The flat line on this monday afternoon, one day ahead of Janet Yellens testimony on capital hill. Open to the most important hour of the session. 60 minutes left until the closing bell. We are your first trade. Was that the correction . Was that it . Are we done . That is the question. I think people will sit tight and see what janet yellen has to say. You cannot believe that were going to see this before. It is a wait and see kind of boat morde. We have three stocks we are keeping an eye on. With apple. Rt this is a story you have been following very closely. You will be talking about it more in depth. Carl icahn is giving up in his quest to push apple to buy back more stock. Tim cook telling the wall street journal that apple has bought back 14 billion more of the stock, bringing it closer to the girl the goal. They are recommending that shareholders vote against his for postal. He will have to abandon his shares there. Tolook like hasbro was going fall. They missed estimates. They fell first as a years earlier. Girls toys are faring pretty well, up 19 . The boy still falling 16 . People seem to be focusing on the girl sighed. Tesla shares are trading once again at a record. There does not seem to be in the galvanizing news. Be analyst did point to sales in europe and china as one of the reasons for the move upward. Tesla mixing want to get a drivers license. You can dust off your countdown clock. We are closer to a debt ceiling agreedif congress is not by february 27. It could run out of cash. Peter cook has the latest. It seems like the House Republicans are meeting today around 5 30 p. M. Are we any closer to a deal . Goes is not so secret what on. It will be a secret briefly until it gets only out. This meeting tonight is probably the stage before we get to a deal. John boehner is going to sample his conference, find out exactly where they stand, and make an offer to them on what they should ask for an exchange. Is already running against john boehner and the republicans. You see later on House Democrats are out of town for their retreat. You have both the house and senate out next week. February 27 is when these extraordinary measures get depleted. Jack lew says we have the risk of running out of cash. It may not be enough to handle the tax refund in daily expenditures the government has. Lawmakers are not here to cut a deal before then. I feel like were always talking about this once a year. What makes this more extreme . It is not more extreme. Neither side wants a crisis. A do not want another showdown but they have to come up with some sort of deal. Republicans behind these closed doors have to come up with something palatable to most of them around the conference table. There will be about 30 who will not vote for any increase whatsoever. John boehners looking at ideas that maybe could attract democratic votes as well. Election. T the most likely path is reversing the costofliving adjustment for the military that is part of the budget deal. Neither party likes that right now. We have to pay for that as well, 6 billion bucks. Thank you. It is time for our big story. Tomorrow morning janet yellen is going to get her first testimony as head of the central bank. Investors will most likely be hanging onto every word she says. Expect,tell us what to we have our guests. Give us a preview of what we can expect. You cannot have had a better event like a weak jobs report two months in a road leading into her testimony tomorrow. You have the first testimony from a fed chair. In front of congress. It will be about jobs. Passionatelyvery about jobs more so than inflation. Dobbs is her central focus. Is correct. Jobs is her central focus. That is correct. Same focusect the tomorrow. More taper talk tomorrow . I think they look beyond the taper. Tohink they are going highlight it. There will be some serious differences between the Senate Confirmation hearing which emphasize more than people were expecting the regulatory mission. Topics i expect to be more highlighted more prominently include the international measure of monetary policy. Emerging markets . X but not limited to that. Last weeks have shown a spotlight on Global Growth that have emerged. What can the fed really be doing to try to assist on the Global Growth efforts . There isnt very much that they can do. What people are saying is they could sound a little more concerned is what it comes down to. Makexpect maybe she will some soothing remarks along the lines of we understand this has impact around the world that it is our job to take care of the u. S. Economy in your job to take care of your own. It is important to realize that when shes speaks tomorrow, shes not getting as her point of view. It is supposed to be the view of the entire open market committee. It will be a little more balanced than you would expect. Are we going to hear some sort of 2014 reelection campaigns tomorrow when they drill her on the policy here . Or the chairman of this committee, it is not really about politics here at this is court fiction stuff here and he has wrote problems of what happened to the Federal Reserve under ben bernanke. Of whats real problems happened to the Federal Reserve under ben bernanke. I think is going to go after her pretty hard on what the fed mission is, the expansion of the Balance Sheet which she is opposed. I would imagine her to have a tough time. He wants to set the template for the fed hearings going forward. He wants to send a message that republicans are going to watch her like a hawk. The last two jobs report have not been very good. Might there be some contingency saying why are you pulling back . Why you are tapering . Aybe we need more of the same that will be coming from the democrats saying maybe we need more. Chuck schumer said to ben bernanke in 2012 get to work, mr. Chairman. We are sure the democrats will weigh in and talk about the impact of sequestration and the fiscal policy impact on the economy will try to get her to say whether the republican policies are hurting. The elephant in the room is really in inflation or lack there of. It is only at 1. 1 . Yellen bey will janet talking about that tomorrow . Will she be able to . I think so. It is related to all the talked about jobs. How much slack is there in the labor market . I think janet yellen will highlight those who are jerkily unemployed, unemployed for , those who have fallen out of the labor force, millions of extra workers who are potentially ready to step into the work force. Does that jerkily relate . S will improve. The workers are more fully employed. Pretty incredible when you think of everything they have done. It is surprising to a lot of people including those in the fo and see. Fomc. You would have to bet against it. There would be questions to ask. You would want to know not how much slack they think but can they wait until it gets higher without going into too much ego speak . Can they let inflation run a little ahead of itself . Do they feel they have to get in front of it . What is her philosophy . When you take a look at what congress is saying, are the even thinking about inflation . They do care about inflation. Some republicans will raise the threat of inflation down the road. They been talking about it for a while. The thing im going to be watching for most closely is the performance. The firstke, i member couple of times he testified there was a little bit of a lip quiver. She has testified a bunch. I am not sure what kind of janet yellen we get. Shes the kind of person that can tell markets. You bring up a very interesting point. I just wonder, this is the first female head of the central reserve. Dan clifton, how much of that comes in . When the fed tries to respond or not respond to a taper tantrum, the fact that she is a woman trying to deal with this, regardless man or woman, you walk in their and it is your tghehere and it is your first wk on the job. Does she have to be extra strong because shes the first woman . She does not have to worry about her tight. Every fed chair has been tested upon coming into office. This is happening a little bit sooner than previous chairs. Shes very smart. Shes going to be very prepared. I think shes going to do very well. If she does, she starts building that capital earlier where the markets begin to trust her. To the market trust her or do they want more of the same qe . We are tapering. Overtime, you have to get used to help to who this fed chair is. She is very different than ben bernanke. In the financial times, it was written every chairman seems to get hit by a crisis in their first year. Whatever might blindside janet yellen, she started off with a problem that affected none of her predecessors what do you think about that . That is true. Guidance seems to have gone by the wayside. They spent an awful lot of time saying why they were not paying attention to the 6. 5 rate. There are some other things they could do. They are more radical. They have less of a chance of it of success. Lets hope not. We have to leave it there. Thank you. Do not miss tomorrow. Im going to be hosting our special coverage of Janet Yellens first testimony before congress. By the pimconed managing director bill gross. Make sure to tune in. We will be live on capitol hill from 10 0012 00. , is carl icon backing down icahn backing down . The pot industry maybe foraging. Now there arson new headwinds facing the state licensed marijuana businesses. We will tell you all about it. Back in two. Disconnect, a material disconnect third a little insight and action. Here is the data. To whichat the extent the materials sector has beaten earnings estimates over the past quarter i16 . That is four times what we have seen out of energy, tech, health care, and industrials. Expectations were that low. Here is why that disconnect becomes poignant. Look at the difference between the materials and white and s p in yellow. They are doing significantly better than all the other sectors yet the stocks are still lagging. Just look at what the companies are saying. The disconnect continues. Or perhaps it is in response to this disconnect. At nucor, inc. And america is adding to his number one list, mosaic upgrading after the earnings. When you have a disconnect like that, earnings estimates coming in here. The stocks are down there. You can see how companies respond. The 12 companies were earnings estimates are going up and the stocks are still down. I do not have time to give you all 12. Do not worry. I will post them on twitter ajinsight. Sochi opening ceremonies. We have all been glued to the television over the past 30 days. Why did Vladimir Putin gain during the Opening Event . One to join us is an expert russian global relations. Welcome to the show. The opening ceremonies, i felt a real lack of joy. It felt very oppressive to me. What did prudent gain putin gain . From having be games go on. He has invested a great deal of personal prestige in this entire event. He is hoping to make it a success as to validate not only russiasule but reemergence as a great power. Who did you think you is talking to the most . He has many audiences at all times. He is addressing International Audiences that have been crude cool of him. Hes also speaking to the homefront. He is attentive to what is going on in russia, where there is always a debate going on between people who like putin and people who cannot stand him. He wants to reemerge as a great power, russia to reemerge as a great power. It would help if all the rings lit up. Right . For sure. Russian tv saw something very different. Think about these opening ceremonies, there have been amazing opening ceremonies like china in 2008. He did not quite full but off. Pull that off. This was his cherry on top. Is it . Nothing about everything going on. People have been complaining about the conditions they are living in. It does not feel as though russia is coming off this with a high of any sort. Theres often a lot of negative coverage in the runup to any olympics. Before beijing, all we knew about china was that it had very bad smog in the capital city. Before sale, there was a lot to talk about the tax encryption. When the games begin, the focus begins to change. Theres one important things that russians were emphasizing. That is something the deeply care about, and their culture. What part of this is western prejudice when we look upon the opening games in russia. You brought up china. Beijing was not ready for their olympics. Salt lake definitely had corruption scandals. We are focusing on how badly russia is doing. It is understandable. Flashy event. About thes is wasteful spending on the games. This is not just americans piling on. This is about the nature of putinism. Is there a bias . Run it to the olympics with so many lawmakers saying they would not go there. They were advised against it. Russia cannot handle the security concerns. Was that deliberate . America starting to feel a little bit threatens. This is a chance to say maybe we should not be going there and maybe bring down some of the games. I would hope not. I guess there are some of that going on. Syria was a big moment for putin when he was able to get the u. S. Off the war and get the deal of the chemical weapons. The most powerful man in the world. Thank you. Clifton, you are staying with us. Thank you so much. We appreciate it. 26 minutes after the hour. Bloomberg television is on the markets. Have a mixed picture today. You have been talking of people waiting for Janet Yellens testimony tomorrow. s work is done. He said he will drop his campaign urging apple to buy back stock this year. Investors vote against him. Apple is pretty much done exactly what carl has advised. While reporting earnings last week, apple announced it bought by 14 billion worth of shares, ringing repurchases back to 40 billion. Company . Billion for a is it time for you to work your money into apple space . Cory johnson with the story. All right. Did apple basically do what carl wanted . Cory johnson . No. He wanted a lot more. He recognized he wasnt going to get it. Almost 50 billion. I know he wanted 50 billion over three years. Good going to say what is to happen over the new two years. He wanted more. He did not get it. Here is what happens. You have pension funds. You have some sort of mutual funds that are required to listen to iss less they get sued. They do not direct their voting. In the scheme of things, how important is iss . They are important. Thinks thel icahn mission was accomplished. They bought 14 billion back in two weeks. Apple feels good. No one pushes them around. We are the boss. The big winners are the shareholders. Shareholders win on this. I think there will be more cash just a patient from apple in the coming months. Do think that will be a result of more agitation on behalf of carl icahn . Do you think perhaps he will get out of the stock having seen as much as he has seen . It is not just cara icon. Carl icahn. Apple inhorn agitated 2013. They came back with a massive cash distribution. It is a Shareholder Base agitated with the cash to build up and different players are coming in. What is the effect on the stock . You imagine your book will do pretty well. There has not that been a ton of an affect. August 13 he disclosed the stake. Not that much happens. You do see the stock grinding higher over the next few months. If you look at the last two times or he up to the state, stake, stocks pretty much did nothing. There are other factors. Apples disappointing earnings. Owns less the 1 of overall apple shares. Cannot move the needle that much. Overall trend higher . Yes. I think the stock still has momentum near. It is trading at eight times cash. They have a new product category on the way. The sales cycle bottomed likely in the upcoming quarter. I think apple is still an attractive value. Lets talk about activists themselves. You can call 2013 the year of the activist. It is extra ordinary how much we have heard from these folks. They have had quite an effect. In some cases, extremely good. In some cases, extremely bad. And agen a new day were an activist has a lot more power to make management move for change . 30 years ago these were the barbarians they gave into the guys no one wanted showing up. It is generally perceived that a , that the shareholders ey can actually affect serious change at companies that may need a shakeup. In this case of apple, you have respect. N with much he is a tiny shareholder with a really loud voice. Who is able to agitate for some kind of change he had no power to get with this tiny holding. The voice of the Little People there. I am all for it. We need big mouths in our business. Walk us through what activism means for share prices. Have too3, here you much of returns. 140 rate muchst higher than the s p 500, up over 70 . Higher than all hedge funds combined. Overall, three beginning a lot more momentum compared to other forms of returns. We are going to leave it there. Thank you very much. Great to see you. Or kimup, troubles armstrong again. We will go inside the latest minimum management gap. The tricky business of being a legal pot dealer. Evolving federal policy over marijuana coming up. 20 states have laws legalizing marijuana in for some. It is still illegal and federal law. It makes it difficult for state licensed marijuana businesses to get and keep the Bank Accounts. In late january, eric holder said he would issue guidelines for banks working with state sanctioned marijuana businesses. In the meantime, some of the shops are being forced to operate like illegitimate businesses. At the end of the day, this Small Business cleans up in more ways than one. He is the owner of a state licensed marijuana dispensary. He shuts the blind and locks the doors. Before he counts the days take. Ofthis night, e has a lot money to count. He has been dealing only in cash. This makes me nervous. Hisf the banks that ran transactions figure out what he was selling. Wheelock American Express and then one day we did not have the ability to process credit cards. We got an email saying you are being cut off. In the eyes of the federal government, it seems he is selling an illegal substance. How do deal with an all cash business . It is very difficult when you are storing and moving cash and having to pay people in cash. All of that in cash . A lot of people are operating on a 100 cash basis. I am aware people there been over 20 banks. To make matters worse, shortly after it stopped working, his other banks shut down the rest of his accounts altogether. A letterent saying we are setting your countdown. We pushed back. We got United StatesCongress People inv