Whether it could lead to the next blockbuster drug for amgen coming up. First, though, lets get to the latest fed speak and retail earnings with steve leaseman. Courtney reagan is monitoring that walmart earnings blowout. Steve, kick things off for us here. President bill dudley in a press conference earlier today following up on those sprys minutes yesterday suggesting a rate hike is possible and even likely in june or july if the economy cooperates as expected. Now, day after the minutes dudley said pretty much the same thing. He suggested that his base case is for a kind of for improvement that would warrant a hike. If im convinced that my forecast, my own forecast, is sort of untrack then i think a tightening in the summer, the june july time frame is a reasonable expectation so its a question of whether the economy is sort of cooperating and performing in line with my personal expectations. He did say the british referendum on brexit is something the fed is watching. Thats eight day that was feds june meeting could affect the feds decision. He gave us three things to watch. One is the probability of the leave vote. The second is the impact on financial conditions and the third is the strength of the overall u. S. Economy if it can withstand any fallout from a negative vote there. Lets be careful. Fed officials are quick to cautious they arent making a promise of a hike. Intentions to hike have been derailed by weak u. S. Growth or Global Financial turmoil so the best you can say is fed officials think the data will break their way by june and theyll hike around then if it does. Steve, thank you very much for that. Now lets get to walmarts strong earnings. Courtney, what is walmart doing right that target isnt . You know, targets quarter wasnt bad but it wasnt as strong as walmarts. Target exerted more caution than walmart lowering the secondquarter guidance while the midpoint of walmarts Second Quarter guidance is above the street. Theyll both beat on the bottom line and kept full year earnings forecast intact. Targets comp improved 1. 2 , underperforming expectations, walmarts u. S. Comp improved just below at 1 but that outperformed expectations. Both retailers comparable sales improved for the seventh straight quarter with traffic growing for the sixth consecutive quarter. Merchandise likely accounts for much of the difference. More than half of walmart sales is grocery while apparel, shoes, and accessories combined are less than 8 of sales. Apparel, which has been weak throughout the industry is 20 of target sales however the signature style category saw comps three times better than the total store. Target did add a thousand new grocery items while also reorganizing the space. The ceo said those were short term disruptions for many consumers. On average, walmarts core consumer has a lower income than targets so macro factors like higher minimum wage, relatively low fuel prices likely help ls walmart shoppers more. And another point of differentiation is the sales and traffic trends. On the phone, walmart cfo brett biggs told me most were good throughout the quarter. That differs from target and what other retailers saw with the april weakness. Kelly. Lets get to the Closing Bell Exchange now. Also we want to get to breaking news on oil, okay well save that and get to the exchange. Susan fulton is here, peter costa from empire executions and our own rick santelli. Welcome, everybody. Susan, talk to us about these markets and how youd play them given these reports about retail in the consumer. Well, first we do not think theres going to be a rate increase in june. We dont we have a low gdp, we have nothing showing us that momentum has begun. So we think that the fed is being politically wise by saying there might be but we dont think theyre going to be. Two, in terms of retail, you know, the monster is amazon so we like retailers that dont have to go into the battlefield with them. Lowes, for instance is a Home Improvement stop. Has lots of people to help you figure out how to do that, tjx is a Clothing Store that has lots of fun kinds of things you can do, Treasure Hunts you can do in the store, both of them continue to beat. We think those are the people that are going to continue to beat. Hang on for just a moment. Were going to break in with breaking news on oil demand. Susan lee has more on that. The American Petroleum institute came out saying that april demand, theyre seeing the strongest april demand for petroleum in eight years. Looks like deliveries were up 3. 6 in the month, this comes off the api report that said supplies were down last week so crude oil meantime were looking at prices closing close to the highs of the day. Back to you. Thanks for that, susan. Lets get back to the exchange. Rick, ill come to you. If we look at may as a whole, weve had the dollar strong and oil strong, two things you dont usually see hand in hand. Do you think one will have to break down pretty soon . Im one of the few people that would think the dollar has a huge impact obviously in dollar denominated commodities. But commodities can and have many times in the past gotten a life of their own so i think the commodity story isnt necessarily only an affect story but i think dollar story itself is hugely a fed story and to listen to all the remarks today, i was so happy yesterday that the word likely was there. I think everybody should have turned the microphones off right then because now it seems were debating likely and were right back to the same game. I dont know about anybody else but everybody, take a breath. After what . Over six years of virtually zero rates with one tightening, the head of the new york fed wants us to swallow the idea that hes going to have an epiphany in less than a month about a tightening. Im sorry but it just seems ridiculous. Ridiculous. Ridiculous that they are now suddenly going to go or ridiculous what do you mean . Ridiculous that we went from likely to all of a sudden data dependent in three and a half weeks. Either its likely or it isnt. This game of words, it isnt its worse than the emperor has no clothes, its the fact that we have a litany of tailors for a naked emperor and it gets bigger and the comments get crazier. All right. Peter, with that cautionary as we ask you to comment, what is happening . How are people trying to make sense of all this . Kelly, i think a lot of people are i think the expectation is that we are going to have a rate hike in july. I dont think june but i think it will happen in july. Thats where youve seen the volatility in the market based on that. Until they come out and the fed says no, were going to put this off until we Start Talking about in the september, whatever the reasons are, going back to ricks point, youre either doing it or not doing it. But they may Say Something in the interim that will make you believe something will happen later rather than sooner. Thats what the market is reacting to, dudleys comments this morning. Retail sales are good. Why would at no time market be up far . It was more about the rates than anything else. Weve seen markets sell off a bit in reaction to the fed developments in the last couple days but its not been the same across the board. Retail, as youve already touched on, one example. What about the banks . Is this a time to dip ones toes back into that sector . Great performance in them yesterday. Oh, no, no, no, no, no. Do not get back in the banks. The banks have a number of regulatory issues, they have a lot of problems with balancing and theyre trying to play a game that isnt popular anymore. I mean, the brokerage industry has changed geometrically in the last five years. Thats why we arent in any of the big brokerage firms, were in Td Ameritrade and schwab because they buy and sell on the margin. Theyre not trying to create product or pay expensive salaries. Susan, i want to show a pair of graphics here which youll probably be familiar with. They show how risky bonds have become. Its from the wall street journal. A one percentage point increase in yield the u. S. Ten year loses 9 of the value. Van knees 40year is down by a quarter. You dont see that rate hike coming but when people are looking for safety in these markets do you put them into bonds and fixed income or shift them into stocks . Right now were in very high quality were certainly short and we certainly have more of our bond allocation in cash than we would normally have and we are able to get a pretty decent dividend yield out of a high quality stock. Rick, how much flatter can the yield curve get . Weve seen it flatten recently and in the last 24 hours. Do you think the short end has priced in a june or july hike or just the fact that we will now get a hike at some point this year . With two years definitely has a good nose but its still blindfolded like everybody else in a dark room groping to handicap what the truth is and its had a big effect. But wilfred, think about this. This is fascinating. The curve wiggles a lot, trying to nail it down is like trying to hit a fly with a dart if 20 paces. If you considered today to be the close of the week, the yield curve steepens, two years as they set up about a dozen basis points and the ten year is up about 14. To answer your question more specifically, i dont think the yield curve means what people think it does but i think every time the war of words versus actions is aimed at tightening, the two year noteyearold goes up and vice versa goes down. Is that a reality . After listening to the fed speak, im not sure. Peter weve seen a big move in the bond market. Some reaction in equity bus do you think the fed will take comfort from the fact that they were flat and today they were down less than 1 . We havent fallen out of bed with markets even though a hike is back on the cards. I think this is again were going to be responding to everything the fed says. They may i dont know how much they really base their decision on what the market is doing and how the market reacted to whatever they say. I think theyre looking at a much bigger picture. I think they look at the theyre data dependent. Looking at equities to me is a small part of that picture. So i dont think its really i dont think theyre worried about it that much what the response here was. All right, rick what was that blind got a good nose . Blindfolded . The analogies are the best in the business. Rick, peter, susan, thank you guys, well leave it there, appreciate it. We have a little less than 50 minutes togethertogo in the markets. The dow is down under 17,500, s p is giving up nine and the nasdaq is the worst performer down 32. Still to come here, a gene mutation that reduces the risk of heart attacks. How amgen could use that information to create a blockbuster drug. And well go live to Charles De Gaulle airport in paris for the latest on the missing egyptian airliner. Youre watching cnbc, first in business worldwide. singing you wouldnt haul a load without checking your clearance. So why would you invest without checking brokercheck . Check your broker with brokercheck. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again man 1 i came as fast as i man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Welcome back. Watching markets here which green in selloff mode. The dow is down 90, act half a percent, the nasdaq is down 29 but check out Urban Outfitters and American Eagle. We brought you their earnings last night. Both are soaring in the market today. Urban outfitters revenue beat street estimates and same store sales surprised the upside, shares up 14 . American eagle also reporting betterthanexpected bottom line. Its Profit Margins improved an those shares are popping 18 . Certainly differentiation to talk about, not just fedrelated . You have arrow postal going bankrupt on the one hand, American Eagle doing better. Amgen has discovered a gene that reduces heart attack risk and this could lead to interesting results. This is a relatively new way Drug Companies are going after new targets. They sequenced the genomes of thousands of people and compare genetic differences they see between people to what happened in their lives in terms of their health. In this case, they looked at the risk for Heart Disease and heart attack and they found in sequencing a lot of icelandic people through their subsidiary was that people with a certain genetic mutation had a 34 lower risk of Heart Disease and heart attack which conferred into a year longer of life span. We talked to the ceo of Decode Genetics about how amgen will turn this into a drug. Take a listen. The mutation we found is a socalled loss of function mutation, it damages the function of the protein made by the genes so what amgen has started to do is develop an inhibitor of that protein hoping to basically simulate the fact of the mutation by a drug directed against this protein. So weve seen this happen at least once before with amgen and regenrons cholesterol drugs known as pcsk 9 inhibitors. Amgen says its about two years away before they test this new drug in humans. Are they the only ones on to this . They are the ones who have identified this gene but since they published in the the new england journal of medicine the doors are open and anybody can start developing drugs targeting this gene mutation. I wonder if this is the first time Something Like this would be attempted. What kind of peres accident there for identifying and trying to mimic a gene like this . Drug companies are doing it many much mar targeted ways. Region ron has an effort but in the past its been on an academic level. For instance these cholesterol drugs, this mutation was discovered at the university of texas that people naturally had a lower heart attack and Heart Disease risk who had this pcsk9 regeneration. It takes a long time to develop the drugs but theyve seen they can genetically validate the targets and theyre starting to do it in house. People are excited about this and thats what president obama wants to do with the Precision Medicine initiative. Is fda approval harder when based on a human gene . Probably the opposite. The fda likes the genetically validated targets so what people say is so exciting is this started out in people. Normally youre looking for these targets in nice so in people this genetic mutation confers a risk of heart attack. You would hope you would have a higher likelihood of translating that into a medicine that works on people. Thank you very much for that. Weve got minutes before the bell, the dow is down just shy of 100 points, about. 55 , similar moves in percentage terms for all three indices but were off the lows of the day. More after the bell retail earnings. Also heading your way, the gap and raw stores are on deck today. Well tell you what analysts are looking for as soon as they hit the tape. Also the latest developments on the egyptair plane that crashed in the Mediterranean Sea earlier this morning. Dont go anywhere, youre watching closing bell on cnbc. You guys have been doing buying during the break. Were down only 70 points. About. 4 for the dow, the s p is down about six or seven points. Theres the map for you. Half in green, utilities and Consumer Staples leading the charge up. 8 . The likes of industrials and health care offsetting that down. 8 . Now to the latest developments in the investigation of the egyptair plane crash. Hadley gamble joins us from Charles De Gaulle airport in paris. Whats the latest there, hadley . Reporter what we know is that the white house, at least, is watching this situation very closely and they even say its just too early to tell what happened to egyptair flight 804. Weve heard multiple conflicting reports all through the afternoon that there was debris found, the possibly of a life jacket. Now we understand from greek authority, theyre telling the Associated Press and afp that that debris found off the coast of crete was not a part of debris from an egyptair flight. This is interesting because what we know today is that this flight originated overnight here at Charles De Gaulle airport and they lost contact around 2 30 a. M. Local time, it slipped off their radar. Weve been told this flight began to make serious swerves before it plummeted but no further word yet from french, greek or egyptian authorities as to what has happened to this aircraft, this airbus a320. Another thing to note is this is another major blow for the government of president al sisi in egypt. This is the third incident to involve an egyptair flight in the last year alone. And of course that will have major implications for that countrys Tourism Sector, this is a Tourism Sector that support te s the egyptian economy. So major implications for egypt and also major implications possibly for the french government as well. Earlier today, the french decided they would extend this was a scheduled vote but they decided to extiend the current state of Emergency Powers and thats been in place since the attacks last year. Guys . Hadley, thank you for now. Hadley gamble. Lets go to colonel jack jacobs, a veteran of the u. S. Army, also denny kelly, a former pilot now principal at kelly james and associates which is an aviation accident investigation firm. Guys, thank you both for being here. Denny, beginning with you because this investigation is still playi