Transcripts For CNBC Closing Bell 20150130

Biggest gain since june of 2012. Crude prices rallying. Now 6 as you can see to 47. 41 on west texas crude. Weve given back some gains. The gains we saw on the settle. Nevertheless, enough po move theto move the markets off the low. Meanwhile, its the hottest ipo weve seen in some time. Were talking about shake shack. Up 132 or nearly 28 from its opening price. The burger destination causing a big commotion in the neighborhood. These are the lines outside until just about an hour ago. They had set up popup locations for the ipo assignment. They were free, open to the public. We both couldnt believe how long this line was. Look at it there. Stretching all the way down broad street. The valuation i read for where were trading on shake shack, 26 27 million per outlet. Not bad. Well watch as they continue to expand. By the way, guys down here on the floor arent too maple leaf. They didnt get those shake shack burgers. They didnt get them. Jpmorgan was the lead underwriter for the deal here. Theres jamie dimon chowing down on his shake shack joined by vincent, doug and thelma ferguson. Simon, a lot of people down here were waiting on those burgers. They didnt come. You might want to send a few more around. I like it. Give it to the people. Also today add bill gates to the list of some of the worlds top minds that think that Artificial Intelligence poses a genuine risk to mankinds existence. Elon musk also said it on this show as did Stephen Hawking. We explore why theyre so worried later on the closing bell. And here is where we stand in the markets right now. In the final hour of trade, the dow is off 110 points. The s p is down 10. The nasdaq off 14. A lot of moves to watch on the indexes. We have visas four for one split, of course the underperformance from chevron weighing on the dow after suspending its Buyback Program but a late day big move in crude. Lets get more on this enormous move in the oil markets. Jackie deangelis, whats going on . A lot of buying into the close, a spike of 8 . Wti settling at 48. 24 on the day. Brent crude around 52. Traders are saying this has to do with chevron and its cap ex cuts adding onto several companies that have cut Capital Expenditures and also the reduction that weve seen in rig counts. Traders are finally starting to believe that we are going to see production drop, at least in the United States, and that is going to reduce supply. Also, it was said earlier this week some thought prices were bottoming. We were at 11747 tth 1. 47147 147 in 2008. Are people calling the bottom . Theyre not calling the bottom, theyre scared to do it but theyre talking about it. Jackie di angeles at the new york merck. For more were joined by Peter Andersen larry mcdonald, Mike Gina Sanchez is also with us and our very own rick santelli. Where should we start . Lets talk about the moves weve had in the market . Peter andersen id love your take. Is this market all about oil . Are you surprised stocks havent reacted better or is it interesting the way we have these cross currents between Oil Moving Higher in the session but chevron really stealing the show and perhaps indicating as jackie said that maybe todays move isnt yet a bottom . Yeah i think that its very, very hard to call the bottom. Ill tell you how were playing it right now is that i am totally out of all Energy Stocks and i have been out of Energy Stocks for the past two months. You know even if you look at the high yield market which i spend a lot of time looking at to get a signal for stocks i looked at 90 stocks out there that have high yield beyond rankings. All 90 of them except for 9 are in their bottom returns for the past three months. I know thats a technical but let me simplify that for you. What thats Say Something even the high yield investors are not ready to jump in yet. And they will be the first ones that you will see starting to jump in and moving their high yield bonds up but that isnt happening yet. I mean the most obvious question to ask you, peter, is when you would get back in. I guess a lot of that is going to be based as far as the oil majors are concerned on whether we get the dividend cuts and importantly with chevron, thats what youve seen today, a cut back on the return of cash. You didnt see it so much with royal dutch shell, it was more the cap ex earlier in the week. Obviously as we start this part of the earnings season, thats absolutely key. And, you know, the other thing is they probably wont have to cut the dividends here. What they will probably do is even with the cap ex say they start spending more on cap ex so they dont cut back, they will still be able to go to the bond market and borrow money to pay that dividend so im not watching the difficultvidend as an early indicator of health. Instead what im watching are bond spreads and when they start tightening, that will tell you that a lot of people are starting to call that bottom but as i said earlier, its not happening yet. Thats a great point, peter. Gina, lets talk about the fundamentals for the u. S. Economy given all of this. The data this morning a little mixed, but the one positive does seem to be u. S. Consumption. Do you think thats going to continue . Well are you asking me. Gina sanchez. Go ahead, gina. Whats helping that is obviously cheap gas prices. The challenge is that it hasnt translated to the big move we were hoping for, particularly in retail and consumption but we are seeing some benefits and that should continue as long as oil remains low. Now, you know, thats obviously a big question. My view on that is that, you know, the saudis are determined to shake the shale players out of the market. Theyre not saying that explicitly, but thats clearly an option. The problem is that the shale players can shut down and get back in relatively easily. Its not the same as a rig. So, you know, there is probably going to be some cuts but i think this is going to be a volatile market thats going to bounce low for a while. So that will be beneficial. My challenge is that i think that the market the equity markets, have priced in a pretty robust recovery and robust growth, and were starting to see some questions around that. Absolutely. Let me pick up that point with mike as far as the earnings are concerned. S p capitali q mike had some important work out this week that suggested Earnings Growth for this year from where we were coming into the end of last year and the expectation was we would get 12. 2 growth in s p earnings. Thats been cut almost by a third to 3. 7 for the year overall. Thats an environment in which its very difficult, mike surely, to argue you should get substantial gains in equities. Well actually, i think that that number has impacted a lot boy by energy earnings, but the number you alluded to earlier where the Consumer Spending number was high in the gdp report today underscores why you should be overweight Consumer Discretionary while being underweight energy. So i dont think youre going to get an across the board even return in all sectors, but i think you can do well if you know which sectors to be in and the map to that to that strategy lies in that gdp report today. We are coming to the end of not just the month not just the week but also the month. The yeartodate moves have been absolutely phenomenal on fixed income and well talk to rick in a moment. You have had a 50 basis point move down in the yields on the 10year. Utilities up 3. 7 . Health care up 2. 4 . Were repeating what happened last year in many senses, arent we . Well we are, but our clients are still telling us that equities are where they want to be. Theyre not frothy but they are leaning towards equities because there is still no alternative for most affluent investors. I think that will continue to push money into the market despite this unevenness you have just discussed. Larry mcdonald, lets talk about the backdrop here. We havent gotten to globally weve had russia with rate cuts overnight. They follow a string of Central Banks over the year that inevitably seem to be lowering. Nobody has talked about chinas currency. Where does it leave the u. S. Dollar . For those who say the appreciation is over, are they wrong . Could the dollar keep going . The countries in the world that had the best growth australia, canada, a lot of these yield curves new zealand, those curves are flattening and our point this is a point we made in december. The benefits to the consumer because of lower oil, those are linear, but the risk of lower oil in some respects because of the leverage in the system is parabolic, and you just have to remember about 2 trillion of debt has been issued because of these low rates to oil companies, to sovereign countries like russia and all the other companies in russia. So you have to respect the leverage in the system and that risk that it presents to the market. Interesting point. Rick just wrap us up how you see things in chicago as we approach the end of trade, 50 minutes to go. Thats easy. 2012 annual gdp at 2. 3. 2013, 2. 2. 2014 2. 4. That pretty much sums it up. All those calls for 3 as high as 4 , 4. 5 still somewhat delusional. Sustainability luds the u. S. Economy and to me continues to be the big story. There are a lot of peep looking at the move in oil wondering the same thing . Is this now over . Do you think weve put in a bottom here . You know when it comes to oil, i have been looking at the junk spreads and they have been stabilized really for the last two or three weeks and theyre still relatively tight to history. I know its fun to talk about and all that crazy liquidity Central Banks has to make has to go somewhere. Im glad it went into energy. All the technology is paid for. Im not too worried about Companies Getting to buy it for on the cheap because they will make very good use of it in the future and it will continue to be the gift that keeps on giving. Yeah. Mike mcqueen by the way, what do you do with the energy space, quick last question, a chevron with a big move it made today. What happens next . Especially for people who have been in these names for the income . Well they are still a great source of income for most people, but i think you have time. I think they will be uneven in the bottoming process but were looking to raise our exposure to equity in the coming weeks not immediately. If we put in a bottom its a place where investors will have an opportunity for two or three weeks or maybe a month or two to scale in and then he will be glad they did come end of 2015. Thanks everybody. Appreciate it this hour. Have a great weekend. We have 45 minutes to go into the close. And the dow is down 146 so were heading back down towards the lows of the session as of course, we enter a period where they start looking to match the trades at the end. Up next an apple watcher back on tuesday told us on the closing bell the stock would hit 120 by today. Well, guess what . Earlier it did. It touched 120. Apple was trading below 110 when he said that. We have the pro back here to tell us where he thinks apple is going from here. Shake shack sizzling on its first day of trade. Well have a special report on all the burger joint action. Thats next. Recently, a 1954 mercedesbenz grand prix race car made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2015 cla. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back. Here is a look at markets today. The dow is off 150 points. We had that nice rally yesterday, simon, but today a different story. We wont have any after the bell earnings. Still a lot of this has to do with the focus on the tech sector. We should mention the nasdaq is outperforming. Theres a look at the dow and the three components in the green include visa at t and caterpillar which has had a tough go of it but getting a lift i would guess by the sharp upward move we saw in crude oil price prices. They dont tend to do the earnings on fridays. No, they save fridays for ipos. And shake shack absolutely rocketed on its debut and giving out free burgers outside the New York Stock Exchange to boots. A moot point because they didnt give them out inside the stock exchange. A very angry technical crew but lets past that. Mary thompson is covering all the action. To watch it go towards 2 billion was an extraordinary moment. It really was. It priced last night at 21 a share which was above the range of 17 to 19 expected. Its first trade on the New York Stock Exchange was 47. Now, as we head toward the close, we can see right now its trading at 47. 92. Thats a 128 gain and that would probably make it the third best performance, first day performance, for an ipo since 2010. Now, outside the New York Stock Exchange there were long lines outside of a couple of trucks that shake shack had set up so investors enjoying and consumers enjoying those burgers and fries and thick milk shakes that they sell. Todays action valuing the company at 2 billion, and who says that flipping burgers doesnt pay. I love the people making the point that millennials are eating healthy. Theyre just choosing their burs everything burgers from a different joint. Thank you, mary. Apple touched 120 intraday and thats the number our next guest predicted apple wit hit back on tuesday when the stock was below 110. That warrants him coming back. Okay. Lets bring in james from keen. He made that call. Were also joined by tom fort from Green Capital who isnt that optimistic, it has to be said. James, let me kick off with you. Where do we go from here . Right. We touched 120 as an intraday high. Trust me it doesnt always happen that day but thats what the Options Market was projecting the stock could go. After this big blowout quarter i think well still see moves higher in the stock. I want to continue being long apple, so im now long via options that expire in march. The Options Market is saying we could get as high as 129 or 130 by march expiration. I dont want to be exposed to the release of the watch which were thinking will be sometime in april. Its an interesting mix of pattern watching from the options pit and some fundamental analysis, james. As far as youre concerned the watch basically knocks everything out of the way, does it . Right. Absolutely. This is a huge risk point for apple. I mean theres a lot they can do with the cash pile. We saw it swell it over 180 billion this past quarter to drive the stock in the short term via buy backs or a larger dividend. What is going to drive the stock in the longer term is the watch. This is the first test of apple as a new innovative product under tim cook. If they fail this investors will change their own on apple. Youre more cautious here. Is it also because of the iwatch or what . I think that factors in the equation. We published report on mobile payments and management declared on that Earnings Call 2015 was going to be the year of apple pay. Well theyve done a great job in lining up banks and retailers but its still not ewe quick whichewe bik what tusich tus to the consumer. Starbucks had 90 share in 2013 and theyre adding to that with their mobile order and pay initiative. So you dont like apple because its not you bik which tus enough but you like starbucks payments even though they only work at starbucks . Its way too early for the company to declare 2015 the year of apple pay. When you translate to the stock, theyre basically a product cycle stock. If they had a year, for example, with a fiscal year where they had one new phone and they were lapping two new phones their sales would be down. They plucked the low hanging fruit by coming out with a smartphone with a larger screen. I agree theres a lot of risk in the watch. I dont think theyre doing anything that will move the needle. So far the smart watch category has been lackluster. But im not sure that anybody really expects the watch or payments to move the needle to the extent that sales of the iphone do and the extraordinary sales that theyve managed to pick up in china. Doesnt that excite you . Definitely the watch sorry, the smartphone is their most important product, but to the extent that theyre heavily dependent on the product cycle for the watch, they need to have new items, a television in this case the smart watch, payments to generate consistent sales and Earnings Growth otherwise they will just depend on how many new smartphones theyre going to put out in a year and how that compares against the year ago period. Its challenging for the stock. It all depends what you think the definition of a product category is i guess. Its good to talk to you both. Thanks guys. Tom forte and james ver melmelli. We will bring james back seeing about that level. The dow moving back to the lows of the session now. Were off almost 200 points. The s p is giving up 21. The nasdaq 40. Whats interesting about this simon, is were not seeing that much of a bounce after the crude oil bounce that we saw earlier. Weve lost 2,000 there regained it on the s p 500. January is turning out to be a cold month for wall street in more ways than one, but what will february bring . Dom chu sees hot times ahead and he has the data he says to back it up next. And later if we die tonight mankind dies with us. Will the terminator go from Science Fiction to science fact . Bill gates joining the mensa ranks of elon musk and Stephen Hawking who warn Artificial Intelligence could indeed end mankind. More on their concerns just ahead. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. They challenge us. They take us to worlds full of heroes and titans. For respawn, building the best Interactive Entertainment begins with the cloud. This is titanfall, the first multiplayer game built and run on microsoft azure. Empowering gamers around the world to interact in ways they never thought possible. This cloud turns data into excitement. This is the microsoft cloud. Welcome back. You can see here whats happening. Weve taken a little bit of a leg lower in markets lately. Perhaps is has something to do as john was saying with Richard Fisher commenting on the feds moving saying it would be good to do it earlier, simon. Nobody should be surprised by that kind of rhetoric from him. But it may be enough to tip markets further into negative territory. Usually a good january is associated with a good year for equities. Dom chu, it has been a volatile month. It has been a volatile month. A lot of triple digit moves 13 of the last 19 trading sessions we see the dow swing by triple digits. Some more volatility than weve seen in the past. If you look over the course of just the yeartodate, you can see just the roller coaster ride weve seen and marginally down 3. 25 . If you look at what this means overall, over the past few years since quantitative easing Central Bank Intervention the market has generally been to the upsooird and we havent seen the january barometer that is so goes january, so goes the rest of the year really play out over the last five years. But if you look at our data partners, they crunched the numbers on what february looks like over the last five years in this age of Central Bank Intervention and we maybe, no surprise here, have seen markets be positive 100 of the time in february over the last five years. That means the s p 500, the nasdaq, the russell 2k all positive. The big winner the xly, the Consumer Discretionary etf is on average 5 better in the month of february. If you look at some of the big movers within Consumer Discretionary check out whats happening with macys over the last five years its up 10 during the month and its positive 100 of the time. Another one is gap. Thats up 14 on average, positive 100 of the time and one of the big standouts as well here is interpublic group, advertising and marketing. Its up 16 on average during this month of february over the past five years and its been positive five out of five times. Just an interesting look at february over the past five years in this age of Central Bank Intervention guys. Back over to you. I think ipg reports in two or three weeks. There you go. And in light of what google just told us about some of the moves in advertising, really interesting to see what they have to say on that front. Dom dom, thank you. Joining us now are cnbc contributors michael yoshkiami and michael farr from farr, miller and washington. You were at this fisher lunch somebody told me in my ear. I was at the luncheon with Richard Fisher today. Simon, he was fascinating but he talked about the amount of liquidity and essentially he said banks are awash with liquidity not only in this country but around the world really to an alarming degree. He said the fed has determined it will move this year and that we should take their word on it. So he was constructive. He is so bullish on america, but this liquidity is still a major issue for him, and he continues to worry about the inflation that it may ignite. So i mean where do you think he would suggest people invest . What was your takeaway from that front . You know, he talked about american entrepreneurship and the creative factors that have driven really the american economy. He named steve jobs and bill gates and others. So he continued to say we are the secretariat at the belmont stakes. He had a slide of them finishing ahead. In america exceptionalism and creativity. We have seen equity markets down two months in a row. Is this a buying opportunity . If it is one, is it one with more volatility . Volatility is permanent. We should abandon the philosophy that volatility is going away. The markets are way too crazy. Theres too Much Technology but i do think it is going to be looked at as a buying opportunity when you look towards the end of the year. And i thinks who really important to keep in mind is even though Federal Reserve officials are really talking about how theyre going to raise Interest Rates, the question i really have is how much are they going to raise Interest Rates. Everybodyrattling the sabers that theyre going to go up. I think you have too much deflationary environment right now. Cost of capital is so incredibly inexpensive for companies and i think the fed and other monetary agencies are still pushing us towards capital assets. You know michael, im surprised that were currently talking about the fed as much as we are because they clearly are very reluctant to raise. As you point out yes. It may be a quarter point for the year. Eventually when it comes, presumably its factored in. They are so squared tocared to move. The market has to be about other factors. Exactly right. What theyve already said as a stated policy is were going to wait to raise rates until we are absolutely convinced the economy is on strong footing and the economy can only be on strong footing if the Global Economy is on strong footing. Whats happening in europe . Whats happening in china . Whats happening around the world . So i think that the other issues you need to be looking at right now are what are the earnings streams going to look like, what kind of tailwind will consumers get with low Interest Rates and what kind of cap ex spending will occur for companies because of low rates. Real quick, michael, where are you putting client money . U. S. Equities bonds, fixed income instruments . Yes. We dont to invest in domestic equities and i continue to like the more defensive consumer staples. I like industrials, technology, and i continue to like health care. Volatility volatility has really doubled this year. We have had seven and this will be eight moves of over 1 in the markets in 20 trading days. Thats twice last years rate. So i think as the fed is saying and this fed noise is important, as theyre really saying theyre going to pull back the panacea and cureall seems to be going away and markets are beginning to adjust and it doesnt feel good with the fed that seems to be able to solve every problem pulling back a little. Amen to that. Michaels, both of you, thank you very much. Thank you for sparing the time. Thank you. Appreciate it. Just about a half hour to go into the close. Dow is off 165. S p is off 17. The nasdaq is off 31 and that vix we were talking about, its up a couple points. Its at 21 today. From here the show gets really interesting. We hear from wall street pros all the time. Up next find out how main Street Investors are riding these markets wild swings. Its our Monthly Retail investor round table and its real interesting. I promise you. Welcome back. Bouncing around here at the close, but with a decidedly negative tone. Art cashin just mentioned there was some sell pressure going into the hour. Its largely pared off. There may be some buys as things close. Energy is the outperformer up 1 despite chevrons suspension of its Buyback Program. It has a lot to do with the lateday moves in oil. A lot of people wonder something oil moving for, quote, unquote, good reasons or bad once and the equity action not that promising. In a lot of senses were reaching a climax in the session. Dom chu has more on the movers. Casino stocks moving to the downside after the nevada gaming board reported gambling revenue fell 16 in december from the same time last year. This followed a 4 decline from the month of november. Energy stocks soared. You just showed the sector overall. On the back of a spike in oil prices in the last hour or so of trading, and you can see a lot of big Energy Stocks moving to the upside. A wild day for the dow overall. It had erased most of its losses when oil spiked midday but then it headed south again leading the way lower. Microsoft, intel, sillcisco and walmart. Well end with the gold mining stocks. You can see moving to the upside some of the major miners we track with gold price movements. Back over to you guys. Thanks for now. Its the last trading day of the month which is the perfect time to check in on how main Street Investors are viewing these markets. Its time for our Monthly Retail investor round table with a military wife and mother julie westerner, retired air force engineer ivan watts, and engineer wayne smalls. Wayne, what do you think of the market . Well this volatility isnt unexpected. With last year being a relatively easy time to invest vix practically fell asleep. It was just literally easy to pick stocks and ride it out. When ebola came up and then oil dropped in december the volatility that followed with ecb, quantitative easing and continued oil price dropping its just not unexpected and im hanging with it. Youre hanging with equities wayne . Yes. With your picks even though theres volatility. Ivan, im so glad you could join us here. You said something on twit theyre caught my attention. The reason we like to talk to you is to get a sense of how people are behaving in these kind of extraordinary times. You said something about investing thanks to a cheap loan basically for new cars. You were able to take advantage of it. Tell us about that and what some of the picks were that you made with it. Okay. So when i went to buy a new car, they said theyd pay me 1,000 if i financed the car with them and it was an interestfree loan. It was six years. I said really . I said thats free money. So i had the cash to buy the car, so instead of buying the car i went out and bought some stock with it. I bought at t. Because for the yield, ivan . I did. I bought it for the yield, but im not afraid of the volatility though. I mean i usually have a goal when i invest and if the stock goes up and meets my goal i just sell it. Im not proud. Wise move. Talk about apple with you in a moment though. Julie yes. People often look at the market going down and, you know, they get all emotional about it. Actually starsas far as youre concerned reading between the lines, down market is when you become electrified. Your biggest investment or your oldest investment was actually walmart it says here just after four days after the 1987 crash. Youre kind of on alert. Actually walmart is my oldest holding, purchased in 1987 but, you know, investors can benefit whether or not the market is up or down. Its a win win situation. When the market goes up their stock portfolio goes up in price. They can take their profits, and then you really really need those down markets when good solid quality stocks go on sale. Thats when you really learn how to make money as an individual investor when you dont let emotion get in the way. Right. What will you be buying . Actually one of my new holdings that i just bought a little bit more of is a Small Cap Company called clavo growers. Its in the avocado industry which is in the staples sector but with the growing hispanic and latino population in the states growing mexican restaurants, its a great place to be. I love that. I want to come back to something it says in the notes here. When we do retail panels is often comes up. It says here you have a highly leveraged position in apple that has returned you 64 in the last eight months. So youre on margin youre betting big on apple. My question to you because this is often the flip side of that when apple was falling coming out of 2012 into 2013 and it fell almost a half of one percent, were you badly burned on the down side . No i wasnt. I had already sold in the mid500 level and i stayed in cash for the next 18 months or so. So i was not so fortunately for me i reached my goal with apple at that time and didnt get burned by that downside. But you clearly understand the risks. How nervous are you with a leveraged position on apple after these gains . Yes, im quite aware of that. In fact, im among the folks who learned the hard way back during the dotcom bomb so my approach to using leverage last year with apple was very measured. Buy it after its gone up and reached certain milestones and then go and leverage to get more. Thats where im at right now but im going to pare back on it and be careful. Ivan before we go is this a strategy you would recommend anybody else adopt . Oh sure. Im not really that astute at stocks, but i can do a little math, and i think you just put it down on a piece of paper around look at the math of it and it just jumps out at you. Is it because at t you view as a relatively safe investment . Its not a stock im sure youd still have to build that in that frankly any investment can become volatile . Oh yeah you could go to cnbc. Com and look at the chart for the last five years and you can the real thing was that i just wanted to make sure that when i went to sell the stock to make the payments on the car, that the stock was at or above where i bought it. So this is all in the past ivan . Did you already pay back these loans . Well you know its funny, as of today i have one more payment to make on the first car and i just bought another car and i did the exact same thing with it. Wow. How much do you reckon you came out ahead . Probably 8,000 or 9,000. Ivan thank you for being here. I thought that was fas yatcinateingfascinating. Julie, by the way, how do people get involved locally if they want to join an investment club. Contact better investing. Org is a great way. The only way to succeed in the market for individual investors is to educate themselves first. Yes. Better investing. Org. Great stuff. Thank you all. Thank you. Do you ever think you should be more aggressive . With what . Investments . Borrowing and investing. Okay. 17 minutes still to trade. Actually its not looking to clever on the dow. The dow is down 219 points as you can see. Were getting a bit roughed up towards the end of trade here this friday. Up next tug of war on wall street today thanks to some key earnings reports that week and well highlight next big names to watch. Importantly mitt romney said hes not run. Chuck todd called it, and hes here. You trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Okay. Losses are accelerating into the weekly lyly close. Microsoft down almost 4 . Cisco, intel, and walmart. Wall street wrapping up the busiest week of earnings. Some big names still on tap for next week. Dominick chu chu, tell us the highlights. Well do that in a moment. Right after the break. Were going to take a quick break with the market off 214. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. The trouble with friday afternoons like this is you have to read about them all over the weekend. The dow now down about 3. 5 for the year so far for the month of january and, of course wall street wrapping up now the busiest week of earnings. Some big names are on tap next week. Dominic chu with the highlights. Another big one. Lets start, first of all, with a check of whats happened today. Well start with amazon soaring after posting a profit of 45 cents a share. Easily beating wall street estimates of 17 . Visa moving higher after a better than expected quarterly profit. It announced a four or fun stock split. Shares up 3. 33 . Mastercard posting better than expected results covering the Holiday Shopping season but came off its highs after management said 2015 could be a challenge. Xerox tell despite a raise in the dividend. Investors are focusing on a lower guidance for 2015. Lets talk about next week because it was a busy one this week. Next week theres a huge slew of big names. Exxonmobil on monday. You have also got disney shares on tuesday. General motors on wednesday. Twitter on thursday. Those are just four of the big ones. A whole bunch more. You got go pro as well. So guys a lot of action still to be steen oneen on earnings. Lets hope it manages to turn us in the other direction. Down 228 points on the dow. Were below 2,000 on the s p though still above what would be considered some important technical levels. Joining us now, Mary Ann Bartels and art cashin from ubs. Whats happening late in the session . Youre going out with net sellers. This is month end, and weve had indications of big sellers on the close all day. They look like they were going to pare off but as of right now we have over half a billion dollars to sell on balance and thats why were closing near the lows here. That will do it. Mary ann, people selling this market. Do you think they should be buying it instead . Were still very constructive on the market. We expect volatility to continue in 2015 but we are finding some really good value in the market particularly in technology and select areas and industrials and also in health care. You know its interesting you brought up health care and as were looking or sifting through earnings season mary ann, is it okay for people to stick with the winners, the outperformers even though their valuation is moving higher . Just because theyre at a 52week range really doesnt give us a reason not to buy them. Particularly health care. I know theres a lot of concern that anything with yield has a higher valuation, but as you can see whats happening in the bond market yields are collapsing globally. And you look around the world, the largest segment of the bond market thats growing is negative yielding and now that we have the ecb on quantitative easing, what we have a shortage of is high quality bonds, and we have an investor pool set in the United States and around the globe looking for yield and the United States has high yield. We have a problem with yourm mic, mary ann. We know we have a problem, were fixing it. Art, in the meantime whats the Bigger Picture as far as youre concerned . The big picture today was in the crude pits. Late in the day as we were coming to month end and week end, there was what appeared to be a massive short squeeze. They went up 3 or more. At one point i think they looked close at up to 8 . What happened was the rig count for the week dropped the most for any week since 1987 and a lot of the shorts said oh my goodness, maybe we are going to get supply under control after all. I dont want to go home for the weekend short as much as i am. Oil skyrocketed higher. That changed this market a little bit and when they realized it was a short squeeze, they just said forget about it. Mary ann, before we go are you guys nipping around at all in the energy space here or staying clear of it . No were not approaching the Energy Sector yet and we think the Energy Sector will continue to underperform. Now, granted, theres some vaulg there, theres some yield there, but we still think its too early to be fishing in energy. Mary ann, art cashin for the moment. Up next, the selling accelerating into the close. Were coming right back with the closing countdown. Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Want to know how hard it can be. To breathe with copd . It can feel like this. Copd includes chronic bronchitis and emphysema. Spiriva is a oncedaily inhaled. Copd maintenance treatment. That helps open my airways for a full 24 hours. You know, spiriva helps me breathe easier. Spiriva handihaler tiotropium bromide inhalation powder does not replace rescue inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taking spiriva and seek immediate medical help if your breathing suddenly worsens your throat or tongue swells,. You can get hives, vision changes or eye pain or problems passing urine. Other side effects include dry mouth and constipation. Nothing can reverse copd. Spiriva helps me breathe better. Sfx blowing sound. Does breathing with copd. Weigh you down . Dont wait ask your doctor about spiriva handihaler. The selling has accelerated into the close as we match trades for the end of the week and, of course the end of the month and this is where we stand at the moment. For the year its not looking terribly clever. The s p down 3 . The dow down 3. 6 . Mary ann that will startle a lot of people particularly as they have to read about it over the weekend and everybody being very negative. What would you say about february . I wouldnt telling you about february. I would tell you about january of last year we were down and the year was up. Its unusual to have a down january and an up year. It is. Normally january tends to be a barometer but now that were in the third year of the president ial cycle and an indumb cant incumbent, normally january ant isnt a down month. I think as usual mary ann is dead right about the seasonals. Its the third year. The seventh year of a twiceelected president. Very bullish history of that and oddly enough years ending in five for the last 130 years have almost always been up years. If you had to choose would you be extending your long as putting extra money into the market or would you be lightening up . I would be probably dollar close to averaging. Set aside a certain amount of money, put it there, buy it when theyre down. You wind up buying more shares. When they go up you buy fewers shares shares. On the greek situation. Im really worried. We talk about greece all the time, everybody should know the issue was greece. Im really worried these new left wing people that are in charge may not be able to communicate to the market or not care about communicating in the market. Today we had a bit of a wobble because of the language that theyre using. These people are not used to dealing at an International Level and not even trying to reassure the market in the sort of words that theyre using. I think the other part of the problem is in the streets they were given an almost mandate, and now deliver. And theyre not going to be delivering what they were programsing, youre programsing promising. My assumption is we will be able to put greece behind us. I agree with you. I dont think germany lets greece go. And still a Strong Economy here. We have the best economy. What part of the market . Industrials and health care technology. As far as the earnings are concerned, are you worried . Im not enthused yes. Okay. Thank you very much. Art cashin joining us there and Mary Ann Bartels. Have great weekends. The dow currently down 249 points as i said to you. Thats a loss of getting on to 4 for the year so far. A big issue for those long of the market as most of us are. Thank you, simon. Welcome to the closing bell, everybody. On this friday to close out the day, the week and the month. Im kelly evans. Lets start with thisough satisfaction weve had. The dow off 242 points good for 1. 4 . The s p giving up 25 to close back below the 2,000 level. The nasdaq down 48 points. This is the 14th time out of trading segssions in january the market moved at least 100 points. The vix three points higher at closing. Moving at a level above 21 almost 22. Lets bring in todays panel. Joining me Michael Santoli from yahoo finance. Sara eisen, eric chemi from cnbc. Com. And fast money trader steve grasso who will join us shortly off the floor and our own mary thompson. Mary we want to start with you. Tell bus this pressure on stocks that materialized right into the close. Thats right. You know i think art cashin did a good explanation of it. We had a pop in the price of oil and when some traders figured out it was short selling, the markets turned south again. Traders also telling me theres a lot of lack of conviction from some of the bigger traders and thats been one of the reasons weve seen so much volatility for this month. As it stands at the close with the dow finishing at its worst levels of the day, we have backtoback declines for all backtoback monthly declines for all three of the major indices in the month of january. One month for the Dow Jones Industrial average, its worst monthly performance since january of last year. Same for the s p 500, a dismal month for that index as well. Lets look at a preliminary shot of how these indices finished the month. Again, the markets are still settling but a 3 decline for the s p 500. The nasdaq off 2. 1 and the russell down 3 . As kelly indicated, it was a volatile month. 70 of the trading sessions we saw a triple digit decline or a triple digit gain for the Dow Jones Industrial average during the month of january. Kelly, back to you. Thanks so much. Lets introduce steve grasso joining us around the set as well with a perspective on what has happened in the markets today. Is this all about oil . I think it was about oil. This morning it was about cpi and europe. Then it lifted and it was basically about oil here. When you start to see oil run like that you know it has to be month end. Everybody is talking about month end action the rig count. The rig count is being blamed nor it. Created a hell of a short squed going squeeze going into it but next week when you get the supply numbers, it will head back south so i think this is all for nothing. Is it a buying opportunity . Weve been down two months . A row. Its two months in a row. Its this january looking a lot like last january. Last january we were down 5 almost 6 in the s p. Bottomed out february 3rd. This month its been more jagged action in this range and the only stuff thats up really is the bond surrogates. Its basically the stuff that looks like a bond but its a stock. Thats whats up. Everything else with the exception of technology has been down. So i think really its more about Equity Investors trying to metabolize massive asset market moves, currencies oil, all the rest of it. Just too violent doesnt that mean though you have had to guess this rally . Weve talked about this for months now, how eweutilityies continue to outperform. Thats not a riskon trade. No its a yield on trade. Its no longer rishg on risk off. The yen strengthed we saw gold up and treasuries had their best month in three years. For the love. On the yield. To your point about stocks in january, it was the worst month since january 2014. Last year was a great year. So if were comparing and it was a great year for stocks and bonds. If were comparing it to a year ago and were saying this is the similarity, that sets up a good trend. If you look at the highs and lows going back the same quarter, were in the same trading range. The dow was at 17something the entire month. Between 17 and 18. It didnt break out. Lets hone in on this yield point for a second. I feel this is the key to the whole market in a way. Basically whats happened this month. How many Central Banks globally have come out with surprise rate cuts . How much further can global bond yields decline with the exception of greece lately . So perhaps no surprise investors are left with no other choice. Is this how quantitative easing is supposed to work . I dont know about that. The utility sector outperform outperforming outperforming. Thats not conveying animal spirits through the economy with utility stocks going up. No, its not. I think also whats the exception to what you just ticked off there . Whats expected of the fed is the exception to that rule. So if youre a u. S. Investor, you kind of have that feeling you had a heads you win, tails you lose thing going on with the fed. Now its different because they seem determined to do something with slightly higher rates. Another factor this is why chevron is so interesting. A lot of people were in energy for the yield. A lot of those people wondering how worried should i be about the yield in this space. What do you say even though were seeing oil bouncing a little bit. It does feel like a lot of this downward move wasnt come home to roost. Everyone was hiding in large integrated names and those are the top names in the xle. If you really look at it whats really worked in the last couple days has been the refiner space. The refiner space is up basically across the board 20 to 30 . Sharp spike higher because that wti brent spread is finally come back online. People look at the numbers and were shocked the fact that refiners are performing. The large integrated names arent anymore. Mary thompson as well theres a really interesting point rob made on this network yesterday. He was saying there arent enough stocks to buy because of corporate buybacks. There arent enough bonds to buy because of Global Quantitative easing, and it jives with what we heard from jim paulson at wells not long ago where he said, by the way, the median the typical strong is trading at a higher valuation than it was during the dotcom bubble because that was a tale of all tech stocks going haywire and Everything Else was normal. I talk to a lot of people that say there are a shortage of places to put your money. So where do you put them . You put them in u. S. Bonds or put them in u. S. Equities. And so that is helping to drive, you know, or at least in bonds thats what were starting to see, where were seeing the rally there, but as far as the stocks go, i think thats why you see some of those big moves. People see an opportunity to get in, they get in and they get out quickly. Again, i will go back to the fact that there is a lack of conviction. There is too much uncertainty out there. We have until the end of february to figure out what happens with greece. Certainly the feds statement this week raised questions as to when theyre going to raise rates, if theyre going to raise rates this year and investors keep wondering when are we going to see a bottom in oil . Thats not an answer we will know immediately. And so that is going to continue i believe, to contribute to some volatility in the markets. I also wonder if the supply and demand phenomenon is part of the reason why when we have these corrections even if they are sharp and severe there also seems to be a buying pressure that immediately comes in and pushes us to new highs. Do you think thats going to be the neckk next thing that comes out of this patch of weakness. If we look at todays move its really just a 1 move. We talk about triple digits but this is not a dow 10,000 environment like it was a few years ago. Were almost at 20,000. We can see a 200 point move and bounce back. Its not the end of the world. It seems the bounces are a lot weaker each time. So you make those series of lower bounces. You sit there and you watch it fail again. Lower lows lower highs. We fail at the 50 day, the 100 day. Carter worth points it out as the smoothing mechanism. The low from this week, too, i believe was 1989. We stopped just short of it. The buy the dip working obviously was what you were talking about. There are some Global Growth questions that continue to plague this market. You talk about the record low bond yields around the globe. You have to factor in the growth concerns. It didnt help we got a u. S. Gdp figure of 2. 6 this morning where economists were looking for well above 3 . Yes, Consumer Spending was pretty good but nobody really has conviction in the strength of this economic recovery and the sustainability. And also the parts of the economy that the stock market capitalizes which really is business to business. The consumer stuff is doing fine, but right now you have main street feeling a little bit better after years of wall street doing much better. Im sorry to keep jumping in. Ill a little hopped up. Its been a busy day. I love this. Why do people think the s p theyre owed a higher s p year after year an year . So for me when people start to talk about where do you think the s p is going to return at the end of the year . Why are we all talking about it as if its going to be positive. Because theres zero Interest Rates. Its like our god given rights to positive returns in the s p. Point of investing is to invest in a higher stream of cash flows. Over time you would hope over time. Not every year. Theres no such thing you have to look at what we know. We know the dollar has a lot more room to climb higher right . So that means oil has a lot more room to fall. And if oil falls its not only taking the Energy Complex with it, its taking a lot of other collateral complexes with it and not only that but its not a tailwind as everyone thought. It was a tailwind early. It was. Now it starts to become a headwind. I want to bring this back to the shake shack ipo we saw. It more than doublesd. The reason why this is interesting goes back to this whole point rob and others were making. He says theres not enough ipos. Theres not enough Companies Going public in this market. This is so fascinating. For a lot of us we come off a period where were haunted by the dotcom excesses and too Many Companies that went public and shouldnt have. Should there be more out there in this environment putting out a shingle, taking a risk and coming down here . If youre a fast casual restaurant chain that makes burgers, now is your time because its not just shake shack, its zoes and there seems to be a lot of appetite for growth friendly this is a Company Whose market value shot over 1 billion and it has 63 locations just on the future Growth Prospects and expansion. So investors are certainly hungry, to pun intended for that kind of story. Remember we talked about this a couple weeks ago. Everyone saved money on gas prices and they spent it on fast food. That was the big growth you did point that out. We predicted this big pop. Each franchise is worth 27 million. You would never pay for a mcdonalds or any franchise 27 million to open one location. So its really frothy. Look at the size of the deal though. You can speak to this for such a small deal. I dont think theres a shortage of stocks. Theres a shortage of very distinctive seeming corporate stories because everybody is looking at stocks as pieces of paper to compare to a bond like we were talking about before. When you have something that seems not really macro dependent, it seems like its got its own momentum to it and its a buzzy, hopped up concept, thats why you get people excite excited. A quick question. A guest said he was using his interestfree car payment to buy stocks. He said he did it once basically paid off the first car. Hes doing it again because hes paying for the car in cash using that and says hes come out nine grand ahead. I would just love to know what this says to you about it sounds like greenspan. Isnt that what happened back it sounds like the housing bubble. People taking loans out on their house, low Interest Rate and throwing it into the market because they thought they were guaranteed a return on their money every year in the marketplace. Its exactly what it sounds like. And its going to end the same way too. Well at least its a car payment instead of a house payment. Before we go you said your level to watch was look at right where we close, 1995. We broke that so look at 1988. Thats the level you want to hold in cash. Ige believe we have a market flash back at headquarters. Maybe, maybe not. Yes, we do. So again, what were watching here is caesars entertainment. The stock is hitting the lows going into the close here on news that it was not able to reach an agreement with bank lenders regarding a restructuring of one of its Main Operating units. Caesars shares down 7 as we head into the close. Well keep an eye and see if theres any more action after the bell today. Back over to you, kelly. All right. Another tough move in the casino space. Our thanks to steve grasso. Much more coming up with him on fast money and more ahead on this selloff. Then later bill gates, the latest tech genius to warn the daners dangers of Artificial Intelligence are real. And another working to make sure movies like terminator never become reality. Another tough move in the casino movies like terminator never january has been ice cold for stocks lailttely. Today no exception. Were joined by mary thompson. Bertha coombs at the nasdaq and of the panel. The nasdaq held up reasonably well comparatively today but still some tough earnings out there. Some tough earnings and yet today part of the reason the nasdaq held up was amazon. Amazon holding up closer to the highs of the day after essentially setting out a new road map saying theyre going to talk a little bit more about their web services, they actually posted that better profit, really starting to see who is operating in this environment with the currency and who cant. Apple today was support after hitting that 120 print. There were a lot of people who had options, call options at that price. They end up today with them out of the money now. But overall, it was really the same action that you saw throughout the market which tells me it wasnt necessarily about selling off particular sectors here. This was really just everything if you look at all the charts, they all peaked around 230. You got that peak in oil. If it werent for visa that was the only component on the dow that ended in the green. I believe so. Visa was important for the dow today because the company came out, first of all, and had better than expected earnings but its splitting its stock four for one and it will be less impactful on the dow because its a price weighted index. So that four for one split means its price wont have as big an impact on the dow. Both visa and mastercard coming in with better than expected results and that helped the stock. But i think that four for one split helped visa because the numbers while decent were blockbuster. We were reminded by our former colleague kristin pointing out visas impact on the dow last year because this was one of the biggest components, and it had a strong 2014. It had a weaker open to the year. We will need another sector to step up. It was energy that was doing the work last year. Visa was 9 of the dow last year. Now it will be an average stock. The number one stock on the dow now, goldman sack 7 . If youre looking for an opportunity to get gains to move the index, goldman is that company. And the financials were under pressure and look at Interest Rates and cyclical concerns. To have goldman being the biggest component, mike . Its not by design. Its very haphazard. The price weighting always was. Financials are not really that big in the dow. You have b of a. Its not like the s p where its one of the biggest sectors. Actually down 6 the xlf. Thats a tremendous weight and there is no real leadership anywhere else. Its been interesting to see because we saw a strong run up in the financials toward the end of last year with a lot of people anticipating were going to see higher rates. This group has been waiting for higher rates. The beginning of the year they throw cold water and they have been hammered. You know the one thing yeah bertha. The one thing we should talk about, theres a lot of things that are struggling, but the one area that continues to perform, although today sold off with Everything Else are health care stocks, particularly the biotechs. The biotechs are up 7 depending which of the indices you look at, which of the etfs, thex di or the ibb. They are continuing to extend gains and that initiative at the white house today where theyre going to be pouring more money into research thats going to help the likes of i will lumina and others in the space, that continues to be a big theme this year. And the earnings on that front have been good so far as well. I was going to say earnings are a big part of the story right now. This is a noisy earnings quarter. This is a you have to one to decipher sort of the underlying trends. When it comes to the stronger dollar and Lower Oil Prices wreaking havoc on certain companies, take that out and some of the fundamentals of these companies are really good and i think you see that in the Sector Performance as well. Financials were a bit of a disappointment right . The guidance hasnt been that strong either and that is what the market loobsks at. Were going to rotate into the more retail heavy part of the market. As you pointed out eric a lot of that is going into different retail spending, your phone data plan or your Obamacare Health plan or whatever your coverage is thats gone up. Visa had some Interesting Data points. They said 50 of gas savings is going to a savings account for the consumers. 25 is going towards paying down debt. The other percentage is going towards groceries, clothing and other discretionary items like eating out. But the savings part is interesting because its the people who can save but not everyone, not 50 of the people are able to save. So that number is skewed between money and individuals. And the deleveraging. A hangover from the last crisis. Bertha, thank you very much. Appreciate it. Bigging we have a news alert on ibm. We have some details with regard to ib ms ceo compensation going forward. What we do know is that over 2014 she received an incentive bonus payout of 3. 6 million in addition to a 1. 5 million salary. For 2015 the company ib m will boost her salary by 6. 7 to 1. 6 million and have her target bonus be 5 million. Now, again, this is a 25 increase over what her target poe news bonus was last year. All incentive parameters must be met to meet the full 5 million amount. Shes also going to receive 13. 3 million worth of ibm stock in the form of a performance stock grant. That is going to cover the years 2015, 2016 and 2017 if all performance metrics are realized. She will receive that full stock grant payable in the year 2018. Its also worth noting here this is Ginni Romettys first increase since she took over in 2012. Its also a little controversial and we know this because ibm has been the worst performing stock on the dow over the past two years and you can see here over the last year down 14 versus a gain of 11 for the overall s p 500. This yeartodate its down 4 . So an interesting point here it looks like ibm ceo Ginni Rometty will have to meet a lot of benchmarks to get that compensation payment payable in full. Just a quick reaction. Are you surprised . Do you think thats why they chose a friday evening . Possibly. It doesnt seem like huge numbers. It sounds like it sends a pretty strong message to shareholders that its going to be incentive based. But how many people at ibm do you think get a 6. 7 raise nobody. Shes probably the only person who got a 7 raise. And she stands to make a lot more than that. Theres a lot of scrutiny on her. The stock is down 14 in the last 12 months. Which shows how hard a job she was given so she needs to be paid more. Exactly. Thats exactly it. Thank you, dom. Thanks, everybody. A double wham yea formy for the parent of Hawaiian Airlines. The stock plunging 25 on stronger dollar and the bad bet on oil prices. The carriers ceo tells us how he plans to get the name flying again, and could robots like these destroy mankind some day . These three guys think so bill gates, elon musk Stephen Hawking. Does that get your attention . Were back in two. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Bill gates, elon musk, and Stephen Hawking all great minds are our time and now all three warning about the threat Artificial Intelligence poses for humanity and thats certainly got our attention. Lets bring in university of oxford professor nick bosstrom author of super intelligence. Also anouningjoining me is max techmark. Nick, lets start with you. When you hear these warnings does it confirm some of what youre already thinking about ai and if so how worried are you . I think we have to distinguish the question of how far away we are from this in time from the question of what happens if and when we actually succeed in making machines that are as intelligent as humans. I think what elon musk and bill gates are saying if we actually were to succeed one day it would be dangerous to create super intelligence. Theyre not necessarily saying this is imminent. My view is that we need to put in the hardwork now work now to do the research to find out how to make them safe by the time we find out how to make them really intelligent. The main concern that were getting machines to the point of having as he put it human intelligence or is there concern about developments in ai separate from that leading up to that or associated with that . Well its clear that alt some point Artificial Intelligence will become the most powerful technology in human history, and thats why so many of the top researchers ina i have signed this open letter calling for researchers to make sure that we can get ai to do what we want it to do and thats why elon musk gave us 10 million also to run this Research Program to make sure we can get the benefits of this awesomely powerful technology while avoiding potential pitfalls. Nick, is your concern here that machines thinking, quote, unquote, on their own could then be motivated to do Different Things that are counter to human interests or is it simply the case that this is an extension of human intelligence with far greater capabilities perhaps for disruption or destruction . Its both. Well both of those. The reason the humans have more power on this planet than tigers is not because we have sharper claws or bigger muscles its because were smarter than the tigers. Before we go ahead and create something potentially smarter than us its important we do the research and make sure weve thought this through carefully, and as nickpointed out, even if it is far into the future the questions it raises are so tough we should get started on the research now. Nick, what is it that you think further research in this area is going to do . Is it going to somehow prevent machines from developing quasiintelligence capabilities . Isnt this ultimately still going to come back to the human motivation behind the deployment of all kinds of technologies . So the goal is not to prevent the development of Machine Intelligence. The goal is to figure out how to make Machine Intelligence safe. In a sense there is a race. On the one hand a lot of people are trying to build smarter Artificial Intelligence because they have a lot of economic applications. There are a much Smaller Group of people trying to figure out how we would control Machine Intelligence if we actually got machines that became super intelligence. Its crucial that we solve the control problem before we figure out the solution to the problem of how to make machines really intelligent. Yet it doesnt seem thats how developments happen max, does it . It sort of seems to be a case of tinkering and development and moves that even if people with altruistic intentions have no ability to control people in other arenas. We can learn a lot through past technologies. We humans whenever we develop a Technology Gives us great new possibles and potential new problems and the more powerful the technology is if you look at Nuclear Power or biotech, huge upsides, but in those fields its already very established we also need to think far in advance on how are we going to keep this safe how are we going to keep the benefits and avoid problems. Ai, now that its finally coming out of the labs and beginning to work and starting to have an impact on society with self dn driving cars and so much more, now is the time to start tackling these questions that nick mentions. A final question max, before we go here for people who are watching and wondering about some of the Companies Involved in this going forward, any names come to mind . There are a lot of exciting companies doing great things. Some of my favorites are googles deep mind effort in london who are doing very exciting things where machines really learn to get better rather than having to be programmed by hand sort of the oldfashioned way but i just came back from the Artificial Intelligence, the 2015 conference in austin texas, and there is so much exciting stuff happening on a very broad front. For me the question is really not whether the field will one day succeed in reaching these goals that theyve set out but simply how long is it going to take, and how ready are we going to be . Right. The important questions. Well leave it right there, gentlemen. Thank you both for joining us this afternoon. The third time wont be the charm for mitt romney announcing he wont run for president. How will that shake up the republican hopefuls . Meet the press Moderator Chuck Todd joins us now. If you wanted a ticket to super bowl xlix, what would it cost you . The shocking prices these tickets are going for coming up on the closing bell. Female announcer save up to 300 on beautyrest and posturepedic. Even get three years interestfree financing on tempurpedic. Keep more president s in your wallet. Sleep trains president s day sale is on now your ticket to a better nights sleep the race for 2016 just thinned out. Former republican president ial candidate governor of massachusetts mitt romney announcing he will not be running for president. For more on this story lets bring in chuck todd moderator of nbcs meet the press who was here a if youfew fridays when romney expressed he might run again. You expressed some doubt. Why do you think hes not . I feel like it was bain capital mitt romney. What i mean is it wasnt his heart that made the decision it was his head. He looked at this in a very sober context and knew that the First Six Months of an active campaign were just going to be very, very painful. He already saw a taste of it yesterday. Every day there would be a new story about some former romney donor or romney staffer signing up with somebody else. Hed see the poll numbers start to erode as republican primary voters kicked the tires of other candidates. So i think he realized that the primary was going to be so painful, was he willing to go through that part of it . If he thought he could be the nominee without a lot of work in the primary sort of the way Hillary Clinton is going to get to do it i think hed have been in. I think it was the idea of the gauntlet. Bringing in the panel in a second, chuck, but does that leave it wide open for jeb bush now or might somebody come in who we havent even considered whose name hasnt been batted around . I think the campaign started today. I think romney is the last domino. We know who it is. Today romney getting out, good day for jeb bush good day for scott walker governor of wisconsin. Good day for chris christie. I think hes got a narrow opening but hed have had no opening if romney and bush were in. Probably a good day for rand paul. I think the campaign has begun. All the candidates we know who they are. Chuck its sara. How does jeb, who seems he has the most momentum, how does he capitalize on the romney exit. What is the most graceful and smartest way for him to take advantage of this . I think it will be for the first four months it will be financial. Its the way his brother did it in 99 and that is to overwhelm almost like overwhelming force, overwhelm the field financially. Romneys Donor Network was as good as any that had ever been put together on the republican side of the aisle and before that it was the bush family that put together a network like that. Thats the opening for jeb is to overwhelm the field financially. The numbers from last campaign was 2 billion, 2. 5 billion, total spend. Just between the two candidates. This is how much can jeb bush raise by june 30th of this year . Thats when the big first i think the first big fundraising quarter well be talking about is the Second Quarter of the year right at june 30th. Could he do Something Like 50 million, 75 million, 10 million, some overwhelming number which i dont think is out of the question for the bush Financial Network if you throw in some of the romney network, too. Thats the jeb bush play here more than anything else. Look, hes got a lot of work to do with conservative grassroots but on the money front, this is a good day for him. Chuck, do you think romney got out primarily because he thinks i cant really win and maybe if i stay out somebody like bush if they get elected, gives me some sort of reward later, maybe an ambassadorship maybe something on the cabinet . Look i wouldnt mistake romney getting out as some sort of the tip of the hat to jeb. Jeb and romney have been quite distant for some time. I dont think its on that front. I really think this was about he wanted it. In fact, you know you could tell he still sort of wanted it even at the end of the statement. He almost sort of leaves the door just a crack for like a draft romney movement if the whole party implodes in the spring of 16. So i think this was about a pure calculation realizing the primary gauntlet might be too high a hurdle to clear. Ill confess, Michael Santoli, romney 2016 was my unofficial prediction. Apparently though continue hes having dinner with chris christie. Do you think christie has a chance to be the candidate here . Definitely its not my i have no edge on thinking whether he does or does not but i think the obstacles are still tremendous. I dont think romney getting out of the way is going to be decisive for christie. Can i throw in a data point. Chris christie, if you look at name favorability hes historically off the charts at the bottom. And, chuck, we have to go but that means theres only one way to go, right . I tell you, if i were buying stock, id be buying a lot of scott walker and a lot of jeb bush. And some paul. I wouldnt be buying much christie right now. Thank you, chuck. Really appreciate it. Tune in to meet the press sunday. Chuck will be talking to congressman paul ryan about his plans for tax reform and the prospect for working with this white house. Coming up Hawaiian Airlines not laying back today. Taking a beating on an earnings miss due to a bad hedge on oil prices. The ceo will be here to explain. But first, if youre thinking about taking a lastminute trip to phoenix for sundays super bowl, well tell you what you need to pony up to get into the game. Announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so when a market move affects one of your positions, tdd 18003452550 schwab can help you decide what to do. 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For all the nevers in life state farm is there. The Seattle Seahawks and the new England Patriots will kick off super bowl xlix on sunday and some might be thinking road trip, lets go to the game. What would a ticket cost you right now . Dave briggs is back and in phoenix with some super bowl sticker shock. Dave . You can probably buy a new car actually. Its not just shaping up to be the most expensive super bowl ever, its shaping up to be the most expensive sporting event of you a time. The cheapest Seat Available right now on stub hub. Com is just shy of 9,000. Of the 265 available on stub hub, the most expensive was 50,000 per ticket and the average on the secondary market north of 10 grand. Thats the most expensive ever. And even at that its you have to to find vivid seats shows zero tickets available. The question really is whats happening here . Is this the free market at play or are these prices being manipulated by speculation . I asked nfl commissioner Roger Goodell that question earlier today. We follow the various secondary ticket marketing companies. We want to make sure that our fans are protected, so we will follow that closely and make sure that everything is being done to protect the fan interest. So even the nfl commissioner does at times punt like his players. I spoke with will flaherty of seat geek. Com to talk about how the super bowl market is different and how this one is working . Distribution is very controlled. The other factor that comes into play when you look at the Consumer Market for tickets is theres a lot of short selling. Like short selling a stock, ticket brokers will short sell super bowl tickets. And will said that many ticket brokers he expects to go out of business because their bad bet these prices would come down. He said if you still want a ticket, hang on show patience wait until sunday morning. See if they come down. I recommend staying home, watching it in hd on nbc. Save a buck. Then you miss all the fun. Eric, this short selling phenomena, are you familiar with this . Were seeing like in stocks when you get a short squeeze all of a sudden stocks rally further than they should have and is that part of the problem . Were seeing some Patriots Fans getting tickets, now their broker saying they dont have the tickets because he got caught in a short squeeze. Is that part of the problem why were seeing such record highs, because everyone messed up the market on accident . Dave . What happens is you dont actually get sold a ticket. You get sold a promise in most cases. A promise that youll get a ticket in a particular section for, say, 3,000 with the broker saying i can purchase that for less and make a profit off every transaction. They bet wrong on that. Thats why a lot of people are empty handed. Not necessarily telling tickets but selling a promise. A lot like a market. You put it better than i could. Dave briggs here this afternoon. Have a greet time there this weekend at the super bowl. Of course you all can catch super bowl xlix sunday on nabsbc. Coverage begins at noon eastern. And Hawaii Airlines getting hit today but the ceo, mark dunkerley, is here next. Stay tuned. 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. Since just january, the start of the year hawaiian air stock has taken a hit, down over 25 . Ironically some of the airlines problems stem from the decline in oil prices because the company made a big hedge betting the oil prices would go higher. Were joined by ceo mark dunkerley. Thank you for being here. Youre welcome, kelly. So lets start with this hedge. How much is it costing you it costing you guys . I guess you were taken completely by surprise in the jump in oil prices here. I think that most people who have been buying oil over the course of the last couple of years were taken by surprise at how quickly the prices dropped. I dont think that our hedge position had much to do with our Stock Performance today. We dont hedge to speculate in the market. We hedge to reduce volatility in our Financial Results. That philosophy and that program will continue just as we are. I think what the market was reacting to is to two things yesterday. We announced a good 2014. We spoke with a great deal of confidence about 2015. At the same time we acknowledged revenue weakness in the First Quarter and that seems to what caught the imagination of the market today. Mark what is causing that revenue weakness in the First Quarter . I think that there are a number of things in the First Quarter. We have the effect of a stronger u. S. Dollar. We fly throughout asia. Most of the people on our airplanes are from asia and buy our tickets. They translate into fewer dollars than this time last year. That clearly has an impact and it is the same with a lot of Consumer Product companies that you cover. At the same time between north america and hawaii capacity is up about 10 year over year. In our Airline Industry that is quite a big number. I am imagining that is mostly coming from rivals. The move for people to travel to hawaii becoming more popular. But you are not seeing the travellers outsized relative to that increasing capacity . I think that is a good way to put it. Demand is actually very strong at the moment. We see no weakness in demand. We have an increase in capacity and the demand is not growing as quickly as the capacity has. As we look out to the year as a whole, the benefits we get from the much Lower Oil Prices so long as demand stays as strong as it is today, we are forecasting a much better 2015 than the already good 2014. Look at the airline companies. So much of the reporting is how they did on their oil hedging. There is an Airline Business and then an Energy Trading business. At some point wouldnt you consider like a rental car operation. You pay for the seat and the gas is on you. How far are we from some of the hedges going so far off . You put it on the consumers that they pay for their own gas . Let me just say that we dont we buy broadly the same volume of hedges whether we think the price is high or low at the moment. We are not running a business based on the future value of oil. We are trying to reduce the volatility in our Financial Results by kind of controlling a very, very important input to us. I think a lot of the business community, when they see the result, they look at it based on a trading approach. Let me put it this way, mark. Just looking through your results, your fuel cost was down 13 for the First Quarter. I am guessing you are not capturing as much benefits as the unhedged rivals would from the drop in oil prices. Is that right . Yeah. I think that is correct. But again, over time i think that both the hawaiian approach a approach common with Many Airlines and the unhedged approach. Over time we will all be paying the market rate. The issue for us during the time when prices go down we have a period of time we are paying above market. But we get that on the swing when the price of Oil Goes Back up. It is just a different approach to managing your exposure to the market. On the demand side you mentioned you have a lot of travellers from asia. Have you seen a slow down because of weakening currencies or weakening Economic Growth and weaker demand . You know we havent. The demand picture out of the asian destinations has held up really very, very well. If you look at the revenues that we are receiving in their local currency terms, they are up as a group. We are very pleased with that. When you translate that into dollars, given the change in the Dollar Exchange rate that is where we take the hit. Mark thank you so much for being here. Mark dunkerley, ceo of hawaiian. Best of luck. The dow is moving triple digits. Next we will preview what will rely ahead for fb and a interview with rand paul. I will talk to him about his push to audit the fed, his tax proposal that could compel apple to bring some of their off shore cash back. Welcome back. There it is. We closed out january, on kind of a weak note. Lets take a look ahead to february which is a better month recently for the markets. What are you going to be watching mike . An overbought treasury market. If that does happen i think the rest of the Asset Classes can steady themselves. That would be a first. You know yields continue to defy expectations. The jobs report is out next week. We also get manufacturing reports, including china over this weekend. The strength of the u. S. Economy, which has been an island in a global storm and why money is rushing into the u. S. Dollar and whether it will continue to rush not just into our bonds but stocks as well. That is right, eric. What are you watching . Earnings next week. They are go to give us an indication for how the rest of february will play out. People were spending on the gas savings, fast food and e commerce. We should have known what amazon was go to do. Thank you all for being here. That does it for us here on closing bell. Fast moneyis coming up in a few moments. You know what did really well . Biotech. Check out the big move up 18 . And also a top analyst, two about picks, breakout stocks in 2015. Intercept, that is hardly even a big move for them. Exactly. All right. Straight over to you guys. Fast moneystarts right now. Overlooking new york citys times square. Late day rally in oil and selloff in stocks. Apple, googles and facebook earnings behind us. It is twitters time to be front and center. Biotech is rallying. We have an analyst with two under the radar picks. Oil soaring 8 after baker hughes released the latest rig count data showing the number of rigs fell by 94 this week this. Is one