Networks. That would be terrible. That would threaten us, right . No, were a cable channel. I know, were part were part of a broadcast network, so, yeah, very important. Well get to that. No, its not your imagination. Gasoline prices are higher. In fact, a lot higher the last few weeks. Whats the reason behind the recent surge, and how much higher do we go . Well have a special report and why everybodys pain at the pump is on the rise. Netflix is set to report what is being viewed as a crucial Earnings Report. The stock has been hit hard over the last month or two, falling very sharply, when it was trading well above 400 a share. The latest numbers, sending it to new highs . Well have the information first, along with the best analysis on the street. In the meantime, lets show you how the markets have been trading. Narrow day. European markets closed, closed the monday after easter. They do a fourday weekend. Why dont we do that . Thats a great idea. Lets campaign for that. We practically did. 43 points now. A very narrowly traded day. Were at 16,452 on the dow. The nasdaq actually a decent gain of 24 points, about. 5 , as the march to 5,000 continues and the s p 500 index is up 6 1 2 points now. Now trading at 1,871. Lets bring in our panel today, to talk about it in our Closing Bell Exchange with aaron gibbs from sp capital iq, anthony chan from chase, tim from paradis asset management. Is that correct . Paradis. And Richard Bernstein from Richard Bernstein advisors. Good to see you all. Erin gibbs, a very busy week for earnings. What was it, 150 major corporations announcing this week, right . Thats right. Weve only got about 80, 85 Companies Reported so far, so this is the main week where well see the beats and misses. So far, lackluster results so far, right . Yeah, weve this is odd that were two weeks into the earnings season and weve actually come down in estimates. We started off the season at basically flat, at zero. And right now, the s p 500 q1 growth is at negative 1. 1. So its very unusual that already about, you know, 20 of the s p 500 is recorded and were headed downwards. Its not looking good. Thats so interesting, rich, because the s p 500 is on pace for the first fiveday winning streak in six months. Correction . What correction . It seems to be gone. Is earnings season going to underpin this market, or no . Michelle, add Something Else to that, as well. Many people have pointed out that value stocks are outperforming Growth Stocks. Historically, value outperforms growth in expectations of earnings getting stronger. As the profit cycle heads up, value tends to outperform growth. So here we are in this lackluster earnings season, as you pointed out, but yet values outperforming growth which says the market is beginning to expect this may be the trough. Yeah, kenny, we were saying last thursday, art cashin, his guesstimate was, and maybe the momentum selloff was over. What do you think . I dont think so. I think we test it again lower. It doesnt feel like any followthrough. Like erin said, if were looking for numbers to get weaker, how can that justify anyone taking the market higher other than janet yellen saying, dont worry, im keeping rates low. Hasnt that been enough . It has, but investors are smarting up to the idea, if she keeps stimulating, what does that say about where the economy is and what the companies will do . How much more can they cut the bottom line . Without growing the topline revenues . Thats what well see this quarter. Anthony chin, weigh in here. What are we seeing from earnings season, and what it elle it is us from the economy . I agree that the earnings have been disappointing in the first quarter. I dont think anybody would argue with that. The reason theyre so weak is bhaus of weather. Today, we got an interesting date pa point that no one is talking about and thats the index of leading Economic Indicators, really coming in very strong and suggesting that as you go into the second and third and fourth quarter, were probably going to average about 3 growth. What does that mean . That means revenues will be strong. We all know that companies are masters at cutting costs and helping earnings by squeezing everything out of revenue. But if revenues get stronger because the topline Growth Numbers get stronger, that i think is something that the market is starting to press in. Higher revenues. Tim, weigh in. What do you think of valuations at this point . Im the credit guy on the panel, michelle, so im always the sky skys falling. I think what were seeing is, you know, price of sales, 1. 7, 1. 6 times, yields that arguably less than 2 . I think youre starting to push the envelope as it relates to this part of the equity side. I know you were kidding, tim, but you being the credit market guy, why is the long end of the yield curve showing lower yields now . Is it because you think sky is falling . Whats going on there . You know what, bill, i think that the reality is and weve said this three, four months back is that rates are probably headed lower. The reason rates are headed lower is a couple of big animals in the room. One is demographics. Another is liabilitydriven investing. But the issue overall is there was a segment earlier we were watching as it relates to gasoline prices. If you look at energy prices, and weve been pounding the table on this delusion of selfsufficiency, its 104, its not 75, its not going to 75. Natural gas is headed towards 5 bucks, going higher. And so, theres a tax coming on the already heavily taxed consumer. So were not a believer in that. The end of the year with looking at about 8 or 9 growth. But right now, were trading at 16 times. And basically, were really looking for how we come through on q1. Do we need one big asterisk for the earnings coming out and, say, attributable to weather . Part of that, and also last week we were really hit because of the banks. Jpmorgan and bank of america misses pushed down the markets for the s p 500. We really want to see how this week plays out before making too many calls. Rich bernstein, tell us more about the rotation into value. You talked a lot about what that signifies for a market. Is that a bullish or bearish indicator . Well, i think or defensive . No, i think its quite bullish. I think people forget if youre an optimist, you invest for value, right . Value needs nominal growth. Stronger nominal growth. It doesnt really care if its inflation or real. Just needs nominal growth. If youre defensive, then you buy Growth Stocks, because Growth Stocks become very kind of darwinistic, if you will, as the cycle deagain deterior e deteriorates, it becomes survival of the fittest, which is usually Growth Stocks. What will you see this last hour here . Or do we just take this day for granted because the european markets were closed the . I dont think youll see anything significant this last hour at all, right, because the volumes are very, very low. And earnings are really going to start after the ball, and then for the rest of the week. I think you have to Pay Attention to not only the microdata, meaning the company earnings, but macrodata, and the flash pmi, still below 50 . What will it mean . What are investors going to do . I think theres some volatility ahead and i think well test lower once more before we end up making a move higher towards the second half of the year. What if we dont . What if we continue to just creep higher, grind higher, even as these lackluster earnings come out . As we climb the wall of worry so to speak . At what point do you the skeptics stop being a skeptic . I guess when we break 1,900. Im so frustrated at the moment, because it doesnt feel like, that selloff the last week felt like it had more to go, and janet comes out, slow down, dont anyone panic, rates will stay lower, and they take it right up again. The market needs to reprice based on fundamentals, and thats where theres disconnect. Anthony chan, when we look at earnings and talk about when you just hear kenny talking about yellen. Whats more important over the next few weeks . I think the most important thing is going to be what kind of Forward Guidance do the Companies Give us . If its really weather and nothing to worry about, then i think the markets can move on. If the companies tell us, look, this is the way things are, then i think kenny certainly has some very good arguments, and i think kenny maybes a good point about international developments. One of the things that happened overnight is good chinese data on housing prices. Housing prices are rising, but a slightly slower pace. The bear also say thats evidence that china is slowing down. The bulls will say, thats evidence that the central bank is doing more, and maybe more fiscal policy, because prices are not heating up, as the Consumer Price index is giving them more room to move. Thats why we love your profession so much, anthony. You economists, you can look at the same number and come up with two different interpretations. I love that. Thank you. Well see you later in the hour as we head toward the close of trade for this monday. Thank you for joining us. Were headed there, about 50 minutes left. The dow up 32 points. Weve had the narrowest traded day from top to bottom for the dow going back to october. You can see it on the intraday chart, flat after 11 00. Theres a new survey that shows the majority of investors would rather put their money in a certificate of deposit yes, with nearzero returns instead of the stock market. What gives . Well debate whats driving this phenomenon and if its justified, coming up. Also, the future of Television Broadcast good oldfashioned television, will soon be in the hands of the Supreme Court. Barry dillers Antenna Company aereo battling the broadcast networks over this. You need to Pay Attention, because what the High Court Decides could change what the broadcasters put on television and how much you pay for it, more importantly. Well explain whats going on coming up. For those of you under 30, there are broadcast channels you could watch without cable if you wanted to. I know they dont know that. One of the best and worst jobs to have, wait until you hear which list your job falls into. Dont go anywhere. Why relocating manufacturingpany to upstate new york . I tell people its for the climate. The conditions in new york state are great for business. New york is ranked 2 in the nation for new private sector job creation. And now its even better because theyve introduced startup new york dozens of taxfree zones where businesses pay no taxes for ten years. Youll get a warm welcome in the new new york. See if your business qualifies at startupny. Com all right. The Supreme Court, as we said, is hearing this closely watched case tomorrow that could affect how much you pay for tv service forever. Nbcs Pete Williams lays out whats at stake for us. Hey, pete. Reporter good afternoon. This is a Court Challenge to a Software Application called aereo. It allows its maying customers to watch broadcast tv signals live on mobile devices, or record them to watch later. And heres how it works. A user who enters a request to watch a specific show is assigned an individual microantenna that tunes to the correct channel and feeds into a digital recorder reserved for that user at that moment, and then on to the users mobile device. Aereo says thats no different legally than a person at home using an antenna and a home video recorder. But the broadcast networks, including nbc universal, the Parent Company of cnbc, they say aereo is different, that aereo is taking free overtheair programs and selling access to them without paying for the right to do it. Cable and satellite tv companies do pay for the Network Copyright fees. A lawyer for the Networks Says aereo fundamentally is engaged in a Business Model thats about something for nothing. Now, billions of dollars are at stake here. If aereo loses, its probably the end of its business, at least as its configured now. If the networks lose, it could undercut the Legal Authority of charging for the retransmission fees. As you say, argued tomorrow, decision before the end of june. Thanks, pete, very much. Lets get more about whats at stake here. Both sides of the case and for all of us, Television Viewers out there. Barry cohn is at braumfield, hillary nye are both copyright experts. Hillary, let me start with you. How do you think this case goes down, in favor of whom . Well, im going to say in favor of the networks. Because its really not that difficult. This is a case about theft. You think aereo is stealing the signal . Oh, absolutely. Clear and simple . The fact that theyre charging for it, the service here . Absolutely. What do you think, barry . This has nothing to do with theft. Its no different than if you have an antenna on your house and your only dvr. Same thing for two people with one antenna or two antennas on the roof and one dvr. All aereo is doing is advantaging technology. Theyve taken thousands and thousands of antennas and dvrs and every individual has their own dvr and antenna. That part i get, but the fact theyre charging customers 8 a month, theyre turning around and profiting from this retransmission. Isnt that the stealing part that hillery is talking about . It has nothing to do with stealing. Everyone charges for everything. Its the idea of america to have capitalism. In fact, its better for the country. Yeah, but the Cable Companies are paying the retransmission fees. Theyre at least playing by the rules. What if aereo paid fees for it . Would that settle this . Well, i think it would. But they somehow believe theyre above the law and not beholden to anyone other than end users who are paying for something which they are stealing from the broadcasters. Barry, what do you think is the impact of the age of the Supreme Court . For those of you under 30, i make this joke. But there is broadcast television, right, that you dont need a cable box to watch. You can actually just plug in a tv and theres, like, eight or ten channels. Actually transmitted in hd. 20 of the country needs antennas. They cant get cable anywhere. Right. So what impact is it that so many of the Supreme Court remember that long before there was cable, there was free television, barry . Do you think that has an impact . Well, it does. Abc and cbs have all threatened and said if they lose, they will stop their transmissions over the air and go to a pure cable system. Whether that happens or not, i dont know. It would affect the 20 the 20 of the country that gets this wouldnt be able to watch Television Anymore . Yeah, but whether that happens or not, all they all of the networks are Cable Companies, just like youre a network but tied to a cable company. Whether theyre going to do that because the sister companies, i doubt it. They do get the transmission fees, although not directly. They do get it through advertising, through commercials. Hillery, ive already sort of staked my claim on which way i go i agree with you. However, isnt this also a case of Technology Getting ahead of everybody else . Aereo has figured out how they can do this and theyve made a good Business Model out of it, and theyre trying to make this thing work . Well, but we dont go to the courts to have them validate a Business Model. Right . We go to the courts to have them uphold the law. And if the law doesnt work, then you have to change the law. And at this point in time, the law says you cant just do theyve won some cases, in new york and boston. Aereo won those cases. The broadcast networks only won one of the cases out in utah. So im wondering what theyre looking at in boston and new york that tells them that aereo is in the right in this case . Well, i think it involves an analysis of the underlying technology. Because really, this isnt that different at the end of the day from the napster cases, because in napster, you know, copyright law applied even though consumers wanted napster to exist. That was the Music Channel of years ago online . Exactly. Exactly. You know, the laws the law. Public performance is public performance. Its not measured by how many people show up at the theater. Its measured by the fact its being made available. We have to remind everybody what napster was at one point. Heres what i dont understand, barry, why didnt the broadcast networks do this themselves . Yeah i agree. This is challenging, and the economics of an industry, and its a wakeup call really for the broadcasters, but its a different issue. Whether or not it is technology is legal is one issue. The other issue is whether or not we should be having Business Models like this, because, hey [ overlapping speakers ] barry, it could become a moot point. If aereo gets the approval, then the broadcast networks, whats the barrier to entry . Can you do the exact same thing and now Aereo Les Moonves has said he will start a service just like this if aereo wins this case. Sure, thats the whole idea of technology. It is a technology, just like broadcasters tried to stop sony, the beta max 20, 30 years ago. It is being challenged in the courts and the courts there said theres nothing wrong with beta max and vcrs, technology thats obsolete. Its an advancement of technology, and we should embrace it. An advancement of technology is great as long as it follows the constricts of the law. To me, it sounds like aereo has said that. When you start to play out the ramifications, it sounds like aereo is