New model three ahead of tonights unveiling. The line is longer for the tesla 3 than it is for the apple se today. Well tell you how to play the tesla announcement without buying tesla stock. Thats coming up a little bit. I did see pictures of people with tents popped waiting to sign up for teslas. Lets start with the digital disruption facing our nations banks, hours ago the u. S. Controller of the currency sounded the alarm on the risks Financial Technologies pose to banks saying what were trying to encourage is responsible innovation. This coming just as citigroup is out with new research claiming that the Banking Industry could lose up to 30 of its jobs in the next ten years due to the rise of Financial Technology companies. We turned mike santoli on this following the story. What did you find . Both of those things you mentioned, the concern about the rapid growth and unregulated areas and potential loss of jobs is because theres really been this gold rush of Financial Technology investments, Something Like 20 billion in investment just last year. Its probably the single biggest area of new Venture Capital investment outside of basic web stuff. Its obviously attacking things like mobile payments and bit coin and block chain related things and any number of back Office Financial advisory type things. This 30 potential loss in jobs equates to 3 annualized for the next ten years. That would be an acceleration off the 2 loss in u. S. Banking jobs over the past few years. What this is telling you, its not just a hangover from the crisis and element with big banks having to adjust, its more core to whats going on with the industry. It seems like traditional finance for wall street banking acknowledges this. Goldman just bought honest dollar, a few Different Things like that going on and occ comes out with the warning that says when it comes to innovation, not so fast. Specifically on the lending side. This peer to peer lending is one thing they would have to worry about. Not having traditional underwritten loans. New platforms out there where you have average people, acting as the lender. I think thats probably what they are getting at. Its not necessarily going to hollow out out of banking but everyone is concerned with it and i think theres two ways, two stock charts that i like to look at to show you how important Financial Technology is. Some of the best stocks the last couple of years, jack henry, they help banks automate the different processes and eliminate things like branches, branches down 7 from the peak, down a couple percent last year. Thats probably going to continue. That will probably accelerate, where i was going to go. On the Customer Service side of the whole thing, many more people are doing Online Banking and you dont need the human tellers. Td bank and others were making their name of saying were open on saturdays and nobody cares about that anymore. They really the branches were meant to push the product not as if a text message is innovative but Online Banking and mobile apps, i can understand how that disrupts the branches. If you look at prosper financial, different platforms which connect peer to peer so to speak, the rates on those have been backing up, the losses have actually been a little bit worse than people thought. I wonder if in a way this will end up being a lot of excitement over a whole form of business thats not in banks best interest. At least this iteration does not seem if its gaining traction. Look at lending club, not been a very successful ipo. All of these things are industry experimenting with the new platforms. The real takeaway, traditional banking is in for a real huge and probably painful adjustment when it comes to these different areas. True. Financial crisis or not, as you pointed out. See you later. As we head in the last hour of trade for the First Quarter for 2016, lets look where we stand with the leading and lagging dow components. Best performers this year to date, verizon caterpillar and walmart. A real Cross Section of industries, telecom leading the way. For the year up 15 . Dont look there for woes about the market selloff. And the worst goldman sachs, we just talked about the challenges for financials and boeing which we spoke about yesterday, some job cuts happening in seattle and American Express sort of lost its way here, big customers and still trying to find its footing here. The financials, theyve been among the worst performers this year. And all of those companies down 10 this quarter. Lets talk about this in the Closing Bell Exchange with Heather Hughes here at post nine. Keith bliss from cuttone and company. And rick santelli. Do you bet on the winners or losers . Last years winners have become this years loser, health care lagging and some large value names have done very well. I think you may see a continued shift if not already at a smaller Growth Stocks companies into large value sector. That is a shift that is definitely still in favor and play ahead of earnings season. I know we have another hour to wrap up what has been a phenomenal quarter in a blink of an eye up eefr 7 in the last month. Phenomenal half quarter. We were down and it was almost precisely the midpoint. February 11th when the major averages bottomed, same thing for oil. Weve had quite a rally in that time. So what do you make of this First Quarter and what does it tell you about the Second Quarter coming up . The sloppiness is something well deal with throughout the year. Maybe not to the extreme we saw from the bottoming in february and then the rally bark to where we are now. The rally came from people pressing their bets and all of a sudden there was a bid into the market and shorts got cleared out and rallied on its own. That is still working through the market. Personally i think that i see the market right now as being somewhat stable until we get to the earnings which start on april 11th but i see real downsides and pit falls to the market that could happen when you look at the macro data thats occurred and atlanta fed reliesed the First Quarter gdp down and personal spending revised down to 1. 8 . Gas prices now hitting 4 a gallon again in florida. Theres real headwinds and earnings are due to be poor for First Quarter. As we start to talk about tomorrow morning the jobs report comes out. How do you think the market is positioned into that . They are positioned to look at tomorrows job report the way many jobs reports have turned out over the last couple of years. Jobs close to 200 and Unemployment Rate artificially excellent by every stretch as it hovers just under 5 . But whether its the Kansas City Fed or janet yellen herself, they probably dont put full stock in this. They are joining the legions of trainers that have understood the dynamic. I dont think its going to give you good clues. The fed can hang their hat on the improvement, whether they can take credit for it or not is debatable. I think the wage side isnt going to change much. And we dont pay much attention to fundamentals. S p lowers the outlook to negative joining moodys who have done it this month as well. Nobody cares. What was at the heart of that, negative outlook . Well the fact they are not turning into a consumption driven economy fast enough. Both those dynamics, great high poj they cease but they are difficult to accomplish, everybody is playing the currency game which puts the best level since september green back and euro best level since october. Well continue a post janet speech to see the dollar weaker and that is what traders are watching. Thats helping the markets right now and the u. S. At least having a weaker dollar. I think that will help the Earnings Results when we hear them. It may not have happened in q4 until just over the past few days manifest inflation with the u. S. Dollar. But the key tomorrow will be on wage growth, not necessarily how many people are unemployed looking at that number but wage growth will be key going forward. Great point. Want to note for everybody permanent to the discussion were having, 10year yield, 1. 7 , seems a disappointment for tomorrow or what do you make of that . What its been setting up for the fact that janet yellen will remain dovish and what she says carries the weight. The trade has been easy, you watch oil and watch the vix and listen to janet yellen and off you go. Is it that simple . It is were starting to see a slight decoupling there. And do you think that will continue into the Second Quarter . Look where wti is right now, weve determined in the trading patterns, 40 a barrel is that magic number. As long as wti hovers around that point youre going to get uncertainty in the market and youre going to have a trade that moves side ways. The one thing about rates, Financial Companies both banks and nonbanks have become a pretty large percentage again overnight. The fact that the 10yield is below 2 even though it did steepen a little bit. Its going to keep pressure on that sector and keep pressure on the market. Weve got to go at this point. Always good to see you. Thank you all for joining us, rick, well see you later as well. We have a news alert on donald trump. Donald trump just had a meeting with Reince Priebus and tweeted we had a nice meeting and well bring the party together. Just got off the phone with a trump adviser who gave a little context for this meeting. Remember donald trump a few days hired a veteran republican operative lobbyist Campaign Official and this was the beginning of manforts effort to bring discussions between the Trump Campaign and Republican National committee about things like the convention and financing of general election activities and thats what this was about, rather than the comments that donald trump made to Anderson Cooper the other day about not being committed to this pledge to support the republican nominee its not him. It was conceived in the spirit of donald trump binning eginnin integrate with the Republican Party. How about of a sea change are we talking about, if theyve gone from raising their hands to i will support the nominee to backing away from that . I dont think it really matters that much. If donald trump wins the delegates to be nominated at the Republican Convention in cleveland and he hasnt done that, he has a path to do that. He has to keep winning. If he does that, whether or not ted cruz comes out and says i support him or john kasich comes out and i support him, i dont think that matters all that much. You do have a question whether the inconstitutional elements of the Republican Party align with him. People like paul ryan, speaker of the house, mitch mcconnell, the majority leader in the senate, that has some significance in how the senate house candidates interact makes a difference. The particular endorsements of individual candidates, not so much. It will be interesting to see. Thank you so much, john harwood out of washington. Its a little more than 45 minutes to go here and market has moved negative this afternoon but only down about 36 points. The nasdaq is hanging into positive territory of 1. 5 . Up next, just because you build it, doesnt mean kuflts will necessarily come, apples new ipad pro and iphone se hit stores today. Well check out the scene. Its not too busy. Also ahead, trouble at the underperforming alphabet division nest. Youre watching cnbc, first in business worldwide. Welcome back, ibm is trading higher today, 168 from 140. You see ibm is at 150. They cited Strong Customer growth at the watson unit. Morgan stanley also says it has more confidence in the full year earnings estimates so a gain of 1. 74 for big blue. Saying that watson bet is beginning to pay off. New but somewhat familiar apple products hitting the stores today. Josh lipton went to check out demand at an apple location in pal loal to. How is it looking there . Reporter hes an engineer by training but tim cook is also a skilled salesman and here today putting those skills to use here at this apple store. He was here, talking to customers and posing for selfies and talking about the new products. The star of the show today that weve been talking about is that iphone se, small powerful, relatively cheap at 399. And cook is targeting a few different groups with this new device, one we know there are apple iphone fans who prefer that 4inch form factor. In 399 it can appeal to more price Conscious Consumers and caught up to android fans and they were at the store today and heard about the se because they are thinking about making the switch now to apple. For the products i guess its really cheap, fits better in my pocket and i think that i use the phone basically going skiing or biking and smaller size fits better in the pocket. Reporter now, ill tell you guys whenever i talk to ceo tim cook about the health of the iphone franchise he brings up a Record Number of anroid switchers hes seeing. Josh, thanks very much. Josh lipton in palo alto. Alphabets bet on nest labs could be in trouble considered an under performance based on initial goals. Adding to that the acquisition of drop cam has been a bumpy one as well. Former ceo greg duffy has been expressing discontent with the next ceo, was this a dumb move for alphabet. Recodes associate mark bergen written a new story on nests troubled market. For me it was surprising to realize how much of the story with nest was drop cam, which now has been rebranded as the nest cam. Can nest itself now live up to expectations as those camera sales have been slowing . Yeah, thanks for having me. The drop cam seems to be a really bad marriage. There was a huge culture clash, a lot of the team the original team, two founders have left and there was a lot of collision with tony, the ceo of nest. When he was brought on to google, he was a former apple executive and designed the ipod and meant to be infused google with apples hardware sensibility and give them a lot of strengths to complete with apple. So far that hasnt happened yet. Would we be scrutinizing the acquisition of nest if they hadnt paid 3. 2 million. What would they 340 million in revenue last year, thats a pretty sizable number by itself. When you consider how much they paid for the company, now its considered an under performer. Right, i mean it is hard to assess and 340 around that number is pretty impressive for the industry. You think about the smart home industry is pretty young, much younger than people anticipated and nest is clearly the leader. They sell Hardware Devices and they do software and services and those businesses are taking a long time to take off. Part of the price tag paid was for talent. You had key engineers that work at apple. The bigger question is if engineers and executives will stay. Also the question mark, goes to its shifted around the way it presents its financials and distributes its money internally and this bet on nest, including drop cam was an important one and it turns out the revenue there pretty much is that whole other line that they are now reporting as they start to break things out a little bit more. Its really important for the company, isnt it, to get this particular one right . It is. The other key factor here is google fiber, which is their broadband business. Thats been growing at the pretty steady clip. I wouldnt be surprised if that business exceeded nest, maybe not this year but possibly in the next couple of years. And of course the problems with nest and some of the rancor that has been there called into question the structure of the alphabet business model, whether this is a experiment thats not going to work on growing pains. How do you assess this . No one talked about this. They talk about the Berkshire Hathaway model and basically they are asking the ceos to run their own companies but they are still reporting up to larry and still reporting under the alphabet structure. And so i think that they are still trying to figure out what that means, if these companies will be fully independent and what happens if they go under. I dont think anyone has an answer right now. They need a if you go back and look at berkshire, its the fact you can find cs candy which took little investment over the years, threw off tons of cash and hugely scaleable. Lets face it berkshire h hathaway buys proven companies, not a lot of unproven new technology and new Business Models and untried ceos or products. There is that big difference between the two. Yeah, they are not selfdriving cars that Warren Buffett is invested in and no one tried this Smarthome Technology and there are a lot of people that believe it will be the future, connected devices will be all around us. Nest is pretty well positioned although apple and amazon are clearly two of the biggest competitors and a lot of people inside alphabet are concerned what amazon and apple are doing. Mark, thanks for joining us. Thanks, mark. Thanks for having me. Mark bergen, re code. Seven minutes left in the trading session and dow down 14 points. Closing out for the dow at least sort of a neutral First Quarter after a huge decline the first half of the quarter and then a big comeback, up maybe 1. 5 on the dow right now. The nasdaq in the green, up about 5. The model 3 will be unveiled tonight. Well tell you how you could make money off the big release without buying tesla stock itself coming up. Re at the t