Stock. Thatll be coming up a little bit here. We have an apple countdown. I love that. It even looks like an app in some ways. This isnt your markets countdown clock to be sure. Tesla taking off today, the electric car maker making a big announcement. It could mean a new revenue stream for the company. Well explain that one for you. We have the details coming up. Very, very very interesting. Also, a crude reality check, oil backing off of the rally over the last month here. Finished lower today, were around 56. 95 we have two sides of this story, whether or not this recent run higher for crude oil is really over or not. Its very important question for the fed for Interest Rates, and the economy down the road. Another disappointing dallas fed sur stla morning as we assess the damage. Lets start where the markets are right now in the final hour of trade. We are seeing pressure across the coverages. Its a little less than a tenth of a percent. S p down significantly, broad index down 2112 is the level there, about a quarter percent on friday. Since early march, when apple joined the dow, the s p and the nasdaq both hit alltime highs. The dow has yet to do that since apple. How ironic is that . Only a few months before that. The nasdaq is mentioned under pressure. And 1 down thats significant. We have a lot to talk about, dont we. Lets get to it for this monday. With us, margie from wells fargo, jeff from kkm financial, eric from rustle investments, david from Mainstay Capital Management and rounding out the team, Rick Santelli joining us from chicago as well. Killer, you know typically youll get a lot of volatility in the market when earnings are being reported. But weve had a very quiet market in that regard, the volatility index is at a major low right now. Whats your version of why they are so low right now . Well bill one thing thats dropping jaws in chicago is the biotech. Look at the move in the ibb, thats the nasdaq biotech, were seeing a sharp top, 4 dropping. If you look from friday, and i know its in my optic view we are seeing about a 7 move. So that is certainly concerning traders here in chicago. Is that the land unanswered repealed next, right now youre right, volatility is very low alltime highs again here in the s p 500, i think this is the time, if theres ever a time to consider portfolio protection via futures are related products. Well get more into that biotech movement in a moment. Eric let me ask you this though, do you start to buy. Its interesting that the rustle under pressure today when if anything, the earnings season is telling us stay domestic and avoid the overseas stuff. Which way would you go from here . Well, i mean if youre worried about the foreign exposure. I think you can play that more directly by buying europe and japan. In our minds, much more attractively priced and have tail winds relative to the equity marketplace. Rustle 2,000 weakness today, given the fact that biotech is weak isnt hugely surprising. Got way out ahead of itself likely due for the same kind of correction we saw last year when we saw them get out way ahead relative to the market. Its the biggest weight in the smallcap funds. Lets get to the story before everybody else here. Bertha coombs is standing by with more on this sharp decline in biotech stocks that jeff was just talking about. Sharp decline, and one of the things that people watch when you see one way, sort of momentum like this is volume, and we are seeing a much higher than average volume already with an hour left to go in the trading day. One of the things thats sort of helping contribute to that negative feeling is that what i call the unrequited love dance between mylan and teva and perrigo, rejecting the bid. The market cap is about 35 billion. That bid undervalues the company. Weve also got some big heights recording later this week in terms of earnings. Gill yan, one of them on the 30th people worried about the momentum slowing down there with regard to its hepatitis c drugs because theres more competition, theres more pricing pressure. Bucking the trend are some of the usual suspects, we talked about tesla, also monster beverage, it doesnt report until may i think often whenever you have a disappointing on the mna front, the mylan looking like its rejecting the bid. Disappointed investors are taking chips off the table. All right. That storys not over yet though. Mylan. If thats the basis, the fact that were not having this megadeal perhaps potentially at least as of today is enough to send the entire group lower i mean what does that tell you about how much speculation there is for further combinations across the sector versus fundamental growth and some of the earnings that theyre putting up . Yes, it tells you theres a lot of speculative money, ian, Biotech Sector has been well owened, overowned, it doesnt take much money to move out into others such as more european that are National Related to take a big step down in a lot of those names. Even so, a lot of the names are up double digits ian after a correction like today. Theres still hope for the sector, i think. David, as it happens, youre pounding the table for a long short strategy on health care in the aggregate, why . Whats going on there that you want to see . The thing that we can do within the Health Care Sector its a very broad industry sector, and under obamacare, there are clear winners, clear losers there are a lot of opportunities within that one industry for both longs and shorts. And that is where the Portfolio Manager betting on some stocks to go up betting on some stocks to go down if he does that well you have good portfolio performance, almost no matter what the sector is doing his picks are right. And right now in the Health Care Sector, its been very good over the past few years with a long short strategy, you can reduce the risk hedge of the portfolio, and get nice returns. Youre basically saying, pick us well help you avoid the damage, dont worry about it. Yeah, right now the market has come so far, and we still believe were in a longterm secular bull market. What were looking for in our portfolio is, were concerned about revenue on s p 500 stocks. Revenue is down 3. 5 small cap stocks is up 5 why . Strengthen of the dollar. Small caps, midcaps, we want to look overseas to europe and japan, they have quantitative easing as a floor for the stocks. We dont hear anymore. We to want look for ways question diversify out of the s p 500, use these alternative strategies, go overseas look at small midcaps, diversify the portfolio. Rick ill let you answer one of the two questions, why do you think it is as low as it is right now . Is that complacency or what about the fed meeting this week . This is sort of the forgotten fed meeting. We are all focussing on june right now, or september but nobodys thinking about whats going to happen this week. What are you thinking . I think you can reconcile both of those questions with one answer, the fed, the vix is low because of the fed. And most traders are taking a longer term view on normalization, therefore, they believe theyre going to live longer and lawn trade, theyre not going to buy any Life Insurance known as the vix. I think its fascinate, 29th session after the fed meeting. What does it mean for Interest Rates . Last closed above 2 was a day before the statement on the 17th. And in the 29 sessions, every one of them in tenure have closed in the 13 basis point closing range between 186 and 199. And as far as what the fed means or doesnt mean today, like sir arthur solution to figure them out today, you have 17 minute solution because at 11 53, the nasdaq went negative s p didnt go negative until 12 10 eastern in the 17 minutes, they went down when the nasdaq did. Even though it moved to levels we havent seen since early april, almost early march with the 109 handle euro, so they are looking at the fed just like the vix not looking for any tightening any time soon. Rick, are you trying to say that basically the, you know, the bond market is spooked by the downward move in the nasdaq . Its not necessarily that maybe the nasdaq is responding to, you know, a bond market feeling more optimistic about growth in the future . Oh no no if you were on the floor watching the minute by minute, there was little doubt that when nasdaq went negative there was more aggressive buying and treasuries in a market thats honkered down anyway with the fed meeting starting tomorrow. Back in the day, we called that tape watching. I love that. Ricks tape watching right now. Very good. Thanks gang appreciate everybody your thoughts on todays market action. Thanks very much. Only 50 minutes to go here into the close. Dow is down by about 11 points at the moment. S p down 5. 5, nasdaq giving up 30. Again, if we excluded apple, it would look a lot worse as people continue to focus on what it is thats eating the bioteches. Coming up got to show you this clock again. Ticktock on appless earnings. Well preview the tech giants results and whether or not a dividend and stock buyback announcement are also in the cards. Plus a top wall street pro explains his rating on apple which is already near its highest level ever right now. And up next, Mohamed Elerian. The ongoing greek saga and what he thinks about the fed before this twoday meeting kicks off tomorrow. Were back in two. Man you run a business. Could be any kind of business. 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Utilities under pressure as well which is an interesting combo to see right there. My next guest concerned the fed may be too successful in boosting asset prices so hes got his money in cash. Yeah. Isnt that amazing, here to explain that from the milken institute, Mohamed Elerian is back with us. Mohamed, great to see you again, welcome back. Thank you. It happened again over the weekend, every time i run into viewers, in this case they were money managers, they wanted to know what i thought the market was going to do when the fed began to raise rates. You seem to be answering that question with your portfolio right now. I mean, do you think the markets going to have a problem with the fed begins to normalize . So first i dont think the markets going to have a major problem. My portfolio is much more barbell, what does that mean . I think in some exposures out of the public markets, which are heavily traffic because thats where the feds been putting everybody. I think some in cash some in higher risk less liquid exposure. More barbell in order to the no chase the fed because i think theres a genuine question mark as to whether the fed would be able to deliver better economic fundamentals. And as long as we dont get the fundamentals, we are at risk of not validating the high asset crisis. All the same moe hemd, do you want to be for people watching out there selling when corporations are so aggressively buying their own shares in this market and when it doesnt look like the economys about to crater, unless there is your view. So kelly, absolutely right. This market is getting wonderful support, one Central Banks, Central Banks, including china is the latest thats going to join this party. And secondly a ton of cash that is being deployed back into the market. So thats the good news but that has a limit, at some point you need a handoff. Hand off to investment in equipment hiring. You need a handoff from Central Banks to more holistic policy responses. So i have no problem saying that in the short term, the market will continue to get support, i just wonder about the longer term handoff. Just for the record, when do you think the fed will begin raising rates, and really in the scheme of things does it matter whether its June December september, next year some time . And way below historical levels so the fed is going to work very hard to get us off the obsession of the date and focus more on what its going to be a very very gradual journey. I call the loosest tightening the fed would have ever done. The loosest tightening. Well see about that one, mohamed mohamed, almost our problems here pail in comparison to what your policy makers are dealing with when it comes to grease. How do you play that scenario . What happens here . Are there going to be capital controls, how will the euro be affected as well . So i think the more important meeting on wednesday is the weekly meeting of the ecb when it has to consider how much emergency lijd i did support does it provide grease. And the ecb is getting nervous because nobody sells giving money to grease and greece is repaying private creditors and the imf. They are getting nervous that is the only game in town. Will it pull the plug . No because no one wants to go down in the history books as the person or the entity that caused the first exit from the euro zone. Will it extend . Yes, but it wont solve anything. My biggest worry is an accident. You said what it looks like. We have capital controls we start getting small defaults the local municipalities wont give them money to the center and you get capital controls. In that world, the chance of an accident that pushes greece out of the euro zone is quite material. Meantime the dollar has stalled here, mohamed, after that big gain that it saw, do you think thatll resume at some point . And is there going to be a paying point for the fed where theyre going to have to do something about . Or does it delay when they can raise rates. So yes to both yes, itll resume it was a very crowded trade. Very crowded. And its gotten technically better, and but the fundamentals all call for a stronger dollar. Thats the world of divergence. Nowhere near yet the point where you get a reaction from the u. S. The dollar can move another 5 to 10 before you start getting a strong reaction from the u. S. , before you get political talk of the currency. Weve seen it before. We saw the yen move to 120, and then stalled there because it got to a stage where it was too much of a devaluation for others to support. And i think that well get that with the euro, but were not there yet. Mohamed, we have to go real quick for everybody thats piled into europe they see value to our market is this greece issue going to mean that european stocks, that the run is behind them . Will this derail the rally or could the rally actually continue if and when this happens . So i think in the short term if there is a greek exit it will shock the markets. I dont think longterm it makes a huge difference, but what i do think is important and not enough people do this, kelly, hedge the currency. Ek we my extoe sure equity exposure, but not the currency exposure. Thats been a huge growth part. The wisdom true product, mohamed, thank you so much. Thanks mohamed. Mohamed elerian for us. News alert on netflix. Dom, welcome back what do you have . Its good to be back guys thank you very much. Well talk about netflix, we have new news regard to the ceo executive compensation for 2014 per regulatory finding, reid haystings total compensation rises to 11. 06 million. Thats a 43 increase over his 2013 levels of 7. 7 million. The bulk of that is in an option award, 8. 1 billion. The salary did rise by a Million Dollars to 2. 96 million, again, lets put it in context remember, we pointed out that the reed haystings stake in netflix a couple weeks ago was valued at over a billion dollars, as we talk about the options awards yes, 8 million in options but he has around a billion dollars worth of netflix stock, back to you. Hell be fine. Hell be fine, yes. Reed haystings should probably be paid a dollar for his shift. Yeah exactly. Hell be fine. Michael, power lunch, he recommended that disney buy netflix back when their shares were ideaer. They are not today. Would have, should have could have. 38 minutes left in the trading session here. Moving lower. We heard that the biassed maybe to the cell side as we head to the close over the downtown 40. Nasdaq down 37. Up next tesla zooming higher on buzz it could disrupt the electric grid as we know it. We have details on elon musks next latest plan when we come back. 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