Transcripts For CNBC Closing Bell 20150410 : vimarsana.com

CNBC Closing Bell April 10, 2015

This is the major catalyst. After the Company Announces this major restructuring, its not only divesting this business it will return 90 billion to investors through dividends and stock buybacks by 2018 bill. The dow component soaring trying to close at its highest level in nearly seven years after the Company Announced that restructuring. We went over all that. Juke see you can see what the major story of. The other big story, apples watch. Its ready for preorder but its already sole out. Its backordered until june. Will consumers make this the next big blockbuster. So far so good. Well hear what the experts have to say and whether it moves the needle needle. Apples stock. Also Japan Bringing aboard a legendary film icon to scare up tourism and you wont believe who or what it is. You wont want to miss this story. Its all ahead on closing bell. Here is how we trade going into the final hour of trade for the week. The dow up 98 points now. Thats the better performer of the three major averages. The s p is up ten. Nasdaq is up 19 at 4994. Lets get to all of this in your closing bell exchange. Michael robinson from money morning. Com is with us today. So is Hugh Anderson from hightower. Gina sanchez. Larry mcdonald from socgen and Kenny Polcari from oneil securities. Kenny, youre or mr. Market today. You take away ge and whats going on . And its a relg tiffatively quiet day. The earnings really start next week when you get the banks and a lot of conglomerates come out and investors will get a sense of what earnings are there going to be . Will they be like alcoa where the dollar was not such a big issue and the fact they had a lot of income in foreign currencies that were weaker actually helped them. So this anxiety thats been being over the stronger dollar may not necessarily be all that big. Gina, what do you think about some of the performance today. Looking outside of ge its a strong day for caterpillar. It looks like that company is up 2. 5 . Its had several days now where its quietly seen some strong gains. Anything you glean from that or more broadly how the market is positioning into the next couple weeks . Well you know obviously caterpillar is very much, you know its a bellwether for sure and i do think we have seen improving earnings with the exception of energy. Thats the big exception obviously. And the expectations for this earnings season are very very, very poor. So i think that we could see some beats just off of the fact that everybody is expecting, you know terrible numbers. But generally speaking i would say that im looking at revisions by economists for the Growth Numbers and im also looking at the savings rate and its telling me that even though weve had very cheap gas, we havent had a tremendous amount of demand and, therefore, its hard to expect a whole lot from earnings. You know were just at the beginning of earnings season, and i do think this is going to be disappointing. Michael robinson, another franksal gain fractional gainer would be apple. The apple watch sold out in a matter of hours online and they have to wait until june if they want those who didnt get in on the first wave. What do you think of that as it pertains to apple stock . Its something weve been talking about all week. Whats your version of that . Well i think they have a very successful product on their hands. It sold out in no time. I ordered one this morning. Im waiting six weeks to get it. I think they can do 10 million watches in the first year. Thats a little on the conservative side of all the analysts. At that rate were talking 4 billion a year. I think they will disrupt the entire watch market. Were talking about a market thats 2 billion a year in scope. Theres a lot of room for them here with this watch. And it comes on top of the new payment system. Youve got the breakout with the new iphone. So theres a lot of momentum. I think its an excellent catalyst for the stock and the whole wearable tech sector and tech is really really driving the market right now. One analyst i dont know if you saw the email we got. Hes upset that the apple watch he just found out is water resistant, not waterproof. Yes. People pointing that one out. People might be finding that one out the hard way. Michael, are you doing Market Research or do you genuinely want the apple watch . What is it about this product to you that is a musthave . You know well for me its like i have an ear bud. I wear it most of the time. Obviously i dont have it on and ill put it inside my watch band at night and talk to it. So for me to dictate ideas and memos to siri i was at the dentist last week and i had to put my phone across the room. I was having separation anxiety. For me it could be a really good productive tool. Wall street journal had an excellent video where they were talking about whats good about it is its optimized for doing quick alerts and things like that. Im not going to try to surf the internet from my watch. Also the payment in the watch is also very good a nice tool. Hugh are you buying one . Or are you buying apple shares . Im not an early adopter. Im a Firm Believer in manufactured scarcity. Theres a lot of people that like to adopt that kind of thing but it remains to be seen if there is traction. The dem gresk ographic demarcation will be very interesting. Yeah the new thing, wearing a watch on your wrist. Thats very novel. Weve had huge mergers this week and you think we have more to come in the near term. Where do you see more mergers hang . Well i think youre going to see plenty in the Energy Sector because thats the opportune time when the sector is beaten down, but i think youre seeing were on track for the second largest m a numbers in history and i think youre seeing a lot of companies recognize that the window to cheap financing is closing. My question is are they jumping in because they see opportunities for growth or are they jumping in for trying to achieve economies of scale because theyre seeing diminished Growth Opportunities to they want to cut costs by spreading them over bigger enterprises. Im looking at Larry Mcdonald as well at your concerns. We have seen u. S. Markets underperform the rest of the world, especially this week. How relevant is that for you . Where do you see the most opportunity right now . Well one of the things weve been looking at is the disconnect between dollar sensitive sectors and the s p. You look at the Defense Sector outperforming the s p by almost 800 basis points in literally the First Quarter, a little bit in the First Quarter in two weeks. So youve got a number of sectors in the s p that are extremely dollar sensitive that have been very bid up relative to the dollar so thats something to watch out for as the rest of the year transpires because its a tremendous amount of outperformance in a very short period of time. Kenny, weve been watching china booming this week. What do you make of that . Does it come over here . Is it because of the dollar . What do you see going on . I think foreign markets, whether its asia whether its europe i think those are great opportunities and youve seen it. Those markets japan is within a whisker of 20,000. China the same way in terms of its performance. I think the u. S. Will be okay but i think the bigger opportunities will be abroad. Gina how much does this go back to some of the new ways people can invest in the markets without the Currency Exposure which were going to talk to wisdom tree about here in just a minute . Is that what makes these so much more attractive for u. S. Investors than it might have been in the past . Well i think part of it that might be part of it but i think the majority of it has to do with the fact that policy is diverging and you are seeing easier policy in europe and weve continued to see easy policy in japan where as now were starting to face the potential for policy tightening in the u. S. Maybe its not going to tighten quickly. I think its september and beyond. But, still, were looking at divergent policy and thats going to be very supportive to International Markets whereas it will become less supportive to u. S. Markets. Michael, next time you whisper into siris ear where will you tell her to look for Investment Opportunities in technology away from apple . Where is the growth coming from now . Its all over the place. We have concentric rings of technology. Its sensors, semiconductors, the cloud, Big Data Health care. Im looking for a lot of mergers in the Health Care Industry this year, writ large, which would be biotech and so forth. Technology right now is throwing off a ton of cash. So its across the board. I like just about every area. Theres not anything that i would be getting out of right now in the United States is where i like to be. All right. Michael, can i ask you a question . Its Kenny Polcari. Have you tried to put that watch on your wrist and actually look at it . Because i know i turned 54 i cant even see my watch and i got a regular watch on. Well its funny. I left my glasses in the car. Im doing this today without my glasses on. Right. No i think it will be fine with that. I got the smaller version actually. Your point is well taken. I got the smaller version because i dont want it to stand out too much but i think it will work really well. Even more difficult though to read because its a smaller version. Were going to have to do a test run with you on the floor kenny. Have a good weekend. The strong session, look at that dow up almost 100 points and a big chunk of that does go back to the 10 move in ge. For that company today, helping to bolster the Dow Jones Industrial average up half a percent. But the s p up pretty much on track with that also up 10 points along with that nasdaq adding 19 on the session. When we come back, hes standing right here. We have wisdom trees chief Investment Officer back with us. What. About the rest of the year. Wisdom tree boasts more than 50 billion in Exchange Traded funds. Also ahead weve exited insurance, plastics, nbc universal, appliances, and now financial services. I think our batting average is pretty damn good. General electrics ceo jeffjeff immelt touting their sale of ge capital. Ge also announcing a 50 billion stock buyback. The pros discuss the future of the company and immelt at its helm. Bring us your aching. And sleep deprived. Bring us those who want to feel well rested and ready to enjoy the morning ahead. Aleve pm. The first to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. For pain relief that can last until the am. So you. You. And you, can be a morning person again. Aleve pm, for a better am. Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions appliances, and now financial helm. Orys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Our world is continuously transformed by the innovation of business, but at pwc we believe that businesses can go beyond products or services to have a measurable impact. As a professional services firm, we recognize the role pwc can play in helping build the Financial Capabilities of the next generation. Our commitment to doing so, has helped our people make a difference, not only for our clients, but for our communities. Thats the responsibility of business, and one way pwc is making a better tomorrow. 45 minutes left. The dow is up 97 points. Just off the high of the session set moments ago. The s p is up ten points and the nasdaq up 19. Lets show you i think we were going to show you the dow 30. Yes. Sector board. These are the ten sectors of the s p 500 index and only one is negative, financials. And just barely. Industrials leading the way. General electric contributing to that, but by the way, caterpillar having a nice session as well. We saw the impact that was having on the dow as well. Our next guest says the single post important thing going on is the shift in money flowing into the currency hedged etfs. Joining us to explain in the cnbc exclusive we welcome back wisdomtrees chief Investment Officer luciano sir ra cuekusiracusano. Investors want to hedge their positions. Exactly what weve seen this year is 60 billion has come into the etf industry. 28 billion of that has come into currency hedged etfs. Half of the money going nearly half going into the industry this year went into currency hedged etfs. Thats a huge change in investor behavior. I think its driven by peoples sensitivity to the impact that the foreign currencies have on their International Equity exposure. You have to remember about 50 of the worlds currency outside the u. S. Is in the euro and yen. Last year the euro was down 12 . This year its down 12 . Last year the yen was down 12 . The gains on the stock side are being washed away on the currency side. And its felt that the euro and yen will continue to fall. You first mentioned this asset class probably six months ago on the program. Six months ago on the program. Five years ago in the marketplace. But it took a while for the world to catch up and what it really took is for the intarntioncentral banks in europe and japan to get more aggressive under quantitative easing. Theyre having a qe party over there. It will have an impact on their kaur ren sis. I could be real flip ant. Everybody is realizing they have to be in hedged etfs, that could signal a top in the dollar couldnt it . Going into the year the nashth was 90 unhedged. Now its 85 unhedged. The interesting thing is the euro is really back to where it was nearly in 2010. Its done a huge round trip over 14 years, meaning its getting close to parity. Thats where it was 14 years ago, but with a lot of volatility. Where our question is, why take on that kind of risk if youre not being rewarded with the return over time . The think the lightbulb is starting to go off that this can be used strategically. Our question is aside from this obvious trend which could still have some legs where else do you think were going to see a lot of people putting their money to work and what kinds of products, for example . Well you know i think theyre going to continue to look at europe. I think they will look at germany. Continue to look at the countries that benefit when their currencies depreciate that have strong exporters, that have a balance of payment surplus. I think in the u. S. If you switch gears here we are facing a headwind. Were going to have liftoff soon. Rates are going to go higher. Youre seeing a soft patch here in earnings. May actually get an earnings contraction in q1. So the real question is what happens to the aggregate Dividend Growth. I was going to say Dividend Growth will still be key even as rates go up. People will still be i think its essential. It will separate the wheat from the chaff. The companies who can raise dividends in the environment where rates go up i think thats where the market will be tilting. Six of the Largest Company in america that pay dividends are scheduled to raise their dividends in the next two weeks, exxon, chevron, apple, progetor and gamble j and aj, and wells fargo. If theyre confident to raise the diffividenddividend thats telling you something about what they see for the rest of the year. We havent had a back to back earnings contraction since september of 2012. The market went down 6 . This is a key divergence. Last year earnings increased 5 . Aggregate dividends increased 12 . What did the s p do . It increased 13 . Theres a relationship between how fast the aggregate dividends are growing and what the stock market can return for you. Over long periods of time those two numbers need to work themselves out. Are there any flows that surprise you right now into im thinking through it all. So you have many different products, Precious Metals or energy and oil. Anything where commodities generally under a lot of pressure. Speculative is coming back some of it wants to play in oil. Thats not where we want to go. Weve seen money coming into hedged germany, into japan, until equities hedge that give you Dividend Growth. Will you launch even more particular kinds of hedged products we will. Yesterday we launched japanese Dividend Growth hedged. We created the category and well continue to own the category. Where does this go . The actively managed etfs which you guys are doing as well where is this whole category heading right now. Theres a lot of innovation. Whats really going to happen were putting tremendous pressure on the traditional active managers. They have to pass such a high hurdle because were index space. Were typically lower fee. The Performance Records are starting to build up. So its putting tremendous pressure on the Traditional Mutual Fund managers. Thats where its headed. Its headed for a major shakeout in the Mutual Fund Industry and more innovation in the etf industry. To be fair, actively managed tends to lag index in an up market. Yes. But we havent had a down market in a while. In six years exactly. How do you think you will do relative to the actively managed funds when we inevitably have that down market . We will see and were going to try to create the products that will work well in that market as well. And hopefully well be sophisticated enough on the Asset Allocation level to be able to give our clients some guidance about etfs you can use that get you more defensive positions. It all comes down to how you mix and match them. Is is there anything somebody buying a hedged japan or euro that they need to know. They typical

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