Today a top analyst says miller has the june part right but it wont happen until june of 2016 one year after this market believes it will happen. Hes here to explain why he thinks first move from the ned wont come until then. And Union Battles are percolating across america. The port slowdown out west and the governor of illinois blocking unions from collecting fees from workers that benefit from union deals but are not actual members of the union themselves. Well talk to aflcio boss Richard Trumka. Hell join us exclusively with reaction. Basically, if you look at the broad market it brings us positive for the year. Dow currently up 140 points. Session highs give or take a couple. S p 500 2,067. And the nasdaq up 1. 25 . Joining us now, our Closing Bell Exchange karen cavanaugh, Mark Spellman from alpine funds, eric ristman from russell investments, ron wiener from Rdm Financial Group and our very own rick santelli. Okay. Lets kick off then with lets go to karen first. Karen, what is this for . Is this all about greece do you really think . No. I think we worry a lot about greece and its a throwback to 2011 where we were worried about contagion, but right now greece is a small part of the eurozone economy. Its not really about greece. There are a lot of other worries investors are worried about. Were in the middle of a sustainable economic expansion. Its driven by accommodative federal policy Central Banks around the world are accommodative. Liquidity isnt drying up anytime soon. Earnings are coming in better than ever. Corporate earnings we have about threequarters of them reporting so far. We have growth of over 4 . And its just normal volatility. Thats part of getting back to normal. Markets are volatile. I find it interesting, ron, given that backdrop that was just laid out and korchtscontinues to lay out that you like u. S. Large cap stocks. Those are the ones most exposed internationally. Weve been saying that for a number of years. Weve been staying there not just because we think its the west place to invest we think its safer. Theres all kinds of volume 2i89 out tilt out there. You can make money in u. S. Large caps, it will be two steps forward, one step back but the ceos have done a great job for the past eight years. Let them go theyll be fine. If youre a buyer, ron, over what time period . Whats your time horizon if youre a continual buyer . Were fully invested have been fully invested for the equity portion of portfolios because we dont see a 10 decline or a 12 . People cant time whole market cycles. How are they going to time 10 . Just stay in and take it like the speaker before. We dont see that much volatility. Theres too much money floating around the world, so if it does slip, 4 5 6 buy or just stay. Either way. It sounds like mark you would agree with a lot of what is being said especially this whole u. S. Growth centric outlook and how that relates to what youre picking in wur portfolio. I agree with everything he said and i would also emphasize income generation as well. These large cap stocks, theyre the ones who have a propensity to have a big dividend and raise them Going Forward because as you were mentioning the earnings are coming in great, Free Cash Flow is coming in great, dividends are going up. Thats a very good backdrop. And yet not to discount the point but to add value to it if you would, utilities have been absolutely hammered over the last week. Dividendpaying stocks down 4 5 over the last week because people are concerned Interest Rates generally are rising and like bonds they will fall in price. I think theres two reasons there. The first one is if you go back five, ten years, the correlation of utilities to Interest Rates is extremely high. Some people would say its up to 90 . So you got to get the rate call right to get utilities right. And i would say thats although they are rising today along with lower yields. Lets get the rate call right. Rick santelli it looked like we were going to go above 2 on the 10year. Pulling back a little bit. Is the trend now for higher Interest Rates . Well i dont think the trend could be for higher Interest Rates, but i certainly do think that theres a very very significant possibility of testing the level that we closed out last year and began this year right around 2. 17 . And i think, you know, should that occur, at that point we could make a better call on the outlook, but remember we started out last january and this january in a very similar fashion in treasuries and after that for 2014 treasuries never were in the red, meaning if you would have purchased treasuries on the first day of 14, awed profit every single day. Well, is that going to be true or not for 2015 . Its true thus far but the melt up is very interesting because it seems to coordinate with a lack of significant downside further downside on the benchmark european sovereigns especially after that big meeting, and it semz toems to correlate with a little more stability in the dollar. Its hovering at decadeplus levels but it has been hovering of late. Let me ask you a very practical question rick. With so much going on at the moment, for those that are lucky enough to be able to remortgage and may have remortgaged already and are wondering if the rates will come down to make it effective again, particularly with a flattening so a 30year remortgage would be a really good idea potentially, do you think were bottoming out here because of what is happening with u. S. Growth and the fed or do you think that the ecb actually starting qe will start a further move down on Interest Rates . I think if theres any big activity postmarch regarding qe in europe it will be bad news not necessarily good news so i think yields would go down but i would say this. Anybody out there thats looking to refinance or get a mortgage i would assume that these rates are as good as it gets because i think were splitting hairs on the benefits moving forward versus the risks. You know just looking at the price of oil, want to introduce that into the conversation. Eric, we saw a 5 drop in Wti Crude Oil thats obviously hitting the energy names. With a more than 100point ral yea on the dow, does that mean weve broke than correlation where it seemed at one point tick for tick the equity market moved with oil . I think the market is really obviously been processing the impact of Lower Oil Prices and a higher dollar on corporate earnings. I think were going to get through that maybe were through it. I dont expect oil to continue to i did not expect it to continue to move up even after the recent movements. And you got a basic supply demand imbalance. Theres more supply than there is demand. Both of those sides are inelastic. It will take a long time in our minds, at least the end of the year, before you see any rebalancing of that and oil moving back to 70. I think you will see the equity market crunch ahead with the understanding low oil prices are good on balance for the u. S. Economy as a prior speaker said. Particularly for the consumers. You have been frantically nodding through a lot of that. Last word from you. I get excited. The truth is oil prices low ser good for everybody. I cant imagine, i think you buy the oils that have gone down more than they should have. This is an opportunity to buy oils, but i think its good for the entire u. S. Economy, make us stronger. Its all better. You know karyn, i did hear that from cokes ceo when i spoke to her this morning. Should see it throughout the year. Do you buy consumer staples, discretionaries . I love the Consumer Discretionary sector. Earnings are up 9 . The estimates were slashed, that was inappropriate. Energy sector earnings are down 20 . Still overall growth on the s p 500 companies is up over 4. 5 . So, yeah Consumer Discretionary, technology. I like industrials as well. That fits in with the whole Global Economic expansion. So i think theres definitely good things for the consumer coming up. I agree. When you get back that to Energy Comment you made i do think were starting to see the bottom in energy. Do you really . I think so. Because we just heard we werent to the bottom. Wasnt citi calling us down to 20 yesterday. There were some big voices saying this isnt it. Weve been underweighted and im still underweighted. Were trying to let the stocks tell us when theyre bottoming. You saw Diamond Offshore terrible numbers, terrible outlook, down 8 on the open closed up 3 . Thats a positive sign for the stock. Going forward i think there could be m a. You want to buy the names with down stream. I think the Service Companies though, if were at 50 for a long period of time, those earnings are still susceptible. I would stay away from those. Do you believe the stocks in general are a lead indicator . You just said youre looking at the stocks as a lead indicator on oil. No no no. Im trying to find when all the sellers are done. When i see the stock go down 8 and close up 3 , thats a good sign everyone is washed out. You dont think the basic price of oil is the main driver here . No i dont think they can foresee where thats going. No. I think you need to get it directionally. If its going down or flat thats one way to invest or if you think its going up. The exact number if its 22. 50 or 60, thats less important. Its directionally what you need to nail. Thank you all for your time. Here we are about 50 minutes to go before the closing bell. Were looking at a 140point rally on the dow. Breaking a twoday losing streak. S p 500 up more than a percent, and the nasdaq in the lead here simon, up 1. 3 . Apple is a big part of that story. Up next on the program, we will pick up that conversation about dividend paying stocks under the gun lately. Our own jeff cox says theyre still a good bet this year. Jeff will be with us to state his case and have it crossexamined. Also ahead, General Motors in the crosshairs of activist investors pushing for a seat on the auto giants board, plus an 8 billion stock buyback. The pros discuss how this could play out and how much heat this puts ceo marry barra under to rev up her game when we come back. I make a lot of purchases for my business. And i get a lot in return with ink plus from chase. Like 60,000 bonus points back. 00 in the first 3 months after i opened my account. And i earn 5 times the rewards on internet, phone services and at Office Supply stores. With ink plus i can choose how to redeem my points. Travel, gift cards even cash back. And my rewards points wont expire. So you can make owning a business even more rewarding. Ink from chase. So you can. What makes it an suv is what you can get into it. What makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Back. Well for the first time in three sessions we are looking at gains. 45 minutes left to go before the closing bell and the Dow Jones Industrial average is up 135. The s p is up a percent. Nasdaq up 1. 25 . These are session highs, simon. You dont need me to tell you stocks paying a healthy dividend did great but when experts are predicting theyll tail off this year. Now that were more than a month into the new year, our own jeff cox updates us on how that forecast is working out. Good afternoon jeff. Good afternoon. Good times for dividends seem destined to last at least for the rest of this year. Every time this trade gets written off, we see wall street offer new reasons to stick with dividends. Credit suisse recently outlined a few of those, low bond yields reasonable pricing, and strong cash flows into dividend stocks. Dividends are projected to increase 20 through 2020 and that dividend payers have been outperforming by 7. 5 per year since 2009. Now Howard Silverblatt tells me dividends are on pace to grow over last year. Finally, dividend etfs have been easily outperforming the broader market. We can see them withd wx International Fund and the spdr global is up 8 . The fear is yields can rise and make dividends less attractive. Even with slowly rising yields which is probably going to be the case dividend payers should remain ahead of the pace and continue to be a solid play amid a volatile market. While many have tried writing this trade off for several years running, it looks like dividends will remain a solid play for the year. I suppose we should point out the elephant thats standing in the room jeff. As these dividend payers rise in price, as people chaise them to buy them so the race of dividend theyre paying falls. Its simple math. You have to be careful with this. Its a good point, simon. You have to be selective in the category. I think you want to look at areas like telecom and even though utilities fell outside of bed last friday soninlaw ofme of those stocks. You have to watch for high debt companies. Thats why i think the etfs are a good play especially the globally diversified ones. They will help you kind of sort the wheat from the chaff. Stick with us for a moment because we want to bring into the conversation on daily dividends here patriarch equities ceo Eric Schiffer. Eric has some pretty strong thoughts. Eric, youre not such a fan of dividends. You like Share Repurchases or reinvestment as a use of cash better . I do, i do. I think it makes more sense. You know, to me an organization, if its really a strong orths, organization, is going to continue to reinvest in organic growth. They will look at share repurchasing and akacquisitions. If youre an investor and you want to give money, why just get your money back . You should be getting a much greater turn. So for ceos that are running companies, the fact that they have to give a dividend to me means its lacking in creativity. Theyre lacking in putting money to better use to get the yields that you can get because of the multiples that those earnings should be able to deliver for the share price. To me i think its a bad move. I think there are good stocks hang on hang on. We can stand here and pontificate on whether its bad news, but its been the major theme certainly through last year and arguably heading into this year. The major buyer of stock or one of them has been ceos buying back their own stock and i dont know what the figure is but half a trillion dollars is what springs in my head. I mean, we could debate the rights or wrongs. It has worked for the likes youre making my argument though. Okay. In many ways. Youre saying that theyre buying back their own shares. To me that suggests a strategy if all ceos were to take it to eliminate the whole concept of dividends. If youre reinvesting in your shares that makes good sense. Youre using that money and that capital that you wouldnt just give to investors. Here is the problem with that. Buybacks were a great formula for the market while the market was as cheap as it was. The market is not as cheap as it was anymore. Were getting up to now the point where were hitting at least historical norms for valuations on stocks if not even a little bit beyond where we should be. So those buybacks start to get more expensive. It just gets to be in like i said a volatile market a much more sensible play to just say let me just pay you to own our shares rather than take the chance of hoping that the market continues to keep climbing. Especially when we see we have a flat market this year. I think thats just as dicey of a strategy. You know eric i just want to make this point. Im lucky enough to have a lot of conversations on air with ceos and off air with ceos, and whilst jeff makes a good point, were at a stage now where some of them still have to buy their own stock because as soon as they stop buying their stock, people will say, do you not think its worth a buy anymore . Some of them have painted themselves into a corner where they will probably end up buying stock way beyond valuations that in hindsight will prove to have been worthwhile. Thats the argument. What do you think . I think, look in some cases that may be true. Im looking at a much broader argument and im also taking into consideration that the whole concept of dividends if youre giving it out, it prevents you not just from repurchasing shares but prevents you from doing acquisitions prevents you from organic growth and that doesnt include the whole concept of taxation. With a stock, if it appreciates, if you sell it you have capital gains. If you sell a dividend that youre excuse me when youre paying tax on a difficult dendvidend, youre talking about incredibly high rates especially if you live in beautiful places like california where youre talking almost close to 50 of that money is gone. So the final question i have it goes to you, jeff since you were sort of the proponent of dividends in this conversation. Arent these stocks expensive . If you look at the utilities and consumer staples, they have been rich in terms of their valuations because they offer steady paying dividends, theyre defensive, but can the Earnings Growth keep up with these kind of valuations . So where are you looking in terms of dividends that you like that may not be that expensive . I think what you want to look for are the companies that are paying that have a low payout ratio right now which theres still quite a few of those because they have been using so much of the money for buybacks so the payout ratios have been staying low. I think theres still a lot of those companies out there. You have to go company by company but look for some of those etfs. The funds out there are doing very well and, you know, i also dont necessarily buy that this is a mutually exclusive thing, like it has to be either dividends or buybacks. I think companies have been doing both. As the market is more expensive, as m a gets more expensive, i still think theres at least another years worth of room to grow for dividends. Well it certainly was a lively conversation. Thank you both with two ideas out there on dividends. Jeff cox and Eric Schiffer ceo of patriarch equity. With the markets up now 135 points on the dow, taking us into positive territory for the year, worth pointing out in the wake of the conversation weve just had, top gainers to