Strong day, cisco doing well. One of the most actively traded stocks. And caterpillar which was yesterdays drag is one of todays leaders. A herky jerky motion. Bill miller said yesterday on the show its a great market for anyone with a home towardson longer than half an hour and is very positive on apple saying that stock will go past 700 bucks, this as some were saying apple may be releasing new hardware sooner than later. Well hear the bull and bear talk on apple. Any time after 4 00, about an hour from now, Chinese Ecommerce Company j. D. Com is set to release its ipo, 15 times subscribed, a huge ipo to watch in its own right but takes on added significance because it comes ahead of al bal of ali. Fallout that will ensue with the chinese prices and could be the third biggest ipo of the year. Heres where we stand in the market. Dow up 153 points. Today were only 200 almost 150 points off its alltime closing high. The s p 500, meanwhile, up 13, 1886 is the level there and nasdaq up 30 or almost lets see, about. 75 of 1 . Bill . Lets kick it around. We have Abigail Doolittle from peak theories, lindsey from stern and keith fitz jaild and Jack Bouroudjian from index Financial Partners and rick santelli. Lindy, youre the the resident economist. Did you see anything in the fed minutes . Seems more about logistics, looking ahead to the time that they will have to raise rates and they are trying to figure out how they are going to do that, right . Thats exactly right. The most interesting part was the forethought to discuss how they will move away from the accommodation and back towards normalization n. No way does this signify a readiness of fed officials to move rates any time soon, but what this does say is that they want time enough to consider a whole host of opportunities and different pathways to raise rates, and they also want to signal to the market that they will have a plan in place when its appropriate to begin to raise rates, so adding some more confidence back to the market. As this is happening, the dow didnt move too much. We added about ten points. Keith, thats a change from the recent past anyway when any time the fed minutes came out, even if they didnt say anything, wed have big selloffs . I think so. The danger here is that we confuse having a plan with actually doing something about it. I think the fed is buying time and underestimating some of the key factors they are looking to so that does concern me. Abigail, the herky jerky market, youre not a fan of stocks, but you have to admit it has been relatively resilient here. Every time we get to the low end of a trading range it bounces back. Yesterday and today is a good example of that. Good point, bill. It certainly has been a herky jerky market. Lots of volatility here, but i think that we want to keep it simple and that means, first, when we look at the fed and everybody watching what they are going to say, its unlikely at this point that they will be able to say anything new relative to their dilemma. A 4 trillion Balance Sheet, plus ultra weight policy, how can we unwind from this without causing massive volatility in the market and more importantly in the economy and this ties into what were actually seeing this year. Its still paying out, a repricing of risk. Bonds are rallying, did hit the bottom of a sideways range, but i think were poised to go lower. If you look at the comps. Abigail, just hang on one second. How long have you been thinking that the market is going lower here . For for quite some time, kelly. I will be the first to admit it. For years at this point . Im not sure two years ive been expecting a massive correction. I still think that we see it. The higher the markets go, the more conviction i have in this correction. Were looking at smoke and mirrors. The fed has done a great job of restoring confidence coming out of the financial crisis, but whats behind it . Yes, the economy has improved to some degree, but its certainly not really strong. If you look at Capital Expenditures, still have not seen a recovery there, and when you look at the velocity of money, money is not moving. Its sitting on the Balance Sheets of banks and corporations. Until it moves to the economy, again, its a smoke and mirrors anemic economy. Let me bill miller yesterday said hes worried about a melt up in stocks later in the year, in other words, if we can get through some of these keep climbing the wall of worry and keep turning in place and all of a sudden things do look okay, then you start to have the condition where all of a sudden things rocket up and then rocket lower. Is that a possibility here . Oh, absolutely. In fact, one of the things Pay Attention to 1900 in the s p. If you see a sustained move above, that a lot of indexers and Pension Funds that will readjust. Youll see moves, large asset allocations, and you know where that money is going to come from, from fixed income . It will drive the rate in the tenyear kelly, kelly, kelly. You gave the other guest a hassle for saying how long you been bearish stocks, why dont you ask how long jack the pool in the fixed income is going to end up in equities, fair is fair. Wait a second now. Ive been saying that for a while. Dont take sides. I also said it when we were at 1. 8 , rick, and you and i had the debate back then because i saw the same thing happening then that i see now and you listen to the lee coopermans of the world. A fed that says go home. A fed that is patting themselves on the back. Come on, rick, youve got low Interest Rates. Youve got low inflation. But you cant be bullish stocks without the fed, and thats the problem. Come on. And whenever you if thats such a come on, call up janet yellen and say its overkill. Shut it off. Companies earn money, come on. You know that and i know that. The fed is not the Reason Companies earn money. Im sorry. I dont know that, jack. Hang on, hang on, hang on a minute. Bill, you want to throw yourself in the middle of this . No, im not going anywhere near any of this. Lindy, what do you expect Interest Rates to do between now and the time when the fed is expected to finish the quantitative easing, probably october, maybe november . Are we going to keep at the low rates while they continue to peel back on the number of bonds they are buying . I think they will. Given the very uneven recovery in the economy. Relative to the weakness we saw at the start of the year, there has been market improvement, enough to keep the path of taper in play, but there hasnt been that relative momentum recapturing those previous postrecession highs to suggest that the fed can begin to move away from this path of accommodation, so, again, while we do expect the fed to continue tapering, were likely to see the fed on hold much longer than expected, well into 2016, maybe even into 2017. Whats the impact of that going to be because, by the way, theres all of this talk to the extent to which bernanke is out there to think he never thinks Interest Rates are going back to the level they were. The 250k comments, oh, yeah. Over and over again talking about even larry kudlow was saying it on this show. A lot of class there. That Interest Rates wont rise in his lifetime. 75 of tenyear note owners or treasuries in general dont care about the price, so youve got a tremendous imbalance between supply, risk and demand. Its artificial at this standpoint so ceos, yes. Is that because of collateral. Yeah, theres klattization issues, demand issues. The fed hasnt got a clue what its doing here. What its doing is hoping that this thing doesnt unwind when its not looking or its got its eyes off the ball so they have to inject certainty. This is the only card that they can play right now, and it speaks to the fact that the economy is not yet presenting all of the things we would see in a true recovery. That having been said, is it generally good for stocks . Yeah, as long as can you deal with this risk dark on mentality and watch your ps and qs you go along. The reality is weve not had had a major correction since coming off march 2009 lows which means that albatross is still lurking in the background. Youve got to simply be careful in here, but you cant afford not to participate. The tenyear note is the truth serum. Abigail, is that the components that youve missed, youre not alone in saying weve got to have a correct at some point. Is the fed the bogey thats keeping this market from correcting here . I think to some degree it is. The fed, to use that phrase, the new normal, the new normal is the idea that the fed is in there and the fed put, they wont let the stock market its allowed investors to get lazy. They are not doing their work. Everyone is going to ride the feds coattails. Thank you, abigail. But if theres a shock to this economy. Exactly. Youre welcome. If theres some shock to this economy its going to be a rude awakening for stocks, and when you look at the tenyear, the fact that it is rallying in the face of the fed tapering, it tells us not all is well out there. This is reflected in my view in the nasdaq examines it, the high flyers and small cap. Why its not reflected in the s p, dow and transports, i dont know right now, but i continue to believe that disconnect will connect and people are talking to me about my bearish view. So many levels of correction, but i ultimately believe we could truly go back, unfortunately, to the 2008 lows. I hope thats not the case, but, again, this is an artificially propped stock market, artificially propped economy. Hopefully it takes off. That is my greatest hope. I hope i am wrong on my correction views, but when i look at the technicals and when i look at the tenyear and this risk safety dichotomy going on i still think that were looking at a pretty serious correction and one that people should be prepared for. Its not something to be afraid of. Its something just to take it could be used profitably if youve ever learned buy low, sell high, corrections are not fun, psychologically difficult but the reality situation if youre a trade, even investor, if you have a buy list and get stuff on sale, thats the time when you hold your nose and you start to wade in. Youve got to youve got a multiple that makes sense. Its right in line. Everybody keeps talking about a correction. Ear focusing on the s p, but if you think what about the multi hang on a second. If you think about the russell 2000. If you take the top five stocks in the s p. Im with you, bill. If you take the russell 2000, they have this their correction, there it is, abigail. It is the smaller cap stocks that have seen the high momentum stocks that have seen this correction in the last few months here, so, you know, take that and run i guess. Youre right about that, bill. All right. But i think thats just the start. I think that theres a lot more to go. Thank you all. Out of time. Good to see you all, as always. See you later. You were thinking i was going to get in the middle of bouroudjian and santelli. I bruise easily so i dont get into those romps there. Heading to the close, look, getting close to the highs. Day. As we were speak, the dow a moment ago up 160 points. 48 minutes. I think the point of all of this is just to try to figure out what is the dynamic driving the market, healthy or unhealthy, by the way . Part of this is actually saying if theres a credit boom thats contribute together fact that we havent had a correction for a couple of years, what does that mean . What does that tell us . How badly could that end down the road . Anyway. Yeah. So up 160 points with about 45 minutes to go. Pretty broadbased gains across the s p and the nasdaq today as well. Bill miller sounding a bullish call on apple right here on the program yesterday. Take a listen. Apple is a major position for us, still worth 700, 750. And now a report that apple could have new hardware much sooner than anticipated. Stick around for the latest on the tech giant and where the stock is going next. Also ahead, were watching target. The interim ceo spoke with cute any reagan in the past hour on cnbc. Well talk about the state of play in retail and how brick and mortar retailers can bounce back. Hacking america. Ebay telling users to change passwords after its site was compromised, what went down and if you should be worried when we come back. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Okay. Markets are higher today, the dow essentially gaining back what it lost yesterday, up 162 point right now. About the high for the session as we go into the final hour of trading, nasdaq doing better percentagewise. Up 35 points, the dow is the big performer rightno now. Apple is a major position for us and costs are probably in the low 400s, not as attractive as it was but still worth 700, 750. If that is the case, how so and how soon . Tom forte joins us from chelsea advisory group. 650 will be hit in the next year. Couple to you both. Only the mid60s. I think that the next 12 months should be good for apple shares. Can you live with incremental divisions. If you look at the core product, the iphone, this upgrade should be a larger screen size and i think theres a lot of pentup demand like there was two years ago when they rolled out their first 4g phone. Incrementally better, larger screen size i think could be enough to draw significant renewal demand for the iphone later this year. Alex, why do you remain cautious, and do you think apple is headed back below 600, below 500 again . Right, kelly, i think it comes back to that fear or question of getting incremental innovation from apple this go round. I think well get a larger screen iphone. Thats a good thing. Why didnt that happen years ago . Left tens of millions of units on the table and let the competition get stronger. We think were going to get an iwatch, that theres something inters of refreshing apple tv, not sure what. The problem is its not happening faster, and they are ceding the initiative to a lot of their rivals out there and thats dangerous for a company that, yes, still number one in terms of hardware manufacturing, but in terms of software and in terms of igniting the imagination they are falling behind. Alex, at this point, im no expert on apple but i watch it as much as everybody else does. No pun intended. Should we get past the notion that innovation is the future of apple just because thats how that worked, they did buy beats, all scratching our heads over that one and now we have the incremental gains and the market is suggesting maybe there is a future for this company as the stock continues to rise here. I think absolutely no. We cant get past the notion that innovation is key to this story because its about earnings growth, and we know what happens when innovation stagnates with hardware companies. The margins go away first, and then the growth goes away and apple as a stock has a multiple that bakes in growth for this story, so with most of the growth in iphones, now expected to come out of china, and that being a hyper competitive, hyper cost sensitive market, i think they are going to need something in terms of the new product category, the new usage category software, something that sets them apart so that they can sustain their Gross Margins and get back to consistent growth because they have only just gotten back on the growth train. What if apple were to do something significant in the mobile payment space . Do you a, think thats likely and, b, how much value could that add to the shares . If you look at mobile payments its clearly a low hanging fruit opportunity for apple. They have all the as nets place to make it happen, more than 800 million itune users, the hardware, the tablet, the esphone and then the Fingerprint Recognition Technology and the iphone and 5s. The way i look at it theres enough near term opportunities over the next 24 months to apple adding the new categories and mix that with the product research, a 90 billion repurchase program and i think the stock is in very good position here. What do you want to see them buy . Everyone is questioning the purchase of beats but they do have a lot of cash on the Balance Sheet. They can buy whatever they want. Well, they do. Dont have as much domestic cash as they used to. Thats one problem, but i do think if they were to do something a little bit more imaginative, i dont know if its like the facebook move in getting oculus. I dont know if theres something in the line of mobile payments where they could be innovative, we do know its interesting and there could be an opportunity in china, but because we havent seen that imagination from apple heretofore some think its safer to play the component vendors, the arm holdings, the sky works, suppliers that will win no matter what apple does. Thank you for now. We have a news alert on the fed. Steve liesman has details for us. Hey, steve. An idea floated yesterday from bill dudley, the new york fed president , its gone coastal now, bicoastal here because San Francisco fed president John Williams is new on board with the idea. Whats the idea . The idea that the fed should not let the Balance Sheet wind down before raising rates, before the markets seem to think, and maybe he was told by the Federal Reserve that they were first going to let the Balance Sheet winds down, ending reinvestment and then raise rates, now they are talking about doing it the same time. Williams very much echoing comments from bill dudley yesterday, the new york fed president , saying that its best to raise rates before ending the bond reinvestment program, this in an interview with the dow jones. Hes worried that ending it will send a hawkish signal. Im not sure that theres very much economic value in this. I think its symbolic value. Sometime before the fed was scheduled to raise rates this year, the fed was going to let bonds that matured run off and not reinvest the proceeds and that would send the symbolic tightening signal and the fed says we dont want to do that. We want rates to rise when were ready to raise rates. Well let them wind down. Whats interesting about this is by doing what they are now talking a