Change. Its been nearly a month since the index ended in unchartered territory. We have much more on the nasdaq and the feds rate hike strategy and the market. Including which stocks are set to heat up this summer. It officially begins this weekend. But the real feature today is what . The dollar. Whats going on with the dollar . The first up week for the u. S. Dallas against the euro in five. Thats the real story. Well get you your own show on cnbc calling it the dollar and you. Dont tease me bill. The dollar actually making a move. Its up 1 after janet yellen. Its one of the places where you have seen the biggest reaction. A move. Lets talk about it. Back with us kathy jones from charles schwab. Whos with us here at the big board, Gerard Fitzpatrick from russell investments, ken mahoney, also with us here at the New York Stock ExchangeRick Santelli checking in. When you look at how the market responded, you didnt get a whole lot out of this did you . I think she just reiterated what we already know and that is that the fed intends to raise rates this year. We think theyll probably start in september. As long as the economy is doing well, theyre going to take a gradual approach. Which i think is pretty well based into the market already. Are we there yet . I mean what has to happen for us to be there so they can start raising rates do you think . I think were probably there. Again, i think the big concern for them is the communications strategy. They want to avoid another taper tantrum. Unemployment is falling and even though the economy was slow in the First Quarter, theyve dismissed that as transitory. They believe it will pick up again. I think what it indicates is the new growth rate of 2 to 2. 5 is all they expect. Were not going back probably with 3 plus growth rate. And then rates will stay down lower at least than they have been in previous cycles. Right. Rick santelli perhaps a bigger market mover was the Inflation Report that came out earlier this morning. Saw yields tick up. Is that what youre talking about out there in chicago . Yes, definitely. That was the big piece. The other thing that was missing today as a little flexibility. Many traders on this floor who by the way left early in the Foreign Exchange and Interest Rate complex, thought that janet yellen 4 1 2 hours after what was the hottest core cpi rate going back to august 2011 could have mentioned it even if being on the road she didnt have all the dots connected. Not to mention it at all and then make a comment in her speech that was, you know keeping the development and Economic Activity and inflation, keeping us up on those as they occur, really disappointed traders to some extent. As for whats going on in the marketplace, there was a lot of volatility in the market obviously at 8 30 eastern. There was i allot of volatility when janet yellen started her speech at 1 00 eastern. Traders were on the wrong side for most of the week. Rates were spending time under 2. 17 for about 24 hours. To think Interest Rates still close up on the day and on the week was kind of surprising considering that bias. Ken mahoney, last time you were on we talked about the lack of volatility. The decline in the vix. The vix is below 12 sitting right on it. It was below it earlier. Thats the lowest of the year. I looked up what do you think the alltime low for the vix is . Around 11 1 2 or so. Single digits. Alltime low is 939 setback in 1993. Traders are frustrated by the mobile volatility. For investors, they have to love this volatility, this grind higher so to speak. Weve been saying for the last couple years, buy the dip, sell the rip. Were key in on the vix, the volatility index. Something will happen and the vix will shoot up and that will be key, it will take chips off the table. While the volatility is low, well stay with that trade. Well stay long after investors get this low data feeling, we accept it. What do you mean by there may be another shoe to drop in the bond market . I think its like the taper tantrum weve seen last year. Weve seen it earlier this year you put that into perspective, that happened before the fed started increasing rates. We certainly expected that the fed would increase rates of september of this year. Today, chairperson yellen had an opportunity to be somewhat consistent. She didnt. She clearly pointed that inflation is on track as well as employment. Hikes will occur in september. Thats the potential for the next shoe to drop. In other words, another type of taper tantrum or another increase in yields. So with that were positioned to be relatively short Interest Rate duration in our portfolios at the moment. The minutes from the april meeting suggested that the fed i dont want to say theyre fearful but theyre mindful of what could happen when they do raise rates that first time. We could see that proverbial taper tantrum like we saw a few minutes ago. Do you think that is what will happen . There may be a fair amount of volatility but i doubt it because its been clear about what their intentions are. If you havent heard the plan is to raise Interest Rates, you havent been awake for about a year now. I think the most likely scenario though is if the fed is raising rates and the dollar continues to appreciate thats going to hold down inflation. We could see more of a flattening of the yield curve than anything else. It certainly could give us a lot of volatility in the short run. Im not sure its going to give us what we have a taper tantrum, which was a parallel shift in the yield curve. The markets really look forward to it. We should start normalizing rates, from 0 to 0. 25 , theres not much the fed can do. You want to get arrows in your quiver, raise rates so the next time the economy falters, they have something to work with. The economy can still perform with higher fed fund rates. The fed will have something to work with, to be able to cut rates at some point. You see that in financials which are the outperformers in todays session on that view of higher Interest Rates. Is that a good thing that those are the leaders in the session on higher rates . Well the concern i have with financials is the potential for the yield curve to flatten. The expectation of rising rates, particularly in the short end, we see the curve flattening. With that we see it relatively negative for those net interest margins facing banks. Combine that with where we are in the credit cycle, we see more default risk coming through. Rising credit risk could be relatively negative for banks. Id be cautious on financials particularly after an increase in valuations. Interesting. Rick, ill ask saras question. If the dollar is having a first positive week in a while, do you think were getting ready to resume the rally that started earlier this year where everybody was thinking we were going to get parody again the euro . Listen if we take the fed at its word within that does get difficult but if we take the fed at its word the dollar is idling getting ready for another move shot in my opinion, specifically about raising rates and normalization. Keep in mind there are a lot of issues that the fed has that are highly highly highly subjective, not objective. We are running into gdp but we overlook other things. Fed is looking for raez many traders think, to raise rates. Im not sure that the market is ready for that ideal time because its not about the glide path that you hold the portfolio. That is about when it occurs. What guide path is almost the easiest thing at this point. Right. One and done raising rates slowly, i think people get that. The date is happens, ill see what date it does happen and see whose portfolios are ready for it to happen. When we can talk about what the fed is going to do or not this whole time it comes down to the data. Thats what theyre telling us. Thats what will depend on whether this will continue. Is the data telling you anything clearly . Are you seeing confirmation that the First Quarter slump is behind us and we can recover . We really havent seen a lot of good Economic Data since the since the end of the First Quarter. Its been pretty soft. But the employment side looks pretty good. And the inflation indicator thats starting to turn up a little bit and housing activity has picked up a bit. Thats been the last thing that needs to pick up in the cycle. So its probably good enough. Its not good but its good enough. Ken mahoney, are where you going to make money right now . We still like equities. To her point, this choppy Economic Data reminds me of a seinfeld episode when he plays even steve. Weve been dealing with the choppy Economic News like that seinfeld episode. Good news in the morning, then the afternoon, looks like were not getting any traction. I want to stay long equities. We like domestic. Well watch the vix sharply. Broadly etfs, domestics. I know you have been all over the transports this week. Theyre set for their worst week since the end of march. Right. The question is is that a worrisome signal . Thats incredibly important part of the economy as well. You are playing even steven. Its clear nobody is the master of their own domain in this market. Have a good long weekend. See you later. Heading to the close, we have 49 minutes left in the trading session with the dow down 15 points. Its the s p and the nasdaq that might hit alltime highs today. If they close higher which the s p is just about flat right now. Coming up hot summer, hot stock. Dom chu will highlight four companies that will bring sizzle to your portfolio. When we come back, ola havana. Well have the latest developments and speak with a business pro who is ready to pounce once the green light is fully lit. Thats to come on closing bell. Here at the Td Ameritrade trader group, they work all the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. The u. S. And cuba failed to reach a deal on reestablishing diplomat relations and reopening embassies. That was the key in each country. This despite high expectation of positive outcome today. Our chief International CorrespondentMichelle Carusocabrera is in washington. She explains what went wrong and what it means now. Michelle . According to assistant secretary of state Roberta Jacobson there are still issues of the, quote, fngsing of the embassy in havana. When she testified in front of congress on wednesday, one of the u. S. s demands is that u. S. Diplomats be able to move freely about the island. That may still be the issue. However, the negotiations are not over. Both jacobson and her cuban counterpart said the two sides will keep talking in the coming weeks. In the end, inevitably come to some tough issues before you get agreement but we made great process. I remain optimistic that we will conclude but we still have things to iron out. The u. S. Side worked very hard to fill one of the cuban governments key demands, finding a u. S. Bank that would give them a bank account. Stonegate in florida finally agreed. Its unclear that the u. S. Has gotten anything in return. Guys, back to you. Michelle, thanks. Stay right there. Lets talk about this whether or not things eventually shake out, talk about some of the specific Business Opportunities that might exist in cuba. Joining us also in this conversation peter quinter, former Legal Counsel or u. S. Customs and Border Protection agency in florida. Is today a setback . Your mission to cuba with Business Leaders . We are very excited about going to cuba on wednesday through saturday. This is not a setback. The next few years will be challenging for both Cuban Administration and the obama administration. Years from now five years from now, well look back at this time and think what a great thing it was that these negotiations did take place and that they will result in u. S. Embassy openings in cuba and the u. S. Flags flying in havana. Michelle you and i talk about this all the time. Expectations are very high but the hurdles still remain. Most of them are in cuba arent they . Yes. First of all, theres still the u. S. Embargoes who do a lot of business down there, its still illegal. Second, its not clear if the embargo went away the cuban government wants business down there. Theyve said for years they welcome foreign investment. Remember, every other country in the world can invest in cuba but theres actually little Foreign Direct Investment in cuba because they have anticapital laws in place and regulations, which its the taxation they put on them when it comes to hiring local population. Theres all kinds of things that a business wouldnt necessarily want to start a business there or investors wouldnt necessarily want to invest in there. How are you handling the challenges . There are definitely challenges. There is a cuba embargo by the United States. There are many exceptions. There has been significant business between u. S. Companies and the cuban company. Which will expand. As you probably know president obama in january loosened the embargo a little bit allowing for a little bit more trade. There are several industries which will grow quickly once the embargo again is reduced. Another problem, peter, maybe the biggest problem is the lack of infrastructure in cuba to begin this process. What are you and your lawyer friends hoping to accomplish when you go there next week . Whats the objective when you get there . We are meeting with government officials from cuba. Meeting with also the Legal Community in cuba. And basically my counterpart, the International Part in havana, were hoping to have a greater understanding of the legal system in cuba and educate them about our legal system. Yes theres so much optimism we hear about the potential for this market we saw Carlos Gutierrez on squawk box earlier this week the commerce secretary, this morning it was its been a long day talking about how it could be the next singapore. Its possible if they did the right things. Its 11 Million People completely uncapped. Is there opportunity there . Absolutely there is. The question is, how is it all going to play out when your guest talks about the opportunities these different businesses that can go down there, there can be telecom down there, more internet down there. But the cuban government has been allowed to buy those products from other countries and they havent done so. Learning about the legal system in cuba, remember, every single lawyer in cuba still works for the cuban government. Because that is one of the sectors of the economy that the cuban government says theyre still going to control. What do you make of that peter . I know youre mindful of that but they dont exactly have what we call a free market system set up over there. Exactly true. I look at it as the way you should have looked at china. 30 years ago, all the chinese lawyers work for the chinese government. Now china is the number one trading partner with the state of florida. One of top three with the United States. I hope 11 Million People in cuba will also understand the benefits of a free government democracy, capitalism and trade with us. Five years from now, well look back at this as a water breaking period. He puts his finger on a key question many are asking right now. Is cuba right now china 1980 . Is this the moment where its really changing . We dont know yet. Lets all gather again in 30 years. All right. You got it. Michelle, thank you as always. Peter qu nextinter, thanks for joining us. Let us know how the trip goes next week. You bet. The dow down 12 points. Were waiting for the s p. If it finishes positive that would be an alltime high. Were also on Nasdaq Record watch. 5,092. Were above it. Were getting there. We still have 40 minutes left. Anything can happen you. How the latest comments from the fed chief janet yellen moved the needle. Where that stands Steve Liesman and a top bonn market pro will be here to weigh in. And stocks that may be poised for hefty returns this summer some of the names on the list might surprise you. I cant wait. U decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Lets take a look at the major indices. While it looks like not a whole lot is going on in terms of the point move its at a different level. If we stay positive, that will be a record high closing. Thes in back is kbofabove 5,100, also an alltime high. As you know memorial day weekend is here. Time for summer stock picks. We have quite awe few a few that may perform. We look over the past decade in the stocks in the s p that show good outperformance between memorial day and labor day. Well use that as our summer season. Take a look at these numbers. Again, on average over the past ten years between memorial day and labor day, these are some of the stocks that do well. Cable vision shares have been hot as of late because of all the cable news talk and the cable vision news talk and all the consolidation that may happen with cable companies. On average, stock is up 9 this past season. Over the past ten years, its been up 80 of the time. Amazon. Com, a retailer, maybe seasonably, not a strong sector to be in amazon shares are on average up about 8 each of the past ten seasons. Theyre up 90 of the time. Over the past ten years, a high probability trade. Apple shares up 90