Nine years in a year. And if it continues they will be up ten straight years. Well leave you with barry manilow, break out your lighters and shiny vests. Have a great weekend. Closing bell is next. Happy friday, everybody. Welcome to the closing bell for this friday. Im bill griffith. Maria will be along at the new york stock exchange. Well take you through this final hour of trading. Look for the week here. Youre one of the few people who think the fed doesnt know anything more than anybody else. Well, it turns out we have proof that youre right. Some stunning revelations from meetings as the financial crisis was unfolding a few years ago. Well have that for you coming up, and, boy, is it good to be al gore. He acquired 30 million worth of apple stock by exercising options. Wait until you hear how much he paid for them. Well give you a hint. It was far less than 30 million. Got our attention. And that debt ceiling crisis may be delayed until the spring. The house is reportedly getting set to vote on a threemonth extension until next week and what that does is sets up a big fight on budget and spending cuts which could embroil the economy and stock market in a new round of uncertainty but it kicks that can down the road, so is that why stocks are a bit tempered today . Well take a look at that. The dow right now up 12 points. We are flirting with those five and a half year highs, 13,610 and change would be that five and a half year high so were just pleau that right now. The nasdaq down another eight points at the moment at 3127 and technology among the groups suffering today. The s p, again, here we go again. Any positive close for the Standard Poors 500 would be another five and a half year high for the s p. Lets take a closer look at the markets in todays Closing Bell Exchange with our guests. Andres, you and i were talking about the markets earlier. What do you think . Getting ahead of ourselves with the rallies weve had so far this year. Earnings matter, and were in earnings season. To a certain extent we might see some consolidation in the short term. If we look at valuations, still looks attractive or trading 13 times future earnings, 12 months ahead. The average has been 15 in the last ten years. Right. So valuation for the medium term and long term still looks attractive but i would say in the short term we could see consolidation. Peter, what do you make of the earnings that have come out so far . We made much of the Bank Earnings which for the most part were very good. Other sectors are at 52week highs right now. Housing, airlines, what do you make of what were hearing from corporations right now . Were really getting a picture i think of a market thats getting ready to rotate in terms of its economic focus. I think weve seen the Second Derivative on a lot of earning estimates, changes coming off. Seeing changes in leadership. The earning slickials got left behind so were seeing a major rotation from winners into what had been last years losers. So you think they will play catchup at some point . We think that the economy is going to begin to pivot we think from consumers to more of a manufacturing and exportoriented basis and that well reach Critical Mass on that here in the next two years. Rick, andres and i were talking during the break here about the bank of japan meeting coming up next week. I know youll be keeping an eye on that, having a big implication for the currency markets, wont it in. Oh, absolutely. I think, you know, ive tried to keep our viewers on top of how huge those trades could have been, and they were. Whether its euro yen, dollar yen. If you want to know why our stock market is doing well, look at this chart. A chart of one year of the nikkei and obviously something magical happened towards the end of last year. Look how the stock market took off and connect the dots with the transcripts, Ben Bernankes advice given a decade plus going to the japanese was definitely put in place, the liquidity programs, the quantitative easing, the monetizing and look what happened to their stock market, and if you also look at what happened to the jgb, briefly, they shot up in yield. Its moderated a bit. Kyle bass is on today with david faber and Everybody Loves kyle bass. Right. He talked about the first black swan with all the central banking activity probably turns out to be japan. We dont know when. I would fully agree and i think these two charts give you some clues that there is a possibility. Andres, what do you think . Is japan back . Well, i think to a certain extent the unintended consequences is what were actually going to see in the couple of months to come which is i dont think japan has the ability to get to 2 inflation which is their target any time soon, but that inflation might present itself in places like commodities. Another way to look at it is look at carry trade and countries like mexico that have tame inflation. Still, you can get 4. 5 , 5 on a coupon there, so countries like mexico could be one of the beneficiaries of whats happening in japan and what they are attempting to do. Are you investing over there . Do you like that market right now . We like the emerging markets overall, but i think mexico is one of the places that i particularly like . Hello there. So happy that you just said that about mexico because i have been looking at the mexico story and theres a Real Recovery going on. We are going to be talking to the minister of finance in mexico. What are the risks . Some people look at mexico and say, number one, how do i actually access this growth, and number two, what about the risks of fraud, of not being able to get your money out . What are the risks . Well, the risks in my opinion is actually the valuation is a little bit rich compared to a lot of other emerging market countries. The upside is the fact that they have done significant labor reform. Just got a new president that wants to basically invite Foreign Investment and overall economically and market friendly, it looks very good, but the risk to me is that youre already paying up a little bit for it. Also joining the dinner party today. This party is getting bigger. What is going on . Started laid. Andres and i were getting a little lonely here. Youre very bullish on this market right now, right . Yes, yes. But are we getting ahead of ourselves . In the u. S. Or japan . Here in the u. S. No, i think were fine. This year has been a good consolidation week. Nice to see its holding that 1470, 1480 range. The economic numbers are becoming right on the screws which means there havent been surprised to the upside or downside so the market has been, you know, taken in its stride. The market has been pretty steady and the earnings are a little bit wayward, but were only a little bit early into this. Next week will be a much more meaningful earnings week. At lot of financials were frontend loaded. The news is very good. You would add positions as we go higher . Some of the things to look at, the industrials. Some of the things were keeping an eye on is some of the defense stocks. Right under the shadow because of the possible quester. They are getting cheap and they have possible cash flows. Glad you mentioned earnings. So far its been somewhat mixed. I mean the Banking Sector is turning out some good numbers. Yeah. Where do you expect we might see the surprises on the upside in terms of the Fourth Quarter . In terms of sectors . Yeah. Financials have obviously done well, and thats somewhat cyclical. What i expect to do well are the consumer staples. They have been chugging along, but i think some of their expenses and costs were pretty moderate in the Fourth Quarter, and i think with the with the change in the taxes that came through in january, usually better for staples than consumer discretionaries so hopefully well get good numbers from there. Where would you be investing, Peter Sorrentino . You said you like the early cyclicals . What does that mean . Who do you like here . Well, really its a wide brush right now. We like refiners, the volero of the world. Marathon petroleum spun out. Thats an opportunity and agriculture, Companies Like lindsey, adco. Do like the brazilian market. The real suffered last year so a lot of companies are on sale, cozian and volley, after great opportunities for investors, considering weve got a strong theme in the emerging markets that will continue this year. Peter, thanks for joining us, rick as always, andres and christian come back when you can stay longer. I will. Thank you very much. See you later. Less than an hour finishing off whats been a pretty good week for the bulls on wall street. Bob pisani has been in the middle of the action and is down on the floor right now. Bob . In the middle of earnings season. Im a happy guy, and i see stockpicking earning and individual stocks moving on earnings but not whole sectors which is what happened last year. Take a look, for example, on the multiindustry stocks. Ge, good numbers today. Parker hannifin numbers, new high. Johnson controls disappointed because they guided lower on their current quarter. All the stocks are moving in line with their commentary and thats something we havent seen in a while. Now, theres a lot of talk. The industrials have been very strong this month. Talk about moving into industrials and maybe out of bank stocks which were strong last year. The banks are looking a little tired right now, a little bit toppy. Capital one had a very disappointing earnings report. You can see the rest of the stocks arent going anywhere as well. Semiconductors. Normally, if you had intel had disappointing guidance. You would see a lot of effect in the Overall Group the following day. Intel is down 7 . Taiwan semi, micron, texas instruments, not doing much. Thats what i mean. Individual stocks doing well but not whole sectors. Good day for ipos, norwegian cruise lines, priced at 19 and 23 million shares. Opens at 25. There it is, holding up, Straight Line all throughout the day. Finally, the third of three Master Limited partnerships, suncoke energy, priced at 19, a little bit below, but you can see, guys, a fairly good week, fairly active week for ipos. Thanks, bob. Final stretch of the week. A pretty good week. 50 minutes before the closing bell sounds. Dow jones industrial average still climbing, up 12 points on the session. The economy the stocks have been rallying as the economy improves, thats whats happening here, so the question inevitably becomes when does fed chairman bernanke finally have to be convinced that its time to put the brakes on the economic stimulus . Both sides that have issue coming up. A big debate on that one. Then a document dump finally allowing investors an inside look at the feds First Response to the financial crisis. And put it this way. No one really comes out looking so great. Well have the details and tell you whats in the documents. Youre going to want to hear on them. Oh, holy auto auction, batman. The original batmobile is hitting the Auction Block, the original adam west batmobile, and you will not believe, i did not believe, how much it will cost to drive away with this one of a kind vehicle. Maria is willing to put up the money. I am not. If you could buy that batmobile, which one would you purchase . Would you go old school, pick the adam west original . I think that might be my favorite. Maybe you like michael keaton. Michael keaton is my second favorite or do you prefer function over form and the tanklike batmobile from the dark knight. Youre driving right past mine, the val kilmer. I didnt like the movie, but i loved the car. Youve got to go adam west, bill. Im sorry. Send us a tweet and let us know what you think. Thats so 50s. Your picks coming up on closing bell. Stay with us. Okay. Weve got an improving Housing Market and overall better stock market and that has our own jeff cox beginning to wonder why isnt ben bernanke starting to unwind the steps hes taken. And he joins ron insana who is not worried about bernanke putting the brakes on. You feel low rates over a prolonged period will lead to inflation at some point . Ron and i have been kind of trash talking here for the last half hour or so. Exactly. Dont start without us, getting ready for this thing. Maria mentioned the housing numbers. How about the jobs numbers. How about Industrial Production . How about retail sales . I dont understand why are we printing 85 billion a month . The fed is not letting up on the gas. The fed is putting its foot further down on the floor here going into completely uncharted waters. They have no idea where this is going to take us, but we do know, i know i went to the supermarket last week and i wanted to drink drano by the time i got out of the place. Were still paying over 3 a gallon for gas. We have we are building a case for unintended consequences, and we have been sold this story for the last 12, 16 months about the economic recovery, so why . Why, ron . Tell me, man. But wait a second. Everything youre mentioning, jeff, actually underlines and encourages the idea that we need the feds free money. You put housing aside, mentioned unemployment. Okay. Its not fixed yet. You mentioned growth. Its not fixed yet. Sure, you know, also mentioned inflation, but ethin saying leads me to believe we still need the stimulus so i dont understand your point. Maria is carrying your pail of water . Im still old enough to remember when the u. S. Economy could run on its own and didnt need trillions of dollars of money printing every year. I think that we should be able to at this point say we can go back to having a free market. We can go back to having a place where we are not manipulated. All right. My personal feeling is that the motive behind this, and ill let you speak here, ron. Ive got time. Were talking about stock prices. Thats the primary purpose behind this. Building a bubble in stock market prices, and if thats the truth i wish ben bernanke woe come out and tell us that thats the purpose of qe. Ron . He has suggested he would like to see an improved stock market create positive wealth with real estate but if you look at the explicit targets the fed has put forward, Unemployment Rate of 6. 5 and an inflation rate of maybe 2. 5 , and if you look at the feds mesh ufrs inflation all of them say thats 1. 5 . Underemployment and unemployment together 14. 7 , not at that trigger point at any set of circumstances that the fed would start to reverse policy. Granted, this is a historic change but theres a historic reason. In 1937 as we were coming out of depression, the government tightened fiscal policy, raised taxes and the fed raised rates and created a second downturn. This is what ben bernanke has studied his whole life and this is the mistake he refuses to make. Jeff, wouldnt that be a mistake . I mean, isnt part of the equation that were not talking about, demand . Yes, theres a lot money out there and its very cheap right now but the demand for that money is whats keeping the inflation lower right now, isnt it . I would tell you, yeah, i mean, the demand i guess is certainly the issue that hes trying to stimulate here, but i just dont know how you stimulate it by continuing to just devalue the United States currency. Let me stop you there, jeff, because that hasnt happened. Yes, it has. By what measure . If you look at the dxy, down 11 since qe started. Okay. If that was also part if you read all. Feds and all of Ben Bernankes literature on how to attack deflation and reflate, part of it is gently devaluing the dollar. Competitive devaluations going around the world where all the Central Banks of major nations or blocs are also easing at the same time, so devaluation is a relative term. 1917 was a much, much bigger devaluation than anything weve seen recently. One indicator here, the price of gold. Going nowhere. On a tear for the last 12 years. Why is that not a signal that inflation is on the way . I was having the conversation with someone very prominent in the Commodity Markets yesterday. If the gold market were truly frightened of some sort of runaway inflation, hyperinflation as the Peter Schiffs of the world and others suggest it would be at 5,000 already, got to 1,900, back in the high 1,600s and done remarkably little over the last year. I think inflation is a phantom threat. Across the global economy, theres Deflationary Forces and excess capacity in the world and no one anywhere is at or near full employment. Were not at that point at which the fed starts to see the whites of inflations eyes. Were not even close. Can you make this practical for us and our viewers. How do we make money in this environment . We know where we are, see what the reality is, may not be what you want but the fed is there, providing easy market and thats why this market wants to go nowhere but up except in equities. How do you make money in this market . The fed is pushing you into risk assets so thats where you go. You have to keep going while the band is playing, but this is what concerns me is at what point do we get the snapback . We already started off 2012 with a record amount of money going into high yield. How would you like to buy cpaper and get 5. 5 return on it as far as yield goes . I would hate to be a Portfolio Manager in this kind of environment because i dont know how you balance a portfolio in terms of risk. I would love to be one, and i think part of it is if you you can make money dmest click because stocks are still relatively valued or undervalued based on, you know, the feds model and other models, a lot of opportunities to pick up stocks that were hit hard during the summer, industrial stocks in particular. Good brand name stocks in entertainment and food that look relatively attractive, but china is stimulating its economy. Japan is pump priming, so those areas you can create a barbell strategy that makes a lot of sense being long risk assets here and make some money here in 2013 which agree with jeff is going to be a better economy than most people expect, but the fed is not going away until they are sure. The race to the bottom is going to be one of the major stories in the Global Markets this year. Fina