First, get you caught up on the markets. Kind of a meandering day. A few economic bits of data out today. Other than that, not a lot going on as far as Economic Data go. Were all just waiting to see that white puff of smoke come out of washington and nothing yet so far. The dow virtually unchanged right now at 12,966. The nasdaq is down seven points right now. Well talk with seema mody about that. And the s p 500 index at this hour is down 1. 80 in change at 1407. In todays closing bell exchange, we go over what is going on as we head toward the end of the year. Seema mody is at the nasdaq today. Jeff, what do you make of whats going on in washington . Im most interested in the fact that the markets have lost the volatili volatility. Were not seeing the markets respond to every single statement that comes out of washington right now. What do you make of that . I think its the same washington waltz we saw last year. They didnt extend the bush tax cuts until december 17th. They didnt handle the payroll tax until december 23rd. I lived inside the beltway. I have a pretty good network on the hill. I think theyre going to have some kind of staged in agreement and then agree to attack the entitlement situation in the new year. Michael, what do you make of whats going on . How do you try and trade this . At least we had some volatility the traders could trade on. Now we dont have that. I think the lower volatility is telling you this is an extremely resilient stock market. Ive been calling this the rocky balboa stock market. The entire scenario playing out is the fiscal cliff ends up being bullish no matter what. Spending cuts makes bonds rise, yields fall and making stocks paradoxically even more attractive. They become the new bonds. Alan, can you tell from option activity which way the markets are betting right now, presuming that not going over the fiscal cliff would be positive for stocks and going over the cliff would be negative . Whats the market betting on right now . Well, i wont even make that presumption because we dont focus on what the event is. We focus on how the market is going to react. The vix has increased a little over the last week or so, but its still at a historically low level. I think im very encouraged by the price action weve seen where we made this bottom and followed through last week, which is key, and were Holding Strong this week. I i think the key for the market is to follow the dollar. Were below 80. That can really add another boost to the markets over the longer term. Thats positive for corporations to get some more growth out of this overall strong trend we already have. Seema, we talk often about those Industry Groups that would be most affected if we go over the cliff, if we dont go over the cliff. What about technology . Bill, i was speaking to an analyst. He says the fiscal cliff is at the forefront of investors minds. Thats why were seeing shortterm profit taking in tech. However, on the long term, there are strong secular trends that support attractive growth in technology. The famed tech internet analyst of the 1990s came out with her most recent updated industry trend report. Im going to give you a couple of those stats. Mobile traffic now makes up 13 of web traffic versus 4 back in 2010. Overseas in markets like india, mobile internet traffic has surpassed desk top internet usage. The reason i bring those points up, there does seem to be a lot of internet for tech firms to capitalize on the growth were seeing within the tech space. Over the long term, there could be a big opportunity. Jeff, is there a group you feel comfortable investing in right now whether we go over the cliff or not . I like the tower stocks. I think the computer is eventually going into your cell phone. You can think of the Tower Companies as real estate. Cell Tower Companies. Yeah. You need more bandwidth, hang another device on the tower. I like the obesity thing as the baby boomers approach their diabetes years. Speak for yourself there. This seems to be some of those major trends happening in the world, whether it be living longer or obesity or some of those things that are structural in nature. So are those hmore resilient thn other areas . I think those things have long legs for a long time. Michael thompson now joins us here on the floor of the New York Stock Exchange. Welcome to the conversation. Are you inclined to stand back and wait for something to happen in washington before you inves anything, or are you jumping in right now . What were seeing is a lot of folks are just chasing income. Were seeing it with our dividend funds. Theyve been outperforming in terms of gathering assets like crazy, even though they dont always have the best track record. Usually its really interesting when you watch money flows. You see 12month track records dictating where the funds go. What were seeing is investors climbing into the Dividend Growth funds. I think people are going to continue to do that. I dont think you wait. Michael, the question i always ask when asking about dividend payers is does the reason to own dividend payers change if we go over the cliff and dividend taxes go from 15 to 44 . Would you be peeling back . I knew you were going to ask me that question. I already have my answer. Good. Broken record on this question. Some income is better than no income. I think thats where people are. Were in a greatly diminished yield environment. People scramble for what they can. If you think yields are low know, a lot of investors think they could even go lower. Its unbelievable how low the yields are in the fixed income markets, but again, i think youre going to see compression with those types of stocks. I think what youre really going to see is dividend policies revisited contrary to the fact that from a tax point of view, folks are going to be basically less likely to buy dividend stocks because investors want income, and thats the only place they can get it. Michael, we get a handf fufu companies every day declaring dividends. Theyre accelerating the payment to try to beat out the fiscal cliff. Would you invest looking for Companies Like that right now . I think youre seeing the top of the dividend trade. I think if anything, whats going to end up happening is a focus back into cyclical sectors for 2013. You want the global trade. You dont want the Domestic Trade anymore. Youre not going to be jumping on the bandwagon here just because companies are announcing this special dividend . I think this is the final surge. We may see a real move back into cyclicality. All right. Folks, thank you all for your thoughts today. Appreciate it. Michael, wasnt that worth getting to the New York Stock Exchange for today . Thanks for being with us today. Appreciate it very much. Meanwhile, as we see move gold prices below 1700. This is the lowest price weve seen since november 5th. A lot of factors at work. We saw the plunge at open of floor trading here. Traders saying it had to do with the liquidation of a lot of global macro funds as well as some tax selling here as we approach the end of the year. With prices at these levels, the key level is around 1675. We saw more options activity today with puts being purchased at that 1675 strike price. That could perhaps be a magnet to send prices even lower. Back to you. All right, sharon. Thanks so much, sharon. Moving on as we do, netflix scoring a big movie rights win. Our Julia Boorstin is in los angeles with details on that. Reporter bill, netflix shares are soaring more than 13 right now in a major deal with disney. Netflix has beaten out pay tv channels for rights to disneys valuable catalog and its new titles starting in 2016. This is a landmark for fnetflix. Its the first time it rather than a Premium Cable Network has secured these rights from such a big studio. The fact netflix has a similar deal with Dreamworks Animation puts it in a position of strength when it comes to ondemand kids content. Theres no comment on the financial terms of the deal, but netflix must have paid up pretty big to win over disneys studio. Maria, back to you. Thank you so much, julia. About 50 minutes before the closing bell. Much more on that deal. Thats huge. Did you see the move on netflix . One of the biggest movers on the day for sure. We have a market fractionally moving. The Dow Jones Industrial average up about 20 points. Theres netflix. Big move. Companies are actually borrowing money to issue those special dividends in some cases because theyre hoarding cash overseas to avoid taxes. Smart business . Important Cash Management . Well talk about it coming up. Then a lot of excitement around here at the New York Stock Exchange downtown today. The nyse getting ready to celebrate its 89th annual Christmas Tree lighting. Ivanka trump in the middle of it all. Shell be with us in a minute to talk about how her familys companies are preparing ife ini fiscal cliff. And a developing story here. Ron is now cla were going to out the truth behind the spy game later. Mom . Dad . Guys . [ engine turns over ] [ engine revs ] hell be fine. [ male announcer ] more people are leaving bmw, mercedes and lexus for audi than ever before. Take advantage of exceptional values customer erin swenson tbought so, im happy. Today. Sales go up. Im happy. It went out today. Im happy. What if shes not home . together she wont be happy. Use ups she can get a text alert, reroute. Even reschedule her package. Its ups my choice. Are you happy . Im happy. Im happy. Im happy. Im happy. Im happy. Happy. Happy. Happy. Happy. together happy. I love logistics. Welcome back. Weve been talking all week and for days about Companies Issuing these special dividends to get ahead of anticipated higher tax rates in the new year. Now we find out many firms are actually borrowing money to pay out these dividends even though they have plenty of cash. Why borrow the money now . They have stashed cashes overseas is one reason, and they dont want the tax hit by bringing it back over shores. Plelets talk with michael po about that. He owns his own firm and says he would never borrow money just to give it away. John burns says all this is just one more sign the Corporate Tax environment is not working. Michael, this is obviously a case of borrowing from peter to pay paul, which you call crazy, right . Well, when the Federal Reserve takes Interest Rates to ridiculously low levels, people do dumb things. They borrow money to buy nasdaq stocks. They borrow money to flip houses. Sometimes they borrow money, corporations do, just to send it out the back door. They dont use it to create capital goods or to raise the revenue and earnings. They just send it out the back door, and they leverage up their balance sheet. I want to put to you on notice that corporations vin creased their debt by over 1 trillion since december of 2007. Horribly inefficient way to grow an economy. Its interesting you say that. I feel like one day were going to back and say, remember whe could borrow at 3 to buy a house. If companies have to borrow the money to pay a dividend, why issue a dividend . Well, i think we forgot whose money it is. Its the shareholders money through the company. Tax law makes it very difficult to bring the money back in. Theyve already made the money selling their products and service around the world. So its much cheaper with low Interest Rates the way they are to borrow the money and pay the dividends to the shareholders. The tax code actually just represents a very inefficient methodology of transferring the profits to the shareholders as well as influencing where companies are likely to be looking for future profits around the world. Theyve talked in washington periodically about a moratorium on allowing corporations to repatriate some of that money without a tax a consequence. That would help to some degree, wouldnt it . Absolutely. That would be a very fabulous thing to do. The companies have already made the money, its real money, its profits theyve made selling their products and services around the world, and its going to sit there to be used to build profits with potential Growth Opportunities there versus here because of the tax code. They make it very unaffordable to bring it here, then theyll pursue opportunities there. Its as simple as that. Theres nothing wrong with paying a dividend. Its not coming out of retained earnings. Its increasing the money supply by leveraging out the balance sheet. Theyre not going to allow that cash signature overseas to come here because they dont want our u. S. Dollar strengthened. They dont want to strengthen the middle class. Thats the real issue here. What about these companies that arent paying the dividend . Are shareholders getting mad or angry at companies sitting on cash, not paying it out . Are companies under pressure . Michael, what do you think . Thats going to come around at some point. Its up to a corporation to do what they want to do with retained earnings. My problem is leveraging up the balance sheet, being allured by these phoney, fake, factitious Interest Rates and setting up this whole with corporation, this whole company, this whole private sector for an Interest Rate shock that nobody is prepared for. Michael, what are you doing with your money right now . Well, im 50 in cash. Im going in and out of lockheed martin. You dont get paid to be 50 cash, right . Why dont you pay a special dividend . Thats my prerogative. I sure as heck am not going to leverage up to send money out the book door without any chance of increasing revenue and earnings. I believe were going to have this continued waning away, whittling away of the stock market until they come up with a deal. There will be a deal. Itll be about 1 trillion in tax increases and about 1 trillion in spending cuts and about 1 trillion raise in the debt ceiling. Then its off to the races in the stock market. Ill get prices that are much lower. John, would you look to buy some of these Companies Issuing these special dividends . Sure. We already own many of those companies. So we want to own the companies that are doing the best business around the world. They create a lot of profits, and our clients, the shareholders of those companies, are receiving those profits. Were absolutely great with owning them. All right. Thank you, both, for your talks today. Appreciate your time. See you soon, guys. All right. Were going to take a break here. Well come back. The market kind of levitating a little bit. We hear the bias so the close is to the buy side. The dow up 12 points right now. Well look at pandora next. Company set to report earnings after the bell. Will it only get worse for pandora if apple launches that competing Music Service next year . Apple versus pandora coming up next. Also, forget star wars and the clone wars. We have real life drone wars. Did iran really capture one of our drones . The truth behind the shocking claims straight ahead. And more than 100,000 egyptian protesters reportedly forcing president Mohamed Morsi to flee the palace. The latest on the story coming up next. [ male announcer ] at scottrade, you wont just find us online, youll also find us in person, with dedicated support teams at over 500 branches nationwide. 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Great businesses deserve great rewards awesome [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . The Christmas TreeLighting Ceremony at New York Stock Exchange under way during this hour. Maria will be going out there. In the meantime, shares of pandora have been trading higher today ahead of its earnings that are coming out in the next hour. The stock has been resilient overall this year in the face of reported competition from apple, which said it might launch its own competing Music Service in the new year. Its sort of a case of david versus goliath. Could pandora be the better shortterm trade versus apple . Thats what were talking about today in talking numbers. Good to see you both, guys. Ennis, youre not a fan of either one of these stocks right now. If you had to pick one, who would it be . Youre putting me in a tough spot. Yes, i did. I would say this is what ill say. Lets start with the apple chart. Apple, for three years, didnt breach the 200day moving average for more than a day or two, which is an incredible run. However, in the most recent selloff from 700 to 500, we saw a severe breach. I think the longterm trend in app le is clearly lower now. If we look at pandora, the chart doesnt look much better. Its a severe down trend ever since the ipo. This is a feature. The stock really probably should have never went public. The only positive argument for pandora is it has 45 Short Interest and a ton of