Transcripts For CNBC Closing Bell 20140923

For the dow in three months. We have to stay tuned. Seems like gas heading below 30 for the country, air strikes bumping the price back up. The latest on u. S. Military action against isis and al qaeda and hear from a pro if gas prices shoot up like a rocket after falling like a feather. Although ill say, you know, price of oil is up sos the price of gold and not a whole lot. Oh, look at that. Looking at vitd owe to talk about. When is a plus a minus . Well, some would say talking about the iphone 6 plus. There have been those complaints that it is simply too big. But follow me on this. If it is, why does apple stock keep going to the plus side . Were going to have the pluses and minuses of the iphone 6 plus. And i know youre nonplussed about all that, arent you . Listen. We saw the device on friday. I felt it was little bit difficult to whatever. Well see how it goes. It is large. Its about more than just how many apple sells on the first weekend. It is about how to continue to dominance of this product category after a decade that they have had. Clearly its very popular. But the thing i hear discussed most often is the size. Not the fee churls inside. Correct. Thats been the headline. Thats coming up. Whether it will start to weigh on apple shares becoming clear whether people have issues with it or not. Women with smaller hands. That sort of thing all straight ahead. With the dow down 85, lets get to the closing bell exchange. Joe bell with us. Kimberly foss. Ron wiener. Steven kroll and rick santelli, as well. Kim, this selloff, i mean most of the folks on our panel today share your view of the market. Short term, waiting for a pullback. Longer term, still bullish on the market. Do you think were going to see much of a selloff at this point . What do you think is going on at this point . Well, you know, the s p is up 200 since 2009. Up another 8 this year alone. Yeah. I mean, i think the market is in somewhat of a consolidation phase and looking for signs to pull back a lit built so that we can grow further so i wouldnt be surprised if we did see more consolidation and i like that and something of a somewhat healthy position for the market. Doing that, were actually intentionally allocating to undervalued Asset Classes to create wealth for our clients. Rick, listen. Inflation expectations as you well know dropping by some measures lower than when the fed in the past embarked on quantitative easing. I know we are talking about it ending it, an exit. What happens if Inflation Expectations keep dropping . Do you think qe4 is out of the question if the rest of the Financial Markets dont get worse . We are so rote on this. Inflation is down, we do this. Is anybody asked a question . Why are prices stubborn . Why are prices going up . Maybe Central Banks ought to decide if they really want higher inflation, first of all, what keeps it from moving higher . Is it potentially the fact that theyve interacted in so many areas in the marketplace and theres so many areas of the globe that just arent competitive and part of the healing process, preventing something that needs to occur. Im not playing the cat and mouse game with Inflation Expectations. Those looking for traditional inflation, look at reserves. Thats where its hiding out. And yes, i thought we would have more of it. I thought not in my wildest dreams would the plans take six years. Yeah. No. Understood. I think a lot of people the fed included expected to see more inflation now than we have so i think its a fascinating question. What happens if stocks are rising, the economys growing quit playing this game, kelly. Think about it this way. If people make more money and have a healthy economy, prices will be going up. Not what we have. Keep applying the same safl and think the scabs going to turn out different. Right. What do you think, ron . I mean, you know, it would seem that the if sedfed is on a time and janet yellen said its strategy driven and on schedule to end quantitative easing next month. Should they at this point . Two things first. I agree may be a pullback as you said at the top of the show but maybe a 10 correction. If you cant time the markets, you cant time a 10 window. Were in but selectively on the Interest Rate levels. Theyre fair. They are what they are. Theres nothing we can do about it. What you got to do is just stay in the market. We have a strategy where we just stagger individual bonds for 75 of the portfolios. We have a yield of maturity we know. The rest of it is strategic. With goldman this morning going over the fixed income strategy and mobile. They dont know what to do but they have plans. Theyll move if this goes this way, that goes that way. Great. 25 of the portfolio to strategists. See you later. Not losing sleep this time around in. No. Steve, you were saying last time around i think had you on and people talking about higher rates, the 10year going to 225. Do you feel that way . Are you worried . Do you think anybody should be worried about the draw of Inflation Expectations . Two things. Number one, august 14th, we said we thought the market would go through a summer correction and the head traders indicated on the ipo of alibaba the market will be evident to other people we have been in a correction we have been in for two months. I believe Interest Rates stay down longer. We have a whiff of deflation, not inflation which is going to last probably three or four years continuing to deleverage the economy and the foreign industriy economies try to recover but having real trouble. As we know in the last year or two, we havent had a 10 move, pullback or correction we would call it in technical terms. Because wed get a 5 pullback and then people move back in and buy that at that point. Steve, do you think we get more this time . The s the appetite for risk starting to taper if you want to use that term here . Im doing this for 44 years and 37 5 to 8 corrections. We can get one. The good news is probably wont be 10 . Probably more like 5 or 7 . Some of the stocks out there as most of the managers will know are down already. Its just now the average that is are getting into the sink as you can see with today. But i think as long as rates stay low which i believe they will, thats going to put a floor on the market and then secondly, where else in the world will you put your money . So i just think that the u. S. Is best place in a tough environment and the moneys going to come here no matter what. All right. Bill, what about you . 1984 on the s p today. The closing high is 2011. Do you think we go back towards new highs before the end of the year or above that . How much further does the market have to go . Yeah. Definitely do. I think in the short term, we could be in for headwinds. About three weeks ago we reached that round number on the s p 500. Underneath the surface, we have seen some deterioration. Especially from the energy names, commodity names as the dollar strengthened. We saw weakness in that sideways consolidation. Now we are seeing the major Market Indices follow up with that weakness we saw under the surface. I look for a 1950 area. Sort of a defining area of this upward trend we have been in for a couple of years. The characteristic of the bull market continued to be the 3 to 5 pullbacks and the spikes in fear. A lot of hedges and i think right now the sentiment continues to support these modest pulbacks. You wouldnt see much of a pullback beyond that 5 to 6 here. Kim, you are looking accumulating what you consider to be undervalued investments right now. You want to give us a for instance . Well, you know, as the markets pull back in the small cap arena and small cap funds, we are adding money to those and committing those to those funds. Were pretty much fund investors, not individual stocks but in our value, large value side, we are adding to exxon and at t. Some good, strong, dividend players to be paid while youre playing in the market, the. Steve, what are the favorite names here . We like aig on a research basis. I like talisman energy. Some stocks corrected. Going back to aig, the stock sold at 1,200 under the great leadership of Hank Greenberg and now 65 of that shell of a company and the stock not at 55 but 2. 80. We think the stock can go with the reverse and the 55 stock we think can go to 100. Theres plenty of attractive names but as i said corrections do happen. Theyre not going to be i dont think over 10 . Probably like 7 and have the list of names to buy on dips. We micron technology. A long list of names we like and have some patience. Ron, same question to you, whens on the Shopping List . Well, were mostly u. S. Large cap u. S. For 93 of our portfolio. 80 to 93 depending on the portfolio. In the u. S. , home depots, black and decker. Mlps. Mostly u. S. , 99 u. S. We dont have to worry about foreign markets. To play the emerging markets, less than 1 . Thats the pepsico, apple, google. You can play the emerging markets, stay right here at home. Not have to deal with currencies or politics for the most part. And as long as russia behaves, we are pretty good. Again, you cant time a 7 , 8 market. Were not doing it. I didnt hear anybody mention alibaba. Anybody buying that . Down from that high it hit on friday of 99. 70. Ill give it a longterm buy. Hows that . How longterm . Forever. This is a great stock. We dont know the right price to enter. I think thats going to be a terrific play for a long time. Eventually. All right. Bill, one last thing. We agree. We are in it in 30, 60, 90 days out and add to the portfolio, as well. So are you just going timewise, kim . Or waiting for a price to hit . Yeah. Because, you know, on average, you know, the ipos have a runup and then pull back. Over 12,500 ipos since 1960, 16 average return. Alibaba up 38 and waiting until that, you know, as that comes back and then add to the portfolio and probably like 60, 90 days out. Steve, what were you going to say . Not on alibaba. I was just going back to talk a little bit about the dollar and the bond market. Very quickly. The dollars up so much that bonds this year and for people that are outside United States the bonds have been one of the best returns out there. Right. As rick reminded us. Thats for sure. Strong performance again as we head through the month of september. At least for fixed income. Thank you, everybody, for now. Appreciate it. Keep an eye on equities here as the dow looking potentially to have the first back to back triple digit declines in several months. The s p off half a percent an the nasdaq off 15. Lying in wait on alibaba. Waiting for the time structure or the price. Are they data dependent, bill . Calendar dependent. Exactly. What about yahoo . The shares under pressure since alibaba on friday although theyre up a bit today. Even as alibaba continues lower. So find out why so many investors are fretting about the future of yahoo now that alibaba is out from under it. Also ahead, is iphone 6 plus too big . Pros will debate if the ceo tim cook made a plussized mistake with the bigger iphone. Much more straight ahead. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back. Heres where we are looking across markets. Red arrows again. Another day of underperformance from the russell. Down to the level of 1120. It is the s p added. Dow giving up 90 points with some pressure across the board again. Cade rogers covering the movers for us. This is the tax inversion movers. The Treasury Department is making changes Effective Immediately to make inversions less profitable and more difficult casting a dark cloud over deal stocks today. Shares are all lower on the news. Cf Industries Holdings is best performing today in preliminary merger talks with yara saying theres no guarantee any transaction would result and lastly, shares of alibaba falling for the second consecutive trading day and yahoo thats the real mover here. Since the debut last friday, yahoo stock price dropped almost 10 . Back to you. Great stuff. Thank you very much. Many paying close attention to yahoo s stock. Should you sign up or sign out . We have two guys, different opinions on that. We bring in andrew keen. He likes this stock right now. Max wolf does not. Max, you are among those who worry longer term about yahoo as an ongoing enterprise, arent you . Absolutely. The stock is undervalued as a trade and trading a huge discount to its cash. Yahoo japan stake and alibaba stake. That being said, that is company in good hands thats watched other people both feed off its traditional revenue stream and display advertising and position to make more money off streaming video. Its own base than it has and having trouble keeping pace with other people, who are planning and executing how to monetize your audience better than you, its hard to be super sanguine on a longterm basis. Andrew, make the case for yahoo is it predicated on being a standloan company . If you look at it, simple math. What happened was the people did not get aloe case for alibaba enough and bought yahoo . Looking at alibaba valued, it is 216 billion. Yahoo is 16 of that. So thats taking no value into consideration for yahoo japan or yahoo in the United States so lets they alibaba if youre saying that yahoo will goes down in value, alibaba will go down in value. I think they have a floor at 38. Going down 20 at most, yahoo has 3. 5 to the downside and should be supportive and valuing yahoo in the United States and japan at 0. They have a 1. 15 in earnings per share. I dont understand why the company is trading at such a discount. I think this is a huge activist play. Dont you think its what max was talking about, just this fear that they just dont have a Business Model that can compete with other businesses that have been innovating where yahoo is falling behind . They have revenue. They have Brand Recognition and a 1. 15 of earnings. Taking out the alibaba portion of it, thats valued at 39 a share for just yahoo . The value of the rest of the company at zero. Why what if they brought someone in. An activist play. If alibaba doesnt move at all, yahoo is valued 39 just from the alibaba cash to have and how much their stake is worth. If youre taking a short position in yahoo you have to say alibaba goes down to the ipo price. Are you surprised, max, yahoo is trading at 39 here . Yeah. I think the market is making a mistake. It is a winner all day as a trade. Giving yahoo intrinsic a valuation thats a mistake. Its a good trade. The question is, is it a good investment not trading around a market capitalization, market cap error. Its a good trade. Long term, we like marissa a lot and spent three or four years watching other people monetize its content and user base better than they do and four years is an eternity. But youre also taking a bearish stance on something and youre saying that the companys valued at a negative. An youre taking a bearish stance on a longer term. You have to be bearish on alibaba to be correct. Were standing by our comfort zone with alibaba in the low 70s to mid70s. We think thats a great company, too. But got a little bit ahead of itself on opening day and happens to the best of companies. If alibaba goes down to low 70s, the yahoo has 3 to the downside and also valuing yahoo japan at zero. We distinguish between good trade and investment. A trade will be over when the market recognizes the company doesnt have an intrinsic short term value and investment usually is a time horizon of more than two or three days. What is your target on yahoo then . So our price target on yahoo is probably high 40s. Okay. And thats where i think its headed. Okay. You agree on that part. Short term. Longer term quickly here, max. They have a huge cash theyre getting from the investment in alibaba. The ipo. There ice talk they could go out and make an acquisition. Very specific talk that maybe they hook up with ool some point. The company as we know it today could change down the road drastical cli, couldnt it . Sure. Comcast, more interesting for an over the top play. Yahoo is sixth most visited site in the world a lot of months. We have been saying a long time and we like marissa and think shes a great leader but if you sit back and watch other people monetize your brand name and your content and strip away lots of your display advertising, you cant really get away with that forever. Thats the longterm problem. We dont see any concrete steps to take lots of great brand ek the i to take tumblr and do anything with it. Andrew, are you saying that the upside that you see here really is only the low 40s . We are at 39. I think its headed straight to 45 within the next couple of months and obviously underpriced right now. People bought yahoo softbank and down 10 since friday, as well. People realizing. Shaking a lot of weak players out here. I think alibaba has a floor at 68 putting yahoo 3 lower and got a value and yahoo japan, make a shakeup but headed to 45. All right. Guys, good see you both. Thank you for your thoughts today. Thank you. Appreciate it. Heading toward the close, 36 minutes left in the trading session. The dow is down 97 points. Coming up, wall street veteran Joel Greenblatt tells us how hes putting clients money to work. Dont miss it coming up. Up next, do you live in a buyers market or a sellers market . Real estate here. Dia diana o lick knows and will tell us all straight ahead. I took l stuffed up. Nyquil cold and flu liquid gels dont unstuff your nose. Really . Alkaseltzer plus night rushes relief to eight symptoms of a full blown cold including your stuffy nose. breath of relief oh, what a relief it is. Thanks. Anytime. The smartest or nothing. Anytime. The quietest or nothing. The sleekest. Sexiest,. Baddest,. Safest,. Tightest,. Quickest,. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. The best or nothing. So in real estate, do you live in a buyers market or sellers market . The answer goes back to oldest mantra in real estate. Location, location, location. Diana olick has the lists. They contain surprises, dont they, die yeana . Reporter they do. The market is cooling off with the temperature. Some markets are great, thank goodness we have a new survey that tells us which are which. So according to zillow, a sellers market is not where home values are rising but one in which homes on the market for a shorter time, price cuts occur less frequently and homes at or above list price. A buyers market where homes stay on the market longer, more price cuts and homes sell for below the list price. Drum roll. The top sellers markets, no shock here. One and two are in california. Interesting that riverside, california, and las vegas, are still up there in the top ten. These are markets that had huge inventories of distressed homes and investors plowed through and wiped them out. As for the top buyers markets, providence, rhode island, takes the top spot and then the middle of the country for the rest. Thats cleveland, milwaukee, chicago, all markets where prices are relatively weak. Demand is relatively low an gives buyers the upper hand. Why do we care about this . Well, the two biggest cohorts who are expected the move in the coming years, the firsttime buyers, younger millennials and the downsizing baby boomers and we need to know who will do better where. If you want the full list, its online. Back the you guys. Diana described you and me. Baby boomers . The millennials moving up some point and the baby boomers. Reporter i got you both covered. I was looking at the map. Well talk about this. Stay with us. While the question of what type of market we are in is complicated theres an issue thats more clear and the impact student debt is having on housing. Yeah. Theres a new study out, a firm that advises Home Builders saying that debt people buy after college has definitely limited this housing recovery. Lets bring in the ceo of red fin and one of the cnbc 50 disrupters, glenn kelman. Welcome. Thank you for having me. We talk about what is it thats plaguing the Housing Market and get different answers depending on whos answering and where they live and so forth. How in your view, what role does debt play in capping the housing recovery right now . Well, its a twoheaded hydra. You have unprecedented levels of student debt and low wage growth and given the fact that people can no longer borrow, 30 , 40 , 50 , nur a situation where they just have to find a way to a get a price break on the home. Debt and wage growth problems are all combining to limit the ability to buy homes. Glenn, all said that, looking at the map, it is stark. The population shifting from the northeast to the southwest. How much further home prices in the northeast might need to correct or what kind of reforms might need to be made for high property taxes, old infrastructure, the kinds of things that are in the way of those who might otherwise say, well, maybe i will take a look at some of these markets. Yeah. Well, i think you are seeing growth come in the center of the country at the expense of the east and the west so if you look at the demographics you will see that cities like denver and dallas, the ones that were cited in the zillow report are growing the fastest and they have low property taxes, they have very high job growth. And they have low property prices and people that used to believe if they stayed long enough in the jobs in boston or new york or for that matter in los angeles or san diego are now moving to dallas, denver and houston because they believe that instead of earning more money they can just get a smaller down payment so the place where were meeting customers in denver and dallas is airport. Relocating from the northeast and the west. Diana, we have made much of the millennials. Maybe theyre ri thinking the american dream, happy to rent. Not looking to buy any time soon but 20somethings and i remember at that age. I wasnt all that hot to go out and buy a house, especially given how Interest Rates were high at that time. Theyre not all that different from the boomers, are they . Reporter well, actually, theyre a lot different than the boomers, bill. Thats what my daughter tells me. Millennials are getting ma y married later and the time horizon is shorter. You might have gotten married in the 20s, theyre married in the 30s, owning a home perhaps 35 to 45 instead of 25 to 60. What about a group that i guess it feeds into the baby boomers. In other words, forget the people moving into homes for the first time, what about those leaving them . What is it thats driving their pattern of Movement Across the country . Looking for the southwest . Theyre looking for just a condo or the amenities that might be more comfortable . What is it this seems to be the Top Priorities in looking for a property at this point . Well, the trend that we see is that people have less bias toward owning a home and a time when as soon as you bought a house, you just entered a different category of American Consumer and own a property for the rest of your life and we see many folks that dont want to deal with the jupkeep and just moving across town to a place managed by someone else, a landlord and a super to keep the place maintained and driving some decline in Home Ownership of the baby boomer generation. They dont want to deal with it. The boomers turned into millennials. Right . Right. You were thinking the same thing. Interestinging stuff. It explains the boom in multifamily here. Thank you both. Thanks for having me. Appreciate it. Thanks, guys. Almost like couldnt we save hassle. You give the kids the house for a while and give it back. You know what i mean . Seems like a lot of effort. As long as that second part happens. No problem. About 30 minutes to go into the close here. Coming off the lows. The dow up 84 and the nasdaq off 8. But still a weak pattern if you would to the activity that we have seen generally in the market today. Coming up, are the obama administrations new rules announced last night aimed at curbing socalled tax inversion deals legal . Theyre much broader than were expected. Well hear from a top tax lawyer coming up. Will europes economic woes stay there or hit Corporate Americas profits . Whats the fed think about this . The pros will talk it out. Europe exporting deflation . When we come back. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Marks coming back. The dow was down 100 starting top of the hour. Now down 71 here. The nasdaq certainly come back. Russell still the laggard today down half a percent at 1122 at this hour. Europe struggling to get back on its feet. Will the issues stay there or make their way to the u. S. . What action will the fed take if thats contagion coming from europe . Joining the conversation, we welcome back gem agodfry and steve liesman. Are you convinced that the economy can go without much more intervention by the ecb or expecting a lot more from mario draghi . The issue is that what wes done is its more words than it is action we need to see more and they want the see the Balance Sheet reach the level it was at in 2012 by purchasing these assetbacked securities but the problem is theyre going to have to expand the Balance Sheet by 54 to get to that level so theyre far too overly confident and what we need to see is straight qe but they have the political issues of a central bank buying, you know, support buying a government bonds and once they have got over there and see some straight form of qe and buying sovereign bonds, thats what we need to see to get the support we need. You need doesnt solve the problem of close integration, incentivize investment and growth back in the region. No. It doesnt do much to help the u. S. , steve, either. Yes. Good wine, good cheese and deflation are part of the scenario. It comes in a couple of forms. One is whats going on with the weaker Economic Growth over there and the form of the strong dollar. Thats something that tends to press down on inflation in the United States and seeing with the Federal Reserve and the statement, they said they were reaching the 2 target and said not so fast. You can divide two kinds of people in this world. Those worried about the excesses of low Interest Rate policy and those who are worried about turning too quickly and a repeat of 1937 in the United States. The latter are those that control the Federal Reserve right now. The dudleys, the yellens of this world. Theyre running the fed and not going to go too fast. In part because what were going to see getting to next round of price reports from the government, are going to be lower prices with whats happening with commodity and oil and europe right now. Do you agree, gemma . We dont live in isolation and if you look at global growth, it is okay but course by course its vastly different. And its true that Central Banks are far more fearful of inflation than deflation and supportive to make sure that it avoids that issue so when youre looking at the u. S. , the concern is corporate profits who are selling to . Thats as an investor what to to with us on. If youre a u. S. Company, buying shares in a u. S. Company selling domestically to the u. S. Is one thing. Selling to europe you have that contagious risk. Real quick. Theres an interesting profit play here thats going to be company by company. Input prices falling sticky Consumer Prices that dont necessarily fall as quickly depending on the market and how global it is. Falling prices did not mean lower profits necessarily. Gemma . Also, youve got to look at currency moves, as well. Earning in one currency and then paying in another you can get the benefit there so thats true. I think the concern, though, is if it translates economically. So if youre talking about falling prices, translating into loss of jobs for falling confidence, et cetera, europe not growing as much as it should be, thats the concern. I agree. It is that link between whats going on in terms of Price Scenario and going on economically to do with consumer demand. A final point, steve, as well. We asked anthony chen about this the other day. Inflation expectations are still dropping. Does that force the feds hand . He said go back to the early 90s. There was a similar backdrop and tightened and everything was okay. Fair comparison . Interesting comparison. I think that given what we talked about earlier, the trepidation, the fear of this fed of going too quickly, that this lets them do that. This lets them hold off on pulling the trigger whereas if europe is cooking right now, the fed would be hiking. And not hiking but much more discussion about a more imminent raising of Interest Rates here in the United States. I just want to say i think theres a 60 probability id say by january ecb does quantitative easing. The longterm takedown not big enough. They need to raise the Balance Sheet. They have done it in the past. People say they have a problem. They have bought sovereign bonds in the secondary market and will do it again. Last word. Quickly. How does the ipo of jimmy choo play into all of this . I was going to say in termses of the fed is they have said theyll be preeminent this and not shocking the market. In terms of jimmy choo, talking about, you know, kicking off using a pun, the ipo market in london, the concern there is that we know the saying. Turnover is vanity. Profits are sanity and cash flow is reality and however much is a growing market, the cash flows declined for three yoors and an interesting one to watch and ask yourself why theyre coming to market for investors to buy opposed to another fashion house. I would be cautious and it is interesting. I thought all is vanity. You sound like youd buy the shoes but not the stock. Well, you know. If i must. I know. I know. Gemma, thank you. Thank you for staying late for us tonight. Steve, thank you. My pleasure. Hes wearing jimmy choos. He is. Dont show me wearing the pumps. Not a good shot. 17 minutes left of the trading session. Here as he said, moving on desperately, with the dow down 65 now. We were down 100. Yes, we were. Next, john harwood in new york and not alone. Matt damon, jack ma and of course bill clinton all speaking out. John will bring us the best of that conference ahead. Also still to come here, investing guru predicts the russell to drop another 6 and down 7 . 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Whenwork with equity experts who work with regional experts who work with Portfolio Management experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Welcome back. Reimagining impact. Thats the theme of the clin don Global Initiative here in new york where leaders from around the world gathering to hash over controversial issues. John harwood is there and joins us with the hee lights of the day. John . Reporter this is a rare event where the president of the United States isnt the principle focus on the day and discussing air strikes in syria because it draws celebrities from all over the world to talk about improving communities from Actor Matt Damon discussing clean water to Alibaba Ceo Jack Ma talking about the rising role of mobile technology. Young people so focus on the mobile phone. That is the opportunity. The world is going to be changed by the mobile phone internet. Mobile technology, country like you guys, helping young people succeed. Helping young people to reach the information. Helping young people to try the new things. Reporter now, of course, given our host, former president bill clinton, not surprising politics came up. He told our becky quick he supports the obama treasurys initiative to curb Corporate Tax inversions. The treasury should do what they can. Its their duty to collect whatever money is owed under american law. If they can find a way to discourage people from moving overseas, they ought to. But the best discouragement is to reform taxes and to give incentives to repatriot now nearly 2 trillion overseas. Reporter president clinton acknowledged he was the last president to oversee a rise in the Corporate Tax rate and now to bring it down to stay competitive with the rest of the world. All right. John harwood, good to see you. Thank you. Midtown manhattan. 12 minutes left. I havent heard or seen art cashin in a little bit. Clearly we have been coming off the lows this last hour and down 77 points on the industrial average right now. Coming up, is the new apple iphone 6 plus giving the ceo a headache . Some say its a big problem. More on that later. But what if you could see more of what you wanted to know . 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. So another down day at the nasdaq in particular. Not as bad as yesterday. But lets get out to the times square base exchange and check in with Morgan Brennan keeping house there. Thats right. 4418 with the nasdaq as we come into the close, if we hit that, thats a fiveweek low for the index. We are down nine points. Two tech names bucking the trend today, facebook up over 1 . On plans to unveil a new advertising platform and apple up more than 1 of iphone 6 news and chinese regulators may be close to approving the device. A different story for retail names like Bed Bath Beyond. Thats tumbling after being downgraded. Also, Ascena Retail group owning lane bryant fell about 15 on weaker than expected earnings and outlook. Content companies sliding. Viacom hitting 52week lows. A different story for gopro up about 5 . Reason a bit unclear, though. Some analysts say as google invests more money in yublt, gopros shift into content creation could be a benefactor. Kelly, back to you. Thank you. We were saying, too, watching alibaba off 3 . Like magic, art cashin showed up and said the bias to close to the upside and a lot of that in the financial stocks. Right now. But be that as it may, the dow down about 86. Coming back in a moment here. Right after the bell, citizens financial, the American Unit of the royal bank of scotland, pricing whens expected to be the second biggest u. S. Bank Public Offering since goldman in 1999. Well bring you citizens offering price the second it hits the tape. You are watching cnbc. What happened . Stress, fun, bad habits kids, now what . Lets build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. Introducing the sleep number bed with sleep iq™ technology. It tracks your sleep and tells you how to adjust for a good, better and an awesome night. The difference . Try adjusting up or down. Youll know cuz sleep iq™ tells you. Only at a sleep number store, mattresses with sleepiq start at just 999. 98 better sleep with sleep number. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. [b ll rings] time and sales data. Splitsecond stats. Its so close to the options floor, youll bust your brainbox. All on thinkorswim, from td ameritrade. Coming up on the last three minutes of trading here. Didnt get to confer with my producer back in angle wood cliffs. Well do this on the fly. Can you do it live here . We started here to show you the major averages and how they traded today. The dow, the nasdaq, russell, hardest hit today. Let me see the dow for today and see how we did. This is like, what . Three consecutive no. Two consecutive down days we have had and thats the first time of consecutive down days for the dow of about triple digit or double digits in about three months here. This is sort of significant at this point. Were down 98 points and heading lower as we speak. The russell, though, has been our focus and it did this technical event, this death cross, the 50day moving average crossing with the 200day moving average as our josh brown pointed out on the Halftime Report today doesnt necessarily mean its going much lower and in fact could signal a move higher for the russell 2000 and down almost another 1 in todays trade. The price of oil finally wti crude you would imagine you get a bump in oil prices. You did get that and well off the highs of the day up about three quarters of a percent. Dan mcmann joins us here. How are you . Doing well. Are you inclined to want to buy the market with the decline here or do you see more coming or what do you think is going on . We talk about a twoday decline as if the market were off 10 . It is an enigmatic market at this point. Bullish indicators are strong. You talk to the common man, they want the know why is the market so high . You have geo political risk. A modest economic past the we near an expansion now. Modest albeit and still bullish. Not that much of a e anythin. I dont feel the economy is that strong. There is thats where the disconnect exists. 100 . There is all this cash in the coffers and starting to see m an activity. You mentioned the death cross in the russell 2000. They dont call it a death cross because its going to go higher but the russell 2000 underperforming for a year as people are chasing the large cap and more mid cap stocks. I dont pass judgment on whether death crosses are valid observations whether the market will go down. People following technical analysis. You have to trade on something. If you dont understand the fundamentals, trade on the technicals. There should be some rough relationship between small caps and bigger caps. They cant diverge that much for that long period of time. I would Say Something has to happen. Mid caps to come up again. I think thats true. Theres a divergence but proving they have been much stronger, thats for sure. Thank you, guys. Were going out on a low of the day. Two consecutive down days of 100 points or more for the dow. Down 112. Now to the second hour of the closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans. A lateday selloff on wall street. Going out with a loss of about 113 points on the Dow Jones Industrial average. The first back to back triple digit declines we have had since june. Nasdaq meanwhile giving up 19. S p down 11 to 1982. And the russell also again the weak link today down almost 1 . Closing at about 1118. Bring in the panel, talk about it. Lots of perspective on this. Carol roth along with our own kate kelly and kevin oleary. Kevin pulcari will join us in a moment. You have to say the price action here doesnt look good generally speaking, kate. We heard financials might be responsible. Citizens financial pricing here. What does it tell us about the sentiment . Im glad you mentioned citizens because i heard demand at the stated price is soft. Theres enthusiasm about the deal. It seems to be the largest bank ipo since Goldman Sachs in the late 90s and remarkable but im told theres enthusiasm but a matter of getting the price level right. In terms of the rest of the markets, you know, i feel like im saying this all year and dont mean to sound like a broken record but a lot of Hedge Fund Investors looking for a significant link in the equities market and feeling its overzealous and may not be long lasting but getting more volatility and cant maintain the levels. Every time theres a downturn, i wonder if thats happening yet. Right. A lot of those people are getting fired. You know . Hedge funds arent getting the money anymore. Absolutely. The s. E. C. Going after them to overstated the performance and effort to juice fees potentially. You know . They could be headed for a world of hurt in terms of regulation. Heres the thing, though. Every time we have had anything thats starting to look like a pullback, doesnt last very listening and the fact we have the underperformers means theres a lot of people waiting on the sidelines for that dip to come back in and so anything that were seeing coming back and you know, kelly, i am the ultimate contrarian here. Any time we see the pullback, i think theres going to be more support to push it back ahead and may see a pullback and cant imagine its a long one and a dire one. Maybe. Going back to alibaba for a moment. I think it feels to people like a lot of great stock ideas are too crowded right now and thats the reason well, thats one of the reasons we saw a clamor for the shares because it was a terrific growth story. People expected a great first day and first year performance and wanted in with great ideas in the stock market and the bond market, as well. Kevin, what do you think about alibaba . Hi, welcome, by the way. Wish you were here. What do you think about alibaba . What about the hangover effect of the market now and are you one of these buyers carol mentioned . No. Im one of those sellers she didnt mention. The way i look at it is this is a highly concentrated positioning. 25 accounts 50 of the aloe case at the 68 price. And nobody got their fill. And now its trading at the upper range of any multiple youd like to apply to it that makes sense so why not take some profits and just wait until it pulls back . I like this stock in the 75 range. I think it will get there over time. Speaking about markets. Three things to pull it down over a long duration. Catastrophic geopolitical risk. Not getting that. Localized isis type stuff and tragic and doesnt seem to affect financial earnings. A collapse in earnings estimates against the estimates of the s p hasnt happened and last is rising Interest Rates not getting that either so this is the pause that refreshes right now. Kevin, you know, speaking of alibaba i took angry calls on friday saying they were stiffed on the allocations. And i wanted to chuckle a little bit. Placing an ipo and management or an underwriter, you would avoid hedge funds if you could. Theyre notorious for taking the quick profits. Maybe some in it with a longer time horizon. If you had sellers, perhaps it didnt float up and open at a lower price than the mid90s. No. The way they were cut back. I think that it actually probably would have been a good thing for them. Right. The Hedge Fund Universe cut back in the last hour. They had allocations. It was remarkable. The big books you talked to slashed and hacked and burned and very unhappy. Whether its an alibaba effect, what your thinking is about citizens, can you tell us what happened at the close with the real move to the downside . Listen. I just think its a little bit of everything. Apathy, the weakness certainly in europe, kind of a hangover of alibaba, just the fact that the market is well ahead of itself once again. Right . The end of qe is here. We know that. Rates arent going up yet. Europe continues to disappoint. Therefore, the market needs to reprice, needs to reset. Right . So here at the end of the day what you had was even though it was the buy on the bell, you kind of had it feels like a flush. I dont think the markets going to start to really crack and just feels like a flush. I think it tests the s p on its 50day moving average at 1975ish. All right. Hold that thought, everybody. Against this oil prices were higher today. The u. S. And the allies launching air strikes against isis militants in syria as well as a new al qaeda splinter group. The government Officials Say were plotting an imminent attack on the west. We have now nbcs reporter in london with the latest on how this all is going. What can you tell us . As well as watch here the Financial Market affect, the impact may be having on the price of oil. Reporter well, the pentagon came out and gave details about that operation saying that along with five arab countries, they participated in a series of strikes hitting about 21 different targets across northern syria. Now, two of those were operations that involved arab allies including saudi arabia, jordan, bahrain and others. But there was one particular side of the operation that was only the United States involved or only had the United States involved and targeted a specific Al Qaeda Group they said planning or in the final stages of an imminent attack against u. S. And western interests. Certainly raising concerns from that perspective about possible attacks or retaliation attacks that were in the works. The focus of the strikes, though, focused on isis militant group inside syria. According to the pentagon, the targets included weapons depots, headquarters, command and control positions belonging to isis and other facilities that may have been used to plan attacks against iraqi and syrian civilians and perhaps be on the borders but the operation itself according to the pentagon was a success. But there are now growing questions as to whether or not this will be enough to degrade isis and to try to give the momentum of the Ongoing Operations inside iraq for the Iraqi Military to retake some of the territory lost in recent months. The u. S. Says this the just the beginning and will continue operations and an issue you were talking about, oil prices and certainly countries, Oil Producing countries like saudi arabia are involved in this ongoing operation and maybe questions of their impact on the global prices. There certainly are. Thank you so much for the update this afternoon. He said, just the beginning. Lets talk more specifically about the impact these air strikes are having and will have on oil prices. All this at a time when gas prices heading below 3 a gallon at the pump. Joining us is kent moor editor of money and oil. A panel still here along with kenny. Listen, ken. So just first of all with regard to oil prices, is this the end of the declines we had seen in recent weeks or no . Hi, kelly. Welcome. I think so. I think we are going to see a gradual rise. Theres not anything spectacular here unless the situation deteriorates considerably on the ground in iraq. I think we have seen the downside. Im surprised, ken. Its kate kelly. We have seen a move in the markets today because theyve become so complacent and im told by other analysts it is very much a supply story in the u. S. Yet today we did see a rise in the price of wti oil and slint decline in brent and you have to attribute that to the situation in the middle east, dont you and the position we are in . Oh, absolutely. I think the uncertainty factor is back and whenever uncertainty comes into the market it will rise prices a bit enyou have to understand were in the time of the year when traditional prices of crude do go down and we have had a prevailing attitude of oil traders that the Current Crisis level is not sustainable with a big impact on prices. Those two things may now be reappraised given what occurred beginning last evening. Ken, this is carol roth. In terms of the impact on the consumer theres often a disconnect of the market and what the consumer sees going to buy a gallon of gasoline. Do you expect any change materially from the consumer standpoint buying gas at the pump this year . I dont think the price is going to rise very quickly very soon. But we do have to remember that the United States is now the largest exporter of oil products in the world. We now participate on the refinery side more in terms of the price differentials worldwide than we ever had and that is likely to have an impact on domestic pricing. Right. And i just like to know where does this leave us . Kenny, you guys feel free to weigh in here. Where does it leave us in terms of the Bigger Picture for the markets . Well, i actually think that were where it leaves us in the market in terms of overall market and the Energy Market i think his points are clear, right . We are one of the biggest producers and exporters and unless the situation on the other side of the world really, really imploeds and gets out of control, i think you see a little uptick and then stabilize once again and so im not looking for i dont think theyre going to take off rocket higher or necessarily going to come in much more. I think right sheer about where its going to churn for a bit. One interesting point we heard recently from Goldman Sachs, the chief commodities analyst, effectively we are Energy Independent here in the u. S. Between the rise of production of crude oil here and the increasing reliance of natural gas, efficiency of shale drilling, so thats kind of something to keep in mind worrying about the suppliers overseas. Kevin, the last word here before we go. A takeaway from all of this. This imagery of basically localized war five years ago would have oil at 135. This is not a sector to be long right now. Its overcapacity in the u. S. Is noted. Gas prices so low. Id underweight it for two quarters. If you cant get a war to get prices up, its not good for the sector. I worry about that part of the country and benefits from this energy boom and perhaps insulated from it. Well leave it there for now. Thanks, everybody. Kenny, thank you, as well. Joining us off the trading floor. Cracking down on tax inversions. New rules making it tough to relocate overseas to avoid u. S. Taxes but can the white house side step congress with the authority to make the tax laws . Legal experts will have their say next. And is bigger really bet we are the iphone 6 plus . Coming up, somebody here saying apple missed the market on this one calling it a big mistake. Literally. We want to know if you think its too big. Your chance to vote is straight ahead. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back. The white house taking steps to crack down on companies avoided taxes. What did it need that it didnt need congress . Hi there. Reporter hey, kelly. One thing they couldnt do here is ban inversions altogether. They said that they had to take the targeted regulatory measures because it would require an act of congress to ban inversions llg altogether. Theres been criticism of effectively stopping some deals in the middle of the tracks and unfair to the Companies Involved announcing deals and havent completed them yet since the Effective Date was yesterday. Treasury defensive on the point today. Heres what treasury official told me earlier today on this question says it is not at all urn usual for the treasure. s actions to impact deals closed or after the date of action. Trying to shut the window on taxpayers ability to engage in these actions. They said as they talk about debating taking action, every company rushes to do it before the rule changed and this way they say is fair. A lot of Companies Might have their noses out of joint today feeling they got a raw deal here. People wondering about the legality of all of it. Thank you. Yep. The changes leave companies wondering if inversion will hold up legally, constitutionally and for that lets welcome tom ajavu with the panel. Tom, welcome. Thank you. First to you, this idea of using the Treasury Department effectively to as an instrument of writing or changing the tax code and Something Congress should be doing. Yes. Do you expect lawsuits on this . Can the u. S. Government change the laws . Several things. Can they do what theyre doing . Thats open to debate. I think some people believe, yes. They were given Regulatory Authority in the late 1960s and the treasury given the authority to define equity, debt and make other definitions as theyre doing right now but the next question is, you know, will they be stopped . Can they be sued . Yeah, of course. There are lawsuits against obamacare right now and can be lawsuits against this change. I think the real question there would be, though, whos going to step up and challenge this . Which companys in the forefront and say we think its okay not to pay taxes. I suspect this is more of an investor side of things a big activist investor or somebody quietly not commanding as much attention but saying, look, we think we get a bad deal and thinking of companies saying we are not acting in shareholder interest if we dont pursue optimal sure. Hedge funds and mutual funds not shy about using litigation to achieve the results they want. Speaking of pending cases, there are numerous investors this sued the treasury over fannie and freddie so theres plenty of precedent of it. The only caveat i would make an im curious for carols view, this change today has been very well telegraphed. Right . I dont know if that gives some cover to the government and saying, look, we have been warning you for months. We were going to do something. You entered a deal. Lets show shares for some of these companies. The fact im thinking of mylan and pharmaceutical names sold off on the back of the news. Lets put the gross overstepping of bounds aside and talk about the political theater behind it. The only reason the companies are looking to do inversions is because we have a tax code that is archaic, out of date and noncompetitive. In reality, going after the companies they estimate this is going to quote unquote raise 2 billion a year . Theyre messing around on this or 2 billion a year . This is peanuts. Complete window dressing and completely maddening. This is a question and posed it to a tax lawyer friend recently. Only you, kate. This is what i do on my saturday night. Good party. What about the debate that says if youre a large corporation, innovative, using the loopholes so that your tax rate is not as high as it is on paper. Nothing illegal is going on here. This is Just Creative people reading the tax code and working around them and now the government i think pretty abruptly stopping it. I can understand why they want to bring more revenue here. Maybe a better way to do it and surprised at the quickness of what it was done. Telegraphed a bit and no opportunity for the opportunity to comment. Companies to have a say. For business to weigh in. Political window dressing ahead of the midterms and the end of the day, the accountants find another loophole and another way around this. The era of coalition building, grand bargains or anything bipartisan is over at least for the moment. Kevin, im sorry. We have to go. I would like and i know its ironic. Youre canadian. Has the constitution been thrown out the window . Do principles matter . Seems to be a theme here developing with the obama administration. I have made out of my money out of boston. Created the wealth in the american economy. The icon of capitalism. This administration is focusing on something thats insane. Our companies arent competitive anymore. We should fix that. I was talking to a swiss banker last week said hes not spending time to worry about American Business anymore. Hes working in asia and india and south america where the government still loves capitalism. How insane is that comment . I dont know. Theres plenty of people in the u. S. Saying, well, fine, take your business elsewhere. To that. Well leave it there for now. We have to pick up the discussion, tom, please come become. Thank you. As we follow this. We have an earnings alert now. Kelly, it is a beat on both Bed Bath Beyond reporting eps of 1. 18 versus 1. 14. Guidance for the rest of the year looks pretty good. Next quarter, not so great. Comp store sales were very good. Back to you. Bucking the trend for brick and mortar. Should investors be worried about the selloff we just had or is this another shortterm opportunity to buy back into the market . Joel greenblatt tells us where he sees stocks heading and finding value right now and what does scotch and alibaba have to do with one another . Plunging 39 in the first half of the year. Coming up, well tell you what that says about the health of chinas economy and whether you can trust that data some more than others they release. 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. The russell 2000, an index of small caps, hitting a rough patch lately and may have seen headlines of a technical death cross level for the first time in two years. What is a death cross . Well, without the gory details, lets say its not something you want to see develop if youre bullish as you probably guessed. But my next guest is keeping an eye on the russell 1000 an both expensive and could pull back as much as 10 in the next year. Joining me is Joel Greenblatt of gotham. Welcome. Thank you. Youre all about valuation. Mr. Vauluation. The pullback, you think it keeps going . Well, theres the russell 1000, stock number 1 to 1,000 and core lates very closely with the s p 500 and right now thats in about the 30 percentile. Over 24, 25 years, its been more its been cheaper 70 of the time. More expensive 30 of the time. What its been, 5 to 10 positive. The russell 2000, stock 1,2001 to 3,000, basically small caps, totally different story. Its in the third percentile. Cheaper 97 of the time. Been here in the past, valuations of the underlying stocks in the russell 2000, year Forward Return is about negative 6 . So are you shorting the russell or is i know you mostly short individual names, but what about sounds like the index generally speaking not hold a lot of value from your point of view. Index is an index. Its an average of all stocks and some companies are cheap, priced cheaply relative to what we think theyre worth and ones expensive. So, thats what we do. We buy about 300 of the Cheapest Things we can find and short 300 of the most expensive. What are some of those names right now, those areas that are still cheap in this market to begin with . Well, we really looking for, you know, ben graham said buy it cheap and the best student Warren Buffett said if i buy a Good Business cheap even better. We are looking at the intersection of those two things so there are a few companies that appear attractive relative to how good a business they are so theres a Company Called verasign, the dominant web Domain Registry Company and its a great business. They generate lots of cash. Growing at about 5 a year. Not super high growth. Reasonable price. Very nice free cash yield. Raytheon defense contractor. Priced as if, hey, we were in afghanistan. We were in iraq. And were not going back and we dont have to fight too many wars and, you know, maybe recent developments say thats an optimistic view and, you know, raytheon has a Brighter Future than people think and getting it cheap and high returns on capital. Watson is really a benefits consultant. They have a big growth with the new medical exchanges and theres a good shot that that will continue. Its interesting. Flip side of that, some names you think are expensive now are in the bio tech or pharma side of that space which has rallied considerably over the last several years. Right. Well, the three names i brought to talk about today are really pretty straightforward, losing money and prospects dont look good. Includes alibaba . Im kidding. It is not on the list. Zynga is on the list. People are hopeful they have new games but losing money. Groupon is another name from the past that used to have a business that was fairly successful. Its not growing. Its shrinking, losing money. You know . Trading on hope. I would say. And norwegian cruise lines, huge overcapacity in that business. And its losing money now. So its not getting better. And our head of research adam barth and leads our Research Team doesnt like any of those. Can i ask just again looking at the declines across the commodity space, that impact it may have on broader activity, caterpillar under pressure. Do you think its cheap here . I dont know offhand. You know, its a question of not so much is it you know, everything we could purchase at a price, we are looking for Good Businesses at cheap prices so, you know, prospects are only part of it. It depends if theyre already priced in or not. I cant answer that. Fair enough. Alibaba, what did you think about that on friday and especially where it opened . Almost hit 100 bucks and now back below 90. Yeah. Alibaba, we dont have a lot of price history on, valuation history. It earned lots of money. It has lots of good prospects and so, you know, its also a question of valuation. Time will tell. Yes. In other words. Thank you for your perspective. Just putting it in context for us here. Joel greenblatt, thank you very much for coming by. Former president bill clinton making a prediction of corporate priorities and stocks today. I predict to you that the next big front in this will be corporations moving away from what was a new idea in the 70s which is only thing that matters. And the executives should be paid according to the stock price. Coming up, find out what he thinks this big shift for wall street is going to be. And also, sizing up the iphone 6 plus. Is it just too big . Thats the criticism of some. Well dial up the debate and your chance to vote. Your opinion is coming up. Aflac and a gentle wavelike motion. Aahhh ahhhhhh. Liberate your spine, ahhhahhhhhh aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. Find out how fast aflac can pay you, at aflac. Com. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Welcome back. Former president bill clinton saying today corporations will some day care less about maximizing profits and more about employees and society. Its topping todays stories on our website. Isnt it, allen . Sites managing editor joining me now. Yes, indeed. The president s comments drawing a firestorm. Readers piling in and arguing in the comments. Interesting because a lot are pointing out the corporations will benefit their bottom line much more and other people saying, no, theyre always focused on profits. The discussion is actually pretty good down there. Now, number two on the hot list today, another one thats causing lot of arguments among readers. A column of jake novak and his tendency to poke people in the eye on certain issues. Yes, he did. This is whats really wrong with millennials and what hes arguing is they lack the ability to make commitment. Commitment to buy the house, buy the car, get the job. And that its adding up the kind of an economic problem for the United States. Thats causing a lot of i imagine the comments are interesting there, as well. They are. Number three, a pickup of recode with an apple 6 teardown and figure out how much of the parts and the labor going into it. About 243 for an iphone 6. Where theyre selling them for like 650 or more. Thats just in the u. S. Yeah. I guess apple doesnt capture selling it on the black market in china. A good margin. People love that story, too, kelly. Thank you. Back at headquarters. Big and maybe bad. Thats how some people viewing the iphone 6 and sister phone she said the iphone 6 plus. Coming up, well see what the big talk is about and former president bill clinton with the high hopes for Corporate America in the future topping the hot list and talking more about what clinton had to say and whether there might be some change afoot. Stay tuned. Imagine the luxury. Of not being here. The power you want with the fuel economy you dream of. Performance with a conscience. This is volvo innovating for you. vo solver of the slice. Pro. Teacher of the unteachable. You lower handicaps. And raise hopes. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. pro nice drive. vo well played, business pro. Well played. Go national. Go like a pro. Welcome back. Despite the hype, not everyone is a fan of apples latest creation and some saying tim cook may have made a mistake with the iphone 6 plus. We want to know, do you know the iphone 6 plus is too big . Head over to cnbc. Com vote right now. Maybe on your iphone 6. Both guests with their takes and in fact, lance with the phone. Is that the biggest one . Thats the big one. 6 plus k. You talk to us about usability . Is it too big . Well, okay. Its probably too big for a phone. In my opinion. I would always choose the iphone 6 which is smaller and lighter. And has true reachability. They did reach have a double tap and bring it down and its some level unless you have a hand my side you cant reach across for the keyboard but i have to say i know some people want a gigantic phone. Was it a mistake . It wasnt a mistake because its a huge product. Its doing amazing in asia. Taking on another set of folks to take it. The big thing here is Business User. Thats the biggest group. We saw samsung today the stock at the lowest in two years so they have taken a hit. Down 15 this year. The rubber has already met the road. And 10 million in sales in 3 days. The rubbers there. I think the last quarter i think its huge and could be upwards of 70 million in sales. I think the stock goes up to 120 because of this. We had a guest yesterday that said about targeting the asian market and not small. Right. You know, right now we dont know the breakdown on the 10 million sales. Right. It was very interesting to talk to a lot of people on the street. Most people i spoke to going for the iphone 6, a 4. 7inch device, still larger than the current iphone but not this big. I have to clarify, i have nothing against the device. Beautiful. Great big screen, great for games and movies but i wouldnt choose it. I was walking here to this show and looked down in the pocket and like, thats embarrassing. Its a giant square sticking out. Hold it higher. I would love to see, carol, kate, if you feel comfortable with one hand. Hold this next to it. The iphone 5. 5s, i think. All right. Full disclosure, i happen to use one of these still. Oh we have a hook. I think theres a fashion solution to this. If which one is that . If you could take remember those clips and not lose the mittens and clip it on the blazer . You need Something Like that. But actually what i think this is, this might be the gateway to wearables. So that if you have the wearables that does the display and this for kind of a bigger tinkering around, i feel like this might be a gateway drug and something for the future. Kevin, would you carry one of these, buy one of these, buy a man purse to go with it . Yes. What i have decided to do is i have ordered the plus. Im dumping my tablet mini and im also ordering a surface 3 from microsoft to dump my windows laptop. My whole deal and why i like these flat platforms is my briefcase is from 20 pounds to 10. Thats my strategy. Youre not worried about pocket size . Some guys say its tough to fit in their pocket pocket and so maybe it would be no, no. I have tried the format. Most apple store vs a layout without the device and i argue its package protection in the pocket. I like the atri butds. Looks more manly, frankly. Wait a minute. By manly you mean carrying the 5s its going to be business. Its did Business User thats going to make the big change here. Well look back at the phone saying its too small. This is going to be on the road, doing apps. Already an ipad. Whens the point of a device an inch smaller than an ipad . If this is for a Business User, dont you need the size thats larger . On the ipad, not making calls. This is the in between and make the call and you could do the business app. Thats why its very pop already. As a Business User, you probably have a surface tablet and need something with laptop functionality and this does eliminate that middle device. To be fair, i know people are not making phone calls on this. I did make jokes, you know, years ago dell had a giant phone and laughed it out of the market and i understand theres a market for this but its too big to be a phone for me. We have to leave it there. For now. On this important discussion. Thank you so much, though, for bringing it in. Our poll going on this time as to whether the iphone 6 plus is too big, 62 say, no. So maybe size matters, kelly. 120, larry. Price target. Thank you both for coming by. President obama just meeting with some key allies in the fight against isis. We have the news. Reporter we got some pictures in of the president meeting in the waldorf in new york in town for some u. N. Events and the clinton Global Initiative today and president Obama Meeting with middle eastern partners of the United States in fact air strikes of syria last night emphasizing the point that what the United States is building is an International Coalition with partners including saudi arabia, bahrain, qatar, the uae and others that this is not just americas fight alone is the way the president put this so an important moment here symbolically for the white house to show that this is not just another set of u. S. Air strikes. This is, in fact, something with broad support within the middle east. At least thats the face theyre trying to put on it here, kelly. Well put. Thank you. Appreciate it. Until recently, a toast in china probably involved scotch whiskey. It was a huge hit there. New figures showing scotch consumption down, way down. We have our china watcher citing the trend as a potential harbinger of where the chinese economy is headed. Larry flynt looking for better days and may take the Company Public to do it. Hell join us and tell us his plans. Ve 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. 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. Welcome back. Its been a rough week for the scots. Last thursday losing the bid for the independence and now global scotch sales taking a hit. Biggest surprise in china where after years of throwing back scotch it seems, they have decided to put it down. Direct exports are now down 39 and goes hand in hand with the country having china watchers wondering it means for the chinese economy and the rest of us. Lets bring in John Rutledge with the panel for some thoughts here. John, welcome first of all. Thank you. How bad is it in china . Well, you know, the scotch story is interesting but the drink of choice is the nasty drinking clear liquid after dinner. With local government officials, you have dinner, afterwards everyone drinks a lot and gets drunk. The reason scotch was popular, it was a rich mans drink and showing off. Last year, the government in beijing cracked down on corruption. Restaurant sales fell. Liquor sales fell and scotch sales fell so this is good news for china. Chinas growing slower than before but the scotch story is an anticorruption story. Good news for china. Bad news for the scotch, kevin . Well, i have a question, because last year just at the beginning of the year in january, im part of a wine buying group that buys bordeaux futures in boston. We sold a case for 28,000 before we took delivery to a chinese merchant and we paid a 15 commission. That was an insane price. We tried to off the same case this year. Hes not even a buyer. Wow. Same things happened in high end bordeauxes and burgundies. Theyre not stupid. Theyre pulling become. Are they pulling back . Is this a microcosm of decelerating growth in china . Are decline in luxury consumption . Its also part of this was the chinese governments effort to shore up Popular Support by reducing public consumption. But you got admit this seems to go a lot deeper now. China is slowing. Its slowing this year. It will probably grow little more than 7 . Thats three times the u. S. And infinity times europe. Lets not worry too much about those guys. The economys changing, too. Its going gradually from manufacturing and infrastructure towards services which means the jobs if the south are harder to get than before and the jobs in the north are a little easier. Remember, the new leaders come from shanghai. Shanghai is a Financial Center so this restructuring is going to continue. But the wine youre talk about and the scotch were talking about, those were sold to rich guys to sweetheart local government leaders or local government leaders to sweet talk Foreign Investors coming in. Thats not the middle Class Customer in china. Their incomes are growing 10 a year. I wonder though in terms of the middle class versus the upper class in china. Seems like theres a little bit of a trade going on in luxury because so many of the luxuries are becoming mass and everybody can have now the same thing. People at the Upper Echelon are trying to find things that are different than anyone else. We have seen in the handbag industry. Instead of buying michael kors, theyre going to vintage. I wonder how much this is an Economic Indicator versus swapping out something that maybe isnt accessible to everybody else. Thats always true. Rich chinese are always interested in getting capital offshore because their capitals been appropriated three times in the last 50 years. Luxury goods are a good way to do that, too. I think the real money in china is in the upper middle class growth, not in the luxury sales area. It is having knockon effects worldwide as we watch Commodity Prices and scotch prices maybe, too. Theres the silver lining. He feels your pain. Even in the stock market. Bill clinton being bill clinton. Next. 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So join us as we raise a glass to everyone who remembered today. Bottoms up, america. See you tomorrow. Same time. Another innovation from cvs health. Because health is everything. President bill clinton taking the stage at the clinton Global Initiative and hitting on topics ranging from isis to Corporate America. He had a big prediction for corporal culture and the stock market. Heres what he toll becky quick who moderated clintons appearance today. I predict to you that the next big front in this will be corporations moving away from what was a new idea in the 70s, which was only thing that matters was stockholders and executives should all be paid according to the stock price. Back to maybe the employees and customers should matter more. Then the stocks will be a good investment over a three to fiveyear period. I predict he is right, kevin. What about you . We are seeing it. You ask any major pension fund, for example, about pressure they see on sustainability and diversity an other kinds of issues and being arguing it is not inconsistent with shareholder value in the long term or with their fiduciary duty. I totally disagree. The dna of an American Company is to make money for its shareholders, those that put up capital and took the risk. This idea of serving society contorts the original mandate. Example if you had a company in champagne urbana thats globally successful selling products in india, mumbai and shanghai, which society are they going to support . Which city . Where should they be distributing money to help individual people . This is an inconsistent thought. If i want to dream up a horror store to tell kids around a campfire im going to tell them this bill clinton story. This is horrific. Kevin, theres an interesting point in this. I totally understand where you are coming from. Clay christianson late sli talking about the capitalism dilemma basically saying all these financial ratios, shortterm performance is actually robbing us of creating better value longer term. Its just theres simply no reward for performance over say a tenyear period. Zbri done think these things are mutually exclusive particularly on taking care of employees. I think that companies who treat their employees well over the long term, those employees become grand ambassadors, interact with the customers. I think as the labor market hopefully eventually tightens and you need to be more competitive in terms of the employees that you hire, that thats going to be a selling point. I think that you can still serve the ultimate goal of the shareholder and profit and do that by treating your employees well who interface with the consumers are and as it nonvicious cycle. What about jack ma said about alibaba . I think it was employees first. I know shareholders were third. Employees first team second . Something like that. That used to be the old Goldman Sachs motto. Speaking of kids around the campfire, do i think the Younger Generation is demanding some of this. Youve seen pressure put on university endowments, for instance, to get out of fossil fuels. Stanford did it. The Rockefeller Foundation getting out of oil. Right . We had 3,000 people marching for acknowledging Climate Change and having a better plan for combating it. That rockefeller strategy is absolutely insane. 73 of the returns in the stock market the last 40 years came from dividends. One of the highest dividend paying second source is energy. Youd be irresponsible to exit fromming in. That would be crazy to do that. One interesting area as well where theres huge growth is b corp. Their duty is not necessarily to just maximize shareholder value, its slightly different legal verbiage that allows them to pursue some of these more sustainability friendly goals. Theyre having this huge growth in these kinds of companies. In other words, theres on evolving demand in the marketplace, kevin. It seems both from the shareholder side from the management side, even the employee side to some extent. You got to take care offous customers. You give me a list of companies that have new social agendas and dont care about me as a shareholder . Ill be selling those stocks tomorrow. Just send me the list. It doesnt work that way. Everyone has to be on the same page. I have to go back to bill clinton. If i didnt know, i would think perhaps he or someone in his family might be running for office with a Statement Like that. I dont think it can be him. Maybe its chelsea. Ill join you singing around the campfire. Your points taken, kevin. Thank you very much for joining us this afternoon. My thanks as well, carol and kate. Quick programming note it is shark tank tuesday. Catch the shark five nights a week now. Thats kevin oleary and the gang starting tonight at 8 00 p. M. Eastern time. That does it for us on closing bell. Fast money coming up in a few moments. I found six teardown playbook. Plus we have the analysts who made the right call ahead of the apple launch. Stock is down 37 since his downgrade. We have him back on to tell us whether or not there is value in the stock now. Fast money starts right now. Live from the nasdaq marketsite in new york citys times square, im melissa lee. Another losing day for stocks. The s p clocking in with its Third Straight day of losses while the nasdaq hit a fiveweek low. Quite a different story from friday when the s p hit an alltime high and the makts were celebrating the biggest ipo in history. Did that mark the top . We ask that question last week. Bottom line is big ipos dont happen and market bottoms. They dont happen from the bottom to the middle. They happen from the middle to