Technical analysis on wall street, and hes still very bearish on the small caps and the technology. Hes been forecasting a 25 decline for the russell and the nasdaq, what hes calling a stealth bear market right now. 1080, that was the level we were watching on that russell indebt. We held that. Today were rebounding. Well see what he has to say. Separate lit Obama Administration going on the offense against a Cyber Security scuffle, actually filing criminal charges against chinese officials, but why now . And whats the end game . Especially when the white house is currently under fire from cisco for intercepting equipment. A report on these growing tensions and what it may mean for several companies you may be invested in. The avengers, why the spitderman, exmen all super hero franchises that came out of mind of stan lee. He joins cleshl today for a very special interview and this is a time when the superhero genre in Motion Pictures has never been bigger or more popular, and the new xmen movie comes out this weekend, and its the money part thats been a bone of contention for stan lee and many in that industry. Im going to ask him how much he thinks he has spent on legal fees over the years. They are always in litigation, it seems. Crazy. Not to mention, by the way, jack kirbys case will be coming before the Supreme Court as well. Lots of dimensions to explore on that one. The dimensions of the market heading into the close, an hour to go in the trading session. Big merger news, of course. Well get into all of that. The dow is up about 18 points today. Meanwhile, the nasdaq, look at this, up israel. 8 of 1 or 32 at this hour and the s p 500, a reasonable rebound here to start the week of course, up about a third of a percent. 1884 is the level there. Lets talk about it in our closing pebble exchange, kathy jones, bob from capital saq and Michael Melnick from Southern Polytechnic State University is here today, the author question the basics for economics for a modern manager and a very specific reason to have him on and our own Rick Santelli is here as well. Kathy, youre head of fixed i can at schwab. Nobody can agree on why the bond market is reacting lately with Interest Rates going down and not up. Whats your version of why that is happening right now . Well, i think there are a lot of reasons, you know. The economy has underperformed expectations, not just here but in europe. Worries about the slowdown in china, inflation has come in below expectations until just recently, but my interpretation of tapering is that it could be interpreted as bullish for the bond market. Every time the fed has ended qe in the past, quantitative easing one and two, yields have actually come down, not gone up, and now were tapering, and what were seeing is yields start to come down again, so it could very well be that the prospect of less liquidity from the fed is whats allowing rates to go down. Those were often accompanied by weaker performances in the stock market, and this could be a different story this time around, but i want to ask professor melnick who is joining us today for a specific reason. Welcome, professor, thanks for being here. Thank you. We are looking back at people who thought the tenyear Interest Rate might not rise this year, and it most decidedly has not as bill just made the point, but you actually thought that 2. 5 , where we are today, is where wed be. This is back in december so just a very simple question. Why are we at 2. 5 . What does it mean and how long do you think this lasts . Actually your previous speaker did a very good job of describing the reasons, so i completely agree with kate, will you let me add a couple of terms here and expand this discussion a little because as an economist i have to acknowledge that any Interest Rate consists of two components. There is the real rate of return and then theres expected inflation. If we look at the real rate of return, in the short term thats completely controlled by the Federal Reserve, and i think that the Federal Reserve will remain in the picture for an extended period of time. In fact, as far as we can see in the future, but the longterm bonds reflect more of the fundamentals of the real Interest Rates, and one of the key fundamentals that determines the real Interest Rate is the productivity of capital. After all, what is the real Interest Rate . The real Interest Rate by definition is the price of capital so if we look at the marginal productivity of capital it has been decreasing on average and theres a number of reasons for that. It tollie has little to do with the recent crisis, the trend of the real Interest Rates that began before this crisis emerged. The demographics . Not necessarily demographics, technology is the prime reason, because what happens is the cost of capital is determined by the capital to labor ratio. All right. Before i ask you if this is going ton on the mid term can you tell us how much lower you think traits are going to go . I mean, is this a trend lower, or is this as low as it gets right now . I think at the moment, today, were a little bit overshot, so but that doesnt but, however, i think in the long term, yes, the rates actually are either going to stay where they are now or retreat further, and heres another reason that both of your previous speakers touched on very nicely. First of all, the real Interest Rate in the United States will remain low, and this will remain low for a very long time, probably over a decade at least because the technology changes, so the real rate will remain low. The question really is what happens to inflation . At the end of last year there was a significant expectation that there would be inflationary pressure. Yeah. However, inflation in the u. S. Is highly unlikely and one thing that i argued last year and that seemed to be somewhat seemed to escape the main media. Professor, let me go to our Rick Santelli. Trying to read your body languaging a the professor is talking here. Youre playing your poker face here, cant read you. Do you agree or dont agree . I agree on a couple of components. I agree we could have Interest Rates for many more years but not necessarily for good reasons, and i do think theres a very simple way to place rates where they are at, and the first guest nailed it as well. After every qe we did see rates go down, and, kelly, you get the prize for why, because equities moved lower, but this qe is different. We keep stretching it out and stretching it out, but ill keep it real simple. Its all about deflation of equity prices. The next time we see the nasdaq under its february 3rd low, 39 and change, thats when were going to test 2 1 4. Its all about, in my opinion, the equities and i think we can really summarize the correlation between tenyear note yield, the nasdaq in this country and dollar yen, almost all identical charts, thats how simple it will be. Well stay here until the nasdaq cracks that low and then rates will follow. I dont see any linkage for the rest of the year, stocks up, treasury prices up. I think those days are gone. Bob kaiser, do you agree . You want to comment on that . I agree with everything ive heard so far, but theres a definite conundrum here between the 2. 5 yield on the tenyear treasury and when you look at forward earnings expectations for the s p 500, because the equity market expects much healthier earnings. 10 to 12 Earnings Growth next year which implies the economy is going to get stronger. If that happens the tenyear note has been locked in a range of 2. 5 to 3 for the past year since bernanke started talking about tapering and if the economy gets better were at top of the range and yields head higher. Michael, what do you think . Ive got to disagree with each of those opinions. We have a contrarian here. You have a contrarian. Lets remember, this was the consensus heading into the year. At the end of last year nobody wanted to own bonds, investors coming out of bonds. At the end of the year it made a big mistakes. Investors going into bonds now are possibly making the same mistake all over again. I think were way too complacent. You see the yields going up. I see them going up in the second half. I think were way too complacent and weve gotten away from the notion that the market is in the business of fooling the majority of the people the majority of time. Were at that point right now. I think the economy in the u. S. Is far better than what the numbers have said in the First Quarter, and i expect to see better numbers going forward. If i may interject. I expect the bond market will determine the direction of Interest Rates and not the Federal Reserve. Absolutely a great point. Professor, i have this question for you. If you believe the u. S. Economy is going to be in reasonable shape, why is the 30year especially, should be sensitive to better inflation and better growth, why is it that yield, almost more so than any other part of the yield curve has come down so considerably, below 3. 4 today . First of all, define what is a good performance for the u. S. Economy. 2. 5 to 3 which i know is not great. 3 in my mind would be a thunderstormal historical normal but right now were in a different reality. This is something thats important to understand. The economy has moved to a different longterm equilibrium so in this new world 3 this year would be great, but i think that were more likely to end up seeing closer to a 2 mark. Okay. By means domestically generated inflation will be subdued. Absolutely. Inflation, when i go we have to understand inflation is measured by a variety of different measures, okay, so one inflation i feel when i go to best buy, or when i go to walmart and buy primarily products made overseas. Foreign economies are not in such a great shape right now so as a result they are competing for our dollars here so that inflation is going to be limited. I want to go back to Rick Santellis argument. We need to watch the u. S. Dollar. The u. S. Dollar will be a key indicator in terms of how that inflation comes into the country. It seems to me today were not experiencing that and were not likely to see that. The dollar against what, the europeans since the World Economy is so great and the u. S. Economy is so great they are thinking of putting neglect Interest Rates into the june 5th meeting. Were semi crippled as it is so why is the stronger dollar good again . Stronger dollar is the indicator that that the inflation is subdued. Stock inflation doesnt count. The fact that the dollar has been strengthening. It comes not because the u. S. Economy is so strong but because other economies are so week. Thats the reverse. Were still the island of prosperity and money flows into the United States. The bell is ringing. We have to go at this point. Everybody else, hank you, always good to see you. Have a good day. I could have kept that going for 25 minutes. Heading into the close, picking up a couple. Well have much more ahead on these markets. The godfather of technical analysis, Ralph Acampora and hes warning that he has a sick feeling about a 25 stock market dip ahead. Acampora makes his bear case coming up. And using Rick Santellis reasoning that could have a big impact on straits as well. Well talk to ralph about that. Another monday and another blockbuster buyout, at t making a 45 million acquisition of directv. How it could affect your wallet and portfolio. Can barely follow how it shaped out. Stan lee, creator of the hulk and the fantastic four, hes speaking about whether the superhero craze is headed to the ultimate oversaturation flameout. Pags denis plus signs, minor plus signs today, but look at nasdaq, thats leading the charge today. Lately youve seen the blue chips would move higher when the secondaries, the blue chips, the Technology Stocks or the small caps would move lower, thats not happening today. Is the Technology Stocks and the small caps that are leading us higher, not a lot and volume has been very light, one of the lightest volume days of the year so far but were getting. Plus signs so far on wall street. At t making a 48. 5 billion bid. At t down and directv down 1. 5 . How does this change the media landscape and who is left looking for dance partners, Morgan Brennan has that part of the story. Assuming this deal and the comcast deal square regulatory approval, the names now to watch, dish network and es have. Already were getting reports that dish may be talking to verdon, the other Major Telecom that could do a deal such as this, a partner have could go several ways, could be a merger or simply buying wirelesss spectrum, Something Else to watch, how the deals helps regulators. Another company to watch, charter communications, its their 20 billion divestiture deal with comcast which is also hending approval will make it the lone midsized player with two major giants, charter in the middle and Smaller Companies so well keep watching all the deals and see what the consolidation looks like. For more on what this media deals means for investors. Gene, when the music stops, how do you see the dust lingling here . Will we get all the mergers through . What do you think will happen here. Good question. I think its a good time to get deals through the regulators as theres very little pushback and cleary will they have been supporting consolidation so i think this deal is going to dictate the way a lot of other deals play out in the space. Lets suppose all of these go forward, what does this new media broadband world look like in. This is Ground Breaking stuff to be able to get no a quadruple play so the landscape will be as content continues to be king. Youll push your business and continue to grow because everything is going to what we call the quadruple play which is video on the mobile. Well see the video mobile push. At t made a big move here with you. A year ago Charlie Irvin was looking at spint taking over and its about content and about delivery. Gene, is this is this good for consumers . I mean, i keep hearing that my bill is going to go up to consume media with all the consolidation what do you think, especially if they have to pay for the deals . Doesnt mean much as at t and directv have very little overlap. In the lock run it gives consumers more options and potential cost savings. Larry says its gamechanging and gene saying its not that big of a deal. This has to be some kind of important hank in the media landscape. Its a big deal that, look, understanding that many believe the acquisition of nidal ayyad is unreasonable. The reality is this is at t tried to build out its paid tv business. Currently at t has 5 million and directv in the u. S. Has about 20 in the u. S. In addition, the sheer size of this deal will allow them more negotiating bother with the likes of disney and tmobile and lastly, you know, directv has built out a new latin american practice which at t wants to capitalize on. Thats why people so from the pint of view of whats best for the consumer to pick one here. Should at t be allowed to go forward, and if so, how big will they be and what does that mean for a time Warner Comcast tieup or other combinations a la dish and whomever. Verizon we here now. May come about because of this space. Do we need the new beefed up entities to compete with each other or are we going towards an ole gonebly. To consume all this content, there are carriers that went out to build these networks, built the broadband and banded when ile so a lot of times i see youll see better stuff for consumers because youll see more competition. This stuff is needed. What were seeing here is Ground Breaking because youre seeing telecom get into pure content and what youre seeing is the deals going through. I think the most interesting part is theres no breakup fee so i believe that that shows you in a dish really wanted to get out of there, but its all about mobile, youve got to have something to do that and thats whieringan wan aa aan this is about a fundamental shift in change in the whole business. Sure feels like it. A lot of money changing hands, like we said. Thank you both for that. 35 minutes to go until the close here. Were up 11 points on the dow, about 6 on the s p. 30, it looks like, on the nasdaq and, again, Interest Rates today remain the focus. The extent to which you believe that lower rates are supportive of the economy versus warning about them is the essence of the debate happening on wall street right now. Also, go pro has the cool factor locked in, but is the Digital Company a Public Offering coming up in a couple of minutes. Stan lee, creator of superheros and countless of other comic hero, speaks to us and hear whether he thinks super hero are risking overexposure. Stan lee joins us next. Dont go anywhere. Dont go anyw. Whon a certified preownedan unlimitedmercedesbenz . Nty what does it mean to drive as far as you want. For up to three years and be covered . It means your odometer. Is there to record the memories. During the mercedesbenz certified preowned sales event now through june 2nd, youll get complimentary prepaid maintenance and may qualify for a twomonth payment credit. Only at your authorized mercedesbenz dealer. Peace of mind is important when so we provide it services you bucan rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered