just reported yesterday and those earnings certainly werent anything to write home about. They blamed weather. The market seemed to give them a pass. Now were saying walmart cant blame it on weather. We have to pick, was it weather or was it not . Who gets a pass ond who doesnt . In the case of macys, they were coming up against a very tough samestore comparison sales and macys has the gift that keeps giving which is jcpenney. So macys and dillards not for their margins. Would you want to be in that business as jcpenney gets more competitive . Jcpenney is going up against the easiest comps in the last ten years. Jcpenneys anniversary home in the Third Quarter and does it have enough money. Penney wont be able to compete versus macys in marketing and merchandise is and penneys cant win primarily on private label promotions. Thats a lose her long term. Burt, thank you. Courtney, thanks. See you later. Well find out more about jcpenney. Heading toward the close, 25 minutes left in the trading session. Dow down 174 points with the nasdaq down 29. Well check in with our market pros here at the nyse and nasdaq and the chicago mershauc next. Jcpenney out with numbers. Stay tuned. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase like 60,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards even cash back. And my rewards points wont expire. So you can make owning business even more rewarding. Ink from chase. So you can. Predibut, manufacturings a prettin the United States do. Means advanced technology. We learned that Technology Allows us to be craft oriented. No ones losing their job. Theres no beer robot that has suddenly chased them out. The technology is actually creating new jobs. Siemens designed and built the right tools and resources to get the job done. Saw a lot of selling on open this morning. At one time the dow was down 216 points. Its come off the low, as have all of the major averages here. Weve included the russell 2000 on this board. It was down 1. 5 at one time today. Its come well off its low of the day as we head toward the close about 20 minutes left. For more on todays selloff, weve joined by bob pisani here at the new york stock exchange. Sheila at the nasdaq. Jack at the chicago mechshauchi and more guys are talking about how this is forcing them to go bearish. A lot of this is what ive been talking with Rick Santelli over the past couple months. Bond market sending signals to the stock market. The question is whether theyre true or false signals. Regardless at why bond are at 2. 5 , bottom line is when we look at the market we have to understand that valuations are still intact. Leon hooperman said it best when we look at a multiple of 16 on the s p 500, this is not that market thats overbought. I look at three days of disappointing Economic Data. Put the bond market aside, disappointing retail sales, disappointing industrial production, disappointing nehb numbers tomorrow. If we get notably disappointing housing numbers tomorrow, dont you think thats a serious sign forget what the bond market is saying. Were supposed to see accelerating growth. So far its barely even modest at this point. I agree with that. I would say if we continue to see a couple of months of data that comes out, yes, youll get even the strongest bulls like myself getting a a little cautious going forward. But remember it is going to take a few months of data to really catch up. I agree with you, if we start to worry about say one number or one or two numbers, then it is going to lose perspective of the entire market as a whole. You have to take that step back and understand were only a couple of Percentage Points off of a high. Its hard to keep that into perspective at times. Sheila, the nasdaq and russell come back. Theyre sort of leading this comeback today. What trends are you seeing over there at the nasdaq . Its interesting. Everyone who i have talked to about the nasdaq and the dropoff today really point to the russell 2000. They are taking their cues from what the russell is doing and the treasuries as well. The nadz and russell have been in a steady downtrend over the past year. The fact there is a bigger pullback today hasnt surprised traders. The fact the russell is bouncing back, perhaps we got a bit oversold. People arent surprised. They say theyve been in the down trend all year, add whats happening in the treasury market, the russell 2000, what tepper was expressing, hes extressing whats already out there. Would you cite tepper as being the reason or is his timing no. Tepper reflects the opinions of a lot of people out there. If you boil it down, it says im fairly uncertain about what the heck is going on right here and im sort of pulling back. Call some guys who are active traders. Theyll all say that choppy market, very difficult to make money. It is a common refrain. It is difficult and confusing to figure out. If this continues with this, frankly crummy Economic Data that were getting, youre going to see dont know about the stock market moving down big time but dividend paying stocks will come back in a really noticeable way. Im glad you mention the crummy Economic Data. Isnt it ironic, there was a time when our headline would have been the jobless claims number like we got today. Thank you. Nobody talks about jobless claims. It was the lowest jobless claims number since march of 2007, going back seven years before the financial debacle began. Clearly that signal better numbers for the jobs market which we are told is what the fed has been all about as far as thats the data its lost in the sauce today. Thats when this goes back to the argument weve had the last couple days, is there really a slowdown or not. I continue to argue, bob, including if you point to jobless claims, you could make the case for the economy being okay, gathering some momentum if you want to, just as much as you can make the case for weakness in parts. Thats why it is very important to keep all this in perspective and make sure that you look at numbers as a set. Usually Portfolio Managers will look at three months of data before they actually make any kind of an opinion on whether there is a slowdown or some kind of an acceleration. We need do to do that also as students and observers of the market. The last time we saw the 10year get down to a 2. 5 yield it was last october. That was followed by a rally of roughly 100 points in the s ps whether we saw 2. 5 go up to 3 . Thats one thing to keep in mind. Once we see this unwind it could be a real move into equities and the velocity of that move can surprise a lot of people. Doesnt forget a lot of the good news about the jobless claims already priced in. Thats true, absolutely the case. Thanks, guys. 15 minutes to go into the close here. Dow up 166. The nasdaq is off 28. S p is off 17. Russell is trailing as well. Im taking travis mcgee novels to the desert island. Shes taking jobless claims numbers. I love that. Well get you up to speed on whats moving in todays selloff. Some of them may surprise you. Dont touch that clicker. We know were not the center of your life, but well do our best to help you connect to what is. Those little Cialis Tadalafil for daily use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Where are some of the hardest hit . Retailers. A huge focus on earnings season. Walmart posted weaker than expected First Quarter results blaming bad weather for the smallest Quarterly Sales growth in five years. They warned Second Quarter sales would come in shy of wall street forecasts. Kohls reported 2 cents weaker than forecast. Samestore sales fell 3. 4 . Kohls trading down 3. 25 . Astrazeneca moving higher on its experimental lung cancer drug. You can see shares up 2 there. General motors recalling 3 million cars and trucks worldwide to fix five different safety problems. Most of the vehicles 2. 7 million of them are in the u. S. Gm down 1. 5 . Tune in this sunday at 10 00 p. M. Eastern time for cnbcs special report with phil lebeau, failure to recall investigating gm. Back over to you guys. 12 minutes left. Heading to the close, down 162 points on the dow right now. Bonds have been strong. The yield on that has been hovering around 2. 5 today. On the 10year. Well be right back. 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Market stabilizing here, down 177 on the dow with the nasdaq down 31. S p down 18 with about eight minutes left in the trading session. Joining us to talk about the market, tim leech from u. S. Bank, peter king, whats going on here . I think the market can be run by two different things. Driven by two different things. Emotion and intellect. Right now, sad to say, think it is all emotion especially in the treasury market. Youve got such low Interest Rates. It doesnt make much sense to me right now especially with the fed taking all this aggressive action with the tapering. The last time we saw Something Like this in my opinion was when the treasury was downgraded. Do you remember that . Two years ago everybody thought the treasury would sell off. What happens what happened . The treasury rallied. Another kind offish irrational move. I think thats whats happening right now. People have been joking if you look at the price action on the 10year, thats the new momo play. To an extent. One thing thats been interesting to watch with the european action where Mario Draghis been calling for stronger action for a long time. But never been able to do it. Now the germans have come through. They havent written a check yet but theyre saying we actually support you, mario, to go forward. With the promise of new capital flooding into the market has taken the whole tide down globally. How much further down the 10year go . This is an artificial move in our view. Right . The move from here should kind of find itself an then start rash chetting back up again gradually toward the end of the year. Larry kudlow said yesterday, the Federal Reserve will not raise Interest Rates in his lifetime. Hes had healthy as far as i know. Thats what i thought, too. I dont know if i would go so far like that. The treasury is supposed to reflect inflation, plus growth. I dont think that that sums up to 2. 5 right now. I would say easily it should be 3 , 3. 5 . Theres nothing the fed can do about where the 10year is trading. But i think it is up to us to get a little more rational and say things are not as bad as they seem to be. Well take a break. Gentlemen, come back. After the closing bell, portfolio protection strategies from wall street, top money pros. Dont miss these. Stay with us. See how this volatile trading day will end. We get earnings from jcpenney. See you after this. Without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. I got lots of advice, but i needed information i could trust. Unitedhealthcares innovative, Simple Program helps moms stay on track with their doctors to get the right care and guidance. anncr vo thats health in numbers. Unitedhealthcare. 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We are finishing down. 66 at 1,096. The 10year yield which fell to 2. 47 at its low, thats the lowest since last october, i think it was. Thats a sixmonth benchmark. Now back to 2. 5 right now. What are you going to buy here, Peter Anderson . Siometimes it is good to tak a little pause. I think in a market like had this, stay pat. Do not buy, do not sell. Just try to figure all this stuff out, bill. Whats happening right now, hedge funds are talking a lot all of a sudden. Thats kind of put the market on its side. We dont know exactly what those managers are thinking. They are trying to explain it to us. Got to give it a couple of days before it all ferrets out. It is a very confusing market. It is. Were still relatively optimistic about stocks, bill. We see this as probably a time to do a little infill. Primarily with the thesis that the u. S. Economy is on pretty decent fighting, First Quarter aside. There will be a decent amount of earnings growing over this year. Cyclicals are likely the better place, that would be industrials, technology, financed to a certain extent. Youre in the camp that says this economy is still growing, it is going to beingaccelerate the yield on the 10year is not forecasting the economy. Thats our position now. That said we arent going to see some wild breakaway on the economy. Therefore, the yield on the 10year wont go through the roof on some surprise upshift. There will be an incremental move of Interest Rates. From thanks for joining us today. Going out with declines here. Was worse earlier if youre bullish this mark. Dow down 172 points as we shake things out this thursday. Stand by, earnings from jcpenney. Will they tell us a better story than walmart did last night. Stick around, find out on the second hour of the closing bell with kelly evans. Welcome to the closing bell, everybody. Well try to glean some market signals. Yes, that is a lemur. The nasdaq off 30 at close. The s p 500 off 17 points. Thats almost 1 for that broad market index. Even broader the russell 2000 unsignificant pressure today as well. We saw a comeback towards the end of the social. For more on whats happening today especially in the bond market, todays panel. Carol roth, david darst, jon fortt and kayla tausche. Guy wu guy, you guys are having an impact on markets in vegas. You think this has to do with david tepper being a little nervous . It definitely had hadding to to do with the comments david tepper made, no question. But the things that are happening now have been in place for some time. Carol pointed out in january the russell was probably overextended. She was right and her timing was spoton. Ive been telling you for months and months that interesting rates are going lower. Deflation is the enemy that the feds been fighting all along and that rates will continue to go down. Rates are trying to tell you something. David darst probably has a much different perspective. Thats what makes markets but im convinced rates are trying to tell you the economy is not nearly as strong as the s p wants to indicate that it is. I want people to know well have full report on jcpenneys earnings. Shares look like they are moving. David, respond what you heard from guy. Carol and guy, weve been saying and kelly, weve been saying that when the 30year bond gets below 3. 50 , it is a dangerous sign. You have to listen. You cannot get dogmatic. Weve said 2 of the 3 body guards of the market have been taking bullets. Theyve been underperforming. The banks, the russell 2000, the only 1 of the 3 thats doing well is the dow transportation stocks. Theyve had a great month. We also note that Energy Stocks have had had a phenomenal six weeks. Theyre up about 6 . Now the materials are coming alive. Cop hers up 4 for the month. Theres cross currents going on here. So this is interesting. We have to talk about what market leadership is telling us here. He makes the point, carol, when you see rates go the way they are going today, it is not good news for the banks. Theyre taking it on the chin but other parts of the market maybe materials, maybe industrials looking a little bit better. What do you in the russell 2000 crystal ball, what do you see now . I think that as guy alluded to ill give props right back to guy because hes been pounding the table on this as well. You are hearing it from tepper, you are seeing the nervousness in the treasury market. This is breeding on everybodys fear about growth, not just here in the United States but from a Global Economic perspective. I think theres worries here. We thought we were going to get 4 growth this year. I think right now nobody thinks that thats going to happen. Worries in europe, worries in asia. To me this is a story about not as much growth as everybody thought to begin with. I want to jump in here. I know well touch on jcpenney which seems to have reported samestore sales higher than expected up 6 . But north america, wow. The growth really seems to be in developed markets here in this market. When i look at tech and how it is doing, it looks down right healthy. You see microsoft holding, not going crazy with the new ceo stuff. Ibm flat for the year. Oracle up 10 . Some of those momentum names, google down 5 . Amazon down 25 . Thats kind of what youd expect if you were looking at something reasonable. Off of ciscos surprisingly good earnings yesterday were also seeing some nice comebacks for enterprise games that have Growth Prospects in domestic markets. Courtney ray gans joins eagah jcpenneys results. Beating expectations on both the top and bottom line. Numbers are as follows. A loss of 1. 16 per share for the First Quarter but thats better than what the street expected of a loss of 1. 25. Revenues 2. 8 billion. The street expected something above 2. 7 billion. Also an improvement in gross margin. Remember were watching that very closely. A hair below what wall street had expected for gross margin but improvement from the prior quarter. Those samestory sales numbers, Second Quarter in a roef positive samestore sales of 7. 4 , much better than 3. 8 wall street had been expecting. They are saying they expect samestore sales to be in the mid Single Digits for next quarter and the full year. Jcpenney is getting a bigger Credit Facility as well. We are just getting this information in. Hopefully well hear more on the call about this. But right now everything looks pretty good. I want to dig through the numbers a little bit more an come back to you. Thank you. Shares are moving up to the range of 11 after hours. Lets bring in rick snyder from maxim group. Your response to these numbers, rick, is this better enough for you . Its just barely better. It is not quite better enough. It is a little bit better than i expected. The line i am looking at is gross profit dollars. Sales were better, gross margin was less. They beat my estimate by about 12 million. The reason that line is important is because thats the dollar amount that allows them to leverage their fixed costs which are still too high. Thats whats going to fall to the bottom line. It was a little bit better but not better enough. Burt, whats your take . After jcpenney lost 40 of its sales and about 80 of its stock price in the last nine quarters, and about 900 gross margin points, sales are still too low. Costs are still too high. Profits are still too low. Pennys got homecoming in so its got the easiest samestore comparison sales anywhere in america this quarter, next quarter. The Fourth Quarter is whats going to tell the tale. I think that its nice that jcpenney is doing better than the really bad numbers they were doing before. Theyre only kind of really bad. I think if you look at the brand from a longterm perspective, from my perspective this is not a brand that will be around long term. You have the middle market malls of this country closing. There is a bifurcation from the Outlet Stores are doing well. Premium stores are doing well. I dont think jcpenney is a brand that has legs long term. If im a longterm investor, this doesnt seem like a name id hold. A year ago target looks bulletproof. Yet jcpenney is managing to surprise a little bit to the upside. The Silver Lining at jcpenney is this Credit Facility, 2. 4 billion. A year ago youd never think a retailer that was burning through as much cash as jcpenney would be able to secure a line of credit like that. The fact that its bankers have confidence in that company to lend to it at that amount i think that thats a short kweez what were looking at because people expected guidance to be bad. Theres no big season coming up. Back to school could still be weak but the fact that they have more money in hand and they have better guidance than the street was expecting thats a big short cover in my opinion. Rick, do you agree . I would agree. I think the Credit Facility is sort of it is a good thing but i dont think thats the real problem. The real problem is they dont have enough gross profit dollars to leverage their expenses and return this company to profitability. I could look out with mid singledigit comps and big improvement in gross margin and i still cant get to any reasonable type of valuation at current prices until 2019. They need a hockey stick acceleration at good Gross Margins and i dont think this is it. Burt, do you want to respond to that . What about carols point that she thinks this brand is going away . Carol and rick are completely correct. Penneys still unplanned on less sense and the bond market is still telling us with the bond trading way below par is penneys is not out of the woods. We wish them the best but still fearing the worst. You want the last word, rick . Thank you very much. Many of these stocks are going to be driven by employment. Jobs numbers. Unemployment numbers and average wage growth. The folks who shop in this level basically this is another play on the Unemployment Rate and the average hourly earnings. Thats whats going to drive the companies that are in this niche in the retail marketplace. Guy, whats your take on all this . Its darwinism at its peak. Kayla nailed it in terms of the Credit Facility. They got a lifeline. It will keep them around for how many months. Six months to a year . I think if you are an investor in the stock, which im hardpressed to believe there are a lot of folks out there, you take advantage of this. It is a 30 Short Interest and all getting squeezed. I think this goes by the way of the dodo bird at some point and i think you roo the day you bought on this bounce. Anything grab your attention . The tepper comments got everybody on edge. Hes saying again, clearly he doesnt listen to me but hes echoing a lot of the same things ive been saying for a while. I dont think the economy is nearly as strong as the market is sort of indicated that it is. This chasm between the s p and the real economy is as wide as its potentially are ever been. Nothings been solved. Just moved one problem from the left pocket to the right. We talk about it all the time. I cant sell on a down day like today. Why not . Sometimes theres nothing wrong with taking a powder, taking a fresh look at things and seeing where things are a couple weeks if not a month from now. We did see a perkup in volume. Guy, good to see you. Dont have too much fun out there. Coming up with the rest of the fast money team at 5 00 p. M. Live from the salt conference in vegas. Dont miss a moment of that. Well send you over to seema mody for a quick market flash. Check out rackspace. The stock currently trading higher in afterhours trade by 7 . Stocks generally selling off again. Investors are piling in to bonds here. Up next, find out if this pullback is a buying opportunity or the start of something worst for equities. Bitcoin prices have been blasted. But well hear from somebody whos found a way to make b Bitcoin Trading secure. The maker of flappy bird announcing his plan to bring back the game which he took off the market in february but he may be legally forced to change its name. Stick around to hear this unbelievable story later on the closing bell. Youre watching cnbc, first in business worldwide. Re relax into childs pose. Nd sfx bing. Whos got two hooves and just got a claim status update from geico . This guy, thats who. Sfx bing. And i just got a. Oh no, thats mom. Sorry. Claim status updates. Just a tap away on the geico app. Market taking a dive today. For more on what may be behind the movement, lets bring in the chief Market Strategist at banion partners. Robert, you have a note saying spring and summer will be rough for the smasht. Sounds like thats starting to come true. How rough . Today we closed right at our 50day moving average. I think it is going to be dependent upon the yields in the treasury market. If you look at the past six month trend weve hovered around 2. 60 level. It broke the 2. 58 level. You can point the european concern or the comments out of tepper. But i think it is a concern about growth going forward. Is there going to be enough growth to sustain this market at these levels or do we go back to levels like the 100day or 200day moving average. I think there is going to be that worry going on throughout the rest of this summer. At the same time, i think liam cooperman was out there saying his price target for the s p is 2000 at year end. Leons one of the more optimistic guys out here. One of the interesting speakers that i heard this morning was michael novagratz. He brought in this concept of secular stag natination. Talks about an economy thats slow growth with low inflation. He used the word capitulation that investors basically just use to this environment and they are dealing with it. Now the other part though of this equation has been that theyve had a partner to help them along which has been the fed. With the fed pulling back, if you just did an overlay between qe and the s p 500, theyre moving almost in lockstep. When the fed pulls away, whats to the market . A guy like david tepper says im a little nervous, time to maybe pull back. Thats the general mood here. Nobodys super bearish but i think there is just some concern and people just want to take a step back for a minute. From a technical standpoint, where do you think we need to be looking for the bottom in terms of levels to see whether this bounces back, creates buying opportunity or if were going to have a true pullback . I think the 10year treasury does have the potential to trade down to about 2. 25 . If that happens we are talking about 1,625 on the s p 500. I dont think it necessarily happens right away. The market trades up before it trades lower but it is going to be dependent upon a lot of things. Will we see this m an a activity weve seen a good portion of the year . That happens investors will eventually realize m and a activity means good things. Companies wont buy another firm if they think the outlook is poor. Eventually m and a activity should lead to cap x spending meaning companies spend more on plant chicks, hiring and training of workers. If that happens that means even Better Things for the market. Between now and that point you will see that increased volatility, this continued rotation. Everybody said it is a rotation into value. It is not necessarily the case. It is a rotation into safety. Large cap mega names. Everybody claiming all this value rotation is a little bit off. The market has been up 50 david . Were predicating things on assumptions that i dont really believe are that valid at this point. I think there is a real scare as far as growth. Maybe not recessant but just an idea that 3 , 4 Economic Growth is here. It is hard to imagine where thats going to come from. Were going to get 4 in this coming quarter, close to 4 . Youre going to have a snapback. The new jobless claims dropped to a multiyear low. Consumer confidence. Strong retail sales. Yes, most recent print was lower but theyve been trending upward. Youve got the ism manufacturing, ism services, philly fed, empire state, chicago pmi, lead economic indicators. Thing is growing like a redwood tree and everybody is crazy that wants it to be growing like a ficas tree. Would you say lower bond yields are fuel for the fire . Ride the tiger and dont let the tiger ride you. Buy Master Limited partner ships. They are yield plays. They yield 6 . Energy infrastructure. They lag behind the Real Estate Investment trusts. Got to leave it there. Seema mody has a quick earnings alert for us. Nordstrom higher in afterhours trade after posting better than expected firstquarter earnings. Revenues in line with expectations. Comp sales increases 3. 3 . Nordstrom trading sharply higher in afterhours trade better than. 9 . Thats a big move. Thank you. News on verizon. So verizon shares were flat. Well call it flat in the regular session but they are now up almost 1 in the afterhours trade this as we do some whale watching. All large Money Managers in the u. S. Have to file their holdings every quarter. This time around verizons the focus for investors. In disclosures and Regulatory Filings Berkshire Hathaway, Warren Buffetts firm, has disclosed an 11 millionshare stake in verizon. That value is at stake at about 528 million at current market prices. Remember, Warren Buffett at least has been splitting some of the stock picking duties with his top stock picking lieutenants. So again, interesting move here. A half billion dollar stake in verizon. Also dan lobe over at third point, llc, has taken a 3. 5 million share stake in verizon as of the end of last quarter. Thats a stake at current market worth 170 million. Berkshire hathaway and third point both making large points on verizon as a particular stock. Those shares up 1. 5 in aftermarket trade. More details on all these as they become available to us. For now, vz the one to watch in afterhours. Stocks sinking from a double whammy today of weak earnings and mixed Economic Data. Wall street doesnt seem to be too optimistic right now so why is optimistic on main street at a poster session high. The head of the Small Business administration joins us next. The government proposes new rules allowing internet providers to charge Companies Like netflix more money for faster, more reliable service. Coming up well hear from somebody who says these rules will be a disaster for lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Thats keeping you from the healthcare you deserve. At humana, we believe if healthcare changes, if it becomes simpler. If frustration and paperwork decrease. If grandparents get to live at home instead of in a home. The gap begins to close. So lets simplify things. Lets close the gap between people and care. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Welcome back. Optimism on wall street again taking a hit today in the wake of the market selloff but optimism on main street, were talking about some of the highest levels since before the financial crisis according to one report released this week on Small Businesses. Why has sentiment changed . In her first interviews since becoming head of the Small Business administration, joined by maria contreras. Maybe Small Business across america like that youre the new head whats driving this increase in sentiment lately . Well, what im so excited about is this is national Small Business week and ive been able to travel from San Francisco to kansas to boston and today in washington to celebrate the successes of these pioneers of these innovators, these risk takers that are now creating 2 out of every 3 new jobs. What theyre telling me is that theyre bullish on the economy. Theyre excited about whats taking place for them. Theyre excite that theyre partnering with sba in ways theyve never splated. Ima he. One of the most important things that the sba does is simply provide loans to a lot of these businesses. What can you tell us about Lending Conditions in the partners you are working with . I think thats right. Access to capital is key. It is fundamental. We have to be circumspect before we deploy that capital, sba wants to make sure theyve been counseled, theyre ready for that loan and we want to deploy our many partners, whether our seasons executives that are providing services to the Women Business centers or our Veterans Business Opportunity Centers and the 68 field offices we have throughout sba network. All of them want to come together to make sure we get the Council First and the capital we need and a that we make our introductions through the contracting programs through the private sector and the government to make sure that Small Businesses are getting their fair share of the largest buyer in the world, the u. S. Federal government. So thats why that loan is important but we want to make sure it is the right kind of loan, whether it is our Core Products like 7a or the 504. Its carol roth. Im so excited because i am a huge advocate of Small Business and i believe that they are the backbone of the economy. As i travel around the country and i talk to Small Business owners and entrepreneurs, one of the big issues is that they are not aware of all the wonderful resources that are out there, whether it be the sba, whether it be score, whether local chambers of commerce. There seems to be a disconnect within the Small Business community with people working in Different Directions and sometimes a Small Business owner doesnt even realize all of the resources. Can you talk a little bit more about what the sba is doing to help create more awareness for Small Business owners . One of the things is these celebrations were having akrcrs the country. We have to think about how we use social media. We kicked off in San Francisco with twitter and in boston we were there with microsoft. Sba has got to be as nimble and responsive as the Small Businesses that we serve so we have to be circumspect and think about all the programs that we can push through through the different media meaning social media. I just started my twitter account on monday i had a feeling social media was going to play into this. It is cheap, easy, it is effective. Maria, what are a couple of the areas industriwise and also geographically that you see as being best practices or hotbeds of activities that you wish other areas were emulating . Well, fortunately what were seeing is innovation is taking place in places never expected. I saw innovation in San Francisco, of course the bay area is very effective at doing that. I saw it in boston. In boston we are had hitting some of the its number one, as a matter of fact, in loans under 50,000 and in loans under 150,000 because those are new entrepreneurs entering the roles of employers. We also saw that taking place in kansas city. In kansas city i saw families there creating new jobs and new ideas. Actually the exciting thing is that innovation is happening in all corners of our country. Not just silicon valley. Maria, thank you so much for being here. Perhaps for raising awareness to carols point about just what resources are available for startups across the country. Appreciate it and good luck. The red hot market that just set record highs two days ago has cooled considerably today and yesterday and the selloff is burning at the hot list. Still to come if you think bitcoin has gone the way of pet rocks and hula hoops . Guess again. A digital pioneer joins us with his plan to revitalize the virtual currency. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase like 60,000 bonus points when i spent 5,000 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards even cash back. And my rewards points wont expire. So you can make owning business even more rewarding. Ink from chase. So you can. Who would have thought masterthree cheese lasagna would go with chocolate cake and ceviche . The same guy who thought that small caps and bond funds would go with a merging markets. Its a masterpiece. Thanks. Clearly you are type e. You made it phil. Welcome home. Now whats our strategy with the fondue . Diversifying your portfolio . E trade gives you the tools and resources to get it right. Are you type e . Female narrator the mattress price wars are on the mattress price wars are on at sleep train. We challenged the manufacturers to offer even lower prices. Now its posturepedic versus beautyrest with big savings of up to 400 off. Serta icomfort and tempurpedic go headtohead with three years interestfree financing. Plus, free sameday delivery, setup, and removal of your old set. When brands compete, you save. Mattress price wars are on now at sleep train. Your ticket to a better nights sleep welcome back. Rets start with a quick market flash. What weve got here on our whale watching, we continue to watch the big guys and what theyre doing with our portfolios. This time dan lobe, his firm, we can show you right now through Regulatory Filings hes taken new stakes in a variety of different companies. About 20plus new positions. Thats something that you dont often see every day with funds like third point. New positions in american airlines. They added 2. 7 million shares of american airlines. We already told you about the 3. 5 million shares worth of verizon. Also a new 1. 3 million share stake in Anheiser Busch in bud. Then 2 million shares of citigroup as well. Interestingly enough here he sold completely out of his apple stake, about 100,000 shares. Also no longer a shareholder in yahoo . Thats no surprise. Hes been whittling down that stake for quite some time. Again no yahoo shares. Also a complete liquidation of activision. Third point making a lot of new moves, new positions initiated. 20plus. New additions in american airlines, verizon, anaheimer bush. One hot story had a known investor predicting 25 market crashes ahead. Its on the hot list. Allen wastler. It seems like the godfather of Technical Analysis did an interview with our web broadcast, future now. He thinks there is 25 crash ahead. He talked about a lot of overextension in the market. I know you are calling had him to try to get him on the show today to flesh this out a little bit. Readers are all over this prediction. This thing hasnt done less than 100 readers a minute. Isnt it still the case, ralph is just the latest in a string of stories. Every time people predict a market crash, these stories light up the charts. When is the last time you had someone who was super bullish at the cop of the list . Au contraire,op of the list . Au contraire, kelltop of the . Au contraire, kelly. When we put in a positive bull call, that gets just as much attention. But in the past two, three months my number two. If you do think all these bears are correct why we just happen to have a strong number two, jim chenos talked to our crew at the salt conference. Weve laid out some of his shorts for you there, too. Our final one, gas prices. That just as much as stock prices always affect people, gas prices. Thats what our readers love to read about. Theyre stubbornly up near 4 a gallon. Everyone was saying this year they should be going down. That probably has a lot to do with the pressure that you see on walmart, too. Peep dont realize it. Just being at that high level still is a drain on wallets. Dischristi death of the Free Internet is the result of the fccs new proposed rules allowing Internet Companies to charge content providers for better service. Our next guest says this is devastating news to Companies Like netflix and google as well as u. S. Consumers. And it was deleted from app stores by its creator because it was too addicting but the flappy birds creator just told me he wants to bring the game back. Theres just one problem. He may not own the flappy bird name anymore. Well be right back. 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 scottrade proud to be ranked best overall client experience. Cozy or cool . Meow or woof . Exactly the way you want it. Until boom, its bedtime your mattress is a battleground of thwarted desire. Enter the sleep number bed, designed to let couples sleep together in individualized comfort. Hes the softy. His sleep number setting is 35. Youre the rock, at 60. And snoring . Sleep numbers even got an adjustment for that. You can only find sleep number at a sleep number store. and right now all beds are on sale. Yep, all beds, starting at just 649. 99. Know better sleep with sleep number. Little things, anyone can do. It steals your memories. Your independence. Insures support. A breakthrough. And sooner than youd like. Sooner than you think. You die from alzheimers disease. We cure alzheimers disease. Every little click, call, or donation adds up to something big. Alzheimers association. The brains behind saving yours. To build something smarter. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. Welcome back. Heres what happened in markets today, pretty much a sea of red. The dow giving up 1 . The russell, small caps or broad market index, we should say, down almost 4 in the last couple of trading sessions. Bob pisani, whats gone wrong . The market has chosen to focus on the economic weakness rather than some signs that other indicators indicated market was improving. Economics were improving. Bottom line is we drifted lower all throughout the day particularly after we closed over in europe. No improvement there. As you can see weve ended just off of the lows. Economically sensitive groups no matter what you argue what the cause was, cyclical groups, economically sensitive, energy, financial, consumer discretionary, industrials, were the weakest groups throughout the day. By have much lower rates. Thats not a big help to bank stocks. Most big names were down 1. 5 to 2 . Disappointing commentary from hoped builders. Sentiment index was much weaker than expected. Home builders though came off of their lows late in the day. Home building index has been dropping a while. If this keeps up, ive said this all day, youll see a lot of interest in dividend paying names at this point. We told you after the bell about verizon up on birkshire haerkshy taking a new position. At t, for example, has been strong for several weeks now. That pays a 5 dividend. You see that move up recently. Theres been talk of them getting together with dish. That would be a play just to ge the cash flow and keep paying that perspective deb that dividend. Theyve chose ton ignore the philly fed. Empire state better that be expected. Tough, tough market to call right now. David and i were just saying that the vix has crashed as well. That doesnt look like it is coming back. Little spike today. Thank you. A battle was won in the long war between Internet Companies and consumers. Outside the federal Communication Commission protesters clamored for fairness and inside the commissioners voted to allow the chairmans proposal to move forward. Sets the stage for a twotiered internet, a fast lane for content providers like netflix and amazon, a slow lane for others. My next guest says the new rule would allow giants like at t and verizon to pick winners and losers adiskrnd discriminate ag certain content. The most interesting thing about this is, look, the chairman here in moving forward with this was vie dentally insisting this is not something that was going to hurt fairness across the internet. Why do you disa agree . I just think the rhetoric doesnt match the reality of whats in the rules. The actual draft of the rules that they just put out suggest theyre opening the door a payforpriority internet where a few Favorite Companies are grog ride in the express lanes while of everybody else is stuck on a slow winding dirt ride. Craig, i dont see exactly whats wrong with that if it is done right. Take the amazon prime example. Right now amazon is investing a lot of money so that its members get their packages faster. Faster than consumers would be willing to pay. And people love it. If youre willing to be part of prime, if you want to shop with amazon, you can get that. Every retailer cant afford to do that but amazon can. Whats wrong with doing that with data if it is guaranteed that the mainstream speed that companies are able to deliver their content is fast enough. Maybe it is faster than it would have been if these Bigger Companies werent helping subsidize it. Fast enough is a second class internet and people are paying every month to get to the whole internet. Whats wrong with a second class internet if thats what youre willing to pay for. What about people who just have dialup as opposed to im confusing this. Go ahead. This is about the Companies Like netflix, your amazons, et cetera, who want to pay to deliver their content faster than a smaller company. Free market, right . Why shouldnt they be able to pay to deliver confent faster just as long as the other companies are able to get their content there a at a good speed . I mean why not open this up to Market Forces . Whos picking and choosing . If it is users, subscribers choosing what companies they want to use, thats perfect. The problem is these middlemen, at t, comcast, verizon saying theyre going to pick and choose for us who gets a spot in the fast lane and who doesnt. Thats where it all breaks down. On the internet, it is a zero sum game. You start speeding some guys up, everybody else gets slowed down. New startups that are out there, getting stifled. People who want to compete with todays big guys wont get the chance to ride in the same fast lane as dominant companies today are trying to carve out for themselves. That would be like u. P. S. Or fedex or the postal selves picking and choosing which retailers were able to actually deliver those packages to customers if. I think if like you pay fedex 50 a month to deliver all your packages. All after sudden they start charging the sender on the other end extra just to reach you, that starts to break down. The beauty of the internet is once you get online, you should be able to do whatever you want, download whatever you want. I dont think there is an easy answer here but do we want regulation or a free market. If somebodys doing the picking and choosing for me, the last person i want doing it for me is the government. Regulation can be good. Right . But my issue here is nobody wants to pay for the faster internet but the fact is you got to buy equipment and it costs money to deliver this kind of innovation. Whos going to pay for it thats what we pay for every month. But we want it even faster than it is right now. Invest in your networks. Service your customers. If we had competition for the broadband market, thats what theyd be trying to do. Instead these Big Broadband providers dont face enough other competition so they find other pockets they can dip into instead of serving their customers. Those customers are paying for these services. I pay verizon 80 a month for among other things i want my netflix. Ive been paying for that, they should deliver it to me. Thats their job. Well, they are delivering it. But right now, netflix are paying content delivering networks, they are buying dark finer to deliver content faster to you anyway. I dont have a problem with them using cdms and other things to reach me. My problem is when someone else is picking and choosing for are me hot winners and losers on the web will be, id rather it be based on merit and product and who has the best prices. This is the comment period. A new flap over flappy bird. Yesterday we had the video games founder on talking about bringing back the addictive game but he may have a problem doing so. Well explain why. If housing is on the rebound, there should be no problem selling this. Draculas castle. Believe it or not, it is up for sale. And tomorrow, well tell you all about it. Tdd 18003452550 searching for trade ideas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18003452550 sharpen your instincts with Market Insight from schwab tdd 18003452550 experts like Liz Ann Sonders and randy frederick. Tdd 18003452550 get support and talk through your ideas with our tdd 18003452550 trading specialists. Tdd 18003452550 all with no trade minimum. And only 8. 95 a trade. Tdd 18003452550 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. Tdd 18003452550 so you can take charge of your trading. Welcome back. David tepper making some big new individual stock moves. More tepper news . More tepper news. Again, he doesnt want to be so freakin long these markets but as of the end of last quarter he did take some pretty interesting new stakes. New stakes from david tep arers anticipa appaloosa funds. Adding close to 700,000 shares of expedia. Hes completely out of his emc stake, 2. 9 million shares sold there. Also he sold a smaller stake in verizon. He sold 400,000 shares. While third point and birkshire are picking up stakes in verizon, appaloos sacha has solt off. Hes boosted his halliburton stake by 4 million shares. Boosting stakes in disney, comcast, the Parent Company of this network, as well as cvt. And a notable increase, 2. 9 million shares where of General Motors added to the appaloosa portfolio as well. We told you about the 11 an upd whats happening with Berkshire Hathaw hathaway. Also some notable decreases in the berkshire portfolio. Hes decreased the gm stake by about 10 million shares. Berkshire now selling shares off. Also psx, phillip 66, the refining company. A reduction of 17. 5 million shares of the psx stake there. Interestingly, walmart, its been a big day of news. Boosting the stake to 58. 1 million shares. Today a fairly down day for walmart shares but Berkshire Hathaway boosting that stake in walmart. Kelly, well keep looking through these names. Right now big moves out of tepper and berkshire. Back over to you, kelly. Adding to their gm positions in that quarter. Thank you, dom. Lots of big names moving as well today. Following earnings reports. A lot of earnings to report. We begin with jcpenney. Soaring an after hours trade. Narrowing its First Quarter loss on better than expected sales. Jcpenney up about 19. 2 . Switch over to nordstrom, also higher in the after hours posting better than expected First Quarter earnings. Revenues in line with expectations. Nordstrom up about 10 . Meeting street expectations and revenue. It forecasts slightly below consensus. Were seeing shares up about 3 . We end on autodesk. Posted better than expected. Raised revenue forecasts for the year. Stock trading higher by around 4 . Kelly. Thank you. A lot to wrap our heads around. Bitcoins are mounting a comeback. Failure of the digital uncert n uncertain uncertainty. My next guest, making bitcoin as user friendly as possible. The founder of bitreserve. Org. Tell us about this. Thank you. We ended upcoming up with a very different kind of Bitcoin Service because we approached bitcoin in a different way. Much of the bitcoin world sees bitcoin as a new kind of currency that will displace existing currencies, a way around the Federal Reserve and government. And they havent looked at it the way i did which is as a consumer phenomenon. What does a consumer have to get in order to work for them. The consumer wants their dollars which they already have and hold and use. They want their dollars to do what bitcoin does. They want it to be fast, cheap, easy to use. We brought a cloud based model to bitcoin and now you can hold dollar dollars, yen, in your own currency. Because your model is to take a percentage in the transactions, how much better is this going to be for people than if they had just transacted over the internet, through bank, credit card companies, et cetera . Whats interesting is that 99 and some percent of what some people do is not spending money in their own currency. Any time when you spend in dollars or transfer in dollars or have a retailer connected to us, its free. Its the worlds first Payment System thats not instantaneous but also free. Its a great thing with a cloud model. You can have lots of users. The easy to connect them. Thats what we do. We let people hold not just bitcoin, but we let them hold dollars and euros. Currency must be a unit of account. How does bitcoin meet all these . In 30 seconds if you could. Its easy. Its not a unit of account. Nobody prices anything in bitcoin. They price it in dollars. All of their bills, theyre in dollars. We hold dollars. What it is, its this amazing tra Transactional Technology thats a standard. Its the most Amazing Technology since i started building seanet on the internet. The ability to send value back and forth is great. How much capital do you have behind it right now . We havent announced how much money we raised. Well be without actually charging than we will probably be profitable putting the bitcoin piece aside, whats your Business Model . Theres a 4x. When people come and take their bitcoin, they can convert that to dollars and get all the same benefits. When they do, they pay 1. 5 . Were probably the most im sure were the cheapest consumer way and only having your own trading account would be better. If you could be proper by the Fourth Quarter. I said it here. Yes. Good to see you. More than happy to. Thank you. Coming up, the creator of flappy bird may have a fight on his hands. He wants to bring the hit mobile game back after pulling it in february. But he wants to launch it on apples app stores, he might have to come up with a new name when we come back. [ female announcer ] theres a gap out there. Thats keeping you from the healthcare you deserve. At humana, we believe if healthcare changes, if it becomes simpler. If frustration and paperwork decrease. If grandparents get to live at home instead of in a home. The gap begins to close. So lets simplify things. Lets close the gap between people and care. Lets close the gap between people and care. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. Welcome back. So yesterday we spoke with flappy birds creator who wants to bring the game back. The problem is the ceo of mobile Media Partners telling us his company has the rights to flappy bird. So if the creator of flappy birbir bird, wanted to bring it back. He couldnt if its under apples name. Im not sure he wants to bring it back. He seems am bif lent of the idea of creating an addictive game. I love that. It doesnt really matter if its called flappy bird. He can call it flippy bird. It has the same connotation, john. That hes a fun connotation, isnt it . Has anybody here played it . I have not. I just got a cell phone three years ago. Im making progress. Gieuys, thank you all very much. Time for fast money. That does it for us on the closing bell. Over to vegas with melissa lee and the gang. Announcer before leaving las vegas the fast money team has one more lauhour of trading ide. And market moving news. We see great value but not a bubble. Announcer all these vip parties havent left our crew hungover. On fast money we know how to rally. Tonight the fast team goes the distance