Weve seen a selloff. We were down 76 points at the low, but weve come off those lows and were at 17,010 right now. And were keeping a close eye on the tenyear for that reason, too, watching a 2. 6 level as it also expresses, perhaps as art cashin was saying, a reassessment of the strength of the payroll report. Yes. Maybe its european concerns, maybe its the typhoon in japan. All of that well get to in just a moment. Meantime, the watch for the apple watch continues. The shares of apple higher again today in the range of 1. 7 . They are inching towards 100 a share. Thats near their nominal high, both before and after the split. The company poaching a Top Executive from luxury watch maker. Just how much is on the line for apple whenever it does unveil this watch . Well take a closer look. I guess they really are going to bring out an iwatch, arent they . Theyre talking about the fall. At this point. Look, if they can get it down to not having to be bulky and be with the phone right there and charge it so much and interestingly enough, and this is what well have to ask our guest later if they make it in switzerland, that could be a development that gets people interested. Im just interested if it has a physical keyboard, then im sold. No, theres a casio all right you can get one on ebay. Yeah. Of course, its the event everyone is waiting for. Not one kardashian, not two kardashians, we have all three kardashian sisters with us today here live. Kim, kourtney and khloe will be talking to kelly. They have a new line of clothing for children, called kardashian kids, sold at babies r us exclusively, and the Three Sisters are going to talk about that exclusively here on klosing with a k, closing bell later in the program. And Courtney Reagan is on the scene. Well see her later on. Want to tell us about the market here . The dow is down 57 points, off the session lows where we were down about 76. So, 17,010 is the level were watching right now, off about 0. 33 . Take a look, meanwhile, at the nasdaq, this one outperforming. Last week it was in the range of 2 or higher in the shortened holiday trading week. Today its giving up 35 points to the down side. Finally, the s p 500 off about nine, 1,976 is the level there. Keeping up with the Closing Bell Exchange with die yawn, Peter Anderson from Congress Wealth management, hank smith from heatherford investments, steve sax from pro shares advisors, and our own robert pisani. Peter anderson, at least two houses on the street are now, as a result of the jobs report on thursday, saying that they think the fed will start to actually raise Interest Rates sooner than expected, maybe as soon as next year right about now. Would that be good or bad for stocks . Well, it depends. It depends on how earnings are going to come up, bill. You know, if earnings look really strong, which i do think is going to happen this quarter and the next, then you would expect rates to increase slightly. Thats all in alignment with the perfect picture of recovery. I think whats happened, though, is that many people are confused. We dont have clear signals yet. Weve been saying this now for several years, but i just dont think we have acrosstheboard, clear signals that we are in clear air, clear sailing. And you know, i also get a sense that if you pull on this earnings thread a bit, you might actually unravel more fabric than you think. But in my case, i think most companies that are strictly research and have good prospects will have very strong earnings, and perhaps, you will have an increase next year, yes. You know, if we want to look at signs potentially of trouble in these markets, we only have to look so far as the shortterm funding markets or repo lately, steve sax. Rick santellis not with us today, so ill ask you, how concerned are you in some of the failures in repo funding in this part of the market where we saw stress in 2008 . I dont think its of a big concern right now. I think youve got lots of different factors flowing into the credit markets in general and overall into however you want to refer to it, the shadow banking market or just the overall capital markets, right . The fact of the matter is, weve gone through a significant transformation in how Balance Sheets are managed on the street, particularly as it relates to Global Investment banks. So, the stress that we may or may not be seeing in the shortterm funding market right now, weve seen that before. We saw it historically before 2008. You get these blips. I am not overly concerned. I dont think it has a big impact on fixed income or equities. So, you dont think this is an early sign, for example, that if rates do suddenly move higher, they could gap higher because there will be nobody there to take down inventory or because these shortterm markets will struggle with some of the inventory on the market . No, i really dont think so. I mean, right, the whole debate about, you know, the Interest Rate hike, its like the debate about the yedie right now, right . Some believe, some dont believe. I think the fact of the matter is were still a ways off from that first Interest Rate hike. And again, no reason to believe that the fed is not going to do this in an extremely orderly fashion with plenty of transparen transparency, thus no stress in those funding markets. I want to meet the person that believes. Diane garnick, 17,000 on the dow. Do you believe . Yeah, you know, its so interesting. I think one of the things we have to remember is never underestimate the power of the american consumer, right . So, for a long time, when the dow 10,000 hats came out, we hit dow 10,000, we lost it, it came back. I mean, it became a fashion staple. Were likely to see that again but heres my question, does it raise earnings expectations that much further when we are in this territory where weve never been before . We start the earnings parade tomorrow. Do you think those expectations are going to be met this time around . This time around, this earnings season right here, right now, i think we have upside risk in that lots of companies have pulled down their estimates, so much so that i think the up side is really where were likely to see companies outperform, in particular in Consumer Discretionary space. Now, hank smith, were going to talk to jeff about his call that the 20 correction could be happening, could be starting now in the markets. Or in any case, he was talking about that on cnbc earlier today. Right. Hank smith, do you agree with diane that theres more upside risk heading into earnings season or are you in the kind of jeff saut camp here . I definitely agree with diane that, look, the economy is starting to reaccelerate. I think youre going to see that in secondquarter earnings, third and fourthquarter earnings that are both going to come in ahead of expectations. The chance of a recession is very, very low. Are we going to have pullbacks . Of course. A correction, maybe. But if we do, i think its going to be relatively shallow and very quick, because theres a ton of money on the sidelines that hasnt participated in this market that wants to get in, and maybe is just reluctant to constantly be looking at a market at alltime highs. So, thats been the case for the past, oh, i dont know how many months. These pullbacks are very, very short lived. I dont see why its going to be any different Going Forward. Bob, whats the mood of the traders here . Youve been walking the floor, as you always do. What are they thinking about as we head into earnings season here . Its getting more bullish. And remember, its been tremendously skeptical. For two years, the professional Trading Community has hated this rally. Weve called it the most hated rally ever. I think whats interesting here is its not surprising that people like jeff salt make calls that were in an unseasonably weak period, markets are at highs, we might correct. Thats not the bold call. The bold call is that the consensus is wrong, that the seasonal weakness will not occur. Laszlo was on earlier. I think he had it right. Markets are improving because the economy is improving and we see flows into stocks. Thats a good sign. And i cant figure out why the tenyear yield is doing what it is. After having the weekend to digest that strongerthanexpected jobs report to digest the fact that markets have been resilient here. Why not see that moving higher, especially as jpmorgan, goldman are calling for earlier rate hikes . Why is it just sitting here, and if anything, kind of drifting lower today . I think its the biggest drag on the bull argument right now, and i agree with you. For whatever reason, they still dont particularly believe and whats amazing to me is that this is not a part of the market that the Federal Reserve controls, not the tenyear. They only control the shortterm. So, i would have anticipated and i have been wrong on this that the Interest Rates would have been higher right now. But for whatever reason, thats not happening. All i can tell you is look at the headlines over the weekend. Look at fridays headlines. We talked about this morning, stock market up on strong jobs report, or the other way, jobs report strong, stock market at new highs. Now theyre combining these two events. They havent before. Thats another reason why investors are going to start noticing. Well, we get earnings coming out as well bill, if i could add here real quickly. Yeah, you know, the fed, it isnt irreversible, also. If they raise rates and get bad data, then they can always reverse rates. Sure. I think sometimes we lose that focus that they can do that. That was the case with the taper, too, they could always ratchet back up. Got to go, but nice to see you this week, on a monday where were kicking off with markets to the down side after a historic run. Lets send it out to Mary Thompson with a market flash on petsmart. Hey, look at an intraday chart of petsmart spiking on a defiling by shareholder longview asset management. The company sent a letter to the board suggesting the company consider putting itself up for sale. Last week, you might remember activist hedge Fund ShareholderJana Partners suggested the same thing. Earlier today, the company said it was reviewing its capital structure, focusing on possibly returning cash to shareholders. Its stock right now trading up just over 2 , up 1. 40 at 68. 68. Kelly, back to you. All right, we will keep watching it. Thank you, mary. 15 minutes to go into the close. The dow off 50 points, off session lows, but pressure on stocks across the board today. Coming up, who doesnt love a good bargain in the summer, right . Well, wait until you hear the stocks still trading at discounts, despite the markets recent run into record territory. Dominic chu has our bargain list coming up. And apple defying gravity again, hiring a top Sales Executive away from a luxury watchmaker as all signs point to gearing up to its launch of the highly anticipated smartwatch. Well talk about apples makeorbreak smartwatch, coming up. Better have a physical keyboard. Plus, inside the mind of a trader. I love this story. Meg terrell puts a new study under the microscope showing how brain activity differs between high and low earners on wall street. Fascinating stuff, and the results may surprise you. But actual traders who will learn about this study at the same time as the rest of us, and they will join us, coming up. And we will debrief their brains when we come back in a moment. Stay tuned. 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. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Yeah, citi mobile. Pay the dog sitter . My mom works at ge. And deposit that check . Citi mobile. Pack your bathing suit . Wearing it. Niiice bank from almost anywhere with the citi mobile app. Slight pullback in the markets today on this first day back from the fourth of july holiday. You know, as we like to say, we assign a mindset to the market, and theyre rethinking, i guess, the strength of the jobs report and whether or not it means that theyre going to raise rates sooner rather than later, and is that good for stocks or bad for stocks . So, today its down, but we are holding above 17,000 on the dow right now. Psychology is important to markets and know that. Absolutely. In fact, lets talk about trading as well. Beautiful mind or not so much . A cal tech study now showing brain activity, how it differs between high and lowearning traders on wall street. Meg tirrell joins us now with the revealing details, and then we have some traders here to react. So, what are you finding out, meg . Kelly, this research were looking at takes a look at two areas of the brain and how they react to market activity. Now, one area, its a part of the brain associated with reward. It shows higher levels of activity during price runups. Researchers say it could be a good bio marker for irrational exuberance. So, when that area of the brain lights up, we could be heading for a bubble. The other area of the brain they looked at may actually act as an internal warning signal. Traders who sold before the market peaked in the study showed activity in that area of the brain, while low earners didnt have that same activity. Researchers from cal tech and Virginia Tech say the work sheds light on what contributes to market bubbles and could give us clues about how to potentially mitigate them. They also cite warren buffet and his advice, to be fearful when others are greeding and greedy when others are fearful and say his research at least has got neuroscience on his side. Meg, thank you. Appreciate it. Love this lets pick the brains of a couple of traders here to see what they think. I was watching your expressions as you were listening to meg there. Weve got kenny from oneil securities with us and peter costa from empire executions. So, the premise is that something goes off in your brain when you guys sense that we are in an irrational exuberance period, things have extended themselves too much and its time to get out. You know, you have that innate ability that us mortals do not have. Do you agree . I definitely agree. I think theres certainly in a type a personality, kind of a broker thats been in the thick of it. I think its either something you either develop or you just have it. I think its innate, right . Your ability to respond. Yeah, the ability to respond and to think rationally when everyones not rational. And be able to make a decision but heres the thinking i go through, not that i can trade, because i cant in this position. But i worry that if i sell, im going to sell too soon. Right. And the markets going to keep going higher and im going to drive myself crazy worrying about that. Do you guys think that way, too . No, because you see, what are we talking about . My personal account or from a professional perspective . It matters . I think it definitely matters. Talk about your personal experience with when you directly have to decide to get out of a trade or not. As a professional representing a customer or myself . Just, in either case the case where most clearly you have to decide whether to ride that wave or get out, and whats the difference between yourself personally and professionally . In which case i would imagine professionally, maybe thats true, maybe thats not, are you more cautious . No, i have to tell you something, i think when youre doing it professionally, youre right in the thick of it and youre representing institutional interests and youre so engrossed in the trade at that moment, its almost easy to be able to make a decision. First of all, because youre getting direction. You know what your customer wants to do. Youve had this conversation. Youve got them kind of sitting here on your shoulder, so you know what they want to do and you just do it. And sometimes even when your customer wants to do something, you might have another feeling about it. This is where it becomes more of a trader and an instinctual type of thing. They want to get out. If they need to raise money, thats one thing, but if theyre not sure, thats what they leave it in our hands for. And they expect you, they expect you to kind of, to be able to control that, right, be able to go to them and walk them through it, have that conversation. And as long as youre all on the same page, it works. From a personal point of view, i think like everybody else. You always say to myself, oh, did i sell it too soon and did i buy it too soon . Right, right. Is this the result of experience or did you bring it to the table to begin with . Its from experience. Because i dont think when i first came into this business, i didnt have any instinctual feel for the market. And over the years, you develop that. Feel the ebb and flow . Yeah, the ebb and flow, you feel it. And there are some things you just cant quantify. There are times when, and i said this two weeks ago when i told you that my costa family fortune was getting out when the market went over spa p 1,900, so i misd out, but it was the right thing to do. Thinking about the implications of this research, heres the big brother scenario for you. At the Federal Reserve, are we setting ourselves up for a crash . Cant i scan your brains now and figure out whether the kind of activity youre engaged in is triggering the kind of endorphin adrenaline pro bubble kind of activity, or, you know, does it override that part of the brain thats telling you that markets, that here the rational thing to do would be to stop the trade . Thats a very interesting question, because if you scan my brain right now, i would tell you i think we are getting very close to a bubble, if were not already in one. I tend to be more cautious because i think fundamentals are on the line. Both of you. With where the stocks are trading. Youve been this way for years. That was bobs point. And weve been talking about it, the higher we go, the more cautious i become. Now today, this morning youve had how many people come out this m