The rise in inflation we heard about this morning the Consumer Price index, cpi, up from a month before meaning grosh groceries to gasoline are more expensive, transportation to retail to restaurants, we have the impact in a moment, but, first, lets get to bob pasani and talk about the surge for stocks, bob, what happened what whang changed . Look at the vix, it was down even this morning when the markets were down prior to the open on concerns about the cpi better than expected all the people who panicked had to unwind with the option explorations telling you they are not as worried about volatility in the next 30 days as what the vix measures, a good sign traders believe theres less panic in the market. Number one number two, look at the groups moving yes, inflation is a concern, but rates move up, banks outperformed here today, outperforming again. We see Interest Rate stocks sell off, and that happened in january, going into february as well, so, again today, utilities are down, at t is down, vornado all down here. Outperformance from growth areas in the market Like Technology stocks, that have been outperforming, although they are down in the last week and a half, they performed better than the overall market same with industrials. The railroads, the aerospace, your deep industrials like caterpillar, they all outperformed in the last week and a half, although, they are still down a little bit more puz pzling to me, frankly, retailers one reason the market could be going up is because less chance of fed raising rates with a disappointing retail sales number, but retails are on the upside hereme menthere. The possibility is the belief that the tax cuts help retail overall and the consumer thats a positive explanation. Tough things to explain today. Back to you. Over to Mike Santolli on post nine creating the conversation we had awhile ago where realistically, this is a market seeking e quill libri librium. Right the tension is draining away youre obviously taking back some of the losses that seem to be caused by a lot of the mechanical panicked selling. This is a market thats been trying to make some accommodation with the prospect of were going to have a higher range for bond yields and potentially a little bit of an upward risk for inflation. Why is the market up today dramatically starting in the middle of the day when, in fact, it sold off hard at the first sign of Wage Inflation weeks ago . Well, one thing is that the tenyear yield on february 2nd hit 285. Today, its 290, thats not a big difference s p 500 is 6 lower since then you had a haircut in stocks. You had time to decide this is the new world were in, and bond yields may be are not really taking flight. Nudging higher, but maybe they are not just going to be tearing through 3 i agree with that about 2. 9 . Guys, stay right there breaking news on a School Shooting in florida. Lets get to sue with whats happening. Reporter a shooting has been reported at a high school, in parkland, florida, the wtbj, our affiliate in the area, live video showing multiple people on stretchers put into ambulances we do not know the status of the casualties the schools in lockdown at this time it is a medium sized high school from what ive been hearing from the local affiliate there. The shooting occurred about 45 minutes ago. Thats the best estimate you can see live in the pictures, the officers with the dogs, we have also seen assaulttype of vehicles surrounding the high school. Its not visible in that shot, but if indeed its like magic, pulling out at the time id like them to do that, and pan to the right, you might be able to see assault vehicles theres reports of multiple casualties, reports earlier of people put into ambulances we do not know numbers or the status of the victims or whether they were students or teachers the school is in lockdown. Everys been told to shelter in place. This is the majorie Stone Douglas High School in parkland, florida. As soon as we know more or thoughts that give us more information from our local affiliate, well bring it to you right away back to you. Continuing to follow the story for us, mike, bob, thank you very much. Back to the inflation concerns in the market now rising prices raise concerns about that, a raert eporter is standing by. Kate rogers looking at restaurants, and Morgan Brennan in the stratransimportanports. Transportation services up 4 from a year earlier. According to the labor department, auto repairs rose, and Auto Insurance really spiked thats one reason stocks passed gains today, progressive has been pretty robust airline fares, however, those fell 5 from a year ago as more competition leads to a price war, but do not let that fool you. Inflation is manifesting there as well. Brent up 14 over the past year, fuel is becoming a bigger part of airline expenses, trumped only by labor costs according to the aita, and Passenger Airlines like american and continental, delta, that means more Cost Management if the market does not support higher fares. That said, different for didn denting. You can see from this chart, dnc solutions, it shows dramatic spike that weve seen in drive van spot rates record highs signals more demand than supply. They do not expect that dynamic to let up, especially because youre going to start to see the Contract Price move up to go with that spot market price as the year goes on thats your benefit truckers like snider, werner, but its bad news for retailers and other shippe shippers this is the reason why a company like tyson predicted higher meat prices later this year you got higher labor costs, higher shipping costs reported, Higher Commodity Prices being reported, and where possible, it might expect to see that push out to consumers as higher prices as well back to you. I have to say, i was on the road this past week, and just up and down i95, that corridor there, i saw more truckers than i think ive ever seen before. Its amazing amount of transport going on right now morgan, thank you very much. Absolutely. Speaking of airlines, theres an exclusive tomorrow with the ceo of boeing, along around 9 00 a. M. Eastern time tomorrow here on cnbc. And with the markets hitting highs again for the day right now, the dow up 250 points, lets get to kate rogers for more on how inflation could affect restaurants bill, well, inflation might not be a bad thing for restaurants according to analysts i spoke with today. First of all, the gap between inflation at the Grocery Store and restaurants is smaller, 150 basis points or so, so consumers may eat out. Wholesalers like tyson may absorb the costs, which is good news for restaurants, but long term, its easier for them to pass prices on to consumers, especially if consumers are already being hit with inflation everywhere from the gas station to the Grocery Store plus, one thing to remember, tax reform means more cash in consumers pockets and added pad to Industries Like the restaurant sectors many mentioned inflation, so far mcdonalds was up 3 year over year, but expect that to be back in line by the end of the First Quarter. Chipotle said they save on 5 Wage Inflation by offsetting that with fewer promotions, lower insurance, and benefit costs as well. The partners also crunched numbers for us, and theres six surprises in terms of the upside since 2010, one month after those instances, your best bet in terms of return and reliability in order would be starbucks, dominos, dunkin donuts, and the worst are yum brands guys, back to you. All right, well see. Thank you. We are watching the retail ers and how those stocks are impacted this could be selfinflicted. Follow along here. The cti report had an increase of 1. 7 from december no january when it comes to prices consumers paid for apparel this is after four general deflation years. You see the price of apparel apparel prices have only increased month over month twice in the last year it is curious this price jumped up in january from december because january is typically a big clearance month for retail, but theres two things going on that could be supportive of the higher prices. First, retailers had higher inventory going into the Holiday Season and generally strong sales, so theres less to sell as discounts are in january. Second, many retailers and brands are actively working to wean shoppers off discounts getting us to pay full price more an. It looks like its working ralph lauren, michael kors, owns men as warehouse and jos a. Bank and more, they already said items have increased because they let it do to. Retail sales go out today too, the ideal raw number was disappointing. Look inside. Clothing sales increased 1. 2 last month, and Department Store sales improved. 8 , but shoppers are buying srt up 2 . Department stores, macys up 3 , kohls up 2. 5 specialty players are up, Urban Outfitters up 5 higher prices are being toler e tolerated by shoppers, and for retail, thats a good thing. Kelly . They are loving it, thank you. Inflation fears spooking the market a little bit, but now the dow is up, so who knows. An array of things could be keeping inflation in check like robots taking jobs, keeping wages down, global competition, Online Shopping, and its the era of low inflation really over lets talk about it now with observers of that, Julia Coronado is here at post nine, and also with us, chris, managing director and chief financial economist at Mufg Union Bank good to see you both julia, what do you think, globalization and technology kept inflation low all these years . Yes, they have. Is that era over . No. It is not over, and, in fact, what was started in the good sector, Online Shopping in retail, its now rotating to the services sector. Think about what uber and air bnb and what service apps do, the does ripisruption is ongoing theres some cyclical upward pressure, but compared to prior erro errors, it is muted and likely to stay so amazon is getting into health care thats something to watch. If that sector gets disrupted, itll be hard to see higher inflation. A big sector do you think this is an Inflection Point more signs of inflation we got more Wage Inflation and employment report a week and a half ago, that friday, and then, today, we get core inflation, look at the core, thats the trend, up 0. 3 today for the month of january, up. 2 last month. It looks to be accelerating. In the very least, all the fed members who talked and warned about the worries of the inflation, all the ideas about deflation in the middle of last year, forget about it. Its gone. Inflations headed back to the 2 target. What is shocking is that the fed is so far behind the curve they are miles away from putting rates to normal levels the only thing i wonder, viewers wonder, how long have you felt this way . In other words, you know, people say economists have called nine of the last three recessions, and you had zero Inflection Points on inflation. I felt this way at 8 30 this morning. No, but, i mean, all were talking about is that inflation were not in deflation, okay . Two more months from now, were going to see, remember that cell phone data plan, they gave you more data a year ago last march . Thats going to wash out of the data in two months, inflations going to go up. 3 higher two months from now. How do you reconcile your thoughts on low inflation with this mornings cpi, and i dont know if you know, the fed just this afternoon out with the report on inflation for january, 3 it saw. Okay. Lets start with this mornings number it was. 3, matching last january. The months leading are volatile, leaving the year on year pace steady no acceleration in the annual pace of inflation, and, in fact, its still below 2 . On core on core inflation dont get over our seats here. Its welcomed. Its good news, first sign that the fed can achieve the 2 target the feds measure, theres a lot of survey data and Market Measures in it, so lets stick with the feds target, core pce inflation, its at 1. 5 . Itll probably stay at 1. 5 , again, given last januarys strengths, with this january reading, so we still got we are not behind the curve theres room to run for them to get to their targets do you think they are doing in terms of rate hikes this year, 3, 4, Something Like that . I think they are going to stay on track with this number this is welcomed news, what they have been projecting, right . Projected it nine out of the last, eight, nine years. This was the first year they were able to execute the plan, and if all else equals data this morning say they can execute their lan, again, they are dat dependent. It depends on how the economy is off. Okay, julia, chris, good to see you both, thank you for the thoughts were glad you disagreed thats what makes the market all right. Back to sue now for the latest details on this high School Shooting in florida. What do you think, sue an active situation in parkland, florida, at the majorie douglas, the parent of a child in lockdown inside of the school tells cnbc that the shooting, according to his child, went on for some time there are reports of victims you can see some of the students that have been leaving the school the shooting, according to the child, went on for some time, there are media reports of victims. The numbers are unconfirmed. We want to stress that they are unconfirmed of upwards of 20. Once again, nbc has not independently confirmed that we do have reports of victims. We have seen ambulances. We have seen stretchers. We have seen students running out of the school. The local street around that high school have all been closed the school is on lockdown, but it is a Large High School. Several thousand students, so they may be able to get some of the students out of certain parts of the high school that are not affected by this particular shooting. It is an active situation. We hear the shooter is still at large. The assumption is, and, again, that is unconfirmed, that the shooter is still inside the building, but we do not know that, but there reports that are unconfirmed, a victim, possibly as many as twenty or upwards of that its a live situationment youre looking at live footage from our affiliate. There you see some of the assault vehicles i mentioned earlier. Its a fluid situation were watching it. Well keep you posted. Guys extending it to break, i think, and back in a few minutes with more on closing bell mom and dad got a new car. Its not theirs. Its mine. Mine. Mine. And it always will be, forever and forever. The new rx 350l with three rows for seven passengers. Experience amazing at your lexus dealer. Today, a focus on innovation in the Southern Tier is helping build the new new york. Starting with advanced manufacturing that brings big ideas to life. And cuttingedge Transportation Development to connect those ideas to the world. Along with urban redevelopment projects worthy of the worlds top talent. All across new york state, were building the new new york. To grow your business with us in new york state visit esd. Ny. Gov. Toyou know whats not awesome . With ugigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Welcome, now housing data, a surprise with newly built homings, heres more well, kelly, higher Interest Rates hit the Mortgage Markets hard last week volume down 4. 1 for the week and up 3. 5 compare to a year ago. It was calmed buyers who drove the drop with purchase applications down 6 for the week, and home buyers are facing a record low supply of homes for sale, creating head hot home prices Mortgage Applications to refinance are lower, falling 2 for the week, and average rate on the popular 30year fixed rose to 4. 57 from 4. 50 , with 20 down thats the highest in four years. The interesting part, while Mortgage Applications overall have been weaker, those who purchase is newly built home, up 18 in january builders are clearly benefitting from the lack of supply in the existing home market the only problem is that new homes, of course,premium, and a rates rise, that cuts into affordability, especially for those higher priced newly built homes. Kelly . Diana, thank you, on the latest for housing more on the latest of the School Shooting in florida with us now, former fbi Swat Team Member kevin, thank you for join iing us last minute notice. Those who just joined, theres been a School Shooting in parkland, florida, 50 miles due north of miami, hearing about possibility of victims there, but local authorities there, kevin, said the shooter is at large. This is a very dangerous situation right now. Who is in charge right now do they bring the swat teams in, the fbi come in . How does it work right now well, typically, theres different layers you, obviously, got the patrol guys that are the closest. They are going to respond. Almost always really wellprepared for these sorts of things, the worst thing on their mind, and then you always have, then, the tactical teams that can be close by ain police cars or mobilize from the station, and then, i think, like in columbine when i was there, if its big enough, they put out a bunch of requests for other agencies to come in. It depends on how the town is set up kevin, details are sketchy right now. So what are you looking for to gauge the size and scope of this event . Well, you know, obviously, t