Transcripts For CNBC Closing Bell 20140612

Interview with investing legend Julian Robertson of the tiger funds. What are his best investments right now . Plus, he tells us who he thinks the best investor alive is today. And, then amazon launching a Music Service today. But wall street seemingly unimpressed. The stock taking it on the chin, down about 17 year to date. Our special guest bob olsteen is not surprised. Hes been a bear on amazon for a long time now and says it is about to go from bad to worse. Bob olstein will tell us that and more exclusive in about 30 minutes time. Right now in the markets heading into the close, major indexes heading towards their lows of the session. Dow jones industrial average shedding 122 points this hour. Take a look over at the nasdaq which is off by about 42, under 4,300. S p 500 shedding about 15, at 1,928. Heather hughes, jim lowell, peter anderson, and from chicago, our very own Rick Santelli. Welcome, one and all. Heather, let me start with you. Weve been spending a lot of the day focusing on whats going on in europe. I dont mean to minimize it in the least, well talk about it in a second. But another number out today, retail sales. And it was not particularly favorable. How worrisome is that and what and obviously a lot of the Retail Stocks have been off. Youre right, there is that strong core laying between retail sales. Positive correlation. And we tale tail stocks. Right . Most of the dk or many of the Retail Stocks right now are in bear market territory still down 20 from the highs on the year. You know what i think may be impacting the consumer . Gas prices. The price at the pump. As we know, oil prices are rising not just due to geopolitical tensions in iraq, but crude and fuel are rising and that may have an impact on consumers. Given the escalation potential in iraq, it is amazing markets arent doing worse here. Is that right . Absolutely. The reality on the ground is that first of all inside that retail sales number there was a Silver Lining and im sure heather noted it as well. Restoration hardware up over 10 on the day. Were seeing a lot of consumers buying bigticket items inside their homes. Thats actually a fairly bullish times when consumers allocate their assets reasonably well. But that set against the global backdrop, it certainly looks as though youre facing some significant headwinds. If we see owl prices pick up more than 20 a barrel, that will have an impact, not just on the consumer, but on Global Recovery overall. Were talking about picking up by 2 today. People are making a lot about that, as they should. But 20 do you think thats possible here . 20 increase in a barrel of oil . Well have to see how the situation on the ground, either diminishes or escalates. Weve definitely seen Airline Stocks take it on the chin today. Theyre certainly not looking all that where do you think the high is for oil and what would that do to a consumer as measured by retail sales whos already pulling in his or her horns . I think i do expect some choppiness in the oil price. These things very rarely get better immediately. Theres likely to be continued tension in iraq. Obviously if actual production is impaired significantly and for a long period of time thats going to have an impact on oil. We see a lot of these price shocks. We saw it in the ukraine in energy, we saw it in egypt, in libya. We keep seeing shortterm impacts on potential supplies of oil. They go away in the market and kind of the worst case fears of sustained 120 a barrel just dont happen. It is something to watch but right now i think you got to be thinking it will probably turn out the way the other ones have. I imagine there are hedge funds that are long the airline space. Remember, this is an entire sector, an industry people had stayed away from for years, have finally piled in to. Weve seen a tremendous runup. Today were certainly giving some of that back. Yeah, we certainly are. I think Going Forward what you will see, hedge funds are really trying to make up for the, frankly, horrible returns theyve had in the past several years, kelly, so they are really going to take a look at the airlines because they are really going to be starting to probably short those. Theyre very shortside, no pun intended. But with that view, you wont see a lot of long positions being built in airlines right now. Im not necessarily agreeing with that, but in order to play this hedge fund roll, thats exactly what people are doing there. Were seeing shortterm performance, any kind of event risk like that, they are poubsing on. And i think thats overall adding to at least some of this volatility. The vix is really low, so even when we do have this kind of activity in the airlines, it is going to take a heck of a lot pushing on just general equities to bring that vix up to levels that we think is appropriate right now. What volatility . It is a little higher today but it certainly at some multiyear lows. Whats the bond market been telling you, Rick Santelli . The places to watch most is bond. Is there anything in the action over the past several days thats signaling something to you . I note earlier today you gave the auction an aplus. We had had good demand for the 30year, unlike the 10year yesterday. If you look at marchs retail sales, lets just look at the generic headline number. It was 1. 5 in march. In april, it was revised from. 1 to. 5 . Today,. 3 . Sequentially, thats the field that we came in with in terms of the landscape. Then we see what happens. Look at these charts, tyler. At exactly 1 00 eastern on that strong option you were just talking about, that when we really saw rates drop. I understand there is a lot of geopolitics but theres also a lot of gamesmanship going on trying to make it anything but the economy. With regard to the geopolitics, ukraine didnt really stack up and i dont understand the conventional wisdom with dictating how important it may or may not be. Why did it wait until 1 00 eastern to really get going . I think that the bond market is right for outside forces to be affected. Not so much to push the yields up. If you look at the control group of retail sales which feed into the gdp report it is still running up 5 annualized. I take your point we have to stare straight in the face of whatever weakness there might be in the economy but look again, talking about a 1 00 p. M. Deepening the selloff, why didnt it do that at 8 30 after the chief Economic Data . It had 3 1 2, 4 hours to digest before that. Consumers continue to buy not just small cars but luxury cars. Not just small trucks, but big, heavypriced trucks. They continue to buy homes, albeit at a slightly slower rate. There may be a top hatch there. But you look inside even todays weaker than expected retail s e numbers theyre not doing as reasonably well as they were two months ago. Theyre looking better than i think youre reflecting. But not better than three months ago. The Health Care Point is a big one. Heather, i hear you trying to jump in. Consumer discretionary is at the back of the pack this year and energy is leading the way. Consumers i think last years withiners have become this years losers. Dont see that trend reversing any time soon. You alluded to Consumer Discretionary. I think we still have a lot of the Retail Stocks, can you find them within the Consumer Discretionary sector. It is the only red economic sector. 1 out of 10 economic sectors thats down year to date right now. I dont think without any uptick in growth that will you see that trend reverse any time soon. Eric, everybody was saying that when the spring came around and the warmer weather came around retail sales were going to pick up and it didnt. Well, first of all, month to month is volatile as all getout. 1. 5 , 5 , and. 3 is a good quarter worth of spending. We just expect consumers to actually continue to spend at roughly the same levels theyve been spending at the expansion which will drive Economic Growth positively. Today in d. C. , torrential downpours, still massive flooding on the weather front. Its coming our way then, soo. Thanks, folks. Weve got about 50 minutes of trading left in this session with the dow dipping down toward its session lows off about 129 points. A lot of cross currents in this market that we were just discussing. Chaos in iraq sending Global Oil Prices higher. The latest developments from nbcs Jim Miklaszewski are next. Plus, well speak with a middle east specialist and former u. S. Ambassador to iraq about how bad the situation could get. Also coming up, elon musks tesla motors, deciding to share its patents with competitors, with anybody, really, if it makes the planet cleaner. But is that really its motivation . A Billionaire Hedge Fund legend sits down with me in a closing bell exclusive. Im a big fan of uber and i think google owns 20 of uber. Youre watching cnbc first in Business Worldwide. Come with me, his wife said. Big job, big city, big new country. How can i move to a city, he said. Im a country boy. Let me see what i can do, she said. So she opened a bank account, sent money, rented an apartment. And found him a little bit of country. In over 700 cities worldwide, products and services that make a citi client anywhere a citi client everywhere. Yeah, citi mobile. Pay the dog sitter . And deposit that check . Citi mobile. Pack your bathing suit . Wearing it. Niiice bank from almost anywhere with the citi mobile app. Welcome back. Crude oil spiking in the wake of iraq possibly spiraling out of control. Closing at its highest since september, thats sent the Airlines Stock into a bit of a free fall today. Nbcs pentagon reporter Jim Miklaszewski now has the latest developments for us on a busy and troubling day for news out of iraq. Reporter what sounded like the Biggest Development of the day is when president obama addressed reporters and said, look, all u. S. Options including u. S. Military options to help iraq out of this situation are on the table. But that doesnt mean theyre all good or viable options. According to senior military and dod officials, there is no current planning for any kind of air strikes. One of the problems is because the u. S. Doesnt have any kind of good intelligence, that would be absolutely vital, absolutely necessary to conduct any kind of effective air strikes. At the same time on the ground today, isis took another town today, samarra, it is a shia stronghold and one of the religious icons, the golden mosque is there. If the sunnis did what they did during the war and blow up the mosque, that would blow up the entire country and it would be overnight an allout civil war. All right, jim. Thanks very much. We appreciate that report. Some of those names are names we remember from the iraq war, samarra, tikrit, mosul and others. Joining us now to discuss what the possible outcomes might be, elon, first to you. What do you think is the likely response by the u. S. In this situation . Well, i think it is very hard to envision a very policy on the part of the white house simply because there arent a lot of good options to be had right now. The president articulated sort of a steppeddown process in the middle east precisely because the narrative was iraq is stable, iraq is selffunctioning, selfgoverning and selfpolicing. What were seeing now is thats not the case. But we also know that the american electorate doesnt have a lot of appetite for a repeat of gulf 2. As a result, the administration has a fullblown Foreign Policy crisis on its hands and it doesnt have very many good options. As butch said to sundance said to butch, who are these guys, what do they want and where are they going . Sure. I think this is a franchise of al qaeda. Al qaeda, they are extreme radical sunnis who want to kr l control an area between iraq and syria. Theyve been setting up an Islamic State by really capitalizing on local grievances that are stir a response in dealing with the sunnis in iraq and spread iing. I dont think it will lead to state collapse. Iraqi forces have ilan, people are saying it is already the army is walking away from their i say parts of the state will remain outside government control. Thats what will happen. Northern part of iraq will not have any government control for the foreseeable future. However, these soldiers, the shia soldiers that were fighting in the north, are less likely to advance. When it comes to the shia area in central iraq, theyll do a much better job. Talking about also the potential support from iran and the u. S. Ilan, is it perhaps worth noting in a situation that Bashar Al Assad is now aligned with u. S. Interests . I think it is noteworthy but not in a good way. I think if we remember back to the hostilities that took place in iraq during the mid 2000s, it was in very many ways a proxy car between iraq on one hand and sunni forces, including al qaeda and including saudi arabia on the other. Were beginning to see history repeat itself. The iranian leadership has already said that it is willing and able to send its clerical army, the irgy, into iraq to stabilize the situation to fight al qaeda. In both scenarios, whether iran wins or al qaeda wins, i think american interests are going to take a serious hit. Ilan, you said one of the dangers, and you dont foresee it, is state collapse. But one of the of arguments here is that in this part of the world for historical reasons, many of these countries really arent states to begin with. They were established decades ago by the british mandate, and really are can glom rati lly ao people that dont get along very well. Sunni, shia, minorities and kurds. I think were looking at iraq being a very dysfunctional state for the foreseeable future. But in terms of how it affects the exports, oil exports from the south, i think were looking at minimal risk at this point. I think the expectations that 2. 78 barrels, i think the risk of that is very limited. Whatever the situation is, there are few good options, seemingly, for the u. S. We have about 40 minutes of trading left with the dow industrials only a bit off the lows of the day. Up next, tesla is making its patent available to rivals and anyone else who wants to copy its innovation. Why would it make such an unusual move and what kind of precedent might this set . The scoop on whats going on at twitter. Well be right back. Means keeping seven billion ctransactions flowing. G, and when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions make sure you always know whats coming and are ready for it. Make it matter. But were not in the business of spokespenaming names. Kswagen passat is heads above the competition, the fact is, it comes standard with an engine thats been called the benchmark of its class. Really, guys, i thought. It also has more rear legroom than other midsize sedans. And the Volkswagen Passat has a lower starting price than. Much better. Vo hurry in and get 0 apr for 60 months on 2014 passat gasoline models plus a 1000 contract bonus. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Welcome back. Stocks just off their lows of the session but it is still a negative day. The dow off 108 points this hour. S p gives up 13 and the nasdaq 37. Lots of cost currents riling the markets today. Tesla shares heading south, too, after the billionaire founder and ceo elon musk says his company is going to share patents with everyone. Including rivals. Phil lebeau, why is he doing that . Reporter its all about trying to spur development of more electric vehicles in the industry. Something weve heard about in the Tech Industry but it is really unheard of when you come to the auto industry. Tesla is opening up all of its patents, at least hundreds of them, to other competitors. Theyre doing this for competitors who want to use those patents in good faith. In other words, if you are a Startup Company and you make a duplicate model and youre not getting due rates, things may be a little different. It hopes by opening up its patents it will spur development in the industry. Heres elon musk in the Conference Call talking about his disappointment were not seeing more when it comes to eds. I thought things would be much further along than they are. You consider the fact we built the roadster seven years ago with a roughly 50mile range. Its been seven years and theres no other electric car in production with that range level. I mean thats not great. Reporter nor is it great when you look at the sales of electric vehicles last year in the United States. Under 100,000 were sold. Compare that with all other vehicles 15. 5 million were sold last year. Take a look at shares of tesla. We noted they traded lower during the session after they made the announcement today. Guys, bottom line is this for tesla and all electric automakers, to have sales take off, they need to have the price come down on batteries and more energy in those batteries so you can get more range in the vehicle. Stick around with that. Were joined by ross gerber from gerber kawasaki. Let me pose the same question i posed to phil to you. Why would he do this . Is it a desperation move and whats the risk someone comes in, sees something in those patents and finds the breakthrough that actually doesnt help tesla, but hurts it . I think theres no risk in that at all. I think what elon musk is saying, hey, we need electric cars in this country. Look at iraq, the piece you did before, it is all about oil in the end, all this fighting. We need to get off the oil economy that were on. What hes saying is i put out this great car and after all this time, nobodys even got it even close to a competitor to me. Im trying to build an electric infrastructure so heres my patents. Do something. Gm cant even make an ignition switch that works, let alone a fully developed car. So i think hes seeing a bigger picture. Tesla will only profit from a greater electric car infrastructure. I think thats why hes trying to do this. Doesnt gm have the chevy volt . Come on, have you driven a volt . Kelly, nissan has the leap. Are there other electric vehicles out there . Yes, there are. Are they wildly successful . No, they are not. Thats because of the cost. That gets back to the battery technology. Musk is betting that perhaps people will take some of these patents, some of the technology, develop battery technology, develop vehicles that make these come along much quicker. Because if that doesnt happen, what were going to see is electric vehicles being just a niche player in this industry. Thats what teslas trying to fight. Are you as surprised as elon musk that the industry has developed more over last several years . No, im not. Because i dont think everybody is committed to it. People who work with automakers, everybody says the same thing. Every automaker says wed love to have electric you a toes but were not going to make the Huge Investment that is really needed in order to bring down the cost. And because of that, very few are going to commit to it. On cost of the vehicles, thats one thing, clearly. Range of the vehicles is another thing, clearly. And the third thing is, the price of oil, until just kr recently has been fairly stable. Were finding more oil domestically. And there is a longstanding relationship between the American Auto industry and the Energy Industry in this country and thats a hard thing to break. Exactly. Thats exactly the issue. You can talk about all these really feasible concepts. But this is a monopoly. It is big oil. It goes back 100 years. And auto industry. And they perpetuate each others businesses. And the last thing the car business wants to do is change. Thats what elon musk is saying, look at the dealers reaction. He put a store in new jersey and the dealers went nuts. It is no different than the uber issues or anything else. These longstanding industries that have made billions and billions and maybe trillions of profits dont want to give up those easy profit sources to make something that might be way better but it cost lots of money and will completely change the face of an industry. And they dont know what it will become if this happens. Last question, phil. But if batteries are the stishging poistishg i sticking point, if they could solve a lot of problems theyre discussing, is it that theyre not that far along as they would like to be in developing Better Battery Technology . Is anybody, public or private sector, going to be able to get there in the next few years . No, theyre two generations away. The next generation will cut it a little bit. But not a lot. But you have to go at it at least three or four years. But you have to cohope the cost and energy life of those batteries improve. Amazings. Two generations. Thats going to be a problem for the electric car industry. Meantime, amazon launching its prime Music Streaming Service. Investors yawning. The stock down 2 today. Why the lukewarm reception . Plus, well speak with closely followed fund manager bob olstein who says amazon is an loser for investors. Find out how low he says that stock will go after the break. Plus, olstein says mergers and acquisitions are just getting going and he will name names he thinks might be next in the game. You tdd 18003452550 out there. In here. Tdd 18003452550 out there, tdd 18003452550 there are stocks on the move. Tdd 18003452550 in here, streetsmart edge has tdd 18003452550 chart pattern recognition tdd 18003452550 which shows you which ones are bullish or bearish. Tdd 18003452550 now, earn 300 commissionfree online trades. Tdd 18003452550 call 18886486021 tdd 18003452550 or go to schwab. Com trading to learn how. 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Go to stamps. Com tv and never go to the post office again. Including postage and a digital scale. Trwith secure wifie for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. All right, folks. 33 past the hour. Industrials down 125 points at 16,719. The nasdaq down almost 1 . Amazon launching its prime Music Streaming Service but shares are not responding well. Theyre down almost 3 today. So jon fortt, what explains the selloff. The service doesnt look like that much right off the bat compared to spotify, compared for pandora, even some what have apple has going. My initial take was, eh, not much to care about. I know gene munster feels the same way. Ive downloaded it, ive given it a try on my phone. You know what . It is better than i expected. Yes, it is missing universal music. But this is a service that really fills in some of the gaps, some of the back catalog songs that you like back in the day that you might want to listen to. It gives you those. I think it will do what amazon needs it to do which is drooiiv music sales. You can download new songs, play lists. It is also likely to increase royalty to prime for those who are already members, maybe even drive a few incremental 99 a year signups. Kelly . Jon, what does this mean for amazon shareholders . Joining us, bob olstein, chief Investment Officer of olstein capital management. I want to first get your thoughts on amazon. It is not a stock you have liked. In fact, quite the opposite. Tell us why and tell us where you think it can go. First of all, i am a customer of amazon. The fact they had no Business Plan to make a profit. Its spend, spend, spend, spend, spend. Theres no cash flow. 5 billion in sales to 80 billion in sales in the last ten years, still no Free Cash Flow. No plan. Theyre trying to take over the world. The whole Business World. Ive had had five companies in my career that have tried to take over the Business World that are no longer here. Theyre everything to everybody. Theyre music stream. Theyre phones. Theyre supermarket which are the five . That tried to take over the world . Conglomerates. Remember two plus two equal five . Making a long story short, i predict a stock split over the next three to five years but youre not getting more shares. If thats the says, being everything to everybody is a negative, isnt that what so many of these tech giants are doing today, whether it is apple or google . I dont see it the same way, kelly. These guys are just so far booked out in their business theyve said, if you dont like our investment, become a customer. Could he, bob, flip a switch, in effect, and turn this company from one that isnt making a profit now to one that makes a big profit given the volume of sales . Maybe hell make 6 a share. Maybe hell make 8 a share. But it is not going to justify the 325 price. Bob, im curious where you do see opportunity. Aside from amazon. Well, the acquisitions out there are just at the beginning. Basically what you have to do is you have to go ahead and look for companies that we invest at the olstein funds as private equity partners. We go in and look for companies that are generating huge Free Cash Flow, have temporary issues okay . They have temporary issues that are confronting them and showing that huge Free Cash Flow. Good businesses. People do not like to invest in companies that have temporary bad news because they want to get in the amazons, the twitters, the linkedins. Thats whats working. But we believe we get real true value and thats how our returns have been generated. Whats an example . A great example is techlt radata. They are growing at 5 and 10 . Here is a company thats capable of generating 7 Free Cash Flow yields. Theyre growing. They are. They do have some competition, but some of the competition is not competition. Its really complimentary. Heres a company that maybe an oracle or hewlettpackard whos really stopped growing. Can go in and use that Free Cash Flow and that growth and pay a nice premium. Your second candidate was petsmart, which was a company you say might well be a candidate for a private Equity Company to come in and take out. But i used to spend a lot of time at petsmart. I now buy my pet supplies from amazon. Petsmart is an experience. Okay . You go out there. People want to go in. Theyre no longer growing at 5 and 10 a year but they are growing at 2 and 3 a year. Here is a company thats depreciation thats far above their cap x. You are getting a 9 or 10 Free Cash Flow yield, and in a 2. 5 treasury market okay . And that will grow at 2 and 3 . This is an outstanding company. Theyre no longer growing at what everybody wants them to grow at, but, boy, what a great return for a private Equity Company. Bob, can you just clarify what positions you have in those names and also wlufs behether been actively shorting amazon . We are not actively shorting amazon because right now the lunatics are running the asylum and were not going to step in their way and we have significant positions in petsmart and teradata. I think mr. Bezos is on live two for you. The lunatics are running the asylum. I meant the stock. Mr. Bezos is a very smart i meant the people buying the stock at these prices. Theyre really taking a high risk. Unless this man is going to produce 10 a share Free Cash Flow. And theres no indication. Id rather stick to buying in our fund the 9 and 10 Free Cash Flow yields and make money slowly and care about risk. What about radio shack . Boy, thats just gone a long way. We sold it a long time ago. At one time we had it, at one time we made a lot of money. Our last trip in, we saw that the company was going in the wrong direction and we vacated the premises. Is it going to survive . You know, its really interesting. I dont know. I think there is an opportunity because of the location, but whether or not management and the debt, it may be too late. But were monitoring it. Because if there is any indication there, we may be looking at it. Bob olstein, thanks so much. Weve got about 20 minutes left until the closing bell. The dow is down now 140 points. Are markets rigged . In the wake of charges in Michael Lewis case, Hedge Fund Legend Julian Robertson answers that question next. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. 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With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. All right. We got about 17 minutes of trading trial left. The dow off 131 points. Nasdaq off nine. I had a chance to sit down with storied investor Julian Robertson. The full interview youll see next hour. But tyler, i do want to preview that with this clip where i asked him about the claim from author Michael Lewis in flash boys that the market isnt fair for the average guy. Do you think theres something broken with markets today, whether it is michael lieu wis lewis claim that the markets are rigged . No, no. We have a great bubble economy. The managers of our economy all over the world are making it unattractive to own bonds at all. Now it is not fair to say a that they are pushing stock prices up. But they are. They are. Because bonds are so unattractive way to put their money. I wonder what will happen when the bond market turns. Thats a question, tyler. No, exactly. Hes much more concerned about bubbles in the market than is he about market structure. Always good to see virginiains like you, me and robertson and carolinians on the same page there. Yes. I did love the accent and the tiger over his shoulder there. He had a lot of of thoughts. We touched on a wide range of issues. Im still not entirely clear. This is a guy who hes talking about the bubble economy and himself, his career has ridden some of these highs and lows in the market for better or for worse. I went on to ask him later about march and april and the trouble some of his tiger fund cubs had had as well. This is the issue. It absolutely has. An awful lot of the hedge funds have not really kept up with the market over the past few years. It is not that theyve lost their mojo or their intelligence, it is just that the markets are tricky and it is very hard to keep repeating your success through the years. The rest of that interview with Julian Robertson is coming up in the next hour of the program. He talks about why he likes google and what else is on his list. Weve got about 14 minutes before the closing bell. The dow off 117 points and the s p off about. 9 . So whats really going on inside twitter . The shares rallying today but its coo stepping down. That management shakeout may not be over. Well have the scoop and the details coming up. Having the cloud allows us to rapid prototype a lot of ideas. Being able to pay as we go is crucial for a start up. Having to fork out a lot of money up front was risky. We can launch a feature really quick, and if the feature doesnt work, we havent lost anything, and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. About 117 lower for the dow, the nasdaq off. 9 . And the s p 500 is off about 15 points. In what has been a rather choppy day. Keith schiff, good, as always, to see you. We spent a good portion of this hour talking about iraq. Are traders down there talking a lot about iraq today and its effect on the marketplace. Yeah, absolutely. You could see some exhaustion coming into the market the last three or four days. In fact, we pick up a pretty good technical indicator on june 10th, a charring pattern which showed that the market has been decisive and a reversal could happen. All it was waiting for was this catalyst. Appears the catalyst is this ongoing disruption we are seeing in iraq of what may actually happen from an economic standpoint and how it is going to impact some of the companies. Going forward. Absolutely, thats what were focused on right now. Keith, we were arguing a little bit about that at the top of the hour, whether it was the recent report out of the u. S. Or these geopolitical issues. What makes you so sure it is centered on iraq . It is one of the catalysts for to us get out of this indecisive pattern. I talk to some institutional clients and other traders all day long and thats the indicator theyre pointing to the most. The indicator will come in either moderately down or moderately up. We know that. The catalyst with whats happening in iraq may push these markets. Were at a critical level with the s p 500. It happened rapidly. It will take for us to hold 1,930 on that index right now to maintain the movement we started. At what point do oil prices begun to take a toll on stock prices . I think youre beginning to see that. We take a look at the whole menagerie of Asset Classes. You look at what happened in the 30year bond auctions today, the oversubscription, the bid to cover on that was the best weve seen in some time. People are nervous. Theyve been nervous for some time. You can see the skittishness in the market. Some of the other geopolitical issues weve been dealing with for a couple months have simply not gone away. And now the escalating situation in iraq has people nervous that the u. S. Is going to put boots on the ground again. Im no Foreign Policy expert, i dont think were going to get there, but if we do, that could be the main thrust for us to really have a pretty good selloff in this market. What would it take, keith, for oil markets to pop by 20 a barrel . It was one scenario laid out at the top of the hour for something that would really cause disruption. In the constellation of likeliness, where would you place that kind of outcome . It would take some doing but if you put your imagination to work, it doesnt have to be that far away. Iraq since they got their infrastructure back in order has been a major oil supplier. It wouldnt take too much for the entire region to get involved. One of the things that set the market on fire were rumors iran was getting involved in there. The syria conflict and iraqi conflict have kind of melded together. What is saudi arabia going to do. The whole region is really having a big problem right now. That could really push oil up to that level that hes talking about if things were to escalate. A week ago we were talking at least some people were talking about complacency in the market, lack of volatility. Today is not necessarily a volatile day, but this, today, and the events today remind me that you never can be sure where the next whiff is coming from. Last week nobody was talking about an insurgent attack in Northern Iraq that i was aware of. Well, thats right. Trading has become much more complex as you are alluding to. You have to keep your eye on not only equities, but all Asset Classes around the globe, whether fixed income, commodities, both hard and soft m commodities. And also keep your eye on the geopolitical things. We do see some consolidation happening. If you look at june 10th, it was a real indecisive day. Yesterday could have been the start after trade reversal, meaning we were going to head down. Well have to see what happens with the close of trading today. We have a buyin balance happening right now. Control what you can and prepare for what you cant. Thats investing. Keith, thanks. Well be right back with the closing countdown. After the bell, former ambassador to iraq is going to give us his take on the deteriorating situation over there an how bad things could get. The market, as you just heard, watching closely. So is the rest of the world. Well have the latest. Back in a moment. D every minute. D every minute. But then you grow up and theres no going back. 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Fifteen minutes could save you. Well, you know. In a we believe outshining the competition tomorrow requires 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. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Dow, nasdaq an s p all down as we turn to the closing countdown. Back on the floor, bob pisani. Bob, sum it up today for us. Well, look. The volume is still below normal. The vix is at 12. Thats still historically very low. Volume is still below normal. Im not happy about the situation with oil going up a bit but i would point out that the overall market is not down much. Oil stocks are up quite notably. Airline stocks down 5 . Im sorry, thats a little bit of an overreaction. Reason that is happening is, Airlines Stocks have suddenly become momentum stocks in the last year. They never were before. Delta, for example, is up almost 100 in nine months is that an excuse for profit taking on a day like today . And the high beta stocks now. S p is up 1 . Delta goes up 1. 6 on average on a daily basis. So when you get those kind of high beta names, when you get a day like today, they ten to move down a lot more than the overall market. Thats a little bit understandable. As of right noe nw though, tyle weve gone 39 days without the s p more than 1 . 39 days. Thanks to my producer for pointing that out. Thats amazing. That sums it up. 39 days. No move of 1 or more. Today the s p is. 8 on the downside. Im not saying it is trivial. I dont want it to go down at all. Bottom line is we have had a remarkable period of relative calm that the vix is reflecting and the volume is reflecting as well. You would think there would be a little more concern about oil spiking up, a little more hand 2 . We havent seen oil spike that amount in a while. Thats not trivial but the overall market is taking it relative calmly. Today contributing very heavily to whats dpg on in the airlines. As much of a concern about production, disruption in iraq. Iraq is a superstar are in oil production. You know that as well as i do. They produce 8 1 2 Million Barrels a day in the u. S. You know iraq produces 3 million. We produce a Million Barrels in the the u. S. Is on the rice in oil and gas production. All right, bob. Thank you very much. Well see you back here in a little bit as the dow launches forward about 108 points. That was the first hour of the closing bell. Now kelly evans picks up with the second. Thank you, tyler. Welcome to the closing bell, everybody. Im kelly evans. Second grim day in a he row on wall street with the dow off about 110 points. The nasdaq down 34. The s p 500 off 13. Very consistent with the energy complex. Lets get right to it with todays panel. So much to get to this hour. Michael, just give us your thoughts on this now twoday selloff and how much deep ter can go. Well, i dont think we had a lot of volume. Thats not as concerning as if we had more volume. The excuse today is the problem in iraq and that problem is going to be with us for a little bit of time. The market will have nervousness and volatility to the downside will continue. I think you can use it as an opportunity to buy stocks you were watching that you thought were too high. What is the strategy here . Were seeing from our investors and from our customers on the institutional side, the money managers, theyve been a happy holder of stocks. If they did any trading at all. But on the hedge guys youve seen some concern. Especially now with the geopolitical risk. Seeing some hedge funds through some of their core positions while taking their spots selectively on the short side. Michelle, you think the retail audience should follow . Adjusting slightly to the geopolitical risk . How much reaction should there be if youre generally investing in Holding Stocks . What do you watch for now . Look. I wasnt be making decisions based on whats happening in iraq. We dont think a lot of oil will come out of the market, at leaf not so far, because the insurgents havent gotten to the Oil Producing areas. So oil coming out of the market, weve seen oil rise for fears of the possibility. However, at this point it is still unlikely. Are we going to see sol kind of bigger involvement by the United States in iraq . Wow. That would have to be a really enormous undertaking and sea change in the American Public viewpoint. Im not sure how this plays out in a bigger way in the u. S. Domestic stock market other than do you sell the airlines because oil prices are going to be higher and buy oil. And the Airline Story is an interesting one to watch especially knowing the exposure the Hedge Fund Community has here. Remember, the airlines have acted more or less as Growth Stocks in this market. These were considered uninvestable Asset Classes. Today the trade reversing. The question is whether people might be seeing the end of a trend, a chance to get out. Maybe they are forced to get out. I think theres going to be some profit taking in the Hedge Fund Community. Hedge funds didnt do all that well last year except for a few. Theyre not doing well this year. Theyll take profits where they can find them. While iraq is something we need to worry about in the market, i dont think so yet. But if this is a problem like we had have in turkey, then this in you look at your portfolio an decide where do i want to be. Well talk that out in the next block. We have some guests specifically to talk about us. Couple other interesting developments in this market today, technology being one of them. Jon, is it just a twitterspecific kind of day . Theres amazon launching its music server. Tech stocks overall didnt even do that much. I take a look at my list. A lot of things were maybe up a percent, down a percent or two, low volume. Twitter up a lot on this news that the coo has resigned or kind of pushed out. Twitter had a history of turmoil, so interesting to see how investors on this particular day chose to deal with that. Then youve got amazon coming out with amazon music. I think it seems hohum because its no competitor to a spotify or pandora. Then i got to play around with it a little bit, it is actually a pretty good server. Will probably do the job of guesting people to buy more music, to stay loyal to prime. The gains will be in the back half of the year. New iphone, googles android software. Not a lot to do right now with those stocks. I think when you talk about technology you talk about the labor costs that are starting to skyrocket because of lack of skill workers in the technology space. As and veteran broker dealer, we do our best to help military veterans find employment and the skill sets they possess being in a highly technological United States military translates wonderfully to all sectors of our economy. So our returning veterans when given a chance can help fill those positions and help our country in the long run. Thats a great one. I think jons right. The second half is going to be the tech story and you really got to begin to distance yourself now for the second half. If you continue to wait it is going to be too late and youll miss the opportunity. There are great opportunities in tech right now from a valuation point of view. You put other issues on the sideline, position some of those stocks now, the amazons of the world, apples of the world, the intels of the world, youll be well rewarded in probably the fourth quarter. We saw apple selloff. People were, oh. Then google io, googles equivalent where they roll out changes to android. Theyre going to talk about about what is io . If you want to own the internet, own google. Google is the internet. Well, unless youre talking about facebook. In which case facebook might be the internet. Depending mobile, not mobile. People are never quite sure how to play these events. Back to the developers conference, there was some angst they didnt unveil certain hardware products. They said they never would have done that kind of thing. These conferences are like huge s. E. C. Filings where youve got to go and be able to dig into the numbers. You have to dig into exactly where apple is placing its bets. By bringing up thousands of apis. Putting new hooks into their software to allow developers to participate and build new types of products. Most people dont get that. Announce something that i can buy. If youre an investor you want to dig into that, learn about it and figure out if you think apple or someone sells better positioned. A lot of people are still going to be digging into what exactly has happened. With these markets in the last couple of trading sessions. Guy adami joins us now ahead of his appearance later. That many gave you a little extra time to reflect, you guys. All i do is reflect. Whats going on with these markets . Is this geopolitics . Should we now be sensitive about every subsequent headline coming out of iraq . Yes, is the short answer. The market was looking for an excuse. But think about it, its not like weve collapsed here. The s p is down 15, 16 handles in the last day. Not a big deal. What ill say this, technicals are starting to get a little bit concerning. Think 1,816. You can come back, but it is june what . 12th . I think at some point this month well test 1,860 in the s p and see what happens when we get there. Unless, again, dont label me as some crazy bear. Im not. I just think thats what the techs will set up. I know a lot of people couldnt care less about yields but the movement with tlt today was interesting. So a lot of cool stuff going on. Were also getting news hitting the tapes this hour. Bertha coombs. Intel is raising its guidance kelly for the Second Quarter. It now sees revenues coming in from 13. 4 to 24 billion. They say because of the fact that they are seeing stronger than expected demand for business pcs. As much as we talk about pcs being dead, we see them in all the offices here around it is still a stronghold when it comes to the enterprise. Back to you glp this. This is a barometer, michelle. Maybe we shouldnt be surprised. The chip stocks have been on fire. Theyve been telling us maybe that something was coming. Jon, arent they migrating to mobile chips . They actually subsidizing the mobile industry. Theyre not making money there yet. Were doing this window xp transition where a bunch of businesses realize they no longer have support for those xp machines, they need to upgrade. A lot of businesses have waited wait too long to upgrade. It is good theyre doing it now but that does not necessarily mean that this is more than a one or twoquarter event. They want to be sure. Are you saying that what weve seen in chip stocks is not im talking about intel and the fact that theyve raised their guidance, were seeing a little bit of a unique situation with business pcs. Businesses wait a long time to upgrade these things. Hang on a second, everybody. Youre talking about the longawaited upgrade cycle in the corporate space. You could stitch this together with the moves on micron, Credit Suisse making some comments. If this is happening, what does that mean . For us and our institutional clients, what theyre telling us is theres still a lock on supplies. You go to the equity markets, you look at a strong m an a activity, look at strong buyback, the ipo market has cooled down a little bit so theres not a lot of product and you see the market continue to rise. Longterm despite whats happening geopolitically you can continue to see this market rice. Economic uncertainty delays the normal replacement cycle. That cycle can only be delayed so long. This is going to follow through to not only tech but also the industrial space. Cars. Machinery. In case you missed it, this is what just happened. Intel came out and boosted its view. It now sees this is the jon fortt point some Revenue Growth versus flat Revenue Growth or about flat Revenue Growth for the year. Just boosted its Second Quarter and fullyear revenue and gross marg margin. Were talking about revenues in the range of 13. 4 billion to 14 billion from 12. 5 billion to 13. 5 billion previously. We were talking about the potential for the rally of tech stocks in the back half of the year. Is this something thats already priced in or could this be an additional lever to pull . It is not priced in to every stock. Intel and microsoft are in the midst of trying to do these mobile cloud transitions and they are not as well positioned as they want to be. Microsoft is trying to put the shroud at the center where windows had been the center. What this means is the pc business is actually healthier than even intel expected so they have to have more resources to pull in to making that transition. But they still have to make it. This does not mean that consumers are going to ditch their tablets and smartphones this Holiday Season and buy pcs this is specifically businesses. Enterprises. If they continue to subsidize the mobile space it is a great strategy because theyre going to grab mark share, theyre get consumers attached to their product, grabbing market share, then they can raise prices. Want to leave us with a trade or two . On cheese chip stocks, marvel. If you look at some of these nails, look at the move in marvell recently. The adi deal. Look whats going on in microsoft. Not a lot of people are talking about it. This is one of the old tech names as opposed to a name like ibm which to me is rim dead. Thanks for crashing in, guy. Hes coming up with the rest of the fast money crew at 5 00 p. M. Theyll be talking about the huge drop in shares of lewilie lululemon. Stocks sliding and oil rallying today as insurgents take control of more insurgents in iraq. Rumors iran may insert itself into the mess where president obama says he wont take using the u. S. Military off the table. Former u. S. Ambassador to iraq James Jeffrey joins us next. A management shakeup at twitter ats as its chief operating officer steps down. Investors liking the news sending stocks up today. Keep it right here, youre watching cnbc, first in Business Worldwide. Wont rule anything out when it comes to the increasing violence in iraq and what america may do about it. Eamon javers, what year is it . Reporter kelly, look, for a president who campaigned on getting out of iraq and who in fact ended the war in iraq, this is a very strange moment here at the white house because just within the past halfhour or so, we heard that the Vice President had called the iraqi prime minister, nuri al maliki, and told him the United States tans ready to intensify its security operation with iraq. The president very of much leaving the military option on the table. Take a listen to the president. In our consultations with the iraqis, there will be some shortterm immediate things that need to be done militarily, and our National Security team is looking at all the options. Reporter now the white house was quick to clarify that all the options that the president said there doesnt in fact include u. S. Ground troops on the ground in iraq as jay carney, the white house spokesman came out later and saying really what he was talking about here is the possibility of u. S. Air strikes in iraq. Nonetheless, earlier today we heard from the speaker of the house, john boehner, very frustrated with the president and with this white houses leadership in iraq. Take a listen to the speaker. Its not like we havent seen this problem coming for over a year. And it hasnt its not like we havent seen over the last five or six months these terrorists moving in, taking control of western iraq, now theyre taking control of mosul. Theyre 100 miles from baghdad. Whats the president doing . Taking a nap. A real flash of anger, as you can see, the speaker of the house just walking off the podium at the end of his press conference earlier today. Clearly there is a disagreement between capitol hill republicans and the white house. Jay carney responding to the speaker said look, we didnt hear any suggestions from the republican side about what we ought to do here. White house proceeding very cautiously but finds itself, kelly, as you suggest in the unusual position of contemplating the use of military force in iraq to stop this advance by insurgent forces. At the same time it has said one of its signature achievements is ending the you u. S. Combat mission in iraq. For more, lets bring in former u. S. Ambassador to the country, James Jeffrey. Ambassador, it is good to see you. You were there, i believe, from 240 2010 to 2012. After the u. S. Left iraq, there was a sense of having put this conflict behind us. How wrong were we in that assessment . We were pretty right in 2011. We, including president obama, wanted to keep a small number of troops on but the iraqis wouldnt give us the necessary legal immunities. Nonetheless, the country was basically at peace and the Al Qaeda Movement that you see today transferred to isil were nothing more than capable of suicide bombings from time to time. Nonetheless, the iraqis allowed this situation to slip out of control. This has cast over not to iraq but other areas in the region. Youre placing the blame here squarely on the iraqi administration, on nuri al maliki. Basically. Not just maliki, all of the iraqi factions, sunniarabs, see yaarabs who support maliki, the kurds, all perceive their own agendas. People werent ready to make sacrifices for the common cause. Prime minister maliki and his government in particular almost went out of their way to alienate the sunniarabs. This exactly where the isil is finding support to some degree and finding a lack of resistance on the part of the local forces. Michael . What would happen if the iranians actually come in and aid the iraqis in this. Is that going to preempt us from doing anything . Were not going to come in on the side of iran, are we . That would complicate things significantly. I think one of the arguments i used to advocate the air strikes i think one of the reasons the white house is splating it if the iranians come in, we cant do that. Then wed have a shiasunni fight in the mid of the northeast. This is exactly what were trying to avoid. How much help account iranians give the Iraqi Government right now when the insurgents are going to be encircling baghdad. The iranians dont have air power to speak of. Theyre pretty much tied down in syria. They could intervene to protect some of the via cities but they really cant stop isil. Mr. Ambassador, would you recommend for these air strikes manned or Unmanned Aircraft . Oh, absolutely, manned aircraft, Unmanned Aircraft, ac130 gunships. You throw everything you can at them. Obama knows how to do it. Its what they did in libya just a few years ago. That kind of campaign. Mr. Ambassador, is this the point where kurdistan ends up becoming independent . Thats one of the threats. Three threats in front of us are, they encircle baghdad and beseige it, the kurds say i dont want to be part of iraq anymore, and the kurds see shia being slaughtered. The only way to stop these three Game Changers for the entire middle east were talking about as you see it in the oil price changes, our strategic area, is for the americans to come in this a big way, not on the ground but in the air. I understand that would change your diagnosis that this is the fault of the administration for not being more inclusive of the sunnis. U. S. Air pow ker not regain the sunni areas. We only regained them back in 2007 by reaching out to the tribes and doing many things to reconcile the folks there things that maliki has not done and i dont think he can do. However, what we have now is not an issue of securing the sunni areas. What we have is stopping the isio from beseiging baghdad and drawing the iranians in and pushing the kurds out. Thats the game changer. Bottom line, the oil in the south is the bottom line of the trft United States. Bottom line of the interest of the United States is supporting its allies, as proper said in the u. N. In september, preserving the free flow of oil and iraq is important there. And lastly, fighting terror. Believe me, the biggest concentration of terrorists in the world right now is driving around in iraq. Ambassador, well leave it there for now. Thank you for your thoughts this hour. Is there trouble at twitter . The companys chief prafting officer rezinz. Could more Key Executives be heading out the door because of twitters growing pains . Well talk about that next. Dont miss my exclusive interview with legendary investor Julian Robertson. Later on the closing bell. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. We stathat the kid onhe thought the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device. Up to the cloud it goes. Back down it comes sounding better. We break down the walls of creation, and we give music creation for the masses. Oil was the focus of most market watchers today but our Bertha Coombs kept an eye on all the regular movers in the regular session and after hours. Start with lululemons. The plummeting apparelmaker cut its outlook ending the regulation session lower today by a good amount, by more than 7. Looks like 5 . Different story for lands end. Reported better than expected First Quarter profits. For airlines though, with headlines out of iraq, Oil Prices Rose on the escalating environment, american, you a nighted, delta, southwest and jetblue all losing ground. Twitters coo will be filled by others in manage many. Basically they will spread around the duties. Thats the third major shakeup there, third major officer to leave in as many months. The chief operating officer tweeting his resignation writing, goodbye, twitter, its been an amazing ride and i will cherish the memories. For more on whats going on inside the company, kara has been following the story closely. How much of this is an indictment as some are framing it now of his decision to push in to music streaming . Theres a few things that went on. It is not just one thing, it is a lot of different issues from the growth issues, from Product Innovation issues, from even the stock sale issue. It is all just grew together. It is not one thing. It is it doesnt get reduced to that. It just wasnt working out the way it was set up. I wonder what it means from the ceo. Are employees unhappy in the wake of this departure . I think it was a surprise when we posted the story last night that there was trouble. People had a sense of it but not really what was going to happen. Think we sort of surprised them as it was moving so quickly. Ive been watching this for a while, these issues, and i think theyre shaken up but the ceo has to take a hand in this and be in charge of Product Innovation and growth. Joann fortt, shares rallying today, closing up almost 4 . Not sure how much that means. Kara, curious on your take. Twitter has a history of being pretty tumultuous at the top. Do you see any stability coming . How forceful do they have to be now about picking a strategy as far as who is going to head product and sticking with it for maybe a year or longer . Oh, there is a head of product. They just hired him from google. Thats what precipitated a lot of this. Thats what im saying, theyll have to stick with him now for a while. I hope he is there to say. There is never a dull moment at twitter. Good stuff for me, i guess. But theyve got to solidify whats going on. A lot of these companies go public perhaps a little more theyre mature as the Management Structure. By the way, if the Management Structure doesnt work in changing it, it is not the worst thing in the world. Do you think maybe the reason hes gone is he promised the number would double . The underlying question is, how do they get more users . Others have done it. Number ran up to 500 million rather quickly. There are new ways, making it interesting for people, having a product thats easier to use for consumers. They have a lot of usage. It is very useful for people who use it. It is just making people understand why it is useful when there are so many other apps out there that do similar things. They are having trouble monetizing. That, too. I love twitter because it is free. So i dont know how theyre monetizing the ad growth. I think they do well about getting possibilities to advertisers and thinking up good things. They did the nielsen tv rating. The question is can they get the growth going, but they still need the growth. It goes hand in hand. They did okay on the sales part of it. Theyve got to really make twitter a mustuse app for people every day. Bill, do you tweet . I dont tweet but it is just great that he tweets his resignation. Im glad twitter wasnt around when i was in the nfl. I can imagine Bill Parcells tweeting that i had been cut. Kara . Facebook has a growth team. They focus on it quite a bit. Mark zuckerberg attends those meetings. Does twitter need the equivalent, not just one person but a group, a brain trust, people who really know how to think about growth . I think one of the issues with facebook is a product person is running that company. Thats just the way it is. You always get better results if the person who created the product is actually running the company. He has a very good coo structure. Thats working. Cheryl shaandberg runs the business part. Hes not interested in it. Thats a really important thing. I think dick and some others and this new product exec have to really Work Together to figure out ways to get there and bring in team members like adam baeme and some others. The question is can they get regular people to think of twitter on a daily use basis, even though it is enormously useful and interesting. Whats a regular person . Like the football guy. I dont know. Every journalist i know uses twitter and loves it. You mean nonjournalists . Yeah. Why is that so useful . Make it a daily habit. Everybody needs some daily habits. Its hard. It is all over the place. Twitter is very pervasive in our culture so how can we get more people to use it and sign up for it. Kara, great story. Really appreciate your time. The bulls going cold for a second straight day. Is this pullback heating up . Cnbc will get you the hot list right after this. vo rush hour around here starts at 6 30 a. M. On the nose. But for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. That corporate trial by fire when every slacker gets his due. And yet, theres someone around the office who hasnt had a Performance Review in a while. Someone whose poor performance is slowing down the entire organization. Im looking at you phone company dsl. Check your speed. See how fast your internet can be. Switch now and add voice and tv for 34. 90. Comcast business built for business. Welcome back. Lets start with Bertha Coombs and another market flash. Check out the british pound spiking this after bank of England Governor Mark carney said rates in the uk could rise sooner than investors expect. Its one of the clearest signals yet the boe is closer to tightening policy. Pound currently trading at threeweek highs. Ironically as the eurozone is going the other way. Their housing market, by the way, also going the other way. Thats heating you up. Thats probably one of the reasons why were seeing more concern from policymakers. Iraq is heating up global tensions and oil prices. Is it burning up our cnbc hot list . C New York Stock Exchange editor Allen Wastler joins us. Whats on top of the minds today . You said it, iraq. Its been burning up our website all day long. Right now were leading with the piece by john harwood out of d. C. He laid it out. We said john, can you wrap it up . He said sure, i can wrap it up. Its on the site right now. Hes basically laying out the problem for obama in this. Obama who made all these Campaign Promises about getting us out of iraq now faces when does it hit the point of instability that it becomes an economic threat to the United States and the United States maybe has to get involved. Excellent analysis by john harwood. Now i told you about the wise man effect whenever we have complicated days like this. Right now were seeing people dive into our exclusive interview with art cashin where art is talking about what the market is looking at out of the whole iraq situation. Obviously oil but he is also talking about the runon effect on gold and on treasuries. He also had a little side note about how tomorrow is friday the 13th and a full moon and that maybe traders want to bring their lucky rabbits foot. Thats art being art. Finally our third one is one of the sad stories that we kind of feel awkward doing but you sort of have to do it. It is about the new wave of products that are hitting in the wake of all these School Shootings weve had. Bulletproof blankets for kids, bulletproof backpacks. It is actually beginning to be a thriving cottage industry, im sorry to say. We took a look at what products are out there. And the arguments for and against this whole kind of thing. Weird story. People are reading it and people are actually interested. Those are my three for you. Alan, thank you. Coming up, my interview with the father of the hedge fund industry, Julian Robertson. What is the best run company in the world today . I would say google is one. Julian robertson explaining why he believes that when we come right back. What can your fidelity greenline do for you . Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Seeing the world in reverse, and i loved every minute of it. But then you grow up and theres no going back. But its okay, its just a new kind of adventure. And really, who wants to look backwards when you can look forward . Legendary investor Julian Robertson is known for his stock picking abilities and even his socalled tiger cubs. These are the more than 30 hedge fund sensations hes created in the market today. I sat down with the Tiger Management founder earlier. He pinpointed his favorite stocks and, get this, he also told me who he thinks is the greatest investor alive today. Why the belief in google from here . Why this company . Is it eric schmidt . Its the fact that the company has a moat around it that is so wide, no one can breach it. And i think it is developing new devices at all times. People arent aware exactly where it will ever stop. Im a big fan of google and i think google owns 20 of uber. No one ever thinks of google when they jump in to an uber. But i think it sort of shows the advances they can make in this automatic type machine economy that we will eventually end up with. So do you use uber . Oh, yes. Really. How often . Well, whenever i cant get a cab. So Julian Robertson has a problem getting a cab in this city. Which is fairly often. So uber is worth somewhere in the range of 17 billion to 18 billion, and since that latest round of funding was announced there has been wide disagreement over whether thats too high a price or valuation or not for uber. Would you invest with uber . I think uber is a very Interesting Company and let me assure you, i would invest at twice the price that google paid for their first shares. Their first shares in uber. Yeah. What about a name like gilead . Well, i love gilead. I think it is fabulous. It is a marvelous Technology Company with in the drug area in that they really have a cure for hepatitis c. Have some wonderful aids drugs. A lot of anticancer stuff on the way. Theyre showing a great ability to buy companies at the right price. Theyre going to be inundated with cash from the profits on the hepatitis c drug. And in the past theyve done a wonderful job with handling that cash. I think gilead is really pharmaceutical steal. Google has its famous motto, dont be evil. Do you think valiant pharmaceutical is an evil company in the sense that detractors say what it does is buy up pharmaceutical companies, strict them of the research and development in order to increase profits. And if everybody ran like that in the pharma or Health Care Sector we wouldnt have any future for this important industry. I think the valuee acheant p would say if everyone ran wild with research as some of the Big Companies do, they whether be taken over by the valeants and people like that in the future. What is the best run company in the world today. I would say google is one of them. Really. Under what criteria . Well, under the criteria of intelligent people at the top doing the right things. Who do you think is the greatest investor alive today . The man i respect the most in the business, and hes in the hedge fund business, is probably stan druckenmiller. I think hes so up on things and a fantastic investor. Theres actually more. Head over to cnbc. Com to catch the rest of the interview with Julian Robertson. Choice words for bill de blasio. He hits on a couple of other hotbutton issues. Great interview, kelly. Cant believe he has trouble getting a cab. Stocks taking a hit for finisar. The stock currently trading down there. Looks like over 9 . Back to you. Thank you. An industry on edge with violence spilling all over iraqs oil fields, including those owned by shell and exxonmobil may be in danger of being taken over by radicals. Tomorrow on closing bell, we get ready for the Season Finale of hbos game of thrones. The company is throwing out special products for the tv event. 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. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better. With millions of reviews, trwith secure wifie for your business. It also comes with public wifi for your customers. Not so with internet from the phone company. I would email the phone company to inquire as to why they have shortchanged these customers. But that would require wifi. Switch to comcast Business Internet and get two Wifi Networks included. Comcast business built for business. Welcome back. Heres a look at oil prices. Today spiking on tensions in iraq. Crude hitting its highest levels in fact since september. Dennis gartman was long wti this morning but that changed as news developed. Where do you stand and where do you think events will stand from here . First of all, kelly, i was actually long wti and short of brent coming in to it morning which was characteristically a bearish sort of trade. But the news coming out overnight of what had happened in mosul and tikrit had me go to the sidelines. I said ive got the wrong trade on at this point. Sometimes the best trade that you can make is the trade that gets you out of a jam and pulling the trigger and saying i want to get out of here is exactly the right course of action. I didnt have the timerity or courage to take the bullet posture. But if im quasi bearish of something and come to cover it, i dont turnbullish for at least 24 hours. Nonetheless, circumstances that prevail, an ugly civil war that i think, sadly, is going to get worse between shia and sunni in what is, for all intents and purposes, the northern part of kurdistan is going to get much worse. These things tend not to resolve themselves nicely or resolve themselves in a swift circumstance and the market is concerned that the amount of crude oil we hoped had been coming out of iraq may be stopped completely and hence if youre european, you have got a problem because you are exposed to middle eastern crude oil. We have been lucky and ended most of our exposure to middle eastern crude. If youre germany, france, portugal, you have an exposure to whats going on in brent and its going to get worse. I wonder if there are people saying well maybe here in the u. S. We can try to keep the price around the levels where it is today. Obviously if it goes higher it could be its own break as demand goes away. Who knows. Maybe the price shoots significantly higher from here. It wasnt that long ago we had brent trading over 20. I would find it difficult we could get there again. But i dont find it impossible. If this circumstance prevails as i fear that it might, you could do that again and take it to 10 to 15 premium and im going to tell myself tonight when i get back into the office, any time if we saw 50 or 60 cent break in brent relative to wti, im going to be a buyer and a seller of wti. Bid for gold, maybe even a bid for treasuries here, was there Something Else happening in the market which will ov overwell hmm this. Let me read you. Quote, theres already great speculation about the exact timing of the first rate hike referring to the uk. It could happen sooner than markets expect. Thats effectively hitting the gong. Hes following whats going on overnight and with the reserve bank of new zealand. Carney was expected to say he was going to hold rates steady. This is a bit of a surprise. It makes me happy. I went home long of british bound sterling and short of yen. So my sterling side of the trade looks good at this point. Its beneficial to sterling. Probably going to be detrimental to the british stock market and bond market but clearly its supplemental to the british pound sterling. Last thing, what does it do to the u. S. Dollar . Well, it probably means that the well obviously, in the past 15, 20 minutes we seen the dollar get weak. It gives the monetary authorities here in the United States a freer hand to tighten Monetary Policy swiftly than we might have otherwise. Okay. Not going to be taken well by the stock market but will be taken reasonably well for the dollar relative to the euro for the dollar relative to the yen. Thank you. Dennis garmin. Up next, the panel is getting an up and close look of a rare and pretty expensive whiskey. Investing insights from a whiskey master after this. Here at optionsxpress our clients really seem to appreciate our powerful, easytouse platform. No,thank you. We know youre always looking for the best fill price. 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For those of you searching for an investment. Nicholas joins us now, ceo of the whiskey dog. Welcome, how much is this little sip of the whiskey thats in the bottle . The bottle is worth 7,000. This bottle . 7,000 for the bottle. Be careful. Buy the glass if you were to buy this in the bar. Might cost up to 850. Have you tried this yet . No. Were waiting for you. Cheers. Well have to please dont cry as i down probably 100 worth of whiskey right here. Why is it so expensive. Wow. Some of the things that drive whiskeys and why whiskey has become such a commodity is the fact that this is only one of 133 bottles available in the world. There are only 28 bottles coming to the usa and that makes it very rare. Individually numbered. Hand signed. And part of a collection. The first bottle was a 1970 which was released last year. This is the second bottle. And it will be a trio of whiskeys and much more sought after. It has no sharpness. So smooth. Sipping a whiskey like this is like sliding on a super bowl ring. Is this a legitimate investment though . If i were sitting here as vanguard, would i recommend this to the investor . What do you think, michael . Ening i dont know the jury is out. Is that because theres no way to value it . Or do you think this will be worth more in ten years . Time will prove its value. Well wait. If youre looking to invest in whiskey, be patient. Whiskeys are not going to grow overnight. But if youre patient to wait 7 to 10 years, it could easily go up to 25,000, 35,000, and 45,000 and we have seen that happen. Would it be worth more if you left it in the cast . No. This is in the cast. If you were to leave it longer in oak, you would end up spoiling the quality of the whiskey. What we were talking about is how smooth and elegant it is. These because the whiskey makers choosing it peak of maturitmatu. Right when you think it will perform at its best. Im a value investor. Ill give you 3,000 for the bottle. Like i said, the 28 bottles are coming. There are already 50 people that have a bottle of this and theyre going to be fighting over it. I was going to say if Interest Rates are raised in the uk is that the end of the whiskey boom . Are you worried about that. If there was a potential for scotland to be independent, it would influence the whiskey industry as a whole. Im not a politician so i dont want to get involved. I dont know. You make a good whiskey. Thank you so much for being here. Thanks. Now fast money with melissa lee. Melissa, i dont know if you guys can top this. Probably not. Just kidding. We have a great show. Im going to spare you all the yoga puns or downer facing dog days. We have got an analyst who downgraded lululemon today. But he didnt rate at a cell rating for one reason. Well discuss the possibility of who could buy it. Over the you guys. Thanks. Fast money starts right now. Live from new york citys time square. An ugly day on wall street but good news on intel, sending shares higher. Get you those details coming up. But the return of the risk of market. Increased violence in iraq. The ten year yield following below 2. 5 . And stocks down. We have not seen this, dan,